Chan change, which is why you have to stay with us europe has been open for some time yesterday after ours moved lower on sunday. There you see, italy is the best performer this morning the 10yr note have been hanging around 278 and there is wti and brent is trading as it does a bit above that lets get to our road map this morning, we are going to help you make sense of what suddenly becomes these wild swings. Steve wynn is out, he steps down as his role of ceo of wynn resorts. The shares of wynn are up. Disney reports better earnings at the bell yesterday well hear from the ceo, offering screaming apps and particularly the espn app. Futures are lower this morning setting the stage for what would be another volatile ride today for stocks. Recovering half of the losses for monday sell off. The dow traded in a range of 1,000 points on tuesday. It was up 500 points and down 500 points chris will keep talking about points percentage wise, nowhere near what we see in the past jim, people are getting introduced of the idea of volatility do you expect for it to continue or will we start to have some calm no, i have been searching for analogies of what it means i dont know whether on the box or in the bathroom thats pearl jam. And that song is i am sorry no, i am better. You have to step back from getting out of the ring and recognize that closing bells, opening bells, they mean nothing. If you can have an xiv, a product with a billion half dollars, close 41 and down 90 and having this ripple effect. The long volatility, they must have been also what happens is it is been revealed and not an asset claim. You got a lot to buy at least the stock was zero it should have stopped at minus 20 the saving grace is you did not go very much when you see something thats small, it can impact a market that large and do it at 401 then what it says there are other products that can do that. I was listening to a nice man earlier, Rick Santelli, talking about how customers wanted these things i disagree with that they got sold and when i go back to what the sec says about these products when they blessed it, they said you dont have to worry because the market is deep enough it is not deep enough. The product began to be used by Retail Investors and these products have doubled in price over the course of less than a year in many cases moving away from them and dealing with the Broader Market and the s p 500 and whats really more important here, jim, we go through periods of volatility we just forgotten what it was like we had the tronc decline and a lot of good stuff is down 10 or 15 this is a repricing based on Interest Rates but it is also, david, a realization to trump rally. It is not a trump rally. It is an asset class doing much better around the globe and it is readjusting around the globe. Did japan experienced it no. To me is inflation worldwide of stocks and now we are resetting. A lot of companies in the basket is doing well. The basket was do i think well now we discovered there are stocks in the market and some are doing well and the drug companies, those stock have been horrendous utilities have fallen apart and these are all sensitive to rates. Well hear a course of people coming on our air durs ting the course of the world talking about synchronize growth, i love ta one because it reminded me everybody looking at their watch now is the time. But, it is the case, we have growth everywhere and the wage growth is not a bad thing, it is a good possible, unemployment is at lows we have not seen at a long time and businesses are very, very strong. Theyll be wrong in suggesting that knowing whats going to happen is if you keep the market down based on this is like portfolio insurance in 1987 maybe the markets are unnaturally down a huge number of mergers and acquisitions, january, february and march where a lot of buyers, we did not want to buy companies, now we are down a lot. I am look at chipotle and the ceo and theyre spending a lot of money that stock is down 26. When you look at the market value of that stock, someone is going to buy the company and theyre going to say 18 months from now people are not going to remember this. People are mistakenly, this stock is not going down. I am using that as the most painful example. People recognize wow, maybe this is an opportunity why is wynn going up so much the casino licenses will not be taken away you could have their answer now. Now the new ceo is going to pay for it let me read the introduction to that story and then we can talk about it. Steve wynn has stepped down as ceo of allegations of Sexual Misconduct claims which he continued to deny. Wynns board appointed maddock effectively. Do you remember who you lost doing that he lives to be 100 or something. Casino emperors, they tend to live in their 90s. They go long you know what people can say now the company can be bought. Why is it surprising to you that the stock price is up no, would they really be willing to lose their massachusetts license or the liberals wanted them out a lot of people felt maybe they go down with the ship but now look on a non take over basis, i do not want to own wynn without steve wynn jim, i have not had the opportunity to survey who the potential buyers are here. Mccall, it would not affect us here but it would affect china i dont think you can have that kind of consolidations who are the buyers . Any idea they dont have a full mccall he really can put something together i got a return from my email what does it mean he can call i am tryi jim and i are trying to reach you. Hes the last man standing. It is young when you have a mogul, have you seen a mogul it is young. Steve wynn is the company. A lot of the times it is i this and i that i mean the really great coaches in the nfl, coach pederson, do this or do that. It is a signature has anyone had a night with the prc and won . Yes, steve wynn. Hes a tough guy. He just had to step down as ceo of what a well reported story from the wall street journal thats follow load up by more reporting of 7. 5 million of payments and a lot of things that went on for a long time consider that. Steve wynn has stepped down as a result of this and probably more are still to come. I like this matt maddock, hell be seemless. Are you kidding me steve wynn understood casino better and hotels. Have you been with any of those places i went with my dad, my dad says i feel like a king, king for a daddy. Thats what steve wynn does. Does maddock understand that the guy whos a titan. Okay, he no longer runs the company. The stock is up. You believe it is up because of questions of consolidations and alleviating concerns with that said, 70 of the Company Comes from mccall. And mgm does not have enough in mccall now that steve is out, i would like to own this company, i will pay 220. It is certainly possible it is there is a lot of deals, david, you go back to my earlier point, your world will be in place in this volatility the s p 500 is down 1. 75 in the month. Their individual stocks are down huge. We have to focus on that and cannot just be all we cannot all be all focused in the markets. Packers are from austria when i think of the titans. Individual stocks. Yeah. There is no consolidations of the drug stocks. I mean maybe merck should merge. There is a point to be made there. Consolidation have been moving a at a pace and it is slow we vizer has been aggressive it is not that they dont have access to capital. When you have the actual cash in your pocket, you will be likely to spend it as supposed to taking out dead space we know theyre selling consumer pfizer but what will they do . January is the most yu for ric theyre your world. You are world and you are welcome to it. My world. Senator geary played no walls in that. It is your world and we are just living in it. When we return, well have the disneys ceo he was bullish. Look at snap. Wow i got to wrap on snap. Oh, i cannot wait it will blow your mind, you got to stay tuned, david, dont run off now. I was thinking of running off. After Quarterly Results from reporters. Another look at futures here, we got a lot more squawk on the street ve flirom our post 9 when we come back. [ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Disney reported better than expected quarterly earnings, though revenue did come in below a lot than a lot of analysts forecasted them. Disney plans to roll out their espn streaming service here is what bob iger told us about that closing bell. There are a sign that young people coming into multi challenged people are starting to adopt and packages are less expensive fewer channels but mobile friendly thats a good sign espn and other channels are on all of those services and packages that are offered. Of course, this is a key, jim to the future of this company of these direct consumer offerings we talked about and bolstered by the significant fox deal thats in the works right now that more going to help bolster the content direct to consumer offerings, i should say the Entertainment One as opposed to sports 4. 99 prices is what they are going for. I love it i like alternative sports. Will frost taught me of a lot of sports over there. You can watch them and i love watching things on this. I just got the 10. I have not programmed it yet i love programming thats on this right now, it is 4. 99. I mean i am happy to get it. I think bob is on something, personalization of tv on your hand held for instance is very good david, he did talk about espn, it is Getting Better moderation losses and the fox story will make it so we dont talk about espn affiliate fees grew faster than people anticipated. They were a 4 across the board there. Expectations were 3. 2. When the contracts are up 50 of them. Well, it is going to show you a pricing power. Now the Subscription Service is going to have thousands of additional live events and access to more leads and teams and more games is what they are talking about. I love it with that said, it is not going to have espn that you are currently on fantasy football, they can develop programs for fantasy i can watch fantasy every minute, why do i only get to watch it sporati sporattically there is a lot of frames on we have not talked the deal is in progress and it is going to take some time to get the regulators do you have any further thoughts you and i have not talked about it and it is going to transform disney and it is not here many the state but internationally a company what has not reached with star, well, the ownership of sky now and any other number of important platforms no, look, i know the stock is not going to fly they bought back a lot of stocks i love personalization, well speak to personalization later th thats a new trend it shows you the relevance of bob. Bob is still relevance he is june 15th, incredible, too, i am going to be there february 10th black panther oh, it is my wifes birthday, jeez, we got to move on. Happy birthday. We got this guys mad dash and well could want you down to the opening bell well talk more about stocks as well mi bk look at futures, we are congaca little bit more squawk on the street, straight ahead el its growth. Real estate such as ecommerce warehouses. And private debt to finance transportation and infrastructure. Building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. Partner with pgim. The Global Investment management businesses of prudential. Yes or no . Gin. Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. Today, a focus on innovation in the Southern Tier is helping build the new new york. Starting with advanced manufacturing that brings big ideas to life. And cuttingedge Transportation Development to connect those ideas to the world. Along with urban redevelopment projects worthy of the worlds top talent. All across new york state, were building the new new york. To grow your business with us in new york state visit esd. Ny. Gov. Time for mad dash on hump day. We got 7 minutes or so. I want to talk about michael kors i am talking kors, i am talking a successful jimmy chu, a lot of people felt jimmy chu, they paid too much the runway, the 2020 Strategic Plan is on target, foot ware and comparable score sales, we had a great quarter yesterday from tapestry we can go back to the period where after the ipo and a great move, they suffered. Here is where they got the grass root, they buy jimmy chu is about toe cleavage that people are worried and dont understand the strengths of jimmy chu. They are back. Their stores and department stores, this is a rocket ship and it is not done a lot of people are short on this it is about inventories are lean and brick and mortar. David, yes, the inventories are lean and thats always what taught us. Handbags, david from tapestry, not the king kind but coach, handbags are on fire when was the last time handbags are on ire i dont know. I will go to blooming dale. Have you walked in sachs onipeng bell is moments away. The volatility that we see ahead, dont go ahead. See thats funny, i thought you traded options. Im not really a wall street guy. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade at ally, we created a savings account with a great rate. But if thats not enough, our app helps monitor your spending too. And if thats not enough to help you save, we could start a carpool. Look at this traffic. Dont worry. Ok, if thats not enough well start a trainpool. Oh i have a meeting in five minutes. And if thats still not enough. I got it. Well just create a shortcut. Well do anything, seriously anything to help you save. Ally. Do it right. Talking 4th quarter . Yes. Something we all think about as we head into retirement. Its why Brighthouse Financial is committed to help protect what youve earned and ensure it lasts. Introducing shield annuities, a line of products that allow you to take advantage of growth opportunities. While maintaining a level of protection in down markets. So you can head into retirement with confidence. Talk with your advisor about shield annuities from Brighthouse Financial established by metlife. You are watching cnbcs squawk on the street, live from the Financial Capital of the world. Opening bell is going to ring twominutes from now as we get ready for what may be another volatile day on wall street and getting a bit custom to it perhaps. Whats the key to this market as we like to say no, no, no. Yes why first of all, the narratives have totally changed snap, get this personalization of 35 years old on board figuring it out dominos they love it, it is always a forward advertising Customer Relations are bad daily use, unbelievable sequential gain. The sequential gain here, i am going to say sell it buor buy i am giving it a double upgrade. Wow businesses are going to love this thing, theyre going to be printing money because of the scarcity of social media just like when facebook kicked in when they figured out the mobile snap is right. Sequential i am movememprovement looks like comcast have made a good investment. Not in the money yet. It will be in the money you know whos filing snap is ten cents. The android engineering there is no voting stock what so ever. Android it did matter the engineering, the price from facebook the personalization is it. Well come back to snap in a minute lets get to the opening bell here we are hearing ringing right here at nnyc. Our headquarters, a mixed bag today. Here at the big board by the way is the American Red Cross and run away dreams foundation thats focused on the opportunity of people of disabilities and the fashion industry fantastic so many of these companies are ringing the bell there are so many great ones i know. It is really fantastic. Philanthropy, it is an important part of american life. I talked to my friend wolf this morning and hes talking about how the future is down big, down 277 and i said look, thats phony the last 300 dow being relic, great couquarter and i look at t and i say to myself, wait a second, that was just thats the unwhine of the great trade, the great stupid trade i like to call people stupid when they are stupid just like god father reference, you completely forget them there is a moment where did you go to college and get stupid, stupid these people thought vix are the asse asset. When people see an opportunity, they create products to do that. The lead up to the kriecrisis, f course, i forgotten a lot of what i learn because it is so complex. Did they buy this crap . They did not know to go back to that. We are talking about a town in norway that bough structure products and things based on mortgage back security they did not know what they bought we had to explain it to them they still did not understood what they own. He exchanged traded notes until they saw credits and we say sorry, we are terminating. Thats unbelievable vix futures and now under risk why . So it is a very good piece of research the unwhine of those funds are going to take longer we should get their names to mortify them but they mortify themselves i salute them, everybody has a rights you had an unbelievable right to be a complete bozo, thats what these guys were. The stock was down yesterday rather than volatility and no longer in play, derivatives no longer in play and not everyone the other hanes, there are two hanes it was not a blow out quarter. But, it was not terrible at hanes celestial. They maybe gone blow out. Didnt blow out is there a read through on that that i care about on hanes. I think it is important to remember that. Ever since amazon bought whole foods, it made the category better than worse. Hanes stumbled on that accounting issue they got their house in in order but have not gotten the sales. We have to talk about lenor and lenor is doing great Stewart Miller here is a name we dont talk about too often. There could be a number of things, anadarko i mentioned it frankly because it increase the dividend and expand the share it does appear to be one of the reasons why that stock is up you see it is 5 this morning. Will there be a take over in that area again . Possibly, yeah . Anadarko is the most asset out there, fabulous. Pioneer and anadarko should get together why do you feel it is a strong asset of course, the decline oil price hurt them. I felt that anadarko was as great growth independent but, anadarko, whoever buys it and i wish exxon will step up. Theyre not going to. Any deals since south western, remember shell, they were doing zombsome buying. They were bad deals xo, remember that for exxon that was very critical. Why dont you like to talk about it because i was vicious. I should tell my wife about that you were vicious. I said that they natural gas is going higher. I was rude and i used the pants word very rarely when you use it you get upset. Thats why i stop using it. I think thats good policy. Jim, i am looking at the banks here, theyre all down again. Any thoughts at all which given still seems to be the idea that well have significant rate hike this year. Everyone is right about the fed and the banks. They should be thinking far more about deregulation which is going to be great. The number of people they can off loads so to speak. Da david, can i say this is Goldman Sachs moment they got great volatility and a fabulous Balance Sheet and volatility have been very bad but they were set up did you see by the way their market unit is going to be offering financing for iphones, i should say working on it they dont have a deal thats wall street journal report i am referencing, i dont believe they reached a deal but theyre trying to. I think theyre going to have good numbers he reinvents himself now he was a banker and he was in the nfl and was doing social media and he was a west point graduate and of course, he was a banker at goldman. He was a Hedge Fund Manager for a couple of weeks. Whats really happening with anthony is the Great Innovation and now hes going to be americas small banker we did get comments on the fed. Dudley making the comment speaking in new york he says there is no change at all of Economic Policy from the recent decline in the market here is what else he said. We are having an up on this virtually has no consequence of my view of the economic outlook. My outlook has changed because the stock market is a little lower than it was a few days o ago. If the stock market were to go down, that would feed into the outlook and that would affect my view in terms. He said the markets functioning have been really good we have a global synchroniziing recovery now he added the company understands they have to change their culture. Hes the second person to say no real effect on the outlook of policy for what happened i was the one that spoke just before jim cramers famous and accurate rant against the Federal Reserve that they have no idea. Jimmy, i dont know if we are in that situation now i think it is a different situation of whats happening in the market is not a lack of market functioning total agreement with you steve. These are sturdier hands. There is no comparison to that that was a fixed income issue. Will you look at this how irrelevant of the future remember we got these vix clowns, i dont mean to call them clowns, i mean to call them chowder heads that are doing what they are doing. I indicated last night, so long suckers. We are back to an up market the nasdaq is still the one weak spot if you want to call it that apple is down 1 this morning after yesterday. We are back at 25,000, all is well with the world, jim you got to recognize that closing prices mean nothing and you should be thinking longer term here. I know it bothers you when i say that you take a stock like disney it is funny to hear you say that i changed every since i got married. Disney is up a buck 50. To me thats a buy if you got more than fiveminute time frame and you love your snap. 30 it is real. It is spectacular, david you did a double upgrade, did you . Yes, i went from sell to buy. Bitmoji, you know how big it is . You know that snap and bitmoji is number one in apps. It is a snap success to twitter. Advi advertisers are getting comfortable. The average commercial is watched for ten full seconds no. Thats big. I know. For that generation that has theattention span of a flee. Thats how long the young people have. Verizon says they are doin doing they lower the price. It turns out if you lower the price, things are better the promoted stories are doing well Small Business media have not been involved yet and nfl personalization, it is not done oh man. The cameras are the number one app, daifvid. Thats how they view themselves, it is a camera company. It says older people are getting involved because of the new on boarding because they made it easier after they said older people, i thought theyre talking about me 35 years old in the world of snap it is like logans run. This was a terrific quarter. The market is to go back down now. They are all covered this kind of stuff is nonsense pick your stocks that you like that are under value thank to Warren Buffett because of this craziness and buy. Dont believe the futures. Other than the doctor denton people who are in there trading like kissing giramis at 3 47 a. M. You cannot trust it. We have an s p 500 thats now up 1. 1 of the year. Lets check with bob pisani, get more on whats moving this morning. We moved 20 points of the s p 500. Energy and Home Builders and industrials, some beaten up groups are doing a lot better. Semiconductor is to the downside the big question is, is the selling over short volatile and going long stock. They effectively are lowering the market on tuesday and monday, it all blew up. Those short volatility, forget about it the vix, those in the vix, etfs, they had to cover. The vix went up and markets. The traders as the market kept dropping, they had to continue to keep shorting to cover their positions. So that exacerbated the sell off. Is the selling over . Has all the selling pressure dried up we had some help overall with the fact that yesterday and the Late Afternoon selling dry up around 230 this is the chart yesterday. The volume dropped in the middle of the day we had people saying oh my god, theyre not going to come in and sell like crazy and we are not going to hear margin calls and the market started lifting and whoosh the volume started to pick up when everybody realized we are not going to have a sell off. Another hopeful sign is that the vix futures are inverted now the cash vix are still higher. Thats very important overall. It is rare to have that happen usually volatility is more dangerous way out, they price it higher i think we can see the vix start to come down in the next few days whats the right level it is certainly not 10 it is certainly not 24 or 25 or 30 i would estimate some where between 10 or 20 in the next few days if this continues a lot of people target volatility now so they weight various assets by volatility when things blow up, of course, they have to rearrange their funds. Well see if that comes in and people do anything regarding that finally, i want to note that this is all happening independently of whats happening with the fundamentals of the market. I hope we can talk about that. Inflation risk have bes have be unchanged. Whats changed is the valuation risks. The markets are much cheaper now. Last week we were trading 8. 5 times for the s p 500 and now it is trading at 17. 5 times for multiples. Thats still a little bit high for historical levels but it is a lot cheaper than it was. One factor of the three major risks have changed right now we move in a 20 point range at the s p 500 and we are sort of in the the middle. The dow is up 110 points guys, back to you. The market is phony balogney. What does that mean because theyre vix people. The markets seem to be functioning just fine now. At 4 30 there is a crash and 9 30 is up this market is going to drive away all these people who got involved my senses is we can have a calm day with none of the theatrics that you are talking about. Theatrics the stocks are merely placed. There is your shakespeare for today. Lets head to the bond report. Rick santelli, what do you got for us this morning . If you look at this week, there is a bit of a negative drift. Option and treasury are having an exciting time although 2 right now are holding on unchanged we are affected by all the volatility but there is a lot of continuity of all the ranges nothing like any major drops 10s are down a couple of basis points the one week charge, i dont often Pay Attention to intradays, it is where you get on and off and opens and closes. We held at 264 and 265 during the worst of times with stocks open the chart up and all the way back to the high for 2017. That was 263 that speaks volumes. All that equities, continuing volatility and we still held 2017 and hovering in the zone that we have not seen since early 2014 there is a lot of talk that merkel finally forming at this time if you look at bund, a little spike up there theyre hovering in the 70 camp. All those dynamics globally. Solve r sovereign rates have held their own. This is actual security, barclays, it is not the widest on that chart of the sixmonth lets keep the same time frame for sixmonth, etfs. The etfs is continuous and volatile all those different sales and different areas whether it is a good portfolios of volatility management or naked ownerships of some of the volatilities of etms and etfs, it all comes back in some form of the equity markets but not as bad as it has in the past. Thats an important concept to hold onto. Yesterday, we had a 3yr note option and today we have 10 and tomorrow well have 30 lets check to the buyers and see if theyll show a big demand at 1 00 eastern jim and david, back to you thank you, Rick Santelli. Coming up, well have more on a volatile day on stocks we are in the red again. We are not moving percentage wise very municipch we have ripped up tickets yeah, squawk on the street is coming right back each day our planet awakens with signs of opportunity. But with opportunity comes risk. And to manage this risk, the world turns to cme group. We help farmers lock in future prices, banks manage Interest Rate changes and airlines hedge fuel costs. All so they can manage their risks and move forward. Its simply a matter of following the signs. They all lead here. Cme group how the world advances. Its technology was engineered beeping . While its design was meant to be seen. Experience the new 2018 lexus nx, and the nx hybrid. Experience amazing, at your lexus dealer. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley at holiday inn express, we cant guarantee that youll be able to contain yourself at our breakfast bar. Morning, egg white omelet. Sup lady bacon fruit, there it is but we can guarantee that youll get the best price when you book with us. Holiday inn express. Be the readiest. And theres a look at the big board here of course we did cross above 25,000 on the dow briefly. You can see we are still up. The s p of course also back in the green this morning weve got a lot more to talk about including stop trading with jim up next thank you clients . Well jd power did just rank them highest in Investor Satisfaction with full Service Brokerage firms. Again. And online equity trades are only 4. 95. I mean you cant have low cost and be full service. Its impossible. Its like having your cake and eating it too. Ask your broker if they offer awardwinning full service and low costs. How am i going to explain this . If you dont like their answer, ask again at schwab. Schwab, a modern approach to wealth management. You know whats not awesome . Gigspeed internet. When only certain people can get it. Lets fix that. Lets give this guy gig really . And these kids, and these guys, him, ah. Oh hello. That lady, these houses yes, yes and yes. And dont forget about them. Uh huh, sure. Still yes xfinity delivers gig speed to more homes than anyone. Now you can get it, too. Welcome to the party. Time for stop trading. What do you got . Incredible moves but im not going there. David, i think cnc should be bought reported a remarkable quarter. They raised guidance gigantically one of my absolute favorite stocks humana people dont like it initially but thats going to come back. Centene is the buy you want to own that thats the company that figured out how to make money regardless of what the government does with obamacare. What do we have on mad money tonight we have benno dorer and brian goldner. I want answers tomorrow. Im going to say to you i want answers. Hes trying to buy everything that guy and nothing works. Get some answers. I usually talk over you, so that was your chance clorox had a great quarter had misfortunate reporting during this period and it was a whitewash got it. All those tide ads, that wasnt them. No, no. Thank you i will see you right back here tomorrow. Of course. Dont go anywhere. We could be up and down 200 doesnt matter. When we come back more on the volatility and how you should position your portfolio. Keep it right here feel that . Thats the beat of Global Markets, the rhythm of the world. But to us, its the pace of tomorrow. With ingenuity, technologies, and markets expertise we create the possible. And when you do that, you dont chase the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. [ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Good morning welcome back to squawk on the street. Im david faber along with kelly evans and mike santoli Carl Quintanilla still on his way to south korea sarah has the day off. You can see after what has been a number of sessions of extreme volatility, i think its fair to say things have calmed down at least in the first half hour of trading. And thats where our roadmap begins this morning with volatility of course it does reign supreme. Stocks seesawing between losses and gains. The roller coaster continuing a bit. Were going to have it covered on all the Market Action straight ahead. Plus, big earnings movers disney reporting results and what ceo bob iger told us about the quarter. And snap stunning the street well dig through those numbers with the stock up big. And steve wynn out as ceo of wynn resorts following allegations of Sexual Harassment we have those details as well coming up. But lets start with these markets. Obviously weve had some jumpy volatility in the last couple days bring in David Lebowitz and Rebecca Patterson to talk about all of this. Thanks to you both good to see you. David, obviously markets stabilizing a little bit today. Yeah. I wonder if you think yesterday, maybe yesterday morning was kind of a plausible possible shortterm bottom and now its about kind of sorting out exactly what were going to pay for the earnings that are coming through and all the rest of it . I think thats the exact issue at hand what are we going to pay for the earnings expected to come through this year. It was fine to have an 18 plus multiple on the s p when rates were down at 250 to 260 but with rates backing up not only 30 or so basis points but relatively quickly, youre seeing that valuation come under pressure. It feels like we are sorting things out its comforting to see the tenyear yield find its own footing. I think thats going to be the first step in the normalization process. Generally speaking the fundamentals support equities moving higher once we get through this period of volatility that everybodys been waiting for. But you think that the bond yield even though its only up 30 or so basis points yeartodate, 40 basis points, its going to stay a raw nerve even with small moves towards 3 i think may stay a little bit as a raw nerve the real pain point when it comes to equity is rising rates somewhere 3. 5 but the pace rates move i think is what destabilizes the market. Going to bed one day at 260 waking up the next day at 285. That brings the tradeoffs between stocks and bonds into question a bit more. And, rebecca, one of the kind of interesting elements of this selloff in the stock market is it really wasnt matched or mirrored in other asset markets, right . You didnt see the credit markets act up you really didnt see the Foreign Exchange markets do anything dramatic. Whats your read on how all of these things have interacted yeah, i think its partly a reflection of the strong economic backdrop we have. If this had happened in 2016, we had a huge selloff in credit markets tied to the moves in oil and energy this time around credit has barely moved and, again, i think its because we have really strong Global Growth we have very strong corporate earnings going on and so people are saying, okay, this is a technical correction this is not reflecting fundamentals frankly, im grateful this is happening now because people have that fundamental backdrop if we had seen the same correction maybe a year, year and a half from now later in the cycle, higher Interest Rates, it could have been the straw that broke the camels back and put us into a sustained downturn but were not there yet. I think this is when we get a pause, the market consolidates, its healthy and then we go up from there its just a matter of when. Guys, lets show you what the president just tweeted about the market he said, in the old days when good news was reported the stock market would go up today when good news is reported the stock market goes down big mistake and we have so much good, great news about the economy. David, is he right is that whats going on here with the market . I think that the market is trying to figure out fair value, right . We saw very strong run in equities with rates not really doing all that much. And i think back to mikes point earlier what investors need to figure out, okay, in a more normal market environment which has some volatility what are equities actually worth. Is it more normal now because the economy is healing i think that the interesting thing about that comment is if we think back to, you know, the years ago during this expansion wed have everybody wanting bad Economic Data because that meant the fed was going to stay easy, right . Then for a while we went through a period where good Economic Data was good for the market so it seems to ebb and flow. I dont think we can really dismiss the liquidity aspect and Monetary Policy aspect as we figure out how markets are going to behave against the backdrop of an improving economy. Rebecca, this has been one of the theories floated in fridays jobs report which showed wage number pretty good up 2. 9 on the year is good news bad news now for the market or is there some other dynamic going on here . I dont think good news is necessarily bad news so to speak. But i think to davids point the speed in changes in asset prices says a lot if we have a sudden rise in inflation that forces the feds hand, that could be more unsettling at least on a shortterm basis for equities. If inflation rises gradually, fed moves gradually, i think this equity cycle theres news this morning i think things gotten overlooked or yesterday, actually, thats the german annual pay round. We have to remember the bond markets are more and more globally linked today. So what happens in japan or germany matters to u. S. Bond yields as well germany has just negotiated a much bigger than expected annual pay raise. And to the degree that feeds through and to inflation in europe and german bond yields, thats another factor that might push up u. S. Yields and be something that creates a little more jitteriness, thats a word, for equities. David, i guess weve been having this conversation as if theres some kind of an allclear. Is there a chance here that this is a longer term process of the market really went so long in such a calm, strong rally that we have a little more pay back or adjustment of sentiment or anything else to do . I think we do have a little bit more room for payback. I think fundamentally the way ive been thinking about this is the bond market is pricing in outlook the stock markets had for the past 18 months, right . Better growth, higher rates, higher inflation, solid earnings, and im not sure you can have two or three days of down action, two days of up action and signal the allclear. We are prepared for more volatility ahead, but we are late cycle this is when we think its important to let Asset Allocation work for you, so were staying the course leaning into risk within the context of a balanced portfolio. All right David Lebovitz and Rebecca Patterson, thank you so much for your time this morning. Las vegas mogul steve wynn stepping down as head of wynn resorts after allegations of Sexual Misconduct, shares up 7 , second best performer in the s p 500 this morning what does it mean for the future of the company lets ask former the wall street journal columnist and author of winner takes all, gary loveman and the race to own las vegas. Christina, thanks for joining us once again first of all, are you surprised he just stepped down my mind is blown. I imagined many scenarios to this playing out and him stepping down a matter of a couple of weeks after the story first hit was definitely not one of them. Right look, i havent seen it indepth yet, is he going to have a role still at this company . Or is this him distancing himself from it entirely well, officially he has stepped down as ceo and chairman so thats his role you know, weve seen a lot of indications that other people were stepping back from the company. They were reviewing things in boston and possible they were going to lose the license to operate there. Dropped out of plans to play in las vegas. I think the steve wynn association with respect to the casino going to do more harm than good. But hes an entrepreneur, he founded that company its his baby. Its hard for me to imagine that hes not going to be having itchy if i think toers g itchy fingers to get in there. Well, he does control shares, in what way would you expect him to try to exert some sort of control, christina well, i mean, its steve wynn this is a guy who doesnt pay a lot of attention to other peoples rules you know, is going to pick up the phone and call somebody and express an opinion i mean, he could do that about a piece of trash on the floor in the Wynn Las Vegas or about a Corporate Initiative its just he is an entrepreneur, sees himself as the father of that company its sort of like telling a parent to step back from taking care of their kids. Yeah. The stock is performing fairly well some people startingto anticipate, well, maybe theyll be a takeover in its future. Is that any possibility in your sense in terms of what can happen or what consolidation might be able to happen . I didnt think he would step aside quickly like this. I thought the stock would continue to go down. I think its currently valued well under the individual the company owns a perfect recipe for a hostile takeover. I also wonder if the price stock reaction tells us investors are more concerned about the risk of him staying on than the risk of him going how is it possible steve wynn leaves the company hes created, that hes micromanaged, that hes overseen and gotten to this point and shares are moving higher i mean, do people see a future, a strong future without him . Thats hard to imagine. Thats a whole great big question mark. Yeah. And i also wonder, christina, given how hes been a serial entrepreneur in this space, he says, fine, im walking away from wynn, but hes not done in business, is he . Well, we dont know, you know again, thats the question mark. Who knows whats going to happen this is completely unprecedented. So to the extent hes been the icon ig figure to a certain extent to the growth in las vegas and the guy we think of when it comes to gaming overall not just this country but macau, will anybody be able to step into that place . Well, they have matt mad dox at this point. You dont make a whole lot of steve wynns in any generation or a couple of generations. Theres nobody obvious to fill that kind of role. What happens Going Forward, again, who knows. Yeah, i wonder, christina, if the company gets sold or it comes under some kind of different mode of management, it really would represent a bit of the end of that kind of founding maverick leader of las vegas. It really does. You know, theres sheldon a adelson, he started his company, but really that era of the makers in las vegas is now over. Wow quite a day. Christina, thanks for joining us. Thank you very much my pleasure. Christina binkley. When we come back, what disney ceo bob iger had to say about his companys earnings, his deal with fox, theme park growth and a lot more. Plus, snap stuns the street. Take a look at this. The stock is up, yeah, over 30 . Big boost in active daily users. Their Programmatic Advertising seems to be working for them another check here on where we stand at this hour of course on the overall market there it is. Squawk onhetrtomg ghback after this. We offer lowt trades and highyield savings. But if thats not enough, we offer innovative investing tools to prepare you for the future. Looks like you hooked it. And if thats not enough, well help your kid prepare for the future. Dont hook it kid. And if thats still not enough, well help your kids kid prepare for the future. Looks like he hooked it. Well do anything. Takes after his grandad. Seriously anything, to help you invest for the future. Ally. Do it right. Seriously anything, to help you invest for the future. Weve been preparing for this day. Over the years, paul and i have met regularly with our ameriprise advisor. We plan for everything from retirement to college savings. Giving us the ability to add on for an important member of our family. Welcome home mom. With the right financial advisor, life can be brilliant. Welcome back as we check on shares of disney this morning amid a Broader Market rally, it was a mixed quarter. Disney saw declines in its broadcast and cable units in it recorded earnings, offset by theme park attendance. Shares are fractionally higher Julia Boorstin spoke with ceo bob iger and shares more. Kelly, moves higher not just on the upbeat news on parks but also positive comments from ceo bob iger about the Media Networks division including espn iger announced the new espn plus app will cost 5 a month and he also said subscriber declines are slowing. Well, there are signs that young people are coming in to multichannel television. People that were once called or thought to be cord nevers are starting to adopt to packages that are less expensive, hulu for instance about 39 a month fewer channels but more mobile friendly thats a very good sign. And espn as well as our other channels are on all of those services and all the packages that are offered. Iger also detailed the impact of tax reform saying the reduction in disneys tax rate gives the Company Access to more Free Cash Flow which will result in more investment weve had a good track record of investing in organic growth in our businesses, parks in particular i think the results that we Just Announced are the result of those investments. Weve also increased our dividend nicely over the last number of years and we brougoug back a significant amount of our own stock and there have been other acquirers of other businesses, of course now twe twentyfirst century fox, i think youll see a blend investment Going Forward. As for the fox deal, iger says its still on track to close in 12 to 18 months of course you can find more from that interview on cnbc. Com back over to you. Julia, whats going on with theres more star wars movies now . How many more . There are more star wars movies, yes. So the cocreators of game of thrones, benioff and weiss, these two guys who wrote and put together this game of thrones such a hit for hbo, disney announced a deal with them to create more movies isnt the star wars universe they havent said how many, but its clear its more than one. I asked iger how soon theyll be launching those movies and whether that means well maybe have two star wars movies a year instead of just one which is where we are right now. He wouldnt give us any details but said theyre very excited to work with these pairs. How many different star wars franchises are there theres a main one, and an offshoot and this would be another offshoot theres a main trilogy and another trilogy any works and we have the hans solo movie coming up in march, its obviously connected to the star wars story, but its a prequel, sort of the origin story of hans solo they have a lot of things working right now in the star wars universe last jedi came out in december but the idea you need to have enough content interested in star wars but not so much it oversaturates the market also, remember kelly, these take a long time to make. Right now theyre on track to have about one a year. Its a lot coming down the pike, julia. Thank you very much. Julia boorstin speaking with the ceo. Its been a wild week for tech broadly for f. A. N. G. In particular lets bring in mark Asset Management and canaccord morris, start with you on disney before we move on from that. If this fox deal goes through, what do you think we should see coming out of that space especially how iger emphasized doing well in streaming last night. I think this fox deal goes through and you have the best entertainment franchise in the world with the opportunity to leverage its business on a worldwide scale. Number one, it really will make it a very, very serious contender in direct to consumer, which is the future. And i think number two, fox has Major International franchises that disney can leverage its product against. So i think that the opportunitys enormous. But you are still a netflix owner. Michael graham, you are too. We own both. Yeah, exactly and thats what im wondering is there room for everybody, Michael Graham or does this represent more of a challenge for netflix Going Forward . Well, i think netflix has a clear, you know, sort of lead in the paid content market. And the big thing is that they are spending way more on original content than anyone else in the sector and that original content is has allowed netflix to really do a great job of growing the Subscriber Base and retaining subs. Right. Clearly disney with all of its media brands, all of its content brands coming into the paid, you know, market, is going to be a little bit of a headwind for netflix Going Forward. But i think that were sort of migrating. You heard it in mr. Igers comments earlier, were sort of migrating to this area where consumers will be picking and choosing different subscription packages and i think netflix and disney could easily coexist in that world. So you have a 280 price on netflix. We should show the shares. This is one of the companies down 10 among recent highs amid the market rout. Michael graham, are there companies you would be picking up on the weakness weve seen already . Has that opportunity passed . I think theres plenty of time, within the f. A. N. G. Group, we are favored in the oneyear time horizon of facebook just really solid fundamentals there and not an expensive valuation at all our next favorite is amazon. You know, amazons a little bit tougher on the valuation front, but its really easy to see the growth path for amazon Going Forward. Netflix i would put third on that list just because the valuation is so stretched and the stocks been really strong and google or alphabet weve been neutral on for several months now just thinking the other stocks look more attractive but also in googles case we see some gross margin pressure that were trying to think about. Morris, i wonder if you think weve had this little episode of volatility its often a time when leadership changes within the market, the market starts to get refocused on different kinds of things if were talking about a kind of economic acceleration, rates going up, cyclical stocks perhaps having more of a tailwind, do you think that means that the kinds of large cap growth in tech stocks that we seem to focus on might take a backseat for a while or no i think that when an economy grows faster and the best businesses have the opportunity to grow even faster than have been growing, i think you want to make a bet both ways. I dont disagree with you. We have growing interest in needing Financial Service companies, Goldman Sachs, morgan stanley, b of a, we think those are cheap stocks with enormous opportunity to build value in a growing economy. But at the same time i think you have to understand that disruption is overriding and the companies that are benefitting from disruption are the companies that can really build value in a better economy. So were not going to try and time it other than to say that theres great value in alphabet. Theres phenomenal value in amazon advertisings changing and i think we cant forget that. Morris, you know, as somebody who knows you for so long, i remember when we used to talk about just what was big media back in the day. Sure. Wlost left behind here . You know, i dont know if you short stocks anymore or not, but what about the names were not talking about . As netflix and perhaps disney in your opinion certainly take dominance in this emerging world in amazon and facebook great question, david yeah, we do short stocks, we dont get into specifics, but what we want to avoid are companies that are not structured to benefit from disruption and i think television is not going to go away at all. I mean, cnbc is really important. But the ability to integrate thank you. Thanks a lot. I live with you guys the ability to integrate linear and new media, great opportunity. I think disneys moving in that direction. And i think there are a lot of businesses that are just going to be very mature. Theyre not going to go away, but were just not as interested in them. On the topic of new business, snap is up today we have a lot of analysts including you saying a lot more positive things than they had previously why . Well, you know, snap this was an impressive quarter of execution for a company that really hasnt had very many of those since theyve been public. So, you know, they should be credited for that. Two things really happened that were good in the quarter one was the company redesigned its User Experience, made it a little more user friendly and a little more enticing theyve rolled out that new experience to around 20 of the user base. They should roll it out to the rest of the user base by the end of q1 so that should be a positive and then the second real positive is they have successfully transitioned all their advertisers to a new selfservice product called ad manager. Its an auctionbased product that will look like google and facebook in terms of the way advertisers buy ads on those platforms. So, you know, the key to whether or not this performance is sustainable is just continuing to attract advertisers and get more advertisers bidding on that inventory and the auction to drive Prices Higher is part of the reason were not upgrading the stock. We really want to wait and see if they can continue to build that advertiser density from here. Okay. Thats a question. I see you still have a hold on twitter too. Other platforms still have to figure it out. Guys, thanks for joining us. Michael graham, morris mark this morning talking tech as we go to break, take a look at shares of tronc. Always like to say tronc surging after announces to sell billionaire investor for 500 million and the assumption of 90 million in pension liabilities. You can see that stock up ahead and up over 20 earlier. And another check on stocks overall in the market right now, of course after a couple of very, very volatile days, things seem to be stabilizing at least higher right now. You cant predict the market, but through good times and bad at t. Rowe price weve helped our investors stay confident for over 80 years. Call us or your advisor. T. Rowe price. Invest with confidence. Sometimes, they just drop in. Obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Especially when inside another amazing machine. Your an amazing machine. The lexus es. With Standard Technology like lexus Safety System plus. The lexus es, and es hybrid. Experience amazing at your lexus dealer. Wow record time. S. At cognizant, were helping todays leading Life Sciences companies go beyond developing prescriptions to offering subscriptions with personalized, realtime advice for lifelong, healthy living. Honey . You almost done . Nope. Get ready, because were helping leading companies see it and see it throughwith digital. But through goodt times and bad at t. Rowe price weve helped our investors stay confident for over 80 years. Call us or your advisor. T. Rowe price. Invest with confidence. Dow up 184 this morning, but theres renewed focus on volatility and volatility linked investments. Mike is taking a look at how some of these socalled low volatility stocks have performed during this recent pullback for etf spotlight. Yes low volatility stocks as you say, kel, not so much the pure volatility Trading Exchange trading which did a couple of them blow up that really trade volatility futures and derivatives and asset class. This is stocks etfs like the splv, this is the s p 500 low volatility portfolio heres what it actually is first of all, its made up of about 100 stocks from the s p 500 that have displayed the lowest volatility. Its kind of opposite number is the s p high beta etf which are the 100 stocks that tend to have the highest beta or highest volatility relative to the Broader Market one interesting element of the last shakeout weve had they look opposite. They look very similar and this is since last thursday. During this period we went down hard and back up, the low volatility etf did not really have demonstratively lower it actually underperformed the high beta. So whats going on here . First of all its the sector mix most likely. So the s p low Volatility Fund has 20 in utilities, obviously sensitive to higher rates. They did not do well in this downturn and also the Consumer Staples like some of the more expensive groups in the market that did get hit. I think also it shows you the selloff is pret ty comprehensive wasnt picking and choosing fundamentally challenged sectors. Does anybody believe because it says low volatility etf that its going to behave that way . Maybe not totally a buffer, but i think over longer periods of time i do think thats the hope i think if you look at the way its behaved over much longer periods of time, it actually has had a little bit of a smoother ride versus that high beta. Because weve been in a 30year high bull market thats helped utilities and Consumer Staples. One of the ano, maam maliess one of those things like that, and when f. A. N. G. Was winning a lot of big tech stocks got in there too. We talked about whether big tech itself is now more of a defensive play maybe that should go in the low volatility etf. I think a lot of them have made their way there mie Microsoft Might be there. Good stuff, mike. Thank you. Lets get to sue herera with the cnbc news update. Indeed i do good morning kelly, good morning everyone heres whats happening at this hour Vice President pence says the u. S. Is preparing tough new economic sanctions against north korea in the coming days he made the comments during a joint News Conference with japanese Prime Minister abe in tokyo. Im announcing today that the United States of america will soon unveil the toughest and most aggressive round of economic sanctions on north korea ever and we will continue to isolate north korea until it abandons its nuclear and Ballistic Missile program once and for all. Tronc says its sold the Los Angeles Times and tribune to billionaire investor patrick sooshiong a major shareholder with net worth of 7. 8 billion new England Patriots offensive coordinator Josh Mcdaniels is staying put rejecting the Indianapolis Colts head coach job just hours after colts announced he had accepted the position we will see. Thats the news update this hour sends it over to dom chu for the eia inventory report good morning, dom. Good morning. Weekly crude Oil Inventories up 1. 9 Million Barrels compares to the consensus estimate of a 3. 1 million barrel increase. Gasoline inventories are also up 3. 4 Million Barrels. Analysts surveyed by street account had expected 150,000 barrel increase. If you take whats happened with prices right now we are seeing a move lower in crude oil. And of course, mike, we talk about this in context of last nights private sector data that actually showed a drawdown in some crude inventories so, again, an interesting dynamic here were watching crude Oil Prices Turn lower on the day. Sometimes a different story from those two reports thanks very much as we head to break, take a look at shares of chipotle this morning. Company reporting earnings that beat on the bottom line last night. Revenue matched forecast comp sales though rose less than expected and the chain said the number of visitors to its restaurants would keep declining through the middle of this year. You see wall street really kind of in a prolonged period of losing patience with the chipotle story without that clear turnaround stock down almost 10 right now. Much more ahead squawk on the street. Two,that was awful. Why are you so good at this . Had a coach in high school. Really helped me up my game. I had a coach. Math. Ooh. So, why dont traders have coaches . Who says they dont . Coach mcadoo you know, at Td Ameritrade, we offer free access to coaches and a full education curriculum just to help you improve your skills. Boom thats lesson one. Education to take your trading to the next level. Only with Td Ameritrade. Welcome back the president weighing in on the stock market this morning after the volatility that weve seen in the last many sessions. Heres what he said, in the old days when good news was reported, the stock market would go up. Today when guz e good news is reported, the stock market goes down big mistake and we have so much good, great news about the economy. In that context, a quick check on where we stand. The dows up 158 right now, some rebounds across the board here on wall street although the nasdaq is down fractionally so not evenly spread here. To the point about how strong the economy is, lets check on the tenyear real quickly. That yield is around 2. 785 . Mike, if its going up on good eco news and thats hurting the stock market, is that i mean, this is the same kind of debate weve been having since friday. Yeah. Its not a new argument. You know, sometimes in certain phases of the market the bad news is actually preferred im not sure i dont know what old days hes referring to. Forever has responded to the prospect of higher rates a certain way. Exactly. Oftentimes thats recalibrating. Yeah. I mean, at the best parts of an Economic Cycle this is exactly the kind of worry that you usually get, which is its going to be a little too much. Well see. But its a way of kind of weighing in on what the markets been up to while accentuating that the economys good. The economys better, yes well watch the data see if that continues to be the case Rick Santelli is over at the cme group in chicago with the santeli exchange. Good morning, rick. Good morning, and thank you, kelly. Id like to welcome my guest jack jerard, thanks for joining me. Good to be with you, rick. Weve had a boatload of market volatility and volatility is the word, it really was in effect in the equities than other sectors. Seems that oil held up very well any thoughts on that linking the two, jack . Well, rick, i think what we see is obviously shortterm volatility particularly as you mentioned in the equity markets but the reality is when you look at energy, specifically oil and natural gas longer term, the longer term trajectory is theres going to continue to be more demand. Were going to have a marketplace there. And as the market ebbs and flows in the short term, you see in our space its relatively stable but as the price begins to move up and were going to continue to work to meet that demand, theres a Bright Future for the oil and gas industry for many years to come. Jack, we hit a major milestone in january of 2018 you know what im talking about. We hit 10 Million Barrels a day of production, First Time Since 1970 technology, fracking, horizontal drilling, especially in the natural gas areas have helped ferment that my question to you is, there wasnt any government subsidies you could argue the last couple administrations didnt really push any of this, its Pretty Amazing whats occurred, do you not think . Its remarkable, rick no one would have predicted this ten years ago, but its really a Great Success story that we need to continue to build on in this country. Were providing great paying jobs, producing American Energy and now were allowed to export that energy. Were setting records there. Were becoming less reliant on outside sources. The average job or wage in our industry is 50,000 more than the average wage in our country. These are the types of jobs we need to create the energy were going to need and consume. So its a Great Success story. And we did it with technology, not government regulation or intervention and theres a lesson there for us to learn, which i think the president s on the right track here, manage through smart regulation dont burden industry in the private sector and well produce Great Results for the American People. You know, i cant help but go into a segue and i hate going into it because the minute i jumped into this circle were in political territory. But parts of the president s budget has eked out and theres two areas i want to go to of course first is hes cutting subsidies of renewables by 70 i think renewables are great, but doesnt everything have to compete in the marketplace should america subsidize industries when we see some of the great bright spots of natural gas exporting it its a clean fuel. Your thought. Well, youre absolutely right. All we ask for in the oil and gas space is an equal opportunity to compete we need all forms of energy. We support renewable energy. We support Energy Efficiency but we also need to recognize the reality of low cost affordable, reliable energy. Its still built on the foundation of oil and gas and it will be for many years to come so our basic message to government is allow us to compete. Well provide that new energy. One thing i would add, rick, thats really significant, our carbon emission, Greenhouse Gas emissions are at 25year lows in the United States. Not because of government regulation but because of clean burning natural gas thats been brought to the marketplace we need to take a lesson from that and think of how that might help us address that challenge globally through export of clean burning natural gas, et cetera its a Great Success story up and down the value chain we need to continue that momentum that was brought to us by the private sector, by private investment and particularly by technology and innovation jack, thank you so much you bring up such a great point. Just because many dont believe government can get to the promisedland Promised Land in a variety of areas doesnt mean we dont sympathize with keeping the planet safe and clean. Thank you, jack. Rick santelli, back to you. Rick, thank you very much when we come back, apple responding to the senates questions over the iphone battery scandal. Well speak with senator john thune, hes chairman of the committee taking on the tech giant. Quick check of stocks at this hour, continuing to recover. Dow up 180 s p up almost half a percent pretty much gaining back in total about onethird of nds losses. Squawk on the street be back right after this daniel jacob for every hour that youre idling in your car, youre sending about half a gallon of gasoline up in the air. That amounts to about 10 pounds of Carbon Dioxide every week. malo hutson growth is good, but when it starts impacting our quality of air and quality of life, thats a problem. So forwardthinking cities like sacramento are investing in streets that are smarter and greener. The solution was right under our feet. Asphalt. Or to be more precise, intelligent asphalt. By embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to analyze the flow of traffic. Then that data runs across our network, and we use it to optimize the timing of lights, so that travel times are shorter. Who knew asphalt could help save the environment . Trust 1 doctor recommended dulcolax. Use dulcolax tablets for gentle dependable relief. Suppositories for relief in minutes. And dulcoease for comfortable relief of hard stools. Dulcolax. Designed for dependable relief. But prevagen helps your brain with an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Ahead of tesla earnings on wednesday after the bell, is tesla a buy, or buyer be ware . Find out as weive din at tradingnation. Cnbc. Com more squawk on the street in just a bit shes asleep . Yes. Lets do this. You may be new parents. But tonight, youre determined to feel like your old selves again. Cell phone rings baby crying with blue apron, any night is a chance to see what cooking can do. Government officials have been questioning apple about Software Updates that slow down older iphones. Joining us now is chairman of the Senate Committee on commerce, science and transportation, senator john thune of south dakota. Senator, thanks for being with us i know weve spoken to you about this issue previously. Since then weve got this fivepage memo from apple answering it would seem many of your questions are you satisfied with their response well, by and large we appreciate their responsiveness. And, you know, obviously weve been digesting it. But clearly i think the issue that we wanted them to address is when people have these, you know, advanced types of devices like iphones that the companies that manufacture those devices be transparent about how they work and of course what we saw with this example was apple as they were communicating with their customers about this i think theres a lot of misunderstanding and confusion out there. Were trying to clarify it i think apple has done, again, by and large a good job of explaining what happened im glad they have lowered the price of batteries to some of the customers that were impacted by this. And if there are rebates for some of those that didnt get the lower price batteries. Yeah, so in your mind is the matter close to closed were going to continue to stay in touch with apple and monitor this we dont have any plans at this point to do anything more. I mean, obviously people have asked do you want to have hearings on this we think that for the most part at least the letter was responsive to the questions that we raised. We think that the sort of changes that apple is adopting in response to this will create, i think, more transparency for their customers. And thats really what were trying to achieve is just to ensure that these companies that have these advanced technologies sometimes when they communicate with their Customer Base about the changes that theyre making that theyre not in confusion. There are a lot of folks frankly thought this was planned was obsolete and all they needed was a different battery. Senator, while i have you on, i wanted to ask you about some headlines here nancy pelosi saying trouble for a deal to avoid a Government Shutdown the clock is ticking were getting pretty close to crunch time and the president just made it sound like hes fine if this happens what is the latest thinking on that i certainly dont want to see a Government Shutdown. And i dont know of anybody in the senate that does i hope what happens is that there is an agreement thats reached. It sounds like were very close. Some other things that might ride on the vehicle, send it back to them for another vote that would avoid any kind of a shutdown i certainly dont think thats in anybodys best interest we have an agreement to proceed on immigration, that debate will start next week in the senate. Thats what the democrats had hoped to get out of all this and so i dont believe theres any reason for anybody right now to shut the government down. I mean, the report, senator, seem to indicate that leader mcconnell and schumer are getting very close thats your understanding as well thats right. Our leader and the democrat leader, senator schumer, i think are very close to a deal which would wrap up some of these outstanding issues that need to be resolved. And frankly i think its important for us as leaders here in washington to provide certainty, as much certainty as we can, to people across the country with respect to the government operating and functioning. And then, you know, dealt with other issues, some unresolved tax issues that need to be addressed. If we can get all those things sort of wrapped into this agreement, i think it would clear the path to start focusing on some of the other stuff stuff we have to do. One of course next week will be the immigration debate. Right is it your understanding it would be a two year deal as seemingly has been outlined . I think so. And most of our members are very interested inseeing that we increase funding for National Security our readiness is i think at risk a lot of republican senators feel that way. The administration feels strongly the democrats insist for every dollar in National Security a dollar increase in nondefense spending we dont think theres a policy rationale for that, but thats sort of what the democrats are trying to achieve out of this. I understand there has to be give and take, but the main thing as far as were concerned on the budget caps deal is create some certainty, hopefully get a two year deal, get the plus up in military funding to take care of the National Security requirements which are desperately in need of funding now. And senator, going back to the apple issue, which is why youre here, i wonder if it is your committees business to get involved in issues whether iphones and social media need to be regulated more closely. Well, you know, our committee has jurisdiction over the tech community, internet, and jurisdiction over federal trade commission, the Consumer Protection enforcement agency. We do a lot of stuff in Consumer Protection space we have had hearings on faulty air bags, hearings on forcible removing people from planes, hearings on new technologies that are required on trains. Our committee is tasked with doing oversite when it comes to Consumer Protection and safety we think it is certainly in our role to make sure those companies that are manufacturing some of the wonderful, great advanced new technologies, communicate and have transparency with people that are customers. Were trying to be sure people have a voice in all this senator, things move so quickly these days and advance so fast, do you feel like the committee is up to it and those working with you are up to it keeping up with whats of importance to the American People when it comes to these devices . It is a challenge because things are changing so rapidly thats whats exciting theres so much innovation out there. Our community is dealing with autonomous vehicles, a wonderful new technology, but has to have policy framework in which to operate. But yeah, we get wonderful people on our staffs, theyre very sharp, very much in touch with whats happening in the economy now, but it is always a challen challenge. When you have an innovative economy thats taking off and starting to grow, a lot of change happens keeping up with that change is always a challenge certainly is. Autonomous vehicles could be we could spend a long time on that i look forward to it in the future senator, thanks for joining us good to be with you all thanks. We want to read apples statement made to the committee. They said as we said publicly, we have never and would never do anything to intentionally shorten the life of any apple product or degrade the User Experience to drive customer upgrades, our goal has been to create products our customers love and making iphones last as long as possible is an important part of that as we said publicly, we have never and would never do anything to intentionally actually, i am reading it again. Thats a long statement it is there twice heres a man we see twice. John ford has whats coming up on squawk alley. Snapchat parents snap up 35 . Question is, is this a short squeeze or something more real and perhaps more important after earnings, the start of Something Big error the start of twitter all over again we will explore it coming up [ click, keyboard clacking ] [ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Welcome back to squawk on the street the Energy Sector was a strong performer. Still positive on the day, as you can see. A drop in oil prices, after government showed a build in inventory. Chesapeake, cabot, noble and apache are lower we will see it it f it sticks. When we come back, shares of snap surging we dig through numbers, bringing analysis next on squawk alley. Each day our planet awakens with signs of opportunity. But with opportunity comes risk. And to manage this risk, the world turns to cme group. We help farmers lock in future prices, banks manage Interest Rate changes and airlines hedge fuel costs. All so they can manage their risks and move forward. Its simply a matter of following the signs. They all lead here. Cme group how the world advances. Good morning it is 8 00 a. M. At snap headquarters in venice, california and 11 00 a. M. Here on wall street squawk alley is live