Nikkei. Overnight in asia not good. 2 drop wrapping up what is the worst week in three years. Of course concern about china in terms of exports or lack thereof. A look at europe where we also are going to see a good amount of weakness. The follow through as you might expect from here yesterday, a day in which we saw the s p down almost 2 and the nasdaq nasdaq down 3 . Lot more than that. Yeah. Lets get to our road map this morning as you might imagine. Does start with that meltdown if you want to call it that in the markets. Stocks slide around the world. You just saw. Is this the start of a correction . The tip of the spear, jpmorgan profits disappointing. Jamie dimon confident in the american recovery. How will the banks weak results drag on the market and other financials. The flip side wells fargo profits up 14 and those shares are rising. Another bad month for sales at gap. Gap discloses a 6 drop in march samestore sales after a disappointing february. Gross margins taking a hit. One downgrade ive seen. No relief on wall street this morning, of course, as weve told you. The futures moving lower after thursdays selloff which saw the nasdaq suffering the biggest one day slide in 2 1 2 years. Biotechs and the momentum names continue to get hit after having been up the day previous. You had the dow and s p posting the biggest oneday point declines since early february. Not interested in point declines. Just a matter of percentage. Thats how everybody measures their performance. Right. As ive said day in and day out here, the pain is much worse even than you would see in a 3 down day. It continues in the hedge funds. I would have thought at this point many of them who may be a lot of the volume have already taken their gross exposures down, and i thought that was a sign of it on wednesday. Yes. And i felt it. Remember were down 3. 5 from the high, were not down that much. To hear all these blowups is rather incredible. Yesterday was something ive never seen in 31 years. Okay. I saw incredibly strong u. S. Economic data and Interest Rates go down dramatically and its continuing today. And that is a combination of the fact that worldwide rates are so low, why not be in a much more riskfree bond than a greek bond, but also because the money is pouring out of equities. Pouring. And going into bonds. And a lot of this is what youve been saying. That hedge funds, im calling them wounded tigers, and the momentum funds, overwhelmed by supply, overwhelmed by zoes kitchen. Zoes kitchen. That pyramid were trying to stay away from, although it will figure in some of our shots today. Ever been to the pyramids . . Theyre not that nice looking and eroding. Well this doesnt have a top. That pyramid. Of course another public offering. Youve been pointing to what you believe at least to a certain extent is weakness in some of the momentum areas. High multiple names in technology and biotech. In part because of the supply that keeps coming from new wi wish issues. We talked about 3d printing. Im going to give people at home let me give you some insight. When i go on a book tour, 3d, d, d, d the stock most asked about. It is the stock most asked about. This morning voxle jet which you and i have joked about when it was in the 40s and 50s prices 3 million shares at 15 bucks. David, this stuck was in the 40s and 50s a few months ago. Isnt it interesting that theyre still selling and thats whats going on. Fireeye. Why sell at a high price if you can sell at a low price. If your basis is down 52 from the high. Still raising money down here. Fireeye a good company, now they did they announced when the stock in the 90s 14 million secondary it was then prized in march, second week of march, priced at at 82. Feye. Feye is now at 48. This is just less than a month a month ago and this secondary you have to believe if youre opening one of these stocks or if youre an insider, youre going into your board room saying we are not fireeye. We are going to get the deal done now and we are not going to be down so quickly. I mean im just saying that theres no price these guys want to sell. There may not be a fundamental underpinning to this weakness. Like the actual how the businesses are doing. Yes. Not just the businesses but the broader economy. There is quite good. Concern about china and we shouldnt understate that. That has been an important drive he of Economic Growth worldwide. Export numbers were far worse than had been anticipated. They were part of our bond. You cant necessarily draw many conclusions from one number for one month from china on anything. Export you know, the import and export numbers were both horrendous. They were. You know what no one talks about thats a fundamental but there havent been other fundamentals. This seems to be largely a lot of stocks that had an enormous move up that suddenly started to move down and then a lot of forced hedge fund selling or taking down a gross exposure and that keeps playing out. Right. The companies its the shareholders. Not the companies. As opposed to 2000, in 2000 the companies, many of them were jokes, 300 went under. In 2014, we chose to value some companies as revenues and those companies are getting hammered. But so are the dhaeps have good earnings. Thats going to be a mistake eventually. In other words, what im trying i dont want to hate myself as a bear paint myself as a bear. Im saying there are bearish segments where i thought the underwritings would cool and the insiders would cool and they have infected other areas of the economy and unless you have a dividend, david, a nice different depds, theyre going to dividend theyre going to hammer you. Mcdonalds, did you see mcdonalds yesterday . Is there a Fast Food Company doing as poorly as mcdonalds . Stock was up 1. 08 yesterday. 3 plus yelled. Better than youll get in a lot of places. You can buy a Berkshire Hathaway bond at 3. Mcdonalds will turn it around. Thats why the stock is up six bucks. If you are trying to live off Retirement Income or plan a portfolio to give you some income what are you going to do . You still got to end up back in the stock market. Who are you going to call . Verizon andth. Another reason at t has been doing extraordinarily well. And that stock was good yesterday they kind of like lets behold the stone wall. The fundamentals are not particularly good. Stonewall jackson at at t. A couple names taking divergent paths this morning in the very important area of financial services. Two big banks this morning, wells fargo posted better than expected firstquarter profit, 1. 05 a share helped in part bay sharp decline in the lenders charge off rate. Jpmorgan chase missed street expectations. Q1 earnings, 1. 28 a share. That was hurt by weak trading particularly in fixed income currency and commodities. The earnings released chairman and Ceo Jamie Dimon did strike an upbeat note. Dimon said, quote, we have growing confidence in the economy, consumers, corporations and middle Market Companies are increasingly in good financial shape and housing has turned a corner in most markets. All right. We got that going for us. Wells fargo does not have trading exposure. You know what no. Im going to own this. My Charitable Trust sold some jpmorgan. What are we talking about first here . Start with jpmorgan. Yeah. But, you know, we held some of it. This was a bad quarter. Okay. As opposed to saying that it was a good quarter and people are misunderstanding it. It was a bad quarter and no one is misunderstanding it. One of the few misses of jamie dimon. I read the annual letter yesterday and i said on mad money i said boy, everything every data point for banking is bad but he reaches the conclusion that better times are ahead. Well, you know what, thats jamie, better times are ahead. Jon stumpf speak softly if not at all and carry big numbers. Im mad i wasnt telling people this wells fargo number, look at this, commercial industrial the lone growth here is incredible. Real estate, automobile, credit card, jpmorgan didnt do well on credit cards. Well, its not the credit card force. Wells fargo up 9 , new account growth up 29 . Jon stumpf you are americas greatest banker. Yeah. I talked to a couple of pms who focus on financials this morning, portfolio managers. Weak on most fronts is what they said about jpmorgan. Think hes distracted. By the way, they were talking about theres an expectation in fixed income currency commodities would be weak. Not in lending. Weaker than expected. Not lending. Im mad at myself. I saw it. What do you mean . What did you see . Because his letter did not give you enough to hang your hat on to like the stock. Just to like the country. Now im not you know, were not trading the country. Right. Were trading jpmorgan. Dividend boost but that was in line. Glen shore from isi one of the better analysts, solid Business Performance consumer deposits up, card sales valium up 10 . Jpmorgan. Client Investment Assets up 16 . 14 billion of long term net new flows, dividend yield of 2. 8 . Took the Mortgage Service rights. Im switching. Sister, mother. Mortgage service that they did that wells fargo did not have. Look theyre making a lot of money not doing well. Who knows. This is the bull case. Theyre making a lot of money not doing well. Wait until you see what happens when they do well. The problem is wells is doing well now. There was a reserve release and a bit of a tax benefit we should point out on wells. No, thats why youre you were good partners. Because youre tempering my enthusiasm on wells and tempering my negativity on jpmorgan which youve done since 1998. Not necessarily using these two stocks. Good. Im glad were able to do that and i like the fact that we are. Good partners. We have a lot more coming up. Retail, the economy, the consumer. You want to hear what macys Ceo Terry Lundgren has to say about the mall. We have him. Speaking of retail, what is gap blaming for its weaker than expected samestore sales . Yeah. Well have the answer after the break. Lets give you another look at futures by the way. Very important market day here as we follow yesterdays shellacking. We have a lot more squawk on the street live from post nine. Save you fifteen percent or more on car insurance. D Everybody Knows that. Well, did you know pinocchio was a bad motivational speaker . I look around this room and i see nothing but untapped potential. You have potential. You have. Oh boy. Geico. Fifteen minutes could save you fifteen percent or more on car insurance. I cant wait to get to mattress discounters good and early for the tempurpedic bonus event. Choose 300 in free gifts, and, get up to 48 months interestfree financing with any tempurpedic mattress. Mattress discounters we got a fair price. Ruecar. Com, my feeling is that. Theres no buyers remorse, you know. Im happy with my purchase. Its the truth. When youre ready to buy a car, save time, save money, and never overpay. Visit truecar. Com unfair. Thats a little rough. Yes. Thats a little rough. Thats real. 5 drop its not titanic. Come on the white star line, give me a break there. Shares of gap are falling, falling. Theyre not sinking to the bottom of the ocean. Never to be heard from again. The apparel retailer did post weaker than expected march samestore sales down 6 . Gap predicted the month would be negatively impacted by a shift in the easter holiday. Last year i think it was march 31st, this year late april. This morning janney downgraded gap to a neutral citing incenter growing inventory growing faster than sales. Thats the oldest when it comes to retail. The inventory grows faster than sales, get rid of inventory as mickey calls them our mistakes when you walk to the back of the store sometimes. When my father told me he was doing inventory at gimbels too many gab ber dean pants and they got too many gab ber deans. The old navy number quite disappointing. This company has become hit or miss and i dont mean that terrible chain called hit or miss which i think went under. I shouldnt say that. Maybe my hit or misses have closed. The ones that i would go to. Its possible. But this is the kind of thing that has become endemic with gap. You know, is it good, bad . You cant be month to month in the retail business. You have to be consistent. Were going to hear from Terry Lundgren. Hes been consistent. See what he says. It is interesting that gap does chooses to share samestore sales with us monthly where there are very few retailers anymore that do that. That has disappeared. Its a hedge fund in terms of something that you hear from. A hedge fund annuity plan. Once a month you can make money as a hedge fund manager. Bed bath another downgrade. An article they talked about what stocks were down a lot and the overvaluation. Can i in bed baths defense, the stock is down 20 , selling 12 times earnings. Dont lump that in with splunk. This is not splunk. Now you you know, splunk . I do. I know splunk. Only because you mentioned it a number of times. Its a satisfying word to say in a way in a strange way. It means going down into the cave. It does. Yeah. The bear cave. Like that . I do. All right. Overall how should i approach retail at this point . Case by case my friend. Case by case. Case by case. As opposed to all negative. The rth is such a powerful etf and we dont talk enough about etfs on the show. Whats happened you get this retail. Watch walmart. Now look at this. Im finally not talking about watching tractor supply. Watch walmart. The warren buffet retailer. It has held in very well. It is not my favorite but watch that one. Versus Family Dollar which by the way i wish you were here yesterday, but you had to go to the play. I was at the second grade play. You did the right thing. I made the plays but later on i didnt and i regret. Everyone at home, go to the darn play. The play was indecipherable but my daughter was the star. She was the star . She is a star. My daughter is in chorus. Starred in field hockey. I just want to point out if you look at these retailers, the biggest ones are not expensive. Lets focus on costco for a second. They did Charitable Trust did a great number yesterday. Stock was still down. So i dont want i find that where the bargains are, rth takes down everything and you look at the ones doing well and buy them. Did you get a look at this yesterday . Came out at about noon, amazon. Coms annual letter from mr. Bezos. And it is largely taken up talking about retail, of course, with all of their new ventures or the things relatively new, whether its prime, prime instant video, fire tv, the amazon app store, game studios, spoken word audio, web services, fresh grocery, career choice. Did you know they pay people, i spent the last four months studying this company, i did not know they have a pay to quit plan at amazon where once a year they offer to pay their associates to quit. The first year 2,000, then it goes up by 1,000 a year until it reaches 5,000. Why would you say you have a plan to offer them a pay to quit . Well, the goal is to encourage folks to take a moment and think about what they want in the long run and employees staying somewhere they dont want to be isnt healthy for the company or the employees. Whats the earnings per share . Thats not read the letter, man. Just read the letter. Bottom line. Please. Read the 97 letter. He said there. Dont be me. If i can have me i can be me. Dont High Frequency trade me. Future cash flows forget reported earnings. Amazon will find a level where it will bottom and the momentum guys will come back after the momentum guys replenish their coffers. The momentum guys are busy trying to figure out how much chipotle to sell to buy zoes kitchen. Okay. Thats going to be a small offering so theyre not going to need much. Its a giant pyramid. Its a pyramid that doesnt have a top. No. Yeah. I find that disturbing. Well, we dont want the market to have a top. Maybe thats symbolic no top. Maybe so. Youre right. Right now were talking more about heading down rather than up. Up next we do have cramers mad dash as we count down toward the opening bell on this friday. Heres one more look at futures. It does appear we are going to open in the red as you can see right there following yesterdays significant percentage losses for the major averages. 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See what the ford experts think about your tires. At your ford dealer. All right. We have 7 minutes before an important opening bell on friday. H r block. H r block is up nicely in a down day. Definitive agreements on the bank. I had mr. Cobb on recently and this is a company that has got oodles of cash but hasnt been allowed to buy back stock. Remember, it is almost its almost impossible under obama care for you to do your taxes without leaving money on the table. Hence that great ad campaign they have. Suddenly got momentum from the business and youve got cash coming in and david your know when you get under get out of Federal Reserve oversight its pretty good news. There is an expectation of a significant capital return here now that bank is being sold. They were forced. Dodd frank kind of forced them to have to do it. Its been up for sell, they got it done. The Investor Base waiting are we going to get a significant return in capital here. I dont think theres been news this morning on that front. You could say maybe this is place to go if its down. Yesterday automatic, adp, doing a spinoff, very positive. Stock didnt go up because of the market. What i try to tell people not everything should is goes down at once. Some shouldnt go down. H r block get this at 28, because the market is bad, thats kind of interesting. The market has been bad for bioteches. You and i had this conversation many times which is simple. The multip