Winning streak. Catalyst seems to be more news that chinese brokerages have tighter marginal rules raising concerns about regulators having other things up their sleeves. Things to slow down the massive growth weve seen over the last year. Well have a live report in a moment. In the meantime if youre watching the u. S. Equity futures markets were higher yesterday. There is a slight pull back this morning. Dow futures down by 18 points. Apartment Building Futures down by 2 and the nasdaq down by over 8. San francisco fed president jon williams says the central bank likely to start raising Interest Rates later this year. Told a group in singapore that he expects Economic Growth in the u. S. After a weak First Quarter. Also the head of japans central bank telling cnbc he doesnt think a bubble is brewing nor is he worried about where the yen is heading. One says the yen might appreciate but in his words it should move in line with economic fundamentals. Another deal in the works. Avago technologies to acquire broadcom. The announcement could come as early as today while were in session this morning, guys. Do you know avago. I dont know them well. As well as i know broadcom. Really . Yeah you. I know when i look at what it is. It was the hp division spun off taken by kkr and silver lake and then brought back out and then changed its name when it came back out, went public in 2009 and then bought a punch of stuff. Bought lsi. Its supposed to buy others. This is big for a company that i wasnt that familiar with. Made a lot of acquisitions. A totally Different Company though because i remember them well as a spin off. So youre doing all the serious stuff. No im not. I just think broadcom and the layer. Have you ever heard of avago. Do you remember the layer, broadcom. No. But when you think of broadcom, remember the caves, the layer. That guy. That guy. Thats been awhile. Thats what i think of. Im not surprised. Like sex slaves and drugs and all of that stuff. Where is that guy now. Youre thinking of that. And also broadcast. Com which is mark cuban that he made so much money and then i was thinking how often do we show a chart of shanghai . Because we showed one and talked about it for ten minutes yesterday at the 6 00 a. M. Hour. I say why is it up 200 . Pointed out that their company does nothing to explain why we have seen the run up in the stocks. He said that and i said well the rational is theyre entering into a qe like we entered into and we went from 666 on the s p to up to where we are but they have been easing just as long on 2009 as well. Regulators there have been very concerned about the run up in the stock market too. They have made more cautionary notes and tried to do more things over the last year to slow things down. I think my point is that we booked the segment yesterday on shanghai shanghai. Because we were smart . We finally decided to look at it when it hit the top and was ready to go down 7 . If thats our role thats fine. At least we worked at it it theyll send you a lot of money. It was like why is this up here . Theres no reason. Dont forget that 7 times 18,000 here thats over 1,000 points. So this is you know, its up 200 o . But a thaw point pull back on the doubt is what theyre experiencing there right now. Should we go to singapore right now . Sri is around and hanging out in singapore now with more for us this morning. Sri. Hey there, let me just paint some context of what happened today. This is the sharpest percentage decline since january 19th. The second shartestmartest this year youre right it was lead by the brokerages on reports that theyre imposing tighter conditions on margin lending. So remember margin debt has fuelled this 140 rally over the past 12 months and consider this the amount of margin debt accumulated in the market now, 2 trillion. Thats the record level of 3 of gdp in china. What it comes down to this is they want to reduce mitigate moderate the excess leverage in the stock market right now. One stockbroker put it to me the regulators want a small ball. They do not want a crazy ball. Ill end by saying this. You have to consider the momentum of todays sell off and what it was and i think that it could persist into fridays session session. Back to you now. Thank you very much. Youre most welcome. We appreciate it. Well check in with him again. Thats something were going to keep a very close eye on. On the meantime lets take a look at the broader markets here in the United States this morning as we showed you. Slight delines in u. S. Stocks. Nasdaq down by 9. Lets look at early trade in europe. These comments coming out of greece that they hope to reach a deal soon. That most of the creditors were on board. That seemed o to beto be part of the reason were seeing strength here in the u. S. Market. The imf will be the controlling vote on all of this. The dax is down by. 04 . The cac is down by. 6 and in greece markets down by 1 as well. Lets check out oil prices. Yesterday wti was down by almost 1 . You can see this morning its up by about 20 cents but still well below 60. Brent crude is up about 29 cents. It was down more steeply today. Now trading at 62. 35. The ten year note yielding 2. 132 . Lets check in on whats been happening in the currency market. Dollar is down fwens the euro which is back very close to 110 right now. 10938. Dollar up against the yen. In terms of gold prices this morning, it looks like theyre up just slightly up by about 2. 30. 1,187. 90 an ounce. Im glad we do the jumble occasionally to keep my mind sharp because it starts to go. It starts to go. Sorkin henrik nicholas the lair the cocaine, he had a beard. He did. Who was the dude that allegedly got mad at the dog and shot his neighbor or something . That was a different guy. Which guy was that . Symantac down in the caribbean. First name nicholas. No i dont know. But he had a beard too didnt he . Yeah. He was wacky because we had him on here. Mcafee. Right. Symantec. Yeah the murdering ceo, the guy from symantec. No no mcafee. Whats that dudes name . His name is mcafee. Thats right. Hes back here now and remember i dont remember. I dont know where he is now. And supposedly allegedly he thinks methamphetamine is this wonder dug. And people were following him and trying to get him. We talked about them both. But somebody killed the dog. Did he kill the dog or he thought the neighbor tried to kill his dog. Im looking at it. The thing was barking, barking, barking. Hissing to was shot. Shut up. But then he had all of these guns in his house. Maybe we should stop talking. Different people both insane and my mind is much. On the squawk planner today two economic reports of note. Weekly jobless claims at 8 30 eastern and then pending home sales at 10 00. In political news former new york governor is expected to be the latest candidate to throw his hat into the crowded gop ring for president and a speech to watch today former Lehman Brothers ceo dick fuld is expected to give his first public address since the financial crisis. Hes the luncheon keynote speaker at a conference in new york. He now has a Financial Advisory firm. He hired some guy, some reputable guy with a big reputation to come. So its been kind of nine years since hes been around. Were going to talk about this in the chairs a little later. Well you still correspond with this guy. I dont. I would like to. I have corresponded one way but not the other way. I saw him somewhere. Maybe it was the time when we went on our date. I saw him lurking in the shadows or where were we . Remember when we when on our date to see boardwalk empire . He was somewhere like that. Was it robin hood a few years ago . I dont think so but i saw him and i said high to to him and he said hi. Hes a good man. Why arent you corresponding with him . I would like to. Hes not taking your calls . Hes not taking my calls. Well, you wrote a lot of stuff about too big to fail. Did you not . I thought the book was fair to him and the film was fair but wasnt as fair. As theres different degrees of fairness. Like different degrees of pregnancy. What . Its like your partially pregnant. You cant say your partially fair. I think james was a brilliant actor but if you were watching james woods be you. James woods is my new idol. Do you follow him on twitter . He should be your best friend. He should be everything. But when he was with you he was complaining that the next time the bankers go crazy someone is going to die, remember . Someone is going to die. He is trying to sell a movie. I dont know. Now hes traveling across the country and hes going to military cemeterysemi i see him tweeting pictures and hes upset with the Obama Administration and says ill never work in hollywood again. Hes been saying that again. That hell never work in hollywood again. You can only be mad at the Obama Administration for six years. I think he was mad from the beginning. From the getgo. Well he can think and read newspapers, right . Lets talk about a couple of stocks to watch today. Enterprise security provider Palo Alto Networks with better than expected earnings and revenue. That stock looks down. Teva disclosing more than a 1 stake in mylan saying that the purchase underscores its commitment to buy the company as soon as possible. Teva proposed to buy them for 82 a share in cash and stock last points higher. Mylan said it quote, grossly undervalued the company. Its pursuing its own hostile takeovers. Futures here are a trade lower at this hour. Chief strategist at t. D. T. D. Ameritrade. Over the last three or four months, every time there seems to be a sell off that seems to have real rational to it and it looks like its going to continue but it reverses the next day. Ive seen it so many times and i dont know whether you can tell something from the vicks or from some other technicals that explains how one day its down. Theres just no conviction. It seems to end up around 181 or 182 on the dow and you cant put any faith in a one day move. Traders are really concerned about something one day and totally elated about Something Else and seems like theyre minor. Its very true joe and, in fact, if you looked since april 1st we have been through 2080 to 2130 on the s p 500 and we bounce back and forth. Like the other day you have this big, what seems like sell off yet we still hold 2100 and we bounce back. To your point, we look a little bit weaker this morning so we may see a little bit of a sell off but when it comes to it joe we had a 20 jump on tuesday but overall its still at such a low level and people arent you know i think whats happened is over the last year and a half its paid so much to buy the dips that people used to hedge more of their positions. Theyre hedging less and less as a portion of their positions. The one thing i would say viewers should keep in mind is that we have june expiration coming up in basically three weeks. Three weeks from tuesday and with that we saw somebody buying a lot of the june 18 calls. Theres a big play out there to buy the june 18 calls. So that relates to back when the s p 500, about a month and a half ago was just below 2060. So people are looking for some volatility. As you talked at the top of the show you still have greece on the horizon. The fed, and i think part of why traders are having such a tough time is we dont know what the fed is going to do. She did say were going to raise by the end of the year but its a speculation game. What day are we going to finally raise rates . Well finally get clarity and more daytoday follow through on our trader rather than a constant speculation. Is it going to be june . Is it going to be september . What are they going to say next meeting . Do those june options expire after the fed or will we maybe people are buying those in case it happens . Yeah. I believe its the same day. Okay. So its just it almost seems like the market goes down to a certain level that people buy and then gets up to a certain level where people sell and then, you know its on any given Economic Indicator or comment from a fed official or something out of china or greece and its just a little bit i dont know what that really says. Its just a little conviction either way. Now how about traders, wall journal, traders pile in at the close leaving a void at midday. Maybe is the three really the most important hour of the day . Because we used to say that. 3 00 its not even there. Its the last half hour. We used to have someone that was the most important hour of the trading. Anyway go ahead. Well, a couple of things on that joe. I think first of all, it has that last hour of the day. One of the things about that i think is because everyone is more kiddish than we have seen them in a long time youre starting to see a lot of rotation of assets at the end of the day. People staying in trades for less time. One of the things to watch is the relationship of fixed income and stocks. Whats happening with the institutional firms, i might rotate out of some stock and put my money in shortterm fixed income to rotate it back in theyre using the 10 years and 30 years because theres so little interest to be had in the shorter term. Theres been a little bit of a kang there and you may have noticed that rick talks about it all the time on your show. Some of the relationship in the curve has changed because of that because the bigger traders are avoiding the shorter Term Products to go to longer Term Products even when theyre just storing money temporarily. Thats an interesting thing to watch also. The article points out the danger here is it could mean a lack of liquidity. Do you think thats a valid concern . Right now i wouldnt say so. Right now some of the mistakes retail traders make is trade a bio stock where the market is wide anyway. If youre going to trade the facebooks, ge apple in the middle of the day with plenty of liquidity. That is just fine in the middle of the day also. Youre starting to see those that tend to have liquidity stay with it and those that dont may widen out more during the middle of the day. That could be an issue going forward. All right. Thanks. Always a pleasure buys. Have a great day. When do the blackhawks play. Great win last night. Game 7. Nbc network should be excited rangers friday and black hawk saturday. Two game 7s i know. Im not going to weigh in on any of these because i told my daughter theres no way theyre winning. We went to the game the rangers where they lost 20 and i said blake theyre going to win tonight because i think theres no way they can win tonight. No team wants you on their band wagon. Opposite day. I dont think they can win friday either the rangers. Im on the record. But i dont know what people want. Anaheim, chicago and new york will be good. Is Anaheim Tampa bay a good you mean for ratings . Media market . Yeah. But chicago they can get involved. By the way, very quickly, just so we know nickels, remember our friend. Nicholas from broadcom . Yeah. Remember he was charged with back dating in the end. It didnt happen. So i didnt know if we said that he had been i dont know oif we got into it as more. Were worried about back dating. By the way, his pilot alleged that the pilot had to use an oxygen mask on the plane because of so much pot on the plane that he couldnt stay i thought it was a blue very well have the frank booth type thing you were getting to. Do you remember that . Do you remember frank booth . No no idea. Dennis hopper in his most classic role. Yes. Now you remember. Its a big buzz story of the morning. Jamie dimon calling out some of his shareholders speaking in a conference in new york said investors that follow the voting advice of shareholder Advisory Firms are being lazy. Of course he said god knows how any of you can place your vote based on iss or glass lewis. If you do that youre just irresponsible. Im sorry and you probably arent a very good investor either. Love him. He also said Bank Officials have not done enough to show howell the company is run. It comes after one third of the shareholders disapproved of dimons pay and the practices of one Person Holding the chairman and ceo roles. Did you see who he was talking to there . This merger might be coming. Do you think its going to come back. I dont think so. Did you see them talking . I dont think he liz belgelizabeth warren will allow it to happen. When we come back a sales miss at costco but first heres a look back at this date in history. Welcome back to squawk box. Costco with profit of 1. 17 a share. Revenue fell short of forecast. Shares are up 26 over the past year. John was here. He covers costco and john you have a neutral rating on the stock but 60 of analysts that cover it has a buy rating. So tell us what is holding you back. We have been cautious for awhile. Two issues number one, street expectations are too high for the next two or three quarters. Theres a lot of moving parts in their pnl, profitability, i think forecasting profitability is very volatile. Well cycle unusual profits in the next couple of quarters so we thought theyre going to miss at least a couple of the next few quarters. Say the next two or three. You combine that with an above average valuation level. This is trading above where it historically has. Thats not a good formula for out performance. When you look at the numbers and what looks like out performance you put that all on the profit of gas at the moment. You look today, missed on top line. How big of a difference is gas by the way . Its less important for sales. It can drive in certain quarters. So for example last quarter they beat by 18 cents. The bulk of that was the profit. It didnt filter into the price at the pump. There was probably 100 million in that quarter. So its significant to the bottom line. Less to the bottom line. When you take gas out, the larger problem is what . There isnt a problem. The fact is if you think about what we tried to do. You think its a stock market problem . I think its a valuation. That multiple an youre probably going to miss more often than not over the next year thats not good for the stock. That said if you step back and try to deconstruct everything and say whats the core business doing, it hasnt chained. High single digit sales an even growth. Thats continuing. Lastly. Yeah. American express, this whole switch, what do you think is going to happen . We know that the switch is happening. But what does it mean for the business . Slight positive for costco. At the end of the day a customer isnt going to go because they no longer offer american express. Theyll get a better deal with their new partners. Pass half of that on to the customer. Keep half to themselves which we think is about 25 million a quarter. Its a positive. Well leave it there.