Transcripts For CNBC Squawk On The Street 20160308

Goldman says not likely unless something changes in china. A fight against United Airlines as investors push for six new Board Members including Gordon Bethune. Reports of a meeting including elan musk, larry page and top ranking republicans to stop donald trump. Well get details on that. First the fight that broke out this morning between United Airlines and two of its shareholders with a combined 7. 1 in the company, par capital which is a well known airline investor and altimeter, a less well known hedge fund. They have a letter after a long period of negotiations with United Airlines. They filed a 13d some time ago that resulted in nothing that either side was willing to keel with in terms of accepting potential nominees. So we get a letter and a press release this morning saying any number of things including the following. In their view given united Strategic Asset base long term under performance results from what they say is an under qualified and effective come play sent and entrenched board of directors. Yesterday at 7 00 a. M. United announced three new Board Members and brought up the idea of appointing a fourth. The board has gone from 12 to 15. Well go back to 12 at some point. The par altimeter combination says your seemingly desperate actions yesterday appear as an attempt to maintain your official privileges and power despite your long record of deficient oversight on behalf of stockholders. When exactly did you determine that the board was so inadequate as to require four new directors all at once and without an annual meet ing or shock holder vote. Altimeter and par said we want six seats and Gordon Bethune appointed chairman. In a letter received i believe last week, five seats and Gordon Bethune as chairman reduced to three seats and gordon as chairman. Ual came back. There is mr. Bethune. They said two seats including mr. Bethune but the key is a threshold issue of mr. Bethune being made the chairman, jim, of the company. Now they are looking for six seats. Very much unclear. I cant remember the last time an activist investor won all the seats like that. Star board, dart and when they replace the board. They say it is a minority slate but with a board at 15 but apparently going back down to 12 with directors stepping off and two of the overall directors being not elected by shareholders but union reps one could argue you are talking about enten seats and they want six. Thats a majority slate, control slate. Thats an interesting question. What are they upset about . Im looking at the numbers for united. Stock over the three years, 94 . American, 71 . Look at Revenue Growth year over year. United, minus 2. 7. American, minus 3. 9. True jetblue did bet er which we know is a growth air line. Spirit, look at this. Lets look at the passenger seats. Spirit, minus 21. United down 4 . Jim white hurst will be coming on for ual. Hes from red hat. Already on. 48 years old, right from red hat. And delta. He was a brilliant man. He is. He turned around delle that. I fail to see what they are angry about. Ual would have people know the return on Investment Capital increase ed by almost 1300 basis points since 2012 to 21. 1 . Free cash flow 2. 5 billion in 2015 adjusted ebitdar an increase. United saying they are tis appointed after the attempt to engage in a constructive dialogue with par and altimeter repeatedly communicated willingness to make changes on the board, announced our intention to name new directors, named three of them yet. They are obviously disappointed par and altimeter have taken this hostile action that no concern that a proxy fight could distract the company from executing on oscars strategic plan. Mr. Munoz had a heart transplant. Coming back to work next week. Not a way to welcome someone back. Talk about a business where activists have a long and storied history including big names we talk about all the time. I will tell you, this gets to me. How did united do three years, 94 . S p, 29 . How did united do over the last two years . 20 . S p, 6. 6 . I would kill for this performance. Do you know how Many Companies i have now that i follow that are down . Why cant they go after somebody who didnt have a heart transplant. There was a lot of frustration with the airline. They have a new guy. They got a new guy. He came in and unfortunately got very sick. Now hes better. Welcome back. Out of here. What the heck . How about ale little empathy. This is business. I have hyman roth here. Its not personal. This is ridiculous. This is a good stock, getting better. Oscar is terrific. I knew him for a long time. He did a great job at csx. These activists do you know what they are . They are like the, they are the tin man. The what . They dont have a heart. Oh, the tin man. Gordon bethune is a guy who knows his way around an airline. Is he not . Tin man partners. They are made of tin. They get together. Great tin man partners. Southwest and jetblue will open lower on some of the figures and guidance. Tough comps year on year. Yep. There is too much capacity, even though i dont know a single plane i have been on that wasnt full. You could make a fortune booking flights and not going on them and getting the money. I dont know. I have companies i want to challenge. Maybe Gordon Bethune will look at these restaurant chains, noodles, potbelly. Got it. Asia was mixed overnight. Europe and u. S. Futures have weakness on the chinese export data. The global trade data showing the fastest since 2009. Government bonds in japan hit a new low. A note from goldman warning on the surge saying be aware of premature rise. Gold man says they need to keep the stress on and get the ultimate rebalancing. No one is making money. We are seeing a separation of the men from the boys. Anything chevron wont do . A real company. These other guys, theres been 17 deals, equity deals. Is that whats been 17 overall . I dont think iran can pump as much as we thought they could. Iraq is a divided country. I dont think it will do well. The capital budgets are down. It will be a different year from 2016. I think goldman is smarting. They made the 20 call. They should have declared victory. Remember, they had the high end, the low end. Obviously everybodys got too much oil. There is no place to put it. I think every big move in commodities i have seen starts with a short squeeze. Yeah. Thats a chinese ex portal falling 24. 5 . It was critical. That cant be good for commodities. Almost 14 straight days. Do you think iron ore can go up unless there is some . They cut back supply great. Copper is cut back so great. It got ratcheted back. Did you see caterpillar . High 50s to 74. Has that been done . David blaines in charge there . Love that guy. Would you buy it here . They preserve that. You mentioned chevron. Cutting the Capital Spending budget for next year after exxon did the same. Amaze. Targeting 17 to 22 billion in cap e x. Already cut 25 for this year. As you said the dividend. They love the dividend. The stock has done better than most of the stocks. This is a well run company. They are so pro shareholder and they have the ability to do this. By the way, they have had so much thats come online in the last year. Mexico. Very Different Company from, say, lin energy or energy 21. Sand ridge and chevy ron are not in the same universe. Not in the same galaxy. You could go through a black hole and get from sand ridge to chevron. Someone said i recommended chesapeake. I said chesapeake should sell 100 million shares. Thats not a recommendation. It is an idea for them to sell equity. It was as low as 1. 50 in a short altimeter of time. Wouldnt you call the guys and say, listen, how about 100 million . Absolutely. They should sell stock all day long. At night, too, in japan. They should never stop selling stock. I know they should still be offering chesapeake. Well get to more on that. I will talk about shake shack in a minute. Down 3 after weak guidance today. Gold mans chief u. S. Equity strategist. Last time he was on he said the buyback window had opened for stocks. Is this still the case . What does it mean for equities in the next few weeks and months . Take a look at the premarket if the s p can manage a gain today, thats the first sixday gain since june of 14. Back in aint many. Sales event is on. With extraordinary offers on the stylish, allnew rx. And the dynamic nx. This is the pursuit of perfection. Whats going on here . Im val, the orange money retirement squirrel from voya. Were putting away acorns. You know, to show the importance of saving for the future. So youre sort of like a Spokes Person . More of a spokes metaphor. Get organized at voya. Com. When youre on hold, your business is on hold. Thats why comcast business doesnt leave you there. When you call, a Small Business expert will answer you in about 30 seconds. No annoying hold music. Just a real person, real fast. Whenever you need them. Great, thats what i said. So your business can get back to business. Sounds like my rides ready. Dont get stuck on hold. Reach an expert fast. Comcast business. Built for business. Big earnings movers starting with shake shack. The outlook comes in shares down 8 . Urban having a good day surging after better than expected results. Unseasonably warm weather hurt dicks bottom lines. The Sporting Goods retailer missedest mats by two cents. That will open down 3 today. Shake shack had a great quarter. You still have numbers going forward. 2. 5 to 3 guidance. Thats worse than mcdonalds which sells for 23 times earnings. This one sells at 70 times earnings. Urban, the story is not the apparel but the home category doing well. This is something the dean from limited says is really good. Intimates, i know you are focused. Its double digit. Dicks, minus 2. 5 . Unseasonably warm weather. They have 9. 8 increase in inventory. Good news for tjx and raw scores. That will buy the inventory. You are coming out favorably on the shack though the guidance isnt good. I would recommend it. Its so crowded. They cant keep up cleanliness. It was distressing. We couldnt eat down stairs. Gave the ceo a hard time. That was the neighborhood. Then we decided to leave the restaurant and they forgot my sandwich. I got home and had no chicken sandwich. Peter lynch school of thought, you go home and short the stock. By the way, you would have been good. I would have made back the money i lost on the chicken sandwich. All i can say is we cant short shocks. Its replicated throughout the chain, not. But the popularity is extraordinary. The pattern is good but too expensive. The stock may go higher. Thats a bad problem. When i know where you are going. I said to clean that up. It was spanking clean the next time. That 77th street gold mine. Keep it clean, guys. Across the street from the barclays center, excellent. The one in the heart of brooklyn, terrific. Shake shack down here at goldman is nice. Jfk, extraordinary. Its one thing to manage restaurants in a town. Harder to do 150 across the country. I should take pictures, put them on the website. Litter, trash, all that. Youre something. Im not a curmudgeon. I want to clean up new york. Chipotle is getting better. I dont know if you got a free burrito. I havent gn to a chipotle. You were there. You were loyal. The whole time i went to chipotle. I never lost faith. Never. I think deutsch put a sell on it after that run. They dont believe its real. The lines are back. Jack hart telling the cfo they brought back hundreds of thousands of shares. Millennials think they can get cancer from chipotle. They are not as concerned about e. Coli. By the way, my chipotles are sparkling clean. They are. Dont trash them. Are you an a now . A. Chipotle goes from c to b. When a student goes from b to an a, fabulous. Well eel get cramers mad dash. Take a look at the premarket. A lot to get to including politics. Youre an at t Small Business expert . Sure am. My staff could use your help staying in touch with customers. At t can help you stay connected. Am i seeing double . No maam. Our at t buy one get one free makes it easier for your staff to send appointment reminders to your customers. And share promotions on social media . You know it now im seeing dollar signs. You should probably get your eyes checked. Good one babe. Optometry humor. Right now get up to 650 in credits to help you switch to at t. This bale of hay almost derailed the ranch. When a wildfire raged through elkhorn ranch, the sudden loss of pasture became a serious problem for a family business. Faced with horses that needed feeding the owners were forced to place an emergency order of hay. Thankfully, mary miller banks with chase for business. And with a complete view of her finances, she could control her cash flow, and keep the ranch running. Chase for business. So you can own it. All right. Its time for a mad dash. Mad dash time this tuesday. Man, things are moving fast. They are. Solar city is where you want to go. You wont play there. No. Aint going to play solar city. Thats a reference to sun city. Solar city is a heavily shorted stock. A Sister Company as we know. Im sorry. To tesla and musk. Here is the problem. The stock has been down after the quarter. They announced a deal last night that whole foods put a hundred solar city hundred stores. With panels on them. People say its like when value did a deal with walgreen. Legitimacy by whole foods which was up huge yesterday. Take over rumors i dont think would happen. This will get it going. What we have always been with is 50 million in the u. S. We have been waiting for the big commercial deals. Whole foods a is a specific target given the Customer Base and Everything Else thats important to it. Yes. Its sustainability. Thank you. I would point out that the shorts have been all over the stock. Everything that the shorts have been all over they are getting killed. Heres one my Charitable Trust has owned. Its embarrassing. Morgan stanley goes hold to buy panera bread. Theyre working but the Restaurant Group is hot. Hot, hot, hot. Wow. The stock will go much higher. You have been positive on it. Certainly said stand by, everybody. Panera 2. 0. It works. Their Line Management is better now . Throughput. It matters. No problems there. We have Gordon Bethune on . Yes. And they dont like thats not clear. Welcome back oscar . Welcome back. Im struggling. Hes no grouch that oscar. We have the opening bell after this. Here at td ameritrade, they work hard. Wow, that was random. Random . No. Its all about understanding patterns. Like the mail guy at 3 12pm every day or jerry getting dumped every third tuesday. Jerry every third tuesday. We have Pattern Recognition Technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. Td ameritrade. Frank abagnale. Convicted felon and con man. That was a long time ago. You know, they made a movie about it. You were shown to be quite skilled at fraud. Times change. Now i help catch the bad guys. Me too. I help banks detect fraud by applying cognitive analytics to public financial records and social media. So if somebody said, catch me if you can. . We can. Lets do a sequel. It could be a buddy movie. I would like to have a buddy. The opening bell is sponsored by power shares qqq. Leading the intelligent etf revolution. Youre watching cnbc squawk on the street live from the Financial Capital of the world. The opening bell in two and a half minutes on tuesday. The big part of the story is news from china. Exports down 25 for february. The estimate is down 14. Imports down not as much but below expectations. Shanghai managed to close flat. A lot of there is comps with the Lunar New Year a year ago. Not exactly. City. Le its been going up. A lot of the exports go to core i cant and germany. To europe. Europe is what we hear. Its just not doing a lot of business. Also remember they are trying to do more. But these are startling numbers. We have this great weekend where the legislature was talking about change. I dont expect a hard landing. These figures are hard. This comes out, are you kidding me. Another negative call on cars. Automation to a sell. You talked about the sell on gm. This is about used car sales. All i can say is look at ford. Mark fields came on mad money when the stock was at 11, 12. They said, people are too negative. When you average the chinese months, post lo nar you get good numbers. By the way, well get the opening bell in a minute. It was on this day in 1817. Nyc organized with a constitution for the new york stock and exchange board. 199 years old. [ applause ] wow. Can you get me in . I think. Well find a way. Slated to go in april. [ bell ringing ] [ cheers and applause ] theres the opening bell at the big board. Its women in etfs celebrating International Womens day over the nasdaq. Maker of chips technology. There are seven companies with no women on the boards. Only seven in the s p 500. Yes. I think there was a study done in terms of slates and why women show up on the proposed nominees. Any times. From ual. Actually, you know, thats not true. It does have women. Let me get my notes. Santoli chimes in saying some parallels to john mac, morgan stanley. You have been breathing about the health care. Still too early. Whats a little too early. John mac is getting involved. Carls point is interesting. Bethune jetblue. They have a lot of cash flow there. The stock isnt coming back. It is a hated stock because of the problems with the chinese. I like avago and skyworks. These are plays on apple. Obviously today apple is down. They hate tech today. You have not been particular ly. Theyre trying, david. Has time passed them by . I dont know. They have tried to return capital to the shareholders. They brought stock back at higher levels or a good altimeter of it. They did. The activist is gone. They said see you later. Their chip set is considered the best. There are stories about cte, the chinese hand set manufacturer. Yes. Number four in the United States but concerns they may face security issues. The stock has made quite a move. Youre coming in after a big move. It does yield 4 . 4 has been a magic number for a lot of companies. Keeping an eye on shake shack. Now down 10 . Its had such a run from 31 basically on february. Its got to get in line with the burger stocks. The Fast Food Companies have been doing well. Look at panera. They have all been doing well except for one. Jack in the box. Yeah. You were so upset about that. Mcdonalds hurt them. How do you like that . Easterbrook. A few consumer names leading the charge. On the back of urban which we said is up about 11 . Best buy, staples, gap, chipotle, bed bath, lows, whole foods on the list. Well, when you talk about home, lets see. I think tjx should be good. Thats the one to buy. Home goods is doing so well. There were other areas that urban said were doing well. Apparel, home intimates. Went over it with david. Accessories, shoes and beauty are strong. People are extrapolating that. Average of 146,000. Its smaller than it was ten years ago. Obviously way up from the crisis. Look, hamptons, still selling like hot cakes. Rental market. Very strong. Is it . Thats been kor lay tif. Obviously the bonuses are more stock based compensation than had been the case. Overall compensation has more stock than was the case ten years ago. If you were inching into that beginning in 2006, 2007 or 20078. This year has been a course correction. If sanders were to win, what would happen in terms of bonuses . I dont know. He would try to outlaw them. Robin hood situation. I dont think hes going to win. Okay. Now youre from the prediction business. Four States Holding contests. Michigan is the big cahuna on the gop side. Hawaii and idaho will be on the democrat side. Rubio looking at a fourth place finish potentially in a number of states. Trump says the New York Times is going away . Hell sue it under the libel laws. There was a story about trump bashing japan saying this is an old issue. Really not go talk to mark fields, the ceo of ford. Its japan. Speak to the people at hewlettpackard, the printer side. Hp. If youre in michigan making this call its right. They believe toyota, nissan are not playing fair. I dont know why the New York Times really did this story. Thats really going to be something that resonates. When you talk about japan not playing fair, to be fair, their economy has been in a disastrous place for 20 years. Trying to get things going and a weaker yen is part of that. They bear the brunt of the problems . You dont believe we benefit at all from having the economy be stronger. No. I think it is a closed door situation. By the way, look at what japan is going to do. Look at the cars in mexico. 5 an hour. They can sell them in a deevaled yen. This is from mark fields. This is from the ceo of ford. Not the ceo of me. Ford makes cars in mexico, too. Not as many. They have a big distribution here. Seems like the idea that trump is off base when hes in michigan. Gm and ford behind the scenes are saying this is about the devaluation of the yen. I dont understand why the times decided to make this initiative. When you go through the Conference Call it is about japan. In terms of being able to koom pete. With the japanese made printer. Its not about the dollar hurting your conversion whether its into the euro or the yen. The steel stocks moved up on steel from china. I think the Auto Companies would love to see a tax. In 1930s. This message will resonate because the ceos are saying it in michigan. Thats what they tell you. Both off and on camera. Finally before we get to the floor, a bunch of jcp, jim. Back above almost to 12. Home depot is leading the dow today. Some of the consumer retailers specifically about home and categories in apparel. Jcpenney going more to home. S sephora made a brilliant move. They are doing fantastically. There is a lot about penney taking business from macys. Home depot was the best quarter. It got lost in a period where things were bad. It was so much better. They are coming back to the ones that did well. Home depot did really well. It is getting its just desserts. Fabulous. One of the few dow component s in the green. We are down back to 1987 s p. Bob is on the floor. Hey, bob. Good morning, carl. We are down but not that dramatically. Take a look at the major sectors. Groups with nice rallies. Telecon. Technology. Town less than that. Commodity stocks, we talk about the goldman call. Heres a quick summary. Goldman on oil. Price hikes are unlikely. What the market needs is to finish the supply rebalance. Too much supply, not enough demand. A sustained rally is selfdefeating. This is a demand that will create a rally. The base metals on copper, iron ore. Bob, i think we may have audio did i have culle tis with your mike. Thats what im told. Lets figure it out. Dow is down 106. To Rick Santelli in chicago. Good morning. Ill tell you what. There is a nice drop going on in yield. This comes at a time when we are looking at yields moving the other way. Mostly moving higher. Lets look at one and two day yields getting almost double digit drops here. A couple of obvious answers. Central bank meeting is coming up. Thats a good start. Something jumps out at you. Look at the left side. We have been talking about it. Its resistance from 190 to 205. Huge congestion will be hard to get through. It backed away. Basically settled there yesterday. Lets look at another. You know the relative value trade. Like following a yellow brick road of rates down. They dropped a handfulle of basis points only in the low 20s to begin with. Another thing we should Pay Attention to is yield curve. Does it mean what it used to . I dont know. They have two drill on the balance sheet. The Federal Reserve over that. It continues to be the flattest we have seen since the end of 2007 as you see on this chart. Of course when we look at the dollar index, there is another area. One year dollar index shows us as we got closer to a hundred, the market is holding at good levels. The Euro Currency rebounded a little bit. Overtook the 110. All things being equal the dollar index isnt giving us a good flavor for anything at this point. It might be almost as confused as to what central bankers will do and, b, if they do it, will it help. Back to you. Rick santelli in chicago. Well talk to you in a little bit. Oil meantime down some 62 cents. Jackie . Good morning, carl. A little bit of a seesaw pattern. We started lower because of the chinese trade data coming out. We rebounded and we were in positive territory. As soon as the market opened down so went oil. Equity is dragging a little bit. Wti over 37 a barrel. Holding over 40 which is a key level, too. In terms of the picture now, there are supportive factors out there. The recent rally driven by technicals and momentum. Also seasonality and the chatter yesterday that opec is talking about the equilibrium point of about 50 a barrel. Meantime there is down side bias as well. Bob pisani mentioned gold man and the rally might be over done, too far too fast. Dollar strength rekently is something we have forgotten about but something to think about as well. Well hear from the api, department of energy tomorrow. We discounted the numbers last week. Looking for something less like 3 million barrel this is week. The market has shrugged it off. It could go either way this afternoon. Jacques, thanks. When we come back a secret meeting attended by tech heavyweights like larry page, elan musk and others. The main topic was how to stop donald trump. Well talk about it after the break. Meanwhile the proxy fight at united. Gordon bethune joins us for an exclusive interview at post nine in the next hour. At mfs investment management, we believe in the power of active management. By debating our research to find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. Someones hacked all our technology. Say, have you seen all the Amazing Technology in geicos mobile app . Mobile app . Look. Electronic id cards, emergency roadside service, i can even submit a claim. Wow. Yep, geicos mobile app works like a charm. Geico. Expect great savings and a whole lot more. A new report from the post says tim cook, larry page, sean parker and elan musk attended over the weekend off the coast of georgia. The event was hosted by the American Enterprise world forum where the topic was how to stop donald trump. The tech ceos were joined by mitch mcconnell, karl rove, paul ryan. We have heard similar stories, folks in the valley having meetings for the race at large. This isnt something trump will use. I dont know. Its funny. The republicans and Business Leaders dont necessarily all go together. This united front. Again they are against me. People love that stuff. I dont know. You have heard the report. I predicted bloomberg wouldnt run also. The mets are going to win this year. There you go. Anything else . No. Okay. Are we good for today . Yes, i am. Into apparel. Just be aware. Every day a group goes nuts. Jcpenney is getting a remarkable rally in restaurants and retail. Look at a tenyear of ross stores. Thats a crazy chart. What a great one. One of the analysts said, do you remember when off price was something you didnt want to talk about . This is the tenyear. Dress for less, pay higher for a stock. What a great story it is. Dont lose sight. Fantastic. Amazing. Well get more trading with jim in a minute. Squawk on the street continues after the break. Anything worth pursuing hard work and a plan. At baird, we approach your Wealth Management strategy the same way to create a Financial Plan built to last from generation to generation. Well listen. Well talk. Well plan. Baird. Can a a subconscious. Mind . A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . At ally bank, no branches equals great rates. Its a fact. Kind of like social media equals antisocial. Hey guys, i want you to meet my fiancee, denise. Hey. Good to meet you dennis. Everybody wants to bury facebook, amazon, netflix and google now alphabet or f. A. N. G. Right now amazon is doing well. This is a weird one. One of the groups of stocks under pressure is the biotech smaller caps. Bears say hold the one we are in. Im shocked someone is upgrading like someone thinks something is going on. Maybe something happens. That stock. Look how badly its done. Do you think its possible . Maybe they are getting to approval el. Not consolidation. When you see this, be aware if the group has been in the biggest bear market it holds out a bear, iron ore. I think a lot of bear markets ended since february 10. Among the rolling bear markets. The apparel, restaurant ended. Iron ore ended. Machinery ended. Iron ore is going on for a long time. Not to say you are somehow constructive on stock again. Im constructive on that. Just extraordinary. It happens sooner because you think if oil came down it would have had more impact. It seems to be having an impact at home. Oil is having the affected impact many of the stocks are up sharply or down. The rallies have been enormous. Will the windows close on these offerings. I dont think so. Do you . The private equity money that wants to get in oil, still not able to get in it. They came in early. West texas intermediate is below brent. We can sleep. We can just shift to whoever wants it. We have a better, cheaper oil thats as good as everybody else. Whats on mad tonight. One of the companies is cyber security. We have cyber arc. The company is doing so well. But the stock gave up. Its ridiculous. Look at dicks coming back. That might be because of Sports Authority closing. Dont be so negative. Retail, dont get too negative. Circuit city, radio shack, Sports Authority. This is a long ride. You have to listen to people should listen to it. Rest the voice, see you tonight. Laryngitis is a bad thing. When we come back, Goldman Sachss david kostin. We are back in a moment. Know your Financial Plan wont keep you up at night. Know you have insights from professional investment strategists to help set your mind at ease. Know that planning for retirement can be the least of your worries. With the guidance of a pnc investments financial advisor, know you can get help staying on track for the future youve always wanted. Trolling for a gig with cant blame you. Its a drone you control with your brain, which controls your thumbs, which control this joystick. No, im actually over at the ge booth. Were creating the operating system for industry. Its called predix. Its gonna change the way the world works. Ok, im telling my brain to tell the drone to get you a copy of my resume. Umm, maybe keep your hands on the controller. Look out ohhhhhhhhhh. You know what, im just gonna email it to you. Yeah thats probably safer. Ok, cool. Once again stocks taking a cue from oil which had a little bit of a zig zag pattern. Currently in the red. The dow is down. Lots to come later on today. The eyes on chinese exports. Here we go then. Heres the road map. David kostin is with us live at post nine for an exclusive interview. Find out where he thinks the market is headed. Voters are supporting ted cruz. Oil is falling 10 in the last week. When we get back to 40 a barrel. Coming up later on an activist launching a proxy fight against United Airlines pushing for new Board Members including Gordon Bethune of continue nen tall. Hell join us live in a few minutes for an exclusive interview. First up, stocks are in the red. Feeling the effects from weak data out of china as investors seem to still be cautious over the potential shroud in the global economy. For more on the markets joining us at post nine is david kostin, chief u. S. Equity strategist at goldman sachs. Good to have you back. We talked about buy backs and companies being a marginal buyer post earnings season. Right. Is this window still open . For another couple of weeks. It was here a month ago. Early february. Indicated that in the key drivers between Growth Drivers and money flow it was to watch in february. On the ninth of february, the market hit on the 11th. The idea is the net demand. The only source is coming from share repurchases. That was the narrative for the month of february. There are a couple of weeks left until the third week of march. There were huge altimeters, record authorizations year to date and the executions have been at a he will think pace. That window is open. Thats a tail wind sentiment indicator suggesting positioning in the market is still light with respect to the futures market. That would be positive at the market. The window will close and you will be in a situation. It will be about valuation and growth. The market is at extensive levels around 2,000. The markets town 10 in january. Up 10 in february. Thats the narrative. Market as 15 appreciation from here to the end of the year. Thats a great call made in february. It doesnt change your year end , anything like that. The economy is growing. The fed is likely to be raising rates this year. The companies with domestic revenue will continue to outperform. Thats the most important narrative taking place in the last five years. 50 le taj points of companies outperforming those with export oriented. Interesting call because the dollar has stopped strengthening from multi year highs. We look out over the next year. That would be a forecast of another 8 appreciation in the dollar supporting Companies Like wells far go, lowes, domestic facing companies discover cardinal health. Most are domestic. Thats a key driver to what would explain the key performance. Speaking of domestic companies, what would a trump candidacy mean for the stock market . Uncertainty. There is another election this week and another primary next week. Markets would suggest that the republicans are still close to as he primaries away. 5 to 6 . Coming back to where we were at the beginning of the year. There is a spinoff on it. Not now a major theme, is it . The issue of the overall market being relatively expensive in historical concept suggest it is index level is more limited. We are looking for money for the client clients. It is one interesting development. It was an 80 rise in spinoffs. To 176 thats the highest number in 15 years. Looking back over the last 15 years. It was a successful spin off from a perspective. Looking at companies with lower p. E. Multiples. With lower expected returns in terms of Earnings Growth and in a different industry. If you found them, when you found them they have a dramatic increase in return. Excess improvement or return for the spin off. Over the subsequent two years with a 90 hit rate of outperformance. Looking at spin outs as an investment strategy. It is an important one. We expect there will be high levels of spin outs this year. Margins are high and the economy is growing at a modest level. Corporations looking for the rate of return. Spin out is a good strategy. Is this thinking within gold man powers about what ceos should be told as well . The an jirmt where the economy is growing and margins have been flat for five years the idea of how they generate returns for shareholders, one way is to spin out of business. That generates returns for the existing shareholders. There is the opportunity potentially for investors in the new company. Strategically. Is there an industry you are looking for the spin offs to happen . In Different Industries or relative to the conclusions. It wasnt a function of which industry. It was consistent across all industries. Having these characteristics. Maybe a slight exception for tesla. Those three characteristics made for a successful spin out from the investor perspective. Larry somer this is week in the washington post. Who is arguingly dovish says if the situation or the universe people would be crying. Inflation were the threat, why is it not the case now. Do you think there is a cry for that . The economy is growing. You see unemployment fall. Then the idea is you had feds hiking rates three time this is yearment not what was expected. It is a view of gold man that suggests companies with stronger Balance Sheets will do better than weaker Balance Sheets. Plays to the idea of a stronger dollar environment. Domestic revenue ought to outperform. Thats my forecast. Nice call last time. Well see you next time. David kostin, goldman sachs. Up next, a proxy fight launched against United Continental. Activists pushing six new Board Members including former continue nen tall airlines ceo Gordon Bethune joining us live for an exclusive after the break. At mfs investment management, we believe in the power of active management. By debating our research to find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. Hedge funds altimeter and par which hold a 7. 1 combined steak in United Continental are launching a proxy fight calling the board under qualified, in effective and complacent. They are putting up a slate of six nominees for the united board and want Gordon Bethune to take over as uniteds chairman. He joins me now. Good to see you. You have been told this is a threshold issue. You being made chairman. I know they need help. Par and altimeterle asked me to help. All my friends are at the company. Im willing to help. Why are you part of the effort. If youre in a horse race and you are not winning. You were on a relative basis. I believe the shareholders arent happy with having no airline expertise at the helm. Free cash up to 2. 5 billion in 2015. The pretax adjusted income is up 2012 to 2015. There is a new ceo whos just coming in. Give us a chance. Why are you coming now. Im helping out for shareholders. Why do you think you have the interests of the shareholders. They should be in first place instead of last. The best route system. How come they are in fourth or fifth place. I heard the data. They are not running against draft horses. They are racehorses. They need to race. Back in september when mr. Munoz was going to be promoted up to the top job, you were favorable on him. I was having lunch and called me on the phone. I love the guy. I recruited him to the board in 2004. Hes a likable, good person. I was sorry to see he got sick. Hes coming back. Do you support mr. Munoz . Absolutely. Its not about him. What is it about . Gov nabs, open process, expertise to set a strategy and having someone who understands the Airline Business on the boards. There is a lot of back and forth as there often is between par and altimeter and the company. We want six seats, we want gordon, we want five, well take three. All along they have wanted you to be chairman. Why is that . Well, you have to ask them. But they have the confidence. I do know the front end from the back of the airplane. It would be a novel experience more continue nen tall or united. They say they have actual experience. Including a guy who was at delta. That was what they need to do. Shareholders need to do more of it. Thats only the difference today. You were not enamored of the last. In the dark of the night he gets disposed of. No search was held. No airline expertise was recruited. A couple of guys that put both of them on the board nominated them for chairman and ceo in the dark of night. You are 74 years old. Just a Number System yeah. You look fabulous. I walk two miles a day and train twice a week. You are on the boards of honey well. And sprint. Thats a lot of heavy lifting. Are you sure youre up to it. Im coming off the boards. Maybe not sprint but the other two. Im doing it as a favor. I dont need the job and its a headache. But the employees, i love these guys. I spend my life with continue nen tall and the United People i met have been 40, good people. Ill do it. Whats the last thing you do if you win the battle and become chairman of the company. Well have accountability to measure those goals and beat the competition. Thats the name of the game. Beat the competition. Why has united not in your opinion been able to do it . They dont have the expertise or the vision or knowledge of how to do it. You think thats a result of the board or management . Its the board. Always. Its the board of directors. Sets the program, the strategy, set it is tone. Holds people accountable. They havent done a good job relatively doing this. These fights can often end in a settlement. I hope so. Do you expect that to happen here . I know par and altimeter guys hope so. Again, the threshold seems to be as i have been told that you would be made the chairman. Thats been their money. I dont vote their money. They have their own shares, know what they want and they are asking for what they want. I dont want to be in the business longer than that. The retirement age can be extended by the board. Back to this idea. There is a new ceo taking over. A new heart. Vigorous again. Doing a lot of work. Coming back full time. Three new Board Members, potentially a fourth. Why is it not enough to satisfy the shareholders you are aligned with. Last night, as a matter of fact, giving me time to react. Im not speaking for the investors. I am helping them achieve goals. You may want to ask that question. They said it was progress. Just not enough. I have heard from a couple of investors. Not the vast stretch of them. You do wonder about the timing of this. Particularly saying the guy is just coming back. Hes had Serious Health issues. One big headache. They are keeping oscar, not running against oscar. Everyone loves oscar, including me. Its the board that has a country club atmosphere. Obviously hasnt been paying attention, set the right goals. Frankly hasnt followed Good Governance processes and procedures. When you were ceo of continue nen tall did you think the board was different . Sure. Absolutely. Why . First of all, they are different people. Second of all we were winning. It helps to be a winner. We had a pretty well informed, tight board that knew what was going on. The people that were on the board actually knew something about the business. It didnt go that well. I think we are true. How fast that occurs is predicated on how much help he can get. Mr. Munoz needs help in learning aviation and how it works. You dont learn anything on the board. You learn my doing stuff. Thats out there loading bags, flying airplanes, scheduling and making an airline run. Why isnt the airline on time. Its not the board of directors fault. They need to set goals, standards and have them met. You need to know about what goals to set. You have to set expectations and have your management achieve it. Thats what boards are for. The weeks ahead could be busy for you. Im anxious to help. If they didnt need me, i wouldnt do it. Who are the friend s . 40,000 continental people. I made a lot of friends at united. You would be surprised how many good people i have met. There is nothing wrong with the people in this company. Absolutely nothing. Nothing wrong with a lot of the management of the company. Were going to be standing by and watching. Youre a contributor. An Important News story this morning. Thanks, gordon. Good to see you. Stay there. Dont get up. When we come back, the republican head of a super pac on antitrump groups spending up to 20 million before the primary primaries. Vetting is under way in four states today michigan, mississippi, idaho and hawaii. Meanwhile antitrump groups are expected to spend up to 20 million before next weeks winner take all primaries in florida and ohio on ads like this one. Have a listen. At Trump University we teach success. Thats what its about. Success. Its going to happen to you. Former students say Trump University was a scam. The truth about Trump University donald trump made millions. While hardworking americans got scammed. Donald trump belongs in 3 00 a. M. Infomercials, not here. Joining us now, former Deputy Campaign manager for mitt romney in 2012 and the founder of the antitrump pac. Good morning, good to see you. Thanks for having me. We have seen groups like yours fund ads like this one against trump. So far havent had much success. He is projected to take michigan which is a big prize today. Why do you think ads like this can work . We event run any ads in michigan. Where we have we have seen success. Finally over the last week, week and a half we have seen a lot more support come our way. We have seen other groups join the charge. We have been saying all along that, you know, this guy has to be exposed for the fraud he is. There have been lots of ads run nationally in the last ten days in states like florida, ohio which are up next week. The news media is catching on, starting to do their job and explore stories. I think people are starting to see it has no close. You and mitt romney and john mccain, the establishment with a lobbyist and the big money backers are fuelling the trump fever here. He can attack things as desperate attempts and rally the supporters more. I grew up in detroit, michigan, in a little threebedroom house. Donald trump grew up in a penthouse in manhattan driving in chauffeured limousines having president s at his weddings. Hes more establishment than me. My First Campaign was for pat robertson. I have not had a long career siding with the democrats and taking liberal positions on issues like donald trump has. Hes the one that should have to explain why he hasnt locked arms with republicans for the last several decades of his life while he had wealth and privilege and contributed to democrats while defrauding hardworking people. Ale whole host of things. The American People are starting to see the troops now. What are the cheep complaints you would have. Is it that hes no longer conservative enough or something bigger than his morals and values. Hes not a conservative. Its an issue important to primary voters. Hes not a brilliant businessman. Many of his businesses have fallen flat. All of us could have been successful if we inherited 200 millionle from our daddy. And he doesnt say it like it is. He says it like a trashtalking teenager. He says things that are abhorrent to people and they are troubled. If he were here he might feel you werent speaking the truth. Hes denied hes inherited 200 million. He said he was given 1 million by his father which he paid back. Its documented over and over again he got far more than that from his dad. To the request you are posing here, 20 million doesnt seem to be a huge expenditure. The Koch Brothers have an arsenalle of 400 million and have desided not to enter the race or campaign against trump as we work through this nomination process. What do you think of that . What difference would that have made . Certainly the more money spent telling the American People the truth about a guy thats had this whole media empire setting him up as something hes not would be helpful. We are doing what we can. We dont have the resources to bully and intimidate people. We have to do what we can with what we have. Already our efforts have highlighted a story that was posted in the Palm Beach Post this weekend about a guy defrauded by Trump University. Spent his life saving and has found out he has lou gehrigs disease. There are victims of trumps frauds and the American People should know about it. Shouldnt you offer a consensus, alternative candidate . Hasnt that been a problem here. Groups like yours not really coalesing around ted cruz who has a shot when it comes to the delegates to challenge donald trump and marco rubio is a distant third. Weve not coalescing behind everyone. Thats a candidates job to convince people that people should come their way. The reality is today donald trump would have to secure 54 of all of the remaining delegates to get to 1237. This is not his race by a long shot. It is not anybodys race. All of the candidates are in it. I expect john kasich will do well in ohio. Marco rubio will do well in florida. If that happens, Donald Trumps path to 1237 becomes impossible. Thats a real threat to him. Just on the question of rubio, what do you make of the rumor he may step out of the race . Its preposterous. A cnn reporter with one source reports this and now you guys are repeating it . They denied it strongly and immediately. The fact that you are covering it it is a failure of journalism. I mentioned it because its in the notes, one of the first things the researcher said you wanted to say. I didnt give any notes to your researcher. Forgive me. They must have made it up. Cnn covered that falsely. It is horrible journalism and everybody should stop talking about it now. Only one source for the story that jamie gangel told. Its a real failure of this era. Finally, how do you expect this to play out . Whats your prognosis for the divided party now and whats going to happen at the convention . I think donald trump will under perform tonight. I expect hell win michigan but not by the numbers that were expected. By this point in time people expected he would be running the tables and he wont. I expect hell lose ohio and florida next week which makes the path impossible. I expect we could see a scenario where there is a contested convention and somebody will emerge. Thanks for joining us. Thanks for having me. Katie is the founder of the antitrump pac our principles. Currently down 131 points on the dow. Of course there were only five ipos so far this year. Thats compared to around 24 in the same period last year. Is a comeback in sight . Bob pisani is on the store with more on that. The important thing is there are signs early on that the market might be bouncing back. Three months since the founder of renaissance experts here. Do you think we could be on the verge of making a comeback . First, the s p. Off of its low is up 10 so far. We have seen green shoots and the epo renaissance etf which tracks an index is up over 18 over the period. Its almost twice the return of the market. At least green shoots of the fact suggesting the market may open up. The market is up. Ipo market is outperforming. There are a bunch of companies, over 200 you told me ready to go public in the next months, early on. What are investors looking for from the new companies . Definitely solid Business Models. They have to have growth in a slow growth economy. We have to see secular growth. They cant be highly leveraged. We cant have this growth at all costs type of company. They have to be companies that are profitable or at least have some very strong Business Models for profitability. Lets talk about soul cycle. Why are they likely among the first to go public . The growth for the company is rapid. Profitable. This is a per effect profile for a company that ought to be able to get done in this market. Thats a consumer company. How about on the health care side. Tactile systems make compression therapy devices. Thats a Small Company but growing. They fit the criteria. Tactile is small. Fast growth, highly profitable. Reminds us of an open table that came out after the 0809. They can outperform significantly. This is why we look for these. In the financials. Thats on the bottom right side. Ex changes, equity and options exchanges. There is a lot of talk about consolidation about exchanges. 20 growth profitability. Financial technology is a good profile. One we expect to see. They make Optical Networking equipment a hot space. 200 million in sales. All profitability. How about leveraged buy outs. There will be a tougher time of it. If the growth rate is in a slow growth economy. You dont have problems paying your debts. Thats an issue. We have to talk about the unicorns worth a billion or more. Any likely candidates . One is palinee r technologies. They do a lot of Data Analytics out there. Are they good candidates now . We understand it is a highly profitable company. Of all the unicorns, there are so many that are growing but not earning money. A private valuation. Are they interested in going public . Somewhat mysterious with the government. For all the companies it will be facing the music of a discerning public market. Also private companies that are venture backed cannot stay private forever. They have to come out. We expect to see them tap the market coming up. Keep an eye on that and anything new well give you a call. The market holds up we could have ipos in the next couple of weeks. Le back to you. It would be a rush. Straight ahead, oil seeing a rally over the last month. Almost 25 in that time. The rally stalling. Not least as gold man says but in general the commodities come last. More on that after this quick break. S good morning, everyone. Here is your cnbc news update. Vice President Biden arriving in dubai. He met the ruler who is a United Arab Emirates Vice President and prime minister. Hell visit the west bank, israel and jordan before heading home. Iran launching Ballistic Missiles from silos in several areas. They claim to have missiles with a range capable of striking israeli and u. S. Military bases in the region. A jury awarding an emotional erin andrews 55 million in her lawsuit against a convicted stalker and a nashville hotel. They found Michael David barrett responsible for 51 of the blame and the nashville marriott 49 . Dramatic video showing a garbage truck falling off an interstate ramp in miami last month released by the florida highway patrol. The dash cam shows the truck crashed through a guardrail and fell nearly a hundred feet to the ground. The driver survived. Le thats the cnbc news update this hour. Simon . Down to you. My word, sue. Thank you. Commodity prices are gaining even as the volatility in oil continues. Metals like iron ore are up more than 40 year to date. Gold man out with a commodities note today. The commodity route isnt over. The steal making ingredient is destined without demands from top consumer china. Jo di gunsberg is the director at s p industries. Good morning. Good morning. We have seen big missouris. What do you make of whats going on . Two things. Mainly with oil. It could have bottomed. One is the Energy Stocks are now outperform ing the energy bonds by the most since october. That Shows Optimism in the market. There is an additional 20 return. Those things taken together are showing that oil may have bottomed. Everybody is mindful of what gold man said. The long term bears. It took them longer to rebalance and in the sense this oil is selfdefeating. It throws a lifeline to cash strapped producers in a desperate battle for survival. Would you agree with that as well. Fundamentally. Its hard to see the legs that the commodities rally can stand on. There is optimism. The chinese had hopes that maybe there will be more demand coming. Whether its for stock piling or growth is uncertain. There is hope that the opec and nonopec will come to agreement. It doesnt matter because the production cuts wont impact oil or the rest of the commodities space much unless u. S. Inventories are low. The market got really excited when they saw u. S. Counts pull back and inventory start to drop. Le that caused a spike, but is it sustainable . Thats a question thats valid. Do you have an answer . I wonder how the rest of what we are seeing in commodities, record moves in iron ore moves to multi month highs in copper as well. Its concerning that the u. S. Rigs can come on so fast, so quickly now with todays technology. Production can come on faster than it ever has in history. Which can put a cap on the Commodities Oil rally. If oil does spike then historically all other commodities move with it. Oil and copper rises. Silver captures most of the upside. When oil is up, silver is up. The industrials will be an area to focus on when energy rises. We talk about how it makes texas more competitive worldwide. Is the important thing to watch brent in the hopes that wti can keep up. The most important thing to watch is the ability to transport. This is one of the first natural gas exports earlier in the year. The Transportation Logistics makes the commodities global rather than just local. Its been a Global Benchmark but its been the more predominant oil in terms of world production. When we boil it down, whats the Bigger Picture here . Are you suggest iing. The stocks and bonds and commodities rising together. Whats the Bigger Picture here. Whats the Bigger Picture we have to determine that. The information is in the big picture where are we in the cycle. Stocks outperformed commodities now for eight straight years. Thats the longest in history. A sevenyear stretch in the 80s. On the Natural Resources they need in order to make goods the cycle could be switching. We see a fast bounce back in commodities. Faster than we have ever seen with 21 of 24 positives now. From only two positives in november. Nice to see you. Thanks for coming in. Well stick with energy here. One of the reasons investors like the Energy Companies are the dividends. Some big names have been cutt g cutting. Good morning, sarah. Thats the sacred cow when it comes to investments. How sacred are dividends these days. Tinder morgan is one. Marathon, noble, chesapeake and conco phillips. Exxons yield is 3. 5 . Che ron, a little bit under 5 . A lot of chatter as of late. Who will be the next to cut. The conversation you had really speaks to some of the issues. Nobody knows where oil price wills go now. Chevy ron was a candidate for this. Holding the analysts day to day saying it is not cutting. It is the number one priority and appears the company is sticking to the strategy. Free cash flow is how the Companies Pay free defensiivide. Its not a sustainable long term strategy. The question now is whats going to happen with oil prices. How quickly do they rebound and how sustainable are the Dividend Payments for the companies. Credit suisse said well see 50 oil by may. Barclays looking at 45 by the end of the year. What happens in asian markets, europe. These things have been swinging the market around and that has an impact. We could see a pop, a boost in demand. How much of that is going to eat from the glut that we have now. The supply glut is a problem here. And will producers start ramping up. Thats a point thats really central to the conversation. As the price goes up they will slam the price back down again. This could be a cyclical thing we have to watch. When it comes to the equity investment, the dividend is something to watch. Back to you. Thank you very much. When we come back, a rare interview with j. P. Morgans jing ulrich joining squawk alley live to talk about what she thinks about chinas internet sector and the startup economy. Dow down. Utility average at a 13month high. Whoa. Whats going on here . Oh hey allison. Im val, the orange money retirement squirrel from voya. Val from voya . Yeah, val from voya. Quick question, what are voya retirement squirrels doing in my house . Were putting away acorns. You know, to show the importance of saving for the future. So youre sort of like a Spokes Person . No, im more like a metaphor. Okay, a spokesmetaphor. No, im. Youre a spokesmetaphor. Yeah. Ok. See how voya can help you get organized at voya. Com. Good news for all you bulls out there. Seasonal trends point to a great march and april for stocks. A top technician explains why. More squawk on the street next. As you saw stocks mostly lower. The dow near the lows of the session following yesterdays gains. It will Utilities Sector as you can see there standing out as the only positive sector in the s p 500 up by nearly three quarters of a percent. This as treasury prices rise pushing twoyear, tenyear yields down to levels we event seen in some time over the past couple of weeks. Among the stocks leading the sector higher, energy names like wec energy, coned, Southern Company up by a percent or so. Utilities are the second best performing sector. When you see tenyear yields fall from 1 ppt 9 to 1. 8, 1. 81 you see the utilities catching it there. Back to you. Consumer staples as well. Thank you. When we come back, stocks take a leg lower today. This is the fist to climb for the dow and s p in the last six sessions. First down day. Down triple digits. The s p falling 1 . Oil down 3 . More on whats moving and why when we come back. Youre an at t Small Business expert . Sure am. My staff could use your help staying in touch with customers. At t can help you stay connected. Am i seeing double . No maam. Our at t buy one get one free makes it easier for your staff to send appointment reminders to your customers. And share promotions on social media . You know it now im seeing dollar signs. You should probably get your eyes checked. Good one babe. Optometry humor. Right now get up to 650 in credits to help you switch to at t. We believe in the power of active management. Management, by debating our research to find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. Lets get to Rick Santelli in chicago for this mornings exchange. Thanks simon. Theres a lot of College Basketball fans out there so thanks to john brady my special guest today were calling this one march madness but not necessarily because of College Basketball. You coined it. Why are you calling it march madness . Over the next seven trading sessions well see five Central Banks meeting beginning with the bank of canada and ending with the bank of england and what well see is an intensification of Monetary Policy divergence globally. They expect to take their policy rates even further in negative territory. The fed and bank of england are going to try their best to hold still. The bank of canada is waiting for physical stimulus. Ill tell you what, all of a sudden they want to embrace much bigger deficits. Thats right. Thats one of the themes that came out of the g20 meeting so these Central Bank Policy meetings are going to affirm what came out of the g20. Do you think that the banks in italy and the southern economies, are they healthy . Would you take a relatives Retirement Fund and recommend that they buy into those banks . No. The challenge for markets here and now is this. The ecb is going to cut rates but its not an Interest Rate problem in europe. Its a credit problem and the credit problem is not only on the sovereign side with different economies and one currency but its also in the credit side and specifically the commodity side. Large European Banks are at the pressure point. Theyre at the vortex of a relationship between commodity suppliers like a petrobras and others. Commodity end users like china and those that derrivitized commodities. Its going to act as an umbrella for healing process to take place on European Bank Balance Sheets. We all know that when you put easy money out there users are going to find a way to maximize their benefits. Whether its buying your own stock back and creating zero Economic Growth or in the case of the relationship between the banking, the sovereign wealth funds, the commodities, the suppliers, theres the proces r processo processors, theres no way to untangle them. Thats right but central bankers have taken it upon themselves when the only tool you have is a hammer, everything looks like a nail. The g20 meeting was interesting because there was a call for greater physical stimulus. In the United States we had zero physical stimulus and thats one of the reasons we think policy is stuck where it is. Owe within normal limits have a few seconds left. I moved into tv. Youre still in the business i was in and this business has shrunk. Transmission for all the policy these experiments are going to actually make it so the market respects anything Central Banks do. Your final comment. Thats exactly right. Given liquidity in the market. Given the overhang of dodd frank and the regulation a lot of traditional players are handcuffed to their desk and hampered by traditional liquidity. Its like Central Banks may have fixed the engine but they took it out of the car. The engine may be running but theres no car around it and they say it seems to be running. Transmission. They need the markets. We have to go were late. John brady, thank you. Rick santelli thank you very much. Lets show you the markets right now. The broader equity indices all lower. The s p and dow coming off of five days of winning breaking that trend. This is the second day in the row of underperformance. Apple the biggest Weight Energy also is a big part of the story here. So a lot of the stocks that are turned around on Short Covering rallies, notably chesapeake hurting today in the other direction. Down about 19 and of course at the same time pressure on high yield. With that, lets send it over to john forte and a look on whats coming up this morning. Our engine is reving on squawk alley. Tech versus trump. Are tech titans planning to take on the president ial candidate . Also well look at whats next for the ipo market. We have been in the midst of a drought there and well have the Deputy Director of the International Monetary fund. All of that and more coming up on squawk alley. Opportunities arent always obvious. Sometimes they just drop in. 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. Good morning. Squawk alley is live. Good tuesday morning. Welcome to squawk alley. Kayla is out today. Were joined by recodes managing editor. Its good to have you back. Stocks selling off after five days to the upside. Session lows right now. Dow is