be stretching like a peacock >> oh my god, it is going to add a little bit >> it is called full frontal augmentation >> richard buernstein >> join us tomorrow, "squawk on the street" is next. >> good morning and welcome to "squawk on the street," i am david faber along with jim cramer, we are live. carl quintanilla, they're still en route to south korea to pyeongchang. lets get to the futures, of this volatile stock markets that we have been talking about. you can see we are looking for a down open, what does it mean three minutes later, it can all

chan change, which is why you have to stay with us europe has been open for some time yesterday after ours moved lower on sunday. there you see, italy is the best performer this morning the 10-yr note have been hanging around 278 and there is wti and brent is trading as it does a bit above that lets get to our road map this morning, we are going to help you make sense of what suddenly becomes these wild swings. steve wynn is out, he steps down as his role of ceo of wynn resorts. the shares of wynn are up. >> disney reports better earnings at the bell yesterday we'll hear from the ceo, offering screaming apps and

particularly the espn app. >> futures are lower this morning setting the stage for what would be another volatile ride today for stocks. recovering half of the losses for monday sell off. the dow traded in a range of 1,000 points on tuesday. it was up 500 points and down 500 points chris will keep talking about points percentage wise, nowhere near what we see in the past jim, people are getting introduced of the idea of volatility do you expect for it to continue or will we start to have some calm >> no, i have been searching for analogies of what it means i don't know whether on the box or in the bathroom >> that's pearl jam. and that song is "i am sorry" >> no, "i am better. you have to step back from getting out of the ring and recognize that closing bells,

opening bells, they mean nothing. if you can have an xiv, a product with a billion half dollars, close 41 and down 90% and having this ripple effect. >> the long volatility, they must have been also -- >> what happens is it is been revealed and not an asset claim. you got a lot to buy >> at least the stock was zero it should have stopped at minus 20 the saving grace is you did not go very much when you see something that's small, it can impact a market that large and do it at 401 then what it says there are other products that can do that. i was listening to a nice man earlier, rick santelli, talking about how customers wanted these things i disagree with that they got sold and when i go back to what the sec says about these

products when they blessed it, they said you don't have to worry because the market is deep enough it is not deep enough. >> the product began to be used by retail investors and these products have doubled in price over the course of less than a year in many cases moving away from them and dealing with the broader market and the s&p 500 and what's really more important here, jim, we go through periods of volatility we just forgotten what it was like >> we had the tronc decline and a lot of good stuff is down 10% or 15% this is a repricing based on interest rates but it is also, david, a realization to trump rally. it is not a trump rally. it is an asset class doing much better around the globe and it is readjusting around the globe.

did japan experienced it >> no. to me is inflation worldwide of stocks and now we are resetting. a lot of companies in the basket is doing well. the basket was do i think well now we discovered there are stocks in the market and some are doing well and the drug companies, those stock have been horrendous utilities have fallen apart and these are all sensitive to rates. >> we'll hear a course of people coming on our air durs ting the course of the world talking about synchronize growth, i love ta one because it reminded me everybody looking at their watch now is the time. but, it is the case, we have growth everywhere and the wage growth is not a bad thing, it is a good possible, unemployment is at lows we have not seen at a long time and businesses are

very, very strong. they'll be wrong in suggesting that >> knowing what's going to happen is if you keep the market down based on this is like portfolio insurance in 1987 maybe the markets are unnaturally down a huge number of mergers and acquisitions, january, february and march where a lot of buyers, we did not want to buy companies, now we are down a lot. i am look at chipotle and the ceo and they're spending a lot of money that stock is down 26. when you look at the market value of that stock, someone is going to buy the company and they're going to say 18 months from now people are not going to remember this. people are mistakenly, this stock is not going down. i am using that as the most painful example. people recognize wow, maybe this is an opportunity -- why is wynn going up so much

the casino licenses will not be taken away you could have their answer now. now the new ceo is going to pay for it >> let me read the introduction to that story and then we can talk about it. steve wynn has stepped down as ceo of allegations of sexual misconduct claims which he continued to deny. wynn's board appointed maddock effectively. >> do you remember who you lost doing that >> he lives to be 100 or something. >> casino emperors, they tend to live in their 90s. they go long you know what people can say now the company can be bought.

>> why -- is it surprising to you that the stock price is up >> no, would they really be willing to lose their massachusetts license or the liberals wanted them out a lot of people felt maybe they go down with the ship but now look on a non take over basis, i do not want to own wynn without steve wynn >> jim, i have not had the opportunity to survey who the potential buyers are here. mccall, it would not affect us here but it would affect china i don't think you can have that kind of consolidations >> who are the buyers? any idea >> they don't have a full mccall he really can put something together >> i got a return from my

e-mail >> what does it mean >> he can call i am tryi jim and i are trying to reach you. >> he's the last man standing. it is young when you have a mogul, have you seen a mogul it is young. steve wynn is the company. a lot of the times it is i this and i that i mean the really great coaches in the nfl, coach pederson, do this or do that. >> it is a signature >> has anyone had a night with the prc and won? yes, steve wynn. >> he's a tough guy. >> he just had to step down as ceo of what a well reported

story from the wall street journal that's follow load up by more reporting of $7.5 million of payments and a lot of things that went on for a long time consider that. steve wynn has stepped down as a result of this and probably more are still to come. >> i like this matt maddock, he'll be seemless. are you kidding me >> steve wynn understood casino better and hotels. have you been with any of those places i went with my dad, my dad says i feel like a king, king for a daddy. that's what steve wynn does. does maddock understand that the guy who's a titan. >> okay, he no longer runs the

company. the stock is up. you believe it is up because of questions of consolidations and alleviating concerns with that said, 70% of the company comes from mccall. and mgm does not have enough in mccall now that steve is out, i would like to own this company, i will pay 220. it is certainly possible >> it is >> there is a lot of deals, david, you go back to my earlier point, your world will be in place in this volatility >> the s&p 500 is down 1.75% in the month. >> their individual stocks are down huge. we have to focus on that and cannot just be all -- we cannot all be all focused in the markets. packers are from austria when i think of the titans.

individual stocks. >> yeah. >> there is no consolidations of the drug stocks. i mean maybe merck should merge. >> there is a point to be made there. consolidation have been moving a at a pace and it is slow we vizer has been aggressive it is not that they don't have access to capital. when you have the actual cash in your pocket, you will be likely to spend it as supposed to taking out dead space we know they're selling consumer pfizer but what will they do? >> january is the most yu for

ric >> they're your world. you are world and you are welcome to it. >> my world. >> senator geary played no walls in that. >> it is your world and we are just living in it. >> when we return, we'll have the disney's ceo >> he was bullish. >> look at snap. >> wow i got to wrap on snap. >> oh, i cannot wait >> it will blow your mind, you got to stay tuned, david, don't run off now. >> i was thinking of running off. after quarterly results from reporters. another look at futures here, we got a lot more "squawk on the street" ve flirom our post 9 when we come back. [ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ]

♪ good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours.

disney reported better than expected quarterly earnings, though revenue did come in below a lot than a lot of analysts forecasted them. disney plans to roll out their espn streaming service here is what bob iger told us

about that closing bell. >> there are a sign that young people coming into multi challenged -- people are starting to adopt and packages are less expensive fewer channels but mobile friendly that's a good sign espn and other channels are on all of those services and packages that are offered. >> of course, this is a key, jim to the future of this company of these direct consumer offerings we talked about and bolstered by the significant fox deal that's in the works right now that more going to help bolster the content direct to consumer offerings, i should say the entertainment one as opposed to sports $4.99 prices is what they are going for. >> i love it i like alternative sports. will frost taught me of a lot of

sports over there. you can watch them and i love watching things on this. i just got the 10. i have not programmed it yet i love programming -- that's on this >> right >> now, it is $4.99. i mean i am happy to get it. i think bob is on something, personalization of tv on your hand held for instance is very good david, he did talk about espn, it is getting better moderation losses and the fox story will make it so we don't talk about espn >> affiliate fees grew faster than people anticipated. they were a 4% across the board there. expectations were 3.2. >> when the contracts are up 50% of them. well, it is going to show you a pricing power. >> now the subscription service is going to have thousands of additional live events and

access to more leads and teams and more games is what they are talking about. >> i love it >> with that said, it is not going to have espn that you are currently on >> fantasy football, they can develop programs for fantasy i can watch fantasy every minute, why do i only get to watch it sporati sporattically >> there is a lot of frames on >> we have not talked -- the deal is in progress and it is going to take some time to get the regulators >> do you have any further thoughts you and i have not talked about it and it is going to transform disney and it is not here many the state but internationally a company what has not reached with star, well, the ownership

of sky now and any other number of important platforms >> no, look, i know the stock is not going to fly they bought back a lot of stocks i love personalization, we'll speak to personalization later th that's a new trend it shows you the relevance of bob. bob is still relevance >> he is >> june 15th, incredible, too, i am going to be there >> february 10th >> black panther >> oh, it is my wife's birthday, jeez, we got to move on. >> happy birthday. >> we got this guy's mad dash and we'll could want you down to the opening bell we'll talk more about stocks as well mi bk look at futures, we are congaca little bit more "squawk on the street," straight ahead el its growth.

real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. partner with pgim. the global investment management businesses of prudential. yes or no?gin. do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online. today, a focus on innovation in the southern tier is helping build the new new york. starting with advanced manufacturing that brings big ideas to life. and cutting-edge transportation development

to connect those ideas to the world. along with urban redevelopment projects worthy of the world's top talent. all across new york state, we're building the new new york. to grow your business with us in new york state visit esd.ny.gov.

time for mad dash on hump day. >> we got 7 minutes or so. i want to talk about michael kors >> i am talking kors, i am talking a successful jimmy chu, a lot of people felt jimmy chu, they paid too much the runway, the 2020 strategic plan is on target, foot ware and comparable score sales, we had a great quarter yesterday from tapestry >> we can go back to the period where after the ipo and a great

move, they suffered. >> here is where they got the grass root, they buy jimmy chu is about toe cleavage that people are worried and don't understand the strengths of jimmy chu. they are back. their stores and department stores, this is a rocket ship and it is not done a lot of people are short on this it is about inventories are lean >> and brick and mortar. >> david, yes, the inventories are lean and that's always what taught us. handbags, david from tapestry, not the king kind but coach, handbags are on fire when was the last time handbags are on ire >> i don't know. >> i will go to blooming dale.

>> have you walked in sach's >> onipeng bell is moments away. the volatility that we see ahead, don't go ahead.

see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated.

step-by-step options trading support from td ameritrade at ally, we created a savings account with a great rate. but if that's not enough, our app helps monitor your spending too. and if that's not enough to help you save, we could start a carpool. look at this traffic. don't worry. ok, if that's not enough we'll start a trainpool. oh i have a meeting in five minutes. and if that's still not enough... i got it. we'll just create a shortcut. we'll do anything, seriously anything to help you save. ally. do it right. talking 4th quarter? yes. something we all think about as we head into retirement. it's why brighthouse financial is committed to help protect what you've earned and ensure it lasts. introducing shield annuities, a line of products that allow you to take advantage of growth opportunities. while maintaining a level of protection in down markets. so you can head into retirement with confidence. talk with your advisor about shield annuities

from brighthouse financial established by metlife. you are watching cnbc's "squawk on the street," live from the financial capital of the world. opening bell is going to ring two-minutes from now as we get ready for what may be another volatile day on wall street and getting a bit custom to it perhaps. what's the key to this market as we like to say >> no, no, no. >> yes >> why first of all, the narratives have totally changed snap, get this personalization of 35 years old on board figuring it out domino's they love it, it is

always a forward advertising customer relations are bad daily use, unbelievable sequential gain. the sequential gain here, i am going to say sell it buor buy i am giving it a double upgrade. >> wow >> businesses are going to love this thing, they're going to be printing money because of the scarcity of social media just like when facebook kicked in when they figured out the mobile snap is right. sequential i am movememprovement looks like comcast have made a good investment. >> not in the money yet. >> it will be in the money >> you know who's filing snap is ten cents. >> the android engineering

>> there is no voting stock what so ever. >> android it did matter the engineering, the price from facebook the personalization is it. >> we'll come back to snap in a minute lets get to the opening bell here we are hearing ringing right here at nnyc. our headquarters, a mixed bag today. here at the big board by the way is the american red cross and run away dreams foundation that's focused on the opportunity of people of disabilities and the fashion industry >> fantastic so many of these companies are ringing the bell there are so many great ones >> i know. >> it is really fantastic. >> philanthropy, it is an important part of american life.

>> i talked to my friend wolf this morning and he's talking about how the future is down big, down 277 and i said look, that's phony the last 300 dow being relic, great couquarter and i look at t and i say to myself, wait a second, that was just -- that's the unwhine of the great trade, the great stupid trade i like to call people stupid when they are stupid just like god father reference, you completely forget them there is a moment where -- did you go to college and get stupid, stupid these people thought vix are the asse asset. >> when people see an opportunity, they create products to do that. the lead up to the kriecrisis, f

course, i forgotten a lot of what i learn because it is so complex. >> did they buy this crap? >> they did not know to go back to that. we are talking about a town in norway that bough structure products and things based on mortgage back security they did not know what they bought we had to explain it to them they still did not understood what they own. >> he exchanged traded notes until they saw credits and we say sorry, we are terminating. >> that's unbelievable >> vix futures and now under risk why? so it is a very good piece of research

the unwhine of those funds are going to take longer we should get their names to mortify them but they mortify themselves i salute them, everybody has a rights you had an unbelievable right to be a complete bozo, that's what these guys were. >> the stock was down yesterday rather than volatility and no longer in play, derivatives no longer in play >> and not everyone the other hanes, there are two hanes it was not a blow out quarter. but, it was not terrible >> at hanes celestial. >> they maybe gone >> blow out. >> didn't blow out

>> is there a read through on that that i care about on hanes. >> i think it is important to remember that. ever since amazon bought whole foods, it made the category better than worse. >> hanes stumbled on that accounting issue they got their house in in order but have not gotten the sales. >> we have to talk about lenor and lenor is doing great stewart miller >> here is a name we don't talk about too often. >> there could be a number of things, anadarko

>> i mentioned it frankly because it increase the dividend and expand the share it does appear to be one of the reasons why that stock is up you see it is 5% this morning. >> will there be a take over in that area again? >> possibly, yeah? >> anadarko is the most asset out there, fabulous. >> pioneer and anadarko should get together >> why do you feel it is a strong asset >> of course, the decline oil price hurt them. i felt that anadarko was as great growth independent but, anadarko, whoever buys it and i wish exxon will step up. >> they're not going to. >> any deals since south western, remember shell, they

were doing zombsome buying. >> they were bad deals >> xo, remember that for exxon >> that was very critical. >> why don't you like to talk about it because i was vicious. i should tell my wife about that >> you were vicious. >> i said that they -- natural gas is going higher. i was rude and i used the pants word very rarely >> when you use it you get upset. >> that's why i stop using it. >> i think that's good policy. >> jim, i am looking at the banks here, they're all down again. any thoughts at all which given still seems to be the idea that we'll have significant rate hike this year. >> everyone is right about the fed and the banks. they should be thinking far more

about deregulation which is going to be great. the number of people they can off loads so to speak. da david, can i say this is goldman sachs moment they got great volatility and a fabulous balance sheet and volatility have been very bad but they were set up >> did you see by the way their market unit is going to be offering financing for iphones, i should say working on it they don't have a deal that's wall street journal report i am referencing, i don't believe they reached a deal but they're trying to. >> i think they're going to have good numbers he reinvents himself now he was a banker and he was in the nfl and was doing social media and he was a west point graduate and of course, he was a

banker at goldman. he was a hedge fund manager for a couple of weeks. what's really happening with anthony is the great innovation and now he's going to be america's small banker >> we did get comments on the fed. >> dudley making the comment speaking in new york he says there is no change at all of economic policy from the recent decline in the market here is what else he said. >> we are having an up on this virtually has no consequence of my view of the economic outlook. my outlook has changed because the stock market is a little lower than it was a few days o ago. if the stock market were to go

down, that would feed into the outlook and that would affect my view in terms. >> he said the markets functioning have been really good we have a global synchroniziing recovery now he added the company understands they have to change their culture. he's the second person to say no real effect on the outlook of policy for what happened i was the one that spoke just before jim cramer's famous and accurate rant against the federal reserve that they have no idea. jimmy, i don't know if we are in that situation now i think it is a different situation of what's happening in the market is not a lack of market functioning >> total agreement with you steve. >> these are sturdier hands. >> there is no comparison to

that >> that was a fixed income issue. >> will you look at this how irrelevant of the future >> remember we got these vix clowns, i don't mean to call them clowns, i mean to call them chowder heads that are doing what they are doing. i indicated last night, so long suckers. >> we are back to an up market the nasdaq is still the one weak spot if you want to call it that apple is down 1% this morning after yesterday. we are back at 25,000, all is well with the world, jim >> you got to recognize that closing prices mean nothing and you should be thinking longer term here. i know it bothers you when i say that you take a stock like disney >> it is funny to hear you say

that >> i changed every since i got married. >> disney is up a buck 50. to me that's a buy if you got more than five-minute time frame >> and you love your snap. >> 30% >> it is real. it is spectacular, david >> you did a double upgrade, did you? >> yes, i went from sell to buy. bitmoji, you know how big it is? you know that snap and bitmoji is number one in apps. >> it is a snap success to twitter. advi advertisers are getting comfortable. the average commercial is watched for ten full seconds >> no. >> that's big. >> i know. >> for that generation that has theattention span of a flee. >> that's how long the young

people have. verizon says they are doin doing -- they lower the price. it turns out if you lower the price, things are better the promoted stories are doing well small business media have not been involved yet and nfl personalization, it is not done >> oh man. >> the cameras are the number one app, daifvid. >> that's how they view themselves, it is a camera company. >> it says older people are getting involved because of the new on boarding because they made it easier after they said older people, i thought they're talking about me -- 35 years old in the world of snap it is like logan's run. this was a terrific quarter. the market is to go back down now. they are all covered

this kind of stuff is nonsense pick your stocks that you like that are under value thank to warren buffett because of this craziness and buy. don't believe the futures. other than the doctor denton people who are in there trading like kissing giramis at 3:47 a.m. you cannot trust it. >> we have an s&p 500 that's now up 1.1% of the year. lets check with bob pisani, get more on what's moving this morning. >> we moved 20 points of the s&p 500. energy and home builders and industrials, some beaten up groups are doing a lot better. semiconductor is to the downside the big question is, is the selling over >> short volatile and going long stock. they effectively are lowering the market on tuesday and monday, it all blew up. those short volatility, forget

about it the vix, those in the vix, etfs, they had to cover. the vix went up and markets. the traders as the market kept dropping, they had to continue to keep shorting to cover their positions. so that exacerbated the sell off. is the selling over? has all the selling pressure dried up we had some help overall with the fact that yesterday and the late afternoon selling dry up around 230 this is the chart yesterday. the volume dropped in the middle of the day we had people saying oh my god, they're not going to come in and sell like crazy and we are not going to hear margin calls and the market started lifting and whoosh the volume started to pick up when everybody realized we are not going to have a sell off. another hopeful sign is that the vix futures are inverted now

the cash vix are still higher. that's very important overall. it is rare to have that happen usually volatility is more dangerous way out, they price it higher i think we can see the vix start to come down in the next few days what's the right level it is certainly not 10 it is certainly not 24 or 25 or 30 i would estimate some where between 10 or 20 in the next few days if this continues a lot of people target volatility now so they weight various assets by volatility when things blow up, of course, they have to rearrange their funds. we'll see if that comes in and people do anything regarding that finally, i want to note that this is all happening independently of what's happening with the fundamentals of the market. i hope we can talk about that. inflation risk have bes have be unchanged. what's changed is the valuation

risks. the markets are much cheaper now. last week we were trading 8.5 times for the s&p 500 and now it is trading at 17.5 times for multiples. that's still a little bit high for historical levels but it is a lot cheaper than it was. one factor of the three major risks have changed right now we move in a 20 point range at the s&p 500 and we are sort of in the the middle. the dow is up 110 points guys, back to you. >> the market is phony balogney. >> what does that mean >> because they're vix people. >> the markets seem to be functioning just fine now. >> at 4:30 there is a crash and 9:30 is up >> this market is going to drive away all these people who got involved >> my senses is we can have a

calm day with none of the theatrics that you are talking about. >> theatrics >> the stocks are merely placed. >> there is your shakespeare for today. >> lets head to the bond report. >> rick santelli, what do you got for us this morning? >> if you look at this week, there is a bit of a negative drift. option and treasury are having an exciting time although 2 right now are holding on unchanged we are affected by all the volatility but there is a lot of continuity of all the ranges nothing like any major drops 10s are down a couple of basis points the one week charge, i don't often pay attention to intradays, it is where you get on and off and opens and closes. we held at 264 and 265 during

the worst of times with stocks open the chart up and all the way back to the high for 2017. that was 263 that speaks volumes. all that equities, continuing volatility and we still held 2017 and hovering in the zone that we have not seen since early 2014 there is a lot of talk that merkel finally forming at this time if you look at bund, a little spike up there they're hovering in the 70 camp. all those dynamics globally. solve r sovereign rates have held their own. this is actual security, barclays, it is not the widest on that chart of the six-month lets keep the same time frame

for six-month, etfs. the etfs is continuous and volatile all those different sales and different areas whether it is a good portfolios of volatility management or naked ownerships of some of the volatilities of etms and etfs, it all comes back in some form of the equity markets but not as bad as it has in the past. that's an important concept to hold onto. yesterday, we had a 3-yr note option and today we have 10 and tomorrow we'll have 30 lets check to the buyers and see if they'll show a big demand at 1:00 eastern jim and david, back to you >> thank you, rick santelli. >> coming up, we'll have more on a volatile day on stocks we are in the red again. we are not moving percentage wise very municipch >> we have ripped up tickets >> yeah, "squawk on the street" is coming right back

each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. its technology was engineered (beeping). while its design was meant to be seen. experience the new 2018 lexus nx, and the nx hybrid. experience amazing, at your lexus dealer.

what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley at holiday inn express, we can't guarantee that you'll be able to contain yourself at our breakfast bar. morning, egg white omelet. sup lady bacon! fruit, there it is! but we can guarantee that you'll get the best price when you book with us. holiday inn express. be the readiest.

and there's a look at the big board here of course we did cross above 25,000 on the dow briefly. you can see we are still up. the s&p of course also back in the green this morning we've got a lot more to talk about including stop trading with jim up next thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms... again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management.

you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone.

now you can get it, too. welcome to the party. time for stop trading. what do you got? >> incredible moves but i'm not going there. david, i think cnc should be bought reported a remarkable quarter. they raised guidance gigantically one of my absolute favorite stocks humana people don't like it initially but that's going to come back. centene is the buy you want to own that that's the company that figured out how to make money regardless of what the government does with obamacare. >> what do we have on "mad money" tonight >> we have benno dorer and brian

goldner. >> i want answers tomorrow. >> i'm going to say to you -- >> i want answers. he's trying to buy everything that guy and nothing works. get some answers. >> i usually talk over you, so that was your chance clorox had a great quarter had misfortunate reporting during this period and it was a whitewash >> got it. all those tide ads, that wasn't them. >> no, no. >> thank you i will see you right back here tomorrow. >> of course. >> don't go anywhere. >> we could be up and down 200 doesn't matter. >> when we come back more on the volatility and how you should position your portfolio. keep it right here ♪

feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

[ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ] ♪ good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours.

good morning welcome back to "squawk on the street." i'm david faber along with kelly evans and mike santoli carl quintanilla still on his way to south korea

sarah has the day off. you can see after what has been a number of sessions of extreme volatility, i think it's fair to say things have calmed down at least in the first half hour of trading. and that's where our roadmap begins this morning with volatility of course it does reign supreme. stocks seesawing between losses and gains. the roller coaster continuing a bit. we're going to have it covered on all the market action straight ahead. >> plus, big earnings movers disney reporting results and what ceo bob iger told us about the quarter. and snap stunning the street we'll dig through those numbers with the stock up big. >> and steve wynn out as ceo of wynn resorts following allegations of sexual harassment we have those details as well coming up. but let's start with these markets. obviously we've had some jumpy volatility in the last couple days bring in david lebowitz and rebecca patterson to talk about all of this. thanks to you both good to see you.

david, obviously markets stabilizing a little bit today. >> yeah. >> i wonder if you think yesterday, maybe yesterday morning was kind of a plausible possible short-term bottom and now it's about kind of sorting out exactly what we're going to pay for the earnings that are coming through and all the rest of it? >> i think that's the exact issue at hand what are we going to pay for the earnings expected to come through this year. it was fine to have an 18 plus multiple on the s&p when rates were down at 250 to 260 but with rates backing up not only 30 or so basis points but relatively quickly, you're seeing that valuation come under pressure. it feels like we are sorting things out it's comforting to see the ten-year yield find its own footing. i think that's going to be the first step in the normalization process. generally speaking the fundamentals support equities moving higher once we get through this period of volatility that everybody's been waiting for. >> but you think that the bond yield even though it's only up 30 or so basis points year-to-date, 40 basis points, it's going to stay a raw nerve even with small moves towards

3% >> i think may stay a little bit as a raw nerve the real pain point when it comes to equity is rising rates somewhere 3.5% but the pace rates move i think is what destabilizes the market. going to bed one day at 260 waking up the next day at 285. that brings the trade-offs between stocks and bonds into question a bit more. >> and, rebecca, one of the kind of interesting elements of this selloff in the stock market is it really wasn't matched or mirrored in other asset markets, right? you didn't see the credit markets act up you really didn't see the foreign exchange markets do anything dramatic. what's your read on how all of these things have interacted >> yeah, i think it's partly a reflection of the strong economic backdrop we have. if this had happened in 2016, we had a huge selloff in credit markets tied to the moves in oil and energy this time around credit has barely moved and, again, i think it's because we have really strong global growth we have very strong corporate earnings going on and so people

are saying, okay, this is a technical correction this is not reflecting fundamentals frankly, i'm grateful this is happening now because people have that fundamental backdrop if we had seen the same correction maybe a year, year and a half from now later in the cycle, higher interest rates, it could have been the straw that broke the camel's back and put us into a sustained downturn but we're not there yet. i think this is when we get a pause, the market consolidates, it's healthy and then we go up from there it's just a matter of when. >> guys, let's show you what the president just tweeted about the market he said, in the old days when good news was reported the stock market would go up today when good news is reported the stock market goes down big mistake and we have so much good, great news about the economy. david, is he right is that what's going on here with the market? >> i think that the market is trying to figure out fair value, right? we saw very strong run in equities with rates not really doing all that much. and i think back to mike's point earlier what investors need to figure out, okay, in a more

normal market environment which has some volatility what are equities actually worth. >> is it more normal now because the economy is healing >> i think that the interesting thing about that comment is if we think back to, you know, the years ago during this expansion we'd have everybody wanting bad economic data because that meant the fed was going to stay easy, right? then for a while we went through a period where good economic data was good for the market so it seems to ebb and flow. i don't think we can really dismiss the liquidity aspect and monetary policy aspect as we figure out how markets are going to behave against the backdrop of an improving economy. >> rebecca, this has been one of the theories floated in friday's jobs report which showed wage number pretty good up 2.9% on the year is good news bad news now for the market or is there some other dynamic going on here? >> i don't think good news is necessarily bad news so to speak. but i think to david's point the speed in changes in asset prices says a lot if we have a sudden rise in inflation that forces the fed's hand, that could be more

unsettling at least on a short-term basis for equities. if inflation rises gradually, fed moves gradually, i think this equity cycle -- there's news this morning i think things gotten overlooked -- or yesterday, actually, that's the german annual pay round. we have to remember the bond markets are more and more globally linked today. so what happens in japan or germany matters to u.s. bond yields as well germany has just negotiated a much bigger than expected annual pay raise. and to the degree that feeds through and to inflation in europe and german bond yields, that's another factor that might push up u.s. yields and be something that creates a little more jitteriness, that's a word, for equities. >> david, i guess we've been having this conversation as if there's some kind of an all-clear. is there a chance here that this is a longer term process of the market really went so long in such a calm, strong rally that we have a little more pay back or adjustment of sentiment or

anything else to do? >> i think we do have a little bit more room for payback. i think fundamentally the way i've been thinking about this is the bond market is pricing in outlook the stock markets had for the past 18 months, right? better growth, higher rates, higher inflation, solid earnings, and i'm not sure you can have two or three days of down action, two days of up action and signal the all-clear. we are prepared for more volatility ahead, but we are late cycle this is when we think it's important to let asset allocation work for you, so we're staying the course leaning into risk within the context of a balanced portfolio. >> all right david lebovitz and rebecca patterson, thank you so much for your time this morning. las vegas mogul steve wynn stepping down as head of wynn resorts after allegations of sexual misconduct, shares up 7%, second best performer in the s&p 500 this morning what does it mean for the future of the company let's ask former "the wall street journal" columnist and author of "winner takes all," gary loveman and the race to own las vegas. christina, thanks for joining us once again first of all, are you surprised

he just stepped down >> my mind is blown. i imagined many scenarios to this playing out and him stepping down a matter of a couple of weeks after the story first hit was definitely not one of them. >> right look, i haven't seen it in-depth yet, is he going to have a role still at this company? or is this him distancing himself from it entirely >> well, officially he has stepped down as ceo and chairman so that's his role you know, we've seen a lot of indications that other people were stepping back from the company. they were reviewing things in boston and possible they were going to lose the license to operate there. dropped out of plans to play in las vegas. i think the steve wynn association with respect to the casino going to do more harm than good. but he's an entrepreneur, he founded that company it's his baby. it's hard for me to imagine that

he's not going to be having itchy if i think toers g itchy fingers to get in there. >> well, he does control shares, in what way would you expect him to try to exert some sort of control, christina >> well, i mean, it's steve wynn this is a guy who doesn't pay a lot of attention to other people's rules you know, is going to pick up the phone and call somebody and express an opinion i mean, he could do that about a piece of trash on the floor in the wynn las vegas or about a corporate initiative it's just he is an entrepreneur, sees himself as the father of that company it's sort of like telling a parent to step back from taking care of their kids. >> yeah. the stock is performing fairly well some people startingto anticipate, well, maybe they'll be a takeover in its future. is that any possibility in your sense in terms of what can happen or what consolidation might be able to happen?

>> i didn't think he would step aside quickly like this. i thought the stock would continue to go down. i think it's currently valued well under the individual the company owns a perfect recipe for a hostile takeover. >> i also wonder if the price stock reaction tells us investors are more concerned about the risk of him staying on than the risk of him going how is it possible steve wynn leaves the company he's created, that he's micromanaged, that he's overseen and gotten to this point and shares are moving higher i mean, do people see a future, a strong future without him? >> that's hard to imagine. that's a whole great big question mark. >> yeah. and i also wonder, christina, given how he's been a serial entrepreneur in this space, he says, fine, i'm walking away from wynn, but he's not done in business, is he?

>> well, we don't know, you know again, that's the question mark. who knows what's going to happen this is completely unprecedented. >> so to the extent he's been the icon ig figure to a certain extent to the growth in las vegas and the guy we think of when it comes to gaming overall not just this country but macau, will anybody be able to step into that place? >> well, they have matt mad dox at this point. you don't make a whole lot of steve wynns in any generation or a couple of generations. there's nobody obvious to fill that kind of role. what happens going forward, again, who knows. >> yeah, i wonder, christina, if the company gets sold or it comes under some kind of different mode of management, it really would represent a bit of the end of that kind of founding maverick leader of las vegas. >> it really does. you know, there's sheldon a

adelson, he started his company, but really that era of the makers in las vegas is now over. >> wow quite a day. christina, thanks for joining us. >> thank you very much my pleasure. >> christina binkley. >> when we come back, what disney ceo bob iger had to say about his company's earnings, his deal with fox, theme park growth and a lot more. plus, snap stuns the street. take a look at this. the stock is up, yeah, over 30%. big boost in active daily users. their programmatic advertising seems to be working for them another check here on where we stand at this hour of course on the overall market there it is. "squawk onhetrt"omg ghback after this. we offer lowt trades and high-yield savings. but if that's not enough, we offer innovative investing tools to prepare you for the future. looks like you hooked it. and if that's not enough,

we'll help your kid prepare for the future. don't hook it kid. and if that's still not enough, we'll help your kid's kid prepare for the future. looks like he hooked it. we'll do anything... takes after his grandad. seriously anything, to help you invest for the future. ally. do it right. seriously anything, to help you invest for the future. we've been preparing for this day. over the years, paul and i have met regularly with our ameriprise advisor. we plan for everything from retirement to college savings. giving us the ability to add on for an important member of our family. welcome home mom. with the right financial advisor, life can be brilliant.

welcome back as we check on shares of disney this morning amid a broader market rally, it was a mixed quarter. disney saw declines in its broadcast and cable units in it recorded earnings, offset by theme park attendance. shares are fractionally higher julia boorstin spoke with ceo bob iger and shares more. >> kelly, moves higher not just on the upbeat news on parks but also positive comments from ceo bob iger about the media networks division including espn iger announced the new espn plus

app will cost $5 a month and he also said subscriber declines are slowing. >> well, there are signs that young people are coming in to multichannel television. people that were once called or thought to be cord nevers are starting to adopt to packages that are less expensive, hulu for instance about $39 a month fewer channels but more mobile friendly that's a very good sign. and espn as well as our other channels are on all of those services and all the packages that are offered. >> iger also detailed the impact of tax reform saying the reduction in disney's tax rate gives the company access to more free cash flow which will result in more investment >> we've had a good track record of investing in organic growth in our businesses, parks in particular i think the results that we just announced are the result of those investments. we've also increased our dividend nicely over the last number of years and we brougoug back a significant amount of our own stock and there have been

other acquirers of other businesses, of course now twe twenty-first century fox, i think you'll see a blend investment going forward. >> as for the fox deal, iger says it's still on track to close in 12 to 18 months of course you can find more from that interview on cnbc.com back over to you. >> julia, what's going on with there's more "star wars" movies now? how many more? >> there are more "star wars" movies, yes. so the co-creators of "game of thrones," benioff and weiss, these two guys who wrote and put together this "game of thrones" such a hit for hbo, disney announced a deal with them to create more movies isn't the "star wars" universe they haven't said how many, but it's clear it's more than one. i asked iger how soon they'll be launching those movies and whether that means we'll maybe have two "star wars" movies a year instead of just one which is where we are right now. he wouldn't give us any details but said they're very excited to work with these pairs.

>> how many different "star wars" franchises are there there's a main one, and an offshoot and this would be another offshoot >> there's a main trilogy and another trilogy any works and we have the hans solo movie coming up in march, it's obviously connected to the "star wars" story, but it's a prequel, sort of the origin story of hans solo they have a lot of things working right now in the "star wars" universe last jedi came out in december but the idea you need to have enough content interested in "star wars" but not so much it oversaturates the market also, remember kelly, these take a long time to make. right now they're on track to have about one a year. >> it's a lot coming down the pike, julia. thank you very much. julia boorstin speaking with the ceo. it's been a wild week for tech broadly for f.a.n.g. in particular let's bring in mark asset management and canaccord

morris, start with you on disney before we move on from that. if this fox deal goes through, what do you think we should see coming out of that space especially how iger emphasized doing well in streaming last night. >> i think this fox deal goes through and you have the best entertainment franchise in the world with the opportunity to leverage its business on a worldwide scale. number one, it really will make it a very, very serious contender in direct to consumer, which is the future. and i think number two, fox has major international franchises that disney can leverage its product against. so i think that the opportunity's enormous. >> but you are still a netflix owner. michael graham, you are too. >> we own both. >> yeah, exactly and that's what i'm wondering is there room for everybody, michael graham or does this represent more of a challenge for netflix going

forward? >> well, i think netflix has a clear, you know, sort of lead in the paid content market. and the big thing is that they are spending way more on original content than anyone else in the sector and that original content is -- has allowed netflix to really do a great job of growing the subscriber base and retaining subs. >> right. >> clearly disney with all of its media brands, all of its content brands coming into the paid, you know, market, is going to be a little bit of a headwind for netflix going forward. but i think that we're sort of migrating. you heard it in mr. iger's comments earlier, we're sort of migrating to this area where consumers will be picking and choosing different subscription packages and i think netflix and disney could easily co-exist in that world. >> so you have a 280 price on netflix. we should show the shares. this is one of the companies down 10% among recent highs amid

the market rout. michael graham, are there companies you would be picking up on the weakness we've seen already? has that opportunity passed? >> i think there's plenty of time, within the f.a.n.g. group, we are favored in the one-year time horizon of facebook just really solid fundamentals there and not an expensive valuation at all our next favorite is amazon. you know, amazon's a little bit tougher on the valuation front, but it's really easy to see the growth path for amazon going forward. netflix i would put third on that list just because the valuation is so stretched and the stock's been really strong and google or alphabet we've been neutral on for several months now just thinking the other stocks look more attractive but also in google's case we see some gross margin pressure that we're trying to think about. >> morris, i wonder if you think we've had this little episode of

volatility it's often a time when leadership changes within the market, the market starts to get refocused on different kinds of things if we're talking about a kind of economic acceleration, rates going up, cyclical stocks perhaps having more of a tailwind, do you think that means that the kinds of large cap growth in tech stocks that we seem to focus on might take a backseat for a while or no >> i think that when an economy grows faster and the best businesses have the opportunity to grow even faster than have been growing, i think you want to make a bet both ways. i don't disagree with you. we have growing interest in needing financial service companies, goldman sachs, morgan stanley, b of a, we think those are cheap stocks with enormous opportunity to build value in a growing economy. but at the same time i think you have to understand that disruption is overriding and the companies that are benefitting from disruption are the companies that can really

build value in a better economy. so we're not going to try and time it other than to say that there's great value in alphabet. there's phenomenal value in amazon advertising's changing and i think we can't forget that. >> morris, you know, as somebody who knows you for so long, i remember when we used to talk about just what was big media back in the day. >> sure. >> wlost left behind here? you know, i don't know if you short stocks anymore or not, but what about the names we're not talking about? as netflix and perhaps disney in your opinion certainly take dominance in this emerging world in amazon and facebook >> great question, david yeah, we do short stocks, we don't get into specifics, but what we want to avoid are companies that are not structured to benefit from disruption and i think television is not going to go away at all. i mean, cnbc is really important. but the ability to integrate --

>> thank you. >> thanks a lot. i live with you guys the ability to integrate linear and new media, great opportunity. i think disney's moving in that direction. and i think there are a lot of businesses that are just going to be very mature. they're not going to go away, but we're just not as interested in them. >> on the topic of new business, snap is up today we have a lot of analysts including you saying a lot more positive things than they had previously why? >> well, you know, snap this was an impressive quarter of execution for a company that really hasn't had very many of those since they've been public. so, you know, they should be credited for that. two things really happened that were good in the quarter one was the company redesigned its user experience, made it a little more user friendly and a little more enticing they've rolled out that new experience to around 20% of the

user base. they should roll it out to the rest of the user base by the end of q-1 so that should be a positive and then the second real positive is they have successfully transitioned all their advertisers to a new self-service product called ad manager. it's an auction-based product that will look like google and facebook in terms of the way advertisers buy ads on those platforms. so, you know, the key to whether or not this performance is sustainable is just continuing to attract advertisers and get more advertisers bidding on that inventory and the auction to drive prices higher is part of the reason we're not upgrading the stock. we really want to wait and see if they can continue to build that advertiser density from here. >> okay. that's a question. i see you still have a hold on twitter too. other platforms still have to figure it out. guys, thanks for joining us. michael graham, morris mark this morning talking tech as we go to break, take a

look at shares of tronc. always like to say tronc surging after announces to sell billionaire investor for $500 million and the assumption of $90 million in pension liabilities. you can see that stock up ahead and up over 20% earlier. and another check on stocks overall in the market right now, of course after a couple of very, very volatile days, things seem to be stabilizing at least higher right now. you can't predict the market, but through good times and bad at t. rowe price we've helped our investors stay confident for over 80 years. call us or your advisor. t. rowe price. invest with confidence. sometimes, they just drop in. obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities.

cme group - how the world advances. ♪ especially when inside another amazing machine. your an amazing machine. the lexus es. with standard technology like lexus safety system plus. the lexus es, and es hybrid. experience amazing at your lexus dealer.

wow! record time.s. at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. get ready, because we're helping leading companies see it- and see it through-with digital. but through goodt times and bad at t. rowe price we've helped our investors stay confident for over 80 years. call us or your advisor. t. rowe price. invest with confidence.

♪ dow up 184 this morning, but there's renewed focus on volatility and volatility linked investments. mike is taking a look at how some of these so-called low volatility stocks have performed during this recent pullback for etf spotlight. >> yes low volatility stocks as you say, kel, not so much the pure volatility trading exchange trading which did a couple of

them blow up that really trade volatility futures and derivatives and asset class. this is stocks etfs like the splv, this is the s&p 500 low volatility portfolio here's what it actually is first of all, it's made up of about 100 stocks from the s&p 500 that have displayed the lowest volatility. it's kind of opposite number is the s&p high beta etf which are the 100 stocks that tend to have the highest beta or highest volatility relative to the broader market one interesting element of the last shakeout we've had -- >> they look opposite. >> they look very similar and this is since last thursday. during this period we went down hard and back up, the low volatility etf did not really have demonstratively lower it actually underperformed the high beta. so what's going on here? first of all it's the sector mix most likely. so the s&p low volatility fund has 20% in utilities, obviously sensitive to higher rates. they did not do well in this

downturn and also the consumer staples like some of the more expensive groups in the market that did get hit. i think also it shows you the selloff is pret ty comprehensive wasn't picking and choosing fundamentally challenged sectors. >> does anybody believe because it says low volatility etf that it's going to behave that way? >> maybe not totally a buffer, but i think over longer periods of time i do think that's the hope i think if you look at the way it's behaved over much longer periods of time, it actually has had a little bit of a smoother ride versus that high beta. >> because we've been in a 30-year high bull market that's helped utilities and consumer staples. >> one of the ano, ma'am maliess one of those things like that, and when f.a.n.g. was winning a lot of big tech stocks got in there too. >> we talked about whether big tech itself is now more of a defensive play maybe that should go in the low volatility etf. >> i think a lot of them have

made their way there mie microsoft might be there. >> good stuff, mike. thank you. let's get to sue herera with the cnbc news update. >> indeed i do good morning kelly, good morning everyone here's what's happening at this hour vice president pence says the u.s. is preparing tough new economic sanctions against north korea in the coming days he made the comments during a joint news conference with japanese prime minister abe in tokyo. >> i'm announcing today that the united states of america will soon unveil the toughest and most aggressive round of economic sanctions on north korea ever and we will continue to isolate north korea until it abandons its nuclear and ballistic missile program once and for all. >> tronc says it's sold the "los angeles times" and tribune to billionaire investor patrick soo-shiong a major shareholder with net worth of $7.8 billion new england patriots offensive

coordinator josh mcdaniels is staying put rejecting the indianapolis colts head coach job just hours after colts announced he had accepted the position we will see. that's the news update this hour sends it over to dom chu for the eia inventory report good morning, dom. >> good morning. weekly crude oil inventories up 1.9 million barrels compares to the consensus estimate of a 3.1 million barrel increase. gasoline inventories are also up 3.4 million barrels. analysts surveyed by street account had expected 150,000 barrel increase. if you take what's happened with prices right now we are seeing a move lower in crude oil. and of course, mike, we talk about this in context of last night's private sector data that actually showed a drawdown in some crude inventories so, again, an interesting

dynamic here we're watching crude oil prices turn lower on the day. >> sometimes a different story from those two reports thanks very much as we head to break, take a look at shares of chipotle this morning. company reporting earnings that beat on the bottom line last night. revenue matched forecast comp sales though rose less than expected and the chain said the number of visitors to its restaurants would keep declining through the middle of this year. you see wall street really kind of in a prolonged period of losing patience with the chipotle story without that clear turnaround stock down almost 10% right now. much more ahead "squawk on the street."

two,that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum -- just to help you improve your skills. boom! that's lesson one. education to take your trading to the next level. only with td ameritrade.

welcome back the president weighing in on the stock market this morning after the volatility that we've seen

in the last many sessions. here's what he said, in the old days when good news was reported, the stock market would go up. today when guz e good news is reported, the stock market goes down big mistake and we have so much good, great news about the economy. in that context, a quick check on where we stand. the dow's up 158 right now, some rebounds across the board here on wall street although the nasdaq is down fractionally so not evenly spread here. to the point about how strong the economy is, let's check on the ten-year real quickly. that yield is around 2.785%. mike, if it's going up on good eco news and that's hurting the stock market, is that -- i mean, this is the same kind of debate we've been having since friday. >> yeah. it's not a new argument. you know, sometimes in certain phases of the market the bad news is actually preferred i'm not sure -- >> i don't know what old days he's referring to. forever has responded to the prospect of higher rates a certain way. >> exactly. >> oftentimes that's recalibrating. >> yeah. i mean, at the best parts of an

economic cycle this is exactly the kind of worry that you usually get, which is it's going to be a little too much. >> we'll see. >> but it's a way of kind of weighing in on what the market's been up to while accentuating that the economy's good. >> the economy's better, yes we'll watch the data see if that continues to be the case rick santelli is over at the cme group in chicago with the "santeli exchange. good morning, rick. >> good morning, and thank you, kelly. i'd like to welcome my guest jack jerard, thanks for joining me. >> good to be with you, rick. >> we've had a boatload of market volatility and volatility is the word, it really was in effect in the equities than other sectors. seems that oil held up very well any thoughts on that linking the two, jack? >> well, rick, i think what we see is obviously short-term volatility particularly as you mentioned in the equity markets but the reality is when you look

at energy, specifically oil and natural gas longer term, the longer term trajectory is there's going to continue to be more demand. we're going to have a marketplace there. and as the market ebbs and flows in the short term, you see in our space it's relatively stable but as the price begins to move up and we're going to continue to work to meet that demand, there's a bright future for the oil and gas industry for many years to come. >> jack, we hit a major milestone in january of 2018 you know what i'm talking about. we hit 10 million barrels a day of production, first time since 1970 technology, fracking, horizontal drilling, especially in the natural gas areas have helped ferment that my question to you is, there wasn't any government subsidies you could argue the last couple administrations didn't really push any of this, it's pretty amazing what's occurred, do you not think? >> it's remarkable, rick no one would have predicted this ten years ago, but it's really a great success story that we need to continue to build on in this

country. we're providing great paying jobs, producing american energy and now we're allowed to export that energy. we're setting records there. we're becoming less reliant on outside sources. the average job or wage in our industry is $50,000 more than the average wage in our country. these are the types of jobs we need to create the energy we're going to need and consume. so it's a great success story. and we did it with technology, not government regulation or intervention and there's a lesson there for us to learn, which i think the president's on the right track here, manage through smart regulation don't burden industry in the private sector and we'll produce great results for the american people. >> you know, i can't help but go into a segue and i hate going into it because the minute i jumped into this circle we're in political territory. but parts of the president's budget has eked out and there's two areas i want to go to of

course first is he's cutting subsidies of renewables by 70% i think renewables are great, but doesn't everything have to compete in the marketplace should america subsidize industries when we see some of the great bright spots of natural gas exporting it it's a clean fuel. your thought. >> well, you're absolutely right. all we ask for in the oil and gas space is an equal opportunity to compete we need all forms of energy. we support renewable energy. we support energy efficiency but we also need to recognize the reality of low cost affordable, reliable energy. it's still built on the foundation of oil and gas and it will be for many years to come so our basic message to government is allow us to compete. we'll provide that new energy. one thing i would add, rick, that's really significant, our carbon emission, greenhouse gas emissions are at 25-year lows in the united states. not because of government regulation but because of clean

burning natural gas that's been brought to the marketplace we need to take a lesson from that and think of how that might help us address that challenge globally through export of clean burning natural gas, et cetera it's a great success story up and down the value chain we need to continue that momentum that was brought to us by the private sector, by private investment and particularly by technology and innovation >> jack, thank you so much you bring up such a great point. just because many don't believe government can get to the promisedland promised land in a variety of areas doesn't mean we don't sympathize with keeping the planet safe and clean. thank you, jack. >> rick santelli, back to you. >> rick, thank you very much when we come back, apple responding to the senate's questions over the iphone battery scandal. we'll speak with senator john thune, he's chairman of the committee taking on the tech giant. quick check of stocks at this hour, continuing to recover.

dow up 180 s&p up almost half a percent pretty much gaining back in total about one-third of nd's losses. "squawk on the street" be back right after this (daniel jacob) for every hour that you're idling in your car, you're sending about half a gallon of gasoline up in the air. that amounts to about 10 pounds of carbon dioxide every week. (malo hutson) growth is good, but when it starts impacting our quality of air and quality of life, that's a problem. so forward-thinking cities like sacramento are investing in streets that are smarter and greener. the solution was right under our feet. asphalt. or to be more precise, intelligent asphalt. by embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to analyze the flow of traffic. then that data runs across our network, and we use it to optimize the timing of lights, so that travel times are shorter. who knew asphalt could help save the environment? ♪

trust #1 doctor recommended dulcolax. use dulcolax tablets for gentle dependable relief. suppositories for relief in minutes. and dulcoease for comfortable relief of hard stools. dulcolax. designed for dependable relief. but prevagen helps your brain with an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.

ahead of tesla earnings on wednesday after the bell, is tesla a buy, or buyer be ware? find out as weive din at tradingnation.cnbc.com more "squawk on the street" in just a bit she's asleep? yes. let's do this.

you may be new parents. but tonight, you're determined to feel like your old selves again. cell phone rings baby crying with blue apron, any night is a chance to see what cooking can do. government officials have been questioning apple about software updates that slow down older iphones. joining us now is chairman of the senate committee on commerce, science and transportation, senator john thune of south dakota. senator, thanks for being with us i know we've spoken to you about this issue previously. since then we've got this five-page memo from apple answering it would seem many of your questions are you satisfied with their response >> well, by and large we appreciate their responsiveness. and, you know, obviously we've been digesting it. but clearly i think the issue

that we wanted them to address is when people have these, you know, advanced types of devices like iphones that the companies that manufacture those devices be transparent about how they work and of course what we saw with this example was apple as they were communicating with their customers about this i think there's a lot of misunderstanding and confusion out there. we're trying to clarify it i think apple has done, again, by and large a good job of explaining what happened i'm glad they have lowered the price of batteries to some of the customers that were impacted by this. and if there are rebates for some of those that didn't get the lower price batteries. >> yeah, so in your mind is the matter close to closed >> we're going to continue to stay in touch with apple and monitor this we don't have any plans at this point to do anything more. i mean, obviously people have asked do you want to have hearings on this we think that for the most part at least the letter was

responsive to the questions that we raised. we think that the sort of changes that apple is adopting in response to this will create, i think, more transparency for their customers. and that's really what we're trying to achieve is just to ensure that these companies that have these advanced technologies sometimes when they communicate with their customer base about the changes that they're making that they're not in confusion. there are a lot of folks frankly thought this was planned was obsolete and all they needed was a different battery. >> senator, while i have you on, i wanted to ask you about some headlines here nancy pelosi saying trouble for a deal to avoid a government shutdown the clock is ticking we're getting pretty close to crunch time and the president just made it sound like he's fine if this happens what is the latest thinking on that >> i certainly don't want to see a government shutdown. and i don't know of anybody in the senate that does i hope what happens is that

there is an agreement that's reached. it sounds like we're very close. some other things that might ride on the vehicle, send it back to them for another vote that would avoid any kind of a shutdown i certainly don't think that's in anybody's best interest we have an agreement to proceed on immigration, that debate will start next week in the senate. that's what the democrats had hoped to get out of all this and so i don't believe there's any reason for anybody right now to shut the government down. >> i mean, the report, senator, seem to indicate that leader mcconnell and schumer are getting very close that's your understanding as well >> that's right. our leader and the democrat leader, senator schumer, i think are very close to a deal which would wrap up some of these outstanding issues that need to be resolved. and frankly i think it's important for us as leaders here in washington to provide certainty, as much certainty as we can, to people across the country with respect to the

government operating and functioning. and then, you know, dealt with other issues, some unresolved tax issues that need to be addressed. if we can get all those things sort of wrapped into this agreement, i think it would clear the path to start focusing on some of the other stuff stuff we have to do. one of course next week will be the immigration debate. >> right is it your understanding it would be a two year deal as seemingly has been outlined? >> i think so. and most of our members are very interested inseeing that we increase funding for national security our readiness is i think at risk a lot of republican senators feel that way. the administration feels strongly the democrats insist for every dollar in national security a dollar increase in nondefense spending we don't think there's a policy rationale for that, but that's sort of what the democrats are trying to achieve out of this. i understand there has to be give and take, but the main thing as far as we're concerned on the budget caps deal is

create some certainty, hopefully get a two year deal, get the plus up in military funding to take care of the national security requirements which are desperately in need of funding now. >> and senator, going back to the apple issue, which is why you're here, i wonder if it is your committee's business to get involved in issues whether iphones and social media need to be regulated more closely. >> well, you know, our committee has jurisdiction over the tech community, internet, and jurisdiction over federal trade commission, the consumer protection enforcement agency. we do a lot of stuff in consumer protection space we have had hearings on faulty air bags, hearings on forcible removing people from planes, hearings on new technologies that are required on trains. our committee is tasked with doing oversite when it comes to consumer protection and safety we think it is certainly in our

role to make sure those companies that are manufacturing some of the wonderful, great advanced new technologies, communicate and have transparency with people that are customers. we're trying to be sure people have a voice in all this >> senator, things move so quickly these days and advance so fast, do you feel like the committee is up to it and those working with you are up to it keeping up with what's of importance to the american people when it comes to these devices? >> it is a challenge because things are changing so rapidly that's what's exciting there's so much innovation out there. our community is dealing with autonomous vehicles, a wonderful new technology, but has to have policy framework in which to operate. but yeah, we get wonderful people on our staffs, they're very sharp, very much in touch with what's happening in the economy now, but it is always a

challen challenge. when you have an innovative economy that's taking off and starting to grow, a lot of change happens keeping up with that change is always a challenge >> certainly is. autonomous vehicles could be -- we could spend a long time on that i look forward to it in the future senator, thanks for joining us >> good to be with you all thanks. >> we want to read apple's statement made to the committee. they said as we said publicly, we have never and would never do anything to intentionally shorten the life of any apple product or degrade the user experience to drive customer upgrades, our goal has been to create products our customers love and making iphones last as long as possible is an important part of that as we said publicly, we have never and would never do anything to intentionally -- actually, i am reading it again. >> that's a long statement >> it is there twice here's a man we see twice. john ford has what's coming up on "squawk alley."

>> snapchat parents snap up 35%. question is, is this a short squeeze or something more real and perhaps more important after earnings, the start of something big error the start of twitter all over again we will explore it coming up [ click, keyboard clacking ]

[ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ] ♪ good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours.

welcome back to squawk on the street the energy sector was a strong performer. still positive on the day, as you can see. a drop in oil prices, after government showed a build in inventory. chesapeake, cabot, noble and apache are lower we will see it it f it sticks. when we come back, shares of snap surging we dig through numbers, bringing analysis next on "squawk alley."

each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group.

we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. good morning it is 8:00 a.m. at snap headquarters in venice, california and 11:00 a.m. here on wall street "squawk alley" is live ♪