Transcripts For CNBC Squawk On The Street 20160825

Fwa the ceo addressing the epipen controversy. Tiffany beats estimates but struggling with a drop in tourism and the dollar store is under pressure, continued weak Earnings Guidance for the year. But first up, mylan taking action in response to criticism of that epipen pricing. The Company Announcing it will cover up to 300 of the allergy drugs outofpocket costs at pharmacy, reducing a patients cost exposure by 50 . Also doubling eligibility for patient assistance, eliminating outofpocket costs for both uninsured and under insured patients. Moments ago on squawk, Heather Bresch was asked why mylan didnt lower the list price on the drug. Heres her response. Had we reduced the list price, i couldnt ensure that everyone who needs an epipen gets one. So went around the system. This savings card is equivalent to cash, 300. Effectively were cutting the price in half, but were letting you take control of that. Were letting the patient take control of that. We enhanced the we enhanced already existing programs. These programs existed but this phenomenon, which is new, and literally has happened overnight, people dont understand their coverage and how could they, it is complicated. It is complicated, jim. She importantly is linking pricing to universality availability of the product. Well its a key part of her argument. Another way to put it if you can get away with jacking things up and gouging it, then you got to do it because the shareholders want it. And as someone whos well off enough to have one and you dont need two, you need a store hold of them, so its still 300 whatever, where you can get away with it. Theres no competition. Supposed to be competition. I have the competitor with me. The one that the fda doesnt like. But i have to tell you that i think that one of the things that weve seen over and over again with generics is that if theres only one Company Making something, this is basically about to be generic because of the other guys they can take it up as much as they want. Is this was this outrageous . No. Its par for the course. What they do. They just got nailed. You think valeant is sitting there saying hey, you know what, wow, im glad we didnt raise prices. Im glad we werent interviewed by Brian Sullivan. Wow. Lets sit down. Joe papa sit down with brian and how many did you raise. Whatever you can get await in the system you do. Is our country a better place . Absolutely. But our country allows this when you have one product. A lot of Generic Companies stop making certain products. They just stop doing it. And then boom, you know. Take them up. Yeah. Times this morning dissects that timeline of when teva was coming. Wasnt that good. And they regained this monopoly, the argument being they tried to make the Getting Better while the get was good. I tell you, like i dont want to present my whole pharmacy, my whole medicine chest, but i have i have a injectable situation, another drug, that because some other Companies Dropped out, its about it costs about 350 to make and they charge me about 500. And its not talked about because, you know, the insurance wont cover it but its just it was the same thing. There was a bunch of Companies Making it, everybody jumped out, a delivery system, made by one of these companies im not going to mention it and, you know, i its its about 70,000 a year. Thats a lot of money. Yeah. Now i manage to go through some website and get it. Im not going to go into specifics other than to say the only reason i can afford this is i happen to be very lucky to have a decent paying job. Is the solution here to start improving drugs faster . How do you avoid approving drugs willynilly. Look, i dont know. The one, look is this one this is the one they pulled. Okay. This is the abuq. My doctor said its fine. Okay. This was a great competitor. This is tevas product. The other guys product that was pulled for allergic responses. Im glad i have it and i carry i have five of them. There is one everywhere. Do i know when im going to im not presenting myself again as like these kids, okay, because i have great medical care. I am i am lucky to have all these. Unbelievable company that pays for this stuff. A lot of people fall through the cracks and this little thing is a lot of money. Okay. Just a lot of money. Im blessed to be able to afford it. I listen to these tragedies, this tragic situation. Look, you dont know when youre going to need it. And you dont need two. So i see mylan up in the premarket. Well think her defense was satisfactory to the shareholders . Until the real Donald Trump Tweets and says she should give it away and then Hillary Clinton tweets that i was unsatisfied, i listed on to Brian Sullivan, thats what she should do because it was a great interview, and shes got to take it down why shouldnt she lower prices. We should roll back value valeant, roll back these. I mean, im waiting for that. Look, i fda decides to pull this is two bottle thing. Fda decides to do it and the other drug i take, i can show you that one, you wouldnt believe it is if you made your own compound if you went to a compounding pharmacist, its 0. 001 of the price. I went up the food chain to my Health Insurer and they told me basically take a hike. Yeah. Yeah. It was actually im not mentioning names other than to say this is the system. And if you knew how little it cost to make the injectable thing that im talking about, you would be like, are you kidding me. And i have gone all over the country with every website around the world, some guy that makes it in north dakota, and i managed to save so its only 1,000. As bill george said yesterday this is not like gilead coming in with hep c. These tend to be very lowgrade technology. Is. Right. Its true, yes, im sure that mylan has done some things to do it. But i would say its emblematic. Epipen is so visible. There are hundreds of drugs like this. Right. People should know that. Cbs news, my doctor, has done endless stuff on this, used to be he happens to be my doctor. One advantage you might argue, to bresch is that shes a mother herself. She referenced that several times in her interview with brian. Well look, shes part of the system. The system allows it. I mean, the insurers allow it. Everybody allows it because they can get away with it. Other countries cant get away with it. Our country you can and our country its a shame, that our country is the supporter of these. Wasnt it Crystal Clear what she was asking congress to do, other than no. Address this no. It wasnt. And at one point she was talking about about being as outraged as everybody else. The people who have to buy these are like saying to themselves, i dont know, i think shes a little less outraged than i am. I think she can afford it too. Look theres a lot of people that dont make a lot of money in this country and dont have Health Insurers. We live in a world where theres have and have nots on this stuff. What is this, like 10 bucks. If its not covered, if its not covered youre history wiped out. One of the drugs, wiped most people out in this country look at the marginal, what people make. Wipe them out. Its not right. A few moments ago what you want to hear from some of the ben fit managers, right. They shouldnt be this should be a question for without competition you need to pit, you need to be able to pit two companies against or three companies or five companies and look, i just wish that someone that there was another guy on the market. You know, there was a series of articles about guys making something that could rival the epipen and im not im not an expert. I looked into it because of the process of getting something. You know, its personal experience. I dont like to inject my personal story. Im not again, i am so conscious of the fact that there are i got the money to do it. Sure. One more listen here, different bite from bresch talking to Brian Sullivan about mylan and her level of frustration regarding the episode. My frustration is theres a list price of 608. There is a system, there are i laid out that there are four or five hands that the product touches and companies that it goes through before it ever gets to that patient at the counter. No one everybody should be frustra frustrated. I am hoping this is an Inflection Point for this country. Our health care is in a crisis. No different than the Mortgage Financial crisis in 2007. That was interesting. Using the word bubble tying it to a mortgage crisis. Look its a capitalist system. I mean it is a capitalist system you need competition to lower price and we give whats interesting i have a lot of guys who do orphan drugs, and youll hear a price of a drug is 400,000 but United Health would have to pay 500,000 for the care. Its actually a bargain. Its a relative bargain. Health care costs a lot of money. Good Health Care Costs a fortune. We have the best in the world. We do. I mean, but yeah, mortgage bubble. I dont know. I mean, again, when we can be euphemistic. Instead of saying they get away with what they can, its aggressively priced. If its life saving its not like i can go to walmart and say listen, target has it at 7, you know, its not like you can go to amazon saying i can get prime, prime, these are not things that you just go to amazon prime. Theyre not shoes. We reached out to the centers senators and Congress People she mentioned in the interview. Yeah. What do they think . Well see if they get back to us. But clearly the episode is far from over. Got nailed on this one. Didnt they. And microcosm for larger theres guys right now in this business saying, thank heavens for her because i have to tell you maybe she sopped it up. If mrs. Clinton comes back and says i have a known list of 57 drugs that did this, you know, youre going to see a lot of activity. Yeah. When we come back this morning, big movers in retail that we havent gotten to yet. Tiffany Dollar General, dollar tree, interview with robert kaplan. You will want to hear him ahead of tomorrows jackson hole speech by fed chair yellen. 14 sessions the s p has moved within a 25point range. The narrowest band over this long a time period in about 20 years. Were back in a minute. Presidet of the north face, we are working on the prototype to match customers to gear. Watson, lets give it a try. Say its midjune and im backpacking in yosemite. Of our 353 jackets, i can recommend nine. Watson, what if it rains . There is just a 3 chance of rain, so i recommend the breathable stretch fleece fuse form dolomiti jacket. A Perfect Choice watson. No wonder our Customer Loyalty numbers keep climbing. I believe we can do even better. I like the way you think. I believe we can do even better. Ein streetlegal form. G lexus performance get great offers at the lexus golden opportunity sales event. Get up to 5,000 customer cash on select 2016 models. Ends september 5th. See your lexus dealer. Hole,. Tiffanys up in the premarket. The luxury retailer posting a better than expected quarterly profit helped by price increases and lower costs. Comps down a seventh quarter down 8 , largely being called a low quality beat because so much of this was sgna. They didnt guide down. Im used to them guiding down. I said wheres the guide down. I went through. Said not that paragraph. Where is the one about how were going to do poorly in the future. No. And then you get analysis, maintains its outlook. Oh, my god, tiffany and they didnt cut. May have been the tennis bracelet i bought for my daughters graduation. This was a relative for tiffany a good quarter. The 57, that ive made the 57 variety that thats just 57 varieties of heinz. I got it from [ inaudible ]. America down nine, looking for six. Europe down. Your point no change to the guide, not tiffany like. Its a win. If they cut costs they bought stock. Weve seen this throughout this retail period. Is the guys doing really bad, when they came out and said listen were done doing really bad, their stocks flew. Think about kohls, macys nordstrom. Nordstrom their release was like we thought we were like awful, but it turns out were just awful. When you stop hitting your head with a hammer, its better. And then a burlington, which was just much better than expected and you can still fly. Dollar general and dollar tree, we will talk about that, they basically fell the dollar tree and its dollar like sergeant. Theyve been strong. Both falling sharply today. Weaker than expected comps. They got negatives. Doug mcmillon is up ending the retail world, doug mcmillon. Walmart is driving everyday low prices like in the old days when they put out of business a lot of companies. Dollar general, in line, and again, reiterating fullyear guidance in the 10 to 15 range. I thought that was interesting given the fact of how really kind of subpar it was. You know, go over these, talk about samestore sales of plus 7. I was looking for plus 2. 6. And then they this was one i loved this. Im not making it up. These are good merchants. Im a dollar tree got, got the five readers i had on twitter last time. Unseasonably mild spring weather. Okay. What, does that mean you boughts less. You didnt go back to the freezer or something. No one else cited unseasonably mild spring weather of the companies i deal with. Thats a i mean even unseasonable. I thought that was curious. Raised eyebrows. Somebody said at walmart, the ghost of sam walton must be going up and down the aisles saying they picked the right guy. Do you agree . Oh, did they ever. I mean, raises prices for the workers so they dont go across the street to another store. And it also created a kind of an environment where i dont know, be i like to go to every single store. If faber were here he would be making fun of me. Walmart, theyre livelier. They kept the employees for once. And yeah, he is the right guy. Hes taking no princers. He changed english photo shop that wasnt doing that well. They have made it so that you are very conscious that theyve cut prices. Theyre and they jet. Com, i am sure that thats going to be algorithmically a challenge for amazon. Real challenge. Im very impressed with mcmillon. You know, hes kind of used this term, boyish. Probably heard that forever. Boyish since he was a boy. Probably will for years. I would like to be boyish. And meantime we continue to watch this earthquake yesterday in italy. The death toll continues to rise. Nbcs lucy kavanov is there. Good morning once again, lucy. Good morning, guys. Its been quite hectic especially in the hours since weve spoken. Just moments ago we experienced a powerful aftershake and earthquake aftershock pardon me, 4. 3 magnitude. We were in the street, the ground shook the buildings rattled. There is a construction site where a hotel had collapsed and rescue workers had been for hours now overnight searching for anyone who might still be trapped in that rubble. Down the road from me, we saw a massive plume of smoke and dust in the aftermath of that aftershock. Several ambulances had come down to the scene but were not hearing any reports of casualties from that specific incident. But rescue workers are racing against the clock, time is running out, but one thing they keep reminds us, the fact that back in 2009, when that deadly laguila earthquake took place in a similar region more than 300 killed there, they were still able to pull one person out from the rubble who survived for 7 hours. They are still 72 hours. They are still optimistic despite the fact that time is running out. Questions remain about the italian governments responsibility in terms of reinforcing the buildings here. This area is on a fault line. It lies between two tectonic plates prone to earthquakes and one of the reasons why the devastation here was so sig can nant you have ancient stone buildings sometimes date back to roman and Medieval Times have not been reinforced and folks will be asking whether more should have been done to reinforce the buildings here which have been effectively flattened and what to do about the remaining towns that are still standing. Guys . Lucy, thats going to be a much longer term story. Thanks to you, lucy this morning. That was went from being 37 any life is bad, 37 to a dramatic number. People dont know whos there. Thats my daughter was visiting that area three weeks ago. It was a very its an area that everybody goes to. Yeah. At a time where a lot of vacations and honeymoons. Thats what was going on. When we come back ralph nader will join us live with reaction to mylans move regarding the price of the epipen. But first well get cramers mad dash ahead of the opening bell and a look at the premarket which remains in the red. Back after a break. 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 lets get cramers mad dash watching sears as you say reaching that their bag of trix. Talking about monetizing kenmore, diehard, craftsman. Why is that . Because theres closing stores, the really, really, really bad stores, sears, minus 7 comps, 3. 3 for kmart, accepting 300 million loan from Eddie Lampert who runs the company. They always sound like theyre doing so well. Its kind of like the common term. Like wow, were killing it. And i do want to point out that there is something Jc Penney Marvin Ellison said on the recent Conference Call one of the reasons we are in the appliance business the first place because we observed a potential opportunity. Sears. Jc penney on its call says that sears is a good reason to buy jc penney. Hes right. Yeah. Pointed out this morning, comps have never been positive. No. With lampert as ceo. No. To what degree do they care about the Retail Operations . People will say its going to go down. Theres its a little tesla like. Not the car. Just the stock. In the sense that people who are in sears like Eddie Lampert some of the institutions dont let it come down, theyre buying. The tricks never stop here. And that theres they talk about a variety of potential partners, get you in, kmart, diecle hard, craftsman, keeping the balls juggling to make the money for the holiday season. You know what, look, just go there and tells you about it. Peter lynch in reverse. Money manager who said if you go to something you like it you go and want to short it. We will on that note take a break and come back with the opening bell in about five minutes. To buy t [announcer] is it a force of nature . Or a sales event . The summer of audi sales event is here. Get up to a 5,000 bonus on select audi models. Youre watching cnbcs squawk on the street live from the Financial Capital of the world. Opening bell in two minutes on this thursday as we wait for yellen tomorrow about this time in jackson hole. In the meantime we have durables up 4. 4. We werent supposed to have anything we were supposed to be on hold, dollar tree, Dollar General, burlington,vs, workday, earnings galore, back in the third week of the month last month. A little bit. You talked to chirico last night. Manny put up a good number. Inventories being lean, the Department Stores doing pretty good. Didnt say fabulous but doing pretty good. Europe is the leader. This is not alone. Europe proving to be a leader in a lot gas reported great number. Citing europe. Tiffany, brexit, europe is stronger. Their rates are too low. I dont want to sound like europe or here . Europe. Geez, everybody many of the companies i deal with in europe and by the way the euro annualizing, saying look, tleadr is not the United States. Its europe. Calvin klein, pvs, europe is the leader. Uk july auto manufacturing up 7. 6. Some of the postbrexit data not supposed to be. No. Not supposed to happen. With that lets get ready for the opening bell and a look at the s p at the bottom of your screen. The big board its the United States Tennis Association and ten miss player milos raonic celebrating the u. S. Open which begins monday. One of the greats. Good time in new york city. At the nasdaq the american red cross. Raising awareness for the thousands of americans impacted by the flooding in louisiana. Where theyre expecting more rain as the system works its way into florida and beyond. Feel for those people. That is one fabulous terrific tough group of people down there. Tough. Yeah. You mentioned ph. What was your take on workday . Billing they have a couple numbers very hard to read. One of them is, theres whale a reacceleration what people need to know. A deferred revenue stream that is gigantic and that really because of the rateable way that cloud companies, its the actual cash in it, just i dont like to say trust me but a subscription business and you cant take it at once. Free cash flow good, billings 38 . The theyre talking about a wow moment on the Conference Call for the finance business. When companies merge, they often benefit. Emc they got a big benefit. Huge benefit from ibm but the most important thing they want samsung and samsung is probably the biggest chunk of business out there. They want quantities. But when you get samsung, oracle, everybody. We dont know, but that was big win. Remember oracle does not like these guys. Right. And neil bush would respond hes not trashing oracle but saying strongly that net suit oracle accuracy sigs will be good for him. I dont want to say good interview, i watched Brian Sullivan do a complete eviscerati evisceration, difficult, tough, interview, she came back at the end. You know what i mean. An interview where he was showing you exactly why hes killing it. Hes killing it. Thats going to be all pretty easily 52week high. Lot of people short it going into the quarter. A note that came out that earlier this week saying theyre going to miss. Another note saying morale is bad, finance is bad. I think morale is great and didnt miss. They beat. The headline earnings number is not nearly as important as the billings here. A quick listen to what the workday ceo told jim last night. Positive operating margin and that really is the leading indicator for us. First quarter, we were around 3 operating margin and here slightly less than 2 operating margin. Weve moved into positive territory and if you look at our Free Cash Flow i would look at that on a trailing 12 months basis because its lumpy quarter to quarter based on Capital Expenditures and we had very healthy Free Cash Flows over the last 12 months. And thats important because a lot of people say wait a second, they lost money, jim. Why do you like it so much . Its a Free Cash Flow story and its a growth story. They are taking from the playbook of mark benioff who everyone said when is he going to show profit when he has such scale he can tart making a lot of money. They happen to be best friends. The same playbook that was so successful for salesforce. Among the big losers are the dollar names we talked about. Sig net down there. Hp. Oh, krig net. Hp. I thought they would do better. On pcs they did well, terrible on printers. Just disjointed Conference Call but one point i thought got a little lets just say illadvised exchanges. Really . Made to feel like perhaps the company is way behind where we thought they would be at this point in terms of cost savings. It was not a great Conference Call and the stock sunk i think because they were being challenged at a lot of their plans are just not being met and the company saying our plans are being met. Disputes on the call, rebellious the word to use. How do you skaur square the circle on tiffany one of the biggest gainers and sig neth losers. Signet had you always get gun shy when long the stock. First thing out of the ceos mouth in the quarter was, that hes disappointed with the numbers. Now they just they had a rather remarkable down 2. 3, people looking for up numbers, zales down 3. Deutsche bank looking for a plus number, jpmorgan, and they came in and said we are disappointed with our Second Quarter sales and they should be. This company is also remember, its a Credit Company that gives you credit to buy their jewelry. And the models being called into question and the quarter was as they were tough on themselves but doesnt matter. That was bad. Big miss. Couple of upgrades today. William blair on netflix has some they upped to out perform. One of the things talking to my kids about netflix, millennials love netflix. If they can make it so you cant share passwords they could make more money. Unappreciated original content. They think the longterm target of 60 to 90 million subs is attainable. I know. Go so far to say they have the best shows. They found proprietary empirical way to demonstrate it is true. When you sit down with a company they have had a tremendous reups. Thats how they look at it. How the Major Networks have to cancel shows they dont cancel doing the next one, everyone is waiting for the next narcos. 50 upside. I think people want to know, this laid out the ultimate bull case for it. Jay hogue bought all the stock the board member and i feel like netflix, a lot of people feel it has to catch up to amazon. It has to catch up to fang, to facebook. Yeah. And i think that the truth is that its had a big run and its been resting. Not that its over. The last two quarters were subpar. The other upgrade is on rig. Citi takes it to a neutral. Theyre in business, going to stay in business, cut the cut enough of their fat but i have to tell you, the rigs keep still being pumped out of korea. Just such a glut of rigs. As many rigs as there are they made all these rigs. Takes forever to make rigs. When oil going to 100 starting to make a lot of rigs and you cant shut down the making of rigs. Theres a glut of rigs and no place to drill. Because its so expensive to drill in some of the places. Even gulf of mexico, when i was on a rig, oil was 100, everyone was like celebrating. No. I mean you dont need these rigs. Yeah. Little macro here. Sure. We mentioned durables, claims were good at 261. Were going to get revised gdp tomorrow with yellen. Thats why. Housing. People wondering whether stocks know something treasury dont about what rates should or will do. Well, i mean, the rates i will draw a conclusion that is proquarter point rate hike. What youre seeing in the quarter is maybe walmart eviscerated again, Dollar General, dollar tree, or people willing to pay up. That people are going back and shopping last year Manny Chirico said backtoschool was a disaster this year good. Willing to buy full priced merchandise. Pricing from toll is good. One and done people will be sanquine. Certainly easter george, long time dissenter said the time is right for a near term hike. Excessive patience not warranted. Look the employment numbers are good, housing numbers are good, the retail numbers for a lot of mainline Department Stores are very good. Weve got, you know, look the job growth is consistent. The market can handle her saying janet yellen saying september should be back on the table. Quarter point provided we have to wait, dont really have a im looking at the European Data of brexit. Plummet overseas and panic like with china they would have an excuse to the to do anything. I could make a case for a rate hike. Until we get wage increases but the Housing Market is strong. The Retail Market is very, very good. When you see the Dollar Stores go down and you see the full priced guys go up, that is a bullish situation. Yeah. Thats you know Toll Brothers selling houses for 838,000. We will find out if were in a moment soon. Im not sitting here and saying wow, im sweating the program. I think if janet yellen says we could raise, were going to think about it this year the market wont be traumatized. In the meantime watching the dow, bob is on the floor with more. Good morning, bob. Good morning, carl. Financials a leader right now. Retail is the laggard. No surprise here because youve mentioned this morning, samestore sales still an issue for the retailers. Go through this quickly. Dollar general i think the important thing here, penny light. They did confirms the fullyear Earnings Guidance here but Comp Store Sales up 0. 7 . The kconsensus was 2. 7 . That was a disappointment. Food deflation and reduction in food stamps as an issue but the competitive environment had, quote, sbeintensified. A reference to walmart there and something a lot of people are holding on to here. Reaching on. You see Dollar General down 11 . They authorized a 1 billion buyback there. 1 billion. Thats 4 of the market cap of the company. Remember what happened with Toll Brothers yesterday. Essentially had buybacks of about 7 of the company. These buybacks are still very much a factor. Dollar general you see has had a good year up 27 . Williamssonoma light on samestore sales. The numbers werent that bad but look at the number here. 0. 6 for them. The number i had was 2. 8 on samestore sales. Thats again a little bit of a disappointment. That ecommerce number 51. 7 . Holy mackerel that company is flying at the top of their speed there for ecommerce. Never seen a number that high for any other retail. Thats good. But the ceo said the overall retail environment has softened and we are being impacted by a more cautious consumer. So again you get the slowdown that weve heard from everybody else in the last few days around retail here. Guess is doing great, really up big right now. They had better than expected. The european results a bit on the surprising side so thats a 21 move up in guess. But again, the same story with Comp Store Sales the numbers keep disappointing. Compp store sales down 2. 5 . Believe it or not that was better than expected overall. This is a good number. But weve had 23 straight quarters of negative quarterly comp sales decline. This according to retail metrics. Bear that in mind when seeing the number. 2. 5 down, better than expected. Its been going down for a long, long time. Tiffanys up big, reaffirmed their guidance. Thats good news. They had a very tough year, remember, whats been going on with them. They were down about 10 for the year. Remember this stock was 110 a year and a half ago. So theyre reflecting the tougher environment. Look at the samestore sales here and i know the numbers were better than expected overall but asia pacific down 9 , europe down 13 , america down 9 . They talked a lot about the decline in prchurchases from tourists in the United States from china. This is a theme weve heard many time overall. If you want to know what weak oil is doing, how does that impact the retail environment did you see what signet big miss. Down 2. 3 and lowered full year guidance by a dollar. Went out of their way to say the decline was broad based across merchandise categories and particularly pronounced in Energy Producing regions. People have less money and the Energy Producing region goss out and buy less jewelry. Right now the Dow Jones Industrial average down 28 points. Carl, back to you. Bob, thank you very much. Bob pisani. To the bond pits as well. Rick santelli at the cme this morning. Hey, rick. Hi, carl. Weve talked about it, the curve is flattening dramatically today. I wonder why. Maybe jackson hole. Look at the two day of 10s, definitely we had some decent durable goods. Headline was good. Proxy for business spending was good but one good month or two good months doesnt save that dynamic and its something to Pay Attention to. A one week of 10s, to the top of the range. Bund yields, bunds didnt have their julius preliminary durable goods but is the oneweek chart like the oneweek 10s tethered at the hip. Open it up we know weve been talking about the compressed ranges whether its fixed income whether its the stock market, august 1st of 10s, going to the top of the range, but havent broken through. However, that 2s i referred to the flattening curve look at 2s since the beginning of august. Hey, they broken through to the other side. Open the chart up to brexit, 6 23, thats the last time yields were here. I know were only arguing a couple basis points being at 78, but its very important. We looked at the auctions thus far saying were looking for investors at least for a dovish janet yellen. That doesnt mean anxiety doesnt enter into the equation. The clock is ticking. There could be surprises. You never know when you put a microphone and academic together what may happen. August 1st of the dollar index 2s are going up, maybe reflecting nervousness or at least position anxiety the dollar index will have none of it still on the soft side. Carl, back to you. Rick santelli in chicago, thanks. Oil prices something to watch. Well get nat gas inventories today. Jackie deangelis at the nymex. Hey, good morning to you, carl. Were seeing some residual pressure on oil prices from the inventory number yesterday. Trading a little bit over 46. Now the 50day moving average thats where the support is. 45. 52. Watch that level very closely. A close around 46 or under it today, could mean that we see more pressure to the downside. Meantime traders are keeping an eye down south on storms. A Tropical Storm over puerto rico concerned this could turn into a hurricane and potentially move over to the gulf. No threat of that yet but it defl live is something to keep an eye on. The dollar something to watch as well ahead of yellen speaking tomorrow in wyoming. Thats also having an impact on gold prices which are lower. The lowest price that weve seen in a month, 1321 the intraday session low for gold today. If we hear more dovish tone out of the fed we could see gold prices move. Thats an interesting trade. As you mentioned 10 30 natural gas inventories also been a volatile trade up nearly 7 in the last week alone. Well get you those numbers and talk to you soon. Jackie deangelis well talk to you in a bit. Thanks with Janet Yellens jackson hole speech a day away, a live interview with dallas fed president robert kaplan. Also ahead, ralph nader is he satisfied with the steps mylan are taking to address the epipen controver controversy . More squawk on the street back in a minute. Approaching medicare eligibility . You may think you can put off checking out your Medicare Options until youre sixtyfive, but now is a good time to get the ball rolling. Keep in mind, medicare only covers about eighty percent of part b medical costs. The rest is up to you. Thats where aarp Medicare Supplement Insurance Plans insured by Unitedhealthcare Insurance Company come in. Like all standardized Medicare Supplement Insurance Plans, they could help pay some of what medicare doesnt, saving you in outofpocket medical costs. Youve learned that taking informed steps along the way really makes a difference later. 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Go long™. Does uber have a big spending problem . A new report shows that uber lost at least 1. 2 billion in the first half of the year. The giant hosts a Conference Call with investors despite being a private company and according to bloomberg reportedly lost over half a billion in q1, losses accelerated in q2, roughly 100 million of the losses from the u. S. Most of the losses are seen overseas. They dont reflect the china deal yet which happened in july. In fact, the report suggests this could be the nader for some of their losses. I think that theres a half Dozen Companies that i think we all accept are allowed to lose a lot of money because they could be amazon, obviously amazon being one of them. No one expects uber should be making money because theyre in a grab. They wiped out lyft, lyft still in business but in terms of blunting them talking about what that company is worth, uber wins the world they can conceivably start taking up prices. I think its now pretty well known uber doesnt make money at all and shouldnt be a shock to people. They do point out at this scale you would have to be looking to amazon in 2000, for companies increasing their market value, while losing large amounts of cash. I like the fact that there are a couple things you will pay for. Millennials will. A lot for an apple phone, cosmetics because of the High Definition of the apple phone and uber. Uber is something that parents like. I follow my kids where they are and the kids like because its one of the great windfalls. It is a loved product and sometimes loved products get to be great stocks. Youre not going to link it to the lyft report of unicorns having trouble finding buyers. Im i think that this is a product millennials love and Many Companies are hoping to find a millennial that likes their product. This is a loved product. We all have it on our you know, i follow the kids everywhere. They can get away with nothing. If you live in pittsburgh before you know it you might get into one not driven by a human being. I know. Singapore, pittsburgh. I think that its look, we dont want kids out there having too good a time to want them in a cab. That is part of the Game Changing part. Drunk driving. I mean lets if you can stop that, anybody can stop that thats great. When we come back we will get stop trading with jim and cover the names we havent gotten to yet. Dow is in the narrow range down 17. Dont go away. Mapping the oceans. Where we explore. Protecting biodiversity. Everywhere we work. Defeating malaria. Improving energy efficiency. Developing more clean burning natural gas. My job . My job at exxonmobil . Turning algae into biofuels. Reducing Energy Poverty in the developing world. Making cars go further with less. Fueling the global economy. And you thought we just made the gas. Energy lives here. Time for cramer and stop trading. Listen to the whole Conference Call. Williamssonoma down on the headlines but as the call went down, west elm 15. 8 , comps offsetting what people were concerned about with pottery barn. What a job here. This is the digital retailer and theyve done a fantastic job. Softening retail environment mentioned but everyone knew that. So this is one where we mentioned the top of the show, if everyone thought it was going to be bad and it was less bad, it flies. So thats what happened. We talked about i talked with Manny Chirico about fashion, fashion inventory. People who have fashion are doing well. Lulu reports next week, opco saying look this is going to be a praekout quarter. A lot of things going right for lulu. Some think its a one trick pony. I think its a good pony. 38 . Good supply chain. Really got the costs right. Citi makes williamssonoma their top backtoschool period pick. Yes. You mentioned that. They have they talk about halloween sales and back to school. Listen, maybe here and then going up during the quarter. That was the key phrase on the Conference Call. Should have mentioned that immediately. Yeah. Then we had this National Retail federation survey already looking at holiday. I think their numbers are in the high 3. Last year 3. 4. I think it will be better than that. People have to start realizing when you dont have inventories you will pay full price. No reason for a price cut. We will have to pay more. That would be different. I mean inventory control into the two big seasons. Manny chirico saying last year disaster, tis year normal. Normal and regular weve not heard in a long time. Too many stores he thinks the beginning of the store closings will be bullish. Macys is the beginning of the recognition that you know what we have too many stores and companies are taking action. I am a little more positive in retail than most. But when i see the Dollar Stores go down my first read is people are feeling better about themselves not shopping as much at dollar tree. Im a dollar tree because the bargains are incredible in the candy aisle. People they trade up in better times. Trading up. They tend to when they feel like trading up. Getting a raise and having a job security. Mad money tonight what are you going to do. Company called red sale, cyber fraud. The Cyber Security and cyber fraud stories all over them for mad money. This is a private one. People always want fireeye as a takeout. Focus on the cybereye. Quarter okay, and palo alto. Im not a fan of the group because its overheated but right now in this they dont talk about the big i had a buddy hacked bad the other day. Doesnt make the papers. They dont leslie jones, i mean theres still still going on. Its happening. Theyre all ransom hacks. In other words, people are paying without you hearing about it. Jim, look forward to it. See you tonight. Big time. Big day tomorrow. Mad money tonight 6 00 p. M. Eastern. When we return dallas fed president kaplan as we count down to yellen in jackson hole and ralph nader on mylan and the epipen controversy with the dow down 23. Hey gary, whatd you got here . This bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade good thursday morning. David faber is off today. A wlots to watch as were about exactly 24 hours away from yellen, retail, some of the lower cost retail names not doing well, but all of this in a Holding Pattern until we hear what the fed chair says tomorrow. Where we begin our road map. Out in jackson hole, moments away from a first on cnbc interview, with dallas fed governor robert kaplan. As pressure builds on mylan, former president ial candidate ralph nader weighs in on this epipen controversy. And watching retail as tiffany rallies after strong earnings report. Well break down all of those numbers for you. But first, our top story is mylan shares higher as the Company Announces it will cover up to 300 of the outofpocket costs for epipens after widespread outrage all week long. Mylans ceo Heather Bresch explained why it couldnt just lower prices on the drugs earlier this morning when she spoke on squawk box. Have as listen. Had we reduced the list price i couldnt ensure that everyone who needs an epipen gets one. So we went around the system. Thats what we announced today. This savingses card is equivalent to cash, 300. Effectively were cutting the price in half, but were letting you take control of that. And as carl mentioned former president ial candidate ralph nader consumer advocate joins us to weigh in a little bit later this hour. Mike, not sure she made the case as to why they couldnt just lower or cap price. She seems to want to focus the whole supply chain, focus on the entire supply chain for drugs and basically say there are all these friction points in there and wouldnt have been an efficient way to guarantee the end consumer would get the benefit of this rebound or discount. Rebate or discount. The markets interesting response betting the Attention Span of the world just isnt that long when it comes to these issues and maybe kind of inflating. There is pressure on those pvm description. The pharmacy manufactures. Clearly not going away. Members of Congress Calling for hearings. Yeah. And president ial candidates weighing in. Thats definitely true. Meanwhile, investors watching jackson hole where fed chair janet yellen is set to speak tomorrow morning. St. Lou Steve Liesman is joined by a special guest. Hey, steve. Carl, remember yesterday we had clouds on the tetons and take a look now, its gorgeous tetons in the background. I think you will see more in a second. Introduce my guest here, dallas fed president robert kaplan. Thanks for joining us. Thanks, steve. Let me begin with our fed survey, which shows that 60 of our respondents say i mean, basically the fed is making it up. They dont think theres a framework, 47 to 37, they say, the fed is going from the latest economic data. Not going on the medium term forecast. Is that the right way to think about it . Are you making it up . Of course not. Part of the challenge fed is adjusting to that and whats happening is, is a lot as many have said, the neutral rate which sounds a little wonky but the natural rate of interest has been declining and a period of transition where the fed is adjusting to that and i think our job is to communicate much better than we do. How were thinking about the economy and why we do what we do . That all may be true and it is. However, what i hear is reports economists have a ton of reports that say, if the fed if theres a strong jobs report in september the fed may hike in september which essentially says that the next hike is based on a single jobs report. Yeah. Thats not i can only speak for myself. Sure. As you know from talking to me, ive been focused on fundamental drivers that are driving the economy. Aging demographics high levels of debt to gdp high levels of disruption globalization and so all everything all the existing data is within the context of longer term, more medium term drivers and so no one jobs report is not going to drive our thinking. I do believe the case for removing accommodation is strengthening but i wouldnt get into saying which meeting its going to be at or talking about the calendar. But i think for most of us and ill speak for myself im focusing on a longer term, medium term, forecast dynamics of economy and shortterm data either confirms your thesis or undermines it and you have to revisit what youre thinking. Let me go back and ask the question that everybody wants to know on street, can you make a case for rate hike in september if the jobs report is strong . Im going to stay away from talking about an individual meeting because i dont think its productive and i think history has shown that more it can create more confusion. I think what you see is were making progress on the employment front, and labor slack is coming out of the labor market. Were making frustratingly slow progress, but some progress on inflation. And i think that the gdp growth in the second half of the year will be stronger because the consumer is strong and even the Second Quarter gdp number which was disappointing, was disappointing because of an inventory adjustment but final demand was, in fact, strong. Yeah, i think the case is strengthening. Im not going to speculate on which meeting. Can you make a case for a rate hike this year . Im going try to be disciplined and i think you should conclude from that i think in the not too distant future if the facts continue to confirm the thesis i just described, i think were moving toward being able to take another step and ill leave it at that. Sara eisen has a question. Its good to talk to you again. Sair a eisen. How are you . Recently said the bond market is broken. Do you think your policies and those of other central bankers around the country are distorting markets . I think the fundamental thing driving the bond market is liquidity in the world and a desire, a search for safe assets, a search for yield. I think that would be going on independent of the fed. I think the one thing i am conscious of is, there is a cost to rates fed funds rate at this level. It can create potentially, a desire to take more risk, it can distort markets, it hurts savers and to that extent its an element of what paul singer may be talking about. I think the predominant driver is whats going on globally in the search for yield. Robert, a lot of talk out there about the possibility of raising the inflation target. Some are saying a 3 target would show that the fed is symmetrical about 2 . Theres also talk about a targeting nominal gdp or price levels. Do you have any thoughts. Should the fed go to a 3 inflation target. Its a healthy thing and as a former business person, i think its always a healthy thing for the fed to periodically rereview its framework. At this point, i would need to see a lot more information before i would say i want to change our targets. You know, were we are weve been frustratingly slow to meet our 2 gdp target and to me that would be mean i would be hesitant to raise the target beyond 2 unless we have other tools we plan to use to help achieve a higher target. So no, i would want to keep the target at 2 . But im very open for us to rereview our frameworks nominal gdp targeting has a little more appeal for me because gdp nominal gdp is so important. But i dont think im in a position too to answer of those things without a thorough review. Mike, go ahead. Thanks. Mr. Kaplan, how do Financial Market conditions play into the decisionmaking process right now. Financial markets quite stable at the moment, low volatility, a good recovery from that brexit shock. How does that filter into the committees process . I think the main thing i look at is our financial conditions conducive to growth. In january and february, we saw a tightening of financial conditions if those had persisted, i think would have caused growth to decline. I think right now weve got very good healthy financial conditions that are conducive to growth and its a factor, im always looking for threats of financial tightening or bouts of stability to keep that in mind. That might be driven by a sudden strengthening further strengthening of the dollar and destabilization outside the United States particularly china. But right now i think were in a sort of benign period here. You were just in china. Can you give us an idea, there was a lot of concern back in january. Yeah. That china was going to lead the world into a recession and thats backed off. And it seems like its not on the burner at all. Which one is right . The extreme concern or the benign negligence. Neither is right. Having lived in asia for five years china will be a challenge for the world for the next not two or three years but for the next 15, 20 years. Why do i say that . They have high levels of overcapacity and when you go there you can see eye levels of ov overcapacity. Theyre trying to manage gdp by borrowing more money and investing in state owned enterprise, Infrastructure Real Estate and at some point, the Chinese Government is going to have to allow gdp growth to trend down, without the crutch of government spending. So the world will have to get used to lower levels of gdp growth from china. Is it a source of Systemic Risk for the u. S. . Something we need to be watching for the foreseeable future and why, because one, chinese growth, i believe its reported to be in the neighborhood of 6. 5 this year. Its going to trend down in future years. Number two, because they have very high levels of debt to gdp and over capacity and almost doubled the level of debt to gdp, that creates some inherent potential instability that we just have to be aware of. Were the central bank of the United States but saw in january and february if you have instability and capital outflows and other instability in china, that can tighten financial conditions here. This is not something that is going to get solved over the next few quarters, next few years. This is going to go on for a long time and we will have to watch it for a long time which is why we went. Sara . I was just hoping to get your reaction to a piece by kevin in the wall street journal this morning, former fed governor. Yeah. Close insider wrote that, quote, the feds models are unreliable policy erratic and guidance confusing and politically vulnerable and if the economy is closer to recession than resurgence the fed is poorly positioned to respond with force, efficacy and credibility. The fed is vulnerable. Pretty scathing attack i would say from someone who used to be on the inside. Yes. So let me give this comment. I know kevin and think highly of kevin. Were at the stage where we need tools other than Monetary Policy to address economic challenges we face. Aging demographics. Monetary policy is not well designed to address that. We need policies that focus on growing the work force, Building Work force skills, education, probably need a regulatory review at the state, local and national level. I believe we need to revisit infrastructure spending. I think through most of my lifetime, up until the last seven years we had Monetary Policy, along with fiscal policy, and for the last 7 years primarily just Monetary Policy. And i think that period feeds to end and i think we need a broader array of policies to address our economic challenges. Robert, we would be remiss if we didnt draw on some of your expertise when it comes to energy which is a big deal in the texas district. Weve lost about a Million Barrels a day in the u. S. Of production. Are we at the bottom here and do you think that prices and the markets have found equilibrium . Yeah. I think and we think of the dallas fed that were if were not in balance now we will be in balance by the first quarter, first half of 2017. We still have record inventories globally to work off. And im talking about Global Supply demand balance. Prices may not go up dramatically but they will firm and you will slowly bin begin to see rig count stabilize and begin to grow. Marginly over time. 2017 will be a somewhat better year and the supply demand dynamics of the market are firming and stabilizing. When we talked last time, you had some of your business contacts wrp seeing the president ial election as uncertainty. Do you see it that way . Certainly a number of uncertainties out there, thats one of them. You know, weve been watching carolly business spend carefully business spending. Weve talked about this. Thats one factor. Other factors include weaker global demand, high rates of disruption by industry and all the things are putting a damper on Capital Spending and business spending and capacity additions and thats something to watch and Pay Attention to because the country needs higher productivity and we need higher levels of Capital Spending from businesses and right now its been very sluggish. Robert Kaplan Thanks for joining us. Thanks, steve. Dallas fed president live from jackson hole, wyoming. Back to you guys. Good stuff, steve. Thank you so much. Steve liesman for some reaction to that interview bring in art cashin, director of floor operations at ubs. Between kaplan and george now, commentary today is net hawkish. Would you agree . No. I think i heard a man who was trying to avoid ruling stanley fischers plan to keep every meeting open. He talked about the need for improvement in the economy. You heard from a man who doesnt see rates going up this year but doesnt want to mess around with the, if you would the house slogan and policy. I didnt hear him as hawkish. So trying to be disciplined as he said on timing, you think is trying to defer to whatever fisher and yellen yeah. He doesnt want to be accused of taking down that image they purposely are going out there, but if you listen to him he was most animated when he talked about the limitations on the economy. We need to increase productivity, to do this and this and this. They rattled off the tongue. So it sounds to me like thats a man whos concerned about the fact that Monetary Policy has reached its limits and one of the things you dont want to do is hike rateses. The constant refrain from any fed member when you criticize their policy and ask whether theyre running out of tools and efficacy you get the response fiscal authorities need to do the work. Monetary policy is doing the work and thats why i asked about distortions because at some point you have to wonder inside the fed meet whether they talk about the cost benefit situation when it comes to their policies. But youre dead right. Theyre begging for fiscal stimulus, basically they get up at every session and say my work is done. They know theyve reached their limitations and thats why i think they you know, when it comes down to it they would be hesitant to hike rates here because they know it hasnt pushed us over the line to functioning prosperity or whatever you want to call it and if we havent gotten there, why reverse right now. So i i think theres a great deal of hesitancy but they want to keep the policy open so if some magic combination comes in they can say look, we warned you. Youre too complacent. Better get with it. From the market the market remains complacent too. The hess tanti is another way of looking at it fueling the impatience that economists have about the process, the fed survey we did showed they dont really feel as if they know what the playbook is for the fed. Is it almost successfully fipgts the last war . The last cycle so predictable and hiking rates 25 basis points, every meeting everyone knew what they were going to do ahead of time and why and felt as if that was problem. Now its very open ended and very much a judgment call. What theyve done is, they walked away from a policy they had when they needed it. The policy used to be forward guidance. So you had some sense of i know where theyre going and what theyre doing. Now data dependent. Youre living from payroll report to payroll report on a variety of other things. So its going to be tough. Now, to saras point, the title of yellens speech tomorrow is the monetary tool kit. So it that would almost indicate that she might not be talking about anything about timing but referring to other uses they have to make. I mean, the bizarre part of this is the fed is talking about hiking rates, so they can lower them again when things slow down. What happens if the rate hike causes things to slow down. Might be an unintended cuss quensh. I would say consequence. The greatest threat to the market is the downside. They are not at all of the opinion that yellen will be hawkish. If she were to surprise, and actually be hawkish, i think there could be an airplane pocket here in both the stock and bond market. You maintain, no hikes this year. Looks that way to me. As convinced as youve been. So far its been right. We should say kaplan is not a Voting Member this year. He becomes one in 2017. To me sounded like hes going to go with the consensus and with what chair says. I think the good thing about kaplan is like fisher before him, richard fisher, comes with business sense. Not been a total academic and i find that reassuring. Had him on to talk about hp and jc penney. Art, thank you. My pleasure. Joining us with that analysis. Tiffany shares are moving higher as profit tops analyst estimates. But sales did fall short. Well talk about those numbers. Plus, former president ial candidate and consumer advocate ralph nader weighing in on the mylan epipen controversy. Much more squawk on the street straight ahead. Announcer theyll test you. Try to break your will. But however loud the loudness gets. However many cheese puffs may fly. Youre the driver. The one in control. Stand firm. Just wait. [click] and move only when you hear the click that says theyre buckled in for the drive. Never give up till they buckle up. The death it toll in italy continues to rise as authorities are searching for survivors. Lucy is live in italy for us with the latest. Lucy . Good morning, guys. The search and rescue operations are still under way. Officials here are not giving up on the hope that some people could still potentially be trapped alive within the rubble. The pile behind me does not have anyone. Theyve searched rescue dogs, body sniffing dogs, cleared this part but we cant pan unfortunately but further down the road theres still a large site, large building that collapsed and crews continue to work there. They say that although one person ive spoken to one of the rescue Officials Say 90 of the people theyve been pulling out have not survived, there is still the hope that they will find survivors. I would like to remind you in 2009 in the laguila earthquake that killed more than 300 people there was one survivor that stayed alive more than 72 hours and that is giving them hope. There are many dangers, aftershocks, we talked about that earlier, one as powerful as 4. 3, we felt it on the ground that makes the conditions a lot more dangerous here. Here in amatrice the conditions are difficult for rescue workers but some of the other smaller hamlets in the surrounding areas, its much more difficult for the crews to get there because you have these single one lane winding roads hard to get the bull dizers up there, rescue crews a and that search and effort roperation will continue. Some of the building collapses that have taken place, in particular a school the local government spent millions of dollars trying to earthquake proof that building reduced to rubble. A lot of tough questions going to be asked of the officials here in terms of the precautionary measures that have been taken and why they didnt hold up in the aftermath of the earthquake. Guys . Thank you for the update. Lucy live in amatrice for us. Turning back to the markets now watching shares of tiffany posting a surprise rise in quarterly profits helping to push the stock up more than 7 , almost 7 right now. The luxury retailer getting a boost from lower costs and price increases. Reaffirming its fullyear outlook. Is the trend likely to continue . Bring in brian nagle the senior retail analyst at oppenheimer, welcome, brian. Good morning. Looks like you have an outperform on this stock, 80 price target. Was there any improvement in the tiffany results or are they Getting Better at managing weakness in sales. I want to be clear. I like tiffany for a long time. Longterm basis. But as i look at this report today, i very much view it as mixed. I think you highlighted it. Sales were weak. And really weak across the board. Particularly in the americas and mostly the United States and europe. Where the Company Really beat earnings and to their credit they controlled costs much better in the quarter. The sales line is challenging for them right now. Is this sharp reaction 6 move higher . Stock still down 10 . Under performer so far this year. Do you think its a little overdone . Im surprised to see tiffany with these reports up 7 . Ive had a number of my Retail Companies report results this week and over the last couple weeks, theres been the bounces on weak results. What that tells me is the market is to a certain extent saying bad news is priced in which is a good thing. Again im careful with this. Like again the results today at tiffany do not necessarily support a 7 move higher in the stock. I just wonder if theyre doing enough to reverse the trends. The macro environment is tough right now, the double whammy of the strong dollar on tourists and overseas sales. How much can you attribute to that and how much comes down to their execution some of the things theyre doing to fight that. Well, i think right now the vast majority of the weakness at tiffany is macro related. Look whats happening in my view, the weakest spending environment in the United States at tiffany thats compounded by weak foreign tourism spending on the heels of a strong dollar and in europe some of the tragedies over there, things have gotten weaker as well. I think tiffanies continuing with a macro environment. There are internal issues with merchandising and things like that. Tiffany has been dealing with that for a while but mostly macro at this point. Brian, you talked about the pattern that seems to have developed in the reporting season. It does seem as if there have been wild moves, some getting punished like the Dollar Stores and others but i wonder seems as if the industry is operating in the zero sum type environment, right, not very much top line and aggregate basis. Matter of quarter to quarter who seems to have gotten inventories right and the rest of it. Is that pretty much the climate for a while . I think that sums it up well. Lot depends on the expectations heading into these reports. So, tiffany, again, ive talked about it, others have as well. It really wasnt surprising that sales were weak again. Weve been talking about this a while. Other Companies Like the Dollar Stores, the market may have expected somewhat better given where the consumer is right now. So i think a lot of it has to do with the expectations into the reports. The way you frame it is correct as well. What about the brand if do they have a problem with millennials . 130yearold brand does it have the same cache . Theyre trying to ramp up their advertising right now to appeal to younger demographic and social media as well. How much of a problem is that . I think its real. You know, look its interesting, the millennial conversation with all my retailers right now, all the retailers are trying to determine how to appeal to the millennial, tiffany in that group. I think thats that has been a weak spot at tiffany lower end more fashion forward jewelry even though theyve had new product linesp where tiffany continues to perform really well, relatively speaking at the high end. Thats really what i think determines or drives the tiffany brand their highend thesis. Put aside this macro weakness right now, the highend business for tiffany still good. Speaking of which, brian, people want to try to draw lines between tiffany doing well, signet not, Dollar Stores struggling, other specialty retailers not. Are curls trading up and if so how can you call them distressed or cautious . Well, thats why i want i think thats whats not happening. I mean, the stocks are acting like that today, but as i look at the fundamentals of these companies, thats absolutely not happening. Where im seeing weakness right now and again its really across the board, in larger ticket discretionary products. Tiffany is in the cross heirs of that. As i talk to companies in the Home Improvement space and other areas theres been weakness in the bigger ticket discretionary. Well leave it there. Thank you. Thank you. Analyst and optimist for tiffany at oppenheimer. When we come back former president ial candidate and consumer advocate ralph nader weighs in on the mylan epipen controversy. He will join us live on squawk on the street. This car is traveling over 200 miles per hour. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. Everyone talks about what happens when you turn sixtyfive. But, really, its what you do before that counts. See, medicare doesnt cover everything. Only about eighty percent of part b medical costs. The rest is on you. Consider an aarp Medicare Supplement Insurance Plan insured by Unitedhealthcare Insurance Company. Like all standardized Medicare Supplement Insurance Plans, it could really save you in outofpocket medical costs. So, call now and request this free decision guide. Discover how an aarp Medicare Supplement plan could go long™ for you. Do you want to choose your doctors . Avoid networks . What about referrals . All plans like these let you visit any doctor or hospital that accepts medicare patients, with no networks and virtually no referrals needed. So, call now, request your free guide, and explore the range of aarp Medicare Supplement plans. Sixtyfive may get all the attention, but now is a good time to start thinking about how you want things to be. Go long™. [announcer] is it a force of nature . Or a sales event . The summer of audi sales event is here. Get up to a 5,000 bonus on select audi models. Good morning everyone. Im sue herera. Your cnbc news update. A strong aftershock with a preliminary magnitude of 4. 3 has hit earthquake struck central italy this morning. The death toll rising to at least 241. Three towns in the region were reduced to rubble. Search and rescue teams continue to look for and dig out survivors. In myanmar soldiers and residents begin cleaning up the debris from the powerful earthquake that struck that country killing at least four people and damaging 200 temples. The region one of myanmars top tourist attractions. Wounded victims of an attack at the American University in kabul are undergoing treatment at a hospital this morning. Medics warn that some were in very serious condition. At least 13 people were killed, more than 40 wounded in wednesdays attack. The two gunmen were shot dead. No u. S. Citizens were involved. Cleanup has begun in the midwest where a series of tornados caused damage. Gop Vice President ial nominee and indiana governor mike pence will visit tornado ravaged cocomo indiana today. Thats where a tornado took down a starbucks with customers still inside. Thats the news update at this hour. Im going to send it back downtown to you. Sue, thank you very much. When we come back a conversation with ralph nader former president ial candidate and consumer activist on that mylan price hike and what the company is doing today to respond. Can an established bank move like a startup . Its a question we get from some of our largest banking clients. The face of their business was tellers. Then atms. Today its their mobile app running on the ibm cloud. Across every transaction, the hybrid cloud helps their data move quickly and securely. Our clients are building out features and pushing updates faster, on five continents. With the ibm cloud, they can move at the speed of any startup. Announcer are your children in the right car seat for their age and size . It may be too late to check when youre on the road. [blaring car horn and skidding] fortunately, youre on the couch. Your Business Needs Better Technology to drive better performance. So you need it to be reliable and fast. Really fast. Introducing the comcast business Summer Savings event. Fast Internet Speed to drive performance, plus cutting edge wifi for your employees and customers, and voice mobility so your calls find you wherever you are. Get some of our most advanced products at a great price with over 500 in savings. Call today and ask how to get these savings plus a 250 prepaid card. Comcast business. Built for business. We are getting breaking numbers here on nat gas inventories. Jackie deangelis live at the nymex with that. Jackie . The department of Energy Reporting an injection of natural gas stocks of 11 bcf slightly less than expectations we were looking for about 18 and you can see that prices made a nice move this morning and holding on to those gains. Why . Because last year, we got an injection in the 60s during this week also the fiveyear average as well. This is a few weeks in a row now that these injections are very slight and the market doesnt like it. Its getting a little nervous. Remember nat gas prices have moved about 7 in a week alone. Still under that 3 level, but traders are watching this one closely. I will say in terms of total injections and total stocks, not much to be worried about right now. Were still 9 above where we were last year and 12 above the 5year average. If these low injections continue thats where traders get nervous. Mylan responding to critics of itting epipen pricing announcing it will cover 300 of the out of pocket costs at pharmacy. Heather bresch addressed her frustration with congress and the pharmaceutical system. Take a listen. Congress and the leaders of this country, need to quit putting their toe in the topic and really fix the system. We have an outdated and inefficient system. You know whats happening the patient is paying twice. Theyre paying full retail price at the counter and theyre paying higher premiums on insurance. It was never intended that a consumer that the patients would be paying list price. Never. The system wasnt built for that. Joining us first on cnbc by phone consumer advocate ralph nader. Good morning. Good morning, carl. What do you make of this fix if we can call it that . Sounds like double talk by Heather Bresch. Shes making 10,000 an hour as the ceo of mylan and not talking straight. Basically, this is greed on steroids. Its the kind of pay or die Pricing System for the epipen. And parents are really frantic as to how theyre going to pay for this. Remember, this is an old product, been around for years. Its not a brand New Invention thats going to be amortized in terms of research and development. And its gone up like 500 . I mean people are paying 600, 700 for a set of the epipens. So this is this is not that difficult to turn down. And the way to do it, the public outrage, you know, petition around the country, thousands are signing it and we can give you information go to my twitter handle ralphnader. Consumer groups are demanding mylan disclose its real costs to see how its profit eyring has spiraled in recent months for no apparent reason except greed and Pension Funds who may own mylan can start rattling their concern. The stock price is already getting a little shaky. And fourth, there are Corporate Campaigns, carl, like ray rogers Corporate Campaign out of new york city, they know how to make quick changes in outrageous corporate behavior. Boards of the directors, shareholder pressure. All this is short of what we should have, because mylan cant get away with this in other countries that have full medicare. They can only get away with it in the country of their birth, not very patriotic. If we had full medicare they couldnt get away with this. How much blame do you sreser the Pharma Company and the benefit insurers. Theyre not doing their job. Does she have cause to pass the buck. Theirs supposed to be representing the patients interest. The Insurance Companies has so many skeletons in their closet theyre not doing their job. They should be engaging in Loss Prevention and hammer these sky rocketing prices. I mean, you and i remember, there is a time when a pill went for a buck, a pill. That was something. And now its going for 1,000 a pill for some of the drugs. Many of them funded by research and development compliments of the u. S. Taxpayer through the National Institutes of health. They have no shame, corporate welfare, corny capitalism and they fixed the system and now theyre jamming it to children with severe algerlys, parents wondering how they will pay for this. We have to organize america. Enough of this. Elijah cummings requesting a hearing in september. You said regulatory action is needed. What should congress do . Theres essential facility. Electric telephone rates are regulated. Theyre considered essential facilities and when youve got a de facto monopoly by mylan because the main competitor is out of the market because of a recall problem it can be described as an essential facility, life saving facility and under that doctrine easier to regulate. What if your telephone or Electric Company decided to go 500 increase and then give you a coupon to, you know, vent the steam a bit. This is ridiculous. The system is out of control. Its not just mylan. Its the whole drug industry. Theyre hammering American Consumers who have funded and provided them with tax credits and government r d and theyre charging the American People in the land of their corporate birth, the highest prices in the world. They cant get away with this in canada and europe and australia. You are not the only one outraged. Hillary clinton tweeted and shook the sector again yesterday. Shes proposed forcing Pharma Companies to spend more on research, capping the outofpocket expenses of certain drugs, do you think shes the one to deal with this issue credibly . Do you like her ideas . Well, its now campaign rhetoric. She hasnt demonstrated this when she was a senator from new york. So we have to wait and see. All these politicians react to media expo says and education and public outrage and shareholder reaction from the pensions and mutual funds all kind of ways to turn the screws so give these Companies Big profits not sky rocketing pay or profits. Do you believe Pension Funds would raise a stink over this . Most of them would not. The share price was shaky this week but all you need is a Labor Pension Fund or a Teachers Retirement Fund just to send a signal up and it will reach executive suite and Heather Bresch as she counts her 10,000 an hour pay. I mean, really, its gross terrific isnt isnt it . Adds an additional layer to what would have been a big enough story already . Very much. Part of this plutocracy, its kind of Heather Bresch says shes a mother and she understands the problem. She doesnt understand the problem. This was under her watch and the price sky rocketed 500 for no reason. Thats why we want the company to disclose its costs if its considered an essential legal doctrine that puts it in a different space in regulatory space. Finally, for those who argue the answer is in approving more drugs, more quickly, im not saying im not applying this to the mylan case, but how do you avoid the trouble of approving drugs that are not well vetted yet . Well, its just, you know, begging for a big tragedy, right. If theyre not ready you can have like a disyaeser like decades ago which luckily the food and Drug Administration stopped when the drug was being imported from europe and produced thousands of kids with limbs, you know, without limbs or arms or legs. So we got to be very careful of that. What mylan needs is competition, obviously. It has a de facto monopoly which is why it took advantage of all the children with the severe allergens and it needs competition, generic competition, thats easy in terms of the instructions to the parents, for example, and it needs nongeneric competition. Until then, its got to be regulated as an essential facili facility. Thats a good insight on the story that a lot of people are paying attention to. Mr. Nader, thanks again. Good to talk to you again. Thank you, carl. Thanks cnbc. Ralph nader joining us on the mylan case. By the way today on cnbc senator Charles Grassley who has publicly called for mylan to explain its pricing policies will give his take to power lunch 2 30 eastern time. When we come back in the next hour, uber reportedly losing over a billion dollars in the first half of this year alone. Business insiders Henry Blodget will look at where the Company Stands ahead of a potential ipo. Another check on the markets. Some weakness for the dow down 9 points and the s p, the nasdaq stays positive but is at risk at being down for the week. The first time in several. We will be right back on squawk on the street. Oil prices have seen a bit of a bounce this year. Some investors who thought they would cash in have missed out. Is there still time in well explain at tradingnation. Cnbc. Com. More squawk on the street coming up. The dow down 1 points. To the cme group. Rick santelli has the santelli exchange. Hi, rick. Hi, sara. Thank you. I would like to welcome my Affordable Care act obama care guest, bob. I think bobs forgotten more about obama care than most of us try to study up and get on top of. Thanks for taking the time this morning, bob. Youre welcome. Listen, im going to read a quote from a paper you sent me from katherine martin, she leads hhss planning and evaluation office. She wrote today, headline rate increases do to the reflect what customers actually pay. So when im reading that some of the blues are going up from 40 to 60 , some more or dropping out completely how does her statement figure in. Give me the reality or nonreality of that statement, bob . Im sorry, but thats just incredibly nonreality of that statement. Thats incredibly misleading. What she is referring to is the people that get the subsidies and have the amount of premium capped because of the subsidy but only half of the individual Health Insurance market gets one at all so half the market is going to take the full brunt of the 60 rate increase coming down for them. The other thing is even those people in order to miss the big rate increase have noouf to the lowest piesed plan. Youre getting less so theyre focussing on just one dimension of this and once again this administration and i have seen many obama supporters do this too, just wants to ignore the millions of people that dont get a subsidy for their individual Health Insurance and take the full whack here with the big rate increases. They dont care about those people they get some subsidy over that and thats half the market. But even then if youre getting a subsidy most people are still paying a substantial portion of the premium a family of four has to pay 5,000 a year in the premium and as a result because of the high prices largely for the working and middle class. Im going to stop you there. Well go into the proarea because what i want to talk about is if you only have a hand full of Car Companies selling Auto Insurance verses the hundreds we have today, what will be the difference . Well talk competition on pro. Look forward to it. Mike, back to you. Rick, thanks. Lots of attention in the Health Care Food chain. When we come back a big move to the down side today for Dollar Stores. Dollar tree and Dollar General struggling after reporting earnings. A closer look at that after the break. Medicare only covers about eighty percent of part b medical costs. The rest is up to you. Thats where aarp Medicare Supplement Insurance Plans insured by Unitedhealthcare Insurance Company come in. Like all standardized Medicare Supplement Insurance Plans, they could help save you in outofpocket medical costs. Taking informed steps really makes a difference later. Thats what it means to go long™. Call now and request this free decision guide and explore the range of aarp Medicare Supplement plans. All plans like these let you choose any doctor or hospital that accepts medicare patients. These are the only Medicare Supplement Insurance Plans endorsed by aarp. Call now and request your free decision guide. And start gathering the information you need to help you go long™. 13 profits in sales and the one consumer d. [ inaudible ] discretionary stock. A miss on everything when it comes to signet that runs some of the mall jewelry stores. They were down 2. 3 . Thats just one me trick. And its been under attack by the bears. Its about a 10 shortage because there was scrutiny of sales practices and allegations of swapping out diamonds and reliance on extending credit to their customers. Maybe its confirming that they are struggling a little bit in terms of organic demand. Different price point than tiffany which is moving up, to your point earlier. Thats true. A lot more markets coverage with the dow down almost 5 points when squawk alley comes right back. For decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Images, videos, social updates. We call it dark data. 80 is invisible to most businesses. The ibm cloud has tools that can help see dark data and put it to work. Hello, my name is watson. Working with watson in the ibm cloud, we can help an Energy Company predict pipeline corrosion. And help a startup to use social data to predict market trends. Now businesses can get more out of their data. Thats what the ibm cloud is built for. Good morning it is 8 00 a. M. At uber headquaters out west and 11 00 a. M. On wall street and squawk alley is live. Welcome to squawk alley for a thursday morning. Kayla and me at post 9. John fort at San Francisco at one market. Business insider ceo with us as well and what a story to lead the hour. Mylan ceo responding to critics over this massive controversy dominating the headlines this week. We want to get right to Ryan Sullivan at hq that sat down for a first on cnbc interview this morning. What a sit down. I appreciate that carl