Coke ver cusus pepsi, one firm,e 35 billion deal webetween omnim and publicis. Far from the only deal. Saks is going to be bought and the battle over Pharmaceutical Company elan ends with a big bid from perrigo. The second half of earning season, hertz and wynn in focus. The hertz ceo will join us as well. Help wanted at amazon. The Company Announcing today it is adding more than 5,000 jobs across the United States. First up, deals involving highend retail and pharma in the fix today. The biggest deal u. S. Based omnicom and publicis group, a merger of equals. The new Company Worth 35 billion and will be the Worlds Largest advertising firm. However, the deal is expected to face intense regulatory scrutiny. Live with the ceos of omnicom and publicis later on squawk in the street. In addition, perrigo and elan and saks and hudson bay. Merger monday . Yes. Yes a merger monday. Got to go there. Thank you. Welcome. Dont believe it is that is it a sign of things to come. Certainly theres a peace of business each of these deals done for particular reasons. The big deal, of course, the advertising merger of equals, in part to try to stem the rise, not the rise, the dominance of google. Elan, of course, for sale in part because Royalty Pharma came after them, they fought that off successfully, decided to auction themselves. Hudson, an inquestion is it company that owns lord and taylor. Congratulations to elan. Right to do, it turns out that people want to own irish domicile companies because youre able to quickly change tax structure. Perry gos a company i have had on mad money multiple times. You see the store brand made by them, the Company Makes the the store makes money, perrigo makes money. Saks doesnt have growth and theyve got a lot of stores theyve been closing, closing, closing, not adding. The ad deal, i dont know. I mean, do you put two nongooglerelated companies together and hope that you can stop i mean nononline companies traditionally and hope you can stop dole . Have to give it a shot. Have to give it a shot. Only become more and more important. The automation of the purchase of advertising. Programmatic. Only growing. So you have to believe it. But we all know, in the history of mergers of equals. Ones that span the atlantic ocean, its not the easiest. Yeah. All of these deals, david, ones about tax structure, as jim said, right . Saks deal, real estate. Merger of equals, a weird cat. Not your classic types of mergers that would lead you to believe there is a newfound confidence among ceos. They are not. I would agree with that. And they are not necessarily of the type that will bring further consolidation. Perhaps the ad deal is a sign of something. Although these two of the big players. Right. What you see from here is a question. But i think youre right in that. Its not necessarily a sign of, hey, im feeling more ebeale yent about the business and the economy and im going for. Carl alludes at the top, when you merge the two advertising firms, so many clients are in conflict. So i mean, you just jump . Pepsi and coke, literally. A little weird. I dont think theyll be saying you take the west, ill take the eastern hemisphere. Well ask the gentlemen how theyre going to deal with that. Its a fair point. Talking about trying to close this thing by the Fourth Quarter of the year, some say that may be aggressive. Perhaps it falls to the First Quarter. They need 75 different approvals in terms of countries which gives you a size of the Global Nature of the deal itself. As a side note advertisers on the deal we think if m as coming back it will start to show itself boutiques, no big banks advertising on the big deal. Certainly notable. You put i just never understood exactly when theyll have the large one and then bingo, theyve got the large one. You know one of the things that i always hear, if you go in New York Times story, all of the companies are involve in advertising. The ceo raises the point many advertisers are saying, you know what . We dont need ad firms. We know to go to google. We know to go to sales force. This is the new world. We know how to reach younger people. You dont go through omnicom publicis. Is that true . May be go through the exchange or facebook as well. Do you necessarily need them to figure it out for you . I dont know, jim. Look, ive got to tell you, on the facebook call, its clear they are facebook people, speaking to the companies that im dont they have ad firms . Are they really going right to the company . Right, right. Seems like theres this ind intermediation and its a big deal. It may be a way to save the business. I dont know whether it does. We flow how it worked out for sterling cooper when they merged on mad men. Hasnt been a great plarj marri far. No, when you force out the great creative guy, you know what happens. We dont get that opportunity often. Lots of big deals to watch. Eyes are on those as we enter the Halfway Point of earnings. A big week of quarterly reports. Wynn resorts did miss. Hertz global matching estimates, revenues above consensus. Late in the program, exclusive interview with the ceo of hertz, mark fis sore ra. This week, 130 companies. We have to balance that with jobs on friday, bank of england ecb fed. Look, these are all of the things where we constantly worry what happened to that housing group. Interest rates went up. We had a go back over those Conference Calls from housing last week. Its like holy cow, this big move up in Interest Rates hurt. Another move up in Interest Rates youre going to have the stocks down 30 . Youll have them down 40 . Some companies are taking back the momentum. Caterpillar announcing gigantic buyback. No doubt if reaction to the very poor well, lets say maybe the worst reaction to any. Goldman has a note today putting earning season into s r perspective, misses on sales are punished more than usual. I think thats true. Now weve got to look back and say, three weeks from now, where we have the Fedex Express situation, which is the express right back to where it was. 3m the one that bucked the tide. Go back to 3m, you know what . He did manage to come up with quart that kept the stock up. Howard schultz, we spoke to him he came up with a quart that made you think. 9 comps. Beautiful. But thats not the rule for Corporate America. Nobodys talking about 9 comps or 9 rise in revenues at all. No. But you think about it. Facebook doing well. Yes. Very visible companies. Mcdonalds did not do well. What im saying its hit or miss. When you miss, its really tough. Home builders, i dont know, Home Builders are just they were growth stocks. Now theyre value stocks . You cant go that fast. You need a couple of quarters before you go growth to value. You were on twitter early, very early, and you gave a list of your favorite specs, speculative plays. Yes. Radian. Still working. One of the things that i find its amazing how it works. I get it, nature got it. Aquan. Its an easy way. Terrific. The airlines are bifurcated, southwest was not good. Us airways lost in the shuffle. Fabulous quarter. Genworth, they are like the Insurance Companies that keep coming back. I was with someone this weekend talking about cdos worth pennies on the dollar trading at 80 cents on the dollar. Insurance Companies Stuck with stuff, turns out its coming back, not to haunt them but to make them. Right. Is your list of surefire winners getting smaller . This downgrade of whole foods today . Boy, i dont know. Do you want to get in front of the cohort that says we will protect you from the food chain . We are not we know you younger people, this is why i like white wave, you younger people, you do not like to get the mcdonalds beef. You want our beef, organic beef. I dont know. I dont know if i want to get in front of the juggernaut of organic and natural foods, which is to me a generational thing. Not unlike publicis omnicom, a generational thing. Younger people view the world different, they do it differently. Note on whole foods titled not the time to be greedy, right. A valuation call, sticking to their guns on the valuation call. Isnt that sort of a crystallization of the Broader Market . People are talking double tops, people are talking low volume. Its just number of downgrades versus upgrades is so overwhelming, you come in this morning, you say, all right, okay, lets see. Weve got lazear downgrading expedia, thats a d disappointment. Whole foods downgrade. We have rbc downgrades t. Rowe, everybody it seems like is trying to get ahead of what they think is the next leg down. But the next leg down has eluded us so far. It has. Those kinds of downgrades are not often or not always, if in fact, often a predictor of whats future performance. A lot of defense downgrades and the stocks turn out incredible move. Raytheon, lockheed martin, much better than expected earnings. You get into the face of these companies that are doing well, with the ground grades, and then youve got to upgrade them after they move. Were seeing a lot of companies that are doing better than what the analysts expected. Right. This move in asia, though, disconcerting, is it not, in terms of worries about growth . Were always talking about china. But japan again japan, go to bed last night, japan is down two. You wake up, its down much more. Japan is a major destabilizer. I believe i believe in the i believe earnings are coming back. But people only care about the end. Right. If the end goes the wrong way they dont want to be there. What are people thinking about wynn . Its chinese gambling. People want to write off china every single day. Is there every Day Companies like, china can help us here . No. No. Its about water supply being polluted, air being unbreathable. Their rice paddies being completely tainted. Yes coming observe here, reaching into smithfield foods. Theyre not contentious. I want i sound like a senator. You sound like a member of the ad committee. Its not enough. As long as theyre not setting up a plant that has chromium as how about melon what they put into the milk. Melamine . Theyve got a bad rap now. People not looking. When Proctor Gamble reports you want china to be good. Pepsico, one of the reasons they had an upside surprise, was china. Theres a tension. Remember, always a tension between guys making hay in china and guys getting ripped apart by china. I think of my interview last week, china blinked. China seems to blink solar. They blink a lot, theyve got something in their eye. By the way, speaking of the hertz number if you have a question for the hertz ceo, tweet us your question with the askhertz. Well get the answer straight from the sort later in the hour. Amazon shares on a roll. A hiring spree at the online retail. Also ahead, the ceos of omni. Com and publicis, creating the advertising juggernaut coming up on squawk on the street. I look at futures. Chock full of action. Whats summer doldrums . This is september in july. More squawk on the street from post 9 back in a minute. [ male announcer ] come to the golden opportunity sales event and experience the connectivity of the available lexus enform, including the es and rx. This is the pursuit of perfection. With fidelitys options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens, and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. To experience the precision handling of the lexus performance vehicles, including the gs and allnew is. This is the pursuit of perfection. Online retailer amazon plans to add 7,000 jobs in 13 states that includes 5,000 new fulltime jobs at its u. S. Distribution centers, 2,000 fulltime, parttime, seasonal positions across the Customer Service network. President obama scheduled do visit an amazon plant in tennessee tomorrow, interested timed ahead of that. Ahead of the jobs number friday, jim, which people say will be net, feel more positive than the gdp number in the middle of the week. Thats certainly the way the markets been saying to people. We seem to be bumping up, are we going to 2. 7 on the tenyear. This amazon is an amazing story because though theyre cryptic on the comp, they are developing warehouses in order to get away from, i think, paying u. P. S. A lot of money im mentioned this during a break last week santori. Sending product from the west to the east and i want it on amazon prime. They dont do as well with prime because they have to pay a big check to u. P. S. If you pull warehouses everywhere the Conference Call is hard to be critical of because amazon basically he says, have faith. Right. Everybody seems to. I think if they lost more money the stock might have been up more. Thats the old days but its worked. Netflix allowed to lose money. Teslas allowed to lose a fortune. You can lose anything you want in tesla and its better because you have to stop bmw. Have you seen the i3 today . I saw it. Only goes 100 miles. You can buy a range extender for more money. I wonder how tesla will act today. Bmw having done some work on them, work on this for a long time. Its a high priority. And they have global reach. They do. A lot of marketing muscle. Teslas only sold a couple cars in europe. I dont know. Tesla deutsche bank, upgraded last week. Tesla netflix, amazon, call it tan. The more money we lose, the more the stock goes up. Netflix didnt lose money, to be fair. Amazon unexpectedly amazon moving big into international is something people want. By the way, go back to the idea that theyre hiring. It just makes you love them more. Amazon theyre hiring. Its fabulous right . Best thing. The president s going there. Yes. The new american company. Bezos, the greatest the if theres anyone, heir to jobs. No doubt about that. Kram alreacramer will give us at to the trading week. More squawk on the streets. Weekdays are for rising to the challenge. Theyre the days to take care of business. When possibilities become reality. 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Fundamental. Start. Fundamental. Avon is doing well. Tupperware, stock didnt come in. The group is doing well. Theres a lot of cash generated by herbalife. 2,000 calls bought near the end of the day herb herbalife because they report today. Maybe someones going to get lucky. The question here, jim, continues to be, are they going to go out and borrow a good deal of money, as a result of what you say they have strong cash flow, ability to they can borrow relatively cheaply. Could they borrow 2 billion . What. Im saying, this is the story out there. Do the math. 2 billion. Dutch tender at, i dont know, somewhere up here. Right. And you buy 30 of the companys stock back. Karl you could squeeze. Say youre short 20 million shares. Short 20 million could be squeezed badly been. I mean, but that big presentation about how herbalife is not is a ponzi scheme, how does that play into the buyback . It could not sure. Its not able to stop it. Im not about fundamentals here. When we talk about the name, this is tur pupurely a marketd phenomenon. If they were able to borrow and do it. They dont have audited financials, not any fault of their own. Right. Caught up in the scandal. No fault. Michael johnson there are plenty of banks willing to loan them 2 billion if they wanted to do that. This is an international company, its a big employer of people worldwide. You could say everybody who works for them does poorly. Thats not the case. Michael johnson, used come on mad money constantly and lay out a story we generate a lot of cash and buy back stock, and that would be something you wouldnt want, if youre short, because no, especially if you come with a tender for a meaningful percentage at a price well above where it currently is. How much of this would again karl icahn, obviously, whispering in Michael Johnsons ear what to do. He can go up, by the way. Carls capped at 25. Hes at 17. Dont hold me at the numbers. Hes allowed to buy calls, not that big. Maybe hes coming around. Focus on the fundamentals. Fundamentals are pretty good. The battle between one large short seller and everybody else. Not able to destr