Average of the three. European markets this morning, lets take a look. We are in the whoa. Gave us a few more there. Look at that. They added italy and spain. Getting a little creative there in the old production booth. Thanks, guys. Always wanted to know whats going on there. But the three we look at are all down and there is the 10year note yield at 1. 52. Crude hanging there above 42. It has for the last few days as you also see brent. Lets get to our road map this morning. And it starts with the earnings out from yesterday from disney, which topped estimates, making a billion dollar streaming bet as well. We will take a look at the companys video plan and hear what ceo bob igor has up his sleeve. Major Retail Stocks on the move after earnings. How the retailers are handling the pressure that keeps up in that industry. And Michael Phelps making history last night. We will go live to rio and get carl to bring us up to date on all the latest action, including that amazing and very close win in the 200 meter butterfly by mr. Phelps. Lets start off with disney, shares are set to open a bit lower, even though earnings and revenues were ahead of estimates the company revealing plans for a new espn streaming service, saying it also will pay a billion dollars for what would be a 33 stake in bamtech, the streaming unit of Major League Baseball which powers a lot of streaming from other content providers. Ceo bob igor talked about the move yesterday on closing bell. We think its a good investment. We love the business model. We think that in todays world, having the ability to stream on a scale basis, live sports and live programming, is a competitive advantage and something necessary. We love the user interface. So overall, we look at it as an investment but as a partner, as a part owner and ultimately as a majority owner, we feel it gives us an ability to jump start not only espn, but our other business as well. You know, we havent talked a lot about its funny, people see Major League Baseball tag on videos you watch and wait a second, im not watching baseball. Bob bowman who created a real business there. Always has. I remember from the itt days. Oh, man. I remember things used to get testy between me and mr. Bowman. But back when they were trying to buy starwood. Exactly. Or hilton actually. Hilton. No starwood. Well, anyway who can remember. All we know is bob bowman is not a guys to mess with. And they sell 33 to disney. Back to another bob, thats that being igor, whats your take on the quarter, jim . Media networks responsible for 2. 37 billion of a total of 4. 4 bill. That means that espn is still the driver here. I know bob igor doesnt want to hear that but theres a moment on the Conference Call, this alexa from jpmorgan, drops down the duck in the room, that all these things, the hulu, okay, the direct tv deal with at t, the bamtech, make her more worried in terms of the notable shift away from linear tv. David, im going to hand it over to you, because you know how much better linear tv is for profit margin. Everything else is right. The subfees from espn are still the driver of a great deal of profitability at disney, not to take away from the parks by the way which were very strong, not to take away from the movie studio, which weve known and we have spent so much time complimenting over the last year has been a great Profit Center but espn and the subfees are the big deal. The question as to over what period of time will the bundle of video programming that goes to the home come apart so more and more people are able to avail themselves of streaming services that include enough networks at a price point they want, how quickly will that happen and undermine the ability of espn to get those kinds of fees, are the key questions. But theyre moving in a direction of saying hey, were going to be there, were going to be on the streaming services, with at t directtv streaming package were going to have our own offerings out there and figure out a way. And monetize content that they basically have been sitting on. They cant because they dont have enough networks to do it. And it will be done a la carte. Movies, 766 million versus 472 million operating profit, its so big but not so big versus the number i gave you in Media Networks. Advertising in Media Networks up 5 . Not enough because of the bundle and the 7 plus per subscriber. David, i think even if they can get 2 growth in Media Networks from the initiative we will be excited about the stock again. Why that is, it sells at 16 times earnings. It was at 20 times earnings a year ago. Yes. When you and i sat here and did have mr. Igor on as a guest, the quarter where the first concerns about espn really came up in terms of sum erosion of Subscriber Base which were not really seeing great signs of right now. February 1 of 2011, espn media put out a release that said they have 100 million subscribers, trumpeted. They dont talk about those numbers anymore. Nielsen rate is 88 million, a dropoff. What you have is the footrace between new initiatives and this decline in the traditional linear that is so important. It just obscures shanghai disney, obscures the turn in hong kong, quite impressive, it obscures the 29 movies that have each made 800 million. Amazing. David, theyre not as big. Now, they still i mean, now maybe im missing the play here, mrs. Lincoln, 12 Earnings Growth. And you should pay maybe 16 times. But david, do you know what multiple was when they were at 100 million subs . Over 20, right. Or was it . 16. Right where we are right now. Now we have 88. Right. But theme parks are much better and movies are much more predictab predictable. They will never give them credit for predictability in movieps. They cant believe it could continue. I dont know. This is a fundamental existential issue, they call it the delta, the rate of change of ken matter and you can go through that whole Conference Call and theyre not talking about finding dory or captain america civil war. Theyre talking about the opaque espn numbers and where they really are versus all these new a la carte menu. Bob igor is very confident both in the interview with Julia Boorstin where he says this is going to jump start espn and i cant frankly cant spend enough time on this. It is the fund nature, can they outrun the decline in espn. Thats the larger question for so many of these content companies at this point, all of which, of course, have told me they will be on every streaming service because they are a must have. And its monetization. You cant miss that. That wont be the case. Were going to talk more about disney around the open and see how that stock moves. I wish i werent so i wish i watched phelps. All this Conference Call. Because i had to keep rereading it. Thats sad. No. Thats what we do. It is, but you can take a few minutes. Really, hes very fast, phelps. He doesnt take a lot of your time to go up and down the pool a few times. How do i get to yelp and how good lets get to the retailers because you spend time around them. We have to go. Michael kors shares sliding premarket after posting a larger than expected drop in Comparable Store sales and weak outlook given for the rest of the year. You can see the stock down over 3 . Did you read the wording in the release . I did actually. Geez, talking just point out saying, the mall, the mall traffic, is just hurting them. But mall traffic is not hurting ralph lauryn. Ralph lauren set to open higher after First Quarter earnings and revenues were ahead of estimates. The company did report a loss of 22 million. Remember this stock got crushed when they kind of reset expectations some time back last quarter. That was larson coming in from he came in from old navy where people dismiss and sniff at the turn that he engineered there. This Way Forward Program he has put in, is for real. This is a major turn. And i know the stock is up, i never recommend people chase an up plus 6 stock, but david, i believe in larson said it on mad money this confirms many of the changes hes made. What did you like about the turn and changes made at ralph lauren . I think the guy came in and basically, a lot is just you can come in and do things basic supply chain. You can smooth sailing, what has he been doing . Pair apparel landscape changed. You have to be faster in your fashion. H and m turn around their merchandise so fast, but there had been a 15month lead time at ralph lauren versus an industry average of 6 to 12 months. He sold this as a major disadvantage. He is turning around that lead time to be more in keeping with what people see in fashion now. Way forward. This is about seeing whats in these other stores. Zaras numbers despite their mall presence, have been so much better. Why . Because theyre quick. Fast fashion. Ralph lauren is going to be quick because this man understands supply chain and he has an eye. Speaking of quick, weve got a few swimmers who swim for the United States team who are pretty darn quick themselves. Lets get to rio, huge night for Michael Phelps, Katie Ledecky, team usa overall. Theres carl and he brings us up to date with the latest. Good morning, carl. Hey, good morning, david. Well talk about phelps later. Obviously a huge story here in rio, but Katie Ledecky is another one this morning, wins the 200 meter freestyle, her second gold, and her third medal of the games. She continues tonight with a freestyle relay. Shell do a freestyle on friday. But this was the toughest challenge for her and her path to win four golds and five overalls at these games and talked about that last night. When racing the world record holder in the event and someone who broke a world record in the meet and had a fantastic meet i knew it was going to be a tough race. One thing were watching is the weather, theyve canceled rowing today for the second time since the games began. They canceled them on day two because of high winds, fears of capsizing. The serbians sank on day one and officials determined they did not want that to happen again. Team gb, Great Britain, had to bail some water out of the boats. That will be a concern for the next couple days. Soccer, a big story for the u. S. A very awkward draw with colombia at 22. Hope solo allows a goal early on, very uncharacteristic of her, the first goal shes allowed at these games. They lose the lead in the 90th minute but go on to the quarterfinals and play sweden on friday. By the way, two young stars mallory pugh and crystal dunn scored their first olympic golds ever. 10 gold. We added one in the past few minutes in womens cycling, a lot more coming up today as we look to more diving, more swimming, Katie Ledecky again tonight in the relay, so an exciting day five. We will see what it brings. Yeah. Now ledecky doesnt swim the 800 then until when, carl . Friday. Friday. Okay. So tonight is just the relay. The swimming has been incredible. Thats right. Incredible. As has the of course. I have to say, as you know, its probably the best spectator sport here until we get to track and field, next week. There is, you know, with gymnastics lots of things going on. Hard to focus. But swimming you know where to look. Yeah. I know. That le clos guy kept looking at phelps and didnt help. I remember when we used to go into these olympics and it was russia. We used to be it used to be east german, these countries, chain china. We were by this point a second place, third place. Is it the drop off of other countries or have we done something dominant in these country that make it so the other countries have become thats a good question. Times has a good piece about womens gymnastics, for instance. Remember karolyi, now its martha karolyi, the way they changed the basics of training how they are housed the activities they do together has really solidified the teamwork, especially in team competition, and thats why you can argue womens gymnastics the most dominant force in the world. Its incredible. Amazing to watch. We will check in with you later. Carl quintanilla in rio. Coming up here, perigo shares hammered in the premarket, lowered it guidance. Whats going on there. Also ahead, carl will talk to the Vice President of brazil at the olympics in rio. Lets give you another look at futures as were about 18 minutes or so from the opening bell. More squawk on the street after this. Miles per hour. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. At ally bank, no branches equals great rates. Its a fact. Kind of like grandkids equals free tech support. Oh, look at you, so great to see you none of this works. Come on in. Im just a guy who wants to buy tha keeping the power lines clear,my job to protect public safety, while also protecting the environment. The Natural World is a beautiful thing, the work that we do helps us protect it. Public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. We want to keep the power on for our customers. We want to keep our community safe. This is our community, this is where we live. We need to make sure that we have a beautiful place for our children to live. Together, were building a better california. It is shaping up to be a really day for shares of perrigo. The stock is down sharply this after the Company Announced that its earnings were below expectations and more importantly, lower guidance for the remainder of this year. The companys ceo blaming competition and price erosion in the prescription business. Im looking now and you guys see it here, i mean the stock down over 12 , 83 bucks. Disappointed, says new ceo John Hendrickson to announce the folg, critical review of our business, changing adjusted eps guidance for 2016, majority due to price erosion, fluid dynamics affecting the pharmaceutical or the prescription business, excuse me in addition revising our guidance on lower performance expectations for the segment as they implement a transformmational organizational change there and talking about 685 a share to 715 a share in earnings for this year. I found this disturbing. And particularly because of the words you used, critical review. Implies it was not this quarter. Im not saying they necessarily did a lookback but you know who ran the company before this man. Joe papa ran the company, exited rather quickly. And i would point out very soon after fighting off and boy, perrigo shareholders must be wondering what they were thinking. Amazing as it was and i pointed out it was amazing, they said no and knew they were taking a lower stock price with the promise of a higher stock price over time. 200. That does not reflect his character. It was a bad call and not taking and then he left. 2. 3 times each share and 75 bucks. Do the math at home, pull up myl, 50 stock, multiply that by 2. 3 and add 75 bucks and get where perrigo would have been or was worth 180 plus. Right. Now worth 80 something. Yeah. I mean this is devastating situation. Is there a read through david, to say that well, mr. Papa is now at valiant which came with extraordinarily strong second half forecast. That stock yesterday, just kept moving higher. Powering higher no very aggressive forecast very aggressive forecast. Stymied some of the short sellers. When you say very aggressive forecast knowing you as i do, are you implying in some way too aggressive as perrigos forecast previously, which has now been revised dramatically lower . I once met with an executive in 1980 actually, geez, really date myself, 1994, who told me about the notion of und promising and over delivering. Consumer Package Goods ceo. I will not reveal his name but he believed in something called [ inaudible ] i was astonnished to hear this. Jo papa does not believe in under promise. He promises high. What im looking at perrigo was a promise that was, lets just say that raises eyebrows in light of the perrigo report. Another stock well be watching closely at the open, of course, perrigo down sharply. Up next, though, lets get jims mad dash and count you down to the opening bell. A look at futures for those of you who havent had enough look at the futures. We like to give them to you time and again. Curious how the italy and spanish markets are doing, guys . Browse them to us earlier. More squawk on the street straight ahead. , social updates. We call it dark data. 80 is invisible to most businesses. The ibm cloud has tools that can help see dark data and put it to work. Hello, my name is watson. Working with watson in the ibm cloud, we can help an Energy Company predict pipeline corrosion. And help a startup to use social data to predict market trends. Now businesses can get more out of their data. Thats what the ibm cloud is built for. Now businesses can get more out of their data. So i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices. The markets hot. Sync your platform on any device with thinkorswim. Only at td ameritrade. All right. The mad dash coming up. What do we got, about 7 minutes before the opening bell. Want to talk about your buddy jeremy stoppelman. You cant be stoppled. I like it when good guys win. He has lan eny, the cfo, longtime internet analyst, a fabulous guy, put together an amazing quarter. It had accelerating Revenue Growth. A true turn quarter the mobile app, 23 Million People working what i would emphasize, this is a new term you heard this quarter, point of intent. You want to be the company that has the at the point of intent on your mobile what you might want to do. What the advertisers want. Tremendous for the health and s