Week low at this point. Up by about 1 . It looked like they were headed back to 50 and thats been given up over the last couple of weeks. We do have a special lineup of guests ready to tackle all things energy. Hess ceo john hess and christopher crane. Plus the president and chief operator officer of Royal Caribbean cruises. And then later, Southwest Airlines chairman and Ceo Gary Kelly. Theyre set to post Quarterly Results later this hour. Well talk to him about the results and what he sees ahead with the Energy Picture as well. Lets tell you about whats going on today. A couple of stories were watching this morning. Ecb meeting right now. Policy decision due around 7 45 eastern time. That will be followed up by a News Conference by president mario tr mario draghi. Economists say its likely the ecb will keep the door open for more monetary policy. Earnings once again the big focus is the market. Before the bell well be hearing from caterpillar, mcdonalds, dow chemical and many others. Then this afternoon well be watching for a tfrks at t. Now we say alphabet instead of google and amazon on deck as we do microsoft. Another big report weekly jobless claims, existing home sales, leading Economic Indicators and the Kansas City Fed survey. So a lot going on. And in terms of stocks to watch today, andrew mentioned well all be watching, were interested in earnings. At t releasing Quarterly Results today. The company is saying the streets consensus revenue estimates are inflated. You know. No surprise. And then all of a sudden you get blind sided. At t suggests analysts arent appropriately accounting for directtv which it acquired in july. One time issues i guess . For whatever reason but in this case it is directv which really watching how at t advertises now that did transform the company because theyre a major tv provider now. Nfl games and everything else. Why would you be wrong on the revenue side . Youd think on the earnings per share because of directv. Are they overestimating what theyre going to bring in in terms of revenue. I dont know. Unless they were just assuming there was more revenue there than there really was. American express, were going to watch. Posting a nearly 16 drop in profits. That missed wall streets mark. The credit card issuer hurt by higher expenses and a stronger dollar. Ebay. American express. Im saying he has been a fan of them for a long time and they have been the right call for a very long time and the question is will they be the right call for a continued long time. Can i go ahead, finish that thought. Company also raised its full year profit view and Texas Instruments look to be a winner today. Earnings and revenue coming in better than expected and it has nothing to do with orange juice. Getting a boost from the Services Provider beating the street on the top and bottom line. Back to at t. Just looking this up there is a good reason for why theyre saying the directv revenue is inflated. Analysts are including directv revenue for the whole month of july and they only included it july 25th. There almost a whole extra month of revenue that was not part of the deal. Clears things up. If you take a month of directv out of your earnings thats going to have an impact. Also we should tell you cit group announcing that the ceo will retire in march. He was appointed five years ago to help turn around the lender after its bankruptcy. He is young, right . He is young. Its already been five years. Since he left morgan stanley. Also Kinder Morgan shares under pressure. They need to maintain Financial Flexibility in a weak commodities market. Executive changes at lululemon. The chief product officer is leaving after two years. The role will be eliminated and it will add a new creative director job. They have been dealing with margin issues and quality lapses as well. The stock is down 1. 4 . Were also watching shares of valeant today. Its been the big question mark over this stock. Slammed by as much as 40 yesterday on the short seller report that suggests they may have fraudulently inflated revenue. Theyre accusing them of failing to disclose ties to specialty pharmacies which helped create phantom sales. In the meantime, Hedge Fund Manager bill ackman is a big investor in valeant. Tried to do a number of transactions. Complicated transactions with them. Taking advantage of the stock plunge buying another 2. 1 million shares. That means its now valeants second largest. He owned a large stake before. And he was trying to now my memory left me. Is he up still . Hes probably still up. Hes probably still up but the question is of course whether you think this is house of cards or the real thing. Hes a wellknown watcher of houses of card from herbal life. But hes on the other side of that. I know he is. So that would say something. If he sees something in herbal life and doesnt see it here, that is a conflict. He never really argued that herbal life is an accounting fraud. Hes never argued herbal life is an accounting fraud. Its a big scheme. His argument is that the structure is illegal and fundamentally different than whether you can actually catch the accounting fraud. Well talk more about valiant but a ton of political news this morning. We have the stage set for next weeks debate happening here on cnbc. Joe biden saying he is not running for president and paul ryan closer to getting the job of House Speaker. John harwood is here covering all of these stories. Great to see you. Good to be here. Lets talk about the stage for the debate first. We now know who is going to be where. Thats right. Ben carson and donald trump in the middle which is the poll positions in the debate reflecting the fact that theyre leading the polls. You flank out from there and Carly Fiorina on one side. Marco rubio on the other. Jeb bush who we thought was going to be in the poll position the entire race is on the flank from there and then you move on out to the ends and have got a crowded stage with ten people we have the earlier debate at 6 00. Where you have four. So 14 candidates to talk to. A lot of people say its still early and anything can happen at this point. But four years ago at this point how many people are still in the race roughly. 8 or 9. So a pretty crowded field. The major drop out, rick perry dropped out early but the major drop outs didnt come until after we got through iowa and New Hampshire and people started fading. So this is kind of the norm although maybe a little different too. Well, 14 is extraordinary. Thats a very large number but you get into the fall with a significant number of candidates. Some running on fumes and dont have much money or much to show for. Thats typical. Scott walker was in the cnn debate. That was his last major event. Thats really a piece of news that we moved on quickly from but when you think about where people thought scott walker would end up in the race, pretty profound. Biden announcing he thinks it was too late to run. You were right. You said that for awhile. John thinks like a democrat. Youre so close to going well played. So close to the goings on in the Democratic Party that it was obvious to you all along. Sourced is the way to think about it. Honestly, it was so obvious all along that this was not going to be the right decision for him. Couldnt beat her. It was late and his family had just been rocked by the loss of his son and he said openly that he didnt think he had the he wasnt sure that he was going to have the emotional wherewithal to put 100 of himself into this race. For somebody that isnt sure that means they dont have it and we knew it was getting to this place. When it looked like he might there were certain democrats and the take was its going to be good not really being tested by Bernie Sanders necessarily because nobody thinks thats likely at this point so maybe she gets toughened up by having put down joe biden. Her poll numbers go up and it solidifies her chance of being the nominee. I never thought it really wasnt solidified. I agree with you. So its good but we knew she was the presumptive nominee all along. Biden. Well, he could have been a spoiler. 70 million. Shes already got how many delegates. And put bernie in a position of Bernie Sanders in a position of really stepping in. Right. But no, i think, you know, theres some ways in which he would have made life harder for her. On the other hand, beating any time you beat somebody people look at you as a winner. Because policy positions were so similar he was going to have to go after her on ethics. He wouldnt do that. Thats what i mean. How could he mount a challenge . That would have been difficult. Ethics is a pretty weak read to go at within the Democratic Party that likes her so much. Its a general election argument for republicans. Not much of a primary. We have a little testimony today. We do. And i think shell probably two into that system in a little lighter mood than she has been before. The Benghazi Committee has taken a few hits. Serious hits. Joe biden news. Her performance in the debate last week. Dont do that what does it matter thing again where she raises her hand and goes what does it matter. Did you pass that along to her people . Game it out. What does it matter . I just dont think at that point that not looking back to see if security could have been better or tightened saying that theyre already gone what does it matter to talk about security now. Thats not what she was saying what tuz it matter about. But the hearing itself. Looks like theyre not giving the actual endorsement. Pitching it as a super majority. I mean from paul ryans Statement Last night this is good enough for him to move forward but i have to tell you its a pretty shaky vehicle he is driving into this speakership because you have the expressed reluctance of some of the members. People on the right, laura ingram and others hammering him about immigration and i think the Republican Party still hasnt worked out some of the issues and we have a rough ride ahead and you mentioned the debt limit. Thats going to be a challenge. I suspect john boehner is going to try to clean that up and get him through the 2016 election but thats kicking the can down the road. John. A lot to talk about. Its great to have you here and well be talking to you a lot in the next few weeks. In the meantime, lets get back to whats been happening in the energy sector. We showed you oil. Obviously its made things challenging for Oil Companies in this period. The price of crude falling sharply since 2014 and one of the most severe downturns in decades. Plunging to a six year low in august of 38. U. S. Rig counts delined as the industry adjusts to the sharp drop in demand. Joining us to talk about the future of Energy Production is our special host today john hess. He is the ceo of hess corporation. He joined the company in 1977 and became ceo in 1995. He is fluent in four languages. John, thank you for being here today. Great to see you. Great to be back. We have watched what happened with oil prices and its been a stunning and dramatic decline. You think theres light at the end of the tunnel. Why is that . Its a long tunnel but nothing cures a low price like a low price. The seeds have been planted for a slow recovery in oil price. What is the impact of the prices you talked about . First on investment. Global investment and expiration production has gone from 700 billion last year to 550 billion this year and with the recent leg down in prices even further to the 45 investment will go down further next year. Secondly, the industry itself is running huge deficits. If you assume 50 brent and right now were at 48, 45 for wti. After Capital Expenditures have been reduced as well as dividends for exxon, conoco, its 100 billion. Why does that matter . You dont have money to spend to grow production. They were planning on doing it anyway. They were slashing cap ex and not getting into it. Theyre slashing more. The impact of the deficit is going to slow it. The energy agency, iea is a big progre prognosticator, it will go down about 400,000 barrels a day. The one good piece of news in this is demand. And even with a slight slow down demand should have up about 200 Million Barrels a day and nonopec going down 500,000 barrels a day there will be room for market share recovery. That sounds like Wishful Thinking when you Start Talking about demand in particular. We have looked at a severe slow down happening around the globe. Questions about whether the fed will be able to raise Interest Rates at this point because theyre so worried about what they see. Just take china. China is about one third of oil demand growth. I was in beijing about four weeks ago and i can tell you theyre bumper to bumper. From 7 00 a. M. To 7 00 p. M. The traffic they have there dwarfs anything we have here or on the 101 in l. A. From the oil perspective china demand is strong. U. S. Demand is up about 300,000 barrels a day year on year. Saudi arabia is up 100,000 barrels a day. India is up about 200,000 barrels a day so the oil demand picture is pretty good. There is another company that thought the industry had seen the worst of the u. S. Oil saying three months ago but now theyre saying it looks like more like 2017 before recovery kicks in. The market is underestimating how long this period is going to take. He says they have a significant pending supply coming and that shows an increasing challenge. I think its right. We are in a lower for longer period but we have been through these downturns before. 1986. 1998, and 2009 and it takes about two years for the market to rebalance and were in the first year of that two year period. In terms of that, does that mean youre ready to invest more. The whole industry is waiting for a strong high signal and what people dont realize is when the strong price signal happens theres a lag effect for investment to happen and then a lag effect for supply to recover so supply is going to go down next year and it will take several years for enough investment to go in for the future supply to keep up with demand. That should rebalance the market. We heard from others that this time may be a little bit different because technology has advanced and when you see the price pick up again for the United States it will be much easier for them to flip the switch and get back into it. Is that not the case . Thats an oversimplification. Were going to go down more next year and theres a lag effect from the time you decide to make the investment and probably 12 to 24 months before the production will come on. It takes time to get the planning. A lot of people have been put out of work. We have to get them back. Thats an interesting argument. People thelss movmselves moved find other jobs. What do you think it means for the oil price in the next 12 months. I do think that first of all nobody can predict oil prices or the stock market and i think the fact that its gone down the second leg everybody has been surprised and were sort of balancing along the bottom here but we think by the second half of next year supply and demand starts to come in and balance with the numbers that i talked about and youll be seeing a price certainly north of 60 and to get any real price signal to get investment going again youre going to need a price of 70. Where we operate as one of the leading producers or the gulf of mexico were also a leading producer. John is going to be with us for the rest of the hour. We have a lot to talk about. Coming up when we return, squawk box sales away. The president of Royal Caribbean joins us to talk about the health of the consumer and much, much more. But first take a look back at this date in history. You can move the world. But to get from the old way to the new, youll need the right it infrastructure. From a partner who knows how to make your enterprise more agile, borderless and secure. Hp helps business move on all the possibilities of today. And stay ready for everything that is still to come. Prge 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. Welcome back this morning. Were talking about the future of energy this morning with a Large Consumer of fuel on the high seas. He is the president and ceo of Royal Caribbean cruises. He is in charge of the Energy Consumption for the fleet of 43 ships and our guest host for the hour is john hess. You guys use a lot of energy to move these boats around. Yes. Ships. But the move over the last five years has really reduced the energy but how do you do that . So we understand. If you asked us 15 years ago are we trying to reduce energy usage we would have said of course but by todays standards we were in Elementary School then so were doing everything we can conceive of to use less energy to get from point a to point b. Probably one of the most interesting things we have come up with is air bubbles. So air being projected out of hulls in our ships now. The newer ships which creates a mattress of air that produces the friction going through the water. So in terms of just total energy costs on a percentage basis i wouldnt call it a flight but a journey, a voyage theyve come down how much . 30 or 40 compared to where they were a few years ago. But take out the actual price. Yes, the efficiency. Just on an efficiency basis. So since 2005 were about 20 to 25 more efficient in the amount of fuel we use. How much