Transcripts For CNBC Squawk On The Street 20140807

Mixes. Costco short of expectations, and l brands highway. Bank of america nearlying a 17 billion settlement with justice. 21st century fox Beat Estimates as mur dork says he walked away, and one metric inspiring the ceo to pen a colorful post on facebook. First up, same store sales number trickling today, costco had a 5 rise, shy of expectations. Sharply above estimate of 1. 8. Bath and body works doing well, victorias secret, the most consistent retailer in america . L brands stumbled, and monthtomonth numbers are difficult. You know, Goldman Sachs said its the number one name, got to love it, greatest thic eses ese world. Thats not what you want going into a number. The bar raised needlessly. This is a company i felt was part of the limited family. Its better in another home, but its out there. People say you put costco together with whats happening, and polo, guidance aside, maybe apparel, jim, is trickling up a little bit. This is the call that i saw yesterday, deckers continues to fly, walmart up big yesterday, target stock going down. There was a move into retail. Vf corp. Is the one to watch. I think gasoline coming down is factored in as a positive for everybody from the Consumer Products remember, their big cost is getting the stuff to the store to the retailers issue a new theme developing to take the place of the industrials, which have been horrendous, although theres calls this morning. I was going to say, isi wants to buy caterpillar and others today, right . Believe it or not, a fabulous firm, but hes the ax, upgraded 2013, beginning of the year, walked away. There was a call yesterday for parker. People dont know this unless youre in Johnny Football territory, and this kpeen has had a conversation call that was rankous, and i think that marks a bottom. People who follow the stocks are frustrated with the industrials. They moved over. Everyones worried about russia, europes slow down, and then theres a call from isi, i have to go the other way, everys too negati negative. Do you lean towards industrials, cyclicals, or more defensive consumer names . These stocks are down anywhere from 8 to 15 , they are good companies. If you get any sort of settlement in russia. These are the ones that take off. Start buying and buy today. Well, speaking of settlements, bank of america nearing a settlement with justice, roughly 17 billion, carding to kate kelly. The agreement settles probes into financial crisis, Mortgage Backed securities sold by the bank. Interesting ticktocks today, jim, in the times about the journal, on raycoff, if you had to choose from raycoff and holder, give me holder. Raycoff is a rigorous thinker. Yeah, kate and i went back and forth. 9 billion cash component. The reason why people are sanguine is the Federal Reserve would not boost the dividend if they felt there was a worry to pay justice. I see the next quarters earnings wiped out if they do this. Youre starting to get towards normalized number. Can they earn 1. 50 in 2015 . 2 if you get treasury relief, meaning 3 on the 10year, and its a 2, cheapest stock, not in the bank group, but s p. However, you go through settlements, Interest Rates higher, a lot of moving parts. I have been saying adamant, bank of america, you got to get this past you because every day that you dont do to, justice comes back and comes up with a new thing. Justice has been playing such hardball here. I dont think people realize this fellow, west, has all the cards, plays it constantly. Its not necessarily holder. He has one guy, brilliant guy, but basically put a gun to every single banks head, boom, get that gun away. Everyone blinked. I say, please, take the gun away. Cheapest in the s p. Its not like you recommend a call to buy here. All these things have to happen. Im just trying to justify why the stock is up in the face of the 9 billion remember, they these banks dont tell you how much they have reserved, but the company did 7 billion last quarter, dropped down the income, and add that to a 5 billion reserve number, and my best guest, wipe out the quarter, and then youre clean in q4. Thats what they have to hope for. We joke about banks being okay, exfines, is that the case . Seeing slow improvement in financials . The banks are a function of the employment number. The number seen this morning and function of the 10year, and the 10years wrong for them. I mean, its been just a disaster for Interest Rates. They need rates to go up. Its very hard to get behind these stocks unless you have a view that the 10year goes to two and three quarters. A lot of the smart guys, delivering alpha, it has them. All the smart guys that you talk to, they are wrong on rates so far. Now, i have to say so far to leave the door open. Sure. Rates were supposed to go up. And people looked for, bank of england today, to be a precursor to what the fed may do, right . At least in if they move maybe we move sooner. Call me the red hop, but everyone says, wait a second, what is going on with russia . What are they going to put up next . I mean, it was funny because this morning they announced the beef, the australian beef fan i saw the tweet on this. 5,000 tons, the tones, that they do that, but chipolte had to source australian beef. I dont want to do the derivative trade, but the president said they are talking, behind the scenes, all in merckles court. Merckle has to solve this. Maybe it requires bargaining with the demon that is putin. Nobodimeny menwants to argue, b need it off if you want to see it come back. The headlines from draghi, difficult to define options if conflict escalates. Thats the story. Start talking about where nato is on the map and whether the need for a battle of drk youre hearing te ining terms, like woi was yesterday for these guys. There were 3 million sold yers that went and left the starting gate in june of 1941 to russia. They dont want that again. Amazing the app verse ri is this week too. Yeah, world war i is in their minds. We have treaties, we dont want to go to war. Thats right. 21st century fox bet estimates by 4 cents, 42 cents a share, and revenue beat thanks to Strong Performance from cable and film after the news they withdraw the bid for time warner, and murdoch mentioned is bluntly on the call. The refusement of the board to engage with us, to explore this compelling offer coupled with the reaction in our share price under valued our stock resulted in our cop collusion this transaction was no longer attractive to fox shareholders. As you know, yesterday, we walked away. This is our resolute decision which is why we withdraw the offer. A resolute decision. Chase cared in the words, lets be clear, we are done. I dont know why people said hes not clear and not going to go. These guys are not known for desemibling. That was a Good Conference call, not just murdoch, clear all his life. The we are thrilled at the th theater side. The small budget films like grand budapest hotel, exact opposite of star wars, but they have businesses that did well, and they were getting hurt by the bid, and what murdoch liked to do is make money for the partner, and hes doing that. Its a Good Conference call, well done. Cable Network Domestic ad revenue, up 12, they had xmen, rio ii, fault in our stars. Just fabulous. People misunderstand they make money on tv. They make a lot of money on cable. The viacom number, cable is not good, but it is if you execute. Clearly, they are doing. Really do. And by the way, just a code to that, chase, no plans to pursue any other content company. Like if they do anything, its a broadcast like an affiliate. I mean, again, this is a tour of force. I love Good Conference calls orchestrated well. You get a Live Conference call, most are can, like done a month ago, but this was a live presentation like the original american idol. Just on squawk a moment ago, we hit a pocket in terms of deals, right . A pocket that refreshes, in his words. Do you think thats the case . Doesnt feel refreshing if youre in it. Im still thinking speaking for the ritz. That sprint call, hey, see you later, gang, nice to meet you, and the walgreens, upgrade today, but that was the twin shot, no inversion and guidance too high. Wow. Time warner, remember, 48 hours ago, there was not a person who didnt think they were going to go to 88 to 90 and then not going at all. Bewkes feelings raw there. Buy hand over fist there. They balanced the decision to do it with the subsequent backlash, right . Consumer backlash, and then, of course, the idea their government business, a huge percentage of revenues could be at risk. Big. Aside from litigation that goes on, in his words, in three to ten years. The president last night came on, interrupted mad money, taking it too internally, but he stressed, look, the inversion, like, if you do it, you do badly. I have this vision of picketing at walgreens. You want to buy cvs. Wheres the president in the cross hairs . Trying to be a domestic 29 billion in boots, buying alliance boots, 29 billion in revenues, thats not a mail drop. You can justify it. People said its going to happen, but, boom, walgreen higher. When we come back, the Gm Compensation Fund open for business. Ken feinberg joins us live later on. Why time warners ceo, bewkes, could eat his words with netflix. Futures this morning, steady action, and draghi is on the tape. More squawk on the street live from the post nine at the nyse in a minute. Just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. So you can invest in the life that you want today. Tap into the full power of your fidelity greenline. Call or come in today for a free oneonone review. Bewkes. Netflix posting on facebook yesterday, quote, last quarter we passed hbo in revenue, we are making progress. Hbo rock, and we are honored to be in the same league. This is turning out to be boeing, air bus, pepsi, coke. I like that analogy. Reid hastings, when i was a homicide reporter, this guy is good copy. He cannot resist and posts this stuff, but basically, one of the things that came from the disney Conference Call that was interesting is how much iger likes netflix and stands for people saying, listen, i know you think we pay them, and, you know, they should be paying us, whatever, but i think that netflix, when they get many more streaming new stuff, its it could be powerful, carl. I dont know if you go on netflix, but orange is the new black, and others coming back, and what i look at this, and i say, if i could get current movies, more current movies, youd stop going out, man. Yeah. In addition to this, bewkes, an interview given in 2010 asked about the influence of netflix and his words, graphics here. Like the army taking over the world. I dont think so. I think he might want to retract some of that. How many divisions does bewkes have . I think thats way overstated. Obviously, hastings, netflix had a vision. Bewkes is a funny guy. If he picked ukraine, hes up and center. Yes. Netflix, when you think about what is going on in technology, think netflix. Theres these issues about carriage, but whats happening is your handheld. I watch things on my ipad. You watch things you didnt think about. One of the things i like about the espn disney quarter is watching world cup on your hand held. Netflix is a technology play. The stock, by the way, not talked about enough. Its on fire. Netflix and tesla when you drive with google driving you to watch netflix in your tesla, the world will change. It will be your oyster. The time warner quarter was the amount of money that hbo made selling some of their older series to amazon in this case. Its like the friend of your friend is your enemy or the enemy of your friend is your friend. Content Companies Taking over, the 21st century, im dated, and people just monetizing. What does wes talk about . How much i love lucy makes. Different world. Great world. Very exciting. Next, mad dash, count down to the opening bell, and futures looking good. Did you know the last of the last five times the s p posted a gain, four of them have been for less than one point. As we see the volume accelerate on down days too. We look to avoid that at the open. More from squawk on the street from the nyse straight ahead. D . I took the trash out. I know. And thank you so much for that. I think we should get a Medicare Supplement insurance plan. Right now . [ male announcer ] whether youre new to medicare or not, you may know it only covers about 80 of your part b medical expenses. Its up to you to pay the difference. So think about an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, they help cover some of what medicare doesnt pay and could really save you in outofpocket medical costs. Call now. With a Medicare Supplement plan, youll be able to stay with your doctor. Oh, you know, i love that guy. Mmhmm. [ male announcer ] these types of plans let you visit any doctor or hospital that accepts medicare patients. And there are no networks. You do your pushups today . Prepare to be amazed. [ male announcer ] dont wait. Call today to request your free decision guide and find the aarp Medicare Supplement plan to go the distance with you. Go long. The cadillac summer collection is here. 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. All right, nine minutes before the bell, time for cramers mad dash ahead of the market open. Interesting reports today, jim. Stratus is my favorite commercial 3d company. They do consumer 3d. I said over and over again, i love the 3d space, not the 3d systems. They have good growth, blew out the numbers, and i believe that if you believe 3d systems is real, as i do, meaning the notion, yes. The three dimensional manufacturing is real, its stratus, not ddd. I think this one is going much higher. Pointing out, recently got distribution in home depot, not a whole lot of stores, but a new opportunity for some guys. This is the most go on youtube, and you see what im talking about. Thats how you follow these thing, and i know manufacturers who use the system. Im trying to get my executive producer to do the show from maker bot. Should have told them first. Im brooklyns own. Why waive . Now, this is a Denver Broncos story. Sorry, a denver story, big game, and white wave is plant based foods, okay . Its earthbound. Everyone like, if you go to your fridge right now, theres earthbound farms, all natural, ogranic. This is the natural play. Price orders involving whole foods, sprouts market, bobby chef, trader joes, think white wave. This is the way that our kids drink milk. Its the way we make salads. This is the old spinoff of dean foods. Earre ri its rem necessaryi. Hanes, is good, not buying it, but greg just delivered, delivered, delivered. There was a short story coming out that perhaps this quarter is going to be weak. I hold that rumblings. This is anything but weak, and quoting the release, experiencing strong growth in the business in the Second Quarter. Every platform good. Those who like soy milk, used to serve it at the inn, and now im serving corona at another joint, but soy and almond are what people drink, and this is white wave, and it is terrific. Horizon too. You mentioned the russian sapgss, retaliation for sanctions. Other plays like that, leg legitimate plays . Its hard because the russians do not import as much. Cant tell you to short brie, but i know an e. U. Story. Yes, its an e. U. Story. It keeps the issue front and center. As long as they talk about keeping australian beef out, theres still a discussion going on. Remember, i believe that merckle is the key, not president obama. Right. 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Youre watching cnbcs squawk on the street live from the Financial Capital of the world, opening bell in two and a half minutes. A lot going on whether its geopolitics, Central Banks, bank of england steady this morning, and, you know, every morning, jim puts out a note of all the calls, all the earn, and looking through it today, jim, blow out quarter, monster quarter. As earnings season draws to a close, s p does 10. 1, even with the buybacks, thats good. You see a short story because they buy quest, and they have a pain and suffering franchise. The blowout is amazing. Priceline, i expect them to beat the quarter. Sea trip, it was amazing. The outliar Something Like a walgreens, and people come back saying buy. Theres many stories overlooked because of russia. I think people dont understand how important russia is in the mind the industrial pull out of isi, what are people afraid of . Afraid of russia. They default to stories like kellogg, yesterday. They are not doing that well, but they wont stop them. They keep buying. Right. We talked, of course, all week long about the withdrawal bids of m a, and 19 of m a withdrawn this year, third highest since 1995. In those days, that would have crushed the market. Now the macro guys run the world and the other guys are not a factor. Sprint was, i think, mostly held in retail people, frankly, and time warner, you had a good chance to make money there. You didnt have to ride it out. Yeah, yeah, very true. A big week for the food business, mcdonalds with the guarantee of food in a minute. Wendys out, penny shy. Jack beats by eight cents at 65, and they raise, by the way. People dont mind wendys, they were down. Jack in the box is such an amazing story because first of all, the actual jax in the box business is good, but second, qdoba is coming on. At last, i love that veggie burrito. That is jam packed with veggies. Qdoba up 75. Best casual . Yes. I have fiesta group on tonight, and l ork co, a wild stock here. This group is hot, hot, hot. Theres the opening bell and the s p at the top of the screen. More green than yesterday. Wow, calineente. Protecting the rights of youth in new york city, and a mobile Game Publishing platform in china celebrating its ipo. Watching that. Good open. Yeah, you know what . Yesterday was a remarkable day, carl, because people felt conditions up at 4 00 a. M. And down eight by the opening. Wow, the ka tas tro fee thats sprint, time warner, did not hurt the market, which is extraordinary. Yeah. Thats because people are starting to take their lorer gasoline will lead to interesting numbers. Mentioned that a number of times now, yeah. People dont understand gasoline is a giant tax on the economy. We dont have a president who talks about we need cheap energy because the president , thats not his thing, but the American People need cheap energy, and they are gating it. Fedex could use cheaper guess, up one cents today. Nice upgrade. Taking share, improve the mix, raise prices, buy back more as ups has its own demons to fight. Look, travel trust guard, a position, they hate it all the sudden. This is a great company, and when its hated, you go in. People Like Companies that fire people. Ups has to hire people because they dont want a bad holiday subpoena. Thats unfortunate. Im not heartless there, but saying the trick to making numbers is to fire people. The revenues going up, and Companies Want to take advantage of it and hire people, and people are, you know, investors say, no, no, new york city please dont do that, do it with machines issue but i think fedexs company, ups underrated here. Interesting. Transocean. You like the story here this morning . The big short story on transocean, and if you are shorting it, you have to pie the big dividend. Theres so many drill ships coming online, you cant own them for near term earnings. If mexico drills, most importantly, they show up because of brazil, then they put it on hold. You see the brazil government change in the fall and see drilling, you wish you bought this stock and own it to 48. They have old drill ships, though, a concern for me. Wind stream holdings, of course, we talked about them awhile ago, fiscal revenue down 2. 5, up one. Its not key. No, its reality investment. Yesterday, fron teen communications got ahead. The companies are not doing well, but they are creative. Creativity, financial engineering, a big theme here. Yes. And that Real Estate Investment trusts, drove up to 52 at one moment, the High Water Mark of things you can do with your financials. Yeah. In order to make up for it, not to mask, but make up for earnings short falls. Some of these big heavy metal players, caterpillar, rand getting love on isi. People at home have to know theres guys known as the ax, and when they get positive in the face of the big declines, 8 declines, the shorts, shorting the stocks aggressively haved too covering. Did okay, pat not a great quarter, parker, i mentioned, the Conference Call, the stock didnt go up. Its been a hated group. If it goes up, thats important for the market. Raising an outlook, of course, everybodys waiting for the cold beverage platform with coke. This was a this was keurig 2. 0. Dont short this. I know its a couple points downside. Myland getting weakness on the numbers . Thats surprising because the Generic Companies have all done pretty well. One down because of inversion fears. I have to do more work. Its been a jaugernaut. This is based on the numbers in the quarter. Right. The m a. The call was great. I think theres always this residual fear, like, will they come to terms in that call . If nominated, i will not run. Basically said, listen, stick it fork in the talk. Were just going to stand there, buy back stock. They talked about how much is bought back. Whats important are the numbers. The numbers are good. Looking at that one as well, and, of course, costco. People consider it a miss even though 5 comp versus 5. 3 estimate. International up as well. Believe me, if not hiked up in the number, that number is good compared to everybody else. Blow out retail is cst brands, a spinoff, and cst is a company thats a Convenience Store play and did acquisition. When i see that going up, i want to get more monster beverage, the thing thats sold most in Convenience Stores. Right. All that said, given empg talked about, until you see Real Progress in the standoff with putin, your app fit foor stocks change, right . We cant. Were in a 1990 mode, iraq, kuwait where, you know, every day, hold it, maybe theres give in it, and then you hear theres not. Were in rumorville, and there people buy them when they sense theres about to be a deal, sell when they realize theres no deal, and today is a deal, hey, maybe theres a deal, and they can take the gape away quickly. Right. One time call not gotten to on the record, united health, aetna a loser today. People didnt like the quarters. Look, i pick the other side of that. If theres job growth like this morning, best unemployment claims since 2006, dont bet against the guys. Theres chart work on hmos, and people say they are huge shorts. I think they are pausing. Thats all. A great group. They are pausing. Especially given uncertainties regarding the future of the aca. Nobody knows how it goes. All the money went to the hospital. Hospitals the big winners of aca, and, you know, the moneys flowing through to them. Right. People keep buying aca. Got to get in yesterday. Dow up 352 52 here, well see 23 it holds. Bob is on the floor. Good morning, exploration and production stocks, real weakness in ep recently, showing strength today. Look at the s p, the jobless numbers, headed in the right direction, 289,000, fourweek moving average, lowest level since 2006, moving in the right direction, the key point here. Germany dipped a bit, the Draghi Press Conference kept rates unchanged, and interesting he talked about the foogt there was not enough structural reforms, the loans are not up because its discouraging investments. The lack of restructure reform in the european economy, draghi talked about that, a good point on his part. Same store sales in july, good, boy, i dont know what happened, but a stand out raising earnings guidance, the high end of the range, and look at these same store sales numbers. I had to check it twice, up 6 , victorias secret up 5 , bath and body works up 5 , outstanding numbers above expectations, and margins improve. Whats the last time margins improved in retail in encouraging. The rest as expected. Costco, buckle better, zuimiez better, and Comp Store Sales down 2. 3 , and sales decent in june, but tailed off. Ann is down 7 . Tell you the positive news here. Negative preannouncements in retail dropped off this quarter. It was a disaster last quarter. In fact, most of the s p 500 really dropped off in retail, a good sign. The problem is the expectations are not higher. Look at target moving numbers down. Next week, all the Department Stores like macys, kohls next week. Higher costs in the restaurants. Brinkers had great numbers, chiles here, and look, up 6 , excellent numbers. Sales up. That was really impressive, but they, just like papa johns pizza, went out of the way to talk about cost herding margins. Papa oo johns said costs up, citing higherly boar, food costs, higher cheese costs, higher limes and avocados and seafood costs going up. Remarkably, the gieps is in line. Thats why they are up there, but Pay Attention to the costs here. Same store sales up 2 . That was good. Wendys said the same thing talking about higher beef costs, obviously, an important part of their business. Second quarter earnings, about doubled here, up fractionally. Continuing to gain. They are selling off the store, the companyowned restaurants, guys, because when sold to the franchisees, you get a more stable cash flow from that, helping them out, one of the things theyve been doing, as you see, not a help to the stock price hot downside here, 50 points on the Dow Jones Industrial average. Back to you. Thank you, bob. To the bond pits, Rick Santelli is in the bond pits in chicago. Good morning, carl. Everyone trying to tune in, listen, or reading now about the Draghi Press Conference. What came out on the Trading Floor is geopolitics, again, the human element, issues are intense, i understand. From a market perspective, traders said, listen, the recession in italy, two negative quarters, this was not impacted by current issues, but central bankers see a reason to link with all of these issues as they try to tackle stagnation in europe. Tenyear, unchanged, but the twoday chart, inside day. Held yesterdays yields, and may 27th says it all. Fairly certain we test below the yield, but it is not happening. Be careful, on a closing basis on a true evaluation. Boon yields, two day, what a different chart than treasuries, flat line, drift lower, reaching the 108 low at 109. Look at gilt, same thing, but its closer to the tenyear 251, but flat as well. Open the chart up to oneyear, almost exactly a year violating the 2. 5 on the tenyear guild. The dollar is getting ever closer to 133. You see the pattern there. What all the volatility with the press conference, the euro is where it was before the press conference started. One year year row shows against the dollar in terms of weakness to september, and last chart a one year of the pound versus dollar. Envision a line connecting that upward slope, and you see we are now drifting right through it as the pound versus the dollar continues to weaken. Carl, back to you. We got to get you a tell straiter. Talk to you later on. Zulily trading sharply lower despite nearly double sales in the quarter, and the Company Planning to expand operations to keep up with growth. Why is the stock down . The ceo is with us for a first on cnbc interview when squawk on the street continues. If energy could come from anything . Or if power could go anywhere . Or if light could seek out the dark . What would happen if that happens . Anything. The last four hours have seen. One child fail to get to the air sickness bag in time. Another left his shoes on the plane. His shoes and a third simply doesnt want to be here. Until now. Until right booking now. Planet earths number one accomodation site booking. Com booking. Yeah dad hes our broker. He helps looks after all our money. 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 tmobiles ceo ledger taking to twitter yesterday to dig at rival sprint after sprint dropped the bid for tmobile. Here a are kacouple tweets. Is it a melting ice cube . Looks like it to me. Join the cool brand now. Jump off the sprint bus before it crashes. Jim . A trash talker. Im a backer of john, and i think that, john, listen to me right now, because i know you watch the show. You got to get deutsche to stop saying behind the scenes, we dont know what to do with this company. Youre on fire. They are dissing you, okay . They are dissing you, john, not taking you seriously. Time to tell the german guy, look, were doing better than you are. Shut up and learn from us. Thats my advice. I know you watch the show. I told him to do a series of things like spencer rascoff. Yes. Spencer, where is he today . Took a day off . In the tent, im not sure, but, no, the tweets befitting of the ceo or does it matter here . Great question. What is a ceo . Hes a millennial guy, i have a guy talking on generation d that trashes. Hes a generation d guy. He is in your face. Now, dan, a generation a guy, but heres what i want to tell you, in a claymatch, he will crush him, hes 67, and, john, two things, dont get that close to overland park, kansas because dan puts you down like a dog, and stop letting the germans run over you. Youre doing a good job. Speak up. Theyll throw you under a bus in a second. Hard to punch when pockets are full of cash now, 40 million. People love dan, a guy who deserved better, i think, but easy come, easy go in the business world. Hell be pick up. Kansas city. When we come back, stock trading with jim, markets here hanging on to a 40point gain. Squawk on the street back in a moment. The equity summary score consolidates the ratings of up to 10 independent Research Providers into a single score thats weighted based on how accurate theyve been in the past. Im Howard Spielberg of Fidelity Investments. The equity summary score is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Thats why i always choose the fastest intern. R slow. The fastest printer. The fastest lunch. Turkey club. The fastest pencil sharpener. The fastest elevator. The fastest speed dial. The Fastest Office plant. So why wouldnt i choose the fastest wifi . I would. Switch to comcast Business Internet and get the fastest wifi included. Comcast business. Built for business. Time now for cramer in stop trading. Boy, people are abandoning this harmin, Communication System in your car. I think they ought to wait to hear what the great ceo says before you short this or blow out of it. Harmin, a big winner, but conservative in the guidance, not the revenues. Await the Conference Call before you destroy it. Their factories are in the big japanese and german manufacturers. Dont go against those guys. Interesting. Highly levered to the auto cycle thats done well. People just want to jump on the aerospace and auto cycle. Its not over. Its not over. I think thats one that i want to hear before i shoot, and i know people want to do that. Zulily is another one where you have to be perfect. See, you have, like, rocket fuel yesterday, if youre a high multiple stock, you must deliver. You have to do is quarter that was like what steven did with concur or else youll be like cornerstone which did not do high end. If you play with fire on high multiple, zulily is a very good company, but spending, remember what i said about spending, youre not supposed to do it. We have the ceo at 10 00. Questions for him . Hes good, man. Yeah . How do you stack up against amazon . Flash sales, peaked . That movement peaked . I dont think it has. I know people half the day on zulily when not playing grand theft auto or something. Coverage on the Delivery Business in general and macys yesterday, a call from morgan stanley, you need multiple channel or youre toast. Its everything these days, and thats why williamssonoma is good. They get it. Love them. The cover. New york post includes these suggestive photos of the owner jerry jones, boys will be boys, first preseason games tonight. Yeah. Kind of yeah. Met troy aikman with you. Get us off that one a little. Yes, and russ wilson. Said i would like him, and then i did, and i mentioned that to rose, the general manager of the eagles, and said, give me a break. Romo was a gentleman. Yeah. Sorry, romo. By the way, Richard Sherman in action tonight. Yes. Against the broncos. Bringing back bad memories. Thats right, romo thats good. I dont know what to do. Birds go to the bears friday. I think the bears are potential super bowl team. Really . I do. Favorite receiver in the nfl, and number ten now, i mean, sorry, i know your mother follows me, and i dont mean anything wrong to his mother, she follows me on twitter. Whats on mad tonight . One of the most we talked a lot about the excitement for qdoba. Fiesa group and taco cabana not doing as well, and a company, what happens is one of the Software Companies that makes it when you call, something nasty to say, route you to the right guy, but the companies tell you more about whats going to happen at salesforce. Com than what you hear from sales force. Good luck to everyone in hawaii. I know mark is in hawaii. I just want everyone to be safe in hawaii. Yeah. Hurricane iselle, first hurricane to hit in 22 years. I wish everyone well there. Absolutely. You mentioned loco, which is used now as the poster child, boast performer of the year. The comp store numbers are really good, make a lot of money per store. People presume it is the next chipolte. Theres not a next one. If it went to 50, you pay the multiple of econochipolte. I like the company, theres a lot of speck money in it. Listen to fiesta group. When i stack the calls, the only real winner might be pol polo hermanas. Only that is better numbers. Reference to breaking bad, like when the said the devil mcgregor was a short, and people said hes trying to get you out . I have to be careful, right . People need disclay moris. There is no devil mcgregor, and hermanas is a Fictional Company from breaking bad. Great picture. See you tonight, jim, mad money, and whats coming up at 10 00 . Good morning to you. A lot of ceos in the next hour, zulilys ceo here, that stock taking a scrubbing today, and ken feinberg here, and well talk to the ceo of coupons. Com to see if they can succeed where so many others faced great difficulties. Hour two of squawk on the street. At humana, we believe the gap will close when healthcare gets simpler. When frustration and paperwork decrease. When grandparents get to live at home instead of in a home. So lets do it. Lets simplify healthcare. Lets close the gap between people and care. Welcome back to squawk on the street, road map begins with a retail story, same store sales out, mixed picture so far. Well speak to the zulilys ceo on the outlook and funk. Pur dock defending his strategy. Better than estimated, the stock in the green this morning. And the biggest settlement in history . We keep waiting for bank of americas fine to come and the number keeps getting larger. Ken feinberg with us as well, exclusive with the administrator of the Gm Compensation Fund. First up, same store sales number, costco brands out, and we are back at hq with the wrap up. Good morning, carl. A mixed picture for retailer slogging through the summer months, costco has a comparable increase of 5 , short of expectations. Currency hit by a quarter of a percent, but july transactions up year over year and traffic up 4 . Reporting gasoline sales up mid single digits, 1 decrease in the average price per gallon. Food inflation in the low single digital range in july. Strong month, sales up a year, 6 , better than expected the streets increase of 1 . The specialty retailer saw growth across the brands from victorias secret to bath and body works. Brands guiding at the high end of the Second Quarter range including a severance charge not previously included in the guidance range. Saying the clean inventory is impressive begin the promotional environment. They warn that same promotional retail environment did not help its sales. That specialty retailer had a positive june performance but rest of the quarter, quote, proved more challenging with soft traffic in the industry and highly promotional retail environment. Ann inc lowered Second Quarter guidance for same store sales and revenue warning of pressured gross margins. Back to you. Thank you. Well stick with retail now because shares of online retailers trade lower. As you see, despite reporting a Second Quarter earnings beat. Here on cnbc is the ceo of zulily. No retail funk for you. 97 growth in sales. How did you manage that . Good morning, thanks for having me on, an incredible quarter for us. Strong revenue growth, strong new customer growth, and we just continue to see very strong passion from a set of customers that are really loving what we deliver every day. Well, i mentioned the shares under some pressure. I guess the concern here is that youre spending a lot to grow your business. Talk about your plans, and i know youre ramping up marketing spend and distribution spend. I think as we look at the opportunity in front of us, we have a longterm view here. You know, with q2 growing 97 , you know, i think were just finding more and more places to deploy marketing dollars paying back rapidly, and i think as we see that, we feel theres opportunity to invest into the business, and you mentioned fulfillment. Weve announced earlier in the year we were building a new Distribution Center in reno, nevada. Yesterday, we announced heading into next year, likely building another Distribution Center, and, you know, its a key part of the strategy making sure we have capacity in place and putting the infrastructure in to look at building this into a much, much larger business over time. Whats interesting about your business is that it targets moms, the mommy business, bying for their children, husbands, or themselves. Do you have plans to go beyond that . As we started the business four and a half years ago, we focused on that mom audience, and i think over the last four years, its become so much more. We get an incredibly Large Business in womens, a great, great business in home categories, and, you know, as we continue to expand the offering, the past quarter, we rolled out some mens products, and so were seeing a very, very diverse set of product we can launch, and a customer that is really responding to that, really leading us into new categories, and putting them up for threeday sales, just a strong passion for a very, very diverse set of product, and i think that opens our Market Opportunity much, much wider over time. Average time that it took an order to be shipped in the quarter, 12. 6 days. Yes. Hoump can you widdle that down . Over the last quarter, we brought that down, but i think as we look forward, we can move to, you know, roughly a sevenday shipping window. Were never going to be outchasing that same day delivery. Our business is about freshness and discovery. Were launching a hundred new events a day on the site, almost 9,000 styles of product, and that product is there for a short window of time, and its really all about that freshest and newness at incredible vam. Typical discounts is 50 off retail, and those items lead with a great offering, our customers are willing to wait to get access to the product. Well drive it down. Its a big, big focus for us, but it is not the number one thing we hear from customers. Darrell, i have to ask you about online security. You worked at blue nile, microsoft, you obviously know the business extremely well. It was apparent from the New York Times over the last couple days, Russian Hackers stole 1. 2 billion usernames and may have hacked into over 420,000 websites. Are you aware of a hack on your operation . What do you say broadly about how the industry responds to this . So we focus on security, a team is in place thats strong, and as you say, you know, been in the industry a very long time, and so we are not aware of anything in our business, but focused on making sure we got best in industry security. I think across retail, youve seen it with a lot of businesses, that, you know, everybody is very, very focused on this in making sure that theres a secure, kind of great experience for consumers out there. Darrell wrapt, they are failing. If they take this volume of data, the efforts of the industry generally is failing. Many believe the war is being lost. Im asking, how do we step up the game . Not you, particularly, its not your problem, but how does the industry respond . Yep. I think its working with the Technology Partners out there and really trying to get more information about where, you know, i think the headlines are certainly big headlines, and theres not a tremendous amount of detail out there where this source of sales have been taken from, and so i think across the industry, we just got to be diligent, work with our payment partners, visa, mastercard, american express, and make sure the Consumer Information is protected. Before we let you go, on retail demand, back to school, very important for you with your mother customers. Any early read on what that looks like this year in terms of demand . I think back to school is a big time for us. We see as moms are starting to look at apparel for the kids, they are excited. S team is launching a lot of back to School Events every day, and i think our guidance is out there for the year, you know, looking to grow the business from 697 million last year for the year this year, 1. 2 billion to 1. 25 billion, and so we think theres a lot of growth in the back half of the year for us. Thank you for joining us to talk retail environment and your business. The ceo of zulily. 21st century fox have earnings last night as murdoch says the company is dropping its potential bid for time warner. Joining us live from l. A. , with the detail on what the man himself said. Julia, good morning. Good morning. The shares soar this morning on better than expected top and bottom line results. Growth driven by the Entertainment Division with xmen days of future past while the cable segment benefitted from growth in affiliate fees and cable ads. The focus was the comments on why fox dropped the bid for time warner. Time warners management and board to engage with us to explore this compelling offer coupled with the reaction in our share price that undervalued our stock, resulting in a conclusion that this transaction was no longer attractive to fox shareholders. As you know, yesterday, we walked away. This is our resolute decision, which is why we formally withdrew our acquisition offer. Fox president and coo chase carey said we are done, one of opportunity, not necessity, and they have no plans to pursue another company. Why chase time warner . They say scale matters and saw synergies between the two companies, particularly overseas, but tried to convince ammists yesterday that fox has enough scale. Carl, over to you. Interesting story. Thank you so much. Lets get over to dom chu. Good morning. Good morning, carl. Shares of orbitz, stock is lower after the Online Travel operator forecasted profits on the weaker side of things after Second Quarter earnings, but Current Quarter revenue trending on estimates on improving economy spurring hotel bookings, stock up 5 in the premarket now down. 5 on the trade, and, guy, i see you guys got the ceo later on in the show, so maybe hell talk some of the details as well. Carl. Back to you. If simon has anything to say. I spent happen hour and a half into the story, its a tough one. Good tease. Handling the compensation fund, exclusive update on claims paid so far, and details on b of as fine, regulators playing hardball. I dont think people realize this fellow, wes, has all the cards, plays it constantly, not necessarily holder. He has a one guy, bring lament guy, but put a gun to everyones head. Everyone blinked. You put a gun to my head, i say, take the gun away. More on the most feared man on wall street in just a minute. Bulldog if youre like me, youve been working like a dog all year. But you dont need to camp out til labor day to reward yourself. Mattress discounters labor day sale is on now rest those tired bones on a queen size serta mattress and box spring set. Right now, theyre just 397. Get 48 months interestfree financing on the entire tempurpedic cloud collection. Not to labor the point, but this sale wont last long. Mattress discounters hawaiis bracing for two rare hurricanes, first expected to land tonight. Weather channels jim cantore is live from hawaii this morning. Hey, jim. Reporter hey, 8 00 hawaii time expected to come in, so thatll be six hours later, 2 00 a. M. Eastern time, if that helps. We had effects come in in terms of rainfall. Its not windy at this point, but will pick up. When the rain is not coming down, i listen a half mile away or so and i hear the waves already crashing. Those waves high as 25 feet barrelling towards the shores here. Very, very dangerous surf coming in. Good news is, people are prepared, governor got the proclamation yesterday, great news, obviously, ready to handle what comes at them, but i think theres a lot of power outages, first time ever, if it stays a hurricane, that we have a landfall on the big island. Thats never happened before to the best of our knowledge, and this thing took the perfect track to keep it a hurricane, even though its weakened a bit this morning, down to 85 Miles Per Hour, but needs to be below 74 Miles Per Hour to be a Tropical Storm. Watching that, thats all the meteorology there. Obviously, the key is the impacts. Whats going to happen . Well see potential flooding rains on the big island, and all of them, for that matter. Remember, mountains come up from the sea, and in some cases, here, on the big island, high as 14,000 feet squeezing out more moisture. Higher you get, people live up 2,000, 3,000 feet, theres stronger winds, could be 80 Miles Per Hour here at sea level, and up there, 105 Miles Per Hour at 2,000 feet. Big difference. Power outages and extensive tree damage. Some of the roads are caked with trees. People have been taking food and water off the shelves the last couple days now, taking the storm very, very serious, under a hurricane warning here in the big island, and maui in a Tropical Storm warning, and we have a Tropical Storm watch, and the storm weakens tomorrow, but, but, that does not mean theres not impacts in terms of surf, in terms of heavy rain in the mountains, and then well deal with julio over the weekend. Right now, further north, but those who didnt get easterly winds get northwesterly winds from a different direction and could be a moist system as well. Even, you know, its hard to get people to understand that, but dont Pay Attention to the track because we will still see impacts even from julio sunday. Island bracing for two storms, rare in the fact we have a land falling hurricane and rare in the fact that we have two in a row coming at us from such a short time span. Back to you. Yeah, just more freakish weather. Sur the surfers are going nuts. Thank you so much, jim cantore from the Weather Channel in hawaii. Nearlying a settlement of 17 billion with probes of mortgage back securitied sold by the bank. We have one who covers bank of america, and the fines are bigger and bigger. Put this in context how painful it will be for bank of america. I feel weird saying ining multibillion Dollar Settlement is good for a stock, but this is priced in, and getting it out of the way is good news for the stock. If 17 billion, biggest settlement seen for any of the banks, would be a big settlement. Biggest in american history. Yeah, not that bank of america and jpmorgan have not had big settlements, but this would be bigger. What we dont know is how well reserved they are for the settlement, but back of the enveloping it, were guessing if its 17 billion settlement, thats probably another 3 billion of reserve builds, somewhere in the neighborhood of 25 cents a share, a quarters worth of earnings, painful, but not the end of the world. Just the latest in the string of litigation expenses and fines that bank of america has to face, much higher than all its peers. Does that make them in a less Competitive Position in terms of the major banks . At this point, probably not. Even with the litigation charges they are taking, they are still building capital, right . Getting the expense saves we hope they get. They are really delivering on them, integrating acquisitions. I think fundamentally, things are going well at bank of america. I look at the area with concern is spread income, just is not coming around quickly as id like to see it, but fundamentally, bank of americas strongest been since the crisis and able or willing to compete as its been as well. How legitimate are concerns on capital if the fed says they can pay the dividend . You know, to me, its a matter of timing. You know, when, not if. I dont think the capital return storys changed there. Its a big capital return story. As i said, even with the litigation charges, they are billing capital. The dividend coming back is a nice sign. I was hoping they would get a buy back too, but looking at next years seat car, i dont think its unreasonable to start thinking 5 billion, 6 billion buy back and bumping up the dividend again. They are generating the lot of capital right now. Jeff, two questions, where does the 17 billion go . Just general federal expenses or second thing is part of this is compensation. That compensation is tax deductible for bank of america, and on this size, thats material too. Yeah, you know, where the money goes, its almost varied in settlement by settlement. Weve been looking at maybe twothirds cash, onethird soft dollar consumer relief with previous settlements here. Assume its Something Like that, theres still, you know, over 10 billion worth of cash. Big chunk goes to the department of justice, some goes to different states and ad offices. I mean, that will be spread around, and the tax deduct blt makes a difference cutting the loss by a thinker. The chunk is penalties, not tax deductible. As i sit her today with the 25 cents number, i assume additional reserves are not tax deductible, but punishments as disgorgements of profits. Quickly, make Earnings Releases easier to decipher . We get them as so complex out of the big banks. Is that behind us now . Be able to glean the real story with banking in Corporate America and loans . Itll help. I mean, the litigation expenses is kind of a big complicating factor, especially as it falls through the segments, but theres still confusing factors for b of a, right . Theres a portfolio from country wide, trying to run off and sell, distorting views there, but every settlement behind us, you get closer to making the calls and releases more manageab manageable. They are easier to get through now, i think, than a year ago, and a year from now, never simple, but easier to get through, certainly. Was said the last big issue relating to the crisis. Valuable perspective on b of a. Thank you. Tony west, the regulator most feared on wall street, jim cramer spoke on that, and we are back at hq with more on mr. West. Kate . Word this morning of yet this other recordbreaking bank penalty in this case. The 17 billion for b of a that you talked about, focusing on a Justice Department official, now the bane of wall street, tony west, a long time department, west, the number three ranking official working with eric holder closely. His oversight is federal and Law Enforcement issues, public safety, and civil litigation, the unit that defended obamacare and leading government actions on bp from the horizon spill in 2010 and mortgage issues. Recently, however, the bank rival specifically in resolving outstanding mortgage back security claims, a key argument tech in the settlement in november, record at the time, and the mid july settlement of 7 billion after threats of litigation interrupted by app arrest in libya and paved the way for a deal, and now the pending b of adeal, formlated of a potential lawsuit, warning issued to the ceo by eric holder himself. West is clearly achieving results on the mortgage settlement front, perhaps disabusing people banks were not accountable for 2008. As a result, fans in the industry call the tactics arbitrary are few. Jpmorgan felt they should not be punished for subsidiaries they bought, theres grumbling why bank of america is absorbing the wrong doing, country wide merrill lynch, and they acquired those just before the crisis. Well see how it plays on wall street. Kate kelly with the latest. End of the passwords on the heels of a massive data breach. Is memorizing a code on the way out . Well take up that next. But what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. Yyyup. With xfinity internet soyour family can use all their devices at once. Works anywhere in the house. Even in the garage. Max whats going on . Were doing a tech startup. Were streamlining an algorithm. Were going public [cheering] the fastest inhome wifi for your entire family. The x1 entertainment operating system. Only from xfinity. Over to dom for a check on oil this morning. Oil very much in focus here. Trying to rebound off multimonth lows as Global Supply exceeds demand. This is more than offsetting unrest in the north africa region, middle east, and, of course, accelerating tensions in russia and u. S. And ukraine situation hitting traders, sixmonth lows hit yesterday, trying to find the bottom here, flat for the session, and brept crude prices hit nine month lows as well, up fourtenths of 1 . Airlines as a sector benefit from the low prices. Big ones, delta, american, united, continental in the read, and they are benefits overall. Well see if the trade continues especially with oil hovering near, simon, multimonth lows. Over to you. Thank you very much. Passwords passe with another data breach . This time by russian criminals, the tech world intensifying the search for a way to do away with the password all together. We are in d. C. Looking at what the world could look like in the future. Good morning. Reporter good morning. Thats right. Talking to the guys down to the black hat and cyber con conference in vegas this week, and theres a Big Conversation at whether or not we outlived the era of the password, asking consumers to do a lot of menization, multiple passwords, complicated numbers, symbols, letters, caps, lower case, too much for the consumer at this point, so conversation now around what happens after the password. Take a look here at the options including websites that send you an email, go to the bank website, for example, and rather than typing in a password, it emails you to verify its you, and wireless wearables, brace t bracelets that verify its you when you log into the device, and by yo met tricks with thumb prints and facial recognition in the process now, and behavioral analytics, software logging the types of data used that you use using behavioral analytics to tell whether its you. Bio metrics are validated every time you try to log on. They are a stronger opportunity for us to secure information that we rely on every day. And the idea they are not stored, simon, is important because of the question of creating a honey pot. If you create a data base with personal information about a lot of people, thats very attractive for cyber hackers to go and try to get the information so the new security guys try to figure out a way not to create that. Interestingly, we see this out in the marketplace, android has an app to verify requester identity without a password if you have a blue tooth device and wifi. They assume its use using the particular app, and you go around passwords all together, dont type in numbers and letters so hard for many much us to remember. I struggle with it every single day, simon, and i think others do too. The weak link is the retailers, the link in the chain, we are strong as the weakest link in the chain, retailers not switched in what they have to do. My question is, if in the future, what will happen is people will pay in order to get better security. In other words, its a commercial opportunity for me to subscribe to a service that is going to continuely check on my identity, where its used, and correct the failings of other people. That, i guess, is where we are going, no . Thats an option. The problem here is that we have too many passwords, effort is to get retailers not to use passwords at all, and the concept is a password is something that you know, and that can be easy stolen. What they are trying to switch to is something that you have, a good Old Fashioned key in the door at home is something that you have, carry around with you, a security device. Cant easily be stolen unless you hit me on the head and take my keys. These digital passwords can be gobbled up in the hundreds of millions, even billions. Thank you. Ken feinberg in charge of administering the compensation fund, one week into claims, an update when we come back. Life with Crohns Disease or Ulcerative Colitis is a daily game of what ifs. What if my abdominal pain and cramps come back . What if the plane gets delayed . What if i cant hide my symptoms . What if . But what if the most important question is the one youre not asking . What if the underlying cause of your symptoms is damaging inflammation . For help getting the answers you need, talk to your doctor and visit crohnsandcolitisinfo. Com to get your complimentary q a book, with information from experts on your condition. Thats why i always choose the fastest intern. R slow. The fastest printer. The fastest lunch. Turkey club. The fastest pencil sharpener. The fastest elevator. The fastest speed dial. The Fastest Office plant. So why wouldnt i choose the fastest wifi . I would. Switch to comcast Business Internet and get the fastest wifi included. Comcast business. Built for business. General motors accepted victim claiming for compensation august 1st, and Big Questions remain, how many complete applications is the auto maker getting, how many claims made, and who better to asking than the man in feinberg, running the compensation fine. Welcome back. Thank you, glad to be here. Do you have the total number . As of this morning, 115 claims filed in the last less than a week, over half of them are death claims, the remaining are physical injury claims. Weve just begun now reviewing the claims and the documentation, and some of the claims are simple, straightforward, getting the money out within 90 days. More complicated ones could take six months or so . Thats right. If theres a complication, a complicated claim, a difficult claim in terms of evaluating the dollars or who gets what, you know, some of the complicated claims may be arguments among family members who gets the reward. Yes. Gm, 13 is the number of deaths linked to the company. Has that number changed in terms of how many gm acknowledged . Ask me in a month or two. Right now, were just getting the claims, well review for eligibility, and most of the claims so far involve cobalts or ions, the two automobiles that make up the bulk of the claim so far, but were waiting, may be pontiacs, well take a look at all the models. You said theres no cap on total claims. Although, gm, then, in the Second Quarter results expected to spend between 400 million and 6 00 million. How do they have a number if theres no cap, truly free to operate how you want . Absolutely. Gm reaffirmed that theres no cap in the total aggregate dollars spent on this program, and gm affirmed i will have absolute final discretion in deciding who is eligible and how much money. Whats the toughest question youve been dealing with in your mind in trying to try to conceive some type of financial reward compensation in this case specifically for General Motors . The toughest problem here, some of the accidents, as you guys know, took place over a decade ago. The car, the automobile is long gone. How do you demonstrate it was the ignition switch defect that caused the accident . There its all primarily circumstantial evidence, what do the photographs show . The Police Report . Warranty and maintenance records . The insurance report . I mean, finding that the defect was the proximate cause of the accident is not going to be easy. Its a real challenge. Mr. Feinberg, while youre here, can i ask you about the bp, the British Petroleum fund, you help set up four years ago after the oil spill in the gulf. Bp is unhappy whats going on at the moment, a 20 billion fund, running out of money, and could run out in september im told. What do you think of what bp is saying and what its trying to do with the money, saying that, basically, money is going out that should not be going out at this stage. Whats your view on what you see and read and those contacts still involved . All i know is when we did the bp gulf coast claims facility, in 16 months, we paid out 6. 5 billion to 220,000 individuals and businesses. Now, ive been watching whats going on down there since my departure, and i cant speak to the pros and cons of that argument, whats going on now, other than to say that when we ran that gulf coast claims facility, you had to demonstrate a causal connection between your damage and the oil spill, or you did not get paid. I cant speak for whats going on down there now. Im watching like every other citizen. From the way you couch the answer, sir, youre not sure the causal link is being proved now. Thats easy. Im not sure, few americans are sure. If you follow whats been going on down there in terms of the arguments, the advertising, the allegations back and forth, the court decisions, i mean, there is a real dispute as to whether or not now there is a causal connection between the oil spill and the damage or whether there has to be in light of the agreement allegedly struck between bp and the lawyers, but im not privy to that. I have enough challenges with gm ignition switches without worrying about bp oil spills. Speaking of which, ken, its not just the lawsuits related to the switches, but class action suits claim the owners were economically damaged by the recalls themselves. Is that in your universe . Do you think those are overall legitimate . I have nothing to do with those economic damage claims. The diminished value of the automobiles or the Property Damage in repairing defective automobiles. Thats not on my watch. Im focused exclusively on accidents resulting in death of the driver or passenger or pedestrian or occupant of another vehicle or physical injury. I have nothing to do with the class actions. How have you found your dealings with General Motors, ken . Theres been criticism how they happen handled this, obviously, how long its taken them to do it, but managing effectively, mary barra, the stock is better. What can you tell us about working with her and working with the company in trying to award the victims . I couldnt ask for a more cooperative relationship. Gm has i cant speak for what happened last year or the year before, i can only tell you that in setting up this program, and delegating this type of discretion to me, gm has been cooperative, supportive, they have constantly, from mary barra to mike, all the way down the line, they have all said the same thing. They want to do the right thing. They want eligible victims to be compensated. They have agreed that the contributory negligence of the driver intoxication, speeding, texting with a cell phone, irrelevant to the program. I have the highest regard for gm in so far as they helped me set up this program and delegated this type of discretion without a kcap they have absolutely bee public spirited in setting up the program, unique, i must say. Yeah, kep, well watch your efforts over the next, obviously, few months watching the claims come in. Thank you for joining us. Thank you. Joining us in d. C. Today. Dow up 45. Lets get a market flash. Carl, stratus, the stock soaring after the 3d printer maker reported a 67 jump in quarterly saled helped by Strong Demand for the the bot products and services, and as a result, boosted sales forecast, and the stock up 2 1 on news, and its dragging up other 3d printers. 3d systems, x1, all benefitting from the ripple effects. Back to you. Thank you, coming up, orbitz has an earnings statement. Lets see where they are trading, currently flat. Well work through what the company is saying and trajectory when the ceo joins us later on squawk on the street. Tdd 18003452550 trading inspires your life. Tdd 18003452550 life inspires your trading. Tdd 18003452550 where others see fads. Tdd 18003452550. You see opportunities. 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Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com e financial noise financial noise financial noise financial noise treasuries strong today, lower yes, getting to the cme group with the santelli exchange. Good morning, rick. Good morning. I want to welcome mark grant on the day of central bank meetings, thank you for time this thursday morning, mark. For you, rick, always a pleasure. Thank you. So, you know, lets go through it. We had a chance to see bank of england, chance to see mario draghi, the press conference, do you draw new conclusions or epiphanies based on what the european leaders have said with regard to the operation of their Central Banks . No, rick, i think they held the course. Certainly mr. Draghi held the course saying specifically that Interest Rates are going to be very low for a long time. If you look at the Interest Rates of the european countries, even spain and italy have a lesser yield than the United States at this point in the fiveyear sector. Now, heres a loaded question, okay . My answer is easy. I dont think that deflation of the 30s is arriving in any developed economy any time soon. I think whats going on with europe dropping prices, if they dont, they wont be competitive, so to see a central bank be fearful of a process that heals whats wrong with it is con that lewded. Where am i missing the boat . It wont be like in the 30s or after the great depression. We had nongrowth in europe more than anything else, and i think that the European Central bank has tried to justify the 0. 15 lending rate, the banks carrying assets, sovereign assets risk free to keep Interest Rates down. Theres no question in my mind, rick, the biggest favor is any central bank, including the fed, can do for the country it represents, is to provide lower Interest Rates, and thats exactly what the ecb has done. Well, let me hit you on that a bit. Whats the current yield on spanish 10year roughly now, mark . About ten basis points more than ours, i think, last i looked, around 155, 160 against our 245. All right. My question to you is, is that making spain a whole lot better, Interest Rates making italy better . Doesnt the Interest Rate youre referencing to have a good conversation, look at who needs credit, what the consumers need, what the reforms they need to be able to use credit, it is not just the Interest Rate, isnt that over simplification . Its their only tool. No, rick, i dont think so. If you lower Interest Rates, you lower mortgage rates. You lower auto rates. You lower business rates. You have more buy backs in the equity market. Its a simple answer, rick, but not an over simplificatiosimpli. The biggest favor a bank can do for the country it represents is lower Interest Rates. Well, mark, thank you. Well always agree to disagree. In the end, i think if you price your Interest Rates too low, you are disenfranchising savers and the other thing youre doing is creating unintended consequences, but stocks are higher, so people, at least, the stocks were. Back to you. Thank you. Thank you. Coupons. Com have earnings, loss wideens, whats in store for the early internet name . Well talk with the ceo in a moment. Dow lost all its gains, roughly flat. E competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. With the top speedou compare of comcast the top speed of business dsl from the internet. Phone company well, theres really no comparison. Why pay more for less . Call today for a low price on speeds up to 150mbps. And find out more about our twoyear price guarantee. Comcast business. Built for business. Shares of coupon. Kornlgs cha com, sparply lower. Priced at 16, dushled on the first day now fallen below the issue price today. The company missed its second earnings per share by 5 cents. The stocks generally not feeling the love within that sector. And groupon fell short as well. Joining me, the president and founder and ceo of coupons. Com, steven boal. Nice to see you. Thanks for having me back. Obviously people vanish uwe what you reported. There was a big charge for stockbased compensation. Is that what you think sun settling people here . Well, you know, i think its a couple of things. Look, we had a great quarter, actually. Up 32 year over year. Stockbase compensation in 27q 2q, comp cycle. Net out compensation, loss narrowed to flat actually. Transaction volume up 22 year over year and in a season expected to be soft quarter, median advertising revenue was up a full 64 . Youll be aware the space is now plagued by this change that google made, which then showed up in retailmenots earnings. The algorithm program, that basically was designed to remove low Quality Content from Google Search results, as they would put it. That clearly hindered retailme not when they came through with their earnings. What bo ywould you say to that . Has that affected you . How should it differentiate with whats going on . Sure. The businesses are completely different. We so no, zero, impact from google. Like you said, its designed to filter out low versus high quality sites, and we consider our site and network to be a highquality site. The other thing, quite frankly, that might be weighing on the share price this morning is that there was a Research Note that came out from Goldman Sachs that had a misleading cover and some factual errors in it weve asked to have corrected. What were the errors . Do you want to clear that up . Sure. Weve signed a total of nine retailers to our new platform in the last quarter and two are live, not one. And the other comment was that there was no impact from that new platform in the quarter, and as we said on the call and in the calls afterwards, we started to see volume scale and are actually meeting expectations on that delivery. I have a question ar competition. I googled online coupons and i found a number of names i never even heard of. Price blink, visible hand, Free Shipping dot org, not to mention retailmenot and groupons. Its getting to about crowded space. I wonder what kind of marketability you see for groupons. Com given so many others are out there doing this . Sure. Those are online coupon companies. Its very different than what we do. For 16. 5 years weve been servicing consumer Package Goods company and retailers. Those are the stores where over 90 of all commerce takes place. And when you talk about ecommerce versus physical commerce, when it comes to the class of trade we service, you know, Companies Like kraft foods, procter gamble, General Mills and great retailers, its 99 of all commerce takes place in physical stores. So most of those companies are ecommerce related, when shopping online, were focused on the instore experience, where, again, 600 billion dollar as year of Grocery Sales takes place in the u. S. Alone. Yes. Steven, curious, weve seen some brands with Pricing Power lately. The campbells and hersheys of the world. Is this because everyones promotional or do belt whir pricing is strong and consumers are on the lookout for coupons more . You know, its both. Were actually countercyclical on a longterm basis. In the year, q2 is seasonally soft. So when you look at year over year volumes in our industry, q2 is a seasonally soft quarter. But on the longterm basis, when the economy is strong and people are spending money, theres more technical and more technology being used, and that grows our business faster. And when the economy gets a little bit tougher, and there is more money being spent on promotions, that drives for volume as well. Good to see you, steven. Thank you for sparing the time to join us on an interesting morning. Steven boal, ceo and founder of coupons. Com. Thank you. A quick break. Back with squawk on the street right after this. Just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. So you can invest in the life that you want today. Tap into the full power of your fidelity greenline. 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In celebration of my good friend and colleague sara eisens birthdays, a picture of her child kindly supplied by her sister without her knowledge. Happy birthday. You were beautiful. You can see a real blond, too. I keep telling you. The only one on the network, aapparently. Time for squawk alley. Over to you. Wow. Graduated from milk to martinis for sure. Happy birthday, sara. It is 8 00 in netflix headquarters in los gatos, california. 11 00 a. M. On wall street. Squawk alley is live