thanks for joining us. be back here tomorrow. "squawk on the street" is next. good tuesday morning this morning. i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. look futures relatively steady. ten-year remains relatively subdued right below 2.18. oil managing a small bounce just shy of $46. china got a lift as china tightened short selling never

night. and exxon breaking below the two-day average but taylor swift in have been aty fair prizing the company. >> at least it's still above the ipo price. >> earnings coach with a pretty good beat. cvs plagued by disappointing guidance. >> in china, investors must wait one day to cover positions and pay back loans to buy shares. this comes one day after the u.s. shares fell. shanghai managed 3%. come firms saying we're out, for short selling. >> this lasts for what i feel that the chinese government -- honestly, i don't think they're idiots. they watch our show and understand things and they recognize the market has gone

lower. let's make it go lower at a slower pace. i think people are presuming the government is trying to prop it up. i think the government is saying listen, this is your chance to get out. we screwed up. we're trying to be in correction course. it's a totalitarian government. there's not an election. if there was an election they'd throw them out. that's not it. >> they have a five-year con fab, don't they? >> five year plan? i just think that look does it make sense to be in that market? no. do they give you a chance to get out every other day with the crazy regulations? yes, but they screwed up and they're trying to get out out in a gentle way. >> in the men time yesterday's ism was the first since '02 in which no commodity reported an increase in price. we got the trannies out of correction territory now. >> airlines good.

>> does that continue? are we going to ride this for a while? >> when i did mad money last night i said okay look we should have been x but i know the mission yesterday about the correlation when it all goes down the dow goes down yesterday was a nutty day. we had lots of good things occur later in the day where i felt -- that was that big ramp at the end of the day where people realized the airlines can lead us like the old days. if that continues, i think this you could see a bit of a rally but there's a lot of counter intuitive stuff going on right now. this apple 200-day moving average. i was out with a group of people last night. it was a group of people who either they wanted to -- i hardly go out with people. >> that's not true. >> you go out a lot. let's set the record straight. >> i would divide the room into people who were short apple and people who were scared about owning apple.

i thought that was an interesting mix. i said what's the matter. they said 200 a day. what about the match? 200 a day. okay take a 200-day moving average. i'll get tim on the phone and say -- tim cook -- do you know about the 200 day. in the end it's an interesting stock. i think it's attractive. >> as jim implies, apple shares in correction territory now. crossed below the 200-day. it's $121.64. record is 1.3. it hasn't broken the 2 00 day but once. >> i have to say something about what happened last night. i night. i mad i max on. i presented rich a chart with i

max's chart with shanghai. you couldn't tell which one was which. this china stock market leads to a slower apple cell phone sales. it has rippled through the nxpi everybody, and you can't look. if tim cook had to come out every day and give you daily chinese numbers, he wouldn't be able to do his job. but this is overlayed on shanghai shanghai? is that right? the chie cheesenese has been the urban marginal buyer. >> it kriblted a great deal of their growth. as the true engine of growth for apple. there's no doubt about it. and to the extent you want to make a logical conclusion about the impact of the tumult for the average consumer in china, it would be the clearest indication or the clearest way to get there

in terms of them suffering losses. the chinese market is up substantially over the year but many people got in late and lost it. >> jokesaudi was bad. and they were the first one to tell you. they're not buying johnnie walker blue. i know that. >> yes, as they trade down. >> it's an overvalued scotch. it's a blend. it's not a single malt. >> some things you don't want to give up. >> in the meantime we have a new cover of "vanity fair." taylor swift is asked about her online issue with spotify and apple. here's what she says. apple treated me like i was the voice of a creative community that they actually cared about and i found it ironic that they reacted to criticism with

humility and the startup with no cash flow and the company with no cash flow reacted to criticism like a corporate machine. >> one thing people like is when they say we made a mistake, let's fix it. remember the weekend when she came out and was unhappy and by the weekend it was solved? i think the people who change their mind are embraced. they changed their mind. a big company changed their mind. we're not used to that. >> well just the logistics of dealing with the legal ramifications j consulting with your general counsel's officer. the change they made was huge. >> she's huge. she's huge. i got 20 tickets to a concert of hers. i said what am i going to do with these. i have lost more friends because i did not give the tickets to 100 people.

she's a force right now. she's a force. she is so far above the 200-day moving average, you show her your apparel. she has the golden cross and the death skrosz visiting apple. if you want technical analysis of someone holy cow. >> the cover of "vanity fair" can be a tipping point sometimes. you never noef. remember the si curse? sports illustrated? >> who was the last cover of "vanity fair"? >> i don't know. channing tatum? >> kate. >> no it wasn't. there's been one since then. there has been. i get them in the mail. there's been another one since then. >> all right. >> who was a recent cover person. her movie, it was all on balance. >> not twitter, jim. >> very smooth. twitter falling to the lowest levels since opening for trade back in november of '13.

shir shares taking a hit. 29.17 is the print this morning premarket. people are making up theories that jack is purposely sabotaging things to get a takeover. it would be accretive for google at 11.17. accretive for facebook at 27.8. >> i read over the conference call again last night. and i decided that there was a sub text kind of like peanuts. it was like the comics. >> the bubbles? >> yeah. or that you lower a third. that thing down at the bottom that yellow thing, and it did if you own our stock, sell it and it was like noto said to buy it. it was wrong. and it was the whole sub text of the conference call was are you nuts to own our stock? you think we did a good job? we're awful.

are we going to improve it? i don't know. we're awful. >> okay. sometimes it pays to underpromise. doesn't it? >> how about overeviscerate. >> you chase a lot of people and start to get a new shareholder base and you bring in a new ceo at some point or at least anoint the current acting ceo as the real one and then you start again. and maybe that's -- you washed out everybody. >> it's like a do over. >> yeah. you're a do over at 19 and maybe you get people to stop talking about it endlessly. >> if it went down low enough there would be exactly what you just said. there will be companies who come and there's a bidding war but from what level. read robert peck sun king from sun trust today. the idea that there's a lot of ceos this company is so dysfunctional. it's frightening. has anyone left in the last 15

minutes at twitter? and it's always seen yore leadnior leaders. it's a senior creative important person. >> it is. >> whoever was head of operation total victory at twitter. >> you're not a buyer at 29 .27? >> my travel trust owns it and i'm suicidal. >> please don't be. >> i'm not. that's called a hyperbole. >> did you like it in the early days? >> we liked it then hated it then liked it then hated it. anyway. higher. >> $75 stock two years ago. >> facebook in the 20s. apple 100 points lower. we have a little piece of twitter. we have these restrictions where if you mention twitter, you can't sell it. there has not been a day where

twitter has not been mentioned. we've been frozen. i'm like an igloo. it's like frozen. >> i think that day is coming. where it sinks out of -- i think that day is coming. >> i'm busy in my garden. >> i'm glad to here that. growth in the garden in spring and summer. >> dublin bay shires making an offer to buy baxalta. they focus on treatment for rare diseases. it was recently spun off from baxtra international. i'll have more on this in the faber report. we're talking about a cross border hostile for a company with significant offenses. that gives you a little preview but jim, i know you're getting ready but we're running out of time for a block. >> i think this was just a bargain.

baxalta, they were 71 when they did the split. it's now at 84. everyone laughed at baxter that they were trying to unlock value. they unlocked a huge amount of value. >> they are talking about a significant buyback should they succeed with this. again, a lot more coming up. >> that company spun off the day that akahne called the top. >> when we come bangck, better than expected results from coach. take another look at futures. we have 13 dow components in correction. we had 12 yesterday. but apple makes it one more. a lot more "squawk on the street" from post nine in a minute. here at td ameritrade, they love innovating. and apparently, they also love stickers. what's up with these things, victor? we decided to give ourselves stickers for each feature we release. we read about 10,000 suggestions a week to create features that as traders we'd want to use, like social signals,

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much leaded lift. despite an eighth consecutive quarterly sales decline. they say positive comps in north american. north american comps down 19. it's actually pretty good. >> i was looking for down 20. one of the reasons why a stock can run like this i'm not going to mention matthew boss's name.

jpmorgan downgraded it yesterday. they took it from buy to hold and they were concerned about margins. the new products work. this is a sign of hope. and i think that one of the reasons why the stock can bounce is because yesterday a lot of people shorted it off the jpmorgan. >> we're going to get ralph lauren and coors. >> and yesterday ralph lauren was down badly, and ubs cut the price target. you may, hanes brands got hit the other day. at vf corp. there's a boyuyout and hold. this group is in hold. pvh was better than expected. g 3 started with a neutral today. they've been the one that's the strongest. >> you said it's a tough space

to cover. coach, it looked like inventories were a little bit tighter and margins were up. >> even though it wasn't much it made me feel like coach could be -- i don't want to say it back. look at fossil. look at cores. yesterday people trying to stir a buyup. they sold a ton of stock. are they going to do a short and then buyback? i think this group is hard and tricky. if anybody has an edge on it i don't mean to make too much. it's hard. you >> i hadn't noticed cores was straight down from 100. whoa. >> they made a lot of good sells. >> there was a lot of selling there early on in the runup. there's a lot of companies with

incredible strength after the ipo. i guess the highs we're talking over a year ago, i should say. >> but this is a tough business. who knew that kors -- stuart wietsman got bought by coach. people who want to be in those stocks, you have to like the product. columbia sportswear was up and down. i love it friday and hate it monday. who can be this crazy? >> on cvs, comps up.5 is the lowest of the past year. people talking it was nice some argue that they stopped selling tobacco but it cost them. >> it ran up yesterday near the bell. they're one that you have to -- before you just employee it out, be careful. that's like clorox. it was the best quarter in four years. let's hear what they have to say. >> what do you want to own, wall

greens or cvs. >> wall greenes. they're taking out costs and they're going international and that management of walgreens are killers. he's the belichick of drugstores. >> doesn't say much. goes down in his dark basement and makes the plan. >> he has that ring. he could be hof, that guy. i'm talking about walgreens. >> pasena could be a hall of famer. >> when we come back the dow is 714 points below the all time high for all you babe ruth fans out there. we're back in a moment.

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♪ >> all right. there you have it. a little music on a tuesday. we have about 7 minutes before our opening bell. >> stocks looking down. that's wrong. tom quinnlin. >> one business is focussed on print services and one customize customizes management and one focussed on financial communications and data services. there you have it.

>> they need to consolidate. these are con sol day or thes. the printing business is a down business but they keep buying everybody. the cash flow is great. tom was having a hard time explaining his company. even though it has a 5% yield. the reason he had a hard time it's difficult. he decided i'm going to give you what you want. >> they have a lot going on. >> it was hard to understand. it won't be and his companies will be con sol dadeters. >> why is the stock down? >> they missed the quarter. and they did miss the quarter. >> they missed the quarter and announce the split into three. no activist there. >> no. >> he's being his own activist. >> right. come in basically said okay i'm going to give you a good yield. each division will consolidate these not great businesses.

they'll be great. what's your idea? do you bet against him in i don't. >> another guy you never bet against is lynch lifer. >> you might as well take your life in your own hands. regeneron, they -- i was looking for -- i was looking for a number for this i leah big. they beat the number by $72 million. this is the fastest growing old drug i've ever seen. it's more macular degeneration. >> this was the original drug. >> right. this is like they were all going to laugh you. they all laughed at lynn and he who laughed -- he's laughing last. it's not even the important drug. the important drug is the

cholesterol drug. and a dermatology drug you should be paying attention to. >> i'll do that. i'll also mention sprint when we get to the opening bell and take a look at this board. shire for back allxalta. a lot more after this. my name is chris hughes and i am a

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you're watching "squawk on the street" live from the financial capital of the world. the opening bell in just about 60 seconds as we're working our way through a lot of earnings. haven't fwongone to aetna. raising their full year guidance and all state gymjim, you're watching all. >> aetna declining. >> that's the sweet spot. below 85 they can start making a lot of company. that's a terrific company. those companies do well. they merge and make money. >> that's so many years in the making. we'll see. >> a year from now we should be getting a much better sense.

>> there's a lot of positive news today. i like the setup. delta reported good passenger revenue. the key, the number down 3. i was looking for down 4.5. the airlines with good news. you have some good news in health care. you have some good news in biotech. a lot of good news. >> some good news. >> here is the opening bell and a look at the s&p. the adviser shares specific asset enhanced floating etf. and a -- >> some m&a after july the busiest ever month for u.s. m&a. >> and today which we'll get to in a moment this hostile, which may not occur, but nub thelsonetheless,

you can add that. the amount of consolidation that may continue to take place is staggering. some of it led by inversions some time ago and the after effects there but you have the likes of anler allergan. it hasn't closed. probably on the lookout for doing something else on the buy side. just the amount of volume in one company has done is staggering. >> they have to do a deal. the numbers got cut because they got rid of a business with low margins. he goes and buys am jen. can you imagine? >> you think that's a possibility? >> yes. >> there's that creepy silence, jim. >> i can play that came too. >> the creepy silence game? >> how about the spin offs? how about zoetis?

>> reporting numbers. >> these drug companies do things to help you. when is merck going to do it? >> it came from baxter. can we get to sprint in it's up. >> sure. >> it's up about 9%. people may be looking at the numbers. we know the success t mobile has had in terms of taking potential subscribers and the revenue growth. but sprint up. they raised their ebita guidance two between $7.3 and $7.6 billion. this is important. they've been working with soft bank and other partners in setting up a leasing company that will finance their devices leased by customers on attractive terms. they say the arrangements are expected to be finalized in the coming month. soft bank is an investor in the company. with additional expected expense reductionings, a capital and

funding from the po posed leasing company, print currently does not expect to raise additional capital through public debt or equity markets in the foreseeable future. for does it expect to sell spectrum. a lot of people thought they were going to do one if not all three. >> i haven't been a fan of stock. i thought it would be diluted by actions they had to take. this was kind of a power ball situation. meaning that sprint versus playing power ball. this is more investable now. >> they have fallen to number four, that said, as we knew they would. >> but i was looking for a bund rate. if you take that off the table, that's very good. >> a big takeaway. >> i've been after john legere

to give us some comment. we don't have that yet. >> i'm sure. any second yet. >> john legere should be the ceo of twitter. he could do it in his sleep splchlt. >> we have toyota. mike jackson on "squawk on the street" saying even as prius sales are down because of what's happened in oil, he still sees going to high rates for years to come even with the threat of interest rates going up. >> there's honda doing well. toyota has done a magnificent job cutting costs and they do a great job on the dollar yen rao. it's been incredible. i hay harmonsee harmon autos are good. they remain the strength part of the economy, autos. >> that's an important part of the economy to have strong. >> yes, it is. that's a good point. it employs a lot of people. >> alibaba share not doing much. they did appoint michael evans

has president effective immediately. he's going to basically lead their international efforts at the company. he's already a board member. you may recall he left goldman sachs not that long ago after a long career there. he was their eekey banker for many years. on the board of directors, but this is about globalization for the alibaba group. he will be responsible for leading and executing their international growth strategy to globalize the company outside of china. doesn't necessarily mean here. it means in a lot of other places. >> so here we have all that good news against apple and there's so many people who own apple and the market cap is so big. this is the freakout. it's incredible. there's a lot of good news in different parts of the market here. such a better setup than yesterday. >> a couple of good stories. outback comps up four. that stock doing okay.

not the same for texas road house. >> that was nothing to write home about. i disagree with denny's. denny's i was on that call last night. i kind of liked that call. i was always partial to the grand slam. there was an egg shortage. they had to raise prices a little. that was a decent quarter and they're still remodelling. i like the restaurant food. >> i hop is setting the standard. these comps last week -- decade highs for the past three months. >> and that stock was languishing in the 90s and no one liked it. i believe sonic is good. when you get gasoline guys these guys do better. darden has been such a winner. look at that darden will you? >> amazing. it's that really management acumen or getting lucky on the

price of gas? >> no. the previous ceo said it's tied in with gasoline but i don't want to say luck. i think they did some remarkable things turning -- they knew olive gardens look good and when you go you can get a seat. they're better managed. the old days when we would go with the cargo pants, now it's a little more upscale. you get the rolls. >> yeah. when you're here you're family. >> unending salad. >> let's get to bob, actually, you'll -- >> let's get to this very big deal this morning. of course potential. 7:30 this morning shire sends a press release out and says we're making an all stock offer to acquire akbaxalta. many people think i think i know that. it had a $22.4 billion market before today. the offer.1697 for the adr of

each of these shares. they talk 20 billion in sales by the year 2020. and post close shire given it is all stock is going to buy back a lot of the stock, up to 13% of the shares within two years. they would fund that through debt and through free cash flow. let's get to values. if values baxalta at 16.8 times current ebt da and looking back it's about a 15 multiple. we're talking fairly significant multiples for a company, you may ask, what is it? it was spun off on july 1st from baxter. we talked about spinoffs and some of the values. key drugs in hemophilia and the immune globulin space. hemophilia in particular. >> they've been a dominant

player in blood for years. >> that's where they are. there may be some pipeline execution risks. i'm hemophilia made up a lot of revenue. may be down a bit there. it gives you some sense to the makeup of the company. again, a leader in those two areas. also a company that has significant defenses. we often see this with companies that are about to be spun. they put in significant defenses to give them an opportunity to stay independent. in this case we're talking about a poison pill that kicks in at 10%. we're talking about a skagerred board of directors and the inability of shareholders act by written consent and a couple of other things too. making it very difficult if you are a hostile bidder as is the case here. we're talking cross border all

stock hostile from shire. it makes it difficult to find the pathway where you can really leverage your offer not just by getting shareholders to say please talk but if you don't, we're going to come after you. in this case they seem to be relying on please talk because we think it would be in the best interest of your shareholders and then some larger questions about shire itself. it had a deal to be acquired until that deal fell apart when treasury changed the regulations on the inversions. shire is a dublin based company with that extraordinarily strong or i should saline yenty lenient tax rate. there has been speculation in the market that agn could revisit shire while some think a potential combination with pfizer would make a good fit.

i don't think there's anything going on in that front in terms of that. it's been around. we've been hearing it. know we abvi tried once. the deal fell apart. we'll see. this is going to be a high degree of difficulty for them to get it done. >> if allergan were to buy shire, you wouldn't get that tax benefit. >> they're both enverted already. >> that's why i like the am jen alternative. >> allergan using the lower tax rate to its benefit. pfizer would like nothing more than doing inversion. they have to do it with a partner large enough to pick through the tightens regulars from treasury on what you're allowed to do if you try to invert. >> why is all this happening? is it because of inversion? >> inversions have created an unlevel playing field. you need responses and you have top line pressures. with the consolidation of the

hmos or the strength of a cvs, how far can you push drug prices. you benefit from the potential cost savings that come with these deals. >> we're seeing a lot of good news. abmd, they just had a really good fabulous quarter on new devices. edwards life science has been a total horse. st. jude and these were all playing with one hand tied behind their back versus medtronic. >> that was the last big one. interesting to note shire shares are down. we'll keep an eye on those. shareholders perhaps a bit surprised given baxalta has been a public company for all but a month. >> i thought it was a hoax. i told david, it's got to be a hoax. no. >> nope. >> biggest shareholder in baxalta, baxter. >> baxter -- everyone -- there

were -- no. there were many people skeptical that baxter could bring out value. not unlike people selling rrd. rrd is up a dollar now. >> look at that turn around. >> kind of like sears. maybe the mad dash impacts a little. >> mad dash impact on stocks. >> mad dash impact. >> dow is down 11 points. worst performer is apple. let's go to the floor. >> reporter: mixed market but for once we see energy and materials on the up side. china is up today. let's put up shanghai and shenzhen up 2%. now they bid short selling on a daily basis. shanghai and shenzhen it's incredible. it's up today. i want to note luxury slowing down, another big one. bmw came out overnight and said china is slowing down and the sales in china is slowing down.

bmw is down. the trades in europe but it's trading down today in concerns they have to revise their forecasts because the slower sales in china. that's a big issue. speaking of the luxury a little bit better tone today. we talked about this yesterday. what a disaster it was for kors. coach was weak. a small beat on the top and bottom line. mainland china was positive. a nice move in coach. the important thing about coach is they get most of their sales in the united states. 62% of their revenues is in the united states. only a small amount is in china. a lot is made about china revenues but it's a lot smaller than people think fbt coach overall. here's the issue. sales are down dramatically. it's reflected in the stock. fourth quarter sales are down 19%. put up the next full screen. if you eliminate the flash sales, eliminate flash sale

events, it's down 10%. even down 10%, that's a huge decline. a little wonder. luxury brands are down as consumers are getting more price sensitive. kors are down 48 %. look at the declines for the year. a little bit of stabilization today. oil stocks a little bit better. conocophilips still on the up side. conoco is worried about the oil prices. everybody is giving up on that. here's the issue. they have $2.9 billion in cash flow. they're spending $2.4, $3.3 billion. they're spending more than their cash flow but they can boar low. everybody is worried about this because they have the biggest dividend on the street. almost 6% dividend yield for them. people are wondering if they're going to cut the dividend. that's why the ceo came out the other day and said the dividend

is safe. this is a famous line. it's been passed around a lot in the last two or three days. they're not going to cut that dividend. it's going to stay at that 6% level here. let's talk about beezer another good number from another good home builder. i think they're concerned because the closes were not as big as expected. great numbers and the highest number for price for homes that they've ever had before. great numbers from the home builders builders overall. >> let's go check in with rick. good morning, rick. >> reporter: good morning, carl. best place to start might be a yield curve spread. one of the popular ones people monitor outside of fives to 30s is the ten-year minus two-year. as you see, we're at the flattest level since may 27th, but is it flat because of fed issues or is it flat because the long end doesn't like global growth issues? you'll have to decide. two-day of tens gives you an

interesting view. we settled under change yesterday. the only maturity left is the 30-year bond. we are hovering at the lowest levels since the 29th of may. let's keep the end of may so we can see how things line up pattern wise. look at bunds. they're hovering at the lowest yield since the first of june. 30-year bonds, the longest maturity. i've referenced it many times. it's at the lowest yield since the first of may. keep in mind it's well above the settlement. if we look at the dollar index and foreign exchange. the dollar index at the up side. not at the highest levels. let's go through some individual parts. that's the euro versus the dollar. a mirror image. the next chart drives home the point of the euro not finding much of a friend anywhere in terms of other currencies. that's the euro versus the pound. the uk is another economy that

is contemplating normalization of rates and you can see how it is doing much better against the euro. back to you. >> thank you, rick. when we come back tech analyst of ubs, we'll hear what he has to say about the apple correction. dow bag barbelled by apple on the downside and chevron on the up side. that's a switch. back in a minute. when a moment spontaneously turns romantic why pause to take a pill? and why stop what you're doing to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently,

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big jobs number for the week. that means another opportunity to nail the number. tweet us your predictions. . >> the lucky winner wins a tote bag. the first one to guess correctly wins. i think the estimate is around 2.25.

>> i have one from mad money. i use it constantly. i took it to the beach this weekend. >> because you have a lot of homework. >> yes. this is one you'd better you know, you get it. get the number right. because this is just extraordinary. >> don't you usually right b booya? >> don't say anything. it always ends in tears. >> i could do that gesture but that would be another network. >> you'll have until one minute before the jobs release on friday. last week it was all about the eci number. implications for the fed. will this have implications on the hawkish side? we'll get to stop trading with jim. dow is up about 13 points. don't go away. a powerful new dell 2-in-1 laptop

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time for cramer and stop trading. >> can idti turn around this incredible decline in the semi conductors because of apple? idti numbers last night, they were a guest last night. wireless power charging.

that is the latest thing. wireless power charging. and they dominate it. blowout quarter. nothing to do with apple, and it's getting things going. i don't know if it can pushturn semis around but it's the hope. >> it was such a good quarter. they're linked to china. apple, shanghai, i max. bmw, aweudi. everything other than star bucks. >> mad money tonight, jim? >> we have a company brunswick which is fantastic and doing a new wellness initiative. they make sporting goods equipment. the flip side is how bad halyard is. it's been a one way ticket to the danger zone, and we have to

find out what is going on. this has been a horrendous stock. and they've missed two quarters in a row and it's embarrassing. >> we'll see you tonight. mad money, 6:00 p.m. eastern time. when we come back milanovic on the correction. apple up 13. don't go away.

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good tuesday morning. welcome back to "squawk on the street." i'm carl quintanilla with simon hobbs and david faber at the new york stock exchange. dow is up about 7 points. we're keeping our eye on a lot of earnings. oil managing a bit of a bounceback. back above $46. >> let's get to rick for factory orders in chicago. rick? >> reporter: yes. thank you, simon. it's the june read. factory orders were june were up 1.8. nailed expectations right down to the last decimal point. last month revised from one originally reported. may, it is now down 1.2. the new thing is transportation

that becomes the new core. that's up.5. up .5 is the best read on the core that we've had in a while. it's the best read back to february of '14. the headline number as long as it was at 1.8 isn't the best read. march holding at up 2.2. take a look at the ten-year note 2.17. back to you. so oil prices certainly have managed to bounce back after yesterday's steep decline. but the sheer scale of the washout across commodities is astounding. it's the ten-year show starts the index falling below the level it reached in early 2009. the cre index is a basket of stocks. let's see what it means.

good morning. >> good morning. >> this is a really interesting line that comes tr one of the routers columnists who says that commodities investors have bought into a market that isn't backed by a central bank. that's an interesting way of looking at it when you see so many other asset markets climbing around the world. >> he had a valid point. what the central banks have done has affected risk markets indirectly including the equity market. the problem with commodities is there have been some dramatic changes in both the supply and the demand configuration over the last several years. that's most obvious on the energy side but also with a slow down in activity in china, the demand for commodities from the world east largest producer has also deteriorated substantially.

>> people sitting at home would say this is great for us. it's got to be good for this economy. is that true? >> it creates a risk for the fed. they're trying to at least get inflation to stabilize, and we import about 200 billion in kmoitds kmoitd commodities and goods. if prices are falling, it makes it harder for the fed to obtain their inflation target. there's no hope they're going to do it soon. >> are you suggest nothing interest rate rises in september? >> i don't think september. i'm holding onto december but i think it's hard for september. >> do you agree, david? >> i would agree with a lot of his comments. i think he makes a valid point about the fed. it's going to make it more and more difficult to reach the inflation target and have a reason for hiking rates. i am in the camp we will see a

move before the end of the year but i think just one hike before the end of 2015 and that's what they're telegraphing. we view a 2015 hike still being in the cards. >> does that mean the equity market can rise? >> i think the equity market should rise. i think what the equity market is looking for is a little bit of certainty with respect to the federal reserve and a little more clarity on the future trajectory of u.s. corporate profits. our view is u.s. earnings will come back into positive territory in the third quarter. once we say that and lead time from the fed in terms of the rate hike i think equity markets can push higher. >> there are a lot of people who are nervous that the central banks and the feds and others are overextended f. if you look at commodities depressed like this does this jump back that we have an inflation problem or can you stay low for long?

>> well i think that eventually we will get a springback but there are no signs it's going to happen any time soon. but i think the commodity markets are the key. when you dissect u.s. inflation, we have service inflation up around 2%. goods based commodity prices are down 3%. that's the key going forward. >> what do you think the equity market will do? >> we're cautiously optimistic. some of the tail winds dissipating somewhat and the dollar stabilizing, but at the same time there's a lot of buybacks. and the u.s. economy is the best in the world. >> what's interesting is that the leadership within the equity market clearly has gotten narrower. there are many stocks that are even in the dow, are in correction territory. what are you telling people about the second half of the year or the next five months and what will work best. >> we think investors should maintain their chance for risk. a couple of companies are

driving the return. we think that given what the historical record has shown us six months after a fed hike equity markets tend to be higher than what they were at the point of the fed hike. we're encouraging clients to maintain. >> for the first six months the quite market is lower? >> it doesn't necessarily need to be lower but we have seen more volatility coming out of a fed price. i think mispricing between the future market i'm not sure it's a leg lower. >> one more quick question. why do you think earnings will rebound in the second half? >> companies have had time to adjust to lower oil prices and a stronger dollar. i think what thought companies off guard was simply the time span which the moves in oil and the dollar occurred over companies who have had a chance to retool and adjust their operations to work in this current environment. and so it is our view that they

will have reached a point where earnings can turn mildly positive. >> thank you both for your input. for more on oil's big moves let's go to jackie. this is a recovery today. >> that's right. and i heard what you're saying about the long term picture but choppiness in and the. a 5% sell off in crude. $46.08 is where we're standing. what we think is driving this move is the move in heating oil and gasoline as well. what's interesting to note is that's been choppy trade. over the past month down double digits in both. traders expect the demand to taper off as we get to the end of the summer driving season. it is good news for those heading to the pump to fill up. average gas prices 2 .64. we could see it go down.

maybe $2 gasoline by the end of the year. i want to mention that you need to watch the api numbers after the market closes tonight and the doe. >> we'll pay attention later on this morning. thank you so much. when we come back coach trading higher today but the stock still down 15% so far this year. what's ahead for the luxury retail space on a week where we're going to get kate and kors. "squawk on the street" will be right back. ay. dr. scholl's massaging gel insoles have a unique gel wave design for outrageous comfort that helps you feel more energized. dr. scholl's. feel the energy!

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retail taking center stage. earnings from michael kors this week. coach kicked things off thing beating estimates. here's what the ceo said. our brand transformation gained momentum across three key brand pillars. the question is what else can we expect from retail earnings later in the week. joining us more is a senior analyst. great to have you. welcome. >> great to be here. >> is the guide as optimistic as the market seems to think it is? >> no. actually, we don't think so. we are very encouraged by the sequential improvement that coach has been seeing in the store comp. they comp negative 10 in the fourth quarter. and this is despite pulling back

in promotional activity. we've been seeing higher promotional activity of competitors, michael kors as well as kate spade. we think the remodelled store commentary is encouraging as well. 15% of the store base is remogdsed and seeing positive comps. >> do we see it by year end on coach? >> that's what the company reaif i were -- >> by the end of fiscal 16 as much as 40% of the store base will be in the remodelled format. so that's encouraging as positive comps there continue and we think despite the category chappyoppiness, the category is still growing mid single digits or better. that is pretty positive. >> you said coach is the most interesting risk return. you think kate an inline quarter would probably be okay? >> we think so. a multiple in kate has

contracted pretty meaningfully. there's been a lot of fear in that stock. kate spade has a tiny market share of the category that is still growing. we think with the expectations out here in line quarter would be sufficient. >> the kors share price has been a nightmare. what view are you taking there? with michael kors, we continue to be cautious on that brand. we think the brand has been ubiquitous. the overdistribution fear is playing out. you have an overearning business operating marnlens were kors were 40% a couple of years ago. they're 26% currently but still coming down from these pretty high levels. >> what is astounding in the market caps of some of these companies is how they go up and down. you point out that kors and coach are worth half of what they were a couple of years ago. the question is whether you see

m&a within the sector or weather an executive or just i need to get my lines right and i the create a huge amount of value. is covers a takeover target? >> we don't think so just given the record high operating margins for this business still. and the profile of michael kors the company is still very much in investment mode. even despite the fact that michael kors as a stellar balance sheet, we think even down here private equity activity is unlikely. we don't see strategic players. >> it sounds like you like athletic lee sure. you like lulu. can you explain what is wrong with handbags in general? is it coming at the expense of something else? why is it so hard to light a fire under the space? >> i think for the past few years we have not seen the emergence of an it bag. there used to be a couple of players really starting out with

coach being the leader in this accessible luxury category. since then michael kors coming into the space very aggressively, and arguably overdistributing their brand. we have not see a lot of newness at the high end. >> so it's a burken or nothing else? >> it seems like some of the high end brands are still doing well, listening to the luxury players. we think the private label brands still seem to have some momentum. when there's not a lot of newness, the customer goes after newer brands. >> is there something structural going on here? is it purely about fashion and if they want to go out and buy this particular season? >> the consumer we believe, based on the macro indicators is feeling pretty good about their job security. we are seeing savings rate go up. so it just seems like the

consumer is not spechbdingnding sonon some of these categories. >> you don't cover under armor or nike but how would you put them up against lulu? >> we believe the athletic space is still very strong. certainly looking at under armor and nike. lululemon still has a tiny brand in at lee sure. it's growing at a high single digit rate for the next couple of years. the brand equity of this business is real. they had some hiccups a couple of years ago. since then the business has been finding its footing. so between the mens opportunity between some of the category opportunity at lululemon, we continue to be really encouraged. >> we'll see what the rest of the week looks like. it's a busy one for you. thank you for joining us. >> ahead on the show the south carolina governor wants her

state to be a major manufacturing hub. she talked to phil lebeau about bringing companies into her state. we'll go there live after this break. ♪ i built my business with passion. but i keep it growing by making every dollar count.

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today. let's see where the real action is. >> good morning, carl. we're watching a smaller cap stock. lum nicks up. biotech doing well across the board. the nasdaq up about 1% today. strength there. luminix up. netflix, keeping an eye on that stock. up by about 4 % in the early trade. again, netflix shares showing a bit of strength here in the early part of the session. >> thank you very much. president obama is hosting the

first ever white house demo day. entrepreneurs will showcase their successful projects. kate rogers is live at the white house. she has that story for us. >> reporter: good morning. as you said this is the first ever white house demo day. entrepreneurs are here to demo their success stories companies are here. there's one from a military background and now they're taking military surplus items and repurposes them to handbags. they're committing to giving back to the veteran community. >> since 2013 when we launched on kick starter, we've repurposed 30,000 pounds of military military surplus. and we've been donating back. >> reporter: some of the themes are diversity and inclusiveness. that's why you'll see

entrepreneurs from all over the country participating. this morning the white house announced a slew of new initiatives including commitments from big venture capital firms to increase their commitments to investing and hiring more women and underserved minorities and also big name deck companies like facebook google amazon and box are doing the same thing. they're increasing their commitment to women and minorities and they're going to be more transparent about their hiring processes. and the president is expected to stop by later this afternoon. >> busy day. kate rogers at the white house. thank you. south carolina is becoming a major new manufacturing hub of the south. it's becoming a top choice for car and plane manufacturers and suppliers. phil lebeau is live with more. good morning, phil. >> reporter: things have changed here.

when boeing first opened here they were struggling to get one out the door. now they're building three per month. when you look at aviation and how much it's grown in south carolina it is the number two industry in the state now in terms of exports and jobs only behind the auto industry stri. more than 54,000 jobs. boeing itself is in the midst of a $1 billion expansion over the course of the next five or six years they're going to be adding up to 2,000 jobs. the auto side of the business go up to the northern part of the state and take a look at the bmw plant. they build what's exported around the world. the governor is not only happy with the bmw plant but she also likes to point out that south carolina will be the future home for volvo's first plant in north america and here's the key to winning that plant compared to

having volvo go to mexico. she says it's all about the quality of jobs. >> when a company is making a decision, you're always competing with mexico. and if we want to have things made in america again, we have to understand that. it is about money. it is about profit margins. it is about that cash flow they have to have in order to compete. and america has to step up. >> part of stepping up here in south carolina is deepening the port of charleston. they are dredging it so it'll improve the flow of large container ships here in the state. it's a pretty impressive facility. back here live at the boeing plant, that port along with the plant here with boeing you have the bmw plant, michelin has ten facilities in this state. manufacturing has been become a major source of growth in this state in terms of employment. we're going to be here all day long. you do not want to miss with nikki haley has to say. we'll talk about it on power

lunch when it comes to unions and why they haven't gotten a stake hold in this state. >> it's been one of the great u.s. economic stories and largely untold. we'll come back to you. when we come back apple shares are hurting again today. not far from session lows. we're almost to 115. in correction territory. where does it go from here? we'll talk about that after a quick break.

good morning, everyone. here is your news update at this hour. secretary of state john kerri meeting with sing apore's prime minister. kerri's visit comes as the city state prepares to celebrate 50 years of independence. a father and his daughter are dead and at least 22 injured when a powerful thunderstorm collapsed a sirk us tent last night. it was at the lan castcaster fairgrounds and authorities are inves gaiting. a pfeiffer has burned through california. nearly 3,000 firefighters are battling that blaze. and toy morer t-- manufacturer ty is donating all profits from a lion toy to the wildlife

conservation unit to the university of oxford. that is the cnbc news update this hour. back to "squawk on the street." all right. welcome back. netflix having another of particularly good days. the stock is already up 141% year to date. now sporting a market value that exceeds $50 billion. a couple of upgrades or positive notes. no other potential news to speak of. the continued momentum in the company itself and the stock price, of course, at this point. we like to do these little comparisons sometimes. well more than 2 viacom. they've had a rough go as the world continues to change at least somewhat. here's the bundle falling apart

and the ability to stream and with netflix and the other new and emerging streaming services out in putting pressure on some of the older content providers, if you will. worth a note. those netflix shares. >> maybe it's coming out of apple. >> would becould be. apple down 3%. >> down 10 of 11. down five straight and erasing almost 20 points off the dow by itself. >> and three days until the big jobs report. that means that it's time to -- that means it's another opportunity for you to nail the number. tweet us your predictions for the july payrolls. the handle is at squawk street. the lucky winner will win a delivering alpha tote bag autographed by the whole gang. it's a great event and a great bag as well.

>> as one of our viewers wrote the alpha is not delivered with the bag. it's empty of alpha. >> they actually had selfie sticks in them as well. this one is gone. >> i didn't get a bag. i spent the entire day doing lots of things. i didn't get a bag. i wish i had. >> maybe you can tweet your suggestions. >> do you have a prediction for us? you want to give us a number here? >> for payrolls? >> 230. i actually don't know the consensus. >> 225. >> you have until one minute before the jobs report to tweet us your predictions. good luck. nail the number on cnbc. coming up we're getting a look at who the front runners are in the race and who's in and who's out of the debate itself. "squawk on the street" will be right back.

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contrarian trade by shares of the coal miners. more "squawk on the street" coming up next.

apple in correction the territory falling blowelow the moving day average. our next guest is optimistic. steve milanovic is an analyst. and he joins us now. why in your opinion is this stock weak lately? . >> >> you had a tough quarter. expectations got ahead in terms of iphone shipments. hardware has been down. you also have apple music which hasn't been a big winner. apple watch. apple tv has been delayed a little bit here. so i think people are looking for a catalyst and top among those are iphone sales in the next year. >> all right. you listed a lot of negatives just there, at least somewhat

negatives and it ended with a positive. what are they going to be and why is it a catalyst. >> we think they'll be up. we suggest about 245 million phones that. that's up 6%. we now have more confidence that there will be iphone growth in fiscal '16 and we install base and new users. going to provide growth. apple is pointing out that only 27% of the base is upgraded. even though the success doesn't have a lot of new features i think investors make a mistake and think there's not sales. well, two years ago, there's a lot of 5 s buyers coming off of contracts. we actually think there will be good upgrade demand and new customers, we think as much of a third of shipments, particularly in china. we think half of apple sales in china are going to first-time buyers. it's the key to how they do next

year. >> despite the fact that the stock market has had hits and people are concerned that consumers may pull back as a result. >> despite. it's something to watch. they don't believe there's going to be a significant economic impact. the stock is still up year over year. it's worth watching but we believe an iphone is almost not a discretionary purchase. we find that apple's retention rate in china is high. people are buying their second or third phone and view apple as an aspirational brand. for now we think it's going to continue to be a positive for apple in china. >> did you see the silicon business journal reporting yesterday apple bought a 43 acre patch of real estate in silicon valley. i think it's the third piece of real estate they've bought. people are saying why would they buy so much real estate. are they going to develop a car?

>> i'm not sure why they bought it. could they develop a car? i've suggested a 40% chance they could. if you're ever going to do a car, you have two disruptions in terms of autonomous driving. apple doesn't have a lot of mechanical engineering skills. i'm not convinced they're going to build a car. i think they're looking at it. >> it's almost three years since apple stock as many people will remember with brutality almost halved in value. is the investor base different this time around. is the hedge funds more securely tied in. could the same thing happen? >> it's not likely to be as bad this time. you're not going to have a gross margin decline of six points in our view but there are more value buyers in the stock than before. that provides a little bit of support. but there are different

dynamics. the company is going to be decelerating revenue growth but still some iphone growth and probably can beat expectations. typically in tech you want both of those things. you want accelerating growth and beating expectations. that's what apple has been. we're not convinced that's what they're going to be. there will be some slow down in growth. it's going to be difficult. i have pretty high confidence with downside support. stock is trading at about 12 times next year's earnings. unless the fundaments are really different from what we think, there's not much downside. we're waiting for a catalyst on the up side. we think some iphone growth can be part of the catalyst. >> speaking of downside support stooefr is there a line at which they put the pedal to the metal on the bayuyback? >> they do accelerate when the stock is weaker as we saw two years ago. i don't know the point.

they're somewhat limited. $180 billion cash overseas, they can't use it so they have to take out debt to make purchases. it would be hard for them not to want to accelerate the repurchase. >> finally, 40 % chance of them doing a car? i know as an nlist you always have to put a number out but how do you get to 40%? >> well at this point i'm just guessing that it's less than 50%. they clearly have an interest in looking at the auto motive sector sector, but i can't get there in terms of believing they're going to make cars. it's a difficult industry. even apple. it's hard to see how thens are that attractive. the iphone is such a winner what do you do for an encore? it has to be a large market and you could argue the car is the ultimate mobile device. i think there's a reasonable probability but i wouldn't put

it above 50% yet. >> they could have bought tesla for the money in the buybacks. steve, thank you for your time. >> let's go over to chicago and rick for the santelli exchange. >> reporter: thanks, simon. i'd like to welcome david this morning. thanks for taking the time. >> good to be here. >> reporter: listen. when i look up i see 2.18 and tens virtually unchanged on the year. i look at ten minus two, the spread. it's at the flattest since about the 27th of may. my first question is an easy one. we're all preoccupied with the date of normalization by the fed with good reason but is the recent rally in the long end flattening the curve? is it about the fed or global growth or something i'm missing? >> i think it'sless and less about the fed as the days are going on. you're seeing energy prices come down. the crb is coming down. the dollar ib dex is slowing.

and we can add emerging markets to the litany of things going on in there, and maybe we are going to get a fed hike into an environment where we've had year over year pce on average going a quarter of a% in pce prices. i think the long end is telling you that inflation is leerilyclearly at bay and may come off a little bit. and if the fed decides to hike so much better for the curve. i think this is a flattening environment. >> i got you. >> reporter: when it comes to the dollar i find it fascinating. if your answer i read there's a lot more going on with the long end flattening the curve than just the fed but the dollar index and the strength in the dollar obviously is an important function and that is highly correlated with a purported tightening cycle that may be coming up. so it's hard to extract that. your thoughts? >> i think when i'm looking at the dollar what i'm thinking is that's generating flows into our

market or our markets but specifically the bond market. you can see it in the way that we trade. we get an overnight bid and meander around. and then they have the dollar story and they have the interest rate differential story going on but to the degree that the dollar is relevant here i think it's going to translate to lower import prices. is it a big deal? the fed has mentioned it but i think we're going through a series of things. you're looking at a lot of things that suggest dampening inflation pressures. i think that's the component that i would weigh into in terms of saying that we have a good bias for more flattening. i thought it was going to be a bear flattening. >> when i look at the vix, eneverybody loves to talk about it. i see the high for this year around 22. see the high for last year around 26. i see the biggest recent spike

in 2011 and the credit crisis high over 80. it seems to me like even with the vix up into the low 20s, volatility seems to correlate with managed markets and fed and china. final thought, are we going to see volatility before we see the fed move? >> well the first question is when is the fed going to move? there was september, and now maybe it goes to december, and given the data it could be next year. i do not think we're going to see a big increase in volatility volatility. the fed is managing our expectations about policy and we can look at the data. unfortunately, i do not think it's going to be a volatile environment. >> thank you, david, for your honesty there. pretty much everybody who's in the trading game wants more volatility. >> absolutely. >> now back to simon hobbs and thanks again, david. >> and thank you, rick. up next a change of pace. it's the luxury version of

airbnb except that one fine stay sees the big hotel chains as partners, not adversaryiesingadversaries. is this a sign of more collaboration to come in the sharing economy? a ceo of one of the companies will join us live right after this braeng. ♪ every auto insurance policy has a number. but not every insurance companyeak. understands the life behind it. those who have served our nation. have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.

successfully executing a cross border hostile deal that is composed of all stock is traditionally very very hard to do. but we're going to get a chance do see whether shire can succeed with the news this morning that it is offering to buy ak saulbaxalta. this morning the press release details exactly what shire wanted to pay and releases a dear ludwig letter. they talked about a july 10th meeting and that fact that we wanted to try to get something together year. you'd own part of the company and we think we could have as much as 20 billion in sales together. post close given it is an all

stock offer, they will be buying back a lot of stock so side share this morning on a call when it went over the reasons behind the deal. as much as $10 billion being bought back. the value of the deal 16.8 times at least some of the current estimates of ebita this year and about . only spun off from the beginning of july from baxter. baxter continues to own 19.5% of it. by the way, it is the leader in hemophilia where it's number one worldwide. has a 6% growth profile there and also in the immune globulin space. growing 6 to %8%. it has a lot of takeover defense. there's a staggered board of directors. you cannot act, call a special meeting with written consent.

you can't call a special meeting at all in fact hence, a lot of things here that don't give shire a path other than simply to say we're presenting value to your shareholders. please come and sit down down with us. some speculate that shire hearse footsteps, it was once going to be acquired by abvi. but fell apart by what is or not allowed by a tax inversion. i would say bloomberg wrapped up something i said earlier. what i want to make clear is while there may be rumors. there's i've heard nothing to indicate talks between shire and another company at this point. >> home sharing site fun fine stay ort airbnb for the rich bagging one of the big four international hotel brands as a partner. not only is hyatt directly investing in the tech start-up. if you're waiting for one of their vacation rates in london you'll be able to freshen up and drop your bags at hyatt's

five-star churchill hotel. greg marsh is the ceo of one fine stay. and joins us from london where they're based, greg i think we need to understand first of all, why you're different from say airbnb, it's more a market that the average rental $600 a night and you're providing what is it the cleaning and the laundry? just explain why you're different from airbnb if you would. >> crucially we work with homeowners. people who have properties of value, anything from a million to multiple millions of dollars. people who own these kinds of homes don't have the time to inclination to manage them for vacation rentals when they travel. this allows us to make the homes available for guests for short stays with everything from five-star linens toiletries to a personalized meet-and-greet experience and a concierge on hand 24/7 if anyone has

questions or concerns during their stay. >> i guess the big concern is that hyatt has take thn direct stake in you. they're not going to distribute hyatt hotel rooms through your site correct? >> we've been talking to hyatt about a number of different partnership opportunities and you alluded to one a few moments ago, at the moment if you want to stay with us you can book through a number of third-party channels or come to our website, one fine stay.com directly. crucially what underpins this decision is a shared philosophy. a view that the sort of service we offer, the best of both worlds the hotel style of amenities and assurance in the setting of a high-quality authentic private home gives guests the best of both worlds. it is a complement to what traditional luxury and boutique hotels can offer folks when they're staying in major cities like london new york and paris. >> so people can, people can drop off their bags freshen up in one of the rooms.

i guess the we should explain to people that hyatt is different from the other four major hotel brands. in that it's basically controlled by the billionaire pritzker family. you could argue that they don't have to operate within the same quarterly responsibilities or perhaps some mindful as some of the hotel owners as the likes of marriott or hilton. can you confirm that marriott thought about had doing this sort of deal but the hotel owners rebelled say this is crazy, why get into bed with the arch rivals, people like yourself and airbnb. >> i can't speak on behalf of marriott. i can say that our experience has been that there are a handful of the hotel majors. who are really leaning into this new trend in accommodation. and the sort of experience that we're offering guests in major world cities when they travel is one that we believe an idea whose time has come and hotel

groups recognize it and are rolling with it and they see the kind of experience we're delivering as complimentary to rather than competitive. >> in many senses it's more than that if you look at asset hotel world at the moment the likes of marriott and hyatt are servicing other people's property and you're an extension into that potentially simply doing it within the residential space. it's like for like rather than competitor i guess is arguably how you could see it. >> you know if you're coming to town let's say or traveling to london if the u.s. with your family for a week or two weeks, the idea of staying in two or three adjoining hotel rooms is not super attractive. there are segments of the travel population families is one. longer stay business travelers is a second whose needs are not well met by traditional hospitality vendors. we think that's where a service like ours has a distinctive opportunity to meet guests' needs. >> we'll leave the questions of

city regulation municipal regulation hanging in the air. good to meet you, greg marsh joining us the ceo of one fine stay live from london. the results of the latest nbc news/"wall street journal" poll who's in the lead of the crowded pack of gop presidential hopefuls is out. john harwood is in d.c. with details. >> a variety of polls have made clear for some time that donald trump is leading the race. let me tell but the blanket of pessimism hanging over this race. you look first at americans, their general mood about the state of the country. 28% say we're headed in the right direction. 65% more than two to one say we're off on the wrong track in part because of pessimism and poor feeling about the economy. if you look at president obama, that's dragged him down he's

under water. which he hasn't been forror a few months 45% approve. 50% disapprove. look at the three potential most mentioned at the moment candidates to succeed president obama. hillary clinton, more than ten points in the negative on her favorability rating. jeb bush 14 points negative and donald trump, the one who is leading the republican race, 26 favorable. 56 unfavorable and that tells you how people are feeling about washington, about politician, even those not from washington and that's the backdrop for this debate happens on thursday night, simon. thanks so much. let's send it to jon fortt, with a look at what's coming up on "squawk alley." >> apple is down are there real problems with the company? and facebook video facing some criticism about how they count views, is it legitimate?

and finally, alibaba, news on the new president, new leadership, perhaps international expansion. can a business have a mind? 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?

good morning, it is 8:00 a.m. in cupertino, california 11:00 a.m. on wall street and "squawk alley" is live. ♪ ♪ ♪ ♪ smrks ♪ ♪ good tuesday morning, welcome to "squawk alley," joining us dan rosensweig joins us. kayla will join us on the phone later on. our first story this morning, apple in the red again. down nearly 3%. after yesterday's 2% fall that's enough to officially push the stock into correction territory. down to the lowest level since