>> we've had a difference in how we carry private companies. i think we're pretty good on that. in terms of public securities, we mark them as they get marked at the end of every quarter. >> thanks for being here. >> i'm here tomorrow. >> i'm not. >> make sure you're with us again tomorrow. "squawk on the street" is next. ♪ >> after the worse three days for the dow ever, the oversold bounce appears to be here. good morning. welcome to good morning. i'm carl quintanilla with jim cramer and fdavid faber. the dow is set to pop at the open but not enough to rally yesterday. shanghai dropped 7.4, the lowest

since december. a big day for housing. we'll get new home sales in an hour. after an historic day which saw the dow fall minutes into the trading session before closing down 588, futures are serging. china's central bank announced it's lowering the bank reserve requirements by.5%. it's the fifth time in nine months they've done this. the question is what are we going to get out of it? >> i thought the more important story than the cuts of rates is that maybe they've stopped the game of trying to prop up individual stocks. the stocks are just not companies that you would -- they're buying sock pickup truck. they're buying web van. and i think what's going on is this may represent a more serious attempt by the chinese communist party to put people to work or something. they could spend their money

fixing the sewer systems. maybe they'll start doing serious work to help their economy. >> does that mean today is your chance to get out, to sell your least favorite names? >> yes. i have to tell you, when i see this market, i have to use the old rules. and the old rules i have is that you missed it. you just missed it. you have to wait for it to come back down. you buy stocks up three and four and then people who bought them yesterday are going to hit the bids. that's the way it works. i said yesterday on air that i put a lot of retirement money to work. i can't trade retirement money but i would sell it at the opening if i was able to trade. >> the question this morning is is it over? is the volatilely now a think of the -- carl is frowning at that. >> well, a lot of discussion today about, wilbur ross, a few moments ago saying we're not far from the bottom.

>> i think marty said he picked at stocks and you never know when you're at the bill of indictment, a -- bottom. he's been around a long time. i find him reassuring. he's always been smart. his point about you don't know where the bottom is smart. the problem is nothing went away other than the fact that the chinese may no longer be propping up stocks and germany showed good export numbers. it gives me hope that the euro has absolutely bottomed and is going higher. we don't -- it's not a great setup today. you look at the fxe and you're not getting the kind of ringer, a further accumulation of that, and i think you come in up 4%. >> there's no real signs of stress in the u.s. economy and it's not as though the funding mechanisms that we all look at and make sure everything is okay are stressed. they don't appear to be. the bond market, corporates are borrowing at the rates they were

borrowing at. spreads widened a bit in high yield, particularly energy. that's an ongoing story. >> i think 2011 dictates you could still have 5%, 6% decline. i'm saying this kind of rally at the opening, the machines -- i have no faith in the system. after yesterday, if you have faith in the system, the only thing you should have faith is limit orders. it made us look like jokers. everybody involved in the financial market, celgene, cvs down. >> i tried to get a lot of answers and we know there were a lot of market orders and some hedge funds that hit their limits and maybe individuals. it wasn't that much to sell but art cashin said there was 4 billion to sell. why that took apple down that much and jpmorgan down 60 billion is bizarre. >> and that's why i worry. people come in and buy a market order, they buy disney and then maybe it's back to 98. i don't want to encourage market

orders. someone sold ge at 20 yesterday because he put a market order in, who knows. that's crime. now, the way it works is obviously it's caveat emptor. my daughter bought a used car. do i expect it to be new? no. but do i expect the stock to react relative to where i thought it would be, yes. the machines don't work. we're not waiting. the sec is going to say you're going to get your money back? >> we don't have that anymore. >> i love these people who come on and they're confident. i'm not going to call them clowns or say they're mouth boxes. i'm going to say they're ill-informed. you have to use limited orders because people know the system won't work but no one wants to

come out and say it in. >> longer term, you're happy with the stronger euro? >> yes. >> you believe you can start taking numbers up on multinationals. >> yes. >> you don't believe we're at the risk of a recession in the united states. >> definitely not. >> echoing what goldman is saying today. >> exactly. how about a 130 mr. lockhart or bullard, let's say they give an interview on satellite radio and they say everything is okay. do you mean if you bought something up five, you would be doing well. no. we have to fear fed pop offs and people who do not feel like they have to check in with yellen and can say whatever they want. they may call our people and say it's clear and start raising again, and then what happens, you say why did i buy the market

order at the open? that's what i fear. all the things you say are terrific. they're so terrific, there's so many of us. there's so many governors and presidents. this is a offensive line coach -- >> you say keep it in the locker room. >> why can't they? if i were coach kelly, i would fire who disagrees with me and goes on air and says i know coach kelly is using a running game but we should be passing. what is that? use discipline. >> other people are saying they want to hear something from the fed more specific. >> there's a chief. >> yes, there is. >> she's the head coach. >> to give us a sense of what's happening. and you have a great diversion of minnesoopinion now. no not just about the rate hike but one is saying the next move is to ease. the risk of depolice stati

the peck you. >> a bright guy. i am against the notion that it's okay to throw lighter fluid on the numbers. that's what bullard did. you're not allowed to play these guys out. i don't play for dinner. i'm too old for it. these guys give interviews when the market is cascading but i'm not going to let them get away with it. i'm going to call them out. when you're 2-14, some of these guys have been negative the whole way. but you're 2-14 in the nfl. what happens? you're fired. when you have that record three years in a row, you're fired but when you're in this and you're a fed governor, wow, they're worth listening. they're not making the playoffs. they can come on all they want, and that's what i fear. one of those guys today is going

to say cramer is confident. i'm going to rip his head off. bullard comes out the next day after i said i wish they wouldn't do that. pure coincidence but that's what i feel like you're up against. >> at lot of decisions being made today. apple shares have overcorrected. and it's note they said the e-mail is accelerated over the past few weeks, gives us better visibility to the september quarter. that's typically an iphone transition month making july and august important in our important. they do a worse case trough earnings in trough valuations which they argue takes it to 84. >> they should read the best buy commentary about the apple watch. they have to put it in more

stores. that's actual fact. i know a lot of these analysts hate facts that get in the way of the story. >> i should be fair. they're keeping their 130 target but if the world -- >> that's good. thank you. i didn't know that. what i worry about is do you buy apple up five? no. wait until someone drills it. wait until the minneapolis fed, the twins and the vikings, wait until they come out and say the market is so stable i think we ought to crush it. >> and then. >> and then begin to buy out. i'm not being facetious. i came on our air and said these guys know nothing and then i saw, one of the guys laughed about it in the fed minutes. it's not a laughing matter. >> you seem to be taking this as a personal affront right now in terms of the fed. what's going on? >> david, it's business. >> it is. >> it's business. >> do you feel that everybody would have benefitted if they'd

just done the 25 basis points at some point along the way. >> yes. i wish they had when things were more sanguine. they didn't, and so marty saz is saying we know where the bottom is, and -- >> he said this market runs on apple, so to speak. well, it kind of does. it's the leader. it's the largest market cap by far. >> we don't know how sales were last night. i didn't get an e-mail. i have e-mails up to sunday night. how do you know last night, the shanghai was down 7%, maybe last night's sales slow. this is the kind of stuff you have to deal with. it's insane. i look at best buy and i hear the watch was a bust. i heard that this thing, no one is selling it but best buy, which is a real company that sells the stuff came out and said that command is very strong. you may think it's a bust if you're an analyst, but what are

you going to do about the data that best buy gave you this morning? can you ignore it because they're the electronics good seller in the country? i guess you could if you decide you don't like apple. you can do anything if you don't like it. >> by the way, rule 48, that rule we mentioned yesterday that helps the open be a little bit more smooth has been invoked for a second time today. we'll see if that makes the open any better than it was. >> i don't understand. yesterday was smooth. it's the opposite of smooth. that's not rule 48. that's catch 22. >> what's rule 5? is that what you had to get home runs off the phillies? >> when we come back, what china's rate cuts mean for oil companies. the future are well above fair value. we're still on base for the worst august since long-term

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whether it's the chinese rate cut, a series of upgrades or an oversold bounce, futures indicate a sharp up open as the s&p is trying to avoid its first six-day losing streak in three years. we'll talk to the lead of bhp billiton after a break. i'm here at the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this. dentist appointment when my teeth are ready? ♪ can it tell the doctor how long

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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. with how you spell relief, that's the rally as we try to make up for yesterday. that's not quite doing to do it but we're expecting a sharp open in a few moments. the world's largest mining company with results overnight. profits fell sharply on the global rout in commodities but

shares are rallying this morning on a recommitment to the dividend. joining us this morning billiton ceo, andrew mackenzie. we want to talk about the quarter and the dividend. i have to ask you about this line. you say in the short-term we expect ongoing economic reforms in china to contribute to periods of market volatility. can you expand on what you mean? >> yes. what i meant by that is that the chinese are trying to balance their desire to grow with some of the side effects of growing too quickly, and so they are prepared to i think compromise a little bit of growth so they can deal with things like corruption, the efficiency of their industry, and their banking markets. and, therefore, move i think more solid by forward than a path to further investment and a route to more consumption led economic growth. i think they're doing that rather well. >> do you believe they are seasoned enough to do that

efficiently? >> well, i don't think many people have ever done this before. but i think on balance, they are actually showing a lot of wisdom. they are, as you've heard this morning, putting a little bit more stimulation into the marketplace, but they're much more thought about how they did it than in 2008. i think this does show an ability to learn and an ability to negotiate a difficult transition and get what many people call the middle income trap into being a fully developed economy, and i think that will happen over the decades but i think they're playing it well. >> i want to talk about iron oar for a second. andrew forest said yesterday it was market vandalism and self-harm when industry leaders keep expanding. you been a leader of expansion in iron oar. hasn't that just been a mistake? >> well, i wouldn't say we've

been the leader in expansion. i think that's been. we have foregone production more than the total production of foert skew over the last few years we rejected going into a an investment in the outer harbor. we're stretching production through productivity and it's increasing the output of what is the highest margin business for no additional capital. it's a straightforward thing to do. we are one of the world's cost producers and generally in a free market, it's a lowest cost producer that has the opportunities to increase market share. we haven't increased market share but we have maintained it while others have increased their market share. >> excellent point. let me ask you about oil. you made some comments that i thought were down beat about oil but you're doing a lot of drilling. why not cut cap exto make sure

there's no doubt about the dividend you picked? >> we have cut cap-ex. we've said that we're only going to spend $1.5 billion, for example, in our on shore business this year, and this financial year just started. that's a substantial reduction from where we were last year. we've cut the number of rigs in over half. we're only now drilling in nine places and we're only fracking, we only have one frack spread so we've reduced our investment as the price as fallen. >> many people, of course, are very much focussed on china. trying to figure out how quickly or not the economy there is growing. given its importance to your business, what indicators do you rely on when you look at china to try to figure out what really is going on in that economy? >> well, we've been looking at this for 20 years and we have a number of underlying indicators. you know, it goes all the way

down to look at what's happening in the property sector and a number of other sectors and we believe the headline figures that china talks about, 7 % growth this year is about correct. >> really? very few people believe 7% is anywhere near correct. what gives you the confidence? >> well, there's many people in asia who believe it's correct and maybe people outside of china who doubt that, but when they were growing at 10%, we had a number of leading indicators that would substantiate that. when you look at other sectors in the economy, people have concentrated on a small manufacturing index, but when you look at, for example, growth in the services sector and the retail sector, their growth is happening a lot quicker than 7%. >> what are you basing this on? i mean, i think that your company has been pumping out a huge number of raw materials into a market where copper is weak, iron oar is weak, and i find your comments as being

bullish versus the reality. i'm trying to figure out -- >> i don't think i'm bullish. i'm just mixed. i think it's steady as she goes. i think the second half of the year will be a bit stronger than the first half. and we have a lot of people in the ground in china. they're selling the products but they're also checking how the products are being used. yesterday we heard from apple that they're still seeing strong sales of their devices into china at the other end of it, we're seeing strong sales of iron oar, coal, and copper moving into china and we're placing most of our product weeks and months forward, and there's no evidence that the inventory is building up anywhere along the chain. so we always said as a company that as china evolved, the growth would fall from double digi digits and maybe more in the future which has has to do.

it's making the progress well, and we're seeing that happen. it's slightly slower growth, but at the same time, a transition toward more of a consumption based economy is the right evolution that gives us faith that in the future they'll be a major contributor to the world economy. >> you are the right man to talk to about that topic today. thank you for coming on the program. we appreciate it very much. >> thank you. >> we'll get cramer's mad dash and the opening bell in about 4 and a half minutes. turns romantic,

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all right. we have a couple of minutes before the opening bell. let's get to a mad dash. >> sometimes we do make sport of analysts but how about an analyst who had a sell on macy's all the way down and goes to a hold today. real estate optionalty $65 a

share. unlikely. i'm going to contrast this with buying the stock at 70 after an activist, but this is a good chance to come in after the activist, and you know what i'm speaking about. >> yes, our panel at delivering alpha. >> one of the best.diligent. the activists are taking it hard. look at the portfolios. pretty ugly. they take big positions, and in a market like this, that can take its toll. >> but what an opportunity to come in literally down 14 points from where a very smart guy had gotten the stock to in delivering alpha. i like this call. macy's quarter is not going to be that good but the dollar, if it stays strong versus the euro, that cures the strong dollar narrative from the conference calm. i like this. >> macy's popping up on some

screens of companies that have high u.s. exposure. along with chesapeake and union pacific -- >> i think the company has been overly punished. >> overly punished. >> there's the opening bell, and almost the complete inverse of what we saw this time yesterday. the s&p at the bottom of your screen. at the big board it's choice hotels international doing the honors. at the nasdaq hancock holding company. >> i remember when they traded the first time when i see chh and i think of carter holy hail and that trade. >> and fed traded. >> fed rated. >> what's next? the button wood tree? >> have to relive the old days. those were nice days. i had hair.

>> the spoke counts the number of upgrades. 39 upgrades to three downgrades. everything from bank of america to jpmorgan today. you mentioned macy's. sher win gets one. >> i think that's good, carl. you started the show with u.s. is good. i know people put in market orders. look at that. why don't you wait? okay, maybe you missed -- maybe you can miss some of it but celgene up 6. yesterday -- >> down 21% at one point when i watched it. >> someone bought it and now someone smart is going to sell it. i'd like to wait a while. maybe you'll miss five points. someone on twitter said jim doesn't like apple now, incredibly stupid. aside from the fact that in the old days i would have called him a moron, i think it's important

to say i stand by apple. i don't like any stock up 5. i was picking it as an example. i think i could have used home depot. i don't like to buy up five. it's okay to say you missed it. in the old trading days, karen cramer, sometime she was difficult with me, tough. she idiot, you should have bought it yesterday. sorry, and that's okay. >> she could have gotten on you and said you should have bought jpmorgan when it was $50. maybe it wasn't quite 50, somewhere around that yesterday. >> she would have done that. new regime, i don't get that kind of heat. >> that's something to be said for the new regime. >> safe to say you would not be buying here? >> how about i wait until ten after ten. how about i wait until steve liesman gets ahold of someone and they say the worse is over. why is that funny?

>> you keep coming back to these tape bombs? >> who would have thought there was an interview on friday saying they're sanguine about the chinese -- >> you think that's going down as sub prime is contained? >> no. he was just being reasonable. david, reasonable. >> okay. >> like the home runs that were hit against the phillies last night. >> i'd rather just say maybe i get a better chance and if i don't, hey, that's okay. that's okay. there's another day coming. maybe less positive. that kind of thing. >> when you look at signs of capitulation, people are pointing to the fifth highest vix over its 200 day. the number of 20 -day lows, 455 in the s&p. these are things you tend, tv trucks outside our doors this morning. >> when i saw, i'm not going to mention a particular channel but

when i saw them lined up, you see the local tv guys that, has been a good tell of a bottom. but i would pint out the vix above 40 as riskically produced a decline. there is another day tomorrow which might give you a better chance to buy. i don't see the euro going my way today but copper is going the way. euro is strong today. that's not been a good setup. we had a ceo who had stock down 20% who said china is up 7% in growth. i found that, i'm using a lot of s.a.t. worlds. i kind it chi her cal? >> you think he's giving in fantasy? >> i think yes. i think he's thinking it's fantasy island but it's fantasy land mass. >> he's talking about billiton

which we just heard about. >> he kept dividends and he had comments about minerals. if it wasn't go down, my bad. you should have bought everything up. my history is to say listen, i missed it. that's okay. i came out of here and said yesterday, i'm putting money in my 401 k. how could i be more seemingly wrong at the bell? but right today? okay. i didn't miss it. >> best buy far and away the market leader today. that's up almost over 16%. netflix close behind with an almost 8% gain. for a moment the number of stocks on the s&p that were down, right now there are two. >> well, that's not. you know, that's overaggressive like yesterday it was too negative. best buy had great things to say. they're talking about remarkable, much better than expected numbers. appliances good, televisions good, mobile phones good. demand for apple phones so good,

and apple watch. and speaking of retail, david bellings got a bid. >> that was a fairly large private equity well. >> when i shopped at belks i was not blown away by the merchandise. >> i don't know what they sell. >> kind of a general stuff. >> got it. >> i like macy's on maybe that's the next one. here's an example. goldman comes out today and pounds the table on selling boeing. i don't think that's a great sell, but that call will be out there all day. they're down there giving boeing the business. i don't want to buy boeing up the market knowing goldman is coming out and telling you to sell it. >> the leadership transition taking place at boeing. >> and today raising their 20 -year forecast for demand 5% from last year's forecast.

they see china's aviation tripling. >> i want that call to percolate so they knock down boeing to a price that's better. ambarella up 3. it was up 8 when i walked in today. >> right. price of oil keeps going down. i haven't looked at it in the last five minutes. there it is. it's up a little bit. you see, october. and so has exxon's stock price, of course, but up today. wti below $40. you have to believe that coupled with the stronger dollar, hence giving more buying power to the consumer. this has got to be a positive for the u.s. economy. >> i remember talking when russia was talking about in 1998. i remember talking to you and saying i don't know what the ruble has to do with the dollar and the answer was yeah, because i was not smart enough to realize now connected they were.

you get another chance. there will be a hedge fund that will come on or a fed guy that will say this is a chance to say. i want to get ahead of that. it's okay. >> housing will be the story of the day to some degree. total is out. orders up 12. earnings and revenue in line. we have kay schiller. we'll get new home sales at the top of the hour. >> someone is coming out and saying the total of the price of the houses they got wasn't as great as the previous quarter. all other commentary is positive. toll is a positive company. again, this is what i talk about. there's one line and people are seizing on it and sending the stock down. i say maybe when the market is down a little from here, we can get a little more aggressive. i want to be aggressive. i think it's a mistake. everything i suggested you buy yesterday, it's up, and you have to wait. >> how about the nice war

between jim chie notice and musk? >> today musk is out buying 124,000 shars around $40.48. that's a 4% gain. >> i saw that. i think solar city is an expensive stock. >> another name with high u.s. exposure. >> i know. look, i want a solar panel on my roof. i spoke to a utility guy about putting one on. i want the tax credit. that's a buy of stock and of a guy who is hated by the shorts and he has been a tremendous -- he runs his stock better than anyone else i've come across. he's a great stock runner. he's also a manufacturer but he's a great stock runner. >> he's a pretty extraordinary gentleman. >> he is. remember when we talked about if we should be jealous of him. >> i prefer not to be jealous. at our age, there's not that

much time. let's not bother with jealousy. >> it's inappropriate. >> yeah. >> as of this moment, it is the strongest rally of the year, but it does not make up for yesterday's losses. bob pisani is on the floor. >> it's a nice open. almost every stock in the s&p 500 are up. and i think the most important thing about today is we're moving and europe is moving independently of china. i want to show you the futures. something interesting happened. futures started moving up even before china closed. about 6:15 eastern time they had the announcement they were cutting the reserve requirements but our futures were up 20 points when that came out. it moved up a little bit more subsequent to that. we were rallying after china was closing down 7% and before they announced a cut in the reserve requirements. i think that's important to note. take a look at china. shanghai, morning session tried

to hold around 3,000, at that important level. in the afternoon session you see it fell apart closing below the 3,000 level, down 7%. europe has held up well from the open. everything is up a couple of points, three or four points. germany, france, and spain are on the up side. why did we get the bounce? we've been talking about levels of extreme sentiment i've never seen in a couple of days. the important thing is dramatically oversold conditions. we've seen heavy short positions and extreme sentiment volatility indicators. everything you could look at. the vix, relative strength indicators, everything is at extreme levels almost nobody's seen. it's not surprising we'll get a bounce. can we quantity fie it? yeah. we asked what happens when the s&p closes down 3 % in back to back sessions. that's a very rare occurrence. it's only happened eight times since 1980. one day later the s&p has been up 75% of the time.

the median return is 2.3%. that's today. a week later the s&p is still up 86% of the time. it means the biggest gain occurs the day after these rare 3% declines. that's now. that's right today. the biggest historically returns occur here. in the markets here, broad swaths of the market are up but the beaten up ones, the internet leaders that got sold off on friday and monday, amazon, and google and netflix and facebook are up. commodity stocks that were up but had a rough time in the next few days, free port and chesapeake are all up. the multiindustry names that have been hit bad on the china slow down concerns, tex tons and honey well all rallying nicely. and the banks down on concerns about low interest rate environments continuing are rallying today.

they're all up here. i share your comments and thaukthauk thoughts on best buy. they went out of their way to reference a strong performance in major appliances and big screen tvs and in mobile phones. that's electronics. that's their core business right there. they're saying their core business is doing really well. and that's not a typo there. that's buy up 14%. finally just want to highlight a guest coming up. the ceo of virtu. he'll be with us. he'll talk about yesterday's action, about volatility and the role of high frequency traders and trading in general. he doesn't come on tv and give interviews very often. he'll be talking with us at 10:20. >> he has a good news story to tell. i do want to return the focus a

little bit to m&a and monsanto this morning. interesting story continuing to develop as man sonsanto continu its surng of san jen a. i'm picking up resistance to the deal itself from monsanto shareholders. i can firm monsanto increased the offer to 470 swiss franks. much of the increase is cash, roughly $4 billion increase. almost all of it in cash. they also increase, was already a very large breakup fee because san jen a has opposed this in part because of anti-trust concerns. they go from a $2 billion break fee to a $3 billion break fee.

don't know if this will convince them to enter into negotiations. something it has successfully resisted thus far despite the fact that monsanto has kept knocking on the door. a couple of large shareholders. i'm starting to believe they are actively going to oppose monotanto's continued pursuit here. and i would not be surprised if, in fact, they were in continue with or soon to be with the board and management telling them enough. what's their opposition? it's simple. you can look at it right there. your stock price. look where it's gone during the time you've been pursuing this. the world has changed. why not just buy back stock? why are you continues to pursue syngenta in this environment and now at a price that is higher than warranted. why not just go into the market and buy back your stock?

you're talking about a balance that's debt represents one turn of ebita. i'm hearing opposition from large monsanto shareholders saying it should stop right now. by the way, no stranger to them. october is when the window opens for board nominations for monsan monsanto's staggered board of directors. growing opposition in the shareholder base of monsanto, jim, to what is their continued pursuit of syngenta with a higher offer. maybe they'll come to the table. they're going to need a shareholder vote from monsanto, and that might not be easy. >> that's amazing. people are fed up with the endless decline. >> they're wondering what world these guys are living in. it's one thing when your stock is 120 and another thing when

it's lower. >> and the food industry is turning against gmos. a core business of monsanto. you put the ceo of chipotle on, they're not bullish on monsanto. i like your activist. they ought to rethink monsanto and protect their stock. >> it is $95 a share, not the 120 it was when they started. >> i didn't know that stock had gall fallen like that. >> let's go to rick santelli. >> you know, a lot of volatility yesterday. the distance going from close to close really underscores the volatility, and at the end of the day, getting off and getting on the roler coaster close to the same spot may have more technical significance than the ride you took inbetween. if you look at a one-year chart at the middle of the curve,

here's what i want you to pay attention to. look at the low yield and look at where we're currently trading. it's a difference of about 25 basis points. now look at the other end, the longest end of the curve, 30 -year bond. distance of about 60 basis points. that's something to pay attention to. many traders are playing a lot of the issues of the day whether it's the fed or china or europe's growth, or trade generally recalibrating through yield curve trades and inherently through intraworld against other curves. to that end, let's look at a two-day of our tens. never had a sub 2 % close. we dabbled with it intraday yesterday. bunds, up 13 basis points to a three-week high. look at the one-year chart. a more pronounced move. if you go back to what i like to look at, they calibrated

together, we've broken the streak. we're in the mid 130s after being in the 150s for months and months and months. that's significant. now, what effect on the currency in you know the euro weaken. look at a two-day of the euro, you can see that. look at a year to date and it starts to jump oat you that the 116 handle was significant. >> rick, thank you so much. when we come back, a lot more on this morning's market rebound. officially the best rally of 2015 for all the averages, but will it hold? we're back in a moment. these two oil rigs look the same. can you tell what makes them so different? did you hear that sound? of course you didn't. you're not using ge software like the rig on the right. it's listening and learning how to prevent equipment failures, predict maintenance needs, and avoid problems before they happen.

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>> dow is up 355 points as buyers come in. components in the green. all but eight in the s&p are in the green. we'll get to stop trading with jim in just a moment.

look, i don't like to buy stocks up. i'll give you one because i feel the momentum. citi calls out today the best defensive idea. bank of america recommended it. it's got the most aggressive buyback of any stock i follow. the auto parts business is in

major bull market. someone wants to buy something because they feel like they have to buy something. that buyback will be in there. >> what you don't like today is the stronger dollar. >> yeah. we've had a couple good days because the dollar has come in. this is not my favorite day. i like that whole thesis of raising numbers, general mills and kellogg, but you needed to see the dollar continue in its weakness. let's wait a little. maybe the dollar gets strong but that is a sign to me, the dollar is -- the dollar gets weaker but this is a sign that you have to be careful about a fed governor about to say something. >> what's on mad tonight in. >> you like that? >> yeah. heard it a couple times. >> i'll give you another one like auto zone. when you go out to buffalo wild wings, that is not kfc in beijing. it's in the heartland. i have the ceo. identify list of stocks that you

don't want to own that you can sell and i'm happy to share it tonight on mad money. >> we'll see you then j jim. >> i've been waiting for good e-mails. i got nothing. >> they can't all be gems. when we come back, breaking news on new home sales and consumer confidence. dow gains are slipping a bit. down 296. you're armed with a roy new jansport backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great. seven out of ten power outages in the us are caused by weather. but utilities can now predict where the power will go out, within a few city blocks.

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♪ good tuesday morning. welcome back to "squawk on the street." the buyers coming in. dow is up 317. not quite to session highs. oil catching a bid at $39.32 and now the data begins. >> there's a lot of data. we'll start with july. new home sales, 507,000. it's seasonally adjusted, annualized. we were looking for a number close to that last month. how does 507 fit in? the high read for the year was

february at 545. march was low at 485. it doesn't change the 2015 extremes. the next number is an august number, consumer confidence from the confidence board. 101.5. much better than expectations, and last month's slight revision 90.1 to 90.5. 101.5, how does that stack up? pretty well. it's the second-highest read of the year. 103 .80 was the january welcome into 2015 and the last point here is richman fed manufacturing, unchanged, an august number, from a sizable ten expectations. missed there. last month's 15 unrevised. 13 is the high water market. we need to dig a little deeper into new home sales. i think i have the exact person.

washington, dianna, what do you see? >> i'm looking at prices right now. look, this is a miss but it's a very slight miss. the street was looking for $510. up 5.8%. we got up 5.4%. not terrible. price is what's interesting. you're seeing a median home price of $285,000. that's almost 2% higher than a year ago. we've been talking about the builders and their pricing powers. they missed on the street's expectations but they raised their average price to the highest in the company's history. we see existing home prices continue to soar with kay schiller up on the national level and buyers are starting to see sticker shock. red fin had a report claiming buyer demand is down for the fourth straight month because of higher prices and limited supply. what i like is we're seeing supply at a 5.2 -month supply nature that.

we need to see housing starts. we saw a bump in july in housing starts. we'll be looking for more in the fall. it'll be about supply and pricing. >> $286,000 for the average price. thanks very much. dianna in washington. the data not doing much to disturb the full rally. the dow jones, not a full recovery from yesterday's nearly 600 point selloff. 2% gains across the board. this after china cuts interest rates again, fifth time in nine months. it's also lowered reserve ratio requirements. that was the third time it did that this year. let's bring in hank smith and a global economic adviser over at penco. we'll start with hank on the markets. is that it? we got the correction everyone was waiting for and expected and now stocks can take another leg higher or is this a relief rally from a brutal day yesterday? >> certainly, judging from.

>> hank first, go ahead. >> that's okay. judging from previous corrections which -- we haven't had a correction in four years but previous pullbacks, they've been short lived. i think we have a little more volatility to go. i wouldn't be surprised if this bounces around but we do firmly believe this is just a correction. it is nothing more. it's not the beginning of a bear market. bear markets occur in anticipations of a recession and there are no signs of a recession in the u.s. going out 12 to 18 months. >> you agree, more volatility ahead? >> well, i think the market got overly emotional in the last few days. i think the markets didn't like the uncertainty about china's outlook and china's policy strategy. i think a lot of the uncertainty has been removed into the rate cut, account cut in bank reserve

requirements. china is returning to more traditional monetary policy tools. they are easing domestic monetary policy. and i think that's much better than intervening directly in the equity market. that was an unconventional policy that obviously failed. we've now pack to traditional policy. i think that's good news. >> do you think they're doing enough? they're in the middle of what's a market melt down. people are worried about a -- >> i think an earlier rate cut would be better but better late than never, and i think this is only a first step. we think there's more reserve requirement cuts coming. potentially also more rate cuts. and, again, we had a depreciation of the currency which i think will continue. if you take this together, domestic monetary easing. i think that will also help

global sentiment. >> to stand here yesterday afternoon on the floor of the new york stock exchange and to watch the dow going lower, 600 points on very heavy volume was a very sobering experience. because we have a bounceback, do we eradicate the concerns we had that brought us down 10% no that we've simply repriced, can we get back to selling people stock market product? is that the idea? >> i think you have to look at the internals of the market, and even prior to the sell off of the last three days, you had a break down. you had many bear markets and a lot of individual holdings. many multinational industrials and even some consumer names had already experienced a bear market. but this is what occurs in corrections. i think the bull market is still intact. and i think you buy on these dips. if you have cash on the

sidelines, you commit that cash on the dips. you're never going to get the absolu absolute bottom correctly. we all know that. >> for sure. >> but would you rather own a 10-year at 2% or 3% blue chips that are being offered today? >> i understand, and who cares can what i think? but people care with dennis lockhart thinks who three weeks ago as a voting member of the fed came out and said to everybody the bar is high to not raising interest rates in september. now he walked out yesterday and very distributely walked that back to a rate rise before the end of the year. if the fed is shifting, why is your view of the fundamentals not shifted? >> well, look. i think the backdrop remains and will continue to be lower rates for longer and even when we do get that first rate hike, there

is consensus that we agree with. it is not going to be a series of hikes in gradual steps like previous rising cycles. it is going to be one and done for a while. we're several years more into a low interest rate environment. i think that will be a good backdrop for the market. >> hey, there are so many opportunities in terms of beaten up sectors across the world. you're at pem koe. where are you looking? equities, boindnds, china, currencys? >> well, first of all, i think this is an environment where you have to be very selective. going all in in emerging markets, i think is not the right strategy. for a long time we have said you have to look at emerging markets case by case, country by country. in terms of broad asset

allocation, we favor stocks over bonds, and in terms of currencies, i think we've seen a big selloff of the dollar against the euro, and against the yen. and i think given that we now have action in china, given that the ecb may do more, if the global economy doesn't recover soon, i think there's an opportunity to go along the dollar versus the euro at these much lower levels. >> you do? from here? >> yes. from here. so, again, i think the dollar has room to appreciate against the euro. the u.s. economy looks very solid, and we may get more action from the ecb at some state. >> do you think we'll get a fed interest rate hike this year? >> i think the fed is clearly eager to stop the normalization process this year. as you know, sayra, the market s pricing in a 10% probability of

a hike in settlement. i think they'll start normalizing this year. it will be a shallow path toward what we call the new neutral. a 2 % fed fund rate. i think they want to start normalizing and i'm pretty confident they'll do it this year. >> thank you for joining us. >> up next on the show, even with today's rebound in oil, it's down nearly 20% during the course of the last month alone. we'll talk to a top energy analyst who says this is the biggest buying opportunity he's ever seen. "squawk on the street" will be right back.

oil rallying this morning, finally getting back above 39. it's up 2.5%. trading close to the 6 1/2 year low below 40. ted, good morning to you. good to have you with us. >> good morning. it's good to be here. >> dropping to the low teens in the next few weeks? do i have that right? >> the fundamentals of the oil market are still not sound despite today's rally. you still have saudi arabia producing and iraq producing and the problems in china. despite the fact that the stock market is up today does not mean

the problems in china are over with. fundamentally, there's a lot of issues with oil. >> you say it reminds of you '97 when we went to $10. all that said, you believe it will be one of the biggest opportunities of our time. >> that's right. i think back in the late 90s it went down to nearly $10 a barrel. but then it came back up and we had a very strong economy. my view is that this oil decline is going to represent one of the biggest investing opportunities of our lifetime in this generation, and the reason for that is because oil represents a massive benefit to the whole world. there's about $6 billion a day of money coming back into the hands of nonopec producers from the lower oil prices. that's eventually going to go to the hands of consumers. they're going to spend the money

and the companies will. >> we've been waiting for that all year. while we're serving the damage from this price slump for the price of oil, who is getting hurt the hardest? we talk a about saudi arabia, iran, the u.s., all big oil producers. who's feeling it the worse and what shape are the economies in? >> i think certainly the oil companies are getting hurt, first of all, and people that work for them. and then also the middle eastern countries, saudi arabia, venezue venezuela, they have to fund massive social programs. eventually the pain is going to be too much. one of the goals they have is to limit the amount of new technology that's going into the sector. the u.s. has been at the leading edge of new technologies and they want to stop that, because it increases production so much. one of their goals is to knock that out and they're being hurt doing that.

but eventually if you look at history and just look at the economics of their own situation, they're going to need to cut back production. >> it's a very powerful thing to say it's going to be a huge rebound and there may be many people who believe that to be true. the question is how useful is that, and how do i play that given that the premise of a rebound in oil, as you infer, is basically that you're going to knock out producers. i think you're in fixed income. is it immediately obvious what people should buy been the sector given that some producers are pushed to the edge or they will have their businesses curtailed. others may be taken out. to the extent the people may not be able to profit from that. >> i think the people that are going to benefit from this are obviously going to be the people who haven't got so much money in it that haven't lost as much. the fact that i come from the fixed income background is important at this point.

the key to being successful in the coming environment is going to be to understand the credit and the fixed income of these companies to know which ones are going to survive and do the best. at sdak international, we're positioning ourselves to take advantage of this rally. the timing is not exact. this is going to happen over time. it's not going to happen immediately. but people who are able to figure out which companies and which sectors are going to survive, which ones have the strongest balance sheets and the best technologies and start getting involved in these over time are going to make a lot of money. >> ted, we're going to have to wait and see. it's a provocative call. ted joining us on crude. thanks so much for your time. >> thank you. >> when we come back, despite a turbulent 24 hours, one ceo says his firm is made for this kind of market. the ceo of virtu coming up after

the break.

>> 21% decline in celgene. >> i have to make phone calls. >> down 1,000 points. i think that takes your breath away. >> the dow is down 226. you say it may as well be positive compared to yesterday. >> my level of fear really isn't that high. i'm a lot holder than i was this morning. >> we're down by more than 4% as we're looking at declines across the board. a very different picture from an hour ago. >> five minutes ago we were down over 500 points. it's been that kind of day. >> the dow going out with a decline of 584 points. that could settle out a little

bit. >> i've been the floor reporter for 18 years. i struggle to think of a weirder day than we've had. >> for sure an historic day yesterday for everyone concerned. not everyone was hurt by yesterday's big market losses. high frequently trading firm virtu financial says it was one of their biggest days. the big question, were they partly responsible for some of the trades at the open. bob pisani is on the floor with the ceo of virtu financial in a first. >> i appreciate you coming on, doug. you don't give many interviews. yesterday you said was one of your biggest days. can you confirm that for us and tell us why it was such a big day for you. >> we were very active yesterday. we traded over 16 million times yesterday. in average we do between 4 million. >> four times number the value. >> we spent a lot of time and resources building a system that

is a -- >> did you make a lot more money in do you make more money when the markets are more volatility in. >> it depends on the volatility. we put risk out there and transfer risks from buyers to sellers. some types of volatility can be painful and difficult. in a long sustained day, we had 24 hours of volatility. it started as the sun was coming up in singapore and we traveled across the world throughout the day. >> 16 million trades that you had. what percentage of them were profitable? >> well, generally we make a little more money than we lose in our trades. about 51% of the trades were profitable. we traded millions of times and lost money too. >> your point is you win about 51% of the time, and that's enough to give you the profitability in the winning days? that's how you do this. >> that's correct. we're a scope and scale

business. we've built a large technological plan that's able to scale across a lot of questionographies. we're trading and making markets in 225 markets and 35 countries every day 24 hours a day. >> people turn around and say it's the machines, you people, you are part of the problem causing losses for people who are out there. how do you respond to that in what do you say when people feel you're partly responsible for the volatility? >> as an investor, i'm not happy about what happened yesterday. we're much happier today and we probably won't get credit because the market is doing a lot better today. we'll make money and we're providing two-sided liquiditity all day. we don't cause volatility. we absorb it and soften it. we transfer risks from natural buyers to natural sellers. we bought and sold jpmorgan up

and down. >> opens at 57 and goes to 50 within a minute or two. a lot of people said how could that happen, a company of that size? how do you explain that? >> it's difficult to explain. obviously there was tremendous selling pressure coming into the market. shanghai down, major indices in europe down single digits. look at some of the volatility downs, limit up and down which worked well yesterday. maybe we should tighten them up around the open. i think it's a good idea to prevent a situation like that. >> let me ask you about exchange traded funds. we saw a few unusual pricings at the open. how do you account for that? is the structure of the etf business sound? >> they have an asset class. they're sound. we're a significant market maker. we price and market make in etfs every day.

it's hard for us to come out with a price when components are halted and there's not natural price discovery. in that instance, we have to widen out our prices because we're not sure where true value is at that moment in time. >> you feel the structure of etf is sound? >> absolutely. i have a big portion of my portfolio in etf and i'll leave it there. >> you tell me you're about 10% of the trading in general electric trades. >> yes. >> you're about 3.5 million shares a day you trade. how much money do you make in general electric in a day? >> they're competitive. we are running strategies on 3,000 individual stocks in the united states alone, and hundreds and thousands more in the u.s. and europe and asia. we're making some some days less than $1,000 on ge. >> you're 10% of the volume and you make $1,000 a day or less in

general electric? >> that's right. it's a competitive business, and the bid offer spread has narrowed. it's sub penny for us. >> but you do with -- >> 35 countries. it's a scope and scale business that we build. >> 51%. 51% is how much you win. it's roughly like that. what is the secret sauce in that's what people don't understand. how do you get that percentage? >> you have to be good about managing your risk. we don't bet. we're not a directional firm or a predictor of momentum. we make the tightest bid and marker. we want to tight bid an offer. we want to attract liquidity and be on the inside. >> we have to let you go but thank you for coming. will you come a little more often? >> absolutely. i love it down here. >> and you have a the designated market down here on the floor. thanks very much for joining us. >> thank you.

>> huge response to that interview right there. bob pisani. when we come back, china's stock market losing 25 % in just a week, wreaking havoc around the world. the dow up to 60. 260. mornings. wonderful, crazy mornings.

we figure you probably don't have time to wait on hold. that's why at xfinity we're hard at work, building new apps like this one that lets you choose a time for us to call you. so instead of waiting on hold, we'll call you when things are just as wonderful... [phone ringing] but a little less crazy. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. good morning. here is your news update at this hour. the congressional budget office is projecting a federal deficit

for this year at $426 billion. that's the lowest short fall of barack obama's presidency. without any action by lawmakers, federal deficits will start rising once again. >> americans are less happy with their cars and trucks than at any time in a decade. according to the american consumer satisfaction index, that's because they're getting sick of dealing with recalls. a powerful typhoon is making land fall on japan's southern island this morning. people were ordered to evacuate. the typhoon brought about 4 inch an hour. a sad note here. justin wilson has died from severe head injuries that he suffered from a crash at pocono raceway in pennsylvania over the weekend. he slammed into a wall after he was struck in the head by debris from another car. this is the first death of an

indycar driver in more than four years. he was only 37 years old. on that sad note, that is our cnbc news update this hour. let's get back to "squawk on the street." >> thank you, sue. welcome back to "squawk on the street." the dow is now up about 254 points. off the highs. china's stock market is the epicenter of recent global decline. susan lee is live in hong kong for us tonight on what's happening there. late night, susan, but we've all been working 24 hours with these markets. >> that's right. very interesting markets. today the shang crashing through 3,000. it's a psychologically important here. they pulled the trigger on something big sending a signal of confidence to the markets because of the fact that they stood on the sidelines the last few trading cells. maybe they're happy to let

market forces dictate but not the case. tonight they cut interest bay 25 basis points. they say it frees up $101 billion immediately into the financial system. this should lubricate the markets and the fact that china did this on a week day, usually they wait for friday night or weekends to cut interest rates. the fact that they went ahead on a tuesday evening means they want immediate market impact. and we saw some encouraging signs today during the regular session. some markets rallied today in the pack rim. we saw big advances in australia, malaysia and even the fact that hong kong ended higher by three quarter of one percent, maybe a floor has been set out here and maybe the selling might be overdone. goldman sachs says they're remaining overweight on china. they say things are oversold because you're assuming gdp of 4

%. that's not what they're seeing. you buy oversold quality names. you buy the fiscal stimulus and the interest rate cuts and the state-owned reformed napmes and look for the high yielding stocks. there are buyers going in which is encouraging. >> thank you, susan. with view from hong kong. the shanghai now down 25%. it's lost a quarter of the value in one week. joining us now is china expert, john rut ledge, welcome to the program. good morning. >> good morning. how are you? >> so i'm interested in the fact that they've cut rates by a quarter of one percentage point and the bank reserve requirement by half of one percentage point. it may allow $100 billion to go into the system. the classic system is to ask you what difference that makes. i'm going to ask you if you or

the pboc or anyone know currently what difference that will make with the chinese economy as it is in the straits that it's in and with the lack of transparency we have. >> i think it'll make no difference whatsoever, and the reason is simple. the chinese economy is obviously weak. the weakness is centered in industry. chinese currency is up more than 15% even today against the other emerging market currencies in the last year, and their biggest customers are weak. the u.s. and your. no secret there. in the china, the reserve plays a different roll than in u.s. and europe. when capital flows into china, it goes to the bank. it doesn't show up as credit. when capital flows out, they lower the reserve requirement. what they did today is an acknowledgment that large amounts of capital are leaving china which we know already from the stock prices. so i think the economy is weak, and i think that at some point

there will be an opportunity to buy these companies for half of the prices today. >> yesterday apple ceo took the unusual step of e-mailing our very own jim cramer to suggest that apple's business is strong in china and they're accelerating structurally. if koreas aceos are able to mak sorts of public statements, can we worry less about the stock market falls if it's about direct investment and profitability on the s&p 500. >> i believe the ceos are not going to make those announcements. i believe they are not, according to the regulations from the sec. i think he made a big mistake, but i think the markets are fundamentally pretty good in china for a producer like apple. there's a growing middle class. incomes are rising 8% on the year and so forth, so i feel positive about apple stock, but i think that e-mailing a company

information to individuals is a bad way to run a company. >> let's talk about the importance in the global economy. the last statistic i saw was 15% of global output but when it comes to global growth, china is a much bigger contributor. can you give us some size and scope into how important china had been for the global recovery from the financial crisis and what this slow down and dropoff means for the global economy? could we tilt back into recession? >> china has been more than half of global growth for the last ten years. and their growth is slowing, but so is growth other places as well. global growth will be down this year as everyone knows. the chinese weakness is in the industrial sector. they're trying very hard to stimulate their services sector to make this conversion from heavy metal into labor or job

producing growth. but i don't think that the chinese slow down is going to -- is going to be very large in terms of the numbers, and i don't think you'll have a big impact on the u.s. and europe exempt for capital goods exporters. so if you're looking at stocks in europe, you don't want to own germany or italy because that's where capital goods come from these goods. that's a negative. >> which is why germany went go bear market territory. it's slightly recovered today. >> and you're something important and reassuring for a lot of people. one last question. what is the systemic problem from them devaluing the currency and the pressure that's put on everybody else's pegs and more importantly around other exporters in asia. unless people are directly invested there, what do you think thereby kickback to north america from what's going on?

>> i believe that the fight you're talking about is really an inside the club fight among the emerging markets. china was pegged to the dollar and as the dollar rose over the last year, our mp rose against the other rising markets nature put chinese companies at a competitive disadvantage. that competitive disadvantage is also because chinese wages have been growing. i don't think it's going to go away. chinese devaluation was only 3%. it's a tiny, tiny ripple in the currency. i don't think it was to get to the market. i think it was to acknowledge capital outflows and i think the chinese central bank is ripe for a quantitative easing program. slowing china and still falling markets, they're not going to be fiscal stimulus next time around and build railroads. they're going qe, and i think we should look forward to much bigger announcements from the chinese government than we've seen. officials there are worried about the stock market and about

growth. >> i think we'll see you as soon as that happens. thank you for your time. >> thank you. >> as for things at home, what a difference 24 hours makes to these markets. dom is back at hq with big price action again. >> on any other day, perhaps a 250 to near 400 point move in the dow would be a big deal but after what we've seen for the past couple of days, let's recap things before we get you a look at what's happening. in the corner of your screen you know the dow is up 272 points. the first 90 of minutes of trading yesterday, when we walked up and down by 3,000 points in just the first 90 minutes of trading for the dow, that near 1100 point move, up 250, up 600, down 350, up 160. this entire first 90 minutes really gave investors something to think about with regard to risk in fact marketplace right now. if you take a look at the real milestones for what happened,

that big move down just moments after the open yesterday, and then all of sudden you saw big blue chip names all down by anywhere from 13 % to 20 plus% and you saw a nice bit of stabilization helped along by strength in certain sectors like consumer discretionary health care and consumer and technology. only to see things lose steam in energy and materials and financials and we finished about 588 points lower. all of that context for what's happening so far. a two-day chart, you can see that was yesterday's move. we've found that stability, but we lost over 1,000 points in the dow last week. we lost another 1,000 yesterday before closing down 588. but we're getting back just about 300 right now. a long way to go for a lot of traders. >> up hill climb to get back to the levels. thanks. we're going to stick with the markets as dom mentioned. rallying off the highs.

up 300 but we were as high as 392 earlier. all major industry groups in the green. technology and consumer discretionary in the lead. tudeng of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great.

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>> in these wild times where are the pros finding value? there's more "squawk box" coming right up.

303 points higher on the dow. let's go to chicago for the santelli exchange. >> thank you, simon. when we get kay schiller and new home sales, that can only mean one thing to me, mark hansen is my guest. >> thanks very having me. >> let's look at this morning's data kay schiller new home sales. time heals all wounds, policy may make a difference.

i can't say but what i can say is today's number second weakest of the year is a far cry from 1.4 million in 2005. your comments on both of the metrics. >> i don't likie looking at the peak or trough. 507,000 is not a durable recovery. you can't get through 30 minutes of financial television or any sort of online web journalism without seeing how the housing market trade is the big huge trade to carry us into the end of the year. however, that's based on historical low rates in q 1 and q 2 that surged and cut off demand. we're seeing that in the pure play. end user builder demand doing on right now. tolls suffered from the higher rates in this morning's earnings.

we're getting calls wanting to know about this big housing and recovery trade. there's analogs. there's the 2009 analog for the home buyer tax credit. there's the 2013 analog when housing was supposed to be doing 650,000 new home sales. what do we have in we have 500,000. something is wrong. something is broken with the end user fundamental home buyer in america. not the resale buyer, because that includes foreigners, flippers, fraud centers using second vacation homes to rent out on these new online portals. there's something wrong with pure play end user builder demand in america right now. >> we've often talked new home sales the money ball when you're monitor home sales but after listening to that and looking at market volatility and the sub topic to yesterday's volatility has to be fed normalization, 2015 is the only year in the

last hand full where the stock market isn't spending pretty much all its time in positive territory, so if housing disappointed you during historic low rates, what's normalization and market volatility going to do, final half minute? >> we know housing responds well when rates plunge. when rates go up or the stimulus is removed, housing suffers. it goes into a hang over. housing is headed for a demand hang over in the back half of this year. not what people are expecting. after the past week, a lot of the stocks have suffered technical setbacks and this is not the same housing market we were looking at two weeks ago, i guarantee you that. >> mark hansen, thank you. sayre a sara, back to you. >> as investors worry that the chi china turmoil will hurt global trade, stocks like fedex are

getting hit hard. we'll talk to the ceo at dhl express. mornings. wonderful, crazy mornings.

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delivery in some european markets with its bid to buy tnt express, earlier this year, europe's shipping lead certificate making its own push for growth in the u.s. dhl making a major investment in north america in its hub in cincinnati, ohio. joining us, stephen fenwick, ceo for the american division of dhl express. to the topic at hand -- global growth. when global growth slows, the shipping and supply logistics companies get hit pretty hard. how bad is it going to be? >> i think the part is a bit overblown what's happening today. and yesterday. from a global point of view we've seen good growth. i think those fundamentals are still there. i know there's lots of discussion about china. but china is still a big export area for us and we're seeing good growth. >> what are you seeing exactly in china? we see the numbers slowing down and we see the markets acting crazy with some of the policy moves coming in to fight it.

what's your business like there? >> good. china is one of the strengths of asia, asia is a big strength for dhl express around the world. we've seen some changes and there's a slowing overall, but overall we're seeing good moves. interestingly what we're seeing going back the other way is where it's growing. interestingly china is buying from the states. >> we see emerging markets selling off, we see the ripple effects, you're not bracing for a big hit to global trade? >> no, we see where we're going. we're a network business, in every country in the world. and we're ahead of the opportunity, we trade up and down where it's good and bad in the world. >> you can't fly between as we were discussing in the break, you can't fly direct between u.s. airports, i'm trying to think, i'm trying to get a simly as to who you are. and i guess given that you're owned by the germans, you're like the postal service being

owned by telecom. >> i think the what you need to, keat thing to understand is we're about international trade. we're not about domestic usa. we pull out of that a number of years ago, five years ago. so our whole strength is the fact that we are based on international trade. now, we have ups and downs. >> it's a funnel traffic out of north america into the network around the world? >> and that's why we're investing all our money in cincinnati, so we can have more ramp, put larger planes on the ramps. >> things are changing so fast. usps, did you see an article in the "journal," they're doing daily fresh fish deliveries. this the you united states postal service, trying to extend what they do amazon, same-day deliveries. everything seems to be changing. i kbes you're aloof from this, up here on the international site. is this a fundamental structural shift in the way we deliver things around the worrell? >> i think domestically, you're

absolutely right. i wouldn't say we're aloof from it, but we're above it because we're international. we have the balance around the world. where we don't just rely on one economy. we're rely on the world. >> you can't go and do an uber in india. and teach them how to do this at the local level? that wouldn't interest you? >> we have a domestic business, in another division in india. it works extremely well. but it's not our expertise, domestic is an expertise about volume. >> how competitive is it for the e-commerce business that continues to boom. simon mentioned the u.s. post office with the amazon relationship. what are you seeing out there in. >> it's huge. interestingly enough our second biggest defendant nation out of the usa is australia. the currency win. and now it's gone backwards. going to china is huge for us, out of the states. it's probably not what you would think. >> the fact that you appear to be australian. >> very good point.

i hope everybody is understand the accent. >> i happen to be a cincinnatian. i'm curious why you're choosing cvg, when i go back there, it's a ghost town, everybody is pulling out. >> no, it's not a ghost town. >> we put 108 million in there in the next phase. we're fully behind cincinnati. >> all right. global hub. thank you very much. >> absolutely. >> zechb fenwick, cho of dhl express americas. we send it over to "squawk alley" and kayla tausche. >> we are continuing to watch this market rally, the best open for stocks all year. the hunt for value is on, a little bit of risk is coming back to the table and the tech sector is on track for its best day since december. snapping a five-day losing streak. we'll have more about what is moving in technology. one of the biggest components, apple a big upgrade on the back of news our jim cramer broke yesterday. why wells fargo is bullish on

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11:00 on wall street and "squawk alley" is live. ♪ ♪ ♪ ♪ welcome to "squawk alley" for a tuesday, joining us today, kevin o'leary, chairman of o'leary funds, investor on shark tank and in houston, mark stoelt, a chief market strategist with oppenheimer we start with the markets, major averages rebounding, the dow up 325. not far from session highs after yesterday's dow drop of more than 1,000 points in the morning to close with a loss of nearly 600 points, it was the