happening in europe, red arrows across the board in fact, right now, most of the major averages are down by more than 1%. the dax when we checked earlier was almost flat. you can see the selling has excel rated there as well. this comes after weakness in asia overnight. folks, that does it for us today. make sure you join us tomorrow right now, time for "squawk on the street." ♪ welcome to "squawk on the street." i'm karl quint anea with jim cramer there was a miss from ten cent that hurt the tech names in general. europe is firmly in the red as you heard becky say. despite some decent retail sales numbers. productivity and labor costs the futures are down, the dow

pointing to the triple digit loss at the open shares of macy's took a beating. and whale watching, buffett loads up on apple. a look into the new positions by some of the world's largest investors. stocks are set for the lower own as concerns about turkey and trade tensions return to the forefront. it has been said, jim, it's not just turkey today the ten cent miss is notable, despite they have lost $150 billion in market value this year. >> look, ten cent, we know one of the hottest sectors is call it take two -- the ea sector, call of duty we have a bear market over in china and the chinesereally kind of drove that stock down. $150 billion the stock was up because it had the most momentum over there if they had a faang it's -- it's the "a" or the "t. i don't even know. this is way overdone

there are some banks in europe that are caught. there are -- there is a decline in china of some magnitude and i know you never want to say to yourself, okay, we're immune and they're not. because there's too much of a book carried over from europe. but we are not in trouble. the rest of the world may be if you see indonesia raise rates. you can start to come up with a mosaic on this the only reason we should, interest rates are coming down that's bad for our banks but the rest of the economy -- these rates are lower. >> for those who say stop focusing on the s&p and russell and look at what bitcoin, the lira, the peso, copper, shanghai, the ruble, oil, gold have all done in the past few weeks. what do you say? >> i think a great place to be is our stock market. we finished with our earnings. one or two stocks you get -- they make you look at the market

well, goldman on the down side because it sells at nine times earnings and apple there's warren buffett buying some i know the whale watch is fr from -- it's dated back. but i look at this i was watching brian solomon this morning the market was barely down. it was funny because during the show it started to drift by the time you got to the nice person who gives you the news from the rockefeller center, like, wow. hey, what's going on it sunk in to europe we have a couple of banks who were stupid enough to lend to turkey we know that emerging markets do this we don't know what the end of the day is, we look and we say our economy is actually stronger but we are not at these -- willing to say that yet. and a lot of people are now saying, listen, we're whistling past the turkish graveyard it is less than a trillion dollar economy we talk about their tariffs. i mean, look it's almost like -- remember, it's almost amusing, the tariffs. >> i mean, 50% on rice

140% on spirits. but totals what? >> yeah. >> $1 billion. >> ever had rocky? >> no. >> it's a really powerful alcohol they have in turkey. you can be blind for three days if you drink that stuff, but if that's what they drive people to, good luck. >> the vix near 15 again above the 50 day for three consecutive sessions so you thinkthis is what you'd expect >> cleansing, you have to have it august, you and i have been in markets, bullish smartest guy out there, you know, made an errant statement on a sirius satellite station that was really -- he heard it the announcer. it reverberate we now have a situation where we're all going to be like woe is me. we'll watch the bank stocks go down we'll say we'll hide in domestic, but this was quite

good we'll smoke pot for the rest of the day. >> we'll get into canopy growth. and by the way, bullard does not see a widespread contagion coming out. >> he's so smart we had our disputes. >> you have had your disputes. >> yet, he was always very rationale and gentlemanly as i was. but i think he reese really good but you have to let this go through. like i saw morning during brian's show, like okay, you want a little contagion, we don't have -- there's no booster shot you know, there's no shot for shingles which unfortunately i have to have because i'm so -- i'm getting older. but you have to go through it. just watch it. and don't panic. look for opportunities ala warren buffett i come back to warren buffett because he's the best investor of our lifetime. and i know that he's sitting there in omaha and he's saying, hey, hit me. hit me again he has a five and a six and the dealer has a king, is going to bust -- well, we don't know, the

dealer has a four or a six but he's doubling down on five to six and the dealer is showing four i want that. i want that hand you know, the dealer is not showing a six, but a four. buffett will do what everybody else is going to do -- he's going to buy. >> buffett boosted sales in apple and southwest. we did get more evidence of an upbeat consumer. overall, the retail sales are up about 0.5. macy's did report better than expected quarterly estimates beating estimates by 19 cents. 70 cents stock is down despite that news that you talked with becky about a moment ago they did exactly what home depot did yesterday. raising on comps, eps and revenue. >> look, jeff has done a masterful job. he continues to buy back bonds, he continues to fix the balance sheet. i call that visionary because

their balance sheet was awful, they bought stock. they bought -- they really bought stock high under the previous regime. as much as i liked the previous regime, jeff has done remarkable things the home depot call was disconcerting because the analyst kept peppering them, well, affordability -- it was the watch at level, now at 144 housing is too expensive and that's resonating throughout the system if you take a look t average home builder stock is down huge. we lose housing and auto and there was a nice article in "the wall street journal," i think the dividend is safe by the way. wow, housing is 10% of the economy. auto, another 10%. you end up with a lot of the u.s. economy not doing as well and we can't all buy chipotle. the home depot call was disconcerting. >> beyond their discussion of freight costs, shipping costs. >> it was disconcerting because the analyst did not listen to a word the company said. the company had a great quarter. now they did -- remember, they

had a weak first quarter and then the comp was destroyed by that but the company said, we're buying back stock, the numbers are going up, no one listened. people said it's no longer retail, but a housing pay. if we have toll down this much, then only 44% of the homes are turning over then boom, we have to sell everything that led in housing >> doesn't explain what's happening with macy's. >> macy's is apparel the stock ran up every day into this quarter including some bozo who bought it about $42.70. i said what are doing? then there's a mix-up about friends and family they boost things but jeff put it perfectly by saying, if you add back, we got the 2%. i think people when they see the firms they must have expected that it was going to be like a burlington or a tjx. it's not macy's is a good company jeff doing a good job, people will say, wait a second that was

a reach and now it's going done, he's not buying back stocks, but bonds. go buy some tapestry if it's weak on "mad money" we talked about the strength of kate spade, not just related to the tragic -- remember, she was not involved for ten years, the tragic death of kate spade. i like the apparel companies more than the brick and mortar nike, matthew boss, he is neutral on it. nothing is as good as kors, not coors beer which is going down. >> we have to get to stz in a minute you did mention tapestry and asia we have a downgrade at tiffany out of oppenheimer on china. listen to what the tapestry ceo told jim about asia growth. >> we're building a platform upon which all three of our brands, coach, kate spade and

stewart weitzman can grow. backed by the investment strategies you discussed in china. when the coach brand entered china ten years ago it was a $50 million business and today, north of $600 million. awareness today that's basically at 30% relative to kate spade at 2. so tremendous opportunity for us across the asian markets for growth. >> so you'd rather have names like that than more of domestic plays, tjx and kohl's? >> yeah. the stock was at 80, goes and buys -- he buys tommy hilfiger and then he buys calvin klein. klein in different pieces in asia next thing you know the stock has doubled. tapestry has a very good look. remember, that's the old coach very good look at back to school $800 million men's business going to -- a huge amount of money being spent online for

advertising. it was up 12% yesterday. think of the stocks that have done really well i know that people want -- they see the futures down wow, i guess i'm not thinking about turkey no, you are. you are thinking about turkey, that's why the market is down. it's got to test itself. but unicredit has some exposure. i'm surprised that the spanish banks have been better lenders than this. if you think unicredit can bring down italy, the eu is going to bail that out. >> one thing we haven't mentioned the whole turkey story happened just as we tried to retest the january highs >> yes. >> now people are putting up charts island top, right, unfilled gaps for three days >> i know. >> bothered you were not >> look, the vix got really low, it didn't take much. the island top, we had so many islands it feels like i don't know it's like 1,000 islands. we didn't talk about the elections. a thousand islands so let's keep our heads cool

understand that the market is going lower. try to find stocks that you really like. if you want to throw away stocks, throw away yourself. because it's not what you do here take a look, oh, home depot at 189 that's kind of interest. tesla's board in damage control after elon musk's tweets not to mention the news on constellation and canopy growth. we'll get industrial production in three minutes don't go away. at ally, we're doing digital financial services right.

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. retail sales, now production production, now let's get to rick santelli. >> yes, our july read on industrial production is up 0.1% that's a little light. but like retail sales big revisions. last look at up 0.6 jumped up to 1% if we look at the utilization rates they topped 78 a rare event, 78.1 that follows another upward revised number that ended up in 78.1 so solid levels of utilization we see the dollar index continues to hold substantial gains although the preopening equities continue to weaken.

yields drip down to the lowest levels we have seen since friday's volatility. carl and jim >> thank you very much talk to you in a bit meanwhile tesla's board is in damage control a week after elon musk tweeted he is considering taking the company public the directors have sent a stern message to musk -- stop tweeting he has not heeded that advice. some of the board members have grown alarmed by what they see as erratic behavior from musk and trying to inoculate themselves we'll talk to kate kelly later on today and andrew sorkin. >> i think we're dealing with this fallout of this august 7th. it's almost like people are just saying, what did he know when he tweeted and when and what i'm concerned about is that we're overthinking this people distancing themselves from who there's a governing agency called the s.e.c. and they will

look at this and they may decide wait a second what was -- can we see some paper about the funding? if he says look, you have to trust me, i think that they could sanction him we don't have to trust you, but this idea that somehow there is going to be a major fallout about him start focusing on the number of cars being sold. there's a lot of stories that are about how they're unsold -- there are unsold teslas. i would like to know that. i think that's far greater an issue than whether the august 7th tweet is going to get him in trouble with the government because it doesn't work like that. >> right that's exactly the critic's argument that elon wants to make it about him versus the shorts. right? as opposed to him versus the people who count cars coming off the line. >> well, if he's distracting he's certainly done a great job of it. there are people who literally do obviously watch cars, watch parking lots the scrutiny is such that who

can blame this man for wanting to be private? but then again, he just -- all he does as mark cuban said, just make it worse for himself. obviously, we have a couple of people that we think of who can't stop tweeting and both of them i think it's doing them a disservice the other one i don't think i have to really mention, but there is -- andrew had this great line about well, what is it about people they can't stop tweeting if you're going to tweet, tweet your darn dog. >> yes by the way, wells takes nvidia, 315 target if you're worried about mine or ethereum you're worried about that. >> the dog recoiled on this one. now he's got a very high price target and my problem with that is when you read the upgrade the double upgrade as they say, there isn't anything in that upgrade -- there we go >> yeah. >> yeah. see that

wow. okay my wife is very angry that picture was taken at 4:15 and the flash went off she said do you have any shame it was like when wells was talking to mccarthy. but i feel that people should recognize there's nothing in that upgrade whatsoever. but there's a story, they have a new chip out that is going to reinvent people -- >> maturing technology. >> yeah. i remember when the last iteration, red dead redemption that's something we should be talking about in its own, it's going to be so hot but he actually wanted red dead to be run on nvidia chips. the next generation which people were saying not that long ago was not going to come out is -- i quote colette cress, this is the holy grail you will watch video games it will be exactly like movies.

wow. >> yeah. >> grand theft auto and red dead redemption, no stopping these. the others are a bunch of ten centers. >> we did have strauss on the show last week after their amazing prints it is incredible. >> remember, strauss is from the movie business. >> the whole thing acts like a movie business. >> it's unbelievable he is in sync with nvidia and they're king my other dog bug -- you know, he just wants treats. >> what's the stock analog to bug? >> bug, he was chevron for a while. going higher but geez, he's completely lost it lost his mojo. >> when we come back we'll get cramer's mad dash. we'll count down to the opening bell we're looking to undo some of the gains that were made ckft ahort break e traveling hase with your golf clubs. now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com

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♪ just about seven minutes to the opening bell let's get to cramer's mad dash what a story in spirits and cannabis today. >> yeah, rob sands is a true visionary. corona, constellation. he's taken -- he's moved the stake up here. he's got 38% of what i regard as the most investable pot named canopy growth. that's bruce linton. been on the show a bunch of times as has rob canopy growth is medicinal i want's got the best recreational black label tweets the premium sub brand. and rob is getting all these, it's the premium that he's paying it's a 51.2% premium to the

closing price of august 14th $3.8 billion so what rob sands is saying, this is very real. now a lot of people -- the question is is it going to be pot beer, is it going to be edibles? what exactly is rob getting and the answer is he's getting a full panoply because this is it. this is great taste, less filling. >> we know canada goes full recreational legalization in october. >> yes. >> millions of customers coming in online. is the story going to turn into supply, being able to meet this immediate demand >> in some sense it's a refining play do they have enough cannabis the website is undefined this is the suspension of the buy back that's hurting

constellation. constellation has been buying, buying, buying it was also -- rob sands would say there's no substitution issue. beer is selling well, but at the same time, obviously everyone is concerned about how people get high and what kind of buzz. i'm not kidding. this is -- close to the liquor industry it is remarkable how fearful they are because of how oregon when prices collapsed for pot, because there's been so much -- they ripped out the pinot noir grapes, the prices came down the beer is too expensive. sands might disagree with that but it's a big buzz. 50% of the country, i have elizabeth warren, the senator from massachusetts, going there. >> we'll talk to the ceo's of these firms in the 10:00 a.m. hour opening bell coming up, don't go away

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in 90 seconds on this -- actually busy wednesday for late days of august we have been through some of the positive data we got on retail sales, productivity. we talked about macy's, but the eyes keep coming back to emerging markets turkey adding some more tariffs on u.s. goods. china fixing the yuan again at a 16 month low. >> yeah. china's got to come to terms with the trillion dollar treasuries if they go and they sell those they're going to boost the yuan. they go back to buy -- the dollars go to buy the yuan you have a lot of stocks that keep going down. you don't know how long people are so to speak. this emerging markets is always -- it's whack-a-mole. it's indonesia well, wait a second it's spain that's disconcerting to people when the market is high. we don't have housing. we're worried about auto so you can create a narrative

after home depot and after ford went below 10% let the market come in we have had good earnings. let's not forget that. >> there's the opening bell. on the left side of your screen. it's the new york city football club, the silver sun technologies the provider of i.t. business management and cyber security services. >> cyber security is another good place to go a lot of the craziness you see around the world, plays right into the hands of cyber art. proofpoint right into the hands of palette. i find that somewhat disturbing. palo alto networks very good management company. >> so it sounds like you're trying to get a shopping list together in the face of future weakness. >> yes, because i see the secular trends that are so good. like for instance the cloud kings. we have another note today this time about salesforce, how

well they're doing workday. you don't get to buy the stocks typically. because they're not down so you get them down off of turkey really trying to twist them. and no, what you should be focused on is maybe this is my opportunity at last to get into the stocks nothing to do with how nick pennybush is doing apple was up big because of warren buffett, now it's down. goldman benefits from all of this turmoil, yet, i know that people say i have got to get out. but when you ask them why they're getting out, they're not quite sure well, because of turkey. well, why, because of indonesia. why, because of b -- it's what i call circular reasoning. >> it does come at you in a hurry. indonesia, a surprise rate hike. we had argentina's rate hike

yesterday. when you say whack a mole, this is in the last 72 hours. >> sure. there's fund managers who proselytize emerging markets they go up and then you get wiped out. as soon as they're done, people sell them. that causes a lot of pain. we know that loans denominated in dollars people didn't somehow link it to us usually they link it through the banks. i'm sure jamie dimon is saying let me speak to someone who's involved with turkey well, we really don't have any -- okay. but our stock is going down. so you have to let it play out is what i'm saying let it play out. >> right. >> do not stand there and say, i'm going to ignore it let the panic play out then look for the secular growth companies that even if turkey were as contagious are immune. i mean, this is not the black plague okay it's not the bubonic plague. this is something that you're going to get a fever

the fever is going to run its course it's more of a tylenol issue than it is -- let's just say something that involves -- >> icu >> i was going to say the stand. remember the stand, 99.4, what was the percentage stephen king's best work everyone who's read it remembers the lincoln tunnel scene. >> the ones that are green, you'll find clorox in there. >> how about kimberly? kimberly has a negative note by society general. >> chipotle is up 3%. >> so great. basically this is do not miss this, much better through put and run. everything is true that's a good example of something to watch today chipotle at 500, $800 price target chipotle is really good, i agree

with that, so how much is chipotle related to turkey they don't serve rocky i reiterate for those who just joined the program at 9:30 if you have some rocky, don't do it in the morning it tastes like -- those who are that old remember paragoric. it's powerful. >> you have to go back to march of '16, so it's a breakout. >> so much better run. those who haven't been there lately, watch how quickly you can get in and out brian niccol has brought a level of taco bell like precision which you need with the -- still with the natural organic don't forget when he does free guac, it's really expensive. people love that. >> we did have some -- a store i think it was ohio in the last few weeks that there was at least the company had to acknowledge some safety concerns >> i think that it's a testament to this new management

you have a hand -- knew how to handle the situation i think that the previous management was blind sided because they were generally concerned is it the way we do food >> processed. >> look, brian niccol is a seasoned player. he did unbelievable work at taco bell his stuff was very funny but i like through put to me, the issue is always how quickly can you get in, how quickly can you get out, how quickly can it be delivered? like when my step daughter graduated from bucknell else are you going to go? chipotle. >> macy's is the worst, how do you know where to go, right? >> well, kohl's -- >> nordstrom >> look, nordstrom has disappointed, as i mentioned the other day. they have a habit of disappointing. i don't they'll break that habit. kohl's ran up, these all ran up.

you saw yesterday was the great division between tapestry which is an apparel provider remember, handbags and shoes are on fire. then home depot on the other side was okay, retail sales, not as strong. the national retail number is strong macy's and kohl's ran up, let them come down let the panic occur. do not stem the panic. let these peoplesay you know what, it must have been bad. meanwhile, there's jeff gennette laughing unbelievable ceo at macy's fixing the balance sheet having all the right merchandise. there are comments about expenses are you kidding me? he raised numbers very big so i just say there are people right now who are selling macy's because they think that other people will sell macy's. is that wise probably today maybe even tomorrow. will not be wise by friday. >> really? so all these people who are posting charts of the 12 months it took for it to kill the s&p's gains -- >> well, you know, look, they

want to have some fun. i absolutely remember 1997 i remember standing on the steps. talking to charlie gibson, "good morning america. standing on the steps where hamilton -- not the hamilton from the play but the real hamilton time to buy, hedge fund. why are you doing that isn't it horrible? well, it would be horrible if cisco were doing bad reports if intel were doing bad. microsoft were doing bad but those are companies that are doing well once again, not intel this time. you have to take that off the table. because they don't have a ceo going there. but there are companies that are doing very well. let me give you an example of disney there's so many money managers who want to be in disney that they are praying that erdogan somehow bleeds into disney so they can get it at $110. they want to buy it at 110 warren buffett i come back to, he knows where turkey is on the map most surely.

but he has many conglomerate companies and there's not a lot of gdp there. >> the managers had the chance at $98 not that long ago. >> isn't that something? second chance. they want to wait till things come down. watch the soft goods first they will bottom first watch a companylike j&j. watch a proctor. they bottom first and then we move on. coca-cola. then the second wave i believe would be big cap tech and the cloud kings. a company that allows you to be on board and then amazon watch amazon good notes again about the advertising business tapestry putting so much money online look at this when you talk to conagra, they're putting more money online than they are on tv slim jim they call me slim jim. >> because you're slim amazon back to 1900. ge, we talk about ge with a 12 handle it's pennies away from starting with an 11

down 2%. >> where is sweater man? steve doesic they need the oil to be higher i can't no countenance this is the level to buy ge if you can get an hmo, a health insurer down if you can get the cvs down. an apparel company or software company down that's the problem so many other opportunities. companies that are doing incredibly well. why do you have to say i'm drawing the line in the sand and buying ge? because you have no catalyst i think that their health care business is worth a fortune. i'm putting this much on this fellow, until tusa goes positive, be warned.

he has a tie in the picture. >> western digital gets a downgrade today. >> such a bad downgrade. talking about flash and how weak flash is. >> substantial, unabated, competitive prices tactics not just from western digital, but from toshiba and intel as well. >> western dig trying to take a share back a real price war there by the ay, on the red fin call they talked about price wars in real estate. price wars historically look out, so be careful of price war situations that's not where you want to buy. i prefer cloud king, i prefer those consumer product companies that have good yield i'm not in a hurry i want people to throw away stocks we need to have people who say i'm throwing away because of turkey and then five days later say turkey okay of course it's the -- it's the

bank of america of turkey, sell them, absolutely indonesia, yes, i'm worried about indonesia. >> find out if it's one of the long lasting fevers. >> tesla in turkey. >> if david were here we'd bring up diamondback energy. $9.2 billion. >> this is more consolidation in the permian. by the way the junior one is buying some assets of devin and issuing stock. diamondback energy is the most momentum stock in texas. they're accumulating what keith meisner talked about at a dinner i went to. he said over and over again, it's inexpensive it has great acreage in the permian. permian being west texas and people then get nervous because there's not enough pipe out of the permian what is permian doing offering all the stock, now we have the stock going into energen nobody likes that deal because energen was a kicked aroun company. no one can figure out why such a

brilliant company like diamondback is buying them but then again they're taking a long term view that's a dangerous view when we have turkey. >> yeah. >> by the way i heard people want to talk about turkey being this great ally. with allies like that, you know, what do you need do they let planes -- there's always countries that are our friends so to speak. but i'm much more in the dan d'amico camp which is friends you have to put quote marks around friends >> yeah. there's reports today that erdz with an had a phone -- erdogan had a phone call with merkel, for example, talked about syria and bilateral ties merkel told him apparently that turkey's health is important to germany's health. >> the guest worker program is -- turkey and germany they have had a close relationship for a very long time but the fact is that this is basically a dictatorship and there are many of us struggling knowing they have imprisoned more journalists more than any other country on earth.

people think they're a great friend, but when you imprison more journalists on earth, you're an outlaw regime. it's like do you think really that you want that regime to be in charge of what was once a great democracy? in 1993 it was a fabulous democracy. so let's be careful in endorsing some country -- betting that erdogan, let's hope he stabilizes because i'm sure there are others that say why do we need that government, let's get a regime change. i don't think that's possible. i'm finding reasons to be sane about turkey rather than insane. >> good to have one sane voice around here. >> thank you. >> dow is down 150 s&p down 16. let's check in with bob pisani. >> like a ping-pong ball this week up, down monday. up tuesday down tuesday china is down 2% europe is down 1 to 2% weakness in autos and banks and

here in the united states, this is about the dollar. it is about global growth. you can see this because it's emerging markets are continuing to get hid and -- hit and commodity based stocks are getting to the metals and mining, down again today material stocks down again two major market issues out there. first is this market contagion concern. indonesia and argentina raising rates obviously to stave off any concerns about turkey's contagion here and china -- i think we were surprised today. seeing 10 cent profits drown the first time since 2005. wait, a china tech company declining profits, that doesn't happen people were shocked. this came out at 6:00, the ten cent news. we were at 28.34 look at that the market just dropped ten points right at the ten cent news i think that was a major factor

in the market's weakness ten cent, you know that they do. they're online gaming. a lot of scrutiny from the regulators over their -- about monetizing the online games. i think that really affected them social network, online ads also very big i think the whole issue around the gaming was a big problem china stocks have had a horrible time this year this is a very common theme. jd.com, they're reporting tomorrow 33% down ten cent down, baidu, alibaba, most hit the highs back in february elsewhere another bad day for commodities here we have a strong dollar. we have slower global growth concerns copper is down 20% from the 52 week high. a lot of speculation, might be some central bank selling of gold that's putting pressure on gold they don't put out a press release on that so it's all speculative. but you see the effect it's been having

finally, you can buy all of the countries. if you look at the ones that are weakest, it's not turkey a lot of these countries are export based argentina, south africa and brazil you see the declines here and again, these numbers just continue to fall as the dollar strengthens. you get the concerns about global growth. it is really a double whammy and we're essentially at the lows of the day, the dow is down 175 points. >> thank you very much let's get to rick santelli plenty of data and more to come. >> yes, more to come you know, if you look at twos, we're down two basis points. look at the one week of tens we're getting the drift back we're down four basis points more curve flattening hovering around 54. let's pick one day how about june of 2017 because everything goes back to those days in june of last year. dollar index hovering at the best levels since june of '17.

of course the euro versus the dollar over 50% of the dollar index hovering at the worst levels against the green backs since june of '17 as is the pound. you know, everybody is talking about the yuan now, if you look at the following chart, this is really fascinating. this is basically a ten year chart. early august 2008, we are just a whisker or so away and at this pace maybe a day or two away from ten year highs of the dollar versus the yuan if you want to see what's going on, okay, before you get to the next chart, think of leverage and financing. the first probably explains a lot of things going on in emerging markets in general. china specifically but with regard to financing, think of all of the moves in commodities. think about the strength of the dollar think about the issues of keeping, holding and -- holding the commodities. here's a year to date chart of

the dollar yuan versus the shanghai composite but boy, you talk about a chart that says it all of course as capital potentially flees, as china of course has many issues before what's going on with the elevated levels of some of the trade talk really taking a toll on its markets carl, jim, back to you. >> see you in a bit. still to come, constellation brands making a $4 billion play into cannabis. canopy growth, we'll talk to the ceos of both companies. early session lows, the dow is down 205 points and the s&p back to 2817

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dow's down 19, "stop trading" with jim is next ok, show me what you got.

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let's look at proctor and gamble you saw kimberly getting to high profits. i am not enamored of the growth profile, but watch the fact that the prices are now going to stick. that's what people are worried about now. very important >> you've got elizabeth warren jeff lawson, twillo is up 200%

right now. he said he was going to teach me to code. but i didn't go to stanford. i didn't get into stanford i'm done with stanford >> you would have made a great coder. >> at $28.14 before you go, when do you start hearing things about technical damage i'm looking at the companies that have buy orders i recognize that people are panicking off the charts and i found if they panic off the charts, you can't bounce immediately. if there's something really wrong. let that seep in let it come down there's no sin in that and macy's wait until macy's bottoms, then you'll have a good idea of how this whole thing bottoms. >> we'll see you tonight

"mad money," 6:00 p.m. eastern time when we come back, mna and cannabis, on that $4 billion bill, dow's down 230

♪ good wednesday morning, welcome back to "squawk on the stree street" at post nine of the new york stock exchange. a lot of data, including some inventory numbers. let's get to rick santelli >> on the inventory side, that june number is up .9% more than expected now we have the national association of home builders housing index. .67 was expected, .67 was what we received. but .67 was the weakest number

since 2017 these numbers really started to pop into the 70s last year so it does represent a dip, just like interest rates. we're now down about five basis points on the short end, and more curve flattening. >> thank you, rick santelli. our road map for the house, macy's slammed we'll dig through those numbers for you. plus turkey's selling off, we'll hear from former bank of india governor, how he would turn the current currency crisis around > let's get back to the markets this morning markets still seeing the effects of turkey's currency crisis. turkey's prime minister saying they will protect the lira

gentlemen, thanks for joining us today. allan, i want to start with you, despite the fact that we have seen a little bit of stability in the lira in the last two days, we do have the dollar index hitting another 13-month high, how are you thinking about that >> i think generally the dollar is very well bid turkey was a catalyst and a little bit of an excuse in the increase in the dollar the lira is just knocking over the weakest currency it can find today you have the south african rand china's back in the mix. so it's just moving from one currency to the next, and that's not unusual when the dollar is generally strong >> are you concerned about pain in turkey spilling over into other parts of the country >> turkey's economy is going to be hit really hard by this

financial crisis i think in terms of the global economy, you have to keep in mind that turkey is roughly about 1% of global gdp so not that large. so the contagion effects are going to be on the other side. we have looked at this in considerable detail. it seems containable maybe for a few banks. >> paul, not only is china in the mix, hong kong had a position in the currency market to combat the pressure first time we have seen that in a while. copper is at a 13-month low. how worrisome is china right now? >> yeah, the markets are certainly testing the chinese authorities to see how much

currency they're adding. it's been policy related reforms are driving this how far do they want to hit the brakes we think they lay off the brakes here, and that hits commodities higher and that allows investors to see that china is not going to repeat 2015 again and that the economy is really very stable >> meantime we have the strong retail sales number for july, out early this morning more signs that u.s. economic growth is chugging along where do you think we go in terms of the second half of the year with economic growth and how do you think the fed is looking at that? >> just speaking to a colleague of mine just before the gdp numbers came out and i'm sorry the retail sales numbers came out and the gdp numbers for q-3 are just about 3.1% the 3 range is perfectly reasonable and it's very strong in relation to what's going on elsewhere in

the world, where there's a bit of a global deceleration going on pretty much right across the board. >> consumer spending is right across the board, there are signs of consumer spending across the board, but it's going to raise prices on everything. slowly consumers here are facing higher prices. is that going to cut into the healthy spending we have been seeing >> not much. you are going to see some impact from tariffs here, probably already seeing some in car prices, but mainly it's the economy and strength that will push inflation to a range sustainably to 2, 2.5. you'll get higher numbers as we get year on year changes we have the cpi really showing some upward movement now not everything is growing at the same rate, though, that should keep us in the 2, 2.5% range,

should be good for stocks, should still be good for consumers. >> are u.s. equities still the best house on the block? or are other markets around the world, are there still buying opportunities there? >> this is still a u.s. dominated global market equity as the dollar strengthens even further, then u.s. multinationals have to be careful about how their translation risks are mounting in the coming months we don't think the dollar will continue this way, we think the worries over emerging markets are done, but that's something to watch going forward >> do you agree? do you think we're closer to the top on the dollar or not >> yes, we do. so, look, i think we can easily test 110, 111 on euro/dollar

this is not such a euro/dollar top. i think you're going to get push back from the u.s. administration much below that, there's going to be a sense that this is ultimately going to weigh on growth and there will be a restraint in terms of equities as well >> what can we do from a rhetoric standpoint? >> so you go beyond hetoric,so the rhetoric gets stepped up perhaps. then we're probably not there at 110, but somewhere near the prior highs on the dxy, you could easily get some sort of direction from the u.s >> you're talking about the fed? >> the u.s. treasury leading the way. >> wait, you mean stepping into the currency why wouldn't the fed just hold back on rate hikes >> that's one part of the equation, but the fed is a little bit more sensitive than the administration, a little bit more sensitive that the fed is

>> do you think this is result of president trump's foreign policy i mean, yes, emerging markets are under pressure for their own reasons, and the fed raising rates, but th rates. >> i put it on tough fiscal policy on one side and china is slowing and the tightening of liquidity in china is somethingfocussed on. but the tightening you have seen in the past is going to bring the economy down further it so that's two big drivers on the dollar/yen side. >> i think another factor to watch that's still in the background is a recovery in european economic performance. we're already seeing indexes of surprise measures. that is to say, how economic numbers are coming in relative to expectations and consensus.

those surprises are turning positive i think you'll see european growth turn higher, and eventually the u.s., the five-hour energy effect, you'll see the dollar reduce on its own because of those fundamental reasons. >> allananlanalan, thank you >> we got awfully close to 25 k on the dow we're back to 29 now on the s&p. we're back in a minute well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking?

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cast your votes during every live show. just say "vote for agt" into the x1 voice remote. welcome back to "sk on the street." shares of macy's getting hammered this morning. courtney joins us with more. >> as you point out, shares are selling off and most of the analysts are just pointing to profit taking actually because macy's gained about 40% in the past three months and had a big runup yesterday too. so to clear up some confusion about a macy's gain, shares came in more than estimates macy's also raising its full year guidance, now expecting full year comparable sales too to be up 2.1 to 2.5%

they had previously forecast about 1% to 2% growth. comparable sales, this is on a licensed basis, that came up .50% on the quarter analysts had expected that to follow 0.9%. and i talked to macy's ceo he explained that momentum improved tloult the quarter, with july being the strongest month. that's something that macy's did explain a lot last quarter hoping to minimize any surprises this time around with the sales indica cadence shift. and transactions grew across the physical store fleet, foot traffic he says is in good

shape. and many categories, from women's dresses, jewelry, kids, all strong weaknesses in mattresses, though, and he says that's something they're working on macy's has been also working on updating inventory to bring more shoppers in. and more shoppers were buying at full price as opposed to on sale as in last year. >> stock was up 13%, is that just like sell the news? all the other department stores are getting pretty hammered as well. >> and that's what we mentioned at the top there, is really the runup. say the last three months, shares were up between 37% and 40% just in three months, so almost every day in the quarter, i think one analyst pointed out, that's a pretty big runup after it had a number of years to be fair where it struggled a bit.

so it is essentially some profit taking, that's what all the analysts are reporting to as they're digging through things, because the shares started to fall on that release the conference call didn't start until 9:30 there wasn't really much more detail to trade on beyond what was in that earnings release which is why the profit taking seems to be the best explanation for what's going on here and even if you look at the retail sales report for the government, department store sales were up in july and also up year over year. so that doesn't really explain the drop here. >> even with today's decline, it takes you back three weeks, maybe four back to the middle of july so it has had an amazing run tesla's stock is now sitting below levels before musk's tweet storm last week, and now tesla's

board is in full damage control, warning elon musk to stop tweeting we enjoyed that piece you did. it is shining a light at least on the board's perspective why are they saying stop tweeting >> there are a few keys to the story, they're trying to rein in musk's tweeting, the first being the most serious issue, that he made a tweet last week saying he wanted to take the company private. and that's not extremely accurate even though he may have thought that at the time he doesn't have the funding all lined up in fact he doesn't even have advisors securely lined up, at least as of last night he was talking to goldman-sachs, he might be working with silver

lake partners and others including some law firms, but that's not firmed up he's also gone off on some tange tangents, he disparaged one of the cave divers who rescued those thai boys. that's just kind of some of his offbeat tweets he's definitely very active and frankly it reminds one a little bit of the president who has been reined inner attem oin, or be reined in by his staff. it's just a way to share his thoughts and beliefs, which is probably the case with musk here >> and you have a large world of people who are close to elon musk and not so independent. but when you're talking about something like twitter and somebody's smart phone, how do you control that anyway? >> right, so the board is

relatively small, it's nine members, his brother is one of them there's another one who considers themselves such a good friend of his, that they didn't want to serve on the special committee of three people who want to co-ordbe recused from a variety of things including zone issues, so it's a three-member board who seem to have conflicted feelings in their roles in the company >> you said it's not working, it's not working if the sec starts to crack down into the statements otherwise, he's beg ee's ginnedt of hype via twitter as a public company ceo, that's legal, right? >> as long as he doesn't misrepresent facts

you don't want the overhang of a ceo who's being obnoxious or even slanderous in talking about the cave diver for example you want to have a -- a renegade ceo who communicates with a broad spector of the public can be a good thing. >> the now sensitive corporate event, it's almost gone radio silent when you say in the piece that board members are racing to inoculate themselves, what do you mean by that. >> among other things, they have made this attempt to rein in musk's tweeting but they have also lawyered up the board has obtained paul weis to represent them. they're certainly thinking about the potential transaction here but they're also trying to protect themselves from anywhere possible outcome of an sec investigation. so they need to think about that

as well. >> not to mention the class action moves we have seen in the past few days? >> there's a bunch of legal fallout that's possible here and they want to be out ahead of it. >> we'll see you later when we come back, turkey's currency in turmoil, the country is raising the stakes in that trade war with the u.s former bank of india raghuram rajan will weigh in. the down is now 278 points, it did break a big losing streak yesterday, but now it's down more than 1% nasdaq has been hit the hardest down more than 1%. "squawk on the street" will be right back but how do you work with it?

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time now for our etf spotlight. taking a look at company buy backs in the middle of all of the earnings. >> and we keep talking about these buy backs, and it turns out there's a number of different ways you can play

this it's a big year for buy backs in general. there are several buy back etfs that have had varying degrees of success depending on what's in them the buy back spyv. it tracks the index that tracks the performance of the 100 s&p stocks with the highest buy back ratios in the past month the backback ratios is the b buyback stocks evenly distributes these 100 stocks and it trades pretty much in line with the s&p 500 the oldest one ask the power shares buyback achievers etf, pkw. this is a company that has

reduced shares outstanding by 5% over the last 12 months. this is heavy concentration in a group of stocks. this also sounds good, but this etf because apple is not there, has underperformed because of that apple exclusion and it's only up 1% this year maybe it's better to combine buybacks with other methods. u.s. free track tracks an index of companies that has the largest reduction in shares outstanding and combines it with those who have had the strongest cash flow. the emphasis is on companies that are shrinking the flow. that's important big holdings including aluminum, conoco and apple it's up about 10% this year, and it's outperforming over the last two years. it's not necessarily you want to find companies that are just necessarily buying back stock or

announcing large amounts of buyback, it's how much they're actually reducing the shrink, the float overall and then combine it over two other metrics. then you get combinations. this is not an obvious game to play here, just because the company announces a buyback doesn't mean the stock is going to go up >> isn't this the largest number of executions done in the month of august? >> the important thing is that companies still buy back stock when there are block periods it's not necessarily true when there's quarters that there's no way for the company to buy back stocks you can do that if the company has announced plans to do a buy back >> all the major averages are down more than 1% right now. we mentioned turkey, and the other thing that really seems to be driving the selloff is the

mist in tencent. >> the theme is a little bit about global persuasion. they're trying to be pre-emptive and get out in front of this thing. a little fear of contagion and this tentcent thing is a big deal 2% decline in revenues that's a shot across the bow about slower global growth, slower china growth generically. and those are very pertinent today. >> copper is down, more than two month low. >> you got copper down, aluminum down, gold there's something else going on with gold here, it's a real problem because the central banks will not tell us whether they're sellers of gold.

some of these smaller central banks out there are sellers of gold this is widely believed on the street but it's really hard to prove it on a short-term basis. >> when we come back, navigating a currency crisis, former bank of india governor rajan will weigh in and rob sands is investing $4 billion in aanbi cnas company. we're trying to hold on to the nasdaq and the s&p, worst day for both indexes since june 25

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cnbc news update at this hour. turkish president erdogan is raising tariffs on u.s. imports. as you may know, the trump administration doubled the tariffs on steel and aluminum imports from turkey. a prayer vigil was held for the queen of soul. it was held by several members of aretha franklin's home church news that the singer is gravely ill has been heard all over the world. and this driver smashes through the show room window she got the gas pedal and brake mixed up you know if a fan goes into the field during the game, you get ejected. his friend lent him a quote, unquote hand, by grabbing his legs he got the ball. that's the news update this

hour >> you can see oil prices are down sharply on this eia report. we saw a build in crude oil inventories of almost 7 million barrels. we were expecting to see a draw of nearly the same proportion. gasoline was down the same proportion so pretty much flat but this build in inventory you can see that crude prices are under pressure remember, the stock stories are about under growth it hasn't been the most robust driving season and inventories are starting to build early. the demand is tight right now so a little extra supply will have an impact on this market >> welcome back, everyone to squawk "squawk on the street." and a little over an hour into trading here and the losses have

been picking up steam. the dow's down almost 300 points right now. down 292 caterpillar, chevron, boeing are the biggest losers on the dow. s&p 500 down about 1.25% the nasdaq down 1.75%. so the selloff is getting uglier as the session wears on. groups like energy, materials, consumer discretionary are all weighing on the overall market you've got some higher yielding defensive plays, like utilities are higher but weaker commodities, potentially on some china concerns overnight the retail earnings not being particularly well received, double digit decline in macy's all the consumer stocks followed suit and turkey continues to be a shadow here, even with the lira bouncing a little bit for a second day in a row. >> we got down to 25,003

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semiconductor stocks are sinking right now. one strategist says the group is heading for a bear market. findut o why trading nation on cnbc.com more "squawk on the street" right after this

welcome back to "squawk on the street," let's head over to rick santelli.

>> call it a cliche if you want, although i have seen much market research over the last decade that gives it a market index that works, much over 50%. most likely you have heard more turn around tuesday. the reason i bring it up, today being wednesday, i thought the markets really traded well, especially after some of the volatility at the end of last week, and of course emerging markets, dollar strength but it really is something you might want to pay attention to having said that, there's a couple of charts that are just so enlightening. ira harris turned me on to this chart. this is gold versus the dollar versus the yuan. and other things i think is important, and we have been talking about it on the shows to a great extent and of late and those are commodities and how they always get figured into

finance, and when regulators go bad, there's the crb index how is all this going to affect interest rates that's always key. here's a 10-year chart year to date, the salient feature is once you hit a major milestone like the 311 high, the high yield close of the year, the major low that we had was the end of may and that was 278. now we're currently in the mid 280s and that is a huge area and usually huge areas, usually you give them plus or minus 3 basis points so you're trading right around 280, basically knowing that we have had some periods of major consolatio consolation, whether they were in the 280s or the 290s. another issue we want to tackle. we all know the dollar index is just wild to the up side

and back in the day it always depend depended on the fed. just the appetite for dollars to service debts and on the commodities side, we could make it even more simple. bob was talking about gold, potential sellers are not going to tell you if they're selling or not do you really need them to tell you? the central bankers love to hold gold where do you think it's going? they're selling it >> we are going to stick with that theme, emerging markets becauseturkey has cracked down today on short selling of the turkish lira meantime tensions between turkey and the united states continue as president erdogan doubles tariffs on some u.s. imports joining us now is the professor

of finance at the university of chicago school of business and i would say all out crisis expert with your time with the imf, how severe does this currency crisis look to you? >> it's early days and i think the real problem is turkey is an outlier, both in terms of the leverage that's built up over the years and the quality of policy which has been pretty bad. so it may be an early warning, it may be something which doesn't spread more widely because turkey is special. there are of course other countries which are in some situations fragility because they have upcoming elections, they have a large currency deficit, they have a large fiscal deficit, but generally emerging markets look a lot better than they did in, say, 2013 >> better than 14 is not exactly maybe the reassurance people are

looking for. when you look at trouble spots, gdp, account deficits, political instability, what to you is the most important thing to watch as we survey this landscape of cannabis >> clearly the amount of leverage that has built up is a big factor turkey has an enormous increase in private sector debt, a lot of it foreign exchange denominated, which is contributing to the problem. but i would say on top of that, for emerging markets, other than the level of debt, you want to look at the current account deficit, oil prices have picked up in recent months, because they're relatively stable right now. but some countries are heavily expose to oil. also, i think if you want to look at political fragility, upcoming elections, there are some countries which have very serious possibility of regime change and that's worth watching >> what about the country that

you led the central bank of, the rupee is now at a record low, should some of these central banks be taking action >> i think the rupee has been strengthening in real terms for quite some time. the inflation rate has been modest but slightly above world inflation rates and as a result, the rupee needs a modest weakening over time. so i'm not too concerned about the rupee hitting an all-time low, it's more a factor of dollar strength rather than necessarily rupee weakness but i would say broadly you want to look at countries with large current account deficits as well as a high level of debt. >> are you concerned about china? >> well, china is under going an enormous restructuring of the financial sector it that's happening at the same time as it is engaged in a trade spat with the united states, which could have larger

repercussions if each side sort of doesn't back away so, yes, i am concerned about china because it's doing something which hasn't been done successfully in the past it's really trying to clean up its financial sector fairly quickly and that's going to take a lot of careful work. and on top of that, we have this trade spat which has come and we also have a generally slowing chinese economy, so it has to deal with a lot of problems at the same time. >> so wrap all of this up together, and you've basically got a stronger u.s., dollar, stock market, economy, and it's making life miserable for a lot of places around the world you have warned before famously about the dollar strength and the ripple effect on emerging markets. how does this end? do you think the fed is going to have to switch the script? >> in 2013, when we had the last bout of volatility, the fed

stayed off raising interest rates for some time. it's not clear if they can do that now, because we have emerging markets gaining strength and it not clear if the u.s. has the luxury of sayi ing we're going to wait and watch for some time. if there is a serious problem in emerging markets, the trade spat gets much more violent in it's ramificatio ramifications, then it's much more similar and emerging markets will have to manage, which is why you see actions like the indonesian central bank which is essentially trying to say we have room to do what we have to do, don't worry too much about us, we're in a much better situation than we were before. of course there are exceptions. >> it's an open economy, i mean that would probably just make

matters worse. what would you do if you were running that central bank? some. >> i don't think that's the way to go. for turkey, it seems to me the right part is the part of orthodoxy, basically saying we didn't mean what we said about keeping interest rates low and that's the weight of inflation we're really going to take control of inflation, that means raising interest rates, having a serious inflation target, bringing more central bank independence i think that would do a lot to stabilize the lira but it's important that it not be a oneoff, it's not about raising interest rates once. look, inflation at 15% is not something we want, we want to bring it down to manageable levels that will stabilize the exchange rate with that, here are a set of policies that will ensure we do it. >> how does all of this add up

for global growth? >> as of now, it's still a tick down, but not a major one. i think what we really need to do is get rid of the uncertainty that's overhanging the global economy and that primarily means the trade issue. if we can take that off the table, there will be muchmore of a sense of confidence that china will remain relatively manageable and that this will not spread to other emerging markets and then feedback into the united states. so i think getting rid of the uncertainty over trade is pretty much the one major action we need to take now >> you sound relatively optimistic and calm. thank you for joining us >> thank you always good to hear from a central banker, especially in a currency crisis. now let's send it over to someone else, john ford. >> we're going to have the story

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dow's down 300 points. watching shares of constellation brands and canopy growth the home of corona beer introducing a new $4 million investment in canopy joining us, rob sands. thank you for calling in >> thanks, sara. >> not sure your shareholders are convinced of the vision. the shares are down 9% paying up pretty hefty premium, $4 billion for a big stake in the pot company extending the buy back how are you explaining it to them >> yeah, well, i have to say that, you know, number one, there's a lot of volatility in the market today so i think that's masking some things, but secondly, you know, we've probably anticipated a little turnover in terms of our investor base with today's announcement you know, this is the kind of

thing that is a bold move, it's a little hard to get your head around it's not the kind of thing that's easily, you know, dcf'd and therefore easy to understand what the value is there but i think what's most important is our investors get the strategy, which is really twofold. number one, we're creating a fourth leg in our business, which is the cannabis business and, number two, this is going to be a 200 billion plus dollar market by 2030 constellations through canopy taking a first mover advantage of that. we expect to take a pretty significant share of that $200 billion industry so as i said, we've got to keep the strategy in mind. >> yeah, walk us through what that looks like. are we talking about beer infused with pot what sort of product lay out the vision >> yeah, so, first of all, the vision is really to participate

in cannabis across all forms and across all channels so that would be legal, recreational as well as medicinal and then every form which would be not only drinkables or edibles but bud oil, so on, so forth that's really what we have decided to do by partnering with canopy and upping our investment in canopy and creating this $4 billion war chest that canopy has to go out and really win the market globally. as to beverages, they really could take a number of different forms. i mean, number one i think this mixing it with alcohol is probably not the vision so the products would be nonalcoholic but they might have as their base nonalcoholic beer or other various forms of traditionally

beverage alcohol products and then they could also be sparkling water or even totally new categories that, you know, don't necessarily relate to anything that's out there right now. so, you know, we're looking at and developing at least beverages across all of those different categories and as i said, canopy is working on the other forms and the other channels they're primarily a medicinal company at the moment. >> yeah. rob, morgan brennan here listening to you talk about these different products you would potentially be rolling out, given the fact that you are paying a 50% premium with this investment, what seems to be implied here is that you are betting the marijuana industry here in the u.s. is going to be legalized nationwide in the coming years why do you think that? >> well, first of all, it's not necessarily about the u.s. just in canada alone based on what we anticipate will happen,

that will justify economically the investment that we're making furthermore, there's 30 countries around the world right now that are on the verge of legalization of marijuana in some form and, you know, the ability to participate in that globally also almost in and of itself justifies the value that we're paying and then to your specific question, we do believe that decriminalization at the federal level is probably coming down the pike in the united states pretty quickly and let me just contrast that with federal legalization what we really believe will happen and is what's most likely to happen is that it will be declassified as a schedule 1 drug and the federal law will basically provide that it's a state's rights issue and that it'll be left to the states to

determine the legality and the regulation of the product and the states that's what we believe will happen there's three bills right now. yeah >> sorry apart from the decriminalization element, when would a first product come to market and 234 terms of the delivery mechanisms, we have vaping, topic calls, edibles where are beverages going to rank in that spectrum? >> well, that's an interesting question right now beverages rank relatively low, but that's largely because, you know, of the sort of infantile nature of the industry i think right now depending on where you're talking about they sort of in the 5% range. once the category develops and people want to consume cannabis in a more sophisticated manner, you know, beverages will take a larger share, but just let me be

clear, we made the investment in canopy to participate in cannabis globally and in every form and in every channel. so that's medicinally, that's vape, pills, oil, bud, et cetera so we're not restricting ourselves to beverages just because we're a beverage company now. >> rob sands, thanks for jumping on the cnbc news line and talking us through this big bet today. the ceo of constellation brands. >> thanks for having me. >> call it a bold bet. he says he wants to be a first mover. coming up onhe "closing bell," justin thomas and we're keeping a close eye on the selloff. it is deepening here the dow's down 320 watching from key levels "squawk alley" back in a minute.

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