The german dax down nearly 3 today. Futures down sharply following yesterdays fed decision to stay pat on Interest Rates. Most fed policymakers are not ruling out a rate hike by the end of the year, four of them are forecasting an increase in 2016 or later. At yesterdays News Conference chair yellen outlined her case for holding off on a rate hike. Light of the heightened uncertainties abroad, and the slightly softer expected path for inflation, the committee judged it appropriate to wait for more evidence including some further improvement in the labor market to bolster its confidence that inflation will rise to 2 in the medium term. Jim, some video of you as the decision was coming across the screens. You were excited. Because you did not want them to hike. Now everyone is worried about what theyre calling the third mandate, somehow the rest of the world is driving our Monetary Policy. What i like about it, carl, its over with. We can focus on companies doing well and buy their stocks. This would have been a disaster. I think the market could have been down 500, 600 points quickly. The fact that europe is down is the fact that the dollar has put in a bottom. The euro is going higher. They are fretting over there. We should not take our queue from europe. I like the market up 356 points going into this. Thats dow points. You should repeal that because the brave and intrepid will take profits and well get a level playing field. I dont like the seasonal thing. September is a hard month. Lets pick among the rubble theres some good ones coming. The weeks following are quadruple witching in the latter half of september, they have been down 21 of 25. A tough time were about to head in. Well get earnings not far after that. Is your head worried about whether its october, december, Something Else . I always worry about a Government Shutdown, because Government Shutdown has knocked stocks down about 8 . I got to tell you, carl and david, im more lets say im less worried than i would be of a hike. I have been concerned, like janet yellen, is china falling apart, brazil rolling over. Countries where there would be a contagion not unlike 97 and 98. In that period you went down 17 from peak to trough. I dont think well be down 17 because the fed chose to stand pat. There are those who believe china and particularly on the credit side and the potential losses their bank als will have take because of the slowdown, they will, in fact, be under more pressure that will spread throughout the emerging markets and come back here. Not necessarily bring us into a recession but continue to keep growth rates depressed in the u. S. And perhaps stave the hand of the fed for a while longer while we watch that chinese currency have to deline more from where it is now. Look, this is a great point, david. A lot of people were saying were hostage to china were not hostage to china the rest of the world is not so hot. There was no reason, inflation being so low, that we should stir the pot and create more tu turmoil. A higher Interest Rate could hurt automobiles and housing. Those are the two areas that are strong. Is there something that says when something is strong we have to make it weaker . Thats what a rate hike would have done. I dont think its wrong we should have some industries doing well. We dont want to encourage the fed to say lets pull the plug on those two because theyre doing well. You talked to john stump last night on mad money. Lets take a quick listen. I think todays comments and the activity by the fed or lack of activity was statement about the rest of the world more so than the u. S. When you look at negative rates in some places, slowing in china, the eu doing only okay, thats got a big influence on the Global Economy. He mentions negative rates. Yellen made it clear, they didnt seriously consider that. But there were some on the committee who brought it up. That took some people by surpris surprise. No doubt about it. You look at john stump, john stump is probably the head of what i regard as the most well regarded bank in the world. Has a huge percentage share. He has 95 to 96 of his business is domestic, yet he still felt the idea of his customers could be hurt. Yesterday that stock was down almost 3 . Stump went on to say he felt Interest Rates would be kept lower longer and hes moving out on the curve to get a better return. That interest margin could surprise to the upside. What why do i mention Net Interest Margin . That controls where stocks go. Warren buffett owns almost 10 of this bank. I think Warren Buffett has faith in stump. Its a week where we got dovish comments from the fed. Federal express guidance. Johnson control starting layoffs today. At the same time cable vision, amc, bud, another story of slowing growth. Dont forget hewlettpackard. Yeah. Hp. Im out here in san francisco. Theres a sub text. The sub text is fire people. Most devices and Technology Software ive seen out here is the way to get rid of the executive assistant, middle person, several layers of management. When i listen to meg whitman shes who theyre appealing to you can get rid of 20,000 people and expand your top line and make it so youre your bottom line goes up more because you fired so many people. This is about productivity. The fed is conscious of the fact that Many Companies out here have made it so your cell phone replaces thousands of people. And we have to live with that. Thats what deflation is about. David did a fabulous documentary on amazon. That documentary was about deflation. People who are putting things in boxes at minimum wage. David, you know thats a sub text that is a secular decline in how well people can do in this country. No doubt about it. That is the longterm question, i think, for the ability of the middle class to even stay where it is, jim, create jobs as it is. Youre not even talking yet about automated automobiles, which, of course, its coming. I dont know if you had a chance to visit with travis while you were out there. Whether its uber or whether one day we think about the huge fleet of trucks from the likes of u. P. S. Or fedex, what it will mean if, in fact, many of those jobs go away. I know, im talking years from now, nonetheless these are things you have to wonder about. Each advance in Technology Brings more jobs rather than fewer. Im not necessarily a believer. Im not a believer in that at all. If isaacson were here, he would talk about the beginning of the computer and these mechanical looms, and how the ludites were smashing them because they thought it would kill all the jobs. That did not happen. Textiles and computers created more jobs. We can only hope. I have a hard time seeing it. Maybe it makes it easier for a business to start. I understand the analogy, but the laudites were people who fought problem gres, and i understand that progress is always going to win. Progress in this case is to make it so the enterprise has fewer people and makes more money. When i look at the devices yesterday, i spent about four hours looking at devices and software, the devices and software are about laying off people. Maybe those people can find a job, but are they finding a job at task rabbit . Do they have a bicycle and taking things from point a to point b . Those are loom jobs. Theyre turning people into laudit laudites. Jim what a week its been for you in san francisco. Dream force wraps up today. Jim interviewed the ceo of kales force, fitbit, hes not tonight. Tonight he will have an interview with netflix ceo Reed Hastings, which we may get a taste of later on this morning. You must be excited about that. Im so fired up about this that i just decided to destroy my new home life by staying out here an additional day. Sometimes thats a casualty. That casualty, lets just say ill patch that thing up by sunday. Good. I hope so dont leave her waiting too long. The eagles play. And im dragging the wife to the eagles game. All right, so i destroyed everything. For Reed Hastings, its worth it. Its so funfunny, ive been attending this Goldman Sachs teleconference the last couple days, so much of the conversation ends up being about netflix. Its almost the center of all the concerns in media. That man has an awful lot i want to hear about. Not the least of which, of course, is somehow their ability to turn washington to their advantage so that theyre basically not paying anybody for using up a lot of the band width every night in the United States. Fascinating how hes managed to do that. Not to mention 306r7b8 30 of the bandwidth. This is a populist inspired country. People dont like buffering. I think netflix uniquely said Cable Companies are pro buffering. Thats not true. Nobody likes buffering. The idea that you can go to washington and defend what is a system that hastings has called buffering, i dont know. How you can binge and buffer . Binging and buffering dont go together. Hastings, hes disintermediating cable. They certainly destroyed a lot of jobs at blockbuster, hired a lot of programmers, code writers. And keeping people in hollywood busy. Mexican hollywood, soon italian hollywood, worldwide. On a weekend when the emmys are coming sunday. By the way, i should mention the german dax is down 20 now. Were hitting bare market levels from their april 10th intraday high. Any reason . Theres been some discussion about the fed and whether or not they created more pressure now on the europeanses to increase qe. Hiking here might have given them some cover, thats not enough for you. No, its time that germany says maybe austerity is not good for us. Its not good for the humanitarian crisis theyre having. This would be the time, if the germans are real about being, lets say, hospitable to refugees and trying to solve the humanitarian crisis, its time for them to spend money. Time for them to build roads. Time to start jobs. They got tho do to do it. If they dont, they can be a stagnation engine, as they have been for a long time. Solve the ukraine, too, guys. Thats not helping. Busy morning for you. Woo youre not going anywhere. When we come back, one year ago alibabas pricing so much has happened since its debut. Well look at the past, strength and future. Our eyes on the german dax. Futures here getting softer by the moment. I could get used to this. Now you can, with the luxuriously transformed 2016 lexus es and es hybrid. S p needs to hold 1961 for the week to put two backtoback weeks together. The first time its done that since june. Expirations mean volumes likely to be high and maybe volatility the latter half of the day. One year ago alibaba priced its initial Public Offering which went on to become the largest ever at 25 billion. They debuted on wall street the following day. We spoke with jack ma here at post nine and asked him how big he thinks alibaba could become. Here was his response. We hope next 15 years the world change because of us. We want to be bigger than walmart. Bigger its not the size, we want to learn from walmart. They changed the business the last century. We hope 15 years later that they say this is the company like microsoft, like ibm, that changed the world. After surging to a high of 120 in november of 2014, right on singles day when i was out there, alibaba, as you see, has hit hard times. In fact, falling below its initial Public Offering price of 68 a share. There it sits at 65. Of course, it is still the way to play the chinese consumer, jim. But many people are not interested in playing that now given what appears to be a slow down in the chinese economy. We detailed some of the goings on in the chinese stock market, which many would argue is not really about the chinese economy as much as it is about psychology. Negative piece in barrons, significant response from alibaba, five pages long, detailing the reasons it believes that was an incorrect view of the company. Here we sit at 65. Look, were still stuck with the facts. The Consumer Companies that sell into china tell us its not a bad time. Talking about apple, starbucks and nike. Three different price points, three different kinds of products. Theyre saying we have up to the minute information that things are quite good. Its not a disaster. To be levered to alibaba stock ala yahoo is a disaster. Yeah. Yahoo of course, still trying to deliberate on whether or not go on with its expected spinoff of a roughly 15 stake in alibaba into a separate Company Despite the fact that the irs wont give it a private letter ruling on that. We watched its stock hover around the 30 level. Alibaba at 66. Clearly the multiples have come down. So has the growth rate a bit, no doubt. To you look at this level . I think there are possibilities. I know no one wants to hear this, but that china will eventually get betterment i have never seen a whole country of 1. 3 billion that we decided is on a permanent trajectory down. There will be a price of alibaba, but heres the problem. Owning a chinese stock is not same as owning american stock. I find theyre opaque. I know you have a great relationship. I come back and say remember when amazon didnt tell us anything and we had to believe and have faith . Thats where i feel we are with alibaba. Have faith with alibaba is not working for me. And that, in fact, is what jack ma said many times. Trust me. He does seem to be a fairly straightforward and honest fellow, but thats the key part of it, jim. You have to know ill do the right thing. Obviously as we all know, customers come first for the company, employees second, shareholders. Hes thinking about the longterm. 103 years at least. He wants to be part of the last 100 years this century and the next one. Interesting year. You know what im doing now . What. Im raising price target 2,115. Tesla they go out 2020. Im taking out my price target to im going to 92 for 2215. Thats pretty modest on a discounted cash flow basis. Thats fairly modest. Yeah. 100 years. Ill discount that. When you think longterm, its not its not as good as you think. When we come back, cramers mad dash. Well count down to the opening bell. Im here at the Td Ameritrade trader offices. Ahh. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place that lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim . For all the confidence you need. Td ameritrade. You got this. So youre a Small Business expert from at t . Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep it all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberry apple scones smell about done. Ahh, youre good. I like to bake. Add new Business Services with at t and get up to 500 in total savings. Some softness in the premarket. Were about 6 1 2 minutes before the bell. Jim, i know youre watching lilly today. We have to see, when you have a stock market looking down 300 points, you have the guys in pajamas trading furiously overnight and dropping like flies. Lets look at the stock that had the best news in the marketplace of s p 500. This is eli lilly. A drug they have its going to be on the market. Its a diabetes drug that cuts the heart rate risk dramatically for death. The stock was up big. If lily can keep the pace, you have to say maybe this market is not as ball as i think. Where does this fit on the list of stocks i know that interest you once prices get to saernt leve a certain level. I Like Pharmaceuticals in general what yellen is about is making it so the dollar is not as strong. These companies do well. Im looking to defend stocks. I want to buy them. I know the books are out of favor, watch wells, john stump told you im not nearly as hostage to the fed funds rate as you think. The bank group needs to hold if were going to get traction. Watch general mills, the reinvention of that company happening underneath us. Thats a good yield that can raise its dividend. That will be another stock that will be the tale of the tape. Well get the opening bell in about five minutes. Dont go anywhere. Awe believe active management can protect capital long term. Active management can tap global insights. Active management can take calculated risks. Active management can seek to outperform. Because active Investment Management isnt reactive. Its active. Thats the power of active management. Youre watching cnbcs squawk on the street live from the Financial Capital of the world. The opening bell in a couple minutes. Premarket has been soft for most of the morning. Global markets reassess Global Growth in light of what fed said yesterday. Before this morning all of the markets were looking at backtoback gains for the First Time Since july, june or may, depending on the index. Also interestingly, jim, all of them were up virtually the same percentage for the week. About 1. 5 for all three. We got buy backs continues. We heard from northrup earlier in the week. Today its texan with the buy back and the dividend hike. Texas instruments has retired a lot of stock in the last few years, 10 in the last 3 1 2 years. The dividend boost. These are indicative of texas. Iti upgraded by bank of america merrill. Thats Wireless Charging which all of us desperately want. These companies will go down today. You say i cant buy texas instruments. Theyre in there buying texas instruments. Lime looking at johnson johnson. Went up a couple points this week. I get that, nothing has happened to johnson and johnson. Something did happen to texas instruments. Something did happen in the cable industry. Something did happen when i look at companies that continue to buy back stocks into weakness. Apple, the new phone is doing better. There is news that was good, that was obscure by the fed. I think we return to the news, we just need more of it. Will be hard. Next week, we hear from yellen on thursday. Well get some pmis, the pope flying to cuba tomorrow and chinese president next week with that state visit. It will be bananas. Theres the opening bell. The look at the s p 500 at the bottom of the green. At the big board, penumbra celebrating its ipo. At the nasdaq, fighting childhood hunger in america with habit and nokid hungry. You know, look, i think were when we listen to the health care companies, the combinations are extraordinary. I like those. At dream force yesterday, much of what was going on in technology is to make it so doctors, hospitals and the customer, the patient, never thought of them as the customer before, will be able to have better decisions being made which will save money for the system. And also make the customer better. Theres so much progress out here. Its so hard to be negative out here in san francisco, guys, as the tape indicates. Theres so much invention, too much progress. But i understand futures are down because of europe. We have to let all of this sort out. A lot of people were talking about a retest. I find that going back to the august lows, i dont think it can happen. I recognize the fact that seasonally people wanted to buy now and trade later. Lets look at prices that have come down and that are attractive that will work for Domestic Companies like home depot, lows, tjx, which has gotten a lot of strength, because of the home goods division. The domestics is another place to go. The banks are, as you might expect, down again after yesterday. Also responding to the decision not to raise rates. Net interest margin, all been waiting for it to start to go up if, in fact, rates go up. Thats not happening. The wall street journal today talking about the fact that looking at ways to cut costs. Though to your point earlier with mr. Stump, they seem to be fairly well positioned for the world weve been in now for seven years. That being at the zero bound. But im talking about, of course, as you might guess, jpmorgan down 3 . Bank of america down 1. 5 . Citi down 2 . Goldman sachs. You get the picture. The banks taking a shellacking, if you will, on the lack of a rate rise. Something that the cos of these companies had hoped for, but didnt get. At least not this time. Well Start Talking about december we probably already are, carl. The debate raging on as to when the fed does move. Goldman today says december is their base case. They think the likelihood of an october move is low. But then fisher told us on our air earlier in the week that decembers problematic because it doesnt allow traders and investors to settle up by year end. Well toss that one around for weeks, whether we like it or not. Thats true. Im focused on the fxe, the dollar versus the europe. Why . Were about to go into reporting season. If you wanted to keep this benchmark in mind, look at fxe 110. People can do this at home. You can monitor that. Most of the companies that i deal with when they reported last were using the basis of about 110. Just to make this less complicated. They thought the dollar would be stronger. They led you to believe that numbers will have to come down. If the dollar stays where it is or gets weaker, numbers go higher. In the end, we can talk about the fed endlessly. This market survives and thrives on a lower dollar. Because estimates come up. Thats what im watching. Thanking janet yellen. You gave that one a boost. Funny you say that as procter gamble, while negative is the best performing component. But some of these banks, ahead of this curve, lying down completely. Jpm and goldman at the bottom. No a surprise. Some other research to hit, macys, a name we talk about a lot, jim. Morgan stanley came out with a note, not sure you saw it. They say they worked with their read analysts, come up with an answer in their belief as to whether macy also move ahead with this opco propc osho thing. Operating company, they question whether burdening the opco with significant rent obligations, reducing flexibility is the right longterm decision. They do advocate opportunistic monetizing and selling real estate, but they basically come down on the camp that says it is unlikely in their view. Macys, of course we delivered there for ten minutes. It went away. I think the company had solutions not that the activists had. Company got a lot of hot money in it in the interim, macys reported some of the most disappointing samestore sales numbers, where other Companies Like nordstrom have done well. Macys is a situation where the fundamentals are not that good. A recognition to jcpenney is has come back. Nordstrom is coming on strong. They talked about how the omni Company Still had kinks in it. You cant have an omni company with kinks in it because of amazon. Were still waiting on beer to be a deal. Everything i hear indicates that theyre already making some progress, and theyll be moving as quickly as they possibly can at abi in terms of their potential bid for sab. The key again, the Santo Domingo family and altria. One would think they would like to get out if they can at a nice premium, bring in a new Management Team to run assets. Well see. The big cable deal yesterday, did want to mention another deal, not nearly as big or large and more of a split, but nrg energy. This company has run into a buzz saw in the stock market in part because of lower oil prices. David crane, the ceo, got a lot of heat from shareholders. They are splitting, this transition into green co, which will consist of home solar, the renewable operations. Its going to be a standalone entity as of the 1st of next year. And its going to restrain their need for capital there or the need for nrg to give it more capital and hence the ability to return some of that capital to shareholders. Stock not really responding to it this morning but worth mentioning because theyre running out of patience with this guy at nrg. David crane has come on the show a bunch of times. Hes a visionary in an industry where we dont want vision. We Want Companies that have given us some Dividend Increase every year. The market likes American Electric power, aep, likes dominion. The market likes con ed. They look at what david crane is doing theyre saying we dont want a growth utility. We want a utility that pays a nice dividend. Its almost paying a nice dividend because the stock has come down so much. Ah, in the meantime the journal looks at defaults in emp. 4. 8 , the highest since 99. Maybe they get reprieve because credit stays loser. Still a lot of discussion about how much pain is being felt by certain players, not even in the u. S. With oil at these levels. Of course, sampson went chapter 11, that was led by kkr. The key there being they did add a lot of debt to the Balance Sheet that wasnt otherwise needed except that they took it private. A big blow for kkr, not a surprise. Weve been watching that company deal with its problem force quite some time. Carl to your point, theres more coming. There seems to be no doubt about that, especially with wti below 50. And the banks as we said taking a closer look at all of those relationships they have with so many of these enp companies and the fact theyll become more stringent on credit. No doubt well get a lot of detaud defaul defaults, and restructurings. The dow down about 200 at open. Lets get to bob pisani. Not surprisingly, 10 1 declining to advancing stocks. Theyre all essentially to the down side. Lets put up the sectors for a moment and show you financials are leading to the down side. Thats not a surprise. Really everything is down a little more than 1 . Industrials, technology, and materials. Remember, we had big volume at the open. This is a quadruple witching, the quarterly expiration of stock index and individual stock futures and options. We had large volume at the open. It very, very large volume at the opening here. Now that the fed made its decision, we can turn to whats important, which is the state of the Global Economy. In particular earnings. The s p 500 earnings have not been improving. Remember, we were expecting earnings to be positive in the second half of the year. Thats not been moving in that direction. We have not seen improvement in the last several weeks. 4 decline in earnings for qq3. And revenues are down again that needs time prove and its not doing that. And the big problem is a couple of sectors are killing us. You know what they are. The energy sector, and materials. No improvement at all. Energy was down 50 in q1, q2, and now 65 in q3. This is killing everything. Earnings would be positive if we took out energy, but you cant do that. You cant take out energy, its a big part of the business. Materials, you know about the global collapse in commodities. These two sectors are weighing on things. Theyre pinning their hoping to somehow getting positive on three sectors. Firsts is consumer discretionary. Thats looking good. Auto sales are good. Home sales, Home Building sales are good. Even some retailers are good, though parts of that are problematic. Thats okay. Health care looking okay. The problem i have and the reason you see today financials are down that number there. Theyre expecting big gains from financials, but partly on increasing Interest Rates to help out a lot of banks. Thats going to be a problem because those banks are not going to get these increases in Interest Rates that they need. This is a particular problem for regional banks that play that spread very effectively. And thats why, put up regional banks. Thats why you can see the regional banks all to the down side rather notably today. Keycorp. Wells fargo, comerica, sun trust, fifth third, all those guys are down more than 2 . The question is where can we possibly go from here . The early signs from the corporations are not that helpful. We need to see Revenue Growth. Were really not getting in any appreciable way. This week, we had fedex come out, make comments, we had oracle come out and make comments. Neither one was particularly encouraging. Im more hopeful next week, we will get some big consumer names coming out. Some Big Companies have odd reporting fiscal years. Lennar will come out, big home builder. Expecting good things. Autozone coming out. The week after that costco will be coming out. All three are big Consumer Companies that will provide some insight into the consumer. Hopefully, david, theyll have some more positive things to say. What we need, bottom line, is better Revenue Growth and so far were just not seeing it. Right now the dow down 218 points. David, back to you. Thank you very much, bob pisani. One place a company may not be seeing bottom line growth is verizon. The company telling us yesterday its earnings in 16 will be plateaued with 2015. The stock took a hit. I did have an opportunity to sit down with the companys ceo yesterday at the Goldman Sachs conference in talk about that earnings plateau, if you will. They talk b of course, the new plans the customers are taking, equipment incentive plans and how theyre changing the base and theyre further behind some of their competitors like at t in doing so. I also asked isnt it just about the pricing of a wireless contract . Theres a lot of competition going on in the industry right now. Youve got apple doing some interesting things on leasing. You have google with their google fi, the Cable Companies with wifi. When it comes to pricing for what im paying for my phone on a monthly rate, are your expectations that youll see a competitive market that will force verizon to be there . The way we always looked at this, we played our game, david, because of the superior network, we can charge a premium, but we have to be generally 15 to 20 within what the lowest price of the competition is. As they drop their prices, then we will have to do some responses. Weve done that. Who knows, at some point they may have some others to compete with in the mobile market in the u. S. Including French Company altise. Yesterday during a session at the goldman conference, the man behind altise, who has built that company into a deal to acquire cable vision, talked about his vision for the company. A lot of the veision was making it seem more reasonable given the high multiples they are paying. He says he sees altice some bay owning a wireless operator in the u. S. Some think some day should be sooner. No doubt yesterday it was said even if altice mopped up the rest of the cable operators, its market share of cable broadband would be less than 25 , however altice may not be able to sequence its their timing. And the cable vision deal is large enough for investors to again consider the possibilities for cables entry into wireless. Didnt seem like they were in a hurry into wireless. Mr. Drahi in a standing room only session. Went over a lot of different ways they believe they will be able to save money. They need to. Hes talking about taking 800 million in costs out of cablevision. Seems hard to imagine they can get to that he says we run a company in france, its twice as large as cablevision, but the kothss costs of running cablevision are twice as large. I dont understand that he talked about 60 million a year electric bill. He talked about 300 people or more at cablevision making more than 300,000 a year and said this, we will change. They look through the entire cost structure. He wants to high young people, not pay them thatch mon much mot give them stock. And he wants to create an acquisition currency, one he can use to consolidate whats left of the cable business, perhaps not just here but in other places and potentially a foray into wireless. Not the last well hear of mr. Drahi. He has yet to sit down for a oneonone. That day will come. Lets head to the bond pits jim, im told to bring you into the mix. Only dau i habac because mor stanley had a note out today, maybe theyre low balling. At 5 yield in a rate environment that we have, call me a buyer verizon. Really . Right here. At 44 and change. 5 with some upside with the underpromising lowell mcadam. This is the kind of thing when dominion is going higher, edison. Look at your screen about what is working. This is utility when it gets to 5 . I didnt hear anything you said that tells me the cash flow will be hurting. Yeah. No. Agreed. They are still a giant. Clearly rely on what they believe is a superior network, as you well know, despite what others may say. Lets move on to the bond pits. You saw the bond intro. Now well get to rick santelli. Hi, rick. Good morning, david. No hike in rates yesterday, certainly no spike in stocks today. Theres some traders scratching their heads on the floor. But its hard to get a gps. It is hard to put all the pieces together when theres so many juggling so many issues that affect the market that the market cant price. At least cant price in a discoverytype fashion. Look at the twoday of twos. The short end had the rug moved out from underneath it. What is fascinating is that basically where the twoyear came to stop, right around 66 basis points, thats unchanged on the year. Same could be said for tens. Look at the twoday of tens. They gave a lot back. What are they paying attention to . We talked about this. The interim volatility with the fed, because its hard to extricate yourself when you put boundaries around markets. But in the end, it keeps coming back to unchanged because in the grand scream of things, maybe the fed has pillar issues, but there is no issue recognizing that Global Forces eventually are going to push the global on a lower glide path. How that turns out may be reflected in yields and tens and in bunds. If we look at the year to date of 30s, the only maturity that is higher in yield, settled at 275 last year, but its become to where everything was aligned before the kind of weak quiet period for the Federal Reserve. Foreign exchange no surprise. Businesses happy, the dollar is lower because they like others to pay less for our goods than we do even though were a consumption company. The twoday euro moving up. The dax is down. The year to day that the dax shows its at a precarious level when you look at the spike we had about three weeks ago. Carl, back to you. Thank you very much. When we come back, ggp capitals hany nada on the oneyear anniversary of that deal getting priced. S p about three points away from breaking even for the week. Surprise we heard you got a job as a developer its official, i work for ge what . Wow. Yeah okay. Guys, ill be writing a new language for machines so planes, trains, even hospitals can work better. Oh sorry, i was trying to put it away. Got it on the cake. So youre going to work on a train . Not on a train. On trains youre not gonna develop stuff anymore . No i am. Do you know what ge is . The fed doesnt raise Interest Rates, the stock market says, ugh. Not so good. Not now. The dow down 1. 6 . The s p 500 down about 1. 3 . The general reception is a negative one for equities. Up next, stop trading with jim. This just in 50 million customers data was not compromised this morning in a Security Breach that didnt happen. Wall street. Not rattled. At all. No. Not at all. Not at all. I mean, look at the day. Sir. Sir. What went right . What went right . Everything. Thank you. With threat intelligence, behavioral analytics, and 6000 experts, ibm security will help keep you out of the news. My dads company wasnt hacked today. Cool. Time for cramer a. Adobe was down badly in the premarket hours. But look at this stock flying. If the news flow is good, you can have a stock that can fight this trend. Eli lilly doing well. And lets understand if there is something positive it can transcend the futures and it wouldnt if janet yellen had raised rates. Jim, we know whats coming up tonight what do you want to ask Reed Hastings . I want to know whether the world has so changed that we just dislike paying a lot. We want a value, we want programming, and how come Reed Hastings has figured this out and no one else has . Maybe it comes from the customer. This is a customer centric company, the likes of which i havent seen in ages. Its working. Jim, congratulations on an amazing week of coverage. Please come home. We miss you. Cant wait to see you. Jim cramer. Same here. Cant wait to get back. When we come back, a lot more on this mornings selloff in a moment. It took Joel Silverman years to become a master dog trainer. But only a few commands to master depositing checks at chase atms. Technology designed for you. So you can easily master the way you bank. Good friday morning. Welcome back to squawk on the street. Im Carl Quintanilla with sara eisen. Happy friday may not be the term for it. Dow down 2660, s p 500 down 25 as u. S. Markets, european markets as well reassessing the future of Global Growth after what the fed said yesterday. Oil back to 75. Rick santelli has more news today on leading Economic Indicators. Leading Economic Indicator force august were up 0. 1 . Last month down 0. 2 . If you look at the high water mark, it was april, may, june up 0. 6 , minus 0. 2 . 0. 1 wont instill a lot of confidence, but august is an old number. We will continue to digest the aftermath of the nonrate hike and the notion well be doing all of this all over again in october, november, december, march and maybe points beyond. Simon . Lets bring in our senior economic reporter, steve liesman. The dow down 271 points. What do you make of that . I think theres some sense out there that the feds decision not to raise rates because of what it says are recent Global Economic and final developments sends a message, things are worse than you think. Or the fed is being extra cautious. Here is a statement, we think this raises the risk that the fed will not be able to lift off this year in the event that volatility persists in overseas asset markets or china reports a marked slowing in Economic Growth. This is not a confidence boosting statement. Janet yellen said the domestic economy, if you take it by itself, would warrant a hike on its own. She didnt let on that the fed had inside knowledge. Were asking ourselves how economic and financial developments in the Global Economy affect the risk to our outlook for our two goals. And whether or not they create unbalanced risks that we want to wait to resolve. Asking but not answering. Still the fed lowered its inflation forecast substantially below the average in the cnbc fed survey for this year and next. That suggests the fed sees more impact from a stronger dollar and weaker overseas growth than the street does. I asked yellen how long will it take until the rates take effect throughout the system . Many on the wall street see the fed hike in 2015 by 64 . Thats down from 80 before the meeting. Not to hike sends a chilling signal that things are worse than they appear. Thats always the danger for the fed. Many think the impact of china on the u. S. Wants to be exaggerated. Yellen wants to make sure thats case, sara. Absolute liabsolutely, it wi debate. The markets deep in the red. The dow down 270. All dow stokes lower. Perhaps amid fears of Global Growth and the aftermath of the fed decision to do nothing. Where should investors be focusing now . Joining us to talk through some strategy, dan suzuki. I thought investors loved zero Interest Rates, lower for longer. Has that changed . I think it has. Were coming close to the end of an unprecedented period of easy Monetary Policy. I think investors are understandably hesitant to take on a lot of risk ahead of that change in Monetary Policy. I think that prolongs this period of uncertainty that weve been in. I think that means that you could see a continued leadership from growth and yield which have been the leaders of the past. I think the trade is to buy cheap cyclicals. Though you could see a lot of volatility until we get resolution around the fed decision. Just to push back on this idea, dont we want the Federal Reserve to be cautious and not come out and shock the markets . The bond market was not pricing in a move yesterday. If the fed had gone ahead and pulled the trigger and lifted Interest Rates that could have been a big shock to the system as well. Why do you think were getting such a sharp negative reaction given the fact that it was priced in to the fed funds futures . I think youre right in the sense theres concern about what the shift of Monetary Policy will do what will be the impact of rising Interest Rates on emerging markets, currencies and commodities. The main implication is that investors dont wanted to take on a lot of risk. Our general view is that as we saw in yesterdays decision that the fed is extremely willing to be more gradual and cautious than theyve ever been in prior tightening cycles. Given that, thats not going derail the economy. And the fact that we cant get to a liftoff point has investors concerned about what the impact on the market will be. I think investors generally want to see that the market is not going to collapse when we see Interest Rates go up and emerging markets will continue to grow. If they see that theyll be willing to take risks. They dont want do it ahead of tichlt. Time. The u. S. Two year yields sharply lower. Yesterday they had one of their biggest rallies, the treasuries, in years does that tell you the bond market is not pricing in a move until next year . When do you expect it to happen . Right now youre seeing this push and pull between strong u. S. Economy and concerns around Global Growth. Ultimately well see that the u. S. The strength of the u. S. Economy will win out. We think well approach that natural rate of unemployment at 4. 9 by december which should be enough to get the fed to raise rates in december. I think going forward, after that, were looking for about 25 basis points every other meeting. That equates to about 100 basis points a year, less than half the pace of historical tightening cycles. Thats the key point for markets. You hope or you think they might do that further down the line what is the trajectory of the stock market here . Because, i mean, the fed put itself on the side of risk assets yesterday. The problem is that it may now be held hostage to not only the data but also the markets. Ubs is suggesting if they have actually exacerbated volatility around the world, then this is a clear policy error. Do you think theyve done that and do you think it is. I do think its a net negative for risk assets that they delayed the rate hike. I think youve seen volatility pick up on the back of that. What the the implication for yesterdays move is that you will be in a period where volatility will be here to stay until you see the markets suggest what im really after is do you think does the market continue to decline . If so, in what sort of pattern does it decline for people looking for opportunity . Is this the beginning of a long term malaise . I dont think its the beginning of a longterm malaise. They will have that first hike in december. If thats the case, youre looking at a few more months of prolonged uncertainty and volatility. We can retest those pry prior lows in august. Do you think we need to see a retest of the august lows to go back higher . I ask because valuations have become a part of the discussion. David tepper talked about it last week on squawk box. You heard it from investors saying that we need to reset valuations in order to move higher. I dont think we need to see a retest of the prior lows. If you look at valuations, were less concerned. If you look at the market today, were trading 15 times forward pe. Thats in line with historical average. You could argue theres reasons for given how low Interest Rate also stay for the foreseeable future that you should see valuations higher. I think buffett was on cnbc a few weeks ago making thats will stay low for a long period of time, he would buy stocks hand over fist. Thats what well get for the time being with the dow down 221. Thanks for joining us, dan. Thank you. Up next, be careful what you wish for. Stocks selling off the day after the fed didnt move on Interest Rates. Well talk to the former fed governor about that after this. Lease the 2015 rc 350 for 429 a month for 36 months. See your lexus dealer. A one, a two, a three percent cnext. Ack theres gotta be a better way to find the right card. Creditcards. Com lets you compare hundreds of cards to find the one thats right for you. Just search, compare, and apply at creditcards. Com. Stocks heading lower at this hour after some yelling in europe. Global marketing reassessing global grove after the feds dovish tone yesterday. While a rate hike still could come this year, here is fed chair yellens case for holding off now. In light of the heightened uncertainties abroad and a softer than expected path for inflation, the committee judged it appropriate to wait for more evidence, including further improvement in the labor market, to bolster its confidence that inflation will rise to 2 in the medium term. This morning, first on cnbc, former fed governor and Columbia University economics professor, fred mishkin. Great to see you. Good morning. Good morning. We went into this meeting asking, okay, to what degree is Global Growth, truly Global Growth going to weigh at the table. Some former fed officials told us not as much as you might think. Then, bam, we get this. Were you surprised . Well, i was surprised at the emphases on Global Growth, particularly because this is not a huge factor in the feds decisions before. The fed does care much about the impact of Global Factors of financial markets, but less so in terms of its impact on the u. S. Economy because it usually is not that great that was a very, very interesting part of the statement. It was used as an excuse not to lift rates. There is lots of criticism that the fed is too dependent on what market is doing, what china is doing and that it will box itself into a corner. Is that criticism justified . I think it is justified, but the problem wasnt the action but the communication that went with it. If the fed believe thats economy is weak and they decided not to move at this meeting, they should indicate that they wont move in the future unless they see much more positive developments on the inflation front. They didnt do that. That was a real problem, particularly because in this situation, theyve indicated theyre not going to move, and theres a question about whether theyre ever going to move. Thats a really big problem for the them. I think what this set of central bankers seem to have lost sight of is that theyre a key injector of confidence into the whole system, into the economy and financial markets. Janet yellen is the most powerful central banker in the world. If you look at other leaders, president s, ceos, they dont wear their hearts on the sleeves to this degree. They instill confidence and allow people to build on a positive framework. Drahi, i will do everything to save the euro, or like Alan Greenspan where he was more cryptic, thats not what we get from these guys. The key is clarity. Which is if youre going to do something, say what youre going to do and mean it. The problem here is that they came out with a very dovish statement indicating they would not move, and yet they actually keep on saying well do something this year. I think thats inconsistent with actually the message that was in the statement. And that inconsistency is creating uncertainty. And that creates exactly the kind of problems youre describing, and actually could hurt the economy. Fred, we got futures indicating 23 chance of october, 49 in december, 13 of 17 fed officials see a hike this year. Why the disconnect . Are they deluding themselves . Lying . Why do we not believe them . Sometimes its hard to admit to what you want to do thats whats going on here. If they didnt move at this meeting, why should they move at the next two . They basically said theyre concerned about whats happening in the worldwide economy. They dont see inflation as being high enough. Wage growth is not high enough. In those situations then theres a reason not to move. But to sit there and say, gee, we sort of blinked this time, we might do it next time is not helpful. To be fair, she did mention the fact that inflation is not hitting their 2 target and Inflation Expectations have been going in the wrong way. So its not like theyre totally completing both mandates and have added Something Else. Not to mention the fact that the Global Concerns impact the dollar, the strong dollar weighs on inflation, so does whats happening in the rest of the world does it not . No, i will agree with you in the following sense, which i think there was a good reason for them to say they do not want a tightening cycle. So in that context i agree with everything you said. The problem is not that they decided not tighten but they say they theyre planning to tighten. All the things you mentioned are, in fact, very important, inflation should be the key objective of the fed. And also having too low inflation is every bit as bad as having too high inflation. They should just say that, say thats a good reason not to move. Charlie ef vvans has been clear this. He said we shouldnt move until 2016. Thats a much clearer statement about what fed should be doing. I dont think theyve been clear. Thats the big problem. What i dont get is why they think the world will be more stable in two, three months time that they can raise rates then and it wont be a worse situation. You can easily argue that the problems that are happening in china or emerging market now are structural. They will take years. If they start saying we cant raise because of china, they will knock themselves out of being able to pull out in order to go back in again when we hit the next recession. Theyll paint themselves into a corner here. Right. I think there is a box here. I think also that things will change dramatically stthroughou the year is not going to hatch. Thats the reason they should be clear. That they shouldnt move this year. Unless the data starts to run hot. Thats a very different situation. Thats not what we expect to happen. Fred, its good to get your point of view. Hope to see you again soon. My pleasure. Many thanks. When we come back, underarmor gaining about 6 this week after its c osheo said it n track to double earnings. Hear what else he had to say about digital growth and the stocks play. Im angela, and i quit smoking with chantix. For ten long years i was ready to quit. But i couldnt do it on my own. I needed help and chantix was there. And i did it. Along with support, Chantix Varenicline is proven to help people quit smoking. It reduces the urge to smoke. Some people had changes in behavior, thinking or mood, hostility, agitation, depressed mood and suicidal thoughts or actions while taking or after stopping chantix. Some had seizures while taking chantix. If you have any of these, stop chantix and call your doctor right away. Tell your doctor about any history of Mental Health problems, which could get worse or of seizures. Dont take chantix if youve had a serious allergic or skin reaction to it. If have these, stop chantix and call your doctor right away as some can be lifethreatening. Tell your doctor if you have heart or blood vessel problems, or develop new or worse symptoms. Get medical help right away if you have symptoms of a heart attack or stroke. Decrease alcohol use while taking chantix. Use caution when driving or operating machinery. Most common side effect is nausea. I never thought i would be a nonsmoker and im so proud. Ask your doctor if chantix is right for you. Starts at 6 30 a. M. On the vo rush hounose. Und here but for me, it starts with the opening bell. And the rush i get, lasts way more than an hour. announcer at scottrade, we share your passion for trading. Thats why weve built powerful technology to alert you to your next opportunity. Because at scottrade, our passion is to power yours. The dow is down 234. Another bumpy week for stocks. One notable outperformer is under armour, near record highs. Phrase continues to flow from analysts, targets taken up for the stock after the Growth Strategies were laid out this week. One major pillar of growth is an area that sets it apart from nike what it calls connected fitness. Kevin plank has spent billions scooping up apps, so what is the vision here . I asked plank in an exclusive interview that has not been shared publicly yet. Have a listen. Today we now have over 150 million registered users. So i think the vision that we have is theres a world thats happening, where everything is effective that can have a chip in it. There are a billion connected things in 2010. By 2020 or 2025, there will be 25 billion to 50 billion connected items. What do you do with that information . Where are people going . We believe if facebook owns social, linkedin owned business, who opens health and fitness . If you go to see the doctor, you sit down, the nice nurse takes your Blood Pressure and weigh you, the doctor walks in, pulls out a manila envelope and says how do you feel . Thats the best data you have . The most important asset in my life. My health and fitness, i have the least information about. What we think about skimming the 7 billion people on planet earth and say who are the 150 million who care about biometric measurement and helicopter aalt fitness. Up with of eight people who have a bio connected device is connected to one of our systems. When does it become a revenue driver . By 2018 we look to contribute 200 million. We think thats in direct sales, but also the effect of learning about the consumer. By having this data, understanding thing like how much do people sleep . How much do people train . What do they do when they train . How hard do they do it . How active are they . What do they eat . We logged over 208 million runs. We believe the more we know about the consumer, where theyre heading what theyre doing, we believe we can make better decisions and make a better product for them and we can anticipate where theyre going, where the buck is going. We think that we can meet them there and beat them there. So we want to be solving problems for consumers, enriching lives is the goal we have. A little window there into the strategy kevin plank has around digital. I asked him its all on the software side, when do we see wearables from under armor . He said something were working on. Nothing in terms of specifics. It is something that stefan curry, who they resigned for another seven years will take part in. You spoke to him as well . Spoke to him as well. That was fun. Hes a nice guy. A humble gentleman and excited to be on with under armor. He says he likes their underdog strategy. Shares of la quinta are down heavy today. The lodging chain now losing more than onethird of its value this summer. A slew of analysts are downgrading the stock after the select Service Brand heavily exposed to the oil economy in texas announced that its longterm ceo, Wayne Goldberg, is to suddenly depart. The board putting its cfo in charge Effective Immediately and triggers a promised 100 million stock buy backe ea early. August and september were softer than expected, despite what Wayne Goldberg predicted on this show. We believe the fundamentals are strong. If you look at the economy, the consumer confidence, all of the consumer and economic measures, they seem to be improving. That bodes well for our business. Supply and demand fundamentals demand continues to out pace supply. The outgoing Wayne Goldberg. The big question for investors is were blackstone will explore strategic strategical practices for la quinta. La quintas market cap is 2 billion, a proven brand, underpenetrated at home and abroad. When we come back this morning, its been one year since alibaba priced its ipo at 68 a share, making it the largest ipo wall street has seen. Since then, what a ride . What does the future hold for the stock . Art mahaney will weigh in when we come back. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Awe believe active management can protect capital long term. Active management can tap global insights. Active management can take calculated risks. Active management can seek to outperform. Because active Investment Management isnt reactive. Its active. Thats the power of active management. Good morning. Im sue herera, heres your cnbc news update. President ial frontrunner donald trump under fire. At a town hall event in rochester, trump did not correct are questioner who called president Obama A Muslim and not an american. The questioner asked trump what he would do about militant Training Camps . Mr. Trumps Campaign Manager said he did not hear that part of the question. The woman who helped two upstate new york convicts escape admitted lying to authorities and came clean because she feared for her life and her husbands life. Joyce mitchell told the today so he that the killers nicknamed her husband the glitch. She did not pick the escapees up but was treated at a hospital for anxiety. Today the u. S. Issued new regulations easing restrictions on american businesses looking to do business in cuba the rules allow companies to open up offices, stores and warehouses on the island. They also allow the opening of telecommunications and Internet Services between the two nations. They do not change who can travel to cuba but ease movement of authorized travelers. Look who got caught opt kiss cam at turner field. The 39th president of the United States. Jimmy carter and his wife, rosalyn. As he was supposed to, he gave her a big smooch. Mr. Carter recently announced he has brain cancer. The couple have been married for 69 years. Thats the cnbc news update. They got a big round of applause for that. That was very cute. I always hide from the kiss cam. Thank you, sue. Keeping an eye on these markets, cutting some losses heres. Stocks deeply in the red. All 30 stocks lower. We were down about 230 points, now down 179 on the dow after that big fed decision to leave Interest Rates unchanged. Joining us to discuss is the Global Economic adviser at pimco. You say its not so much the decision that surprised everyone, but what was in the statement. Why . Yeah. I think it was a fairly dovish statement, more dovish than the market expected. I think its clear the fed is confused, its not surprised that markets are confused. Whats going on here, the fed has one instrument to steer a twospeed itself economy. Only one instrument, Interest Rates to achieve a dual mandate, and to play the central banker for the United States and the world as a whole. With all this confusion where does pimco think it will happen . Its a close call whether they go in december or not. I think its basically what markets have been pricing in its 50 50. If we see some prognosis grets towards the inflation objective, if inflation stops dropping but rather starts stabilizing and moves up, they will go in december. If not, it could be 2016. How do they exacerbate their problems if they wait . If you are waiting for emerging markets this is precisely the last thing you should be doing is forcing everybody else into easier money. The ecb might have to react by going super dovish in the wake of this. Are they paints themselves into a corner here . I think youre right, simon. Theyre painting themselves into a corner but thats a reflection of the dual mandate they have. Yes, the u. S. Economy is doing fine. At the same time inflation is way below target. Thats the main problem. Its Global Development that has an impact on u. S. Inflation. Arent we dysfunctional at this level of Interest Rates . The world is not functioning normal limit. The u. S. Economy is functioning fine. The reason why the World Economy is not doing well does not have do with fed policy but other issues. Then raise rates. Is european qe2 on the table in ways it wasnt before . I think it is. More so than before yesterday. Whats happened is the euro is strengthening. This will push the ecb over the edge. We may well see the bank of japan do more qualitative and quantitative easing. Thats why eventually once this confusion in the market settles this is a global risk event. So buy bonds, all over the globe. Is that what youre saying . No im saying buy equities. For bonds, i would rather buy t. I. P. S. Than nominal bonds, so Inflation Expectations should rise again. Joakim fels, thank you. Alibaba, the biggest stock listing ever turns one today. And the first year has been riddled with issues. Shares of alibaba trading below the ipo price leaving investors questioning the ecommerce giants strategy. Lets bring in mark mahaney. Oneyear ago, jack ma was down here, were they going to launch the trades. What did we surge 35 on the first day . They seemed almost invincible at that stage. Why are we back below that ipo price . Theres been three issues with alibaba, fundamentally and for the stock price. First china soured. Second is that numbers have come in a bit for alibaba versus where most people thought a year ago. We have seen slowdowns. Third theres been some really negative regulatory Management Issues that surfaced. Really more regulatory issues. There was a scuffle they had with the chinese golf vernment three or four months ago. You see this as a huge you are generally a bull, but this is a huge buying opportunity. I see your price target here is 91. In essence, why do you think it would rally so strongly . Yeah. Well, look, we have not will a good call on this we had a buy since the ipo. We found oirss bringing estimates in, price targets down. But it has not been one of our top buys. We had the wrong call. We like it here, however. Theres a little too much fear in the stock at this point. You still at some point in the next year or two will make money with exposure to the china market. If you want exposure to china Online Retail, the single biggest name is this. It has bucket loads of cash. Its rare to get that combination. Its a fundamentally good asset. By the way, you will finally get beyond this lock up expiration, that comes this weekend so you will have an overhang thats been removed on the stock. Our guest is that the stock bases here. We live in a world where overnight janet yell season so worried about whats happened in china, shes refused to raise Interest Rates and World Markets have fallen. Do the stories about alibaba and the growth stock outweigh those concerns with what may happen in china . I think so you have to rely on valuation. If you can get leading Online Retail play, high margin, high cash generating a china retail play at 20 times earnings for whats probably going to be 20 to 30 sustainable earnings growth, you wouldnt buy that. On the valuation issue, mark, you read the barrons article and the drama that followed that extensive rebuttal from alibaba after that cover story. One point in the article is that it should be valued like ebay. Alibaba said thats flawed because ebay does not operate in china how do you think about the alibaba operation . Do you think it makes sense to compare it to a company like ebay . I dont think alibaba should have responded to that particular comment. I thought the analogy with ebay at 15 times earnings is borderline absurd. They are very different growth rates, very different dynamics. Ebay is x growth. Theyll be returning cash to shareholders, but that should have a materially lower multiple than alibaba was right to respond to that, maybe not publicly, but this should be a much different multiple range applied to alibaba than ebay. I havent seen it, im told you have a new report out on both priceline on both priceline and expedia. Just what is the central takeaway from that . Look, we like both of these names. If you talk about our top picks in the internet space, priceline and expedia are in there. Theyve been great performing stocks over the past two, three years, we think there are enough new Growth Opportunities for them to continue to do that despite pressure from air b b. There are new markets like the china and latin america market. You can buy them at reasonable valuations. That was the point. We like both of those names as basket off a play off online travel. Thank you, mark. I can guarantee that intern will never again walk in front of a live tv camera. Up next on the program, former fed governor Robert Heller gives us his take on the fed condition decision and what comes next. Squawk on the street will be right back. Im helping doctors keep people healthy. Take ted here. Im pulling together data he shared from his wearables, Health Records and family history, so we can analyze it. Hes doing everything right. For the most part. No pain, no gain. You are a beast, ted. My name is watson. How can i help you . With the dow down 213 points, lets send dit to rick santelli. I would like to welcome Robert Heller, a fed governor who was able to serve under two chairmens, both rather historic, volcker and Alan Greenspan who took over in 1987. Thanks for taking the time this postfed day. Pleasure. All right. I guess the first place to start is, is when i look at the markets today, im not sure how many had it correct in terms of the direction of stocks. Many had it correct in terms of the direction on Interest Rates. My question is more specific. If we recalibrated growth. The fed has always talked about growth significantly higher than 2. 25 , its just recently they seem to be getting use to the fact that this may be around for a while. If they can recalibrate growth, why cant they recalibrate the increasing pricing pressure and take that arbitrary and make it 1 or 1. 5 or just look at the stability of the pricing information . Your thought. Well, stability is a very difficult thing to achieve. The fed can set a stable framework for the economy and for markets, and within those markets then they got to find their own level. I think with the fed not creating uncertainty, thats the important thing and yesterday there was a whole bunch of uncertainty put into the markets by the fed. As soon as the statement was out, the stock market was up and down, today its down again. Is that what they wanted . I doubt it. When i look at the discussion i was part of yesterday after the fed decision it was about a third pillar. They have price stability, full employment, they dont have a third pillar for having a responsibility for the globe. Yet, okay, if they would have framed it that our growth is weak because of that, that would have been satisfactory under their current charter from congress. But thats not what they said, is it, bob . No, actually they said growth is strong right now. And the economy, i believe, is being helped by excessive regulation. Its being held back by the new rules that were imposing on it. Thats why were growing at 2 rather than at 3. 5 or 4 . Also high taxes clearly play a role. But theres nothing the Federal Reserve can do. Printing more money and theyve done plenty of that will not get us better Economic Growth and stability. Now, another issue i thought about and havent heard discussed much. You remember a time when they would ask Alan Greenspan about the currency and his canned comment was im not on the dollar, thats the treasurys jurisdiction. Robert rupert would say strong dollar policy. Is all of that out the window . The dollar is treated much differently under a yellen fed. They seem to be afraid of a strong dollar because it would have a slightly negative impact on exports or Something Like that in the short run. I think a strong dollar is the linchpin of the world Financial System if we wanted to be the key currency in the world, we should be pursuing a strong dollar policy. Otherwise its impossible to be the linchpin of the world Financial System. In our last 20 seconds, bob, theyve done things that they need to reverse, of course, programs, policy, Balance Sheets, and the reversal of that or the normalization is going to result in a stronger dollar, period. If they dont want a stronger dollar does that mean well never see normalization . Your final observation. I think the Federal Reserve is afraid of itself. They have not raised Interest Rates for seven years now. And we are way below normal equilibrium rate that the markets should have in this economy. Bob, thank you very much for taking the time. Look forward to talking to you again when we further price in some of the effects of a nonnormalization. Sara eisen, back to you. I liked it when janet yellen described the Monetary Policy transmission on the dollar. Rick, thank you. Coming up a shift is happening in americas wealth that could have big implications for this economy. Much more on that after this quick break. Heart healths important. So you may. Take an omega3 supplement. But its the ingredients inside that really matter for heart health. New bayer pro ultra omega3 has two times the concentration of epa and dha as the leading omega3 supplement. New bayer pro ultra omega3. A generational changing of the guard is taking place amongst affluent americans. The affluent survey finds for the First Time Ever there are more generation xors deemed to be affluent than baby boomers. But xers are age 34 to 50. One of us around the table is one. Affluent is considered adults with a Household Income of over 100,000, which seems a low bar what does this mean for the economy . Steve krauss is the chief insights officer at ipsos. Good morning. Good morning. What does it mean . I think it has a lot of implications. We define affluent as 100,000 plus in Household Income. Thats the top 20, 25 of the country. Even if we look at the 1 percenters, its a similar changing of the guard. Baby boomers used to be the ones so many investment terms and companies looked to as the core of the market. Now thats changing. What do genx ers do differently . Theres more managed accounts, more acceptance of what the adviser says to them. A genx er is more like a Peyton Manning or a tom brady. They may sidelines, but theyre comfortable calling an audible. The baby boomers had it all on a spoon, broadly. Did they not, david . Arguably when it comes to pensions and youre going to get in trouble with that. Baby boomers have had it they have the final salary schemes. Theyre the guys that didnt really have to fight in the same way as arguably generation x would. Gen x is the original over indicated underemployed vrgs. Even as we look at affluent gen xers, theres a lot of the same skepticism and cynicism. It is harder to reach them, hardtory connect with them. What about the way they consume, for example, media . You know, we actually see that as theres been more and more, of course, digital wreed consumption across all generations, theres still i lot of traditional media consumption. Theres still a lot of reading of making sfwleens and watching of traditional television. Should we give a nod to the mill enwrals and sarah. I was going to ask how long its going to take for millenials to take over as the most prominent group. Its going to be a little while because right now Gen X Millenials are 25 of the affluent population. That includes a lot of mill enwrals who are relying on the wealth of their parents rather than their own wealth. Sfroo we just looked at a graphic of the top affluent expenses. Autos. Number one. Theyre spending on autos. Autos is historically the number one category. Housing is up there as well. Personal insurance is another category. Thats across all generations, isnt it . Its across all generations. Its pretty consistent among generations as well. As you look at baby boomers and getting a little older, have a little bit more discretionary money, a little more focus on, say, travel and other experienceal type of things. Are you in for it, man. You dont know when its coming, but it is coming. Steve, thank you for your time. Nice to meet you. Steve krause joining us there. Jim joins from yous san francisco. A look at some of the stuff thats very interesting. This is the man at the center of so many of the changes going on that we talk about so often right here in the media landscape. Yeah, david. I want to ask wanted me to ask him, which is basically how have they, one, been able to get through washington, defeat to some degree the Cable Companies . He always says is he on the side of the internet, which means is he on the side of freedom, he is on the side of younger people that dont want to pay a lot. David, i mean, he is basically on the side of what he regards as being democracy. You know what, its working. Its working, david. Well, i want to hear some of it, of course, jim in terms of why its working. You know, it is amazing given the power of the cable lobby that he has and the idea being that you are using 30 to 35 of our band width, why should we be able to charge you more for that . Its amazing he has come out on the right side of that, but i know he explains why, i guess. I would like to think you have told me enough to replicate netflix. No one can. Why is that . Its probably like starbucks. Doesnt seem that hard to make coffee, and yet one coffee chain is amazing around the world. Theres a lot of heart and passion that goes in it. It doesnt come across in the words. Its the execution. Its the people at netflix. The people who watch netflix seem to be an Important Group because theyve been able to prove that bingeing and buffering dont get together. Why are you able to win over the politicians and defeat what would be a Cable Initiative that says he has to pay his own. He is using 30 of our band width. Where isnt he paying more, and why isnt a netflix customer paying more . Were on the side of the internet, and the internet hasnt lost a lot of battles in politics. So when you have that great tail wind, people love the internet, the thing that gives them more options, and they certainly dont like buffering. Well, typically what happens when are you in this situation is that people who are on the other side get together, they gang up. Its more media consolidation coming simply because you are disruptive and you are going to be market cap. I believe all of it work at one point. The taxi cabs havent been able to hold back uber. Walmart has not been able to hold back amazon. Really its a sector thing that the internet just offers such power. I want to talk more about original content because i think it really drives things. Its real expensive. Youre willing to say, listen, my Free Cash Flow is going to go down. Youre not afraid. Why arent you afraid of the wall street god that is would demand the Free Cash Flow go up were after were. When you look at orange, we have cash out front up front. Then we get to have it on our service for many, many years. I remember speaking to the great he was not that happy that he had to go up against amazon because they didnt have to pay by the earnings per share rules. Amazon, great bargain, net flex, great bargain. David, they just dont have to play by beat and raise of earnings. Theyre beating and raising popularity. Theyre not constrained by the four walls of earnings per share. Theyre not. Were by ratings, by the way, because they dont share any of those either, jim. Another amazing thing about netflix. Nobody knows how many people watch these shows. Its a great black box. I keep coming back to amazon. You mentioned amazon versus walmart. Theres a couple of companies in the world, david, that share nothing and people love the company so much that they buy the shares. Netflix isnt as much institutionally owned as i thought. Its individuals. They watch netflix. They pay the 8. They buy the 100. The 100 that is the stock. Very much looking forward to the bulk of the intufr tonight on mad money. Such an important guy in the media landscape, and jim cramer, of course, hell be back here on monday. Mad money tonight. Reid hastings. The stock up 109 for the were. Down pretty sharply so far over last month. All right. Lets send it over to john with a look at whats coming up next on squawk alley. John. Were going to continue to watch these market major indexes all down about 1 after that fed decision we got yesterday. Also, alibaba, its been a year since the ipo. The stock is nearly half where it was at its peak around 120. Whats next for alibaba . Well talk to a major investor. Apples ad blockers. A big subject when ios 9 is out. Are they working . Are they good for the internet or bad . All that and more coming on squawk alley. And theres no going back. Lease the 2015 gs 350 with complimentary Navigation System for these terms. See your lexus dealer. 800,000 hours of supercomputing time, 3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. Whether its building the worlds most advanced satellite, the space station, or the next leap in unmanned systems. At boeing, one thing never changes. Our passion to make it real. Good morning. 11 00 p. M. In china. Its 11 00 a. M. On wall street. Squawk alley is live