>> good. >> check it out. >> good because you put on a challenge to do it, and the challenge was to take off the shirt he's wearing, do it shirtless. >> the gauntlet is thrown down. >> and joe will reciprocate. no, i showed myself. >> thank you, and now it's time for "squawk on the street." good wednesday morning to you, welcome to "squawk on the street, i'm carl quintanilla with jim cramer and david faber on the new york stock exchange. around the world, china create growth, eurozone industrial production, japan, gdp plunges overnight and a miss from macys which we'll get to in a moment. 10-year yields at 2.43, sounds

low, but biggest since 1999. amazing what booms are doing. modest jump in europe. road map begins with macy's missing by 6 cents, and the ceo is optimistic about the futures saying customers are not. >> the full year profits lower than last year, we'll tell you why. >> king digital shares down in the premarket and earnings match spoiled by some lower revenue and guidance. >> and amazon quietly taking on paypal and square with the credit card reader for in-store purchases. >> all right. signs consumers are tightening their belts. sales come in below expectationexpectation, and macy's has orders of 80 cents a share, a miss, and retearer reduced full year comp sales guidance because growth in q2 failed to make up for the short fall in q2.

they see comps 2 to 3 versus 4 for this quarter, jim, and any customers still not comfortable about spending more in an uncertain economic environment. >> before we are negative on macy's, the conference call has been pied piper like. the ceo called people back. i want to talk about 5.5 billion, the amount of sales crushed by jcpenney when the block head was running the company -- i shouldn't have said that, mr. block head -- to be more serious -- >> ron johnson. >> yes, used to play for the giants. ron johnson, willing to remember. the other guy -- >> he was the ground gaining leader for the giants. >> he was. >> run the apple store, and it did not work out at jcpenney -- >> back to your point. >> this would have been, like, the worst takedown that happened, spiked unemployment if he kept his job. mike comes back, 5.5 billion in

sales up for grabs, get some of that? doesn't mean he discounted to get it. i'm seeing the store filled again, some of that comes out of macy's high. the comp sales stock dropped in the top range. >> right. although, it's a hundred basis points off the full year fiscal year guidance, 1.5% 2 %, had been higher than that. >> a guy back from the dead can take sales. there's numbers out of amazon. it looks like, david, despite the fact everyone is mad at him because of the book thing, people are shopping. they shopped at amazon in record numbers on amazon's documentary, that ran 17 times, must have spurred success. >> would explain the audience numbers. >> now, they are shopping, but what are they paying when they shop? >> paying less. >> after ralph lauren, after kors, margins down 50 points in

macy's. >> more competitive, and, by the way, the retail sales number nothing to write home about. autos are competitive. this is amazing with the con finds of gasoline going down in price, chicken going down in price, thank you, putin, for sending prices down in our country with ban of our chickens. beef's come down, pork is down. >> record soybean and corn crops, the feed for so many animals. >> inflation was noisy at the top. stealing that from janet, don't buy pharmaceuticals to yellen, but this is all the piece. the piece is consumer is doing better, but is not -- being a very smart buyer. >> all right. what does it mean to carl's point for the manufacturers? in other words, i'm macys, i cut inventories because that's key, right? i can't give away what i don't have, which is a good thing, because i have less of it, i don't have to take markdowns,

but ordering less than manufacturing as kate spade. >> not going to advance any doors, and kors was the hottest seller at macy's at christmas time. iff did not have perfect numbers either. coming up with a mosaic that says the consumer is looking for bargains, this is an amazon effect because we're all shopping an amazon, paying less, look out petsmart, causing pressure, and it depends what's in the trucks. do we know what's in the trucks from russia to ukraine? the white trucks? >> aide? humanitarian aid. >> and not -- we think it's humanitarian and not some sort of, like, unique so be it machine guns, right? we don't want that. we want maximum aid. >> correct. >> you did warn us going into macy's, analysts hot on it, would have to have a blow out. >> how many times?

how long can they be? >> what's that mean later in the week? >> preserve price point to a degree, but i think that when you have all these analysts telling you macy's will be great, the bar was raised over and over again. where did they get the information? i don't know. they were wrong. that's causing -- >> they were. eps guidance, it's the same. >> true. >> they buy back stock so there's other ways when it comes to the profit loss statements to pull various levers that do not include selling stuff. >> no. no. look, this is -- i still think -- >> and to your point, this listen to the call. see what happens. >> we've seen -- >> we're on television. >> we saw macy's rise lazerus-like. the release said that kate spade is game, set, match. no one's buying bags other than kate spade. listen to the kompbsz call, think about the bags i bougtd at canal street for 19 bucks, not

unlike this one i brought on canal street for 12 bucks. >> nice. >> did you know they have an outlet? >> the guy told me that too. >> for all the clearance inventory they have to move. >> got to love it. >> moving on, fiscal earnings, 2 2.22 and company sees full year profit below 2013 levels and expect equipment sales down 8% for the current quarter. this year, guys, usda said farm income would be the lowest since 2010. farmers just don't have the money to spent on new machines. >> there's really a farm -- just wholesale collapse on the prices on the big grain complex, good news for the consumer. deere is a disappointor. adco said it's a terrible market for equipment. the price of land is down, which usually puts a floor under deere.

i don't they will implode, but look -- deere is still a function of the grain complex, and that is no longer boosted by ethanol apparently. we have way too much gasoline in the country, way too much. that's what's happening, just this huge continuous feedback loop from running the country with oil, and there's just a lot of good news at the consumer level, but not translating to what we think is higher prices for the companies where consumers spend. >> not buying the argument that krooud below 9 8, 97.45 is statement on behavior and demand? >> i see the baltic freight up again. that could be, that's chinese -- could be because indonesia is shipping or world trade is coming back. there's a complex, endbridge, a huge pipe. canadians gave up on keystone, send it by train down to the

gulf, going through canada, nine refineries in the ontario area and coming down. why this? we are disinterimmediating from brent. brent will be a nonglobal market in the same way that natural gas is nonglobal although it can be shipped. what i say is that we're going -- you look at the price of oil, set in the united states, not set in britain. >> all right. >> will will be in the next 18 months to two years. >> that's a big deal. >> when you talk oil and gas, i listen. i mean, i always listen -- >> rbn may be the most informed guy on oil in the world. every ceo tells you that. it's happening quickly because keystone, gave up on keystone, the canadians. can you blame them? listen to hamlet to be or not to be thing in the white house? it's not going to happen. >> made easy for them. >> willing to spend $60 billion, take it, we'll build your jobs, but no, we want heavy crude to

go to china where four days later we get the pollution, just a delay. they send the delay, the delay when we have someone we're interviewing overseas, the delay. >> king digital taking a hit in the second quarter market. earnings in line, revenue a miss. citing weakness in candy crush saga, stocks down more than 35% from the march ipos. and, in fact, of all the large ipos this year, sing the worst performer. >> from day one if i recall. >> it was the price in the last day of march, beginning of the end, the biggest junk through the pipeline. by the way, there were a lot of analysts there, talk about macy's who said, listen, sentiment is too negative. buy king. no. the sentiment was not negative enough. this video game business is very, very hard. it's like teen apparel. >> we got five to six downgrades

today. >> yeah. >> pacific crest cut monday. >> good call. give them credit. >> candy crush losing steam in the itunes stores. ? looks like the stock was cheap because of big earnings. >> a big lockup operation in september. almost all shares impacted, and the special dividend of 47 cents. >> we don't want no special dividends, but earnings. king was terrible. watch the deal, by the way, that broke business. >> it did yesterday. did day one, but it managed to, i think, close at if not above syndicate. the spinoff of the credit card business of ge. ge owns the majority, much of it, but this is follow of it. >> it was a huge deal, biggest deal of the year, biggest u.s. ipo of the year. >> i point it out because big week for ipo. the wake of them always bad. >> biggest of the big in a month. >> ali babba.

we have to be worried, there's a story. >> do we? >> talking about the valuation, there's a lot of squawk swishing around too, right? >> there's going to be a lot of stock. >> yeah. >> you know how much they sell primarily, and then, obviously, yahoo! cut back. do you see shares of soft bank between sprint and alibaba? shrinking dramatically. no shortage of things to deal with. >> see the japanese economy? >> yeah. >> great to tack the sales tax, brilliant move. >> the gdp number better than expected. >> sadly, down 68 was better than estimates. >> that's sad. japan made the mistake raising the tax, and yet they are sticking by the game. there's a lot of guys in big government who are doing the wrong thing. you just -- seems like for their countries, you know, we blame central banks for stock prices. let's not do that. let's look at profits. it's a moment where the macro is

not making money here, like follow the macro, you're not making a lot of money. >> the ice bucket challenge bringing awareness to als catching on around the country, and the ceo from twitter posted a tweet challenging me to get in the mix. he gets his way later today. stay tuned to watch that as we try to raise awareness for als. a look at the premarket, the dow only had a 1% move in the last three months two times. >> is that true? >> unbelievable. what a summer's it's been. a lot more from squawk in just a minute.

amazon unveiling a $10 credit card reader and mobile app for brick businesses, called local register, allowing merchants to accept payment from mobile devices. amazon looks to compete with square and paypal and will, get this, what else? charge lower fees. of course, that's the amazon model. they try a lot of things out, and they do typically come in and not just under cut, but then continue to push prices down, ala, aws, web services, extraordinary successful cloud ourings for businesses, small businesses, and bigger

businesses too where they continuely push prices down. >> charging 175 is a full point below square. that's going to get some small business owners' attention. >> these guys are the cotton gin, right? remember the industrial revolution, cotton gin comes around, eli whitney and they just, like, they just come through with it. >> there's a not bad. >> right. >> the eli whitney tom loom business. all the women who did that, the credit card business and book and apparel business. >> what if you're ebay paypal today? another hit at them. >> numbers out for e bay, not that good, but they have a bid underit. someone every day comes in at the 5 2, 53 level not letting the stock come in. there's something going on from the trading action, 52 just won't come in. >> that said, they throw stuff

at the wall. remember the phone, have not heard about the phone since it was unveiled. >> right. i don't know. look, i just know i shouldn't keep up with the documentary because it sounds like a hack -- >> no, please do. >> it is on apple tv i know. >> it's eli whitney meets -- okay, don. that's what it was. eli whitney goes into the paint ball business and takes over. then don, you know, eli goes into the towns where there's not a job, and then te works them in like four shirt, and like next guy. >> next guy. >> you know who scott is? the guy who stalin cited as being able to mine for 36 straight hours in world war r. you have to be him to work for amazon. >> it does require a good deal of fitness. >> this is just an amazing -- this thing is, like, you

can't -- walmart must sit there and say, i hate amazon. next big walmart thing with the smiley faces, it will be down turned, we hate amazon. >> it is not been a good performer, down 20 %. now, i think the faithful have a great deal of faith, but you have the likes of steve ballmer, for example, recently, making comments about amazon's lack of profitability. >> ballmer likes the clippers. >> that deal closed. here's a quote, it's not the cheap price, but used to tech companies with huge risk, this is not the crazyist thing. >> compared to some of the publicly traded companies out there, you know, there are great companies, he goes on to say, like amazon, absolutely no earnings, market caps, and risk. >> sounds like sour grapes. >> the man who paid how much for nokia? >> oh, that's right.

he is an overpayer from right back. >> and no chris paul came with nokia. ? good point. what about when he buys a football team? when is he going to buy the billing already? >> i think bon jovi's in line. >> that's an interesting battle. two forces. ? when they get back to amazon, they have a strong belief amongst key shareholders back to the 1997 letter, go after the future cash flows and not reported earnings, sorry, and it's been a long time. >> could say, listen, we're taking down the price ever everything njding our own stock, and they would stick buy it. cutting price of the stock to be cheaper. everything is on sale. if you act now, amazon prime, buy the stock lower. when we come back, cramer's mad dash, counting down to the opening bell, a look at the premarket. more "squawk on the street" from the nyse in just a minute.

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nice visitors there. time for mad dash on wednesday. >> wednesday. >> i want to start off with a place not seeing as many visitors perhaps as people hoped. >> you introduced me to the concept of penguins in the late 1990s. only place i touched one is sea world. this is a penguin story. analysts move from this because a term you coined --

>> didn't coin it, but use it. >> down 14 to 16% as if people are on strike, not going to sea world. this is amazing. >> right. the stock, as you see, poised to open down 30 %. >> cage willie situation. >> significant cuts in earnings, attendance below. do we think it's because of the documentary? it's been out there for a long time. i have to tell you, it's got to play a role, i mean, this is astou astou astounding, the decline. theme parks said like cedar fairs, the numbers got good as of late, but this just an aberration. i've never seen just a complete collapse in this, and they have to do something. >> what do you do if you're seaworld? >> you free willie. >> have harry potter on the water, i don't know. >> i don't know, man. this thing is just in big.

it's in trouble. i don't know how to put it other than the fact that, you know, it -- the documentary had to have played a big role. >> i don't know. kevin costner, that one, on the open water forever. what was the name of that? >> oh, "water world." >> tried to help out here. moving on to oil services. >> yeah, i think we've been trying to figure out how to quantity my for russia, okay, and what's happening with russia, and to quantify it, cutting numbers ahead of everyone. watch rutherford. stock not hurt at all, the collapse of crude, but also, i mean, isis, if they don't stop isis, you are going to have a big depar sure in the oil, not yet happened, but i know iranians and united states conspireing to get rid of the guy, malawiki, but you cut drilling in iraq and russia, you

cut drilling numbers. people have to understand drilling service is the first area really hit and what i worry about is a worldwide slow down from russia and ukraine. >> we'll watch that group and many others poised for the opening bell, less than four minutes away. stay with us. "squawk on the street" is back right after this. today on "squawk alley," rent check, please. what's driving tech's biggest companies to be landlords? unlock the female narrator: the mattress price wars are on the mattress price wars are on at sleep train. we challenged the manufacturers to offer even lower prices. now it's posturepedic versus beautyrest with big savings of up to $400 off. serta icomfort and tempur-pedic go head-to-head with three years' interest-free financing. plus, free same-day delivery, set-up, and removal of your old set. when brands compete, you save. mattress price wars are on now at sleep train. ♪ your ticket to a better night's sleep ♪

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wherever you are with the mobile trader app from td ameritrade. welcome back, you're watching cnbc's "squawk on the street" live from the financial capital of the world. opening bell ringing in a minute's time, busy morning from around the world, not all good. in fact, most weak. we are going to get germany's gdp number tomorrow, that's key, but people pay attention to the macy's miss, opening down 5%. >> macy's, people associate macy's with every aspect of the consumer, and it's everywhere, and macy's is well-run, so it's -- no one says, listen, the execution's bad, so people extrapolate, sell the apparel companies. be careful. i keep coming back to jcpenney

on the rebound, and if you've been to jcpenney lately, prices terrific, display better, clean, good to shop again. >> all right. there's the opening bell, perfectly timed. s&p at the top of the screen. down here at the big board, nana ver risties, developing drugs against viral diseases, and sun eddyson semiconducted limited doing the honors at the s&p there. nice upgrade of ford today. >> yeah. i hope that works. mark field doing a good job there, but i think that the retail sales number shows it was a very funk auto number. you have to be careful. i don't like the way the chinese -- remember, it's small, but growing rapidly. i don't know if you follow how china is antitrust. chi china's just not liking us at all. >> a very important development. their crack down on so-called

monopolies and triggers so many deals we talk about. the antitrust regulator oftentimes the last to give approval, if it gives approval. can become very important in some of the deals where you need antitrust approval because of the trust in china. >> look at the supply of materials. >> exactly. >> that stock is in dribs and drabs, down more than 10% because i think the chinese will block it. >> it's -- >> it's tokyo electron, and you know what's beginning on between china and japan. >> don't forget, there's a long history of hatred there. i think that cisco reports tonight, and a good quarter, no doubt saying at&t spending not that big when it comes to atsu, not that big with analog, but china's cracked down on sies koe. they are 5 good company and can beat this, but if i were ibm, i remember the numbers, really not good. china is playing with us.

they are playing with us. they are dumping steel, being tough on us. everyone says, hey, china, we have to sell shampoo there, come on, give me a break. >> still spying on us every opportunity. we do the same to the certain extent, but they're commercial spying. >> one thing related to kmer commerce. who spends heavily in china? amazon. they give us pollution. they dump things on us. they block us. we give them amazon. i say, look out, prc. amazon's a coming. >> the best s&p gainer, 2.7%, ford is behind it, steeple upgrade, sales trends are better, f-150 -- >> oh, that thing's on fire. >> it's on track, portfolio refresh is on track. >> aluminum is the lone commodity doing well. they felt they blew off the numbers, but be careful. stock is up, it's a double.

i think the world of clause, but copper is going down, and that's indonesia back online, but caution people that f-150 is, indeed, alcoa, but they are pretty much sold out. they are sold out of the line. they have to add to the line. they made the big aerospace acquisition, i liked, but the aerospace segment is coming down, dribs and drabs every day. look at amazon. holy cow. >> bucking the trend in broader retail, if you will, with the macy's miss. wa walmart down, home depot down, not sizable losses by any means, but nonetheless in an up half percent s&p retile certainly not leading the way. >> one stock not talked about enough i want on people's screens is emerge energy services limited partnership. we talk about the mlps, but this is the nation's largest fracking sand, pure white fracking sand.

goes up pretty much every day. there's a gigantic fracking sand shortage developing. spending next week on oil, just talking about what goes in. there's a train car shortage coming from trinity, and there's a sand shortage with the merger. we think that sand is everywhere. this is not the sand, david, you have at montauk. >> got it. >> this is not outer bank sand. these are sands from wisconsin, shortages in the economy that i'm looking at quietly. >> watch tesla today, this is the highest close of the year. some reports from california that california will waive environmental regulations to get that battery plant. that's -- okay, that's 26 2. >> stock was up yesterday december pilot the consumer reports, and still dealing with the deutsche bank, 500,000 car number, making it so it is a major force, take it out of the idea that it's boutique. >> what was the buy? half a million by when?

what year? do we remember? >> a theory buy. >> sort of out there. out there sometime. >> i don't know. they did have the $9 forecast in 2016, in the world of big growth companies, that's good. the market, only thing down are the tjx because they think that's hurt by jcpenney too. the rest of the market is strong. wow. >> yeah. did you see jolts yesterday? 13-year high in job openings, number people quitting their job, you tend not to quit a job unless you have another one after that, and sub employment numbers from u.k., you know, i had trinet on this, and people don't know that, they should, but this is the human capital, upgraded, should have mentioned that, human resources for small to medium sized businesses are hiring. they are hiring, and each state has own rules, but they are higher pg, and we see that from paychecks, automatic data

hiring. the only thing is affordable care makes it so your deductible is out of control, which is why all the other day, how the companies do managed care are bottoming. be careful of this deductible. it's something that trinet's talking about. the cost of health care in the country gone up huge since the affordable care act. it's the unaffordable care act. call it that, the uca, not the aca. i'm not for our against it, but look at the deductible. it's just zoomed. was that supposed to happen? >> to bend the cost curve overall and bring costs down. >> it is. >> everybody thinks twice whether they spend on anything. question is, when you need something, what do you do? >> it's going to cost too much for a lot of people to have children. $12,000 to have a baby, $5,000 deductble. you'll get blown out if you have a baby and not wealthy and

self-employed. something to think about. lowers how much we spend on health care, it is, but it's making everyone spend too much. >> yeah. >> i don't mean to be political, but this is what -- this is what the companies that are involved in health and human services at the firm for professional business organizations say to me. deductibles are flying high, and people are not going -- well, it's too expensive to go to the doctor. >> by the way, well point is changing their name to anthem. assume you saw that. >> saw that. >> interesting. watch hotels, la quinta raising revenues in 2016, a few months after going public in april. >> good sign. that was a bum deal. remember the ceo -- i talked to the ceo, hey, how are you doing, i said, man, i'm jammed here. i didn't know he was the ceo. he's a good guy. said, look, the stock is under valued, it came during the period with a deluge of offerings. that's a very good company that's undervalued in the hotel

and business, and that's one to watch, nice price point. >> yeah. with that, as jim mentioned, dow's okay here, up 49, and bob is on the floor. morning. >> nice start to the day, we have all ten sectors of the s&p moving up, but a lot of frustration on the earnings front. imagine being a retail company now. macy's best in class. folks, everyone expected a beat from macy's, not a loss -- excuse me -- not a miss of six cents. certainly not that. the problem here? well, you can -- we've gone through the strings of the problem, not a lot of fashion items exciting people, spending on other things, electronics, data plans, and cars, and david burrman's been talking about that, but people still don't have access to discretionary spending, and lundgren mentioned that in the earnings report, customers are not feeling comfortable about spending more in an uncertain economic environment. i guess you just have to leave it at that.

st still, a tremendous disappointment. they are trading down, and this does not bode well for other retailers. as i said, they are best in class, so we've got walmart tomorrow, jcpenney tomorrow, kohl's, nordstrom after the close, all trading down 1 to 2% here. other sectors are moving, big thing about brent here, moved up today finally, but you see for the last several days, to the downside, especially the lows of the year. yesterday, that's been weighing on a lot of oil names. that's reversed a little bit today. a lot of the big names weighing on the dow, chevron and exxon up today. oil names like apache and the smaller, p names, the shale plays, very high pes have been hit rather noticeably in the last several weeks, but most are all bouncing today. in the earnings front, other thing interesting was la quinta, by the way, only went public a few months ago, a new high for the company. earnings good, raised full year

outlook, gave an optimistic forecast for 2014 increase in revenue for available room, and overall, that industry certainly is firing on all cylinders now as most, a good part of the airline industry is. right now, dow's up 52 points. back to you. >> thank you very much, bob. i wanted to get back to something we talked about a great deal here. in fact, well before anybody else was, but lately has not been something we've seen. which is inversions. remember that? tarks inversions. companies redomiciling in order to change their tax rate and more importantly have access to their foreign cash and be able to lower their u.s. tax, u.s.-based earnings as well as as a result and bring cash wherever they want to bring it whether it's for overseas back to a certain extent or use it in any way they want. we've seen research on this topic, and, in fact, a lot of trees have died lately as wall

street firms print latest thoughts on inversions for their clients, but we have not seen transactions. a few weeks ago, i anticipated and reported many of the practitioners of mergers and acquisitions, lawyers or bankers, expected a new wave of inversions to hit to close prior to year end in the belief if you got in under that deadline, you could avoid anything that happens next year whether it's specific legislation about inversions or simply amazingingly enough it were to happen, redoing of the corporate tax code or overall tax code. they have not been there. why not? perhaps much is rhetoric from the administration changing its tune. delivering alpha conference indicated i can't do much, and treasury changed its tune and said maybe are there things we can do. what would they be? goldman sachs along with many others came out with a note, i think this morning, they could

announce incremental change to rules around inversions, tighten rules to limit earnings stripping, complicated, but if you have a foreign subsidiary, set up as a redomicile company, you can loan the u.s. company a lot of money. that lowers the u.s. tax bill because it pays interest back to the foreign company. well, you can change that. you can change deductibility to the interest. you also could do something here in terms of foreign earnings. for example, say, you know what? anything earn before you inverted, you can't bring back to the country. there are things treasury can do. the question is, will they do any of them? is this rhetoric ahead of the elections, and, really, just designed to try to stop inversions without doing anything, simply by putting fear into the companies and considering doing so. by the way, deals out there suffering as you know, talked about it, does not mean they will not close or convert, but abbvie shire, look at the spread

in the deals. last week, you may recall, an armageddon -- that's what we call it. >> like an apocalypse? >> unveiling of the fox's bid for time warner, sprint-tmo going away, and walmart chose not to invert. because of the political chatter? i don't know. what i heard they would have had to recut the deal making it much more difficult. they would have had to -- remember, they already did the deal in question here, and so they would've had to recut the deal, and made it much more difficult. walgreen earnings were a mess, jim, and that hurt as well. big one, will pfizer try again? they started the talk, although we talked about it for almost a year. they can make one phone call pretty soon and say, are you interested?

astrazenca would probably say no, but would have to wait a year to do the deal they should have the first time. >> they pressed hard on the idea of something to do, and he flat out said no. that was wrong. i don't want my corporate tax people -- went to them, and irs can do -- >> they report to treasury. >> yeah, like, i'm listening, and i know jack lew from college, but i think the directive was, listen, we get comprehensive tax reform, only way to do it, republicans say, but the corporate tax professors and what i know studying the stuff, listen, what are they talking about? i know there were tax gurus saying nothing could be done, but that was untrue. totally untrue. you had a home office, could deduct it, the next day you couldn't. they can do whatever. the irs -- >> where the focus is. >> right. >> many say would be a reach in some way. >> right. i think irs is a reach all out of lives. irs changes the rules like that.

we can't do anything about it. they are the most powerful entity most people face in the country, the interface of the government, irs. i like this. do you think any food companies invert? the food companies, there's going to be a deal, david, i keep getting -- >> medical devices, maybe industrials, don't hear food. >> you don't? i keep getting this call. i keep getting this call, and i want to stay on it. you know more sources than i did. >> we're running out of time to get to rick santelli. let's do that. take it away. >> thank you, david. i hope the irs does better on inversions versus hard drives. listen, look at yields today, we're down one on twos, down three on fives, two on tens, down two on 30s. what was the catalyst? retail sales in light. definitely didn't taste great, was not more filling. look at the intraday of 10s, jumps out at you, and look at the chart in july, you can see that, you know, we continue to hover close to the lows going

back to june, low close at 241, the ninth day, do we stay here? settle between 241 and 249. the intraday boons, you see the effect at 8:30 eastern on weak retail sales, and it was drifting lower hovering at 104. open the chart to july, this looks to be a new yield low historic close at this level. look at the difference between boons and 10s. right now, it's 138 basis points. that is very close to the 15-year widest it's been, which was established a few points wider in july. look at the other sovereign, 1046 year gilt, a one-year low, and last, euro versus dollar, jumped on weak retail sales, you know what happens to the dollar index, exactly the opposite. carl, back to you. >> thank you. when we come back, mike

herring on 11 a.m. eastern time. should this be a takeover target? stay tuned for the ice bucket challenge today. incredible the amount of money the als association has raised. talking almost $4 million in the last two weeks. >> really? >> a year ago period, $28,000. twitter's ceo and myself do that later on in the morning. be right back. don't just visit san francisco. (water dripping and pipes clanging) visit tripadvisor san francisco.

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>> in case you missed it yesterday, that is our judge taking the ice bucket challenge for als yesterday. as part of the tradition here, he called out someone, facebook's mark zuckerberg to name one, and twitter's dick costolo yesterday. costolo responded on twitter, doing only if carl quintanilla got in the mix. we'll do that later today to take the challenge with dick costolo and vine it as well. >> i want to be there live.

>> i think we'll be outside the exchange unless we do ton the floor, in which case all bets are off. >> that will make a mess. >> are you going to change? >> we'll see. >> that's a lot. i'm so excited about this, the way the judge got it going, excited that dick watches the show, and you've involved with him. this is all really good, happening so quickly, and it is good. awareness is good, lou gehrig, great speech. read that speech, by the way. >> amazing the donations, even in the past couple days, als association is doing a million dollars in donations a day over the last 48 hours as a result of all this awareness. >> there's biotech companies working on it. so tough. >> and sclerosis. >> very tough. charles river labs were on here, do 1-800-labrat, do so much testing, and ebola, these drugs, it's just very hard. i mean, the major pharmas are

not doing a lot of great work, but it's the bioteches. it's hard to develop something that does not kill you when you develop. that's the ebola problem. this stuff kills ebola, but kills you. finding the right dose is important. stock trading with jim in just a minute. ♪ drivers want to go further with their electrical vehicles. but you can't take a trip from lisbon to stockholm if you can't re-charge along the way. the green emotion project, funded by the european commission is using the ibm cloud to make this possible by creating a single charging and billing network across 28 countries. so drivers can travel as far as they want to go. take your business further with the ibm cloud. the ibm cloud is the cloud for business.

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time for cramer in stop trading. >> important set of notes out today about cybersecurity, and the company to focus on is not fire eye, retail focused on, bunch of deals, can come back, but palo alto networks. okay, the ceo of panw, this is by far the company that is way ahead of everybody, and they will tell you that in terms of cybersecurity in the country, most companies are nowhere. only about 5% of the companies really adjusted. jack lew talked about that at delivering alpha, but palo alto has solutions, and that company's going to $100 a share. >> wow. >> what's on "mad" tonight? >> i have to figure out housing because housing, you got affordability getting better, mortgage rates coming down, price of houses going up slowly, and tripoint, i think, is really the guy, doug bauer, informed

guy on the housing market. i have to figure it out because housing stocks should be going higher, not lower given the data we're seeing. confusion out there. >> yes. >> look at the stock -- well, people realize we want to know what's on the trucks. if they are filled with plasma opposed to machine guns, this, of course -- >> the aid delivered into ukraine so to speak. >> that's what we have to find out. could be the beginning of peace talks. sanctions are killing the russians, $3 million of chicken not coming at you, food lines, bread lines, coming in russia. ukraine is the bread basket. where is the food going to come from for the russians? >> good question. >> last thing he did may not have been bright. >> yeah. making a lot of mistakes. this is bad. >> see you tonight, "mad money" 6:00 p.m. simon? trouble in retail, both

macy's ren retail earnings missed today. what's it mean for the economy and investing moving forward? also, we'll look at the writing dirty tricks campaign between uber and lift and what it means moving forward, and is deere is buying opportunity in the wake of the results, which, again, have sent the stock down? more than that in hour two of "squawk on the street." ...for the year. hi. sorry. just want to say, i bundled home and auto with state farm, saved 760 bucks. love this guy. so sorry. okay, does it bother anybody else that the mime is talking? frrreeeeaky! [ male announcer ] savings worth talking about. state farm.

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welcome back to "squawk on the street," june business inventories out momentarily putting the tombstone on june, second quarter data up four tenths, pretty much as expected. our last look was up 5/10, subtle implications of next look at second quarter gdp. interest rates down three basis points on the long end, mostly due to weak retail sales. carl, back to you. >> i'll take it from there. thank you so much, rick. weak retail sales the name of the game this morning, and shares of macy's are down following q2 results that missed earnings estimates. macy's ceo joined us back in april on the mistk on consumer and future of macy's.

this is what he said then. >> we always say, you know, we don't need the consumer to spend more money, but just spend more money with us. so far for the last four years, picked up $4.5 billion in same store sales, seems to be working, in our case, feel great about the strategy and future of the company. >> that's not what we heard on this morning's earnings, and to discuss that, the senior retail analyst with jpmorgan. >> thanks for having me. >> you see the quarter, full year outlook lowered how it was, analysts saw that coming, and some did not. what's the take away? >> cautious into this. bottom line take here, i think macy's is confident in their strategy, and i think they, you know, going back, showed the comments a few months back, spoke to the company this morning, again, they remain confident in their strategy. less confident in the consumer. taking an aggressive posture here in the back half. i think lowering the same store sales outlook makes a lot of

sense, but they were able to maintain the profits for the year. >> even so, matt, we've seen a mixed picture for retail sales in july, so far, and i wonder, are you confident that macy's has the right strategy, and it is just uncertainty on the consumer? do you think that macy's has something wrong in the formula at this point? >> i think macy's is the long term winner in the department stores, spending money even during a choppy economic backdrop now, moving forward with omni channel, have the online customer, and i think macy's standing above the peers. it's an unstable backdrop for the consumer. a lot of things are against us, durable shifts, weather out of favor, and so we'll see what happens in the back half. >> matt, elaborate because this is really important for people. when you say they have the strategy which is correct the back half of the year. spell out what that strange ji is why it would drive you to $60

a share. >> right. a couple things. one, you need to have the difference between -- you need an instore experience, which i think is driven by brands. macy's has the brands the competitors don't. secondly, you need an on loin experience to draw traffic. they spent the money, infrastructure built, and benefitting from this online prowess, and then i think, third, in terms of more from stock specific, we're looking for $5 in 2015. i think that's unchanged today. that's low double digit earnings growth, there's a strong balance sheet, good management team, buying back stock, and looking at $5, 12 times multiple on out year is reasonable from here. that's our $60. >> okay. >> i think the algorithm's in place. >> matt, when we move away from macy's, talk about the economy overall, remember that what lundgren said here 1 the consumer is not willing to spend

more, some are not willing to spend more because of the economic environment. what do you see given we have weak retail sales second half of the year and other investments that you cover? >> i think you want to take a prudent view into the back half of the year, and i think you want to lower the upside expectations. i think that's pretty what macy's did here. go back again to teri's comments talking about, you know, potential for strong consumer, that was off pent up demand seen in early may, and the upside expectations from macy's as well as for oir names i cover, it's prudent to take that off the table and think about, you know, who can maintain stability, and myspace, it's brands like nike, vf corp., best in class brands, macy's, department stores is the way to continue to play. >> matt, we looked at a chart of macy's compared to the overall s&p retail sector, macy' in the time period up 18 %, s&p up 6%.

despise the revised outlook, what's the chance top line growth is over for macy's compared to the overall sector? >> yeah, look, i think macy's, shares will be under pressure, and i think that given the miss today as well as the reduced same store sales outlook, you know, deservedly so. you know i think we -- if you throw the scenario ten time on outlook of $5, maybe 50, but realistically, an opportunistic approach in the mid-50s. nibbling here, but i think 3q, a tough comparison, so i think it's going to be a 4q weighted year here and most look to make it up in the holiday, but, again, i think that's going to lead to really, really tough promotions out there, and it's going to be a real war. >> right. banking on q4 for quite some

time now, matt, but leaving it there for now on macy's. >> thanks for having me. meanwhile, markets in the green here despite disappointing earnings, geopolitical tensions, and art cashin is joining us now. art, good morning to you. >> morning. >> retail sales a miss. how does that fit with good confidence and jolts? >> jolts, remember one thing, it's two months old. the confidence two months ago with jobs may not carry forward into purchases and the mood of the consumer, but i am beginning to see some consumers using their credit cards again, i don't know that builds up, but for now, what the politics say is apal over the market. we're not going to find out bout this convoy until late today, and so the markets, i don't think anyone wants to take a

huge spin beforehand. we came out of the box looking to assault the resistance in the s&p, they got up in the neighborhood, and now they pulled back a little bit, and so so far, range bound of 1910 and 1950 to 55. >> how much rides on the convoy? russia says we don't want red cross to distribute it, they move in, ukraine considers that an invasion. how much is that worth to the market? >> i think it could be critical because then ukraine said they would consider it almost a military invasion, and, you know, one way or another, we hoped if they didn't hand it over to the red cross, at least allow red cross inspection to make sure there's nothing else with the supplies. >> leading indicator how the u.s. traded for a few weeks now. i wonder what are people saying about german gdp tomorrow and is that meaningful for the u.s.

trade? >> yes. they are concerned. you know, germany has shown some signs of weaknesses. these sanctions bind both ways, and the concern is that if germany begins to weaken with italy already in a double dip recession, most of europe could begin to pull on the u.s. >> you know, there's a danger of over intellectualizing this, art. you are a student of history, you know how the first world war started, ukraine sees it in that context. the market does not. the market is resilient. that's the probability that we are unaffected, and we go back towards new highs. >> well, is certainly is a possibility, and that's one of the reasons the market's not overreacting. they've seen this movie several times, and no one's been killed in it, so they don't. to take a bite into a false move again. you know, the boy is only cry wolf so many times. >> the spread between the

10-year and german equivalent has not been this wide science the late 1990s. does that continue? low rates mean ours has a ceiling no matter what the fed does? >> well, i think you're seeing some minor signs that the bond individualianties are not ready to see us move down, and you are seeing all this philosophical discussion about yellen, you know, okay, got her good jolts number. will she become more aggressive? i don't think so. i think you saw fischer's speech, wanted on board, singhy. will be interesting to see, what will draghi do? >> important thing is to understand the flows here. if the bond trades at 1% in germany or whatever happens with jgbs in japan, chase yields chase treasuries even at these

levels, great value because there's nowhere else to go. >> and the markets are doing that, but not as rapidly as they did in germany. i think you'll see as we finish the taper, the last few times qe ended, yield on 10-year was done. looks like it's going to do it again. >> art, see you soon, thank you. art cashin. health care costs rise, and how are big companies handling? increasingly turning to the workers as jim referenced in the last hour of the program. we have the details on the 2015 insurance plans back at hq. >> simon, be ready to be a better health care consumer. according to the national survey on health out this hour, and employers bet the best way to drive down costs now is put workers at the center of the decision, and in 20 15, that means we're going to have more skin in the game, all paying more outs of pocket costs, and to meet requirements for coverage to full-time workers under the act, the nation's

companies are increasingly turning to lower costs, high deductible plans and over half the employers surveyed say they are expanding plan options while about a third will only offer high plans next year, that's up from 21% in 2014, and 75 % say no matter what, they are offering new online pricing and decision tools to help workers find lower cost alternatives. >> employers are looking to put their employees in the driver's seat. they are arming them with decision support tools, arming them with more health care shopping resources, which is really an attempt to give employees more visibility to what health care costs really look like. >> a lot of big firms like our parent company, comcast, turns to castlight and other insurers to provide online tools next year to coax us to be better shoppers. when it comes to taking the shopping experience further

moving to defined benefit plans on private insurance exchanges that are provided by folks like powers watson, the survey finds more large employers use that option for retirees in 20 15, but holding off for the active employees, they want to maintain control. more now on cnbc.com. carl, a lot of changes ahead next year. >> i just have to interject here. how can you dress up or how can one, as they are, dress up the fact that employers are going to have bigger deductibles for the staff? in other words, less generous and dressing up is the idea you put the employee in the driver's seat? >> because there are employees who are younger, for example, who do not utilize as much, and for them to stay in the game, they want to offer them lower cost options. so these high dedugtble plans have lower premiums, what people want. idea is if you stay healthier, avoid needing to have chronic care. you will ultimately pay less. >> sorry, i smell bs, but that's

my opinion. >> it's a process. it's a process. it's a change coming for all of us. >> thank you so much. when we come back, king crushed after the disappointing quarterly results triggered a slew of downgrades, stock's down more than 30% from the ipo price. how or will the company recover? the ceo of twitter, dick costolo, challenged the ice bucket challenge with me, to raise awareness for als, and it's a phenomena around the country. dick will get his wish later this morning. rchases for my business. and i get a lot in return with ink plus from chase. like 50,000 bonus points when i spent $5,000 in the first 3 months after i opened my account. and i earn 5 times the rewards on internet, phone services and at office supply stores. with ink plus i can choose how to redeem my points. travel, gift cards, even cash back. and my rewards points won't expire. so you can make owning a business

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welcome back, and stocks moving lower after the diagnostic company forecasted lower than expected profits pressured in part by termination of the contract with health insurance provider horizon blue cross. shares currently just off their session lowings as, carl, down close by 8%. back to you. >> thanks a lot. king digital crushed after candy crush might be a one-hit wonder with shareholders agreeing to a six-month lockup. what's that mean? we are here at post nine with more on not just the worst day stock-wise but lowest on record today. >> we talked about it, and the question was is this pixar or zinga continuing to head in that

direction? candy crush is one of a kind, and it is deteriorating. they said that gross book, were $611 million, down 35% quarter over quart, and monthly unique users down slightly quarter over university, and monthly unique payers down, so it's like they are getting more money out of fewer payers. they are trying to still milk that candy crush base and make a go of it, but the game mechanics are not even transferring cleanly from candy crush to other games, and if you believe that this company is worth billions and billions of dollars, market cap still, i think, north of $4 billion where zinga is two and a half. you have to believe there's a repeatable model, and they are struggling to prove that. >> of course, zimga has a lot of cash on hand. king wanted an internal growth story, and i don't know they have the cash, do they? >> they have cash, $800 million

still, giving $150 million in special dividend. they are akwaring nonstop game, a singapore gaming, and it's popular allowing for war games and civilization building in platforms, so they've gone to more of that zinga pool of acquiring growth strategies. >> what do you hear about the envelope of new games they'll release? i mean, it's like microsoft, like apple, what's in the pipeline? is it, you know, will it change the story? what do you think of the fact they've extended the lockup, 80% of the shareholders now into next year? is that significant when they pay out $150 million in special dividend. >> batoning down the hatches to me. they talk about the game itself and mechanics that go into making the game, and they try to repeat that envelope, wrap it around other games as well. that's one of the things they are talking about on the call, trying to encourage people to believe in the overall story

while at the same time saying the farm hero saga did not perform as expected because the retention of players did not increase from launch into continuing like other games. said, oh, because the game was optimized, but that showings they don't know how it will go. >> investored yesterday talked about the special dividend and they don't want it. it's primarily exists for the executives, for the board, for the previous shareholders that the potential now that they've extended that lockup, if shares keep going down, here's one way that you can make up some of that value. it's viewed as an olive branch rather than something given to people who own the stock. i am wondering, how bad an idea to announce a special dividend when you should be investing in your business? >> interesting point. they only spent $10 million on nonstock games, 150 million on a special benefit that benefits at the same time. >> that's an sufficient model. look, for example, at myriad,

return cash to the shareholders. that's a grown up thing, arguably today. >> excess cash 15 times to what you're spending on new games. it is suspect. >> they are to have a new model to fuel gaming growth, that they are not a mature company. that's what they are battling. with the dividend, one argues they say one thing and do another. >> wow, well, the pixar-zinga fork in the road will continue to be a topic of discussion. >> always hate to say "i told you so," but actually you love it. >> thanks, john. when we come back, the tax loophole companies like waste management, deere, and southern company have been using for years, but could cost the government more than $200 billion if it gets extended. we'll have details on that when "squawk on the street" comes back. i'm only in my 60's.

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all day on ynbc, in-depth look at america's tax code and what companies are writing off. we have a look at one bush era tax cut companies call ticket. >> when you buy a car, it loses value. let's say the government let you write off half of what you paid for the car chalking up to the depreciation. that's what industrial companies have done for over a decade. it's bonus depreciation, enacted as a bush era tax cut.

jumps capital spending by small businesses, but soon multinational corporations caught wind and it's costly with companies in the spaces writing off nearly a hundred billion dollars, hundreds of billions of dollars in the last decade. they've been ratcheting up capital spending because of that expected discount and decreasing their effective tax rate as a result. some companies writeoff so much in machinery, they enjoyed a negative overall tax rate according to a recent study by citizens for tax justice. utilityings benefit the most from this with petco on the top of the list, notching a negative 33% effective tax rate from 2008 to 12, and power companies in response said savings passed to customers in terms of lower electric bills, but we may never know how much an effect it had on bills. it's in question. the congressional research service says host effective as a temporary stimulus saying what

was effective about is was the fact it was not supposed to last forever, and that's one of the reasons congress allowed it to expire last year, but the house of representatives voted to reinstate it in july. the senate not weighed in yet, but the white house says if it reaches the president's desk, he'll veto it. they say it will forfeit $233 billion in revenue that adds to the deficit in the range of $233 billion over the next five years, $287 billion over the next ten. guys, we talk about goosing capital spending. that's one of the lynch pins in growing the economy, but you get into the debate over at what cost? at what point do they roll off? >> we talk about tax inversions, but the numbers you cite are larger than the conceivable loss from corporations redomiciling, and there's so many other parts of the corporate tax code that led to the question of, are we going to see some sort of broad-based change in taxes across the board in the elimination of the so-called

loopholes with perhaps a lower rate coming. >> there's huge industries of the economy where the purpose of debt is to write down assets, look at leasing, cars, truck, cars, planes, they trade down to affect valuations and always generate tax losses and pass them throughout the corporation to remediate the tax. that's what they did. >> when extenned in 2010, the house committee on small business had a hearing with a bunch of executives in to tell how it was affect k them saying, look, we are buying more computer, more trucks, building more plants because we can write it off, making it an advantage for us. the economy at that point fragile, but companies like waste management were lowering tax bill by $80 million with one tax cut, who is ultimately footing the bill for this? ahead on the show, talk about deere, stock under

pressure as company reports lower profits and cuts the its full year outlook. after the break, talking with an analyst just off this company's conference call. stay with us.

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build of 1.4 million barrels, estimates all over today, looking for a draw of 2 million barrels, and traders looked for a build of 2 million. in between there. prices now, wti trading e inin 4 97.04, lower on the report. what to think about with the crude prices at a nine month low yesterday as a matter of fact. we do have a very well supplied market here, iea saying that opec's output in july up to a five-month high, and also chi china's oil demand going lower year on year, down 2 % in the month of july, supporting other weak china data as well, and in the u.s., demand falls off this time of year, that's why the prices are lower, now dropping under $97 a barrel. brept prices lower as well over the course of the last few days, brent prices at a 13-month lociing the opec numbers go up,

not so much worry about geopolitical tensions at the moment until there's a supply disruption. back to you guys. >> i want to highlight that 6789 that's fascinating, jackie. five or six years ago, trouble in the middle east, shot up to $150 a barrel. >> exactly. >> very, very different this time below a hundred dollars a barrel, talking about supplies, the other main factor is the united states imports far less international oil than it did say five years ago. >> right. all excellent points, prices now acting very rationally to the geopolitical newsment traders said until we see something happen making us pause for worry, we're not going to -- we're not going to sort of have that overweigh the supply-demand balance. >> unless investment bank money in there arguably inflates it. jackie, thank you very much. shares struggle despite the fact it topped estimates this morning. profits fell by 15% dragged down by lower demand for the farm equipment, which, as you know, makes up 80% of the business.

joining us is the senior analyst with an under perform rating and target of 77. eli, welcome to the program. >> thank you very much. >> these guys are struggling with what we see, you know, the excess supply within the farm industry, the price per bushel down to five years lows, surprised by the results? >> better than expected, 233, great company, great execution, but within it, the farm numbers have begun to deteriorate, it's 80% of the company, as expected, giving up for a fourth weaker quarter and clearly a much weaker 2015. you can't fight weak commodity prices, and what's now $3.65 corn. >> cutting back production, what's that do? can you argue they should have seen it coming and cut

production before? >> well, we've known that production was going to get cut, but deere in the first half of the year had to meet its order books and knew there was a strong first half, and now during the process of cutting back and they basically said in the conference call, coverage needed to meet market demand. they cut do much cutting because of the orders to meet, but it's getting weaker and cuts come fast and furious and more for next year most people are anticipating. >> eli, we had a debate on the program about bonus depreciation and whether there's an effect on bottom lines of the company. deere head said earlier they believe bonus depreciation would be restored, but the president plans to veto it if it reaches him. >> bonus does not matter that much. it exists, but happens with the expiration of the bill it's from 50% to 30%. one important to deere companies is section 1 79, small business

writeoffs, and it will help on the margin, but the fundamentals of farm are so much weaker than almost any other sector because of the big drops and low carryovers. you can't fight that. bonus deappreciation, tax incentives won't help it. >> in fairness, eli, the construction of the forresty business, more economically cyclical, is doing well for them internationally. when push comes to shove, what do you do with the stock? it's a great franchise, when is it a buying opportunity? >> well, we put a sale on the stock in the 1990s, halfway there, going to the 70s, and the problem we know is 14 is in trouble, 15 is in trouble, we don't know about 16. farm markets have been down for several years, and it's in the hands of god rather than the politics, but depends on the weather next year and whether or not we stabilize commodity

pricinpric pric prices, that's the key to watch. prices improve, farm income goes up, people buy. right now, you have an extended period of weakness in the foreseeable future and no need to chase when there's other attractive areas in the market. >> eli, for all the problems, 80 is a steady floor. what's the danger of falling beneath that? >> deere is a great company, great execution. they protect the stock at $80, 3% at $80, but the numbers for deere are going down. think what happened to caterpillar with the numbers 98 then 6. deere is 98, now somewhere in the 7s, and it can go lower. probability is that deere stock continues to underperform the market, value into the 70s, awaiting sign of stabilization, and that's a stock that can go down another 10 to 15% from here

if the market is nervous. downside, you can't put to the upside. >> thank you, eli. good to hear from you. >> thank you. when we return, the war of uber and lyft. they say they are just retaliating after they try to get uber to buy the company. anyone a winner on this? mike issac of "the new york times" will be with us after the break. (vo) watching. waiting.

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the public battle got uglier. lyft accused uber of calling and cancelling thousands of rides, and uber tells the "new york times," kwoek, saying, quote, they would go nuclear if we do

not acquire them. saying lyft employees cancelled nearly 19,000 trips. we are joined this morning at post nine, mike, great to have you here thaed. >> thanks for something me. >> you say all is fair in love and war. >> this is essentially a land grab for the two companies now. they both raised hundreds of millions of dollars, i think lyft is valued at $17 billion, something like that, and so it's essentially expanding as fast as you can as hard as you can, and the gloves are off for it. >> how much do you believe has to do with one wanting to either be acquired or acquire the other? >> i mean, lyft has been recently straightforward with, you know, we're going to be a giant ride sharing company, we're going to try and do this car pooling thing, which they just rolled out a few weeks ago, and so i do know that sources told me, like, in the past, they talked about acquisitions, but right now, neither company is

signaling they will be acquiring an acquisition. >> battle between the lyft and benchmark on the uber side? >> google ventures is the biggest investor. dumping like $500 million into them, in uber, in the last round. >> doesn't the battle point to a failure in their own technology? one thing to have a fake twitter handle or a facebook post that's not real, but it's different if you are ordering up cars with drivers in them. if they raised the bar on checking who the customer is, they could eradicate a lot of the difficulty, couldn't they? >> that's interesting. i mean, i'm not sure exactly what you mean -- >> basically, you got drivers who are pretending they want to order cars from the other guy and cancelling them. if you vet who makes the order in the first place better and now they have an account or what the identity was, you would discourage drivers from doing it and long term save a lot of bother and money. >> from what i understand, lyft and uber said that certain employees at each company were

essentially doing burner accounts and just resigning up over and over, so ultimately, it would be easier if they had a better way of identifying these were -- tie it back to the phone number or something like that, so, but, i mean, you can't scale, like, this sabotaging behavior. it's just short term now until someone wins. >> how paranoid do the two companies seem in you'd think if there were one dominant player in the industry, they wouldn't feel the need to go after the other in such a noticeable fashion. how paranoid are they? >> remember uber was a black car service, right? just the high end, doing clients that were willing to pay more than a taxi cab, and lyft came along to take the low end, right? they were doing ride sharing for normal people, anyone who has a car can take be a lyft driver, and they launched uberx for the low end. i think they are playing -- uber

me wants both sides of the market. >> now we have reports of get taxi, israeli-based startup, raised $25 million of $150 million series d. people thought about barriers to entry in the business is not that hard. is that true? >> i mean, if you think about what uber and lyft, they are logistics company. they don't own the drivers. they don't own the cars. i mean, they are matching people together and so, you know, if you can build the technology of matching people together, you can enter the market. >> mike, before you go, i want to ask you about the elephant in the room, which is, in this city, the yellow cab drivers, people that own the medallions, hugely profitable, wealth, litigious, how are they reacting? presumably, if drivers afford to buy their own car, they drain away from the servitude they go into racing around to make $1,000 a week rent. >> right now, you only drive for uber or lyft if you are a

registered member in new york. >> the commissioner explained that. >> yes. ultimately, uber and lyft want to eliminate that distinction and make it so that anyone can do a ride sharing sort of thing, tlc is against that. >> the medallions falling value from a million dollars. >> right, right, exactly. it's entirely threatening to the tlc. >> they will not let it happen. >> lyft tried to do their own thing, and it did not work. nay are see iing they need to wk with the tlc here. i don't know if it works. >> what calls a truce between the two companies? between them, created a hundred thousand jobs. a blanket rule, can't book a car on another service, that's a hundred thousand customers potentially out the market. can they afford that? what's the solution look like? >> it is funny, uber sent messages to the lyft drivers saying you don't do both

services, as far as i understand right now, you still can, but i don't know, maybe it changes in the future, maybe the tlc changes the rules there in new york, but right now, the drivers can pick which service they want to go to, whoever is recruiting with better incentives. now it's a talking point with unions, will be interesting into the fall. >> just keep watching it. >> thanks for coming in. well, 41 on the dow, let's get a market flash back at headquarters. >> check out what's happening with seaworld, simon. the stock sinking after the operator posted weaker than expected quarterly results and forecasts, drop in sales and profits for the full year, and company's blaming the recent debate over its treatment of captive whales for a drop in attendance in the park. it's down by 29%, nearly a third of the value gone, and investers feel they are in a splash zone for seaworld. back to you. >> thank you. the ceo of pandora on "squawk alley" for an exclusive

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standing by. hey, rick. >> hi, and thank you. yesterday, we had a usda report for all you nonfinancial traders out. my guest scrutinizes the report. what did we learn from the usda report yesterday and what may have been missing from the report? >> first off, and most important, we are expecting a record crop now. record production for corn and record production for soybeans in this coming season. so that was to be expected. i think a couple of things that we didn't hear from the usda right now is the corn stalks. right now on farm stalks the highest we've had. producers are holding on to product. that means anytime we see this corn take any kind of a rally they're going to be selling into it for the next several months, into the future. and another thing about the corn market, they told us we're going to get yields about 167. that was about, you know, three points lower than most traders

expected. we were looking for around 170 or so. but i think they maybe saved that increase in production for the next report. and we still are in production with corn. maybe the next two weeks will help a little bit. >> for those not as up on this as you are, when you say farmers are holding a lot of corn product, no harvest yet. where's this corn they're holding? where did it come from? >> all old crop corn. >> so this is what's hitting in the silos from last growing season? >> indeed. >> why isn't it in my food chain? >> it hasn't been marketed. a lot of producers now holding on for better prices. whether that is -- >> current prices, boy, have they changed their tune since the drought. multiyear lows. all right. let's switch gears a bit. talk about soybeans quickly. what do we see in soybeans? >> near term demand is just, remains really incredible here. august soybeans, which do expire tomorrow, jumped $2 here in the --

>> $2? >> a big move for beans, in the past several weeks. >> that's old crop. >> this is old crop. >> if i want to look at new crop? >> there are no beans out there now. >> the august contract expires, it's supply-demand, textbook economics. >> september corn, the next -- september soybeans, i might say, we want to watch that closely see if they get that demand boost like august did. >> closer to the new soybeans that are going to be pulled out of the ground in several months, you're going to see a rolling bull market? >> yes. >> last, not least -- >> until we get to the new crop. >> based what it's going on with putin and russia, ukraine, imports, things like chicken from the u.s. are supposedly banned. what has that done to the meat complex? has it changed cattle, what's it done to chicken prices? >> sold off a lot right now. hogs are 117. down at 97, all the way back to mash. >> does it have something-to-do with what's going on with chicken?

>> indeed it does. when russia banned all agriculture products from the united states, they don't import a lot of beef. some pork right now, but it's really just an insignificant amount. the real thing here is that they banned the imports of churkin. so all of that chicken that would have went to russia is now going to have to be about sore absorbed by the domestic market. chicken will be on sale. >> a substitution effect. those looking for the final holidays to grill steaks might be enticed to put some chicken on the grill. >> that's the last demand poll for this cattle now. >> frank, thank you. everything you wanted to know about grains and livestock right here. see, back to carl, i believe. simon hobbs! back to you. >> hello. thank you very much, rick. can speaking of demand polls, "squawk alley" takes to the air in seven minutes' time. what's onboard with jon fortt. >> hey, simon. lots of good stuff starting with candy crush maker king digital getting crushed in the markets this morning after a poor outlook. jon steinberg will revisit our

debate on that one. also pandora's cfo coming up to talk about international growth prospects, and if you like seeing carl quintanilla warm and dry, your last hour to do it. takes on twitter's ceo in the ice bucket challenge in the noon hour. tune in. that's right. it's just that i'm worried about you know "hidden things..." ok, why's that? no hidden fees, from the bank where no branches equals great rates. and cialis for daily use helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache.

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welcome back to "squawk on the street." i'm julia boorstin in los angeles. check out aol. stook moving higher on a plan to raise convertible bonds amid speculation can to plan a big acquisition. i spoke to the ceo, what he told me. we decided because the convertible debt market is low cost now, we've decided it's the right time to raise capital and went on to say in the transaction marketplace we will continue to look for assets but nothing is imminent. he also said they will use the capital to invest in video content, advertising technology and share buybacks. david and simon, over to you. >> interesting. thank you, julia boorstin. simon, i followed the chairman of soft bank on twitter, and he tweets in japanese. i don't read it but often wondered what he's saying.

particularly lately because soft stock bank hit. talk about alibaba, soft bank owns 34.4% fully diluted. a lot more than the 22.6% yahoo! does. we translated his most recent twit i noticed today. not to mention all the turmoil at sprint. he says when you resolve to proceed in a given direction you will usually face a strong head wind. there is no need to mourn the wind. instead double your efforts. and keep going. >> they're not buying t-mobile. are they? >> they are not. interesting it note those inspirational words who always keeps going. of course, shareholders in soft bank hopes that's the case. stock moving around based on its largest holding. 34.4% fully diluted in alibaba, 79.9% of sprint. big holders in the u.s. of those shares. >> carl, is this the hour you get a bucket of ice water poured over you? >> that's for us to know and you to find out.

>> oh, i smell ratings, carl. i smell ratings. >> thanks, guys. see you later on. it is 4:00 p.m. at king digital headquarters in dublin, ireland. 11:00 a.m. on wall street. "squawk alley" is live. ♪ and welcome to "squawk alley" on this wednesday morning. dow's up some 51 points. nice action. a lot going on in tech. jon steinberg joins us at post nine. great to see you along with jon fortt, kayla tausche. speaking of kayla tausche,

getting clarity on alibaba's highly anti-ed ipo. >> a report they would look to trade on september 16th. of course, we've been expecting that with the delay. supposed to happen last week that would be in the back half of september. i talked to sources this morning. they said, look, still multiple scenarios on the table. one of those, does alibaba see them trading september 16th. another sees it trading on the 23rd. could choose to do a longer road show or start to road show late perp that's the process where the company's management will go on the road and talk to investors. they're do a global road show at least three continents, guys. this is going to be a massive undertaking for the company. all of the bankers are not in one place this week, of course. seeing heavy vacation this week. i'm getting a lot of out of office replies, but you want to have everyone in agreement on exactly when the company shot go public. what should happen. so at least what i'm hearing from sources is, yes, 16ths