Transcripts For CNBC Squawk On The Street 20160519

And coming up, chuck robins talking earnings. Thats moments away. Our top story in s. An egyptair flight. This appeared from radar over the mediterranean. They had 66 passengers and crew onboard. Weve been watching this story and she joins thus morning. Good morning. We just heard from the minister of Civil Aviation in egypt. He said he is launching a joint investigation with french authorities trying to find out what happened to egyptair flight 804. The big question Going Forward is what exactly happened once this plane left the radar. What we understand is that happened around 2 30 a. M. They were 20 minutes from landing. This was in the southern mediterranean. The Greek Defense minister saying that the plane was making sharp swerving moves before it was lost from the radar. Now what we heard a few moments ago from the egyptian authorities is the reports coming out of greece were as yet unconfirmed and they said theyre going to refuse to provide this plane anything but missing until debris is found. We heard from the french president earlier to day. He said it appeared that plane had crashed. So a lot of conflicting reports and an investigation that is on going. Now i want to mention we do seem to have a photograph of this air bus 8320. It has the same serial number as the egyptair flight that is missing. But with a lot of questions of what is surrounding next, in paris this is where the plane originated right here at charles degal. It flies every day from pair tois cairo. There is already a Crisis Center thats been set up by french authorities to take care of the family members of the 15 french nationals thought to be onboard that plane. Thank you very much for that. Well be coming back to you in paris. Really quickly, jim, we know the bar for the markets to price things like this in is high. Yeah. I mean i dont know when this news first flashed, things have been looking okay overnight. And then people just cannot grasp it. You left thinking that cisco and sales force is what youre talking b they were sharply better than expected. Then you realize at 11. 067895, were talking about this. We do watch the continued move from companies and earnings. Walmart is sharply up in the premarket. The dow kpoen went better than expected First Quarter results. The Namesake Stores in the u. S. Posting positive comps for the seventh consecutive quarter. Theyre topping expectations. This is going to gap up by the most sense, 91. Hasnt gapped up 8 percent since 1991. Thats important. The last time it gapped down, it was in large part because people felt the company had lost a handle on the business. The stock fought all the way back. What i would tell you is i have a novel theory. I want to hear from doug on. This but he raised the amount he pays people. If you ask jim senegal, the man who really built costco, he would always tell you the reason you can crush walmart is turnover. A workforce that just turns over constantly. He got more per square foot out of his workforce than ive seen in a long time. I think this is historic. More importantly, the huge numbers here. Gross margins. This is about i think a workforce that is getting more per customer. That is something that i have not thought about with walmart since the age of walmart, david. Yeah. And lots of grocery, too. They seem to be very good at it. What, 50 or more of their sales come from grocery. But youre point is interesting. I didnt really give it much thought either, jim, the idea simply being theyre paying people more money and less turn going on and i guess better Customer Satisfaction and Customer Service that is resulting in high are sales. I guess that is the argument. Jim said listen, our you know, a place like walmart at times could have 30 turnover. And you have to spend so much money training people, training is dead weight loss. If you can cut down on training, cut down absenteeism, cut down on people nofg a dollar tree or to target, youre going to win. And i think that that may be the start of it. I think bill may have gone short term pain and long term gain. Im starting to like what im seeing. They didnt show weakness in apparel which is surprising. How about that . You know, the only other person dhanlt show weakness in apparel to some degree was urban. Everybody else was he advice rated in apparel. Well talk some of the retailers later. But people people are going to stop going to victorias secret. Apparel, including shoes and accessories, 8 of walmart. 19 at target. So are people migrating from target to walmart . You know what . Im going to make the judgement, yes. I know that Brian Cornell probably says why he is making that judgment . I have to tell you, the apparel inventories in target are way too high. They dominate in swim. There is a sense of renewed momentum in walmart. It comes out some of. Where its not coming out of amazon. Its coming out some of where. We know its not. I know. Yesterday, fascinating thing, making the rounds around the internet. Just in temperatures of the samestore sales declines and the stock declines of all the major retailers. And then at the bottom, amazon. Up 28 . I dont even remember the percentage gain in the stock price. But it is stark. Yeah, 700. Definitely goes higher. I think we have a chance to talk to Chuck Robinson at cisco. Reporting very strong outlook. This stock is rising in premarket. It is really taking off here. Joining us first on cnbc from san jose, chuck robins. Great to see you. Jim, thanks for having me on. Your voice sounds much better today, by the way. We struggled last night, didnt we . Okay. Chuck, i got a new narrative i want to bounce off you. The analysts are seemingly wetted to the old switching story, router storey. I see a company that has taken the top ten web sites Scale Companies and given them collaboration, given them security, given them an internet of things the way they can analyze the data. This is not the old cisco. It seems to have happened very rapidly. Well, jim, first off, you know, were very please wtd quarter and very happy with how the team executed. We had some real strength in businesses like collaboration and security and our Service Provider video. We have strength in china, india, u. S. , new orders was up 6 . So we were very pleased with the performance. You know, the reference that you make, i think we did a better job probably of articulating how ow business is transitioning. The point relative to the top ten web scale customers, that business did grow 31 . I think one of the data points that we provided was over 50 of that business was our data center switching portfolio which to date has been assumed to be white box. So i think that was a bit of a surprise to people. But we made a lot of progress there. Lets talk about the tone. I think there are a lot of people who were surprised how upbeat you were. Right at the end you said the last time we reported, this stock market had been gyrating. There was a lot of negative news. Our customers, enterprise, they pretty much were frozen. Things seem better than back then, dont they . Well, youre right, jim. If you look back at when we announced, we ended our quarter at the end of january. You guys better than anyone else know what was going on in the markets through january when we were in davos and we came out of that with customers that had really put their foot on the brakes. And over the last 90 days, its still a very uncertain macro environment. There is still a fair amount of caution out. There we see customers spending in areas they view to be strategic. So overall, i think the teams did great. Theyre spending on security up 17 . Our collaboration portfolio up 10 . And that business eclipsed to, you know, e 4 billion run rates. I think customers are spending in areas they deem to be stra teeth toik their future. There is a funny moment where someone says the slowdown in china n reality, your Chinese Business year over year is pretty amazing. How did that come back . Well, as china goes, we had a tough 2 1 2 years where i was constantly answering questions about when china is coming back. The joke on the call was that i think we grew 40 two quarters ago and maybe 60 last quarter and only grew 22 this quarter. We had decelerating growth which i thought was ironic. But overall, you know, we have staid very firm in china. We have been there for 20 years. We have had great bye directional communication with what we need to do there in order to be successful. Form a joint venture that we recently signed. We joined a company that will begin to kick in the second half of the year. Our team has done an amazing job. They hung in there. Im citing things did you right. 63. 5 billion in cash which is amazing. Continues to grow. You have a subscription business that people dont understand. But i thought most important is you had said other people were nipping at you. You mentioned the white box. You basically have become a company that is that has a giant install base. Thats where the big money is being made in gross margins. What we try to do is articulate is there are three great examples in our business. We have a cloud base networking portfolio that is over a billion dollars and grew in double digits. Our Security Portfolio which we take theed in the three quarters back that we thought the second half we would get back into the mid teens. It grew p 17 . But at the same time, our deferred revenue balance due to subscriptions and software grew 31 . And our collaboration portfolio which is over 4 billion grew 10 while our deferred revenue in that space due to subscription in software grew 16 . So my point was we have these businesses. We have proven we know how to transition them to a software and subscription business. And were going to take that methodology and now we have begun the process of rolling it across the broader portfolio. Its going to be a multiyear journey. But we have begun that effort. I think one of the things that people realize, youve been able to take advantage of the unicorns, the company thats have not been able to access the public markets. Were in a good position of a strategic buyer and the challenge ntz public market. This jasper deal which you made in february, it seems to have already paid off the 1. 4 billion pricetag. Jim, as we look at the Market Opportunity ahead of us, severing about this iot connectivity. Everything is going to be connected. And the jasper platform is the number one platform for connecting automobiles, vending machines and were adding one million devices per month to the platforms. We have 29 Service Providers around the world that have standardized on it. We have over seven million connective vehicles on that platform. And so we believe that, number one, jasper is an incredibly Strategic Asset for us. But tlos your point with the ipo markets effectively slowed down, maybe even shut down, its a Good Opportunity for us as a strategic buyer to look at opportunities here in the valley. Jasper is a phenomenal example of that and were seeing great acceleration in that platform as well as the security acquisition thats we made. Mr. Robins, just real quickly as we wrap up. I would love you to respond. Positive reviews, of course, of the earnings report. But theyre saying we think the primary take away from the release was to continuing cautious tone in both the enterprise and Service Provider segments. Is that a fair paoint on their part. David, please dont call me mr. Robbins first of all. Im not that old. Neither am i. But were getting there. Im sorry. I know. All right. Well, i think the there is definitely still caution in the system. And theres a lot of uncertainty in the geopolitical dynamic. You guys talk about the things going on with the brexit vote coming up, dynamics going on around the country. There is a lot of uncertainty in the economy. So i think our customers are still trying to navigate and balance all the issues. And our job is to execute to the best ability we have during those situations. I think we did that. Well, chushck, want to thank you so much for coming on. That is Chuck Robbins, the ceo of cisco. Good to see you, sir. Hey, thanks for having me, guys. Have a good day. Thank you. Got breaking news this morning involving Phil Mickelson. The sec has named mickelson as a relief defendant in a civil lawsuit against former dean foods chairman thomas davis and gambler billy walters. The sec mickelson generated 931,000 in profit by trading in dean foods base ond a stock tip from walters. Mickelson was not named in the criminal charges announce this is morning against walters and davis involving alleged insider trader regarding dean foods and garden restaurants. Well get more on that story in a few minutes. I believe the ag has a press conference coming up to day at noon. He should have just owned dean foods, not traded it. They spun out tree house and white wave. That is a lesson. Stick to golf and just own the stock. That dean foods was a good idea. You shouldnt have gone in and out. Whether we come back, well get more on todays movers including monsanto, making a bid to buy that company. Take a look at. That take another look at futures as well. This is the one Year Anniversary of the dows last record high on a closing and an intraday basis. May 19, 2015. Back in a minute. The call just came in. Shes about to arrive. And with her, a flood of potential patients. A deluge of digital records. Xrays, mris. All on account. Of penelope. But with the help of at t, and a network that scales up and down ondemand, this hospital can be ready. Giving them the agility to be flexible reliable. Because no one knows like at t. Welcome back. Last night monsanto received an offer to buy the company, a couple weeks after we first heard reports that buyer was interested in pursuing a deal to acquire monsanto, the private letter sent by buyer, there was some discussion around the terms that they were willing to at least offer the company. But interestingly, this only became public and was confirmed by monsanto because of the comment of its coo yesterday after having presented an investor meeting in new york city. On the sidelines of the meeting after he had already spoken, the companys coo said to a reuters reporter in terms of the buyer potential bid, its all wild speculation. There is nothing there. You know what . If youre a securities learner and advising monsanto, you hear that and you go oh, no. We have toekt krt record. This is why we heard from monsanto yesterday and confirming that they had been approached from bayer. Otherwise, it would have given the companys more time to have worked in private to try to work out a deal. The question, of course, still is will they be able to work out some sort of a transaction . At this point, i have not been able to come up with the term that were offered if bayer nor apparently has any of the other Media Outlets following this story which, of course, involve one of the largest cross boarder takeovers weve ever seen and would be a huge deal for bayer bringing together the business with that, the huge seed business, agriculture business of monsanto creating a huge thing. There is not a lot of antitrust question here. You may certainly get some questions as to, frankly, National Security on the front and or opposition to gmo nz europe. None of that would seem to perhaps mitigate the deal from happening. But, jill, you know, we have to see what the price is. The expectations on monsantos part would be somewhere in the 140 range. Wow. Bayer itself would not be able to pay all cash. They would have to include a decent amount of stock. They couldnt lever up the balance seat that much them would have to potentially sell units in order to raise cash so you wouldnt have to leaver up as much. Either way, the expectation would be a combination of cash and stock in this deal. Dont forget monsanto pursued sergenta for quite some time and made the case there for antitrust. That was seen as the silver medal. They think this is the gold medal this deal even though it means monsanto giving up control. You say no antitrust. Im looking, brands for bayer. Herbicid herbicides, insecticided that, is the wheel house. Key crops here, cotton, corn, oil seeds, rice, soy, wheat. David, if im antitrust, i dont want dupont. I dont want this to happen. But there is no real overlap here within different crops. Especially here in the u. S. Youre talking about same pharma, different crops . Same farmers. And in this environment, jim, if they were to raise antitrust as hypocritical as that might seem given they kept saying there is no antitrust in, this environment given all the deals that are stopped, im sure people will pay attention. Remember who mon santo is in this administration. Theyre a company that is regarded as being antinatural organic as much as i say dont worry about gmo. Thats what they say. And also, very tough one, the farmers. David, you dont want to be against the farmers in an election year. Well have a lot more, i know bayer sounds like bayer. I should go with bayer. Thats how we say it here. They say bayer over there. It sounds like a buyer. Im a buyer. Buyer is a buyer. View it as a seller. Is he going to sell it to microsoft . Im not selling the stock. I want to kill two birds with one stone. And it would be the biggest u. S. Deal of the year. Lets keep that in mind. Monsanto, yes, well above 40. David, never going to happen. No. I cant no way can you say that. Right here. Never going to happen. Aint going to happen. Then went all we have to go. We dont want to miss the bell. Well get cramers mad dash and opening bell in a couple minutes. A good car has to maneuver quickly. Thats also true of a good car company. People have always bought cars. But we saw an opportunity in sharing cars. So we moved fast and launched car2go in 29 cities, all around the world. Doing that required dozens of data centers, designed for speed and performance. We built our business on the ibm cloud. Because thats what the ibm cloud is built for. Egyptair flight 804 crashed and there are findings that have been found by the Egyptian Air Force aircraft taking part in the search. Well get details in a moment. Meanwhile, the opening sbel four minutes away. At the Marine Mammal center, the environment is everything. We want to do our very best for each and every animal, and we want to operate a sustainable facility. And pg e has been a partner helping us to achieve that. Weve helped the Marine Mammal center go solar, install electric vehicle charging stations, and become more energy efficient. Pg e has allowed us to be the most Sustainable Organization we can be. Any time you help a customer, its a really good feeling. Its especially so when its a customer thats doing such good and important work for the environment. Together, were building a better california. All right. We just got a version of the mad dash now. Wh we led to the opening bell. Who is getting the right . They have figured out how to sell womens denim bottoms, skirts, knits, woven tops. Its a very good quarter. Wow. I got to hand it to them. They really are in a groove. They good numbers last year and this year. Theyre a survivor in this category. And now the thriver in that category. Thats a very big move in that stock. So nun knows how to sell in the mall. It happens to be American Eagle outfitters. Isnt that impress sniff. Yeah. We should get them on. They did a good job. Theres no twoways about it. Its a womans place. Much better than l brands which had to guide down again. Victoria secret yet again. Stle to get new management in. There but whether it comes to apparel, American Eagle is the winner. How do you like that . Interesting. Specialty names, i mean urban were positive. Whats going on there . Okay. Urban, they had no inventory problem. Thats a great comp. The ceo says, listen, i have to its amazing. We have ten times more retail space per cap it capita than w hence the problem with retail. There is the opening gel. And some negative breadth. Specialty, chemicals and Carbon Materials over the nasdaq. Speaking of the specialty dips, lb, dicks, urban beat. Now the follow on guidance was a little more var yant. I was hoping, you know, dicks is one of the dcompanies there is way too much capacity. Heres what happens when you take out capacity. Sports authority goes under. How does dicks do snt stock up is almost 9 . Because capacity has been taken out. If you want to know what is going to happen, you have to shrink the whole capacity of retail. What is happening in Sporting Goods is whats going to have to happen amen. Its going to happen. There are too many stores. You know what i think target is going to have to reassess itself. Lowes doesnt. Lowes has the right strategy. Right now there are too Many Companies selling apparel. Not enough Companies Selling home goods. Thats why tjx is so good. Remember, it was double. But if youre selling apparel, bye. Yeah. We dont need you. We want to get to crm. But broadly, we didnt get a chance to speak about the Broader Market about yellen and the fed. You know, gold also suffering some fairly significant losses. A lot of momentum funds that may be taking it on the chin there. They need to pick up their selling. Interesting you mention that. That was the theme of the day. If Interest Rates go up and get a return on the cash, why you would go with an asset where you dont get a return . So the gold news is pulling in. Yeah. I mean people starting to question once again yell ens communication skills. Yeah. And saying its were getting mixed messages. Do better in terms of to me, look, there is some hot data. I know they absolutely want something. They want to do something badly. But youre right. I mean yellen, i think, let the other three run free and ahead of them we release the minutes. The minutes were decidedly were going to tighten. Maybe 50 chance in june. I know theyre saying only 30. I read what everybody else reads. I just say theyre itching. Maybe brexit keeps them from doing it. But theyre itching. If there was a june 28th meeting, they would pull it. Whether you look at wages, confidence, Industrial Production yesterday, cpi, retail sales aside from the micro, i mean, can you blame them for making a move . No, i cant. Especially because i see china somewhat stabilized. You heard what Chuck Robbins said. Yes. Europe is actually better. I saw the car registration numbers. Theyre not bad. Put it this way, i dont want them to move because i dont think it really helps the situation. I keep thinking about what happened in december and january. It was directly related to that move. But if Everybody Knows theyre going to move, then a lot of stuff will be built into that. All right. David mentioned crm. They raise beat on virtually every metric. Here he is with jim last night. We are well on our way to go right past our 10 billion dream. A lot of people werent sure sales force could get to 1 billion. Thats where we were when we first started talking. First time i was on your show. Just look at oracle and sap. You can see the messages they deliver on the show. But they havent delivered their products. Growth up 31 is double the estimate. Yeah. You do the unbilled and the billed, you get to 11 billion which is why he says 10 billion is in the bag. He goes, this is amazing, one reason that were doing so well is because oracle and sab are doing so poorly. Holy cow. Now one thing he talked about, i gave a lot of time last time. I want to do some of the social stuff, too. Sure. Who is r. The big clients . New clients hes talking about . Uber. Amazon. I mean talk about who do you want to do business with . Who do you really want to sit down with snt u. S. Government, big, big contracts. Uber, amazon. Also he talked target. Now target was not a great quarter. I think they need to get more in touch with the customer. I think that i see what sales force did with home depot. So maybe target can do it. But amazon, jeff bezos said he gets me, i get him. I want amazon as my customer. To those that remember roughly a year ago whether this company or at least i reported it was pretty serious when ta talking to microsoft. What did he say when you asked hip . I know did you. I think its hard to say were never going to sell ourselves. What if you say im so enthusiastic. I love my job. Im really excited. I lot of place were in. Those are things you typically do not say when you say oh, yeah, but its not just on the line. Im out of here. Right. I think his enthusiasm, which is breathless. Ive known mark for a long time, i its hard to find him more enthusiastic much the only difference is that there are a lot of other people speaking on the call. He is letting other people speak with him. Hes got a great, you know, a great charm to him. There are other people doing things. But this is very much a company that mark wants to go to the next level. I think when he is if he ever were to lay away everybody, maybe it will be time. Right. You know, oracle and sap and microsoft, theyre not and sales force. They dont get along as well. Number theyre not friendly. Its business. Yeah. I want to talk about sails and want to move on to monsant yoechlt we mentioned it briefly. Up 6 . Well below what manufacture ty shareholders would hope. They were down sharply since it was revealed they were interested in doing a deal with monsanto. The two companies had been discussions about a joint venture of some kind. Which apparently then brought bay torte point of saying take a look at the stock right now. It is off dramatically yet again. That will figure prominently into any potential deal here. They do not appear to be in a position to offer simply cash given the leverage it would take, the depth they have to add to the balance sheet. By the way, just worth pointing out, large shareholders well aware of this given monsantos screw up by the coo in saying the opposite and then obligation to correct the record, october 1st is when the window opens for a place in the board of directors. Its not a staggered board. So its not that far away. Would a foreign acquirer go there . Probably not. Probably not going toer is sue a nasty hostile deal. Its worth remembering. Nonstackered board. They have an early annual meeting. Lets take the temperature really quickly before we get to dom on tesla . That was smart that Goldman Sachs upgraded it. Why it is smart . I think if i were him, i would share some of the Equity Offering that hes going to be doing. Now heres what you need to know. The big wrap, the big negative on this, can they make the model 3 . They need so much money. This stock is going to go up into the Equity Offering. It is providing the money they need. Now youre not going to get a model three at 2016. Youre hoping to get one in 2017. Fingers are crossed. They need this money to build, build, build. I know that Goldman Sachs always had a Good Relationship with them. Morgue an stanley is. There everybody will have a piece of this. They upgraded right before they say theyre selling a billion dollars. Do you like area 51 with zbhoeld. No, im saying there were laws that were passed. Area 51 . No hillary is going to open up the file on that. Is she . Yeah. Which server . I dont drs. I dont know which server. Was gis it good timing . What do you mean . Arent they going to get a lot of heat for that . There are things that were done that said you should upgrade stocks youre about to sell on behalf of a client . I lost my voice. Here, we can put these back on. Look at these things. Oh, my god. Wow dow is down 55 points. S p 500 is right at 2040. Lets get to dom. I was above my house the other night. That might be area 51 related. Now were about 51 points down on the Dow Jones Industrial average. We have to sort things out after yesterdays big fed minutes release. We learned a little more about the picture for Interest Rates, perhaps the fed doing some repricing in the market for how things should be viewed with regard to future Interest Rate hikes down the line. So we saw that volatility yesterday. Were seeing a bit of a churn this morning even though youre seeing across the bored right now, were talking about fractional losses for the most part. If you take a look at the sector picture oversaul rigall, a bit churn. We did see some underperformance. Consumer staples, the dif denlt paying sectors that is a huge focus. It surged to real new highs and then it has shown some real relative weakness much thats going to be one to watch as well. Telecom services, energy lower on the heels of lower oil prices. Now west texas intermediate down to that lowish mark. Youve been hitting the idea of walmart and dicks Sporting Goods for some time. Both the stocks up 7 . Although, there are those who would argue that outperformance or the relative to expectations outperformance of walmart does signal something about our economy and then it may be slowing down and what not. Dicks Sporting Goods, thats a big deal as well. Also want to point out on the other side of the equation here, were seeing some interesting moves here in the Regional Bank side of things. We saw a huge surge higher for the stocks yesterday as the Interest Rate picture goes higher, perhaps, down the line which could benefit some of the banks. Well see if that trade carries through today. Its positive. You can see there the s p 500 Regional Bank etf and the ticker is up there. And well also point out commodity companies, mining companies, oil ones, those are to the down side today. Well see if that sticks on the heels of a stronger dollar. Back to you. Thank you very much, dom. Yesterday i had an opportunity to sit down with jeff bukis and we refer to him the great american, of course, chairman and ceo of time warner. We did a live interview. We also had a chance to speak on tape on a couple of things we did not get to during the live interview including the importance of share buybacks to Media Companies. Many of our viewers may, of course, know that so many of these mete Media Companies which dont deliver incredible top line growth but do deliver a lot of cash benefited greatly from buy backs sh reducing the share count and therefore increasing eps, much more significantly than the top line of the revenue line is going on. So i asked mr. Bukis, how important are share buybacks to you when you think about Capital Allocation across all of your businesses . Does it take a priority a backseat . If we have cash that we can invest in expanding our programming or operations, or adding operations that strengthen our company, we then put it into the best media return. Thats it. So thats so its conceivable there will be a year where you didnt buy back stock . Absolutely. If we saw something we want to buy, we would do that and postpone the continuation of a buyback. Were trying to create the maximum return. Another area were able to discuss is the idea of movies. We talk about over the top plat formdz and discussions about there will come a day when you release a movie at the same time and the theaters and your streaming services or certainly on video on demand. Mr. Bukis indicated while the window may be getting tighter, hes not clear on exactly how its all going to play out. The issue is how do you support, and its important, the power of the out of home movie going experience. And because theeters are getting better. And there is nothing like seeing oint a giant screen depending on the kind of movie and how old you are and what youre trying to do that night. Versus having it at all. I think can you move them fairly close. He said its an important tool for all the venues. The movie will be shown on to have it in a movie theater. Shawn parkers of the world trying to have that Screening Room mod wrl an exhibitor gets a cut of something you watch at home. I mean, nobody has answer onz this stuff. No. And it will be interesting. The block busters that they like to come out with out of the Warner Brothers studio, theyre fun to watch on a big screen. They are. I thought one of the great parts of that unbelievable interview, we said, there is absolutely activists, you know, on his own. People are happy it with. There was a period of time where there were firms working on the company. None of them decided to move ahead with the campaign. You could split it and create value . He answered very strongly, more than ever. There are a the love cross currents, synergy between all of the businesses. Whats amazing, he didnt point blank slam the people who were suggesting that they spin off hbo for short term gain. Number. On a more somber note, lets get an update on egyptair flight 804. We have the latest. Good morning. Good morning. Were now hearing from greek officials that they do believe they found some debris in the mediterranean. Obviously we dont know where that debris is. But its been discovered as part of the search for this flight that took off from paris here last night. Disappeared just 30 minutes out of cairo. Meanwhile, u. S. Defense officials telling our correspondent at the pentagon that they did not see on their defense radar any kind of explosion that might have indicated that there may have been a terrorist involvement in what happened. That doesnt completely discount the possibility of terrorism and officials here in paris and cairo say theyre looking at all possible causes of this. But unlike, for example, with the metro jet, a plane that went down over egypt or the mh17 plane that went over at ukraine where the u. S. Defense radar did pick up some kind of an explosion, that doesnt seem to be any indication of that here. Meanwhile, behind me, the relatives of some of those who were onboard that aircraft have been gathering, gathering to dmsh cairo. Weve been watching french officials arrive to go and meet them as we have seen in previous instances. They will be coming here to talk to them, to tell them in person that every detail that is emerging before it is told, it is put out publicly to make sure that they dont feel as if they are outside the loop. But again, the crucial news in the past hour, greek Officials Say some sort of debris may have been found in the mediterranean. That suggests that they are making pretty quick progress with this search for the plane and inquiry into what exactly caused the disappearance. Well be watching for more detail over the coming hours. Thank you so much. Lets get to the bond pits this morning. Rick santelli in chicago, its been a busy morning. Lei and dudley are object way, rick. Yes. Lei and dudley are on the way. Stan fisher, big groan on the floor, didnt go tlment i dont mind. That sometimes surprise is the best way to do this the things right so you dont have a tail of people behind you scratching their heads. Deal it with on the fly. Its been a long time. We put out all the warnings. Weve sent out the flares. Come on. You know, its all about the dollar index in my opinion. If i showed you fives, threes, sevens, they would look similar to that. But whether you start to expand it a little bit, thats where you learn a lot. So lets go to the march 15th of this year. Why . Because virtually yesterday put us on a closing yield. We havent seen that since that mid march point. What i want you to focus on is right around there in april around the 22nd. You had a spike in yields. Two years are above that. But as you look at the dollar index, the next chart, very similar formation. Also relative to that spike in april. Now look what happens when you look at ten year. Were below it. Look what happens when you look at boons, were well below it. You get much less defind. The long send just has so many other things its keying off of. Really Financial Sector has people on this floor scratching their heads. The last chart, so much about talk about the japanese, fat tax, whats going on there. How they own so much bank of japan. Heres a chart year to date of the nikei and the ten year jgb. Now the top line on the right hand twothirds of that is the stock market. You can see virtually no help. A lot more damage than help with regard to what theyre trying to accomplish with negative rates. Back to you. Thank you very much. Well see new a few minutes. When we come back, were going to talk with two of the conservatives who met with Mark Zuckerberg yesterday. Are they satisfied what the facebook ceo had to say . Dow is down 63. On pace for four weeks down. Thats the first streak of that length all year long. Back in a minute. Approaching medicare eligibility . 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They are so white. 6x cleaning , 6x whiteninga in the certain spots that i get very sensitive. I really notice a difference. And at two weeks superior sensitivity relief to sensodyne i actually really like the two steps step 1 cleans and relieves sensitivity, step 2 whitens. Its the whole package. No ones done this. Crest healthy, beautiful smiles for life. The eclass has 11 intelligent it recognizes pedestrianss. And alerts you. Warns you about incoming crosstraffic. Cameras and radar detect dangers you dont. And it can even stop by itself. So in this crash test, one things missing a crash. The 2016 eclass. Lease the e350 for 499 a month at your local mercedesbenz dealer. You made a good point about the dollar. Clsa came out and with sells on every railroad except for norfolk southern. There is a line that says coal volumes have nothing else to lose beyond 2016. They say this is the twoun bichlt the transports have been horrendous. It has a lot of people down about the market. And the transports are directly correlated to a strong dollar. They just go down every time we get a strong dollar. Down. What is on mod ad tonight . We have take two and we have dine equity. It is about wood fired chips. Talking about the new menu changes. And combatting easter brook, you know, hes the leader of fast food. Zuckerburg is a kinder, agenda willer kahn. That is a lot of kahns. And this is your week. Check off come here. Our seals are down. They have more descendents than any other human being ozzen the planet. Including william shatner. Whether we come back, well get the latest on egyptair flight 804. A lot more on the markets. The dow is down a very quick 120 points. Here at td ameritrade, they work hard. Wow, that was random. Random . No. Its all about understanding patterns. Like the mail guy at 3 12pm every day or jerry getting dumped every third tuesday. Jerry every third tuesday. We have Pattern Recognition Technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. Td ameritrade. Good thursday morning. Welcome back to sidewasquawk o street. Were at the new york stock exchange. The dow is down 164 on pace for a fourth week down. Dollar strength not helping. Oil is down more than 1. Gold is down 30. The s p 500 has broken below an important level of 2040. Leading Economic Indicators. Lets get to rick in chicago. Rick . Lei leading Economic Indicators is make mig job easy. Its a surprise to the upside and up. 6 for the april read. And the easy part is its exactly one year since weve had any number in this area. One year ago today, it was up. 7. Everything else, of course, has been mostly down. As a matter of fact, coming into this april read, three months, january, february, march, two out of three were negative. March turning the corner on januarys negativity. This up point, is pretty good. The leading Economic Indicators alone isnt going to get to the promise land in terms of the hierarchy for dat yachlt back to you. All right. Rick, thank you very much. We go live to hadley gamble and paris charles degall harpt for the latest. So what we know so far is two u. S. Intelligence officials have confirmed for our colleagues that nbc news that there is of yet no signs of foul play. And we heard also from greek authorities there have been so many conflicting reports over the last several hours this investigation right now is taking place between the greeks, the french as well as the egyptians. But the Greek Military spokesman coming out telling nbc news as well that parentally one of the rescue operation thats are operating that they have found findings but no word of yet what those findings could actually be. Now we have seen unconfirmed reports all over the greek press including greek tv saying this they have found some debris but as yet the reports are unconfirmed and egyptian authorities have been pushing back saying theyre going to continue to call it this plane a missing plane until further notice. Way know this flight originated 11 00 p. M. From this airport. It was headed to okay row. It should have landed around 3. 156789 in the morning. There but at 2 30 a. M. , i was lost from radar and according to greek authorities, they say that there is evident the plane was swerving significantly before it plummeted. Of course, egyptian authorities pushing back on that one as well. They say those reports are unconfirmed. We heard from the french president earlier today and the foreign minister, they set up a Crisis Center for the 15 french nationals families so that they can come and learn more. But the authorities really not on the same page. And were hearing more and more bits and pieces coming out now. And mostly from the greek authorities. So well keep up with everything that is happening here on the ground and well let you know more developments as we have them. Okay. Thank you very much. Joining is the former Homeland Security assistant secretary now founder of managing partner at integrated strategies group. Good morning you to. Clearly, the burning question here for everybody around the world is whether this is a technical failure or whether there is foul play. Now we hear sources in this country telling nbc that there is no evidence of foul play. You would expect to have hard and fast evidence here . Is the case close order is that, do you feel an interim statement along the way . The cautionness is appropriate. A lot of the speculation that goes on right now is purely made up upon fragments of reports. We learn the first report is always wrong. So we have to take a look at it from the security perspective. Lets deal with some of the facts that we appear to have though. I believe these statements still stand from the Greek Defense minister that the plane plunges from 37,000 feet to 15,000. Then swerved 90 degrees to the left and spun through 360 to the right before it actually disaperiod off the radar. What does that as an aircraft engineer or somebody with knowledge of these events, does that tell you anything other than the fact that its a plane that is crashing into the sea . You look at certain things that point to what could cause that . And in speaking to pilots and people in the aviation industry, 30,000 altitude, things are normal. Theyre getting ready for dissent. Theyre in contact with air traffic control. You dont expect things to go catastrophic at that point to cause an airplane to dissend to 20,000 feet. Unless a catastrophic event occurs. And that catastrophic event could be mechanical failure or in this case it could be, you know, security standpoint we always look at terrorism cause. There could be potentially pilot intervention. We should mention, of course, the last of the greek authorities heard from the pilot, they say he appeared to be in very good spirits and spoke to them in greek. I guess the question in this country is how does the tsa now react . What protocol changes should there be . We have a very big Holiday Weekend approaching and some very public criticism at the moment of the delays that already exist at airports. I think they have strict rules on the passenger side and the land side in people gaining access to the aircraft. The checks are very strict and in place. I doubt there is anything in the protocol thats have to be changed at this point. And overseas environment, that may be a different story. Pair sis subjected to recent terrorist attacks and the continuous concern about the isis threat. I know from talking to people over there that they have increased the security on the air side. We know the aircraft access clearly increasing checks there. Usair lines are doing everything they over and above what American Security requirements dictate they need to be doing. I feel confident that were doing things we should be doing. Pilot error or pilot intervention after the germans wing aircraft incident last year, again, the u. S. Protocols have been that two people have to be in the cockpit. International standards didnt requirement that but theyre adopting that. You have to see if that was applied in the egyptair craft. There are a number of things that have to be determined. But in terms of what has to be done, i think were probably doing all the things we should be doing. You mentioned some precautions taken in paris, bob. I wonder about the Egyptian Security record when it comes to transportation and aviation. We cant forget about the bomb last fall over the sinai of a russian plane. How much is a collaborative effort . It is very collaborative. Its not just a u. S. Effort. The u. S. Provides a lot of assistance both policy guidance and technical guidance and operational guidance. But it really depends upon how uniform those standards are being applied in areas such as egypt and elsewhere. I think after the incident, i think security was ramped up significantly within the egyptian airports. You do have to look at the origin of the plane from what i saw on the reports was that plane was originally in cairo before it went to paris and then paris back to cairo again. You look at the scenarios again from the security standpoint. Could somebody have put up put something on the flaen cairo that would have gotten through the paris or the french screening processes once it got on the plane there . I dont think that is the first place i would go. But to your point, we have to look at our foreign partners to make sure theyre adhering to the standards. I think they may have been on the recent flight path. Bob, good to see you. Thank you for joining us. Thank you. Keeping an eye on this market selloff, the dow is down 150 points. Goldman sachs is the biggest weight on the dow. Walmart is a bright spot. The shares are surging. Theyre up now more than will 8 . Walmart cfo telling cnbc we dblt talk month by month performance but it was pretty good performance throughout the quarter. Joining us now to discuss this story, Michael Laser sh retail analyst at ubs. So it looks like youre both on hold. I believe you were looking for half a percent. No doubt in light of the broader retail environment and the consumer and walmart did a good job in the quarter. I think that speaks to the consistency of the business to the consumer nature of the business and the geographic distribution. So they did a good job in the First Quarter. The question longer term is can they balance the sales with the margin . I think that has yet to be seen. What do you have to see to be convinced to move that rating above neutral and raise the target . Sure. In the First Quarter, the u. S. Sales which is the engine and the driver of the stock were up 4 . So there is a mismatch there. What we need to see is that they can grow sales and earning officials time. I think it will take several quarters before we see this is really working. Im curious why youre at neutral as well. Youve been doing on the Ground Research with executives talking a lot about this morning on the call and in the slides. And you found that the stores have improved a lot. Talk about that experience. So as you noted in our earns preview, we did talk about recent store experiences. Weve seen a mix of some rough stores that have been chronically bad stores and other stores and what we saw this time around was a lot of consistency. Very clean, in stock, better front end checkout. We were impressed by. That i think we expected a decent update on the execution of that plan where we were a little bit more concerned was dotcom, the ecommerce sales, conversion online. We did see a little deceleration in ecommerce and the International Front in terms of market share losses. So i dont think all the stars are aligned. But were certainly seeing good progress. Youre seeing income grow at above average rates for that bottom quarter. Youve seen pay raises across retail and i think thats a proxy for wage increases in general for unkilled workers. And thats really just got under way. Michael, is that 7 ecommerce number something to worry about. They said that growth was too slow in a quarter wrer so many of the other retailers are reporting disappointing numbers and amazon is, of course, the elephant in the room. Yes. At those levels, its pricing in improvement. In retail landscape that is dramatically improving and ecommerce is leading the way, walmart has to show they can fully participate in the growth of that channel. At this point, theyre not doing that. So we need to see better trends on the ecommerce side to really justify where the stock is trading right now and for it to appreciate from here. Its interesting to see the paying the staff more as theyve been a new walmart objective and appears according to the ceo or the cfo to have paid off in this instance. Yesterday, of course, separately hut doubling of the tlesh holds by the white house. Can you give us any color as to how many managers of walmart may now be covered by that over time demand and therefore what that does to this business and to other byes . I think certainly the increase will effect some retailers. I think it will effect small box retailers more than big box retailers. The average manager wage, store manager wage at walmart, target, home depot is usually six figures. Of course, there could be some assistant managers that will hit the threshold. They havent provided a lot of color on that yet. You think about the volumes that stores do and the sales per manager versus some of the smaller boxes, i dont think it will be that meaningful. In fact, as we spoke to target yesterday, they said it was not going to be meaningful. Home depot is in there plan. I dont think it will be much of an issue for the big box retailers. Mark mike, very quickly. If you have the choice between walmart and taergt, comps are not very different, but theyre in the 1 range. Which one do you go for . Walmart is showing more momentum. Target is indicating that the sales are declining in the Second Quarter at the midpoint of the range. This market all about momentum. At this point walmart has it. All right. Well leave it. There thank you. And were certainly seeing that in the market today. Speaking of momentum, lets have a look at where we are on the market at the moment. Major concern is the fed minutes we got yesterday that suggested the fed is anxious to raise rates as soon as they k. Possibly as early as june n 15 minutes time, the third most important member of the fed will stand up and hell Start Talking about the economy. We may get a clear indication of where we are here. For the record, Stanley Fisher, number two at the fed spoke at 9 00 this morning. A very long technical speech which really carl delivered nothing new to the market. Were watching this missing egypt airplane. Well go to paris for the latest. And then Donald Trumps economic adviser to the campaign is coming up after a break. Try the superior hold. Of fixodent plus adhesives. They help your denture hold strong more like natural teeth. And you can eat even tough food. Fixodent. Strong more like natural teeth. Fixodent and forget it. Man 1 man 2 i am. Woman exmilitary . Man 2 four tours. Woman you worked with computers . Man 2 thats classified, maam. Man 1 but youre job was Network Security . Man 2 thats classified, sir. Woman lets cut to the chase, here. Man 1 whats youre assessment of our security . Man 2 [ gasps ] porous. Woman porous . Man 2 the Old Solutions arent working. Man 2 the world has changed. Man 1 meaning . Man 2 its not just security. Its defense. Its not just security. Its defense. Bae systems. The presumptive gop nominee touted hisself Funding Campaign strategy as now teamed up with the national the Republican National committee in a fundraising deal to target big money donors. Joining us this morning is Trump Campaign adviser and National Finance chair Steve Mnuching to have you back. Good morning. Good morning. Thank you. Great to be back on cnbc. I think we spoke briefly before you went to salt. And now youre in l. A. Where we think were going to get some news from you guys in a if you days. Whats the latest . Well, first of all, let me just say that our First Priority was signing the joint fundraising agreement with the rnc and were thrilled to have that done. Really, that our resources are really being focused at raising funds with the party. Lou eisenberg who is the finance chair for the rnc is now going to be finance chair for trump victory. Ive known him for over 30 years. We speak several time a day and putting all our efforts in working together with the party on fundraising. In vegas, they came out for trump. And now there is word youll hold a fundraiser in l. A. With tom barrett. Can you tell us how many more of the big names well start to see. First of all, let me say were really excited to have tom host our first event in los angeles. Were going to be doing that next week. Tom is really one of the great leaders in the finance community. He obviously is extraordinary capable and has invested in and controlled lots of businesses and his advice for the campaign is crucial. And not only will we be meeting with people who control large businesses, but i think one of our focuses also is going to be meeting with business owners, Small Business leaders and medium Business Leaders to make sure that donald and the campaign understand their voices as well. When you get a new potential donor on the phone, what is your pitch sound like . Can you walk us through your points . Let me say, you know, the one thing about this is its really people who are coming out that want to support donald and want to support the campaign. I think as i said in the past, the great thing about this is we are seeing some of the traditional people who have been big Party Supporters come out. But more importantly, were seeing a whole bunch of people who have not been traditional Party Supporters that are coming out and want to support him. Any chance some of them are wouldbe sanders supporters . Are you going try to work some sort of circularity in that arena . Go to though supporting the left . Im not really going to comment on his supporters. But obviously, there are supporters that want to come out and support us to the extent he doesnt get the nomination, obviously we welcome people who support us all over. I think one of the great things about this is this is not just about large donors. This is about broad support from small donors all over the country as well working in conjunction with the rnc. Are you still aiming for a billion dollars in conjunction with the rnc which i think works out to raising 250 million per month for the next five months which a lot of people say is pretty ambitious. We think there is a lot of broad support across america for donald. You know, one thung i would just comment when you divide that by months, were going to be ramping up. So dont expect the early months are simply dividing the total by that. A lot of people followed donald trump so closely over the months. Were very surprised this week when he suddenly said it would appear he was going to completely repeal doddfrank and the suggests that is that a blatant attempt to try to get money from the big wall street donors. Was it . It is . Were you involved in that . Was the genesis of it your sole meetings . Again, the genesis of it was definitely not my salt meetings. It is something that i have talked to donald about for a period of time. Im not going to comment on the specific comments. I think there is parts of the regulation that make a lot of sense and there are parts of the regulation that absolutely need to be looked at again. But to be clear, the idea is coming from you as chief fundraiser. Is that what youre saying here . No, i would comment its his idea although hes being advised by me and by other people in the Economic Community as well. Have you advised trump to release the taxes . We hear from viewers who say its been Standard Practice for 40 years. Others say i dont care what is in there. What you would like to see him do . I havent had any comments with donald on the tax returns. I will say he just released an enormous amount of detail, more detail in his finances than almost anybody has. Hes released his balance sheet. I think anybody in the American Public who wants to look at this information has as much information as they could possibly need. Stephen, good to have you. We hope youll come back of a lot to get to and not enough time today. Thank you very much. Were keeping an eye on the stock market selloff. Well have much more for you on the markets ahead. You can see the stocks continuing their slide with the dow down 1403 points. Triggered by the release of the fed minutes yesterday. The market is now pricing in a higher likelihood of a june Interest Rate hike. Well talk about that when we come back. Real is touching a ray. Amazing is moving like one. Real is making new friends. Amazing is getting this close. Real is an animal rescue. Amazing is over twentyseven thousand of them. There is only one place where real and amazing live. Seaworld. Real. Amazing walmart and cisco helping the dow. The s p 500 down 2031. Watching that closely. Back in a minute. Business. S going big fol youll never get charged data overages, ever. Get your own 24 7 dedicated business account team. And with double the lte coverage in the last year you can get more done in more places. Right now get 2 lines with 10 gigs each for just a 100 bucks. And for a limited time get a hot spot free, yeah free. Switch your business to tmobile work today. Good morning everyone. Greek state television says that aircraft debris was found in the southern mediterranean by greek authorities searching for that missing egyptair flight which vanished from radar screens. 66 people were onboard. The plane was en route to cairo from paris. British Police Arrested a man who kald h. Scaled a wall, got into the grounds of buckle ham palace last night. It man wasnt armed and is being held in customer dichlt the police say the royal family was never at risk. Fiat chrysler recalling half a million Jeep Wrangler suvs because the drivers air bag may not inflight in a crash. It recalls wranglers from 2007 to 2010. The company is not aware of any injuries. The gun purr forredly uses to kill Trayvon Martin has been sold for nearly 120,000. George zimmerman putting the gun up for auction online. The high bidder used the handle john smith. The auction website says they are still verifying payment. And that is the news update at this hour. Sayer yashgs ill send it back down you to. Sue, thank you very much. Insider trading indictments to be unveiled and related sec civil case. The former chairman of dean foods to be charged in the criminal case and golfer phil mcwill son is caught up in this one as well. Our own amon jave are. S has more. This say long running investigation. It is a long running investigation. Its a long running alleged case of Insider Trading. Well learn more at noon when the u. S. Attorney for the Southern District of new york holds a press conference to brief us on all this. What we know about government documents unsealed this morning. We know that charges have been brought against former dean foods chairman Dom Thomas Davis billy walters. Davis has pleaded guilty and agreed to crow operate. Walters attorneys sea the accusations are falsed. Davis is charged with tipping walters about the spinoff of white wave foods and other corporate developme in. It. S. Walters is said to have profit bid a 32 million marge irn and avoiding losses of 11 million. The sec separately has named golfer Phil Mickelson as a relief defendant in a civil suit. They say mickelson was able to generate 931,000 in profits based on tips to him that came from walters and were originally generated by thomas davis, the sec says they want that money back and as we go through the documents, were learning a lot more about how this scam allegedly operated including the use of prepaid cell phones and code words. Apparently the people involved in this alleged scam called dean foods Dallas Cowboys and phone conversations to avoid detection and on certain trading days the u. S. Government is saying here billy walters, the gambler, his Insider Trading amounted to more than 30 of daily Trading Volume in dean foods stock. One other detail here that we spotted in the documents that is of interest. The sec says that davis misappropriated frun e ed funds gambling debts he owned to casinos in las vegas. A lot of details coming out and well learn more later. Thank you very much for setting us up for. That whether we come back, strokz still digesting news that irate hike could be on the table next month. Well talk to the former fed chairman. The dow at the lowest level since march 17 m. Were back after a break. What keeps mark faber up at night . He joins us when we return. Lets get to the disappearance of egyptair flight 804. Were hearing the first indications that debris from this plane may have been found in the search area. This is coming from the commander of the Greek Army General staff telling nbc news that egyptian Aircraft Found debris in the eastern mediterranean. One object a metallic object. The other an orange lifejacket. Apparently from an airplane. So it look as though theyre now finding debris. There are other reports as yet unconfirmed from the associated press, reuters and other News Agencies of other pieces of debris found. Just to recap now, more than 14 hours into this incident, since this plane disappeared, the search has been on going since shortly after it disappeared from radar. Different agencies involved in this search including egyptian and greek, the u. S. Now contributing a plane from the air base in sicily. One plane taking part, a naval part taking part in that search. The french are offering their help as well as a number of private merchant ships looking for signs of this flight will 804. The egyptian aviation minister saying just about an hour ago admitting when pressed by reporters that this is more likely an incident caused by terrorism than by aa technical fault but not going so far as to say we know what happened here. Not basing it on anything than the evidence in front of us. And trying to defer until the actual debris is found, black boxes are found and an investigation follows. Both the ee ggyptians and frenc have opened investigations and grieving passengers and relatives wonld whaerg happened. Some of the families in paris, we understand, are headed to cairo. Well keep you updated with the latest. Back to you. Kelly, presumably they appear to have made the engines. Thank you. The latest on that downed egyptair flight. Dow is close to the lows of the session. A major concern for the markets is the fed minutes which we had yesterday which put a june rate hike or a rate hike in the near future front and center for many people and, of course, weve had Stanley Fisher speaking this morning and we also will have the new york fed president on his feet even as i speak with a prepared speech that were told has nothing new for the markets but there are q a events after. That lets bring in the former president of the dallas federal reserve. Bob, good morning to you. Good morning. Were you surprised that we had a coordinated view that a near term rate hike was on the voices and then an xplisive reference in the fed minutes yesterday. Do you think there was a feeling they got out of step with what the markets were doing . Or the markets were out of step with where they really are . Im not sure who is out of step. It takes two to be out of step i guess. I think its time to pull the trigger. Its not an ideal time to be raising rates. But we got to remember that rates are almost on the floor. What they really need to do is convince the markets that its happening and its okay to happen. And time and time again in this instance, theyve not been able to followthrough. Either because the data is disappointed or because the markets have moved very negatively and it appear to be less stable. April is better than the First Quarter. We have the retail sales number, production numb, cpi number, Housing Starts number. Seems like weve got a little window of opportunity here. So then why do you think were seeing such a negative reaction not just in u. S. Markets but around the globe, emerging markets, currencies got slammed overnight on the stronger dollar. It spills into commodities and bonds and stocks everywhere on one little baby rate hike suggestion. It sort of mystifying to me. Of course, people heavily into bonds and especially longer term bonds are going to see the prices of those fall when rates go up. But thats perfectly anticipatable if i can create a word there. And its not it shouldnt be a surprise to anybody that Interest Rates cant say stay zero forever. Oh, come on, bob. Youre being disingenuous. Youre the guy that came on six months ago and really very explicitly raising a the love eyebrows, suggested we knew we were going to pull up the markets. We knew we wanted to create a wealth effect and we conducted Monetary Policy in the way we did to brit rally. You and i had a conversation of how sustainable that rally is. If you move in the other direction and raise rates, presumably the rally therefore comes on some pressure. Doesnt one follow the other on your own argue snment. Well, were taking our medicine on that today and yesterday. We should have to start over and do it all again. Do you think theyre adequately communicating to the market at the moment . I mean fishers speech was like 55 pages long at 9 00, delivered nothing new. Dudley is apparently on his feet with nothing new in his speech. Do you think there is a case for actually saying something a little more concrete to the market or reinforcing what the fed minutes said or all about option alt and leaving it up in the air . Well, i think fishers speech was honoring you cant expect every speech to be about Monetary Policy the i dont think there is nothing disingenuous about that. Think we had four fed president s recently warn people that they were underestimating the chance of a move in june. This is kind of interesting. These minutes provide so much cause for concern. I remember when the minutes were released a day or two after the next meeting and november gave a damn about the minutes. And im not sure its an improvement to do it three week after and six weeks after. Bob, to the degree that the fed in your view should react, how much is about wages and how much of that is about government mandated wage hikes whether its a minimum wage or now the new overtime rules . Well, i do think wages ought to be growing faster. I dont call that wage inflation. I think it would probably be offset with productivity. Theyre waiting on the pce price index for april. That is running below the cpi. But we all know that when when the calendar turns offer a few more pages, well have this comparison of last year to this year will become very different. I mean, most of our price stability lately has been declining oil prices. And oil prices dont have continue to crease anymore for that to come to an end. They just have to stop declining for a while. Yeah. As they infecti ieffectively fa the issue. Thank you for your time. Good to see you. The former chairman of the dallas fed joining us from dallas. Do want to get to shares of Dwight Church and dwight, maker of arm and hammer baking soda and other names in the households area. There are a number of different rumors reported in various News Services about a potential purchase of the company. The latest seemingly out of spain. A new service under the name negosios saying that they may be preparing a bid for the company. That had the effect of moving the stock up. It is up offer 8 . The shares now halted. We got news from the company that says the multiple rumors reported in the press and it says this, its proven to advise its employees and investors the company is not engaged in discussions with nor has it received any proposal or communication concerning a potential bid for the company or any of its business units. Its not otherwise aware of any information supporting these rumors. We will monitor the stock when it reopens, one would assume it will be lower than it was at 105. 07. Lets get an update on the dean foods Insider Trading case. Were monitoring that from washington. Thats right. I just brought you up to speed on the dean foods alleged Insider Trading case. Well be getting more details at noon. But golfer Phil Mickelson has been mentioned in connection with this case and we now have a statement from Phil Mickelson himself. Its fairly lengthy. Several parra graphs long. Let me read you the highlights of what Phil Mickelson has to say. The sec has now completed its investigation into the investment and concluded that Phil Mickelson did not engage in any wrongdoing. The sec filed a civil complaint against certain individuals including an acquaintance of phils but that complaint does not assert that Phil Mickelson violated the securities laws in any way. On that point, phil feels vindicated. He also says here that hes going to return all of the money from the particular transaction in 2012 and he says phil understands and deeply respects the high professional and ethical standards that companies he represents expect of their employees. So thats a statement from Phil Mickelson. Well wait to see what more detail we get on this at noon. Back to you. All right. Thank you for the update. Take another look at walmart. It having the best day, biggest one day jump since october 2008. Its up almost 9 helping the dow. Not enough. The dow is still down about 130 points. Well talk about walmart and this markets selloff when we come back. Proud of you, son. Ge a manufacturer. Well thats why i dug this out for you. Its your grandpappys hammer and he would have wanted you to have it. It meant a lot to him. Yes, ge makes powerful machines. But ill be writing the code that will allow those machines to share information with each other. Ill be changing the way the world works. interrupting you cant pick it up, can you . Go ahead. He cant lift the hammer. Its okay though youre going to change the world. We egyptair story, and how the investigators are trying to piece together what happened early this morning. Joining us to discuss is greg fife former ntsb investigator, and greg, good to see you. Good to see you, sarah. How are the regulators and the security personnel are trying to determine if this is an act of terror uchl, and walk us through how it works . Well, it is a couple of parts of the investigative process that is taking place. Of course, the security folks are identifying who had hands on operations with that particular airplane. Probably not only at Charles De Gaulle airport in paris, but this is the fifth flight of the day, and so they are going to go back to see who had the opportunity to access that aircraft on the other four legs of the flight. The investigators wo are ho are to be looking to gather the cause of the event are gathering the information are from the radar data and the satellite data and try to get some history on the aircraft, and lot of information, and as much as they can are from the airline. But the key for all of this is what is taking place right now, and that is trying to identify the location of the wreckage and not only examining the wreckage, but getting the cockpit voice recorder, and the data recorder. Clearly, we are waiting for answer, but the two locations make you fear the worst. We are talking about egypt where a bomb brought down a Russian Airliner last fall, and paris which is as you have known targeted by a series of tear errorist attacks in the last year, and so do you to wonder about the location, and make the lily hood rise or not thinking that way yet . I am not sure it is the location, sarah, but the players involved. Egypt has been involved under scrutiny for the safety of the flying public, and it is all about the players in all of this, and the political ramifications that it may have. This airplane was 15 to 20 minutes late getting out of the gate, and if somebody intended to explode this device it was delayed by 15 or 20 minutes, and it is going to put the egypt closer to shore, and in egypt air space and some people thought that it may have had something to do with this, but i am not necessarily convinced with it, because if you back up the airplane 15 to 20 minutes, it is going to put it 75 minutes back up the flight path away from cairo. And greg, i think that the it would appear that the point that you are bringing up about where the aircraft has traveled will be very important moving forward and it is not just ki row, but in tunisia who has their own problems. There is a huge amount of the european aircraft fleet, no patter who owns them or the flag they are under crisscrosses the mediterranean three, four five times a day, and these are popular destinations for the bulk of europeans, and i wonder potentially what the implications are here. If you find that, let us say for the sake of argument, that a device is put on one airport, but only detonated two flights down the line where that leaves that massive industry, and tourism operation. And you bring up a great point, and that is tourism, and when you look at egypt and what the impact was when metro jet went down, even though it was a russian aircraft, the egyptians took a bulk of the blame for it, because of the Security Issues that they had had, and now we have an egyptian flag carrier who may possibly have additional Security Issues, because the device may be on this aircraft and possible for the death and destruction of an aircraft, and that is going to have a severe impact on the people traveling to that region, but then identifying the carrier they intend to use to get them to and from cairo or to other places in the region, and that could have a Significant Impact not only on egypt as a country, but egyptair as an airline. And we will continue the await the details, and more importantly, we will bring the latest up to you. Greg fife is an nstb investigator. We go to rick santelli, and with the dow down now 175. Yes, and thank you. The dow is under pressure, and the fed normalization can be uneven. I want to welcome in my guest, peter chur. Thank you for taking the time. I completely lost. Well, i will tell you what, peter, here is the issue that i have, and i have it that we are looking at the highyield, and the guys . Hello . Are you there, peter . I dont have him. Well, i will tell you, we seem to have lost peter. We are going to discuss what is going on in high yield. Okay. You are back. And explain the difference if you buy the etf high yield, you own a significant and sarah, we are having problem, and so i apologize and back to you. We will get you, because and i know that you want to talk about the highyield and the fed. And now, a quick check, because the dow is down 165 right now, and we are seeing the declines across the board. Walmart is one of the bright spots, and the banks are hit today, and a lot of the gainers yesterday, and while the banks are on the other side, the only industries that are positive right now, simon in the s p are c consumer, and staples, and utilities which are interesting, because they are the dividend yield payers which sold off in minutes yesterday. And it is important over the coming days, because there is a judgment lag in the market. And coming up on cnbc, inside of the meeting with Mark Zuckerberg and leading conservativesb and a couple off those in attendance will join squawk alley live when we return. In a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. Of fixodent plus adhesives. They help your denture hold strong more like natural teeth. And you can eat even tough food. Fixodent. Strong more like natural teeth. 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And we are following the disappearance of flight 804 from paris to cairo, with the jetliner losing contact before it crashed. And the authorities are saying that a terror attack is stronger than a technical attack. And we are watching that closely, as Kayla Tausche and i are prepare foging for this hou involves terror concerns, fed speak, the retail earnings, and banks, and a lot going on. And oil is slipping by 3 , and a lot of moving markets here today, but we are starting with egypt today. Yes. And looking at the retail earnings, walmart is having one of the best earn inings in a dee and looked like it would gap up, and the earn inings are ahead b time, and u. S. Ahead, and the the u. S. Comps up, and guiding u. S. Comps up one, and e e e ecommerce up as well as this morning, our Courtney Reagan reported, it is not the kind of revenue they are happy with. And as the shares are surging the most since october of 2008, it is still on the lower bar for the company which they themselves