jcpenny and nordstrom reporting. >> expected in just a few minutes, we'll be bringing to you. >> and pixar's new films. first up. let's talk about the markets with david rosen berg, the chief economist at gulskenshef. good morning. put the weekend into perspective. we have macro numbers today but still the discussion remains even though there was a quiet overnight in china. what they're trying to do and if it's what we've been asking them to do for decades. >> you know what's interesting? everybody talks about how it comes as a surprise and practically every economist says i've been calling for this all yearlong. i think this is not a repeat of 1994 when china devalued 30% and ultimately touched off the asian crisis a few years later. this is more strategic in the sense that really the bigger story is not really the devaluation but the move to allow market forces to play a greater role in determining where it's going to be. that's part of the imf report that basically stated that's what china would have to do to get part of the sdr package. that's obviously one of their goals. i think the timing was interesting. it happened after the nonfirm payroll report on friday. everybody believed the fed was going to tighten next month and remember inas far as as china, the import monetary policy and the last thing china needed was to import a tightening in financial conditions at a time when their economy is slowing down. as far as i'm concerned, i found it fascinating as to the fren etic response. to me it's a 10% of teapot. >> you mentioned the impact on the federal reserve. wholesale inflation numbers out. do they have that as an excuse not to move in september? >> i think that although you've had a couple of months with the core ppi up.3, this normal is volatile. the year over year trend is in negative territory and the preferred inflation measure is running a bit of a 1%. you adjust the unemployment rate for the participation and the unemployment rate is still north of 8 % on that basis. i thought the fed would take a pass, and i think there's a chance they could move in september but only because so many of them want to move audiotape of zerp. they realize next year is complicated because we have an election. i'm not perturbed about whether they go in september. it's the flip of a coin. if they go, it will be once or twice and that's it for the cycle. >> what about the drop in energy? are you alarmed and do you think it's going to be a stumbling block for the equity block to move higher? >> it's always a double-edged sword. being in canada, it's terrible news for alberta. the oil price is down to almost $20 a barrel for canadian western prices, about $30 a barrel. it's terrible news for producers in western canada but the problem with the oil market is still one of supply and demand. the big surprise is even with the collapse in prices, we still have a global supply glut of roughly 2 .5 million barrels that has to be worked out. i think the downward pressure continues and it creates winners and losers. the question is at what point do u.s. consumers respond forcefully to a de facto tax cut. hopefully the retail sales number from yesterday is going to be -- maybe lays a trail for the consumer. >> and in terms of you mentioned what's happened to the oil names. we have a market where we're just a few points off the all time high in the s&p but a large percentage of the components are in correction territory or in bear market territory. a lot of the bears are worried that that extreme weakness in a section of the market will beget broader selling. does that happen and when does it happen? >> and we've been braced for it. you know, expecting a near-term correction. i think that the big surprise really for me is why everybody is so surprised if we get a correction. they usually come once a year, even in the context of a bull market. you typically get corrections once a year, and it's been four years since we've had a broadly based one, not one that's just sector specific. you're quite right that the market is taking more of a broad-based decline here. it's really been a stealth correction. i expect near term it's going to continue. i don't think it spells the end of the overall bear market. that happens when we see the whites of the eyes of the recession. 1984, the market was flat. 1986 with the gyrations, the market was flat. 1994, a year where we had over 4 % gdp growth, flat. 2004, flat. the market doesn't go up every single year even in a fundamental bull market. you've had the market go up 15% per year on average with corporate earnings going up 5% per year. this is a year where basically it's a correction really in time taking a breather and allowing the earnings to play some catchup. the reality is despite all the talk, earnings are negative. the underlying earnings, stripping out the energy side is running over 6% year over year. it's pretty good. >> and better than expected. david, very quickly. wanted to get your thoughts on emerging markets. i get made fun of for watching. the turkish lira hitting a low. how do we know if what's happening in emerging market is just an adjustment to the fed or is something to worry about like the 1990 snz. >> it's an interesting question. we have the template back during the asian crisis of '97 and '98. the fed held its fire even though at a tightening bias throughout the crisis. the fed may not always talk about foreign developments but they take it into account. it's a complicated issue. commodity prices are part of the inflation equation. the problem, i think, for the fed is they told us at such time they start raising interest rates, they have to feel confident that they're heading to their 2% inflation market. emerging markets commodities are joined at the hip, and so as long as you have goods priced deflation, that's a huge anchor. and that's why i think the fed doesn't have to be in a hurry. if it's going to move, it's once or twice. it's only to stay silent next year in the election period. >> david, it's a good talk. we'll talk to you soon. david rosenberg joining us this morning. >> shares of disney are hitting a rough patch but the dow component is leading the broader market as it kicks off its d 23 expo in california. up 14 % for the year. jane is here with a special guest. >> reporter: i'm here with john. i promise you we don't talk about emerging market currencies today. >> that's a different language for me. i don't quite understand it. >> reporter: let's talk about the language here. this is huge. >> it's bigger than ever. our fans are the best fans in the world, and this is a chance for us at disney to be able to give back and this expo this year is unbelievable. and we don't market to these fans. we show them things that they have never seen before, behind the scenes, introduce new stuff. lots of announcements. brand new stuff all three days. >> reporter: what's the behind the scenes? >> the first one is 3:00 this morning. i am going to give a presentation on the future films coming out from pixar and walt disney and we're announcing a bunch of new stuff. we have a lot of announcements there. >> >> reporter: can you give me a tease? >> i'll say i'm directing toy story 4. it will be coming out in a couple years from pixar. and it is something, i will say, that it's something we've never done with toy story 4. it's a love story with woody and, this is news, bow peep. >> reporter: buzz? >> come on. >> reporter: it's a new world. things are changing. >> bow peep. woody loves her. >> reporter: okay. it has been twenty years. i hear is cast is going to be here this weekend. franchising at pixar hasn't been a thing you've done traditionally except for toy story. >> wait a minute. it's not something we've done recently? >> reporter: i'm sorry. sequels. we're going a sequel to finding nemo. >> exactly, and how much pressure is on that for that to succeed? >> at pixar and disney, we only make sequels if we come up with a story that's as good or better than the original. that's the rule. we don't do things just to print money. it's about great stories. that's what we do. and it's really exciting because we do have anders stanton who wrote and directed the originally, they're writing "finding dori". >> reporter: incredibles? >> they are coming back to do a sequel. thank goodness. that's the one i-been waiting for as well. it's so exciting. >> reporter: "frozen"? >> that's right. another one is coming out with the original writer and directors. but it's really the original films that really blow people away like inside out. that is just a tremendous -- >> reporter: a sequel, maybe? >> i don't think it's been announced yet but we have a good dinosaur. this is a banner year for pixar. it's a two original animated films coming out in the same year. and wait until you see = the good dinosaur". >> and i see you've managed to explain how dinosaurs and humans were on the planet at the same time. >> that's right. it's always what ifs. if if there are monsters through the door. this is the biggest what if ever. what if the meteor that ended dinosaurs missed earth. that's a good dinosaur. >> reporter: all the cool kids are doing deals with netflix. have you thought a deal with netflix? >> we love our movies and get them out to as many people as we can. at home we love netflix, and it's an interesting model, but we like to get it out to as many places as we can. >> is there a small screen mobile screen vision in your future for this or is it all just the big film? >> yeah. our films are made to entertain audiences, and we love the fact that there's so many options for people to watch it. a lot of film makers only want things to be seen on a big screen, which i like. that's why we make it in that, but also i love watching things on my ipad. and i love the fact that our films. one of my favorite things to do is when you're driving on the freeway and you see the suvs with the screens in it and we drive up and look, like, and half of the time they're playing my movies. i honk and wave. then a they have no idea. and a thumbs anywhere. anywhere you watch my movie, i am a happy camper. >> reporter: shanghai disney is a big thing. how much do you watch chinese box office? the economy there is having a bit of a stumble? have you thought about putting a chinese twist in any movies? it's so big. >> what's interesting is in october i went over for a big asian tour. i got so inspired by the fans there in the audience and stuff, and it always kind of filters into our studios and films. we always want -- our films are translated in up to 48 languages. so we have to make our films as international as we can. and china is turning into one of our biggest markets. our recent film, "big hero 6" was a huge success there. and the main character, he was called big white there, and he became an internet sensation. how the song from "frozen" was here, big white was there. >> a >> reporter: and apparently the chinese olympics like that song too but does it make you rethink your story. when you have a country of over 1 billion people in. >> absolutely. we rethink for all of our markets. southeast asia is a growing market for us and all those countries down there. latin america, brazil, of course europe is also really strong for us. we really are excited about all these markets but we're so kpielt excited about the markets where the emerging markets where the growing middle class, they're building theaters like crazy and they're gorgeous. >> the theater is not dead? >> the theater is not dead. there's no way it's dead. >> reporter: and this is a cool shirt but they will be selling a $99 shirt here at d 23. >> this is the signature shirt. i make sure a hawaiian shirt is made for each of our movies. they decided to celebrate by doing a special shirt. this has a character from each of the movies i've worked on. we have this incredible story based on the legends coming from oesh yawn inn in a, and the cul and the music. >> lava made me cry, the short. >> it's great. >> reporter: love, love. thank you for joining us and we'll be here all day. next time i'm at the star wars pavilion. i'll try to get serious then. >> whatdo do you know about tha >> reporter: i know everything. i know there are a bunch of characters i need more information on. >> you tell me when you find out. >> reporter: like the first o d order and the thing. and the woman from the game of thrones. >> i can't wait. >> maybe some unexpected love stories. who knows, jane? thank you for that. one of the great story tellers, of course out there, john. i agree with him. can't wait for "incredibles 2". let's go to rick. >> reporter: i'll tell you what. lots of wild numbers today. if we look at industrial production, it was up 6/10 of 1%. that's better an anticipated. this is the seventh month of data being july. this makes two out of the seven positive numbers. that is a good thing. if you look at capacity, about as expected. here's the issue. significant revisions to june, the other way. we're talking about pretty big. so that 78.4 that we had in our rear-view mirror in the last look utilization moves. and the industrial production only moves now to up one tenth. these are important revisions. but maybe the most important aspect today, some of the earlier data that was maybe hotter on ppi or the hurdle of numbers that are now in the rear-view mirror. two-year note yields approaching significant levels at 73 basis points. look at that chart when you can. back to you. >> rick, thank you very much. when we come back. when we come back, jcpenny reports comps in the fours. back in a moment. 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? big day for retail. jcpenny is going to open up about 7% or so after the company's losses were less than expected. comp sales up 4.4, and we'll talk about how they're trying to make their way back. take a look at the futures here. we give back a little bit, dow settling higher for the week at 34 points. art cashin will join us in just a moment. when you're not confident you have complete visibility into your business, it can quickly become the only thing you think about. that's where at&t can help. at&t's innovative solutions connect machines and people... to keep your internet of things in-sync, in real-time. leaving you free to focus on what matters most. i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet? futures under pressure ahead of the opening bell. s&p set to open down 2. dow down 8. we are awaiting the secretary of state. we'll get you there live as soon as he starts speaking. the opening bell just a moment away. i'm here at the td ameritrade trader offices. ahh... steve, other than 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 that 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... what's up, tim? for all the confidence you need. td ameritrade. you got this. 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? about three minutes before the bell on this friday. let's bring in art cashin who joins us here at post nine. good morning to you. $41.35 is where we got to on west texas today. last time that happened we were a mess. >> no question. and you're beginning to hear more and more traders talking about the chances of breaking $40 and maybe getting a three-number on it. production is out there. iran is talking about ramping up. they're sitting with tankers full of stuff that they were pumping even while they were under the sanctions not very clean stuff, but they can find a buyer. we're going to find supply is going to stay there'ven as prices fall. >> you worry about retesting wednesday? >> probably not today but yes, i feel concerned somewhat about it. i think as we said off camera, sara's favorite area, the currency market, the emerging currencies are in total disarray. malaysian currency looks like it's 1998 all over again. you have the turkish lira beginning to fall apart, so you've got currency problems, geo political problems, and i see that the futures guys are discounting a september move by the fed but i find it hard to believe. >> how much do u.s. market investors need to worry about this. given all the swings and the surprises over the currency, we're heading for a positive week on the dow, right, by 30 points, it could be higher. do you need to tune out the noise or is there really cause for concern in an emerging market in. >> i think you don't want to get too em meshed. a lot of people misunderstood what the chinese did. people saw it as panicking response to the 8-point drop in exports. it was less that. it was more calculated. this is part of their drive to get themselves into the imf approval for reserve currency. so it's there. but the only thing i would say is it shows a kind of frail condition the markets are in and that they can react ready. >> not to mention we're at the end of august now. a lot of people on vacation. impacts at all? >> i think traditionally, i would tell you that friday is the best day of the week. recently, however r that hasn't been the case. it's been pointed out that of the last 12 fridays, 10 have been down. that's highly unusual. shows a nervousness. you don't want to carry too much risk into the weekend. >> people want to know if you're going to marinade ice cubes. >> they don't have a shot. >> have a good weekend. art cashin, there's the opening bell and the s&p at the bottom of your screen. the new york department of transportation celebrating. and global blood therapeutics celebrating their recent ipo. we've talked about some of the macro numbers. it's the biggest beat on ip relative to expectations on the year. >> good sign for manufacturing and every single data point gets read into as does the fed move or not. it looks like a lot of the industry groups here are opening in the green. one we've been watching carefully are financials. that's followed the move higher or lower in interest rates in the ten-year yield. we'll be watching that. looks like it's opening in the green. a little waumer relative to earlier in the week. >> retail has been the story of the week as it will be next week. nordstrom is the biggest gainer. up 5%. jwn comes in. they raise for the full year. revenues ahead. the stock remains expensive. comps up 4.1 for jcp. good performance on jewelry. >> and sephora. >> revisiting of the ron johnson era. the following q 2, down 12. they finally got a balance, but they're nowhere near cleaning up the mess he left behind. >> when you talk about the base that they started with, hard to imagine they'll get, how long it will take for them to get back to what that number was. but a number that matters is $0.59 in the stock up. they have a lot of employees. a company with a larger market cap and that did something we don't see often, tesla pricing the secondary at $242 a share. increased from 2.1 million to 2.7 million shares and the stock is up. and up rather nicely. again, that is not something you often see. pricing a secondary, well, then they get the nice pop without really suffering at all in the stock price. using that money, of course, to continue to fund their growth initiatives, if you will, being able to raise money in the equity markets a key for that company as it continues to lose money on a basis that matters. we can adjust all we want. >> jim said yesterday, masterful job of executing this thing. others retort that compared to their cash burn, it's not going to last very long. it's maybe a quarter or two of cash burn if i'm not mistaken. >> they raised 640 plus million def never hurts. they'll move on their different initiatives. making a lot of cars. >> one stock i'm watching at the open is makilioloko. traffic was down. first time we've seen a traffic decline since the company went public. 3.9% fall in traffic for company-owned strunts. they blamed higher menu items prices, but as you can see investors aren't buying it. they're down about 19%. this one has been battered. before yesterday it was already down 20% since that hot ipo. that's been a theme we've been seeing. these spectacular ipos having trouble reaching the expectations. >> now down 50%. not that the comps are down. they were up 1.3 but people were looking for 3.2. that's a story of the man versus the boys in terms of the recent new issues. >> and they said full-year sales would come in the lower range. that's disappointing. >> you have to go back to early 2014 to see a price this low, below $17 as they immediate with $0.33 but they guide lower for the full year. it's been a miserable week for the semi space. pc sales remain weak. i'm not sure how many people were expecting good things from app? >> they didn't disappoint in terms of not delivering good news. overall the chips in general. i am looking at micron up today but that stock has been taking it very hard. you look at some of the big holders, we're going to get 13 s, i think today, we're starting to get them already. it'll be interesting to see some of the hedge funds who own the names, whether it's a micron or apple even, sun edison, i'm thinking of one hedge fund in particular i'll let our viewers guess. >> another earnings mover i'm going to watch is king digital. a disappointing quarter. monthly unique users fell. the bottom line is this company is having trouble getting away from its large heavy dependence on one game and that's candy crush. gross bookings is an indicator. it fell 13%. that stock down 12% here at the open. >> some of the cable companies weakness remains. we have comcast down. looking at the number of cord cutters in q 2 whether it's cable or satellite, 600,000 plus. >> there's no doubt, although, the cable company should rename themselves broad band providers. that's the higher margin business, and the overall customer connections wasn't a bad quarter but to your point, comcast got hurt last week because it hurts cable networks like our very own and other things in that area and for whatever reasons, investors chose to focus in part on that and the overall effect of cord cutting. the more connections you have, the better, to extent people are getting rid of video or slipping it down. that's not necessarily a good thing. time warner table, the deal still moves ahead at this point as well. but all the stocks are down this morning. >> sesame street has to be the biggest story of the week in that space. >> you think so? >> they don't want to see any characters killed off. like game of thrones. >> with that, the dow is up about 12. let's get to bob on the floor. >> reporter: good morning. sort of a mixed open. let's take a look at the sectors here. we have a little bit of modest strength in energy and materials. financials, health care, technology, but this is all pretty modest at this point. energy is really the big mover here. and that's certainly been very volatile for the last several months. i think europe is more interesting. kind of disappointing on gdp. we're expecting an acceleration in the economies there. germany was a little below expectations. italy was below. france was flat on the gdp. i don't know what happened there. and they're down today. but i think we should just take a quick look at how the global markets did this week. for all the flak that china took for devaluing their currency, it looks like they won, at least on a short-term basis. not only is it going to be easier to take business away from other countries outside their borders but they won on the stock market. it's just a week but shanghai is the only thing up. germany, brazil and the s&p is basically flat. by the score card, china came out ahead this week. in the u.s., earnings are winding down on the retailers but big sigh of relief on in order storms. a lot of worry about them going into the earnings, and they showed a simple fact. retail is not uniformly weak. maybe macy's and the other ones are but not only did they beat. same-store sales were terrific. comparable store sales 4.9%. that's a great number and they'll do something close to that for the rest of the year. the argument against nordstrom that's been around for a while. it's expensive. it's more than anybody out on the street right now forward earnings, but they deserve it. they're the only guys with revenue growth. macy's, no revenue growth. nordstrom, all the years. every single year, they keep growing their revenues. they're the only ones. nobody gets this kind of top line revenue growth overall, and that's why generally nordstroms is more expensive and the price is a little more stable. look at them compared to everybody else. seres doesn't have any revenue growth. di di the others don't. the key take away about nordstroms and a big sigh of relief. the ongoing strength of nordstrom's comps suggestions the environment is not as uniformly weak as one might have thought. some are arguing they shouldn't be considered just a department store. it should be considered a specialty retailer. some people are saying look at lb and tjx, and they traded 20 types forward earnings. the only comment i have on jcpenny is they didn't have as much of a loss as expected but still, five years of negative growth, four to five comp sales growth. not bad, but still down dramatically, and the only good thing i think you can see is at least the stock has stabilized and sales appear to have stabilized. right now is dow is flat. >> thank you very much, bob. we take you to a live shot of havana with the secretary of state is arriving. they're going to raise the flag at the u.s. embassy in about the next five to 20 minutes or so. first u.s. secretary of state to visit the country since 1945 and the first time our flag has flown there since 1961. we'll bring you more with michelle in just a moment as he makes his way to the embassy which has been called the u.s. interest section. it hasn't been called the embassy and a lot of discussion about who has been invited and how you support people invited and those not invited. a remarkable historic moment. >> and kerri did a bunch of interviews. no he talked to a few networks. he says human rights is at the top of the agenda when it comes to direct engagement in cuba, responding to some of the critici criticism. this is largely symbolic. >> we'll bring you that in a moment. let's get to the bond pits quick. rick santelli is with us this morning. good morning, rick. >> reporter: good morning. you pretty much nailed it. ppi was a bit hotter. whether it's hot by historic standards doesn't matter. the room was cold. it's getting warmer with regard to pricing and that isn't all the pricing issues traders are looking at. they continue to look at another financial asset, the stock market. it was all about a two-year. it popped. look at that intraday chart. right back into 73ville. look at a four-year chart. any close above the 74 area are rather significant. everyone is talking about the fed. now, if we look at a two of day of the european version of our note, this gets fascinating. it's trading around minus 27 basis points. that's after it moved up from more negative yields. 73 and 27, the absolute value difference is 100-basis points. and i can't tell you how much talk that is garnering. you could also see a big pop there. we want to keep a close eye on this. the twitt30-year continues to h its settlement and all the auctions are on the downside and. two of day chart is better than a one-day. it popped a bit on the data but in the context of yesterday, bringing you back in line in the one-year chart in the dollar index looks a little iffy. carl, david? sara? >> all of us. thank you, rick. oil is the story of the morning as we came off of 41 and change. jackie is with us. >> reporter: good morning. we're seeing a little bit of a rebound after we tested the low of $41.35. we haven't seen that level since march of 2009. testing that low was very significant. we are going to get data today. rig counts out at 1:00. we've been adding rigs so it'll be interesting to see what happens this week. yesterday's volume really shot up at the close and traders said that's a sign that we see more people getting into the market as we head into the close. on a friday, that could be particularly pronounced. i also want to mention the fact that there's an unanticipated refinery shut down in indiana. bp refinery that. that's caused prices to spike for consumers overnight. anywhere from 20 to almost $0.40 in some cases. while that is a specific issue we're watching and probably will take about a month or so to resolve. we're looking at gas prices in other parts of the country continuing to decline. if it doesn't get skewed by what we're seeing in the midwest. >> folks in chicago, it's going to be a wakeup call when they head out today. >> when we come back, keeping an eye on the markets. the dow relatively mild. up 12 and, of course, we'll take you back to cuba where the secretary of state will raise the american flag at the u.s. embassy in havana. you are looking at two airplane fuel gauges. can you spot the difference? no? you can't see that? alright, let's take a look. the one on the right just used 1% less fuel than the one on the left. now, to an airline, a 1% difference could save enough fuel to power hundreds of flights around the world. hey, look at that. pyramids. so you see, two things that are exactly the same have never been more different. ge software. get connected. get insights. get optimized. i've got two reasons to take that's why i take meta. meta is clinically proven to help lower cholesterol. try meta today. and for a tasty heart healthy snack, try a meta health bar. no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great. >> we are awaiting comments from the secretary of state who is in cuba this morning to reopen the u.s. embassy. that is where we find michelle there outside the ceremony. good, official. >> reporter: yes. u.s. secretary of state is in the building. he has arrived. i'm going to step out of the shot so you can see what's going on on the ground. it's been busy all morning. a crowd has assembled. a lot of them are using em brel -- umbrellas. the sun is brutal. i'm sure it's hot. we've been listening to the u.s. navy brass band alternating tunes. they appropriately played earlier on "it's a grand old flag". the flag is going to go up. we expect roughly 15 minutes into the ceremony. we saw the international press core that has been traveling with kerry arrived. we know three marines who lowered the flag back in 1961 will raise it again in an interview they did, they said they thought they would come back but they didn't think it would take this long. the building has always been for the last 60 plus years. it's designed by the same team that designed the lincoln center. considered a modernist building. it stands out in this city that's filled with colonial buildings ads well. john kerry has a full schedule. we'll have full coverage you throughout the day. >> michelle, obviously it's been widely covered here in the states this morning. some reports indicate that some of the people who were invited to attend the ceremony are those that have fought for this to happen again and again over the years. any clarity on that? >> reporter: oh, people have who have fought to get diplomatic relations restored? absolutely. for sure, yes. all the groups that have been lobbying for a long time, whether they're political or business groups, for sure. we haven't seen a public list but i have spoken with individuals who tell me that they have been invited whether it's groups like cuba now, et cetera, and others, there's a group that helps people start businesses here. there's a lot of them, some who have not been permitted to attend but for given three-day visas only for this occasion. >> we'll see you in a few minutes. what a day in havana. we're awaiting the comments from the secretary of state and the flag raising ceremony in cuba. we'll take you there in a moment. ♪ no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great. >> john kerry speaking at the u.s. embassy in cuba. it is reopening for the first time in over 50 years. same marines who took the flag down in '61 are symbolically going to raise the flag again. you can see the crowds. we are covering it and we'll take it live as soon as he begins to address the crowd. >> alibaba's executive chairman might have just bought the world's second most expensive home. jack ma paid $1.5 billimillion home. the home said to have a 20,000 square foot garden and views of victoria harbor. jack ma joined us last year and told us how he spends his fortu fortune. >> people who say, well, jack, please, rich people it's good. it is, but not that richest man of the world of china. it's a great pain. because when you have the richest, everybody is surrounding you for money. you have to spend it. and you can't spend it and buy 11 houses. you want to spend the money in an effective way. >> i do. >> did he change his mind? >> i don't think so. i think he believes that, but he's stretching out a little bit in terms of his real estate, at least. of course, also bought an enormous amount of property in adirondacks not that long august that i believe he's going to be keeping. >> several square miles, if i'm not mistaken. >> thousands and thousands of acres. but $200 million purchase is a pretty big purchase. >> have you ever been to the peak in hong kong? s the tit is the best view in te world. >> he probably wants to diversify his earnings. when we come back, we're still waiting on secretary kerry in havana and the flag raising. we'll get you that live as soon as he begins the speak. dow now up 50 points. back in a minute. do you want to know how hard it can be to breathe with copd? it can feel like this. copd includes chronic bronchitis and emphysema. spiriva is a once-daily inhaled copd maintenance treatment that helps open my airways for a full 24 hours. spiriva helps me breathe easier. spiriva respimat does not replace rescue inhalers for sudden symptoms. tell your doctor if you have kidney problems, glaucoma, trouble urinating, or an enlarged prostate. these may worsen with spiriva respimat. discuss all medicines you take, even eye drops. if your breathing suddenly worsens, your throat or tongue swells, you get hives, vision changes or eye pain or problems passing urine, stop taking spiriva respimat and call your doctor right away. side effects include sore throat, cough, dry mouth and sinus infection. nothing can reverse copd. spiriva helps me breathe better. to learn about spiriva respimat slow-moving mist, ask your doctor or visit spirivarespimat.com ♪a one, a two, a three percent cnext.ack♪ there's gotta be a better way to find the right card. creditcards.com lets you compare hundreds of cards to find the one that's right for you. just search, compare, and apply at creditcards.com. >> welcome back to "squawk on the street." i'm carl quintanilla with sara eisen, david faber at the new york stock exchange. want to start live with a shot of havana, cuba. a ceremony to raise the american flag. the secretary of state is going to speak in a few moments. as soon as that happens, we'll go there live. friday performing well here. dow is up 41 points after all the drama regarding greece and china and oil, the dow is holding onto a gain of about 70 points or so. oil is down around $42.65. we've gotten ppi hot. it's time in the university of michigan. let's go to rick. >> reporter: 92.9. 92.9. that's definitely light of the 93.5 we were expecting, and we're comping last month's final. but this read will be final. 92.9 would be the second lowest read of the year outside of 90.7 that was in may. the high water mark was 98.1. that was january, and that goes all the way back to 2004. carl, sara, back to you. >> thank you, rick. with the dow up about 45 points, let's go back to cuba where we are awaiting comments from john kerry and the flag-raising ceremony. michelle caruso-cabrera is live. >> reporter: we expect the ceremony to start any moment. they've told everyone, if you can see in the crowd, to put down their umbrellas. they've been seating most people. we've seen the former commerce secretary arrive. obviously, it's been talked about whether or not he might take a role in the future. he hasn't said if he will or not but there's a high-ranking group down there sitting with their fans waiting for the ceremony to begin. we know of other cuban americans who have worked hard for the reestablishment of relations who have been invited and are waiting for this to begin. we expect it to last 20 minutes, half an hour. it can't go very long because it's quite hot out. we expect remarks from the secretary of state. there's been nonstop coverage of this since 8:00 this morning on local cuban television. they have anchors out front. you can see them doing their analysis of what's going on here and why. you can see the american cars put out front and positioned perfectly so they'll be behind the secretary of state as he speaks a little bit later on. once again, we expect that to happen any moment now. they've asked the crowd to sit down so they can begin the ceremony. from here on, afterwards there's a meet and greet. he's going to be meeting with the cuban foreign minister again just like he did when the foreign minister was in down in washington d.c. for the opening of the cuban embassy and he'll be meeting with disdents later on. back to you. >> thank you, very much. a beautiful day in cuba. we'll bring everything she said to you live. including the speech and the national anthems will also be played. we'll turn to the markets right now. a turn around today. jcpenny and nordstrom beating analysts expectations. others reporting this week struggled with their reports. for more on all things retail, where you should be buying, we have a senior retail analyst. i know you cover nordstrom. certainly a stand out in a lackluster earnings period for retail. >> what's showing up is if you put exciting product into your stores and online, if you allow the customer to shop how they want, they come and shop, and that's what we're seeing at nordstrom. it's a result of strategic ni initiatives and new brands. >> the result of spending a lot. they have spent a lot on the e-commer e-commerce, and spending in the right places. and i guess that's starting to pay off. >> yes. obviously we'll see the vancouver flag ship open next month. that's going to be a big one. they have more stores opening ex-year, but that's the investments are starting to pay off, and it's bringing in customers and raising the top line. >> we want to take a moment here. the american flag has come out in havana. i think we're going to listen in and listen as this happens. this historic day in havana, cuba. >> the moj imagine usty of the moment is creeping in on us. >> we'll come back when we hear from the secretary. koo we'll continue with dorothy here. is it expensive or can you still get in on the growth story? >> we have a price target of 88. there's a lot going on but as we move into 2016, we'll see investments start to taper off and you'll see bigger results from canada and the strategic initiatives. you have the online business growing, the rack business is continuing to grow. i think it's definitely not too late for investors to benefit. >> i guess the question overall, you don't cover jcpenny but with 4% comparable sales. in a quarter where macy's went negative and it is considered best in class, what's the take away? is it a specific story? >> i don't cover pennies or macy's. jcpennys is a turn around story. macy's are trying to do a lot of things that nordstrom is in the process of doing. i think they're playing catchup. nordstrom is in front. the multichannel customer spends three to four times with a single channel customer spends, and i think that's why we're seeing nordstrom winning. >> do you buy macy's argument that tourism is drying things up? >> certainly they've got a big tourist destination with their new york store, and obviously, nordstrom doesn't have that. they have tourist business on the west coast. that's part of the argument but nordstrom is a full price business. macy's is promotional. it's going to be a struggle, i think, to move from being promotional to being less promotional and then opening off price businesses on the side. >> there's a piece in the times and "the washington post" about how the nature of what we buy as gifts has changed and what we buy or ourselves. we're not buying things. we're buying experiences. does that change the way you model these companys? >> i think what's changed the way we model them is we have to consider that the traffic in the stores is not necessarily as important as the overall traffic. but i think it's also a little bit of an excuse. if you put exciting product in a store, retailers like nordstroms show that customers come. and i think that's really what we're seeing is winners and losers and nordstrom, clearly, is a winner. >> all right. thank you very much for weighing in. especially on nordstrom having a great quarter. up next on the show, new york times columnist joins in why google, now alphabet is now becoming the thermos of the internet. and we're waiting for secretary kerry who will be making remarks in cuba from the opening of the u.s. embassy in cuba. t your jans permission to park it wherever you please. hey. that's that new gear feeling. this week, filler paper and folders just one cent. office depot officemax. gear up for school. gear up for great. feduring sleep train's sundaytriple choice sale. to save big for a limited time, you can choose up to 48 months interest-free financing on a huge selection of tempur-pedic models. or choose to save hundreds on simmons beautyrest mattress sets. you can even choose $300 in free gifts with sleep train's most popular stearns & foster mattresses. the triple choice sale ends sunday at sleep train. ♪ sleep train your ticket to a better night's sleep ♪ >> a live shot of havana where the flag of the united states is going up for the first time since 1961 and then we'll await the secretary of state's comments. we'll bring you there when it happens. in the meantime, as of this week, google transforming into alphabet and our next guest says google is heading toward genericization. we have jim stewart with us. did i get that right? >> it's ja networkization. >> it's the process by which a trademark brand name enters the language and becomes generic, and i didn't realize this. one of the odd things about english and american law is if your brand is so successful it actually hops over and becomes a generic part of the language, you lose the brand and the trade marc. anybody can use it. it's happened to a lot of words. even websters is generic for dictionaries. everyone can put one out. google has this problem. i assume we all use it. i use it as a verb, a noun, a participle, and that raises the threat that it's going to lose the trademark protection at some point maybe not in the too d distant future. changing to alphabet changes that in the future. >> you have pictures here of band-aid, xerox. >> those are clinging to protection but they're almost 100% of the year. some of the others have lost it. >> jell-o? >> jell-o is still branded. >> okay. >> do you know that dry ice was once a brand name. it's now completely generic. there's a whole string of them that over the years have moved into the mainstream language. >> is that worth tens and billions in market cap this week? >> i don't know. one of the funny things looking back at history is google became a regular vocabulary word in the dating context. the earliest reference as not being branded google is where people would go on a date and meet somebody and they'd immediately go home and google them to find out their net worth, do they have a prison record. that, it first showed up on tv on an episode of "buffy the vampire slayer" her friend wanted to know if she googled some guy. that was the first. even in other languages, the french have a word called, i'll mispronounce it, it means american digital imperialism. that is not necessarily a positive association. i don't think they're going to turn the word alphabet against google. >> what about the transaction itself? given the genericization as a threat but isolating the growth initiatives that are eating up the business. >> it was also amusing that larry page when he said they chose alphabet, they focussed on alpha and bet. a lot of google investors didn't know larry page knew the word alpha let alone cared about it. that was a great message to say yeah, we understand the stock market and we want to keep outperforms. that was a good message. but let's face it. it's kind of like a stock split. i was surprised the stock went up as much as it did. it really, it's the same collection of assets. they're moving around a little bit. it's a nice idea they're going to liberate some of these other brands and at the same time, by putting more transparency on the google brand, there's inherent discipline to not siphoning off the profits. i see the hand of ruth porat there again. delivering something that wall street has long wanted which is more transparency. the next thing, they'll be breaking out youtube. >> as an investor, would you buy it as a cash machine from the core business or the moon shot machine from all the other businesses? >> i -- look, i think it's like a call option, these other things. i would buy it for the main line business. it's doing great. the margins are doing better. there's growth potential. search's concept is so powerful. i have yet to be convinced that other things are an obvious home run. they're not an uber, in my view. we'll see. it's a nice thing to have out there. at least they're trying. they're trying to avoid the future of, say, a microsoft. which doesn't reinvent something new. >> jim, stay with us, if you would, of the new york times. as we watch this historic moment, we go live to michelle caruso-cabrera in ha navana as await the secretary of state. >> we've been listening to your conversation about google. one of the intentions the white house has made very clear is that they would like more freedom of expression here. they would like more telecom equipment here so there can be more use of the internet here. it's one of the least connected countries in the world. there's actually when jim was talking about american digital imperiali imperialism, there's a phrase here, how do you say, got to google that in cuban they use the same verb we do, and we know google has made big efforts to try to expand internet here. but we've heard from members of the government that maybe they're not that interested. we understand that they are about to begin the national anthem here at the u.s. embassy in cuba. or at least the ceremony. ♪ ♪ ♪ ♪ [ applause ] >> thank you, richard blanco, for such inspirational marks. it's now my great honor to introduce the secretary of state of the united states, john kerry. [ applause ] >> please be seated, everybody. thank you very, very much. i'm no sorry that we are a little bit late today. but what a beautiful ride in and how wonderful to be here. and i thank you for leaving my future transportation out here in back of me. i love it. distinguished members of the cuban delegation, thank you for your leadership and for all your work of your delegation. exlen sis from the diplomatic core. my colleagues from washington, past and present. all the embassy staff, and friends watching around the world, thank you for joining us at this truly historic moment as we prepare to raise the united states flag here at our embassy in havana, symbolizing the reestablishment of diplomatic relations after 54 years. this is also the first time that a united states secretary of state has been to cuba since 1945. this morning i feel very much at home here, and i'm grateful to those who have come to share in this ceremony who are standing around outside of our facilities, and i feel at home here because this is truly a memorable occasion. a day for pushing aside old barriers and exploring new possibilities. and it is in that spirit that i say on behalf of my country, [ speaking foreign language ] [ speaking foreign language ] [ speaking foreign language ] my friends, we are gathered here today because our leaders, the presidents, made a courageous decision to stop being the prisoners of history and to focus on the opportunities of today and tomorrow. this doesn't mean that we should or will forget the past. how could we, after all? at least from my generation, the images are indelible. in 1954, fa dell castro came to the united states and was greeted by crowds. returning it was embraced. in 1961, the bay of pigs tragedy unfolded with president kennedy accepting responsibility. in october of 1962, the missile crisis arose 13 days that pushed us to the threshold of nuclear war. i was a student then. and can i still remember the faces of our leaders, the grim map showing the movement of opposing ships, the approaching deadline, and that peculiar word, quarantine. we were unsettled and uncertain about the future. because we didn't know when closing our eyes at night what we would find when we woke up. in that frozen environment, d diplomatic ties between washington and this city were strained then stretched thin, then severed. in late 1960s, the u.s. ambassador left havana. then they demanded the cut in the size of our diplomatic mission, and the president decided he had no choice but to shut the embassy down. most of the u.s. staff departed quickly. but a kwu stfew stayed behind t the keys over to our swiss colleagues who would serve diligently and honorably for years. we are grateful for their service and help. among these remaining at the embassy were three marine guards, larry morris, mike east and jim tracy. as they stepped outside, they were confronted by a large crowd. tensions were high. no one felt safe. but the marines had a mission to accomplish. and slowly the crowd just parted in front of them as they made their way to the flag pole, lowered old glory, folded it and returned to the building. larry, mike and jim did their jobs but they made a bold promise, that one day they would return to havana and raise the flag again. [ applause ] . >> at the time, no one could have imagined how distant that day would be. for more than half a century, u.s. cuban relations have been suspended in the amber of cold war politics. in the interim, a whole generation of americans and cubans have grown up and grown old. the united states has had ten new presidents. the berlin wall is a fading memory. freed from soviet shackles, central europe is home to thriving democracy and last week i was in hanoi to mark the normalization of relations between the united states and vietnam. think about that. a long and terrible war that inflicted indelible scars on body and mind followed by two decades of mutual healing followed by another two decades of diplomatic and commercial engagement. in this period, vietnam evolved from a country torn apart by violence into a dynamic society with one of the world's fastest growing economies. and all that time through reconciliation, through normalization, cuban/american relations remained locked in the past. meanwhile, new technologies enabled people everywhere to benefit from shared projects across stretches of ocean and land. it doesn't take a gps to realize that us strangement that the united states and u.s. and cuba were traveling wasn't the right one and that the time has come for us to move in a more promising direction. in the united states, that means recognizing that u.s. policy is not the anvil on which cuba's future will be forged. decades of good intentions aside, it would be equally unrealistic to expect normalizing relations to have in a short-term, a transformational impact. after all, cuba's future is forcubans to shape. responsibility for the nature and quality of governance and accountability rests as it should not with any outside entity but solely within the citizens of this country. but the leaders in havana and the cuban people should also note that the united states will always remain a champion of democratic principles and reforms. like many other governments in and outside this hemisphere, we'll continue to urge the cuban government to fulfill its obligations in the u.n., obligations shared by the united states and every other country in the americas. and, indeed, we remain convinced the people of cuba would be best served by genuine democracy, where people can practice their faith with a commitment to economic justice, and it's realized and smugss are answerable and civil services are allowed to flourish. let me be clear. the establishment of the normal diplomatic relations is not something that one government does as a favor to another. it is something that two countries do together when the citizens of both will benefit. and in this case, the reopening of our embassies is important on two levels. people to people and government to government. first, we believe it's helpful for the people of our nations to learn more about each other. to meet each other. that's why we're encouraged that travel from the united states to cuba has already increased since january and is continuing to go up. we are encouraged that more and more u.s. companies are exploring commercial ventures here that would create opportunities for cuba's own rising number of entrepreneurs and we're encouraged that u.s. firms are interested in helping cuba expand its telecommunications and internet links and that the government here recently pledged to create dozens of new and more affordable wifi hot spots. we also want to acknowledge the special role that the cuban american is playing in establishing a new relationship between our countries. and. we had with us this morning, renti representatives from that community, some of them were born here and others were born in the united states. with their strong ties of culture and family, they can contribute much to the spirit of bilateral cooperation and progress that we are seeking to create. just as they have contributed much to their communities in their adopted land. the restoration of diplomatic ties will also make it easier for our governments to engage. after all, we are neighbors. and neighbors will always have much to discuss in such areas as civil aviation, migration policy, disaster preparedness, protecting marine environment, global climate change and other tougher and more complex issues. having normal relations makes it easier for us to talk. and talk can deepen understanding even when we know full well we will not see eye to eye on everything. we are all aware that notwithstanding president obama's new policy, the overall u.s. embargo on trade with cuba remains in place and can only be lifted by congressional action. a step that we strongly favor. for now -- [ applause ] >> for you now, the president has taken steps to ease restrictions on exports and imports to help private entrepreneurs but we want to go further. the goal of all of these changes is to help cubans connect to the world. and to improve their lives. and just as we are doing our part, we urge the cuban government to make it less difficult for their citizens to start businesses, to engage in trade, access information online. the embargo has always been something of a two-way street. both sides need to remove restrictions that have been holding cubans back. before closing, i want to sincerely thank leaders throughout the americas who have long-urged the united states and cuba to restore normal ties. i thank the holy father, pope francis, and the vatican for supporting the start of a new chapter in relations between our countries. and i think it is not accidental that the holy father will come here and then to washington in the united states at this moment. i applaud president obama and president castro both for having the courage to bring us together in the face of considerable opposition. i am grateful to assist in secretary of state robert a jacob ston, and the extraordinary staff for all the hard work that has led up to this day. and i just say to our wonderful embassy staff, if you think you've been busy these past months, hold onto your seat belts. but above all, above all, i want to pay tribute to the people of cuba and to the cuban american community in the united states. it was once said that everything that divides men is a sin against humanity. clearly the events of the past, the harsh words, the provocative and retall teiatory action as diminished our common humanity. there have been too many decades of suspicion and fear. that is why i am heartened by the many on both sides of the straits who whether because of family ties or a simple desire to replace anger with something more productive have endorsed this search for a better path. we have begun to move down that path without any ill lusions abt how difficult it may be but we are each confident in our intentions. confident in the contacts we've made, and we are certain the time is now to reach out to one another as two peoples who are no longer enemyinies or rivals neighbors. time to unfurl our flag, raise them up and let the world know that we wish each other well. [ speaking foreign language ] [ speaking foreign language ] it is with that healing mission in mind that i turn now to larry morris, jim tracy, and mike east. 54 years ago you gentleman promised to return to havana and hoist the flag over the united states embassy that you lowered on that january day long ago. today i invite you on behalf of president obama and the american people to fulfill that pledge by presenting the stars and stripes to be raised by members of our current military detachment. larry, jim, and mike, this is your cue to deliver on words that would make any diplomat proud. just as they would any member of the united states marine corps. promise made, promise kept. thank you. >> ladies and gentlemen, please rise for the raising of the flag and the national anthem of the united states. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ [ applause ] >> the u.s. flag flying in havanas for first time since 1961 as john kerry says the u.s. and canada need to stop, in his words, being prisoners of history, that we've been suspended in the amber of cold war politics. michelle caruso-cabrera, it could create new and more dynamic economies. >> reporter: yes, we know the secretary of state's speech was broadcast across cuba. we spoke of democracy in a country where they haven't been able to elect someone new since 1959. let's see if that brings change. the other change that would be welcome by the american business community but we don't see many signs of yet is with there be any change of the economy. he referenced that as well. will things be introduced here that have been introduced in vietnam more than we've seen here. but an incredible moment here. we heard cheers from the crowd. we didn't hear any negative chants. we assume it's fairly controlled who has been allowed to be here. but we heard chants of usa, people waving the american flag, a positive response. thus far, allowing the broadcast, allowing the people here, suggestions a positive response at this point. we know there are people watching in the united states who watched with mixed emotions who think this was a mistake to do that, that already still concerns about human rights. that if only the diplomatic relations were not extended, that perhaps the country or at least the regime was on the breaking point because they've lost support from venezuela that's been providing them oil and monetary support as well here in this country. and would there be even more change if we hadn't done that. we're not going to know that at this point. but that's the debate that's occurring among cuban exiles in the united states. >> thank you. we want to get thoughts from june stewajim stuart as we see the u.s. flag flying. >> from an economic perspective, this is overdue. we've seen from the cuban american people here, how entrepreneurial they can be. this is a win/win for both sides. one thing we've learned is that an impoverished and isolated country becomes a desperate country. and when countries are de desperate, they do things that threaten the united states. why leave this out there? bring this into the fold of the community of nations, particularly since they're so close to the united states? >> certainly has parallels to other discussions we're having that countries we're trying to bring out of isolation, if you catch any drift there. they only announced the end of the freeze in december. it's moved quickly. >> and i wonder how fast trade is going to presume. whether the trade embargo can be removed. i've been reading americans have been flocking down there and looking for business communities and i'm sure cubans are sensing a new era on the horizohorizon. >> that's up to congress, though. >> when we come back, keeping our eye on the markets and crude 4 2.65. is this the bottom in we'll talk about that in a moment. 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? could crude oil head into the mid 30s? that's shocking call when technical analyst makes. more "squawk on the street" straight ahead. when a moment spontaneously turns romantic, why pause to take a pill? and why stop what you're doing to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use. insurance coverage has expanded nationally and you may now be covered. contact your health plan for the latest information. stocks are calmer right now. closing out what has been a volatile week for trade. the dow is up 13 points. s&p flat. best performer is nordstrom. the price of oil bouncing back when it hit a six and a half year low. crude oil currently trading in the u.s. at $52.03. earlier this morning we hit $42.45. a level we haven't seen since the depths of the financial crisis. i dipped as low as $41.04 in 0 2200 9. >> i don't think today it will happen. the catalyst could be the lrig count at 2:1:00. it will confound everyone that they continue to put new holes in the ground in attempts to sell oil at whatever price they can get. >> the flut coming from u.s. production and the middle east and iran, where does the price bottom, do you think? >> i think something has to give at some point. and i think we'll be in the process of seeing, i think, the real destruction here in the september/october time frame when our u.s. refiners go into seasonal maintenance and they retool to get a different type of gas and emphasize heating and diesel fuels. that will cause a backup which should crush the price down to about $32 a barrel. from there we'll see u.s. production decline. if we see it get below 9 million barrels, i would expect the saudis to declare victory and throw in with a cut of their own. that's what we have to watch for. >> but, john, you seem to express surprise that we're producing as much as we are still. i wonder what's going to turn it, then? and are you surprised, in fact, that we haven't already seen that turn you're describing? >> i am, i've been really surprised by the ability of the industry to fend the cost curve and reduce costs and how the entire supply incremental announcement, we've gone down about 150,000 barrels in the past couple of weeks. in that continues, then i think you could potentially argue for a bottom. plus i do think there's going to be some discussion in the sector in the third and fourth quarter that will also take capacity offline. >> interestingly enough, the best performing s&p group for the week is energy. up 3%. even though it seems to be struggling here with pressure on crude oil prices, settle a situation where you could see crude oil fall lower but bottom has been put in on some of the energy stocks. i think that could be the case, obviously stocks are forward-looking to a degree. if there's increasing hope for 2016 based upon the cut-backs we've seen from the shale producers that would allow the oil majors in particular to cash in on their high levels of production and their cheap costs. i think part of the big bright spot has been the refiners, they're killing it-day think that's going to be a problem going forward. because there's a growing glut of diesel fuel and that's going to be part of why price i stay lower overall. >> john kilduff, as we look at wti, 42.51. let's go to chicago and the cme group with the santelli exchange. >> my buddy is here, jim bianco, let's start at the top. when i look at what's going on with the employment data that we had last week. i had professor quinn mills on and we posed the question, where's all the variance gone with regard to the numbers. it wasn't that many years ago, month-to-month the headline numbers would be all over the place. now steady as a rock, hitting expectations, explain. >> i think there's two things, first of all, the variance is in the not seasonally adjusted data. you see it moving up and down. when they're done with the seasonal adjustments, it's all gone and the variance on the seasonally adjusted baszs is near a 20-year low. why is that? let me pose an idea. in 2011, the bols, burg of labor statistics was trying to save money. they redesigned the survey of 60,000. >> the household survey. >> and the establishment survey. now the survey is sent to everybody with the instructions to fill it out. instead of them reaching out to you to ask you to fill out the survey. send it out, waiting for to you come back to them. >> that produces a positive bias, who's going to take the time to go through the survey. somebody's got good news, you don't take the time to fill it out to tell them your company is struggling. >> did creates a distortion. >> we've seen it with the variance and the seasonality and a lot of things are different with the survey. >> we've had ppi. arguably there was heat in various areas, you were talking about things regarding inflation i found fascinating. >> i think a lot of it is in the rents going up. and people are looking at higher rents. now that's something that happens, infrequently. but when your rent goes up. it's hundreds of dollars extra you have to pay. maybe it's only once every two years. >> they're very careful how they craft the metrics to show us what they believe is a true inflation rate. and things that happen to us infrequently, sending our kids to college, big purchases, since they're infrequent, they kind of smooth them out. but in the end, you could pay a 10-year price for some of these things. >> you might have a 7-year-old or 8-year-old kid and the inflation rate for college tu significance going up. that can be another 10 or $15,000 by the time you get there. so the stuff does matter over time. >> the last point i want to make is when we consider the two-year note yields being so negative in europe and our two-year note in the inflation data popping up into the low 70s, there's speculation about the absolute value of the 100-basis-point difference. >> europe is in the middle of qe, they've got .3 on their growth rate. the u.s. is talking about raising growth rates, we're at 3%, much different in the economic cycle. much different in the monetary cycle. we're getting ready to raise rates and it's being affected in the wide spreads. >> thanks, jim bianco. everybody out there, take good notes, you'll want to reread this or go to cnbc.com. sara eisen back to you. >> have a good weekend. watching shares of jcpenney, the stock is up 8.7% after the company surprised the street with second quarter results, our courtney reagan just got off the phone with the company's brand-new ceo and joins us with more on a good quarter. >> good morning, sara. i got off the phone with jcpenney ceo marvin elson. he took over on august 1. the company did turn in better-than-expected revenue and sales and a smaller-than-expected loss in the third quarter. he's working towards goals, increasing private brand performance, e-commerce experience, as well as increasing revenue per customer. ellison tells me there was about a 50 basis-point sales impact in the second quarter from the shift in tax-free holidays into august from july. particularly in the southeast. he acknowledges the broader conversation as well in retail, about the shift in consumer spending, away from typical goods sold at jcpenney. he thinks enhancing omni channel strategies are the key to capturing more sales. ellison acknowledges jcpenney is behind the curve in this area and he tells me the company has never had a true e-commerce expert to help with that until last week. ellison said he wanted to bring in someone that would make an exponential improvement to the platforms over the next 12 months. that's their timeframe to fix the issues in what he calls clunkiness. lastly we talked about jcpenney's salon strategy. as of now the retailer has put capital improvements in 12 salons in the country, part of a private program. all of the salons will be rebranded in 2016 with the preannounced partnership to instyle salons. right now ellison is monitoring changes in revenue and traffic flow. back to you. courtney reagan. coming up, we could see a new twitter ceo a little sooner than thought. kara swisher weighs in on "squawk alley" coming up. we talked to our doctors about treatment with xarelto®. xarelto® is proven to treat and help reduce the risk of dvt and pe blood clots. xarelto® has also been proven to reduce the risk of stroke in people with afib, not caused by a heart valve problem. for people with afib currently well managed on warfarin, there is limited information on how xarelto® and warfarin compare in reducing the risk of stroke. i tried warfarin before, but the blood testing routine and dietary restrictions had me off my game. not this time. not with xarelto®. i'll have another arnold palmer. make mine a kevin nealon. really, brian? hey, safety first. like all blood thinners, don't stop taking xarelto® without talking to your doctor, as this may increase your risk of a blood clot or stroke. while taking, you may bruise more easily and it may take longer for bleeding to stop. xarelto® may increase your risk of bleeding if you take certain medicines. xarelto® can cause serious, and in rare cases, fatal bleeding. get help right away for unexpected bleeding, unusual bruising, or tingling. if you have had spinal anesthesia while on xarelto®, watch for back pain or any nerve or muscle related signs or symptoms. do not take xarelto® if you have an artificial heart valve or abnormal bleeding. tell your doctor before all planned medical or dental procedures. before starting xarelto®, tell your doctor about any kidney, liver, or bleeding problems. xarelto® has been prescribed more than 11 million times in the u.s. and that number's growing. like your guys' scores. with xarelto® there is no regular blood monitoring, and no known dietary restrictions. treatment with xarelto® was the right move for us. ask your doctor about xarelto®. good morning, it's 11:00 a.m. on an historic day in havana, koourks it's 11:00 a.m. on wall street and "squawk alley" is live. ♪ ♪ happy friday morning, welcome to "squawk alley," kara swisher, co-executive editor at re/code and jon fortt and kayla tausche, on a day where markets are settling back close to the lows of the session. the dollar is a little higher. first up, apple will delay it's live tv service until at least 2016. bloomberg saying the company wanted to introduce it this year, but talks with licensing companies are moving

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