tries to do something for probusiness. >> he gets on the right side and then they undermine him. very upsetting to me. for once he's on the right side of an issue. somehow they have to find a way through this. >> in the meantime i want to think you, our new cnbc contributor. >> these guys have to put the country before politics but that's impossible. >> make sure you join us tomorrow. "squawk on the street" is coming up next. ♪ >> congratulations to the golden state warriors on their first nba championship in 40 years. what a series. welcome to "squawk on the street" at the new york stock exchange. markets essentially on hold ahead of the fed's statement and press conference this afternoon. no real change in tone regarding the possibility of a greek default.

ten-year yield is pretty steady. oil is catching a bit today above 61. the road map begins with the markets. will janet yellen give some clarity on any rate hikes to come. fedex has been a bright spot but not today as the company's results fell short of estimates and as jack dorsey reiterates his commitments to staying at square, cramer says he has the equation to fix twilter today. we're left with an interesting set up ahead of the fed today. what's important in advance of this presser thirn? >> i think we must recognize. i think the fed does recognize that there is a crisis in europe right now that is so volatile so incensed that it's just -- because of what's going on in europe, they can't do nipg. i think that's why the market rallied yesterday. people just said the only good thing coming from greece is that

the fed can't raise. it's not time that they raise if greece is booted or if they go to default. is it going to be euro? are they kicked out? the uncertain thety versus i think a belief that there has to be a deal makes this fraud. it's fraud, and i think yellen understands that. i don't know if stanley fisher does. she's been hawkish. >> plenty of reasons to hike i believe you agree looking at job growth or pce but they have said in past statements that they are monitoring international developments so they can use it as an excuse. >> yes. and industrial production is not that good. we've seen decline. the dollar is strong. i see the dollar just zooming here. that's not what anyone wants. it's a shame that we're so interrelated but that's the reality is that we're interrelated. i'm watching the name calling in greece and watching the imf

being called criminal. they're the most powerful force for countries that go bankrupt that there is. you don't do that and yet these politicians are saying we'll do better without you. >> this welcome has been making the rounds. that's not the picture of progress. you would agree? >> they don't want progress. i think they accept maybe they'd do better. i think the people -- they were elected by people who believe that a default won't be that bad because they have 25 % unemployment anyway. i believe they'll face mass immigration because people can go to other countries in europe easily. and at the same time i am very concerned in a there's no plan currency wise. what is the currency? does it stay gyroeuro. they devalue. maybe the chinese and russians.

who lost greece thereby narrative. >> you've been cautious on stocks because you want the strong freakin' dollar to come in. are you prepared for another rise, another spike up in the dollar? >> it's at the wrong time because we're about to go into earnings season. they will all kind of just say, they'll guide down. we're about to go into the -- we're in the international companies and every one of them is going to have to guide down if the euro plunges. i'm focussed. some say i should be inflation focussed. i listen to a lot of people who say it's due and time. listen, there are moments in time where you can wait 30 days and greece may occur. why not wait 30 days? what is the imperative of doing it today other than it's on the calendar. i mean, i remember when i was a homicide reporter and every day i would come in and say what's

on the calendar. i had to do that. it was the calendar and right now we're being dictated by a calendar that says there's a fed meeting so they have the act. that's tone deaf. that's the way the old fed used to operate. don't look at nike 37. there's history here. and history says we have to regard the globe as being part of our equation. and you may think -- you may be accident phobic. i'm just saying it's just the wrong day. if the fed meeting were in two weeks, maybe we'd have a different narrative but right now, i mean i'm watching the imf, christine lagarde, being labelled a criminal by greece. this is a civilized world. you can't do that unless you really intend to break the union. >> no. obviously the comments about the

humiliation of the people. the safety is off when it comes to the rhetoric. >> yes. >> the fed decision comes on power lunch today at 2 p.m. with brian sullivan. special coverage including a great lineup. that leads up to the fed chair's news conference at 2:30 p.m. eastern time. fedex reporting earnings below forecasts. the fuel charges weighing on results. the company's guidance in line for the current fiscal year. it's been called ho hum. it's a messy quarter. a bunch of charges for various things. >> there are people who work with me before i come over and i task them to read a release and tell me what it really says. nobody could. this is one of the hardest quarters i have seen in terms of constant currency, where are they really? i know the u.s. is doing well.

if people want to know how this business can be difficult, read that release. fedex is usually a lot cleaner and the idea the stock would be down 4, those are people more clairevoyant than i am. the release is to obtuse i found myself thinking i have to wait until everybody speaks about this. you can't make a judgment from that release. >> ground volume up 5. revenue down because of these fuel surcharges. >> the fuel charges and the dollar. fedex has done great versus ups. the news about ups is not news. they're going to turn down business because they don't want to lose money. this this area is influx. fedex i think has been one of the things the hallmarks of the fedex as it goes down and then people buy it. >> in the meantime there's an amazon story about a mobile app

in which they'll be able to find people like you and i to deliver amazon product instead of ups. >> we all work for these companies now, i guess. >> uber wants to deliver and post mace and they want to deliver. we're like the delivery economy. there are people who are so short hours that they need things. i see this at my restaurant. people want shifts. you'll see younger people who would have had a full-time job and they'll say i need a shift. >> what are you doing? >> i'm putting together three shifts. just give me four hours behind the bar. it's a life where nobody talks about it enough. the politicians don't seem to understand at all. maybe they're wealthy. >> that explains a few things about unemployment in this country. >> it's a shift economy. give me a bike and some insurance. i'll put a uber sign on my car

and here comes some star bucks. i never had to do that. i delivered papers when i was young. people who -- these are people who when we got out of college, we looked for a job. there's no jobs. there's many jobs. put them together you have a jock. >> put them together you have various peas of pieces of a pie. >> it's never talked about by the politicians. you start thinking minimum wage. i'm not in favor of lower wages but i'm just saying that you're a small business person you're besieged by people who want to work for you. everyone has to pay a college loan. >> a lot of it has been made possible because of the smart phone. >> it's all algorithm. everything is. >> speaking of the smart phone, jack dorsey reaffirming his commitment to squared despite being chosen as the interim ceo

at twitter. dorsey says as i said last week, i'm committed as ever to square and it's continued success. i'm square ceo and that won't change. it comes on the heals of costolo insisting the board is doing a legitimate search for a new person. >> i think -- this man is bringing square public. dorsey is bringing that company public at the same time that he's running twitter? do you think the sec is going to bless that? i don't think so. i know the large shareholders and twitter won't. these guys play by their own rules. who's really running the company? is it possible that this man is bringing square public at the same time that he is running it or is costolo really running it but he's just got the crisis of psyche? this is the case. this is where an activist must come in. that's why the stock bottomed

yesterday. i think it's likely that bane gets a job, but i think dorsey wants the company. i think he wants to run best. i think he wants to be elon musk. >> some people made the jobs comparison coming back after a period of discovery. >> you can't run a company that you know is coming public and run another company. the government won't let you. the se kre looks at this. they will hold this per spect us. they will not allow it. i've seen it happen. the sec will not let it happen and the bankers and the shareholders won't. >> what do you do at $34? >> i've been saying you hope an activist comes in and then the activist makes it so they hire a banker and google buys them and then google stock goes to 700 once the acquisition occurs. yahoo would be a natural buyer

but they're not talking about buying anything but google stock has been nothing since the end of 2013. if goggle stocks want to go up they wake up and they buy twitter. that has to be forced by activists. twitter, if you go back over the seminal interview that you guys had in your -- it was really david and john. you go over. i went over it again last night. they just get the product is coming. the product. it's not about the product. it's about user engangment and customer service and on board. they are so tone deaf and maybe it's because dorsey is running two companies. is that the -- and one of them coming public? it's laughable. it's a laughable situation. and an activist this is a place where an activist should surface and throw the company into a deal situation but i don't know. that's the only reason why you would own it. you can't own it for the numbers. i think the user engagement is

going to be bad. they reiterated the revenues. they care about what mark zuckerberg tells us to do. he said unless you add people furiously and have growth you're dead. it's shark like. and i think he's right. has he done anything wrong? >> not lately. there was a rough stretch but that ended. >> people are saying to me, jim how could you say he didn't overpay? go over the last conference call where he says we didn't spend 19 billion for nothing. he's right. zuckerberg is the man to bet on. google stock needs social. they have mobile and cloud and connectivity. they need social. this is their chance. the cash they're having isn't doing anything for google. >> a fair amount of it is not overseas locked up like some other companies. >> it's here.

i don't know if the new cfo would bless it but i think it's right for activism if only because there is no one running it or everyone is running it. how about the senior managers? >> a new cfo, both from wall street. >> i don't know. noto, there was an article in the wall street journal saying he fixed the nfl's finances. i happen to know the finances were very good. he didn't fix anything. i didn't like that. anthony is a guy i know. fix nfl's finances? they were terrific until after the lockout. i didn't like the journal saying that. where did they get that. >> when we come back some changes taking place. one with rupert murdoch and the other at star bucks. one more look at the market here.

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twenty-first century fox confirming rupert murdoch will hand the reigns to his son.

last week david faber told you first about the executive changes coming to fox. some reporting that roger ails will also be reporting to the younger murdoch, something of a surprise. >> that is not necessarily -- >> i know. the parlor games continue. there's been some analysts saying it's range bound. >> the last quarter wasn't that good. there were some developments in india that are going to be terrific. i think it's an international story but one of the things that's different is that the other guys are doing so well. unbelievable numbers. we know bob auguster is doing amazing numbers. it's a crowded field, and i think when you look at fox, even if they're doing well they're not doing as well as some of the other guys. i think that's because the other guys are so good. rupert is good. >> disney giving universal some props on this jurassic world.

pitch perfect three is now in development. vin diesel with some comments regarding the next furious films? . >> when you're hot, you're hot. you have to see it with 3 d. >> half of sales were in 3 d. >> the end is fabulous. star bucks plans to close his caves. the company issued a state saying we have determined the caves are not sustainable for the long term growth. it will play a future in the role of the stars. think argue it was a distraction to the rest of the business. >> they take no prisoners. he doesn't seem like it. he seems like a guy who says let's hang out and see how it does. he's about the rose story.

it's about technology and roast ri. i think roastery is going to be an exciting disney world of coffee. that's what they have to focus on and they have to focus on worldwide expansion and china and mobile payments given the fact of southern california. >> stock has not given you a chance to get in. it has not been below the 50-day since january. >> trust owns it because howard schultz is putting up the best numbers of any major change. the chinese and u.s. numbers are amazing. this company is firing. tremendous momentum and i think the roastery and mobile are what to focus on. boulange he tries everything. he has an express format.

the i was the only one in the store this morning. that was concerning to me. you can't have four staff people and one customer and plus it did not work fast enough. i waited at least maybe 90 seconds. that's not good enough in the new world. >> kitchen complexity. you have to watch that. >> there's a new promotion for a burger and fries this summer. >> when we come back cramer's mad dash. we'll count down to the opening bell. stocks looking relatively safe at the open. futures up about 60. more "squawk on the street" straight ahead. ♪ ♪ ♪

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when we say we hear they may have cancelled their appearance. people say who's buying them? maybe they cancelled for a million different reasons but we're in a market where it's like who's voting for it? they have a beautiful conference to make you look better and i just say wow, i mean every time you get bearish something happens that's just electric. >> that's cramer last week talking about kythera. people read it as good rather than bad. >> allergan is buying them. if you watch squawk maybe you

make some money. here's what's going on. this is about facial domination. brent saunders allergan they own the far head for bo thetox, latisse, and juviderm. they have facial domination. that's what kythera does. this is ridiculous. it will be up. brent saunders are coming on tonight. the wife is an old detail person. you go to the dermatologist and say i'm adding something new. i'm adding the double chin fix. the dermatologist is taking all these other products. just load the truck up with kythera. they have a name for it but this is a brilliant move. you know what? i got to say he's pretty smart. >> the price makes sense to you? >> yeah. this is the only company that really would be synergistic. 2016 is a push but 2016 is right

on top of us. we're almost there and if it's flat and i think one of the things that brent has done over and over again is always underpromised and over delivered. this is part of a master plan. he is owning the face perhaps the most important piece of real estate in the world. no offense to donald trump. >> hewe talked to him monday and he said a lot of this is recession resistant. >> the detail people are going to sell it to dermatologist. it's going to shock you how smart this acquisition is. >> opening bell in just a few minutes. female announcer: looking for the hottest deal on a new mattress? then don't miss sleep train's 4th of july sale! right now at sleep train save $300 on beautyrest and posturepedic mattress sets. plus, pay no interest for 36 months on tempur-pedic and serta icomfort.

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you're watching "squawk on the street" live from the financial capital of the world. the opening bell coming up as we get closer and closer to the big events of the week. a big meeting of finance ministers in europe last week. we've had three consecutive triple digit moves on the dow. we've not done that since march. >> and we're watching like you,

the coverage today. this meeting coincided with the imf branded as criminal. you never take on the imf. i think it's a fulcrum day. >> there's the opening day as we get this fulcrum day started. look at the s&p at the bottom of the screen. the at the right of the screen it's right to dream. and the website that helps users answer questions celebrating its 19th anniversary. >> wow. that was the old days. hedge fund that 19 years. holy cow. >> a lot of chatter today about the insurers. a lot of research regarding aetna, the five to three. >> ubs, wells fargo says bayou nighted health. it is true if they all merge, it will be incredible because i

think they'll have -- they'll have control over the patient. i moon speaking yesterday to the horizon form suit cal ceo and they're saying they'll be able to deny a lot more claims. that's not what they're saying. it's not what i expect the government to do rubber stamp it. >> talking about which ceo stands to gain the most in a change of control. it's aetna. 130 million up to 130 million if he loses his job. >> i had a fight with the wife over the money they're making. she said if they distributed that to all the different employees. i said that's called socialism. this is not -- that's a lot of money. i saw that and said are you kidding me? how about like 55 million. maybe like $47 million. get a more -- that's too big a number. that worried me. the people rank and file.

you say wow, i'll take a couple bucks out of that. >> the biggest losers this morning, fedex is down 2% followed by adoe by. >> i think fedex is saying things in the conference that i don't like. they have a port strike merging smart phones. i thought that peaking cap backings was good. business to business is consistent. i think fedex could go down six and next week you'll be saying that's okay. you want to be there. >> it is also in the face of crude oil up a buck. $61.5. a lot of the oil service companies leading the charge today. >> i'm going to go out on a limb but i think oil is not coming in. we have inventories. oil is not coming down and the companies are all priced for oil being at $45 and $50. oil is not coming in.

this is a price that works. the stocks are too low versus this. the stocks are reflecting another leg down in oil. it's not happening. the baltic freights just came in. this is the way we measure chinese commerce. 44. it's up to 275. it's the largest jump we've had this year. europe is spending a little bit more. oil is not coming down. the oil stocks in this country are priced for $50 oil and it's not getting there. >> you look at the top ten gainers this morning they're all the transocean noble, aher on this, al halliburton. >> i just think natural gas liquids aren't that strong but these oil companies, the independent oils are too cheap because they all were the last leg down. the price you saw 43 to 50. oil, i was watching oil this

morning. i got up early. oil was at $61. it's not coming down. it's not come plying with all the negative anlalysts who i think will be looking for jobs elsewhere by the time it's all over. >> piper initiates some. eli lilly. >> they put a sell on bristol meyers. you don't do that. they're saying there's too much fluff in the name. i don't like that. bristol meyers could be bought tomorrow by j and j. they postulated that last night. >> google? >> you don't need anyone if you, you don't need all the senior managers. don't you ever twitter has senior managers. >> the cross over -- twitter is populated by a lot of the google

from communications to engineering. there's a lot of crossover. a lot of it would be hi old friend. >> a lot of it would be duplication. and they're seasoned as making morgan stanley streamlined. senior managers look out. you will be streamlined but we need an activist. without an activist twitter is going to report i believe monthly average users in retreat. that is what revenues follow that. that is why everyone is to agitate agitated. the stock was up 13%. then it was at 8% when we learned that dorsey is now running twitter and then when we learned costolo stays it's up 3% and then it's down as they tell david faber it should not be a range because everything is fabulous. >> there's your formula. the cramer equilibrium.

>> google used to be the champion. they're not the warriors. >> coty we covered it yesterday on a nice up day. obviously well above the prior high. giving some back today. today citi goes buy to hold on the news. >> the it's up a lot on buying well on a couple other brands. procter, i think procter was the winner there. coty has moved a lot. any company that makes an acquisition the stock goes higher. hence why if google wants to go up they have to wait for the call. you have to buy somebody in order to have your stock move. anyone that bought someone is up. anyone that stood still is down. except for intel which paid too much. >> earlier this morning you said markets up on the notion that

the fed gives greece the out. do you sell after the statement? >> that's interesting. i think usually you have a big bad event that passes usually more buyers come in than not. i would like to hear more people say greece isn't going to stay in and then i would feel more comfortable. yes, i'm going to say it wouldn't be bad to trim into tomorrow's strength if it's a typical situation. if the fed says we're going to raise no matter what because today is the day we raise, then i think that the market goes down. >> i'll tell you one thing. the vic vix as it relates to the dax, you have to go back several years to see it this high. people are starting to come home to to this idea. >> if you shut greece down you'll have immigration and the drop. who will come in?

will greece go to the east? who lost greece? let's keep in mind 45 boll. take a look at the market in october. a lot of negativity building. that's good. the fed is a wild card. the imf now labeled a world class criminal by greece. that's not how you do deals. christine lagarde does not look like the world's most wanted figure. >> generally when the credit card companies call yeah. >> i had them call in 1979. they were very orderly. they said come up with a payment plan. you know? just figure out who you're going to pay. pay a little bit to exxon. how did they find me clear across the country? the answer is pay them. >> that's incredible. >> it was incredible. i'd been out of california for nine months. >> they have their ways. >> yes, they do. >> dow is up 53. let's go to the floor.

>> good morning. broad but let's call it a modest rally. all ten sectors of the s&p on the move. materials, tech, financials kind of a broad rally here. nice moves on the up side. been talking about what the fed has been doing and how it's been influencing the stock markets. the most obvious one is in bank stocks. interest rates moving up and bank stocks moving up. new highs at a number of banks. a lot of them are regional banks and smaller local banks. sun trust is hitting a 52-week high. new york bank corp., a lot of these mid and smaller regional banks are moving up nicely and a lot of it due to expectations of higher interest rates. speaking of the fed, it's useful to look at what's happened since the last fed presser. interest rates and ten-year

yields are generally up. u.s. stock market small moves up in the s&p but not good. german stock markets peaked out the second week in march. the real big rally has been in crude. crude bottomed in the middle of march and has staged a spectacular rally. low 40s into the below 60 range. there's the big move up although it hasn't resulted in a big move up in emergency stocks. what's going on with the fed? they're data dependent. let's look at the data. misses recently? industrial production, housing starts consumer spending missed but there have been some beets. nonfarm payrolls. ism manufacturing, retail sales were inline. and building permits also had a nice beat yesterday offsetting the slightly weaker numbers on housing starts. it's a bit of a wash for them. i think the fed has three

problems. greece is a major problem for them. very interesting to see what they have to say about that and if they will acknowledge whether a resolution of the greek issue would make it easier to raise rates. the other are the world bank and the imf. they have both said don't raise interest rates. i got e-mails saying who cares. wait a minute. the imf was created to give advice to foreign governments. they tell poland what to do. why should we ignore them. i don't think their comments are irrelevant and i think it's going to weigh in their decisions and i'd like to see someone asking janet yellen about that. how much does that play into their decisions overall? finally, i want to show a chart of chevron. we staged a great rebound since the last fred presser but not in oil stocks. chevron hit a multiyear low yesterday and there's a number

of other sectors moving down in the oil patch in the last month or so as hopes for a big rally and energy and an increase in oil production has faded even as crude moved up. why is crude moving up and oil stocks are not responding. we'll talk about in the next hour and the possible reasons behind it. back to you. >> thank you. >> chevron is too cheap. >> let's get to the bond pits. rick santelli is back. welcome back. >> hi. listen listening to bob, of course, everybody is using the expression data dependent but maybe the it's a normalization psychosis that the fed has and many central planners. the training wheels are on. using greece as an excuse the more i think about it i can see europe as an economic engine and using it that way but we all know that greece has issues but it isn't going to represent a sizable amount of cubic inches

in that european economic engine. look at one and go days of ten-year note yields. we're drifting up off yesterday's lows. 230 to 240 seems to be a zone traders are comfortable with. should we go above or below the points it might be different. april 29th, we could clearly see that right below, look at the left center part of the chart, all low 230s. let's look at bund deals. they traveled a lot more ground but there are aspects to the patterns. if we want to look at the spread between the two, and i think this is good. what we need to do is look at bond yields from september in the u.s. ten-year notes, actually. why? there is so much going on with this chart that when you look at the separation of the two back in this kind of 150 difference

one could say this is normal. we've relinked what seems to have given us a lot of sideways activity. look at it from a technical vantage point. if we look at it since early february, '93 to '94 is a successful market. they will continue to trade off that. carl, back to you. >> all right. we'll talk to you in a little while. oil prices on the move higher. jackie here this morning. >> we're seeing an 87 jump this morning. what's interesting is we saw a draw down in engineinventories. we have the fed at 2:00. traders keeping an ear open to that as well. any implication on what will happen with rates impacts the

dollar and then crude. that's important. also tropical depression bill making its way inland in texas and there is possibly for flooding there, a threat for flooding. that is something we're watching as well. if you look at the charts for heating oil, they're higher. a perfect storm to take crude prices higher here. but the next data point is at 10:30 and traders are expecting to see a decline about 3 million barrels of a draw down. >> thank you very much. still to come this morning, a venture capitalist who was one of the first investors of amazon. we'll get his take on the company. dow up almost 60 points. more "squawk on the street" back in just a moment. the e-class has 11 intelligent driver-assist systems. it recognizes pedestrians

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moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. hey, can i help you? yeah, we're interested in the iphone. we promised one to beth for her birthday. you know mobile share value plans now include rollover data, so the data you don't use this month

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dominating the box office and it shattered opening weekend records. the producer of the avengers has responded. congratlags to being the new world opening king. chris prath chris pratt tweeted back saying classy move. >> it's interesting. some industries people really hate each other in. boing boeing hates air bus. this is an issue where people tweet friendly things. it's kind of interesting. not every industry is that way. >> pixar's first film in two years. they call it a pixar streak. there's a possibility that

jurassic breaks that streak. >> they're the greatest. i know i work for comcast, but i haven't enjoyed a mu eovie with my daughter since alice in wonderland. >> i know you liked 3 d before but are you an i max convert now? >> i don't know. >> a frequent guest. >> spencer rascoff, where has he been? >> i max is close to a new high. >> i was not a fan and then you go to this movie and this was like avatar. >> my daughter was like stop it. >> yeah. it's not going to hit you. there's chatter that avatar's record may be broken as well. >> when we get wac, we'll get

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time for cramer and stop trading. >> i was looking up where

chevron was when oil hit the low and chevron was above where it is now. there will be deals in the oil patch. oil is not coming down. you'll start to see major acquisitions. >> and those who write in and say we're underestimating production. you still believe we've found a low? >> 2015 is going to be an up year for oil production in the u.s. and iraq but the oil stocks are trading at a different price. chevron is trading below where it was at the low of the cycle. that's crazy. underarmor, yesterday they put through a strange new class of stock and it went up anyway. why? they are linked with stephen curry and i think that stock went up because of that endorsement. i mention it because just like boeing doesn't like air bus,

nike and under armour are not friends. i happen to like both companies. >> do you have a favorite between the two? >> at this point, i still have to go with under armour and i think if they buy lululemon, it would be a stock that would go quickly to 90 to 100. >> they have shown their appetite for my fitness pal being the most recent acquisition. >> nike dominates the world. jordans, they don't even know who jordans are, the younger people but they have jordans. but remember chip on the shoulder guy versus a nice. >> what's on tonight. >> we have brent saunders. and then richard pops. stocks up yet. a lot of people think that alkermes is a stock.

they've been trying to solve a problem with their new drug. >> we'll know a lot more about things after this press conference. >> i'm trying to do my job at 2:00 but i can't. i'll stop in and say hi to brian. what's going on? >> hop onto your stepladder. >> when we return she was adviser to richard fischer and has a bone to pick with the fed. and also david rosen berg will tell us what he'd like to hear this afternoon as we hold an to a 34-point gain. a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive?

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and innovation. ♪ >> good wednesday morning. welcome back. market is settling into a much tighter range than we've seen for the past few days ahead of the fed meeting statement and, of course the prez conference coming up this morning. crude oil another big story we're paying attention to. >> let's get to the road map for

the hour. fedex hitting a roadblock this hour. we'll tell you what to do with those shares today. >> plus the st. louis cardinals caught in a hacking scandal. how serious is it? we'll talk to a sports illustrated writer. >> and energy stocks hitting new lows. find out what's behind the drop ahead of a key data point today. we start with the federal reserve. that decision a few hours away. waiting for any type of clarity or clue on an interest hike to came. steve liesman is live with more on what we can expect. high expectations for today. >> sarah, thanks very much. here's what we know about a rate hike. when and if it comes, there will not be a specific wink and nod like in 2004 where they sell telegraphed that rates will go up at the next meeting.

the fed is swearing it's data dependent. that means take how what they say about the economy. that will tell you whether or not rate hikes are coming. expect janet yellen to craft the first photograph very carefully to send a signal whether rate hikes are on the way. now, it's well to remember this was going to be the big meeting back in the fall most of wall street believed the first rate hike would come in june but the strong dollar a weak economy, and oil derailed that plan. are we back on track? the fed will upgrade the outlook today. they say the gdp rubbing. wage growth up 2.3% in the last payroll. that's up.3.

the unemployment remains unchanged in. that's because the labor force in may grew the most it has since 2008. leadership at the fed grappling. it has to factor in the consequences of a strong dollar if it raises rates. also has to brace for the fallout from a possible greek default. all of that combined to provide the reasons why the fed is likely to wait today. we'll here from yellen whether he expects the conditions to be ripe for hiking in the fall. now, guys i want to show you what we consider cnbc ease new dot plot. let me put up and show you. what this does is the size of the bubble is relative to the number of fomc members at that rate. you can see we've labeled the one with the most dots.

.625 for 2015 is from frill. 1.625 in 2015. we'll get new dots and see if they change at all. >> i won't ask who decided to use a graphic representation of a bubble on the dot plot, steve. >> that was me simon. no editorial slant intended there but you pointed it out. >> i just want to ask you one thing. can we have a look at where we are on a weekly chart of ten-year treasuries. what is happening in greece is clearly impacting our markets here. a huge surge for at least two days on the treasury market reversing the recent trend that took yields down 20 basis points as a result of concerns. they have their hands tied to an extent. if they don't know if greece is going to default in two weeks. >> to an extent.

if you widen out the chart, it's gone out quite a bit, and it's made me think -- and given what's happened to the stock market have we already been through the temper tantrum? has the market priced it? ? our fed survey two-thirds of respondents think the first rate hike was already priced in. it's down a bit. but in general, it seems to have priced in anywhere from a quarter to a half a point hike by the federal reserve already. >> that is the bigger point. let's bring in david rosenberg, strategist. welcome to the program. >> thanks. >> this is a real high wire act now for janet yellen this afternoon. isn't it? on the one hand the lift off is close, possibly september but the moves will be gradual from that. we're still data dependent and there's no set trajectory as to where we're going to go. that's a lot of boxes to check at once. >> that's why i think the dot

plot is so important, and more important now because you know we're not in january or not in march. you're getting closer to the end of the year and so the question is, you know does the median dot of 0.625%, which would mean not just one rate hike but probably two in the markets and it's not even 50/50 for september. how does that change? but from my perspective, i think you're right. i think that there's a high wire act that the fed has to follow here. look, they clearly want to get off of zero and zero is not the right policy rate for the economy right now, and they still have some convincing to do for the markets because it's not fully priced in for september. at the same time what's going to be interesting is to see how they change those dots for 2016 because they want to get off of zero but they also want to convince the markets it's not going to be a repeat of 1994 or

of 2005 and 2006. so start hiking. by september, i think that makes perfect sense to me but convince the markets. they don't want to lose control of the bond market. that's stage two. >> let me pick you up on that. let's have a look if we can at the long end of the treasury market, the 30-year and over two months this huge surge that you've had in interest rates, let's call it 50 basis points. what is the market saying about janet yellen? is this about future inflation in there are some that would suggest that central bankers are deliberately stoking the bond market to raise the rates, perhaps for the insurers or pension funds and obviously there may be some comment about volatility from janet yellen specifically on the bond market today. >> well what's interesting is the future's market is really priced 50/50 for a move in september.

i think that would be unusual to see the long end of the curve, the yields prompted higher at the back end because of the fed or because of any central bank. i think it's a lot simpler than that. when people look at the move in yields off the lows. those lows at the beginning of the year were pricing in a global deflation nar backdrop that has materialized. we just got the numbers out of the euro zone and inflation is low but it's bottomed and ticking higher. i think to some extent you've taken deflation fear out of the marketplace, and the bond market responded to that. you're going to find my opinion. the fed has to manage expectations into september. that's not fully priced in. i think you're probably going to find the dots next year come down because they don't want the markets to price in. basically three out of every four meetings that the fed is going to be moving in the next

year or year and a half i don't think that's where they want the market price. what's interesting is what their forecast for gdp growth is going to be. even if they take it down to 2% from 2.5, that would imply 3% growth for the second half of the year. when you back out the fed's numbers and come to the conclusion they think we're going to be 2% growth and they're data dependent, how do they not start raising interest rates by the end of the summer. >> what's the hesitation now. there was a great note out this morning showing that since march, they've been looking for job growth and inflation, they haven't materialized. job openings are up. wage growth is up. commodity prices are up and as a bonus the u.s. dollar that has weakened since the march meeting. all of that should mean that the federal reserve should have what it needs to justify a rate

increase. what do you think is holding them back? >> well you know i think that said a while ago on your show i mean i thought the fed should have started raising rates a year ago, and i did say earlier it wouldn't surprise me if they didn't raise rates all yearlong. i wasn't talking about what i thought they should do but what they were communicating to the market. janet yellen has an opportunity to price in today. she took a pass. i don't think that's a fad that's so sensitive to communications where it's communication overload she had that opportunity. she took a pass. september is still in the radar screen. no hike today. they could have had the market pricing done by now. but people at the fed, they may be academics but they operate like portfolio managers. they don't seem like they have

to be in a hurry. and yellen told us the goal of the fed is get inflation higher. they're not going to be preemptive. they're going to be deliberately slow. >> david. >> they're going to go slow. >> we're running out of time and i want to end on what this means on the equity market. has this talk basically taken away market gains that we could have had? what is the positioning we're seeing here in what happens over the next month or so. >> you have to look at what's happening in the equity market and the context over the past three years. we've had a situation where the s&p has gone up at an annual rate and corporate profits have gone up by less than 5% and smart people say the growth was not exactly organic and it was stock buybacks and other financial engineering. the market is flat year to date flattish but the it's been more a return to a stock picker it's

fine. if you had a hand full of tech and consumer discretionary health care and banks, you've done okay this year. if you've been in the utilities or the rate sensitives that's where a lot of the pain has been. >> david, thank you for your time. >> when we come back fedex had been bucking the trend on the rise while the other transports fell sharply. not the case today. we'll find out what we should do with the stock when "squawk on the street" comes right back. ♪ ♪

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♪ fedex under pressure this morning. earnings are a touch below consensus. revenue growth also a tad light. management telling it's confidence it will increase returns for shareholders. >> good morning. >> there's a lot going on here. where would you focus people in particular? >> i think the broader issue here is that really the

industrial economy in the u.s. has slowed down in the last six to nine months. first it was driven by emergencynrnl. as much as fedex and everyone wants to talk about e mers. a lot of their core business comes from production. i think what fedex was trying to articulate is that they're doing a lot of things that aren't macro contingent. they're focussed on higher value shipments and pricing. that should drive margin but a fickle wall street is going to say do we believe the growth? >> and hence the position? >> for a long time we've been talking about the ability for the management team to take cost out of their position. they've run off of double cost. ups is probably twice as good. i think fedex is starting to

show some real traction at improving the margins. >> can you tell anything about its e commerce business? i find it interesting that we've seen the announcements from uber an amazon about getting increasingly into shipping business. is that a threat to the fedex of the world. >> a couple of years ago, we would have said no. whether you pay them $10 an hour or $18 an hour you have to have a lot of density. i think what has changed, and i'm a late comer to the iphone but uber is such a cool app. when you think about the shared economy roll, that'se, that's where you can change a lot of things that could change how we've done things in the past. >> but just to extend the point, that's where amazon is apparently going with an app to

do that. uber unlocked unused cars they can unlock ordinary people who want to deliver packages. that's potentially huge or is it not? >> i think anyone who says status quo is the wrong way to think about it. change is constant. there are some big hurdles. do you want some random person coming up to your house and throwing packages at your front door? >> for the right price, maybe. >> that's right, but there's going to be some complications with that. it's not as straightforward as there's my driver that i'm comfortable with coming to my house or my business every day. >> are we still seeing people refuse to graduate up to express? remember that trend where people were taking two days instead of next day. is that trend intact or not? >> we're still seeing better yield on the grounldd. express is -- trade down is an

issue. it's and the characteristics of the people wanting more value as opposed to speed. >> obviously the holiday season is the be all and end all for many. the news is ups is going away with the larger deliveries. >> they're both trading. fedex is a little bit cheaper stock and if they hit their margin targets, fedex is probably better going into the holiday season. ups is scaling up with a lot of capacity. they're trying to build the church for easter sunday. it works well for the holidays but i'm not sure about long term financial returns. >> thank you for coming in. >> i want to get to john fort on the floor with breaking news on microsoft. >> it's going to take me a little while to go through this. changes at the level at microsoft.

steven e lop who was the ceo of nokia is leaving. also a long-time strategist is leaving. they say in an open letter they are planning to leave microsoft in september to form a private equity fund among other things. part of what microsoft is doing is consolidating devices under terri meyerson. all of that will be under him. scott guthrie will continue to lead cloud and enterprise and the dynamics business will now be under him. kulil will have offices and other services. going along with the strategy. cloud first, mobile first, consolidating certain functions under windows and under cloud and enterprise and steven elop who came with nokia is leaving.

>> interesting news. microsoft shares for now unchanged. >> coming up the cardinals being invested by the facebook but did the team really gain an taej have a hack? an insider and sports illustrated writer joins us with the latest when we come back.

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sounds like a story we've heard before. one of sport east most successful franchises reportedly caught sneaking to gain advantage. the facebook is investigating the saint louis cardinals but how serious are the allegations. joining us this morning, an

insider for the mlb network. good morning to you. >> good morning. >> they're calling this a scandal, an alleged scandal for the money ball era that could make past episodes of cheating look like small potatoes. do you agree? >> too soon to tell. we don't know whether this is the act of a couple of rogue anl analysts or if this is something constitutional. how far up the chain of command it goes. it's too early to me. it's curious to me baseball has a long tradition of quote, unquote, cheating, whether it's stealing signs or the steroid era but this is the first time we've had a federal investigation for really what amounts to corporate espionage. the scope of what happened here we don't know yet. >> what is your suspicious about

what could be gained. >> probably the most important information you might be able to get and there was information about possible trades the conversations between the manager of the astros and other clubs about possible trades were included in the database as well as the astros have as most every team does a system that places a monetary value on each player and prospect. they would clearly understand exactly how the astros valued their own players and other players. the interesting thing to me though, is typically in the act of cheating in sports you keep that information close to the vest because that's where you're getting your advantage from. in this case the information gleaned that was published anonymously online. i don't see the advantage and that's why there's some sus pish that that there was about embarrassing the cardinals front

office. >> given everything that we know so far, how should the league react? they're waiting to see what the feds uncover. should they be doing their own and if they find anything how should they take repurrercussions on this. >> that's right. they've been looped in the fiebz's investigation when it began. they are sitting on the sidelines to wait for this investigation to run its course. after that then it'll decide what possible discipline in terms of people losing their jobs or fines but right now they're saying this is a matter of the fbi, and when their investigation is done we'll step in. >> they joked roger goodell has already cleared the st. louis cards. we're adjusted to the idea that

there is going to be cheating and that it's going to go under underpunished n. underpunished. it's not good for the sport. >> it's not. and they're known as a gold standard in baseball. highly successful. the drafting and development of players has been a model for other organizations. so i think that's why this resonates even more stockrongly. it's interesting because the cardinals, when you look at the time the breach was made the astros are one of the worst teams in baseball. who's going to steal information when the best team is trying to steal informing from the worst team. there's a lot of questions. what was the scope of this breach? is it something that's systematic in the st. louis organization? >> tom thanks so much. >> thank you. >> straight ahead on the program, a former adviser to the dallas fed president, richard

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zblnchtsz welcome back. the eia out with the weekly report. a draw down of 2.7 barrels inline from what we heard from the epi. what's surprising is that

gasoline saw a build of a half a million barrels nature trading around 61.10 when the numbers came out. now trading at $60.80. the tropical storm could have an impact as well. that's probably what's holding us up at this point. gasoline a surprise. crude inventories in line. now over with the updates. >> thank you. here is the news update at this hour. the u.s. and other nato members are participating in a baltic sea military exercise. more than 700 international troops making a landing in northwestern poland. shapes from 17 nato and partners countries are involved in the operation. south korea announcing another death and eight new cases from the mers virus. the international airport in seoul being disinfected from workers wearing face masks and

goggles. the tourism industry that has suffered from that outbreak. and north korea is suffering a drought resulting in damage to agricultural. and tropical storm bill which was downgraded made land fall in south eastern texas. some streets in houston completely flooded. up to 8 inches of rain fell on the city. and that is our cnbc news update. let's get back to "squawk on the street." >> energy stocks some of the top gainers coming off of recent lows. we have more on the floor. >> we're getting a rally in energy stocks but that's the trend. people have been asking me what happened to the supposed big rally in energy stocks. chevron yesterday hit a three of

year low but that's not the only one out there. the xle, a basket of energy stocks had three separate atechlta attempts to rally since december and january. it's fading and the volumes have faded. it's moved down. the rally in crude is another one. we had a great rally off of march lows. that's been sideways for the last six weeks or so. here's the problem right now for the energy patch. everyone bought energy stocks aggressively on 2013 on the theory that oil production would bounce back but that may not be happening. the problem is the saudis. everyone thought that opec and the saudis were finished. it seems like they can dictate prices. they're going to do anything to maintain than market share. they will pump more oil. they're sticking to that position. the up shot has been there's a

crisis of confidence in investing for the energy patch. why invest billions if the saudis could increase production? that's the problem. and another one, the shale producers need to borrow a lot of money. they've been going to the high yield markets as well but the problem is the high yield market is pushing back. cash flow has been very poor. they want higher rates. the rates are going up. the saudis are pumping. that's an additional risk. they're asking for more and higher interest rates and having a hard time doing it. they're likely going to increase the amount of shares outstanding in the next few months. you'll hear a lot more about that. there's concern in the overall markets. if you look at the xop, that one had another rice rally beginning in april but in the last few weeks, these markets have faded as well. there's the xop. you can see it fading in the last six weeks. you don't see the volume but that's fading as well. and oil service names, the

separate area, they also haven't been going anywhere because they're not going to get the capital expenditures people thought they were going to get in 2016. this is a big problem. oil production not increasing the way people thought it was going to happen a few months ago. back to you. >> we have breaking news now on uber back at hq. >> we have a ruling against uber from the california labor commission in favor of an employee driver who sued the company. the california labor commission has awarded her 4$,000 saying he is j in fact an employee. now, this will go to expenses for the driver. uber has appealed the decision. it's important to note that this isn't one of the big cases against uber that we've been watching in the state of california but the fact that they've ruled in favor of her becoming a employee could set a precedent. they are facing lawsuits in whether their drivers are independent contractors or

employees. we'll certainly bring you more information on this as it comes. as we said uber has appealed this decision. back over to you. >> it's hard to keep track of all of their legal disputes. thank you for doing it. the fed today, we'll have janet yell en's press conference later. our next guest is with a fiery op ed on the institution where she worked for nearly a decade. here's a piece of it. while it's conceivable that well intentioned people want no part of it. the fact remains that the lack of action on politicians part would not have been possible absent the fed's allowing congress to abdicate its responsibilities to the manna of easy money. joining us finally quotable and this is your coming out party. >> thank you for having me this morning. >> in your first piece, you're critical of the fed, congress or both?

>> i would say of both. to coin a chee shea it takes two to tang go. >> so the qe era as you call it has been controversial, but most of the controversy and critics are outside the fed. why as a fed insider are you critical? >> well i was kind of on the outside looking in for the better part of a decade when i was at the fed. i used to joke with fisher all the time that instead of quantitative easing that we should have called it quantitative pleasing. it seemed as if the policy makers were allowing the markets to dictate you policy should be made and that type of thinking can get central bankers in trouble. >> what do you think is going to be the consequence of the easy money, that the quantitative

easing -- >> i have a long departed hero who coined the name mal investment. i think there was a very identifiable bubble in the housing crisis. i think today we're dealing with several bubbles, and now that central bankers around the world are engaged in a currency war of sorts, i think it's gone fwloebl. i worry about the credit markets. i worry about the stock market and the commercial real estate market. >> are you hearing that fiscal policy should have been tighter or looser on congress's part? >> i'm arguing that we should have extended out the maturity of the treasuries given the opportunity. look at what mexico just did. they just issued a 100-year bond. look at what a company did, the same thing. i'm saying that congress has had an opportunity to indemnify the

nation's balance sheet. >> by taking advantage of low rates. >> right. out to a longer maturity ten anne and that's been squandered. . >> what's your opposition to the move. >> it's the lovely veneer of lower deficits. the country has paid 1.8% over the past few years but it's smoke and mirrors. great britain has made great strides in trying to do the same thing. you're preparing for the next crisis so the country is in a better position. >> what do you think the problem is within the fed of why you see bubbles and they don't? do you think it's a reliance on models? too many academics? what's the problem? >> again, i'm speaking as a former outsider who worked on the inside. i see the world through the

prizm of the markets. i would have to say the fed has relied too long on models and that it's not paid enough attention to financial stabilities and the seeds that are sewn when interest rates are kept too low for too long. the result is never beneficial. >> can you describe though you don't look like a central banker but you were within that kind of decision making process or part of the discussion groups around it. how aggressive is a discussion behind closed doors without going into great detail what's the structure that allows you to have input into something that janet yellen might say or are people like you cut out? >> look i do think the way that the fed was originally established provided for a means of checks and balances and i think the regional feds especially as the u.s. economy has expanded it's not centric

on the east coast. there are massive economies in california and texas where i come from. the -- it has to be for our voice has to be heard around the big table. >> do you talk to yellen's staff? is there that conversation between all of you? >> there's certainly not but i will tell you all the years that i worked for fisher and he told me himself that there was never a time that he didn't take the analysis that i provided with him and place it at the table at the federal open market committee meetings. the issues of the markets and the financial stability were being raised. i can tell you by fisher and you know the other well known hawks. unfortunately, i don't think there are quite enough voices of dissension today on the committee. >> knowing what you know about this fed, what do you think she will signal or do today? >> i think the market has grown accustomed to not being shocked. i think this fed has, again, allowed the tail to wag the dog. it is so afraid of upsetting the

apple cart. on the other hand, after nine years of inaction i think the risk is that the fed's credibility itself is at stake because they don't feel they can come out and disrupt the markets. as some point you've backed yourself in into a tight corner. >> like a parent who hasn't disciplined their kid in ten years, right in the kid is going to act out however it wants. >> it has been but it has to be expected and faced dead on. come what be with the consequences. >> you think they'll raise rates this year? >> i think if they don't raise rates this year with all due deference of the imf and the world bank i understand where they're coming from. i think if they don't raise rates the signal will be more negative. there's been enough justification, especially given the the current goal posts. i don't know if they'll move the goal posts again.

they move them constantly. i hope they don't. but given where they are currently, i have to say the justification is there'ven if it calls for cancelling christmas and raising rates in december. even if they don't hike in december. >> i have a feeling we're going to hear a lot more from you. good to have you. >> thank you for having me. >> when we come back an exclusive interview with the ceo of adobe, the stocks under pressure after a weak outlook. the ceo will join us after a quick break. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac.

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you got this. an hour with.

before that i want to draw your attention quickly to the screen. a great on ed today will

congress now reign into the fed. put on the screen the part i enjoyed the most. at the center of this case is the violation of the fifth amendment's constitution bedrock protection. it requires due process and just compensation before property can be taken for public use. that's about judge tom wheeler the other day saying basically that hank greenberg and aig were done a wrong. forget the transferred profit from the fed to the treasury. this really is about the constitution. and i know being a fed day maybe this is not the perfect time but i think it is exactly the perfect time. because whether it's about infrastructure or whether it's about the whose guarding the guards, in this case the federal reserve or thinking back to when everything was going on in '07 looking at the actions of geithner, the treasury secretary, what was the comment,

this is in the gray of the charter. i'm para phrasing but in my opinion, if we have to do things that tear up the rules of the road and create bad precedence for future crisis this wasn't the way to go. sometimes trying to make things painless makes them worse. one hour come back and we'll revisit with mr. oelsen all that he thinks about will happen in today's press conference. back to you. >> all right. up next on the program, mortgage rates just hit their highest levels since october. what does that mean for the surge in the housing market. and then star bucks is closing all your la boulange locations. find out why when "squawk on the street" comes back.

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morning plings applications falling as rates hit their highest levels since october of last year. our diana oleic is live in washington with more. >> yeah rising rates continue to take their toll on mortgage volume, down 5.5% for the wik. applications to refinance, which are most interest-rate

sensitive. fell 7% from the previous week they're just barely higher than a year ago, a much smaller share of total applications than they've been in a long time. applications to purchase a home were off 4% for the week. still 15% higher than a year ago. we want to keep in mind that all-cash sales are still at historically high levels about one-third of home purchases tlks a lot of housing demand but not all of this is mortgage-dependant. this comes as the average contract rate for 30-year fixed mortgages with conforming loan balances increased to 4.22%, from 4.17%, as interest rates rise, some borrowers are turning to adjustable rate loans, so-called amplts r.m.s, the raid on a five-year arm is about 3.1%. you can get a lower rate, but these are riskier loans as they can adjust higher. a little perkive here at height of the housing boom in 2006 a.r.m.s made up cles to 35%.

that included all kinds of variable-rate loans. by april of 2013 after the crash, a.r.m.s were barely 4% of the mortgages. simon. >> an a.r.m. would be interesting, five years at 3.1. diana, thanks very much. starbucks is making a move announcing plans to close all 23 stand-alone la boulange stores in california. jane wells is live with more. >> starbucks wanted to conquer breakfast and move into lunch and that's the reason it bought san francisco's la boulange for $100 million. one year ago this month it opened the first one here in los angeles and we were there. >> starbucks is venturing outside its comfort zone brewing up a fast casual concept. but there's a lot of foodie area part of town so the competition will be interesting.

apparently the competition was too interesting. all three la boulanges are closing, particularly heart-breaking to people in san francisco who love the chain. this even as starbucks praises the success of the la boulange products inside starbucks stores. breakfast sandwich sales grew double the pace. thanks to la boulange. the company says starbucks has determined the stores are not sustainable for the company's long-term growth. so no more duck conit hash in the morning. a starbucks senior vp is leaving the company and starbucks has closed branded stores of other acquisitions before like seattle's best closing an evolution fresh store in san francisco. on the other hand it plans to more tevana stores if you've created a company and starbucks

is on the acquisition hunt and is interested in buying you, you have to ask yourself after you see this track record do you want to sell? knowing you could be swallowed up? i don't know sarah, back to you. >> good question for some of the smaller companies. >> they got $100 million in the process, didn't they jane? >> yes. of course. but he's leaving the company. he built this bap, he sold it. kind of like seattle's best. starbucks buys it swallows you up, gets rid of your branded stores. you're a very rich person, but you've lost your baby. >> starbucks is trading at an all-time high. levels back to the early '90s ipo. jane wells, thank you. now over to jon fortt with a look at what's coming up next on "squawk alley.." >> we got an exciting show for you. zillo's ceo spencer rascoff will join us to talk about social media. and an important ruling in california affecting uber. the drivers, are they employees

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good wednesday morning, it is 8:00 a.m. at oracle arena in oakland, california and 11:00

a.m. on wall street and "squawk alley" is live. ♪ ♪ ♪ ♪ welcome to "squawk alley," congratulations to golden state after a great series joining us this morning at "squawk alley" at post 9, zillo ceo spencer rascoff. good to see you and kayla tausche and jon fortt. markets in a narrow range. first up twitter's interim ceo jack dorsey reiterating his new job is only temporary. in a statement to re/code he says quote