Yellen live in an hour. First up, though, stocks in sellingoff mode away the world. Oil prices down sharply. Gold rallying to a one year high after yellen highlighted some of those risks to growth during ideas testimony on the hill but did not rule out gradual Interest Rate hikes. Shell be back there an hour from now, this time as we said before the Senate Banking committee. Some trying to argue this this morning is related to what she said. Do you buy that . I know Everyone Wants to be on fed centric, but im sitting here watching the rio tinto ceo basically saying this is it, were going to have a situation where not only the distressed players in the junior level and mid tier, but now the senior players will have trouble. Listen to bob did attituudley s fundamentals will kick in. Theyre more powerful than yellen. Yellen can be a force of calm by saying were just watching the world and we can talk about rate hikes when we have to, but were not going to talk about rate hikes today. Were going to focus on where the u. S. Can be in order to be a beacon to the rest of the world in the safe haven. That would be the states manlike thing to do about that thats not what you learned if you were her age and you went to school when i did. This would be a great time to put a stake in the ground saying were the locomotive, we cant get derailed. Ill talk about rate hikes when its necessary. And then you have us distinguished from everybody else. Think about the typhoon companies we have on today. Four were great. Not good, great. They were great. The fifth is twitter. We can talk about whether thats a value play. Gold is certainly sounding off. But look at the dollar. The dollar is going down. That helps our companies. If you look at our bonds, were not negative breaks. All i can say is that it is frightening if you have been following bonds a lot. But im just saying that yellen has a chance to make a difference, but not in the way that she did yesterday. She didnt really have a message yesterday is what people are saying. But you bring up negative rates and i think that seems to be a fear today that is permanent ya permeating a lot of the broader markets. Ten years in japan, nine in germany. It brings deflation conceivably and then tee nation brinfla def idea of collateral going down in value. We need inflation. Not sure we got it. How right was draghi to be worried about deflation . I dont want to pick out any particular banks in europe, but they are really being hurt by deflation. They didnt have to raise capital. Theyre very opaque. But were going down almost one for would with them and thats a mistake. What about when you try to surprise the market with negative rates. And currency up 7 . Which would be terrific to yellen to be a little more statesmanlike. Recognize that we have an election that is not signifying stability. And im not telling her to say rates are on hold. This is not the time. Were just focused on the world and trying to continue the engine. But germanys dax is down 6 for the week and were only down 3. 3 . Thats right. France is down over 7 for one week. If Deutsche Bank were our largest bank, id be some what concerned. But if i look at jpmorgan, they have been overcapitalized for so long. I was going over some of the loan book last night because my life is so pathetic. And they havent been able to take the risk maybe that would have gotten them in trouble in another time. But Deutsche Bank, i dont know. Some of these banks, by the way, theyre still negotiating with the government. Litigation risks. We dont have litigation risk. Am i saying buy the banks . No, because the credit lines over and over but im just saying were better and what a great time for janet yellen to say is this not a time to talk about rate hike. Lets just talk about stability. Because deflation did produce terrible results over in europe. Look at the socgen. Take a quick listen to this. All in all i think globally speaking systemically when you look at the system, i think its much more robust and i think there is again too much nervousness. Were starting to see the word counterparty risk again. Is it too early . I remember one time talking about the counterparty risk and people at Morgan Stanley were very serious and they explained to me exactly what was going on versus the hedge funds. And i regret that i emphasized it too much. Because our banks really had a lot of transparency doing a lot of things right. I cant say that about the european banks. But if you positiositioyou thin think you missed the last five years were all these banks were told you cant give money back. You just have to conserve it. Doesnt mean we dont have bad loans. Does the mean bank stock is not going down. It does mean that at a certain point the european banks, and they can cause a lot of problems more banks are in far better shape than theirs we can say broadly speaking. We have lower leverage rates. Much higher capital ratios. But its all a black box. Are you really going to tell me you know what is going on at Goldman Sachs . No, i dont. I know the book value has been scrubbed. We need to have confidence they know what is going on. Back in 07, if you had confidence Merrill Lynch knew what was going on, you were wrong. Thats correct. But the roe is so pathetic because theyre not the allowed do anything with their capital because weve decided from volcker that theyre pitiful helpless giants. In europe, draghi saw it coming. B before i turned 61, i would have called him an idiot, but as you get older, you become more of a statesman. When i look at you, i think lincoln. Some of lincolns stuff still holds up. Like the gettysburg address. We have a lot to get to. The ceos of cisco, whole food, expedia, twitter, pepsi cfo. Up next, one more look at a premarket. Looking at possibly the lowest coming off the lowest close since april of 14. More squawk on the street in just a moment. Premarket remains ugly, but it was actually worse this morning as we saw moves in equities. Ten year got down to 1. 55. Busy morning for earnings. Pepsi out with results beating on the top line. Pepsi earnings in line as you mentioned, revenue beat despite the negative impact that continues from the stronger dollar. We welcome now hugh johnson, cfo and vice chairman. Welcome back to squawk on the street. Good morning. So we mentioned this was a pretty strong quarter, though the outlook came in a little bit less than wall street was expecting. Can you talk about what youre seeing out this year which perhaps made you more cautious than the street expected . Absolutely. If you look at the rear year we delivered, we certainly had top line as well as margin improvement. We invested in the business and drove cash flow. As we looked at 2016, really from an economic outlook, i think more of the same. Developing this emerging markets, we faced lots of challenges there for many of those markets. That said, we are executing very well within those markets. We saw developing and emerging revenue break of about 6 Fourth Quarter. We expect that to continue. And in the united states, businesses are performing very well. So this notion of balance in our portfolio is actually working very well and i think that is what is enabling us to generate strong results and in a day when defensive stocks look awfully good, pepsico i would position is a pretty attractive choice in that regard. Your advice to investors there. Just quickly on strike the right balance, its always a balance when it comes to volumes and pricing. We did see Strong Revenue growth, but a lot of that was on the back of pricing. Kind of sluggish volume growth for both snacks and beverages. Do you expect to be able to maintain that kind of pricing environment when consumers are pretty sluggish right now . Yeah, i think if you think about 2015 in that regard, we had 10 Foreign Exchange headwinds. And as that played its way into on local transactions, we did have to price on that front. Looking forward into 2016, were calling if for only 4 . That means less inflation. Which means well probably take less pricing and see more volume growth. From north american beverage perspective, we continue the pricing environment to be quite healthy and given the challenges in terms of volume growth in north america beverages, i think it will be somewhat driven by volume, but clearly driven by pricing as well. Jim cramer. Good to see you. We all watched the super bowl and saw a tremendous amount of pepsico. We also saw in your release this morning a big step up in advertising marketing. Can you explain to our viewers why that is worth doing given the fact that it is a big statement that pepsico is around . Absolutely. And the super bowl is the most advise shl indicativisible indie doing. And the pepsi brand plays particularly well into music and sports and what better event than the super bowl to combine those two things in a positive way. More broadly, if you look at where weve been since 2011, weve taken advertising and marketing up by 110 basis points. 40 basis points last year. And the reason were doing that is were seeing good returns on investment. It if you look at our Revenue Growth over the last four or five years, its been around the 4 or 5 range and compared to most Consumer Products companies, that is relatively on the high end. We think its the investments in research and Development Driving innovation and enabling top line growth and we think that balance between good top line growth and good margin improvement is the one that is the most sustaining and value creating strategy in our space. Lets talk about the margin improvement. Ive been waiting for you to say that commodity costs have come down. And i know that the dollar versus other currencies, locally it can actually hurt you. But you emphasized each line that the commodity is coming done does matter and is lucrative for pepsico. Without a doubt. And what we saw in the quarter was some commodity deflation as you said. Looking forward into 16, on a local currency basis, we will see commodity deflation. On a dollar basis, we will see commodity inflation. And that is and on democratgoin challenge. So we think the headwinds are much less substantial. We are calling for deflation. But frankly were build to handle it. Here we are in the middle of another Global Market selloff. You can talk about whether the u. S. Consumer will hold up this year despite some of the major headwinds on growth, on markets coming from overseas . Is the cheaper gas price helping at all . Yeah, i think it actually is, sarah. I mean the bellwether for me on that in the u. S. Is the Convenience Store business. And we saw Convenience Stores up about 6 for us in the quarter and about 6 or 7 over the course of 2015. So as i look at the u. S. Consumer broadly, now, there are geographic pockets that are doing great and others challenged, but broadly u. S. Consumer is actually Pretty Healthy right now. They delevered their personal Balance Sheets. Generally the Employment Situation has gotten better in the u. S. So the u. S. Consumer i think is in a good spot. My biggest concern in that regard frankly is it if cooperations wind up pulling back on invest the because of the turbulent Financial Markets and that ultimately plays its way into mainstream. But right now, not seeing any signs of that. The u. S. Consumer is doing just fine. Word this week that chibani declined your offer. Where are you looking to add or take away from the portfolio . Is it on food, drench obeverage geographically . Happy to talk about that. Obviously as ive said in the past, we dont talk about any specific transaction. And the truth is we look at many, many things as part of really turning over every stone to find Value Creation opportunity. Our principals around m a are the same. It has to meet certain strategic criteria that enable long term growth and financial criteria for short term growth. Very few things pass through the screen. As i look forward, we talked again this morning on our call about beingacquisitions. More likely to be in snacks and outside the u. S. , but it really comes down to one met take ma m does it create value. Hugh, thank you as always. Good to see you. On the back of another receipt strong quarter. You mentioned the margin improvement, jim. Look, this is part of my thesis that we could be really glum in we wanted to, but then we look at a pepsico and we get tries twice the yield. I trust their Balance Sheet better than the united states. So good questions. Thank you. When we come back, walter robb on his companys better than expected quarterly results. Here at td ameritrade, they work hard. Wow, that was random. Random . No. Its all about understanding patterns. Like the mail guy at 3 12pm every day or jerry getting dumped every third tuesday. Jerry every third tuesday. We have Pattern Recognition Technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. Td ameritrade. Weyoung company around but if we want to keep the soda pop flowing we need fresh ideas got it. We slow, we die. What about cashing out . No im trying to build something here. How about using fedex ground for shipping . I dont need some kid telling me how to run a business ive been doing this for 4 long months. Fedex ground can help us save money and deliver fast to our customers. Not bad, kid. You remind me of a younger me. Aiden the dog is eating your retainer again. Lets take a short 5minute recess. Fedex ground is faster to more locations than ups ground. At ally bank, no branches equals great rates. Its a fact. Kind of like social media equals antisocial. Hey guys, i want you to meet my fiancee, denise. Hey. Good to meet you dennis. Whole foods beat First Quarter estimates. Joining us is walter robb. Good to have you back. Good morning to you. Good morning, carl. Jim of course has telegraphed your story for a long time. Last night you talked about improving what you called price perception. How much progress are you making in convincing customers that they can shop at your story without paying a whole lot of money . I think were making good incremental progress and i think weve improved our tracking of pricing depends competitors, making smart strategic investments. And i think were also making progress on communicating our quality and our differences by the launching of our digital platforms. Walter, jim. Great to see you particularly on a day when beat the estimates. Im torn on your quarter because you obviously stood there at 30. You bought back a huge amount of stock with your money. But you had this 365 where your coceo says there is no culture, no legacy, just nothing to overcome, well go radical. I think this is your single greatest opportunity. But youre buying back stock. Shouldnt you just plow it into 365 . It sounds so good. We can do both. We did buy back stock, but were also moving ahead aggressively in 365. The first one open in may. So im not sure its either or. Its some of both. And i think your average price is a little high. Im rounding it up. Now, i do need to know, youve got these regional president s, it sounds like the whole foods coming forward is a more unified whole foods where youre lowering the costs, labor scheduling is getting a little better. It sounds like that youve got a lot of things going just when youre digitizing the company. Am i right to think that the Gross Margins next year at this time, even though etheyre goin down now could be expanded . Hard to say. I think what weve got it for this year is to take the Gross Margins down incrementally quarter to quarter and lets play out this year and see where we need to go. There are lots of opportunities to grow the business, but i think we just need to play it a year at a time. This is the first time i feel like im being more bullish than you. Im trying to get at your conservatism, but thats okay. Because you have always been a straight shooter with the show. Can you tell me what is going on look, just last quarter we kind of laid the business out and said here are the things that well work on over the next year and were back three honesties later saying weve done all these things, were making progress. I think we have a lot of runway to go in making progress in all those areas. So thats really the message we want to get out this morning. Absolutely. Ive been waiting for the digital, the kinds of things youre doing with Digital Coupons. Talk about what these mean. I know its only been in philadelphia a short period of time, but talk about the impact instantly that make people want to go to whole foods because t its cheaper. Right now there is a great coupon for your roses. But download the app. The coupons pop up with a single scan at the register, you get the value of all the coupons. And so weve been doing it in philadelphia for a number of months. And the potential here is that we will have unique individual identifier. For everyone that downloads the app, well be able to track that and personalize the offers for the customers. So were getting the coupons, but also the information about customers and were building out our Customer Base close to 4 million customers on our email platform now. That allows us to again continue to reach out aggressively. What about the legacy business here. Were in an environment where a lot of p investors are starting to put together a list of stocks to open or avoid in a recession. Doesnt your stock naturally fall into the former category . I think which category is that, carl . I would imagine the stock to avoid if households come in under severe pressure. I think weve approach prove real staying power. And people have to eat and a lot of times people will let other things go and continue to by grocery so is they can feed their family. And i think weve shown you were taking steps to evolve. Were not sitting still. We have the highest quality standards. The best team members in the world, best instore experience of any grosser. A lot to like in all those areas. 365, first one is in l. A. In may . First one end of may in los angeles. Second one in port haland and td in seattle all in about a space of three months. Is that schedule expected to