"ponzimonium" where we get a lot of the "american greed" stuff. >> this is an area that cannot be solved with regulation, and people need to be vigilant and aware. >> yes. >> and there are laws when people violate it, but people need to be aware even if they are your friends, and et cetera, and you should not invest unless you check it out. >> thank you, bart, for being here, and join us tomorrow. "squawk on the street" begins right now. thank you, bart. and than you, mikayla. ♪ i know you want to have some fun ♪ >> that is the way to start the sh show. i'm carl quintanilla, and david faber and cramer is off this morning. after the dow's first three-day losing streak of the year, we are seeing a wave of selling off in the world. the japan nikkei in officially bear territory, and slicing right through the dollar at 95, and the damage in the u.s.

appears relatively limited at the moment, futures are improved for much of the morning and the jobless claims were good and so were retail sales. as for europe, you see the red arrows, a nnd we will see if th turn green. italy turned around a few hours ago. despite the sell-off overseas, goldman is still betting on the u.s. acceleration, and we will break it down and what it means to your investments. >> and the company that brought you perfumes from katy perry and beyonce is going public to dday and jcpenneys is giving a vote of confidence for the ceo, and we will find out what they told cramer on "mad money." . >> we will be live on the ground with a lot of details of a lot of wet. >> and futures moving up slightly after the slide in the nikkei, and the decline following yesterday's 127-point

drop in the dow marking the blue chip's first losing streak since december. bright spots in the data that claims fell to 12k compared to expecttations of 350 and the retail sales were better than expected up 0.6, and led by the b better than projected auto sales, but the big story is the reaction to japan. so dramatic overnight and blame assigned to the b.o.j. and they were they committed enough in the rhetoric and what we saw them waivering in the minutes, and are they in control? >> the fact that we have better than expected data is part of the problem, with the repricing in the global indexing by the u.s., and stronger fundamentals in the u.s. better than expected and it is shaking out a lot of the trades that were previously in place. so while we are getting better data and part of the reason that the markets are holding up today, no one should have expected that we are out of the woods if you are in the other

80% of global gdp. >> well, a tough environment regardless of where you want to make the investments dollar/yen or try to buy gold here which is not moving, dealing with the commodities and/or of course the equity markets and the bond market which both of them are losers right now. interestingly yesterday we watched the bonds decline precipitously, and the markets have not had a big move any way up in some time, and so it is difficult out there. the reaction of the investors when faced with a market across the board like this is to pull back on the risk. i won't say the words risk -- you know what -- but that is what is happening. >> and the doushgs yesterday 100 points up, and 100 points down on the dow in the same day which has happened two times in the same three weeks and last year it happened once in the entire year so that the level of chop as traders like to call it is accelerating. >> and here is to give you a sense of the kind of commentary that we are getting this morning

as people step back for a moment to consider some of to borrow david's phrase, the tech on tto changes, the markets overnight say that one has to ask if this is rapidly a period of outright capital destruction fueled by the same deluge of the central bank liquidity that had offered support for the risk asset, and so it is a difficult situation for the central bank that had led us to this point. >> we don't appear to bel fol e following the nikkei at least percentage-wise, but coming off of the lows in the futures afterf a 6.4 decline index in the bear territory and then the dollar is falling against the yen back to levels that were more or less where it was prior to the advent of mr. aube and the aggressive policies. >> dow jones futures are down five. and with that we bring in the ceo of deutsche bank wealth

management and david, why extreme blood letting in tokyo, and why is that not happening here? >> well, i think that in japan, what you have to remember that we saw the nikkei go up by 75% within less than a year, so seeing a big correctional in an enormous move like that is not surprisi surprising. equally with the yen, we went from 75 yen to the dollar to over 100 yen to the dollar, and again, backing off, but it just went too far. i think that for the u.s. investors the key thing is to recognize that what happens over japan probably isn't that important for the u.s. economy, and i think that when the markets get crazy, you need to look at the market fundamentals. >> well, on, so, you don't believe that -- i mean s there a level at which the volatility on the nikkei would affect us here? a lot of people last night watching what was happening in the opening over there, assuming that today would be a rough day. >> well, it does add to uncertainty, but if you look at the for example the economic

nu numbers this morning, the retail sales up 0.6, and retail prices down 0.6, so some real consumption growth, and that is positive, and unemployment gains, and that is positive, and so you have to focus on the fundamentals and japan is adding to the uncertainty which always exists, and the fundamentals should push the market higher as the year goes on. >> josh, david's point to what goldman is looking at and the obviously, the worries are shifting, but their call for acceleration in the u.s. at least being led by the u.s. has changed the data today, and that would sort of back that up. is that where your view is? >> yes, i agree. i think that ultimately the outlook for the u.s. is going to be made in the u.s. and not japan. encouraging thing for th u.s. is that the economy is holding up despite the tax hikes

and the employment drags, but to be sure the economy is underlying fundamentally to the economy, and the headwinds that are holding us back with the credit releveraging. >> josh, here in the u.s., we might be relatively insulated, but it is suggesting that the situation in which we are looking, people are going to bring the capital back home, and mean some trouble for the emerging markets and trouble for japan, and frankly, we are kind of stuck in this almost negative feedback loop at this point. >> well, yeah, some of the data coming out of the emerging market, china in particular soft, and japan is volatile, and they were up so much in the stock market that some correction is understandable, and the same thing with the yen. ultimately though the b.o.j. will have to be more supportive and aggressive and we will see

if they are. the new leadership there is committed to the program, and when we see if they backdoor us with more actions. >> josh, what about the federal reserve? so it is seeing now the impact that this is perhaps going to have to exit in the next couple of meetings, but the data is falling in line with that kind of view, and if you look around the world and see the impact that this is having. so, you know, if you are bernanke, what do you do here? >> well, they will tread carefully, and they are not in any great sense of urgency to exit quickly. they will want to see more confirmation in the data that the economy is picking up and past the fiscal drag and all that, and when they start maybe later in the year to scaling back the pace, they will move tentatively and slowly and remind the markets to keep the short rates low for a long time, and really going to try to guard against a market overreaction. but ultimate li shly, if the ec is strong enough to allow the

fed to start scaling back, that is actually a good thing for markets. i mean, if we look a year from now, and say, suppose that the fed has not stopped or slowed the pace, that is because the economy has disappointed, and that would be not good news for the risk assets. >> david, a lot of people believe with the fed meeting next week that the next move has to be to back up the notion that tapering is not a near term phenomenon and do you believe that is what they are going to say? >> well shgs, i think that they going to be hesitant to announce any tapering of the way to do it, but the pressure on the u.s. e k economy as the unemployment rate comes down and lit tend to come down even with the slow job growth, and that is going to push them towards tapering and the bigger the balance sheet gets the more difficult to eventually raise interest rates and it is going to be able to raise the balance sheet and to dismantle it and logic pushes toward tapering and the one thing warning investors about is that you cannot remove $1 trillion from the market

quietly. if you are taking that much money out of the bond market, sgoiting to push the markets higher. >> and do you think that kor owe na and ave need to come back to say, we are kidding and thought we were done in some aspects of the plan? >> no, i think that what they should do is to try to get the japanese people to focus less on the yen and the nikkei and focus much more on the structural reforms. that is really what japan has to do if they can have a program of long-term structural reform which they get the japanese people to sign on to, that gives them the best chance of getting to the sort of philosophy that they need in japan. if i were going to try in japan, i would try to take the attention off of the yen and the nikkei and focus it more on what they need to do to fix the economy in the long run. >> good luck with that. david and josh, thank you so much. we will see you later. >> thank you. >> thank you. >> at about $1 billion, it is one of the biggest u.s. public initial offerings done by a

consumer products ever. coty includes calvin klein and mark jacobs and beyonce going public today, pricing more than 57 million shares at $17.50 apiece in the middle of the expected range. the ticker symbol by the way is c-o-t-y, and this is a name that came to some prominence or some people became knowledgeable of it when it made a bid for avon and that did not work out, and now we have a market value around 6$6.5 billion i believe. and not a lot of growth which is interesting. very curious to see how it trades in the aftermarket. europe is a key component of it, but the growth story is based, as so many are, on the emerging marketses and what they can do in the developing countries, and they are around the floor here spritzing people with perfume. >> there are giant perfume bottles and lipstick tubes down here, and in retrospect, how is the attempt to buy them a couple of years ago and the fact that the acquisition of avon didn't

work out work out for both companies? >> well, avon is reshuffling the executive ranks and seems to have stabilize which is borne out if you take a look, and i have not looked at a them in a few weeks, but taking a look, it is better off than it was a at that point. there it is. thank you. i asked, and it appeared. and you know, coty is that it can go public any point, and this is the rieman family wanting more liquidity, and they are behind bankhizer, and this is a simply selling shareholder wanting to exit via tub p lick markets and hence a public compa company. >> they have been around for 108 years. >> wow. >> and of course, make the beyonce perform, and sally hanson nails. >> and vera wang. >> yes. >> and is she going to be here today? >> well, maybe up there doing the bell. >> a sighting of her as well.

but to the larger point, it is a good year for the ipos. >> what do you mean a good year for the ipos in terms of the performance or the numbers, because it seems -- >> total number, and many have priced above the expected range. >> this is the third biggest u.s. ipo in the year, and this is a big deal. >> this one a big deal, but people are saying thatty, po market is so strong and i am like, are what are you talking about? have i missed something? >> you are talking about the level of issuance and not for t forgetting the level of performance from the ipos and we have seen a lot of companies going public, and so it is a strong year for that. that gets back to capital market s activity and banking activity for the investment banks. >> well, a lot of the private equity guys trying to get the money out. >> yes, and then you get to performance which is good, carl. >> and yes, a lot of issues in the green since their original trade. this is interesting, dual class ownership which raises a couple of eyebrows, and of course, the growth in europe that you point to, david. and there are some trouble spots

in the world no doubt. >> i am glad you raised it as well, because this company is run by the rieman family and bankhizer, and you don't get control at all with a stock. >> and i wished we were doing smell-a-vision, because the perfume is amazing. >> some of the ladies spritz in it out are quite -- sorry. >> and when we come back, some will the summer travel trends speed up expedia's business and we will talk to the ceo. >> and also, steve case, the former aol ceo talking about immigration reform and a lot of issues. looking at futures after a rough overnight, and close to the flat line today, and a lot of "squawk on the street" after the post of the nyse when we return. there is a pursuit we all share. a better life for your family,

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looking at weather in the philadelphia area has halted play at the u.s. open tou tournament, and the mid-atlantic and the northeast here are bracing for a massive storm coming in from the midwest. let's get the latest from weather channel meteorologist carl parker. carl, how bad is it? >> well, we are getting the severe storms coming in from the philly metro area, but we expect

another round later today and they could be strong from southward d.c. to i-95. looking at the philly metro, you can see the storm warning and notice the curvature to the return and that is a bow echo or or a small one and we have potential or the damaging winds, and that bright green is where the winds are above 60 miles per hour, a few thousand feet up coming into the west side of the philly metro, and look at the lightning with this particular line segment which is also now coming into the heart of philly. it is going to be tough there for the next hour or so, and further southward, one of the warnings in the baltimore area, and baltimore city, and watching for damaging wind coming over into the chesapeake bay. more cells in the d.c. metro, but no warnings on those right now. i want to show you quickly, the larger picture. you can see how there is a large area of wet weather here, and things will clear out here this afternoon and then we will find

more storms across the 95 corridor and severe warnings in the cincinnati metro until 9:30. david, back to you. >> thank you. wet weather out there, and in fact, that is having an impact on dupont, we should point out. the company saying it is going to come in at the low end of the guidance and presenting at an investment conference and so put a press release out at reg fd responsibilities for example and says that march to may has been the wettest spring in 120 years across the farm belt states of iowa and indiana and as a result of the unseasonably cool weather, it sees the first quarter eps down from last year's year over year that it last communicated to us at the end of april. so we will keep an eye on the shares of dupont which will see in the agriculture part of the business less business than anticipated. >> and do you punish the investors for that or not and that is the only deal news,

well, not the only deal news, but corporate news we should say. >> yes, we have to keep eyes on the shares of belo and gannet. we are not seeing gannet stock going up as much as the belo deal, but we spoke about it on "squawk box" but it is a first deal of the consolidation of pl players who own a lot of television stations, but the key is buying i 9.4 times, and ebitda, you know i love that, when you add in the synergies the multiplier is five times and that is why gannet is up to almost the company it is acquiring. >> it is going to double the station cap, and in 25 of the biggest markets and make them the biggest cbs affiliate and already the biggest nbc affiliate, and for gannett it is half of ebitda. >> yes. it is declining.

and the key for the stations is retransmission dollars which have gone up enormously, and the cable companies are paying you to carry their signal, and they are paying them. >> that is why it is going to be fascinating to talk to ario today. >> yes, and coty's billion dollar beauty products going b public today. one more look at the futures and start it off here on a thursday morning in a few moments. >> i must say i'm amazed. >> yes, darling. out there owning it. the ones getting involved and staying engaged.

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less than ten minutes the go before the opening bell following the first three-day sell-off of the year. let's bring this the cash and floor operator, art, perhaps people are surprised we are not looking weaker, and the dow is turning positive iffen just a little bit. >> well, it is looking better and if you had gone to sleep late last night and saw what hauz happening in japan and elsewhere, you would have thought a real crisis, but a couple of things in the afterhours market. the s&p and a few others seemed to have held in technical support and did not violate the 1598 which held us up pretty well, and the other thing is

that for a couple of weeks now the market has been set by a tag team. we have had the yield on the 10-year alternating with the worries about the carry trade blowing up. you don't have the worry about the yield on the 10-year this morning, and secondarily, the yen is behaving and even given what is happening in tokyo, and behaving adequately well. those are for the minute off of the table, and you have got slightly better economic data this morning. >> what is going on? i mean -- >> what is going on here in terms of the unwind that is seeming to take place across so many asset classes, and can we expect it to continue? can we see risk added the same way we see it going down? >> well, everybody in the hedge fund and their sibling got into the carry trade when abinommics came along, they decided to short the yen and buy the nikkei

and take whatever excess we have. >> three months. >> and the cash registers were ringing like crazy, and now all of the sudden with the kickback in the yen, that's like a margin call for them. so the old story that we remember from 2008 and 2009, when you can't sell what you want, you sell whatever you can. that is why some of the risk off that you ruck talking about david, has occurred. >> i am listening to everything that you say art cashin, but vera wang is on the floor, and at least some ladies are distracted. >> well, i see that you have your priorities in other places. >> well, thank you, art cashin. >> and vera wang will help to ring the bell for coty. what do calvin klein and lady gaga have in common? they are both brands under coty. we will see how this ipo trades in a few minutes. ♪ baby i was born this way

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[ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. bell of course a few seconds away. we will get you a look at the rest of the day's news this morning. the floor is kind of crowded and a lot of fans of coty here

awaiting the opening bell, and beauty products coty celebrating the ipo today at the nyse. a lot of activity. we will see how it opens in a few minutes. and the nasdaq celebrating today. there you will see vera wang at the balcony there, guys. a designer who, kelly, you could argue has not only like reached a zietgeist point in her career. >> yes sh, growing up i idolize vera wang. >> really? >> yes, vaer rivea -- vera wang! and the fact that she is up here looking around and the crowds and the people here to see her as much as anything. >> and there are people who bought a vera wang wedding dress in 1992 which is a long time

ago. >> yes. >> and of course, the values of the company at $6.7 billion and raises $1 billion and flirted with going public a couple of years ago, david. >> last summer, i reported they were planning on it, and then given what was going on in the overall markets they pulled back. this is later than expected. a lot of the bankers were lined up for an offering. >> and look at the timing today, unfortunate for them given what is happening in the overnight markets, but the coty ipo perhaps trying to come in when the markets are topping out at the time being. we are holding and doing okay after the three-day losing stretch and volatile session overnight. >> and the records are meant to be broken and we have broken the tuesday streak, and the no three-day in a row down streak, and even with the nikkei overnight which is the equivalent of 950 dow points, 6% in tokyo, and the losses there, but clearly not having much o r overan effect on the stateside, and down a point on the doushgs and s&p is down less than one

point. keeping an eye, david on belo, and gannett. >> and i have rarely seen anything like gannete,t, and th iscompanies, and if you look at the shares of eci, if given the response from the investor base, and if you can see a company running out -- looking at vera wang and the ceo of coty and any company that can make a similar acquisition will do so when you can add 28% to the market value, as we are watching with gannett off of the belo deal. >> you see the head of coty and vera wang. when is the last time we saw a designer, and make michael kors is the last time that a designer made this big of a --

>> look at the performance and the core stock has done, and looking at the ipo doing well here, and this is a big test as well, and first consumer discretionary here, and the third biggest year-to-date for the u.s. so it is important to see when it finally opens where it actually does. >> and of course, david, we remember the run at avon, and how that ended. you might say that this is just desserts here for certain parties, right? >> yeah. yes. you might. you know, it is funny, because i am looking at avon as well which has had a decent run of things as we pointed out and when they came after it, it was at the lows, and brazil was a real problem for the company which it does seem to have at least been resolvi resolving, and you don't have the leadership there, and the board composition has changed at avon which is a key competitor for coty and the multiples include estee lauder as perhaps one of the best operator. >> well, looking at a it yesterday in a flat tape down almost a full point, .75 of a

point, a nd we will keep an eye into names in the space, and this is the biggest consumer products ipo of the year. >> and this is with the fiscal year ended june 30th, anding out the one-time items profit of $350 million, and in 2011, it was $60 million on $4 million investment. this is a fundamental consumer products company. is it going to have the kind of story and earnings trajectory that earnings investors like. >> well, they will try to sell a growth story when it comes to the developing markets. i want to point out safeway here, because we have not talked about it this morning, and sorry about that, and let us tell you why it is up, and up sharply. they do sell their canadian operations for $4.9 billion for cash to empire company. that is the parent of canada's second largest grocery chain. you can see that safeway's

shares are dramatically higher this morning on the fairly large deal. here we are on a wednesday with two deals. yesterday, we had another one that being cooper tire. i should point out that apollo tyre, the indian company is down sharply and in 20% decline. >> wow, 20%. >> and we are seeing the deals in the middle of the weeks, and, you know, i pointed it out yesterday, and maybe it is a peculiar thing, but the boards are not feeling a rush. they have a lot of questions. they are very involved. that is what i am hearing from the lawyers in the board rooms, and you say, hey, we want to get it announced for sun daday nighr monday morning, and the boards are saying, forget it. >> and the markets are desperate and saying to get it out. >> no, i am saying why we are getting deals in the middle of the week. usually people like to line them up for monday morning and that is not happening anymore and a lot of deals are being announced on thursday. >> and of course, manny tirico

on with krcramer last night, an the company gets a 191 beating the 135 estimate and blowing it away. and the revenue roughly in line, and the increased sales out of tommy hilfiger, and calvin klein, and the stocks are doing well, and if cramer were here, he would be mentioning this without a doubt. >> and they are being rewarded to the extent to the beat that was nongap which we understand there was an acquisition that played into it, but the revenue number if anything was shy. gross margins were better, and the europe performance was better, but surprising if you could say that the stock has done this well in response the that result. >> and going over to our own fashion magnate on the floor, and that is bob pisani. bob? >> i was just talking to vera wang and she is excited to be here and lovely looking woman, and of course, tremendous success. the point about coty here is waiting. there is a lot of demand here, and $17.50 or $17.60, and remember what is going on here,

cloud computing hot, and now we have an iconic consumer brand name, and so in a way this is a play on consumer confidence and reviving the consumer confidence and how people feel about that. this year the market has been friendly for the ipos and david had a point that you need the wind at your back with the ipos, because they are always playing a catchup game, and what does the market think? what does the investing public think? that is always related to the stock market. the demand was strong, and if we had a little less volatility in the stock market, we have a stronger opening, and it has not opened and it is $17.50 and $17.60, and david, you were talking about the ipos and you were right, but you are usually right about the number of ipos this year, and putting up the screen, 80 ipos this year, and better than last year when in 2012 we had 78, but in june, four ipos and only four ipos in june of last year, so already, the same number as last year. the registrations are heating up. a lot of othem are coming public, so this is going to be a

much better year overall for the first half of the year. in terms of where it has been and david, you asked the question how many are trading above the initial price. 71% are trading above the initial price. that is a good number. historically, that is much higher and the average gain so far has been 22%. those are very good numbers and market-friendly numbers for the ipo. let me turn to the stock market, and down fractionally for the doushgs and you know what happened in japan and europe, and the u.s. economic data and the futures jumped on that, and better numbers on the jobless claims and barkley upped the the second quarter gdp number from 1.8% to 1.1% to the better than retail sales numbers and what does the june numbers look like overall, and remember, consumer consent supporting the market, and the fed supporting the consumer market here, and with the iffy side, and it will be interesting to see what happens on the consumer sentiment numbers and coty here 1750 to 1760, and of course, we will let

you know as we get closer to the opening. >> thank you, bob. perfect. interesting, there because i was trying to pooh pooh the ipo market, but he is pointing out that 71% are trading above the average price, and the average gaining 22%, so not terrible. let's head over to the nasdaq and check in. how are you over there? >> well, a lot of focus on the japanese market, and the yen impacts a lot of the corporations, and the tech names make a sig nnificant amount of revenue in japan. looking at the full screen, and ibm generating more than $10 billion in 2012 and intel with 4 $4.4 billion and a mixed picture on how the stocks are trading a. check on the nasdaq and lower by 11 points which is, i think, surprising for the traders given the volatility overseas and apple is in focus today as well. and reuters reporting that apple could unveil cheaper models of the iphone next year, and apple is expected to incorporate fingerprint technology in a version of the new phone. with apple unveiling the new

phones next year, that is behind blackberry which is expected to reveal the lower priced phones this summer. speaking of blackberry, overall ugrading of the stock citing better than expected sales. you can see that stock up 2.5% in today's trade. carl, back to you. >> thank you, seema. over to the bond pits, and rick santelli with the cme group. >> hello, carl. unbelievable markets. i am sure you are getting texts in the wee hours of the morning and in chicago, we are yawning between monitoring what is going on with the nikkei and the dollar/yen and the hawks, and we could not keep up with it. as you look at the the intraday and the 10-years and the 210, we are firm in raterates, but the mome momentum started to dip. the close yesterday at 223 and the high yield close was significant level and we have talked about it for many days. if you look at the 10-year jbj,

this is fascinating, because i would have suspected ongoing volati volatility in the sovereign market, but not really, because the volatility has been relegated to the stock market and the mex market. if you look at the dollar/yen or the euro/yen and open up the charts, we are coming about the same, and the major breaches were 111 and the other breaches were 130 and for us, it is 100, and now 94 handle. but what is fascinating and everybody likes to monitor the commodity currency and the markets that have to do with the liquidity, and all of the issues like mexico, and like the australian dollar, we are basically on the aussie dollar versus the yen, and that currently is ready to challenge the lows of the year right now against the yen. david, back to you. >> thank you very much, rick santel santelli. i did want to hit on a store i are we are following here.

looks like royalty farm's attempt to acquire lawn and you remember the pitch battle going on is going to fail. it is not guaranteed at this point, but let me explain what is a complicated situation today or i should say as of monday, the shareholders of elan will have voted on four proposals for the company that it is pursuing. that is deals led by the theravance realty item and also a stock buyback of $200 million. and what seems to be a miscalculation on the part, made all four of those a condition to the deal. and in other words, the shareholders have the vote down all four of those deals and the share buy-back included as well in order for it to proceed. the irish panel said that you have to stick with that when they tried to pull back one of those being the share repurch e repurchase, and even that in fact, if it is voted for by elan shareholders, then they are gone for at least a year, that being

royalty pharma. now given that 80% of this is in american depository shares, you have until 3:00 p.m. to vote. on a press release coming out this morning, by royalty pharma, they are going to lose, and hence the deal is going to be gone. interesting to note that at $200 million buyback may end an $8 billion deal. if you recall royalty pharma raised the bid to $13 a share an contingent value right based on the royalties that come to elan from tysavry and it is complicated, but what is important is the tactics. it does not seem that royalty's tactics are shrewd based on whether they will go for the 0 $200 million share scramble. it does not look likely at this point for the shareholders, but

if it does not happen, they will go away once again and that is why, carl, we are watching the elan shares in retreat not just today but also yesterday. getting the right advice and doing the right thing in an contested mna situation can be important. >> and the saga that that has been. >> indeed. >> we will take a break here as we watch vera wang and others awaiting the opening price of coty. will it be a thing of beauty? that big trade is moments a wwa. don't go anywhere. [ male announcer ] it's intuitive and customizable, just like a tablet. so easy to use, it won a best of ces award from cnet. and it comes inside this beautifully crafted carrying case.

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all right. we are awaiting the opening trade of coty a few moments a wway we are told, but in the meantime, we are going to go to sharon epperson for an update on the energy complex. sharon? >> we are starting out with gold price prices. we are looking at many commodities under pressure here, and of course what we saw overnight with japan and the sell-off there has a riskoff sentiment across the board in many commodities and gold prices impacted by the jobless claims da ta that we got that is better than expected so weakness here in the gold market. also, we are keeping an eye on the oil complex where we are

seeing a mixed market here for crude oil and ample supplies of crude oil in the united states, and one of the factors pressuring the wti prices and brent crude with concerns of the tra traders in the north sea and one of the reasons that we are seeing the support in brent crude, but hardest hit is natural gas and of course, we are keeping an eye on natural gas as the stores report from the energy department is out at 10:00 a.m. and we will bring you the numbers live. carl, back to you. >> thank you so much, sharon. keeping an eye on coty today and it is the polar opposite of gigamon yesterday where the revenues are growing 40%, and this is more of the 3% to 4% story over the next few years and a company been around a long time in a space that everybody understands, but we will see how the market perceives this versus something like gigamon yesterday. bob pisani on the floor helping us out today. >> the crowd over here and the ceo vera wang over here all waiting around $17.50, and

$17.60, and a good point yesterday about gigamon. gigamon was about cloud computing and data manipulation or helping the companies to understand data, but largely cloud-based computing and the magic word that applies for this year. and remember that we have interesting biotech stocks and big names next week. here is an iconic consumer brand name and a lot of it depends on the consumer confidence levels and of course how the stock market is doing. that is the major factor that is going on. still $17.50 right now, and that is the major issue going on now, and you are saying, a well iconic brand name known to everybody, and will it open in the middle of the range or pop? the market conditions are a major factor to prevent a notable pop here. and again, the ipos are playing catchup with the sentiment in the market, and that is a factor. so far year to date, it has been helpful for the markets to ipos and as i mentioned more ipos this year than last, and 71% of

them trading above their initial prices for last year. hold on one second. i believe that we are just about ready to go. they are trying to close the book right now so that the d designated market emamakers and people are trying to close the book, and this is a real action and he wants to close the book, and now people are wanting to put in more orders. they are going to open at a single price at a single block and find out what the total n b number of orders is. and of course, there are people waiting until the end, standing here with the final orders here, because they want to see where it is going. it is around $17.50, and not a final price, but it is sitting there, and the dmm is about ready to close the books. are we close? >> yes. >> and there is draw marks and people are still yelling. >> still people yelling. it is $17.50, it is looking like. $17.50 is where we are looking and they are getting the final, and i know it is a little bit of drama, but it is always -- hold on. he is raising the hand here, and this is the final sign here, and

vinnie, get over there to the des designated market maker, and he used to be called the specialist, but he is raising his hand and giving the signal to the crowd. opening at $17.50. there's the price. the dmm just opened the markets at the price $17.50 which is the middle of the range, and $16.50 to $18.50, and if you come over here, you will see the ceo over there, and vera wang further into the audience and vinnie a shot over there of vera saying hello the people. you see a lot of the shaking of the hands going on here. all right. guys, back to you. >> bob, bob? >> congratulations. big day for you. >> well, it broke syndicate bid and that is not good. that is not supposed to be that way, right? no, no. >> but isn't it? it is often the case when it sits right at the floor where it opens that things are -- >> wasn't it $17.50 and trading below that?

so anybody who got distributed an institution, great, guys. thanks. >> but wouldn't we rather see it than flatline like facebook and others when they first opened? >> no, you would rather see it go up a little bit and maintain $17.50 and/or bid higher. you don't need to see it scream. >> well, from the market fings point of view. >> well, coty did well or rieman family did well. >> good point. >> interesting trade. and the day is far from over, but my point is to some of the concerns that we raised in the beginning of the show, and some of the expose sure to the brazils and chinas and overall slow growth industry as well. >> we should add that it is not the case necessarily like we used to see with the ipo rounds in one and two, that it pops on the first day and keeps goingk, because some of them have been quietly gaining the momentum, and that is why they are not generating the headlines like they used to. >> and we will talk to the ceo of coty when we come back. don't go away. [ male announcer ] citi is over 200 years old.

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fresh from the opening bell, and its open as well. cnbc right here on cnbc, coty the maker of fragrances, cosmetics an skin products sharing the ipo and the shares are below where they were priced as you see it there breaking the

syndicate bid at priced $17.50. let's welcome in michaela skand vie -- skandav skandavini. >> i would say there is concern from the investors about the top line and the growth and the ability to put up significant growth given how much of the business comes from europe. so what is the strategy when it comes to revenue growth for coty? >> well, when you look at it for the last ten years, we have consistently outpaced the mafshgt in terms of the revenue growth, and our single objective is to keep growing in latin america than where we compete in terms of revenues. you opened it up as the market, but on the other side, the u.s. is doing well, and the emerging market is growing nicely, and we are confident -- >> where is the growth coming from?

emerging markets? solely focused on the emerging markets? >> say again. >> where is the growth coming from? >> from the emerging markets, but also from the u.s. the u.s. is growing pretty nicely, and i'm confident that it will take a while, but it is going to come back to a growth. now, maybe not huge, but system grow growth. >> some growth. >> how important, and so you have couple of main product lines and consumer lines, perfumes, nail polishes, and a lot of othem set up with a big name like beyonce and vera wang, and should we expect more of this from coty, and how important to sign up the designers, and it is expensive to work with them? >> look, the designer is the core of the fragrance business. over the last few years, we were able to attract very, very important names, and very proud of the portfolio we have today. looking forward, the portfolio is economic, and we keep looking at some opportunity to add some

names to the portfolio. it is a very profitable business for us, and that is important to get back to the awareness that the names bring to the fragrances. so it is a very nice business. >> we keep trying to get a read on the consumer, and it seems that the sweet spot for growth this year has been at the high end, and can you characterize the potential in the high end versus some of the low-end pricing? >> well, look, you are right. today, say for the last few quarters and the prestige part of the market grew faster, but it is not always the case. a few years ago, it was exactly the opposite. we have seen over time, it is very cycle. so we have a very good business in asia and elsewhere and to capture growth where growth materialized. >> are you disappointed that the stock is trading below where the original price is. >> i am happy that all of the 20

days which i have met so many investor, there was a high interest and such a involvement, and such an operation for the quarterly, that this is why we have today and i'm very, very optimistic for the future. >> this company came to our attention a year or so ago when coty made a bid for avon and you were not ceo at this point, because i remember having met with them. >> no. >> and is that a possibility again or acquisitions overall, and whether you would pursue a big one such as avon? is that something that you would consider? >> look, acquisition together with a nice or gganic developme has always been one of the important parts of the development. so we will keep on looking to opportunity. today, we believe that we have a very strong base based upon which to draw the business. so yes, opportunities to increase the competitiveness in certain segments of the market, but we are not thinking at this

moment to be transformational acquisition, and grow nice tloin base that we have established. >> next time you are on, can you bring gaga, katy perry, and beyonce? >> i thought it was enough. >> always something to look forward to it. thank you is much. >> let's get some business inventories with rick in chicago. rick? >> well, here we go. business inventories spot-on with expectations up 0.3 and last month had a subtle and almost significant revision are from unchanged to down one-tenth of one percent. and we know that they can have subtle variations of in terms of the gdp revisions. i don't know if this is all that important, because we are digesting better than expected retail number, but the digestion is continuing with the movement in the japanese markets. back to you. >> all right. rick, thank you very much. and when we come back, a view of asia with the nikkei slide into

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the street." what a morning it has been and only a half hour in, and japan now in bear territory closing down more than 6%, and the world bank is cult ing ting the globa forecast with the data here in the u.s. painting a brighter picture, and we will paint the picture with global strategiss.s and lloyd blankfein is looking to step aside, and we will see what they have to say. >> aeroa is up in arms and we will talk to the ceo. and is the summer storms hurting expedia. they have downgraded the outlook for the year. the ceo will join us exclusively. we will start again with asia. the nikkei selling off 6% more than 800 points overnight. it is officially in bear market territory now. joining us on the phone, victor, the head of the asian strategy

res research. victor good morning and late evening for you, and how seriously are people around the world taking the sell-off on the nikkei, and how worried about ramifications here in the u.s. as well? >> well, good evening. i do say that the fall of nikkei should not be overreacted. japan has been a known tactical market for 20 years and so it is moving up and down vigorously, the problem in japan is internal/external and fund slow. what we are seeing right now is that the investors are losing face in the ability of the government to inflate, and investors are losing the face in the ability of the private sectors in japan to recover. in the case of reflation, i don't believe there is any doubt that the government is committed, because it is the second area to look at, can the private sector in japan recover. >> and the more the yen

strengthens, the more that cloud darkens, so they are stuck in a little bit of a trap here. >> that's -- that is absolutely true. and there is of course, a trap in the bond market, and equity market as well. that is what it making it so difficult. for you u.s., you are surviving at 300 or 400 basis points which is the difference of making money, and bankrupt. in japan, it is 100 basis points, and so it is a very, very narrow line to tread, and enhance. >> and viktor, two reasons that the market is important, and one of the biggest economies and bond markets, and that of course, and the transmission through the 4x and the way that people are borrowing to get to other currencies and the fact that global investors piled in the on the trade and riding it up the way up, and are the two reasons that we are seeing the risk of japan and what is happening around the world? >> yes, the transmission mechanism is correct and two-fold. japan is double the size of

china in terms of the importance to the global e kconomy. and my suspicion is that everything in the room has a 15 to 20% component so when the japanese yen goes down, inflation is exploited on a global basis, and the second thing is that japan has $30 trillion of financial assets, and so if the japanese lose face in a domestic recovery, you can have a hell of a trade occurring between the japanese and the known japanese assets. >> what assets, viktor, would that boost? what assets would gain from that trade, viktor? >> i did not understand. i apologize. >> if the domestic japanese investor gives up on the local assets where do they put their money? what areas of the world markets are going to be increasingly void by that? well, if irst wet, and they will have a capacity to drive the 10-year money to below 1.5%, and

the federal reserve will stop buying the bonds because the yields are too low, and that will take a few countries in europe out of prison by depressing the rates, but it will end up in meremerging mark and the two things we are facing is appreciation of the u.s. dollar which is deflationary in the markets, but the appreciation of the yen could be deflash nation or inflationary if in fact the japanese decide to leave the market, the leave will be substantial, and we won't know if they will do that for at least six months. >> and six months around the world keeping people guess iing. thank you, viktor, shvets from macquarie. steve liesman joining us this morning. >> well, it carl, it is about us. the u.s. economy is simply

better than the market and the economists expected. so far the effects of the sequester have been muted as the consumers continue to spend, and jobless claims continue to fall. this is the data from this morning and retail sales being the expectations, and the core sales, the numbers that the economists follow, because it feeds into overall forecast up 0.3 in april and revised in may, sond what we thought was a negative is now positive. jobless claims at 334 continuing to trend downward and import prices continuing to go downward, and now from the bank of tokyo writing, net-net, and if there are fiscal growth, it is hard to demonstrate exactly where the growth is slow iing. here are retails up strong. cars and furniture which has been up for a couple of months in a row, which you would expect to rise given the higher housing numbers. food and beverage up, and gasoline down, and general merchandise is up 0.5.

and this is a four-week moving average. you can see the trending downward from the spike we had at 363 and down from the spike in april. if you draw a pretty good line from december down through june, you can see the broad general decline in jobless claims. that tends to suggest higher employment may be 175 or perhaps above 200. also, continuing claims below 3 million for three of the last four week, and in general, economists believe it is a lower unemployment rate, and maybe a tenth or two in the month of june. carl and simon. >> what happened to the effects of the sequester, steve, and how is it going to affect us in the second half? >> well, there is a robust debate about the sequester effect, and some folks say it is yet to come, and the worst will show up in june and july, and others say game over, folk, because you thought it would be bad and it is not showing up in the con sirlg akoconsumer and o

the economy, and in general, carl, everyday that goes by, and the more we look at the second and the third quarter when the sequester is supposed to wane or whatever effects, and the growth is expected to pick up, so it is going to be interesting to see when the market makes that turn. there could be some bad data ahead for us, but in general, it seems that those who argue that it was not going to be a big effect from the sequester seem to be winning the debate right now. >> and so what sort of growth are we looking at for the full year, steve, in summation? >> well, sheer the thing, simon, and let me put it in context. we will do 2.0, 2.25 in the first half of the year, and the expectation is up 2.5 to 3.0 depending the economist that you follow, but the first half is interesting, because everybody say 2% given a 1.5% drag from the government is a huge victory for the economy and showing that the private sector is more robust, so i am getting more information from the weaker n b

numbers than the expected growth in the second half. >> all right. steve, thank you very much for that. let's bring in jim paulson, and chief investment strategist and mike santony, chief economist for yahoo! and nice of you both to join us on a wet day it has to be said across the east coast. jim, is the stock market at this level justified by the fundamentals that steve just spoke about in the absence of continuous qe from the feds? >> i think so, simon. i have been of the view since the year-end that the s&p would reach 1700 and a few weeks back, it almost did that. i'm not inclined to raise that target this year, and we are in a sideways trend for the next several months if not the rest of the year, but i think that what is going to happen is the economic data will stay better than expected and too good for the market to fall a lot, but the market is going to have to deal with the rising bond yields and the end of qe fed tapering,

if you will, and that is going to create a standoff and a lot of volatility, but maybe a time of correction and time, if you will, and maybe we will set ourselves up for a rally again in 2014. >> but to summarize if i may, that the stock market is strong overall despite the volatility, and it will continue to rise year to end, and another 90 points on the s&p in your view. >> well, i think that we will be back at 1700 between now and year end. i think that we might trade above that a little bit and trade below 1600, and in other words, we are in a trade range. i think that it is okay valuation-wise, and we have to digest the big rise in the market that we have had, and a rise in the bond yields and the end of tapering or the beginning of tapering if you will, and that is going to take a little bit of time. but i do think that it is not overvalued here. >> mike, i mean, what are you hearing? what do you think? it is not just the problems that jim described, but it is all of the things that we are seeing

everyday virtually in asia and japan, and 6% fall in the nikkei, and can the stock market continue to sail through? >> well, i think that is the question, and it is not so much our necessarily fundamentals, but the global asset volatility can be absorbed and shrugged off by the u.s. equity market, and we in between as i agree with jim in the adjustment period, and between dominant narratives and we had the repricing ofquii dividend yield and such, because of the certainty of not having rising rates out there mostly. and now we have the in between period where rates are rising and not quite sure if the economy has hit escape velocity and prospect for the crowded trades and the confusion of the policy causing the volatility to be importanted into our market. i do think that we are probably likely to have a more complete correction this time. we had two incomplete

corrections in the stock market earlier this year, but it is not outright bearish, but the market has to adjust and rethink that. >> thank you, jim. i agree with that. and now, in repricing of the nikkei and with the sharp sell-off, they are not the only ones overnight saying they will get long here and short the yen again, but you are saying no, and why do you disagree and say we are not getting longer here? >> well, i like the japanese market here, and the euro stock market. i believe that the dollar will weaken in the second half, and continue do that, kelly. to me, it is hard to get too excited about an official bear market in the nikkei still up 0 20% year-to-date and still way up from where it was last october for example. and the yen is still very weak from where it has been in recent years. i think that abe-no, ma'onomics

working, and i think that stimulate now and ask questions later is on the right track. if i have a question, it is what is happening in the merging is world which not accelerating and not aggressive with the policy which is the bigger risk in second half. >> and hail to the central ba bankers. thank you, jim paulson, and mike santoni, and stay dry, guys. >> jim is like, it is not raining where ile live. >> it will be. >> and the broadcast networks are up in arms with the streaming company disrupting how we watch tv by bringing the content live to the mobile device, and they are expanding. we will talk to the ceo of aereo next. >> and meanwhile, the online travel agencies, the ceo will be explaining.

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>> aereo which allows you to watch content live in boston and expands and becomes available in the third market, atlanta. and the company has sparked controversy with tv networks over the legality. last month they filed a lawsuit against cbs asking the court the declaire their service illegal. brian roberts had some comments about it yesterday. >> i see right now to a lot of the legal challenge to aereo.

on both the cable side and the content side of comcast nbc universal, and we think that it's not a legal system, and it is going to be challenged in court, and we will have to wait to see how it plays out. >> here now, first on the aereo ceo chet, and what does this mean? >> well, we go into the market and release the data centers and on top of the data centers, we build out the antenna systems on the roof. so they are fairly large enclosures and they look like cellular sites. >> new york, boston, atlanta, and who is next and how many this year? is. >> so we have been announcing 22 to aun latch this year, but we will finish 17 or 18 by august, and then we are still debating what the launch sequence looks like. we want to get them all out in the summer, and it is a lot of

work for a small company. >> and the debate continues the big operators and yourself, and i think that les monvez had comments, and brian talked about you on our air, and clearly challenges in place that will back up their view. do you think it is going to be a fight? >> well, i look at the data in front of us, and one of two federal courts have agreed with us including the appellant court in the 2nd circuit, so i look at the conclusions coming out of that, and we are all as businessmen and women and technology investors, that is a good sign, and the basis of the argument is a sound policy. and the courts are validating it. so yes, of course, challenges, but it is a large market and we expect the challenges, but it is what it is. it is a lot of fun. >> and culturally, you are destroying, chet, the long storied broadcast channels f. all of the company, and if cbs, and nbc all have to go to a cable model because of what you

are doing, does that bother you? >> we are not destroying them. a lot of the new people are coming in, and watching that o product. there's tremendous advertising tints, and the -- opportunitie fact is that people have a right to and antenna, and because i have figured out a smarter, and faster model, it is good for the consu consumers all around. >> but broader term, you have three sets of people. you have the tv programmers, and those who organize the sporting events, and you have pay tv operators who will allow them to earn at normal profits and at the moment, the cable allows arguably abnormal profits for both of the other two to generate. you don't give abnormal profits to either of those two people, so longer term, they won't do business with you, are they? they are just across the world terrestrial channels are thinking of handing back those licenses, because they don't

need them anymore and they are not profitable, and once they have handed them back and they don't have to broadcast them over the air, your business is dead? >> well, i don't know what is going to happen in the future, but what i know is that the current situation is that is their obligation the provide the programming, and the consumer has the right to use an antenna, and that is absolutely right. there should be a new set of population emerging in the world that does not necessarily take a $200 cable package and should have an alternative. we are an excellent option for them to consider. >> there is a story in the "times" about nte -- intell tv, and comcast unveiled the new technology this week, a nd how o you talk about ta pace of the technology na you are unveiling and the legal costs over time are going to add up, i imagine. >> well, you know it is a fascinating challenge, right, because on one hand, it is an incredible company, and on another hand it has created the pioneering technology, and

direct to consumer, and so to market, and expose to the consumer a significant challenge, and on top legal challenges and recruiting and building a company, and so i have not really slept that much. i used to be a 7 handicap and now i shot like 110 the other day, but it is a lot of fun. business should be fun. it should be exciting and it should be creative, and those are all good things. >> chet, just quick question from me here, in terms of the ability to actually roll the service out across the country, and on the one hand we hear from some of the networks, we will get off and go to cable, and they take you seriously, and then they also say that you are a minor player and never amount to anything, and you have a bunch of antennas in brooklyn and never amount to anything. so which is it? >> well, it is not lost on everybody that the market is shifting. it is inevitable that consumption of this form of entertainment, television is going to be on the internet. there is a significant shift, and the economic model every

year 7% or 10% rate increases, at some point this has to break with or without aereo. >> you think that the bundle will go away? it is inevitable. >> and sports programming is the key to that? >> you can't saying i want four or five channels and hold you hostage because of a monopolistic situation to pay $300 no. where in the world does that function, and you make the argument. >> but this is america, and in america, they do capitalism differently, and they love an oligopoly and it is never a free market and you know that, sir. >> it is fantastic that guys like me come along and say, look, there is an opportunity to try to answer the imbalance that exists in the marketplace, and i believe that we will win. i like our chances. >> chet, thank you for soming in. founder and ceo of aereo. the chairman of geldmoldman sachs, is his patience running

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highlights. >> he was speaking in the politico's breakfast briefing saying that the second in command gary cohen is getting antsy waiting for blankfein to step down as ceo and may leave. blankfein dismissing the report as a gossipy piece. >> in the press, people are assigned to cover firms and somebody who was assigned to goldman sachs didn't have anything to write for a while. >> asked for the sdwri rations in the japanese markets, he said that volatility is not unusual for the new stimulus policy and one he maintains is right for the japan. as for the u.s., he calls the economy stable, but fragile enough to need low rates and he says that the energy boom is une exploited theme with unexploited theme and says that a lot needs to be done even if a lot has been done in light of the politics here, and one he calls a big concern because of the

anti-compromise mentality in washington, d.c. as for the federal reserve's talk of easing the quantitative easing, blankfein says that talk before action is the right strategy. >> creating the doubts and the uncertainties is actually, you know, effective into the long term goal of having as much stability as you can while you are engineering a transition. >> lastly, asked whether the government will save big banks like goldman if they run into trouble, he says that there is no political will to save failing firms only to have an orderly liquidation if it happens. >> yes. a lot of speculation about the beard, and no beard and what does it mean, mary? >> well, we we were trying to figure out the mustache from the side or a beard. there was a lot of facial changes going on there. >> thank you, mary. >> and now over to sharon epperson with the nymex. >> well, carl, the natural gas inventories rose by 95 cubic

feet. we are looking at the nat gas prices that are down pennies $3.75. keep in mind that the build that we are seeing here for natural gas is less than what we saw last week which is the first triple digit increase in the season, and some analysts who were expecting another triple-digit increase, but today, the range from the flats of the analysts is looking for an increase between 94 and 98 bcf and this is right in the middle of the expected range, and we are not seeing a lot of rise in that. as it was point odd nut the report this morning, there is not a lot of cooling demand outside of the state of texas, so there are mild temperatures across much of the country. back to you. >> thank you very much. severe storms are brewing in the midwest and heading towards the east coast, the latest of a slew of bad weather around the country, and the question is how will it affect travel? we will talk to one of the biggest players in the space, the ceo of expedia when we come back.

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about an hour into the trading watch here with the dow up some 26 and watching the dollar, too. intraday low of 93.82 yen, and that is the lowest since april and the dollar on track for the largest weekly loss since july of '09 versus the yen. hour into trading and some of the stories we are squawking about with 9:34 on the west coast and 10:34 on the east.

sales fell 0.10 in april. auto announcing an additional $750 million stock buyback, and safeway up sharply following news that it is selling the canadian operations to a canadian grocery chain for $5.7 billion and safeway will use the proceeds to pay debt and buyback stock. >> with the summer travel almost kicking into high gear, we want to check in with the world's largest travel agencies, expedia. and it has been a rough few months for expedia's shares which are coming off of the high set in febway and joining us is dara khosowshahi. >> thanks for having me. >> you can know it is bad weather in the east coast when you are on the program. notably, you were here when sandy struck, and time after

time after time, and how does weather affect the business? >> maybe i should retreat to the cave and stay off air if i can. at this point, we are not seeing significant cancellations, but obviously, what we get are the customer service lines and the the agents and the all hands on board to help out the customers when times like this come up. really, there is no winner here. the airlines do their best, and we do our best, and what i would encourage the yusers to do is t go online to see if there are delays. one of the interesting factors now is the onset of mobile technologi technologies, because if you download the expedia app, we can tell you if there is a delay or gate change so that you are not constantly having to watch the tv or go on the computer, and now we can communicate two-way to you which can really improve the experience of what is fundamentally a bad situation. >> let e's talk about the busins and the slowdown that you are experiencing in growth. obviously, the united states has been tough for you, and your launch in march that you bought and people will see the adverts about that, but it is in the

opaque of the business where people buy a product that they don't know what brand it is under that you faced huge pressure from notably priceline's express deals and hot wire, and your hotwire that you own has dragged as a result, and how do you turn it around? >> well, the base business is doing quite well, and you are right, typically, when the economy gets better, the kinds of opaque deals that the suppliers give us are worse, because the suppliers don't have to sell opaque as aggressive as they had, and the combination of that and hotwire has hurt, but hotwire is a small portion, and internationally the room growth grew 40%, and growing in asia and china as well, so it is part of the portfolio, and we are excited to have trivago come in, and that is going to help. >> and last year your share price doubled because tofr mof expansion and the europe

expansion, and now you are the worst of the stocks because of the drag in the united states. how do you turn it around? can the emerging markets more than make up for it? can the expansion in europe more than cover that? arguably no seems to be the conclusion? >> on the short term basis, certainly, the market is momentum-based, and we did take a hit on the opaque side of the business early on, and if we can keep executing internationally on the retail businesses and the trivago is as big as we think it can be, long term, it will take care of itself. >> what do you mean opaque? >> opaque is that there are certain hotels to get 40% or 50% off on hotwire, but you don't know what hotel you are staying at when you book, and so you will get a big discount on that. >> and we have the carnivale "triumph" back in service, and carnivale profited three weeks ago and we know that all of the

cruise companies are having to cut the prices to fill the ships, and can you give us any information on that now and what you are seeing, and you do sell cruises? >> yes, it is a relatively small portion of the business and in general the volumes took a hit after the news. news coverage has not been good, and shouldn't be. >> right. >> and now the pricing is pretty weak, but we are seeing the volume come back in response to the pricing. the fact is that a cruise is a great deal when things have gone right, but too many things have gone wrong recently. >> your come ppetitor over at priceline has been suggesting at the goldman sachs conference that room 777 chipmunk might have difficulty moving forward and the scale and will need room to survive. >> these are the big brands that have appeared over the last five to ten years have been kayak and trivago which have invested hundr

hundreds of millions of dollars in brand marketing. when you can invest in brand marketing that aggressively, you will see results. trivago advertising on your show aggressively. >> yes, bless you. >> exact ly. and their volumes in north america are up 500% on a year to year basis. >> and exclusively on cnbc? >> yes, of course. and when you can put the branding to work and have a brand like trivago on the front, the smaller players have a long way to go. >> and so now investing in the huge tv advertising and growing the brand or expanding the margin margins. >> well, you will see built motes, and we have been able to built some moats, and it is expanding. >> changes could be coming to the iphone, and we mean big. we will explain after the break. part about this country t

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take a look at shares of her ba life at $46 well below the $78 price target that d.a. davidson has on the shares which they have reiterated are the single best idea for 2013. so keep an eye on this stock today, and now up over 2%, guys. now sh now, the highest ranking apple executive to take the stand today testify at the ebooks price fixing trial. jon fortt has more. >> well, kelly, the question is what happened in 2009 when apple and the point man on the negotiations eddie cue was talking to the publishers about getting ebooks on the ipad and was apple pushing for the big deal or acting as a ring master to fix prices and affect the way that amazon was selling books? the feds are saying that apple did act as a ring master, and that it was the main party

pulling together a scheme that had major anti-trust applications, and apple saying, no, we were pushing for the best deal, and look, amazon had 80% or 90% of the ebook market locked up when we came in, and better competition. now, there is a little bit of drama earlier where the federal, the feds' lawyer brought in old e-mail from steve jobs saying that is seemed to say that he was pushing for changes to amazon's deal, but it turned out that the e-mail was a draft, and the e-mail he sent to eddy cue is that look, we have to make sure that we have best deal we can possibly get. this controversy has to do with amazon pushing prices lower, and basically what had been happening is that amazon had been selling books on the wholesale model and pushing the 'book prices lower, and publishers were not comfortable with that, and apple came in and steve jobs being the main voice, and then he said, look, you need to switch to a model where you

have control over the pricing and you can make a little bit of the money, and we have to have the best deal if somebody else is selling books lower, and we have to have the ability to do that as well. this is not necessarily a key issue in the tablet market anymore, but apple is determined to fight. tim cook weeks ago said that we were right in the situation and not wrong and we are not going the settle, and we will fight for what is right. of course, the d.o.j. believes it is right, too, so we will see how this works out with eddy cue taking the stand today, guys. >> and broad implications of the most favored nations clauses, as well. and we will keep an eye on that, jon. and something that apple does rarely say that it is following in the footsteps of the competitors, but is that what it is doing with the iphones? it is working to launch iphone variants with a screen and one with a 5.7 inch screen, and apple is also working on various

colors for the iphones and possibly a cheaper price tag. so how they can tie that together is going to be an interesting one. >> well, we did get some deal news, gannett grain to acquire belo, and what has happened is that gannett's prices have gone up as much as the company that it is acquiring. they will acquire over three years and you can see the gannett's shares up stunning 3 23%, and as much as 27%, and belo, up 27% for the all-cash k acquisition of the local owner of the tv stations where there appears to be a great deal of value with the retransmission fees and as simon raised it earlier, the spectrum, and the shares of spectrum, and if it is a threat to the business. there is something that you don't see often, as much in market cap added as much as they are paying for belo, and that

ceo will be on "power lunch" at 1:00 p.m. eastern today, and talk about a lot about that deal. or she is going to talk a lot more about that deal. pardon me. >> straight ahead on the program, rick santoelli will be weighing in on the japanese interest rates, and the rickster is live next from chicago. ething we all share. but who can help you find your own path? who can build you a plan, not just a pie chart? who can help keep your investments on course, whatever lies ahead? that someone is a morgan stanley financial advisor. and we're ready to work for you. chalky... not chalky. temporary... 24 hour.

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welcome back and take a look at myriad genetics. they've been handed a partial victory in a supreme court case gofg gene patenting. the court rules that synthetically produced genetic material can be patented, but genes that are extracted from the human body cannot. myriad was in the spotlight recently, of course, after angelina jolie revealed she had a mastectomy after testing positive for a breast cancer gene. the biotech company has a test that determines a woman's risk of getting hereditary breast or ovarian cancer. i have to say in terms of implications for biotech but also societally, this ruling critical. up 8% on that partial victory. >> a lot of big decisions. huge area of legal

interpretation right now at the supreme court. let's get to the cme. rick santelli with the santelli exchange on thursday. >> thanks, pal. yesterday we talked about momentum and some of the things traders like with regard to technical analysis, and we talked about the staircase and how that's the most momentum pattern. we don't have that necessarily, but an update. now, as you look at the charts, we realize that yesterday we had a settlement right on the nose of 2.23%, the key level we talked about. today's high field is roughly about a half a basis point shy of, yes, 2.23%. yesterday's high yield intraday was 2.224%. what i would suspect traders will be looking at, and i think this is important, and will continue to press this, we want you always to have the edge, is probably we're going to be playing in this area on a closing basis, maybe even an

intraday basis, but what traders are going to do is they're going to look for breakouts above 2.223% or below 2.05%. doesn't mean we can't play in the middle. once again snapshots. maybe einstein didn't trade markets, but the relativity of time and technical analysis is so key. you know, many people that right these algorithms and pattern recogniti recognition, the pattern could be in a two-minute short or a 20-year chart, a pattern is a patte pattern. pay close attention especially the first weekly close we get that breaks out of either of these ranges. japan figures prominently and we've seen discussions by smart economists and analysts about, listen, the japanese economy really isn't going to impact the u.s. economy. we're doing pretty well. i totally agree, but don't dismiss the technical nature of the dollar/yen, euro/yen,

aussie/yen, everything about the yen because you might start out with the little david with regard to that financing being part of your structure but what you end up with is rather large. so this could move the markets despite many fundamentals, like i just discussed, but there is another hook into this. since it is about foreign exchange, anybody who is a student of the '30s and all of the currency wars, think about the big economies of the developed nations that are all a bit behind the eight ball even though the u.s. is closest to it, and whether it's the auto industry or any large exporting between germany and various countries, china, japan, the foreign exchange side is important and it will be a fundamental because the global economy is highly interconnected. back to you. >> got to hope people understand the connections there, rick. thank you, sir. debuting on the big board today. find out what the ceo had to tell us about the opportunities

ahead. those shares still trading lower. down about 2.5%. as we head to break, here is some of coty's competitors. avon unchanged. estee lauder giving up a tenth of 1%. [ male announcer ] with free package pickup from the united states postal service a small design firm can ship like a big business. just go online to pay, print and have your packages picked up for free. we'll do the rest. ♪ we'll do the rest. (announcer) at scottrade, our cexactly how they want.t with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine.

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i'm mary thompson with some breaking news about revlon. the s.e.c. charging the company with misleading shareholders in a going private transaction that occurred back in 2009. the company paying an $850,000 fine and also neither admitting or confirming wrongdoing with those charges. essentially what happened is s.e.c. investigation found that during a voluntary exchange offer to satisfy significant debt to its controlling shareholder mcandrew and forbes which is run by ron perelman, revlon allegedly engaged in ring fencing that deprived its independent board members from knowing critical information about the company. revlon settling those charges for $850,000. kelly, back to you. >> all right, mary thompson with that story for us. staying in the sector, coty

began trading on the big board. it is currently trading below $17.50, just over $17, down 2.4%. here is what the ceo told us last hour about future growth prospects. >> today we believe we have a very strong base. so, yes, we're going to see opportunities to increase our competitiveness. >> they will have to deliver on opportunities. >> you don't often see things break syndicate bid that quickly. it will be interesting to see how it closes. >> 70% trading above their first issue price for an average gain of 22%. >> both those figures better than expected. call it the silent, decent ipo year or is it just me?

>> it may just be you. >> a woman who professional goes around and says these things and says that's commercial, now you need to change it, that's what will work. >> but how big is the nose? >> very, very -- >> she must insure it like robert parker the wine guy. >> she's a nose. >> reminds me of sleeper, remember that? >> absolutely. >> the nose. >> guys, we'll sue you laee you. if you're just joining us, here is what you missed. >> welcome to "squawk on the street." here is what's happened so far. >> what we've seen in the stock market over many years is that when the stock market has a big advance like it has had frequently, but not always, that is a leading indicatoe oor of ue earning surprises. >> across our fleet we will carry roughly 90,000 people on vacation. our guests, our past guests, are coming back. >> the economy seems to be

holding up reasonably well despite all this fiscal drag we've thrown at it, the tax hikes and the spending cuts. they've taken their toll to be sure, but the economy is kind of, you know, getting through that. >> there was such a high interest, such an involvement, that i am very optimistic for the future. >> the basis of our argument and the courts validated that. yes, of course, there's challenges. it's a large market. we expect those challenges, but it is what it is. >> we did take a hit on the opaque side of the business early on. if we can keep executing on our retail businesses, we think long term things will take care of themselves.

good thursday morning. we've live at post 9 at the new york stoke. the dow managing to hang on to a mod rerate gain. s&p is adding almost 5. nasdaq 9.5. shares of blackberry spiking citing better than expected sales of the new blackberry 10. firm also raising its plrice target. h & r block one of the worst performers. >> and huge market action in japan, but u.s. markets brushing it off. will that change anytime soon? we have the answer. that's coming up. also, the film industry is imploding says george lucas and steven spielberg. you will hear from them later this hour as well. he stood on a podium with president obama earlier this week talking immigration reform. today he'll join us live on "squawk on the street" paol c."

aol co-founder steve case is here. but e cigarettes are now medicine. markets across asia suffering another bruising day as investors scrambled for the exits with japanese stocks falling over 6%, more than 800 points. they are now in bear market territory. heavy losses as well across china and southeast asia. let's bring in chief asian strategist at jpmorgan on the cnbc newsline from hong kong. adrian, good evening to you. what's the mood in hong kong? how concerned are people about the sell-offs we have seen first in japan and now, of course, across the broader asian area? >> i think people are quite concerned and quite unnerved. there was a very powerful trade with japan doing well, the yen weakening, and we've seen u.s., a substantial unwind of japan's

outperformance, and i think what's got a lot of people scratching their heads is why the yen has strengthened so much to the even go below 95. we've got that going on, which has generated a lot of volatility in asset classes and position squaring. so we're seeing what worked getting sold down very heavily like some of the smaller markets such as the philippines, thailand, indonesia. i think the fundamental concern that people have is that long rates are going up. some of the emerging markets are being big beneficiaries of very low long-term interest rates as well as zero interest rate policy at the short end. they look vulnerable in that their economies are weakening and interest rates are rising. >> adrian, is it fair to describe this move as a resetting of u.s. growth expectations to a little bit higher? maybe the fed a little less accommodative and it is that which is puncturing the emerging

market trade? has japan kind of run into this moch in the u.s.? >> i think japan when we look at where the volatility started from, some of the comments coming out of the fed, but i also think that investors are looking at what's going on in japan and growth has definitely picked up there. and so it does make sense the japanese yields are rising. what i think everyone is struggling with is why the yen is so strong and why isn't the government in japan doing more to manage that situation. >> adrian, would you argue that the yen is a buy here say at 94? >> no. i would think the yen is a short at 94. i would be putting in place carry trades funded by the yen at this point in time. >> and what is your call about what the boj may or may not do stemming from that view?

>> yeah. so i think that the boj will be in there trying to reduce the volatility in the government bond market and we'll see a sort of signal to the end of this sell-off as volatility declines. and then i think people will start to put on again the long japanese equity positions and probably short japanese yen. we're probably a couple weeks before we've unwound the current positions. >> adrian, what are the parallels between today and the late '90s when a similarly strong u.s. growth outlook, a stronger dollar, meant a lot of pain, in fact, spurred the asian financial crisis? >> well, i think the similarities are actually reasonably weak. you know, if we go back to what happened in '94,ed fed took short rates from 3% to 6%. the fed is communicating there's no change in short rates, you know, well into 2015. we also had a massive

devaluation in late '93. we had much poorer situations in terms of current accounts and fiscal deficits in em. so i don't think the analogy is that strong, but there are a number of emerging markets that do look vulnerable. we have current account deficits and deteriorating fiscal positions in brazil, south africa, to some extent in indonesia. i would also highlight the fiscal position in china. if you look at the article four declaration from the imf, they were looking at the augmented fiscal deficit around 10% of gdp. i think there are strains out there, but the analogy is '94 has a number of weaknesses. >> and it will be interesting to see if it was a strong china then a weaker china now, and what that all means. adrian, thank you for your time. >> thank you. the markets in the u.s. are now positive across the board. it's been a volatile morning. a lot of uncertainty around the

globe. art hogan joins us and chad. art, the long term metaphor, best house in a bad neighborhood, the cleanest dirty shirt, i'm not sure it's applied to the u.s. this much in some time. >> yeah, it's interesting. we've got a marketplace here, carl, that has seen volatility for the first time and that was introduced on may 22nd when we had a confusing statement from the fed. i this i what's happened is we continue to try to paste that story onto what's going on in the marketplace. i think that's incorrect. i think you need to say what's happening is a lot of crowded trades are unwinding. we saw that in some of the defensive names that are being sold off. cyclicals are being bought a bit. the biggest unwind is short the yen. until that unwind completes or runs its course, we're going to have this volatility and we're going to be glued to what's going on in the dollar/yen relationship. >> chad, a lot of relationship about 1621 or so on the s&p.

a lot of technicians say don't trust anyone or anything until we get back above that level. when are you comfortable again? >> well, i think right now we're currently fairly valued at best. the economic numbers that are coming in are somewhat better than expected but, i mean, we're trending at a 1.5% to 2% gdp rate which makes it as if we're not really undervalued by any measure at 15, 16 times multiple. so i would be more comfortable entering the market at perhaps a 1575 level or a 1550 level. at our shop what we did was we were overweight risk and we actually went to neutral weight about two weeks ago. >> interesting. art, you know, chad mentioned some of the economic data. claims not bad. retail sales not bad. barkley's takes their q2 number from 1.1 up to 1.8. obviously not stellar but i'm

wondering if you are feeling better about the macro here? >> what we have to key on, we need jobs creation numbers to be in the 2 owe 00s. until that happens we won't get any tapering. i'd like to see the retail sales continue the strength. auto sales are important to us in keeping that above 15. i think incrementally we're getting better. what i'd like to see is exit the year at 2.5% to 3%. let's not be talking about 1.5% to 2%. in i think that would be a sustainable growth rate that the fed could start doing something and not just talk about it. >> still, chad, we have certainly seen the impact that -- we've seen what the ramification i should say could be here from the fed exiting or at least starting to taper, and while it looks like the u.s. could hold up okay, the rest of the world is struggling. how much of a worry is that? >> first of all, let's start

with the federal reserve. i'm thunder struck that people think that the federal reserve is going to taper by the end of the year. you have inflation expectations that are actually coming down well below their target rate. as well you have the employment picture that is improving like art said. but still it's got a ways to go. we think that the federal reserve is going to go well beyond consensus estimates on actual monetization. in regard to the global outlook, okay, when you take a plane over to europe, okay, they're going to be in a recession not only in 2013 but i think that the imf and the world bank will be wrong, they will continue to be in a recession in 2014 and in asia you're starting to see a deceleration. you're seeing a deceleration of economic growth coupled with the infectiveness of the federal reserve because as they're continuing to monetize, you're starting to see inflakes expectations go lower. that's somewhat troubling for us and that's the reason why we're somewhat more neutrally weighted at this point and we would be

moving up the quality spectrum. >> that is a well-reasoned, thoughtful analysis, chad. i don't know what we're going to do with you. >> thank you. >> take care, guys. strong words from one of the biggest names in hollywood, steven spielberg. listen to these comments that he made onned f the future of the industry. >> there's eventually going to be an implosion or big meltdown where three or four maybe even half a dozen of these mega budgeted movies are going to go crashing into the ground and that's going to change the paradigm again. >> spielberg and george lucas speaking exclusively to cnbc. but first rick santelli talking munis a little later. >> mr. spielberg needs to adopt a strategy from central banks and qe the movie business. moody's has new rules regarding

penguins. we will have matt fabian to talk about everything muni and how some of these issues may affect california and illinois and your muni investments in about ten minutes.

take a look at the industrial sector trading close to the flat line today, but up about 13% year-to-date. there's one stock in particular which is weighing on it today. josh back at hq to identify it for us. >> one dow component giving us some guidance today would be dupont. the chemicalmaker now saying

it's looking for first half operating earnings per share to be about 10% below last year. said previously it would be a 7% to 9% fall. company also looking for full-year operating earnings to be at the low end of its forecast. the cfo here talking about unseasonably cool wet weather across north america and europe impacting some of its segments. carl, back to you. >> i want to draw your attention to an explosion at a chemical plant, a williams chemical plant, in louisiana. we're getting word that there are hazmat teams on the scene. this coming from the louisiana state police, fire and an explosion. multiple roadway closures. police say it's in a largely industrial area, not a lot of residents within a mile or so, and the fire also appears to be contained within the plant. that said obviously the stock has taken a spill on news of that. williams is down almost 4%. more details on that as they become available. some huge headlines shaking up hollywood this morning. they're coming from some of the

biggest names in the business. steven spielberg and george lucas. they spoke exclusively to our own julia boorstin who joins us this morning in los angeles. hey, julia. >> hey, carl. that's right. steven spielberg and george lucas came together at the unveiling ofu sc's interactive media building to give the next generation of filmmakers new tools. spielberg is predicting the entertainment landscape will be transformed after a number of mega budget movies will flop at the box office. he says they will emerge stronger but totally different. >> eventually there's going to be -- you know, there's going to be a price variance for -- you're going to have to pay $25 to see the next "iron man," and you're probably only going to have to pay $7 to see "lincoln." that will be in the future as well. >> sit in the theaters for a year just like a broadway show

does and that's going to be what we callmovie business. everything else will look like cable television on tivo. >> spielberg says there will be the rise of a whole other type of entertainment, immersive experiences from the comfort of your own home. >> there's going to be a time when we're going to be so interactive with our story telling that we will be literally inside the experience. the imagery will envelope us. there will be no sense of reality. you won't even sense you're in a chair. >> spielberg is producing a live action tv show based on video game halo. despite the fact that microsoft plans to make it the first truly interactive tv, spielberg says the most important thing is still the narrative. as for george lucas' most famous narrative "star wars," he says it's in good hands at disney. >> disney has been great. their stock is way up which was good for me and i'm very happy

with it and i think it's a very smart company and i think bob iger is very smart the way he's running it. for me it was a very good investment. >> i asked both lucas and spielberg if they will collaborate on another "indiana jones," they wouldn't rule it out but spielberg said it was up to lucas and lucas said it was in the hands of paramount and disney. carl? >> wow. really important pieces of news, mostly on the "indiana jones" stuff, julia. wonderful. thank you so much, julia boorstin in los angeles. upgraded disney in large part of the billion dollar franchises like avengers and "star wars" they will roll out. >> look at the strength of the theme parks. congress is inching closer to action on immigration reform. aol co-founder steve case speaking a lot about that issue even appearing on stage with the president earlier this week. today steve case will be here when we come back. [ male announcer ] frequent heartburn? the choice is yours.

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♪ now over to chicago and illinois where, rick, we've been seeing plenty of moves in the muni bond market. what do you have for us? >> i'll tell you, kelly, if you want to talk about munis and you're in illinois or california, you're either in the right place or the wrong place depending on your perspective. welcome matt fabian. he's our muni expert for the day. matt, you know, there's a lot of issues up in the air. there's still talk that some of the tax exempt issues regarding munis could still change. we see that moody's is trying to put a little more honesty in actual return of state 7.5% when you have a 220 ten-year doesn't make sense and some of that may make underfunded liabilities in

those two states much larger. then you have obama care. many forget maybe illinois and california will pass half their medical costs on these pension issues for the retirees to all taxpayers in the form of obama care. how do all those issues affect munis? can you still make money trading or should you just ignore the sector? >> well, you know, there are always opportunities in the sector. you know, yields have obviously risen quite a bit over the last month, month and a half. in particular the last week or so. there's things going on there, but mostly the market is trying to find an equilibrium. going forward, things that could hurt are surprises like that, right? the reaccounting of pensions, not just by moody's but also by the independent accounting board. there is the risk of threats to the tax exemption from the administration like you said. there are credit risks like detroit, like rhode island, like jefferson county, things that

could undermine confidence in the sector broadly. you know, so -- and if more than one of those things happens at the same time, you could have a larger impact going forward, but, you know, you have to think about, right, investing in the sector, why are you in this? why are you buying munis in first place? if you're buying for income, those are typically mark to market issues on the value of your bonds. holding them to maturity or being in a big liquid mutual fund, it's much easier to manage that risk going forward. >> i got you. so right now if i was thinking about munis, what would be a good rate of return considering the risks out there and what geographic region and what type of munis would you recommend? >> i would recommend still waiting a little bit. i wouldn't recommend buying because we're still in the middle of really this, you know, over the spring, like i said, things have become illiquid. there's been a bunch of selling in the beginning ever june because people got their may statements and said, oh, my god, there's been a drop in the

value, i better sell my munis. that's still going on. it's forcing the market to become liquid. long term this is a good thing. it's going to make munis more tradeable. there will be a little more spread and a little more yield for the investors. you're better off waiting a couple weeks. we could have 20 more basis points, 40 more basis points. timing here is more important than anything else. >> matt, thank you -- >> the sector itself, the main risk is really credit. the general obligation bonds is still 1/25th of 1%. so it's tiny. even if you think things are going to get really, really bad for munis, we're still talking about extremely low default rates. see you, sir. >> perfect. matt, thanks for being our guest. i guess i walk away thinking done avoid the sector, keep your powder dry, and there may be opportunity. thanks, matt. back to the "squawk on the street" gang. >> thanks so much, rick. after a brutal day in asia, the bells are about to sound across

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let's bring in simon hobbs as we count you down to the close across europe. simon, yesterday -- >> i was going to say i feel like the pied piper. can you see these guys here next to the sets? >> they're really cute.

mount kisco visiting from westchester county. he has a future on wall street, that one. see that head nod. people are talking about greece again. i haven't heard that in months. >> we've got a real big problem with greece with a nationwide strike and a big warning -- >> the european markets are closing now. >> let's kick off with the bank of canada. talk all you like about japan, bank of canada has released a report in which it says the most important risk to financial stability continues to stem from the eurozone. the argument they're making is there's been so little structural progress in europe at the moment that it is delaying the recovery and therefore the political will to act will be potentially undermined with massive consequences for north america. let's come back to that in a moment when we talk about greece. we bounced on a seven-week low. 80% of the 600 stocks are still in negative territory. even as you look at that map there. a lot of the financials are down. bank of scotland is off its low.

the ceo pushed out. we learned that yesterday. so that really raises questions as to when they can privatize again. other banks across europe are down. you've seen the weaker nations having spikes on the yields in their bond markets as you see selling there. we had a big auction in italy today. look at what's happening in greece and portugal. this is just a one-month's track there. there's some concern. as far asity will i is conce ia they got through 60% of the supply that they need for the year. it's not as acute as it might be. i want to show you what's happening in greece. there's a nationwide strike as a result of the news we brought you yesterday that the government decided to shut down the state broadcaster. the threat is that it will -- the prime minister has said there will not be elections. they will do some sort of deal, but it is testament to the fact that you have a lack of political cohesiveness which

points back to exactly what the bank of canada was saying about financial risk. back to you. >> simon, thank you very much for that. want to get a check on energy and commodities. the dow up almost 50. sharon epperson is at the nymex. >> we're looking at natural gas prices in positive territory after that surprise data we reported about an hour ago. we did see in addition to natural gas supplies that was less than what the market perhaps had anticipated or definitely less than what we saw last week. some traders now saying that that means that perhaps it wasn't just slow demand over the memorial day holiday, and it really is a supply/demand issue. we're continuing to watch the reaction there with natural gas up about 10 cents from the lows of the session. in terms of the elsewhere in the energy complex, we have seen a bit of a turnaround here with most of the oils and petroleum complex being in positive territory. in the last few minutes we saw wti turn negative. there's still some concern about supplies there and the abundant

supply we have of crude oil in the u.s. the meadows a metals are seeing turnaround to the downside. we are seeing a bigger decline in gold than we saw just an hour ago. looking at also some of the other metals, industrial metals, seeing bigger declines there and we're watching what happens in terms of supply issues that have impacted some of the platinum group metals. back to you. >> sharon epperson for us. let's swing back here and take a look at what's happening on the big board. where is coty? >> coty is trading at $17.24. a little bit off from $17.50. i think the problem was market conditions. you know, good company, very well-known brand name. it was oversubscribed yesterday. there were people wanting to get in on the deal that couldn't get in. you have market turmoil. the problem with the ipos is they are determined on those market turmoil kind of thing. $17.24 not a bad opening

considering the situation. meantime, very interesting reversal of a trend. remember on days when the yen has been very strong, generally our markets have been down. that's been going on for weeks. not happening today. we'll take a look at some of the major sectors today. transports on the upside, the russell 2,000 on the upupside. the cyclical index outperforming. look at some of the big countries that are commodity rich, days when the yen has been strong, things have been ugly for them. they have had a tough time, south africa, australia, peru, brazil recently. all the stocks are on the upside. this is an interesting reversal of the trend we have seen in the last couple weeks. the key event next week going to be mr. bernanke's presser. he has to be very happy just this talk has produced all this turmoil. what is he going to do? is he going to calm things down or push it further? that will be the key event next week. let's move on here. let's talk about some of the emerging bonds and what's going

on over at the nikkei. i woke up this morning at 5:30 and the nikkei was down 6%. i said what happened? there was nothing that happened. a lot of people couldn't say anything other than the fact that mr. coeur d'alene koroda h a mario draghi moment. he has not yet adopted that whatever it takes attitude. his attitude is whatever, we're doing something. he's got to be a little more forceful. i think that's the feeling because that meeting went nowhere and a lot of disappointment. sell or hold or buy? bonds, emerging markets, what should you do? boy, am i getting questions on this. this is a hard one. emerging bond markets down dramatically just in the last month. some of these are down 15%, even 20%. a lot of people are talking about trying to buy some kind of bottom. i think it's a tricky call.

by and large my general feeling is in emerging markets, you know how volatile they can be, they move 25% in ranges for years. >> are you calling japan an emerging market? >> no, not japan, but certainly like the eem which is the big -- >> you're absolutely right but that's why the japanese moves have been so interesting because they're massive. >> you don't see 70% moves up in the nikkei in four or five months. that is once in a lifetime -- >> unless it's 1989. >> i'm talking about the eem. you get much more volatility there. my general feeling is if you believe in the future of emerging markets, by and large, you're still within that trading range. you're still volatile. >> have they not missed an opportunity? they have had ten years or at least five where people are worried about developing, they have had all this capital. what have they done for it? what do they have to show for themselves. >> indonesia is doing very well. the country overall is still improving. i think it's rather

dramatically. the economy is growing. they have had a lot of political problems. if you believe in the value of holding a certain percentage of your portfolio, 10%, for example, in emerging markets, you're going to have to accept the volatility, and 25% moves up and down in the eem is typical. that happens -- that's been happening for the last three or four years. we've had stable markets relatively. bond funds are a little more controversial. my general feeling is go short-term bond funds rather than long term. >> some of this macrotourism is seeing some volatility. >> good word. revolution growth. a fund led by aol co-founder steve case announcing a $20 million investment in north carolina based startup wally woolly doodle. i love saying that on air. it's a children's apparel company that's leveraged facebook to drive most of its ka sales. case has been a vocal proponent

of immigration reform that would make it easier for u.s. companies and startups to recruit foreign talent. steve case joins us this morning from new york. steve, good to have you back. >> good to be here. >> let's talk about immigration first. it's about said that the gang of eight has done their work and now it's time for the gang of 100 to do theirs. i mean, are we as close to making this happen as we've been in 25 years? >> yeah, i think we are. i think that's a good way to characterize it. the gang of eight did a great job dealing with a lot of complicated, sensitive issues, put together a package that went to the senate judiciary committee. they debated 300 amendments, over 100 were includeded to modify the legislation, and this week it headed to the senate floor and now the debate will continue and additional amendments will be introduced but i'm optimistic it can pass the senate. the target is to pass it by july 4th and importantly try to make additional compromises to get to 70 votes in the senate, not just 60 which is what is needed but 70 because that sends a lot of momentum for the legislation heading into the house which is going to be a little heavier lift.

i think there's a good shot we can get comprehensive immigration reform passed and signed by the president but it will require people working together to make sure this gets done. >> a little heavier lift in the house. do you think it's -- is it a heavier lift or a brick wall? >> i think it's a heavier lift. there's a lot of good faith on both sides. i'm encouraged by some of the things that have been said by the leadership in the house. they recognize it's time to deal with the issue. as you said, it's been debated for a couple decades. it's time to get this done. most of the people i have talked to who come to congress want to get things done. they are frustrated by the process, the bickering, the partisanship, had this is an opportunity to work together on an important issue. if we're going to have a strong economy, we have to have great innovation. we have to have the best talent p.m. some of it is home grown talent encouraging more people to pursue a s.t.e.m. degree. visas are critically important if we're going to remain the most entrepreneurial nation in

the world. it's not just a problem we need to solve, it's an opportunity to we need to seize and the time is now. >> revolution has backed some of the coalition, engine advocacy. i wonder where you think we would be had tech not helped push this boulder over the hill at least so far? >> it's hard to say. i would say the tech community, one good piece of news in the last six months or so is a lot of people in the tech community, including myself, were arguing narrowly for high skilled immigration reform. now that community recognizes the way to get that done is to embrace comprehensive reform. deal with the path to citizenship issues, deal with some of the guest worker issues as well as deal with the high skilled immigration issues. this broader coalition is now assembled. i was yesterday at a cover conference in washington. it's democrats and republicans coming together to put the nation's interests first and get this done so we can remain the strongest nation, the leader of

the free world with the most innovative economy. >> this certainly a big opportunity. steve, i want to ask you shifting gears about facebook actually, which is critical to the success of say a lolly wally doodle, but a lot of people are talking about whether this company has enough momentum with users. you know, the news about it adopting the hash tag after twitter did making it look like a follower, if you will. do you think facebook has a bright future? >> absolutely. it's amazing. it didn't exist a decade ago. now there's a billion yuse euse. companies started with nothing a few years ago and now are one of the fastest growing social shopping companies in part based on launching on facebook. they supplemented that with pinterest and instagram and revolutionized shopping on these social platforms and custom manufacturing in america. facebook has been an enormous success in the leadership both from mark zuckerberg and cheryl sandberg has been terrific.

they made the right moves to move into mobile. it's allowed businesses to emerge and be quite successful. >> finally, steve, the conversation about privacy in this country after then nsa new, how does that affect the narrative of how we're going to spend our lives online? >> i think it will continue to evolve. i remember 20 years ago when people were talking about the idea of e customeommerce. people said are never going to enter their credit card online. they're willing to store it because it's more convenient and they're willing to let amazon track their purchases. it's the trade-off we have to have. on the national level of course we care about national security but we also care about privacy. exactly how you strike that balance is going to be an

ongoing debate. we see that in health care as well. people want to use data in smarter ways to basically give doctors the tools to make better diagnosis and have better treatments. at the same time there are concerns obviously about privacy. this is an ongoing discussion. it will continue for the next ten years or more because as new medium emerge relatively quickly and it is transforming our society. >> all right. >> steve, always great to have you. hopefully all our viewers go to lolly wally doodle and good luck to those servers. >> thank you. and also support on immigration. we need -- the time is now. let's get this done. >> steve, come back soon. thanks. >> thanks. >> steve case in new york. according to the uk, e cigarettes are now medicine. could they really be just what the doctor ordered. stay tuned. plus wild weather rocking the east coast. we'll tell you where it's headed. a lot of it coming our way. back in a minute.

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coming up next on the half, with japanese stocks in meltdown mode, why is the street still bullish? with the global sell-off putting our markets on edge, our traders will tell you how to profit from all this volatility? plus what does apple have up its sleeve. jon fortt will separate fact from fiction when we see you in about 15 minutes. >> good stuff. looking forward to it. thank you, scott. wild weather is working its way through the midwest and heading towards the northeast.

the weather channel's carl parker following it for us live out of atlanta. carl, can you give us a sense as to when the bulk of the storm will pass through our area? >> well, you know, we had one big round of storms already in philly and baltimore. that's now pressing offshore. we will get a little more sunshine and then another round most likely this afternoon. here is a look at the radar picture. you can see a big cluster of storms now offshore. things are quieting down in the wake of that, but later today there's going to be a lot of warm and humid air streaming up and stronger winds coming in from a different direction relative to what's happening at the surface, and what that does is create shear and rotation and can lead to rotating storms and possible tornadoes, but one mitigating factor is going to be this cloud that is still present there around d.c. so it may be that we see a greater threat farther southward in southern parts of virginia. that's what our latest models are indicating that we'll see the stronger storms there, south central virginia going into afternoon. carl, kelly, back to you.

>> all right. think about our parents on the road tonight. thanks very much, carl. >> when we come back, a new medicine approved in the uk and you can smoke it. yes, according to some new regulations in britain, e sill r cigarettes are now classified as made sin. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade.

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medicine you can smoke? the uk says it will regulate e cigarettes as medicine starting in 2016. jason healy is the founder of blue e cigarettes. the company was acquired for $135 million last year. he joins us now. jason, good morning. >> morning. >> tell us, first of all, about these e cigarettes and the claims that they work at all like a medicine. >> well, first of all, e cigarettes are a transition from tobacco to technology and rather than relying on the burning or combustion of tobacco they vaporize a solution that may or may not contain nicotine and allows the user to inhale and exhale what looks like smoke but is vapor. >> do yours contain nicotine? >> we sell both. we sell blue with nicotine and without. >> which is more popular?

>> definitely with nicotine. but people are surprised how popular the nonnicotine is really. >> i'm sure it goes back to the image of it. on this point about nicotine then, is britain right to regulate this like medicine? i mean, it's an interesting label to put on it but basically saying they do have to be aware of the health risks of still using even an electronic cigarette. >> yeah, i think in general regulation is a good idea because it adds to -- or it helps this tremendous possibility with ecigs, but with that possibility comes a lot of responsibility. and regulation should help ensure that that responsibility is met and that good manufacturing practices and so on are met and that the consumer feels safe when using the product. >> jason, trying to figure out who would be displaced by you guys taking a bigger share of the drug delivery business. is it about making patches less competitive or who loses if you

win? >> well, ultimately the consumer decides, and what we've seen is e cigarettes are a much more effective system than the gums and patches. it's not about win or lose. i think it's a win for the consumer because it's shown that e cigarettes are far more effective. >> how much more effective is the drug delivery process versus a gum or a patch? >> it's weird. it doesn't come down to the drug delivery necessarily as opposed to e cigarettes replicates what a smoker is used to doing, the behavioral side. and gums and patches miss that whole side of the equation. probably the gums and patches are more effective at gives you more nicotine but they miss the habitual side of smoking which a lot of smokers miss when they transition or quit or what have you and it answers all those questions for a smoker and gives them choice and freedom. >> a big announcement by

reynolds that it's getting into the space. are you seeing more competitors and what's that doing for pricing power? how is the future earnings growth do you think look for your company? >> well, i think in terms of competitors, reynolds and philip morris coming in may limit the amount of competitors, just change the size of those competitors. you know, there's probably in the space in the u.s. now 200, 300 ecig companies. with the bigger tobacco companies coming in, it will make it harder for a smaller business. profitwise, i think that's strong as well and will continue to be as we improve the technology and as the market matures. so i think both sides are somewhat positive, especially for the blu brand. >> jason, just in a word, is there a way to tell externally whether someone is smoking a cigarette that has nicotine. >> the cigarette is black, the

light is blue. you can immediately tell, hey, this isn't a cigarette, they aren't burning tobacco, we weren't breathing second hand smoke. so ours it's very easy to tell. some try and mimic the look and feel which we completely moved away from. >> right. okay. i was curious as well about the nicotine content there, but jason healy, want to join you again. he is the founder of blu e cigarettes. a famous face popping up on linkedin in morning. we'll tell you who. we're back in a minute. i want to make things more secure. [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better.

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♪ we have a famous face popping up on linkedin. check this out. bill gates has become a linkedin inflewancer this morning. he wrote his first post about the three skills he's learned from warren buffett. np one, it's not just about investing. two, use your platform. and three, know how valuable your time is. as of right now bill has 7,645

followers. not bad for day one. by the way, the stock itself has had a pretty nice day, too. of course, the dow is up 51. decent tape today. but linkedin, that's microsoft, but linkedin is up almost 2%. >> i just love to use these news stories as gauges for the company. i think a quick bogoogle reveal he tried to deactivate his facebook in 2008. >> housing is having a good run. goldman though back to almost back to 164. that's a 1.33% move. there's a look at housing. of course, lloyd blankfein making some comments today saying that the risk from europe has lessened. very low risk of u.s. falling into recession in his view but not zero. >> right. which is always a good thing to say because you can never say never. >> that's right. >> those financials are by the way hard hit the other day on the sell-off. if you see strength there, it's

part of that rotation. people have been talking about on the fed ex sitting on a stronger u.s. story. >> it's hard to make a call about the market in the afternoon because the last couple of afternoons have been so odd. >> right. >> with that in mind, that does it for us on "squawk on the street." let's get back to wapner at the headquarters and "the halftime." thanks very much. welcome to the halftime show. four hours to go until the close. let's take you to the wall. find out where we stand at this hour on wall street. positive day. a snap back day. the dow is up 50. s&p positive as well. what's really up apple's sleeve in its bid to compete with samsu samsung? jon fortt separates fact from fiction. betting big on japan has been the year's most popular play. but why are all of our traders still bullish. first, our top story. globalke