tv Squawk on the Street CNBC June 22, 2012 9:00am-12:00pm EDT
summit in two years and see if they make any progress toward the fiscal banking and political must-have. >> did you say you need to be a vigilante? >> in countries that ton gibbs that are budgets. >> tony, thank you. "squawk on the street" starts right now. ♪ the heat is on ♪ until the break of dawn ♪ welcome to miami congratulations to the newly crowned champion miami heat, a first for lebron james, a second for mickey airsen. we're live from the new york stock exchange, carl is off today, stocks looking to bounce back. it was a 250-point sell offyesterday. right now we're setting up for a positive open on the street. the s&p looking at almost four, a look at the european picture.
italian quiter confidence hit a record low, and we do have red arrows almost across the board. starting with the bank this morning, moody is with the much anticipated downgrade. the head like here, morgan assistantly only a two-notch downgrade, as another croloud or the industry seems to go away. with the sell jot yesterday, we are negative on the week. >> a miss for darden restaurants sending shares lower premarket, at the major chains olive garden and red lobster. are they pulling back or simply trading down. could microsoft be working on its own phone? should investors be wary when a software exude starts to act like a hardware company. banks are rising premarket despite an after the bell downgrade.
morgan stanley gets a two-notch downgrade. morgan stanley's debt remains lower still. bank of america also fared slight le better than some competitors. citi criticized -- calling the move completely unwarranted. it is i's mazing, considering the reallies, how the analyst community basically said it makes little difference when it comes to collateral costs for the banks, when it comes to funding costs for the banks, it's immaterial. >> i think when morgan stanley has to post of nearly $7 billion collateral, what are the -- this is someone long a call, if they catch it out morgan stanley would have to pay? that's worrisome. i was going throughed moody's closely, i think it was interesting what they had to say about wells fargo and u.s. bancorp. >> which is?
>> nothing. that's where the action is. >> it's a good point. the fact there are still contracts written in some way or collateral agreements that are written that actually take into account the ratings agencies and their viewpoints i think is an anachronism at the very least. it should not be the case. >> that's because they've been so bad or what? >> after the financial crisis and everything we saw, okay, these are issuer-paid organizations, i don't want to criticize the employees themselves. i know they work hard, but their analysis is not always of the highest quality. they should be treated as opinions, and in fact when you look back at testimony that ray mcdaniel, the ceo of moody's has given before the financial crisis commission, he said as much. our responsibilities, our means of disseminating information about a bond to a broader market is not the only means of disseminating information. these are opinions, they were not be treated as statements of
facts. these are quotes from mr. mcdaniel' testimony. i think it's important for people to realize that. >> "john carter" big bomb, if the reviews for "john carter" were written by people who disney paid and they said, go see it, you would have to take pause. >> and with using that analogy, disney can pay the reviewers and said five starts, must see movie, et cetera, but the market will speak, because the ticket sales won't back that opinion up. that's what we're talking about here in the market. >> but "john carter" was too big to fail. when you put it that like that john carter could bring down the world, but these banks don't hurt us. thank you for pointing that out. i think people at home are thinking moody's they've got to be the rocket scientists who come in and really make the determination. >> i would hope that's not the case after what we saw in the financial crisis. >> i think not anymore.
>> after the building of the cbo machine -- >> why do they emphasize it? >> that's the question. at this point after all the testimony -- >> here's the "financial times" which i think has been the best on banks. >> that's my point. use them to whatever extent you want, but the fact is the market already knew. morgan stanley has already been trading like it's a junk credit. the methodology behind it, perhaps they're rights, perhaps they're wrong to a surge extent. there's no doubt these basics are black boxes, but the market already knows. >> these are the same people who presumably told us the housing boom is going to continue and raided all those different -- >> of course. >> what does that say? >> it just says beware. >> one analyst cad it a mea culpa for the sins of the
financial crisis. i thought it was apt. >> they're always backward-looking, but they were paid to be forward-looking. i will tell you sophisticated market participants are well aware of what they believe is the creditworthyness. >> at the same time we are seeing a rally across the board. to some extent they were still a wait on this group and the fact that morgan stanley got a two-notch instead of a three-notch that's a $3 billion difference. that's what we're looking at, the market reaction to this, whether it's news or non-news, it is moving the stocks. >> because, of course, there are real facts on the ground caused by this, and therefore -- >> yes, yes. i run a bond portfolio, a company i founded, small cap, but they have a lot of cash, and you get a ratings downgrade. the people who buy your bonds say you should sell those bonds. i'll say, but what do they know?
i have done a lot of credit work, and they say it doesn't matter. this is done by real people, real professionals, who, you know, put ties on every morning, they wear suits. but the real issue here is that they still have in gravitas, and i think it's crazy. >> the one little things if you had to be concerned about the sector still, is that all of the five major banks, they still remain on negative outlook, so there could be more to come. >> and how much money they raised since -- how much money to morgan stanley? >> and those on the balance sheets since 1930. >> and now we're worried. tim geithner stress-tested these things to put money in spain and they said listen, we're using 1930s rules, there's been nothing that tells me they didn't take it seriously. our banks were forced to take
capital. they were forced to raise. in a series of equity offerings that were hideous. they changed the symbol, but you still have to do a -- >> a keefe differential between our banks and the banks in europe and why there's a crisis over there and there is not one nor will there probably be one here soon. >> thank you. >> why can't we use fablers's upgrades -- i want to know what the fabers are thinks. >> i haven't discussed it with the fabers recently. >> how much are you paid to do the upgrade? >> i'm not. >> you have the edge. >> oh, i'm up now. that was my subtle -- >> melissa gives me a -- >> we're not having a cup of coffee. >> sometimes oget lost in the conversation. >> i know. can the markets by the way overcome those jitters but glob growth, but that's what the
brought the dow and nasdaq down. worst day in three weeks. hurt by the reports from china, europe, from the philly fed, and so forth. keep in machined that all three major indices remains in positive territory for the month of june. the month not going that badly. the week, however, we came in saying, wow, we seem to be ignoring so much. >> we had a major rally since when the unemployment number. did the sunday night special. look, there were some headlines this morning that really shocked -- worst day in three weeks. >> three weeks is not that bad. >> remember we had used to have the worst day in three years. three weeks, i'm thinking wow, it's been three weeks. wow, we're staying a fort night, 48 hours -- >> moving down 2% is not a good day. >> no, it's not. >> you don't want to put a lot of those back to back.
>> no, i don't like that. i do think it's important to put things in context. and then june, june is still working. >> the problem is you pair that with oil going below $78 a barrel, you compare that to the spread narrowing -- you compare that with gold goods negative. it's not just a 250-point drop on the dow in and of itself. it's factored in with all these signs of slowing growth around the world and that causes worries. >> someone said something that struck me. they said, boy, i just paid less for gasoline. i said, you idiot, that's bad. maybe i was the idiot. >> it cuts both ways. >> it's world growth. our growth has slowed a bit, but if you listen to conagra, which was an amazing conference call.
i know this will shock people at home, about you it's good when you pay less at the supermarket. on wall street you pay to be rated, they give you a bat rating -- gave you a good rating when things were bad. okay? on wall street we focus on the idea when you pay gasoline at the pump, it's bad if it's lower, food costs are lower, and main street say it's good to pay less at the supermarket and the gas pump. there is a notion -- it is china and europe that i think is more responsible for oil coming down. >> that's true. >> i had energy transfer partners on this, and they said, look, the reason why oil and gas are so weak is because we have discovered so much oil and gas that there is a supply issue, not just a demand issue. i think it's important to try to present this oil bonanza as
something moving down prices in the country, but the world prices being set by other countries, not by ours. >> we forget that historically oil being lower is good. >> one of the things i hate about wall street, i hate about wall street, is that every stock goes down yesterday, because the s&p 500, right, and probably 25% do better immediately. raising numbers xyz, raisen number dean foods is the largest costs -- but one of the things that went down is dean foods. >> what's your take on the sell-off yesterday? a buying opportunity? >> i think energy stocks are still too high. i think yesterday a day when bed bath and beyond was a bit jarring, but redhat was down very big. i heard someone say pretty good things about redhat, and i trust
him. >> the ceo on the other show, saying that things were looking good. that strength seems to be intact right now. >> and he has a great record. i think that it's important to point out when i hear him on "fast" i say i don't like technology, thisu but this was down six at one point, as opposed to bed bath. that was just someone confused it with best buy. i mean, that was like -- >> one b is a big difference. >> darden, by the way, we had a situation with a dividend boost, not unlike walgreens, which snuck that in. darden -- >> the shares are down
premarket. the parent of olive garden and red lobs terse -- the forecast due to weaker same restaurant sales, and bothing the quarterly dividend. olive garden continues to decline and about half the company's revenue. we're still seeing same restaurant sales declines here in olive garden and red lobster. >> i happen to be a big fan of both. soinchts i like the shrimp special. >> i'm a huge olive garden guy, because you have a bottomless salad and you can stuff as many rolls in your pockets as you said to. i think concepts need to be refreshed. they do all these ads and it's like, didn't they have the promotion last time? >> to that point, their
specialty restaurants showed same-store sale increases, so it's the older concepts that they have in their stable of brands, which david knows so well that are not doing -- we're making fun of david, because david has never set foot in any of these restaurants. >> i went to capital grill on tuesday. i ceased liking capital grill after they put the calories on. i don't need to see i'm having 2700 calories, and taken best with two lipitor. >> >> go generic, jim. >> i keep telling you. whether darden is about that company, it is not reflective in some way of what we're seeing in terms of the consumer slowdown. >> it's the age of walmart. >> but that's not necessarily a good thing. >> no, but people are still spending. they were using dollar stores -- to some dry they may have traded
up to walmart. >> okay, i guess dollar store is up. that person gets a break because of the gasoline, at the supermarket, may spend at walmart. >> so that's not a person going to olive garden or -- >> a person that will go to yum or mcdonald, a quick serve as opposed to casual. >> qdoba, which i pot lay. when you go to the brand-new restaurant concept -- they haven't gotten aft kiffins out of the asian kitchen, but that will take the country by storm. >> spend are more at those lower price points, q.s.r. quick-serve vaunts closed at close to 52-highs sirgets main.
>> he's saying main street hasn't kicked value. they love value. usually when things get better, they drop out of value, but if you want to measure value, you measure prgo, they are the knockoff company. david, when you buy the case of pepto-bismal that i buy, it's the same pink bottle, whether you use perigo's or pepo. i no longer feel when i buy the store brand people look at me like cramer must be having a bad quarter. i am a huge believer in store brand. >> before we go to break, i did want to mention some news out of the ecb, taking us back to europe, which still has probably the single-most impact on our moves. taking an -- this is something that had been anticipated, but widens the collateral pull.
of course, it does raise a question to are they running out of collateral -- this is, for example, things like the ltro, but taking in collateral you then loan money against at 1%. so we'll keep an eye on that. it seems to be having a positive impact on our market. >> we started the show talking about mickey arison. carnival with a great quarter. when that got to be a higher accidental high yielder, it was the time to buy. ite not saying people forget tragedies, buzz i do say, like the airlines, people come back after an accident and they start uses cruise ships again. >> nice positive in the premark
premarket. >> the cruises are relative bargains. >> i'm sure something else david has not done. just a guess. >> not yet. >> not ruling it out. >> you are a yacht guy? >> yes, i am. because you do that faber's rating system. >> i think for david's sake we're going to break down. >> thank you. there is one company that has decided to take the plunge today. we'll talk with the ceo of the company that's ipo'ing here. another look at the futures as we kick off this friday morning, the dow looking at a whopping 71 points. more "squawk on the street" ahead. tdd# 1-800-345-2550 the spx is on my radar.
tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus - i can custom build my own screens tdd# 1-800-345-2550 or use predefined ones. tdd# 1-800-345-2550 and i can trade wherever i want, tdd# 1-800-345-2550 whenever i want. tdd# 1-800-345-2550 the kicker? tdd# 1-800-345-2550 i pay $8.95 a trade. tdd# 1-800-345-2550 that's a deal in any language. tdd# 1-800-345-2550 open an account tdd# 1-800-345-2550 and trade up to 6 months tdd# 1-800-345-2550 commission-free. tdd# 1-800-345-2550 call 1-800-790-7706.
clarence clarence otis on "squawk box" talking about launching a promotion next week. take a listen. >> we are working at olive garden on a number of things to improve results. consumers will see the results of that work really beginning next week with olive garden's next promotion. >> that brings us to this morning's "squawk on the trewee" what do they need to offer to get customers back? we have your responses throughout the morning. jim, what you say? you are the only one of three of us that regularly goes to olive garden? >> cargo pants.
give us cargo pants. you can put more breadsticks in more pockets. there's a route 22 olive garden is my olive garden. i cannot tell you how many times i've been there and wanted to play the cnbc card jump the line, but i am a man of the people similar to my man david faber. >> david is the man of the people. three times, not twice, not once, three times. >> went to ripley's believe it or not with his boy and nine other kids. the whole notion of you beat west side thing defeats -- >> [ male announcer ] trophies and awards lift you up.
but they can also hold you back. unless you ask, "what's next?" introducing the all-new rx f sport. this is the pursuit of perfection. you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying... [ all ] i'm with scottrade.
celgene, man, you are moving. >> he liked apple, bought a ton of it from watching the show. multiple defenses today. it's kind of like team defense, william blare defense it, bear defendants it. >> they pulled -- >> eu -- >> that was very important, because it was in the numbers, morgan stanley, but bernstein said specifically it was in the stock. they can earn 9 bucks, it is indeed the -- >> facebook quickly. >> i love this call. i have to go quickly, so i'm stalling here. the answer is he says it's about
that could adapt to changing road conditions. one that continually monitors and corrects for wheel slip. we imagined a vehicle that can increase emergency braking power when you need it most. and we imagined it looking like nothing else on the road today. then...we built it. the 2012 glk. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services.
on december 21st polar shifts will reverse the earth's gravitational pull and hurtle us all into space. which would render retirement planning unnecessary. but say the sun rises on december 22nd, and you still need to retire. td ameritrade's investment consultants can help you build a plan that fits your life. we'll even throw in up to $600 when you open a new account or roll over an old 401(k). so who's in control now, mayans?
they they sue operator, doing the honors here. we'll be speaking to the company's ceo. red robin, gourmet burgers celebrating ten years. so far a positive open, green arrows across the board, the financials no surprise. xlf is up by almost a percent, and morgan stanley does continue higher, up about 3%. >> today is going to be difficult for those of us who are big sports addicts. i know you reference how important the transports are,
because there's a railroad antitrust see, so union pacific, these having pretty good bellwethers, but the antitrust hit about the fuel surcharge. it may confuse people. transports have always been something i focus on. i'm kind of adicted to them, frankly. ryder systems down, second quarter and full year dramatically setting reduced demand for consumer rentals. so for the rest of the year, things are -- also reflects unusually high companywide medical benefit costs, which i thought was sort of interesting as well, but a sharp reaction in the shares here. >> yeah, steve, jeffries, wells all take it down. ryder has always been, again, a very good barometer of industry. this is fleet trucks. look, europe i think is having an impact on our country. our country is decelerating.
i don't want to minimize the commodity collapse, but i also find rays of help. people want to sell, take advantage of higher prices? i'm not going to fight it, for finance, for tech, for oil, but i do think that, we have to remember that yesterday goldman sacks did put a whammy on the market with that sell call. today goldman sachs, a different of goldman sachs reiterates the long good buy in equities. goldman sachs kind of like a bit of a split personality. >> that trading desk call from goldman yesterday, which seemed to have an impact, i would hate to thing that would encourage them. if they think they can go short and put something out or go long, they are just going to crush everybody. >> next thing you'll start seeing is e-mails from different person, big and chunky -- what is it -- did you see that story about the different e-mails?
kind of a love-fest. >> the ideas that we get e-mails from the trading desk, i got that thing about 11:00 yesterday, and is goldman trying to short? or figure out how goldman is trading against you, because you need to do that. >> remember, if you're a client, you're a counter-party. look, i worked at goldman, it wasn't like that. >> when i talked to dr. j, he indicated in the options market there were trades put on that reflected that exact calls. from current levels down to 1285. we're not saying anything bad has happened, but apparently somebody has stepped in and believed that was dr 1285 is a key technical level. it's not just goldman naming super random level. it's widely talked about as a key -- >> and calls totally resonates in a market. again, i'd hate to encourage goldman sachs trading group
putting out an e-mail every day defending what they're going to do. >> you haved fed weak, unemployment claims that were weak. i thought the market should have been down the day before when the fed told you to sell. >> sell the news. >> so the giant squid, what did i -- what is that thing? >> ram spire squid. >> ram spire squid? >> maybe empire squid. >> abe lincoln has a movie. goldman, lincoln, in other words, the trial out of the commission, stay away. >> we don't often focus as much as perhaps should, but it's important to point out that the bonds are also up. they are ripping across the board. >> interesting. >> 25, 30 basis points of tightening among many of the banks that were downgraded. >> again, wow, late to the game. >> what it thinks the credit worthyness of some of these banks is, now reacting in a
positive reaction to the final downgrade that everybody expected, perhaps not as bad. >> citigroup cutting its estimates, and google is up today, a contrary market. >> yeah, it's interesting moves here. >> tom cruise reversal. >> we didn't have that much of a chance to discuss this idea of will they try to become a hardware company? people are still trying to figure out the whole -- >> i was going to use that in my six in 60. >> a whole six of -- >> i mif to do 15 seconds, just to discern strategy. it's a 15-second -- >> some of their customers are still trying to figure it out, too. >> you mean dell is it. >> dell. but listen, google bought motorola mobility and may be firing an awful lot of people there eventually. i'm not sure how that will work out. >> hardware is the way to go these days.
microsoft potentially with a phone. >> oracle, with the business that was so bad. >> commodity big, a low-margin commodity business was going to be a big payoff. >> i've got to buy an island. >> you don't already own an island? >> it's disappointing that i haven't. larry ellison, he's changed my mind. >> maybe you can buy like the seventh largest hawaiian island. >> how about rikers island? ever think about that? [ laughter ] . >> if they're going to privatize it i'll buy it. marie thompson is in for bob. >> as expected we had an early pop. the dow is holding on to a 68-point gain. right now the nasdaq um 12. financials and health care stocks leading the early market action following yesterday's big sell-off spurred by a number of things including concerns about weaker global growth, which happened after the market closed. of course, that's one of the drivers in today's session. the react to the downgrades
which were pretty much as expected. morgan stanley's already being cut by two notches. there was some concerns it would be three, and its stock is moving higher. also traders are watch fog any headlines out of a meeting between the heads of germany, france, spain as well as italy today. that meeting started at 9:00 eastern, so again they are waiting any headlines out of that. and we could see a big pickup in -- and we have the russell rebalancing ending at the close of trading today. the pop we saw in the euro and corresponding decline we saw earlier when the ecb eased its collateral rules. spain has been outperforming the others overseas. again, we want to check on the banks, not only are the stocks rallies after the downgrade, much of it was expected. this had been telegraphed for a long period of time. as david pointed out importantly the reaction in the bond market, where yields are coming down.
again, keep in mind, this is where the pricing is set essentially for the borrowing costs. this is an important thing to note. again the markets certainly taking it in stride. these stocks all higher after the downgrade. of course, morgan stanley, which after the two-notch downgrade issued a statement, saying it still thinks that it perhaps merited a stronger rating. its stock, of course, was the one that a number of family were watching again, the lead are among the financials today. we also want to watch materials. they were looking healthier in the premarket forms again on concerns of slowing global growth. today a steadier pictures. they're up slightly. also steadyness in gold which had a big sell-off. the dow's come off its best levels. melissa, back to you. >> thank you so much, mary thompson. i always -- i think they're
smarter than the commons, the preferred stock, steady. those are smarter people than common stock traders. let's head to the bond picks. rick? >> you know, jim, week gents really move into the twilight zone these days. listen, we understand that anything that europe can do to ease some of the banking issue, solvency issues will be a positive, but whispers on the floor are my goodness, why didn't we think of it earlier, it's auto loans that will save greece. i understand easing collateral and adding more issues into it lie asset-back auto loans, these are all positives, but a little piece in a very complicated banks puzzle. it's the weekend, anything can happen. on the train ride with traders yesterday, we didn't know what it would be, but they were pretty darn sure the euro would be higher, stocks would be
higher, because it's the weekend, who is going to take a chance? thee throw a lot of jurisdiction out there, and on monday and tuesday we'll all realize probably nothing will make the difference. look at they intraday charts, how these stories kind of rehash, the collateral story was yesterday, pop yields and euros, and we'll continue to monitor that along with the downgrades that everybody thinks don't mean anything, because investors know what's going on. how many investors believe bear stearns and lehman? boy, the rear-view mirror gets awfully cloudy on fridays. back to you. >> great comments by rick. i remember when weekends were made from nickel -- >> that's a bygone day. after yesterday 'sello, courtney reagan is at the nymex. >> we did see a spike on cruise after the announcement about the easing of collateral.
overnight wti crude did brake below 78 breaches those october lows is paving the way, but traders say -- as rick said, it's a friday, to be a relatively range-bound trade, but that doesn't disappear overnight. brent owl on track for its biggest weekly drop in 13 months. gold relatively flat. we saw a bit of a spike up earlier today on some short covering. traders also expect this to be relatively range bound, but some technical damage has already been done in the gold trade. we're looking for 1550 for the next short-term support level. melissa back to you. >> thank you very much, courtney reagan. we asked you to complete the following sentence -- forget unlimited breadsticks, forget the salads, what does olive garden really need to offer to get customers back is, blank. 'we take a break, a look at
that's why we offer accident forgiveness... man: great job. where your price won't increase due to your first accident. we also offer a hassle-free lifetime repair guarantee, where the repairs made on your car are guaranteed for life or they're on us. these are just two of the valuable features you can expect from liberty mutual. plus, when you insure both your home and car with us, it could save you time and money. at liberty mutual, we help you move on with your life. so get the insurance responsible drivers like you deserve. looks really good. call... or visit your local liberty mutual office, where an agent can help you find the policy that's right for you. liberty mutual insurance. responsibility. what's your policy? 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.
what a difference, though, from yesterday, the dow stopping a 250-point loss, the worth day in about three weeks. glue what were they doing yesterday? having g & ts? >> it was very hot. time for squawk on the tweet. darden -- the forecast was somewhat lackluster for same-store sales growth. the main casual dining brands. darden restaurant's ceo is responding by launching a promotion next week.
so this morning we're asking you to complete the following sentence. what they need to offer to get customers back is -- >> real italian food. >> that's harsh. >> go ahead rid of the microwave ovens. >> and they need steel-reinforced chairs for all the oversized portion. >> which i potly burritos. that's what olive garden needs. david, i have to tell you that i think once again we are seeing the kind of market where the industrials open higher. this has been a common theme, and then roll over through the rest of the day because of some of the things that -- because of things happening in europe. this is a trade that happens pretty much every day these days.
it's a discouraging thing, for people at home, this group will be toxic until you see something good out of europe. what will be my sign? gold going higher, because it will signal reflation, which of course is what we really need. >> of course. it's not just europe people are concerned about. we've talked about it many times. it is india, it is brazil, china, again most countries could kill for 8% gdp growth or high 7s, but that's something of a disappointment based on at least the expectations. >> here in the u.s. we are also slowing. we know that. we're still looking for, what, 2%, maybe a bit more? so what are you watching to try to figure out what's going to change that trade when it comes to industrials? >> there's a industry argue about brazil and how it's not waiting, that the brazilian government is done really incredible thing. floyd norris as a piece about
the president, congress waking up to the idea we need pipelines everywhere in order to bring down the cost of oil, and create millions of job. i think without a jobs program t. won't matter. i'm not being political, but those are things that would tell me -- with we go to melissa? here is daniel rodriguez, now trading here at the big board under cmco.t. welcome to your listing. thank you very much. >> you're going public, in fact you had to cut the size of your marketing, were you hesitant about going public now? >> we have a great company, we are very confident about south america, we are thinking in we're in a great region and
we're confidence we think everything will work well. >> you operate at supermarkets across south america under the name jumbo among others. are there any signs of concern about the latin-american consumer? >> we have operations in five countries. i think all the countries are growing well. and we see very positive signs in brazil, peru, and also chile. i think we are in a great moment. >> when you're looking at your competition, you're not only competing against pure play markets, but a lot of retailers, home improvement, ate. the competition is wide. >> it is. everyone is excited about the reunion, but we have been doing business over 50 years in south america. we are a very well-known company. so we have a lot of customers and they are very loyal to us.
perhaps they're going to in-store brands? >> yeah, we noticed that, but the difference we can offer -- we are in fast-growing markets. the growth we have seen is something unique. we did offer very good blueprint for any investor in south america. >> daniel, thanks so much for joining us. >> thank you so much. >> daniel rodriguez, the ceo of cencosudden. more "squawk on the street" straight ahead. coming up, during that it is lose the headache day? so it's time to destress and decompress. but all that can wait until after cramer's six stocks in 60 seconds. "squawk on the street" will be right back. 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. now depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account. open a fidelity cash management account today and discover another reason serious investors are choosing fidelity.
let's check in with simon. i6789s happy friday. we're going to have blackrock strategist to talk about the markets, talk about where we're going with the ten-year yield, which is fascinating after yesterday's hysterics. we'll look at the falling price of oil and gas. and the big four leaders are wrapping up. eu summit. we'll talk to a man who thinks the euro could fall ten cents against the dollar by the end of the year. that's a big call. back to you. time for six in 60. pvh. >> neutral. ea electronics arts downgraded. >> got to be careful. zynga is down. >> ppg initiated at r.b. baird. >> i think it's having a strongest of the chemical companies that continue to do it right.
>> people worried about china, but look, the market is saying it's factored in. >> macau is huge, but you do wonder. >> china is too weak for mess to think there's that much gambling on. >> what the heck was it doing on the u.s. focus list? credit suisse, i'm downgrading you three notches on that call. family dollar raised at citi, f.d.o. >> you and i shop there, we know they're better than they used to be. i'm a dollar treat guy, by the way. they have the single best candy aisle. >> love that candy there. >> my dad and i buy -- >> i remember tryon came out, they were going to try to buy it at 55. >> right around there. >> and they just held on to it, wanted to improve their sales per square foot. this is one of the lackluster operators in what's been a very strong area. >> you would kill for that kind of stock, wouldn't you? >> you really would. >> what will you be watching?
>> game plan tonight heavily influenced by the supreme court. i think we'll get the health care decision on monday. that will be -- that's where the insurance is going. >> going through our game plan took on "mad money." >> in terms of where one should focus -- >> incredibly the hmos, i think go down on a scrapping and unconstitutionality. they have adopted to obama-care. they're ready, full out, if it gets the approval. they're not ready if it -- >> so the mandate would actually be a negative for the hmos. >> i don't think they realized that the supremes may strike it down. it's an important decision. >> i know a lot of hedge funds have gone through exactly their game plan. >> that i think will be on
monday. it's going to be united states and imf putting a lot of pressure on germany. when will merkel fold? you'll know when gold shoots up. >> we haven't seen it yet. have a good weekend. >> you too. more "squawk on the street" is coming back right after this. [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the 2012 c-class with over 2,000 refinements. it's amazing...inside and out. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. tdd# 1-800-345-2550 you and your money deserve. tdd# 1-800-345-2550 at charles schwab, that means taking a close look at you tdd# 1-800-345-2550 as well as your portfolio.
tdd# 1-800-345-2550 we ask the right questions, tdd# 1-800-345-2550 then we actually listen to the answers tdd# 1-800-345-2550 before giving you practical ideas you can act on. tdd# 1-800-345-2550 so talk to chuck online, on the phone, tdd# 1-800-345-2550 or come in and pull up a chair. that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement plans, they help save you up to thousands in out-of-pocket costs. call today to request a free decision guide. with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients... plus, there are no networks, and you'll never need a referral to see a specialist. join the millions who have already enrolled in the only medicare supplement insurance plans
endorsed by aarp... and provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. with all the good years ahead, look for the experience and commitment to go the distance with you. call now to request your free decision guide. o0 ♪music plays throughout summer in new york state has something different for everyone to love. discover what you love. visit ilovenewyork.com to plan your summer trip now.
good friday morning. welcome back. let's get to the road map. crude slightly higher this morning, as gold went negative for the year, amid the markets, so signs of slowing growth. should you be using at names for the best way to play? >> plus darden strahan, continuing weak growth. we'll pick apart of quarter. the sales number, that's next. >> european initial bank has -- in its lending operations in a
move specifically to help spain at this juncture. it is effectively a monetary easing. >> it will be replaced by monitor beverage. sara lee will be deleted on june 28th. sara lee is inned midst of spinning off its international coffee and tea business. and kicking off our headlines today, we have the big banks shrugging off the downgrades. despied the long-awaited announcement. perhaps a sign this isn't already baked in or the street doesn't care that much about what the agencies think or perhaps a bit of both. of course they do have a practical impact. the fact is there still will be significant collateral call. but it could have been worse.
and it was not. >> that would have been nine. and in fares to the credit agencies, they have signaled this, very clearly went into discussions, and the banks detailed the impact it would have on them. >> this conversation, and we've been waiting since then. of course, we have also pointed out in the bond market, tightening of credit spreads for many of these banks, so again there was already an anticipate. that's what we're talking about here. >> we've moved from 156 to 165, so despied all the hysterics that we -- and concern on the markets, the yeefd on the ten-year is actually rising, which would indicate a slight under wind, you but we'll talk
about that later. >> we welcome martin noonan, a chief technical analyst. mark, great to have you with us. i want to focus on oil. to think that at the beginning of june we were at $100 a barrel, and we've reached the 102-moving day average. where do we got from here? >> my thinks is we're closer to a low, at least in the short term. crude has fallen 30%, and right as it approaches former lows from october, so there are a few things to look at. wen is the spread, so my thinks is never as a whole is down about 8% thus far this years. it's better to be long energy.
where is that is going to country from? what's the primary driver here? >> i think wti -- >> and it will come down as wti stabilizes. >> is that a technical tern? >> there's a few indicators. mean it's difficult for thing to decline, so we're getting by signals. really since the delay began four months ago. so that couples with rampant oversold conditions, so price has fallen, but momentum is starting to gradually stabilize here. for me that's a short-term positive. >> is it a stayingization, or are you talking about financial gains?
>> give me a guess. >> on wti. >> so energy has down 8%, down for the years ago, these former throws, i think it makes sense. >> so your thinking -- >> let's talk gold here, we did go negative, and i did talk to dennis gartman, who said he was bullish on the gold chart, because for the first time we've seen god lead the equities higher. do you see any backing of that? >> gold has been range-bound over the last year. it makes me think we can get down to 1800.
so this leave likely will be tested, so i think potential breeched. however, as you get into the months, it tends to be bullish. i think we will see at least a resumps of the uptrend into the fall. goldman sachs, the note that came out yesterday. do we get there? if we've reached that, it's likely we -- we could potentially get down as low as 1275 to 60. >> just to be clear, we're talking the s&p. >> there's a couple thing to pinpoint. if you look at the daily chart. we got up to 1360. that's a serious level of
resistance. as of yesterday, we fell and broke support right northeasterly 1330 to 1340. and so short term we're still in a downtrend as part of an overall advance. so this is just a short-term chart. it's a season annual correction, even may in 2010, we started to put back. >> i still like buys dips you know, pulling back over the next week i think would over a decent opportunity to get involved. >> when i see that it is losing momentum in the short term and it is approaches the 200-day moving average, some may make a lot of this so-called death cross. how much stock do you put into that? is that something on your radar?
than actually the cross itself. >> how is it trading in relationship sloping downward? >> i have legitimate concerns. if you look at a monthly chart, you can see we've had made virtually no progress. this move up from 2009, when it moved to higher levels, momentum went lower. my thinking, though, is that seasonally and sicklically we're in an election year, so near term, pullbacks are viable, but i have concerns. on the near-term corrections, you're actually bullish going into the end of the year? they tent to be july and all, so we're pulling back. close to levels that you want to step in and buy. >> mark newting, great to have you with us. back to brian sullivan. >> a name we don't talk about a
lot, harvest national natural resources, the stock is absolutely soaring. they have agreed to sell their interest in an venezuelan oil field into an indonesian company the stock is soaring today. keep in mind this is a symptom that went from 16 to 5 in about 15 months, so the stock has taken a huge hit, so bill sales, $700-plus million dollar sales. back to you. >> only about a $300 million market cap. brian, thank you. under $80, the lowest level we have seen since october. with out below that key mark, should you be looking to consumer stock? >> we'll have that story after this. [ female announcer ] it's time for the annual shareholders meeting. ♪
bank, but they haven't confirmed that yet. the italian prime minister say they think convergence is become achieved. in the meantime, where they can actually agreed to the detail on that. we'll take you live to the europe for a currency analyst who believes the euro dollar will drop to 1.10 by the end of the year, because they will fail to do a deal. oil is hovers around $79, rebounding after breaking below 80 yesterday. let's send it over to courtney reagan. >> we actually saw it break beloaned -- so again still hovers rye, what's going on
right now? what kind of downward pressure? we've had a big down move. if we're going to have any kind of short-cover rally, we're right near the october lows, which was $725, so friday afternoon you might see some positions squaring. >> we have had come a long way. we've sort of moved on both of those, yes. >> yes, we did. technically we're near a support level, but of course a series of back economic numbers from china to europe, and we have the dead
crisis hanging over the market, that doesn't see anything very soon as a resolution, so a weak market, but opec may step? we are now $10 below their target, so you may see some action out of the opec at some point. >> last but not least, some relief for consumers. do you expect that to continue as much? >> well, the raw material has dropped so much, i do expect gasoline prices to remain under pressure. >> that would be good news for a lot of drivers. thank you very much, ray. back to you. so on the back of lower oil and gas prices, the stocks are going to benefit and give your portfolio some heat. we have plenty of that this summer. money manager mark trafg is president and lead portfolio manager. all right, mark, give me some names that you believe will benefit from what does appear to
be a sustainable move down in the price of gasoline. >> well, david maybe not the first place you would look, but the beer business. moulsen coors, it takes a lot of gas to transport kegs and cases of beer. molson coors beer, they have acquired a brewer in eastern europe. the beer business in the u.s., but we think there's a disconnect between -- where we see the value in this upper 40s, we get a nice dividend while we're waiting, certainly in excess of the ten-year treasury. >> any success in terms of what that would mean for margins? >> well, you know, anything helps when you're running a top business, so i don't have a
percentage figure for you, but i think it would certainly be helpful. >> new month mining is another one. i think what a lot of people don't realize is a lot of input costs to mining is the energy component. mark, how much thing do you think it could benefit? >> melissa, i think there's a disconnect embedded with gold and other minerals and new mo h the chinese save about 30% of their income, and a lot they want to convert into hard currency. this is also my anti-central banker play. i'm going to see what happens as we continue to borrow short and print more money. >> even though we just had a technically analyst who looked
at the chart and said he expects gold, it's a very bearish move. gold has gone negative for the year? i think technicians tend to be focused on the next three days, three weeks, three months. i feel comfortable, as long as it can said it at 1500 that we'll be okay. >> what about speedway motorsports? your third core pick here. >> you know, that's a little different. we have been suffering shareholders, simon of the racetrack businesses, both speedway and interinitial out of dayto daytona. those businesses is largely based on their -- nascar is on the second-most bush they've suffered, because as i would call them joe six-pack has not
been attending races as much. >> you've confused me, you see, because half of the commentary is half -- the second half is you may buy it, because more -- >> i'm not meaning to confuse you, simon. i think attendance will help at the margin if we bring the gas price down, but largely the value is from the tv contracts. >> where are we going on that, if that is the key reason for buys? >> i think there's a discount from the private market value we are a los angeles-suffering, but patient shareholders. >> and not just a shareholders, you own the bonds as well, right? >> that's right, so david, i like a little spread, i don't want to take much duration risk.
i want to be paid to wait, whether that's a dividend from a place line moulsen or corporate credit like speedway. >> i like the way you wrapped them both up. joe six-pack maybe going to a 12 of-pack. >> it's almost the fourth of july, so get out, watch some races and drink some beer. >> i'm getting thirsty. >> back to the xhob man image. >> my rule is no alcohol at 10:20 in the morning. >> that can be broken. you get a margarita machine humming on this set, i will join you. >> you have to have strict rules, otherwise you drink all day. very tricky. >> i didn't realize i was next to a couple lushes here. darden saling sales will continue to be weak during the remainder of the year. what is next? we'll break down the numbers next with two top-ranked analysts. stay tuned. 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. explorer card. you want to save money on car insurance? no problem. you want to save money on rv insurance? no problem. you want to save money on motorcycle insurance? no problem. you want to find a place to park all these things? fuggedaboud it. this is new york. hey little guy, wake up! aw, come off it mate! geico. saving people money on more than just car insurance.
[ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the 2012 c-class with over 2,000 refinements. it's amazing...inside and out. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. through mercedes-benz ♪music plays throughout
it's been a rough open for darden restaurant as it reported softer quarterlies. the company's ceo clarence otis said it would benefit from falling food costs, but the big picture is that consumers are still cautious. >> we would expect to benefit from the directs of food costs this year going forward i think it helps the fundamentals, but i think consumer sentiment plays a bigger part, and people are more fearful than hopeful. >> matt, at la czar of capital markets, he recently downgraded
to neutral. john bernstein has an overwait rating. the slowdown was somewhat telegraphed, and the outlook, we don't see any indication for fiscal 2013, which they just enter in june. they got it to where we thought they would, which is below the historical trend. >> the world isn't ending. what makes the story work is when people see them
outperforming their peer group. right now they are not outperforming their peer group. they had pretty discerns declines. let's come back to olive garden. which in perm terrence, decent up side. are you sticking by that? >> yeah, we haven't adjusted our estimates just yet. we're still fairly comfortable with garden up there in the high 50s as a price target. to your earlier point, the broader casual dining category remains a little more challenged. darden is clearly not immunity from that, but we think its poured folio is better position it is. two out of the three darden brands have been performing reasonably well and they have commodities which have become a meaningful tail wind. >> i'm sorry to interrupt action
but which two of the three brands are doing okay? olive garden and red lobster did see declines in same-store sales, and olive garden being about half of the company's sales, a decline is still troubling. >> as we move through fiscal sp, we would expect olive garden to improve through the year. longhorng, their third brand, is kind of exceeding the broader industry, and red lobs terse has been choppy, but in better shape than a year or two ago, so by comparison, it seems to be moving in the right direction. >> what sort of specials could they possibly view, that could actually -- that would move the needle at this point? >> they have a number of in addition tells whether it's from a menu perspective they're rolling out next week, i think two to $25 promotion. it's a whole lot of food that
will typically drive in a lot of traffic. and then they're rolling out a in menu later this year. >> i think we're breaking news, because the ceo said there would be a big drive starting on monday. two for 25, does that do it for you? >> no, i think there's a lot of noise, a lot of specials around that price point. it's a long road for them to bring value. corpsmenu, a majority of that customers come off, and they have to roll back their pricing, i think the brands are not well positioned. given sthouch price they are taken, so they're in for a repositioning of both olive garden and red lobster is in the middle of that right now. >> longhorn is an attractive brand, but still a very small part of the portfolio. i think their first quarter started off very slow. they insinuated there might be a slowdown, and i think you may seep some earnings contraction
shun. thank you both for joining us. thank you. >>. two for 25, that sounds like an opportunity to give olive garden a try. >> maybe take the kids out for a change. >> maybe the two of you will join muss. >> and carl would be back. >> $50 then for all four. but per person it's the same, right? >> i'll swing for it and go it the math. >> what a bargain. that is quite a bargain. >> but only until monday. >> you could wear your cargo pants, david, for breadsticks. >> got it. what is next for u.s. equities? we sit down with the chief strategist, next. almost every day i walk into the office and somebody asks me a question about the volt. what really blows them away is when i tell them i almost never go to the gas station,
despite the fact that they see me driving to work every day. i fill the volt up once every -- maybe once every couple of months. and that feels absolutely wonderful. i'm hardly using gas, but it's there when i need it. anybody that thinks that this car doesn't have solid performance, hasn't driven it. there's no other car like this on the road. ♪ at liberty mutual, we know how much you count on your car, and how much the people in your life count on you. that's why we offer accident forgiveness, where your price won't increase due to your first accident. we also offer a hassle-free lifetime repair guarantee, where the repairs made on your car are guaranteed for life, or they're on us. these are just two of the valuable features you can expect from liberty mutual. plus, when you insure both your home and car with us, it could save you time and money.
at liberty mutual, we help you move on with your life, so get the insurance responsible drivers like you deserve. call us at... or visit your local liberty mutual office, where an agent can help you find the policy that's right for you. liberty mutual insurance, responsibility -- what's your policy?
update. brian? >> it's rare we use the terms first similar and spiking on the day, but we can say that right now. it is down 88%, up today about 10%, because los angeles county has approved the installation to a number of first solar modules in a solar farm in antelope valley, which is outside of los angeles, so a big contract win for first similar. that stock is up 9%, but still down 88% why don't we head out to chicago. jim iuorio is at the cme. i look at this week, the fed is out of the way. we didn't get what at least some
had hoped for for more significant qe. oil prices are down. what is an investor to do when it comes to the stock market? >> well, if you're an investor, which is different than a trader, i still think three, four, five weeks down the road. big-caps look great, because everything else looks awful. even as the german bund has started a downward trend. what else are you going to buy? >> to me it seems like a better deal to buy a microsoft or mcdonald's. that being said, for the trader part of it, i think the reluctance of the fed to expand their balance sheet and the weak economic data globally will probably weigh on the stock market. yesterday did some damage on the charts to me. >> the trade may be down for now. if you want to just put something away, it's not not a bad time to do it in the equity market? >> i think without question, i'm
looking to maybe buy cisco today. mcdonald's and microsoft, stuff that has a brand, good balance sheet, that's the stuff i like going forward. it might take a month, but it would go. >> jim, i can understand confide the german bund would fall, because it's been is overbought, and i think most would recognize that, what interests me more is the fact that the ten-year treasury yield has expanded substantially. that would indicate an unwinding of a flight to safety, it is a positive signal potentially on a number of fronds when the headlines seem negative. how do you connect the two. >> with the s&p down 30, our ten-year did for the attract a ton of buying. to it seems like people think there are better opportunities elsewhere. to go back to the bund, though,
i don't think it's always about the overbought condition. i think the rick is starting to bleed into germany, as germany takes on more of that debt. >> you know as well as i do there are many theories on the german bund has risen, not least -- >> no question about it. >> whether the swiss bank is putting cash into the market there. >> it's funny you mention that, too. you can't go there, because they'll issue you out of their currency. they've been very specific about what they want to protect. so the question is why are people not running to the u.s. treasu treasury? it has to be a yield and overbought thing, a condition where they knew the fed was going to buy long, so they priced that in. that's probably a bit of an unwind from an overbought condition. >> we're still at 165, simon. >> i got ahead of myself a bit. still a very low yield.
>> jim iuorio joining us, thanks a lot. have a great weekend. >> you too. market is bouncing back a bit. russ costrich is at blackrock group. you say that markets are likely to remain on edge. how do you invest if markets they went up in a very straight line the i do believe that stocks will get higher, but it's going to be a much rock iier road -- people are paying a huge premium for safety right now. a ten-year treasury has a very high duration with coupon payments this low, which means investors may be taking on more risks for safety than they
realize. my view is what investors should look for investment safe havens that offer some up side and income while still cushioning the down side. >> you bond believe these dividend-paying stocks will have the impact of a fiscal cliff, which you say investors aren't factoring in enough? >> to be certain, if we hit the cliff, everything will feel the impact. i'm still cautiously optimistic that it can be avoided, but that by no means is a done deal. just to get back to dividend stocks, one of the advantages is that typically dividend stock or a fund the dividend stocks will have a lower beta to the markets than a broader index, in other words you still will go down if the market gets hit, but you probably will not go down as much. while a lot of people are talking about the dividend playing the u.s., we're seeing some of the best opportunities for different stocks outside of the u.s., in places like asia or
even northern europe, with ten times earns with a 4% or 5% yield. >> the trouble with that is if the dollar keeps strengthening, which it might well do, you could wipe out an and you have lot of gains bat at home. >> i don't disagree. you know, a couple things to consider, first of all most investors already have a very long dollar position. they have a strong bias, diversification over the last term is not a bad thing. secondly, it depends on where you're taking the ricks. i don't want to necessarily be long the euro versus the dollars, but if i look at some of the currency in asia, i think over the long term, they're likely to appreciate versus the dallas, so while you're certainly aware of volatility -- >> hang on in a minute. >> if i'm looking 5, 10 years, i might want that exposure, but why buy now? you know who is hurt the most in that environment.
if the united states seizes, the other markets will seize. it will be brutal. >> you know, i would push back a little bit on that. i think if the u.s. has the fiscal cliff, no doubt it would affect the rest of the world, but the notion that emerging markets are the high beta play, i think that's starting to change. the source of the volatility right now is not the emerging markets. it's europe and the u.s. at some point greater macro stability in the emerging world means less volume tilts for those assets. >> i don't know, russ, i've been watching that thing for a long time. the correlations are always there despite everyone saying what you just did, that at the end of the day it's a great way to mitigate rick. >> if you get a day like yesterday, but correlations tend to go to 1, there are few places to high, but going back to the
notion are you a trader or investor? these correlations might be high. if i look out 5 to 10 years, you are -- it's not that they decouple, but they will be less influenced by the happenings in u.s. or europe over time. >> russ, we'll left it there. good to see you. >> thank you. big banks more or less -- so what's next for financials? we'll talk to jeff hart of sandler o'neill, who is sticking by his "buy" rating on all the major financials. that's next. [ male announcer ] when this hotel added aflac
suggesting they have had made significant progress on their way to a closer union, which of course will be unveiled at the big summit next thursday and friday. joining mess from london is stephen barrow, from standard bank. stephen, thank you for joining us. you're bearish of the euro. why do you not believe the lead leaders will get their act together? >> i don't think the things they're talking about even thousand are still heading in the right direction. i think we're still hearing about, you know, growth initiatives, still hearing about bailouts or spanish banks, various other measures. i think the key issue that really would move us towards a sort of more stable waters in the euro zone is really the development of a single bond
market. as far as i can tell from the summit that's occurred today, that germany and a number of smaller eurozone countries are still resistant to that. >> the big call for you is euro dollars at 1.10, a ten-cent move at the end of the year. huge. why do you think it will break here now? >> i think it's obviously fallen to some extent. we did have a period earlier in the year when the euro/dollar was quite table. the first greek election, the sort of failed election as it were, ultimately did bring a break lower, and i think the markets are in perhaps a holding pattern, maybe giving them the benefit of the doubt, but if that doesn't provide the right sort of road map to get us out of the this crisis, then i think
your dollar is going down to is.15. >> we could have had this conversation, it would seem to me, of course the only thing that's change is that time has gone by. how much time is left for something to actually meaningfully change? inside the euro zone. i think the election whilst may have appeared positive hasn't changed a greet, and therefore we are counting down the time until that country in my opinion is forced out. i think that stage will escalate the pressure really quite substantially. then the question is, what happens to the euro zone. do we seer integration and the sorts of thing the ministers are talking about right now? or does the whole thing really fall apart? i do tend to lean towards the former view, but i do think we
have to get to that sort of crisis point to really force the debate on some of the key things that need to be developed. one of those being vessel the -- your vision -- you're with them, in the very long term cause, the long-term vision, that's the make or break. nearer term, there are other things clearly under discussion. we understand that mario monte, the italian prime minister wants some of the bailout funds to be used to the provision losses at the ecb, there's another idea that perhaps those bailout funds will directly and automatically buy italian and spanish debt if the yields move beyond a certain point. presumably the interim measures could make a huge difference. i look at the situation as being like a dam, with holes in it.
the policy makers are furiously trying to plug the holes with various different initiatives, like long-term repos from the european central bank, like bailout funds, but the trouble is the whole structure has weakened basically beyond repair. i think what's needed now is not necessarily more of these holes to be plugged as it were by these sorts of initiatives, but indeed a road map to show people that it hose toe rebuilt. i think we they'd a long-term vision, not these short-term fixes. >> mario monti says they're on the way to it. we'll see what they deliver next thursday and friday. steve barrow, head of g-10 research at standard bank, live from london. investors digest the big
downgrades from moody's late yesterday, so with morgan stanley avoweding that three-notch cut, what is the -- amid the sector. jeff sector. we'll get more on that. first over to rick santelli. >> i tell you what, today is about m & m and m&ms. we're going to talk about medicine and moody's and we're going to talk about microphones. a monetary history of the united states ground breaking. you may not believe some of the thoughts about alan greenspan and even though she wasn't a doctor of medicine, she had a thought of medicine and the market. this is big at the top of the hour. [ male announcer ] eligible for medicare?
that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement plans, they help save you up to thousands in out-of-pocket costs. call today to request a free decision guide. with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients... plus, there are no networks, and you'll never need a referral to see a specialist. join the millions who have already enrolled
in the only medicare supplement insurance plans endorsed by aarp... and provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. with all the good years ahead, look for the experience and commitment to go the distance with you. call now to request your free decision guide. ♪ welcome to the world leader in derivatives.
the banks are helping this market around. >> jpmorgan biggest gain on the dow up 2.4%. we're edging higher. the breath of the rally is getting higher. it's not a rocking session. you have to put it in context of that heavy selling yesterday. >> right. yes. absolutely. again, jpmorgan and not just today but as you mentioned over a longer period of time and certainly the day before jamie dimon first appeared in front of the senate banking committee. since then added millions to the market. >> widened that gap between it and wells fargo. at least jpmorgan for its part back up to 140 billion in market value. >> take a quick check on shares of monster beverage. interesting mover. yesterday after the close it was disclosed it would be added to the s&p 500 at the close of trading june 28th. stock was trading lower and
earlier this week it was downgraded over slowing sales gro growth. even on news being added to this major index, it's trading lower today. >> tweet time. we've been breaking news on cnbc today. clarence otis on "squawk box" announcing there will be a major promotion on olive garden next week. take a listen. >> we're working on a number of things to improve results there. consumers will see the results of that work really beginning next week with olive garden's next promotion. >> here's your chance to give clarence some advice. our tweet question this morning is forget unlimited bread sticks and salads what olive guard needs to offer to get its customers back is -- we'll air your responses later in the program.
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.
[ male announcer ] trophies and awards lift you up. but they can also hold you back. unless you ask, "what's next?" introducing the all-new rx f sport. this is the pursuit of perfection. >> all right. time to squawk on the tweet. darden restaurant ceo clarence otis saying he's going to launch an olive garden promotion next week in response to a pullback
of customers. we have a lot of good responses here. bob tweets, a bottomless glass of wine. >> i like it. nice. >> i think that's a good idea. chuck tweets they need to add a big mac and 32 ounce drink but not in new york where that is banned and our executive producer of the 2:00 hour writes, hire will ferrell as a spokesperson. a lovely idea. >> obviously his father figure in favor of will ferrell. we know the answer. it came up on the conference call. it's two for $25. that's what it's going to do. >> is that going to get you into a olive garden? that's the big question. what did do you in an olive garden? >> it was a quick glass of wine with my broker. if you are just tuning in, where have you been? this is what you miss sed so fa
on cnbc. >> this is what's happening so far. >> we need investment in research and development, education, infrastructure and people putting money to work and we get a better economy in the long run. >> the environment continues to be about the same. it's bumping along at a level that's not as robust as any of us would like. >> this is done by real people, real professionals who put ties on every morning and wear suits. some may be men's warehouse. i don't know. the real issue is it's crazy. on wall street we focus on the idea that when you pay gasoline at the pump it's bad if it's lower. you have food costs lower and mainstream is still hung up on the idea that it's good to pay less at the supermarket and good to pay less at the pump. i'm determined to get main street to understand how bad that is. >> good luck with that.
>> off to the races. friday trading sessions begins here at the big board. >> near term 1300 to 1305 is a level i look at. if we reach that, we test june lows which would be lower than that. we would get down as low as 1275 to 1260. >> i like a little spread. i don't want to take much duration risk. you know, i want to be paid to wait whether that's a dividend or a corporate credit. >> good morning. welcome to the third hour of "squawk on the street" here from the new york stock exchange. let's get a check on the markets. i can tell you that half of the s&p 500 in positive territory. only 117 down. it's important because yesterday you had that big downdraft. we lost 250 points on the dow. we bounced back a little bit on today's session as we head into the weekend. first solar the biggest gainer on the s&p after the company announced it will resume work on a major power station for los angeles county. retailers making up some of the
biggest losers today. macy's down sharply on news that the ceo will be deposed in the martha stewart lawsuit. jcpenney, limited brands and nordstrom pointing down today. >> stocks are rallying in spite of a call because of the call we should say but which one should you buy? we have the answer. plus, the world's largest cruise operator posting a sharp drop in profit compared to last year. can the company make a comeback after a rough year which included the cost of concordia disaster and after microsoft introduces its tablet, rumors of a smartphone hit the street. we'll discuss what a microsoft handset could mean for the manufacturer. and the highly anticipated model being rolled out today by tesla.
>> we start with big news that haunted markets for the past 24 hours, it's the moody's downgrade of the big banks. goldman sachs, jpmorgan, morgan stanley, goldman sax and citigroup. jpmorgan is moving higher. a gain of 2.3% on the session overall. jeff harte joins us now. what do you think of the move by moody's so well telegraphed and the reaction to it? >> it's really kind of the long awaited news. it may be a little bit of by the rumor sell the news in reverse. we knew it was coming. it came. and the really only potential surprise was a positive and that's morgan stanley only getting two notches instead of three notches. it seems counterintuitive that the stocks would rally on a downgrade. it actually makes sense because it was expected, you know.
it was generally good news versus expectations and this removes some uncertainty and the markets often times like uncertainty even less than they do bad news. >> you are bullish on the banks and we'll get to that in a moment. there must be a material impact now for these ceos and the treasury departments and how they do business in the wake of those downgrades. >> you know, i actually don't think there will be. there will certainly be an impact. i don't think it will be that material. one reason is this is a downgrade. if only one of the group gets downgraded, it's bad news for the company. when the whole industry gets it, it's less than bad news. the things that usually would hurt you with a downgrade, i don't think are that relevant today and that's funding costs. at least the u.s. banks most of them are letting debt roll off their balance sheets and have hardly any commercial paper outstanding. i don't think it will have the impact we're used to seeing.
>> you like citigroup the best. why is that? >> well, you know, i tend to be more constructive than destructive in a macro sense. i think we'll reach some kind of a conclusion in europe that's not the end of the world and when you look at the stocks that have been beaten up in the wake of the uncertainty coming from there, jpmorgan and citigroup stand out as the two. i go more the citigroup route because i think they have less capital markets dependent business mix so you could get better news out of that franchise without the macro stuff going the right way. you know, it's a good capital return story. i'm pretty bullish on my whole group the way it's trading right now that will it be up tomorrow or next week, i'm not sure. will it be up a year from now? i think they'll all be up a bunch. i think citi is one of my top choices in there. >> we have talked to each other for quite some time. you appeared on "fast money" and
it seems that you have said this last year about the bank stocks as a group as well. in a year do i think stocks will be higher? yes, i do. in a year they haven't gone too far. at this point can you concede to the investor these are trading vehicles and not long-term investments or right now they're investments to hold for a year versus a year ago? >> what we keep running into is the macro backdrop looking like it's getting better and you see big rallies out of the stocks but then some kind of external storm cloud comes along and rains on the parade so to speak. as i look out, the question becomes are we going to have continued large systematic shocks derailing the economic recovery or is the global economy going to get back on its feet and start moving in the right direction. that's where it becomes what's your bet? if you are destructive and think we're heading to the abyss
economically, you don't want to touch these things. if you think the economy can get back to a 3%, 4% sustained growth rate you can buy citibank and morgan stanley at half of value meaning the market expects them to take big losses and not cover the cost of capital. the last couple of years we had things start to look better and i like that and then they have gone the wrong way. eventually i think that changes and the market has to start considering that maybe things will go right opposed to going wrong. >> thank you very much for joining us. jeff harte, thank you. >> let's get to the cme group and check in with rick santelli and the santelli exchange. rick? >> good morning, melissa lee. you know, i saved an article, a great article, anna schwartz, one of her last long interviews and it was in the city journal. of course she was the author in the '60s along with milton friedman of a monetary history
in the united states which created a bit of a revolution and wasn't accepted in the beginning. the reagan administration grabbed and ran with it. she had a lot of things to say you may not believe. on the first score, let's talk about what she said about alan greenspan. she didn't think he stayed true to being a real monitorist. she used words like fatal co conceit. he wants to avoid recessions at all costs. too easy monetary policy induces people to acquire whatever is the object of desire in a mania period. i think that's very telling. sometimes recessions are good. cleans things out. what did she have to say about ben bernanke? you need background here. ben bernanke was very kind to anna schwartz based on her book and things that happened during the depression he said along the lines of the depression will
never happen again and in many ways he thanked her for that. here's what she said about ben bernanke and the way he was trying to pick the credit crisis in '08. she says he's fighting the wrong war today. the present crisis has nothing to do with lack of liquidity. i know somebody in '09 that thought that too. i won't give any names. rick santelli. in terms of what's going on with hank paulson. they said we need dough or things won't be good. this is what she said about mr. paulson's notion to recapitalize the banks. she said doing so is shifting from trying to save the banking system to trying to save bankers, which is not the same thing. i tell you what, these are sage words. real quickly about moody's. everyone is whining. what do they know? it seems as though if the investor public knows everything and they don't need rating
agencies, let's get rit rid of them. individual responsibility goes to the corporate level even though before the issue of the credit crisis. bear stearns, lehman, didn't have it right. the microphone, europe know who is speculating and know optimum times to use the mike. speculators are in the crosshairs. a lot of microphones in europe. melissa lee, back to you. >> thank you, rick santelli. you are on fire today, rick santelli. you can barely get it all in. >> i know. i'll have to talk faster or cut material and i never cut material. >> not faster, rick. not faster. >> see you in a minute, rick. with falling gas prices putting more money in people's pockets, consumer stocks could see a big spike including food stocks outperforming some of their peers. jane wells is live with more on that. >> simon, are you eating out
more or less than you used to? >> it depends on whether i get my fresh direct delivery in or not. how bored i am of the four-minute meals. there's only one of me. it's quite cheap. >> we need more of you. god bless you. raymond james lowered expectations for the casual dining industry saying the abrupt slowdown in monty casual dining sales that started in march continued in may. it has a strong buy on red robin. some analysts believe casual dining could suffer but so-called fast casual could do fine. for example, compare sonic to darden. bank of america merrill lynch says they are losing share to fast casual. when you're here is familiar is slogan to darden's olive garden. earnings met expectations but sales were light. big picture.
they expect the economic recovery to be frustratingly slow. >> the environment is bumping along at a level not as robust as any of us would like. >> meantime, this week sonic came in with solid earnings and earnings are raised maintaining a buy and chipotle pulled back from april highs but outperformed darden, cheesecake faculti factory and panera bread. they hope lower gas prices will get people dining out. the price on cracker barrel has been increased. it's our view that average miles driven through summer season may increase 1%. food costs are dropping. maybe not so much for beef. darden ceo clarence otis pointed
that out this morning but says the biggest issue is one he can't do a lot about. consumer sentiment. more people are fearful than hopeful whether europe or u.s. budget problems. back to you. >> and i covered the travel and leisure industry as you know and that's what ceos will say time and time again. it's more about consumer confidence ultimately than about gas prices. are you eating out more? >> you know what? no. it's not so much a price issue. it's become a calorie issue as my metabolism slows down. it's just a lot lower calories if i cook at home more. my family doesn't really call it cooking what i do. it's sort of a bad experiment. >> my mom was the same. thank you, jane. nice to see you. coming up next, carnival corps wrapping up its conference call after reporting
rachel, i want to start with you on the fuel cost excuse. when will we see that impact earnings? >> they took up the outlook to account for lower fuel costs. >> they did. okay. if terms of european demand, rachel, are we seeing evidence that at least after the quarter close that it is picking up at all? >> no. we're seeing contagion top other regions. europe has been exceptionally weak and we see pricing pressure in alaska and they took down the mid point of the full year constant currency net yield outlook by half a point and they are calling for the back half of the year to be down about 6% to 7% which is pretty dramatic. >> kevin, you have a neutral rating on the stock. with headwinds that you know about, what do you see for the stock by the end of the year as we are approaching this uncertain time in the markets with the fiscal cliff looming and situation in europe not getting much resolution at this point. >> at this point i think maybe
you can see clearly the numbers back half of the year that will be more challenging situation than i think myself and also investors that had expected for the second half of the year. biggest headwinds coming from europe. on the call they spoke of spain, italy, and germany and u.k. are doing okay but primarily spain and italy that are the tougher markets for the company. one positive that we've seen of late is that the company has revitalized marketing efforts to an extent bookings have come back but they are at much lower prices. specifically the costa brand is down 20% to 30% on a pricing perspective. fairly significant price issues as you look through the back half of the year, third quarter being the most important. at this point 85% booked. the last remaining 15% price could be an issue there as well. >> so many macro issues facing this industry but is carnival
hit harder than royal caribbean? >> no, actually i think we are even on substitute goods as we said in the past. the issue you have is things overseas do begin to stabilize or we come into the fourth quarter which is heavily caribbean dependent and the first quarter of next year where you have more difficult comparisons. i think the u.s. economy will come into focus and those are probably the pu.s. headlines coming into focus and the stock stalls for a while. >> i'm sure people are wondering in terms of booking your ticket, the ceo commented in the earnings statement that ticket prices held firm. this is excludeing the cost of concordia properties. are we going to look at price decreases, sales in other words, going into the back half of the year? >> for the third quarter like i
said before 85% of their bookings have already been done. the costa brand if you are looking to go to europe, obviously airfare is an impedime impediment. costa brand is pricing down 20% to 30%. that's certainly a better relative deal than you saw in 2011. across the board what we heard was occupancy and pricing was down. certainly a better way for consumers to take a cheaper vacation if the wallets of discretionary income are tighter this year. certainly a better pricing environment now than we've seen over the last couple of years. >> all right. got to leave it there. thank you for your time. we appreciate it. coming up next, rick santelli explores the danger of dark pools and while we count down to the close in europe just about nine minutes away, europe is counting down the minutes until the highly anticipated football match between greece and germany. germany is the favorite to win
and by the look of the stats, germany is the economic winner as well. no surprise there. much better shape than greece as far as jobs and gdp. sic plays throughout ♪ summer in new york state has something different for everyone to love. discover what you love. visit ilovenewyork.com to plan your summer trip now.
there's no other auto insurance product like it. better car replacement, available only from liberty mutual. it's a better policy that gets you a better car. call... or visit one of our local offices today, and we'll provide the coverage you need at the right price. liberty mutual auto insurance, responsibility -- what's your policy?
welcome back. "squawk on the street" third hour. rick santelli here. jeff carter here. he's happier now because he got 95 off on the pit behind us. the cattle pit. >> hogs. >> sorry. don't want to see that price in cattle. yesterday there was a lot of hearings that had a lot to do with the pits behind us in regard to things like high frequency trade. can you run us through what happened and what your thoughts are? >> they are trying to get a 58-word definition for high frequency trader. i think it's impossible to do that. you have to take benefits of electronic trading and benefits of the open system because there are benefits there. and the things that go on on the
screen would never have been tolerated in the pit. we have flash crashes. we have flash rallies every single day that happen. you have front running that happens on the screen and in the pit guys would have protected their customers and they would have called it out. it would have been illegal. so for instance in the soybeans a little bit ago, a couple weeks ago, there was a commodity spread that a market order came in. the market tanked 40 points, 50 points, was filled and then the market went back up 50 points all in the blink of an eye in a second. it was clear it was high frequency trader front running. it happens all the time. i don't have anything against electronic trading per se. there are benefits. it's cheaper. it provides a lot of access to everybody. we have to figure out a way to marry them because there's benefits of the open outcry system that aren't reflected in the electronic trade and exchanges should think of how it
interfaces with contracts. the s&p, interest rates and 4x markets are 24/7 markets. people need to hedge their risk. grain markets and meat markets may not be that way. i don't think when the farmer puts his head to sleep at night on the pillow he wishes i could hedge my beans or i hope there's price transparency at midnight so i can hedge my crop. they have to tailer for the particular markets and commodity to get the benefits of everything. goal of an exchange in a marketplace should be price transparency. right now that's not happening. >> those on capitol hill, i know you are losing joe is who is a friend of the exchange and ours but you need to have carter on the list. >> thank you very much, rick santelli. it's closing time across the
pond. we have details on the impact here at home after this. stay tuned. 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. [ creaking ] [ male announcer ] trophies and awards lift you up. but they can also hold you back. unless you ask, what's next? [ zapping ] [ clang ] this is the next level of performance. the next level of innovation. the next rx. the all-new f sport. this is the pursuit of perfection.
ttd#: 1-800-345-2550 let's talk about the cookie-cutter retirement advice ttd#: 1-800-345-2550 you get at some places. ttd#: 1-800-345-2550 they say you have to do this, have that, invest here ttd#: 1-800-345-2550 ttd#: 1-800-345-2550 you know what? ttd#: 1-800-345-2550 you can't create a retirement plan based on ttd#: 1-800-345-2550 a predetermined script. ttd#: 1-800-345-2550 at charles schwab, we actually take the time to listen - ttd#: 1-800-345-2550 to understand you and your goals... ttd#: 1-800-345-2550 ...so together we can find real-life answers for your ttd#: 1-800-345-2550 real-life retirement. ttd#: 1-800-345-2550 talk to chuck ttd#: 1-800-345-2550 and let's write a script based on your life story. ttd#: 1-800-345-2550
it's not good. the flip side of course of all of that is that we didn't get massive central bank interventions that we thought we might have had and that is having an effect on the markets. >> the european markets are closing now. >> you'll see that it is red. economic and sensitive stocks and mining stocks are not doing well again today because of all of those growth concerns that we spoke about over the last 24, 48 hours. spain is higher again today, which is interesting. the story of the week has been these rallies that you've had on the spanish and italian banks. partly on an expectation of course that we'll get some sort of shift on supporting local bond markets. if i show you the major -- where you get volume -- major markets, london, frankfurt and paris, initially at the beginning of the week as the event risk of what might have happened over greece dissipated, shorts came back in particularly on french banks took us down and then it was all about the fed really in the latter half of the week
which took us almost to flat for those major indices in europe overall. again today you've seen some of those italian banks and spanish banks bouncing back. a denial from a minister in spain they'll subordinate with the rescue package and we have figures coming through on that. as i'm aware, no formal request for the spanish to actually access those emergency funds. you see some of these weaker banks in spain rallying again today off low bases. that's true in italy. a good day again for some of those italian banks if we have a look at some of those. you will see uni credit fat for the session overall. i'm sorry to keep showing you this. it's important. yields on ten-year in spain have had major moves to the positive this week. we discussed all of the things in the air about what they might or might not do with bailout funds to support sovereign debt. nothing out of that meeting today in rome with no movement but you don't know what's
happening behind the scenes. way above 7% on the spanish ten-year at the beginning of the week. we have come substantially lower. i know it's erratic and not necessarily a major turning point. it's something to note. let's look at where we are equally on the italian yields and importantly they have come down during the course of the week. i know you see we currently are at 5.77% in italy. that's way too high. they're going to have to do something about it. just notice that's going on. let's just recap what we got out of this meeting today. the four major leaders of eurozone meeting in advance of the big summit next week. a suggest that markets need to know the euro is here to stay. in france saying the summit next week must convince the eurozone. we assume they are moving toward a banking union. we assume they are moving toward some sort of longer term fiscal discipline but for the moment we get very little more than that
and let's hope there's nuggets within that that will come out next week to short-term support the market bailout funds for sovereign debt or whatever that might be. there's a lot to play for clearly. >> one can hope, simon. thank you for that let's bring in mary thompson joining us on the floor of the stock exchange. >> the markets are holding onto steady gains of course after yesterday's big sell-off which was driven primarily by concerns about weakening global growth. the concerns linger just as they do in europe as simon was pointing out earlier as we look at the sector moves today. in large part because we continue to see weakness in both energy and material stocks. to the plus side, financials continuing to rally off the back of those bank downgrades by the rating agencies. moody's ratings as expected removing some uncertainty and giving lift to the bank stocks and yield are coming down according to traders for these banks and that's of course an interesting thing to watch. in large part because it will be
the price of the bond markets that determine the pricing of these company's future financing. we also want to appointed out weakness in energy specifically. the oil services specifically. this group has been down throughout the week. it continues to be weak today. crude is down 6% for the week. oil service stocks among the leading decliners today. take a look at how some of the members have performed week to date. all of the members of this index down week to date. these are worst performers for this week. transports also under pressure today. down just about 69 points as we speak. a couple reasons for this. we're seeing weakness in the railroad stocks. a lawsuit alleging a number of railroads engaged in price fixing on fuel surcharges to boost revenue was received class action status last night giving a -- it was putting pressure on these stocks and ryder, which is a trucking company, coming out and lowering the forecast for the quarter seeing weak demand and expects that weakness to
continue through the year putting pressure on transports which are down 68 points. dow holding onto just about a 55-point gain. melissa, back to you. >> thank you very much, mary thompson. >> let's get back to rick santelli for his take on europe. assuming that you are as ever unimpressed, rick. >> i am. i'll tell you, simon. nothing can express how traders on this floor now perceive almost every headline out of europe. look at this 24-hour euro chart. we saw the recycled collateral story from yesterday with a couple of new facts about acid backs and like a rocketsh ship, the euro goes up and then the reaction back to where it started if not a little lower. but what is interesting is once again go back to the credit markets. the adult in the room. you see that the elevated that
didn't sell-off as much as it did on rallying. vice versa in terms of price. i think that our treasury is there. so you watch closely as anybody out there. do you sense that there is -- i don't know, chicken little dynamic. traders are nervous because of tape bombs but longevity effect seems to get shorter and shorter. >> i'm an optimist. i can't see that -- you have to be constructive to follow it blow by blow otherwise if you write the whole thing off, you'll miss the point of it. i still think -- i still think the move we had on ten-year treasury this week is significant. i think the fact that it rallied is significant and i think that a lot of -- i know the growth figures were bad. survey data was bad. dominant theme this week is the lack of qe-3 major qe from the fed from ecb. they moved on collateral today. i think that's the major market
mover that the big central banks are not prepared to come in and massively inject liquidity. when we were speaking on friday, i thought if the greek election went the wrong way that on sunday night they would all be out and they would be massively pumping liquidity. they didn't do that and now the market has to focus back on the growth dynamic and that of course is negative. that would be my take. >> real quick. three things. i agree with you. no quantitative easing. let's shoot fireworks. i agree with anna schwartz. it doesn't do a lot. second issue in terms of being constructive, you know, i understand where you are going. the last thing i'll leave you with is i heard the same thing said before. bear stearns before lehman and being constructive leads to destructive ends. i say be realistic. we didn't make this mess. it's our job to report it. you can't wallpaper over termites. back to you. >> i think that's a good point in terms of the expectations because it was almost as if you
wanted a worst result in greece in order to spur central bank action. you wanted worst action to fed federal reserve action and citi saying qe-3 will be down to 1285. >> on the flip side of dodging the bullet on greece, it wasn't a terrible result. we didn't fall apart. actually to return to the status quo isn't positive either. you can't rally on it. you just don't fall out of bed. >> it's not bad enough to trigger backstop action. that's the world we live in. rick, always good to see you. >> have a great weekend. >> you too. let's send it back to headquarters and check in with brian sullivan on a market flash. >> maybe not as exciting as the fight over greece. however, universal display is in play right now. herb greenberg has been all over this company and written about it a lot. deutsche bank with a buy rating initiation and $45 price target. they say they like competitive
position. they think that samsung and others work on displays that universal display may benefit. i'm sure herb greenberg would beg to differ. he's sitting there in a robe and snuggie. >> that's the meeting before "street signs" today? >> that or the forever lazy which is another one of those comfort things, which i think -- i'm going ship a bunch to ecb. >> okay. thank you, brian. thank you very much. straight ahead on the program, tesla delivering the first model s ahead of schedule. the newest model. will the demand hold? that's next. first, here's a look at the winners and losers from europe's trade today. [ male announcer ] it's simple physics... a body at rest tends to stay at rest... while a body in motion tends to stay in motion.
staying active can actually ease arthritis symptoms. but if you have arthritis, staying active can be difficult. prescription celebrex can help relieve arthritis pain so your body can stay in motion. because just one 200mg celebrex a day can provide 24 hour relief for many with arthritis pain and inflammation. plus, in clinical studies, celebrex is proven to improve daily physical function so moving is easier. celebrex can be taken with or without food. and it's not a narcotic. you and your doctor should balance the benefits with the risks. all prescription nsaids, like celebrex, ibuprofen, naproxen, and meloxicam have the same cardiovascular warning. they all may increase the chance of heart attack or stroke, which can lead to death. this chance increases if you have heart disease or risk factors such as high blood pressure or when nsaids are taken for long periods. nsaids, including celebrex, increase the chance of serious skin or allergic reactions or stomach and intestine problems, such as bleeding and ulcers, which can occur without warning and may cause death.
patients also taking aspirin and the elderly are at increased risk for stomach bleeding and ulcers. do not take celebrex if you've had an asthma attack, hives, or other allergies to aspirin, nsaids or sulfonamides. get help right away if you have swelling of the face or throat, or trouble breathing. tell your doctor your medical history and find an arthritis treatment for you. visit celebrex.com and ask your doctor about celebrex. for a body in motion. [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the 2012 c-class with over 2,000 refinements. it's amazing...inside and out. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. like in a special ops mission?
you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering, web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. coming up at the coming up at the top of the hour, forget the fiscal cliff. goldman sachs says we have a bigger problem. goldman's chief economist joins us to explain that. and with banks moving higher despite a round of downgrades, is now the time to buy? we'll ask the traders. one commodities trader reveals the one thing that could send oil higher. guys, we'll see you in a bit. >> looking forward to it. thank you for that. the latest model of the electric car is rolling off tesla's
assembly line today. phil lebeau is in chicago with more. >> a lot of optimism about the model s. delivery starting today in fremont, california. that's the old gm/toyota plant. the model s is important for a couple of reasons. people are looking at this car saying with ining will it actup to expectation? people have put down deposits. starting tomorrow through the next 45 days. when you look at the model s, the performance that is expected is impressive even though the price for the vehicle may be higher than some people expect. $57,400 all of the way up to just over $77,000. that's the price point for the model s. remember that's before the federal tax credit. mileage per gallon the equivalent is 89 and range on this vehicle 264 miles when it is fully charged.
the more important question for investors, what's going to happen for tesla the company? can it get up to speed as a mass market manufacturer? they'll deliver 5,000 model ss this year and deliver 20,000 next year. when you take a look at shares of tesla, you may say the auto stocks are under pressure. what's with these guys? why is it moving higher? a slew of notes from a number of firms, goldman sachs raising near term price target up to $50 and a number of firms saying we think tesla cannot only meet expectations with you bill change the auto industry in terms of what's expected. when the deliveries start, the thing to watch here, it's not just performance of model s. it's whether they can meet expectations in terms of manufacturing this vehicle and making these targets that are out there. >> phil, i'm curious. at that price point, whose share would tesla be taking? likes of a bmw or lexus or top
end of the market? >> not any one manufacturer but the luxury lineup is where they will target people. they're not going to people looking for a $35,000 electric car. that's in the future for tesla. the roadster got great reviews and that's why a lot of people say i want to buy the model s. >> looks like a nice car there. thanks so much. coming up next, could microsoft be the next big player in the smartphone market? we'll talk to the analyst who says, yes, it's possible and what it would mean for microsoft's future. this is the first car that i've been totally in love with
in every way, shape, and form. it's my dream vehicle. on a day to day basis, i am not using gas. my round trip is approximately 40 miles to work. head on home, stop at the grocery store, whatever else that i need to do -- still don't have to use gas. i'm never at the gas station unless i want some coffee. it's the best thing ever. as a matter of fact, i'm taking my savings so that i can go to hawaii. ♪
just just days after microsoft unveiled the new surface tablet, there's sotalk the software gia would make its own smartphone. let's bring in an analyst that came out with a note suggesting this idea. it's always good to speak with you. >> thank you. >> it's fascinating because when this note crossed, a lot of people said microsoft to make microsoft branded phone actually in your note you write we would not be surprised if microsoft were to decide to bring their own handset to market next year. what's the probability of this happening? >> well the surface tablet is being built for microsoft and i believe they are also building a phone for microsoft. the question would be is this a reference design for others to bring to market or will microsoft decide to bring this to market themselves?
i'm not sure the decision has been made. i think when you compete against apple and google who do their own hardware now as well, i think the same logic applies in the handset businesses it applies in the tablet market to innovate and be competitive with apple, you have to be world class. microsoft is motivated to do their own handset as well. >> i know there's a lot of unknowns. this thing doesn't even exist at this point. we don't know what price point or what it would look like. would this be a good idea? it seems like microsoft is moving more and more into the hardware market which is a difficult space to compete in and it could be a pressure to margins. >> yeah. we're not eager to see microsoft enter the hardware business. it's a lower margin business. i think the world has changed and we're finding that you can't necessarily depend on your partners to deliver the invas n
innovation required to be competitive with companies like google, samsung and apple. i think the stakes are higher. the need for innovation has gone up. we're talking about world class next generation products. i think microsoft is reluctant to just depend on someone else to do that innovation for them. >> so what you're saying is that microsoft is stronger than on its own than it is in collaboration with nokia? it's existing mobile handset partner. >> you have to hedge bets a bit. you want to depend on nokia, samsung, htc and a few others announcing support for windows phone 8. these products will be out later this year. i think you want to make sure that you've got a product that also is trying to innovate and if your partners do a better job, terrific. >> but, rick, this isn't microsoft's business. it doesn't have scale.
i mean, i don't know how many people at apple work on the new iphone, it will be vast with no how and patents. microsoft doesn't have that. it's not its core business. how can they move to the cutting edge and stay there? >> that's really another question. i mean, i think against apple and samsung, you know, they have sucked all of the oxygen out of the market. it's going to be a challenge to be you csuccessful in the smart market. what's the best avenue and should you consider doing your own hardware in order to be competitive? the decision will be we need every chance to create world class innovative products and if that means we're spending money at microsoft to do that, that's an avenue you want to explore. i think there's a lot of opportunity, the carriers want
an alternative to the iphone because economic model to them is not that appealing. i think they are coming into a market where there will be a lot of opportunity available to them. >> at the same time to simon's point though, rick, microsoft has had quite a run so far this year in terms of stock breaking out of a decade long range at the same time. it feels like microsoft is playing catchup on the tablet and smartphone. is it possible to actually get into these markets at this point in time and be successful or be profitable without hurting margins and what investors like so much about the company? >> you are absolutely right. when i talk about microsoft with investors, there's tremendous skepticism as there should be. they have done a pretty bad job of smartphone, tablet, apple has run away. i think the opportunity is it's not so much will it be apple or microsoft, microsoft has strengths in the enterprise
market, in the market where there's an infinity for office for example. i think microsoft can do really well within their area of strength, which is leveraging office. in addition to apple doing well on the consumer side. i would tend to think it's not apple or microsoft. i think by later this year the street will say microsoft can do well with tablets and well with smartphones and it doesn't mean that they have to take it from apple because i think there's a real complement on the enterprise space to delivering a platform for innovation. >> rick, always good to see you. >> rick makes of course the very important point in that interview that it is microsoft's relationship with the telecom carriers that could absolutely be key. let's bring in the senior writer at cnet. i know you have done work on this. how would you characterize that important relationship? >> it's critical for microsoft.
right now we see a lot of enthusiasm from at&t and t-mobile and it's maybe six phones in total across the two carriers. microsoft needs a lot more support than that especially from verizon. we saw what verizon support for google android did for google's platform. it went through the roof. major marketing campaign was behind it. if microsoft could get something like that with windows phone 8, that would be critical and really great for them. >> how do they do that? do they offer it as a loss leader? samsung you often see them waving around because that's the $100 phone potentially. >> i think what we see with windows phone 8 coming up is a new platform allowing some of its oems to develop cool hardware. if you look at what windows
phone has been able to give so far, they have been lacking a little bit. it's been a single core processor. windows 8 will provide a multicore. verizon wants to sell budget phones. as rick mentioned before in the earlier segment, verizon and carriers are feeling pain from selling the iphone. it's not economically a great model for them. they would like to have another player in there. research in motion has always been a major partner with verizon but they're not doing so well either lately. maybe this is a great opportunity for microsoft. >> i guess sprint is the real case in point. we have to leave it there. have a great weekend. thank you very much. >> we want to remind you to keep the tweets coming. darden restaurant forecasting a
low quarter. what does olive garden really need to offer to get customers back? we have snarky answers after the break. summer in new york state has something different for everyone to love. discover what you love. visit ilovenewyork.com to plan your summer trip now. all in one account. keep watch on the markets. or use our exclusive tools to help find ideas. it's powerful, easy-to-use technology for trading stocks, options, and futures. keep trading whether you're at home, in the office, or on the go.
optionsxpress, the broker smart traders deserve. open an account today at optionsxpress.com. home protector plus, from liberty mutual insurance, where the costs to both repair your home and replace your possessions are covered. and we don't just cut a check for the depreciated value -- we can actually replace your stuff with an exact or near match. plus, if your home is unfit to live in after an incident, we pay for you to stay somewhere else while it's being repaired. home protector plus, from liberty mutual insurance. because you never know what lies around the corner. to get a free quote, call... visit a local office, or go to libertymutual.com today.
okay. let's get to it then. time for squawk on the tweet. darden restaurant ceo clarence otis said he's launching a big olive garden promotion on monday in response to a sharp pullback in his own restaurant traffic. so this morning on squawk on the tweet, we ask to you complete the following sentence. forget unlimited breadsticks and salads. what olive garden really needs to offer to get customers back is -- >> offer to buy back facebook shares. >> separate adult and family sections. when i go to the olive garden, i prefer my booth without other people's kids hanging over the back of it. >> this one comes from ralph. he says they need hooters style waitress outfits. >> are you familiar with the concept of hooters?