Transcripts For CNBC Squawk On The Street 20170721

Cash flow turns positive in the industry segment is that enough there were notes about you are the bynes. I dont understand what happened maybe John Flannery can understand whats going on thats an issue. Things are trending to a 1. 70 so much for the 1. 80 and one time two bucks is it disappointing . I think there are people that felt that he would go out on a high what he did was he went out as the business is and theres no shenanigans, theres nothing just a very honest look at a group of companies, health care but natural oil and gas, not great and terrible so air space, when you line it up against honeywell another 3 organic growth fabulous and you are what your record says you are. Flannery starts august 1st. They do back the prior guide of 160. Its just that 160 is now i was hoping they would trend toward the higher. 2. 19 is not happening . I dont think my view would be they have to take that off the table but it was never really on the table. It was wishful and i did not think when nelson peltz who by the way he welcomed and praised some people were saying he never praised what peltz was saying and have to imagine that nelson is very disappointed this morning and i imagine there will be some changes. What is fair here and when i see Something Like the Power Division be bad i say to myself lets just bring those people in and say is this the way that we should have a conglomerant because if you cant deliver i dont want you in our bench. Ge is very odd they dont like to be criticized the great once they accept it. I remember when i sat down and i said dave i dont get this i dont get this do you know what he said i dont either thats my kind of guy. Not like jim, how could you criticize us. Lets do honeywell. Beats by a couple of cents they raise 17 but estimated 709. I look at what he is doing and, you know, i just think that once again he is put, you know, he got dealt a really good hand. So lets give him that too and i think he wouldnt mind saying that which is that yes guilty or innocent a good hand but hes willing to undo anything he will break things up. Ge almost feels like a c conglomerant and honeywell is like a full house. You cant improve on it. The one thing about ge is its like failed and you try to throw them back. Right a lot of stroils watch. Well get to other earnings later in the hour. Good news for the tech sector. Nasdaq extends to 10 for the first time in almost 2. 5 years installed dex the 41st of the year microsoft has better than expected results on last nights Conference Call. Take a listen to this. Im proud of the progress particularly the strength of our commercial cloud results fy 17 was a tremendous year of customer momentum with cloud ai and Digital Transformation our technology was of an intelligent cloud and intelligent edge and its resinating with businesses everywhere. Cloud up 11 asure nearly doubles some made it seem like they had been written off completely and its a rebirth. Yeah. Everything was great i happen to be a big fan of the cfo. Very competitive guy but the call is terrific stock weaker today if the ftc wants to stop amazon i think they can take the 509 billion Dollar Company that is microsoft and merge it with walmart and then you suddenly have it that what it would take and walmart is trying to get all supply dwroers move off of amazon to go to the cloud and you need the 100 million shoppers every week of walmart to get the data and you have 5,000 stores around so you have the distribution much better than the whole foods that amazon bought of course theyre not going to get together i sent my analysis so he can have a fun friday. No response yet no no response yet but hes cool but what it really says is this is what it would take to stop this company and yes, i postulate derpo postulated it. But what it takes to stop amazon to have the biggest retailer in the world and one of the greatest Software Companies in the world, the greatest get together and its going to be hah hard and thats not going to happen thats how far amazon is ahead of everybody home depot is so good but think about it you need web service and thats not going to happen even though i said im happy to introduce him to doug. We love when you play investment banker. Why not costco is right there. Its wild and whacky but thats what amazon is the great Cloud Company and the great retailer you need another great Cloud Company and another great retail tore stop amazon or else the government gets involved. Jim is mentioning a story here the ftc is said to be examining pricing practices. The investigation is part of a look at the pending acquisition of whole foods and involves complaints that amazon is misleading customers about the discounts that it offers corey booker out with a warning for amazon the government needs to apply a critical eye to Large Companies becoming larger particularly in tech this consolidation all over the country is not a positive trend. Im sceptical of this particular merger highly sceptical of it remember we broke up standard oil and we broke up gm and dupont you have to go back far to read about my days but gm and dupont were together and the government felt they were too big and dominant more than 100 years ago. Standard oil controlled the pricing of oil this is much more gm and dupont that didnt control anything but there was just a belief that that company was too big and they succeeded in government this would be amazing but what you would do is say web services has to be separated from retail. It would be monumental if they did that thats what they have to do. I dont believe its in pricing. It would be hard because youd have to say prime creates it and i do not believe thats a fair criticism i think the government will fail this is not microsoft making you take the browser this is much different. The question is whether this becomes some sort of central pillar of a democratic platform in 18 or 20 right . Youre going against a company thats dramatically reduced the cost of everything that you used. The government raises the cost of your life and amazon lowers the cost of your life. Who would you like to break up yeah. Well find out. What do you think of that walmart . When davids not here i dont have time to tweet it as fast. Earlier this week david shamed me into work. Do we have that sound bite. This is what was said earlier if the control room can play it fast enough. Oh, guys. No, not happening. Maybe when we come back because it was i was supposed to have the day off and im here because i was shamed into working. Thats okay. Hes the youngest guy at the company. The older guys get to take the day off. Former congressman barney frank on the 7th anniversary of dodd frank and the president s push to mismantle that law. The earnings flow continues. Gm, cat, m donalds, amazon. Next week is so much fun. Im going to cancel friday. Hes going noisz a couple. Right now ill tell you i wont. Its all right. I feel bad. So earlier in the week david and me shaming jim. And here i am. In not taking today off. She doesnt watch the show so she may think im here for other reasons. Shes not happy. With david not here we have to watch out for m a yeah but david crushed me nick expected me to be here once i said on air that i committed. You are here for the 7th anniversary of dodd frank signed into law on this date. The white house and gop lawmakers trying to roll back since election Day Financial sector up. Data shows that u. S. Bank profits are near the precrisis peak with ten of the lenders earning a combined 30 billion last quarter we have capital one to look at. We have a lot of regionals too. Theyre all making a lot more money with less loan growth. Thats important i would put Huntington Bank and suntrust in that regions financial. All of them have limited loan growth but the bottom line is testaments are intact on these higher prints and i think thats very interesting can you imagine they get loan growth beth mooney last night, she is the ceo of key was absolutely saying given washington were not getting the loan growth but key must be bought if they get loan growth, if we get the 3 or 2 these companies will prove to be fabulous bias im not kidding. Theres real strength out there. So they keep banks too small for making up to the tape that youre going through it doesnt happen. No it doesnt and jamie dimon illuded to that but its very much in the present. Its hard to get a loan and i know i have a really descent Balance Sheet. It doesnt matter. Theyre not interested if youre taking some risk they only want to give loans to people that dont need them but if they look at what youre doing they really suggest you do it with cash this is not a tenable situation. They have got to start giving loans to people of 20 down that are legitimate you cannot get that on a house you cannot get that from most bankers in this country because the regulators dont like to see it its time for change. Yesterday you talked about amex you said it was compared to visa a little dull and now we have visa with payments of 12. Oh my theres charlie sharp. I dont think al would like that u. S. Growth was 12 . Remember china is coming they have done great things in europe this stock is going to go over 10 i say that because that Conference Call had no holes in it and thinks are accelerating in visa. If they get china really rolling. Of course they have declared a trade war against us maybe it goes away but i really and truly love the Conference Call al is doing a fantastic job. Hes very good. So you dont see him as bothered by the ten year back below 225. No because were seeing capital one suddenly with a decline in charge offs i like the general tone of whats happening in the Banking Sector just obviously growth. When your biggest misses are colgate and the underperformer that is ge, im okay with that im okay with that the call was perhaps the most important call of the morning. Now hi the release and i want to pull it, i want to read this while the outlook in north america remains robust, the second half of the year, we are now also seeing more positive signs in the international markets. This is important. The previous quarter he did not see that this is a major change from a man that has been very bearish and hes saying that ending. The International Orders are coming not just from the gold fairy and russia, but very good from russia but more importantly i think from Shallow Water drilling think Mexico Mexico is back a very important call. We do have an opec meeting in st. Petersburg. You take a company that was the first to realize that things arent coming back and fired a lot of people very early ahead of everybody else. Think its going to bounce now saying its going to be good and the record i would say is by far the best in the industry. Stock as you can see up in the premarket. Well see what happens in the opening bell before that well get kramers mad dash and countdown to the opening bell take another look at the premarket as we wrap up this trading week more squawk on the street from the nyc straight ahead do you t . Hate to play devils advocate but. I kind of feel like its a game changer. I wouldnt go that far. Are you there . Hes probably on mute. Yeah. Gary wont like it. Why . Because hes gary. phone ringing what . Keep going yeah. laughs voice on phone its not millennial enough. There are a lot of ways to say no. Thank you so much. Thank you so were doing it. Yes start saying yes to your companys best ideas. Let us help with money and knowhow, so you can get business done. American express open. So you can get business done. To keep our community safe. Before you do any project big or small, pg e will come out and mark your gas and electric lines so you dont hit them when you dig. Call 811 before you dig, and make sure that you and your neighbors are safe. 811 is available to any business our or homeownerfe. To make sure that you identify where your utilities are if you are gonna do any kind of excavation no matter how small or large before you dig, call 811. Keep yourself safe. Just about 7 minutes until the opening bell. The stock had run so much yesterday one of my absolute favorites just a terrific ceo came on air and i thought, i wanted to say to him, will you cheer up you just delivered a quarter of a lifetime but the problem is when you have a fabulous ceo like lance hes not going to say were going to have another quarter of our lifetime. Hes too conservative for that you deutche bank saying youre going to downgrade carl maybe it comes down a little more but they are doing so well and i want to congratulate them. I think that they were too conservative but the great guys are conservative and lance someone of those great guys. This is a good longterm buy right here many of the cargoes are looking strong. It was more encouraging about the th quarter than the 3rd. Yes and remember we have a lot of those situations where people are saying the third may not be good but wait until the th ibm did that Union Pacific has a lot more in the bank im willing to say im willing to look through that and ibm no because ibm does not have the trust of wall street right now Union Pacific earned it and if it comes any would buy it. What a power house company. Its been, people watching the transports at some of the recent record highs. They have been rolling over as of late i dont like to see that the airlines are probably getting oversold because United Continental did not deliver. I look at lance, i feel for him because basically, he came in hot. That was a dpraet number but some ceos come on air and theyre not going to beat their chest and say were going to repeat in the super bowl they dont do that belichick, he wasnt dismissive of you wearing a hoodie but he did have a belichick like quarter. Fan expectations need to be managed. Thats true. Femontg bell in a w mes. Dont go anywhere. Pass please. Im here to fix the elevator. Nothings wrong with the elevator. Right. But you want to fix it. Right. So who sent you . New guy. What new guy . Watson. My analysis of sensor and Maintenance Data indicates elevator 3 will malfunction in 2 days. There you go. You still need a pass. upbeat dance music bell ringing the power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. 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Its going to get really active next week. 180. I want more people next week. Theres a lot of snap decisions that are made by have many Money Managers do not take your queue from the stock market take it from your research, go home, listen to the calls, look at the notes next week has been a vast mispricing people will buy up 3 people be sell down 2. I really urge people to take a deep breath next week. Its four weeks a year where people make a lot of mistakes and one next week. On this show we try to move past the noise of politics as much as possible but the headlines on the paper today involve things like trump asking about the scope of his pardoning powers looking into the pasts of mueller investigators. How much of this is worry about next weeks Senate Intelligence hearing . It does have a nixonian feel to it. Nixon was always trying to figure out who he could fire could he fire maybe the most distinguished person like mueller. So this is a multiple dampener stay focused on the companies that can challenge by being international. 3m is not hostage to whats going to be talked about. Between the earnings and the hearings next week. Its going to be rocky and i want people to be ready for it maybe even raise a little cash because its going to be rocky lets get to the opening bell on the s p here at the bottom of your screen. At the big board this morning, its Hospitality Trust celebrating their first day of trading today at the nasdaq ringing the bell in honor of their own iop. Well, you know, its a very strong theory, been the one that has walked away with all the share there but i love that whole group. Its a great secular trend. I was just going to say this week in particular the dow had a series of anchors around its ankles. Goldman, ibm. These are as they said in a cla classic star trek theyre wearing cement golashes and i dont like it. Some are saying maybe were being too aggressive but i would tell you on the other hand dont sell on this what a fantastic call. I know sky works could be down a little i like the way they put that quarter together but were going to be heard. There was a very quizzical downgrade of a couple of the high growth oils over at city. Taking eog down is a mistake oxy not a mistake. They are very poorly run. Ge is not just the biggest dow lagger but the biggest s p which doesnt happen too often. Now youre selling it before a new ceo comes in and i question the wisdom of doing that do you think John Flannery doesnt see whats happening and says this is no good but theres people that say i want the middle market whose small and medium size business could do well look at cintas the largest uniform company in the world and they make it from small and mid sides businesses and its on fire i come back and say do not give up on the American People and do not give up on small business. Do not give up on International Companies but some of these companies ge and ibm that have been serial disappointors take your queue from microsoft and visa they are very well run International Companies that happen to be based in the united states. Visa is the offset to ge today. The biggest gainer on the dow. Visa is very well run i bet she spends one day a month at home. One day. By the way since i live next door to him until recently he spent about one day at home a month. Yes thats the life. I had to clean his walk i was out there. Not with a snow blower by the way. Im talking about genuine shovel jim, a little twitter, still above 20 but lower today for the first time after closing higher for 12 Straight Days the longest streak since going public. I do believe that whats happening is, i mean, people are starting to talk about that they have a better filter it was going to come in and take a lot of share he was talking about hes going to be second to twitter but no one is in the same tear as baseball. Which earnings we will get as well. Thats one where if we have this kind of negativity i monitored the last 7 quarters and you have the show last night was extraordinarily good. Facebook market cap, added market cap since the dollar was named in february of 14 almost 300 billion. It added market cap. Well some guys, some executives are just remarkable now hes very unassuming and maybe i should call him by his full name but what he is is a competitor and what we have to mention is he is well ahead of where i thought he could be. I cruz critical of where he could be in the cloud. I said come on youre dreeaming and he said im not. Im going to make those numbers. Hes making the numbers. Hes very impressive. Ebay, did meet for the quarter. Revenue slightly above but theyre talking about a marketing spend jim that will cause the Current Quarter to fall short. But theyre still giving you hope im not a big fan of ebay. I like paypal, the spin off but i felt that ebay s when i read the numbers i was surprised to see the stock down because everybody was joyous about the second half. Not unlike like j and j. A couple of downgrades to sell today. Im not going to distinguish and give you the analysis because i believe its so off point but i think ebay is fine its not a runaway its not great its not anything that you would name your dog after. You feel the same way on clorox today too right. Yeah. Ai remember when coal gate was something you could set your clock too but the coal gate quarter inspires me to recall how great the unilever call was. You know how we refresh at 5 00 in the morning and 5 30 he has to do two calls because hes that good. Was it cintas you mentioned its an s p leader today. Good. Theyre now the number one uniform by a mile. I did a couple of features on it for mad money. Its really okay thats what im talking about. People firing first and then thinking about that was a mistake. So stay focused. Im not going to say that for ge because ge i have to do a lot of work on because its the type of thing where youre say as good the dividend okay and i know the dividend is okay i know the dividend is okay. I know its i know. Yes yes. See that video will be replayed thats a youtube, im going to play it on youtube right now and say what a clown cramer is. Were going to get a lot more information after the august 1st, flannery takes over whatever reset there is. And i believe, now look my Charitable Trust owns it i own it personally because we work for the company and what can i say, im all in and i have been all in and i cant own stocks all the s p stocks to own, lets just say also comcast, parent company. One thing were allowed to own. I want to ask you about a report out of city today. They argue that bond yields in order to start to damage equities would have to hit 37 before you bring the risk premium, the longterm average on equity risk premium do you buy that . No, no. Because the world and the stewart millers, hes fabulous, they would tell you were absolutely fine here i dont think they would say that at that level because then youre starting to talk about a Mortgage Rate that maybe 7 thats where youre going to start blocking out people. Now there is, remember because of how many you have to put down, these companies have to cap more gauano nomorgans but i that move you can talk recession but im not going. Few people are. Remember by the way, just so people know, again, i am a europe bull and i think europe rate versus to go up but that would still not impact us as much of that. B of a this morning has a headline, chooses dublin as its eu base post brexit which is going to be interesting to see. Have you ever seen the book of kels at trinity. No. Probably one of the great historical, i happen to love dublin been there multiple times. My wife and i have degrees from gennis in pouring. She succeeded. She has three or four grandparents from ireland. That makes her the right to be irish. B of a has that news, sustained that uber reached out to their vice chairman. Really . To run uber. Are you serious according to them. From bank of america. Holy cow. Wow. I buy uber if she went i would, shes very smart. The top people at bank of america have been through. They walked on coals they have been through a ring of fire so to speak hes great johnny cash. You see the dow down 72 no need to tell you thats largely ge lets get to bob on the floor. Good morning. Happy friday. Generally to the down side for most of the major sectors. Lets take a look. Its been a good week overall. We have healthy rotation so you can see how flat the market open has been and you get a little far up in the leadership and start selling off a little bit and that is a very key story but also here is the land stories in north america. They went out of the way to highlight how big the land revenue is up. 42 . Fracking revenue is up 68 they describe the activity as robust oil isnt where everyone thought it was and hast true they went out of their way to talk about how advanced the Fracking Technology is coming and this is the gift that keeps on giving. Its driving down the price of oil and gas in the ground. This is one of the Great Technology stories and it just keeps Getting Better you see after a horrible year they had to keep taking the numbers down were reach a bottom in the last month in a lot of the oil stock. Its finally looking like theres some kind of a bottom there. Well keep an eye on that. Well talk more about Oil Next Week meantime honeywell down right now but this is one of the monster performers year after year after year. Historic highs yesterday for honeywell. Good numbers maybe a little concern on the mar jins but the q3 guidance is higher than the street overall what this company is is brilliantly managed and one of the most consistent earners, gainers, look how beautiful these numbers. We have been complaining but youre look at these brokers theyre doing okay and they had good numbers and very good comment about client activity the other day being much higher than anticipated etrade said the same thing. A whole bunch of new customers higher customer activity was stronger you can see they havent done anything all year but since june they turned around as well good report. Up 5 . Its a bit of a surprise given the low volatility and low volume we have been seeing were again seeing the characterist ix of this market which is the rotation we have ch robinson with a mix yesterday. The comments from the ceo of csx yesterday fossil fuels are dead. That got a lot of comments it was a volvo like moment when they said well stop producing the internal Combustion Engine is dead but that continuing rotation on big names like banks we get other sectors moving forward. Carl back to you. Thank you, bob on the floor don has been listening to ges Earnings Call this morning has some highlights at hq. So this is very much a Conference Call thats geared toward this idea of transition and if you look at the stock price premarket we do know, ge generally comes out with the earnings beats and marginal decliens it wasnt until later on during the call when they pretty much reestablished their forecast and outlook for 2017 and then really declined to give any update on 2018 that you saw a little bit of that sentiment shift to the down side hence the 4 down move premarket that carried into right now as opposed to the 1 moves that we saw earlier in the session. During the Conference Call a lot of conversation split between the cfo, the outgoing chairman and ceo and the incoming chairman and ceo and they pretty much put a lot of color around what was going to happen with regard to why ge was being more closed lipped about whats happening in the future because of the transition plan they spoke on the call, specifically John Flannery speaking take a listen to what he said with regard to the transition plan being put in place for general electric. As you know my official start date is august 1st and we indicated earlier that ill be doing a full review of the company and will be back with my views. Were on track with this process. Im in the middle of a series that dives into each of the businesses looking at everything you would expect what is the Market Outlook where can we grow . Where can we improve margins what returns are we getting on investment. Now this plan of attack, at least plang out and forecasting and taking stock of ge is going to happen all through the next few moss back over to you. Selling this stock is a mistake. Youre betting that John Flannery doesnt know what hes doing. Thats been a not great bet according to my sources at ge. Real bad bet. Stock obviously off the initial opening lows. Yeah but John Flannery thats the new sheriff in town. Hes not going to take this nonsense where ever theres fat theyre going to cool sculpt it. Youll keep us honest on any other headlines to the degree we get some on the Conference Call. The nasdaq aiming for an 11 day win streak. Its a little bit thuf morning though we are lower here the nasdaq up for ten Straight Days. Thats the best win streak since february of 2015 if they were to go 11 it would be the longest win streak since in 2009 the four main stocks that have been the drivers of this over the last few sessions. Microsoft which of course is strong on the back of those great results, amazon has been lower today after an Advocacy Group lodged a complaint whats been interesting here has been the strength of Health Care Biotech up 2 this week helped to drive the gains for the week on the nasdaq, Intuitive Surgical selling off a bit despite strong earnings. Athena health continuing to rocket sounding very upbeat saying yeah were listening to what our shareholders are telling us and not addressing the Elliott Management complaint directly saying the board will talk about that at a later date however he says look change is hard and this is going to be good for us. He ended with paul basically saying this is going to be good for us were going to come out from this on the other side stronger. Back to you. Thank you very much sources telling nbc news the Trump White House is expected to name scaramucci as the director. He served on the Transition Team and sold his stake in sky Bridge Capital earlier this year as the white house tries to pivot on communication strategy. Old friend from the Goldman Sachs day. Known him for a long time and he has accomplished great things. There was a New York Times piece a few years agatha had an interesting bio of him but lets just say he is different. Look forward to working with him hopefully. Im sure hell be here a lot which is good and of course youre welcome on our show all the time you cant suddenly say i dont know you cant say hes not my friend because hes now there what are you going to do can we just say we have no, its not about friends its about money but you do have a preexisting life. What are you going to do thats well said jim. Other news this morning, mcdonalds is unveiling the mc delivery collection. Its branded clothing including jogging pants, hoodies burger pillow, flip flops and onsie and its part of the partnership with uber eats and the expanding delivery across north america. Theyre going to hit this hard it seems. He is a man not to be trifled with the stock is up 60 points. Steve knows that i use a mcdonalds apron every day when i eat my salad so i dont ruin my tie that the tie the network gives me i sent him pictures of it but hes the man i sure wish that we could spend time with him because theres nobody better. Mcdonalds has not traded below the 50 day since you have to go back to january. Remember they thought he was a one trick all daybreak fast pony and by the way, he has been known to, if he finds theres a bathroom not clean, that changes overnight. This is a detail man that understands technology and affinity the implicity of the menu which has given him the buy into the franchises and when i spoke to him he makes it clear. He says its about mojo. We look forward to hearing it next week cmg is now 535. There was a debate about who has the bigger and more informed and id rather not go there. Well get trading when we come back with jim dow is down 81 well talk to jim stewart that says the president should not take the reagan approach to tax reform and hell explain why we didnt have rick in today but take a look at how the bond market is fairing with the ten year below 225 no, please, please, oh shrieks in terror heavy breathing and snorting no, no. The running of the bulldogs . Surprising. Whats not surprising . How much money aleia saved by switching to geico. Fifteen minutes could save you fifteen percent or more. At the lexus golden opportunity tesales event before it ends. Choose from the is turbo, es 350 or nx turbo for 299 a month for 36 months if you lease now. Experience amazing at your lexus dealer. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. So there were concerns about do it yourself being soft. Theyre fighting a trend where we need to know about whether housing spend has decreased. Paint was not a strong category. It was above trend but not a great category when they reported last but i want to emphasize that people are paying 21 times earnings for home depot and the multiple, the price to earnings multiple could go under 20 even though it a Great Company and everyone knows have liked it since, i have liked it. But i do recognize when theyre out for a stock and theyre out. Good week jim. It will be at home depot later today doing some gardening. Im going to do power gardening this weekend my kind of gardening is different for most people. Its really a gatorade plus. Its not, but then later on and friday afternoon it becomes very much of a mess. Yes. You have to go. Whats on mad tonight were going to summarize the way that people think about stocks right now and have to tell you a lot of people will like the show. Carl. Good stuff. I made the right decision coming into work with you and david as always your rye nature really made it fun. Is that five or six. Thank you for debating me. Just leave it on 7. Good weekend see you tonight. Thank you so much. When we come back the future for dodd frank 7 years after being signed into law. Well talk to the former congressman with the dow down 77 sd its all yours. Wow record time. At cognizant, were helping todays leading Life Sciences companies go beyond developing prescriptions to offering subscriptions with personalized, realtime advice for lifelong, healthy living. Honey . You almost done . Nope. Get ready, because were helping leading Companies Lead with digital. Welcome back to squawk on the street mike at post 9 in the New York Stock Exchange david and sarah are off today. Its not just ge its caterpillar and dragging down the index not so bad on the s p. Crude down more than a percent. Well be talking about that on the road map another big day for earnings ge, honeywell, microsoft among the big movers ge sinking through early trading. Well bring you more on why. President trump expected to name a new White House Communications director and he is no stranger to wall street. Plus happy birthday dodd frank well discuss the state of Financial Regulation with one of the men behind the bill. Barney frank. Market moving lower this morning. This after the nasdaq notched its 10th consecutive daily gain joining us is jp morgan Global Market strategist. What do you think of the earnings picture when you see whats come out of the oil sector this morning. Does it tell you what you should be doing yesterday. Its going to be slower than the first quarter. Not double digits. Earnings are coming in around 6 or 7 but the most interesting thing about this earnings season is the lessenning about u. S. Politics and focus on good Global Growth and weaker dollar so its shifted much more to the good global story. You think its less of a story in the second half. If you take a look at what its been for companies themselves at this pace in the earnings season Fourth Quarter we had around 16 mentions of trump, the administration, that lessoned to 8 in the 1st quarter and its only been two this quarter so the focus is shifting. I wanted to go with those arent positive mentions because of the hopes for tax reform and then now not mentioning it maybe its a bad sign right . Have they given up no, i do think theres much less expectation whether its from the private sector, whether its from investors. Theres less hope of stimulus but theres also other positive stories. Its not that theres Nothing Holding the market here. You mention the Global Growth picture. Also the weaker dollar related to that. You seen actually some weakness in the European Equity index just recently. The german market, euro stocks down 4 from their high. Not a big deal maybe but then the flip side is the strong euro so can we basically sustain these levels in the u. S. Market when you see that choppiness in that story so the growth in the euro zone started as being driven by a weak euro about exports. That was the story thats no longer the story the growth is being driven by the european consumer and european investment. We just have to tweak how we invest in the euro zone. Its not the International Companies. Its a domestically oriented european companies. It used to be stocks or bonds was a question of consequence. For years now you have been able to do both now the ten year yield is back to 2. 2 . Are you ever going to have to make a choice . Like right now, what would you do we would pick stocks. It doesnt mean we dont want to own any bonds whatsoever but we do think that bond yields are going to move higher we cant forget the normalization on the Balance Sheet as well as the second half of the year. This is a pause for us and you should drift higher for the remainder of the year. So you dont think yellen last week, draghi this week, delaying their target. Theyre the last ones here in the race but i think that the tune has changed for the other Central Banks. Confidence is the name of the game here now. They feel confident about growth and the labor market they just want to tow a fine line between patience and confidence and maybe had is typical. You see stocks decline more versus those going up when they beat does that mean we priced in what companies can give us this learnings season theres a fair amount priced in and i dont think a lot is priced in in terms of political expectation but at this point there is certainly a fair amount thats priced in in terms of domestic growth. The upside could come from further dollar weakness. That could be an interesting catalyst for earnings to get revised higher later on do you think thats too high . That number is too high . If we look at the ten year and relationship between ten years and stock prices they only change around 5 to go from 22 to 37 its ultimately low but wow thats a huge jump. Well i think 5 is a historical number. Its probably closer to 4 as nominal gdp. 2 growth and 2 inflation but were still miles away from that miles from when Interest Rates become a problem for margins and earnings in the market. Right now junk bonds yield 5. 5 and then we have the stock market priced off of that so even if stocks would be okay it wouldnt be a smooth ride. Would it be a smooth ride beneath the surface . Some sectors wont take that in stride those very defensive sectors. Thank you. Thank you guys. Take a look at the big earnings movers this morning revenue down 12 from a year ago. Honeywell also on the top and the bottom line. As they exceed prior eck peckations that decline is sort of on a price basis its not doing huge damage to the dow today but you might argue otherwise. The stock sort of bounced off its lows. You clearly had some idea out there on the street that maybe it got washed out and with an incoming ceo, august first, that maybe they would take the opportunity to set the agenda a little bit more as opposed to deferring it to november and basically leave the strategic questions hanging out. You wonder when is the kitchen sink quarter coming right . So a new ceo can be a tremendous catalyst microsoft, for example, but do you have to get through the first range where they lower everybodys expectations in order to build off a lower base . Its just the business mix that ge has right now and they now have a sustained target. You cant really call it dirt cheap yet. The rebound in aerospace for honeywell. You wonder if that gives them ammunition against dan lobe thats been agitated for a spin off of that. Now they can say look 2 growth there has been flat for so long. That has to be a bright spot for them. We talk about last hour the dow seems to get a lot of attention. Every other day or so. Goldman and ibm earlier in the week today it is ge and ties in with an earlier point about the market paying attention to misses. I think the hot poles show up more in the dow. You have 30 stocks its going to be conspicuous but even if you look at the losers on the s p 500 its been earnings related disappointments so its not dragging it all down. Its down despite better than expected results this quarter powered by strong cloud performance. Stock up 19 for the year. Gentlemen its good to see you both. Thanks for having me. A little bit better than expectations the business is doing well from a cloud perspective. Commercial cloud growth grew 56 versus last quarter. A lot of the investments are really paying off and youre not only seeing Revenue Growth but operating Income Growth as well and thats why people are excited about this story it sets the tone for an earnings compounding story over the next few years thats really difficult for any other company at this kind of scale to replicate. You read the report the challenging in computing are being overshadowed what we hope to see them do is emmulate facebook and amazon and kind of creating that garden and selling people more stuff in that so if they can do that and tie that in with all the cloud effort that theyre doing this could be a good stock over the longterm. I wonder if were at a spot now where the overall end market for Cloud Services and software is growing so fast that we dont have to be too worried with amazon and google and everybody else and how long might that last everybody likes to make these things out to be mutually exclusive. And these companies are going to help fuel that over the next few years. When you look at enterprise Software Companies theyre the arms dealers of the Digital Transformation microsoft is well positioned because they not only have relationships at the enterprise level they have the scale too and thats very unique among all the players. Can anybody ever catch up to amazon it may be hard but hes right. Microsoft is in a good place they have Great Customer relationships. Great corporate relationships. Number 2 is going to be a big company as well. So theyll be fine. What do we think of the linked in move the thing microsoft is trying to do is bring in new Business Applications where they can talk about what they can bring to the company. Everybody has had office forever. But its tact car length theres pretty exciting things they can do in terms of integrating it in with office as well. With a lot of agreement that the story has aways to run and people are secure in this growth picture the question becomes what do you pay for the stock . Ultimately its certainly a premium to where it has over recent years, microsoft does but still not quite up to where alphabet does or even some of the larger, you know, kind of fang names so whats a proper valuation for the company right now . Well, you hit on the right topic and we have struggled with that were waiting for a tact departmentactical moment but there will be a chance to step in. At this point in time youre taking a longterm view around earnings compounding and you look at that relative to the Broader Market its still attractive on that front thank you the ftc is probing allegations of discounting at Amazon Consumer watchdog says an analysis found that 61 of the list prices were higher than the prices for the same item in the previous 90 days so this group wants the ftc to stop their purchase of whole foods until they end what they call this deceptive pricing which is if you go on the website and it says we discounted it from x and they say actually it was never x. Nobody ever puts it at x, you walk into stores all the time and theres a quote unquote msrp and nobody seems to charge that so it seems like typical retailing practice and some dont care bt it. They care about the service. Essentially somewhere this is a list price for this. Its a made up thing obviously. In many retailers as you say. Whats ironic is on the other hand people are saying you know what this is going to be a machine for predatory pricing and theyre going to use their advantage in other areas in prime to bring prices down to uneconomic levels for the competition. So are they fake or excessive discounters. We talked about the deal earlier which raised the question if going after amazon is a platform how does the public respond when so much of it is inflationary they dont have a strong opinion yet but you know exactly what theyre thinking theyre concerned that labor is suffering as a result of whats happening with amazon. Especially when theyre employing thousands of people. You saw how do you recount jobs at the bureau of labor and statistics they show you the make up et cetera, et cetera. If you work at an amazon fulfillment center, is that a retail job right. Its like how they put it in consumer discretionary. When we come back, happy anniversary to dodd frank. Former congressman will join us to talk about the future of his name sake bill and health care hitting the pause button well discuss that and whether or not were going to get tax reform jim stewart with us on that topic. Dow is down 77 off the initial lows dont go away. A used car, hey youve gotta see this. Cno. N. Alright, see you down there. Mmm, fine. Okay, what do we got . Okay, watch this. Do the thing we talked about. What do we say . Its going to be great. Watch. Remember what we were just saying . Go irish see that . Yes im gonna just go back to doing what i was doing. Find your awesome with the xfinity x1 voice remote. Wall street slooking to a new administration to roll back some of the regulatory burdens of that law. Joining us this morning former massachusetts congressman, 1half of the dodd frank act its good to have you back good morning. Thank you, good morning to you. We had you on a lot over the past 7 years to talk about this specific law, how its evolved, impact its had. Do you feel anything different on the 7th anniversary that you havent felt before. Yes some reassurance. President trump was some what contradictory and ought to be a key that President Trump was contradictory. He talked about how he was going to be tough on wall street but also how he was going to roll back some because it put an end to irresponsible practices so the question is what was his approach going to be and it seems clear that there was not going to be any sustained serious fundamental assault on the basic outline to the bill. To give a little bit more flexibility. With regard to the largest banks i dont think youll see any change whatsoever legislatively. The house did pass a very far reaching bill to cut back on everything no one is taking that seriously including the house members. But other than that im pleased to see theres reacceptance of it based on the fact that none of the negative consequences that people talked about for the economy in general have taken place. Well, there has been criticism about loan growth but what do you think about randy as a potential top Bank Regulator at the Federal Reserve the american bankers dont believe that it is true theres been some migration of lending from the smallest banks. They have overresponded but whatever i think we can make that flexible. But theres no showing whatsoever that theres a problem getting loans. Goldman sachs established a new Lending Facility as far as he is concerned i expected when the Trump Administration won that they would employ people that would not use the power to the law as rigorously and by the way, i do feel this. One of the most important things that bill did was to regulate derivatives that had been totally unregulated and the irresponsibility was a single biggest damaging factor. Essentially the Trump Administration said yeah, that regulation is is going to stay in place so i think with others there will be a nice rigorous use of the powers but theyll still be there and i believe this about anybody else i dont believe they wont use their powers theyre less likely to be as nervous as some of us were that bad practices but i have confidence that they are given to incur the kind of debt that could damage the stability theyll step in. You mention there was no legislative assault on main parts of the bill. Does that apply also to the cfpb at this point . Yes, i dont think that the legislation is going to touch the cfpb the house did but frankly the house has been an outliar. Its interesting that one of the leaders of the House Financial Service committee as it was that was really outside of the consensus. The house bill would substantially reduce the ability of the cfpb. I dont think youll see a lot of republican senators eager to vote to cut back on the consumer bill in any case i can tell you this, that cant be done on the whole to cut back on its powers. There are a number of democrats that represent states that donald trump carries some of them up for reelection. Its pretty popular. The public remembers what happened in terms of no regulation they remember bad mortgages and they remember irresponsible derivative bets and aig in general and the Consumer Bureau so no i dont think that youll see any Consumer Bureau scope. Its always fun to get former representative view of whats happening now. Talking health care or what have you but as you look into the fall, do you buy the speakers arguments that tax reform is closer to consensus than some believe . That corporate rates are within reach . That this could get done this year i dont know. First of all they have to pass a budget because you cant do this by a 51 vote majority unless you have reconciliation so yeah they might be able to get to some agreement. Whether or not you make this deficit neutral but at this point they seem to have a serious problem getting a budge passed a year ago or in december i would have told you sure theyll be able to do this but the inability of this Republican Party to Work Together and its an inability that stems from the president. You have a problem its very hard to run a government competently if a substantial number of the people involved dont believe the government has a problem thats the problem in health care and with regard to tax cuts yeah if all we had to do is the corporate rate but theres a despate about how much deficit theyre willing to accept. I wouldnt make any prediction frankly at this point im not sure that if a fire broke out in the senate that the republicans would get the votes to pull the fire drill october will be interesting. President trump expected to name wall street phenom Anthony Scaramucci as the White House Communications director as early as today he called him last night and again this morning and offered had him the job but there is reportedly concern in some parts of the white house that he doesnt have the experience. Scaramucci is no stranger to wall street or to communicating for that matter. He founded sky Bridge Capital in 2005 and recently sold his stake at the hedge fund as he prepared to join the Trump Administration sold it to h and a i meant to call him to find out did that deal ever close because h and a has been under incredible pressure from the beijing government about overseas acquisitions. They got their credit lines cut and i tried to find out. Try to find out late teerd press Secretary Sean Spicer will reportedly stay on he has had a lot of possible jobs its a place holder right now. The institution that many republicans would like eliminated. When we come back, Pulitzer Prize winning columnist jim stewart is with us why the president should avoid a rigging approach to tax reform still under pressure off lows the dow down 43 points ge and others dragging the overall market down. Looks like right now nasdaq win streak would end at 10 but its ua ol. Early and only down smal sqwkn the street will be right back stay with us han making me move stuff, 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. See options data like never before. With thinkorswim only at td ameritrade. I enjoy the fresher things in life. Fresh towels. Fresh soaps. And of course, tripadvisors freshest, lowest prices. So if youre anything like me. Youll want to check tripadvisor. We now instantly compare prices from over 200 booking sites. To find you the lowest price. On the hotel you want. Go on, try something fresh. Tripadvisor. The latest reviews. The lowest prices. U. S. Officials say the Trump Administration will ban american citizens from traveling to north korea following the death of University Student who died in june after falling into a coma in a north korean prison secretary of state Rex Tillerson decided to impose geographic travel restrictions for the communist country. A powerful earthquake shoot shook greece and turkey leaving 2 tourists dead on the greek island the quake caused a two foot sea swell that hit shorelines clark amid a dispute 800 palestinians gathered for friday noon prayers at the old cities lions gate which is one of the points of violence and Justin Bieber has been banned in beijing because of past bad behavior the city said it was acting in the interest of imposing standards and cleaning up the domestic performance market however it did concede that the singer has talent. Bieber is currently on his third world tour you are up to date thats the news update this hour ill send it back downtown to you carl. Sue, thank you very much. With the Health Care Bill now stalled the gop agenda is shifting to tax reform as you know its been three decades since the last major tax overhaul and its considered a must win for the white house. Joining us is jim stewart. Takes a look at whether or not jim you can go back to 86 and do what they did then you talked to dave camp, this is going to be an interesting series of columns for you. Exactly one thing i want to say up front is that i feel, i dont care where you are in the political spectrum i think we need tax reform i hope this administration can accomplish something constructive i do and im trying to be that way but the reason i spotlighted reagan right away is that Everybody Loves this man, republicans, mild of the road, democrats. They all hail this so i said why dont we just go back and do it again and as i got into it i realized dave camp a couple of years ago tried to do exactly that and you run up against some really tough issues that were not there then that are there today. The biggest one of those is there were some bright targets for raising revenue in 1986. Massive tax shelters and Huge Investment tax revenue so you can use that to cut rates. There arent that many loop holes and theres not a pot of gold and the biggest loopholes are for Real Estate Developers so the main way that he raised revenue was to get rid of all the tax breaks for Real Estate Developers. There were a million deductions before Ronald Reagan and all of them went away and we were left with mortgages and 401k. Now irving wants to get rid of state and local taxes now the plan did that but that doesnt really get you very far. I mean, camp was able to get the corporate down to 25 . He couldnt do a lot with individual rates three brackets top 35 but then a surcharge so didnt do a whole lot there. That is a tough problem that theyre going to face now. Broadening the base, everybody agrees this is a good idea in principle when you have a much Broader Group of people saying taxes its less lumpy. When you rely on Capital Gains up and down like crazy broadening the base means going deeper into middle class and deeper into lower income individual people argued flat tax everybody should pay something but thats really politically difficult. One of the brilliant things about the reagan plan is it was primarily sold on the fairness issue they werent equitable system nobody is talking about fairness now. The minute you start saying, if you just say here we have winners, here we have losers, the losers go crazy. That was one way now people were saying you can raise revenue that immediately ran into a fire storm because the importers lose, the exporters gain you have winners and losers and all the losers starting with walmart went into full lobbying mode cant even be talked about theyre going to have to strategically use some of the reagan things and then also, i hope the white house that President Trump will say well im a Real Estate Developer second and theres some loopholes here that i benefitted from he said that in the campaign and he knows how to close them so lets close a few of these. Or if maybe comprehensive tax reform gets placed on the too hard pile where does that leave us youre talk about tweaking the corporate rate down. Collecting and getting tough. This is a good point too because i feel that the administration and this congress has to do something here they have whiffed on health care now. That is a huge issue and theres other big, big, big promise has been tax reform and boosting the economy and if they just fall into more in fighting here i think thats politically a disaster. The ultimate number really matters. They can only get down to 25 . That isnt, when you look at the effective tax rate look at just the companies that reported this morning. Not a single one of the big ones is is paying above 20 or 25 i know the overall number is much higher but if you want to effect growth you must get lower than 25 or 20. I think you do. I think they can when they get to 15 i dont think so but theres another option does it have to be revenue neutral and how much growth is going to stimulate. Reagan also cut taxes in 81. The deficit soared so i dont think you can count very much on growth but you can maybe count on some and it might be possible to be totally revenue neutral. Not anything like the crazy trillions. But when you go back and look at the tax revenue from day one from Ronald Reagans presidency from the day he left, tax revenues doubled they doubled i mean, he cut taxes and yet tax revenue went up. Now we had a deficit because he dramatically increased defense spending revenue wasnt a problem. Revenue was fantastic and by the way that reform was widely credited with a lot of the incredibly Strong Economy which is why the revenue went up so much if you can deliver growth and you are going to raise higher revenue with lower rates no question about it but given the demographics and the aging baby boom population thats really a stretch. We have to use some reasonable growth molds here and we have the tools now to estimate that so i would say if its not quite revenue neutral thats not the end of the world you can push up the deficit a little bit but not totally blow it open and thats never going to fly with this congress because theres enough republicans that are not going to just lap the definite in order to come one the 50 votes. No one agrees on the cbo forecast anymore and people believe that agency has been partisan influenced. Or they have gone outside their core competency. I dont know what they know about health care compared to budgets, right theres a lot of work thats been done by the staff on tax reform over the years. They know what theyre doing and the optimist in me says it is possible its going to take some political courage. Take some Political Leadership its going to be cutting breaks for the Real Estate Industry and we may not get to 15 but it could be way better than what we have now and way fairer and something that people can have some trust in. Maybe after multiple attempts 86 was not reagans first swing. It took three years i was reminded when i read your column. He also reached out to the democrats and it wasnt this my way or the highway kind of thing. Now if the republicans have all the branches of government now so in theory they could ignore the democrats but why not listen to them a little bit too great piece. Thank you. As we go to break take a look at shares in chipotle. 350 is a new low for the year. Awfully close to multiyear lows. Health con serns abocerns about restaurants. Ge down year on year is one reason that stock is down almost 4 but off of the initial lows of the morning well go through those when we come back. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. [ intense music playing ] ] its here, but its going by fast. The opportunity of the year is back the mercedesbenz summer event. Get to your dealer today for incredible onceaseason offers, and start firing up those grilles. Lease the e300 for 569 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Down more than 3 in the morning. Don has been listening in and joins us with more. Its not just muted in terms of guidance. There was no guidance given at all and thats one of the reasons you saw an acceleration of the moves to the down side and throughout the course of the premarket that is now carried over into the regular session of trading. This is a one keyword type situation for ge and thats transition its the last time the current ceo and chairman will be manning these Conference Calls august 1st comes the time when John Flannery takes over the ceo job as well. So when we talk about the way these things are moving about theres a reason why these guys have declined to provide an outlook for 2018 sit because theyre still trying to work on what that will be period john spoke on the Conference Call with regard to whether or not the company is in limbo with regard to this transition phase and this is what he said. Jeff laid out an frame work for the year already so there should be no change in thinking around that. And you have our outlook for the year i look forward to a robust look around the company and not worried that well be dead in the water in the meantime. He mentions november. They will spend the next few months trying to put together and resetting some of the expectation and guide lines for each of the multiple Business Units and as we approach that november time frame a lot of perhaps question will be around whether or not this company has provided the right business mix and whether those expectations are in the right scheme for the Overall Company ge but a huge number of questions left to be answered ill also say this, it has been since 2001 since he took over that ceo chairman job, this Analyst Community has been along side him for 16 or 17 years now so there was a lot of at least on the phone call a lot of not congratulatory but more see you later, wish you well, that sort of thing so that came about the call as well, back over to you. A very long tenure although ge has that characteristic thank you very much. For more analysis were joined now by morning star thanks for being with us this morning andrew, just characterize exactly wall streets response here obviously some disappointment given what the stock is doing. What more do investors want to hear whether about the plan forward or the operation of the company through the rest of this year its a good question. I think you said it already. People wanted to hear something about the 2018 outlook and there wasnt much about 2018 i think jeff talked down the numbers here in 2017 a little bit toward the low end of the 1. 60 to 1. 70 range i dont think people necessarily liked that i think we newcombing in that it was going to be a bit weak and nothing is really surprising there. The Biggest Issue is that they kind of left us in limbo without waiting for this november analyst day. So barbara with everybody having to wait for more specifics, what do you think investors should want to hear about the details of a plan, whether its about the business mix, the structure of the company, different points of emphasis under a new ceo i agree with everything thats been said up until this point and say that the market doesnt like uncertainty so i think that explains the downward movement in the share price today so its pretty clear that ge feels comfortable that theyre at least going to be able to do it early 2017 2017 doesnt look all that bad the uncertainty is 2018 and beyond its a little bit more, lets call it detail and connected to ges longer term process that will make the market feel the same Going Forward and its negative talk and the Company Faces and i think investors need to be a little bit more comfortable and as bright as we think it is and its the opportunity to see. On that note andy, 3. 7 right now, the negative cash flow last quarter had some people so worried started to question is that dividend safe is this put that to rest considering so many people buy the stock for income he always has had weaker first half of the year from the second half of the year, thats how we model it. Thats how they talk about it. So i think dividend yield is safe here. We argued that and one of the worst days of his career and had to lower the dividend we dont think theres any real risk there especially as we do think cash flow is going to wrap up from here. Barbara whats going to get investors more comfortable with the valuation of this company . Do you think they have to stick to the 2 a share guidance for next year hanging out there not yet afirmd or do you even think that just any clarity on what theyre going to earn in the next couple of years will be enough to say at 25 a share, its worth a shot. Any sort of additional clarity on the longterm process that ge shares gain a little bit momentum than weve sewn recently at the end of the day this is a long credit Cycle Company and that comes through. All right thank you so much. Now lets send it over to john forte he has a look at squawk alley. Millennials are actually doing with these implications for snapchat, facebook, instagram, more, the numbers might surprise you on squawk alley. One trader says another f. A. N. G. Trade stock could surge. At fidelity, trades are now just 4. 95. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Investors put more money into hedge funds than they took out. Leslie picker joins us. Thats right. Finally good news on the beat. Investors put 6. 7 billion into hedge funds during the second quarter. It was the first time in six quarters that hedge funds saw in flows. What got investors so excited these days interestingly, its the strategies that offer protection in a rising Interest Rate environment. Think nondirectional beta reducing credit and multistrategies. Investors are pouring capital into computer driven strategies have been very trendy among lps these days theyre chasing underperforming returns. Socalled Systematic Strategies returned 3. 17 in the first half of the year which compares with the more traditional human led hedge funds which gained almost 6 thats according to data and the returns net of fees still underperformed the s p 500 index. Now underperformance has been a key reason for redemptions over the last few years investors have opted to move the money into passive funds that have been generating higher returns for lower fees or private equity which has a similar Fee Structure to hedge funds but has been able to justify them with better performance. Even if hedge funds start outperforming again, there is no guarantee that these investors will come back thats the warning in a new report out this week the Research Shop writes while the industry is firmly positive for new flows in 2017, one cant help but to feel the ground is not as steady as it seems. So while the data is coming in positive for hedge funds in 2017, they may not be experiencing a complete revitalization yet guys fascinating picture of some of the flows, leslie well watch that thats for sure. Thank you very much, leslie picker back at hq. Dow is down 80 points. Paying attention to the markets. We have to keep our eye on germany. The dax down almost 2 here. Lowest since april the euro is having some impact the euro is roaring its down 4 even the broad european markets have been outperforming the u. S. Well see if its a leading indicator or just a reflection of what is happening in the fx markets. I think its both, potentially. I think it is definitely. At what point did draghi get nervous . It becomes this push and pull with Central Banks a little game of chicken. Well see if jackson hole is when they talk about that. Thats right. Hes coming for the first time in a couple years. As much as you can get in central. Yeah. This is the world in which i operate. Meanwhile, oil, too, has gone into the red speaking of jaw boning, whether its rates or crude, there is an opec meeting next week in st. Petersburg. Why do we bother offering opec the football pulled away from Energy Stocks again. They had a nice bounce the first part of the week losers today my point is fracking, every time prices go up, fracking comes back right . We are now what drives oil prices way more than opec. Thats right. 1 00 today good way to spin it positively when we return, the nasdaq trying to finish positive for the 11th straight session. Well talk with jean munster about techs recent run with the dodo 8w wn7. Experience uncompromising performance at the lexus golden opportunity sales event before it ends. Choose from the is turbo, es 350 or nx turbo for 299 a month for 36 months if you lease now. Experience amazing at your lexus dealer. [car tires screech] [bell rings] welcome back to squawk on the street. Utilities the only sector in the green. This as Oil Prices Fall on some renewed concerns about possible oversupply in the Global Markets. Big laggers is transocean and chesapeake energy. A slew of these energy names are expected to report next week on monday we have petroleum and big energy will provide a bulk of the reports next friday, of course, with chevron and exxon due out before the opening bell on that day. So as we talk about energy, oil prices certainly a focus to day as oil prices are down 1. 5 overall for the day. Well see if that sticks around for the afternoon. That does it for this hour of squawk on the street. Lets send it back downtown for the start of squawk alley. Back to you. All right dom, thank you for the good work this morning it is 8 00 a. M. At microsoft headquarters in redmonday, washington its 8 00 a. M. On wall street and qua and squawk alley is live good friday morning welcome to squawk alley. Were at post 9 of the new york stock ch