tv Power Lunch CNBC July 24, 2012 1:00pm-2:00pm EDT
>> sony. >> wellpoint,. >> mo. >> don't forget to tweet me on twit twitter. "power lunch" and the second half of the trading day starts right now. >> thank you very much. we have breaking news as we begin this hour of power. at a key meeting of european leaders, officials are now saying greece will need even more restructuring of its national debt. the markets were already down and that put ankle weights on the dow. see the extra dip at noon as we stand at 12,581 and change! john has insight about swing states and jobless rates. the numbers could tell the story of the november election. you'll only hear why right here on "power lunch." want a job on wall street.
crazy questions being asked of job street applicants these days. if i told you that the only way you were going to get this job is if you would let me sleep with your girlfriend, would you accept? more of those whacked out questions throughout the hour but a more serious note with sue and the markets. >> thank you. another day, another big problem in europe. it shouldn't be a surprise. the dow jones industrial average is down 144 points. better than 1%. down on the s&p 500 or 15 points. nasdaq down almost a full percent and gold down $2.40. west texas in ttermediate up 22 cen cents. we're getting reports from officials greece will need restructuring and put a lot of pressure on the dow. perhaps we shouldn't be surprised but the market is reacting as though it's another leg of bad news.
>> i don't think anyone is surprised, the reality setting in. everyone is hoping this will not be the case, that the macrodata won't turn south. everything is continuing to be weaker and weaker and more concern. the market's doing exactly what it's supposed to do. >> for the first time in a couple months, i'm hearing the recession word again, whether mr. geithner talking about the fiscal cliff in the news media this morning, he used the possibility of slipping back into recession. >> that's been going back and forth for a while and everyone's been saying it's not going to happen, not going to ppen. the macro data reports have been telling that story and forewarning it. it's a confirmation of that reality. >> we tested technical levels a little bit and key indices bounds off those. what are you watching? sn>> it was 13034 and we had
broken through. if we get to 13029, you will see a lot of momentum jumping in and technically broken and initiate sale orders and there you go. and then you find a lot of support. >> we will talk to you a little later in the hour and get your recipe. i think we may need comfort food with this market. kenny, see you in a little bit. >> recipes are always great. here to tell us how to play a down day. it's starting to feel a lot like last summer. >> if we can hold this range after the bad news we've had, it's not such a bad thing. one thing we learned over the last year, leg into your position, don't buy anything outright. try to buy the dip. in this market, i wouldn't buy anything here although 1330 is probably a decent spot to see if i can get a bounce. >> i would go subsequently buying in, leg-in.
>> yes. people try to sell into rallies, the people making money right now. anything you can lock in a profit. hedge funds are on vacation right now and starting to see a lot of long selling and what i would look at. >> all right. thank you. sue. ty, take a look at these pictures i will show you. this is the video farmers across the country will be thinking about for years. those crops may look green right now but that's in a very small section of the country. the drought in indiana is the worst drought in 60 years calling it the dust bowl of 2012. agricultural tom vilsack is in aim ames, iowa. and jane has him. >> mr. secretary, thank you for joining us. you prayed for rain and rain is coming and everybody bailing out of soy.
is it even achievable this year's crop could get close to 13 billion bushels? >> we won't know what the yield is ultimately ev lly until theyt the crop. even if we do better, it's because the technology allow us to weather adverse conditions more effectively. >> the last was 136 bush shells an acre, we're hearing 135 and goldman sachs says 136. of. >> you're talking about how it's going to rain and the revision of the soil and we're seeing the yields. right now, it's speculative but clearly this weather has impacted the crops even at 135 bushels an acre, still the top 10 crops in this country. >> even with ethanol and excess stocks and credits. even 120 bushels an acre, do you subject the epa reduces the
mandate? >> i won't speculate about that. that impacts the markets. at this point in time, we see no reason for the epa to take action for the fuel standard or requirements. we're still bullish long term. no question about it, it's provide i providing customers choice and less costly gas. >> lots of debate about it? >> not much debate consumers are saving money with bioindustry and supporting nearly 45,000 jobs in the economy very important. >> reporter: quickly, we have to go, what should we expect from food price impact from higher prices? >> i would semin mall at this point in time, reality farmers only get 14 cents out of every food dollar, even if it were raised 15%, it would be small. be careful of oil prices. oil prices go up, that's where you see significant increase. >> thank you, mr. secretary.
back to you. >> thank you very much. thank you, mr. secretary as well. and heather tesh, we hear there is a little bit of rain coming and not enough to alleviate the drought conditions. >> we work this area in the regions so dry, the most is an inch or so but it won't be help to the areas and be localized. indiana is an area, you have severe drought going on. you look at the midwest in general, we find throughout this area, we've had big jump is in the past 10 days ago as we had 63% of the midwest in moderate drought just at july 10th and now at 73%. big jumps as we look to severe. an as far as what we find down
the line, we have a ridge in place, we have storms up and over the ridge and will be producing some storms, we will still overall find very hot dry conditions. we're heading into august, which tends to be a very dry month. as far as that long term output, we're not looking for much there. >> breaking news from the bond market, government auctioning off $35 billion in two year notes. we seem to do a lot of auctioning, rick santelli. they have a hunger for money, don't they? >> yes. i do hear 22 basis points? 22 basis points, sold, $35 billion investors. the market was trading .219 and .215. you have to figure 22 basis points, a tight market. we still place .10 out of that
range. $4 a bid for every two years available, my database goes to the 1980s, there's only one other for handle on a bid to cover november of last year. that's good. a little light on indirects and directs. dealers took 60% of this auction. these dealers started to buy everything in sight. the grade is b plus but that cover helped it out, an a plus plus bid to cover. sue, back to you. >> you've been doing this longer than i have. i never remember a four on that. thank you. the u.s. treasury market is hitting new record lows while spain is paying the highest yield on short term debt since the birth of the euro. it raised 3.04 billion today. and investors believe that country will need a full
sovereign bailout. right now, the 10 year yield is at 7.629% and up 19% in one month. new signs housing may finally be at a bottom, even coming back from new areas with new information from my wife's favorite website, zillow. >> reporter: that's right. zillow is calling a bottom but not so much. up barely, 0.2%, the first rise in home prices since 2007. prices have now been up on the zillow index for four straight months. nearly one-third or 463 of the markets covered showed annual increases in home values. the biggest came in phoenix where prices are up 12%. th that's important with the increased competition and low inventory we're seeing biggest
price gains. that has analysts claiming some markets are actually overshooting and creating price bubbles, strong demand in california and nevada are pushing prices up short term because they're all cash investor sales and don't have to worry about the appraisal issuinissues the rest of us do in bigger markets. atlanta, st. louis are still seeing price drops year-over-year. tyler. >> thank you. let's look at numbers for home bui builders. leading the sector year-to-date and just below 50% gain today. >> thank you. look at gentex. the numbers are below and
numbers compressing. the auto market and yield about 2.4%, down 2% today and 50% year-to-date. owners long on this stock are getting absolutely thumbed. >> thank you. another stock-up der pressure. keeping an eye on news corp.s today. shares are getting traded following arrests for the phone scandal. rebec remember b rebeckah brooks and six others were arrested and they say this is just the beginning of the investigation and more arrests expected. disappointing results in a new drug to fight alzheimer's are out. pfizer announcing the results yesterday, shares down to $23.20. sema joins us with the fallout.
>> alzheimer's is the most common cause of dementia. they disappointed the street late last night with news their alzheimer's drug failed to work in a large clinical trial and no sign it improved patient's cognition or performance in the placebo. patients in the trial had a gene that ups their risk of developing alzheimer's. is there still hope patients who do not carry this gene will show positive results in studies, expected to report shortly. earlier studies have shown there is a better chance of pfizer and j & j's drug working eventually. and ellan pharmaceuticals has a stake in the drug, down 14%. and eli lilly will announce theirs in the coming months.
i'll keep you abreast of the coming news on the alzheimer's drug. tyler, back to you. >> let's forget all the national presidential polls. the thing that matters most is where the states stand, particularly those key turn states. john harwood and the washington bureau have great reporting and research and will show us where the battleground states are, who's winning and why. next, five big names and five big moving on the dow. there, you see them. ge, am mex and dupont. walmart higher by a penny. exxon down a buck-11. with the fidelity stock screener, you can try strategies from independent experts and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments. the expert strategies feature is one more innovative reason
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just up the way, a public hearing is in new york city on michael bloomberg's plan to ban sugary drinks larger than 16 ounces. exceptions are made with anything made with more than 70% juice or half milk. saying sugary drinks are leading to health epidemic that cost the city $4 billion a year. also, a key vote on medical marijuana, set to vote for a plan that would outlaw stores selling marijuana for medical use. >> breaking news on the campaign, numbers from a brand new msnbc news "wall street journal" poll just released. john har word is at the white
house with details. interesting insights how the american electorate view leadership. >> that's right. and some wonder how president obama is doing as good as he is given the slow growth. the "wall street journal" gives some clues why that is. look at areas where president obama has the advantage, in terms of serving as commander in chief, a 10% vote edge from voters handling that issue. that's significant. romney will try to blunt that by going overseas this week and doesn't have foreign policy experience and president obama has a 16% edge looking out for the middle class. here's areas mitt romney has an edge on president obama. slight edge on changing business as usual in washington, not surprising given he is the challenger. on who has better ideas to help a struggling economy, 7% edge mitt romney, that's what you get when you have 8.2% unemployment
nationally. more on "the kudlow report." >> no president has been re-elected with an 8% unemployment rate which leads me to the question how solid is romney's advantage on the economy? >> it's solid but perhaps not as solid as you think, when you look at some swing states in particular. in most swing states, the economies are doing better than the national average. iowa and new hampshire, three full percentage points under that 8.2% nationally. that is helping president obama get a lead in those places. other states like virginia, where it's also below average, that helps him in a state traditionally republican, he did carry it last time hold on to that. in states doing worse than the national average also battle grounds, mitt romney is staying closer. michigan is a state, where because of the aid that president obama gave to the auto industry, many people thought he would carry that n. mitt romney is within two points there. he's also very close to the
president in this state of florida, which has a higher than average unemployment rate. i have to say, there is disagreement among pollsters how important local conditions are versus the national mood. one pollster told me on the democratic side independents view obama more favorably in states where they're more optimistic about the economy but a republican pollster who does our "wall street journal" polls says he's seeing no evidence people in swing states feel a lot differently in terms of expectations for the future than those in other states that aren't doing quite as well as swing states. we'll see where it plays. >> interesting number. all comes down to the swing states. today's poll question from cnbc is do you think president obama should be re-elected if unemployment stays above 8%. he'd be the first president to do that since world war ii. go to finance at yahoo!.com. >> basically telling the world
in a slowing chinese economy, they can still grow their business, it is up and having an residual. you have dang dang up 10% and o andiovoku, all in the green. >> up next, analyzing the analysts. three stocks getting attention today. see what our trader of the day thinks and why. plus three questions wall street interviewees are hearing. if you were slunk to the size of a pencil and put in a blender, how would you get out? we're not joking. [ female announcer ] want to spend less and retire with more?
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the new new york works for business. find out how it can work for yours at thenewny.com. breaking news, sometimes not in a good way. the 10 year treasury yield just hit a record low of 1.394. it is now at 1.398, as rick santelli said. people are just buying those treasuries, our 10 year at 1.4%. moving to our analyst. let agency start with piper jeffrey's down grade iinegradin. a murky situation. since may, shares have been cut in half on fossil. do you agree? >> i agree. i wish i had it back in may. >> that's your fiscal cliff?
>> now, we're below two year support level. i agree with the call. we are seeing a younger generation that was using fossil using their cell phones and no reason for a watch. >> they can't tell time, these kids, with the hands. and noting within the communications space, shares could benefit from a flight to safety as investors begin to see motorola as a safe place. >> they had four straight quarters of up surprise. that's a good thing. i will give credit to this analyst coming up the day before earnings giving an upgrade. that's unusual. how do we know governments will increase spending right now. i'm not so sure and would be cautious. >> motorola solutions. goodyear tire, from neutral to sell, noting a second derivative improvement in replacement tire
items, an upgrade from good year from goldman. >> we have lower costs for raw materials and saw they are going for soybeans to replace some oil they're using, good for the environment. i think technically around $10, not a bad place to enter. i agree with this call. >> the tuesday metal calls after the break. some wall street job interview questions that will make your head spin, like what line on your resume is the most bull -- you know what? that story ahead. accolade overdrive.
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it is, what's affecting gold, the push and pull of bearish forces and bearish forces and this weak economic data coming out of europe and the u.s., a big concern continues to weigh on all markets. on the other hand, we have seen expanding monetary policy from some banks around the globe and we don't know what the fed will do in the u.s. that is the bullish case. they're caught between these two forces not knowing what to do and we're looking at gold around this 1570 level the past two weeks. on the other hand, if you want to play the gold trade, keep your eye on gold in euro terms. gold in euro terms has performed much better than gold in dollar terms, up about 5% or so. that is a trade many are watching. in the metals come plex,
platinum, we were looking at prices on their way up. now, we're seeing a significant leg down, pal arpalladium down lowest since october 2011. >> utilities are down, transportations are down, down 81 points on the trading session. >> exactly. we're seeing all the major sectors lower. and materials down, 10% down from the 2010 highs and means they have joined the financial and tech over the last three sections today. watch industrials. at one point in trading the sector was down 9.3% from the high teetering on correction territory. in the other vein, if you're looking for yield, tobacco stocks might be the place to go because of earnings. ultra beating and lorillard and
did pretty well and both those trading near all time highs in today's session. lorillard reports tomorrow. these names, reynolds american, big dividend paying stocks, strong steady cash flow from the cigarette smokers and better than the 10 year yield. and david einorn disclosed his trade positions insignia and coventry health and dell falling on news that david has exited some of his positions. best buy, that's been a tough one for a while. >> back with us, manageing director with i c-cap. real low. >> it shows you there's concern and people are nervous. they'd rather lose money based
on inflation. all about preserving capital not what you will return on the capital for the moment. people want their money and to know it's safe. >> we have data points this week in addition to europe. we have economic statistics coming out. wh what's primary in the market's mind? seems europe is trumping the u.s. economy. >> you will see maybe individ l individuals perform well if they're good numbers. overall, the focus remains on europe and the broader economy. it's continued u.s. markets and the path of least resistance is lower. >> a lot of earnings we've seen, even if they beat, they beat on lowered earnings expectations. >> that's right. you don't want to get caught up in that. they tried to make it sound like they beat the number. much lower numbers.
if you can't get over this hurdle we have a big problem. the u.s. ma-- ups and the econo, they have slowing growth and look what it does, brings back to reality what's happening. >> does the momentum continue into the close? >> i think it does. i think we will get weaker into the close. no panicky fall out of bed but i don't see any reason why it would get stronger at all. >> thank you. >> the energy certificate is down 2 -- the energy sector is down 2%. and this company relies on fracking and nationwide mutual said they will not cover fracking with insurance because they can't price the risk. if there was no fracking and wasn't insured, there would be a negative to anyone exposed to it.
down 3 1/2%. >> a lot of sectors under pressure. bertha coombs is following it. >> hi. a little better than the overall market. cisco the drag not just on the market but nasdaq off 6%. cisco cutting 2% of its wildfire workforce announcing another 1300 layoffs. and more headwinds with vm acquiring a smaller rival. the storage space is the area with the bright spot. emc, better than expected earnings and spreading out as well. those are the upside moves here in terms of the nasdaq for the push to outside. apple this afternoon. 10:36 this is earnings per share number on the bottom. whispers on the bottom but analysts say they will be a little more cautious. we'll see about the iphone
numbers this afternoon. >> indeed we will. perfect segue. let's talk more about apple. the stock has been amazing, as you know, up almost 50% year-to-date. today a little bit of pressure, less than half a percent. $61.38 share traded an apple. john fortt, waiting on those numbers live in san jose. $601.38. >> as you know, apple looking at revenue numbers of $37 billion. as always these day, that is going to be driven by iphone and ipad sales. here's the crux. if you think apple sold more than 30 million i-phones and more than 16 million ipads, you would think we could see a blowout beat here and at&t's numbers this morning suggest the iphone could have done better than some analysts fears. sales were down 15% subseque
subsequentally. and expecting 24%. the real wild card could be the ipad. the street account has the street's consensus for ipad sales at 15.4 million units. some armchair analysts i've spoken to think it could be closer to 20 million units. get this. if the ipad does more than 18 million units in this quarter they're reporting, that's $10 billion in revenue. for those keeping score at home, $10 billion in revenue is more than apple did in the entire quarter just three years ago. kind of staggering when you think about it. >> thank you. and more earnings beyond apple. seema modi is covering bristol-myers and julia boorstin on next flict flik flix.
>> analysts are looking for revenue of $889 million, up 13% from last year on earnings per share of 5 cents dragged down by international expansion costs down from 126 a share per share last year. that was just before the company's i disastrous decisiono raise prices and split the company in two. the real focus of today's earnings report is the number of domestic subscribers in the second quarter and whether it's growing fast enough for rising content costs. it expected to add up to 8,000 more customers in qe-2 netflix says it won't expand further until it returns to profitability.8o subscribers streamed a record
billion plus hours of video in june. we'll have to see whether that increase comes from new subscribers. over to you. >> thanks. to seema modi with more on bristol-myers. >> generic competition will be the primary headwind facing bristol-myers and it peaked and it is expecting 18% drop in sales and $14 billion and 18% slump in profit growth. they have been working hard to combat competition by building its portfolio, acquire iing a company in january, inhibitex and amylin. they will be listening to their plans to replace lost plavix revenues. they're posting hopes on a blood thinner and promise iing pipeli
well-positioned to capture a share of what could be a $10 billion market. back to you. >> seema, thank you very much. sue, to you. do you think president obama should be re-elected if the unemployment rate stays above 8.2%? that was the question to our viewers. our yahoo results are up after the break. >> they were paid a lot of money to say that. why don't you have any offers yet? what's the three words that will immediately rule you out? look at the actively traded stocks on the nyse. bank of america down better than 1% and at&t and regions financials, the big loser and gainer respectively. [ male announcer ] summer is here.
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re-elected if the unemployment stays above 8%? 30% said yes, 70% said no. the good and the bad out there and a tug-of-war for your money. with euro parity for the dollar be positive or negative for american companies. we will debate that, plus swiss banker says he knows all about washington's dirty little secret and he knows it and tells it to cnbc. lots more coming up. >> thank you. >> sue, go ahead. >> thanks. >> we showed you earlier on "power lunch" how the home builders have been really soaring. it has now triggered a new land rush from coast-to-coast as homeowners jockey for position. diana olick is back with us from washington. hi again. >> reporter: that's right. hi again. with housing starts up and builders seeing big gains and
new orders, the depressed land market is suddenly cooking with gas again. there is a catch. builders need finished lots, all the infrastructures in there just missing the house and need them in prime locations. that's where piedmont are buying right now. demand for those lots will exceed supply in the second half of this year according to john burns real estate consulting. 40% of land brokers they survey ed rated it as "on fire" or "hot" in qe-1. and finished lots, prices were up in q1. now, lenora andn the most aggressive. demand is hot in texas and d.c. lennar just bought a parcel and outbid nvr for it. nvr's stock is an outlier while everyone else's stock is up.
they managed very well in the housing crash and analysts liked them because they were land light and now they need more land. >> kite ty holmes announced the acquired land in danville, california, the bay area to build 84 single family homes. in phoenix, really land strapped, you look on kb's website, it offered four communities but only three open. lenders have very little to offer from deals from owners who had defaulted on land previously. everyone looking for prime parcels and exsurbs still not doing very well. >> like everyone else, the american job interview has gone through a metamorphosis. coming up with some really odd sometimes obnoxious questions applicants at wall street firms are actually expected to answer
seriously. >> i've been talking to some head hunters. when you interview at wall street, compared to other meet and greet, it can be like a punch in the face. how many tennis balls can you fit in this room or ask you something slightly inappropriate to see how you might handle it. if i told you you could have this job right now if you let me sleep with your girlfriend, would you do it? how would you answer that question? >> you got me. i don't know how i would answer that. that's just a question i would never entertain, i guess, say, of course, not. >> the answer isn't necessarily to say, yes. you might think that's what it is. a lot of guys, particularly after the financial crisis are really interested in your integrity. just rolling over and saying, sure it is. >> just rolling over is not the phras phrase. >> you might say, go ahead and trite. i don't think she will let you. the right one is i love this
woman, i plan to marry her, if you try to touch her, i will kel kill you, that being said, i have a beautiful sister. that's how deals get made on wall street. >> other offbeat questions? >> how would you go about killing a crocodile? they don't want to know the exact answer, to know how you use weaponry, they're looking to see how your brain works? do you work through a question? do you know the absolute wrong answer to any of these questions? >> would be probably i don't know. >> that is the kiss of death. they know you don't know most of these questions, you probably don't know how to kill a crocodile or how many tennis balls fit in this room. i think it's a cool thing. >> i can read more of this on cnbc.com? >> cnbc.com. >> thank you very much. now, to brian. >> i've been thinking about this and how i would approach the one about the crocodile.
dow jones is warning the company and their vaccine unit on manufacturing problems and violations at two of their facilities. look at that chart. pretty ugly, down 2%. back to you. >> yikes. the power rundown up next on the docket. why this picture is so important to spain, to europe, leaders of the eu and in essence, to everyone. why wall street veteran john mac and samuel jackson are so mad at at&t. we do have a gainer. micron technology is up by 1%. [ male announcer ] while many automakers are just beginning to dabble
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it just says carney right there. john carney and robert frank. carney and frank. >> there we got. i dwaebate on the hill whether internet retailers should be forced to collect sales tax. walmart representative weighing in. >> these transactions, millions of them everyday are simply going without proper tax treatment. with the exponential growth of internet retailing the result to traditional retailers, not to mention critical local services, is devastating. >> john, should those internet retailers be forced to collect sales tax on every single sale? >> absolutely not. it's working the opposite everybody thinks it will. this will help big companies like amazon and hurt small businesses that ship things interstate. companies like amazon has the wherewithal to deal with the tax regimes in the small 50 states, if you're a small local
bookstore selling things across the country, you won't be able to do it. amazon gets richer. >> it will hurt the little guys more than bigger guys. >> little guys, gives them one less thing to complain about. i think it should be across the board level playing field. texas has already negotiated deals with amazon and you all get the same across the board. i think it's a good thing. apple opening a new store in barcelona, the country in sh shambl shambles and can't buy food but they can buy apples? is this an indicator how sick they are. >> the famous barcelona architect, bad idea when you match up goudi and apple. i think they should stick to their minimalist white theme and leave the gaddiness to the
spanish. >> it's crazy. europe is going into a recession. i thought that when they launched the iphone in 2008 while we were going into recession. >> if you have a product people want, people will buy it no matter how extreme they might find themselves. >> john mac and samuel l. jackson is battling at&t over who pays for a cell tower. there it is. what do you think of this one. >> you know you're in a rich building when you've been paying 40,000 dollars a year for someone else's electricity and you don't notice for six years. it's their fault for not noticing they're paying at&t's bills. they should suck it up and get a new building manager. >> i guarantee you every building in new york that has cell phone towers are checking their old bills and wondering have wee been cheated by at&t. >> on the electricity bill. >> john mac for those who don't remember was a former ceo of morgan stanley. we called at&t for a response
and here is there exclusive response. du under the terms of the lease, the owners of the build iing acquired a submeter and was required to read it and bill us for electricity used. for reasons unknown to us, they never sent us a bill until last year. we're trying to resolve their claim for electricity used but not billed before that point. maybe they will get to the bottom of it. >> i have to say, i think what robert said is exactly right. if you can pay $40,000 a year extra in electricity and never know. >> it's a rich building. >> they're also getting revenue for this tower. we never heard how much. >> they were getting paid. >> we don't know how much that is. >> thank you very much. carney and frank. su sue. >> gentlemen, coming up, did you ever want your own private island? yes. we will show you real bargains out there.
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better its position a little bit. we were down 160 points. the last time i checked, dow do down. and nasdaq is down three-quarters of a percent and russell down 1 and 1/3%. disney is positive and walmart trying to hold onto a slight gain. part of the issue is the 10 year yield on the trading session, touched a new record low. that has people down here a little worried about whether or not the bond market knows something the stock market doesn't especially as it pertains to data points in the u.s. this week as well as spain. >> finance again. we have a lot of earnings coming out today and this week. you wanted to talk about one in particular, katcaterpillar. >> i think we have to talk about whether they discounted europe enound