Sanctions against wells fargo. Well have that story plus reaction from former fdic chair sheila bair. Well get to her in just a moment. Plus a new report says amazon is getting more serious about its own shipping business and it may be looking to ditch fedex and ups altogether. This as amazon stock continues to power higher. More on that story coming up a little bit later this hour. And shareholders voting today to approve one of the largest corporate deals in history. Well take a closer look at Anheuser Buschs takeover of sb miller. Is that enough . We have more in the next couple hours. Lets begin on the breaking news of the oil front that has moved the market today. Jackie d. Has it for us. The spike in crude oil putting some traders off guard today. Closing today over 47 a barrel. Now, three major headlines coming out of reuters regarding the opec meeting, but remember, theyre citing sources. Nobody officially has gone on the record here. You mention there is potentially a deal to limit production with november execution. Also theyre saying that they would limit to 32. 5 Million Barrels a day. Thats about a 700,000barrel cut from where production was in september, and also saying they would go to nonopec output for support here. Lets break these down, traders talking to me about this saying, first of all, you need to get an official on the record here so everybody waiting for that. But second of all, that execution in november is exactly what opec would like to have happen right now. They dont have to exactly move at this point, but they keep prices up for roughly another two months. Meantime, the russians and u. S. Is the biggest production. The russians dont think theyll be producing any time soon and the u. S. Is cut short. We had a reversal in positions here. A lot of short positions going on. People not expecting to see anything concrete come out of this meeting, so you probably got a little Short Covering today which helped that spike. Still, my main takeaway is traders telling me theyre not convinced by this, not just yet, and theyre looking to potentially fade this rally today. Its been a time since that first announcement. Lets get to breaking news with wells fargo now and will frost who has more on these sanctions. Will . The state of california is suspending business relationships with wells fargo for one year. A symbolic move rather than a major hit to their earnings. Wells fargo has responded saying, we certainly understand the concerns that have been raised. Were very sorry and take responsibility for the incidents in our retail bank. We have already taken important steps and will continue to do so to address these issues and rebuild your trust. This, of course, comes following the news of a night that the Company Finally succumbed and took back pay. Stumpf will take 142 million. It represents all his investment earnings, a big chunk, but an amount that many people think is not enough, including senator warren who thinks he should resign and return every nickel, based on tweets earlier today. Mr. Stumpf, of course, faces congress again tomorrow where the tone remains tense. Heres fed chair janet yellen taking the heat on the lack of Bank Regulation on congress earlier. Dont you think its time the fed does something . How long does this stuff go on before you get outraged and take action . Well, as you pointed out, we have done something, the action you described in 2011. Do you know an 85 million fine to this bank is laughable. I know you know that. We are very concerned with all of the compliance problems and violations of laws. You know theyre laughing at you, right . You know theyre laughing at you. The time of the gentleman from massachusetts has expired. No doubt this will worry bank ceos across the country, wondering whether the whole sector will face a backlash from regulators and lawmakers just months, of course, after the banks finally performed well in the big ccar stress test. Guys . You covered it well. We were going to ask you questions but you covered it all and i know you have a plane or train to catch to get to washington for those house hearings tomorrow. Here is the former chair of the federal deposit insurance corporation, sheila bair. What a day. What do you think . Well the club acts and now these sanctions. Theres always a pilingon effect when you have a situation like this. This is serious. This was very, very bad. Although i do think what the board did yesterday was very significant. 25 of what hes accumulated over a 30year career at wells fargo, that packs a punch. So, again, it was bad. It was very bad. It was in the league of the kind of conduct that brought us the subprime contract . No. It was in the retail bank. And again, it was bad, i dont want to suggest otherwise, but i do think there was probably an underreaction on the regulatory response and now youre seeing it swing oethe other way. This had to be a huge blow to california. That had to hurt. I suspect they do a lot of business in california. Just the desire for State Government officials to show a sign of disapproval and protest, and california is really making a very big statement. Should john stumpf resign . I dont think so, based on what ive seen now. Thats the boards decision, obviously, but it was bad, what happened, but there are a lot of good people at wells fargo. Its a good franchise, its a valuable franchise, so i think you have to take all of that in the mix. Again, its all kind of relative. Im looking at the various ceos who lost their job as a result of the subprime crisis. For him to kind of take the hit, if it happens, it happens. I think one of the reasons there is a lot of outrage here is people dont understand it, so you cant always understand ceos and mortgage back securities. Do you think hes taking the fall for something i think there is some pentup anger. Yeah, i think its coming to roost. When you consider what senator warren said on tuesday at the Senate Banking hearings, you know, 5,000 people, and as you put it, 12 an hour tellers lost their jobs over this and he is still in office at this point. It was, and i think that was one of the many missteps. You just dont know what youre reading out in the public. It looked like they identified the problem, just kind of this lowlevel employee conduct and it was about supervisory incentives and the structure. The question is, why didnt they see this . I said it before, and i said it at the fdic route, when they scope those exams, they should read. Read analyst reports. Sometimes where theres smoke, theres fire, sometimes theres not, but you should take a look. I think they were a little behind. They recouped and did come forward, and i think the two lead regulators worked well on this. It was very serious. They breached a mainstreet customer trust, so theyll be paying a big price. This will be going on for quite some time longer. As we look at the pendulum more broadly here in terms of the health of the banks and the behavior of the banks and the regulation on the banks, where do you think we stand . Have we figured this one out appropriately or no . I dont think we do. Its safer. It is a better system, theres no doubt about it. But the cultural issues are still there, the risktaking incentives are still there. Its now moved into what we call the shadow sector, the less regulated sector. Its a combination of things. How do you police that . Its what the fed is doing, is to get those Capital Requirements up, because the higher the Capital Requirements, the more pressure you create to downsize. The market regulates it. The government says you shouldnt be bigger than x amount of dollars. The market drives that. By building that capital cushion, you dont have to worry theyll have to get a government bill out, which is the last thing you want to happen. Its probably not over yet, right . I doubt. It sound like the opc, theres going to be a lot of litigation, some shareholder litigation. And the employees, right . The employees. I can only assume the state will be coming in. This is going to be a long haul for wells. Theyre a strong franchise going into it, but im sure that she looks young. I still prefer raising capitalization. Be sure to watch cnbcs. That is tomorrow and the action begins at 10 00 a. M. Eastern m fim Keith Fitzgerald of mondaymorning. Com is with us, and Rick Santelli checks in from the cme in chicago. Steve, what do you make of the pop in oil, the impact it had on the oil stocks and then the overall market right here . Oil and the whole oil patch has been torqued to go higher. If you look at where oil is now, bill, still struggling to get back above 50 a barrel, thats still extremely bearish. If you look at what opec says, even if its a nonofficial opec, what does that mean to the overlay . What does that mean to the environment . You cant take it for face value anymore. They always disappoint. It doesnt matter. You dont need production limits, you need Production Cuts, drastic cuts to be bullish oil. If oil is not going to be bullish, the market is not going to be bullish. Oil should be bullish on global growth. There is no global growth. Our gdp is lacking and ever shrinking. Thats why im still bullish. Keith fitzgerald, its interesting to look at this potential seating of 300 Million Barrels. Again, what would you see as the significance of these announcements . Is it just the sense that opec is going to act Going Forward to try to choke off the oil supply . I think youre seeing a reflex. This is a lot of hoping. The bearish case is still very strong. I would be looking to fade this rally. There is not an official on record. You have iran who needs a lot of currency right now. Opec has tried to violate every agreement its come up with in recent history because theyre never acting like true partners. Im really skeptical when i hear about this one. All right. Rick, let me pivot you to Janet Yellens testimony. I thought of you when i read some of the headlines about this. When she said the banks themselves are well capitalized, theyre in much better shape although they are suffering from interest income, the lack of it right now. I thought of you because i could picture you saying, well, whose fault is that right now . Do you want to pick up that ball . Absolutely, and i think its acute in europe right now where if you think our rates are low, you have to dig a shovel to find the european rates. I think Deutsche Bank is just ive said it many times, the canary in the banking coal mine. These are interesting issues and i think banks will have a hard time. As far as all the compliance issues, you had sheila bair on, one of my favorites. The banks were saved. Well never be able to look at what would have happened, the counterfactual, but boy, i tell you, if you could go back and change history, letting banks fail and trying to have the, at the time, sheila at the fdic, guaranteed deposits, we probably wouldnt have been in this mess. She did say one thing thats so important, Capital Requirements. Take the futures in the street. If you believe people are speculating too much, you raise margins, end of story. Its the same principle in Capital Requirements and its the same principle on everything the Banking Industry may dive into, whether its commodities. I dont think any regulator or any agency of the government ought to tell these institutions what they can and cant play. But they dont need to, as sheila pointed out. If they get into things you think are dicey, let them sail on their own sailboat. Just make the cross to do so more expensive. Thats the way to accomplish these things. And i do think we have to keep an eye on the Deutsche Bank situation as its metastasizing in what we see Interest Rates doing. Within four basis points of the alltime low yield, we really must Pay Attention to that in europe. Rick, where does that leave us . Speaking of capital, especially capital of the big german bank. It keeps moving lower, although william was saying the fundamentals are good enough to raise rates, so where do you invest . I think you have to go for quality companies. They missed their crisis in formation, they missed the crisis in recovery. They have an opportunity for a return on their money right now, and to ricks point, this is a contagion waiting to happen. They carry 20 times the size of lehman book. So the fact they think they have this under control, to me they have no idea what the true risks are. Steve, are you trading at the banks at all right here . I just think the banks stand too many headwinds right now. Even if you look at wells, you say, that was just something, it was an anomaly, its not going to affect any other bank. Banks are going to have their brainstorming meetings. Its going to curtail sales. Its going to affect them. Its going to affect growth. Its going to affect some level whether its incremental or if its a substantial effect. I think that financials, there is no Interest Rate environment for them. This is another headwind. I think you have to stay clear of them. Eventually theyre going to be a buy. Theyre not a buy just yet. Give us a sense, rick. It continues to drop. Is it just tracking the german boon . If so, maybe you could try to move around it. What do you make of it . No, i think we are. I think were tied to the hip. The jgbs closed at the lowest yield, around minus 9 basis points around the 12th of august. I think we are all connected at the hip. You cant evade the policy implications and all the issues when the ecb do something. It affects capital, capital flows at the touch of a button. We are part of this policy contagion, and i do think its one terrific reason for our central bank to switch the gear on the transmission to a different direction. Listen, if theyre going to take their economies down, why do we need to be part of these bad policies . Its not about what you did, being right or wrong. Janet yellen should just look at the future, forget everything in the Rearview Mirror and do the right thing. We need to divorce ourselves of plunging rates and the implications they have for the only transmissions we truly have, the banking system, until all the other ways, capital, and we see it happening all the time, various ways for investors to find capital entrepreneurs but theyre not ready for prime time yet. Its the only transmission we have in the banking system. Somebody on some level needs to protect it. We have to go. I dont have time for a response to this, but just for the record, imf had christine leguard tell sarah eisner that she doesnt have the evidence that calls for a fed increase rate just yet. Thats what we have to divorce ourselves from. That mentality. I hear you, rick. Thanks, guys. See you later. About 42 minutes to go here. Dow is up 80. A big spike on the back of this word that opec will try to curb production at 32. 5 Million Barrels a day. Huge move there. And the nasdaq is up 5. Another big story were following. Its whats happening at nike. Does it stay at nike . The stock lower on disappointing north american results and future orders. Our Courtney Reagan tells us which other apparel makers could be suffering from the same trend. Also coming up, cutting out the middle man. Amazon is reportedly looking to replace fedex and ups with its own delivery service. They tell us what impact it could have on the ecommerce diet looking to trade at alltime highs. Another percent and a half up today. Youre watching cnbc, first in business worldwide. Announcer when they test you, stand firm and move only when you hear the seatbelt click that says theyre buckled in for the drive. Never give up till they buckle up. We are in the wake of these news that opec has reached a deal to try to curb production to 32. 5 billion barrels a day. Hess, conocophillips and exxonmobil moving up to 86. 5, and thats not even the highest level its reached. Conoco is up greater than 66 as we try to get some information of what happened there in in algeres. Twitter and loop capital downgraded the stock today. Twitter is overvalued and also remains skeptical about different business combinations, disney, microsoft among the Companies Cited as potential acquires. Paychex, the outsourcing Company Targets small and midsized businesses, and paychex reports a Quarterly Earnings beat, but it did trim its profit outlook due to what it called discreet tax items. Be sure to catch the ceo of paychex on tonights mad money with jim krcramer right here on cnbc. The dow is moving even more so than exxon and chevron. It is down more than 4 in the settin setting. You can blame it on disappointing moves with nike. Nikes american future orders increased just 1 . Thats the lowest rate in six years. Future orders are the inventory requested by nikes wholesale partners, Like Department stores that sell the goods. Yes, adidas has taken some market shares, 31 in the first half of the year, but Department Stores have been working at getting too high sales across the board. They point out that the most recent quarter, the malls inventory declined for the first time in sales in about 18 months, and that was on purpose. As the Department Stores get levels more in line with sales growth, apparel manufacturers may be getting orders for less inventory for the bulk of this year or risk bigger markdowns if the inventory sits too long in that allimportant upcoming holiday season. So john kernon says hes more cautious on different brands ability to meet current expectations going into the new year. Kernon says it is a combination of wholesale demand for vendor merchandise as well as the store closures and uneven traffic. What nike is experiencing may not be alone. Bill . Courtney reagan there on the nike story. Well head to the close with 35 minutes left in the trading session here. The dow up 89 points, much of that the gain in oil and oil stocks leading the way today. Coming up, is it bye bye to ups and fedex . Amazon is reportedly looking to replace them with its own delivery service. Well discuss what it could mean for the ecommerces bot