Ended where they began yesterday. It was i guess a quiet august day. Today is september, though. How did the european markets fair on the first day of september. Whatever happened to italy and spain . Come on, guys. But theres germany, france, and, of course, be the uk is the three, the one that was in the red. Theres wti crude, continuing to fall now below 45, well below this morning and that 10year note yield creeping above 1. 6 at 1. 613. Our road map this morning does start with the first trading day of september. If you woke up and didnt look at the calendar thats what the day is. Its a volatile month. Whats going to be coming. The apple tax saga far from over. Tim cook calling the 14. 5 billion tax bill from europe total crap. And european officials are firing back. Shares of salesforce falling this morning. This after earnings that were fine, Ceo Marc Benioff spoke with jim last night on mad money and well get into whats going on there and why that stock is looking down this morning. As for overall stocks futures on the rise as we head into the first trading session of september. Wednesdays decline snapped a fivemonth winning streak to the s p 500 and a sixmonth winning streak from the dow. The nasdaq did rise 1 in august. That posted its second consecutive monthly gain. We talked yesterday, of course, about september, jim, and what we can expect. We made the point that it is typically a more volatile month. August was very quiet. We will have a lot of fed focus. Right. We will get a jobs number tomorrow. Yeah. This is heightened period of sensitivity and one of the things i said last night on mad money is this is when you technology, big for the s p. Comes in with a head of steam in terms of the stocks but the earnings may not. And immediately see palo alto, the other day, king of cyber security, guiding down. And then last night, salesforce with a guide down of the next quarter, not of the year. Thats important. Will come into play later on. But this is what i most fear is that people are lulled into thinking that everything is good when housing is good. Some retail is good. And employment growth is good. Thats maybe not enough for some to be able to handle a rate hike. I think it is. You think it is . Yes. You are expecting what are we talking here, the 20th and 21st meeting of september. And i think its worth while because right now we last time we got british pmi it was extraordinary. It was 53. The exogenous events by nature are surprises, but right now, if youre janet yellen and see a very good number on friday, sigh i see no reason why not to. Pmi, china, august official manufacturing pmi up to 50. 4. That was a bit ahead of consensus. Yes. And expansionary territory, First Time Since october 14. I regard it as very significant. Again, i dont want to see any collapse. Hong kong stock markets been very hot. China remember last year, at this time, we were thinking that its china when we 75 . When a great deal of focus and we saw august last year, of course, reflect that in the markets. But on what was declining growth or concerns about it and a lot of other things that came along with it, that played out through the year. There are continuing concerns, though, about capital flight from the country as they manage the currency down. But i also would say that the companies i deal with in china are seeing a little better, depending on the autos were pretty good, but there was a change in taxes that made the autos good. Yum is seeing business over there. I dont see a turn in the big Capital Equipment businesses that were all used to. I think that honeywell is doing okay. Honeywell is doing well in china. Right. I still dont see owe tus elevator a big business for United Technology doing well. The steel stocks are doing well. Why . Because weve blocked chinese steel. No steel coming from china or korea since we put in the tariffs. So its a mixed picture, china, but last year was a bad picture. Mixed better than bad. Has to do with expectations, obviously. September has typically been the weakest month of the year. Yeah. For the s p 500. And a lot of that is bizarrely a fear of october. Even though october is no at bad month historically. There are individual months down 56 of the time since 1928. Down 1 since 1890s. Now, thats des positive enough to believe it. I usually dont like these things as january goes. Its des positive. One of the reasons is, that the market has been good and people do take profits, but we are not in a position right now where you can just say across the board things are good and that causes people to worry. And i think salesforce were going to have to dwell on it today. Salesforce says that business in july was weaker in the u. S. But they didnt say it was their own marc benioff said its our fault but at the same time who is prepared for that. Were going to get to that fact. I was shocked. I have to tell you, i was shocked only because their execution is usually so superb. We will hear from your interview from him and discuss it. Now look, [ inaudible ] Bargain Store was good. It was sfo replaced tractor supply. Alis Bargain Store. How do you spell ollie. Ollie. Not like the champ. The push cart model. The jet. Com model of algorithm and good Old Fashioned they couldnt sell it ollies and run the circulars. The trading or Something Like that. That was part of my family that owned it. Was it really. Well my grandfather had a push cart. Really have to go there if you want to. I do think that when you have to go down that food chain and look at five below versus ollies, ollies good, five below bad. Dollar general bad, dollar tree bad, walmart good. Its a mixed picture. Mixed picture in september means down a little bit. We need okay. Mixed enough to good that you think the fed will be one of the many different data points they look at to say things are strong enough. Right. And i on retail. That would be a reason to go down 1 as we did when somehow we werent ready for december. In december we had oil not stable. The big conundrum for me, 2. 2. 1 billion oils in storage in the United States. Thats a lot of oil. And we have a lot of tanks. That is not sustainable at 44. Its not. Thats it cant it cant stay there. Now i know the saudis have a deal coming up, theres but saudis are pumping like mad. Saudis at the highest production theyve been. I dont know where this is going. Where are they . Almost 11, 10 point were in the 9s . But we imported 8. 9 and were dropping a little bit. Imported 8. 9 Million Barrels a day. No place to put this stuff. And all the places that we refine and sent to, theyre all filled up. Everybody. All our eastern refineries, traditionally we send overseas, no one wants our gasoline either. The great conundrum of the market how can we say at 44 when we have no room to put oil. The market in the past where you and i have sat here and said its about oil and the market will go down, despite the dividends paid to u. S. Consumerses. Turned out to be somewhat from visa and mastercard, overstated in terms of what we thought would happen. It was. Some of the restaurants felt they got a little bit of a windfall but thats gone away. The Restaurant Group is weak. It is. A lot was even though kind of a conundrum. A year ago we sat here for some time wondering what was happening to the money, saved or spent . A huge number weve been dealing with for quite some time in terms of the difference in gasoline prices now versus call it two years ago. Were not used to rationality. The money is being saved but Credit Availability is growing. Good numbers from st. Louis fed showing credit vulnerable. Easier to get a loan than a year ago with a fico of 700. Credit cards charging again. The apple story in terms of the eu keeps going on. A lot to talk about in apple. Next week it will be back to the actual businesses of wireless phones, but tim cook sounding off to irish media about the eus 14. 5 billion tax penalty against the company in a newspaper interview with the irish independent, cook called the eus ruling total political crap. Heres what cook told irish broadcaster rte about the eu penalty. Its maddening. Its maddening, its disappointing, its clear that this comes from a political place. It has no basis in fact or in law, and unfortunately, one of those things we have to work through. Cook said apple expects to repatriate billions of global profits to the u. S. Next year. Thats an interesting story. As our viewers well know, 215 billion in cash and other lic d liquidity investments are held offshore. The number is absurd. Hes been waiting for the tax holiday so many other corporations have been waiting for examito come back. Maybe get Corporate Tax reform with the new administration in the early days of the Administration Next year. I thought thats what he was betting on is a Clinton Presidency and some sort of like a agreement. Or a trump presidency. Or a trump presidency. Talking about 10 . Mr. Pena nieto put up that wall. A little different from reagan and gorbachev. Wilfred frost i enjoyed the Worldwide Exchange show is fabulous. Yes. Really is a lot of fun for seven minutes of their rivals are seven minutes. Okay. But wilfred did point out that total crap, he is not allowed to say the word crap in the uk. So we think thats a word we can get away with but a word apparently a George Carlin i did not know that. I thought that was standards, allowed to say things were not allowed to say. I listened to wilfred and he made that clear in about 80 seconds of the show. Are we going to stop talking about this next week when we see the 7 and i know maybe youve got an invite now, i dont know if youre going to go sflo they sent me an invite. Hopefully youre not going. You just want to get an invite. Its rsvp. Im jammed on the show. I do point out that yes, we will not be talking about this because its protracted and because meanwhile a story in the wall street journal about apple cutting prices from or cutting its suppliers down in terms of their pricing. And volumes. Well, theyre all subject to being squeezed. Youre talking about pitting skyworks and corvo. Its at same group of companies you always have to say well have they diversified. One of the reasons i like both broadcom, and why i like nxp my travel trust owns that they saw it coming and x p moved into autos, number one semi in autos and procom moved into 3g into 5g actual communications. 5g. 5g . Qualcomm so far ahead. 5g theyre like ready. Wow. Why do you think that stock goes up and hits new highs all the time. Thats just done because its a houdini thing, david blaine, david blaine ceo. No. Go visit his grave. Not that far from here. That is true . Yeah. When we return salesforces guidance weighing on the stock this morning. You heard jim talking about it. Hear what mark ben kneeoff told jim on mad money. A lot more from post nine when we come back. [announcer] is it a force of nature . Or a sales event . The summer of audi sales event is here. Get up to a 5,000 bonus on select audi models. I we worked with pg eof to save energy because wenie. Wanted to help the school. They would put these signs on the door to let the teacher know you didnt cut off the light. The teachers, they would call us the energy patrol. So they would be like, here they come, turn off your lights those three young ladies were teaching the whole school about energy efficiency. We actually saved 50,000. And thats just one school, two semesters, three girls. Together, were building a better california. Salesforce. Com moving lower in the premarket. The Cloud Software company issuing Current Quarter guidance short of street estimates overshadowing a better than expected Second Quarter. Marc benioff spoke about salesforces numbers and outlook. You saw the m a activity that we have done this quarter. That, of course, has weighted on our numbers and yet, of course, we are delivering these great quarterly numbers. Number two, we did have the Foreign Exchange situation that we just talked about and number three, we did see a bit of softness in the United States at the very end of the Second Quarter and these three things together really are kind of what is giving us, i would say, an appropriate conservative view for the third and fourth quarter. All right. Jim, you know Things Company well. You know mr. Benioff well. Fx and seemingly things falling off at the Second Quarter. What do we make of it. Fx they roll their currency into britain. Compound 150 million hit because of the pound shortness. Now, pound decline. So that was to use the word brutal was interesting. Soften, i was kind of to hear softness. The word softness. And in the Conference Call they are talking about basically weakness is the word they used in the Conference Call, keith block, copresident , talked about how a section of july was weak. Im giving marc the benefit of the doubt and face value. Why . Because he didnt lower the year revenue. Right. Third time hes raised. More importantly he did spell out his own execution, and its rare for a ceo to say listen we didnt execute well. Typically what they would say is the environment got tough. He did not say the environment got tough or price competition, but david, it is highly unusual for a high multiple stock to be able to withstand any onslaught if the company does come out and say they had execution risk. I do not know they bought demand ware that mattered and quips. Take their eye off the ball, you cant tell. I know this happened a couple years maybe half dozen an years ago about four years ago and the stock came right back. I am saying that i think that this is going to be made up, that dont forget dream force is starting in october. Introduce this einstein product. I feel salesforce explained it. Analysts were saying there was no clarity. I thought the clarity was there, that we didnt do that good of a job. We are not used to hearing executives say that. They typically do not have execution issues. As a matter of fact, i think theyre the most flawless of all tech. Looking at notes from the research community, been some time since they have had an execution issue so this came as a surprise. It was a surprise. This is a company that fires on all 12 cylindsilcylinders like , not the 750. The verticals are good. I think that the can customer wins are good. A lot of talk about United Health doing good. Big wins. But the fact is that i think people are saying, did marc benioff take his eye off the ball and i would say everyone is entitled do we pull joe dimaggio from the lineup in the 57th game he didnt get a hit. This is one where you give him the benefit of the doubt. Theyve delivered. And they were very candid and straight forward and did not blame the economic environment. They blamed themselves. Had they blamed the economic environment i would have had to call them on that. Ive seen strength, not weakness, since july. Well talk more about salesforce and perhaps m a as well. To ford auto sales with phil lebeau in chicago. Phil . Hi, david. Ford coming in with an august auto sales decline of 8. 4 . Thats a little bit better than the estimate from edmonds. Com which was forecasting a decline of 9. 8 . Keep in mind, the august auto sales are in comparison with august of last year and it was a huge august last year. So almost all of the automakers are going to be showing some type of a decline for ford the retail sales were down 8 . When you look at trucks which have been in demand the most, the decline is looking about 1 to 2 . So overall, not terrible, not great, but its what we expected with august this year. Comparison with august of last year which was huge. Remember, guys, the sales rate what is everybody is focused on and the sales rate is likely to come in somewhere in that 17. 2, 17. 3 million range. Down compared to last year, but any time youre over 17 million i think most will say well take it. Get gm in about ten minutes. All right. Phil, well see you then in ten minutes with gms auto sales. Up next, jims mad dash to the opening to as we count down to the opening bell. Take a look at futures. As we are about ten minutes away from that open here. More squawk on the street coming right ahead. Hey gary, whatd you got here . This bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade this car is traveling over 200 miles per hour. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. Seven minutes before we get started trading here at the nyse and, obviously, on all exchange you want to talk Campbell Soup in the mad dash. They reported earnings. Mea culpa 24 hours. My ceo on the fly reinventing this company trying to become more naturally organic writes in the release, the decline the surprise in 46 cents versus 50 that were looking for. Why, driven predominantly by execution issues is disappointing up top. She takes the blame. I like that. Decline in organic sales. I dont like 1 decline. Still expects to do 0 to 1 . People hear the numbers and think benioff is apologetic about a plus 25 growth. The fact you have to deliver some organic growth if youre in the food business. Declines in carrot and carrot ingredients. Snacks and simple meals and beverages, delivering significant margin expansion. Wasnt all bad. Did boost the dividend but david, this is a stock that had a great run as they converted the company into more natural and organic. People are finding over and over again Natural Organic isnt so simp