Off losses, germanys confidence number a big miss, down eight straight months as the conflict takes a toll on that economy. We begin with the markets, futures flat as putin sends and aid convoy to eastern ukraine, and german Investor Confidence plunges. More than just price. New details on why amazon is taking on disney and what it means for amazons already paper thin margins. Telsa after a big day yesterday has a less than glowing review from Consumer Reports. Well tell you why. Stocks up hope to continue after the dow and s p have the best gain in four months. Concerns, though, about the ukraine crisis causing geing ge Investor Confidence to fall. Q2 profits for the Banking Industry rise to the second highest levels in 23 years, of course, thats not translating into stock gains. Kpw bank index down almost 1 year to date. Jim. Theres a lot to digest. I dont know if you want to start with the economy or banks here . Yeah. I mean, these numbers come out, say, okay, well, wait a second, looking at a german sentiment number. Why focus on that . The answer is that russia, ukraine, russia, ukraine. Repeat that, repeat that. That determines the same way that three cents hit russia. Three cents . I thought the stock was going to 118 on the Morgan Stanley upgrade. We begin to realize numbers are too high. You see the confidence, not as many orders put in, not as many cars bought, the world is slowing because of russia, ukraine, and germany was a locomotive, and you cant be as confident after you see they are not confident. Slowing, really . Russia, ukraine . Slowing . Yeah, i think so. Creeps in everywhere . Yes, it does. It creeps in the sentiment. The United States not going to creep into macys quarter or domestic walmart will not be impacted, but these International Companies begin to see a nice turn in europe, and they fired a lot of people, and you get sales up, and now maybe the sales come back down a little, and its just really says, this is not an earnings story, russia versus ukraine, but its going to hurt earnings. I just am trying to factor in, the Airline Stocks bounced in. Should they all bounce back . I dont know. Should the money go back into clorox and General Mills . Yes. Yes. Because those are the yield plays because rates are going lower because of this. You mentioned retail, and back to school. A lot of retail Analyst Coverage today. Yes, i love it too. Citi looks at back to school, says hard lines in general, cautious on Office Supply stores, for instance, but they like williamssonoma and best buy even. I dont know, my kid goes back to school, we buy a lot of stuff, but we dont go to williamssonoma. Thats a bedbath situation. Maybe castle a for 380, the iron pot, i mean, they are not necessarily a backtoschool play. Macys, the third analyst said they will be great. I wish i hope i dont to be unless its greater than great, it sells off. Limited brands, fossil, like sally beauty. Beauty. Yeah. Listen, whatever, they should like kate spade. They deliver a number thats just extraordinary their. That turns out to be the winner. Think about it. Coach, you know, the bleeding has stopped, kors, stopped liking kors, but kate spade delivers a hot number, the hand bag for the fall. We talk rates at 242 on the tenyear, and talked about Net Interest Margin at the big banks, how they benefit from a raising rate environment because you see more of that. Yes. This morning the general reporting on u. S. Bank profits nearing record levels, second highest in 23 years. Its the reserve way. It is. It is. Then you also do have a story, perhaps more important, about lending picking up. Right. As well. That should yet, we look at the banks, the bigger banks, performance not really there in terms of at least the stocks. You know, i have a piece i wrote this morning for realmoney. Com, and i said what were lacking is the old days when they dont do anything, and bbnt buys it. When you see a situation like one of these regional banks, sun trust, travel trust, language wishes, down from 41 to 36. Then they come in and buys them. We dont have european banks. They are not making acquisitions. Rbs is not going to sweep america, and everybody else, i mean, wells fargo, 30 theres no consolidation. No m a, no dividends. Saw it drove so much in the 90s as well. You have to rely on earnings now, many of the projections made a month ago are no longer valid because interest margins are not good. Lending should take over, but its what people want, good dividends, banks dont have them. Want earnings, earnings will be cut. They want mergers and acquisitions, but theres no m a. No m a . In banks. Theres m a galore. I mean did a memo i missed . Theres plenty of m a. Right. But just banks are not buying other banks. That is right. Right . That is largely off the table. But m a is unbelievable. Overall on earnings season, 8 of the quarter as it closes, second best quarter in three years. We did get the markets been okay. Yeah. Last couple days have been good. Look, i think theres plenty of reasons why wed be up. One day, if it comes over any of the News Services that merkel and putin sit down how to divide up the militarized zone, crimea, we rally 5 . The shorts that are hanging on here have to recognize theres a positive thing that come out of there, not a negative. Whats the convoy . Unmarked nonred cross convoy the humanitarian mission. I have to follow that and paper filled with how the air force cant do the job. The news is not like a great set of news. Right. You pick up the paper, and you dont feel, wow you dont feel uplifted about peace and prosperity returning to large parts of the world. But if something good happens, i think it could be a sigh of relief. Look, the German Economic Sentiment goes back up, and remember, our country, theres a lot of Domestic Companies doing well, just that theyre lost in the s p thats dragged down by big multinationals. Right. Interesting story from tesla today. Yeah. Consumer reports of the model s says things are mostly positive with the electric car they own, but the vehicle has, quote, more than its share of problems. At more than 12,000 miles, the soenlter screen went blank, eliminating access to every function of the car. Tesla had a statement that the problems are covered by warra y warranti warranties, the quote, they are constantly upgrading the model s, but the product manager says theres issues you dont expect from a 90,000 car. Yeah, and especially after that Deutsche Bank piece yesterday that says to the moon analysis. Which helped the stock at 5 most of the day. One of those, going over, just i thought they built 80,000 cars in 2017, but this report says 129,000. They used the magic 500,000 car figure. Well, this a lot depends on resale value, a lot of it on the durable vehicle itself. We have not had that much time to work with the s, so to speak, and now these reports. Going back to the 200,000 mile battery i mean, elan musk could buy Consumer Reports and shut it down, change the ratin ratings. He could. Whats funny, they made it a star giving it 99 out of a hundred, the best rating ever. The beginning of the giant short squeeze, Consumer Reports. Can they take it away . I dont know. Those of us who have driven it, you know, we are hotter than we were before we drove the tesla. I feel different about myself. Really . You have not bought one yet . I test drove it. I said, you know what . Theres kind of a i was going to mention this race driver tony stewart. That story, that video, should not have watched that video. That was a mistake. Told you not to watch it. No, dont. Told you not to, and i did it. Uncertain how that ends up. As more tesla and Consumer Reports, one thing to mention it does not appear to have a great impact on the stock prior to the trading, not like Deutsche Bank being excited about a hundred thousand cars. Such a heavily shorted stock, and the numbers they are talking about, i mean, has to believed that people like the tesla. The short story is theres too many being made and theyll cost too much and what do you do with the battery, and the objections kept being met and met and met. Its a hard short. Finally, this morning, you probably heard by now, millions of fans around the world mourn the death of Robin Williams at age 63. Known for work in television shows, to films, good will hunting found dead yesterday in his bay area home. The medical examiner now in the process of conducting an autopsy and a News Conference arranged for 11 a. M. Pacific today. His ability to do so many things. Theres great stats on the worldwide box office, 5 billion 5 billion around the world, and mrs. Doubtfire, one of his best fills, nearly half a million u. S. Domestic alone. I saw him live in improve in 1979. I had a bunch of comedy writers as friends at the time, than were jealous in all what you do, you yell out a word, and he would be that word and do something. Thought it was planned. There was just no way he could but one after the other, and you realized it was not planned, and you yelled things, and he you walked out said, okay, theres many people mozart, Robin Williams. Couldnt figure it out. So brilliant. In recent memory, the ipad ad he voiced over. Listen to this. Dont read and write poetry because its cute. We read and write poetry because we are members of the human race, and the human race is filled with passion. Medici medicine, law, business, engineering, these are knowable pursuits, needed to sustain life. Poetry. Beauty. Romance. Love. These are what we stay alive for. To quote from whitman, oh me, oh the millions of questions of these recur. Robin williams dead at 63 and will be missed. When we come back this morning, amazon in the cross hairs, dispute with disney reaching a new level, talking with the book authors taking aim at amazon in a full page ad. One more look at the premarket this morning, more squawk on the street from post nine in just a minute. Drivers want to go further with their electrical vehicles. But you cant take a trip from lisbon to stockholm if you cant recharge along the way. The green emotion project, funded by the European Commission is using the ibm cloud to make this possible by creating a single charging and Billing Network across 28 countries. So drivers can travel as far as they want to go. Take your business further with the ibm cloud. The ibm cloud is the cloud for business. But what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. Welcome back to squawk on the street, im Morgan Bren Nan with breaking news on Atlantic City, specifically the casino rebel, the 2. 4 megaresort built and in bankruptcy for the second time in two years. Official word from revel set to close no later than september 10th after no qualified bidders came forth in the auction to buy this casino. This will now mark the fourth casino set to close by september. That means Atlantic City has 25 less casinos going into fall than it started the year with. Well continue to bring you more information on revel as we get it, but, again, this casino, 2. 4 million has not got qualified bidders and will close by september 10th. Back to you. Quarter reduction in Atlantic City, not appear to be helping overall. And people want casinos in new york. Incredible. Write passing legislation in new york, and it seems theres a glut. Theres casinos everywhere. They are, like, everywhere. Theres too many. Igt sold itself oh, boy. There was no value steal. A couple of the deals. All no gross kind of frustration. The providers to them need to c consolidate. Amazon, price is not the only factor in the dispute. The wall street journal promotes theres Product Placement on the website as well as questions on who makes up the difference when amazon loses money to match price of competitors. Amazon stopped taking preorders for numerous disney movies including captain america the winter soldier, a, i believe, a box office success. Theres a need to differentiate between the typical disputes that take place between the enormous retailer and those who provided products and separate dispute over books. I mean, its not like walmart doesnt also argue with vevendo space and use power in a significant way. What a great thought. Absolutely right. We sit here, how do they get the caps . Pay more. You know, think about what happened with costco and steve jobsment went to jobs, we want your product. Jobs says you cannot sell less than anywhere else, just get out of our stories, were not taking your stupid apple cards, and then things calmed down. Do you think were too focused . Whats interesting is we would not be focused on the story at all were it not for the dispute with amazon thats got so much attention that we focused on on the recent documentary as well when you have authors like James Patterson coming out and making the point, as he did to me in the interview, some time ago, about the difference between selling toilet paper, for example, and books. I think books are important. Steven king thinks books are important, which is why all the people are speaking up now going, hey, amazon, please, this is not the toilet paper industry. This is these are books. Are your sales hurt as a result of this dispute . Sure, absolutely. They are right now, of course. Theres more to come . One would think they are not just attacking you got to believe that random house and simon and schoouser are next. We have to think about it. They are so powerful. Wow. Is it hurting amazon though in a broader sense . Having written books, you know, they are not not calling them the evil empire, not down that route, but just too they are so powerful, and amazon prime is so powerful, and the bookstores where you sell are not powerful at all, and thats the counterweight. Bleed over, though, into sentiment for the Customer Base that results in people think twice about the buy button . I dont think so. I think whats happened in the country the other day someone said to me, i said, we used to go to borders. Borders . Whats borders . I visited there first book, went to ann arbor to pitch borders to take my book. Without the effect of counterweight, not talking walmart and target selling books, you just dont have anybody you can say, listen, i got a better, more attractive way to buy a book. These are great writers, and they are terrific, and the publisher houses are great, but they dont have the horses. They dont have the horses. Knock down 20 this year. You seem upset. Im not, its just an interesting conversation. They have negative publicity. Its interesting to watch how theyll respond to that, viewed in a way they have not been previously. Because of the space. You wonder whether that impacts overall on sales. Not talking about buying books. The tiny i watch your documentary with my dad, and my dad and i, at the end just say, boy, i dont like those guys at all, and then later on, you get back support. I click on amazon, what do i do, go to five drugstores . Oh, that guy wiped out the paint ball guy, and those people in the white collar town, and my father is furious while im ordering on amazon. Right. Says it all. Youre a consumer. Well get jimsed mad dash in just a minute. So ally bank really has no hidden fees on savings accounts . Thats right. Its just that im worried about you know hidden things. Ok, whys that . No hidden fees, from the bank where no branches equals great rates. This is charlie. His long day of doing it himself starts with back pain. And a choice. Take 4 advil in a day or just 2 aleve for all day relief. Honey, you did it baby laughs tuesday, time for the mad dash, talking intercept, and not preseason football. Afulf analyst had a sell on these. Janet yellen. The fed staff. Horrible they came out with that one statement saying that these are overstretched. Small to mid size. Yeah. Theres a terrible disease, a nonalcoholic form of liver disease. It mimics or looks like what happens no fault of your own, not that alcohol is a disease, not saying mimics it. Right. They seem to have a cure for it, and fda has said yes to it. The primary results shouldnt say that, the results are good, better than we thought. The stock up a lot. What happens is people like exact sciences. They recognize, its a lottery. You have a bunch of these stock, and one of them pays off; and its why the stock market is vibrant because when you have a great drug that does do something special, you can have this kind of move, and i just applaud the people who keep developing these drugs. I have Charles River labs on tonight. They do experimentation, ebola, that kind of thing. Went up day after day until they ran out of the vaccine. Theres Companies Working on remarkable things, but they are tend not to be get a franchise, turns out like being aggressive. These are companies that are exactly what you should own and i think that janet yellen, the fed was misplaced. They dont understand that this that the big pharma is out of growth so they have to rely on this. A lot more to watch, opening bell coming up right after this. Zp the ca illac summer collection is here. During the cadillac summers best event, lease this 2014 ats for around 299 a month and make this the summer of style. When the world moves, futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with paper money to testdrive the market. All on thinkorswim from td ameritrade. Youre watching cnbcs squawk on the street live from the Financial Capital of the world. The opening bell ringing in under a minute. A lot of news to digest, one headline from germany, Investor Confidence index down for the eighth straight month amid the crisis in ukraine. The biggest month on month decline in three years looking at the current situation. Well get germany gdp later in the week, and people believe it will be negative again. I have to tell you, the Interest Rates do not lie, how are they so low . Watch as we get closer to the winner. Because then its about nat gas and the Chemical Companies are worried. If i were a major u. S. Chemical company, i would be calling all of these Foreign Companies that deal with basf and say, hey, we got it. If they run out, we got it. Bsf, a gigantic company. Absolutely. They dominate. Yes. More manufacturing capacity as a result of prices so much lower. It is so, so cheap. Holy cow. Opening bell, s p at the opening screen, big board today, market vectors atf, and China Asset Management Company celebrating the recent launch of the china etf. At the nasdaq, bank corp. Doing the honors. You mention ed twitter, jim, th 10 q, looking at ottobox, and believe its not 14 , but 11 and could be 8. 5 . Right, you have more people can see the ads than we thought, 9 89 versus 86 . Its now become the growth stock, the hypergrowth stock for the crowd that wants to play internet, and i think that, look, they make you a believer over and over again. And we didnt have it together initially. The cuings i dont know. How much did they say lets issue that in the cue. He does the cue. And as we pointed out at the time, very positive on the Conference Call after earnings. Oh, my. More so, perhaps, than some thought, and people believe. Typically, the drone. This guy was not this guy was a drone the way that you need drones in the air force. Taking out the bears. You know, and he was not a rogue drone, but he was on point. Speaking of taking out the bears, anf gets its second upgrade in a week. What is that about . Going to a buy. Jeffreys last week, of course, price target of 50, thinking merchandise turned, cost structure in place. What can i tell you . When you see those upgrades, think, all right, whats beginning on, guys . We have a lame duck ceo a bit, have good mall placement, the brand is good, downturn, but this one just smells too much like, well, you know what . Theres retail deals going on. Im not a big fan of the company. I recognize when you get multiple upgrades, thats not done idly. If they are listening to me in the control room, you know, dendreon, we talked about intercement and a number of times of success in biotechnology theres a longer term chart, five, ten years if we have it. This company went from bust to boom to back, warning of a potential default. One of the first had a come, you had a go, and you would use your own sells to help build the drug for prostate cancer. In other words yeah. Im forgetting the word. Specific to your own biology. People went this is one of the stocks that got bid up gigantically as people said there was something good, antiobesity drugs are like that, and reminds you, yeah, you have to hit it out of the park, and mankind, i thought it would be up more because of the partnership, but that stock came down. Theres some bioteches people cannot cotton up to, and dendreon one that i said something negative on. There is no shortage of risk in names like that. Good point. Without a doubt. The news there, wouldnt typically mention because the market cap is small at this point, but the stock is down 25 . Look at exact sciences. I came out positive on mad money about that, dont need a colonoscopy, just use a stool sample, and the false positives were, hey, get a real colonoscopy. They went ahead with it, but it was another one that looked horrible. I remember when it, you know, the ceo called me, let me come on, its not going to be rejected. Oh, give me come on, man, like egg all over my face. Well, the fda says, listen, it is a good way for people who dont get that colonoscopy, maybe we just stop colin cancer short in some places. Theres winners and losers in that game. Buffalo wild going to get action today. Morgan stanley ups to equal weight. They say comps are good because of tab let technology, mobile payments. They add, though, long term, their unit growth, penetrating twothirds of north america now. The international story, and i think that when i had sally smith on mad money recently, raise the forecast on how many could be done. They have a great franchise, had a mad money party on the rooftop of Buffalo Wild Wings on 47 th street. The company reinvents itself. I dont know. Its been a rocky ride since that bad quarter. This seems like a welltimed upgrade is the way i put it. I like it. Good company. Look, oils going to have trouble at the open. Yes. Chevron the degree on the dow. Exxon not far behind. Theres news reports of the Energy Information saying that theres too much oil, and a lot of the u. S. Oil companies are really kind of defeating themselves right now because theyre valued over. You need this to get exported, something alluded to yesterday moving baltic freight. Baltic freight is moved to some degree by indonesia gets back online shipping remember, disputes about indonesia, a tough country to deal with. What i like is we saw an upgrade on north american tanker yesterday. Thats been a tough long, but you have to be careful with the Energy Stocks here because we get the numbers tomorrow for supply in this country, and thats been driving things right back. Gasolines come down. Shares of kmi down about two and a quarter percent after the big run up yesterday. People looking at the deal, jim, and i hear this yesterday, and then it was written about today, is it a sign that the partnerships, that kinder sees something . First out of the box with that structure, tax advantages, of course, we know well. There is a belief that eventually so many of the tax advantage structures may come urn attack if and when congress ever really undertakes broad tax reform. Did he sense that coming . I thought it interesting he thought to use the kmi as the acquirer, not the kmp, the national requirement. This got to the rights, people were upset about, but i know enterprise product is terrific. They seem to be atlas, one of leon cooperman name going for it, and Energy Transfer to et kind, and im not going to bet against the structure. Enterprise a big winner. The mlp structure. The mlp structure, kmi, get a 2 dividend on kmi, you shouldnt be selling. People on mad money, i say the same thing, some stocks you have to put your account. You have to go to the account because its difficult. Yeah. With that, dows roughly flat today as it has been all yearlong. In fact, bob is on the floor today. Hey, bob. Chevron, one of the problems with brent and oil in general sitting near the lows of the day. Energy lost the leadership stat status, and thats weighing on the dow and on the major indexes in general. Germanys not helping. Europes not particularly helping. The german Investor Confidence index at the lowest levels in two years, so you see germanys slowly sitting near the lows today, down 3. 5 . And we are fairly come play sent, still. Gold, people keep watching gold, but its not doing much. Up a little bit today, but its not jumping in any particular big way. Theres brent down again today, near the lows of the day weighing, as i mentioned, on oil stocks. Whats interesting, a few of the base metals are better, nickel doing better, aluminum better, and a strange situation because i dont see copper particularly explo exploding. Its in the middle, but thats been noted to me several times in the last few days. Stocks, not a lot of earnings movers today. Kate spade, amazing, 30 comp store sales, and in the u. S. Kate spade north america better than that beating the top line and bottom line, boosting the guidance for the full year, that stocks firing on all cylinders. Caesars is a mess, a tough time all year, particularly in the last month, but its several companies. Las vegas is doing fair, not particularly great, but bottom line is sales are generally soft in the gaming industry, and this particular companys got a lot of debt. Remember, they are closing the show boat, which is in Atlantic City, thats probably going to close sometime in august. The guidance was poor. They swung to a loss right now. Right now, Dow Jones Industrial average on the flat side and keep an eye on oil stocks. Guys, back to you. All right, thanks very much, bob. We talk m a, of course, very often here in the last three to six months given the boom in acquisition activity, and with that boom, of course, comes boom in unsolicited bids. Recent events remind many people how difficult it is to pull off a hostile bid. Whether we call them hostile or unsolicited, you choose your terms, but they are bids from other companies for other companies when nay are not interested in being acquired. Foxs decision to fold up the tent and go home in the brief pursuit of time warner is yet another example of how hard hostiles are to do. Take a look at the recent deals, of course, thats been cancelled. Its not just fox. Destination maternity, smaller deal, and pfizer, unsolicited, not hostile under u. K. Law. It was unsolicited that failed. This one, we kind of caught up with day one and lost sight, they gave up during specialty, and remember charter failed in the attempts to acquire time warner cable. That leads to a deal still out there, the largest out there, and by the way, theres others that have been successful, abbv abbvieshire, come to fruition of a deal between the two. One out there, we focus on valiants pursuit, which continues. Yesterday, i spoke a little bit about it, and i reported separately on value act and the 1 billion position in fox. I had the opportunity to speak with those who run it, and he mentioned his belief that perhaps value act would benefit from stepping aside in the pursuit. This is not an insignificant comment from an insignificant shareholder, Third Largest shareholder of any shareholder most linked having a board seat as they have for quite sometime until recently with valiants incredible growth and strategy. When ubben comes out quoted as he was by another news service, and i tell you as well, you know what . Reestablishing confidence if they were to step aside showing they get back to business. Many people disagree including mike pierson, the ceo of vali t valiant. They need another deal as a key part of the strategy. Right. As for whether they succeed in the transaction, of course, back to the stock price sitting at 107 a share, pressured significantly over time, certainly after the guidance they gave from the last earnings report, a lot of questions also raised, continue to be raised by allergan, and a lot of ink spilled on this. 108, what do you do . The fact is that stock actually goes up every time, looks more likely theyll succeed and goes down less likely, many argue if they were to walk away, goes down a lot more. 8 in earnings power. What the well, also by the way, right . Trading at a low multiple. Yeah. A low multiple. The deal now on the stock price worth 162 a share, allergan trading below that, but well above 116 that many argue is the unaffected stock price. Where does that go . Careful, david really disputes that. I know because sense then they increased their guidance for far out, taken costs out of the business, no doubt. The valiant side argues thats the number. Time is the enemy of these things, and we have more time to go here. Yes, youre right. Whether its november or december, you know, jeff ubben may want them to bow out, but that does not appear to be the case, at least not now. Maybe we go to the special meeting, do we get the 25 to call the meeting . What occurs then at the meeting . Well see, price will be key question marks as we watch their lack, i would call it, lack of progress thus far in succeeding. Your Bank Contacts saying High Water Mark for the hostile. Possibly. Wow. In this sierenvironment, you see more of them. Cant forget as many point out, hostiles are extraordinarily difficult to pull off, and the population of those that fail is far larger than those that succeed. Right. Sometimes you see rumors like going going around that whole foods is a target. This is last week, big call option, and the guy they dont want to sell. I mean, you know, they are not going to sell. They dont want to sell. Give me a break. If you dont want to sell, its difficult. Not impossible, but in the case of fox, you lead with a stock deal, a stock deal, and by the way you dont issue voting stock, you hamper yourself. Theres so many ways if they dont want to sell, they cant succeed in defending itself. Pen kl foods i expect because they are willing to sell the hillshire brands, and theres birds eye, trying to make itself ogranic and natural, and duncan hines, a stretch for ogranic and natural, but you still use it. We were for sale once, if General Mills knocks on the door. Very different coming over the top, and or if they are independent. Yes. Lets get to Rick Santelli in the bond pits. Good morning. Five year gives us the best glimpse. This is the three year chart. The 160 level knocked on the door, the twomonth low, and its the most stubborn towards rallies. Lets look at a ten year, opening up to june, you see were hovering since june, but more important, this looks to be the eight session where we close between 241 and 249. That is very, very significant because theres a lot of issues out therings and theres a lot of questions as to whats making markets move, geopolitics, a number of issues, but whats certain is the pattern and type of trade seen in treasuries really has not changed. Now, if we look at whats going on in the third year, similar picture, comps back over a yeah, and comping back towards may of last year. If we look at boon yield, intraday chart shows 105. Remember, it was friday, the 8th, last week, we had the low yield and low yield close is 102, getting close to the 1 . Lets look at twoday of the dax. It fought back, but under pressure. Remember, on the 8th that they spent a lot of time under 9,000, but towards the enof the session rally, still have not had the close. That would be significant. Year to date, the dollaryen correlation broken. We dont see the lower dollar yen equate to the lower yields. Last chart, september of last year chart, euro versus the dollar, the comp to the dollar and also last time the dollar index was at the lofty levels against a broader wave of currencies. Carl, back to you. Rick, thank you so much, Rick Santelli. Breaking bad fans, stick around to see what we will talk about. Shark tank, opening comments about investing, what he says on squawk alley at 11 00 eastern a. M. Time. Well be right back. vo rush hour around here starts at 6 30 a. M. On the nose. But for me, it starts with the opening bell. And the rush i get, lasts way more than an hour. announcer at scottrade, we share your passion for trading. Thats why weve built powerful technology to alert you to your next opportunity. Because at scottrade, our passion is to power yours. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. Well, we have release date for better call saul, amc breaking bad spin off. They released a tease for the show. Lawyers, were like health insurance. You hope you never need it, but, man, oh, man, not having it . No. Just eight seconds long. Its scored a second season. They will do ten episodes for season one, and its all before saul meets walter white. Great comedy writer before he started. Listen, everyone knows in the profession he was the guy that had the best comic touch for, i dont know, bill does to it, and kurt is considered to be a great comedy figure, and i loved saul. A great character. Unbelievable. Turned down paul to work at his own firm. Well, amc, as a stock, i mean, the quarter was challenged because a lot of this content is getting a little expensive, right . Yeah. Look, sometimes terrorist worit. It could be a home run. Saul was a figure who was much loved. Had a vacuum cleaner ability to get rid of you. Man has a code. Man has to have a code. He had a code. Attorneyclient privilege was waived often. You know who said that . Omar little. The wire. Well, we got what . President obamas favorite character, omar little. Can we talk any quieter . I think everyone should watch the wire in school, in high school. Greatest show. Well get stock trading with jim in a minute, and squawk on the street continues in a moment. 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Home build advantage for away. I think this is a company that has done a remarkable job. This is basically the price line for rentals. You get to offer stuff, and its an exchange. Ive looked at it. I think its terrific. By the way, i have to tell you i think priceline after the Conference Call will be consolidating everybody, could do home away, could do yelp, kayak is separate, have a chinese well. Careful of betting against the companies, they seem to have high multiples. Theres a property to list, whether its for air bb vrbo, thats another one. What . Vrbo. Yes. I look for a good deal to rent, and i dont know why the stock shouldnt be down. Its a powerful recommendation, and i really like it. Whats on mad tonight . We have Charles River labs, and you see they develop an ebola vaccine, and they dial 1800lab rats, and thats the actual phone numberment cant make it up. No. Theres a company trinet, hedge funds and other firms deal with hr. They are a play on too much regulation. You think theres too much regulation in the world, go buy trinet, the ones who say, hey, listen, too much regulation in the world, well do it for you. Charles river will be interesting. I want to know about ebola. Especially because the supply is gone, sent everything over there. I get to tell you, people have a race to do the vaccines, need animals to test, and they got all different kinds of rats, which is what you start with. Jim, see you tonight. Thank you, guys. 6 00 p. M. Eastern time. Simon, whats next . We have the best selling author here on the fight between the book authors and amazon. Well talk fixing common currency with black rocks chief investment strategist, jeff rosenburg, and whats wrong with the consumer . You see it in retail and income figures. Focusing on that in the second hour of squawk on the street. A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com dad hes our broker. He helps looks after all our money. Kid do you pay him . Dad of course. Kid how much . Dad i dont know exactly. Kid what if youre not happy . Does he have to pay you back . Dad nope. Kid why not . Dad it doesnt work that way. Kid why not . Vo are you asking enough questions about the way your wealth is managed . Wealth management at Charles Schwab so i can reach ally bank 24 7, but there are24 7branches . Its just im a little reluctant to try new things. Whats wrong with trying new things . Feel that in your muscles . Yeah. I do. Try a new way to bank, where no branches equals great rates. Welcome back to squawk on the street, and we begin with banks, near record profit for the industry, but thats not translating into stock gains. Whats wrong with the banks . Plus, more than 900 authors write a letter to amazon asking the company to end the bitter publishing dispute. One of the authors will join us live here on post nine. Black rocks chief investment strategist for fixed income weighs in on the market and global turmoil. First, snl bank profits racing back to near record level, and the Kbw Bank Index down 1 year to date, so why are the bank stocks seeing more gains . The next guest says the year to date returns in banks is setting the stage for a much better second half of the year. David cats, chief Investment Officer with matrix asset advisers. David, good morning. Good morning. Staggered to read in the journal this morning bank profits for the Second Quarter or net income forward Second Quarter was 40 and a quarter billion dollars, almost the highest that weve had for 23 years. You wouldnt really see that from the headlines that you get on the sector. Thats exactly right. The banks in a very stealth manner doing quite well. To put this years performance in spertective, they were the best group last year, up over 30 or 35 . We think they take a breather. If the fundamentals are good, and they are, earnings come up nicely, consumer and commercial lending picks up, and the nonperforming assets are trending very, very well, and valuations are reasonable. This sets the stage for a good second half. We like the banks a lot here. Yeah, we should mention, of course, the release of some reserves that added to the golden view, if you like, but why do you think the banks so far have not been rewarded for that halfway through the year . Part is that they had such a robust year last year so they had a slow down at some point, and the other part is they continue to have a lot of negative headlines. Theres a regulatory concern in overhang, and in addition, the cost site of the bank is rising, and the Conference Calls highlighted the regulatory costs are going up. They had to boost their personnel to cover the new regulations, and thats put a negative bias into the stocks. Ultimately, however, if earnings are going up, if business is picking up, the stocks will go higher. David, before we get specifically to what people should buy, give us a guess on how far through the judicial the penalizing process we are with the banks now. Are we halfway through, three quarters of the way through . The biggest banks, well on the way through issue probably in the seventh or eighth inning. Smaller banks, we dont think liabilities will be as great so we think theres headlines, but economic realities are fully factored into the banks in terms of the reserves and capital ratios, but there are going to be new regulations, a moving target in terms of capital ratios, so the banks are not out of the woods in terms of regulatory overhang, however, the stocks are cheap enough and business good enough that we think thats ultimately winning out. Not to pile on necktives, but what about the economic realities of europe . During the dealt crisis, we saw the u. S. Banks, hardest hit. Obviously, were not there, or anything like that, but there is weakness, lowest level since 2012. If europe tilts closer to recession, doesnt that impact the big firms here in the u. S. . It would slow down big banks, no Significant Impact on the regional banks. We dont think europe goes back into recession, just slows the growth. Were comfortable with that, and the banks saturday off 5 , the market is driven focusing on earnings rather than headline risk in aggregate. Banks muddle through that. I want to mention that Rbc Capital Markets quote as saying one reason why the banks have not done better because return on equity is 10 , a key issue. What are your banks at the moment . To address that question, roes are lower, but the banks sell at a lower price to book value today than four or five years ago. A country like Morgan Stanley, not a bank, but a broker, sells at book value. We think it should be 1. 65 book value. Second question in terms of the bank we like are capitalone, bbnt, a regional bank, a nice pickup in earnings over the next six to 12 months and jpmorgan. David, good to see you. Thanks a lot. David katz. News on the labor market, Rick Santelli has news. Climbing to the highest level in terms of job openings since 2001. February 2001 to be exact. Last time, 4 million job openings waiting to be filled, increased 94,000, over 3 . We continue to monitor the labor market and will continue to monitor the intrainics of the number like separations and quits, but on the surface, a very strong number. Carl, back to you. Yeah, good news, we know that janet yellen pays attention to it as well. Rick santelli, good news on job openings. This chart, Consumer Staples and discretionaries down for the month. How do they impact the marks and economy as retailers are ready for the the all important back to School Season in focus with a slew of earnings this week. The chief Market Strategist at c converge group. Asking about the state of the consumer, seems like theres a different read say from a travel company or an auto maker on the state of the consumer than versus a restaurant or some of the big retailers like walmart. What is it . A great point. Seems to come down to what kind of consumer were talking about. At the mid to high end, consumers are doing fairly well. Auto sales robust, things that cost money, luxury goods are robu robust. The other end of the scale, however, things are challenging. You hear walmart talking about the payday cycle. You see lower end consumers struggling to make ends meet. Its a tail of two kinds of consumers were hearing. Is it a gap between the income levels, michael, your read on retail and other Consumer Companies . Well, without a doubt, that gap played out for a long time. As nick notes here. I think theres another thing that complicates the picture a little bit that we cant really tease out perfectly, which is what are we talking about being consumed . If its a matter of people consuming smart phones and media and taking out cheap loans for cars, things look relatively good. Think of it in shoppingtype stocks k i think its a little bit tougher. Those s p retail index, not consumer discretionary, but retail index did nothing for eight or nine monltds, gone sidewa sideways, broad retailers are in the participating well. Where i come down is the marngts is not building in Great Expectations for consumer comeback, and yet everyone seems to think that the labor market is tightening up, wage growth should pick up here, and so its hard to reconcile the idea that theres going to be more money in more pockets and yet, you know, consumer shoppingtype stocks will not participate. Is there secular change going on . Very possible. You see that with the deep discounts. Even good news from the likes of kate spade this morning, 55 growth in north american sales. Nick, pressure on margins because of discounts. Is that here to stay . Certainly retailers live with the discounting challenge. You need newness and freshness in whatever it is youre selling, or you have to discount price. I think its emblematic of a more competitive environment going back to school and then into the Christmas Season to make sure that your price points are right no matter who you serve. Its a cliche, but it is very, very true. Its more than that, though, isnt it . We dont probably highlight income inequality as we should on the network, as often as we should, but latest figures, the median Family Income in the country is 51,000 a year. Thats what it was 17 years ago. In fact, its 8 lower than the high that we had in 2007. If you look at the nbc poll, 76 of adults lack confidence their childrens generation will have a better life than they do. 49 think the u. S. Economys in recession. When janet yellen says this is a patchy recovery, for some people, its hellish. Thats true. The single factor for the last six months is cut in food stamp benefits in the Fourth Quarter of last year. It was 5 a month per person, but that impacted a whole range of basic food stuffs. In addition to that, the jackson hole meeting next week will be interesting because the topic of that is the labor markets, and since january yelps concerned about what recovery we have, expect to hear more on that topic next week. Looking forward to that. Michael to you, earnings from walmart, kohls, nordstrom, 8 profit growth, retail take from that . It looks okay to have been a pick up into the summer, you know, honestly, i dont know if retails going to be across the board any reason to have great faith based on this quarter that, in fact, we have some kind of a comeback. Again, its hard to get through all the kind of secular changes going on with Online Shopping habits and Everything Else to translate that into a call or walmart where they have too much Square Footage still out in the market, but i think Investor Expectations are pretty low in this area. Nobody came into this year saying, hey, im playing the Consumer Spending trade. They were all into the Capital Investment idea or various carry trades. I think that kind of the sober news is probably in the stock. That said, nobody, nobody plays back to school anymore. Theres a big question as to whether its even much of a season. Yeah, were going to talk to oliver chen about back to school picks later in the show, but thank you nick and michael. News from the jersey shore, Atlantic City announcing revel closes doors in september two years after it initially opened. Morgan has the details back at hq. Reporter thats right, confirmation this morning yet another Atlantic City casino is closing. Revel is shutting the doors on or before september 10th after no qualified bidders emerge the to buy the property in a bankruptcy auction. This is the 2. 4 billion that governor christy agreed to usher in, and, in fact, this casino received more than 260 million in tax incentives for construction in 2011, but since opening two years ago, its been in bankruptcy twice and its never turn a profit. Now, analysts say the biggest issues with revel is the Design Layout and casino on the third floor. Its a larger trend marking the fourth casino to close this year Atlantic Club closed, trump plaza shutting down next month, and show boat casino, next door to revel closed august 3 is 1st. Combined, atlantic comes into fall with 25 less ka see knows than they started the year with, and thats thanks to falling game revenue, down 45 from 2006 because states that supplied gamblers are competitors with casinos of their own. This is after they were downgraded to junk status last month and after Caesars Entertainment last night in the earnings cited Atlantic City as a reason for its wider quarterly losses. As for revel, management will try to find a buyer, but, quote, no assurance to the outcome of the pending bankruptcy. Back to you. Thank you. Authors take on amazon saying the companys bitter dispute hurts writers and readers. Talk to an author after the break when squawk on the street comes back. [ male announcer ] ours was the first modern airliner, revolutionary by every standard. And that became our passion. To always build something better, airplanes that fly cleaner and farther on less fuel. That redefine comfort and connect the world like never before. After all, you cant turn dreams into airplanes unless your passion for innovation is nonstop. Welcome back, shares of Buffalo Wild Wings moves higher after upgraded to an equal weight from an underweight rating braced on strong traffic trends and valuations fall ollo a pull back in the stock, up by a percent, carl, in todays trade. Back to you. Thank you very much. Looks like the heated dispult between amazon and the publisher is not dying down soon. This weekend over 900 authors signed an open letter to protest the Online Retail giants tactics in the battle. Joining us here at post nine this morning is an author, best selling of girl talk, carol weston. Youre speaking out. Why . Why . Because amazon, we like them, they deliver fast books, deliver cheap books, and we, readers, and writers like that. The problem is they make books so darn cheap, sounds good, but they are hurting Publishing Companies and authors and mom and pop bookstores, not something that any readermen mw. Bookstores are important to make a community vibrant. We want to browse for books and have a cat come by your knee, you know, see what books you want rather than going to a big internet and knowing that you want this one book. You want to get find books along the way to the books. Whats the solution other than them giving in . Whats a compromise . What would a compromise look like . I think a compromise okay, im an advise columnist, tough to play fair sometimes, and amazon needs to realize that with this, its not fair to target authors. Some of them, steven colbert, a lot of money, but what if your cousin had a debut book, so exciting, and youre going to be a good cousin to preorder and tell friends to do that. Well, on amazon, you cant preorder a book even if shes nothing to do with the dispute much as i have nothing to do with the dispute. Im not a business person, and i dont know the tactics that should be recommended, but i dont think amazon should be targeting innocent authors by making it impossible to preorder, delaying delivery, and ridding of discounts. You cant get the discount and get it tomorrow. Buy for 8. 99 on apple, because i did. Is that the appropriate price for a digital book . I think not. We have to understand we readers and we literary people and members of the American Culture that cheap is not better. You dont want a cheap pie lore or surgeon or cheaper purse. With books, it costs money. Yes, ebooks doepts cost as much money as paper books, my personal favorite because you dont pay for shipping and paper. As somebody who wrote 13 books, gratesful we had publishers. They help me be a better writer. Wow, this is good, but dragged on page 18 to 25, and you forgot about that. Im grateful to editors. The question i asked you, do you think the people that read books in the country care . If they do care, you can motivate them, take them to a different website, i mean, you could ask them to vote with their cash and feet if they care. I think that we need to remind them to care. I think that they dont think they care because they think i love cheap books to be delivered tomorrow, but if we say what would happen if your beautiful bookstore goes away well, thats already happened, though. So many so many have gone away. Amazon controls the book market in this country. Thats why were having the conversation. Exactly why were having the conversation and reminding readers they absolutely carement amazon wants to publish books, rarts go, thats great. I was turned down by publishers, but amazon will publish it. They will not help you make it be a good book or design a cover for you or get it available and market it. We want publishers i promise you, we want publishers, we want the ma and pa bookstores and barnes noble. Who do you think wins, though, given opinions aside, look how powerful a force amazon has become in ecommerce and publishing. Its funny, i guess i dont usually hang out at the stock exchain so i dont think in terms of win or lose or good or ev evil. I think theres room for everybody. The audio books and books digitally right away, but we definitely want to encourage writers to write. We there are writers out there, win or take all industry, a lot of people make a lot of money, please just publish me, give me a tiny bit of money, but we, i dont want to predict the future because that would be way too soad if i think amazon wins and books no longer cure rated by editors and distributed to those who want them. You worry that amazons going to come after you . They can get flnasty. I hope they do not come after me, amazon. I did sign the letter. Did you start at the zs, and the producer says one starts at z and the other at a. The authors some say, leave me alone. Ir im not fighting amazon. I buy some books from them. Im sad ivy died. Dealing with that since you got mail. Dealing with powerful market forces. Come back as this evolves. Thank you very much. My pleasure. Carol weston here on post nine. Teslas luxury sedan developed annoying quirks and problems. We are in chicago with more. Good morning, phil. Reporter good morning. Heres the review from Consumer Reports 689 read it because what they did is they bought a model s last year, and over the last year, they put on 15,000 miles, and now theyve decided, realm, lets tell people what we saw over 15,000 miles. Generally speaking, they praised the model s, however, as you mentioned, theres quirks and question the reliability of the model s. They say that over the last year, it develops some minor problems, many minor problems. Car nut or not, fan or not, everyone raved about the car. Impressed with the smoothness, effortless glide, and simplicity. In that time, its displayed quirks, some unique to tesla, a problem with the automatic handles that did not emerge so we could open the door. They mention that it had all of these issues fixed immediately by tesla. The warranty covered all issues. We reached out to get response to this review from Consumer Reports, tesla said it considers service a top priority. We error on the side to be proactive to ensure the best driving experience possible, and we address potential issues, even if they appear to be minor or low likelihood of causing future problems. Look at the share, which yesterday, closed at at alltime high, under 260 a share. This review gets attention, but hard to tell whether or not people say, yeah, we got problems with tesla. Overall, they are positive about the model s. However, they point out theres reliability issues that will need to be addressed. Yeah, i was going to ask you, does any of this actually matter on teslas trajectory to the moon . My guess is probably not. Probably not. I mean, look at what Deutsche Bank wrote yesterday and where the production levels are headed, youll see bulls push it higher. Thank you very much for that. Coming up, black rooks chief n investment strategist joining us on junk bonds and global turmoil weighing on investors. Were back after a quick break. What can your fidelity greenline do for you . Just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. So you can invest in the life that you want today. Tap into the full power of your fidelity greenline. Call or come in today for a free oneonone review. So ally bank really has no hidden fethats right. Accounts . Its just that im worried about you know hidden things. Ok, whys that . No hidden fees, from the bank where no branches equals great rates. 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Dont start humira if you have an infection. If youre still just managing your symptoms, ask your gastroenterologist about humira. With humira, remission is possible. She woke up, and, like, was that you . I didnt have the heart to tell her. She woke herself up. Yes. Thats the role for which he won an oscar, in hollywood, and millions of fans around the world mourn the death of rob win williams, known for the work in television shows, films like goodwill hunting, found dead yesterday in his bay area home. The medical examiner in the process of conducting an autopsy and News Conference scheduled for today. A lot of memorials sprung up across the country for williams. Fans left candles and flowers at the star on the hollywood walk of fame, and people in San Francisco gathering at the home made famous in the film mrs. Doubtfire taking pictures, and the bench that williams and matt damon made famous in the boston public garden is an impromptu memorial, fans left flowers and wrote quotes from the movies on the ground. New york times as a beautiful remembrance of him on page one, and billy crystal, of all the tweets, he just wrote, no words, having to got to know him well. Reliving through the moments, so many different hits. Your favorite Robin Williams movie . Good will hunting was good, and he was not a comedian. Down generational lines, and im old enough for the experience. I cant get over the fact he was tortured with such success and talent that its just unbelievable. Can happen to anyone. Squawk on the street will be right back. Dsl myth 1. It can help your business save money. False. The truth is when you compare our Fastest Internet to the fastest dsl from the phone company, comcast business gives you more for your money. Why pay more for less . Call today for a low price on speeds up to 150mbps. And find out more about our twoyear price guarantee. Comcast business. Built for business. Alerting you to what may become a market moving event. Russia media reports a massive aid cop voi of 280 trucks left a town west of moscow carrying 2,000 pounds of medicine and food, sending it 600 miles to russianbacked rebels in ukraine where government closes are closing upon them. The fear this could become a trojan horse move to create pretext for Russian Military action to secure its safe passa passage. Youll remember the nato general warned yesterday they amassed 45,000 troops on the border with what they call a high probability of intervention. Russia says the almost two mile long convoy is part of the agreed International Joint humanitarian effort, kiev says its not certified by the International Committee of the red cross. Thats one that we are watching, not actually europe, though, extended losses earlier, but not fallen out of bed on that news. Jer ma data, obviously, the ripple effect. The survey of professional investors plunging last month, it is said, because of whats happening with ukraine. On top of production and factory orders, i mean, the european economy is definitely much more exposed. Youre worried about it. I am. Its not just the banks. That has ripple effects, europe, e. U. , the biggest economy. Still, even now . Yes. Okay. Back to School Shopping season in full swing, so which Retail Stocks should you bet on as kids head back to school . Answers when squawk on the street continues. What if there was a credit card where the reward was that new car smell and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. 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Thanks, carl. Its a good read. In general, not gang busters in your view, right . We are cautious, you can be tardy for the party of back to school, and i like cash flow, its fashionable, we recommend ma macys and fossil and sally beauty as an idea. Sally beauty . Whats that have to do with back to school . We are cautious. We like professional hair care, the idea that theres demand, and we like the pricing leverage that hair care has as it is a replenishment business. Office supply stores . Back for notebooks, thats not going to play into staples or anything like that . I gravitate to names like ma macys, the less risk at macys 7 repurchase yield, 2 dividend yield. Thats the name to think about with less fashion risk. Like, obviously, the high end, williamssonoma, pottery barn, all that worked lately. What i say generally is consumers shifted from discretionary and adorables. They buy durables, investing in their homes, and we like tiffany and company, a Good Management story there as well as product innovation. How much of the pie of back to school sales now comes from online . Well, online is tracking great. Its growing, like, 20 to 40 , 17 of mix. We think over time, three to five years, goes up to 20 to 30 . Maam traffic is declining at 4 to 5. Explain the concept of back to school to me. Im a foreigner. Is this about kids wanting to stock up on fashion going back to school . On the one hand, youre suggesting hair Care Products and williams sonoma, and guests say back to school is not a phenomena anymore. Its not what it used to be. Explain it to me. Its changing so much. Kids buy closer to need. Whats happening is youre trying to find out whats cool when youre in school and then go to the mall. Its an american phenomena. We buy jeans, hottest pair of jeans, hottest tops, hottest dresses. To go back to school . Exactly, exactly. Okay. For me, back to school is trapper keeper. Theres some of that. We had some of your rivals or colleagues on the street try to time some trendiness in kids, upgrades in abercrombie, is that smart . They have a better denim bar right now. The denim presentation is good, and hollister offers denim at 25, first time this low this early. They are being aggressive. Neutral on abercrombie, valuation is fair, but the merchandise looks better and more exciting. What about discounts . Yes, forever 21, great denim at 9. Do you have the same taste as these young men and women . Is it can you when you say its a great buy, for you or them . I try to mix and match. Hes a fashionable analyst. A macro question. Theres income numbers suggest retail sales could get better here going into q4, do you think thats true . We are cautious. Theres great numbers in the holiday season, and it did not pan out. Im watching and being selective and cautious, trying to give you under the radar kind of picks for back to school, which are a little untraditional, sally beauty being one of them. Right, right. Cant bet the farm given how tentive the recoverys been so far. Great stuff. Sure, thank you. Coming up, shark tank joins us live, what they think about the new problems with the luxury sedan. Well be right back. Developers are all about speeds and feeds. Its all about latency. Its all about how fast does it run. I often sit with enterprises who ask me about how Mission Critical and hows the performance of the cloud. And i tell them, if you can make gamers happy, you can make anybody happy. Speed is made with the ibm cloud. The ibm cloud is the cloud for business. In a we believe outshining the competition tomorrow quires challenging your Business Inside and out today. 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So why wouldnt i choose the fastest wifi . I would. Switch to comcast Business Internet and get the fastest wifi included. Comcast business. Built for business. Lets send it over to Rick Santelli for the Santelli Exchange this morning. Good morning, rick. Good morning, karl. Thank you for taking the time, peter. Good morning. Listen, when i looked at your comments regarding Stanley Fisher on the same page as janet yellen thinking the low Labor Force Participation rates going to reverse and those issues are cyclical, i have a hard time agreeing with him, and i also wonder how long is the time line before they admit its structural . Your thoughts . Multiple years into the expansion and labor force expansion rate at the lowest level since 1978. For them to continue to think all the sudden people come back with no change in fiscal policy, no change in social spending policy, its very unlikely. As we saw in todays job openings, the demand for labor continues to improve. It just supply is not meeting the demand so you get a continued drop in the unemployment rate, and labor market tighter than the fed thinks so yellen and fisher, i think, are falling way behind the eight ball in terms of the reality of the data and reality of the behavior of the people that are on the sidelines. You know, its surprising me that Stanley Fisher is on the page. Do you think its because yellen is the head of the fed and wants to share the same strategy, do you think behind closed doors he thinks it is cyclical employment problem . Your thought . I think fischermen menwants believe in yellen and reduce policy. Thats what this comes down to. The Federal Reserve, by nature, with the policy slashes rates to nothing and drags their feet in raising because they are deathly afraid of killing any recovery even though i think thats a mistake. Dangerous strategy huge mistake. The biggest, most powerful central bank in the world that control close to 4. 5 trillion of assets, and they are avoiding kind of kicking the tires on every possible scenario. Isnt that what a Good Organization that is supposed to do especially when they are at the top of the pyramid . They the mistake in the mid2000s was keeping rates too low for too long, and Federal Reservers are repeating that same mistake. I guarantee the same problems then will be the same problems we have Going Forward in terms of masking this in the reduction of accommodation. All right. Switching gears. We learned the Confidence Index dropped down surprisingly to a level we have not seen in a while. Listen, in my opinion, we say geopolitics is what the survey was bumped down by, but in the end, isnt the German Economy and european economy at large vulnerable to such shocks . If it was a natural phenomena, until natural gas is offer, shouldnt it be doing better . If the economy contracted and back in recession, contracted 11 of the last 12 quarters, quarter over quarter. They are vulnerable to the slightest outside shocks because they are not liberalizing their economy to the extent that they should be. Particularly with the labor market. Peter, thank you for taking the time again today, and well continue continue to monitor the Federal Reserve to see if they start maybe considering a raft of alternatives to the current policy. Carl, back to you. Yep, thanks, rick. Love a good conversation. Meantime, watching the major indexes here, three major averages all lower, just pairly. Joining us now to talk about everything from investing in treasuries to stocks to the junk bond selloff, jeff rosenberg, chief strategist for income. Junk bonds, 7 billion exodus, record amount. Is the bubble bursting . Im sorry, just missed the last part, what was the question again . Whether that bubble, if it is, indeed, a bubble, is bursting . No. I think what were seeing here is a shift off of what was some very complacent pricing, not just in high yield bonds, but really throughout the financial markets. You had, obviously, all the things you talked about, the earlier exchange about shifts in monetary policy, geopolitical risk, but little risk cushion was anywhere in financial markets, and high yield bonds was imblah memblematic of that tight yields. What you saw over the last couple weeks was retracement and repricing to reflect the heightened degree of risk in the markets. Lets talk about treasuries because whoever i talk to, its really hard to get a straight answer, or at least a consistent answer about why yields are so low and why treasury prices continue to gain no matter what the mood is in the equity market. Geopolitical concerns, growth concerns, u. S. Concerns, what is it . What is driving this bid for u. S. Government debt . You know, it is obviously a question i get a lot as chief fixed income strategist at black rock. People ask, you know, what is the outlook for the 10year . Why is it so low . As you talked about. Theres a lot reasons is that treasuries and longer duration assets this year, the best performing asset class in fixed income is really a hedge to equity risks, in the portfolio. Whether thats equities directly or in emerging Market Equities or credit risks, one thats yauch set the risk in portfolios having longer duration. Last year most shed the longer duration exposure and a lot is coming back into the portfolio to offset and get back into the portfol portfolios. One reason. The other, the geopolitical risk a severe risk of a growth slowdown in germany, holding up europe, while the periphery is weak, take the entirety of the eurozone, weaker, youre going to have lower eurozone yields and in a lower yield environment with even more accomodation necessary by the ecb, it makes relative yields of u. S. Treasuries more attractive. Those two reasons and others in the short term flight to equality in the u. S. Account for a lot of way youve seen such low yeeields in the u. S. Shouldnt it be simpler than that . The yield moves in the other direction. All are rising including treasuries because of what the central bank is doing and the cash generated every day from people saving has to go somewhere. It may not signal anything at all but a winning trade. The price continues to appreciate . You know, simon, i have to apologize. I only heard a tiny bit of that. I think i heard something, having problems a little with the earpiece here today, i think you said something about where the cash is going. Not exactly what you said but i will say in terms of the allocation and where assets are going, you know, the risk off environment benefits the outlook for treasury holdings. Not sure if that was your question. Its carl. Hope you can hear me as well. A lot of historical work on the relationship between european yields and u. S. Yields, and is there room for domestic yields to rise even if european yields stay low . Again sorry. The ear is getting even worse as we go along here. So i didnt quite here that. Well let you fix it, jeff, but want to have you back on. Obviously, the treasury moves are a huge part of the market story now and the psychology always valuable to get your thoughts. Coming up, a tesla shareholder reacting to the Consumer Report news. How big a deal that is, thats coming up on squawk alley. The robots are coming to a hotel near you. Starward hotels rolling out robots to live e deliver all your launching needs. So they say. Josh lipton has a peek inside. Im looking forward to this, josh. Reporter simon, listen, from factory floors to driverless car, the idea of robots taking over human tasks is nothing new. In fact, there was a study by the university of oxford that said nearly 50 of u. S. Jobs are at risk of being replaced by computerization, but here where im at this morning, aloft hotels arent looking to replace employees but assist them with the hem of this guy. The very first bottleler. Sending items up to guest rooms when recollequested, so the stan be more attentive to guests. Much more efficiency and allows our talent members to do what theyre here for which is to serve our guests. Reporter now, the robot itself is designed by starup savioak, received funding by the likes of google ventures, but eastern the companys ceo believes robots can only do so much. Robots can do simple things pretty well and reliable over and over, but not all the things a person can do. They cant replace people but can be a productivity tool. Reporter now, this is just a Pilot Program here, but the Company Tells me if its successful, they could actually roll out these it robots to 100 properties, both here and around the world, which does remind me, simon, i am feeling kind of thirsty this morning. So alow, my friend what do you have for me this morning . Nice. Thank you, sir. Appreciate it. Guys, back to you. Looks a little like a paper shreader. How much does it cost . Reporter actually you know, no word here, simon on cost, but the idea is, more generally, as sensor costs come down, only cost a few thousand dollars i. Wouldnt hold my breath on a rollout to 100 hotels. I cant imagine how many owners, people who actually own the hotels, a, putting them in corridors and dealing with the liability of those flying around late at night. Bad enough as things stand for your average hotel. Hospitality. You want the Human Interaction and service. Josh lipton, an interesting story. Youre nort buying it . The travel and leisure beat reporter. Looking at markets here, simon, we are seeing the dow declining. Just barely. Down about 16 points. S p 500 down fractionally. The nasdaq also lower. Coming off of the best twoday gain for stocks on the s p and the dow, in about four months. Looks like well break that streak, though a lot of market moving headlines and ar cashin sending a knows saying thin volumes. Could be the thinnest trade dag of the year. Its the middle of august. Happy holiday. Happy vacation. On vacation the last week. Carl, enjoy the alley. Good morning tux is 8 00 a. M. In tesla headquarters in california, and 11 00 a. M. Here and squawk alley is live. Good tuesday morning. Welcome to squawk alley. Joining us, kevin oleary, chairman of oleary funds from shark tank. Good to see you. And Kayla Tausche and jon fortt got to see you. Consumer reports gave a great review to the tesla model s last year says the car has more than its share of problems. Apparently the door handle doesnt always work. Problems with the trunk latch, and at one point the Center Screen went blank eliminating just about every function of the car. Tesla did fix the issues under warranty and the car still has an average reliability rating. A long way from the top car on the market review Consumer Reports gave it last year making the model a standout in the luxury end . S. Yeah. And phil lebeau, the expert, says he doesnt think its a big deal for them. As a consumer, though, the Consumer Reports gold seal of approval made me want this car