one more input that goes in. next week a two-day meeting. look at oil prices. they've been under pressure. this comes after what we've seen all week long, down about 2.7%. >> is it a four-day week? >> back on monday. >> i'll be here. >> see you monday. right now it's time for "squawk on the street." ♪ >> 14 years ago on this day, the 9/11 attacks, the day the nation remembers today and will never forget. good friday morning. i'm carl quintanilla with sara eisen and david faber. jim cramer is off today. in addition to the moment of silence here, in about 20 minutes we'll watch the market. a quiet end of the week in china and japan.

august ppi unchanged and oil down more than a dollar has goldman says its bear case for crude is $20 a barrel. futures in the red as we look ahead to the fed next week. >> and the new oil order, goldman gets bearish on crude prices. >> and kroger out with results of beat. the stock is moving higher in the premarket. >> first up, oil prices falling after goldman put out a note saying the global supply glut could push the price down to $20 a barrel. cheaper gas offsets the price of your food. futures are getting lower as we wrap up a volatile market week. and david tepper said he's not as bullish as he could be on stocks. >> i'm more bullish. it's valuation. today the stock market on, call

it, next year estimates is 15 times earnings. the earnings yield in the stock market is something approaching 7%. this isn't a 2 % slightly more than a 2% ten-year environment. that's about the widest spread. you can earn a much higher and the expectation over time should be that the equity yields will increase as companies report over time. report higher profitability. >> interesting we've heard from a lot of the big names this week alone. buffett, lee cooperman, tepper and now ackman. >> everyone saying the economy, those valuations are all of a sudden becoming a big concern. interestingly enough, we are looking at an up week, and if we stay flat or positive, this week could be one of the best in several weeks for u.s. stocks even though it's holiday shortened. >> if the dow closes the week

higher, it's ten consecutive weeks for the up down, up down. >> volatility. we are going into a big week on the fed, and how to play the markets ahead of that. joining us now, president of wells fargo, and department head of u.s. economy at bank of america merrill lynch. daryl, how do you take positions ahead of the federal reserve meeting next week? every fed meeting is anticipated, this one even more so. >> well, certainly we are only five days away, and the fed and the markets don't know where it's going. if you look at the u.s. economy, you now have more people employed, making more money, producing more goods and services, and spending more money than ever before in absolute dollar terms. if that's not a recipe to start bringing the fed back to the table, i'm not sure what is. >> michelle, you think there will be a 25 basis point hike next week.

why do you think that when the market isn't convinced? >> we think so. obviously, it's a tough call. i would say just look at the data. we have seen a considerable amount of improvement in terms of labor market. gdp growth tracking higher. i think where it becomes uncomfortable is how the fed are thinking about the risks, the risks from abroad which have become a lot more apparent, and then also the distortions or the volatility in the markets, how uncomfortable will the fed be starting a hiking cycle given market reaction. >> i don't get it. they have a great excuse not to do anything. they're missing on their inflation mandate. we just got ppi this morning. unchanged. there isn't price pressure in this economy. >> you're right, and remember, the fed's primary mandate is financial stability on top of the interest rates and certainly inflation. so i think they really our estimates still tip toward later in the year and not september, but to michelle's point, it's a

tough call. they will be very aware of the risks because when you come off of a zero point, if you go to 25 or 50 basis points and then the yield curve flattens, they could have to go backbackwards. that's the last thing they want to do. >> we keep going back to what's the harm in skipping this time if they change their minds or decide they regret their decision j th decision, they only have to wait seven weeks. >> that's true, but i think the communication becomes difficult. the fed does not want the market pricing out rate hikes if they don't go in settlement. that's a risk. and they don't want to seem like they're tied to what the market is telling them to do. i think the discussion would be inflation is low. the data recently showed

continued low inflation, and perhaps they're getting uncomfortable about that. we could see that they revise down their forecast from medium-term inflation, and maybe that justifies a slower path of hikes even if they begin in september. >> what's interesting is he used to come in in recent weeks in the morning and look at china and japan and europe, and we would follow. europe is down now three quarters of a per september. this week it's been different. the u.s. isn't going in the same direction as europe and china, some of the asian markets. why is that? >> it's a good signal. we're breaking the correlation. we're not, certainly to the point about lower oil prices, you get parts of germany and europe and parts of asia that are very affected by the prices. us, not so much. we're looking more at to the earlier point on "squawk box" this morning with bill, valuations are reasonable. the sweet spot for equity is long term are 2 % to 3% gdp

growth and 1.5 to 2.5% inflation. we are there right now. we don't think the highs are in for this recovery. we'd be tilting more toward cyclical sectors than defensive sectors at this point. >> we'd love to get your take on this goldman note today. they argue we've never seen supply grow and the dollar increase like this together ever before. and when you couple the access to capital, the only way we're going to flush this out, this supply, is to go to storage capacity and where everything comes into the basically your cash costs and that's $20, they say. does that make sense? >> i think, obviously, we're seen commodity prices come down at a rate that surprised a lot of people starting last summer. there's risks that we can see a further drop in commodity prices. i like to think about the drivers on the demand side because i don't have as much

expertise on the supply side. we have seen emerging markets slow. there's concerns about further weakness in china. if that showed through and em looks weaker into next year, you could see further downward pressure on commodity prices. >> chevron got an upgrade today that we'll talk about later, but is it time for the energy stocks to rally and even if oil continues to go down, shouldn't you be looking at the companies at these levels? >> well, we think the solution for lower oil prices is lower oil prices. you have to work through that excess supply dynamic. 12 months to 18 months into th initial decline is doing that. it's probably early in the energy sector because the earnings lag the moving in the commodity. goldman, that is their bear case. if we get to $20 oil, something is off the rails. china or we're in an inflationary type move down.

we don't see that as a base case. >> they don't either. the >> their point is the possibility is increasing for $20, but it doesn't mean it's the base case, and i think investors need to be aware of that. i think there will be a point where energy looks attractive, maybe just not quite yet. >> so you like the cyclical sector. you're talking consumer discretionary, technology. >> and we like industrials. we think industrials because of growing global command, particularly in europe and parts of asia can do well and valuations are cheap. they've been beaten up hard lately. >> what's going to be the most important data point that would signal they will raise rates before the end of the year. >> continue to look at jobs. if the next few job reports after the september meeting come in strong, above 200,000, if the unemployment rate continues to

fall, it's possible we're at below 5% at the end of the year. and i would also listen to fed language, the fed communication. one of the things fed officials have told us is that although inflation is low, they think a lot of the slowness in inflation is transitory due to external factors, and they're continuing to look at what's happening in terms of slack models. if employment comes down, they'll be confident inflation will turn higher in the future. >> thanks for joining us on the markets and the economy. kroger did just report earnings in the last half hour. 44 cents a share beating wall street's estimates. the biggest grocery chain is walmart. kroger is the biggest by sales if you take out other items. this is the 47th quarter in a

row that kroger has managed to grow same-store super market sales. guidance point, took it up to 4 and 5% for fiscal '15. kroger continues to come out ahead of wall street expectations which have gotten pretty high. this is a stock that's up 35% over the last 12 months. it's hit a little bit lately on the market turbulence. still up 10% this year. wall street journal put one of their stories out this morning saying that perhaps it's fairly valued. investors don't think so yet. the stock is up in the premarket 8%. it just continues to be. i know this is one of the cramer favorites as well. they have come out of nowhere, and look at that chart. you said it was one of the most beautiful schacharts to look at. it shoots higher. >> we have a few of those where it's a straight line, mar yacht, disney for a long time. this is one of them, but as the

journal says, a lot of what they've done and the way they've outpaced their peers has been priced in. >> it's going higher. they initiated a stock with a saying it's hard to find a defensive growth company. >> when we come back, later on this morning, why they are upping price targets on am amazon to 705. take a look at the futures here as we look to open slightly to the downside. a lot more "squawk on the street" live from post nine when we return. you 50 percent more data. that's 15 gigs of data for the price of 10. and get 300 dollars credit for every line you switch to at&t.

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holding an annual charity day in remembrance of employees cantor lost 14 years ago today. mary thompson? is in new york with the ceo. >> reporter: thank you for that. nice to see you. it's become an annual tradition. the first thing i want to ask you, you were ceo on 9/11.

what do you think of when you wake up in the morning on 9/11? what's the first thing that krosdss your mind? >> i really, unfortunately, think about it a lot in the days leading up to it. by this morning, i'm ready. i always take my kids to school. because that's why i get to talk to you 14 years ago, i was taking my son to his first day of kindergarten. that's the most important thing to me. it saved my life. and then i come to work, and i'm ready to sort of turn it into something positive. it starts very difficult. if i didn't have today as charity day, i'd probably curl up in a ball. this way i get to do good. >> you took 9/11 as a source of motivation. what would you tell other people who are faced with a catastrophic event like you were at 9/11. what would you tell them is the most important thing when they look to rebuild their lives or companys?

>> i couldn't change who i was. i'm a businessman. what i felt i could try to do is turn that business incentive into something that could do good. so we donate 25% of everything we made to the families so i could be motivated and say i need to help the families but i can't them in any other way other than financially, because that's what i'm good at, so we rebuilt the company in order to help the companies. that was the most important thing to me. if you asked me a couple of times after 9/11, i would say the number. how much money we're going to give the families. at the five-year mark when we'd giving them $180 million, it was extraordinary, but it was all of their hearts and souls pouring out to try to do the right thing by the families but also to rebuild the company. >> you lost 658 employees on that day, but you also give their families something else. how many children of former employees do you have working here now? >> we have 51 children of people

who lost their lives in 9/11. if you think about that, that means their moms said it's okay for the young men and women to come and work at cantor fitzgerald. think about their opinions. you know 22-year-old's opinions. for them to come work here is great. and we want to train them. we want to help them have great careers. sometimes they call us and say can you help us and get a job on the buy side and help us with your clients. we're always trying to help them. they're a part of our soul. we have twin girls working here which is extraordinary. >> it must be wonderful to see. i want to ask you about business, changing the subject, because it's a very volatile market. how are you responding and what are your clienting saying? >> we love volatility. we don't like quiet fritds days august. the current markets in china,

it's been softer than the people anticipated. they put out nice stratiatistic. commodity command now, oil is down. i think the underlying economy will continue to grow slowly. i think europe has more challenges than we do, but effectively, we're in for a long slog. great for real estate. real estate loves low interest rates for long periods of time. >> reporter: what are you thinking the fed is going to do next week? >> i think the fed, there's lots of talk that the fed's going to make it's move. i would say it's less than 50/50. but a 25 basis point move to us, that means on $1 million, if you put it in for that, you can buy coffee for you and your friends. this is not really an interest rate. we'll talk about it a lot in the press that they moved interest rates but if they only raise them 25 basis points for the

next six months, that's really low. you have to keep it in the overall perspective. they're going nowhere. they'll probably make a move to say they're off the dime, but they're not more than just a dime. >> back to charity day. make your pitch to your clients right now. what do you give if they make the trade here? >> so we give every single dollar, all our employee's waive their day's pay. we give any business we do today to 150 different charities. we give it to people who help others take care of theirselves. you can go to cantorrelief.org and donate also. >> the market is $12 million. that's what cantor raised last year. you're looking to beat it this year. we've been speaking to the ceo. thank you. back to you. >> thank you, mary. as we await the opening bell,

taking a look at futures on the last day of the trading week. one that could see the best week for stocks in eight. it looks like a down open. s&p down 9, nasdaq down 22.5. more straight ahead. i'm watson. and today hundreds of companies are putting me to work. i'm teaching watson to help your vet speak dog. you're a dog, right? i'm teaching watson to help you make healthy choices. i'm teaching watson to help design a vacation around your personality. don't judge. i'm teaching watson to answer endless questions. how big is infinity? where do babies come from? why can't i have chocolate for breakfast? i'm watson and i'm ready to work with you.

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>> we're about to have a moment of silence here. 9:25 is the time the exchange is going to have a one minute moment of silence. not the first one of the morning. already at 8:46 eastern time the white house held a moment of silence with the president and the first lady. played taps. that is the moment that american flight 11 flew into the north

tower. the 767 that was going from boston to los angeles on september 11th of 2001. this is a tough day to remember. but we go through the exercise because it's important. if you have forgotten, nearly 3,000 people killed. 2600 at the world trade center and the surrounding areas. 125 at the pentagon. 246 on the airplanes themselves, and on a day where, again, the newspapers write another story about the incredible resurgence of lower downtown. population of lower manhattan on 9/11 was 20,000 people. today it's 70,000 people. is that amazing? >> yeah. >> much of the trade center site has finally been rebuilt, but we're dealing with the ramifications of that day every day. even more so in many of the things that we worry about and

deal with as citizens of our great country. my thoughts go back to the day, having been on the air with mark haines who was truly brilliant on that morning, as awful as it was. >> and we're looking at the live picture. there was a ceremony at the plaza at the september 11th memorial. here's the moment of silence. [ silence ] [ silence ]

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you're watching "squawk on the street." live from the financial capital of the world. we'll get the opening bell in about 45 seconds. we've had the moment of silence in remembrance of the attacks on 9/11 of 2001. interestingly, the bell is going to be rung by a group of representatives from a group called my good deed. a nonprofit which created and organizes every year this september 11th national day of service and remembrance. and a lot of the kids on the floor today, and i believe on the balcony are ambassadors,

children who were born on september 11th, 20th, 2001. with that we'll get the opening bell at the exchange. my good deed, a nonprofit, encouraging charitable contributions on september 11th, and at the nasdaq, the new york police department, the september 11th family's association and the new york september 11th children's and benefit fund. some of the numbers they're talking about in terms of dollars raised, amazing charitable work they've done over the years. >> and the fact that he's hired about 60 of the relatives of some of the families that. the statement that makes that their mothers let them come back to work at a place where unfortunately some of their family members passed. watching the opening bell. one important group is energy.

on the price of oil, it continues to decline. it got a bump yesterday but it is under pressure. a lot of people talking about the call out of goldman sachs. lowering the price. saying $20 could be a bearish scenario. looking at 45 a barrel over the next year. we'll see how oil reacts. chevron got a bullish upgrade. >> jpmorgan takes it to overweight. if you're worried about a dividend cut at chevron, a lot of people are. if cramer were here, he would argue it's a risk that faces the stock, jpmorgan believes it's been priced in. >> and they say there's no chance they'll cut the dividend. >> i think you'll see a lot of different moves. not at the highest but the mid tier, the smaller as they come under increasing pressure from their lenders who are going to be looking closely at where they are in terms of cash flow

production or lack thereof and their ability to get their kov nans on the lending agreement. we're moving into a period where we can expect to see forced m&a and disruptions. maybe even bankruptcies. you wonder when you hear a number like $20, knowing it's low, the lowest idea, at least that goldman offers, but the geo political ramifications if we get that, what that would mean for russia or saudi arabia, and how destabilizing that would be is a scary thing. >> to be fair to goldman, they say it wouldn't stay there for long. that is the true washout number, and to get there, it would require us to fill every tank and every logistical pipeline through which oil moves. which is hard to do. >> and goldman has not been particularly strong on their predictions in the past. we should point that out, when it's come to oil recently. >> yes. we are looking at all the major

sectors opening in the red. energy under a most pressure and industrials holding up the least worse, and ge, i guess jeff left the set and did another sale. >> yes. there was a lot of coverage of the coming decision to move the head quarters. the journal deciding to focus on that. ge still below $25 a share despite his articulating in many years what he believes are the growth objectives and things that they will actually achieve at the company over the next year. i did want to mention marvel technology group. we're talking about a $5.5 million market cap. mic microprocessor provider saying it is investigating about 7% to 8% of revenue that was

recognized, it would have been received and earned in the third quarter, hence you do have stock down substantially. they say at this point they haven't identified anything in terms of material impact on previously issued financial statements, but they are investigating what they claim is whether senior management's operating style resulted in an open flow of information and communication to set an appropriate tone for an effective control environment. not certain what that means. but this basically would seem to be the idea of back dating is what i guess i'm picking up, taking stuff that maybe should have been booked in the third quarter and putting it in the second quarter. >> kroger finds itself at the top of the s&p 500 right now opening up with a strong game. the only big earnings report of the morning. it was a strong one. bottom line raising the forecast. they continue the string of recent beats. a lot of people looked at that stock as one that was dragged

into the market turmoil because it was one of the biggest gainers of the year potentially finding a good opportunity to buy. the stock up almost 5%. >> transports enjoying a bearish picture for crude. looking at some of the airlines, delta in the list of top gainers. this is going to be the transport's best week since july 31st, and even some of the consumer names, walmart the best dow component. restoration hardware had earnings. $0.85 beats by a penny. they raised the full year forecast, although the current quarter outlook was a little bit soft. at that price point of furniture, i'm not sure if oil prices mean anything. >> and also with the housing market improves, they launched two new lines like teen and some new stores expanding that. but i guess the disappointing factor there was the outlook.

with the consumer, i wanted to check mondelez, the consumer giant that owns oreos, ritz crackers. bill ackman became a shareholder. he was on "squawk box" this morning. here's what he said about why he lee likes mondelez but he's not sure about the leadership. >> i don't know if the current team can get to the promised land, but i think a couple of things will happen. either the current team will get the business to its potential, in a reasonably rapid fashion, or it will be a target. and from buffett's perspective, if you're a buyer, you don't want to be telling people, i wouldn't be recommending stocks in your universe. that's going to make the prices higher. >> talking about the long-term prosects for mondelez. >> buffett said he's not interested in an interview with us, at least in the near term. >> well they have a big

challenge on their hands integratiing heinz and kraft. >> a fairly high multiple stock to begin with. david tepper indicating he thought the multiple on mondelez was fairly high, and many not believing what they're pointing to will be there in the long term. it's not quite to the 7.5 % that we keep saying but a very large position for his ledge fund to take. it will be interesting to see if the dynamic between he and -- >> i was going to say rosenfeld begins to deteriorate. she's a tough lady. and she's dealt with people on her board. it's not like she's not accustomed to dealing with an activist with a lot to say. >> also the stock has been an outperformer on consumer

staples. it's outperformed many others and ackman mentioned there's more room for margins to increase. he cut cost to boost margins. >> quickly, the upgrades today. amd, bernstein up. white wave, also bernstein up positive. for the most part, most of the s&p sectors are in the red this morning. kourtney is on the floor for us today. >> good morning. we have the dow down here just fractionally down. s&p about six points in early trade. a lot of investors sitting on the sidelines waiting to put their money into the market until we hear from the fed next week. i say we throw a party once he have the meeting behind us. maybe money can get put back to worth. that ups the uncertainty in the market. look out for volatility. when we got the ppi number, we

didn't see much movement in the futures because a lot of folks waiting to see what the fed will do. not ready to commit either way. many of the surveys have economists split on whether we'll see the rate hike in settlement september or not. across the pond, experiencing some losses. a couple hours left to go in the session. france down by three-quarters of a percent. however, they could finish with the best gain for the week since july. we'll see what happens in the final two hours of trade. checking in on asia as it remains a focus for the week and see what happened over there. asian markets mixed overnight. china remains a global focal point for investors saying the economy isn't heading toward a hard landing. they said that yesterday. chinese industrial output, retail sales, out on sunday. that can make for sometimes a rocky monday morning. we know traders and investors

will be keeping their eye on that. we talked about energy earlier on, we have crude oil prices down. goldman cutting the forecast for 2016 saying $20 crude oil is not out of the realm of possibility. you can see big losers on the session. energy is the worst performing sector of the geek, aweek, and k post reporting halliburton must find a single buyer for the assets as a requirement for approval for baker hughes. that's a report from the new york post. jpmorgan saying the pessimism over execution risks are already priced in. i want to pay attention to kroger. it's up sharply on the session after reporting a beat in the bottom line by about 5 cents. a slight beat on revenue and calling out lower retail fuel

prices. kroger has been a strong performer. over the past year up more than 40%. >> kourtney on the floor. for more on today's movers, let's go to morgan brennan at the nasdaq. apple giving back some of yet's gains. >> that's right. the nasdaq is down about 15 points. take a look at the composite. up for about 2% so far for the week, and the nasdaq 100 is fairing even better. it's up about 2 .3% for the week. investors have been hiding out in some of the large cap names that had been leaders ahead of the market correction we saw last month. the apple, though it's giving up gains today, the apple, facebook, google, amazon, gainers for the week. the same can be said of some of the drug makers as well. higher for the week. but traders and strategists are saying it's really a waiting game. all eyes are on the fed and if

it will begin to raise rates. we'll continue to see the trading range narrow, and volatility die down over the next trading sessions as everyone awaits the fed's decision next week. i also want to mention that we did have a moment of silence here with the nypd a short while ago. for anyone who was affected by the ends of september 11th, i want to say my prayers and thoughts go out to them today. >> morgan, thank you for that. oil is off the lows but down a buck. jackie is with us today. >> good morning. you guys have all talked about the goldman sachs note that is circulating saying $20 oil is not out of the question, bringing the short-term target to $38. goldman was in the 50s. so this is pretty significant in terms of what they're saying. they think is u.s. will continue to produce. the production glut will be the problem, and saudis saying they

don't think a summit of oil producers will produce any kind of concrete action. it doesn't appear like anything of that sort will be on the cards. the flip side of what we're hearing from the goldman note is what the iea is saying, saying that low prices will impact production and we'll see some of the steepest declines we've seen in two decades next year. that's something to take into account, the eia yesterday saying it thinks u.s. -- they think production will go down. as you said, $44.86. we're under the 45 market. 44.42 is the session low. >> keeping an eye on crude oil for us. coming up, more bullish on amazon. one of the best performers of the year and of the session right now. it's up half a percent. we will have a guest to explain the call. taking a look at stocks right now in the opening minutes of

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. >> rbc lead analyst bumping the price target up on amazon by $55 a share. it is now $705. the move based in part on a new survey that looks at the company's so-called prime fly wheels. mark joins us from san francisco. and he can help explain. i guess the first question is what did you find from your survey involving prime and why that will continue to generate more business for the company? >> okay. good morning. what we're finding is rising adoption of prime. two years ago, 25% of amazon customers said they were prime. now it's 40 %. amazon doesn't disclose the numbers, but we think they have about 50 million subscribers. prime members spend more than nonprime members, and the longer the people are in the prime program, the more they spend

with amazon. nonprime subs, only 15%. 40 % of them will spend 80 0. >> four years in, almost 70% spend at the elevated levels. that means the growth should be sustainable. >> it's amazing when they have a loyalty program that's paid by the customers for and they spend more as a result of. but when people come back to the stock, they look at the multiple. i'm looking at the multiples based on the revenue projections. we're talking about 42 times. how can you justify that? >> yeah. you do have to take a long-term perspective on amazon. and broader context here. i know a lot of these venture capitalists in the bay area think they're short-term oriented. that's not the case with amazon.

they should be able to look out several years and look at the pools of business they're building up. you do that and discount it back, you can get to materially higher price levels than where the stock is today. >> the concern amongst investors is how much money they're going to spend. they have gotten the patience of their investors to do so. with so many prime out there, i wonder on content, do you expect they're going to be ramping up a lot of their spending? >> yeah. they may, and you've looked at amazon for a long time. the market didn't have the patience ten years ago that it does today. you remember when they went through a major investment cycle, that stock got clocked, but in the last one, people realized how good of investors that amazon was, is, and so, therefore, the market was willing to take the stock up.

there have been plenty of misses. amazon fire phone is one of then. we're seeing margins ramping up, and there's new distribution centers in the u.s. that's what has allowed prime to succeed, and same day delivery. >> does an investor not need to be concerned that it's not a winning business. they're about to launch another fire tv to compete with apple. they're reporting a $50 tablet. they still have ambitions in this space. >> they do. in the tablet and the e reader space, amazon scored a win. in the tablet space, it was so-so victory, in the phone, it was a clear failure, and they backed out of it and shut it down. the tablet, amazon can be in that, and their advantage with the products is it has a dramatic cross selling capabilities. they don't need to make profits

on the devices, they can make it on the additional products and services people buy because of the products. it's a huge competitive benefit. >> i appreciate your time and insights. >> thank you. >> when we come back, a key reason you might see oil prices continue to slide into the fall. but first a look at this morning's s&p losers which are almost uniformly in the oil space. we're back in a minute.

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>> the biggest issue we see in terms of the oil market is this autumn or next spring do we blow out storage in the u.s. which would be as low as $20 a barrel. >> that was jeff curry of goldman sachs on our show discussing the $20 a barrel possibility a week ago. well, with u.s. crude near multiyear lows thing. there's a factor involving

refineries that could put further pressure on oil prices in the fall. we're live in whiting, indiana with more. >> reporter: good morning. interesting hearing jeff, and they're out with research saying the 20 low could be revisited in the near term, and crude has seen a bounce off the lows we saw late in the summer. however, there could be another dip down coming. and what i'm you canning about today is the bp refining facility here in whiting, inn. this is one of the refineries scheduled to go into fall maintenance nature they shut town part of the facility, typically not the whole thing to make necessary repairs. but the impact this year, because of what's happened to the flat price of crude would be significant. take a look at this map of the government's delineation. you can see a half dozen facilities that are expected to go down sometime in september or october. partly or entirely for repairs.

minnesota, illinois, kansas, and oklahoma, just a few examples. and secondarily, there's expected to see a lot of revamping activity in the gulf coast region, and we have a map of that as well. that's considered to be a different district in energy terms but we may see impacts on the price of crude with all the refinery revamps because when refineries go into that period of time, they don't need to buy crude oil in order to create refined products. i talked to analysts about what they expect the impact to look like. this year, according to energy news today inc., 2 million barrels a day is expected by early september and october. and again, the impact on crude prices if we see it, the downward trend could be greatest around october 1st or so.

you may ask what's the impact going to be on auto fuel? it may not be that noticeable. prices hit recent lows of about $2.43, and due to the long planning process here, the fact that other refineries will step in and the lack of summer driving activity, we may not see a shoot up in gas prices. >> we'll be talking about this pipeline a lot more often as we head into the fall. kate, thanks so much, and by the way, this goldman note making the headlines, curry told that to kate on august 26th. your heard it here first. breaking news on consumer sentiment at the top of the hour. dow is down 45 points. back in a minute.

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good friday morning. welcome back to "squawk on the street." we are at the new york stock exchange. let's take a look at the markets. dow is down 6 76 points. a lot of weakness.

university of michigan at the cme. >> disappointing number. we were expecting 91.1. it came out as 85.7. coming in the stocks were out of pressure. the s&p futures are down about 10. yesterday we got bad data, and i actually kind of thought that was one of the reasons that the stock market rallied. we're getting down to the nitty-gritty. the fed has little idea of what they're going to do. the stocks are trading weak. ten-year came in at the 2.17. down a hair. >> let's take a look at how the main major averages are doing. the dow is down 81 points. s&p 500 and the nasdaq lower as

well. nasdaq fairing the worst of the bunch, down about .6. jeff rosenberg with us. jeff, the last minute data hasn't been that great. i don't know how important consumer confidence is going to be. bill dudley mentioned consumer confidence is something he was looking at. inflation pretty much unchanged at the producer priced level. what do you make of the latest data? >> it tends to track what we see going on in the stock market. nevertheless, it's a reflection of the impact of financial market conditions. that's what the fed calls it. the rest of us call it looking at our stock portfolios and feeling less confident when they go down. the loss of confidence feeds back into the real economy through lower spending, and that's what the fed is very concerned about.

and that concern, they've articulated it in the past. most recently as you highlighted in jackson hole. that's registered in market expectations that the fed is unlikely to raise interest rates. i think the weak day is has taken down the probabilities along with the uptick in financial market uncertainly. >> does that strike you that nobody has any clue what the fed is going to do next week? this is supposed to be a communicative fed that's supposed to be out there, controlling market expectations. the market isn't expecting a rate hike next week. many economists are expecting it. and the fed itself, we've gotten so many mixed messages from some of the fed presidents. is that strange? >> it's a new paradigm, a bit. it's a new time period where the fed is no longer going to be providing forward guidance. stan phisher talked about a couple of speeches ago.

they want you to be clear and have an understanding of the so-called reaction function, meaning how the fed will react today a, but they're not going to guide the expectations as explicitly as before. so you're going to go into the meetings with greater uncertainty. that raises the risk or the possibility of a surprise and the fed contributing to market volatility for the decisions. >> jeff, to the credit markets themselves, in a recent report you wrote it is in the realm of international credit markets where much of the longer-term concerns have long resided. you made an illatiallusion to t fuel. and why is it international credit that concerns you? >> there's a broader topic that we've looked at for a while. we're talking about it every day when you're talking about oil prices, the impact of expectations of chinese growth, and what's going on in the twin areas of commodity prices, and

emerging market currencies. where this creates financial risk or financial pressures is what we've seen for a long time in the growth and the development of private sector emerging sector market. it's certainly on everybody's radar screen. i cite in the piece that you just mentioned the things that the imf talked about back in april, for example, in the global financial statement report. the vulnerability is how do we deal with the tremendous growth and credit out of private emerging markets, and collapsing market currencies heightens the risks, and they cause us to be a little bit more defensive in this time period. >> i saw some research yesterday arguing that for a long time the credit markets were screaming at the equity market but now it's sort of, it's been heard. there are no longer the only voices in the room, and the take on that was that it's net constructive. do you go along with that? >> i think that for a while

there had been a bit of a perceived disconnect where credit markets had been widens, and headline markets hadn't. that's a misread. people look at the s&p 500 and compare it to high yield bond prices. the s&p 500 was being held up not by the difference between what the height of the market and the equity market was saying but the lack of breadth and the concentrated leadership coming out of the s&p 500. if you look at the stock market indices that are relative to credit market, the issuers who issue in the high yield markets, you saw they were declining for some time, signaling concern over the global growth slow down. there wasn't as big of a disconnect there. the catchup in august was a catchup in the headline indices. >> brazil downgraded, russia continues the pain of the oil

price slide. do you see any potential for systemic risk coming to our credit markets and our stock market? >> well, it's certainly a tail risk. that's to say it's a risk. the risk is small, but it's one that has been increasing, and the downgrade to brazil, the impact of the brazilian political crisis. the subsequent impacts to the credit issuers in brazil and more broadly in emerging markets are risks we have to keep an eye on. is it the core outlook? probably not, but it's something that investors need to keep an eye on and it's snag raises the downside risk to investing in risky areas, the fixed income markets. with compensation levels have been improved, yes, but the risk also improving. we advocate a more defensive position in the areas of credit markets. >> thank you for joining us. >> thank you. >> sticking with the markets

here, the nasdaq and the nasdaq 100 are the only indices that are still positive this year. what's keeping them in the green? we have more on that? the nasdaq is bright spot. >> it is. i want to pick up where your conversation touched on. that concentrated leadership concept in the stock market he was talking about. it's even more concentrated when it comes to the world of the nasdaq and the nasdaq composite. the largest cap companies are the ones holding things up. let's focus on the nasdaq 100. the biggest members of the nasdaq composite. fractional gains. a little under a percent but it's holding up better than the s&p and the dow. that's year to date. take a look at how that stacks up. it's a lot about the biggest companies out there. we decided to take a look at the nasdaq 100, and only the megacaps, and then which ones are still holding positive year

to date, that medium term momentum. we came up with there are only, again, five of these stocks that meet these criteria within the nasdaq 100. amazon the best. that powering things to the up side, even though a lot of the market is down. amazon.com up 68%. google shares, up about 22%. the class c, not as good, but it's still up about, we'll call it 20% right now. facebook up 18%. another big contributing factor to the upward buys for now, for those nasdaq stocks, gilead up 13%, and apple up 1%, given a little bit of a slide. these five stocks are the ones helping to hold things up for the nasdaq, and among them, only two pay a dividend. that's apple, and gilead. back to you. >> we'll see if that changes over time.

thanks. when we come back, markets recovering just a little bit since the beginning of august, but still down more than 5%. what does the rest of september have in store? art cashin will join us onset with the dow down 61. don't go away. (trader vo) i search. i research. i dig. and dig some more. because, for me, the challenge of the search... is almost as exciting as the thrill of the find. (announcer) at scottrade, we share your passion for trading. that's why we rebuilt scottrade elite from the ground up - including a proprietary momentum indicator that makes researching sectors and industries even easier. because at scottrade, our passion is to power yours.

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i love my job and i care about the work i do. i know how hard our crews work for our customers. i want them to know that they do have a safe and reliable system. together, we're building a better california. >> stocks pulling back a little bit after the weak consumer sentiment data at the top of the hour. art cashin joins us to talk about the rest of this week, and the week ahead. >> good morning.

>> good morning. what do you think? i'm assuming no data point changes your mind about next week? >> not my mind, for sure, but we had a couple of interesting things. the university of michigan data brought us down to a potential interesting test. yesterday's low was 1937, and we've been having a series of slightly higher lows and slightly lower highs forming a pen innocent formation, and that could be important to the market. if they get weak again, watch that 1937 area. if we go down and violate that. >> there's that number again. >> yes. that can cause us trouble, and then you have some crazy seasonal things going on. we were discussing another down friday, friday historically is the best day out week. this year it's been dreadful. we've been down 13 or 14.

and then we have other seasonal influences coming. sunday night at sun down harts rash ha hahn in a. i was told you sell and buy them back on yam, kippur. that has worked out time and time again. can i never figure out if it's the september/october pattern. but we have more selloffs in september and october than any other pair of months. >> financial crisis, yeah, going back. that would be next wednesday, a buying opportunity. >> i think it's the wednesday after, isn't it? >> the wednesday after next week, correct. >> yeah. that's right. and as far as some of the winning groups. biotech led the charge. which are you looking at in terms of the sectors to be a leader to confirm that the rally can come back?

>> well, i think the biotech may be an interesting area, because there are reports of more and more money being set aside in that industry. so i would look for some mergers and acquisitions activity in that, so i would expect that to keep going. as so what will really reinforce the fact that the bull market or the bounceback is in good shape, i would look again to the financials. they've been a little too weak, and they've got to reassert themselves. they don't have to have full leadership, but they have to reassert themselves in here. >> mary thompson asked a good question the last hour, that is what he thinks of on 9/11 anniversary mornings. what do you think of in. >> it was a very difficult here, and we managed, my son was working down here at the time, and we managed to leave after both towers had fallen and figured we'd have to walk up down to find a way back to new

jersey. we walked through streets that the visibility was very small with ash and dust and everything coming down. met some, two distraught ladies who didn't know where they were going. we invited them into our convoy. we had some wet towels that we had taken to aid in the breathing, and then the most remarkable thing was that when we got to the east river, there were row boats and ferries, it was an evacuation. nobody asked for money or anything. the boat would have a sign up that side staten island, or in our case new jersey. and people got on board. mo nobody exchanged business cards, everyone helping one another. that's the way it was, and when

we got over to jersey city and we were walking, i couldn't understand why people were staring at us, and then finally i realized that both peter and i were covered with ash, and people realized that we must have been close to what was going on. >> it took you a week or two before you wrote your first comments after that day. but you later said it may take a long while to find those criminals who took our smiles and our friends, but we will have patients? . >> i meant it. the other thing i mentioned, and wrote that for two weeks, the only smiles on wall street were on the photos of the missing posters that people put up for family that they couldn't find. nobody came to work with any luster. the government asked us to reopen. and we did. the streets were guarded by national guardsmen and whatever. the important intersections, you would come in with your head

down, and when you approached one, you would thank them for their service. it was a dramatic time, and it will never be easily forgotten. >> art, thanks for remembering it for us. art cashin. >> "squawk on the street" will be right back. if you struggle with type 2 diabetes, you're certainly not alone. fortunately, many have found a different kind of medicine that lowers blood sugar. imagine what it would be like to love your numbers. discover once-daily invokana®. it's the #1 prescribed in the newest class of medicines that work with the kidneys to lower a1c. invokana® is used along with diet and exercise to significantly lower blood sugar in adults with type 2 diabetes. it's a once-daily pill that works around the clock. here's how: the kidneys allow sugar to be absorbed back into the body. invokana® reduces the amount of sugar allowed back in and sends some sugar out through the process of urination.

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the 2015 nfl season picked up where it left on with the patriot's winning. tom brady led his team to four touch down drives, including three to rob gronkowski, but the steelers stopping just short of accusing the patriots of cheating. joining us is the ceo of rosen haas sports. gronk and antonio brown had big games and among his clients. >> good morning. what a great way to start the season. >> unbelievable. nfl.com says as long as the team has brady and gronk, belichick

can figure out the rest. i think you would call gronk uncoverable. >> he is. when you've got his size, his speed, and his catch radius, you've got his ability to run after the catch and his ability to get open, he's just -- he's a very special athlete and a great kp kp competitor. it showed last night. they went into the game talking about slowing them down. it's a lot harder to do when he's healthy. it's pretty much impossible. >> how much has he told you about the way in which belichick or kraft or the team in general have used deflate gate as a motivating force? >> well, i represent a number of guys on the team, and i was at the game last night on sidelines, and i can tell you, it was an emotional lift. i mean, the energy from the

crowd just having brady back, and this us against the world mentality, and bringing out the four trophietrophies. it was a remarkable energy. the steelers had their work cut out for them. what an emotional lift with brady and the championship, and overcoming the controversy and being at home. they were going to be impossible to beat last night, even when the steelers were playing lights out early on, moving the ball up and down the field. you just had the sense, brady was going to be unstoppable. he was basically perfect last night. >> drew, on roger goodell, you were an unspoken critic of the initial suspension. you came here and expressed your satisfaction when it got overturned, but the leverage of punishments is unchanged. does he need to be stripped of

that authority? >> last night the executive director of the nfl was on the sidelines, and roger goodell wasn't there. if he wants to get back to being the face of the nfl and winning as opposed to lose, he's going to need to concede power on making the ultimate decisions on discipline. it's not fair for the nfl to punish a player and then decide whether or not the punishment is fair. there has got to be a neutral party involved. he's a smart man. it makes too much sense for him not to make out a deal for the nfl pa. it should be enough that there's a reliable, trusted, third party that does it. it's not worth it for the nfl to keep losing these court battles and losing the public relations

battle. the nfl is way too successful. you'll see the ratings will be off the chart, and the commissioner can't be there to promote his league. that's ridiculous. >> right. and this all comes on a week, of course, that bomb shell espn report from argues that deflate gate was essentially payback for helping cover up spy gate. do you believe that story? >> i really don't. you know, i'm not big into conspiracy theories. i think it's very straightforward. the nfl was under a lot of pressure by the 31 other teams to go after the pie trots on the deflate gate. look, you could see the animosity toward the patriots even in the way the steelers have responded to the headsets malfunctioning. that happens in every stadium. but no one points the finger at the home team for that kind of

stuff. you know, unfortunately for the patriots, they've won so much, they've been so successful, it just seems like there's a lot of sour grapes, a lot of professional jealousy, and i think it's incredibly unfair. i'm not a homer for the patriots. i have more clients on the steelers than i do on the patriots, but i have to call it like i see it. i don't see how the patriots had anything to do with the headset mall functions last night, and i don't think it's fair to criticize them. >> the league says -- they issue the headsets, not the home team, but it's a talker today. drew, we're out of time. it's good to talk to you again. see you next time. >> have a great morning. >> he works with gronk. the gronk? gronk. straight ahead, the justice suspect setting the sights on white collar crime. more on that when we come back.

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>> good morning. here is your news update at this hour. the 14th anniversary of the 9/11 attacks being marked with observances across the country. a u.s. flag was put down the side of the pentagon. that tradition began a day after the attacks. the vice president appearing on the late show with stephen

colbert last night and was asked if he was ready to make an important announcement about his future. >> i don't think any man or woman should run for president unless, number one, they know exactly why they would want to be president. i'd be lying if i said that i knew i was there. >> a south korean court sentencing the man to 12 years in jail. he was found guilty of attempted murder and assaulted a foreign envoy. a fisherman experienced a once in a lifetime event. look at that. they were visited by killer whales. he captured the whales swimming and jumping around the boat. that's a once in a lifetime event. back to you. >> and to see it on tape. thank you very much. as you mentioned, it's a

somber day here on wall street and in lower manhattan. the 14th anniversary of the 9/11 attacks. joining us to talk about markets and to kmen rate the anniversary, jim stuart. author of the book, heart of a soldier, a year after 9/11. your thoughts today? >> it's been 14 years, and i was hear at the time and i ended up writing the book about a heroic guy. i have to say time has an effect. for years i couldn't open my book and look at it. it was too painful. today i did. i didn't cry, i usually do. what stood out to me, there was so much of what is best about human nature that emerged from that.

it was not just heros. there was love and caring and community. it reminded me -- i was thinking today about all the good things that we learned that came out of that, and i'd like to think now that nothing can bring those people back, but that this all wasn't purely in veain. there was a lot that emerged and reminded us of aiming higher in our lives. >> we mentioned the transformation of lower manhattan. >> it's amazing to walk through there, and i think they've done a beautiful job on the memorial area. you walk in there and there's this kind of atmospheric since that's profound. i mean, it took a long time, and i think they've done a great job with it. >> thank you for sharing. we want to feget your thoughts the market. we talked to during the height of the volatility. things have moved down. >> it does seem like it's sort

of a normalizing phase coming in here. we had a sudden plunge, and then people said it's over. wait a minute, no. these things can't be over in a day or a week. we need a period of consolidation and rethinking. there's so much we don't know. nobody knows what the chinese economy is doing or what the fed is going to do next week. let's take a deep breath. a lot of this uncertainty is going to go away in time. knowledge will filter into the market, and we're going to find a new level that reflects the reality we're living with. that's healthy. that's how markets are supposed to work. >> but you'll acknowledge the potential risks we're facing now are bigger than whether greece has a parliamentary move ? >> yeah. i look back. it was getting a little dull, but there are worse things than dullness. but the way human nature is,

it's not going to be placid all the time. there are going to be unexpected crisis. i remember thinking when the vix was at the lowest, thinking what was going to shake this up? who knows, and thn something came along, chinchina, all the uncertainty. it was the wild card. we can't anticipate that and we don't know what it's going to be six months from now. the has been a healthy reminder that stocks go down as well as up. you need a risk premium in there. i think in the scheme of things this is healthy. i said before, maybe buying opportunities here and there. just be patient and ride it out. >> it sounds like you think that the fundamental pillars that fuel the bull market, whether it's easy interest rate policy, a better u.s. economy, are still there? >> definitely. we're talking about a slight fed

raise here, and then maybe a long time before they do it again. everything i can see means monetary policy is going to be accommodative. the u.s. is economy is doing well. the u.s. unemployment numbers are doing well. we're a major engine for growth. europe is stimulating all the pillars are there. but it's never healthy for something to go up in a straight line. >> sorry. i was going to mention your colu column today. >> well, wall street is back in the news, and i think it's a great idea. how many times have we heard that before? i'm losing count. and i looked at a case today which is a vivid illustration of why cases are so difficult. it's flimsy and is going to the case next week. they will decide. they they should. i didn't sit through the testimony, but there is no enron or world come. not a single one of the government's witnesses said the

top officials knew this was questionable, let alone told them to do it. i don't know how you convict somebody in a case like that. that's a problem in corporate structure where the ceo is very isolated from the minions who are maybe doing the actual wrong doing below. >> so you still have doubts about the ability of the justice department to get individuals in various scenarios? >> i do have doubts. at least i'm beginning to accept that the will is now there. and i don't think -- i think after the financial crisis, they said let's don't mess with these big institutions. the last thing they need is a big criminal prosecution. i don't think that's the right approach nature that seems to be going away. and having the will is the first step. getting to actual convictions is a long road. and it's a little late, by the way. >> it's getting a little long in the tooth. >> it'll be interesting to see if that doj wrinkle couples from jeb bush and martin o'malley

taking on wall street in his campaign, if there will be a more aggressive push. >> it's emerging as an issue in the campaign. hillary clinton has also make a pitch we need more convictions here. i think people would love to see some good cases, but they have to be good cases. this country is not about going and putting innocent people in jail just to make a statement. >> they also have to raise campaign money. they have to walk a fine line. >> thank you, jim. today is the 14th anniversary of the september attacks. cantor fitzgerald is holding it annual trading day. mary thompson is us. >> the charity day raising money for a number of charities that receive funds from the cantor fitzgerald relief fund, and they do so with the hep of a number of celebrities. we are joined by whoopi goldb g

goldberg, co-host of the view, actress, we could go on and on. you have been a devoted participant in the cantor fitzgerald charity day. i think you've been here all the six years they've held it. why do you consider this to be such an important event for you to attend? >> the days and the days following 9/11, the stories about cantor fitzgerald came out, and the man that was running the company was doing amazing things for not just the folks who survived but for the families of everyone, and his family and he seemed to be just fighting through all the crap that was sort of laid on us on that day. and i met him somewhere, and he said, oh, and i'm doing this, and i said i want to be part of it because of what you did, because when you look at how much they've raised worldwide

after being hammered as hard as you can get hammered, they still got up and gave a dam about everything else in the world and said, you're not going to keep us down, and i just wanted to be a part of that grace. >> so as part of that grace this year, you're raising money for an organization called we win. what does we win do? >> well, the mom in from everybody hates chris, her sister and she started a charity, a lupus charity, because her sister has lupus. it's one of the things that folks don't know a lot about, but what they discovered is it hits women of color very hard, and so they wanted to raise awareness, and so the two of them have been working this charity, really kind of without a whole lot of fanfare, and then they started getting a little bit of notice, and i want to help them get some more notice,

so this is for them. >> okay. speaking of work, you just returned from vacation. so the view will be starting up again. it's turning out to be a very interesting runup to the presidential election. >> it always is. there's always, you know, there's always a lot of bubbling whether it's on the democratic side or the republican side, and it takes a good 12 months for what's supposed to rise to the top to rise to the top, so it's been -- it's going to be very entertaining from now until we get closer, and then there will be something to talk about because i'll be interested to see who makes it through in. >> anyone you're focussed on getting that you want to talk to right now? >> no. i'm still on vacation mode. it's like, yeah, sure, everybody. you know, whoever wants to come. whoever wants to come, and we will be as respectful as we can be, and we've got new folks, and

who knows what the year is going to bring? >> reporter: what's it going to bring for you? you're busy on a number of different projects. >> i have a movie coming out in october called "big stone gap". i have a book coming out "if they say you deplete complete m. it's my relationship book. and tom and i, my partner, we're doing animated and tiny movies. we're trying to do a lot of stuff. >> reporter: we're looking forward to saying it. thank you for joining us. back to you. >> mary, thank you very much. when we come back, recode's kara swisher will be here. she'll weigh on apple eels nl's products. back after a break.

>> if and when stocks finally calm down, how can you cash in?

goldman sachs recommending an interesting strategy. for now, more "squawk on the street" coming up. ♪ ♪ (under loud music) this is the place. ♪ ♪ sustainable tea tree eir boil and kale...ade from you, my friend, recognize when a trend has reached critical mass. yes, when others focus on one thing, you see what's coming next. you see opportunity. that's what a type e* does. and so it begins.

with e*trade's investing insights center, you can spot trends before they become trendy. e*trade. opportunity is everywhere. stocks are cutting their losses. the dow is now down 30. oil continues to fall. down more than 2% today. goldman sachs cutting the forecast for the price of crude oil. we spoke to a saudi prince about oil prices and about the deal with iran. we are joined with more on that. an important interview. >> reporter: yeah. basically for saudi arabia, this has always been about market share. they want to know why they should attend another oil summit when the iea has come out and

said the policy is working. i had a chance to talk and ask about the government's policies. take a listen. >> everybody wants to protect their share of the market. even nonopec countries like russia. they haven't decreased their oil production. the u.s. now is producing a lot of oil, and they haven't decreased their production of oil yrch oil, so there is a consensus in the world community, particularly in oil-producing countries that things are going to change by demand and excess oil availability. >> reporter: now, of course, we also spoke about the situation in syria as well as the situation with iran. he says he continues to be skeptical of the iran nuclear deal, and this is a man who spent many years during the cold war and the iraq war and also

during the war on terror dealing with the russians and syria as well. and i also asked him if he's worried about russian involvement in syria. he said the worst thing they can do is get involved militarily in the country, and the only way for things to change is for asaad to go. >> oil prices down 3.3% in the u.s. up next, how a new security feature for apple devices could help launch huge corporate attacks. i ibm's head of security joins us live to talk about it when "squawk on the street" comes back. (vo) rush hour around here starts at 6:30 a.m. - on the nose. but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading.

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apple is improving its mobile security by implementing a six-digit pass code for the next iphone operating system. kayla barlow is ibm security vice president, so no more four-digit, it's a six-digit. >> the default moves from four to six. >> that's a big deal why? >> it is a big deal. as security professionals we think of a concept called intricate. how many combinations are there of a pass code. four-digit pass code has 10,000 combinations. with the right equipment and training, someone can hijack that device and get in in about 18 minutes. keep in mind, it isn't just even

having the device. we were talking a four-digit pass code. do you use the same one in other places like maybe your atm machine and other places? it's not even just breaking it on the device itself. you might be breaking it in other areas. now, a six-digit pass code now we move to a million combinations. so now we're talking about likely years to try to brute force your way in. so here's the way i look at it a million combinations, 10,000 combinations, that's 990,000 reasons to upgrade to the ios 9. >> what about a fingerprint, which they do have on the iphone. wouldn't that make everybody a lot safer? >> well yes and no. you have the combination of the fingerprint, but you also occasionally need to log in with the pass code. so i think it's an excellent way to look at this. it's the combination that's giving you the right balance between convenience and security. so we went out and looked at one million mobile devices and tablets and we found that 90% of

companies are only requiring a simple numeric pass code. among those, 80% are only requiring a four to five-digit p.i.n. we think this is a big deal where honestly our friends at apple are leading the way to say okay, guys, it's time to take it up a notch. both on our own devices, as well as what companies require you to log in. >> which company has the most hackable mobile device out there? >> the reality is it's not so much about the device itself. as it is the entire chain. because all a hacker needs to do is find that weak link in the chain. so you know, whether you're looking at apple or google, they both do a really great job of providing security folks like us with the tools we need to protect these phones. but it's also the applications you put on the phone. think of it this way. you start a job at cnbc, that give you a lab top.

that laptop has all the tools you need. and has been vetted. your lphone, you bring it to wok on your own. it's the combination of locking down the app and the device that makes all the difference this is something we do with our product called mobile first protect. >> has any of this come out of your collaboration with apple in the enterprise? >> we have a fantastic partnership with apple and we're constantly working with them on security, on developing applications. for various industries and you know, it's comprehensive across the gamut. >> security obviously a growing business for ibm itself. >> it is. not a day goes by that we don't hear another breach, whether it's in the government for example the office of personnel, and/or any number of corporations are we getting closer to some sort of armageddon-like scenario in your opinion? >> well here's the way i like to think about it. think about this like a global pandemic, okay? imagine a pandemic, you require

physicians and hospitals out in the field. that is not happening in the security industry. >> it's still not happening? >> absolutely. it's got to change. so one of the bold moves that ibm made is that we have the largest networks of intelligence in the world. that we gather from our customers. from our own human research, et cetera. we have taken all of that, 700 terra bytes and putting it out free on the internet. we believe only through collaboration can we change this. we change the economic value proposition for the attackers. if that new attack, that new malware is only good for a few minutes, why develop it in the first place? >> as you continue to service companies across different industries, which ones do you find are the most vulnerable? we're hearing a lot about financial services. >> interestingly enough in the financial services business,

actually done a really great job, mainly because they've you know, been the victims of many of these things. there are other industries that are trying to catch up. but what i really see is a movement from thinking about security particularly in the board room. which is where we're often having this dialogue. moving from a conversation about compliance, you need to do x, y, z, very much of a check list, to moving to a conversation about business risk what is the right level of investment and security? how do i compare relative to my peers? and particularly in the financial services industry, as we're sitting here on wall street this morning, this is where financial companies are starting to move, is to say what is the right posture i need to take relative to the risk i have in my business? >> you've just given people a reason to upgrade to the new apple iphone for better security. >> the camera is nice, too. >> caleb barlow of ibm. under armour often called a

technology by some investors, including our own jim cramer. we caught up with the chief digital officer at a cia conference in las vegas and asked him if his company has plans for a smart watch. >> we have no product-like plans right now. as you think about everything, here all the information here is all about everything getting smaller, right? whether it's the chips themselves, how you know battery life getting better. those things are going to merge into the products that we wear every day, right? we're seeing it in some categories right now. as we get closer to the space we're in, we're not going to shy away from essentially doing research and being in that category. so a watch itself, no, we don't have a product plan right now. but if it's something inside the clothing itself? absolutely a category that we're interested in. >> a lot more on under armour and its technology plans next week. it's holding an investor day and we'll be talking to ceo kevin

plank. let's send it over to jon fortt with a look at "squawk alley." it's an important day for apple investors, we're going to dive in after this important week of apple news. what's going on in china? after all the volatility, where should investors be looking? and travis kalanick, founder, co-founder of uber was on colbert last night. we'll dive into some of the comments he made. at ally bank no branches equals great rates. it's a fact. kind of like mute buttons equal danger. ...that sound good? not being on this phone call sounds good. it's not muted. was that you jason? it was geoffrey! it was jason. it could've been brenda.

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good morning, it is 11:00 a.m. here in the financial capital of the world in downtown manhattan. it's 8:00 a.m. out west and "squawk alley" is live. ♪ ♪ ♪ start spreading the news ♪ i'm leaving today ♪ i want to be a part of it ♪ new york, new york >> welcome to "squawk alley" for a friday. joining us on set