tv Squawk on the Street CNBC August 9, 2012 9:00am-12:00pm EDT
polls post-labor day. >> the polls? >> yes. the polls. we clearly need to get to less debt, debt sustainability. >> the polls have to favor romney? >> at a minimum, the congress needs to go. so the senate needs to flip. >> right. >> and then we're at least in a position to take on entitlements. >> join us toll. thank you to both of you. "squawk on the street" begins right now. ♪ i thought love was only true in fairy tales ♪ >> welcome to "squawk on the street." i'm carl quintanilla, david faber, all here this morning. moderate weakness setting in after four days of slowly grinding higher in what some are calling the most hated rally of the year so far. europe's also flattening out today. the euro back below 1.23. >> today's road map starts off with cisco, upgraded by not one but two firms saying the
fundamentals are trending positive. >> cpi up one-eighth. the slowest in two years. does china have more room to cut? shanghai at a three-week high. >> zinga's chief operating officer is out. can any management shake-up actually keep the company's products from just being a fad. >> and marissa meyer putting her stamp on yahoo!. we look at some of the companies she's reportedly expressed interest in big. >> we have to kick off with cisco. the shares are up by 3% in p premarket trading. it was added to the conviction buy list by goldman sachs. specifically they mentioned channel checks, i.t. survey and
they say that north american enterprises is much better than had been expected. >> looks like the tellcos, at&t, verizon going to start to spend. these calls are interesting and similar. you're doing this ahead of a quarter where you have to believe that ceo chambers is going to speak downbeat about the economy in the world. he has killed his own stock many times. the execution's good. i want to put out the cable spend is the hidel gem here. google, right, google buys a competitor in these set-top box and isn't interested in the set-top box, david. it doesn't fit into google's world. isn't that the tune for cisco to come in and take the cable companies where the spending and cash flow is fabulous. >> you're talking about motorola which google owns. they are not focused on that. there are so many changes taking place in the actual set top box that i can't say i have a specific definition as to what that business is going to look
like. >> but acquisition close and you're see a very good acquisition. go to @jim cramer. whatever it is. to twitter. it was incredible. i think this is positive for cisco. i work at cisco, doesn't matter. i work acisco. john chambers has hurt us. morale is bad at the company. >> i think morale is always bad when you're on a losing team. when you're on a winning team, suddenly the morale gets better. >> has he been inappropriately negative? >> i think he's reflective of what's going on. he has a worldwide business. >> i think it suits him to be negative, actually. it sets the bar much lower. >> true. >> that's the point goldman was pointing out in the note. the expectations are worse than what is the consensus at this point. >> right. >> they're expecting estimates to be boosted over the next couple of quarters.
so it's all about the managing expectations and are things worse than they actually are panning out to be? >> goldman analysts hit a 17% gain last time. i think it's important to recognize that the execution is good. they've laid off a lot of people. there's big leverage here if they get it right. verizon and at&t have held back spend. the cable companies have money to spend. >> when is the last time cisco was really getting it right? >> it's been -- >> how many years has it been. >> it's been a while. >> two years, i think. >> two years. >> there was a run from 17 to 24. >> two years? >> that's when -- isn't that when -- i don't want to speak and not have the facts. i believe that's when they first missed, they had a first big miss and had a couple of misses in a row. >> they've spent a lot of money buying back stock at prices that were not advantageous for shareholders. they generate cash. 12 times earnings, take a shot at it thing has not been a terrific way to make money.
when you have two analysts doing it, that's just a powerful table. >> they talk about downside protection, analyst day that are worried about margin compression are eased a bit. prior to europe being a talking point every single day, is probably when -- >> you think they're getting a wink and a nod from the company? >> he said the quarter's in the bag? that dates me. i do think this is happening. i think you can craft a story by channel he channel checks about at&t and verizon. you know juniper has lost share. that's very important. you know the motorola set top box has to be hobbled. if you're one of the big cable companies, i think you're thinking i ought to go with cisco because of the acquisition, it gives them a wider version of what you can do on cable, particularly if you're trying to do a comcast verizon
deal. >> right. >> they're partners, frenemies. >> maybe it's finally working. >> motorola bought general instrument. i don't know where that stands. >> juniper is trading higher premarket. they were talking about north american capex looking seasonal. that could help the tech sector which has seen a stealth rally. the nasdaq is up 15% year to date. tremendous gains there. >> the ceo of abnet, they have hundreds of thousands of customers. the last week two weeks of june, horrendous, july, awful. they see the whole panply. it's hard to justify. maybe there's a nearby of telco spend worldwide. >> stocks down after weaker economic china data.
it's the slowest increase since january of 2010. a slowdown from june. some investors see that data as a sign we may see more stimulus from beijing. and jim, that's -- is that a smart call, this idea they have cushion here? >> how quickly do you get e-mail saying is it going to be sunday? is it going to be sunday? sunday, sunday, dragway, i think this is one of those companies. this is a company kind of thing now, china, to think they're going to increase guidance. this is a country for heaven's sake. it's a country, not a company. >> i'd love to be on that call. it would be great. >> the communist party, can they do a conference call, do they raise numbers? it's a country. >> give us granularity on inflation. >> the party is in disarray. >> a tumultuous year in china. >> yes. >> more so than in the past with the scandal and what's going on in the communist party. i said a number of times, the people i rely on at least to try and tell me what's going on in
china say the average middle class consumer does pull back when there's uncertainty. they go back to what is typical of chinese culture which is to save. when you don't have a safety net as they don't in china, you will save. boy do they ever. getting them to spend is a difficult thing. there may have been a pullback. i don't know how they stimulate the economy more. they've been trying. >> it was seen this month would be the payoff of all the programs that had been green lighted in the past, all the rate cuts, all the rrr cuts, everything would have paid off in this quarter. we didn't see that in retail sales or cpi. we -- well, we saw it in cpi. >> industrial production. >> industrial production. we haven't seen growth in china since 2011. the beginning of 2011 despite all of this. >> they have a lot of room to cut, still. i think there's a perception in china that why bother to waste your powder until the europeans get it together? that said, there's something, a calendar issue here. the united states goes on
vacation because of labor day. europe goes on vacation. chinese, no vacation. they're in. working just like usual. there is a sense that it's business as usual in china. vacation a lot of other places. i continue to believe, the chinese, unless you get a coordinated situation in europe, listen, everybody else has to get it together before we start cutting again. >> if they're going to wait for european central bankers and the federal reserve to act before they do -- >> i think they don't like to waste their powder. they're strategic. thinking about them as a company, there is a sense that china doesn't want to just say, hey, listen, we're going to turn it around ourselves, given the fact that europe is a big importer of their product. i think in the end, they're not worried about the quarter as much as they are worried about the revolution. every time you get a little negative on china, remember, there's no elections there. okay? it's not about the election. it's about the revolution. and the revolution which certainly will not be televised. we'll never know.
the revolution will happen if they don't get -- >> and stability is what it's all about. >> stability. >> that's whether it comes to hording natural resources or keeping peace with workers migrating to the cities, what have you. >> also keeping the stock market high. that's why they cut the transaction tax. they want that stock market not to sit at multiyear lows at this point. >> they haven't done a good job on that front then. >> they only just cut the transaction tax last week. >> people are talking about how korea is starting to go up. we're seeing movement in the forces over there. i know this is hopium. where does that come from? it's like risk on risk. the shorthand we use. it gets into parlance. get me olympic terms to replace that. spike and dink. i used that last night. desperate for everything in the women's volleyball. >> talk about a nation that's stopped. i'm beginning to hear that other than if you advertise for the
olympics, nothing is happening in this country. >> everybody's watching. >> productivity is down, right? >> yes. >> there are cities in california where they're worried about the grid. >> people are watching, streaming it. they're not doing work. >> i can't put bulgaria on a map but all of a sudden i'm a fan of bulgaria. they look good. >> let's talk about zinga, the company's ceo resigning on wednesday. this after zinga reported a loss, sending shares deep in the red. it is said according to this "wall street journal" report that the ceo wants to take more control over the company. he had begun stripping the gaming responsibilities from the coo weeks prior. >> you keep thinking that it's just one big fad. i mean, ts one feels more like the great era of 2000-2001. i always said it was too early
to buy webvolcano, david. >> yes, you did. >> zinga still hasn't settled. there does seem to be -- there's a fat house aspect. it feels kind of like a food fight, delta. you know? where's belushi? is belushi there there? >> toga! >> there were hundreds of companies that went belly up. >> 340. >> that went public and then went out. we are still dealing with a very small sample size, if you will, for what we would call at least the social bubble. >> electronic arts has passed them. obviously these are two ships passing in night, one gets smaller while one gets stable. i do think you smart getting into facebook, what's the facebook relationship. how much of the business is facebook? how much the business, they bought -- draw something which had captured the nation's fancy, not unlike a popular song. it was almost like they did --
>> you're saying it's the product equivalent of "call me maybe." >> one direction. they bought a boy's band. we moved on. it's not flo-rida. it doesn't have extent basis. >> below $3 a share, does it at this point -- >> nortel was at 3 at once. >> yes, it was. >> they all go to 3 at the end. >> sprint went to 3 and 4. do you think it could be the next sprint? >> i'm not the expert. i'm asking you. >> it has been a difficult exercise. how about that? >> i'll accept that for now. >> is that what you're doing? >> no. you know what, i have stocks in my mind. i don't need to bear dunn on zinga. zinga, the gold coin! zinga! >> down 2%. down 2% this morning. >> i play last night with my daughter. i got 288 and she got a 240. it's my first round i've ever beaten her in words with friends.
i'm feeling optimistic about zinga the gaming company but not the company. >> before we go, i want to mention yahoo! the journal with the story about marissa meyers, making it clear product comes first. she's ordered the company's stock ticker removed from the internal website to get employees focused on making better web services, not just the stock price. making food free in the cafeteria, doing something google used to do, which is having upper management, including her approve hires of all kinds. good first step, jill, as far as you can tell? >> taking the price off the website, i can tell you, it's 15.16. we don't need to do that. >> it doesn't change. >> i think that the culture needs a shake-up. they need to focus a little more on the user. a facebook was totally focusing on the user. however, until we see definitive social, mobile cloud, i just don't think we have enough to be able to move the need. >> the journal reports at google
at least she was interested in buying yelp and four square which will probably raise eyebrows today. >> yelp has been a winner. they have a mobile app that's terrific. i think that mobile -- you've got to get mobile right. you've got to get mobile right. >> they're providing a service on mobile. when you're trying to sell advertising, it's a different story. >> we'll hear from a company that had a good quarter selling advertising. >> millennium. >> you can sell advertising if it enhances the user's experience in using that service. so when you are looking for a house and you have an app for a real estate agent, that enhances the experience. when you're playing a game on zinga and you get a display ad, that isn't the way. >> we all know not to click. that's radioactive, you click on an ad, it's radioactive. yelp like zillow, you see the
review, the phone number and you call. you could go to open table. there's a virtual circle for younger people who just don't even want to speak to people. this is the domino app issue. if the order comes badly, whose fault is it? yours. >> yours. >> zinga! >> we plan away on doing away with the phone entirely. >> in the end zinga may be a code, like zora! zinga! >> when we come back, one of the year's hottest ipos, millennial media out with quarterly results. the ceo will tell us about the quarter, how the company is trying to conquer the world of mobile advertising. he's live on post-nine the297 i. we're back in just a moment. you know what i love about this country?
trick question. i love everything about this country! including prilosec otc. you know one pill each morning treats your frequent heartburn so you can enjoy all this great land of ours has to offer like demolition derbies. and drive thru weddings. so if you're one of those people who gets heartburn and then treats day after day, block the acid with prilosec otc and don't get heartburn in the first place. [ male announcer ] one pill each morning. 24 hours. zero heartburn.
all those leftover hard drive towers? tweet us at cnbcsquawkst. meantime, straight ahead, cramer gives you all you need to know before the opening bell. we head to this thursday's trading session. we are looking at a lower opening for the s&p and the dow. the nasdaq looking to ease out a gain here. much more "squawk on the street," straight ahead. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com.
heart of every innovation. wow. that feels really good! and now, sleep number introduces our new memory foam series-the only memory foam beds with exclusive dual-air technology that adjusts on each side. memory foam just found its better half. sleep number. enjoy introductory savings of $500 and two free coolfit pillows! plus, a special financing offer. final days! only at the sleep number store, where queen mattresses start at just $699.
dash. a day after mcdonald's looking at some of the other results from wendy's, jack in the box. >> brenker. this is a trifecta of good numbers. wendy's is putting together a string of good numbers. the stock has been flat lined forever. i like it. brinker breaking out, jack has done this reen from trafranchis. the cadoba business not doing that great. mcdonald's not doing as well as these guys. you have to point it out. i don't think it's share take. they have momentum going. wendy's obviously someone will say maybe they're sneaking up. >> you were making this point earlier on. you mentioned cedar fare as well. >> they joined disney with terrific theme park numbers. blowout. six flags which had a monster number and yes we play for comcast universal. there's a theme park theme
that's just way too powerful. by the way, they reiterate they'll pay a $2 distribution. they could do even more. this is dorney park. many people, it's located in sandusky, ohio. they are really well run. i've had six flags on "mad money" and cedar fare on "mad money." this business of theme parks is on fire, carl, whether it's good weather -- >> there's a story in the journal this morning about roller coasters and adults wanting to ride, too. have you been on the gemini at cedar crack. >> ever since i threw up on my shoes i haven't revisited the theme parks. >> gemini's a winner. i guarantee that. >> thank you. >> monster earnings, monster beverage. >> battle ground here. a lot of people upgraded monster. this was a deceleration this mogs, goldman sachs defends. monster has a little bit of a
price line chipotle feel to it. be careful, monster. not losing share to red bull according to the data. you have to constantly beat and raise, and they did. >> one thing on macro, we have claims today, basically fair. as we get closer and closer to what we think is a decision point for the fed, does the market want good or bad data? >> i think we want bad data in china. i heard someone -- i'm going to steal this directly but it was paradox, the worst china gets, the more excited we are. i don't think we want that. we want continue momentum in housing, retail spend. dillards reports a great number. kohl's not a good number. macy's a good number. no one ever thinks dillard is back. they have tahari. they had doing some really special things.
playing ] humans. even when we cross our "t"s and dot our "i"s, we still run into problems -- mainly other humans. at liberty mutual insurance, we understand. that's why our auto policies come with accident forgiveness if you qualify, where your rates won't go up due to your first accident, and new car replacement, where if you total
your new car, we give you the money for a new one. call... to talk to an insurance expert about everything else that comes standard with our base auto policy. [ tires squeal ] and if you get into an accident and use one of our certified repair shops, your repairs are guaranteed for life. call... to switch, and you could save hundreds. liberty mutual insurance -- responsibility. what's your policy? take the privileged investing tools of wall street and make them simple, intuitive, and available to all. distill all that data. make information instinctual, visual. introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account.
welcome back to market day that has a little bit of everything. economic data both out of the u.s. and china, ipo action later on tonight, we think, with manchester united. talk about that in a bit. and the opening bell in just a moment. meantime you are watching "squawk on the street," live from the financial capital of the world. the bell in about 45 seconds time. talked about a number of names, haven't mentioned news corp. yet, david. >> we'll get more on that during the faber report. a large write-off associated with most of their australian publication assets. it is still a ways away but that's certainly coloring the action of the stock over the last month. >> stock hasn't given up a gain. >> no. maybe it's pausing. certainly realistic it could
pause here. >> as we await the opening bell, this morning at the big board, a distributor of security products, wires, fasteners, celebrating its 55th an versety, anixter. >> interesting. amc giving its second quarter report. it looked decent. amc has the hit shows "bad men," "the killing." . a lot of the conference call focused on the dispute they're having with dish. >> dish did not have a great quarter either. >> no. this group just doesn't seem to want to come in. even discovery which widely people thought was a bad quarter doesn't come in at all. i happen to think that company is a great company. because you can run those things over and over again. they're kind of like the age of walmart and costco and also frozen planet.
these things can run a lot. >> and run in all countries. >> yes. >> which is the strength of their business model. >> yes. total. i like that company very much. >> i was talking to an executive in london. i was in korea, seoul, mcdonald's was on. did you know you spoke korean? >> no. i did not. somewhere they're being translated into thai -- >> that's funny. i wonder what kind of male voice they would choose for you? a deep bass, high falsetto. >> i would prefer that wasn't the case. whatever it takes for it to run all over the world. >> jp morgan cutting shares this morning. the stock not looking like it's feeling much of an impact. they are confident about the company's prospect. this is evaluation calls. >> people love this kind of trade, melissa. that's the high end. now we're passed that point in cycle. now we have to get juiced about
the ones that aren't so hot. these are back from the dead. >> those three got an upgrade. >> they're rotating into the lesser quality names. i happen to think pulte is still a fabulous buy here. fabulous. >> why? >> they've actually run a decent company with a very big footpresent that has not kept up with the others. one of the things that's amazing about the home building business, you just don't have a lot of homes. where is that join inventory that we had? if you build them, they will come. >> e-trade financial, the company firing its ceo, richard freeburg. he says that a lot of people believe he was the impediment to selling itself. getting rid of him may clear the path to some sort of a sale. >> old friend, chairman, he did a great job at td water house.
monster good, steady hand. in the interim if there is an acquisition, he'd do fine either way. i've never worked with him for a very, very long time. they need grown-ups in they have the best grown-up working there. >> standard charter, liesman moved this story forward yesterday, talking about a rift in some of the regulators in the way new york state moved ahead. the bank may consider their own legal action for having their reputation damaged. does this change your view? because we talked earlier in the week about how it was one more negative chapter for the banks. >> london. >> london? >> look, the olympics are great. the banking not so hot. it really is the tale of two cities within london. i was actually surprised that new york state got active because that's -- we saw that with spitzer. they've got really good laws to be able to bring people down. i think people are tired of waiting, they want the individuals to be prosecuted.
they want an institution to be closed. it's almost like they want an institution to be closed and that's not going to happen. >> meanwhile, the big banks -- the story is not whether steegle will be reinstituted. let's just move on. they're too big to manage, too many issues, too many problems. you're all trading at half a book for a reason. >> the book is meaningless. >> i would still like to point that out. i haven't seen this since cal fed and glenn fed. >> print shares up another 10%. just the last couple of months. of course, jim has been bullish on this stock. >> that's a double. that is a double. >> deutsch telecom reporting good numbers. t-mobile and sprint are going to merge. all i can tell you, i don't care. you don't need a merger to get this thing cooking. sprint has the product line. sprint's well ahead on nextel. they're converting companies,
well ahead on their need to be able to upgrade and dan hesscy is to me, the single greatest ceo right now working. given the hyperbole. >> i think maybe he's the tallest ceo working. >> he's the single greatest ceo from notre dame. let's narrow it a little. >> who's above 6'4". >> one thing on a t-mobile deal, as the valuation of sprint goes up, they would use stock if that were to occur. at one point, large, as much as who knows, almost 50%, as that valuation moves up, of course, perhaps that deal becomes more likely. because they'd have to use less stock and deutsche telekom would not haves alarge a position i'm speculating. >> you hate to speculate for people at home. this is a legitimate turn.
you saw it first in the preferred. they can do giant bond offerings right now and continue -- because people want high yields so badly, david. >> they do. >> i don't think it's done. >> 52-week high here. >> when it gets over five, it becomes institutional. at&t and verizon have stalled here. people want more growth. sprint's got it. their apple relationship is fabulous. >> it was the deal the doom spread for quite some time. let's go to mary on the floor. >> reversal from yesterday's close with the nasdaq showing some slight gains, up just about a point right now. the dow and s&p slightly lower. traders continue to say the dow and s&p up four days in a row is a lack of conviction. yesterday volume was weak here at the big board. 3 billion shares on the consolidated tape that's well below the three-week average of $3.7 billion shares. the news out of china was disappointing on the production
side. that put pressure on the markets. that offset good news here in the u.s. with the trade data suggesting we could see an upward revision to second quarter gdp numbers and also the jobless claims that were better than expect. neither impacting the futures market ahead of the open in large part because you continue to have this tug of war. speaking of weak outlooks, kohl's reporting better than expected second quarter numbers. we'll see how those shares trade today. i don't want to belabor the point on the home builders. you talked about it earlier. let's move on to cooper tire. raw material costs started to decline at the end of the third quarter -- or the second quarter, will continue into the third. jp morgan filing an amended q for the first quarter saying it is looking to revive that stock buy back program in the first quarter pending director's review of that trading loss. once again, the dow is off 5. back to you.
>> thank you so much. a lot of turmoil today underneath the market. let's shift to bonds and the dollar. >> thanks, jim. boy, i tell you what, interest rates all of a sudden it seems like the day europe went on vacation things have changed a bit. maybe it's where the equities are, not so much where they are today. look at the 24-hour chart of tens. by midnight, we touched the 1.70 yield. after the data we touched a 1.70 yield. if you open this chart up to may 1st, should we close in this area, it will be the highest yield closed since the end of may. on the left side of that chart, the comps will be slow because may saw a tumble in terms of interest rates. now let's look overseas. this is really interesting. look at boone yield starting on july 1st. indeed they seem to have led the way when rates started to move up from the 1.30s to the 1.40s.
now they're much tamer, in the low 1.40s, which means if you look at the spread, premium usa has marched up close to 30 basis points. even though we don't have the chart, while this is going on, remember, spanish tens minus twos, very important. that was up at 3.24 just three days ago, three trading sessions ago. now it's at 2.81. the steepening has had its first retracement, something to pay attention to. jim, back to you. >> unbelievable. this ten-year, you have to watch it. home depot is right, it's signaling that macy's is right, retail is right. >> going to 2 in your view. >> very easily. >> i want to check out the latest moves in commodity as crude creeps close to 94. sharon epperson is at the nymex. >> energy traders are paying attention to the corn charts. they're just so phenomenal, up nearly 20% in just four weeks time.
and extending the gains today in the corn market. electronic trading ahead of that usda report that's out tomorrow. it will be a very important report. because it will be the first time we'll get the results of the actual field surveys of how bad this crop is in light of the drought that we're seeing in the midwest. we're hearing from an agency about global food prices. they soared up near 6%, still not near the peak we saw in february 2011. natural gas, it has been paring its losses. and the commodity that many consumers ra really upset about is gasoline. the retail gasoline price is now above where it was a year ago for the national average. $3.66 a gallon. sorry to say, david. back to you. >> all right. thanks very much, sharon epperson. staying in the oil well, let's talk about a deal we got this morning. robins and meyers acquired by
varco. unclear how long this thing will take. not an expectation i pick up in the early going, that there's a chance of overbid or topping bid. they have participation of the largest shareholder, that being mhm & company. this is an area, jim, i know you have focused on for quite some time. they do have at least complimentary products there saying when it comes to down hold tools, pumps and valves. >> you'll see lufkin move up, in terms of actual food chain. lufkin is the company that makes donkeys that go up and down, up and down. weatherford has lagged the group, iraq pumping 3 million barrels a day, that is weatherford. david, there is a won solization trade going on and people like
national oilwell up, heath miller does an exceptional job there. chesapeake has a lot on his plate. ge signaled that business is strong, too. i look the soup to nuts thing that robbins & myers offers national oilwell. >> the shares are up ever so slightly. there's a look at weatherford and national oilwell. it has done nothing to really juice the m & a market overall. real quickly let's move on to news corp. shares. looked like they were going to be down. they're actually now up. >> geez. >> the guidance may be lower. they say we're going to take a hit of $2.9 billion, writedown that is on publishing assets as they get ready for the split of the company. some analysts call it bad company and good company. that's not the best way to start off when you're part of publishing division. the analysts are saying bad
company and good company. there it is. 1.3 billion intangibles. they continue to be committed to buying back an enormous amount of stock. >> incredible. >> they did warn the pace will moderate during fiscal year '13 until a decision is made on how they will allocate capital within the new companies in terms of how much cash will go with one or the other. >> people like that story, david. according to rupert it worked out very well. let's not forget they took a $2.8 billion charge. that was years ago. >> what is an indefinite lived tangible? >> it's not living long enough for you to evaluate where you were. >> 1.3 billion. >> rupert may live forever. >> he has the possibility. >> his mother is still alive. >> really? >> good for her. >> i think she is.
>> exactly right. >> advertising company millennial media trading sharply higher after a better than expected second quarter. the company's president and ceo will be with us, next. and we have the early movers here on wall street. looking for a better place to put your cash? 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.
good to see you. >> i think what we're seeing is continued consumer adoption of mobile and our ability to monetize it. in this mobile monetization debate, there's a lot of talk about those who can't monetize it and who are the winners here. millennial media is a business that's been built to capitalize on this overall market trend and we're seeing growth in this market keeping pace with consumer usage. >> you decide where the ads go and who gets the ads. help u understand why so many other companies out there are having difficulty putting the ads on their site and keeping that usic in tune with their service. >> that's right. so i think we have a large sample set. if you think about this market, 56% of market is google, millennial media and apple. within those three we have a lot of visibility across in our case, 35,000 different applications where technology is
embedded. what's going to work where? so when you show the consumer an ad they like to click on, we come back and show them more of what they like to click on. and the result, really, this is across mobile. this is not very well known. the average click-through rates online are in the 0.7%. average click-through rates on mobile are 0.8 to 1% click-through rates. mobile ads are clicking through more. it's just you've got to put the right ad in the right place and very few companies have the technology. that's why you see the concentration in the top three in this market. >> facebook, mention on the call, wasn't really clear exactly whether you are friendmies, enemies, trying to do business. they're clearly not doing as well in the mobile space as you. what do you say to facebook about trying to improve their strategy? >> what i would say to facebook is good luck, welcome to the party. mobile is a big opportunity.
but, again, like all online companies, facebook's building an addition on their already built house. >> right. >> which is mobile. i think that's always a little bit difficult. and so you see some of that difficulty but all it is is strategy and execution. i think in this market what we've seen is that the big players that were always looming to come into the market had to sort of buy their way in and it will be interesting to see how facebook develops their strategy and executes their play. >> i think it's important for people at home to understand, what did i do with you guys? auntie anne's did a great result and it brought in instant results. >> we partnered with a company liked smartfly that has point of sale information around what actually happened. did they buy a pretzel and did they get a free coca-cola when they bought the pretzel because
that ad was run on millennial media. did somebody buy a pretzel and get a free coke? really figuring out how to close that loop and drive roi for advertising. >> is that something that can differentiate you over time or is that something everyone else can figure out. >> one is tracking that purchase all the way through. and second kmcomponent is where did we show the ads in the first place? the thing that's differentiated with millennial media is our understanding of consumers and things that are unique to mobile-like location and what they've done in the past on their mobile device where we've had a role in it are things that can lead us to show the ads to the right people in the first place who might go and buy a pretzel. >> paul, thanks for coming in. congratulations on the quarter. come back next time. >> sound goods. thank you. >> tom palmieri. the dow up 4 points. a lot more "squawk on the
street" still ahead. coming up, cramer has stocks to critique and he has just seconds to do it. "in 60 and he knows it." find out if he can when "squawk on the street" returns. thanks to our explorer card. then, the united club. my mother was so wrong about you. next, we get priority boarding on our flight i booked with miles. all because of the card. and me. okay, what's the plan? plan? mm-hmm. we're on vacation. this is no plan. really? [ male announcer ] the united mileageplus explorer card. the mileage card with special perks on united. get it and you're in.
wilson phillips to kick us off on this thursday morning. time for 6 in 60. foot locker. >> big gain in same-store sales. this stock should be up, not down. i like it. >> international flavors and fragran fragrances. >> jp morgan says take profits. this is an innovation in and r & d company. >> ulta salon. >> it's going to get there. >> united ren rentalrentals. >> this is domestic instruction. i like it. >> monsanto, we talked about dupont yesterday. morgan stanley.
>> unstoppable. as long as we continue to burn corn for ethanol you'll need more seed. >> american electric power. >> i had the company on. there's a public utility commission deal last night that came down. 4.3% yield, i like it. >> what's tonight? >> american electric power. [ buzzer ] >> it's a safety play. continental resources, very controversial. why is he's also romney's guy. we'll talk oil, we'll talk gas. >> you said i'd rather see backing and filling. >> we're getting a little back and fill. it's nice. >> you feel better today than yesterday. >> yes. i want to continue to be plus or minus. plus or minus means we're building something. i like that. >> see you tonight. >> thank you. >> "mad money," 6:00 and 11:00 eastern time. when we come back, kohl is in the red after sales down 3% in the second quarter. should investors expect great things from that stock?
it's something you're born with. and inspires the things you choose to do. you do what you do... because it matters. at hp we don't just believe in the power of technology. we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter.
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 welcome back to "squawk on the street." for a thursday morning, our road map for the next hour, kohl's
earning a dollar a share. nordstrom after the bell, will it be the tale of two retailers? and sanford bernstein saying the fallout from standard charter could soon become a massive liability to several top banks. >> and china's cpi up 1.8%. the slowest in two years. is that a clear sign for more easing to come? we talk to an emerging market strategist a little bit later on. let's send it over to rick santorum -- rick santelli for breaking news. >> down 0.2%. expectations with the mere image up 0.2 to 0.3. last month, ads released originally now stands unchanged. the rest of the data this morning, probably being perceived unanimously positive. especially the drop in the trade balance or a smaller trade
deficit which is leading to probably upgrades when we revisit at the end of the month to get our second look at second quarter gdp. carl, back to you. >> interesting numbers taking place there. meantime, retailer kohl's as we said, courtney reagan is here with all the details on kohl's. >> july was actually kohl's first positive monthly same-store sales comp since january. they report a dollar a share, beating the street by 4 cents. it's a 20% drop year-over-year. sales fell 2.7% and not unlike other retailers, kohl's outlook is cautious, leading it to cut its full-year earnings guidance to $4.65 a share, down from previously forecast $4.75. the beginning of the year was tough for kohl's, understocking
in-demand items and heavily discounting others to compete with macy's and other rivals. the merchandise isn't turning like analysts would like. inventory is up 13%. jp morgue's matt boss says cash is sitting at the lowest level since 2008, down to 600 million from 1.2 billion just last year. kohl's tightened expense control helped improve the bottom line for a while but sales need to start picking up soon. executives on the conference call think those back-to-school sales are moving later than in years past. forecasting the bulk will come in august and september. deutsche bank says august will be an important month for kohl's. the stock could move into the high $50 range. it's about 52 right now. melissa? >> courtney, thanks so much for that. meantime, two analysts join us to give us the lowdown on kohl's numbers. debra weinswig is on the phone
and we have paul lejeuz as well. what does this tell you in terms of who's getting market from whom? >> it's interesting when you think about the sales that penneys is delivering, neither kohl's nor macy's comps have been better. >> paul, your thoughts give than we're expecting jcpenney numbers out friday morning? what can we glean from kohl's report and macy's report as to what we can see ahead? >> i think there's no great secret that jcpenney continues to struggle from a top line perspective. i couldn't agree more that it's the off pricers that are clearly picking up the share. and in some ways it's scary to think, you know, what would be happening to kohl's, for example, if jcpenney hadn't been -- or is not in market
share donor mode. if jcpenney does start to turn things around, it could be bad news ahead for some of other department stores. >> you sound concerned about kohl's. this quarter is some sort of reflection. we saw positive same-store sales comps for the first time since january. cash levels are down to the lowest since 2008. where do we stand in terms of kohl's and what they need to do in order to build up that cash position and to keep momentum going? are you optimistic at all? >> no, not optimistic. just to be clear, the positive conflict we saw from kohl's is in the month of july. that was against the easiest same-store sales comparison of the year that they were facing. i think it remains to be seen what's to come in the third quarter but i think the issue with kohl's, they just don't really have the brands that people want. the brands that would drive
traffic. as they take on the strategy of bringing more units into the store, we don't think that's likely to solve their traffic issues. definitely not positive on kohl's. we actually think it's a risky strategy going into the back half. >> i'm kind of interested in the commentary on the call about the lumpiness of the quarter here and why back-to-school might come later than usual. is that a weather pattern? i know you've also got something called the empty pockets thesis. can you explain that? >> actually it was interesting what came through at kohl's as they talked about the opening price point being a real source of strength for them in the month of july. it was actually called out on the call that they're bringing in some higher price point items. if you look at j.lo, marc anthony and rockin' republic. kohl's called out they expect that to be more exacerbated this season.
walmart has taking mainstream significant trends in some of their back-to-school items such as school supplies, because their consumer thinks they could run out of money. we have seen this empty pocket thesis play out much more than we had even anticipated. >> all right. debra, paul, thanks for joining us. we appreciate your analysis on the phone. >> meantime, shares of electronic payment processor veriphone taking a hit. we spoke with square's ceo and twitter founder jack dorsey on this set yesterday. >> i think it's going to move faster than anyone expects. you see this transition to mobile being a device to pay. this is bringing in the world in a major way. >> our kown kelly eppons sat
down. >> i think it will stimulate a number of our existing customers, our macy's, costco, the mcdonald's of the world to work with us and do innovative things, offering mobility and ways to speed up checkout time at the point of sale. >> interesting. not sure why they were in a car during that interview. >> maybe it was a taxi. verifone does a lot of the taxi work there. >> true enough. >> i assume he's at the olympics. >> the stock got punished yesterday. >> verifone versus square is counting on the consumer to buy the product, which is very expensive. square gives them away. >> talk about disruption in the model. >> yes. >> kelly will join us later in the next hour with more of his thoughts. interesting stuff. in the meantime, the u.s.
in london. from socker to track to volleyball, there's a lot to cover. michelle caruso-cabrera here with highlights this morning. good morning, michelle. >> hey there. let's get you up to date on the medal count, carl. when it comes to gold, china is in first place, however, total medal couldn't the is still the united states. at the very top, see great britain in fourth place with the total medal couldn't the at 48. they're doing darn well considering their size for golds. look at that, 22. it was an all-u.s. final for volleyball yesterday. misty may-treanor and kerri walsh jennings beating their american competitors. u.s. continues its dominance in track and field. we have won twice the number of medals in athletics than any other country. last night, u.s. women won gold and bronze in the 200 meter. and the long jump. and in the men's 110 meter hurdle it was gold and silver as well.
see it there. that was exciting. i was very lucky to be there last night. despite all that, jamaica's usain bolt is the biggest star of all. when he walks on the field, the crowds go crazy. he ran and then he seemed to finish almost with a jog in the semifinal for the 200 meter last night. it's tonight that he's going to run in the final. it will be one of the most electric moments of the games. there you see him out front, just amazing. and of course, all the journalists wanted to talk to him afterwards. it's astounding. tonight is also a big night for the women of team usa. all eyes will be on the u.s. women's soccer team, playing japan in the final. it's a rematch of last year's world cup. where the u.s. lost in a nail biter. also tonight, u.s. women's water polo goes for gold against spain and there's a women's boxing final. this is a new sport at the olympics this year. listen to this. a 17-year-old american, clarissa
shields fighting a 33-year-old russian opponent. carl you have a story coming up about manchester united. there's a story here in the british papers about usain bolt. he wants to try out for man u. the coach says okay. we're going to wonder if that will come up on the road show at all. imagine usain bolt going on to soccer. >> how could you say no. my favorite tweet was from albert brooks, saying i could be competitive against bolt in my car. that would be the only way. >> that's true. >> you were right. it looks like he's barely breaking a sweat. >> yes. >> no, no, he clearly slows up at the end every single time. there's talk he wants to save it up and wow everybody tonight in the final aand maybe break a world record. >> wow. fascinating. good luck to women's soccer, too. it would be great to see them get redemption against japan. we'll talk to you later, michelle. >> see you later. coming up next, the sports team considered by some to be worth more than the yankees or
the dallas cowboys, 650 million fans worldwide. trying to gain fans on wall street. we're talking, of course, manchester united. it is going public. we have the details right after this. first, take a look at the leaderboard for the pga championship taking place today in south carolina. [ female announcer ] e-trade was founded on the simple belief
that bringing you better technology helps make you a better investor. with our revolutionary e-trade 360 dashboard you see exactly where your money is and what it's doing live. our e-trade pro platform offers powerful functionality that's still so usable you'll actually use it. and our mobile apps are the ultimate in wherever whenever investing. no matter what kind of investor you are, you'll find the technology to help you become a better one at e-trade.
to brian sullivan for a quick market flash. >> we don't often see companies that have sales growth of 28% being called a disappointment. that's the case with monster worldwide -- monster beverage, excuse me. they missed a consensus by 2 cents a share. they suggest sales growth may have slee slowed to the midteen level in june before re-accelerating in july. monster beverage down just under
7%. back to you. >> thanks, brian sullivan for that. manchester united is going public this week. it could be twice as valuable as any other sports franchise out there. now what we can expect from this football company. >> we're hearing we might get pricing information a little earlier, whether it's because man u. is based in the uk or it's a global investment tune opportunity. the road show in new york i'm told was at capacity earlier in the week. maybe americans are warming up to investing in international football more than expected. if some of the recent positive energy proves true here and demaped is there, it would be good news for an ipo that's met a fair amount of skepticism. here's the plan, offer 16.7 million shares at $16 to $20. the high end would raise 333 million and value the team at well over $3 billion. the road show lists paying down some of the 680 million in debt
as the primary use of the proceeds. although it's been widely reported the family of owner malcolm glazer plans to take half for themselves. the dual class share structure will allow the glazers to retain total yol. of the loophole, man u. is listed as a growth company here in the u.s. the club justifies that by saying it's only just begun to monetize it's purported 659 million fans across the world. it's trumpeting that huge sponsorship deal from gm which will pay it more than 550 million through 20 21. 20 bucs a share would be eight times revenue, a similar number to what magic johnson's group paid for the l.a. dodgers. many people thought they overpaid. trading tomorrow, it all goes well, sentiment all over the map. one hedge fund manager told me he'd wait to see how this one trades rather than jump in early. despite a lot of the red flags, there's been no shortage of
investors looking at this deal. it will hinge as it's been all week on price call. back to you. >> interesting. we'll see if they can still crack the american market in a big way. by that i mean the sport. hasn't quite happened yet. thanks, brian. meantime, the standard charter story has exploded into an international incident. new york state's banking regehrs are under fire from the feds for going rogue in its investigation of money laundering. now british politicians are incensed at new york's action. steve liesman joins us with the salacious details. i think that's fair. >> yes. the decision to move ahead with charges against standard chartere has prompted sharp comments from regeulators and politicians in britain. you can't help wondering whether all this beating up of british banks and bankers is starting to shade into protectionism and you
can't help thinking it might actually be at least partly motivated by jealousy of london's financial sector, a simple desire to knock a rival centre. others saying, this is a clear political agenda to shift financial markets from london to new york. even the normally reserved governor of the bank of england, mervyn king noted that it was significantly different from other cases against british banks which are coordinated with all american agencies and even with the brits. he noted lawsky went forward alone. he called for standard to appear on august 15th to explain why its new york banking license should not be revoked. he issued a statement overnight saying this is a case about iran, money dalaundering and national security. we continue to work closery with
law enforcement partners, both federal and state in this effort. the financial times overnight reporting there was supposed to be a meeting today with standard chartered and the new york banking regehr. we have not been able to confirm whether or not that meeting was going to go on today, carl. >> interesting story. steve, to switch topics briefly, i assume you've seen some of the reports out of dow jones that labor released the claims number at least five minutes early today. we saw limited impact on things like dollar yen. but dangerous. >> i have to admit, i've been in a meeting this morning and did not -- i did notice that the futures seem to pop ahead of the number. i thought it was earlier, maybe there was european news or something like that. i wonder if that was the reason you had earlier futures action. i'll be calling the bls on this shortly to find out what the story is, carl. >> finally, i thought of you this morning when i heard it was the anniversary of jerry garcia's death.
>> i've been marking it for six days, carl. his berth day was friday night, played out there. of course remember i was in siberia in the back of a van when i heard over the bbc shortwave that garcia had died. >> he lives on, steve. >> his music is all over the place, carl. >> talk to you later. >> thanks. >> steve liesman. straight ahead, how the scandal at standard chartered could be a big liability for the banks here in the u.s. we'll discuss that, right after this. ight. use your computer, your smartphone, your tablet, whatever. the point is, you have options. oh, how convenient. hey. crab cakes, what are you looking at? geico. fifteen minutes could save you fifteen percent or more on car insurance.
it's something you're born with. and inspires the things you choose to do. you do what you do... because it matters. at hp we don't just believe in the power of technology. we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter.
almost an hour into trading. want to head to chicago for more on the market's latest moves. allen, good morning to you. >> good morning. >> seeing a fair degree of chop in equities. there's nothing choppy about bonds right now. what is going on with the ten-year auction yesterday and does it set up more action in the 30 today? >> the 30's the big story. i could use the word stimulus. this could have a real impact on the equities market. all of this safety money is unwinding and flowing outthe bond market. that has to go somewhere. looking forward to go back into equities and other assets. i think that can be supporte of. the big story as we traded between 150 and 148 for the whole month of june, now we've broken the 148 level.
it's look out below. 136 is the near-term target. a bottom may be in as far as interest rates go. >> a lot of people still looking for something closer to 1% from the end of the year. do you think that's anywhere near a possibility? >> this runup that we've seen in treasuries and in the dollar has been just mainly because of looking for safety. so the reality is that people are going to be chasing better yields. i'm loaninging for that money to unwind and come out. the dollar's not sustainable at these levels. we're at the highest level since the beginning of 2010 and fundamental situation has not improved significantly obviously. so i think it's going to be a chase for yield and they'll be looking for better returns and this is just a great indicator of that, the stocks are quiet today. stocks in big picture have traded between 12.50 and 13.50 for the whole year of 2011. that was a 100 point range that targets 1450. i'm look looking for positive
things to happen as all this nervousness gets pushed aside. >> yes. we'll talk some nat gas in a moment with sharon. we have to keep an eye on crude. gasoline prices higher than a year ago. it's been a while since we've been able to say that. >> right. that's also a sign the global market can afford the high prices. commodities are what people are willing to pay. we move forward and higher crude prices and higher gas prices and interest rates are all positive signs that we can afford to pay more that things are getting better, not worse. >> all right. thank you so much, allen. talk to you later. >> thanks very much, carl. >> some time to fill before we get the nat gas inventories. >> that will be a market mover at this point. in terms of what is of monthing in the markets. mixed bag in terms of financials. cisco gains still persist, still
up 2.5%. piper as well as goldman sachs, adding it to the cbl buy list. >> a lot of what is haing today is on the tails of cisco, third best on the s&p, got to be number one on the nas 100 at least. >> this confirms what it has done recently in terms the price action on cisco. also we're seeing the impact on other networking stocks, juniper for one is up by almost 2%. river bed is higher by more than 1% as well. there were some notions in the goldman sachs report that perhaps the second half of the year will look better seasonably in terms of capex. that will lift all votes, theoretically. we are seeing that in the session. >> they think the company may still talk negatively about macro which they have for several quarters but that maybe worries about margin compression may be alleviated they're not saying don't expect the company to talk glowingly about the global economy. >> it's just the expectations
have been ratcheted so low, goldman is higher than the street in terms of estimates for the next two quarters. we do want to check in with sharon epperson. >> at any momenting with natural gas. we're waiting to are that. the price is around 2.93 a gallon. flat on session. we are anticipating an injection of 27 and 31 billion cubic feet. in fact that injection is less than analysts estimate. it's only 24 billion cubic feet. so that has created a rally here in the natural gas market, immediately up about 7 cents or so, above the $3 level here for natural gas. and keep in mind that we are continuing to see those storage levels that are well above a year ago or the five-year average and some, including citi futures analyst say we may see an all-time high. we are looking at a storage level and increase that is less than analysts anticipated. that is why natural gas futures
are rallying and we're continuing higher, 3.02 as we speak. 9 cents gain just on this number. back to you. >> sharon epperson, thanks for that. the fall outfrom standard chartered alleged transactions with iran could become a liability. brad hinds joins us now to reelaborate. it seems there are a lot of ifs. standard chartered would have to be found guilty and custody banks would have to be founded to have some sort of role knowingly in these transactions. >> actually that's not the argument. >> okay. >> it's not the argument of a litigation issue. it's the argument of these custody banks rely heavily on standard chartered in asia and africa. these guys are very, very powerful in terms of the interbank activities of asia and africa. the custodial banks don't actually dotbiz themselves.
what they do is they rely on local banks to do the activity. so standard charter with its reputation in tatters, if it loses its license, it can't do the activity. if it gets a large fine, what you're going to see is the custodial banks looking around very rapidly to move their business away from standard chartered. their clients are fiduciaries. >> there's the issue in terms of doing business with standard chartered. there's the reputational issues in the potential liability that they might face themselves. >> yes, that's a more difficult situation to argue that they knew that this was going on. certainly you're going to get some ancillary suits on it but i would not make that an investment thesis. the investment thesis would be standard chartered has a binary
outcome. it pays a large fine or it's fundamentally out of the u.s. dollar market. that's where trade processing is. this really damage damages the bank. that's the underperformer for standard chartered. for a state street, a northern trust, a bank of new york melon, the issue is a operational issue. they'll have to pull away from one of the banks that provides them a plumbing in asia and africa. now will they be able to do it? yes. but there's going to be a period of uncertainty that will go on here for once we find out what happens to standard chartered. angry clients having to rebuild their business, it's not an end of the world problem. there are other banks that can do it. they just can't do it quickly. you'll have a disruption aspect, incremental costs, that sort of thing. >> what do you make of some of the off-the-record wrangling
among regeul regulators? >> that's tough to talk about. i'd like to dodge the regulatory issues. the piece that new york state came out with was fascinating reading and certainly -- >> in a fiction reading kind of way? >> no. >> or nonfiction? >> it does a pretty good job on standard chartered in terms of what they were doing behind the scenes. >> all right. getting back to the idea that these custody banks could pull away from standard charter, who would benefit? where would the business go? >> absolutely. the winners on this one would be hong kong shanghai, deutsche bank citi. these are large institutions. eventually you'll see a market share shift. will this be enough to move their earnings? probably not. there is one bank which trades in south africa, called the standard bank. by the way, it's not related to standard chartered. it's totally independent. this bank, though, has a huge
franchise in africa. and so a movement away from one of these handful of banks with local activities to standard actually could move the needle for them. >> so the bottom line on an hsbc, citi or deutsche bank, if this shift does happen, that's not necessarily a reason to invest. >> no. no. it's a positive thing. it actually gives you in the case of a citi, let's recognize, in this is a global bank with strong activities around the world. it's just another tip of the hat to citi's global franchise. that franchise has value and this is an example of it. >> brad, good to speak to you. thanks for your time. china out with inflation and industrial production data this morning. as the cpi comes in 1.8% higher, does china now have more room to ease? we talk to an emerging market strategy, coming up, next.
at sleep number, individualizing your sleep is at the heart of every innovation. wow. that feels really good! and now, sleep number introduces our new memory foam series-the only memory foam beds with exclusive dual-air technology that adjusts on each side. memory foam just found its better half. sleep number. enjoy introductory savings of $500 and two free coolfit pillows! plus, a special financing offer. final days! only at the sleep number store, where queen mattresses start at just $699.
and the first trade route to the west. we built the tallest skyscrapers, the greatest empires. we pushed the country forward. then, some said, we lost our edge. we couldn't match the pace of the new business world. well today, there's a new new york state. one that's working to attract businesses and create jobs. build energy highways and high-tech centers. nurture start-ups and small businesses. reduce tax burdens and provide the lowest middle class tax rate in 58 years. once again, new york state is a place where innovation meets determination and where businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com.
china's consumer price rising 1.8% from a year ago. industrial production also slowing for the third consecutive month. will this trigger more easing from china? joining us on the news line from hong kong, adrian mowat, asian and emerging markets strategist from jp morgan. retail sales missed estimates. at this point, adrian, there has been a lot of stimulus pumped into the chinese economy through rate cuts, through rrr cuts, stimulus investments and infrastructure and so on. should we have seen better numbers? put this into context for us who might be concerned about a slowdown in china. >> you know, i agree, we
probably should be seeing better numbers by now, because we started to see the stimulus from the beginning of this year. but you know, in saying that, there's normally some sort of lag with monetary policy and the two cuts in interest rates was 7 for june and 7 for july. the story here is still one of a sluggish economy, particularly relative to china's history and one in which we haven't seen the signs of the stimulus working through. it's worth highlighting that a number of data points are now significantly negative. you look at residential construction starts. just looking at the three-month moving average, they're down about 19% overlast year. so there's also signs of weakness to come in that if you're not starting construction, if construction is down in terms of start, that will have an effect on the economy over the next two years. >> in terms of the expectations
for stimulus, of course, from the american investing standpoint, that's all the talk. they want to read these numbers and decide what the china central bank might or might not do, given that you think the stimulus impact has not fully been seen yet, will the pboc remain on the salines? >> we expect further action from the pvoc in terms of interest rate and reverberation cut. what you referred to in the opening segment gives them a bit of more rewlee way to put in pl more fiscal policy. >> to what degree is the government there waiting to see the rest of central banks around the world, europe, even the united states, get their own act together so that whatever policy they put into place isn't just like shooting into the dark, right? u don't want to waste your bullets, that kind of thing. >> look, i don't think the
chinese authorities are really looking to the rest of the world but they are concerned about their own economy and they will provide policy for that economy regardless of whether they believe that policymakers have been successful elsewhere in the world. it's important to highlight the weakness in chinese economy is very much the domestic story. if you look at contributions to gdp, it's a small number these days. >> given they're not waiting for any other central banks in the world to act, when do you expect that action to happen? >> okay. we have further cuts in interest rates and reserve ratios this quarter. pretty imminent in the next six to eight weeks. but let's -- you know, it's also a story of this economy has slowed down but the retail sales number 13% year-over-year, the car sales data was plus 16%. so it's not as if this economy
is flat on its back. but there are, within the economy, there's clear signs of weakness. >> in the next six to eight weeks, adrian, interest rate cut and an rrr cut? what are we talking about? >> that's correct. cash reserve ratio cut as well as an interest rate cut is very likely. i think that's what the market is expecting as well. >> all right. adrian, we'll leave it there. thanks for your time. we appreciate it. adrian mowat of jp morgan. >> let's send it over to brian sullivan. >> sun power is getting walloped here, getting its forecast, now sees a loss of a nickel to as much as a 20 cents a share consensus on the street was for a profit of 1 penny. spwr getting whack. we know the continued problems with the solar power industry, first solar and others are taking a hit on sympathy. yet another forecast cut from another solar company. back to you. >> all right.
brian, thanks for that. another multibillion dollar loss from the postal service. we have details from washington. >> as a matter of fact, the postal service lost $5.2 billion for its third quarter that ended at the enof june. it's 68% larger than a year ago when it was 3.1 billion. the postal service saying the decline in first class mail volume and its being unable to keep up with obligations to retirees on track now, the postal service is scheduled to run out of cash before the end of the fiscal year next month. it's planning to default on $5.6 billion payment into the retiree health care payment. that's due at the end of september and the agency has defaulted 5.5 billion in a prefunding payment due earlier this month. so the bottom line, the red ink for the u.s. postal service keeps getting worse. back to you. >> that is a tough story to watch. thanks a lot, hampton pearson in washington.
still to come, starbucks big mobile teamup with square, taking mobile payments to the mainstre mainstream. who are the winners and losing from this revolution? that story after the break. trad. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade.
auto theft is a never-ending came of cat and mouse. as the criminals get even more sophisticated so does the technology with which to defeat them. we hit the road to find out how onstar is putting the brakes on car thieves, literally. >> reporter: when conditions are cleared, the vehicle's slow down system is enabled. >> the slow down signal has been set. >> onstar confirmed that the slow down signal has been sent. it's generally going to take, again, five to ten seconds or thereabouts. >> whoa. >> and we're being slowed. >> what's happening, carl? >> we went from 30 miles an hour to 0. just like that. and i have my foot on the gas and the car has been disabled.
>> i guess at this point i have to put my hands on the wheel. >> be sure to catch the premiere of "crime inc.: grand theft auto." that's tonight, right after the olympics. with the advent of satellite technology, the police and onstar candice able a car, once they confirm it's beentolen remotely so they can bring it to a standstill and basically strand the thief in time for the cops to come and get them. >> what an amazing technology. imagine if that technology can get applied to other things, disabling a phone. >> or a semi for walmart. >> when your car is stolen, the chance is it ends up in eastern europe. we'll cover a lot of it tonight as the new season of "crime inc." continues. tweet time.
new research, the desktop may be coming closer to its death bed. tell best use for hard drive towers. tweet us. we have your answers coming up. choose to do. you do what you do... because it matters. at hp we don't just believe in the power of technology. we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter.
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 serious investors are choosing fidelity. now get 200 free trades when you open an account.
amazon is under fire after a package mix-up. seth thought he was getting a 39-inch tv, but when he opened the package he found a tactical military style semi-automatic rifle instead. >> it was about 10 or 15 minutes i was alone with the thing. they came in and saw it, and we were all talking about what to do. you know, once we found some information that led us to believe it was an illegal weapon in the district, we called the police. >> that's a problem. >> you think? the worst part is that he was in his apartment getting ready for a party apparently. he heard a knock on the door. by the time he got to the door, the delivery person went away and left the package at the door without signing.
>> it would be funnier if the news of late had not been more tragic. >> the timing is tragic. >> not good for amazon. "squawk" on the tweet this morning. you might have heard a new research deal from barclays finding that the rise of tablet computer is cannibalizing pc sales over the long term. we ask you as tablets push as those pcs closer to deathbed, what's the best use for leftover hard drive towers, the kind you might still have in your house? george writes a great boat anchor. put nem in a museum along with blackberry and nokia. john writes, book ends. we don't need those either. they're on the tablet as well. how much the tablet has changed our lives. >> one of the tweets said nokia and rim is up by more than 4%. so that's an interesting move that is worth watching
throughout the session. in the meantime big problems in california with cities going bankrupt. jane wells in live in l.a. with more on this. jane. >> reporter: i'm still thinking about that amazon story. imagine you're the guy na ordered the weapon and got a tv instead. it's gotten so bad out here, guys, that the republic nominee for president or the presumed nominee is making fun of us. listen to this. >> if entrepreneurs and business people around the world and here at home think that at some point america's going to become like greece or like spain or italy or like california -- i'm just kidding about that one. if they think -- in some ways. >> reporter: you know, i've been saying that california's restructuring information one city at a time. here's the latest list. stockton went into bankruptcy and an bern dino and mammoth lakes are trying to. the big thing in a lot of cities right now is they declare fiscal
emergencies they use as a way to raise taxes to try to get out of their problems. there's a half dozen up near san francisco. there's hercules and fairfield up there it. down south you have stanton, cu culver city. it's in a fiscal emergency and same with ail montt tee. they're trying to do a soda tax. they're saying, look, now that the state is taking back all the redevelopment money we thought we were going to have, we're having an emergency. long term can they do what san jose has done, which is to try and cut benefits not just for future retirees but for current retirees right now. it's a huge problem, but it's being worked through city by city. the real question is, how much of a domino effect is it? i was talking to somebody about l.a. could this happen in l.a.? l.a. has sush cash flow and this bond specialist said, so?
that's what we're thinking about out here right now? >> jane, despite the bankruptcies in the state of california, what has gone on with the bonds? for some time the bonds seemed to be unaaffected by other bankruptcies out there. >> it depending on which bonds you're looking at. if you look the at revenue bonds, it can be a problem. again, under the california constitution, california's general obligation bonding are second in line behind education and getting paid. there is clearly enough cash flow for that. at some point are there enough pressures all over the state that bondholders now are forred to pay a price for this? that would be really bad. that would really -- that would be our fiscal cliff. >> yeah, it would be. you showed a clip of the governor basically poking fun at california, and he said just joking. the audience seemed to laugh. how did it go over?
>> california hasn't gone republican for a couple of decades. i think ronald reagan was the last. romney comes here to raise money, but i don't think ecounting on enough votes here to make a difference. in the meantime, we're so desperate i'm trying to do my part. i've actually written an open letter to larry allison on the blog funny business.cnbc.com. he's now bought this hawaiian island. he's the richest guy in california. if he decided to retire to hawaii, we're in bad shape. he's worth $36 billion. the governor here wants us to raise taxes on people like him so he had to pay 13.3% state taxes, which would be the highest in the land. >> oh, my gosh. >> a guy like larry, we have 96 billionaires in california. one leave and that's it for the highway system. >> your letter is what, please don't go? we need you? >> please don't go. don't say aloha to the golden
state, larry ellison. we need you. we can get rid of a lot of other people, but not you. i heart larry. i heart larry. >> i bet you do. >> have you gotten a response? >> no. strangely enough, no. >> i had to close that loop. >> that is a good one. if he does respond, though, you have to let us know. jane has a crush on larry ellison. dow continues -- it's 16 points. if the grind continues by the way, if today is higher, that's five straight days higher. we haven't done it since march. >> since march? >> the five days ended march 15. >> look at the s&p 500, 1405. so we'll see if we can hold on. >> the new pain trade as they call it, s&p 1475 and the t ten-year at 2%. not a lot well-positioned for that one. >> have a good afternoon. see you tomorrow. >> here's what you might have
missed earlier on this morning. >> welcome to our three of "squawk on the street." here's what's happening so far. >> the banking system we have in place certainly in europe got way, way outsized relative to both the economies it was serving and most importantly the deposit base that it had access to. >> a lot of things washington does is extremely from us traiting, but i think more and more as people see the truth and not just one side of it, they realize something can be done. >> as we move from 367, which is slightly revised from originally 365 last week, we move down 6,000 to 361,000. >> has he been inappropriately negative on the macro chambers over the past few quarters? >> i think he's reflective of what's going on. he has a worldwide person. if we saw american turn and telco spend, that would be
rather dramatic. i have a 288 and she got a 240 with my daughter. it's the first round that i beat her in words with friends, so i feel very optimistic about zinga, the gaming company, but not the company. >> mobile apps are clicking through more. it's just you've got to put the right ad in the right place, sxre few companies have the technology. that's why you see the concentration in the top three in this market. >> good thursday morning. we're live at the new york stock exchange. we want to get a check on the markets ch markets. if the dow closes up today, that hasn't happened since march. they better margins and cost controls give earnings an upside boost. he they add to cisco's name after adding the names to the conviction stylist. e share trades jumping over 90%
after they announced the appointment of frank petrelli. another big hour on "squawk on the street" about to hit. here's the road map. zyn zyn zynga's coo is leaving. how many more challenges can zynga face? shares of veriphone taking it on the chin yesterday as starbucks chose square. what does he have to say about the deal. bark clays is out with bad news for the pc market. they say tablgt and smartphone sales were cannibalize pcs and we'll talkanalyst in a moment. first nat gas. >> big move, and thursdays have been big days for natural gas for several weeks.
we're looking aaa report bullish. we saud an injection storage that was smaller than what analysts had forecast. many think we see a return to the cold fire generation plants helping to eat away. not enough. not enough. we're looking at natural gas storage levels that are still seeing an injection less than we had afive-year average. prices jumped 20 cents since 10:30 when this number came out. the higher the session $3.12. we see big gains in the natural gas futures market. back to you. >> naets interesting. thanks a lot. >> want to get to the cme group as well. rick santelli is at the exchange watching bonds and a number of other things. good morning, rick. >> it seems we went from a record low yield of 138 all the way up to the current yield of 170. if you see that chart, you know, if you're a technician, this is
an interesting one. take your fundamentals all of the marketplace a minute and look at what i call a graphic prediction of the aggregate behavior that moving markets. that's why charts work. you can call it a verse head and shoulders and double bottom and anything you want. one thing that fits pattern you look at the bottom half of the chart is a reversal pattern. now let's dig into this. one area of trading that rarely gets enough credit is just the logistics of positions. we talk about fundamentals and look at charts. i'll tell you what i mean. let's be honest here. interest rates on those lucky countries, whether their economies are that much better, the perception on the relative value basis is they are. you talk about boones, guilds, some of the paper in switzerland, the u.s. the point is, when it's aa one-way market for so long, you may have an unintended logistic consequence to the marketplace.
let's say there's safe harbor buying that m and a from european-type investors. maybe they're gone on vacation. it is the month of august. so as this rate creeps up, and we saw an indication of this in a messy ten-year note auction yesterday. as we start to climb, maybe you still believe we test 1%. maybe you believe there's bigger fires in europe or defaults and the flight to safe has shocks and equity koos have shocks down and come back. so it makes traders nervous. the unintended consequences at some yield whether it's 175 and 2%, all of a sudden the logis c logistics of position switch around. this feeds on itself, and that's a big deal. last we want to talk about corn, and this is a biggy, okay? tomorrow is a huge report, the august report. let's look at an area na gives awe great clue to simplify the effects of corn prices will be. in june it's 166, and in july it
went down to 146. you know what the whisper number is now? 120 bushels an acre. i think that's aggressive, but pay close attention to that. real quickly, you know, we talk about ethanol, the mandate. i have, too, but i want to be fair about this. everybody throws around 40% of the corn crop is used to make ethanol. not true. it actually is a smidge under 30%, around 28%. why? there's dried distiller grains that are a by-product of making ethanol go back into the feed. back to you. >> it's tossed around a lot, rick, and it's good to put it in context. thanks for that. rick santelli. >> a market flash regarding private equity, right? >> trust company of the west, tcw, we have guests on from the group on the program going to be bought by the carlisle group from societe generale.
we don't know price and et cetera. it will change in control there at tcw. general motors, gm revealed that the ceo bought 25,000 shares at an average of $20.35. ackerson expressing optimism on gm. i loved the piece on the stolen car thing, carl. with this move gm is actually positive for the year. >> you love all things cars, brian. you're an auto racer yourself. >> i like to race cars, boats, planes, railroads, anything. >> you have the need for speed. >> slits. that's why i work her. the ceo is leaving after a year and a half on the job. zing ga shares continue to
slide. is the bottom near? michael is up an annist. says you have a buy on the stock, michael. is that still true today? >> yes. loired my target from 17 to 7. i was wrong. i thought they were growing much faster. the truth is that at today's price they are enterprise value is about half their sales level. they make money. so they're an internet company making money, still growing and trading at .5 times sales. that's pretty cheap even if there's disruption at the executive suite. >> let's talk about the disruption. how important is shap "discovery" . >> i'm not sure what cramer means by frat house. i apologize. i never belonged to a frat. look, schappert is a decent guy and experienced public company executive. he has 14 years as a vp or
higher at public companies. pincus has never led a company. the ceo was an investment banker and never worked for a public company. they need adult supervision. maybe the inmates are in charge of the asim lus. we were encouraged when schappert was hired. he was bringing in experienced veterans, and now that veteran is gone and i'm not sure who fills that void. >> yeah. i mean, i don't want to put these all in the stam camp, but we saw echoes of this with google. they brought in smith and we saw group on to members of the boar including amex. >> you look at facebook, and they have two really experienced people, the coo and cfo.
you don't have that at zing ga. i think they're capable. sfarz competing with ea and disney, i think schappert added a lot. >> i was going to say, amazon, too. we'll see how committed they are to the space, but that's probably not a net positive, right? >> right. >> your price target is 7. to what degree do you need to see monthly metrics turn around? >> they've turned dramatically, and app data says there might be errors in facebook reporting. zynga is at an haul-time for monthly active users and went up 30% in the last six or seven weeks. the metrics are improving really in a big way.
i think that will translate through to this quarter's results, and i think that zynga is probably a bit overly conserve i have in the forward guidance because they were shell-shocked by the slowdown in revenue growth. ij they're fine and you get paid soon. this is an investable stock at 3 bucks and above $4 soon. >> finally, they had their recent event in which they unveil nude games. we know that's a crap shoot. you swing a lot of times and hit a few times. were you disappointed in the pipeline from the game standpoint or not? >> i wasn't at all. maybe the difference between me and the other people in the room is i actually play these games. bubble safari is great. ruby blast is great. the ville is kicking butt, obviously enough to that ea filed a lawsuit against zynga claiming they infringed the copyright on the sims social. the games are similar.
i think everybody knows the difference, but i understand ea has to protect its valuable ip. these games are working. the problem with zynga is the legacy games, citiville and farmville have declining more rapidly than zynga expected. they thought the new stuff would provide growth. the new stuff is it offsetting the decline in the old stuff. it's not a real long-term problem. they have to bring out new games. >> sticking with the stubborn buy, michael. appreciate you coming to the phone. talk to you next time. >> thanks, carl. >> in the meantime shares of veriphone falling the most yesterday after the deal with with starbucks saying it will it use square in over 7,000 stores. what does the ver phone ceo have to say? we'll hear from him right after the break. the greatest empires.
then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade.
stake in etrade. he's part of the search committee and they're speculating that the company may be more possibly moving closer to possible sales, getting things together so they can be sold. they did engage goldman a while back to look at strategic alternativ alternatives, but nothing came of that. this is a positive move that they signal they get back to their retail business, which is something that fryberg having come from t.d. waterhouse shifted aaway. not a long tenure there, carl. only there since 2010. >> interesting. people keep waiting for the call sa consolidation in that industry. we'll see if it happens. thanks, better at that. mobile payment compete is heating up. shares of verifone falling after starbucks announced it's partnering with their rival square. kelly evans is in london with the impact verifone is having there. good morning, kelly. >> good morning.
good afternoon from over here. i sat down with verifone ceo doug bergeron, and one of the 5,000 london taxis outfitted with verifone payment system. he likened square in terms of valuation to the website pets.com. so in a lot of yesterday's starbucks deal, i asked him if he still feels that way. >> payments is an exciting place right now. we just signed a deal with the city of new york where you can use your phone to check where the buses are and to pay using your phone on a bus. mobility payments, very exciting and in some places frothy. a lot of venture capital money is thrown thrown into things. time will tell. companies like verifone who are both innovative and are willing to change and adapt do very well. >> do you have a way of matching the square prushoduct, what it offers anytime? >> we have a number of
phenomenal mobility products. our salepay.com strategy verifone is partnering with a bunch of companies to allow phones to be used as ways to pay and ways to accept payment. our retail customers, who were 70% of the u.s. retail environment, are looking for us to augment what they're doing at checkout, with in-store clienteling so they can check you out and sell you something from their online warehouse while you're in the store. these are exciting times for payment for sure. >> what would say to investors selling shares yesterday down 12%? what's your response to them? >> take a longview. verifone is a very innoefb business. we've grown from 300 million 11 years ago when i bought the business to over 1.9 billion today. we're very profitable. we have a lot of staying power. we generate a lot of cash, and we're morphing ourselves into the new world of payment and we're in a great position to do
that. >> is an acquisition of square next? >> no, absolutely not. >> well, while some analysts think of verifone as aa hardware company, the company is actually becoming a bigger player in the advertising space, carl. as anyone who has seen taxi tv in new york city will surely recognize. verifone signed a deal valued up wards of $35 million to install systems in cabs in washington, d.c. it's expanding globally in cities like munich and warsaw. we'll have plenty more from that interview with doug later on "street signs." >> we discussed why it was done in a london cab, but i assume it has something food with where their products end up being placed, right? >> that's right. so if you look at a london cab now, whereas i've been over here a couple of months, it's hard to find cabs that have credit card systems, at least it was. verifone is coming in and striking deals with the cab companies and individual proprietors to install the system. they have agreed to up to 9,000
cabs with the 22 thousand now in london. 5,000 are installed and more are on the way. for those of you in london using a corporate card, for example, it's soon going to be easier to charge that ride. >> very interesting. we still don't know what kind of adoption rates var phone will have and what kind of starbucks and square will have. a lot of story is written next year when we get the square items in starbucks. good stuff, kelly. thanks so much. >> thanks. >> kelly evans in london. we just heard from the var phone ceo, and we'll pick apart the winners and losers between starbucks and square as they look to bring mobile to the forefront. will it change our lives? we'll talk about that in a minute. [ male announcer ] when mariel zagunis first took up fencing, the u.s. hadn't won gold in over 100 years. but thanks to them... and her... and especially this guy, all those years were just a prologue to this.
♪ it's amazing how far you can go with a little help along the way. td ameritrade. proud sponsor of the 2012 u.s. olympic team. td ameritrade. would you mind if to be i go ahead of you?omer. instead we had someone go ahead of him and win fifty thousand dollars. congratulations you are our one millionth customer. people don't like to miss out on money that should have been theirs. that's why at ally we have the raise your rate 2-year cd. you can get a one-time rate increase if our two-year rate goes up. if your bank makes you miss out, you need an ally. ally bank. no nonsense. just people sense. is at the heart of every innovation. with the sleep number bed, it's not about soft or firm. it's about support where you find it most comfortable. the magic of this bed is that you're sleeping on something that conforms to your individual shape. wow! that feels really good. you can adjust it to whatever your needs are.
take it up one notch. my sleep number is 50. i'm a 45. and now, for those interested in trying memory foam, sleep number introduces our new memory foam series-the only beds that combine cradling memory foam with the amazing dual-air adjustability of the sleep number bed. the memory foam bed that's perfect for couples. so whatever you feel like, sleep number's going to provide it for you. memory foam just found its better half. sleep number. hurry in now and enjoy introductory savings of $500 on our most luxurious memory foam bed set, and two free coolfit pillows! plus, a special financing offer. final days! ends august 15th. only at one of our 400 sleep number stores, where queen mattresses start at just $699.
rick santelli joins us in chicago, too. good morning. >> good morning. trust me, people. we have a special. i know you hear a lot of people say it. this is a special guest. this is dr. richard sandor. he's been my boss and mentor and business partner. here's the guy who invented interest rate futures. in 1975 he wrote the first contract for interest rate futures in the world for the
jennie mae contract. even though that didn't survive, but the next one in '77 was bond futures and we're off to the races. >> exactly. >> tell me and tell the world about the chicago model. we want to be frank and objective. there's a couple of foybles along the way. we're doing well, aren't we? >> we're doing good, rick. we have two exchanges here that set the model for 78 international derivatives arnoud the world in 35 countries. china will start a crude contract and interest rate contract and they're imitating the chicago model. it does have its problems, but we traded 4$400 trillion of derivatives worldwide last year, and no systemic breakdown, no t.a.r.p. money, no bailouts. >> now, when we look at derivatives you wrote a book in
april, "good derivatives." what is a good derivatives versus a bad one? >> a good derivatives is, number one, transparent, regulated, served a hedging function, and is transparent. if it has those and is margined and has all kinds of risk management. a bad one is like greece, okay? opaquely done, 27 basis points, charge for insuring greek debt when it defaulted every other year since 1828, nom margin or checking. >> over-the-counter derive acti actives were at the epicenter requiring people to get mortgages with higher long standards involved with it. forgetting that a minute, do you think they have been draesed properly so we don't have
another '08? >> i think some of them, not all of them. we had really good functioning otc derivatives with currencies and interest rates, swaps, a lot of that stuff worked. >> real quickly. our time is running out.otc you. rules and regulations. you're a great public speaker. show them some of the history of the size of good rules and regulations versus what we have today. >> a good rule and raeg lags is the u.s. constitution, six pages, a25 points to set up the federal reserve board. a couple of hundred pages to establish the cftc. dodd-frank is 2300 pages, bigger than the new testament, the old testament and koran. something is wrong with three bibles that govern 2.5 billion people is smaller than a bill to reform financial institutions. there's just inflation in
legislation. >> doc, we have to leave it here. that was his trading badge for years. carl, back to you. >> thank you. >> rick santelli in chicago. barclays out with bad news for the pc market. they say the immediate other rick rise of tablets and smartphones continue to further pressure pcs themselves. are these towers going away for good? we'll talk to the analyst behind that call in just a few minutes. you do what you do... because it matters. at hp we don't just believe in the power of technology. we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter.
11:30 on the east coast. the markets in europe just about closing right now. shares nearing their highs for the year today after chinese economic data kept alive talks that central banks come to the rest could you five years to the day after the financial crisis began. european markets boosted by minorers after the data. psych lickal shares like banks and commodities propelled the markets higher on expectations. banks among the main gainers today, standard xharterred recovered further after fighting accusations it's involved in a money laundering transaction with iran. auto stocks are the biggest fallers. we'll bring in mary thompson on the floor on the nyse as we dance around the key levels,
mary. >> the markets have been stuck in a narrow range. the range for the dpou is 407 points and the range is 5 points. remain above key levels, especially for the s&p above that 1400 mark. the dow turning lower recently. it was a bit higher. one of the reasons for that is weakness in american express today. this is offsetting the gains in cisco following a couple of upgrades and cisco keeping the losses in the gains as well as the nasdaq, which is the best performer up 7 points in today's session. look at the sectors at play today. energy getting a lift from a surge in natural gas prices. the best performance in the last two weeks in the bullish inventory report. energy stocks respond in kind. tech stocks can trace back to cisco, higher as well along with financials showing strength despite the weakness in jpmorgan. one of the weaker performance within the dow 30. the broker deal index has a good
day today in large part of etrade. we had bertha talk about it earlier. with the company replacing the ceo and an analyst at j and p securities means it could be the company readying the firm for sale. his bet on who could be an acquirer td american trade is the rival trade. let's check on shares in td ameritrade higher. also benefitting today is the strength we see in home builders. there was an upgrade to this group or most of them group, i should say, earlier today, from jpmorgan. the home building index at a four-year high today. this is boozer and cady hoems. it was downgraded on an evaluation basis. these stocks should benefit from higher rent prices to make home affordable -- buying a home more
attractive as well as household information. two trends to benefit home buil builders at this time. we have staples that are one of the better performing sectors yesterday. dean foods yesterday rallying on the news it's spinning off the organic unit. today it gives back gains. moody's putting it on review for a possible downgrade on concerns about how that organic spin-off might impact the credit rating. the dow is down forty points and the s&p above that 1400 level up above a point and a half. back to you. >> we'll see if we close for the whole daily. nat gas is not. it's surging in the wake of the smaller than expected inventory report. you don't see 5% moves all the time. >> you don't see it all the time. sure, it's a volatile market, but this is a big move today for natural gas. we saw it up happen occasionally when we get a storage report that analysts didn't expect, and
that happened today. that 24 billion cubic feet increase in natural gas and storage was less than what analysts expected. we saw this surge to a high of 312 for the session. we're with cindy wexler, who is a veteran trader on the floor. this is not expected, this number, but this is a very technical market for natural gas. how did you trade on the number? >> well, this market, like you said, has been trady very technically to the number. 311 was a big number op upside, which is where we went to 312, 323 and 327 is the high we saw a few days ago. at that point you want to be a seller, and 286, 272 is a good area to buy it. >> i talked even to veteran oil traders looking at the natural gas market to capital idaize on energy space. they look at the thursday reports as a key indicator.
you can see a big jump in prices. why so much focus right now on what this number shows? is it because there's a concern or belief that we see a change now into natural gas demand for power generation more so than coal fire demand, or is it switching back and forth? what is the issue here? >> i think that's part of it. i think there's a lot of issue with the storage thing and people are afraid that -- they're watching the storage very closely because they were aafraid we would run out of storage in the fall. now we see that the levels are coming down, and that this may not be an issue. i think that is one of the reasons they look at this so closely. >> we're still in the midst of hurricane season. ernesto let us know that, florence as well. how do you play the weather situation here in the natural gas market over the next couple of weeks? >> i don't think that the hurricane issue is as important as it used to be, because the infrastructure with the pipelines so much better than it used to be. i think the heat has been much more of an issue with the prices.
>> nthank you. we have it from cindy wexler here as we have a rally under way in natural gas up 16 cents, 3.09. about a 5% move today. back to you. >> sharon epperson over at the imaximum. barclays is not so impressed with the pc market. will tablets and smartphones cannibalize sales of pcs. we'll go to a commercial with some stp.
well another great thing about all this walking i've been doing is that it's given me time to reflect on some of life's biggest questions. like, if you could save hundreds on car insurance by making one simple call, why wouldn't you make that call? see, the only thing i can think of is that you can't get any... bars. ah, that's better. it's a beautiful view. i wonder if i can see mt. rushmore from here. geico. fifteen minutes could save you fifteen percent or more on car insurance.
rage against the machine. get ready for a street fight on whether computers are costing humans their jobs on wall street and investors their money. is the economy in better shape than you think, and is that why stocks have been melting up? we're solving the market mystery. the war between appear pem and google. what their high profile fight means for both stocks. tune in at the top of the hour. >> looking good. our personal computer is a thing of the part. a recent note says there will be no growth in pc sales this year. one rears is consumers and companies don't have enoh wallet to support new pc
purchases investing in new gadgets. ben authored this note. ben, welcome >> good to see you, carl. >> you were at 3.2% growth for 2012. you go to flat. that's a significant move, right? >> well, yeah. pcs are fighting for any growth you can. this was a double-digit growth market not too long ago, and notebooks grew over 30% in the middle of the last decade. it is hard to get any growth, and then with some pc asp erosion, you don't get revenue growth either. >> why now, and wouldn't anying like a new windows 8 at least lift things in the short term? >> windows 8 creates some confusion, carl. microsoft came out with a reference design for what windows 8 should be, and they say it's for tablets with perhaps a detachable keyboard. windows 8 is a new interface, so
consumers have to relearn windows. it's pausing the market quite a bit right now. we're seeing some of the worst pc builds in my career right now. it's grinding to a halt in anticipation of windows 8, and then i'm skeptical we see a huge uptick. i'm looking for a 2% uptick in the fourth quarter for the pc market. maybe it's a little better than that, but in 2013 we shall resume the cannibalization trend. >> you make it sound like they won't be bought again? >> in the investing world we need a few percentage points than the companies thing and it sounds more bearish. i think pcs always need to be bought or macs for that matter. there's task cannibalization from smartphones and tablets, meaning you can sit in your bed or home and do stuff you used to do on a pc. it elongates the sale cycles. we wrote about how tablets do that and all the innovation is on the apps, which then create
new ways p for you to sthar and use information. we also talked about the coming change in tvs where you do basic computing tasks on your tvs which you can do through some unpopular solutions. if apple comes out with something, we think it will be popular. those will be basic desktop tasks you can do from your tv. you elongate the sales cycle as you cannibalize tasks. >> let's talk some stocks. i'm trying to envision how this would be anything but negleativ for dell, but maybe i'm wrong? >> the consumer business is a small part of the company, but they acknowledged last quarter that the ipads were hurting them in business. we think they lost a lot of share in education and business to the ipad last quarter. for dell what they need to do is what they're doing. they need to reinvest in software and storage and services and try to steer as clear of this as they can. the only problem is pc market for dell is 3550% of the revenu.
where it could really hurt is hewlett-packard. it's a consumer pc company more than dell, and what we outline in the note is how this is happening in consumer and corporate and tablets and in notebooks. but in desktops we outline how consumer desktops could be hurt by smart tvs, and that's more hewlett-packard than dell probably there. >> i don't think microsoft is part of your universe, since you're a hardware guy. would you theoretically be bullish pre-win 8? >> we're very much in sync about what's going on, and what we've been talking about as a firm is that windows -- microsoft may have a trade this year, but once they sell windows 8 and get into 2013 where we have another round of ipads, we have another round of smartphones and consumers and corporations have to dip into their wallets, we do see, you know, some slower days aahead
once we get into 2013 with the whole pc eco-system. obviously, they're a part of that. >> it's a great report. anybody who can get their hands on it should read it from yesterday. your target and estimates remain steady on apple. >> really like it still. as long as they take share from everybody's wallet, they're okay. >> ben, thanks so much. >> thanks, carl. take care. >> don't forget our twitter question today, as tablets do push some of they see clunky pcs closer on to their deathbed, what's the best use for all those leftover hard drive towers? our address on twitte twittetwitter @cnb twitter @cnbcsquawksd. there was a deal struck between starbucks and square. we had the square ceo. jack said it yesterday. here what he had to say about that partnership. >> i think it will move faster than anyone expects. you see this transition to mobile being a device to pay,
and this brings it in the world in a major way. >> what does a starbucks square deal mean? who are the winners and losers from all of in? joining us today is dennis berman. guys, good to see both of you. >> dennis, i know you must have a firm and provocative opinion on this. what is it? who wins? >> you got to give square and starbucks credit. this is a deal that changed a lot, and it gets people talking about square and it gets people both on the measure chant side and on the suser side downloading that app, getting that relationship with the company and giving the company more mass. i got to say, have we not learned, carl, we've entered into the silicon valley hype machine for the last two years. there have been some incredible companies created, but the hype that we've experienced around be it group joon or facebook leads
to suggest there's too much hype right now. there's too much at stake here for square to win it all. we have to sort of turn down the volume on the hype a little bit on square right now. >> dylan, do you go along with na? a piece out of the times today says visionary oriskany? what it is? >> hiype is a good word. this is a real coup for square because they have starbucks as a major client. that's a great score for any startup. it doesn't play to square's strengths. they're this great user experience for both consumers and form measure chants and neither are in play here. you sus the same 2 d bar code scanning technology you use for your starbucks app, p if you have that. starbucks isn't going to use any of square's merchant tools. ra really it's a payment processing deals, and it's hard to see why consumers care about
this. it makes zero difference to customers. >> i love that dylan is already upset and tired by the old 2d bar scanning technology. here's one way to look at it. each individual starbucks in an individual neighborhood becomes an anchoring points for other measure chants to start using their own square devices. >> you don't think that, say, a dunkin' would say, if you're in bed with starbucks, i'll do a partnership with verifone's technology? >> i'm sure that will happen. dunkin' doughnuts is a great example, carl. to think of it less as a square experience for starbucks but more as an anchoring point to kind of experience square more and take better use of it. i think that's a challenge to show that, though. you have to think about it. why would i use the square app instead of starbucks' own app? right now the experience is almost the same and it's better
to use the starbucks app because you get rewards. they haven't really shown any incentive for consumers to use the square app at this point. >> right. i love that we both agree there's too much hype and arguing. it seems that square has to make those incentives. if you can only use it for starbucks, then that's a single-purpose use. if you could use it on 15 merchants in your daily routine and daily errands, that might have value. >> what i'm really looking guard to is is starbucks implements that square feature where you can say your name, and they hand you your coffee and then it goes on to your tablet. that would be fantastic. as a bonus, the barista at my local starbucks would finally know my name. >> i would say this, too. if you were looking to blanket the country in one move, is there another retailer you would go to, dennis? >> no. >> that's why you have to give them some respect.
again, the hype machine, they want to come on the media and visit cnbc because they want everyone to adopt that technology and the merchant and customer side. let's keep in mind what's really going on here. right now the private valuation of scare is almost equivalent to verifone. the profit margins for verifone has been okay, not great. square is taking down the profit margins of processing, obviously. we're in a position here, what is square playing for? i don't think it's about processing. it's about the data that it can manipulate to customers. >> good conversation. thanks to much. >> when we come back, presidential campaigns are rough. we look at a new ad reaching new levels of vicious. we show it to you after this break. okay, here's the plan.
you have a plan? first we're gonna check our bags for free, thanks to our explorer card. then, the united club. my mother was so wrong about you. next, we get priority boarding on our flight i booked with miles. all because of the card. and me. okay, what's the plan? plan? mm-hmm. we're on vacation. this is no plan. really? [ male announcer ] the united mileageplus explorer card. the mileage card with special perks on united. get it and you're in.
to washington, d.c. presidential campaign attack ads getting rather vicious now evoking ideas of wrongful deaths. we explain that this morning. >> good morning. if you want to know where the mid-summer action in between obama and romney, it's in ads inflammatory or misleading or n inflammatory and misleading. take two good examples of gen genres. this super-pac accuses mitt
romney of of death of a late factory worker. >> one day she became ill, and i took her up to the jackson county hospital and admitted her for pneumonia and they found the cancer. it was stage four. there was nothing nethey could for her. she passed away in 22 days. i do not think mitt romney realizes what he's done to anyone. furthermore, i do not think mitt romney is concerned. >> independent fact checkers say this is misleading. yes, the worker lost his job and health insurance, but his wife was on a different health care plan and died five years later. of course, the worker has no way of knowing whether mitt romney is concerned or not concerned about any particular person, much less his wife, who surely mitt romney did not know. of course, the democrats look at what mitt romney is doing. he aaccuses president obama of cutting medicare which is equal off base.
here's that ad. >> in 1996 president clinton and a bipartisan congress ended welfare as we know it. on july 12th he quietly announced a plan to gut welfare work reform. under obama's plan you don't have to work and train for a job. they just send you your welfare check. >> independent fact checkers say this ad is off base. why? because the order from the bahaobama administration gives states extra flexibility but many state with republic governors asked for flexibility. there's no requirement it weaken the welfare law, and we have to see how it plays out. >> good truth squatting, john. wait until tampa. it will get worse. barclays is reporting that the rise of the tablet computer is cannibalizing pc sales over the long term.
we ask you to put on your always creative problem solving cap and ask for the best use of the hard drive towers. cnbc "squawk" st. your answers in a moment. you do what you do... because it matters. at hp we don't just believe in the power of technology. we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter.
let's get to a thursday edition of "squawk on the street." we find that the rise of the tablet computer is cannibalizing pc sales over the long term. ben said he's seen the worst pc builds of his career. ha we ask you what's the best use for leftover hard drive towers. lone watchman writes to sit on at '90s theme parties while you watch sieinfeld episodes. john writes to use them to fill in the trade gap. dow is down 41. lost a little ground in the early morning session just after europe closed. wanted to draw your attention to home builders. a couple calls out today, but the spdr is now trading at its highest level since september of 2008.