the brand but the balls and clubs are all gone. thanks for having me three of these last four days. >> thank you for being with us this week. monday, tuesday, today. by the way, people can check you out later today on "power lunch". >> that does it for us. make sure you join us tomorrow. don't forget the jobs report. "squawk on the street" starts right now. ♪ ♪ sending out an s.o.s. >> good morning and welcome to "squawk on the street." i'm david faber with jim cramer and we are live right here at the new york stock exchange. carl quintanilla is on assignment in rio. how are the markets doing, you ask? let's take a look for you this morning. does look like we will have a bit of a higher open at this point. europe, you just saw it if you were watching andrew sorkin, it is higher, of course. the bank of england being one of the keys in terms of the 25

basis points reduction and that has perhaps helped. certainly in the uk itself as you see the ftse 100 up 1.3%. our 10-year note yield hovering let's call it around the 1.5 level and crude, which has been an important story in the movement of our broader markets during the course of this week, look the that, flat, 40.83 after dropping below 40 this week. let's get to our road map and it does start with the bank of england rate cut as it ripples across the globe. markets we will get mark carney's take. major media earnings, fox and viacom shares both moving this morning in different directions. what's behind the quarters at fox and viacom, what about the turmoil. frankly at both companies. tesla misses estimates, but that didn't stifel, what is this all in the family, stifel elon musk's optimism. we hear his outlook for the company's future. futures on the rise a bit this day after the dow broke that

seven-day losing streak. the bank of england cutting its benchmark interest rate for the first time since 2009. from what was 50 basis points to 25 basis points. the bank also ramping up stimulus measures and restarting its bond buying program aimed at offsetting economic fallout from the brexit vote. governor mark carney at today's news conference in london. >> the bank of england continues to stand ready to take whatever action is needed to achieve its objectives for monetary and financial stability as the uk adjusts to new realities and moves forward to seize new opportunities outside the european union. >> all right. >> consistent adult throughout the whole brexit phenomena. has said that he would stand ready to do this, so he's a man of his word. i find him to be a reliable central banker. i know there are lots of people out there who are ideal logs saying it's going in the wrong direction and doesn't have to do it. carney has said he was going to

do it. knows that the preliminary data certainly looks very weak and taking action. i think it's consistent and admire him for being consistent in an inconsistent country. what's become an inconsistent country with people who are totally unprepared and seem rank amateurs. i don't think of london and uk as rank amateurs but that's what they are. >> concern about the possibility of a recession and some of the indicators pointing to that outcome. >> i'm a believer long term in the uk they did better than the rest of the eurozone throughout this period, since the euro was formed they had much better growth, but carney is not going to let it slip away. and i think that they will come back. remember, france wants them -- listen, don't take our workers, you can't have our market. and their workers are mostly eastern and central europeans and are willing to work for less than a lot of the native population, according to almost every country i deal with. understand that's what this is about to some degree. of course, obviously, fears that

we have in this country about people coming from strange lands who could do strange things. so to speak. trying to be as euphemistic as possible. i don't want to fan what i regard as being -- >> potentially behind the decision to leave the you. back to interest rates, we seem to be the outlier on where we are we could tighten while the rest of the world, we say so many times, the bank of england continues to loosen if not be negative. actually penalize you for keeping in money. >> job growth, steve liesman talking about today, the thursday numbers, very strong. these are strong numbers. we are hiring people, now there's some parts of the country that are not strong. i am not in favor of rate hike, but big deal, doesn't matter whether i'm in favor or not. if you looked at where we were in march, for instance, versus now, i think we're weaker. our data has not been good in terms of our actual underlying say the auto industry, retail industry. you're struggling to find sales being strong in our country. but as far as relation with uk, we're more related to a wti than

we are related to uk. these initials. west texas intermediate controlling this market and whatever it goes above 40 and looking like it's going to 41 the s&p rallies and when it goes 40 going to 39, the s&p goes down. the algorithm is back as foolish as that is. the airlines, even though they do the best, because they're most sensitive to everything now. whether it be travel or spending or whether it be zika. >> interesting, travel you mention we'll get to some of the names later, but trip adviser -- >> horrendous quarter. >> sea world. >> people concerned there's not as much travel and on sea world people are wondering whether it's a read through given it's orlando to disney. people not going because of zika. i don't know. >> they're blaming, of course, latin america and the strong dollar. it is always interesting to see that universal has great numbers and disney which will report next week has great numbers but not at sea world. as if -- maybe there's nothing -- you know, i thought wasn't there some publicity involves animals there. >> phasing out the orcas, come

on. >> people have longer memories than they think. >> apparently so. >> it's not -- >> apparently so. >> to your point on travel i just wanted to mention these. >> travel is problematic. >> a number of conversations this morning people are pointing and wondering if there's a broader takeaway as opposed to specific sea world and the problems they'll had. >> you should go buy real estate in vail or steamboat springs. >> want to get above a certain altitude. >> 6500 feet why i prefer vail to sea world in terms of read through if you buy resort stocks. >> it hasn't made its way up the east coast or up -- >> what are you like some sort of -- >> i am. >> harder to eradicate. no kidding. all the tv doctors pretty smart have been saying there's going to be many cases between now and december. you know, maybe if the government were to fund an eradication program, or we developed a mosquito that can't breed. >> we can do that? >> we put a man on then.

>> i know we could. we choose not to. >> probably easier to put a man on the moon than kill mosquitos. >> not easy. we put him on the moon with what was nothing, no technology at all. >> true. analog. hey, she's giving it all she's got. when you think about how they've tried to eradicate malaria and using tents. >> yes. >> it's not as easy. mosquito is a pesky item there. i'm just thinking that zika, that royal caribbean where they just like the analysts didn't ask about zika and everyone is like, 20% of their cruises emanate from miami. >> yeah. >> i'm talking over here. >> i know. >> i'm trying to get ready for fox and viacom and i have so many papers to go through. >> when the commercial break is over we're going to focus. >> i'm focused. i listen with this ear and this eye looking down. >> in this ear and out that ear. >> where is it supposed to go? >> i don't know? we will go to media earnings. viacom up on better than

expected quarterly results better than strength in the film business. 20th century fox down despite a quarterly earnings beat really helped by a lower tax break. >> thank you. >> and so it came in in line the concern on fox, let's start there. i think is -- they're not going to be buying back that much stock. a quote from the conference call. we announce the 20% increase to our annualized dividend and an additional buyback authorization of $3 billion. however we will be highly selective on the deployment of capital towards this authorization over the next 12 months. our priority in how we annually allocate our capital will be to invest in a long-term growth opportunities to investing in our existing business, new initiatives or acquisitions which fooingal -- >> what did you think about the language about fox news, said listen all systems go. >> stay the course. roger ailes no longer here but we will keep going. makes sense to me. >> roger was not that indispensable according to that call. >> rupert murdoch -- not by the

way, james rupert murdoch his son, but rupert murdoch, is running fox news. >> i read the call. i thought the call was fine. the movies weren't that good. >> what's the -- >> you and i talked have so often about media in particular where cash flow generation is strong but the eps growth done through buybacks. take that out of the equation for fox, expectations are eps is not going to rise as much. >> through their lieu lu, they are -- hue lu, saying verification hulu valuation. i know the stock is going down. i understand that. i thought they acquitted themselves well on the cool? talking about the future and that's why they're keeping their powder dry and they feel like they're levered where they want to be. they've spent more in the past in cash flow coming in on dividends and buybacks and levered where they want to be and looking to make investments allah hulu and other streaming opportunities. they are thinking about the future -- >> not sports.

there was a moment they said we passed espn 2 and maybe took it as like maybe they would be bidding for the international rights of the nfl. >> right. >> which are going to be up. >> anyway, the stock is going down, but i thought in the end it was a great call to listen to. more entertaining than most than like whirlpool. >> oh. and on viacom, remember they preannounced. viacom had told us back in june it was going to do between $1 and $1.05. they came in at the higher end of the range, perhaps people happy about that. as our viewers know at this point, the key really is, what will happen in that raging dispute between fe lien dueman and board member george abrams and the red stone family. sumner and his daughter shari. going to be decided in the courts perhaps and not until october in both delaware and massachusetts unless we get a settlement, the journal earlier this week reporting there had been talks about such a settlement but they broke down. and jim, then it always comes back to the idea that i have

certainly talked about a number of times which is, if and when, and i think it is always going to be a when, power reverts back here towards national amusements and they replace the board, regardless of what the courts rule eventually it gets there, cbs and viacom coming back together is a possibility. >> why i think viacom is not dropping. frankly didn't hear much so far. one of your -- >> yeah. >> but there was -- they love vintage programming, david. vintage programming to me, that could be like lucy and desi which makes a huge amount of money for cbs or just more stuff that i can watch at my leisure and not watch commercials. i don't know. this story is to me a takeout story. at this point. it is not an earnings story. >> but the real story is which is fascinating because we never seen it before this incredible fight between, of course, the ceo, chairman and ceo of a company and their controlling shareholder and, of course, it really depends in part on what the court seemingly will at least at this point are willing to go down the road of trying to

understand whether sumner redstone under undue influence from his daughter and mentally competent when he did remove the board and make the changes to the trust and the national amusement directors. on the paramount side of this, on the call, dueman saying that process has slowed down in recent weeks but we have reason to believe favorable court developments last week will create a better environment that will allow us to progress with several parties to a highly beneficial transaction to present to our board, 49% stake in paramount. what i would tell you is this if you recall the changes in the charter and bylaws forced there to be a vote on the boarding sdrekts -- board of directors of viacom. shari and sumner do not support anything happening to paramount, period, end of sentence, regardless of what claim they are getting the 49% sold at. a belief that the optionalty they would be giving up, the changes taking place digitally and every way in terms of the studio environment are not worth

doing a deal at this point. and so fe lien dueman can talk about it, but he has to get his whole board at this point to endorse that deal and it doesn't appear that's ever going to happen. >> let's say we never hear where les moonves is in his, but, obviously, if les moonves does get stuck with viacom it would be paramount he would most want. paramount would be paramount. >> correct. >> i think that's a very good point. >> makes sense of all this which i have to tell you is one ugly fight. haven't seen one of these fights in a long time. >> so much more paper to go through at the very least. we're going to talk about tesla, and i know he's read the conference call. i was going through. what did elon musk say about the company's future and talk about square perhaps, and also nike co-founder phil knight told jim on "mad money" about the business of the olympics. want to hear that. and jack dorsey does have some reasons to smile this morning. >> he does. >> look at that move up. we will take a look at the better than expected results sparking a surge in the stock

but i will go into adjusted ebitda, adjusted revenue, adjusted everything. >> less worried about credit. are they making us to go to a commercial. hash this out about who's listening to who. >> i'm not hearing you right now. look at the futures and more "squawk on the street." mary buys a little lamb. one of millions of orders on this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack.

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square up sharply in premarket. the mobile payments company run by jack dorsey reporting a revenue beat narrowly than

expected quarterly losses by a number of merchants singh on to use the service. the top line transaction growth number up dramatically. >> yeah. >> and that's encouraging for people. >> 42% growth in the gross payment. that's one of the things like ebay where you will focus on that. total net revenues plus 41%. adjusted ebitda, we're critical of, plus 7, which management knows how we feel about that. i would point out that i had credit risk worries here from the last time and they are assuaged. i think that the company showed you that they got more people willing to buy their loans, large institution, that they are keeping a respectable amount of loans on boards but nothing special in terms of being able to have credit risk. i'm taking that off the table. one of the reasons the stock does have about 19% of the float short is going higher not just because they guided revenues up. a lot of people felt much better about the credit risk issue. don't forget who's running the credit.

david viniar, who is on the board. >> right. >> he is not about to let -- >> former cfo of goldman sachs. >> total hitter. larry summers on that board, mary maker on the board. >> with the well-known board members we see adjustments -- >> >> no. >> i don't think it's [ inaudible ] at all. these people understand financials. >> heavy board. >> one of the companies and so many now that everything is adjusted. revenue is adjusted, ebitda is adjusted and it is worth taking a look at what they're adjusting for. the key, share-based competition. $37 million. i think we have a chart take a look. they do have a much higher percent of stock based compensation than many of their competitors. >> not as much -- >> that was 15. look at that, jim. >> who they have less than. >> who? >> twitter! >> twitter is not on there. >> twitter also run by -- >> jack dorseys like to run company where there's stock based comp. >> an issue. >> it is adjusted, the ebitda, $13 million for the 37 million

in that, starbucks transaction costs, starbucks transaction revenue, litigation, expense, other income, income taxes. get to the 12.5 million adjusted ebitda number. i would also point out they don't -- and this is interesting in the fine print, and a lot of companies don't do this either but i had to read this to you, not reconciled adjusted ebitda guidance to gap net loss because we do not provide guidance on gap net loss with items between adjusted ebitda and gap net loss. share based expense wrults of the uncertainty of the potential variability of the items. accordingly a reconciliation of the non-gap financial measures to the gap measures not available without unreasonable effort. >> look, this is like joey brown at "some like it hot." nobody is perfect. there are big issueses. i will default to the traditional revenue analysis the big thing people --

>> that's what they're looking at the top -- >> looking at at this thinking lowell mcadam you put this together with yahoo! and aol and tell everybody. look, this is a company that is going to have super growth for a long time, small and medium size businesses use this. they take a chunk of your receipts every night and if they loan you $6,000, they get their money back and then they take that and they bundle. that's a big part of the business to give you the equivalent of a cash advance which is done as a bond. as a small business owner, david, full discussion, we use caviar, which is one of the businesses, delivery business, looked at their product, but their product is a lot of the small business people like it, does have -- huge number of customers. example the scottish plumber based in chicago and three steves winery. look at that and say, well that's indicative of absolutely nothing. but i would say it's indicative of the fact that small business people like the product. i am not recommending the stock. i am saying that my -- the risk

that i saw to credit was alleviated by some very straightforward, sara fryer, totally legitimate cfo has in this really equated herself as david vitter. you want super high growth, i turn your head toward facebook. where you don't have a lot of these issues. your biggest issue at facebook will sheryl sandberg be treasury secretary if mrs. clinton wins president. that's my biggest worry about facebook. not the earnings. >> that's interesting. i hadn't given that thought. i will now. >> she would sell stock. >> she would be the treasury secretary. >> that's my worry that's who's selling stock. that's a legitimate worry. >> it is a legitimate worry, yeah. >> up next maybe more worries from jim, of course, as we count down to the opening bell. we'll have his mad dash and another look at futures here. you can see we are set up for what appears to be a higher open. we got a lot more "squawk on the street" straight ahead.

all right. time for a mad dash on this thursday about six minutes before the opening bell. you want to talk a little herbalife. >> i did see [ inaudible ] in october. fabulous. herbal life better than expected quarter talk about 485 high-end range, figure out what to play for a multiple. gnc, like seven times multiple

be careful, the stock may be over valued in terms of earnings. it's a short story. it has 30% short of which we know, i'm sorry, bill ackman is against this company. most of the call has been embracing the ftc's new rules saying it will be good for the company. remember, there was a walking dead analogy by ackman saying that they're basically dead, don't know it. it's funny, because michael johnson, the ceo, did not sound dead. he doesn't know rigor or more tis and what i'm saying is what he's saying these are all going to be great and everybody lives happily ever after. what's he doing with the cash? they do have a bank deal that is not friendly to buybacks. giving the impression that ends in march that he will be in all, nothing about icahn. >> in terms of the settlement of the ftc they have to show receipts for everything sold. >> he said that's great. they have a mobile app that's going to be great.

>> that's not going to be easy to do. >> i think there's implementati implementation. three pages in the conference call about implementation and how they can do it and they're doing a parallel track between what they're currently doing and have to do that will all be resolved in the wash. put it this way, if you're short it, you see enough to be skeptical. if you're long it you're feeling great. come in and buy it just saying i'm going to break ackman. i never found -- that's not a reason to buy something. how about earnings per share and growth. the jury is still out but the people will say hey, let's break ackman. >> all right. we got an opening bell and an ipo coming up here. you can hear some of the cheers already for at home. stay with us. at pg&e, we believe solar should be accessible to everyone. our partnership with habitat for humanity

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today. sells furniture, garden goods, home textiles, rugs. i don't know. >> it's not the key to this market. what is? >> there are two things. if you ask me about the [ inaudible ] it's going to be oil. because oil below 40 is going to cause selling, regardless of what happens in europe. it's apple. because tim cook tweeted last night about the unbelievable month that the app store had. obviously those of us who downloaded pokemon go know that's a tall road for apple. if apple can continue it has been one of the strongest tech stocks and it's a big stock. >> it is a big stock. >> watch apple. >> 568 billion market value. see, of course, that has an impact on the s&p 500 as the real-time exchange gets itself going at headquarters. >> tim cook that was tweeting. the real tim cook. >> at home ringing the opening bell. at the nasdaq it was first interstate bank system. headquarters in montana. >> first interstate bank. remember [ inaudible ]. that's going to get taken.

that's going to get taken out. you know, the banks collapsed, didn't matter. >> it did. although man there was a lot of bank consolidation when i think about it. >> remember security pacific, bank of boston. >> think about how many banks comprised chase right now. it's chase, it's manny hani, it's bank one, first chicago, it's jpmorgan. >> yes. >> that's five right there. >> was it mentioned in the "vanity fair" article about wilfred frost he interviewed jamie dimon at 1:00 on monday. >> did that happen? >> i don't know. >> amazing. the bus tour, coming up. >> got to love the bus tour. >> the bus tour. >> now, david, jpmorgan stock is doing quite well. >> yes. the banks had a good day yesterday. >> did you see that? >> i did. why? >> i think people feel that rates are going to go up. see the rates cut over there. i don't know. uk. >> european banks had a bit of a

rebound too. deutsche bank hit a -- >> well because hsbc announced a buyback and the british banks, obviously, need higher rates. they've been under pressure. looks like the oldest bank in the world could be okay, based in siena, a gorgeous chance. >> i have been to siena in the last three, four years. beautiful. >> second beautiful building after the church. >> in the square. >> better than hershey which i think is in play. >> interesting you say that. i don't know if it's in play. only one potential buyer, mondelez is not going to say much of anything for a while as the trust, the hershey trust -- >> waiting for the attorney general state of pennsylvania to be involved in it. >> yes, and see what you end up with on the hershey trust and maybe if you're mondelez you come to play again. >> i just think it is important that you shot -- remember when you killed kellogg. >> yeah. >> kellogg reported really -- a very good quarter in terms of costs. >> did it. >> once again that stock is flying. kellogg's hard to kill because

the cereal business and general mills is better. they keep taking out costs. sometimes i hear taking out costs and i say where. a lot of that turns out to be technology, that technology is replacing people which is part of, of course, our problem. >> as you say kellogg up nicely and that overall theme of consolidation in the food industry. >> yes. >> shouldn't be dismissed. >> no. too many players and the supermarkets are pitting one against another and b and g foods the winner because they bought green giant. whole foods, upgraded credit suisse. i thought the upgrade was fatuous, not of great importance, pricing upgrade. i think that supermarkets have been under pressure. every company in that industry is under pressure. and so i would point out that when kellogg reports this so-called good quarter without a lot of top line growth, it's pretty impressive. who had top line growth was clorox and the ceo, on "mad money" last night, he switched now 40% of his ad budget is

social media. and internet. because he says you got to go where the customers are. i think that's interesting because you and i talk a great deal about the media. >> we do. >> if other people in the consumer package good stocks company would listen to what ben said on "mad money" they would be taking their money and sending it to facebook. >> facebook. >> if there's a reallocation away from traditional to facebook, which i mean it's not just -- so their pie is growing, because the overall pie of ad spending isn't growing that great. >> they use alphabet too, but facebook is really very powerful. >> it should be a concern. let's talk about the man who freaked you out some time ago when he called you a simulation. >> he said there was a 50% chance i was a sim blulationsim more than that. tesla reported earnings not well met. the stock not doing much of anything. on the call always interesting to listen to mr. musk talking about autonomous cars, the demand for au tan muss cars will vastly outweigh the production

capability. he believes that, you know, it will -- we have 2.5 billion cars out there right now, total vehicle production per year is about 100 million so your fleet is turning over every 20 to 25 years. you would have to make enormous number of autonomous vehicles for there to be any land saturation because it will basically be the only car anyone wants to buy. >> well look, there's -- this is a tale of two cities. there's the vision, the vision, the master, the belief, and then there's the numbers. jpmorgan today has a sell on it. started the 2016 estimate at $4.62. then they cut it to $2.74. david they're using a loss of 32 cents for the year. this is incredible. my favorite line in the conference call, very enterta entertaining, musk talking about going to some supplier this weekend and explaining the way of the world because he's ruining the assembly line. he's doing cars per hour. that's an interesting measure. i hadn't thought about that. my favorite line in the call, if you exclude model -- sorry, this

is funny, if you exclude model 3 capital expenditures, then, in fact, it really for q3 and q4 tesla will be profitable excluing the model 3 capex rate. if they didn't have to build factories and cars they could make a fortune. >> can they adjust for that? >> i think you have to adjust for factories. >> yes. >> that's not -- >> no. >> that's not capex. >> not part of the business. >> people understand obviously he's selling cars and building new cars. but can you imagine if ford came out tomorrow mark field said listen i have to redo the company. we're building all these factories in mexico, forget that. we've got new -- it's meaningless. we will do hours of cars that we make per hour. i mean, people would say mark fields is a simulation. but the stock is barely down. >> stock is barely down. he did say on the call that bringing spacex in addition to

solar city wouldn't make sense. >> did the analyst who asked that question, it was like -- that guy should leave. he should leave for like celine dion. >> a guy asking a question for jonas, the big -- >> he said i am doing it for jonas. >> word for word. >> this is jonas' question. it was another like -- is your space company -- >> compatible. >> i know. >> this call i remember when i first got to goldman and i would like -- i was on some call where like a ceo had like completely just lost it and people like took the stock down 10%. here, he's big think, david. >> big think. >> elon musk is big think. >> too big for me. i am a mere more tall. michael angelo, da vinci, best haven, mozart, cramer. >> no musk. >> musk. >> and throw in edison. at one point -- >> how about tesla itself. >> you mentioned edison, i think

of tesla. >> everybody comes up in this thing. this is a -- this is a great american novel, the tesla conference call. it's a great american novel. >> really? >> faulkner. yes. >> hemingway? >> the sound and fury. signify nothing. >> oh, my god, things are flying here. look people are laughing. having such a good time. >> i'm the opening act. >> the crowd talking to us now. >> we don't go there. >> all right. i do want to point out before we get to bob, viacom and fox are now down. viacom had been looking up, not sure if it was some of the conversation on the call about paramount or what not, but that stock is also down in addition to fox. let's get to bob. >> yeah. >> you can go through your notes. maybe throw more stuff at people. bob? take it away. >> hi, guys. we have a split market, about even on the advance of the decline line. i want to show what's going on

over in europe. bank of england cutting rates, launching a bond buying program. interesting what's it mean for the equities markets. moved up notably, but then most of the markets settled and came back down after that. i don't know, cutting back on growth estimates, can't be that great so now we're trying to account for brexit. i think it seems to be fairly neutral for the stock market overall. here in the united states continuing to look lieu a lot of the energy companies. all the big exploration production companies have been reporting in the last couple days. mixed results. continental slightly larger loss than expected. they're increasing their production guidance, chesapeake, slightly bigger loss. all the companies have losses essential essentially. apache reported a gain only on adjusted basis, bear that in mind that jim was talking about adjusted and what's going on with them. by and large, take a look at what the trend is here and let's not go over all the numbers, production is generally up, chesapeake and continental, for example, raised production guidance. why is this happening raising production guidance with a glut

out there? because they're all cash flow negative. they're spending more than their cash flow they have to get the flow up even with low oil prices they have no choice. most of them are continuing to sell assets, heard that from continental. apache, most do not predict where oil is going anymore. that doesn't work. but apache very conservatively said we're planning for oil to be $35 through the rest of 2016. that's a conservative estimate. and their overriding goal spend within their cash flow. they're trying to strengthen the balance sheet, trying to pay down debt, trying to stay within their cash flow overall. let's move on and talk about kelloggs. the same problem all the gigantic consumer companies we talked about, clorox and coal gate, same thing, stagnating sales, lack luster cereal sales in this case, but look here, $13 billion and you can't really move the needle. they get almost half of their earnings outside the united states. probably 60% in the united states, 40% outside the united states. but it doesn't matter. what do you do when you have

this? all you can do is keep cutting costs. they said we're looking to increase our profit margins next year and beyond and that's how you're going to do it. this is another one of the consumer darlings. it does have a very respectable dividend yield, 2.6%, that's above the s&p 500. shows up in a lot of dividend playing etfs and like many consumer names, historic high, just two weeks ago, was a historic high, close to $87. i believe that was the high two weeks ago. so holding on, continuing to find ways, increase the profit margins and keep cutting costs overall. a couple ipos that have so far looking very good. first hawaiian, when is the last time you saw a bank price here. first hawaiian the biggest bank in hawaii and first to go public, the first big one, since citizens financial out of rbs in 2014. a bnp parabass spinoff, high end of the price talk, 21 to 23. should open in an hour on the

nasdaq. here at the nyse behind me we're waiting for at home to open. this is one of the big home decor super stores, here talking to them, 115 stores in the south and midwest. that's right in the middle of the price talk but we got indications on at home behind me at 16 to 18. so as of now looks like we have another fairly successful ipo. right now the dow up 30 points. back to you. >> thank you very much. mr. pisani. let's head to chicago and join rick santelli in the cme group in chicago, fixed income this morning. rick? >> good morning, david. well, the stencil in place with what karnry in did the same as whatever mario draghi does something, janet yellen, ka rhoda, everything seems to affect all the other global sovereigns. there was one, though, that was a bit minl and we will a goat that in a minute. two day of 10s, see how rates were affected, moved lower, hovering around the 1.50 mark,

1.36 is the low closing yield. we're not quite close to it yet but we are at the bottom of an established range. just couldn't close above 1.57 to 1.59, two day of bunds, low closing yields, shy of minus 20 basis points. you can see the effect there. very similar to 10s around minus 7. yields under 70 basis points, rather extensive move but orderly. one market that didn't participate with the 10-year jgb, zap fees government bonds. they already had their date with higher yield destindestiny. more of a position swap than a strategic change with regard to the outlook of negative interest rates by investors. if we look at the foreign exchange markets and we have to calibrate how your adoing on your bonds and stocks, the calibration, the ante into the pot is the currency of whatever you're investing is denominated in. one week pound versus the dollar

the move was expected. it was about 1.8%. look at high/low on the swift move, but the five-day chart puts it in perspective, how the bottom compares to the left side. let's look at a one week of right in their backyard pound versus euro. slightly smaller full breath move maybe 1.6% versus 1.8. close enough for government work, but as you look at the chart formation, not nearly in a five-day range quite as aggressive as versus the dollar and that's important because there's a lot of issues, obviously, going on and will be going on with negotiations on brexit between the eurozone and the uk. david, back to you. >> thank you very much. rick santelli. coming up, nike co-founder phil knight on how that company is positioned for the olympics. you're going to want to hear what he told jim on "mad money" last night when we return.

competitive arena is our fashion runway if you will. that's where we show our stuff. and show that it's -- it is the

best product because it's being worn by the best athletes. so the olympics are huge to us. it's the ultimate athletic contest. and we're very optimistic on how we're going to show in rio. ic. >> co-founder talking about the business of the olympics on "mad money." >> and by the way, ever since then, nike had a call that was trg. phil night in this show dog, autobiography and business book, talks about the notion of how nike made its bones at the 68 olympics, 72 he talks about munich a lot and how hor thabl was and how depressing because of what happened with the tragedy there, but it is -- the olympics are the keystone of a whole group of industries and i thought that was very opeappro of where our partner is. i love this book and have him on tonight and a lot of soul

searching about how the book talks about how you think it's going to fail but it became the most successful sporting goods company of all time. >> it did. >> one of the 25 richest men, about as humble as when he started. he's amazing. i'm going to put it out there. i said at one point you are an unbelievable writer. he's got -- not achiever, not -- you know, not o'hara, but like a [ inaudible ] of those, great american novel that's a true story. i have to hark back to writers in earlier days because it's so magnificent. reminds me of appointment in samarera. >> really? >> yes. it is that good in terms of its absolute anglo-saxon verbs, beautiful elipsies to make points. one of the best written books. he wrote it. this is the book to read. >> i'm going to read it on the beach. going to read it on the beach in a few weeks. >> how to start a business, how

to be an entrepreneur, writer, american spirit, oregon. [ inaudible ] he's an amazing man. there. said it. >> you've said it all. still got more to say. >> at one point i said i'm sorry i'm so -- i just think he's the great american story. oregon the great american state. >> all right. more to say about stocks moving and stop trading with jim. "squawk on the street" is coming back.

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>> wendy's reports next week. this industry, darden was bad. you're looking at an industry that is really more case by case than i've ever seen it. those saying the restaurant business is bad, they shorted jack and now they must not know jack. okay. >> as for ball. >> ball is the government allowed rexam to merge with ball. basically the biggest canners. i mean this type of thing if i was muhtar kent talking about pepsico and coke, this was a travesty they let this happen. a concentration of power that the justice department should not have -- i mean they should have figured out a way to stop the deal but they didn't and ant this is what happens when you have massive consolidation where they can call the tune. and look at that thing, will you. that's just a bottling -- it's a candy company. also an aerospace division which i suggest they sell right now and pick up the additional deal and refinance the debt.

my own view for ball corp because i thought this deal was unfair for the public. doesn't matter because they're so busy trying to stop office depot and staples which was crucial. >> yeah, that was a strange one. baker hughes, halliburton. >> all the hmo deals. it has figured very prominently of course in the m&a landscape that is the regulatory review. >> radical -- >> not just here but china and other places and the eu. it is a big gating factor to doing a large deal. >> i think that's important but they should really rethink -- it's too late now with ball corp. you saw a remarkable quarter coming and few when that consolidation occurred they would be able to put the screws to everybody, their suppliers, to their customers. just wrong. that's my soap box for the day, what i care about is ridiculous. the anti-trust and the canvas. >> what will y care about tonight on mad. >> phil again. >> again? >> and i have buck. i have a second -- tonight the

soul search night. >> okay. i was trying to -- >> got it. >> part two of phil night. and deckcom which has a remarkable machine for diabetics, hopefully the fda will see that you can start paying -- let medicare pay for the dexcom machine that will make it so you don't have to pick your finger anymore. >> right. >> okay. >> by the way -- >> costco the read through of the numbers was immediately bad. please, when you see that, you've got to do homework. it was not bad. >> not bad. >> by the way your key to the market, apple now up for the year by half of a percent. >> there you go. remember when everyone said the future was past and the future and the best days were behind them. that stock was at 93, david. >> yep. >> when everybody -- remember the obituary people had written for apple. premature. i will be here tomorrow. >> i'm glad because so will i. >> i will be here saturday. >> i won't be. >> no one will be here. don't come saturday. >> i will be mumbling. >> in your garden with the tomatoes and sending us tweets of your giant things. >> organic and natural.

>> and the dog and turtles or whatever that tortoise is. >> that's cactus. >> cactus going to outlive everybody watching the show. african tortoise. >> something in your will to take care of cactus? >> and watermelon. she eats the rind. we got to go. we have an ipo that we're going to be talking about. the ceo of at home, they're getting ready to price that thing behind us. we'll have it after this. todd spaletto, president of the north face, we are working on the prototype to match customers to gear. watson, let's give it a try. say it's mid-june and i'm backpacking in yosemite. of our 353 jackets, i can recommend nine. watson, what if it rains? there is just a 3% chance of rain, so i recommend the breathable stretch fleece fuse form dolomiti jacket. a perfect choice watson. no wonder our customer loyalty numbers keep climbing. i believe we can do even better. i like the way you think. everyone talks about what happens when you turn sixty-five. but, really, it's what you do before that counts.

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♪ ♪ oops i did it played with your heart and got lost in the game ♪ good morning and welcome back to "squawk on the street." i'm sara eisen with david faber and mike santoli live at post nine from the new york stock exchange. carl quintanilla is on assignment in rio. take a look at the market. looks like we've given up some of the early gains. the dow now goes flat to down a few points. s&p 500 as well as the nasdaq. oil, too, has reversed some earlier gains. is trading just above $40 a barrel. we do have breaking economic data to get to. let's go over to rick santelli at the cme group with factory orders. rick? >> absolutely. a litany of data points. actually factory orderers is a

june number down 1.5. obviously that isn't a fantastic number, but it's actually less than we were looking for. we're looking for down closer to 2% and when you factor in the revision, we lost 0.2 from down 1 to 1.2. fascinating, let's look at durable goods orders, june final. we're comparing them to june preliminaries which we toss out. so the headline number on durable goods is down 3.9. that replaces the down 4% that we originally had and if you look at ex-transportation down 0.4 and the original number last time was up 0.1, so down 0.4 goes into the books. about as expected. but it makes a lot of negative numbers for the year. and maybe the most important number for all of the traders on the floor, business spending. so if we look at capital goods orders, nondefense, ex-aircraft, good news there, it's up 0.4 of 1%. followed by an up 0.2.

what's interesting about that, the 0.2, the number for may was 0.5 down, and this is the best number since the beginning of the year when at 2.4. any good news in this number, it's that capital spending, business spending is better than expected. sara, mike, and the gang, back to you. >> rick, thank you very much for that breaking data. with the dow down 17 points, of course the other big market story of the day, the bank of england cutting interest rates, first time they've done that in seven years. producing the benchmark interest rate by a quarter of a percentage point. our jeff cutmore joins us live from london. jeff, lowering rates wasn't the only thing that bank of england did this morning. >> well, the total surprise here. this came out of the central banking book of shock and awe i guess because we had pre-signaled by the bank, back in july, that they thought they might need to cut rates as a result of the outcome of the

brexit vote. the vote to leave the eu that the referendum brought us. we anticipated a 25 basis points cut in rates to take us down to 25 basis points. on the key policy rate. what the market didn't expect is a more comprehensive package. what they've done is said, there's 100 billion pounds worth there to support the banks, to make sure that this cut in rates doesn't cut too aggressively into net interest rate margins. they've also produced 70 billion pound sterling to be used for an asset purchase program, 10 billion of that will be corporate bonds, 60 billion for kilt and that has taken the market by surprise. quite a dramatic move in sterling lower and we've also seen the ftse bounce as people have got more excited about that stimulus. but there is a little bit of head scratching here and what mark carney and the bank seems

to be saying is, growth is going to fall off a cliff in 2017. you look at the second quarter, we had an annualized run rate of about 2.4% for this economy, which looked really good on developed world standards. now they're saying 0.8% for full year 2017 if we're lucky and as a result of the measures that have been introduced here and the bank is also claiming that we will see a spike in unemployment and also see the third quarter of this year deliver about 0.1% growth which would be a significant change on the quarter on quarter figure that we were anticipating. so big surprise here from the bank of england today and i think it's going to take a little while for markets to decide whether this was the right step or too aggressive in monetary terms at this stage. and on top of this, the bank already signaling that they think rates could go down to

near zero before the end of the year. back to you. >> all right. thank you very much, jeff cutmore in london to media earnings, viacom which reported this morning initially was up and is up a little bit right now but had been up sharply after its quarterly results came out. the call wrapped up a few moments ago. 21st century fox, reported after the bell yesterday, and you can see it is down after well the earnings were in line but they were helped by a lower tax rate. the real concern at 21st century fox has been on what appears to be a buyback that will perhaps not be in play as aggressively as it has been in the past. because they want to make other investments and on the call itself the company saying that while they announced a 20% increase in their annualized dividend and additional buyback of $3 billion, they will be highly selective on the deployment of capital towards the au norization over the next

12 months. our priority in how we annually allocate our capital to invest in long-term opportunities and investing in our existing businesses, new initiatives or acquisitions, investors taking that as fewer shares bought back, hence less benefit in terms of earnings per share, given there are fewer shares outstanding and a key way that earnings per share have increased dramatically from any of the media companies, not necessarily through top line growth, but by shrinking the number of shares outstanding. that won't be the case there as much and the stock is suffering although they did talk a great deal on the call about the future. on viacom, the call concluded you saw the stock is up. [ screaming ] we had an open on at home. you want to get to that right now? what did they price it? 16.25 looks where it's opening, 16.40. priced -- >> up 9% from what it was priced at 15.

we'll be having the ceo join us actually shortly to talk about this company which got about 94 stores across 26 states, 54 markets. still less than a billion dollars in overall revenues, guys. they call it an emerging growth company. >> which is interesting for retail right now. >> emerging big box retailer. >> yes. >> but the housing part of retail, the home depots and lows have been a bright spot this focused on furniture, 25% growth last year not too shabby. >> little hickup in comp store sales recently last month but home goods, that piece of what tjx. >> yes. >> is considered to be, you know, one of the jewels of that company as well. >> so much bigger store format than that. >> yeah. selling by private equity here to repay indebtedness not to necessarily provide growth capital. i'll finish up on media quickly, viacom not much to tell you here, they went on the call and talked about the trials in

delaware and massachusetts, not much beyond that as the raging fight continues between felipe dauman and his controlling shareholder sumner redstone and national amusements which owns the stakes in cbs and viacom. the stock not doing much at this point. the paramonth transaction as i many times the likelihood they'll get to the finish line seems to be small needing they need unanimity on the board in favor and sumner and shari are not involved in any part. >> another earnings mover at the top of our agenda is tesla. reporting a loss of $293 million. in the second quarter. that was well below what the street was expecting. but sales growth on the other hand continues to outpace rivals like ford and gm despite some production problems. >> basically we're in production for the first six months of this year, man it was hell. and just managed to sort of climb out of hell, and like

basically through june. and now the production line is humming. our suppliers mostly have their [ bleep ] together. a few that don't. one i will be visiting on saturday. personally to figure out what the hell is going on there. >> production is humming along. let's bring in dave, senior automotive equity strategist who covers the stock at morning star. is the story that the outlook on production elon musk committing to 80,000 cars in 2016 more reassuring than the bottom and top line results? >> to an extent. you certainly don't want to backtrack further than what they had done earlier this year and seems like the second half is going to be smoother at least for the existing product line [ inaudible ] for a ceo to say we were in production hell that's rather unusual. but i do respect elon for always telling it like it is so to

speak. but it's -- it really isn't about any one quarter with the stock unless you're a day trader. it's really what can this company do ten years or more out. that's why it's valued at $33 billion right now. >> but you have to be concerned as an investor, he reassured with plans of 50,000 deliveries in the second half. why should investors have faith in that from a company ceo that says they have production hell and have had so many delays in the past? >> fair point. fair point. i think like everything else about the company, you either are all-in on elon or you don't believe what he says. and that's up to every individual investor. give them the benefit of the doubt they're going to get better over time and they have, to 80,000 this year, fairly short amount of time, still tiny but it's amazing progress when you think about that. but you're right there's always a lot that can go wrong and we haven't seen the company go to a recession yet either. >> if there's a surprise here in

the reaction it's that stock has barely moved at all given the fact that it is highly valued and there is so much play in terms of what could happen in future quarters. is that just because you have the naysayers balancing out, 20% short position, balancing out the true believers at this point? >> well, i think this quarter was a little unusual in that although it was a busy and event filled quarter everything was public information before yesterday's earnings yesterday so there really wasn't a lot to talk about really other than the adjusted free cash flow generation [ inaudible ] that was a pleasant surprise. even that will get worse in the second half of the year because their capex was heavily loaded. >> yeah. a lot of people speaking to that better cash situation. thank you. we'll leave it there. dave whitson from morning star has a hold and 259s price target on tesla, sharply higher than it rise now. when we come back larry kudlow with his thoughts on the recent turmoil inside the trump campaign and the at home ipo as

we showed you started trading, trading higher to the tune of now 3%. opened higher by 9%. lee bird will be with us straight ahead. what's happening here? this is my new alert system for whenever anything happens in the market. but thinkorswim already lets you create custom alerts for all the things that are important to you. i guess we don't need the kid anymore. custom alerts on thinkorswim. only at td ameritrade.

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hampshire. meantime the trump campaign is looking to get back on message amid reports that allies including newt gingrich and rudy giuliani looking to help pressure the gop nominee to tone down his rhetoric and the candidate tried to tamp down rumors the campaign was in disarray yesterday at a rally. listen. >> i just want to tell you the campaign is doing really well. it's never been so well united. we're doing incredibly well, leading in the state of florida. you saw the poll. we're leading in ohio. about tied in pennsylvania. but i think we're going to be leading the next time. so i think we've never been this united. >> for more on the mood inside the trump campaign let's bring in cnbc's senior contributor larry kudlow, and informal economic adviser to the trump team. larry, what can you tell us? how in disarray is the trump campaign?

>> look, i'm not an employee. i'm not there every day. i'm involved in some things as an economic speech coming up i hope we will talk about that, but i think the rumors are vastly overrated, vastly overrated. look has mr. trump made some off the cuff remarks that he probably wishes he hadn't? yes. yes. does he sometimes do that? yes. okay. having said that, he will be back on message, going to give a full economic message on monday to the detroit economics club. they're working on it right now. and it's going to be very substantial, pro-growth message. i want to emphasize this. significant business tax cuts across the board, significant personal tax cuts across the board. reduction of regulations on energy, on obama care. it's going to be a barn burner. the issue here, i know everybody wants to talk about all these things he said and i'm happy to respond if you like, but look, the economy is in lousy shape.

that's what we learned last friday. we are perilously close to a recession, growing at about 1% trend for the past year, not even at 2%, and the 2% was the worst recovery going back to world war ii. trump is going to focus on his growth message and frankly, i don't want to be partisan but look, show me, what's hillary's growth message? just tell me. she wants to raise taxes on rich, she wants to raise taxes on corporations, she wants to raise taxes on financial contributions, financial trading by the way, she wants to stop energy, fossil fuels, coal, where's her growth message? trump has one and unveil it monday at the detroit economics club. >> change anything in terms of his tax plan, as you know, the committee for responsible federal budget, which is pete peterson's group, nonpartisan, say the tax plan that he has in place now, the best they can tell, would add $10 trillion to the deficit over the next

decade. $10 trillion. >> well that's not an original thought, by the way. all the static models have come up with the same thing. on the other hand let me say this, david, as i've been reporting to you all, i have been informally advising on this, trump'ses new plan will show stronger economic growth and substantially lower budget deficit. substantially. it also will include significant reductions in federal spending, it also will include significant rollbacks of deductions, the so-called tax expenditures, for the high end folks. so it's going to be a great economic growth reform plan. and i can't give you more details, i'm sorry about that. monday, detroit economics club, i have a seat saved for you on the campaign plane. i do. i have a seat if you need one. >> really? >> just say the word, just say the word. >> i can join you on the plane. i will think about that and we'll check in. >> asking about hill harry's message on the economy. >> yeah. >> she is, though, starting to hit trump on the fact that his

own businesses have outsourcing. >> yeah. >> as part of them. his ties made in china. how can he go out -- >> why is that bad? >> because he goes after an apple, goes after a na business co, mondelez, for producing in mexico. >> he is going to create a tax plan, this is -- the corporate business side of this plan is going to be so important. because whoever you are, whether you're trump inc or amazon, apple, this is going to create new incentives, so that american companies stay home, number one, okay, it's also going to create new incentives so that foreign companies will move their cash into the united states. it will also provide incentives for repatriation of american cash overseas. this is a key part of the plan. i am estimating, i'll take the wrap for this, i think you get a good $3 trillion of international money coming into the u.s. because after this plan, the united states is going to be the most hospitable, investment destination in the

world. we saw this in the '80s. we saw this in the '90s. we lost it in the last 15 years under republicans and democrats. he is going to restore that and boy, that money investment, companies, jobs, wages, that's what we need to stay out of recession. >> larry, have you seen any evidence that pro-growth policies, any particular policy proposal is something moving the needle when it comes to support for either of these candidates right now. doesn't seem to be about here's what my plan will do for the economy in dollars and cents. >> trump wins on the economic matchup by 7 or 8 points. but no, i agree with you, mike. it's funny, this election has not yet really focused on the economy and the lack of economic growth. i find that curious -- >> it's not that curious, larry. your candidate is all over the place. >> no. he's been very -- >> he's not necessarily on message conceivably. think about what we've been talking about over the last week. haven't had a debate on the

issues in part because he's not talking about them in a detailed manner in any way. >> it's coming. trust me. i'm doing the best i can. i really am. >> you're only informal. so can you get formal and does that change thing. >> i will take my tie off and be more informal. but i want to say, i think you guys are tough, i know that about you both, i've known you a long time, you will see a lot of details you haven't seen before and i think the refocusing of the campaign message will occur. that is my hope. i'm not a political genius but i will say this, hillary doesn't want to talk about the economy. trump does sporadically when he's on message. i get that. i think you're going to see a new, new beginning on this point. look, tell me, every election, peace and prosperity, peace and prosperity, go back to my boss ronald reagan, peace and prosperity, right now we have neither. that means to me, a, this whole

race is fluid, and b, if mr. trump gets his economic plan out on monday, in detroit, as i believe he will, it's going to help change that conversation. i'm not denying mistakes. believe me. i'm not. i myself tweeted i'm in favor of paul ryan being re-elected. okay. i'm not denying it. all the other gaffes he's made. on the other hand a friend of mine texted me this morning, at the same point in 1988, senior bush was down almost 20, all right, ronald reagan at the same point in 1980 was down about 25 points going into the first debate. we forget that. so, you know, the report on trump's polls declining is correct. everything you said is right. but you talk in seven, eight points now, it ain't much. it's early in the game. give me economic growth. it's the kudlow mantra. is have often have you heard me say, slash the corporate tax rate, slash it. >> we will see.

>> beat it down. >> if donald trump gets on -- >> with a hammer. >> we will be watching that speech in detroit on monday. larry, thank you. >> thanks for having me. >> larry kudlow. >> all right. well when we come back at home making its debut at the new york stock exchange. stock went public at 15, traded to 16.25, up a little bit, we'll have ceo lee bird next. the heirloom tomato.

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at home the texas based big box retailer ipoing this morning here at the nyse. the shares are more or less flat at the price of 15, up 10 cents, debut was a few minutes ago and joining us first on cnbc is the company's president and ceo, lee bird. nice to have you here. >> thanks for having me. >> always a big day, of course, for ceos when they bring their companies public. you have pretty ambitious plans when it comes to store expansion. right now you have what 94 stores roughly. >> 115 stores. >> i'm incorrect on that. 115 stores. >> 115. >> you want to open at least 20 new stores a year. >> we do. >> how are you going to be able to do that. that's a pretty big percentage given your base. >> we've done that in the past so in the past three years we've been growing at 20% a year and last year our unit growth was almost 25%.

just as proof points we could do that. we feel really comfortable we can deliver at that rate going forward. >> why? >> because we've been able to be successful everywhere we've opened. we've opened up in 30 markets curing that time and opened up across the country from phoenix to salt lake city to minneapolis to washington, d.c., to -- and we'll be in upstate new york by this fall. >> and what are you seeing right now in terms of the appetite of the consumer? when it comes to retail, and obviously it's a huge universe, but there's a lot of division in terms of some things that look good and others that don't? >> right. i think the consumer is cautious with their money and so we are a value player. our prices are at our below our competitor sales prices. when they're thoughtful about their money they can find what they're looking for. >> as you expand, sorry, sara, as you expand, presumably you will be looking for good real estate for a big box in places that already have a bed, bath & beyond and other competitor s wy

is that going to be easy? >> we've been able to do that in the past. a lot of available big boxes, a lot of department stores and other big boxes that shed boxes every year and what do is take advantage, get it at a great value which keeps our prices low for our customer. >> i just noticed that 60% of your merchandise is imported from foreign countries. china, hong kong, taiwan, with all the trade rhetoric heating up and bashing of tpp which i think would be beneficial to you in terms of cutting import taxes, is that a big risk for your business? >> you know, we've got great partners who have been able to scale with us. we want to have healthy partners and we've been able to source across the bond as well as in ash shah and dough -- asia and domestically. we try to find partners to help us design the right product for our customers. >> you have to be following the debate as it plays out on the campaign trail, countries not just the u.s., closing their doors, i mean a lot played out in the brexit debate as well. >> yeah. i think we have a very large

manufacturing base across multiple countries. an we've been able to flex where we need to make sure our demand is being met. we haven't found that to be a problem at all. >> it's a de-leveraging ipo as we like to say. you're going to be using protein seeds to pay down debt. private equity ownership. always a question amongst the now public shareholder base what are their plans in terms of selling? are they going to be a consistent seller over time or hold their stock for quite a bit of time? >> they've always been a big supporter of our growth plan. growing at great rate. haven't needed new equity since we've started to work together. they'll be thoughtful about their sell down. >> you're not concerned they will be swamping the market with stock soon? >> they've been very patient with us. they're great owners, they'll just trade when it's the right time. >> thank you for joining us. >> all right. >> congrats on the ipo. >> thank you so much. >> lee bird, ceo of at home. as we head to break, take a look at where the markets are trading. fractional losses.

this follows a theme, minor losses or gains over the last few sessions. the dow down 16 points, s&p down 2, the nasdaq down 5. ahead of the jobs report and after the bank of england launched more stimulus and cut interest rates. much more ahead on the markets when "squawk on the street" comes right back.

good morning, everybody. i'm sue herera. your cnbc news update at this hour. a norwegian teenager of somali origin suspected of going on a knife rampage in london's russell square killing an american woman and injuring five others. extra police officers are patrolling the city this morning but investigators believe mental illness the driving force behind the attack. officers had to use a stun gun to subdue the attacker. hurricane earl made landfall today with sustained winds of 80 miles per hour. had effy rains and winds battering the coast. the government urging residents

to evacuate to higher ground. ford recalling 830,000 vehicles in north america to replace side door latches that could unlatch while driving. the recall includes all ford vehicles from the 2012 through 2016 model years and 2015 lincolns. one reported accident. a show of a different kind in sin city after a day of 100 plus degree heat, lightning lit up the sky in las vegas last night in a spectacular show. didn't last long but was amazing. that is the cnbc update. over to jackie deangelis with the eia inventory report. >> good morning. thanks so much. the department of energy out with weekly natural gas storage report. we got our crude inventories yesterday. we got a draw down here for nat gas of 6 billion cubic feet, a small draw down, expecting we're expecting to see this number be be flat this week. but remember in past years, we've seen it higher, 41 last year and 54 is the five-year

average. weaker on a relative basis. july 1st roughly natural gas was trading around $3, today about $2.85. spiked a little on this report but come right back down. traders aren't alarmed until we get to the $3 level. seeing usage at this time of the year because of the weather and hot temperatures isn't unlikely for nat gas either. of course the big risk here is the weather. the forecast seems to be a little more mild than people are expecting in august. see that usage come off earlier than expected. overall total stocks are in good shape. a little more than 3 trillion cubic feet, 15% higher than one year ago. back to you guys at "squawk on the street." >> this as wti inches toward 41. thank you. stocks lose something steam here throughout the morning, giving up earlier gains, some weak data in the last half hour plus the bank of england cutting interest rates to historic lows this morning launching new stimulus measures as well. let's bring in erin gibbs and

our senior economics reporter steve liesman. erin, as we say good-bye to a busy earnings season what is the big takeaway in terms of the guidance and the message you got from companies about what to expect this current quarter? just to spin this forward a bit? >> so this has been a really interesting quarter in that we've seen a higher beat rate so far and we initially came into the quarter expecting over a 5% decline and now we're looking at a 2% decline. that's a nice improvement. also going forward, we're really looking at finally stopping the earnings contractions and seeing growth. this is supposed to be the last quarter of earnings contraction and seeing good healthy growth, less so from q3 but more so from q4 as expected and the consumer is leading the pack, consumer discretionaries and staples have the highest growth expectations for the second half of the year. >> steve, i would ask you a similar question, as far as the

economy goes, coming off of a disappointing second quarter now that we're starting to get new data how are we set up for the current quarter? >> you know, a rebound is still alive here. the first read we got from our rapid update, 2.5% third quarter the same number they expected in the second quarter but didn't get it. got half of that, 1.2% in part because of the decline in inventories, decline in capital spending which was reiterated this morning in the factory orders report and learned a lesson today about, you know, england versus the u.s. and what we learned was that, you know, the bank of england was nice and maybe made a little rally when it came to the u.s. stocks but when that negative u.s. data came along it trumped it. that really should point investors' attention to tomorrow and the jobs report. and the 178,000 that's expected. and the 0.1% decline in the unemployment rate expected down to 4.8%. that's going to trump all of this. bank of england was nice, removed downside risk for the

u.s., but i don't think there was ever a whole lot of upside for the u.s. >> i wonder if there's something there, steve, besides that point that stimulus, especially monetary stimulus, just doesn't pack the same punch that it did over the last few years. >> yeah. i would take a dollar of growth for $10 of stimulus any day your typical market investor will tell you the same thing. growth trumps stimulus. what mark carney said was interesting, he goes, we can act as a central bank before the fiscal side so we're taking what's called preemptive easing here. do you play poker? >> i know how to play poker. >> do you know what a check -- >> i'm not the greatest. >> what a check in raise. decent hand they come around to you for your bet and you check. come back around to you and then you raise. that's what carney did here. that's why he surprised the market. last time around he said you know what i'm not going to do anything or i'll do it later. he came back around and then he raised in a big way. and caught the market as jeff

cutmore has been saying off guard and why you had the nice pop in stocks around the world. >> 1.5% sell-off in the pound, mike. >> i guess from an investment perspective you point out that stock market has kind of shuttled up to the upper end of its valuation range one in place for some time now and backed off and earnings have come in better but do you think that the market is kind of priced in that second half rebound in earnings? for example, you point out consumer discretionary going to be a leader in expected earnings growth, among the weakest sectors during the earnings season? >> yeah. we're definitely absolutely the high valuations are really expecting anything to get better both not only from a consumer standpoint but a lot of it is baked in from a rebound expected in the energy sector. so we expect the market to just sort of stay hover and stay at these elevated levels but it's also, again, a global story. u.s. equities the u.s. economy is one of the most attractive in the world and, therefore, we can stay at these highly elevated

levels, because it's still one of the most attractive stock markets relatively compared to the rest of the world. >> i think the issue is what it takes to get to another level and that's going to be what mike was talking about which was better earnings, you know, in hand, not forecast, for the third quarter and the rest of the year, but also better economic data. i think the market is a little bit weary about being fooled another time on the rebound from the weak growth. three quarters of around 1% -- >> this quarter has been much better than expected. really significantly better. so as long as we keep track with those expectations we can. >> isn't much better still minus 3% on the earnings forecast. >> minus 2. >> but you're still negative. >> which still the last quarter of negative growth. >> maybe i will ask you both to end with one weak spot here as it relates to the conversation which is business spending. capital expenditures, which is not what we're seeing right now out of corporate america. it's interesting given we are

seeing companies higher. we've seen that in the adp report this week, we saw that in the jobs report last week and expectations for tomorrow. how do you square that? >> definitely raises some risk for tomorrow. two theories out there and you can pick your favorite theory and invest accordingly. theory number one is that the businesses cut back in spending and it just takes time for them to cut back unemployment. the other one is that because wages have been relatively lack luster in their growth, employment is essentially cheaper, cheaper than it was that companies are deciding you know what i'm better off hiring somebody than buying a new machine. that's a change if it happens. there's not evidence of it yet but one theory that might explain lack luster capex but decent employment growth. >> all right. we've got to leave it there. good discussion. thank you so much. erin gibbs from s and p capital and our very own steve liesman. check out nike shares, nike announcing it is exiting its golf equipment business. that includes balls, clubs, and

bags. the company says it's going to instead focus on innovation in golf shoes and clothing which it will continue to make. it won't be selling the business and nike folks tell me that nike stores and dotcom and wholesale partners will sell the remaining golf equipment. golf is still strong for some retailers. adidas reporting this morning solid results, raising 2016 guidance for a fourth time thanks to, in part, better margins and sales in its own golf business are the one it's trying to sell, double-digit growth rate guys at taylor made brand, but that doesn't really speaks to the broader trend here which is that golf is declining and the u.s. is half of the global golf market and it has seen declining participation. >> go back to when nike got in the golf equipment business that was the peak of this idea that the golf market was broadening out and going to be a lot more people participating, playing more rounds, people did these

extrapolations. >> think of tiger woods. >> that was part of it. it was going to expand beyond its traditional core. >> your kids aren't playing golf? >> no golf going on in my household and i don't believe there ever will be. >> we'll see. it is returning to the olympics after 100 years. >> that's true but nothing to do with me. i'm telling you it will never happen. >> nor me. this is why nike is getting out of this business. >> we'll still go out and throw a football. >> exactly. >> all right. >> well, when we return, no football but zika taking center stage ahead of the olympics. as the u.s. launches its first vaccine trial in humans. we will be joined by a doctor working on that vaccine. plus, as we head to break where the market is trading. very close to the flat line. much more "squawk on the street" ahead. & in a world held back by compromise,

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emerging markets have been crushing the s&p 500 this year. is it time to make your money more international? we discuss at tradingnation.cnbc.com. more "squawk on the street" coming up. dow down six points.

to chicago and the cme group. rick santelliist santelli exchange. good morning again, rick. >> good morning. thank you, sara. of course today ira harris, bank of england, i'm sure you have very few opinions on this. >> oh, none at all. >> you know what, what you want to talk about is what i talked about with steve, we need to dig down. he's preemptive. to be preemptive you have to have working knowledge or track record of calling the future. none of the central bankers do. dart boards would do better. what's going on? >> the -- you know, let's go back. ben bernanke, 2007, housing crisis was contained. that's one of a multitude. they all admit their forecasting is terrible. >> everybody makes mistakes. we are not saying that humans don't make mistakes. what we're saying is knowing they do why do we give them so much latitude. >> the whole thing if you listen, i listened to every word

carney said in the press conference, he wanted to be preemptive to get ahead. he wanted to have preventative medicine but that's wrong because they want to compare this to lehman. this is not lehman. first of all, interest rates are 50 basis points. >> post-brexit i don't know what he's being preemptive about. there's still many initiations to come but the issues aren't going to be changed by buying 10 billion in corporates, 60 billion in quantitative easing and i doubt if anything will change what 25 basis points lower, but the message of all that is, central bankers think they have the world under control and they don't. >> no. they don't want to let the markets react and tell them. how about a market reaction function rather than the fed reaction function. the funding for the loan scheme, i'm in favor of. you had a 13% -- >> no problem just like when the fed made a lot of dollars available during the crisis. that's what they're supposed to do. >> you've had a 13% depreciation to the pound which is important. >> trade deficit, lot of issues. >> britain has a serious issue

about the current account deficit which runs 5 to 6% of the gdp, too high. but the -- >> the pound didn't come near challenging the established post-brexit loan. >> but again they will not let -- like their egos are so far. let the markets work. if by september you've seen two or three data points, big deal. the data points were based on all the negative concepts. >> i get hit with and you must too, listen, we get what you say, but if they don't do all of this the world will have a real hiccup, a global recession. >> right. >> what my answer to that is, they're going to make whatever that recession is, and there's going to be one, there always is, it's going to make it worse and they're not going to prevent it. no preventative recessionary issue here that path is going to take its course. >> they have not in their own words, they have not outlawed the business cycle. it's going to come back. is this a supply shock from brexit? absolutely not. i -- you have three data points. how do you know it's a supply shock. you haven't seen anything yet. britain unemployment is at low

levels regardless and i know, carney's comment was well, we want to prevent more unemployment. >> japan's unemployment at 3.1 and they're doing more. >> right. it's just -- i just don't get it. i'm not -- i had a great morning trading this morning and i saw this purposely coming. >> one of the few guys i know who likes to make money but calls it the way he sees it. >> you know what -- >> ira -- >> there's opportunity galore but let the markets work. what's the shame of letting the markets work. >> real quickly from a fiscal policy side, the uk has mr many more good chips than the u.s. does. their politicians are ready to do things. may is ready to do things. ira, you're the man. sara, back to you. >> ira and rick, thank you very much. coming up one day to the rio opening ceremonies. how big of a threat is the zika virus? we'll break it down with a doctor whose team is working on a vaccine. next.

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rory mcilroy not to mention nba mvp, steph curry. let's bring in an expert at north carolina, dr. david weber. thank you for joining us. >> thank you for inviting me. >> so tell me, where are we whether it's down in brazil or here in the states or puerto rico, where are we in the trajectory of of this outbreak in zika? >> so overall, this outbreak which involves south america and central america, many of the islands and now unfortunately florida is overall on the rise. however, there is some evidence that at least in brazil, the outbreak has peaked and that we might see continuing cases, but a slower rate of numbers. >> now, colleagues of yours down at unc are working on a potential vaccine to fight the virus. is that going to be a main element of the response here? does that seem like something we have a clear path toward?

>> so people are working on both new drugs that would treat zika and currently there is no drug approved to treat zika, as well as vaccine, but that work is going to take a while. i would expect end of the year, early phase vaccine trials will be completed. i do not expect vaccines to be commercially available for at least a year. and similarly people have screened various drugs for effectiveness against zika, but again, i don't expect that will have an fda approved drug to treat zika for at least one more year. >> in the meantime, there's a lot of noise in the political circles in d.c. about allocating more money for a zika response, mosquito control or other things, is that what we are at in terms of next steps? >> well, i think really three things we need to work. the first are better education of the public about the risks and what people can do

individually to protect themselves, the second would be better diagnostics if you have acute disease, the diagnostics are accurate, but to people who have infections weeks or months ago such as a pregnant woman. the tests are not sensitive that is, other viruss can interfere with the tests. and finally, obviously, we need to have people use mosquito protection whenever they're in an area where they might kaech zika. that would be personal protections such as maybe deet or clothes that are impregimpre. things that individual people can use to protect themselves. >> and what advice are you giving, doctor, to patients and people ask you about whether pregnant or women hoping to get pregnant should travel to miami to et whole state of florida or to brazil right now? >> well, wing right now the best advice comes from your local and

county state health departments. and the centers for disease control. in general, i think if possible, women who are pregnant should avoid traveling to an area where there's ongoing transmission of zika, which is the very restricted area in florida near miami, and obviously many of these the areas in central and south america. >> you said earlier that there's a chance, perhaps, that this outbreak is peaking right now. do you think it is going to be something that perennially we're going to have to deal with, at least for a few years? >> so i would think that over time we will see that the numbers of cases that we're seeing each month will decrease. i think it's very likely that where it's endemic and south and central america, it will become much lower cases, but will be a continuing problem for the future. much like west nile has in the united states, small numbers of cases will continue. what exactly will happen in the u.s. and whether it'll become

endemic in the future, i think it's too early to say. >> all right. thank you very much, dr. david weber at the university of north carolina. all right. dow is down five points, s&p positive, just barely. "squawk alley" will pick it up on the other side e of this break. water and shatter-resistant samsung galaxy s7 active. exclusively at at&t.

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good morning, it is 8:00 a.m. at square headquarters in san francisco, 11:00 a.m. here on wall street and "squawk alley" is live. good thursday morning, welcome to "squawk alley," carl sl on assignment in rio, he'll join us live from there tomorrow. john court is also off, here we many web mike sanle toly and andrew, good morning to both of you. >> nice to see you. >> distinguished fellow and professor at carnegie