Transcripts For CNBC Squawk On The Street 20150904

Fed to hike. Tens around 2. 15 and oil is north of 46. Road map begins with the jobs number falling short of estimates and whether this changes the math for the fed in september. And disney flexes its promotional muscle. Force friday is upon us and star wars merchandise is already selling out. Also ahead, no news is good news, or no news is news. Twitters Board Meeting comes and goes without a ceo announcement. First up the ball is in the feds court. 173,000 nonforeign jobs developed in august. Thats below consensus. Marks the smallest gains in five months. Unemployment rate falls. 2. Thats close to a 7. 5 year low. We had some we mentioned the revisions. August tends to be revised up on average about 75,000. Again, the talk is where is that line for the fed . What would have been Strong Enough for them to hike, lacquer on the tape saying he didnt care about this number h. Hes ready to move. We knew that from the title of his speech. People will Start Talking about the fact that you mentioned august tends to be the most commonly revised month, but its also seasonally weak. A lot of notes are focusing on the averages. The sixmonth average still above 200, and then a high average for the entire year of 2014. Even though we are seeing the low end of estimates for the month of august, the averages still point to strong and very sustainable job growth. Yeah. And i think the context is the fed has to be dissuaded from raising rates. If the Unemployment Rate comes down to 5. 1 . I think 5 to 5. 2 is where they thought they would generate wage inflation, it might be Strong Enough to move. The other thing important to note is the fed members are focussed on market volatility. So if today becomes a day to the negative, that may be more important to the fed moving forward as it tries to determine which the volatility that we had recently meant. Was it just about china or is it a broader tantrum style to the fed tightening in two weeks. Although, certainly fischer would disagree saying we cant let the market control what were going. Greenspan saying talk about rates is essentially irrelevant if we dont get our fiscal spending house in this country in order. These true worldwide. They are on their own. That is Monetary Policy is the only thing we seem to be using here, particularly true of europe and japan. For more on the jobs report and the markets reaction, were joined by bob dole and scott brown, a chief economist with raymond james. Scott, as you are the economist, what is the conclusion . What are you telling people now . Well, certainly the nonforeign payroll number, even though it was right of expectations, there was a revision. That makes it about a wash. These numbers get revised. Youre seeing a relatively strong mace pace of growth. There are two factors that give hawks ammunition. One is the increase in average Hourly Earnings which was slightly ahead of expectations. You want to look at these with a grain of salt, however, theres a built of fuzz in the numbers. Still, we know the job market is improving, and really, the situation for the fed is theyre looking down the road 12, 18 months and seeing the job market tighten. Theres a lot less slack a year from now at the current pace. Theyre justified in raising rates. Whether that happens in september is an open question. If the markets are calm heading into that fed decision, they may be more inclined to raise rights. It seems likely theyre going to delay. Why would you delay . What would be from an economists standpoint, what would be the point in delaying . If you delay, presume blirks youre unable to get as many hikes in, potentially. Is that the reason why . No, no, not necessarily. Theyll still be on track to raise rates this year but they may want to wait and see if conditions settle down. Theres uncertainty going on now with china. If things were to really intensify there, if we saw a much bigger turmoil from the emerging economies, all else equal, that would make the fed a little more reluctant. They still have to base policy on the domestic economy. Thats the biggest factor. And we heard vice chair fischer say we have to focus on the u. S. And consider whats going on in the rest of the world but doing whats right for the u. S. Economy is doing whats right for the global economy. From that conversation with scott, it seems central to the decision to delay would be the idea that the markets will be less volatile and the world will be less uncertain in october or december or whenever is the next date. Is that true in your view . Yeah, i think that makes sense. If this were just about the u. S. Economy, the fed would have an easy decision in my view, and that is to raise rates. The question is how much are they going to Pay Attention to weakness and rioting in markets if thats still going on. I think at the end of the day, the fed will look at those labor numbers and Everything Else theyve been looking at and say our starting point is zero. Its not a low number. Its zero. Theyll move forward, and i dont think that will will be a bad nauz for stocks at all. Were reading about the risk Party Investments that may have made the correction deeper, and, of course, the latest of that was Lee Cooperman to come out and blame them. Thats important for people because when we were going through the market turmoil, the fear was it wasnt about china and it was about something more dramatic and where the fed might be going. If Lee Cooperman is right and its a symptom of the trading algorithms, does that make it more likely and safer to raise rates . I think thats probably a yes answer. Look, those technical and forced selling and mechanical programsing a gaited the decline, but i think china and widening credit spreads and weakish economic earnings and weak technicals all began the decline. Its the programs that accelerated the decline. What is your advice to investors, bob . My view is that weve done some technical damage to the market. The most of the decline is in the Rearview Mirror but were not going to v bottom and go back up. We need to heal. On weakness, i would be adding. I dont believe the bull market is over. The case of improvement in the equity market is dependent upon earnings, and earnings are dependent upon the Consumer Spending money. Would you agree with that on a broad statement, scott . I would say so. Youre still looking at an economy here thats relatively strong. I think the domestic economy is going to do quite well. In fact, even benefit from the softness in emerging economies. Youre seeing downward pressure on prices. A long weekend, have a good weekend. In the meantime, now that the jobs number is out, did you nail the number this week . We asked you to tweet us your p predictions. The prize is the t shirt. Also ahead the first reaction from the white house to the jobs number. Well talk with the president s Department Labor secretary. We got a lot of guesses in this neighborhood. Well see who managed to get it closest to the number and get it first. Oftentimes people outside the new york and San Francisco in recent months have tended to have a less aoptimistic view of the labor market. Its also, for many around the world, force friday. Hundreds of star wars toys and other items became available in stores after midnight. Its part of disneys push to promote Star Wars Episode seven, the force awakens. They expect 3 billion worth of star wars merchandise to be sold this year. Disney is down. They are negative this week, down about 16 in the last month but theyre still up a little bit greater than 8 this year. Everything is on sale from a 4,000 spaceship bed to a 200 chewbacca sleeping bag. Where can you get the sleeping bag . Im interested in that. Ill send you the link. Im disappointed you didnt come in as princess leia. Well call the green room. Twitter holds a Board Meeting yesterday and still no announcement about a permanent ceo. A deeper look inside the search as the stock continues to slump. On tuesday, a live interview with Warren Buffett. Thats at 11 30 after the Holiday Weekend. You might have thought with china closed, wed get a respite. Not the case. Dax 20 down from their highs. A lot more squawk box in a minute. Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . I take prilosec otc each morning for my frequent heartburn. Because it gives me. Zero heartburn prilosec otc. The number 1 doctorrecommended frequent heartburn medicine for 9 straight years. One pill each morning. 24 hours. Zero heartburn. Im a gas service my nrepresentative. N. Ive been with pg e nine years. As an employee of pg e you always put your best foot forward to provide reliable and safe service and be able to help the community. We always have the safety of our customers and the community in mind. My family is in oakland, my wifes family is in oakland so this is home to us. Being able to work in the community that i grew up in, customers feel like friends, neighbors and it makes it a little bit more special. Together, were building a better california. If youre just joining us, big global sell off and the jobs number at the low end of expectations at 173. The debate continues as to whether or not its Strong Enough to keep september on the table. Meanwhile, take a look at shares of twitter. They are down but just slightly in the premarket this morning. Theyre down about 21 year to date. But speculation building that a ceo announcement could be imminent. Joining us now on the phone, sun trust managing director bob peck. Its great to have you this morning. What should we make of the fact that we havent seen an announcement . Thanks for having me. As we said previously, i wouldnt expect an announcement yesterday or today. Theyll wait to get back from the vacation. Were estimating tuesday. As we said before, this structure, the most likely with jack being ceo, adam bane taking over globally. Can we write off the chance of a dark horse candidate . A lot of people as we mentioned yesterday, a lot of people in 2012 thought Ross Levinson was a shoe in but yahoo because carefully did not talk about the fact they were interviewing marissa meyer, how likely is it that theres a dark horse. We think they spoke to a lot of external and internal candidates. We think at the end of the day, its a complicated product and turn around situation. Having someone like jack who a inspirational and well respected is probably the most likely scenario here. But further complicated it, the fact that jack dorsey, who you expect to be ceo, is also running another company. A company thats likely to go public itself later this year. Does that company then get teed up for a sale in does that company then need to search for its own ceo . How does that situation shake out . Yes. Since we floated this idea over a month ago, weve spoken to a lot of investors about this. Were worried if this is the scenario, would they look negatively on twitter if jack was also the ceo of square. We dont think thats the case. We think its more about the execution in q 4 as they roll out new products which can hopefully jump start things. Bob, this isnt cocacola or mcdonalds. This isnt something that needs to be turned around in the sense of a traditional business. This is a technology company. In a day in another one has it has 1 million monthly users. Maybe they need great Product Innovations but theyve missed the boat and culturally their moment may have passed . One of the questions we get is have we ever seen a turn around where a platform as stalled. While its not a perfect analogy, we point to ebay. You saw when someone came in and the platform was sputtering. They did some product improvements and get that platform growing again. So we think with product emphasis from ef and jack, they can get this and target that mass market theyve missed so far. We talked about your upgrade a few days ago. Are you hearing from any clients . Are you still in that period where not a single client is seriously interested in hearing why they should buy . Theres been a lot of skepticism from investors. We like that. We find when sentiment shifts too far one way or another, we like that in our recommendations. We dont think much expectation has been built into this. Once they name the ceo and set the base, they start to roll out new products that we detail in our notes, you can see how they get lift in the platform. We think that will spark interest again. Just one quick last question from left field. Unlike other content flplatform theres a cultural problem with a lot of hate. A lot of people cant be bothered to have it in their lives. Unlike other ways of distributing content, theyre defined by that. Is that a problem as a guy to looks at numbers . What i think is interesting is its mostly a content consumption platform. Only 10 of the users create content. We think its one of the best news broadcast platforms out there for all sorts of people, whether its people like yourselves or the individuals. We look for more of that direct content to be created and sparking more engagement. Its rare to hear an analyst say i was worried id be right. Well learn in a few days if you were. Thanks for coming. Thank you. 12 minutes until we open. Art cashin will join us next on the market and the jobs report. As we get ready to wrap up another volatile week, and this could be a volatile session. A lot of the fall was predicted prior to the employment report. More squawk on the street right ahead. Here at the Td Ameritrade trader group, they work all the time. Sup jj . Working hard . Working 24 7 on mobile trader, rated 1 trading app in the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of the other competitors do in desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivative pricing model, honey . For all the confidence you need. Td ameritrade. You got this. dorothy toto, ive a feeling were not in kansas anymore. morpheus after this, there is no turning back. spock history is replete with turning points. kevin wow, this is great. commentator where fantasy becomes reality penguin 1 where are we going . penguin 2 the future, boys. The glorious future. vo at t and directv are now one bringing your television and wireless together and taking entertainment to places youd never imagine. rick louis, i think this is the beginning of a beautiful friendship. Big sell off in place in about nine minutes when the opening bell rings. Were about nine minutes before the bell. Lets bring in art cashin. Well talk about not just the jobs number that we got this morning but lacquer saying its time in his words, is that what this is about . No. The title of the speech was the argument against delay, or against further delay. So you knew where he was coming from. I think a couple of things are going on. Number one as to the number that 5. 1 number is going to be a problem for the fed. Unemployment rates . Yes. Thats going to be a problem for the fed, because they will have to every word from the fed from now on will be golden because now this puts them in the position to actually have to raise rates. And while you guys know im against that, i think that puts the owness on them, and youre going to have to listen, because they have to talk themselves if not out of it, they have to give themselves wiggle room, because at 5. 1, i think youre going to hear, certainly, all the hawks its a done deal. The interesting thing is some stock Market Participants like yourself dont believe theyre going to hike, and yet, the writing is on the wall. And again, i ask what happens when this huge cohort of people go, thaeyre really going to pul the trigger . Thats why were going to watch what the fed said. You still dont think theyll do it. You think theyll talk themselves out of it. I think with whats going on in the world markets, the u. S. Earlier, what is this about. Its about tokyo. Tokyo decided to as long as shanghai is closed, well be the bad guy in china. Dont 16 from recent levels. But they continue to stand by their stance. I know, but i will tell you this. While all eyes are a shanghai, im seeing things disassemble in tokyo and in asia in general, particularly the e Early Morning markets. I think were heading into more volatility. If im on the fed and there are rumors that the g 20 today is preparing to communicate to kind of caution the fed about hiking rate. You have the imf twice, ma larr summers, tons of people telling them no. And i think routers has a source that says they will not include a warning to the fed. Thank you. China is what i saw. Okay. But at any rate, you know, my argument has been and remains that if im on the fed, and i fly in the case of all of that, despite the numbers, and something untorrid happens, im pretty much losing all my cent. How should we interpret whats happening in the bond market . We saw numbers drop but we saw yields on the twoyear spike, and the yield on the tenyear rose, if only a couple of basis points. The tenyear was muted, and with all due respect to the twoyear, thats the knee jerk reaction they get every time. I dont think the twoyear is offended. I think they get very protective, and theyre in the hot spot. They would be the one to suffer the most. So i would suggest to the viewers to pay very careful attention to everything that the fed says from now on, because if they dont do something to give themselves wiggle room, the expectation will grow to almost a certainty that theyll have to move. We still have sentiment to go and retail sales and cpi before the meeting. Dont go far. Stand over there. Art cashin. The opening bell in four and a half minutes. Dont go away. My name is rene guerrero. Im a senior Field Technician for pg e here in san jose. Pg e is using new technology to improve our system, replacing pipelines throughout the city of san jose, to provide safe and reliable services. Raising a family here in the city of san jose has been a wonderful experience. My oldest son now works for pg e. When i do get a chance, an opportunity to work with him, its always a pleasure. I love my job and i care about the work i do. I know how hard our crews work for our customers. I want them to know that they do have a safe and reliable system. Together, were building a better california. Im watson. And today hundreds of companies are putting me to work. Im teaching watson to help your vet speak dog. Youre a dog, right . Im teaching watson to help you make healthy choices. Im teaching watson to help design a vacation around your personality. Dont judge. Im teaching watson to answer endless questions. How big is infinity . Where do babies come from . Why cant i have chocolate for breakfast . Im watson and im ready to work with you. Youre watching squawk on the street live from the Financial Capital of the world. The opening bell in 90 seconds as we put this week to bed. Obviously liquidity expected to be thin. Friday before a Holiday Weekend here in the states. But the futures have not been encouraging all morning long. Even prior to the jobs number missing the consensus expectations, jeregermany was d 2 . Factory orders for july were a miss, but few people are able to connect that data with the magnitude of the sell off around the world. I think an important data point within the factory orders is the fact theres a 9. 5 decline in factory orders from overseas. The way china can affect the Global Market is by slowing in europe. Thats what were seeing. I think the markets are becoming much more focussed on what people are saying. When the ecb yesterday entered that there might be further kwe, you expected a bounce. And there was no follow through today to asia at all. Lets get to the opening bell. Get a look at the s p at the bottom of your screen. At the big board, Southwest Airport group celebrating a 15th anniversary. At the nasdaq, the womens tennis association. And what a week its been for the u. S. Open. Players trying to play in this heat and humidity. Well watch that. Obviously breadth is no good. Its amazing. All this week the breadth screen, the s p has been almost uniformly red or green. Its been a uniformly negative sentiment or short covering. Thats the way a lot of people are describing bounce back. Low in quality but very clear in intent. Just about a half dozen components in the green, and well wait for the others to give us some indications. We will be watching netflix today. The biggest loser on the s p down 4 . I think this is six or seven Straight Days down for netflix, can which has become somewhat of an atm for people who need liquidity, selling their gain s gainers. Officially for the year, its a 100 gainer but remember when it was well above that level informal. Lets look at some of the opening quotes in. Gap is open. Comp sales came through last night. Down 2 . Banana republican not doing terribly well. Old navy continues to be a stand out. Its a theme we keep hearing from gap. They put a note out saying we still believe in the Management Changes that are going to come through at the gap. Theyre on the table, but its becoming more speculative because the time for the recovery and the degree of merchandise that isnt selling, and, therefore has to be discounted. Its suggesting 20 up side from here, a 40 price target. Opening down 1. 9 . Were opening slow today, it would appear. Yeah. My data on fax is going slow as well. We should look at blackberry. 425 million, blackberry is buying good technologies. A very popular corporate app, an eco system that allows the migration, ironically, from blackberry to this bring your own device trend. It allows you to securely access your corporate email, your corporate desk top through an iphone or android device. Blackberry and Good Technology were rivals previously, blackberry issuing fact checks on things good was saying about how secure the system was and how popular the migration tools were, interesting to see them combining. You saw blackberry shares up by about 2. 5 . Your point this morning on twitter was that being bought in an m a transaction is the new going public to some degree. They have been gone on file to go file, Good Technology. At the time they filed the valuation was supposed to be more than a billion. That seems like an adjusted expectation. Market conditions, hasnt happened to the level some expected at this point. Theres still a lot of very big ipos out there. These are companies where they would be very huge m a transactions, so theres still demand for those big defensible businesses. And, you know, its hard to get capital of that proportion elsewhere than the ipo market. Dow, all the dow components are in the red. I feel like a broken record saying that but once again its caterpillar thats the lagger. Followed by goldman and cisco. Were in an environment that does not favor large multinationals. They cut the price target there. This is caterpillar, from 89 to 77. That was quite a big cut. You might argue after the horse has bolted but the stock trading down at 1. 9 . A lot of china focussed countries around the world are in question. There was a big question a sell recommendation on the owner of gucci. Interestingly, one of the few things that are working are domestic retailers dollar tree is biggest gainer. Kohls, Dollar General and motorola, the few s p gainers in the green. The jobs number, that 173,000 number. Joining us is chris liew. As it seems every month, were back to a discussion a record 94 Million People not in the force. Is that a legit mat die gnattic to judge the number. This is the 66th month of consecutive job growth. Thats the longest streak in history. 173,000 jobs created. We need to do more and one of the areas we need to do more is on labor force participation. I would caution about reading too much into this rate. When we compare where the labor force in this country is right now versus 40 years ago, what were looking at is a different demographic. Do you believe that wages are going to drive some people who werent looking to start to look or who are only halfway looking, look more seriously. Wages are the Unfinished Business of this recovery. While weve created about 13 million jobs, wage growth is not what we think it should be. If you go back and look at since the late 1970s, worker productivity has basically doubled during that period of time, and wages havent grown at all. Thats one of the reasons were pushing for an increase in the minimum wage and overalling overtime protections in this country right now. We went into this number with the understanding that august tends to be seasonally wac and tends to be revised later higher on. Thats why we never look at one month. We tend to look at longer trends. When you look at the job growth over the last three months, weve averaged about 221,000 jobs per month. But august is a difficult month in general. People are going back to school and obviously depending on when local School Districts start, you might get a little bit of fluctuation and bumps in the data. Many people will say its obvious that mining activity should have dropped. Weve lost 90,000 in jobs in mining since the beginning of the year. What is happening in manufacturing . Last month it declined by 17,000. Your own department points out that actually, manufacturing employment for the year is now basically static. Is that about exports being suppressed by the dollar . Is it an external story or is it something more fundamental about the internals of this economy . Im not sure i would draw too much from one month of data, but youre right, whether its manufacturing or construction, theres clearly much more we should do, and we have a solution. Thats passing a longterm infrastructure bill that produces the kinds of jobs in both those sectors. Those are good jobs that get americans back to work. Thats one thing congress should think about doing when they come back to work next week. Why can the economy not generate those types of jobs on its own . We actually have had a positive job growth, important job growth in a lot of areas like professional business services, like health care, like education. But theyre obviously longerterm economic that we deal with, but as i said, we have a simple solution for how we deal with it. Thats passing a longterm infrastructure bill. There seems to be some deparity in the job gains across the age groups. A lot of people are looking into the strong gains in the 20 to 4 24yearold age group and contrasting that with a steep decline for those age 55 and over, now asking questions about what this could do to people closer to retirement. Im starting to sound like a broken record. I wouldnt read too much into one month long growth. When you look at the longer trend, there has been a significant drop in unemployment. But youre right. We obviously need to do more in terms of the 20 to 24 age range. We need to do much more and folks that are at the later parts of their careers. Thats one of the reasons why the department of labor is focussed on skills and job training and ensuring that everybody who wants a chance to work can work. Department secretary, is 5. 1 as an Unemployment Rate full employment . Well, look, im not an economist. I will say this. There are 8 million Unemployed People in this country right now. There are about 6 Million People working parttime who want to work fulltime. So i think about those 15 Million People who want to wor,s and i cant way were at full employment. Well be focussed on making sure those folks have a chance to work. Do we have an idea of full employment given this environment . Im not an economist. Nice. I dont blame you. Mr. Lew, thank you for much. Dow is down 206. Most of the components in the red. Bob is on the floor. Reporter the important thing is i want to point out, lets put up the s p futures. We were down about 16 points going into the jobs report at 8 30. Were down 21 on the s p right now. This is the futures. What you want to see here is we are a little bit below the 8 30 jobs report, but not that much. Weve lost four or five points. The key is weve been weak sliding all night long. I think the important thing here is everything is down about 1 . If you look at the sectors here, tech is weak. Consumer discretionary materials, everything is down 1. 3 . Dow leaders, across the board, some of the big Global Industrial names but also health care, global materials like dupont, Global Industrial and even financial names like goldman, my point is sectorwise and name wise, a lot of the market is down 1. 2, 1. 3, 1. 4 right now. I think the key is lets move this forward and look at next week. Two things stand out about whats going to be important in the next week. One, the China Economic data. If you put up the screen, well get trade and retail sales and ppi as well as the cpi next week. And after that, were going to get analyst krchconferences. China is going to be big. If this is smooth in china, china might be a little bit calmer. If we get craziness, thats another issue completely different for that. The second is Analyst Conference start next week. Theres a season to that, and big ones are coming up. Well get updates on earnings situation. Next week citi groups global tech is coming. This is the first time they are meeting to talk about upcoming q 3 conference situation. The week after, barclays is having a financial update. This is the first time theyve been talking act whats going on in q 3, and citi is the week after in boston, i believe. And update on how were looking in q 3 for the big Global Industrial names. Emphasis will be on the earning situation. The numbers were supposed to be improve gt in ting in the third. That hasnt happening. I believe thats the reason for the fluttering in the stock market. We were supposed to be in positive territory a couple of months ago. Part of the problem, of course, is whats going on in energy. No improvement. We were down 50 in earnings and energy in q 2 and its even worse in q 3. Thats a major problem. Energy is about 10 of the s p 500. Industrials down 7 . Theres this problem with the Global Industrial names. Your united techs and ge, weak on the global slow down story. Heres a major problem. Financials are supposed to help save the s p in the second half of the year. Because theyre supposed to have better earnings. Up 9 . They have not taken down the earnings estimates in financials at all, and i think this could be potentially a problem, because we have not seen the real Interest Rate rise that was supposed to help them out. Thats a little bit of an issue right now. I think in the coming weeks, and thats why i said the upcoming financial conference is very important. Were going to find out exactly where were going in the third quarter. Lots coming on in the next two weeks and fortunately its much more fundamentally based. Were off the lows right now, down 189. We were down a little more than 200 a few minutes ago. Back to you. Thanks so much. Important to note the conferences which happened before a lot of these companies quiet periods began. Very key for a lot of companies presenting. Lets go to the bond pits. Rick santelli. Reporter its kind of like the markets take two on the fed. Im talking about the twoyear note. Many are jumping the conclusion that the twoyear is giving us the answer for a week from this thursday. At least the thursday coming up. Fed day. Now, lets look at the long end first. Twoday of 30s. There is no doubt that the 30s has been the kind of steepening element meaning the most pressure to downside. Today it was kind of reverting. It gave back, contrast that to the twoyear twoday and you see what im talking about. Look at this chart since august 1st. Weve been up here a lot. I could take this chart back to 2011 because we havent had a settlement above 70. 2 basis point. Weve been knocking on the door but we havent gone through, and i would put that last fridays sentiment was 72 basis points for twos. It was 291 for 30s. Thats higher in yield. If we want to look at the yield curve, lets look at tens minus twos in the low 1. 40s. I cant look at this and not see flattening. Thats more with fed policy. Its been a twoday trade. Look at our 2s versus the european 2s. Its the weirdest trade since 2006. It wants to trade a differentable of 100. Theyre close to minus 25. Were close to 75. That is snomething that augers. When we set the net difference above 100, theres not enough time. Lets look at the leftovers of more lighter fluid in the baa zu ka. The dax is under pressure and the euro versus the dollar hasnt rebounded since the beginning of the month. You can see how much theyve taken out. Have the economies or the fundamentals changed . No. It comes back to draug gi and his statement. Lets check on oil prices. Jackie is live. Reporter good morning. Well, oil prices are down 0. 60 on wti trading at 46 . 17 at this point. The major factors, a little bit of a stronger dollar. Also the equities market has been important. And were going to get rig counts out at 1 00 p. M. Traders saying they may be exiting positions going into the Holiday Weekend. Thats another factor. In terms of the jobs report, didnt have an impact on crude prices but if it continues to have an impact on equities, then we can see a trickle down effect here. I want to talk about gas prices. 2. 42 heading into the long weekend. Down from 2. 64 just a month ago. Consumers getting a bit of a break. Traders are telling me buyer beware. If prices spike, 50 or above, it will take gasoline with it. The key technical level to watch to the downside is 45. 60. Thank you very much. When we come back, former fed governor, Randy Kroszner. The dow is down 211. It took Serena Williams years to master the two handed backhand. But only one shot to master the chase mobile app. Technology designed for you. So you can easily master the way you bank. 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That was the former greek Prime Minister speaking to cnbc europe earlier today. They are joined by central bankers at the g 20 meetings in turkey. We are joined live. Too steve. We do we know if theyll ask the fed not to raise rates or single out china for its currency moves . Reporter yeah. I think we do. The answer is no on both counts. Ive been to enough of these meetin meetings, i remember the one in moscow when everyone was worried about the japanese, nobody named japan. The rhetoric beforehand community equal the communication. Weve seeing comments including that financial leaders will carefully communicate monetary things. Be ware theres a lot of ramifications globally, and also the key point youre raising will refrain and resist all forms of protectionism. Thats anonymous. Thats not talking about a chinese. I had it from my own sources that even though theres great concerns about the chineschinest the japanese and americans have wanted to know whats going on and theyre on a path to create a market economy. I was told there will be a nod to the recent market volatility and that can only be pointed at one nation. I think most of the action comes in the face to face conversations. I spoke earlier on, to the ocd secretary chairman. He said were robust in our communication. We talk in a robust manner as wale. Although were not going to see it in the communication, dont expect to see it at all. They will be talking about it, and they have been talking about it over the two days. Steve, thank you. Quite a weekend in ankara thanks to you. When we come back, well talk jobs, the fed, and rates with Randy Kroszner. Two streetlights. The only difference that little blue thingy. You see it . Thats a sensor. Using ge software, the light can react to its environment getting brighter only when its needed. In a night, it saves a little energy. But, in a year it saves a lot. And the other street . Its been Burning Energy all night. For frank. Franks a cat. Now, two things that are exactly the same, have never been more different. Ge software. Get connected. Get insights. Get optimized. This just in 50 million customers data was not compromised this morning in a Security Breach that didnt happen. Wall street. Not rattled. At all. No. Not at all. Not at all. I mean, look at the day. Sir. Sir. What went right . What went right . Everything. Thank you. With threat intelligence, behavioral analytics, and 6000 experts, ibm security will help keep you out of the news. My dads company wasnt hacked today. Cool. Welcome back. Im Carl Quintanilla with simon hobbs and kayla tow shi. Take a look at the markets. Were down 254. The jobs number at 173,000. The low end of expectations. Oil down 0. 69. Close to the lows of the session. Our road map heading into the weekend, the job report coming in below consensus at the headline level. But june and july payrolls are revised higher. Well work out what it means for the markets and the fed in two weeks. Plus after rallying for the past couple of weeks, oil taking a leg lower. The king saudi arabia arrives at the white house. And its force friday. How does disney stand to bene t benefit . Well have much more on that. And coming up later, Randy Kroszner will join us to talk about the jobs number this morning. What it means in terms of a rate hike. Will it happen this month . Well talk more about that. Lets dig deeper into the employment report. Steve liesman is at hq having pored over the situation in great detail. And also the response to the payroll number. Is it enough for the fed to hike rates in 13 days. Ubs, pnc,back of tokyo, mitsubis mitsubishi, all saying fed will headache in september. One says october is also going to be a live meeting and credit swiss maintaining their call for december. Heres the numbers everybody is squawking about or talking about. Nonforeign payroll up 173. 50,000 less than expected. August is a number thats revised higher. June and july adding 23,000. Unemployment rates sinking into the middle feds full employment range. Thats a big factor. Average hourly wages up a tick better than expected. Labor force participation stays the same at 62. 6 . Heres what the fed president said right after the number came out. Id call this a pretty much right now the fairway, good, sort of employment report, and a i predicted, it didnt change the picture for Monetary Policy. Either the fed likes or lacker where accidendissent. One saying for the feds game, the delay game has run out. Another one says like tom brady, the fed will now say ready, set hierks. And capital, it will look a little odd to be revising its forecasts for gdp growth up and the Unemployment Rate down in september and then still not beginning to normalize Monetary Policy. Want to show you the jobs. Health care up 40,000. L leisure and hospitality up. Government up. And retail down a bit from where its been but strong at up 11,000. My take on the fed. It either takes a rate hike off the table for several months in september or it goes and hikes rate. Theres little or nothing to be gained by a delay of several months. It needs to be removed if theres any benefit. But theres a major reversal of where the fed chair has said in the past when she last spoke in july that the fed needs to go. Back to you guys. Thanks so much. Steve liesman, great analysis of what is a complicated report. Lets get more reaction to that jobs number. Lets bring in chief economist from mess row financial, and jason kelly. Walk us through exactly why august doesnt give us maybe an exactly clear picture of the state of employment here. Since 2010 weve missed this number on the downside by quite a large margin, and it tends to be one of the most revised months of the year, and so its a whole flurry of factors. One of them is when do schools start and when they take the survey and they often miss the Government Employment in the first cut. Thats whats unusual. We had 175. You got 173. Thats fluke and luck that we got it. The bureau of labor statistics has gotten better. The miss last year should be 50,000 last year. Thats what we baked in. The private with schools showing up, best hiring of teachers in two years makes me wonder a little bit, theres enough in this report for everyone at the fed to have a heated debate in a not very hot economy when it comes to inflation in terms of do we have slack out there or not . Year over year wage gain stagnant. Hiring us up but it moderated from the pace weve seen and weve seen minimum wages at the state and local level compounding. Theres a lot there. It doesnt matter if were primed for a 50,000 revision or a 75,000 revision. We wont get that no matter which direction it goes until after the feds meeting. Whats going to happen in the next 13 days . I agree that we should not pay too much attention to one blip in the payroll numbers. It makes it a generally strong report. To me the most important thing is the Unemployment Rate is now down to 5. 1 . In the last year, the number of workers has grown three times as fast as the labor force. And that is almost, to me, the definition of a tightening labor market. I think it is past time. But also interestingly, i think that the fed will seriously think about september. I think they probably will raise rates, because to not raise rates now would be to go back on really everything theyve been saying about how theyre data dependent. It suggests a tightening labor market so they should move. Are you projecting your own views . Youve done everything except say they know nothing. No. Obviously i think they should have moved before. And theyre trying to do this is their view of the economy. I realize i might be projecting my own views but listening to the debate and Janet Yellens press conceferences, they take e data and the credibility seriously. To me the biggest problem is if they get scared by market volatility out of looking at the Economic Data the way theyre supposed to, i hope im right in seeing that they will actually raise rates in september. Its not just about market volatility. Its about the fact that the world bank, the imf, former treasury secretaries have all asked the fed to wait. To stay on the sidelines. The larger issue here is i think, david, it is hard. Were not voting so we dont get to decide what the fed does. You have to think about what are they going to see when they go into the meeting. Data is the forecast. The staff is going to give them downside nar scenarios that will show a rising Unemployment Rate with inflation. The Downside Risk scenarios, thats what theyre going to open the meeting with. That along with the volatility that they think because of technical challenge of raising rates is different. That doesnt change if they wait another month. But the the market volatility calms down a bit. It is an issue. Its not because the tail is wagging the dog here. Its not just the market volatility alone. Its that they know the move itself will be volatile, and they dont know the outcome. It doesnt change it. But why does everybody think things are going to be better in a month . Exactly. The markets are deteriora deteriorating. If they dont move now, itll be worse in two months. Or the markets could calm down. And the fed will have more actual hard data that maybe says the u. S. Economy has a lot of resilience. David, one minute. I want to introduce the other concept here. I think its important to market. This idea that there is a debate to be had and that they will convince each other to go, provided they can communicate that this is the only rate rise this year, and all the dots come down to indicate that its one rate rise in 2015, and thats the quid pro quo and then theyll go. Your reaction and then what you were going to say. I dont think theyll do that. I think the long term rates of the federal fund rate will come down but i think the optimal strategy is move in september, skip october. Move in december. To me the key thing is that this economy cannot grow that fast because of labor force growth. I think what the numbers have proven is even as unemployment comes down, labor force does not go up. This is the point that if the Unemployment Rate is between 5 to 5. 2, it becomes wage inflationary, and were crossing that threshold now. Its not just wage look, if you raise rates, you dont settle the economy. This is nonlinear. If we dont raise rates, were going to be stuck in stagnation thats haunted japan for 20 years. Its wrong to keep rates at this level at a basically healthy economy. Settlement, decembptember, d doesnt matter. This second for the second and third rate hike will be higher than left off. We are focusing on lift off. Its a slow glide. I think theres going to be a long pause here, and this is something they missed the mark on inflation for a long time. Whatever we want to argue, they failed. I sure hope in a months time were arguing about the second hike and not the first one. I would love to be there to. I agree with you. That would be a wonderful place to be. Weve been wondering when the first one would happen for nine years. At some point well get to the second one. For now, we appreciate your time today. When we come back, oil prices seeing a huge rebound over the last two weeks, at least. West texas and brent both up double digits. And be sure to tune in tuesday, becky will have a live interview with Warren Buffett, 11 30 eastern time 234678. Want bladder leak underwear that moves like you do . Try always discreet underwear and wiggle, giggle, swerve and curve. With soft dual leak guard barriers and a discreet fit that hugs your curves. So bladder leaks can feel like no big deal. Get your free pair and valuable coupons at always discreet. Com i research. I dig. And dig some trader more. Search. Because, for me, the challenge of the search. Is almost as exciting as the thrill of the find. announcer at scottrade, we share your passion for trading. Thats why we rebuilt scottrade elite from the ground up including a proprietary momentum indicator that makes researching sectors and Industries Even easier. Because at scottrade, our passion is to power yours. Stocks continue to fall. Were down 249 points on the dow. Energy with it. Lets check on crude oil, trading at 46. Down 0. 29 on the session overall. Lets bring in an Energy Analyst at the nasdaq. Good morning. You say we could go below 30 again. Its not if weve bottomed but how long do we stay below 55 blsh 60. Why do you say that . Sure. Thats the critical level where still too much supply will come to market at that price point. So if prices stay at this level for a long period of time, youre really going to have a deferral of a rebalancing of the oversupply situation thats driven this bear market that weve had for the past 16 months. Whats your feeling . How low will we be . I think through the end of next year. I think we dont see a recovery until 2017 because theres still too much supply coming to market and were not saying that pare back in a sufficient capacity. In about an hours time, the saudi king is arriving at the white house. Theyll talk about iran around the table with president obama today, but theres the crucial question as to what is saudis are going to do. It was recorded they were cutting prices in asia against a backdrop of costs, theres some talk they might do a deal to cut costs down the line. What do you make of it . Sure, well, saudi arabia holds the cards in the situation and everyone acknowledges that but theyve made their position clear to the market, so we know what to expect. Theyre not going so shoulder production cutbacks alone. The real wild card is what russia does, and theyre probably the one country where if they said, we are willing to do a joint production cutback with you, saudi arabia could be inse have incentive to cut. Is it game on . We heard russian ministers on the air this morning saying production cutbacks are not in the cards. Russia is really the wild card. I think it depends on how long ais Oil Prices Stay low. Its possible. We watch oil prices. Some people believe at these prices it is profitable for some of the secondary players. Is that true . That is true. In core regions thats the case, and the other thing to consider is that the rig count data isnt that much of a clear indicator as to what u. S. Production does because rigs are getting more prolific, or rigs themselves are getting more efficient. Even fallback in the rigs online doesnt necessarily cause a sufficient cut in production. There was talk about how the oil majors had a large proportion of the rigs in this country and are not pressured because they can cross subsidize between the operations. Theyre not pressured by the low cost of oil to cut supply in the same way, arguably, as the fracking specialist might be. Sure. That could be the case as well. And really what were seeing is that the nonprolific rigs are the ones that are coming offline. So, again, its not so much of an indicator as so where production is going to go when you look at overall u. S. Production. Were still comfortably above 9 million. In summary, do you think well go higher or lower into the year snend. I think well go lower into year end. Thank you. Thank you so much. Thank you. Coming up, former fed governor, Randy Kroszner joins us with his take on the jobs number. Is a september rate hike still on the table . Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . Having a perfectly nice day, when out of nowhere a pickup truck slams into your brand new car. One second it wasnt there and the next second. Boom, you had your first accident. Now you have to make your first claim. So you talk to your Insurance Company and. Boom, youre blindsided for a second time. They wont give you enough money to replace your brand new car. Dont those people know youre already shaken up . Liberty mutuals new car replacement will pay for the entire value of your car, plus depreciation. Call and for drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch to Liberty Mutual insurance and you could save up to 509. Call Liberty Mutual for a free quote today at see Car Insurance in a whole new light. Liberty mutual insurance. The u. S. Unemployment rate falling to 5. 1 in august. Thats a sevenyear low. What does it mean in the fed and rates . Lets talk to Randy Kroszner. Randy, its great to have you back. Lacqu lacker says its down the middle of the fairway. Is that how you saw today . I think thats right. Its going to be its going to give enough support for people who say the economy is coming back. Lets go ahead. And its also going to raise enough questions for the people who say oh, wed better wait that theyre going to say we need to wait. Its going to be an interesting discussion in a couple weeks. Yeah. We just had a discussion with d diane swank who made the point. Its not just about the presentation of recent data but the forecasts including the Downside Risks to a slow down in china. How dark is that view and how much does it move the table . Its something thats going to be very important in the discussions, because it is all about the forecasts. Stan fischer was very clear at the jackson Hall Meetings that, for example, about inflation. Its not where inflation has been. Its where its going. Some people are going to say, well, these clouds are really darkening in china, and thats going to have thats likely to lead to higher dollar, lower import prices, downward pressure on inflation, and so were going to be continued to overshoot so we need to wait. How that plays out is going to have an Important Role in the discussion. Randy, what is your reading of the degree to which they feel that the credibility of the institution is on the line and they need to be dissuaded from hiking rates, the benchmark position is rates need to go highier, its been to long, and an idea that they might compromise to say lets do a rate hike this month in september. It will move the markets but lets also communicate that theres no more before the end of the year. Lets bring the dot estimates down to signal as clearly as we can that its just one and go. So i think theyre unlikely to make a particular commitment going forward, but i think they are going to make it clear if they move, its going to be a gentle pathway up, and i think the credibility argument can be made both ways. One way is that weve said were going to get moving, and theres always going to be some excuse. Theres always going to be some volatility or some number thats not good enough. We need to get on with it. 25 basis points is not going to kill the economy. On the other side, what if inflation goes to deflation territory . Then they might have to reverse. That could impact the credibility. I think theyll make both sides of the argument. How many seasoned stock market professionals dont think theyre going to go, and therefore, a large portion of market would be surprised if they went in september. Will the fed say, look, weve been clear, were data dependent. The dependeata says we have to. If they feel they need to go, they will. Theyll put up with the shortterm volatility. I think the arguments are going to be more in the path going forward, how can they convey that this is a gentle path going forward, and does it make sense to move now or to wait a little bit to mike sure that china is not in a much worse situation that be we think. If were not going to have a deflationary spiral and that we can go ahead. Randy, this is a conversation thats been had in economic circles for years but today ben white says the fed is facing an electiondefining decision. It might be hyperbole, but what do you see as the various outcomes if it goes well or poorly . So i think the fed is going to be making a decision independent of the political cycle. I think theyre trying to decide if theres enough strength and they have enough confidence in the forecast for inflation that theyre going to get to their goal. I think whether its september, december, or early next year, the political cycle isnt going to matter for that. But certainly, if the economy gets on a good trek and we get through the 25 basis points and come back, thats going to be have a big impact on the debates. Also, if the fed moves and the economy starts to move down, thats going to have a very impact also. It really will dependent on how the economy plays out. I think the 25 basis points in and of itself is not going to be the defining factor. Randy, in the terms of the market volatility that weve seen, ever since china made their move, weve been on the lookout for how it might impact consumer behavior. Do you believe that once Michigan Sentiment comes out or we get retail sales, all this is going to come home to roost on the balance sheet, for instance . I think its a little bit too early to tell. Theres virtually no direct exposure of any u. S. Households to china, because its difficult to get into china. So certainly that could affect peoples confidence in general, but i think most people are thinking well, thats something thats sort of outside of whats hitting me. What may be hitting me is the volatility in the u. S. Markets. If the u. S. Markets respond, that may have an impact on their spending behavior. My hunch is its a little too early to have that impact and thats going to be the issue around the fed table is do we need to wait to see what the impact is or can we feel confident enough, this is isolated, we just need to get on with it . All right. Randy, our thanks to you ahead of the Holiday Weekend. Thank you so much for joining us to talk about the economy and jobs. Straight ahead on the program, markets deeply in the red, as you can see. One of the major reasons for that is whats happening in emerging markets described as a situation of crisis proportions overnight by the institute of international finance. Well talk about that next on cnbc. Good morning, everyone. Here is your news update at this hour. A gay couple walking out with a major license in kentucky hours after a defiant county clerk yesterday was taken to jail for refusing to license same sex marriages. The clerk siting Gods Authority as the reason to turn away couple. Her husband says she wont resign. Thousands are expected in houston for the funeral of darren goforth. He was gunned down. A man was charged with the crime but the moteive remains unknown. A new york city teacher is a trouble after allegedly flying a drone at the u. S. Open. It crashed into an empty set of seats. Hes a teacher that faces charges of Reckless Endangerment and operating a drone outside a prescribed area. And if egg prices go up, you may want to blame mcdonalds, their all day breakfast. No comment from mcdonalds at this point. Thats the cnbc news update at this hour. Lets get back to squawk on the street. Were doing a nice job of cutting the losses here. Currently down 190 points on the dow. Stocks in the red after the u. S. Added 173,000 jobs in the month of august. More forimportantly, the Unemployment Rate came down, which leads many people to think the feds will hike rates. Welcome to the show, paul. Thank you. Youre fairly confident here on a number of fronts. You think this is just a correction within a continuing bull market and importantly, that the china concerns are overdone . Thats correct. So where do you think the market will go some. Well, this market, were not calling the bottom here, certainly, and we believe that the correction will eventually fix itself through an evolutionary process, but that evolutionary process depends upon sentiment recovering on the back, lets call it, of improvement in the things that the market is most concerned about, so, for instance, next week well have a couple of interesting readings from china on industrial production, and retail sales. Well also have a very important fed meeting on the week of the 15th, and those instances of data, those will be new data points for the market to be reassured that the fed is not going to move too quickly for the market and the economy and the chinese economy is not heading for a hard land snchlgt. How do you explain the magnitude thof the decline in t markets . Someone said it has a lot to do with the algorithms that people are using. That means it triggers selling and people begin to trigger selling at the same point. Is that what went on rather than something for major and fundamental to scare the markets . Well, we do not believe, lets start with the part that i think is the easiest to see. We do not believe that this is a fundamental change in either the u. S. Economy or in the global economy. As to the algorithmic trading, weve seen this happen before, and in addition, you have to look back several months to see the breadth in markets getting actually a little bit worse as we progressed into the summer. So you head into a period with low volume, with volatility low, and you end up with some, lets say, breadth thats not been very good for some time, and all it takes to a couple of data points like a devaluation and a weak pmi number from china for people to Start Connecting dots to say theres a crisis in emerging markets. One of the great things about living in america, is you can ignore what the rest of the world does for a long time. Its a great place to live as a result, but at some point, it matters. To this question of emerging markets, the institute of international finance, which is the trade body for the banks, suggested the fact that the emerging market stocks are now down 40 from their highs in april, and that the currencies have reacted so badly, is yarks quo quote, a situation of crisis proportions. They say if the fed delays the rate hike in september, it will only offer short term relief. Can these parts of the world implode in asset prices and we still sail on in. Well, the Economic Growth in emerging marketings, its certainly going to be 4 or better this year. The selloff in markets could easily be related to investors needing to make changes in their fundamental views about where im going to put the money with the Federal Reserve is starting to raise Interest Rates. The fed raising rates is a big deal for emerging markets and the timing and the pace as indicated by the first rate hike is an important milestone for all of Global Markets including emerging markets to overcome in order for investors around the world to feel like yes, there will be times it will be rough, but it will be okay in the end because the growth is still there. Paul, in more short term, the concern about mutual funds, level of cash, and the amount of people that might be calling in to redeem some mutual fund holdings, weigh as a concern for the markets, especially in a thin trading environment like were in today. How much do you think about that . Thats something we think about. We think about other market sort of constructs. The algorithmic trading, for example, that could aggravate the current worries. When youre already worried and you have something mathematical like that, or something related to cash, that could actually be dangerous for worsening that sentiment than in an environment like this, yes, you could see further down trends, and this is going to be the finding the bottom, is going to be an evolutionary process where for a time, technical factors will contribute and aggravate on the downside, but eventually, i think people will come back to focus on the fundamentals which are not as bad as the selloff in the markets would indicate. In a word, will we be higher or lower by the end of the year, do you think . We think well be higher by the end of the year. Were comfortable with our comfort on the s p. Which is what, sir . Which is a range of 2 150 to 2250. Thank you for joining us. Thank you. Up next, how the walking dead and the hunger games are creating big time Job Opportunities in georgia and earning atlanta a new nickname. Yaliwood. Well be live on the street when squawk on the street returns. 73 of americans try. To cook healthy meals. Yet up to 90 fall short in getting key nutrients from food alone. Lets do more. Add one a day mens 50 . Complete with key nutrients we may need. Plus it helps support healthy Blood Pressure with vitamin d and magnesium. Need to see. Our live segments in power lunch every day. More squawk on the street coming up next. No students ever been the king of the campus on day one. But youre armed with a roomy new jansport backpack, a powerful new dell 2in1 laptop, and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats what we call that new gear feeling. You left this on the bus. Get it at the place with the experts to get you the right gear. Office depot officemax. Gear up for school. Gear up for great. Another volatile weeks. Who better than to inject calm analysis than dom chew . Im going to try to interject calm but its a tough market. And that jobs number may be getting people nervous. Remember, its been a volatile week but not nearly as much as it was last week and part of the week before that. As we take a look at the best and worst performing sectors, interesting themes develop, the dividend players like the Telecom Stocks only down 2 . Telecom stocks leaders in this market this far. As are consumer staples. Both of them pay heftier dividends. On the other hand, it becomes a little bit more muddied. Health care which has been a huge up side performer for the past year or two showing some real signs of weakness. Down 4 . Biotechnology stocks play a big part of that story. Consumer staples and telecoms were relative outperformers, but the utilities are big dividend players. Theyre getting clocked hard. If you take a look at the overall stocks making the use this week, dr horton on the housing side, the Home Builders up 3 this week to date so far, and beating down stocks, keurig, green mountain, up 6 . Maybe its a fundamental bounce, and then frontier up 7 . A Downside Momentum getting a bit of a bounce. These are some of the stock stand outs as we see whats happening so far. A down day. Well see if theres any stability brought in the days ahead. Calm, dom is your new nickname. We appreciate it. On this friday, we head to a state thats become a start in it own right in the tv and film industry. Georgia is third behind new york and california, but the state is finding the industrys growth is causing some tough labor pains. Mary thompson is live in atlanta. Down to you. Reporter hey. You know, a long with numerous studios like this where you can see behind me, theyre building a new set, georgia offers, beaches, and mountains and cities as a set, along with access to an airport and a generous tax incentive, that can give a tax credit. Which georgia cant offer in abundance are trained workers. Workers trained as artists and construction workers. A problem chris bag well says could stifle is industrys growth in the state. Its a lot cheaper for production to hire local talent than to have to bring people and have to pay their housing and Everything Else. Given the state now estimates the industrys Economic Impact at 6 billion up from half a billion, it wants to ensure it has the work force the industry needs. Its opening the georgia film academy. It is training for entry level jobs in the industry and training for people who can apply their skills to tv and film. There will be an academy that will be more nimble and flexible. Its not built to replicate the programs that are out there in the state. Reporter now, currently about 30,000 georgians for the for the tv and film industry, and on national average, these jobs pay about 82,000 a year. Theyre good ones that dwa georgia wants to attract and keep in the state. Among some of the things, the mook mocking jay one and two which did films at a place called the swan house. It was also the site of your wedding reception. Wow. What a mention. Thank you, mary. I can tell you being from georg georgia, people got a kick of seeing Jennifer Lawrence around town. Its fun. Mary, thanks so much. Lets get Rick Santelli for the santelli exchange. Reporter cay wikayla, i lik notion of calm down. Tim, thanks for taking the time. First time youre a guest with me. Thats right. Great to be here, rick. Okay. Lets keep this real. Were talking about calm down. The market has been going through some turbulence. Heres the way i read the notion. Its not our programming. Were hearing this from fed officials and the academics and economists. When i hear calm down, i hear lets keep the market medicated. Medicated people are usually really calm. Turbulen turbulence, chicken and egg argument. Correct me if im wrong, whats going on with emerging markets and foreign exchange, isnt this turbulence because of the Federal Reserves normalization which is an offshoot of playing this rates this long . Isnt it a chicken egg argument . The turbulence is because of normalization . Do you agree or disagree . Ive been agreeing with you for a long time. Ive been frustrated the fed has been so slow. And i think were way overstimulating an economy and the jobs report today shows it worked. So we see a collapse in Unemployment Rate. Jobless claims yesterday continued a half year run of being lower than ever before. The economy is strong, but theres these mixed signals, and i think the fed is frozen in inaction right now. I think, though, i would agree with the calm down people. Not to keep stimulating with this bad medicine. But to realize that the u. S. Economy is strong. And so if youve got stocks maybe that are u. S. Based or consumers are in the u. S. , those stocks, i would think should stay wrong for the foreseeable future. I dont know that i agree on your Unemployment Rate assessments, but i agree with 94 Million People out of work. Who we have left is getting tight in the month over month up three tenths. Another area, foreign exchange. I want to dig deeper into this. Youve written about the dynamics of how the dollar just has to get stronger because at some point rates have to go up, and then i look at treasury secretary lew scolding china for doing things that arent much different than what we do. We put different names on it. Your thoughts . Yeah. I think its a big mistake to focus on exchange rates, and our economies get so interconnected that if the chinas currency is weaker and their imports are cheeper, that helps so many manufacturers in the u. S. I would focus on having a str g stronger dollar is a good thing and not obsess over what china is doing. Lets focus on whats best for the u. S. , and i think where are we disagreeing . I want to pick that apart a little bit. Reporter you know what . Were out of time but next time i get you back, were going to look at the Unemployment Rate and jobless claims and were going to contrast that against 94 million out of work. I think we can come up with some unique conversations. Tim, thank you for taking the time. Love it, rick. Back to simon hobbs. Coming up, its force friday. People around the world united and lining up to get their hands on brand new star wars merchandise. But will the stellar merchandise put disney back on track . Well be back with that after this. Rmed with a roomy new jansport backpack, a powerful new dell 2in1 laptop, and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats what we call that new gear feeling. You left this on the bus. Get it at the place with the experts to get you the right gear. Office depot officemax. Gear up for school. Gear up for great. Here at Td Ameritrade, they work wow, that was random. Random . No its all about understanding patterns like the mail guy at 3 12 every day or jerry, getting dumped every third tuesday. This happens every third tuesday. We have Pattern Recognition Technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. For all the confidence you need. Td ameritrade. You got this. Disney launching force friday today, the company is making big plans for its upcoming release of its newest installment of Star Wars Franchise and simon hobbs is holding a light saber. Is this enough to help disney stock . Here is barton crockett, media analyst at fbr. Barton, how much can this manufactured holiday do for disney . Is it as big as prime day or cybermonday . You know i think its hard to say. I mean star wars is a huge franchise, but its not a movie, its a 2 billionplus sales franchise, with the movie kicking in, we havent seen this in ten years, we dont know how big this could be. My gut tells me this is going to be very big. Certainly its great promotion for the movie to have big publicity around your toys. So were very hopeful that this going to propel the Consumer Products licensing, hem the theme parks. Weve seen some analysts say all right, 5 billion in sales gets disney about 500 million in licensing revenue, does that seem right . That seems right. I wouldnt disz agree with that what we dont know if theyll hit the 5 billion number. Which seems plausible. We have dreamworks splitting off from disney, we have apple getting into content. We saw what the market did to disney stock after its earnings earlier in august. Do you think that the release of the film will be able to overshadow all of those other bigger concerns . I think its going to help, i think you focus on where disney is strong, which is the movies, which have a multiyear cycle of star wars releases, marvel releases, pixar sequels, which will deliver a studio slate like none weve ever seen and step up in studio profits that i think will be unseen ever in the history of movie studios, i think were on the cusp of something very special. Very exciting. That will be good for disney stock that will help the theme park side of it. It will change the focus. The thing about disney is theyre not 100 tv. I guess the risk, barton, is that stores become flooded with this merchandise, it actually doesnt sell as well as many people had hoped. My assumption is, disney isnt on the hook for that its the suppliers that have presumably borne the cost of the merchandise and disney will just collect the royalty if its sold. The retailers are smart people. They dont flood their shelves with product if they dont think its going to sell. Disney cant force them to pick it up. So you have smart buyers telling us that people are going to buy this stuff. Disney gets upfront minimums, theyre getting paid whether the stuff sells or not. But i think it bodes well for the future. You have smart people giving us good support for that idea. Barton, we appreciate your time. We hope you have a great weekend and we apologize for the light saber noises, we couldnt resist. Im sure i can get it through airport security. Jon fortt joins us with a look at whats coming up on squawk alley, very summery. Last friday before labor day, the markets down about 1. 5 after the jobs report that did not excite a lot of people. And twitter, whats going on with the ceo search . The Board Meeting came and went without any announcements. And then weve got apple and mobile devices continuing to cover all of that and more coming up. Can be to breathe with copd . It can feel like this. Copd includes chronic bronchitis and emphysema. Spiriva is a oncedaily inhaled copd maintenance treatment that helps open my airways for a full 24 hours. Spiriva helps me breathe easier. Spiriva respimat does not replace rescue inhalers for sudden symptoms. Tell your doctor if you have kidney problems, glaucoma, trouble urinating, or an enlarged prostate. These may worsen with Spiriva Respimat. Discuss all medicines you take, even eye drops. If your breathing suddenly worsens, your throat or tongue swells, you get hives, vision changes or eye pain or problems passing urine, stop taking Spiriva Respimat and call your doctor right away. Side effects include sore throat, cough, dry mouth and sinus infection. Nothing can reverse copd. Spiriva helps me breathe better. To learn about Spiriva Respimat slowmoving mist, ask your doctor or visit spirivarespimat. Com can a a subconscious. Mind . A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . This just in 50 million customers data was not compromised this morning in a Security Breach that didnt happen. Wall street. Not rattled. At all. No. Not at all. Not at all. I mean, look at the day. Sir. Sir. What went right . What went right . Everything. Thank you. With threat intelligence, behavioral analytics, and 6000 experts, ibm security will help keep you out of the news. My dads company wasnt hacked today. Cool. The big news this friday at the headline level, the u. S. Economy adding 173,000 jobs in the month of august, short of many estimates, although the Unemployment Rate of course only fell to 5. 1 . Every month we ask our viewers to nail the number and tweet in their best guess for what the nonfarms number will be. And this month our winner is jeffrey. With a guess of 174,000. He gets this golf shirt signed by the entire squawk on the street gang, including sara eisen before she left for her vacation, his twitter handle is jeffrey2313819. It is 8 00 a. M. At disney headquarters in burbank, california and 11 00 a. M. On wall street and squawk alley is live. Good friday morning, welcome to squawk alley, joining us from one market in san