tv Squawk on the Street CNBC March 6, 2014 9:00am-12:01pm EST
>> it's good, too. >> bacon and tequila, i like it. >> bacon and tequila with whipped cream. >> what? i like bacon, but, man, you guys are off the deep end with it. >> no. >> jane, thank you. >> bacon. >> i wondered about this guy and what happened to him. great to see you. right now it's time for "squawk on the street." ♪ i got to testify pick a spot looking extra fly for the day i die ♪ ♪ i'm the toughest guy good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange. david is off again today. got a lot to walk you through this morning including some news on retail, on restaurants. futures relatively steady after the mild declines yesterday. the ten year, jobless claims lowest since january. the bank of england and the ecb also held steady. europe's having a decent session and the nikkei above 15k. the roadmap begins with three big misses in retail, costco,
staples and children's place, we'll break them all down for you. paypal co-founder reed hoffman fires back at carl icahn and ahead of tomorrow's big jobs number weekly jobless claims did decline slightly as we said. we'll start with retail. as we mentioned three big misses, costco bigger-than-expected fall in profit as deep discounting during the holiday season hurt margins. children's place announcing an 18% drop in fourth quarter earnings. highly promotional market in severe weather and then staples missed on revenues said it's going to close more than 200 stores by the end of the year now that nearly half of its sales are generated online. people are calling it a triple whammy in retail and obviously tough news for obvious reasons. >> disconcerting mostly by costco because costco when i saw the number, hey, that's not so good but when i read the release they were telling you they were unhappy with their performance. it's the new pattern where someone says, look, it's not just the weather, we didn't do that well. food costs not that good.
foreign not that good. there's a currency switch. i think that this is the takeaway of a great retailer not doing a great job so that's more important. some of the places it's been iffy. staples has been downright horrible and i think the consumers are staying away from staples. people are saying i am not shopping there. big consolidation in the industry didn't matter. >> let's back up on costco. this was the height of the cycle of their fee increase which we knew was sort of a risk. they've missed now on estimates three times and this is the worst one and they don't give guidance so in a sense this is almost as much as analysts getting it wrong as well as the company getting it wrong. >> i think what's difficult they have such a big food department and they're not raising prices. and yet the cost of so many foodstuffs are going -- >> jane just did a big piece on bacon. >> yes. you got to pass your food price on or else you are going to get crushed. kroger has been able to pass on costs. they had a magnificent quarter today. this is the return of the old
supermarkets doing well and safeway being bid for and costco, i don't know what they have to do. they don't want to lose customers and they don't like to have a customer be disappointed. i went through the costco magazine this month and the heavy skewing is much more towards how to be able to get insurance. >> cars. >> cars. but not food and food has been a bear for them. >> they don't do buybacks regularly. they don't do things that would boost the stock in the short term. >> yeah. >> you are more interested in waiting for a better entry point here. >> i wish they gave us something here. it did say the last few weeks have been good. macy's reported a bad number and then said as the conference call went on that post-valentine's day it was good. stock was down a couple of bucks and then reversed and finished up and has been off to the races since, so maybe costco which is not a promotional company at all can say, look, we think things are more in line with the last few weeks but this is a disappointing number and food is such a tough business. >> you mentioned staples, they missed by six credibilities. north american comps down seven. but as we said nearly half of
their products are now online. >> right. >> europe was in the black. they i think had 500,000 products online. five times what it was at the beginning of the fiscal year, that's a silver lining? >> they are still a brick and mortar outfit. the competition in that space whether it's from costco or amazon is amazing. shutting 225 stores. i felt when office max and depot got together there would be a letup in price wars. it's a very competitive environment and i don't think people like to shop at staples. that would be a crisis. i don't know what i would do if i worked in the management of staples to try to figure out how to make my stores more attractive, but whatever they are doing it's not working. >> a lot of commercial space will come online between radioshack and staples and children's place. >> you are so right. and i know that some of the real estate investment trusts are indeed somewhat on pins and needles. don woody has a lot of businesses not under pressure. steve tanger from tanger factory
is saying you do not need to necessarily worry about us. but at the same time i do know that there's a lot of stores going under and you need to have something that is, like, you know, that is local or involves something that can't be amazon. pet food, okay? pet food. pet stores. >> right. >> because other was what is happening you are getting amazon and there's negative comments about bed bath and i know people continually think it's been amazon. yes, real estate is not going to be a charmed place, sears, kmart, good luck trying to sell a lot of >> referee:. >> i keep coming back to what shuts of starbucks told us a long time ago about peaking mall traffic. >> yes. by the way howard schultz telling you please stop fretting about the price of coffee. this is not the first rodeo of coffee. coffee up two bucks, brazilian drought. other analysts will sweat it and make you worry about it but they've got things locked in until 2015. and another big story ebay getting another defender against carl icahn, reed hoffman who is
a former paypal board member argues on linkedin that icahn's idea of spinning out paypal from ebay is short-term thinking. it says it still has massive growth prospects but to someone who isn't investing in the long term it's just a cash cow that's ready to be slaughtered. are they trying to circle the wagons? >> i guess so. i like if there's a debate about whether there should be a spinoff. i think the people whose integrity are being challenged are i would love to see counseled if i were involved in a growth industry. i have felt that more focused paypal away from the incubator that is ebay could really give a look at then on the line mastercard and visa. also i think paypal would benefit from a very focused management that says, listen, we'll be in that business and not worry about the gross merchandise that comes through the organization. you know, look -- >> you were siding with carl? >> i am siding with carl. i'm looking at this in many
different ways and i keep coming back to the idea that ebay is in a fight for its life with the amazon web services competitor, okay. ebay is -- traditionally has been saying, listen, korea's a problem, germany's a problem. ebay has to fix its problems and maybe if they were focused on ebay and not growing out paypal, ebay would do better. mr. done know he, i think his analysis that they should stay together may be anti-growth. versus what i think that they could get from these two different divisions. >> interesting. he has been, you know, the andreessen integrity question that you mention, they almost haven't dignified with a response at least not early on. the issue of the split they say they studied upside down, sideways, seven ways to sunday and they've been saying that consistently for weeks. >> you get this situation -- and eight want to analogize versus nelson peltz, they've done a lot of work and say, listen, the two companies do better together and yet there is a clearly a rigorous challenge to her view. i think icahn is offering a
rigorous challenge to the notion that paypal shouldn't be spun off. i got to tell you paypal would be worth a fortune. this market wants a new mastercard and visa, that would be the one, wow, in is terrific. i worry about square, i keep hearing about square, a paypal competitor. if they were to come public maybe you would see a valuation, wow, paypal is really being valued of a discount because of the jumble. >> carl has another letter today, another tweet this morning. >> a lot of letters. >> the consistency of his salvos is surprising. we'll see if it gets him anywhere. >> look, yesterday was the first time i saw -- no, monday was the first time i saw ebay didn't go up on the saber rattling, and wow, ebay don't ever forget if carl icahn had not made his initial noise the last quarter was bad, okay? it wasn't just so-so, it was bad, and that stock would be under $50 and carl icahn maybe that donahoe should say smoke 'em peace pipe. and i will tell you if donahoe
would be the worst provider over corporate governance, why is he wide open. he does not impress me as a man hidden by anything. he is not hiding. >> i agree. when we come back markets holding steady as we said ahead of tomorrow's big jobs numbers. we'll tell you how to play it. and nike announcing a partnership with the world cup and the ceo of nike. >> what a get. >> a dow component. >> great guy. >> will join us live a little later on for an exclusive interview about that, the whole state of retail under armour, uf name it. one more look at futures. the nasdaq is on track for five weeks up. hasn't done that since october. we'll talk about reasons why, jim, when "squawk on the street" comes back. tall the building is, or how ornate the halls are. it doesn't matter if there are granite statues, or big mahogany desks. when working with an investment firm, what's really important is whether the people
behind the desks actually stand behind what they say. introducing the schwab accountability guarantee. if you're not happy with one of our participating investment advisory services, we'll refund your program fee from the previous quarter. it's no guarantee against loss and other fees and expenses may still apply. chuck vo: standing by your word, that's what matters the most.
welcome back to cnbc, i'm michelle caruso cabrera at the breaking news desk. the euro crosses over a buck 58. you can see the strong move and it's a result of the ecb, mario draghi has been talking about in the wake of their decision to leave interest rates unchanged. what's moving the markets is what draghi did not say. he did not acknowledge any concerns about deflation nor did he talk about any extra policy measures beyond the traditional ones. there you see what is happening
with the euro. there are concerns within europe openly expressed in the market about whether or not europe is facing the possibility of deflation. draghi did not acknowledge that. the economic wonk-speak that he used that would give uf the code that lets you knows that's what his thinking, he said inflation exations over the medium and long term are firmly anchored. that would suggest at this point no other additional policy innerures. overall, though, still incredibly dovish. talking about extending, keeping the interest rates very low for an extended period of time and being willing to do all that is necessary but clearly from the market reaction today, the market was looking for the possibility of even more. carl, back to you. >> michelle, thank you so much. the fed's bill dudley just hit the tape talking about what he calls pocket of market froth. of course, richard fisher in mexico city talked about market valuation hitting eye-popping levels. it's a theme that cramer has hit consistently over the past couple of weeks including last night on "mad money." >> yes.
i think some stocks are frothy, but i don't see a peak here because many stocks are not frothy. it's a two-track market and unlike 2000 the bizarre frothy track is smaller than the reasonably priced track. that was not the case back then. i think you need to take profits but i'm not telling you to short them plus in many cases like google and facebook the companies were not like they were in 1999. they are earning gobs of money. they are trading on earnings. >> all right. this is an important -- >> yes. >> this is an important right here a lesson, a primer, a tutorial on what's going on right now. >> you've got a lot of companies that people were betting were just going to be growth on revenue and that's why you buy them and you look at a facebook and it flipped. it flipped at 25. there's another whole group -- another cohort that's the salesforce.com work day cohort. they are absolutely valued on revenue growth. they are momentum stocks and the final cohort that everyone seems to be possessed by which is the hope cohort. i mean, how can under what --
under what world can you expect tesla to be up at these levels? why, why, why, why do we have solar city at these levels? why could netflix, why is amazon. and the answer is, please, stop saying that's the whole market. you are ignoring a wells fargo that is trading at an incredibly low multiple. you are ignoring the general electric, the stock is trading ridiculous, it's trading as if they'll never get it right. certainly jeff immelt thinks they'll get it right. this track of normal valuation, 17 times earnings, that's not so bad. the sales -- times sales i could understand why someone wants to short salesforce. i think they will be obliterated if they do. and the final group, we see a lot of stories start joining the tesla group and we're seeing that in some biotech. i'll get worried. they don't remember what 1999 was like. we were valuing stocks as if they were all going to be amazon. and manies don't exist. 300 companies got wiped out,
okay. and we were valuing them as if every one of them would be the next coming of a yahoo! which was so valued. so, please stop comparing this. please. >> so, when dudley and fisher come out, right, and they talk about not just valuation but margin debt -- >> right. >> -- the spread between benchmarks and corporates, are they being paranoid? >> fixed income i don't like. i think that rates could go higher. i think the economy is a little bit stronger. fisher i totally discount. he's been so wrong. he's a really nice man which is what i usually say when someone is dead wrong. it's okay. you have every right to be wrong. everyone has a right to be completely and utterly wrong, mr. fisher has exercised the right repeatedly. he's a good man. dudley, i don't know, he's new. >> see how the hawks gather forces over time. >> the first 11 amendments, the bill of rights, the 11th is -- actually, it says you have every right to be wrong on air. how smart was jefferson? madison? foresaw cnbc.
>> today's the anniversary of dred scott. >> that was a bad decision. the crimean parliament has voted in favor of a march 16th referendum on whether the region should join russia a move that kiev has declared illegal amidst ongoing diplomatic wrangling the u.s. secretary of state set to meet with his counterpart in rome, let's send it over to jim maceda who is in moscow. evening, jim. >> reporter: hi, carl. well, that's right. the crimean parliament has voted today to join russia effective immediately. now, that vote has no real political weight until a referendum on the peninsula's future which as you suggested will take place in about ten days. also this parliament is not even recognized by the ukrainian government in kiev. but all that said, the vote will certainly raise tensions in crimea especially among the 40 or so percent of crimeans who are not either ethnic russians or pro russians.
some of those pro russians crimean mps are already warning that this vote means that ukrainian soldiers on the peninsula will be regarded henceforth as occupiers and we'll see how that plays out on the ground. meanwhile, secretary of state john kerry is meeting again with russian counterpart sergey lavrov in rome, continuing the talks about an end game in ukraine. one of the goals yesterday in paris was to get the russian lavrov and the ukrainian foreign minister to go face to face, be face to face in the same room, but that never happened, so kerry's at it again today. the russians, of course, say the new interim government in kiev was put in place by a coup, so when lavrov was asked in paris if he'd met his ukrainian counterpart, carl, he apparently replied who's that? that's how bad it's getting. back to you. >> man, that is -- that's cold. that's the cold back in the cold war, jim, thank you very much. jim maceda in moscow. when we come back, it's
cramer's "mad dash" as we count down to the opening bell. one more look at futures a lot of news going on. we haven't gotten to half of it yet. we're looking at an up open, though, "squawk on the street" from the nyse straight ahead. [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ my mom works at ge. for tapping into a wealth of experience. ♪ for access to one of the top wealth management firms in the country. ♪ for a team of financial professionals who provide customized solutions.
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boutique and trying to be broad, and gross margins are better and citi recognizes this, too. it's not a slouch story no doubt about it. but when i hear new management really taking on costs which has never been the case and really kind of blowing things out with the global brand initiative, i think tiffany's one of those great names that you've never gotten hurt by and now i think you will start making a lot of money. >> citi does take it to a buy talking about stabilization in silver. >> yes. >> my favorite line they say it's a company not just for gift buying husbands and boyfriends but a store where women can actually go treat themselves to something more modern and more moderate. >> right. if we can get in a situation, if tiffany management can change it so it's not a special occasion buy but an everyday place that women buy jewelry, i mean, you know, we don't really have that stock. i remember i was hoping they would come public because we wanted that stock. so tiffany can be more of a gift-giving stock, the blue box, always, always maintains its worth. >> although down here people
were comparing it to coach, worried about japan. >> yeah, do you know what, japan turned around, and this management team is kind of, like, it's kind of i'm hearing more like a nordstrom's management team and nordstrom's -- maybe better. nordstrom's has stumbled lately. i think it can be $120 stock. >> interesting. >> if they can get this thing to be an everyday high-price-point store then it really will be much more predictable. no longer episodic. >> that's a good point. it's the last trading day before the jobs number. the opening bell just a few moments away. "squawk on the street" coming right back.
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change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. welcome back. you're watching cnbc "squawk on the street." live from the financial capital of the world. the opening bell in about 3 1/2 minutes, a lot of corporate news we've not gotten to so far this morning, jim. you mentioned briefly reports of this consolidation in the grocery business. >> yeah. >> whether or not kroger wants a piece of this. >> this is pretty interesting. those that remember safeway, safeway went private. i remember the deal. kkr took it private. a string of deals about
supermarkets. for $5.5 billion and then brought it public again four years later for a very nice price and here it is again all happening. this group has been so challenged yet cerberus has done a great job with supervalu, including albertson's, shaw's. the idea that there's a bidding war for pieces of this after the run. safeway's up 60% in the last year. shows you there's hidden value in this group. isn't it funny that it doesn't seem to extend to whole foods which doesn't seem to be able to get out of its way. >> and low margin companies. >> yes. >> do you worry long term about amazon and delivery of fresh food to households? >> i worry because when you go up against a competitor that has no constraint to how much it costs, that is a dang -- this is like the competitor that has nothing to lose and you never want to go up against a competitor that has nothing to lose. if amazon were to figure out a way to fresh direct to 22 cities
and roll out in the next 90 days, costco. safeway. it doesn't matter. kroger. devastated. >> and costco's admitted getting online ramped is one of its challenges which brings us to what staples will do at the open and what office depot will do at the open. >> dreadful. >> staples we've been waiting for the turn for i don't know how long. they can't. radioshack we've been waiting for the turn on radioshack. i saw goldman reiterated its sell recommendation using a $1 price target. i always used to say how great is it that stocks stop at zero. >> yeah. >> what a windfall. >> yes. a floor for the price. it's a nice floor. you seem to have a lot to say today about nat gas. not just the micronews but also how it's playing out in geopolitics. >> we got to stop a couple things. one of them we got to stop immediately, this is "the new york times" article, far left page of "the new york times," that our natural gas is going to
help europe. there's only one project that is off the ground and that's cheniere, l & g has been going up every single day. they'll be ready. 2015, some people say put back to 2016. i'm going to visit it to my eyes on it myself. all that natural gas is locked up mostly to asia. but they had the vision, dominion, do you want to play it, go buy dominion, 3.5% yield. they have an initiative, and they can be done within the decade, and 2018 is the day, 2018 and not before then that mark pappas says we'll be able to export enough to matter. mark pappas the man who had eog the greatest growth story of our time. stop banking on the u.s. it isn't going to happen! okay? it's not going to happen. those contracts are tied up. the asians want it more than europe, forget about it! and stop reading the propaganda, the stories are dead wrong! >> lawve yeah, almost everything
written about that commodity is highly politicized. >> i didn't say pack of lies because i'm showing great restraint here. but you speak to suki who i had on at $8 and i said this man is going to reinvent the industry, and it's now in the 50s and he's printing natural gas and it's going to korea and spain but it's not going to germany! and that's where they need it the most. >> absolutely. especially now. there's a look at the s&p at the top of your screen and the opening bell. down here at the big board peruvian business organization in peru, and government officials highlighting investment opportunities in that country over at the nasdaq allied artists of america, a nonprofit art society celebrating its 100th anniversary. >> get peer ruru, these are pla that are part of the revolution in capitalism. of course, argentina, brazil and venezuela really setting us back. brazil trying to be a capitalist and india doing better if you want to look at the emerging
markets. >> brazil is an interesting story. >> i hope you go. >> so do i. >> it's a tale of two countries, not just two cities. >> yes. we're going to talk restaurants in a few moments but i wanted to mention the baird upgrade of yum. price target $87. your charitable trust -- >> we had a huge position. i had the same address as david novak for periods of our lives, we lived in our cars. david novak has assured me on "mad money" that the turn is for real. he's also possibly breaking up divisions. kfc has been the driver. the comparisons get very easy in china. remember, the chinese had a big attack on kfc. i think yum! brands is a mid$80 stock and it will go there in a hurry. >> darden in the meantime has cancelled the investor meeting and red lobster is a soap opera. >> take a look at everybody from brinker to penair to, of course, chipotle and you'll see the industry is not nearly as
challenged as clarence otis makes it out to be the ceo. he has a guts to put in a ruby tuesday comparison. ruby tuesday? i used to go to that for the big salad bar, come on, give me a break. i think this company has to revamp management. not just dump off red lobster. >> been at that game for a while now. >> and there were a prolonged period where he was best in show. but i remember danny meyer, the great restauranteur setting the table came on "mad money" and i told him how much i would like to have the cargo pants to go to olive garden and fill up on the rolls. jim, let me explain what olive garden and red lobster are, they are fueling stations. >> we exin plained costco at th top, leading the subpoena lower. that's almost a 4% down. >> you pay the best in the industry and the best health care in the industry and pledged the lowest price in the industry and yet will get hurt by doing that. you know? it's just right now it's a crunch moment for them.
>> and a lot of other retail, bed bath, lowe's, dollar kors. >> i like retail and lumber liquidators and tractor supply, they like that one. tsco, that had gotten hammered. big buyback. >> fedex cut by rcb citing weather, of course. i forget how many times weather was mentioned in the beige book yesterday. and, of course, we all remember the pre-christmas disruptions they had in deliveries. >> i think u.p.s. is the one i would want to buy at this point but fedex never seems to come down. u.p.s. had the problem because they didn't interpret the online rush so much for christmas. you know, look, by the way, amazon have you noticed is slowly creeping back up to where it was step by step inch by inch and amazon going to $400. >> 1878, jim, a new high on the s&p and neither the dow or the s&p have had two consecutive days down since february 3rd it's been more than a month.
>> geez, and yet when you read people talking about -- read and listen to people, everyone still has one foot out the door and everyone is worried about valuation. i love watching shows where a guy says, look, i hate the market. i hate it. i hate it. i hate it. but do you know what, i own disney! all right, i hate the market but i own pfizer! you know, they have something that keeps them in. >> right. >> but what they really hate is tesla. they hate tesla. i was out with someone for dinner and i hate linkedin. do you hate them more than tesla? no, i really hate tesla? >> what, because they missed the train? >> no. because it's not fair. i think that they think that tesla is a witch and they want to burn it and its shareholders at the stake. tesla, right now, i'm calling a sale on the stock and i'm taking my number to 500. >> going back to massachusetts. >> yes. >> that's interesting. i mean, i think -- i think there's a sense that when weather is used that it's an excuse, right? >> right. >> that they want to believe we're in a period of true
macroweakness not seasonal weakness. literally seasonal weakness. >> when it's 16 degrees and not that nice out, no one goes to bar san miguel. i sit at the bar and people will walk by and will come in now that there's a guy in there. when it's cold out there, now that i'm in the business, the weather, the weather. >> you are putting stock in what macy's has said, when spring comes back, customer shopping patterns normalize. >> we had national margarita day and we had a profit. the warm night and people come out. it's, like, cabin fever. i'm not kidding. >> we're going to have to wait to find out. >> i get that bread crumb analysis every night. and then it turned out to be fat tuesday. they come out for fat tuesday. >> yeah. >> they come out for vacation, you know, holidays. >> yeah. 1879 now on the s&p. we're going to watch that closely today. >> whoo. >> in the meantime let's check out some action in the energy and metals markets from the nymex.
hey, jackie. >> good morning, carl. we've got mixed action in the energy complex today. let's start with crude oil futures and talk about west texas intermediate, lower today but trading over $100, actually close to $101 yesterday a bit of a bearish inventory report wringing these futures down a little bit. in the meantime, i want to talk about brent because it's trading slightly higher now, the boe and the ecb leaving rates unchanged. there appears to be strength in global equities as well. note that the spread between brent and wti coming in over the past month about 25%. so, it shows you that u.s. crude is in navin favor and demand fo refined products from this country. let's talk about nat gas for a moment. it's been a choppy trade. up one day, down one day. today we're seeing a little bit of a pop but we're saying between 450 and 460 and that's what traders are expecting to see in the short term and they are watching this morning's storage report at 10:30 in the
morning. we're expecting to see a draw of about 135 billion cubic feet, less than what we saw this time last year, but higher than the five-year average of 105 billion cubic feet. last but not least i want to talk about gold futures because they are slightly lower today. gold traders very tentative right now. they are watching friday's jobs report very carefully and they are saying that will be the catalyst for gold. level to watch here, 1350. we got to get above 1350 to get the bulls back in this market. back to you guys. >> all right, we'll watch that level, thanks, jackie. in the meantime, bob pisani is down here on the floor watching what's moving. >> very broad rally, 2-1 advancing to declining stocks. put up the sectors. broad move. health care's up. financials are up. industrials are up. materials are up. really very nice. europe's up right across the board. asia closed up right across the board. so, we've got a modest global rally going on right now. one of the big problems i've seen in the last day or so is
people finding stuff that they consider to be relatively cheap. obviously this is not a great value pickers market. but the last bastion of sort of stuff that was underperforming has now moved in. i'm talking about bank stocks. i noted yesterday we had a very good run in the large cap bank stocks this week. so, bank of america. morgan stanley, goldman sachs, jpmorgan, they are up even more now on the week have all done really well. this is important because they've been considered relative bargains at least until this week. everybody seems to be, again, buying into the idea of discounting the macro that we've seen in 2014. not a lot of bargains out there. for retail you talked about it, the only thing i would add here is a few companies did mention this morning on the same-store sales that things had picked up in the second half of february. specifically l brands and cato and sumiez.
cato said february sales were negatively impacted by the winter storms the first two weeks of the month, however, the impact was offset by the strong selling in the last two weeks of the month. zumiez said sales trends improved for the month driven in mart by increased traffic. we cleared excess inventory, carried over from the holiday season. i don't want to make too much of it but i'm looking for some signs that business did get better on any signs of improving weather. otherwise as you have mentioned retailer disappointment, costco sales missed, children's place, missed. salesforce missed on revenues. promos will get very aggressive if the weather doesn't improve. have you been in the malls recently? the merchandise is already out there. we've got patio furniture at bj's, shirts, shorts, beach wear in all the malls in philadelphia that i saw, so things better improve. and tech ipo bubble i hear talk all week about it. we mentioned the huge tsunami of tech ipos coming in the next two
months but the numbers definitely, jim, support the idea that this wave of tech ipos isn't like the last one in '99 and 2000. the valuations and prices are much, much lower. very good stuff being done by jay ritter over in florida on that, showing six times lower valuations back in 1999. today than back in 1999. more on that a little bit later. guys, back to you. >> thank you, bob. a little sanity on that. the biotechs a little inflated but let's head to the bond pits, rick santelli, cme group in chicago. >> 8:30 eastern we had a drop in initial jobless claims of some substance and as you look at an intraday chart of tens, it would be the logical conclusion to draw that's why yields popped. except for a group of traders that have screens that can be parsed down to 30-second price intervals and it certainly looks like the dollar/yen may have popped first. but it doesn't really matter. we're snugging up to a key level in front of a key report tomorrow and it seems as though the data at least on jobless
claims helped fuel that move. now, if you look at a year-to-date chart you can clearly see that this is an area we spent a lot of time between 271 and 276. we're snugging up to the high end of that range. yield curve also points towards potentially higher rates. steepening on 2s to 10s, 5s to 10s and 5s to 30s steepening a bit a good directional play for 2014 in terms of individual maturities. if we look towards the dollar/yen as i referenced earlier, it looks about 827 that really started to pop. that still really keeps you out of trouble if you are trading interest rates and mario draghi and company, well, they really didn't do much but they cemented the motion that, wow, le gaarde and the imf were talking about rate pressures and he's leaving policy unchanged, that took the euro into a breakout mode as it's really running against most of the majors.
something to pay attention to. david, carl, jim, back to you. >> all right, thanks so much, rick santelli. straight ahead, some big problems for restaurants in this country from possible bankruptcies to the obviously terrible weather. they're in pain and facing more. that's after the break. (announcer) scottrade knows our clients trade
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restaurant industry's taking hits from all sides this morning. a new survey suggests that diners expect to spend 9.1% less on meals eating out in 2014. that's the biggest annual cut in history. "the journal" said that sbarro is going to file for bankruptcy and pork prices are spiking. that was on the "today" show this morning, jim. that's a big, broad economic story. >> there's kind of a mismatch
because we know that grain prices aren't out of control. tyson's big chicken stock's been incredible because the grain prices aren't that bad, but there are shortages developing throughout and i think that's what you saw costco. >> some of it's the drought in california, right? >> yes. big drought in brazil. the droughts all over the place. i know that dupont and monsanto have struggled mightily to produce seeds so that we have all the grain in the world but the livestock situation is critical. i don't want to throw the whole restaurant group under the bus because there's some restaurants that are performing so well that we have to say wait a second, maybe it's the style of restaurant. people regard chipotle has as a great bargain even though the price point is high. we've seen pretty decent numbers from domino's. that's takeout. papa john's okay. it's mixed, but red lobster and olive garden are terrible. dell frisco's has great numbers. >> i thought the survey was interesting. it's actually by a consulting firm called alex partners which does a lot of restructuring so i wonder if they have an interest in saying things need to be
fixed so to speak. >> i've used alex partners, they're pretty good. >> but i still think it's more case by case than people realize. because you have the right formula, people do go out and identify also know that the restaurant business is very weather oriented and, again, like i used the term with tiffany. it can be episodic. people want to go out and people want to stay in. if you sit down with mccormick spice which is the best indicator of whether people are staying in because people cook at home, it's been good, bad, good, i'm not going to say there's a secular trend against dining out. americans like dining out. >> we keep coming back to the peak mall theory. >> yes. >> but a lot of places like sbarro are in a mall. >> i think there was a tremendous overexpansion and we're only just now realizing that we're overstored. we're overstored in a lot of different sectors. we're obviously overstored in electronics. i think we are overstored in mall restaurants but i know there's plenty of room for -- chipotle would have to have your
real estate to move in. case by case. operators are doing incredibly well. you don't get a plus 9% comp say store sales unless you have something special. chipotle will tell you because people are playing in the wrong food chain. people don't want to eat processed world. a lot of chains that we talked about aren't doing well, i don't regard them as natural and organic. i just don't regard their food as being as -- done in a way that chipotle would approve. >> and then you look at a yum one of the best performing s&p components up 8% for the month, for the year you're looking at a -- well, it's actually just above flat for the month. >> i had thermoscientific and tmo on last night and people are talking about how the chinese are making a major attempt to crack down on air pollution. you may think that kfc is not the greatest food. in china that's why the scandal was so bad, kfc has been the hallmark of good food because they use american standards. so, i mean, you may think that
kfc's bad for you, but in china they're grateful. >> there's still going to be people that try to lump in the bad news from restaurants with the bad news prom retail today and say what does that say about an economy that is two-thirds consumer spending, right? >> i keep coming back to the moment in macy's call where they said valentine's day forward is good. costco i don't expect it to rally here, but remember, costco did say the last few weeks were good. >> february comps up four. >> every time you written off retail you get targeted 56 and bingo, man, you miss a really great trade. kohl's i saw a number bump today. kohl's had been a terrible performer and now they are doing quite well. there are guys doing poorly. guys executing better. and the guys executing better, mace si macy's doing great.
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time now for cramer and "stop trading," jim? >> the strength in the market is masking a very negative call out of morgan stanley this morning saying there is pricing, pricing problems, right now. nand, that's flash, okay, that would be horrible for sandisk and horrible for micron, i believe they would be down 2% to 3% if the market were not going higher. they are momentum stocks, two
stocks i've liked very much. i found this call jarring. jarring. >> what does it say about some of the mergers we've seen in that space in the past couple of weeks? >> says that maybe, look, they are finally oversupplying and micron had been on a major roll, sandisk was on a roll. i would short term sell these off the call. >> joy is lighting it up today. >> they are reporting a terrible number, they are in the guidance saying they are calling it, they've said coal has bottomed and volumes are up. i want to listen to michael ward on csx on "mad money," it's the big company most levered to coal and if coal volumes are up csx is going to break out to 30. i would take it if it says good things off the joy call and sell my croicron and sandisk.
short the 2014 and go long the 1850s. >> we are watching 1881 on the s&p. we got a jobs number tomorrow where the s&p has rallied. mark newton said 14 of the past 15 jobs fridays. >> that's incredible. i got to tell you, here's what i'm hearing. and i think that sara eisen said it yesterday when she said, look, a bad number it's weather, it's fantastic. a lot of ways to win. we're overbought and the market has moved up but the denialists are so strong. everything you see on your screen is wrong. take tesla. no. they're not all tesla, guys. they're not all tesla. elon musk is not the devil, okay? i mean, he's done a good job, but don't blame him for the reason why merck is breaking out here. okay? merck is like 12 times earnings. wow, oh, my god, they are paying 13 times earnings fork merck, short it. no! it doesn't work like that. this is not 1999.
this is not a situation where we are looking at breakouts. >> there's going to be a point, i don't know what level it is at but where you'll get cautious again and ring the register like you say. >> if we start seeing a huge number of ipos bob had a huge analysis of the ipos not being as expensive as he thought. not bad news being acted upon, costco, better than ever, take it to 120. that's what worries me. sorry to be modestly positive. >> we'll see you tonight with csx. great work. it's been a roller coaster of a week for the markets. how should you position your sufficient ahead of a jobs number. and later the ceo of nike will join us for a first on cnbc interview as the company prepares for its big partnership with the world cup.
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seemed to think rates were appropriate at the mix they're in versus potentially some expecting there would be more liquidity and more stimulus and a lower rate of sorts. that didn't pan out. euro fine. 138.5 right now. and here we go on january factory orders. number coming out. down 0.7 of 1%, we were looking down half of 1% and we ended up with a smidge more and the last look actually revised down as well. orangely released in december is down 1.5 and now stands down at 2%. factory orders i'm sure that weather will be considered a factor. we all understand that. but how much of a factor is where the traders will make or lose a lot of dough over the next couple of months as we get better data points. >> not having much of an impact on the market. down the high of the session. let's get to steve liesman for more on that question how much of a weather impact, steve?
>> yeah, it's a big weather impact and i don't know what the market's tolerance is going to be for the jobs number tomorrow, sara. i think that's really a big question. the estimate right now is right at 152. 152,000. but what if there were only two digit and not three. let's look at the case for a weaker jobs report in addition, by the way, to the number you just got which is a revision to the durables number down 0.7. 119 womentions of the word weatr ten times versus previous ones either last month or a year ago. the isms employment industries down and the service employment index at a four-year low. adp weakest three-month average since january of 2013. and rick was asking is something else happening here. how will we know? pretty much jobs report tomorrow is fairly well discounted. i think the market is braced for
a weak report. but you got to get some snapback and it's got to come relatively soon and start showing up in the data as the month goes by and i think that's really what the market will be looking for. i've been rather amazed that the market has looked straight through this. it rallied on days with weak data and seems to be looking through it and discounting the weather, carl. but right now they'll give i think that jobs report a pass tomorrow morning, carl. >> we've rallied 14 of the past 15 jobs fridays, steve, the past ten in a row. >> and, you know, with pretty weak economic data. days where you do what rick is doing and i think, you know, saying is it all weather and the fact that you can't know. dudley's out with some comments and interview with the "wall street journal" saying it's hard to look through the data. that's really the bottom line, you just can't know. >> steve, we'll see you in a little bit. steve liesman back at hq. costco down 3% after reporting the bigger-than-expected fall in profit and weaker gross margins especially and fresh food especially during the four-week
holiday selling season. let's bring in the managing director with stern ag and courtney reagan joins us for the conversation as well. guys, good morning to you both. >> hi, carl. >> chuck, i can see missing once or twice but three times and this one is the worst of the three. what's going on? >> right. yeah, you're right. three straight misses from costco. this is the worst miss since at least 2002. i think, you know, some of it's transitory in nature. some of it was the weather that you and steve were speaking about earlier. some of it was margin pressure in the fresh food category. we think a lot of it is temporary. we think some of the foreign exchange translation hit that they're seeing will start to subside and i think the bottom line is, you know, costco sales continue to be strong. the membership continues to be strong and the balance sheet is extremely healthy. and i think the key for investors is when does costco start to buy back some stock. >> courtney we know that costco has the unique philosophy when it comes to the street. they don't do a lot of short term things like buybacks.
that might be hurting the short-term support you'd ordinarily see? >> that's true. not everyone things this miss or string of misses is going to be a permanent partner. some are saying take the opportunity to buy on the weakness, the fundamental story at costco is still very strong. i think the margin story is an interesting one. i'm surprised we didn't hear about more margin pressure from more retailers after this very highly promotional holiday season we talked about. but other retailers were holding up fairly well amid all the promotions. i want to watch it with costco going forward and how well or how much they feel they have to compete in that area. >> let's bottom line it here. this is a very different business model from other retailers, as you know so well, they are trying to drive memberships, they are discounting on the discount to keep the members coming in and that's where the profitability comes in. had if they didn't pass on higher protein costs let's say chicken during this period, it's not the end of the world from a
long-term story. it's potentially a loss leader, isn't it? >> that's a great summary. costco's model is drive the membership. the renewal rate is 90% and they've gone up a thousand basis points. costco does the best for their customers. they think about the customers first, the employee second and their shareholders third. and there's days like today where it hurts as a stockholder but people get that costco invests in traffic. and it's the most consistent and strongest in retail and every now and then you'll see a margin implication. but the model is so sensitive to earnings. every one basis point is worth two cents of earnings for costco. a ten cent miss is five basis points. it's not the end of the world here. >> hey, chuck, to what degree, i mean, i'm told we're at the height of the fee cycle, meaning that all the membership fee hikes from a while back are now hitting people as their memberships come up for renewal. was that a mistake? >> oh, no. by no stretch of the
imagination. costco has been raising their fees for the past 15 to 20 years. usually $5 every 5 years. but as i said, the renewal rates despite the membership increases have gone up well in excess of 1,000 basis points. currently stand at 90%. by far the best membership model in retail, so we don't think it's a mistake. and to your point, this quarter actually, the second quarter from a year ago, is the peak of the mfi cycle, so the comparisons in mfi get easier and the core company sales comparisons get easier and we think those two factors are a large reason why the stock is only down 2%, 3% today. >> i have a question for you about the international exposure, costco getting hit with some of the foreign exchange headwinds. some of the weakness there. i'm wondering when you look at the retailers of the group. you can clearly distinguish who has a big domestic presence and who is a u.s. retailer and has the international expoure. is that what analysts are doing when they weigh the retailers esfortunes this year.
>> you certainly have to. costco mentions currency fluctuations every time they put out a financial release because they have to. gap is another one after the bell that has more of an international presence than perhaps some of its direct competitors so it's something you have to pay attention to, sara, i know you focus a lot on the fluctuations in the dollar and that can make a difference depending on the time of year, depending on what's going on with the currencies, so you would be remiss not to consider that when you are looking at the retailers alone or comparing them side by side as far as investments are concerned. >> before we let you go, we want to mention staples, of course, which is taking this big charlg p charge to cut 225 stores. regular viewers might have expected that's on the cards. i want to play a clip from the staples co-founder tom stemberg recently. >> staples 40% of its sales are on online. as online grows, you won't need
as manier tos but they probably have to be smaller. in their case the challenge is to downsize stores and i'm sure they'd like to do it more quickly than today and doing a lot of it. >> courtney, do you think we'll have more capacity taken out? >> i do. the online sales were 40%. and today we learned that the company says they're 50% of their sales are online. it makes more sense to make the footprints smaller or consolidate the total number of stores altogether. i don't think it's a staples-specific story. i think many retailers will be looking at this. we heard, of course, from a number of companies including radioshack but even macy's whose obviously a success story in retail scaling back the number of stores. this will just happen as online takes more of a share. >> all right. chuck, courtney, thank you very much, guys. we'll keep an eye on all the names today in what is turning out to be a tough day for retail. here in new york we know our pizza. >> the meeting isn't until 3:00
but i like to come to new york a little bit early and hit some of my favorite haunts, like right here is my favorite new york pizza joint and i'm going to go get me a new york slice! >> we miss that show. according to the "journal" today pizza chains sbarro could be out of dough. they could file for bankruptcy as soon as next week. sbarro is to pizza as blank is to blank. tweet us @squawkstreet and we'll get your responses later on this morning. markets are at record highs but how should you be positioning yourself ahead of the big jobs report tomorrow? a superstar panel next. and the ceo of nike will be joining us for an exclusive interview, the world cup, johnny manziel and more, mark parker, the ceo of nike later on in the show. life inspires your trading. tdd#: 1-800-345-2550 where others see fads...
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investors. jerry, you say the economy is in somewhat nirvana for stock market investors. what do you mean by that? >> well, so much of our last five, even ten years has been wrapped around this notion of volatility where there's some event either good or bad that investors have to run to and either own or not own any stocks at all. it was obviously reflected in the way the economy moved for the better part of the first decade of this century. and now what seems to be the case is the economy's in a much slower but much more persistent growth pattern so this two-ish percent type of growth will be with us for maybe a lot longer than we think. what's interesting about that stocks will gravitate to higher valuations under a more persistent and even slower growth economy. and those valuations are what reflected by the way investors react to things like the ukrainian situation where you see a 24-hour, 48-hour drop and then investors come flowing back
into that because underneath these things is the good persistent growth in the economy. >>im, how do you square that, then, with the fact that the ten-year yield can't break out of this range, 2.7% record high stock market. is there a disconnect there? >> i don't think so. i think the reason that the ten-year yield has stayed in our minds so low is that the u.s. has been seen as a safe harbor given the issues in emerging markets. not just the ukrainian standoff but the slowing in china and brazil. the continued oversupply of commodities. all that means that the u.s. is seen as a safe harbor which has kept the treasury yield down. but i do think that the fundamental strength of the u.s. economy will prove durable. and i cite three factors for that. one is plentiful and cheap energy. second is product evident. and innovation in the u.s. economy. and the third is the housing market.
the housing market's been literally -- housing starts have been literally frozen for the last three months but i do believe the demographic factors mean that housing will get going again when we thaw. and so i think this slowdown in the economic data is strictly temporary. >> jerry, let me be anecdotal with you and forgive me for doing it. you are talking about a persistent, slower-growing economy and that's good for stocks. what if the persistently slower-growing economy actually changes people's behavior? there's a large number of people who anecdotally think we're in a depression. there's a survey anecdotally in "usa today" saying that people will cut their restaurant spending by 9.1%. mall traffic is down and one of the big pizza chains sbarro that is potentially going into bankruptcy. again, i would say it's anecdotal. but doesn't that worry you, jerry? >> not really.
if that's in case the fact and it has been for five years. think about the other side of it for a second. if people are using less discretionary spending, that flows right into savings. that savings ends up going somewhere and quite frankly the individual is not going to do much with a 2% return. in fact, that savings is going into stocks. the same is true with corporations. if they're a little hesitant to invest directly into new plant equipment, they're buying back stocks and they are doing things good for the market. >> don't you remember the paradox of thrift that all kids are taught at school if we all start saving more we go into a depression, that's what happens. >> it has been the case in the past, but as we talked about, there's still too many other underlying growth patterns. we need to build 1.5 houses a year. we need to replace the automobiles. we need to do a whole lot of things in this economy that are going to sbarro or not going to sbarro isn't going to effect.
i think you have a great, persistent growth pattern that sits underneath things and i think that's what's going to build and build and build in terms of confidence going forward. >> it's a great debate the economy versus the stock market all ahead of tomorrow's job report. thanks for joining us with the insight, jim and jerry. >> thank you. crimean's parliament votes to become part of russia the referendum set march 15th. for all the latest let's get to jim maceda in moscow, hey, jim. >> reporter: hey, carl. well, that's right. the crimean parliament has voted today to basically secede from ukraine and join russia effective immediately. that vote doesn't have any real political wait until the referendum you referred to on the peninsula's future whether it joins russia or whether it stays as part of ukraine. it will be a two-part referendum or two-question referendum and that takes place in ten days. and the parliament is not recognized by the ukrainian government in kiev.
still the vote is certainly going to raise tensions. and the temperature. especially among the 40 or so percent of crimeans who are not ethnic russians or pro-russians. by the way, some of those pro-russian mps today are already warning that this vote means it's the russian soldiers in charge and the ukrainian soldiers who are on the peninsula will be regarded henceforth as occupiers. meanwhile president obama signed the executive order today authorizing sanctions he said presumably the freezing of assets in the united states to punish individuals and entities who threaten ukraine and specifically it refers to russia's military intervention in crimea which would suggest vladimir putin. and already, carl, the russian parliament is preparing here in moscow a tit for tat bill that would seize properties owned by u.s. and european companies doing business in russia. so, you get that sense that there's already a kind of retaliation mentality here in
moscow. back to you. >> that's going to be a lot to watch back and forth for a while here, jim, thank you, jim ha maceda in moscow. it's the rivalry in the world cup, it's nike and adidas making their presence known in rio and the ceo of nike mark parker will join us exclusively to talk about the games, their new partnership and more. but coming up immediately after the break eric schmidt and jack dorsey are betting big on the next business, the company being called the open table of travel. the ceo of peak is up next. [ male announcer ] how can power consumption in china,
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welcome back to "squawk on the street." check out shares of pandora plunging a disappointing audience growth numbers in february. over the past four months listening hours have been decelera decelerating. in addition the company is going to stop providing monthly metrics on user listening hours. that stock is currently down 7% in today's tradings and shares one to watch. back over to you. three months ago we introduced you to peek.com a travel start-up backed by big silicon valley names like jack dorsey and eric schmidt. now the start-up that come call the opentable of travel has announced completion of a second round of funding for more than $5 million and it includes orbitz and hotel tonight board member brad gertsner and jeff
flehr, we welcome back the co-founder and ceo. it's with trepidation we have you on because last time you were on i think we crashed your site. >> you did. you did. but we're glad to be on again and this time hopefully we can withstand it. >> okay. listen, let's just remind everybody what you are trying to do here. you are catering to a large proportion of the travel and leisure market that simply is unable to book people online despite the fact that's how everybody's searching. >> yeah. so, we're one-stop shop that helps travelers and locals to book activities so that might be a kayak tour or a wine tasting. what we discovered is that when it comes to activities, a lot of the operators aren't online. so, less than 30% of activity operators in america actually have online booking capabilities. so, peek.com provides a one-stop shop for travelers to be able to book activities and we also provide a whole suite of back-end tools for activity operators to manage and run their business so they can take
online booking from their own website. >> obviously there are some big names, jack dorsey and eric schmidt were in the bag last time round and now you've got other big names on this funding round. and it's quite a small amount of money. are you deliberately targeting big names, that, that connection will actually open doors for you and get you profile even offering some of those stakes at a discount? >> no, we've not really had a situation where we've had to offer a discount. what we've seen is there are really strategic investors we can bring in. as an example someone like jeff flehr has a lot of tools to allow online booking capabilities. what we're trying to do is bring together a group of people who can help with every aspect of our business and that's our top priority. >> how do you see yourself? are you now on this second round of funding a technology company that's looking to get bought by some of those great behemoths in the industry or are you a standalone?
how much money are you investing, for example, in your sales force? >> so, we absolutely wanting to be a standalone company. and i'd say, you know, about a third of our operations go towards sales. and the rest is really in product and ops. >> just before we let you go, what sort of growth have you got at the moment albeit from a small base? >> we've had 70% month on month growth over 2013 in bookings really strong growth and that's what the funding is really go towards to help us sustain the growth and expand into new markets. >> nice to see you again. >> thank you. >> thank you. nike ceo mark parker is going to join us exclusively after the break. so, do not go anywhere. ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees.
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welcome back to "squawk on the street." we are waiting for the department of energy to release its natural gas weekly storage report for the week ended february 28th. expected to see a drawdown of 135 billion cubic feet, this would be more than we saw last time this year. but more than the five-year average as well. we're waiting for this figure to come out. remember, this is a really volatile trade because the weather has been very volatile and extremely cold out and demand has been high. but some traders are saying as the temperatures start to ease back up, remember, spring is just around the corner, we could start to see the trade even out a little bit and we'll have a little catch-up period on the inventories before the heat starts in the summertime.
of course, the d.o.e. is going to release it at any moment right now. last week the draw was 95 billion cubic feet so that was a little bit of a bullish number for natural gas and we did see prices rise, but this week, again, traders are expecting to see this draw steepen just a little bit. it will be out. okay, that's the bell. looks like our draw is negative 152 billion cubic feet. that is a bullish number. watching these prices right now and they are increasing. the traders telling me a bullish number like this could send prices up to 475 breaking through this resistance of 460 which looks like we're about to do at any moment at this point. so, of course, natural gas moving on this number, guys, back over to you. >> thank you very much, jackie, doing the yeoman's work at the nymex. let's get to dom chu and the market flash. >> kroger is on the rise, posting better-than-expected fourth quarter profits citing
its response to the bad weather as the reason why. it also forecast a higher-than-expected full-year profit as it benefits from the acquisition of the grocer harris teeter. and kroger up on the news. back over to you, sara. >> another good cincinnati company. dominick chu, thanks very much. stay with us with "squawk on the street" and we're talking to mark peeker when we come back the ceo of nike. ♪ ♪ [ male announcer ] help brazil reduce its overall reliance on foreign imports with the launch of the country's largest petrochemical operation. ♪ when emerson takes up the challenge, "it's never been done before"
victims of the allen stanford pondzy scheme are about to get a little more of their money back but it's just a drop in the $7 billion bucket. our senior correspondent scott cohn is at hq with new exclusive information about where the money is. >> $18 million that had been parked in canada is scheduled to be turned over today but that's next to nothing when the actual loss is more than $5 billion and as you said $7 billion on paper. so, where is all the rest of the money, that thousands of investors from around the world entrusted to the billionaire man from antigua by way of texas who
is serving a 110-year prison sentence? the court appointed receiver is set to find the money. we sat down with him in washington. and he's never done a tv interview before, he said most stanford spent but a lot of it he contributed to people and institutions. >> we had to sue the democratic and republican committees to get back over a million dollars. that shouldn't happen. we had to sue them. stanford had no right to give them the money for political contributions and they had no right to give it away. we have other politicians that still have money that haven't given it to us yet. the other is the university of miami, they got $6 million to do a study for coral in antigua. we need to get it back and distribute it to the vic tomorrowvictims. >> what if they put it to good use and no harm, no powell. >> there was foul. it came from fraud victims.
>> among the politicians who kept stanford money, president obama and senate minority leader mitch mcconnell though he said the amounts are not worth the cost of a lawsuit. where else might stanford have hidden some of his loot? we'll have that story later on "power lunch." carl? >> man, the webs of this crime just continue to amaze. thanks a lot, scott. the situation in ukraine remains volatile. discussions around sanctions against russia are picking up. let's get john harwood's take in washington. good morning. >> good morning, carl, the administration has been saying they were preparing sanctions to be imposed on russian officials and the russian government. today we got news that they've pulled the trigger on those. both visa sanctions and potential financial sanctions on the assets of some of those officials who were involved in the chain of command in the events that included putting troops into crimea and seizing control of the situation there and violating the territorial integrity of ukraine. they did not name the officials
who were involved, although the administration said vladimir putin was not one of them. they called it a on a conference call this morning a flexible tool that they can use depending on whether or not russia escalates or deescalates the situation. in fact, the new factor today is the referendum that's been called in crimea which is something the ukrainian government, of course, does not welcome because crimea is dominated by russian speakers. i think the administration's still pinning hoping on the diplomatic process that john kerry initiatived yesterday talking to his ukrainian and russian counterparts hoping to get the sides talking directly. russia is reluctant to do it because they don't recognize this new government. we're at a bit of a stay sis at the moment and trying to give diplomacy a chance to reverse this situation. >> okay, john, thank you very much. a very complicated situation. john harwood with the latest on the ukraine. still ahead on the show, the exclusive interview with the ceo of nike. you don't want to miss that one.
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and it's as leonardo dicaprio is to the oscars -- >> that's a good one. >> and mark tweets as styrofoam is to landfills. jay tweets as radioshack is to cell phones. it's a good collection. >> i like sbarro pizza and i'm a new york pizza fan. you are the president of that club. >> you can join if you like. >> i always go. and the garlic nachs are pretty good. mark parker joins us for an exclusive interview. "squawk on the street" will be right back. you can't always se. but it's our job to find them. the answers. the solutions. the innovations. all waiting to help us build something better. something more amazing. a safer, cleaner, brighter future. at boeing, that's what building something better is all about. ♪
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nike is out today with what it is calling a revolutionary new soccer cleat for the upcoming world cup. the high-top boot that uses nike fly net technology to give players glove-like fit and better control over the ball. oit all part of nike's big strategy around the tournament and nike ceo mark parker joins us exclusively now with more from barcelona where the product was just unveiled. mark, good of you to be with us on your big day. on these shoes, you call them revolutionary. why are they better than anything else out on the market? >> well, this is a shoe that's actually designed for a specific type of player. kind of a creative attack player
if you will. and the shoe is actually designed using nike's fly-knit technology so it's a radical new type of process that we're bringing into football boots for the very first time. and it essentially creates what we call a second skin on the foot. so, the player actually has a lack of sensation. it's almost like they're not wearing any boots at all. the feedback that we've had from many, many months of testing has been incredible. >> yeah, mark, i was just going to bring up the fact that actually adidas rolled out a knitted boot, too. it looks kind of similar. why the nike knit over the adidas knit? >> well, i can't speak for our other brands and what they're doing so much as the work that we put into this boot. the years of testing. this has been four years in the making. the intricacies of the design, the level of performance with the nike fly-knit technology in
this new shoe. we call the magesta is above and beyond anything that we've ever done certainly and i think the players have actually voted with tremendous feedback. very excited to see this on the pitch in june and july at world cup. >> i know basketball shoes, running shoes you see them all over new york city. huge consumer markets. what about soccer shoes you don't necessarily see those on the street. what's the potential there for the soccer shoe market. >> well, the football or soccer as we call it in the states is a huge market. now obviously it's a different market because you can't wear football cleats on the street. that said, the cleated football market is actually quite significant. football is the largest, most popular sport in the world. so, what we see with football is a market that is highly energized, excited to see new innovation coming and that's just what we've got here just in time for the world cup. >> yeah. on your world cup strategy,
obviously it's a huge investment for you. it's a huge part of your strategy. what's the payoff, though? can you give us any sort of specific quantification of how you measure whether it pays off in terms of the boost for sales? >> yeah. obviously the world cup is the ultimate moment for the world's most popular sport so lots of fans. in fact, it's got the harkest audience, sports spectator audience in the world for this event. so, it is on center stage for the globe. that said our innovation for the world cup this year is more than we've ever produced for any major event certainly in the sport of football ever. this is the magista boot here is just the start. you'll see more innovation coming between now and the world cup. and we think that the impact it will have on nike is not just in terms of football and what we do but to reinforce our position in a leader in sports shoe and
apparel innovation. >> and a lot of that is the performance of the players. want to get your take on a similar theme here the olympics and the debacle with one of your competitors under armour and u.s. speed skating. what do you think about that? >> well, again, i'm not going to comment on other brands and their work. i will just say that dialing down the performance for a product at a top level with an event like the olympics is a major, major task and the work that goes in to working with the athletes to produce something that really helps them perform at the highest level is very, very significant. >> yeah. >> and that's all i'm going to say. >> you have experience with that. i know you came up through nike as a designer, performance, front and center, not just about the style. what's the biggest mistake these companies can make as they get to the top level, to the olympic games? >> well, you really have to have
a deep relationship with the athlete. and then work through those insights you get through that relationship to create real innovation and that means a lot of time with the athletes. a lot of time in testing. a lot of time to prove what you're actually creating is is going to work at the highest level. it's that deep commitment that is most important. >> i know you don't like to comment on the come petters but increasingly it's a competitive type of industry. under armour, it's the fraction of the size of nike. but it has the momentum. you've seen it until double-digit sales growth. is that something that keeps you up at night? is under armour a real threat for you right now? >> you know, i actually like to focus on the distance between nike and our potential versus the distance and our competition. i think as a leader we have a lot greater opportunity in focusing our potential going forward than we do trying to feel that much better than what we might be doing than anybody else in your industry. that's where we place our focus
and on the relationship with the athletes. >> on that relationship with the athletes a lot of people are talking about johnny menzel. are you close to signing him? >> well, we've been talking to johnny. he's an amazing athlete. we think he's going to bring a lot to the professional game. it's exciting to see what he's done in college football. it's exciting to see. >> we know there's a little bit of a competition there for johnny. also want to get your take on international business. obviously the world stage is the -- world cup stage is the best you can get in terms of international audience. i think something like 3.6 billion people watched it. it puts the super bowl to shame. international growth though has seen wobbly. is that something you're worried about this year? >> well, you know, we do business in 190 countries around the world. there is some macro economic volatility present at all times.
i really feel good about the position that we're in to deliver long-term sustainable and profitable growth. you know, we have a tremendous portfolio of categories, product types, geographies, an amazing array of product innovation and our ability to manage the marketplace around the world. it makes me feel incredibly confident in our ability to continue to grow profitably. >> i just want to zero in on china for a moment because that's in a bit of a struggle in the last year or so but it looks like things have turned a corner, the future orders segment in the last report pointed to growth. you see china improving this year? >> actually i feel good about turning the corner in china. you know, we're not completely around the corner but feeling good about the momentum that we have, feeling like we're laying the foundation for another whole round of growth in china. i was just in china a couple weeks ago. it went through the marketplace.
and again, really excited about the potential that we have in this country. it's the number two country for nike in the world. >> yeah, adidas yesterday actually mentioned ukraine as a risk for consumers there. the risk potentially for exchange rates. do you anticipate weakness from the ukrainian conflict? >> well, you know, as i said, we see macro economic volatility all around the world. it's present every day really, every year. particularly when you do business in so many different countries. but what really matters is the diversity that we have in our portfolio and the ability to actually manage through that type of an environment. i feel really good about where we're positioned. feel great about our strategy for growth. we'll see some head winds here and there. overall, i feel confident we will continue to grow profitably. >> want to ask you about b the united states. your home market. your most important market. what is the state of the u.s.
consumer right now and do you think the recent slowdown is really all about the weather? >> well, i think the weather has had an affect. obviously particularly in you're on the east coast, the mid atlantic, this has been a tough winter. that said, i think the consumer is actually building some confidence back up. we're seeing it in our position in the u.s., feel good about the momentum that we have in the market. it's our biggest market. people wonder can nike continue to grow in this market. i absolutely feel confident that we can. not just in gaining share but actually growing the market, expanding the market. i think the consumer -- >> looks like we lost the signal there. mark parker just talking about the state of the american consumer, the ceo of nike. i think we have him back now. signal from barcelona. mark rrk y mark, are you with us? >> i am. i'm here. >> okay. continue your thought there, about the u.s. >> okay. yeah, i was just saying that i feel very confident in where we
are positioned in the u.s. our ability to continue to expand the market. you know, as well as pick up market share. we're starting to see consumer confidence build up, certainly in our industry. we're not immune to some of the volatility in the marketplace but i feel, again, very confy comment terms of the brand, the product innovation, and really what's coming will continue to see growth for nike in the u.s. market. >> mark, you know, you're joining us on a week where a lot of retailers are shutting down their brick and mortar, whether it's radio shack, macy's, staples today. not to compare you to any of those names but you do have nike town, you do have exposure through department stores. do you think we're over-stored in this country? >> i think there's some correction taking place. obviously there's a huge appetite from a consumer standpoint for digital product, e-commerce, digital-based commerce, i should say. we'll see that continue. this holiday was a great example of how the consumer is shifting.
not only to digital but mobile-based digital commerce. we're all over that. it's a huge priority for the company. we see a relationship though that exists between digital and physical retail. we're not only with our own stores but with our wholesale partners. we think manage that marketplace more completely is really the critical way to go. >> nike has been very much into technology. just finally, mark, here, who is the best athlete out there that you don't have signed on? >> oh, good question. you know, it's probably one that we're not even talking about. not even thinking about right now. we have a major network of connections around the world in different sports, so we try to keep track of some of the young talent coming up. i tell you, the world of sports has never seen so much amazing talent as we see today. i won't point to any one individual but i feel like we are actually incredibly well
positioned not just in terms of football heading into the world cup but really across the fwhoerd multiple sports. >> good luck with the push that is the ceo of nike, mark parker, thank you for the iextended interview today from barcelona where they just unveiled their brand new knitted soccer boot, or as we say in america, complete. the european central bank not only left things unchanged today but mario draghi -- rick, over to you. >> to that very issue, i'd like to welcome my guest peter hooper. welcome. thanks for taking the time today, sir. hello? >> hello. >> there you are. listen, what did you think or the ecb? propelled the euro to a 28-month high versus the dollar. >> the economic picture in new york has been gradually improving. we're back in the positive growth territory. their expectations are that
inflation will be picking up. it is very low. we as house i think -- if inflation were to fall further they would have to pull out more. but for the time being, sort of a wait and see situation with the activity numbers looking a bit better. >> you've said some things in some articles that i very much agree with that the notion of guidance is going to change, whether it's a 7% target in the uk, 6 1/2% unemployment rate in the u.s. and do you think that's going to be a good thing? do you think the markets are going to grab into that notion? >> the attention right now is on what the fed is going to be doing next. i think they made it pretty clear they're shifting away from this quantitative verbal guidance as we get very close to that 6 1/2% threshold. iqualitative, looking at a broader set of vary ashls. >> isn't qualitative spongier
though? to think they threw a target out, we get to the target and then they go spongy. does that have any negative imp my i guess so a my indications at all to? >> they're going to reach for what the fed still does do quantitatively. that's their forecast. they put out the forecast. that will become increasingly important as a signal for where they're going to be going. but they're going do back that up with words that are, as you say, spongy, quaul talitative b give us some indication of which way they're leaning. >> we have 40 seconds left. final 40 seconds, weather is the big issue. seems though stocks think it's a huge implication. it was even mentioned in the service sector yesterday. what do you think that spread is? do you know the markets have it right? big force, small force, seasonally adjusted compensated issue that what are thundershower thought sths. >> it's a big force. durable goods are hit hard when weather is bad. you always see retail sales drop
sharply when there's an unusually cold winter. as it comes back we're going to see a rebound. i think this is largely a weather story. spring comes and the economy is going to be looking good deal better. >> all right. well, listen. if that's the case, then in the spring the stock should not have a hiccup. that really is what it's about. thanks for taking the time. "squawk on the street" gang back to you. >> thanks so much. good thursday morning, everyone. it's 11:00 a.m. on the east coast. 8:00 a.m. on the west. kelly evans is -- >> hello. i crashed the set. >> we're watching some of the top story nsz tech this morning. the war of words between icahn and ebay heating up with linkedin joining in. kara swisher will help us break that down. dl is a major bubble in tech investing. jeff, the former ceo of atari, take 2 will tell us why. samsung is out with yet another brand new tablet but has this one finally jumped the
shark? we'll take a closer look and tell you why. first up, breaking news from scott cohn back at hq. scott? >> new developments in the largest law fimpl bankruptcy in u.s. history. back in 201. we're awaiting a news conference by manhattan district attorney vance who was about to unveil criminal charges against four top executives including the former chairman of the form steven davis, executive director steven decarmine and zachary warren, lower level executive in the firm. alleged lly ahead of the bankruptcy they were mass i.lying koog the books. including things as mundane as classifying payments to associates which should have been expenses as payments to partners which would not be to make it look like the firm's expenses were too low. the charges include grand larceny and fraud. vance and n. a statement says fraud is not an acceptable accounting practice. he is about to get under way with this new conference in
manhattan. back to you. >> scott, thank you. let's move now to the crisis in ukraine escalating this morning after the parliament in crimea voted to join russia. our very own steve sedgwick is live in kiev with the latest. it's good to see, you steve. >> yeah, very good to see you, too, kelly. this is quite extraordinary how quickly this is moving. i've been speaking to the top people in kiev and everyone is incredulous at the speed of this. i just came back from the central bank where i was having a chat, the financial crisis with the national bank of the you krarngs central bank governor, and he was just talking about this crimea situation saying it is very difficult to understand, but actually thanks to the u.s., thanks to canada, thanks to the swift action from the eu, hopefully we're going to be shielded from the worst affects of this dispute going on down south of the country. the trouble is despite the best
efforts of secretary of state kerry and the foreign minister of russia, mr. lavrov, we don't have a breakthrough of who is legitimate. here's the problem, the minister of kiev posts the ousting of yanukovich. he believes he's the legitimate prime minister. the problem is the russians won't acknowledge that. the problem is the russians will acknowledge what the government in kiev think is an illegal government in crimea. that government has now voted to join the russian federation, possibly cause a referendum to the crimean people on march 16th. that is the sunday after next, as well. of course, yanukovich saying this is an legitimate autonomous government being created and it pount shouldn't be recognized under international because the only way anyone can succeed from ukraine is by a countrywide vote on succession. so this is incredibly complicated because the russians aren't recognizing the kiev government. the kiev government isn't
recognizing the crimean government as well. the russians are denying that it is their forces that are occupying the crimea as well. other voices i've been talking to about the legitimacy of the government here, it's key for why the russians and the you kr krabians are not talking. everyone is saying a similar thing in kiev, including the world champion who i spoke to. he's a presidential candidate for the upcoming presidential elections in this country on may 25th. he said, look, here's the situation. we had 300 plus mps out of 450 in the rada, in the parliament, they voted for this new government. they had the constitutional right to do that. we didn't even have a president in this country because we didn't know where yanukovich was for a week. they said, look, 20 million plus ukrainians throughout the country joined the protest movement as well, how can it be undemocratic if they want this government in kiev? incredibly fluid and
complicated. i got to say, guys, heartfelt situation for many ukrainians. >> steve, thank you for that. we'll keep a close eye and i'm sure we will come back later on this evening. steve sedgwick in kiev. the battle between carl icahn and ebay. he is siding with ebay in a blog post linkedin cofounder reid hoffman criticized the billionaire for his short-term thinking. it follows the statements from icahn yesterday on "squawk box." take a listen to this. >> was don't need to be a tech genius to understand that ebay has a company paypal that would do a lot better without ebay. and i said that with reynolds in no business co. it took me three years but we made billions on it when we split it. we saved motorola by splitting it up. i don't think he should be the guy running or having to do with paypal. >> kara swisher is at re/code. our jon fortt joins us this morning as well. we should note that nbc news
group is a minority shareholder in re/code and we have a content sharing partnership. it feels like they are trying to circle the wagons around ebay. what effect has carl's opinion had? >> they have decided to go after him like a shark in jets and reid is on the sharks, obviously. >> right. >> but you know, i think we will see a lot more than that. list people involved with p paypap. so i think they will probably be going quite a bit of that. it's typical for silicon valley to stick together against icahn. they've done it before. >> there's the split question and the conflicted question. are we dealing mostly with the first or the latter? >> i think maybe it's pivoting more towards the first question right now. i found that reid hoffman's argument about meeting the payment volume from ebay to
really stand up against coming threats from apple, google, and others was an interesting one. what i think they haven't answered yet which will probably come up is why t not do the vmware emc thing. spin out 15%, say, of paypal, maintain a relationship, maintain that payment volume. i think part of what's going unsaid is that paypal has had structural problems. david marcus, head of paypal, has been trying to clean that up managewise and technologiwise. maybe they feel like it's just not ready to spin quite yet. >> your take? >> well, you know, i think it's not going to do it at this point. i don't think there's any -- icahn -- saying i'm not a tech genius that is an absolute fact. i think there are some big threats coming and there are all kinds of flplayers. this area of payment is moving fast with with stripe and square and all things that apple and google are doing. it's interesting if paypal would
be that strong separately or is it better within a company. i think it's a very good argument for reid to make that it's stronger with ebay. it's a huge marketplace. so i think it's going to move a little slower here than in other ways. maybe three years. he doesn't seem someone who sticks to it that long. maybe he will. >> what would silicon valley look like the all of the relationships got disentangled the way icahn suggests should happen? if everybody in his position stepped away from boards would there be anyone left? >> honestly, finance people talking about ethics? i love it. that was just attack him because he's a prominent guy and there are issues around it and they had to say it's when did you start beeating your wife kind o thing. there are so many interlocking people in silicon valley it is untort if you're looking at it on any basis but every single industry to me is like that. there's an old expression by don
jon door, if there's no conflict, there's no interest. >> just a quick question on sort of what happens if -- with paypal as part of ebay. if you read through everything it seems to be the case that what the argument effectively is keeping them together is that ebay is subsidizing paypal to the extent its transaction costs are able to stay low for consumers in ore this areas. >> right. >> transaction costs are going to be one of the most important parts in my payment system going forward. is the argument almost from a consumer point of view that, look, if you want the lowest cost here, if you like paypal, you should like that it's part of ebay. >> it can be part of anything. i think the coming fight around this is going to be really interesting because everything is on the phones, if you think about it. it's apple and google, very -- microsoft will be in there and there's all of these smaller companies that are going to get bought up. it's going to be a large war because it's a very important area. the question is should paypal be
spun out at a time of great challenge or be at tatached to greater ocean liner or warship. >> on its own it would be more expensive for people to use? >> it depends. it's a very large service. it's used all over the world. even in china, alibaba is their pay, all kinds of things going on. will it be better as a stand alone, are there synergies with ebay or with anybody? i think that, you know, i think that carl icahn wants to make a lot of money and it would make a lot of money. the question is would it be better for consumers and paypal in the end? that's the argument that ebay is trying to make. >> a lot more interesting question. kara, great to see you. talk to you soon. kara swisher. now, samsung's galaxy tap pro is expected to hit the shelf nsz three dies group shouldn't step away from the laptop just yet. jon fortt is with us to explain why. you stepped away from the laptop. >> i have. hardly ever touch a laptop. i use a tablet and smartphone
for just about everything nowadays. i have a desktop at the office. interesting. this is the second 12-inch tablet that samsung is coming out with. they had one last month that hit europe and the u.s. these things are massive. the number of pixel, it's about a third more than the ipad. i think the question is, how many of these can they really move? because even the full size ipad, there are questions about its growth potential given that 7- and 8-inch tablets have a lot of volume, costs are low. these tablets, 750 bucks just for the base configuration. you can get like, i don't know, two dozen kindle fires for that. i'm kidding. i'm kidding. >> ice cold, fortt. the war between apple and samsung continues. apple has another setback in banning samsung phones from the u.s. that's as ugly as it's ever been. >> you hardly ever get a full-out ban but there's this back and forth. also a thing about the patent
deal with nokia. turns out apple is mad at samsung because they disclosed the terms of this patent deal with nokia during the trial and figured out apple disclosed the terms of the deal. >> do as i say, not as i do. >> they're just putting out so in reams of paper digitally and otherwise in this thing they hardly know what they're filing. this is really just -- they've got so much money and so many lawyers they're going to go at this strategically for a long time. >> just real quick. samsung's tablet, a t lot of people are at the point to walk away from the laptop. other products on the market to meet that need or samsung's tablet is not going to be that? >> i think for most people, well, maybe not for most. for many people they can't walk away from their laptops yet. that's a software and service problem. the company still have to work on innovative enough. i think apple, samsung, somebody needs to come up with an i-life for tablets, a brilliant new
way -- >> soft wear. >> yes. >> comes built in and says you're off to the races with your tablet. >> iyes. >> jon, you're so smart. >> i just play a smart person on tv. >> see you later. jon fortt. costco is a big mover today and slipping to the downside. bob pisani is here to talk about why. >> i just want to give you an update on the market. we are moving up near the highs for the day once again here. cyclical names have been moving. materials, finances, industrial, moving throughout the day. i also want to point out another day of out performance for the banks here. bank of america. standing at the post here, say hi, tom. up 1.6%, up 1.16%. bank of america is up 6% this week. citigroup, jpmorgan, goldman sachs are moving up today. i think what's happened here is these are the last relative underperformances for last groupive of relative underperformance. they're starting to catch up with the market. let's go back to costco.
retail disappointments right across the board. staples is near a ten-year low. costco, very simple. big fight going on along p analyst community this morning on costco. it's been an investor darling. it's -- look at this. green line. that's costco the last five years. retail index is below that. the white line. it's been a dramatic out performer nape love this stock. here's the fight going on. eps is contracting for costco. it's below the same quarter of last year. and the membership fee income, the mfi, critical come poen ent, decelerating for the fourth straight quarter. to get majority of income from membership fee. the bear argument is you put the contracting eps with the membership fee income decelerating you should have a lower valuation. that's what the bears are arguing. the bulls are now coming back to them saying, no, no, no, you t got it wrong. the membership fee income is the retention rate of the membership is in the mid-high 90% range.
it's not dropping so therefore stop worrying about it so much. guys, if this goes on much longer, eps drops and mfi is 4% now. the membership fee income increase, if that starts going down, 1%, 2%, flat, the bears are going to have an upper hand. right now we need a couple quarters to establish any kind of clear trends. up next, there's a major bubble in tech investing according to jeff lapin b. former ceo of atari and starwood motels. but first, rick santelli, what are you watching today? >> you know, i'm watching what everybody else is watching, the markets with one eye and the possible weather implications with the other. we're going to dig deeper into this in about ten minutes. we're also going to look at yesterday's service sector, ism. i think we need to do a post-mortem on that. four-year weakest level. back in ten minutes. you don't want to miss. [ male as joe woods' first day of work.
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is there a bubble in the t tech start-up world? our next guest thinks so. previously chief executive of starwood hotels, now president of tech coast angels. he joins us this morning from los angeles. jeff, it's great to see you. good morning. >> good morning, carl. >> i know you look at a slew of deals every month. i think you see 50 to 100 deals
a month to consider. is that a bubble? >> you know, it is a bit of a bubble. i believe that valuations in the last several years for start-ups have gone up at the level i invest in which is right at the beginning of the companies. you've just got to be careful. i don't think it's a bad thing. but you know, i follow the public markets, the real estate markets. and today's twitter and linked in facebook be tomorrow's microsoft, yahoo! and apple? >> jeff, there's a lot of money out there. founders fund just raising another billion dollar fund. google now has google capital and google ventures. where is the bubble? is it in the early stage, later stage, or do you think it's just all over? >> i think it's all over the place. price t waterhouse just came out with a study that says there's almost $30 billion invested in start-ups in 2013 which is a 7% increase over 2012.
you've got to believe that as more and more people get into this i think they said a 3 or 4 million people are into start-up investing. as more people get into this, eventually there's going to be a downturn. i'm not saying a bubble is a bad thing. it's a bit of a wave. i enjoy riding the wave. but the wave will end at some point. >> jeff, what is your turn like in this kind of environment? i mean, i know you got into this after a long career in the corporate world partly just to be energized by everything that's going on and provide capital. but is this a good business to be in? >> you wouldn't put 100% of your net worth into start-up companies. you know, i put a few percentage points of net worth. i've made 20 investments in the last three years. i got off the corporate train three years ago. i have not had an exit yet. but of my 20 companies five of them looked very promising. five of them looked unpromising. and ten, who knows. and depending who you listen to, you know, up to 80% of these
start-ups will fail. so you've got to be careful. i suggest people join angel groups because there's collective new jersey. i frankly do it more than just the money. although i want a good return. i'm a capitalist. you know, it's fun to stay in the game. and i think i know what's going on on the technology scene. we're in an innovation revolution. it's wonderful what's going on in the world. >> you can say that again. let's talk specific spaces within that revolution. right? there's energy and solar. mobile payments. what to you is most exciting? what gets most overplayed right now? >> i love censor technology. you know, there are all kinds of talk about body sensors to immediately tell your doctor what's going on with various diseases. home sensors to run your office, your life. so i love that space. i love the big data space and cultivation space. there's so much big data we all have access to. how do you find that app on apple or android?
what's the easy way to do it? so far there's no real easy way to do it. i love biotech although i don't invest in it because i don't see it but i see so many companies that have the next cure for cancer or the next cure for parkinson's. it's just amazing what's going on. >> jeff, you have invested in quite a few start-ups. do you think that should preclude you from being on public company board? what's your stance on this feud between icahn and silicon valley? >> oh, i don't know. i don't -- look, i've had enough public company boards in my life. i'm kind of done with the public life. and i've had my share of lawsuits and all of that and i'm kind of done. but i don't think they would preclude each other. if i was interested in that, i don't think the fact that i'm an angel investor would preclude me from sitting on public company board. >> finally, jeff. you talk about this wave that we're riding and it's fun for the moment. what causes it to come crashing? i don't mean in a bad sense. just from fading out, is it angels falling in love with another part of the globe?
is it about valuations? what do you think -- what's the downside risk here? >> i think ultimately it will be investor fatigue. you know, if you invest in 20 companies and you make -- you spend a bunch of money and none of those companies succeed, you're going to think twice about doing it again. as i said, up to eight by% of these investments fail so there will be investor fatigue as time goes on. >> i just love the name of the group. sounds like a biker group. you guys could ride around in leather. >> tech coast angels is the biggest investment group in the country. if you live in southern california, i encourage you to join it. >> please come back. >> thanks, carl. >> i encourage him to wear a leather jacket for that interview next time. coming up, nike ceo mark parker making news this morning. we want to hear about what he said about the competition. time is running out or
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don't get every day. pictures taken just moments ago of the google barge in motion now en route to stockton, california, from san francisco bay. google was ordered to stop construction of the float regular tail barge out of san francisco after failing to obtain the proper permits. interesting pictures. in a statement just released, company says, quote, it's been a busy six months for our barge and it's grown tired of all the attention. so we are moving it to stockton where it can have a break, enjoy the city's delicious asparagusfest and warmer climate and get rest before its next chapter. i think they enjoy, kelly, have
it cloaked in mystery. >> and by the way, stockton is loving this. ship yards are going to get a boon. this is inland and the guy in charge of the port there, they've gotten so much scrutiny over this the ship yard was being visited during the university of pacific versus gonzaga basketball game last week. unbelievable. >> san francisco is like, get it out of sgleer exactly. you deal with it. now let's deal with the cme group and rick santelli. rick? >> i almost feel like doing a santelli exchange on that large barge. okay. we won't. we're going to do the santelli exchange on another large issue and that is weather. everything we discuss is going to be anecdotal. everything that we hear both sides really is anecdotal in my opinion. a big issue, traders are talking about how many times steve liesman talked a it yesterday. the beige book mentioned weather. it was a lot more than the historical norms. i understand that these are historical times with regard to
weather. but i also understand that anecdotal frefd people i talk to, my cameraman, for example, has relatives who live in florida. you can't get in a motel and the people from the colder part of the country keep going down there. all the wires that were down in georgia, for example, well, a lot of overtime hours, a lot of extra people hired. two-sided issues. in chicago -- listen, the people who plow driveways are having a good year. people who sell salt are having a good year. with regard to housing, you know, not the entire country isn't always cold. so we see some of the disparities, some of the different numbers in housing. but one thing we can all agree on. there is an effect. the stock market in my opinion thinks the effect is large. the treasury market not as much. now, how can we look at some of the data and draw a conclusion? one thing we had productivity today. even though it was a positive number, positively wasn't as high as we were expecting.
look at the chart going back to the beginning of 2011, basically we're at 1.1 average for 2011, 2012, 2013. the '50s, the average is closer to 2 1/2%. that is effected by weather and that is something we need to contend with. these issues, as structural as they may be, need bb addressed. yesterday the ism bugged me the most. normally we just look at the numbers and the indexes but they also have comments. there are several of them i find interesting. the first here are about weather. one is cold weather affecting wholesale trade. second is winter weather, try to say that ten times, affecting construction. here's the one that caught my eye because this has been a hot topic in chicago. is the affordable care act/obamacare really having a negative affect on the economy or is it all politics? the ism folks had this to say
regarding what the respondents were sending and telling them the affordable care act is creating significant financial uncertainty to the health care organizations with little warning the negative impact on revenue has been unpress debted and that, of course, is respondents more focused on health care and social assistance. that was yesterday. of course, we see there's another delay. i don't know if this this is a 27th or the 28th. as financial students that we all are on a business channel, the best business channel, this really needs to be incorporated in a discussion in a larger way because this, unlike weather, isn't going to be disappearing any time soon. back to you. >> great point, rick. thank you very much. also not going away is whether the ecb will of do anything about interest rates in the face of deflation. simon hobbs, they didn't this morning. how are marketing reactsing? >> there is some disappointment. i don't think the market expected them to move on rates but there has been chatter going into today's meeting and certainly it capped the rally. we have not been able to make substantial gains if you took
the weight out. essentially flattish today. certainly the euro shot higher. that's true as we have mario draghi's news conference. he was suggesting that recently the data -- let's look at mario draghi. the recent news out of europe because by and large positive as things stood at the moment. jpmorgan is suggest that he might do something in the future, some small move but he would be immaterial disappointment to get there. the you're yeuro at a new high year. i just showed you where we are in deutsche telekom. telecoms are hot in europe this morning. it has basically reduced the free cash flow forecast by $2 billion as they build out the faster lte network here in the united states. now saying they're going to target 250 people -- 250 million people by the end of the year. deutsche telekom is in negative territory. in france, a huge amount happening in telecom.
vivendi has had a second bid for telecom assets which are called sfr. $14 billion coming through from billionaire martin. there's already an offer on the table of $20 billion, albeit mixed with debt and shares. so a key focus there. in france for some time, real pressure on telecom prices because i'll idea went in as a low-cost competitor. today rival orange. look at the moves. orange suggested they could be bottoming out on rates finally in telecom in france. their profits have been down forefive years. finally they say that may be over. both the challenger and orange higher on the session. there's a big news on telecom companies. when we come back, if you're in the market for a new ferrari, you had better run, not walk, to the nearest dealership after this show, of course. we're going to tell you why in a moment. plus, the ceo of nike speaking out in a rare exclusive interview on cnbc this morning.
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potential versus distance between nike and the competition. as a leader we have a lot greater opportunity in focusing our potential going forward than we do trying to feel that much better than what we might be doing than anybody else in our industry. so that's where we place our focus. and on the relationship with the athletes. >> interesting perspective coming from him. this whole year, kelly, has been sort of cautionary tale about athletic equipment, under armour, through lieu lululemon. >> what i do love is that even if you are a retailer like nike, innovation is so important. this comes at a time when people -- how much of you heard people running in socks or barefoot, it fits into this whole idea of what a should be could be and what it should represent. it's going to be interesting to see. >> coming from resident jock here at cnbc. >> not lately. i need to get out there. we've got to get rid of this cold. >> parker, by the way, says he feels good about turning the corner on some of the technology and sales. and, of course, china which
continues to be a huge market for them. >> yes. all right. luckry car buyers, you better act soon. if you keep waiting ferrari might be completely sold out. robert frank joins us to explain from headquarters. >> most car companies want to sell more cars. ferrari is trying to sell less. it's become a very profitable strategy. last year ferrari promised to build fewer than 7,000 cars, below the 7300 it made in 2012. the goal is to maintain the exclusivity and sport prices. so far it's working well. revenues and profits both up last year as they sold more of their top line models with higher margins. by the way, vintage ferrari prices are breaking records. every month as we often show you on cnbc. the question was whether this cap would continue. in an interview with cnbc the chairman said, for sure, they will build less than 7,000 cars this year and perhaps next year
as well, as he told us, quote, i don't want to inject too many cars into this market. so they're going to keep that 7,000 cap for the foreseeable future. this means that some of the waiting lis for top cars may actually become longer. but for ferrari owners it means the prices for their used cars, especially those vintage ferraris, will keep going up. the company this week launching the newest california model, that's what they're calling or what people call the entry level ferrari. price tag foreignry level ferrari, about $198,000. guys, back to you. >> that's only five times the aench income this this country. thank you, robert. coming up next, there are a lot of small businesses out there looking for funding but most don't have access to a lot of money. venture capital money anyway, that's flowing through the tech industry. that's where today's squawk breakthrough comes in. making it easier for main street to get loans online. the company is backed by peter teal, and we'll tell you how it works in just a moment.
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coming up, qul halftime" is live at the new york stock exchange today. we're going to hear from another baron's top 100 financial adviser who says to embrace volatili volatility. he's going to reveal his favorite ugly duckling sector. and then tiffany, more glamour and allure are ahead for that company. and we're on the hunt for value. stocks go higher and higher, so where are the value plays? we're going to find out that and much more straight ahead on the "half." see you in a few over there. >> thanks very much, scott. looking forward to it. now, our next guest is using big data to help small businesses. on deck is an online realtime platform for main street business with most recent round of funding it crossed the $180 million mark and is set to reach a billion dollars in loans
delivered by bid march. noah is here with us. >> thanks for having us on the program. how are you? >> thanks for being here. look, this gets to the bread and butter of what it is that wall street and the financial system is all about. it's about getting capital to businesses. how are you guys able to do this so quickly, so efficiently and in a way that looks like it will be growing quite rapidly going forward? >> it's really all about the power of technology. what our systems do is we collect thousand of electronic data points about small businesses across the country. and we use them with the algorithms we develop to make an efficient real-time lending decision. from the owners point of view we come to the website and decision for $30,000 in minutes right online. >> no other real advantage. the innovation here is about using technology to make those complex decisions that a loan officer used to do and do it better and more quickly? >> that's right. the traditional process at a bank can be cumbersome and time consuming.
small business owners are busy. hard to step away from the business. it can take 30 days on average to get a loan from a traditional bank. our tnlg really shortcuts all that, develops it using a big data approach and makes it much more faster and convenient for those business owners out there. >> noah, for the life in me i can't imagine how many data points there could be about the local hardware store. i mean, what information are you gathering that makes you so confident about mom and pop businesses that i don't imagine have much about them online? >> i think that's changed a lot in the last few years. we look at a variety of data sources, both public and private. cash flow. what is the realtime cash flow and transactions iranrun tlug t business. we look at social data. there's a ton of new information online. like at yelp and foursquare and open table.
>> noah, a lot of small business on our air say, look, i'm up a up against regulations i don't understand, regulations i don't know if will become law. the last thing i will do is look for financing to expand. do you sense that pushback? >> we do see that when the regulatory environment or economic environment is uncertain. business owners are more reluctant to take on capital. what is encouraging about the data we've seen over the last couple of years is that as the housing has come back from the bottom, we have seen business owners get more optimistic about how they can use capital to grow their business. that's the kind of use that makes sense for our loans. >> noah, you describe yourself as a platform and not a bank, necessarily. who are you connecting people or are you extending the capital the loans yourself and, if so, how much capital are you holding to protect against losses? >> yes. so we're holding an extensive amount of equity capitol to protect against losses. we get the money for the loans
themselves from banks like goldman sachs, deutsche banks, square one banks and hedge funds from smaller individuals. it's a variety of capital sources funding the loans. con necking wall street to main street with our platform. >> are you regulated like a bank? >> we're regulated like a non-bank commercial lender. just like an equipment leasing company we would be regulated. that's how ondeck falls as well. >> what makes you or i guess what makes a small business likely to go with you rather than the traditional means of just going to the local bank and geing a loan? i would guess you would get a business turned down bay local bank. is that right? >> we serve both businesses that can't access capital from local banks as well as those who can. for the one whos who can't, our average loan size is $40,000. banks typically like to make larger loans that's more profitable for them to do that. our technology let's us make the
small dollar loans efficiently and serve a number of businesses who can't be approveford banks. but also doctors and dentists who traditionally aren't well serve bid banks come to us for speed and convenience. >> how much demand for loans? this is almost a realtime product where they go outside loan office hours and getting a cess to capital. do you see this happening on evenings, overnight, weekends? is that a big advantage of what you're able to offer? >> absolutely. small business owners are busy running the business during the day the last thing we want to do is ask them to step away from that. we're open saturdays as well with our sales and customer support team to support the businesses. we do see a lot of use of our product after hours. that's right. >> a lot of big name investors on board with you guys as you expand. noah breslow, thank you for joining us this morning. >> thank you very much. as you might have heard, the inventor of bitcoin has reportedly been found. his name is satoshi nakamoto.
this is a live shot of the house of the man featured in that piece. our producer harriet taylor tried to talk to him this morning and this is what happened. >> hi, this is harriet. i'm here with cnbc. we wanted to ask you a couple of quick questions. >> i don't know who cnb is. >> we are here, we're with a news station, cnbc, part of nbc. we wanted to ask you a couple of quick questions. >> i'm sorry. not interested. >> are you the founder of bitcoin? >> i'm sorry. i'm not interested. >> take a look at that live shot once again. you might see some cop cars. he called the police,ic, on our producer just as he did when the "newsweek" reporter showed up as well. that actual si the lead of the piece. jon fortt, clearly wants to have nothing to do with the media. >> i think harriet taylor is probably one of the least threatening people in general so it's not because she was -- >> as a "newsweek" veteran, you
would know. >> "fortune" actually. our producer harriet taylor. she was no threat to him, i guarantee you. but i think this can be good for bitcoin. when i first heard that nakamoto was the founder of bitcoin, how do we know this person exist, how do we know this is not a strange hacker group that intends to blow up the entire thing in about five years once everybody is in. but this story is very believable. we don't know for sure that this is the guy but it sure seems like "newsweek" did its homework. it's plausible. they go through kind of the back story of how he recruited people to work on this. you know, definitely sounds plausible. >> and yet, carl, we were making the point that he still is distancing himself from bitcoin. how much of a problem is it that he doesn't come out there and vehemently defend his own inventi invention. >> your point is it takes away the worst case, that this is a
project. >> this is a story i can believe. bacon getting more expensive this year. the price of pork has been soaring. hog futures up 30%. now data shows a pig virus is to blame. our jane wells has another theory. >> of all the places, temple city. okay. one reason is we love bacon so much, carl. we're putting it on t shirrs. oscar mayer is giving away devices to turn in your iphone for bacon smelling. the infomercial. meet the mind behind it when we come back. [ male announcer ] legalzoom has helped start over 1 million businesses.
to soar. up 30% so far this year. jane wells, could a certain pork product be to blame? >> you know, carl, traders blame a pig virus for driving up futures but retail bacon prices are up 18% in part due to one porktatic infomercials. >> eggs and hash browns for breakfast? it's better in a bacon bowl. >> it hit airwaves last fall and now it's in walmart, target, and walgreens. do they work? yes, they work. i recommend you spray the bowls with pam first. over 2 million perfect bacon bowls have sold which should bring home the bacon to this guy. >> i like to try and tuck it down as far as i can. >> jenson is a lab tech from salt lake city who thought this up in his own head. he made a prototype out of
tinfoil which he submitted to eddie coison nation. now the goal is to broad the bowl. fill it up with salads, even ice cream. >> that's a big thing now is ice cream in a bacon bowl with chocolate on top. oh, yeah. haven't you ever had bacon dipped in chocolate? >> yes. >> okay. there you go. >> yes. >> see? you've been around. >> you're making america fat. >> i don't think bacon is what makes americans fat. it's how we live our life. three pieces of bacon make a bowl. that's a perfect serving for one person. >> by this time next year jenson hopes his invention will bring him a fat royalty check and he can quit his lab job. >> jane doing that story like nobody else can. jane, have you made a bacon bowl? have you tried one? >> i have, yeah. i made them. i filled it with scrambled eggs.
it does work. my sodium levels went off the charts. but i didn't have to wash any dishes. it w it was carb free. >> i think this is the next big hit for the quintanilla household. >> jane has the lion's share on bacon coverage, i'm afraid. >> and from bacon to pizza, pizza chain sbarro is expected to file for bankruptcy protection next week. that brings us to today's squawk on the tweet. sbarro is to pizza as blank is to blank? tweet us your thoughts. your answers are next. ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative.
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squawk on the tweet today. according to "the journal" pizza chain sbarro could file for bankruptcy protection as soon as next week. asked, sbarro is to pizza as blank is to blank? frank writes, as bitcoin is to bitter. as quiznos is to subs. as blockbuster is to videos. lance writes, sbarro is to pizza as cardboard is to marvel. i like pizza is to engineering. >> throw that in there as well.
pizza can be a remarkable feat of engineering, carl, but not in their case. >> meantime, s&p 1880, wapner and the crew just kicked us off of post 9. we're going to toss it over to you guys for the next hour. >> thanks. impressive day. third consecutive day the s&p has hit a new all-time high. how about the number of new all-time highs. names we all know and talk about regular regularly. wells fargo, disney, price line, delta, discover, netflix. wow. >> it's going to be time for dow watch. it's the turn for the industrials a lot of people are saying it's not that long, kelly, before we talk about nasdaq 5,000 again and if we get to that point then you're really going to have some people worrying about how far we've come and whether we're frothy in a bubble. >> all you need to know is the bacon bowl, scott? >> you know these guys are going to eat that. guys, have a great rest of the day. we'll talk to you soon. welcome to post 9 for the "halftime" show at the new york stock exchange. wheris