48. Road map begins with global head winds. U. S. Futures taking a hit as chinas market turmOil Continues. Seeing a little relief so far today and now investors turn their eye to the fed whose meeting kicks off. Big names this morning include ford, dupont, and ups. Merck reporting some mixed results this morning. First up futures rising as the s p looks to avoid its first sixsession losing streak in three years. Another decline in china. Shanghai down after an 8. 5 slide. Jim, you tweeted this morning the government took out some bad longs in china overnight. What does that mean . Im watch where the government is playing this and believe me the government is the natural buyer in this situation. They get the market come in bad. Then they let the market drop about 4 and futures were down. Then they just jammed it up plus one. Then the sellers came in and they stabilized it. Its kind of a victory for the bulls because it didnt close down. A typical collection and now theyre stabilizing it. You catch the shorts looking the wrong way and get the longs thinking maybe i can get out of some situations. I continue to believe that in this great bear market the government will stabilize the rate of decline. We are china. Its like we are penn state. We are china. Lets not confuse things. The Chinese Government is a very good trading organization. Think history, chinas government has been good traders, whether its for iron oar or copper. Theyre putting their skills to work to work on the chinese market. I cant tell if youre sarcastic or serious. I am serious. Ive stopped sleeping entirely because sleeping makes no sense because were china. But you know these experiments add badly. But slowly. Youre saying this is nothing new for them. One school of thought is theyre new to capitalism and open cap 258 markets. They screwed up and now theyre playing catchup. When you try that down pocket of 7 to 8 , thats to kind of say we cant keep it up forever but we will stabilize it a little bit lower and then take it up a little bit. I think they probably want to take it up tonight, maybe a 1. 5 tonight and then let it come in a little. They will manipulate think thing for months and well have to deal with this for months. This is bigger than greece. When i say im staying up i wake up every hour to say what are they doing . The government is making a stand here. Im not being facetious. You think real buyers are coming in . You they i dont. Thats the reason i felt it was more important than greece when it was important, kind of. You know where it all ends or the impact overall and the chinese economy ends up being the key. Bridge water was last week pointing out the fact that 67 of those buying stocks had less than a High School Education and were doing so on margins. What does this mean for psychology was a key question some for asking but for an export driven economy, the question is still is it going to make that big of a difference in terms of what china buys . They got 1. 2 trillion in treasuries. Thats a lot of fire power. If they want that market to go down, maybe they want it flat. The regulars is up about 20. They want that thing flat. Again, what i am saying is that the chinese have even if you read novels about how they trade the pickle market its called pickling. They pickle. They pickle tin. They pickle ierpron. And they screwed up. There was too much enthusiasm. A lot of their State Government banks went in. That was a bad call. Theyre trying to clean up the market. Dont count them out to be able to have the air come out of this market in kind of a 2000 nasdaq way. It wasnt great but it didnt destroy the economy. Thats a good point. It destroyed a generation of investors who then went. That will happen here. But it didnt theyre looking at our market closely, i think, 2000, theyre saying listen a lot of people are going to lose money but were not going to let this destroy our economy. The economy is terrible. Everyone still says its growing. Who knows . The numbers that come out of china, are they the central committee. Right. Im not kidding about any of this. I think this thing has become one of the giant Theatrical Productions of our time the chinese economic numbers. The piece in the Washington Post today saying the reason they have trouble with open Capital Markets is the idea is all investors get treated the name and this notion of of you may win or lose is difficult to get their heads around. Theyre trying to readjust. If you want to know about the readjustment, you have to think about Johnnie Walker blue going down to Johnnie Walker red. There are stages between blue and red. Ive never been a scotch drinker but yeah. Red, black, green. Theyre trying to walk it down to Johnnie Walker red. I never once thought it tasted like terpen tine. Are there scotch drinkers in china . Its like the idea of the big watches, its out. Now its pops watches. They are literally trying to bring this thing down in a responsible way, and its just difficult to figure out what theyre doing other than the fact that its bringing it down. You see the iron oar . Yeah. Your friends, second biggest quarter of iron oar ever. My friends, yes, all of them. Even in his worst moments jerry jerry vail had bigger hits. We have strength in north america helping ford beat the street. Dupont in line company lowering and ups is exceeding forecasts led by growth in international. Well talk to the ceo in the next hour. Intraeurope was up 8. 5 even as u. S. Deliveries are up 1. 8. Theyre saying europe is helping a lot. Ford was impressive. Ups was impressive. Ingersoll not impressive. Dupont is not impressive. For is the stock price. Its got a couple little stops inbetween but mid 70s to mid 50s is what were talking about. And interesting trian is holding on. Some thought perhaps having lost the vote to get on the board in any way, they would have been a seller. That was the threat but they didnt do it. And one has to imagine, jim, that theyre going to mount another proxy fight. Have to. Its a while away but if im dupont, im thinking about it. I doubt it but maybe they reach out and do something proactively instead of going through it again. But staying on as a shareholder means theyll have to do it again. The lines of business is weaker. The chemical has been a horrible stand out. Norfolk southern could bounce. Dupont how can nelson peltz after what he said at alpha not come back. This is that peltz told you a couple of weeks ago. Dupont was a significant loss because you did a lot of work. The stock ran up. Its been a significant loss for shareholders. Stock has gone from 80 when i was on your show march 12th. It was my wifes birthday that day, and the stock was 59 yesterday. But we havent sold our shares. Thats not our style. And were going to wait and watch and see what management and the board will do from here forward. And Ellen Coleman was in my office last week and i said to her, the second least favorite thing that id like to do is have another proxy fight. But the first least favorite thing id like to do is to see dupont next year at this price. People are asking you on twitter, does ellen go on the wall of shame and whether we all need to apologize for peltz for accusing him of targeting women. I never thought he targeted women. He made a pretty good case that you know. We asked him about that and he said it had never to do, it was pure kwoinscoincidence. The record is not bad. And trian is up a slight bit on their position but very little. Obviously its an underperformer. The wall of shame you have to knock yourself out to get on there. You have to work hard. This is an not an easy thing. The hofers its easier to get on the hof than the hos. It requires the amount of work youre seeing from caterpillar. That guy, i know hes trying to get in. Hes doing his best. No . I think youre right. Nice fella. In this case it is a final point here the idea that they might launch another proxy fight would be a ways out is probably enough to get dupont to say come on. They can invite everybody on board at this point. Anybody whos related. Nelson mentioned march 12th was his wife. They could come on. On ford north american record profit. The outlook stays flat even as they take china down on industry sales. Jpm, transition year to break out year. I thought mark fields did a good job. I saw a lot i liked. I thought europe was good. I dont want to call it a breakout quarter in the autos. When you do that you end up with egg on your face. This is marks best quarter, and that stock has done absolutely nothing. Maybe theres a chance it can go to the high 15s from the 14s. July auto sales may see 17 million rate again. That would be the first three months in a row weve gotten that since 2000. The auto sales, its the brightest brightest part of the economy other than than investing in your home. We had one that was as good of fortune brands. Im looking for stanley to have a good report Stanley Black and decker. Thats a great thesis thats working in a market where its very narrow. Yeah. Well see how ford does today. When we come back merck boosting on its cancer and diabetes drug. Later on Susan Cameron, the cigarette maker posting an earnings beat two for one stocks split. The s p clinging to a 4point gain for the month of july even as the dow has gone negative for the month. Squawk on the street will be back in a moment. My name is ronda derosa and im a gas superintendent for pg e. As a gas superintendent, im responsible for the safety of the public and our employees. Pg e is using a lot of new technology to improve the safety and reliability of our pipelines. My wife and i live in the bay area with our two kids. This is where i choose to raise my family. I want it to be as safe as it can be for our customers for my family, for my friends. Thats what drives me. Pg e is here to help our customers. Were here to deliver power, were here to deliver it safely and reliably. Together, were building a better california. A long losing streak here. Dow futures up 76 points on a day with a lot of earnings. Twoday fed meetings. When we come back the merck ceo will talk to us. Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . Here at td ameritrade, they work hard. Wow, that was random. Random . No its all about understanding patterns like the mail guy at 3 12 every day or jerry, getting dumped every third tuesday. This happens every third tuesday. We have Pattern Recognition Technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. For all the confidence you need. Td ameritrade. You got this. Stronger dollar hurting sales at merck. The drug maker reporting earnings which topped estimates by a nickel. The company also reporting an expansion of the cancer drug pipeline. Megs with us this morning joined by the ceo ken frazier. Good morning. And good morning, ken. Thank you for joining us. Always a pleasure mega. I want to ask you about your big immune know therapy drug you said its the most prescribed drug in melanoma. Tell us about how you anticipate competing with Bristol Meyer in lung cancer. Were advancing the promising pipeline across the board. But this drug is progressing ahead of expectations in advanced melanoma narcotic. As we move into lung the key will be how we can work with the fda to present the data that we already have which we believe is impressive in a way that helps physicians and patients understand the drug and how kk best with used. Were very excited about the opportunity to bring the drug to patients with noncell lung cancer. All i can say is were well prepared. Folks are operating some data on how well that drug improves overall survivor helps people with lung cancer live longer. When do you anticipate that data to come out . I cant give a date for that but i can say the information we have now with respect to this drug pdl one positive people we see a Response Rate of over 50 and thats incredible. That presages the kind of outcome data well get when it matures. You mentioned an update about your Hepatitis C Program saying you expect an fda decision early next year. How are you looking at the market. Gilead is there. Theyre curing a lot of patients. Is there still room for you to come in and make big sales . Absolutely. We think this is a market thats going to be a strong market for many years to come and what we hear from outsiders, patients and groups and others is that people are very excited about the particular drug. As you know this is a drug thats very useful in a sub population for people who have chronic renal insufficiency. It provides unique therapeutic value that none of the current products do. Sir j, thank you for calling in. What i thought was interesting, theyve got a fabulous antidepression antidepression, schizophrenia drug. Where are we on that what would be kind of a miracle drug . Our focus right now are on the new opportunities coming through. For example, in the area of neuroscience, the base inhibitor for alzheimers is coming up earlier than that and were focussed on our late phase pipeline. Alzheimers is a huge area. Thats a great question. I thought biogen was too promotional with aslzheimers. Youve been reserved about the situation. Duke do you think youre ahead of these guys and merck has not been a promotional company. We have good data that says inhibition is linked to the development of the plaque thats related to the alzheimers disease. Weve always been a company that followed the science and until we have data we think the responsible way to deal with this particularly given the fact that patients are waiting for a breakthrough in this area is to say what we know based on the data and we are very excited by the opportunity, but thats just not our style to try to talk about it before we know what were talking about. Mr. Phraser, david faber. A broader question from me. I know youre no strange tore watching the consolidation taking place amongst the hmos or the pharmacy benefits managers. Is it your thought that there will be even more pressure on those who develop the drugs to keep the prices as low as possible . Certainly, as you have consolidation of buyers youll have more pricing pressure but weve anticipated that. Look, we do business around the world in single payer markets like in europe. Weve learned its important to bring products that bring unique value and meet unmet medical needs and thats what merck has been good at. Weve been great at first in class medicines that make a huge difference. You can see that right now with drugs like hepatitis c, the program that we just talked about in alzheimers. At the end of the day, i think were well positioned to succeed in that kind of world. Were hearing more and more an outcry over the high cost of drugs, particularly cancer drugs and as key truda will be combine with other cancer drugs, do we need to change our pricing paradigm to pay for this . Pricing is a big issue. I think right now we are focussed on the therapy and were seeing incredible results and i think theres no question from a payer standpoint or patient standpoint when you look at the benefit this provides and the other costs that are avoided with people who are being treated well and are responding, theres no question in my mind that key true is valuable and frankly, while theres been some stuff in the newspaper, its well accepted and thats why you see it launch ahead of expectations. Thats why we have leading market share in this category that were participating in now. Thank you for joining us. Its always a pleasure. And at merck, were looking forward to the great scientific breakthroughs we know are coming over the next through years. Thank you. Thank you both. Well get cramers mad dash and count down to the opening bell . Just a minute. Just a minute. Just a minute. I just a minute. In just a minute. Just a minute. Just a minute. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . A little more than a minute from the opening bell. Lets squeeze in a mad dash here. David, i think i found the worst quarter of the year and it is baidu. From now on its called buy dont. They had an 81 increase in expenses. Theyre doing this john line to offline business. Theyre doing a grub hub business. Youre going up against amazon. Theyre doing streaming and Deutsche Bank takes it by the hold. Theyre painting a lot of their hopes on a show called the running man. My stepson is fluent in chinese and he says this is a game show where they set up some six or so men on the starting blind date with women and the person becomes their partner for all these weird competitions. They push each other out of rice bowls. And the final objective is to name a queen or king. Thats the number one show. Theyre pinning their hopes on the running man. All you need to know. Theres the opening bell. The s p at the bottom. And at the big board, kevin oh leery. Hes going to join us later. A huge flag of kevin outside the nyc. That was a little arresting to walk into this morning. Over at the nasdaq its bed bath and beyond doing the honors. A lot of people arguing that ford should be doing better than it is and that even gm and larryear faded. Ups, theres a big short base because people thought they would screw up and they didnt. Theres no short base in ford. The stocks that are going up like fang these are stocks people are betting against. I was in maine and i picked up the paper and there you were. I said i know fang. I know that and i even know the reference to soupy sales. Ive moved on now. And now there is a thought that unless a company has a considerable short moment here where a lot of people are betting against it its hard to get it higher. Thats the sign of a bad market not a good one, but if the fed says were on hold because of china, a lot of buyers are going to come out of the woodwork. Masco is the number one gainer on a list you put out last night in stocks you feel comfortable this. They are part of the investment thesis that home depot profounded on the last call. When you feel your home is going up in value, you fix your cabinets. Kitchen and bath does better. This is all the investment. Now, what they say, a great cfo, she says on the Conference Call that if people think their house i