the price of canadian crude, the benchmark fell earlier this week to below 30 canadian dollars a barrel. i can confirm that oil is now cheeper than beer. yesterday i went out and bought this ka nad dan canadian -- >> we lost her. make sure you join us tomorrow. "squawk on the street" begins right now. >> good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer. busy session already in place as the retail earnings continue to pour in. premarket is a littling soe sog. the benchmarks right around 220.

cci up one point today. oil is just above 42. in our road map this morning, target with a beat and a raise while lowe's misses. issuing words of caution, and11s years ago today google went public. first up target posting better than expected numbers. u.s. comps up 2.4, driven by items includes apparel. and then there's lowe's a quarterly earnings miss beating on revenue. comps up 4.3 but issuing guidance slightly above consens consensus. 25 straight quarters of underperforming depot. >> everyone underperforms depot. that conference call yesterday, it's like they had this comp average, okay, about what aisles are doing better than others, and there were almost

everything. big ticket stuff and big ticket appliance for lowe's. in my many dealings with home depot, we're excited about the outdoor. you get spring planting season. that's historically their christmas. in huge parts of the country, they had bad business. they still blew away the numbers. i have to tell you i feel bad for lowe's. lowe's, they're there, and they did a great job and they're doing well. but in terms of what home depot is doing in the pro business, it's incredible. double digit comps in commercial lighting power towel accessories, hardware, compressors, what are they not doing? i mean, they are a juggernaut. >> lowe's does narrow the gap

but it's trying to rub faster than usain bolt? >> how do you do it? >> there are no steroids or doping in this game. maybe you're allowed to used a roll. i don't know. if i'm up against, i don't know what i do if i'm up against home depot. silver medal. no one ever felt bad about winning a silver. okay? they won the silver medal. that's not bad. >> target, 1.22 beats 1.11. comps up 2.4. people are talking about the merchandising being better than it was a year ago. >> i find it funny all the areas walmart did badly, target did well. can i draw a conclusion? style, baby, kids, wellness, this is apparel. i didn't hear any good call out from walmart on that. natural and organic, and don't forget. pharmacy, they're getting rid of

that. walmart is saddled with it and this does not include back to school which is the second best season for target after christmas. i've got to tell you, target is back. i think the stock is undervalued. no one even talked about the settlement they had on the breach. that was a positive settlement. there are changes at the top. they are getting rid of the people -- they have people on the move at target. cornell is an aggressive guy. the wife is from queens. they're tough. they do it with a velvet glove. the wife doesn't look like she's tough but you cross her, which you didn't this weekend. thank you. >> i tweeted a list of the comps that were good. today it's american eagle up 11. people write back you're not counting macy's, walmart. so net net is the retail earnings season -- >> it's a good one. and gasoline is good.

now, unfortunately, it's the only good one. i wake up this morning, and china's first ismanipulated. then the government comes in and they nail the close. i wonder if they're going to mark up at the end of the month. they're incredible. they can turn the market around. europe is the distraction here. they nailed the greece thing and i was hoping the euro would go higher versus the dollar. no. we end up a big hole of industrials not doing well. the funnels narrow. when we have to hope that analog devices and an interview with david aldridge, when we hope there's a read through that's positive to apple, that's what we need in order to get tech going. because right now tech and industrials have been horrendous, and i think it's because of the gun lock multiple wrap that we're hearing.

>> we'll talk about it in a little while. >> people are sending around charts of intraday china last night, and it tooks like someone landing an airplane. it comes in at the end right in the middle of the runway. you talk act tbout the sky work int interview you had on mad. >> picked up by usa today. this is -- this is a piece dated august 12th. it has been the piece that has dogged your company ever since. it says, remember chinese stock market down. sky works solutions, 83% of your revenues are from china. true or false? >> that's false. we do about 20 % to 25% of our revenue in china. i could speculate maybe they're picking up all contract manufacturers. we have products built there and not consumed there. >> that statistic crushed them.

if you read through the whole document, which i had to do. when what you came up with is when you assemble, you do it in china. the sky works parts, of which already lots, they're assembled in china. that's where they got that figure, and then they're saying your phone that sprint and t mobile used to give you, they're made in china but not sold in china. i said is china on track with the 20%. he said yes. i asked him again because i didn't believe him. it was faux not believe, tv entertainment. and he says china is very much on track. that is not in sync with what people say. you wasn't watch netflix on their cell phones unlike with bob ledger. he's giving you a free year of netflix because he's so

confident that you won't buffer. straight out of craziness. >> it leads us to yum. naming nikki pant to run yum. that stock is up almost 2 % at the open. >> everyone has wanted this spin off of kfc. two weeks ago you didn't want it because people felt they wouldn't be going to kfc because the stock market is down. you don't buy as many bmws, but don't equate that to chicken wings. one is more expensive. people are attributing chicken wing sales and stock market as low. this guy comes in. david novak has always said we're not spinning off kfc. it makes no sense. you get a new guy coming in, spin off, get $100 stock. >> 2 p.m., the minutes of july fed meeting looking for hints of a potential rate hike.

and an on ed in the journal says tightening monetary policy when inflation is projected to be so low is. it's a bad idea for the central bank to hike with junk bods at four-year lows saying it opens the lid on pandora's box. he's leaving. i don't think he votes anymore. we know he's ultra dovish. >> most of the fed people that speak out are calling for a rate hike because of employment. i think this recovery is this thin. you got housing, and that puts a lot of people to work, and then you have what? what? what else is strong? not oil and gas. maybe nonresidential, maybe not. maybe infrastructure, maybe not. manufacturing -- definitely not. retail, if it's related to home, yes. if 100 million people shop at

walmart, not so hot. i'm looking at numbers that tell me if you have inflation as low as it is, why would you bother as to this and send the dollar through the roof, kind of ending our exports, given everybody what they really want which is the u.s. consumer. and i've got to tell you, it doesn't make any sense. the chatter is this. i was going over why the stocks have good balance sheets and multiple rate hikes make that 4% yield not hot. it's a jimmy carter like malaise. >> you're not a september guy. >> part of me says get it over with. but then they'll do it again in december. this is what's keeping the lid on the market. everyone kind of -- i think there's a perception of find me something else that's strong other than housing. housing is 10% of the economy. 10%. there's another 90% out there that is not so hot.

yes, the 10% has some bleed through white collar and blue collar. 90% of the economy is not that strong and that's worry someto me. >> i mean, people would argue, you have an unemployment rate that suggestions wags wangges ao move. >> they can't build them fast enough. look, i understand the case domestically that you can say housing and employment are strong. but if you want to really ko manufacturing, you raise rates. i mean, there are currency wars all over the world. they're about trying to get you to buy a kia versus a mercedes or toyota. do you ever mention ford stock? >> you've mentioned it a couple times. >> they're like the phillies. every time you look, they're 14

pack, except for when they're 19 back. ford is a good company. >> gm, my company owns. i haven't called myself a moron. i've been saying i'm an idiot. i'm taking a step in the wrong direction. these are american companies that are not doing as well as the companies that really are taking advantage of the strong dollar. look, the companies that are doing well are food companies that don't sell a lot of food overseas. and housing. and okay, listen, you can see that dr horton and pepsico are the economy and home depot but walmart is not. i have to tell you, technology not that good, finance okay. you want to bring a rate hike on because you think we ought to have a rate hike. you know, we ought to have a lot of sun shine. we should have it on the weekends. >> not good enough. >> i need a little for.

others don't. others being the others who come on and say it's time. to me, the only other people getting away with that are people on meet the press saying you're going to love it. our country, you're going to love it. >> yes. we'll have a lot of victories. >> it's like mcdonald's, you'll love it. >> we'll talk about it later, over 100. when we come back, 11 years ago google made its stock market debut. we'll look at the past, protect, and future. take a look at what mark haines said on this show on that day. also ernie els, known as the big easy, take a look at the premarket. six-month range for the s&p is 4.4%. narrowing than any six months in history. more "squawk on the street" live from post nine in a minute.

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nasdaq market site this morning set to light the wall. google finally begins trading today. we're one day closer to this not being a story. >> that was the late mark haines

11 years ago as google went public. up 18% on the first day. but since then, jim, split adjusted, 1,250%. >> the ipo was botched, terribly. people didn't really understand it. it was never done again. it was trying to get a lot of individuals involved and confused institutions. at the time, i think people didn't understand what search meant. they didn't understand that we would all end up paying google in one way or another. google seemed like it was free. i mean, you couldn't figure out how they made money. they had a lot of ways to make money. it was just a major mispricing. versus the unicorns, most of them, i don't believe in any more than unicorns itself. >> times has a piece today about how google can't hire because people are going to airbnb and uber. >> there's a couple schools that do computer science.

that's the problem. when i was growing up it was a finance major. we don't have enough computer science people in this country to staff it now. we have a lot of people who can do a lot of things, but they can't do computer science. andrew lock will be recruited by one of these companies when he's done because he knows computer science. >> they're saying youtube rapidly developing into a material growth driver creating the revenue as ad budgets go onli online. >> i think you're going to see venture apt lists invest in companies and unicorns within google, maybe even tracking stock unicorns where you'll see the valuation of the rest of the stuff is good and not going to

pull down google. i think google should be higher. i expected an amazon-like multiple expansion over many days. you got one pop and then people forgot. i think that's a mistake. this is a google that is run by ruth porat. you know how i always say someone is nice. >> and not in a good way. >> yeah not nice. good. >> that's a compliment coming from you. >> ruth porat, not nice, strong. >> when we come back, we'll talk to jim, and take a look at the premarket which is a little bit under water. a lot more "squawk on the street" back in just a moment.

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♪ >> about eight minutes to the opening bell. let's get cramer's mad dash. why are you looking at your apple watch? >> force touch. i got to call herb back. here's the deal. that's analog devices. they blew out the number. the positive read is for what's the next iphone s but also the watch. business is good. this has been a company that's been an underperformer. a lot of people felt they're too industrial, but they got an apple contract. the read is that the watch isn't so bad. everyone thinks the watch is a joke but me and tim cook. this is a sign that the watch is getting traction. the press, okay? and a lot of other things i press it's like my stocks here, i use it.

other people obviously do too or analog devices wouldn't be up that much. >> this is the forced touch technology in. >> yes. no one is ever allowed to mention apple. if you were to ask the ceo of analog devices how much of your business is apple, you would have to say -- you know, it would have to be like -- >> now the dbig discussion is i force touch migrates to other products. >> i think it will. i think the watch and wearables are powerful. so does david aldridge. i think pressure touch is very important. it's an innovation, and it's adi. >> all right. hormel beats by a penny. >> one of the confusing things was it almost made it sound like you're supposed to refrigerate spam. i thought you didn't have to. that was mist fieing to me, but they made two acquisitions,

muscle milk and apple gate farms. they did well even though avian flu and pork prices. hormel is getting more natural and organic, which, by the way, target -- i know. >> some might consider that a stretch. >> i know. here, this is natural and organic versus the old days where it's like that. i know hormel, spam does not lend itself to think it whole foods but the other things are positive. i'm not kidding. they're great guys. >> i have not looked at this chart for a while. it's not a bad-looking chart. it's no longer about spam juice. >> we'll get to the opening bell in just a minute. just about 5 and a half minutes. don't go away.

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you're watching "squawk on the street." live from the financial capital of the world. the opening bell in just about two and a half minutes.

a lot going on in addition to the retail earnings. china intervening overnight again. fed minutes at 2:00. the vote in favor of the greek deal. vietnam devaluing and now cpi with the smallest rise of the year thanks to air fares. down 5.4 -- 5.6. >> there was an article. the article by the airlines like this is the not the halson days of airline. they have so much money. they can keep buying back stock but i think air fare travel has been a problem. it's expensive. travel has been hurt by the strong dollar. i know that the fed is supposed the raise but we'll have even less tourism. macy's was hurt by the strong dollar.

it doesn't play a role in target or walmart, but travel has been hurt by strong dollar. >> we just had a hot ppi number. you a cpi with the smallest rise of the year. you're more of the mind you wait until it's in your face. >> i know that's going to be -- people are going to say that shows no rigor. i keep thinking act 1937. they got the same pressure to be able to raise that i'm hearing now and it threw us back into a recession. the only thing that ended the recession was the war, and we don't want that to be the way to end a recession. >> the front page of the ft today takes a look at outflows. $1 trillion in -- >> this was amazing, this article. it was very worrisome. places like malaysia, these are '97, '98. i'm going on shows and trying to

explain contagion. no one understood it but stanley fischer. now he is our vice chairman. he can save us from making it so that the outflows on multiple trillions. you don't want these countries in recession. >> there's the opening bell, and the s&p at the bottom of your screen. at the big screen it's power secure international, a provider of technology and internet technology. and streamline health informations, a provider of health information technology and services to hospitals. so i guess we'll watch target and lo lowe's to start. >> the color is fabulous in target. brian cornell came into a company that was doing quite r poorly. laid off a lot of people who were not producing good numbers. and this idea that they're not in the pharmacy is so important.

circle back to the emerging markets which is what i'm worried about. brazil. when you speak to ceos and they whisper something, they whisper brazil. watch brazil, as if brazil is no longer a great country, and no longer -- it's almost as if people are describiing brazil a the next venezuela. be careful. they're having the olympics. brazil is an undercurrent of this whole world -- the whole world is worried about that index, and if we don't stay focussed on that, that's like not focusing on greece. brazil is really big and every time i read a new number out of china, i want to put a sell on brazil. these are big countries. you don't want a credit default in brazil. i saw an article saying they're going to get their act together. be aware, it's the unseen forces

that have me concerned. one of the reasons whirlpool isn't up big, they have a big business in brazil. >> i'm looking at the dow. walmart is the worst component. this is going to take you back to early '13, these prices on walmart. it looks as if people are saying just what you said at the top of the show, that target is doing well exactly where they're struggling. >> they're taking it to them and they can do that. i had a list of companies that are trading in the s&p exactly where they were in 2013 this week. it's a huge list. we've given up a lot of gains. walmart, in particular, they've really -- the worse thing that happened to walmart is brian cornell coming into target. he went in and looked at where walmart was weak. they emphasize baby at target to get a lifetime customer. and i think wall namart is

disorganized. they want to be natural and organic and say how to do it. it's in in cornell's dna to be organic. whole foods is going to get interesting. it's low. something is going to happen but first you have to deal with the fact that they could have negative comps. but natural and organic at target was huge. >> and all the other underperformers today are what you'd expect boeing, gm, depoup, utx. >> there was a big hope the dollar wouldn't be strong if the greek pack wept through. i think since the day disney broke down, it was at 120 and change, and people just, that was probably the market darling. and i think we're now realizing. -- i got a nice upgrade but that

was the day when people said the whole blue chip formulation that we were using which is the big caps that are doing well, they took away disney. it made it so a lot of other company's stocks have not done well. i think that was a day that may have marked some sort of short-term -- >> institutional investor bullish sentiment below 40 for the first time this year. >> we should be getting a snap back. >> so is that a stealth correction meaning contrary, you would want to buy into this or does that not improve your mood? >> this correction involves companies that go down $0.38 and $0.42 every day. when you look at a company like 3 m which my travel trust owns, may missed the quarter by a little bit. it is now down from 1.70. i don't want to look at 3 m. dow chemical, dupont, i mean,

these are big cap companies. it's like oh, ibm, i'm going to avert my eyes. these are like train wrecks. it's like the fugitive. except for i do care. >> well, we have a large percentage of the s&ps in a bear market. momentum stocks are trading at a huge premium relative to the rest of the market which the bears are feasting on that. >> for every winner there's ten losers. netflix is winning so there's ten companies that aren't winning because of netflix. google is winning. that means the yahoo guys are doing well. home depot is doing well. other guys are getting hurt. a lot of these big cap growth companies that you kind of relied on as core positions, they're just getting smoked. >> right. and for those people who write in today saying all right, jim, housing is 10% but it's the important 10% of the economy,

you don't think it's enough to have confidence in -- >> i'm still dealing with the unimportant 90%. yes. >> they would respond that there are multiple -- >> after he tries to sell you a mortgage before the appetizer, then the main course comes. then he returns to try to get you to buy the mortgage. you have to understand that you're not going to get great a great bank earnings here or great tech earnings here because of international. you're not going to get the industrials doing well. so it's true housing can punch above its weight, but it's not going to punch at eaton. eaton doesn't do well in that. i keep hoping that boeing, remember, we had great numbers from boeing. remember, ge is a great example. only 13% of ge is oil and gas. ge is doing well. there isn't a division with

intellectual property that isn't moving up. they integrated mris with examining pipeline. there's so much greatness in ge except for the stock. ge stock is -- it's like someone decided to take gorilla glue and nail it to 25. >> $25.80. >> okay. how can ge not be at 29. how can ppg not hold 105? those are quandaries to me. but tesla, you know, tesla, how much is a tesla? don't tell me it's down today. is it a federal holiday? >> tesla inkapslated whatever. >> if tesla is good, everything else in auto is bad.

that's not true. really, i think i'm speaking for a lot of people in the market who don't want to look at their stocks. they just don't want to look at them because their stocks are down $0.51 and $0.48 every day, and you come in and it's just a slog every day. and then periodically you get a target but then you say that's bad for walmart. >> right. >> walmart is a big company. >> it sounds like you're saying no one is going to want to chase this in the last three months of the year. >> the major thing in this market is not housing. it's bearishness. if we got fed guys who came on and said let's wait until next year who are saying we have to tighten, then you would see a furious rally. most of the companies, people are saying listening, they're teetering. if you get that strong dollar even stronger, the euro on the fxe goes to 100, the earnings have to be cut, and earnings estimates get cut, stocks go down. >> it's not helping today. >> these guys.

it's nobody's job to keep the market up other than that communist chinese stock prop -- what are they calling it? they have a name for it. >> it's plunge protection team but it's in mandarin. >> i don't know mandarin but it basically says no stock will go below this. they have a line in the sand. you know that can't last. >> yes. with that, jim has made it clear where he's coming down. the dow is down bob is on the floor. >> reporter: we have the same problem we've been having since june. that is weakness in material stocks, global commodity business is being routed once again. there's weakness in energy and weakness in the big global industrial names that depend on global growth, particularly in asia and latin america. as an example, i want to point out what's going on in glen core. they trade in london. look at what's going on in london today. they're down 9% in london.

they had their reports out. mid year reports. put it simply, their cash flow is down 30% compared to the same period last year because of global commodity collapse, and other kmoitds in london are trading to the downside. the ceo, actually went out of the way to blame it partly on speculative hedge fund activity. it's the funds driving prices lower and not the actual demand in china. he went onto say the actual demand in china is not that bad in our commodities. i find this strange because other people are reporting the problem but it is clear china is at the heart of the company. another company that makes mining equipment, they're a kpet competitor. they've had a plant in pennsylvania for over 100 years. they're closing it permanently. to permanently close a mining manufacturing plant, that's a

long-term decision, obviously. this is what they said. they made a statement. this is a permanent change in the mining industry. we need to find new and more efficient ways to run our business. that's a long-term decision. that's a slow down in china and commodities. and caterpillar has had similar comments about the decline in equipment manufacturing in the mining business. in china, you guys on the plunge protection team, you're right. i want to show you the shanghai intraday. opposite of yesterday. opposite yesterday. the morning session a big rise and a collapse. this afternoon, overnight, we had a decline in the morning session and then mysteriously everything turned around. i think your comment on plunge protection is probably right but they did not come out and say the government was intervening. asia elsewhere mostly on the downside. south korea down. a small rise in malaysia, and those smaller countries.

a small decline. same situation over in europe. generally weaker across the board. we saw france and italy, all to the downside along with germ an as well. a lot of comments on target. i thought the guidance was rather conservative, 79 to 89 for the quarter. that's the only thing disappointing about it. but 2 .4% same store sale. that was good. they include digital sales in with same store sales in what's called the omnichannel. this is a change. many companies are doing this. i want to point out how important digital has to be. total comp store sales 2 .4%. the physical store 1.8%. digital was.6%. digital channels grew 30% over the quarter compared the same period last year.

i think that's significant. and good for them. a nice move. home and apparel was up 4% to 5%. this was a good quarter. lowe's not quite as great. i think the guidance, they gave 3.29. the same store sales up 4.3%. home depot up 4 .9%. i checked on this. this is the 25th straight quarter where lowe's has been below home depot. the reason is home depot has the contracto contractors. you walk in and it looks like a construction site. lowe's doesn't have as much stuff in the middle of the aisles. they need to find a way to attract the contractors. they've been underperforming at least in same store sales. >> thank you very much, bob.

ten-year creeping up above 220. let's go to rick. >> reporter: good morning. you know, in the santelli exchange a couple hours from now, we'll go over some of the numbers. granted, that one could argue that today's cpi was cooler but the lowest read equals the lowest read in the same way that ppi wasn't the hottest read, it equalled the hottest read. do do down .7. plunge protection, left side, qe on the other. qe in certain countries like japan, they're a great customer for the e mini futures. what's the difference, really. today is about two-day chartings. who is in control of rates when they're not seeing a lot of the type of activity that used to be integral to the cash market? we're seeing high frequently people? how can you tell? it's kind of easy sometimes. look at a one-day chart.

the market didn't act like the data was cool. when you put in the 2-day, it seems as though it ate a pack man monster. look at the bunds and then the two-day. the dynamics the same but it hasn't gotten the girth the tens have. tens are leading the way but leading the way, still super glued together hand in hand. look at the differential. i've shown this chart a lot. this goes back to june 1st. it's been in a tight range. if you get one market right, you'll get the other market right. if we switch gears, we're not using the dollar index. people are preoccupied with what's going on with the yuan. we know it's included in the trade weighted dollar index. look at the chart since august and year to date. a much different view than the dollar index which is obviously

euro centric. nothing wrong with that but that's not where the focus is going. the euro versus dollar is tame as of late. back to you. >> rick in chicago. oil with some moderate losses today. ja jackie. >> reporter: good morning. we saw strength in oil prices yesterday. last night we got a draw down of 2.3 million barrels. if we get a draw down that's similar, we probably won't see too much price action. it's worked into the numbers. if we see something that da deviates, we could see movement. seeing some resistance at the $43 level. crude trading at $42.73. cru i will say this. because of the recent spike that

we've seen, crude prices tracking down 15%. pairing some of the losses. a final note because of the fed statement today or the minutes coming out this morning. gold climbing, a little bit of a stealth climb, over 1100. no one was seeing that coming but it looks like the gold traders are operating to see more dovish commentary coming from the fed. >> thank you so much. when we come back, apple firing back at a report about users ditching its music service. in the meantime, dow down a quick 143 points.

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dow map not looking so hot. almost ever component in the red except for home depot and mcdonald's, it hit 101 and change yesterday. this was a new 52-week high. i assume you're going to say yield. >> yes. some of the numbers overseas

aren't that bad. i think easter brook is trying to win over the franchisees. simplifying the menu. it is a great play on gasoline. do not forget, he's going to be doing a loyalty program of some significance and a technology program to be able to make it so the line for the drive through window moves faster. that's going to be his mark on mcdonald's, i like him. >> why does it fly in the face -- >> i think people are willing to accept the fact that this company has traded off of u.s. numbers even though it shouldn't. >> but u.s. is shrinking. >> yes. but they're closing bad stores. they're getting some pride back. i think the guy has real game, and i really think that there's going to be a turn in the u.s.

over the course of the next 18 months. it will take that lock and in the meantime, that yield is safe. the balance sheet is good. i don't think there's a big restructuring. he's going to integrate technology. the rest of that cohort is on fire. restaurants have been shown to have the best correlation to gasoline. >> they're talking $2 a gallon by year end as an average that's incredible. >> this is why it's so hard to figure out how the airlines can be so long and the industrials can be so bad because commodity pricing is a win fall for america. the malaise, the rate hike malaise has people. >> we'll get to stop trading in women in a moment. ♪

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it's time for cramer and stop trading. >> a lot of people are puzzling how lowe's can miss the quarter and still be up. the second half is strong. a good road map about why you shouldn't lose faith, and you shouldn't. this is a company that is very

much on its game. they are against the best player in retail but i like the fact they're telling a good story. it shows you don't give up on this market but the distribution out of international stocks into domestic continues and it's painful for everybody who owns great american industrials. >> we forgot to mention, revenues were ahead even though the earnings were a miss. >> it was a good quarter. the headline number is not as important in this case as their detailed analysis about why gross marlg margins are going to go off in the seconds half. if you sell, you're doing it because you believe in the multiple rate hikes. if you believe in that, you should sell. who needs this pain? i mean, just hope for a good season for your football team. we have a company that wasn't that happy with my characterization and wants to say why it's going to be better. and brian sharples.

i've been saying they should become airbnb. home away is an undervalued company. i'm doing my best to close the gap but i just feel like a guy with a tv show. >> but a good one. two good tv shows. we'll see you on one of them tonight. >> when we come back, reaction to target's beat. the retailer a winner on a tough morning for stocks. take a look at some of the dow laggards this morning. back in a moment. i'm caridee. i've had moderate to severe plaque psoriasis most of my life. but that hasn't stopped me from modeling.

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good wednesday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and simon hobbs. david faber is off today. a tough morning for the markets. down 165 with virtually every component in the red. the smallest rise of the year, a lot of discussion about the fed minutes which will come out at 2 p.m. >> a big day. target out with a big beat this

morning. the hi >> fed minutes coming in in a few minutes. saying raising rates would be a mistake. we'll talk to the former president of the cleveland fed about that. >> and a wild session in china weighing on stocks at home. we'll tell you how to invest around that today. >> target is clearly the standout gainer on the s&p 500 this morning. in a market that's otherwise down. down 155 points now on the dow. the big box retailer both beating earnings expectations and lifting its profit outlook for the full year. we have a senior retail analyst. good morning. >> good to be here. >> if it's true they've got their mo joe back on their key categories, wellness and kids, how have they done that and got themselves into this position? >> you know, it's really about focus and execution. it's about that expect more pay

less kind of algorithm. it's getting newness into these categories. they're doing what they stated. taking more risks in these categories, focusing on product innovation and giving the customer what they want at a good price. that's what drove the comp. the comp was exciting us. 2.9, 1.6% traffic. it's the fourth consecutive quarter of comps. target is our top pick here. >> for many retailers, what you've described is the the hol grail. >> the ceo is focussed on what target is famous for, signature categories. they make it up about 30% of the business. and online has contributed 60 basis points to the comp. that's a great focus area for target, and the economy is

working in target's favor. walmart and target have had strong top line. gas is helping the company as well. i would say the bottom line, he's agile, he closed canada and did the deal with cvs on the pharmacy said. we like when he's doing. >> obviously the stock has more than recovered from the data breach two years ago in 2013 but if you take a five-year track, although stocks are more, it still has a cumulative affect of lagging others like costco or dollar general if that's a fair comparison. does that leave it as a coiled spring to shoot substantially higher and make up that lost ground or with a 40% move over the last year, have you had it? >> we still see continued up side to the story, but we love costco as well. i would say costco is getting even better traffic gains than

target an walmart. target and walmart running around plus one or two for traffic. costco 3 to 5%. consumers globally love the value that costco offers and they have a much more expensive valuation at a pe above 20 times. you have a more modest kind of retail growing at target but the opportunity ahead is more come pelgi -- compelling than target. >> what about some of the retail peers? somehow the setup ahead of earnings tomorrow? >> we really think gap has done a good job with expense management, inventory majority. the free flash low yield is 3 to 5%. the focus on gap is the gap division. on a simple level, the jeans haven't been fitting that well,

and they didn't quite get the right styles. old navy is knocking it out of the park. we're watching gap, and this is a name where store checks matter. and that keeps us with our market perform view on gap. >> target is your top pick. 12 weeks from black friday. the retailers have placed their bet. everything is in line for that holiday season. who else do you think might surprise people? where do you think stocks might move as we get the revelation on the stat rategies and how they' working. >> lululemon. we have american eagle, lululemon and target. i think the yoga, at leisure trend continues to have a lot of strength through the holiday. black friday will be a lot of fun. it's very competitive. we're fighting for share amongst these retailers. who's going to win? maybe consumers.

they should get great deals. it should be fun and event driven. >> i'm not sure black friday is everybody's sense of fun, oliver, but we'll leave it there. thank you. >> oliver chen joining us now. and as a retail analyst, it would be fun for you. >> only 13 weeks until black friday? wow. when we come back, the dow is down 132. wild session in china weighing things here. will there be any clues about an interest rate hike in we'll discuss when "squawk on the street" comes back. you focus on making great burgers, or building the best houses in town. or becoming the next highly-unlikely dotcom superstar. and us, we'll be right there with you, helping with the questions you need answered to get your brand new business started. we're legalzoom and we've already partnered with over a million new business owners to do just that. check us out today to see how you can become one of them.

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today's inflation report feeding into the debate over whether the fed will raise interest rates in september. the minutes will be released today at 2:00 p.m. eastern. what clues should you be watching out for? our senior economics reporter joins us with the latest in fact minutes aren't always that exciting but today's are. >> they're always exciting to me. if someone is writing the data as a script to a series, they're doing a good job of keeping us watching. the july inflation report doesn't do enough to seal the deal either way on whether the fed should hike or not in september. here are some of the commentary we're getting. far economics saying the fed is hardly in a position to say it's

on track to hit 2 % soon and then there's the matter of weak and falling global oil prices. but over at barclays, they're saying ongoing increases in cpi inflation should give members of the fomc confidence that things are positive. that's wall street. the same thing is happening at the fed. monetary policy itself poses the biggest danger in the u.s. economy. he argues for the fed to ease further and says they're in danger of locking in a lower inflation rate. meanwhile, others arguing for a rate hike. now, here's the data everyone is arguing about today. cpi standing, just about pat, coming in a little bit lighter than expected. july up. the year on year up 1.8%. real earnings coming up 2 .2% year on year. the chance for lower oil prices

and a strengthening dollar to move the inflation data the other day, that is down, has been on the mind of some fed officials. here's the split that's out there. the trouble they're dealing with. green line goods or commodity inflation going down. it is negative. blue line on top. that services inflation. pretty stable at around 2% or 2.5%. there's the red line. that's the core cpi number. all these numbers are core numbers. with the minutes of the july meeting at 2, watch for how much concern there is over china, over what constitutes some further improvement in the labor market and for how much confidence they have that inflation was added in the right direction. so, guys, if fed watch was a series, it's like law and order suv, we get two installments today. >> all right. good one. thank you. steve liesman. we'll talk more about the fed and today's market action. jim paulson is with us, and

scott brown. scott, i don't think the fed had this picture in mind with some brutal moves in emerging markets and stock. for the first interest rate hike after the recession, does that mean that they'll hold off in september? >> i think there's a good chance that they'll hold off. it doesn't matter too much whether they move in september or december or even early in 2016. but they are set to move at some point. when you look at the job market, we were seeing pretty good improvement. we're not quite there. there's plenty of signs of slack. at the current pace of improvement, we're close to normal late 2016, 2017. so the fed really kind of wants to move to a less accommodative position. there's plenty of time to do that. in the short term, it's the inflation figures that we're likely to see the concern. >> yeah. they're not seeing inflation.

>> in emerging economies. even today's numbers, they're not worried about current inflation. they're worried about future inflation, and there it's the commodity price pressures that are down. you're not really seeing much pressure in the labor market in terms of wages. >> very little inflation pressures. as an equity guy, is it a scary prospect to raise interest rates while global growth is slowing? >> i think you're never going to have an ideal world where everything lines up and every robert sa report says the fed should tighten. we're starting this process, i think from a very undervalued interest rate structure relative to the economy, and we're probably growing at least 2.5%. i know we have a contraction going on in the oil industry but outside of that, the job market is really strong. we're growing jobs 2 % and twice as fast as the labor force.

housing is strong. auto sales are near record highs. the service sector, ism just popped up to 60. i think it's not overly frightening to have the fed move away from massive accommodation. i think the market will struggle but i don't think it's a death blow. >> you've been -- just to recap your position. you've been bullish over the last few years during this bull market but lately have been warning of caution, warning of a correction in a path higher for stocks. is that where you still are and if so, where should we be buying on these dips? >> yes, i am. i think, you know, my guess would be we might still have a correction in the stock market yet over the next year. maybe we go a little higher first. i don't know. so i'd be what defensive a little bit in my approach here. i don't think the bull is over, but it might be on pause. i would part of it i'd go to parts of the world outside of

the united states who doesn't face the need to raise rates. they're pushing up rather than pushing down now in a policy perspective, and they've been beat up relative to the u.s. they're better values. >> whoa, hang on. let me pick you up on that. because that cuts to the heart of a lot of what's going on in emerging markets. because of the fed, a lot of companies have ballooned up on debt. they've ballooned up on dollar dem denominated debt. their own currencies are falling away in which they have to service those debts. the risk of some sort of credit event here, jim, precisely because of that is growing by the day. >> i would say, simon, that one of the most widely-accepted market themes right now that everyone is playing is the dollar is going to keep going higher. that, to me, creates a huge risk if it doesn't go higher.

and i would invest against that trend and stay away from that risk. it's kind of like the yen forward carrot trade where everyone is in it. if it doesn't work, i would go away from that tend by investing some offshore. >> but your fundamental reason is that the dollar is strong because other economies weakened off during the course of the last year and they'll come back with strength, and that's not the debate we're having. the debate is about slowness in the rest of the world getting slower. >> well, the thing that drives currencies in my view is the growth gap between the u.s. and the rest of the world. that has certainly widened in the last year. but look at the last year. china is pushing up. europe is pushing up and we're going to other way. i think the growth gap will close. they might still grow slowly overseas. but the relative gap will close which could bring a bid to the foreign currencies and a sell to the dollar. their growth prospects look

better today than they did a year ago when you had a lot of policy officials tightening. >> a lot of people on wall street listen to jeffrey gun locke and he warned yesterday in an interview that the fed should not raise rates, especially with junk bonds trading at four-year lows. >> well, we've seen a lot of concern i think from the fed, and certainly bond market participants about issues with liquidity. you're seeing a series in the new york fed which suggests that it may not be too great a problem but the fed has to do what it's got to do. it's not really hitting the brakes here so much as just beginning to take the foot off the gas pedal. monetary policy is accommodative even after the first few rate hikes. there's really, you know, nothing i think for the stock market to fear.

but domestically, the economy appears to be in great shape. it's the rest of the world. those worries are likely to batter the market, very similar to the asian financial crisis in 1997. eventually that's going to punish u.s. stocks to some extent. it's going to hurt u.s. exporters but the domestic economy is going to do well the second half of this year and in 2016. you may want to focus on stocks that are geared domestically. eventually the international will recover but it may take some time. >> all right. we'll see what happens at 2:00 p.m. thank you both. >> when we come back, ernie els fresh off the pga championship is going to join us live after the break. dow is down 147.

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this follows a 75% decline in the stock. it's the declining at meetings is a permanent trend but perhaps value on the drop. recently those shares up big today. >> thank you very much. with more than 70 professional career victories and sponsors that include boeing, our next guest is one of the premier names in golf and this morning he added another award to his collection. he's been named the 2015 recipient of the payne stuart award. ernie els. good to have you back. good morning. >> how are you, sir? good to be with you? >> congratulations on this award. anybody who has followed your career, this does not come as a surprise. your involvement in philanthr y philanthropy, what you've done for autism and for your son over time is amazing. can you talk about what it means to win this?

>> well, thank you. yeah. i mean, um, you know, i have to thank the southern company. i knew payne stuart, obviously, back in the 90s we played a lot of golf together. he was a great champion. he gave a lot back to his community down in orlando and around the country, for that matter, so, you know, obviously payne is not with us anymore. and the southern company started the payne stewart award in 1999, and the who is who of golf, received this award. so to be on that list is quite something for myself and my family. you said autism, yeah. we just opened a school down in florida on monday which was really exciting. you know, 150 kids are going to a new school as we speak here this morning. so that was great. but my wife, really, got to get a lot of credit there. she really pushed this project

along, and with her team, you know, my kid and a lot of other kids have got a new school they can go to. pretty exciting stuff. >> amazing. a 26-acre campus for autistic kids which you've been working on for years. congratulations on that. as far as the game goes, you had a pretty good showing at the pga. i'd love to know your thoughts on how you're feeling but also this talk about golf as a dying sport some argue. the number of courses that are closing, the gimmicks they're coming up with to try to keep young people interested. how does it make you feel about the long-term future of the sport? >> you know, i'm excited again. i know that especially over in asia, we are in the golf design business, and we could see that the climb in golf courses

getting both, especially in the u.s. and europe. it's been going through a distressed time at recent times. a lot of golf courses closing. obviously, i would say there was probably too many golf courses for that matter. and in today's day and age, people don't have all that time anymore to go out and spend six or seven hours away from home. i'm sure you guys play a bit of golf and the wife at home, she doesn't want to sit with the kids for eight hours or stuff like that. you know? >> it is very long. >> it's like you're living in my house. >> i do think -- >> well, no. i'm also living and breathing there. >> ernie, i think what's been exciting has been the young generation of golfers that have come and done well. i wanted to ask who you think rory mcilroy or who has a chance at catching jack at the top of

the majors? >> you know what? i was just going to get there. we're in such a great stage again of golf. you know, it feels like us older guys are getting to the end of our rope a little bit, but we've got such a great talented group. rickie fowler has grabbed the imagination of people around the world. jordan with his demeanor. and rory, he's only 25 or 26 years old. we've got such a great, young group of players. it's so excited, and they're winning and becoming household names now. so i feel, you know, between jordan, rory, ricky, bruce koepka. there's so many. i'm going to forget a lot of names here. there's a lot of guys that are going to win golf tournaments. we're in exciting times again, and tiger has won 14, and who knows how many jordan or rory can win or any of these

youngsters. >> it's good to see the sport evolve and new athletes come to the front. ernie, congratulations again. we'll see you next time. >> all right, guys. >> straight ahead on the program, fed minutes due out in a few hours. investors searching for clues about that september rate hike. the former president of the cleveland fed will weigh in, next.

good morning, everyone. here is your cnbc news update at this hour. jared fogle is expected to plead guilty to engaging in six acts with minors and receiving child pornography. he will pay $1.4 million to minor victims. he will also register as a sex offender. his prison sentence will be between 5 and 12.5 years. a ju general election poll from cnn shows donald trump six points behind hillary clinton. in july he trailed by 16 points. clinton is also six points ahead of scott walker and nine points ahead of jeb bush. ten points ahead of carly fiorina. >> wildfires have destroyed some 75 buildings and threatening

more. and police have released a sketch of the man that they believe is the bangkok bomber. they're offering a reward for information that leads to his arrest. they also believe he wasn't working alone. let's go to jackie for the oil inventory report now. >> good morning. thank you for that, sue. yes, we are looking for the eia weekly status record. a build in crude. we're down $0.88 at this point. what i said earlier this morning is when you look at the api number, a draw last night. if we get a draw in line, you're not going to get a move. if you get a report the opposite, you'll see action in oil. cushion inventory saw a slight build but traders are looking to

their numbers as well. gasoline, 2 .7 million barrel draw. we're still seeing summer driving demand but expecting that to drop off. even though there are refinery disturbanc disturbances, some are coming online. like one in kentucky. we're seeing an evening out. these crude prices continue to move move lower. back to you. >> all right. thank you very much. are consumers bailing on the new apple music service? it depends who you ask. according to music researcher music watch, 48% of trial users have dropped out. apple says only 21% from on theed -- have on theed out since the service debuted. users will have to start paying in october. september 30th is the first test to see how many pay. obviously every new product launch is going to be under

scrutiny in the post steve jobs era of apple. >> to lose a quarter of the people before they actually have to start paying is quite a long. in fairness to apple, if you don't think it's going to move the needle on the up side, it shouldn't move it down either. it's part of eco system. i had a push advertisement from apple today for full apple music on my iphone. they've done it in the past. >> did it work in did you sign up? >> i will but not until we've done the show. >> also will be interesting to see how many spotify users switch over. they're dominant. >> the other big story. a few hours before the fed minutes are released. we're looking for any hints about the timing of an interest rate hike. what should investors expect next month and this afternoon. joining us is lee hoskins. thanks for calling in. >> thank you. >> so what co-do you expect fro

the federal reserve in september and do you agree with it? >> i expect the fed to move as do most economists. the problem with current fed policy and the way it is communicated to the public and to economists and the markets is that it all depends. that is what janet yellen says. it depends on data that comes in. it basically makes guess work out of what the fed is going to do in this short term. and that is a problem. the fed needs a rule-based policy, and we wouldn't be sitting here talking today about the language that's likely to come out in the minutes. so i think they'll probably move. i think they certainly should move towards normal interest rate relationships with the economy. >> i'm sort of surprised to hear you say it. you were president of the cleveland fed 1987 to '91. it was a different time but you were a strong advocate for zero

inflation. today we got word that consumer prices are raising at 0.1% in the month of july. what is the risk of the fed moving too soon when it comes to inflation? >> well, there's always risk in making policy, but what you want to focus on is the longer term, and i think the longer term inflation projection at the fed that yellen came up with is appropriate. that is, they're looking at something moving toward 2%. the focus on one month or even six months data is a problem because you can have a lot of variations in activities in the economy that cause distortions. what you want to look at over time is the projected inflation rate, not what it's been in the last six months or so. so i think the fed ought to normalize interest rates with respect to the economy as soon as they can.

that does not mean that if they move one time at 25 basis points that they're committed to a path that rises sharply. it's just to get the fed out there in the market with one rate increase and then they can analyze the data, but coming in with data every month and then having an event in china or someplace else determines that policy. it seems to me to be a mistake. >> you'll be aware that a member of the fomc, i believe not a voting member has decided to write an on ed where he argues against you. he says inflation may come back to 2% but maybe two years down the line. i'm fascinated as to how these things work. why would this man write this article today? is it because he's seeking to change the views of the other members of the fomc? or is it that he wants to change

the perception of where the fed may be going? in other words, that they've overplayed their hand in public of a near term rate raise? >> i think it's partly both. i think the majority of the reason he did it is to try to influence other members of the committee, and probably 30 or 40% to influence the markets. and i think that his arguments are weak. i would not accept those as a good policy arguments. the problem with the fed and forecasting and in general in forecasting, the errors are so large in terms of gdp one year out, and the error is large enough that if your forecast is for 2% one year out, you have an equal chance of getting 0% or 4%. now, that's no way to make policy.

you need a rules based approach. >> we are where we are, though. one quick question. w everybody assumes it's a quarter point, 25 basis points. why don't they go for an eighth? just 20 basis points rise to say to the market, look, we've moved but it's too little to affect the economy? >> i'm not sure 25 basis points would affect the economy. >> but you get the point, the broader point. >> yes. there's nothing wrong with easing in and getting the first one behind you. then you can analyze the data the way the current fed policy makers do, which i've already stated, i think is a mistake, but then you could decide month by month whether you should do another increase or not, and the markets would then decide that it's the path of the increase that becomes important. not the one rate move. >> but you could argue that just one move is a signal that now we

are in tightening mode no matter when the next move comes and that is correct adjust all sorts of market rates. it could adjust consumer loan rate, auto loan rates and have an impact on the economy, just the signal that the fed sends. it's a big mystery. >> that's true, but the point is, nobody that's ever been in policy making will ever find a good time to raise interest rates. if we don't do it now -- >> but now seems like a very bad time. what is the signal you're getting from commodity markets and emerging markets from china right now? it does seem to be an uncertain time globally. >> that's true. but there's always going to be -- there's always going to be some event that occurs that allows policy makers to not have to do the hard thing. and that is to raise interest rates. that's been true through every business cycle i can remember in the last half century. it's hard to raise rates. it's easy to lower rates. >> we'll see what happens.

thanks for the valuable perspective. lee hoskins on the phone. the former cleveland federal reserve president. >> okay. up next on the show. in some parts of canada, a barrel of oil costs about the same as a case of beer. are there any signs of relief? depends on if you're a motorist or a beer drinker, obviously. no student's ever done the full hand raise in ap calc. but your stellar notebook gives you the gumption to reach for the sky. that's that new gear feeling. this week, these office depot brand notebooks just one cent. office depot officemax. gear up for school. gear up for great. go to ziprecruiter.com and post your job to over one hundred of the web's leading job boards with a single click. then simply select the best candidates from one easy to review list. and now you can use zip recruiter for free.

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if it keeps getting more difficult for china, there are two u.s. stocks that you may want to avoid. we'll let you know what they are on trading nation. check out the live version at the 2:00 eastern time version. more "squawk on the street" coming up.

is canada on the verge of recession. pressure on the canadian dollar pushing to the lowest level against the u.s. dollar in more than a decade. it's hurting. we are in vancouver with more ahead of an important election. >> that's right. and it feels like to many people

here we are on the verge of a recession. that is because canada's economy is hugely resource dependent. the commodity's collapse is being a big toll. we are on the verge and the bank of canada has cut rates twice. what does that mean for network in canadian consumers are scaling back on purchases and trips abroad. have a listen. >> the economy is affecting our lives too. the things are getting expensive now, before the dollar price is down. if you're going to the u.s., you have to spend more money over there too. >> i'm hesitant to do any big purchases. if there was a trip to the united states, things like that are on hold for you. >> the drop in the canadian dollar is making travel a lot more expensive, purchasing items, even items that are in canadian prices, you see them being inflated to match the

difference of the american prices. >> now, aside from limiting shopping trips or glamorous trips south, it should be a good thing for canada's manufacturing sector. it is not that straightforward. analysts say the industrial structure could limit a manufacturing rebound. add to this, the price of canadian benchmark oil. it is trading at the biggest discount to u.s. benchmark oil in over a year. that is hurting the economy too. you mentioned it before the break. i can confirm that, yes, a case of beer, a 24-pack of beer is more expensive than a barrel of oil. that's about $10 more than a barrel of oil. pretty shocking. last year it would have taking to 24-packs to buy a barrel of

oil. >> it's a tough kmochoice. thank you from canada. let's go to rick santelli for the santelli exchange. hi, rick. >> reporter: hi. i'd like to welcome my guest this wednesday morning. roman, thank you for taking the time this morning. >> thanks for having me, rick. >> reporter: roman, you write some fascinating articles. the last one i read basically equated, basically made synonymous the term ant anti-austerity with anti-market. give me some examples. >> for the past seven years ever since the financial crisis started, really, the global economy and particularly the developed economies have been managed by governments, regulators and central banks. they have used the crisis as a discretionary mandate to tamper with free market practices and specifically with the laws of

supply and demand. and the debate around austerity, which has gotten harsher and harsher in the past few months, especially with the latest episode of the greek crisis, is really not about austerity in my view. the anti-austerity camp argues that austerity can hurt growth in the short term but everybody knows that. if it didn't, it would be called stimulus, and that's the opposite. it doesn't help the economy no more than going into rehab helps an addict feel good. it makes us more prepared for future challenges. >> let me interrupt you. i happen to agree with you. no so viewers, i agree. i thought the notion of quicking austerity made no sense. a middle class family in america, if the breadwinner loses his job and they have bills coming in, you have to cut

back. i'm sorry. that's prudent, and in the near term, it hurts. let's switch gears a minute. let's go in another direction. let's try to tie this in as you have. the 12th and current president of the federal reserve bank of minneapolis wrote an on sed, raising rates now would be a mistake. recall of a sudden we see the calibration of everything has changed and recalibrating is different, but should they do it, in your opinion, and what are the issues? >> i'm not sure they will, but i think they should. because, first of all, they have many ways of making sure that neither the markets for the consumer overreacts to a potential hike. they have many ways of showing a path that will not be too scary to anyone. and secondly, i think it's a good thing for the fed to signal that the economy is finally on its way back to normalcy.

and what the coming back to austerity, what anti-austerity people want is for these unconventional policies that we've seen in the past 7 years to actually become conventional. to become permanent, and -- i agree. the smell of natural gas is in the room. roman, i am out of time. i'm going to bring you back and talk about some of your other pieces, maybe especially about europe and china. thank you for taking the time today. >> thanks a lot. bye bye. >> reporter: back to you. >> there's no good time to raise ra rates. up next, tom brady could have strings attached. nfl super agent weighs in after the break. can a business have a mind? a subconscious.

a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive?

. some developing deflategate news, according to espn, tom brady is willing to accept a reduced suspension, but only to cooperate with the nfl, not to make an admission to the wells

report. talks remain at a standstill. talks remain in federal court where the judge said he will hold a third hearing on august 31st, calling on brady and nfl commissioner roger goodell to attend. joining us is nfl agent drew rosenhaus, the ceo of rosenhaus. the discussion has continued about whether or not it's the numb of games or the acknowledgement that you might have known some wrongdoing. does this mean brady is intent on saying i never knew a thing? >> well, it really sounds like brady is trying to, trying his best to work out a deal and even willing to take a suspension for failing to cooperate. say with the phone for example. but not acknowledging or admitting that he had anything to do with the footballs, i can understand that. tom brady is going to be in the hall of fame, he's going to go down as one of the greatest

quarterbacks in the history of the nfl. i can understand why he would want to protect his reputation and his legacy. as not being a cheater. not necessarily cooperating with an investigation, in my opinion wouldn't have a long-lasting effect on brady as opposed to him admitting for example if he was cheating. i don't think brady is going to do that. even if it means, missing four games. if i'm the nfl, i get a deal worked out. this is really bad for the national football league that we're in the preseason already and we're still talking about deflategate. we need to be talking about the nfl year. we need to talk about the games this season. >> it's funny you mentioned that. john mara was asked about this the other day. he said i just want it to be over because we are getting into the thick of it here. how much of this do you think is going to affect anything. fan engagement, ratings, if in fact the debate, or the fight and any would-be appeal goes

into the regular season. >> look, i personally don't think it will affect ratings' or fans' excitement. i think everyone is tired of the story and wants it to go away at this point. i think at the end of the day, the nfl, tom braidy, the nfl p.a. are doing the right thing by getting together and working on a settlement. it sounds to me like a settlement is going to get worked out. i don't have any inside information on that they're putting so much time into this and it makes too much sense for everyone involved to work out some type of an agreement. if i'm the nfl and brady is willing to take some suspension, work on that. jump on that, move on, let's get into the 2015 season and say good-bye to 2014 and all its controversies. >> it would be weird, wouldn't it, drew, for them to, even if brady won in the beginning if the league were to work on an

appeal. brady ostensibly could be looking at a suspension in the back half of the season. that would not be good. >> i think the worst thing that could happen in the nfl is if there is not a settlement and the judge throws this out. this would really hurt roger goodell, and his credibility and the entire process. i don't think the league can afford to take that chance. if brady is willing to accept some culpability, some responsibility and get discipline with even a limited suspension, if not four games, wow, if i'm the nfl that makes sense to jump on that otherwise they're rolling the dice and it could back-fire big-time. at the end of the day, work out a deal, move on, put this behind them. don't take a chance on a humiliating defeat. if judge berman throws this suspension out, which i think is a real possibility.

>> we'll see ha happens on the 31st, since it's not going to be settled today. ahead on the network 9 to 5 mac here at td ameritrade, they're always working. yup, we're constantly making thinkorswim better. like a custom screener on your desktop, that updates to all your devices. and you can share it with one click. wow. how do you find the time to do all this? easy. we combined every birthday and holiday into one celebration. (different holidays being shouted) back to work, guys! i love this times of year. for all the confidence you need. td ameritrade. you got this.

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. it's 8:00 a.m. at google headquarters in mountain view, california, and 11:00 a.m. on wall street and "squawk alley" is live. ♪ ♪ ♪ ♪ welcome to "squawk alley," joining us is jon fortt, kayla tausche has made her way back from a couple of days off. good to have you back on a busy day. the dow down almost 200 points, every component is in the red. the lowest close here would be since january 30th. s&p back below the 200-day moving