Transcripts For CNBC Squawk On The Street 20160609

Moments ago. I think you have sort of a false market, buoyed by zero Interest Rates and you have to be cognizant of it. Of course, covered a lot of ground. Talked valeant, apple, herbalife. But in general, nervous about very big, bad things happening in the global markets. Without a doubt. If you have a billion dollars and youre over a certain age, it seems like youre really focused on the risks. The environment doesnt feel comfortable to you. Negative Interest Rates are something you never thought youd have to contend with. And its not to say its correct or wrong, but its one of those things, everyone understands the unease. If youre somebody like carl icahn who has made his fortune putting money at risk when everybody else was panicking and it seemed like things were cheap, thats not really the environment you feel like were in right now. You had an interesting discussion about these gentlemen on twitter yesterday. In part, the conversation went, are they uncomfortable with a communicative fed . And a big part of the world in negative . I do think the dominance of Central Banks in terms of driving the economic discussion and being the only thing that seems to drive markets, is not one that i think fits with the framework that got them to where they are today. Im not saying theyre outdated and have nothing to offer. When you get those big turns in markets, its that common sense gut feel stance that somethings not right here that often is vindicated down the road. But theres nothing to say that today at this moment, at this market level, this is what matters. Icahn is a man who has operated on his gut largely for many years. I mean, having followed him and known him for so long, its not necessarily the insights that he has on the particular workings of a company as much as he sees the situation and one way or the other he feels strongly it is worth taking risks, either because he thinks its going to go badly, or more often than not because he sees value. I also love your comment, of a certain age. What age is that, michael, that these guys have gotten to . Soros is 85. Yes, exactly. Carl is 80. But he was there with soros operating in that same framework. I dont think its just because ive got a lot of money, i want to get paid in riskfree Interest Rates for that money. But its something thats out there that i think theyre Warren Buffett is 85, too, though. And hes not a seller. Its not just soros, icahn, and the like. Now its Deutsche Bank with this report, warning of social unrest in europe. The title of the record is stop easing. Its aimed at the ecb. Subtitlesed, you are crushing us. As we said, the anxiety over low rates is weighing on this, too. Over low rates and extreme measures that seem to have to be taken to kind of just keep us running in place. I think thats the frustration. Its one thing if you have people throwing money at the economies of the world and they were off to the races. European bank stocks are looking to be in a bad place. They dont really have room to operate there. And you have gold prices still on the rise. Everything on the rise, really. Stocks, bonds, commodities, gold. I think that that is obviously a reflection of this sense that we have cheap money, and its finding its way into all corners. You get paid 3. 4 basis points to own the german tenure. Thats what you get. Basis points. Thats. 3 of a percentage point. And then it got up to six. The hawks are out in force. For that, were going to go to phil lebeau in chicago. This is about tesla trying to sell a lowerpriced smaller battery option for the model s. Youll recall that they had this option between 2012 and 2015, and then last year, they said look, theres not enough demand there, were going to stop selling the lower priced model s with a 60 kilowatt battery. Now theyre bringing it back. Tesla announcing it will sell a 60kilowatt battery option at 66,000. Heres the interesting part. Its actually a 75 kilowatt hour battery pack that will be in the vehicle. Its an optional upgrade if you want to pay x amount of dollars, and they havent said how much. You can get more range out of the car. Right now the range for 60kilowatt hours is at least 200 miles. As i mentioned, this is all about tesla trying to meet demand at the lower end of the price range when it comes to the model s. Right now, if youre buying one at the 80 kilowatt version, youre paying, what, about 76, 75,000. Now theyre hoping to spur greater demand, lower price, at a 66,000 price point. Remember, theyre increasing their production dramatically over the next couple of years. Last year, they delivered 50,000 vehicles. This year, their target is at least 80,000 vehicles. We should also point out, as you take a look at shares of tesla. They dont give a total in terms of reservations for the model s. But if you were to order one right now, youre looking at at least six to eight weeks before you take delivery of that vehicle. Whats going to be debated amongst investors today is whether or not this is tesla meeting demand for lower priced model s, or trying to spur demand by dropping the price and offering a smaller battery pack at a lower price point. Interesting to see. Their strategy really starting to gel, phil, with the x. The journal today with a story about tesla suppliers, saying theyre being moved around by an exaggerated amount because of the promise that tesla is making on production. Right, and youre going to see that. This is not like an established automaker where they can go up to a supplier and say we are building 200,000 of this particular model. Tesla has a target out there, but tesla at this point is still demanddriven in terms of its production schedule. It is not being driven as traditional automakers are saying were building 500,000 of this particular car and we believe we can sell them. At this point, tesla is still demand driven. It says it has the demand to make 500,000 by 2018, but there are a lot of people who are saying youre relying on reservations for people for that lowerpriced model three. Phil lebeau in chicago. Thanks for bringing that to us. Joining us this morning, jeff rosenberg, chief investment strategy. Mike ryan at ubs. Guys, good morning to you. Jeff, what do you make of these bearish billionaires . How seriously should Retail Investors take them . In the earlier segment, you were saying what is the age . Its not the age, its the experience. The experience is about having seen complacent markets before and having seen cycles before. And, you know, without being able to call what the timing is. I think the message is this is a very late part of the current cycle. Nobody knows how far that cycle will go, but its clear that youre seeing many signals. Youre seeing them in the fixed income markets. What youre seeing in credit markets. You see it in profits, in the equity markets this this is the later part of the economic cycle. And the issues on Central Banks is that Central Bank Policy is running on fumes. Were scraping the bottom of the barrel as regards to what are the further iterations that can be done to help support the market. The combination of those two things gives many of those experienced investors a sense of worry and concern. You can point to many things jeff did and say that Profit Margins have obviously crested here. But on the other hand, the u. S. Stock market, which has been by far the best performer in the world for a while now, still has gone nowhere in a year and a half. How his the stock market digesting so far . Again, jeff and i have worked together on a few other issues, so i largely agree with jeff, but im going to disagree with something he said about how deep we are in the cycle. I do think we have to be careful, because i do think this Business Cycle is going to be very different than prior cycles. Why is that . I think this is going to be more like an expansion. Its going to be narrower and more fragile than weve seen in the past. Were not seeing anything that comes at the late part of the cycle. We dont see an overcommitment on the side of businesses where they have to go from that as well. Nor do we see the inflation problems that would lead to a sudden shift or draconian tightening by Central Banks. Some of the things that we see tighten up are absent this time around. I do think what you will see is a lot of what weve seen over the course of the last 12 to 18 months. That is these periodic growth scares. I think you can see periods where it lull or accelerate. We will see it as a reacceleration of corporate products. Jeff, ill give you a chance to respond to that. But to the larger point, do you expect, whether its in the second half or farther down the road, some collision between the inflation and the bond bubble . Can the fed allow this to overshoot for a while . Well, thats certainly the goal, that the fed has talked about the desirability of getting inflation to run hot. But while thats the goal, they really failed to achieve that goal. While we have some signs of inflation rising, some good news on the wage front. Overall, what were really struggling here with is not inflation, but deflation. And to mikes point, i agree. If youre looking at the u. S. Market, you dont see those signs of excesses. You dont see the credit extension. You dont see the Balance Sheet vulnerability. But what i would highlight, mike and i have talked about this before as well, is that the issues that face this cycle are uniquely happening outside the united states. The vulnerabilities, the excesses that we see, in terms of credit growth, the vulnerabilities are really happening not in the u. S. Markets, but mainly focused around emerging markets. Thats where the vulnerability is. And importantly, the u. S. Wont be immune to those vulnerabilities. So i think what we see, and we saw this in march, why is the fed not able to normalize . Its about the role of the dollar. Its about Global Financial conditions. And i think thats where when youre looking for vulnerabilities, when you have to be focused on if youre going to see where the trigger for the answer to your question, how much longer will this cycle go, no one really knows that. I do think, though, in a global context, we are pretty late in this cycle. That debate is going to go on. Appreciate your time today, guys. When we come back, disney gearing up for the opening of their new park in shanghai. Well hear from bob iger. He talked to our eunice eun about it. More from post nine in a minute. Heres to breaking more glass ceilings in golf and everywhere else. Kpmg. Continuing our commitment to the next generation of women leaders. After seven years under construction, Shanghai Disney is set to open next week. Our eunice yoon joined ceo bob iger with a first look inside the park and shes live from shanghai this morning. Hey, eunice. Reporter hey, carl. Well, the shanghai park is opening in just over a week, but ceo bob iger said hes very optimistic. The company has been running pretrials, and so far, he says theyve already seen half a million people. He told me that he believes that this park is going to be good for the business, and that for many other parts of the business because its going to help build disneys brand here. How does this park help the other parts of the business in this market . Well, it clearly will serve as a booster rocket for peoples appreciation of disney. The knowledge that disney is, in fact, universal in appeal to people. Appreciation and knowledge of characters and stories. An immersive park experience, the disney way is something that people will remember for the rest of their lives. And that goes a long way in terms of not just creating word of mouth, but in terms of peoples interest and passion for our brand and everything that it stands for and everything that bears its name. And what was interesting about the park here is just how many of the rides are actually based on the new franchises for disney. We saw several big important rides such as tron and pirates of the caribbean. But whats interesting is how both are based on movies and a lot of that is because Chinese People are not so familiar with mickey and minnie. They didnt really grow up with these characters in the same way that americans did. Instead, though, they do know jack sparrow or elsa or darth vader. So the company included a star wars bay. They also dont have all the traditional lands here, but there is no adventureland, for example, although there is an adventure isle. They put a little area completely dedicated to pirates, which have been very popular with the chinese. And whats interesting also, is that bob iger said that despite the slowdown, hes optimistic about the longterm outlook for consumers, though he did acknowledge some of the challenges that American Companies have been facing, particularly a more antiforeign business environment. China has always presented a number of challenges to global businesses, from a variety of directions, for a variety of reasons, none that i really want to get into very much. Were well aware of what those challenges are and what they have been. And yet we continue to march forward and develop this property and ultimately build it. I think the fact that we have built this, that we have great chinese partners, that we have the approval of the government to do this, suggests that this is a market that, while there havent been challenges, weve been able to enter i think quite successfully. And iger said that chinese president xi jinping has already been to the park here and in orlando and he thinks that would have something to do with the success of this park. I would imagine so. Eunice, thank you so much. Great stuff. Eunice yoon at disney with bob iger. What do you think . Going to be an interesting exercise . Its gotten delayed a couple times. Its been in conception much longer than under construction. Eunice mentioning its the newer franchises that are really at the fore, which has to make all the sense in the world, buecaus i think the parks have never really been as important in terms of cross selling and reselling the movie franchises. I dont know that the Chinese People would have the turn of the century small town america thing. Adventure land in china probably wouldnt make a lot of sense. Harkening back to walt disneys kansas childhood. When we come back, art cashen on what to expect from todays trading action as we count down to the opening bell. One more look at the premarket. Its been in the red most of the morning. More squawk on the street from the nyc straight ahead. Using 60,000 points from my chase ink card i bought all the framework. Wire. And plants needed to give my shop. A face. No one will forget. See what the power of points can do for your business. Learn more at chase. Com ink see what the power of points can do for your business. Real is touching a ray. Amazing is moving like one. Real is making new friends. Amazing is getting this close. Real is an animal rescue. Amazing is over twentyseven thousand of them. There is only one place where real and amazing live. Seaworld. Real. Amazing seven minutes until the bell. Lets bring in art cashen, director of floor operations at ubs, who joins us this morning at post nine. Good to have you back. Good to be here. Started the morning with a discussion about icahn. Soros on the front page of the journal. Mike called them men of a certain age. Were not going to include you in that group. What do you make of it . Theyre olden than i am. Not by much. Theyre talking about the need for some fiscal effort. Sounding very much like Richard Fisher from the former head of the dallas fed. Theyre into buying junk bonds now. It shows how desperate all the Central Banks have become. In tokyo, with all the stimulus theyre doing, machine tool orders came in dreadfully, down 11 . So i think the fear of a global weakening is there, just as much as the concern about what soros and icahn have. How does that manifest itself . You have gold you have this other little rally leg in the last week or so. Really everything kind of reflation oriented has been rallying. What is gold telling us . Treasuries down to twoyear lows telling us in yield . I think the gold move was in large part, or at least 50 , was in reaction to the weakness in the dollar and the dollar index. And well see if that continues on. The other thing is, on a shortterm technical basis, the market has exhausted for a couple of days at s p, 2019 to 2023. And that may give it a bit of an excuse to pull back. So i think theres enough concern about the economy reaching some limits here. Youre going to be going into earnings season. People will start lowering expectations. So it does look like theres a little bit of a trouble going coming on here. So soross timing may be perfect. So youre a little worried. I mean, to quote my colleague here, he said men of a certain age seem to be getting a bit worried. Youre a piker compared to soros. Or icahn. But each of us has seen a great number of cycles go by. Weve seen things spring up virtually out of nowhere. We call what we saw in february, that we were very lucky to get away from. And that would not take too much to see a kind of rerun of that. As i always say, men of a certain age always survive in the business. The first thing they look for when they enter a room is the exit sign. Its sad when i can finish your sentences. Hope to see you later. Art cashin. Opening bell just about four minutes away. Our mission at clover is to create the best tasting, highest Quality Dairy products. Clover has relationships with 27 different family farms. The environment is who clover is. Without it, were nothing. Pg es been a great partner. Theyre the energy experts, were the milk guys. Pg e worked with clover on a number of Energy Efficiency projects to save energy every month. If youre part of the fabric of the community, youve got to ensure that you do things right, environment included. Learn how you can save at pge. Com save together, were building a better california. [phone buzzing] some things are simply impossible to ignore. The strikingly designed lexus nx turbo and hybrid. The suv that dares to go beyond utility. This is the pursuit of perfection. Youre watching squawk on the street live from the Financial Capital of the world. The opening bell in about 45 seconds. S p coming off the highest close since july 21st of last year. But global bond yields basically close to record lows all around the world. For me, thats the conversation exactly. Is what are yields telling us, if anything, beyond the fact that we have Central Banks going in hyper drive. But also worth noting the u. S. Stock market is within a whisper of a of its alltime highs. Almost all major markets are within no less than 10 or 15 . Canada is 8 below its old highs. Clearly its been a major outperformer. There is the opening bell. And the biographer of Alexander Hamilton ron churnow celebrating the founding of the bank itself. A medical Device Company treating nonmelanoma skin cancers. Churnow is now a rock star. We know an awful lot about hamilton. If you want to go see him, hes only a couple of blocks away. At Trinity Church cemetery they had prizes . No joke. A lot of movers to watch today. Restoration is probably going to get a lot of attention. Fivecent loss. Revenue was ahead. They cut their outlook. Comps up four. We had a long discussion this morning. I think people are reacting to a lot of excuses. I dont think the street was expecting much of anything. The stock has been pummelled, even before this report. But its just a question if they can right their supply chain stuff and make sure that the brand is okay. You know, whats been a decent market for furnishings and home related retail. Theyre not catching much of that right now. It puts a period on the retail season weve had. But thats going to be a tough one to watch this morning. Revenue was shy. Theyre complaining about dropping international. This one is pretty legitimate, i would say. Its a travelrelated company. Also, its always been kind of a hedge fund play. It seemed like some of the real estate type thing. Well see if theres Much Movement there. Smuckers numbers today, a good size beat, already at an alltime high. Its a perfectly built stock for this environment. Its consumer staples. Its got a 2 yield. And its beginning to stretch those alltime highs today. The question is how much is too much to pay for these steady stocks. And the market still wants more. I want to take a look at shares of activision. An interesting transaction that took place overnight involving a number of large block trades. So youre talk about a lot of money. This relates actually back to a partnership that was formed a number of years ago when activisions ceo and brian kelly privately put together a group that bought 172 million shares from vivendi when they wanted to sell. They bought it at 13. 16 a share. Its been a home run for those who participated, including leonard green, and a number of other investors. The partnership has come apart, as was the plan. And the shares have been distributed. Some of those in the partnership, were not sure who, have sold those shares. Those are the blocks we saw last night, but didnt want to give light to that. Theres still quite a few. Perhaps other sales to come. Pretty close to its alltime. Ive always said through the years, overall, when bobby codik sells, you want to buy. You may want to take a look if youre an owner and consider lightening up. One of the very good ceo bellwethers there. Relatively sour take. Smuckers the only one without about a percentage gain. A lot of the industrials and Oil Companies obviously under pressure. Chesapeake and rg, free port. Youre at this level thats sort of made you feel smart for selling and lightening up many, many times. It would be almost perverse if we got this close to the old highs and didnt get there. Thats what the market does. It acts in a perverse way. Maybe it needs to reload a little bit here. I think also, the market hasnt really been testing for any pullback in crude oil. Not that this is much of a pullback. The low for the year was 2750. So you were really only a couple bucks away from doubling. From a double. From the lows of the year. And yet down Something Like 20 from months ago. So it kind of shows you the depth of the crash and has the ability for anybody to spin that chart two different ways and say hey, weve got more catching up to do. I love the piece in the journal about bankers going to saudi arabia, going in thinking youre going to meet with somebody big. The underlings to the underlings and getting your photograph taken a number of times. The point is, the money, thats where you go if youre a banker, the potential fees for an ipo. And we dont even know if it will actually happen, but it is on that road, would be enormous. Perhaps even above that of the billion dollars almost billion that was garnered from the visa ipo. A number of years back. So you can imagine theres going to be a wellworn path to saudi arabia trod by many bankers. Jp morgan certainly in a good position right now. But many others will seek to be a part of that potential sale of a very small percentage, but when youre talking about something that could be valued as much as 3 trillion, you can imagine the numbers start to add up. Absolutely. 5 of 3 trillion. Bigger than weve seen in a long time. Exactly. I did want to mention something in the journal today in terms of a deal. Vision and amserg. Market value the deal would be about 9billion. I did want to take a look and see how those stocks were performing this morning. Because there is another company that is suffering from this. The big loser, if it comes to be this deal, could be team health. Actually trying to get that company to engage. But then, eventually, walked away, even though it was offering as much as 69 based on its stock price as well. Or 70 bucks a share. You can see that stock is down because the idea being well, these two other guys are getting together without it. Big holder there is jana. One of the larger holders on the board as well. Linked in and pandora doing okay on some upgrades. The tenyear has crossed below the yeartodate close, which was 1659 in february. Lets get to bob pisani on the floor. Good morning, guys. We saw much of the asian markets close. Japan is a little bit weak. Europes having a tough time today. Why shouldnt they be . German bund yields are sitting right near record lows. Take a look at some of the german financial stocks here. Commerce bank. Some of the german banks there. Allianz. In the u. S. , you just heard from carl. Tenyear yields below 1. 7 . That usually puts pressure on our banks here, so particularly the regional banks. The Money Center Banks also on the weak side as well. Weve got a stronger dollar today along with weaker oil, which is not unusual, so the big commodity names like free port, cf industries, even alcoa weak in europe. All those commodity names are all down two, three, or 4 . Same with the Energy Situation here. Although they are down today, not much. These are the higher beta energy names. Bear in mind, theyve had a great year. All of these names. Devon is up 14 for the year. Even with being down 2 today. So by and large, theyre holding well above their start in december. As far as the market overall goes, i know soros has been negative. I know carl icahn has been negative. But, you know, with the exception of maybe janet yellen, its very difficult for any individual to jawbone down the market. The trend still very much remains on the upside. If you take a look at the reasons the bulls have been holding on here, the long positioning has still been very thin. Theres not a lot of massive bullish positions out there. We know that sentiment generally is negative, if not outright cautious. Valuations are full. Everyone agrees on that. But not excessive. Were not in bubble territory. Finally, very much in evidence yesterday when i was at the Global Exchange conference. The heads of all the exchanges, all the ebrokers, many other brokers who were here yesterday spoke with Howard Lutnik and he exemplified the tina position overall. He said to me, stocks are melting upward, continuing to improve because low Interest Rates push money into the equity markets, where at least they can get a reasonable return. That may not be terribly intellectually satisfying, but that is the position right now. Just take a quick look at the s p sectors. Were only 20 points from the highs on the s p. And in the sub sectors of aerospace, semiconductor and insurance, just a fraction of a percent from historic highs. The dow right now down 50 points. David, back to you. Thank you very much, bob pisani. Tomorrow, the board of directors of yahoo is going to get together to review the bids the company has received for the sale of its core business. The socalled second round of bidding. Having concluded and decisions to be made about what bidders, or which bidders will enter the final round of bidding for yahoos core business. Based on numerous conversations with people familiar with the situation, heres what i can tell you at this point. Yahoo actually seems to be running a fairly robust auction. And has received multiple bids that are at or above the 5 billion range for that core business. Now, it is important to note that some of these plus5 billion bids include at least some of, if not all of the i. P. Portfolio, or some if not all of the real estate. However, there are also bids, i am told, by people familiar with the situation that are at 5 billion or above that actually dont include either one of the real estate or the patent portfolio. Which, of course, becomes important for the overall potential value that will be received should the board of directors decide to move ahead with the sale of the core business and as well the sale of real estate and i. P. Verizon, of course, had been anticipated to be would have been the leading bidders here, but at this point, at least, it does seem to be laggered. While it did bid roughly more than 3. 5 billion, it is said to be amongst the lower bids received thus far. Now, keep in mind when you move into the final round, bids can move around a lot. Valuation can change a good deal. I will say there has been some conversation as to whether verizon would ever make it, given where it is right now in terms of the prospective bidders, which do include other strategic buyers as well as private equity firms. The final round will begin next week. At that point, we will have an idea who the potential buyer will be for that core business. But at this point again, it does appear at least that the numbers coming in for yahoo and its bankers are fairly good, and there does appear to be a good amount of competition as multiple bidders head into the final round here to acquire that core business. As ive said, many times, while there has been a great deal of focus on this, the real focus perhaps in terms of delivering value should be on the back end of this transaction. What will be left behind . The stake in ali alibaba is the key. What will the shares be to the overall value of alibaba . Will they be able to effect a stock swap of some kind with alibaba in which it would buy back the entire Investment Company in a share for share deal that would be taxfree . And what happens to the yahoo japan stake is a key consideration. Soft bank seems to be fairly busy raising capital. They say thats for taking their leverage ratio again. One has to believe they may be thinking long and hard about whether they want to buy in that yahoo japan stake from yahoo. Thats where we stand right now on the yahoo sale process. Lets head to the bond pits for Rick Santelli. Lets just name a few negative curves, shall we . France negative off the sevenyear. Germany negative off the nineyear. Sweden negative out to seven year. Boy, Central Banks have everything under control. With regard to the tenyear, were toying with the lowyield close of the year at 166. Third year, we left out to make it a little bit different because it is different. The long end of the curve, where you get the most yield, global investors, probably indirect bidders today will step up like they did on tenyear. Well, we are at the lowest yield until we close here since january of 2015. Bunds, i mentioned them earlier. Look at an intraday of bunds. Every basis point move is a 33 move on Interest Rates. Shows how ridiculous both statistics with percentages are and maybe the notion that any of that is good. The free markets might not be as free as many other countries, but let me tell you, lots of countries are continuing to go down a road that makes no sense for their financial institutions. Theres some rebellion going on like a bank in a primary dealer in japan. Foreign exchange, real quickly. Dollar index, twoday. A bit of a reprieve. Its going to the upside. One week gives you a weather perspective. The lower these rates go, Foreign Exchange is probably going to get a lot more volatile. Rick santelli in chicago. When we come back, taking advantage of the airline rally. The biggest drop from the s p in about three weeks since may 17th. Back after a break. Recouping most of the losses seen from what was a very rough month for the sector in may. Joining us with what she calls her quarterly check, an analyst with raymond james. Nice to have you. What do you see in your quarterly check . Last look was that domestic capacity, at least, or passenger unit revenue, i should say, was actually down pretty substantially, right down to 6 . Revenue is down 6 , but fuel costs are down a lot more. So airlines currently are generating record profits. I think what investors are traveling with is how much of those profits they can hold on to and fuel starts moving up. Well, then how much are they going to hold on to . You know, from a capacity standpoint, im going to make two contradictory statements here. I think airlines are very disciplined on capacity. But at the same time, supply has risen more than demand. The reason these are contradictory is i think when capacity levels were set, the expectation for gdp was much higher. But few have surprised on the downside as well. So as fuel moves higher, i think youre going to get airlines that adjust capacity levels to the current demand levels, but thats going to take time. Its going to take about three to six months, so there is going to be probably a lag in earnings. And were positive on the airlines. We think theres upside. But i think investors are going to want proof that airlines are disciplined and i dont think youll get that for another three to six months. Is there any way to characterize if theres been any effect on demand from the widely publicized tsa problems . Are we having anything where at least leisure travelers are saying its not worth the trouble to try and fly . I dont think you are, because the demand in the peak summit periods are very good. I dont think the tsa lines are turning off passengers just yet. So what does it all mean for the stock prices at this point . We mentioned may was not a good month. June has proved to be better. Are we just going to sort of mark time . You know, i think the bottom were close to a bottom here. I think most investors that are going to sell off have sold the stocks. Investment sentiment is very negative. I think the next moves will be higher. But for the group to really break out, i think you need to see earnings start moving up and thats probably were probably about three months away from that. But were close to the bottom here. So i think for investors with a bit longer timeframe, i think the risk reward is really attractive. All right. Savi, thank you for joining us. Appreciate it. Savi syth from raymond james. When we come back, mark mehaney. The dow off the lows, but still down 40 points. 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 on the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of other competitors do on desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivatives pricing model, honey . Td ameritrade. Thats why i run on quickbooks. Details. I use the payments app to accept credit cards. And everything autosyncs. Those sales prove my sustainable designs are better for the environment and my bottom line. Thats how i own it. Vote yes on the drug price relief act. This nthank you. E can ensure stand up to the outrageous greed of the drug companies. Ature. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Oil prices have backed off a bit from that high that we saw close to 52 a barrel and really close to those highs we saw back in july of last year. But were seeing a pullback across the board in the energy complex. The story really is much broader than that, though. When you look at the crb index and you see what has happened to Commodity Prices overall in the last several days, really the gains that weve seen in commodities has been at the expense, of course, of seeing that weakening dollar, and the u. S. Job data being weak, strengthening data from europe, from china, helping that story of emerging currencies, commodities, gaining strength while the dollar has weakened. Elsewhere here in commodities, we are keeping our eye on gold prices. Very close the a threeweek high there. We are looking at gold prices again benefiting from the weakness in the dollar, and many who are very concerned about the Economic Outlook globally over the next several months, saying that gold is the place to be. Back to you. Thank you very much. Gold has been hard to call, mike. It has. It has mostly been an inverse to the dollar now. But even base commodities i mean, the whole commodity complex has been up pretty strongly. People even declaring a new bull market off these lows and helping emerging markets. But gold seems like its that default asset clash, where people are saying stocks looks rich here. Who wants a 0 bond. I will say today, though, in terms of financial assets, banks down 1. 6 . I think thats the kind of key in terms of the groups today, and the flatter yield curve in the u. S. With those tenyear treasury yields backing off. Home builders too on this Williams Sonoma weakness. When we come back, mark mahaney on his linkedin upgrade. Some losses to start the morning. Dow is down 45. Dont go away. They are. Do i look smarter . Yeah, a little. Youre making money now, are you investing . Well, ive been doing some research. Let me introduce you to our broker. How much does he charge . I dont know. Okay. Uh, do you get your fees back if youre not happy . dad laughs wow, youre laughing. Thats not the way the world works. Well, the worlds changing. Are you asking enough questions about the way your wealth is managed . Wealth management, at charles schwab. The first stock index was created over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. 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If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis and a 200 savings card Carl Quintanilla with david faber. This would be the worst day for the s p in about three weeks. Its only the second down day of june. Some weakness in banks. Some weakness in oil. And the tenyear, by the way, setting a new low on this year for the yield today. We have some breaking news now with Rick Santelli on wholesale trade. Good morning, rick. Good morning, simon. April read on wholesale trade. On the inventory side, up. 6. We are expecting unchanged up. 1. Last month, had a. 1 revision. On the trade side, the sales side, up 1 , down close to expectations. We did lose a tenth from. 7 to. 6 for last month. This is interesting data. You know, inventories are important. When you build inventories, you create gdp. But its really when you sell them that its most important. So to see the sales side up more is a good sign. Obviously, rates moving down has a lot more to do with Central Banks. Many think that the slow Global Economy or domestic economy has been priced in for a long time in the fixed income market. So well continue to monitor how all of that, of course, affects not only the psyche of investors, but how low rates will go. Back to you, simon. Thank you very much, rick. Meantime, stocks down at the open, but still, of course, within a stones throw of last year record highs. In a little over two weeks now, the s p has gained almost 3 . Energy stocks are really leading the charge this year. Along with bondlike stocks, utilities and telecomm. Icahn weighing in on the page that george soros is returning to trading with big, bearish bets against the market and the Global Economy. I think hes a very smart guy. Listening to what you said he said, i cant help but think he has a couple of real good points. You know, ive been saying it. I think that you have a sort of a false market. You know, buoyed by zero Interest Rates. And you have to be cognizant of it. Joining us now, tom petry, chairman of petry partners. Alan gale is with us, with 37 billion under management. Alan, what should we make of what we just heard there from carl icahn and george soros as the market continues to melt higher . Well, first of all, thank you for having me. I think that george soros has made an important point. That was we believe there is still some turbulence out there. We looked at some of the moves that theyve done. And we felt that now was a good time to get back in. Weve been out for about three years. I guess what happens to gold in the minors is in a sense opposite to your view of the markets overall. Certainly soros is going in on the basis that its a safe haven play against what might happen in the future, the general rise of the s p. Where are you on the Broader Market . Well, i think thats true in. In the allocation strategies, were neutral relative to our benchmark. We believe the market is on the cusp of breaking out, in which case were going to add risk Going Forward into the second half of the year. But we havent gotten there. I noticed after a good run yesterday, the market seems to be giving some of that back. I was encouraged by the lower jobless claims, and that suggests that maybe that may jobs report was noise after all. If you go back to ricks report on the inventories, i like that sales were moving up. Inventories were moving up, but sales were moving up more. And that suggested manufacturing may be getting some of this really soft patch behind it that really dogged it throughout 2015. A lot of good news that could set up the second half of the year for further increases. Tom, obviously the Energy Stocks have done well. I mean, oil has rocketed so far this year up 35 . And weve got the utilities and the telecomms in there as well as bondlike plays. Where do you think oil goes from here . I think the tailwinds are becoming more evident. Headwinds since the end of 2014, now rotating into a more clear pattern of better tailwinds. China and india are both growing. Thats very good news. Because it was a question mark six months ago. And on the supply side, weve seen enough of a bend of the nonopec supply curve that i think herald ham said it well today. He said were probably 120 days ahead of what he would have expected. I agree with that statement. I think were going to have a good second half building on this. But it will be a process of one or two steps backward after two or three steps forward as we go forward from here. On the price of oil. Let me draw ron the fact that clearly youre an investment banker. The classic view had been as the price of oil rises towards 50 and above, youre going to bring on a lot of shale production in this country, which will cap that effectively, and then we had on this show a couple of weeks ago tom ward, one of the cofounders of chesapeake. Assured you know quite well. He was suggesting that actually isnt the case and oil would have to rise to 75 a barrel. Essentially because the market in terms of financing was close to drillers and needed to outspend their cash flow in order to invest in that extra capaci capacity. Is he right . Its higher than the numbers where people say okay, we can drill at 50 and make lots of money. And bring on new supply. Were working through the best of the prospects now that work at those lower prices. But really to get an incremental supply out of nonopec, hes closer to that number. I probably say the high 60 toss the low to mid 70s is the range for a significant change. Most importantly, it needs to be something that people who allocate capital will move to that. This is going to be a process of two, three steps forward. Incentive for opec and saudi in particular is to remind us that theres downside to be observed. Were going to have scares periodically. Very brief times as we advance. Just return generally to the market overall, the equity market, you laid out the broad Asset Allocation with a particular interest in the minors and where we are with gold. Apart from that, what sectors do best in this environment. What do you avoid . What becomes defensive moving forward, particularly if the Central Banks, notably the ecb continue to push rates lower in this country . Well, we have a postcyclical tilt. Even though were neutral on stocks, we have a postcyclical tilt in our sector allocation. We agree that energy looks like a good space to be and weve got healthy exposure there. We still like technology. We think that even the financials might very well have a better second half of the year once the Federal Reserve begins raising Interest Rates. So theres a general procyclical tilt. The question is when is the best time to amp up that positioning . Thank you for your time. Alan gayle joining us from ridgeworth. Banker with oil and gas, tom petry. Coming up, Bernie Sanders meeting with president obama in the next hour. Potentially a big move in the next phase of the race to the white house. Plus, investing in health. Some new etfs aiming capital at the new trends in organics and wellness. Thats next. And the original inventor of the segue. Dean kamen. A lot of ideas look good in theory. But the real question is how do you make them pay off for your business . At kpmg, we work with you, shouldertoshoulder, to turn strategy into real results for your enterprise. Because while theory is great, we work exactly where you do in the real world. Change the perception people have of him now, and since trump cant change, i think his answer is less than political strategy and more on a team of shrinks to get him back into some sort of mentality where he understands he has to change. The meeting here between harry reid and sanders is in the realm of political strategy. What theyre trying to do is heal this feisty Democratic Primary Campaign between sanders and clinton. She soundly defeated him in california. The question is when and how enthusiastically he supports her, what shes hoping for, of course, is what she did for president obama in 2008, when she rallied very aggressively behind him. Of course, went on to become his secretary of state. Most democrats expect that that is going to happen with Bernie Sanders, but it does take time. This is one step on that road, guys. So its not today. Hes not going to make a big announcement today, john, in your view . Well, we do not expect to hear from president obama after this. So that suggests that at least not immediately after the meeting, were not going to hear a fullthroated endorsement from the president for hillary clinton. Bernie sanders may address the reporters in the white house driveway. I would be surprised if he announces hes getting out of the race. I wouldnt be surprised if he expresses a tempered mood, starts focusing his remarks exclusively on donald trump, not on hillary clinton. But were going to find out in an hour and a little bit more than that. Okay. John, thank you very much. Meanwhile, have you ever wanted to track the health of americans . Global etfs reaching a record 3 trillion in invested assets at the end of may. Now janice is looking to capitalize on the market, offering investors a way to bet on the future health of americans. The firm launching four new niche etfs. Joining us is janice capital groups head of etfs nick churney. Good morning. Good morning. Youve got obesity, organics, longterm health, and health and fitness. Explain how much overlap between them. Each product is pretty distinct. Very narrowly defined things that were hoping investors can express a view on for trends that are really persisting globally. We expect over the coming decades. So each one of these four products is an independently clearly defined product. Were pretty excited about the organics etf, the first product globally to allow the shift toward agriculture. So each product really is quite unique. Can you give us some examples of components within one of them . Lets take obesity, for instance. What are you looking at . Obesity, as i think everybody is aware, is a really severe problem spreading across the globe. So what we really looked at was the cluster of diseases that surrounds obesity. So things like diabetes, high blood pressure, sleep apnea. Really gaining access to companies that are focused on those diseases. So our Largest Holding there is a diabetes focus drug company. But we have a broad range of companies in that product. Its largely health care, things like medical devices. As well as weight loss companies. In addition, some Apparel Companies focused on apparel. I think what we are trying to do is find products that we think can help clients over the longterm build better portfolios. And these are really significant demographic trends. Its true that there are more and more products being launched and you need to have a product that i think really can speak to investors. I think organics can a great example of that. Theres only 25 companies in that product, because theres only 25 Companies Globally that are focused on the organic food market. And, you know, were hoping that investors who are increasingly expressing a personal preference for organics. Will be interested in trying to extend that into their financial realm and maybe make an impact. We have Companies Like china organic milk, which is really trying to solve some of the problems that exist in the chinese local market. Obviously a significant scandal a couple of years ago around tainted milk. Theyre a vertically integrated organic milk company. Maybe if we can see some money flowing their direction, we can encourage other people to offer organic food there. So, nick, times are very tough for a lot of equity analysts on wall street. There isnt the interest in what they did that there used to be. If you take, for example, whole foods, you might put that in a basket. But that is a stock that basically halved over two years, fitbit lost 2 3 of its value. You know, dont you have to be a little bit more active in the pursuit of these ideals in order to make money rather than just support the underlying view. Absolutely. We have a wide range of high concentration, High Conviction funds that help investors do exactly that. Im in new port today where we have bill gross and that team doing exactly that. So we think its a critical part of investing for clients in the future. But we also think that for a small part of their portfolio, maybe theres room to express a longterm theme. So were not saying that whole foods is necessarily going to be moving up in the next weeks or months. But we do believe that over the longterm, increasing the demand for organic should support these companies and as a longterm cyclical view, we think theyre valuable products. Finally, for those investors who might think all the things we just talked about are fads, would you ever consider an inverse etf . Obviously people are welcome to short etfs. I think they were very careful about selecting things, but its pretty hard to call a fad. Weve seen a fourfold increase in organics over the last ten years. I dont think theres any arguing with the fact that the world has an aging population. We know that obesity is a longterm problem. So were pretty confident there. I ask in jest. Its a good argument, nick. Thanks so much for coming on. Appreciate it. When we come bark its a new era of Global Shipping as the panama canal tests a new wider lane connecting 1,700 ports in 160 countries. Were going to take you there live in a moment. Before we had driverless cars, we had the segway. A motorized stair climbing wheelchair aims to bring mobility to all, and toyota Just Announced a deal to partner with decker research to bring a new version of the ibot to the market. Dean joins us this morning here at the nyse. Its great to have you back. Good morning. Good morning. Its great to be here. Were in a city that is infamously difficult for the disabled. What would the ibot do for those trying to get around a city like new york . Its unbelievable. I used one in new york and i literally walked down the stairs, into a subway, across the gap between ramp and the segue, drove around i said segue. Drove in the ibot across the gap into the subway car. Drove around in the subway. Came out, up the stairs. You can go anywhere in new york in an ibot. What was the genesis to this . How much time and money do you think youve put into it so far . Its a very long story, but i think its looking like its going to have a happy ending. We started more than 15 years ago with one of the great medical Products Companies of the world johnson johnson. They said they would help bring this technology to help the disabled get around. We spent a few years getting it through the food and drug administration. They put it into class 3, the highest category, which made sense at the time. And we launched. We developed 10 million hours of safe operation, so we went back to the fda relatively recently, a couple years ago, and said please, reconsider. We petitioned them to put it into class 2, so that we could make multiple versions of the seats for pediatric patients, bigger patients, smaller patients. The fda granted that ability to go into class 2. Our petition was accepted. And then, the Worlds Largest Transportation Company, toyota, came along and said we really want transportation and access and freedom and independence for everybody when it comes to transportation. Well help you. So retail . We just signed a deal a couple weeks ago with toyota. Were hoping well be able to get the volumes up. Well be able to take advantage of some of their Incredible Technology and manufacturing and distribution. And hopefully be able to bring the next generation of this product to a cost that can be afforded by everybody that needs it. On a larger topic, dean, youre joining us on a day where weve got headlines about larry paige building flying cars. Elon musk tweeting about flying metal suits. Obviously autonomous driving. Were landing rocket boosters in the ocean. What has promise and what doesnt . First of all, i would never doubt larry paige. Youd be taking a bad bet if you doubt elon musk. I know them both very well there. Extraordinary thinkers. Theyre very, very committed to what they do. And they each have a pretty good track record of getting it done. I think its inevitable. Every one of these ideas that starts out seeming crazy like an ibot seems crazy, but it goes from dispensable to indispensable. Why did you team up with toyota . What response did you get from other people in the space . Is toyota a natural fit because of the Battery Technology . I imagine that the battery in this and the talk that you can get is everything, isnt it . This is a long story with a happy ending. A couple of years arc i wouldnt have believed that we had the opportunity to move from one of the large great medical Products Companies johnson johnson, who really isnt in the space of making robots this size, to the Worlds Largest Transportation Company toyota. But the fact is they called us. And they, as you pointed out, they see the world of transportation starting to move towards people like google and elon musk, and they said dean, you are doing Cutting Edge Technology in robotics. You help the entire population of people that need a little extra help in their mobility. And it turned out very, very quickly, they said, dean, you share the vision with our chairman, mr. Toyota. Toyota, it turns out over the last few years, has been focusing more and more of their attention. They have a very strong commitment to making transportation and accessibility available to everybody. Its a shared vision. Theyre excited. And i think the worlds going to have mobility for everybody very soon. Dean, we always love watching what youre up to. Congratulations on all the progress on the ibot. Thank you very much. Dean kamen joining us. Linkedin with a boost. And joining us will be rbcs mark mahaney. He thinks theres 20 upside here from a stock clearly that has been pounded so far this year. Using 60,000 points from my chase ink card i bought all the fruit. Veggies. And herbs needed to create a popup pickyourown juice bar in the middle of the city, so now everyone knows. We have some of the freshest juice in town. See what the power of points can do for your business. Learn more at chase. Com ink see great time for af points can shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Good morning, everybody. Im sue herera. Here is your cnbc news update. A suicide bomb attack ripped through a Commercial Area in baghdad, killing at least 15 civilians while injuring 35 more. Isis claiming responsibility. The attack coincides with another suicide car bombing at an iraqi check north of baghdad that killed at least 12. Israeli Prime Minister Benjamin Netanyahu visited the scene of an attack by two palestinians in tel aviv last night, killing four and injuring at least nine others. He called the attack coldblooded murder by terrorists. Iraq releasing footage showing air strikes targeting isis positions in fallujah. It said the strikes occurred on wednesday and inflicted heavy losses in both men and equipment. And ticket prices for Lin Manuel Mirandas final appearance are going for more than 6,000 on the secondary market. According to tick iq, which is an Online Ticket seller, the average ticket price for the july 9th show is going for nearly 5,000 a ticket. It is a phenomenal hit. Thats our cnbc news update this hour. Simon, back to you. And i guess one of those moments of the year for many people. Absolutely. Lets get over to Sharon Epperson with the inventory data. Oil down, but still above 50 a barrel. Natural gas is really spiking here, simon, on this latest report from the energy information. We are look at natural gas supplies rising by 65 billion cubic feet. We have seen a continuous rise in natural gas supply. This rise in supply was smaller than what many analysts had anticipated. Theres still a concern by many in the u. S. As well as the International Agency that we are seeing a glut in supply and that will continue to pressure Natural Gas Prices over the longterm. But today, at this moment, we are seeing a rise in natural gas future prices based on this inventory data. Back to you. Thank you very much, Sharon Epperson. Linkedin shares are moving higher after getting an upgrade from our next guest. Hes telling clients to buy linked in, saying the shares are still reasonably valued. Lets bring in mark mahaney, lead internet analyst at rbc capital markets, who as i said just upgrade ed linkedin. A lot of this seems to be based on your user survey of hr profession professionals. Why was it enough for you to be more positive on these shares . It entered the year with a pretty high multiple, close to 30 times. It looks reasonable if you believe street estimates theres modest upside. If theres material upside, theres material upside to the stock. What the survey results showed is a pretty positive skew in terms of current linked in customers and their intentions to spend more with linkedin. And we saw satisfaction scores rise materially from when we last did the survey about a year ago. The thing third that came out was we saw linkedin rise above its direct competitors like indeed. Com, Career Builder in terms of satisfaction with existing customers. The stock certainly doesnt reflect that, hence the upgrade. Im curious about the satisfaction part of the survey. These are our best guesses. Theyve introduced two new products in their core, hiring solutions business. The other two is a version two of their core recruiter product that we think is much more user friendly, requires much less data input in order for companies to find recruiting candidates. Get their own employees to refer new job hires. So it may be those products, the combination of two or three products that have helped the survey results. In the wake of the employment report we had yesterday, which disappointed so many people, theres a huge debate amongst economists about whether were suffering from a lack of supply of skilled and semiskilled workers. Do you have a feeling as to where first of all, where the extra money that the people you surveyed, where that money will go, and what area of the labor market linkedin in particular is serving, and where it lines up for the more broader economy . Yeah, there may be a disconnect here. For that Corporate Solutions business, the Town Solutions business, the recruiting part of linkedins business, they have about 45,000 customers. In order to buy and spend about 3,000 a month with linkedin, you really are talking about 100plus employee businesses. That may not be the right readthrough. But nonetheless, the reasons that the fundamentals did slow down, and they clearly have, the stocks should have derated earlier this year. Most of them are consumeroriented. This is the one that has the macro exposure. Thats going to be an issue for the stock Going Forward through the balance of the year next year. Well, were talking about a stock the multiple have been cut in half. Thats not exactly cheap. Nor is the five times sales market here. Why is that appropriate in your opinion . I think it comes down to the growth rate. Generally the ratio that we see amongst these stocks. We saw a positive Inflection Point up in the march quarter in terms of the advertising revenue that went back to 30 . If they can sustain that, and we exit this year closer to that level, then estimates need to go up and that multiple will go up. People have to have confidence they can get up to 30 . We like the risk reward here. We have a little bit of upside. If were majorly right, theres a lot of upside. Sometimes they come back to an issue over equitybased comp here. Is that still the case . Are they dealing with that at all . Or is that a real risk . Its a real risk, david. Theres two companies you talked about one of them earlier today. Yahoo and linkedin. These are top of the charts in the internet sector in terms of how much comp they give out in terms of you know, thats equity comp. So theres a quality of earnings issue, which when theres a miss, it amplifies the downwards trading in the stock. They intend to bring it down closer to 10 . If we see it, it should help the stock. Appreciate you joining us. Thank you. Thank you, david. Youre welcome. Mark mahaney. A new battle in shipping. The catalyst, a new lane in the panama canal to serve some of the biggest ships in the world. Mary thompson is in panama and joins us now. Mary, take it away. Good morning to you, simon. What i want to do is show you one of the new locks in the lane here behind me. Its ten stories high. Theres a ship about 40 minutes offshore. Its going to come through this lane, the first ever ahead of that official opening at the end of june. The lane was built for over 5. 25 billion, and its much wider than the canals original lanes, so for the first time ever, megacontainer ships can take a canal, a 50mile shortcut linking the atlantic and the pacific oceans. The biggest container vessel that can come through can carry between 4,400 to 5,000 containers. The new locks will be able to put ships that carry up to 14,000 containers. The Canal Authority says for the panama, the new lane means added revenue. For importers and exporters, a drop in the cost of shipping goods to and from asia. It also means changes at east coast ports. Most of them unloaded on the west coast. So now eastern ports from miami to new york are spending billions dredging deeper canals, upgrading warehouses and raising the bridge. In baltimore, salini pragio is building lanes in that port, all to accommodate the ships and their additional cargo. Right now, about 2 3 of asian cargo is unloaded in west. How much more gets shipped to the east . It will depend how efficiently they can get the cargo off the ships and on to the railroads that will direct that cargo into the middle of the country. So im going to have more on what the railroads are doing to react to the new lane. Thats coming up on the halftime report. Back to you. Extraordinary story. Thank you very much. Mary touch shompson live from t panama canal. On the dow, currently off 70. Theres a move after the recent rally that weve had, very close to the alltime highs in. The meantime, take a look at the shares of restoration hardware. The stock down heavily, as you can see. 70 in the last year now. Another painful place in retail after they came through with a surprise loss and lowered their outlook for the year. Thats hit some of the housing stocks as well. More squawk on the street ahead. It takesbut stealing itd work to eaonly took a few days. Female announcer protect your money. Find out if youre dealing with a registered investment professional at investor. Gov. Before you invest, investor. Gov. Chesapeake energy, one of the names that has surged off the s ps february low. Are any of those names worth your money now . Find out at tradingnation. Cnbc. Com. More squawk on the street coming up. Welcome back to squawk on the street. The overall markets are downright now. You can largely blame the financials. That sector is weighing the most on stocks. The sector down over 1 . Regional banks like franklin resource and comerica. And if youre wondering, guys, financials are the only negative sector year to date, down by more than 2 . We do have the fed next week, so that could all turn around. Great rises off the table, and down they go. Lets send it to Rick Santelli for this mornings exchange, with the dow down 60. Thanks, simon. Andy, welcome. Thanks for being my guest today. Andy brenner. Before we start, we like to keep it real. Realtime. We just heard sully say, if you dont like the equities are, blame the financials. Andy, how could financials do anything better than theyre doing in this country, in europe, in japan with negative rates everywhere . Its almost rhetorical. Dont blame the financials. Blame the bankers do you agree or disagree . Absolutely agree, rick. Thank you for having me. Look, with negative Interest Rates both in japan and all throughout europe, banks are struggling. In the u. S. , with rates barely positive, banks are making a little bit of money, but not a lot. This negative Interest Rate stuff is baloney. It just doesnt work and it needs to stop. Oh, its worse than baloney. Its toxic. Its like playing with gasoline in a match factory. Tell me if you think healthy, not very healthy with regard to spanish banks. Healthy or not very healthy . Not very healthy. What about italian banks . Horrible. Horrible. 400 billion npls. Lets do a pairing that no one wine connoisseur has ever done. Brexit and negative Interest Rates. All right. I dont think the issue is whether the uk leaves or not. Its all about the eurozone, because if the uk leaves, they could have a mass exodus. If they dont, the rest of the countries have a stencil. You dont like spanish and italian banks. Maybe, like the japanese bank, bank of tokyo, mitsubishi, ufj, they dont like negative rates. Theyre squawking. Commerce bank is squawking. You see where im going here . Mario draghi might be doing more to the exit side of brexit than any other human on the planet. You comment on all that. No question, rick. Brexit is not about the uk leaving, its about setting a road map for other European Countries being able to leave. If a simple yes or no gives them the ability to leave, italy should be leaving now and convert back to the lira so the banks can make some money to start writing off things. Its horrible right now. If you look at equity markets and what theyve done in countries where theyre at negative rates, theyre horrendous, and its not going to improve any time soon. The velocity of money is stopped. Commerce bank, like you just mentioned, theyre now renting vaults all over germany in order with billions upon billions of euros there because they dont want to give it to the ecb. You think that moneys going to make it back out . I agree. Were out of time. Ive got to go. But i urge everybody to read some of the things ben bernanke wrote about years ago about measuring money to see if theres enough room to store it for these same reasons he decided to go qe. Our central bankers have been thinking about it, but yet when you really ask them about it, you get nonanswers. Andy, thank you. Simon hobbs, back to you. You put it in a very succinct way, rick. Thank you very much. Coming up on the program, huge win for cleveland in the nba playoffs last night. The next game friday, and viewership, importantly, setting records. The head of the Nba Players Association will join us next. And heres a live shot of the white house. Bernie sanders, of course, set to arrive for his meeting with president obama any minute. The big question, who will make a statement and exactly what will they say following that meeting . speaking japanese oh watson, your japanese is very good. Thank you. speaking japanese exactly. I can understand nuance, context and idiom in seven languages to help companies all over the world with everything from retail solutions, to banking, to cyber security. speaking japanese every year, the amount of data your enterprise uses goes up. Smart devices are up. Cloud is up. Analytics is up. Seems like everything is up except your budget. Introducing comcast Business Enterprise solutions. With a different kind of network that delivers the bandwidth you need without the high cost. Because you cant build the business of tomorrow on the network of yesterday. Well, we saw the cavaliers beat out the warriors in game three last night, and the behind the scenes, the National Basketball Players Association is working out a new cheollecti bargaining agreement, and joining us this morning is Michelle Roberts the national Players Association executive director at post nine, and welcome. Great to have you here. Thank you. It is nice to be here. And one thing that is standing is out the tv ratings, and what do you think that it counts for the health of the game right now . The game and obviously the quality of the players says it all, but the game has been growing exponentially for year, and since the last collective bargaining procedure the gate receipts are way up, and the sponsorships are way up, and as you know, the game, you paed the point that viewership is way up. And the values of the franchises. Increased 240 from 2011, and toe the players salaries have gone up 15 which i will make that point. But the game is in a great place, and it is not surprisingly, a much more lucrative enterprise for the yoown ers. What leverage does that give you in a new cba . Well, those guys on the court, those are the players, and we are the people who p produce the product. Frankly, we are the engaged in the negotiation,s right now, and things are going well, and we all understand that we want to continue the momentum, and so, i cant go into details about the negotiations, i will say that we are behaving like adults, and we will get a new cba in record time. And fill us in for those of us who are new to this and how succe successful have you been in the past, and do you feel that you got good deals through history . Well, i cant say much, because i was not there. And that legacy must play through for what you ask for this time presumably. And again, we were negotiating the last time the games Economic Health was not nearly as good as it was now, and not the same pressure that the owners toer players may have had. And again, the players are looking at a new tv deal bringing in 9 billion and negotiating at a place where everybody is happy, and everybody is making money, and this is why i expect to get the deal done without too much disruption of the game. And when you divvy up the credit for all of that, steph curry, silver, Something Else im not thinking of . What is driving that growth do you think are from the personality standpoint . Well, the quality of the game is just improved. Look at the players that we have. We have lebron who is phenome l phenomenal. And kobe and jor tan were not slouches either. And i guess not, but part of what is happening is that the more people have had an opportunity to see the game, and the viewership is up because more people are seeing it and International Interest is growing as well. We are playing games in europe and africa and games in china, and not surprisingly to me at least as a longtime basketball fan, the more people watch the game, the more they love it. Are there things to bring to the table to boost that salary structure, and could you offer to do more International Work . What kind of other cards to play in this sense . Well, again, i have to stay away, because we made an agreement the commissioner and they we would not negotiate in the media, and we are jointly vested in growing the game. And where would you grow it . What kcountries are particularl on this . Africa is huge promising market, and we had our first game in africa last summer, and we intend to replicate it again. Australia. And theustralians love basketball, and there is an the effort to have a game in australia, and the world is available. We have had games in south america, and london, and the league is committed as are the players to be committed to make the game grow beyond the four corners of our domestic market. And in terms of the salary, how important is that person managing the cap on all of the team, and the level of complexity dealing with the salaries in the nba, and as a knicks fan, watching what they can achieve and not achieve seems fairly high. Well, the cap is consistent with the growth in revenue, and the reason that the salary cap is going up, it is frankly, because the game is profitable. And it is more complicate and that the normal salary compensation, but it can be done, and there is a cap specialist of every team, and we at the union as well, and so the easy part, everybody wants the revenue the to go up, and the o owners want the revenues to go up, and so do to the players because it is good for everybody. And do you want the players to go to rio . Well, the piece is the players health. C curry has been playing with 24 additional games, and batting a knee injury, and we want to see great basketball, and they are among the greatest basketball players in the planet, and if their bodies are el thing them to rest, rest. Michelle, thank you for coming in, and so good to have you. Michelle robertson of the Players Association. Thank you. Now, over the squawk alley with jon fortt. We will dive into apple, and the potential impact, and also, bob iger the disney ceo on the new theme park in china and also perhaps some movement on movies in china, and finally, bernie sa sanders and president Obama Meeting and are we closer to the moment that we are certain of who the candidates are, and traders like real certainty. All of that and more coming up on squawk alley. man oh, looks like we missed most of the show. woman and theres no way to restart it. jon bon jovi with directv there is. You see, weve got the power to turn back time so lets restart the show that started at nine and while were at it, lets give you back your do and give her back the guy she liked before you hey, thats the power to turn back time. vo get the ultimate allincluded bundle. Call 1800directv. Steve, other than making im here atme move stuff,rade trader offices. What are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. Td ameritrade. Good morning. It is 8 00 a. M. At uber Head Quarters in San Francisco and 11 00 a. M. At our headquarters and it is live squawk alley. Good thursday morning, and welcome to squaw