The First Time Since 20126789 we dwin with markets marching higher, dow back in the green for the year despite headlines in europe. Retail america falters, walmart cuts, and the weak consumer is a concern for sales 37. Another year, another restructuring. Cisco cuts 16,000 jobs, 18,000 in the last two years, oh, and earnings beat as well. Stocks looking to post additional gains, one day after the rally in biotech stocks overshadows disappointing retail news. The nasdaq rose to the best day in nearly a month, and dow back in the green for the year, but germanys largest economy posting a. 2 contraction in the Second Quarter, results before the impact of the stiffer sanctions against russia, gdp flat, but germanys 28 of the eurozone, and thats going to hurt. Joining italy and france as the big three economies doing a whole lot of nothing. Theres a lot of dispute how much weakness the central bank, which i dont have weak cost, but how much is government policy, might be government policy is bad, but i dont think it is. How much is russia ukraine, and if youre a business there, this is like a war you are trying to hold off in mexico. Its right on the border. You have trade ties with mexico, and you try to figure out what the heck is going on. Theres a lot of uncertainty there, and i have to tell you every day that this russianukraine situation is not off the front pages there, thats another day people dont create business, that business slows down because russia is a much bigger partner for them than us. They are of course behind us in the recovery. We talked over the last five years about the unwillingness for some time of the banks to take the markdowns they needed to to open up the additional Balance Sheet capacity to actually start to make new loans. Theres a junk bond market thats come up because the banks pulled back so much in some ways in europe. Theres no doubt about that and draghi has to keep pumping money in. That 1 , thats startling. It is. If youre a major Chemical Company or youre a major Machinery Company in germany thinking, okay, got the call from merkel saying, okay, this is not like world war ii, were going to sacrifice you. Were not going to let business interests they were heavily involved in the rise of the third reick, and these guys live in that era. Its strange because thats a long time ago, but they live in the era saying, business, youre not in charge, we are. Were going to stop you. That means youre not going to see the big German Companies do well. Putin this morning will do all they can to stop the conflict. Russia should not isolate itself from the world. Russian stocks up five days, trying to make nice. Does it count . Always hard to get your arms around that, an agent, a bad actor, obviously, when you cut back, last group of sanctions, frankly, amazing to me. Cut back all the stuff people like front page of usa today food costs up 20 to 40 in russia. We have to go back to the gloom days, the bread line. That move was not smart to me. Play with whats in the trucks, whats not in the trucks. Do we want this on our agenda . If your ppg or honeywell, youre looking at it, okay, if youre air bus, youre looking at it. Front and center. What do i make of the world now where europe is maybe not contracting, but not growing quickly, and japan was down 6. 8 , and they increased sales tax, pushed down consumption, and china, you got lending numbers that were far below what people were looking for. No expansion. Maybe 4 gdp now here on the second half, but i dont know, 2 , i dont know what well be before the year. What does that lead me to do . Well, take a look at stocks, case by case, kohls reports a number thats not horrendous, so it does not go down, all right . Not who ren does. Its called not whorrendous. People buy it, stagnant for a long time. Perigo makes this quarter. Go back. Look at General Mills and kello kellogg. They are challenged. Buy stocks that have yield because its obvious people reach for yield when you pay to get two to three on the tenure, and you go case by case. I mean, you try to look at situations where the guidance is so low its beaten. The dividends are good, and youre surprised that its not falling apart, and you buy it. Right. Im sorry. Thats what the final thought for me on this is, you know, we can talk weather hurt us in the u. S. Yes. In the First Quarter. This is not about weather, europe. Europe has real just russia, absolutely, ukraine hurt it recently, but this is more than that. Our rates went down with service charges, and the inkling that ewe cron was from trouble. Rates did not go down until the smart buyers of bonds over in europe saw what was happening with ukraine. Now, you can say ukraine shouldnt be as important as it is. I think they 1 different memories over there. I think they look at the cities. They look at they look at the i citi, and changed hands five times from 1942 to 43, and think, oh, my. This is how they think. Business is slowing, this is the Worldwide Growth story that is slowing, and its worry sm. If youre an international company, its not worrisome. It goes up because were the best. Theres money everywhere. Right . Theres money everywhere. So it is just about cheap money then . I mean well, its cheap money where theres security. I mean, you know, and, plus, dont forget, we dont talk whats going on with Affordable Health care in the country. Thats i said, you know, deductibles going up, that was a statement of fact from the guy, two companies that handled the most medical placement most Health Maintenance repolice stationment numbers. Thats what they give me. On twitter, im attacked because im political. Just, like i saw a storm of people agreeing saying this went up and that went up. Im just going to the people who the National People who look on Health Care Plans for people saying, look, health care went up, that cuts hiring here. Its not a judgment. Well, thats affecting a bunch of things, incoming walmart. U. S. Comps flat for q2, and they said they expect more of the same for the current quarter. Wall mat lowered full year guidance due to higher Employee Health care costs and increased investment in the ecommerce business. Ecommerce was up 24, but it is the sixth quarter, jim, of flat or negative u. S. Comps. Yeah, i mean, makes macys look good. Went over the Conference Call yesterday, not as bad as what people thought. Three guys pushed hard going into the quarter. I mean, walmart is look, if walmart had a better yield, gets in the fall 26 is not bad you need three to compete . Yes. Even with the 10year down . The presentation, bucheef, b talking about those who grew by 5 or more, thats it, and so, i mean, if walmart were to raise dividend, you get the cisco effect. Well go over cisco, but the most salient factor with cisco is the yield. Commitment to the dividend, buyback, and anybody who thinks they are not buying back stock, look at the numbers, buying back a huge amount. Talking cisco. Macys going back, a hundred million shares less. Maintaining its forecast for earnings per share in the face of decline with sales. Buy backs and dividends. Walmart, Charitable Trust dumped costco. Yeah, it did. Tweets this morning about the nature of the supercenter when its so easy to order from home. Why drive to a huge, often dirty, store to find what you need on the shelf . We fought back and forth. We think cisco is the finest retailer, but amazon, its just decided to wreck everybodys margins, and as long as their stock is not hit, it just even the best of the best, which is costco, its a very tough stock to own. Thats a big statement on staples brick and mortar. We just decided this amazon factor amazon, yesterday was like the payments thing, and i threw hands up, said, you cant go against these guys. Listen, walmarts traffic fell 1. 1 , traffic. Amazon, amazon. Ticket up 1. 1, so thats how they got flat. Average amount spent is up, but people visiting stores is down. Not a great combo. Walmart, costco, and amazon, okay, these three documentaries set the pace. Costco was the greats place to shop, treasure hunt, walmart the cheapest, amazon comes along, and as i said, its the god father. They determined the price set. These are the three that describe the retail universe, and last one said, no ones allowed to make money other than us, and well make it your well, they are in the year 2525, amazon they dont we have to spend heavily. The only thing but we got on them is china welcomed them, and theyll destroy the chinese structure. See what they say about that. Not being fe seeshfacetious, its the toughest decision made. We didnt want to give the gain back. What is amazon capable what will we wake up tomorrow to usa today and see what amazon did next. Quick, kiss koe cut 8 of the work force for restructuring, citing uncertainty in Global Demands, sales sluggish, fiscal results beat forecast, but dow says its flat to 1 Revenue Growth for the quarter. Emerging markets, weak, and possibly could get worse. What was interesting was that it was brickum the i was i indonesia. India, theres hope for, but the mexico, very bad. I thought it interesting the Service Providers, looks like they talk about the merge earns how the most mergers in the shortest period of time in media crimped the possible business. Everyones freezing, Service Providers not good. Ill Say Something no one mewan to hear. I like the quarter. I like the quarter, despite huge head winds, they still committed to the europe is good. Commercial is good in europe, enterprise is good. Emerging markets is a slow down, tough for everybody, but i thought the 11. 1 cash flow, they are giving it all they got, scot. All she got, okay . Wouldnt you rather own net app . We saw. That everyone likes them all the sudd sudden. Cisco up 12 for the year. That yield is very good, and, look, do you want revenue better than flat up . Yeah, but chambers was conservative, would not extrapolate improved performance into a more aggressive assumption for what is likely to happen in the future. That, again, under promising, which is good. I Just Department mind the quarter. Can the stock go up big . No. Its preserving the game. Thats what sometimes you shoot for that when the stock is up 11 . There, i said it. Believe me, theres times im not positive about cisco, and its not just about the new milk commercial. I like it. Very much so. Thank you. When we come back, tesla shares at an alltime high, and how is musk pulling off a string of successes . Explore whats behind his magic touch coming up, but first one, two, three microsoft in the big names in business accepted the ice bucket challenge, and which others are taking it on including some we challenged ourself. Look at the premarket, the dow almost exactly 35 lly 500 point the alltime high. More squawk on the street in just a minute. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. All right. Here we go. That was really cold. Yes, it is. Facebooks ceo accepting the ice bucket challenge for als bringing awareness to the nation about fighting the disease. The Als Association says since july 29th, donations kwin tippled. They took on the challenge yesterday after being urged by scott. I accept the challenge to stomp out als. Costolo said he would do it if yours truly took on the challenge. We did that yesterday. Also very cold. I accept the challenge. Oh, i brought a spare set of clothes today, and now we put the challenge to tmobile john ledger, spencer rascoff. Well have their responses later. You brought clothes to work . Yeah, rascoff and costolo challenged me. Youre in. Frankly, i never liked it, paid money for this, but it doesnt fit well. Youll go with the suit . Why the heck . Why not . I hate the suit. Im going to give money, which i think is important. Thats the point, right . Yes, but i think thats important. Im going to challenge our viewers over the weekend to give money because i dont want to, you know, i mean, likest theres a reverberation. I can i just think the viewers, time to write checks. Thats the point. The judge made the point again. Alsa. Org. Alsa. Org is the website, and its easy to donate. I challenged ledger, who is in. Basos, i dont know if hell be in, and warren buffet. People wondered buffets an older man, how much cold water can he take . I think he can take it. Im old too. You did a great job. Incredible. This is incredible. Last night, costolo, oh, linkedin. Im going to email regina, my executive producer, i said, all right, bringing in the worst suit that cost the most and put jeans on after. There you go. Cant wait for the footage. You and the judge got it going. Congratulations. The mad dash, and last look at the premarket, squawk on the street is back in a minute. I accept the challenge ount . 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. Ugh. Heartburn. Did someone say burn . Try alka seltzer reliefchews. They work just as fast and taste better than tums smoothies assorted fruit. Mmm. Amazing. Yeah, i get that a lot. Alka seltzer heartburn reliefchews. Enjoy the relief. We do . I took the trash out. I know. And thank you so much for that. I think we should get a Medicare Supplement insurance plan. Right now . [ male announcer ] whether youre new to medicare or not, you may know it only covers about 80 of your part b medical expenses. Its up to you to pay the difference. So think about an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. 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Call or come in today for a free oneonone review. Its time for mad dash, thursday, seven minutes before the opening bell. Talking burgers and noodles, and none particularly appetizing for investors today. Were in a mode, david, trying to figure out, is it the hamburger challenge . This red robin gourmet number, disappointed, used the word cautious, and only use that in the event of nuclear war, but they used cautious. Noodles. Get more on this before i wish they would give us more. All right. They are satisfied. They are satisfied. Noodles okay, back to red rob bip, quickly. We need more. We need more on red robin. We dont have the full story yet. A crowded hedge fund, small cap long . Yeah. It had great growth, what everyone seeks, they want the next chipolte. I dont know about that. Not that long ago went public here. I dont know, did take out on mad money, i dont know about it, have good same store sales. Heres noodles, a Conference Call they said that its not working in the midatlantic. Why is this important . Because we buy a company like noodles because its a regional and National Chain starting in the west, works its way washington, d. C. Doesnt like noodles k like a major part. Its not selling well. Well, no onements to hear that somethings not selling well in washington. What that says is basically, hey, we dont have a national concept. Now, ive had noodles and kpoen, its good, but thats meaningless. I dont know, burgers, wendys numbers okay, mcdonalds trying to paint a picture why i sold costco. Retail too hard, restaurants too hard. Garden, too hard. Robin stepped up from the fast casual, but you sit down, waiter service. Its all spotty except for chipolte, okay . That loco has seven and fiesta group and poyo hermanos, a prequel. Some mexicans doing well, but not taco bell. Fast food is well, but not well enough, and theres chipolte, which is natural ogranic, what people want. Its hard, david. Its hard. I guess. Its hard. I have not been to noodles and company. No yield there. We have four minutes until opening bell, watching the stocks and more. Stay with us squawk on the street were just getting started. Bulldog you dont need to camp out til labor day to reward yourself. Get a queen size serta mattress and box spring set for just 397. Not to labor the point, but this sale wont last long. Mattress discounters where the reward was that what if tnew car smelledit card 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. 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 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. People say we like to cheer lead the market, we have cheer leaders on the floor today. Well say why in a minute. Watching squawk on the street live from the Financial Capital of the world, opening bell in 90 seconds. Disappoinments this week, macys, deere, japans gdp, germans gdp today, ukraine, iraq, 2 from the alltime high. Got some good yields, good growth, the profits are great, a lot of Companies Fire people, making numbers as long as Gross Margins are good. Red robin hurt by rival costs and growth problems, but companies are making a huge amount of money, and they are well managed and delivering, and those stocks go higher. You got to appreciate that our Internet Companies are doing incredibly well too. Theres just good things, good pockets. We didnt hit kohls too much, but 113 beats by 6 cents, comps worse than expected, down 1. 3, but up in july. Thats a classic example, usa today has cars doing well, and yesterday, retail sales cars doing poorly. Changes daytoday, and when i see kohls delivering a number, i want to own it because its cheap, very cheap. Opening bell, s p at the top of the screen, and sea 1 financial celebrating today, and, by the way, its the bank of the tampa bay buccaneers, hence the cheerleaders. Over at the nasdaq, a provider of cardiac monitoring services. You mentioned rising costs, green mountain, latest to rise prices, 9 effective in november with hersheys and others. Companies can raise price, and costco raised the price, challenged, but raised the price of the card, took it, and amazon raised the price of prime, people took it. Netflix raised the price, people took it. Red robin raised, and people didnt take it. Those who raise prices is an indication who is going higher. Foods cant, but the natural ogranic can. Its just this new consumer who is younger and is much more attune to natural and ogranic what they want, attune to the web, buys on the web, and those people are now doing like the deciding factor in a lot of companies. In how they are doing. Green mountain, one of the best gainers today. Green mountain, i mean, i have two keurigs. Why . Because the darn jersey water ruined the first one, but, you know, you have to use distilled water in jersey. I just think, again, its something that people regard, thats cocacola endorsed them, a good stock and bad short. One of the stories of the market, of course, is ability to make acquisitions, having cheap debt, acretive quickly, especially when they are all cash opposed to using stock. I mentioned that line of advanced auto parts. Remember aap . Wasnt that long ago looked like it was teed up for act vichl, a pe bid, they didnt have any debt, and then they did a deal, 2 billion, general parts, i think it was, and its offer to the races. Yeah. I mean, go back a while to get a better sense whats going on with the stop, and a good day after reporting Second Quarter fiscal 2014. The group is a play on average car. Five years old, and that sector has been very good. Again, thats a frugal sector, frugal society, you go, get parts there. Right, the largest awe motive after market parts provider in north america. There you go. Now, how about this theory, my friend, matt writes with me on the street, and the issue was not that the s p 500 was 1 of the new high, but up so very little for the year so people dont feel like they are making money. Sure. People feel constrained. Sure. I went to panera last night, okay, and i ordered the thai chicken, made a wrap out of it. I didnt want the wrap. I saw it was 8. I said, that cant be right. My thing comes to over 10. The wrap is 8. No, i want the salad. That comes to 11. Thats a lot of money to go to a fast, casual, wait in the mosh pit for the food, they call out jim, and i take it. Thats a lot of money for the salad, and i think thats why panera is not killing it. Its too much. Might be right. You called out yellen on the biotech call, and amgen in the family. This trial did not go the way they hoped, one of the big losers this morning. Yeah. They are getting good and bad, but i think that she, that the fed in particular, was talking about the intercepts and Charles River labs on mad money the other day, and thats the place where you do the original, look, all the it was funny, listen, the guys who do the real science are companies that are small bioteches, and she described them as being stretched, but heres something they aint stretched. No i think its one that has one, that could be big. Riskreward on names may well be worth it. When they hit something, they are ten baggers. Congratulations on that announcement. People like to hear about that. It happens. If you have a portfolio of them, yeah, may not hit, but one or two. Look at regeneron. Some say its a household name, i hope it is, but zel gene, they say its trying to cure arthritis. Its a diz if you cure or maintain art ri tis, i think thats the biggest ever, bigger than hepc. What has pfizer zone, spent billions, what have they done . The cuckoo clock, no, thats the swiss and third man, but pfizer is pedestrian. They are trying to get inverted. They were. Now theyre not. Maybe they will again. I dont want inversion. I want great drugs. Focused on capital structure, not necessarily on new drugs. Its what you got to do is invent. The companies that innovate are getting bids. Thats true. Nice upgrade of pgr, citi takes progressive to a buy, underwriting spreads improving, stock could run 15 , back to the 3 50day moving average here. Didnt get that read from travelers or aig. Aig coming back, by the way. Im not a fan of the insurers here, but aig is the one do go with if i had to go with one. Sounds like ge is on the cusp of unloading the appliance unit. Electrolux and the smart devices. Stock could go higher, could happen. Dont look at me when i talk ge. Im not. Refrigerators, they make good ones. I bought a ge range. I bought a ge diswasher. I made the mistake back buying a german refrigerator, and i would advise all viewers not to do that. What happened . They dont know how to make ice, apparently. Thats key. Its a constructionrelated company, and i should have gone america. You sure should have. Ge or sub zero, i was taught a lesson. My ge range boiled water like you would not believe. Boom, water. Those with high end refrigerators, my advice. Learning a lot this morning. Whirlpool in the top ten gainers this morning in a flat take. Any consolidation in the business leads to price cutting in the appliance industry. Take 20 off. Well, okay. Sounds good. You said you dont didnt think ciscos quarter is terrible. It is the biggest loser, down two and a quarter. All right, well, look, it will stop. You need my friend greenberg has a reality check piece on, listen, this is more of the same from cisco. I come back and say, look, its got that yield. Did it shoot the lights out . No. It didnt. They still did good sales. Its thats a very damming praise analysis im giving you, not a pure internet company. Finally, watch at t and apple, not moving a lot at the moment, but a report that at ts experimenting with a big discount if for an ipad if you get a twoyear contract and buy an iphone at full price, that is a september 9th event at apple is closer and closer. That industry is so cut throat. Oh, my. Have you seen sprint . A two for one split there. Painful. Its been painful. That stock is 5. 75 now. You have ceos you know, and youve never seen ceos say other companies are, you know, going to get hit by a bus. Theres a collegiality. Heres different. Hes a different moll. Who is he like . What sports figure is he like . Ali . Fight club for that guy. Bosworth type . Yes. The boz did not deliver with the pros. Jack tatum, remember him . They call me assassin. Lyle. Brilliant man, by the way. He was trouble. Steroided up. I feel about about that now that i mentioned it. Saw her at 72, can i say she was the smoke show on tv or not allowed to do that . Sure, of course. I said, wow, that woman is a smoke show. Thats lauren bacal. Wow. Steal for curves. Some actress. Absolutely. Dows up 25. Bob is on the floor. A bronx girl, lauren, wonderful, wonderful actress, wonderful person too. Listen, we started positive, in fact, all ten sectors in the s p 500 up, up 1 for the week, a lot of people ask, why . Not a lot of places to put money. Sometimes its that simple. Walmart was bad, but there was a bright spot. Traffic down, not goods they cut full year guidance again. Told this is the eighth straight quarter walmart cut guidance. Eighth straight quarters overall. Obviously, not good. One thing interesting, talking about investment in ecommerce, who goes to walmart. Com . The numbers are good for walmart. Com. Look, q2, up 24 , q1, the ecommerce part, up 27 . Look at the site recently . Theres a greater selection, easier to navigate on the site, got instore pickup as well. Saying this is the bright spot for them, at least, theyre not its not amazon, baa they are Getting Better on the ecommerce site. Moving on, kohls. Good thing, six cents beat, and positive, sales have improved as the quarter went on. They emphasize that. July, a positive comparable score number. Thats a positive overall, Guidance Unchanged as well. You see kohls up 3 . Food costs are clearly a problem. Weve been talking about this for a week. Red robin margins fell due to higher food and beverage costs. Noodles missed top and bottom line, culting their outlook, 20 . Thats not a typo with those, and number of companies citing higher food costs, we talked about this two weeks ago, papa johns, wendys, and its now a real chorus. Wholesale higher food costs, how long before that translates into just at the Grocery Store issues . A lot of 13 fs came out this morning. I did not look at a lot of them but noted that janet got rid of the stake in general motors. General swiss start the coverage of gm today with a sell or underperform, but thats a sell, ford is a neutral. Down there, fractionally today. Finally, just another historic move down in bond yields. Stock traders talk about bonds, Pay Attention. Did you see this . The 10year bund dropped below 1 . Can you believe this . Incredible. Were talking about centuries, you got to go back to deal with these yields. Even crazier is spain. People shake their heads, 26 unemployment, and bond yields are what the u. S. s are at 10. 5 . Now the dow is up 13 points. Back to you. Thanks a lot. To the bond pits with rick santelli. Hi, carl. Back into what bob said. Look at that dax. It traded under 1 . Here there were emails of shock that it did it. There were emails of shock that it didnt do it a week or two weeks ago. Lets look at the dax. This is that was the dax, sorry. The dax, a 9200plus. So, i guess, you know, good news is bad news in europe as well as germany contracted. You see all that europe is mirroring the activity we saw at one point in the u. S. , and lets look at the u. S. Intraday of ten, yes, cracked 240. Amazing. May, last year, big adjustment for quantitative easing ending. You see that all our comps, which now comp to june, are comping mayjune for a long time considering how much ground covered. Started at 160, same seen to may of last year for 30year bonds. Switch to currencies, twoday chart of the euro continues on the theme, bad news is good news r news. I thought the euro would be hit, but the day is young. Look at the oneyear chart, and remember its basically closing in on a year since weve been at these levels. Hes the outlier, traders on the floor did not make money with the trade, and recently, they did early in the year, and there was a time when the dollar yen followed Interest Rates, but no more. That correlation is snapped. Well continue to monitor whats going on with the leverage in the trade in japan, who is taking over, and even though it has been centuries as bob pointed out since rates have been this low, its centuries since weve seen bankers with test tubes. Back to you. Rick, thanks a lot. Rick san telly this morning. What do Richard Brandson and will. I. Am have in common . They use an app thats a butler. Ditching the local ree fri fries, and what that means for the fast food wars when squawk on the street comes back. So i can reach ally bank 24 7, but there are no branches . 24 7 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. 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. 70 grams, by the way, 150 calories. Just getting lipitor. You want some . Have a problem with that . You not need to be. Thank you. Sorry. A joke there. Thats from last fall. Burger king now giving up on the fries that we tried when they launched to much fanfare a year ago. They gave them the option to continue selling themg, and only a thirds of the locations kept them permanent. Market forces at work here . I mean, its just people like a certain taste. I saw the sodium article that you can have more sodium. I have not put salt on everything is confusing. I do think ill say for the record, egg mcmuffin and mcdons fries i love. I love them, but doesnt mean i eat them. I tried to grow quinoa, but it died. I like granola. Eat things you dont like, thats the new world. I had i had the toast you grandmother made that i had whole wheat rice cakes yesterday, whatever. They are all horrible. Terrible. They are card board, but its food, and thats what i eat. They qualify. David, it says food on the label. Awful. I see you in the lunchroom with the salads. All protein, so there. That and benching 300 pounds at 4 00 in the morning. Do what i can. I go to cabellas and lift weights. Fight the fight, baby. You bet i do. Stock trading in a moment, dows up 15. Squawk on the street continues in a moment in india we have 400 Million People who dont have electricity and i just figured that its time i do something about it. What were doing right now, along with ibm, is to actually transfer data through a satellite from our wind farms directly onto the cloud. I think we could create a far more efficient system across the whole network where we could actually draw down different kinds of energy based on when its needed by the consumer. A smarter Energy System is made with the ibm cloud. The ibm cloud is the cloud for business. Could help your business didavoid hours of delaynd test caused by slow internet from the phone company . Thats enough time to record a memo. Idea for sales giveaway. Return a call. Sign a contract. Pick a tie. Take a break with mr. Duck. Practice up for the business trip. Fly to florida. Win an award. Close a deal. Hire an intern. And still have time to spare. Go to comcastbusiness. Com checkyourspeed if we cant offer faster speeds or save you money well give you 150. Comcast business. Built for business. Time for cramer if stop trading. We talk about why is the market going up . You know, the main reason besides the fed, okay, look at omnivision technology. A good company that makes the camera on your cell phone. They got a bid from hcm corporation in china. Its a 29 bid. Wa capital. Whatever, money good as anybody elses capital. You get a bid for the company. Is skyworks under valued . Is anything else under valued . Bingo, a real bid in a company liked and disappointed, downgraded, downgraded, and just is in play. You see that thing and activism and takeovers, and you say, how can i be sure . This is a company i thought had the best technology, but never did the numbers. Well, they just got a bid. Not a definitive offer. People need to understand. Its not the price of the bid. Preliminary acquisition proposal by group of investors led by beijing based men. Well put. If you own it, you should sell. Saying that omni evvision, saw quarter, down, and now theres a bid. Maybe its not legit, does not matter. What im saying is this is the market that we have chosen. Obti. Obti . A Great Company not making numbers, and someone decided, ill take that Great Company off their hands and put that great camera, which is the best, best technology a lull in merger and acquisition activity given the incredible storm that we had over the last, lets call it few months i thought about the lie because the storm is where the bankers are, in the hamptons right now. They are. But i thought the last few weeks would be busy and nothing says well have a pickup. The convoy. I dont know if the convoy is enough to stop m a, but youre going to see more. We have not talked about food yesterday. Food will have it. I know. I can take off sandisk, and obti is not a Great Company, just great technology. Tslra, watch that, that could get a bid. Sure that one everyone knows the stocks been going occupy for days now. That said, you have wanted to see clarity in the russia before being aggressive on stocks. Yeah. Not forthcoming, right . Today is a good putin day, made nice today. Has good days and bad days. Today, he woke up, todays a good day, ill be jefferson, and the next day hes stalin, and i mean, the guy is multipersonalities. Stability nowhere in sight. In the meantime, just when the ice bucket going to happen . Thats up to the executive producer, and im listening to costolo and linked in, and, of course, our partner, spencer rasco rascoff. Where is he . Hell be here soon. Empty chair shot. They call him elijah. Comes in and out of the door like the wind. He was, like, the first guy, hey, jim, youre up. Whats on mad . Im going to rank the latin food restaurants. Hello. According to what . What you like . No. I was going to stick with stocks, that okay with you . Going to stick with stocks. David, one word for you. Yes . Tesla. Recommended today. Yes, yes, alltime high. Is that not unbelievable . There you go again. How does the s p get to an alltime this is what happens. You just get companies. Coors upgraded today. I love that. Just does not matter. Hits just keep coming. Interesting piece today, either the Washington Post or usa today on california and texas, governors duking it out to get the plant. Where is the cap x, thats an example. We got consolidation everywhere, and the airlines might come back, just consolidation, m a, shrink to grow, dividend these are all part of the mosaic why were 1 away, and they are not stopping. I got to tell you, i got a kohls gift card from my daughter. She must have used it. See you tonight on mad money at 6 00 6 00 p. M. Eastern time. Jcpenney due with resultinsresu they make or break . A personal assistant to the stars as well, when squawk on the street continues. I make a lot of purchases for my business. And i get a lot in return with ink plus from chase. Like 50,000 bonus points when i spent 5,000 in the first 3 months after i opened my account. And i earn 5 times the rewards on internet, phone services and at Office Supply stores. With ink plus i can choose how to redeem my points. Travel, gift cards, even cash back. And my rewards points wont expire. So you can make owning a business even more rewarding. Ink from chase. So you can. Welcome back to squawk on the street, road map begins with retail, weak u. S. Consumer cutting forecast for the rest of the year. What should you be doing with the stock today . Zblnch meanwhile, dow is positi positive, and european economies face more problems with growth. Should investors here at home be more worried than we are . Digital butler that celebrities rave about is available for everyone. Why human is getting so much buzz when the ceo joins us live. Starting today with walmart, the retailer matching estimates, but cutting the full year forecast. That had this effect on the stock now, down a tenth of 1 after the open. To talk more about walmart, managing director with raymond james, and stacy of sw retail advisers. Guys, good morning to you. Good morning. We saw the full year outlook lowered, but that was pretty much because of costs, does that make you feel a little bit better than were the outlook lowered because of the consumer staying weak . Well, we never really terrifically pleased by producing the outlook, but cost is the better of the two alternatives, and, yeah, so to answer the question directly, yeah, i feel good about the report today. The sales number was better than i think people were expecting and better than we expected, and the costs are pretty much expublicle by health care, by some additional overail economy as well. You look at the numbers, see neighborhood same store sales, smaller format, up 5. 6 , and ecommerce up 24 . Good numbers. Are you confident walmart is doing enough . I think the numbers tell the story here. We know the consumers migrating online. We know that walmart is slow investing in ecommerce. They are are finally doing that now, so thats pressuring, certainly, the numbers here, and, you know, if you look at the smaller format stores, thats where the customers migrating, less and less to the big super center, dinosaur big box stores. Its going to take time to get there. Obviously, incredibly hard to move the needle here because walmart is a big box store. Making the right investments in ecommerce and smaller boxes for fillin trips is the way to go. Theres now leadership in house at walmart, how long do you give them to deliver on the story theyve been telling wall street . Well, i think you have to give them some time, but regardless of that, hes going to take over an operation thats a pretty good operation, and i expect him to continue to stay the course. He has said that invenn story is a key focus of his, but also as growth returning growth to the core is a key focus of his. I see entertainment down double digitals. Do you see them getting out of certain categories at some point . I mean i dont know entertainment has been a very tough category for everybody. You heard from hh gray, comps terrible, and hear from best buy soon, categorys down double digits. When they get out of it, probably not. There is certainly a traffic driver with dvds, you know, so they are doing things with tradeins with games, and getting out of the category . I doubt it. Its a low margin to no margin category, but it drives traffic. I would bud sorry, go ahead, bud. I would agree with that, and, of course, in the entertainment or electronics area, theres a project reboot in their stores to reframe some of the Electronics Category as well. I dont see walmart getting out of that category. I agree. Bud, you still have a buy on the stock, expect to get a significant upside from here in the next 10 12 months . What delivers that . The out perform rating is just based on the idea that its a stock where for large investors and high portfolios or large portfolio to Pay Attention to the name. Should overweight the stock versus the choice of under weighting it or even weighting it. I dont see significant alpha, but i see it as a stock a Portfolio Manager with a large index has to Pay Attention to and probably wants to at least overweight it now. Before we let you go, we have jcpenney after the bell, and Department Stores do not look hot in light of recent retail sales. What do you think well see after the bell . Do you have a preview . Certainly. When macys, the darling of retail says margins are down because the promotional environment does not bode well for the space, but, you know, jcpenney, home was offline for a while, that helps the comp, going from really terrible to less bad. Look at nordstrom, they have the rack, biggest opportunity, thats what will drive the comp there. They just went online. You know, watch out for margins, but certainly the comp will be driven by the off price. Well hear that after the bell today. Certainly. Well talk retail later this hour, but thanks to you both. Thanks, guys. Thank you. Cisco beats the street on earnings, but cuts 6,000 jobs, 18,000 in the last two years, and job cuts part of restructuring with uncertainty in Global Demand and sluggish sales in emerging markets. We have more. I remember just the other day they cut 4,000, and now another 6. 8 is tough to stomach with revenuings above expectations, epf about expectations. The guide was decent on revenue, though, weak on eps, you expect that from cisco, have not missed eps in years because they guide light on that. What they are saying is take the savings from the restructuring, which they estimate at 700 Million Dollars, reinvest that in growth areas. The challenge, similar to a number of other countries sorry, not countries, but companies weve seen that were strong in tech, 15 or so years ago, microsoft, intells, big profit, and as they deteriorate, they struggle to find growth areas profitable enough to really make up for that, so cisco is trying to do that, not quite there yet. I know many people where are surprised to see such sluggish growth in emerging markets begin what chambers said for years now. Cisco keeps cash abroad, would continue deploying capital across the world, if not in the u. S. Were you surprised to see weakness across those geographies . Not exactly. Its geopolitical. Russia down 30 , that does not have to do with the russian economy as much as realities in doing business in some of the areas and ciscos having trouble in china for a long time. Brazil down 13. Argentina having trouble. The fact they mansioned to stay strong in america and the rest of europe is important, but what you have not seen yesterday from cisco is the kind of aggression you can see from the likes of intel, announced they pay several hundred Million Dollars for a networking business thats going to get them in the chip business for internet of things. Who knows if that pans out, but theyve done okay in security. Theyve done okay, beginning to do okay in wireless. You wonder if cisco needs more aggressive moves in those areas as well. The heels of the microsoft layoffs, mean anything for big cab tech . Learning anything . Efficiency discipline . Cost discipline . I think it was amgen as well shutting down locations, even as they reported pretty strong results. Youre sealing companies protected for profitability, not waiting for fundamentals to fall apart to take aggressive moves. From a workers perspective, hey, losing my job, but my executive gets a bonus because results are good and hes laying me off. Thats a tough message to bring to the work force. Chambers says, look, we have the same number of employees at the end of the year, but redistributing the base. He will not say where hell layoff, but if you guess, where are they refocusing . From where to where . Boy, you know, there are livelihoods on the line there, i dont know. I dont want to venture to guess. Might be looking through the transcript again to glean anything from them. They made bets, set top boxes, flip cams, and did a 18 0 couple of times. Talking about market transitions, identified quite a few that were right. Video conferencing was big, but more on phones than the dedicated systems rolled out. Flip cam from pure digital, gopro made a go of it, and nest, internet of things, a good play, but backing out of the business, if they made the right calls in the businesses, maybe theyd have growing revenue there. See you soon, nice look today too. When we come back, markets in the u. S. See gains over the past few months, europe, as you know, having serious problems. How long before it starts weighing on stocks here at home . And you saw me, twitters ceo, dick costolo, take the ice bucket challenge for als yesterday. See who else is stepping up to the challenge today. Names you definitely know when squawk on the street comes back. Time and sales data. Splitsecond stats. Its so close to the options floor, youll bust your brainbox. All on thinkorswim, from td ameritrade. Female narrator its posturepedic versus beautyrest its posturepedic versus beautyrest with up to 400 off. Serta icomfort and tempurpedic go headtohead with three years interestfree financing. Mattress price wars are on now at sleep train. Your ticket to a better nights sleep til labor day you doto reward yourself. T get a queen size serta mattress and box spring set for just 397. Not to labor the point, but this sale wont last long. Mattress discounters welcome back, shares of perigo, leading gainer in the s p so far. Stock moves higher after the maker of the over the counter store branded drugs reported better than expected Fourth Quarter results driven by product sales, and its up high, up by 6 . Carl, on the days trade, back to you. Thanks a lot. Worries on europe this morning, germanys economy contracted, france, no growth, italy slides back into recession. How concerned should we be with europe right now . The president of Global Strategies joining us this morning from the west coast. Good morning to you. Good morning, carl, good to be on the program. The german data came before the sanctions took effect, how bad is it going to get once they are reflected . I think, carl, the combination of the sanctions which will increase at the end of july, along with what you see in terms of the russian retaliation is going to have a significant negative impact on the second half of europe. Ive been saying for a while, the eurozone is not going to take off the growth is very much going to be depressed, and thats what we see in the Second Quarter, and we got a premonition of what was happening in germany with the Investor Sentiment index later earlier this week, the factory outputs dropping. Its not one indicator, all suggest to me, carl, that the second half is going to be a weak one. What would a reasonable Third Quarter gdp look like for instance out of germany . I think with a minus point here and part of it was because they did very well in the First Quarter with rigor, and so my guess is that the Third Quarter is going to be slightly better than the second, and 0 or plus. 1, and then the Fourth Quarter would be significantly negative. The other countries are not going to share any slight pickup in germany, france and italy and the rest of the eurozone are going to have a more difficult time in the Third Quarter. The 10 year german bund b w below 1 . How low can it go . Looking for it to be between 50 basis points and 75 basis points before it settles down. Keep in minute that the ecb is going to start a big quantitative easing program. It may buy a lot of bonds as part of this as we did in the united states, and that is going to cost bund yields further. Spanish was 251 today, probably a 2 the german one at 1 , and probably going to do gown another 25 basis points, if not more. We saw weak output, weak growth across the industrialized countries, but actually, the growth was better in countries within the e. U. That are not in the eurozone. Do you think theres currency concerns or any broader conditions for the industrialized nation, and why this biforcation . Thats a good question. Theres better performance in countries like the u. K. , for instance, so much so they talk in terms whether they should be raising Interest Rates. The difference is not so much that u. K. Has a currency which is different from the euro and monitor their own monetary policy, but the difference is the u. K. Economys more flexible. It has a more flexible labor market, and it is been much its had Structural Reforms in a way in which the eurozone has not. Germanys the only country in the eurozone to have had good Structural Reforms. The others are still lacking. I would say thats the big difference between the eurozone and the other noneurozone european countries. A bounce back in the Third Quarter, but it seems like were quite a long ways away from the ecbs 1 growth target. How far will we will when year end comes . To be clear, pickup in germany will be tempered in the Third Quarter, and youre right, its going to be, in my opinion, a long time before the 1 , that the European Central bank looks for this to be achieved. I dont see that any time soon, i see this continuing into 2015 in the lackadaisical manner unless they do something dramatic. By that, i mean, not increasing the money supply by doubling the money supply, youre not going to make the worker into a nuclear what you need to do is big labor market reforms, and that is painful and that causes growth actually to go down in the short term as germany realizes between 2003 and 2005 when they had reforms. We have a long way off from good growth in europe. Oh, certainly no clue its going to get better soon. Thank you so much for the time. Youre welcome, carl. Still ahead on the show, the new app that celebrities like Richard Branson and will. I. Am to organize their lives. Why its getting so much buzz, and the ceo joins us live when squawk on the street comes back. But he just cant get out. With the technology of cloud, we change all that. I can sing something into my device, up to the cloud it goes, back down it comes, sounding better. We break down the walls of creation and we give music creation for the masses. Unlock the creativity in anyone. With the ibm cloud. The ibm cloud is the cloud for business. 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 ally bank really has no hidden fethats right. Accounts . Its just that im worried about you know hidden things. Ok, whys that . 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We had interesting macro data this morning, but youve been a fan of what you call the Scarlett Ohara syndrome, worry about that tomorrow. Is that what were seeing today . I think we are. The russian trucks are still running, and i think as was discussed yesterday on this show, the idea is that people have been fooled by the cry wolf signal too many times, so they just decided im going to wait until thats happening, and so they adopted this coping mechanism, ill worry about that tomorrow, and thats what theyve been doing. Or worry about that when i get back from vacation. Do you think volume signifies something thats a greater worry, more fares trading on the news . Signifies nonparticipation. I assume that has to do with vacations. It makes markets thinner, that could lead to volatility, we have not seen it, but if theres a surprise, you dont have a full depth here. Today, were grappling with resistance in the s p all over again. Yesterday, it was 1945 to 50. Notched up a little today, so between 19 48 and 1958, theres a ton of shoveling to do. It if they get through that, that could prompt a try at the old highs. Watching the german bund, amazing. 1 or briefly below that. Our last quest said it could go to 50 basis points. Those moves can typically dislocate some markets conceivably and or keep us lower. I dont know. I think probably lower. There are stories all around wall street today about massive short positions in the u. S. Bond market, and in the futures that cover them, so if theyre as large as they say and people are caught off base, covering the short squeeze brings rates lower. Is janet yellen in control . Im not so sure anymore. Oil, below 97 here on texas and brent a few dollars above a hundred. And the squeeze between the spread between brent and west texas is narrowing, so brent is moving away, and some people think it will become somewhat less and less important, and it is the international oil, but as we here in north america have become more than selfefficient, maybe that will not matter as much. We had walmart and macys touting the consumer, and today, we have news that Mortgage Rates are down yet again as Interest Rates stay low, and were seeing gas prices staying low as well. What forces are at work for the consumer here . Why arent we seeing a strengthening consumer . I think to some agree, theres mild deflation their pressure. Mortgage rates down, but thats not prompted a big move in either the borrowings or people buying homes, so that the demand is not there. Same thing with oil. You know, its not yes, weve discovered fracking, but one of the key things is in demand is getting to be less and less, so we see that all over. People apparently not just here in the united states, are cutting back on a variety of things, and thats giving you some deflationary pressures. It will be very interesting to see what draghi winds up doing. Europe is getting stunningly close to a double dip recession, and they dont have the same bond market we have, so its not so easy to do a qe over there. You said that many times. Yes. Here in terms of the consumer, after the winter it was, like, oh, just get past the winter. Now were in the period where winters well over, and were hoping that now the decline in gas prices take effect. The decline in Interest Rates will take effect. Is that a reasonable hope for as we head into the Holiday Season . Well, i think that is the hope. Obviously, you are hearing already people talk about the backt backt backtoschool market, how is that doing, the Holiday Season, but we did come back from the polar vortex, but not as vigorously as everyone hoped, and so i think people are cutting back. Theres signs they are using their credit card again, but deleveraging has gone on for months. Kohls said sales up 2 , solid backtoschool season, but in the trade today, art, you said thursdays after expiration could be volatile. Is that in store today . History is for a volatile today. Today is anything but. They turned into the resistance, not getting any further. Hard to believe that were going to get a surprise from mr. Putin. His people dont believe it. The russian marcket is up again hoping for a relatively easy settlement, and because im in the warning business, i would caution the viewers to keep an eye on pakistan. Were starting to see some unrest there, and i always worry that when you see unrest in a country that has nuclear arms. Not to mention 200 Million People. Yes. Thanks for that. Art, see you soon. As if we needed Something Else on the plate to worry about. Straight ahead, jcpenney on the comeback trail, stock up 60 in six months, but will Second Quarter results stop that . What investors want to see from the struggling retailer today. Well be right back. 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. Thats why i always choose the fastest intern. R slow. The fastest printer. The fastest lunch. Turkey club. The fastest pencil sharpener. The fastest elevator. The fastest speed dial. The Fastest Office plant. 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. Welcome back to squawk on the street, shares of dip shop, a chinese interpret company, stock movers lower despite the retailer reporting stronger than expected Quarterly Results and lifted the q3 guidance, but investored expected more growth concerns, obviously, a huge issue for a lot of chinese Internet Companies. The shares, you see, down 7. 5 , carl, back to you. Thank you very much. We were discussing oil here at 96. 71. Lets gets to jackie deangeles for numbers. They were 393 now, and the eia coming in with the number for last week, a build of 78 billion cubic feet, less than expected, and that is why were seeing the prices increase a little bit here, but its been really interesting in terms of the trends weve been seeing in nat gas. Think about the fact that last year at this time we had a build of 70 billion cuic feet. The average is only 45 billion. The numbers are good in the yearly storage, but its funny, midaugust, and traders are talking about twinter already concerned because its a cooler summer, could be a brutal, cold winter again, and if thats the case, we do not have the storage, the full storage that we need, really, to head into that, so its going to be interesting to see where we go. Right now, trading at 390, to the downside, traders watch 3. 74, the july 28th low, interesting to see if we get there again, but, of course, this has been a pretty volatile tray over the last few weeks. Back to you. All right, thanks so much for that, jackie. Well keep an eye on the commodities complex. Mean while, shares of jcp made a turn around year to date up nearly 3 . Could this be the make or break quarter for the company . Lets bring in the managing direct with stern ag, chuck, good to have you this morning. Good morning, thank you. The streets calling for a loss that narrows in a recovery and sales to continue. What do you have on tap for jcpenney today . Were modelling some more. We have eps of a loss of a dollar predicated on a 5 comp increase and 500 basis points of gross margin improvement. I dont believe this is a make or break quarter for jcp. They expect improvement, and given easy comparisons from last year. I think its likely theyll deliver on that. I think the call is if comps are up high single digits, gets people excited, and we dont expect to see that. We think about a 5 or 6 comp is in the cards here. What do you qualify as improvement . You note comps are easy for a company that has such a slow down in sales under the 10year run of ron johnson, how do you gauge the effectiveness of the turn around going on right now . Yeah, thats a good question. I think youre going to see that in the back half of the year, particularly in the Fourth Quarter when the company cycles more normal comparisons, and i think right now, youre going up against down, double digit declines from last year, gross margin compares are easy, and i think where the rubber hits the road is in the Fourth Quarter, not this quarter. Chuck, weve had mixed signals from retail sales. Wh you look at the july sales, Department Stores faired the worst of the bunch, but kohls reports today saying july was up 2 , strong traffic and strong sales for back to school. How do you right. . How do you square that circle particularly . In general, one, theres events. When the consumers got a reason to shop, they shop. Whether its easter or fathers day or mothers day or back to school, they shop. What we just heard off the kohls call was the back half of the july and, in fact, all of july was good, particularly in the juniors and kids categories, and jcpenney is a big destination historically for the consumer or along back to school. I expect mike to probably send a similar message to what kevin said from kohls that back to School Business is strong to start. Chuck, the dollar store is consolidating, getting aggressive. You got amazon undeniably aggressive, and target is trying to get back lost share being azbreszive. Right. Is there any end in sight to the promotional environment were in . Not until the consumer gets stronger, karl. I mean, in my opinion, until employment growth is better in this country, youll have a consumer thats stressed and the second of that is the retailers aggressive on price and promotion, and, therefore, i think its paramount to be long retailers that can control their margins the best. I think theres a lot of retailers, you mentioned a couple, target, in particular, thats got a lot of margin in the risk because of the intense city out there. When you couple the confidence numbers with lower gas prices, with lower Interest Rates, better income, you dont think that consumers going to get stronger soon . Historically, its best with employment growth, actually show very little correlation with gas prices. On the margin, you know, confidence is back ward indicator opposed to a forward looking one, so, to me, its about employment growth right now. I think retail at the end of the day is a zerosum game. Promotional intensity out there, the theme from target and macys yes yesterday. Kohls bucked the trend a little bit, but their was on b and a. Will be a tough sled. Nordstrom reports after the bell, and they have the rack, lower priced fashion store. They are rapidly expanding that. Does that pay off this quarter . I definitely any that the rack stores and growth there will continue to aid their top line and modelling sing m digit comps at the rack, and, frankly, you know, 25 to 35 growth online, the full line stores. Brick stores, 140 across the country that are actually slowing, and we think the anniversary sale in july was decent. Focus tonight, for many of the bystanders we spoke to is on the gross margin line, the theme across retail, who controls the gross margin line . Thats the thing to focus in q earnings over the next couple weeks. Chuck, well have you back soon. Thank you for the value this morning. All right, any time, thanks. When we come back, the government king maneuver all allowing companies to delay pensi pensions when squawk on the street continues. 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 all right, here we go. That was really cold. The ceo of facebook, Mark Zuckerbe zuckerberg, accepted the ice bucket challenge for als. The Als Association out with new fundraising figures an hour ago. Since july 29th, donations reached 5. 5 Million Dollars to just the national office, add in the individual chapters, the figure goes to 7 million. Dick costolo took on the challenge yesterday. I accept scotts challenge to stomp out als. Costolo said he would do it if i took on the challenge. Heres that. I accept the challenge. And now we put the challenge to tmobiles ceo john ledger and zillows ceo, spencer rascoff. One says, thanks for the challenge, i owe you one, employees may have enjoyed it too much. Go donate. Well show you responses later on this morning. Interestly, theres tweets, stop dumping ice on your head, just give the money. Thats a debate whether this is useful. I argue begin the fundraising figures its drawn awareness whether you think its silly or not. There were figures in previous stories saying for the same time period last year, the foundation raised tens of thousands of dollars, so no matter how you slice it, the fact theres real money going behind this tragic disease, it is a good thing. The president , for his part, donates a hundred dollars to the cause, challenged by an 86yearold, the oldest living member of the kennedy family, politely declined, but is donating. Its reached the highest offices in the country. I was struck as we were out outside the big boarded yesterday shooting that, and some of the security personnel from the nyse came up and said my dad died of als. Its one of the things you dont realize how many people have been affected until the topic comes up, how does it come up by sort of viral initiatives like this. Exactly. Its a disease that is so slow, and it is so painful to watch family members and friends go through this, but the fact it is going to the public conversation again, and how long were you cold for really . Only hurt for a second. Dows up 22 points. Lets get to the cme to check with rick santelli. Hi, carl, and thank you. Id like to welcome our guest this thursday, bradley, thank you for taking the time. My pleasure. Listen, i really like the fact that you were in another life, the ceo of the pension benefit guarantee corp. , and thats the reason youre our special guest today. It seems as though the government wants to allow companies to contribute less than they should to their Pension Plans to generate more profit so they can pay more taxes to replenish the highway fund. Its called pension smoothing. Your thoughts . Sounds very seductive, doesnt it . What it is is budget gimmicks, slight of hand, and bad public policy. It does not raise new revenues over the long term. It discouraging in near Term Companies from putting more money in the Pension Plans and poses modest additional risk to the federal Insurance Program. How do you define modest risk . Theres pensions and being from chicago, illinois i understand the public side theres not enough money, and this is really coming back to haunt us through the form of higher taxes and less spending on services, but private companies at the end of the day, their liabilities keep going on. It seems like a really bad idea. Whats the risk to the fund and taxpayers . Rick, i really think its fairly modest in this instance, but theres no question that by telling companies to put less into the Pension Plans now, stuff happens, and if there are bankruptcies and terminations between now and putting in less and when they have to put in more later on, you raise the risk that theyll have further losses to the federal insurance policy program, and come police sitly, we understand thats backed by the federal taxpayerment its not the first time, and, unfortunately, i doubt the last time, that congress has used the federal Pension Insurance program, essentially, as a piggy bank to fund other unrelated spending, both through this pension smoothing mechanism as well as increased pbgc premiums. Now, you know, i guess the way i would look at this, and i understand, and im glad that it is only aed d mmodest liabilit this point, but if we allow companies to sneeg in tak in ths here with equities at record levels and contributions come from the profits in the positions, should any Market Corrections in the future occur, that word modest might get reformed or upgraded to something more. Would that not be true . Well, thats certainly a fair concern, rick. Theres no question. There is still a fairly large funding gap on the part of privatepublic sector plans in large part because of the low Interest Rate environment, but theres no question if theres a significant Market Correction and asset prices fall and fed keeps low Interest Rates, that funding gap could swell, again, if there are corporate bankruptcies, cash flow of earnings dry up, there is the personal for larger losses for the federal Insurance Program down the road. What we should be doing is taking advantage of strong corporate earnings to actually fund up the pension obligation. It is not going away. Well, listen, bradley, thank you so much for taking the time to explain the risks to the taxpayer, and, of course, well stay apprised of the situation. Thanks again, back to you. Thank you much, rick. When we come back, the app that acts as your own digital butler. Celebrities are already using it to organize their lives. The ceo will join us live here at post nine after this break. When you run a business, you cant settle for slow. Thats why i always choose the fastest intern. The fastest printer. The fastest lunch. Turkey club. The fastest pencil sharpener. The fastest elevator. The fastest speed dial. The Fastest Office plant. 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. Welcome back to squawk on the street, and sea world is continuing to sink in todays trade, a day after weaker than expected profits due to falling attendan attendance. They blamed the media debate on how they treat the killer whales. Today, four firms downgraded the stock, trading down 2. 5 still, well see if it recovers from the earnings and downgrades. Back to you. Just continues for that stock. Thank you. Lets look at the broader markets now, dow Still Holding steady, up 28 points, and nasdaq up 9, s p up 5, of course, shaking off those concerns about European Growth with germanys economy posting its first contraction in well over a year, easing geopolitical tensions as well as low volume, helping ease todays trade slightly. When we come back, cisco planning to lay off thousands of worke workers. More squawk on the street after this quick break. The cadillac summer collection is here. During the cadillac summers best event, lease this all new 2014 cts for around 459 a month or purchase with 0 apr and make this the summer of style. 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. 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. Ever bump into someone unexpectedly but cant put maim to the face . If only an app would allow you to search the details . Now there is. A butler. The human app officially launched in the apple store today. Joining us here at peeft nine is the apps founder and ceo. Congratulations. Thank you so much. Thank you for having us. Tell us what this does, what is human . Funny. Today, the one thing that hasnt change and our mobile phones is our actual phone and contacts app. It still takes everyone weve ever met since middle school. The most important person is aaron because the name starts with a and mom gets lost somewhere in the middle. The reality is, we remember people by context. As the guy you met last night or the person at davos in switzerland. Right . What if you could take out your phone and search the way you think . Hey i need to call the person i met yesterday. Suddenly they pop up. Why did you feel there was big enough market, enough people would download this. So many people i need an app for this . Such is that. The idea, if your phone could think the way you do, you no longer have a list. 23409 that dissimilar to the internet in the 1990s. An alphabetical list, everything changed when Companies Like google made the search. You open your phone. Im in new york. All contacts in new york automatically pop up to let them know im here. For i meet you and get your phone number, it quickly tells everybody we know in common to skip the name game and focus on the actual relationship. When you think about the development process, a year and a half in development, six months in baeta. What did you need to fine tune to make go public today . How do you make the app easy to understand its your new phone app and you dont have to think twice. A huge challenge. Second, how do we build it so your data stays private and secure on the phone . Were actually the first kpip that rewrote all of the infrastructure so your private data never goes to our servers. The app tracks you, right . You link, youre linkedin, all profiles to it. In a place using that contextual data . Connects to calendars and facebooks automatically helping find the contact. You dont have to look yourself. Whats cooler, all of that information stays on your phone. So even if the nsa hacked us tomorrow it doesnt exist on our servers. What if theres someone that i dont want them to know where i was, that i was in the same room as them . We dont actually share your location with people like that. Its actually a phone app for yourself. Think of it as your new contacts app. Its your contacts to put your friends in the context of your life so you know who lives in new york when you land in new york, and we pull that from facelook, linkedin or contacts, it knows who lives in los angeles when you open it, et cetera. Already Richard Branson, will. I. Am. On board. Kara swisher, a tech blogger from re code, a friend of the show. Also took human for a ride a couple weeks ago. Made me into a robot, an even were you. Funny. Of course, wearing her sunglagss in the nophoto. Even on the robot. That is kara. How important to get the people onboard . All the downloads, organic. People requesting invites, getting access to the app. Whats gotten me most excited one day after a talk we gave, two moms came up to me and said, this has been the coolest thing ive gotten, because every time my kids friends come over i always forget their name and now just search it on my human. Frankly, those are the stories taking this to the public more so than any other celebrity or influence. Android app . In a few weeks. Congratulations. Thanks for joining us. Carl, back to you. All right. Thank you very much, kayla. Good morning it is almost 8 00 a. M. At cisco headquarters in san jose. 11 00 a. M. On wall street. Squawk alley is live. Good thursday morning. Welcome to squawk alley. Joining us this morning, henry blodgett, founder and editor of Business Insider. Jon fortt ands cans can making their way to the set as we speak. First up, cisco cutting over 6,000 jobs. 8 of its work force as part of a restructuring effort. 4,000 cuts last year. 11,000 back in 2011. Ceo John Chambers said cisco needs to focus on areas of growth and has to make tough decisions. Ciscos Fourth Quarter prompt and revenue Beat Estimates but not enough to help the stock much today pap big discussion this morning about the yield, which is a saving gracian for cisco. Up 12 so far this year. But how much can you shrink the work force and still maintain market stand . Thats the issue. Protecting the stock, relatively cheap. Keep buying back stock. Big picture, the stocks been flat for 16 years now. If you ignore the last couple of years. Above all, moving sideways for that. They are very huge in a market that is not growing anymore, and in fact is being eaten alive by software thats lower priced. A lot of pressure on that. They can keep moving pieces around. The problem is these Growth Markets are small. Hard to move a 50 billion needle by focusing on stuff much smaller. And thats generous. Looking at latin america. Brazil down 13. Russia, its own issues. Down 30 . Yeah. And so they need to look not just geographically, also in different progress segments and theyve done it to some extent. Unified computing, service strategy, done well for them. Good margins by server standards and managed to climb the ranks as one of the top providers of servers. When youve been as successful at cisco was in the dotcom era, its hard to replace that revenue once it stops growing. How aggressively do they need to move into some other area . Something as crazy as chips . Or consumer hardware, which they backed away from, or something. If you really want to see explosive growth in the future. Chambers himself has said, look, look at the big players in our business. The five big i. T. Players. Nobody is growing. Theres going to be massive consolidation. So it wouldnt be surprising to see massive consolidation of cisco at some point. To see the majority of its business still switching and routing and yet switching down 4 4 routing down 7 . Buy side, not convinced they can diversify product mix over the next decade to completely change their profile to be a company with a product that stays relevant, competitive and current . Theres not that belief there. Classic