tv Squawk on the Street CNBC August 22, 2016 9:00am-11:01am EDT
oil prices have been weaker this morning as well. right now, wti is down by 2.6%. that's a decline of 1.28. to 47.24. >> that will do it. you will be here tomorrow. andrew is back i think. >> that's right. >> first time the three of us together in like six weeks. >> we have that going for us which is nice. join us tomorrow, "squawk on the street" is next. good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer in the new york stock exchange. welcome home, jim. david faber is off. soft start to what may be an eventful week. yellen in jackson hole on friday. m&a, assorted fed speak to get us started we'll watch europe on the stronger dollar. that plus some production news out of iraq pushing oil down this morning. our road map begins with pfizer agreeing to buy medivation for
$14 million in cash. stock is jumping on the news. viacom saga is ending. philippe dauman out as ceo and kobe bryant can add venture capital to his resume. he will join us later this hour. futures in oil moving lower with interest rates and janet yellen's upcoming jackson hole speech on the minds of investors a long way between here and friday, jim, but enough to keep us busy. >> there is actually a lot of corporate earnings. we just did nothing that people that jumps out at people. i look at work-day, pvs, incredibly strong, and i am concerned that we are going -- the undercurrent is going to be oil going down because you mentioned iraq and there really wasn't anything fundamental. i watched oil last week and said, give me a break. i mean there's just the glut has increased, the rig count increased. it's up to near 50 in the oil spigot just turns. i think we're kind of in no man's land. remember, there are not a lot of players. not a lot of players.
>> yeah. in terms of producers. >> well, we also when we come in this week just say, well, this is a week that historically, i remember this week unfortunately in 1987, this was the beginning of what we thought was going to be a very bad part because there was just suddenly the valuations were crazy. i don't see that. the fed is going to talk about it all week, then we're going to talk about it all week. talk about it all week there will be a negative bias to the week. >> last week dudley telling us to mind our manners and now fisher, on sunday, saying that we're closer to the target than people give the fed credit for. >> you look at the employment number you're going to say that. i think that one of the things they're looking at, not looking at wage growth because there is not a lot of wage growth, retail sales because frankly the aggregate retail sales are not that good. i could go into about retailers. i don't think they want to get caught flat footed with a good employment number coming you. >> you think it might be. >> i think it might be.
jobs are good. housing is strong. i mean it's not just good, housing is strong. and, you know, employment is strong. so i think that what they feel like is that, you know, versus last year where we had a lot of good things going on, but we had china, we don't have any intervening events. we've passed brexit. i'm not making a case for it. i'm saying it's not the end of the world. not the end of the world. >> yeah. certainly we're going to get told this week that a little news on housing, toll brothers. what do you make of this grinding higher in a sub-1% move environment which has been 30 sessions without a 1% -- >> is that not amazing. look, i'll tell you what i think. i come in, medivation, david has been talking about this medivation biotech company, not even that big of a company, couple billion dollar franchise, and i figure it will get a bid and it's got to be where it is. it gets a huge bid. we're talking about five-year anniversary of apple and not hearing anything negative. apple is important. tech has been a leader.
tech has been amazing. tech comes in we get bids. we've seen what i regard international move. you look at the international stocks they're not poised for stronger dollars, but the international stocks just grind higher as you say. the oils have been leaders. i mean i just find that other than the airlines, even the rails have been good. you come back and say to yourself, are we set for a rate hike? we could sell off and still be higher than we were 60 days ago. >> the market can afford it in a sense? >> yes. again, i -- do i think the economy is strong enough for a rate hike? the economy we're the best of a bad situation around the world. but we don't have something exogenous outside that is really bad. i think look, brexit, slows britain but it turns out britain is not that big. the european numbers carl, across the board are strong. when you hear something, when you like listen to some of our retailers and europe is just -- it's over and over again you hear europe is very strong. very strong. we'll hear that from pvs this
week when they're up. latin america, you were in brazil. carl, the chatter about brazil is yes, deere reported last week, deere is huge in latin america. what did they say? we're seeing an uptick in brazil. we haven't seen an uptick in brazil since 2008 and they're talking about government stability. carl, government stability. >> i know. some people they are surprised at how much relative stability -- >> you were down there. i now you sent andrew to bring soap. i mean, what can i say about brazil. they can make a comeback, then a lot of companies that are there can make comebacks. >> right. you mentioned the pfizer deal announcing $14 billion all cash deal to acquire medivation, 81.50 the price, the dow component does add the leading prostate drug to its portfolio that generates $2 billion in annual sales. does this mean there's another door opening and this -- >> yes. look sanofi, we thought they locked it up, opens 22% of
regren ron. in no mod moods to sell. does it matter? sanofi has a war chest. they're going to do something. david is not here but what he would tell you, listen, they were ready to buy. not going to sit there and say we don't need anyone. you'll see biomarine, i don't buy that, biomarine did a secondary. i like jjb very much. it has a good stable of orphan drugs. this is not an orphan drug company that sanofi was trying to buy. this company had a major cancer franchise that gets slotted in pfizer which means growth. >> yes. having already done several measures in the past year and a half. >> look, they wanted allergen. allergen was a very big deal. this is not nearly as big a deal. i think they paid a very full price for medivation. they don't care. a lot of these companies, other than j&j, are itching. j&j had $18 billion in cash and didn't do a deal last year, waig waited for the biotech to come down. i wonder when they start saying we have to take a look, j&j stock at 119, at 126 not long
ago. the group is in play again which is great for -- you asked me about the market itself. biotech, transports, airlines, where there's chatter on takeover, where you have entertainment doing better, let's not forget that. but you've got health care doing incredibly well. internationals are just so strong and tech is so takeover filled, i mean i'm putting together a list for "mad money" tonight, which is back on because the 70-year olympic run is over, and i'm -- >> people were tweeting you this morning saying thank goodness "mad money" is back. >> i did "mad money" from my garden on thursday and friday the numbers were extraordinary. i got more tomatoes than i ever had. >> entertainment, viacom is confirming it named thomas dooly as intervim ceo, announced the resignation of dauman in the deal that does end the legal fight between the board and sumner redstone's national amusements. dooly has been coo will become interim ceo until september 30th
when a permanent decision is made. he and dauman are like peas and carrots. >> i thought so. i think the chatter will be that cbs, that channel 2 -- not the drug story. cbs is going to be in there and something can be made happen. now if i were les moonves i would dislike that talk intensely. because i think that moonves has put together a company that's under valued, but the studio seems a little bit shy of hits, the stuff that viacom puts out is so easily time shifted that you can watch it years later. like i "i love lucy" but cbs has a lot of live sports. viacom is left behind. so i don't know. i think it would bring down cbs if they had to buy it. >> you seem to be saying the hard work begins for viacom. >> viacom, look, we've had some pretty good numbers in that space. time warner, jeff, he put up a good number. i think that disney when like at
it, disney stock is not down. i mean again, we did get a lot of negative chatter on espn. they can't get past it. but i do think that viacom is only up because of takeover talk. on fundamentals there was no reason why it could be none. >> been a lot of pieces, think pieces about things they could have done two years ago, five years ago, that might have started to be -- started to pay off benefit us. >> they didn't see it coming, carl. i say, look, i am on -- i was on -- a dozen conference calls last week, all they're talking about is digital. digital. we have big digital presence on olympics. you know, you'll get these companies that just say listen we have to go in more digital because the younger people are there. jc penney, they want to attract the younger they have to go digital. jc penney. big commitment. >> yeah. >> a lot of it is out of flyers, nobody likes flyers, but a lot is recognition that the
millennials aren't watching old tv. or if they're watching it they're not watching commercials. >> a different ball game for sure. trying to get -- >> did you watch a lot of stuff on your cell phone? >> no. >> really? >> you mean the olympics or -- >> i fully converted. >> wow. >> i have the disney download. i have everything on my cell phone now. >> you've been doing that, though, with football for a long time. >> the whole pan know ply. i workout to shows that -- some bbc special, netflix has a lot of new programming. that doesn't seem to matter. >> the thinking was that sports was immune and clearly -- >> no. >> it's not. >> less and less certain. olympic sports. i think that olympic sports like ncaa and march madness have a quality to them. that key lacrosse, you know, championship involving summit high and dellbar doesn't happen. espn probably wanted -- espn 12 high school sports in the east, but no, there's not a lot of pull. and nfl will have pull.
and nba the finals have pull. maybe if we had anyone to ask about that, that could be exciting. >> we are going to talk to one kobe bryant in a few moments as he's ringing the opening bell this morning. >> there's a guy who brought a lot of game to the nba for 18 years. >> and a keen business mind and curiosity about business. >> everyone has known he is the most rigorous of thinkers and exciting to see what to many is a hero. of course he went to lower marion high school. he hasn't probably stepped foot in philadelphia other than when he xwaj to the sixers. doesn't matter. this guy is a thinker and i want to hear what he's thinking about apple. right? >> i imagine he has thoughts on that. >> i know. >> pokemon go which i think peaked. >> really? >> sharmander at the coliseum in italy, i'm a seller. >> mark that down. >> geez, we had a surprise japanese -- >> did you see shinzo abe. >> pushed nintendo.
that was good he pushed nintendo. had a bad quarter. he's had a bad quarter. i'm a seller of him. his earnings per share numbers are way coun. >> as we said kobe bryant is going to join us. nba titles, olympic gold, had it all, but his next stop is the investment world. he's going to discuss his $100 million venture fund after he rings the opening bell. take another look at the premarket as the nasdaq now has eight weeks up. the longest streak in six years. for nine weeks you got to go back to basically the haynes bottom in 2009. >> that is something. that says something. >> more "squawk on the street" in a minute. you'reere to buy car
busy week for tim cook of apple celebrating five years as ceo. he spoke to the "washington post" in the profile last weekend. stock in that time, 114%. >> yeah. he gets -- what can i tell you, the fact it comes down, gets little credit for what he's accomplished. a service stream revenue north of $28 billion that no one has thought -- people say he backed into. even something good they say well, he didn't depend on that. hello. is the guy not cerebral, does he
own the car? not yet. the one that's disappointing i find the watch, got the upgrade this morning. i did the upgrade. it's like okay, do something. pronounce barbra streisand's name right, whatever. >> are you -- i mean we're in the cutting edge now of a new phone cycle. >> yes. >> does not sound impressive. does that matter? >> i love the low expectations of the phone. >> you do? >> i keep remembering lowell mcadam the ceo of verizon saying i'm going to like it and want to upgrade. he's head of verizon. he has a huge amount of customers. i think there's opportunity and i think the service stream is a very lucrative eps service stream, great margins. write this guy off. remember '93 when there were guys that said you have to sell sell. came on "mad money" and said listen, things are okay and people said oh, it's desperate. he came on "mad money." he's desperate. i don't know. i was desperate to catch 16 points. >> what about when target says apple sales, electronics, down
double digits bother you? as you said last week target's problems are target's problems. >> brian cornell identified cvs as a problem. what larry merlot said on the css call said it's working terrifically. the products that target -- first who goes to target for apple. would you give me a break. don't go for food either, i have to tell you. i mean that was another one that hurt their margins. to blame apple, to maim blame apple is to say you know what, we are going -- we don't want to admit that there are other issues. they had a gross margin progression, but apple sold a lot more -- they sold more ipads than i thought, lot of ancillary products. we'll hear from best buy. i don't know. i didn't like that comment. i'm trying to be diplomat here. but that was the kind of comment that made me say the fool is in the stars not ourselves. and one of the stars tim cook deserved better. >> you did make that point as walmart came out with their
numbers the day after that. >> walmart i think is the story about like henry ford. paying his employees more. he's started to -- he was losing employees to other places and now you don't have to train them over and over. remember, costco said the big edge on walmart he didn't have to spend a fortune training people. if they're staying you don't got to train them. i like how mcmillon has done this turn. >> apple services heard about this thing with barbra streisand and surriry. >> what is that? >> talking to npr and said siri pronounces my name wrong. she said it's streisand with a soft "s" like sand on the beach. >> 317 million other people that have to get in line. i know barbara from way back he's and a stickler. maybe it's a brooklyn thing. >> but at least one element of apple service has gotten it's part of the conversation. >> i think the problem is amazon has got its own pronunciation game that's a game plan that's
good and look, i think that apple is so big and so visible no matter what it does, it's like the 27 yankees. i don't know. how can they ever be good again. they won a lot of championships. like the lakers. >> interesting. >> because -- >> just as you say that on the floor of the exchange this morning, nba all star, five rings. >> at least five. >> kobe bryant. >> you could argue his best days as an nba player are past that's different than tim cook because he's not playing. he's not playing. but i do -- look, i just -- i'm kind of in awe of him as many americans are, because he never stopped competing even though i think some of his teammates weren't as up. his last year, last year, i think he played so much better than everybody else. i will not ask him about that. it's about business. he's a hero. >> but incredible focus and i think in business we'll be looking for the next spot, the next play.
>> i don't think you're ever going to see him on tv saying i'm kobe bryant, and i like my new video game. i think he's the brains behind the operation, not i'm kobe bryant and i want you to buy my product. >> yeah. >> although i probably would if he said it. >> interesting to see if later on he lunlaunches a fund which individuals can. >> i think people would love that. >> i had bill knight on from -- phil knight on nike. phil knight thought he was going to go out of business every day until he became the 25th richest person in the world. michael jordan still has resonance so kobe could have res sew nags. >> we will talk to him after the break as he makes his way to the podium to ring the opening bell. that's coming up around 9:40 eastern time. in the meantime we'll get cramer's mad dash and count down to the opening bell on this monday. don't go away.
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here he is, kobe bryant of the l.a. lakers, pointing to cramer as he's about to ring the opening bell. we will talk to him and jeff stibel as they launch a $100 million venture fund. lot of management changes today, all sorts of companies. >> yes. i really like management change. i've not been a fan of valeant because of the balance sheet. strong ceo could change things. paul is a man who has been cfo. bill ackman, closely affiliated with valeant used to have a stake in zoe ed is. animal health. juan comes on every quarter for "mad money." i'm telling you the cfo is really good. going to lend an element of stability which is what the bulls need.
bears, i don't know. i don't think they're prepared for this. joe papa may have had a very good conversation with him, why leave zoe et tis which has been a success for valeant which is going to be a challenge. i like this move. valeant shareholders should cheer it. >> yeah. i'm trying to think of a corollary. like someone leaving x for y. >> if you saw someone like mcer inry ineny from 3m to bogey -- mcinnerry to boeing, ed breen who moved over to do great things at dupont, typically a cfo is not as important, but here it is. $30 billion in debt. i think this is an exciting move. again, i'm not a big fan of valeant but get rid of debt and there is a guy who can do a lot of financial good. zoe tis since pfizer spun it off has been on fire. i like this move. great cfos are hard to come by.
you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in about two minutes as we kick off a week that's going to have its share of earnings, best buys, hp, dollar generals, some macro data, mostly housing. >> right. >> revised -- >> janet yellen reports this week. that will be excited. she's given you almost a triple there. i saw something that i thought was very interesting. that needum downgraded work-day, work-day reports this week. that's a take your life in your hands saying work-day is going to have a shortfall. i don't know. i think that work-day is in there going up against oracle. oracle stock has been stalled,
work-day's stock saelds. salesforce.com stock stalled. the only one that has -- wow, there's not that particular group. the actual cloud stocks have not been that strong. >> yeah. >> to be honest. they haven't. adobe being one exception. adobe. good company. >> we did see ibm with some cloud deals last week. >> yeah. that stock has stuck at 160. i would have thought it would get off the dime. i didn't think it was that bad. ibm had a run from a lower price. people keep expecting fireworks from ibm. the fireworks is from retail and foot locker which was a munster quarter. >> amazing. >> so there we got -- hey, i know kobe is not here to talk sneakers but they saw good growth from under armor and mike and put up fantastic numbers. i like that. >> brings to mind today's downgrade of urban over at goldman. >> that was -- >> from newutral.
>> rick put on an amazing show and talked about brand and premium pricing. he is expanding overseas. i would not sell anthropology. if anything the mall is back and back right there. fascist, fascist! >> there is the opening bell and a look at the s&p at the bottom of your screen. there's kobe bryant. basket legend and jeff stibel, co-founders of investment platform bryant stibel and we will talk to them in a few moments. at the nasdaq, xact, etf provider. >> did you say the mall was back? >> i have to tell you, there's an upgrade today, i want people to focus on this, l brands, leslie wexer in, hold the buy at goldman. say there's a turn in victoria secret. i agree. wex has spent time getting rid of promotion, bath and body works numbers were good, pink, pink is -- the mall is dead, why is pink doing well? l brands goes highers. urban outfitters the mall goes higher. jc penney with a remarkable comp
call saying they're going to take the wood to series, adding appliances, spending money on furniture and talking about retail tainment. i love that word. try to google. >> so macy's is closing stores. >> macy's and target secular losers this quarter. i think macy's closing is good for dave and busters. i like that -- i thought that it was amazing when you heard jc penney on the conference call say listen, we are going to take share away from sears. we're taking -- they called it the smaller footprint, i think a very gentle way of saying that sears has $18 billion in revenues. what a great conference call that was. jc penney talking about the mall if you the right stuff, appliance, furniture f you have plus sizes. this was an exceptional quarter for a lot of stores in the mall. and they -- some people ought to stop complaining. like target said traffic is a
problem. yeah. i mean like traffic meaning i don't want to make the right turn into target. >> yeah. negative traffic for the first time. >> negative traffic. >> many, many quarters. >> that was -- brian cornell came in hot and they have to find out what's the problem. it's not the fact that they turned over the front end of the store to cvs. cvs had a remarkable quarter. walmart was terrific. but the mall. i got to tell you l brands, this is going to resonate. l brands is all mall. it's 100% mall. victoria's secret they make a comeback there it will be amazing. i will have to check that out multiple times. >> the other retail based research was jeffery's on estee lauder cutting their target. >> i did not think fe breesh yo had a painful quarter. hong kong really bad. really bad last time. this is a quarter where sephora, which is in jc penney, had a munster quarter. we're going to hear ul ta, estee lauder has a great relationship with ul ta.
after iff which provides a lot of fragrance to estee lauder reported a great number. not happy. >> yeah. >> it's too bad because boy, the selfie has made it so you can't walk out without makeup but skin care, people should realize when you use makeup you need skin care. i know this. >> this is part of your long-time thesis. >> you need skin care bad. people ought to use skin care. i don't want to buy estee lauder. i feel terrible because it's incredibly run. but no more excuses. as i told the philadelphia eagles when we broke the huddle on monday because coach peterson let me break the huddle take no prisons. they took a lot of prisoners. >> barron's on facebook looking for 20% upside on ad growth, got kevin of instagram on the cover of "forbes" this week. >> i don't know. my travel trust owns facebook. i felt jianged by that like "sports illustrated" -- jinxed by that. "sports illustrated" curse. the stock will not go up on
that, stock goes up on the quarter. and i saw they sold stock for charitable purposes. the man clearly at the cutting edge of charity. facebook when you have all this publicity it's going to be good that ain't cutting it. it's not going to cut it in this market. oil is more important. >> certainly not this morning. the dow is down, 60 some old points. to bob pisani on the floor. >> he's right. jim is right, it's oil. in fact if you look at energy stocks are the weak link here, particularly the high beta energy names, chesapeake, marathon here. the u.s. dollar is a little stronger. there's talk of iraqi production increases. there's talk of peace efforts from nigerian militants. down about 2% on oil and that's your weakness we're seeing today. bear in mind, while we've been in a very narrow trading range there has been a clear rotation in the market is doing very, very well here. emphasize the winners right now. the tech names, have been outstanding this quarter. banks were better in the early part of the quarter. faded late. still did well. materials, industrials, all your
cyclical names, while you're more defensive names, your telecoms and your utilities and consumer staple names all the market leaders earlier in the year if you put them up to the downside right now. so those names are all low volatility names. and low volatility was a big, big play for the last couple of years. but it's dramatically under performing right now. put up low volatility and you can buy the strategy at an etf versus say high beta, high beta stocks like oil names, some certain oil names, tech names, bank names that move more when the market moves a little more dramatically outperforming this quarter, low volatility names, consumer staple names, for example. so there's been a clear rotation that's very healthy for the market when it's moving at the highs right now. so let's take a look at some other ways of looking at market health. the average stock is doing a lot better. so if you look at the s&p 500, just this month, i'm choosing this month up 0.4%. but if you equal weight the s&p 500 buy that strategy all 500
stocks weighted the same, it's more than double the outperformance. this is a simple way of saying the average stock is outperforming the major indices right now. you go through the major sectors here. energy stocks, for example, your average energy stocks is actually doing better than the s&p energy sector. the equal waited average energy stock is up 6%. s&p energy sector which is market cap weighted up 4.5%. same with the other indices. average tech stock is doing a little better than the equal -- than the s&p tech index which is market cap weighted. the average consumer discretionary stock same situation up fractionally where the consumer discretionary is to the downside. health care is flat if you look at equal weight index. health care, the actual sector health care is actually down in the s&p 500. so again, average stock doing better. advanced decline line longer, no technical dedeterioration, market holding up well. final point on earnings by the
way. we have 96% of the earnings in right now fort second quarter reporting. down 2.3% right now. q3 and q4 slightly to the upside right now. so bottom line, guys, is looks like first quarter was the actual trough for earnings. back to you. >> thank you very much. bob pisani. they say ringing the opening bell at the nyse is like winning an nba championship. our next guest knows a little bit about both. joining us in a cnbc exclusive, our bell ringers and co-founders of bryant stibel, five-time nba champion kobe bryant and former web.com ceo jeff stibel. guys, welcome. congratulations both sgluf thank you. >> great to see you. >> good to be here. >> first time here. >> first time here, yeah. first time here. looks a lot different than it does on television. >> yeah. >> i must say. this is a huge honor to be here. >> you certainly obviously are drawing a lot of interest. what's the mission here, guys? >> it's incredibly simpel. we want to help tren tr
entrepreneurs suck snead in what spaces. >> specifically we're focused on the converges of technology, media and data. we're looking to go not just for evolutionary shifts but revolutions and we're seeing a revolution right now in those spaces as they collide together. >> one of the things that candidly there's a lot of your involvement that i didn't know about ahead that's because you're a student and know not to come out until you are ready and have one gear. >> yeah. >> you've been involved? >> it's whether or not i had a passion for it. right. you don't want to jump into something if you're not passionate about it. jeff and i have been quietly building this four years and getting a chance to learn each other but learn the business and see if i actually love it. and i got to tell you, no greater feeling than actually helping entrepreneurs be successful and a part of something that's actually helping their dreams come true. that's -- there's no greater feeling. >> it's clear you are not a face man, this is not an endorsement,
this is actual involvement, scopely a big hit. >> hottest area. >> could scopely is on fire right now. and that's the beauty of it right now. you see me. walter is a great ceo. our other companies being successful. >> you have legalzoom. talking about serious companies, we're behind the scenes, not in front. you're right. i mean this isn't about endorsing. this is about helping entrepreneurs build their companies and putting them first and foremost and why you never heard of us before even though you've heard of us before. >> in 20 years, are we going to be talking about your legacy in basketball or investing? which would you prefer? >> investing. listen, playing basketball, you know, the focus is always on winning. winning championships, winning championships. championships go come and go. it's going to be another team that wins another championship, another player that wins another mvp award. if you want to create something that lasts generations, you have to help inspire the next generation. right. they create something great.
and then that generation will inspire the one behind them. that's when you create something forever. and that's what's most beautiful. >>nd is there an ath -- and is there an athlete that has done that the way you do it? >> we all do it differently. this is one of my passions. this and story telling. this is where it's at for me. and so we're absolutely one gear. 100% laser focused. and off we go. >> who has technology you're excited about right now? you mentioned video and entertainment. obviously communications. who is the role model for you? >> well, when i look at role models i look at them differently. i don't look at exactly how they go about doing it but look more to the person and how they navigate through the ups and downs of what they go through. that's the most important thing to me. how are they able to balance the emotions as they go through the ups and downs. and when you learn how they can navigate through that then personally you can navigate through anything and we tell our ceos that all the time.
not necessarily the action, but how you navigate yourself through the action and lead your company through it. >> let me ask you, legalzoom, i thought one day they would come public. you do web.com. is the plan to capitalize and have the same kind of end market where we all get to own something that you guys put together? >> that's our hope. that's our gol. for sure. and when you think about translating what we're trying do, helping entrepreneurs with their passion into companies, what we're looking for are stable, robust companies, that can transform industries. when we talk about value growth, we don't think there are two sides of the same coin. we think they're the same thing. value in great companies and transform them into, you know, into growth drivers whether it's scopely or legalzoom or alibaba, which went public earlier. you know, our focus is on building these great companies, telling the right story, and transforming them into whether it's public companies, companies that sell, or, you know, behemoths that go on to be
fortune 500s. that's what we're looking to build. >> we talk about valuation all the time. is your sense things are expensive. a report lyft is having trouble finding buyers. >> they found one. >> yeah. >> look, companies are always expensive. companies are always cheap. rough' g you've got to find the right balance and think about how you're investing and building companies. people thought alibaba was a cheap company at one point. they thought it was an expensive company at one point. where are they headed? alibaba is democratizing e-commerce in asia and they could be doing it across the rest of the world. if you look at scopely, you know, they're doing what was done in other content areas in gaming. so fundamentally different. was it an expensive valuation with the last round when they raised all that money. you could say that or say it was incredibly cheap because of what they're about to do, same is true of legalzoom and the others. >> one of the things that fascinated me you have skin in the game.
you saved your money. >> oh, yeah. >> you did well and then invested. any advice for athletes now coming out who get paid endorsements and seem broke in a couple years. >> here's the problem. once you retire, you don't have that source of income that's coming in, right. even if you save over 15-year career, you're spend habiting remain the same. the well will run dry. unfortunately for us athletes retirement age is 32, 34 f you're lucky, 37 like myself. what comes next? so the question needs to be what comes next. what can i do. what is my passion. not where i can create the most value or generate the most revenue but what is my next passion. when you find that next passion everything else will make sense. that's the hardest part for us. >> now i know that scopely is video games, i think video games are the hottest part of technology and the chips that go into video games make it so it's life like. this will be like what nba 2 k for tv shows that have characters. >> it could be. >> absolutely. >> absolutely could be. >> are you getting good at
reading balance sheets and income statements? >> no. i'm getting better at it. it is not my strength. right. so, for example, when jeff and i sat around and said we should do this company, his mind automatically went to operations, mine went to story logo and, right -- we just went different ways. >> we're a team. >> right. >> same at the core, but just two different sides of the brain. >> i have to ask this, how -- just as a person, i mean, i've idolized you from the days you came out of lower marion. >> thank you. >> how can you be so humble. honest to god. he asked you a question and you could have said i'm getting good at it. you said i'm a student. >> no. >> that's been your way. >> but we have to constantly learn. i mean that's why the -- our mantra is value growth. to growth you have to constantly learn and move and constantly improve. that's the key. that's what makes life fun i think. >> ceo you admire more than others? >> ceo i admire more than others. i work very, very closely with mark parker and mark has been a great mentor of mine for years.
there's times where i will -- i can't sleep and i will shoot mark a text message about, you know, i'm having trouble building this company here what do you think about this, that and the other, how did you do it and he gives me very detailed responses. so, you know, mp for been everything. >> i've shot him an e-mail to get -- because -- he comes back with me, [ inaudible ] that guy is on his game. >> always thinking. he's a thinker. and what i love doing is cold calling people getting their book list. what did you read? what did you learn? how did you learn it? you know, those are the questions. >> lebron has a new show on our network called "cleveland hustles." any advice for him getting into the world of media? >> no advice really. it sounds like this is something he loves to do and passion about doing it. that's the key. if you have the love to do it, you know, you will be able to handle whatever bumps come your way. i'm sure he will be just fine. >> is it possible, i mean when you do bring one of these companies public do it here.
okay. you can ring the bell again. it's exciting. we don't get a lot of -- >> done. >> we're getting viewers asking, you know, can i get in on a b round. and at what point do outside investors have a chance? >> we're investing our money. we want to learn, grow, do it on our dime. at some point we might raise money. we're not prepared to do that now. for some of the great companies jim said it best, let's get them public, out there and then people can buy them in the public markets. >> when you look at your career, all right, there's a lot of times when you had to carry a team. this seems like the old days when you had the full panoply of guys at the lakers. >> yeah. >> last few years i thought you had to carry it yourself. >> that's the beautiful part about business. not restricted by salary cap regulations. right. the roster is not -- >> careful. we might have to start giving people raises. >> get a chance to work with people that are -- that think the same way and have the same kind of passion. it makes for a beautiful environment. >> by the way, you say you're 37, but not for long.
>> yeah. >> happy birthday tomorrow. >> yes. >> happy birthday. >> thank you. >> you'll come back. >> for sure. >> as -- >> absolutely. >> as it develops. you talk about marketing and story telling the logo, which we saw earlier today, is kobe's and it's a reference to the piano which we've seen you play for years. >> yeah. it's the piano where i originally started and how to create beautiful music together in harmony and i said that looks like a paragraph. that's funny. you know, it's all about growth. >> growing. >> and balance sheet. >> people ask me, is there anyone you would still be exciting to get the autograph. kobe. i saw you signing jerseys when you were in new orleans the last time and there was a little kid crying. what's the matter? he goes kobe signed my jersey. you are just the kind gif who represents us great. >> thank you. i appreciate that. thank you very much. >> one last thing about coach k. >> yes. >> 28-0. >> yeah. >> as head coach of olympics. amazing. >> it's amazing. but the biggest thing that he did for usa basketball is that,
you know, he brought in vets and generals to speak to us, right. what he did is he had us, made us understand that we are not playing for us. but we're playing for the u.s. that is the big change. that's a monumental shift. so congratulations him. >> congratulations to you guys. thanks for coming in. >> thanks for having us. >> dow is down about 60 points or so. we have a lot more "squawk on the street" continues. don't go away. what powers the digital world? communication.
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- diversity isn't just important for your financial portfolio. it's also important for your life. celebrating, welcoming, and surrounding yourself with people of all kinds is an investment in both you and your community, and we're all the richer for it. oil prices a reason the dow is lower this morning. to jackie deangelis at the nymex. >> good morning. that's right. what's interesting today we have expiration of the september wti contract at the close. so that could create volatility if you're looking at the september prices just over $47 a barrel, a decline of a little bit more than 2%. gasoline is down in sympathy here but retail gas prices are up slightly. the lundberg survey the national average at $2.17. we've seen a 20% move in wti prices in the last two weeks alone. a little lag effect before that
catches up at the pump. meantime the dollar index has been a large part of this trade, trading just over 94. it's relatively flat and calm today. so that may not move things around too much but that's been one of the reasons that we've seen support. of course once the contract does roll over, traders are going to be looking for wti to hit that $50 mark. we'll be watching as well. back to you. >> jackie, thank you very much. we'll get stop trading with jim after a break and today at noon on the halftime, core vec's keith meister a lot on the agenda including his battle with williams. we're back in a minute. watson, let's review the electronic medical record of the next patient.. no problem. it's a pretty huge file. done. sorry for the wait. that was quick. as part of our research, i also compared lab results with notes about prior treatments, then cross referenced it with thousands of medical journals. and i get the benefit of much more data, and a lot more time to plan the best treatments. i stay focused 24/7 and never sleep. you sound like a lot of medical students i know.
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♪ time for cramer and stop trading. >> the whole move what you've been very good about talking how fabulous, started with the food group and consolidation today. credit suisse goes in upgrades hormel which reported last week. i liked hormel it's a growth food stock. he has been on "mad money" many times. the one to watch to see if the money can cycle back. a good piece about kimberly
clark having to be tough and layoff people. the consumer package group has stalled and so by the way has like the mcdonald's cohort which has been awful. watch hormel. could this bring a return back into the food group given the fact that this does have great growth and hain was disappointed to mes last week and i was surprised and i was let down. s i was let down. but hormel is very well run company. watch it to see if it has gr gravit gravitas. >> good one to watch. what's on mad tonight is this. >> american tourre, a company people don't understand one of the great growth companies that's real estate investment trust. jim has done a remarkable job. world wide tourre company. when you're trying to get better cell reception, give him a call. i can't wait to speak to him. >> you are fully charged. >> i missed the show. >> yeah. >> what can i say. >> back in business. >> i missed you. did such a great job in brazil. i mean i just loved you there. i bought the shirt, bought the
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good monday morning. welcome back to "squawk on the street." i'm carl quintanilla with kayla tausche back. mike santoli at post nine of the new york stock exchange. markets having a tough time getting out of the gate. a lot of that is because of oil. down more than $1. almost 3% this morning. other than that, some m&a news, fed speak we'll get to it all. >> hardly a quiet monday in our road map starts with the markets. stocks moving lower as investors look ahead to janet yellen later in the week. >> plus, do the right thing and step aside, the words directed at donald trump from a former gop official under president reagan who will join us to make his case. >> and merger monday. pfizer buying medivation in a deal worth $14 billion. what it means for both companies
and the pharma sector overall. we start with the markets which have been closely watching a flurry of fed speak. janet yellen speaks from jackson hole on friday. joining us is youren timer and steven stanley. jurren, start with you, how much of this week's market action will be chalked up to what doesn't happen until friday. >> we're back in this familiar dance with the fed that we've been in basically all year. we saw this in june, you know, the fed wants to raise rates early in the year they wanted to raise rates four times and then two times and now they would be really happy with one and they're testing the waters to see if the fed will essentially give their permission to tight an the end of the year. i think september is out but december is a coin toss in the markets and that is a live meeting and all these speeches that you hear about, we're ready to go, basically they're
floating a trial ball tloon see if the market -- balloon to see if the market will go with that scenario. it's too early to tell whether they can. the rule of the game has been lately that the fed has this unspoken third mandate of financial conditions and they're not going to go if financial conditions are going to tighten either before or after a hike. so i think we're still in a kind of do no harm mode in the markets here. >> another question whether the fed could be looking for 3% inflation or hinging more of their active on gdp, do you see the goal post moving for the fed or do you think that we're just focusing so closely on it because it's the middle of august? >> well, i think more the latter and i think people are just frustrated because the fed has told us as. julien said they were going to go at some point this year and hasn't happened yet. people are, you know, kind of doubtful as to whether the fed will move and searching, trying to figure out how they can tell. >> well, steven, i guess the question now is, jurren said it
looks like a coin toss for december as far as the market pricing in a prospect of another hike. but steven, what would the markets look like if it were getting prepared? in other words, would the 10-year treasure yield be higher than $1.% or lower? are stock prices contingent with the fed being on hold longer than december? what will look for in terms of clues that the market is trying to sniff out a potential hike this year? >> the obvious would be short-term interest rates. fed funds futures, two-year notes, things like that. i'm not sure there would be huge adjustments in long-term treasure yields or stock market. we saw last year when the fed finally did move in december, the market took it pretty well. i think at this point we've seen a lot of groegs on the economic front and if the fed were to signal more clearly that they were going to go, i think the markets would take that okay. >> but jurren, the demand for treasures hasn't necessarily come from an expectation of what
the fed would or wouldn't do. it's come from the fact that you can't get yield anywhere else in the world, so international investors are coming back to the u.s. treasury market, that dynamic doesn't seem to be changing any time soon. >> yeah. we have two tides, right. look at just purely the domestic fundamentals here you could argue that 10-year yield should be closer to 2% and not 1.5 and that there should be some upward drift there as the fed looks to normalize policy. but against that, cyclical pressure if you will, there's this global tide, this relentless march lower towards 0 or negative yields. spanish yields are at 1%. does that make sense if the u.s. treasury is at 1.6. probably notp you have the two opposing forces driving or keeping a lid on rates. but just back to the earlier question, i think the signal from the market would be, that the odds of a december hike priced in at maybe 70 plus percent like a year ago without
the markets falling out of bet, without the dollar going way up or stock volatility going up or yields going up a lot. so if things remain quiet in terms of financial conditions, while the odds are reprised to more of a sure thing, that would be a signal that market is okay with a hike. >> we're seeing oil, steven, get reprised a little today after it being up 9%, up 24% in the last three weeks. i'm wondering if you think the commentary from opec members is more job opening or if the market is setting up for real action in september? >> well -- >> i think it could happen. >> sorry. >> steven, with aee'll give tha you. >> oil prices have been in narrow range for six months especially how volatility they've been over the last decade or so. feels that's more of a matter of supply and demand. anticipate not sure that's a function of what's going on with regard to the fed. >> jurren, your thoughts? >> i think the movements in the oil market are very
speculatively driven right now if you look at the traders, the numbers are all over the map. that decline from 51 to 39, i think was essentially liquidation by speculators and now we've had a pretty strong ramp back. we're up 10 bucks in almost no time. i'm pretty bullish on oil here and i think there is some movement in opec to curb supply as we move forward and the supply demand inball balances will correct themselves. >> what the rest of the week brings. thanks to both of you. >> thank you. >> a major pharma deal. pfizer buying medivation, deal worth $14 billion. meg terrell is back at hq with what this means. >> good morning, carl. pfizer is paying about $81.50 a share for medivation in cash. totalling about $14 billion. now that's about a 21% premium to where medivation closed on friday, although this has been a competitive process for some time. quite a premium over where it was earlier in the year. pfizer expects this will add 5
cents to earnings within the first full year. for $14 billion, what does pfizer get in medivation? a suite of cancer drugs, both approved and still in the clinic. the biggest is a drug approved for prostate cancer partnered with es stel his ands in testing for other cancers to extend the number of people for whom it could be applicable. and also two other cancer drugs in the clinic one advanced for breast capser and the other one in immunologicology. pfizer not trading too differently, but medivation trading up a bit. one thing we know this was a competitive process. several other drugmakers we know sanofi was in there and reportedly several others as well including gilead, celgene and merck. you can see these, celgene trading up 1.4% now. the question becomes, are they going to start looking around for other potential targets. jefferies putting out a note
today saying investors are at least spec cue lating sanofi may turn its sights on biomarine and two other drugs working, two other stocks working in the cancer space include tesaro and enclovis, ticking up on speculation they may be looked at as well working in the same class as one of the drugs medivation makes. a lot moving today and maybe biotech will be coming back on m&a speculation. >> that is certainly cramer's thesis. meg terrell. a look at crude falling below 48. where is it headed and what does that mean for the markets? we'll talk about that. a former gop official under reagan calling on trump to, quote, do the right thing and end his campaign. he's going to join us to make his case in a moment when "squawk on the street" comes back.
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it is the start of the first week for donald trump's new campaign team. our john harwood is in washington to see how things are going so far. good morning, john. >> things are going so far the way before. new campaign manager but same donald trump. here is kellyanne conway yesterday on abc's "s this week with george stephanopoulos" on how trump behaves towards other people during his campaign. >> i don't like when people hurl personal insults. that will never change. that's not my style. i'm a mother of four small children. it would be a terrible example for me to feel otherwise. >> do you think mr. trump will change? >> he doesn't hurl personal insults. look at what he talked about
bringing the case to communities of color in michigan speaking to all americans when he does that. >> now look at what donald trump tweeted this morning hours after kellyanne conway made that statement. made a tweet about our colleagues at msnbc, joe scarborough and mika brzezinski, calling mika nur rot tick, not bright, off the wall. people don't really change and donald trump is who he is. that's what got him the republican nomination and also what's created a deficit for him against hillary clinton in the fall and he's got a couple months to turn that around and we'll see whether kellyanne conway has any more success than paul manafort or cory lewandowski before her. >> we talked last week whether the couple months is enough time assuming a true pivot, we've come to hate that word now, but you still do not believe it is enough time? >> there is no such thing as a pivot. a candidate is who he is.
and donald trump has a very well established identity. he has over the course of the campaign so far, made some very loyal supporters and some people who are very consistently against them. all the indications that we have are the number of people who are against him, vastly exceed the number of people who are for him. he's been struggling to get above 40% in the polls. could that change? sure. anything can happen in politics. but you wouldn't want to bet much money on it. >> john, thank you for that. john harwood in washington. for more on the election bring in al, a former assistant labor secretary, chief of staff for president reagan who peps a piece on cnbc.com entitled "mr. trump do the right thing and step aside." mr. secretary, good to have you with us. >> thank you. >> why? why should he do this? >> well, because it's the right thing to do. the stakes are very high. the supreme court, the united states senate, four more years of hillary clinton with a bernie
sanders' influence will drift us closer to socialism not the free enterprise capitalist society our founding fathers wanted and to use that word that you don't like pivot, it's very important pivot point for the country. he needs to step up and do the right thing and say, if i can win i'm going to go forward. if i can't i'm going to let somebody else have a chance to do this. >> you say your window to make the sale has closed and gone forever. that's, obviously, not true. is it sp. >> well, i think it is. i did a lot of soul searching for this and i've lost a lot of friends. your op-ed piece got a lot of play as over a lot of news outlets and news max many others this weekend and i lost a lot of friends for what i said, but i believe that it's true because the minute that they came out of the convention and the issue became mr. trump whether baited into that or did it intentionally, you saw the swing states harden the other way against him. and what that really told me was that once the country moved away from the issues to the person,
they didn't like the person. >> well, perhaps that was because he failed to show any sympathy for gold star families. that was the issue that really caused the campaign and some of the support for him to turn. and you were in good company in those couple of weeks with a lot of people saying gop establishment need to distance themselves from him or perhaps even denounce him but so long as he focuses on policy do you think that criticism quiets at all. >> if he goes back to policy he has the issues. i was a supporter of him during the primary, globalization, trade, immigration, it's a change election. he was in the right place at the right time. but somehow he made it about him instead of the issues and that's where everything went wrong. and it's become now a downward cycle and you can see on the piece that just came up it's more about what he wants to say at the moment. >> and you believe he has no self-control. if there is no such thing as a pivot but there is self-control you think he is not willing to exercise it? >> i think he's a brilliant man, a win per. i have the utmost respect for him, but he is not a politician
and that's what it takes to win elections, a politician. he has not made the transition from hard nosed successful businessman to winning hearts and minds like ronald reagan did. ronald reagan was down in the polls big time as well but ronald reagan was a likable guy and what did he do? he won hearts and minds. today's one of the most popular presidents we've had. if i could give mr. trump one piece of advice as a fan, start winning hearts and minds. >> what do you think they're thinking? do they think, a, he actually has a puncher's chance to win in november or are they just hunkering down and saying let's defend congress and maybe wait for four years for to fight another day? >> great question. he i'm in the turnaround business and work with distressed companies. the one reason companies make the same mistake over and over again and believing until they go into bankruptcy or down, is the word delusion. there is deep delusion in the republican party. i don't know what they're doing
but they're hoping for a delusional network that this can flip around for them and somehow they can protect the state and maybe protect the supreme court. but my advice is stop being dilutional, look at the facts. i wrote that op-ed because no one will push mr. trump off the ticket. i figured maybe if somebody asked nicely, he would listen. because he's a winner. and winners don't lose for the sake of losing. i'm hoping he makes a candid assessment before labor day before it's too late of whether or not he can do what's right for my children and grandchildren as well as his own. >> couple of things. a, you're not suggest an alternate are you? >> absolutely not. >> and b, his constituency argues now is not the time to be likable. now is not the time to be nice. that policy prescriptions the country needs involve being unliked by certain pieces of the electorate. what's wrong with that? >> yes. you can take tough positions and tough decisions. i saw ronald reagan do it. took at love tough positions.
he did it in a way where he didn't offend people. right. you still have to win the hearts and minds. you still have to want to make people follow you. and i think the best way to do that is to win the -- win the thought process and get them to trust you. i mean, you early this morning on "squawk box" they were talking about who is he? and i think that question still out there. and people want to believe him. but they don't know that they want to believe him when he is so, you know, negative towards other people and doesn't say the positive -- >> he has given a series of speeches that have been on message as they like to say. right? >> yes. and one of the things i said before i wrote the op-ed if he started to apologize, and show maybe perhaps the kind her, gentler side of him people would resonate to that quickly and i think that is the right path. but let's be practical and not delusional to mike's point. two re-sets we're now 77 days away from the election. what happens if there's a third
re-set? you can't come back from that. so this is the time where they have to make or break decision. >> finally, you're not evaluating hillary clinton at all as a candidate, as a potential president. >> i will say unequivocally i will not vote for hillary clinton. if donald trump is the candidate standing at the end of the day i will vote for him for what i said before, free enterprise, capitalist society. hillary clinton strong sanders' influence, trend to socialism, i will go with mr. trump. but i do think that it's a long shot right now. >> mr. secretary, piece should be well read. apparently already is. thank you for coming in. >> thank you. >> big fans of your show. meantime former converse technology chairman and ceo kobe alexander, living in africa since he was indicted for options fraud a decade ago will return to the u.s. to face the music. scott cohen broke the story this morning and joins us from silicon valley with more. good morning, scott. >> good morning. mike, kobe alexander will be in front of a federal judge in
brooklyn on wednesday. he will plead guilty to a single count of options fraud bringing to a close one of the last remaining scannedles from the dotcom era. it was a wide ranging options back dating case involving a company converse technology, a wall street darling during the tech boom. he initially faced 35 criminal counts not just fraud, money laundering, bribery, obstruction of justice, he will plead guilty for a single count. for ten years he fought extradition from africa. every step of the way. proceedings that were postponed, canceled, extradition neffer did happen. he is returning by his own volition according to his attorney. when we traveled to namibia in 2007 we found that alexander was well established there already, living a luxurious life by na min yan standards and investing into the local economy which cynics and critics said was an attempt to buy off the government, something his attorneys at the time denied,
and, indeed, he had been running soup kitchens in addition to building housing and giving aid to local schoolchildren. and his attorney says not with standing his departure from namibia mr. alexander and his family will continue their charitable work there. we will see, though, whether he would have to do some of that in pris prison. he will argue we are told for bail when he appears in front of the judge on wednesday. but this scandal ten years in the making, now coming to a close. guys? >> we know you've been following it all along and will continue to. scott cohen out west, thank you. coming up we'll take a look at where the hedge fund money is going this election cycle. all those numbers after the break. plus today on the halftime report, corvex's keith meister, a lot on the agenda including miss battle with williams companies. more "squawk on the street" after this.
improving energy efficiency. developing more clean burning natural gas. my job? my job at exxonmobil? turning algae into biofuels. reducing energy poverty in the developing world. making cars go further with less. fueling the global economy. and you thought we just made the gas. ♪ energy lives here. july fec filings on campaign donations are out and donald trump support from hedge funds seems to be falling short. kate kelly is at hq with more on this money race. >> hey there. a few weeks ago fund to fund managers and trump supper
guessed some 20% of the campaign's $70 million in july donations would come from hedge fund managers. based on what he had seen as the results were published by the fec over the weekend seemed the industry chipped in far less than that. the good news for trump his campaign raised $80 million including many small donations which was a trend that helped barack obama win the presidency. but in early check of the recent tax filings and i'll make the disclaimer still early, suggests that a mere 2 million or so came from the hedge fund industry not $14 million. the vast majority came from secretive renna san's technology robert mercer who gave to an anti-hillary pack called make america number one and a $75,000 donation from robert bishop who runs the hedge fund in connecticut. but some of the big names acting as trump's economic advisers including, for example, carl icahn and john paulson were notably absent at least for the month of july in the filings
we've seen. icahn has given $58,000 for a pack called trump victory and won't publish new documents covering this month for a while yet. but paulson shows up nowhere again in the fooul filings. the only other hedge fund contribution of note that i saw based on a spot check over the weekend vince, an icon associate official gave $200 bringing his total to one of the trump packs to $1,050. some of these are made on paper and takes a while to upload them and then the issue of the quarterly filings so we haven't seen everything yet as well as the fact that there could be indirect contributions that benefit trump, the republican national committee. caveats. john paulson as well, gave $250,000 reportedly as part of co-hostinging an event in june but that was beyond the scope of what i was looking at over the weekend. definitely not $14 million. >> kate, thank you very much for that. kate kelly. sad news to report, bonny baha head of global credit at
double line capital and frequent guest on this program has died after a car accident over the weekend. ceo jeffrey begunlack said, for a quarter century bonny was my trusted colleague and dear friend and honest and direct with a sardonic wit perfectly matching her investment skepticism helping shape the double line philosophy. bonnie baha was 57 years old. what powers the digital world. communication. that's why a cutting edge university counts on centurylink to keep their global campus connected. and why a pro football team chose us to deliver fiber-enabled broadband to more than 65,000 fans. and why a leading car brand counts on us to keep their dealer network streamlined and nimble. businesses count on communication, and communication counts on centurylink.
good morning, everyone. i'm sue herera. your cnbc news update at this hour. u.s. swimmer ryan lochte giving dooelts why he fabricated a robbery in rio, sitting down with matt lauer in an interview to discuss what really happened at a gas station bathroom. >> i mean, i was very intoxicated. i have no idea why. i mean, it was immature. it was childish.
>> and to a developing story now a federal judge temporarily blocking the obama administration's directive on transgender rules in school bathrooms. a 13 state coalition led by texas is behind that case. in southern california, wildfire evacuees are returning to their homes today. it comes less than a week after 82,000 people were ordered to leave their properties. in about an hour east of l.a. most of the homes are in the -- that are in the area are intact. and a woman is recovering after an accident on six flags 19 story roller coaster. the el toro in new jersey. an unknown object hitting her in the face during the ride this weekend. six flags has reopened the ride and did not find any safety issues. scary moments there. that's the news update at this hour. i'll send it downtown, kayla, back to you. >> all right. thank you so much, sue. the price of oil slipping below $48 a barrel. jackie deangelis is live at the nymex with a closer look. >> good morning to you, kayla.
that's right. both the september and october contracts are trading under $48 a barrel today. september is going to roll over at the close so that creates a little volatility. to be fair it's not like what we've seen in the past month. it's not too bad today or too pronounced. meantime i do want to mention that most recent commitment of traders reports do show even though we've seen the 20% move higher in crude oil prices over the last two two weeks, there are new longs in this trade, not necessarily short covering. that explains the action today. when you make a move higher and substantial longs they will take profits. not to say people don't think we could see the $50 mark pretty soon and obviously everybody is watching it. they think some of that gasoline glut is starting to work itself out of the system now. and also, that some of the supply issues here in the states are more relatively called down. so not too much to worry about there. still, at this point, you know, it's really anyone's game when yo you've made a move it could go either way.
the longs in the position are thinking we could see the 50 soon. we'll be watching. kayla? >> all right. thanks so much, jackie deangelis. at the nymex. actually we have more on the oil market. we do have preveil, energy analyst at raymond james and jody gunsberg, s&p head of commodities and real asset research. we had the 20% pullback, we had a 20% rebound including 9% gain last week, in wti crude oil. is it all investor positioning or does supply and demand have a lot to do with driving the market right now? >> the drops since the peak in june looks substantially technical driven. a lot was spec trading by financial speculators, fundamentally the global oil market looks bullish today than it did 100 days ago and yet the prices, you know, is still lower. so our team's perspective is the
fundamentals are going to drives the market over the podium term and that's why we're -- the medium term and looking for oil in the 60s by the end of the year. >> to get more specific, people complain there hasn't been that much of a dramatic supply response, there is this glut in fuel around the world and then we hear about perhaps a little more drilling. the rig count up and things like that. what is going to get us to the $60 target? >> sure. i mean let's be clear. supply is falling. non-opec supply is falling around 2%. a lot comes in the u.s. u.s. supply is down 1 million barrels from a year ago. you add to that things like china, mexico, colombia, we're talking about hefty declines from these countries. they add up. inventories are high. that is absolutely true. but given that supply is falling whereas global demand is actually on the rise, to the tune of 1.5%, by definition, it
means that inventories are going to be shrinking and we're looking for over a million barrels a day of inventory draws in q3, q4 and throughout 2017. >> so jody, how much of the recent active is what he was discussing about these supply and demand dynamics and how much is short covering and technical moves? >> largely, it does have to do with the fundamentals. in fact, the iea, the international energy agency, just recorded that demand is finally over taking supply. and to put things in perspective, we've seen in the past seven days, oil gained about 16%. that's the most since april. and that's important because oil is a major factor. that goes into the gdp growth estimates that drives the u.s. economy. we did some research that shows how different sectors behave in the s&p 500 with two surprising results. one is that technology gains
just as much as energy and materials with oil price rises and the other you result is that all sectors rise with oil price rises except for telecom. >> and what's your takeaway from that? it means the economy is getting a little bit stronger? maybe the dollar is not a problem for the other sectors? >> for telecom generally when oil prices rise, you have gas prices rising. that may brie deuce the demand fort -- reduce the demand for gasoline and autos which can interfere with connectivity in your cars like gps systems and also may pull back on the mobile device usage in things like parking facilities. so that's how we attribute the loss in telecom to the oil price rise. >> just in terms of playing the stocks within the energy sector right now, how would you be positioned? what's the way to take advantage i guess in a leverage twids that higher target you for crude? >> the name of the game is
operating leverage. this is not the time to be defensive. time to be defensive was when oil fell from 100 to 30. too late for that now. so companies that have the most operating leverage to oil recovery, they can be enp companies like marathon oil or pioneer natural resources or they can be service providers. the drillers that are going to benefit from rising capital budgets and, therefore, rising rig count. but it's definitely not the time, you know, to play the most defensive mega caps. their time has passed. >> we've talked about that before when times weren't as reassuring, right, pavel, exxon, for instance, not exactly the leveraged course you want to ride into an uptrend. >> while it's the world's biggest refiner, second biggest chemical company, reality is, these are not businesses that directly benefit from rising oil prices. >> and i guess the other question, are we in the sweet spot where rising oil is good for markets but yet doesn't yet
pinch the consumer? how do we read exactly when it's going to be painful to actually see this recovery from? >> the oil prices still have some way to go before i think it would be painful for the consumers, but what we see is that the technology companies, which is the biggest sector in the s&p 500, have benefited because energy companies have so vastly upped their efficiencies and invested in new technologies through the past two years. but there is a warning sign that we see with the technology companies is that the investors are more fearful of technology companies of any other sector right now that we notice by the declining excess returns of the stocks over the bonds in that sector. >> so that means that investors basically are not willing to bet this recovery trend in technology is going to continue then. >> right. and that has broader potential economic implications because if
the stock market turns, you know, it's had one of its longest bull runs here, the question is when does does that cycle switch, the rising oil price in conjunction with the fear of technology might be the chance that would switch. >> all right. thank you very much. jodi and pavel, appreciate that. >> coming up, kobe bryant, venture capitalist. what he told us about his new role just after ringing the opening bell. plus it could be the most important casino opening in years. a new look at the new $4 billion wynn palace, and what that means for owner steve wynn. more "squawk on the street" in a moment.
venture capitalist unveiling $100 million fund and joined us this morning after ringing the opening bell here at the nyse. take a listen. >> it's whether or not i had a passion for it. you don't want to jump into something if you're not passionate about it. jeff and i have been quietly building this four years and getting a chance to learn each other but learn the business and see if i actually love it. and i got to tell you, no greater feeling than actually helping entrepreneurs be successful and a part of something that's actually helping their dreams come true. that's -- there's no greater feeling. >> who has technology you're ekts cited about right now. you mentioned video and entertainme entertainment. communications. who's the role model for you? >> well, when i look at role models i look at them differently. i don't look at how they go about doing it but i look more to the person. and how they navigate through the ups and downs of what they go through. right. that's the most important thing to me. how are they able to balance the emotions as they go through the ups and downs. and when you learn how they can
navigate through that then personally you can navigate through anything. we tell our ceos that all the time, not necessarily the action, but how you navigate yourself through the action and lead your company through it. >> ceo you admire more than others. >> ceo i admire more than others. i work closely with mark parker and he has been a mentor of mine for years. there's times where i'll -- i can't sleep and shoot mark a text message about, you know, i'm having trouble building this company here what do you think about this, that and the other, how did you do it and he gives me very detailed responses. >> fascinating discussion. we've seen athletes try to do this before, but there seems to be something different about kobe's effort. this is not going to be a part-time gig for him. >> seems like he didn't just start thinking about this upon retirement. he's been looking in this direction for a long time, the days you buy a car dealership and open up a basketball camp that's gone for guys like him. >> elway made a lot of money. >> he and his partner have invested in 15 companies together since 2013 but can you
imagine being an entrepreneur and pitching kobe your business. i mean there could be no higher pressure situation. >> he's going to be focused on your preparation, resilience, how you go through -- it's a tough task to live up to his expectations but i think there's a distinction between other vcs who seem to be all golden state fans. >> hope it doesn't end in a game of horse because you're out. >> from vc to investor can'tist, adventure capitalists premiers tonight gives entrepreneurs a chance to showcase products. tune in tonight at 10:00 p.m. eastern here on cnbc. >> all right. meanwhile, steve wynn's new $4 billion casino might be the most important casino opening in the past few years. sus susan li at hq. >> the most expensive casino built in macau or las vegas. only singapore's marina based ann's costs more. this is the flagship casino and a big bet he staked his
reputation on. they say the wynn palace has met if not exceeded expectations and quintessential wynn, opulence with a quality of service wynn is known for. some of the highlights includes a $100 million water fountain show, $200 million in art and chinese antiques including vases, and a $35 million tulip sculpture. not much for the family which wynn admits to himself. there are better places to take the family in macau and las vegas. he is doubling down on the premium gambler, vips, high rollers. they aren't going to macau these days as a result of china's anti-corruption crackdown and that's not his only problem. the palace has only been allocated 150 new tables the lowest for a casino of its cost and also the size. wynn is not shy to share his opinion as we all know and he may have offended the macau gaming authorities when he criticized their table policies in the past year.
but the good news here is that wynn will be allowed to move 200 tables from his other casinos into the wynn palace. the more tables you have the more money you make. if he does this he cannibalizes business from his other macau properties. macau has seen 6 months of falling gaming revenue though the bottom is near according to analysts and expect a positive turn this month or next month and i think it's important to note that the house does all win. casinos make money but in wynn's case it might take a little bit longer with a huge price tag. back to you. >> yeah. i mean, obviously, a tremendous bet by steve wynn who as you say has ruffled feathers among the chinese authorities. what do his investors think about his approach and their hopes for this opening? >> i think it should be pointed out the wynn palace, the is was project initiated that was thought about a few years ago before the gaming downturn. this is casino on the strip people have criticized him on missing out on a lot of the
businesses without being in the modern strip. he's been in the old town of macau and as you know if you're a high roller and a gambler you want to be where the hot modern people are. this is his first property. i'm not sure it's going to live up to expectations in the first few years and take a while to ramp up. who knows. wynn does well in macau. he brings a great deal of service and reputation and people go to him. >> all right. susan, i will have to take your word for where the hot modern people are. i trust you're right on that. >> coming up, how high can facebook go. as piece suggests shares could jump more than 20% over the next 12 months. roger joins us live to break down that, carl. more on "squawk on the street" next.
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big move going to a company where it was accounting, pricing, business deals that had been the center of the conversation. >> it had come out of pfizer. the market likes this movement and this make over in terms of management and selling assets. they're attempting to follow the script. all along attempting to follow the script of tyco where you had the overhang of aggressive acquisitions and accounting questions and a new ceo and tries to find value within the portfolio. >> there's a dozen investigations going on by various authorities and how much worry does that erase for investors? >> those investigations, of course, if they find there was really sham transactions and these pharmacies were set up for a purpose, the anlage goes out the window there. it's been fighting it's way in the 20s for so long and seems like it's attempting to break out of that range.
>> these levels are going to take you basically back to may. obviously a long summer. the classic car auctions in pebble beach over the weekend showing signs of a slow down. robert frank breaks it down. >> it's known as the super bowl for classic cars but sales this weekend a little lower than expected and nearly half the cars went unsold. 719 cars sold for a total of 345 million. down from last year's 396. only 56% of the cars that were up for auction actually sold. many could sell in post auction private deals. now sales at the very top of the market so there's ultra rare top quality cars. that remains strong with 7 period cars selling for more than $10 million. now the most expensive car sold was this 1955 jaguar roadster for 21.8 million. just behind that is this spider. that sold for 18.5 million.
now ferraris continue to dominate with this 1959 ferrari 250 gt for 18.1 million and this car, get it up here in a second just became the most expensive american car ever sold at auction. the first cobra ever made went for 13.5 million. sales of younger cars from the 1990s and later those were especially weak. they did really well t. red ones sold for 3.6 million and the black one went for 5.2 million. that's more than three times it's original retail price two years ago so pretty good appreciation for a used car. guys back over to you. >> robert, how does it compare to years past and what if any type of indicator would this be? >> it's clear, 2014 was the peak. it peaked in 2014 so we're off
slightly that peak but clearly cars not doing as badly as the art market where we saw declines of 30 to 50% here. we're just talking about a 10 to 13% decline. it's not the same market years ago. >> it's quite a spectacular result. let's get a quick market flash. >> taking a hit, worst performing stock in the s&p 500 early on after the chief financial officer stepped down for personal reasons the search is on for a full time replacement we want to keep our eyes on the commodity. that's putting them in focus as well. they're lower by 1.5% off of the lows so far.
they track these larger companies in the industry. it's now down by around 7% from its highs about 7 days ago. this is one of the hottest trades of 2016 and even with those declines it's still up over double this year and about 92% over the last 12 months so again, a gold minor is very much a focus today because of the recent losing trend but a very strong momentum trade in 2016. back to you. >> absolutely. >> good morning. good morning. facebook is up 20% so far this year. why do they think it could go up 20% more and do our experts agree? a couple of cities in the bay area taking an unusual path to public transitful using uber and lift. find out what's behind it and if it had broader implications and it's been five years of tim cook
in the driver's seat at apple. he changed that company more than you might realize. more of that coming up on squawk alley. energy is a complex challenge. people want power. and power plants account for more than a third of energy-related carbon emissions. the challenge is to capture the emissions before they're released into the atmosphere. exxonmobil is a leader in carbon capture. our team is working to make this technology better, more affordable so it can reduce emissions around the world. that's what we're working on right now. ♪ energy lives here. so i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices. the market's hot.
>> oil is where some of the action is. weak out of the gate. remains down $1.47. the overall market though continuing it's drift as it did late last week. over to you carl. >> thank you very much. it's 8:00 a.m. at facebook headquaters in california. it's 11:00 a.m. on wall street and squawk alley is live. ♪
>> welcome to squawk alley for a monday. together for the first time in a couple of weeks. nice to be all together. roger, good morning to you. >> good morning, how are you carl? >> glad to see the team back together again. >> we're on a mission from god. coming off of the longest winning streak since 2010. the index logged gains for 8 weeks in a row. up about 4% in the last month alone. roger, all the caveats aside in the middle of august, are you able to think it means good things about the markets and the ec