Restructuring and lowering guidance. Shares of valeant are down sharply this after an earnings miss and sharply lower guidance. Well give you the latest on the stress theyre feeling over at valeant. And the viacom saga continues. A hearing is taking place right now in massachusetts. Weve got the details. But first up, futures rising a day after comments from janet yellen propelled the s p to its highest level of the year. The fed chair expressing optimism about the economy and said she sees rate hikes ahead but gave no timetable for a tightening. If incoming data are consistent with labor Market Conditions strengthening and inflation making progress toward our 2 objective, as i expect, further gradual increases in the federal funds rate are likely to be appropriate and most conducive to meeting and maintaining those objectives. She did call the jobs number concerning, disappointing, raising questions. Feds going to wrestle with it and drop that phrase in the months ahead. Right. Well, its good to see shes the chairperson. Because theres a lot of people who are not the chair people who when you look back make me feel like, you know what, clevelands going to crush the golden state warriors. I mean, these are people if we were listening say they were on espn and they were correspondents, there were people on, they wouldnt be there the next time would be incredibly incredibly disappearing sports analysts. So we have a chairperson who is data dependent. Shes waiting. She looks at the numbers. A number comes out that is the weakest in six years. And shes the only one that i dont feel has scrambled egg on her face, or, you know, eggs dun easy, hash browns, the dennys grand slam is not on her face, but a lot of these Federal Reserve guys i feel like its pass the mayo and a little ketchup because the eggs on their faces could be eating cold, hot, doesnt matter. Kicking coaches and special teams coaches those guys are the first guys you fire. No one gets fired at the Federal Reserve for being wrong. Its lifetime. They talk too much though. At least the special teams coach knows to just shut up and stay on the sidelines. Nobody wants to hear from them. Went to Training Camp and guy asked a question of the offensive coordinator of the eagles said what do you think of the idea of having a dual running back. Ask the head coach. Finally one of the Sports Writers turned to me and said i think im going to ask the head coach. Lets just ask the head coach from now on. The other people who want the mike, i mean, if you went into the Federal Reserve to be on a mike, i suggest you go into acting. You could go to summer stock. You know, the berkshires have summer stock. Great summer stock. Supposed to be terrific summer stock. It is lovely. Put it on a plate. Cable access. Rehearsal for murder starring eric rosengren. Williams town theater festival. Thats a good one. They have a Shakespeare Festival not one would be able to compete in that. Alls well doesnt end well with those guys. Much ado about nothing. I love when he trots out the shakespeare like that. Share spear holds up. Is that why were at highs for the year . Yes, the dollar was key. If you raise rates, the dollar goes up. If youre ford or gm struggling stock, i dont know, but you want the yen to make it so that at least you have a shot against toyota. You want the europeans to be able to say, you know, you want them to be able to say, you know what, maybe this whole keeping rates down, lets just get things going. I think it is such a positive because we dont have to cut numbers if we work at, you know, lets say you work at colgate where the dollar really does matter, or honeywell you can sit back and say were okay. Thats how you get to a new alltime high. We want to get to some movers this morning including one of our old favorites valeant. Hows it doing . Not that well. Valeants down sharply in the premarket. Were talking about 13 or 14 decline right now. Im looking below 24 a share. This because after it reported its delayed First Quarter results, operating profits, most important the company cut full year guidance significantly. New ceo joe papa says valeants q1 results reflect the impact of significant disruption over the last nine months but then adds progress has been made towards stabilizing the organization. And, guys, the key focus i think for so many investors right now is on their ebitda guidance, of course their kov nans of all that debt according to how much ebitda generate is key. Right now based on current capital structure or updated adjusted ebitda is between 4. 8 and 4. 95 million this year. As per interest coverage ratio, 0. 8, theyre going to be okay, it would seem. But getting awfully close. Okay. Okay in terms of meeting their interest coverage ratios, meeting the covenants that come along with their lending agreements. That they wont with violating them. But theyre coming very close. Jim, the weakness seems to be in dermatology and in g. I. Remember they bought salics. One has to wonder also whether they suffer in dermatology because of philador. Its all about the face, david. Okay. Remember, youre a salesperson, say youre a determine to logical salesperson, if you work for valeant, remember youre selling the lower part of the face, those lines, david, focus on those lines, you dont have them, i have them. Not yet. They had a drug that got rid of those lines and then allergan developed juvederm and remember they had the double chin thing. Yes. This was Brent Saunders i happened to speak to him yesterday, you go in and you are eviscerating valeant. By the way the guy who came up with medesis he works with allergan now. How about baush lomb, im hearing 5 billion . Thats what youre hearing . Five . Yes. Jnj, cooper, alcon, allergan, they all want it. Do you think valeant lets say youre a salesperson at valeant sorry, you arent because you dont work there anymore. This is an amazing this is a dissection by American Pharmaceutical Companies against valeant. And i dont know about sallics, i dont know who comes in against them. The Conference Call, jim, began at 8 00. Let me give you a couple headlines. Thanks for not updating us on headlines here, but time will be our friend at valeant says joe papa. Time is our friend. Time is our friend. They will be in compliance with debt covenants throughout 2016, as weve just told you. The g. I. Units perform below expectations as did dermatology of course. Under performance in dermatology. And the key drug for when they acquired salix. They also say their Liquidity Position remains solid and on and on from there. That womens libido product did not work. That did not work at all. You remember this in the end is a drug company. It is not a company that makes things where its like you know, jnj has great aaa Balance Sheet. And when they were pulled remember the unbelievable thing, tylenol was pulled. And not just by themselves, but i am talking about all drugs pulled. And they were able to survive because they had a aaa Balance Sheet. You have to wonder again use whether or not they are really being hit by the inability to raise prices significantly as they have been. Or rollbacks as papa told me. Or even some rollbacks, right. So papa went from one bad situation to maybe an even worse situation. Frying pan to inferno. Yeah. Frying pan to volcano. On squawk this morning talking about how it was a cult people were blindly following mike, as they called him. Any time a ceo goes by the first name you know theres a problem. Shes great. Great reporter. I covered jonestown as a kid reporter. Yes, i do. That was a cult. Yes, it was. Valeants guidance makes Ralph Laurens looks good. But still lauren announcing a Restructuring Plan including cost cuts. Company expecting to achieve up to 220 million in annualized net savings. Revenue for the current fiscal year down at a low double digit rate hurt in part by store closings, a pull back in inventory receipts, weak traffic. Stefan larson from old navy is swinging the axe. I know the stock is down, im not going to push it here, but isnt larsson doing what you have to do in the modern day taking a lot of gutsy action. I know everyones selling the stock today. Im not going to say today is the day to buy it because when you see a stock down that much what typically happens the sellers last for several days. But i thought larsson is biting the bullet. Look at pvh when stock was at 130 and had to say, listen, we bought this company and were going to have to take some charges. Big Analyst Meeting today. Of course the journal has the large takeout on the company as they sort of reintroduce themselves to the world and he sets out strategy. Hes been the ceo now for seven, eight months, right . Nine months. Come in in september. I come in and talk about there was a great piece by matthew boss yesterday, i dont know if you read that piece by j. P. Morgan, research, about what brands can absolutely like, you know didnt mention ralph lauren, but ralph lauren is a brand. And that brand is not going to be as amazon as people think. Look, again, i know you could argue, well, look this thing is down so much that there must be no comeback. I look at its an excellent brand. Larsson is doing whats right, old navy talk about a difficult situation. You can give up on ralph lauren all you want. I think the time to give up was at 130e. Interesting. Were going to see more about the severity of the job cuts, womens wear daily says 10 , obviously trimming their exposure to department stores. Look at that employment number on friday. Thats ralph lauren written large. We were saying yesterday in the meeting it was rather extraordinary. We literally saw companies that arms are taking positions in, 8 position in retailers that many of the people in the panel said wont exist. Take an 8 position you saber rattle and no one wants you. That can happen if you pick the wrong stock in the wrong sector, no amount of activism is going to help you. None. Im not going to mention the retailers because thats not fair. But theres a lot of retailers look at pac sun, thats done. Look at some of these teen retailers and quick silver, quick silver came on mad money and basically talked about a restructuring. And its like, well, okay, let me know whos buying give me a customer. This is not like watson where you give me a customer. Its like give me someone who walked into your store and bought something. Right. They make those . Let me think. You know, in the camp prussia mall there was a guy who came in and bought a rash guard. Rash guard. Got it. When we come back well get the latest on viacom and Sumner Redstone and one of the power players in commercial real estate blackstones Jonathan Gray on the state of the economy and more. Take a look at the premarket. Were going to get to some of these brexit polls, a primary in california tonight, a lot more to look at when squawk comes back. Call just came in. Shes about to arrive. And with her, a flood of potential patients. A deluge of digital records. Xrays, mris. All on account. Of penelope. But with the help of at t, and a network that scales up and down ondemand, this hospital can be ready. Giving them the agility to be flexible reliable. Because no one knows like at t. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive they found out whos been who . Cking into our network. Guess. I dont know, some kids in a basement . You watch too many movies. Who . A Small Business in china. A business . They work nine to five. They take lunch hours. Like a job . Like a job. We tracked them. How did we do that . We have some new guys defending our network. New guys . Well, theyre not that new. Theyve been defending things for a long time. [ digital typewriting ] its not just security. Its defense. Bae systems. The viacom board versus Sumner Redstone saga has moved to a massachusetts courtroom this morning. A county and Family Court Judge is going to hear arguments on whether to expedite a case involving the mental capacity of the 93yearold redstone, Philippe Dauman, viacom ceo and george abrams, also a longtime trustee, both removed from the Irrevocable Trust that oversees the control position and on the board of National Amusements and oversees control position in viacom were both removed saying by undo influence. And they want a court to rule on that. Theres so much more going on here, guys, that it truly is one of the more fascinating stories weve run across in a long time. Simply put you have a board of directors of a controlled company actively at war with its controlling shareholder. And yesterday as we reported first at 4 30 yesterday, you had National Amusements as that control shareholder come out and say weve just changed the bylaws, viacom, and we have now made it necessary for unanimous vote should you do anything involving paramount other than normal course business. Of course this has had the effect of actually having people at paramount say what can we and cant we do without a unanimous vote at the board of directors. The board still includes Shari Redstone and Sumner Redstone, hence seems nothing at all will happen with paramount, the company has been talking to potential bidders for a Minority Stake in paramount, maybe those talks will still continue. Maybe this is a onetime only kind of thing that you could still get people to come to the negotiating table. But given what at least has been attributed to Sumner Redstone about his feelings about paramount, its hard to imagine they would approve virtually any deal. This may have had the effect of stopping in its tracks any hopes Philippe Dauman and the board had in retrieving any stake in paramount, but the key here is just this continued really territory ive never seen trot on where you have a board and open revolt against controlling shareholder, of course saying that that shareholder in the form of mr. Redstone, a 93yearold gentleman who just turned 93 last week, is not competent and is therefore not making the decisions but is actually in the hold of his daughter shari. Wow. We may debate his confidence, his legal teams confidence isnt getting a whole lot of debate. I mean, they are doing the job that he is asking them to do. They are. And theyve added to that, in fact. Youre now talking about law firms in the National Amusement sites, carl, are ones we know well. So, yes, they are theyre at war. And it goes back and forth. And i know it can be hard to follow, but you need to step back and consider a couple of key things, which is one what if you are at viacom right now . What are you doing . Youre kind of paralyzed. Yes, in case of paramount you very well may be but just in terms of going to your job every day and making sure youre doing what you need to do not knowing really where the leadership is as ive reported many times theres still an expectation and this is based on my reporting that at some point there will be a move to replace that board of directors and ceo mr. Dauman. It has not yet happened. It has not yet happened. And they have a little more time it would seem given they now can potentially make sure no paramount deal happens at least unless its one they want to happen. And finally, id come back to the Court Hearing today and to that trust, which of course in the event mr. Redstone is deemed yes competent, it is interesting to note he would then step off the trust and as is also the case his former wife would also step off the trust if hes deemed incompetent and two new members would come on. Those two members are the two members put on in place of mr. Abrams and mr. Dauman. So you get back to a situation says even if you were deemed incompetent, four of the trustees that would be on the trust in that case would still seemingly be those in favor of what mr. Redstone and his daughter shari are in favor of, namely making changes at viacom. So im not sure any of this matters. I dont even think theres a corporate analog. I mean, im thinking about unita and lpa during the great angolan civil war. I dont know what youre thinking of. The government which you were supposed to salute to. I mean, honestly, i think you have to go to geopolitical to find something this insane. I mean, honestly, who did you serve for in angola . I dont think theres a government. Yeah, people are searching for historical parallels. In South Carolina in 1861. And as salacious as it is and as much as they go back and forth, were talking about two very large Important MediaCompanies Whose future certainly in play here. You dont know what youre working for. You dont know whos in control. You dont. Alexander hague, im in control here. Maybe its one of those situations. Alexander hague. Saturday night massacre. Yes. Something like that. Yes. Out. Out. Well get cramers mad dash and count down to the opening bell after a short break. Dont go away. 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. Illuminates skin with pearl optics science. Your concert style might show your age, your skin never will. With olay you age less, so youre ageless. Olay. Ageless. About five and a half minutes before the opening bell, where have you gone, spencer ras coff . Wow. I was going to say name me two cohosts of squawk on the street. Yeah, spencer and rich. There they are. Spencer came on mad money recently and talked about his lawsuit with move, which is news corp. And p