biggest monthly decline in a decade. we've got the latest from a country already reeling. >> absolutely. better than the real thing? alibaba's jack ma says sometimes counterfeit goods are better than the originals. he outlined his plan for the chinese e-commerce giant. >> he said they're basically the same goods made in the same factory. well, the flip side of that, signet jeweler is under fire for diamond swapping. there was a bearish note on the stocks a couple of weeks ago. >> i think it's a great deal of smoke. some say, it's old news and the company has intimated it's not going to. so was formaldehyde at lumber liquidators until it was new news. now the ceo is fighting back. in the meantime let's talk about the bridge it fears. bob pisani measuring the brexit fear. it's brt breath-taking. >> yeah, it is. it's a problem on both sides. sort of a triple roymwhammy. let me put up the bund here. it's been breathtaking. remember, the bund yields were 2% going back to the early part of 2014. so it's 2%. that's putting all sorts of pressure on european banks. you've got to throw in the brexit concerns here. some of the big names like deutsche bank and allianz and barclays. it's spilling on this side of the atlantic. low bumds overseas mean they come here to try to buy our bond. that keeps the interest rate down. key banks, huntington bank shares down. this just in the past five trading sessions. even the big guys, citigroup down 7%, 8%, 9%. let's talk about the double whammy. we talked about the triple whammy. there's a third one for ugs financial systems. synchrony financial said they're seeing higher charges. that may concern there's a slowdown in the consumer even though they say they're not seeing any significant deterioration in credit. this is spilling over as well into the banks a little bit. of course, they have credit card portfolios as well. let's call it a triple whammy. bill mentioned the in the vix. we've got from 15 to over 20 in the vix in just 2 1/2 trading sessions. that's a huge move for the vix. indicates there's a big, big demand for it. bill, whenever you get that, of course, there's a sudden demand for people selling the protection. they turn around and say, wait a minute, maybe we want some higher prices here. that's why the vix is going up. this is a tradeable instrument. it's a big business on wall street trading volatility these days. guys? >> we'll continue to track the polls. now to the markets. another big worry, the fed, as policy makers kick off. today steve liesman takes a closer look at the direction of the economy. >> stinky is that technological term. you know, 100% of our 41 respondents think the fed will not raise rates at this meeting. it did not include brian sullivan. he's on the fed will raise camp. let me show you why it will not raise. half of them think because of the weak jobs report and half of them say the fed's paying too much attention to the high frequency data. 15% say thachlt interestingly to bob miss zani ice report 15% say because it's brexit. 5% are unprepared for a hike. moving on, why jobs were seen as weak, half say it's a statistical blip. it's not reflective of the underlying trend. others say it's the beginning of the trend. what are the factors that are impressing the job growth. well, it's seen by 60%. before all of you great mathematicians write in, it adds to more than 100. the economy being at full employment was at second choice. higher minimum wages out there as a potential factor. rising productivity and election uncertainty. we have a couple others on this side. the affordable care act, a skills mismatch. fed tightening, and, finally, the rise of automation. all of this is online. we're looking to see how the fed adjusts their outlook for their own funds. it's come down, down, and down. >> the retail report was also interesting. on the one hand, the recent pace is okay, but on the other hand as pointed out, the year on year end decline. you match that with what sin cony said and you wonder what's happening. >> my next stop after this appearance is to look at that synchrony credit card report because all of the other data has shown that consumer credit default rates are at all-time lows. s&p and iks peeriexperian has t. we know there's more employment, we know there's a bit higher wages. not concerned how much there ought to be with potential consumer defaults. >> we'll let you get though that report. thanks, steve. let's get to our "closing bell" exchange for this tuesday. meg green of meg gren associates. greg and rick santelli. meg, you're a voice of reason. >> hi. >> as far as brexit goes, you're telling people relax. why? >> totally. because first of all, even if they do vote and the vote becomes that they want to leave, you've got years ahead of you. there's going so much, nothing's going to happen instantly. now, maybe some of the other countries will get hysterical, but the truth of the matter is when i look at the bookies, they're not voting to leave and people that i know in england, they're not saying that they're leaving. i don't think you're going see this be a big deal. i think they're going to see it come and go. it's another reason for the markets to have tantrum just like we had the paper tantrums. we had a million tantrums here. i think i'm depressed. >> people are flocking to cash. stephen guilfoyle, at some point they're flocking to that. >> that's right. meg is right. it's going to take-two years to leave if they vote do so. my friends are in the leave camp. i think it's pretty well split. take a look at the cash levels. 15-year highs. that's good for stocks down the road. people are really scared. they're flying into sovereign debt. that becomes an opportunity. guys like myself, we look for that. i don't see this as all bad right now. >> where do you see the opportunities lining up, sarge? >> you know, not in financials, okay? that's your most dangerous area right now. we've seen that with -- i can't even say the word. we're seeing that with credit cards and consumer financial name, with the banks w real estate, anything that has to do with interest rates right now is a real dangerous spot. i'm going to avoid that. we got into the technology play. we got into the energy names. that worked out real well. i was thinking about getting into walmart trade. it worked well for the guys that did it. so right now, we're looking for the next good one. >> rick santelli, what about these global bond deals? is this going to be after what we learn britain decides to vote? >> i don't think an interest rate trajectory is going to change, even if the uk decides to stay. sure, that's one of the turnstiles that's putting activity. most of it is the u.s. the continuation of the negative rates, whether it's jgbs or bunds or many of the sovereign securities, i think they're not really the driving force there. you know, i wish i had the same calm as our guests do with regard to brexit. i don't look at how long it's going to take to revamp laws or contracts or various treaties or trade agreements. that isn't the issue. the issue is quite simple. we've seen a lot of experimentation, whether it's on us from central bankers or brussels and the creation of the eurozone from the very beginning. that creation could be adversely affected in a major structural way if the uk decides to leave. it could be a crack in the foundation that starts to get wider as other countries go. so this is a huge issue and i think it transcends the uk and i've said it many times. i think the markets are ramping up, and i think that's just defiable, and when it comes to the vix, you know, in two weeks we move from 15 basis points to minus one in the boons? there's something we ought to continue to pay attention to. vix? vix makes perfect sense. everybody needs options. options are insurance, and we need a lot of it right now. >> so let me ask it this way. let me rephrase it a little bit. you feel that the fundamentals right now justify the fears that the markets are reflecting right now, right? >> absolutely, a thousand percent, yes. >> okay. by the way, i agree with that 100%. >> you did what? >> i agree that right now buying insurance is the best policy, that the move in the vix, the move in gold, these are justified. >> so, meg, does that have you altering -- we bring it back to what you said. investors here, how much do they need to worry about this and how should they be positioning for it? >> good investors take advantage of volatility. always. look at what we had. we had 20% town in small cap, energy, mlps and high yield energy, emerging managements. look at what's going on here this year. it all is coming back. if you invest in things that maybe have slid a little bit and you think maybe they'll come back, i do not see a huge down here, you know. and in terms of interest rates, remember the fed raised the interest rates in december because they had to? there was no reason not to, but there was really no reason to? what happened with the interest rate that? they kept going with the natural rate. that's where f what the fed is alonging to. you can't raise rates in my opinion with something like this with no reason to raise them. >> did you see the performance of the financial sector the past couple of months? >> i have? >> there's no reason to fear negative rates? >> right. we don't. wait minute. you think if they go to negative rates, we have to follow? >> it seems as though. >> we may get there. the bond market may actually get there. but we're not going to go there because they go there. >> no. >> they're not going to -- >> oh, come on. stop being so depressing. >> no reason to be depressing. my news 589 points on a three-day europe. nothing to worry about there. >> give us more specifics, if you woushlgsd on where investors should be? >> only to wear, thank you. i do not invest in gold. i've been wrong too many times. if you want to stuff gold coins away, great, no. i'm wearing my gold. >> about what stocks? >> stocks, i love. >> financials, energy -- >> i don't buy sectors. energy i have been baying because we've been in mls. our portfolio is up 15% because we're buying the right mlps. we're taking advantage. if you rotate it and i love munis. i still love munis. we can get 4%. that's way better than stooe or 1.6 if you want to go there. if you balance stocks and munis, i'm not crazy about the high yields yet, but i'll get there, maybe. >> that's actually a great point of the 40 billion dollars that's come, these where people are hanging out. >> there you go. >> we even got to go. >> it's a great discussion. meg, rick, sarge, we appreciate it. we've got to send it to dominic chu. dom? >> we're watching whole foods. there was a letter issued by the food & drug administration to whole foods talking about their sanitary conditions in massachusetts earlier this year. the letter foe on to document a number of infractions dating toward the february, mid-february area with regard to this year and possibly sanitary conditions at this plant. tl news helped send some of the shares lower throughout the course of the day. we have reached out with regard to this one letter from the fda. they did receive an acknowledgement from whole foods saying they will correct these actions but they found it inadequate. we'll keep an yeah on the storying but still an interesting story for a stock that many of us are familiar with, guys. >> back over to, you kelly and bill. >> thank you. the market is lower. the dow is down 106. the s&p. the nasdaq is down 10. >> alibaba is rising after the e-commerce founder jack ma tried to drum up investor support. it expects revenue to grow 48% in the current year. wheel take a look at whether alibaba can deliver. that's coming up. also ahead, venezuela's oil production dropping in the past month as they fine. we'll have a special report after the break. you're watching cnbc, the first in business worldwide. r japanese is very good. thank you. 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(speaking japanese) i'm a customer relationship my namanager with pg&e.er, i've helped customers like plantronics meet their energy efficiency goals. so you save energy and you can save money. energy efficiency and the environment go hand in hand. and i love how pg&e's commitment to the environment helps a community like santa cruz be a better place to live. and being able to pass that along to my family is really important to me. just being together and appreciating what we have right here in santa cruz. see how you can save energy at pge.com. together, we're building a better california. welcome back. let's mention a few movers. synchrony is on its biggest paste for a decline since going public two years ago. they expect a 20- to 30-point basis increase point over the next months. it should lead to higher reserve builds. synchrony was spun off from g.e. back in july of 2014. yahoo! is rising on the report that private equity firm tpg is offering between $5 billion and $6 billion for yahoo!'s core internet assets. the bidding process is in its final weeks. other suiters include verizon, at&t, quicken loans founder dan gilbert and a partner between sycamore partners and venture capital, all of this according to bloomberging kelly. in venezuela, the situation goes from bad to worse. opec oil is declining sharply. michelle caruso cabrera joins us now. 2.37 million barrels. that's a decline of 21 thousand they were producing in december. lack of investment, parts, workers, has led some experts to predict that their production will be down by half a million barrel as day by the end of the year. they've been in talks with china to get a grace period. that's according to reuters. to say that venezuela desperately needs money from royal sails would be an understatement. look at this. it shows people storming and looting a bacary in caracas because flour and rice are short. crowds changt, we want food. thronging super markets on a sadie basis. more than ten incidents of looting are occurring daily. venezuela's political opposition is pursuing a recall referendum while he accuses the opponents of deliberately stirring up the trouble and seeking a coup. back to you. >> i want to find where there's any ray of light in this. >> there have been rumors they've had on occasion, a conversation with the imf, but never confirmed when i reach out to the imf. they're not a member or at least they haven't paid the bills and as a result, they don't report data, et cetera. it's a mess. they're not seeking a lot of advice from a lot of the major institutions in the world. >> i guess there's some effort or there should be some political effort from other leaders in latin america to push for them to begin the political process that might replace the current government, but if that doesn't happen and the government has no money coming in, what's the next step? what recourse is left? >> it is chaos on the ground already as you can see from this video, kelly. i've heard one person refer to somebody involved in the markets, refer to venezuela as the somalia of latin america at this point. to your point, if there isn't some kind of change in government, there's not an election for a while but there could be something done in the meantime, the biggest issue has been the opposition hasn't been able to unify. they've been pretty prak tured. that's been problematic. what would come next afterafter. we have 30 seconds. the dow is back. we were back 130 points. we're down 73 right now. >> nearly cut that in half. still some time to go. and coming up the head of one of the biggest auto company, carlos ghosn speaks. the impact that it could have on his company's profits. and up next, look who's at the stock skparj, model, supermodel. petra. we'll talk about why they're together. they'll talk about the mission to build schools in disaster stricken areas. a great story coming up on "closing bell." mary buys a little lamb. one of millions of orders on this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack. with the help of at&t, and security that senses and mitigates cyber threats, their critical data is safer than ever. giving them the agility to be open & secure. because no one knows & like at&t. perfect driving record. >>perfect. no tickets. no accidents... >>that is until one of you clips a food truck, ruining your perfect record. >>yup... now, you would think your insurance company would cut you some slack, right? >>no. your insurance rates go through the roof. your perfect record doesn't get you anything. >>anything. perfect! for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. and if you do have an accident, our claim centers are available to assist you 24/7. for a free quote, call liberty mutual at switch to liberty mutual and you could save up to $509 call today at see car insurance in a whole new light. liberty mutual insurance. welcome back. new data shows people donated $330 billion last year. hedge fund managers duke it out in the boxing ring for charity. all proceeds benefitting the happy hearts fund. since its inception in 2006 the fund has raised more than $24.5 million, building schools and helping 50,000 children. >> joining us please we're so pleased to announce petra. you're in boxing. >> i kick box all the time. >> are you going to be fighting? >> i fought last year. >> how did you do? >> i won. >> you'd kick my butt. petra, everyone will remember you survived the graduate great tsunami in 2004 in thailand but since then you felt a need to give back. you've built 150 home aurnlsd the world where it's greatly needed. >> we started in 2006. we have built 130 schools in ten countries. and by the end of this year we'll have built over 150 schools so it's amazing. here we are with 130 schools and almost 1506789 but the need is so much greater unfortunately. >> just amazing. >> when is this year? >> thursday. >> thursday. >> i can imagine you learn a lot about your colleagues and rivals once you get in the boxing ring with them. >> definitely. so many people have trained so hard and raised so much money. i think we're going to do better than last year, so i'm very proud. >> how did you get involved with this? >> petra showed up at my office. >> petra nemcova showed up. >> she's so down to earth, so nice. >> i will say this. children are forgotten. imagine you lose your family members and you can't go to school and school gives you a sense of normalcy and you're able to start healing from the trauma and rebuild your life. without that, you go down the spy rah, and when i explained this to tina, she said i can't imagine my two boys not going to school for even one week. >> you can't say no to that. >> i can't say no to her. i have a 6- and 9-year-old. they're in elementary school. i can't imagine. >> are you boxing petra? >> actually i am. last year tina was kick boxing. this year i'm kick boxing. there's a twist to it. i'm boxing with dane cook. >> i hope he's ready. >> she's got a heck of a wing span. >> just hold him away from you. good luck on thursday night. i admire all you've been able to do making an opportunity of this, what was a disaster. >> thank you so much. thank you for having us here and lots of love. >> petra nemcova with the happy hearts fund and tina lindstrom, the boxer from blue shift capital. >> we have deutsche bank and many other amazing companies. >> she's made the rounds and they couldn't say no to her either. >> we look forward to the stories. >> let's get to a cnbc news update with sue herera. sue? >> hi, guys. here's what's happening. president obama has called for a ban on assault weapons insisting terrorists should not have access to the guns. >> we know that consistent with the second amendment there will commonsense steps that could reduce gun violence and reduce the lethality of somebody who intends to do other people harm. >> a suspect has been shot and killed after police responded to a walmart shooting in a store in amarillo. it was a workplace development and hostaging inside the store are safe. kellogg is recalling 20 products because they may contain peanut residue stemming from a recall of its flour suppliers. mother's, keebler, kelloggs special k, murray. and famous amos. >> and jury trial on whether the legendary led zeppelin song "stairway to heaven" is a lifted some from taros. >> there was that opening guitar rift from "stairway to heaven," which i'll explain to her. >> i know that. >> she knows that. >> that's a tough song to even try to hum or sing. >> that's not a hummer. thanks, sue. we've got 30 minutes left. the dow down 61 points. a leading trigger will tell us what he's watching going into it. >> cashmere is one of my favorites. >> i love that one too. alibaba's jack ma says the make shift goods are better than ever. we'll have an investors report coming right up. here at td ameritrade, they work hard. wow, that was random. random? 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"the wall street journal" reporting the securities & exchange commission has recommended approval of the new skpaexchange. the ceo spoke with us just last week. >> you're probably looking at mid-august. what you have are 12 exchanges and they're vicious one over the other. of course, from iex's point of view, this is correcting something that's been long needed in the mark. it's going to be really interesting to see how it plays out. >> we've taken speed to a new extreme and now pulling it back in the interest of fairness. >> right. >> whether that will be received, we'll see if investors, who wanted to be portrayed that way. >> by the way along with the nasdaq, a lot of the companies have been trading near highs lately. so, again, this as a significant piece of news is on the way. >> meantime take-two interactive is transitioning from block buster consol games like grand theft auto to more digital gaming. julia boorstin is in los angeles where she's at the gaming convention. >> thanks so much for joining us here today. as bill mentioned, if so many years take-two was about so many games. now you have games. you get people to pay you on a more regular basis. where do you bridge this digital revenue from here? well, they represent about a quarter of our net revenue now, and we think that that can continue to grow as people buy more virtual kur encircumstance and as they stay engaged with our title after the initial release. >> what about the shift? >> i quibble with the word "shift." there's an entirely new business on smartphones and tablets. this is a big business. it's growing. it's the leads p.c. sports in china. >> there's so much talk here at e-3 about it. you and other folks are skeptical about v.r. >> i'm skeptical. there is no market yet. if there is, we'll be there with our consumers with our intellectual property. >> you don't believe it's going to be the market everyone says it is? >> i think the jury's out. >> what about esports? competitive gaming? >> we launched our first gaming sport. we had over 100,000 teams playing over 2 million matches for a prize. we think it's a great opportunity. is it a revenue generator for us? no, not yet. only one company in the business. the reeve knew is great though. >> there are hundreds of people who are interested in this space around the world but no one's cashing in on it yet. do you think we will be able to? >> i'm sure like the consumers, we can build a franchise, build a brand. whether we can also increase our revenues, i think there's sponsorship revenue and payments there. that remains to be seen. >> questioning a potential. strauss zelnick. thank you. >> the dow is down 72 points. >> art cashin told us it shoes a slight imbalance to the sell side. $150 million. we'll see if that has an impact here. if the brexit vote is keeping you up nights, stay with us. amy woo is joining us with what's the next hedge in case of brexit. >> later signet's ceo makes an appearance and answers questions about diamond swapping at the diamond jeweler. that's a cnbc exclusive coming up. this is my retirement. retiring retired tires. and i never get tired of it. are you entirely prepared to retire? plan your never tiring retiring retired tires retirement with e*trade. i'm in vests and as a vested investor in vests i invest with e*trade, where investors can investigate and invest in vests... or not in vests. sign up at etrade.com and get up to six hundred dollars. as long as you love me, it's alright bend me shape me, any way you want me... shape the best sleep of your life. sleep number beds with sleepiq technology adjust any way you want it. the bed that moves you. only at a sleep number store. thank you. ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business. a line of people taking pictures. isclaus? oh, that's what it's about. amy woo, we're so glad you're here. boy, do we need a read on that right now with the vix boominging and ten-year yields in germany going to negative territory. what's going on? what's the fear here? >> i was thinking you've had this massive outside move in the last couple of days. honestly my gut reaction was what took so long. we know this day has been on the calendar for a year. it's not that we didn't know. the same thing with a lot of other events that have happened. one thing i've been saying, it's a hedge for brexit even though we have this move. compared to other things globally, it's still pricing very well. >> it's interesting. on the way to the sidelines or those safe hairchs. maybe it's because they're worried about the outcome. but we're talking about a trend that is going to shape these economies over a dekid kiki kc. >> you know what it is? i think it's a little bit of behavioral finance. look. it just doesn't pay to sell that volatility right now, it just doesn't. even if that's the right move. people don't want to get in front of a freight train and i totally understand that. >> having said that, very quickly, steve grasso was jut pointing out. if brexit fashlgs he could see it. do you see that as well? >> not as much. one statistic we look at sit s how many putzs they can buy. that ratio has been trading in at around 20 times to 22 times. one put buying 22 calls and this is up from 15 calls about three months from now. so it's really, really, really cheap if you want to buy that upside. people are much more concerned about hedging on the downside. >> the downside. isn't that interesting. great stuff, thank you. we'll take a break and come back with the closing countdown. an attempt to ward it off. supermarkets are ramping up parks and get this. they're incorporating yoga classes. we'll look at what stores are doing to keep you coming. you' you're watching cnbc, first in business worldwide. >> spill on aisle 2. i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound) mobility is very important to me. that's why i use e*trade mobile. it's on all my mobile devices, so it suits my mobile lifestyle and it keeps my investments fully mobile... even when i'm on the move. sign up at etrade.com and get up to six hundred dollars. about 2 1/2 minutes left on trading. let's see how this unfolded. we've got major newspapers over there showing polls that show maybe, you know, that the brexit -- the leave category is growing there and it's leading the stay catego category. ftse down 2% in london. the dax, 1.5% in frankfurt. of course all what we've been talking about, the 10-year bund going into negative territory. it ee well off that now and it was at minus 034 -- 38% at its bottom there. we'll keep an eye on that in the next few days. here in the united states, the dow on an up-and-down day. we're finishing well off the lows, 130. the vix we pointed out, bob pisani, hit 22 for the first time since february 24th as the fear indicator continued to rise. >> i have a new strategy for successfully buying and selling u.s. stops. keep your close. as soon as we got to 11:30, everything got better. that was it. the lows of the day were right around 11:30. here's the good news. we had moderate volume. we moved all of the lows in the middle of the day. industrials got a little better. tech stocks got a little better. the overall market lifting. what didn't do anything was the financial stocks. we talked about that triple whammy. low bond yields which have been a low bond for a while. we have brexit concerns. on top of that, the credit card company, g.e. spin-off comes off and says, oh, by the way, we're in creasing the loan loss provisions for our consumer loans. they're just increasing provision. so now there's a little bit of a problem. all the credit card companies are unique. it's spilled over into the other banks. jpmorgan has a consumer loan as well. that's all we need. >> and, oh, by the way, the fed meeting tomorrow. thanks, bochblt going out with 58 points. we'll have special coverage with janet yellen beginning at 2:00 eastern time. right now viad is ricking the bell and lgih. see you tomorrow, kelly. >> thank you, bill. welcome to the "closing bell." the comeback toward the end of the day is part of the story here. the s&p down less than 4 points, the nasdaq down a little more than 4 points but not major moves here. in fact, the dow was the worst. coming up, signet jewelers under fire after commerce report their diamonds were switched out when they sent them in for cleanings. the ceo mark light will be on to address thought allegations. first let me introduce my panel, mike santoli and elan troy, donald trump's favorite from the "washington post" and tim seymour joins the fray. there's a poll about the british vote. i don't know. is that really what -- is that what this all comes down to, this vote? is it really that consequential for the markets? >> i'm going to say, no, it's not all coming down to that vote. yes, there's this one point in time, the ienld fieal effect that could have ramifications we can't really handicap right now. i guess, yeah, that's one input. but also the way european bond yields are trading, it's not strictly about the brexit vote. it's also what the european central bank is doing. european bank stocks really in freefall. i mean that's something to worry about if you're looking for something, but also this is the first time that this stockmarket rally, four months old, has been tested with a decent little pullback in oil. so all these things coming together create this anxiety. i can look eight two ways. i can say, wow, the stockmarket is whistling past the graveyard. and the vicks surge is up 20. or i can say u.s. stocks actually look pretty resilient and why are people worried in all these other markets. the one, treasury yields. they were up from the morning lows. i don't know if that means the rally is panicked. >> we woke up to the headlines about the german tenure below zero, its yield. also finding out more about the european central bank. this is a corporate debt. i think it bought upwards of $400 worth. it's a big amount. so that is a huge impact and i guess the question is, you know, how much does that distort the signals that we're trying to glean from all these crazy head lines? >> i'm going to have to disagree with you a little. at least for the fed, i think it does matter quite a bit. even before we had the leaked payrolls number from may, i this i that june was a really, really tough call for the fed because part of the thing is they're cautious. if there's nowhere to move and if there's a big one-off potentially rink event, why not wait till the next one. so even though the economic data minus the payroll support was looking pretty good heading into the june meeting, even then, the fed would have said, there's a benefit to waiting, whereas if we go ahead and move and the brexit does occur and there's a huge disruption, then that would be a problem we don't want to have. >> can we look to oil? it was a story where everything kind of hinged on how low it was going go. as art cashin was pointing out today, i thinks could get a little more severe. what impact does that have? which is the tail and which is the dog? >> i think oil could be one of the dogs for the european tachl i think they continue to be bubbling under the current and other people are very concerned about that. i would take mike's view which is, i think oil's whistling past the graveyard but i think the data on oilst s not bad. they had it out where demand is up in the second half of the year, that is up plays were probably overstated in the last year. you've got some equilibriuequil. as markets go, technicals become important. you talk how the tenure bounced off a key level. 2076 or 75 and the s&ps bounced back 1. 06 on the yen is another key level. so all of these other benchmarks and barometers for risk have held off. when the fed is coming out tomorrow. i would agree with elon in that the fed is still -- they have no reason go except tomorrow the fed will be making a statement and so that also -- no matter what they do, they're going to be injecting more volatility in a market. >> while we have you, tim, what do you make of this announcement, the news from sin conny a krony on hard stocks and what investors thought synchrony was in and how they were maybe actually doing. >> i don't think you can read the entire market from this one situation. i do think retail sales numbers were slightly better. i think the data points don't reflect recession despite all the polls that keep coming through. no, i think you have to wait and see how this plays from here. but this to me is not an event that i think should be heaped on top of things like brexit and the fed which are much more important. >> just to bring everybody up to speed synchrony financial warned about seeing a charge-off rate of nearly 5% of the next 12 months. it's up a little bit from what people thought earlier. but the shares were down 13% and its competitors, too. >> actually capital one had a real big reaction as well as discover. there is subprime exposure here, but synchrony financial, we're talking didn't store cards and things like that. it doesn't tell the full story in an economy where consumers are getting wage gains and it looks like a tighter job market. it looks like arguably overreaction to competitors. >> we have a news alert on twitter. let's get right to that. julie julia boorstin, let's get to that. >> reporter: they will value sound cloud at some $700 million. this was confirmed with twitter ceo jack dorsey, the report that twitter thought about buying sound cloud about two years ago but ended up walking away from the music service, now investing in the music service. it will be interesting to see if twitter does end up integrating sound cloud more fully into the service as it looks for different ways to add new users to its 300 millionive new uhers. >> julia, thank you. music is so valuable but what do you make of this? >> people feel like it's an obligatory feature of online service. it's not something that will make yo go there but spend more time. >>. we're less than an hour away. bob pisani joins us now for a preview of this 5:00 p.m. decision. b bob? >> china's mainland market is about $6 trillion. that's nearly a tenth of the world's stockmarket capitalization. let's take the emerging markets index. $1.6 trillion ben marced to that index which includes the largest one in the world. what are they going to do? >> a lot of the debate is seppering around whether marinland china is rt for prime time. for example, there's too many trading hawks there. more than 1,400 stocks with halted from a few days to a few months. the authorities say they'll limit hawks. second, can they get money in and out when they want to? chinese authorities say chinese firms can get in and out more often. and do invefrtss actually own these stocks? chinese authorities have confirming they own them. that was a critical clarification. so what's going to happen? the betting right now is msci will likely give the go-ahead but they said this will be gradual process. they'll limit it to 1.1% from the weight of the index. that's only a small part of its true market weight. so why this go slow approach? because they want to maintain leverage with the authorities. their message very simple. keep it up or we don't go past. they did a similar carrot and stick thing 20 years ago and, of course, we know eventually there was full inclusion in there. this is a report in less than an hour. >> looking forward to it, bob. thank you rngs. so, tim, what do you think? they're thinking there could be performance impact but this ultimately doesn't challenge anything, duh it? >> no. for people that are larking at the capital flow, it's 18 to $35 billion. i think it is important. china likens themselves to a global leader in terms of not only, you know, geopolitics but also markets, and we've seen this go on. their local market has it. china will be 40% of the mscim which i think is a scary number. if people are investing, they need to know they're more than 50% in asia right now. taiwan and korea are on the verge to develop at some point, not on this announcement, but i think it's a very interesting time. china a year ago when they didn't get put in, this was the beginning of picking that bubble when i would say it was one of the many dominos that took markets down. >> exactly. i was going to say this reminds me of what's happening with the currency. something with the ims. >> the sdr. it's kind of like after everything that's happened because of the turmoil in the markets and the way they clamp down, it hardly gives you confidence, at least for right now. >> i mean that's why it's taken so long for them to possibly be considered in mcsi. earlier in january we saw concerns how they handled the major stock decline. instituting circuit breakers and getting rid of them four days later. there's still questions around government intervention. >> is it a hopeful buy or realistic that, hey, it takes 20 years to have them more aligned. >> without a doubt. obviously if china feels that kind of pressure to conform to the international expectations, yes, absolutely. eight though i do think it also tells us we look at these market taos much through the lens of the etf, the index as opposed to market by market. along the way they all have their idiosyncratic elements. >> there were some abandoning the whole language about developing or emerging. >> that right. >> the more that global development continues, the more you wonder who's going to join the top ranks. tim, thank you. >> thank you very much. >> also mohamed el erian will be joining us. does carlos ghosn see signs of trouble too? we'll ask him about the state of the auto business next and the stock of a jewelry company and diamond swapping. they question the accounts practices. mark light joins us exclusively to defend his company. that's later on the "closing bell." y you're watching cnbc, first in business worldwide. flood of potential patients. a deluge of digital records. x-rays, mris. all on account...of penelope. but with the help of at&t, and a network that scales up and down on-demand, this hospital can be ready. giving them the agility to be flexible & reliable. because no one knows & like at&t. igoing to clean betteran electthan a manual. was he said sure...but don't get just any one. get one inspired by dentists, with a round brush head. go pro with oral-b. oral-b's rounded brush head cups your teeth to break up plaque and rotates to sweep it away. and oral-b delivers a clinically proven superior clean versus sonicare diamondclean. my mouth feels super clean! oral-b. know you're getting a superior clean. i'm never going back to a manual brush. welcome back. nissan is about to acquire just over a third, 34% of mitsubishi. but it's not just a deal story. they'll produce far more cars, put nissan in competition with automakers like general motors. thank you for joining us at post 9. >> it's pleasure. >> what a time to be in the car industry. >> it is. >> so disruptive and transformative. let's begin with mitsubishi. why does that fit in with the vision for where your company is going? >> look. it's an opportunity. a strategic opportunity which is accelerated by the fact that the company was in trouble and needed help on the short cut which makes a lot of sense. where they're strong, the alliance needs support. where they're weak, alliance can provide the support, which makes a lot of sense. it's been accelerated by what happened to mitsubishi. >> they're one of the latest to get involved with the economy fuel lie scandals. from regulators all the way to the carmakers, why -- this is before the cycle has turned. we're only supposed to find out when the tide goes out, who's swimming naked. what does that tell the public with what's happening with the car industry today? >> i think today there's a drive for transparency. it's different from what happens with mitsubishi and what's happened to some of the car mar makers, but it's difficult even from time to time. the situation is extremely complicated. i think in the long term they can maintain the trust between the users of cars and the carmakers. >> what about the health of the cycle generally speaking? we've seen a record pace nearly of auto sales in the u.s. and in many other countries, they've been strong as well. what about the quality of the sales? >> i think 2015 has been a record year. it would be another record year, no matter what happens. first because europe is doing very well and europe is doing very well because of the recovery that continues to take place in europe. we have foreseen 3%, 4% market in europe for the year. in fact, we're now on the trend of 8% to 9%. i don't think it's going to stop. obviously this is not a real growth because we're still recovering from the crisis of 2008, 2009. in the united states the united states has already recovered from the crisis. that's why you can expect it's going to be much more moderated. but over 2016 it's going to be another record year for the industry. yes, the markets are extremely competitive. carmakers are going to have to earn their results, but overall, the environment is very positive. >> mike? >> what about longer term in terms of your planning for the future of car ownership? is that something that comes into your thinking in terms of people buying fewer cars, ride sharing, electric vehicles, things like that? >> no doubt about it. first you have the product itself of the technology. particularly presented by electric cars. then you have everything which is about autonomous drive, the fact that the car is going to be able to do a lot of functions that you're doing today manually, and you're going to decide whether you want to take it or do it by yourself. and then you have the connective car, the fact that you're going to be as connected as you are in the office or at home. so this is one set of changes in playing a lot of technology, a lot of disruptions, and a lot of outsiders. but from the other side, you have this competition which is taking place in all the markets of the world, which carmakers have to be present everywhere, not only north america and china and southeastern ashorthand oorn europe and this also requires tremendous investments not only in geography but product because the products are not the same. carmakers are between all these stretches which means that you have to be always extremely awake and absolutely attentive to all the trends because some of them can be determinative for the future. it's not clear yet but you have to follow up. >> taking you to the next week obviously, there's going to be a beg vote in the uk over brexit. you guys have recently made significant investments in your plans in the uk. does that mean you're not worried or dwlou see that impacting your business? >> this situation about the uk has existed for as long as 16 years. it was the euro. we joined the euro and the pound. we're in, we're out. so we're used to. there's also this uncertainty. the way i sum rietz rj we have the laencht production plan in the uk today. this is a european investment based in the uk. it's very clear. about 10 or 15% of this production goes to the uk and 80 to 85% is exported to europe. so we're in a situation where we have a european investment. so as long as the uk is tieds to europe, it's fine. if the situation changes and nobody knows today what's going to be the situation, but if it changes, obviously we're going to have to question ourselves about what is the status of this european investment on the uk territory. you know, we have different plans obviously, but i don't think on the short-term it would change anything but on the long term there are going to be a lost questions do you want to continue to invest for the uk in europe. it's an important question. >> just very briefly, we know that there's been some moves you'd made in the past. now there's uber, apple, tesla. there's a host of new competitors and everyone jockeying for the position. where is your company going to be? are you going to be buying others and driving that conso consolidation or do you see yourself potentially getting swept up by maybe a tech company? >> you know, the scenario of a tech kpaerngs carmakers is always possible. in my opinion, very little probability. but the fact that they're going to be introducing a lot of bricks of innovation in the car industry, how this is going to happen is still unclear and who are the people who are going to be taking the lead because there are probably more tech companies than there are car makes. everyone is make their own alliance and joint venture. i think it's an exciting time. i don't think this is something. it's exciting. it pushes the car industry to the block even faster, the product, and make our product much more attractive and indispensable for the future. it used to be the kind of mechanic transport. now it's going to be a connect-it car. i'm going to be able to do with my car that in the past weren't possible. >> we look forward to where you're taking us. that's carlos ghosn. mark zuckerberg with his question and answer session. also snapchat is trying to monetize its service with ads between friends stories. will that work or turn off existing users? 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i want to know, did the mets win or not. that's what i want to know. >> that's not my thing. i'm not that -- >> i'm asking what you do. >> i look at facebook. >> zuckerberg also talked to seinfeld a little bit about the artificial intelligence project he's been working on at home, the digital butler. it sounds like it's off to a great start. also makes him sound a little like iron man. kelly? let's talk snapchat achlt new strategy to sell more ads, julia, and it sounds like a pretty significant move. >> absolutely. snapchat has its users attention. reportedly 150 million daily users watching as many as 10 billion videos every day. of course, snapchat doesn't reveal numbers. those are just the reported numbers. now they're working on its advertising options. it's going to launch new tiezmentes between friends' stories and to avoid annoying viewers, they can be skippable. the ads will be full screen and sound on. the company promising to enexpect every single ad to maintain quality control. this is part of the launch of snapchat partners. it will connect more than 20 tech-focused app partners to buy and manage ad campaigns on snapchat and have creative partners in social content to help with snapchat. user engagement is so high, there's certainly to be very high demand for these user video ads but snapchat will have to be careful not to overdo it with too many ads. >> thank you, julia. >> definitely relevant as a comparison. i do find it fascinating that the entire conversation is how are we not going to alienate users with advertising. how are we not going to put off the people who are so valuable by making money off the product. by the way, i'm old enough. i think you should go back to when they had subliminal ads in movies where the concession stand would have two frame purse second. you go buy some -- >> i like taco bell, they turn your head into a taco. here's what's happening at this hour. president obama said anti-muslim rhetoric by donald trump is not what americans want. treating muslims differently won't make the u.s. safer. >> if we fall into the trap of painting all muslims with a broad brush and imply that we're at war with an entire religion, then we are doing the terrorists' work for them. libya's national investment fund is attempting to claw back $1.2 billion from nine trades it carried out with goldman sachs in 2008 which came supposed willy after the bank used protty tuts, jets, and five-star hotels to secure contracts. they say they used undew due influen influence. a huge warehouse fire broke out in southern california. more than 75 firefighters battle thad fire. no reports of injury, although 130 people did lose power. and emergency crews in texas, take a look at, this have successfully rescued a man who became trapped inside that large l.e.d. sign at a car dealership. when they arrived they found him passed out from heat exhaustion some 70 feet in the air. he seemed to regain consciousness and was loaded into the ambulance. he was doing maintenance on it. >> i didn't know if somebody had climbed up there as a divergen e divergence. >> he was doing maintenance and was overcome by the heat. he's lucky he landed in the sign. after this, signet jeweler mark light is here exclusively to defend questions about his company's accounting practices and claims some customers have had their diamonds replaced with cheaper stones. that's coming upham people talk about "deals" on their auto insurance. wouldn't a deal involve two parties discussing something? 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>> we're seeing it in a lot of places. some are ones we owned for many years and continue do. so we take a very long-term approach. we're not jumping in and out of stocks. we tend to own them for many years. in fact, a few have been owned for over a decay. we continue to be long-term shareholders. >> does it worry you at all that so many people have owned thiess stocks at the price-to-earning rash yours and they are what they are? >> often the best growth companies look best in the short term but when you look back years later, they wind up being cheap in retro expect. that's been the case with many of these customers so far. as we look forward, we continue to think there's good opportunity despite what appears to be shortly-term high multiples. >> with investsers emphasizing index funds to the exclusion of stock picking funds like yours, has it created in your view any kind of inefficiencies? can you exploit this or simply riding the indices? >> i'm not sure there's more. the trend that is creating opportunity is the real trend toward low volatility investing. year to date, there's been a significant amount of inflows and volatility funds and i think to some degree, some of the higher growth companies have gotten beaten up because of that preference. the passive active debate hasn't led to anything we receive above and beyond the norm. but that trend toward low volatility certainly is something to keep watching. >> that's a good point. dennis, thank you for joining us. >> thank you. good to be here. seema mody. what's happening? >> extending losses after the latest data shows a surprise build. crude building. there expectation tigs was for a decrease of $2.3 million. oil prices down about 25 cents. kelly? >> there you go. the market snapping back. >> yeah. that's exactly right. a 2% target over the median turn and the oil rebound has been it. year over year it's looked better but if we see an increase in inventory, you see the prices start to fall, this could be up for debate once we get to september. >> you can see crude moving lower. that was what art cashin said to watch. up next, the company's ceo speaks publicly for the first time since that report and defends the health of his company after this. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivatives pricing model, honey? td ameritrade. welcome back. there are shares of signet jewelers down 2%. they're down 15% since earlier this month when market lawn cher jim grant made these comments about the jeweler, questioning the credit portfolio and the integrity of its employees. >> signet sells 60%-plus of its jewelry on credit. the percentage of merchandise has been steadily rising much better than sales recently, and signet's grands, kay, for example, has been hotz for dirty doings. they say it's old news. yeah, so is formaldehyde in lumber liquidators until it became so. there's no telling when it comes to the floor, but we think there's enough evidence of trouble to be bearish on signet. >> he's shaking his head here now. here to react to all of this is signet's ceo mark light. >> hello. >> is jim wrong? >> yes, jim's wrong on a lot of faults. first of all, there's a lot of inaccuracies in his report. the one i can't help but take personally is the questioning of our integrity. i've been with signet jewelers for 35 years. i've only been in business with them. we've been in business for over 100 years. we became the largest diamond retail never the world by having integrity. everything we do, everything we study, we understand the most important thing to our customers is trust and integrity. so, yes, i think jim's wrong. >> you own brands like kay and jared. there are the others. zales and pagoda. jim is sum rising. buzzfeed did two separate stories about customers who were upset with their experience. here's comments on facebook. rick smokes said his wife's engagement ring came back with flaws in it. laura gentry said i have someone else's ring. my gold band was shaf shaved as well and is by the way, that's too much for me. every single complaint we have, every one of those customers you mentioned we talk to individually, we make sure we get it right for them. we make sure that our process is right. if there is a problem, we will deal with it immediately within our own process and oush own system. the most important thing is we take care of our customers. we're all about trust. >> that is the one piece of the case against signet right now. another dovetails with another report in the news today on sin krony financial. shares were down significantly. there's concern about rising delinquencies. they say that there's an unusual amount of financing within your stores, that the fico stores are lower than competitors' arrivals, or the average might be in this country. is credit a lever that you're pulling maybe too hard in order to produce your sales? and what happens if those delinquencies start to rise? >> absolutely. you need to understand that we have been in the credit lending of jewelry business for well over 30 years. well over 30 years. our fico scores, our average fico score is 662. our usual kust pler is -- think about it. >> we still believe our credit book is a competitive manage. >> even if you think you have a good fix, where are we in the cycle? typically, credit provision gets a little too aggressive near the top of it. is it softening up right now? >> right now our credit book is operating exactly how we expected it to be. right in line with our recent guidance on our profitability. as we speak right now, we're very satisfied with the way our credit is performing. >> are you making any changes to your protocols, your procedures? the fact that all these comments that have come to light, does that concern you about what your employees may be up to? is anything going to change today relative to how you're running signet three or four months ago? >> absolutely. we're a company who's always looking to improve ourselves. everything that relates to our customer repairs, the process we have in place, we're studying it all. you have to understand that we have a serious problem. we don't believe we have a serious problem. we have negligible customer complaints. but one is too many. we're going to enhance our process going forward. >> do you owe these customers an apology? >> of course. jewelry purchase, again, i've been doing this for 30 years. this has been my life. and there's like thousands of us at signet jewelers that feel this way. our whole mission statement is to help people celebrate life and express love. so, of course, anybody who loses an engagement ring, or any jewelry purchase, is such an emotional -- of course we owe an apology. we owe an apology and make it right for them. we have to regain their trust. that's critical to us. >> you deny there's any intentional swapping going on, any intentional grading of the product, people either buying it in the first place, bring it back in or interact with your stores going forward? >> of course. it's absurd to think we wouldn't have any systematic -- we're the largest diamond retailer in the world. we got there by understanding that trust is the most important characteristic when somebody is buying jewelry. >> mark, thank you for joining us. >> thank you very much. >> the ceo of signet. the fourth of july is also just around the corner. one website has the patriotic pinstriped suit you've been looking for. we're going to go behind the scenes in a denver startup that's providing partygoers with decorative duds, when we come right back. ♪ experience the thrill of the lexus gs f sport. because the ultimate expression of power, is control. this is the pursuit of perfection. swimsuit. >> we launched the company with 50 products, 100 products, and we sold out pretty much immediately. we built that following by just being ourselves. >> reporter: that unique voice complete with the snarky social media prepares and a wild team of dedicated millennials has gotten the company over $2 million in funding, and they've grown 1,400% year over year. this warehouse is packed with crazy looks like this and this. but people are definitely buying since launching 20 months ago. they have 35,000 customers around the country. sales of around $5 million. despite that growth, it wasn't always an easy sell. in a sea of text startups, they said raising capital was a challenge. >> actually, we sell clothing online. we had a ton of trouble convincing people. our sales kept doubling every single month. that was hard for people to ignore. >> reporter: so, as you guys can imagine, this team was a lot of fun to start, to shoot this with. mtv is working on a reality series about the company. i think it will kick off in the fall. we're here in denver for the iconic tour. catch all the action online at cnbc.com/iconiclive for our live stream. >> like the real world startup edition, mike? any comments on your own partygoing attire here? >> i look at some of these outfits online. the price point, i could not believe it. $84.99 for the reading rainbow fleece jacket? how many times are you actually going to wear that? that seems incredibly high. >> who would ever wear some silly costume just once over a weekend. yeah. guilty. don't worry, we've blurred out -- >> exactly. >> i think it was the '80s. >> was it actually in the '80s? >> i was going to say, my '80s theme parties were in the '80s. >> walmart was a life saver. we have more sophisticated options, kate. >> reporter: but i think it's astonishing that they did $5 million in sales so far with all the other options. if you can afford the costumes, they're dishing out the cash to spend on those crazy outfits. it says something about that clientele and customer base. >> cheap and cheerful works in fashion, and this just another example. from yogurt to yoga, supermarkets are coming up with new ways to lure customers back into stores. wrely on the us postal service? because when they ship with us, their business becomes our business. that's why we make more e-commerce deliveries to homes than anyone else in the country. here, there, everywhere. united states postal service priority: you with new cabinets this wfrom this shop,house, with handles designed here, made here, shipped from here, on this plane flown by this pilot, who owns stock in this company, that builds big things and provides benefits to this woman, with new cabinets. they all have insurance crafted personally for them. not just coverage, craftsmanship. not just insured. chubb insured. you recommend synthetic and can yover cedar?to me why "super food"? is that a real thing? it's a great school, but is it the right the one for her? is this really any better than the one you got last year? if we consolidate suppliers what's the savings there? so should we go with the 467 horsepower? or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund. ok. sure. but are you asking enough about how your wealth is managed? wealth management, at charles schwab. thank you, mike. next time you head to the grocery store you may be able to take a yoga class instead. supermarkets nationwide face increased competition from online retailers. so many are now working to create a shopping experience as opposed to just going for groceries. for example, a store in hanover, new jersey, with yoga and zumba classes. another in phoenix offers a culinary school that's really taken off, complete with a lounge and wine bar. would you more likely to shop in a store that offered these options? >> you know, look, at some point it's going to be a cliche, everybody wants to sell experience as opposed to products. they've made themselves into food courts. there's going to be a lot of retail real estate that's going to need to be repurposed anyway. i would not be doing yoga in a supermarket. >> i've done yoga and lululemon, and boot camp inside of a government office conference room. so i am willing to work out anywhere and everywhere if i have the time to do it. if you have child care to go along with it as well, a really good idea for busy moms. >> in that case, it hits all the right buttons. zumba still in aisle nine has me. travel to costa rica in the coffee aisle. >> and get your banana and green juice afterward in the supermarket. that does it for "closing bell." "fast money" begins now. "fast money" starts right now. i'm melissa lee. your traders on the desk are tim, david, karen and dan. tonight on fast, the number of european financials trading well below their lehman brother lows. muhammad will be here to explain. a mad dash for cash. bank of america said investor cash levels are, quote unquote, consistent with the recession. but that may not be a bad thing for stocks. looking for yields? one top ranked portfolio

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