Germany is happy they are buying anyway. Road map like this, markets looking to recover as stocks stumble, cautions sprepds and earnings begin. Speaking of earnings, a beef for alcor, returning to profitability, and shares rise in the premarket. Skies clear, American Airlines raise a forecast for shares growth margins, up sharply after a rough week for the other carriers. Another day, another inverted dollar, a brpd new motivated tax merger this morning. Marching overseas ending up in dublin. Stocks hope to bounce back from a rough tuesday, nasdaq falling more than 1 for the worst session in two months. Stocks like facebook and netflix take a hit. Small caps slide. The russell 2,000, biggest two day drop since political and dow closed below 17,000. Dow and s p still positive for july, jim, but dows in danger again of having the first threeday losing streak since april. I think that this airline news, american air, is going to bail out a lot momentum stocks. We dont think of them as momentum because they are inexpensive on earnings basis. Thats unusual. Youll see a turn in the industrial portion of the market very much linked to aerospace, alcoa, didnt hurt that at all talking a lot of positive things. Can it turn around the yelps, i dont know . Those have really had what i regarded as being the kind of selling that happens on thin days. Couple big etf sellers, couple baskets we dont know about, but i think the momentum decline began when delta missed its passenger revenues for june. For seat miles . Yeah, and extrapolated to american, and that extrapolation was faulty. You know, hearing again resemblance from the latest selloff from earlier this year to the momentum names or wellknown names in the Hedge Fund Community where cries of pain seem to be a lot sharper than for the general market. Im not sure why that happens, whether they are just not well owned or under permi inperformi dont want to lose money so they get out of there if anything turns around, but it seems to be a lot of same names. Its interesting to watch ye yelp go from high 70s to 60. Yelp emblematic of the company that could be taken over and have good earnings momentum. When i say earnings, could be showing earnings. All revenue based companies took a hit. Cornerstone concurs. Twitter. Excuse me . Twitter. Yes, people say, you know what, these are going down, the shorts come back. The etf had a story theres not a lot of short selling, which would also explain the big vacuum down, but the shorts come back quickly. Yeah. Lets drill down on a lrk coa kicking off earnings season, reporting earnings of 18 cents beat above by 6 cents, and all the Business Segments were profitable in q2, and last night on closing bell. They spoke about how the company is looking to capitalize on aerospace demand. There are two factors driving aerospace demand. One is the growth of the middle class in all of asia and the emerging countries. Second is the efficiency of the new types of engines and planes, and thats exactly where we are investing. Interestingly, they do reaffirm on the aerospace outlook, and with the rickson deal, aerospace 20 of the sales up from 17. I joked with the company saying, is this the new precision cast parts . Going to be the aerospace play . There is 4 million worth of alcoa in a 787 even though its a composite thats not aluminum. 787 have a faster business, i think they are literally transforming the company into a precision company. Theres a couple misleading notes out there today, one saying the reason why the company beat the quarter was because of the price of aluminum. The price has not changed year over year, and another is because they just saycut. I think whats driving this is they are becoming a better manufacturer closing higher cost facilities like australia, brazil, hard to close plants in these places, and because of the desire to be much higher in the food chain, its not just aerospace nineyear demand for planes, important to see boeing off that a huge order. Cummings downgraded, that will be huge, biggest swing factor, and dont forget the ford f150 going from having aluminum. The davenport facility sold out, and if they go to the lightweighting, part of the story for this, precision instruments, you raise numbers for alcoa for quite a long time. Not that there was not quite a move to begin with, though, roughly doubled in a relatively short amount of time. One of the things bad in the last quarter, they had some inventory bulge in aerospace that was short lived as they said it would be, and dont forget, the aluminum deficit is growing in the world. People always had this image that chinas exporting aluminum. Forget that. Thats wrong. What you need, by the way is cheap energy to make aluminum. Take china out of the equation, focus on this is a company thats tim con steel, but they went to more higher and higher fashioned extrusions. Great engineered products, thats what alcoa is doing, and that looks different than that of three years ago. Interesting, all the good things they say about the auto market, the Container Store says people are buying cars, buying furniture, but after they missed they say this is more than weather, more than calendar, in a retail funk. Surprisingly tepid environment. They did a funkadelic thing. They are funking out. Theres the quote. Helped them with their funk. Thought it was a George Clinton funkadelic. Heres very multitalented. One of the things that bothered me about the Container Store is the analysts will not stop. They love it because thats only 66 stores, keep expanding, a much loved figure, but since its public, its been bad. Lets own that. Ever since. They went public at 18 37. Its not a good day. Including the ipo, by the way, which i believe was day one im not sure about that didnt take long. People love products, but i think theres other companies nipping at the heels, rubbermaid, people dont think is cool at all, but i hated the idea, well, we thought it was weather, but turns out the consumer companies, go to restoration hardware, they are not blaming the consumer because they blew out the numbers. Williamssonoma blew out the numbers. No funkadelic situation across the street in a lot of the other high ends. Credit street takes it from 45 to 42. I was surprised. Didnt feel like he would lower the boom, but they have to return to growth. They came out as a growth company. I dont like to see this. I do like the management, they are good guys. My executive producer, maybe shes in a funk because, boy, does she spend a lot, the mad money producer, maybe shes been staying away, and that explains the funk. All right. You mentioned american. Americans up sharply in the premarket, carrier raising outlook for passenger revenue per available seat mile seating 55 to 65, up from 4 to 6 growth, boosing the margin forecast as well, and as you said, on the heels of klm, air france, and deltas weak numbers for june. Whats going on . July 2nd, delta took numbers from 6 this past year to 4. 5 . Analysts joined. Why . Delta said it was latin america and aal is bigger. I felt delta was a good company, but american air is really doing well. I think that we are now into this moment in time where not all airlines are going to go up in lock step like they have. The numbers here are really quite good for americans. Someone might seize on june load factor down, but past the revenue number is what you need, and that was a nice guide up, and remember they have 10 billion in cash. Those of us who are ancient, the wright brothers, never had 10 billion. You were upgraded on that flight. It was an upgrade, but the food was still bad. Dont get mad rk, but i hope fo single malt up front. We talked about consolidation in the industry and the allowing that to happen and what it meant, but aa is operating well. Doug parker, not to forget, of course, under bankruptcy, return to equity holders was stunning. One of the great trades of all time. And to the debt holders, david thanks you very much, a great position for them, but they performed since then and continue to. When they came on mad money level of confidence was such because i liked the stock, it was chilly in the sense that thats where i thought maybe they can earn six bucks. I think that six bucks is in the cards now and that make s it inexpensive. Theres emirates, option for 50 more, that deal would be 75 billion, even with the talk of challenges in cargo, worst performer in the first half of the year. Best last year, but, yeah, the margin of those planes is terrific. The big thing thats been bugging boeing is ever since look at the chart since cancer, a big xm supporter and republicans may be splitting, theres a critical article reauthorizing the export im on record saying in one form or another the article, not criticizing too much, but said 30 of the financing is xm, but its 18 . Thats not a current number of they used in the piece. Huge relative to other companies. Air bus is subsidizes, so boeing said xm, give us a break. Most of xm goes to Small Business meaning republicans con pitch late. David, as you know, Small Business is the job creator. That is what they said. The republicans never go against jobs. Jobs created by the Big Companies that Small Business win. You heard it first. All right. Well see if that happens. When we come back, another u. S. Company getting into the tax inversion game. Well have the latest chapter in that trend for mna, and after being governor of new mexico and libertarian president ial candidate, Larry Johnson is the ceo of a company developing marijuanabased products. Well talk to him about the business of pot. Look at the premark, and more squawk on the street live from the floor of the nyse when we return. During the cadillac summers best event, lease this all new 2014 cts for around 459 a month or purchase with 0 apr and make this the summer of style. In india we have 400 Million People who dont have electricity and i just figured that its time i do something about it. What were doing right now, along with ibm, is to actually transfer data through a satellite from our wind farms directly onto the cloud. I think we could create a far more efficient system across the whole network where we could actually draw down different kinds of energy based on when its needed by the consumer. A smarter Energy System is made with the ibm cloud. Sunny or bubbly . Cozy or cool . Meow or woof . Wheels or wheeeels . Everything exactly the way you want it. Until boom, its bedtime. Your mattress isnt bliss its a battleground of thwarted desire. Enter the sleep number bed. Right now, you can save 400 on the allnew c4 mattress set. Hes the softy his sleep number setting is 35. Youre the rock your setting is 60. That works. Hes the night owl. His sides up while youre in dreamland. Youre the early bird. Up and at em. No problem, because youre in it together. Keeping the love alive. And by the way snoring . Sleep numbers even got an adjustment for that. Crazy . Only if sleeping peacefully with your soulmate is crazy. You can only find sleep number at a sleep number store. Head in for the final days of the lowest prices of the season sale. Youll find the allnew c4 mattress at just 1499. 98. Ends sunday know better sleep with sleep number. Another u. S. Company making a deal in effort to lower tax bill. Sales X Pharmaceuticals merging with the irish subsidiary, and american lawmakers expressed worries about u. S. Firms shifting tax domiciles abroad, and that trend, guys, put into perspective. The service has statistics since 2003, twice as Many Companies shifted their Tax Obligations than they did in the 20 years prior to that. At least 12 more companies have plans to do so. Including medtronic, and abbvie, fourth one yesterday, another inversion. This is not a huge deal, but important. Keep any on it. Why . Well, its not just an inversion buying a company thats already domiciled or in a lower tax jurisdictio jurisdictions. They are actually buying assets, really, asset drop down or carve out from an Italian Company, s cosmo contributing assets, and salix issues shares to cosmo, and by the way, the shares are looking down as you see because of the concern about the delusion from the deal in terms of what price they pay, and salix will reincooperate with the subsidiary from the Italian Company in ireland. Why not . 12. 5 tax rate. As we said many times, you still pay u. S. Taxes on whatever earnings are derived in the u. S. What happens with the inversions is that over time, when you do inversion, the earnings stream will tend to increase more and more from the redomiciled company, from where it is redomiciled, and there are Different Things companies can do in terms of the use of inner company notice, for example, that move earnings around in an effective way to continue to reduce your earnings in the u. S. , and its less paying of taxes here and, of course, as i mentioned many times, the key being that any of the earnings that are overseas can come back, the cash thats accruing overseas can come back to this country, if you want, without having to pay taxes on it or the u. S. Tax rate on it. Watch this one because, again, what it will do in a way potentially is make the subsidiaries of some European Companies more valuable because they can be used potentially for future inversions for u. S. Companies if you follow. Oh, how about what they do . I mean who cares what they do. Shire, four times up for abbvie. Looking at shire, attention Deficit Disorder they have aderol, right. You want to see some about wander drugs, right . You would, you would remember, if your competitor inverted, they have access to a lower tax rate they are dealing with, and cash, were they to bring it back to the u. S. , they dont have to pay taxes on. Youre at a competitive disadvantage. You really are, i know. Thats what drives pharmaceuticals where other companies did did already, thats driving the next deal and the next deal and potentially the next one. Size can matter here. Look for a company that you can acquire thats 20 of the overall okay. With the carveouts, you can try to customize your inversion. I see that company, a nice subsidiary i want to merge with, and thats the right size, and well end up wherever we want to be. Lets heres what i dont see happying. Celgene, why dont they say, listen, from now on, were a swiss company, and then they are a buy. How does it i mean, are companies reincorporating in europe or just done by inversion . Largely inversion. Shut down the idea that you can move . Im not sure what the requirement is for consolidating, i dont know what it is. Tyco did it many, many years ago. Right. Seems like, to me, this is so fatuous, and i see that the president s proposing this and that for billions and citi group 7 billion. No. You want to save money for the taxpayers, stop this, but the republicans call for comprehensive tax reform. I know jack lew says, listen, do this one off, so we have a stalemate, and this stuff keeps happening. You buy a new home, what are property taxes like . The Companies Act like households, just like them. Absolutely. I cant blame them. Just cant. Im in a very competitive disadvantage with david because your property taxes are down so if i want to do something im going to invert actually. You are . A personal inversion. Im working on it. Unidentified subsidiary in a low tax area i can merge with. Four grandparents from ireland, and you can convert right now. When we come back, the mad dash and more premarket. More from the nyse straight head. Kid do you pay him . Dad of course. Kid how much . Dad i dont know exactly. Kid what if youre not happy . Does he have to pay you back . Dad nope. Kid why not . Dad it doesnt work that way. Kid why not . Vo are you asking enough questions about the way your wealth is managed . Wealth management at Charles Schwab at every ford dealership, youll find the works its a complete checkup of the services your vehicle needs. So prepare your car for any road trip by taking it to an expert ford technician. Because no matter your destination good maintenance helps you save at the pump. Get our multipoint inspection with a Synthetic Blend Oil change, tire rotation, Brake Inspection and more for 29. 95 or less. Get a complete vehicle checkup only at your ford dealer. Welcome back to cnbc, im michelle carusocabrera, and the Mexican Congress has final approval working all night on their Telecom Reform bill affecting two publicly traded stocks, amx and the Big Tv Company in mexico as well, and when we see amx open today, where the the reason the stock is going to trade actively is because in anticipation of the announcement or decision by congress, the Company Announced last night they are going to do a breakup. They are going to change their structure completely in order to have less than 50 market share in mexico in order to avoid the worst of the possible regulations. Expect amx active and televisa as well. Thank you. Lets get to the mad dash on wednesday. Talking amazon. All right. I had the great privilege, celebrated my fathers 92nd birthday, today is the day, and the documentary was riveting and great thing to talk with father, something not political, and i loved it. At the end, you talked about this fight, and im still trying to understand, david, now they approach authors directly. I mean, amazon in the piece is not necessarily presented as anything other than thee most powerful force wherever it is. Publishing without a doubt. This is es calating . Seems to be. They say to authors, we give you 100 of the revenues on ebooks, 100 . Forget the publisher. Just, you know, and or pressure the publisher. There are contracts. There are contracts. Nobody should be crying. Its an enormous company. Not with the power that amazon has, though, but its on a good job here, i argue, in positioning itself as the party that is being hurt. Authors came out in favor, and James P Patterson in the piece saying, hey, books are different, amazon, books are different. Its not just about driving prices into the grown and driving the business out of business. Right. One of the great moments in what i think is the best documentary is