Our road map begins with the markets taking a dive overnight. Dow off triple digits as the stock moves overseas. Disappointing data weighs on equities in the u. S. Earnings from ge honeywell and American Express have those stocks moving as well as another round of job cuts from schlumberger. Verizon announcing its breaking up the cable bundle into smaller bundles. The new tv offer weve got to explain coming up. Futures moving lower. Taking their cue from declines in europe. Here in the states Consumer Prices up 0. 2 due to Higher Energy cost. The core rate up 0. 2. Few things working against the bulls. We mentioned that crackdown on margin lending, the back and forth between greece and germany continues. Few downgrades today. Several Revenue Misses on large caps, as well. Seems to be a number of things rattling traders, including what was a glitch in the bloomberg system overnight delayed a uk bond sale. Never good news when you have a bad behind what happened in china and worries over liquidity spooking markets. Dependency on that machine front and center. Plus talk of the fed still. And when they are going to raise Interest Rates. Seems june is off the table. The market is not pricing it in until the fall. One might not anticipate a move in the Chinese Market would have an impact here but apparently it is. This move by the China SecuritiesRegulatory Commission to allow short selling on a lot more stocks and ban margin stock trading had those stocks down after hours over 5. 5 which did seem to spill over to our futures in the early going. You cant forget both china and jurp which is selling off sharply, have had tremendous runups. So perhaps its time to take a little profit. Perhaps time to have a correction. I mention the fed. Also a lot of focus on Stanley Fischer, vice chairman of the fed we got to speak with yesterday in washington. Particularly his comments about the timing of raising Interest Rates. Have a listen. Where most people think it will happen this year but you dont want to get a lot more definite than that. It depends on how the economy develops. Well try to do it at the best possible time. We would like to see the economy beginning to grow again. And grow at a decent rate. He got a lot of attention for those comments. We saw bond yields go higher after that. A few Research Notes this morning in terms of what he says or hints. He cant give an exact time frame. He said inflation rate was starting to turn up toward the target. Zero Interest Rates cant last forever. He also said you are starting to see a sign of a turnaround in the u. S. Economy. He is shaking off the boor data we saw in the First Quarter. Well see. The journal argues jobs starts, Industrial Production, even claims showing weakness. Well talk about that right now. David leibowitz and tom borcelli. Of all the fed talk in the last week or so would you agree with that assessment . June off the table, looking more toward the fall . I think it is. We changed our call. We were officially june. We shifted it recently. For whatever reason whether its this soft patch of data or some other reasons, reality is the fed is from our Vantage Point trying to push out expectations. We shifted our call. We werent particularly happy about it. I think the data broadly speaking are consistent with an economy moving along at a decent pace. The softer patch of data notwithstanding. Like i say to clients, im paid to tell them what i think the fed will do not what they should do. It seems like a foregone conclusion september is off the table. Of all the worries we mentioned, we talked about the china parnlgin changes and regulatory changes, the bloomberg glitch the fed, perhaps this market is due for a correction. What has investors on edge . I think a lot has to do with europe. The lack of progress made on greece is being reflected in particularly european bond yields. You saw a flight to quality over the past few days. Decline in german bund yields. Its europe and greece driving the bus right now. Flight to kwlt. The german ten year is 6 . They are under 5. They are negative to nine years. You can buy swiss paper 30 years and get 21 basis points. That is a great bargain. That will pay you 6 over 30 years. Not 6 a year. I think you make a great point. U. S. Treasuries look like a highyielding asset. I think thats part of the reason we are seeing Dollar Strength. Long as we have more attractive rates, that is likely to continue. We would agree with that. What weve been saying you go through conundrum part two where tenyear yields, the yield there is capped. We wouldnt be surprised if that happens. What is interesting is how does the fed respond if that happens . The reality for us is you look through that entire conundrum period, end user consumer rates didnt budge either. Dudley has been talking about this in various speeches. He suggested if these end user consumer rates dont respond, you can actually see a more aggressive fed. You think we are done seeing oil energy weigh on inflation . I do. Thats part of the house call. I have no reason to disagree with that idea. Whats interesting about that is all weve done is set up a really low hurdlerell for yellen to achieve this goal. Do you have to own u. S. Treasuries at this point . Are you better off going into equities with these rich valuations and runup that weve seen . I think in the current environment we maintain a preference of risk over high quality fixed income. We tell clients bull markets dont end at average valuations. They end at recession. We hit a bit of a soft patch in the First Quarter, broadly speaking our expectation is for an acceleration in the second half. I was going to bring up the fact also in the conversation with fischer yesterday, i asked what is a tenyear yield below 2 signal. Weird answer. He said it signals that the market is waiting for clarity from the fed on what their next move is. The market is trying to figure out what the next move is for the fed. Its hard when everybody has different opinions and we are getting ten opinions per week. Isnt that part of the problem . How many people were surprised when the fomc meetings came out and several fed officials thought they would go in june . We were surprised, to say the least. To the point on fischers comment, what you have to consider is i dont necessarily think its great its luke the fed talking their book. They are waiting for us. I think actually whats happening is this idea weve been talking about on this conundrum. There is so much flow out there the ecb picking up the qe baton, there is additional liquidity that suppresses rates. The concern about consumer spending, which seems to not be there to the extent we expected are they measuring it properly . I dont even know. I would hope they are. It does seem rather odd given job growth and gasoline prices alone. I would say it is hard to square that circle. I take the data as they are. If they are properly measured or not, i leave that for academic discussions. Reality is this. Given what are actually fairly sound, not talking about robust but fairly sound consumer fundamentals, its hard to square the circle of a weak q1. I would argue you get something of a bounce in q2 once you get past overwhelmingly weather effect. Thanks for joining us to talk about all these themes. Tom porcelli and david leibowitz. General electric reported First Quarter operating profit. Revenues were below due to currency p. M. And declines. American express posting quarterly revenue below consensus. The strong dollar having an impact. The end of that cobranded card relationship with costco and jetblue. We focused a lot on that here with jim cramer. Earnings were ahead of expectations. Ge the big news is a week old. The decision to dispose of most of the assets in ge capital which astoundingly sent that stock up one week ago over 10 in a day. It has come back a bit. On the call this morning, a couple of headlines to share. Generally positive immelt saying the First Quarter was a good one. Good quarter marked by slow growth and volatility. U. S. Is Getting Better every day. Europe improving. China is good for ge. Industrial cash flow was lower than expected because of aviation supply chain issues. Power and water. And the like. Of course it was the news again of last week that will continue to play out over some time here. The huge 50 billion share buyback. The deal to sell real estate right away 23 billion to wells fargo and blackstone. And that decision to take the hit. You are seeing that in this quarter in terms of the charges associated with the eventual dissolution of ge capital over the next couple of years. Referencing back to one week ago what mr. Immelt had to say about the changing portfolio of businesses. I think just the ability to get a good return is really difficult today. At the end of the day, our primary job, maybe more than more companies is Capital Allocation. If youve got a sight of a company that can generate 15 , 17 return on a side that feels like its going to be hard to return cost of capital, its an easy Capital Allocation trade. You know markets change. I think to a certain extent Financial Services this isnt a cycle. This is a generational move. This is a long term change in terms of how people view size and liquidity, things like that. The first Earnings Report we heard since the big announcement. They are framing the company in that way. In terms of excluding ge capital exit impacts and looking at these industrial businesses. The portfolio businesses that are going to be given the judgment in the marketplace over the next few years. Oil and gas revenue down eight. Orders down 10. As bad as that sounds there is a sense this morning it could have been worse. Thats maybe one reason the stock did form a bit of a bottom pre premarket. American express, would be starts to wonder how because there is so much activism is it a possibility, you have to consider it although its not clear there is one simple route to go down. Its more when i talk to investors about a turnaround that would take some time. So your activists would have to be of the likes of a value act, someone willing to be there a long time. Sounds like the question is, has the environment and what has propelled American Express to the top, which is the highest spenders, has that mod p hell completely shifted with increasing competition and with the fact there are better rewards at different credit cards . I didnt realize, it is the worst performer on the dow jones for 2015. Sentiment is pretty bad. For people who see value there, it is cheap relative to some of the other big credit card players. The head of verizon fios looking to change the pay tv game with a new custom service. It appears the force is with disney when it comes to the new star wars trailer. Interesting numbers to tell you about. How the stock is reacting to that trailer. Take another look at the premarket. Weve not gotten to honeywell or mattel. Downgrade of golden sacks. A lot more squawk on the street in a minute. It took tennis legend serena williams, fencing champion Tim Morehouse and the rockettes years to master their craft. But only moments to master paying bills at chase. Com. Depositing checks at the atm and transferring funds on the mobile app. Technology designed for you. So you can easily master the way you bank. Bloomberg trading terminal had an outage causing a lot of problemses. Interruption began 8 20 this morning london time. Bloomberg said service was restored to most customers. The company said there was, quote, no indication at this point this is anything other than an internal network issue. I guess when it comes to electronic trading glitches and problems, everyone wonders, is it a hacking, something with the network . Bloomberg saying doesnt look that way yet. People are dependent on this thing. Uk postponed a bit of a buyback of government debt. After all those sony emails were put on wikileaks and available for search it was on peoples minds was this a possibility . Disney releasing that new trailer for the next star wars movie the force awakens. It racked up 19 million views in 24 hours on youtube. It pushed the stock higher. Bob iger talked to julia boarston after the announcement. No predictions how big this will be. We know that star wars films did incredibly well. There hasnt been a film out since 2005 actually. The moviegoing audience in the world is much larger than it was. There are markets today that were nonexistent before. China being a great example of that. We are fairly confident this film is going to do quite well. Way too soon to make predictions and probably we will not make any in public. Stock at 108. 10. Alltime high 108. 94. We have to get used to new names. B88, kilo rem. I wish i was a star wars fan. You werent alive when the first one came out. That is not true. When was the first one out . 1977. No i wasnt. I can still appreciate Harrison Ford coming back with that cameo. That was very exciting. Julias live shot with r2d2 or were you traveling . What did you tweet, got nine times more views than hillary . This is about nine times that. People responded saying this is bipartisan. This maus be it. Disney the power of these franchise whether it be star wars or the others they also have. Frankly, the company paid 4 billion for lucas film. One wonders how quickly theyll realize the return on that investment. Wouldnt seem to be very long which some expect to be recordshattering numbers from this one. I go back to thinking about the pixar deal the multiple they paid. I remember giving iger a hard time about it. Redick lis how important that was ridiculous how important that was to setting the standard. And espn when we talk about this fios announcement. Contrasts the challenges dreamworks had. For disney that would have been a modest hit. Its done wonders for dwa. Are you a star wars fan . Not a huge fan. Did watch them all. Ive seen more or less all of them. You are. You dont want to know how big a fantastic i am. Didnt you use the hashtag chooey were home. Yes. Amazing. That was all you . Yeah. Coming up art cashin on what he is expecting from the final trading day of the week as we count you down to the opening bell with futures in the red. Dow jones futures almost near the session lose. We saw 150 earlier. Down 140. S p set to open up down 12. 50 points. Buying treasury and the dollar this morning. More squawk on the street when we come back. If youre looking for a car that drives you. And takes the wheel right from your very hands. This isnt that car. The first and only car with direct adaptive steering. The 328 horsepower q50 from infiniti. Theres nothing more romantic than a spontaneous moment. So why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. 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I think the probably the media reports that greek banks have been told to sell their sovereign debt if that is so things could heat up pretty fast. Right behind it is chinas move on margins and increasing the amount of stocks that can be shorted. That was a surprise after they closed and it knocked the futures down about 5 at one point. Then simply the fact that you had that disruption with the bloomberg terminals. That has kind of an unsettling flash crash kind of response among traders. You put all those three together and thats why you are seeing markets around the globe doing what they are doing. On greece we keep making this round trip right . Concerns get acute, they push it back or settle something. They push it into april, may, what have you. How damaging would it be if we got into the living room the fire got into the living room so to speak . I think there is some concern this time in that they asked the imf for a postponement and they gave them the back of their hand. You saw the credit default swaps in greece begin to popup. There is money being bet out there that this may come to a head and it may come to a head quickly. Do i need to care about greece . I feel as though sometimes we go back and forth about its importance in terms of the macropicture. The only reason to care is that it will disrupt currency markets. The euro without greece is a substantially stronger euro. What will that do . It will be based much more heavily on germany, which is ahead of the game. Then is it going to be like a set of dominos . After greece leaves and im assuming the pressure will come on some of the others. Even if you are not seeing that contagion, a lot of the discussion at the Imf World Bank was sure the markets arent signaling that but that does set a bad precedent if trouble does popup. It isnt as though people havent been prepared for that possibility for years. And the imf has their own precedence to worry about. Allowing payments to be delayed. They havent done in 30 years. Absolutely. Its a question of do we follow the rules or do we approximate following the rules . This is heating up. If you asked me a year ago i would say 20 , now its 40 chance. Well get the opening bell in a few minutes. Doug. Youve been staring at that for awhile, huh . Listen,