points on the nervousness on china and what it means for the global markets, et cetera. >> make sure you stay with "squawk on the street" for continued coverage. tyler and scott thank you for being here. >> thanks. >> that does it for us. right now it's time for "squawk on the street." >> good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. the market is rattled as china announces the biggest devaluation. benchmark yields around 2.17 as productivity finally gets a positive number and oil back below 44 as opec at a three-year high. google making itself one unit under a new parent called

alphabet. we'll explain. >> a surprised evaluation of china's wand sending it to new multiyear lows against the dollar. >> and shake shack, the company beat estimates and boosted guidance. first google creating a new holding company called alphabet which will become the parent of google. the google unit will include youtube, android and ad sense while nest, and google ventures will be the other ventures within alphabet. alphabet will replace google as a publicly traded entity. ticker symbols will remain goog l&g oog. "the washington post" is calling this almost unprecedented, a general electric for the digital age. >> people at home are going to be confused.

it does matter. the price to earnings multiple has been controlled by a mishmash of company. if you could see the profitability broken out, you might want to pay up for google. that's what people are doing. i've heard a lot of analogies to these holding companies. i'd like to analogize to am don. when they broke out web services you said holy cow. this company is extremely profitable. i never knew this. i think google which started the year with a 16 priced earnings multiple is going to get the old multiple. they have this fantastic business, and then they have these other businesses that may one day become business and it's a venture capital business. >> and they can decide how to allocate money to those businesses. for the first time, we're going to know what the margins look like, not just at the core business which includes, it's

not just search. it's youtube and apps, maps and things of that nature. >> lots of stuff. >> just this morning, somebody asked amidst 59 billion in revenue, you're talking about ebita marges. that's for search. it's a 70% ebita market. and then what's the multiple? >> 28. 28 instead of 21. >> that's a lot. amazon's ebita multiple went up 13 % when they announced aws. i'm looking at some of the stuff this morning and having talked to a couple of people, it seems to be the keys. they also care about the stock price. >> i was going to ask you about por rat. she promised more metrics. there was talks about would they start to break out youtube. >> this is wall street talking. the letter. >> they said we also like that alphabet means it's return a

benchmark which we strive for. >> they're delivering alpha. >> we own that. they have to pay that if they're going to use that. >> i think they learned about it from us. >> look, if you're a brilliant student coming out of computer science degree at stanford, i hate to tell you guys it's where the kid who is last place in computer science, that kid is looking at this google organization saying i'm going to work for this division, this division and i won't hurt the company's profitable. there has been a tremendous difficulty in keeping good people and recruit kruting good people. good people being people -- people at home, get your kids to study computer science. if you studied finance, you used to be able to do well. it's computer science. and this will help google attract people. >> is there any discussion that they get spun out or do they want this in one family?

>> that would be up to mr. malone. >> they control the company. it's certainly possible if you shine a light into the value. let's say one of these moon shots hits. will there be pressure? that being said, this is not a company that -- apparently they care about their stock price but they're not vulnerable to activists given they completely control the company. i don't know much about the new guy who is going to be running google. >> we're all worried about him today. there's a lot of discussion about the number of indian born ceos who now run microsoft, adobe, now fogoogle. >> this guy, the twitter feed lit up for the people who are thrilled about this man. >> 23 years old, i believe. >> young man. >> congratulations from nadella, tim cook wrote in. others wrote in congratulationings. >> i just find that stuff

exciting. just a pure fabulous achievement story. dex kom enters into an agreement with life sciences today. they have a sensor which is for remote for if your kid, so sad has juvenile diabetes, you can measure whether that kid at home, blue tooth, is sick. this is the kind of thing that google the doing which is very, very forward looking. who the heck cares if they have youtube? is answer is now i do. because their life sizes unit could be worth what a biotech is worth. >> is levinson running that, and then they have don doktrof running something? they're hiring all these top -- >> yeah. >> and they have youtube which, obviously, porat broke out and told you how profitable it could be. we sit here and talk about the

destruction of the viacoms. this is asengs of ts of the you. this is like the cost structure and the margins versus csi. >> that costs a lot. a lot more than your youtube. >> even queens would it be a lot? >> yes. they still have a lot of things in queens. that costs a lot of money. >> versus youtube? >> almost uniformly bullish commentary this morning. >> yes. and people say what a bunch of shils but a lot of people didn't like google because they thought it was hard to understand. they thought it was like alphabet soup. >> in the letter they say over a long period of time, people get comfortable. in the technology industry where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to make progress.

the ft today says they're trying to avoid microsoft's fate. >> that's interesting, that steve balmer speech he gave in england when he said he needed to destroy his own kind of andy grove. a great business book talks about destroying your own. google, i think is basically saying listen, we are going to reinvent and reinvent and not only that but we'll put in a division that isn't going to kill the profitability of progr programmatic. there was a quote yesterday. all that we do is try to figure out how to get people to click on things. that's like how to get people to read. there's nothing wrong with that. >> there isn't. >> we've been playing call of duty. >> there's a group of companies, google, amazon, staying uncomfortable, constantly looking to challenge itself from within and without.

and going after all its competitors. facebook, these are interesting companies. >> these are places, i keep coming back to young people and getting a job and how top people at great schools cannot get a job at a google and a facebook but if you do get a job, they have to keep you, and they have to keep you in a way that sales force doesn't steal you and facebook doesn't steal you. i bet you give you a tracking stock so if you hit the moon shot hits. >> that's great. >> i think it's brilliant. i thought amazon, when amazon broke out the web services i said this thing is going up hundreds. i thought they were losing fortunes. >> it helps fund a lot of the business. >> omg, partner. >> meantime stocks are poised to give up some of the gains from yesterday. china with the surprised valuation in an effort to boost exports.

sending lebeau mentioned the auto sales number for july down 2.5. that's three out of four months they're lower. they're seeing in greater detail what we suspect is going on. >> they found out they weren't going to be part of the reserve currency. incredibly bad export numbers over the weekend. i believe they're a paper tiger. >> i said it yesterday and i asked the question. i said sure enough, last night they decided to go in a different direction. >> they could be watching the show. >> i don't think so. >> i think you're banned over there. >> are we? >> i don't know. >> i hope not. >> you can't watch cnbc in china, right? >> i think you can. >> it's on -- >> i mean, uninterrupted by random going to black, if you know what i mean? >> what if we say something bad about the party?

are we still on? >> we're on. i remember watching us over there. >> i apologize. i think it's great they're open minded enough to run us. >> it was an about face. not sure about the fallout, various positions out there what that we haven't heard about yet, people getting hurt, but overall, i guess we'll put pressure on our own federal r h reserve? >> someone call lockhart. that guy is a broken record. i was so glad stanley fisher. >> making it stronger? >> the dollar is going to go through the moon now. >> didn't that used to be a good thing? >> king dollar. there when you need him, yeah. >> this reserve currency thing, sara eisen talked about it. this thing that happened over the weekend where the imf, i just think that -- they can do whatever they want right now.

remember, the chinese stock market was up several times last night. they kept moving it up and down. the chinese communists are just using the $180 billion worth of treasuries they sold and they're putting them to work in a lot of strange ways. they want that market higher and they were willing to sacrifice anything, including u.s. imports which aren't doing well, and you'll see a lot of our companies that do business over there, stocks will be down today. >> paper tieger? >> they only build aircrafts over there. >> it's growing a lot faster than our own economy. >> there was a debate this morning ant yum suddenly disadvantaged after today's move. if the economy improves, do they come out ahead on a net basis? >> that's a great question. we're trying to figure out how

luxury is yum. but bmw, that's always been a worry. and i think that this is -- this is a great way to boost their economy at the expense of everybody, particularly the united states, which just has this currency that won't quit. the spuper freakin' strong dollr is going to hurt us. we cut numbers last week. that's all we do is cut numbers. >> we'll get to more on that. gap, for instance, talking about that as well. a lot more on today's movers, including shake shack which is coming off of a pretty upbeat quarter. take a look at the market. the s&p for the month is up presidentup

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nine cents. revenue also above consensus. sales at established restaurants up 13% and raising the guidance for the full share. shares are up 40 %. this was the quarter that they wished they'd had last time. >> absolutely. and there's big increases in margins. they're talking about how much

people love the chicken sandwich. only available in brooklyn. three stores in brooklyn have it. they just have -- basically everyone seems to want to partner with them. they talk about the roadside shack. many seems like one you come with liptor. classic cheese burger with cheese and bacon. you can come up with a valuation versus mcdonald's. mcdonald's is worth $6 trillion if you extrapolate per the comp base. >> per franchise? >> yes. but if you do the existing rate rather it's 6.6 trillion. it's not so egregious. >> it's a growth stock. nobody is going to care until it stops. >> the shack myster was a hit.

this is a taste per share. >> and i can stop at one on the way back. >> i don't think. i mean, i think i gained 4,000 followe followers anxious to tell david, pick an exit. >> there are a couple. >> it was like a call where you just said i'm hungry. i had just had dinner when i did this call. i wanted crinkle fries. >> every time we talk about it, i think about the wrapping of the burger and taking it out. >> how about that eggs are important, and it doesn't matter. i thought this was an amazing call. they have one for new hide call. that's a train stop. 7500 likes on our post on brooklyn. this is one of the feel good stories that is so overvalued,

it's ridiculous. people eat the burger. >> your attitude is you want to buy it god speed? >> i just feel like people like the tesla, they want to buy it. people like the shack, the shack holders are going to be shack holders, and you can't talk them out of it. how wise is that, huh? >> that was genius. so often, so often. >> when we come back, we'll get cramer's mad dash and count down to the opening bell. take a look at the premarket as we look to give back a lot of what we gave yesterday. a lot more from "squawk on the street" straight ahead. s. copd includes chronic bronchitis and emphysema. spiriva is a once-daily inhaled copd maintenance treatment that helps open my airways for a full 24 hours. spiriva helps me breathe easier.

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>> time for a mad dash on this rainy tuesday here at least in the new york area. about 8 minutes before the opening bell. yesterday we did apple. >> let's reveal that. jeffreys come out and cut the trace targ price target. it goes to 135. perceived problems in china. the devaluation, people saying anybody who sells in china is going to get hurt. this is an easy one to make the case for. i like to hold apple, not trade it. like warren buffett said, you don't sell your house down 5%. >> you're still in favor of apple? >> yes. and every day there's, the watch is on, it's off. the watch is a holiday present and a back to school present to go if you have an iphone 6.

keep that in mind before you decide that the breitling is back. i love them and that's why they gave us two more. i say they. people get mad. >> a lot of people get mad about a lot of things. >> i fear everyone. i run scared. that's why i get up at 3:00. okay. nowhere weeken crui norwegian cruise lines. the stock was at $61.42. the cruise stocks were at a 52-week high last week. if this holds, you might have a better market than you think. they're huge users of bunker fuel. these are the big beneficiaries of any decline in fuel. >> the stocks had a very nice move over the last 10 months. >> it's been fabulous. my daughter went on one of these. >> really? >> i bought here the ticket.

i don't know. did she go? >> i'm reading about the lucitania right now. >> how is it? >> good. you'll enjoy it. highly recommend it. >> i love the guy's last one. i need to learn about world war 1 i. >> doing that right now. >> we haven't even gotten to the sale by symantec. we have another one. we're going to take another look at google. we have so much for you coming up on "squawk on the street." here at td ameritrade, they're always working.

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street" live from the financial capital of the world. the opening bell in about 2 1/2 minutes on a busy morning. jim was tweeted trade wartime. >> we were discussing the germany started this, i think but some people could say japan, the excellent commentator. some people say it's japan

started it. some people say germany. we are the focus of it. everybody wants our business, and we've become a pitiful helpless giant, not unlike nixon talked about us at some point. we just take it. >> what are we supposed to do? >> how about say to some of the trade partners that we'll not make it as easy to take away our business? >> what do we do? they put up more walls than us and the next thing you know hostility is going up? >> i don't care for the way the chinese trade for us. >> nobody does. >> the president -- the is coming to d.c. soon. meanwhile u.s. steel is down almost 6%. >> that's my worry. that's what i'm talking about. we should put duties on what they dump here. i'm talking about being a little bit smarter about the chinese. there's nothing we can do. the germans, they won.

they have europe, and they finally got the euro deal thing. greece, the euro can go higher but the germans are huge winners. the japanese are huge winners. >> the japanese have tried to be winners, taking an economy and trying to move it. buying every asset that's not nailed down and some that are. >> there's a lot of winners except for us. >> do you think the action in oil is about the commodity fear from china and demand or is this about opec continuing? >> opec, the russians supply china most of the oil. the oil import is 7 % for china. china is not as much of a factor as that the saudis are flooding our market. flooding it. they're going to crack this $42 $43 level and you'll see oil

gain. >> let's get ready for this. the opening bell here. get a look at the s&p at the bottom of your screen. which, by the way is just barely flat for august or was until just now. at the big board, heartland payment systems celebrating its 10th listing anniversary and over at the nasdaq -- you don't like the set up this morning? >> no. this is a bad setup. i have one silver laining. with the greece deal, the dollar is weaker versus the euro. those who were too positive yesterday wilted. >> the greece deal, you mean they're putting the finishing touches on the third bailout? >> the germans tried to slow it down. the rest of the countries came out and said, let's just get this thing off the table, please, and that really did matter, because i don't want to see the euro get weak again

versus our currency. we have enough things going on that are bad. that was positive. >> google perhaps one of the only names you're going to see in the green on the early going here. up almost 6%. more or less almost a uniformly positive reaction from the analyst communities, and you can see a plan to create what is a new holding company under alphabet. there will be more transparency into their financial wherewithal. and other places we'll have more tra transparency. each having their own ceo. some likening it to a berkshire hathaway. you have a new gentleman -- >> head of product. >> yes. running the product as ceo of google. talking about berkshire, he does

that big deal yesterday. it'll be interesting to see if google starts to use its cash in that way and bringing more in. >> i talked about this last night on mad money. it's almost like there's a buffett jinx. he calls in and says things are good. don't sell your house, and then there's a big hangover the next day. i wish buffett had bought something again so he would call in. call. buy something. but the elephant thing is already done. >> it is. although, i had a couple of calls yesterday with large holders in pcp, in precision cast parts. they wouldn't allow me to use their name, upset, feeling that the price that he's getting even though this has a fairly high multiple, far understates the value of this company if it was independent. hard to imagine you won't get a vote that goes their way, berkshire's way.

the board agreed to the cost. but it's interesting he brings in the companies and they're great managers. he lets them run and we don't know their comp. because the comp is not reported of the sub ssidiaries of berkshe anymore. you can bump up their comp and it's not front page news anymore. >> are any of your contacts saying that this is a reflection that pcp -- i always hate to use that because it's a bad term -- but it didn't have as bullish of a view on the aircraft psych cy? >> they didn't share a lot with us. that's a good question. the ceo is lauded near and far. >> great american manufacturer which then a lot of people said buy the industrials because that segment is undervalued and then the industrials sell a lot into china so now you got whipped up

side the head. >> khc last night did not break out. they didn't report it as a combined entity but top line was challenged. down 4.9 at kraft and 4.1 at heinz. >> i'm a believer in 3g. i am. i know that there's been an article highisaying heinz losin share. these guys know how to use money. i believe there's a lot of kraft and i think they're going to find it and seek it out. they have a lot of fire power. >> there are teams that do nothing but scour the money for how to cut costs. and we hear about zero-based budgeting from other companies but the way 3g does it is somewhat unique and it's a discipline. they have people who have done it over and over again, and as somebody said to me, it's not just about budgets.

it's also, you're going to stay in a motel six in that's where the ceo is staying. >> stays in a motel six? >> yeah. >> good for him. general mills is a good company. campbell's not as good. the food group is what you go back to. you go back to major themes that were good that got knocked around yesterday, and it would not surprise me if this company is higher at the end of the day. they basically said hey, listen, door number three is real big. don't worry about it. i don't worry about it. i think these guys, i bet you they blow up craft. there's no need to have anybody working at kraft. >> right but then do you cut into the bone and impact their ability to actually grow the top line because they aren't undertaking new initiatives they might otherwise have because they don't have any people. >> it's a great question but they have historically been

fiefdoms. look at proctor. they hit a new low last week. do you think they're slim? do you think they don't have fat? >> i would assume it does. >> well, they're not changing their organizational structure like google. that has not happened. >> and the price of a razor. i switched to schick. that's major. >> you did? >> i think i'm the only gillette guy left. >> how do you afford that on your salary? >> i don't buy food. >> you do the nbc and hbo, that's how you can afford that? and the packaging. how can you open it? i do not have the finger strength anymore to open a gillette razor package? >> we'll have a new ceo at pentagp&g and perhaps he'll take your concerns to heart. >> do you know what a lopper is? i'm buying one to get my

remaining blades out of the gillette packaging. >> gap is down, comp down. down 10 at banana. up 3 at old navy. the guidance is weak. >> i had a pair of gap slacks i was going to wear to the club and i saw they said gap, i said i'm going to the club. no way in a pair of gap khakis. >> okay. good. i'm glad you're not. i don't want to see you in gap khakis. on the broader market. >> only salmon pants, your nantucket reds? >> i'm not there yet. the wife wants me to. i can't get my arms around it. >> i don't see you in the red. >> a lot of guys love it. >> people can pull it off. the broader market will get to bob and get his take as well. people are saying what's happening here is simply that china is exporting a lot of deflation right here before we hike rates and can the u.s.

economy actually take it is going to be a key question given these pressures that could hit. some saying treasuries head down as a result of that also. so this is not insignificant. i'm sorry. no yields head down. price goes up. >> it's harder to get the market unglued given that we'll circle back. >> are we going to get people talking about ten-year yields? >> 2% ten-year again. i'm talking about it right now. >> there it is. it happened. >> and that means i want to go buy the same fantastic companies that have good yields at color rocks that's been down. i'll circle back. i'll buy ko on the strength of the dividend, not necessarily that you can have all the coca-cola you want and not gain any weight. that's not what he said, but i think it's a company that has a

good solid yield and you're going to want to buy that. >> at&t back up the 18. >> they said buy verizon. that was an interesting call. and they talked about going up at verizon. >> well, very compelling. $54 target. interjy is one i'm watching. that thing hit a 52-week low. i'm interesting in yield because i'm talking about the ten-year going to 2%. >> you are. right. now you are. people are talking about it. i knew they would. >> i talked about the shack myster earlier. didn't give you a rise. but the ten-year at 2 %, gets him interesting. the chicken sandwich meant nothing because the taste per

share or because you're just trying to cut the line at the shake shack at city field. >> you cannot do that. if you get the good seats, they come to your seat. >> they came when i was in line to give me a burger. i was like no. a tweet-o-holic would kill me. i am a man of the people. i said no, i'm waiting. >> as we said, verizon is the leader and the lagger, cat caterpillar with the dow down. >> that was a misdirection play not unlike someone that i saw at the eagles camp. the give looks like it but it was straight out. >> let's go to bob and see what's moving. >> reporter: good morning. everybody is trying to figure out if this china devaluation is going to help chinese exports. that's what it was there to do. there's a lot of debate about this. i tend to agree with mark chandler. he's a frequent commentator here

on cnbc. today he said the depreciation is unlikely to have a perceptible impact. it's clearly having an impact on the rest of us. commodities are down 2% to 3%. copper down. aluminum is down in london. crude is down. this is having a big impact on the energy, the industrials market here. metals having a hard day here. aluminum, steal, vale down. latin america is down. the emergency market weak. the chesapeakes and transocean, even potrobras up yesterday, down 3 .7 % today. let's look at what's happening in europe. you can see china affecting europe. germany is an export led

economy. italy and spain are not so much an export led economy. germany is down 2 .5% and italy and spain not nearly down as much. that's a clear sign the europeans are reacting to concerns about higher potential imports over in china. greece up, of course, on rumors there may be a third bailout imminent. european autos being affected. bmw, and could it be a worse near for free port mcmor ran. late last night they announced a $1 billion secondary. they only have a market cap of about $12 billion. that's an 8% delusion. they were supposed to ipo their oil and gas. now they're raising money in a secondary? this would seem to imply they're not able to get the ipo done.

that wouldn't be a huge surprise but, again, just a year and we'll keep an eye on if they cancel an ipo. back to you. >> thank you very much. got a couple of deals to talk about this morning. each interesting in their own way. let's start with a divestiture. the sale of veritas to carlisle, carlisle also being joined by singapore's sovereign wealth fund in buying the business for $8 billion. total proceeds to symantec, the veritas deal itself was not a good one for symantec. back in '04 they announced it. they closed it in '05. the chairman of microsoft now ran it again.

back then it was not considered to be a great deal and they announced last october they were thinking of spinning it off. they also entered a process in january where they started to entertain potential bids. largely from private entity. and carlisle walks away a winner at a price many have to be happy with representing 10 times forward ebita. i see other thoughts it's 3% fiscal sales. not a bad number for this business, and to take you back a bit in the terms of what it means, fbr on the deal, i thought it was interesting. they said today's news should come as a relief to investors. now they is k laser focus efforts. that is true. i'm told by people familiar with the position, they're going to

be focussed on m&a using the new cash. veritas acquisition, they say remains one of the most head scratching transactions we've seen in the space. and it's been a black cloud around the symantec story. no longer the case. the emergencier was worth about $13.5 billion when they did it. it doesn't pencil out to a great deal at all. >> is it with some of the all time bads? >> i wouldn't put it there. >> look at the stock. it's down at symantec. i thought it would have been up today. >> me to. but shares of terex are up. the shareholders are going to get 8 shares for every tex share they own. it's about a 60% ownership for buy terex shareholders and that

means they qualify even under the change regulars at treasury to invert. now, they say there's not going to be a change in their tax rate but what this does allow for, some of the research this morning indicates ubs weighing in on the deal. the last tax is oversees cash. and a result, increase the ability to buy back stock. in fact, they combined equity plans authorized 1.5 repurchase. and there is an expectation perhaps that could increase. 121 million of cost synergies and the expectation of returning more doosh shareholders. there you see morgan stanley on their expectations. the third inversion we've seen. coca-cola enterprises didn't have any business in the u.s. but you saw the cf deal last week.

that was an inversion and now this one. they come back. they're meeting the regulars. you can't do a smaller company. it has to be 60% 40% to benefit. >> i'm going to throw this to the camera. but these two companies did a lot of overlap and it's going to be the long way to consolidation in the crane industry many people have been waiting for. >> yes. >> so look, this is a real deal. i thought it was great. a lot of people haven't liked terex. often shorted in relation to caterpill caterpillar. that's not going to work. this is a company, i couldn't believe how good the deal was. the fact that they made the buyback after announcing instantly how they did it? >> they can use the overseas cash. inversions are back. let's head to rick at the cme group in chicago. >> reporter: good morning.

we have to start with the most important chart everyone on this trading floor is looking at. that is a september of 2012 beginning of the dollar versus the chinese yuan. we can see we haven't seen the dollar against these currencies since the fall of 2012 and it underscores. the pairings like wine and dinner. if you try to artificially create growth, artificially low rates and weaken your currency. but the pairing that goes along with it, the unintended compadre you bring along are lower prices and it starts are spiral. it brings the central banks into doing more of what started it in the first place. fed funds, should they pay attention? they have been. i picked november but we know the other day we settled at the lower level since mud june. it's going the other way. we know that flattening

sometimes gives you an indication of fulling forward fed activity, raising rates because it's reflected. we're seeing steepening. look at a two-day of five versus 30s. and dollar index, is this going to change what the fed does with regard to the currency manipulation? or is it a big banner. a two-day chart of dollar index is moving lower. if we look at a two-day of two days bunch marked against friday, a lower yield. the ten-year, lower yield, 2.15. the 30 year is the only one higher. >> fabulous report. >> when we come back, venture capitalist will get his thoughts

in on the restructuring of google and alphabet. and the vix with a quick 10% pop. we're back in a moment.

not good thing as china makes the devaluation. not much working although google remains higher by about 5 %. we'll get to stop trading with jim in a moment. in the us, three in ten college students drop out. but how can you spot who's at risk? the one who lives far from campus?

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is this market smart in you see walmart is now up. it's a big buyer of goods from china so people are extrapola extrapolating that. walmart has not been one of my favorites but it's not as interesting as it used to be and this is an interesting level to look at them. >> some people wondering if they're going to pass along savings to consumers. >> there's interest about how you give minimum wage. i think mcmillen is trying to turn that battle ship around. it is not easy, but they get a little break here. they buy in bulk. >> right. >> they get a 2% discount. i like that. >> mad money tonight? >> you write a check, and then wisdom tree.

and etfs that need currency changing. a successful story and we'll talk about how successful. >> what a day. just getting started. >> i just love this day. so exciting. >> we'll see you tonight. when we come back, david kostin on the markets and this china affect. we're back in just a moment. can a business have a mind?

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try zyrtec® for powerful allergy relief. and zyrtec® is different than claritin®. because it starts working faster on the first day you take it. zyrtec®. muddle no more™ . good tuesday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen, david faber at post nine at the new york stock exchange. take a look at the markets. everyone is trying to figure out what exactly the impact will be on corporate america on the fed and everyone else as china devalues the yuan. and opec, oil at a three-year

high. >> first, breaking news on the u.s. wholesale trade. rick in chicago. rick? >> reporter: well, thank you, sara. remember, this is the last of the second quarter data points. it's june. it could affect gdp revisions. up.9 on it's the best since april of last year. more widgets may have a bigger effect on a gdp revision. here's the downside. sales were only up .1 since last year. there were revisions. last year they released it's now .6 sales. there's mitigating factors of the effects of gdp but the overhang of inventory was a contributing factor in getting people to overassess the

sustainability of some of the growth from last year. it's an john goiongoing adjustm. it will affect imports and global trade all to be determined and worked out by the marketplace. back to you. >> we have some breaking news this morning on the this massive insider trading case tied to hacking. >> reporter: federal prosecutors in brooklyn and new jersey have charged nine people in computer hacking and insider trading scheme. five of them arrested and four of them koorcooperating with authorities. in an indictment, they charged the hackers and traders with 23 pound counts, including wire fraud and securities fraud. allegedly two of the hackers live in the ukraine, and then three of the others live in georgia. these are those involved in securities trading. the traders basically what happened is the hackers would access the pr or the news wires

of three companies, business wire, market wire, and pr use wire. we've reached out to all three. they have not returned our calls and e-mails seeking comment. the hackers would get inside nonpublic information and distribute it. we do want to note that the se kc is charging this group of hackers and traders reaped millions of dollars in benefit. we are going to be taking the conference or excuse me, the news conference that happens at 11:30 today. we will have it live on "squawk on the street." back to you, sara. >> thank you very much. let's get back to the market story of the day. that would be china pulling a sudden shock devaluation of the currency. the central bank move triggered the largest drop for the currency since the mid 90s

dragging the currency to the lowest in three years. this is a signal not all is well in china. it comes after exports plunged 8%. beijing is trying to get a grip. a weaker currency helps it regain competitiveness. stocks falling with the dow down 180 right now. other currencies in asia and those like australia also got hammered today. this could trigger more policy moves to weaken currency in what is a currency move. the u.s. dollar gets more stronger. it's been a huge headache over the past two quarters. it could now get a lot worse. what does it mean for your stocks in your port e folfolipo? if you own apple and nike and

companies where china is a real growth driver, this cuts into the sales. what are you telling your clients this morning? >> a couple things to think about. first is, two-thirds of the u.s. revenues of american companies are domestic. the driver of the economy is domestic demand, and there is some evidence in terms of the job market in the u.s. that things are getting a little bit better. >> you say that but look at what a drag on profits the strong dollar was in the last three quarters. >> right. the market is going to get through this. the real issue is there demand in the united states and arguments are sales is still growing. the economy is still growing. but that's a pretty good environment for a market which unfortunately is trading at 18 times guard earnings. i think the way you want to think about this is really flat is the new up. the idea is the u.s. stock markets returned 18% annualized over the last three years and now we're looking at a market around 21,000.

we have earnings growth coming here about 1%. you have money flow coming out of the market not in. and then finally the fed has a hike on the horizon. that's why the market is unlikely to go far. if you want to think about where to invest in the market, think about rotating from the fences into cyclicals. think about more value than growth. and think about more domestic end market revenues as opposed to international. >> those are the themes -- you've been preaching that for a while. >> think about what's happening. the defensive stocks trade at 19 times forward earnings. cyclicals are 16 times. the gap in performance is a setup for what happens is a better economy would be more n beneficial for some of the cyclicals in. >> are you worried about a better economy if people are right china is exporting

deflation and yields are heading down and this is going to be tough for our economy some. >> this could be an argument for why the fed delays. that does put some pressure on the fed hike would be a pressure on the pe multiple where we're at currently 18 times the forward earning. >> you're not concerned that last night's in china and globally as sara mentioned -- >> the spillover. all countries are going to have to do that. >> there are countries with a significant amount of their revenues generated overseas. those companies have underperformed. they're basically flat and those with domestic revenues are up 7 % this year. that split is pronounced. it goes across the sector. it's where your revenues are generated. we would prefer to recommend companies with more domestic revenues. that would be a general strategy in the market to combat the fact that the high valuation is really a head wind for higher

market. >> you are reaffirming your target for the s&p 2100? >> it's been that way for the better part of this year, and for all this year, the market is set up as a very high level of valuation to begin with. >> you argued buybacks have been a big source of demand. m&a has been important. what if they erode in the back half? >> the number one source of spending in companies is capital spending. companies are investing their business, the biggest source is corporate repurchases. that is the sole demand for shares. that's a good demand. you have to ask yourself is a strategically smart use of cash at an 18 times forward multiple to buy shares. generally a little more cautious but from an overall market level, that's a source of cash and demand for market. you're not seeing it in terms of mutual fund inflows and etfs. >> is it your assumption that

backback demand remains const t constant? >> it's up 8% this year. buying in shares and that's one argument for why you get the markets staying at this level as opposed to going lower. that's the positive argument. the negative is that the valuation, lack of earnings growth and the fed hike on the horiz horizon. that's the sea saw that leads you to flat as the new up. you should expect that kind of return in this market. >> we also have energy prices running down. wti hitting an intraday low. impact in your opinion? >> modest. energy companies would be affected but from a real impact, some companies have hedged that. a lot of companies are energy is a relatively modest input into their cost of production. so that's impacting some -- >> have we seen the up tick in consumer spending given how low oil has been? >> we have not seen that.

basically about $150 billion of a tax cut. savings rate, they're not spending it. they're saving it. the question is how persistent is the lower gasoline prices and would you bet it into your family budget. now we see it that way. and if you get better job dwrout and lower gasoline prices, does that spill into retail sales? >> they're talking below $2 before the end of the year. that would be a tail wind for spending. >> another retail sales report this week. we'll see what happens in july. speaking of correlations, energy. what about yields? what happened to the relationship between treasure yields and the stock market? >> yields have been in a narrow range and the equity market. if you had a scenario that rates rised, more downward pressure on the market. as buying yields have stayed

pretty narrow, i think the s&p trades around fair value which is consistent with this environment. >> from a chart perspective, as you've been sitting here, we finally got this dreaded death cross on the dow where the 200 day and the 50-day have intersected. do you care? >> no. >> what is the biggest risk to your forecast here? >> i think the idea of a higher rate environment would be a concern. the dollar has been a trend and that's been the strengthening dollar has been going on for several years. we expect that to continue over the next several years. that's a tail wind for more domestic revenues and come back to the first observation. two-thirds of u.s. revenue companies are domestic. >> that's why the dow is getting hit a little bit harder. down 6%. david, good day to have you here. >> thank you. >> google announcing a major

overhaul. it is creating a new holding company called alphabet which will become the parent of google and all the other businesses. larry page ander is guy bryn are going to run alphabet. they'll keep the same symbols. joining us on the phone is rbc capital markets lead analyst. he is maintaining his google outperform rating for what will be alphabet and, mark, generally speaking, people seem to be taken with this. of course, the market reaction has the stock up 5%. but nothing changes the underlying profitability of these businesses. so why should the stock be up 5%? >> you know, you're right. we look at this as more of a mod list catalyst. the market wanted four things from google. what this move indicates is more transparency and i think what

we're going to find out is how much more profitable the gore google business is when you strip out the moon shot investments. that's nice. it's not great but nice. >> it's contrasted with amazon where there were questions with how profitable it was, and then we learned it was profitable. this is a bit different given that we know, i mean, your point is well taken. we don't know specifically. we can back into the numbers but we know that it's incredibly profitable, the search business and the rest of core google, don't we? >> we do. the numbers are as follows. google is going to report something like 50% ebita margins this year. they're probably spending 4 to $5 billion on these businesses. also, to your point, great way to have created value. i don't know if it's sustainable or not over the internet is segment disclosures.

investors like the greater transparency. what i would like to see is tell us what the core google search revenue growth is. we think it's higher than the market fares. i don't think we're going to get it. >> does this new structure have any implications for what ps with the cash or is it just going to go toward spending on these investments and investors can forget about the dividend? >> it's hard to know. i don't think there's anything we heard last night or read last night that indicated that cash back either of dividend or share purchases are more like lly. they have the power to do that. by the end of next year, google should be sitting on about 80 to 90 billion in cash. that's where apple was when they started paying a dividend. i don't think we got any greater conviction on that based on what we heard last night. >> mark, what would be a set of

dream metrics you'd like to get your hands on in this new era of accountability. >> what i would really like to see are more than anything else, just tell us what's happening to the core search business. what the market fears is that core search, mobile and desk top together is well on its way and it's almost in single digit growth land, 8% growth year over year. we think it's low to mid teens and it matters, because the longer they can sustain that low to mid teens growth in the core advertising business which is so highly profitable, it gives it greater long-term growth opportunity. that's why it would be super. if you can't give us that, how about telling us the youtube revenues. we keep hearing that the numbers are too high or low. tell us the real numbers. we'll do the rest from there. >> mark, do you think there's been a change in attitude at all amongst larry page? i noted earlier in the blog post, he went out of his way to

talk about alphabet and alpha and the fact that they strive to deliver returns above the market. i don't remember seeing that before. >> i was struck by that too. that his play on alphabet. it's nice to hear. there are things they could have done in the past, and you don't have to create this new entity. you can just provide greater disclosure along lines we were talking about. and you can buy back stock. it's clear what you could do to get it to perform better. the market is reacting rationally since we've seen signs of margins stabilization and you have a new cfo who is supportive of the street versus the prior cfo. they've done some simple straightforward things to improve the stocks. the asset is good. >> mark, as always, appreciate your insights. thank you. >> thank you. >> when we come back, shake shack shattering wall treat expectations with the 75% jump

in revenue. can that momentum continue? we'll talk about that with the stock up about 3%, when we come back. it took serena williams years to master the two handed backhand. but only one shot to master the chase mobile app. technology designed for you. so you can easily master the way you bank.

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likewise. >> your take on the quarter and what appears to be the latter half of the year being stronger than the first. what's going on? >> absolutely. shake shack had a remarkable second quarter. their momentum seems to be picking up a little bit, in that the excitement is still there. this is a company that's been around for a decade now, and when they launched their ipo, i think there were some questions about whether or not it could keep up some of that momentum, especially as it grew outside of new york city, especially but i think the second quarter really proves that there is still excitement there. there is still demand for this business and moving into the future, i expect that that demand will continue, and there will be excitement around the brand. >> are we in a period where people have heard about it in other parts of the country, it comes to their town, they give it a try, and then what? does it get the second and third look as it's up against a whole host of competitors nationwide? >> yeah. this is the big question that shake shack is facing moving forward. a lot of people like to compare

shake shack to chipotle. it's a little bit apples and oranges but the common touch point the companies have is that their both fast casual restaurants with fresh made to order ingredients. if you compare it to whichchipo which has expanded, the challenge for shake shack is it's not unique. when you look at chipotle, they have a wholly unique product, and not as many competitors where shake shack is up against a host of burger and fry competitors. as it moves into other towns, it's going to have to work hard to secure customer loyalty because there are dozens of burger branlds, not to mention just the independents it's going to have to go up against. >> there's been a bit of a burger euphoria when it comes to ipo. it's not just fast casual. it's burgers. with the wild valuations that

these new companies are commanding. should investors be giving more respect to old school burger chains trying to turn things around, burger king, mcdonald's, red robin. they have greater presence and plans to turn it around. >> i would say yes. purely because remember, burgers and fries, this is never going away. america loves beurgers and frie, and despite diets, burgers and fries will never go away. when you talk about the larger companies, there's always going to be a demand for their product because america loves that product. i would never bet against a burger concept purely because the business will usually be there but what we have to talk about is competition because as the competition ramps up, this is when some of these brands are going to be running into hurdles that will be difficult to clear. >> are you getting a sense that the quality, if i go to a shake

shack outside of new york is what i have come to expect in man hatten? >> absolutely. the quality is there. this is a really expertly run company. i have a ton of respect for the people running it. they know what they're doing. they are restaurant guys through and through, and they will be consistent in restaurants. the quality will stay high and that expect that experience from the shake shack will be the same in new york and vegas and every city they move into but the quality is also there in a lot of competitors. when you're talking about the better burger segment, you're looking at a lot of brands. there are so many of these brands that are offering high quality burgers and fries that they're running up against some of that. it's going to be difficult to move into places where they already exist. >> a lot of our viewers want us to ask you about loco but that

will be for next time. thank you so much for your time. >> thank you very much. >> when we come back, the abcs of alphabet. how google's new structure would boost things.

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>> the casual dining chains came in inline with estimates. the sales missed. it's the low end of the previous range. the stock is up over the course of the past year and be sure to watch closing bell today as steven carly will be on in the 4:00 p.m. hour. back to you guys. >> thank you so much. when we come back, red across the screen today.

the dow slightly off the lows. still down 140. the one and only art cashin will join us onset after the break.

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throw rocks and bottles at police. the river spill in colorado has polluted more than 100 miles of a river cutting off drinking supplies for thousands in two states. an estimated 300 gallons was accidentally released last week closing parts of that river. dramatic footage out of oregon. firefighters say a gas fire spread to a trestle causing the beams to go up in flames. luckily no one was hurt, and a district judge directing settlement talks in a hearing over tom brady's four-game suspension. the judge expects an update on their discussions by tomorrow. we'll keep you posted. that's it for the cnbc unews update this hour. let's get back to "squawk on the street."

>> google overhauling the operating structure and creating a new holding company called alphabet which will become the parent of google. so what would alphabet accomplish that google could not. josh limiten is live at google with some answers. josh? >> reporter: even larry page acknowledged he's still getting used to the new name. it's a new public holding company that page is going to run with sergey brin. it has a portfolio of google's moon shots. that means nest, fiber, which is building out high speed broad band networks around the nation, google x, and investment arms venture and capital, the whole point of this new move according to page means google can be more

transparent about all the many businesses. something we know wall street has been clear it wants. it could also give google more runway to do big deals, spinoffs and even repatriation of gas overseas. and this part of the business will become page's key focus. alphabet will replace google and all shares of google will convert to the same shares of all alphabet with the same rights. >> thanks, josh, for running us through that. the dow is down 153. still down across the board. we'll bring in art cashin. the signal was the chinese stock market didn't respond well to the chinese currency devaluation so nobody was responding well. there's all sorts of spill over

and this impacts a lot of economy. >> it does. but there's some feeling that maybe there was a beneficial reaction yesterday. when they had that 5% move in the chinese markets, and in anticipation of some stimulus, and this fit right in. as we were discussing off camera, there were real possibilities here about the other asian tigers, the emerging markets. indones indonesia, singapore, their currencies were in rocky shape before. are we going to go into a full scale currency war? >> a lot of people think we have been in one and this is the latest move and everyone is going to have to retaliate. what does that mean for stocks and how spooky is that if we're in a world where we're seeing competitive devaluations ramp back up? >> the problem is as we learned in 2008, global trading means

the world is all licnked together. while we can be dismissive and say what would they mean to us, we say that in '97 about the thai bot. i think the fed is probably going to watch closely over the next four weeks to see what kind of spillout we get here. does it begin to interfere? on the face of it, you would assume that china might want to sell u.s. treasuries to help push rates up here which would strengthen the dollar but conversely, they have the other problem which is they need to make sure their currency stays low. is either they move our currency or they have to protect theirs, and to protect theirs, they may have to buy u.s. treasuries which is the reason that they have amassed the hoard that they have already. >> so you're resolute on your forecast that the fed does not move in settlement or in december? >> i'm still there, yeah.

i think they have an up hill fight, and i think -- i mean, i read fisher yesterday as saying look, we are where we want to be on unemployment. but we can't quite get there on inflation. and i think that he was purposely spelling that out because all the pundits in the world for going crazy trying to say if it 5.20 or 5.3. he said it doesn't matter. that's not what we're looking at. >> and lockhart, not a deal breaker. fid today, compensation not enough to move the needle? >> it doesn't look like it to me. >> what about what china is doing and where do we go on rates? is it possible we go down below 2 or below in. >> i think we can. there's also the great risk. they say we have to get off cereal because we can't do anything. obviously they can go back with

another qe. i think you're going to want to watch exact lly what's going on. fischer referred to oil, and he talked about the commodity pressures being transitory, their favorite word. if you look at things going on in things like copper today, this is really a deflationary push. i think you picked a topic for where things can get a little bit out of control. >> another qe. did i hear you say that? >> yeah. if things don't start to go right, do they have any other choices? >> at some point you're pulling on a string, aren't you? >> you have, but they're in a kind of silly loop where they did qe expecting a reaction and didn't get any. and then they had to go and do qe again because it didn't live up to their forecasts. so, yeah, i think -- but they have no other options. if things began to go negative on the economy, qe is all they can do at zero.

>> art, energy is the hardest sit sector right now. you mentioned copper was weak. industrials are at the bottom of the pack. this is the opposite of what we saw yesterday. for all of us folks out yesterday saying commodities bottomed, barrons put it on the cover, you don't think we're there? >> it doesn't feel like it yet, and this is going to play out, i think over two months. so it's not that easy. i know a lot of people felt that commodities had bottomed but i'm not so sure. i think they really kind of panicked when they saw their exports go down 8%. and for all the talk about we're going to convert our economy and have it a consumer economy, it's not happening. they're having internal struggles there. and obay in japan is beginning to lose public support left and right. >> a time to weaken the yen more? >> maybe. >> they can go further. >> right. that's what we're going to be watching.

currency wars are about to heat up. >> i'm going to be watching the political response in the u.s. donald trump won't respond to me on twitter. but seriously, china has been a punching bag. >> and they're coming in a month. >> and this is going to be on the agenda. i guarantee it. this is considered a step back from the appreciation that they've been doing over the past few years? >> no question. >> it has appreciated 30% over the dollar the last ten years but this move is a record move that's going to get a lot of attention. anyway, art cashin, always good to talk to you, especially on days of devaluation. still ahead, kara swisher joins squawk alley to weigh in on google's new name and what it means for the company.

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enjoying a lot nicer weather in chicago than we are in new york. rick santelli are the santelli exchange. >> thank you. and nobody better than iron harris to talk about what's going on. i'm surprised there isn't more squawking in the upper echelons of upper institutional trade as we see the economies of scale get redefined again by the chinese. everybody manipulates their currency and played the qa game but your thoughts of china viewed in that context? >> it technically makes sense. if you looked at a dollar yuan

chart, the yuan has been below the 200-day moving average for quite a while. >> so imf may look at this and said they did the right thing in. >> that's right. but i think the chinese fired a shot and i think art cashin has it right. >> he always gets it right. >> if we go back to an argument, look, everybody is banking on the chinese to become a more domestic consumer oriented -- >> the president of this country said we need to be more export driven. >> if you're going to go to a consumer-based economy, you don't depreciate your economy. this was a notice for the world. we're not the only suckers in this game. we have tools here. we are not going to be the recipient of everybody's currency depreciations. >> the closer to we get to normalization, this was

calculated timing wise? >> yes. >> what are our tools? >> what are your tools? >> yeah. you said the fed had plenty of tools. >> they are going to hold off here. let's laugh about lockhart's piece yesterday. >> happy ending? >> happy ending. i think the chinese just massaged a way lockhart's happy ending but then i would be playing into his words. >> the other thing art cashin said is that maybe this brings another chapter of qe, which, to me, underscores how lost central bankers really are but in the end, let's paint a picture. how do you think it's going to play? >> it doesn't play well. this is all they have, and if you listened to stanley fischer, this is all they have, and, again, we have talked about it. it's not rocket science. and stanley fischer came into our camp yesterday with the not rocket science. he said this is new territory. and it's grounded in the tax

book but not really. >> now we have the imf. we don't see eye to eye. how do you squawk about something that everybody does only they don't do it as wildly aggressive in. >> the chinese, that's why the chinese said, hey, we're here and we are, again, not going to be the recipients of everybody's currency depreciation. let's go around the globe. >> even cramer today pointed out steel stocks. one of the first places to look. but what's the response? quot quotas? that's going to escalate. we're out of time. is art cashin right? is the next book in the central planning going to be more qe? final answer. >> we talked about that december 24th th. that's a great possibility. don't let that go yet. >> here we go again. thank you. sara, back to you. >> that was fun to watch. when we come back, nfl owners are meeting in chicago today to talk about potentially moving a team to los angeles. could it actually happen and

just how much money would that make? more on that coming up. and tomorrow alibaba ceo daniel zhang will join us after the company reports. a lot to talk about including what's happening on the ground in china. "squawk on the street" will be right back.

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oil is in a deep slide today. it's down about 4 % right now. kourtney is with us if w more on the slide. china courtney. >> that's exactly right, sara. china is front and center for a lot of movers in our market but most especially crude prices here as you're seeing them tumble almost 4% getting ever closer to the 42 handle which is a very key support level. and what happens here is sort of a double whammy. when china devalues its currency it makes crude oil more expensive because of course it's dollar denominated and also reignites those fears about a lower demand from china, even lower than what we had previously been worried about. we also got some news out of opec today that again those production levels hitting three-year highs. the opec also forecasting no extra demand this year for crude oil. so now you're also adding to that supply glut. there's very few reasons here to be bullish on the price of oil. most everyone is just looking for oil to continue to fall into

that $30 a barrel range. it's not really a matter of if but just a matter of when at this point. we're also seeing other non-precious metals slide here. most especially copper, which is down almost 4% on the day. again, also out of that china news. so it's pretty simple why we're seeing the action that we're seeing down here today, but it's pretty mag nooid donified down the nymex. >> thank you very much, courtney reagan. nfl team owners in chicago today and one hot topic would be the possible move of a franchise to los angeles for the first time in 20 years. our next guest is at that meeting. he was involved in the relocation of both the rams and the raiders from l.a. in '95. mark gamas is the president of sports corp. he joins us on the phone. mark, it's great to talk to you again. good morning. >> good morning. >> they're calling this not checkers but three-dimensional chess. there's all sorts of things going on. it's always hard to predict what the league and the owners will do. what's the plan in your view? >> well, the plan is to try and

target one or two teams to move to l.a., likely for the next football season in 2016. and they really have a shot at making it happen this time. it's really in the best position that it's been in 25 years. you have two teams -- you have three teams, two stadium plans. both very viable. and that's what the owners are going to hear today. >> there's all this talk about how a temporary venue wants one team that would favor st. louis over san diego, oakland. is that fair? >> no. the temporary venue isn't going to be the dispositive factor. that's like the tail wagging the dog. the league is looking at what is in its best interests on a long-term basis while also making sure that it takes care of its existing markets before it moves the team from them. and that's really the process that's going on right now. >> do you think that the league really wants a stadium in l.a., or do you think they just want the threat of that so that taxpayers in st. louis and san diego can pony up more money for new stadiums? >> definitely the league wants

the stadium and team in l.a. this is not a leverage play to try and get more out of the home territories. believe me. the current situation as it stands right now i think some of the team owners would prefer that maybe the local communities didn't step up as well as they're doing. >> hey, marc, there's also a sense that i don't know, somehow l.a. is being too cool for school, they're not pulling out all the stops the way another city might. why is that? and what effect might that have on the decision? >> you know, that is a great point that so few people actually bring up. and that's been one of the fundamental problems the last 25 years in why l.a. has not had a team. whether it's as you said it's too cool for school or it's people who say, well, if i can't be a part of it then i don't want the team here at all. it's a really interesting passive-aggressive competition they have in los angeles. but this time -- but what you've got now is you have the team owners themselves focused on making this happen. that is the key difference today

that has been the case for the last 25 years. and that's why this is moving forward as well as it is. >> but you don't think it reflects a lack of would-be demand in l.a.? >> not so much a lack of would-be demand for tickets and suites and that kind of thing. what it is, it's led to a lack of deals to be had to build a world-class stadium there. where is it going to go? which city? which developers? who's going to benefit from it? who's going to own a piece of the team? these are all issues that are really ancillary issues to the fundamental point of bringing the nfl back to los angeles in a way that the fans want it and that supports the league in the right way for the next multiple generations. that's what the league is focused on right now. that's what these team owners, these three team owners are focused on now. and that's what the big difference is. the problem has always been getting the stadium deal, getting the community together. but the fans have always been there. >> finally, moore, while we've got you, i don't know if you saw headline today. a judge is ordering the league and the union to engage in

settlement talks over brady's suspension. are we just going to make this two games and get back to business? >> i know everybody would like to just get back to business, whatever the number of games are. it's nice to see a judge step up and try and force the parties to come to some sort of resolution rather than standing on the positions they've charted for themselves. so i have high hopes that this judge is really going to put the wood to both sides and they're going to have to get serious about a settlement. >> yeah. a lot of people want to see kraft and goodell kiss and make up. we will see what this means. marc, we'll watch l.a. too. it's good to see you again. thanks. >> thanks, carl. great to talk to you. >> marc ganis from sportscorp. >> with the dow down 173 let's send it over to jon fortt a look at what's coming up next on "squawk alley." i've got a feeling you're talking about google. >> absolutely. alphabet. also apple gets a cut from

jeffries. what's the deal with the iphone coming up next month. and insider trading has hit the hacking era. we will dive deeper into that story, all coming up on "squawk alley."

let's give you a check of

the major stock market indices. with the most pressure on the dow, obviously, when international concerns with front and center, you see it impacting the multinationals, the dow members. dow down 174. that's a 1% move. the s&p 500 down 3/4 of a percent. and the nasdaq down a little less, down .6 of a percent. the china sudden and stark devaluation of its currency having ripple effects around the globes. hitting commodities. watching the price of oil very carefully at this hour as it flirts with the $43 a barrel level over at the nymex. pressure on oil. pressure on copper and other commodities. currencies are at the center of the universe today. let's give you a quick check of the dollar index. that's the dollar against a number of other currencies. it's heavily weighed against the euro, which is actually strengthening. but it is a strong dollar story from the emerging markets. especially after that chinese move. with that i'll send it over to you, carl, for "squawk alley." >> good morning. it is 8:00 a.m. at google headquarters in mountain view,

california. 11:00 a.m. on wall street. and "squawk alley" is live. ♪ my name is ♪ my name is ♪ my name is ♪ slim shady ♪ hi, my name is, my name is, my name is ♪ ♪ slim shady ♪ hi, my name is who ♪ my name is huh ♪ my name is slim shady ♪ my name is, my name is, my name is ♪ ♪ slim shady good tuesday morning. welcome to "squawk alley." joining us as always, jon fortt, kayla tauschee at post 9. the top news of the dpa is google announcing that massive reorganization, creating a holding company called alphabet. also elevating product chief sundar pichai to ceo of google. sergey brin and larry page will be heading the group alphabet. the investor cni