i have viacom, he's got apple. >> that's irrelevant. >> you may be both right or wrong, that's your bid. mine is simple 40 billion, they still have scale. >> this is a -- we've got to go. >> thank you. thank you. sorry. love you, too. join us tomorrow. watch cnbc all day. don't worry about the stupid basketball thing. join us tomorrow. "squawk on the street" is next. ♪ what goes up must come down♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at new york stock exchange. david faber is off. premarket, relative steady but anything looks steady after yesterday's wild ride courtesy of the fed. oil lost a good chunk of yesterday's gains, sitting below the mid-40s there, 43.10. the dollar of course winded after the biggest volatility

that we've seen in currencies pretty much since the financial crisis. road map this morning, apple debuts as a dow component, set to begin trading as part of the enduring index. starbucks announcing new venture in china, testing delivery in new york and ceo howard schultz on "mad money" defending race together. target set to boost its minimum wages. but first up, the dow and the s&p set to open lower, one day after the big fed-induced rally and a drop in the dollar. intraday currencies some of the biggest percentage moves we've seen since the crisis. >> right. these are legendary. you know stuff of when literally seeing the speed of light on trillions of dollars, trillions of currencies are trading, speed of light, very hard to get your hand on. >> the take this morning is that is a lesson for sort of ripple effects that are going to happen in relatively il liquidity

assets as the fed normalizes. >> that's why i like stanley fischer the vice chairman knows what happened in 97 98 in asia. janet yellen, one of the smartest people in the room understands this stuff. i'm impressed with these people. they are just masters. they're not show people. maybe that's what people want out of yl, aellen, song and dance. honor the remarkable work. >> when kernen asked liesman if yellen did a high-five and he said, she probably did, you agree. >> shooyou think she nailed it. >> i think she nailed. some times we have people born and raised in the country and oh their way up. your mom says how are they doopg doing, mom i'm not going to be number one do your best. do your best. janet yellen is the smartest

person in the class, that's okay. we need a smart person. >> what does it say, all of the dovish talk, the lowering of interest rate trajectories and inflation? >> february was a weak month. we'll hear from williams-sonoma today. amazing company. and this port slowdown directly impacted their numbers. we can say, well that's one off. but wait a second oil, how come oil's not going higher? that's one off. housing starts they were weak. that's one off. no, enough. february was weaker. it's true i can point to lennar, say that's a good number. i can point to retailers having a good time. it's easy to say not yet, not yet, not when the world's trying to figure out what to do in terms of restart growth. give the rest of the world a couple of months and we may not be in this jam. >> don't fire until you see the whites of inflation's eyes. >> or s.o.s. band take your time, do it right. how come the "usa today," i've got to tell you, they --

>> zeitgeist. >> yes. larry cramer by the way, involved with race together "usa today." >> interesting. >> larry's an old friend of mine, doing a lot of right things. >> apple trading as a dow component, world's most valuable company replacing at&t. apple ranks fifth in dow weighting despite 748 billion market cap because of the price weighted index. a lot of news. talk about what it's going to do for the dow. there's a new reuters poll showing 40% of adult iphone users are interested in buying the watch. >> i think it's about 110% when we're done. what i keep hearing, what's being written for this thing, this is a receptacle people in health writing for this thing that will make it so you could actually wear a watch on one arm and have that device and not regard it as a watch. that's the way i get to keep the breitling, i think. >> try to keep it i see. >> the apple watch over here.

one style in fashion, one is health. >> yes. i think it's -- reuters poll 39% of adults say we'll take a look at it. "the journal" has a piece on apple tv and our own parent comcast, arguing, back to the consent decree when they bought nbcu, they might be pushed by the ftc to take part in some way at least similar to how other competitors are taking part. >> we work for comcast. when i read that i said it's very unusual for apple to say, we're going to do this but we don't have nbc. it's much more apple style to say, we're going to do this and you know our way or the highway, get on board. we're going to find ways to convince you -- i mean they're not the godfather. they're just saying listen rules say this is okay. it's like when i saw jpmorgan and visa and mastercard in the audience for apple pay, and i was thinking who is going to stop them? it's visa mastercard morgan. and they're in the front row. i'm like wait a second how did

that happen? >> keep your friends close and your -- >> yes. i think so. >> finally, you've been preaching for a long time that apple should not be traded it should be owned. >> yeah. >> does becoming a component make that transition easier? >> you know what? i think there's enough people -- i don't think if you go to college campus now, dow 30. but what it does is there's always people saying i think it's like -- i feel comfortable. makes it even more comfortable. i think what they should be comfortable with is earnings per share, they've got a road map. disney and apple are two companies that seem like every single quarter, when you think they don't have anything they come out with something, yeah look at that. this wasn't in anybody's numbers, this apple tv suddenly i'm thinking that might be the way to go. >> two companies that have had mutual fascination with each other. jobs, the new books being written, talked about, how disappointed he was in disney's

culture after disney's death and the last thing he wanted to happen to apple was the same thing. >> walter isaacson's great book bob iger seems to be the only executive that steve jobs didn't make fun of as soon as he left the room. he actually respected him. >> let's tackle starbucks, announcing joint venture to produce and sell ready-to-drink beverages in china, testing delivery service in seattle and new york city. lots of buzz surrounding controversial race together campaign to spur conversations about race. last night during jim's inter view on "mad money," schultz insisted it's not a ploy to boost business. take a listen. >> there's no part of this on any level that's about marketing or pr or trying to get more business. i don't think it's going to hurt business. we have not seen that in the last 24 hours. this is going to have a long tail to. i think people trust the brand, trust intentions of the company, trust our people and i have

great faith that our people will do the right thing and not put any customer in a situation where they're being handed something they don't want to carry. >> you always say, not here to make friends, you're here to make money. you like this? >> he stressed it was voluntary, i say yes. i do like it. in the interview, you watch the interview, you might think -- i'm trying to get whether it's good for shareholders customers, it's obviously good for the country, i think. that was not my purpose to say is this good for the country, i think the discussion is good. i didn't think it was controversial when it came out, we discussed. but present it when i go to starbucks, do i think about this? i'm looking at people and thinking, like my kids have taught me don't think economically some person may not be doing as well as you economically, don't think race. we're past that. that was 1960 with my parents. but you know what? that's -- it's individual. what howard is saying is it's

individual. i certainly done think it it was done for business definitely not. if you listened to the close circuit meet it was blow away. people want to talk about this and he has great people working for him. anybody who gives them a hard time, it's a shame. >> kareem abdul-jabbar writing, i'm in awe, awe of the company's trying it shocked that they think it will work. >> wow. i met kareem. he's amazing. he won't remember that he met me. i met him -- but that's kind of a good summary. i don't know if it will work but it's amazing. you have to go back to what those people said to him at these different meetings and realize how passionate howard is. remember, he did this gay rights, did for gun control. he's touching every third rail there is mellody hobson talks about this is the third rail. he's got the discussion going. i said is the job done? we're all discussing it.

>> this morning "the times" quotes gwen ifill, if you start to engage me in a race conversation before i've had my morning coffee it will not end well. >> that's what i said. i -- i said listen this is my third place, it's in the ridiculous world that i am in my starbucks is like my safety zone. but then he pointed out that some of the workers feel that's the safety zone to discuss. we all have our own personal spirits. he kept saying it's voluntary. you don't have to up end your safety zone but it's a good thing to talk and i agree with him. the problem is that my morning cup of coffee is really -- >> of course the split, the sixth split and waited longer than usual. 3 of last 5 splits had a five handle when they made the move. now well above that. >> by the way, delivery system i think terrific. let's say there had been no discussion, you know backing

up, there's a lot of good things coming out of starbucks including delivery system more technology, that drive the stock higher. some people might say, the same store's going to go down is dunkin' donuts going higher. so many things in motion if you start a discussion this is it. you know i think there's so many people going to starbucks. he's got a captive group. they're not going to be turned off by this that's my bet but i had to push him on that. i remember on "mad money," i'm thinking, if i don't ask him about earnings per share, what am i a mad scientist? this is "mad money." >> the guidance was in line if you adjust for the split. >> last year he had the meeting, and the stock got hurt two year ago a meeting, the stock got hurt. it didn't happen this time. >> all over the morning shows, absolutely. >> all anyone's talking about other than ncaa. >> target planning a wage hike for workers. walmart set that tone hear what

that ceo had to say about rivals following its lead. the president of lvmh's watch division to cut prices due to surge in the swiss franc. another look at the premarket after the dow climbs that amazing 227 points yesterday, claims in line as well. more "squawk on the street" from post 9 in a moment.

baby i know why you♪ >> after walmart and tjx, another retailer jumping on the wage hike band wagon. reports say target plans to boost pay of all of otherwise workers to at least $9 next month. the discount chain agreeing to pay $10 million in a proposed settlement of the class-action lawsuit related to the 2013 data breach. we remember when walmart made this move more workers in the u.s. walmart's got over 1 million. target has under 400,000, but anecdotally, wage inflation is starting to move. >> i agree. i know -- my charitable trust owns the stock -- and i think a lot of people might have believed when they didn't announce when walmart did they wouldn't. i don't now how people could be surprised. i think the stock's a buy. all of these factored in. that day, tjx had a great quarter and announced it and the stock got hammered.

walmart, got quarter, got hammered. target has to spend a day or two in the woodshed. this is the day of the future. people aren't paid that much and it hits bottom line. remember what jim cinny gal taught us the more you pay them the more they stay. more profitable. let's not be too hasty. >> thor toeor toe tortoise won that race. we did ask doug mcmillon how he would feel, would rivals follow suit. >> changes we're making include structural changes in the stores, wage increases, training programs, and this company, as you know has always been a people business. it's a people business today and it will be tomorrow. and so our associates, their pride in the company, the ownership that they take those things are vital to running a good retail business and today we're investing in them and we want them to know how important

they. >> expect your competitors to match? stocks like target and kroger are down some believe because investors expect they will have to match. >> i think the competitive marketplace works and they'll do what's best for their business. >> what might be more interesting today this port issue. you mentioned williams-sonoma, that's going to save ten cents. >> that's a sobering conference call. by the way an amazing company, 50% is e-commerce and they had such decline in inventory. people go to the stock realize they're out of stock. listen to the conference call. this company is well-run. and it was just a couple of long shore people that did wreck their quarter. that will be finished this quarter. it's not going to be done this quarter's going to be impacted. when that smoke clears you want to buy the stock. the stock will not remain down long. it's on fire other than urban outfitters, the best quarter. you just can't see it because of the port situation. they are hitting on all cylinders. remarkable. >> you've been saying for a

while -- >> i'm blown away how good that company is. probably the fastest growing individual division of any retailer in the country. why do they have a port problem? there's such demand. what pay company. they are so far ahead of everybody else when it comes to e-commerce, it's amazing. >> sticking with the retail theme quickly, "the journal" with a piece on sears, suppliers are getting worried. >> are you telling me within the same paragraph, sears -- carl. i mean honestly. >> they both do sell dry goods, fair enough? >> really. let's talk about -- let's talk about harvard and kentucky? right? harvard can go all the way and finish that first game. may finish harvard. no, you -- yeah you get my drift. >> tough piece on sears today. we know comps through january were down four plus. reit spin-off, story's well told so far. >> it is.

dayton's going to beat them. >> on -- >> that article was devastateing. >> we'll get cramer's "mad dash," count down to the opening bell. a look at the premarket as we bounce back from fed day, a couple of fed days. more "squawk on the street" straight ahead. hello. i am here to offer sophisticated investing strategies. my technology can help you choose the right portfolio. monitor it. and automatically rebalance it. all without charging advisory fees, account service fees or commissions. that may be hard to compute. but i'm a computer. so trust me. it computes. say hello at intelligent.schwab.com can it make a dentist appointment when my teeth are ready? ♪ ♪ can it track my crew's performance, and protect their heads?

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♪ 8:30 until the bell. cramer's "mad dash" this morning. another downgrade for ebay. >> this is controversial, hold to sell piper.

they're saying everyone's coming into the paypal space. now the other day hearing good things about the core ebay. but everyone wants to be in the stock because of paypal. piper points out the facebook initiative -- my charitable trust owns it -- could hurt them. google, google pay. everybody's gunning for ebay. i felt the call may have impact. >> we just had facebook messenger this week. snapchat's in charge venmo. they argue google could still buy paypal. >> i felt they should. the issue is that i think the facebook news my friend robert patton from suntrust if facebook gets this right, it could be game set, match. you know what? i haven't seen facebook get a lot of things wrong. so i mean facebook is the first one that maybe they're the international bank. if i were jpmorgan, i'd be worried about facebook. they'll say, well what is cramer talking about? my kids are on facebook 24/7

not on jpmorgan 24/7. let me post my pictures on jpmorgan. no, i'm not going to do that. i'm going to tell jpmorgan about my trip not going to happen. >> hints of housing recovery at lennar. >> great way to put. lennar's so much better than everybody else. no lennar keeps getting better and better. stewart miller is a great operator. all during the period where housing starts are weak what has he done? i think they're just great at what they do. >> 50 cents beats 45. orders up 18. >> wow. >> delivery's up 19. >> making money on each house. they've done so much to make it be as if the housing stock should not trade together. they should be best of breed and it's this one. i like toll, too, for urban initiatives. >> we talked earlier in the week. i like that miller said starts should rebound, start to rebound. what a relief that would be. >> yes. again, i think that if you sit down with stu would tell you

it's tightness with the credit level with banks and that's totally true. you need a high fico score to get that loan. money has not loosened the way you think it would. that's the big fact. that and the fact we're not having as many kids. >> housing is one thing we cannot afford to lose. >> john stumpf taught me housing punches above its weight. it looks like 10% above the economy, it is multiple times that. when you sit down with john stumpf, he makes more sense than anyone i deal with in banking. >> opening bell in over five minutes. don't go too far. female announcer: right now at sleep train get up to 48 months interest-free financing on tempur-pedic. save hundreds on beautyrest.

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you're watching cnbc's "squawk on the street," live from the financial capital of the world on this thursday. opening bell in just about 2:30. a lot going on today. apple, of course joining the down an economic summit over the eu. currency markets rebounding from a crazy 24 hours. >> and oil going back and testing. we had boone pickens on. last night a fellow on from magellan the largest pipeline for refined product.

demand he says, lives. a good level for demand. this is the level that rich kinder said to me. >> boon did update his forecast. he does see 80 to 90 within 12 to 18 months. >> i mean one of the things i love about boone the rig count would be cut in half. i think it's 60 70. i don't think it gets back to where it is. david cody from honey well thinks it's 50/60. go against these guys you're going against people that have done more work than anybody. i come out with 60 as where we could be 18 months from today. >> transtransocean another charge, dispose of four more rigs total to 16 they've announced. what do you say? stocks down 61% in 12 months. >> not done. only industry that's worse than that is coal. look at clf, i mean iron and

coal, btu, peabody, iron cliff, this and they are all just in secular decline. offshore oil, it's too expensive. so many -- carl, i've looked at log in the section 18 months all billed for $120 oil. it takes forever to build them. way too many. it's awful. >> amazing piece from the journal looking at the fracking equipment for exxon, chevron, royal dutch, gone. >> gone from russia. >> maybe that whole fracking experience. at the same time one of the great shales in colorado magellan's building a pipe $850 million, two quick partners. there's plenty of oil. by the way, plenty of storage space. may seen there isn't but we're importing 7 million barrels a day. we were so full up why aren't we importing nothing? be careful.

>> good point. people talk about 70% capacity and freak out. >> be careful. that's guys taking down storage and selling futures which is a decent trade [ bell ringing ] >> there's the opening bell. big board, it's two harbors investment corp and at the nasdaq alabama-based national commerce corporation, celebrating its ipo today. of course, we will keep our eye on tesla today, jim. the meeting begins at noon where we get the software upgrade. >> we got a note from baird that's saying you should buy the stock, you knucklehead, what are you doing not buying the stock? it's the greatest stock ever. by the way, it also makes great cars. it's a cold stock, people get behind it. he could say we're not going to ship anything it's better than ever. be careful. the guy's a powerful proponent of his own situation. >> cohen sides with new jersey

the governor chris christie, signing a law reversing the stance previously. >> very interesting because you know i mean the dealers are -- everyone talks about how powerful dealers are, they make a lot of money. chris christie this is -- he's taking a national perspective here. hmmm. national perspective. >> let's take a look at apple. maybe we can look at the dow 30 which will include apple for the very first time. >> look, apple is doing so many things right, but up huge yesterday. it's still inexpensive. pick up the paper, something new every day penalty's doing and that's what happened to a great company. i was thinking of walmart when you did that great interview, one of the reason walmart's a tough stock to own, nothing happens to walmart. the really good companies, always on the tape with terrific news doing great things. ones that are going higher. look, let's use starbucks.

you may like -- they're in the headlines and part of the conversation. maybe the morning cup conversation it's a winner not a loser, they didn't do it for that i tell you than good stocks have great news flow and bad ones what's the story there? >> the first component, best performing component in the dow, apple, with nike. >> unh, health maintenance, have great momentum. nike reports tomorrow. be very careful there numbers from retailer that sell nikes. visa, charlie scharf doing well. >> pulte lennar housing names. >> rates stay low. stew says things get better. it's going to get warmer they tell me. >> spring tomorrow expecting three inches of snow in the northeast. >> endless, unhappy. people they call in on "mad

money," i'm here in santa monica, i want to say, you know how i feel? but i hold back because i'm kind of gandhi-like when it comes to callers. that guy, you don't think of gandhi having game? he's the man. >> t-mobile close to the highest level since august. news yesterday making a big push into the enterprise where at&t and verizon hold the court. >> talk about news flow. john legere, he takes it to everybody, right. >> the guy's got a gorilla strategy, and he's -- it's -- he's so big he shouldn't be the gorilla but he's listen i'm the upstart with billions behind me. he's made that group investable. >> do we have sound from john legere? >> fan fastic. >> announcing this. tack a listen. two years almost to the date of taking the uncarrier

revolution to the consumer business we're bringing it to the business markets. the pricing is the pricing, it's very simple the data's included and can be pulled to purchase by line. giving them the tools for the dotcom capabilities on go daddy or microsoft and taking care of their families. >> we know what he's done with the consumer. is this -- is this over the skis? are you worried? >> he's rebel with a cause and the cause to make it so everyone knows he's the cheapest. you can't own at&t, verizon's tough to own, sprint is tough to own because this man is determined to be a rebel breaking price structure. he's your worst nightmare if you're in that industry. because he pops up everywhere. he's on twitter saying we will bury you. like khrushchev takes his shoe off. the guy's amazing. retweeter, too. >> he is. probably watching now. >> 24/7 everywhere. even spencer from zillow had to

take a backseat yesterday. spencer's retweeting him. a big retweet circle. >> the modern model for a ceo, certain type. >> a piece today critical of kent in the "wall street journal" saying he canceled a meeting with the google. t-mobile's not canceling meetings with social media people because he's a dominant social media force. >> you might be asked about rite aid, 3% gain on no real news that we can see. >> people feel it's a takeover situation. i've been recommending earnings situation and the fact they made a brilliant acquisition of a pharmacy benefit manager which what is turned around cvs. rite aid, i begged them to come on. my picture's in my rite aid now because i recommended. >> your local rite aid. >> my picture. greatest guy, tom and jerry, guys behind the counter, fantastic. this is a better run company than it used to be. you shouldn't own it on takeover

talk. the pharmacy benefit manager strategy's brilliant. i think walgreen which got rid of its pbm may go back to it because rite aid's going to get a lot of conversions of customers. you'll see analysts come out positive about this deal. >> certainly a move getting attention. we mentioned williams-sonoma in the last half hour. 3% downside but you think it will be short-lived? >> yeah. these people sell it because they don't read the conference call. conference call well orchestrated and they just say, look guys it's not going to happen this quarter either. they use very damaging very what i regard super cautionary language in the conference call and that's scaring people. don't be scared. let it settle. this quarter's not going to be that good because of the ports but this is the company of the future. everyone -- it's the envy of the whole industry. >> i thought of you this morning with yahoo! news leaving china closing remaining office in the mainland laying off a couple hundred workers. you said the reason you prefer

yahoo! to baba they are not as levered to china. >> no. what yahoo's! doing is looking systemically at the businesses and saying we're not going to do anything stupid anymore. i continue to that marissa mayer's doing a fabulous job, first thing the steward of capital. she did brilliant stuff with alibaba. it's clearly worth something. watch tumbler. >> acquisition stewing for a while. >> she can do anything and people say, well you know what? tim armstrong should take over. john legere should take over yahoo!. would you mine if marissa mayer takes over yahoo!? it's not a bad thing. still owns finance. still owns that vertical tumbler is a terrific vertical. i'm not a pr person for her but i'm a pr person for a stock valued at zero ex-alibaba. >> my favorite graph, increase in corporate cash a third is

yahoo! having made their investment more liquid. >> huge chunk is yahoo! >> great piece of data. >> dow's down 70 points. let get to bob pisani. >> good morning. after a fantastic day yesterday, historic day you could argue, everything's reversed again. back to where we were two days ago. let's look at key sectors and key commodities. s&p down the dollar is stronger against the euro. and oil is down. what else is new? so not surprisingly the weak link today, down the dow, down in the nas sack and s&p, oil stocks. your usual names, dan bury rigs chesapeake it's ground hog day here every day with these names. this is the way we start our day, i think it's the law. down 3% in energy. are we at the start of a tightening cycle?

we couldn't get any conclusion. seem to be in the shadowy period leading up to a tightening. so mkm had a good note out. in the six months prior to tightening cycles three prior ones, had them in '94, '99, 2004 s&p tends to gain in six months,age average 6%. big gainers, financials up 12%. makes sense. interest rates rising. that helps banks, no surprise there. once you get into the tightening period, everybody knows, stocks tend to have a tougher time and the three months after that tightening period, put that up, see the s&p's timypically down. telecoms outperformed. underperforming are industrials and discretionary. all of this makes a lot of sense. the problem right now it's not really clear exactly what period we're in right now. and that's messing people up. you look at fundamentals the

fed have told us what the fundamentals are, it's very clear. the fed sees lower growth lower unemployment, low inflation, and a slower increase in interest rates. that's what they've told us. to me this would seem to favor cyclical stocks. it would seem to be telling you, buy retail stocks for example, in the xrt, retail etf held up well. and also home builders, something like that would work here. fundamentals favor certain sectors the prospect of imminent rate hike is confusing everyone. that's why it's hard to pick what the market's going to be doing in the next couple of months. can't argue where we are now. just look at the global market situation right now. china's at a seven year high. germany at historic high. let's not quibble about a point. russell at historic high. s&p 0.8% away from historic high. global rally going on in the stock market. see what happens in the next couple months. as far lennar stewart miller produced another great number.

ors up 18%, better than expected. earnings better than expected. gross margin 23.4 that is a great number. you start getting over 21 22% on gross margins in any of the companies, i'm the son of a home builder, those are good numbers. hard to do that with a company as big lennar. i love stewart miller goes to the heart of what everybody's wondering, his quote, early signals from the spring selling season indicate the housing market's improving. disappointing, single family starts and permit numbers should rebound shortly. thank you, exactly what we wanted to have some clarity on what you think is going on in that. i think that's the right answer overall. right now the dow down 76 points. >> bob pisani. keep your eye on the ten-year back down to 1.93ing rick. >> interesting ride yesterday in the treasuries as well as for enexchange obviously. bob's market s&ps what

turnarounds close to 30 points. what's the aftermath. two day of fives, notice wow what a drop. basically a quick 20-basis point drop. today up four basis point. yesterday about curves steepening. today it's back to normal curve's starting to flatten. it's ball mean reversion to the trades that were popular before the statement. look at the two-day of the 30 on the other side of the curve. yesterday its drop was half of that of fives, but ten basis points, and they're unchanged today which goes back into the flattening mode. let's go back to the tens. year-to-date chart may be best. we know that we stopped at right place if you're a technician 2.15 to 221 area is important. what's most important referenced by carl hovering in the low 1.90s. these are six-week low yield closes we're hovering at. let's look at difference between tens and bunds. this is the big deal yesterday.

foreign exchange was big, interest rates were big on the interest rate differential. but what's fascinating is the distance between our yields and tens changed very little little yesterday with all of that volatility. let's look at the ten-year bund. yes, your eyes are right, hovering at 18 basis points another fresh all-time yield low close. and if we look to the marks at epicenter of volatility on foreign exchange it's mean reversion, two day of the euro versus the dollar everybody sweating yesterday. oh my goodness we went from 1.06 to 1.10. here we are giving a lot of it back because the dynamics are in place. it isn't about the words in the statement, it isn't about the words about any government official or politician. it's what action may be behind the words and many believe that very little really has changed. and it's evident in these markets, the same said for the dollar/yen. dollar lost a lot of ground in that trade yesterday. but as you see in two-day chart, giving a lot of it back.

>> rick santelli in chicago. despite yesterday's oil rally, brent back below 55. let's get to jackie deangelis. >> good morning. that's right, we are seeing bearish act here today. we're down 1. 46 on wti but hanging over $45. the latest comments out from opec are one of the thens that people are talking about. no change in stance here saying production will remain constant and opec has to do that to keep its market share. here we go. onus again on the u.s. to cut production and really do something about the price decline here. but remember these rigs coming off-line, a lot of analysts telling me these are older rigs they're not producing so much anyway. so it is going to take some time for our production to slow down. and also opec in its latest monthly report saying it expects the u.s. production not to slow until late 2015. analysts i speak to were looking at the second half kind of globally. if it's later in the year november, december that could be quite significant.

meantime, we did see a little rally yesterday on the dollar. this was after the dovish fed cooled the dollar down a little. but you have dollar index over 99 this morning and that's why we're seeing the negative action. carl back to you. >> thanks so much. when we come back alibaba, after that lockup expiration, what has been a rough 2015 for the stock, we'll talk with one of the earliest investors in the chinese e-commerce giant. dow down 92 points as the crazy week continues. back in a moment. 40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors

that were just totally pitch black. those things had to change. we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks, young people are moving back in town the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back.

a live shot here of trenton, new jersey uber drivers protesting what lawmakers about to hold a hearing on legislation that would require uber to provide additional insurance coverage on top of what it already provides in the state. take a quick listen. >> thank you so muff. if you have not rejgistered yet, register at table. >> keep uber in jersey. such a law would drive uber out of jersey and the new require minutes are greater than what

traditional taxi and limo competitors face. >> this is a popular service. people talk about the $40 billion valuation. valuations are what they are. you are what your record is. if they can raise $40 billion, it's going to come public. >> you believe the litigation's built into the model? >> i do. i think they have a better mousetrap. >> as you said one of the great unmet needs in history. >> one of the great unmet needs well put. >> we'll keep our eye on than jersey's in the news a lot, between that and tesla. >> yeah. i think that -- i have been -- jersey if they get finances in the news we can go buy municipal bonds in jersey that's the news i'm waiting for. >> we'll get "stop trading" with jim in a moment as we get almost close to 100-point decline in the dow. back in a moment.

my name is bret hembree. i am an electric crew foreman out of the cupertino service center. i was born and raised in the cupertino area. it's a fantastic area to work. the new technology that we are installing out in the field is important for the customers because system reliability i believe is number one. pg&e is always trying to plan for the future and we are always trying to build something stronger and bigger and more reliable. i love living here and i love the community i serve. nobody wants to be without power. i don't want my family to be without power. it's much more personal to me for that reason. i don't think there's any place i

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anti-cholesterol every other week. biogenitic, big alzheimer's news come out on friday. every day the stock goes up. today another analyst, credit suisse raising price target. it's going up again tomorrow. whether it be receptos fold they have positive regulatory approval, celgene breaking out and biogen goes up. >> people making jokes about yellen covering her biotech sword yesterday. >> i did make that joke. not respectful joke. she's doing a good job. >> watch starbucks, goes public jim, in june of 1992 and it's never been higher than at this moment. >> howard shut onchultz on the show last night, don't be cynical. they are doing so many initiatives and taking it to the rest of retail. they are a technology company, they are well-run doing great in china and that's what the, from my point of view i feel

like i'm parochial saying it but they're running a great company. >> michael's this morning, a slight hit. we'll talk to the ceo, chuck ruben later today, but cutting outlook. >> retails interesting. vince, i love the shirts don't like the stock. retail's all over the map. it's tough in your yellen to say retail is strong you can't. >> the curve is just spread all over the place. >> some are 5.6, 1.2, 7.9. go read williams-sonoma, that growth in omni channel, they are the envy if you're nordstrom's, one of the brothers you're saying please go buy them which they'll never do buy them to learn. >> sears down more than a percent now. >> sears. yeah, they have nothing. >> jim what's on "mad" tonight. >> we've got the company that i think is one of the inspirations why starbucks is doing so well

today. we've have postmates. amazing story. dan leever what's known as a rollout platform. martin franklin the guy behind it. we want to watch this start-up that howard schultz has gotten involved in. that guy's more bandwidth than anybody i've ever seen. he has more things going on in his head. >> india, that's -- >> the tea is going to be great in china when he go there's. why no regulatory problems in china? he says i want to meet the parents. meet the parents. the guy, i know yesterday i was tough on them about the deal when i go to my starbucks, how i feel. you to have be sure the stuff works and the whole pieceworks. i think that the proof is in the stock price. >> that's an interesting experiment to see how social

mission like this translates into -- >> it is amazing, we don't talk race. it's obvious from ferguson we can benefit from talk and other people herbalife mylike my kids say, dad, what is with you? you're some 60-year-old guy, talk about race? it's difficult. >> see you tonight. >> "mad dash,". we'll get breaking news on philly fed, currency effects tossing tag heuer to cut prices. we'll talk with the head of the watch division in a moment. there's nothing more romantic than a spontaneous moment. so why pause to take a pill? and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet

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♪ good thursday morning. welcome back to "squawk on the street." carl quintanilla with sar roo icen and simon hobbs. it's a morning of reversals. the mark give back a lot of what it got from the fed-introduced rally yesterday. the nasdaq resilient, dollar getting ground that it lost back. and oil of course back to 43.16. >> the road plan for the hour. wild moves in currencies after yesterday's fed decision. the dollar though bouncing

back from its sharp fall. we'll take you through all of the moves and tell you what's next. speaking of currencies tag heuer says it's lowering its prices because of moves in the and franc. the ceo will join us live in a first on cnbc interview. hearing taking place now in new jersey that could push uber out of the state. a live report in a few minutes. rick santelli philly fed breaking as we speak. rick? >> absolutely. march philly fed, current read is five, five, looking for closer to 7.8. last number unrevised 5.27 this done give us any significant new information on direction but only thing i need to mention is the cycle high for this number was back in november at 40 and change. so five is not bad but we've been much higher. backwards in time. february read on lei up .2 as

expected. last look .2. no revision there. that fits in as well. just to put some context, most recent best month over month in july 1. we hadn't have a negative read on lei since january of last year. back to you. >> not a lot of impact there on that economic data point. the action is in the currency market. a stunning 24 hours. the dollar is in rebound mode today, especially against the euro 106.pa 52 after a fierce plunge yesterday. the worst day for the dollar in years. the federal reserve's surprising stance leaning away from higher interest rates, triggering the mother of all short covering. in other words, so many people piled into the strong dollar trade with bullish bets near a record high the snapback we saw was so intense. where does this all leave us? today back to a strong dollar. dollar bulls are getting a nice opportunity, and have over the last 24 hours to scoop up more

dollars at better levels. vut from the view from the research notes the big gains, giant moves for the dollar may be behind us talking about 30% move for the year. the fed made it clear it's worried about it but the dollar's on a one-way ticket higher especially if the u.s. economy can shake off the frigid february weather, the temporary port dispute, and starts healing that leads the fed towards high interest rates. eurodollar parity in the cards with all of you with summer trips planned to europe from the united states. it might not be as fast and furious as it has been. could be a slower assent of the u.s. dollar. in the words of bill gross yesterday, u.s. has officially entered the currency war. >> let's bring in ethan harris, our very own steve liesman. ethan, schoolchildren are taught that great democracies have

independent central banks so they do what's right for the long term. do you believe janet yellen is doing what's right for the long term or doing a greenspan? >> no she's doing the right thing. we've had weak data in the u.s. the fed is finally acknowledging how soft the inflation numbers are. so she's throwing sand in the gears of this idea that the fed's rushing to the exit. inflation is a long long way off and there's no rush for the fed to be hiking interest rates. so i like what i heard from the fed yesterday. it seemed much more realistic assessment of the economy. >> but ethan, if you are going to keep rates near zero and keep them lower for longer which is what she said yesterday, don't you have to believe the dollar isn't going to weaken oil and gas prices aren't going to rebound? are we in that poor state? >> i think what's important here is that the fed correctly recognizes that the big risk to

the u.s. is not inflation, it's about getting a full recovery in the economy. we've had a disappointing five-year recovery we've seen what can happen in a region like europe if you let your economy languish too long. we've got to get the economy really fully back on its feet then you normalize interest rates. but we don't want to sit in this semi recovery forever. it leaves us vulnerable to the next shock. growth is the priority right here for the fed. >> steve? >> you know, simon, i think you have to ask yourself what changed between, say, december and today. and there's that big downward shift by the fed. i was in the process of doing that. what i found was that when the fed met in december and pegged interest rates and the outlook for the fed funds rate inflation was running on the positive level on a headline. around 1.3, 1.4. it's negative on a year-over-year basis.

euro was 1.24. oil was $55 a barrel now it's $43. what ethan said is right but how far out do you take it? for a period the u.s. economy is digesting, i guess to mix a metaphor, downdraft of inflation coming from overseas and coming internally, domestically from a siri of issues. i would not bet all of my house on the idea that the fed is not going to raise rates, say, through the summer here. i think there's still some chance depending upon the speed with which we digest. some of this stuff, as you know is one-off. you'll digest the dollar if we stay at 1.06 for a while that doesn't happen. digest oil prices. >> but that's precisely the point i'm trying to make here. ethan, they're supposed to be setting policy for where we are 18 months 5 years down the

line. we are looking at daily currency moves. should it be this way? there we're not talking about daily currency moves. the dollar's had a relentless move higher. slicing a half percent off of growth anden flation. this is the fourth biggest dollar move in modern history. a big move and the fed has to pay attention to it. yes, absolutely have to be hiking interest rates over the next several years but there's no rush. makes sense for them to slow down momentum in the foreign exchange market. >> let me just -- >> can i point something out, ethan, yesterday was the biggest move on the euro the second biggest move since its inception. you know, you can argue that free markets are doing what free markets are supposed to do. it is janet yellen breaking away from that and preventing those free markets around the world from equal lib premium, which is what we believe in don't we?

>> no the central banks have an obligation to provide some guidance to the economy. they don't just step back and accept the market's mandate. in this case the fed accepted a very big move in the dollar but some point you reach a limit wir the damage to the economy's serious. letting the dollar move by 20% is quite a concession to free markets. to say we're not going to let it go 25% is the central bank doing its job. >> i mean bottom line steve, data depent fed, she's made it clear, she might not know what that mean when the first interest rate is she sounded indecisive on that on purpose. but wall street economists steve, need to come up with a forecast now. what is the betting? is it june september, next year? >> hearing a lot of september. a lot of people in june. cnbc fed forecast before the meeting came back from september to august but that's a wash in itself. i think the idea is you have to get up in the morning and when it's 8:30 cpi day march 24th,

turn on your tv sara as i know you do and ethan does and watch that labor department report. that is absolutely decisive. the philly fed, that just came out, prices paid mine this in three. prices received minus six. downgraft in inflation working its way in the economy. there's a forecast out there it's going to wash out but it's going to be some time. >> thank you. ethan and steve, thank you both. hearing's under way in new jersey that could force uber out of the state. kate rogers live in trenton with more on that. kate? >> reporter: that's right. tensions are high here at state capitol today. as you can see, all here behind me supporters of uber rallying against a bill being heard inside by new jersey state legislators that uber says could drive it out of the state. a few things at stake here. number one, mandated state background checks for drivers, a special seal on licenses that says they drive for the company

and vehicle inspections by the new jersey motor vehicle commission. uber says if this passes they will leave new jersey. >> this bill's aim to drive us out of the state. it's to prevent having to compete and if it passes we will have to leave new jersey. >> reporter: now, uber supporters tell us they're happy driving for the platform they have freedom and flexibility. some speculating new jersey's trying to profit off of the cash that uberer has made and that cash means a lot to these drivers. >> 57 years old, no source of income living on my wife's income raising a household with two grandkids and then uber came along and in the past year i earned $75,000. you tell me what it's meant to me. >> reporter: now uber has organized a rally here behind us, they're organized. a p.a. system they've got these t-shirts. check this out, sent out an e-mail blast to uber customers, sent to a colleague at cnbc who is an uber passenger, asking

they'll to come down to state capitol and support uber in rallying against this bill. down the street the new jersey taxi establishment has their own protest and rally going on as well. we'll bring you much more during "squawk alley" next hour. >> the latest on a string of legal challenges for uber. kate rogers in new jersey. when we come back, concerns among big business regarding the strong dollar are rising. many companies are urging washington to intervene against currency manipulation. senator chuck grassley with his take on that. what should washington's role be in currencies? "squawk on the street" will be right back. its effects on society really came about because, not because i was selfish and wanted one for myself, which i did. its because i had, had a passion. my whole life i wanted to teach myself to build computers. i wanted to build these things for free. i just wanted to do it for the world and you know when you want something, that's what you do the best. ♪

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my name is tony sartorio. i'm a lineman for pg&e out of the concord service center. i have lived here pretty much my whole life. i have been married for twelve years. i have 3 kids. i love living here and i love working in my hometown. at pg&e we are always working to upgrade reliability to meet the demands of the customers. i'm there to do the safest job possible - not only for them, but everybody, myself included that lives in the community.

i'm very proud to do the work that i do and say that i am a lineman for pg&e because it's my hometown. it's a rewarding feeling. we noted that export growth has weakened probably the strong dollar is one reason for that. on the other hand the strength of the dollar also in part reflects the strength of the u.s. economy. the strength of the dollar is also one factor that is as i noted, holding down import prices and at least on a transitory basis at this point pushing inflation down. >> fed chairman janet yellen unusually talking about the u.s. dollar. some u.s. companies are now voicing concerns about the strong dollar, calling for washington to intervene against so-called currency manipulation

in which countries like china hold down the value of their currencies helping to keep exfors to the u.s. cheaper while also making goods to the u.s. more expensive. joining us chuck grassley member of the budget and finance xhaty. thanks for taking the time. >> glad to be with you. >> do you think there's a role for you, for congress to get involved in so-called currency manipulation right now? >> the answer is yes, as we consider trade legislation and trade agreements and what our government ought to be doing during those negotiations not necessarily interfere with negotiations but to make sure that currency manipulation if it's done for political purposes by politicians as opposed to central banks, the answer is yes. >> but what's going on right now, in other words, many countries weakening their

currencies, is a result of central bank action but central bank action that the u.s. has done and has been doing ever since the financial crisis on a lot bigger scale than what we're seeing now. >> i don't believe that you should have political leaders of the united states interfering with the fedex september for an audit of the fed but not the pollicy -- monetary policy. when it comes to congress having power over interstate and foreign chersommerce and we have negotiations going on and china manipulating their currency to subsidize their exports, i think it ought to be an issue during negotiations on trade agreements. and i think congress has a role in dictating to our negotiators that currency ought to be something that's negotiated or could be considered a nonfair trade barrier if action's going toing taken after there's an

agreement. >> just to be clear, talking about an actual tariff a tax being put on chinese goods to the u.s.? are you talking about other countries as well that we should be punishing for this. >> i'm going to leave that to negotiators. but it seems to me there ought to be action taken when there's a specific action taken by an individual country, china, most often, japan to some extent, that specifically subsidizes their exports. yes, that ought to be an issue in negotiation. what action should be taken after they do that after there's an agreement, would be left to the normal responses that a government can take under the rules of law of international trade. >> senator, isn't there a case here for keeping your powder dry with the chinese? yes, they've devalued to keep a peg to the dollar but kept their

currency rising as the u.s. dollar has risen. the fear is that they massively devalue from here which would cause chaos in asia a massive round of further competitive devaluations. is it bettor stay silent and wield the big stick in private than to go public now? >> i think for ten years, maybe longer than that but under both republicans and democrats, there's been too much -- too caution in dealing with china on the issue of currency and it's been out of -- i don't know whether it's out of respect or out of fear of what they can do but i tell chinese people when they come to my office officials or ambassadors, or when people of those interests testify before a committee, that quite frankly, their reaction always is that we're interfering in their domestic affairs. i would encourage china to have dialogue with us on our domestic

affairs that they might disagree with. we have a perfect right to question their judgment. but also we have law that says that our treasury department our president, has to make a decision when there's currency manipulation. we've never wanted to charge them with manipulation. and i think our caution has been to the disadvantage of the american consumer to the disadvantage of our producers in this country. what -- >> would that be a bigger disadvance disadvantage we have a trade war. it gets out of hand you see policies like taxing that kill growth and is not good for any business here and abroad. >> i have to agree with what you just said but until we challenge the chinese, is there a trade war or isn't there going to be a war, maybe you have to do it cautiously i'm saying

under both republican and demonstrations, we have been too cautious which china. >> understood. i know a lot of folks are looking at japan as well including some in the auto industry. i have a feeling we'll hear more about this issue. for now we'll leave it there. thank you for joining us. >> glad to be with you. chanel hiking prices this week because of wild currency moves. now tag heuer's being affected. the brand having to freeze or cut prices around the globe. the ceo of tag heuer, head of the watch division at lvmh will join us live in a first on cnbc interview after the break. if you're running a business legalzoom has your back. over the last 10 years we've helped one million business owners get started. visit legalzoom today for the legal help you need to start and run your business.

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swiss watch makers trying to fend off apple on one side facing a rising swiss franc on the other. tag heuer announcing it will cut prices by 13% in some markets. the company announcing a smartwatch, in partership with google and intel. talking first on cnbc the head of lvmh's watch division and ceo of tag heuer, jean-claude biver. good morning. a lot of people saying this marks the swiss watch industry

end of ignoring the threat of smartwatchs. is that what this is? >> no no the swiss watch industry has entered connected watch very recently. the last example is our entry into the connected watch together with intel and google. the swiss watch industry is quite strong and innovative, of course. we were not in the communication technology. we know how to produce movements. we know how to produce cases, crowns but communication technology the microchips and software is not our specialty. and because of that we believe that we should be associated with the two strongest giants in the technology. one for the hardware which is intel, intel inside a tag heuer

watch and for the other one, android wear from google we signed and communicated a few minutes ago this incredible strong enormous partnership when silicon valley meets switzerland. in this will be huge. >> you were quoted about i guess section months ago, asked about the apple watch. you said it has no sex appeal it's too feminine looks like it was designed by a student in their first trimeftster. are you convinced you can do this better? >> i don't know. we're going to try. but you know i said that first sight, i think it was wrong for my side. it was wrong because that's not true. it was an overreaction. i think the apple watch is perfectly designed and it look like an apple watch. that is what an achievement. you design a watch that look like an apple watch. it's not easy.

imagine they would have done a round watch, it would not have look like an apple watch. all in all, a brilliant design for apple, even for my own tastes i prefer more sexy. but everybody's different. and we at tag heuer, google and intel, we are going to try to design a watch with a lot of emotion, with a lot of tension, with a lot of design and harmony. and we will bring into the connected watch all of our experience 155 years in the watch business. we want our connected watch to have the sex appeal of a tag heuer and that for sure, we're going to succeed. >> mr. biver isn't it dangerous for lux yiury good makers to be cutting their prices haven't you sought for years and years to have pricing power to show products will rise in value and

good investments over time. this is dangerous what you and chanel are doing, isn't it? >> it could appear like dangerous but it brings a lot of credibility. when a currency goes down by 20%, you cannot sell your watches at the same price, which means you're going to do 20% more margin. and that on the customer the customer wants to buy the watches at the right price. if the currency the euro has dropped by 20%, how can we sell our watches at the same price in the u.s. dollar? we must reduce prices adapt to the currency if not all americans will fly to france or elsewhere to buy their watches and that's not what we want. we want american customer to be treated equally to any others and we want them to buy the watches at the same price of the

europeans. why should europeans buy watches cheaper than the americans? >> it's a view echoed by a lot of other swiss companies now. do you see -- what do you see ahead for the swiss watch industry given all of this hype over smartwatchs, not just from apple but others and some of the economic headwinds you're dealing with with the swiss franc and the weakness in the economy that's causing? >> so i think with the swiss francs we would know how to cope. remember when i started 40 year ago one dollars and four swiss francs. today one dollar is less than one. we are still selling watches in america. so the strong swiss franc is something we have known since we are born. and it switzerland had the strong currency since world war ii that is something we know how to cope. the political situation in syria, uncertainties in russia,

this we cannot really handle but nevertheless, considering all of this and considering also a certain slowdown which is now seems to be over in china, we believe, at least in this there is a consensus among the different brands that we might have another record year. not with growth of 5% or 10%. eventually a gross of 1%, 2% 3%. if you grow 2% on the record year means you do another record year. each time you do a record year you cannot complain. >> mr. biver, el marmach was asked about the coming threat of smartwatchs. he thought the apple watch would succeed, in terms of the swiss industry anything in the range of 500 to 1000 francs was in danger and said i expect an ice age coming toward us. why is he wrong, if he is?

>> i didn't say he's wrong. at that price segment, he's probably right. i can share this opinion myself between 500 and 1,000, was the average price of the connected watches, are they from apple, sony, lg samsung, all around $500, $700 $800. at that price level, for sure there is a threat. at the higher price level at 3,000 watch, a watch that retails for 3,000, what is it? it's a piece of eternity in a box because $3,000 to $5,000 watch is eternal. your children will have be able to wear it the children of the children will wear. it's a piece of eternity and that part of the swiss watch industry will not suffer because connected watch is just a complimentary watch, it's like you can own a smart car and you

can have a 60 s, they're not competing, they're additional different. but on the lower segment, he's right. i see a threat that is for sure. but i can see the swiss are reacting 12 brands bringing connected watches to this fair. the react is quick and soon. and tag heuer is going to present in october or november the connected watch with our friends from google swin tell. it shows you how dynamic, reactive this industry is. >> can't wait to see it. the first android luxury smartwatch. jean-claude biver, thank you for your time. let's get to the nymex. breaking news on natural gasp. >> good morning, sara. the department of energy out with its weekly inventory report on nat gas. we got a withdrawal for last week of 45 billion cubic feet in line with expectations. nat gas lower on this morning,

to 8 on last week we saw a draw down of 180 cubic feet. it's much less than we saw last year 69 billion cubic feet. was much colder at this point in march last year than this year though talking about snow for tomorrow. what traders are talking about now for the nat gas trade in between period where you don't need heat you don't necessarily need air-conditioning, they do expect these prices to potentially go lower from here. some people talking about 2.25 an interesting trade to watch for the short term. if it's a hot summer we could see prices rush back up again. back to you. thank you very much. straight ahead on the program, king dollar fighting back one day after its largest fall in over a year and a half. the dollar shaking off the short interruption from janet yellen. "squawk on the street" will be right back. in my world, wall isn't a street. return on investment isn't the only return

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it's never been easier with so many networks all in one place. get live tv whenever you want. the xfinity tv go app. now with live tv on the go. enjoy over wifi or on verizon wireless 4g lte. plus enjoy special savings when you purchase any new verizon wireless smartphone or tablet from comcast. visit comcast.com/wireless to learn more. good morning. i'm sue herera here's your cnbc news update. there is word tunisian forces arrested four people in connection with the deadly assault. 24 people mostly tourists were killed and 50 people injured. no formal link to a particular terrorist group has been established but one of the two gunmen was known to intelligence. costa cruises operated by

carnival is canceling all upcoming stops in tunisia. police say the real estate heir had a latex mask 42,000 in cash when arrested over the weekend. charged with murder in the killing of his friend 15 years ago and suspected but not charged in his first wife's disappearance in 1982. target proposing to pay $10 million to settle a class-action lawsuit related to 2013's massive data breach. individuals could be reimbursed up to $10,000. amazon expanding one-hour delivery service to some areas of baltimore and miami. the service prime now had only been available in new york city. you're up to date. that's your cnbc news update at this hour. back to you guys. janet yellen and the rest of the fomc managed to pummel the

dollar yesterday. now the dollar is fighting back. the euro back down to 1.06 give or take. let's bring in for more analysis on the currency marks, cnbc contributor, todd gordon founder of trading analysis.com. good to have you back on the show. >> nice to be with you. >> why is the foreign exchange market all but ig forignoring what happened yesterday. >> i have to apologize i'm on a cell phone remote. it's a healthy pullback to a much more dovish fed than we would have expected. the euro has given back some gains, dollar rallied, but it's a 2/3 retracement, giving 2/3 back which is healthy in the upturn. i think the fed is coming to the realization that the divergent monetary policies can't continue. i think the dollar does need to take a bit of a pause.

we're seeing thefx markets gold crude off the lows and bonds rally. these are inner market signals that suggest the dollar needs to take a bit of a pause here. >> okay. isn't this best just a stay of execution on the fed on raising interest rates? in other words, the dollar's weaker today. doesn't it make up that ground in the future when they do fire the trigger, or because we know from the dots rates will stay low for longer has janet yellen fundamentally affected the level at which the dollar will rest? >> i do believe they are continuing. i think september, at a minimum, begin to raise rates. bonds are up at the highs. back to bonds rallying with equities based on lower interest rates. when the fed does pull the trigger, i don't know. i guess september for now. but -- there's too much going on for the fed to do this. look at what other central

banks, look what norway did, this is not a central bank that we track but the norwegian crone, major energy play as crude and natural gas and brent destroyed the norwegian currency has been crushed. the norwegian crone rallied sharply as the dollar sold auch losing the commodity play right now and i just don't see this happening. i believe gold to set in a low, crude to set in a low. we need to take a pause here. >> todd clearly janet yellen and other wall street banks have left the door open for an interest rate increase as soon as this year. but in all of the years that you've been doing this following the foreign exchange market, the central banks, have you ever seen a period where the two biggest most powerful central banks in the world are using their big power and their ammunition and going in completely opposite directions? are we underestimating the force

that this is having not just on the currency market but other markets as well this complete divergence from two central banks? >> that's it i just don't know how they can begin to raise rates when europe's on the brink, china slowing down bank of japan would kill for 2% inflation. i think -- the love the trend. love the uptrend. look at dollar/yen sara you're a big fx follower. you know when 30-year bonds push higher, it drives the yield low somewhere deinsenty vies to take yen out of japan and invest overseas. we can't get to 1.21. this divergence happened, this dollar this lack of policy on the upside of the dollar began days before the meeting. i warn made clients guys were

losing the dollar here and that's not a good sign. i'm going to use it to take opportunities to be long gold. i'm going to be long -- i covered crude shorts today with clients. >> interesting. >> dollar is -- dollar's consolidating here. when we raise rates, fine. but as you know currencies are trading three, six, nine months ahead of time. we don't know where it is right now. good to talk to you, todd. interesting that you covered your oil shorts. we'll come back to that. in the meantime todd gordon. european leaders meeting in brussels for a summit where greece's financial situation is dominating the agenda. can there be any agreement? cnbc's julia chatterly is there live. what's the latest? >> reporter: thanks sara. the greek prime minister and germany's merkel set to meet on the sidelines of the eu summit after the broader talks have wrapped. the hope they could thrash out some kind of deal in the short term to address greece's funding

crisis. angela merkel arrived here poured freezing cold water on the prospect of that saying there will be no deal tonight. it's up to the finance ministers to thrash that out there was a lot of caution here and we've seen that in the run-up to meeting in the greek asset prices. look at ten-year yields set to close at the highest level since july 2013. sentiment not helped coming into the meeting by the moves from the greeks in last 24 hours announcing a whole raft of measures to address a humanitarian crisis in their country, fine you can agree they're needed but they're not allowed to take decisions right now alone. the bottom line here is both leaders' hands are tied merkel's hands tied by the shifting sentiment we've seen in germany. right now 59% of the population will be to see greece leave the euro zones. tsipras bound to the promises he made but bound to the deal he signed a month ago, if there were no reforms, there would be

no cash. merkel emphasizing that point coming into this meeting tonight. the question is can tsipras convince her otherwise? >> julia chatterly in brussels thank you so much. the ceo of michael's joins "squawk alley" live to weigh in on the crafting economy and how they're affected by the like of etsy and pinterest. tomorrow, richard fisher retires today and join us live tomorrow. "squawk on the street" is coming right back. say you're a finance guy. a farmer. a researcher. you used to depend on experience. the internet. your gut. today you can use ibm watson analytics. it can make sense of all kinds of data. uncover hidden correlations and new opportunities. and give recommendations with more confidence on who will buy. what to make. where to plant. which helps you make smarter decisions.

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7 out of 10 sectors are lower but not health care making gains. dom chu has more at hq. >> it's a relatively calm day for the markets overall after the fed fireworks yesterday. health care trying to help a small way, up .2 at this point. the health care spyder exchange-traded fund mirroring that same move. among the upside standouts shares of cerner abbvie celgene, up around 1.5% to 3%. very interesting moves in the health care sector overall but specifically the large cap biotechs. >> thank you very much. speaking of fed fireworks over to chicago, cme group. rick santelli with the santelli exchange this morning. hi, rick. >> good morning. i like to welcome my special guest, first time guest david

ader. thanks for taking the time. >> thank you for having me. listen, i want to talk about greece. but not as in the country ee. i want to talk about grease the kind that makes gears move smoothly. let's rise above the issues have a macro conversation. the amount of debt out there keeps growing but yet the amount that's tradeable keeps shrinking. the type of clt ral high credit like bunds, shots, treasuries, is hunkered down whether central banks balance sheets, insurance companies, are we going to have a lot more kind of october 15th crash type markets because of this issue in your opinion? >> i think that was a dress rehearsal for what's coming. the dealer community, the cushion against sell-offs or the need for liquidity in the market is not there. and you know with the taper tantrum a dress rehearsal for it. marks are changing.

we're getting volatility in there. there's a lot more disruptions. >> david, when i look at a trading floor, i see some of the biggest historic pits in the history of the world like eurodollar options, not the currency, the forward rate. what i see is is that it getting small somewhere smaller even though many traders are trying to hang on because when normalization occurs there's going to be a lot of trading going on. is the fed being short sighted in allowing the market to run so thinly in terms of lubrication? they are going to need these people to distribute at some point in the future, are they not? >> certainly are the point of going to these floors and fewer people out there, i mean my industry, the treasury market has been devastated, whether it's a lack of capital, people have been forced out, maybe going to hedge funds or algorithm funds, there's not a lot of people out there to support. the move to electronic trading

on the part of the investor community also has been a significant change. it's not been a problem. the fed's been buying sufficient central banks have been buying stuff but within they stop buying and start going into a different phase of the market, it's going to have an impact there. i used to work at a firm that on paper it's a primary dealer. it's not a primary dealer anymore. and there are a lot of those out there. >> oh yeah primary dealer list has shrunk dramatically. yesterday the big news was all of the volatility in foren exchange. listen, there's should be no question. the reason we have volatility is most likely because central banks are kind of masking real signals so the only signal you have is interpretation of what's in brains of people like draghi and yellen. last ten seconds, do you think ultimately if we had to point fingers that's where the fingers should point? >> yeah if you point fingers, that's where the fingers should point. central banks have been running the show and also as a result of

it, you know taking the markets down in terms of liquidity. it's been six years where we're affected by. they don't, i don't think, recognize or appreciate that the taper tantrumtantrum, as an example, is going to be a show we're going to see a lot more of that and then what the question is is volatility a sign of something going on in the economy. >> we will have to stop it there, david. because we're out of time. the volatility issue we will hit more on in the future. we're definitely going to have you back. thanks for taking the time. sara back to you. >> thank you very much rick santelli. up next whatever brief rally oil got after the fed is long gone. west texas and brent both down sharply again today. 3% move lower for west texas intermediate. what does it mean for big oil? s&p energy group is the worst performer in a down market. more on that when we come back.

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now with the xfinity tv go app, you can watch live tv anytime. it's never been easier with so many networks all in one place. get live tv whenever you want. the xfinity tv go app. now with live tv on the go. enjoy over wifi or on verizon wireless 4g lte. plus enjoy special savings when you purchase any new verizon wireless smartphone or tablet from comcast. visit comcast.com/wireless to learn more. oil prices have resumed their slide, seventh day in a row due to u.s. crude supply hitting another record high and, of course, we have that strengthening dollar so how long will oil prices remain under pressure? joining us now is an energy

analyst at raymond james. i guess, pavel, that rally that came out of the federal reserve meeting, and it was a pretty strong one and the price of oil was short lived and the price is headed back lower? >> well it was an artificial rally because the oil was actually down 2% yesterday after the inventories number in the morning and that reversed course completely after the fed statement and actually ended up 4% on the day so pure currency trade, you know, it's very important to emphasis currency does not set oil prices in the long run. day to day, yes, there is an inverse correlation between the dollar and oil futures, but in the long run that is absolutely not what sets pricing. >> i guess the question for you, and i know "the wall street journal" did call you out a few months ago and other analysts in your sector who cover energy companies and haven't been able to nail the call on the price of oil, is how do you tell clients and people what to do with the big oil companies when it's hard

to see a bottom for the price of oil? >> right. well in the short run, you know, as your prior guest talked about, you know, the dollar is going to be moving and including central bank announcements is going to be moving a lot of what's happening in the commodity market right. so it's not a supply/demand question right now on a day-to-day basis. it's these external factors like currency volatility. what we can say is by q4 of this year oil prices have to move higher to support a more sustainable level of investment in 2016. current year budgets are in -- you've heard me say this before are in austerity on steroids across the oil and gas sector. next year, if this kind of austerity continues, global oil supply will almost certainly be in decline. to prevent that from happening, oil needs to move higher by q4. >> so pavel, it if you were

there, in a room with janet yellen and she said i'm going to delay interest rate rises because i think that oil is deflationary and will stay deflationary and won't bounce back and cause me a problem what would you say to her? >> well the fed is not going to base its decisions on commodity prices. commodity prices are very small part of, you know the u.s. economy and, indeed, the global economy, but that being said if the fed were to delay raising rates as was, you know, the indication yesterday, that would actually be supportive for higher oil prices in the short run. again, over years, it is supply and demand that drive oil prices, not what happens in the fed or anything else. >> all right. pavel, we got to leave it there. thanks for weighing in, of course, on these wild austerity on steroids on the energy sector.

pavel from raymond james. >> high time we venture down the alley. let's link in with jon fortt and see what's up for the next hour. >> we're going to be safe in the alley, though. apple is in the dow but how much influence is it going to have? we will take a look coming up. john legere t mobile ceo talk to him about the carrier's latest moves and the impact on that company and industry and michael's ceo will join us not just at out in the craft business can't forget about michaels and more. coming up on "squawk alley." there's a difference when you trade with fidelity. one you won't find anywhere else. one-second trade execution. guaranteed. did you see it? in one second, he made a trade we looked for the best price and the trade went through. do the other guys guarantee that?

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