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tv   Squawk on the Street  CNBC  April 3, 2012 9:00am-12:00pm EDT

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barry sternlicht. >> isn't this a beautiful ride? i'm going home in this thing, too. it's to scale. >> you go home in that every day. >> i do. make sure you join us tomorrow. "squawk on the street" begins right now. the kentucky fight song starts us off. congratulations to the university of kentucky wildcats, winners of the ncaa men's basketball championship last night. what a game. anthony davis, absolutely incredible. good morning. welcome to "squawk on the street." i'm carl quintanilla live with melissa lee, jim cramer and david faber. nice start to the second quarter after a monster first quarter. some concerns in europe, though, a lot of data coming out, ppi easing a bit, inflation easing. spanish yields ticking up the ten-year there at 5.4%.
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gene munster, the most influential analyst on apple ups his price target and builds a case for $1,000 a share by the year 2014. we'll talk to him live at 10:00 a.m. >> groupon's troubles worsen as "the journal" says the s.e.c. is looking into the numbers. >> another setback for james murdoch. he steps down as chairman of bskyb. is news corp getting closer to closing a chapt her. and ed lazear says this may be the first recession that doesn't rebound to long-term average growth. pg&e raised its price target on apple to $910. it will be the first market cap company.
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gene munster will be joining us at the top of the 10 a.m. hour. it looks like apple is set to hope at a fresh record high. yesterday we were mocking the wall street firm that came out with the $1,001 price target. one of the most influential analysts on the street making this call and perhaps legitimizing it, so to speak. >> last night in a fit of worry because a trusted source came to me and said, apple's not going to make the quarter, during halftime of that great game, i'm making calls to my best apple guys. it is a great quarter as i just hear over and over again. that the 4s is selling fantastic, that the tablet is selling fancitastifantastically. hast week, i had to have a
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potholder to old the tablet. don't back away. the story's great. >> here's the report. munster's case is not built on the coming quarter or even the quarter after that. 12 multiple on his calendar year '15. gets you to $960. and apple television, things we don't know anything about, gets you to $1,000. >> which is only 5% of expected eps. when you assume a 12 multiple from a well-respected analyst, it doesn't sound crazy or outrageous. it's not like those price targets an qualcomm or -- i'm forgetting some of the other ones. qualcomm has had great success. many others whose names are escaping me right now -- >> e-toys. >> it's very, very different. making assumptions about growth
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rates that were unconceivable in many ways. in this case, it's almost conservative -- there are still questions as to whether they're going to hit some sort of stumble along the way, whether there will be something that changes this trajectory, but it's not that hard to see. >> munster asks the question, what does that $400 billion in market cap come from in 2014? he says half is going to come from tech investment, investors buying into apple. we've talked about how hedge funds are largely underinvested. the other half -- this i find more interesting and worrisome for the rest of technology, the other half comes from market share loss from competitors. >> yes, i think that's what we've got to really focus on. >> this is a story about taking share, not just from blackberry. android, taking the enterprise, having it work very well at the enterprise with the cloud. i had red hat on last night.
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i'm going to play with -- it may be anecdotal but if you play games -- and i find these to be the rage. i'm talking zynga and omg pop. i'm talking about the phenomena that is scrabble with friends and words with friends, you have to get the 4. you can't play -- i know that sounds like, wait a second. that's small. but anybody who has kids knows this is what -- >> kids? fess up to the fact that you play draw something. >> at 4:15 this morning, i'm playing words with friends with my daughter who hasn't gone to sleep yet and i'm getting up. this is the way we talk. >> i was playing words with friends in my dreams. that's what i'm always doing at 4:15. and if i'm not, i'm very upset about it. >> you mentioned qualcomm,
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boosting their quarterly dividend. >> that's huge! this is what's happening. we come in every morning and we're surprised about good things. as long as we are, this market has potential. >> before we move on, this idea, though, of a zero sum game and that apple's game and whether or not mr. munster is correct and we get another $400 billion in additional market value, will it come from nokia, will it come from dell and on and on? all of its competitors. do you believe that? >> i think the market's saying yes to that. i think nokia is in permanent decline -- >> we've seen it already in apple's climb to where we are now. >> yes. research in motion, is it a player? 77 million subscribers. could they go away? yeah. they could go away. absolutely.
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>> meanwhile, another big story this morning, the s.e.c. reportedly examining groupon's revision of its first set of financial results as a public company. "the journal" says the probe into the online coupon company is at a preliminary stage. last friday, groupon says it revised its numbers after enough money was failed to be set aside for customer refunds. they have not decided whether to launch a formal investigation. but they've closed ranks around jason child and continues to have the support of andrew mason and other, despite a big embarrassment on friday night. >> the stock falling yesterday to its lowest since its ipo, except for one other day. but you get the point. terrible day yesterday for the stock based on all of this news. >> how about we come back to the fundamentals? what is this company really doing and is its model really work or is it the webvan of our generation?
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this morning, colon hydrotherapy in the bronx, 61% off. >> what is that? >> i don't know what it is. but i ain't going for it. my point here is to dramatize a point. the notion that maybe this is not a good business. maybe this was a fun business and now everybody got in, i get a coupon, where is that place in the bronx and it's the daily deal, of course. i don't know if you can get away. properly functioning digestive organs play an important part in the body. >> keep internal machinery running smoothly. >> i get these every morning. and i think, are you kidding? is that really a business? >> to the bigger point, there was a notable downgrade of groupon yesterday.
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but wall street analysts want to look the other way and say, long term, i believe in this business. very few companies out there that there would be reports the s.e.c. is launching a formal investigation into accounting practices where wall street wouldn't say, go the other way. time and time again, we've heard this. it's never been a good time to get into the stock. >> you're so right. i was sickened by that. i thought someone was going to say, you know what, i've watched the way this thing has evolved. it's clear we don't have a handle on the financials. we're going to suspend coverage. this would have been a suspend coverage situation if they had any rigor. they should suspend, not defame. >> not to mention lawsuits from every law firm -- and it's going to be a nuisance. but they're there. and you have to defend -- you could potentially get subpoenaed and discovery and everything else -- >> is it time to buy groupon? this reminds me of 2000.
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sit time to buy webvan? this might be our webvan. it may be. >> that's an indictment of the company. >> well, indictment is a formal term. i'm fired up about this because i feel like the people are saying, this could be a big opportunity. and i continue to wonder whether the whole model is anything, the whole coupon model and everyone -- it was very exciting. they had that really interesting day where a lot of people went to gap off of it. it's been living off that day. i'm sure there are some merchants who could come on and say, this has helped my business. >> in their defense, it's not easy to build a $10 billion company on a model that only sells colon hydrotherapy, right? they got somewhere on something. >> true. but i think we could recreate this company with a $1 billion market cap. >> they have expanded around the world, perhaps to their detriment.
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they also face incredible competition in many local markets. they argue, though, that they still benefit on the scale that those smaller players don't have. a lot of this debate took place before the ipo. it's not foreign to those who wondered about the business model back then. the only thing it's done this recent revelations is continue to concern people about those very concerns. >> in sorkin's piece this morning, our own sorkin, talked about the s.e.c. and what it would mean to have this fast track. this would have all come out either way. >> i think so. let's talk about james murdoch, reportedly stepping down as chairman of british sky broadcasting. the resignation will be confirmed later today after a board meeting. murdoch has been facing major criticism as a result of the phone hacking scandal that brought down "news of the world."
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is this incremental? >> i wonder how much they're trying to distance themselves from james murdoch and what does it mean for the continuing investigation of the hacking scandal in the uk? do you do this prior to any potential concern you have that he's going to be implicated in some way? that's all speculation. at this point, all we have to go on is that news out of the uk, by sky news reporting it. they own 39% of bskyb, does news corp. they hoped to buy the other 61%. they had to abandon the bskyb deal, much to the chagrin of many investors who were in there, because of this hacking scandal. that's probably still the most lasting effect of the scandal. interesting story. james murdoch for many years expected to be the successor to his father, the 80-year-old rupert. and one has to question that at
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this point given he stepped down from the newspaper company and now as chairman of bskyb. what's left? >> a stock is a discounting mechanism. back when the hearings happened in the uk over the summer, remember the plate of foam that was tossed at rupert that his wife stepped in and value i can't wantly defended him? it's the phone plate bottom on the stock. >> that's a really good point. are you going abraham/isaac thing? >> what do you mean? >> you know, father and son. >> i thought you were talking about a guy named abraham isaac. >> old testament, do a little shakespeare. >> colon hydrotherapy and the bible -- >> can we all go together. >> to colon hydrotherapy? that's not a group activity.
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>> it's not? >> coming in today i didn't expect to hear those words once, let alone 20 times. >> you have to understand that groupon -- are we really -- this thing comes to me. they push this to me. i get it. i'm trying to have a serious discussion -- >> you wonder why refunds are higher than they accounted for. >> i need to go for that colon hydrotherapy. >> and keeping machinery running smoothly, it's very important. >> speaking of which, the economy -- >> you can say it with the best of them. >> ed lazear taking aim at president obama in an op ed. he served under president george w. bush says growth is weak compared with past postrecession rebound. he writes, unless we move to a set of economic policies that are aimed at growing the economy
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rather than promoting social agendas, this may be the first recovery, quote, unquote, in history that fails to see us return to long-term average growth. we like lazear a lot. made his name working in labor statistics and labor markets. it's a tough op ed. >> i go over the piece. it's very clear. he makes some good points. regulation burden. they've wanted to regulate the economy. they felt that president bush deregulatored to it the point that we were in a lasa fair economy. government spending, i don't want to fall back on, sit just a romney elect piece? >> sure. do you think the threat of whatever may or may not happen to taxes at year end is an anchor around the market seals? >> stock market or economy? >> stock market.
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>> the stock market is up 60%. since the president took office, he claims no credit because i think the swing voters don't own stocks. >> you see hesitancy by corporate america as we head toward the election itself, wondering which way it will go. i hear that, that it will become more of a factor, that dreaded uncertainty that we hope to all get by but still hear all too often. >> oil and gas, if you really are believing that the next step could be getting rid of these big tax breaks for oil and gas, you might just say, this is an interesting i'm worried about. >> do they need tax breaks, oil and gas? >> it's controversial. maybe they wouldn't be wildcatting as much as they are, although the president is saying, listen, they're making so much money. it's obviously an issue. everyone pays money at the pump. they figure someone's making a lot of money. it's political. i do think that when i heard the earlier discussion on "squawk
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box," they were talking about opening anwar. that's a pure political kennard. i took a helicopter once to prudo bay. just to check it out. deer were roaming there. it was pretty good. they're drilling and -- where am i going with this? >> i'm thinking of palin on the "today" show this morning and drill, baby, drill. >> we don't have enough oil on this continent. we have natural gas in the country. we are a natural gas-based company. we are not an oil-based country. we used a lot of the oil. except for the bakken, it's a
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natural gas economy. >> for the saudi arabian natural gas, it's a matter of national security, not just energy policy. >> totally agree. >> use, baby, use. >> use, baby, use. they find some federal land they want to drill on, no, we have a lot of private land. that's another republican canard, frankly. we've got lots of land to drill on. what we're finding is natural gas. unless you compress it and ship to it japan, it ain't being used. 63% of our power plants are already using it. unless bpa goes renegade, we're not going to be using nat gas. >> we could be going in that direction. when we come back this morning, as americans are feeling pain at the pump, when will the u.s. achieve energy independence? one wall street firm out with a projection. it might surprise you. stick around for the answer. taking one more look at futures, down about 24. interesting tuesday setting up here. a lot more "squawk on the street" in just a moment.
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♪ fee frenzy in the skies. this story will get your blood boiling.
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passengers will be charged 35 bucks for stowing things in overhead bins. that brings us to today's "squawk on the tweet." in an ideal world, what would you fine the airlines for if you could? tweet us. we've got your responses throughout the morning. this is just outrageous. >> nickel and diming that's going on. some people may prefer to pay for every little thing. but when you come on an airline, and you have to pay for the tv and for the -- >> it's punitive. where's the train when you need it? >> yeah. >> it would be one thing if you saw fares come down in reaction to more fees. the exact opposite is happening. i'd charge them for turbulence. every two feet of turbulence, you pay me. there's a stock on cramer's mind worthy of your attention. we'll tell you all about it.
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meantime, happy 51st birthday to eddie murphy star of films including "beverly hills cop." there's a look at futures. what the world wants to know and share is here. demand media expands on the big board.
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♪ bskyb has confirmed that james murdoch has in fact stepped down as chairman. remember, we had report this had before.
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but it is official right now. the stock is not much reaction here. but we have a lot of other stocks. time for cramer's mad dash. we have to start off with netflix. barclays downgrading the stock. >> this is one of the great battleground stocks. i don't like to play in battlegrounds. why? because we are like this. we did come down where they raised the money. they bought stock, sell stocks. my big problem with netflix is that the options are so bountiful now. i don't even think of netflix. i just mail my disk in. call me old fashioned. but i do go to amazon now for my shows. they're not getting the binge viewing that everyone's talking about. i'm not wrapping them up. amazon! >> the price target on this one
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is $115 right now. >> the opening bell being rung this morning by our own art cashin. we'll explain why. coming up, a cnbc legend will be ringing the opening bell. >> i've been here for nearly 50 years. >> art cashin will get this day under way when "squawk on the street" returns.
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take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. ♪ the opening bell just rang. it was really good, trust me. take a look at the s&p 500 at the top of your screen. at the big board here, ubs celebrating the anniversary of payne weber. art cashin joined payne in 1980. major league baseball and the mlb network opening baseball's
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opening week. >> mlb is a great site. i had bob bowman on to demonstrate it once. if you like baseball, that is the site. >> great piece in "the journal" today about steinbrenner and the way he approached spring training in that he wanted to beat the mets most specifically at spring training, down south. he just wanted to win. >> i'm not a yankee fan because i'm from philadelphia. but steeped in it here. that was a great piece. he was a great man. >> good luck to the phillies. my wife is from philly. >> yes, i know. ibm hitting a fresh record high. $205.75 on ibm. jpmorgan raises estimates citing software and services specifically. nice run on this one with a nice dividend yield. >> accenture did better than expected.
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ibm, there is a tremendous built-up information technology spend worldwide. >> apple hitting a record high given the action in the premarket session, right now at the fresh record of $629.54. looks like it's going to crack $630 potentially today this after piper $1,000 price target by 2014. >> tell me definitively there's an issue here -- we had foxconn issue. wrz th where has that story gone? >> when you get lofty expectations like this, you want to look for the potential hole in the story. the potential hole in the story could be that margins are very fat and very padded -- >> the counterpoint is that it's not a lofty thesis. 12 times earnings is not a pie in the sky valuation. >> i think what hurts people at
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home is the $600 price. we have a $60 stock, could it go to $100? it's not wild and it's not crazy. could coca-cola go to $100? yeah. but if you multiply by ten in coke and you've got a $700 stock, no one would think it would go to $100. >> did you cover the coke downgrade at the wall this morning? >> no. >> stifel take coke off the select list, putting bud in its place. shares hit their 12-month price target of $73. >> i find so often these analysts whether it be for ibm or typical -- we've got philip morris, credit suisse downgrades it on valuation. but ups its target price.
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what that says is, guys, i was not as enthusiastic as i should have been. the stock just blew through where i wanted it and now i'm going to take it off the list. it's very hard to get back on the horse. >> i want to ask you, last night your point on europe was that europe is not driving. you put it in a car metaphor. they're not behind the wheel. but spanish yields are ticking up. they have been ticking up every few days. more dournlging data, the ppi getting softer, inflationary pressures seem to be easing jobless claims in spain. the finance minister says there's little room for error. is your level of worry zero -- >> no. i think it's a good situation. yesterday the spanish market let us down between 4:00 and 6:00 a.m. and then we get data at 10:00 that is robust and then europe goes up more than we did.
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that's where it made me feel that maybe we are really the driver and they are in the backseat trying to sober up, asking, are we there yet? i want to give span budget dvds, relax back there. stop giving them soda. >> anything to go along with a dvd -- >> these are the kids. the europeans are kids. you stick them in the back and tell them to humor themselves, maybe give them an ipad. we're driving. we're driving. and we're sober. >> are we there yet? >> germany's like a designated driver for europe. we have to focus on the fact that our data turns around the whole world. like it was for 100 years -- >> sure. david faber is watching things on the floor with bob. >> i am. you mentioned spanish yields. that's where we're going to start in terms of europe. >> spain's down. portugal's down. i wish it wasn't so. but europe is weak. and remember the three schools on global growth -- china, above
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or below 8%? where's the u.s. gdp going to be, 2%, 2.5% or below? unfortunately the arguments for mild recession in europe are getting falling by the wayside. things are getting a little bit worse. spanish jobless rate is up for the eighth straight month. 22.9%. the monthly numbers are out. eight straight months of decline over there. those are issues and concerns about the ability to get out of this recession and the effect that it's going to have on the reform programs that are going on, the effect that it's going to have an debt reduction programs in italy -- >> "fortune" has an article tonight it today. will they or won't they be able to meet their deficit targets? but we could be focused on it if things go the wrong way. >> this is the first anniversary of portugal's bailout.
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the 78 billion euro bailout one year ago. a nobel prize winner was commenting today, he's over there commenting on this, saying we cannot rule out the possibility that there will have to be a second bailout in portugal. they're already sort of laying the groundwork for additional problems over there. i don't think anyone will freak out about that. but if there's talk that any kind of walking away from the debt obligations, of course that will set out a whole new round of crisis. everybody's saying that won't happen right now. i'm bringing this up because all of this is sort of back on the radar. and europe is not coming out of it. the big question is, what's going to happen over there and whether or not the u.s. can decouple what's happening over there. >> we seem to be moving along a road that's different than what's going on in europe. >> we're had a four-year high. yesterday the s&p hit a four-year high. look at any index in europe
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right now. far, far from multi-year highs. can the u.s. decouple? according to the stock market, the u.s. has decoupled from europe. it can only go so far. and that's why i keep bringing up europe here. we do need them. it's not like they're irrelevant. they need to be there. but for the moment, we're doing better. the bulls are hanging their hat on the retail sales on thursday. the early indications are the numbers are going to be terrific and a bit above expectation. that's going to be the key number, i think. we'll get the friday jobless numbers with no stock market. >> right. >> we're going to have futures trading, though, on friday. bear in mind, this is going to be a very strange little friday here. >> an odd release. bob, thank you. bob pisani. back to you guys. >> bob's right. this idea that we're going to get the employment number on friday and we have futures trading, this is insane. the government's really letting us down. either give us the number thursday or hold it back. that's just nuts.
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let's shift to bonds and the dollar. rick santelli's at the cme group in chicago. >> whether insane or not for that holiday release of non-farm, we're going to be open here, no matter crazy or not, we're going to be able to price it in. in terms of pricing in, today, australian central bank did not alterate. there's the notion that their aaa rating may be under the microscope by fitch and s&p. but fitch addressed it saying the budget the federal government presents in a month and the size of their surplus isn't necessarily the linchpin for any possible ratings issues. but it's being well talked about in the marketplace. our rates in the u.s. are really not going anywhere quickly. we're in a very tight range in the mid to high teens, two teens
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for a ten-year. but in spain, my e-mails were about 70% regarding europe. as you look at their three-year and their ten-year year to date, you can see the rates are creeping up. so europe back in the news cycle. jim, back to you. >> ricky, give us the best summary in the world. literally, all i need is what you tell us. let's check out the latest moves in energy. go to sharon epperson at the nymex. sharon? >> europe definitely in the forefront in the oil market as well. if you look at the flat price, it looks like there's not much movement perhaps in brent and wti. but that does not tell the story of what is happening in the north sea where supply continues to be tight and bp has announced that they have actually shut down a north sea platform causing some supply delays. we're seeing the spread between brent and wti blowing out to a six-month high, nearly $21 right now. that is the big trade, of course, that many are following. we're continuing to also see new money in the beginning of the quarter, perhaps working on this trade and that is another reason perhaps we're seeing the spread blowing out here.
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traders are watching this and trading it very carefully today. back to you. >> thank you, sharon. we're joined by art cashin, director of floor operations for ubs financial services. not kovrg his normal beat today, though. arthur joined payne weber in 1980 and is celebrating its original listing 40 years ago which predating your joining the firm, yes? >> absolutely correctly. >> what do you remember about those old paine days? >> there's a lot of water under the bridge. we had the '87 crash. that was a tumultuous several days, times you didn't know if some of the trades you made were going to clear or not or whether the person you traded with was going to be able to honor them or not. several sleepless nighs. >> we were just talking about the markets being closed on friday. you got a piece in your note today about good friday market closures. there have been a few exceptions over the years. >> yes. we opened up on three different
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occasions. the market was up two of them and down another one. and in all three cases, it was not anything remarkable. it was a minor change. >> is it -- do you think it's r irregular to get data on a day when the stock market can't react? >> no, it's highly irregular. but the relationship between the government and the stock market has always been a little bit strange. we have a rule down here that if a company is going to make an earth-shaking announcement of some kind, they tell the exchange minutes before, trading is halted and you wait to see if there's going to be a reaction. if the fda comes out with all roog, they just announce it. >> are there any conspiracy therapies out there? >> i think it's probably the accident of the calendar. they don't want to change it. but there is some suspicion that
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the number may be a bit more surprising than people think. >> we were just discussing the european vacation markets have had from european worries. today, spain gives us another reminder of what we used to deal with on a daily basis. has your worry about europe gone dormant, stayed the same, gotten worse? >> no, far from it. i think tomorrow with the ecb comes out, i don't think they're going to change. but i think draghi is going to give a stern talking to saying, you've been bought some time. get your house in order because this crisis is going to come back. two confidential papers were cut out saying that contagion is still lurking out there. >> and pointing out italy in one case specifically, yes? >> yes. that may be too big to save. so it's a problem. >> art, where did everybody go? the retail people, where's the volume? is this a disgrace? our cnbc poll says 37% of people
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like gold. real estate is more popular. what the heck happened here? >> well, i think going back to the flash crash, people got a little bruised. we've been watching the mutual fund flows. month after month after month, it's coming out. and some structural things like the etfs. the big ones get -- like a spdr. in the old days, they would have to lay that off by trading the 500 underlying stocks. that's where some of that volume's gone. >> art, nice to see you on the balcony today. here's your chance to strike back. in an ideal world, what would you fine the airlines for if you could? tell us. we have your response coming up. take a look at this morning's early movers here on wall street led by urban outfitters.
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welcome back. time to go over some of the statistics from that first quarter when it comes to m&a, talking about a deal we've at least seen today in terms of molson buying european brewer. as for the overall numbers, you know them. worldwide m&a down 35%. to just u.s. $481 billion.
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emerging markets m&a down 33%. global completed advisers down 24%. materials sector was only -- kind of a -- i don't know if you'd call it a shining light. but something was going on there. and we talked a great deal about that. all of these still important businesses for our nation's investment banks. and i'm talking about goldman sachs and morgan stanley and so on and so forth. jpmorgan. it was high yield that set the records in that first quarter in terms of inflows into funds and deals. it nearly tripled from the fourth quarter of '11. largest quarter for emerging markets corporate debt on record and for underwriting fees. good things were happening as opposed to m&a. raises the question as to whether you're going to potentially see finally the
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reemerging -- is there more an appetite to take up risk and finance deals larger percentage with debt being made up of high-yield debt in particular? >> where does cody fit in on that? >> if they follow through on an avon bid would need to raise a good deal of financing and write a larger equity check. yesterday in talking to the chairman of the company, he indicated they would want to stay investment grade. it would require them to come up with a larger equity check. they have a lot of money. the german family behind cody and the other companies that it is associated with, there is potentially a lot more money behind that. but it's an interesting point you raise. nonetheless, there does appear to be the ability to raise significant amounts of financing in this market both in the banks and the high-yield side as well. but we haven't seen it when it comes to the financial sponsors in terms of pursuing the bigger deals. at least not yet. we see beer deals. the biggest one over the last
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few years has been inbev's purchase of anheuser-busch. this is one of the largest deals of the year as well. $3.5 billion for that eastern european brewer starbev. >> on a day when stifel adds bud to the tech list. >> goldman downgraded jim beam and upgraded constellation. constellation report this is week. better have a good number. still early. a lot more "squawk on the street" in just a moment. coming up, are you living in a bubble? are you playing it too safe? let cramer help you out with six stocks in 60 seconds. "squawk on the street" will be right back. nology. arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz.
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♪ simon hobbs is coming up at 10:00. tell us what's coming up. >> we've got goldman sachs chief economist who's going to talk
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about what the fed could say this afternoon. we have toyota's usa president. and gene munster, the guy who's calling apple over $1,000. that is a show. back to you. >> see you in a few minutes. time for "six in 60," six stocks in 60 sec. intel's price target upped at bank of america. >> still very inexpensive stock. terrific chart. going to go over it tonight. still a buy. >> autozone upgraded to conviction buy at goldman. >> it had been in a holding pattern for a few weeks. i think it goes right there. >> family dollar upgraded to buy at -- >> if you're in the dollar general secondary, you're up nicely. >> whole foods gets upgraded. >> annie's goes public, people love it. this is a go-to name. >> annie's also higher on some cramer comments today. >> oh! secondary coming up, this is a power play.
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this is how you get more spectrum these days. i like it. >> and dominion, first-quarter earnings below consensus -- >> and nobody cares because the weather was warm. look at this. >> for more on those stocks, go to the ceo of annie's on this program tomorrow. >> that's huge. >> what's on "mad" tonight? >> i like to measure the economy through real estate investment groups? this company has the pulse on how america is really doing. >> you're encouraged by the secondaries in the first quarter. are you as encouraged with how first-quarter earnings are going to look? >> i think that the group that could outperform is not outperforming today. the u.s. banks, people want to downgrade these, i think they're inexpensive. that's where the ups is going to come from. 17% of the s&p right now, big.
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>> interesting. i can't imagine you were too happy with cashin's answer earlier. >> no. i want the asset class to get back its luster. when 37% of the americans like gold -- i'm a big gold bug, but come on. i like dividends. >> see you tonight. >> thank you, buddy. >> after the break, we'll get factory orders and gene munster with the $1,000 apple price target when we come back. the michael j. fox foundation funds the most promising research out there. they have teams all over the country doing everything they can to raise money. >> we raised about $4 million last year. it's staggering. >> i started getting involved in different charities when i realized that i had something that i could contribute. i'm karen finerman.
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welcome back to "squawk on the street." february numbers are out. they are up 1.3%. not a bad number. doesn't quite match the expectations up at 1.5%, last month originally released it down 1%, modified down to 1.1%. put it in perspective, the decemb december numbers were up. get to the roadmap for this next hour. piper jaffray coming out swinging saying apple is poised to become the world's first $1 trillion company. we'll talk to the analyst
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generating all the buzz in just a moment. general motors set to announce its march sales numbers in a matter of minutes. we'll speak to don johnson in a first on cnbc interview. and one wall street firm saying the u.s. will be entirely energy-independent by 2020. we'll talk to the analyst behind that call shortly. and the market taking a slight breather ahead of today's fomc minutes. will the street continue its momentum. yan hatzius is here to give us his outlook on that. world bank of canada has been charged in what's called a wash trading scheme by using contracts to reap tax benefits for its shareholders. rbc is calling the claims meritless and saying the proceedings will not be a financially material event. netflix catching a downgrade to equal weight from overweight courtesy of barclays.
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barclays also noting an influx of competitive risks for netflix amid international markets. call it a doomed marriage, if you will. the eurozone should accept its fate, split up and get divorced. that's all according to roubini today. the problems remain for greece and other countries including portugal and spain. he says it's far better to restore competitiveness through devaluation than by changing relative prices with a fixed nominal changes rate. pretty broad, expansive argument echoing what he's said for quite some time yet. >> have you read it? >> i have. >> basically the idea is the ecb comes in. tebs tak the ecb takes all five and says, okay, we'll help you, we'll support your currency as you exit. do you remember 1992? the uk tried to maintain itself in exchange rate mechanism in
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the same sort of way and george soros smashed it down. it's surprising for roubini who's usually fairly disciplined in the type of things that he says. but this would be massive capital duction for these companies. it's the reason you hold the whole thing together. >> there's an argument to be made it would be far worse for germany given its currency is artificially low. >> correct. >> did you see the unemployment rating in germany? >> no. >> 14-year low, first ever -- >> from memory, it's 16.2%. you have 24% in spain. wow! >> 50% for youth. >> under 25s. yeah. we have breaking news, gm out with its march sales. let's get over to phil.
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good morning, phil. >> reporter: good morning, simon. i'm here in new york where the auto conference is taking place. let's go through the gm numbers as we're joined by don johnson, the vice president of sales analysis over at general motors. you had an increase of 11.8% last month, below what the street was expecting. the street was expecting an increase of just over 20%. characterize why you may have fallen a little bit short of estimates. >> actually we're pretty pleased with the 12% gain year over year. one of the things you're going to find as the numbers come out is there is an enthusiastic and optimistic expectation for the industry overall. the industry is going to come in between 14.3%, 14.5% this month. our results are all about chevrolet and gmc. cruze was up 20%. and the volt sold about 2,300
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units, its best month ever. >> reporter: you think people are getting ahead of themselves? >> i think when we look at what happened in january and february, they were very low seasonal months. people are having a hard time coming down off the 15%, 15.1% he saw in february. but a 14.3% to 14.5% is a very good month for the industry and lays the foundation for continued good growth for the rest of the year. maybe not as high as some others were saying. >> reporter: what are you seeing in terms of the rotation, the shift from trucks, full-size suvs down to more fuel-efficient cars and crossovers? did that shift accelerate last month as we saw gas prices increase? >> it actually was fairly consistent with what we saw in february which was certainly more of a shift than we had seen a year ago. when we saw sonic, cruze, even
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malibu start to increase sale this is month, it's clearly a reflection of the much stronger car portfolio we have with chevrolet. but even when you look at a buick lacrosse, we saw good sales with that. consumers are shifting to more fuel-efficient vehicles. but they're not having a knee-jerk reaction like they did back in 2008. consumers need the utility a certain size vehicle gives to them. a good example is the fact that full-size pick-up sales were up 14% for us. a lot of commercial buyers who clearly need that utility are coming into the market, trading in their older vehicles. right now, seeing a pretty good balts balance between our fuel-efficient cars and crossovers. >> reporter: best month ever for volt with more than 2,200 being sold? >> yes, we expect it will be. we're encouraged by that. >> reporter: don johnson, the vice president of sales analysis at general motors joining us live here on cnbc.
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guys, there you have it. that's a bit of a different tone than we're hearing from other auto executives, gm expecting the sales pace between 14.3% and 14.5. >> phil, thanks so much. a bullish call on apple that's generating a lot of buzz on the street this morning. one top analyst is raising his price target to $910 from $718 a share. he also says apple will reach $1,000 a share in calendar year 2014 and will become the world's first trillion-dollar company. here first on cnbc is the man who made that call, gene munster, senior research analyst at piper jaffray. always good to speak with you. >> good to see you. >> your assumptions don't seem that ambitious when you take a look at the 12 times multiple and the calendar year estimates. what's behind the 80.18?
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>> it seems like a big number. but when you do the math, it's not that hard to get there. the answer to your question, the reason is mobile devices. the iphone is taking over the world. it's going to be the iphone and samsung. that's going to be 1.6 billion total units in the next couple of years. there's a big opportunity for apple. i don't think investors have fully gotten their head around it. >> 1.6 billion units sold by apple in the next couple of years. >> let me -- 1.6 billion as an industry. for apple, it's -- looking for about 400 million in the next few years. 400 million out of a 1.6 billion market, it's not that hard to get there. we think this is a very achievable target. >> when it comes to the trillion-dollar market cap, you estimate from here we're close to $600 billion, that $400 billion increase, half will be new investment into apple shares itself and half from competitors' market share loss. that is staggering.
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is it a zero sum sort of game here when it comes to what competitors are losing to apple? >> not quite. we've done a lot of work. we've been working on this call for the past month. we've gone back and looked at why apple's market cap has increased in the last three years. the reason is about half of that has come from competitors like r.i.m. and microsoft and nokia. and others have just come from natural funds coming in. going forward, when you break down that $400 billion you need to get to that $1 trillion, it's not that hard when you look at the large market caps of some of their competitors, they're going to rip market share out of them and put it into their market cap. >> gene, one of the things we hear anecdotally is the newer part of this generation of products is more evolution ri than revolutionary. does that give you any concerns that your assumptions about sales of apple products maybe
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a -- may be a little optimistic? >> when we survey people, 94% in the u.s. of iphone buyers say they're going to buy another iphone. when you break that all down, it comes down to between 35% and 45% of iphones every year are in the bag on an evolutionary product. in terms of revolutionary products, we have the apple television coming out at the beginning of next year, i think that's further ups to this $1,000 target. >> i'm fascinated how you feel about making a call like this. you've been at piper jaffray for a long time. you were there through dot-com. you've been in environments where analysts got stuff wrong, they were on the wrong side of the market. this is a big run-up in the shares. there must be an emotional element to you guys deciding to put your head above the parapet
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like this. >> it comes down to the numbers. as we've dean a lot of channel work in the past month, to answer your question, how do i feel about it? i don't feel that it's that actually that big of a stretch to get to $1,000. i feel very comfortable -- >> forgive me. i didn't mean to interrupt you. when you look at the shape of the graph and you look at the hyperbolic move and you're calling it to $1,000, this is not something that we've gradually built on. that chart is a phenomenal, phenomenal acceleration. >> yeah. and i think what's going on is phenomenal. i would argue that the chart reflects something -- a reality -- i know in the u.s. and europe, we see things. but i think what's going on globally -- i agree the chart basically would say that this isn't going to happen. that it has to take a natural pullback. that you can't get there in two years. but i think that fundamentally what's going on, we can get there. to answer your question, that chart does make me nervous when i see that big move. then i go back to the fundamental side and i feel very
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good about this call. >> gene, what else might make you nervous is the idea that apple would represent 26% of the total technology u.s. market capitalizations, currently 17%, if it were to reach $1,000, roughly a trillion-dollar market cap. has that ever happened in the history of the u.s. capital markets? >> it really hasn't. i think we're at a different stage. those are some of the numbers we talk about in our note. these are big numbers we're talking about. talking about $1,000, but we can you can get there and ultimately that, yes, they're big, but if you look at your wallet share of consumers, that really kind of reflects that, too. so i think that apple's continuing to grab share, which they should grab investment dollars, too, by that same logic. >> in a world, gene, in which apple shares are $1,000 a share and the market cap has reached $1 trillion, is there room for a research in motion, for instance? >> no. >> no. in that world, it will be out of
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business, it will be gone? >> yeah, i think research in motion is out of business. i think things like nokia, microsoft's phone, it's going to come down to android phones built on samsung and apple. it's a two-horse race. that's why this stock is going to $1,000. >> what is the call on nokia? what did you say -- >> i don't cover nokia. but i would say all the other manufacturers are going to go to virtually nothing over time. i think it's going to be very difficult for those to compete against samsung and apple. i think that game's over. >> gene, great to speak with you. thanks for coming on "first on cbnc." >> thank you. >> a programming note this morning, tomorrow, eddie lampert will join the "squawk box" team in a cnbc exclusive interview. that's tomorrow at 7:00 a.m. eastern. lampert rarely does television, if ever. >> i've tried, many people have tried -- i've spoken to mr. lampert a number of times on the phone. but that is something to think he'll --
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>> you've obviously worn him down on behalf of the network over the years, piece by piece. >> thank you for crediting me. i don't think i had anything to do with it. but sears will be a key component of the discussion. the hedge fund industry overall, his investments -- not just in sears but many of which have been very positive, autozone, for example. but looking forward to hearing from eddie lampert. i cannot remember him doing a television interview. >> r.i.m. just sois now down 4. the day. it had been weak all session. but a slight leg to the downside. >> that simple answer from gene munster, no. that was pretty stark. pay attention, president obama, raymond james out with a report saying the u.s. has the potential to become completely energy independent by the end of the decade. we'll talk to the analyst behind that very important call right after the break. ♪ [ male announcer ] how could a luminous protein in jellyfish,
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♪ let's get some stocks to watch. urban outfitters upgraded to neutral from sell over at citi. firm raises the price target from $26 up to $32. says the quarter's not looking too bad.
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fastenal downgraded. and schlumberger upgraded at sterne agee. a new report out this week by analysts at raymond james projects the u.s. to be totally energy independent in eight years. that's right, as soon as 2020. the end of the decade. it's far sooner than many forecasters were projecting. how can it be and if it's true, how can investors' capitalize? pavel mochanov joins us. thank you for joining us on cnbc. >> thank you. >> i thought in anticipation of this report that it would be a lot of cheerleading for shale and gas -- for shale, oil and gost gas. but it seems to be, looking at the figures, actually far more about reducing demand due to the fact that energy prices are soaring. people are cutting back on their travel patterns and increasing
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their energy efficiency. it's more a demand phenomenon in the united states than necessarily supply. >> well, it's both. it's actually more supply driven. so if you look at the move towards zero net oil imports, about two out of three barrels come from higher domestic supply, one out of three comes from domestic demand. most of the demand move has already happened. that was the consequence of the recession, of course. going forward for the next eight years, it's going to be principally supply, more demand production, particularly in those unconventional resource plays you mentioned, that's going to get us from about one out of two barrels being imported to 25% by the middle of the decade. and we think zero by the end of the decade. >> that is a big call. within that, what assumptions are you making about the environmental impact of fracking
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and the decisions that policymakers will make, the trade between oil independence and the potential, some say that you could have large amounts of america's water supply poisoned? >> well, fracking, just to set the record straight, has been widely done in the united states for decades. and overwhelmingly when done in a responsible manner, it is safe. the epa has said so and decades of drilling have shown that. but there is some controversy in states like new york or pennsylvania, you certainly hear that. we're assuming that policy remains as it is today, which is to say, fracking is regulated but it is widely allowed, primarily in places like texas and louisiana, this is really where a lot of this growth is coming from. if there were a dramatic policy shift, whether at the federal level or in some of these key
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states, that, of course, would curtail the growth in domestic supply, just like the difficulties in getting permits in the gulf of mexico has dramatically curtailed growth offshore. >> i want to switch gears and ask you about something else. carl icahn is proceeding pretty well with his desire to take over the company. what is your recommendation on this? where do you stand on this icahn bid? >> we don't actually cover cvr energy. but i will say, to make a more general point, refining domestically is one of the biggest beneficiaries of this domestic oil boom. why is that? well, because right now, there is a very widespread between the price of crude in the united
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states, west texas intermediate or wti, and all the overseas grades of crude like brent. that means domestic refiners are cashing in with extremely lucrative margins with capturing that delta. cvr is one of the refiners but there are many others that stand to benefit from this. we think there will be a disconnect between domestic and overseas crude prices just like there is a disconnect between domestic and overseas natural gas prices for indefinite future. >> and i see one of your top picks is actually chevron with a strong buy there and a $125 price target. thank you very much. it's an interesting call. thank you. >> thank you. second quarter kicking off on an upbeat note yesterday. as the rally rides high, what's the outlook amid the melt-up? we'll sit down with yan hatzius after a break.
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it's viewer's choice on "squawk on the street." tweet us a stock you want to know more about and why it interests you. send your requests to @cnbcsquawkst with the hashtag post 9. and one of our experts may give you an analysis live on the air. keep watching. yours could be next. [ donovan ] i hit a wall.
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[ female announcer ] introducing xfinity streampix. stream your favorite movies and full seasons of shows instantly on any screen. find out more online. emerging markets had a rough march. it's actually down 3%. will the weakness continue or is this your chance to get into the growth? time to go grading the globe. for that, we bring in tim seymour and a "fast money" contributor. can we call this a risk-on environment in which emerging markets have underperformed? >> it's been a bittersweet time.
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china held down by concerns that there wasn't enough aid. brazil with taxes on foreign inflows. india has structural issues. russia taxing its oil sector into oblivion. people have been mixed on the news. indonesia outperforms mexico because of u.s. growth outperforms. and you have pockets of strength in some places. to me, this is a relative value call. emerging markets have underperformed developed by 7% in the last month and a half. over the last 18 months by 25%. your general trade is to be long emerging against the s&p. that's eem against spy. but there are trades below that that make more relative value sense. >> you're saying buy market vectors russia and sell the russell 2000 or small caps. why that pairing? >> russia has been behaving in a
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way where it's almost seen extraordinary flows in on the way in and the way out. russia should be paired against an xme. but you want to have more tail risk. when the russell underperforms, you see russia highly correlated to that. in brazil, i think you're actually going to outperform relative to the asset class. i would be long an ewz ennis gn eem or a mexico in the region where you've had this outperformance. overall, i think the brics have overperformed. >> see you tonight on "fast." fed minutes are out this afternoon. in an environment where the s&p is up over 13% year to date, what does it mean for you? what exactly is ben bernanke and that board going to do?
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will there be q.e. 3? we've got the word from goldman sachs' chief economist, yan hatzius, next on cnbc. how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity.
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breaking news from the federal reserve. it's announcing a concert order against morgan stanley for mortgage misconduct at a former mortgage unit. the order requires morgan stanley to hire an independent consultant to review foreclosures, especially during the 2009 to 2010 period. this review is intended to provide compensation for borrowers for wrongful foreclosure actions. morgan stanley is required to enhance oversight if it reenters the mortgage business. but for now, morgan stanley sold the final assets of saxon april 2nd. however, the federal reserve saying that monetary penalties are appropriate in this case and they will be announced later. you remember the federal reserve announced actions against five
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mortgage providers, jpmorgan, wells fargo, citi, bank of america and allied back in february. those penalties were $766 million, which was separate from the broader $26 billion settlement that the states attorney general struck with those five banks. >> steve liesman, thanks so much. one hour into trading. here are the stories we're squawking about. apple, ibm and starbucks among the stocks hitting new all-time highs this morning. qualcomm boosting its dividend to 25 cents a share. and chrysler reporting a 34.2% jump in sales from march. consumer discretionaries doing well as are telecom stocks. let's look at the bredadth of what's happening down here at the nyse. over at the nasdaq, let's check on what's happening there and at the nasdaq we'll have a look at
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the breadth of the rally -- maybe not. there you go. again, buyers to the downside. let's check in with chicago and see what people are talking about there. notable that we've had a move down on the price of oil. founder and president of joins us live from the cme. is oil the focus or the fomc this afternoon? where next is the market trade? >> i don't think the market's that concerned about the fomc for the very short term. i think bernanke in his speech cleared that up. crude has been the focus. i'm a little worried about the sell and go away, the historic underperformance of equities from may to october. if it's going to come true, this is a good year for that, considering the warm winter. consumers had a little bit of a spike from that with their lower heating bills.
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when they went home and did their month lly budget, they di okay with the lower prices they were paying to heat their homes. that's about to end. i think we're going to start to feel that there's a hangover from the warm winter that i believe is coming. >> bob, we'll leave it there. thank you, bob. let's check on the moves in the metal market. sharon epperson is watching that and more at the nymex this morning. sharon? >> looking at lower prices for gold, silver and copper right now. gold remay understand range-bound, down about eight bucks, trading around $1,670 an ounce. copper really leading the charge, the volume there up about 33% for march versus the same period a year ago. what we're also noticing is a little bit of strength today in platinum. some are saying that may be due to some of the positive auto
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sales data that's coming out. but by and large right now, we're just in kind of a holding pattern in the metals market as money flows into commodities, perhaps not so much into metals on this session. back to you. >> interesting, thank you very much, sharon epperson there at the new york merc. getting fomc minutes later on today. does q.e. 3 remain on the table still? yan hatzius joins us on the post. >> very nice to be here. >> do you think we might hear a little chatter about easing today? >> i think there will be some discussion about it. i think the staff will have probably presented something on the various options that are out there. and q.e. is one. an extension of operation twist is another. but, of course, none of this is -- has been decided yet. if you listened to the chairman last week, he didn't give anything away. >> your take is we're going to see something, whether it's extended twist sterilized and i
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think you were arguing by june, right? >> that's right. after june, the probability goes down because june is the time that operation twist is scheduled to end. and that's a natural time to decide whether you want to have a successive program. that's the basic reason. and, yes, our baseline is still that we will see something in the second quarter by the june meeting. >> is that because the data is still anchored by question marks about whether -- >> i think that's one reason. there are still questions about the strength of the recovery as bernanke said last week. and more broadly, i think the fed would like to see the economy growing more strongly. they're encouraged by the improvements in the labor market they've seen but they want to keep them going. and they're concerned if the economy doesn't accelerate and gdp growth doesn't pick up from here, that maybe we'll see a slowdown in the pace of those gains. >> what about the tax wall at the end of the year? bank of america has a note out
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saying, they're neutral on u.s. equities despite the environment being very good because of what congress has to deal with after november. >> that is a very big issue. i think there are basically two issues -- if you want to talk about sort of threats to the economy domestically, there is the impact of high energy prices. that's probably the biggest issue for sort of the near term. but then for 2013, i think it's what happens on the fiscal side and when that gets decided, where that gets decided, in the lame duck session, whether we get an agreement by the end of the year and then ultimately how much restraint we're going to see. >> so if they embark on the purchase of mortgage-backed securities, what does that mean to everybody else? does it affect them in any way other than it indicates for as long as they're doing that, they can't raise rates? >> from the perspective of -- >> of the feds? >> yeah. >> if q.e. is the purchase of mortgage-backed securities, does that change anything in the world in which we live? >> at the margin, it would
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probably hold mortgage rates a little lower than they otherwise would be. if they didn't do anything by june, we probably would get some increase in interest rates because there is a probability that the market assesses that we will get something else. of course they hope to push down mortgage rates a little bit further, give a little bit more of a lift to the economy. >> every morning, we discuss energy prices here and their lack of impact at this point. is there some sort of point at which they start to really matter in terms of your outlook for the second half? >> i think they already matter to some degree. it's important to keep in perspective the increase that's already occurred. so far, we've seen about a 10% increase in seasonally adjusted gasoline prices. that starts to matter. maybe it's worth .25 point, .50 point of gdp growth. but it's not the kind of shock that would be a really big deal. we'll need to see what happens over the next few months. but i think there will be some
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impact. >> so many people are simply questioning whether there will be some form of q.e. 3. what happens if there is nothing? i think that's not the best case scenario. but just to play out all of the scenarios, if there is no purchase of mortgage-backed securities, what will happen, if anything? is it the equivalent of tightening? >> toingi think to a small degr. it's a small tightening instead where you could have gotten a small easing, it depends on the environment. if there is no q.e. because the data over the next couple of months are much stronger and you basically put aside the worries about maybe weather distortions, that's one thing. that's a more positive environment. on the other hand, if there's no q.e. because the feds decides they want to tighten a bit, that would be a more negative signal. >> always good to see you. >> thank you. spring is in the air. in fact, it seems to have been in the air for quite some time. a little early, certainly. today we're looking beyond the
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early blooms. and jane wells is seeing opportunity in how much municipalities can catch in on that early spring. jane has more. >> reporter: hey, david. here in malibu, it is an unbelievable day. and we've had so many of them this winter that they're even saving money here with the lack of winter storms. they don't have mud slides or houses falling into the ocean. but the real opportunity for savings are being seen in places like iowa where during the weather forecast this week, they're wearing shorts. >> what's it going to be like today, kids? >> warm. >> you got it. good thing you're in your shorts and tank tops and t-shirts. talking record highs. >> reporter: des moines hit 85 yesterday. that's nearly 30 degrees above normal. officials there say they've had only 20 inches of snow this year, half the norm. they've saved $1 million on snow removal. in new york, the tleway authority saved $10 million on snowplowing and de-icing.
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in denver, it did snow today, momentarily. >> we'll see lots of sunshine. we warm up really quickly behind it with 60s in store for wednesday and 70s by thursday and friday. >> reporter: denver officials tell us snow removal costs in january were $65,000 less than a year ago. but they were $134,000 more in february because of one huge storm. in march, usually denver's sn y snowiest month, they got nothing. >> we were wearing shorts and flip-flops. today, gearing up for a little bit of a snowfall. but it was so warm that anything we get will more than likely melt. >> reporter: this year looks so much different in contrast to last year. last year was so snowy. on march 30th last year, 31% of the country was covered with snow. this year, only 8%. and so cities are seeing opportunities to use the savings to fill budget deficit holes elsewhere, especially for services like police and fire.
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that strengthening economy could perhaps help raise their bond prices. we'll talk later on "street signs" about that. >> it looks absolutely gorgeous there. nice gig, jane wells out in malibu today. we should note, courtney reagan will have the weather impact on retail ahead of thursday's same-store sales numbers. could a faster move to warm weather bring in stronger than estimated or is it all priced in? we'll find out on "power lunch." plenty of breaking news to come. toyota set to report its march sales numbers very shortly. is the industry on the road to even better profits? we'll talk to toyota's usa president jim lentz next. americans are always ready to work hard for a better future.
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♪ been a busy day for auto sales. now toyota just releasing its march numbers. our phil lebeau is standing by with those numbers and toyota usa's president, jim lentz. >> reporter: an increase of 15.4%, below the estimate on the street, which is in expectation of a 21% increase. first time since '08 that toyota's sold more than 200,000 vehicles in north america and hybrids made up 20% of the march sales. i want to bring in jim lentz. let's talk a little bit about these sales numbers. what stands out when i talk with you about march is you call it a
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solid month, a nice month. but you're not as euphoric as others in this industry. >> the industry looks like it's going to come in somewhere around 14.2. this is three months in a row over 14%. we're thankful for the numbers but it can always be better. >> reporter: let's talk a little bit about production. north america about 70% of what you're selling in this corrupt, you're building in north america. do you have the full supply relative to what you want and relative to the hit that you took last year? >> if you look at the inventories we like to carry with this kind of market, it's roughly 250,000 vehicles. we thought we'd be building much closer to that number but quite frankly our sales pace is outstripping our ability to produce. we're still below in some series. but we're getting very, very close. >> reporter: strength right now is with hybrids, not the only strength you have. but 20% of your sales being in the hybrid category. but the hybrid brand now is different than it has been in
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the past where it was a rush to the showroom. then you had a six-month waiting list. now it's a slow, steady demand. >> very much so. hybrids are now a part of the mainstream. in our case, hybrids are not just prius, but camry. 10,000 of those hybrid sales were non-prius sales last month. >> reporter: have we hit the point with gas prices that we see the migration towards hybrids or does it have to get more toward $5 a gallon or gasoline? >> our future is going to be in hybrid technology. >> reporter: jim lentz, the company announced it sold more than 200,000 vehicles in north america for the first time since 2008. guys, back to you. >> thank you very much, phil lebeau. straight ahead this morning, we'll talk second-quarter outlooks, the fed and much more with vincent reinhart. but first, rick santelli what are you working on for the
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next hour of "squawk on the street"? >> we've talked borrowing and how we borrow close to 40 cents of every dollar we spend. let's team up borrowing with lending and sallie mae, fannie mae, freddie mac. also, when we think of the supremes, many people think of "stop in the name of love" job justice scalia. maybe it's stop in the name of too long. we're going to talk about european rates. they've been moving up. all of that, top of the hour. great shot.
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three minutes into the trading day. jnc holdings, they cited valuation. the price target rate of $42. it has been a $35 price target where you see the stock is right now. u.s. bancorp is incorporated. it is now a hold, it had been a buy.
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pandora, jmt securities, the price target there is $14. pretty significant percentage move, if it were to hit that. on to the feed frenzy in the skies. allegiance air announcing it will charge passengers $35. this makes believe that the secondary charge to carry on luggage fees. that brings us to today's "squawk on the street." what would you fine the airlines, if you could. we've got your responses, straight ahead. they have names like idle time books and smash records and on small business saturday they remind a nation of the benefits of shopping small. on just one day, 100 million of us joined a movement... and main street found its might again.
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and main street found its fight again. and we, the locals, found delight again. that's the power of all of us. that's the power of all of us. that's the membership effect of american express. according to the signs, ford is having some sort of big tire event. i just want to confirm a few things with fiona. how would you describe the event? it's big. no,i mean in terms of savings how would you sum it up? big in your own words, with respect to selection, what would you say? big okay, let's talk rebates mike, they're big they're big get $100 rebate, plus the low price tire guarantee during the big tire event. so, in other words, we can agree that ford's tire event is a good size? big big
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aleaguon air announcing it will now charge passengers $35 for stowing your carryon luggage in overhead bins. so we're asking you this morning, after being nickelled and dimed, what would you charge the airlines for, if you could? >> i would fine the airline for every single second they don't take off on time. >> maybe if they didn't have so many people stowing baggage in the bins, they would take off on time. >> maria writes, pilot and flight attendant freakouts, tarmac delays and hidden fees and our own joanne na thurman
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tweeting, everything the drink cart hits my arm when i sit in an aisle seat. >> don't you hate that? >> and i don't think they feel badly about it, either. i can see david has a look of an acknowledging eye for that the. >> i do, yes, and they don't care. >> they don't, no. >> david sits in the front, right? >> exactly. only on business. when i'm with the family, we go coach, baby. coming up tonight -- >> a lot of people might be wondering how does one invest in water? that is a huge question. we have a venture capitalist who specializes in that. bank of america, now the presence of center for financial stability. we'll get his take on what is going on in china and global growth. >> and, of course, tomorrow morning, 7:00 a.m. eastern time on squawk, we mentioned it earlier, david, but eddie
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lampert coming on, talking about fears and who knows, what would be your first question to him? >> i think it would have to be about sears, no doubt about it. where are you? are you involved every day? are you at this point changing your approach and not managing, micromanaging believing that you have a real touch in retail? sears shares are up. i have no idea if that's related to it. i got a couple of calls saying is there an announcement associated with it? as far as we're await, not at all. mr. sternlick knows mr. lampert fairly well. perhaps that is one reason why eddie is going to come on to the show. >> you have to wonder if part of this -- >> until march. >> part of this could be short covering in anticipation of -- >> you never know. we'll see you tonight, 5:00. in the meantime, if you're just joining us, here is what you might have missed if you're just tuning in.
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>> welcome to hour three of "squawk on the street." here is what's happening so far. >> bringing them in and they see the big gain that's available to them in fuel efficiency since the last time they looked and they say, that's a good reason to buy. >> consumer confidence is better. employment is accelerating. folks who get jobs want to buy cars. people who have jobs feel better about their security. >> we need to continue to follow our own example and embrace the free enterprise system. at a time when that's in doubt, i can't think of a better person to be president than someone like mitt romney. >> people say, is it time to buy groupon? this reminds me again to hark back on 2000. is it time to buy web van? 60, 50, 40, 30, this might be our web vap. it may be. >> these guys have confirmed that james murdoch has, in fact, stepped down as chairman. >> february factory orders are out. they're up 1.3%.
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>> i think a 14-3 and a 14-5 is nevertheless a very good month for the industry. i think we're going to lay the foundation to do growth for the rest of the year, maybe just not as high as some others were saying. >> going forward, when you really break down that 400 billion that you need to get to that trillion dollar, it's not that hard. they're going to go and rip market share right out of them and put that into their market cap. >> good tuesday morning. get a check on the market this morning with the dow down almost 12 points. s&p down about 1.5 and the nasdaq up almost 8. urban outfitters hitting a new one-year high today after the company made some positive sales comments. the company getting an upgrade from neutral to sell. va layer row, southwestern, chesapeake and exxon are all in the red.
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we'll talk with vince reinhart. then while most investors jump at the chance to pile into apple, one money manager saying, no thanks. he'll explain why he has no interest in having apple in his portfolio after having read a widely read report last week. plus, one of the brands in the auto world taking the market by storm. bentley showing off its new suv. the company's coo will join us. and as baseball's opening week gets under way, the co-owner of the chicago cubs, todd rickets will be here. we'll start with squawk on the beat. voters heading to the polls in washington, d.c., maryland and wisconsin today as the region nominees vie for some 42 delegates. john harwood is back at headquarters with more
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information. what do today's races mean for the likes of mitt romney and rick santorum? >> what mitt romney hopes is that he wins decisively enough in these three contests, heavily favored in the district of columbia and in maryland, favored in wisconsin, but he's had a single digit lead. not out of the question that n santorum could do well. but what romney is hoping is that santorum will reassess his plans to continue through august 24th. mitt romney wants to turn his attention to barack obama, but he can't do that so long as he's got a contestant race with rick santorum. >> and you've been consistent in saying romney will be the day. does today feel like that will become reality? >> the romney campaign has been saying for weeks that april 24th will be that day. they've been assuming that santorum would continue until then, that even if the won in
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pennsylvania, that mitt romney would do well in new york and connectic connecticut. but if he can repeat what he did in wisconsin, what he did earlier in michigan, ohio and illinois, you could see a window where rick santorum would say, do i really want to campaign for another three weeks, fight it out in pennsylvania when it looks very, very difficult for me? everyone in the republican political world believes this race is functionally over. but rick santorum isn't there. possibility that tonight could influence that outcome. >> and you mentioned the president at 12:30 today, he will give a speech attacking the gop budget as we see both sides take their corners relative to energy and in this case relative to how the country spends money. >> carl, this is why mitt romney wants to turn to the general election. president is squarely in the general election. he's going hard today after the ryan budget, which the democrats have now taken to calling the ryan romney budget.
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that has implications on policy for medicare, for discretionary spending, education. all things the president is going to say that paul ryan and mitt romney by extension are trying to shift more of the burden of the cost of got on to middle class families, relieve that burden on upper income. that's the core of his argument. mitt romney wants to begin answering that aurm in the fullest way possible. >> that comes a day after the scotus decision. but in the court finds it unconstitutional, the justices there would be following to activism from the bench. >> very interesting warning shot by the president, in effect, tilling the ground for the argument that he could make if the supreme court decides to strike down the individual mandate. the president would have said, we'll wait to hear what the supreme court says, not going to comment until that's over. but instead, he said with the credibility of someone who is a constitutional law professor, there's no way they could strike
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this down. because if they did, they would be doing exactly what they accused liberal judges of doing. that was an early peek at the argument the president will make and democrats hope -- i talked to a white house official yesterday who said, yeah, we think the supreme court is going to knock it down and bring it on because then we will go and make the argument to our voters that we need to re-elect president obama so that we could change the composition of the supreme court. >> thanks a lot. gary kaminsky looking at how in this case tech bubbles start, gary. and it comes on a day when pipers, putting $1,000. granted, multi year price target, but nonetheless on apple. >> as background here, i have to say, it's been a very interesting week. you know, i've been involved with cnbc. and i have to tell you, in the last week, the fact that there was some for apple the e-mail,
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the lakewood would have remembered having endured this and maybe back in the late 90s. the point here is that it is a worrisome time when you start to see analysts over analyst starting to get in front of each other, trying to take price targets up. i'm not saying -- we're not trying to make apples to apples comparisons because, yes, i know the multiples are nothing like they were in '99. i don't have an opinion on apple. in fact, the only opinion i had was back in the early part of january. remember, i came on air. i said when it traded down, every portfolio manager who wanted to own the stock, get in on the stock was going to take that opportunity to buy it. my opinion is not on the stock, but my opinion is on the experience that i have had having sat through the bubbles. we owned a lot of technology stocks in '98, '99.
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we were fortunate to sell many of them. i want to remind people what happened with uniformity. if you remember, this was a time in '98, '99 when one out of three publicly traded mutual funds owned this stock. the point here was that they all owned it, they said they had to own it because internet traffic was going to double every day. why don't you take a look at sony. we take a look at the 20 year chart of sony. there was a period, as well. when every sony product was going to be the dominant product. what you are hearing from many analysts coming up with price target is very similar rhetoric. i don't have an opinion on public stock. but this idea of not questioning some of the issues on some of the other technology companies and you start to see the same
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argument, i'm sorry, it has to be some sense of deja vu. >> you're not equating today's apple call with it. it's not a jdsu call? >> no. i did have a problem with the call. i want to play a quick thought about what he said when he was asked on tv about research in motion. >> i think research in motion is out of business. i think things like nokia, microsoft's phone, it's going to come down to android is built on samsung and apple. >> now, i have a problem with that because that is too recommend ninsent of '98 and '99. gene munster should never have answered that question. i'm certain that after he got out of air, he had to go speak to his own internal people about that. you don't make a sweeping call like that in terms of trying to substantial a price target and another stock. i'm sorry, that i had a problem with. >> and i said rim and nokia's
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phone business would, in his words, go to nothing over time. and said it's really a two-man race between samsung and apple. >> and to get to his valuations, he has to have certain assumptions of market shares and all. that was the analyst's opinion. that was part of the research settlement a decade ago. but you don't say research in motion will be out of business if you want to make your point about apple. that was an irresponsible call. >> definitely got our attention here, as well. in the meantime, let's get to the cme group. rick santelli is here with a tuesday addition of the santelli stance. >> carl, we all know there's a lot going on regarding the budget. we all know that many times i've tried to point out that in this country and in many countries we have real spending problems. but spending issues break up and not only borrowing, but lending. there was a great op-ed by
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george malone yesterday that pointed these out. in '08, we took over most of these in the form of fannie and freddie. we got $5 trillion encompassing many loans. and we know that directly they've so far taken down about 135 billion since they've been in conservatorship of taxpayer funding and ultimately over the next several years, many believe will be closer to $300 billion. this doesn't even include what happened in 2010 when the federal government decided they wanted to take over sallie mae. in essence, the student loan ram. $80 billion was guaranteed a decade ago. that is, indeed, a large open investigation. and we all know that we want immigrants, students, we want a lot of people for a politician to be in our base. but the problem when the government takes these things
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over, they tend to want to forgive things. second one, hey, stop in the name of love a extreme song. but listen to what one of the supreme court justices say, this is justice scalia, hey, what happened to the eighth amendment? you really want us to go through these 2,700 pages? do you really expect the court to do that or do you expect us to give this function to our law clerks? is this not totally unrealistic that we are going to go through this enormous bill one by one and decide each one? i don't care what you think about the health care bill. but i remember whether it's this bill or dodd frank that these hundreds of pages aren't bills. they're dissertations. nobody can understand them. please, write something that really is a law. maybe the legislature needs to take a class on how to write something on 100 pages or less. spain's rates are going up, calling into question once again what's going on with funding
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issues in europe. carl, back to you. >> i love it when you quantico motown, too. some clues, the march meeting released todaylty 2:00 p.m. eastern time. vince reinhart, joining us from morgan stanley, always good to see you. >> thanks for having me. >> you said in a note at the end of march that the spectrum of choices right now, with anywhere from inaction to qe3. do the minutes today narrow that universe down a bit? >> yeah. they will help. if there are embarking on qe3, they'll have to lay some groundwork in the minutes. they should have had a discussion at the last meeting, talking about the various alternatives. do they expand the balance sheet that is by securities with reserves or do they buy some things and sell some other
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things that is expand operation twist? >> so what do you expect that to read like today? >> so if they really are thinking about some form of qe, there should be a paragraph explaining that the staff made presentations of alternatives and there was an exchange among the participants about the pros and cons of each. >> would that -- that doesn't sound like like a wait and see mode. >> no. there's a couple things you have to recognize. one is they're pretty clearly from previous statements, they are data dependent. so the one issue is what's their trigger for action. the second issue is what do they do? what they do is it would be described in that paragraph where they consider alternatives. the trigger for action will come in their discussion of their outlook. how worried are they? how much slack do they think they have? is there downward pressure on inflation? are they worried about gasoline prices? that will indicate how much they
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want to act. then the issue is what will they do? >> yeah. do you agree if they do anything, it has to happen by june? >> look, the fed is under enormous political pressure. they don't want to step into the campaign season. so i think the window closes not completely shut, but pretty close to it by the end of june. >> finally, ed lazeer has an op-ed talking about the weakness of this recovery. because of things like regulatory uncertainty, tax uncertainty, you yourself have written about crisis in which unemployment didn't return to crisis levels in some cases for two years. is that what we can expect? >> yes. my wife, carmen and i, wrote a paper called after the fall. the bottom line is, ten years after a financial crisis, the level of gdp is 15% lower than the previous decade's trend would have predicted. crises have a really long film.
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>> vince, we'll see what the minutes say today. always good to talk to you. thanks for the time. >> thanks, carl. while most of the street says buy, bias, buy apple stock, one money manager says, no thanks. would he tell we'll get his seasoning on a day when the price targets are obviously going a lot higher. man: 1939 -- my parents ran across an ad for a hot dog cart. my mother said, "well, maybe we ought to buy this hot dog cart and set it up someplace." so my parents went to bank of america. they met with the branch manager and they said, "look, we've got this little hot dog cart,
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and it's on a really good corner. let's see if we can buy the property." and the branch manager said, "all right, i will take a chance with the two of you." and we've been loyal to bank of america for the last 71 years.
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year-to-date, apple has
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risen more than 50%, a market cap increase of $180 billion. na is roughly the size of johnson & johnson. is this company too much of a risk to own? john, good morning. as you know, you wrote a research piece and more a client letter a couple weeks back that started to circulation amongst a lot of smart money managers. the and my first point to you, my first question to you is there are a lot of stocks out there, portfolio managers own stock webs they don't own stocks. why did you decide to write this piece explaining to your clients why you did not decide to own any apple? >> typically we write a strategy piece, gary, that we want to be helpful to the clients so that they kind of know our view on things and how they view risk. it's the first time we've written a piece on a single stock like apple or any single stock for that matter. >> and was the fact that you
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wrote the piece, was out because you had clients asking you, why are you not buying apple? o or was it the fact that so many portfolio managers own it. what was going through the strategy of des semester nating your strategy of why not to own apple? >> well, it had received a lot of media attention. so we had had some client questions about it and what our thoughts were about it. you know, it seems when something grows to be the largest company on the planet, it's worthy of commentary. and why this is happening and what we think about it. >> let's go back to -- in the piece, you basically say you look at companies and you say, yes, no, or too disk. too difficult to make a determination. so you're not short telling, you're not short apple, you're not saying to sell the stock, but you're saying too difficult.
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why is it too difficult to own? why is it too difficult to come up with the math and understand the numbers that they're telling you? >> we see appearing as a difficult stock to us because, number one, it's not clear to us how long it will keep its edge in terms of technical competition. the stock market, it appears that the market is pricing in it will keep that edge forever. and number two, it's unknownble how long people will be able to -- or how much people will be able to spend on devices going forward. they're spending a lot of money now. the apple devices are certainly a status purchase so they're willing to spend more. but will that be the case in two years or five years ago the products have been out in the market for a while. and then number three is once you get to a growth rate or a
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market penetration raid of 51% of households per your recent survey, it gets tougher in our view to get the kind of incremental growth that they've had in the past. they have a high level of penetration. will they be able to opinion that going forward is an open question. >> and you look back at the history of their products, finding that their shift life tends to one maybe one, two, two-and-a-half years and your theory is that that can't continue, right? but you don't have they'reries about who can come in and make those products. >> i'm not saying that it can't condition. i'm saying that it's a difficult call to make. what the technology landscape and the device market is going to look like two, five, ten years from now. it's very difficult to know that. >> john, we have to run, but you mentioned the cash flow and going out and trying on discount it back.
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what is the type of rev looug knews? if you take the trailing pes, what type of revenue do you look at ten years from now? do you think the market is pricing it right now when you discount that cash flow? >> well, the last ten months have been about $128 billion in revenue. the way we look at it is if apple is going 20 keep its margins going forward, which could be a challenge, as well, it's pricing in about a 20% revenue growth rate. that's going to be difficult in terms of unit volume and the amount of money that people spend on the devices themselves. are they going to continue to spend $1,000 per household, which is about what they're spending now in the u.s. >> john, that was good information. very helpful. thanks very much for joining us. paul, i said to you before the segment. when a lot of people with long stocks forget is you want there to be critics and cynics out there. i want them to be negative because ultimately, by people
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not owning the stock, that's how you get the higher valuation. >> and the firm has been around since '97, by the way, $800 million under management. >> trying to explain why they can't come up with the valuation. we have to go. >> when we come back, we'll count you down to the close in europe and a big stock about beer. introducing gold choice. the freedom you can only get from hertz to keep the car you reserved or simply choose another. and it's free. ya know, for whoever you are that day. it's just another way you'll be traveling at the speed of hertz.
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europe's trading day will close in 2:45. we'll get to it after this break. i look at her, and i just want to give her everything.
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nice timing on that. a lot of red, very little green. simon hobbs is here to walk us through what happened, including a picture of what's happening in the spanish sovereign debt today, simon. >> obviously, there's a lot of concerns where we're going in madrid. generally across europe, you can see the red and with a downward bias that erupted during the course of the session. let's have a look at the three major indices. that, of course, is the three biggest markets which, of course, is london, germany and paris. you can see the way in which we track down lower, the lot is that you're getting here on the united states only accelerating that. carl mentioned where we are exactly on spanish debt. let me show you a chart of the extra that investors demand to
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hold spanish debt over the german benchmark bunds. we have been rising recently today. we got the budget through more detail on the budget, the austerity budget. and one of the standouts here is that the debt to gdp ratio will be from 68.5% last year to 79.8% by the end of this year. that's a huge move and they're not going to actually enact austerity now, they say, until june through parliament and members of the ecb are saying, look, that's too late. meantime, of course, this spanish equity market continues to face difficulties, as you might expect, and this, so far this year when so many other markets are higher, it's lost 8.5%. and you can see how we've trekked down over recent sessions about where exactly we're going in spain. across europe today, some of the major banks were hit and you see that particularly in madrid. certainly those big guys, bbda and santander down 4.8 and 3%
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repetitively. tomorrow, the european central bank may see that the central bankers, mario draggy become more hawkish about what's going on because you have to balance the government council views where they pump so much money into the economy. you, therefore, might find that the euro continues to be relatively supported during the course of the year so far. you've seen the euro climb against the dollar to 1.34334. carl, back to you. >> thank you very much, simon. renewed concerns about some in europe today. meanwhile want we've got ed lazier, the worst economic recovery in history says that basically what we have gotten so far has been the result of gimmicks, in his words, cash for clunker webs first time home buyer credits and then uncertainty about taxes and regulations. >> well, the regulation issue, i've had issues about that a lot recently, especially the one in the "new york times" a couple weeks ago.
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that's another matter. but -- >> greg smith? >> yeah. but here is the thing. what lazier and while regulation could be a very, very significant portion of it, you have to understand, and i know this from talking to ceos every day. the fear, having lived through 2008 and having really that in the back of almost everybody's mind on a daily basis today, forget where the stock market recovery is, many ceos in terms of human capital, in terms of pp&e, in terms of cap ex, that's all at the back of their mind. so a lot of it continues to be the fact that what we lived through in 2008 is one of the reasons why it's been such a muted recovery. it's not just about more regulation, about uncertainty. that's part of it. but there's part of the fact that living through 2008, a major component was still happening today. >> so you're saying hot stove essentially, right? don't touch it twice? >> well, again, i mentioned this some weeks back. tell me the last time a company announced that they were expanding their human capital. we're going to go out and hire
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people and they were rewarded in the sense that that stock price went up because they actually said they're going to go out and build a business. i don't think there's many cases of that. we're still operating in a sort of defensive role in the event something does happen in europe as an example. >> there is some small annic in the ge today talking about repatrioting jobs. >> but if you announce a major expansion, if you announce some major new product development and it's going to cost a lot of money and require a lot of capital investment right now, you're not going to be rewarded for that. it's a show-me account market in terms of that still. >> that explains some of the tepidness in mergers and acquisitions. >> and i think that has a lot to do with why you've seen such a uninspiring m&a market, despite what we've seen in the equity market. by the way, pasani and hobbs are so much better than the telestrator than i am. >> it's an acquired skill.
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>> yeah, sorry about that. i have to go around twice. >> you have to assert your inner weather man. you have to get the whole physical part of the whole thing. >> indeed. >> i love what fellow golderman had to say about apple. when that analyst came on with the 1$1001 price target, i got o many calls. there was a call in 1999 about the $1,000 stock and i bet you don't remember what it was. >> qualcomm. >> i think he was with oppenheimer at the time came out. and those of you that don't remember, in case you were 12 years old at the time, this was the height of the tech bubble. put up qualcomm here. this is november and december 1999. this is split adjusted a long, long way. it was about $500 at the end of 1999 and walter came out and
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said qualcomm could be a $1,000 stock. that was the first time anybody had heard of a $1,000 stock. the stom stock in one day went from $1,000 to $650. it went up 30% in a single day. and never had hit $1,000. it was a little shy of that the next month. but that was basically -- the market top was at that time. qualcomm went on and it dropped dramatically. put up qualcomm in the last 12 years. it's been a good investment if you dropped at the bottom, but it dropped dramatically in january, february, by february, march of 2000, it was dropping rather dramatically here. let's move on with qualcomm. remember, henry from amazon, henry was a very famous analyst at the time. and we're talking about amazon and that was going back to december 1998. the stock went parabolic.
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the stock was 230, 240, something around there. suddenly, within three weeks, from 230 to $400. >> these are great points. and qualcomm and amazon, the companies that had survived and gone on to great success. you probably remember commerce one, the b to b player where it got $1,000. and commerce one i don't think is in business today. great memories. as i said earlier, the late, great mark haines would have been pointing out to all of you, when you have one directional analyst opinions, you at least have to think about something. you've got to. you've got to think about that. >> that's why i bring it up. apple has -- we didn't have good valuation metrics. >> everybody says, oh, this is a sign at the top where somebody made a $1,000 call. we have very good valuation metrics for apple the. and the stock by tradition methods is not overpriced, still. >> thanks, bob.
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meantime, federal regulators getting set to act on a proposal today. mary thompson has more from treasury this morning. hi, mary. >> hey, carl. this group of 14 regulators, including 10 voting members are going to be voting on a proposal to determine which nonbank financial companies are going to be designated as being systemically important, better known as nonbank cipis. if a bank is chosen, it could pose a threat to the stability of the u.s. financial system. one of the criteria for determining whether or not a firm gets put into this pool is if 85% of its annual gross revenue is derived from financial activities. a senior registration official says it should be out by december. aig will be among those on the
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list. as for others, earlier proposals give broad outlines, then they should have $50 million in assets, including a 15 to 1 leverage ratio and short-term debt to average ratio among other things. a senior administration official warned that companies should try to manage around these parameters in order to avoid being chosen because regulators still could put them in this pool if they feel they pose a threat to the system. how are these banks going to be chosen? that's an issue being addressed today. according to an october proposal, which is expected to be very close to the final rule, the first step will be the firms will be invited to the process, then fsoc staff will do a deep dive on public info, then the firms are to be designated. that happened in december. the meeting happens at 2:30 today and, carl, i've have updates throughout the day today. >> thank you so much, mary.
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when we come back, the bentley suv makes a trip to new york city. we'll talk to one of the executives at bentley about that car and when you might be able to take one home. that's next. first, some of the winning and losing stocks from the trading dayover seas. [ male announcer ] this is the age of knowing what you're made of. why let erectile dysfunction get in your way? talk to your doctor about viagra. ask if your heart is healthy enough for sex. do not take viagra if you take nitrates for chest pain; it may cause an unsafe drop in blood pressure.
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tdd# 1-800-345-2550 let's talk about fees. tdd# 1-800-345-2550 there are atm fees. tdd# 1-800-345-2550 account service fees. tdd# 1-800-345-2550 and the most dreaded fees of all, hidden fees. tdd# 1-800-345-2550 at charles schwab, you won't pay fees on top of fees. tdd# 1-800-345-2550 no monthly account service fees. tdd# 1-800-345-2550 no hidden fees. tdd# 1-800-345-2550 and we rebate every atm fee. tdd# 1-800-345-2550 so talk to chuck tdd# 1-800-345-2550 because when it comes to talking, there is no fee. welcome back. coming up, is apple out of
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control? a top analyst explains why his top price target is only $500. plus, our traders take out their sell lists. and will nike's nfl jersey deal propel the stock even higher? now back to the stock exchange and my man, carl. >> see new a few minutes, scott. i want to get to julia boorstin who just got off an investor call about facebook. what can you tell us? >> well, carl, the big question is facebook really worth $100 billion? and private company experts lou kerner and bruksstern says that's low. the equity value is at $137 billion. brukstern projects facebook will grow to $137 billion this year projecting $11.2 billion in revenue in 2013 on $3 billion in net income.
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now, in this call this morning, brukstern through a number of comparisons to google saying facebook's growth is right in line with where the search giant was six years ago. two key things here, making money on facebook's mobile users. questions on the call which are ongoing right now are a bit more skeptical. asking questions about the risk factors, to include regulation, privacy issues, plus the fact that facebook has to keep innovating to keep users engaged. >> if that ipo comes in early may, things will heat up rather quickly. bentley is unveiling its suv concept in the u.s. for the first time. joining us here is benly motors president and chief operating officer first on krn.
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kristoff, good to have you with us. so it's a concept. no questions about whether it's going to go into production. but what led you to this part of the market? what is the market telling you about a reception of this vehicle? >> we are saying that our customers, a lot of them have an suv in their portfolio. they've been asking us for a long time to think about it. of course, we couldn't do everything at the same time. but they love this concept. we believe it would be a great extension to the bentley value in terms of engineering, craftsmanship, a luxury into a new territory. >> we're looking at some pictures of it now. definitely looks like a bentley. pricing -- >> it is a concept which has not been approved yet. we expect a decision this year, so we are gauging market reaction. we are mixing with our customers and fine tuning the concept. and later this year, we will be
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able to tell you a little bit more. >> looks a lot like a bentley. also looks a little bit like the pore cha cayenne. when you look at porsche telling suvs to the tradition roadster, what is that correlation? >> we believe we are going to create a new market segment on the top of all suvs. you can find in the marketplace today. the same way we have done it when we launched in 2003, we are creating a new market segment which has concerned our company and we believe we can do the same at the highest end of the market signal. >> this debuted in geneva, i think in march, yes? >> yes. >> and making its debut here in new york for those who have driven a bentley before, how does this feel relative to driving a -- >> everything is bentley dna in
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terms of performance. we have shown the concept of a w-12 engine. and 621. so this is practical luxury and craftsmanship. >> looks like a little pickup, i imagine, too. i can't wait to see it in the show. thank you so much for coming by. >> thank you very much. >> i want to sent it over to kayla tausche for the latest on the news that james murdoch is resigning as the chairman of bskyb. >> george murdoch will still remain a director. but this is the latest defection pore the younger murdoch. he released a statement this morning saying, i am determined that the interest of bskyb should not be undermined by
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matters outside the scope of this company. interesting to note, though, at the november 29th shareholder meeting, murdoch was recollectioned to bskyb's board with 81% support. when he was at that time resigning from the times, he was doing so to put more attention to bskyb. other than bskyb, though, his only other board seat at this time is that of news corporation. shares up as they keep buying back shares, but it remains to be seen whether that is a position he can hold. carl. >> plot definitely thickening over there, kayla. thanks so much. the co-owner of the chicago cubs, todd ricketts will join us to talk about the business of baseball and a lot more. be right back. [ male announcer ] if you believe the mayan calendar,
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the chicago cubs will face the washington nationals in their home opener on thursday. we all wish we were there. let's head back to the cme where rick santelli is standing by with a special guest. rick. >> before i show you my special
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guest, todd rickets, co-owner of the chicago cubs, my team, a little trivia. carl, have you ever used a philips screwdriverer? you know who invented it? fill wrigley. i never knew that. >> interesting. >> the point here is to start out that the cubs organization may not have won a world series since 1908, they are so all over the charitable side of veterans and wars in the military that after one day after pearl harbor, phil wrigley donated all his life, he can be one of the first teams to have life to the war effort and to that vain, i want to bring in my guest. welcome, todd, i love the cubs. tell me about the p-51 mustang. >> yeah. we have a project where we're bringing in a p-51 mustang into our new boeing freedom pavilion. i put myself out there saying, how hard can it be to find people who want to raise a little money to buy a mustang? we discovered it cost backside 1 million to put a p-51 mustang in
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the museum. we're halfway there. so we're doing pretty well on the fund-raising side. the interesting thing about the p-51, from a strategic point of view, it changed the u.s. war strategy as far as being able to escort bombers all the way to germany and back. but the p-51 we're going to hang is going to be a red tail, which was the markings of the tuskegee airmen all over the african-american pilots for world war ii. >> isn't that the lucas movie thauft that was just out? >> that's right. george lucas had the movie out highlighting the tuskegee air men. there's a lot of history tied together, whether it be the sieve war, world war ii. >> i think that's right. african-americans made a contribution. wrigley field, opening day on thursday against the nationals. what do you think of the team this year? >> this is our year. we're going to win. i think every opening day you
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have to start off with that attitude. if we don't win 162 games, we're going to be disappointed. i think we have the kids to do it, too. >> carl, come on, i know you're champing at the bit. do you want to ask todd anything? >> the big story lately, it's amazing how things change. but the big story is all about football and the saints and bounties. and i just wonder whether or not you think baseball is going to have even more of a leg up this year against what the nfl is having to deal with in the off season. >> you know, i don't know if any of that stuff is going on with the nfl is going to impact us directly. i think that right now, baseball is on a high. we've got a pda that goes a long way. the players and owners are getting along. people are watching more sports on tv. so the media rights are going up in value. so everybody is feeling pretty good about where baseball is at right now. >> todd, welcome and thank you and come back again.
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i'm putting in for my world series tickets today. >> thanks so much, rick. when we come back, don't forget the tweet us. allegiance air is now charging passengers $35 for the pin space in the overhead apartment. our handle is krn@squawk. zap technology.
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sidewalk on t"squawk on the this tuesday. charging $35 in the overhead big storage. we're asking you, what would you charge the airline for if you could? craig writes, i'd charge them for the fake bye-byes you hear. greg writes, for every five minutes i have to wait for my luggage, and finally grant writes, every time the pilot gets locked out of the cabin and has to be tackled to the ground. ouch. >> i've got one for you. how about when you ask somebody, why is the incoming plane late and they make something up and they say, you can just go to www.flightaware and find out
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what the story is with the incoming flight. they say, oh, i didn't know there was a website out there. >> it's amazing how smart you are as a flyer now. >> go on flight aware and they'll tell you anything about any plane, where it is, don't make stuff up because we know you're making it up. >> down 48 points and the concern, we've got big debt levels in spain everyone is talking about today. hasn't really risen to page one. i wonder if you think that will happen in the second quarter. >> i have been wrong in the sense of trying to think when europe will start to matter again. it has not been the case. and i call today's action a nonevent after what we had in the first quarter. we should point out earlier pisani brought up that chart. qualcomm and the great memories of the $99 price target. i was e-mailed by greg golden. it was, in fact, not oppenheimer that had that call, but


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