Transcripts For CNBC Squawk On The Street 20140820

This morning. Well tell you about them. Mans best friend may want you to sell the company. Petsmart is explorining alternatives as pressure from an activist investor mounts. Target posting Second Quarter operating profits of 78 cents a share, just shy of lowered wall street expectations. The retailer posted flat Comp Store Sales in the u. S. And cutting full year Profit Guidance as fallout from a massive data breach continues to weigh on the company. Target says sales, though, trends at least, improve this month based on early backtoschool sales, jim. We have a number, though, a guidance number, i guess, is the key for the full Year Adjustment of 310 to 330 compared with guidance of 360 to 390, and they go into why thats beginning to be below. I mean, some has to do with early debt retirement. Yeah. Obviously, a good deal still pretax has to do with cost in the breach. First, i said, are you kidding me . You got are you kidding me . Total disarray there. You did through the least of it, saying u. S. Traffic trends continue to recover, Monthly Sales improving, up 1 , better sales in august. You see the stock hit three buck, and then it starts really clawing its way back up, but we dont have enough to judge the company. By the way, a brand spanking any ceo. Another situation like walmart where weve got companies that are just hitting the ball out of the park, and them we have these guy, and these guys, this is like, i dont know, the fifth inning, and its raining. I dont know if they call the game or not. I cant operate this way. I cant. If youre an investor, i guess, you stay away . Look at the deal, say they have the money to cover, and then you go back, hope they come down a couple bucks from the low to get an outlet. A couple directions, right. Yeah. Some say its a value trap. Just look at the business, plus . Yeah. These guys, Normandy Beach for them, other than it didnt turn out the way Normandy Beach turned out, but the canadians came in, advanced before they were ready. Didnt work out. No, i see the Second Quarter coming in. And all right, take broader take aways for retail from target and any number of others that came in this morning whether its lowes after yesterday, home depot quite strong. Right. Well, i think you had stapled, interesting, they were hideous, but not so hideous that the stock goes down. That was urban outfitters. Yesterday was hideous, but not so hideous. Stock was higher. Tjx is the core of whats happening. They went from 63 to 52. They delivered an amazing number, up 4. 60. Why . Shouldnt have been where it was. All about expectations. Its all about expectations. In this one in particular, the expectations set by macys and nordstrom, the only one to distinguish is home depot stock had three purrs before the quarter, and yet it was still well in extreme. Frank blake is delivering numbers that i cant believe, in comparison to the walmart or target stores, hitting it out of the park, is that what you think about . Yes, look. Late spring, my contacts at home depot were concerned. It was as lite for home depot as it was for lowes, and they were not able to make the money back. Are they an infear your operator . Lowes is trying to play catch up. They had a quarter where it was better, now slipping back, but go over the home depot numbering and you realize its a company who reaches customers, how to have the right assortment, how to do well, and you is a great housing number yesterday which everyone scrambles. Go back to usg, owenscorning. Its giving back what it gained in part to the main competitor. What i dont like, david, we leave at 4 00 yesterday, well, you know, the dollars okay, russia, ukraine not bad, a good situation in u. K. With the border, you know, with the Federal Reserve there, and jackson hole, but we come in today, and hertz blows up. Thats being too kind, okay . Dollar is soaring because ukraine wants more concessions. They are not getting that from russia. No consensus in the u. K. On Interest Rates. The minutes come out at 2 00. Everything that at 4 01, thanks were fine. They were fine. Were going to get to hertz i think after this segment. I do want to get to petsmart also, another story yesterday. This is not particularly anything of a great surprise, the company saying its going to explore strategic alternatives, including what might be a sale. The retailer has been under pressure from active investor, Jana Partners to put itself up for sale, and implemented a Cost Reduction program as well. Not a big surprise here. The stock is looking up. You know, listen, speaking of people who are familiar with whats been going on at this company for some time, sales started to slow dwoun earlier this year towards the end of the first quarter. They were already in mode of, all right, lets look at what we can do to improve that, including, perhaps, the sale, did not move into it until jana wrote harshly worded letters about the companys operations, and argued there was a pe buyer, if not buyers, that might be very interested. I can tell you, there were inkwi inquiries before and after jana. The biggest competitor, petco. Heres how i read petsmart. Theres the before and after bid. Petsmart is so bad, killed by amazon, i dont want to touch it. Post Family Dollar, wait a sec, Family Dollar was the worst, two buyers. Maybe people want this thing. Doesnt a peer strategics come up often in any conversations. Stole my thunder, pe krrg a was not good they were taken. Mergers and acquisitions in the marngt, its led by strategic buying based on the synergies that can accrue. The fact that so often the acquired stock price goes up in response to a deal, and extraordinary rates of borrowing. In this case, though, ge has not participated much. This is one of the deals where it is a strong cash flow generating company, which is good for a pe to look at, and as i said, petco has already gone private. It would be an equity check thats in the insignificant, and the lps in the pe funds dont want club deals. They have an interest with this guy and that guy, and they have more exposure to the company than theyd like. Yes, sir . The secret memo that jana got, what the heck was that . I dont know. A generals battle plan . General documents showed how they were not meeting what was it about . I dont know what it was. It was dropped off. Private . I know. Its the fcc, making a single there or busy i dont know. I dont know. At least jana did not release it. They sent it back to the company saying, we got it, redact what you want to redact, and well release it. It was the august 4th letter saying, hey, were interested in acquirers, all who could pay shareholders a meaningful premium. What about the operations of the company itself, though, jim . Carved up by anson. They dont ship animals, but everything else. Peta, im just saying they would do it legally. They would do it humanely. I have saved six cats, okay. Dont get me boxed in. You know how many wild birds are killed by cats every year . Billions. I want to shoot them because they ate the fish in the pond, but this is petsmart flailing, and then someone saying, you know, its low, im taking the position. Thats been the theme, which is that a the worse it is, the better a stock. Look at this stock, screaming. Now its a reverse head and shoulders going to 7 6. Its a weird market, david, where they see some, like, german pet company. Could be. That we dont know about. The guys going after trw make the changes. Yes. Auto parts and dogs. Achieved that thing with bosh, so now we move to mets. Yes. Everyone is showing they do not sell chinese pet food. Nobody wants to feed their pet chinese pet food, no way. Kentucky fried chicken. Yes, exactsexactsly. They reported numbers, not particularly strong, but you see the stock. Lets talk markets here. Bring me back to the markets, of course, the s p 500 into todays session, a half percent of the historic high, nasdaq off the strongest fiveday winning streak in four months closing at a fresh 14year high. Meantime, minutes frts fedss july policy meeting due out at 2 00 p. M. Eastern, ahead of yellens friday speech at the annual jackson hole get together. I was there this year, at the beginning of the summer. Its really nice there. Im not getting there this year. I hope they come in with a happy frame of mind. They have an idea of low inflation, strong dollar, dweent housing, Interest Rates low. I dont know. What do you want . You want what you got. A 4 trillion Balance Sheet . Isnt it time, maybe, just time to should be a seller. Should be a seller. What for . They want to ring the register. Its a contrary view, but she should ring the register. Those will cost them. Whoever came up with that, i want the name. I want the name of the person. Saying you should short jazz pharmaceutical. I think a lot of hedge funds would too to do the opposite and do better. Theres a lot of talk they are behind the curve, that was the operative term, and in the meantime, they were on yesterday saying, listen, go to the supermarket, everythings up in price. All i can tell you is you got to look at where things are in the food chain. Everythings coming down in price. Everything. The only thing that is not budged yet is milk. I think its only a matter of time. Look, this is despite a drought in california thats horrific. Weve had cottons down, corns down, soys down, pork is down, cattles come down since putin shot himself in the foot, you know, oils down. Your cell phone bill is down. Nat gas is down. Cell phone down. Only people pay for is waiting for the iphone6 to throw money at apple. Right. No discussion today at the samsung commercial. Watched it in its entirety. Had to. Watch it in college, what to avoid. Hertz, number of challenges causing the company to withdraw, that news taking a toll on the stock, explore whats at stake for the company and rivals. Ahead, rick sherland says why resigning from microsofts board could be good news for the dow componentss shareholders. Take another look at futures. Were back on squawk on the street after this. 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. 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 who dont have electricity 400 Million People 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. Hertz down sharply in the premarket, the rental car company withdrawing full year guidance expecting 2014 results to come in, quote, well below prior forecast. In a regulatory filing after the bell, hertz cited challenges incoming auto maker recalls higher than expected operating expenses, and cost related to a review of Financial Results dating back to 2011. That review has been ongoing, jim, but it was, of course, the withdrawal of any guidance at all. They said record level industrywide, vehicle equipment, recall activity, but i dont know why they suffer more than any other rental company. They say thats restrained the available fleet. A positive, north american pricing up 2 . Davis is down. That was the underpinning for lai larry robins bullish view, which so far, is not looking too good. Going over the board, its marriott why am i doing a list, but this board is not going to stand for this. I think the ceo has to leave. Thats the key question. Yeah. That is the key question. These are real people. Kredle peopcredible people. I would point out this guy left the company, is he going to be is he the scapegoat here . I dont know. Hed be there 31 years. The lead director is also stepping down. Yeah, apparently, he was a big backer. Yeah, and so, youve got call it half the Company Owned by hedge funds. May not show up that way, but you see ubs, by the way, thats not ubs. They all do it on swap. I reported on icahn being in there. Right. And there are a lot of that. Thats hedge fund money. Right. Im making an emergency decision, putting it in the wall of slhame. Really . I have to. When was the last time . Its been a long time, but the guy is all but standing. This stock would be at 32 if he leaves. I was going to put clarence on the wall, but they beat me to it. Took a long time. This guy is so wall of shame material, its by a claim. Speaking to shareholders, what they will come back to is questions about operations in execution and look at, for example, equipment leeszing. Hertz spends that off. That did not take place until the Second Quarter of 2015, but look at the comparisons of their Equipment Leasing operation and uri and the difference in terms of performance, it is sizable, and so those critics may come back to that and say just feels like its operationally forget accounting stuff and a number of things beyond their control, but operationally, is there a problem here . Perhaps he no longer has the support of the Board Members as he did. Thats what i think. I would not sell the stock. Inconceivable, the spinoff, the competitor, uri, youre right, tremendous numbers. I think uri, the hertz spin off, based in florida, separate company, is going to be really good even though i see the retail numbers not good. This guys no, hes got to spend more time with his family. I just feel it. All right. Looking forward to that ceremony. No, look, probably a nice man. To the wall. Yeah. Bob evans. We talked about it here. Had the activist investor who is seeking eight board seats, eight nominees to be elected to the bob evans board. The vote is this morning. Its been ongoing. What i can tell you at this point is that sees no less than five of the eight nominees elected to the board of bob evans. Meaning instant value creation. No less than five of the eight nominees elected. That, at least, is what i hear at this point. Again, these are preliminary numbers they are basing this on, but i would expect that to be the case. Okay, walk me through it. Sandel believes the company should be split in the Restaurant Business thats underperforming, and sausage business, a mimic of hillshire brands. You brought that up many times, hillshire, the darling of everybodys eye. Look, bob evans sausages selling at multiples of heinz. They had a tizzy there, one jilted, one left at the altar, and if this is pulled off, that Bob Evans Farms sausage business is worth a great deal of money. Stock should be bought on this news. Majority of the slate legislated to the board of directors. Up next, cramers mad dash counting down to the opening bell. A look at futures as well. You see we are at least maybe going to have a slightly lower open after well, getting close to the records. More squawk on the street from the nyse right after this. Here at fidelity, we give you the most Free Research reports, customizable charts, powerful screening tools, and guaranteed 1second trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Call or click to open your fidelity account today. A little more than six minutes before the opening bell on this wednesday. Its a wednesday already. Its a hump day. Hump day. I want to talk haines dr. Greatest stock ever, by the way, not kidding. Sigh mop is on mad money tonight. This is a battleground stock. There are shorts who look at this number and its like a 24 situation to live another day. Today, they are losers. Thats because this is a huge guidance. Its the first time hes given a real number. Analysts will be surprised. Its white wave, stealing the thunder in the plant based, soy boies, all natural, all ogranic. This is simon coming back saying we are selling more than you think. Its a very, very positive round, though, then what is the central thesis of those short in the stock . Okay. Ogranic growth is not there, piling on acquisitions. He demonstrated he has ogranic growth, and this is the envy of the industry. If youre general mills, the flailing kellogg, okay, if youre kraft, you want to be natural, take this company and buy it. You want to beat cocacola and be diversified like Green Mountain and monster, hain. You think hes building to sell it . He loves his job. He loves his job. He does not want to flip it. Hes doing a lot of work to try to be able to make it so younger people eat the right things. Hes a real deal, not trying to flip it, but build it. He thinks he can bill the next kello kellogg, campbells soup, but hes well on his way. Unless hes bought by one of those companies. He has all those friendship bracelets. Im not a jewelry guy. I like the cuff links. They are clocks that work. Wow, okay. They try, midday, to bring it down, i dont know, its hains day, and simon is on tonight to talk about the porter and where the companys headed. Where is the market headed . Well find out in four minutes, the opening bell is just ahead. Bulldog if youre like me, youve been working like a dog all year. But dont camp out til labor day to reward yourself. Mattress discounters labor day sale is ending soon rest those tired bones on a queen size serta mattress and box spring set. Right now, theyre just 397. Get 48 months interestfree financing on the entire tempurpedic cloud collection. Not to labor the point, but this sale ends soon. Mattress discounters [ male announcer ] during the cadillac summers best event, lease this 2014 ats for around 299 a month. Hurry in this exceptional offer ends soon. [b ll rings] hurry in this exceptional offer ends soon. Time and sales data. Splitsecond stats. Its so close to the options floor, youll bust your brainbox. All on thinkorswim, from td ameritrade. Youre watchi inin ining cn quack on the street, and opening bell will be ringing in 45 seconds. Its just the two of us sometimes, but that takes me back to the conversations in the mid to late 1990s, and whats the key to the market . You had an answer. Of course, used to be pfizer. Cellgene. Whether it be am, with key drug trial that missed, and cellgene, there was a time they were up ten points, and they agreed to collaborate on a critical study, and the best of the big phara, a billion company, and cell gene is 73 billion. This is the beginning of an Important Partnership against cancer. Cellgene and bristol could be up, but its the key to the market because it represents the future. I love tech. I love you had an answer for that. Cellgene. Bob, please come on. I keep waiting for it to eclipse merck. That could happen if peggy hamburg if the fda does not want a competitor because they have one for hep c. The insurance providers want a provider, but they have not like to give me two things as we know, walgreens, we have not mentioned. Oh, my god, so many other things to mention. Before that, a lot of red on the board. Ill tell you who rang the bell, kids fashion delivers donating new apparel, toys, Home Furnishings to those in distress ed situations. Well, the key to the market last week, when lend delivered incredible numbers. The companion drug hes doing. Hes done stuff behind the scenes well, nothing hes been making moves that will make it so theres an acceleration of the products. They keep buying the stocks in the open market. So is it a creeping takeover . I know they have certain they cant they are stalked up at a certain level, right . Im sorry hes been on the show ten times, and listen, you recommended for five bucks. Five bucks. Feels strongly. He wants to run the company. Hes not done. Thedone. Thats the thing, david, they are not done. Opposed to hertz opening down 12. 2 . Hes on the nonlist, okay, the wall of shame, not the wall of fame. Hes not an okay. I want to take a broader look at retail now given we heard from everybody. A handful of bright spots, doesnt feel like a good earnings season overall for retail, but stock is up because expectations were more dire or worse to be fair than the Earnings Report that we saw. People with getting granular. Back to school was not bad, thats target. Frank blake talking about the idea, listen, our omni channel is working, and social media to bring customers in, its case by case. Did macys falter . I argue jcpenney is taking share back. We have not heard from sears yet. I just put that out there. Right. Will be a blowout quarter, yeah. Well, i mention it because you have the good, the bad, and the tuco, right . The angel eyes. Lands end has been spin off. They have a good point it really back to basics. The companies that are continual givers of traffic, and you is companies takers of traffic. The Dollar Stores are takers of traffic from walmart and target, and jcpenney is a taker back of the macys business. Costco is a taker from everyone. Yep. So youve got this influx, and, david, you know amazon better than anyone. I dont know about nanyone. Amazon remains the great destroyer. It is. The stock is not moving on walgreens. Its already moved on whaft wasa hideous earnings released, coupled with the decision not to have inversion, and investors flee the stock. The wall street journal has a story where that miss came from, over a billion dollars in profi profits essentially that were not adequately forecasted, and had to be quick ly drawn back because of medicare and not getting it right. Greg watson, i say hes the ceo blind sided by the cfo. People say, listen, the buck stops here. Dont forget, he backed from the inversion that would have made a lot of sense because the companys hes acquiring is a real overseas company. They did that deal, but in order for them to have done that inversion, they would have had to recut the deal. Yes. And the Significant Shareholder they have, would have had to recut his take on the deal from alliance who is now going to become forgot the name watch, what im saying, watson had sometimes you read the articles, and its like a sports article. You say, wait a second, thats a bad break. Said wasson has not done a great job. I beg to differ. Hes done great things. Cbs was not blind sided, rightaid was, and cvs pressure on result as they delivered in medicare. Exactly, exactly right. Okay. Now i think the trust buying here, the portfolio, nothing new in the article other than i felt a real head shot to greg that was not deserving. A lot of people think, just timely got the name there, will eventually basically end up running the company. Hes the guy with Significant Shareholder, shareholder of the combination, the whole thing. Its tough. I dont think wasson is done. I dont think hes done either. Rare you hear european being the aggressive manager, but it happens. In sprint, we have the latin. That stock, by the way sprint. Beat up again. It does not stop. Thats got to be pain. Yeah. 79. 9 of the thing. Its been a horror. 40 of arent you surprised 30plus percent. Arent you surprised, david . Were talking about august 20th, and i get up incredibly early for august 20. I remember saying wake me at 9 00, theres so little going on, but now panera was upgraded, outrage in social media because its too early. What is barclays, better to be too early. This is a company, i mention it because influx retail, influx restaurants, guardsen, the red lobster goes to arcp, saying its okay, the red lobster. David, there is so much news going on that i would last thing i want to do is take a vacation to jackson hole. Theres so much going on today. I torture you with ge news. They are just soaring here. Spain off, well above where t was publicly to be fair. There was a new article it has sea legs. No, better. Its on fire, david. People felt the bank longed it. Theres an article about ge spending much more money on aerospace, a september 10 meeting to talk about oil and gas, and what im saying i know youre trying to find it like im looking for all my papers as well. This is trading below syndicate bid, not a good came the wrong week. Now its up. Came an ugly week, and now its over, and people are saying, you know what . Interesting play on credit cards. Ipo since facebook. Dave, thats a very, very important deal because a will the of people felt that thing was going to drag the market down, and instead, its not a bad piece of paper, and maybe ge has to be rethought. Well, they own 80 of it, right . Whats the rethink . I apologize im looking for the asian times piece, but its how much ge spends in aerospace. This is a thought, moving the aerospace stocks, this story. There was a thought the aerospace cycle was done. Its clearly not done. And this is an important story, and and it was out with construction, nonresidential construction, very positive. We have data points in the u. S. Economy that are strong, and i think thats driving the market, making it so its a hard market to take down. We have apple passing a new intraday high and market value above 600 billion. Well, look, look at these stocks. Who can stop cummins . They were down badly because they did not talk lovingly about china, and now another day over 1,000, they are sneaking back, halfway where it was when it reported that number. These things are these are industrials that people feel good about again that had been killed. They are circling back to these. Right. They are circling back. I have the ge note, and, of course, close to selling the appliance division. Right. I think the main thing here is that they are going to spend and United Technologies is spending on aircraft. Got it. People have to recognize that sickle. Boeings back. We have more on whats moving this morning. David, jim, along the lines wh what you talk about, this is a shallow pull back since the beginning of august with the 4 drop, and i say 4 because everybody was looking for correction, but i was talking to a lot of traders here on the floor, an interesting theme they were saying, this is a lower volume day, and the last two days since this week started have been two of the slowest trading days so far this year. Just to give you an idea, one of the guys out here showed me, hey, you know half of the clients are out of the office, he was saying, theres not going to be a lot thats going to happen, but what they are going to look for is this idea that the markets are maybe going to slowly grind higher. We have a marginally down day today, indicative of the market where theres not a whole bunch of buyers, but rather just a look of sellers. Any time theres a move like that higher on this low volume, thats what a lot of the traders are saying is the cause of it. Again, not a lot of buyers, just no one really willing to part ways with their stock. If you look at the pullback overall, yes, it has been a bit shallow, but if you look at the way its matched up, say, to other parts of the market, right, talk emerging markets for sure, because, you know, with the geopolitical risks, you want to know whats happening with the markets. Look at the s p 500 and the etf that tracks the emerging markets rs since the february 3rd lows seen across the market this year, the eem is a stellar performer up 17 to 18 versus the s p 500 up 11 or 12 during that time. The way thing shake out, geopolitics not having the effect now on todays trade, and a lot of the guys look this afternoon for any fed headlines coming out of that particular release in the beige book. Also rather, the minutes, and it happens with jackson hole later on this week when a lot of Central Bank Heads talk. These guys see if theres a catalyst, david, for what happens out of the fed today and throughout the course of this week. Back over to you guys. All right, thanks very much. Slow, its slow in terms of volume, heavy in terms of news. Right, rights, including, of course, contested situations we follow on the faber report, and that i know you have a lot of questions about. I skds questions. And a lot of insight. Allergan and valiant. They had approached salix pharmaceutical, in the midst of doing an inversion, an asset drop down inversion with cosmo, but they will reincorporate. I said for weeks allergan was looking at considering whether or not they would do a deal. The idea being, frankly, that they say we would only do something that strategically made sense for us, and not an inversion. If they bought salix after, for example, they completed the cosmo deal or jazz or other names i hear, they would not invert. You dont have to. You can buy a company and not insert, but uninvert, if you will, but that uses up the budget sheet capacity used it balance a bid for aller began. If you were to use that, a lot of that in the cash deal that would, by the way, not require a shareholder vote, therefore, of your own shareholders, you conceivably stop it in the pursuit. Even if there is a special meeting called, allergan cant pursue. It also depends on when the special meeting actually occurs versus the close of the transaction. Theres nothing imminent here. Were not talking days. No . Well, then, they are not trying to get ahead. Approach are not talks to make that distinction. The reports are not subtle enough. The journal said approach. They did not say it wrong, but some say, oh, it means they are not talking. That does not mean something may not happen, bru to your question as i reported and did last week, they are close to valiant to presenting what i believe will be 30 of the shares outstanding in favor of calling a special meeting, okay. That could happen any day now. Thats the stock plus another 20 or so of the outstanding shares being presented. That special meeting will not take place for months. Probably not until december. The papers made it sound like it was imminent. No, its a long time between the presentation for enough shares to call the special meeting and the meeting itself. Enough time, by the way, for the company to buy something, maybe not close it, but come close, but that being said, jim, if, in fact, they were to do an accusation the Shareholder Base at all erallergan said the reas youre doing this is not a strategic imperative, they come up for a vote at the special meeting eventually. Right. And directors do not like to be voted out. Im sure the bob evans guys voted out today dont like being voted out. Thats not nice. Its the 1983, go buy another company that you think is bad in order to be able to stop it. Just salix is not bad. No, its not bad. I was joking with you because im jazz up. Well, by the way, yesterday, the fact that allergan and vail yept were up was bizarre to me. The fact is, valiant is up when its likely to buy the company. Allergan goes up if they are going to buy something, theyll go down. Talk about the reporting in this. Is there recklessness that the apoach we dont know, theyve not say said anything to people. What he indicated is they are willing to consider doing a deal if it meets imperatives they feel they need to say this is is where were doing it, and it they have a lot of Balance Sheet capacity. By the way, would end this if they do it. The directors would be voted out by unhappy shareholders eventually. How could you be unhappy going from 80 to 160 . What do you have to do to make people happy . David has done a remarkable job, remarkable. Now they are unhappy . I mean, you know what lennon said about rich people . What . Rich people arent happy. Its their own darn fault. Great quote from your cousin. Hes by great, great grand nephew. To santelli in chicago. Rick . Good morning, david. Twoday chart of tens tells us everything we need to know. Theres a staircase feel to the upside in rates, downside in price, but its very subtle, and if you open the chart up top 27, indeed, may just be a response to the preweekend moves that were exaggerated due to geopolitical headlines creating nervousness. As long as were idling under 245, tradesers think the burden of proof is still on the sellers, meaning it looks like long is still the proper direction on the charts. A twoday chart of bunds. Its different than the tenyear. Granted, you watch scale on charts, but theres a more proactive drift lower on higher price, and despite a lot of the headlines, some things regarding the Better Outcomes in ukraine, euro and dollar hit, as you see on the twoday chart. Open it up, fresh, fresh comps back to september of last year. Mr. Carney, mentioned on the set there, has a couple votes to raise rates a quarter of a point. Are the economies weak they cant take a quarter of a point . Think about the savers. The pound versus the dollar tells the tale. Open it up to april, and you see even though we have not made quite a new pass at a low price against the dollar back to april, we are hovering right in that zone. David, back to you. All right, thank you very much, Rick Santelli. Cwell, coming up, a new alltime high for apple, Steve Milunovich where the stock goes from here and the pipeline. S shazam has a new milestone, what it means for its future, and thats on squawk alley at 11 00 eastern. Well be right back. 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Time for cramer and stop trading. Theres a lot of talk, david, its time to circle back to the retailer restaurants that have not done that well. For instance, barclays has an upgrade from overweight to hold for panera. One that caught my eye was dunkin brands. They had a bad quarter. It was a bad quarter. They said buy the weakness. I come back, and i say, now, wait a second. Starbucks report the when they didnt like retail, part of the Russia Ukraine problem, and starbucks is the winner here. Should go back to 82. My travel trust owns it. I dont like what dunkin did. Said it would come back, it did not. Go with winners, not companies that make excuses. All you heard was the bullish case, hey, california. They are in the penalty box with me. They are in the box with me. They delivered a great quarter, no one care, and thats a mistake. By the way, the fact that coffee prices are up, that could come down. Vietnam has a good harvest. Dont write off the brazilian harvest. I was not going to do that, i was not planning on it. I wanted to be sure. Okay. Whats coming up on mad tonight . Im telling you, some people say its a waterloo for the shorts, stock up six bucks, okay, pressed the bet, guys in the press who are influential. Behind the bund, i drill down, yes, they use funny puns, and distribution now people dont know the company. This is the spinoff of national oil well, pete miller, the former ceo went with this one. I think this is a very exciting company. Last night, wpx was on, the williams spinoff. Whats the resources for this guy . Are we going to be energy . So much energy we have to export. Thats what the nat gas guys say, we have to export. Theres no room for it. The oil guys, say we have to export. We have no room for it. We discovered more than we thought even two years ago of distribution. All right. Well listen. Its a great story ill never stop telling. As you shouldnt. As you shouldnt. Its an underplayed story. Jim cramer will be back at the same time and place tomorrow. Bingo. Why Steve Ballmer leaving the board could be good for shareholders, and hoping for a dovish address from yellen on friday. Ahead of the curve with ethan harris keep it right here. [ dog barks ] [ male announcer ] imagine the cars we drive. Being able to see so clearly. To respond so intelligently and so quickly, they can help protect us from a world of unseen danger. Its the stuff of science fiction. Minus the fiction. And it is mercedesbenz. Today. See your authorized dealer for exceptional offers through mercedesbenz financial services. With all the opinions about stocks out there, how do you know which ones to follow . The equity summary score consolidates the ratings of up to 10 independent Research Providers into a single score thats weighted based on how accurate theyve been in the past. Im Howard Spielberg of fidelity investments. The equity summary score is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Our road map starts are retail, target missing estimates, find out what you should be doing with that stock. Plus, analysts sherland says why ballmer leaving the board could mean more cash for shareholders. What should we expect from the jackson hole meeting . Well go live to wyoming. First, target trading higher after earnings missed estimates. The retailer cut the outlook for the year, still reeling from the massive data breach. The managing director at stern ag, chuck, the bar was set low with target results. Target told us that to begin with. How much pain is baked into the stock . Its higher now. Surprised its higher, but theres downgrades in the print, and expectations were low. They lowered the numbers for the Second Quarter, and in early august, but i think the underpinnings here are tough for target. Traffic was weak, canadian losses mount, and really the margins are in free fall, but theres a bid for retail, and we saw over the last couple weeks, they made positive comments on back to school in the release and august and july trends have been better, so thats probably why the stocks up here a little bit, you know, a couple minutes into the open. I know youre going to get more color from the call in a half hour, but i noted in the release, john mulligan, the cfo, said we saw early signs of progress trying to improve results. Do you see the signs of progress in the relief . Not really. There was one bright spot, july was better, but we heard that across retail. The penetration mix went up sequentially from the first quarter. Appears some of the pain they felt last december from the credit breach appears to be abating, which is a good sign, but i dont i think theres more negatives in the print than positives. The rally into the open is really just because of expectations. And theyve got a new ceo, xsams club, axe pepsico more recently, is he on the call today in. I presume hell be on the call, but i bet mulligan does the bulk of the club. I expect him to right the ship at target. Targets issue is can they get traffic back into the stores . Its not clear to me how they do that without some heavy investment into margins, which, obviously, means, you know, a lower long term earnings structure. Hey, chuck, as you look across the universe you cover, what do you say to investers at the moment . Well, i think theres a favorable outlook to the balance of the year. The back to school commentary 1 good. I think the weather is to be accommodating into the holiday period, and they are easy until next summer because of everything we endured, so i think the names we like in our group continue to be names like costco, names like kohls, macys, and then we like the holdmerger opportunity here with dollar general, and i think if dollar tree backs away, you can still make money with that stock. You know, we shouldnt single out target here, and just back to target for a moment. Sure. How much of target issues are walmart issues, and how much of target issues its own . Great question. I think the ma senijor great question. I think the ma senijoity of tar issues are themselves at this point in time. Walmart has not been more price competitive than any point in the past ten years weve done studies. I dont think walmarts the issue, but i think amazon is the issue, and i think they lost themselves a little bit over the past five to ten years from the merchandising perspective, and consumers reacted not going as often. I think thats an issue for them, but i dont think its walmart at all, frankly. Walmart drawing in shoppers ahead of back to school. Im a fan of that. Does that typically work . I mean, if you shop at 11 00 at night. I certainly dont, but it could help out a little bit. We estimate the a 50 to 75 point from adding a couple hours here and there, and extended hours recently, we saw that trick from other players, but thats a short term solution. Target needs to get back to the better merchandising. They need to get the mix right. They need to restore what target was 15 years ago. Well hopefully well see a game plan from brian over the next couple months on that front. Hes got quite the todo list. Thank you for joining us, chuck. Ag analyst. Thanks. Fed is front and center for those in the markets in four hours time, the minutes from the fomc, and, of course, friday, janet yellen, herself, will speak at jackson hole. Joining us now from jackson hole with the latest on what people are saying and how the markets positioned. Steve, our senior economics reporter. Steve, over to you. Reporter simon, thank you very much. A big meeting expected here, world central bankers converge on jackson hole. The topic is labor. The key is how much labor slack there is and what it means for fed policy in the months and years ahead. We did a special jackson hole edition of the cnbc fed survey and asked panelists and respondents to look forward. 36 respondents told us the views on the fed funds rate, and you wont believe how dovish they believe it will be. It will be until the next president of the United States is in office for at least a year until the fed is done with the rate hike cycling. The first hike expected in july, 201567 2015. Thats a month earlier than the prior survey, not ending until the Fourth Quarter of 2017 at 3. 16 . Thats one of the longest, or three longest rate hike cycle by nine months longer than the average. We also asked our respondents to characterize fed monetary policy, and 46 say they think its too accommodativaccommodat. 3 say its too restrictive. One of the reasons why they think it has to do with the labor market and saw 74 say theres more slack in the labor market relative to the economy operating normally, but thats down ten points from the prior survey, 6 say its just right, and 20 now, up from 12 in the prior survey think theres less slack now relative to the economy at potential. What do you think yellen does friday morning . Signal a dovish tone, hawkish tone, or neutral tone . 63 expect neutral, 6 think hawkish. Thats the expectation from here. I expect yellen to defend her sense theres a lot of slack out there and the Federal Reserve has room to grow slowly with rates. Its unique because its a global meeting of central bankers, ecb, bank of japan, and going into it, there was a thought, certainly in the Foreign Exchange markets that the major Central Banks are diverging for the First Time Since the financial crisis going in opposite directions, policy expectations, and the survey is notable because it suggests the opposite. Well, its not the opposite in the sense that it does suggest the Federal Reserve will be tightening over a period of time, at least beginning in july of 2015 while i think the expectation is the ecb will not do anything and may be actually remaining loser or getter loser. I think what ill ask in the hallways here 1 that abs program at the ecb apparently is working on and thinking news on that coming out relatively soon, and thats where the ecb is going to try to promote the asset backed Security Market and increase the Balance Sheet that way. Remember, the ecbs Balance Sheet has been shrinking over the last several months. All right, steve, an important survey, thank you very much, a busy couple days for you as we count down to janet yellen. Two days of gains on the stock market, were on pause, rising the best part of 2 in the last week. The s p is now, what . 7 points away from the record close of 1987. Ethan harris, cohead of Economics Research of bank of america, merrill lynch, and welcome to the program. Ethan, i want to kick off with this finding that steve has brought to the table from the survey of people in the market and get your reaction to it. Its astoupding. Let me repeat, the fed will not stop hiking rates for almost one year from now in july, and after two years of moves, we have a new president in office, the rate will only be just above 3 . Thats where they top out. Is that right . Well, i agree with half of it. I mean, i think that the fed is going to be very slow to move here. I mean yellen wants to be confident that the economy is in the full recovery mode, they want wage growth, several quarters of solid gdp growth, but they go in a normal tightening cycle. It will not happen right away, but in the 201617 period, the fed will normalize Interest Rates. What does that mean . Means to me a normal funds rate, i would say, is about 3. 5 at this stage. I think, however, with inflation overshooting from the fed, well get above 4 in the rate. What does that survey mean to you that we only start hiking in basically a years time and top out after two years just above 3 . I think that means theres too much complacency in the bond markets now about where the economys really headed. I dont expect rates to stay low for that long a period of time. Interesting. To that end, of course, we had the dollar beginning to move, kathleen, in fact, the euro broke below 133 today, now moved 5 since the beginning of may. The currency market, kathleen, is beginning to be sensitized to whats going on here. What do you think . I would agree with that want i think were in a challenging environment with the u. S. Really making some progress towards recovery, and, really, all eyes are on europe because of the deflation their fears there. I think one of the best moves that could help europe would be for a stronger dollar versus the euro that might allow europe to get traction in the economy. I think draghi is the focus of jackson hole because of this. The other side of the trade, the dollar, the outlook of the fed, minutes from the last meeting, do you expect that to be a market mover . I think the minutes are always a wild card. The minutes are where the hawks and fomc complain what the fed is doing. You get hawkish kind of commentary there. Im nervous around the minutes. Jackson hole itself, though, is an opportunity for yellen to defend the position. As steve said, talk about why wages are so weak, why they are Spare Capacity in the labor market, and so i dont i dont view jackson hole as a risky kind of thing from a markets perspective. Which is interesting, ethan. Theres a suggestion as we sit below the record high of the s p and the way the traeasury moved recently, its overbought and people could sell on yellen when we get there. Would you agree with that as a possibility . Well, for me, i think theres risk of that. The treasury market is over extended. I think a lot of people stepped back from the market because they are uncertain how to trade it, so i think theres an upward bias in treasury yields in the fall. I think the sense that the stock market has things priced better than the bond market now. The stock markets optimistic because of better growth, low inflation, friendly fed. The bond market, however, does not recognize the better growthing and theres upside risk to bond yields. Thank you, both, for your time. Up next, Steve Ballmer leaves the microsoft board. Is that a good thing . The noted and long Time Microsoft analyst tells us why he thinks the move means for cash for shareholders. [ woman ] the cadillac summer collection is here. [ male announcer ] during the cadillac summers best event, lease this allnew 2014 cts for around 459 a month or purchase with 0 apr. Hurry in this exceptional offer ends soon. Welcome back to squawk on the street, apple shares hitting a fresh alltime high in todays session as highs a hundred dollars, 77 cents a share, a day after apple broke that 100 mark forget First Time Since splitting this year. Apple last set a high in september of 2012, and struggled after that. Right now, it is up down just about a fraction. About a quarter of a percent. Simon . Thank you very much. Lets stay in big tech. Steve ballmer resigned from microsofts board late thursday in a note to the new ceo, ballmer said, quote, given my confidence in the multitude of new commitments im taking on now, i think its impact call to continue to serve on the board and best for me to move on. Our next guest says ballmer stepping down could mean more cash returned to shareholders. Rick sherland is a good friend of the program, and welcome back. Hey, thank you. Remind us of how much cash microsoft is sitting on. 100 billion in investments. Why would that return cash . Have been conservative in wanting to retain cashment i think that the changes that weve seen in the board, bills no longer chairman, steves no longer on the board, i think its an opportunity to have these drepirectors engage with shareholders who have more influence on the board, and the Top Priorities of shareholders has been not just changed management, fix the strategy, reduce cost, but its also return some of the cash to shareholders, so ting more likely over time youre going to see a more accommodative board in line with the interest of shareholde shareholders. Right. Presumably, its in that order. Fix business. Deal with the thousands of layoffs. Then lets talk about the cash. Yeah, so septembers a very important month. Usually the middle of speeptemb, theres a board. The pressing in my mind is will we see the change in dynamics in the board room taking effect this early to affect the dividend, or have they just been preoccupied with changing the strategy, new management, the layoffs. Is it unseamly, in some way, to increase the pay back to shareholders, at the same time you do layoffs. Its possible we dont see anything bold at the september meeting, but over the year, its likely youll see something bold done with the cash. Beyond the board move, rick, certainly cements the position as a leader. The new leader of the campaign, already made interesting moves to rebrand microsoft. The stock up 39 since ballmer left. Is that enthusiasm warranted . What happens to the stock next assuming your cash returns happen and more moves come . The biggest question now with the stock up as much as it is, its selling at a market multiple, and people say, well, did it have its move at this point . You have all this cash. If you back out the cash, the stocks selling at about 11 to 12 times ev to precash slower, about 13. 5 times 2015 earnings, so thats one of the cheapest stocks i cover. I think when you consider the cash, that last lever to be pulled, i think, still represents a lot of value to shareholders. Hey, rick, you know, i mean, dynamics in the board room are hard to know without being in the room, but i would guess ballmer takes up a lot of air, any other expectations you have with the board now that hes no longer in the room . I think value act is playing a very important role. Right now, they focus on how do we attribute to fix the business . We have substantive suggestions, they are not there to pillage the company for cash. I think they are there to fix the business first. I think their influence, however, in trying to engage these directors more with shareholders will be a constructive kind of behind the scenes dynamic that especialnhae shareholders. Could take time. Interesting you say that. They are in there for a very long period of time, even though we think of activists being in and out. Theyll be there for years. If they have roughly a hundred billion dollars they sit on, as a rough estimate, how much do you think could be returned to shareholders, and how does that translate to a move on the stock . Without long term investments, its 87 billion and back out the debt and provide tax on foreign source income if they repatriate, they would not do that, but theres 46 billion or 47 billion they dont need, so if they would buy back 10 of the stock, i advocate, thats 35 billion, and i think they could well afford that. Thats a bold move. Thats 10 to earnings. So im not sure that we should expect that by september, maybe we just get a little larger than normal increase in the dividend by september, but i think over the next year, think in terms of something bold that happens with that cash because i just dont see the company needing it, and they just continue to accumulate cash. Thank you for the time, good to see you. Up next, the senate race in iowa to help determine whether republicans or democrats control the senate for the last two years of president obamas term. Well have all the details on that after the break. Its monday, a brand new start. With centurylink visionary cloud infrastructure, and Custom Communications solutions, your business is more reliable, secure, and agile. It can bring out the worst in people. But the mclass scans for danger, corrects for lane drifting, and if necessary, it will even brake all by itself. It is a luxury suv engineered to get you there and back safely. For tomorrow is another fight. The 2015 mclass. 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If you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. With centurylink visionary cloud a brinfrastructure, and Custom Communications solutions, your business is more reliable, secure, and agile. Iowa is one of the races that will determine whether the republicans can take control of the senate for the remainder of president obamas term. And the tossup senate race in iowa features are very different kind of class warfare. Cnbcs chief washington correspondent is live in des moines with more on that. Before you start, john, nail what the math are here. The democrats are on the defensive in seven senate contests. The republicans only need to win six of them, and iowa is, obviously, the big swing. Reporter well, simon, the republicans need a net gain of six. Thats assuming democrats dont win any republican seats, and this is one of those. You know, senator Mitch Mcconnell will make it rough for president obama the last two years, and iowa, along with arkansas and louisiana, alaska, some other states you see on this map are the ones that are going to decide. Now, we had a clear favorite in the race for a long time, bruce baley, eightyear democratic congressman, until he made these comments with lawyers in texas, and he seemed to disparage the fact his republican colleague in iowa, Chuck Grassley, is a farmerment take a listen. You might have a farmer from iowa who never went to law school, never practiced law serving as the next chair of the Senate Judiciary committee because if democrats lose the majority, Chuck Grassley will be the next chair of the Senate Judiciary committee. Reporter that provided a huge opening for joni ernst, the republican candidate, former iraq vet, raised on a farm, and shes drawing a contrast between baley and her iowa values. Listen to this ad. I may not have a law degree, but i got something washington needs a whole lots more, iowa values. Reporter now, i asked bruce baley this weekend whether or not he lost touch with the state, and he pushed back aggressively. I think its just laughable. I have lived in iowa my entire life. I got my education in this state. I met my wife in this state. I raised my kids in this state. I worked in iowa for 40 years before i ran for public office. I have not lost touch with iowa. I have been a champion for the people of iowa the last eight years ive represented the first district, and i think when people look at my background, theyll find that out about me. Reporter now, that cultural battle, guys, is just one part of the class warfare fight. The other part is the specific Economic Issues bruce uses against ernst on the minimum wage, social security, and other things. Well talk about that on closing bell, and on street signs, where they stand on the hot issue in washington whether or not the import export bank, important to businesses in iowa, should be maintained. Yep, very Important National issues. Thank you very much, john harwood. An american journalist, james foley, went missing in syria two years ago was executed by isis militants in a graphic video on youtube. That portrays an isis member speaking english holding another hostage unless president obama agrees to stop air strikes. He was a classmate of mine in journalism school, a brave journalist, and our thoughts will be with the family. Squawk on the street will be right back. 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, shares of shutterfly getting a speculative bump. According to bloomberg report, heldmand and freedman will make an offer to acquire, and bane capital is interested. There was reports that apple, yahoo and microsoft were interested in shutterfly. The shares now spiking up 1. 5 on the headlines. All right, thank you very much. We are a little over an hour here into trading. Here is what we are watching. Samsung and barnes noble hosting a joint event releasing a new nook based on Samsungs Galaxy tab 4, 179 the price target, guys. This is happening in new york. Perhaps a new chapter here for barnes noble, david, what dupdupo you think . They are have work cut out for them. We know that. Relatively new management, disposition of the Digital Business to a certain extent no longer, obviously, a focus. This device was not exactly a surprise. It was long rumored, and we know that barnes noble has been working on this kind of tablet so well see. Its a crowded market, and ipad tablets down. Theres Second Quarter lower, and lowering the guidance, stark contrast of home depot yesterday beating results, but they raised guidance for the year. Going through analysts reports today, lowes is too optimistic. It did get hurt by the bad weather, but home depot bad weather . Its still bad weather . No, no, that was the first quarter. Loweri lower guidance for the year, and this years comp sales better than expected. Hertz one of the losers, lowering full year guidance, expecting 2014 results well below the prior forecast. Hertz is in turmoil, splitting in two, and more importantly, i think im right its file earnings for the first or Second Quarter, and delays that for accounting problems going back. I think jim was suggesting the ceo should step down . Jim cramer said hed put mr. Fissoro on the wall of shame. Hes under pressure. The lead director stepped down at the company. A large holder there no longer, but the director was a big supporter of fissoros. To those who believe terrorist operational and education cushion issue, its a question as to whether or not he should keep the job. Thats for the board to decide, obviously, simon, and they cited north american pricing up 2 , which is one of the few positives you can see. Hit by the gm recall. Right. Youd expect other rental Car Companies would be hit with the recall. More exposed than say, avis. The question is is this a buying opportunity . Theres a lot to work through. Theres research saying they believe the operation thal issu overwhelmed it, but industry issues are strong, and talking about 33 a share, which is 20 june side. Theres a bullish case saying pricing is theres a lot of room for inquiries pricing, and that hertz will eventually benefit, but my guess is the debate about the ceo and whether or not hes going to be able to maintain that position at the company is going to be one near term, at least, what shareholders focus on and get the board to focus on. Dont forget the spinoff equipment business. Thats rights, when you look at its numbers versus uri, for example, comparable, uri far better in terms of what it was able to do, again, going back to questions of execution in hertz beyond the accounting issues and system issues that they have. By the way, the accounting thing, the audit may be done in six weeks. Avis, by the way, we showed the stock, down in sympathy but rebounded now. Had a good quarter, didnt it . Good results on the pricing theme of higher volumes in north america. Were watching the super bowl. Did you see the halftime show turning into a pay for play event . The journal reports the nfl is considering three big acts in february, and when they notified them, they asked the artists to contribute a portion of the post super bowl income to the league or make a financial contribution. Thats common. Look at the cable channels, on reality tv, if theres a show about you, they take 20 of your business. These are superstars. 20 of the business. Thats a lot. Assuming your business has dramatic increases in revenues as a result. Correct. Did you see who the acts were . Rihanna, katie perry, and cold play. Have you listened to cold play, and since chris martin split off with paltrow, its sad. I like cold play. Great in a big stadium. A big sound. Going out with Jennifer Lawrence from the hunger games, so presumably, if they wait until next year, might have happy songs. Uplifting. What i read in the tabloids, they have a Good Relationship still. Im rooting for rihanna. Your british, dont you take your time taking pictures like they all do over there . Theres a statement when the album was released, ghost stories, and suddenly were not together. Youre mischievous, you know that . I am not. Do you say to yourself at work, i can run the company ten times better. If you have, make this statement a reality when squawk on the street comes right back. 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. Over 1. 2 billion eyeballs are on us during the two weeks at wimbledon. True tennis fans want to know whats happening. They dont want to just see whats happening, they want to know and understand why its happening. Anybody can just put data up, but we want to get a reaction, make it far more interactive. We rely on the cloud to provide that immersive digital capability. Give fans more then just the game with the ibm cloud. The ibm cloud is the cloud for business. Welcome back to squawk on the street, American Eagle flying high, posting better than expected sect quarter earnings despite a 70 drop in the same store sales, they predict 19 cents a share, in line with street estimates. The stock today up nearly up 7 , bucking the trend when it comes to retail, simon. Okay, thank you very much for that. Lets go to chicago and Rick Santelli has the santelli exchange, hey, rick. Hi, simon, watching the euro reach the 133 level as well. I want to welcome my guest, matt maley, and thank you for taking the time today. Weigh in as we see the dollar strengthen, but really, really its a story and look at the percentage of the dollar index, 57plus percent, euro moving lower, the pound, even though there was reprieve today, basically close to the lowest level against the dollar since april, and your thoughts on Foreign Exchange and why this may be happening in front of jackson hole . Well, you know, seeming to be everybody is in markets are are expecting a huge and even more dovish comment from yellen and the other Central Bank Leaders around the world as they speak this weekend. Markets at alltime highs. Its interesting youre seeing that the bond market is ticked back a little in the last few days. I think they are saying, you know, worried about that were going to get a buy on rumors, sell the news type of thing no matter what they say, so you may see the stock market pull back a little bit. As for the dollar, i mean, thats breaking out to new highs a thats a big breakout move, overbought, could pull back, but thats not good for risk assets over the long term, but at the same time, the markets are facting against that right now. Do you believe the dollar is collateral, or do you believe its proactive in the current move . I in other words i think its european weakness. Look whats going on in europe. You have, first of all, the weakness was taking place before the sanctions kicked in, and certainly before the second round of sanctions kicked in, and no matter how much things ease in the headlines, those sanctions are not going away any time soon. Were seeing i mean, look at germany. They made a lot of money over the last few years loaning money down to spain and to italy and to greece. Those thing countries are turning into recession. They will not make as much money. We have weakness, and that continues no matter what people say. The last 30 seconds there, matt, ill interrupt you. Choked up on the growth side, yet they managed or manipulated, pick your word, Interest Rates specific to their securities whether its spain or portugal or even italy, france to some extent, down to low levels. Can i walk away from the final comment to say then low Interest Rates are not the cure to fix everything . No, they have trouble keeping rates that low because the banks in europe bought all these sovereign debt bonds, and they want to prevent losses and protect the european banks rather than help the economy. Obviously, its not got help in the way their bond markets are showing. Excellent, thank you for the comments, matt. My prediction is that jackson hole will be more of a headline grabber for the Foreign Exchange market than anything else. Thats my opinion. Thanks for taking the thyme today. Simon hobbs, back to you. Thank you very much, rick. Coming up on the program, gopros ceo accepted my als Charity Ice Bucket challenge and he in turn challenged our reporter, josh lipton and hollywood player, brad pitt. One accepted the challenge, and well be live on this show next. [ male announcer ] during the cadillac summers best event, lease this 2014 ats for around 299 a month. Hurry in this exceptional offer ends soon. [ jackhammer pounding, horns honking ] [ siren wailing ] visit tripadvisor miami. [ bird chirping ] with millions of reviews, tripadvisor makes any destination better. With millions of reviews, thats keeping you from the healthcare you deserve. At humana, we believe the gap will close when healthcare gets simpler. When frustration and paperwork decrease. When grandparents get to live at home instead of in a home. So lets do it. Lets simplify healthcare. Lets close the gap between people and care. 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. Have you ever thought you could run a Company Better than your boss . Well, youll want to check out a radical reality series on cnbc tonight called does someone have to go. Bosses turn business over to their employees, and theres a familyrun exercise Equipment Company where employees turn on the boss. Id fire tom and let toms daughter take over. I would demote tom. Tom needs to go. When i looked at risa, and she turned away, i think shes trying to drive something home. Maybe its time for a change. The change that i dont think needs to take place. Even the dogs feeling for you now, bro. Okay. Lets move on. Oh, joining us now is the boss in question. Tom smith, founder of dsx. It looks brutal, tom, did you put your daughter in charge of the business . Shes doing a wonderful job, the chief, the one in charge now. Tell us more about your business and what it was like to be on the show . Well, ill tell you, we got a pretty dramatic product. We make hand exerciser products like the used by ufc fighter, ae that needs a strong grip, or for carpel tunnel issues. Weve started probably in the early 80s and been in business all the way through the hard times and good times. And weve even made it through this reality show. So what was the problem . Why were the employees so upset with you and how you were running it . Oh, you know, like any other company. Deadlines. You know, as the as a guy that put the whole project together from the beginning, keeping the deadlines tight and working with the staff, sometimes youve got to return the guys harder to get a little better performance, and the boss cant always be the likable guy all the time. You know what . We can keep it together. Totally fascinated why you would choose to do this on television. Did you feel that would make it a more constructive kind of process . The Better Things would come of it . Because it was kind of like a matter of record . Why make that decision, a, to go in for the swap, and secondly, to do it on National Television . You know what . This was a wild opportunity. It was a social experiment that unlike the product line we put out, which is so unique, the opportunity to give the employees that run. It was a unique opportunity for us to see . They were coming from. And in turn, to kind of help with a lot of the internal squabble, when you start returning a Large Company with a large delivery dates and times, youve got to keep everybody in tune. Its great to know what they think, and we really caught it all. Let me tell you. Well we cant wait. This is just the premiere and it features you and your business. What advice would you give to some of the other bosses that are going to have to go through this . Let me tell you, if you ever get the chance to do a, an experiment like this, its all the better. Theres going to be a lot of drama, a lot of tears. Going to be a lot of excitements and things that youre not even expecting to happen. Its probably one of the most unique experiments you could go through, and at the end of the ride, everybodys better. How olds your daughter, by the way, tom . Shes a chief. Really holding the realm. Performing, making it happen, and since the show, you know, sales have moved up. Retailers, retailers out there, stores loving it and everything is coming together. Yeah. I was wondering how old she was . Oh, pushing 32 years old. Got it. All right. Tom, look, looking forward to it. Looks like blast. Glad you have such a good attitude. Do not miss the Series Premiere of does someone have to go . Thats tonight, 9 00 p. M. Eastern time here on cnbc. Over to jon fortt with a look whats coming up next on squawk alley. Jon . Sara, a big show. Head of ebays braintree units talking about onetouch payments. Also weve got the ceo of shazam with Surprising Growth numbers that theyve been able to put up pup did you know tom hanks has an app . The guys who helped him put that together, on squawk alley, coming up. Yesterday morning on cnbc squawk anchor challenge immediate to the als ice bucket challenge. Cnbc and simon, i accept. After i take the plunge i get to make a few challenge of my own starting with my High School Buddy and cnbc reporter josh lipton. After that, shaun white. Finally what the hell. Brad pitt. Lets do this. Oh, you just knew gopro would do it well. Thats gopro ceo nick woodman. My ice bucket challenge for the charity. You just heard nick challenged a reporter on the west coast, josh lipton, and now its mr. Liptons chance to accept that challenge. Good morning, josh. Good morning, simon. Yeah. You heard nick throw down that challenge. So, nick, i accept your challenge, and before we get to this, so three challenges of my own. How about right here, ebays ceo john donahoe, you are challenged. In cooper toup cupertino, apple jack white, playing shows this weekend here in san francisco. With that, my producer, justin soloman, will do the honors. Whoa good grief. Thats cold. Thank you, nick. Guys, back to you. Yeah, not a lot of ice, if i may. Some of you went through this. Not a lot of ice. Looked a bit like water to me. Ice bucket challenge. Well it it was, i think just didnt try to put as much ice. If it makes you feel better it wasnt a fell thi trash can, simon. I dont know if that equals it out. I almost put ton top of your head. It is warmer there. Perhaps it has melted. Josh, hoping you would be brad pitt. I kbguess we dont have word fr him . Nick along challenged brad pitt and we promised viewers one of the two of you would be up in the segment. Its you, obviously. Right. Josh, brad pitt and shaun white, only goes downward from here. Okay. Josh, just a reminder, who are the three you challenged there . Donahoe at ebay. The other two . Yeah. Donahoe, johnny aye in cupertino and mr. Jack white whose show im hoping to catch this weekend, guys. Hope you get a ticket. Nice to see you, josh. Get into the warm. Thank you. Josh lipton with the als ice bucket challenge. Great to have a summer dominated by the ice bucket challenge for charity rather than market trouble. Raising a lot of money. How kayla did it, challenged by jon fortt. If you were checking your twitter feed might have gotten a challenge of your own. I dont know if you saw it yesterday. Oh. Sara might have a bucket of cold water poured on her. I like it, a big bucket. And you thought were you going to get off easy, sara. Im going out to change, as did you. With that, take it away. Squawk alley, thanks. Good morning, just about 8 00 at uber headquarters in san francisco, california. 11 00 a. M. On wall street, and squawk alley is live. Good wednesday morning. Im kayla tausche. Carl quintanilla is off today, but joining us for the entire hour, henry blodgett, business insider. Thank you for having me. Jon fortt is here, as always. Were thoonkful for that. Apple, shares off highs after hitting an intraday record that being 100. 77 per share. Apple trading at 139. The Electronics Giant broke the 100 mark yesterday, the first time it happened since splitting 7 for 1 earlier this year. Apple last set an alltime