popularity, and there's the issue of dyes and sugar, and foods natural are bigger sellers, plus the horse hoovs. i like the jello. i like it. >> put fruit in it i don't like it. >> i do. see you monday, and "squawk on the street" starts right now. good morning, welcome to "squawk on the street," i'm david faber with simon hobbs and cz sarah eisen. carl and jim are off. we have the annual symposium in jackson hole, wyoming. watch is on to see if yellen provides clues into the feds' interest rate outlook or change, perhaps, in that key outlook. i could just look that beautiful view. >> the sun is coming up. i love the gathering of economic papers, a discussion among top

economicists and central bankers is the entire focus for one day. >> decided to make it wonky and focus on the labor market. i would be quite nervous, the financial markets, for the next 90 minutes because the world and the dog thinks she will be dovish, push the time line back for raising rates, keep it back so we surpass 2,000 on the s&p 500. that's what the market's positioned, what will happen, and it makes me nervous. >> 28 record closes, up 14, amazing statistic. the market climbs a wall of worry. >> it's a belief the central bank is there for you, basically. >> a wall of worry. >> that's been the belief for a period of time, and there's those who blame rises in all asset classes are starting signs of speculation. you got reits per yield, and yellen does, as you suppose she may, strike a dovish tone, simon

-- >> concern she won't, but that is the market belief she will strike dovish. >> we have draghi and what's going on in europe. >> we do. as put yesterday, of course, dissented from the fomc in july, but the fed is running a risky policy and is not reacting to the change in the data, and she's choosing to talk solely about the labor market. maybe this is a smoke screen for the mandate of the market, but what they work out, how they exit these huge positions that they have without actually causing financial upset, which is a clear possibility. did you see, now, $1 trillion of corporate debt has been sold again in this country, this year, at super low interest rates. >> and it is the fuel of what's going on of cheap rates of borrowing, no doubt, talking about m&a and see it today, a deal like one that's not going to get a lot of headlines, but

borrowing significantly to get units from duke energy this morning. that is, again, a deal occurring because of extraordinary low rates of borrowing and willingness to bridge and the junk market is unbelievele. >> will they invest in businesses in terms of capital expenditures, and we are seeing a little bit, but not the levels in the healthier economy. the other question, i think, with the federal reserve is the other members, hawks of the fed, speak out louder as they do in opposition to the core of the fed about why now might be the time to start thinking about policy normalization. you mentioned charlie of the philadelphia fed, we heard from jim on "squawk box" earlier talking about how he says the markets in the economy would be okay for the federal reserve to start moving towards the conversation. >> i suspect she doesn't have to speak for the entire fomc, just her as chair and as an individual and reflect the academic discussion where we are in labor markets, but people think there's little more they

can do with super low, super accommodative monetary policy. it will not shift the picture that much. >> shift the markets? the jackson hole speech comes a day after it hit record intraday and closing high. the index within eight points of the 2,000 mark. we have the pnc financial services, and brian, the chief investment strategist with demo capital markets. brian, i know everybody's looking to yellen at 10:00, but, for me, mario draghi in the 2:00 hour is more interesting, scoped to do something in the economy. >> well, we think so as well. i mean, europe has been a dramatic underperformer after a big snap back, low quality rally last year, and people thought that europe and emerging markets could come back this year. bottom line is what investors are telling you is that america remains not only the stable asset, but the one that is growing as well.

however, we are teetering on the break of a pause. we have to pause at some point. markets are stretched from our near term and longer term, as yo know, remain bullish, but we would love to echo mr. hobb's comments this morning. the market is too bullish right now, and depending on the fed, the near term basis and dissension increases on the fed, that's noise investors have to deal with in a still very macro-oriented market. the market has depend on growth and sales growth and things like that. we think that's fourth quarter into 2015 type story. >> are you saying it's a buy the rumor, sell the fact with the yellen speech today? >> we think so, especially begin the fact our target's at 19 00 for year end, and the markets go higher, everyone raises their target. we maintain 1900 target all yearlong. we think the fourth quarter

could be bumpier than people think and surprised how strong the market's been on this dip in august, but now everyone's counting on seasonality to be strong in the fall where it was stronger in the summer time. you can't have it both ways. stocks can be bumpy on the near term basis. >> it's legitimate for the chair to talk about the labor market, part of the mandate, wholly legitimate today, but is she being naive creating one-way risk in the market, the market believing it can chase a dovish yellen or the bond market able to rally and her pushing timelines where we get a repricing pushing timelines further and further back. >> well, i don't think she's being naive at all or push it back. i think you'll hear more of what you hear from her in the testimony back in july. she's looking at a dash board of

different indicators of the job market, wages is certainly part of that, and there's been improvement. there's been improvement in the hiring rate. it's going up. the number of job openings are up. you might hear her talk a little bit about that, but wont set new policies. she will be speaking for herself, and i don't think she'll try to push back timing and probably going to reaffirm that qe will end in november, and, yes, it'll be sometime, very much data dependent on when the fedes moves the fund rate hike. >> the point i make here, if she comes along and says, look, i think low interest rates can do more for the market, said in isolation, if that's the central message, people will not concentrate the fact they are intending to raise rates any time soon with the absence of other commentary, surely. that's what i mean by pushing the timelines back by default. >> i don't think she'll say

anything directly about the market. she'll talk about the economy. if the earnings are good, and we saw earnings surprised now in the second quarter and the economy was stronger as we thought it would be, so i don't think she's trying to speak to the markets. i think she's trying to speak to the economy, trying to speak to markets to average individuals, and i don't think the message is market centric, and it's going to be a lot of progress has been made, but more needs to be made, and i think the real issue, and jim talk about it, is how much slack is there in the job market? is it significant as the feds' statement said, or is it less, and i don't think you're going to hear her say anything difrt than what was in the statement. significant slack in the job market. >> there's a lot of talk of slack. >> much more so than a year ago. >> slack is the word of 2014 i think. the debate from the investers' stand point shifted. what is more important, the timing of the first rate hike or

scope of what happens after that? the pace of the hiking cycle. >> scope and overall trend, sarah, especially given the fact that earnings have been good, sales growth coming back, america's proven from a fundamental perspective business and cap x increases through this and jobs come back to north ameri america. it's how hard they crank it up. the message is trying to be as simple and easy as possible. caught between a rock and hard place, frankly, because the data is saying that things are heating up more, but she has to be simple and calm for the markets. it's ridiculous a. the end of the day, it's a good thing when rates go up baa the economy is improving and should act appropriately being positive. that's what fuels the bull market. >> i totally agree with that, that it's good news when the fed raises rates. it's good news they will end quantitative easing, a sign of confidence for the economy, and

it will be the economy doing better, the drive is better, labor numbers, and ultimately drive the fed to begin with the normalization process, and, of course, it's not the first rate hike that's important, by it's the pace of those pay hikes thereafter. >> right. we have not got much on that yet. >> they said it will be measured. >> yeah, all right, well, thanks, guys, an ongoing debate. >> thank you. >> good to see you both. okay. let's move on to corporate news, specifically retail. the gap reported second quarter earns of 70 cents a share, beating wall street's forecast and raise the the full year profit guidance, but aeropostal, a down beat outlook posting a 46 cents loss, the result days after the company announced a change in ceos, bringing back a former ceo there, aeropostal blames, guys, the store traffic. look at the detail of the average sale price is good, but

can't get the store traffic, it say, anding iffing a worst result in the back-to-school quarter as well. >> no good news from aeropostal. i looked at the gap release, twam. if you divide it up, it's different stories. they have banana republic and old navy. old navy is the bright spot for sales, 4% growth, 5% decline at gap, the mainstay. they'll open 40 new stores in india, expansion into india. >> with a partner so they reduce cost. >> i don't know what you think about old navy. they put the athletic wear, i believe, in old navy, a hot seller, denim, which gap relies upon, the name sake brand is there, being one of our fashion beat reporters. >> yes. that is not something i've ever done, but thank you for that. they benefitted greatly, of course, from merchandising better, gap, over a long period

of time now after what had been some terrible years, but that seems to have reached its peak. you have to keep refreshing. old navy, man, that stuff is cheap. i'll tell you that. >> cheap, but fashionable. >> i've been there recently. >> wearing old navy? >> it would keep our budget low. >> $5 flip-flops. >> a pair of shorts for $15. >> probably cold, though as the weather changes. >> board shorts, remember that? gap was going to refresh by september 1st in time for fall and align that with the merchandising, so the ceo raised the enthusiasm level with that. >> working on her on as you know. >> exactly. interested to see. all right, more retail news coming up, and hear what the man home depot chose to be next ceo is saying about the retailer's future. there he is. look at futures again. we're poised for a lower opening there on the broader averages.

more "squawk on the street" live from post nine when we return.

world markets are waiting for events in jackson hole today. yelp, of course, in 45 minutes time giving a keynote address on the labor market and further indication as to where we're going on monetary policy at the fed. a lot of controversy and

wonkiness. we are waiting for yellen to emerge. i think it's not raining there, so chances are she'll emerge for the cameras shortly and bring it to you live. in advance, of course, speaking at 10:00 a.m., and we'll have details of that speech then and there at 10:00 curtesy of steve, who is currently in a locked room. >> what's follow-unny, i've bee there, the jackson lakes lodge. you are looking at the patio outside the dining room, the conference room, and ceremony, the chair comes out, does a wave, funny, almost red carpet moment of jackson hole. that's what we're showing you, and, of course, we'll bring that to you. >> a central bank cat walk. >> exactly. maybe she'll wave to the camera. the company's president of u.s. retail will become the ceo in november, succeeding frank blake who spent seven years on the top job and will remain chairman.

this month on "closing bell," kelly spoke to him and he told her what he sees ahead for home depot. >> the future, i think, is incredibly bright for the home depot. we look at the interconnected retail world as a growth opportunity for us. if you think about 2013, our company grew $5 billion in total, and about 900 million of that came through homedepot.com in our retail opportunities. i think as you look forward in the future, that's really an enormous opportunity for the home depot and its shareholders. >> and you guys remember that home depot reported earnings this week, a strong quarter, and mr. blake is leaving at a time where he seems to be riding high. analysts said execution is key. >> the stock price will be better. >> blake is lauded for his leadership taking over the company at a time when the

company was not doing extraordinary well. he's staying on as chairman, and that's important to point out. >> sure. >> but you're right, even the last quarter was reflective, at least, of what many say has been a new home depot under mr. blake and leadership over the last number of years. >> going over the notes this morning seeing what the commentary is on the new ceo. piper says while blake has been, only, a big success and tied to the key initiatives since turning around the company, he's been tied to successfulness, and they are optimistic. shouldn't be a difficult transition. >> it's not difficult transition. >> but an important one. moving on to sales this morning as well. the company reporting and raising its full year forecast reporting profit of 13 cents a share, ahead of wall street's estimates. revenue above consensus helped by strong sales of the cloud based software. here's what the ceo told jim

cramer last night on "mad money." >> we've crossed the $5 billion revenue rend rate as well. i don't think there's a company that grew at 38% rend rate before, and that's why salesforce.com is so excited today. >> yeah, 38% revenue growth, and everything across the board growing at 30%. we'll see how the stock reacts today. it is looking, as you see, up a bit. up a bit. cram cramer certainly a big fan. >> interesting comments, acquisiti acquisition, $319. he atepds regularly a dinner with a strong emerging company, and two looked me in the eye, and said this never happened before, you really need to buy rene, described as salesforce.com on steroids. >> said that on the call. they did a number of acquisitions to build up the profile. that's the key strategy. i like how he paid more than

what was worth. >> depends how you integrate it and what you do with it. up next, wall street, veteran art cashin, and counting down to the opening bell and more specifically, janet yellen speaking in 45 minutes time. it's live here, the commentary at least, on cnbc. we believe g the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.

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yellen. good morning, art. how is the market positioned for yell yellen? >> the rise over the two days was short covering, people wanted to reduce risk. those who were short, it's been a painful experience coming into this, so i would tend to lean with you that, if anything, there may be a 64/40 risk she disappoints because standards are high here. >> by disappointing, you mean not being super dovish? >> not offering an open-ended promise to remain low forever. i think the viewers should realize we may get another shoot to fall if we hear from draghi later. that could be equally important given the state of where europe is and how difficult it is for them to do the equivalent of qe3. >> i'm imagining this is what you think, people think qe is a possibility, but may say, no, i have to wait for the existing package to work its way through,

we have to go through the stress test of the european bank, and now is not the time. >> i think not only now is not the time, but he'll have structural problems, and, quite frankly, what good would qe do? i mean, you got the 10-year bund at 1%, where do you move to? >> weaken the euro further, they could use that, and the euro finally moved down a little. stocks, august shaping up to be the second best month of the year behind february. started out rocky. is it just the federal reserve's expectations? are we overplaying that too much? the economic data has been pretty solid, and earnings have been better than expected including revenue growth. >> no, economic data has been good, and we began the month with a whole set of pressing o geopolitical fears and problems, and they diminished somewhat. we were hoping we wouldn't have to worry about the ukraine until tuesday when putin has a meeting, but as we saw overnight, the convoy moved in,

and markets got nervous, calmed again somewhat, and yellen is back to center stage. >> just to highlight that. the russian trucks broke through the ukrainian border without red cross escort, and still we're flat on futures. appears not to matter to this market at the moment. >> well, it doesn't matter quite as much because recall last friday, we had a big case of the boy who cried wolf, and everybody thought that there was an take on a convoy, which, apparently, never really happened. >> oh, really? >> well, did you see the wreckage? if i were ukraine, rush a to bring a photo of the destruction i brought on my russian foe. >> okay. the talk is that -- the talk is that yellen could push us past 2,000 on the s&p. how likely do you think that is, what is the redistense on the last fewpoints? >> well, it's more psychological than anything else. you have don't past the point of an easy count here. as i say, i think that they have

such high hopes for her, they may have a situation where this 60/40 chance disappoints. >> we'll see you later in the show. opening bell moments away, stick with us on "squawk on the street." in india we have 400 million people

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from td ameritrade. you're watching "squawk on the street" live from the mark, where the opening bell is set to ring in one minute. one minute. of course, it's about yellen today on this august friday as people are focused on vacation next week. >> markets thin, a bit of news can move them a long way, david faber. >> minutes away from the 2000 level. a remarkably resilient uphill climb. draghi speaks, and, by the way -- >> is this yellen emerging here? >> that's the deck. i don't see her yet, but we are counting down and watching. jackson hole, wyoming. >> like the pope and the vatin. >> that's what is funny about

it. >> all right. we are ready here for the opening bell, of course, on this friday morning. there it is. getting together to figure out when we'll have more green or red on that board as we watch the 500 stocks, the s&p500. new york yankee closer, david robertson, ringing the bell. i'm a mets fan, but he's good, did a good job. over at the nasdaq, the street league skate boarding kicking off nike super crown world championships this sunday in newark, new jersey. you'll be there at the championships. >> oh, yeah, you think so? >> you're a big fan. >> what a joke. gamestop, the number one performer in the s&p 500 up 8 %. game stop has results. it was a rocky road earlier in

the year, but these results beat the street thanks to the new consul. >> refresh and technology brand as well. >> a good quarter for game stock. >> unfortunate news with the ceo. >> he's unwell. however, he's still in the job. >> there's a press release out. >> not traveling for six weeks. >> said it would not affect leadership, had a brain tumor -- >> let's not dwell on it. he's not well. let's move on. >> let's move on to news, the continuing battle between allegan and valiant. the key is the ability to call a special meeting by delivering more than 25 % of the votes for said request for special meeting. we have been waiting to do that, and i can tell you today, according to sources familiar with the situation, valeant and

persing will request the special meeting delivers 30% of the outstanding shares requesting special meeting. again, that is expected to be done today by the close of business. valeant will request a special meeting of shareholders, and will have done so by presenting more than 25 % required under the company's by laws. what happens from here? well, it gets complicated. we mentioned a number of times the hurdles in front of the ability to call that special meeting. you need to present, for example, two years of trading histo history. there's a high likelihood, i argue, once they look through it, go through the 120 days they have before they have to actually call the meeting, they'll question some of the paper work most likely, and this

ends up in court in delaware. there said, there's app kpsaid, there's a special meeting before the end of the year probably in december. this is not a surprise, but, again, in terms of timing, valeant sources expect to present 30% of the shares. persing square on 9.7 %, roughly 20% of the shares with high hurdles in terms of being able to do it because you do have it to fill out a lot of paperwork. interesting to see all the holders to express will if they decided to include the opportunity to request the special meeting at 25%. you think, well, go ahead and do it. >> how does it play out? what's the upshot of this? it's confusing. >> oh, man, we still don't know. allergan raged a spirited defense; one that's more spirited than many anticipated

and raised chances they'll remain endependent. we also, as i mentioned many times, reported this week from others, they have been looking at a potential acquisition, doing a lot to end this if they were to use up the balance sheet capacity for an all cash acquisition, whether it's salix or pharma. nothing imminent there, and then you have valeant and the question to grow or ggranograni they introduced targets for 2015 for shares moving unaffected stock price far higher than valeant argues, just to say i don't know. >> messy, and stock's down off the high. >> green mountain left at the open. >> correct. >> a nice licensing deal with kraft where they make a lot of the coffee products in cups to be used in the machine, so that, obviously, expands the reach and

drives more people towards the machines. a kbig gainer there up over 7%. >> maxwell house, uban, and nick cafe p brands are the portfolio of kraft. this comets. green mountain's amazing run, we talked about the google ipo, the 10-year anniversary this week, ten stocks performed according to capital iq better than google over the last decade, and green mountain was number one. >> really? are you kidding? >> no. >> i would have never guessed. >> look at the other ones, apple was four, priceline was up there. it's the sort of disrupter bunch. new concepts, gainers. thought it interesting. >> it is. it's a mixed bag week as we mentioned for retail. the gap, which is up as we thought it might be given those numbers, and home depot shares responding, not many in any way

or shape or form. i got to come back to sears' holdings if i can. look at the stock down again. that was such a poor quarter. journal reported they are looking at ways to access more capital at the company. >> what's left to sell in. >> not much at this point, not much left to sell. what they need to do is try to figure out how to turn the company around, which is clearly not an easy thing in any way, shape, or form, particularly for, you know, lambert. i'll share a comment from someone's views on retail, i will not quote them, but i value, saying, hey, he doesn't know enough about retailing to know he's even an original. who would have thought the ceo of sears and k-mart would be doing his thing in miami and aspen. that's where he hangs out. get a truck like sam walton and

live in the stores so he might meet a customer. >> yeah, unacceptable. >> that's a relevant, and that's what macy's is good at, knows what sells in the store. you can bring in a city slicker what sells this season, and that is the cutting edge of retail, whether you like it or not. another gainer in the s&p was ross. did you mention ross? ross sales coming in better than expected, higher profit, ngzing guidance for ross, call it off price retailer, turning around business lately, improving margins, doling with expense better, and wall street likes results of that, up 6.3%. all right. let's get what's moving. >> good morning, david. the story is what's not moving right now. the reason why i say that, the important part here is we have obviously a lot of stuff coming up throughout the course of the

day, and traders right now are just maybe jocking for position. look at the s&p 500 over the court of the past week. we've been in a nice little miniwinning streak. up 2% in the course of the past week, pulling off record highs in the s&p 500. look at where the action and leadership has been over the past week, look at the winners, industrials, financials, technology, up all by 2 and 3%. they are cyclical or economically focused sectors. they go up and down as the economy goes up and down more. financials and technology, the heavily weighted sectors on the s&p. look at the 10-year yield. speakers speak, it's about the effect on the dollar and treasury market. we'll call it just about flat

here pulling from the highs as rates ticked up since the minutes came out this week. if you want to know what's going to happen here, every single trader said we're not going to do anything until 2:00 this afternoon. at 10:00 a.m. like you said all morning, that's when fed chairman yellen speaks, 10:00 a.m. eastern time, ecb president, mario draghi at 2:30 p.m. eastern time. the two biggest central banks in the world having comments aired here could have an impact on the markets. one trader came to me before we went on air here and said, you know, i'm loaded up to sell here. i got my finger on the sell trigger, not because of anything else, but because we had a nice run and looking for any kind of excuse. maybe this could be, simon, buy on the rumor, buy on the news activity heading into the afternoon session. >> both equities and treasuries. thank you. 20 minutes and counting until we get yellen. let's go to the nasdaq to see what's moving in trade. >> good morning, stocks giving

back a little after the nasdaq 1 00 witnessed its strongest seven day winning streak in six months, setting a new 14 -year high, despite tensions overseas and prospect of rising rates. jackson hole is the mover in today's trade. with that said, as we are here friday, let's look at the big winners for the week on the nasd nasdaq. it's been a big week. a lot of big movers in tech, yahoo! and intel up 5% for the week as the s&p index and trade kept a new 52-week high. apple breaking $100 a share ahead of the iphone6 launch. rioters reporting today apple splieders rushing to get the screens ready for the new iphone. unclear whether this delays the launch. but apple shares lower on the day. check out today's active stocks. look at el polo loco, further

expanding presence into texas. that stock on today's move in the trade, and ross stores better than expected earnings, and the fresh market, the specialty retailer focusing on local produce and ogranic foods, that's moving in today's trade after reporting earnings last night. back to you. >> thank you very much. let's focus on a deal today, mentioned in light of simon's comments 07 record r of death this year, and record poe waiting the fed chair comments she'll make not long from now, and, man, they are generous, aren't they? you need look not further of a deal between duke energy and also a purchase by -- from energy capital partners as well of power plants in the midwest, new england, pennsylvania. they use an aenormous amount of debt to get it done.

a company, you may remember, bankrupt in 201 1. they emerged quickly. it was in 2012 that the company emerged from bankruptcy. this morning, stock up sharply, as you see. it is really the overall use here of the debt markets to fund the transaction that's caught my eye. it intends to issue $5 billion in new unsecured bonds, $5 billion, a billion and a quarter in equity linked securities as well. they also got revolving credit facilities. their capacity, there it goes to 1.425 billion, and capital and cash collateral postings as well. nay are accessing the debt markets for what is extraordinarily cheap capital to get deals done. the market reacting positively, acquiring a good deal of cash flow to then help to pay down

that very debt that's acquired, but this is not something, sarah, many argue that took place even a couple years ago, the wlness of investors stepping up for a company that was bankrupt not long ago that's reemerged and able to come into the markets and borrow at exceedingly -- we don't know what the rates are -- low rates, junk credit, bridge financing first to take them to a $5 billion unsecured bond offering. that's what we are dealing with, and some would say where speaklation is creeping up when you get to this kind of a thing, not to specifically site, but it is going on, a trillion dollars. >> that's why everyone was freaking out and what it meant a few weeks ago from the junk bond fund. >> came back quickly. >> it came back, risk taking is there, and there's low rates. >> open question is if you have trillions of dollars of extra debt, when interest rates turn, who take the losses on the assets, or are you so -- do you

believe your interest rates are not going to rise substantially because you think the fed and environment will be so benign that it's wovrt holding on to the debt when it was not six month es ago. is that the cutting edge of monetary policy and rally yields? >> right. the ability of corporations to borrow in deep debt markets at rates they'll never see again and repair their balance sheets, seeing the repair take place in 2009, 2010, and 2011 and now used for growth capital is a key story. >> one of the objectives of the federal reserve, why there's low rates in place to begin with. >> unless you are unstable because your ballooning in certain areas. >> excess, bubbles, a good question. speaking of energy, commodity ahead of yellen's speech. hey, jackie. >> good morning, sarah. leaving you in suspense on oil

prices for a moment. gold prices ahead of yellen, there's a pop today, four bucks at the 1279 level after gold was whacked yesterday. there's short covering and seeing a little safe haven buying on the russia u yoo crane headlines as well. most traders do not expect t sew anything new frft testimony. if there's inflation, gold prices could move around, but not high kpchgss this. meantime, switch and talk about oil prices because they are lower on both sides of the atlantic. we are seeing west texas interimmediate now over $93 a barrel, and brent over 10 2. there's a decline on a well-supplied plarky eied marke demand is the highest in four years, and that's why we are seeing a little support at the levels as well. we'll watch prices closely throughout the day to see what happens on the back of yellen and back of the equity session, back to you. >> thank you very much.

coming up, gap is one of this week's winners. can they avoid the funk affecting so many other store chains. big news, wall street, of course, bracing for fed chair yellen's jackson hole speech, set to begin at the top of the hour, 14 minutes and counting." squawk on the street" will be right back. clvp for 12 years.

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. shares of gap higher after beating estimates, retailer raise the its profit forecast. the senior analyst at stern ag with a buy rating on gap and $350 -- $50 price target, could get another 10% from here as far as you're concerns. >> happy friday. >> were you surprised to see that it was the lower priced old navy that, again, led the sales growth at the gap group? >> no. i think that old navy's really doing what they need to do right now. they are taking market share, and honestly, the most difficult place right now where there is, and that's the value chain, and i think i'm not surprised by that, banana republic is getting better, starting to turn around,

their women's assortment lagging for a few years. what they need to do is make a dpap assortment, and september is key for that. there's real marketing behind it, the new campaign, the full design team, and you might see that reflection too, getting the story to be more exciting. >> two questions on the answer you got there. what do you think we'll get from the gap in september, and the ceo is promising that people should see big changes in their stores very soon. secondly, why is old navy taking market share from others? what are they doing that's right? >> doing a good job promoting. margtsing campaigns with amy poeler this year, compelling, and driving foot traffic, and kids and baby business is dole well. the gap is under more pressure. they deal with the teen, young adult customer and denim customer, a tougher market. i think they expect things to be better, and, again, new

marketing, easier comparisons, and that's why they rip higher out of earnings season because investors are acknowledging the comparison and cheap valuations zblp they are going after nike, want a piece of the market share, positive comments. when does it, if ever, become a global brand like the other three gap has? >> the ceo ahead a point on the conference call to talk about that and address that. they don't break out the revenue aggressively right now. i think as early as next year, you might see that be the fourth global banner of the business other than old navy, banana, and gap. i think it's a couple stores, hundred million in revenue, profitable, the tipping point where you see the add to the earnings line for the company. >> have a great weekend. thank you for joining us. >> thank you very much. >> ag on the gap. up next, count down to yel

yell yellen's jackson hole speech. "squawk on the street" will be right back. when healthcare gets simpler. when frustration and paperwork decrease. when grandparents get to live at home instead of in a home. so let's do it. let's simplify healthcare. let's close the gap between people and care. in today's market, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today.

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tetons there. >> overcast, huh? >> i don't know which that is we're looking at of the tetons. beautiful jackson hole, wyoming. you covered this a number of times. it's grown in importance through the years as a meeting, and certainly we in the financial community focuses on. >> quite the remarkable history. gaining prominence in the early '80s when paul volker decided to make it there because they knew he was a fan of fly fishing, so they did that to get him to go there, and ever since then, it's been this very important, prominent meeting. it's taken on a global theme, and bernanke raised it, and larry summers was the front runner last year. i remember that. bernanke telegraphed the move, a

month after. >> nobody expects a thriller as goldman sachs put it this time round. what's interesting is the wall street economists are not invited. >> there's always an exclusive guest list and see the likes of the chief economist at goldman sachs. but they focused on academia this year, maybe because that's the topic of the conference, labor market, that could be market moving. >> distorted world markets, but let's not invite them, just talk the labor market. >> it's the crux of what the federal reserve is doing right now. >> they are blowing up a balance sheet that they have to exit. they have rigged so many financial markets. >> the defense of why they are not moving now -- >> that's the issue. >> surely, david. >>, only $4 trillion. >> and still rising. >> that exit's going to take an awfully long time. >> why not talk about that in jackson hole. >> perhaps they will in some way.

perhaps they will. >> so far, with the labor market -- >> yellen was not in charge of the guest list. >> it's really based around the papers. by the way, the best part of jackson hole, and you get this on the kansas city feds' webs e website, down this morning, ok, is the papers, one about robots. >> let's hope that doesn't happen. fed chair yellen is getting ready to deliver the speech. details of the prepared remarks when we come back. how about over there?

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welcome back, breaking news, yellen taking the stage in jackson hole. we have all the headlines, steve? >> reporter: janet yellen and much anticipated speech in jackson hole saying the economy is getting closer to the feds' objectives, and the fomc is in the process of questioning the degree of remaining slack in the labor market, and questioning the timing of rate hikes relative to that spike. she makes no definitive stance on the decision. she says measuring slack should be based on many variables, and there's no simple recipe for appropriate policy in light of the uncertainty around the labor

slack in the market. she says if the labor market progresses rapidly, rate hikes come sooner. if it is slower, rate hikes could be push off. difficult to gauge the amounts of slack in the economy, and difficult to know what target level, and what is full employment in the session. research suggests the labor market changed since the great depression, and some have been structural. permanent, in other words, and others are cyclical, and that line, she says, is difficult to gauge, what is structural and cyclical. the cyclical short fall may have declined, and some portion of retirement, for example, could be cyclical, in other words, people retiring because they can't find jobs. they may come back into the work force later. the rise in involuntary part-time work shows a strong cyclical effect. the rate picks up, she notes, but remains depressed. there's an internal fed market labor gauge putting together 19 different components.

she says that has maybe overstated progress in the market, all the different -- says the unemployment rate may be overstating progress in the labor market. wages, she says, could rise more without creating inflation, and weak wage gains point to weak labor markets, but could reflect pent up wage depolice station, the notion that wages should have fallen more in the great recession, and didn't. she does says there is scope to raise inflation. this is a back and forth academic speech here, but to the extent yellen was more certain about labor slack, suggests less certain -- perhaps there is movement by the fed chair in her thinking about what the appropriate policy is. in that -- if she was certain there was labor slack before, wide open, zero rate monetary policy was appropriate, and now less uncertain, perhaps that zero interest rate policy is no longer appropriate. sarah? >> steve, you've read it at

length. what is your impression coming out of that? you seem what you told us, she's covering aunt ball the bases, y smiez the discussions. >> that's right. the progression of the speech, the first thought, it was wishy-washy, not taking a position. remember, yellen's been out there defending the notion that labor markets, there's a lot of slack in labor markets in that she presents a very balanced case. for every point she makes that there is labor slack, she says, well, maybe not because of this reason. she seems to have moved to the center on this issue, more open to listening to different ideas and maybe different policies around it, but i wouldn't expect anything soon. the only notion to take from this is if there's more evidence that there's less labor slack, then you can see the fed move more quickly. i don't think yellen's decided

that, but i think there's been important movement in the views on the issue. >> steve, you can't see the market boards. we are looking at the intraday movementings here, and it's little trying to decide what to make of this. yields rose slightly at the short end of the curve especially, but now have come back down to earth. to me, it signals she could have been more dovish and laid out more explanation as we saw in the last fed statement for the slack, a defense of the easy, zero interest rate policy, but the fact that she's thoughtfully looking ahead to the progress would seem to be a hawkish sign. i don't want to say "hawkish" because it's not definitive would be way or another. >> not surprisingly, you got that exactly right. i think that the idea that she's more in the middle suggests a movement on her part. she could have done the full-throated defense of the labor slack and easing monetary policy. this not that speech. in fact, i expected more of that

speech than i got here. look at the progression of things. there was a comment in the minutes that was more hawkish suggesting, you know what? things are moving more quickly. the first thing i led with, that the economy is getting closer to the feds's objectives, remember, this is the fed that is gauging its objectives, gauging the progress towards it and setting policy towards that. the minutes and yelp's speech says there's progress towards that. the central question 1 the debate. do we need to start moving up the timing of when the fed will do -- will have lift off? jim poured it on this morning talking about the spring of 2015. our cnbc fed survey consensus is the summer. that's maybe three months. i think that's within the margin of error here, and that seems about right, and then the next debate, which is very, very important to markets, really more important than when, is how far. >> right. >> right now, we have a 3233 end point here. that number could be up, a sharper slope. that's two critical debates now. >> we talked about that too, the

pace and scope for what she does next. >> pace, right zp. >> after the first rate hike. is the upshot the economy is healing, things are looking better, the fed acknowledged it, not this a hurry to raise rates, will in 20 15, but not in a hurry after that. >> let me challenge that. i think what she's saying is there's an open debate now about all of those questions. i don't -- >> i don't know. >> i don't think the statements -- steve, help me out here -- i don't think they send subject to the debate. >> at my peril, i side with simon. >> oh. >> i think there's an open debate inside the fed right now. you see that in the minutes, guys. the back and forth on the issue of labor slack isprobable. you feel the tension in the room. >> it's whether they are trying to accomplish goals we cannot achieve. lose monetary policy may not fix

the market that much more. >> he's not speaking for the fed, but himself. >> so is she in this speech. >> well, part of that, though, that's -- you're both right on that in the sense that there's their own poimpblt of view, but the debate of structural and cyclical, deep inside, runs through the speech. if it's structural, then the fed needs to back off. if it's cyclical, monetary policy theory is that, yes, they nudge the unemployment rate back to the normal rate, but it cannot change the overall unemployment rate of the economy given what the underlying structural policy is. if it ends up being more in the charlie foster world of unemployment, the fed needs to back off. yellen says there's a lot of cyclical factors out there remaining so the fed has work to do. the question is one that miller's come up with, which is if the economy is so much closer to normal, how is it possible, and is it appropriate for monetary policy to be so far from wrong? >>. okay, steve, i'll let you go, you want to watch yellen, and no

cameras allowed to watch that keynote. >> my eyes, that's it. those are the cameras. >> for the moment, thank you very much. we were down 11 points on the dow before janet yellen, got the details of what she was going to say, so net net, up 20 points, not a huge move. bonds moving sloie ining slight within the day's range before. andrew berkley, operating director, and a senior vice president with the westwood fun. david, what do you make of the discussion that we just had and what we know about what yellen will basically present in the next few minutes? >> simon, sounds to me like she's giving herself flexibility. the fed wants plenty of flexibility to make changes in monetary policy based on economic growth and specifically wages, and it does not sound like that's changed. a lot of people are focused on when the first rate hike occurs,

but the important thing is, is what's the glide path? we think that the glide path will be one that's measured gradual, and i heard nothing from the comments to make me think otherwise. >> interesting, david, and a lot of people made that academic point. it's the speed at which rates rise. my question would be, when they signal they raise rates, don't you think the markets reprice? >> well -- >> it's that action we wait for and potential repricing of all risk assets keeping investors up at night, david. >> yeah, the key is, though, we know it's going to happen, simon, this is not 1994 where all the sudden the fed raises the fed funds rate out of the blue and everyone scrambles for the exits. we know it's going to happen. this is the most transparent fed we've had, we know what will happen, the expectation is it's in the middle of next year, and i think the market prices that in well ahead of time, and i don't see there being disruptions.

now, is there additional volatility in the market with no volatility over five years? absolutely. i don't think we have to expect a massive sell off. >> okay. >> based on the fact that interest rates are going up. >> andrew, would you agree with that? >> yeah, i generally agree with that. if there's a take away from the speech, the fed is positioning us for the next phase, right? qe ends in october. that means that monetary policy goes to communication, and we see what the communication is, back and forth argument on the academics, and the fed president disagrees, and meeting minute and feds' activity in six months is the back-and-forth debate, and the markets reprice based on direct, not when they do something. it's anticipatory as the debate goes one way or the other, and the 9:00 indicators show that. real wage growth is important at the end of the day, this is 0 as of now.

until that's climbing away from 0, i don't see repricing in the market. >> we have extended market move here in reaction. the dollar is strengthening. the euro is below 132.50, yields reaching session highs, the 10 -year 2.41, and stocks are strong. what's the take away? >> there's concern that she was going to come out and be overly dovish or hawkish, and she was neither. she did an excellent job saying in the middle of the fareway, giving herself plenty of flexibility, and, or notally, here in the u.s., we're normalizing monetary policy where in europe, in japan, in china, they are still lowering rates and encouraging economic growth. we don't have to do that here anymore. >> you see that in the dollar. >> right, you see that in the dollar. you see that in stocks. >> out of time, but both asking the safe simple question. what is the advice to give to

investors now? >> stay long in the equity markets, reduce the rates in the bond market. >> david, what are you telling investors? >> absolutely same thing. stay long equities. a lot of opportunities in the u.s., and be careful in bond and bond proxies. >> david, andrew, thank you for joining us. have a great weekend, thank you. up next, former dallas fed president weighs in on the statements from jackson hole. he joins us live when "squawk on the street" returns. being able to pay as we go was crucial for a start up. having to fork out a lot of money up front was risky. you can launch a feature really quick, and if the feature doesn't work, we haven't lost anything and we can have something up and running in days. and this would not be possible without the cloud. we are now supporting over 25 million users each month. ideas can be tried and tried again on the ibm cloud. the ibm cloud is the cloud for business.

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dollar higher against the yen and euro as yellen speaks at this hour in jackson hole. we want to discuss the tasks ahead and joining us, former dallas bank president and ceo, bob mcteer, good of you to join us and good to see you. >> my pleasure. >> judging by the market reaction, strong dollar, strong stock, higher treasury yields. she didn't disrupt this remarkable rally that we have seen. obviously, there's a thoughtful debate going on within the federal reserve. how tricky is it for her going to be to defend easy policy, worry about the slack, and at the same time, return to the world where they think about normal policy again in higher rates? >> she's made progress in moving towards her critics. i don't think this talk was as dovish as it could have been. i think it was not hawkish, but

i think she struck a good middle of the road cord. >> if you were still on the fed, obviously, every regional fed has a different flavor, and fisher is vocal, criticizing some of the easy policy, where would you think the interest rates should be right now? move it up earlier? >> yes, but not as early as richard would have. he's had that position a long time when i still thought the feds' policies were just about right. however, now, i ten to agree with him more, time has passed, we've moved towards the goals, and in the right direction, and i think maybe that -- that interest rate move ought to be earlier than the middle of next year when it was going to be in the middle of the next year. >> mr. -- >> may i say that this -- >> carry on, sir. >> i just wanted to say this

structural versus cyclical debate is extremely important because that determines the potential of the economy to grow in real terms, and the fed doesn't want to be trying to make it grow faster than that potential or be in place of consequences. one thing that's missing from what i heard of her speech was references to productivity. people are always referring these days to wage inflation. she mentions that higher wages are not inflationary, but i think that she needs to put more emphasis on what's happening to productivity, and i think it's been pitiful the last three years. >> and where does that then lead you as a logical conclusion if she did? >> you know, in 11, 12, and 13, productivity grew less than 1 % a year on average. in the first quarter, it declined 6.5%. what this means is that the

lowering of the labor force presumption rate and the ratio is exacerbated by the fact that existing employees are not producing anymore than they have been. not only are there fewer workers, but fewer units per hour work. >> let me take you back to the central point you're making, mr. mcteer, agreeing with what our economic reporter, steve, says. that janet yellen moved to the center, decided to answer some of the critics. when she makes an assertion about the labor market, she qualifies it appears from what we've seen so far with the count argument. why do you think she's moving, if she is, to the center at this time, and what is the path she's setting hearse on presumably working towards the point at which she's ready to say enough is enough, we're hiking. >> well, i don't think she's moved a long way.

the reason she's moved is the -- she's supposed to be data dependent, and the data have been coming in a little better than anticipated, especially the up employment rate. >> help moe out, bob, and i know yoif spent 36 years in the federal reserve system, so maybe you can translate this. here's a quote from janet yellen's speech today. quote, assessments of the degree of remaining slack in the labor market need to be more nuanced because of the level of uncertainty on the level of unemployment, consistent with the employment. what does that mean? what's the take away for markets as they try to figure out how to trade this speech? >> well, i guess she's saying it's not really simple. you have to look at all the labor market indicators together, and make a judgment about things.

looking at them together leads you to think the economy's stronger than it appeared to be just two months ago. >> too much focus on slack? slack is a new concept. yellen focused on it, the dash board, other indicators other than the unemployment rate, but too much focus on that given the limitations of monetary policy? >> well, yellen is a kansian economist, and slack is always a part of the vocabulary. it used to mean a combination of the unemployment rate and utilization rate. if unemployment was high and capacity utilization was sub par, you say there's a lot of slack in the economy, and therefore, you run the economy hotter without inflation. >> all right. well, certainly was an academic discussion, so thank you for talking us through. we needed a ph.d. economist for that. bob mcteer, former president of the dallas federal reserve.

>> yellen is still on her feet, and we'll have more analysis on that. there was an expectation that she would be dovish to push the s&p 500 through 2,000. that has not happened. we'll be right back. ♪ ♪ [ male announcer ] during the cadillac summer's best event, lease this 2014 ats for around $299 a month. hurry in -- this exceptional offer ends soon. ♪

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professional investors around the world are filing through the detail of yellen's speech she's currently giving at jackson hole, wyoming. the markets relatively unmoved, equity market down 7 on the dow, and art cashin joining us again, director of floor operations of ubs. what are they saying? >> i think the market is sorting through it. i mean, it was a speech fit for a medieval philosopher. got everything but angels on the head of a pin. i think they are going to try to figure it out. initial reaction was the stock market was an odd-man out because you had the dollar rally. you had yields go up. you had gold go down. in that circumstance, ordinarily, you see slightly weaker prices. i don't think they fully sorted through what it is, and you're going to be subject to a bit

more muffled volatility as we go along here. >> isn't the take away there were no policy clues in the speech? >> yeah, well, i think. you know, she basically, as they eluded to, she stuck on the idea as to whether this slack is structural or cyclical. if it's structural, then they can't do anymore about it, and their job is done to some degree, and they got to go about moving off 0. >> she's not being a strong advocate for lower for longer, balancing everything, there's a debate, having the debate. is that, you know, steve suggested she was moving to the center, mcteer said she's moving to accommodate what the critics are saying. that, in itself, is an important phenomena, surely. >> well, no. i think it shows the fed that's open to move when there is some debate. you know, she will not be the ultimate dove. the super dove, apparently, but

we're -- >> do you think she's losing that debate? is this the beginning of her having to shift? >> i think i'm going to pay a great deal of attention to vice chair stanley fisher from now on. i think as the new adult at the table, he may give you a better look at whether they are shifting. i mean, he's not officially tied down to any one group. >> well, i would assume in the beginning here, just joined the fed, he'll side with yellen at the core of the fed as number two, but what's interesting he could be more clear in the messaging. transparency, communication is so critical with this federal reserve, and as investors try to figure out how to get out of this. >> even more important when tapering is done because it's the transparency and idea of direction that's important. i don't think he'll confront her, but i think he may see himself in the position to be -- >> somewhat closer? >> the queen's first interpreter, if you will.

>> can the market continue to rally with low volatility? is the fed underpinning the moves we have? >> so far, so good. no sign they are considering changes in tapering. we're on the mark. we get to see the other shoe fall, mr. draghi is coming up, and europe is an important partner in this, and we have to see where he'll go. >> thank you. art cashin from ubs. iphone6 expected to launch next month with a bigger screen, but apple fans need to prepare themselves for supply shortages. mori on that after the break.

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built for business. . about an hour into the trading day. we are watching yellen speaking at the symposium, as we speak, and we are seeing market reaction, stocks waivering between gains and losses. we are seeing the short end of the yield curve with the two year higher. the u.s. dollar is stronger versus the euro versus the japanese yen. that's the mover now, guys. consensus is it's hard to make what she said in terms of policy clues and talked slack in the labor market, and as art cashin said, the debate with herself and rest of the fed is whether it's structural, longer lasting, more permanent, or cyclical, meaning the federal reserve can do something about it, at least, by keeping the monetary policy. >> david, you are plugged into investers with relatively deep pockets.

what are they saying to you, or have they moved on? >> i don't think they moved on, simon. i think the focus is if and when rates reverse, what will that look like, and what will it look like specifically with the $4 trillion sheet comes don. how much of the rise in assets has been really responsible simply for the increase in that balance sheet, and to all of those strategists who come on so much and say, well, stocks up now and later as well because the economy will improve, i do hear a chorus that says, come on, there's dislocations caused if and when it begins. >> the stock market is more closely correlated. >> that's where they come down. for now, the hedge fund guys are generally positive that things stay relatively acquiescacquies. >> the leader in the s&p, a lot have to do with earnings story, but green mountain is one of the best performers right now in the

s&p 500. as you see, the stock is up more than 9 % right now, inking a deal with kraft when it comes to coffee to make pods in the keurig machines. kraft makes maxwell house and other brands. more momentum after a banner year. salesforce.com, mentioned earlier, up more than 8%. earnings surprising in a positive way. of course, the ceo talking to jim cramer last night. game stop with a good quarter, up 6%. and ross and gap earnings better for the retailers to end the week. >> the losers today, no huge movers on the downside with the exception of intuit reporting the ceo will be on "squawk alley", of course the show that follows this one after 11:00 eastern. we also want to mention where we are on apple. interesting story from rioterinrioters saying they are scrambling for the iphone6 launch expected

september 9. they changed the design. there was supposed to be -- on the screens, there's a back light. you have two strips of back lighting, and apple thought on the new screen, they could get by with one, but they reversed the decision meaning that the assembly was put on hold through june and july. the question is whether, guys, they can still hit the september 9 launch. i imagine they do. i imagine that you just get a delay in getting some of the inventory on to the shelves. >> isn't that always an issue with the apple release? >> such a huge technological thing to do around the world to release a product. who else does that and cue up year after year. who does that? consul makers, maybe, but unbelievable supply chain accomplishment. >> nike sneakers and apple products. >> and occasionally a video game. >> right. >> on the software side can do that. the key here will be the demand.

clearly, how many people are willing to move up and/or -- >> and move bigger. >> and abandon what they -- this model here, or whatever may be coming -- >> i'm ready. >> you're ready? >> i want a tab let. i like the bigger screen. >> my age, i need the bigger screen. >> yeah. >> are we expecting an iwatch, we're not, are we? >> at least not -- >> at some point, though. >> this is speculation. >> well, you know, the faber view is powerful. >> it is? >> not as powerful as the yellen view. up next, we'll talk to pulitzer prize winner about the grip on the market when "squawk on the street" comes back.

fed chair yellen pointing to the improving u.s. job market in the speech in jackson hole this morning, but noncommittal how it

affects monetary policy. yell yellen's comments are fuelling a rally. the dollar hitting the highest point versus the yen in more than four months. let's talk more about yellen and impact on the market. pulitzer prize winning "new york times" columnist, our friend and contributor, jim stuart. >> it was a typical wonky, academic speech, and economists seeing where to move, what the hints and clues are. you read your share of federal reserve speeches. what do you think? >> there's two key points here. first involves unemployment number. she's saying with all the years of the basic unemployment number, but now we have all the people who pulled out of the market. they are discouraged, demor demoraliz demoralized, maybe they'll come back in, but it's a soft unemployme unemploymented. what numbers are they using exactly? it would be nice to know about that, but that i think is dovish. cutting the other way, the economy is doing better, numbers

are down, and the risk clearly is they move sooner than expected, but what she's saying and what other fed people say is they want to someday right on track barring some major change in the numbers, in the economy, the unemployment rate, they said they will raise the middle of 20 16 -- i mean, 15, and that's when they do it. >> have they said that? we summarized that, surely. >> i love the dots, post them where they think it's going to be, and it costs a certain thing, and dots say mid 20 15, and by the end of 2016, the federal funds rate at 2.5%. focus on that, percentage-wise, it's a big increase, but still a low number. we're talking the end of 20 16. even when they do raise, it's slow and gradual, telegraphing that, and i think yellen wants to keep everybody focused on that. >> is she doing a good job of communication? the objective is to be

transparent? >> she was taken to the wood shed saying, oh, there's a few pockets of fraud, you know, social media -- junk bonds. >> smaller biotech companies. >> it was bizarre. >> suggesting when qe ended, it's six months until they raise rates. >> in the first news conference. >> there's a few wobbles. the fed should not be stock picks, but a good message is we're aware of the potential instability of the overheated market. aware of it, we'll watch it, and that speech, saying,fu was the d responsible? that was the kremlin saying was when and right about thement wa about that. the willingness to talk about it shows she has been sensitive. >> they can write policy at any stage. the issue with the housing bubble in the united states was

rates were far too low for too long. it's not something you correct when you make a move. the question is here are they building up too much risk in financial markets, blowing bubbles they cannot ultimately correct or to the balance sheet point that david makes so well. >> good point. they are talking about this a lot behind the scenes, and, as you point out, the problem is you got bubbles, overheated markets, and so use monetary policy as she has said is a very blunt instrument. that's what she said in the thing. you move the interest rate, and it affects everything in the economy the not just one bubble. you can't say, oh, take the froth out of there. it's a difficult thing for the fed to use, and so they have to really fine tune this carefully. >> i was going to say -- i want to talk about the column this week. >> it's great. >> area of interest to us. >> oh, thank you. this, to me, so outrageous. we know that class actions and shareholder derivatives don't have the greatest track record of rendering justice to the shareholders the way the system works.

this is a new low, hewlett-packard was sued for the disastrous $11 billion autonomy, which is wrote down 8.8 billion. the suit said it was malfeasance by the directors. hp said it's fraud by autonomy. what is it? we'll never know. they are settling the case, the lawyers settled the case on these terms. the shareholders get some unspecified corporate oregon nans reforms, that's it, no money, no change in personnel, no facts or stipulations. the lawyers are hired by hp to sue autonomy up to the tune of $48 million. >> so the allegation here, the allegation is that the lawyers are selling out in order to get the -- swapping sides in order to get $48 million in fees from hp, which is quite happy not to have the trouble. >> oh, of course. hp mewants it to go away. i don't blame them for the deal. i would too. >> larger autonomy, meg whitman

sat where you are yesterday, and it's. t been two years, wheeling of justice turning slowly, and she's awaiting some sort of, perhaps, jurisdictional conclusion there on the part of both the fcc here and office of fraud. >> we have sound from her, actually, on autonomy on that. >> oh. >> the wheels of justice, as you well know, turn slowly, and we appropriately, i believe, turned the investigation over to the department of justice, the fraud office in the u.k., and they are doing their work, and nothing has changed in my mind from the time i, you know, that day after earnings, went on cnbc, and explained exactly what happened, and we feel very confident in our case there. >> jim, to the broader point you were making, can the judges stop this? can they stop attorneys from switching sides? there's other shareholders that want a day in court to say, hang

on, we've not had due diligence here. >> the deal is so bad, shareholders want to intervene and say this is terrible. the judge can stop it. the judge can say, we we're not going forward. judges don't like to interview with settlements. when the party agreed to put it behind, they are reluctant. i don't know that the system changes. if there's a case that should not be approved, this is one, in my view. >> all right, jim, always good to see you. >> thank you. >> thank you for the sneak peek. we'll look for the column this week in the "new york times. ". happy friday, shares of deere, laying off 460 employees as it continues to scale back agricultural equipment. the demand is down, and weak demand is the reason they were downgraded to under perform from neutral and cut the price target ten bucks to $75. they are trading down more than

1.5% at $85 a share. simon? >> thank you very much. up next, russian aid trucks enter ukraine earlier without permission from the government and not escorted by the red cross. ukraine's top security official calls it an invasion. we'll talk to the former u.s. ambassador to the ukraine about the developments when we come back on cnbc. the worst in peopl. but the m-class scans for danger, corrects for lane drifting, and if necessary, it will even brake all by itself. it is a luxury suv engineered to get you there and back safely. for tomorrow is another fight. the 2015 m-class. see your authorized dealer for exceptional offers through mercedes-benz financial services.

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comcast business. built for business. week of order delays, russia sent a dozen of aide trucks unauthorized into ukraine this morning in what kiev called a direct invasion of military vehicles delivers relief aid. they say neither border guards or red cross were allowed to inspect the convoy. joining us now, the former u.s. ambassador to the ukraine, bill taylor, now with the institute of peace, joining us from d.c. welcome to the program, sir.

what do you think of the situation? >> sounds like it's an actual invasion. of course, we recall that the ukraine has been invaded before. the russians invaded crimea, part of ukraine, four months ago, and we recall the russian president and foreign minister denied there were russian troops only a couple weeks later admitted there were troops in crimea. this is in that cop text we see trucks move in ukraine without ukraine approval which has to be called an invasion. >> it could be said to be an invasion of purely aid trucks, may be that it's food, medicine, and generators as they said when they first set them off. do you have information that it's more than that? are they armed, for example? >> i don't have information that's more than that. i understand that the ukrainian border guards inspected 3069 trucks, but we understand there's 90 trucks in ukraine, so

60 without having been fully inspected. that has to be a concern when trucks or any people, convoys come across a border into a country without into a k country without the permission of that country. >> well, given now that we've seen the sanctions starting to really impact russia, or maybe not, mr. ambassador, what can you tell us about what you believe to be president pugh at this point's strategy at this point? everybody who has tried to figure out what president putin's strategy is or was or might be has been wrong. it's very difficult to tell what his strategy is, indeed, if he has a strategy. my own sense is he is acting impetuously. he's acting without a long-term strategy. he took advantage of a change in government in kiev to take crimea, to invade crimea. he's taking advantage of an apparent humanitarian delivery

to incur, to move into ukraine with this convoy. it's hard to tell what his strategy is. >> interesting. i had assumed that he had ordered that the convoy actually be built in the fist place, mr. ambassador. let's leave that to one side. there are two important events now on the calendar. one is independence day, be i believe, in ukraine on sunday, which is when they had hoped they would be able to esengly crush the pro-russian rebels or at least move them to a highly defensive position. the second event, as i understand it, is putin himself is due to meet the rez of the ukraine on tuesday. how do those two events or at least the continued fighting actually bear down on your analysis of what happens over the next week or so? >> there's a third event that bears on that -- on the events over the next week and that is mrs. amerimerkel is scheduled t in kiev tomorrow to meet with president poroshenko. so the european support for

ukrai ukraine, independence day, which is a time to defensemmonstrate world that ukraine is united against this invasion, and then the question of what happens in minsk on tuesday when the two presidents along with other presidents get together to have this conversation. mr. poroshenko has the strong backing of all ukrainians for the first time in ukrainian history he has that support. >> ambassador, this is a finance channel quite clearly. do the markets at any point need to get worried about what is going on here? do you see a major escalation? neither markets in europe nor wall street are particularly affected by the conversation and the detail of what we just discussed. >> markets and others ought to be concerned. this is an invasion. this is a violation of ukrainian sovereignty explicitly so for the first time. it's been implicit up until now. this is the possibility of a war

between russia and ukraine in the heart of europe. so, yes, we market the international community should be concerned. >> will we see tougher economic sanctions on russia as a result? >> it could well be t. could well be. economic sanctions on this overt invasion could be forthcoming. >> ambassador, it's good to see you. thank you for your time. ambassador bill taylor joining us from d.c. let's send it over now to jon fortt with a look at what's coming up on "squawk alley." >> if you like big phones and you cannot lie and you're looking forward to a bigger iphone, there might be some bad news but maybe not as bad for apple itself. we'll take a look. also the ceo of intuit on their new revenue model. the stock is sinking today. we'll see if that's warranted. and finally one of the people who invented g mail talking about security. don't miss it. she's still the one for you.

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so we are wrapping up what has been a pretty decent earnings season. how have companies fared? >> earlier on "squawk bobbing"

all those numbers wrapping up the season, to give you an update on what those were, according to thompson/reuters as of yesterday 96% is reported. the vast majority is done. almost 70% have beaten average analyst estimates. if you look at the overall rate, 10% have met 22% have fallen short of expectations. now earnings per share have risen by about 8.5%. that's better than the 6% analysts thought it was going to go up by earlier in the season. so where is the standout sector or which ones have done the about best? out of the tensectors, five of them have produced double digit earning growth rates. which one did the best overall, how about the one that's leading the pack in terms of performance overall in 20 4? that's health care, one of the petter performing sectors. it's jockeying to be the best performing sector up by 13%. earnings per share for health care stocks grew by nearly 19%.

more than double the growth rate analysts were looking for before the season even started. energy the second best and tech stocks in third place with a very healthy 15% rate. as for the worst performing, utilities and we'll call it financials down about 6.5%. banks and some specific stories are responsible for are that. but, again, the growth rate, the growth rates from the last point from last year into this year have been lower, but only because of specific stories, right, certain companies have overall reported lesser than expected numbers. >> it's not about the buying back of stock in the other sectors. >> well, you saw revenue growth. >> and that's the interesting part about financials. what's interesting about that these are a lot of one-offs, these one-time charges happening dragging that number down. analysts think next quarter, q-3, financials could be the best. >> they're not rallying lake

that, though. >> but maybe they will. they have started. >> they led the rally after the bank of mek news. maybe this is the start of a new chapter. >> not that financials are the best thing to look at but they are the second biggest sector in the s&p. >> you would love that to be the story. >> you know me. >> thanks very much for those numbers. interesting dom mentioned interesting as one of the better performing per share. it's getting hit hard today. energy down the worst. there are a few names, newfield, diamond, transocean. a number of factors hitting energy right now. you have libya coming back online in terms of supply. that could be putting pressure on the price of oil. the dollar is stronger after yellen, moving in the opposite direction. that that are move -- >> what is the move on the dollar? come on. >> the dollar is stronger. it's back to 11-month highs. i wrote about it on cnbc.com yesterday. that's all. >> hence the reason we mention it, i guess. thank you very much. have a great weekend, everybody.

let's hand it over now to "squawk alley" and kayla tausche. >> thank you so much. we'll look at the that are again this hour as it is moving l keep your spirit alive, sarah. it is 8:00 a.m. in san francisco, california. it's 11:00 a.m. hear on wall street and "squawk alley" is live. ♪ another one bites the dust and another one gone ♪ ♪ another one bites the dust hey, i'm going to get you, too ♪ ♪ another one bites the dust ♪ welcome to "squawk alley" on this summer friday. joining us today kara swisher and with us here for the full hour quite a treat, jon steinberg will be with us a