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tv   Squawk on the Street  CNBC  June 8, 2016 9:00am-11:01am EDT

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why it is i lost weight. >> you look great. >> you hear that, sweetheart? >> that guy wants you as a fourth co-anchor too. >> okay. >> we could replace someone. >> listen, nice to have me. have a great summer. >> make sure you join us tomorrow. "squawk on the street" begins right now. thank you, ken. >> thank you. ♪ good wednesday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. the s&p within a percentage point of an all-time closing high. a lot to watch. we've got the table set for the election as clinton climpbls a majority of delegates. ecb begins buying corporate bonds as the german tenure nearing the zero bound. oil supported by a drawdown in api but d.o.e. in about 90 minutes. road map begins with amazon announcing a major investment in
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india. jeff bezos met with prime minister modi last night. we'll hear from him when he addresses congress later this morning. clinton wins enough delegates to become the presumptive democratic nominee. is the battle between her and mr. trump gains momentum. the market seems to be shrugging off this political uncertainty. shares of lululemon bouncing around in the premarket after raising forecast for the year but offered a softer outlook on the current period. we'll talk about what's ahead for that company. stocks are looking to maintain their upward momentum a day after the s&p posted highest close since july of last year. oil rising to some eight-month highs. brent hits 52. all of that happening as david said within the politics mix. hillary clinton declaring victory in the race to become the democratic presidential nominee winning four primaries including california where it wasn't nearly as tight, jim, as some suspected it might be. >> yeah, you know, i think that people just want some sort of resolution of who it's going to be and let's just go forward.
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there were a lot of pundits, to go back, if bernie sanders wins california the whole thing's in disarray, the pundits are kind of like these federal reserve nonchairman. you have to be careful listen take your life in your hands. >> yeah. >> but the idea it's going to be hillary clinton versus trump is dawning on people and people are now starting to see in the papers this is what the economy would do under trump, this is what it would be under hillary. talked at the corporate governance conference the other day say, let's take drug policy, a lot of people thought obama was going to move to the center. he never moved to the center. but you still had drug companies make a lot of money. you may find out that these people aren't as powerful as you think if they're trying to really effect change. >> at what point do people start to focus on trade? i can remember when we had greg hays here, ceo of united technologies and interviewing him about the honeywell offer for his company, we did venture briefly off into territory, this is months ago, about mr. trump.
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and he made the point, that's not really going to happen, is it? well, it has happened and the concern for multinationals has been of course about trade, about sanctions, about tariffs and what that would do to their business. i haven't seen any of that fear reflected in the stock market, or at least it doesn't seem to be. >> not at all. maybe it should be because when you get off the desk with people and you talk to ceos they're saying, listen, there's not really a chance this is going to happen because our business is going to be cut in half. trade wars, we've made our bet on asia and europe. i mean, when you go look at the percentage of a lot of the international companies, they care about the dollar tremendously because they're worried about pennies. we're talking about dollars trump got in and was able to do. i'm not saying, look, i keep thinking about that indiana factory of united technologies, they say we're going to mexico $3 an hour versus $30. and free health care versus we
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pay the health care versus no pension. the deal is to move jobs to mexico. if you can't do that, there's going to be a wall. i don't know if you can move the jobs there with the wall. >> meanwhile, you got the world bank once again cutting their forecast for global growth down to 2.4 from the 2.9 they saw in january. whether it's an election, whether it's a brexit vote, i mean, is the market whistling past a lot of this stuff because they've gotten this reprieve from a hike? >> i think so. look, we care about oil showing that that's worldwide demand. we have never even considered the fact that it perhaps is the supply side. that nigeria, there's literally an outfit that's like the anti-nigerian oil producer outfit. al f, gorillas, i don't know, whatever, protest, but the supply side certainly has been cut down. china car registrations were amazing for the last month. the export/import numbers
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continue to show that the premier is doing the right thing. there's nobody in the allegheny algorithmic world that said up because cut back, demand good and demand for commodities are good and copper starts going up, then what we have is a situation where you buy the u.s. stocks. and i'm not going to get ahead of that because when i look at the volume of most of the big cap stocks that used to be a million shares and it's 180,000 shares by 10:00, i know that the algorithms are going to override anybody. there's no volume. >> arguably will be less volume as we get closer to some of these binary events. >> at 11:00 yesterday the leaders in s&p were airlines and oils. airlines because algos say there's strength in the economy so buy the airlines. airlines, yes, jeff did put through a raise, that was significant. >> right. >> but at the same time it's
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counterintuitive. there's so little volume that you can move airlines via algorithms. >> and they represent a good percentage of the daily volume. >> yes. >> these firms. as we pointed out many times are run by ph.d.s and mathematics who really don't care about the stock market and its underpinnings. they create the relationships and i'm not quite sure how they all do it, but they do very well by the way. >> yes, they do. they do well. >> in fact even at firms you see a hybrid approach where there's active management based on old fashioned stock picking and the quantities, the quantities typically do better. >> we struggle to come up with areas where the predictive is that good. and i come back and say wait a second, did you look at the artificial intelligence jeff bezos is doing, he's able to predict a lot. >> is he? >> well, i think he predicts that you are going to buy if you like banshee, you're probably going to buy strike back. >> that's true. >> that's the thousand people -- that's all algorithmic trying to
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figure out how we can do it. what the algos say is when oil goes up that means people buy honeywell. that's what the algos say. when we go and buy rock ports, sure enough they want to show us ralph lauren suit that goes with the rock ports. i mention that because that's in the news. >> ralph lauren suits that go with rock ports? i don't see that. >> doing that to be topical, no. >> okay, good. >> thank you. okay, here, when you buy calvin klein underwear -- >> yes, sir, back to the under. >> they'll send you something for boxer shorts. they'll send you hanes brand. >> other people liked. >> right. other people liked. >> as long as other people have worn them. >> no, i don't think -- i think that's faux amazon. that's the wrong site. that's the david faber hair. that's not david. >> speaking of bezos india's prime minister set to address
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the joint congress today a day after he met with president obama to discuss potential energy related deals at an event attended by the prime minister bezos announced plans to invest $3 billion addition in india on top of $2 billion in 2014. bezos said india is amazon's fastest growing region. and that says a lot. even the growth of the rest of the world. >> i think that there's three companies that talk about india right now, and there are three companies that are really darn good, amazon, apple and domino's pizza. domino's being remember they have a no-cheese option, which is vegetarian for a lot of countries. apple, bezos really came in with guns blazing about money. now you say tim cook came in and he went to a cricket game where there's more people who follow cricket than there are -- you know, it's a pretty well followed game. >> it is. >> he also spent a lot of time talking directly to people about having a deal with being able to
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sell because they don't have retail stores to sell apple. 2020 is going to be the biggest market is what tim cook said. 2020. >> there's john chambers, a.j. of mastercard will be there. bunch of heavy hitters. >> look at that tie-jacket outfit. that's like men's wearhouse. >> international has not been growing as vigorously as amazon has been the domestic business. i do tend to think about walmart, which is always had a more difficult time. there had been an expectation ten years ago that walmart would be at least 50/50 now in terms of revenue mix. >> why are they having a problem in uk? even in uk. >> there are cultural norms there are things that need to be done, couple resets, bad time in germany. >> but cheap is cheap. >> cheap is cheap, but it doesn't always translate in terms of how it's done. >> then why does tjx do so well in europe? >> i don't know. maybe they've figured it out. i'm not sure. that's a good question. but it is interesting to watch
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amazon of course as it builds out and tries to continue to build out significant international expansion. and it is worth noting, guys, that amazon's market value, i mean, these things do take place over time. there's $120 billion more than walmart's. that's pretty stunning. >> yeah, well, it's just like babe ruth versus hoover when people are saying he made -- and hoover's better euro move. >> it's true. >> when we come back this morning we'll get more on today's movers including both good news and bad news for lululemon. we'll tell you how that stock is moving on it all. look at the premarket as we said up 0.9% of an all-time closing high 1.1% from an all-time intraday high on the s&p. back in a minute. t the td amerie trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that
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lululemon revenues beat as comps up 3%. the yoga wear retailer raising profit guidance. outlook just shy of consensus. inventory to sales was -- inventory rised faster than sales but nowhere near it was in q-4. >> no, this was a good quarter. you have to add in the
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direct-to-consumer business which was very strong. and you have to remember that it's canadian currency so you have this translation that it's not -- look, translation is translation, i like the lululemon number very much. there was an excellent piece this week written by a guy named matthew boss. people better start paying to this man. >> we have him on. >> yeah. he talks about one of the brands that can't be destroyed in the mall is lululemon. and it's really right. and i think that lululemon is a very powerful brand and is being run far better than the gentleman who founded it, came on air and blasted it. i mean, lululemon is distinguishing itself here as a company with very strong comps. i would not sell that stock. by the way, ralph lauren just to go back on that, i mean, i wouldn't have sold that stock down 10 yesterday. that made no sense. >> that ended up being a good move of course as they had their analyst day as it went on and on the stock continued to come back during the course of the day, that being ralph lauren. i didn't listen in, i'm sure you know what was said.
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>> the brand is -- the brand was in too many outlets, going to cut back. someone has to make a couple tough choices. they're doing that. but we're getting through this earnings period and we're finding that some brands have resonance. it turns out that calvin klein has resonance when it comes to underwear, which is the big part of pvh's business. i wish it were outer wear. i mean, i can't -- oh, darn, i wish i didn't know this stuff. it'd be easier to be stupid. >> yes, it would. it's a much better way. >> but calvin klein is selling a lot of shirts. no, underwear. >> fat and stupid is no way to go through life. that's an old -- >> better to be rich and thin. >> "animal house". >> the calvin klein underwear has shined, we have seen good stuff from lululemon. columbia, the sportswear company, they are doing quite well in this environment. again, a distinguished brand. lululemon. i think that a victoria's secret can be turned around by les.
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under armour, i know people don't like the stock but the steph curry shoe is selling very, very well. there's a handful doing well. i mean, that's a very strong brand that people don't talk about tim boyle out there in portland, ororegon, just quietl doing a great job. >> there always seems to be this rough patch that every retailer is destined to go through, tiffany, under armour, jcp, lulu, all had their dark chapter. >> michael kors after a great run and then not so good. >> i would rather be -- being the bell ringer today, i wish the ceo would kind of drop by because that company's on fire. coors light, i don't know what you drink. >> have you seen the lululemon website lately? >> no. >> if you go to it, this is what you see, a shot of just a guy. and then it says no adjustment
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required. abc, antiball crushing destruction designed for mobility so you can leave the boys be. >> my lord, that's not even appropriate for television. >> maybe it's an ad makes the cranes with the big balls that knock things over. maybe you're a dirty mind and i've got the clean mind. >> it to me is not talking about -- >> you guys are presuming that that has to do with the anatomy. i'm thinking bigger. >> are you? >> yeah, i am. you're thinking shrinkage and it's no shrinkage those pants. a very competitive product. >> now i've got costanza in my mind. >> i applied during lay period -- >> did you? >> complete denigration of my career. >> by the way, we should mention b of a ups to neutral and followed by a 7% div hike. >> i didn't like that last quarter. sometimes, look, sometimes you own a stock for your trust say
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that was a bad quarter. target's had to reach out from some of the ranks there, target i believe has been hurt by bezos. you know, the $8 billion in increase came out of somebody. >> it did. >> it did not come out of dollar tree and it did not come out of dollar general. which those stores are as packed as i've ever seen them. packed. >> the overall pie is not really growing as much as amazon's take. >> no. again, i refer to the boss piece about, which is really fabulous, talks about what is, you know, kohl's private label maybe that can sell some, jc penney private label, i bought jc penney private label for the arizona brand, and everyone thinks it's the same as everything else i wear. i don't wear on air. you don't get that at jc penney. >> i know when you suit shop -- >> i get the sonoma. you like the suit? actually it's very tight on me.
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>> is it? >> my wife said it looked good on the way out. >> form fitting. >> yeah. i don't like the way it feels. but the sonoma i love the way it feels, but people don't want to see me in sonoma. these are kohl's brands, david. when we shop at kohl's together it is going to be eye opening. the house wears section is going to blow you away. >> blow me away. i can't wait for that. >> do you think he knows what a kohl's is? >> i've seen them. >> you talk about him like he's not here. he's right there. >> kingsford. >> i walk by kohl's and many other stores. i don't like shopping. >> well, that's where you and i just have to differ. and that's why i showed you those pictures of pier one this week. >> they're beautiful. >> you cannot believe the closeout sales there, ten bucks for candles. that are like can last for hours. >> we will get cramer's mad dash. we'll count down to the opening bell after a break. take another look at the premarket here. recall that the low for the year on the s&p february 11th at
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1810, we'll see if we can open the morning stronger than that obviously. a lot more "squawk on the street" from the nyse straight ahead. you can fly across welcome town in minutes16, or across the globe in under an hour. whole communities are living on mars and solar satellites provide earth with unlimited clean power. in less than a century, boeing took the world from seaplanes to space planes, across the universe and beyond.
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with world-class botox. and in buffalo, where medicine meets the future. let us help grow your company's tomorrow - today - at on tap to ring the opening bell. >> oh, wow, that was good. >> thank you. >> symbol 2 is tapped. >> yes, it is. let's get to the mad dash this morning. we have about six and a half, seven minutes before the opening bell actually. where do we start? >> winners and losers. david & buster's. a fabulous number and $100 million repurchase. i was surprised i'm worried there could be a secondary here
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because there was last time they pulled a good number. 46% is alcohol, is beverages, and when you have that ratio of someone who owns a tavern ca-ching they know how to do it. they've made it much better and done a great job. i don't know if you've been to a dave & buster's lately it's more fun than ever. >> my kids have been. they enjoy it. they're not drinking thankfully. >> no, but the games are good. you can spend a good $90 on tickets and be able to come out with a kind of foam doll. >> yeah, a little tiny doll or pillow. >> yeah, pillow. i actually won a bike once. i couldn't believe it. they said you're the first person actually did well here. >> wow. >> yeah. i won a bike. >> did it work? >> yeah, it was a great bike. made my day, made my year. actually, my father was there. he said we just beat dave & buster's for the first time. we've spent thousands of dollars here. pop always said that. it would have been like $90. okay. verifone is the other side.
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>> okay. >> this has to do, david, with the slow adoption of your chip and pin card, the emv. retailers do not like it. verifone was ready for it. >> so slow. >> oh, doesn't it drive you crazy? oh, i hate it. >> come on, guys. i know. >> no, i'm not paying. >> i know. >> that's why i keep hundred dollar bills in my pocket. >> why the delay? >> i don't know, the supermarkets are rebelling against it. verifone was all set for it and the conference call's really sad. it's not their fault. david, it's so slow i don't want to shop. now, what does that tell you? >> i know. you add up those seconds -- >> pursuit of things i shop. >> over the course of a day that's customers potentially to a retailer. >> whole minutes i lose. >> jim, that's a 30 -- i'm stating the obvious here. >> the conference call was very bleak. they don't know when the adoption is going to be. they have to fire a lot of people. but they were ready.
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i feel badly. they were ready and never thought that the major -- take a look at blackhawk. it's blackhawk down because they too thought there was going to be very quick adoption of emv. emv, it's like i've never seen the consumers dislike something more than that. >> right. >> and yet that's how -- it's antitheft. >> i know. i know. it's for the right reason. got to speed it up. >> jamie dimon should come on and tell us why we should do more emv. and charlie sharp. >> yeah, he'd make more appropriate -- >> things that are not going to happen. >> we got the opening bell coming up here of course as we get you ready. there's a look at the banner for molson coors. i don't think we're going to be drinking. i don't think we're going to be talking to peter coors, but at least we're talking about tap, which as jim said has had a great run of late. we've got a lot more "squawk on the street" straight ahead for you. man 1: i came as fast as i could. what's up?
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forecast, ecb and corporate bonds, german ten-year. >> i cannot believe the germans aren't just standing here buying dollars and sending it much, much higher. i mean, how can you stay in their ten-year? that's unbelievable. if i were german fiduciary running billions of dollars, i would be calling up j.p. morgan saying get me a quote. >> but that's happening. as these things are running off, jim, you do have a lot of these bond managers looking to deploy elsewhere. that's why dell can sell more debt than they ever thought of at a lower cost than they ever thought. >> i know. >> any other corporate issuer. over there, i mean, can you imagine -- if you're unilever, what can you issue debt for? >> very good. now the -- i've been looking at some of the mortgage markets in europe. italian market is loosening with this corporate bond buy and reliquefy the banks.
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2% for consumers, not just companies, 2%. >> 2%. >> 2%. and they can get one. you put money down, you're going to get a 2% mortgage in italy. isn't that great? >> there's the opening bell and s&p at the bottom of your screen. at the big board today it's the molson coors brewing company, and electronic provider of manufacturing services celebrating appointment of a new ceo. you've been hitting coors hard for a long time. >> oh, my, i said sell by the secondary, the beer market consolidation is rather extraordinary. there's really only a couple players. a lot is reaction to craft beers coming on strong. these are generators like you wouldn't believe. i like bud very much. yesterday consolation started coming down. whenever that comes down that's corona in america, these are three companies should be owned. bud, molson coors and constellation. it is a fabulous market for the
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beer makers because the consolidation is extraordinary. and beer costs very little money to make. if you ever want to know what the single greatest franchise you can have is to be a coors distributor say in texas and louisiana. i mean, they have these -- these are what i want to be. used to be a bottling company. you want to be a distributor because i've met these guys. talk about quiet billionaires. >> no, not a lot of coal calling going on, they come to you. >> it's weird. my wife has met a bunch of these guys with me, there isn't a single person in this room that isn't a billionaire. this is the most regular group of billionaires ever. not like hedge funds. not like hedge funds billionaires. >> no. >> just billionaires. >> they're not regular, most of them. they try to be though. they try. >> you know what you do with a guy with a billionaire who has a beer distributorship? >> what? >> have a beer with him.
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>> tap stock never looked back after the abi deal when it became available to them to buy the -- buy out sab miller from their joint venture. wow. >> when you have a tap -- i don't want to talk about the inner secrets of my bar, beer's a fabulous business. it's just a fabulous business all the way. people love beer. it's not like tequila which is up double digit. when you have a consolidation with the likes of this, this is not hertz and avis getting together and suddenly there's uber. this is no uber or amazon for beer. okay. you cannot call -- you know, jeff bezos is not trying to figure out how to get you a molson. he ain't going to have a molson with you either. >> why not? >> because you did that documentary. >> that documentary was not unfavorable. >> you favored it. you know it was faberable.
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you talked about the assembly lines. >> we talked about certain things, that's what you do. i wish of course mr. bezos had chosen to sit down with us. it's one of my regrets, but i'm sure it's not one of his. >> i think you have to find these businesses that are not amazonable. i was talking with our executive producer, dave & buster's, amazon can't do it. you have to think when i talked to the other day from starwood had a price higher than where it's going out, he said, listen, if you think that this airbnb is not -- they have more rooms than three of the major hotels, airbnb is driving a lot of real estate purchases to be able to get rent. airbnb is worth every penny of whatever comes public. it's incredible. but you got to figure out if i want to be in the hotel business i don't want to be up against airbnb. but dave & buster's, i'm in the business of having a claw come down and pick up a, you know, dice. i still have the dice that we
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got in my window. >> someone said essentially put the beer in the middle of a bunch of games, not a bad business plan. >> you know, with the ncaa championship game didn't serve l liquor. people were like give me a coors, they're like, no, we don't serve liquor. sports and beer, another thing. this is just -- david -- oh, i'm sorry. david's online ordering things. >> i'm not, i'm looking at my notes because i'm going to talk for a moment about monsanto. >> i'm just saying this stock's a buy right here. tap is a buy. go ahead and talk about gmo. >> yes, i am. >> talk about stuff you don't want in your body. >> in fact, bio's ceo warner bouman spoke this morning at german, swiss and austrian conference. >> i didn't know they had one. >> that was largely about the prospective deal art bayer and monsanto, more on that in a moment. but he did say, jim, in
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talking -- and carl, about the overall industry, the ag industry's challenge the next 30 years there will be an additional 3 billion people to feed on this planet, land is limited and so the solution is for companies with financial means and scientists to develop new solutions. then went onto talk about three years expecting total synergy potential of $1.5 billion plus even more further out from this deal largely coming from cost synergies in terms of sgna, supply chain, r & d savings, some sales synergies. so you have them speaking positively at bayer. and they've done a good job by the way. take a look at the graph we have of that stock. it dropped dramatically, it's come back quite nicely. but when it comes to the talks between monsanto -- they don't exist. there have been no conversations. we're a couple weeks out since those very favorable exchange of press releases. and both sides believe they will engage. but at this point they're not yet. now, part of it is bayer talking to its own shareholders making sure to get its own house in
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order with its stock price, making sure they understand the reasons why it wants to pursue this. but, jim, you know, so far nothing -- still at the starting gate on both sides. saying we haven't talked. monsanto does a regularly scheduled board meeting this week, but at some point they'll talk. >> goldman put out piece talked about 30-year low trough in purchasing, a lot of people feel corn's got to come up, soy's got to. there's a universal belief ag is about to have its day. i don't know if you've been looking at ag co stock, that's been very strong. but people want to see this dupont deal is driven by seeds, so i totally get it. it is rather amazing. i think we'd be remiss for talking about european companies, talk about the deal to buy keurig. there was a lot driven by that kold, they wrote it off yesterday. >> yeah, saw that. >> wrote it off. >> they wrote off the kold.
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>> isn't that amazing? >> strategic. >> although starbucks is having more success adding cold. >> i'm curious what you think i was just thinking of a list in terms of you mentioned monsanto and dow dupont, now f5, lending club, all these stories -- >> ashford hospitality. i'd like to see some show me the money. little bit of a "jerry mcguire" thing. a lot of deals are being mentioned. i'd like to see is f5 really in play? going to get a deal when they had trouble raising money at 10? i don't know. lending club and they're telling you how many loans they haven't been able to sell, is that the chance for a guy who sounds like he plays the nhl to come in there? >> i don't know. i haven't focused that much on lending club lately, whether he would come back under the rumors he would come back with an offer for the company to take it
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private. >> poly con. >> is actually happening, right? >> we've got another private equity bit e bidder there, right? >> yes. >> so sponsor one. >> who? >> sponsor one, that's what they're calling it. yeah, they haven't told us. poly co lly com already in deal a canadian company. >> that's a very competitive area. >> there's a lot of murmur about in terms of technology. these are smaller names. >> yes. >> there continues to be -- >> yeah, but the marketo deal was a powerful deal, vista put together a marketing house. came in, made an acquisition in same space, they felt like they had to. >> yep. and we are seeing private equity participate again at the lower price levels. when i say lower, couple a billion dollars, which is sort of where they can play up to maybe two to three to four. they're not going to play obviously at the larger level anymore. given the size of funds, lack of
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ability to really participate as a group anymore, which we saw. >> right. >> in that incredible period in '06. >> has it surprised you this move in the oil companies without a single bid, royal dutch today couple very positive comments. i thought they did a deal that was not that great. people are suddenly liking the stock but no one's come out and bought apache, nothing, rage, nothing. now, natural gas prices are up nicely, but there was -- from $2 to $2.40 because of warmth. but i am shocked that no one finally ever made a bid before these stocks got away. and they got away. >> i know. there had been so much chatter about anna darko. >> it never happened. instead what's happening are these trying to put together these kind of interesting niche companies that help amazon. everything's to help amazon. i was talking to lisa and i was
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saying i could talk about amazon and people would say that's boring. but, you know, i keep thinking about what you saw out in out - >> yeah, it's been a week and people were mentioning bezos speech specifically. i think people's appetite for those names is a lot bigger than you think. >> our disruptor, i have a bunch coming on "mad money," when you listen to these companies you just cringe if you're -- as i keep going back to fritz from starwood. airbnb has wrecked the potential for the hotelers. not wrecked but potential. hasn't wrecked the gambling business by the way steve wynn just better and better. look at the buys he made. the open market buys he made. >> i did. >> what a titan that guy is. >> better move dimon or wynn, in terms of buying your own shares? >> wynn is.
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>> wynn. dimon came in at the 53 level, he called the bottom. but wynn, the fire power he's put to work, the guy was like -- he was on a mission. you know, i urge people listen to jamie dimon's conference called, they're well staged, they're a very good production, they are a network production. steve wynn, he's cable. steve wynn is banshee meets breaking bad and narcos, it's a production. and at the end you're like, wow, i wish they would do another, are they going to do season two of that thing? i hope they do season two. that's how good his conference calls are. you're laughing. >> i am laughing. >> you want more, it's like please don't cancel last show. >> you want it to be on netflix so you can binge view it. >> i would binge on a steve wynn conference call. he's taken on the chinese
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government. no one's taken on -- he did. service may have lost china, but not wynn. he took on china. >> it's a great allegory. >> i love him. >> we're back above 18k and s&p 2117, let's get to courtney reagan on the floor. >> hi, carl, that's right. the s&p is getting very close to its all-time closing high. four more points away from that point for the intraday high for the s&p, but still it could happen today, as you mentioned the dow is back above 18,000, the last time we saw a close there was back at the end of april. so we'll see what happens throughout the day because equities continue to move in lockstep with wti again today. also hitting some nice highs we haven't seen in a number of months, as we saw larger than expected drawdown in u.s. inventories, higher chinese demand and some worries about attacks in nigeria. so as you might expect energy stocks are among the leaders today in the session once again.
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chesapeake up almost 9%, marathon up more than 3%, just as an example. it was a mixed picture in asia overnight. modest moves actually in both directions, and this is as china central bank holds its annual growth forecast at 6.8%. but slashes the forecast for exports citing global and domestic economic changes in the environment. and the world bank seems to agree with that to lowering global forecast. also on mainly weaker outlook for commodity exporters and that challenging economic environment. some movers here today when it comes to earnings we've got some good, some bad, some right in between. so verifone as you mentioned missed on eps, beat slightly on revenue but a very weak third quarter outlook and now they're conducting a strategic review cutting jobs down 30% today. dave & buster's moving in the opposite direction after a big beat on earnings, beat on revenue, raising outlook and
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$100 million stock buyback. lululemon was basically in between. mixed results with light earnings, a revenue beat raising full year earnings guidance but still below consensus. but lululemon has a history of having a fairly conservative forecast. so far j.p. morgan's boss and mayer confident about what they heard from lululemon in their initial notes this morning. lending club also moving higher on a reuters report that the ceo is possibly interested in taking the company back over with the help of private equity and banks. we'll see if that happens or not. shares have actually moved a little bit back down on that one. so perhaps there's some disbelief that could actually come to fruition. carl, back to you. >> thank you so much, courtney reagan. let's get over to rick santelli check out the bond pits at the cme in chicago. good morning, rick. >> good morning. pretty soon we're not going to have brokerages for bonds globally anymore. we're just going to carry them in the dollar store. global rates continue historic
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drop. look at one-week of tens. and ours of course are the top of the heap when it comes to some positive interest rates and even that when you look at the one-week chart we've had two days in a row not including today where the entire intraday range been between 170 and 174, today might be the third. and that's all of course after the weak employment report because it had such a colossal impact on this game we all call central bank whack-a-mole. and if we look at a one week of bunds, wow, three basis points, yes, three basis points is the intraday low as it hovers around four or five basis points. and it doesn't stop there. let's look at a five-year on the yur curve. it's at minus 41. also a record. what's fascinating is think in absolute terms like high school math. if you look at the difference between minus 41 and where the bund's trading at 3 or 4, that spread isn't a whole lot different than our 5s at 123 and our 10s at 171.
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it's just like volleyball. a giant shift to the left, and the left mean negative numbers. now, if we look at the uk, the gilts, gilts aren't in negative territory but also historic low hovering around 126, almost exactly where our five-year is. and the last chart is the dollar index. and once again yesterday when we were talking to jim grant he was talking about how the refs are more important in the game, how the scoreboard is more important than the plays on the field. well, this kind of goes along with that because the dollar index just got trashed after the employment report because of what it means for the fed. carl, back to you. >> rick, thank you very much. rick santelli. when we come back, meg whitman and autonomous cars. you'll hear what the hp ceo told jim about them on "mad money" last night. later on, walt mossberg, you'll want to hear what he has to say about amazon and jeff bezos, 18,011 on the dow up 72 points. new bikes aren't selling guys...
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♪ david, this is an outright steal of meg whitman. >> i know, you're taking her away. >> the sun doesn't set on the "mad money" empire. >> you're going to talk cloud, right? >> we are going to talk whatever you were going to talk. >> okay. you'll talk to meg whatever you need to. just remember. >> what? >> on earnings she's mine. >> that's jim on our show yesterday talking about meg whitman snagging her for last night's "mad money." the hpe ceo spoke about how autonomous cars fit into her company's growth strategy. take a listen. >> we're expert at compute, storage, networking, we're expert at doing that in a very small footprint with low power consumption. because remember if your data center's in the back of the car, you have to be able to drive
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quite long distances without recharging, if you will, the power for that data center. so this is core technology for us. we're super excited about it. and i think it's a growth area for the company. >> just trying to put it in english because they keep talking about the edge and internet of things. and it's your car, it's the stuff that's in your car, it's all those chips. >> right. you wouldn't necessarily immediately go to hpe when you think about autonomous driving. it's an interesting connection to make. >> that's what i was really trying to do is this story is not quitting. and remember she's selling -- spinning off the services business and that's going to do well too. and hpe i think is undervalued dramatically where it goes out. she did tell me at the end of the interview that she's done with you and is going to come -- >> that is a lie. >> it is a total boldface lie. >> how about drop box choosing hpe? migrating away from the amazon cloud. >> maybe he can come public again, drew hallston. i've been waiting for that
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unicorn -- they're still calling them that. >> they are still calling them unicor unicorns, yeah. >> we should come up with a new name. instead of unicorns, donkeys. >> rhinos. >> rhinos? they're not endangered. >> rhinos are endangered. are you kidding me? there's like six left on the whole planet. >> okay, you're right. >> bobcats. >> no, let's stick with -- >> okay, glad we made that official. >> eagles. we're not endangered. we're going to take the east, silly. >> we'll get stop trading with jim in a moment. 2119 now on the s&p. don't go away. using 60,000 points from my chase ink card i bought all the fruit... veggies... and herbs needed to create a pop-up pick-your-own juice bar in the middle of the city, so now everyone knows... we have some of the freshest juice in town.
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time for cramer and stop trading. >> i want to talk about a quiet movement in stocks and being led by union pacific. the railroads are not doing well. cargoes are bad, this is involving coal, csx peeking about that. we had an airline rally yesterday. that was jetblue raising rates. we have union pacific leading the rails. where i'm going here when you have a rally led by the transports, it is the best kind of rally. >> love's traffic for may 6.4. >> if you raise numbers and
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remember the american airlines is changing frequent flier policy in august to how much money you spend versus miles. so the transports are moving on nothing. and just a little here by jetblue nothing in particular other than maybe coal's done going down the rails. but when you have these quiet rallies in the transports, they can create a lot of excitement because people say, oh, i feel better. that one index i was always afraid of, which is commerce itself, is showing strength. be aware that emboldens people to come from the sidelines. that's what's happening right now. >> what's on mad tonight? >> okay, we've got disruptors up the -- well, we have a lot of disruptors. these guys, each one of them back to the roots as everyone's telling me is just one of the most exciting companies. i have not been involved with back to the roots. one of the things about the disruptors they don't have the earnings per share i'm used to looking at. they don't have a steve wynn
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conference call but my staff says, jim, you got to get back to the roots. to me band is plays in jimmy fallon. >> right. questlove. you know what we found? the only unicorn animation. >> yeah? can we run it? >> there it is. >> holy cow, enter the unicorn. how long are kids believe there are such things as unicorns, right? >> mine are 6, i think they're exiting the window. >> really? they believe in the tooth fairy because my daughter asked for like $197 for the last dollar. >> goes up. >> after you threw your money on the set, i believe that's the going rate. >> my executive producer said for "mad money" never do that again. so i don't put my wallet on anymore because i'm so tempted to throw money. >> we'll see you tonight, "mad money," 6:00 p.m. when we come back talk with world bank official about the group cutting global growth forecast, dow hanging onto 18k. don't go away. a fair price, quality service, and that horrible smells are really good at hiding.
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remember, all medicare supplement insurance plans help cover what medicare doesn't pay. and could save you in out-of-pocket medical costs. call now to request your free decision guide. and learn more about the kinds of plans that will be here for you now - and down the road. i have a lifetime of experience. so i know how important that is. good wednesday morning. welcome back to "squawk on the street." i'm carl quintanilla with simon hobbs, david faber at the new york stock exchange. back above 18,000, the market being supported by industrials,
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transports, some oil, s&p within a percentage point of the all-time high we set last summer. and we are going to get inventories for crude in about 30 minutes. >> okay, here's our road map for the next 60 minutes on cnbc. with hillary clinton marking her place in american history declaring victory in the democratic presidential race, bernie sanders isn't stepping down just yet. we'll have the latest from the campaign trail straight ahead. >> slashing growth, the world bank sending a warning as it sharply cuts its global growth forecast. we'll hear from the top director at the world bank of who authored that report. and once banned from entering the u.s., india's prime minister prepares to address a joint meeting of congress, what to expect from his upcoming speech. meantime, big news this morning hillary clinton claiming her place in history as the first woman to become the presumptive presidential candidate for a major party in this country. big wins of course in california and new jersey, topping off an unexpected grueling campaign
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with that position against bernie sanders. our very own hjohn harwood join us onset. >> good morning. conclusive end to the democratic primary, four of six victories for hillary clinton last night including a double digit margin in the state of california, which was the biggest prize. very lopsided win in new jersey as well, south dakota, new mexico too. so hillary clinton turned her attention very quickly to donald trump and the contrast with his bombastic campaign. >> we believe that cooperation is better than conflict, unity is better than division, empowerment is better than resentment and bridges are better than walls. [ cheers and applause ] >> now, bernie sanders has not conceded the race yet. he's going to be meeting at the white house with president obama tomorrow. also with senate democratic leader harry reed. and donald trump tried to step on that divide within the
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democratic party in a comparatively sedate from his usual style speech last night in his victory speech. of course he had no more opponents left. here's donald trump. >> to those who voted for someone else in either party, i will work hard to earn your support. and i will work very hard to earn that support. to all of those bernie sanders voters who have been left out in the cold by a rigged system of super delegates, we welcome you with open arms. >> but of course donald trump still has work to do within his own party, house speaker paul ryan yesterday condemning as racist his remarks about the judge in that trump university case. and mark kirk, a republican incumbent senator from illinois in a tough race said he was renouncing his support for trump calling him temperamentally unfit for president, which is precisely, simon, the same argument that hillary clinton's been making. >> john, stay with us if you would. joining us now former advisor to
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both the obama and kerry/edwards campaigns, mark hannah and former rubio romney advisor, lenny chen. martin, let's kick off with bernie sanders and this meeting he has tomorrow with president obama. does it matter if he campaigns on through the d.c. primary and into the convention in july? >> i certainly think it matters. one thing i think you're going to see tomorrow is there's going to be a podium set up in the rose garden. and i have a suspicion that after the conversation goes as many people suspected will go with president obama, bernie sanders and president obama will step out there, bernie sanders will hopefully bow out gracefully for the benefit of the democratic party's unity going into the convention. he has signalled there will be a contested convention, no question. but he's also signalled that if the electoral math doesn't look good after what happened last night, this guy is a realist when it comes down to it. >> so you think he'll bow out tomorrow? >> that's my prediction, for what it's worth.
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>> do they have to then simultaneously offer his supporters within the party something to make them believe that the progressive wind is still in their sails, concessions to keep them on board and behind clinton? >> well, i don't think there's going to be any kind of bartering backstage or in the oval office or anything like that, but i think hillary clinton the onus is on her to make the case that she represents those issues that bernie sanders supporters care deeply about. i think it's a farce to see donald trump out there saying he's going to make a play for bernie sanders supporters. i teach a lot of these bernie sanders supporters in my class at nyu, new york university. a lot of my students are jazzed about bernie sanders. the idea they're going to somehow defect the democratic party and go over to donald trump is ludicrous just from my own anecdotal evidence. >> would you agree with that? >> no, i don't necessarily agree. i think there are different demographics supporting bernie sanders. i think that's right. the students many of whom i interact with at stanford, they love bernie sanders, they love
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the free tuition, there is no way they will get on with donald trump. but there is this element of the white working class, you know, individual in pennsylvania, maybe ohio, some of those kinds of states where they do the system is rigged against them. and for those voters i think donald trump might offer an option. the problem for donald trump is he's had a disastrous last two weeks as the presumptive nominee. we'll have to see how it goes. but there is an opportunity for him, no doubt about it. >> simon, i would be skeptical that significant numbers of people who would otherwise vote for a democratic president are going to be attracted by donald trump. lanhee is right, there are working class voters attracted to trump. most of those people have already become behaviorally democrats, and right this has been a difficult last two weeks for donald trump. what we've seen as donald trump got a bump as he consolidated his rank and file republican voters after becoming the
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presumptive nominee, he was running even with hillary clinton. now she is opened up a lead of three or four points in the polling averages. we're going to watch over the next few days and see if that widens. >> lanhee, obviously there's a firestorm within the gop. that goes without saying. what do we make then of this announcement last night that trump on monday will have a keynote speech on hillary clinton suggesting that the state department was operated like her private hedge fund? can he unite the gop if the argument is strong enough against clinton? >> you know, there's no greater unifier right now in the republican party than hillary clinton. so donald trump is smart to do that. the difficulty though is his behavior in the last two weeks, his comments about the federal judge, his inability to put together a campaign that is prepared to win in november worries a lot of republicans. so he's got some holes in the dam that are letting through water. mark kirk and other republicans that have unendorsed him or have not supported him have already demonstrated that republicans are nervous about him.
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so he's got to shore up the ship. he's got to make sure he's doing what he does. and giving that speech on hillary clinton could be helpful, but i got to say donald trump is a troubled presumptive nominee. that's the way i see it. >> and to that point, yes, attacking hillary clinton is unifying for republicans. but it's not unifying enough for lanhee's boss in 2012, mitt romney, who is withholding his support, so are both former presidents bush, that underscores lanhee's point about what a troubled nominee. >> and frankly both candidates are playing a different game. hillary clinton is playing chess and donald trump is playing dodge ball maybe. on monday if he's going after hillary clinton, if he wants to win over independent moderate voters, he has to come after her on substance and policy issues. so far we haven't seen he has the ability to do that. he's engaging in politics of personal humanization, destruction, whatever you want to call it. >> his line was politics of personal enrichment. so between benghazi and between
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the clinton foundation, is there no ammo left? >> there's ammo and people in the media have been asking tough questions of hillary clinton. we've been doing our due diligence, but donald trump by going after the most frivolous things, the most superficial childish things calling her names is not necessarily going to woo independent voters who are sick of this kind of politics. >> the question is how much more mileage can republicans get? they've gotten some, and certainly to the point we've been talking about it unifies republicans. but how do you move beyond the 40% and attract more people to the republican ticket? i don't think benghazi is the way to do that? >> no, but scotus might be. right? where do flake and kirk and graham, what happens to their scotus argument? >> i think the way to add votes to the republican ticket is by persuasively arguing that you're going to create more jobs, be better for the economy.
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now, hillary clinton's argument on that is the temperamental unfitness, unpredictability, can you count on him. >> okay, lanhee. >> yeah, the issue here is that every election ultimately probably comes down to people's views of the economy. and what we should have been doing as republicans over the last two weeks is making the case for why the obama economy and what will be the clinton economy are not good for working americans. instead we've been talking about silly season. so i think it's important for republicans and for donald trump in particular to begin to pivot the discussion to clinton's going to be a continuation of obama, we've had very low growth, we've had jobs numbers that have not been good, and if you look at the overall frame of the economy a lot of economic anxiety, that needs to be the argument. and i think republicans would be well suited and republicans in senate races like kirk and portman and ayotte and others the argument they need to be making not the personality arguments, but that's what donald trump wants us to do be a battle of personality. >> lanhee, i think that's a thin
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argument going into the general election when people have seen the sort of unemployment dip, the stock market double. >> that's just one measure. >> all economic indicators that basically it's not about the economy, stupid, the way it was in '92. >> it's always about the economy. it's always about the economy. >> a president with a finger on the sort of red button with the red telephone, they want somebody they can trust. they think stable and that's not donald trump. >> and that is the central argument maybe between the two camps. leave it there. thank you both. new book best worst president will be released later this month. when we come back keeping an eye on the s&p and closing in on the all-time high. see if we get anywhere near there today. the charts he says every investor needs to watch right now to find out where the market is going plus how the election will impact stocks. the world bank cutting its global growth outlook. a top director at the bank breaks down the risks of a global recession. "squawk on the street" continues.
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welcome back. the dow just below 18,000 this morning. the s&p nearing its record high. where do we go next? let's bring in tom mcclel lan joining us from seattle with charts we always want to pay close attention to. tom, good to have you back. >> good to be with you, carl, congratulations on the new online show. that's great. >> thank you very much. you've done some good work trying to tie equities to where we think things may go in the
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political race. walk me through a chart or two. >> well, we first discovered this speck in the 2000 election. i was just curious what the poll numbers look like and i found the stock market movements tend to lead the changes in the poll numbers by about a week. when you get down to the daily polling that occurs more close to the election. we don't have daily polling from the major polling companies yet but the real clear politics average better with clear lag average of past polls. i brought a chart today and shows the movements of the dow jones industrial average tend to lead the movements of the poll numbers by about eight or nine trading days. >> so this is a short-term clue, right? nothing that's going to carry us through the summer. >> no. but the point is that if you see a movement in the dow or the s&p or your favorite index, you're likely to see the same movement show up about a week and a half later in the poll numbers.
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and the interesting thing is that if the market moves up, that tends to benefit the incumbent in the past elections. and the message now is that hillary clinton according to the way that the model is working hillary clinton is viewed by the market as the incumbent. and there's some sense to this because if people are feeling good, the market tends to get bid up, or conversely if the market gets bid up, people tend to feel better about it. when people are feeling good, they like the guy who's in office more. if people are feeling bad, they hate the guy in the office and it's all his fault and they want to throw him out. you see the vacillations work that way between the poll numbers and the stock market. but there's about one-week lag in terms of it showing up in the poll numbers. >> interesting. you do a lot of work looking at traders, net position and futures, sometimes way in advance. and you've got a chart that helps us look at the conundrum that has been gold lately. >> yeah, gold's having a big breakout move today for the short-term. but i still view that as only just a counter trend rally
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within what should still be a down trend. the commercial traders, they're the smart money, they're the big money as reported in the weekly commitment of traders report by the cftc. and the commercial gold traders are now at a historically really high net short position. they've been continuously net short ever since 2001, but to varying degrees. and so when you see a really high net short position, the smart money is betting on decline in bill prices and the smart money is usually right in the long run. it's going against them today but that may be an opportunity to load up on shorts again and prepare for even a more big downside move in gold prices. >> tom, a lot of people will struggle with this type of patent matching particularly with what the dow is doing relative to the opinion polls and the election campaign. you know, normally if you were a scientist you would try to control further factors to establish the correlation. and i wonder if you look back at your charts if you were to extract the effect of the fed and janet yellen whether you'd
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still have a correlation with the polls. >> that's a really good question. and this election year is far different from the standards that we've come used to in the last three times -- three or four times i've been doing this. it's a whole different election for all sorts of ways. but the main point is the same. if the stock market is up, people are feeling good. and conversely if people are feeling good, they are willing to bid the stock market up. and that tends to accrue benefit to whoever is seen as the incumbent. this year the charts are saying hillary clinton is playing the role of the incumbent in terms of the markets response or the poll number response to the stock market. if you see the market head downward, as i'm expecting after a top in early july, that would presumably go in trump's favor. and so you're confronted with a quandary. if you're a trump supporter, but also an investor, do you want the market to go down so trump can do better, or do you want the market to go up so you can do better? it's a fun quandary. but we'll be looking at this
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further especially as we get closer to the election and as poll numbers clean up and we get out of the primary business. >> finally, tom, earlier in the year you looked at traders position in euro/dollars and suggested that would bring a big correction in u.s. equities. we got somewhere in the neighborhood in february, but where does that stand right now? >> we did. a whole bunch of liquidity hit the market and trump leading indication -- didn't mean to bring trump into that sentence, sorry about that. we are seeing gobs of liquidity the most likely sources from all the qe-that the ecb is doing. that euro/dollar leading indication calls for a bottom in october but upside in early 2017. so i'm biding my time and trying to tray the chomp between now and october. it will be time to be an investor again once october gets here and once people start seeing how the election is likely to shake out. then they can feel more resolved about it. wall street doesn't like to have an unknown and right now the outcome of the november election is still unknown.
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an unknown risk in wall street's view is bigger than any actual risk. once it clears up and becomes evident how it's going to turn out, the market can focus back on investing and on earnings and all the other things and we should have a bullish 2007. >> a lot of people would be looking forward to something like that. tom, always smart stuff. thank you so much. tom mcclellan. >> thanks, carl. coming up in the program, world bank fired a warning shot this morning cutting global outlook again. ayhan kose, top director with the bank will join us with that report next. "squawk on the street" will be right back. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪
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♪jake reese, "day to feel alive"♪
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world bank warning slowing global forecast -- from 2.9% to 2.4. from the world bank ayhan kose joins us, thank you for joining us. >> thank you for having me. >> you were saying essentially for five years you've cut it
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every six months. what is going wrong? what's the main dynamic to this continual cutting of growth forecast? >> of course global economy still struggling with the legacies of the crisis. and what we see is that especially in 2015 bottoming in the global growth. growth around 2.4%. lowest rates global financial crisis. and this year it's going to be around that number. >> so what happens? what keeps getting worse? what doesn't respond like you think it's going to respond? >> when you look around the world you see investment is quite weak, global trade is quite weak, global financial flows remain quite weak. when you put all of these things together and the overall weakness, especially in commodity exporting emerging market economies, of course the prospects look quite, you know, sluggish. >> there's a warning in here for governments to do more. it's the same warning that central banks keep making. everybody says governments do
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more or else. what is it in essence that you want governments to do that they're not doing? run big budget deficits to inflate the economy? >> i don't think we are seeing they should run budget deficits. but we are saying they should put some measures on the table that could accelerate investment and could send a message of confidence. ultimately what is important is to create a business environment that's going to foster investment growth and overall growth over the past three years what we have seen these measures lagging behind and governments are hesitating to undertake the reforms necessary. >> so could that be like supply side efforts, massive slashing of red tape, perhaps cutting of taxes? i mean, just talk us through where you would like us to be to not be as vulnerable. >> i think governments need to think both demand side measures as well as supply side measures. think about, you know, investment in infrastructure.
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in automaker in of countries around the world you see infrastructure gap. when you mess with infrastructure, you stimulate aggregate demand in the short-term, but also you basically provide stimulus over the medium to long-term growth. you invest in human capital, take investment education, investment in health, all of these measures can generate demand as well as provide stimulus over the medium to long-term growth. >> many people would regard you as a development bank, very involved in developing nations and lending them money and making projects work. actually, if you read the press release, a lot of this is about poverty. you believe that the poor of the world are particularly at risk. is that just the effect of commodities and being commodity dependent? >> commodity markets have been going through a rough patch, of course exporting economies have been suffering. and the most vulnerable groups, the poor are the ones suffer the most when growth slows down.
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of course we are worried about those countries as well. >> one of the countries that kind of fell out of the news cycle was india. today the india prime minister is in d.c. he's going to meet politicians. he's meeting obama. we had tim cook from apple in india recently. amazon's increasing its investment in india. is india perhaps one of the brightest spots at the moment? >> india is definitely a bright spot over the past two years government has put measures on the table, sending very strong signals that they are trying to create an environment friendly to the business. they put together credible fiscal program. and of course monetary policy framework has made it strong. >> if there is one area that is working at the moment and should encourage people, what is it? >> i think around the world we need to pay attention to the lack of infrastructure, this large infrastructure gap, and find ways especially for those countries that have fiscal space to undertake measures to close down that gap. >> it's good to see you, sir.
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thank you very much for coming to see us. ayhan kose there world bank. we're going to talk to two experts when we come back about lululemon and what's in store for the company. and the athleisure industry overall. back after the break. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. td ameritrade.
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good morning everybody. i'm sue herera, and here is your cnbc news update at this hour. iraqi forces pushed deeper into isis-held fallujah more than two weeks after the operation to retake that city started. after iraqi forces began their advance had quick succession of coalition air strikes followed. two speedboats packed with more than 60 tourists collided off the coast of southern thailand killing at least two and injuring 20 more. most of the passengers were chinese tourists. no word on ha caused that collision. bystanders in new york city were stunned when the driver of an suv crashed into several cars
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while trying to escape police. it was all captured on cell phone video, as you can see. the driver eventually ditched the car and fled on foot before being apprehended by police. and long lines at london's palace theater on tuesday for the next installment in the harry potter saga. harry potter and the cursed child open for the first of several previews. it follows harry and his school friends 19 years after j.k. rowlings last work. my kids will be in line. that's it for the cnbc news update at this hour. let's head to jackie deangelis with more on crude oil inventories. >> withdrawal of 3.2 million barrels last week, but we did see an increase in gasoline inventories of 1 million barrels. so the crude number smack in the middle of what people were expecting a little bit less than what the api said last night. that build in gasoline probably a little surprising. if you look at the chart right after the numbers came out, crude did come off a little bit,
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came under $51 a barrel, but there's still plenty of support here. especially after we had that close over 50 yesterday. the intraday high on the session 51.27. we haven't seen these levels in wti since july of last year. see what happened to u.s. production this week, 15 straight weeks of declines. will we have a 16th on our hand? people will want to know. factors supporting crude prices potentially pushing them higher. people are more worried about disruptions in nigeria with the terror threats on the oil output facilities there than they are necessarily about u.s. production numbers declining ever so slightly week on week. having said that seasonal demand for gas certainly a factor here, expect that to continue into the next month or so. back to you, carl. >> jackie, thank you so much. shares of lululemon are up after reporting revenue top estimates prompting the company to raise its forecast for the year. is this a bright spot for retailers? let's bring in retail analyst at
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oppenheimer and james fallon of course editor of womens wear daily, guys. good morning to you both. >> good morning. >> inventory and guidance between the two reasons to feel good or not? >> yes, absolutely. we're very encouraged about the top line dynamics. not that many retailers we can think of that are comping high single digits right now despite all the traffic malaise out there. and lulu of course has had quite a year with inventories elevated. and now that's coming into play. they talked about inventories per square foot actually being downright now and that inventory correction story should continue as we go through '16. >> did that come at the expense of pricing? or how did they get rid of that stuff? >> they've been methodically working through the overhang. they actually opened a couple outlets to help them move through those inventories. but the overall full price demand is really quite impressive. they talked about both aur and traffic metrics being up for the quarter. >> james, it's poetic that we get both lulu and ralph news in
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the same week because as you point out athleisure is not just a trend anymore, it's a way of life. >> absolutely. i mean, it stopped being a trend probably about two years ago. and i think the issues at ralph are department store related because of weakness in that sector. lululemon also shows the whole movement changed in the way people are dressing generally. there's a study came out today that actually showed nike as the most valuable brand in the world by far even topping louis vitton and luxury brands. >> if you ran any other apparel maker would you be chasing this? and if so how would you do it? >> you would inject elements of it. if i ran ralph i wouldn't be sitting here probably. but there are designers, the sport line, other younger
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designers coming up taking activity elements and putting it into their collections. you don't sort of immediately switch and become a lululemon type company, but you begin incorporating that. as ralph has been doing, but in a slower, smaller way. >> when we look at the news we've gotten from retail, this is putting a period on the earnings season for the most part, lulu. >> absolutely. >> but the store closures, the mall exposure, the layoffs, when do we start to see the benefits of that, sad as it is? >> no, it's definitely been a very challenging environment out there. i think overall there are just not a lot of must-have items. that's what makes lulu very unique because i do agree that the athletic trend is continuing. in terms of lulu specifically they've talked about some of the company product opportunities. they talked about womens tops actually inflecting, finally this is the second quarter in a row that womens tops are moving in the right direction. you have the mens comping in the
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20s for a couple of quarters now. so certainly they do have company specific initiatives that are working in addition to overall athletic still being a bright spot. >> james, i wonder if men and women are different here and whether nike and under armour for male buyers is something that's kind of in a defensive mote that keeps growing compared to lulu which might be closer to fast fashion, which might be under more pressure, under more competition. or is that just a subjective view? >> i mean, lulu was very much a womens brand. and it has been expanding slowly and slower into the mens category. nike and under armour are very much, quote, mens brands, so men do feel more comfortable going to them. under armour is very much a male brand and very much trying to close the gap with lululemon in the womens sector. you're right on one hand, but it's kind of not black and white. >> if i could just jump in, james, back to ralph lauren for a minute.
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yesterday was stefan larsson's coming out party i guess in my ways, been ceo since september. just curious about your thoughts for the path ahead for this 41-year-old gentleman and his relationship of course with his powerful chairman and controlling shareholder mr. lauren himself? >> i mean, clearly, you know, ralph lauren has given stefan larsson a long lead in terms of implementing this strategy. ralph admitted yesterday that, quote, they took their eye off the ball. and he's making some major changes. but also changes that in a way should have probably been made a long time ago. and some of which in the supply chain category for example are surprising, you know, their supply chain was 15 months long. stefan larsson is trying to get it down to six months eventually. even that is probably too slow at this type of retail environment when you have the h & ms and zara's of the world turning things around in less than a month. so, you know, what stefan larsson is doing are things that need to be done. and, you know, ralph lauren is
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letting him do it and making major changes. >> finally, when you look at acena, ralph, fossil, gap, where does value appear first? in some of those laggards. >> in terms of acena, that's really a very undervalued stock from our perspective. you have a portfolio of brands, you have multiple initiatives that could finally begin to play out. they're making a turnaround with the justice division. this stock is extremely inexpensive trading about nine times give or take any estimate. so any good news we think would get the stock higher. >> what a season it's been. good to see both of you guys. >> good to be here. >> thank you. coming up, stocks advancing with s&p 500 nearing all-time high. we'll ask the ceo of td ameritrade fred tomczyk. that and more when the street
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comes back.
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is the federal reserve to blame for most of the poor hedge fund performance we've seen out there, or is it something else? one expert makes that claim on cnbc the call just came in. she's about to arrive. and with her, a flood of potential patients. a deluge of digital records. x-rays, mris. all on account...of penelope. but with the help of at&t, and a network that scales up and down
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on-demand, this hospital can be ready. giving them the agility to be flexible & reliable. because no one knows & like at&t. welcome back to "squawk on the street." stocks are mostly higher. there's your heat map. you got materials standing out as the best performing of the s&p 500 sectors. gold hitting the two-week high. powering today's gains names like freeport mcmoran, newmont mining, alcoa, for the year materials done very well gaining more than 10% as a whole making it one of 2016's leading sectors. you had the trading nation tease, now this, simon, so much sullivan. >> absolutely. could it be any other way, brian, thank you. we're up 42 points on the dow just shy of 18,000. let's send it over to rick for this morning's exchange.
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>> good morning, simon. and thank you. and i'd like to welcome my guest bob our guy when it comes to the affordable care act otherwise known as obamacare. welcome, bob. >> thank you, rick. >> well, we are in the presidential season, that's for sure. we have presumptive nominees on both sides of the aisle. so my question's a simple one, whether it's on the tax side slash subsidy side, supreme court side, more importantly, parts that have been delayed yet to be enacted, what will the next commander in chief have to deal with with regard to their first year in office in the affordable care act? >> a whole lot. whoever is elected, he or she, has made a lot of promises, trump to repeal and replace, hillary clinton to improve and probably expand. you know, one of the interesting things about hillary clinton is she has intimated that she might talk about expanding medicare on a voluntary basis down to age 50, so that would be a pretty
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big expansion of the affordable care act or obamacare. so very different, very much a left turn or a right turn depending upon who's elected here. >> now, specifically there are large parts of the program that were supposed to kick in in '14 and '15 and pushed to '16 and beyond. i know that the cadillac insurance policies are one area. maybe you can expand on some of the big parts of the program yet to be turned on. >> well, the congress created a real imperative to have to revisit obamacare next year. there are three big taxes, one is the cadillac tax on high cost benefits, which was delayed two years. and will impact about a quarter of all employers and employees in the country if it is allowed to go into effect. there's a medical device tax, and a premium tax on health insurance companies. these are huge revenue raisers. and the congress put them off for a couple of years. what that means is whoever's elected in the congress or in the white house there's an imperative to have to revisit --
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we will have to revisit obamacare, the affordable care act, there's just no getting around it. >> now, with regard to recent supreme court rulings and the whole notion of subsidies, is there something there that we should be aware of, bob? >> well, there is a big supreme court -- there is a big court case in the federal courts that's likely to get to the supreme court in the next year or two. and it has to do with whether or not insurance companies can collect money directly from the federal government for some of these subsidies for the very poorest people. that is likely to go to the court again. and we've got a court with, you know, a 4-4 split here, so whoever the president is and whichever justice is appointed, conservative or liberal, is going to say a lot about how that case is decided and will have another big impact on obamacare. so obamacare like a lot of other things is waiting for this ninth justice to be appointed. >> bob, thank you for your insights into the affordable care act. simon hobbs, back to you. >> thank you very much, rick.
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india's prime minister modi arriving on capitol hill a short time ago. our own seema mody live in washington. an important state visit here, seema. >> reporter: it is, simon. invited by house speaker paul ryan will address congress momentarily where he will likely identify the key opportunities and investing in india's growth story from its intention to build out infrastructure, from its also importance behind developing nuclear energy to also constructing a landscape where u.s. technology companies can prosper. last night jeff bezos, ceo of amazon, did address the u.s.-india business council among others where he showed strong support for modi's campaigns and also announced $3 billion investment in india which brings total amount invested in the country to $5 billion. we know india's demographics make it an attractive destination for foreign investors, over a billion people, half of which are under
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the age of 25. so you have this young vibrant digital savvy audience that is using more consumer and digital devices, hence the reason we're seeing many of the u.s. tech companies from amazon to apple trying to gain more market share in india. but prime minister modi and other indian experts know that in order for india to surpass china as the largest emerging market, it really needs the help of the u.s. and that's why you'll probably see modi make the case for investing in the country. we'll bring you the highlights as they come in. for now, simon, back to you. >> and they in turn need to slash an awful lot of red tape, as you know. >> and from speaking to executives last night, that continues to be the big drawback. yes, it's an attractive country to do business in, but one of the big challenges is bureaucracy and red tape. let's see if the comments on those specific challenges when he speaks. >> okay, seema. thank you very much. still to come on the program, the president and ceo of t.d. ameritrade fred tomcdyk will
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welcome back to "squawk on the street." and the dow is up 52 points on the general rebound and we head over to bob pisani in new york at the glow are ball exchange conference. good morning. >> good morning, simon. in all of the brokerage firm s are er hooshgs and of course, one of our friends and one of the people that we have known for years fred tomczyk, and i want to get your take on the markets and we are near historic highs on the s&p 500, and your thoughts on the markets now and what are you hearing from the retail investors? >> well, right now, the markets and so much stimulus in the system, it is hard for the
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investors to determine where to go. our clients are continuing to go into the equities, because they see it as the most promising asset class in a tough world right now, and our investor movement index, and we have seen people who are investing in investment energy stocks, and they have started to take some money off making money on it, and rotating back into the momentum and technology-oriented stocks and particularly the ones that have been beaten up recently like netflix and apple. >> and the bond market, a lot of confusi confusion, because it seems that the fed is going to be raising the rates, but maybe not that much, and we have been predicting that the bond prices will go down for a long time, and it has not happened to an appreciable extent, and what is happening? >> it is the equity option oriented and the interest rate environment, but i think that what is happening in the bond market right now is, you nknow, the fed funds, and i'm not convinced that it is going to be moving in june, because i think that the brexit vote is going to cause people to wait, and the jobs report did not help, but
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the bond curve is where it is more sensitive and the yields are more low now. >> and you spoke extensively at the conference about the growth of the robo advisers and how it is impacting the space. eli from betterman is speaking here for the first time and that is interesting, and how much of the financing do you believe can be automated? >> well, the trend is going on in all businesses, and it is really being driven by the things like social media, and mobile and data analytics, and people are going to get more intelligence, and things that are normally done by a human being, and the personal finance is no exception to that rule, but however, in our experience of the people with the serious money, they want to talk to the human being even though they are much more oriented to the leverage technology and how they do that and how frequently they do it. >> and how are you are dealing with that at ameritrade, and people who are wanting to speak
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to the personal adviser there, and you are not going to be getting rid of that, but is most of the trading done on the mobile phone, and that is essentially where we are at? >> well sh, on trading, no question, more and more trading is going to be happening on the mobile. mobile in our, and we have had o one-third of the new clients logging into us coming through the mobile devices at about 18% of the trade volume. if you are looking at the growth rates projected out, mobile is going to overtake desktop at some point in the next three years, so it not going to be changing. but when it comes to the long-term investment, you will see a more leveraging of the technology in the space of people making technology investments. >> there was a role of the e e fiduciary obligation, and there was a concern about this, and is this going to be creating interest in low indexing funds or the etfs for example, and what move s as are you seeing t in space?
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>> well, trend of the etfs and the low cost index funds has been going on for a while, and this is going to be in the ira department, and that is because of the way that the department of labor has put it in and what it means and how it is going to be enforced. >> my colleague simon hobbs has a question. >> yes, on the fiduciary question, and the retirement needs of the clients and the needs ash and this is an area th you could capitalize, and we have not talken about it, because it has fallen off of the news radar, and can you give us color of the seismic change really and what effect that is having behind the scenes of the industry? >> well, it is still early, and it means that people are still trying to interpret it, and one thing that people have to understand is that from our point of view, and i think that most in the industry, they are fine with the fiduciary el role, but they would have preferred it came from the s.e.c. that harmonized with the 40 act
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fiduciary rule, and now we have a new rule, and how it applies is different and it is going to be causinging people to the make changes, and it is constructive to look at the 401(k) space to interpret what it means for the ira market. >> before we let you go, and obviously a hot presidential race are, donald trump versus hillary clinton, and your thoughts on the race, and what impact it might have on the trading and the markets? >> well, i make it a habit not to comment on politics. but i do think that in the market, elections such as this one, when you have such a different agenda between the two will cause volatility in the short term, but in long term, it won't matter that much. >> thank you, fred tomczyk at the sandra o'neill conference. >> now we go over to you.
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>> thank you. and we go to kayla with more on the meeting in washington. >> yes, this morning, prime m minister of india is going to be a addressing congress, and when talk about what that means, and the payment disruptor continues, and what is the ecommerce effect in india? we will have more on that coming up. ♪
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through finance and philanthropy. carl icahn talking about the cutting edge on "squawk box" tomorrow on cnbc. good morning, 8:00 a.m. in amazon headquarters, and it is 11:00 on "squawk alley" and we are live. ♪ ♪ i will tell you a story are about the joker and the thief in the night ♪ good morning. i'm carl quintanilla, and jon fortt is off today and


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