Pipeline on shore and hasnt stopped at this point. Crews are trying to contain the mess. Right now lets get to the market business of the morning. You can see this morning the futures are missed. Up by 5. 5 and nasdaq down by 0. 5. They say the country will not be able to make an imf payment due without its international lenders. The euro hitting a two week low on renewed concerns about athens debt and in Corporate News the Justice Department expected to announce a settlement with five of the worlds biggest banks. Theyre accused of rigging the currency market. Fines are seen topping 5 billion. The first out of the gate. The swiss bank says it will plead guilty and pay 545 million to u. S. Authorities. A possible change in u. S. Tax regulations would effect the spin off in alibaba. Its working toward the plan spin off in the Fourth Quarter and ads it understood the irs statement was not specific to the company. It was a statement made yesterday about shifts in how they were going to be approach approaching spin offs and whether that effects this and also depending on what happens to yahoo japan. These were the ones already in the works. Correct. And then whether they think theyll get it done in the Fourth Quarter. The meeting at 2 00 p. M. Eastern well get to see just how dovish these people are at this point. Wouldnt be surprised to see some dovishness. They get scared of their own shadow at times. Among the Companies ReportingQuarterly Results before the bell target staples, hormel and lowes. Just hitting the tape and fell short of estimates even though home depot was pretty good hes fighting to reduce bail condition and it will determine whether hell be expedited to the u. S. It was looking at an article i saw yesterday by one of our competitors that was tracking at t versus apple. Its already doing better. And they call it the dow jinx and well see how long it lasts and it just also happens. Apple made a base here and it looks like it wants to take on 800 billion and then who knows, maybe its a trillion. No tv right . Did you talk about that yesterday . No tv. I thought they said that later in the day. We said it here yesterday. That was two days ago i dont want to say it we were probably a little late to the game yesterday. Two days ago. Yeah really. But just to be clear just to the physical theyre not going to make a fiscalphysical tv but theyre going to make a better box. An awesome crazy box. I thought it was going to be an ultrahigh def. I dont think you want to get into the hardware business. Then all of a sudden what is apple only going to be one company left in the United States . Start making breakfast cereal . They dont need to do everything do they . I would not make a tv. The way they do style and the way things work but who knows if apple can make a tv. When you look at all the competitors in that phase theyre getting out of that the thing that worries me the most is apples data is much more secure and the data is more and more important and valuable. The most important market to them is one more problematic for them that is a fundamental challenge. Apples plan over the longterm, i dont think they have one. In terms of controlling that market. Absolutely. They want to be a global company. China has been a good market for them. Theyve been a great market for them. We pay that price every day. I thought you were going to say, wow, i wish i hadnt done ultrahigh def. Wow, it ruined that. But this is worse than high def porn the way we look on certain days. A little hot in here this morning. Is it . Yeah. The lightning . Do you think if you make public your concerns. I dont think anything will work at this point. Im giving up. But you continue to drink and smoke every night. Thats what it looks like. The lighting here is a little harsh. Some of your vices are. Coming out. We cant cover things up anymore with the make up room. Lets get to todays stocks to watch. Shares of etsy is under pressure. The online seller of crafts and other items posting a wider than expected loss. It will increase the pace of hiring and spend more on hiring. Check out pep boys shares jumping on being approached by a takeover. They approached the topic of purchasing a retailer. Its up by 7 . United technologies is reportedly talking to possible buyers for its aircraft business. One issue, a 3 billion tax bill is said to be holding back interest of Big Companies. Lets check on the markets this morning. Take a look at whats going on. Off by about a point and nasdaq up about a point and a half. Lets take a look at whats going on across the bond there. You see thats a mixed picture there as well with the dax and cac off marginally. Lets go over to asia and see whats happening there now. Its a mixed picture across the board. The nikkei is up not bad. Close to a better and hang seng is off and lets do oil. Crude, 5862. I want to talk to ian about crude in a moment. Lets take a quick look at the ten year. Finally should we do the dollar or the gold . We have a mixed picture in the currency world. Do you want to talk markets . Sure. Lets talk about it. Check out gold prices by about 1. 20. Joining us to talk broadly on the markets is the u. S. Equity and derivative strategist at ubs. Thank you for being here today. Looking at the markets its been surprising to see the markets hitting new highs. You have people talking about how stock could be overvalued at this point i wonder what you think is driving things here. The market is acting as a discounted mechanism here. Looking through all of the worries. Whether its the economy, earnings flows, valuation, et cetera, geo politics obviously, looking through and the message is the Global Economy is going to get better in the second half and into 2016. So discounting all of these things there arent many alternatives when youre looking at the fed reluctant to raise rates. We flipped the play book from last year. U. S. Stocks rising. Oil moved back up. The dollar has been falling recently. Maybe a bottom but the dollar falling and will look past to better Earnings Growth for the second half of the year and better Economic Growth as well. A lot of that is noise. If you look at the moves weve seen in the dollar. Youre probably thinking thats noise and you want to figure out whats happening with the economy and what do you expect for the rest of the year. We should see an economic rebound in the second half of this year. We expect the dollar to resume its strengthening trend but at a much slower pace than last year. We saw massive strengthening of the dollar and 26 and the market was moving around there. But tapering was tightening and 12 plus months into the cycle so the rate hike itself isnt going to set markets off on the down side or on the side for another tightening move by the fed within the bigger cycle. Do you think the bigger issue is that the consumer is hanging in there . Or all of the weak numbers is that because people are still spooked by what happened in 2008 . Theyre not ready to take the savings they have seen and put it back into the economy . Theres definitely an element to that. The memory of 2008 does linger but it is our expectation that as we continue to see the jobs numbers remain reasonable and we continue to see gasoline being reasonable at some point the consumer will rebound and in the past this is usually happened sort of 9 to 12 months after the oil price first starts to fall and were right at that sweet spot just when economists have more or less given up a lot of hope that its going to happen. So thats a potential upside surprise for markets. Also savers have been getting nothing. The implication is that 25 turns into 50, 75 100 and demographics as well, right . We have an aging population. So people that rely heavily on bonds and income also getting nothing finally seeing some light at the end of the tunnel. What do you expect to see with the stock market by the end of the year . Additional gains . We do. We expect a return of around 7 to 8 and 4 Earnings Growth. Geopolitical. The dollar and the United States looks more stable. How much of that do you think is already baked into the price. It is remarkable the resilience and the threats to europe are such that the european markets can have performed as strongly as they have. Its essentially a look through and realization that rates are as low as they are so stocks look good in general. I want to thank you both for coming in today. Thank you. And our guest host this morning as we said earlier is the president and founder of the group also editor at large Time Magazine and foreign affair columnist for that magazine. Ian has a new book out. Stood the big day . Were out. Officially launch day. Its called super power. Three choices for americas role in the world. Congratulations on the book. What number book are we on now. 9. 9 books. But most of them were academic and you would not have picked them up. We certainly wouldnt have launched them here on squawk. Anyway the subtitle is three choices for americas role in the world. So the obvious question is what are the three choices for americas role in the world. I think the response is to start we do have choices. Despite that American Foreign policy is in decline the United States is not going to only do one thing and i think well see that in the 2016 elections where Foreign Policy is a big part of the conversation. Very quickly, the three, indepenceable america. The idea that we don want to play a leadership role but no one else is going to and no one else can or wants to and given how bad that means the world is going to turn out, not just the middle east but eurasia and more broadly, what will happen with the allies we have to continue to promote our values and be as much of a leader in alliances and global architecture that we can. Second is money ball america which i probably shouldnt use because the oakland as are in the toilet right now. The old moneyball. The idea its very unsentimental. Its were not going to promote democracy when people wont listen. Were not going to force human rights on countries that are able to say no and the middle east is too much of a disaster. Were going to really focus on the investments that are going to provide not values but value back to the american investor. Its much more looking at the u. S. As a corporation and how will we run it to maximize it. And you think washington is going to run this country like a company. I would make the argument that when Hillary Clinton was secretary of state her strategy did not work the reset to russia for example, really try libya, only pinpoint and get rid of gadhafi and dont spend money on it and focus on economic state craft. Focus on the transpacific partnership. That was the beginnings of that kind of policy. Hilary was the one that said how can you criticize your banker on human rights talking about china. Thats a very moneyball approach. Was it the country as a foundation or Clinton Foundation as a corporation. I knew you would spin it the other way. Nonpartisan. Oh, yeah exactly. So did george. He did his best. With what happened should we care about that . The white house said theyre not going to like their light their hair on fire and theres people with skin in the game said we took it and cost a lot of american lives and now we lost it but it wasnt isis that had it last time. This was a whole new enemy or do we look at it as the same kind of hard liners. Does it matter that its lost . Does it matter that baghdad is 70 miles away . It matters for the iraqis a great deal. The question is does it matter for the United States. Not with moneyball. Most importantly it doesnt matter with independent american. The third choice which is a real choice saying lets lead by example. Dont demand respect by saying you have to do this. Command respect by having people capital, actually come to the United States. We should be too big to fail. So for lots of americans that are agitated but cant find it on a map. Do you have a deal to copromote your books . Is that how this happened . Hes pitching too big to fail and youre pitching was this all agreed upon. Its a whole royalty scheme pretty much. Lets go back for a second theres a real question. When you have marco rubio standing up and saying im indesensable. Lindsey graham is going to get in the race because he knows Foreign Policy and saying we have not done nearly enough on any of these fronts you still have to say what exactly are you going to do and why . How much is it going to take . I dont happen to believe after hearing everyone from washington yesterday saying we must destroy isis and the same people saying no boots on the ground i dont think those things actually go together. But how about the strategy so far is raepeaping rewards. Is that still kind of true that theres success with the way we tackled isis so far. I think if you ask in terms of the resources that the americans have actually put toward it and the level of direct risk to the United States one could make that argument. In terms of whether or not iraq and syria are getting worse, the number of refugees the instability thats coming to countries like lebanon and jordan and turkey also going across the mediterranean. We put boots on the ground to get their financial guy supposedly and the timing was interesting that they fell almost at the same time. You want them to fall before you did that right . Better to have the good news the reveal should be later but of course they got him when they got him but the real point there is the reason you send boots on the ground for that American Special forces is because you believe youre going to get a lot of intel out of it. Its targeted. Obviously were not going to spend 6,000 boots. Were going to send what was that 40 or 50 boots. But the geo political danger in the middle east is great. The saudis doing very badly and the iranians are going to help us on the ground. Nobody can think thats going to be a good fit over the medium term right. I just i dont know. Did he join twitter so that we wouldnt talk. Thats what all the networks talked about. I didnt talk about that one bit yesterday. Not you. We talked about it. Such a cute conversation with bill clinton. We are going to talk about ramadi. We have colonel jacobs joining us. Coming up why shares of lowes under pressure this morning. But first heres a look back at this date in history. E announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. Lowes earnings and revenue missing the mark this morning. Senior analyst covering retailing and hard lines at jp morgan chase. Its a tale of two cities with lowes and home depot. Were trying to put our finger on what the difference is. Do you know . If you look at the gap its 70 execution and its 30 location. Markets rebounding faster on the housing side. They have very high exposure to california florida, nevada and they have better street level locations. The other 70 is daytoday you know face to face interaction with the customer having the right products in the right place at the right time. They dont know how to do that yet or have tastes shifted . I think it theyre trying to get there. If you have a good experience at home depot youre likely to go back there. They not only have to screw up the opening door to lowes but you have to have a good experience to want to go back there. Five years ago werent the rolls switched . It was more about ten years ago when lowes was doing much better then. At home tee po you go in and some people thought it was a sears where you might not see anyone that works there the entire time youre there. Now he did a great job obviously but the same thing happened to lowes. Who took their eye off the ball there. Like many what i would describe as atrofied Growth Companies they waited around for the macro while home depot focused on execution. They started to turn the ship back in 2012. They are closing the gap versus home depot. Comps trailed by 180 points. That was 2 to 300 basis points but it takes time and clearly the execution still not up to par. Do they still get mileage out of being different than home depot in terms of the experience. Does that still work or do people just go to the one thats closest. Ive been in one recently and was put off by they didnt have a lot of items in stock. This is a one off experience. I walked in. Some stuff i liked. You were looking for drill bits. No, for stuff for the bathroom to change out a lot of the fixtures and things. This could be a one off experience but chris whats your experience with it . What have you heard . If you look at the in stock rate at lowes its lower than home depot. Its better than three years ago. Theyre changing the way they planned the business. Changing the way they allocate inventory. Tots to the question on the experience in the store, lowes does better on bigger ticket projects. They have more kitchen and bath and appliances. The market is coming their way but home depot is not standing still. As they go more toward big ticket home depot is putting a lot of dollars behind that to go after where the consumer is heading. Actually lowes stock has done better anyway in the past year but results havent seemed to werent born out by that. All right chris. Thank you. Thank you. Do you go there and see whats going on all the time . Is that your job . You have to do that . Yes, we donation wide spring store tours. Come on. Yes, we do. We have been in d. C. Miami, new jersey, San Francisco. Your people. Its not you. Your people do that and report back to you, right . I do it as well. He has to see it with his own eyes. Youve never stepped foot in either have you . Home depot i have. Light bulbs. Theyre right here. Light bulbs. Thats mine. Important things. Flash lights. Flashlight batteries. I spend more time in the stores than you guys do. When we come back this morning, the Iraqi Military suffering another huge loss. The key city of ramadi the latest