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tv   Squawk on the Street  CNBC  September 4, 2012 9:00am-12:00pm EDT

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forehead. not a good situation. >> no, but you're brave. >> shots in the arm. >> the face. >> people like your age don't go looking for that. >> no, not yet. at some point. we got to run. join us tomorrow. "squawk on the street" begins right now. nothing wrong with a little earthen earthened, wind and fire to get the month started. welcome to "squawk on the street." if you're just back from vacation, welcome back to the first trading day of september. back from some vacations themselves. melissa is going to be back tomorrow. take a look at futures. we are going to pack a lot into a holiday shortened week. a little central bank action, economic data, some tech announcements in the next few days and as for europe, they were open yesterday with some good gains. mixed session today with the s
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ftse down. market rallied 10% this summer, but september is notoriously weak. the the worst going back 100 years. the highest set-up of the ecb and jobs numbers. >> how about banks? analysts are resetting for some banks. morgan stanley to outperform, but jpmorgan picks unover the other. >> big week for mario draghi. spanish and italian yields are down on that news as draghi continues to build his case. >> and you want somebody to blame for facebook stock price? andrew sorkin points the finger at the cfo. >> oh. we head into september after a positive august for stocks and a third consecutive monthly increase for all averages. the dow posting a sixth tenth of
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a percent gain. wall street's got a lot to focus on. ism data due an hour from now. friday, of course, the big jobs number. jim, welcome back. >> great to see you. >> so much to talk about. and you must be like chomping at the bit after having been gone for the past few days. >> 3:25 a.m. jim cramer tweets. why? we are now back in crunch time. will they deliver? friday, unemployment number. talk about what that means for the election. this is a make or break week in a month that has been make or break for years and you know what? i got to tell you, carl, i don't think is set-up is as negative, the european stock market has been right. it's been good. >> and good for some time. you have pointed that out. i always say what about the bond market. of course, and we see yields below that key 7%. we like to talk about that as a psychological barrier and they
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like to maybe tan one. we'll be watching that closely. also seeing on the frobt of "the new york times," it's not necessarily a new story, but it does have the tendency to exacerbate fears. that is capital flight out of europe over all. not just spain, but over all. interesting report by the way from nimora this morning. euro zone, the spanish problem, that is cited as well today by a number of publications, so that's also going to be a focus. >> and this is a time where i have been saying santana, bva. when they're up, i always feel like capital flight may be a sensation or that there's a plap. i think one of the things we have to focus on is we think there's a plan. we think there's something. everyone keeps saying there's a plan. you know, but it's almost as if as long as it's out there, we're fine. same thing with china. hey, as long as it's bad, it could be good.
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i think this is the month where we find out if it's bad, it's bad. >> you're referring to some chinese data out over the weekend. the pmi 2 was a miss. >> i remember the analogy i use today use when i was trading. it's a four-engine plane. when one engine goes, they star to swing into action. when four engine goes, it crashes. >> it's going to be a very long flight. never going to get there. >> take your seats, right? trays to the upright position. so, do you position into this week with a positive bias? and if so, are you counting on something big on thursday? >> come back to the issue of earnings. campbells, mm mm good. come back with medisis. suddenly, jonah, who's always tried to realize, he sells the company and the stock goes up.
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these individual stocks continue to amaze even as the macro continues to beat on edge. >> and it seems that has been the winner at least through this summer. >> yes. >> but again, to your point, that dynamic could change now that we're back. by the bay, volumes are extraordinarily low. because it matters. there's no participation in any deep way in the equity market. 1998 was a good year. >> i would sit there with you and we would be like the pre market buy is better. >> and you'll hear and the only volume going on is the machines themselves and that's it. >> if you have 10,000 medisis, you're not thinking about volume. you're thinking do i sell or sxwrus let it ride? >>. >> $44 cash deal, but there is a very little spread in that if we
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take a look at medesis because the last time, cephalon got an overbid. valia valiant, i think they're corporated in switzerland. very favorable tax rate and basically rolling up companies. they're an acquisition machine. >> it's going to get darn exciting again. august was kind of, remember august last year? i remember i went to see the eagles training camp in august and the guys were saying like, hey, what's going to happen. this time, they were like, hey, is vik okay. we actually focused on football. and as the giants play tomorrow, could be overshadowed by ecb on thursday. >> the ecb is going to meet thursday. expected to announce details of the bond buying program. prices, what's been going on, 1998 feels like. ahead of that gathering, mario dr draghi is telling european
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lawmakers that purchases of bonds by the central bank would not reach eu rules. in the meantime, moody's is changing its outlook to negative and the agency warns it might downgrade the block on the four biggest budget backers, germany, france, the uk and netherlands. >> on top of that is a reuters report that draghi's, his nemesis, is increasingly isolated in his opposition to bond buying, so if some of the gate keepers start fawing by the wayside, i wonder if you think germany does turn around. >> the german data is starting to become hideous. remember the german stock market, germany's up 18%. so you've got that, is it up because people feel something good is going to happen or was something good had happened. the the germans do not want to commit financial suicide. we did have that moment where it
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seems like things were getting together. discord is not in the market. >> right and of course, it always comes back to germany and it its decision. >> they're the rich one. >> they are. they are. >> and gold started going up -- >> germany's also slowing. >> yes. >> and that's important. i mean, let's just step back. we've got china slowing dramatically. or not? >> you know -- >> a year ago, what were we looking for for gdp for china? >> we're not to the point yet. if you missed the quarter over in china, they execute you. i don't -- the numbers are important. beating numbers in china, exercise in staying alive. >> also helpful if they could build a highway or bridge -- >> that lasts more than nine months! you quibble with everything on on me. the bridges have to stay up. there are things that the dhi chinese have done is endless building and not necessarily being careful about it, what seems like is if europe, where
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20% of the products they dump go to, doesn't turn around, it doesn't matter what china does and i don't hate china like a lot of other people. i think that china has also made it so a lot of things are affordable. i don't want dumping. >> but it's not a zero sum game. >> thank you. >> i'm with you. >> let me raise one thing. a poll last week asking people what the number one factor will be for markets in the fall, far and away, 80% said election, so how do you trade in front of a binary event still 60 days wa way? >> i don't want to declare anything over yet, but unless you get an october surprise, unless you get some hideous unemployment number, i still think the polls read pro obama. a lot of buzz on vacation about the 49 state sweep. utah, maybe wisconsin. i don't know.
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>> market positive? >> i'm saying that what i like, there's a lot of stuff saying if the challenger wins, it's good. i just like to know what's happening now and if you remember, if you know that you're going to get obama, you can do some planning, it's not necessarily positive planning, but you can do some planning. >> is the polling scientifically approved? >> i think a couple hundred responses. >> he's tamped in -- >> restaurant rossling or what was it. >> 157. the oieo. >> morgan stanley. >> got a great idea for the show. >> is it important? i should come back to spain's more important. i don't want to de-emphasize politics, but if spain, as spain goes goes new hampshire. how about that? give a little landon. >> morgan stanley receiving two
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upgrades. mike mayo upping the stock to buy. but they differ when it comes to goldman's. jpmorgan downgrading firm to underweight from neutral. jpmorgan says its preference is based on valuation and they sort of have a reset in their strata of preferences for all the big investment banks. >> david and i often joke, it's been joking, about the morgan stanley book value. i'll say morgan stanley trades at approximate book. i was looking at a little history, i went back to the may june period of 2008 when people were recommending morgan stanley trading at 1.4 times quote. you get to what, where are we some hideous -- >> yeah. >> it hasn't meant anything. >> no, not at all. >> and mayo, let me be critical for a second. i haven't made a lot of money following mayo. he's excite, interesting, but so
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is the series of movies. i find that avengers was interesting. >> that's a good point. he may not be somebody you want to follow in terms of -- that may be the case, but i'll take interesting because that's more than you get from most. >> it's a meredith whitney interesting? >> yes, she's thought provoking. she may be wrong. may have been very wrong on municipal bonds, but it forced a discussion. that's something. >> clint eastwood. >> yes. >> and outliar argument. >> made it more exciting. no judgment being made here other that be seemed crazy. >> did he have to something to say of munis? >> illinois gos, like the downgrade. >> a lot of buzz this morning, an article in this morning's "times" writes about facebook cfo. is he to blame for the social network site debacle? he appears to have badly judged
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demand and that the cfo signed off on the ever increasing price which ended up at 38 after the company planned a range at 25-34. also 25% more shares than the company planned in the final days before the offering. david, you reported recently that he has come back to the street looking for support as lock ups expire. >> yeah, they started a road show back almost a month ago. august 10th is when i first report reported they were reacquainting themselves with dwrefly selling stocks to those who already owned it and those who didn't. >> as we've seen those lock ups come. i thought one of the more interesting points in andrew's story came at the end where forget which ipo follower it was, but 90 days after was a good time to judge it's how well or poorly it's done and they will typically be well below a year after their 90 days after the ipo. >> so this is a broken stock. we've talked about it many
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times. clearly terribly mispriced and the other point andrew makes and he'll be joining us in about an hour or so, what's the impact on confidence at the company on those who would perhaps not stay any longer because what's in it for me in terms of my options. >> jpmorgan and morgan stanley, lower price targets. i want to call out andrew for the courage of this. i think people don't understand when you finger someone, when you say it was this guy, you know, saying was it morgan stanley, you know, you've got to pull that and also, a lot of people don't understand, it's the cfo that controls this process. here, even more because you have a ceo. and this was a deal where they would have liked to have been able to, there were pushbacks. morgan stanley would have liked to have cut the amount of shares because they started seeing the retail network was going to be
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flooded with it. that was a kind of a good relationship. this soured even that relationship. >> yeah. it was completely and totally mispriced. it's fair to say that. the nasdaq problems on that day, yes, they were significant. but at the end of the day, facebook never should have become public at that price and there were still plenty of people to blame. yes, the cfo does have a lot of power in that relationship, but if your banks are saying you know what? don't do both. don't go up in size and price. do one or the other. perhaps rethink it. >> david, i've been trying to get this. this is a piece of data that would really help. there were a tremendous number of hedge funds that got into the last of facebook and they were all high fiving. at the beginning, around when this deal became public, you could not deal with them. you'd be in a room with them and they were like, wow, i got in at this. i mean, the november lock, if you got in at 24 and you're a hedge fund, what's your plan
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here? were you shorting it the whole way down? >> that's part of it. probably hedging yourself on the way down. also under water right now. a lot of them had 180 lock ups, so they're not on locks yet. most of that money is not on locks for a while. >> when you send that performance letter out, you tend to address what you own publicly. i know this was a very unusual deal and i think there's a lot of hedge funds that are saying oh, man, wait until my partners find out. >> you're talking about hedge funds that got in before. >> there was a significant secondary mark, which is interesting colors, also, that there was so much facebook trading in and the ipo sort of marked the beginning of the summer. we're now putting the cap on the end of the summer and i wonder if you think the pain that has lingered all summer long is
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going to keep some from returning to the markets as they get back to work. >> i've never seen people take two and three weeks vacation at the end of august. >> you haven't watched me. >> true. but you're mixed with that same period off. >> we went seven of eight? >> i'll see you in the playoffs, not. >> lit we'll play off for fourth place. it will be great. >> i think you raise a great point. there is a sense in the old days that we come back and you'd suddenly see this flurry of activity. i don't see it. >> you don't? >> i see the the news being big. i don't see more people coming back saying let's get in this. >> but i shouldn't talk about volume at all. >> look, you want to go sell, you want to sell morgan stanley in this upgrade, you can sell all you want. i'm just saying that new players are not coming. forget about that nasty
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baseball. there are some big deals coming. i just don't want to say that to get more excited. i'm more excited and the news is more exciting. >> and i'm happy for your success. >> i wish you luck against the cowboys. >> maybe one or two. tomorrow night, right? >> 8:30 p.m., nbc. ahead, eric on tomorrow night, who's the vice president, t number two at the nfl. will the refs come back? i saw some reffing last thursday. a nightmare. off sides. no, no, it's not. it's procedure. number 67, he's not playing. >> we're doing high school football. >> on the nca d 1 refs are locked up. next, a tale of two tech giants. why the launch of the new iphone could change google.
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take one more look at futures as we kick this shortened week off. moderate positive action on the dow. more "squawk on the street" is live when we return. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start.
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and is facebook cfo really the the one to blame for the botched offering brings us to this morning's tweet.
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how might -- make up for the 50 billion loss in market value? tweet us, we'll get your responses later on this morning. people have unique views of what punishment might be. i imagine they'll come up with a couple. >> well, this was a fabulous piece. again, i don't think people understand how hard it is to write that piece. you're basically, i mean, we've all been involved with morgan stanley, people behind the scenes, facebook, about who is really to blame. and when you read this article, wow. >> i don't remember a cfo getting fired though for misprice -- for being involved. >> i wonder whether there are people who congratulated him for being able to basically pick off the market. >> i got $10 billion. raised a lot of money. >> by the way, is this one of
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those, i'm going to talk about this tonight on "mad money." did they know how quickly mobile was slowing down? they hate it when you say wreck i ing. slowing down. slowing down the revenue projections. >> that is a key question. >> when we come back, full speed ahead for cramer. can we say the stock he's getting ready to talk about, but mad dash makes its triumphant return. futures one more time. back in a minute. tdd#: 1-800-345-2550 you should've seen me today.
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time for cramer's mad dash. >> it's amazing t. quarter was bad. some controversy. >> understating it, but yes. >> the death of his exgirlfriend and son. this deal, okay, you were hard pressed to think medisis could go against allergan and win. how do i know these things? not from experience. why is value doing up if it was such a -- >> casteele and valiant has very nice treatment, swiss base or incorporated. right off the bat. valiant up 11%.
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there's the opening bell as we kick off the first post labor day session. down here at the nyse, a celebrity chef ringing theancer. nice to see them today. get ready for a lot of discussion about the month of september, guys. as we know, the 12th worst month, going back 50 years, 100 years, when the market is up, it tends to be positive. >> average is still not down that much. there are moments in september
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that i find to be have been frightening. in other words, it's not necessarily the end of september. it's getting through september because it tends to a lot of times have a you or a the. go to your portfolio. if you have something marginal that's a cyclical, they are not going to do well. while we await cutting in china, a deal from the ecb, earnings aren't good. we saw that with joy global last week. >> speaking of august, we've got numbers from chrysler. the best august in five years. 14 versus an 11 or so estimate. we're talking about a run right here, jim, that will make the year look very good when you compare it to past years. >> amazing to think that, is that really turning around?
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is it true? is chrysler -- >> i'm going to throw this to you. we're reading the same book. the steve jobs book. remember that moment where steve jobs says i am in love with italian design? >> yes. >> he knew, italian design under rated, i think they brought some of that to chrysler and -- >> design does go a long way and does when it comes to cars. >> somebody tweeted shades of iacoca this morning. smi smithfield, we did get some earnings. the drought prices are going to way on some. >> people are going to buy stocks. they want to buy campbells. but so much campbells, they beat a number that was already kind of out there. at the same time, hane, which came on "mad money," he directly said the camepbells of the worl
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don't have the organic. now, there's a piece today "the new york times" about organics yore rated. makes your head spin. >> there was a four-year study that says organic foods don't have a significant advantage to non organics. >> why was i able to sell 35 jars of my own tomato sauce. if organic is not hot, how could i charge -- >> we were encouraged by the fact the skinny monkeys did no better than the regular monkeys. that study from last week, also. >> do you have a favorite name going into the fall? a favorite name. a favorite stock. >> i'm bristol myers. why? he's chronically undervalued. he doesn't miss any games. like vix only has one full season. he is the stand in the pocket
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player who fires away when he should. bristol myers is the stock of the fall. >> and it's eli, not peyton. did you see the picture of his scar in the "times"? >> he went very low on our draft. >> so i'm hearing that yield still matters to you. i mean, you are net defensive. >> yes. bristol myers already down. they paid a lot for that company and they've written it off. the the dollar is right now, they have a lot of gaps in their portfolio, still, don't they? dealing with -- >> i don't think the cliff is as bad as some of the other k2 fall offs or everest north face. i believe that you need yield to be able to handle what could be a bumpy month. >>. >> bristol myers. >> i like it. >> we're going to get, we mentioned some of the tech announcements we'll get this week. tomorrow, it's nokia and mmi. trying to get in front of an
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iphone 5. thursday, it's amazon. we think we know what that might be. the kindle was sold out last week. >> what a stock. >> we talked about it many times when they had those quarters, everybody's going what are they doing. >> short, short, short. the guy's building not walmart. he is building the infrastructure for the world. it's almost impossible to find a factory that doesn't have. i just, my hat is off. he's done an amazing job and i don't think the stock's -- >> also off to shareholders. he seemed to be saying i believe in you and i believe in being a long-term holding area. it's not about each quarter cht i know it's going to be painful. >> or metrics transparency. >> how about the fact he's been able to bridge the gap of so many people. look at netflix. >> down about 5.5% today. >> what is that? >> we mentioned --
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>> what a dog. >> we mentioned chrysler a moment ago and we're getting ford now. let's get to phil lebeau with some of those numbers. >> an increase of 12.6% for the month of august. that's better than the estimate, which was an increase of 9.8%. but there's one number in particular when you dive down within the brands, particular vehicles, the s series truck, sales of 19%. combine that along with better than expected sales overall for the brand, better than expected sales from chrysler, i'm starting to wonder if perhaps we're looking at august coming in maybe at that 14.5 million rate, which is higher than many were expecting, which was about 14.2, 14.3. we're going to get gm in about 25 minutes, but again, ford, better than expected for the month of august. guys? >> and phil, august, vw, the best since '73. is this right? >> yep, they continue to do it and large by because they're
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bringing a larger portfolio and models built here. gener generally, a lot of people say that's not exactly what i want. that's changing now. >> well, one of the things i know people are going to say, i've got to go buy ford at 9:00. we're still stuck with europe. >> that's a tough one. >> we'll hear more about europe later this week. all the top managers are in europe and they're going to lay out their product plans, but at the end of the day, jim, we've talked about this. too much capacity in that continent. they've got to take out plants. ford's got to do it. gm definitely has to do it and then you've got the broader issue of just too many plants overall on the western half of that continent. >> phil lebeau in chicago. meantime, bob pisani's on the floor. >> good morning, guys. glad to have you back. the the only question today, whether we're risk on or off this weekend. the ris are k is more toward the
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risk on trade. the ecb number one, non farm payrolls on friday. as it was leaked out over the weekend, the street's not impressed. draghi implied they would be getting a bond buying program in the future, but it would only be short-term, three years or less. there's a simple problem here. governments don't finance their budgets with just three years and below. they need a lot further than that. so that's not going to go a long way and that's going to be a bit of a disappointment to the overall market. nobody's applied for aid yet, so we don't exactly know when the program is going to begin and the germans are going to be looking into the constitutionality of that within the next week. we don't know whether better numbers would help or not because the draghi bernanke put out there. we're at 100,000. we get 150,000, will that move the market forward? if you think non farm payrolls are going to be better than
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expected, how much do you believe it will move the market because the prospects of qe3 being a little bit less. the one thing everybody agrees on, the draghi put, bernanke put is still very much there providing a floor under the market. elsewhere, china, another three and a half year low, the pmi number. the official number came in below 50 and i think the problem is now the china bulls are really on the defense. six months ago, 8% gdp was where you are. if you were above 8%, you are a china bull. below that, you were a bear. now, everybody is coming down below 8%. including some people this morning. volumes, sandler o'neill just came out with the august volumes. the first ones to come out with estimates. these numbers here, lowest numbers since 2006 for the month of august. volumes were 48% below year over year. that was august of last year. remember, that was an unusual
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month for august. might have to smooth that out. still, you're going to be sure the numbers, the estimates for nasdaq, nyse, even the cme, coming down in the next couple of days. look at smithfield this morning. their numbers were below expectation. they cut hog productions. they're spending a lot more money on corn to feed those hogs. guys, back to you. >> thanks so much, bob. let's check out the latest -- go to jackie deainge los. >> we're watching wti here. prices just turned negative. we were higher this morning for a couple of factors that i want to talk about cht first of all, the stimulus hopes out of u.s. and europe. we're continuing to hold on to some of those hopes and also as bob mentioned, we got the comments from draghi this weekend, so that's having an impact on the market. despite the decline now, traders are expecting prices to tick up
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into thursday's meeting where we will hear more from draghi. if we close higher today, it will be the fourth session higher for crude although we are 26 cents down. data going to be important. those ism numbers today could impact whether or not the fed imbarks on more qe3 and friday's jobs report is a big issue as well. just a few comments on isaac. we are ramping up oil and gas production, but it is -- slow and traders are going to be keeping an eye on that. carl, back to you. >> thank you. i know you're watching netflix, david. only thing i'm seeing is if they have this exclusive deal with epix. >> that was the viacom. >> expired last week and today, an epix deal with amazon. >> and it could simply be amazon becoming more and more robust when it comes to streams. it's 79.99 a year including streaming netflix. does have a more robust product
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offering there, but you know, amazon's coming to play and lord knows they've got deep pockets to do it. >> look out. now, if we're going to talk about these stocks that are somewhat social, i want to point out that it may still be too early to buy grupon and i'm s r starting to wonder about zynga. these are stocks down on negative. the press doesn't stop with these as being a tough stock. you know, it's a shame because grupon does have a very good deal out today. i don't know if you got your memo. $15 is still up for grabs. just $15 on there. >> i'm sorry, it's $15. they'll just give you $15. pick up your favorite deal and they'll give you $15, so if i go get that brazilian wax, there could be a rebate. >> sometimes, we need a sarcasto
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meter. >> it's been right in terms of direction. >> he sa consistently it was too early to buy grupon and zynga. that has been the correct orientation. >> facebook with a dramatic move. it is up 19 cents. this is got to make the people who bought it at 38 feel better. >> i'm sure they feel very good. >> do any of them still own it? >> that's a good question. "new york times" deal book column today, andrew roth sorkin contends it's facebook's ceo to blame and loss of $50 billion in market cap in just 50 days. how might that embattled ceo make up for the $50 billion loss in value? tweet us. we'll get your answers straight ahead and as we go to break, take a look at some of this morning's early movers.
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caterpillar down almost 2%. they're going to be presenting at a b of a conference on thursday and last week, barically suggested a loft these conferences this month would be an opportunity to warn about the fall. >> caterpillar, there's negative views about truck build. obviously, china is caterpillar. a lot of people saying they -- when they bought from cyrus. the numbers have to come down and then again, what a great american company. maybe things can get better next year. the company did give a terrible interview saying things don't look good. i hate to short a great american company, but this one's going down. >> but better next year. that's what we say as mets fans. >> you always start out with great hopes. >> it was a great start to the year. >> it was a nice first half. >> it's not the nationals. the nationals, i think, are a
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company like melonox technology. out of nowhere, they just go crazy. >> shutting down strausburg, i don't know. >> time now for squawk on the tweet. andrew sorkin contends david ebersman is the one really to blame. this morning, we're asking you how might ebersman make up for the loss. armando tweets he should allow stockholders to return to the old wall. adam tweets, offer a diffidevid and have him reprise the greed is good role in front of a theatre full of occupy wall street alums. >> well, look, this is one -- on "mad money", we have a wall of shame. it's really been all ceos. maybe we need a special -- like
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the writing annex they have in cooperstown. maybe there's a cfo annex developing here. >> is his job not to maximize cash, right? >> i think at a certain point, you just want to hoist the guy because so many people lost money. i don't think that if you did the facebook deal you want everyone to lose money. one of the great things about sorkin, linkedin was a failure, they didn't get enough money. facebook was a failure. get tainted. i still think twitter, which we do back and forth, twitter has become the hot, dropped off daughter at college, another one. this is what they use. they tweet. they are tired of facebook and tweet works so much better on emotional. it's electric. pictures of the moon, my pumpkins, my tremendous harvest of tomato sauce.
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>> it's a good thing they bought instagram because everybody's migrating to instagram. >> there was a real migration. the cfo could not help toward mobile. talk about that tonight on "mad money." >> dow's down some 27 points. be curious to see if this i ss s measuring, if there's a potential. it tends to be a little leaky on days it's announced. in the meantime, there's more "squawk on the street" still ahead. come up, cramer has stocked to critique and he has just seconds to do it. find out if he can. when "squawk on the street" returns. i don't spend money on gasoline. i don't have to use gas. i am probably going to the gas station about once a month. drive around town all the time doing errands and never ever have to fill up gas in the city. i very rarely put gas in my chevy volt. last time i was at a gas station was about...i would say... two months ago. the last time i went to the gas station
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simon hobbs enjoyed his long weekend and now, he's here. >> certain ly have. you guys have been talking about this brutal assessment from andrew sorkin. we're going the talk about the mispricing in the next hour of the program. last month, it was interesting to see google l was up 7%.
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apple up 8%. we're going to talk about how they're relationship will be changing with the the launch of iphone 5 and as we wait for michelle obama to address the democratic convention tonight, we're going to hear from l.a.'s mayor and the chief of staff of george w. bush. >> simon, thanks so much. what a pleasure it is to welcome back "six in 60." start with man u. getting some analysts call. >> brokers of deutsch back, just don't touch this thing. go to see them in action. do not get in action with the stock. >> medvation. >> this is for late stage prostate, a very big deal. it's been a winner. >> game stop getting an upgrade from goldman. >> i don't know what they see here and i got to tell you, let it go. >> apple's price target. raised from 800 to 885. >> september 12th. this is a big data point. people are going to buy the stock right into the launch. >> union pacific.
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>> phil lebeau talking about auto sales. >> and a name we're going to be hearing more about, he canmann. >> i got to talk to him tonight, it's been a most disappointing stock, but i never gave up. big acquisition, looks good. >> there's a lot more tonight. >> the stock was at six, thinking of putting it in a cell block. he's a hero. i can't wait to speak to him. >> all right. i know you don't like to talk about central banks as much you do individual names, but you've got a call on what ecb's going to do this week in anything? >> i'm going to say because of the the action in some of the banks i follow, the the stostoc hopeful they're going the avoid the mass suicide pack. i think they do something constructive. >> would you be nibbling at gold ahead of that?
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>> anythingi constructive in europe means they're going to replate. but more importantly, gold is the place to be in september and it won't let you down. i see a breakout happening. >> we're going to get ism in a minute. there's a column in reuters today saying when it passes above 100, it's societyuated with a contraction nar ism. >> in 2008, we saw that, so i'm not going to overrule history. israel, iran, i knowprices, the expensive in labor day history. >> it is not slowing retail. retail's been on fire. be careful drawing a conclusion. retail has been great. the bears will fot relent on how great retail is. wake up and smell, i can't say
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starbucks. because it's been disappointing. i was at mcdonald's yesterday, giants are going to kill them. >> even with the new secretary. >> they're going to kill them. >> you've got joaquin. >> eli manning, you hear about him moving to new jersey. we love you, eli. don't go to ridgewood. >> see you tonight. when we come back, the big number ism. don't go away.
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welcome back to "squawk on the street." we have breaking economic data. the institute for simpupply and mountain at 49.6 in august. follow the dow jones, and that's versus 49.8 in the prior month. looking at construction spend, i don't have the construction spending data, but i'll have it in the second. down .9 i'm told. that's a big deal. we've been looking for 0.5% increase off of 0.4% in the
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prior month. that would probably figure into some of the data, some of the gdp. call up and look at the details inside the ism. new orders ticked down. production ticked down. employment is down, but it's still above 50. so that's 51.6, still a decent number. deliveries up a little bit. inventories up a little bit. pric prices were up and you might expect that. the backlog of orders fell. 42.5 off of 43. exports up a bit and imports down. overall, looking at the detail, it looks pretty weak inside. i'd love to look at details inside construction because what i'm looking for so whether or not we have spending largest drop in years, the the reuters headline. we can talk about this a little bit later: down 0.9. i want to know if it was government, private sector or commercial. just don't have the break down,
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but overall, a weak ism number. close to expectation. look at detail, i don't see a lot of strength inside it and that's come off regional fed manufacturing surveys that pretty much, this overall national pretty much confirms. >> and we should mention, you're just back from jackson hole yourself. fed meeting coming up the 12th and 13th. how important is every data point leading up to that meeting? >> i'm not sure it's all that important in a sense that i think the fed sort of made up its mind that it needs to act and act in september. even if we end up on the high side of the growth forecast in the 2%, even 2.5% range, the gap as far as many people are concerned is so large that there's a pretty good conviction that the federal reserve has to do something and i would go back to those minutes, many members essentially feel we have to act. it's a pretty important statement. i'm not sure the market digested
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that. there was some attempt by people, the more hawkish members to talk down that phrase, but i think that's a substantial and important number and i just do have the construction details here. private spending was down 1.2. residential down 1.6. that's a sharp reversal from the june numbers. we're talking about july numbers here. june was up 2.4 and spushl sppu spending was down. weakness in construction, that's a big miss. the only thing you can say good is that number's volatile. but at the moment, this is a negative for gdp on the economy. >> thanks for a lot of heavy lifting there, steve. appreciate it. >> rick does a much easier job of this. i want to get into his special sauce there, but i don't have it. >> okay, talk to you in a little while. "squawk on the street," it is official. the first trading day of september's upon us, but as the month clocks in as one of the most notoriously weak trading
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months of the year, what can we expect? we'll talk september's seasonal tendencies. >> and democrats descending on to the city of charlotte, north carolina, as the democratic national convention kicks off today. we'll get your republican take on the dnc launch with andrew carr. >> plus, ben bernanke leaving the door open for yet another round of qe3, giving gold a nice bounce. how much higher can the precious metal go? >> and apple's iphone release just over one week away, but one firm says today, the launch of the new phone might just change google's search relationship with apple. >> you may have seen at the bottom of your screen, gm was out with its august sale's numbers. more on this, joining us, phil lebeau and he's got gm's vice president of sales with him as well. >> thank you, david, joining me from detroit, head of sales and
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we're looking at an ib crease of -- what's behind what we're seeing in august? not just from you guys, but from the other automakers as well, which is better than expected sales? >> well, we continue to see slow, gradual, steady growth, phil. in our case, we're just very excite excited about the month we had. our small cars were up significantly. we set a number of records. spark, sonic, cruise, volt, as well as is cadillac sts. still bullish. >> particularly with the chevy car side, you had the olympics going on. you also had a number of newer models in there. for the chevy brand on the car side, are you looking at it and
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saying it's no longer a weakness. >> exactly, phil. we historically have been known as a truck brand. and with this new chevrolet portfol portfolio, i think we're proving that we have a very good lineup, a very strong lineup of cars now. >> having said that, let's talk about the volt. is it fair to say the volt is always going to be a niche vehicle. you guys have decided you're going to suspend production as you are retooling that plant, but your sales this year, you're only at about 13,000. is it fair to say the volt when it's all said and done is going to be a niche vehicle sell iingn that maybe 20 to $25,000 range annually? >> we don't peg it because it's har to say where the industry is going to go and what feel prices are going to do. phil, but that volt month that we just had was our best ever. we certainly had sold more volts
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this year than we did last year in its entirety. we were going to balance production with demand. we're currently sitting at about 60 to 65 day supply. so we feel pretty good about the volt. it's great new technology. that people are just really getting used to. >> can you give me a number in terms of inventory for trucks? is it still well over 100? >> right now, our full size pick ups are about a 122 day supply by design. we have a transition coming here next year that i think most people are aware of with an all new truck coming, so we're right about where we think we're going to be and finish off at the end of the year. >> the head of sales for general motors in the u.s. division giving us a breakdown in what the sales were for august. one thing to keep in mind, we've seen gm, ford and chrysler all
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come in better than expected. we're wondering if perhaps we're looking at sales for a month coming at a rate, at least 14.5 million. >> thank you very much. the market is falling. we're down 49 points on the dow. the breaking news of course, economically within the last few minutes, has been the disappointing survey of manufacturing activity, indicating manufacturing is contracting. good morning. >> good morning. >> so, the economies are slowing. we can see that. we've got manufacturing contracting here in the united states. yesterday, we learned it's contracting in the china for the first time since november and in europe, it continues to contract. and yet, you think that the market is well supported here, why? >> i think it's going to be a range bound market. i think right now, we're in the tougher end of the range. there are two things that are supporting the market. one, there is an economic value
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to entities and so the lbo or acquisition value is providing support. to the extent companies return cash to shareholders, that offers some support. >> do you see many acquisitions in the market at the moment? >> no, and that's one of the things that's been surprising and disappointing at the same time. it's interesting. there are areas of the market where you've seen capital flow to economic opportunity. for example, buying single family homes to rent them out. which is an arbitrage that was made available by the decline housing prices you haven't seen a comparable level of activity on the corporate side, which is surprising. there are a couple of opportunities. more specific. but right now, i think there's still opportunities in health care. i think there are opportunities to access pricing power in energy among the energy
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companies, as well as select, tech and consumer cyclicals. >> just dig down a little bit if you would. >> sure. and so, the opportunity there is probably more on accessing attractively valued cash flows, so some of the larger software companies are generating a lot of cash that strike me as attractive. >> would that include apple as we await the iphone 5 or is that to tris ris can? >> i don't want to focus on the individual company, especially one which has specific products cycle, but if you look more broadly. free cash flow as a whole dominated by the largest tech companies out there is pretty much the highest in history. >> why do you choose energy when you feel oil falls further here and we should note of course that the chinese market overnight has closed at levels that we've not seen since march
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of 2008. >> and this is really a great and important point. one of the things that excites me an makes me enthusiastic about emergennergy is when oil fall below the cost of production, which is running about $92 or so. so when the oil prices fall below that, they're kind of hovering in that range now, i would step out and increase my range with oil services companies. and the current price, it's attractive based on dividend yield, but maybe not as much upside as we had two or three months ago. >> good to talk to you. thank you very much. thank you, sir. >> now that the republican national convention is over, democrats gearing up to send their own message to the country as the race for the white house hits the two-month mark. we'll sit down with andrew carr in just a moment.
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of votes potentially, the appearance of michelle obama or the first hispanic to make a keynote address at the dnc. zwl i would think michelle obama would be because she has a very, very high national recognition and approval rating. and somebody who has been important to helping the president project a positive image as a husband, as a father. that's helping project or push up his likability rating. it's a big advantage over mitt romney. but you know, democrats have been hit hard over the last week by republicans at their convention. paul ryan continued that over the weekend by posing on the campaign trial the same question ronald reagan posed about jimmy carter. said democrats can't answer cht here's paul ryan. >> when you take a look at what we're going to hear in charlotte today, the president can say a lot of things and he will, but he can't tell you that you're better off. simply put, the jimmy carter years look like the good old days compared to where we are right now.
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>> president obama began going on offense yesterday after mitt romney said a football coach would be fired with obama's economic record. he fired back by mocking the republican's economic playbook. >> on first down, he hikes taxes on nearly $2,000 on the average family with kids in order to pay for a massive tax cut for millionaires. on second down, he calls inaudible and undoes reforms that are there to prevent another financial crisis and bank bailout and then on third down, he calls for a hail mary. ended medicare as we know it. >> now, the president closed that little football riff by saying voters should put the romney ryan ticket. we will see whether they can move any voters this week toward re-elected him for a second term. voters are very dug in. romney got a small bounce out of his convention.
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the combination of michelle obama tonight, bill clinton tomorrow night and barack obama thursday night, they hope will push things further back in their direction, guys. >> thank you for that. for more on the conventions and presidential race, let's bring in andrew card, former white house chief of staff during the last bush administration. currently serve as dean. good to have you pack. >> howdy to you. >> let's talk about what the argument's going to be in charlotte this week because whether it's a plant closing for gm or what have you, it seems like we're going to be hear iin what a mess the bush white house left the obama white house with. does the argument hold any water and what's your reaction to it? >> first of all, i think president obama is very quick to take credit. and sort of accept praise. he's very slow to accept responsibility. and he almost never takes the blame. i think that's going to be the cadence of this democratic
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convention. he's going to be taking a lot of credit and he should be. any credit he takes, he should be sharing with others. he won't. he'll try to take credit. he won't accept responsibility and say that he failed and he has failed. he has not worked to put people to work. there are an awful lot of people unemployed in america and the rate is 100%. there are a lot of people under employed and some who have just left the workforce all together, so for a lot of people, they are not better off today than they were four years ago and the projections for the future aren't very good because the congressional budget office says that our economy will shrink in the first quarter of next year by 3.9% and for the whole of next year, unemployment rate could be at 9.1%, so even the future doesn't look good under barack obama. >> are we better off than we were when banks were failing or buying each other to survive or when the big three were nearly
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extinct? >> in some aspects, we're worse off. some, we're better off. the vast majority of the middle class is worse off today than they were when barack obama took office. yes, the credit crunch has really impacted not only america, but the world. and it has impacted all of us, but the policies of barack obama just aren't working the way he promised they h ed they would b. he made an awful lot of promises in 2008. he has not kept his promises. it's time to make a change. i think there's a lot of buyer's remorse in america. a lot of people had high hopes for barack obabut just didn't deliver. >> when you talk about his successes an the credit he needs to share, what are you referring to specifically? >> i think some of the successes in keeping america safe, he should share with the people in the intelligence services and military and people in the
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diplomatic core that have done a great job, so i do give him credit for helping to keep america safe, but he should be sharing that credit with a lot of the people who do the hard work every day and should give credit to president bush for setting a solid foundation of intelligence gathering and analysts so that we could have a safer nation. >> why isn't president bush been more of a supporter to the party to romney this cycle? he's been very reticent to give even the slightest sign of support and still has a following in this country, as you know. >> well, president bush, he's served his two terms as president of the united states and he is not standing on stage. he's not looking for the spotlight. i think that he's been a very, very good former president. he does support mitt romney. he supports the republican ticket, but this is not his turn on stage. it's mitt romney's turn on stage and he's supporting mitt romney, but the spotlight should be shining on mitt romney and paul ryan and that's the right place for it to shine. they're the ones that are going
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to offer the hope for the future. >> mr. card, to the extent that the debate between the campaigns is going to center on this idea of who's better off or whether you're better off now or four years ago, i'm interested to hear your comments that the middle class is worse off now. i go back to early '09 when president obama took office. the economy was contracting at a more rapid rate than we realized even back then an the stock market was about to approach a historic low. many would argue things were not good. >> they were not good four years ago. but i think the policies that president obama put in place have not accelerated the climb out of that recession. they actually delayed the climb and we've got a huge overhang because of the lack of leadership from president obama. we do not know what's going to happen in january of 2013 because president obama has not provided leadership to the country to suggest what should be done.
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so i think there are a lot of e deficiencies in president obama's leadership and i worry about it. i worry about america going forward. i know where we are today and some are better off. a lot are not, but the opt. >> michele: k that we had hoped president obama would bring to office has just disapated and i'm fearfulor t future. >> do you feel as though you got that clarity from a romney ryan ticket? because many say coming out of the republican convention, it was short on specifics about what they will do under their administration. >> well, i think it was actually longer on specifics than a lot of the mainstream media is giving the republican party credit for. paul ryan has probably given the most specific road map for sanity that any political media has give p over the last two years. i don't agree with everything he has suggested, but he has a road map and it made sense. president obama rejected a road
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map that came from two prominent political leaders. he said go to work. they went to work and then he rejected the plan, so he didn't even accept the map he was handed and could have offered leadership to put it into place and didn't do it. >> that was the simpson bowles plan. >> well, paul ryan did offer a plan. it may not have been the simpson bowles plan, actually didn't like parts of their plan, but he has been a very specific leader about what congress should be doing and i think that's the kind of leadership that he and mitt romney will bring to the white house. mitt romney is an action oriented leader. i watched him not only as the governor of massachusetts, but very significantly as the head of the olympics and i can tell you, he doesn't live in the past. he workeds hard for the future. he has the courage to make tough decisions and he generally makes the right decisions. he did a great job as the leader of both the olympics and as the
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governor of massachusetts. >> look forward to having you on a lot more if you're up for it. appreciate your time today. >> thank you very much. market's down 72 points. a lot of that has to do with china. we'll talk about that coming up and of course, where we are with gold. catching a nice central bank bounce lately in september is typically good for gold as well. more on that next on cnbc. [ female announcer ] want to spend less and retire with more? then don't get nickle and dimed by high cost investments
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facebook's public offering was three months ago and since then, the company has lost $50 billion in market value. andrew sorkin saying david ebersman is so blame. let's bring mr. sorkin in. allow him to further explain. listen, i get why ebersman should be blamed perhaps by shareholders now. but if he's a -- for the
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company, its employees, its well being, didn't he do a great job of raising that company $10 billion and signing up another 8 billion in potential loans should they need them? didn't he do a good job raising that money so they never need to raise cash for a long time. >> i don't disagree with you in that i give him credit and for getting that credit line. that's important, but ultimately, when you talk about the stewardship of the firm, when you lose $50 billion of market value, it doesn't just impact outside investors. the largest number of shareholders inside that company are the employees, so the idea of trying to get as much cash for the company, wheng you think of all the stakeholders, just filling your coffers makes that a win because then you have to deal with the larger issue of the employees whose lock up is coming up and the share price
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lower than they expected. in an age where the talent, these technology, the life blood of the company if the stock is as low as it is, the incentive to go to the next start up may be higher. >> maybe, although i will tell you they've got a lot of cash to use to increase compensation should they choose to do so to keep people. >> i think that's a reasonable argument. when you lose $50 billion, i'll say it again, $50 billion, the fact nobody has taken any form of responsibility, whether it be at the ceo level, at the banks that advised, nasdaq, there has been zero accountability for $50 billion that has vanished and that seems startling to me. >> i think we tend to agree with that. are the rules a little different for a company that really wasn't interested in being public to
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begin with? some might argue had to be dragged kicking and screaming into this market? >> i think there had be a disconnect as the process went on in that mark zuckerberg and management said we're going public and there's going to be this market thing, but there's going to be us operationally and internally. given now where the the stock prices, you're starting to see those issues converge. i'm not sure those were appreciated when they went public. >> surely, hindsight is 20/20. you know, 50 billion is a lot of money and it has huge im implications for this market. i'm not disagreeing with that at all. but he profit maximized. he sold the stock at $38 a share. there were people ready to buy that at 20% and more. >> the idea is that we're going to give credit to companies for sucking all they can, how would
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you ever expect to find and investor willing to invest again if all you're going to be is ripped off. that's a crazy idea. therest a middle ground meaning -- about linkedin and left a lot of money on the ta e table. >> when you're priced at $30 a share, who was on cnbc telling us that was far too high? >> we had people on the air -- >> people forget that day. >> it was too low. i thought it was across the board. >> to the extent an underwriter, they a their client is facebook, but they have other clients who stay with them a lot longer. that is the people they're selling the shares to. shouldn't morgan stanley have said, oh, wait a second, guy, i've got to push back here mr. ebersman, a little bit. let's no go up in size and price. >> there's a lot of blame to go around. i'm not dismissing what's going on in nasdaq, morgan stanley or any of the other underwriters. what i'm suggesting is that the
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guy who made the final determination decision on all of this was david ebersman. unlike many other public offerings, it wasn't the ceo. in fact, mark took himself out of it and david was the guy in charge of this. this is factual. it's down $50 billion. who's the man making these decisions? he was the guy running the ship. >> the one thing we can never truly separate what happened from that technical malfunction. i mean, there's no clean read on this because of what happened at the nasdaq. >> i wouldn't disagree with that except i'd say, look, the reason why i wrote the column today, the three-month mark is not a bad moment to look at stocks and what it ultimately portends for what you might see 12 months out. >> are you sure in this case that applies, david? >> andrew. >> when there's so much money, the lock ups are so big. there's so much supply coming on
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to the market and you don't buy facebook for the revenues it's generating now, for the potential it might be in a couple of year's time. >> absolutely, but the issue is how do you get back to $38 and above and to the extent you can and the time it takes that, can investors trust the company and david ebersman. that's a question. not a bad guy. very smart guy. it's always hard to be critical. >> i'm sure the two of you are going to have drinks soon, no doubt. >> the offer's on the table, david. to you and mr. ebersman. >> yeah, well, i'll join you anytime you want. >> that's easy. david's free. >> thanks. my appointment schedule right here, by the way. >> thanks a lot. when we come bag, could the lawn f of the new iphone change google's relationship with apple? we'll explore what's at stake for the two titans after the break. the equity summary score consolidates the ratings of up to 10 independent research providers
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welcome back. breaking news from toyota. an increase of 45.6%. that is slightly better than what the street was expecting, expecting an increase of 41.5% cht we're still comparing with august of last year when there was still constraint because of supply following the earthquake and tsunami. you take a look at shares, trading slightly lower. we want to look at shares of ford. now, the conference call is going discussing august sales. one note that is worth noting,
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in the fourth quarter, ford will be increasing production in north america by 7%. that's 50,000 vehicles and guys, that may not sound like a lot, but when you have a production increase, remember, production drives revenue drives earnings. there's important and shares of ford up just a nickel, but a day when the market is down, that's worth noting. >> one quick word on this. how worried are you about sales in china? i'm looking at european automotive makers that have gotten smacked recently. wasn't it sold as being a play on china is this. >> i think people look at china and know it's not going to continue to grow at the pace it has in the past, but for the most part, general motors has been holds its market share in china. now, the question becomes do you still believe they're going to hold that in the future? if you do, it's going to play out in their favor. >> thank you very much. the latest on toyota's numbers.
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eric schneiderman investigating whether private equity firms have used loopholes to avoid paying taxes. >> depending on who you ask, the practice of reinvesting profit from managing money isn't illegal. the irs launched an investigation in '07 and it came up empty, but that didn't stop eric snichneiderman's office fr issues subpoenas from early july. the idea was to figure out whether firms cheated the state out of tax dollars by diverting profits from managing money into their fund, which are taxed at a lower rate. private equity primarily uses funds to buy businesses, turn them around and sale them. once they sell them, their tax on any profit gain is is only 15%. compared to a 35% tax on other income. and by funneling money into
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their funds, they can lock in that lower tax rate. according to private equity growth counsel, more than 600 pe firms are headquartered in new york and many of the largest firms have used what my sources say is a pretty common strategy, so schneiderman is able to build a case. he could reap tens of millions of dollars in misdirected tax money from the partners just a few months before these tax laws change. president obama's push to tax all private equity income at 35% is set to take affect in 2013 after years of delay. now, many pe executives told me they expect that impending tax increase to be a more crippling issue than any fine over diverted funds. the biggest fear now though is reputational damage. anything involving private equity is such a hot button considering governor romney, the cofounder of bain capital, is
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running for president. but they have been vocal about the benefits since the industry entered the limelight saying quote, management favors are legal, widely recognized and often part of negotiated agreements between the alternative investment community and investor, including pension funds and endowments. many of those are new york state pengs that are invested in these firms. we'll have to see how this plays out. >> thank you for that. doing some work from midtown this morning. let's send it over to brian sullivan. get a quick market flash. watching some energy names. >> yes, kind of a weird call on the coal segment. basically, kind of whacking the the entire coal segment. pea body energy, walter energy, cloud peak energy, all with downgrades and some price target changes here. little bit of a different story for each. they made sort of positive comments saying they have the most diversified coal portfolio.
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still concern about the upside that's left of the stock. the more interesting thing to watch is walter energy. what they're saying is this, that the company's got enough liquidity to make it through next year. i guess there was concern about that, but because thest the most exposed to steel, if things do turn around, perhaps is the most upside as well. so a big industry coal whack from doll man rose. >> the third biggest loser on the s&p this morning. appreciate that. also, we should talk about the the second biggest loser and that is netflix. down 7%. almost the worst. not quite. first solar just inching it out. >> had been as much 10%. given they've got a new epix deal with viacom. apple ditches google l maps and youtube. it's made the two tech titans
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less integrated and that's led one to -- perhaps as soon as it's upcoming launch. the analyst raising that question is ben shacker. i know this is purely speculative on your part. why bother speculating at all then? >> first of all, i think part of our job is to raise this interesting issue. whether or not it happens this week or next, we think ultimately, you will see these companies apart and that means apart even on search. >> what would the impact really be on google? >> overall for the stock, it would be a big headline and the stock would be down somewhere between 5 and 8% on the day that would be announced particularly we don't think it's in the market right now. people are not expecting this. over the long-term, it's a more nuance question. when you do a search today on the iphone through the google
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a ap, the advertiser pays apple. you would have to go to google direct and could keep 100% of the economics, but would lose their share. >> there were some headlines last week, reports of a phone call between larry page and tim cook. i just wonder if you think these guys are stronger with each other than without. >> i don't think so. in general, these companies are true competitors in every sense of the word. if you think about how they're attacking the market, they're really competing everywhere. they're competing in every sense of the word now, in terms of annual products very different for the end user. >> tomorrow, nokia and microsoft will launch the smart phone to use windows 8 here in new york. nokia's stock from a beaten down
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level is up about 50% since the middle of july. just wondering what your expectations, twitter has images of what they believe the phone might look like. could it be a game changer for apple? >> well, i think in general, everyone has looking for a game changer, but so far, what we've seen from consumers is they either want the apple product or android product. obviously, nokia and microsoft want to have a hit and need a hit, but so far, what we've seen from consumers is that they really don't care. >> ben, real quick, back to search overall and google. isn't it being disintermediated by aps themselves and isn't that what it has to fear the most? >> in general, that's what we're talking about apple doing. a loft ip vinvestors have pushe back. we don't think this is a matter of apple versus bing. it's will apple use that ap culture? will they go to yelp, other
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thinker party vendors? and that's what we think could happen over time. >> thanks for joining us. >> and great to have you back on the show, david. using words like disintermediated. >> or incomprehension. >> up next, the care of the 2012 national democratic convention will join us. the current mayor of los angeles live from charlotte. stay with us. my volt is the best vehicle i've ever driven. i bought the car because of its efficiency. i bought the car because i could eliminate gas from my budget.
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could we make placing a trade any easier? mmmm...could we? around here, options are everything. yes mom, i'll place a long call to you tomorrow. i promise. open an account today and get a free 13-month eibd™ subscription when you call 1-888-280-0154 now. optionsxpress by charles schwab. after last week's convention, it's the democrats' turn. joining us is the chair of the 2012 national convention, los angeles mayor, antonio villaraigosa. welcome to the program. >> hi, carl, thank you for
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having me. >> we just went through a long week of convention watching. a lot of people how this week is going to be different. >> it's going to be more open and accessible. yesterday, we had tuns of thousands of people at a family festival celebrating labor day and working men and women, today, we start convention activities here in this hall for two days and hopefully, weather permitting, we expect it will be bank of america stadium on thursday. >> we hear about the rain and humidity. all week long. there's a piece today in one of the papers about north carolina itself. the president won by just 14,000 votes. the jobless rate there is above the national average. they just voted in an amendment against same-sex marriage contrary to the president's policies. why this state? i know it's a critical state, but it doesn't seem to be one that is an easy win this time around. >> first of all, it's never an easy win. we won last time for the first
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time in 32 years. this state for the last year, we've been neck and neck. we're within the margin of error here. we feel very good about the fact that we're competing competing state. republicans used to take north carolina for granted. not any more. you said it. their unemployment rate is down here. they are creating jobs here. we will fight for every voter. we will talk to every voter. you asked how it is different. it's a working convention. you will have people rolling up their sleeves and taking down volunteers. we're going to try to get every one of them to help us knock on doors. to give a dollar if they can, to do what they can to make sure they prevail. and that we win north carolina and the whole country. >> after watching the rnc last week, one of the big complaints is that these things have become planned parties where not a lot
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of policy is unveiled and when things are spontaneous you wind up with something like clint eastwood which was seen as a big distraction to governor romney's speech. is your intention to make this spontaneous or do you have to keep it tightly controlled? >> there is a lot of tightly scripted speeches. i'm not going to misrepresent what goes on in conventions. i will say this in the difference. you said not a lot of policy. let's look at the policy fl platform of the republican party. it calls for the south deportation of 11 million people. it's a policy platform that says let's make things so oppressive and intolerable for them that they self-deport. no country has ever done that. it's so rigid on the issue of a woman's right to choose that they even say that they would deny the morning after pill and
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that they would not allow a woman to have an abortion even in the case of rape and incest. it's a policy that's so rigid that they want to make spending cuts but they don't want to make revenues, a balanced approach. on the other hand we're going to have a platform that says look, there's a path ahead. it's a balanced path ahead. it's a plan that focuses on the economy from the middle out that spreads the responsibility to shoulder the -- the need -- the things that we need to do right now. it doesn't extend the bush tax cuts to the top 2% of america, but it does keep middle class taxes where they are today. it's one that says we have got to make investments in education and infrastructure so very different. and one that calls for kpro
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hencive immigration reform and the like. it's a very different platform and very different policies. >> will there be a surprise of any kind? >> there's always a few surprises. >> yeah. >> we'll see. >> antonio, the mayor of los angeles. >> we have been talking about facebook easterable' easterabl'. it will be selling roughly 25% in a public offering that could raise as much as $4.29 billion. pricing is scheduled for later
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in september. they are talking about september 26 as when they would actually float this offering. enormous in its size. we will see how it will do and certain certainly and valuing that mexican property at up to $17.2 billion if they do come at the top of the range but certainly worth mentioning. ubs is lead left. >> up next we will talk about gold on the program. it has been making significant come backs during the last month. we will go behind the precious metals rally. stay with us. [ male announcer ] if you believe the mayan calendar,
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>> gold is up about 8% so far this year. we will talk about where bullion will go. do you think it will break past 1700? >> have a $2,000 gold target over the next few months.
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yes, i think we will see substantial run up here. this is the time to be accumulating gold in my view. >> simply on that argument or on the idea that it could be a trade into which underperforming hedge funds could be persuaded to pile in and in a sense self-fulfilling prophesy. >> gold has been watched by investors for a long time now. we have crowded out purchases of jewelry for several years with a big run up in gold prices so it is really an investor game. they will accumulate gold if the fed prints or if the european central bank lowers rates and what have you. i do think it's an investor game and we do see a run up in prices. >> does the dollar have to fall for that to happen or could it still make gains if the dollar holds its own or rises?
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>> if the dollar rises, it is more difficult. if the fed was not to ease policy but the european central bank did indeed cut rates we could see gold prices coming back a little bit. we do think it has been communicated broadly that the fed is ready to act. if we do get a valid employment number friday, that could be the trigger. there are very few reasons to believe that the u.s. economy is going to experience a strong up turn here. there are have many signals, including what is coming ahead which is a big fiscal cliff in america. it is pretty well in line for ramping gold. >> thank you very much for joining us. thank you. >> former ohio governor ted str strickland joins us in the upcoming hour.
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in many states that 7, 8% is the ball game. >> we think qe3 is a virtual certainty. we don't think that more liquidity is going to lead to long term sustainable economic growth. we think it will make the headlines look better. >> we have got so much this week. this is a make or break week in a month that has been make or break for years. i got to tell you. i don't think the set up is as negative. the european stock market has been dead right. >> there is the opening bell as we kick off the first post labor day trading session. >> the numbers report an increase of 12.6% for the month of august. that is better than the estimate, but there is one number in particular when you dive down within the brand, the f-series pick up.
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>> the issue for supply management at 49.6 in august. we will be looking for about a 50 consensus, 49.9 if you follow the dow jones. that is versus 49.8 in the prior month. >> hope you had a great labor day weekend. a little bit of a sell-off this morning. let's get a check on the markets. the ism turns leisman, there. up sharply after getting a buy from neutral over at goldman. the firm increasing from 25 to 20. coal stocks, some of today's biggest loosers. let's get the road map for this tuesday. netflix feeling the pain after its streaming agreement expired,
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allowing exclusive movies to now be seen on amazon's streaming service as well is that a signal to sell? and the democratic national convention kicking off today. we will hear from ted strickland on today's events. >> and why twitter could be one of the biggest risks to your personal information. will we see a pull back in september? we will tell you how to play it and what you can expect from tech this fall. that's all coming up in the next hour. first we will lead with netflix. today's shares taking a dive on news that rival amazon has signed an agreement with epix cable network. mike olson is a senior researcher at piper jaffray and we are joined by mark greenburg who watches this stock more closely than anybody else. it reads like an excuse to sell
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the name. it's barely four paragraphs. how important is this? >> well, you know, one deal doesn't change the content landscape for online subscription video but this is a pretty important deal. the reason it became important is when they lost the stars content. one way to look at this is at the top 50 movies, netflix has 15 of the the movies and 11 of those 15 are fra r from e pmom . that is a lot of exclusive content that netflix had wrapped up that will now be available on amazon. >> you always want to see content costs come down but maybe not quite like this. >> when you look at the stock, what is interesting is that it is not a surprise. people should have seen this thing coming. the fact that epix was going to become non-exclusive was known a
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month or so ago. the more important thing is that this really shows how serious amazon is about content. when i talk to the analysts, they are saying basically that. they are really looking at amazon as a serious contender. i think what is really important is that amazon has proven in every single business that they are willing to go to the lowest possible margin possible to gain the share. >> yeah. and for what long term pay off? when does that all come to fruition? >> i don't think anyone knows, carl. i think the reality is that it's a competition situation. competition is increasing in the streaming space, in the online space in any space you want to look at. >> mike, i'm looking to see, amazon is not on your coverage univer universe? right? >> that's correct. >> i wonder if maybe it should be given some of the names on your list? >> i would agree with herb.
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the question mark we have had is are they going to be a legitimate competitor or are they going to mess around and add content here and there. the bottom line is they say they will spend hundreds of millions of dollars. we have said all along that they would have to spend over $1 billion in content. the epix deal is going to be expensive. netflix was paying $200 million a year on an exclusive basis. i'm sure this will cost amazon $100 million or more a year. >> they have that kind of change and not in the cushions of their couch, but the cushions of some smaller piece of furniture in the lobby. >> last quarter, reid was asked about this, the netflix ceo and he said this is not that big of a deal. he made the comment that he didn't think epix was really all that important.
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he was sttrying to spin it away from this before the event occurred. they are taking another look at the thing in the end the question is does this lead to an increase deceleration in the number of subscribers in netflix? >> while i have got you, i have got to get you on game stop because it is the biggest gainer on the s&p. i think rival firms see good things for sales. are you with them on that? >> we continue to be nervous about the wii-u launch later this year. there may be some more positive sentiment about in the note this morning. i would say in general, there is a console trade that may be something that can be done later next year as the ps 4 and the xbox 720 are talked more about but we don't think there is a console trade around the wii-u in particular. we do believe that in the second half of the year, title release for games will be stronger than
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many expect. and the valuations of a lot of the stocks have gotten to a point where they anticipate continued weakness. >> mike, herb, important name to watch today. talk to you later. time for squawk on the beat. new phones and tablets are hitting the market in september. which ones should investors pay the most attention to. john? >> yeah, tomorrow we have a new york long term nokia and microsoft. we will see new lumia phones with windows 8 operating system. this is crucial for a couple of reasons. nokia's market cap is $10.5 million and stock is down more than 90% from its highest. if nokia can't save itself with great phones we have to talk about how whether and how
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microsoft might bail nokia out. a couple of hours after that tomorrow we have got a big launch from google's motorola mobility unit. the biggest leak is that we will get phones with edge to edge displays. then you have got a slew of windows tablets coming up and we just got a new an droid tablet from sony last week. i sat down with paul jacobs to talk about the reason he sees for this unprecedented season of gadget launches. he points to apple. >> you look at google, they were really focused on software. then they buy motorola. then you look at microsoft and now they launch surface. you see amazon focus on retail and now they launch devices.
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the fact that apple has been so successful and obviously what their market cap has done has caught a lot of people's attention. >> apple not to be left out, expected to launch the new iphone next week and a smaller ipad next month. >> you have got a lot of work. also a quick programming note. be sure to tune in tomorrow for a first on cnbc interview with the head of nokia at 11:45 a.m. eastern time. let's get to the capital markets in our oped. talking some fiscal cliffs. gerry? >> good morning. i hate to talk about politics. one of the most hated phrases out there this weekend. i think it's important and let me tell you why. if in fact, i think brenda can
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bring up what is set to hit in january 2013 in terms of i don't want to call them tax increases. we all know what's going to happen in terms of income taxes, what's going to happen with dividend and capital gains taxes. here is what you have to focus on. interest rates and earnings are what drives equity prices over the long term. that's how you get values to increase in terms of stock prices. and you have to factor in what may happen beginning in january with disposable income as it relates to retail, travel and lee sure, auto industries and insurance industries. it's very important as we enter the crunch time in terms of getting back to basics and getting back-to-school. expect earnings estimates every week that goes through between now and january and we don't see
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headway or movement, expect estimates to come down dramatically. those that have checked in in terms of models that are out there in those four industries, you have seen no impact in terms of depending on where you sit. you will see a portion of your d disposable income that will be gone. it will have an impact and those are the four industries where you will see dramatic decreases in what is out there. >> bigger than defense? bigger risk to earnings forecast than in the defense industry? >> remember the disposable income impact on the individuals who drive the revenues in terms of those industries, i don't think it's factored in in terms of analysts following those
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companies. they have already started to factor in what may happen as a result of the other side, the non-revenue side. that's why it does matter. many people are sick and tired of hearing about it. it's something you have got play close attention to. one of my unofficial surveys and i asked a bunch of people, joutd have you started to factor in what this may do in terms of your own income and the answer was no. not a focus at all. no matter where you stand in terms of politics or who you plan to vote for in november. >> we will talk about this a little later. i am interested in hearing as someone who does not like following politics, when you have to, where do you go to look. we will head to charlotte, north carolina, for the latest on the dnc. ted strickland joins us live after the break. at optionsxpress we're all about options trading.
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we create easy-to-use, powerful trading tools for all. look at these streaming charts! they're totally customizable and they let you visualize what might happen next. that's genius! we knew you needed a platform that could really help you elevate your trading. so we built it. chances of making this? it's a lot easier to find out if a trade is potentially profitable. just use our trade & probability calculator and there it is. for all the reasons you trade options - from income to risk management to diversification - you'll have the tools to get it done. strategies. chains. positions. we put 'em all on one screen! could we make placing a trade any easier? mmmm...could we? around here, options are everything. yes mom, i'll place a long call to you tomorrow. i promise. open an account today and get a free 13-month eibd™ subscription when you call 1-888-280-0154 now. optionsxpress by charles schwab.
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>> the democratic party unveiled its election platform. joining us to talk some dnc is former ohio governor, ted strickland, and will speak at the convention. good to have you. >> good to be with you. thank you. >> obviously discussions pivoting before the convention gets going about whether we are better or worse off four years
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ago. it's amazing how that question never goes away. how do republicans present that without ignoring some of the things that are not going right in the economy. >> the country is better off now than it was four years ago. four years ago when barack obama became president on that cold january president, we lost over 750,000 jobs in america. we have gained jobs for 29 c consecutive months. we ought not go back to the policies that led to the recession in the first place. that's what mr. romney and mr. ryan would likely do. >> these numbers that are getting better. it has been tough to say that they are getting wett inting be. do they feel that in ohio? >> i think they do. ohio's unemployment is now lower than the national average and that is unusual for a state like ohio, a big manufacturing state.
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but our economy started coming back in ohio in 2010 really because of two things. the recovery act which enabled us to keep people on the job, police officers, firefighters, nurses and teachers and many in infrastructure. it kept us from sliding into a much deeper recession. the second thing that was important is the fact that the president saved the american auto industry. gm has announced a $200 million additional investment to build a second edition of the chevy cruise. chrysler is investing multiple millions of dollars. the supply chain which is hugely important to our 80 of 88 counties is surviving and doing well. and the auto industry is hugely important. mitt romney said let detroit go
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bankrupt and barack obama said we're not going to do this. we're going to save this industry and he did. and ohio is benefitting from that today. >> we're getting some auto sales numbers out today that are positive across the board. the way you speak makes it sound like ohio is not going to be a contest. don't you expect romney to make some impact? >> he's been there and he will be there lots of times. paul ryan will be there and they will bemoan ohio's economy and the nation's economy and they will talk about how bad things are, but in ohio we are starting to see real signs of growth. that's why president obama over a period of months now, has maintained a very slight but consistent lead in most of the polls. i think it's going to be a very close contest. but i do believe that ohio will go for barack obama. if ohio does that, then i think there is no path to victory for mitt romney? >> i think the times over the
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weekend had some of the calculations. if he loses, ohio, there are some ways to do that, but it would be a tough needle to thread. finally there were headlines out today that the number of people in this country on food stamp assistance is still at a record high. to what degree does that get acknowledged or admitted? >> we ought to acknowledge that there are still a lot of poor people in this country. i hope we talk about some of those things at the democratic convention. having watched the republican convention and much of it, i din hear a single word expressed about the lesser among us. you know, there was a celebration of what they called success, but in their eyes, success is becoming wealthy. and success for society or for a country involves a whole lot more than creating a lot of rich people. it involves shared prosperity and lifting people up who are down and out. and i believe that's what this president and this party is
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committed to doing. >> governor, appreciate your time. i know you have got a busy one. >> thank you so much for having me. >> former ohio governor, ted strickland, joining us from charlotte. >> and more on twitter after the break. now, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade. i don't have to use gas. i am probably going to the gas station about once a month. drive around town all the time doing errands and never ever have to fill up gas in the city. i very rarely put gas in my chevy volt. last time i was at a gas station
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>> the latest report from mcafee shows the biggest rise in cyber security threats in four years. we are live with all the details. tell me my twitter account is safe? >> it could be threatened. just when you finally figured out that nigerian e-mail scam, mcafee is out there detailing all of the cyber sneakiness out there. take a look at the findings. sophisticating attacks. they are not just blanketing your systems and they are using
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social media including twitter to gather information about you. and mobile devices are under attack including the an droid operating system which is the most target and interesting factoid. all new mobile malware detected was directed at the android platform. we explain what the new attacks look like. >> the cyber criminals can send you an e-mail that comes from a trusted friend, looks like it comes from a friend. it may be about a golf event. and you may open up a pdf document that looks like a tournament and what is inside the document is malicious software and causes your device to be compromised. >> all of that information that you're putting out there on facebook and twitter can now be used against you. isn't that good to know? >> thanks for that reassuring message. >> back in a moment.
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>> there you see where we are closing out on the european session. it is negative. in the middle of all of that, of course, you have switzerland. it is worth noting the underperformance. it actually tipped into recession in the second quarter of the year. in general what you are seeing around upat the moment is two
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forces in opposition. on the one hand you have that huge expectation that mario will do something to keep the euro zone together on thursday. everybody knows they are counting down to the ecb decision. the decision is deteriorating. those two forces are playing out. in advance of thursday's meeting, the diplomacy is becoming more and more intense. today in rome you have the prime minister in italy meeting the prime minister of france and they say they are on exactly the same page as to what needs to be done in europe and they would follow throw ugh.
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that they believe legally does not break the rule that you cannot support individual governments and they finances. that means there has been further buying of italian and spanish bonds moving into that so you see the yields coming down yet again. this is the two-year, as you can see, from to where we are today. again, you see more losses on the yields today as people rally into those bonds on expectation that the ecb down the line will also be buying bonds in this particular era. i mention to you the data is actually quite poor at the moment. retail sales showing the olympics and the uk actually
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fell when you thought you might get an olympics bounce. you see the manufacturing data yesterday. those manufacturing surveys again deteriorating from the 12th or 13th month. it's worth pointing out in particular on china that we closed on the shanghai kpo sit on lows that we have not seen. i keep mentioning this, this is a one-month chart. see the losses they have had as iron ore prices plunge in china. it is true when we are looking at u.s. sales that in europe there is a huge concern about voex wagon and dimeler. vw's biggest market now is china. they may be able to maintain the share but at what cost to china. this is just a one month chart.
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it is poor. >> a look. >> if you look at the trajectories completely. thank you very much, simon. oil is up more than a dollar. let's get a check on energy and oils. jackie? >> still seeing some pressure on wti along with the equieoquity markets. we got weak manufacturing numbers out of china this weekend. both of those concerns for demand. a couple of other things to consider when thinking about oil this week. you have got the ecb meeting on thursday. there is fear that that is the next hurdle. traders will be watching that.
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will the number be bad enough to trigger qe3? that's the question here. it could do it if israel does strike even if the u.s. has nothing to do with it. how quickly will we get oil and gas production up quickly in the gulf. i do want to touch on gold prices. we broke through 1700. traders telling me wie are holding here. carl, back over to you. >> thank you so much. bob is here on the first day after labor day. is volume what we were all hoping. >> sandler o'neil put them out. we had a big blow up in august. still, pretty lousy. i want to talk about the ism. a lot of people got surprised
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and got flat footed by the trading. we don't know what the bernanke put is doing. is bad news good news? everybody is confused. today we know the answer. bad news is bad news. today we had the ism come out a little below expectations. the lowest has gone back to 2009 and we went straight down on that news. so today the answer is, oh, is bad news mean more qe3? that's good? the markets go up? in theory this makes it easier to parse what may be going on on friday. if it is much better than expected, in theory based on this, the markets ought to go up. take a look at what the numbers actually said. you read the report. it's very well written and easy to read. there is a lot of comments from different sectors. the keyword is slow down. everybody mentioned a slow down. business is slow right now. these are my capitals i am
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using. guys in the machinery business said slow down in the demand for equipment. we are seeing a slowing of incoming orders. the word slow is in all of the sectors. i want to talk about the ism. while it's true it's disappointing, the numbers are better than the ism numbers everywhere else. here in the little chart is all the numbers around the world. it's true they are all showing contraction. you will notice below 50 is contraction but the u.s. is still the best house in the -- how do you describe it? a deteriorating neighborhood? china is 49, brazil is 49, japan is 47. the euro zone is at 45 right now. this is one of the reasons the u.s. stock market has been holding up so well. as you can see these numbers and i haven't shown you the trends but the numbers generally have been deteriorating. you can see what happened with
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the overall stock market. the risk off trade happened immediately. materials immediately drop. other sectors that are involved in international global trade drop dramatically, too. same pattern here with all the risk on trades. however, look elsewhere. look at, say, dividend payers. look at telecom stocks. opposite trend in the market. even if you look outside in stuff like real estate investment trusts, for example, initial drop now. you can see the market has now come back into positive territory. my key point today, bad news is bad news. the markets are taking that. we have to try to figure out, are people buying or selling based on the idea that qe 3 is coming? today people were disappointed on the the fundamentals are clearly dominating the market. >> maybe that's post jackson hole that people now focus on the bad news, ie, bad economy,
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qe3, maybe it will start to impact earnings. maybe that's sort of the mind set today. >> that's the way it should be. it's a lot easier for us to become, instead of trying to parse everything that is happening in the market in terms of qe3, talking about fundamentals is a saner way to deal with the stock market. >> thanks. in the meantime you are talking etfs this morning? >> bob talked about volume. one place where volume has actually grown over the last decade is in etf trade. i was just looking over here at post 11. here is a really interesting piece that i saw this morning. basically they claim the analysis they have done is one in four that are trading right now are essentially losing money and they would not be surprised to see them disappear. why is that the case?
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it's very simple. it cost very little money to sort of manage an etf as opposed to a mutual fund where you have got all the embedded costs, it still costs money. there is marketing. there are listing fees. so it does actually cost money once you have the etf issue. as many investors have poured money into these products, the fact that one in four are theoretically going to disappear over the next year as phone companies decide there is no viability in the keeping these things afloat, something for these people to worry about. when they close the down call, what happens? they will give you an option much like if they shut down a mutual fund. they will give you an option to move into another product. but you may have bought an etf at a certain price and now it's down in value, and you may have no choice but to liquidate as a
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realized loss. >> i was going to ask you how much capital risk is there? are we seeing etfs disappear at a large scale? >> i was not. that is why i was surprised. but this is something that the asset management companies will have to determine as they have to continue to find ways to reduce costs across the industry. maybe you shut them down because they just can't grow to the size that makes economic sense. if you stayed in it, you have unrealized capital loss. you certainly don't want to get noticed and now being told game over. >> here is what you're going out as. thank you very much. good tip. for more on the markets we want to bring in david kelly. david, good morning to you. >> glad to be here. >> we will re-wrap up some of what was said in jackson hole yesterday. this takes top billing. why is the market trading down if we are getting weak data
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which you would think makes some form of qe a little more likely? >> i think bob had it right. the reason is if you look at what ben bernanke said, he made it clear that unless we see a precipitous drop in the unemployment rate, that we will, in fact, see further rolling qe and also some presumably some statement about not raising the federal funds rate for a longer period of time. so i think what the fed is going to do is kind of baked in at this stage. you have weaker economic numbers, it does not have much implication for what the fed will do. the fed will do something neck week. i think what the fed will do is already baked in. >> you think they basically made up their minds? but you don't think it will be as effective or effective at all? is it going to be net destructive? >> i don't think it will be effective at all. if you looked at ben bernanke's speech, he was making a spirited
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defense that qe 1 and 2 actually added jobs and growth. i don't believe that case is made. i don't think you can tell how the federal reserve's model works. we have had more monetary fiscal stimulus the last two to three years than has ever happened in the history of the united states. i don't want more stimulus from the federal reserve but i think we're going to get it. >> we have got to keep an eye on the ecb this week. it looks like politically, he has consolidated power. how important is that? >> i think where we are right now is they can't agree among themselves but they are agreeing to let mario droggy and the ecb do whatever is necessary to prevent a financial break down.
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he has still got the court ruling up next week. we have got the greek problems and the spanish problems. it will be a long, long time. i think mario draghi has a mandate to make sure it does not get any sicker. >> we have got all week. see you again soon. when we come back, some technology coming out on top in august. gained almost 5%. does this mean we're in for a september tech swoon? we will talk about that after the break. [ male announcer ] let's say you need to take care of legal matters.
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>> china fears? are they overblown? why he thinks a hard landing is not happening regardless of the manufacturing data out over the weekend. europe on sale. why the man who runs over $600
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billion says he is buying, listen to this, spain's bonds. carl? we will see you at the top of the hour. >> okay. i will be interested to listen to that. take a look at facebook, $17.58 is the intraday low. may 18, you don't need to be reminded,was the ipo date. it is barely league as they say on the street today. for more than a decade on average, this has been one of the biggest losers in september. could the parade of new product announcements ahead of the iphone 5 change the september fortunes. scott and dennis are with us. guys, good morning to both of you. >> good to see you carl. >> facebook is one of your three buys right now. why? >> we have a number of strong buy and buy opinions. we have three strong buy opinions in the internet sector. we upgraded facebook just a
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couple of weeks ago. in may we were out before the ipo suggesting there were a lot of risks and the valuation looked stretch. only recently have we gone positive. the company is more focused onmontization of mobile. we think they are executing better than i think people would have expected in some of the areas. and most importantly the valuation has come in pretty substantially. so we see an attractive evaluation right now. >> dennis, that may be true. we don't know. what matters more is whether investors believe that story. >> i don't know what's up with that. i don't know what the price recommendation was a few weeks ago but here we are at $18. that doesn't suggest that now is not the best time to buy facebook. right now they have shown themselves unable to really
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execute. and so the markets are responding accordingly. i think it is guilty until proven innocent. >> dennis, i know you're not an analyst, but given the wave of news, is the street generally talking about one name in particular? >> dare we mention it? can we say apple? we have to say apple. i was running a thought experiment. you have been in apple stores probably in new york and around the world. it is a mob scene. if you were to open up a microsoft nokia store right next to the apple store, how much traffic? the thought experiment says there would not be that much there. this holiday season from september to the beginning of 2013 is when we see the final eradication of one of the big players in the mobile space, either nokia or rim. this is make or break for both companies. both of them cannot survive.
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>> scott, we should mention apple, also one of your buys. strong buys are earthlink, buy do and yahoo!. that story is going to get a lot more interesting soon. >> there is no question that there are a lot of tuopportunits here. september has not been great from a stock performance standpoint but tech often proves to be good. that is one of the reasons that our team likes the sector. in terms of some of the names you mentioned. we were in silicon valley visiting last week. there is a lot going on at yahoo!. even though the company has not been a place where you see a lot of appreciation in the stock over the last couple of years, we have reason to be optimistic. whether it's because of a new ceo or the closing of the a ali baba transaction.
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if you think of buy do, that stock has come in over the last couple of weeks. 80% of the chinese search market. that is where the chinese search market is compared to where the u.s. is now. >> carl? >> denis, i wish i had time. straight ahead yrks a night was a big story in jackson hole. we will explain after the break.
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rr r. >> this may be a short week on wall street but there is a lot of economic data on tap. the jobs number coming up on friday. our senior economics reporter is back from jackson hole talking about what he expects the fed to do next week. steve, lay it on us. >> i think there is a good case to be made that the federal reserve will be aki iacting nex week. i want to show you three reasons why i think that's going to happen. the first is the minutes of the meeting were pretty clear. we will show you the important phrase out of that. the bernanke speech and the data. even more importantly, is there anything the data could say? i think this is the question the fed is asking itself that would make a change in how they see
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the forecast for the economy. i think they are still seeing the economy being weak, one and a half, maybe two and a half spe percent and that's not going to be enough to take down the unemployment rate. take a look at the speech here, important phrase from the minutes. first, many members judge that additional monetary accommodation would likely be warranted. the second thing is the comment from bernanke that was getting a lot of talk where he used the word grave. the stagnation of the labor market is of grave concern. those kind of words are the kind of words that make you think that the fed is going to act, carl. >> how about the ecb, steve. >> this is a strtrickier one. they are meeting before the court will rule. my guess is we will hear a little bit more from the ecb on
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thursday but not the whole thing. we will not get a term seed but more detail. i wouldn't wait for every single detail. i think that will happen after the court rules. >> i like that, steve, we have an interesting week set up. we will get final thoughts after the break. i bought the car because i could eliminate gas from my budget. i don't spend money on gasoline. it's been 4,000 miles since my last trip to the gas station. it's pretty great. i get a bunch of kids waving at me... giving me the thumbs up. it's always a gratifying experience. it makes me feel good about my car. i absolutely love my chevy volt. ♪
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