tv Squawk on the Street CNBC June 11, 2012 9:00am-12:00pm EDT
having you here today has been a great bonus. we want to thank you guys. it has been a pleasure talking to you. >> sit a privilege to be the first family in father's >> happy father's day. >> make sure you join us tomorrow. "squawk on the street" begins right now. >> live from apple's worldwide development conference in san francisco where apple fanatics have their heads in the cloud as they anticipate what the company has in store. but before tim cook takes the age, we will have all the buzz worthy details to get your tongues wagging. >> give me, give me. i need. i need. >> all right. all right. all right. >> all that and much more as "squawk on the street" begins right now. >> good monday morning. i'm melissa lee. carl has made his way out to san
francisco. he is at the apple worldwide developer's conference where there is a lot of buzz surrou surrounding the world's most valuable company. >> for 30 years this is where apple has chosen to introduce new technology. this conference has become known as a play to introduce some hardware. the very first iphone a few years ago. when tim cook takes the stage today at 1:00 p.m. your time on the east coast, what's the headline? is it a new mobile operating system? a new siri? more clarity on apple tv? >> futures react to the best
week in stocks. the dow looking at about 99 points. take a look at europe. we saw the spanish stock market surge. giving back some of the games as the morning has gone on. the bailout rally. as investors realize they won't solve the banking problem or remove the uncertainty of the elections. >> a tighter relationship with facebook. we're on the ground with investors and analysts. >> and where in the world was bob? reports surfacing that he was on a plane as the exchange was
getting word. in the meantime, new data out showing facebook's u.s. growth may be slowing. back to the markets on this monday morning. off of their highs in the morning. fie naps ministers agree to lend spain up to 125 u.s. dollars to sure up the banks. whether spain will need a bail-out for it. spanish bond yields spiking back about 6.4%. is it really any surprise given that we knew the talks were going to take place this weekend. >> it doesn't surprise me. i do want to point out that this was better than what we expected on friday. we don't want to come in and say this is ridiculous. something positive did happen. i know that putting more debt on top of debt is not a great thing. i also know that we don't have a lot of details.
i think that is a positive. >> you know, i think that's a good point. this is a positive. this is what people have been hoping for. of course the market is going to look through it and say it will add 100 billion euros to the overall debt situation in spain. the money cannot be given directly to the banks. it may become a european spablt mechanism. the deficit as a percentage of its gdp -- >> the question here is what format, what structure will it be in terms of the payouts? there are a lot of unknowns
still involved with the bailout package that need to be worked out. >> the thing that i like, being american centric myself, i felt if something didn't happen we would give back all of last week's gains. if something did happen. they were very good on export and import from china. we do feel a little bit better about china and spain. it allows us to focus on things like apple. any time we do that, i'm not saying that president is necessarily right. we can focus on what does it mean on corporate earnings. we look at some of the upgrades. that's where i come out.
>> windows seem to constantly contract in terms of the time that investors have saying okay. i can focus on u.s. stocks. maybe, in fact, as is so of ten been the case in the two and a half-year-old crisis, it just brings on the nice signs of the market. >> it's so funny. i came in worried -- last week i would have been worried about moody's downgrades. i mean, the same themes. i cannot blame people at home for saying -- i mean jeez. we have got facebook and bob on an airplane. why couldn't he come back saturday.
>> spain's prime minister said this is going to be a bad year. >> it's going to get worse. at the same time in terms of this crisis rearing its ugly head. we will hear from corporation who will be impacted by the currency, by the euro being stronger. >> i like companies that have less exposure. and i like them still. if you have less euro, you will have less earnings report. they don't ask to risk it. instead what they say is the trend is not your friend. the elections are a week away or less.
greece has gotten its bailout. if they walk away from it all, it is so much of a larger economy and so much more important. if it goes the wrong way and he wins, then we have got a whole new ball game and we sitting here talking about a lot of worrisome things. >> we ruined father's day. a very important day. >> i'm sorry. >> it's not over yet. it's a hallmark holliday anyway. >> they are watching squawk on the street. >> later on today at apple's developer's conference, tim cook expected to show off new iphone software. provide more details on future releases of malcom x software. cook will have a tough act to
follow. here is a look at the cover offer fortune which reads how tim cook is changing apple. talking about leading the company into a little more ordinary company. a way in which engineers are not ruling the roost. not given cart blanch to create something beautiful. a lot of discussion about his improved relationship with investors. not just because of the dividend but better relatiops with government officials. and since he took the job. >> he addresses the shareholders. the shareholders matter. there was a bit of contempt for the shareholders by steve job. tim cook doesn't have that. this is a very important call.
i would love to hear apple saying look. here is a road map. and it's a good one and you should by the stock. tim cook seems to care about stock. >> he didn't care. >> it's also very, very fierce week, a fierce year, guys, for tech. windows eight comes out later this year. google is having it's io conference. loyalties with developers. they tend to now be a little more loyal. they get a little more revenue for their apps, but those loyalties can change easily. we will see what they bring to the table today. you can imagine the emotions around this. the line building already around the block. this is essentially a huge party for the bay area in general.
in the past year they have had a big name band come to play. cake, bare naked ladies, the wall flowers. they bus people out to corporate and do show and tell there. this goes on all week long. it's hard to put into words the excitement here in san francisco. >> is there any sense of this year there being more interest? this is tim cook's first worldwide developer's conference. last year it was steve jobs. i read in the new york times that apple lowered the age requirement to 13 from 18 for the conference because of demand. talk about a new demographic. 13-year-olds. >> i have seen that, too. the encounter that cook had with the shareholder. he is obviously using the beta of apple tv.
up until that point if it was not on cnbc or espn, he probably had not seen it. >> i like that. i like that as the soccer. it is the irony. one country. trying to avert the bank lines. >> what's longer? the line at the developer's conference or the virtual lines at the banks? >> that's why i want to be here. better place. >> it will be 1:00 p.m. eastern time when tim cook actually speaks? >> unlike jobs, we do not expect
him to hold court in a jobs way. he may give a brief up front and delegate it to some of the unit managers, but we will see. >> we have got to talk facebook here. >> and the five hour absence of the nasdaq ceo during that afternoon. he flew from facebook headquarters to new york in business class, unaware that the phone in his seat did not work and that he did not have wireless access. he believed that it had already been solved at the time of his departure. i don't want to say i don't believe him but something doesn't jibe here. assuming that the time line is
correct. the fact that people couldn't get confirmations of the orders. according to this time line, at 12:14, that is when greifeld's flight left. it would imply knowledge of problems at around the time that he was getting on that airplane and he still chose to go. >> there is a board of directors. i just saw the list of the board of directors. it is a good question to say why didn't you wait until the close. look, we couldn't get the thing open until 11:30. that was one of the worst things. everything went wrong. you don't need to be on a plane that day unless you got something really spectacular. >> no questions tooz whether you needed to be there at all.
of course it's knock really goes on there that can't go on in california or anywhere else. we couldn't get ahold of anyone anyway. it is interesting that he was not in the loop and the fact that this was a significant crisis for exchange in the highest profile ceo. and another action that has alienated the retail investor. that much is very much unclear. we will never know the answer. >> left messages. the ceo of the nasdaq on the biggest day when there were the biggest problems? >> corporate america will diverge fl regular america. they would expect me to be fired if i did that.
i think he will keep his job and get a raise. he will do very well. he will skate and say that the media is attacking him because he had to get home for something very special. if we only knew that we would feel better. you can do anything. you can do anything. no one ever gets hurt in corporate america. >> i don't know if that's the case. >> i think the broad idea that nothing ever happens, i think boards are paying more attention. if you go along it has gotten better, it has not gotten worse. it doesn't mean it's good. i do believe that boards are more responsive. some will make the argument that
it will provide the new york stock exchange, which everybody says was a non-starter. he skated through that one. >> i can't believe we just found out about this. i feel like we let everybody down. >> there was very good reporting. >> maria actually asked him about the five-hour period. here is what he had to say. >> where were you physically? were you on a plane back to new york? >> not at that time. at 11:30, we obviously did the opening, which you showed. then we were on an open call. and 11:30, i was obviously on the phone. >> oh. i feel better. you know who was on the board of the nasdaq? the vice chairman of the american association of individual investors. what does he have to say at this point.
>> i throw my hands up. what's the market to distinguish itself has a reason to own stocks. >> we have continued to see the outflow which has been typical of the market action or the decision making for the last three or four years. >> why should they be? >> we talk about it all the time. you move into a bond fund? >> move it to your mattress. that place, you could cut it open and get a better return and know where the darn thing is and then go with the select comfort and probably switch it out. >> carl, rescue us. >> all right. when we come back, developers here at the apple conference in san francisco on what they want to hear from tim cook. plus an apple shareholders makes the case for the stock hitting 16.50. we will take more look at the futures. and the bailout in spain.
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developer's conference. the watch is on to see what the ceo tim cook will unveil today. some speculation he will announce the next version for apple's operating system to iphones and i pads. complete the following sentence. forg forget the i pad, the announcement will actually be -- >> some say it will be that the iphone will come in colors other than black and white. there is a rumor for everything. >> has this developer's conference been a catalyst for the stock? i'm not really sure that it has.
a catalyst to buy intel. s samsung making the inereds. are they going to demonstrate something that is better? >> obviously in the paper the other day, some discussion about how for years some images of a 3d map have leaked their way online. >> we got to take a break now. it is cramer's mad dash ahead of the opening bell. and let's take a look at futures one more time. the dow still looking at about 89. much more "squawk on the street" straight ahead. here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank, like no-fee atms, all over the world. free checkwriting and mobile deposits.
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>> investment bank kbw celebrating. at the nasdaq, cambio diagnostics, the maker of rapid hiv tests doing the honors there. >> you don't want to get too complacent. you were worried about the collapse this weekend. going under. they would then all our banks to go down and that didn't happen. last week we were thinking.
it's not like nothing happened. >> like you said, it has got to be considered a positive, but the market is already looking ahead beyond that. and we will see what impact there is from that. and you know, we're talking bank here which we know has been suffering. recapitalize the banks. we talk so often about spain. not recognize the losses from the popping of the real estate bubble. the stresses were real and a lot of the capital raising took place. that is what is extraordinary about what happened here. >> we not only took our medicine and we had t.a.r.p. but also had enormous capital raising that really helped instill confidence. it has never happened in spain. you are adding 100 billion
euros. third after ireland and greece. what will it mean in terms of the ability to finance the deficits. >> maybe it keeps the banks from dumping more property in the open market. these bank's balance sheets, they have so much property that they own. >> they do and they are so tightly linked with the government. using the ltro put in place to save the banking system six monlts ago. >> you have got wonder if the story will be the euro. that has been oftentimes a canary in the coal mine but something to watch. we are still seeing a decline in the euro. >> gold is not up. if it were really something that provide a little growth, you
would see gold going up. this is a great tell for what might be happening. look, america is stronger than europe. it gives you a chance to take. look at citigroup. over the weekend, city group says we're not going to return capital. >> it's hard to imagine that the banks are not going trade one way or the other. what would you do? you have seen these things move up 10%? >> begin to start selling them. they had a big lift. and the quarters are not going to be great. >> and you have the moodies. maybe priced then. >> maybe not. >> who knows. >> find the dips, sell the rips. that's the key. talking about what is not
working. ak steel is down 2.4%. weak, flat steel prices. and massive pension obligations there. it looks to be a specific call. >> i am surprised that they are doing well. >> we got to a mix of a potentially better than expected. >> that was somehow overlooked. i would have said wow, maybe the chinese feeling bold and more cuts. this shows you that something might be working. i think a huge up opening would been great. it's a trade. >> we should point out gas prices being down yet again though i am not seeing a response from retailers.
>> walmart, a 52 week high. target unbelievable. and these have been fabulous stocks. domestic security stocks, i call them. >> technology is weak overall. relatively speaking. xlk is up over half a percent. it's up by more than a percent here. >> i want to see intel catch a bid here. i continue to believe that you will hear a lot about this ivy bridge. this fight has gotten hideous. these guys are suing everywhere. is this the steve jobs looks the other way and says listen, the best chips are samsung? or does he say we got to end this idea of really keeping afloat our biggest competitor?
>> i think there is a war going on. >> you do? >> yes, i do. >> would it be in apple's interest to do that? >> i think intel's opening three fabs. they are meant to be able to provide communication chips to apple. intel is ready to meet that demand. they know that tim cook is not going to say let's continue to give samsung billions of dollars worth of business. >> bob? >> thank you. you know, i'm getting a little bis nostalgic. remember when the bailout packages actually had legs? we had a rally that lasted for weeks on end. now we get the overnight announcements and they barely last into the own. spain was up 5.5% overnight.
the rallies are not getting much in the way of legs. fitch came out with a bullish note this morning. they said 100 billion euros covers a housing collapse in ireland and is at the extreme end of our stress estimates for what the banks need. said the whole plan was credable and generous and a lot of others. one guy said this is like putting a band-aid on a tumor. there were two major concerns. number one, where is the money coming from. most people feel that it's coming from european stability mechanism. that means that the spanish
bondholders themselves are now subordinate. this all gets down to the write down issue. the write downs and meaningful restructuring requires the write down. how can spanish banks fund themselves? how do you do that if senior debt is impaired? who's going to buy that debt. and is it going to do what it's supposed to do immediately? most people noted dpos it insurance is not part of this plan. short term maybe lit be a little bit of a slower jog than it has been. that's going to be the most important thing. i know what is going on in china. maybe there is such a thing. the chinese bank lended and expanded. a lot more than most of the estimates were. most of the analysts that were cited specifically said that the chinese government did have
infrastructure plans available and that is now having a ripple effect on the chinese economy. there is a little bit of good news. >> i thought that was great news. the numbers shift immediately on a rate cut so you get more rate cuts and suddenly you have a good growth story. i don't want to minimize china. i thought a lot of the rally was because china cut. i think we're all suffering from we in europe and not recognizing that china could be better. let's shift to bonds in the dollar. go ahead, rick. >> you know, if we look at all the tenures around all the major areas of europe and the u.s., a picture starts to merge. look at our tenure. a range of about 162 to 172. obviously the 172 yield was a knee-jerk reaction. we don't know all the details yet. look at the boom. it was into the 140s before it
moderated. look at the ten year in spain. it is going the other way. it started out, of course, the opposite with a lower yield on the initial shock but it's moving higher. maybe the most disturbing is the italian tenure as it is getting closer to 6%. what are the credit markets telling us? according to many traders on this floor, they are telling us that many leaders in europe want to buy with these packages. i don't know how this is going to turn out but we will of course really watch that psychological area in the boones which many believe is 125 on the low yield and 145 to 150 on the top. jim, back to you. >> a great point. the futures in our country started going down when spanish interest rates went higher. no one thought that was going to happen.
energy stocks are trading higher. >> oil futures are trading higher as well but well all of their highs from overnight. now we are just up about 23 cents. keep in mind a lot of traders here are skeptical about the spanish bank bailout as well. record level of imports for may but keep in mind that china did the same thing in '08 in buying oil at a time when it was really cheap when they could do that and then fill their sbr when they could do that. traders are skeptical about that here as well and you can see that in seeing the net long positions reduced yet again. particularly crude oil and then goldman sachs saying that they see significant improvements in risk reward. they want to be long crude oil, natural gas as well as copper and gold. and finally looking at gold it
seems to be an identity crisis for here for the gold market. is it a safe haven or a risk asset. factors will create a safe haven status. david, we will see if we get a rally. back to you. >> thanks very much. something we followed closely here of course is the impact of netflix. not just the stock itself. i think new lows that we have seen there but the overall impact on content and how it is used and digested and the impact it has on those that produce it. one name that has come up often is vie come which has seen substantial declines. that being the nickelodeon network. ratings have been in free fall as compared to many of its competitors. take a look at that chart. and that has colored people's approach to the stock price
which we should point out is up 1%. a number of analysts have come out and said it's netflix. it's kids. they're watching sponge bob. they're not watching it on air any more but on youtube and netflix. but this morning mike jacobson said you know what? we don't think that's the case. we believe it's really because, well, they got fatigued content which is a new one. >> what does that mean? old and boring. >> tired content. they will never say that about us. >> i hope not. god forbid. >> you talk about not enough new charactersome. >> not enough no characters or shows. conversations with competitors. content cycle most likely causing the triple standard decline. they do point out that nick tunes and nick jr. ratings are up along with almost all of
their content on netflixs and disney has not seen the same declip despite much of its content also being available online. who knows how it will be answered. people point out that it is trading for its part at some decent multiples versus the market and buying back a lot of stock. >> the stock is up because they keep buying back the stock. >> when it comes to media, that seems to be the overriding theme. reducing and shrinking your cap through significant buy backs. >> okay. let's go to the bell ringer today. >> tom it's great to see you. we have spent a lot of this
morning talking about the spanish bank bailout and the impact on business. are you seeing that continue to be a major theme, a cloud on your business? >> absolutely. we are seeing it among our investor clients and corporate clients where these -- both of these groups are not able to make decisions about their future until they know how some of the macro issues are going to play out. >> are you seeing evidence of any sort of investor flight from the euro zone? we are continuously hearing about people pulling money out of banks but in terms of assets, are we seeing that at the margins? >> as long as this environment continues, investors will don't derisk. the euro zone is seen as one of the more risky areas of the world and we are seeing that happen. >> we have got the downgrades that continue to happen. is it in the stocks?
i find it is maybe the most talked about downgrade we have ever seen froody's. >> after if loss for j.p. morgan overseas, we think that this downgrade has been widely publicized already and already in the bonds of the company. >> could you raise money for spanish banks if you had to in the capital markets? >> that's tricky. i think you have to have the final solution. i think that the actions taken were an important step along the way. what are you going to do with sovereign debt? what decisions are they going to make and i think enves tors will want answers. >> we have been dealing with that dynamic for years and it has had a particular impact. >> to be honest with you, we have been thinking a lot about the past 50 years. i go back to when news century failed. that was the first pitch of the whole cycle.
and here we are many, many years later and we are still talking about it and we need policymakers around the world to act. >> surprised that city decided to give up? not going to put more money? what is going on at citi? >> our opinion along that is by the time they file the application they won't hear back until the fall. to only have two and a half months to execute the plan, my guess is they made the safe decision to wait until next year. >> what about activity in the capital markets overall. it would seem it's a difficult market for everybody. how are you going navigate it and how have you been. >> we're going to do what we have done. our model has not changed much over 50 years. we have a lot of our own money in the company. we are unlevered, which is why i think we are celebrating our 50th anniversary. we have got a lot of cash on our balance sheet. we're going to add value and we have got great clients who
compensate for it. >> i got to ask you about facebook. do you believe there are ramifications on how capital is raised? if you have a take on the nasdaq and what it's going to compensate its clients. >> i don't have an opinion on nasdaq. i think it was a bad event. not so much about how the stock traded. that's a mechanical technology issue. i think it's bad that the stock went down a lot right away this is one of the biggest well known ipos in the world's history and to have it trade like that suggests that i think a lot of folks have to make sure they are paying close attention to how these deals get priced. >> thank you so much for joining us. carl, back out to you. >> if you guys try to go to the apple online store this morning, this is what you're going to see a billboard that basically says we'll be back. we're busy updating the apple store for you and we will be
back soon. we might see a reslamp of the malcom x line-up. what will tim cook unveil at the apple developer's conference. complete the followk sentence. today apple is going to unveil blank. you can tweet us. your answers are coming up. take a look at this morning's early movers. back in a moment. i went to a small high school. the teacher that comes to mind for me is my high school math teacher, dr. gilmore. i mean he could teach. he was there for us, even if we needed him in college. you could call him, you had his phone number.
you just need the right professional to help you take charge. ♪ >> we're live at the apple's developer's conference. we want you to complete this accept tense. forget apple tv or a new operating system. today apple is actually going to unveil what? apple will unveil a hologram of steve jobs showing us a new iphone and macbooks. the tenth planet and it is
populated with ipeople. and forget it all. they will unveil the icar. siri will be my personal driver from now on. and finally an alliance with rim. that would be a real surprise if that actually happened. >> that would be an apple killer. >> that would be an act of charity. that doesn't happen. >> there are people that are not comfortable with siri. there are people that feel that siri doesn't understand people. >> i heard so many people who cannot connect with siri. >> there are some lawsuit s pending because they say the real life experience is not reflective of what happens in the ad. >> i did ask siri to tell me a joke. she said she didn't understand. but she directed me to a diner. >> you are still happy about that. >> that was a good thing.
>> i'm at exit 51. give me a good diner. >> she delivers on some points and let's you down on others. >> siri is 50/50. >> yes. laces? really? slip-on's the way to go. more people do that, security would be like -- there's no charge for the bag. thanks. i know a quiet little place where we can get some work done. there's a three-prong plug. i have club passes. [ male announcer ] get the mileage card with special perks on united, like a free checked bag, united club passes, and priority boarding. thanks. ♪ okay. what's your secret? [ male announcer ] the united mileageplus explorer card. get it and you're in.
♪ >> 66 stocks. 60 seconds. >> i love this. down and up. you should buy it. >> duke energy. >> it has had one of the biggest moves in the utility business. >> invidia. >> there is always something that says now is the time to buy it. >> ubs. >> all right. kroger. >> you want a super market chain you buy whole foods. >> and harley davidson?
>> it has been a huge -- i think that it can go higher. >> that is still a $30 billion marvegt. >> i am revealing a brand new name. that's just called a tease in the business. i am comparing zip car with hertz. which is the one to buy? not the one to use. >> and finally smooth on dtg. we will see you at 5:00 for "mad money". >> i like to move it to 6:00. brand new. >> get me out of this. >> still to come, an apple bull has a stock price of 16.50 in his sights and a round from
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>> good morning. welcome and let's get to the road map for the next hour. how long will this rally last and what is meant for the u.s. markets as we gear up for the greece elections. >> tim cook is preparing to take the stage in san francisco. we're live from there and we have one analyst sticking by his target of 16.50. find out what he is hoping to see over the next couple of hours. >> get their read on the latest technologies to hit the apple scene. and what it could mean for your money. >> this after spain secured aid for its banks.
very good to speak with you. >> good morning. >> has anything changed in your view because spain has secured a bailout? >> if you think about the european banking system within the context of what happened in the u.s., there are three legs. >> sure up liquidity and funding. we did it through the program. the program is inferior to that in a lot of ways. we are talking about the insurance scheme, trying to avoid the bank run. that happened for us when the economy bottomed out. if you look at the growth
numbers, there is no real prospect coming to that. it's an important step but it's clearly they have not gotten all three parts of the banking system problem resolved. it's problem. we don't think that the situation has run its course. the sell off has not run its course either. >> let's cut to the chase of your prosqulexs. your end of your target is basically where we are now. within that two things are going on. on the one side you say that you are shifting bond cyclical. you have down gladed tech and you are upglading utilities. but you also think that there could be.
>> we have seen a series of moves. about five weeks or so ago. we do anticipate a buying opportunity later in the summer. i hate for it to happen similar ly. if you think about the drivers, you have got a bottoming out. you have additional monitor policy which i put well behind the growth outlook. and then in 2010, we had optimism related to the elections. as you get there. at that point we have been looking to add cyclical exposure. >> how big do you think that rally could be and how nimble are people going to have to be. potentially get out.
>> it looks like the republicans will take the senate and keep the house. even if you are worried about the presidential election, you probably can get it around the fiscal and entitlement reform. >> i'm sorry to interrupt. what snare scenario is the basis for which you say? >> correct. much like what happened in 2010. remember we were staring at the bush tax cuts at the end of 2010. we had a very good rally from the end of september right through the elections. there are a couple of things that could happen.
a another one that would be if obama's approval rating goes and looks like mitt romney is going to win, which it does right now based on a lot of state polling and approval rating and analysis of prior elections. that would be a scenario where the markets would power right through it. so i think the bottom line here is between now and this time of year from now, we will get three and four month rallies with corrections. we don't think we're done with the latest correction. we are talking about lower stock repurchases. aren't you negative at the end
of the day? >> we have been very negative since the beginning of march we have been looking at a substantial sell-off. as i said, maybe two-thirds of the way through it. maybe half way through it. we are fairly negative. we see public policy and certainly pairing capital spending. and we do think we have a very strong trajectory. my point about those elections, that could be the trigger for the rally. between now and say, you know, the beginning of august, we don't see much that could really go right. >> barry, good to see you. >> melissa, thanks. all eyes and ears on apple today. good time to talk to an apple shareholder. our next guest is an uber apple bull. a core position for several
years now. he expects ap toll hit $16.50 by the end of the year. we're not talking $16.50, but 1,650. we had this conversation back in march. right now the online store is down. a lot of anticipation that we will get a malcom x refresh in a few hours. that was one of the relative disappointments in the next quarter. how much of your case is built around mac's continuing to gain share. >> i think mac is definitely under apraeshuated. they will be a relatively small part of the apple portfolio. the three things that will power apple by the end of 2015 are iphone first and foremost. ipad which has had a phenomenal launch in the last two years, and i am a big bull on apple tv. obviously that is what is still
to come and i am expecting it to come by the beginning of next year. >> would it be disapointing to you if it did not come today? >> i don't think so. it's unusual at a these conferences to have product announcements. some people are speculating maybe there will be something about iphone 5, maybe something about tv, i would not expect a product launch. i would expect interesting details around the new ios 6, specifically around air play, which i think will be one of the most revolutionary new fuchs of the tv. >> a big piece in the "times" talking about apps and their developers and relative loyalties. how much of what apple does from a stock perspective pivots around the stickiness of developers and making sure that they are getting enough revenue to keep them happy and keep them in the fold. >> developers matter, certainly.
but developers obviously follow eyeballs and users. so i think there is a direct co-relation. there was an interesting study ta said something like 60 to 70% of new projects were ios projects versus 20% for an droid. that is actually a rough comparison to the amount of browsing time. people whoo youz apple products tend to use them more completely and with full internet access. >> so to that point, what we have seen in apple in its climb to this point is the market share loss and the market valuation loss of a lot of other companies that. operator: within the same eco-system. what is predicated on your call for ap toll go 16.50? what other stocks will be losing business and capital and maybe go out of business as a result
of apple climbing to that price? >> i mean the telecom industry has been devastated by the iphone five years ago. there are few companies that are turning a profit. i am expecting a similar revolutionary change to the tv industry. it will hit the hardware, the tv manufacturers, i think, hardest. i am not so bearish when it comes to the cable companies. there is no question that it will ruffle a lot of feathers industry wide. >> yeah.
china is a big talking point. interesting note in the past couple of days. if you look at rising incomes, you could be talking 80 million phones in china. forgive the siren, by 2017. that would be an additional $12.50 in earnings. how critical is china to your view? >> china is a major part to the story, no question. a couple of years ago when i got back in the stock, it was after a few trips to china and you realize how gaga they are for apple. that's doable when you consider that samsung shipped about 90 million phones and that includes the dumb phones as well as smart phones.
it's possible as the shift from old technology happens. >> finally, tim cook and his relationship with the street. is the dividend indicative of someone who has investor's interest more at heart than steve jobs did? or does he have more jobs in him than we think? >> he is trying to be a first rate tim cook not a second rate steve jobs. everyone appreciates that part of him. he has got a great team around him. i said six months before steve jobs died is i think his
greatest legacy is going to be the succession plan that he left behind and tim cook is central to that. >> yeah. interesting quote. >> eric, thanks so much. eric jackson joining us from toronto today. >> carl, time now for market flash. brian? >> melissa, thank you. underarmor decided it wants to split its stock. it will go for a two for one smith. this company stock has grown eight fold since it went public back in 2005. the ceo now a billionaire, a true great american story. underarmor putting its stock in 3%. >> the market coming back down
>> six days from now. greece will go the polls and cast a general election on whether it stays in the euro zone or not. how does the country lead the euro and get a new currency. good morning. >> good morning. so many analysts come on cnbc and say all the time greece should leave the euro so they can print their own currency and devalue their way to competitiveness but printing currency takes a really long time. let me give you context. printing 1 billion words. we used the same figure and drilled it down to what greece's capacity is. they estimate that greece needs
375 million paper notes. they only have one printing works and only one mint. their estimated capacity on paper is 67 million notes per month. if they use only that press, it will take six months to actually get a physical paper currency. we do know, for example, they would need 1.5 billion coins. the canadian mint has the capacity of 5.5 billion, australia has 2 billion koints. it would take australia two years to print the amount of coins. it's not as easy as it soundsment once they decide to do it, there would be a lot of
lag time and uncertainty in between. >> and let's be clear. if we are actually talking about greece leaving the euro zone, what we mean is that it is left out of the european system so its banks collapse and the government collapses. the bapging system will have ceased to function. that's the reality. >> you could use debit cards. the six months that it is estimated to physically create a curren currency? you can actually start doing things electronically long before the currency exists and you tell people that you have to do everything electronically or barter or use imp ous. >> and we will explain exactly that. how do you come up with that number. that's coming up in "power lunch". >> interesting times, michelle. thank you very much.
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>> take a look at facebook shares. earlier they were up as much as 3%. apparently facebook is on the preliminary list to join a new index. so we're seeing a little bit of a pop here. >> the bounce for the spanish bailout has been a race. >> all right. here is a question. does where you live determine how much you make? an unprecedented redistribution of jobs, population and wealth is underway now. the new geography of jobs. he joins us now from apple's worldwide developer's conference. enrico, great to have you with us. every time we come out to the
valley, people say this is where it's all happening. why is it working here? why is it so difficult for other cities to recreate this magic? >> well, one of the reasons why companies succeed here and workers succeed here is not because they are smarter than everybody else or work longer hours, but because they are consistent. >> these dynamics have gone up multiple decades. >> it's very thick. it allows workers and companies to create a match. so many companies and so many workers that you can find the
best talent for the right company. >> trying to do what silicon valley does. which ones have had better success? what are they learning. >> in the u.s. you will see probably 20 large innovation parts. the traditional role in boston and new york. but you also have new one like boston is probably the biggest success stories of the past 20 years. they were not much of an economy. now they work less. one of the best and most creative labor forces this the planet that started the ratings there. >> we are sitting across the street from apple oes conference. you write a lot about your book.
it is engineered here. largely made in china. when it comes back to port, really the only hand that touches it from the port to your house is the ups guy. apple has borne some criticism. >> china makes most of the parts for the i pad. the job here in the u.s. one job indirectly supports five jobs well paid in that community. those include bashers, waiters and taxi drivers, doctors, nurses and more. apple has 13,000 employees here. but all the money supports
70,000 additional jobs outside apple. which was an interestingly, apple made an effect on the local economy. >> it's the multiple factor. >> it is a multiplier. >> the book is called the new geography of jobs. anyone interested, it's worth a read. thank you very much. >> thank you. >> from the university of california. simon over to you. >> let's quickly touch back on where we are in the markets. brian? >> thank you very much. i want to focus on one name in particular. the markets are now turning down. the fresh market and secondary offering. that company getting cut to a sell at goalman down 9.8%. a lot of concern about global growth. u.s. steel is down in sympathy
as well. back to you. >> thanks so much. no points. we are seeing the u.s. dollar cost. that is down by about one full per september amg point. compared to what it has been earlier. it was at a three week high. >> one of the things that is very interesting is how the market knows this story inside out. immediately somebody happens and now all questions are asked at the end game. what does it mean for subordination and these questions. your ability to create a balance is diminished now. >> find out what they want to hear from tim cook next. o go. more people do that, security would be like -- there's no charge for the bag. thanks. i know a quiet little place where we can get some work done. there's a three-prong plug. i have club passes. [ male announcer ] get the mileage card with special perks on united, like a free checked bag, united club passes, and priority boarding.
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>> the markets now an hour and three minutes into trade. the hour is coming down into territor territory. which i now on my screen. >> i don't have that. >> i have it at 1.2531. >> it was just down a percent. >> he is a senior commodities broker. he joins us now. good morning. what is going on in commodity. what view are you taking? >> a lot of people on the euro currency were concerned about the size of the bailout. expecting something closer 150 billion on up to 200 billion.
they think in another three to six months, spain will have to come back front and senter and ask for additional money. the other big concern is greek and the greek election coming up. the concern there is which, you know, will the current administration or the new elected administration keep the current policy that is in place to stay with inside the euro zone. if they decide to come out of it, i think we will end up in another tail spin and start selling off aggressively. >> we're not there yet. that's a few steps out. phillip, with fear comes huge opportunity. where do you see the opportunity emerging? how can we profit from what we see? >> well, i think that you have got to go deeper in the commodities space. you got to look at markets like
the crude oil market. i think that the concern here i think that traders are looking at crude oil. going out to 2015. they think inevitably, some problems will occur and i think you got a long term bet on prices going higher. >> we will get some sort of announcement. certainly the emp cb. i don't know if the fed might join them on sunday night. is that a signal to buy? and if so what do i buy? >> on an extreme wash-out case, if you start to see the s&p 500 travel back down to around the 12.88, those kind of corrections, i think you have to look at buy iing a lot of peopl are anticipating maybe some
extension of operational twists is on the table. >> lrtd. our next guest says the excitement generated at the apple conference has served as an indicator of sales. it is all guessing until 1:00 when this whole thing will serve. maybe a little siri, some maces, what is most important? >> i think the entire package is what is most important.
and how they make that experience better. and everything they forget, these guys develop and they are really excited about it. we think they will be really excited to get access to siri, icloud and many other things we will hear today. >> you call them the glue? the developers? probably an underappreciated dynamic. but you say given all these innovations and new software potentials, potential to double the rate run sales of portables in the next few quarters. >> one of the things that people don't talk about is the mac business. our checks of demand potential, supply chain show notebook demand could almost double based on what we will hear today. that means the mac is not dead. if you double the run rate of the portable portion, it could
be a lot higher. >> windows 8 not that far out. they will make a quantum leap. you think try not to alienate those who already loathe the system. >> i think what yo will see from apple is an elegant transition to adopt ios features and whatnot. windows eight is a big change. i think this transition. and windows is doing one big jump so it's going to be interesting. apple has the trained population on their side. >> does apple have a window to gain share? does that window close or does it provide more opportunity? >> i think it's more.
>> some will be. some won't be. that's from the old times. you know, that is an old apple joke. >> i wonder why you think it's important to physically attend today. why you have to be there in the room. whether you had to race with the other 5,000 to get tickets or do you get a special deal at barclays? >> some of the sell side analyst and buy side get some passes sometimes. but i think it's important to be there to take the pulse and see what they are saying and see what they want to do. you have to come to this to take the pulse of the developers, take a pulse of the excitement. it helps you forecast. >> ben, thank you very much.
>> thank you. >> david, back to you. >> thanks very much. as we have said many times, all eyes are on apple ahead of today's big keynote address. up next we have got a panel filled with some of the biggest app developers in the world. we're back in two. ♪ ttd#: 1-800-345-2550 let's talk about market volatility. ttd#: 1-800-345-2550 in times like these, it can be tough to know which ttd#: 1-800-345-2550 way the wind is blowing. ttd#: 1-800-345-2550 at charles schwab, we're ready with objective insights about ttd#: 1-800-345-2550 the present market and economic conditions. ttd#: 1-800-345-2550 and can help turn those insights into ttd#: 1-800-345-2550 a plan of action that's right for you. ttd#: 1-800-345-2550 so don't let the current situation take you off course. ttd#: 1-800-345-2550 talk to chuck. ttd#: 1-800-345-2550
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>> shares of facebook up 1.7%. we want to know where you see the bottom for facebook shares. you will have until tuesday, about a week before the month anniversary of its public debut. you could win a fantastic hoodie. it is a true collector's item. >> how does that work. let's say it has already seen the low, can everybody just pick
the low that already occurred. >> that's why we do it a week before. >> and there is a week to go. >> and then there is a blackout period. >> we thought of all of the different scenarios. >> still to come, we will sit down. and a big keynote address coming up at 1:00 p.m. eastern. we can't wait. good morning, rick. >> good morning, of course the topic today has to be spain. and really spain is so unique. we have talked about it for several weeks. it's really more about real estate and the problem we have seen in this country with california, florida, nevada. we will talk about all the issues and will this bailout actually work? they're not calling it a bailout. that's part of the conversation as well. see you at the top of the hour. . so we have ongoing webinars and interactive learning,
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$5.62 as we are outside of the apple developer's conference. the apple faithful gathering here. some of the top developers in line to get in. some of them actually joining us on the corner. and calvin carter, men, good morning to all of you. thank you for being with us. a lot of discussion and speculation about what tim cook and the team will say today at 1:00 p.m. eastern. what are you hoping for? what's important? >> there are big improvements in the ios operating system. inner operaability between apps. siri. so you could open your cnbc ap and say apple and it would tell you what is going on. i think it will be huge for developers. icloud improvements and the enterprise market. they will address that this
year. >> a lot of talks about maps. how key is that and how long has that been talked about? >> i think maps is really at t landscape of how maps evolve on the iphone it's not been anything. but now i think we are very excited about how apple is going to give us the ability to do, you know, do different things with the maps. so we are super excited. >> yeah, calvin, level of enthusiasm today? this is not the only big developers conference going on this month. there'll be another one at google in a few weeks. >> sure. this is the olympics for our industry. the great thing is that it happens every year versus every four years. this is where the best of the best in the entire world come. it's amazing the quality and caliber of developers and designers you get here. to get all that knowledge directly from apple as to what we'll be able to work with over the next year. >> you said there's nothing like if you're developing an app dealing directly with the guy
who wrote the code your prokt's going to be based on. >> exactly. >> the ratio of developers to apple people is pretty good. >> phenomenal. >> you're able to get a lot of work done quickly. >> phenomenal. we could get a couple of months work done in the next couple of days working directly with the guys who wrote the code that we're using to build amazing apps. >> interactive tv. the discussion. you say apple's great at timing their technology for when the country and the world is ready to get it. >> yeah. >> is the time for tv now or later. >> i think it is about now. i mean, i was at aol time warner when we were messing around with it 15 years ago. huge investment. never worked out. i think the timing is now people are now ready for it. they've texted it with the current box. i think over the next 12 months they're going to launch it in a big way. >> you agree? >> i absolutely agree. but at the same time, i think it's important to launch it the right way because that will influence how well they can monitor the tv. >> apple's been working on tv for years. steve jobs said himself a couple
of years ago, this started out as a hobby. and it became real, they became serious about the latest revision of the apple tv hardware. we would like to see that operating system be opened up to the third-party developers. ios runs the apple tv. a lot of poeople don't know tha. that's not by mistake. we're excited about it. it's up to apple to make the final decision. most of our customers are broadcasters. >> big story in fortune this month about tim cook. in part about siri. they argue it's an embarrassment. that steve jobs would have lost his mind if siri was going on under his watch. has it been that much of a failure? >> i think for a lot of people it has been. think for some people it works great. some people use it while driving, for example. it's a great use case. but in general, it hasn't gotten where it's needed to be. i think a large part is it hasn't been opened up to developers. as soon as we can start putting it into apps and integrating it
into the whole iphone experience as opposed to it being a separate app, i think it's really going to change things. >> that's one of the things we could see today, perhaps. >> i certainly feel siri technology is not yet mature. it is a bit of a disappointment. because the whole point is you talk to it. it intelligently picks up things you want. but it's not happening. you know, especially while you're driving. it's like, you call someone and it picks up someone else's name. >> sorry. wrong number. >> wrong number. exactly. >> finally, talk about the enterprise. we're just now starting to get company issued iphones at comcast and nbc. you think this is happening in waves every week as i.t. teams around the country make the leap. >> we get calls every week from companies that say, we're putting our whole sales force on ios. we need an app that they can show the product to the customers at the client side, purchase the products, et cetera. i think that's over the next couple of years going to be a huge market. the ipad as well.
the ipad is really big right now in enterprise as well as education. let's not forget about education. these aren't the right numbers. it took, like, 20 years for there to be 20 million or so maces and pcs in classrooms. it's taken 12 to 18 months for there to be 2 or 3 million ipads in classrooms. this is amazing. this is just beginning. the very, very tip of the iceberg. the ipad is finding phenomenal applications across all industries. >> thanks, guys. enjoy today. thank you for coming by. speaking of which, tweet time today is all about apple and took cook as he prepares to take the stage at the tech titans worldwide developers conference. our question is this. forget apple tv or a new operating system. today apple actually is going to unveil blank. fill it in. tweet us @cnbcsquawkst. we'll get to your answers throughout the morning. polar shifts will reverse the earth's gravitational pull
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nonetheless, not a good sign for the markets as we see both yields in italy and spain up after a bank bailout of -- >> because it's one of the questions, isn't it? if you've got to bail out the banks in spain, do you have to bail out the banks in italy? all you get this morning is a series of questions in response to what they did over the weekend. >> $1.6 trillion economy. about $1.9 trillion in government debt. of course, 120% debt to gdp ratio, italy. all right. let's get over to carl. >> all right. yes, let's get to squawk on the tweet this morning, david, for a monday morning. of course, apple's tim cook getting ready to address the droppers conference. we're asking you to complete this sentence. forget apple tv or a new operating system. today apple is actually going to unveil what? a bunch of responses. one of them, apple is going to unveil ieurobonds. apple will announce a new wi wireless charger for devices that come in many colors. another good one, apple will be
unveiling a cider. for those of you who know how cider is made. finally, i sauce. you spread it on a device running a nonapple os like windows and it makes it just work. >> i like it. >> people have their devotions. >> especially appleoonians. >> what will you be showing me when i'm on the treadmill at the gym at 5:00 today? >> what will i be showing you, simon? we're going to be talking to the co-manager of the active bear etf fund. they bet on a green mountain short early in 2011. today green mountain shares are at a fresh all-time low. we'll be asking him where he's going with that trade. also, neel kashkari. collin gillis. he's going to give us his top pick going into the second half of the year. all that top of the 5:00 hour on "fast." >> all right, guys. i'll try to make it back to the table for tomorrow. i'll see you in the morning. in the meantime, if you're just joining us, here's what you
might have missed earlier today. welcome to hour three of "squawk on the street." here's what's happening so far. >> if the economy doesn't show any kind of rebound, i think that mitt romney's going to be the next president of the united states. >> one of the things the germans have not gotten right in this whole thing is you have to have pro-growth policies to get these economies back on their feet. so spain's put in tax increases. they're piling tax increases on greece, portugal. it does not work. >> i like companies that have less euro exposure and i liked them more on friday and i like them still the same. if you have less euro, then i have less earnings risk. >> he was talking about what he watches on tv. he's obviously using the beta of apple tv, whatever it is. but he said up until that point, if it wasn't on cnbc or on espn, he probably had not seen it. >> and here we go. opening bells ring on this monday morning. >> my point about the elections,
elections breed optimism. that could be the trigger for a rally. but between now and, say, the beginning of august, we don't see much that can really go right. >> i think apple's going to try to collaborate with cable. just the way that they collaborated with the hand set makers. but there's no question it's going to -- it's going to ruffle a lot of feathers. you know, industrywide. >> i actually think this transition to windows 8 could benefit apple. because they're elegantly merging ios functions with mac os functions. windows is doing one big jump. it's going to be interesting. apple has the trained populous, population on their side. >> sounds good, right? good monday morning. welcome to the third hour of "squawk on the street" live from apple's worldwide developers conference in san francisco. let's get a check on the markets on this monday morning. came in with futures riding pretty strong to the upside. lost quite a bit of ground here. futures premarket were up more than 100 points. dow is now down 42.
s&p is down four and change this morning. nokia shares trading lower this morning as well after samsung shot down rumors that it's interested in buying the struggling mobile giant. in keeping with the tech theme this morning, facebook's member and usage growth slowing sharply in the u.s. according to new data from com score. though that is partly because it's the most dominant site. the main areas of expansion are mobile and overseas. although neither has proved as lucrative, of course, as facebook's main business. get to the road map this morning on this special edition of "squawk on the street." a perfect day to sit down and talk with the former head ceo of hp, carly fiorina. she's joining us in just a moment. plus, top ranked apple analyst peter misek joins us in an francisco. his expectations heading into apple's big address. in keeping with all things apple, we'll be joining shortly by some of the biggest app developers in the game. talk some of the latest and greatest technologies to come out of the i economy. bring it back to the buzz first
surrounding apple. jon fortt joining me here on the corner of howard and fourth. always good to see you. interesting day. i'm struck by how many potential headlines we could get in a couple hours. because there seems to be a huge grab bag of things that people are either expecting or hoping for today. >> absolutely, carl. and people tend to really get wrapped up in hardware. we're expecting to see mac hardware today. i wanted to take a look at the numbers for investors here and focus in on what really matters. it's really more about margins than revenues. part of the reason why is because this apple story has turned into an iphone and ipad story. so the mac itself was just about 13% of revenues last quarter. even if they bump that up to 20%, it's not that significant considering the big picture. the iphone and the ipad were 74% of revenues in the last quarter. really what this event is about is laying the software ground work to keep that loyalty going that is so important to the carriers. that's why they pay a premium for the iphone. it's why apple's profits are so
high. stuff like maps is really going to determine whether that keeps going. apple taking that back from google, building their own back end to that. that should be interesting. >> windows 8 is coming down the pike not too far from now. you can either believe that this is apple's chance to grab some share before windows makes its big flash or as was argued in the last hour from barclays, windows 8 may be so much of a leap they might alienate long-term microsoft users and this might actually feed apple's dominance in terms of consumer use. >> that could happen, carl. i got a closer look at windows 8 about a week ago. and one of the things that struck me, it's really strong for tablets and the enterprise isn't going to adopt this for a year, year and a half at the soonest. so really, windows 8 is a consumer story at first. this is apple kind of giving a tease to what it's going to be offering consumers for the next year, year and a half. we'll see if developers buy into that. if they buy into that chances
are they're not going to be buying in as much into the windows 8 story. this is important not just for apple but for the whole industry. you can talk hp, too. there are people using ipads not printing as much. not good for hp's profits. we can talk about that a little later. >> people who knew i was coming out here this morning said, ooh, are we going to find out about the new iphone? chances of that are, i guess, what? slim? >> slim to nil. what apple is really smart about is not talking too much about products until they are ready to launch them. these days you can tell when apple's ready to launch a product because they start scaling down inventories of existing products. they're not going to tip their hand and get people to stop buying the current product right now. that wouldn't be smart. >> that said, there have been reports unconfirmed of trial phase production of an apple tv in china, right? so it might make sense if they start putting forward some platform tools for that. >> absolutely. and they already have an apple tv box. if they start putting out software, maybe developer tools for the tv, they can say, hey, this is for the box we've got now.
you can imagine how we might use it in the future. a brand-new product like a tv, they could tease to. because they won't kill current sales of something really important. but something like the iphone, they'll be very quiet about. >> stick around. we'll bring in carly fiorina. today marks tim cook's first developer conference at ceo. first opportunity to put his stamp on the company. he takes the stage at 1:00 p.m. eastern time. expectations are high. joining us with some perspective on cook's leadership, carly fiorina, former ceo of hewlett-packard, cnb contributor, joins us from washington. carly, good morning. good to see you again. >> good morning, carl. good to be with you. >> you've done this kind of thing before. although it's widely accepted that apple does it their own way. what's important for them and how do they approach, as jon just suggested, the strategy of letting developers know enough, but not so much that they give away the farm? >> well, first, let's say that the transition from a founder-led company to a company led by a professional manager, which is what apple is going
through, is always difficult. it's particularly difficult in silicon valley where founders are iconic. and it's exceptionally difficult at apple where steve jobs defines the icon of the founder. i think tim cook has done a terrific job so far. i think tim cook is his own man. he is his own leader. he is acknowledging that apple is a huge company today with a very broad and diverse shareholder base that he needs to pay attention to. he demonstrated he's his own man by making decisions like deciding to pay a dividend. but clearly he understands that the expectations are very high for his performance today. and i think what you saw from those developers that you interviewed earlier is they're less focused on it's tim cook instead of steve jobs and more focused on all the incredible things that they're going to be able to do. i think siri is a huge opportunity. it's an intriguing piece of software, but it doesn't work as well as it could and should. i think they know that. i think the enterprise space is
a big opportunity. and, you know, they have a lot more they can do with icloud and the ipad. never mind the interactive tv rumors going forward. >> hey, carly. jon fortt here. >> hi, jon. >> i'm interested in this dichotomy i see setting up between apple and hp. now, you obviously ran hp for quite a while. very connected with their printer business. it seems like the ipad is sort of diametrically opposed to printing profits. more people use something like that, they're not printing. that hurts hp. do you see that happening or am i looking at it the wrong ? >> no. i think in part that is going on. there's no question. when i use my ipad, i don't print. although i continue to print off of other devices for other reasons. but i think there's no question that the printing business at hp is going through a very difficult patch. i happen to think some of that is secular trends as you're suggesting, less printing. some of that is actually, i think, self-inflicted. too many years of failure to
invest in r & d and marketing. printing is a business that depends upon r & d and marketing, actually. >> carly, a lot of discussion about -- you mentioned that the developers aren't talking so much about cook himself, but a lot of other people are. big piece in "fortune" this month about how he's changing the company in "fortune's" view less -- to a company that's less interested in letting engineers do whatever they want, right, to make something truly beautiful and more worried about operational efficiencies, supply chain management, the kinds of things that cook was actually brought in to do 14 years ago. is that -- is that good, or should they continue to be the laboratory for the dreamers in the way that jobs set them up so long ago? >> well, first, i think it is a natural transition. obviously, this company with its breadth and depth had to be absolutely superlative at supply chain management, inventory
management, et cetera. so that's an important transition. tim cook isn't steve jobs. steve jobs was the developer extraordinary who in the end had the final say on absolutely every product. here's the thing. i said this at steve jobs' death. i think steve jobs' great genius was to understand that people do want a beautiful product and that how personal the product becomes says everything about how much they're going to use the product. i think that's actually baked into apple dna now. and people understand that an individual wants a beautiful product that is an extension of themselves. i don't think that's going away. >> carly, we're going to see what happens in a couple hours when tim cook takes the stage. it'll be interesting to see how it differs, jon, from the steve notes over all those years. carly, thanks so much. >> nice to be with you. thank you. >> carly fiorina in washington. let's go over to the cme group this morning, check in
with rick santelli. get the santelli exchange for this monday. good morning, rick. >> good morning, carl. the markets are pretty sparse. specially the credit markets. we all know what happened over the weekend regarding spain. what we don't know are, of course, the details, how the money, what the final numbers will be. arguably 100 to 125 billion euros. how it'll work. which entity will disperse the funds. many are refusing to call it a bailout. but i'm sorry. you know, whether it's default or bailout, it seems as though the one thing that's really occurred since the credit crisis is we now come up with different names for everything. but in the end, most do believe it is a bailout. and the effects have been, if you blink you missed it. we're already seeing 10-year notes in this country moving back below 1.60. we see spain and italy's rates continuing to move up. what really is interesting about spain is just how unique it is. i've seen several imf reports written in the last year or so that say for the most part, and we're just glazing over this,
their core banking is actually rather well run. and the dynamics of the country, their tax programs, pretty much unlike italy, unlike greece, their tourism industry doing well. things were pretty much humming along. it really is all about real estate. that is unfortunate. because real estate as we learned in this country is very difficult to come up with a solution other than taking that titanic hole of as many trillions as it is, $3 trillion to $5 trillion in this country, maybe, and trying to plug that hole up. but nobody wants to do that because it really isn't fair. just take all this money and divide it by all the people in the country and give it to everybody. it's a tricky solution. but the problem with spain is the leverage. i've tried to really get a handle on how bad -- whether it's residential real estate, whether you include commercial real estate. what i found is, is that today peter marishi from smith school of business had some numbers that were the most conservative.
what he was talking about is, you're looking at roughly 650 billion to 700 billion euros in terms of loans in an economy that's 1 trillion euros. so you could see that the leverage here is pretty large. so how are they going to fix this? well, this is the other downside to this quote, unquote, bailout. when you are opening yourself up for money from outside countries like germany, they're going to want to have some control. as we said, they're pretty well run. so what's going to happen is most likely growth gets impaired. so if you have a bad real estate problem, it is only all about growth. and when i was looking at what some of these houses were selling for precrisis and post crisis, boy, they're coming from a pretty deep hole. back to you. >> thanks very much, rick santelli in chicago talking about an important day in terms of europe as well. let's get a quick market flash this morning. back to brian sullivan at hq. >> thanks very much. an important day and not a good
one for diamond foods and its shareholders. that stock is down again. the company saying it will not meet its june 11th quarterly filing deadline for the nasdaq. it also says it will not be able to host an annual shareholder meeting by july 31st. and as such, die mond foods saying it expects to get a delisting notice from the nasdaq. it expects to get one, but said that it will appeal if it gets one. hasn't gotten one. but if it gets one, it will appeal any delisting notice. diamond foods going through all kinds of craziness with its accounting. the deal p & g backing out of. that stock down 71% over the past 12 months. >> what a story that has been. brian, thanks a lot. brian sullivan with that market flash on diamond. getting closer and closer to tim cook's keynote address. 1:00 p.m. east coast time. coming up next, we'll talk to a top ranked analyst on his thoughts on what to expect from cook as the tech world gears up for apple's big day. back in two minutes.
less than two hours from now, apple ceo tim cook will give his keynote address here in san francisco across the street at the apple developers conference. for more on what we might expect this afternoon i want to bring in peter misek. a buy rating on apple and price target of 800. good to see you. peter, welcome. all this discussion about what we might hear. let's go right to tv.
which some sort of say put lower on the spectrum of possibility. you think it's not off the table. >> not off the table. sharp on friday came out and more than doubled the utilization rate of their big sakai plant. you have to wonder who on earth could be the customer that's driving that demand? they're not selling tvs. no one else we talked to has been selling tvs. it's got to be itv. that's our view, anyway. >> you've gotten to be pretty good. because apple is so big when they do try to move within a market it's easy to see the ripples even before they want it announced. >> it should be easy to see given their size. we look at monthly production data out of asia they have to public every month. then we look at code. we spend time with developers trying to decipher what the code says. there's kernels that reference that large display. that large display could be apple tv box. our view is too much functionality there. it should be, it has to be an itv. >> would that be a nontraditional move? this is typically not a product announcement platform, this conference today. >> it used to be. last year was the first year we
didn't get a hardware announcement. a couple years before that we did get the new iphones. they have announced hardware here before. it's not unprecedented. it will be a full day. we do expect the macs to be upgraded. mapping software from 3-c being introduced. it'll be a full day. there's always a surprise at apple. >> how do you model, then, revenue impact from a television when it is announced? >> the big thing for us is it's a halo impact. if your household has an itv, chances are everyone has an iphone. everyone has an ipad. so it's actually not the impact from the tv itself, although that'll be nice. it's really the halo effect of all the other devices. >> you think maps could be a revenue generator on its own? >> huge revenue generator. think about how apple is moving into the ad world and how monetizing that ad is critical when you're on a mobile device. mapping is the gateway. that's something they need to control. >> taking maps, trying to get out of google maps, you think they might introduce a wallet, going away from google wallet. what are we seeing here in terms of them trying to divorce
themselves from well-known popular google applications? >> the issue is, it really is a head-on war with google. android is their biggest competitor. it really boils down to them wanting to control the eco system. it's from payments. it's from mapping. advertising and devices. end to end, seamlessly a great experience for users, a great experience for advertisers. >> do they need to apologize for siri today. >> i think what they'll say is siri was a first level. siri learns over time. you'll see siri get a lot, lot better. certainly it's gotten better since i used it more. they'll give you a token apology is the way we look at it. >> windows 8 later in the year. threat or opportunity for apple? >> we view windows 8 as microsoft -- for us windows 8 is not about pc, it's about tablets. frankly in tablets i don't know how charging the same as what an ipad costs can compete. we look at hp's win 8 tablet coming out, it's going to be tough for them to get a market share. >> 800, is apple your favorite
name in the space? >> absolutely. second top pick is msi. we love the name. a lot of market share still available for them to grow. >> finally, the pullback that we've seen since 644 or whatever that number was at the high, worrisome? not -- in the framework of what the market's done, not surprising? >> in the context of the market, in the context of how quickly it ran up, it was kind of healthy, actually. you kind of want that consolidation of the gains so it can progress further the rest of the year. >> peter, thanks so much. we'll see what happens. get rest on the flight back. peter misek joining us from jeffries in san francisco. still to come on this special edition of "squawk on the street" live from apple's worldwide developer conference, we'll sit down with an apple shareholder for his wish list as tim cook gets ready to take the stage in this case for the first time. of course, we're counting you down to the close in europe. 8 1/2 minutes away. we're back in a moment. [ male announcer ] this is the age of knowing what you're made of.
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morning. up $6.37. awfully close to the highs of the day as we get closer and closer to tim cook's keynote address. live shot here in san francisco. developers making their way inside the mconference center. we'll sit down with an apple shareholder from what he'd like to see from the tech titan's big address today. the bells about to sound across europe. we'll get the close with simon and detamils on the impact here in the u.s. when we come back in less than two minutes. [ woman ] for the london olympic games, our town had a "brilliant" idea.
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counting you down to the close in the uk and across continental europe this morning. as we take stock of what happened in spain over the weekend, simon hobbs joins us this morning with that. and what we might expect over the next few days. simon, it's going to get awfully busy going into the cregreek elections this coming weekend. >> today is really important. if you look at the price action, carl, that we see in europe after you got that credit line of 100 billion euros to shore up the spanish banks, the reaction, the degree of pessimism, the reality check that everybody has taken moving through the session is very, very large on the price action. have a look where we are on those markets in europe as we come to the close. the spanish market was up 4% at the open. and you can see that it is now coming into negative territory. that's a huge intraday move. see how france and germany have
also come down during the course of that session. because of, of course, the bailout for spain raises so many questions about italy, about whether you're going to have to revisit the bailouts on portugal or ireland. whether there's enough money, the subordination of people already in the market by these new funds that come in if there is a crisis further down the line. so many questions and such selling into the rallies. it's interesting the way in which those big eurozone banks rallied at the open and people have sold into them. just let me show you, for example, the two big french banks. societe generale and credit agricole. closing down 3%. a 7% move on the session overall. that clearly is huge. david was drawing our attention to the moves you've had on the sovereign debt markets. the fact, for example, that in italy you've had the yields there as you get selling in italy and spain on the bond markets, spiking above 6%. that's not as high as we were at the end of last year, but it's
not the direction in which you want to be going at the moment. because, as i say, if you're bailing out the spanish banks, what have you got to do with the italian banks? have a look at how those italian banks have traded through the session. there you see it. we count you out on the european trade. another week. but an important week. counting down to the elections, so much of those peripheral debt markets are in negative territory. back to the spanish debt market. of course, you know, in the short term this is good because spain doesn't need to raise money on the market to bail out its banks. it's coming from the european funds. and we made way for that in advance. the yields were falling. but now, of course, the yields are beginning to rise again in spain. and we're at 6.49%. importantly, a lot of people look at the extra, the spread, the extra that investigatiors d to hold spanish debt over german debt. last week that went below 5%.
important for many. we are just spiking high. down last week. at the end there moving in the wrong direction. a lot of people are looking at the cost of insuring spanish debt. to a degree that also is blowing out. on the cds, i was told we were above 600. that may be delayed data. we'll come back to that. let me just mention one last thing. because it's important moving forward. the solution to europe's debt crisis relies on the relationship between france and germany. it's always going to be that way. just bear in mind that in france, fran swa hollande, the socialist, looks like in yesterday's elections he has won an out right parliamentary majority. that's important. two things. it strengthens his hand against the germans. so more progrowth which may or may not be bad depending on if they can do a deal. it also means that at home whatever he does agree with the germans, he's more likely to get into french law. i'm thinking there of a change towards euro bonds or greater fiscal discipline. let's check in with rick
santelli in chicago and see what's happening there. rickster. >> we have a very interesting guest today. we have richard evans, aka dick evans. he's from cullen frost bank in texas. welcome, dick. >> thank you. it's a pleasure to be here. >> you know, i want to start off right at the top. your bank was formed several years after the end of the civil war. i believe in 1868. >> that's correct. >> and when you go out on the road, you get an applause. and you get an applause for an interesting fact. what do you say that garners applause when you're on the road, dick? >> well, we didn't take t.a.r.p. money. we were the first to say thanks, but no thanks. >> now, you stopped making loans in real estate and, to some extent, other loans like some of the sub prime auto loans and the like before the credit crisis. is that not true? >> what we did, we made a decision in the year 2000 to stop making residential mortgage loans. we continued to make commercial loans. but it didn't fit with our
mission statement of growing long-term relationships. and we felt the mortgage business had become a commodity. and so we did exit that business in 2000. >> so when i listen to people, especially like at insurance companies and mutual funds, i hear things like, you know, sometimes you have to do businesses and a certain type of business, and you have to price it where the competitors are pricing it. you just never seem to subscribe to that model. >> well, we focus on the customers. and we find that if you have good communications with your customers, and that's where the focus is, and what makes all that work are great people in our organization that live our culture and -- and are totally focused on what the customers' needs are. and we take care of those needs. we have a referral system for mortgage loans. and so it's not so much about us, but it's about the customer and making sure that we've helped them fulfill their dreams.
>> you know, you survived depressions, world wars, the savings and loan, the '80s debacle in real estate in texas all together. and you've done all this with a federal charter which i believe you garnered about 20 years after 1868 original opening. but you're in process right now doing something unique with your federal charter. can you tell me about that? >> what we're moving to is a state member charter where the state of texas and the federal reserve bank of dallas will be our regulators. and what i'm very pleased about, they have great staff. they do a great job. and they've never appealed anything to washington. so i think it will be an opportunity to have better communications, and it'll be a simpler process. you always want a good regulator. but we're in an environment today with dodd/frank that we have overregulation in this industry, and it's hurting the
customers, who it's hurting. and so we want to be sure that we are obviously following the laws, but have the ability to have clear communications and take care of that customer. >> now, you're, like, one of the first non-cullens to run this bank in its history. what i find fascinating is one of the predecessors with the last name cullen wrote something called a blue book. being a car guy, it's not the same as the blue book i use. can you tell me what the blue book is and how can it only be 15 pages long? >> well, it comes back to simplicity. our blue book is our mission statement that we will grow and prosper building long-term relationships based on top quality service, high ethical standards and safe, sound assets. and our core values are integrity, caring and excellence. the little blue book takes that and simplifies what all that means from a customer's
standpoint, from we who work there, and our shareholders. and a first grader can read it. it took us about a year to write it. and what we wanted to do is we answered the question, how do we stay in business for over 100 years? and that answers that question. and that's the way that, again, comes back to a customer focus to take care of those customers and have clear communications within our company. and so when i talk about great people, our -- our staff, and building the culture, what they're really doing is bringing that blue book to life. >> well, mr. evans, i'm so glad you're our guest today. we're going to have to close. but i want to leave our viewers and listeners with this final fact. if you don't think you can make money the good, old fashioned way as a bank, the assets of this bank since '07 are up 50%
to $20 billion. back to you, carl. >> i'll pick it up, rick, if i may. thank you very much. we're two hours into trade. major reversal under way. stocks in negative territory. the euro is coming under a huge amount of pressure. of course, the commodities which had bounced at the beginning of the session on what came out of spain over the weekend are also in negative territory. sharon epperson has more on that life in the nymex. >> simon, we saw a big bounce overnight in oil prices. in fact, the wti contract was near $87 a barrel. brent above $100 a barrel. but then the euro, ahead of the european close, turned negative. broke below that 1.25 level. very key level. we saw oil prices follow suit. they're near their lowest levels of the day. they were down more than $1. both for the brent crude contract and the wti contract. what traders on the floor are saying is that it may not be enough, of course, we've heard that before. but add to that the news that we got over from china overnight about its imports.
the fact that they're at a record level for may, that may just mean that now that oil prices are cheap, they're stockpiling for the future. we've seen them do that before in times of crisis as they did back in 2008. so a lot of traders say that that does not give them much solve, either. they're still very bearish in the crude market. barclays pointing out they remain bearish even as we may see brief rallies in the oil market. they see that as a time to sell the rallies. that, in fact, is exactly what happened today, simon. >> goldman went positive on commodities, didn't they, overnight? >> they did go positive on the september wti contract. they'd already been long that. they reiterated that long position. they went -- they also reiterated long positions for copper as well as gold, natural gas as well. some of those commodities doing well today. others, of course, not so well. >> sharon, for the moment, thank you very muff. sharon epperson at the nye an ex. down 27 on the dow. cutting losses slightly at the new york stock exchange. bob pisani has more. >> remember, when we used to get
a real bounce on these weekend euro bailouts. remember what happened in december? >> for days, possibly. >> for more than a month. we were up 80 points right at the open. look at the dow. it's really been straight down, really. as simon mentioned, a slight pop here. really, that's not the direction. we're clearly moving to the downside in all your major sectors. particularly material stocks. industrial stocks. the stocks that are involved in the global economy. all turned negative very, very early on. so materials and energy and industrials within the first 20 minutes, they went negative. you can see remain to the downside. a lot of comments this morning about the political ramifications of the spanish bailout. let's call it that. in fact, there apparently was not a lot of strings attached. perhaps no austerity. no imf program. that may be a little controversial. he may or may not have been level with the spanish people about this. there were a lot of comments over the weekend from various elected officials. samari, head of the conservative party says the spanish bailout adds urgency to the idea we need
to renegotiate the bailout. not cancel it. mr. venizelos, head of the socialist party, a safety net for the eurozone is being prepared. ireland is talking about the fact we spent $63 billion bailing out our banks of our own money and we may want some of that back if, in fact, we keep getting these bank bailouts of other countries. there are political ramifications going on today about these kinds of bailouts. very interesting. finally i want to point out something today. i don't know if anybody knows this or it has been widely noted. morgan stanley's underwriting something this week. their first underwriting they've done since the facebook situation. this is the fresh market. big successful grocery chain. they went public in november of 2010. morgan stanley was one of the underwriters. they helped with a secondary last year. now another secondary. morgan stanley is the sole underwriter. 10 million shares. what's curious, why are they sole underwriter given what happened with facebook? this is secondary. ipos are not the same as
secondary. still, simon, this is going to be watched fairly carefully. morgan stanley obviously wants to make sure this goes smoothly, it has its reputation back. fresh market, they have their own reasons for just using morgan stanley and nobody else. >> one thing we can tell you for certain certainty, in an hour and 20 minutes one tech titan will be dominating the headlines. apple about to kick off its technology conference. back to carl in san francisco. >> thank you very much. joining us this morning is apple shareholder ryan jacob. portfolio manager of the jacob internet fund. owns about 5,000 shares of apple. the fund, the number one performing tech mutual fund over the last ten years according to morningstar. ryan, always good to have you. welcome back. >> thanks for having me. >> on a risk adjusted basis i found this fascinating. apple continues to be the best fundamental holding of all your holdings. can you walk us through why? >> i mean, apple has a unique distinction of being one of the cheapest stocks we own and also
being one of the fastest growing. now, obviously, you know, the kind of growth we've seen before, 70% plus revenue growth, 100% plus earnings growth, is probably not sustainable over the next several years. but even if they're able to grow at rates of 30%, 40%, 50% the valuation is still compelling. >> walk me through some of the catalysts that you're expecting this year. i'm wondering, your level of expectations about catalysts that are announced today. does today matter? or are you satisfied if some of these announcements are made later in the year? >> today clearly will be incremental. it will be interesting to see the new updates, the ios, also the new macbook refreshes. you know, the key story with apple has always been about the software. we're going to see a lot of updates and new -- new tweaks to the software which i think will be important. maybe we'll even fwet some clues on the iphone 5 launch this fall which clearly is very important. maybe, maybe we'll be lucky and
get an idea of what an apple tv, again, that integrated software/hardware type of product, may look like. >> yeah. that's one of the key hopes for today. although not clear that's very likely. we've had a dividend since tim cook took the job. $100 billion in cash. cook said in the past he's not going to have a toga party or do something outlandish with that cash. has the discussion of how that cash should be put to use died down a little bit or not? >> i think it has. i think, you know, obviously it's not a big cash repatriation. the shareholders, via dividend or buyback. but at least it's a start. i think it gets apple on the right path. amle at the end of the day is a growth story. investors in apple are really going to be focused on can they continue to deliver on the tech no logical improvements, marry that we creative design and come out with compelling products.
as investors that's what the focus will be on. >> interesting to watch the stock. at least in the intraday gaining steam ahead of tim's address here. thanks so much for your time. good to see you. >> good to see you, too. >> ryan jacob in los angeles. still to come, a round table of developers on what they want to hear today from tim cook. we've got much more from the apple worldwide developers conference in san francisco when we return. well the kids wanted a puppy, but they can be really expensive. so to save money i just found them a possum. dad, i think he's dead. probably just playin' possum. sfx: possum hisses there he is. there's an easier way to save. geico. fifteen minutes could save you fifteen percent or more on car insurance. [ male announcer ] ok, so you're no marathon man.
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the teacher that comes to mind for me is my high school math teacher, dr. gilmore. i mean he could teach. he was there for us, even if we needed him in college. you could call him, you had his phone number. he was just focused on making sure we were gonna be successful. he would never give up on any of us.
coming up in just a few on the halftime show, legendary investor jim rogers is our special guest host. off the plane from china with trades and reaction to the spain bailout. all eyes on apple's developer conference. while one analyst sais despite today's news don't buy the stock. traders have ways to play financials ahead of a possible moodies godowngrade. back to carl in san francisco. >> thanks a lot, scott. apple is the application leader with more than 600,000 down loadable games and tools on the app store. why do developers prefer apple over android? what can apple enthusiasts expect next? three top developers join us in san francisco this morning. george la vosh creative director at game collage. generally considered to be an exciting day. why do developers react so emotionally to this conference?
>> it's a great platform. apple is really the reason that smule exists in the first place. there's no iphone, stk, no app store there would be no smule today. part of that is because apple continues to make killer hardware. especially for doing audio and music which is what we do. as well as interaction and graphics. they provide great sdks to developers to be able to take advantage of the hardware. then there's a great way to actually distribute the apps we have in terms of app store and everything around that. you put all that together you get, like, a totally 360-degree complete solution to go and get your stuff out there. we love it. >> today is sort of the culmination of all of that. has google, has their answer to this been effective or not? how good are they according to you guys in return? >> i think they are improving in number of users. they're a huge user base. there are so many devices right now, they are the number one in terms of number of devices activated per day.
however, in terms of monetizing and getting people who can -- apple is still number one and nobody can beat it. google has a long time to go to be actually with the flurry. there is one fact that out of one dollar, if any apple developer is making one dollar, compared to android they are making 23 cents. >> let's talk about the ipad. we've seen the enormous growth of the iphone. for apple to really keep its stock growing the ipad has to really ramp and continue ramping. how many of ewe guys are really interested in developing for the ipad and see the same sort of potential there that, you know, the iphone. kind of show of hands or what? >> absolutely, yeah. the ipad is a huge platform. it offers a whole new different set of possibilities than the iphone does. in terms of education, conveying information on a more ongoing basis rather than just having a tool in your pocket and whip out to ask for directions and whatnot. >> has siri been a
disappointment to you? are you anxious to get a bigger hold on her? >> siri has been fun, actually. i think the best thing about kind of what apple has been able to do time and time again the last four years since i believe the iphone has been out here is to really represent kind of different slices of a clear vision that apple always has for how people can use computers. i think that's what sets apple apart for consumers as well as developers. rethink how computers and mobile devices might be used. it'll be interesting to see where siri goes. i certainly welcome what has been and what might be. >> any of you guys going to be back for google io at the end of the month. >> i will. >> you will be? >> because we are developers working for services, you know, for our clients. we hope to work on iphone as well as ipad and android. so we'll be there. but it's interesting and more and more people actually want to develop for ios.
>> i'll ask you one question i've been asking everybody. fortune has a big piece on cook. they're trying to paint the company as becoming less jobsian where engineers don't rule the roost. more sort of traditional, ordinary. have you seen that at all in the company as you've dealt with them? >> that's tough to say. the company definitely is evolve ing. the developers that are contributing to the success of ios is also shifting as more money is coming into it and more bigger companies are coming into the play rather than the small, independent developers that are in there right now. that shift is definitely going on. >> your comments are already sending fire engines all around town. thank you very much, guys. fascinating stuff. we'll see what tim cook says later on today. thanks, john. final thoughts as we gear up for that keynote address from tim cook in just a moment. lots more "squawk on the street" live from apple's worldwide developers conference in a moment. our cloud is not soft and fluffy.
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our eamon javers is here this morning with more on that. eamon, this is going to be a fascinating look at security. >> yeah, carl. i've had worse assignments than this. one of the days we spent shooting this documentary that premieres tonight we spent down in miami on a $50 million super yacht called the harbor island. they walked us through all the security apparatus you have to have to keep a yacht like that safe. they explained to us sort of what happens here when the ultimate rich guy's toy becomes the ultimate target. take a look. >> reporter: one of the most important aspects of super yacht security is understanding exactly who's stepping onboard your boat. this yacht actually has a security system imbedded in the deck that can detect every footstep and immediately train cameras on anybody who's coming onboard the yacht. six state rooms. a posh dining room. a sun deck. annual maintenance alone on super yachts like this costs about 10% of the yacht's overall value. and then to keep everyone
onboard safe? >> expect to pay somewhere around 7% to 8% of the entire value of the boat. adding really top level security measures into it. >> reporter: this is a yacht we're standing on now that's going for $54 million. >> that's correct. >> reporter: you're talking about a lot of money. >> it is a lot of money. the stakes are high as well. >> carl, you can see the rest of this at 9:30 p.m. tonight. have to get the plug in there for the documentary, of course. and we went around the country. so also shooting in nebraska and shooting in the hollywood hills, a whole lot of insights into how billionaires keep themselves safe, carl. >> the plug is what it's all about, eamon. i'll say it again. 9:30 p.m. tonight. east coast. eamon javers joining us in new york. tweet time. today it's all about apple as tim cook prepares to take the stage at the tech titan's worldwide developer conference. forget apple tv or a new operating system. today apple is actually going to unveil what? you fill in the blank. tweet us @cnbcsquawkst.
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