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tv   Squawk on the Street  CNBC  September 3, 2015 9:00am-11:01am EDT

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terrible. the lorax is going to get you. >> thank you, guys, both for being here. scott, thank you and welcome back from spain. it has been a pleasure. we hope you join us back here tomorrow. don't forget, we have the jobs report that is coming up. the dow futures are up almost 100 points. right now, it is time for "squawk on the street." we'll see you tomorrow. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange. david faber is off. pre-market getting a little squeeze courtesy of mario draghi who says downside risks have emerged, cutting gdp forecast. chai in being closed overnight doesn't hurt. a lot to look at today. 10-year at 2.154. oil is relatively steady.
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markets poised to open higher. comments getting a lot of attention. jack lew telling steve liesman, we will hold china accountable. twitter's board meeting is today in new york. we will get answers on the permanent ceo role. details of nut tesla x and the lower costs on the model three that will not start production until 2017. draghi holding a news conference. he says asset purchases going smoothly. adding the plans to fully implement them. they see a slower increase in inflation lowering their growth request through 2015. 1.4, 1.7, 1.8. now, they are talking about, can we change the size or duration of their plan? >> they are crushing europe. the dollar is soaring. this is a level that american exporters obviously are saying, are you kidding me. they have to get the euro down
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to be able to maintain growth. this is really great for germany. they don't talk about -- maybe they are talking about the immigration situation. obviously, germany is going to be able to build all the housing that it says it is going to. that could be expansive for the german budget. at the same time, it is going to -- this euro this week is not what you want if you are a major seller of goods into europe. >> if you are a u.s. equity buyer who wants a weaker dollar -- >> it hurts you. i was doing a lot of work on general motors. maybe the 5% yield wasn't as good. this is the opposite of what you want. if the chinese devalue again, which i think they may after they come back, they are still not where they have to be. the dollar will go back into the super strong mode that is going to make it so next quarter is going to require more estimates. >> your view the dollar may have
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peaked for the year. >> the pmis are great. not great, 54. >> i thought draghi might say, stay the course. last time they made the forecast, oil was higher. he is a good man for europe. in terms of what we need in this country, the idea our futures go up is once again the pajama game. the guys in the pajamas look at algorithm saying europe is up. this game is played endlessly. it is wrong. those people are not making a lot of money. a lot of hedge funds around doing well because they are playing the pajama game. >> draghi's birthday today. the pmi is up from the preliminary number. germany, 55. france coming in a little bit. retail sales were a little bit better. >> you want to be in the european bristol-myers. i like procter & gamble, because it yields so much. this is good news for unilever.
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they will not stop until they take as many sales from our companies. >> you do not believe it is a malt ter of traders here trying to live vicariously through more accommodation in europe? >> no i think it is traders who are wrong. they can really be wrong today because they don't have china to be wrong over. they are not wrong in two but noenl one. >> when i say they are wrong, look at the results. it is not like someone has this huge bet and it is working. you don't hear about that. what i do find amazing is that you got up in the morning and didn't see the chinese government have to prop up stocks. that's what they do. this military holiday, this memorial holiday is taking china off the front page for a couple of seconds, and, boy, is that positive? >> we will keep our eye on that. ahead of this weekend's g-20 meeting, the imf urging the world central bank not to urge
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rates. they say they are all posing risk to the economy. treasury secretary lieu speaking out about china's currency policies. this is what he told steve liesman in an exclusive interview. >> there is an economic and political reality to things like exchange rates. they need to understand that they signal their intentions by the actions they take and the way they announce them. they have to be very clear that they are continuing to move in a positive direction and we are going to hold them accountable. >> how are we going to do that? >> beats the heck out of me. we hold them accountable, what, for all the pollution they send us. hold them account for all the cybersecurity. hold them accountable for the fact that they don't really care about anybody else other than keeping their growth going. hold them accountable for cutting soldiers but moving up more into hardware in the navy i don't know how we hold china accountable. i've never seen us hold china sl
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accountable. we lost china in the 40s and 50s. other than nixon opening china, there hasn't been a lot of good news out of china for the united states. >> you might see futures come off of the highs. draghi saying that they did not discuss detail of qe modification. >> we want to see europe stronger but not because of the euro getting weaker. we want to see it stronger because internally, they are starting to do some expansion. this is why this german human rights issue is far more important than people realize. >> the refugee crisis. >> if germany takes the people in, they have a very accommodating policy. not for money, for peep. this would be good for europe in terms of the amount of money germany has to spend. i'm not talking about civil rights and how you feel about it.
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they have to put the people somewhere. germany has always been an accommodating country when it comes to people who are in trouble. >> certainly, this video out of budapest. >> this is going to change europe policy. we are overlooking a crisis that germany will address and the conservatives will fold. >> jerry said this image of this syrian boy who drowned and led the nightly news last night is as iconic as the man in front of the tianamen square tank. >> i think he is dead right. i think we underplay it. the hungary train strike. they shut that down. i was there last year. that is a major hub. what's going on to me is t there are decisions being made at the highest level about whether to take these immigrants in. if they do that, they have to print money. the austerity issue is in place on the immigrant issue.
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you have to overlay that you can't be as austere if you are going to take people in. people have to watch that. >> it might seem tangential to what we do here. >> germany has fought everybody for expansion and is based with a dilemma that makes it so they can't be austere. >> twitter is holding a board meeting this morning. a watch is on to see if the company will name a permanent ceo. cow-founder, jack dorsey, has been serving as interim for two months. shares down 20%, $2 above the 2013 ipo price. he tweeted a picture of him at jeno's barber shop trimming his beard yesterday. >> nice. i do believe that -- sometimes you have an axe. i remember this when i was at goldman. rob peck is the axe. he hates it at 50.
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he likes it mid-20's. who are we to bet against rob beck? i say that rob peck is going to be right. feeling better because of peck, my charitable trust owns it. a bushel of ceos and a dose of robert peck. >> speaking of which, going into tomorrow, we have the chinese pmis for the week done. we are getting ecb out of the way. we have a jobs number tomorrow. it is the friday before labor day and there is a sense among some that a hero in a light market. >> my hope is that mr. bulldozer is enjoying vacation somewhere, ozarks, st. louis. hilton head, wherever it is. as long as it doesn't have wireless and there are no microphones. we are not going to hear from a good jobs number that he is sang quin
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sanguine pops up anywhere, i am paying for that key number. that's bullard being sanguine about whatever happens. >> you want a day free of fed tape bombs. >> i am tired. the interesting thing about the fed is that they are saying, they are going to be mindful of market tumult and then they cause the tumult. they are causing the tumult. that's a really great thing. you had them saying, listen, we have to be aware of market tumult. then, you had bullard. interviewing syria satellite. maybe this guy is going to go into a ham radio. who knows where this guy could pop up? >> did you you hear fisher on? >> he said he wants to tighten. he truly a nice man. >> dick fisher on squawk this morning said that if the fed declined to hike, that shows that the markets are in control and that's obviously it. >> he has wanted to hike forever. we are very bad. we had robert chiller on calling the market dangerous. i listened to that show and i
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just said, you know what, i want to go back to bed. then, i realized, there is no place that's safe from people who have a microphone, no place. mr. fisher, professor shiller and forward. treat dwroe, tthe trio. these guys would be fabulous if they took a vacation to machu picchu. we flew over denali. my doubt s >> tesla ceo tweeting a message being well-received on wall street. we'll find out why. we will keep our eye on the ecpb, which continues as we speak.
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shares of tesla rising in the premarket. the electric carmaker announcing plans to deliver the first model x crossover vehicles on september 29th. tesla's ceo, elon musk, tweeted, model 3, our smaller and lower cost sedan will start production
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in about two years. fully operational gig ga factory needed. $35,000 will get you a car with a tesla logo on it. >> look, i have said it over and over again. this is a stock car situation, stock car. you like the car, you buy the stock. i want to look at that car. i want to look at that 35,000. >> really? >> yeah, i really do. i am going to go over to the mall as soon as it is available and take a look at it. i made turn my 2006 car in for. >> so you don't see a problem with demand? >> that price point is what i've been waiting for. north america told me they didn't think they could get to this price point. when it does, they want to be in that market. people might say, hold it. wait a second. maybe the price point is going to be solo that i will commit. again, i am not saying buy tesla
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stock. i test drove the others. i have to say, i thought they were above my price point versus what i need. not this. >> there have been a few things that have frustrated the shorts here. obviously, musk, buying some stocks. there is the consumer reports that broke the bank. you still call it a cult stock. >> it is a cult stock. cult stocks can last for a long time. a lot of people were emboldened by amazon, they reveal they are making a huge amount of money. i think musk is a brilliant man. no denying that. i have to tell you, this is a cold stock. you buy it, because you think in 2020, i was on a radio show with my friend, jerome levin, he has a show. he is from detroit. he used to be at the "new york times." he was saying, what do you think about the 2020 situation with tesla? i said, i can't go out that far for tesla. i go out that far for boeing.
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you can buy it with the idea someone else is going to buy the stock. i would call it profitable. when they see this model, they are going to be impressed with that price. >> washington post has a big piece on energy storage in this country, growing at six fold, q-2, over q-1. >> marcellus from utica, pennsylvania and ohio, the gas price is 95 cents. the storage, we only need about 50% of the storage that's going up right now. it is really kind of hard to mix and match where what's preelly happening in oil in this country. i have to tell you, there is too much pipe for oil, too much storage for oil. not enough for nat gas. people are going to start to differentiating these.
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>> it does bring us to burton upgraded. slumber upgraded at citi. >> this allows most of the oil companies to make really good money at 50. we are not at 50. i don't know whether they are trying to get a jump on 60, 70. i see we are in a lower, longer but that we saw the lows when everyone got bearish at 38. my technical people. it is financial, they are saying over and over again, if you got to 38, it would hold. i don't think oil is buy or sell. i don't think these stocks are buy or sell. i do recognize that halliburton has this frac now, pay later strategy is working. >> we have an iran deal that is not in the books but getting there. >> slumberje, it is a fabulous company. halliburton, we don't know what the government is going to do. the fact that oil did not go down on that inventory number shows me there is some equill b
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equilibrium coming to the market. the saudis, not attain believe. when we come back, we'll get cramer's mad dash. one more look at the market. futures in the green by about 90 points on the dow. more "squawk on the street." back in a minute.
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i could talk costly monthly sales and this general mills deal but medtronic is the star. they were the last to do the inversion. they bought covidian. the deal is really paying off. medtronic is mid to high single digit for all the different cardiovascular devices i was looking for. saint jude, also, well run and many rumors of that. >> it is very good, medtronic. this stock could go higher. >> joy global is a disaster. they are talking about their
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customers having a lockdown on spending. surface mining equipment sales, down 53%. the bookings are down 31%. what is this? this is iron ore and coal. read through caterpillar. they bought their principal competitor. this is china not being good and iron or plummeting and coal, buy, buy to coal. >> xwh ywhen you talk about all wood that's been chopped, not enough. >> great manufacturer. when you are refer to iron or and cole, iron ore is brazil and coal is our government. we are not going to use coal in this country. it is going away. it is going away around the
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world. when you read global warming articles, think joy, joyless. the only joy we are going to be talking about is the joy that procter & gamble has. there, i think the yield is going to go to 4. >> no one has ever said you can be bullish on mining, joy. >> no, i don't like freeport or brazil. brazil is really what i'm most worried about. seventh largest economy. it is a disaster. really need political change there. >> just about 5:30 until the opening bell. we'll get that in just a minute. don't go away. >> so many stocks down and out. you have to ask yourself, why does anyone feel good about this market
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you are watching cnbc, squawk on the street. a day where there is relative calm. china closed overnight. japan was up slightly. hong kong closed. india was up. the ecb presser is finishing as we speak.
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really, now, jim, it is about whether you believe tomorrow's jobs numbers are going to be really good or really bad. a stronlg number will bring out people from the fed who will say things on a sleepy friday afternoon that will hurt the market very badly. i want people to know that ahead of time. if you have a one-two punch of a strong jobs number and fed people not being able to resist speaking. >> what are you worried about them saying? >> that's it. there is nothing left. we are going to tighten. >> then, on tuesday, we come in and china is down huge because they devalued again and the chinese stock market doesn't hold 3,000 and you have that same situation that we were in two weeks ago, that's what i'm most concerned about. tumult paused by the fed accentuated by the settling the chinese throw on our market because they are decelerating from their growth rate so quickly. this is the one-two punch we have to worry about. it is the emerging markets that
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will be cause in the real squeeze. i focus on brazil. it is a company you don't want to have go belly up. it is an important country. >> your take has been? we have talked about your cheat sheet this week, your patience in watching these names retrace. i'm guessing you think there will be more opportunities? >> yes, that's how i want to put it. se celgen is back up to 120. i look at general mills and the deal they did. a green giant, they take the $700 million and buy back stock and general mills remains a go-to stock for me. that's what i'm looking at. is it exciting? i don't need excitement right now. i have all the excitement in my life i need. not a single more do i need.
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>> let's go to the opening bell and get a look at the s&p. >> crh medical corporation. crhm celebrating the company's new listing on the nyc market. celebration of the ipo which occurred on july 30th. a lot of retail names today, jim i guess, if you stick around long enough, you will see to see costco go negative. >> costco, they had gasoline, really bad for them. they do have a lot of foreign. i like to read through on hard goods. it confirms what best buy says. they are doing very well. the company that's a disaster is 5 below with a conference call. open rebellion telling, do you guys care about comparable store sales.
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an indictment saying you don't think about whether it matters. it sure does. she said, that's not true. they did a circular they pulled during the month and they tried to do digital media, bla, bla, bla, bla, bla. i tried to get behind these guys. i can't. it was a mistake to think i could get behind them. they are too glib. they have to focus. lululemon gets an initiation. >> second guy in a row. i am hearing all positive things about lulu. they have a currency issue in canada. i think their numbers are going to be very good. own this for earnings, not for takeover. >> campbell, though, you mentioned earlier. results were mixed. 4 x pressure showing itself. it is the second biggest loser behind joy. >> i think they come back. they did have 1% organic growth.
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the headline numbers are so horrendous. you don't want to touch it. this stock has had a habit of bouncing back. this is where it was in the bad days of last week. i believe they will catch a bid down 3%. >> go-pro, bad again. these growth stocks that have lost their allure. whether they lose their allure, they realize, sorry about my philadelphia accident. it is allure. gasoline, allure, towel rhymes with owl. murray christmas is not a guy's name but i can't help myself. how do you get rid of that? i'm 60. i speak the language. >> al brands, august comp, 6:00 versus estimate 2-2. that's going to be one of your big gainers of the morning. >> could have some gainers.
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planet fitness by the way, i like that one. they did not have a good afterhours session last night. >> that's a cash machine. i know there are some issues about, can you stain that growth? they had 7% comp growth? i don't know. they know what they are doing. that's a well-run outfit. this is an inexpensive place to do business to get in shape. health and wellness, whether it be underarmor, planet fitness, the thesis remains. by the way, you know what else remains. if you look at lynette, lci, they make an acquisition. they buy a company that's a generic, kremer and the stock goes up big. that's a sign that the market likes these acquisitions again. we are returning to what the big selloff was. don't get complacent. this is what the world looks like when china shuts down and the skies are blue.
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typically, the skies aren't blue in china and the economy is varied. >> netflix is notably weaker. >> my friends at citron who are very nice guys. >> time to short, they say. >> netflix, remember, was at 95 in that great quarter. i think at the end, it represents a great bargain. that's what matters. they are not in china yet. crouching tiger, hidden dragon coming next year. if you sell netflix, remember, you are selling a great secular growth story that can have a larger market cap. in this kind of a market, a citron will be right. trying to find a bottom. in a bull market, fabulous stocks. in a bear market, which is where we kind of are, not so great. >> piper upgrades ebay to neutral on the 20th anniversary. >> i don't know. the split is good.
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charitable trust owns pay paul. it has just been so-so. >> a lot of discussion of apple. we have had tim cook at this sisco event. we have this partnership with ibm. might get an ipad pro next week. today, "usa today" says their move into the enterprise is happening now. >> what was so undervalued was that chuck robbins, john chambers on the stage. john and chuck are a great combo as john moves on to some of the things he is doing. i know there are some press reports that john chambers is running cisco. no. no. take a look at the big dhangs chu changes that chuck robbins has done. i was a big packer of john but i think this chuck robbins is coming on. that deal where tim cook leaves apple and speaks at siscisco in front of 19,000 of the faithful. i would be careful undervaluing either. cisco and apple are inexpensive
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but that does not make for buyers in this particular market. >> the hurdle on the street is cautious on the banks. they say this quarter has been quiet for investment banking and that a lot of the coming quarter is going to rely on mna and trading revenue. >> i come back to this inexpensive notion if the chinese sell 30-year paper and every one of their bonds, as we think they will, because they have 1.2 trillion and they need the reserves back, you are going to get the so-called steeping. i really hate to use the terms. sydney homer wrote a whole book about the term. it is called, "inside the yield curve." the banks do better keeping the short rates down and moving the longer rates up. you will be regret full that you sold the banks. >> does the possibility of a twitter announcement. i'm not saying that is going to come at the board meeting about you it could. >> i like the things i am seeing on twitter, the site. we are one month away from the
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big changes that i'm hoping that i'm going to use a term that i don't use lightly. my friend, an nonathony nodo is. i am unapologetic about liking the guy. he is not necessarily a nice guy. >> we know that the trust holds it. >> jack morris, the research director, i think jack is very tired of it. this is when you don't tire of twitter. i want twitter. if they deliver the numbers, the expectations are so low. i am not saying rob peck at suntrust. i will thank him after this and give him credit. i am using his research. it is not invented here. i don't need to be the axe. what they are saying behind the
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scenes about the new things and being curated and having humans involved. that will make twitter to be more of your newspaper that i always thought it could be one day. >> speaking of the trust, i did notice a new position in m mondolese. >> when you can buy an international food stock at a price well below. you have try yion and pershing square. this is to me the one to watch. the activists here are brilliant people who can make things happen. go back to my interview with ackman and pelts. this he get in like 3-g gets in. they don't stop. they are not your worst
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nightmare. really smart people welcome people on. >> when carl icahn knocks on the door and sheri opens the door, a couple of smart guys. i will put you on the board. i like that. i think that mondelez is going to be a growth-driven, not just margin-driven stock. he has a lot of good ideas about growth and margin. that's the one to own in the group i think does well even on chinese turmoil and fed speak. >> joy, is by far the biggest lagger down the s&p. >> that's just a tough industry. i think when rates come down here, you still get this housing thesis. that's still working. i like everything that goes in the aisle at home depot and home depot. >> cat, the only dow component
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in the red. >> cat, that makes sense. remember, a lot of xcomplacency here today. is this is what happens when china shuts down for military parade. it is like wow. that's great. then, china opens. it is bad. >> the 3,000 level, great movie called bojest. in it, they pop up dead soldiers. every man, dead or alive, must do his part. that's china right now. zindernuf. >> google it, sergeant markoff is the head of china. how about the poa, the people's liberation army. the more things change, the more they stay the same. where are we going to put the poa guys that are being cut? are they going to make more
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steel? >> 300,000 troops they are cutting. >> where are we going to put them? >> on the five chinese navy ships. >> that's great. they have taken over islands. china has gone rogue in my book. they have gone rogue. a lot of other people say, no. they have to cut down on corruption. as my nephew and head writer points out, corruption is the engine of the economy. because that's how you get things going. i am not always a fan of china. see the chinese buy program. when the stocks go down really badly, this ey hold it. that's not capitalism. it is some sort of late stage capitalism that mark has talked about. >> tough transition to make. let's get to bob pisani and see what's moving on the floor here. >> highs for the morning. everything is up two-thirds of a
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point. we are perceived to be dovish comments by gradraghi. germy moved to the up side. it put up germany. it didn't change the numbers on monetary easing at all. the important thing, the market perceived as dovish. germany is an export economy. anything there received dovish is going to help germany overall. sectors here in the u.s., everything is up fractionally. nine out of ten sectors on the up side. everything is up 2/3 of a percentage. i am particularly happy to see banks up. they are coming back. the usually names. most of the guys are down, 2%, 3%, 4%, still even with the gains we have had yesterday and today. this is one group that was a leadership group that fell apart
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rather dramatically. in the meantime, keep an eye on the dollar. the dollar index is at the highest level since the current volatility began a couple of weeks ago. the impact on u.s. businesses is what you want to watch here. speaking of the impact on the dollar on u.s. businesses, i know you spent a lot of time on joy global. here are the numbers. they are catastrophic as jim mentioned. down 31%. the net sales down 10%. i want to point out. the reason i'm bringing up joy is on the dollar. net sales are 10% down. if you eliminate the dollar, if you do it in constant currencies, net sales were only down 4%. this is still really bad. my point here is that the dollar is really killing people. when you see the dollar moving up, you want to be concerned. you see another leg down and that's when china started falling apart here. finally, there is a very big article today. the big article everybody is talking about is the article on
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the fd where lee on cooperman's omega fund noted it was down. he felt risk parody funds were partly responsible. i would be careful about jumping on this bandwagon that some other person's investment style is responsible for the volatility. so what risk parody attempts to do is have a portfolio aimed at a certain level of vol hit. if it is more volatile, you reduce parts of the portfolio. this is just an investment style. the other point i would make is that risk parody funds where all of the sudden they are getting attention, not a huge part of the markets. >> i am aware that there is leverage involved in here as
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well. my point is, every time you get some kind of move, somebody else blames somebody. i am not saying it is trivial or irrelevant. work on china and the federal reserve. oil would help a little bit. right now, near the highs for the day. dow is up 102 points. guys, back to you. >> bob pisani. let's check in with rick santelli at the cme. hey, rick. >> hey, carl. today is a great day if you are a student of the markets, because you get to give everybody an "f." how many times have you heard what's going on with the markets isn't really economy? what are they talking about today? it affects balance sheets and stock prices. it is real. it effects the economy. so what happened today. look into the euro versus the
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dollar. i don't know that anything major fundamentally happened. mario draghi went over to the wall and turned over the hamster wheel and everything is lighting up. two days are important. you really went through the rains yesterday. look at the two-day of the euro versus the yen. if you look at the you'euro ver the rupe? you don't upset the trend. whether it is dollar index or the u.k. big economy, the euro zone big economy, the u.s. big economy, these three currencies are in a little round kmart pool and they keep bumping against the wall. it doesn't tell you as much as you think. other than now mr. draghi gave europe advantage, like in
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tennis. advantage euro, weak euro. it is a trade issue. two day on the bunds. they have reversed. maybe they have direction again. the switch is on. look at a two-day 10 and the two-day 30. they didn't really break yesterday's range. this goes to the ongoing story that the u.s. fixed income market is doing something a little different. you need to pay attention. normally, it is flattening when you are expecting the fed. i bet against the fed for all of 2015. in mid 14, i hope i lose. i tell you what, i think i may lose. i central bankers in this country are a bit nervous around dead man's curve in the next 10 to 12 months and what that type of global economy will look like. you will see that in the recent steepening. carl and the gang, back to you. >> two weeks from today, a big
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run. crude oil is almost almost $1. >> good morning to you, carl. we are seeing some strength here in crude oil prices, just trading over $47 a barrel. session highs. crude, remember, shrugging off that stronger dollar. trading more in line with equities here and as the equity session seems to strengthen, so do crude oil prices. what's interesting is that the trading range we are seeing from the session low to the session high, about 1.50, instead of these larger ranges we have been seeing. what's interesting is that the market is shrugging off some of the bearish news we got on yesterday on inventories and more support. those took us down. the market seems to be letting go of those factors, also something to watch for later today is what we are going to see for those recount numbers. that's friday. tomorrow, we get those numbers out from baker hughes. final word on natural gas. we are going to be talking about
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those prices in the inventory. nat gas is trading at the lower end. this has been a rough trade. we'll look at it more. >> we will talk to you in a while, jackie deangeles. keegan michael from "key and peele." we'll get his unique perspective. more "squawk on the street" in a minute. when i started at the shelter, i noticed benny right away. i just had to adopt him. he's older so he needs my help all day. when my back pain flared up we both felt it i took tylenol at first but i had to take 6 pills to get through the day. then my friend said "try aleve". just two pills, all day. and now, i'm back for my best bud!
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there is a win/win. general mills selling green organic, going natural and organic. b&e has a great yield. they have historically bought brands like this and just, boom, turned them in and reinvented them. b&g has a lot of the bread i'll. when i was growing up, melba
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toast was bha we livhat we live. b & g and general mills doing what is right for share holders. what about tonight on "mad "? >> a lot of new stuff. i'll explain it pretty well. >> there is a lot to get to. we take stock up. what the ecb said today and jobs number tomorrow. >> please be careful. this is a reprieve without china. china is not good news. that's tough to reign in to china. >> we'll see you tonight. >> it has been good, no matter how strong you are. >> "mad money," 6:00 p.m. ims services at the top of the hour. don't go too far. can a business have a mind?
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a subconscious. 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? no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop,
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and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great. welcome back to "squawk on the street." i'm carl qintanilla, with simon hobbs.
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sarah and rick are off today. let's get to rick santelli in chicago. >> before we even do the august read on ism, nonmanufacturing service, biggest breath of the economy, we need to understand our last read at 60.3 was the best read since august of '05. now, we look at this one. 59 would be the third best read ever. that's why i brought it out that way. if you go all the way back to '05, what you would find is that the final months that we had of '05, saw the 591. it was late in the year, around november. august was 61. so this 59 number is super solid. we are expecting a number slightly over 58. it is a big deal. don't want to dismiss it. i continue to say, anything survey based, it is kind of the law of the jungle. a lot of these managers and people that respond to these surveys have gone through some wild market times. from the credit crisis to various points of volatility like we had last week.
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does it effect how they respond, how these things are put together? that's your call. solid number interest rates, hardly fluctuated. keep in mind, they didn't fluctuate nearly as much. upper price, lower yield in some of the european maturities did after mario draghi started to put more fluid in the cannon. back to you, post nine. >> thank you very much, rick. can we put up a chart on where we are on the dow jones intraday. as that has broken, we have moved from plus 106 on the dow to now 75. >> brian, you called these markets. you think we actually bottomed a week last tuesday and since then, the s&p has risen 3%. you are nailing your colors firmly to the mast here. >> yes, i do think also the tuesday was the low for this bull market correction. i could be wrong about that. i don't want to take too much credit for it. a lot of people were saying it
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looked like sort of a capitulation trade at that point. we have gotten some pretty decent numbers coming out earlier this week. things were looking weak because of anticipation that stanley fisher was signaling that the fed was going to be hiking in september. now, it looks like, now, maybe is it could be october or december. the key things for investors to watch is we are getting decent pmi data out of the euro zone and the united states as well. china is slowing. the real question is whether or not that is going to infect our markets. i really don't think it will. >> i'm not sure that is the real request he for many people. if the dow has dropped 30 points on stronger data. the obvious knee jerk read for that is that it makes an interest rate hike from the fed two weeks from today more likely given how marginal the calls are at the moment. what is your view on that? >> i agree with you. i think you are right. the strong ism data this morning suggests that perhaps the odds
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are favoring a september hike. look at the beige book yesterday. to me, that was signaling that actually it is not a done deal. that is going to be september. perhaps we are going to shift on the margins here, in the markets. plus or minus 30 points on the dow. that's more noise, i think, than anything. really, over the longer term, i think that investors can take some solis knowing that central bankers, as mario draghi pointed out, are watching our back. >> i'm really sorry, brian. that surely is not the takeaway here. the federal reserve does not have the back of these markets. that's not the narrative we are talking about. we are talking about, we're questioning whether the fed will hike rates in two weeks time in this environment. it is not putting a put under the stock market at awe. >> i don't know if you can read too much into a 30-point move here. i was saying about mario draghi, what his message was.
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i think they want to hike into economic strength and stronger financial conditions. if financial conditions continue to stay tight over the next two weeks, i can't imagine they would actually hike. the fed isn't just concerned about the economy. they are also concerned about the financial conditions. they don't mind if the stock market goes up or down 5-10%. i'm not saying there is a yellen put here. i'm saying the central bank will try to make sure that financial conditions don't deteriorate. >> the fed might not care but the people in the market certainly care. we keep hearing about these snaul moves up, triple digits, short covering, bottoming patterns lasting 2-3 weeks, not 2-3 sessions. how long are we going to whoever near the levels we are? how do you see this playing out if it is a two to three week
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bottoming pattern that leads us into september 16th? >> i hope it is a two to three week bottoming pattern. when i look at the history, it actually suggests it might take a little bit longer than 2-3 weeks. i anticipate that over the next, let's say, trading month, what we could see is the s&p 500 trading somewhere between 1903 and 2003. it is going to be in a rather wide band. however, sometimes the volatility is what really sticks around with us and that could probably last anywhere from 3-4 months. >> 1903 would be a loss of 60 points on the s&p. that seems an awfully long way down. let's assume you are correct and the broader point is that we have bottomed here. what works now? what wins until the end of the year, brian? >> i think towards the end of the year, really, it is more that you live and die by beta in this type of market in these types of recoveries? where do you find that small cap stocks, midcap stocks.
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you find that in information technology. you can also find it in the emerging markets. however, the emerging markets are going to be beset by political problems as we go into the end of the year. you want to be very judicious about where you are looking for opportunities there. things in brazil aren't getting better. things in turkey are very unclear. things in china look pretty attract testify. there will still be huge moves in the markets to the up side and the down side that you are going to have to contend with. >> brian jacobson joining us from wells fargo. >> jack lew sitting down for an exclusive interview with our own steve liesman criticizing china's handling of its currency devaluation, talking about market v market volatility. steve joins us from headquarters. a very big interview, steve. >> yes, treasury secretary lew had a tough criticism.
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china signals their intentions by the actions they take, the way they announce them. he said the u.s. is watching and china will be held accountable. he praised the u.s. economy after the ism report this morning and noted a lot of the currency move we have seen is a result of different growth rates around the world. >> from the perspective of the u.s. economy, i think while we've seen substantial volatility in the markets, we have seen continuing signs of strength in the u.s. economy, even in these last few days. we have seen the consumer activity remain strong, auto sales very strong. so we have had a consistent and quite stable series of indicators that the u.s. economy remains strong. i am happy to say the u.s. economy has been looked at as being one of the bright spots in the global economy right now. we have taken the steps we need to to come out of a deep recession. we have been growing for a good and sustained period of time. we are seeing good, sustained job growth. we are seeing increasingly
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strong consumer demand. so i think we start out with we always want to do better. i am not complacent. we want to do even better than we are doing. >> when you travel to turkey, could you talk about the message you have for the g-20 countries, specially when it comes to currencies. a lot of currencies have depreciated fairly strongly against the u.s. dollar. is there concern on your part that some of this has gone too far. >> i think what you have going on right now is a time when you have economic forces that are operating in different directions and different countries. you have effects that are very real. so the u.s. economy is stronger than many other economies in the world. that creates a certain stress there. you have quite a number of companies, particularly emerging markets, that are very closely connected to china as supplier of commodities and they are feeling economic pressures
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because of the slowing rate growth in china. i think this is a complicated time economically. we all have to avoid. a little discussion at the g-20, to slip into what might look like competitive devaluation. it is unfair and leads to the worst global economy. >> i'm sure you are able to read between the lines. some tolerance for exchange that is linked to different economic outcomes. there is some line. he wouldn't draw it in the sand, so to speak, whereby a country can pass that. the idea with china, they are watching them closely when it comes to that. guys, in the next hour, a place where secretary lew, has a little lessle tolerance. the arrest of the chinese journalist talking about what the government might do and other issues related to how the chinese government cracked down op the market decline there. >> we had a discussion with
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cramer this morning about ha li that line. dominic chu has some breaking news on coke. coca-cola has made a large step in terms of shareholder rights. what coca-cola has done is adopted a proposal in which large share holders can now nominate board directors. now, this new proxy access, as it is known, will allow share holders who have at least 3% of the stock and held it for at least three years to nominate up to one-fifth of the total board members at coca-cola. this comes on the heels of remember a shareholder named john harrington of harrington investments in california asked for this kind of proxy ac set to be able to nominate directors to the board. coca-cola advised against it. they wanted more time. in this case here, what they have gone and done is said they will now allow share holders,
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large ones who have been shareholders for at least three boards to make nominations. muhtar kent and his investors have come under fire about executive pay. this seems as though for now that share holders will get a bigger say going forward in the board nomination process, carl. back over to you guys. >> when we come back, netflix falling nearly 15% in the past week as competition is heating up. apple exploring original content. amazon offering offline viewing. is this the perfect storm for nflx? big day? ah, the usual. moved some new cars.
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hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.
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netflix is down today. one of the worst losers down sharply. the second worst performer in the s&p. it does look stronger. these recent challenges from hulu and apple could slow down success going forward pasqually is an analyst. good to see you. >> good morning to you. >> hastings was asked about this, the idea that apple getting into the original con tenlt would be a threat. his response is, look, everyone and their mother is already doing this. why should another competitor be any different?
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is it? >> i don't think it is any different. i think honestly this is a lot of noise around netflix brand that by now has become synonymous with streaming and at the end of the day, netflix has a sustainable competitive advantage that can be defining two things. one is the brand and two is the price. so we still don't know exactly what the apple product is going to look like or what it is going to be priced at, et cetera. >> we are getting news from the ap we finally have' die significance between this court case between the nfl and quarterback tom brady. they are saying that brady has beaten the nfl, the judge nullifying the league's four-game suspension. of course, you recall all the attempts of trying to find a middle ground to get some sort of arbitration worked out between the league and the team. there were reports that brady
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was willing to bring that suspension. goodell reported to be stubborn in that regard. in this case, brady and the patriots with an almost clear win across the board. >> that must have implications for him and the nfl management team to have stuck to their guns and to have been so decisive in the decisions that they made and to then have them overturned by the judge. some thought that might happen. i'm not sure that's where the consensus was. we knew we would probably get some sort of ruling but a lot thought we would have to go through the process again. >> first game of the regular season approaching very quick will i. this clearly does not mean we are not going to get an attempt at an appeal by the league. that was something we had been speculating before the decision came down. a number of things an appeal filer would need to meet in terms of requirements. it is unclear at this moment how good of a chance the nfl has of
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getting it and even if they are interested in pursuing that. that will disrupt the regular season. >> we need more information on why the judge has made this decision. that will be critical. is it on process? is it on evidence? is it on the fact that maybe they simply overreacted and should have fined him for the fact that the cell phone was in ini inoperable or broken? >> the wall street has a front page story on him and how he is approaching a lot of the scandals. joining us this morning, nfl agent, drew rosenhaus. thanks for joining us so quickly . >> my pleasure. >> i'm guessing you are thrilled at this decision. >> yes. as the player agent, tom brady's target. i'm personally happy. also, professionally.
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i've thought in this particular case that there was never any grounds for an extension. i have been on your show before. i have talked very clearly that i did not think that a fine was inappropriate but that a suspension absolutely was taking it too far. >> do you believe the league will press this and try to get it overturned? >> if i were them, i would move on. this has been a disaster for the nfl. they have gone after one of their icons. why, i'm not sure? i mean to the extent it has marred the season. it has been an overriding story. it had a negative impact on the whole super bowl. i always felt it was blown way out of proportion. i have never believed that whether a football is inflated or not is a big deal and the
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reality is it didn't have much to do with the outcome of the super bowl. there is no way they had enough proof to suspend brady or any other player. there has never been a precedent for suspending a player like that. certainly, there is some questionable elements here as it relates to the phone being destroyed and the cooperation but at worst, that should have been a fine. the nfl should have made the deal with tom brady and the union a long time ago and this thing would have gone away without it being a store are i. now, it is a terrible embarrassment, a huge victory for brady and the nfl players association. it is absolutely something that will set a precedent in my opinion for other players going forward. >> drew, what does it mean for commissioner goodell who clearly prosecuted this hard and fast as it were? we are told by brady's team he
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was offering compromises along the way, very publicly making that case. still, goodell pursued it, up to hours of hours of face to face talks and gets this ruling from the judge. what does that mean for him and the future of the present manage pt of the nfl? >> well, it is a very bad outcome for commissioner goodell and the league, obviously. they are big losers here. there is a lot of egg on their face. this is something that they have invested millions of dollars on and, you know, it was all for naught. at the end of the day, they accomplished nothing, except really creating a huge distraction. and a side show. i'm hopeful that the nfl will take a look at a number of their
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decisions and suspensions that i don't think are fair. and do the same thing and challenge those as well. >> drew, obviously, we love getting your insight into the story. you represent athletes. are you able to divorce yourself from that relationship and look at how some of these penalties may be fair in terms of the would-be dispute? >> yeah. look, i've got no problem with the nfl disciplining players that break the rules, break the collective bargaining agreement, suspensions and fines that are in line with previous conduct and discipline are important to running a successful national football league. there have to be rules of penalty. the point here on brady is that it never made sense to suspend him without any hard and fast
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evidence. the welch report in my opinion was not nearly enough to do anything along the lines of a suspension. you know, i get it if the league suspended brady initially to cover their rear end. but then there was an appeal. i believe with the appeal the deal should have been made to reduce it down to a fine but they didn't do that. if has just been one botched element after another. this is a really embarrassing moment for the nfl. it does open up the door for them to look at others and go after the nfl on the same merritt. >> drew, the elements of this particular case aside. do you think the outcome and what it does to the reputation to the nfl will be in any sense a chilling effect? they would be less likely to go after future instances because
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they fear something like this would end up being overturned anyway? >> i think the effect it will have is that before they suspend a player or fine a player, they are going to have to make sure it is consistent with other cases and that it is fair and that it is based on precedent. that's the way this should be handed down. they totally went on a new tangent here by suspending brady. there had never been any previous cases where a player got suspended for an equipment violation or footballs being altered. it is not the first time. not only that. they hammered the patriots. they took away a first round pick.
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they fine them $1 million. it was the most unprecedented discipline. i'm really happy for the new england patriots. they got crushed here and good for them that they are going to get their quarterback. hopefully, for these first four games now. >> drew, i have one more question for you at least but dom chew, one of our colleagues here, has some color on why the decision came down the way it did. >> 40 pages of judge's decision, a huge amount. we have boiled it down to a few different things the judge said for why they overturned the suspension. there was inadequate notice to tom brady of both his potential d discipline, that four-game suspension and his alleged misconduct. that's one. number two, the denial of the opportunity for tom brady to examine one of the two lead investigators, namely, nfl vice-president and general council, jeff pash, and, "c," number three. denial of equal access to the
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investigative files including witness interview notes. so, broadly speaking, those were three of the items cited in this 40-page ruling from judge berwyn about why they overturned this four-game suspension for tom brady, inadequate notice of the discipline and misconduct and denial of the opportunity to question one of the two lead investigators as well as denial of equal access to the files, including the witness interview notes. so we'll send it back over to you, carl. we are still, again, going through 40 pages worth of this stuff. we will bring you more details as we dpet more on our side, carl. >> drew, i don't want to get into a huge guessing game on the strength of goodell's tenure at this point now. obviously, he has lost the support of one of his key allies for years. how much does this hurt him? hurt his credability and legitimacy as commissioner.
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>> i thisnk roger goodell is going to be safe as commissioner as long as he is making the owners there? >> this is obviously going to be a tough thing for he and his team. many of the other owners that have been supporting him. i don't think roger goodell has that. the days of roger goodell and the nfl being judge, jury, and executioner, need to come to an end. there should be a neutral decisionmaker on appeal. if the nfl wants to stand down discipline, that's fine. the nfl pa, should be able to
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challenge that to a neutral arbitrator or hearing officer and that decision should be final. it should no longer be up to the nfl to make decisions on appeal, their own decisions. that's ludicrous. that's absurd. there is no place for that. >> so much of the disciplinary process to some has appeared ad hoc over the last few years. by the way, for those that argue this is not a business story, we would beg to differ. there is huge money here on the line as drew can certainly attest. drew, thank you so much. >> you bet. have a great morning. >> drew rosenhaus on the decision brady has defeated the nfl and the judge nullifying that four-game suspension. >> up 104 points on the dow. the euro dropping sharply after comments on mario draghi,
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getting a nod of the idea of the extension of q-e. we will look at that and the lingering effects of china's currency moves when we come back. [ male announcer ] we know they're out there. you can't always see them. but it's our job to find them. the answers. the solutions. the innovations. all waiting to help us build something better. something more amazing. a safer, cleaner, brighter future. at boeing, that's what building something better is all about. ♪
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welcome back. i'm jackie deangelis reporting. a build of 94 billion cubic feet. prices right now are pretty much
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flat. let's talk about the number we saw. it is a big build by all accounts. it was largely expected by traders. we are seeing these prices really at the lou end of the range. this has really been a technical trade for quite some time right now. we see nat gas get down to 2.63, 2.64. with a big build like this and stock in good shape, it makes sense we are at the low end. don't be surprised with a little bit more of a bid update. here is the cnbc newsup date. we start out with desperate migrants piling on to a train in budapest. police no longer blocking the entrance to the train station. people then rush the first train to arrive at the station despite the announcement there was no service to austria or to germany. guatemalan president has resigned under the cloud of a
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corruption scandal after a judge issued an order to detain him on a custom fraud case. thousands of french farmers converged on paris to call for more government support and reforms to help the country's agriculture business. they are planning to protest falling agricultural prices. police continued their search overnight for three men wanted for killing an illinois police officer. dozens of armed officers, canine units and air support descended on a field area in the city of volvo after reports of two suspicious suspects that turned out to be false. that is your cnbc news update this hour. let's get back to "squawk on the street" now. the treasury secretary warning beijing it will be held accountable for its currency moves. jack lew speaking to cnbc's steve liesman before heading to
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this meeting with the chinese in turkey. >> they need to understand that they signal their intentions by the actions they take and the way they announce them. they have to be very clear they are continuing to move in a positive direction. we are going to hold them accountable. >> joining us now, head of north american g-10 elsa lenos. good morning. can you decode that for us? when the united states talks and says we are going to hold chai in accountable, what does that mean? >> there are two audiences. china has always been very concerned about china's pol sichlt whpolicy. clearly, people want to send a warning signal this can be the start of something much greater.
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it is important that the united states sends a clear message. it is something that draghi mentioned today in his press conference. >> the international deal is do whatever you like. if it affects the currency, we'll let it ride. the ecb does the same thing. for the chinese, it is different, because they have explicitly peg to the dollar. you are affecting the currency. it is kind of qed. >> they are in a really tough spot at the moment. what they have tried to do or what they are saying they are trying to do is to move to more market for the exchange rate. the market seems to want to push lower giving everything in china. >> are we suggesting the united states is resisting where the market would like to take that?
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>> that's what i would like to say. we have been calling for it to be weaker. a foo you months afew months ag looked like a wild call. >> that has huge implications for the rest of asia and the world if it follows through? that lies at the heart of part of the panic we went through on this market over the past two or three weeks. >> implications for the u.s. are smaller than you might see. the implications for asia are pretty significant. when we look at dollar yen, we have a very aggressive call. part of the reason is that the japanese can't sustain the currency at current levels where as the u.s. can. >> we saw the dollar rise today on better than expected u.s. data but also on these comments from the ecb about leaving the door open for extending qe or increasing qe. mario draghi was very careful about the way he phrased that.
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how much does that corner what the federal reserve can do? >> the fed is not going to be indifferent to the dollar. a lot of good, am demic research has been done on the subject. that was very interesting from harvard university presented at jackson hole over the weekend. the fact is that the dollar effects u.s. inflation and u.s. export growth much less than you might imagine. because so much of world trade is in dollars, the impact is much smaller than many might think. >> people are looking at the ten-year and wondering if it is chinese selling that is supporting the yield. do you believe that's the case? how long will it last? what are they using those funds for? >> china is in a very difficult spot at the moment. they have actually had to intervene to defend their currency. in terms of what that means going forward, if you are entering a situation where results are no longer going to be growing. that has implications not just for u.s. treasuries but for all global fixed income markets but going forward, if you do see
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china somewhat allowing the market to determine its exchange rate a little bit more, it should mean less need to use up currencies to defend it. >> this is a theme we have pecked up in the market for the last week. deutsche bank has done a lot of work on it. this is not quanty tiitative ea but tightening. a lot of the oil producing nations no longer et going the currency reserves. the price of oil has fallen. this is a major shift to the way the world operates. would you agree? we have gone from a world where global reserves were growing. no longer is that the case. they are shrinking. the main impact may be against other g-10 currencies. the euro was a big beneficiary of reserve diversification. if that goes into reverse, your
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dollar will come down as a result. >> elsa ninos from rbc capital markets we will take a look at the markets. the dow spiking in the half hour. now, up by triple digits would be its 11th triple digit move in 12 sessions. currently, up 0.8 of a percent. "squawk on the street" will be right back.
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as the market volatility changes, should you change your investing? we have many tips and more "squawk on the street" after this.
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top of the polls in iowa, scott walker has fallin behind donald trump and we sat down with walker talking about trying to get his campaign on track. >> he is running as a staunch conservative and taken some heat in wisconsin for supporting public money to held build an arena for the milwaukee bucks. how did he square that with his opposition to the export/import bank? take a listen. >> you expose the ex/im bank
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that is this crony capitalism. >> the tenth amendment says if it is not spelled out in the constitution, it is the role of the states and the american people. >> you recently approved $250 million for a stadium arena for the milwaukee bucks. why is taxpayer help to a business like the milwaukee bucks justified in a case like that? it is not justified to help boeing and other international companies. >> the constitution doesn't say local and state governments can't do things. it says the federal government. >> so picking winners and losers is okay for states but not for the government. >> not for the federal government. in the case of the state, putting in less than $4 million a year to protect the state getting $6.5 million they get not through some theory or hype, $6.5 million a year that's currently collected every time an nba player plays in the state of which is is u on the annual basis. $6.5 million is collected for state revenue. the state puts in less than 4
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million. the city and county can do what they want. >> i am not saying you can't afford it. but all the countries we compete with have export subsidies and if it is good for an american company, it is good for american. you don't think so? >> the difference is. you are putting words in my mouth. the difference is those countries might have constitutions that allow those federal governments to do that. ours doesn't. >> scott walker is no you trying to gain some new momentum. we have a debate coming up in two weeks. he has slipped not only in iowa but nationally. everybody is living in the world of trump right now in this republican campaign. >> interesting that the milwaukee bucks are actually owned by mark lowry, a clinton ally. >> herb kohl is one of the principal owners. one of the chief fund-raisers for scott walker is also a part
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of that group. both parties are covered in that deal. >> fantastic stuff in your speak easy stuff. john harwood here. let's send it over to chicago and get back to the markets. rick santelli with this morning's exchange. >> thanks, simon. i like to welcome my special guest, jim bianchi. i can't get my head around moving on from john harwood and walker. it is all the same topic, actually. import/export bank, basically. if other countries have financial and corruption a bit. you need to compete against that with your own form. isn't it the same kind of qe? when we see that, it doesn't do a heck of a lot. it ping pongs back and forth. there is a competition, whether it is to the bottom or the talk. what's your thought? qe was a lot of it. everybody else has got to do it. draghi is still talking about doing it as well. >> if you are a country that can't afford an airplane, you
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get financing. there are strings attached to qe-2. whether it is savers or franken stein creating. we dent know how it will end. do you think in five years, we will not be talk pg about thing. >> when your central bank starts printing money at the level it has, you cannot say, it doesn't matter. it does at some level. >> can central banks go down in flames? >> absolutely, they can. they have in the past. they have all been third world country central bank. >> i call it the thelma and louise dynamic. who is going to take over when we crash land? i don't see big names cropping up. india, who is going to take over. the fed is hoping to do that. they want to raise rates so they have some fire power to lower them on the next down turn. or so the argue goes right now.
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>> if you follow the docks, there is some incongruent aspects to it. it is the same issue with fed funds and converging. tell our audience what you were doing. the market does not have a fed hike priced in. if the fed were to hike in two weeks, i think it could have a very profound effect on the market. one hike. even if they promise they won't hike again. the forward curve, the technical term, the market expects the fund rate to be at the end of 2016. >> just so viewers know, all the little pieces that we know of in the market, with he kind of draw an artificial big picture. >> right. >> they expect the funds rate to be at 1.5 at the end of 2017. the fed says it is going to be closer to 7. if they raise rate and say, with he don't care about financial stability and china, the economy is so strong, we have to move now, the market starts thinking, maybe they will move the funds rate to three. if they do that, two-year, three-year, five-year notes, they will have to reprice.
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>> this is call the lehman dynamic. central bankers start to perspire. the yield curve flattens quite a bit. the market is priced into a reality and the fed might in two weeks tell us that that reality is something different. it is going to be much higher. they will try and tell you they are going to move for six months. they can't make that statement. they are day ta dependant. >> i think they can do what they want until somebody else gets more boysterrous on the complaint site. >> up next, what is it like to launch a new tech product in the middle of so many people talking about a potential bubble bursting? we'll talk to one ceo who is doing just that when "squawk on the street" comes right back.
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welcome back to squawk on the strooets.
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energy materials the leading sectors there. s&p 500 is up 1.33%. we're seeing the oil rally and the bond yields rally on the back of positive u.s. data. we'll keep watching the stock market. meanwhile digital ordering provider olo, joining the likes of post mates and caviar, launching a delivery service called dispatch. what makes now the right time to jump in? joining us is the olo founder. you work with postmates and with caviar to then deliver the products for your existing customers. how exactly does it work? >> that's right. so to clarify, olo has always been about helping our restaurant clients maximize revenue per square foot. and doing that by serving the needs of the on-demand consumer. sometimes that means letting the customer order and pay from their smartphone and skip the line at the restaurant.
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other times it means getting the order delivered to them. that's where dispatch comes in. dispatch is not a delivery company itself. what we are is a delivery network. that connects all of the different restaurants with all of the delivery companies, to synchronize the interaction between the two. so when the food is ready to be picked up. is exactly when the delivery courier arrives and collects the order and takes it from point a to point b to deliver it to the guest. >> you have a lot of familiar customers, five guys, noodles and company. baskin robbins, names that our viewers would know. they probably go there a the lot in person. why do those places need olo to arrange the delivery for them? why can't they get it from postmates or caviar themselves, without needing to go through your company? >> a couple of different things. number one, a lot of the delivery service providers or delivery companies have a sparse network and in a national brand they might only cover 5% or maybe as much as 10% of their store count.
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by creating a network and by putting all of these delivery companies together on the same network, it creates a much broader set of coverage. a national chain can now offer delivery to all of its customers, not just a small subset of customers. the most important thing is we're integrating the order directly into the point of sale system at the restaurant and the kitchen system. that means we can synchronize when the food geddes cooked when it's prepared and ready for pickup with when the delivery driver goes to collect the order. >> you're like the uber of delivery couriers? >> i wouldn't say we're the uber necessarily. i would say we're almost the e-commerce stack that sits in between the restaurants and the delivery courier. and uber -- >> find the jobs or prices dynamically? >> we do price dynamically. but more in the way that a trip adviser travelocity gets the quotes. allow the customer to choose and track the order, very uber-like in seeing it on a map.
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turn-by-turn directions from the restaurant back to them, instead of a vague delivery time of 45-90 minutes. >> we've been talking about a bubble this week. nick bilton and "vanity fair" says what companies are doing are glorified distribution. in some sense copying what domino's mastered in the '80s. how are we seeing your industry different than that in. >> pizza did master the on-demand delivery over the last 15 years and over 50% of their sales happen that way. now it's spanning to all restaurants, not just pizza. >> the debate continues and we're happen to follow you and noah, we're happy to have you here, noah glass from olo. jon fortt is back from vacation, what's coming up in "squawk alley"? >> we're going to talk twitter, twitter board is meeting here in new york city today. what are they talking about? maybe the new ceo, whoever that might be, also tesla, some news on when their cheaper cars are going to be coming out and finally we have got tea going to
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something more amazing. a safer, cleaner, brighter future. at boeing, that's what building something better is all about. ♪ good morning, it's 11:00 a.m. at twitter's board meeting in new york.
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8:00 a.m. out west and "squawk alley" is live. everyone is back, jon steinberg, jon fortt and kayla tausche. down with 190-point gain. twitter's first board meeting in new york city. a lot of speculation about a ceo announcement. dorsey is the presumed front-runner for that job and the research may be happening at

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