tv Squawk on the Street CNBC August 25, 2016 9:00am-11:01am EDT
box." quick check on the markets. futures looking down. going to open up 26.5 points, nasdaq off 7 points and s&p 500 off about 3 points. thank kayla. >> she's here tomorrow. >> being here again tomorrow. >> yes. >> thanks for thanking me in advance and heather bresch, for that great -- >> that was good. >> with brian. join us tomorrow where kayla will be and -- >> i'll be here. >> and he will be here. >> chop tped liver. ♪ good thursday morning. welcome to "squawk on the street." david faber is off today. heaviest news flow of the week as we had key economic data to the earnings flow, durables rise for the first time in three months but futures are red. europe mostly negative, treasuries remain in the narrowest range for any month in about a decade. our road map with the mylan sag
fwa the ceo addressing the epipen controversy. tiffany beats estimates but struggling with a drop in tourism and the dollar store is under pressure, continued weak earnings guidance for the year. but first up, mylan taking action in response to criticism of that epipen pricing. the company announcing it will cover up to $300 of the allergy drug's out-of-pocket costs at pharmacy, reducing a patient's cost exposure by 50%. also doubling eligibility for patient assistance, eliminating out-of-pocket costs for both uninsured and under insured patients. moments ago on squawk, heather bresch was asked why mylan didn't lower the list price on the drug. here's her response. >> had we reduced the list price, i couldn't ensure that everyone who needs an epipen gets one. so went around the system. this savings card is equivalent to cash, $300. effectively we're cutting the price in half, but we're letting you take control of that.
we're letting the patient take control of that. we enhanced the -- we enhanced already existing programs. these programs existed but this phenomenon, which is new, and literally has happened overnight, people don't understand their coverage and how could they, it is complicated. >> it is complicated, jim. she -- importantly is linking pricing to universality availability of the product. >> well -- >> it's a key part of her argument. >> another way to put it if you can get away with jacking things up and gouging it, then you got to do it because the shareholders want it. and as someone who's well off enough to have one and you don't need two, you need a store hold of them, so it's still 300 whatever, where you can get away with it. there's no competition. supposed to be competition. i have the competitor with me. the one that the fda doesn't like. but i have to tell you that i think that one of the things that we've seen over and over again with generics is that if
there's only one company making something, this is basically about to be generic because of the other guys they can take it up as much as they want. is this -- was this outrageous? no. it's par for the course. what they do. they just got nailed. you think valeant is sitting there saying hey, you know what, wow, i'm glad we didn't raise prices. i'm glad we weren't interviewed by brian sullivan. wow. let's sit down. joe papa sit down with brian and how many did you raise. whatever you can get await in the system you do. is our country a better place? absolutely. but our country allows this when you have one product. a lot of generic companies stop making certain products. they just stop doing it. and then boom, you know. take them up. >> yeah. times this morning dissects that timeline of when teva was coming. >> wasn't that good. >> and they regained this monopoly, the argument being they tried to make the getting better while the get was good. >> i tell you, like i don't want
to present my whole pharmacy, my whole medicine chest, but i have -- i have a injectable situation, another drug, that -- because some other companies dropped out, it's about -- it costs about 350 to make and they charge me about $500. and it's not talked about because, you know, the insurance won't cover it but it's just -- it was the same thing. there was a bunch of companies making it, everybody jumped out, a delivery system, made by one of these companies i'm not going to mention it and, you know, i -- it's -- it's about $70,000 a year. >> that's a lot of money. >> yeah. >> now i manage to go through some website and get it. i'm not going to go into specifics other than to say the only reason i can afford this is i happen to be very lucky to have a decent paying job. >> is the solution here to start improving drugs faster? how do you avoid approving drugs willy-nilly. >> look, i don't know. the one, look is this one -- this is the one they pulled.
okay. this is the abuq. my doctor said it's fine. okay. this was a great competitor. >> this is teva's product. >> the other guy's product that was pulled for allergic responses. i'm glad i have it and i carry -- i have five of them. there is one everywhere. do i know when i'm going to -- i'm not presenting myself again as like these kids, okay, because i have great medical care. i am -- i am lucky to have all these. unbelievable company that pays for this stuff. a lot of people fall through the cracks and this little thing is a lot of money. okay. just a lot of money. i'm blessed to be able to afford it. i listen to these tragedies, this tragic situation. look, you don't know when you're going to need it. >> and you don't need two. >> so i see mylan up in the premarket. >> well -- >> think her defense was satisfactory to the shareholders? >> until the real donald trump tweets and says she should give it away and then hillary --
clinton tweets that i was unsatisfied, i listed on to brian sullivan, that's what she should do because it was a great interview, and she's got to take it down why shouldn't she lower prices. we should roll back value valeant, roll back these. i mean, i'm waiting for that. look, i fda decides to pull -- this is two bottle thing. fda decides to do it and the other drug i take, i can show you that one, you wouldn't believe it is if you made your own compound if you went to a compounding pharmacist, it's 0.001 of the price. i went up the food chain to my health insurer and they told me basically take a hike. >> yeah. >> yeah. it was actually -- i'm not mentioning names other than to say this is the system. and if you knew how little it cost to make the injectable thing that i'm talking about, you would be like, are you kidding me. and i have gone all over the country with every website around the world, some guy that makes it in north dakota, and i managed to save so it's only $1,000. >> as bill george said yesterday this is not like gilead coming
in with hep c. >> these tend to be very low-grade technology. is. >> right. >> it's true, yes, i'm sure that mylan has done some things to do it. but i would say it's emblematic. epipen is so visible. there are hundreds of drugs like this. >> right. >> people should know that. cbs news, my doctor, has done endless stuff on this, used to be -- he happens to be my doctor. >> one advantage you might argue, to bresch is that she's a mother herself. she referenced that several times in her interview with brian. >> well look, she's part of the system. the system allows it. i mean, the insurers allow it. everybody allows it because they can get away with it. other countries can't get away with it. our country you can and our country it's a shame, that our country is the supporter of these. >> wasn't it crystal clear what she was asking congress to do,
other than -- >> no. >> address this -- >> no. it wasn't. and at one point she was talking about about being as outraged as everybody else. the people who have to buy these are like saying to themselves, i don't know, i think she's a little less outraged than i am. i think she can afford it too. look there's a lot of people that don't make a lot of money in this country and don't have health insurers. we live in a world where there's have and have nots on this stuff. what is this, like 10 bucks. if it's not covered, if it's not covered you're history wiped out. one of the drugs, wiped most people out in this country look at the marginal, what people make. wipe them out. it's not right. >> a few moments ago what you want to hear from some of the ben fit managers, right. >> they shouldn't be -- >> this should be a question for -- >> without competition you need to pit, you need to be able to pit two companies against or three companies or five companies and look, i just wish that someone -- that there was another guy on the market. you know, there was a series of
articles about guys making something that could rival the epipen and i'm not -- i'm not an expert. i looked into it because of the process of getting something. you know, it's personal experience. i don't like to inject my personal story. i'm not -- again, i am so conscious of the fact that there are -- i got the money to do it. >> sure. one more listen here, different bite from bresch talking to brian sullivan about mylan and her level of frustration regarding the episode. >> my frustration is there's a list price of 608. there is a system, there are -- i laid out that there are four or five hands that the product touches and companies that it goes through before it ever gets to that patient at the counter. no one -- everybody should be frustra frustrated. i am hoping this is an inflection point for this country. our health care is in a crisis. no different than the mortgage financial crisis in 2007. >> that was interesting. using the word bubble tying it to a mortgage crisis.
>> look it's a capitalist system. i mean it is a capitalist system you need competition to lower price and we give -- what's interesting i have a lot of guys who do orphan drugs, and you'll hear a price of a drug is 400,000 but united health would have to pay 500,000 for the care. it's actually a bargain. it's a relative bargain. health care costs a lot of money. good health care costs a fortune. we have the best in the world. we do. i mean, but yeah, mortgage bubble. i don't know. i mean, again, when -- we can be euphemistic. instead of saying they get away with what they can, it's aggressively priced. if it's life saving it's not like i can go to walmart and say listen, target has it at $7, you know, it's not like you can go to amazon saying i can get prime, prime, these are not things that you just go to amazon prime. they're not shoes. >> we reached out to the
centers -- senators and congress people she mentioned in the interview. >> yeah. what do they think? >> we'll see if they get back to us. but clearly the episode is far from over. >> got nailed on this one. didn't they. >> and microcosm for larger -- >> there's guys right now in this business saying, thank heavens for her because i have to tell you maybe she sopped it up. if mrs. clinton comes back and says i have a known list of 57 drugs that did this, you know, you're going to see a lot of activity. >> yeah. >> when we come back this morning, big movers in retail that we haven't gotten to yet. tiffany dollar general, dollar tree, interview with robert kaplan. you will want to hear him ahead of tomorrow's jackson hole speech by fed chair yellen. 14 sessions the s&p has moved within a 25-point range. the narrowest band over this long a time period in about 20 years. we're back in a minute. presidet of the north face,
we are working on the prototype to match customers to gear. watson, let's give it a try. say it's mid-june and i'm backpacking in yosemite. of our 353 jackets, i can recommend nine. watson, what if it rains? there is just a 3% chance of rain, so i recommend the breathable stretch fleece fuse form dolomiti jacket. a perfect choice watson. no wonder our customer loyalty numbers keep climbing. i believe we can do even better. i like the way you think. i believe we can do even better. ein street-legal form.g lexus performance get great offers at the lexus golden opportunity sales event. get up to $5,000 customer cash on select 2016 models. ends september 5th. see your lexus dealer.
down 8%, largely being called a low quality beat because so much of this was sgna. >> they didn't guide down. i'm used to them guiding down. i said where's the guide down. i went through. said not that paragraph. where is the one about how we're going to do poorly in the future. no. and then you get analysis, maintains its outlook. oh, my god, tiffany and they didn't cut. may have been the tennis bracelet i bought for my daughter's graduation. this was a relative for tiffany a good quarter. the 57, that i've made the 57 variety that that's just 57 varieties of heinz. i got it from [ inaudible ]. >> america down nine, looking for six. europe down. your point no change to the guide, not tiffany like. >> it's a win. if they cut costs -- they bought stock. we've seen this throughout this retail period. is the guys doing really bad,
when they came out and said listen we're done doing really bad, their stocks flew. think about kohl's, macy's nordstrom. nordstrom their release was like we thought we were like awful, but it turns out we're just awful. >> when you stop hitting your head with a hammer, it's better. >> and then a burlington, which was just much better than expected and you can still fly. dollar general and dollar tree, we will talk about that, they basically fell the dollar tree and it's dollar like sergeant. they've been strong. >> both falling sharply today. weaker than expected comps. >> they got negatives. doug mcmillon is up ending the retail world, doug mcmillon. walmart is driving everyday low prices like in the old days when they put out of business a lot of companies. >> dollar general, in line, and again, reiterating full-year guidance in the 10 to 15% range. >> i thought that was interesting given the fact of how really kind of subpar it was. you know, go over these, talk
about same-store sales of plus 7. i was looking for plus 2.6. and then they -- this was one i loved this. i'm not making it up. these are good merchants. i'm a dollar tree got, got the five readers i had on twitter last time. unseasonably mild spring weather. okay. what, does that mean you boughts less. you didn't go back to the freezer or something. no one else cited unseasonably mild spring weather of the companies i deal with. that's a -- i mean even -- unseasonable. i thought that was curious. raised eyebrows. >> somebody said at walmart, the ghost of sam walton must be going up and down the aisles saying they picked the right guy. do you agree? >> oh, did they ever. i mean, raises prices for the workers so they don't go across the street to another store. and it also created a kind of an environment where i don't know, be i like to go to every single store. if faber were here he would be making fun of me. walmart, they're livelier.
they kept the employees for once. and yeah, he is the right guy. he's taking no princers. he changed english photo shop that wasn't doing that well. they have made it so that you are very conscious that they've cut prices. they're -- and they -- jet.com, i am sure that that's going to be algorithmically a challenge for amazon. real challenge. i'm very impressed with mcmillon. you know, he's kind of used this term, boyish. probably heard that forever. boyish since he was a boy. >> probably will for years. >> i would like to be boyish. >> and meantime we continue to watch this earthquake yesterday in italy. the death toll continues to rise. nbc's lucy kavanov is there. good morning once again, lucy. >> good morning, guys. it's been quite hectic especially in the hours since we've spoken. just moments ago we experienced a powerful aftershake and earthquake aftershock pardon me, 4.3 magnitude. we were in the street, the
ground shook the buildings rattled. there is a construction site where a hotel had collapsed and rescue workers had been for hours now overnight searching for anyone who might still be trapped in that rubble. down the road from me, we saw a massive plume of smoke and dust in the aftermath of that aftershock. several ambulances had come down to the scene but we're not hearing any reports of casualties from that specific incident. but rescue workers are racing against the clock, time is running out, but one thing they keep reminds us, the fact that back in 2009, when that deadly l'aguila earthquake took place in a similar region more than 300 killed there, they were still able to pull one person out from the rubble who survived for 7 hours. they are still -- 72 hours. they are still optimistic despite the fact that time is running out. questions remain about the italian government's responsibility in terms of reinforcing the buildings here. this area is on a fault line. it lies between two tectonic
plates prone to earthquakes and one of the reasons why the devastation here was so sig can nant you have ancient stone buildings sometimes date back to roman and medieval times have not been reinforced and folks will be asking whether more should have been done to reinforce the buildings here which have been effectively flattened and what to do about the remaining towns that are still standing. guys? >> lucy, that's going to be a much longer term story. thanks to you, lucy this morning. >> that was -- went from being 37 -- any life is bad, 37 to a dramatic number. people don't know who's there. that's my daughter was visiting that area three weeks ago. it was a very -- it's an area that everybody goes to. >> yeah. at a time where a lot of vacations and honeymoons. >> that's what was going on. >> when we come back ralph nader will join us live with reaction to mylan's move regarding the price of the epipen. but first we'll get cramer's mad dash ahead of the opening bell and a look at the premarket which remains in the red. back after a break.
3.3% for kmart, accepting$300 million loan from eddie lampert who runs the company. they always sound like they're doing so well. it's kind of like the common term. like wow, we're killing it. and i do want to point out that there is something jc penney marvin ellison said on the recent conference call one of the reasons we are in the appliance business the first place because we observed a potential opportunity. sears. jc penney on its call says that sears is a good reason to buy jc penney. he's right. >> yeah. >> pointed out this morning, comps have never been positive. >> no. >> with lampert as ceo. >> no. >> to what degree do they care about the retail operations? >> people will say it's going to go down. there's -- it's a little tesla like. not the car. just the stock. in the sense that people who are in sears like eddie lampert some of the institutions don't let it come down, they're buying. the tricks never stop here. and that there's -- they talk
about a variety of potential partners, get you in, kmart, diecle hard, craftsman, keeping the balls juggling to make the money for the holiday season. you know what, look, just go there and tells you about it. peter lynch in reverse. money manager who said if you go to something you like it you go and want to short it. >> we will on that note take a break and come back with the opening bell in about five minutes. to buy t ♪
you're watching cnbc's "squawk on the street" live from the financial capital of the world. opening bell in two minutes on this thursday as we wait for yellen tomorrow about this time in jackson hole. in the meantime we have durables up 4.4. >> we weren't supposed to have anything -- we were supposed to be on hold, dollar tree, dollar general, burlington,vs, workday, earnings galore, back in the third week of the month last month. >> a little bit. you talked to chirico last night. >> manny put up a good number.
inventories being lean, the department stores doing pretty good. didn't say fabulous but doing pretty good. europe is the leader. this is not alone. europe proving to be a leader in a lot -- gas reported great number. citing europe. tiffany, brexit, europe is stronger. their rates are too low. i don't want to sound like -- >> europe or here? >> europe. geez, everybody -- many of the companies i deal with in europe and by the way the euro annualizing, saying look, tleadr is not the united states. it's europe. calvin klein, pvs, europe is the leader. >> uk july auto manufacturing up 7.6. some of the post-brexit data -- >> not supposed to be. >> no. >> not supposed to happen. >> with that let's get ready for the opening bell and a look at the s&p at the bottom of your screen. the big board it's the united
states tennis association and ten miss player milos raonic celebrating the u.s. open which begins monday. >> one of the greats. >> good time in new york city. >> at the nasdaq the american red cross. raising awareness for the thousands of americans impacted by the flooding in louisiana. where they're expecting more rain as the system works its way into florida and beyond. >> feel for those people. that is one fabulous terrific tough group of people down there. tough. >> yeah. >> you mentioned ph. what was your take on workday? >> billing -- they have a couple numbers very hard to read. one of them is, there's -- whale a re-acceleration what people need to know. a deferred revenue stream that is gigantic and that really because of the rateable way that cloud companies, it's the actual cash in it, just -- i don't like to say trust me but a subscription business and you can't take it at once. free cash flow good, billings
38%. the -- they're talking about a wow moment on the conference call for the finance business. when companies merge, they often benefit. emc they got a big benefit. huge benefit from ibm but the most important thing they want samsung and samsung is probably the biggest chunk of business out there. they want quantities. but when you get samsung, oracle, everybody. we don't know, but that was big win. remember oracle does not like these guys. >> right. >> and neil bush would respond he's not trashing oracle but saying strongly that net suit oracle accuracy sigs will be good for him. i don't want to say good interview, i watched brian sullivan do a complete eviscerati evisceration, difficult, tough, interview, she came back at the end. you know what i mean. an interview where he was showing you exactly why he's killing it. he's killing it. >> that's going to be all --
pretty easily 52-week high. >> lot of people short it going into the quarter. a note that came out that earlier this week saying they're going to miss. another note saying morale is bad, finance is bad. i think morale is great and didn't miss. they beat. the headline earnings number is not nearly as important as the billings here. >> a quick listen to what the workday ceo told jim last night. >> positive operating margin and that really is the leading indicator for us. first quarter, we were around 3% operating margin and here slightly less than 2% operating margin. we've moved into positive territory and if you look at our free cash flow i would look at that on a trailing 12 months basis because it's lumpy quarter to quarter based on capital expenditures and we had very healthy free cash flows over the last 12 months. >> and that's important because a lot of people say wait a second, they lost money, jim. why do you like it so much? it's a free cash flow story and it's a growth story.
they are taking from the playbook of mark benioff who everyone said when is he going to show profit when he has such scale he can tart making a lot of money. they happen to be best friends. the same playbook that was so successful for salesforce. >> among the big losers are the dollar names we talked about. sig net down there. hp. >> oh, krig net. >> hp. i thought they would do better. on pcs they did well, terrible on printers. just disjointed conference call but one point i thought got a little let's just say -- ill-advised exchanges. >> really? >> made to feel like perhaps the company is way behind where we thought they would be at this point in terms of cost savings. it was not a great conference call and the stock sunk i think because they were being challenged at a lot of their plans are just not being met and the company saying our plans are being met. disputes on the call, rebellious the word to use.
>> how do you skaur square the circle on tiffany one of the biggest gainers and sig neth losers. >> signet had -- you always get gun shy when long the stock. first thing out of the ceo's mouth in the quarter was, that he's disappointed with the numbers. now they just -- they had a rather remarkable -- down 2.3, people looking for up numbers, zales down 3. deutsche bank looking for a plus number, jpmorgan, and they came in and said we are disappointed with our second quarter sales and they should be. this company is also remember, it's a credit company that gives you credit to buy their jewelry. and the models being called into question and the quarter was as they were tough on themselves but doesn't matter. that was bad. big miss. >> couple of upgrades today. william blair on netflix has some -- they upped to out perform. >> one of the things talking to my kids about netflix, millennials love netflix.
if they can make it so you can't share passwords they could make more money. unappreciated original content. >> they think the long-term target of 60 to 90 million subs is attainable. >> i know. >> go so far to say they have the best shows. they found proprietary empirical way to demonstrate -- >> it is true. when you sit down with a company they have had a tremendous reups. that's how they look at it. how the major networks have to cancel shows they don't cancel doing the next one, everyone is waiting for the next narcos. 50% upside. i think people want to know, this laid out the ultimate bull case for it. jay hogue bought all the stock the board member and i feel like netflix, a lot of people feel it has to catch up to amazon. it has to catch up to fang, to facebook. >> yeah. >> and i think that the truth is that it's had a big run and it's been resting. not that it's over. the last two quarters were subpar. >> the other upgrade is on rig.
citi takes it to a neutral. >> they're in business, going to stay in business, cut the -- cut enough of their fat but i have to tell you, the rigs keep still being pumped out of korea. just such a glut of rigs. as many rigs as there are -- they made all these rigs. takes forever to make rigs. when oil going to 100 starting to make a lot of rigs and you can't shut down the making of rigs. there's a glut of rigs and no place to drill. because it's so expensive to drill in some of the places. even gulf of mexico, when i was on a rig, oil was 100, everyone was like celebrating. no. i mean you don't need these rigs. >> yeah. >> little macro here. >> sure. >> we mentioned durables, claims were good at 261. we're going to get revised gdp tomorrow with yellen. >> that's why. >> housing. >> people wondering whether stocks know something treasury don't about what rates should or will do. >> well, i mean, the rates -- i will draw a conclusion that is
pro-quarter point rate hike. what you're seeing in the quarter is maybe walmart eviscerated again, dollar general, dollar tree, or people willing to pay up. that people are going back and shopping last year manny chirico said back-to-school was a disaster this year good. willing to buy full priced merchandise. pricing from toll is good. one and done people will be sanquine. >> certainly easter george, long time dissenter said the time is right for a near term hike. excessive patience not warranted. >> look the employment numbers are good, housing numbers are good, the retail numbers for a lot of mainline department stores are very good. we've got, you know, look the job growth is consistent. the market can handle her saying -- janet yellen saying september should be back on the table. quarter point provided we have to wait, don't really have a -- i'm looking at the european data
of brexit. plummet overseas and panic like with china they would have an excuse to the to do anything. i could make a case for a rate hike. until we get wage increases -- but the housing market is strong. the retail market is very, very good. when you see the dollar stores go down and you see the full priced guys go up, that is a bullish situation. >> yeah. that's -- you know -- >> toll brothers selling houses for $838,000. >> we will find out if we're in a moment soon. >> i'm not sitting here and saying wow, i'm sweating the program. i think if janet yellen says we could raise, we're going to think about it this year the market won't be traumatized. >> in the meantime watching the dow, bob is on the floor with more. good morning, bob. >> good morning, carl. financials a leader right now. retail is the laggard. no surprise here because you've mentioned this morning, same-store sales still an issue for the retailers. go through this quickly. dollar general i think the important thing here, penny
light. they did confirms the full-year earnings guidance here but comp store sales up 0.7%. the kconsensus was 2.7%. that was a disappointment. food deflation and reduction in food stamps as an issue but the competitive environment had, quote, sbeintensified. a reference to walmart there and something a lot of people are holding on to here. reaching on. you see dollar general down 11%. they authorized a $1 billion buyback there. $1 billion. that's 4% of the market cap of the company. remember what happened with toll brothers yesterday. essentially had buybacks of about 7% of the company. these buybacks are still very much a factor. dollar general you see has had a good year up 27%. williams-sonoma light on same-store sales. the numbers weren't that bad but look at the number here. 0.6% for them. the number i had was 2.8% on same-store sales.
that's again a little bit of a disappointment. that e-commerce number 51.7%. holy mackerel that company is flying at the top of their speed there for e-commerce. never seen a number that high for any other retail. that's good. but the ceo said the overall retail environment has softened and we are being impacted by a more cautious consumer. so again you get the slowdown that we've heard from everybody else in the last few days around retail here. guess is doing great, really up big right now. they had better than expected. the european results a bit on the surprising side so that's a 21% move up in guess. but again, the same story with comp store sales the numbers keep disappointing. compp store sales down 2.5%. believe it or not that was better than expected overall. this is a good number. but we've had 23 straight quarters of negative quarterly comp sales decline. this according to retail metrics. bear that in mind when seeing the number. 2.5% down, better than expected. it's been going down for a long,
long time. tiffanys up big, reaffirmed their guidance. that's good news. they had a very tough year, remember, what's been going on with them. they were down about 10% for the year. remember this stock was $110 a year and a half ago. so they're reflecting the tougher environment. look at the same-store sales here and i know the numbers were better than expected overall but asia pacific down 9%, europe down 13%, america down 9%. they talked a lot about the decline in prchurchases from tourists in the united states from china. this is a theme we've heard many time overall. if you want to know what weak oil is doing, how does that impact the retail environment did you see what signet big miss. down 2.3% and lowered full year guidance by a dollar. went out of their way to say the decline was broad based across merchandise categories and particularly pronounced in
energy producing regions. people have less money and the energy producing region goss out and buy less jewelry. right now the dow jones industrial average down 28 points. carl, back to you. >> bob, thank you very much. bob pisani. to the bond pits as well. rick santelli at the cme this morning. hey, rick. >> hi, carl. we've talked about it, the curve is flattening dramatically today. i wonder why. maybe jackson hole. look at the two day of 10s, definitely we had some decent durable goods. headline was good. proxy for business spending was good but one good month or two good months doesn't save that dynamic and it's something to pay attention to. a one week of 10s, to the top of the range. bund yields, bunds didn't have their julius preliminary durable goods but is the one-week chart like the one-week 10s tethered at the hip. open it up we know we've been talking about the compressed ranges whether it's fixed income whether it's the stock market, august 1st of 10s, going to the top of the range, but haven't
broken through. however, that 2s i referred to the flattening curve look at 2s since the beginning of august. hey, they broken through to the other side. open the chart up to brexit, 6/23, that's the last time yields were here. i know we're only arguing a couple basis points being at 78, but it's very important. we looked at the auctions thus far saying we're looking for investors at least for a dovish janet yellen. that doesn't mean anxiety doesn't enter into the equation. the clock is ticking. there could be surprises. you never know when you put a microphone and academic together what may happen. august 1st of the dollar index 2s are going up, maybe reflecting nervousness or at least position anxiety the dollar index will have none of it still on the soft side. carl, back to you. >> rick santelli in chicago, thanks. oil prices something to watch. we'll get nat gas inventories today. jackie deangelis at the nymex. >> hey, good morning to you,
carl. we're seeing some residual pressure on oil prices from the inventory number yesterday. trading a little bit over 46. now the 50-day moving average that's where the support is. $45.52. watch that level very closely. a close around 46 or under it today, could mean that we see more pressure to the downside. meantime traders are keeping an eye down south on storms. a tropical storm over puerto rico concerned this could turn into a hurricane and potentially move over to the gulf. no threat of that yet but it defl live is something to keep an eye on. the dollar something to watch as well ahead of yellen speaking tomorrow in wyoming. that's also having an impact on gold prices which are lower. the lowest price that we've seen in a month, 1321 the intraday session low for gold today. if we hear more dovish tone out of the fed we could see gold prices move. that's an interesting trade. as you mentioned 10:30 natural gas inventories also been a volatile trade up nearly 7% in the last week alone. we'll get you those numbers and talk to you soon.
>> jackie deangelis we'll talk to you in a bit. thanks with janet yellen's jackson hole speech a day away, a live interview with dallas fed president robert kaplan. also ahead, ralph nader is he satisfied with the steps mylan are taking to address the epipen controver controversy? more "squawk on the street" back in a minute. ♪ approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five,
but now is a good time to get the ball rolling. keep in mind, medicare only covers about eighty percent of part b medical costs. the rest is up to you. that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company come in. like all standardized medicare supplement insurance plans, they could help pay some of what medicare doesn't, saving you in out-of-pocket medical costs. you've learned that taking informed steps along the way really makes a difference later. that's what it means to go long™. call now and request this free decision guide. it's full of information on medicare and the range of aarp medicare supplement plans to choose from based on your needs and budget. all plans like these let you choose any doctor or hospital that accepts medicare patients, and there are no network restrictions. unitedhealthcare insurance company has over thirty years
experience and the commitment to roll along with you, keeping you on course. so call now and discover how an aarp medicare supplement plan could go long™ for you. these are the only medicare supplement insurance plans endorsed by aarp, an organization serving the needs of people 50 and over for generations. plus, nine out of ten plan members surveyed say they would recommend their plan to a friend. remember, medicare doesn't cover everything. the rest is up to you. call now, request your free decision guide and start gathering the information you need to help you keep rolling with confidence. go long™. ♪
♪ does uber have a big spending problem? a new report shows that uber lost at least $1.2 billion in the first half of the year. the giant hosts a conference call with investors despite being a private company and according to bloomberg reportedly lost over half a billion in q1, losses accelerated in q2, roughly 100 million of the losses from the u.s. most of the losses are seen overseas. they don't reflect the china deal yet which happened in july.
in fact, the report suggests this could be the nader for some of their losses. >> i think that there's a half dozen companies that i think we all accept are allowed to lose a lot of money because they could be amazon, obviously amazon being one of them. no one expects uber should be making money because they're in a grab. they wiped out lyft, lyft still in business but in terms of blunting them talking about what that company is worth, uber wins the world they can conceivably start taking up prices. i think it's now pretty well known uber doesn't make money at all and shouldn't be a shock to people. >> they do point out at this scale you would have to be looking to amazon in 2000, for companies increasing their market value, while losing large amounts of cash. >> i like the fact that there are a couple things you will pay for. millennials will. a lot for an apple phone, cosmetics because of the high definition of the apple phone
and uber. uber is something that parents like. i follow my kids where they are and the kids like because it's one of the great windfalls. it is a loved product and sometimes loved products get to be great stocks. >> you're not going to link it to the lyft report of unicorns having trouble finding buyers. >> i'm -- i think that this is a product millennials love and many companies are hoping to find a millennial that likes their product. this is a loved product. we all have it on our -- you know, i follow the kids everywhere. they can get away with nothing. >> if you live in pittsburgh before you know it you might get into one not driven by a human being. >> i know. >> singapore, pittsburgh. i think that it's -- look, we don't want kids out there having too good a time to -- want them in a cab. >> that is part of the game changing part. >> drunk driving. i mean let's -- if you can stop that, anybody can stop that that's great. >> when we come back we will get stop trading with jim and cover the names we haven't gotten to
yet. dow is in the narrow range down 17. don't go away. ♪ mapping the oceans. where we explore. protecting biodiversity. everywhere we work. defeating malaria. 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.
time for cramer and stop trading. >> listen to the whole conference call. williams-sonoma down on the headlines but as the call went down, west elm 15.8%, comps offsetting what people were concerned about with pottery barn. what a job here. this is the digital retailer and they've done a fantastic job. softening retail environment mentioned but everyone knew that. so this is one where we mentioned the top of the show, if everyone thought it was going to be bad and it was less bad, it flies. so that's what happened. we talked about -- i talked with manny chirico about fashion, fashion inventory. people who have fashion are doing well. lulu reports next week, opco saying look this is going to be a praekout quarter. a lot of things going right for lulu. some think it's a one trick pony. i think it's a good pony. >> 38%. >> good supply chain. really got the costs right. >> citi makes williams-sonoma
their top back-to-school period pick. >> yes. you mentioned that. they have -- they talk about halloween sales and back to school. listen, maybe here and then going up during the quarter. that was the key phrase on the conference call. should have mentioned that immediately. >> yeah. then we had this national retail federation survey already looking at holiday. i think their numbers are in the high 3. last year 3.4. >> i think it will be better than that. people have to start realizing when you don't have inventories you will pay full price. no reason for a price cut. we will have to pay more. >> that would be different. i mean inventory control into the two big seasons. >> manny chirico saying last year disaster, tis year normal. normal and regular we've not heard in a long time. too many stores he thinks the beginning of the store closings will be bullish. macy's is the beginning of the recognition that you know what we have too many stores and companies are taking action. i am a little more positive in
retail than most. but when i see the dollar stores go down my first read is people are feeling better about themselves not shopping as much at dollar tree. i'm a dollar tree because the bargains are incredible in the candy aisle. people they trade up in better times. trading up. >> they tend to when they feel like -- >> trading up. >> getting a raise and having a job security. "mad money" tonight what are you going to do. >> company called red sale, cyber fraud. the cyber security and cyber fraud stories all over them for "mad money." this is a private one. people always want fireeye as a takeout. focus on the cybereye. quarter okay, and palo alto. i'm not a fan of the group because it's overheated but right now in this -- they don't talk about the big -- i had a buddy hacked bad the other day. doesn't make the papers. they don't -- >> leslie jones, i mean there's still -- still going on. >> it's happening. they're all ransom hacks. in other words, people are paying without you hearing about it. >> jim, look forward to it.
see you tonight. >> big time. >> big day tomorrow. "mad money" tonight 6:00 p.m. eastern. when we return dallas fed president kaplan as we count down to yellen in jackson hole and ralph nader on mylan and the epipen controversy with the dow down 23. hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade
good thursday morning. david faber is off today. a wlots to watch as we're about exactly 24 hours away from yellen, retail, some of the lower cost retail names not doing well, but all of this in a holding pattern until we hear what the fed chair says tomorrow. >> where we begin our road map. out in jackson hole, moments away from a first on cnbc interview, with dallas fed governor robert kaplan. >> as pressure builds on mylan, former presidential candidate ralph nader weighs in on this epipen controversy. >> and watching retail as tiffany rallies after strong earnings report. we'll break down all of those numbers for you. but first, our top story is mylan shares higher as the
company announces it will cover up to $300 of the out-of-pocket costs for epipens after widespread outrage all week long. mylan's ceo heather bresch explained why it couldn't just lower prices on the drugs earlier this morning when she spoke on "squawk box." have as listen. >> had we reduced the list price i couldn't ensure that everyone who needs an epipen gets one. so we went around the system. that's what we announced today. this savingses card is equivalent to cash, $300. effectively we're cutting the price in half, but we're letting you take control of that. >> and as carl mentioned former presidential candidate ralph nader consumer advocate joins us to weigh in a little bit later this hour. mike, not sure she made the case as to why they couldn't just lower or cap price. >> she seems to want to focus the whole supply chain, focus on the entire supply chain for drugs and basically say there are all these friction points in there and wouldn't have been an
efficient way to guarantee the end consumer would get the benefit of this rebound or discount. -- rebate or discount. the market's interesting response betting the attention span of the world just isn't that long when it comes to these issues and maybe kind of inflating. there is pressure on those pvm description. >> the pharmacy manufactures. clearly not going away. members of congress calling for hearings. >> yeah. and presidential candidates weighing in. that's definitely true. meanwhile, investors watching jackson hole where fed chair janet yellen is set to speak tomorrow morning. st. lou steve liesman is joined by a special guest. hey, steve. >> carl, remember yesterday we had clouds on the tetons and take a look now, it's gorgeous tetons in the background. i think you will see more in a second. introduce my guest here, dallas fed president robert kaplan. thanks for joining us. >> thanks, steve. >> let me begin with our fed survey, which shows that 60% of our respondents say i mean,
basically the fed is making it up. they don't think there's a framework, 47 to 37, they say, the fed is going from the latest economic data. not going on the medium term forecast. is that the right way to think about it? >> are you making it up? >> of course not. part of the challenge fed is adjusting to that and what's happening is, is a lot as many have said, the neutral rate which sounds a little wonky but the natural rate of interest has been declining and a period of transition where the fed is adjusting to that and i think our job is to communicate much better than we do. how we're thinking about the economy and why we do what we do? >> that all may be true and it is. however, what i hear is reports economists have a ton of reports that say, if the fed -- if there's a strong jobs report in september the fed may hike in
september which essentially says that the next hike is based on a single jobs report. >> yeah. >> that's not -- i can only speak for myself. >> sure. >> as you know from talking to me, i've been focused on fundamental drivers that are driving the economy. aging demographics high levels of debt to gdp high levels of disruption globalization and so all -- everything all the existing data is within the context of longer term, more medium term drivers and so no one jobs report is not going to drive our thinking. i do believe the case for removing accommodation is strengthening but i wouldn't get into saying which meeting it's going to be at or talking about the calendar. but i think for most of us and i'll speak for myself i'm focusing on a longer term, medium term, forecast dynamics of economy and short-term data either confirms your thesis or undermines it and you have to revisit what you're thinking. >> let me go back and ask the question that everybody wants to know on street, can you make a
case for rate hike in september if the jobs report is strong? >> i'm going to stay away from talking about an individual meeting because i don't think it's productive and i think history has shown that more -- it can create more confusion. i think what you see is we're making progress on the employment front, and labor slack is coming out of the labor market. we're making frustratingly slow progress, but some progress on inflation. and i think that the gdp growth in the second half of the year will be stronger because the consumer is strong and even the second quarter gdp number which was disappointing, was disappointing because of an inventory adjustment but final demand was, in fact, strong. yeah, i think the case is strengthening. i'm not going to speculate on which meeting. >> can you make a case for a rate hike this year? >> i'm going try to be disciplined and i think you should conclude from that i think in the not too distant future if the facts continue to
confirm the thesis i just described, i think we're moving toward being able to take another step and i'll leave it at that. >> sara eisen has a question. >> it's good to talk to you again. sair a eisen. >> how are you? >> recently said the bond market is broken. do you think your policies and those of other central bankers around the country are distorting markets? >> i think the fundamental thing driving the bond market is liquidity in the world and a desire, a search for safe assets, a search for yield. i think that would be going on independent of the fed. i think the one thing i am conscious of is, there is a cost to rates fed funds rate at this level. it can create potentially, a desire to take more risk, it can distort markets, it hurts savers and to that extent it's an
element of what paul singer may be talking about. i think the predominant driver is what's going on globally in the search for yield. >> robert, a lot of talk out there about the possibility of raising the inflation target. some are saying a 3% target would show that the fed is symmetrical about 2%. there's also talk about a targeting nominal gdp or price levels. do you have any thoughts. should the fed go to a 3% inflation target. >> it's a healthy thing and as a former business person, i think it's always a healthy thing for the fed to periodically rereview its framework. at this point, i would need to see a lot more information before i would say i want to change our targets. you know, we're -- we are -- we've been frustratingly slow to meet our 2% gdp target and to me that would be mean i would be hesitant to raise the target beyond 2% unless we have other tools we plan to use to help achieve a higher target.
so no, i would want to keep the target at 2%. but i'm very open for us to rereview our frameworks nominal gdp targeting has a little more appeal for me because gdp nominal gdp is so important. but i don't think i'm in a position too to answer of those things without a thorough review. >> mike, go ahead. >> thanks. mr. kaplan, how do financial market conditions play into the decision-making process right now. financial markets quite stable at the moment, low volatility, a good recovery from that brexit shock. how does that filter into the committee's process? >> i think the main thing i look at is our financial conditions conducive to growth. in january and february, we saw a tightening of financial conditions if those had persisted, i think would have caused growth to decline. i think right now we've got very good healthy financial
conditions that are conducive to growth and it's a factor, i'm always looking for threats of financial tightening or bouts of stability to keep that in mind. that might be driven by a sudden strengthening further strengthening of the dollar and destabilization outside the united states particularly china. but right now i think we're in a sort of benign period here. >> you were just in china. can you give us an idea, there was a lot of concern back in january. >> yeah. >> that china was going to lead the world into a recession and that's backed off. and it seems like it's not on the burner at all. which one is right? the extreme concern or the benign negligence. >> neither is right. having lived in asia for five years china will be a challenge for the world for the next not two or three years but for the next 15, 20 years. why do i say that? they have high levels of overcapacity and when you go there you can see eye levels of
ov overcapacity. they're trying to manage gdp by borrowing more money and investing in state owned enterprise, infrastructure real estate and at some point, the chinese government is going to have to allow gdp growth to trend down, without the crutch of government spending. so the world will have to get used to lower levels of gdp growth from china. >> is it a source of systemic risk for the u.s.? >> something we need to be watching for the foreseeable future and why, because one, chinese growth, i believe it's reported to be in the neighborhood of 6.5% this year. it's going to trend down in future years. number two, because they have very high levels of debt to gdp and over capacity and almost doubled the level of debt to gdp, that creates some inherent potential instability that we just have to be aware of. we're the central bank of the united states but saw in january and february if you have instability and capital outflows
and other instability in china, that can tighten financial conditions here. this is not something that is going to get solved over the next few quarters, next few years. this is going to go on for a long time and we will have to watch it for a long time which is why we went. sara? >> i was just hoping to get your reaction to a piece by kevin in the "wall street journal" this morning, former fed governor. >> yeah. >> close insider wrote that, quote, the fed's models are unreliable policy erratic and guidance confusing and politically vulnerable and if the economy is closer to recession than resurgence the fed is poorly positioned to respond with force, efficacy and credibility. the fed is vulnerable. pretty scathing attack i would say from someone who used to be on the inside. >> yes. so let me give this comment. i know kevin and think highly of
kevin. we're at the stage where we need tools other than monetary policy to address economic challenges we face. aging demographics. monetary policy is not well designed to address that. we need policies that focus on growing the work force, building work force skills, education, probably need a regulatory review at the state, local and national level. i believe we need to revisit infrastructure spending. i think through most of my lifetime, up until the last seven years we had monetary policy, along with fiscal policy, and for the last 7 years primarily just monetary policy. and i think that period feeds to end and i think we need a broader array of policies to address our economic challenges. >> robert, we would be remiss if we didn't draw on some of your expertise when it comes to energy which is a big deal in the texas district. we've lost about a million barrels a day in the u.s. of production. are we at the bottom here and do
you think that prices and the markets have found equilibrium? >> yeah. i think and we think of the dallas fed that we're -- if we're not in balance now we will be in balance by the first quarter, first half of 2017. we still have record inventories globally to work off. and i'm talking about global supply -- demand balance. prices may not go up dramatically but they will firm and you will slowly bin begin to see rig count stabilize and begin to grow. marginly over time. 2017 will be a somewhat better year and the supply demand dynamics of the market are firming and stabilizing. >> when we talked last time, you had some of your business contacts wrp seeing the presidential election as uncertainty. do you see it that way? >> certainly a number of uncertainties out there, that's one of them. you know, we've been watching
carolly business spend -- carefully business spending. we've talked about this. that's one factor. other factors include weaker global demand, high rates of disruption by industry and all the things are putting a damper on capital spending and business spending and capacity additions and that's something to watch and pay attention to because the country needs higher productivity and we need higher levels of capital spending from businesses and right now it's been very sluggish. >> robert kaplan thanks for joining us. >> thanks, steve. >> dallas fed president live from jackson hole, wyoming. back to you guys. >> good stuff, steve. thank you so much. steve liesman for some reaction to that interview bring in art cashin, director of floor operations at ubs. between kaplan and george now, commentary today is net hawkish. would you agree? >> no. i think i heard a man who was trying to avoid ruling stanley fischer's plan to keep every meeting open. he talked about the need for
improvement in the economy. you heard from a man who doesn't see rates going up this year but doesn't want to mess around with the, if you would the house slogan and policy. i didn't hear him as hawkish. >> so trying to be disciplined as he said on timing, you think is trying to defer to whatever fisher and yellen -- >> yeah. he doesn't want to be accused of taking down that image they purposely are going out there, but if you listen to him he was most animated when he talked about the limitations on the economy. we need to increase productivity, to do this and this and this. they rattled off the tongue. so it sounds to me like that's a man who's concerned about the fact that monetary policy has reached its limits and one of the things you don't want to do is hike rateses. >> the constant refrain from any fed member when you criticize
their policy and ask whether they're running out of tools and efficacy you get the response fiscal authorities need to do the work. monetary policy is doing the work and that's why i asked about distortions because at some point you have to wonder inside the fed meet whether they talk about the cost benefit situation when it comes to their policies. >> but you're dead right. they're begging for fiscal stimulus, basically they get up at every session and say my work is done. they know they've reached their limitations and that's why i think they -- you know, when it comes down to it they would be hesitant to hike rates here because they know it hasn't pushed us over the line to functioning prosperity or whatever you want to call it and if we haven't gotten there, why reverse right now. so i -- i think there's a great deal of hesitancy but they want to keep the policy open so if
some magic combination comes in they can say look, we warned you. you're too complacent. better get with it. from the market the market remains complacent too. >> the hess tanti is another way of looking at it fueling the impatience that economists have about the process, the fed survey we did showed they don't really feel as if they know what the playbook is for the fed. is it almost successfully fipgts the last war? the last cycle so predictable and hiking rates 25 basis points, every meeting everyone knew what they were going to do ahead of time and why and felt as if that was problem. now it's very open ended and very much a judgment call. >> what they've done is, they walked away from a policy they had when they needed it. the policy used to be forward guidance. so you had some sense of i know where they're going and what they're doing. now data dependent. you're living from payroll report to payroll report on a
variety of other things. so it's going to be tough. now, to sara's point, the title of yellen's speech tomorrow is the monetary tool kit. so it -- that would almost indicate that she might not be talking about anything about timing but referring to other uses they have to make. i mean, the bizarre part of this is the fed is talking about hiking rates, so they can lower them again when things slow down. what happens if the rate hike causes things to slow down. might be an unintended cuss quensh. i would say -- consequence. the greatest threat to the market is the downside. they are not at all of the opinion that yellen will be hawkish. if she were to surprise, and actually be hawkish, i think there could be an airplane pocket here in both the stock and bond market. >> you maintain, no hikes this
year. >> looks that way to me. >> as convinced as you've been. >> so far it's been right. >> we should say kaplan is not a voting member this year. he becomes one in 2017. to me sounded like he's going to go with the consensus and with what chair says. >> i think the good thing about kaplan is like fisher before him, richard fisher, comes with business sense. not been a total academic and i find that reassuring. >> had him on to talk about hp and jc penney. art, thank you. >> my pleasure. >> joining us with that analysis. tiffany shares are moving higher as profit tops analyst estimates. but sales did fall short. we'll talk about those numbers. plus, former presidential candidate and consumer advocate ralph nader weighing in on the mylan epipen controversy. much more "squawk on the street" straight ahead.
announcer: they'll test you. try to break your will. but however loud the loudness gets. however many cheese puffs may fly. you're the driver. the one in control. stand firm. just wait. [click] and move only when you hear the click that says they're buckled in for the drive. never give up till they buckle up.
the death it toll in italy continues to rise as authorities are searching for survivors. lucy is live in italy for us with the latest. lucy? >> good morning, guys. the search and rescue operations are still under way. officials here are not giving up on the hope that some people could still potentially be trapped alive within the rubble. the pile behind me does not have anyone. they've searched rescue dogs, body sniffing dogs, cleared this
part but we can't pan unfortunately but further down the road there's still a large site, large building that collapsed and crews continue to work there. they say that although one person i've spoken to one of the rescue officials say 90% of the people they've been pulling out have not survived, there is still the hope that they will find survivors. i would like to remind you in 2009 in the l'aguila earthquake that killed more than 300 people there was one survivor that stayed alive more than 72 hours and that is giving them hope. there are many dangers, aftershocks, we talked about that earlier, one as powerful as 4.3, we felt it on the ground that makes the conditions a lot more dangerous here. here in amatrice the conditions are difficult for rescue workers but some of the other smaller hamlets in the surrounding areas, it's much more difficult for the crews to get there because you have these single one lane winding roads hard to get the bull dizers up there,
rescue crews a and that search and effort roperation will continue. some of the building collapses that have taken place, in particular a school the local government spent millions of dollars trying to earthquake proof that building reduced to rubble. a lot of tough questions going to be asked of the officials here in terms of the precautionary measures that have been taken and why they didn't hold up in the aftermath of the earthquake. guys? >> thank you for the update. lucy live in amatrice for us. turning back to the markets now watching shares of tiffany posting a surprise rise in quarterly profits helping to push the stock up more than 7%, almost 7% right now. the luxury retailer getting a boost from lower costs and price increases. reaffirming its full-year outlook. is the trend likely to continue? bring in brian nagle the senior retail analyst at oppenheimer,
welcome, brian. >> good morning. >> looks like you have an outperform on this stock, $80 price target. was there any improvement in the tiffany results or are they getting better at managing weakness in sales. >> i want to be clear. i like tiffany for a long time. long-term basis. but as i look at this report today, i very much view it as mixed. i think you highlighted it. sales were weak. and really weak across the board. particularly in the americas and mostly the united states and europe. where the company really beat earnings and to their credit they controlled costs much better in the quarter. the sales line is challenging for them right now. >> is this sharp reaction 6% move higher? stock still down 10%. under performer so far this year. do you think it's a little overdone? >> i'm surprised to see tiffany with these reports up 7%. i've had a number of my retail companies report results this week and over the last couple weeks, there's been the bounces
on weak results. what that tells me is the market is to a certain extent saying bad news is priced in which is a good thing. again i'm careful with this. like again the results today at tiffany do not necessarily support a 7% move higher in the stock. >> i just wonder if they're doing enough to reverse the trends. the macro environment is tough right now, the double whammy of the strong dollar on tourists and overseas sales. how much can you attribute to that and how much comes down to their execution some of the things they're doing to fight that. >> well, i think right now the vast majority of the weakness at tiffany is macro related. look what's happening in my view, the weakest spending environment in the united states at tiffany that's compounded by weak foreign tourism spending on the heels of a strong dollar and in europe some of the tragedies over there, things have gotten weaker as well. i think tiffanies continuing with a macro environment. there are internal issues with merchandising and things like that. tiffany has been dealing with
that for a while but mostly macro at this point. >> brian, you talked about the pattern that seems to have developed in the reporting season. it does seem as if there have been wild moves, some getting punished like the dollar stores and others but i wonder seems as if the industry is operating in the zero sum type environment, right, not very much top line and aggregate basis. matter of quarter to quarter who seems to have gotten inventories right and the rest of it. is that pretty much the climate for a while? >> i think that sums it up well. lot depends on the expectations heading into these reports. so, tiffany, again, i've talked about it, others have as well. it really wasn't surprising that sales were weak again. we've been talking about this a while. other companies like the dollar stores, the market may have expected somewhat better given where the consumer is right now. so i think a lot of it has to do with the expectations into the reports. the way you frame it is correct as well. >> what about the brand if do they have a problem with
millennials? 130-year-old brand does it have the same cache? they're trying to ramp up their advertising right now to appeal to younger demographic and social media as well. how much of a problem is that? >> i think it's real. you know, look it's interesting, the millennial conversation with all my retailers right now, all the retailers are trying to determine how to appeal to the millennial, tiffany in that group. i think that's -- that has been a weak spot at tiffany lower end more fashion forward jewelry even though they've had new product linesp where tiffany continues to perform really well, relatively speaking at the high end. that's really what i think determines or drives the tiffany brand their high-end thesis. put aside this macro weakness right now, the high-end business for tiffany still good. >> speaking of which, brian, people want to try to draw lines between tiffany doing well, signet not, dollar stores struggling, other specialty retailers not. are curls trading up and if so how can you call them distressed
or cautious? >> well, that's why i want -- i think that's what's not happening. i mean, the stocks are acting like that today, but as i look at the fundamentals of these companies, that's absolutely not happening. where i'm seeing weakness right now and again it's really across the board, in larger ticket discretionary products. tiffany is in the cross heirs of that. as i talk to companies in the home improvement space and other areas there's been weakness in the bigger ticket discretionary. >> we'll leave it there. thank you. >> thank you. >> analyst and optimist for tiffany at oppenheimer. >> when we come back former presidential candidate and consumer advocate ralph nader weighs in on the mylan epipen controversy. he will join us live on "squawk on the street."
this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t. everyone talks about what happens when you turn sixty-five. but, really, it's what you do before that counts. see, medicare doesn't cover everything. only about eighty percent of part b medical costs. the rest is on you. consider an aarp medicare
supplement insurance plan insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, it could really save you in out-of-pocket medical costs. so, call now and request this free decision guide. discover how an aarp medicare supplement plan could go long™ for you. do you want to choose your doctors? avoid networks? what about referrals? all plans like these let you visit any doctor or hospital that accepts medicare patients, with no networks and virtually no referrals needed. so, call now, request your free guide, and explore the range of aarp medicare supplement plans. sixty-five may get all the attention, but now is a good time to start thinking about how you want things to be. go long™.
a strong aftershock with a preliminary magnitude of 4.3 has hit earthquake struck central italy this morning. the death toll rising to at least 241. three towns in the region were reduced to rubble. search and rescue teams continue to look for and dig out survivors. in myanmar soldiers and residents begin cleaning up the debris from the powerful earthquake that struck that country killing at least four people and damaging 200 temples. the region one of myanmar's top tourist attractions. wounded victims of an attack at the american university in kabul are undergoing treatment at a hospital this morning. medics warn that some were in very serious condition. at least 13 people were killed, more than 40 wounded in wednesday's attack. the two gunmen were shot dead. no u.s. citizens were involved. cleanup has begun in the midwest where a series of tornados caused damage. gop vice presidential nominee and indiana governor mike pence will visit tornado ravaged cocomo indiana today. that's where a tornado took down
a starbucks with customers still inside. that's the news update at this hour. i'm going to send it back downtown to you. >> sue, thank you very much. when we come back a conversation with ralph nader former presidential candidate and consumer activist on that mylan price hike and what the company is doing today to respond. can an established bank move like a start-up? it's a question we get from some of our largest banking clients. the face of their business was tellers. then atm's. today it's their mobile app running on the ibm cloud. across every transaction, the hybrid cloud helps their data move quickly and securely. our clients are building out features and pushing updates faster, on five continents. with the ibm cloud, they can move at the speed of any start-up.
announcer: are your children in the right car seat for their age and size? it may be too late to check when you're on the road. [blaring car horn and skidding] fortunately, you're on the couch. your business needs better technology to drive better performance. so you need it to be reliable and fast. really fast. introducing the comcast business summer savings event. fast internet speed to drive performance,
plus cutting edge wifi for your employees and customers, and voice mobility so your calls find you wherever you are. get some of our most advanced products at a great price with over $500 in savings. call today and ask how to get these savings plus a $250 prepaid card. comcast business. built for business. we are getting breaking numbers here on nat gas inventories. jackie deangelis live at the nymex with that. jackie? >> the department of energy reporting an injection of natural gas stocks of 11 bcf slightly less than expectations we were looking for about 18 and you can see that prices made a nice move this morning and holding on to those gains. why? because last year, we got an injection in the 60s during this week also the five-year average as well. this is a few weeks in a row now that these injections are very slight and the market doesn't like it. it's getting a little nervous. remember nat gas prices have moved about 7% in a week alone.
still under that $3 level, but traders are watching this one closely. i will say in terms of total injections and total stocks, not much to be worried about right now. we're still 9% above where we were last year and 12% above the 5-year average. if these low injections continue that's where traders get nervous. >> mylan responding to critics of itting epipen pricing announcing it will cover 300 of the out of pocket costs at pharmacy. heather bresch addressed her frustration with congress and the pharmaceutical system. take a listen. >> congress and the leaders of this country, need to quit putting their toe in the topic and really fix the system. we have an outdated and inefficient system. you know what's happening the patient is paying twice. they're paying full retail price at the counter and they're paying higher premiums on insurance.
it was never intended that a consumer that the patients would be paying list price. never. the system wasn't built for that. >> joining us first on cnbc by phone consumer advocate ralph nader. good morning. >> good morning, carl. >> what do you make of this fix if we can call it that? >> sounds like double talk by heather bresch. she's making $10,000 an hour as the ceo of mylan and not talking straight. basically, this is greed on steroids. it's the kind of pay or die pricing system for the epipen. and parents are really frantic as to how they're going to pay for this. remember, this is an old product, been around for years. it's not a brand new invention that's going to be amortized in terms of research and development. and it's gone up like 500%. i mean people are paying 600, $700 for a set of the epipens.
so this is -- this is not that difficult to turn down. and the way to do it, the public outrage, you know, petition around the country, thousands are signing it and we can give you information go to my twitter handle @ralphnader. consumer groups are demanding mylan disclose its real costs to see how its profit eyring has spiraled in recent months for no apparent reason except greed and pension funds who may own mylan can start rattling their concern. the stock price is already getting a little shaky. and fourth, there are corporate campaigns, carl, like ray rogers' corporate campaign out of new york city, they know how to make quick changes in outrageous corporate behavior. boards of the directors, shareholder pressure. all this is short of what we should have, because mylan can't get away with this in other countries that have full medicare.
they can only get away with it in the country of their birth, not very patriotic. if we had full medicare they couldn't get away with this. >> how much blame do you sreser the pharma company and the benefit insurers. >> they're not doing their job. >> does she have cause to pass the buck. >> their's supposed to be representing the patient's interest. the insurance companies has so many skeletons in their closet they're not doing their job. they should be engaging in loss prevention and hammer these sky rocketing prices. i mean, you and i remember, there is a time when a pill went for a buck, a pill. that was something. and now it's going for $1,000 a pill for some of the drugs. many of them funded by research and development compliments of the u.s. taxpayer through the national institutes of health. they have no shame, corporate welfare, corny capitalism and they fixed the system and now
they're jamming it to children with severe algerlys, parents wondering how they will pay for this. we have to organize america. enough of this. >> elijah cummings requesting a hearing in september. you said regulatory action is needed. what should congress do? >> there's essential facility. electric telephone rates are regulated. they're considered essential facilities and when you've got a de facto monopoly by mylan because the main competitor is out of the market because of a recall problem it can be described as an essential facility, life saving facility and under that doctrine easier to regulate. what if your telephone or electric company decided to go 500% increase and then give you a coupon to, you know, vent the steam a bit. this is ridiculous. the system is out of control. it's not just mylan. it's the whole drug industry. they're hammering american
consumers who have funded and provided them with tax credits and government r&d and they're charging the american people in the land of their corporate birth, the highest prices in the world. they can't get away with this in canada and europe and australia. >> you are not the only one outraged. hillary clinton tweeted and shook the sector again yesterday. she's proposed forcing pharma companies to spend more on research, capping the out-of-pocket expenses of certain drugs, do you think she's the one to deal with this issue credibly? do you like her ideas? >> well, it's now campaign rhetoric. she hasn't demonstrated this when she was a senator from new york. so we have to wait and see. all these politicians react to media expo says and education and public outrage and shareholder reaction from the pensions and mutual funds all kind of ways to turn the screws
so give these companies big profits not sky rocketing pay or profits. >> do you believe pension funds would raise a stink over this? >> most of them would not. the share price was shaky this week but all you need is a labor pension fund or a teachers retirement fund just to send a signal up and it will reach executive suite and heather bresch as she counts her $10,000 an hour pay. i mean, really, it's gross terrific isn't isn't it? >> adds an additional layer to what would have been a big enough story already? >> very much. part of this plutocracy, it's kind of heather bresch says she's a mother and she understands the problem. she doesn't understand the problem. this was under her watch and the price sky rocketed 500% for no reason.
that's why we want the company to disclose its costs if it's considered an essential legal doctrine that puts it in a different space in regulatory space. >> finally, for those who argue the answer is in approving more drugs, more quickly, i'm not saying -- i'm not applying this to the mylan case, but how do you avoid the trouble of approving drugs that are not well vetted yet? >> well, it's just, you know, begging for a big tragedy, right. if they're not ready you can have like a disyaeser like decades ago which luckily the food and drug administration stopped when the drug was being imported from europe and produced thousands of kids with limbs, you know, without limbs or arms or legs. so we got to be very careful of that. what mylan needs is competition, obviously. it has a de facto monopoly which is why it took advantage of all the children with the severe allergens and it needs competition, generic
competition, that's easy in terms of the instructions to the parents, for example, and it needs nongeneric competition. until then, it's got to be regulated as an essential facili facility. >> that's a good insight on the story that a lot of people are paying attention to. mr. nader, thanks again. good to talk to you again. >> thank you, carl. thanks cnbc. >> ralph nader joining us on the mylan case. by the way today on cnbc senator charles grassley who has publicly called for mylan to explain its pricing policies will give his take to power lunch 2:30 eastern time. >> when we come back in the next hour, uber reportedly losing over a billion dollars in the first half of this year alone. business insiders henry blodget will look at where the company stands ahead of a potential ipo. another check on the markets. some weakness for the dow down 9 points and the s&p, the nasdaq stays positive but is at risk at being down for the week. the first time in several. we will be right back on "squawk on the street."
the dow down 1 points. to the cme group. rick santelli has the santelli exchange. hi, rick. >> hi, sara. thank you. i would like to welcome my affordable care act/obama care guest, bob. i think bob's forgotten more about obama care than most of us try to study up and get on top of. thanks for taking the time this morning, bob. >> you're welcome. >> listen, i'm going to read a quote from a paper you sent me from katherine martin, she leads hhs's planning and evaluation office. she wrote today, headline rate increases do to the reflect what customers actually pay.
so when i'm reading that some of the blues are going up from 40 to 60%, some more or dropping out completely how does her statement figure in. give me the reality or nonreality of that statement, bob? >> i'm sorry, but that's just incredibly nonreality of that statement. >> that's incredibly misleading. what she is referring to is the people that get the subsidies and have the amount of premium capped because of the subsidy but only half of the individual health insurance market gets one at all so half the market is going to take the full brunt of the 60% rate increase coming down for them. the other thing is even those people in order to miss the big rate increase have noouf to the lowest piesed plan. you're getting less so they're focussing on just one dimension of this and once again this administration and i have seen many obama supporters do this
too, just wants to ignore the millions of people that don't get a subsidy for their individual health insurance and take the full whack here with the big rate increases. they don't care about those people they get some subsidy over that and that's half the market. but even then if you're getting a subsidy most people are still paying a substantial portion of
the premium a family of four has to pay $5,000 a year in the premium and as a result because of the high prices largely for the working and middle class. >> i'm going to stop you there. we'll go into the proarea because what i want to talk about is if you only have a hand full of car companies selling auto insurance verses the hundreds we have today, what will be the difference? we'll talk competition on pro. >> look forward to it. >> mike, back to you. >> rick, thanks. lots of attention in the health care food chain. >> when we come back a big move to the down side today for dollar stores. dollar tree and dollar general struggling after reporting earnings. a closer look at that after the break.
medicare only covers about eighty percent of part b medical costs. the rest is up to you. that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company come in. like all standardized medicare supplement insurance plans, they could help save you in out-of-pocket medical costs. taking informed steps really makes a difference later. that's what it means to go long™. call now and request this free decision guide and explore the range of aarp medicare supplement plans. all plans like these let you choose any doctor or hospital that accepts medicare patients. these are the only medicare supplement insurance plans endorsed by aarp. call now and request your free decision guide... and start gathering the information you need to help you go long™.
>> 13% profits in sales and the one consumer d. [ inaudible ] discretionary stock. a miss on everything when it comes to signet that runs some of the mall jewelry stores. they were down 2.3%. that's just one me trick. >> and it's been under attack by the bears. it's about a 10% shortage because there was scrutiny of sales practices and allegations of swapping out diamonds and reliance on extending credit to their customers. maybe it's confirming that they are struggling a little bit in terms of organic demand. >> different price point than tiffany which is moving up, to your point earlier. >> that's true. >> a lot more markets coverage with the dow down almost 5 points when squawk alley comes
right back. for decades, investors have used a 60/40 stock and bond model, with little in alternatives. yet alternatives can tap opportunities that traditional assets can't. and even though they're called alternatives, they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation? goodbye 60/40, hello 50/30/20. ♪
we call it dark data. 80% is invisible to most businesses. the ibm cloud has tools that can help see dark data and put it to work. hello, my name is watson. working with watson in the ibm cloud, we can help an energy company predict pipeline corrosion. and help a start-up to use social data to predict market trends. now businesses can get more out of their data. that's what the ibm cloud is built for. good morning it is 8:00 a.m. at uber headquaters out west and 11:00 a.m. on wall street and squawk alley is live.
♪ >> welcome to squawk alley for a thursday morning. kayla and me at post 9. john fort at san francisco at one market. business insider ceo with us as well and what a story to lead the hour. mylan ceo responding to critics over this massive controversy dominating the headlines this week. we want to get right to ryan sullivan at hq that sat down for a first on cnbc interview this morning. what a sit down. >> i appreciate that carl.