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tv   Squawk on the Street  CNBC  September 27, 2012 9:00am-12:00pm EDT

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before a week-long holiday next week. >> so our road map starts this morning with the markets, down five straight days for the s&p 500. the longest losing streak since july. the nasdaq at a three-week low, only two trading days left this quarter. spain likely to get its share of attention today as the prime minister unveils a 2013 budget, trying to avoid the embarrassment of having the ecb impose conditions on any bailout request. so does his plan have any credibility? and today is google's 14th birthday. what better present to give the tech giant than a new record high share price and increasing chatter it's gained a leg up on archrival apple. first up, futures rising on the backs of gains from china and europe as the u.s. markets try to snap some losing streaks including the s&p, which is down for five straight sessions. wall street in the process of digesting all that data from this morning. the final reading of second quarter gdp showing weaker than expected growth of 1.25. it's being rounded up to 1.3. meantime, durables in august
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down 13.2. that is twice the drop that wall street was expecting. and then jobless claims, of course, plunging to a two-month low, down 26,000. interesting data. somebody pointed out at mkm that boeing had an order for a single plane in the month of august versus 260 in july. so unless you strip out transports, it's a little volatile on durables today. >> wow. >> unclear on how much of that is europe as well and what impact that's having. certainly this is a negative. and as you pointed out, much worse than had been anticipated, how much the market's going to digest, they're taking into account this morning, unclear. and contrast that with at least a little better luck on the claims. >> right. and if there is some sort of move out of china, which many are -- at least talking about this morning, not necessarily expecting, but talking about this morning, that edge could be lifted a little bit because it will help, obviously, the european picture as well as the u.s. picture if there is some sort of stimulus. the back story to this is is that china has acted in the past ahead of the golden week holiday
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allowing the stock market to remain closed and then open a week later, essentially to react then. but this could mean good things for markets around the world. >> we'll see. it's been tough to pin your hopes on what china may or may not do in the past. as we said, a lot of key data. u.s. economist, chief u.s. economist, because there are a lot of them at deutsche bank and cnbc contributor, joe, good morning. >> i mow who your favorite is, carl. i'm not going to say anything. >> what strikes you, of all the numbers we're looking at today, what's important? >> i would say probably the claims numbers just because they're the most timely and they suggest the labor market's not great, but it's hanging in reasonably okay like 100,000ish type of jobs. but the numbers aren't great. things look very mixed, at best, and it looks like europe definitely hurt capital spending. certainly impacted aircraft. and it's impacting capital spending. so there is -- it's a very skittish, very fragile environment. >> yeah.
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obviously, the q2 gdp numbers are old, a little dusty here, but they do not show any acceleration which is what we're trying to find clues to in the back half of the of the year. >> i think what happened is europe had a much bigger effect on business sentiment than many people thought. it's been dampening exports and capital spending which is what the durables reflect. as we moved through the summer and stabilized on europe, normally we might get some acceleration. the problem frou is you have the fiscal cliff and the election. people now have yet another excuse not to do anything. had europe not bled into the summer as long as it did, maybe you'd have gotten that spark in activity. but right now you just don't have it. >> are you taking a lot of solace in what housing's done, what confidence is doing? >> yeah, the housing numbers i think are great. that's one of the reasons the economy hasn't been strong to this point in the cycle. housing is keeping us from really stuttering on growth. we need more in housing, all that free cash flow in the corporate sector to be put to more productive use, investing in capital and labor. there's a real need for it,
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carl, because the capital stock in the economy is basically depreciating. we're operating with old depleted capital. >> housing is a much smaller portion. the context of this is we need a much bigger engine for this economy this time around. >> we do. but partly most of the housing is so low because it came from a high level and then a collapse. if you look at the fed flow of funds data, you've had two record quarters of growth because of higher home prices. but we need more jobs. so housing is helping, the consumer is still holding in. we need more jobs. it's got to come from the business side. >> what gives you the confidence that europe has stabilized? of course, we look at this durable goods number, we know that's partially because of european weakness, but some would say stable, really? >> it's taking tail risk out. ecb's done a great job and they've taken some of that real armageddon fear out of the market. clearly there are a lot of political decisions that need to be made and stable can just be temporary.
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i don't want to make this like it's permanent. our view at deutsche bank is muddle through and make grinding improvement. >> we talk about global growth overall. we haven't even mentioned kline that, unclear exactly where things are going there. and india has had political issues lately in an economy that has ground to almost to a halt. i don't want to go that fault. >> right. >> what about those in terms of impacting back here in the u.s.? >> well, the good news is historically -- and i know this has not been a normal environment -- but historically the u.s. has never been led into a recession from some other countries slipping. we're a closed economy. export's only 12% of gdp. even though global growth is weakening and it's going to hurt the u.s. on the export side, really we're a domestic-based economy. so if corporate america gets some more confidence, not necessarily in asia or elsewhere, just in the u.s. with pentd-up demand coming from the consumer, buying durable goods, things of that sort, the economy can grow at 3% or 4%, but we're waiting for that spark. to your point about asia, this is just another excuse for companies to sit and wait how
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things play out. >> do we set up, then, joe the wait-and-see period until this fiscal cliff issue is resolved and then it unleashed pent-up demand? >> possibly. depending on how the fiscal cliff is resolved, and there's different scenarios that could come, depending upon the election outcome. do you get a quick deal or if it's a close race, there's no clear mandate, then this could drag on maybe to christmas, and that's bad for markets. >> interesting. i think it's jerry seib has a piece in "the journal" trying to handicap the chances of the cliff being solved or not. >> that's what i was thinking as i was saying it. >> some of the brightest minds in washington who watch this stuff all the time say i just don't know. >> in meetings i have with ceos of big industrial companies, they say, look, we're just going to wait inspect nobody wants to take the chance in doing something and look foolish afterward. sitting and waiting and not doing anything is bad for growth. there's no transactions. >> is that going to show up in the ism, in manufacturing the most, i assume? >> yes. >> it's auto. >> investors had to follow any one series, i'd say it's the ism
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because it covers manufacturing. it went sub-50 in june with fear of greece and europe. it stayed sub-50 the next couple months. it's probably going to only be at 50, if that, in september. so yes, it's got orders, export orders, those are things you watch. my guess is they're going to stay pretty lousy. >> i'm guessing your guess for jobs, those september jobs, is going to be tepid again. >> i would think so. look, these numbers get revised a ton. last september we had 100,000, up to 200,000. my guess is they'll print something around 100,000 and then six months from now we might see it a lot different. yes, the job market is showing grinding improvement. >> i notice your year-end target is 7.9. getting below 8 would be a front-page broad mass media kind of story. >> it would, carl, but the numbers really aren't great. participation fell to its lowest since september of '81. so a 3.9 rate isn't great if people aren't looking for work,
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and that's what we've seen recently. i wouldn't make a whole lot of great news on a 7.9 rate. >> although you do see a rally in the ten-year if you have a 2% yield. >> the fed is taking $85 billion ten-year equivalents out of the market. basically i don't want to say in period of time tu i perpetuity. >> speaking of year-end target, i would imagine there's a lot of balls in the air in regards to push and pulls in the economy. we've heard caterpillar talking about a 2015 target and reducing a 2015 target. from your standpoint, do you have any grasp on what the economy will look like in 2015? >> no. it's absurd. and we don't know, as economists, it's hard to guess six months. i think it's absurd when the chairman probably isn't even there. so no, there's no clarity over the next few quarters. to project three years, i know that some companies have to do
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it for planning, but in terms of does it mean anything? no. >> joe, thanks for coming in. on the global front, european markets are rising as we wait for spain to present its 2013 budget featuring a series of economic forms and austerity measures. overnight we saw asian markets rally. the shanghai composite up sharply on hopes the chinese authorities will take steps to bolster their nation's slowing growth. and of course, this comes on the heels of the weekly pvoc liquidity injection which reached a record. again, there is some thought there could be massive stimulus measure or some kind of stimulus measure unveiled ahead of this golden week holiday which kicks off next week. >> then there's remoy. looking potentially at tax hikes, at changing the way people can retire over there, potential wage freezes. but anybody who's looking to see if the plan is credible says you've got to attack pensions, and that's just going to feed the mood that we saw in those protests this week. >> we've seen protests this week, we've seen certain of the states significant protests. of course, many of them have
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already received aid. there was an 18 billion euro aid package available to them. you've already increased the value-added tax significantly over there. there's an interesting story today in "the new york times." about carrots being sold as opposed to tickets because they are not taxed in the same way. it gets back to this balance, carl, of austerity growth and how much you can politically get done and kind of meet your master's demands. >> yes. >> that being the rest of europe, particularly germany without fomenting true public unrest. >> fresh data on spain, bank deposits down again. i think the lowest level since 2008. you couple that with just the images of people eating out of dumpsters on the cover of "the times" this week. it's tough times. that's understating it to a very large degree. >> 50% youth unemployment, over 25% overall unemployment. it's very, very difficult. and this is the key question for so much of europe, in particular spain. let's keep a close eye on that ten-year spanish yield because it did get close to that 6% mark again. not 7%, but nonetheless,
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something the market certainly has not lost its focus on. let's head across the pond on spain. steve sedgwick is in madrid with the very latest. steve. >> reporter: yeah, melissa, thanks very much. a lot of the points you guys just mentioned, very true. we've got an economy in recession, high employment, a vicious housing market which unlike the u.s., which is stabilizing as we just heard, it's still got a couple years till we get to the bottom. we're only down about 25%, some say it needs to be double that before we see stability. the banking crisis, you mentioned as well, and also i think what is the key point as well, task masters. there are task masters everywhere. they're bond markets who want to see vicious reform in austerity if investors are going to buy those bonds. northern europeans, germans and brussels who want to see strenuous action from the government in order to backstop the government with potentially buying of its bonds. herein lies the problem. this is a country that has tried austerity. it's not like greece that's been dragging its feet.
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lehoy has enacted over 60 billion euros' worth of reforms, over 2 1/2 years to 2014. and the problem is, those reforms are making things worse. it's that whole contradiction is austerity driving growth out of the country, or actually is it creating conditions for investors to get more confidence? and then you get the protests from the people on the street. i'm actually standing on the exact point just outside where parliament is barricaded. you can see behind me just right at that point where over the last two nights, we've seen police charges, plastic bullets being fired as well, protesters getting violent because they're getting very frustrated about the really tough economic conditions which they don't see anything getting better. but i do want to leave this here on a very positive note. and there is one positive thing going on. and that is exports, and that is competitiveness. now, they have, as you said, huge unemployment. around about 25%. but that has meant that we're almost -- almost at the levels of competitiveness we were before the euro, i.e. 1998.
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so that is one thing which is potentially positive. as indeed is the export picture. believe it or not, the trough for exports was at the start of 2009. we're now 26% higher than that. and we're only a few percent away from the levels in 2007. we're actually beating by some parameters the best export level ever. while the public sector remains in a mire, rejoy remains in a fix. that for me is an olive branch in what is a very gloomy environment. back to you. >> steve, before we let you go, is there a time line as to when rejoy will give this budget briefing? >> reporter: yeah, carl, it was an hour and a half ago. we were expecting the press conference, 1330 central european time. by my reckoning it's now quarter past 3:00 local time, and we haven't heard a whisper. this is the spanish way of doing things, i'm afraid. >> all right. we'll take a siesta and then come back and check in with you later. steve sedgwick on the streets of
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madrid there as we wait for rejoy's briefing. meanwhile, google has lots to celebrate on what is the internet giant's 14th birthday. the stock is trading near all-time highs and getting a lift in the premarket as evercore raised its number. there's been a lot of these mid-800 targets being lifted here on google in the past few days. >> on general the sentiment on google has really gotten much better. >> it's incredible. >> as the stock has managed its climb and coincidence or maybe not it happens at a time when apple has been having trouble trading off the back of the iphone 5 sales over the weekend. part of the evercore call is that google is changing its free product search listings into one where it only spits out paid product listings. and that could actually help google tremendously. so he's raising the estimates for paid click growth to 35%. and he's saying despite the 35% increase and the stock we've
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seen over the past three months, can you imagine 35% higher in three months? the stock is still attractively valued. those are the arguments there. but google shares are trading higher in the premarket session. and just for fun, check on apple shares. apple shares are still treading water. >> 14 years, man. you know, it is still one of those great stories, only in america, to children of immigrants, stanford, of course, started, what, 1998. goes public a number of years later. here we are $250 billion market value, tens of thousands of employees. not just here in the u.s. but around the world as well. >> and then just the ability to drive a zeitgeist. you go to the google home page today. there's a little chocolate cake with 14 candles. it morphs into the word google. that's the kind of thing that billions of people talk about when they decide they want them to talk about something. it's amazing. >> and just a quick note on apple here, we should note that ubs's steve millonovich took down his forecast in terms of
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units sold for the iphone 5. he's citing supply constraints. we'll talk to him later. that could be one reason why the stock is seeing headwinds in trading even though we are expecting a higher open. >> we'll also talk to david about this jeffries sell on hp. we're all over the tech landscape. we'll meet the godfather of the samsung galaxy, the ceo of a company launching a new app. parents and teenagers should take notice. also ahead, the ugs analyst cutting his outlook for iphone shipments. i know one of our producers went in the other day to get a 5. the first she can get it is october 19th, i believe. >> really? >> what is at stake for apple? one more look at futures getting a little more back after five straight days down for the s&p. "squawk on the street" live from post 9 is back when we return. with the fidelity stock screener, you can try strategies from independent experts and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies
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♪ let me tell you as we've been reporting this week, a shortage of bacon is on the way. and that means you'll soon have to start paying more for that crispy goodness as well as other pork products. so that brings us to this morning's "squawk on the tweet." besides pork, what else should you be hoarding right now and why? tweet us @cnbcsquawksc. i'm sure we'll get a lot of creative answers there. i can't even imagine. >> and not just gold and guns, i'm sure. >> yeah. >> i'm sure there's a lot of
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other things. it can be an immaterial object, shares of something. >> iphone 5s. >> those are hard to hoard. >> that will be in very short supply. >> r.i.m. and nike. you've got your work cut out for you tonight. >> lots of conference calls to cover. i heard about what art cashin had to say. wait till you hear what he'll tell us on the other side of this break. and danny meyer is known for his upscale burger joint. we'll ask him how he's coping with the bacon shortage. let's look at futures. we are looking at a higher open across the board. stay tuned. hi. i'm henry winkler.
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♪ just about six minutes before the bell rings here on wall street. let's bring in art cashin. good to have you. it seems like this rally we've seen in futures and around the world is basically from china. would you agree? or do you think there's something in spain to be hopeful about? >> no, i think that's a good call. i think the idea that chinese were going to do extensive stimulus in here has kind of perked everything up. of course, you've got to remember that their shanghai market had gone to a multiyear low. so this is clearly another bailout attempt. so we'll have to see how long the medication holds. we've been down several sessions in a row. i will tell you i was somewhat amazed that the data at 8:30
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didn't put a bigger dent than this rally. those numbers were almost recessionary. >> the durable goods you're talking about? >> durable goods and the gdp revision. >> sure. 1.25, basically, 1.3. >> yeah. >> well, why not? why wouldn't we have seen more perhaps of a negative response, in your opinion? >> well, i think, again, there's a hopeful look over to europe. they want to see how things are going to work out with spain. and, of course, this carryover, how big and how aggressive will the chinese stimulus be with new leadership coming in. they want to be aggressive. >> when it comes to spain, would it actually be a good thing for the markets in the end for the borrowing costs to remain very high, in other words, for the yields to go and stay above 6% in spain? because that would actually trigger them for a bailout? i mean, is what is bad actually what is good for the markets in the end? >> well, you've got to remember that what you're looking at is something we know a great deal about here, and that's politics. i mean, if you were mr. rajoy
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and he said all you have to do is come with your hat in hand and agree to an austerity program, you know that your political life will be over in a nanosecond. so he's reluctant to call for a bailout. and it's going to ultimately happen. you know, they're trying to pull the country apart. there's a lot to be watched here. >> yeah. meanwhile, moody's is out, again, sort of with the spector of a downgrade which would put into motion a series of potentially unfortunate events regarding spain, right, art? do you feel like we're on some sort of precipice in that regard? >> yeah, spain, and to some degree even italy, being able to finance your government is becoming more and more difficult. and they're going to get pushed. and the other thing that we've stopped talking about, unfortunately, but the money in the spanish banks is moving out. you're ready for a borderline run on the banks, and that will take it out of the hands of the leadership, and then nobody. >> i'm glad you mentioned that. we've mentioned it many times here. it is the most important single factor to watch. >> art, good to see you.
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meantime, we're all waiting for research in motion's earnings after the bell. we'll get you ahead of the curve on that, find out what you should look for. also ahead, the ubs analyst who is cutting his shipment outlook for iphones. and we'll talk live to peter thiel. "the odd couple" theme
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and we'll throw in up to $600 when you open an account. there we go, opening bells ring on a thursday morning here at the big board. over at the nasdaq, state department assistant secretary does the honors there. we should note as far as cit, maria bartiromo will be sitting down with john thain on "the closing bell." lots of questions about whether the company is for sale, for instance. >> that's a committkey question sure he won't be answering. take a look where we're standing on the markets. interesting move, apple actually trading to the down side today. so this would be, i believe, the
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fourth straight day of losses for shares of apple. down just a quarter of a percent, but steve milonovich cutting again the december quarter iphone shipment estimates down to 38 million. he said that upside is very unlikely love 40 million. and he is citing specifically the suppliers. we've talked about this a lot. but for the iphone 5, they switched to the in-cell display technology, and it's more complicated to make. and so there are some bottlenecks there. >> he also some bragging rights. he was cautious i think going into the launch. >> yes. >> shares down about 5%, i think, since the launch of the iphone 5. and now the "new york post," did you see this today, has a story that the samsung ad that ran during the football game has three times as many views on youtube at least as the apple ad. 17 million versus about 5 million. just sort of feeding the creeping notion that apple does not have all the answers, right? that some of their rivals might have something to say about what
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this market does. >> it's a good ad. and to that point, of course, about all the answers, it doesn't appear to be impacting potential sales of the iphone 5. but that continued controversy or lack of performance of the maps app is certainly something as well. that kind of keeps that front and center in terms of hey, you know what? they don't have it all figured out. david pope today in "the new york times" writing again about its failure in terms of using that. >> right. meanwhile, r.i.m. is tonight. >> massive gains in r.i.m. today. >> good subscription numbers. everybody's talking about two things, the average selling price, how much are they having to cut the cost of the union it'd unit to keep or gain share. >> $2.2 billion as of june second. but the question is how much will they have by the end of 2013? citigroup is estimating that cash will go down by about 22% by the end of 2013. so, i mean, the question is yes, they can boost their subscriber base, and that's what theo said at the developer conference
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earlier. he said 80 million total subscribers up from 2 million, up by 2 million, excuse me, from may. that's great. but if they're losing money, it doesn't matter if they're getting subscribers, hence the attention that will be paid to asp's average selling prices and so on. that will be key tonight. >> we should point out revenue estimates look to be down 40% year on year. i mean, their top line is getting crushed. >> yeah. >> and as thorston was asked about the launch of the 10, quote, we're not sleeping much. you would hope not. because there's a lot of work to be done. >> there certainly is. we should mention a couple of research notes this morning that are having opposite impacts, or impacts on two stocks, one down, that would be hewlett-packard, shares down about 1.7%. i'm sorry, 1.5%. and then yahoo!'s up. hewlett-packard downgraded to underperform. they're focused on what they believe will be a real effort by the company to get involved in the mobile market, both with the smartphone and with tablets.
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they cite a couple of comments from ceo meg whitman to that effect. they also krooilt a "wall street journal" article noting that the company's reorganized and opened new design centers. we'll see if that is a key part of that. that does appear to be one of the keys to their downgrade saying others have tried and failed. will they yet again try and fail? remember the palm acquisition did not go well at all, and they've already stopped the tablet a couple years back. >> the time line for hewlett-packard, this is all ahead of the analysts meeting. a lot of people are expecting a lot from whitman next week. there have been interesting notes, brian marshall of isi saying hewlett-packard should break into two. the growth company being more the enterprise, the servers and then the cash company being the printer and personal systems unit. who knows? but it's interesting because all of this is happening as hp stocks nears 52-week lows if not
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multiyear lows. the shortage has increased vastly over the past year. 3.7% of shares outstanding are short right now, but you compare that to just about 1.5% a year ago. >> yeah. >> so it's more than doubled. >> i think there are many people who believe this is a very important, if not crucial, year for the company. and kind of beginning with the targets that will be put out there on october 3rd, as we expect by meg whitman in terms of what they can expect financially. but this is a crucial year for the company. and some would say a make-or-break year in terms of it will assure or go down the other road. goldman this time on yahoo! they have not had it rated for a while, reinstating it with a buy in this case. price target at 22. few things, uncertainty regarding ali baba has been reduced. they have a well-known ceo. their japan stake has had a good appreciation since may. i love this quote. they say they got hundreds of millions of users, big financial resources. quote, we place little financial
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value on that optionality. but it does exist. which is really the only call you can make on yahoo! right now. they've got a lot of things going for them. >> you mentioned the stakes going for them. ali baba, 20%, much of it's coming back, or the yahoo! japan stake or cash on hand and then you look at the core business for nothing, 83 cents a share. the multiple, it's currently being down by the market, gets you to about $1.70. goldman says it's worth about six times, bull wee see. they also say hey, this company suffered mismanagement, for example ebay which has had a nice turnaround. easy to argue competitive industry changes. evolution of google, growth of facebook are more severe. so their best case, as you said, carl, assumes current trajectory the business continues. they're not saying a lot positive but they're looking at the numbers. >> earlier this week we were talking about how sleepy it's
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been on the m&a front. maybe maybe it could be m&a thursday. >> sleepy. >> you mentioned the word, how sleepy it's been. >> what carl was joking about and actually the two come together. it is thursday, of course. and tempur pedic buy sealy. >> over $1 billion. i think, carl, when we were talking earlier, you mentioned the technological challenges they may face in putting these two companies together. >> well, i just want to see them keep one of the best ticker symbols, zz for sealy. the ceo will remain there. he'll report to the tempur pedic guy. >> it's the cost savings, which each of them have been roiling over the past couple quarters. more buying power and resulting in cost savings by the third year. accretive in the first full year of operations. >> another really quiet week
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when it comes to mergers and acquisitions, or to use your word -- >> sleepy. >> sonorous. >> meanwhile, we have a big announceme announcement, he is back after a long absence, too long, bob pisani returns to the floor. good morning, bob. how you been? >> oh, carl, ten days in spain, let me tell you, what a time i had, three days in bass country in san sebastian. you shouldn't miss that, folks. it's one of the most beautiful towns i've ever been in. and a week in barcelona, the capital, they are completely obsessed in barcelona with secessionist fever. forget about mariano rajoy, he's a nobody. the kingmaker in barcelona, all anybody's talking about, all that's on the front pages of the newspaper is this guy mas, the premier of catalonia which is the biggest province in spain, capital of which is barcelona. so they're all obsessed with this idea of secession.
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suddenly this guy, mas, who was a moderate for a long, long time has turned into a guy who has said okay, we've had enough with sending all of our money. we're the richest province of spain. we've had enough with sending all our money to madrid. we don't get enough money back. of course, it's populist rhetoric, but they are swallowing it hook, line and sinker. he was there for the barcelona music festival, all music, all plays, everybody's waving catalan flags, singing songs, marching down the street with catalan huge gigantic puppets and costumes. it's all about catalonia. does this make any sense? of course not. rajoy, meantime, is appeaplecti because he's dealing with a budget crisis. he said we can't secede. mr. mas yesterday comes out, this is exactly what he says. we will proceed with accordance
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of the law. if not, we'll do it anyhow. i'm serious, that's exactly what he says. the problem is there's a lot of populist rhetoric that's complicating things very much and making things very difficult right now. by the way, steve sedgwick, our man in madrid who was just on talking about 25% unemployment in spain. i asked everyone i knew about this statistic because it's a very famous number, nobody believes it. everyone knows that everyone says it's 25%, but no one believes it because there is an enormous black market in spain, many, many people are getting paid under the table and are not reporting the money. now, i don't know all about this, but i can tell you no spaniard i talked to did not believe that there really was 25% unemployment. they said there would be revolution in the street, not just demonstration if there was. i'll give you an example. i paid money for an apartment for one week in barcelona. my landlord asked to get paid in cash, in euros, $2100 in cash i had to hand over. no checks. thank you very much. who knows what they do with that, but you get my point.
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see what's going on there? don't believe 25% unemployment. how about this rally? everybody's been in a bad mood. i go away. the s&p at 1460. listen, we're 2% off of the highs that we hit. 4 1/2-year highs. i left ten days ago, we were at near 4 1/2-year highs. now we're 2% off of that. the s&p 500 is up 2.4% in the month of september. i know we've had a couple of down days, but i don't know, i don't get this rhetoric that somehow the rally is necessarily over. i'd like a little more carefully at statistics. guys, good to be back. >> good to have you back, bob. good to see you. rick santelli is at the cme group in chicago. good morning, rick. >> reporter: good morning, melissa lee. i tell you what, we could say one thing with absolute certainty. if you looked at durable goods and gdp, they were not good data points. arguably, the initial jobless claim, even though it's still in the zone, moved lower. that wasn't a bad piece of data. but how did the markets react?
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you know, bob was talking about this rally as unloved. no, it isn't unloved. it's a bit misunderstood for the following reason. after those horrible data points, what should markets do? interest rates should be going down. look at intraday chart of tens. at 8:30 eastern it didn't go down but not to negative territory and it's back. yields are higher. the boon, similar with a caveat. yes, its yield went down, under net change for the day. that made sense, but boom, it's back to unchanged. you can see the similar pattern. so why is it? well, it's because of the next chart. here's the s&p futures chart that was open at 8:30 eastern. it trades down to around 1431.90. it's higher now. that was still much up on the day. so the fundamentals, who cares about fundamentals? the equity markets based on spain's budget got a bit of a horsepower thrust, and they've stayed up ever since. they don't care about fundamentals. that's at the epicenter of why everybody's so mistrusting of
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the rally. carl, back to you. >> well said, rick. talk to you in a little bit. the latest moves out of energy. what a day it was yesterday. sharon epperson is at the nymex for us. good morning. >> reporter: good morning, carl. looks like it's going to be another busy day in the commodities market. we have speculation we may see more stimulus out of china helping support many commodities. oil and gold higher. gold near that 1770 level. keep in mind, the south african mining issues that were plaguing the industry are also plaguing gold, that also helping support gold prices. in terms of the oil price, we're also watching what is happening here in new york with the u.n. with israeli prime minister speaking about iran, today set to really lay out whether or not there should be a firm deadline here in terms of iran's nuclear ambitions. and we're also watching, of course, what's happening technically, brent crude above the 200-day moving average earlier in the session and wti bouncing back after falling below $90 a barrel in previous session.
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but the standout commodity most certainly is gasoline. gasoline futures continue to soar again today. refinery issues are really what has caused this market to explode here as we had an explosion at a refinery in the previous session in canada. that, of course, has now been back to normal operations. but there's still a great deal of concern about tight fuel supply. and that has really helped the front-month contract here for gasoline. we're near that $3.20 a gallon level, and that is going to influence down the road the prices at the pump. back to you. >> thank you, sharon. it's not something apple wants to hear, ubs reducing shipments for the iphone. steve is making the call, and he is up next. not everyone is down on tech. for its 14th birthday, google gets a new price target. we'll talk to that analyst, too. take a look at this morning's "early movers." we're back in a moment. customer erin swenson bought from us online today.
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this week for their worst week in 17 weeks. >> since july. since july. >> it has been a while. our biggest gainer, bank of america, which could use some good news. the story in "the journal" today about the referee, the replacement referee, who gave seattle that touchdown, made that famously disputed call is actually a banker for bank of america. for a lot of those guys, thank goodness they reached this tentative agreement. but for a lot of the guys who were replacements, this was not their living. this was what they do on the side. not their full-time job. >> i hope for his sake he's not a trader. probably booed off the trading floor. traders can be really rough, as we know. >> glen shore, analyst at namura who is very well followed talks about potential coming layoffs, compensation decreases at some of the key investment banks as a result of their need to try to figure out a way to return more to shareholders given they can't lever up. we are getting to that season where we may see another round of layoffs which haven't been as significant as some might have
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anticipated for the likes of -- not so much b of a, but some of the other big global investment banks. >> "the journal" also has a piece on robert mcdonald of proctor & gamble, another troubled dow component, has been losing share, some botched product launches. bill ackman, in trouble of losing his job. >> i was not aware of it, mcdonald was there, so was mcnerney. >> independent director. >> independent director. they are backing mcdonald, though, it was clear from the story and his effort to not just cut costs but figure out some of the problems they had, whether it be in developing markets where they were not as present as they should have been or dealing with some of the price points they were inhackebiting t seemed to preclude some shoppers from briing so many products.
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by the way, that stock up sharply since ackman took that position. how can be an activist even though it's a very small percentage. >> you see it here. when we come back, we'll meet the man many call the peter thiel of latin america. later, tweet time on the bacon shortage. beside pork, what else should you be hoarding right now and why? this is apparently very serious. we're going to talk to danny meyer later this morning about the future of bacon in this country. bob...
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let's get to simon hobbs. see what's coming up at 10:00. morning, simon. >> good morning, carl. when you stay in a hotel, you should tip the maid every day and leave the money under the pillow. the ultimate guide to tipping. in the next hour of the program. obviously waiting for the news conference in spain. we'll have the latest on that. and also money to be made on google, evercore on google's. that and more. >> under the pillow, really? wow! >> in the corridor because otherwise other people may get
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it that you don't want to get it. if you leave it on the dress, they may not know it's them. it's complicated. >> see you later. meantime, apple trading slightly lower, down 0.4%. many are still left waiting for their shipment. will the slowdown in delivery mean a slowdown for the stock? steve is a technology strategist at ubs, a buy rating on apple and a $780 price target which steve is on the low end of street consensus, actually. and this morning you were voicing some concerns based on channel checks with skyworks and some others about the supply of components. and you say that will actually decrease the number of units sold in the zm quadecember quar. >> well, that's right. my colleagues and i believe there may be constraints on the iphone 5 near term. we're looking for 38 million phones to be shipped in the december quarter. we were at 44 million. our sense is that probably due to the touch display, it's going to be difficult for apple to ship more than, say, 40 million or so. so we're taking a built of a
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conservative attack here. it's very much a supply issue. it's not a demand issue. we continue to think the stock should rise over the next 12 months. >> we have seen the stock decline ever since the first weekend of sales of iphone 5 as there are more concerns that perhaps they're not able to meet the demand out there. do you think that the stock has accurately reflected to date at around $662 and change this growing realization that perhaps there aren't enough? >> yeah, i believe so. you know, when you look back at the previous iphone introductions, the stock actually didn't do much before and just after the introduction. the stock this time, though, did move up fairly aggressively into the announcement. i think this one was telegraphed extremely well. there weren't any big surprises since a lot of the blogs got the features right. it's easy to say there wasn't anything dramatically new. i don't know if you've held one, but the lightness, the feel, the quality of it, it still is a special phone. we think over time that the apple hegemony is going to
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continue to increase. and you do want to own the stock. >> it is a pretty amazing product. you reduced unit estimates for the december quarter. how big of a concern is this? because people aren't going to not buy one. if they want one, they will just simply wait for it. >> i think for the most part, that's true, although we have not carried a lot of that forward, believing there may be some opportunity cost. if it gets delayed, there is some risk that some people may decide not to wait. there are competitive phones out there. certainly the samsung galaxy 3 is competitive, as you've seen in the kind of funny ads they've been running. and we think the 4 might be coming out in spring. again, to be conservative, we haven't given apple full credit for that 6 million in pushing those out. but you're right, our survey certainly suggests there are a lot of people who want it, and there are probably more android users moving to apple than vice versa. >> steve, we got the iphone 5 now certified in china as approval there inches forward. it leaves us wondering if china mobile, if a big deal may be sooner rather than later. >> that's a good question. i think it would certainly help
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dramatically if china mobile did a deal with apple. there are 600 million subscribers on china mobile. our view continues to be that that may not come until late next year and possibly into 2014. so we'll take a look at that and see if we need to change our view. but we do think that's going to be a bit later. and that becomes important to the stock as you get into next year. you get those first big two quarters of iphone 5 shipments, and then it starts to level and people are like what's next? we think penetration in asia needs to be next. >> steve, thanks so much, over at ubs. interestingly, china is registered at a1429 which is not nearly as sexy as iphone 5. when we come back, more key housing data on the way. breaking news on pending homes at the top of the hour. and the analyst behind the new price target on google. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments.
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welcome back to "squawk on the street." i'm diana olick. signed contracts to buy existing homes fell 2.6% in august from an upwardly revised july figure. national association of realtors pending homes sales index is now 10.7% above where it was last year. the expectation, though, was for a slight month-to-month move up. quote, the performance in month-to-month contract signings has been uneven with ongoing shortages of lower prized inventory in much of the country
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and across most price ranges in the west. but activity has remained at notably higher levels this year. regionally pending home sales rose 0.9% month to month in the northeast, fell 2.6% in the midwest, fell 1.1% in the south, really tanked out west. down 7.2% month to month. this is what we've been talking about all summer, how investors in distressed properties have been fueling the home sales numbers. now we see very low supplies of foreclosures which are largely out west, lo and behold, the numbers start to drop. that's a red flag going forward. carl? >> interesting stuff. thanks so much, diana olick with pending numbers. meanwhile, the road map for the next hour, spain sure to grab headlines as the prime minister gets set to unveil late his controversial 2013 budget. the country looking to put an end to spending and boost taxes, adding to the pain that sent thousands of protesters into the streets. so with europe back at the forefront, what does it mean for the markets? and back to the tech front, research in motion out with earnings tonight after catching a boost this week on the backs of positive comments from
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goldman sachs and investor optimism over blackberry 10, but is that enough to turn the tide? speaking of tech, happy 14th birthday to google. one firm on the street celebrating by boosting its target on the tech titan. shares just above 761. is 800 the new normal? teens love their smartphones. we'll be joined by the former cto of samsung and current ceo of nq mobile to talk his latest mobile security initiative. let's get on with it. we've recently had pending home sales a moment ago. it's a strange mix in data emerging this morning. durable goods orders sinking, even as jobless claims declined, second quarter gdp was revised down 2.3%. >> 1.25%. >> let's make more sense of what's going on, cnbc senior economics reporter, steve liesman joins us now to try and -- where are you here, then,
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steve? what picture? what snapshot do we have? >> i'm going to separate all this out and maybe it will help a little bit. first, simon's exactly right, significant cross-currents in the data this morning pointing to stronger jobs numbers on the one hand, but here's the head scratcher. weaker overall economic growth. let me show you everything out there. first there's this huge durable goods decline, minus 13.2% after rising 3% in the prior month. second quarter gdp did grow 1.3%, but that's a big revision from what economists were expecting and what the prior print was was 1.7%. august midwest manufacturing down. but then the bottom two numbers, claims at 359 down 26,000 and payroll revisions through march of 2012 went to -- that's adding 386,000 jobs to the numbers that we thought we had. chris williamson of market, he summarizes it all like this, saying anyone voicing doubt about the need for the fed's recent stimulus must surely be silenced by the surprising weakness in the data now coming out of the u.s. and let's take a look at the
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details in the durable goods numbers. new orders, shipments were down 3%, that's something that will feed into gdp and takes a tenth off the numbers we have now. the civilian aircraft numbers i wouldn't get too excited about. boeing did 260 in july, did 1 in august and it looks like it's doing better in september. more interesting was the decline in motor vehicles. defense seems to be coming off. and that could be related to the drawdown, what's happening in afghanistan and iraq or more broadly early fiscal cliff, signs there. business investment up just 1.1% after declining really for two straight months. john says these numbers stink. he says these orders data are putrid. we believe that weakness is tied to problems in asia and europe as well as uncertainty over the tax environment for 2013. and then we turn to the other side, the better claims data. now, notice it moves it just a little bit, but along with more optimism in the jobs component, the claims data is the second piece of good news this week on
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the employment front. weekly claims falling by 26,000 to the lowest level since late july. got to have a little caution here, comes on the heels of a bump up in claims from hurricane isaac and, of course, other factors that are out there. something for candidates romney and obama in today's data. you can imagine romney pounding on the weak growth and obama saying hey, 286,000 more jobs out there and there's also something for bulls and bears but not much anybody from a sober analysis this remains a weak growth economy. melissa? >> thank you very much, steve liesman. and from the u.s. to spain, let's head across the atlantic for more on spain's budget as the country hopes to avoid a bailout. steve sedgwick joins us live with the very latest. steve. >> reporter: yeah, thanks very much, indeed. we just heard literally in the last 20 minutes or so that the press conference, the announcement about this austerity that we've been waiting for all day will now get the conference in around about an hour's time. so all should be revealed about what rajoy intends to do. in the next stage of austerity. because i think the next stage
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because there's already been at least four bouts of austerity from this government since it came in in december last year. the last was a 2012 budget which we got 64 billion euros worth of austerity which he hoped then would carry us through to 2014 and get the deficits back on track and get the economy back on track and get the pay masses of germany and the ecb off their backs. and the bond markets. all other things did not remain equal, and the economy continued to contract. the bond markets have begun to sell off now. and the pay masters say we need more austerity. for a country that's in deep recession that has 25% unemployment, 50% youth unemployment and a recessionary environment since december last year, that is a bitter pill to swallow. it is a bitter pill literally on the ground where i'm standing because for the last two nights, the public have protested. we've seen behind me these barricades which are blocking the entrance to the parliament
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for the protesters over the last 24 hours. that is where we saw the rubber bullets and indeed around thousands of protesters just bemoaning their luck in what is a tough environment. what will rajoy try and do next? we're talking about another bout of taxes, some saying 40 billion euros worth of spending cuts and tax hikes, but there are real red lines which rajoy could step over and upset the apple cart domestically politically including freezing pension increases which are due to come into effect in november. as if he hasn't got enough problems, within the next 24 hour, we're going to get the financial consultancy company telling spain how much it banks really need out of an already agreed credit line up to 100 billion euros has been agreed with the european pay masters. but the question is how much of that do they need? plus the fact rajoy's got problems with his autonomous region. the catalans want more independence. it's a toxic mix.
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it would take a great man to get them out of it. >> that would be a bit of a houdini act. thanks. thauk from increasing optimism over a spanish bailout to a fresh dose of stimulus in china, are these the new catalysts for a continuation in the risk-on rally? dan greenhouse is chief global strategist and proud new papa. good to have you with us. >> thank you, sir. >> first off, do you believe the rumor mongering about a chinese move next week? >> i mean, it's impossible to say, obviously. i think certainly the bias into a change in leadership, the bias is going to be for more stimulus rather than less. you want a tailwind so to speak into the change, and you want something in terms of a tailwind coming out. what i would add is a lot of people focusing on this, we still don't have a date for the peoples congress. i would remind people it doesn't actual hi take effect for several months thereafter. so there's a bit of uncertainty on the horizon right now that we'd look to have cleared up. but certainly the bias is for more rather than less. >> there is something that new
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leadership would want to come in and things be really bad, so no stimulus until afterwards that things can sort of reset, they could start at the lows and blame all the bad economic data on the old regime. but going back to this notion of stimulus -- >> the president obama strategy, you're saying. >> no comment there. it's interesting to see how markets around the world rallied on this notion of stimulus when we had the same sort of rally off the ecb in qe3 and now the cold water is on those rallies, questioning about whether or not stimulus can actually work. and the same here is happening with china. do you think that if it does play out that we have stimulus, perhaps there won't be any sort of help to us here in the u.s.? >> there's two things to always say in the context of this conversation. the first of which, stimulus is kind of like a broad general term. it really depends on what you get, where you get it. for instance, we look at what's going on in europe. i think one of the best things they could be doing is cutting tax rates, broadening the base, so to speak, rather than raising taxes to the degree that they are. but here in the united states, with respect to the rally, i'm getting a large number of questions. we're getting a large number of
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questions about whether or not the stimulus boost from federal reserve easing is what it used to be, so to speak. i would remind people take a look at the last couple of instances, we've had similar measures. we've had similar instances of people wondering whether the fed was -- if i had $1 for every time we talked about the fed being out of bullets, i'd have lots of dollars. and we're going through that again. >> they would all be worth less. >> the previous dollar, yes. >> less than maybe ten years ago. not necessarily less than five years ago. >> shame on you for that populist comment there that you should be cutting taxes in europe. at what point do you think the spanish are going to cut taxes given the situation that they're in? shame on you for appealing to your republican base in such a shameless way. >> btig's clients would be interested to know that i had a republican base, but listen. at the end of the day, there isn't a sort of a one-size-fits-all fix for given economies that are in trouble the way that they are. and you really have to look at what works in each individual instance. you know, in the united states,
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a lot of liberal-leaning people would say, well, we take the lowest share of the economy in terms of the tax base so there's room to increase taxes. the opposite is true in europe. >> well, you have time here in the united states because the bond market has not turned against the debt. let me ask you -- let me ask you specifically about spain. given -- and i do it in the context of all the pessimism, so correctly outlined by steve there and all the violence in the streets. from what they announce within the next hour, can they construct something that basically means they are preapproved for bond buying when they say actually, guys, now is the time for the ecb to come in and help? can they construct that? that is the silver lining. >> inherent in your question is or did mariano rajoy have a private conversation with mario dragi? the answer is unquestionably yes. i don't have any nonpublic information that's occurred, but i find it hard to believe that mario dragi is not on the phone with just about everybody.
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that said, announcing certain measures is a far cry from implementing certain measures. as you've seen throughout the region, the ability to implement the measures is far more important and far more challenged than is saying you intend to do it. >> it's actually hard to get that check? >> people wouldn't be rioting in the streets if it was easy. >> but from a market confidence standpoint, all i need here, sitting in america, is to trigger ecb bond buying to keep the whole thing in check. i don't need to care whether rajoy can hear through. >> for now. >> exactly. i just need to buy time for this rally to continue into christmas and for u.s. equities to rise. >> in your time horizon is traderish over the next couple weeks or months, then sure. a lot of clients are medium to longer-term investors, and they're concerned about that time horizon in terms of the implementation risk, not necessarily the headline risk. >> we had a discussion this morning about the fiscal cliff. i'm not asking you to predict what's going to happen there, but doesn't every auto executive
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worry now about inventory, and isn't the bias toward at least manufacturing data over the next month or two going to be soft? >> i think the bias toward everything is going to be soft. i don't think you have -- >> not everything. >> i would say everything. >> you would. >> what i mean by that is ceos, even government officials themselves, you don't have to wait for the implementation of the fiscal cliff to get scared. you hear this from business executives all the time. forget your eye idealogical leanings. >> do you think we've seen that already in the data? >> in terms of what? i think for sure, the data in general has been softer than it might otherwise be. you know, sort of impuriimpuric proving that is different. you wait to see how this sort of clears out. let's remember, the uncertainty doesn't go away. a lot of people have come around
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to the realization -- please. >> the glass half full argument means the economy is actually stronger than what the data is showing. if the data is factoring in this uncertainty about the fiscal cliff. >> would the stock market be higher if we excluded the laggards, then sure, it would be, but you can't exclude the laggards. at the end of the day, what matters is that we get through this. and i would just add, btig's view on the cliff is markedly different. we think there's a much higher probability as the president's re-election odds go up that some variation should be on what we anticipate gets triggered and there is a problem for the stock market and the economy in the first quarter of next year. >> so president wins, sequester happens. >> not entirely, but john boehner came out the other day and said well the president winning re-election doesn't suddenly make me favor higher taxes. so the president gets to go around town saying i campaigned on higher taxes for the upper-income brackets. agree or disagree? the house is going to say i campaigned and took over the house on not raising taxes and
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you'll be at lagerhans. >> he might foresee he has a ticket, he's beholden certainly not to his own base. he could do the deal. >> listen, we're all spitballing and making this up as we go along. but you could see a scenario, we see a scenario where the president runs a '94-type scenario where he says shut it down. who's going to get the blame? in theory if the president wins by more than a couple points. >> gingrich. >> i think you could make that case that that's not to say that the other side can't win. because remember, the house is the people's congress. >> you notice this has become the oscars and playing the theme tune so we'll shut up. >> he's gotten investors who actually have three-year time horizons. i don't believe that for a minute. >> always great to see you. research in motion steadily moving higher this week aided by a positive note out of goldman sachs. is there still hope for r.i.m.?
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then oil slipping below a key level with european concerns back on the front burner. how much more demand destruction is crude in for? and later rumors of china hoarding hogs. britain's national pig association warning of a global bacon shortage. and how dining establishments handling the signs of a porkalypse? restaurant owner danny meyer will weigh in on this very important issue. greetings from the windy city of chicago.
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research in motion will be reporting earnings after the bell today. the once dominant player in the smartphone market, r.i.m. is now trading near nine-year lows. check out that chart. an extraordinary ten-year chart of how it comes and how it goes. this week, of course, r.i.m. tried to get its customers excited about the new blackberry 10 at its developers conference, that's the operating system. we've spoken about it now almost for years. but does the company have the strategy all wrong? joining us now on the cnbc news line is will power. he has an underperform rating on r.i.m. and a $7 price target. basically, the stock is where you think it should be. >> well, that's right, simon. we've been at under for some time. we've had a negative view i guess for the better part of a year-plus. i think there's still significant risk as we move forward. you know, as we know from monday night, there's always hope, but at this point, it's fourth and very long.
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>> so you're not impressed, then, with the new subscriber count which came through this week, 80 million. i mean, are you discounting the role of emerging markets and the fact that it's making headway in southeast asia? >> you know, the higher subscriber count was a bit of a surprise to us, although on the other hand, that's a count that has continued to grow, as you pointed out, really driven by emerging markets. i think the real question there is, you know, both the revenue generation from those customers and the profitability, i think the numbers on those fronts will be much lower. so i think the mix is going to skew negatively. and that's a count that i do expect will probably start to decline sometime over the next couple quarters. >> the breakdown of the 80 million subscriber number that they mentioned at the developers conference, do you expect the upside came from emerging markets and that therefore those are lower-end phones and have lower selling prices and lower margins? >> that's exactly right. so i think the mix will negatively impact them. and i think we'll see that reflected in the average revenue peruser that they report as well as potentially margins.
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>> more importantly, will, in terms of cash, if they are selling -- if they have more subscribers but at a lower margin, cash becomes a concern. they had $2.2 billion beginning of june, june 2nd. what do you anticipate the cash level to be and how significant do you think the burn will be as they are gearing up with blackberry 10? >> well, that's going to be one of the big questions, i think one of the big focus points for investors on the call tonight particularly with regard to any forward guidance because as you look at some of these restructuring efforts, they're going to require cash up front. i think our expectation is they'll burn through at least several hundred million dollars in fiscal '13 and a good deal more in fiscal '14. and that is a focus area because that's something that helps provide some base level for the stock from here. >> will, have you experienced 10, have you looked at the operating system? were you not moved by the sort of stuff it can do, the graphics it can play, the games you might
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be able to operate on it? >> i think there's no question it offers significant improvements over what they have in the marketplace today. the real question is whether consumers will care. i think we'll see the same thing in windows phone 8 and some of the windows upgrades generally where, you know, i think there have been nice improvements, but is it enough to get customers to regravitate to the platform. and the proof will be in the pudding. this is clearly a show-me story and i don't think we'll have the answer to that until we get into it. >> so how do we make money in your universe? >> in my universe, we've continued to recommend apple, like i guess most others out there. that's been our top pick. we're an underperform ratings on both, you know, r.i.m. and nokia. that's still where the focus would be for me. >> and how significant was it overnight that nokia priced the new lumina 10% higher than samsung? >> it will be interesting to see. i think at the end of the day, again, it's really going to hinge on, you know, consumer adoption, consumer interest in the device. we just haven't seen the proof
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points that consumers have -- are gravitating to those new devices despite some of the new specs and software enhancements that are included. >> will, thanks for your time. >> thank you. we all know teens love their smartphones and often worrisome fact for parents looking to their kids secure in this mobile world. but what about a hot new app that could allow for mom and dad to have a little more control? we'll talk to the former cto of samsung mobile, omar khan will join us live to talk about his newest initiative a little bit later. [ male announcer ] you are a business pro.
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google is now old enough to be a freshman in high school. the internet giant turns 14 today. the stock has been trading near all-time high and got a boost this morning when evercore raised price target to $860 a share. ken made that call. he joins us now. ken, great to see you. >> thank you. >> it seems the crux of this is that you see there's an opportunity for higher click volumes as well as pricing. what is the catalyst behind that? >> a lot of the product listing ads they recently did. what we do in the report is look at some of the supply shortages that google currently faces
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among some of its leading keywords. what we argue is that through increasing the amount of clicks on the consumer side, that google can optimize better between supply, demand and actually leave less money on the table with marketers. >> in terms of the ascent of the share price in recent months, you point out yourself that the stock is up about 35% in just three months. that is not concerning to you at all? you don't think that there could be a desire to -- for people to lock in gains at this point in google? because it had been -- i don't want to say dead money but a slow-moving stock for quite some time prior to the past three months. >> i think absolutely. and i think the valuation is still not unreasonable for google. and i think for us, one of the things we really tried to argue is that the fundamental story within their core search product actually still shows a fairly big runway. so when you start to see them actually moving kind of horizontally more towards the merchant, more towards the consumer and as that platform starts to really strengthen, i think -- and you're seeing that now in the product search category, but ultimately that
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will extend to other verticals, i think it dovetails nicely with all they're doing on the mobile side, too. we actually see at least in the case of mobile that the tides are starting to turn in google's favor where i think mobile's actually becoming more friend than foe. >> yeah, interesting, ken, how, i mean, all these would-be rivals, right, were storming the castle, whether it was apple with maps, obviously the potential for disintermediation from facebook, and i wonder if that's going to be the larger story that no one can pop this bubble. >> i think so. you saw with maps that google clearly has an advantage and i think probably more of an advantage than investors were giving it credit for. i think it's also true within search in terms of facebook's potential to sort of change search and augment that some way that was socially fueled. i think google's power there continues to be unchallenged, and i think google is making progress on the social side as well. >> do you ever see them returning to sort of an undisciplined spending habit where we start zeroing in right away on sg&a every quarter
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wondering why they're spending money on a driverless car or even glasses with a computer in them? >> you know, i think -- i'm sure those concerns will always be around, but i think when you look at some of the recent product rollouts, they do seem to be hitting a stride and i think maps is one example there. when you look at what they're doing within product search which is what we really focused on within today's report, they're requiring merchants, small and medium, to really sign up for ad words accounts which we think will ultimately benefit them in terms of more information on merchants, listings are more updated and providing the better overall experience for consumers. i think that yes, we argue there's a big fundamental catalyst, but i think you can see that extending much further beyond search into their mobile products and maps, et cetera. we're still excited about the stock. >> ken, we've got about 20 seconds, but i'm just wondering what's your best guess on what happens with maps? do you think it ever finds its way onto an apple twice, or do you think that ecosystem is now
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officially shut off? >> i think ultimately it does, to be honest. and i think at some point, at least it puts google in a good position to have those conversations. but i think google at some point in at least in this conversation, it obviously is in a much better position than it was before. >> ken, great to you speak with you of evercore. >> just going to make them sweat it out a little bit over there. let's get breaking news, inventories on nat gas with sharon. >> reporter: natural gas inventories in the past, we are waiting for that number as natural gas futures are near their highest levels of the year. up 80 billion cubic feet is the number. the increase in natural gas storage levels was greater than many analysts had anticipated, up 80 billion cubic feet. and as a result, we are looking at natural gas futures coming off of their highs a bit. we did, as i said, hit the highest level since last december in the overnight session, around $3.29 was the high of the session. and we've come off of that. but just a little bit here. we're still within the range of
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where we normally are for the five-year average in the increase in natural gas and storage. and we've seen tremendous gains in futures on not-so-great fundamentals as the report pointed out this morning. keep in mind if we are above the $3.27 level, that's a strong run for natural gas prices and we'll continue to watch how investors respond to the inventory data. keep those tweets coming as we've been reporting this week, a shortage of bacon is on the way. and that means you'll soon have to start paying more for that crispy deliciously goodness. we're going to -- it's our "squawk on the tweet" question today. besides pork, what else should you be hoarding now and why? tweet us @cnbc.squawkst. we'll also get danny meyer's thoughts on that, a guy who knows a lot about costs, input costs and running a restaurant. >> aporkalypse is what you called it, right? >> aporkalypse. >> it's going to be a rough year next year for the restaurants
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because that drought that we had, it's becoming a real commodities headwind. estimates have not been brought down properly for next year. that will be the struggle certainly in casual dining. still to come here -- still to come -- a new way to check up on your children and what they're doing with their smartphones. plus, 15%, 20%, waiters, housekeepers, tipping got you confused? simon hobbs will set you straight. apparently he is the chief tipping correspondent here at cnbc. >> ultimate tipping guide. >> back with more "squawk on the street" straight ahead. this country was built by working people. the economy needs manufacturing. machines, tools, people making stuff. companies have to invest in making things. infrastructure, construction, production. we need it now more than ever. chevron's putting more than $8 billion dollars back in the u.s. economy this year. in pipes, cement, steel, jobs, energy. we need to get the wheels turning. i'm proud of that. making real things... for real. ...that make a real difference.
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one hour into trading here, here are the stories we're squawking about, 7:34 on the west coast, 10:34 here on wall street. shares of tempur-pedic shares soar. $2.20 a share in cash. pending home sales down 2.6% in august, according to the national association of realtors. the n.a.r. citing a shortage of lower priced inventory. freddie mac says the 30-year rate has fallen to a record low, 3.4%. wow! let's get a market flash. bertha coombs is back at hq. >> we're watching mccormick, started off well on the day, the company beat on its bottom line, earning 78 cents a share even though revenues came up light of
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expectations at 999.77 million. costs are higher but it's also raising costs. so we are spending more for the paprika and for those cumin seeds which i know you love, carl, but shares are a little lower. they have been at a high recently. back to you. >> do they make mrs. dash? >> i'm not sure. >> i know they don't make tabasco. that's the only spice i care about. >> bertha said you love cumin. >> bertha, thanks. see what you left me with? meantime, it's official. the nfl and referees union have reached a tentative contract agreement, ending an impasse that began back in june when the league locked out the officials and started using replacements instead. our brian schactman has details. hopefully it gets ratified before sunday. >> i think the referees will be on the field tonight, carl. it's incredible. all it took was a horrible call, possibly a billion dollars in altered wages and the collective outrage of a nation. late last night, we got a deal. here are the details.
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eight-year deal, longest with game officials in history. of course, still needs ratification, as carl mentioned, but that is expected. first the pension issue. they will have one until 2016. and then it will be frozen and replaced basically by a 401(k), a defined contribution plan, although it's an awesome one. refs get at least $18,000 a year from the league, a lot better than every company in america if you get 50 cents on the dollar to 6%, do the math. the average salary will go from $149,000 a year in 2011 to $173,000 next year and $205,000 by 2019. in terms of adding referees to what's compromised here, more are were added but less than the league wanted and most will be nonunion members trained for future work. in terms of official statements, the quote from both, we appreciate the commitment of the nfl ra and working through issues to reach this important agreement. we're glad to be getting back on the field for this week's games. you think? twitter, of course, blowing up on this last night. here's an example of a player
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comment, this from star returner josh cribbs. never thought i'd be excited, but it's about time, definitely necessary. and seriously, you never envision the refs getting standing "o"? well, simon, it will happen tonight. imagine the football in your part of the world referees getting a standing "o." that would never happen, right? >> you're obsessed with stalker. you keep -- 175 -- so they get $174,000 a year. that will be the new salary? >> that will be starting next year and go all the way up to $205,000 in 2019. listen, this is a part-time job. they're not full-time 12-month employees. they obviously do a lot of hard work. but it's a pretty good gig if you can get it. >> that's a defined benefit scheme, pension benefit scheme to 2016. >> the current refs get their pension. and then after that they get a 401(k). but the key here, the takeaway is if you make $150,000 and they do dollar for dollar for 6%, that's like $9,000 that the company contributes, they're
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getting at least $18,000. that's like a dotcom boom-type 401(k). >> well, almost. brian, thank you very much. the details there on that deal overnight. meantime, are you a parent? does your teen have a smartphone? if you're wondering what they're downloading, texting and doing that could potentially get them in trouble, stay tuned. later on, a new app bringing true interaction to tv viewing, engage with the stars, buy the same products they're using and share it with all your friends. we will talk to the creators. silverado! the most dependable, longest lasting, full-size pickups on the road. so, what do you think? [ engine revs ] i'll take it. [ male announcer ] it's chevy truck month. now during chevy truck month, get 0% apr financing for 60 months or trade up to get the 2012 chevy silverado all-star edition with a total value of $8,000. hurry in before they're all gone!
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it's no wonder so many investors are saying... one is for a clean, wedomestic energy future that puts us in control. our abundant natural gas is already saving us money, producing cleaner electricity, putting us to work here in america and supporting wind and solar. though all energy development comes with some risk, we're committed to safely and responsibly producing natural gas. it's not a dream. america's natural gas... putting us in control of our energy future, now. my name is adam frucci and i'm the editor of i love new technology, so when i heard that american express and twitter were teaming up, i was pretty interested. turns out you just sync your american express card securely
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to your twitter account, tweet specific hashtags, and you'll get offers on things you love. this totally changes the way i think about membership. saving money on the things you want. to me, that's the membership effect. nice boots! more than half of teenagers today are walking around with smartphone as cording to one study. so perhaps it was only a matter of time before a technology came along that would help parents turn smartphones into a teen watchdog. joining us is omar khan. a new tool being launched today. omar, great to have you with us. i'm sure a lot of parents' ears
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are perking up right about now to hear the details. how much does this cost and what does it do? >> well, it's a product we're launching today here on cnbc called family guardian. it cost $34.99 for 12 months. what it is is it's a product that allows parents to manage, monitor and protect their kids. there's about 30 million teenagers here in the u.s. today, and that population is expanding. it's nearly 1 billion globally. 58% of teens have smartphones today. my son, who is 10, as bee grijigrij i begrudgingly become a beta tester. it allows you to manage their browser access, allows you to manage when they can text, when they can call, who they can call. what pictures they're taking, what videos they have. it also allows you to -- it also allows you to be able to put a geofence in place that allows you to see if they're outside a safe zone. it allows you to see where they're at and if they need help. it also allow says a kid to
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check in on the device itself and be able to share with the parent that hey, i'm at school. i'm in a safe place. or i've arrived at soccer practice. i'm where you expect me to be as a parent. >> sounds like a great tool for parents, omar, but i'm wondering if there are any security and privacy concerns. i mean, if it falls into the wrong hands, could you put this on -- could i put it on simon's mobile phone and then begin to spy on what simon is doing? >> as her husband. spying on your spouse. ideally. >> the list goes on and on, omar. >> no, absolutely. it's a tool that what we've put in place is it's password protected, user name and password. you can logon to a website from either your mobile phone, your tablet such as an ipad or android tablet as well as a pc. what it allows you to do is you as a parent install that application on your kid's device, and there's an interaction between the cloud and the device itself. so it requires a two-sided interaction. >> i'm trying to get a sense of
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the market possibilities here, omar. i mean, i think the layman would assume that every teen in at least the country already has a smartphone. your take is that actually on a percentage basis, it's still a growing demographic. >> oh, absolutely. it's a growing demographic. it's about 58% in the u.s. about 50 plus percent of all people in the u.s. have smartphones. and around the world, smartphone penetration is only at 20% today. it's a huge growing population. there's about 1 billion teens. my son is not even a teen yet, he's a tween, just turned 10. i've got twin 6-year-olds. they're begging me every day for a smartphone. that demographic is expanding. >> omar, we should explain that you are a voyenne of this industry. you've had some really powerful positions. how does what you're doing stack up -- i mean, the obvious answer to when you bring such a good idea to the table, what is an apple or google likely to do this sort of thing, what is the aim for you? because you know this industry
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really well. do you think you'll get bought out? what is the end game? >> well, i mean, today we've got 200-plus million registered users across 150 countries. we develop products in the securities space, in the privacy space and in the family protection space as well as for enterprise customers as well. it's an application and network side product. we believe there's an opportunity for us to continue developing products. and actually, if you look forward, simon, if you think about where we're headed, the mobile device is becoming a conduit for everything we do. it's going to be how we do mobile payments. in the future, it's our health care device. it's going to be the conduit for how we collect our blood pressure information, glucose information. it's going to be the centerpiece for all of our personal communications and personal data. we need a protection on these devices for our data and our personal contacts. >> just on the subject of protection, now you're no longer head of mobile for citigroup. can i ask you, is mobile banking safe? >> absolutely. >> would you allow your family to bank by mobile phone?
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>> i bank by mobile phone today. i do remote deposit capture which allows me to take a picture of my check and deposit it remotely. but it also creates an opportunity for us to provide protection solutions. we have a financial security solution within our mobile security application that adds an additional layer of security to financial transactions through applications on your device. but, i mean, i'm probably the biggest testament and proponent for it. i use it for mobile banking today. my wife does as well. i do transfers. and i do deposits using my mobile device as well. >> omar, you are known in the industry as a godfather of the samsung galaxy line of mobile devices, which is probably the galaxy 3s being the only real viable competitor at this point to apple's iphone. i'm curious, what do you use right now? do you still have loyalty to samsung, and what do you make of the horse race that's going on? >> well, i tell you what. i'm flattered by the comment. there is a lot of talented people at samsung including engineers, marketers, designers
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who had a hand including my team and i in the development and launch of the galaxy. i still am loyal to my personal device is a samsung galaxy s2. i don't have it in my pocket because they make me take it out before i'm on camera. i've been in boxes moving over the past couple of weeks. so as soon as i get it unboxed, i'll be upgrading. i also carry apple devices as well. we're a cross-platform company today. you know, without the success of samsung, without the success of android, without the success of iphone from apple, we wouldn't have a market to go after. and it's that competition that leads to innovation throughout the industry. and we're hoping that that growth continues. i mean, four-fifths of the world don't have smartphones yet. and much of the world, including africa, southeast asia, their first interaction with the internet or with financial transactions is going to be through the mobile. it's not going to be through a pc. we're just at the beginning of this mobile revolution around the world. >> omar, thanks for your time. appreciate it. >> thanks for having me. >> omar khan of nq.
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>> come back and let us know when those 6-year-old twins get their first phone. meantime, it's one of the most confusing and sometimes embarrassing things you do with your money. of course, that is tipping. but our simon hobbs has found a helpful guide to why we often mess it up and who does and who doesn't deserve a couple of extra dollars? first, though, rick santelli's working on the next hour of "squawk on the street." >> reporter: boy, and it's going to be a jam-packed santelli exchange at the top of the hour. we're going to talk about, you know, europe. so many people on our channels, they don't worry about europe. we hardly export anything to them, that's true. but i have a new idea. europe is systemically important. think about that. we're also going to talk about china and housing. and at the bottom of the hour, we have a real surprise. we have governor dave heineman from nebraska on and talk to him about his state and many other swing states that have been improving and also have republican governors. tune in. at optionsxpress we're all about options trading. we create easy-to-use, powerful trading tools for all.
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hallelujah, help is on hand for tipping. it breaks down how to tip in 200
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countries for the app. this month's budget travel magazine has an easy step guide called the eight most tipping messages and how to avoid them. colleagues, let's run through the mistakes, those that you tip that you should not be tipping. there are four categories here. cruise staff in the u.s. and caribbean because apparently it's added on to the bill now. check with your cruise liner. waiters in europe you shouldn't be tipping. bellmen, according to budget travel, you should not tip. certainly the not the guy that picks up your bag as you exit the car. china and japan, apparently, it is considered rumored to. arguably, according to budget travel, you should be. drivers of shuttle vans, you know, coming from the airport to the -- do they also pick up a bag or
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just for driving? >> if they pick up heavy bags, maybe you should. hotel housekeeping, they say for your best service, you should tip every day. don't leave it on the dresser because they won't know if it's for them. put it under the pillow or pass it to them as you go past them in the corridor. >> they might end up thinking you just sleep with money. that's the other problem, right? >> well, it wouldn't be very much money, would it? >> that depends on the tip. >> on that subject, the concierge, you shouldn't tip unless they do something extraordinary. and tour guides, how much do you think you should tip tour guides if they do a short tour? >> what's a short tour? >> three hours. >> 10%. >> no. $3 to $4. >> $3 to $4? >> if they do a full day, $7 to $10. >> and this comes from what magazine? >> budget travel. >> oh, i get the point. >> globe tipping, it breaks
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down. it's 99 cents, it breaks down to what you should -- >> no, in europe, you don't have to tip the waiter. >> well, i would in the uk. that's normal. but not in denmark. it's confusing. >> not in denmark? >> the herring in denmark, i highly recommend it. >> don't we do this every day in some fashion? >> yeah. tomorrow, cosmopolitan. tip to -- >> let's leave it there. >> when we come back, he's got a new app that can almost literally make elementary beyle lemons. that tastes a lot like cash. we'll show you how.
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as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... they can inspire our students. let's solve this. if you love bacon, and who doesn't, now is the time to load up. besides pork, what else should you be hoarding right now and why? jessica writes, i'm hoarding ta tooeg keel la so i won't care when the pork runs out.
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>> here we go. >> troy writes, i'll be hoarding my iphone 5 fwaus because siri will help they find bacon. and matt writes, you should be hoarding that go-go juice from honey boo-boo. i hear it's illegal in four countries now. the dow up by about 0.8%. we talked to the ubs analyst who ratcheted down the expectations for units sold in the december quarter. he did say specifically that he believes that is factored into the stock. so perhaps accounting in part for this move to the upside. next week on the program we may have the secret apple society on. >> really? >> an online chat room. they may condegree indicate from different parts of the united states. they've never seen each other or
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messaged. >> that would be good. a secret society on cnbc. tonight, we have rim out tonight. we also have greg taxin. this is a fascinating story you won't want to miss. >> it's always on the list of big movers. see you in 30. if you're just joining us, here is what you might have missed if you're just tuning in. welcome to hour three of "squawk on the street." here is what's happening so far. >> i think if there's not some real action after the election. you're going to see the emergence of a strong, independent party. i'm not for that. but ting voters here are sending a message that they want things to be worked out. all the talk about whether we need revenue or it can be done on the spending side really
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misses the point that so much of our spending, so much of what is really government spending happens in the tax code. >> as we move to the summer and we realize on europe, normally we might get some acceleration. the problem now is you have the fiscal clip in the election so people now have yet another excuse not to do anything. had europe not bled into the summer as long as it did, maybe you would have got that spark in activity. but right now, you don't have it. >> i was somewhat amazed that the data at 8:30 didn't put a bigger dent in this rally. those numbers were almost recessionary. durable goods and the gdp. >> right. there we go. opening bell ring on a thursday morning. >> announcing certain measures is a far cry from implementing certain measures. and as you've seen throughout the region, the ability to implement the measures was far more important and par more challenged than is saying you intend to do it. >> we actually see that, you know, at least in the case of
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mobile, the tides are starting to turn in google's favor where i think mobile is becoming more friend than foe. >> good thursday morning. welcome back to "squawk on the street." we're live at post nine of the new york stock exchange. let's get a check on the markets here. the s&p trying to break what has turned into a five straight losing session with some gains today. we might actually do that. although with the exception of the dow i think at these levels, s&p and nasdaq are still on track for their worst week at about 17 weeks. first solar seeing big gains today on news that it won contracts to build four solar power plants in new mexico. the plant will be in service by tend of 2013. and target, one of the worst performers from s&p after comments saying the firm believes sales were lower in september and expects conservative plans for the holiday period. let's get to the road map on a thursday from a sliding stock to brutal cutbacks. the road ahead for research in motion, not an easy one.
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can the ceo turn things around with earnings tonight? then the lawmaker that is planning to wipe out taxes in his state, the governor of nebraska will join us live. plus, he has had a hand in countless virtual efforts in america. now he's looking to take over your wallet. and beware, bacon lovers. a bacon shortage is imminent. restaurant, bottom lines everywhere are going to be affected. we'll talk to want of our favorites, restaurant mogul danny meyer about how he's preparing for this global crisis. all that and more coming up in the next hour. rim, the stock is down 50% this year. company expecting to lay off thousands of employees. in other words, a turn around is easier said than done. our john ford is live in san jose tonight with what to watch when these earnings hit. and some key metrics will get into very good attention, john. >> it is to be worried about
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that pork-opolyse. hey, what if they surprise us? let's take a look at rim now. the stock has been in trouble ever since the iphone came out. that's because blackberrys were the best at messages and making phone calls. remember those? and when the iphone came out, apps and mobile web were huge. rim is still not very good at those. behind the scenes, rim is keeping revenue afloat by discounting phones and tablets to keep inventory moving. that's part of the reason why we're expect ago loss because rim can't sell its protect for much less. meanwhile, they're laying off some 5,000 workers to save $1 billion trying to keep trim ahead of the all important launch of the blackberry 10of. here the ceo of rim was making the case that rim is in position to be the number three behind android and iowa. the number three os. here is the problem with that idea. android might be the number
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three behind ios and android. what do i mean? take a look at what amazon is doing with android, making its own version. and in china in particular, you have a number of manufacturers, a number of software companies building on top of android in ways that google didn't play on, paring home grown chinese services with the android os and making, you know, some compatibility with android on top of that. it could be really hard for rim to break through. but that's what they have to do if they're going to have a shot, carl. >> john, is the key number going to be average selling price and share, the pricing power they've got? or is this really a story where we have shifted to watching how much cash they have on hand? >> the cash on hand, not as much of an issue of average selling price. but beyond that, you want to make sure that that blackberry 10 ship date of early 2013 doesn't slip at all. because that's what valuation
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the stock has left is banging on, carl. >> still looking for that first quarter. that would be a big disappointment if that were delayed. thanks, john. we'll see you a lot today and tonight. meanwhile, gary kaminsky is back at headquarters this morning. what's on your mind? >> a lot to cover here. earlier this week, we spoke about quantitative easing. not surprising given the sort of controversy depending on which side of the table you are there. if you missed it yesterday, i want to reference an fc article. check it out, go to their website. great piece here, talking again about many seasoned investors worried about how this is going to end and how bernanke in effect has created this major dislocations. in line with that, if you've been watching cnbc for the last several years, you know that i have felt sometimes as an investor that the high yield market, the junk market is the best indicator for what's going to happen with stocks. it's been a great telltale for the last four years. if you look at the high end market, the correlation here at
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jpmorgan for putting this together, the actual correlation has spread. the 90% correlation, the perfect correlation going back would tell you that the s&p should be trading at 1650 if you take where junk is trading. and the reason why that's not the case is very simple. given what bernanke has done, given what the fed has done, you push a lot of people into junk bonds that historically would not be only junk bonds, making the prices go up, the yields go down. obviously, not what the fed wanted. so, again, correlations here, equity investors, bond investor, bond investors is always smarter. this is as a result of what bernanke has done. finally, for those who have been around for some time, i was chatting up here this morning, i give credit to my father who has been investing in business for 50 plus years. brought this to my attention today. this is not a tell tale here of what is happening around the world. fidelity, you know fidelity, subsequent sensual stock picking, equity shop, fixed income assets overtook equity assets for the first time in the
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history of fidelity yesterday. if that doesn't tell you, patti diamond and i were just talking about, bernanke has not been able to get what he wanted which is to force people into equities, i don't know what does. kind of amazing for those that have been in the investment business for decades to see that fidelity data this morning. >> you can lead a horse to water. we should have your time on from time to time, duelling kaminskys. that would be great. >> yeah. many times we disagreed about things, but i have to say that we're both sort of in that same camp and he's been doing it a lot longer than i did, carl. this is going to end ugly. you just don't know when it's going to end. >> good stuff, gary. meanwhile, let's check in with rick santelli taking a look at all the things going on in china with housing and europe, too. >> carl, it is very fascinating to look at a day like today where you had a nasty, weak data points in the u.s. very large downward revision.
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this is our third time around the block on second quarter gdp or the houses index today, that was down over 2%. or, of course, durable goods. you don't often see a double digit minus on durable goods. but in the end, what i'm talking about is how the stock markets all seem to rally. i guess the best way to look at it, even the czech republic sees today some checks in the mail. all stimulus on a global level is spongeble. and i find that something that is so logical, but yet nobody talks about it. it doesn't matter where the money comes from. the correlation with these equity indices around the globe we'll get the pattern. from the imax in spain to the dow in the united states, they all march to that same drummer. it's like being in the twilight zone to some extent in europe. yesterday, we had some great discussions. and many are looking towards europe and saying, hey, don't worry about europe. buy in stocks.
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i'm not saying that you shouldn't buy in stocks, but europe, some of these countries the size of delaware. why does it matter? i'll tell you why it matters. also, something that is so logical, we all seem to forget about it. but systemically important. we remember these discussions we were talking about bear stearns or lehman brothers. but think about it, on a global scale, these little countries form a puzzle. and if you start taking some of these pieces away in europe, everything is intertwined. think of capital structures in the global economy. yes, europe is systemically important. it isn't just about exports. china, you know, china, easy does it. i have a friend who has been sending me the fact that china has been easy to reverse repos for a long time. but over the last several days, they did $58 billion worth. i'm telling you, this is important. we can't gloss over this. and it also plays into all stimulus that's spongeble. this is another issue helping stocks and housing. yesterday, 373,000 analyze rate
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on new home sales. all of '04 and '05 were above a million units. but even though that puts it into perspective, maybe the real issue with housing is we are now maybe in the new normal. carl, back to you. >> i love the way you say that. we'll talk to you in a little bit. got another market flash here, this time in the financial sector with bertha. >> that's right, carl. discover financial, the best performer in the s&p 500 after posting better-than-expected earnings. it's -- was down a bit and also its credit card loans. business grew by 2.4%. a lot of revenues, about 100 million came in from the add ones, identity theft protection, credit monitoring and those are things that they actually just settled with the new financial services bureau on. it will be interesting to see how those metrics change in the coming quarters, carl. >> what a roller coaster ride for that name over the past couple of days, bertha. thanks a lot.
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there's a new way to watch your favorite television shows that brings the characters and sometimes the news anchors to life. we'll tell you all about that. then we'll talk to the man trying to abolish the income tax in the state of nebraska. and later, why buying a lemon could be good for your wallet. how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.
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z-box is announcing a partnership today with comcast cable, nbc universal and hbo to enhance the viewing experience. the app that is available on your iphone, ipad android and the web allow pages to interact with viewers, use social media to enhance the way we watch television. comcast is the owner/operator which owns and operates cnbc. joining us this morning, anthony rhodes and -- guys, welcome to the family, but it's a pretty big family. for those that have no idea what we're talking about, what is
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z-box? >> in a nutshell, it's your universal all in one tv companion. the it synchronizes your noble, your ipad, whatever you're watching tv on, it understands the context of what you're watching minute by minute and brings you relevant content and experiences so you can connect, share, discover, interact with whatever is on screen. >> so, for example, you're at home at night watching "the voice." how does it look different than just watching it on standard television? >> the z-box combines your ability to discover content, new shows that you might want to watch and your ability to mix socially with your friends, get information about wa you're seeing on screen, further additional content about what's life on screen. it brings all of those things together in one, one single place around tv. >> and so, in other words, it is really -- it's melding our various screens into one at home. isn't it, anthony? >> that's right. today we sit back, we watch tv, but it doesn't have to be that way forever. you'd like to interact with the
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program. lots of people are watching the tv. you could be watching with others. why can't, as you trade on-screen graphics for the show, you can create on-screen graphics with z-box. it's interactive. when the ticker comes by, you can click to find out more. all the televisions can change to become interactive. >> how do you guys make your money? the app is free. >> it's a free product for the consumer, but the real opportunity is to list synchronized advertising. tv advertising is one way and nontargeted, but z-box allows you to immediately synchronize what's on the main screen. it's a huge opportunity. >> you guys have launched it in the uk. today, it's live for the first time in the united states. the projections are that the percentage of viewers in the u.s. who are interested in this is upwards of 70%. >> that's absolutely right. already you find about a third of internet browsing happens while people are watching tv. so the interesting in integrating consumers is huge.
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>> we would anticipate tens of millions users as a possibly. >> how would this be in the way it's going today? >> people are going to watch tv, shift to the desktop tv. as you come into your house, your signal will shift from your mobile on to your tv. >> you can have the screen finder with your handheld and your television. it's fascinating, guys, and we can't wait to see what all this brings. >> right now, it's on itunes and on google play. >> thanks very much. it looks like we're get something clarity on rajoy's budget in spain. we'll get more on that after a break. in the meantime, he's pushing to get the nebraska state income stacks. rick santelli and forget where is the beef.
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now it's where is the bacon? we'll see how restaurants are preparing for this coming bacon shortage. keep tweeting us. what else should you be hoarding right now and why? we'll get your answers a little later on.
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let's get straight to rick santelli with the governor of nebraska then. >> yes. rick heineman. 9.1% in illinois. 9.1% unemployment in new york. 10.6% unemployment in california. governor, could you tell the world what the unemployment rate is in nebraska. >> the unemployment rate in nebraska is 4%, the second lowest in america, because we balance our budgets. we don't spend money we don't have. we've lowered taxes. we've modernized our economic incentive programs and we want to continue to do that.
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>> governor, it sounds so easy when we go over it this way. so why is there such big debates in illinois, california, new york, to raise taxes to fix problems when there's so many states from north dakota, oklahoma, nebraska that are lowering taxes, maybe some getting rid of state income taxes or modifying sales tax and the benefits? tell us about the benefits. >> well, the benefits of lower taxes is greater job creation, more jobs for young people, more jobs for families. it's all about controlling your spending and investing in your priorities. we invest in education and jobs. we want to educate our children, give them the best education we can and create jobs right here in nebraska. it takes a tough, determined and committed effort to do it every single day. but higher taxes drys people out of your state, it creates less jobs, not more jobs. we're trying to do the reverse and so far, it's worked out very, very well. and i might just put a plug in,
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you know, cnbc ranks us as a top-ten business friendly state and we appreciate that. >> all right. let's switch to a different topic. right now, everybody, whether you're reading newspapers, looking at blogs or watching tv, cnbc, it's about swing states. it's about the election. let's pull out a couple of these swing states. so we look at states like ohio and wisconsin. they have republican governors and they have seen some improvement. their unemployment rates are below the national unemployment rate and there's been other improvements. why is it when you look at the polls, this improvement doesn't seem to be helping the republican ticket? what are we missing here? >> well, i certainly want to commend governor kasich in ohio and governor walker in wisconsin. they're doing similar things that we're doing. it does pay off. i think it will eventually be reflected as we go into october with the debates at the presidential level, the focus is going to come back to the economy. and national unemployment rate of over 8% is unacceptable.
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just think what this country would be doing if they had nebraska's unemployment rate at 4%. we could grow the economy. that's what governor romney is going to try to do and i think eventually that will be reflected in the polls. >> when i look at my own state, our governor quinn has let a few slips, call them freudian slips almost hinting that should illinois get in big trouble, probably the federal government will find a way to help. this is nothing that i want to hear even talked about indirectly. do you think this will be an issue at some point? >> it could be. and let me be very clear. in nebraska and all across america, i just chaired the national governor's association this past year. americans do not want the federal government to bail out states that have failed, that have failed to adopt a balanced budget, that they continue to raise taxes. that's not what we want as americans. we want states to control their spending, create more jobs. so i certainly don't think the
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federal government ought to bail out a state like illinois or california if they can't do it themselves. >> governor, it's been a pleasure having you on. >> thanks very much, rick. we are getting news out of rajoy in madrid. . the question is, how will spain's budget decisions affect markets around the world? we'll find out during the european close which is about four minutes away. bob...
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as we said, rajoy is finallyic paing his announcem t announcements on his 2013 budgets. >> before we go into what is happening in europe, we have speculation that china could move on some sort of easing overnight and shanghai was up 2.8%. europe was trading higher on the session today after prospects that something could come through. as carl said, we have the spanish giving their new conferences. actually, the deputy prime minister of spain, have you met her before? that is not the deputy prime minister of spain, that i can asmur you. so you've had the cabinet meeting and she is essentially with her colleagues laying out what is going so happen. the new budget, what is important, i think, from an investor's standpoint is she's said there will be 43 new laws enacted in the next six months to basically deregulate the economy. this is important because you
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might believe deregulation reform is what spain has to do. but it also potentially unlocks what the rest of europe has been asking spab to do. it might be the precondition so everything is sorted so when they say, actually, now, can you come and help us? the ecb goes, oh, yeah, all this stuff that you announced back in september -- >> european markets are closing now. >> in the meantime, there's green across the screen, as you can see. a lot of that has to do with information come out of china. one of the advisers suggesting that the bank had underestimated the degree of the slow jan around the rest of the world and that they might react, if there was a further deterioration, and boy, do we know parts of europe are going back into recession. so arguably, they are checking the stage tore further cuts. let's come back to where we are on spain. yesterday, of course, you had that selling. you could call it profit taking, nervousness about protesting the street. selling in many, many asset
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classes which pushed the yield above 6%. we have just come back down below this today. i just for the sake have completed the two-month chart and the effect that draghi has had when he said he would do everything to save europe, bringing those yields right down as you can see. today, it is the banks that have broadly led us higher. it's not a huge rallying day. some of those who were hit broadly have come back, as you can see. credit agricole, it's not a huge move on the bank, but it's worth mentioning. h&m missed its profit forecast today. it's kind of a complicated story. the stock down almost 6% as you can see. it's complicated because that's a complicated business. they buy a lot of their stuff in dollars. they sell a lot of their stuff in euros and repatriot it into the swedish crown which has been escalating. i'm not quite sure how much of an indication this is about where we are on the economies of europe. obviously, it's poor. obviously, the very good weather hurt them during the course of
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the heat wave hurt them during the course of the summer, but it's worth mentioning, nonetheless. the paris auto show got under way today and what struck me as everybody lays down what's going to happen to them is the fact that w's management is talking about being relatively stable here in the united states, russia being dynamic, but it's not a situation they've had to encounter in 20 or 30 years in southern europe. as a result of that, they believe some carmakers, and i believe they mean auto part manufacturers may not survive. vw down 2.3%. >> and getting more headlines on rajoy, simon. the deputy prime minister's government to tap $3 billion euros from the social security reserve to cover liquidity needs. you're beginning to get a sense as to why they might have delayed this until after the market was about to close, right? you think there's problems on the strooits streets right now.
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>> i guess so. i imagine that's not their chief focus. just the dynamics of trying to get the whole thing together and sort out amongst colleagues what you're going to do. they've raided the national lottery to pay for some of it. they are scrambling around to do whatever they can so they don't have to approach europe now. really, i think they're quite like the italians, not quite so demeaning. these governments are getting kicked out all the time. rajoy would quite like to stay in power. it's the nature of the game. >> decree. as more headlines come out, we'll, of course, get them to you. let's get more from gary back home. talking about the inflation riddle, gary. >> we call this the inflation riddle. copenhagen, as a matter of fact, simon just talking about europe, the reason i bring it up is you've probably seen their container ships around the world.
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18 mobile maersk. major logistics and shipping company. i'm familiar with the business because my good friend peter who ships products in and out of china has warned for some time over the last years about what's really happening with china. so ap mobile comes out and say they're reducing capacity dramatically and raising shipping rates. they say they're going to cut capacity 9% on its asia/europe routes and that's not a surprise to people like peter because as less demand comes out of europe, there's less supplies going from china to europe. but they also say because rates on these routes are down 30% in august, they are going to have to raise ritz around the world. how does this have to do with the inflation? it's going to take us back to quantitative easing and the fed. the fed looks around and they
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see no inflation. it's not just the fed, it's central banks around the world. but when you have real businesses and companies dealing with the economic slowdown, it is raising the rates and when companies have nowhere else to go and they're going to have to bas pass this on, who do you think eventually gets it passed on? it's the end consumer who is buying that product at walmart that is coming out of china. so here it is. rely on the fundamentals. this statement out of apmogel yesterday tells you that there will be inflation given the economic slowdown, not the deflation that the central banks around the world are projecting. >> gary, thank you very much. gary back at headquarters. bob pisani is here and we were talking during the break about the market. and it is the worst week tech will i for the s&p in 17 weeks. but we've not had the dramatic days, no dramatic single day. >> yeah. i go away for ten days and i come back and everybody and in a horrible mood.
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we were at 4 1/2 week highs a week ago or two weeks ago. what we had on tuesday was somewhat important. we had what's called a 90% downside today. that's where 90% of the volume, 90% of all the stock res on the down side. normally when you get that and on very big volume, normally within a day or two, you should get some kind of bounce. if you don't, then you get some technicians squawking saying, it's crazy. we're getting a modest bounce today. let's call it a sideways move on the market. but that's important for stabilization. and despite the crummy economic news we got this morning. here is your move to the downside. what i want to point out is that for all this worrying about we're on the down slope, the s&p 500 is up 2% this month, 2.4% and we're only 2% off that 4 1/2 year high that we hit two weeks ago. so correction, forget about it. we're not even close on any of the major indices right now. take a look at what's been up this month. a very broad swath of the market is up. it's not like, oh, just material stocks and industrials are on
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the up side. materials, financials, energy, consumer staples are all on the upside. and if you drill down a little bit further into the market, you'll see most of the major sectors are on the upside. so you can see consumer stocks, pharmacy stocks are doing better, put up the other sector stom stocks moving on the up side. but it's a fairly broad swath of the overall market. so banking stocks are the up side. most of the big commodity stocks are on the upside. these are stocks in different sectors. gold and silver stocks had a particularly strong month overall. the reason i'm bringing this up is you can't just say one part of the markets are moving forward and one part is not. and what about the housing market? we haven't had very good housing data in the last couple of days, including the ones that we had today. but here is the big home building index. this is the etf for home builders. it's very active, got very heavy volume in the last several months. we've hit 4 1/2 year highs. we're off. we're off about 4%.
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maybe close to 5% on that. but still, that's a pretty modest move to the downside, considering the move that we had from here to there, which was better than 10%, 12% move in the last couple of months. so overall, my opinion right now, carl, is while the attitude is a bit down, certainly concern about spain, overall, technically the market is holding up very well. i'll tell you what i would be really worried about. if we close down are 150 points today, after the 90% down side on tuesday, the failure to get a bounce today, that would be a worrisome sight. as of now, that's not the issue. >> we had talked about how fe x fedex, intel, norfolk southern, there have been big warnings and the markets have not punished them too severely. >> and for whatever reason, the fed put, the draghi put, it's very much there and the markets are still holding up. >> it's good to have you back. when we come back, there's a bacon shortage coming.
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what is this global crisis going to mean for the price of your favorite bacon cheeseburger? danny meyer is the owner of many different restaurants in the new york area. he'll join us live to tell us how he's getting ready after a break. any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade. it's another reason more investors are saying... so i test... a lot. do you test with this? freestyle lite test strips? i don't see... beep! wow! that didn't take much blood. yeah, and the unique zipwik tab targets the blood and pulls it in. so easy. yep. freestyle lite needs just a third the blood of onetouch ultra.
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coming up on the fast money halftime report b, are we in for commodity corrections? delivering alpha trades. and a top analyst says sell hewlett packard. plus, we have the trade on research in motion before it releases results tonight. tune in, noon eastern. a global bacon shortage! we're all going to die! much later than we thought thanks to the reduced salt and nitrates in our diet. but still. still, we will all eventually die and without bacon in my mous mouth. >> listen up, bacon loafers. a british association of pig farmers is saying there could be a worldwide shortage of everyone's favorite breakfast meat by tend of the year. drought this usually is pushed up costs. pork is getting priceyer. we have a burger legend to talk
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about how a run on pork could affect his business and maybe your dinner check. danny meyer, of course, the ceo of the union square hospitality group. always good to have you back. >> thanks, carl. >> great to be here. one thing strikes me. a, the furor about this story and, b, the pushback online at least that it's not true. is it? >> here is what i would say. i think that the furor has to do with the fact that people adore bacon. they like it with their burgers, i think he would eat my happened if i had bacon on it. but i also think there's a little bit more to the furor than actually is true. >> really? >> here is the deal. bacon, in fact, is up in price, but it's not -- you're not going to have to wonder how to get bacon if that's really what you want for your family. i think a bigger story is how the drought and the commodity prices have impacted beef. pork is going up, for sure, but not nearly to the degree that --
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>> right. where are we in the narrative of seeing that when you get to the restaurants? when you make your orders, are you seeing it now? at what point will you be forced to change your menu prices? >> we're not going change our menu prices because one of the things we've learned over time is if you wait these waves out, skrenlly the commodity prices couple down. the other thing is, a lot of our restaurants take my will he no, north end grill, shake shack, shake shack goes through 2,200 pounds of bacon every week for our smoke shack. but we buy it from diamond ranch, which is a co-op of sustainable family farmers. what that means is they've already already paid a premium in good times so they can with stand this. so we've already found a way to pay almost double for our bacon what other people already pay without having to pass the price
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on. so this doesn't really trouble us too much. >> not to say our restauranteurs are going to be as disciplined. i think people may feel it as consumers. but another great example, chipotle is also in a great position because they've already paid a premium because they believe that hormone free all-natural is the way to go and as a result of that, this kind of bump up is not going to impact them. the restaurants that do raise your prices, you should ask them, what are they going to do when the commodity prices go down? >> that's like the banks and the prime rate, right? they're slow to bring it down when their own costs come down. while i have you here, calorie webs mcdonalds says they're going to start posting it nationwide. shake shack reached a point where it does, too. is that good for business or not? >> i think it's good for the consumer, ultimately. i think the consumers should be aware as to the calorie that's they're eating.
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are they good calories or bad calories? they're good calories if the food that you are eating corresponds to those calories. >> do you see consumers -- are some of the high calorie content calorie products selling not as well as they would have been? >> well, carl, we've had our calorie count on our website for the last year and a half. it's only been up on menu he now for about three weeks.. so far, we have seen zero menu shift. >> meanwhile on another topic, the times talks about the lists of potential restauranteurs that could bet the observation deck at the new world trade center tour. you're on that list, they say. i know you can't talk about that. but is it something you would want? everybody who lives and works downtowns remembers windows on the world. it would be a big responsibility to take that mantle years later. >> my understanding is that we remain the top three contenders. my other understanding is that this is not a restaurant, per
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se, like windows on the world was, but it's an observation deck that really wants to have great hospitality and food and beverage service and it would be an honor to have that opportunity. >> we'll see what happens. one of the websites sourcing the times says you're the best man for the job and the port authority should just give it to you, but we'll wait and see what happens. danny, thanks for coming by. >> always a pleasure. when we come back, he's a giant in the venture capital world of america looking to make your wallet obsolete. the ceo and founder of lemon will tells why he wants all your contents of your wallet to reside, yes, in your smartphone. y is 40,000 miles more than ford. and this workhorse gives you the power of a v8 with the highway fuel economy of a v6. incredible! right? an amazing test drive. i agree. [ male announcer ] it's chevy truck month. now during chevy truck month, get 0% apr financing for 60 months or trade up to get the 2012 chevy silverado all-star edition
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with a total value of $8,000. hurry in before they're all gone! a short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again.
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let's take a look at united continentat holdings. a 1.2% decline in passenger per available seat. that's one of the metrics people watch. despite the fact that they've had full planes, they've increased their capacity, carl. so it's always a question of trying to get those revenues come in and match the capacity level. >> what a couple of weeks it's been for the airlines in general. thanks, bertha, bertha couples back at hq. we're joined this morning by
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wenses from california. >> thank you, carl. >> i'm dying to hear more about lemon in part because with square and passbook, the new appear l app, it seems like this space is getting crowded very quickly. what is lemon and what are you trying to accomplish? >> lemon is a application that let's you take a picture of everything you have in your wallet, every card, every receipt, absolutely everything you have in your wallet and it creates a digital version of your wallet in your phone. if you ever lose your wallet, if it's ever stolen, you have a copy of everything in your wallet. we have a service that with one button we can cancel and replace all the cards in your wallet if you ever lose it or if it gets stolen. and then very often it's just easier to reach for your phone than to reach for your wallet when you need to access some of the information that in your wallet. >> you launched this in october 2011. you have some funding from a fund run by howard schultz who knows a thing or two about mobile payment systems.
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2 million users and it seems like you have to get through two obstacl obstacles. one would be infrastructure, just the ability to work with machines wherever you go. the other is security, which is largely in the consumer's head. they have to work there way around that. >> yeah. security is mostly a perception issue. having your wallet so your phone is a lot more secure than having your phone in your old wallet. when someone takes your car or when you have to hand your credit card to have someone go and run it, that's a lot less safe to have it a your phone encrypted and protected with passwords. we think this is something that is just like e-commerce. it took a few years for people to feel comfortable with that. we think the more time, it will take people to realize that it is safer than carrying a normal wallet. >> let's talk about what is in it for lemon. how do you make your money? 50i78 assuming at some point you have to charge a business a
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subscription fee? how is revenue generated? >> right now, the service is free. we have it, a subscription with extra premium features for people who need very specific services. the way we see ourselves making money in the long-term is because we think the wallet is a very natural way for friends to connect with consumers. when it's at the right time and at the right place and in the right moment. >> apple, obviously, when they launched their new operating system chose not to do what they call nearfield communications, at least right now, which some say would have rocketed this whole sector even more than it already has been. were you disappointed by that? and do they almost have to do that before lemon can really take off? >> no, you know, i wasn't disappointed by that. we don't see consumers asking for more payment. it seems like the credit cards are work, they're not broken, they work well, they have a great consumer experience and
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people feel fine paying the way they're paying with credit cards and even in some cases with cash. when we see how the average consumer reacts to the responsibility of paying with their phone, it's with interest but not that they're screaming for that. we think you can improve the wallet beyond the payment experience, around making their wallet more interactive. having the wallets tell you what are the balance, can i use these points here? is this coupon about to expire, things like that? >> we've had calling you the peter sale of latin america all morning long. that's the first time you've been given that implement. in general, how easy would you say it is right now compared to past periods to launch a company, to get vc funding, to make money once you have an operation going? >> well, with the progress in that front in the entrepreneurial system and innovation system in latin america in the last ten years are beyond my biggest
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expectations. and the changing how much easier it is today to start a business, to get funded, to grow that business. all of what happens in these last ten years, i thought it was going to take a generation. you know, we went from having no ecosystem for entrepreneurs at all to having some very good venture capital firms down there, a lot of investors, a very significant amount of entrepreneurs and some companies are doing extremely well. >> fascinating story. by that, i mean both lemons and yours. appreciate your time, wences. thanks for joining us. >> thank you for having me. >> wences from lemon and a whole lot more. don't forget to tweet us this morning. the bacon shortage in this country is coming. you'll have to start paying a lot more for pork products. so besides pork, what else should you be hoarding right now? tweet us at cnbc squawk. we'll get your answers, next. the best schools in the world...
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we've been talking about it all morning long, the coming shortage of pork in this cup. we're asking you besides pork,
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what else should you be hoarding right now and why? andrea writes sam adams utopia, what else besides beer .bacon do you need? leonore writes the extra, extra, extra large size clothing for all the people that ate the bacon. and one more, it would be newspapers. i have a new puppy. marcus aurelius. congratulations to you. >> big, old american cars, that's what i would horde. the new one webs they're like life boats to some of the old lincolns that would fit in the trunk. i also want to talk about spain. this is a very superficial first blush back seat as i start to use at the budget, it looks to me like basically a raid on money that isn't there's. higher taxes, doesn't sound austerityish or reform issue. it sounds like everything in europe that gets everyone in europe in trouble.
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>> and we haven't had time to see how the public reacts. i also see what they're calling a soft recession in 2013. i didn't know they came in the soft variety. >> no. the only soft recession is when you have a job and your neighbor doesn't. >> rick, we'll see you later. that does it for us here on this thursday. see you tomorrow. let's get to the fast money halftime back at hq. and welcome to the halftime report. i'm michelle caruso cabrera in for scott wapner. here is where we stand. session highs, the dow up 47%, .35%, 13,460 today. s&p higher by 9, 1442 and the nasdaq is higher by nearly 27, 3 the,120. guess what we're following? commodity correction. kathleen kelly updates us on her delivering alpha trades, why she thinks commodities are heading lower from here. and trading


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