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tv   Street Signs  CNBC  May 10, 2012 2:00pm-3:00pm EDT

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and the s&p is up about six points on the trading session. simon, it's been a pleasure. ty. >> always, sue. >> see you back here tomorrow. that does it for all of us on "power lunch." and "street signs" begins right now. and welcome to "street signs." i'm brian sullivan. and we are going to party like it is 1992? why what happened globally 20 years ago may tell us what might happen this year. and why one guy says we're nuts. plus, it is asia all around. p&g making a big move. one of its groups going to singapore. and a huge chinese bank buying into the u.s. reason to worry? or no big deal? we'll debate. and microsoft making a big move in search. you're going to hear our big bing theory first on cnbc, mandy. >> hello, everybody. the major averages are higher across the board. that's notable because it hasn't happened since the first of may. well, the dow has now cut its
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weekly loss to about 1%. as for the s&p 500 and the nasdaq, they're both within about 0.5% wiping out the week's losses. the nasdaq has had the day's biggest struggle spending much of the morning in negative territory before recovering. brian, is that sir mix-a-lot i hear? >> yes, it is. and that is chris cross with one of 1992's biggest songs. '92 was a good year, mandy. i know you were in high school. those of us who were of age wore our pants backwards. bill clinton playing the sax phone and "wayne's world," yeah, happened. all the fear now about europe about how it may bring us down today, one of our guests says you got to look to 1992 for inspiration. here's why. this is a chart, okay, we've got u.s. industrial production versus eurozone industrial production. eurozone is on the top in green. and back in 1992 you can see in it it doesn't look that dramatic, but it was the.
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industrial production fell in 1992 in the eurozone while we were able to climb even as they fell. now, since then, you can see it's tracked pretty well. here's the key. i know it's just the very end and it's still early, but it looks like perhaps like 1992 we are going are as "journey" would say, separate ways once again. in other words are we getting an urge to diverge from europe? it's not just industrial production, guys. in 1992 the dow jones industrial average ended up 4.2%. germany's dax down 5.6%. about a 10% divergence between not only the two markets but as you can see the two economies and really germany at that time almost was europe, throw in a little france around the periphery. are we beginning to break out of the eurosis and come out on top again? or is this time different? and will europe bring us down? peter christopher is chief international investment strategist at wells fargo
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advisors. also andre julian president of trade aviator joining us. we've got your fantastic chart here from industrial production, pete. i want to talk to you first about this. why do you think this is like 1992 all over again? bad music aside. >> i liked your "journey" allusion. anyway, these two economies are very highly correlated. they're very tightly synchronized. in 1992, '93, that sin kronization broke temporarily. as it broke, that gave us reason to believe it would re-establish itself. more importantly as you point out, while the europeans are suffering for reasons that have to do more with them than us, that tends to benefit the united states. that benefits the u.s. economy because the europeans will ease rates. and they'll generally come out of their recession. as they do so, they'll buy more from us and invest more over here. that's good for our markets. it should also help support them in their recession. >> nujs, andre, i'm wondering whether you think this summer we could get deja vu, a little
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repeat of last year all over again. but you're more in the camp that doesn't believe in decoupling, that doesn't believe in diverging, that maybe the problems over there could also bring us down. is that true? >> i think the key issue is that in 1992 we didn't have the euro. i think it's a failed experiment. if you look over the past 17, 18 years, you've seen we developed into one monetary policy in europe but 17 fiscal policies, greece can't even decide on an election, they don't even have a government right now. and in france you have the ousting of sarkozy, which was huge news. and holland wants to tax the wealthy 75%. there's a huge disconnect in europe between what they need and what they want. and there's just a different environment than it was in 1992. there are too many other variables. >> rather than throwing our hands up and saying i give up, it's going to be a repeat, how do i take advantage of that if that is what is in your crystal ball? >> i think you just look at volatility plays. obviously if you want to stay safe, you look at certain sectors that have done well
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during cycles of volatility, like the utilities, like health care, like consumer staples. there are a lot of places to go. if you want a specific company, look at sullen company. they're out of the south. they have very little overhead. they have tremendous capacity to continue growing because energy is so cheap there. they have a 4.3% dividend. that's just one example. you can get these dividend stocks that help you gain some income while you're waiting for all this to wash out, especially if you're concerned. >> paul, let's take the other side, right. there was a story out that china sovereign wealth fund is going to stop buying european sovereign debt. they're simply too worried, to andre's point. but that money has to go somewhere, right? brazil's got growing inflation, europe's got their problems, china appears to be slowing down, plus they want to invest outside their own country. couldn't this be a net positive for the united states? >> you may think of the u.s. as perhaps the least ugly in the ugly contest, but the u.s. economy is showing
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considerable -- considerably more positive momentum and surprisingly strong momentum right now than you'll find in many other parts of the world including some of the favorites like brazil and india. so we think some of that money will come to the u.s. >> where specifically? >> well, we're turning a little more cyclical these days. we like materials. we like consumer discretionary. we like telecom services and i.t. >> you like materials even know as we've been seeing commodity prices somewhat be vulnerable to some of the concerns about slowislow ing global growth. >> right. good question. we had been underweight in commodities but just moved to even weight. i think that will be a preliminary step to going overweight. we see china rebounding. we see the u.s. growth rate this year at 2.5%, better than we thought at the beginning of the year. we're looking for better conditions as the year moves on. >> what about you, andre? what's your call on china? we'll talk a lot more about china in a minute.
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do you feel that this or other emerging markets are a good place to look for bottom fishing? >> i think it fends on your viewers. there's a lot of mixed news out of china that we'll have a hard landing or soft landing. i still can't figure out what is right. the issues with china is obviously they are a driving force in the economy. for us to really get out of recession, we need to see 4% or 5% growth here in the united states. we're still not seeing that. it's anemic. the growth rate is starting to pull back a little. the one thing we can see is our companies are starting to move into china. obviously the big news today about p&g. that's huge for china. at the end of the day there is still a big concern that china cannot keep on uplifting europe and keep on holding it up. if they stop buying european debt, that's going to be a big problem. so, again, back to the point at the original part of the show, there are just a lot of overhangs right now and the market just does not like uncertainty. so i know paul is a little bit, you know, he's being a little
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counterintuitive right now because he's going into the cyclicals and we're moving out of the cyclicals and going into the more stable markets. >> and it goes both ways. he has the chinese banking sector moving into our banking sector. thank you very much for that. in the meantime brian shactman has a market flash for us. brian. >> hey, guys. listen, i want to look at two ipos today with interesting price action. the first is audience, adnc, makes audio chips for iphones and other mobile devices. it priced at $17 above the range of $14 to $16. up 16.5% from there. so it's done quite well. priced above and it's up. the other one is wageworks. it's a benefit administrator, actually priced at $9 below the $10 to $12 range and it's at $10.22. seems like maybe it priced a little below what it should have. so in terms of optimism, be a little more bullish on audience but both up double digits. >> indeed they are. thank you very much, brian shactman. >> up next on "street signs,"
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p&g announcing some groups are leaving cincinnati and moving to your old hometown, singapore. an ugly thing for the u.s., or no big deal? >> plus, one big money guy says mom and pop have no business trying to compete with the big boys on wall street, but we know you've done pretty well with names like these. cramer's fired up and ready to defend your honor mr. and mrs. retail investor. >> we are asking in our street poll today, do you think you can outperform a money manager? beat the pros. vote yes or no. there is no unsure in this one. streetsigns.cnbc.com. we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start.
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now to a big story from one of america's oldest and biggest companies, proctor & gamble is going to be moving global skin care and personal care units headquarters from cincinnati to singapore. p&g says it is making the move because asia is the fastest growing beauty market in the world. should only apparently effect about 20 jobs, but the move may still be symbolic. and the other question, will the money made over there stay over there and not be taxed here in the u.s.? singapore's top corporate tax rate a flat 17%. i went through the last quarter, p&g paid a 23.1% effective tax rate. so about 6% -- actually it was 23.7% so nearly 7% more they paid here versus there,
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potentially. >> and of course before we got the spokesperson's comment on this, we were all debating this is for tax reasons, is it purely for tax reasons, but it says here according to the statement that really it's because it's the fastest growing beauty market and not due to u.s. uncertainty, not due to changes in policy with the government, not due to tax reasons, sully. >> and beach front property in arizona to sell you too because the ceo was railing against corporate taxes last year in congress. now they make this move. >> obviously it's beneficial to them at the same time. >> let's bring in guests on this. head of china research at the isi group and jimmy p, cnbc contributor. i want to talk to jimmy first off. you heard p&g sort of stop making a big deal about this, it's not a tax thing, it's because they're a fast growing market. what do you think? i'm not convinced. >> well, listen, yes, i'm sure they want to go where the growth is. but let's take those financial models and plug in a 15% corporate tax rate. we'll see what the math works out. i can't believe that at some
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level that if you had a loan of corporate tax that doesn't change the calculus at least a little bit. >> what do you think, don? is this something we should be concerned about and opening the flood gates from more jobs from old american companies offshore or is this just economics? >> mandy, this is economics. i wouldn't be at all surprised that tax calculations are part of the thought process. i think that's a reasonable thing. but most important the economic growth in the world in the last decade and i think in the next decade is going to be in asia. it's not going to be in the developed world america even japan, europe, they got to be where the market is. and that's exactly what they're doing. and singapore's a great place to do business. this doesn't worry me at all. >> it's interesting what you're saying there, don, because there was another headline that caught our eye yesterday. of course we broke the news that the fed okayed the purchase of a u.s. bank by a chinese firm.
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and we were all trying to work out whether it was welcome or worrisome. you were saying all the growth is going to asia. in other words, they're going to be big. so rather than treating them as a foe or a threat, is it good we're welcoming them and shows a thoring of ties. >> i don't think it suggests any thawing of the economic tensions. those are clearly going to be there. but this was a bank of east asia is a hong kong bank, not a chinese bank. it's been operating in america since 2001. now they're being bought 80% by big state owned bank in china. they ought to be expected to play by american rules in the american theater. and if they don't, they'll get whacked just like any other company would. so kind of what is the big deal? >> jimmy -- >> seems like we all agree and everything is fine. that seems to be this debate.
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jimmy, do you -- listen, this p&g story really got me worked up. i guess i'm the only one that seems to care. i know it's 20 jobs, and, yeah, they're saying it's not for tax reasons, not for this reasons. the fact is p&g was built in 1836, it pretty much is cincinnati economics. and it's very symbolic to me they're moving to singapore. i just did a piece in singapore, it's a fantastic place. i think it's more symbolic about the problems here. maybe i'm completely off the rails. >> listen, as far as china goes, listen, general i like closer economic ties, i think it's good economics and also think it's better for china. i think it helps open up china politically over the long run. i watch a lot of cnbc, i seem to remember segment after segment in the past years telling me how fragile the chinese banking system is. so i kind of feel like the british financial authority back in 2008 when paulson wanted bar clays to buy lehman brothers,
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they said, no, we don't want to import your mess. aren't we importing china's banking mess. they have this system full of nonperforming loans? >> we're not importing china's banking mess. this is bank of east asia is -- has been the operator. this is a tiny, tiny fraction. it's about 2% or 3% of bank of east asia $140 million deal, which is rounding error in icbc itself. they'll do well or they'll do badly here in america in terms of the way they provide banking services to corporations and to individuals. and they have both a commercial license and an individual license both. >> listen. three giant banks were given approval here including the agricultural bank of china, which is one of the banks that's always playing to them they talk about all these terrible loans just sitting on the books. remember, the chinese banking system, it's not liking the banking system here. it's basically an arm ot chinese
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communist party to own capital state-owned enterprises. it's not market driven. no surprise there's all kinds of bad loans. they had a huge bailout in china, i think they're going to do another. >> jimmy, i think they are going to do another one. there are a lot of bad loans out there. but the question is on what basis does america keep this kind of a transaction from going through? and i quite frankly can't find a good reason for that. and neither did the fed because -- >> don and jimmy -- >> so did doj, signed off -- >> we have to break it up. it's a fantastic debate. all i can say is i hope china returns the favor and opens up their financial markets more. >> yes. >> to u.s. banks. and that would be an upside. just ahead on "street signs," it is raining royals. a side of prince charles you've never seen. and we take you inside the intel investor meeting. the stock's had a pretty nice run this year, but dead money or so for the last decade. so we're going to ask the cfo
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they test add 52-week high today on 8 times their average volume. you see it's up 24%. it's funny, before today they were flat for the year. now they're up 24% for the year. i want to point out also tax act, a new acquisition was a huge push behind their numbers. and a lot of investors think they're bullish on the name because of that. tax acquisition doing quite well. mandy, back to you. >> brian shactman, thank you very much. we have been telling you here on "street signs" about the return of the house flipper, the diy worries are slowly getting back into the market. but what about all of the investors who got burned in the housing crisis? when can they get back in? and how much did a foreclosure/short sale really hurt their credit score? diana olick has been doing some investing and she is here with a special report. diana. >> well, that's right, mandy. more than three million homes have been foreclosed since 2008. and another six million are now either delinquent or in foreclosure. that's nine million borrowers
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who have taken a mighty hit to their credit score plus those who did a short sale. many are former investors who would like to get back in on today's rock bottom home prices. if we want to become buyers again, what is skp how long is it going to take? you need a credit score above 680 to get a mortgage. fha min numb is 580. but the march origination was 701. that really tells you something. let's look at two borrowers and see what happens to them when they're 90 days late on the mortgage or when they dpo to short sale or when they go all the way to foreclosure. take a look. borrower number one had excellent credit. 90 days late drops them to 650, out of contention for a new mortgage, yes, maybe fha, but that's expensive. borrower number two with lesser credit to start say 680 drops to 600. also, again, out of the running. a short sale where the bank lets the home be sold for less than the mortgage puts both borrowers just above where they would be if they were delinquent.
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but, remember, a lot of short sales happen after the delinquency. next, foreclosure. that drops each borrower 35 points lower than a short sale. now, the higher you score, the harder you will fall. and the longer it will take for you to get back up on your feet again. seven years for those with top credit to get back to where they were whether they were late on monthly payments or went to foreclosure. but their credit will improve enough over a short period of time to get a higher cost fha mortgage, that would take about a year. a borrower with lower credit can get back on their feet from a delinquency in nine months in a short sale or foreclosure in three years. but, again, they will not be getting that best rate. so think about it. if you lost your investment home to foreclosure even in 2009 at the height of the housing crash, you might be able to get a loan today if of course you have that large enough down payment. there's plenty more of this on the blog. go to it realtycheck.cnbc.com. back to you guys. >> diana olick, thank you very much. good lesson there. we were educated.
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intel hosting investor meeting today a week before its annual shareholder meeting. over the past three years intel shares are up about 78%. however, over the past ten years stock only up about 1%. so, what is intel's plan to innovate and increase shareholder value? let's bring in stacy smith, cfo of intel. i couldn't have asked it better than that, stacy. what are you guys going to do to drive sales, to drive average selling prices and to drive operating margin? >> well, good afternoon. and thanks for having me. what we talked about this morning i think really answers that question. right now what you're seeing is that we're making significant investments in our manufacturing. and we have a significant lead over the rest of the industry. what that translates to is that we can do products that are faster, that are more energy efficient and that are less expensive than our competitors can. and you're seeing that play out across the different segments of the market. we have products going into ultrabooks, phones, tablets, into the data center. and all of those businesses are growing for us right now.
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and as you said, we've demonstrated some spectacular growth over the last five years. >> i'm very interested in what you were saying about phones. worldwide pc sales aren't growing like they used to. and i can understand the need for you to get a greater foothold in the market. but my question is can a chipmaker be a serious player in the mobile market? >> yeah. well, so first i want to debunk the myth. if you look at our results last year, the data center business grew 17% year over year and our pc business grew 17% year over year. a company of our size, those are pretty impressive growth rates. we're just starting in the phone space. we have the first designs announced this year. you're seeing a series of phones rolling out with intel inside. we've been gearing up for this for a while. so we're super excited about it. the first phone launched in india. >> uh-huh. >> just in the last few weeks. and you're going to see phones in europe, phones in china, phones in other geographies kind of rolling out over the next few
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months. for us it's a really exciting time. >> how is it received in india, sir? >> you know, the reviews are phones built on intel architecture really actually have been really, really good. we showed data in the presentation that said, you know, we believed we were going to be able to bring products to the market that dramatically outperformed our competitors and were kind of in the same power range. it's nice that there are phones in the marketplace and third parties can go in and do the evaluations, it's bearing out what we've said. for us it comes down to the manufacturing leadership. we're ahead of the rest of the industry and that enables us to do more. >> with significant operations around the world, particularly in asia, it's much cheaper to go to asia. i'm sure office space in myanmar is very inexpensive right now, stacy. you heard the p&g story k you confirm or deny that cisco wants to move headquarters to singapore, la gos or anywhere? i'm trying to ask a serious question in a backhanded way.
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is america at risk of losing great companies to -- like p&g moving some of its units so singapore, they say it's not lower taxes, but, i mean, that's got to be part of it. >> let me talk about intel's business here. i think we're a classic example of -- >> i think i said cisco, my apologies. sorry about that. >> well, that's okay. >> fire out. >> i understand. i think we're a great example of an american company that innovates, we then export our products all over the world. let me give you a couple data points that support that. today more than half of our high-tech manufacturing is done inside the u.s. so we create jobs in the u.s., we build big factories in the u.s. two-thirds of our demand is outside of the u.s. and by the way, of that half of our demand is actually in emerging markets. so i think we're a perfect example. we have oernperations all over world, we have fact vis all over
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the world. we innovate here, we invest here and export outside the u.s. for us that's a great business model. >> we really like to get the views on the pulse of the economy from various, you know, leaders like yourself, stacy. how do you feel the u.s. economy is right now? >> you know, when we did our earnings announcement, what we said is that we're starting to see, you know, some recovery in the u.s. we continue to see though generally when you look at our businesses around the world what we see is that the growth, the exciting parts of the market right now are coming from emerging markets. the enterprise segment broadly has been pretty strong for us. and that mature market consumer, that's both the u.s. and europe, has been a little bit sluggish. frankly, that's been true now for us for, you know, six, nine months. and it's consistent with the forecast that we've put in place for the current quarter. >> we hope it certainly picks up from sluggish. stacy smith, thank you very much for joining us on "street signs." still to come, should average joes and janes by the way, be buying stocks? well, cramer's ready to defend
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the retail investor. >> and check out cnbc.com because former hp kre car fiorina gave mark zuckerberg some tips. you can check it out on facebook. ok. are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers. an investment opportunity you didn't see before. fidelity's next generation ipad app lets you see what's trending around the world, as well as what over a million fidelity customers are trading throughout the day.
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okay. let's take a look at what the markets are up to. a better picture than this time yesterday. you can see we're moving marginally higher. some relief that the tranche of bailout money did get paid to greece. and also some better news on the labor market in the form of a drop in the jobless claims. let's rip through some individual stocks. first up, priceline.com. >> a name we talked about yesterday. earnings coming in beating the street. 428 a share, that was well above the consensus. international bookings up 54%. maybe p&g executives going to scope some places out. but it warned that the pace of growth will slow down raising their target. we've been arguing in the commercial breaks about the p&g story. >> and wyndham worldwide. >> another sign of international travel hopium. >> i think you need to lie down.
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what about getting a tempur-pedic mattress? >> this is a weird story. raymond james analyst coming out saying he heard rumors basically there would be some unexpected discounting. he took it as a sign of weakness or at least the market did. the company confirming we're going to have a special promotion, but the same analyst at raymond james upgrading the stock today from a strong buy to a market perform with a $70 target. clearly he wasn't that spooked once he confirmed his own news. >> i followed that and it was a weird story. monster beverage. >> monster beverage earnings beating by three cents. ubs raising from 82 to 70. everybody wants to juice up and get goosed up on the energy drinks that taste, you know, like energy drinks. >> supposedly give you some energy. as for universal display. >> i don't have enough of that. panel, big drop. a favorite of herb. he's been all over this company. guiding wall street down. they see sales as low as $90 million for consensus of $100 million. right now stock down over $4. >> wow. okay.
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it is time -- >> to defend the international investor. listen to what steven rattner, former auto czar said this morning on "squawk box." >> i don't think the individual investor should be playing the stock market anymore than you should be taking out your own append appendix. >> apparently individual investors, not international -- my brain -- >> they could be international and individual. >> my brain is overseas. should individual investors stick to index funds rather than stick to returns in the stock market. jim cramer here to rescue us. i'm sorry. i can't focus. i need to tighten up. >> no problem. i think the world of cincinnati. wish proctor was doing better. maybe this helps. i found steve's comments this morning rather inconsiderate. i think if you go on @jim cramer calling his comments insulting. >> treating them like idiots. >> yes.
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i think the comment was pater l paternalist paternalistic. he was basically saying the people who try to do this is fools and idiots. that's unfortunate. i want to analogize not to the surgery he's talking about, but not everyone can do it yourself at home. there's a lot of things -- i can't build a kitchen and bath, but people can go to home depot who can who are not pros. that's what do it yourself investing can be like. >> how do you get better at it as an individual investor? people do feel frustrated. they feel it's rigged. i can't make any money. everything's down over ten years. i'm out. >> all right. when i used to do work at bloomberg, the old fashioned -- i was on radio there, they often heard me say don't talk about playing the market, talk about investing. i never forgot that. steve rattner uses the word play. i think individuals at home who do research -- use the old peter lynch method, he may be the greatest mutual fund investor of our lifetime, he says go buy something that you like after you've done some research. don't play it, invest in it.
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and i think that that's important. i think that rattner's choice of words seemed really so -- i want to choose my own words correctly -- yes. i don't think -- i don't want to say he'd take them back because he obviously is very strong on this. but everyone that watches "mad money" everyone that watches our network, are they continuing to lose money by the day? i speak with hundreds of investors by nature of twitter, "mad money, nature of "squawk on the street," too many of them tell me just everyday life that they make too much money much better than index funds. index funds don't fit everybody. >> are they day trading -- >> no. >> long-term investors we were just speaking with intel -- >> stacy's terrific. >> so it's been doing well recently, but if you look over ten years, the stock is virtually back to where it was ten years ago. >> yes, but they pay a dividend.
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they pay a dividend. >> when did stacy and intel start doing well for you? when they started doing that dividend. microsoft started coming back. but let's move away from tech. let's talk about these great american companies that -- for instance, i can't tell you how many people came up to me and said thank you for verizon. a guy today, doorman, said thank you for verizon. thanking me. i didn't do anything. >> nice dividend. >> yes, it does. now, steve wagner, look, i don't know, i think he thinks everybody is a fool. >> maybe he just wants to protect them. i don't know. but we have been asking our viewers, the individual investors, our street poll question, which was do you think you can outperform a money manager? guess what, 87% of them voted yes. >> there you go. >> 15% voted no. there of course was no unsure. we didn't even let them have that option. there are lots of confident investors out there. >> only one-up on wall street, you can get it on amazon, peter lynch versus steve rattner, i'm always going to vote for peter
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lynch. always. i've never even met peter lynch. >> probably a good bet. >> yes. >> just a guess, jim. >> trying to be a diplomat about this because steve, i think it was just an inconsiderate remark, i think he probably regrets it. >> okay. geoff cutmojim cramer, thank yo weighing in. >> up next, we are going live to madison square garden for an exclusive interview with their ceo. and the rangers are about to add more to the arena experience. before we head to break, here's today's return on retirement. retiring couples can expect a 4% hike in health care costs throughout their golden years according to fidelity. so how much money will a couple need in order to cover health care in retirement? the answer when we return. not quite knowing what the next phase was going to be, you know, because you been,
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you know, this is what you had been doing. you know, working, working, working, working, working, working. and now you're talking about, well you know, i won't be, and i get the chance to spend more time with my wife and my kids. it's my world. that's my world. ♪ sadly, no. oh. but i did pick up your dry cleaning and had your shoes shined. well, i made you a reservation at the sushi place around the corner. well, in that case, i better get back to these invoices... which i'll do right after making your favorite pancakes. you know what? i'm going to tidy up your side of the office. i can't hear you because i'm also making you a smoothie. [ male announcer ] marriott hotels & resorts knows it's better for xerox to automate their global invoice process so they can focus on serving their customers. with xerox, you're ready for real business.
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a living, breathing intelligence teaching data how to do more for business. [ beeping ] in here, data knows what to do. because the network finds it and tailors it across all the right points, automating all the right actions, to bring all the right results. [ whirring and beeping ] it's the at&t network -- doing more with data to help business do more for customers. ♪ to help business do more for customers. recently, students from 31 countries took part in a science test.
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the top academic performers surprised some people. so did the country that came in 17th place. let's raise the bar and elevate our academic standards. let's do what's best for our students-by investing in our teachers. let's solve this. today's return on retirement question. how much money will a newly retired couple need in order to cover health care costs? the answer, $240,000 according to fidelity. and that does not include most
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dental or long-term care. for more on retirement, go to retirement.cnbc.com. i'm bill griffeth. coming up at the top of the hour on "closing bell" here at the big board, goldman sachs makes a bullish call on gold today. are you missing out on a golden opportunity if you don't buy the precious metal at these levels? we have a bull/bear debate and find out why james grant says today's markets are just a hall of mirrors and he doubts the fed can hold the illusion together much longer. then maria talks with hall of famer john elway about the business of football, running the denver broncos, why he traded tebow, why he signed payton manning for a load of dough all on a first on cnbc interview coming up on "closing bell" when maria and i see you from here at post nine at the new york stock exchange. let's head over to the nymex. and sharon epperson on energy. sharon. >> you're looking at a close here, bill, for oil that is once again above a key technical
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level. and traders don't want to say exactly that perhaps we've seen a bottom here in oil prices, but it is an interesting trading day here looking at oil prices once again above that 96.30 level closing above $97 a barrel. the key to think about here is we got the weaker trade data from china. we saw oil imports from china at a four-month low. the market ignored that. opec production is up. the market ignored that. what will they be paying attention to in the session ahead? the euro, the european commission's outlook on economic conditions in the eurozone, that is going to be a key factor. perhaps with a currency trade as well as the commodity trade in the session ahead. back to you guys. >> all right. sharon, thank you very much. well, shares of madison square garden, the world's most famous arena are hot like the rangers. the stock is up more than 30% this year. the rangers coming home to madison square garden this weekend for game seven of the nhl playoffs. tickets going for more than $700 a pop with the equivalent of
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about 18 shares of msg stock. so our own darren rovell is live at the arena with an exclusive interview. darren. >> yes, brian. the knicks of course bowing out to the heat, but the rangers have that game seven on saturday. and joining me now is hank ratner, the president and ceo of the madison square garden company. hank, thanks for coming on cnbc. we are sitting in the madison level suite, the only one that is completed. there's 58 of these. tell me what this is, what people get and what you're offering here. >> this is very exciting because you're the first ones to be sitting in the madison suite here. i just saw it for the first time on friday. what people get is they get everything at madison square garden. all the events, whether the knicks, rangers, the liberty, the most concerts an coy can find in any arena anywhere, all the special events, bull riding, whatever you think, whatever we have, almost 300 events every year, you get it with the suite here. >> and you get 12 tickets.
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but to actually sit down, it's open, you can walk straight down, you get tickets as well and you can add tickets, i understand. >> this is one of the brand new amenities we introduced to the garden as part of our transformation. we went to our fans, luxury suites have been on the top of the building. they said we like better seats with our suites. so we brought the suite down to about 23 rows up and you get this great living room area where you can entertain, there's a kitchen, there's a bathroom, hd tv sets, and you're right in the arena. you can sit where we are now and you'll be able to see the arena from here. fabulous product. again, more than 85% are committed at this point in time. there are very few left. and, again, just like event level suites, which were sold out last year which were introduced for last season, these too are going well. >> i know you can't confirm but we're hearing around a million dollars is the price. tell me about the transformation number. $980 million. people think that's crazy to redo madison square garden.
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it's basically the only thing that you could have done. on $980 million, based on what you've sold so far, are you going to be able to, you know, make money on the transformation? >> first, we're sitting in the world's most iconic arena. instantly recognizable on the outside and the inside. on top of penn station, the busiest transit hub in the world. madison square garden first opened its doors in 1879 with the first madison square garden. this is madison square garden four, which happened in the '60s. the transformation was the only thing to do because when you have an historic icon people have so much passion for, you go and you transform it. you don't move from it. but $980 million estimate that's been in the market, you know, our products have been unbelievably successful to date. as i said, our event level suites sold out. the sponsorships that have come on board, the food, the merchandise, the season ticket sales, everything has been doing wonderfully. we expect that to continue. >> my last question for you, you've raised prices across the
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board with the transformation. what's your take on the economy? it seems like the theme of everyone who's come on cnbc is value. even if prices go up, if there's a perceived value, then it works. what's your take on that? >> yeah, i look at it as sort of a flight to quality. i mean, our business is very good here. people are buying the products and services that we're offering. it comes with the quality that you get at madison square garden, that you get at radio city music hall or the other events. our business is thriving. >> hank ratner, president and ceo of the madison square garden company who told me before this interview he likes the revenue of game seven, but would rather not have it. guys, back to you. >> thank you very much for that. in the meantime we have another market flash with our flash man, brian shactman. brian. >> "street signs" always looking for what you deem hopium. it's interesting to look atticer o. it's realty income corp. they have a new credit facility replacing the old one. what's really interest sg they're doubling the size from
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400 plus million to a billion. it's trading at the highs of the day. it's a commercial real estate reit looking to go out on the prowl in the acquisition space. >> thank you, brian shactman. up next, the new bing. >> we are going to get a first on cnbc from microsoft of the newly redesigned search engine. folks, it's very cool. we got a chance to look at it. it has something that google doesn't and can't -- you're going to want to see this with bing, we're calling it the big bing theory because that's what we do. we're back after this.
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after th. we have product x and we have product y. we are going to start with product x. the only thing i'll let you know is that it is an, affordable product. oh, i like that. let's move on to product y, which is a far more expensive product. whoaaa. i don't care for that at all. yuck. you picked x and it was geico car insurance and y was the competitor. is that something you would pay for year after year? i, i like soda a lot but for a change of pace...
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welcome to the world leader in derivatives. welcome to superderivatives.
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microsoft stock having a nice year so far. it's up 18%: well, today they are changing up their bing search interface. first on cnbc for the announcement, microsoft vice president. with all due respect, we'd say it's a tweet to bing. we haven't had a chance to see
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it but i think it's very special because of the facebook integration, something google cannot do because you guys own a part of facebook. how big do you think this is going to be? >> well, we think this is the next generation of search and other core belief is that there is always at least one person who can answer a question if you type in a query. so we're dedicating a whole piece of real estate where we will start with relevant people for every question that you type in. >> so basically you are taking on google. do you think you are going to win this? >> we are getting great feedback from our customers and we're going to be very competitive in the marketplace. >> because that is the hard part, right? the hardest part is getting somebody to move from google or yahoo! to being -- to give it a shot. now you've got this facebook angle where you can integrate if you choose some of the facebook feed into the search.
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how are you going to sell this? how are you going to get people to make the first switch over? because put one foot in front of the other, derek. >> absolutely. it starts with a great product. we're announcing it today. we have facebook integration and we'll start with relevant people. we have about 100 million customers in the united states today so they will be able to experience this throughout the course of the months. it's getting great feedback from the people using it today. as those users use it, it gives them a reason to use bing more often and gives customers a chance to say why bing. >> your online division accounted for 3.6% of the total revenue. where is the future for that? what kind of growth would you be targeting in the future as a result of this? >> well, we invest over the long term. this search industry is a big industry. we're competing very hard.
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we're pretty proud of the quarter that we're projecting. >> when is it going to be out, derek? >> today you can go and sign up. bing.com/new. you can get an invitation. over the next couple of weeks we'll finish up the final testing and deploy it out to all of our customers. bing.com/new for an invitation. >> derek con nnell, thank you f coming on. silicon is down 29% today. a delay in the launch of the new storage product is expected in june and they are forecasting a loss for the quarter, not a gain. this was a $22 stock one year ago today. it's now a $6.5 stock. >> it's really tanked. down over 70%. where is herb when you need him? don't go anywhere because up next prince charles is is serving up some sunshine for you. you.
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well, it's unsettled as we head towards the end of the week. it will be cold and wet and windy under the most of scotland. we're under the pressure of low pressure and this weather front pushing north is bringing clouds and rain. the rain, of course, will be heaviest over the borders. >> i'm sorry. i shouldn't laugh. that was very disrespectful,
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especially from the commonwealth. >> he did a great job. cold and stuffy. >> that's going to do it for us. >> that was real, too. >> that was real. he and his wife, camella, very kind of them. >> from sunshine to tmi, for the first time ever, the sales of baby diapers have exceeded the japan aging population is massive. the sales depends also massive. the number of japanese over 65, a record 3% of the population and it's expected to grow to 40% in 2055. a host of social problems that we could talk about but we don't have time for at this stage. >> we don't have time for them so we're going to move on. >> you said we don't have time

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