tv Squawk on the Street CNBC April 14, 2014 9:00am-12:01pm EDT
person's services because no one likes to pay more than they have to. it's not the world we live. >> that's when they try to grow them at home. >> look at the guys you have here. they've created wealth. >> absolutely. thank you, jonathan, thank you, drew. >> see everybody tomorrow. "squawk" in the street begins right now. [ music playing [ music playing ] >> good monday morning. i hope you had a great weekend. welcome to "squawk" in the street. i'm here with jim cramer, from the new york stock exchange. earnings season kicks into high gear. 50 s&p companies posting numbers. futures are up for a change after retail sales had their best print in 18 months. ten-year yields stop flirting for now. yellin gives a big speech on wednesday, a tense weekend in
ukraine and the pro russian separatists. no letup for a bruised market. ukraine, troops at the border. the futures do rise. >> it is a money and murder investment, cia kraft will make what is its largest acquisition ever. >> citi reports stronger than expected numbers. the stock is rising, headcount may not be. get a new friend request. facebook looks into what's next, yeah, a digital currency. >> first up after a rough week on wall street, stocks are poised to open higher this morning. retail sales rose a better than expected in march. after the nasdaq closed below 4,000 for the first time, s&p and nasdaq each suffered their first weekly performance since june of 2012. jim, on friday, you had a
playbook of sorts to get us through the week. namely around companies that are going to report, coke, ibp, google and others. >> we are trying to see whether the value of revolution continues. coca-cola i don't expect to be good. if that works, which would be similar to what general mills had last week and kellogg. looking at the stocks that are working, it's confusing. they tend to be companies that aren't doing that well. caterpillar working. not doing that well. general mills kellogg, i say working, in the face of nothingness, so watch coca-cola. then on wednesday, what can i say? we are ibm, warren buffet says it's valued. we have google, a lot of peel feel it's a high flyer, on a 20, 15% basis it's inexpensive. people want to say, is this week okay? this is a heavy earnings week. i don't want to ever say it's okay, knowing that when you have
landmines like we had last week with j.p. morgan and wells fargo. it's a case-by-case. i think it's factuous to say we are flying with ukraine. we are fine with interest rates going down last week. i think it's a case by case. some people are positive, i don't debt that. >> you even point out that even though coke may have a horrible number, on the flipside, cng might host a pretty good point. >> as a dollar guide, a guy behind vzoes. mcdonald's was chip poetly. people want mcdonald's. people want wendy's. i think chiptle has to do a 9 or
10. >> too bad we don't have that mir m pyramid with that rotting fetch. >> people stink from zoe's. >> back to the broader mark. those watching high multiple stocks that get crushed every day and holding on to them. they will say, hey, the fundamentals have not changed. >> the fundament apples have not changed for tesla, for netflix, or you name it. a lot of other companies, a, you agree b as we move deeper into earnings season, therefore, do we get back to fundamentals? >> i think it's entirely possible that what happened that was good for tesla on friday? ipo frenzy freezes. four new issues bailened and debuted. we are getting a cessation of supply. we are good deals as we have saber. we will talk about that. if you see an end in pencer selling, if you see a couple
days, the hedge funds may end, the ones that hung on high growth are out of the woods, then i think you can mount an up crease. >> i don't know the answer to that on the hedge fund side. we talked so often about gross exposure coming down, leverage coming down, meaning you cut your risks. >> you take it down. i keep hearing even today that's happening. >> that within a certain hedge fund, your allocation from the overall manager comes down in terms of what you can allocate. whether it's events, tmt, whatever the sector will be. 'we'll see. >> on friday, we discussed the core value of discussing the key to the market. >> microsoft down u downgraded today. >> that hurt. >> microsoft twitter. >> twitter is the one. twitter doesn't have any earnings. they need to surprise some, somehow. twitter is now back to where if you bought twitter, you are down. >> you bought it on the opening trade. >> you are down. >> let's see if twitter can
stabilize. i think twitter is the animal that says that's the way too excited retail name. this morning in terms of again figuring out what happens with tesla. take a look at this gold man sax recommendation of strategists. what do these have to do with each other? it was the beginning of the end of the high flyers. so people recognized that ddd may not be bristol-myers. if we can see strategists stabilize, we see an end of a cessation of ipos. we see twitter do well, periodic soft go down. >> twitter is not going to do well until we see the earnings. >> one of the things that hurt us, hurt the bulls is that there is no earnings of these companies that are. >> it's earnings rorkts i should say. >> it's quarterly ohrt. >> google is inexpensive on the earning, goggle will be the proxy about whether this group
does well. don't go crazy until you see the whites of their eyes. you see some of these inflation reports. >> we did get some numbers from citi though. it beat expectation, lowered expenses and fixed income. revenue above consensus, too. in the earnings release, they said result itself were strong despite a quarter difficult to the company. last month city failed higher dividends and stock buy backs. you think you said on friday, the number could be good. for the buy back, for the dividend. stay away. >> that number was good, interest mar jen up two basis points. >> that will buck the trend of the bank you see or will see. i think lending is up 7%. boy, j.p. morgan wishes they had some of these numbers. in the end, they need this seed car blessing. i think this quarter was a brief for seed car blessing. i want to hear the conference call to hear what they think
about when people will in the government will say, you know what, the worse is behind them, citi holdings, that can be back on the balance sheet. i think the amazing thing was more with less. they simply didn't do nearly as badly as i thought given the substantial revenue decline numbers. you go over if release and many of the lines decline, but in the end, they made more money than i thought. that was a quick thing. >> although, you continue to have concerns about the management of the company. i don't want to put words in your mouth. but i do listen occasionally or all the time to what you say. you have question bantam x. questions to various allegations, obviously the failure on the ability to return capital. and whether or not they can execute, even though you had been more positive earlier on. >> yes. i had felt there was this kind of a quid quo pro, which is you get rid of pand it, sea car will
bless you. i was shocked to see there was no quid quo pro because of the mexican investigation? was it because of regulation? i thought corvette was going to get the pass. i thought they were going to say citi board, you have gotten rid of the guy we didn't leak. that didn't happen. it took me by surprise. maybe they see capital issues. there is clearly no exam issues. >> right. >> then you have to default to regulatory. i think this release did not address regulatory. >> you said by wednesday when bank of america posts, we might hate banks so much that we could do okay. >> bank of america is trading up. my scenario is they will be down to 15 and a quarter, 15-and-a-half, trading up is. >> any time a company is traded up in this era, ahead of the quarter, we have not had that great luck.
i think you feel better after seeing citi being good and wells being, let's call it this, great. wells is great. up potential growth without the regulatory hassles. >> over the weekend was the line is they are getting into riskier auto loans, these terms are stretching out. >> john stump knows how to land. john stump is going to be the subrose and greatest banker this year because they never shot their feet. they had some rec latory issues. i see you raising your eyebrows. >> okay. he is from a dirt farm in minnesota. let's say he is humble. >> wells fargo wagon. they carried guns. >> a john ford angle that i hadn't thought about. >> stagecoach. >> right. >> that was a gad quarter, wills. let's move on, cia kraft
confirming they have an investment. that includes by the way about $3w48 in debt. it brings tiaa-cref to $$800. they continue a big player with over 40% of assets in that area. meantime, glencore xstrata selling off its la bam bas to a chinese consortium for $5.8 billion. one more deal that broke a hostile in bermuda ens. >> really? >> yeah. bermuda insurance, that's where they hide. >> they propose to inquire 47.50 in cash and stock, a 50-40 split stock and cash. they would raise about a billion dollar additional cash from issueing shares to cdc capital
partners 1.5 billion. to engain with aspen a confidential and friendly dialogue of the xa companies, but, of course, they haven't been able to. they come with a pullout on a hostile bid of 47.50 a share. .8826. let's keep an eye on shares of endurance this morning, see how that performs and what the responses they're saying overall. the premium to the closing sare price on tried. >> what's the history of hostiles. >> it's a book value. >> interesting you say that, in fact. that's right. allegheny is buying, bought transatlantic in november of '11. i believe both began as hosti
hostiles. >> they were all domiciled. >> it must be, they saw the hedge funds. >> there is a benefit for them being a part of it. >> it must be so hard to work in one of those insurance companiesch i think you have to go to bermuda every week. i think that's the rule. >> i think you have as to play at the oyster bay, what is that club when we go. >> i forget. >> bermuda is better, a little colder. >> the beaches. >> right. it is amaze, that's what they have to do. they have to go to planes and go there. >> bermuda. >> all right. facebook and amazon said to be staking out new territory. we will fill you in. also ahead, a first on cbc, darren huston, his first interview. futures look okay here the nasdaq, of course, coming back
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this stock has been the lockups for mostly in may. but jack door see, evan williams, the co-founders and ceo out with an ak saying they have no plans to sell their twitter shares, earliest would be 90 days after the next open window. >> i have been saying the pencers have to stop selling. >> they isn't sold. >> one of the things i think we all felt victimized if we like the market is why do you keep selling? are you recreateing year 2000 when the secondarys never stopped, you would see deals like boxer jets. there was a secondary that occurred at 15, a 3d wenting company. this is bull issue need pencers to say our stock is too cheap. >> i want to remind you what
zuckerberg said. >> we didn't mention qe if europe. which doesn't change the tone, ukraine obviously the other side. i think this is a significant announcement. it may bring a series of announcems. we will not sell. our stock got down to how much you would like to see that on a software as a service company. in the meantime, we are rolling off the coverage on things like paylocity. you look at where the stocks went to, they're horrendous. >> i don't care for them. on 26th, it's all about user growth. you can point to a lot of other metrics where they're going. >> this is the key question. >> doesn't this say perhaps your unit growth is not as bad? >> i don't know it says anything but a good way to say your stock doesn't decline. >> it's better than firefly. >> it is. >> flunkster. >> you don't want to go to the
splunkster. >> on twitter, i wrote dixie has no plans to sell. someone writes back, unfortunately, at the moment, everyone else does. >> that's good. >> offering perhaps we're at a short-terrell bottom. >> when we come back. one more look at the market. more "squawk" in the street back in a minute. in a minute. .
> . all right. we got about eight minutes before the opening bell. it is a monday morning mad dash time. >> edwards lifetimes, why do these matters? visa and master card, visa and master card are the two stocks people have been really worried about. they're big favorites in the dow main, people are worried about credit cards and j.p. morgan. this is a baird upgrade. no one feels they are getting back if business, straight out they like it. i always find that very convincing. i like visa here. it's down too much. master card missed the quarter. i think they're cheap. now, let's talk about a big win, the stock up the most today, edward's life science. the ceo came on and said we will
have a gigantic win against med tronics. >> these guys too, actually. >> hard fouls without cracking opened the chest. this is the way to do, open heart surgery without having to open the chest caf di. they have a product, metronics has a product. they have a preliminary injunction almost unheard of to say, you are shut down, edward's life science claimed they can get this on air. i didn't think it was possible. it's more bullish than thought. they have the best advice, by the way, this is baby boomer play. cracking the chest plate opened when you have people in their 70s and '80s is often fatal. they ween have to. watch this, it is not done people woifrd about the product, the stock was up there. i think the stock goes above that. i think you can go to 100. >> this is a very big product. >> preliminary injunction means
metronics you don't have gain. listen, let's go to trial. so maybe the intellectual property life sciences is better. a lot of guys are bearish. you have to upgrade. plus 9 makes the analysts go up. watch edwards life science, a great company. >> we have another important day, the markets are opening up this monday after some losses last week. the opening bell right here on "squawk in the street" coming up after this after this drivers, tgo!our marks. it's chaos out there. but the m-class sees in your blind spot... pulls you back into your lane... even brakes all by itself. it's almost like it couldn't crash... even if it tried. the 2014 m-class.
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[ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ . >> you are watching cnbc "squawkon the street," the opening bell is going to ring in just about two-and-a-half minutes. financials is doing okay. citigroup numbers came in ahead of expectations. >> the efficiency numbers were quite good here. i remind people you need to have that buy back in order to get it going. it's going to color the whole
group. i wouldn't be surprised if j.p. morgan didn't do as well. we don't have the comps yet, the levending here is good. they did a good job. otherwise, people all over med tronnic, for savings. >> you think that people listen almost too well. >> when the ceo's of people, of course, they're they'll never e-mail me again the ceos watch the show. i'm always glad they're not watching the 9:00 "today" show. >> you know how many banks i said. >> i felt like you will never get a job selling suits. >> they can that off your pumper loafer. >> jim, last week, it seemed like it was analysts defending growth names, today it's analysts taking down ratings for value names that have done well like this deutsche and microsoft
product. >> that's important. you need to see a reversion to growth. it ain't going to happen. you got to stick with value. intel is going to 26. there is nothing great happening until they have a restructureing. hewlett packard, if they would not go up for a couple of days and sales force went up, you'd see a little reversion to growth. but the pencer selling has to do. everyone has to do what costco is doing, basically say, i'm not selling up here. >> it is marketedly distinct, the difference between old tech and i hate to call it that. ibm will say, we're the largest cloud company out there. okay. so we're ibm. we're bigger than. >> microsoft says they're cloud company, for a few weeks, you would chase meatballs thrown at you. >> all of them are up. all, of course, the names, such
as that. >> value. i love the little bit of growth. not just cost cuts. if i want one, i'll go to kellogg, which people are seeing could be a high transaction day. >> by the way, rumors, nothing behind it that i'm aware of. >> we will not, once again, he does not let the facts get in the way of the story. >> i find it allowing. >> on television. >> kelloggs, one of the best s & ps of the week. >> i went to see buy one, get one. they have like those, they've had them for 20 years. guys like me, you are fabulous, granola, now i've gotten through the jar. so i'm desperate. >> i will tell judy. >> her granola is so good. >> you are very kind. a lot of green on the top of the green, belgin used in broadcast,
enterprise and industrial applications over at the nasdaq pharmaceuticals doing the honors there. facebook will be one of two. this piece about them getting into mobile payments. growth had a rough week. facebook closed it up 3%. >> charitable trust, they did acquisitions, very reminiscent of 2000. i feel the payments in a major area. i know a lot of the guys, oh, if are you domino's, you advertise in facebook. you may in bais facebook. this is another calgary to pay pal. i continue toty they are much more challenged than everybody realizes. >> why? >> everybody wants in that game. i know home depot uses pay pal, facebook is kind of universal for this next generation.
my kids would feel much more comfortable paying with facebook than with -- >> people have been saying cash is dying for decades. >> well, i mean, play on paper. checks are still dieing. one of the reasons why people like master card and visa, is they forget people that sell it forget that oversees, paper is still more prevalent. vis sars, mastercard, pay pal, not a bad company. i think facebook, you know, this is the kind of thing people can hang on and say i will buy a little facebook. >> they have underperformed the s & p 17% this year. >> i am shocked. mastercard did miss. >> visa blew the numbers. that's been one of the things it's the hallmark of this period. we haven't had any differentiation. like the difference, finally we get positive news about competitors not doing that well.
it's not just someone looking to hang their hat on anything to recommend a biotech. they're down more than 20%. people have been waiting to recommend down 20% things. i was serving a little breakfast. >> i saw the picture on twitter. >> they did not cut my fingers. we had gotten a yelp, one of tear paymenters saying, listen, three months, get a special deal. i was panicked. my hotel said we get that every day, only you would react to the stock. >> you are reacting because of your xeerns at the restaurant. it's very important. >> i got three out of a three star in yelp. i was suicidal. we had been getting a lot of 5s. people said they got keys with the empafadas. i went and called the day-to-day people. within they want no keys, that
means no cheese. >> you can spend your time and psychic energy on this. >> people are happy i have the alpha white wave almond in the middle. i don't want to get too granular, by the way, the windows are opened. >> i don't know what i did, it was just this weekend. >> i don't even, there were a couple highlights. i'm trying to remember what they were. citi is up over 4%. it seems to have that impact on bank of america j.p. morgan is up a half a percent. we will hear this week in terms of earnings. it will be interesting to see. >> the group is pummelled. it's a big part of the s & p. >> financials overall. >> that's why this insurance deal, hey, look, if you are travelers, you will not make a hostile. if you are another, it's like
these insurance companies, the bank tends to be. >> pricing is tough. >> tough in the february report. >> really? >> why not? >> we got to the empanadas. >> j & j reports this week. jeffreys cuts it to a whole. they say, nice performance, not enough upside to retain a buy with 105 target. >> they are going back and north on this. i'm a big believer the ceo has underpromise and can now deliver. this will hurt the stock. the chart is one of the only drug stocks above the moving averages. we don't get tech federal governmental, it's one where they say it's run too far. people like willie, which has little growth. j & j has double demg it growth. it will be nice to see these
growth like a starbucks find a got aing. those have been horrendous. >> i haven't noticed the starbucks. >> wow. >> that stock is in a straight line down from 78. people still talking about coffee prices going up. >> 80% this year. >> i know. >> unbelievable. >> look at that. meantime, you seen mcdonald's. it talked about 100 again. >> what a brakeout. i felt they didn't promote their coffee deal. >> that stock is going on. it can go through 100 rather easily. it's a nice dividend. >> and it's got a nice dividend. >> doesn't it appear, by the way, which makes sense in the current environment, the vol till we see. >> they have to lay the dividend. >> i hear it has a decent dividend. >> that aet. >> century link, it's not just a stadium anymore. it's back being a stock in a
really nice move. remember they cut the dividend. by the way, speaking of cutting a dividend, excelon is up 20% this year. >> i'm sure if you do high yielding stocks, you will see they have outperformed. >> i agree, you look at the utilities in the last few weeks, they have been on fire. >> if and when fundamentals come into play on these companies, are they potentially at risk? i think unfortunately aep i like very much. southern could be. not a wisconsin energy or duke or some other satellite scam us. >> how about a coca-cola, a mcdonald's? >> i think coca-cola is a good fame. i think everyone wants kent to do some sort of restructureing. look at how well pepsico has done. a lot of people feel this is
pelts ready to pounce. >> you don't see him fading away? >> he's not doing a macarthur. coca-cola, we need to see better trends. >> they downgrade to dr. pepper last week. >> that stock broke down. it didn't have a good quarter. it ran, the diet category is the kind of secret of sell-off. people did not know thats a per tame suddenly has a lot of enemies. they are trying to to esteevia. >> pepsi is bringing bam some cane sugars soft drinks for summer. >> we serve pecks can coca-cola at bar san miguel, people love kane sugar. we imparted it from members colorado. >> glass bottom? >> how'd you know? >> it's reason enough to go. >> thank you very much, mr. modello. >> the dow is up 90 a number of the s&p stocks in the red.
bob. >> it looks like january something here something odd, ten minutes into the trading session we haven't sold off. we are at the highs for the day. often in the last week, you knows dive in positive territory. sector leaders, i told you, it looked like january, biotech, gold mining stocks. reed taylor on the upside. i haven't seen this in a while. this is certainly a positive start. people are worried about the ukraine. the fact is, futures 3406ed to the highs of the day. and man, do we need it? we need a good number, a good beat. look at these numbers, general merchandise up 2%. that's everything you get at wal-mart for example. building materials up 1.7%. garden hoses, anything that you can do to help improve your house overall.
we saw furnishings. >> that continues to do well, people buying furniture. anything put inhouse up 1%. even the department stores were up a half a percent. it's a modest move. modest growth isn't going to do it anymore. we have to see above .12 economic numbers. that's what the parks are expecting. we had disappointments with the manufacturing data, the imf services were not as strong as expected. not above consensus, no. so this is, we really needed this particular number. right right now. let's talk about the financials. all of them on the upside. we talked about citigroup. corvette noted they grew loans an deposits, hold the lineen expenses, a regional bank, they had their earnings overshadowed by zbruchlt what happens they said what is more important.
we did see lower than normal levels of customer activity during the first two months followed by a rebound in march. you can see they also did better than expected. this is the commentary we do need to see to get the market out of the ma lace it has been in, in the last several weeks. gainers, losers, mostly a lot of gainers, life sciences, jimmy upgraded j.p. morgan. facebook, we talked to over the weekend an electronic payment fee cure. bethune scientific got an upgrade over bank of america. master card outperformed at pacific bay. so right now, we are sitting right near the highs of the day, 11 minutes into the session. guys, back to you. >> thanks very much, bob, i did want to get to this financial services mna whirlwind, a couple deals at the very least.
one being hostile. let's start off with the asset management side of the ledger in that we don't have a public company deal here, kraft is get tiaa-cref is getting bigger, you have to consider it a mutual company, that's kind of what it is, owned by its holders, but they're buying nuveen. $16.5 billion. that includes debt over $4 billion. it's about ten times the earning, appreciation and amortization. >> you think? >> it's a decent multiple. not an incredible multiple. by the way, you go back to 07, of course, in terms of buying it, they, that being madison dearborn employed a great deer of leverage and debt.
its not a big win by any stretch. they could go the ipo route you are not going to sell it all at once, this is a clean exit. all of it one time, brings tiaa much more strongly, the municipal market is not the strongest to be in, this year with detroit up, puerto rico, last year, or two years ago with meredith with me. but they will now have a loot more exposure to that important asset class. >> we always knew them as a great money manager. >> or a conservative. i thought this deal was significant from the poich we are seeing any consolidation, it's consolidation that's been lacking here. there are too many players. >> i want to get to this insurance deal, importantly, also keep an eye on shares of endurance and as pen, both of which were up, last i checked, endurance perhaps more importantly, sorry cash is
$47.50. it's going to be a 60/40 split is what it is, it's a hostile offer that we are august talking about from endurance for aspen, both, of course, the companies in bermuda in that re-insurance area or specialty insurance area, they are talking $14u6789 million in synergys annually. they say significant return on secretion. parts will be funded by the issuance of about a billion dollars in new none to an investor group led by funds divided by cbc capital partners. importantly, there is a good amount of defense they can put up, they are in bermuda. so it's not clear to me at least that there is a cap to having this thing get done. i don't believe they can act by
a written consent by a board of directors. so we'll keep an eye on it. they have been trying to get a conversation moving. since january, in fact have not been successful, choosing to go the hostile route with the letter sent and the offer made publicly for them to acquire ahl a $3 billion value is what they're offering. let's move from takeovers to a bond. santelli, group in chicago. take it away, rick. >> good morning, david, a one and two-day chart of ten shows you a dynamic largely and firmly in place. the fields still well behaved within the range of 2014. unchanged today, back in the 264-1265 resistance area you can see from friday. if we want to open this chart up and consider the yield curve, 30s the wide look from the median curve. you can clearly see, we are not
at the flattest, which was a couple weeks ago, on that five-year chart, we are virtually as flat as we have been in five years. >> that continues with five-year yields up a basis point. all other maturitys are basically unchanged. 8:30 eastern, whether it was our markets, the 10s, the 5s or the boorngs they reached the better than expected da to. i know there are other force, geopolitical. kind of the weather bounds, but for all plakt cal purposes, it's not having a huge impact. let's look at water going on at the nikkei. this is important. we still hover lower again today, lower closed since october. if you look at a year-to-date of the dollar yen, you can clearly see this pattern much like interest rates hovering at the low end of the zone isn't going to break out to the downside, it's tried several times, more of a range, so say traders, if
we want to look at what's going on with the euro versus the dollar, this is very interesting. mario draggi would like to have it lower. the currency is something we want to tinker with. they certainly seem to think it's too high, it's under pressure, not breaking out in an aggressive fashion. back to you. >> thank you very much. with those march retail sales numbers beating expectations, we will take the pulse of the consumer with nrf chairman stephen sadove who happens to be a member of jc penney. a nice open for a monday, we are inching off the high financials. we will tell you whether all this holds when "squawk in the street" comes right back. comes . .
red, microsoft on a downgrade, a couple pieces leading the charge. your point, jim, is you got to keep your eye on the big cap financials. >> 8 or 9% of the stake financials. you get the baird upgrade bob alluded to when i talked about of visa and master card. those have been weak. the city numbers are good. city and wells were good, j.p. morgan reflecting negativity from that quarter. you have insurance. you got this hostile. you can craft this financials are down too much. that can create staenlt. i think people want to see the work day contingent start better off costco. >> that has to be mimicked by many other companies before you say, you know what, maybe these people value their companies any raf all. there with is a lot of belief
until we see an end to pencer selling, the pencer sells don't believe, so why should we? i am looking forward to the priceline interview. it's the most inexpensive. it sells it. it has 18% growth and sells 19 times earnings. >> that can be a spur to action. especially since people said there was a trip adviser saying you should be buyer trip. >> that sector of internet that is useful to the consumer has really been killed. maybe that interview plus what they said about trip adviser could cause that part of the internet cohort to stabilize. it's been hideous out there. >> all right. we will get stock trading with jim in just a moment. don't go away.
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out. dvn has been a very strong stock. it continues to go higher. eog split the stock, pioneer, ups the price target. why is that? that's a permian play. the one leon cooperman gave not that long ago, $6 stock may be getting love. >> where is this find? >> border of louisiana and mississippi and goodrich is one of those companies i think people have forgotten about. you cannot forget these oil companies. there is oil, mississippi, louisiana, texas, montana, north dakota. ten states people are growing in oil. i think that will be prove to be much lower, west virginia will be the federal government finding place. >> a lot of talk about earthquakes in ohio. >> there has been science that says that's not true. keep in mind, if they ban fracking in ohio, it will be a
discuss straight. >> what is going on tonight? >> playbook is becoming the literally the most popular segment. we are doing personal finance, changing up, some people want that. i got to tell you, i look at my twitter feed, people are thirsting for 401 k information. >> enormous. >> the 401 k is so bad vs. the e.r.a. >> mad 6:00 p.m. eastern. we will have the first ever big interview with the ceo of priceline from am ter dam. we will have one of the most powerful people on the governing council of the bank of france, draghi warns the foreign
street. business inventories increased 4.1%. january's number unrevised and four 10s, everybody is talking how retail sales are better-than-expected. just to let you know, the business inventories figures into that. it comes out 30th of april. back to you. >> thanks so much, rick. of course, we are getting to the first quarter gdp numbers we want to talk about the roller coaster couple of weeks. the dow is up 54 points. the nasdaq and the green up 10. the s&p and nasdaq has joined us this morning. joining us, guys thanks so much for joining us. gina, i'll start with you. which did see a thaw this morning with retail sales. do you think that plus the gdp
revisions will be enough moment item to get us through this spring? >> you know, we're hopeful. i think we will see a springback in the economic data, which will help support for soft prices. i think investors are keying in on earning, specifically. >> that is what i think will drive stock prices going forward. we got to see earning, we seen corporates constantly guiding lower, analysts reviseing their expectations lower all year. i think we need to create some sport for stocks here. >> when you look at 50 components of the s&p 500 reporting. what do you need to see to believe corporate america is as strong as we have been looking for it to be? >> well, certainly, this will be a challenging quarterly earnings period because of the weather-related issues. >> that said as you mentioned, analysts are reviseing downwardly their expectations. >> that puts the markets or the
earnings season in pretty good position here. that is that corporations can probably beat estimates by a pretty good margin about in line with what we have been seeing on average and more. i think with this recent pullback, they have taken out that negative impact potential on the stockmarket. >> we are also looking at a big rally in financials today on the back of citigroup earnings. that has done a little bit to bring back some positive momentum into the market after this tech-lead sell-off last week. when you think about the fact that the nasdaq has actually lost 8% of its values from its highs in march. does that give you comfort that that's a big enough sell-off that we don't need to sell off any more from here? >> i think the nasdaq and social media stocks and biotech stocks and we missed a whole other story. that's water happening with consumer discretionary stocks. these stocks have led the advance for the last five years. they've sold off significantly
so far this year. so while everyone else is focused on the nasdaq, i think we should focus on the consumer stocks, the retail report is a bottom forming item for the consumer stocks right here. i think consumer discretionary will tell us whether this market will find support, so i look at that factor instead. >> jane, this isn't your first rodeo by a long stretch. it's well to talk about where we are in theory on valuations, when you see a major trend rip him through the market as we have done with the momentum stocks, doesn't that leave you concerned about market direction, particularly with the feds tapering it would seem without compromise? >> this has been a very unusual, in my opinion, bullish market cycle because of the breath of the leadership. . it's been a broad selling in technology in healthcare two big
momentum leaders, the overall mark is really had a very nominal correction the dow down 3 is is% down. we have to take into account this is a fiercely rotation market. we are moving into the advance rotation. yes, there will be more focus and attention, this will make the sweet spot in the market more in the recap growth area. >> is this in the bigger moves in your view? >> you know, it's early to say. i think ma the canary in the coal mines could be is the fact that you tills are leading this mark and consumer discretionary stocks are lacking so substantially. that's the really big structural change, yes, we've seen a loss of toemt momentum. those things happen from time to time. we need to see earnings recovery in some of these selective
secments in the market. >> it's a busy week for earnings for now, thanks, so much for joining us this morning. >> thank you. >> elsewhere in earnings, citigroup beats estimate, shares are on a tear up nearly 4% on a q 1 beat. that was compared to analysts estimates. revenues came in higher as well $20.1 billion in the expectation of $19.4 billion. they released low losses, the exact money they had been saving for potential weakness in bad loans they would then to have to cover. i got off the media call. i want to bring you headlines from what the ceo said. of course, there were a lot of questions of some of the regulatory issues, most notably, it's failure of the fed's capital return test in march.
they sid they will use every resource to meet the fed's expectation. they had no issue with the business strategy or level of capital at the bank. they need to make their process more robust and do a better job of predicting where they could see some losses in the event of another downturn, because of their failure on that, they will have a scenario hard to imagine where they will meet a target for return on tangible, common equities. then the other issue of the many mexico fraud, fraud that took place at its mexico unit in a loan program involved with a couple mexico companies, they said there is another instance of fraud at another supplier. they would not name the supplier. the u.s. quite small compared to the other infant. we have still months away from
citigroup and they did not comment on a doj investigation that is currently ongoing. you have moving parts in citigroup, ultimately, the numbers were good. you did see revenues fall slightly. they also took expenses down in a big way. they had a lot of improving valuations in their portfolio. so all of that really helps the balance sheet and the track on citigroup. it actually helped them become far more profitable as an entity. you can see that in the stocks and the numbers they reported. by all means, a beat for citigroup on the top and bottom lean as they get under way. we will bring you the headlines as we have them. >> doing more with less. meantime, facebook doing more than a notification. the social new yorker giant applied for a license to allow it to provide electronic money services to its members. it brings us to "squawkon the street," if facebook starts a bank, what would its name and slogan be?
tweet us and we'll give you responses later on. when we come back, priceline started that momentum stock mover. the ceo, his first major interview since taking the job. the online travel giant is live when "squawk in the street" continues. [ music playing ] [ music playin♪ [ dog barks ] ♪ [ male announcer ] imagine the cars we drive... being able to see so clearly... to respond so intelligently and so quickly, they can help protect us from a world of unseen danger. it's the stuff of science fiction... minus the fiction. and it is mercedes-benz... today. see your authorized dealer for exceptional offers through mercedes-benz financial services. [ male announcer ] when fixed income experts... ♪ ...work with equity experts...
welcome back to "squawk" on the street. the stock souring webpd expected first quarter results to top the first quarter forecast due to an improvement in sales, it rose 32%. it will report on april 30th, shares on rally mode better than 16%. simon. >> thank you very much. the major indices are off their highs, this after the nasdaq had its worst weekly performance since when the itself 12, selling pressures continue, the high flying momentum tech stocks. priceline down roughly 8%. 15% from its highs. the company recently announced
the name change and is forecasting strong international growth. joining us now in his first major interview is darren huston, they include booking.com, goda and kayak and rental.com. >> good morning. >> you are bringing the changes at priceline, not only have you changed officially the company's name, but you also, although you have been made group ceo, are still working out of amsterdam. >> yes. >> and still heading booking.com. such is the pompbs of that business him talk to us how you see the new job. >> i think for a lot of americans they see priceline as name your own price, our business is more than 80% international, growth profit is earned outside of the united states, being a booking.com, the principal consideree of the group is an important place to be we are a global business.
>> the value is in the for so long people have pounded the streets of europe to get those hotels with relationships to booking.com and that's quite unique. this is a true travel agency. >> exactly, being an online travel agency isn't all spreadsheets and technology, it's a lot about managing relationships on the street also customers. we have over 3,000 people helping customers travel around the world. there is a lot of hard work for being a travel agent. >> let's talk about the stock price moves. you have gone from 70 billion to 60 billion in market capitalization. i mean, how do you feel about that? were you like the ceo of net flicks that felt the stock was overvalued? >> when i started the group three years ago, the stock since then has tripled, the business has more than doubled. you look back to the heyday of the stock, it's gone up over 100
x. this is short-term issue when we focus on completely is how do we drive great business? how do we continue to grow? >> for example, the speculation is you would buy home and away, home away, forgive me, the booking oefrgs out of operation out of texas. presumably, because you guys don't necessarily have the currency at the moment to do the transaction or it's so blurred. could you buy that stock? >> we focus on organics. we paid transactions fairly infrequently like the kayak transaction last year. a lot of our growth is driven organically. as we expand the type of accommodation, b & bs, hos tells, resorts, some people speculate things we might do, we are continually organically executing on our main platform. >> obviously, now dot-com has
come out of the name. it's recently touted as a success story. i'm wondering when you look at twitter or the modifiers, the internet companies are dealing with a perception problem in the mark as the stocks go down or the ipo gets plugged what do you think priceline did right to reverse that negative perception? >> at the end of the day, we make money. we're a business that makes a lot of money. if you look at our growth last year, our top line grew trath% year over year, the gross profit 40% year over year, there is a difference between one side of the internet, they have models and act like any other business, very high return on capital, others trying to find their business model. priceline has focused on profitable growth. i think that has driven our success over the years. >> what do you think is your greatest competitive advantage? you were one of the early ones. it's a wide opened field, now we have disruptive technology and
companies conceivably such as air b & b, coming after certain parts of your business, so when you talk about how to defend that, what is your greatest weapon? >> the satisfaction in our products from consumers is tremendously high and that is probably the biggest advantage we have, dealing with consumers about the product. it's how we deal with them. if they ralph to india and get overbook with ve examiner service in 42 languages that can help our consumers no matter where they travel. the other issue is we are building out a network larger than our nearest competitors. last year we grew from 290,000 to 400,000 accommodations. today we have almost 450 accommodations. we are wiring up the world. companies like b & b are comfortable staying at somebody's sofa. we are focused on hotels, b & bs, hostels.
>> i know you were touting a huge success there but with mobile comes the danger. people use your apps, they're not going on to google, therefore, googlele is being forced to come into that space. you may sit as the largest advertiser on google i believe $1.5 million. >> one of the bicker witnesses. >> how does that relationship? if google is going to become more aggressive? what happens? >> mobile is a huge game changer. we grew our mobile bookings, in 2011, we did a billion. in 2013, we did $8 billion. you can see, mobile for an ecommerce company is a major asset. we can now be relevant to our consumers on a desktop, on a table, on a phone. we can plumb across their whole end-to-end experience. google is a pedia company. if you go up and look at hotels in minsk, in london, it's
generally booking doak or our other company. >> you paid to be there? >> we paid to be there. >> you are cutting google out. it will be. >> i think people often underestimate web based mobile is getting bicker than app based mobile and google is very relevant in that space. >> will you stay living in amster ta amsta amsterdam. >> i love amsterdam. i am always ralphing. >> it's nice to see you, come back. >> any time. >> the group ceo of priceline. >> when we come back, retail sales surgeing in march,
>> absolutely, it was a little surprising. i was expecting to be lower than that. >> you think it's pent up demand from winter? >> winter was terrible. you have retailers, overall, you are seeing a promotional environment. i think the numbers are skewed, you have this late easter. so the retailers are counting on right now. this is the main time. >> easter is always confusing. why excuse the calendar so much? how do you explain it to the laymen? >> i think you have this big pent-up demand with people buying few fashions. a lot of buy, comes around then. i think that sudden change. >> if it doesn't happen now, we got a problem. the inventory is there. now is the time for shopping. it's starting to clear out, the
retailer is more promotional. you see friends and families, the inventory has to be cleared. >> too little too late? >> it can come and they won't get there. >> you clearly have too late in the sense of the numbers for january, february, march. they were tough. the weather was horrible. the inventory is there. there is a lot of inventory that has to be cleared. whether it's too late, you will see margin pressure out of the retailer this quarter. >> who is playing best? >> oh my gosh, you have the winners, the losers, you have a share game i think it's the companies playing omni can el the best, investing in technology the ones that are winning, the macy's, the dick's sporting goods, i see it in almost every category, home depot and lowes, those in an omni channel are winning. >> 85% of soft good retailers
have operating mar jens worse than the prior year. that's bad. that's a tough year. i wonder, how do you then navigate within that. >> 50% is hard good by the way. not as bad. >> how do you navigate to see if there is money made? >> there is exclusiveness and infavation. they are going on the web, looking at pricing, they can buy online, ship from a store. so what's happening, is the consumer has more knowledge. it is putting pressure on the retailers. they got to up their game and be betterch that's why technology is so important. >> the retailers were caught by surprise. they didn't seem to be expecting the actual share of people buying online versus going into the stores him i'm wondering what you think the lag time is when they see the trends start to change and within they can actually adjust their business models to cater to them. >> this is a juggernaut that's been coming. we are in double digits in terms
of the percentage of the business. it's not the amount shopped online. it's the impact online is having in stores. you saw an argument about google doing testing relative to the impact of the online in terms of the impacting the store behavior. we saw it, an enormous between the store, three or four times as much. >> what about mall traffic? >> the a-maos are doing better, obviously the overall track is flattish. probably up or down a couple percentage points, depending on the mall, again, it's reinvention, innovation. the malls have got to up their game, too. >> atlanta has no longer with teens hang out. i don't know about you. that was definitely where we were in high school. >> absolutely. that's why i say the malls have to reinvent themselves, it's not just about the restaurants. 30, 40 years ago, you are used to see santa claus, now you see
what will draw them into the malls? it could be the movies. there is a lot of other things they can do as well. >> it's good to see you. >> straight ahead on the program, results, is it time to buy? we'll show you how to play the financials. most importantly, one of the governing councils will join us as draghi warns the markets on the strength of the euro. ngth o. ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry, but you worry. what happens when your paychecks stop? because everyone has retirement questions. ameriprise created the exclusive confident retirement approach.
b. >> in his strongest warning to the financial market, maria draghi says it will possibly contribute to easing. joining us for an exclusive interview one of the powerful lenders of the council, good morning. >> good morning. p. >> how worried are you about the euro? >> roughly your precision of the euro, all currencys over the last 40 months explains a half a percentage points of the inflation, it means that if it were not for the depreciation instead of being .5% of the depressioniation, we would have a 1%, it's a drag on our objective of price stability. >> so this is the second piece of verbal intervention from mario draghi over the weekend. the first came 20 days ago when
he said all council members stood unanimously by to potentially launch qe, one of the reason for the euro gains people don't think you can find enough assets to buy that would push down bank loans on small to medium size businesses, it's too complex. what would you say to those people? can you find stuff to buy? >> oh, sure. there is a lot of securities, qe and the other policies we normally use, we finance banks, we provide huge amounts of liquidity. we provide a kind of option to all banks to get lick wittied because we have more options and food allotments but if we want to go to buying securities, which is really the heart of qe,
we have to take some securities. we can buy private ones and sovereign securities. >> i beg your pardon, are you saying as a part of qe, you could buy sovereign debts. >> that we thought was illegal? >> no, we have done so in the past when we implemented our securities market program. we have done so when we started the so-called omt policy, when we, mario draghi explained you were committed to whatever it takes to save the euro. and so it's absolutely possible to intervene on this secondary market. >> so such decision rallies are suggesting if the euro gets to $1.50, that might cause you to act. is that the level you are thinking of? >> absolutely nothing to answer to that. >> oh, come on, give me an answer. it's so much fun. >> what i said is really our
thinking. we think the operation that has taken place during the last year was not appropriate, that it somehow a bit strange because the euro zone is lagging behind all other adverse economies in terms of the recovery cycle and we still hope that it might correct itself, naturally. but if it be, we are ready to act. >> so you could act at this level? >> we would coulding a whenever we find it's necessary to insure a safe recent past to our objective of the price stability, of inflation so it would very much depend on incoming on inflation, on the economy, on the economic recovery and part of these stories, the evolution of the exchange rate. >> so you had the head of the
bank walking back saying, you know what, actually, inflation is deflated, i think medium term it will come back. you won't get there. is he right? is that the considered view? >> it is our mentioned scenario, inflation will come book in the medium term, but we also say that we don't want the inflation rate. we don't want to see the inflation rate staying at the very low level where it's now for a long period of time, so we will look at that time, it's starting to act. it's true that as mario drag di said, the more the euro would appreciate, the more we would need to compensate that, but even mormontary policy. >> you know, there will be people that were incredulous you were involved with so late on qe. the fed has spent $4 trillion on qe and still the inflation rate
here is 1.1%. when they've dong it on that scale, that was the result. what can you do so late? >> well, there are several aspects. one is that the financing of the economy in the first on theive of monetary policy as in all economies is to insure the flattening of the yield curve. that's why the federal reserve has used qe. we have obtained the same flattening of the suv, barriers, other okays, including long-term refinancing of banks. our guidance and various interventions to fuel liquidity into the market. never forget that in the euro zone, about 80% of the economy's financed by the banking system, whereas, in the u.s., it's mostly financed by number market. so the fact that historically, i mean, during the last few years, the two central banks have used different kind of tools as just
an image or a reflection of that difference. >> we have to let you go. i know you have a conference, the euro class conference with wall street. when they gather round and go vision noyer, have you gotten this after it's over, in a word, what do you say to them? >> yes, i think the bulk of the crisis is over. there are still things to finish to repair. but we see that the economy is returning to growth but less and less so. still even and less an less so. and we have real confidence that we can return to a good path of growth and price staenlt. >> good to see you. thank you for your time. christian noyer, the governor of the bank of france. >> thank you very much. shares in citigroup are up
higher by about 3.5%. let's bring in a u.s. bank analyst with s&p capital iq. thanks for joining us. >> thank you. >> give us your read on the earnings, when you dig through the press release, there with is not a clear story that emerges from this quarter. what are you seeing? >> well, in terms of the positives, the city holdings losses were narrower than expected. non-interest expenses were fairly low and in line with what they were last quarter. the efficiency ratio was 60%, with i is really good. reserve releases 650 million in lean with the previous three or four quarters. so they've contributed to the top line and bottom line seat and in addition, investment banking and trading was quite good in relation to the previous
two-quarters. >> great. we had largely more equity capital marks business than outpaced what we've seen in a drop of fixed income across the board. what i'm hearing is they cut costs, credit is getting better, city holdings is becoming less of a track. that's not really a whole lot of city's business when you think about it. the consumer segment looks fairly weak. we actually took your price target down to $52 a share. what is your prospect for citigroup in the way that its engines will fire going forward? >> well, leak you said, the global consumer banking was very weak this quarter. that's one of the reasons we have a hold recommendation on the stock. in addition, the investment banking and trading is about 45% of revenues, which is higher than any u.s. bank, therefore, the valuation of citigroup should be more along the lines of capital market banks, which is lower than the valuation of a
regional bank. so with 45% of revenues coming from investment banking and trading versus j.p. morgan at 35%, that plays into our valuation decision. >> there is a few big thorns from this company the fraud in the mexico unit as well as the issue with the fed's failure. when you have been on the call with senior executives if about 20 minutes, what is the main thing you. to hear from them. >> i think one of the main things is why is global consumer banking so weak? that's half of citi corps's revenues. there is wide strength weakness, there is no strength in the four global units there. revenues are really down pretty significantly. mid single digits. >> that will be worse than what we will see from the u.s. banks that report next week. so that's one of the things i want to hear is what are your plans to get that, half your company? what are your plans to get that
growing again. >> eric, you don't believe mexico will be a material long-term issue? >> i think the mexico issue, which was a loss of $235 million, i don't see that as a long-term issue. >> that is one thing they have to fix up the controls for this bank. a year from now, i don't think it's going to be an issue. it's certainly not as big an issue as the london whale $12 billion losses for j.p. morgan chase and they will probably resubmit during summer and likely get approved. >> for now, we will leave it there. thanks for joining us this morning. >> thank you. >> when we come back, up next, one of these men is the highest ceo of 2013, find out who is taking home that honor and which executive ended up getting paid the least. that's coming up after the break. break. predicting the future is a pretty difficult thing to do. but, manufacturing in the united states
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welcome back to "squawk" on the street. check out shares of walgreen, they are under pressure from shareholders to consider relocateing to europe. >> that according to financial times. shareholders earning a 5% of the companies shares to use its ownership stakes to a head quarter in europe. the inversion would significantly reduce the taxable income in the u.s. shares up about 2.8% on the day. a new study revealing the highest paid ceos in the country's 100 largest companies, who made the top of the list? mary thompson is back with details. >> familiar names at the top of the list, legendary names. we will start with number five, that would be emmerson electric's david farr. he earned $25.3 million as well
as perks of 264%. this followed record revenue for the company. honeywell's david cote earning a hair more. his total package of $25.4 million up 56% after his company racked up a 47% total shareholder return in 2013. a perennial on the highest paid list, rupert murdock earned $26 million along with the highest ceo, the salary is $8.1 million. disney's bob eiger checking in at number two, $33 million fell 7% as the media giant total return was 29% and oracle ceo and fonder larry ellison his $77 million option reward made up most of the pay he took home last year. the software giant voted no
executive pay two years in a row. take a look at this, median pay rose 9% to 13.9 million. the average family coming in unchanged. the rise in median pay to be expected given a:30% rise in the stockmarket last year. keep in mind about 56% of their pay is tied to the performance of their stocks. one notable name on the list, larry page, co-kounder of google. his salary a dollar a year. keep in mind, this is not the list of the highest ceos of all companies, that list will be coming out in the summer. published by the fork times. back to you, simon. >> what did she say 56% is tied to share point performance? >> stock grants and option grants. >> that may be one reason why they are so intent on buying
back their own stock. >> some people speculate that. some say it's the best use of their cash at this moment. >> of course. mary, thank you. still ahead, google glass could be making it to a hospital near you. a doctor says he was able to save a man's life. that's coming up later, "squawk" on the street will be right back. back.
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we have a triple digit gain on the dow. let's get to chicago and to rick santelli. >> hi. i'd like to welcome my guest, vincent from double line. >> hi. >> your organization is big in housing from an investor standpoint, is that correct? >> it is. >> you have kind of an intuitive and hands-on feeling for the issues of housing. great housing. since the crisis, what's the highest mark housing has had and when did it achieve that? >> probably a c plus right now and to to be perfectly blunt, we're there now. >> as good as it's gotten? >> as good as it's gotten so far. >> for some reason why are things not as good as they were a year ago in housing?
>> we've gotten all the refinances out and no signal from d.c. they will reform fannie or reform freddie. >> let me stop you there. obviously there's boat loads of articles, crapo, a plan going on, on the house side. in the end, i hate to say this, the more i've read, this stuff has come into the newspapers and get links and read various portions if not entire reports. the government is here, camped in, not going anywhere soon, is that an accurate statement? >> very accurate statement. the problem is we have to get it out. we need the taxpayer off the hook for the american homeowner. great to have freddie and fannie in for the first-time homeowner. we have a 10 trillio$10 trillio. we can get the government out and private money in. >> you say you can. i look at political reform and tax reform and refothere's inaby
to get anything passed, come on, on a scale of 1-10, yes, we can get it done, what do you think it really is? >> between now and the election, zero. >> what about between now and the 2016 election. >> maybe three. >> what you're saying we have to wait until we reconstitute the political landscape before we can make headway. do you think between now leading up to the 2016 election will add to the economy, subtract or no effect on the economy? >> i think pretty much neutral. very much neutral. >> i find that a shame, personally. >> absolutely. >> if you have to summarize why the government believes it has to be in the housing space post crisis j.c. what's the number one reason, what would it be? >> control maybe? >> control in terms of the people that can't put the right numbers up to buy a house from a credit worthy standpoint?
>> that's part of it. the other part is they think by having the government in there, they will be able to keep a good solid market. there are other plans and other ways to do it. >> if you wanted to fix housing you'd say private meteorologists need to come back? >> absolutely. >> we'll turn it back to you. >> we warrant nt to turn it ove david, a hostile that was initiated. >> we've got an an answer from aspen insurance holdings reje rejecting the position from endurance to acquire aspen for $47.50 a share in stock and cash, a supreme cou40-60 ratio. aspen has been at this a long time. they wrote a letter they wrote on april 8th or sent on april 8th to the board of directors of
endurance rejecting what they made this morning and said in your prior letter referencing to late february we find your most recent letter to be based on uninformed and unsubstantiated portions that do not stand up to analysis. a strong rebuke from aspen to an unsolicited bid from endurance. aspen shares up but down from the 20% jump they took in the early going and durham shares had been up briefly but went down. >> what about bermuda? >> i think i'm there. starting to warm up there. you would know. you travel. mostly not here. >> yes, mostly on holiday. >> and we will get into photos
and birthdays and facebook the social network has applied for money services across europe. we're asking if facebook starts a bank, what would its name and sloban be? coming up next. ng up next. with centurylink as your trusted it partner, you'll experience reliable uptime for the network and services you depend on. multi-layered security solutions keep your information safe, and secure. and responsive dedicated support meets your needs, and eases your mind. centurylink. your link to what's next.
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facebook has reportedly applied for a license to allow it to provide money services across europe. we asked you if facebook starts a bank, what would its name and slogan be? writing face bucks, almost as real as the me on the fed has been printing. >> we talk about them as a holding company and just keep going into new businesses. >> dow was up this morning 130. here's what you missed. welcome to "squawk on the street." here's what happened so far. >> this is a heavy earnings week. i don't ever want to say it's okay knowing when you have land
mines like we had last week with jpmorgan and wells fargo that the coast is clear. this is the coast is case by case. >> they come out with a hostile bid and we will see how that performances and what the response is overall. [ bell ringing ] . >> you went from $70 billion to $60 billion. >> we focus on completely how do we drive great business? how do we continue to grow? >> i think the numbers are a little skewed. you have late easter and retailers are counting on this is the main time, the big time. >> good monday morning. it's 11:00 a.m. on the east coast, 8:00 a.m. out west.
here's what we're watching today. sell-off, what sell-off? stocks rebounding this morning after nasdaq posts the worst week after almost a year. find out why things are looking green so far. >> you might like the new way to spend money. facebook's reported for ray into the world of financial services. >> yahoo! earnings around the corner. when the tech giant reports, they will be looking at the original content and alla baba. and we'll tell you why. and in one emergency room, one doctor will tell you how he's saving lives in the er. >> and jon fortt, buzz feed president and that major sell jo last week and most of the move is thanks to the momentum stocks we're often talking about. this morning, netflix, twitter, priceline, all moves to the upside and the ceo joined us in
the last hour and told us what has set hits company apart from the other names. take a listen. >> a business that makes a lot of money. any can look at the numbers. last year, our top line grew 38% year-over-year, gross profit grew 40% year-over-year. there's a difference between companies on one side of the internet that have business models that work and act like any other business, very high returns on capital and others that find their baseline. priceline has focused on profitable growth. >> interesting take. if i'm a deleveraged hedge fund i might parcel that carefully. >> on why we are where we are at. the average company stock was up 2,000% as of 2013 as the ebitda expanded 16%. the sales growth went on average to 26% down from 40%. you have slowing growth when you
have expansion of multiples. you look at dmv and they say we have a little more growth than anticipated in the stock rift and they're justifying expanded multiples. >> it's really hard to justify a multiple based on, hey, we're growing, we're profitable, yes, of course you are. that doesn't tell the investor how much they should pay for that growth and the broader market will pay for that growth. once we see more numbers coming out this earnings season especially this week we get a gauge for how the broader market falls out. >> and investors paying for that growth even if it doesn't come for several quarters, watched the twitter ipo saying this company won't be profitable until 2014 and they bought it anyway. i wonder how much patience people has in the market. >> i think basically everybody lost their patience and heading into earnings is it coming back.
twitter put up 9 million years and they have to put out a barn burner, 16, 20,000 new users. >> jack dorsey and williams say they have no plans to sell their shares. cramer argued that's bullish unless you believe they're trying to get in front of weak metrics for the quarter. >> it could. i won't try to read the tea leaves on any of these except to say the tea leaves from gartner is stronger than expected and could bode well for intel. we have to see not only revenue growth but on the back half for investors to feel extra good. >> i like the management signaling. i like sheryl sandburg saying, i'm not definitively not leaving and the managers saying i'm not selling stock. the growth numbers and the
lock-up. they have taken one of the issues off the table. put up a good growth number. revenues and earnings were good last time and it's important they win. >> the ft says facebook is entering the world of financial services closing in on approval in ireland for letting people store money on the social network. you can use this e money to pay and exchange fwith others. and facebook not commenting on that report. what do you make of it? >> the most important thing we don't know about this is exactly what facebook plans to do with it. payments, it's hard. there's a reason why a lot of these payments companies are paired up with big retailers. you need a volume of transactions to make this work. facebook's first for ray into a payment system on facebook didn't seem to payout that well. >> credits? >> exactly. a tiny fraction of revenue right
now. this does make sense with emerging markets. we see small businesses in india setting up transactions offline and it would take a lot of feet with what you see teleco to do prepaid cards to make banking work. >> peer-to-peer payments is a big market and i have friends that had one called braintree and acquired by papal. everybody is going after this space, coming on the conversation about square not going after the square wallet they see. i think this is crudded. skating where the puck is -- crowded -- and the open standard for peer-to-peer payments and facebook looking for growth in an overrun area a little bit. >> take us to the future. there's been much ado about whether your social standing will affect your credit
worthiness in the future, whether the people you're associated with and whether they pay their bills will ultimately affect your ability to get a loan or high credit balance. if you think the world is going in this direction, whether your finances -- >> the microcredit and lending thing where your social network is used to judge your credit worthiness. there's a lot of excitement about this. this is different for facebook on virtual goods but i don't think it will go peer-to-peer. >> we have so many different signals we can use to develop a credit rating here. in emerging markets it's very important. if you have a community of people who are vouching for you, who also have their credit on the line, you're much less likely to default. >> that's really interesting. it does bring us to this morning's "squawk on the street," if facebook does start a bank, what would its name and slogan be?
we'll get some answers later on this hour. yahoo! today to announce earnings tomorrow and they will keep a close eye on alibaba, the financial giant set to go public this year and could be worth over $100 billion. and the company getting ready to launch four web shows to launch and don't require a lot of development. good luck. >> everybody would love content that's ready to lunch and doesn't need a lot of development. i corresponded with a former yahoo! exec. i don't know exactly what the strategy is. it seems awfully rbis ski. yahoo! doesn't have a lot of built-in distribution aside from the website to really make this content pop if it does acquire it. it amounts to a risky bet. we'll see if they can pull it off. they will be competing with netflix and amazon and several
others who have better distribution. >> it feels different than the way netflix went about this and said we will spend a lot of money and try to make our content really good and bring on good actors to launch this. does it worry you? >> suntrust does an analysis where it says yahoo! is getting zero on ebitda. compare that to demand media, 5.2 and aol, 6.0. they have contrasting businesses. all yahoo! has to do is something innovative and show growth and will get that $40 price. to me, lower hanging fruit in the original programming is they are growing immobile. in the first two months they went from 108 million actives to 124 million. if they come up with a growth story on top of the alibaba story you have interesting slowdown
>> what about the slowdown in some of the alibaba numbers? >> there is a bit of danger here. it is reported basically a quarterback. we're not getting the most current look how alibaba is doing. fourth quarter has good days but if growth doesn't look good, that is a problem. >> we're looking at 40% growth numbers people are expecting in q4. prior nine months, with a decelerating growth off the base and if we see anything lower, investors are skittish. where between $100 billion and $150 billion does it price and some people thinking upwards of $200 billion. >> that's a big number. >> see you later on. dow is up, at 133 in the morning and nasdaq is back above 4,000 after falling below it for the first time since february
5th. up next, the so-called he t heartbleed and security to address this cyber threat. which passwords are dangerous and which should you change? rick santelli, what are you watching today? >> i'm watching the single issue nobody is comfortable explaining. why does the economy not feel very good to so many. i think i have a fairly easy very politically incorrect answer. you want to know what it is? come back after the break. yo u are feeling tisfied without standard leather. you are feeling exhilarated with front-wheel drive. you are feeling powerful with a 4-cylinder engine. [ male announcer ] open your eyes... to the 6-cylinder, 8-speed lexus gs. with more standard horsepower than any of its german competitors. this is a wake-up call.
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welcome back to squa"squawk the street." general motors announced the heads of communications and heads of human -- or the head of human resources, both are leaving the company. we are seeing a management shake-up. the company announces the head of communications and human resources leaving the company. they're up a little under 3%. >> looking at energy, the best performing sector on the s&p this morning, many are doing quite well.
pione pioneer, electrically burton and baker. >> and we're going to seema as wel well. >> investors are cheering sec r sectors leading sorrow followed by pioneer natural resources, haley burton. chesapeake energy and baker hughes in the green, up about .8 of a percent. >> thanks for that, seema modi back at hq. the security woe called heart bleed is leading people to change their passes word. how big of a threat is this? gentlemen, thanks for joining us. emanuel, i'll start with you.
da dashline manages pass words. there's expectations even if you change your password, you could still be exposed to the bug. how do you get around that? >> the only way is have a password on every website and requires password management solution. it's only on one site, not all. >> what happens if you change your password and the site hasn't patched up the site for the bug itself. doesn't that leave you vulnerable for information to leak out? >> what we recommend is change password the first time now and probably a second time in two to three weeks. >> good luck remembering them. >> i guess that's what dash does best. you say 55% of people or sites still accept weak passwords, 1, 2, 3, 4, 5, 6 and many don't
give edadvice how to create a stronger password. you say ditch passwords all together and let a service like yours create passwords for you and store them for you. why should people move to that and isn't that even more complicated? >> it is simpler because we are taking you out of the loop and automate the process. why should you do it? essentially because the internet has become too rich and complex and use it on too many device, coming up on your own password doesn't work in this day and age and even less with heart bleed. >> this is a bug that affected internet devices and routers and boxes and thungs that don't necessarily operate on the internet. >> this was very widely used not only by websites and equipment
manufacturers. your cables boxes at home hand thermostat had vulnerable investigators and we have equipment to provide a secure connection to allow them to change settings and that kind of thing. updating those type of devices can be very difficult. we're seeing cisco and other big companies that make this equipment coming forward with updates and urging people to apply them. it's mostly up to individuals and companies to update themselves. often they don't bother and leave them for years and years and it's likely the heartbleed bug will remain in these devices >> do you want to update and make sure the company restores you with a new one or calling the company and changing information about you as a consumer that's in conjunction with that device? how does that work?
>> often these devices you can update the firm wear on them. older devices, that may not be the case. older and bigger companies should be looking at it equipment and what should be upgraded with pa software patch and physically replace. experts tell me a lot have to be physically replaced. it's something to be aware of. >> people are using this as an example, almost an indictment of the internet in general. i wonder if that is making too much of it? >> that is making too much of it. there are solutions. hea heartbleed is just one of others where there was 120 million passwords stolen and consumers have to take action in their own hands. >> we have learned something how the internet functions last week, not all good. the software was used by two-thirds of websites.
it's a free piece of software, open source. the idea is it's provided for free and the community of companies and people that use it will contribute code back and support it. that wasn't really happening it turns out. this project is very small with one full time person working on it and it wasn't really getting back. people are starting to ask questions, why wasn't this critical infrastructure being properly supported. hopefully that will change. >> that's a question that's still being asked right now by a lot of companies trying to quantify their risk and figure out how to notify consumers and start patching it. unfortunately we have to leave this conversation for now. tom and emanuel, thanks for joining us and we will continue to discuss this. >> thank you. meanmeantime, check out thee on citi. not bad. what went right.
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bond yields, treasury yields. they don't seem to be sending the message we've all been taught when horsepower increases in the economy, interest rates go higher. we understand there's a lot of cross winds in the forgivederal reserve. the answer is possible. when you have a recovery knife and trying to help large parts of the u.s. economy, participants and citizens in the u.s. they don't feel as though they're being included, in what has been an historic run since march of '09 in stocks. yes, the government is the problem. yes, that's what i'm saying. i know there's boat load s of politicians don't agree with us. barney frank now is a contributor. in the end there's a lot of money on the sidelines, a lot of income tax revenue that has come in but it still doesn't seem to
do the magic it once did. why? at the end of all those dollars are investors that need to direct those dollars and they just feel as though there's a hand that's there that's always pushing the equation whether it's in college and education and student loans and debts and how freely to give anybody credit whether they can pay it back or not and lack of true reform in immigration. after the crisis, uncle sam squats in everybody's living room and refuses to leave. we saw it show up today. business inventories a pretty decent number. we know there may be a comeback from the inventory build with respect to weather and demand. the inventory sales ratio, two months running at 131 basically puts it at the highest level since october of '09. if you want the economy to hum along, you want the sales part denominator to get big and this fraction to get small. you don't want it hovering at the highest level since october
of '09. >> thanks for that. we appreciate it as always. we want to get you a check on citigroup, that stock up near 4% of the highs of the day as it beat estimates on the top and bottom line. there are some issues with citigroup's quarter. a lot of analysts have revised for this quarter. you had a positive story in equity markets. that canceled out weakness in fixed income, for citigroup not as bad as its peers and growth in asia and outpaced the u.s. and europe. the portfolio had risk fall. and revenues down 1% from a year ago, consumer down, institutional clients down.
s citi holdings, the only place you saw a jump in revenues, the sizable one and lifting the boat there, interesting for a story like citi group and asking questions about the strength of the core business and if it will pay off >> after wells can you make the case it's shaping up net positive rather than negative. >> interesting they have different profiles and business profiles and seeing strength rather than weakness. on the whole of it, not that much growth. tyler mathisen said is this the new growth for banking? are these low growth industries and the answer is probably yes. >> has to give the bank a little leverage going into the shareholder meeting. >> you would think so but remember the shareholder meeting is a place to air grievances. it will be easy to forget this
quarter and stock up when you get face to face with the board and ceo when a lot recently has gone wrong. let's go to seema mody. >> check out mastercard when the stock was upgraded to outperform neutral and they have a strong business model and fears may be overdone. for visa, it has an outperformed rating and set to benefit from the proliferation of mobile payments and visa shares higher than 1.85%. >> thank you. a deep sea of red on the escalation tensions in ukraine. europe bounced back and cut its loss on what was a three week low on the opening session and partly because we opened here and retail sales good here and
qe for the euro zone. note the issues beaten down in the beginning of trade are still ingredient t negative territory. milano, 4% this year and airlines still in the red. the big news is euro and verbal intervention from drag go, head of the central anywhere bank threatening with action be that negative rates or possible qe further down the line. thats has continued to pressure the euro, down 2/3 of a percent and the exclusive session with christian, the governor of the bank of france saying, yes, qe is possible. yes, they know what assets they
will buy if they need to. yes, they could buy sovereign debt as part of qe even though a lot of people think that is illegal and the present level of the euro, in his words is not appropriate. >> we think what has taken place during the last year was not appropriate. it's somehow strange because the euro zone is lagging behind all the advanced economies in terms of the recovery cycle. >> christian notiyer speaking o this network. probably because everybody is in new york singing the same tune. >> stocks are pretty strong this morning. douse up 114 after last week's sell-off. one marketer telling us the rally is already over. we'll explain in just a moment.
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>> well, first of all, i would say, what's happened in the equity market here is not a surprise to us the fact it started to roll over. take a step back and think about what the mindset was coming into 2014. almost unanimous across wall street, the mindset was you've got overweight stocks and underweight bonds. why? it was up almost 2,000 percent and you're supposed to ride that trade and economic growth and higher inflation and higher bond yields and lower bond prices. we took the other side of that trade in a very vocal way. the reason when you look at the march 2009 lows, the critical uptrend right after the collapse of lehman brothers, right after the initiation of quantitative easing. that uptrend has tapped out with all the market sectors and key
indices, not just in the u.s. but foreign markets as well. when we looked at the stock market coming into 2014, we saw a market a bad risk reward trade meaning a lot more bad side than upside. what i say for viewers, don't look at this as the kind of typical pull back we have seen over the years, shallow and brief in time. the fact this market has hit its 2000 objectives means even from these levels we could drop another 10%. >> the fundamentalists like jim cramer say the way is clear, earnings will be good, the fed the common theme throughout that entire chart you were showing us from 2009, the fed will still be there as we said last week, how do you fight the fed when the
call has been a wrong one? >> it's a good point the technicals and fundamentals are not divorced from one another. it does not surprise us at the same time these key sectors and indices in the u.s. and foreign markets are hitting march 2009 targets. look what's going on fundamentally. the major drivers of economic growth around the world, the threat of inflation in the euro zone and our own substandard recovery here, these technical objectives we are hitting tie in are also major concerns of global economic growth. the two really confirm each other. the fact we hit a number of these targets off the march 2009 lows and we have major fundamentalists using key sectors of the global economy tell us from a risk reward standpoint, you want to be very careful what you do here. >> on a day we're up 129 points on the dow, you think that's
short-lived? >> what i think for the people watching this show, you should start to play a little defense. think, we had a tremendous rally. great gains and people's 14-kar401(k)s and iras are up significantly. take some money off the table. rotate into defensive sectors. for people more aggressive, sell some calls against your position or buy puts, play a little more defense than offense at this stage. >> thanks so much, bill straz l strazzulo. >> when we come back, we need a doctor who says he was able to save a man's life thanks to glass. [ bagpipes play ]
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treat you. care for you. today, you can come to cleveland clinic for anything, everything or just to get that "thing" checked out. big, small, and yes, the best heart care in the nation. it's here everyday, for everyone. that's the power the power, that's the power of today. cleveland clinic. call today, for an appointment today. strazzullo. coming up the top of the hour, will slow and steady win the race? some big banks recommend you stay with low growth names. what if the high flyers bounce back. we will find out which names the traders are expecting big things
from. citi beat the street sending shares higher, one of wall street's favorite stocks right now but should it be? all straight ahead at the top of the hour. see you in about 20. >> thanks. another installment be careful what you tweet. over the weekend, a 14-year-old twitter user posted an off-color tweet at american airlines saying she was planning a terrorist attack and was going to do something big on a specific date and american airlines responded and said they take threats seriously and forwarded the young girl's details to the fbi. american authorities have confirmed the dutch have arrested the twitter user despite the fact she tried to apologize and deleted tweets. what a crucial mistake. you don't do that. >> like yelling fire in a crowded place. you don't put something like that in writing. >> so sad at the same time. she claimed to have a muslim
name and a man. then sorry, i'm a white girl, don't do anything. hilarious and then yet not funny because of what the intention was behind it. hopefully kids are watching cnbc and learn from this. >> hopefully it will get covered today, that we know. google has glasses for a cool $350, and while they try to fit into society, the medical profession seems prepared to embrace it and one doctor said it helped him save a life. he joins us this morning. doctor, great to have you with us. good morning. >> a pressuleasure to be here. >> take us to this night in january. a proficient comes in with brain blooding and tells you he's alearningic to certain medications. how did glass help with that? >> this gentleman came in with a
severe brain bleed extremely hypertensive and his pressure was sky high. as you can imagine, the real treatment priority for these patients is rapidly and immediately decrease their blood pressure to stop the progression of this bleed. he was still with it and talking us to. as you can imagine, if you're in pain, you might not have all of your faculties with you. he was able to tell us, well, i'm allergic to some blood pressure medication, my doctor told me i can't take some medications, i don't know which one. that really limited our ability to treat him. so that day i was wearing glass and able to -- while he was able to say this, without missing a beat and without even losing eye contact with him, i was able to say, it looks like you're allergic to x medication and able to tell the nurse what medication to start the patient on. while i was looking for that
information, i was able also to find out that he was on a blood thinner, which is, as you can imagine even worse for the patient. if you're on a blood thinner you're not going to be able to clot and your bleed will rapidly get worse. in the process of finding that allergy information, we had to take an entirely different management strategy for this patient and start him immediately on an antidote for blood thinners. >> an amazing story, doctor. please smile while you're wearing google glass, because they make you look like a terminator. i can tell your bedside manner is actually quite good. do you wear this outside the office? for this to be a commercial success, it can't just be medical equipment. how do you feel about the device outside the workplace? >> before we started our pilot, i did use it as a -- as google
intended, with their operating system. when we started this pilot, one of our caveats was we had to respect patient privacy and confidentiality. it needed to meet all the requirements that our other clinical applications do. the first thing that we did, we limited google glass to only connect to our enterprise network and only run our applications. we disabled all the usual things glass does like search google and post pictures and videos and all those social networking kind of things that make google glass what it is. our health care application is really a locked down version of that, so that we can use it in health care while respecting patient privacy and confidentialit confidentiality. >> now, doctor, at least at beth israel, doctors put these on at the beginning of their shift. do patients have any reaction to
seeing a doctor come into their exam room wearing these? >> surprisingly, they have been very very open to it. if anything, they've been very intrigued, like what's that on your head? if anything they're very appreciative when they talk, a lot of patients are very involved in the health care and know a lot about their health care but they may not know the exact dosage or exact date or some other information that could be pivotal to their care. so they really find it engaging when we can keep on that conversation without interrupting them, without having to walk out of the room or log onto a computer, we can keep that conversation going and access that information and really involve them in the care. >> fascinating to see the technology no matter who the maker is, creep its way into american industry. doctor, great to have you. great story, thanks for sharing it with you. >> thank you. >> dr. steve horne of beth
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we in another tech bubble. today the oober for household chores, local access to handyman cleaners. today, handyman is making an expansion in 45 markets overall. the owner and ceo, joins us here. nice to see you. >> great to see you. >> this is a major expansion, isn't it? >> that's right. >> how big are we talking? >> we grew from 20 people four months ago to 100 people today. we've gone from 13 cities to 25 cities today. a pretty big expansion for us. >> which cities? >> all disbursed, austin to atlanta, baltimore, boston, chicago, d.c., all across the country. >> how do you test the health of a given market before you enter it to make sure consumers are willing to not only book but spend for services? >> sure. it's about a great experience. when you go to the handy book
mobile app or website you have to think about service. we electric about liquidity on both sides of the platform and look at our existing cities and think what matches a new city and start the rollout there. >> you have mixed reviews online. complaints about you continuing to bill bepeople after an initi experience deciding they didn't want to keep getting cleanings. do you risk scaling too quickly if some of the customer experience isn't completely locked down? >> look, i think we're in this moment right now people are comfortable getting services on the web. of course we have to maintain a high mps, 55, 56, the last nooirnt d90 days, customer reviews are very good overall. doesn't mean we will get everything all right. we run customer care 24/7 in new
york. >> scaling isn't free. start-ups are taking money when investors are willing to give it even if they don't need it. i believe the ceo of next door said when the food is passed, you take it at the table. i'm wondering from the money you've raised, how much is enough and are investors coming back and saying they're willing to give you more? >> absolutely. we have a great investor base. bob davis from highland capital. joel cutler from general catalyst. what we've seen we raised just over $12 imagine and announced that to date. we deployed less than half that capital. we're in a business there's a real market. this is a trillion dollar market globally moving from ratings to reviews to transactions for the first time and creates a huge opportunity for a brand to be built. >> oober has been snacked around for their pricing. what happens if i need a handyman at 12:00 friday night.
>> there is supply and demand >> what percent do you take? >> we take about 20%. >> 20%. something to watch. >> the co-founder and ceo of handybook. dow up as we said holding steady at 130. we'll look at this after the break. honestly, i'm pouring everything i have into this place. that's why i got a new windows 2 in 1. it has exactly what i need for half of what i thought i'd pay. and i don't need to be online for it to work. it runs office, so i can do schedules and budgets and even menu changes. but it's fun, too -- with touch, and tons of great apps for stuff like music,
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it will be an interesting afternoon to watch the markets. nasdaq back above 4,000. ubs financial services, good morning, art, good to have you. are you surprised by the action today? >> not really. everybody talk about the vix. the new fear gauge is the 10 year. if you took this morning apart minute by minute, you would see stocks have reacted exactly with the 10 year. the yield went up to almost the highest level early on. the dow was up about 100. the new zealand yield began to if there was some kind of problem and went to dow up 55.
then, we're back now in a very comfortable yield area. we're near the highs of the day. >> it's a short week but a crowded week. you have a lot of earnings and janet yellin speaking to the new york economic club wednesday. is there anything that could hatch positive or adverse consequences for the market either way? >> certainly. one of the reason they're watching the 10-year so conservatorly is they're trying to sorting through the headlines of ukraine. if there's real troop movement and real hostility, they think the first place they see that is in the 10-year. a variety of things could come up. janet yellin's speech, i would have to think has been vetted and riveted again after the little problem she had last time. i would tell the viewers you have to watch carefully if we have secondary strength, 1837, 1841, that used to be very clear
support. it worked three times. now, it will be resistance. they probably will have difficulty getting up through that. the run rate is not very heavy as of now. looks like fairly normal. europe went out okay. it's probably news headlines and maybe rumor mongers. >> you've never been a huge follower of the vix in general. people made a big deal about sfra17 on friday. does that interest you? >> no. i think it's a broken indicator. i think as time goes on it's been less and less effective. >> interesting to watch. for those going long on volatility, something to keep your eye on? >> a secondary factor. i will keen p an eye on the 10 year. watch the japanese yen, a lot of stories being told out there. >> do you care about the rally today? mean anything? >> you watch it but i think this
could be a critical week. we have negatives coming up the end of the week. >> maybe thin volume because of the holiday. >> we sent out and e-mail list this morning and 30% came back out of the office for the week. >> that's a good indicator. >> to see what the afternoon brings, scott is here with the halftime. >> this is the sell the rips kind of a day. days we've gotten a little bit of momentum, people have sold into it after some period of time. here's today's playbook. nomo or mo mo. is today's market a buy or buyer be wear. why some say time to look elsewhere. twitter versus apple. one is new and one is old. which is best for your portfolio. earnings barrage. a week of big names ahead. which stocks are our