tv Squawk on the Street CNBC April 16, 2012 9:00am-12:00pm EDT
answers. our thanks to david walker. you were here on what was really -- history was made. >> absolutely. one giant step for me, for tweet. >> you messed up my -- >> geez. all right. good morning. welcome to "squawk on the street." i'm melissa lee. carl quintanilla is on assignment this morning. stocks coming off the worst week for a year. taking a look at the european trade, certainly the yields in spain on the mind. two big market stories for monday. citi shares climbing on the back of better than expected quarterly results. could a hike of the dividend be
next? caterpillar is also being upgraded to a buy. what's the trade for industrial commitment? despite the bright spots, could europe be the ten-year stocks trade above 6%. and coty keeps on coming. sending a letter to avon about an interest and willingness to raise the bid. citi getting better than expected earnings. vick krom pandit saying that the bank will manage risk carefully. pandit will also address stress tests as well as the dividend on the conference call when that gets under way. a different story from jpmorgan and wells fargo received on friday. >> friday was the day before in the last half hour we figured spain would collapse over the weekend.
actually, it did. big auction on thursday. it's been a long time since i've been worried about an auction in the united states. citi's quarter was no stronger than wells fargo. i thought wells fargo was a remarkable quarter. you're taking your cue from etf selling and spanish banks. if you do the line item, you realize citi is pretty well, wells. cutting through citi holdings, 10% loan growth, one day this will matter right now and nobody cares. the valuation is going to get better. >> what was it on the wells quarter? i heard you talking about it on "squawk box"? what was it that people felt were underappreciated? >> i think they are going to dominate this as you would not believe. i think you're going to see a bottom line number that is going to make it so you realize this is one of the lowest multiples of any -- just not bank but any
company i've ever seen. including the low multiple that you got at the top of the steel cycle. this is a company that is lever to the housing getting better. >> we're talking wells fargo even though citi is out this morning because wells fargo did not get a big pop. >> people didn't like it. >> but they like citi this morning. now, citi gives out plenty of mortgages but -- and vikram pandit will tell you time and again, they are about emerging markets, international exposure, and a lot of their earnings review focuses on that part of the business as well. >> are they over 65% in. >> i think they may be close. >> this is incredible. anybody overseas, you recognize that there's a lot of different banks that you would never think about going. they are citi. and they are citi. and i think that this is a worldwide franchise that is very undervalued. the fed didn't do any favors
for. >> so in anticipation of, let's say, a dividend also because of an insurance institutionally underowned, who would be a better risk reward for investors as opposed to jpmorgan or wells fargo which remained in favor throughout the past year and a half? >> my feeling s. you say something good about it and then the bond auction goes bad. people say, cramer, are you an idiot. we are still alive with these banks in europe, whether we should or not. >> those three banks seem to fall apart the most when we see the european banks stumble. >> energy loans from -- some people say it's worth 9.5 billion. they've really taken advantage of the collapse of europe and they are thrown away like
anybody else. i have to tell you, when you -- reading a bank statement, reading a conference call of a bank requires you constantly to go back and forth. i'm never embarrassed that i still have to go back and look at the terms. citi, they have an increase in their debt and of course that means earnings go down. what kind of accounting do these guys do? >> we deal with it all the time. whether it's at the cost of you or buying back the debt, it's less. or i should say it's more. as your credit gets better, you actually have to incur a charge for it. if it's trading not well, it would cost you less to buy it back. it's kind of the idea that you have to keep in mind. we can only hope that goes away in the not too distant future. >> i know. >> it creates an enormous amount of noise every quarter depending on the credit spreads. >> initially when the citi
earnings traded lower, nobody understood what the impact was until it was laid out and then we understood that the eps results came in better than expected. that's the confusion that it causes. but in terms of what the bank earnings are telling us so far, jim, it seems like it would be an improving sector, perhaps an improving economy as well. is that the ex trtrapolation th you can make? >> why didn't we get a better reaction? they have to be overcapitalized. they obviously are lending. their loan losses went up a bit. they haven't been able to return capital because if we ever got to a normalized remarkable buybacks, but jpmorgan being very careful about buying stock back up here. they want to pick the right price. >> and they did substantially
and there were expectations that they would and we should point out the basic trend of net credit losses continues to come down you have a reserve, $1.2 million. net interest margin, flat at 2.9, but not going up and that continues to be a question. >> if you want to explore the earnings here, you cut back the governor relation and you let interest rates go up. if interest rates go up, these guys are going to make a huge amount. it's incredible that it's not going down severely here where the ten-year is. >> it was flat quarter to quarter. >> it's just amazing. >> it's a test meant.
>> yeah. >> hates the banks in the stock market or hates the banks broadly speaking the population? those are two different things? >> ail bit of both. image problems certainly but they don't have the earnings power that i thought. you can't have earnings power without an interest margin going up. >> it was one of the best performing. >> i think those that throw them out are making a bet. if you want to trade like the first ten minutes of the show, he likes to say it i like to say it too actually. >> i like to stand up and click my heels. this is more constraining. >> caterpillar -- you know, i practice.
caterpillar moving higher an attractive entry point into a stock with a strong growth profile at a discount in valuation. that's all gobblygook and they did a survey of the equipment dealers and they found that there are many factors, including strong rental demand which translates into strong prices, warm weather certainly helped. so you will of a these things. >> >> europe is better than expected. south american growth is accelerating. obviously every tick down in china. the machinery stocks have given up the ghost is because of china. i think china is trying to
bottom. i know i'm sounding bullish. this is a line in the sand that maybe cat is done, done going down. >> bank of america at the high end of the street when it comes to first quarter estimates. they are at the high end and expect the first quarter beat as well as a raise on this. also, what the construction survey is saying about international demand is that europe and asia are in fact stabilizing. they are hearing it from the boots on the ground, the dealers saying things are picking up. >> right. you and i said that recently. it's the old new holland case disstrib but distributor. there is not enough capital goods stocks to short. they short joy and these have been risk of had free, frankly. >> if you say so. >> well, when it comes to this
area, i'm just listening to you. >> can you add to yesterday's sha lacking after two solid wins? >> i can't. 6-3. what's your record. >> i know. you rubbed it on. >> it was saturday's game. >> there you are, you have to e-mail me about how -- dude, this is a monster. this is the kind of rub-in thing i expect from my yankee friends. >> that was just great. you know, sometimes when you're watching a game, you should have e-mailed me on the flyers, for heaven's sake. >> calm down. let's go into our special place now. >> economy minister of spain
says the country will dip back into the recession for the first time since 2009. they are calling on the rest of the world to contribute more to the imf bailout fund. >> well, germany has -- i see myself agreeing with paul all the time now. one of the things that's really interesting about what kreugman is saying, we've got to grow. germany is getting it both ways. they have a dynamite economy. >> a much higher word than the much more sovereign currency as opposed to the euro and an economy that benefits from that. spain, that's been the question all along. can you do both? can you get your gdp down where you need it to be while you administer significant austerity in a country that's suffering
20% unemployment, 50% youth unemployment. it makes us look like we're doing great. yes. that's 1931 numbers. i do want to point out, when you look at what is happening with germany and you look at what is happening with china and germany, have you seen these bmw numbers out of germany? they are selling like mad. that country is so strong. you would think they would look over at spain and say, you know what, guys, we see what you are doing and we are going to help you. where is that? how do they get away with that? >> well, i think it comes down to political leadership and i'm not sure how it cuts. you know, at the same time, you have the argument in germany, why should we be subsidizing greek workers who retire at 58? we retire much later and work much harder. >> spain has been conservative. they didn't have the housing bubble that we did. but i think merkel is trying to
be the dominant force and she is winning and it's wildly unfair. >> there are going to be french elections and they are going to talk about what happens with sarkozy is gone and that could be another development that bears close watching. >> one other thing to think about, i used to train a lot of government debt in the '80s and '90s. they used to come in and soften the treasury market. we're seeing the 6% go to 6.1. >> right. >> there is a gigantic auction on thursday, the ten-year. this feels to me the way the u.s. treasury used to trade before a ten-year auction. they would slam them down and then they cover. you never know. >> you never know. you never know. and then there is the s&p. european central bank can buy bonds if they choose to. maybe we get another ltro. the question is, are we going to talk about spain this week and next week and the week after or is it going to fade again? >> right. i think it's on the agenda.
bob, let's talk about what is going on with avon. coty increasing their interest in buying avon if coty is allowed to examine avon's books. avon rejected the offer saying the company is more likely to boost shareholder value with a new ceo. >> and they rejected it again actually as well this morning. just kind of saying -- a while earlier saying, yep, this is the same thing. i don't know why you would do the same thing twice. it's 23, .25. highly confident letter from jpmorgan. now avon has a new ceo. they got a new ceo. rejected at 23.25. it's not clear what these guys are doing or why they are both th
botherring with it. >> a lot of people at home respect jpmorgan. i get a highly confident letter from jpmorgan, they are thinking, they have all kinds of money. jimmy lee? why is that not important. with feel like we're confident. having done something wrong here, david? >> they are going to have a 10:00 conference call.
>> i mean, look at the nonsense of this. i'm sure avon is breathing a sigh of relief. coming back with the exact same price telling us that you want due diligence, we already told you no. we're telling you no again z it's interesting, what coty is highlighting is going to respond well, which was an issue for avon, an ongoing issue. >> if you don't feel comfortable understanding the value and it's strange. extraordinarily banker i've met with the ceo evaluate, byron, if you're listening. >> still to come here, falling into the gap, it seems like the
the fcc says google will connect information without permission and then did not cooperate. that brings us to this morning's "squawk on the street." us to the tweet. tweet us and we'll air your response throughout the morning. i have puzzled looks here on this anchor desk. >> well, i tell you, there's a great app, and one of the things that is so great about it, you get these google pictures of your house, so you know where it is. you lose your phone and it tells you where it is. i have a place in mexico. i've talked about it with you.
you've made fun of me about it. >> not many times. >> four or five times. >> is that all? >> you were talking about the cartel -- and i always love to see the picture of it. google has pictures of everything. so there you go. >> chasing after their phone in a cab and they can see -- >> get your kids' numbers and, boy, you know where they are every second. >> so 24. >> yes. >> i miss that show. >> me, too. i miss that show. >> wrong network. >> david? >> oh. thank you. up next, getting a jump on a big week for profits. i was speaking about cramer's house in mexico. cramer's mad dash is what is coming up. take a look at the futures. more "squawk on the street." bete numbers... ...and listening to your instinct duff & phelps finds the sweet spot that powers sound decisions.
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all right. let's than five minutes to go. time for cramer's mad dash. so many different plays off of the historic fall. >> right. today, ppg upgraded from neutral to buy. it's had a big run. here's the thing to know about this country. chuck bunch runs it. it has a huge amount of natural gas where it actually has factories. this is marcellis. a big explosion in margins. sherwin-williams had great numbers, too.
>> right. this has been a significant month. >> it is terrific. it's a very low multiple stock and i know chuck needs that because is he a big penguins' fan and they are being pancaked. >> that's the key story for industrial america. margins going up as a result of fuel costs going down. >> dow chemical, too. my friend talking about the rather explosive increase between the crack spread of et thain, which is nat gas, and ethylene. >> they are worried about enough money to be able to do the drilling and it's a one-way stock and they are getting killed.
chesapeake, chk, you'll see what i mean. it has been a nauseating decline. look at this. we saw raymond james take down the drillers. why are they taking down the drillers? because there's too much natural gas. there's not enough demand versus supply. >> we've got to go. demand-supply. keep that in mine. we have the opening bell. three minutes away. "squawk on the street" right after this. this is $100,000.
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trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. there you have it. the opening bell is ringing on this monday morning on wall street. take a look at the cnbc real-time exchange. exploration and production companies participating in the independent petroleum association of america. primo bio net, celebrating its listing today. certainly we've got a lot to talk about. caterpillar opening up by 2% higher, which is a nice gain there. it will be interesting to see if
that translates. seems like a cat-specific story at this point. >> i think we were talking about this idea of how important europe -- you know, europe -- everyone was worried going into this session on friday. >> yes. >> thinking that europe had to roll over. europe gathers strength early this morning it was pep tid ait gathers strength. we have become euro centric again and it is worrisome and -- >> it does a lot of different things and i think it diverts attention, it diverts money and i'd hate to think we're going to get back to that dynamic that we suffered the last six months or more around this time a year ago because it takes so much and
seems so little and we're not going to see so much more. it is worrying again about what is going on there. >> i look at this market and see how undervalued we are. how undervalued we are versus where we would be if we were not focused on a spanish bond auction. now, spain is big, italy is big, we're bigger. no one cares. >> each month that goes by we get closer to the election, the hard fought part of the election. the convention is still a ways away. and then tax-eggedon. >> oh, geez, the journal has gotten more negative than the times. they are smacking the heck out of wells and jpmorgan. i wonder how bad they are going to say citi is.
"new york times" doing remarkably good business. the press controls the perception. we are more powerful than i've ever seen. >> banks strong early on. citi gaining momentum. it's up 5.6%. wells fargo up 1.5. jpmorgan is the relative laggard. materials also trading very nicely in today's session. the etf that tracks material stocks up by .09% and we're seeing big gains by the like of u.s. steel. take a look at freeport-mcmoran. at the same time, citi lowering the estimates for copper, which i thought was interesting. they have an outlook piece on metals and they are more bullish. more industrial metals but they are upgrading freeport-mcmoran. >> 12 years ago, 30% used in the
united states. building in this country.ome i think chile -- there are refining problems and big chilean companies had to go in and buy copper. i think it's getter rarer and rarer and because the chinese are not using it, it keeps going down. >> they have to buy it elsewhere. >> yeah. >> does it mean that they are having a much more difficult time just mining it in latin america? >> i think yes. we know that indonesia has a giant, the grassberg mine. the government has tried to crack down on the mining exporting that goes to china. they feel like all that happens is miners come, they extract the goods, leave a black hole and indonesia does poorly. i like freeport. i like it on a valuation basis only. i think the quarter is going to
be okay. the company has had a long history coming on cnbc and telling the truth. they have a lot of capital. >> we should also take a look at nokia. operating at a fresh low. 393 a share. moodys cutting the debt, nokia's debt one notch. the question is, when does this -- people see the stock drop like that and then they are concerned about the actual company and they flee and et cetera, et cetera, et cetera. >> well, it's still too early to buy nokia. reminds me of the year 2000. it was too early to buy e-toys. >> that's a nasty company you mentioned. dominant suppliers of wirele phones in the world still. >> hey. do you remember when nortell
used to rule the world? >> yes. >> dinosaurs used to rule the world. >> did you ever see that movie? >> there were a couple of them. jurassic park. >> it's about the -- very scary. >> all right. is bob pisani here? >> he is. >> i'm right over your shoulder. >> glad to hear that you are there. what's going on? >> i've always got your back. >> jim had the right theme here. why is emp so pessimistic? there is concern about spain. clothing and building materials, garden material up 14% and my e-mail is clogged with comments,
come on, just because they pulled everything forward from april to may the good is bad news crowd it's just the warm and the s&p 500 is only 3% from the four-year high and it was two weeks ago and a lot of water has been under the bridge and a lot of worries about the europe and s&p, still under 3%. there is no decoupling. there is outperformance and we're doing less bad than the rest of the world. the markets are indicating that right now. >> bob, thank you. you know, february borrowed from march. march borrowed from april. i mean, enough already. can you imagine what happens if gasoline goes down and you and i
both know, bob, that we see brent peaking. if gasoline is going down, we're going to see another big move up in retail. >> this happened with the depreciation tax, too. everybody said, see what happened in january, it went down, moved the numbers forward and took advantage of the better tax credits from last year, it happened with nonfarm payrolls. the sort of thing is, good news is bad news story that's around because people are just looking at the glass as half empty right now. i prefer to look at it as half full. i'm a little worried about what is going on with the ecb. remember, last week, one of the ecb board members came out and said, we have the power to go out and buy bonds again with spain. we have done it. we could do it again. over the weekend the counterpart, the dutch -- one of the budutch board members said we're far from doing anything. spain is now -- ministers are already out here. the deputy finance minister was out here saying the ecb should
help us out here. there's a robust debate going on about what should happen. my suspicion is, if this keeps going up, yields on the spanish yield goes up, over 6% this morning, they are going to act sooner rather than later. on the weekend, the biggest story, my e-mail got filled up. china expanding the trading ban from 0.15% to 1%. a lot of people said that's very good news. that's going to enable it to appreciate even more. most people i talked to feel it's about politics. remember, there's a g-20 meeting coming. there's a meeting with the imf next weekend. and the chinese authorities want to make it look like they are being more flexible on the yuan. that's good news. china is growing up. they want to be an international curve currency. we're not sure how serious this is going to be right now. it's all about politics. i think it's excellent and, jim,
china is moving. >> yes. >> be wary about what you get. you're now going to get the chinese moving towards the yuan as international reserve currency? i'm not so sure that is great news for the united states. the united states, the dollar, should be the international reserve currency. >> totally great. what is interesting about bob, the bears are all over you. i think it's good. when the news came out, hallelujah, this is great news. great news for a possible ex be pangs of grow expansion in china. europe has been down for five straight weeks. you've got to think about that. maybe that would be broken. no surprise. just like the financials doing the best in the first quarter. that wasn't a surprise. i think that stranger things have happened. let's go to ship to bonds and the dollar. rick santelli at the cme. rick, take it over. >> thanks, jim. let's put a quick synopsis. retail sales was definitely a bit stronger. if you look at a chart, treasury yields moving lower, ten-year
around 196 and move higher on that data. there was some weak day. empire was the weakest in the six handle and it's been since november of last year. look at the response of the combined and s&p mini futures. pretty much straight up. dollar index, lost some ground. you know, when bob pisani references the pulling forward with the warm weather and looks at the other side of that, i'm the guy he's referencing. i think it's pretty apparent we're pulling forward the good weather news in retail sales. remember how subprime was dist by everybody including ben bernanke? spain was the fourth largest economy in the euro zone and what is going on, there is going to have an effect, pure and simple. if you look at today's tick data, that was a split decision. most people look at the net. that's a pretty good number. if you look at the net long term and got the securities side of this t. was very disappointing
even though we saw record amount of holdings in things like treasuries and increases by the likes of japan and china. jim, back to you. >> thank you, rick. spain has to stay on the radar screen. he says in t in chicago and we say it here. >> it's the same story over and over again. >> exactly. >> let's check out the latest crude and energy and go to bertha. >> jim, i know you've been following the development in the pipeline area, filing with the pipeline. it looks like the seaway pipeline reversal may come online faster, may 17th, two weeks earlier than specified and the tariff somewhere in the range of 250 to 275, according to regulatory filing. that means that brent premium will certainly start to come in and we're seeing that this morning where we're seeing more strength in wti and brent being a little bit lower this morning. overall, over the past week, a lot of funds cut their exposures
to commodities across the board. more than 10% when it came to net longs in crude. they also cut substantially when it came to copper. but also this morning we're seeing copper and silver bounce back as we saw the cme group starting this afternoon will cut its margins. that's giving a boost. nat gas also trading hire above $2. a little bit of a cutting back there, david, in terms of net short positions in nat gas. >> bertha, thank you very much. we got the financials in positive territory. not quite where they were at the beginning of trading but shares of citi after earnings still up 2.6%. wanted to turn the focus, though, to a company we will be hearing from. namely, goldman sachs which will report earnings before the bell tomorrow. you know, jim, we had talked during the greg smith fiasco, if you recall about that, about this larger question. is goldman sachs really losing clients? and i had argued that as much
criticism they have come under and at the end of the day the clients don't seem to be voting with their feet. in going back and actually looking at the numbers, it tells a somewhat different story and one we're sharing from goldman and then from one of the competitors, morgan stanley as well. take a look at the components of investment banking in terms of revenue that goldman had been putting up over the last four years versus what morgan stanley has been putting up. got old m and a. it's come down but goldman's lead over morgan stanley not what it was. by the way, i could have put up jpmorgan if i had chosen but they have been on the throws for so long. it's changing given the huge retail brokerage operations. equity undlerwriting. take a look there. as of the latest quarter, i took them through, as of the latest, 2011. when you move on as well to debt
underwriting, you'll see a similar story in that when it comes to debt underwriting. goldman sachs had a lead. it no longer does. finally, when you look at investment banking, revenues has been some movement of business. slightly from goldman to some of its competitors. because the lead that it had in 2008 and even in 2009 and even last year when it comes to things like that has dissipated to say the least. as you look at the performance of two companies. of course, you see that over the last year that goldman is still down 25% and morgan stanley has suffered more. >> gee, david, that's incredible. we've gotten so used to the idea that whatever is said or done, the piece by the smith, it just doesn't matter. the customers don't care. these numbers show, without a doubt, that customers do care. >> overall business, from '08, it's come down sharply. we know that in investment
banking. it's something that bears watching. let's keep an eye on it when we hear from goldman and morgan stanley. just crummy, crummy performance over that period of time. goldman's lead is gone when it comes to those key components of investment banking that do speak to the client. >> wow. >> we have to take a break here. google gets fined for data collection. if the map folks drove by wall street, what kind of twitter messages would you hope they caught? we've got your responses coming up. let's look at the early movers on wall street. seagate, and western digital. stay tuned. zap technology. arrival. with hertz gold plus rewards,
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also the other index that matters, the s&p is up. >> time now for "squawk on the street." google has been buying 25,000 for impeding the data collection street view project he can. s.e.c. says google collected information without permission and then did not cooperate with the investigation. we're asking you, if google were driving by wall street, what conversation e-mail or tweet would you most hope they caught? an occupier and a cop. perhaps google would find all of the insider traders. and jim tweets, film maker michael moore checking in with his broker. >> they should be discussing the stock split, whether it's a good thing or bad thing. >> google is down 2.5% at this hour. it certainly hasn't caught a break since it has reported earnings. >> the quarter was decent. there were questions and concerns about that plan.
>> and cost to issue the shares. >> right. >> and we had an analyst on friday, one in particular who disputed the notion but i don't know if other shareholders are buying into that. >> how about apple? apple keeps going down. >> apple is at 594. it's down by 2% so far. that's weighing on the nasdaq here. we are in the red versus the gains that we are seeing on the dow as well as s&p 500. there you have it in a nutshell. it's big cap technology weighing on the s&p 500. it's being offset by the strength in financial shares and caterpillar but technology is having a hard go of it today. >> and that's where people are. it's kind of stunning to see apple go down every day after seeing it go up every day. >> exactly. we'll see. trading day is much more young. much more "squawk on the street"
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six stocks 60 seconds, we kick it off with e-trade financial. wells fargo says it's fine. >> there were some secondary loan issue. if you think the investor is coming back, no. >> more love for home depot. >> better late than never. it's a big spring planning season. >> bearish note on wireless? >> yeah. they are talking about -- this is a gutsy call. that's going to hurt a lot of stocks. >> altera saying that it will go up on guidance? >> let's see the numbers. i like intel. >> alpha natural getting an upgrade on citi. >> it's thermal. look out. >> and cree, barclays says it has upside. >> well, every has an upside. it's a downside to me. >> for more, go to cnbc.com.
what is going on "mad money"? >> it's green week. we have a couple of greens. it's clean energy and clean harbors. they clean up the messes of oil. both have been incredibly hot stocks and this is speck, this is less speck. >> okay. we look forward to that. 6:00 and 11:00 p.m. on "mad money." in the meantime, another two hours of "squawk on the street" straight ahead. stay tuned. s... ...and listening to your instinct. duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services.
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welcome black to squawk on the street. hold builder confidence grows. it takes it back to january levels and the first decline in seven months. 50 is the line between positive and negative. the statement from the chief economist, david crow wrote, interest express by buyers in the past few months has yet to translate into expected sales activity. this is something that we've been warning about. good traffic, optimism, and the challenges in this market continue. tight credit, tough appraisals,
and competition are still barriers to recovery. current sales and sales expectations fell three points each and buyer traffic fell four points, this in the heart of the spring traffic market. gains in confidence, west unchanged, south down three points, and the midwest plummeting eight points. that's where we had been seeing some strength. let's head over to rick santelli. rick? >> we have february business inventories increasing .06 of 1%. that's matching the expectations of .08%. the big response of diana olick sector. the housing sector index taking a steam out of equities already coming off the highs after better than expected retail sales, weaker empire and trying to handicapped europe. interest rates now flirting with the lowest levels of the day after the jump they saw on retail sales. back to you, melissa. >> thank you very much, rick
santelli. let's go to the road map "squawk on the street." texas oil and gas ent traary clayton williams talking all things natural and natural gas. plus, fears of a need for a bailout in spain worrying investors here. we'll go live to the investors in spain and what it all means for your money. and good news at the gap. the troubled retail soaring more than 40% this year. but will the rally hold? the bulls and bears battle it out. > mattel came through with weaker than expected shares. it's one cent short of what wall street was after. revenues came in below expectations as well. among the reasons, weakest sales of the company's iconic barbie
and hot wheels brands. >> and next up, private equity giant kkr is mining for diamonds, according to london's sunday times. it's working on the deal to buy the diamond units of bhpbulliton and then they would merge the two companies. >> and mark cuban can download any ringtones he wants but then he may download an entire portfolio. he's taken a 7.4% stake in vringo. >> they say it's all about mobile. we hear that time and time again. have you used that? >> no the the rin ger on my phone is whatever came with the phone if you and i sign up to vringo, you will see a video that i have selected for you.
>> oh, really? >> yes. >> so you can just choose, i want to be honey badger when i call melissa? >> potentially. that's the appeal. obviously. >> it sounds very appealing. all right. let's check out the divergence in the markets. the dow is up triple digits. apple is down for a fifth straight session. trading below 590 a share. if you look at apple over the past week and a half or so, apple's losses are much steeper by a factor of two times compared to the s&p 500 recen ry david? >> citigroup profits were better than expected. revenue was below expectations and then revenue fell 2% for the quarter. shares are responding positively thus far this morning. had been up as much as 3.5%. showing 2% gain. anthony is an analyst at raymond
james who covers citigroup. anthony, characterize the quarter for me first off. was it as good as the market seems to think or more of a sigh of relief on the part of investors? >> a little bit of both. the actual revenue when you adjust for one-time items and cva, dva was ahead of our expectations as were the eps. and the eps beat was driven primarily by fixed income results. >> that can be a wild card, can't it, quarter to quarter. any expectation that that can continue? >> we had the tale of two halves, where the first half of the year was very strong for market-related revenue but the second half of the year, especially since the financial crisis we had in the summer sparked very low levels of revenue. the bounce back and below the
first quarter of last year. citi actually beat last year's very strong first quarter. >> all five of them have been enjoying what the yurn peen central bank was doing and the rally in risk assets. if that now turns around in the second quarter, who gets hit worst? >> good question. you know, we've looked at this quarter from the standpoint that the first few out of the gate will actually be the best reporters. you know, the market-related bounceback obviously bodes well for citi, jpmorgan, goldman, bank of america, merrill lynch. as we go through the quarter, we're going to be hit more and more with the headwinds that are confronting the industry. not only do you have international volatility but you also have still a very low interest rate environment and a relatively weak economic recovery.
>> so anthony, all of that said, what is the chance of citi getting an approval by the end of the year? >> i don't know by the end of the year. we'll see. citi was pretty aggressive. when you factor out earnings potential, the build up in excess capital at city is actually greater than jpmorgan. >> is this a primary reason why it's underowned insurance institutionally? i'm trying to understand why investors haven't come around to the citi story like they have with others in the same space? >> part of the reason is they were attached to the hip of the federal government during the recession. if there's one bank that almost failed, it was citi. the government had a big ownership position. it spent a lot of time below that magical $5 number. >> you have citi holding the assets coming down there as a percentage. some of the so-called bad assets if you want to call them that. what drives the stock, then,
over the next few months during the course of the next year, in your opinion? >> stabilization in the eu citi gets half of their emerging markets from latin america and asia. >> right. we've talked about that as well. it's a positive and something vikram pandit likes to point to, hey, we're not a domestic bank like a bank of america or wells fargo. but alternatively, it can come back to bite them, can't it? >> exactly. it's an area of volatility. sometimes the market can shrug off negative news from spain and maybe when profit making is the mode, the market can overreact to that same news. >> anthony? >> your price target is $43. that's 30% upside from here. can i run with that even if i'm concerned, therefore, about what is happening with housing? we have diana olick with her
latest housing figures. the situation is clearly poor and you still have a huge mortgage book, of course, at citi where bullets will have to be bitten down the line. can i still run with this $43 price target? >> i think the price target is actually conservative. the tangible book value will be much closer to $52. if the mortgage market in the u.s., if the housing market rebound, it continues to go slowly or actually gets worse. citi has much less exposure than jpmorgan, bank of america, and wells fargo. however, that stock should also share in some of the pain. when we look at the first quarter results to date, and jpmorgan and wells are big mortgage lenders. >> delinquency has been coming down. anthony, appreciate it.
>> breaking news on the supreme court scott has all of the details. scott? >> the u.s. supreme court declining to give the former enron ceo another shot at overturning his 2006 conviction. remember, in 2010 the supreme court set it back to the supreme court on the theory of prosecution. the appeals court said it was a harmless error. went back to the supreme court and declining to hear the case. he is not done yet. the court that alleged prosecutorial misconduct. >> back to you. still ahead on the program, where crude is still under pressure today and it's about china. we had a bad week last week.
we hover around $102 a barrel. what is the outlook? we speak with clayton williams who first drilled an oil well 52 years ago. with free enterprise puns like hugh and crye, and smash records. and one saturday a year small businesses remind a nation of the benefits of shopping small. like the way david kaplan at shell lumber shows you how to use a chop saw. then invites you back when the warehouse becomes the community theater. or the way camille russler of ever after travels the journey from despair to bliss with every bride to be. on small business saturday 100 million of us joined a movement... and main street found its might again. 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.
market cap in the past week alone. google is trading lower today down by 3% and qualcomm down by 1.3%. this is why we're seeing the nasdaq trade lower as we have the s&p and dow in positive territories still. >> 64 points higher on the dow. let's get stocks to watch. 44 minutes into trade. proctor and gam gel raising the dividend by 7%. the giant has increased its quarterly payout for 56 straight years. madison square garden downgraded to neutral. and domino's pizza, the firm sees expansion. oil is remaining above the $100 mark. clayton williams is joining us from the oil and gas investments
symposium here in new york. clayton, it is a pleasure to speak with you. >> thank you. >> what is your forecast for the average price of crude for the year? >> i like to go to the bar and have two or three drinks. most likely in the neighborhood of 100 to 105. >> well, let me ask you how much money do you need to have from oil in order to make money on your wells? because moody's just put your debt on review for possible upgraded given the high prices of oil. >> well, the question is talking about keeping the wells i've already drilled going is not all that much. building a new well, probably $100 plus to make a profit in drilling new wells under the current price environment. >> tell us about your agreement with chesapeake energy. chesapeake is a company that's been affected by the oil. tell me how much you stand to benefit.
>> first, natural gas is plentiful. that's why the costs are low. supply and demand is working so it's good for -- we focus on oil. >> mr. williams, how do you just out of interest, we've got a bit of a commotion down here at the moment. how do you decide when to drill horizontally and when to drill vertically? >> i'm sorry. i'm not hearing you with the background noise. >> we have a lot of noise down there. >> a medal of honor is on the floor of the exchange receiving a standing ovation. can't see him but heard that we have that. that is what is going on there on the floor of the nyc. >> we're going to leave it at that. thank you for your time.
we appreciate it. >> clayton williams, ceo of clayton williams energy. still to come -- there's melissa. now back to you. is the street's love affair with apple on the verge of a breakup? why one investor says concerns over labor conditions at tech titan factories has him rethinking keeping tim cook's beloved company in his portfolio. with the spark cash card from capital one, sven's home security gets the most rewards of any small business credit card! how does this thing work?
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spanish yields above 6%, as you can see. not looking pretty. it's not as high as we were at this point last year but it's a major concern at this point and in particular we are concerned about the european banks. it would appear that they have won their battle with moody's. the downgrades will not come this week. they say they will do that in may. but barclays has a note out today about the european banks recapitalize and it's suggesting that the bill now should be 120 billion euros. that about 18% recapitalization. >> yeah, the ltro did so much to enhance liquidity and what was seen as a crisis point towards 2011. the question of balance sheets not adequate to withstand continued stress test, which
nobody had confidence in, compared with the stress test that has taken place now in this country a number of times where it really has helped instill confidence into the markets. >> and we see this story play out again and again. more concerns about europe translating into weakness here in the u.s. that's what we're seeing today. citigroup holding on to a gain but well off the highs of 3%. it's now higher 1.8% and it looks like we are losing the financial sector overall today. we had very strong gains at the open off the back of citigroup. we are losing those as the session goes on and that's in part one reason why the s&p 500 is lower along with the nasdaq at this point. >> having said that, of course, if you have an indication from the european central bank that they are willing to come in and buy spanish bonds, you can turn this around quickly. >> he's looking to win it but he may lose it. >> he broke the silence on the ecb. maybe they will shift. >> maybe they will.
>> we've been wondering, again, talking about liquidity problem versus a solvency problem and that's going to be with us for years and are we going to revisit it every day here in the u.s. again and see the impact on our markets or push it to the side once again and get it back to business in that continues to be a key question. >> the so-called buffett question. eamon javers has more. >> it's a procedural vote in the senate. they are not expected to get the number of votes that they need to move the buffett rule forward. nonetheless, democrats on capitol hill and over at the white house would like to get republicans on the record voting against the buffett rule as you remember and our viewers remember, that's the rule that says if you're earning more than $1 million a year, you ought to be paying more than 30% in taxes. the president's been on the
campaign trail talking about that and secretary tim geithner pushed back against critics who say that the obama tax proposals will actually hurt the economy. take a listen. >> there is no basis of evidence and experience across countries that these proposals will be damaging. think about it, if you ask americans to pay a modest share of their income, who are you going to ask to bear that burden for the deficit reduction? are you going to ask other americans to pay taxes or cut their benefits on medicare? because that's the tradeoffs we face. >> so, guys, we're expecting that this bill will be dead in its tracks but that's not really what this is all about. it's about a political fight going into the election season this year. democrats like this one as a talking point going forward. back to you. >> and so that you can pin on to
each member of the senate going through the election how they voted specifically on this issue? >> exactly. and so senate campaigns as cocr the country will be able to use that in campaign ads against them saying, wait a second, this guy wants warren buffett to pay a lower rate than his secretary. that doesn't make any sense. republicans will feel like, you know what, this is a good vote for us because we're standing against a tax increase. so it cuts both ways. >> it was interesting, eamon, to say that president obama did pay a lower tax than his own secretary. >> that was interesting. the president put out his taxes on friday revealing that he earned less than a million dollars a year so he would not necessarily qualify for the buffett rule under this proposal but in an interesting rate there, and the president making a base salary of 400,000 and then a couple extra hundred grand from his book sales.
>> david faber has beaten you there. how many "new york times" best seller have you had to date? >> two. but -- >> did you get 200,000 -- >> no. having a best sell other on "new york times" is not what it once was. i'm afraid not. >> spain con taj general fears sending european stocks bank sliding. is pain the next domino to fall? should we be concerned about italy? we'll break it down right after this. >> announcer: want more "squawk on the street"? no problem. talk to us any time. e-mail us at firstname.lastname@example.org. follow us at cnbcsquawkst. omnipotent of opportunity. you know how to mix business... with business. and you...rent from national. because only national lets you choose any car in the aisle.
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sontag. >> let's look at where we are for the major indices. the nasdaq had done three times better than the dow. it was up 15% year to date whereas the dow was up only 5. google and apple lead the retrenchment. the breadth of the move for cnbc is relatively evenly balanced advanced decline here at the nyse. if i take you back uptown to the nasdaq site, we go out to chicago for more of the straightest moves. bull and bear partners at the cme group right now, jack, i was surprised we saw such a strong gain at the europe. is this europe and the looming concern about the auction later this week is weighing on the markets. >> and there is. there's a little concern. a lot of it is still a liquid. look, a lot of the selling that we have been noticing is coming
from the european time zone. they are going to need it back home. let's face it. yesterday is really when we should have been worried about europe. i don't think that these european news is going to be bearish going down the road. it's almost a buy-buy scenario. they have baked in a scenario here with italy and spain. you sit crooked but talk straight. they have already solved the problem in europe. it's a question of implementing the template that they have already created. the whole idea with greece, that's the one thing to keep in mind. moving ahead, we have to concentrate on where the growth is. remember, 8.1% is ahead of the 7.5% that they projected. all of these things are bullish. let's see -- the one thing on top of all of this, dollar is
doing great. so if we can see a decoupling between seeing the dollar going in a different relationship i think we're going to be in a great shape. >> technology is really the pronounced loser in today's session. jack, what are you hearing? i have been a fan -- a big winner for the year. here we are sitting with apple. >> it's funny how you get a 3 and 4 and 5% callback and then all of a sudden everyone is doom's day. each one of these pullbacks needs to be bought. it's a question of whether it's a 3 or 4% pullback or a 10% correction. these are multiples have of what they were, if you think about it, ten years ago. they are solid corporations. corporate america, especially in tech land is meaner and leaner than ever before.
>> jack, how do i square that with the fact that the economies are so bad they are on life support from the central banks? >> well, you know, it's funny you say that. it's the central banks adding in liquidity. look, they have already come out. deflation and disinflationary pressure are going to be resistant no matter what. it's plain and simple. they are going to feed us inflation. they are going to force it down our throats no matter what and because of that we have to be exposed to the market. with a 2% ten-year is not the way to do it. that's losing money without knowing it. >> jack, the name of your firm is bull and bear partners. today you sound like bull and bull partners. >> we always sound like bull partners. >> jack, thank you. it's a battle of the tech bigwigs. oracle and google set to head face-to-face over claims google violated oracle's intellectual
property rights. the jury selection is getting under way today. jon fortt has the story. >> reporter: love these larry versus larry stories. so many different ways to take this. this trial is basically about java, as you said. oracle says that google is using it improperly, should have asked oracle first. should have used it in the way that it's using java in android. oracle, of course, no stranger to the courtroom. the question is, a lot of legal experts say how big the damages could be here. this has turned into more of a copyright case. it could be in the billions or millions as far as what google might end up be required to pay. where are legal experts saying this is an issue google might have to pay? one of the software guys at
google sent an e-mail in 2010 saying we need to negotiate a license for java. it was a strategic e-mail where they say we're going to talk to the cfo at oracle. we really don't want to move to any different option on how android is built. but we want them to think we have other options. really what we need to do is negotiate a license for java. not only that, before that, there was an e-mail in 2005 saying there were a couple of options. or we can just do java and make enemies. well, that's what they have done. the trial is expected to be eight weeks. mostly copyright issues remain. and it's an issue of courtroom maneuverings. oracle wants the e-mails to come out early so jurors thought that they had license to operate java. back to you. >> jon, we should point out, android, of course, is the most prominent form of operating
system for wireless phones, correct? >> reporter: absolutely. they are activating around 800,000, 850,000 android devices per day, ak0ccording to google' last count. it's huge. they will probably set up google as the microsoft in the mobile era and not in a good way. >> okay. jon fortt reporting for us. >> the galaxy phone is coming out may the 3rd. it's the main challenger to the iphone? >> yes. >> and in terms of motion -- people love the galaxies in the same way that they love their iphones. >> you wrote that down. >> my list of events. >> everybody should rush to the store on may 3rd , it looks lik. >> i was just saying, it was released. >> bring it in. >> i want to see what it looks like. spanish bonds breaking above 10%. we are just an hour before the
european close. let's go to julia live in madrid with more on the story. julia? >> reporter: thanks, melissa. ten basis points wider than current levels. we've seen them come in as the u.s. markets started trading. it certainly raises questions on whether the ecb is bringing it back. jpmorgan says if we see ten-year bonds above 6.5%, but analysts are likely to point out that the new ecb president is far lessen th enthusiastic. they need to get the fiscal house in order and we are not seeing the widespread risk aversion. the benchmark is quite high. sentiment around spain does not help what we got from the ecb saying the spanish banks took over 300 billion work of
liquidity from the ecb in march. we've gone into the sovereign bond market and it reemphasizes the impact on the banking sector. key risk event is going to be a two-year and ten-year auction on thursday. that's what the market is focusing on and possibly why we're seeing the pressure in the market. and the concession that the government had to get to get those bonds away. what's clear is that they are going to be closely watching as are the markets as we continue here in spain. simon, it's back to you. >> thank you very much. let's track north through europe and link in with london and barclays european economist. jack was on the program a few moments ago. he was very bullish about why where markets are likely to go and one of the arguments is, if spain really gets into trouble,
the ecb will simply buy its bonds and there will be no great fallout. can we rely on that happening? >> i didn't think you can rely on that, simon. and the other problem with that is, if the ecb steps in. now we have the president established really with greece, which is that if the ecb is buying the debt, he has some kind of seniority attached to that and the markets will not take it the right way. i think you need circumstances for the ecb to be doing that. i think where you could see some involvement in spain, potentially it could be if the banking sector is to need a lot more capital and if somehow the government is finding that there is more capital needed, then perhaps the european institutions, not the ecb but, for example, the sm could step in there and provide some additional support for spain. clearly we do have as well, you
should be aware as well very important dates coming up. the circumstances are way better than you had in the second half of last year. we've come a long way, too. and also the level of buying that we see, particularly by banks, helped by the ecbs ltros. on sunday you have the first round of the french presidential election. on may 6th you have the greek election. there's a lot coming through. >> julia describes a situation in which the spanish appear to be basically involved in a race against time to keep their bond market supported in confidence. however, paul krug man writes, this is just insane, this austerity. he says, european leaders seem determined to drive their economy and their society off a cliff. is he right?
>>. >> that's a classic good man argument. the question is, what are the alternatives? we have a lack of trust within the euro zone itself and therefore germany is unwilling to go out and by spanish debt. they want to do their homework and the problem is in spain, last year the government in spain was promising everyone that it was going to get the deficit down to 6% of gdp by the end of last year. and then it turns out it was 8.5%. now, it's not as bad as what happened with greece but it's significantly eroded the credibility of the spanish government and so i think the view of many countries is that the government in spain really needs to work very hard at achieving the fiscal adjustment that it's committed itself to here. just in order to show that it's on a sustainable debt path, it
has to make the adjustment. it's a question of timing here. but it does have quite a lot of support at the moment. you still have some impact coming through, i believe, from the ecb's ltros. the bank is capable of buying more in the way of debt in spain and italy. >> julia, what people here in the states want to know is are we going to be yet again focused for the remainder of the year on spain and back perhaps to italy if spain gets worse or is there going to be something in the near term to some of the things you're discussing that are going to not solve the problem but push it aside from the consciousness of u.s. investors for some period of time? >> i think you're right. we are making progress here. a really important moment was back in december when the germ nan chancellor committed herself inside europe. we've seen very tough measures coming out of the italian government here. we've had the resolution to some
he can te extent the problems in greece. we have the new imf program in place. bit by bit, things are getting taken care of. the key thing is the growth outlook. it's going to depend on the international growth outlook. if the u.s. is going to continue growing in a reasonable way, if asia is continuing to growing here, then i think the area will gradually start to move into positive growth. so you buy next year. and in that case, a lot of the relief will start to emerge in the markets. it's going to be very difficult. i can't promise it. it's not easy. there's a lot of hurdles to cross. >> and, of course, a north-south division. there julian, thank you. a reminder that europe shuts off in the next 45 minute and we'll bring you the close at 11:00
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street. some are falling in love with the gap. some are questioning whether gap gains are sustainable. two top analysts, adrian tenant, our bear is laura. great to have you both. laura, i want to start off with you. surely the gap had a very troubled story. 20 consecutive quarters of same-store sales. the two latest months have been very, very strong. if it looks like a duck and quacks like a duck, why isn't it a duck? why isn't this a turn around? >> it can quack like a duck for two months but in april it's going up a comp up 8% a year ago. there's been a pull forward from a year ago with lovely weather. the easter pull forward had an impact. let's see how the april sales pan out. i think longer term there's been real damage to this brand and turnover in management that's not coming to a close any time soon. >> adrian, laura makes a good
point. are we getting too excited about something that is not proven to be sustainable? the weather has been a huge factor when it comes to sales of color. surely spring wet helps on that front and the damage to the brand and perception of the gap may not be there with shoppers again. >> this is what i would say on that. to the extent that the gap brand, you still see people trafficking through all three of the brands that they have. gap, old navy, and banana republic. the attention has been on the namesake gap brand. when we look at march and april, because of the easter shift, we should look at them together. there's no question in my mind that you're probably going to see a significant 6 hb 00 to 800 points deceleration. if you look at them together, it will still be a solidly positive comp. >> at the same time, adrian, i get a lot of e-mails from banana
republic and the gap. it seems like everything is always on sale. if i wait a month it will go on sale. i don't have to pay full price. are we willing to see price? are we seeing the discounting under control? >> the discounting is rampant across the sector. it's just the way we've seen over the past couple of years, buying closer to need and buying on discount. you have to look at it on a comparative year on year basis. as you get into the back half of the year, the cost inflation coupled with way too much inventory should allow them to have fewer markdowns at that critical third and fourth when they are losing money or breaking even. >> laura, i want to go to competitors here. who poses the biggest threat to the gap at a time when it is grasping and firming up its turnaround? >> we need to think about competitors not just to the gap brand but old navy which just lost its ceo in january. fast fashion changed the game here.
h&m is out with good results in mark. even the department stores getting better is interesting. apparel is more competitive than it's ever been. we feel like gap is still looking for its place in the landscape. >> at the same time, you did make it seem if we got a good april comp number, you might be persuaded that this is a turnaround. are you on the fence? >> no, we're not on the fence. i'd like to see margins and a margin recovery that i think the street is betting on at this price. you can buy gap shares the same multiple as bed bath and beyond and william sonoma. >> bed bath shares are at record high. if there is one caveat on the stock what would that be? >> the one caveat is this is entirely a comp-driven story. want to make one point in 2010 the company did a 13% margin on $330 sales per square foot.
last time they had done that was 2004. they were doing $430 a square foot to do a 13% margin. the structure is ready and able to leverage. just amatter if sustainable. >> thanks for your time. >> thank you. did you see h&m, same-store sales are up 16% in march. >> that is a retail juggernaut taking hold around the world, too. it's an amazing story. >> i haven't done much shopping lately. >> you have a nice suit on. is that new? >> no. but thank you. >> looks good. >> thank you. appreciate that. still to come this morning, why one firm is rethinking its investment in apple. the reasoning may surprise you. first, rick santelli, what you're working on for the next hour of "squawk on the street." >> today is a great test for all you traders out there. why? we had various forms of domestic
data. that was alongside spain and europe. housing, weather issues and we'll continue to monitor why the market reversed so much this morning. maybe the common denominator is debt. only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz. standard keyless access, and standard leather-trimmed seats, then your choice is obvious. the lexus es. it's complete luxury in a class full of compromises. see your lexus dealer. (sfx: car garage sounds) today my journey brings me to charlotte, north carolina, where i spent the day with geico driver casey mears. i told him the secret to saving money on car insurance. he told me the secret to his car setup. first he adjusts... first he adjusts... (sfx:engine revving drowns out gecko's dialogue) then he... then he... (sfx:loud drilling noise continues to drown out gecko's dialogue)
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take a look at stocks hitting new 52-week highs. home depot and lowe's on news of an upgreat. sherwin-williams, kimberly-clark and intel hitting fresh one-year highs. up next, tweets from the street. google under fire from the s.e.c. if google were driving by wall street or park avenue, what conversation, e-mail or tweet would you most hope they managed to catch? ♪
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♪ okay. what's your secret? [ male announcer ] the united mileageplus explorer card. get it and you're in. time for "squawk on the tweet." google was fined $25,000 for impeding the investigation for a street view product adding google collected personal information without permission. if google folks were driving by wall street, what conversation, e-mail or tweet would you most hope they caught? circa 2006, what is a credit default swap? tweet from larry page, i need $25,000. anybody have change for a
billion? bernie to ruth, and the offshore account number is -- that's good. we were saying today's question was lame. >> yeah. >> but that last one saved it. that was funny. let's get to it. . welcome to hour three of "squawk on the street." >> we're going to need comprehensive tax reform that makes et simpler, fairer, more competitive and equitable and generates more revenue. three parts spending reduction and one part revenue. >> one giant tweet for mankind. >> i didn't want to make a big deal out of this. >> there are two different futures. one is dramatically higher taxes to pay for obama care and obama's larger government. the other is to get rid of obama
care, bring back obama's overspending and not raise taxes as a percentage of gdp. >> i think this is a worldwide franchise that is undervalued that the federal reserve didn't do any favors for. >> caterpillar is down in a straight line. i think this is a line in a sand that maybe cat is done, done going down. >> there you have it. the opening bell ringing on this monday morning on wall street. >> can you imagine what happens if p gasoline goes down? we see brent peaking. if gasoline is going down, we are going to see another big move up in retail. >> home builder sentiment drops three points in april to 25 on the national association of home builder sentiment index. >> i think citi was probably a bit aggressive. when you factor out earnings potential and you go out over the next three to five years, the buildup in excess capital at citi is greater than jpmorgan.
>> good morning. welcome to the third hour of "squawk on the street." let's get a check on the markets. we had been in the green, now s&p and nasdaq trading to the downside. s&p hugging the flatline. financials are turning to the negative. big cap technology putting pressure on the overall indices. big oil seeing gains today. total leading the rally. exxon and chevron seeing modest gains today. big cap tech is what we are watching. shares of apple and google slipping. both stocks down sharply. >> time for the road map. markets bouncing back to a certain extent after the triple-digit loss last week. barry will be here to help you navigate the ups and downs of a volatile market. a fund manager who owns shares of apple, but thinking about dropping all of them.
see how things wrap-up overseas. a tough day today for many of the tech issues. the latest where we are on the likes of google, apple and facebook ahead in the show. >> we've got to get to gary comiskey taking a look at the facebook hype ahead of the ipo. >> i don't know if it's hype, but i did receive something in the mail this weekend. it reminded me a lot of what it was like at the time when google was coming public. i feel like we almost must do a public service announcement. take a look at the cover of this. i blocked it out. it looks like a magazine, maybe a research piece. it says it costs $ .95. let's take it off the screen. i don't want to give this publicity. you're going to see a number of things that will come to you saying that this is an indirect way to play facebook. this piece right here, which again looks like a research
piece. talks about getting in at the venture capital levels. they mention bulletin board penny stocks here. this is unfortunate. the s.e.c., while the registration period for a company going public is so regulated and under such rules that have to be followed, something like this could be put together put in the mail. it says here, "this publication does not provide an analysis of the company's financial position. the financial position and all the information regarding -- i'm not going to mention the company's name -- should be verified with the company." they were paid $1,500,000 to marketing vendors to pay for the cost of creating and distributing this robert report, including postage and printing. this is unfortunately something you're going to see quite a bit of. read through this, you're going to think it's a research report. please, we saw this when google came public. do not be fooled.
>> caveat emptor, right, gary? >> you got it, melissa. >> check in with rick santelli. time for "the santelli exchange." >> thanks, simon. things are simple in the market's eyes. it's the interpretation where it gets confusing. this morning when we were releasing the data, you could see clearly 8:30 eastern the better than expected retail sales most certainly put a real after-burner on the s&p futures. we saw the empire index muffed that down just a bit because it was the weakest since november. when you take a step back, the 10:00 eastern number, national home builders index, that did it. weakness there, weakest number since january just shows us front and center that whether it's spain, whether it's europe in general or the u.s., there's
issues with weather the market is smart on it and most likely affected housing. the other common denominator that's going on in housing and we have two more big data points on housing. tomorrow we'll have permits and starts, thursday we'll have existing home sales. we'll round out this picture. the byline is debt. it's foreclosed home, student loans, the trillion dollar mark being crossed, how are these debt issues going to resolve themselves? there are positives to the economy. you can say we have close to 9% unemployment. we have 91% plus employment. the issue is that the market is trying to assess when a home builder goes up, is it because of a speculation trade that housing is going to get better or is it a leading indicator? in the end it is simple. there are questions about weather and questions about debt. first one we'll know more about
in the next two or three months. latter, we'll have to look toward our neighbors in europe to see how it ultimately turns out and see if our political class is going to do a better job than the european bureaucracies. in the end, the market will have an easy job after the weather. we'll continue to see housing is going to be a drag. that probably isn't going to change any time soon. back to you. >> thank you, rick santelli live from chicago. >> stocks mixed on the heels of suffering the worst decline of the year. barry knapp is head of u.s. equities at barclays capital. in terms of what we are seeing today, it seems europe crept back on to investors' radars. is that warranted? we see the spanish ten-year yield go up above 6%, is that something u.s. investors can tangibly be worried about? >> that's right. it's interesting. if you watched what happened to the volatility markets through the january and february time
period, as the vix fell sharply to a post crisis low as recently as three weeks ago, downside puts skew cheapened up a lot. term structure normalized, correlation fell. almost as if investors took that contagion risk from europe and assumed it's gone, set it aside and forget about it. that was never likely to be the case. banking system has three issues in europe. it's undercapitalized, unbalanced. they have liquidity and funding problems which the ltro goes some way toward resolving. there are serious flaws. there are problems for senior creditors and equity holders. assets haven't stabilized because the growth outlook took a turn for the worse in march and europe. sovereign debt spreads are
widening again. it shouldn't have been taken down to the level it was. >> cut through all this, if you would. boil it down. for the bulk of the first quarter, the trade that worked was buy equities, sell bonds. are we saying we are reversing that or are we broadly still where we were? >> no. i think we are reversing it. if you think about the way the market has reacted at the end of the various fed programs, qe-1 and qe-2, that's when i started to get people pushing this argument that stocks are cheap to bonds right at the point when the fed stops purchasing bonds and that portfolio balance channel isn't as effective as it was. there is the stock, the flow and the anticipation of the stock and the flow. right now the broader trend has been for lower pes.
the fed unlikely to be able to commit to another program. stocks are going to get cheaper to bonds again. >> we are to believe all of this is going to reverse, should we believe correlations will come back into the market? when you say overweight technology, energy and health care, is there really beta in these sectors versus the others? or is this simply relative outperformance in a correlated world? >> correlation is definitely rising again. short term measures of correlation have risen a lot. we really, i would have to say at this point in time, the dividend payers and defensive names look better almost than any cyclical sector. those energy and tech are two of the cheaper cyclical sectors. we have a slight skew toward defensiveness because we don't think the sell-off is going to be as deep as the last two years. from a short-term tactical perspective, we would clearly be defensive right now. >> how far do you think the
equity market will fall? >> we are thinking 10%. >> wow. >> as opposed to the 15 to 20. >> 10% from where we are now? >> no. 10% from the top. 1420 down to below 1300 to us makes sense. >> all right. barry, thanks for your time. appreciate it. barry knapp of barclays. >> one fund manager ready to drop all his apple stock. ♪ ( whirring and crackling sounds ) man: assembly lines that fix themselves.
♪ oh mama i'm in fear of my life from the long arm of the law ♪ >> we are keeping a close eye on apple which is down again today, dragging down the nasdaq with it. technically we could be in real problems here. of course, most analysts are still bullish on apple. concerns about the labor conditions at its largest supplier has one investment firm rethinking its position. bennett freeman is senior vice president of sustainability and research policy at calvert investments. good morning, mr. freeman. >> good morning. >> what is the problem as you see it? >> the problem is that while apple is a great company with tremendous product innovation, it does face serious issues around labor rights and working conditions in its supplier factories in china. we need to see apple step up and
deliver on the commitments it's made in recent weeks to really improve these practices. >> mr. freeman, why was it not a problem when we had so many reports of suicides at the box con factories and it's only a problem now after the stock has given up its record high? >> i don't think there is a direct correlation there. the problem was magnified by tremendous coverage in the media a couple of months ago led by "the new york times." at calvert, we've been aware of apple's problems with suppliers in china for some time. as we do with many companies that we own, we engage with the companies to urge them to lift standards and improve conditions. we expect apple to do so. >> you have actually engaged with apple management about this. what have they told you? >> we have and we continue to do so. they made public commitments
that we expect to be reiterated and reenforced, that they will work with fox-con to raise workers' wages and reduce excessive overtime at their factories in china. >> it makes it sound as if you're not going to get rid of your shares. apple is responding in a satisfactory way. you said before you knew of these labor issues for years now, for a while. why didn't you get more active back then or were you? why wasn't your propensity to dump your shares just as strong then as they might have been a couple of weeks before you engaged with management this latest go round? i'm trying to understand where you draw the line. especially when apple as a stock, i would imagine your investors would be quite upset if you dumped the shares prior to the shares hitting record highs. i'm sure your fund as many portfolios, would have suffered as well in terms of returns. >> we are not dumping our shares
in apple. we are reviewing our holdings in apple as we do with our countries, particularly when there are controversies. we have been aware of these problems. we've engaged with apple before. we continue to engage with apple. commitments have been made here. we expect those commitments to be implemented. the proof is in the pudding. if apple is going to continue to be such a great company with such an iconic brand around the world, it has got to be a leader not a laggard when it comes to labor rights and working conditions. >> mr. freeman, thank you very much for your time. bennett freeman from calvert voechlts. >> thank you. coming up next, how booing is being affected by the tornados that swept through the midwest this weekend. and counting you down to the close in europe only about ten minutes to go. this at&t 4g network is fast.
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a primary boeing supplier took a direct hit from the swing of tornados that swept through wichita this weekend. phil lebeau joins us from chicago. >> this is a primary supplier talking about spirit aerosystems which is the old boeing wichita. it runs that facility, about 11,000 workers there. they are suspending operations through tomorrow as they assess the amount of damage they have there. number of their structures took a direct hit from the tornados. they say their manufacturing capabilities, however, they remain intact. what they need to figure out now once select and gasolines are all checked is how quickly can they begin at least spot production? that's why we are seeing shares down fractionally today. impact for boeing remains to be seen. the company says it's too soon
to know how much this delayed production of these fuselages will have in terms of hurting their overall production, primary in the 737. the full fuselage coming from spirit aerosystems. they upgraded to 35 737s per month. boeing assessing if they have to change that number temporarily. as you look at shares of boeing, it is down only fractionally today. i think once everybody gets a sense of how much of an impact this tornado damage in wichita will have on boeing's overall production, then we might see some impact on the stock. so far today, they're still in a mode of let's see how much production will be impacted. >> any update from the company as to when they might be able to restart? they said they are suspending operations through tuesday april 17th. >> my guess having lived in wichita and covered boeing when it was there and seeing a number of tornados, it's going to take at least this week. you have to have electricity.
some of these buildings, the walls and roofs have been stripped off. even if you can make the building partially where it's structurally safe to go inside, then you begin spot production. >> in terms of cutting down on the turnaround time once operations are restarted and parts manufacturered, typically these parts go by rail to seattle. >> they ship nine per week out of there. it all depends. the problem is not shipping them out of there. the problem is how quickly can you produce them within those facilities in wichita? you've got to get the electricity. they don't have phone or voice mail capability within the system there. they took a direct hit. once they get all that in place, then they can begin production. i would be surprised if we see them go to full production any time soon. >> we are focusing so much on the physical damage to the plant. it is important to note there were no personnel injured, correct? >> and they were working at the time. there was a skeleton crew but they were working. the evacuation worked exactly as it should.
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♪ it's raining again we are counting down to the close across continental europe. simon standing by the wall. we'll monitor the action. >> headlines actually look good coming out of europe. if you look to where the indices are sitting at the moment. that masks an underlying weakness and persistent problem with spain. take a look where the session chart is for the major indices. you'll see during the course of the session, if anything we managed to move slightly higher. the open in wall street has assisted with that. partly one of the reasons why europe looks as strong, we had a power deal come through today. a big power deal, $11 billion. french utility gdf buying the
30% of international power it doesn't already own. a lot of the markets, you see those powering gas supplies that are doing well today. they have a heavy weighting. though are masking the weakness within the banks. i want to show you where we are with the spanish yield. that is critical. thursday we learn is when they will auction the two-year notes and ten-year notes. today we are quite clearly above 6% on the yield. we've been there before. we are back up at levels we had at the end of last year and huge concern about whether they can get austerity through today. the government talking about how it's going to ring fence what goes on on the regional level in spain to try to get the cuts. i'll be aware many people perceive it as a race against time. today the spanish market, the spanish stock market which friday fell 3.6%. didn't go anywhere. it couldn't get a lift at all. now down 15% year-to-date. a lot of the spanish banks not under pressure today because they lost about 1/3 of their
market capitalization coming through the course of the year. what is under pressure today around europe are the other major banks. let me take you into france. we are not going to get the multinotch downgrade from moody's we feared we would get from the banks. they succeeded pushing that back to may. barclays are talking about the need to recapitalize. possibly 120 billion euros over in europe. they are suggesting within societe generale, that could be 40% of its existing market capitalization. over to london, how some of the uk banks fared today. barclays is suggesting a royal bank of scotland, need to recapitalize in the region of 33% of their existing market capitalization. yes, we have a focus where we are. we have a focus on italy and spain, but the underlying reason for that and the way it may
impact this year is on the big banks. that's a calculation how they believe they should recapitalize now without further losses from the italian and spanish bull market. >> we are mirroring the european session. >> let me pay service to this map here. it is really just the spanish market that is negative. the rest of europe has risen. it's not just the power of the oil and gas companies. german automotive rallied in frankfurt. we have to head to gary. >> sometimes the timing on these reports ends up being perfect. simon talked about the equities, talked about a number of markets over there i read something interesting this weekend. if you took a look at the lehman cds prior to 2008 and eventual recovery, 27 cents on the dollar, and you look at cds out
there. cds, insurance, to buy insurance, credit protection, i want to look at the big u.s. banks and european banks. let's run those full screens to give people a peek into what those numbers look like. without getting too complicated, this is on the credit, likelihood when you buy insurance you're making certain assumptions. these are the numbers out there. to this day odds of bankruptcy within ten years. you have big numbers out of citi today. look at the european banks. i saw this over the weekend, somewhat surprising. unicredit 45%. look at the sovereign nations. to buy credit protection today if you want to go out there, we have more european banks, some of the stronger ones there, take a look. spain, obviously, the bond yields aren't at record highs on credit default swaps today in spain. the cds are. italy, france, china, even china
at 19%. u.s. is going to bottom out that list. that is primarily has a lot to do that they could print their own money. rick santelli, it was an interesting report. what do you think these credit default swaps -- you know we are going to get criticism, they are thinly traded, but it is the cost of buying insurance. what does it say to you? >> i'm always suspect of them, to be quite frank with you. it is a barometer nonetheless. i'm going to look at it totally different. when i see the percentages of our domestic institutions and they are not that far away from some of the institutions like unicredit or some of the spanish areas with regard to cds, whether it's the federal reserve, treasury, our government, european government that we are going to be on a track where they are going to continually try to avert any type of insolvency. what do those numbers tell me?
tells me we are in for a long haul of government managing and watching out for the citigroups and banks of america and unicredits. this is a big negative for the kind of growth that this global economy truly needs to erase some of these horrible debt metrics. that's my take. >> great point. this is not over the next six months, next year. this is likelihood probability when you look at premiums paid to buy insurance over the next decade -- >> you're assuming they are trading at fair value. we don't know they are trading with an accurate reflection of what might go on. >> simon, the criticism always with the cds market, it is not a very liquid market. it can be manipulated by people wanting to paint the picture one way. it is a market. you can't simply ignore it.
>> it's shocking to see on tv the odds of a bank going bankrupt. your point, it's something to watch, you're discounting it, as well. >> i agree with rick. these are the numbers out there. i am essentially saying we know the banks are stronger. we know the banks have been helped by a fed as well as by government. i found it somewhat shocking when i looked at the numbers comparing the u.s. institutions with european institutions, as well as some of the sovereign credits. it was very surprising. i don't look at these things every day. i was surprised when i looked at these numbers. >> thanks. >> it's all about nonconfirmation. today is the first day the nasdaq significantly underperformed the rest of the market. we've seen a series of nonconfirmation traders have become concerned about. in february transports suddenly started underperforming the rest
of the market. there are a lot of people that watch this carefully. transports should advance when industrials, it's a sign of confirmation. this started happening here. here is the midline here. you started getting the transports underperforming. they continue to generally underperform. that started in the beginning of february. obviously, the reason was higher gasoline prices started putting pressure on the transports. regardless, this has been around for a while now. it was a second concern that happened. that was in the beginning of april when the russell 2000 which had been having a great year, small cap stocks, suddenly started underperforming the big cap index. here is the russell 2000 on the green line. here is the s&p 500. this is april. this gap started to get noticed by a lot of investors. you've got a second nonconfirmation. today you've got a third issue going on. the nasdaq is underperforming the rest of the market. everybody is worried about apple. we had a good year. the nasdaq up here has notably
outperformed the s&p 500. some of this is apple, but broadcoms had a great year. it's not just apple. a lot of great stocks are out there. today is the first day that the nasdaq has significantly underperformed. one day does not a trend make. such is the power of apple that people are taking note of this. the nhb numbers today. normally they are not market movers. today they were at least in the home builders because of this comment by the chief economist david crowe. "interest expressed by buyers in the past few months has yet to translate into expected sales activity." this got widely passed around on the street. generally we had been hoping for sales increases of about 20% from some of them. early indications are we were starting to get that. here you see the vix numbers and
home builders. one piece of good news here. did you see reliant steel? a major distributor of metals around the united states. they upped their numbers this morning and cited stronger sales and better pricing. nucor and arcelor were up but now in negative territory. >> thank you, bob. >> yra harris. we were looking at some of these housing numbers. i don't see the u.s. economy or even many economies, spain, this is going to be a tail wind or a head wind that isn't going to go away. today's other big story was the chinese yuan. you have interesting facts about what happened in '94. why don't we show the two-day
chart of the dollars' relationship with the yuan and go back 20 years. >> if you look at the monthly chart, you'll see the yuan was devalued from 5.8 yuan to the dollar to 8.7. that was also the beginning of nafta. it reflects upon how the chinese are such great watches of the global environment. out of the chinese devaluation, we are sitting here right now looking at the gdp numbers from 1994 of china through their national bureau statistics. the gdp of china was 560 billion. >> a little over half a trillion in '94 during that devaluation. what are they today? >> at the end of 2011 using the national bureau statistics, 7.3 trillion. so that devaluation really helped propel.
don't forget the chinese at the time were competing against the onslaught of the asian tigers. then of course we see '97 and '98, the huge capital investment into asian tigers. we wind up with the asia contagion. that devaluation by the chinese in 1994 sent reverberations around the world we are still feeling. >> we are working our way back to that level. it was counterintuitive the yuan weakened with that wider band. during the depression in this country, what region of the globe outperformed while everybody was mired in all the issues of the depression? >> the work of a lot of economists at that time. dependency theorists showed latin america because they weren't as indebted and the global capitalism retrenched. latin america had a good decade in the 1930s. >> fast forward. we are looking at yr a's gdp numbers about china. they started to zoom from 4.5
trillion to where they are today. it seems like the credit crisis shows china benefitted in a similar fashion latin america did during the depression. >> the chinese did ramp up. everybody pushed at them to ramp up whatever growth they could. >> and prices helped the consumers that were impaired by the credit issues of '08 that are still ongoing. i guess the moral of the story is if you're looking for the chinese yuan to appreciate dramatically, it's possible, but don't take anything for granted. >> nothing. the chinese, the real moral is chinese are such good global watchers. they know what's going on in the world. things don't happen willy-nilly. they are very well crafted. >> back to you. >> thank you very much. next, the latest on the citigroup earnings call.
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is that a screaming buy signal for the home depots of the world? simon, back to you. >> i'll be watching. citigroup is clearly a key focus of the trade so far today in the wake of them publishing results this morning. mary thompson has been listening in. >> simon, the ceo addressing the question on everyone's minds at the top of the call. one focused on future payouts from the bank, not its better than expected results. investors looking for an increase of a penny a share dividend citi pays may have to wait until 2013 though. >> we are having the conversations with the fed, which will inform what we submit and what we ask for, and obviously for all of us on the phone that, could range from resubmitting exactly what we asked for before all the way to waiting until the 2013 submission. >> in the wake of the federal reserve refusing some aspects of its capital plan submitted in
march, pandit says citi can resubmit in june. a decision on the 2012 request would come ahead of the 2013 decision. the bank may wait till then. saying the bank will have more to say later in the process. before speaking about the stress test, pandit did highlight the strong capital levels noting tier one measured by basel iii should reach 8% by year end. stronger profits of $1.11 a share were 11 cents ahead of estimates. the company helped by strong results at all three of its business units. helped by the strength in emerging markets lending, a strong rebound in its investment banking business from the fourth quarter and a big jump in trade finance. the bank saw a 12% jump in loan growth during the quarter. linked to gains in latin america
and asia. they said the u.s. and europe remains flat to waning. bank says it remains committed to cutting them by $2.5 billion to $3 billion by year end. the call is still going on. >> many analysts saying they are delivering on the cost cutting. up next, tep sector snapping a 14-week winning streak as a result of the volatility we've seen recently. is this a reason to worry or opportunity for you to buy?
nasdaq 100 down once again today. this after hosting a negative weekly return last week for the first time this year. apple, one of the biggest drags we've seen in the past seven sessions as well as microsoft and oracle. is the tech run coming to an end? dan, always great to see you. you thought techs were getting ahead of themselves. on what basis? if you look at the valuations of some of these largest cap tech companies, microsoft, apple, google, they are all cheap on a historical basis. >> i think tech overall is cheap. i think it's going to stay that way. my commentary on getting ahead
of itself was my view is, i cover the company fundamentals, there is not enough job creation in this recovery to justify a lot of new computer hiring or computer buying. i don't see how you get growth. you can have earnings growth. to get real growth we need to have hiring. need to have hiring so you have computers at work and money to buy new computers and technology at home. i think it got a little bit ahead of itself. tech stays cheap. the other thing i think that bothers me about overall tech is outside of apple and google, there's not a lot of innovation. the growth in computing in the next decade, 20 years, 25 years is in mobile. core companies like dell and hp don't have a presence there. >> those are good examples. how about all the companies exposed to cloud computing which is a huge growth both in the private sector as well as public
sector? microsoft has windows 8 seen as a huge catalyst that moved the stock this year. >> we don't cover microsoft directly. you have to like their positioning there. assuming we have recovery next year. we have a windows 8 refresh cycle. there's a lot of aging technology in corporations, even without a lot of hiring. there is sort of at some level there is an impetus. windows 8 offers to potentially make managing that infrastructure a lot easier. i think windows 8 if they accomplish what they say and merge the desktop with the tablet, i think might even give apple a bit of a run which google hasn't been able to do that. the other thing is, windows 8 will not make the back to school season. we'll miss that bit of the opportunity. >> daniel, you have a very peculiar domestic view of what's needed in order to drive these
technology companies forward. we may have an unemployment problem here in the united states. around the world, economies are still growing and middle classes are getting richer. even here in the united states, i can look at companies like nokia or like rimm that are being smashed and presumably there are others gaining from that evolution within the space. it's much more dynamic, isn't it, than you sitting there saying unemployment is too high here for me to buy tech. >> look at europe as well. obviously, the growth in china nova grew over 30%. the question is where in tech? hp and dell are well positioned around the world. are they growing from that? your commentary around nokia and rimm, most of that benefit is acued to apple. i go back to the other comment i made about innovation.
where is there innovation in technology? where are new technologies being invented? for the most part it's apple. that is a company that trades, speaking of cheap, 13 1/2 times earnings. they grew earnings in 2011, 100%. google grew earnings 25%. apple at 13.5% or google at 15 times. who are you going to buy? >> in a word, when facebook comes to market, will you buy it? >> if i had -- we don't buy the stocks we cover. if i had an opportunity to buy it at the ipo price, i think it's going to end up being a good investment over the long haul. it's a big platform. it's growing and i think they are just getting started in monetizing it. i think it will be like google, not a straight line up, but there is a lot of opportunity inside facebook. >> daniel, always great to speak
with you. >> keep those tweets coming. google getting fined $25,000 for impeding an s.e.c. investigation into data collection for its street view project. when they send the cameras down the streets. we are asking if google were driving by wall street or park avenue, what sensitive personal information would you hope it collected and then revealed? tweet us. protect the land. economically, it seems like a good choice now. we need environmental protection. we've got more than 100 years worth of energy, right here. [announcer:] who's right? they all are. visit powerincooperation.com. are you still sleeping?
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google under fire for its street view projects. "i hope they caught my funny e-mail about how evil the nonevil company really is who sneaks and steals, overture, anyone?" "lloyd, we found 126 incidents of the use of the word muppet in e-mail correspondses. do you want me to make that go away?" >> say it's got to do with the movie. >> people talking about the "muppets" movie. that's normal. >> i joined becky and joe
earlier this morning on "squawk box." we had a portfolio manager. we asked him a question related to apple. >> by that time the horse is out of the barn. we were focused on apple's ability to pay a dividend starting a year ago. it's been a great stock. >> i found this interesting. so many people anticipated funds such as this were going to be loading the boat with apple after they announced the dividend. he is telling you he bought it months earlier in anticipation of that. that's one of the reasons why, in addition to some of the stuffs we brought last week, you may be seeing a pause here. if these guys bought the stock already, that incremental buyer is not going to show up. >> that's one of the reasons we thought in the fourth quarter end of last year this stock might have done as well as it did in anticipation of what you're talking about. >> exactly. there was this false thesis all
these funds would be buying it on the dividend announcement. i don't know if he represents most of them. they already bought them. >> mr. kamensky, have a nice afternoon. >> you, too, simon. >> and rick with a final thought. >> i like that tweet. le what i would write on that one. thank you, guys, on wall street for setting a pick. you're the captainists that everyone seemed to want to hate these days. as far as the markets, these charts say it all. look at a chart of ten-year note rates despite what look like good retail sales report, probably has weather implications. never got back above 2%. we are flirting with the lowest yield close since march 6th. two more housing numbers tuesday and thursday. >> that is a big figure. thank you very much. rick santelli in chicago. what is coming up on "fast money". >> a big show with