Skip to main content

tv   Squawk Box  CNBC  June 1, 2015 6:00am-9:01am EDT

6:00 am
2015. "squawk box" bins right now. ♪ ♪ ♪ live from new york where business never sleeps, this is "squawk box." ♪ ♪ good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick. a california company is looking for a woman who dropped off a couple of boxes of old junk at a roilking center. why? it turns out she unknowingly handed in one of 100 apple computers. it actually was sold that piece of technology history in a private auction for $200,000. now it is looking for the woman to give her 50% of the proceeds. we'll have more on the story later this hour. let's get to the work on the first trading day of june. futures this hour you can see right now, things are in the green but barely.
6:01 am
dow futures up 18 points s&p flat. nas being dak -- nasdaq up 3 points. year to date nothing to really write home about. the dow is up 1% year to date the s&p gaining more than 2%. the nasdaq is in a different situation. it is higher by 7% year-to-date. the markets have closed out the month with a loss six straight times now on the first trading day of the following month, the s&p has been higher tree -- three out of six times. a 50-50 shot. history may not be on the bull side this afternoon. the market data shows all three major indexes have turned in negative performances on average for the month of june. and june is the second worst performing for the dow over the last three years. greece's prime minister slamming creditors in an op-ed that was published in france. what he called absurd proposals
6:02 am
of international lenders and warns of a future euro bloc that he says resembles a technoaccuratic monstrosity. he's been talking tough the whole time and nothing has been happening. also opec ministers are meeting in vienna at the end of this week. they are expected to keep their current production ceiling despite low prices and concerns of oversupply. opec has lost its mojo. >> has their lead story? what will be happening on friday probably nothing. >> we will see. u.s. gas prices rising 4 cents to an average $2.84 a gallon. this is 85 cents lower than a year ago. lundberg survey suggesting that prices have peaked. on adjudge -- agenda personal income and spending.
6:03 am
later this morning, ism manufacturing and construction spending. also the world's biggest cancer research meeting is under way in chicago. data from thousands of studies are presented it's the american society of clinical oncology and we blow it out every year with coverage rightly so. it's a fast-moving field. a lot of interesting thing we'll talk about, especially in the plenary session usually where it's just research and a well-known doctor and researcher talking about the high price of cancer drugs. you make some progress with melanoma and it costs almost $300,000 a year to treat it. if everyone who had melanoma was treated this way, it would be $175 billion. so why develop new therapyeutics if you can't -- actually if the people that have the cancer can't even afford to buy it or society can't afford to pay for it. it's kind. a qawndary.
6:04 am
>> we're going to be joined by a talk executive by roche and ceo of astrazeneca. and in washington supreme court is set to hand down decisions, including key case on health care that's being bandied about. and a study was done if supreme court case were to decide against obamacare, his take is it would be a boom for the economy, in terms of millions of new jobs. >> he thinks it's the job creation that's been changed by this. >> he thinks if it were to be thrown out or if they settled with the plaintiffs, that it would be a boom going forward.
6:05 am
i don't want to say going forward. i used to play with an apple too, a lot? did you guys ever have anything -- >> i did gs. >> when did it come out? >> there was the apple 2, the apple 2 e, is that the one you are talking about? there's the apple 2 c. >> this was 1979. >> do you still have this computer? it might be working something. >> it wasn't mine. it was at the lab at mit and my professor got one and why would you buy a computer? why would you buy a little computer to put it -- and all i used it there was this one game -- that's what i used -- and a lot of us played -- >> we still have our apple 2 and i've been forcing my mother not to get rid of it. mine was signed. it has a signature of steve wozniak on it. it's written in like -- it doesn't -- it's his signature but --
6:06 am
>> it's not officially written. it's been printed on. apple 2 gs. i'm going to find out. >> i don't think it has the same kind of value. >> you were an early adopter, and early adapter and adopter, you have a comma doer now. >> i also had an atari in our house. >> you know what, i still have all the patches. >> let's talk about corporate news this morning. intel is now close to buy smaller chip maker altera for about $45 a share or $17 billion. sources tell me that official word out could come today. a couple just background pieces on this. this transaction, i think we talk about a little bit on friday after new york post reported that a deal could come these guys have been talking for several months back in march, this had been originally reported. the offer on the table back then was $54. altera ended up walking at the time away from that price, however, they got some pressure
6:07 am
from tig advisers and a number of other shareholders to get back to the table after they missed some of their earnings transactions. and joe, you are always talking about the cloud. i hope you appreciate that this transaction is a cloud transaction. because basically what these guys make is a special kind of programmable -- you are the scientist here -- programmable pgas we beat this to death 20 years ago. you wouldn't have liked it because we used to actually have fun and joke around about it. we called it field programmable gatorade. it's really field programmable gaiter-aid. you can say right on the field, i want cherry. if you wanted the green, you can
6:08 am
say -- we would do that for -- endlessly and a lot of people believed us that's what they made. these are for servers, and i think servers somehow are involved in the cloud. i don't really think it's a cloud. i think it's servers making the cloud and these are little chips. this will help -- 50% of intel's profits come from these servers. from the server business and they want to stay on that. i think it's funny that altera said $54, go f yourselves. they said that a month ago. now they are $54 sounds pretty good to me. they totally said no to $54 and your shareholders said are you out of your mind? you are never getting this stock out there. it was at $48. only after it was in play. >> it's up about 56%. >> only after it was in play. >> since march 27th. >> because of the possibility of this deal and if the deal
6:09 am
doesn't go through, it goes back to -- >> we could see it before the market opens but maybe it happens more toward the end of the day. >> those are the two. this is 15 -- fpgas have been around foreign a long time. >> i was going to tell you something. you are always telling sme something. >> companies thought they would be able to actually pay for the chips that come in a certain way. instead, they send them. the architecture is already there. >> i'll tell you about some other health care news or rather m & a news in the health insurer world. humana saying aetna and cigna have expressed interest in their rival. >> medicare advantage. >> we'll tell you more about it as we learn more but i think we're a couple of weeks away if not longer. >> which is a weird thing. because for a while they tried to put it out of business
6:10 am
medicare advantage, obamacare, they didn't want to pay more for it. it stayed a pretty good business. >> which is making you why they are looking at selling it. >> you do need size and aetna and cigna -- i think it's a sellers market. not a buyers market. let's talk about what else is new this morning. microsoft announcing its window 10 operating system will be available worldwide on july 29th. the company will provide a free upgrade. it will return the start menu and run across perform p.c. as tablet and smart phones. the government authorities began probes of possible violations of annie money laundering laws. they want them to pay $100 million to selingt those allegations. general electric has
6:11 am
launched the sales process for its u.s. commercial lending assets. back in p a, it announced that it planned to get rid of most of its fnls businesses. let's check on markets this morning, even though the gdp number was not as bad as people thought on friday. it was down .7. it really threw the general media for a loop that it was a contraction. you would say this was the third contraction. we've had three quarters where the economy has contracted in this recovery and that really threw just people for a loop on friday and the market ended up closing lower, but then we heard all the -- i know the commerce secretary said that it actually was okay and it meant absolutely nothing because it was a really bad winter and there was a port strike. what else was it? and the strong dollar i guess were the three things it said not to worry. not to worry. >> oil prices. >> in the 80s and 90s, that 3% it's hard to manage all that wealth creation.
6:12 am
you know it's just -- it becomes difficult to work through. all the jobs all -- that 3% growth, it's actually a good thing that we can't get anywhere out above 1.5 to 2%. that's a good thing because it keeps interest rates low. there's the s&p up fractionally and the nasdaq. we'll see whether it holds up today or if bad news finally becomes bad news like on friday. let's look at europe quickly. europe at this point is kind of keying off what happened here. greece i don't know what happens. they were supposed to do something by yesterday and another day this week. >> then they said 20th friday and end of the month. >> they don't have the money. >> it hasn't softened their stance. they are still talking tough. >> the germans don't have the nerve to let them leave. i don't think. everybody else is going to want to leave. >> they also don't want to be in a position where they are seen
6:13 am
as getting strong armed by a country that has gone back again and again on promises on payments of its things. if you are set that up you are setting a terrible example for other countries to follow. >> they need a new deal. >> they do need a new deal. their official stance the germans, the eu at this point, they are still saying you have got to agree to what the previously elected greek government agreed to. you got to come back with a deal that's similar to that. i don't know where the middle ground is between those two hard line stances. >> is ka wrist is a career ra on a plane? >> did you seen david irvinestein, he says they will contort it to allow greece to stay in for a couple of years until the next crisis? >> i would still say it is a 95% certainty that they are going to find some deal. i would put it close tore a 50-50. >> did we see asia?
6:14 am
i like your hair today by the way. >> thank you. you are an excellent work husband. >> it's definitely different. >> it's feathered and it's really -- >> it's a little pushed back. >> a little of this thing. >> it's called the swoop. thank you. >> i'm not going to do it in -- people as young as 16 are getting plugs. referencing what happened last week where -- my wig flew off and a lot of people saw. they wondered how i got those earrings so quickly. some people did think, they said oh, my god, it blew off. >> super power. >> some gids -- it was in the journal or post kids getting rows -- >> i believe you but -- >> getting rows of plugs, so they don't have to worry later. >> this is the real news in the morning. >> they don't have to worry. >> preemptive plugs.
6:15 am
>> don't bother yourself with the markets. >> are you going to look for it? >> it's in the front section. >> maybe the post. >> we'll bring it to you. >> i think it's more of a post story than a wall street journal story. in the meantime why don't we talk a little more about the markets. joining us now on the set is michelle gerard peter is a cnbc contributor. >> balding teens find help for 17 grand. >> kids are head cases. >> you guys keep reading that. >> we'll talk about the economic impact of all this. >> go ahead. >> michelle let's talk a little bit about what joe started off. that number that we saw on friday, it wasn't as bad as expected but you still could be looking at 1% i think you pointed out for the first half peter, i think that is a pretty lousy number. >> we've seen how unreliable gdp
6:16 am
as an indicator of how the economy is doing, and the fact that inventories and accounted for so much of the decline. don't get me wrong. it wasn't a great quarter. a lot of things came together beyond the weather that i think weighed on activity. the most important thing is that we've already got evidence that the economy is coming out of it and the data are doing better. we've seen better housing numbers. we even last week saw some better evidence on business spending. all of that is really important and i guess i should say even more than that, we have to remember what do we really need from the economy right now? i mean just to go growing 2, 2 and half% for six years, there's thp idea that we have to somehow accelerate, that we have to zeed 3% plus gdp, in terms are of what we talk about the fed what they need to do. i think that's a little bit off. as long as we're not seeing the
6:17 am
economy sustainably slowing, i'm not sure we need to spend so much time focusing on the gdp data. it's solid. we're looking at a economy that is sustainably growing slightly above its trend pace. >> we're basking in mediocrity here and we keep celebrating that. >> it was shock and awe, we get 2%. we're europe. so let's be happy. let's get a bigger safety net and more entitlements and accept what we are. >> unfortunately. the problem with the fed with this 2% growth rate we may have a forehand on the unemployment rate in the second half of the year. their long-term forecast is 5%. we have core inflation ticking up. the fed is going to be put into a situation they are going to start raising rates.
6:18 am
the unemployment data and the inflation data may force their hand in the context of a mediocre economy. >> i guess that's what i was trying to say. you are exactly right, peter. even at 2, 2.5% that unemployment rate is going to continue to move lower and that's where i was trying to make the point that it isn't like the fed, we have to get 3% growth at this point because even 2% is going to drive that unemployment rate down to a level that i think is going to make the fed uncomfortable with still sitting at zero. they may disagree obwhether rates should be one or two, but i think more and more of the committee feel sitting at zero six years into it is probably not right. >> what happens when they do raise rates? the thought was when the economy would be there and it would take over. is the economy strong enough? >> i don't think this economy is going to be markedly different if we raise rates, i mean to 1% on the funds rate.
6:19 am
there's so much worry and i understand why because the fed has kind of made everybody feel like we have to keep rates low otherwise things will fall apart. when they try to raise rates, everyone is worried things are going to fall apart. i don't think the economy is is that fragile and sensitive to a modest increase in interest rates that everybody seems to be worried about. >> maybe the economy is not but what about the stock market? we've had people from warren buffett to bill gates tell us the reason that prices look okay because of where they are. >> we are an asset dependent economy, just as we were in 2000, in the mid 2000s on housing. while the economy, if you take it in and itself may not respond much, the markets will. and if the markets fall because of that then the economy is going to get impacted because of the construct that the fed has created and asset-priced dependent economy. >> you've been of the opinion for a while that stocks would come down. you point out this could take a
6:20 am
while. stocks could will last at these levels for a couple of years to come. >> valuations are expensive, they can stay expensive. what begins to impact investor sensitivity to those valuations is a change in the earnings story and the interest rates story. earnings story obviously change. we're see potentially flat earning this year. qe is over and you may get a rate hike. the confluence of those events, investors should start to get more sensitive to those valuations. we haven't seen that yet. i thought it would happen a year ago. i've been dead wrong. i think there's a reason why markets are just churning here because some of these things are beginning to become more in focus. >> what's the stupid saying? >> there is no alternative. >> there is no alternative. >> my answer is in a bull measuring there's never an alternative to stocks. >> i understand that. because you are get 3, 3.5% with good stock yielding wait till someone notices 10%.
6:21 am
you either keep your money or you lose 10 or 20% when the alternative comes to losing your principal. there is no alternative, that's pretty quickly when you are like holy look at my account statement. >> when return on investment becomes return on investment. >> we can't raise interest rates because of what it will do to the markets. we see this nervousness when the fed talks about. >> they trying to telegraph that the change is coming and see what happens with markets. they probably feel a little better with a little less volatility. when we come back a big story out of washington this morning. why the nsa can no longer collect americans phone records in bulk first as we head to a break, here's a look back at this day in history.
6:22 am
♪ ♪ ♪ ♪ e financial noise financial noise financial noise financial noise
6:23 am
6:24 am
♪ ♪ ♪
6:25 am
story breaking overnight, the senate failing to extend a controversial nsa surveillance program. john harwood joins us from washington with what this means. i see all over the weekend rand paul was on the cover of every paper. it's weird, john. >> that was the idea. >> yeah i agree. i agree. we got the vaccine comments. we got the republicans created isis comments and then we got this. this guy, this is the problem with getting jerked around in the primary season i think, isn't it? >> got a lot of people running and rand paul is somebody who at various points has seemed to be a potential unorthodox republican candidate, somebody who could appeal to different kinds of voters and he made a big play this weekend for headlines, for attention in letting these authorities lapse. personally, i think it's a -- the kind of move that will
6:26 am
actually make it cement his status as somebody who is very unlikely to win the republican nomination. republicans are much more hawkish than rand paul is and when you take a step that actually causes a legal authority valued by democratic and republican presidents alike to lapse, that is going to be viewed by a lot of republicans as whoa that's playing with fire and keep in mind one thing about this nsa bulk data collection program. it is not, even though it may sound like this when people talk about it as if there is a joe kernen found out there collecting all your phone records many of there's a mass of phone calls have been made and when cases arise that the authorities want to try to figure out connections among different people they can run numbers through it. it is keeping numbers, and what's eventually going to happen which is supported by
6:27 am
democrats and republicans in the house and also the senate -- although paul slowed it down -- is a -- the solution is going to be taking this data and not stopping it from being collected because of course it's collected by the phone companies. they are generating bills, but they are going to house the data somewhere else and then the government, when they need it will come and say let us look at the data as opposed to to government holding the data if somebody wants to look at that as a step forward for civil liberty, more power to them but it's -- the idea is to preserve the program. >> i read i think somebody said that today i can now make a phone call without worrying that someone is listening. you know what? i haven't been thinking about that. i don't feel any differently making phone calls today. i don't know. >> nobody was listening to the phone calls. >> i want to feel happy about that. i want to feel happy, wow, it's a great new day.
6:28 am
i don't. >> isn't the house one that's coming in the house bill that's coming in to take over this the big difference is it's collected at the company level, instead of the government level? >> that it's held at the company level. >> it's always been collected there. >> there's no way for them not to be able to access. it's just an optics game. >> yes. i think there's some hoops the government has to jump through in order to get the data but mostly andrew i think you are right about that. >> i saw an article -- i saw some funny articles over the week number one that bernie sanders was early but all of his municipal ideas are now the status quo, that socialism is good. i also saw an article that says -- >> that's pretty wild. >> i saw that that he's getting some juice in iowa -- >> some of the biggest crowds. >> go for it. so is carly. i don't know. there's to no way. it makes mcgovern looks
6:29 am
centrist. >> he's not going to be nominated but he can put some pressure on her. >> and o'malley great piece in the journal today. take a look at op ed piece. look at wham o'malley did for maryland, maybe he will like to do for the united states. and there are some scary numbers there, john. i don't know if you read the piece. >> i didn't see the piece, but obviously what's happened in baltimore has under scored -- >> i'm not even talking about that. that's got to be kind of a cheap shot. there are things happening in baltimore. that would be like blaming george bush for everything. his surrogate got killed by a republican in the election even though maryland is 2-to-1 it's a blue state. it's 2-to-1 democrats, and the legacy that o'malley left there caused a republican to walk into the governship there. >> his lieutenant governor who was the nominee was not a
6:30 am
particularly strong candidate. >> partly what happened under him and his record. all right. >> sure. >> crazy. what we're seeing here. >> we got lindsey graham jumping into the race today. >> politico has got to write stories. you are going to bernie sanders is gaining in iowa. i saw a piece that said why don't we stop with the reporting, it's going to be bush and clinton. i think that was an opinion piece. >> it is my opinion expectation still that we're going to end up with a bush-clinton race and it's going to be a very competitive race and a very good race, i think with candidates who are substantive are going to have serious lyly good ideas. >> bush hasn't declared yet. >> no. he's exploring. >> thanks for taking the toupee
6:31 am
challenge. >> that was fun. >> they notice it on their pictures on facebook. >> that's because of the selfies. >> i think he should take that challenge. >> john thank you. when we come back this morning, a chip analyst on intel's 17 billion dollar deal talks. sidewalk -- sidewalk sidewalk will bed "squawk box" will be right back.
6:32 am
6:33 am
ah! aflac? aflac! i thought you said this guy was the best? oh, he's a horrible stylist. gah? but he's the best at paying claims fast! really... mmhmm. paid mine in just one day. one day? yea. aaaflaaaac! in just one day, we approve and pay. one day pay, only from aflac.
6:34 am
welcome back to "squawk box" everyone end rick -- enrique iglesias was injured by a drone. he put his hand in the way of
6:35 am
the blades. he continued to perform for 30 minutes with that bloody hand. that's why i don't like drones. >> you should not be trying to grab them while they are flying. >> as we mentioned earlier today, intel expected to announce plans to buy chip designer altera for $17 million. here's the principal at gva rectify. thank you for being here. $54, we talked about how they went back and forth. intel forced their hand on the price. is that a good price, a bad price? >> we've certainly altera stock running up. >> it's still a 56% premium to where the stock was trading at the end of march. >> yes. what you have to look at is probably some of the technological issues that under pin the rationale of this transaction as it moves forward.
6:36 am
we're looking at the intel's chip geeometryies are getting smaller. we're running into situation where the ability to use the chips is becomes limited. >> this is the end of moore's law. >> this is about the ends of limitations. intel did come up with basically 3 d gates as a way to try to limit outcome, gee beyond -- >> now you are talking beyond our -- what's a 3 d chip? >> not to have something not to integrate the chip. >> let's come back out a little bit. >> the bigger issue is you've got altera coming out with chips with field programmable rays which companies like microsoft
6:37 am
are using. >> for bing for example. >> right. intel is making 50% of their profits off of servers and we're running into situation where intel's strategic advantage in terms of their ability to shrink geometries and manufacturing becomes limited because of these power considerations and we've got technology with fpga which altera has which basically can surpass this. >> sthrs a domino effect? >> it has to make moves in this area. buying altera is one of companies they could do it. >> could they do himself? >> yes, they could do it. it's cheaper to go out and buy it. >> who gets bought next? is there a knock-on effect? >> people will look at zieling and one would argue after intel you are looking at perhaps at amd. is amd in a situation to do
6:38 am
that? not necessarily. i would say this is something where you have an advantage for intel going out. yes, we are in a situation right now where valuations in the semiconductor are moving up because of m & a, this is not -- >> you think this is a crazy deal. >> it's a big deal. people will question it whether they are getting a reasonable value for the price they are paying. intel, one would argue limitations to moors law require them to do something. with this transaction, they will make that move. thank you very much. appreciate it. coming up -- trivago. >> he said avago. >> you are an analyst, right? >> analyst, ageist.
6:39 am
>> coming up america is in a retirement process. we hear the warnings daily. ♪ ♪ ♪ ♪ ♪
6:40 am
6:41 am
6:42 am
former banking executive sally is here. she's argues that the retirement savings crisis in america is a woman's issue. valuing females by closing the pay gap. she's owner the elevate network and responsible for the pax
6:43 am
elevate women's global fund. how are you doing? >> i'm doing well. >> we're not supposed to talk about the index, but we should talk about the index. its success or failure over the past year is irrelevant. you think it's a three-year gain for you. >> i think it's a many many year gain really based on the idea that back when i was a research analyst back in the day, there was really no way to say metrics around whether a management team is any good. the one bit of research you see about this is diversity of manage. it's diverse leadership teams that tend to be the most successful. >> how is the index technically doing against the s&p right now? >> it's a bit behind right now. >> so you think -- if it was ahead, you would still tell us not to measure it. >> yeah yeah. look these things are long-term gains and the individuals who are buying this are buying this in part for the performance. everyone should be buying for the performance. up or down a few basis points
6:44 am
any day, but also doing it because they want to direct capital toward companies that live their values that have diverse leadership teams. 77% of professional women tell you they want to invest in companies that have diverse relationship teams. >> what does it take to be included in the index? >> the companies in the index have about a third of their board women at about 25% of their senior leadership team women versus 11% on average globally. >> it doesn't have to be run by a female. >> no no. >> just the diversity. >> no. women ceo, woman cfo. the one that's most important in my personal opinion is having women in the senior leadership team having this person running this business this person running this business because that's where the microdecisions are made that can bring women and people of color, people of all kinds of diversity through an organization. >> when we teed this up we said
6:45 am
you believed that a retirement savings crisis is really a women's crisis. >> you got it. >> what does that mean? >> walk through any nursing home right? who do you see there? they are about 80% women. i had this head slapper several months ago, i said son of a gun if we have a retirement savings crisis in this country, which we do by some estimates a $14 trillion gap it's also a gender crisis. all of solutions we talk about now, in order to solve this gender -- in order to solve the social security crisis are wealth transfers cutting social security. if we were to close the gender pay gap, we close the social security gap by a third. >> because women aren't making enough earlier in their careers to live -- >> throughout their careers. women make 77 to 78 cents to a dollar on a man. women retire with 2/3 the wealth of a man and live six to eight year longs are. if we were to close that gap, keep them economically edge
6:46 am
gauged in the workforce, if women were engage as men as we would grow the economy by 7 to 9% according to goldman sachs and we would close the gap. >> how much is the wage gap versus people leaving the workforce? >> it's both. i don't know if we'll close the whole gap through the economic engagement. it's women don't invest in nearly the same degree as men. we also have an investment gap. women, when i love financial advisers, right, i love financial advisers one place financial advisers can do a better job, when her husband dies first, which he does she leaves their joint financial adviser over the next year 70% of the time. >> and does what? >> and puts the money in the bank. goes to someone else. i actually had lunch a few days ago with someone who runs a wealth management business. told this person the stat. they said that's number not right. i thought you were right. our number is higher. we have a higher percent of
6:47 am
women leaving when the husband passes away. >> it's because the husband is making the decisions beforehand. >> exactly right. because the industry still tends to be very male. your viewership tends to be very male and you've got like talking to like. the male financial adviser engaging with the male client and when he passes away what's this options trading strategy or asset al location i don't know anything about this. i'm gone. >> joe interviewed mika stasenki,y do you do? >> we have an entire cottage industry that's now based on telling women to act like men. you have to. you have to ask for the raise, you have to ask for the promotion. the tougher thing to do is the power of diversity is diversity, the smart companies around this allow women to act like women. allow people to act like
6:48 am
themselves and meet them where they are as opposed to look here's what you have to do in order to be successful here. >> thank you for coming in. >> i want to hear what happens to the index. >> i'm happy to always come back. when we come back this morning, june is the second worst performing month for the dow the last 20 years. stock picks ready to sizzle this summer when "squawk box" comes right back.
6:49 am
6:50 am
6:51 am
6:52 am
this is pretty good. some indexes are, what is it? behind. how do you characterize lousy? you say it's behind. >> underperforming. >> underperforming. not our platinum portfolio. >> outperforming. >> outpacing the s&p 500. the managers are up about 7% year to date. david cats chief investment officer at matrix asset advisors. how are you doing? >> doing okay. we started out pretty nicely. two of the three stocks were up nicely and one is behind but we actually think it is poised to do very well. >> what were the two that did well. >> johnson control had a nice start to the year. a lot more left. well on their way to repositioning the company. the one business that was not
6:53 am
doing well building efficiency has actually turned the corner. we're looking at better things there. >> they make automotive products products. one that has also done nicely -- >> building efficiency. would that business be heard by a drop in oil prices? >> doesn't impact it too much. >> you're not talking about heating the buildings. >> it's heating, air conditioning. lighting systems. >> if it got cheaper, you'd be concerned making it more efficient. >> part of the building construction cycle. how many buildings are going up. >> go ahead. what's the other one. schlumberger. the markets went down 20% after that in terms of oil prices. the stock has done very well. it's up about 10% or 12%. interestingly in a very bad oil market their business is doing fine. they cut costs very nicely. they beat earnings in the last two quarters and we do think oil prices are going higher this year, not going to be an easy
6:54 am
ride, but we think they end the year higher. schlumberger. >> in terms when you say the stocks are up 10%, is that year to date or over the last year? >> year to date and since i think we were on the show. >> oil prices have picked up a little bit since then too. >> now it is up at 60 and the sentiment is still pretty miserable. that usually happs in yly happens in terms of a market bouncing. people don't perceive things have changed very much but the price of the commodity is a lot higher. >> what was the third one? >> qualcomm. >> qualcomm has done poorly. >> always used to do well. >> used to always do well. they had an earnings missed and lower guidance. the good news is janet partners took a very meaningful stake. $2 billion in the company. we think qualcomm has great business great technology and they have not done a very good job controlling costs or returning money to shareholders. really focused on that and we think will force management's hand. we think that is probably of the
6:55 am
three the best place to put new money and we're pretty excited about the rest of the year for qualcomm. >> so you haven't changed anything in your picks. >> no. we like them all, as you know we're longer term investors but poised for a very good 2015. >> overall, why will this be a good year for stocks in that we had such a great run already? >> we thinkets it's going to be an okay year for stocks. generally things are okay and interest rates eventually going up are still very low and earnings are okay and the economy is definitely in a recovery mode and balance sheets are in great shape. so, we think that's a generally good environment. you're seeing deals on a daily and weekly basis and that's corporate america. they think there are opportunities out there and the fact that the buyer's stock are going higher that means wall street is agreeing that that is a way. >> we're back in a recovery after contracting last quarter. we were contracting. >> the economy is in a slow
6:56 am
recovery mode. >> it was in a slow decline last quarter. >> we think that will set the stage for a better -- >> that's why it helps so much to do everything quarterly. i think we should evaluate everything quarterly. marriages. look at that. look at your kids whether you like them or not. look at your house. should i stay in this place? >> or take a longer term of everything. >> maybe take a longerterm view. >> right. you do. okay. all right. >> thank you. of course, you can check out david's picks on cnbc pro. this morning's top stories including a multibillion dollar deal and a senate show down and big drug movers. stay tuned for that and a lot more. "squawk" returns in just a moment. we're live from the heart of midtown manhattan. college students drop out. but how can you spot who's at risk? the one who lives far from campus? the one who works the night shift? the one with new responsibilities? one thing can't tell you, but the right combination can.
6:57 am
universities are using ibm analytics to understand pressures in and out of the classroom- some expect to cut dropout rates by twenty-five percent. ibm analytics is working to make education smarter every day. when a moment spontaneously turns romantic why pause to take a pill? and why stop what you're doing to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction
6:58 am
stop taking cialis and get medical help right away. ask your doctor about cialis for daily use. insurance coverage has expanded nationally and you may now be covered. contact your health plan for the latest information.
6:59 am
7:00 am
breaking overnight. the senate fails to extend a controversial nsa program. prohibited from collecting americans' phone records in bulk. we'll talk to the coo of roche pharmaceuticals about promising new cancer treatments. >> my name is frank taylor. i would like to cash this check here and then i'd like to take you out for a steak dinner. >> oh! >> frank famously portrayed by leonardo dicaprio in "catch me if you can." the second hour of "squawk box" begins right now. >> announcer: live from the beating heart of business, new york city, this is "squawk box."
7:01 am
first in business worldwide i'm joe kernen along with becky quick and andrew ross sorkin. u.s. equity futures had been registering a bounce from a session that you would have to call sort of more the same on friday. up last week. up down, up down, up down. and we end somewhere around 18,000, which we've been talking about. one bad day and we're down for the year. and that's the way it's been so far and it's going to be june soon. you know what i mean. >> june today. >> june today today is the day. >> i knew that. my dad's birthday, actually. he's listening, happy birthday dad. anyway we will see whether that holds up and gets better or worse. so much to think about. and we're going to talk to a pretty smart guy in a minute. let's get through this. we'll get you through some of the top stories at this hour. here's what's happening. breaking overnight. the nsa is pulling the plug on
7:02 am
some of its intelligence gathering. the senate missed a key deadline key portions of the patriot act passed after 9/11. an extension was blocked by senator rand paul and among the tools now banned the government's collection and search of phone records, roving wiretaps and permits to track lone wolf terror suspects. the senate is expected to pass the usa freedom act, a bill that reauthorizes some of the spry provisions, but may be a day or two until that bill makes it to the president's desk. also new this morning. a hack attack on japan's pension system. the names, identification numbers, birth dates and addresses of more than a million people were leaked. the official in charge of the pension system says the data was accessed through an external e-mail virus. also corporate news this morning, intel now close to a deal to buy smaller chipmaker altera and that's about $17 billion in total and we understand the official word could come today. there you have it. on this week's watch list.
7:03 am
the european central bank holds its june policy meeting on wednesday. forecasters say that the ecb is aunlikely to announce any new policy moves, but will be listening for clues about the effectiveness of the bond buying program that started back in march. we're also watching oil prices this morning. opec holding a key meeting on friday. the group is not expected to cut production from a current 2 1/2 year high. and it is jobs week. we'll be getting adp private payroll data on wednesday and then the latest government employment numbers comes up on friday. first, the first trading day of june. what is hot and not so far in 2015 is our resident stock stack guy, dominique chu. dom, you can probably see prompter. but, knowing stats makes you cool. and you are cool. >> good morning to you, becky and gang. thank you very much. i appreciate that. let's talk about this because we're almost at the halfway point for the year. so far we're seeing some of the same themes come up this year as
7:04 am
we saw come up last year as well. the reason why, maybe the broader markets overall, not so much. but look at the broad market indices. that will give you an idea of volatility we've seen and how flat we are for the most part. as you acan see here the dow jones industrial average year to date after all the swings, up a little over a percent. so we're still up. but not so much. s&p 500, a little over 2%. maybe 2 4. and then the nasdaq up about 7%. we know how much biotech and those semi conductors and the chip stocks have been part of that story here. if you take a look at just the sectors that have been doing really well. just like last year health care continues to be a juggernaut in terms of performance. it's up about 9% so far this year to date. remember just in the last month, one of the best performing stocks human aa on speculation there.
7:05 am
utility down about 6% here. you can see the rate worries as interest rates are perceived to rise later on down the line that takes aaway some of the allure of these stocks. in terms of overall stock, year to date, the winners and losers. one that has been a huge move higher here. netflix shares up 83%. netflix shareholders seeing gains this year. as for the worst performer michael kors on the luxury end for fashion, maybe not so much. again, guys a lot of these stock stories are deal driven. remember in the month of march, a big performer and a lot of the chip names could do well. we'll see how that works out as we head into the summer months. back over to you guys. >> we'll see you in a little bit. >> i think he has a pocket protector under that jacket. he's a geek. >> he is not. >> he's a stock stat geek. >> you're an mt scientist. >> i'm a geek? >> stop calling the kettle. >> i want to be a geek. the cool kids peak in high school. you know them. you know the ones i'm talking about what they're doing now. nothing. the euro tumbled overnight
7:06 am
as greece missed the self-imposed sunday deadline to unlock aid keeping in line fears of a debt default and a potential exit from the euro zone and we'll talk about greece in just a second. sorry. he is the founder and executive chairman of oracle partners. i want to talk to you. 1%. up 1% for the year stuff, you're a little worried in the stock market potentially. i stopped asking people at the beginning of the year these analysts what they expected because they all said i single digits. they all said high single digits like it's our birth right. i finally gave up because they all can't be right. we're at 1% right now. you are worried a correction in earnest might be something that happens, maybe sooner rather than later. >> when you look at that data of 1% on the dow jones industrial index and 2% and 7% on the nasdaq and so forth and you juxtapose that against how we've
7:07 am
done 2013 2014 and all the way back to march 2009 the ultimate bottom. these numbers for 2015 to date are not bad. historically speaking given how strong the market has been over the last few years. i don't think those are bad numbers. >> look at the fed. this is the best we can do even with the fed. >> which is why you worry that the next major move is a traditional correction. i'm not here to say that i know that's true. >> i know that. but you're not old. but you're wise. you're not old, but you're wise. you've been doing this a long time. plus you're in the business. you know exactly what's going on in your business and when you get things are so good right now. you said it is a sixth seventh, eighth inning phenomenon in yours. >> some anomalies. my favorite one is that private market valuations. >> that's andrew's hot button. and that's always dozen happen
7:08 am
very often. it's usually a sign of choppiness and then of course merger volume itself is also a sign. merger volume is extremely strong, as you guys are reporting. >> but inquestion isthe question is are we in 2005 or 2007? oftentime physical you oftentimes if you look at m&a it extended itself for several years. >> that's the unknowable element. we might all sit here and say the next broad move will be down, not up. we can't know when and the genius of great investors is having an intuitive sense of timing. i don't have that. and i don't think, by the way, we're at 2007 because 2007 we were on the brink of a cliff. i don't think we have the types of broad, bubble-like behavior that we saw then. i just think we're overdo for what you would call a traditional correction. remember traditional correction is 10% down from the peak and at
7:09 am
some point we could go through the whole year without it. we could go into next year without it. >> is that a month or two interruption if you will. meaning we pull back and come back or do you think there's something larger and bigger going on? >> if i knew that the three of us would have breakfast on my gigantic yacht. i don't know the answer to that. >> whoa. you can't afford a yacht, atman. >> he doesn't have the yacht, but if he wanted the yacht, he could have the yacht. >> you could have two yachts. >> nevertheless, the i don't know the answer to that question. >> not denying that. >> roger, do you mind if i just -- >> no please. >> a report from brookings today expected around 9:30 and it's going to say that this whole idea that the fed has broadened the ineequality gap is a false theory. they're going to say if you look at assets let's say stocks that have risen x% and then home
7:10 am
prices which have risen x plus 5% and that shows this was a progressive move for the fed to be doing these things. i think they're crazy and your math is wrong. your assets go up 10% and you are a lot wealthier than the person who is worth $100,000 whose assets went up 15%. seems to me that just based on logic, the wealthy people are the ones with the assets and assets have all been inflated by what the fed has done to this point. i know their intention was to lift all votes and they probably have by doing that and i think it has also acerbated the wealth gap. >> i would agree with you because the fed had no alternative at the beginning of all of this and fundamentally targeted and i thought rather openly that the level of stock prices, in particular, the level of home values and, of course those who own, you know larger homes and those who own stocks of course, will benefit the most. they have no alternative because
7:11 am
it was trying to reverse the wealth effect. >> it made sense in the beginning when they were doing it. to say it did not contribute to the inequality gap in this country is crazy. >> i aagree with you. i think the larger forces on inequality are technology and globalization and they are fastly more powfast ly ly vastly more powerful than what the fed may have done to contribute to inequality. those are powerful forces and very hard to combat from a policy point of view. i agree with you, becky. i don't think the economy itself is as poor as you know some of the people even this morning have talked about. yes, the first quarter was pretty bad. minus 0.7. but this quarter should be 2.5% plus. the rest of the year in that same zone. labor markets are getting steadily stronger. maybe more slowly than we like and wages are finally beginning to come up. housing is finally beginning to improve with household formation rates finally beginning to move
7:12 am
a little bit. we are still dealing with head winds from 2008. they have not completely ebaited. that'sone reason we can't get to the economy at a higher level. two years is not a terrible asu scenario given the way the rest of the world has done. >> for greece that's how we introed you. are you going to say anything that will surprise me other than they'll find a way to do this because it's in both of their interests? >> the only thing that i might have a little different view on is that i think they can take longer than the conventional wisdom. this can go to the very end of july between technical points on grace periods and how long it takes the imf to declare default and this can go right until the end of july. >> you would be absolutely shocked if they both said we're walking away. we're going to let the chips fall where they may. if germany and greece both
7:13 am
signed it. >> that wouldn't shock me two or three times between now. >> temporarily you think events. >> if ultimately this broke apart, yes, i would be shocked. the forces are each side have to do it. it will drag out longer than anybody would like and get settled on the courthouse steps. two months or so from now. >> roger, totally off subject. we have no time left. have you ever defended dr. oz to anyone publicly? >> i don't think i've ever been asked about it publicly. he's a friend of mine. >> he did some surgery for you. >> he did my heart transplant. >> you specifically asked for him to do your heart transplant and watch people hammer the guy, have you ever thought -- they basically say he's not even a real doctor. i think back that roger specifically asked for him to do the most important thing that ever happened in your life and he did it beautifully. >> this was how long ago? >> 2002. >> he's not some fly by night
7:14 am
guy who got on tv. >> i have a soft spot for mehmet oj. jrx oz. he doesn't practice as much as he did, but he was a world class cardiac surgeon. >> people don't know that about you and i thought it would be interesting about him, as well. thank you for being forthcoming with me roger. >> no more comments about boats. i promise. >> you don't care about oz. >> how many yachts can you have at one time? >> in your g7 or whatever it is. coming up the latest on the fight against cancer. the coo of roche p hadharm will join us. much of the sector pulled back. the ceo of matador energy will join us at 7:30 eastern time. plus we'll talk fraud with
7:15 am
a con man who got away with it for years before becoming a consultant for the government. frank abagnale will join us on the set. ♪ ♪ ♪ (charge music) you wouldn't hire an organist without hearing them first. charge! so why would you invest without checking brokercheck? check your broker with brokercheck.
7:16 am
7:17 am
7:18 am
nice shot of the white house there. welcome back to "squawk box." making headlines this morning, stifel professional to acquire bar clay's. the brokerage arm of lehman brothers. no word on price at this point and no word on what bob dimon may think about this. that annual conference is under way in chicago today and our megterrell joins us now with a very special guest. and it's early. good morning, meg. >> good morning, joe. we're joined now by roche ceo. >> great to be here again with you. another strong year for roche we're presenting on 20 of our medicines and i'm particularly encouraged about lung cancer. the most common and deadly form of cancer and two breakthrough medicines we're presenting for lung cancer. >> so much coming out about lung cancer and tell us how roche is
7:19 am
the largest company. >> i mean we have more than 20 immune therapies on medicines that we're testing in patients. and we're really encouraged by what we're seeing. what we're seeing actually is some really good, long sustained responses for immune therapy. it's an antipdl 1 product. what we showed here today is that you can actually get sustained responses, particularly if you use a biomarker in around 40% of patients. and what we're really focused on at roche is medicine. determining what patients may benefit from one and one of oour strengths is combining those medicines to get responses in a larger number of patients. >> we have to ask you about price because you probably saw the "wall street journal" front page story. sloan-kettering made a huge splash talking about the price of newer immuno therapies. how are you looking at the price of these? >> this is really important,
7:20 am
meg. as i said before we're seeing about two out of ten patients generally responding to immune otherapies and lung cancer. when we use a biomarker we can get that up to four out of ten. some of the early data we presented on our immuno therapies shows we might be able to get six out of seven patients responding when we combine our medicines. it's going to be very important that we look at how do we make sure we continue to have access of our medicines to patients. we do a number of things. of course, we take them into account when we price our medicines that our medicines are only good if they can get in the hands of patients. last year alone, we helped more than 200,000 patients here in the u.s. access our genetics medicines that may have been underinsured or a lower insurance and in some cases giving the medicines away for free to those patients. >> the biomarkers in some ways could potentially help you limit, help the health care system limit the cost because you're identifying which patients and narrowing then who gets them?
7:21 am
>> that's right. i mean what we're seeing is we only want to treat the patients that can actually benefit from our medicines. you know lung cancer is not one disease. it's many diseases. each lung cancer patient has a unique fingerprint and that can determine which will be helpful and which won't in those patients. one of the collaborations that we announced earlier this year is with a company called foundation medicine, which particularly focused on finding what those fingerprints are and two medicines with lung cancer here and immune therapy that we spoke about and another medicine for patients with a particular type of mutation and we see that more half the patients in this trial actually responded and their tumors shrank when we could identify a particular mutation mutation. >> joe, you had a question? >> not a real question. just a comment on what i thought were very thought provoking remarks that you already aalluded to, meg. i would never want a drug company to be anything even close to a utility.
7:22 am
but, when i look at what you just said. if you have a great drug that can't get to the patients that need it because of price, then what was the point in the first place? it's almost like out of all the industries there's almost a duty to society maybe to not use purely market pricing. or if you do use market pricing, you need to make it truly a free market. let medicare negotiator or give someone the equipment to exert some pricing pressure on it. and i would never say that about most industries. but these are, these are people that need the drug. it can't, you can't price society out of being able to provide it if it's like $20 billion to provide it for everyone that needs it. it's a real quandary mr. o'day. i wonder how the industry finally responds to it. >> i think you make a very good point. the first thing that we do is with precision medicine and personalized medicine we make
7:23 am
sure we keep the bar very high in terms of the effect our medicine has on patients. we're presenting data here that shows in skin cancer that if you use two of our medicines that same time disease that just several years aago only had a life expectancy that could be measured in months. we now see that 60% of our patients are alive in two years. the real important aspect of this whole issue on value is to keep the bar very high and beyond that to your point we take into account a variety of factors as you mention. what other medicines are available and what is the price to make sure that we can get our medicine to patients and country by country we look at programs because every country's health care system is different on how to make sure we get our medicines to patients. it's absolutely fundamental to what we do. >> mr. o'day, what do you make of xpress scripts move that they want to make sure that they are pricing these drugs and maybe only providing them for cancer patients where they know it's
7:24 am
going to work. i know this is just a thought at this point. it's just being put out there. but what do you say to some of these big pharmacy ben fits' managers who are pushing back on the prices? >> so there are many stakeholders that are involved obviously, in the discussions about how we price our medicines and how we get our medicines to patients. health care systems, governments, doctors, patients they're all very very important. and, again, back to the point. we believe, in fact all of our cancer programs in our experimental phase have a personalized health care aapproach. have a precision medicine aapproach. and as the leading company with both the pharma and diagnostics, we are focused on that. whenever we can identify patients that are more likely to respond or won't have the side effects that they won't need to have an effective treatment, that's really what we're working on. and, so, we welcome those
7:25 am
conversations. and when we keep the value high i think we have very good conversations along those lines. >> and we're almost out of time. one last question just about the competitive landscape because merck and bristol myers are on the market with their immuno therapies but some say the use of biomarkers may put you in the lead in the end. is that how you see it? >> we presented some data here at the conference that suggest when you use biomarkers you can increase from two out of ten to four or five out of ten the likelihood of patients responding. and we have a very broad immune therapy program. our lead product, we have now the largest program in lung cancer which is the most common and deadly form of cancer. but we also have very strong programs in bladder cancer which hasn't seen anything new for 30 years and also in breast cancer and renal cancer. so we feel with 20 medicines in aapproach, we look forward to bringing those medicines to patients as soon as possible. >> dan o'day.
7:26 am
thank you for joining us. >> thank you, meg. very, very good it's a good problem to have. i mean melanoma. you hear that. two years, 60%. that used to be if it was advanced, it was like start getting your aaffairs suffairs in order or lung cancer. we have to work out. like they say, as time passes the price containment hopefully will it will happen through market and it will happen and continue to find out exactly who ben fits it andefits it and everything else. but i never thought i would say that about an industry that you know, you don't want to regulate it like a utility. but it's almost it almost has a different -- it has a different responsibility to society. but then again, they have to be reimbursed for all the research that goes into years and years and years of putting money out. >> and the tests and trials along the way. meg will be back at 8:40
7:27 am
a.m. eastern with the ceo of astrazeneca. that's a rare interview and a lot of the same issues we'll discuss. live only on cnbc. still to come more of this morning's top stories. a tribute to the late betsy palmer. you may not recognize her name but her work probably terrified you at one point. we'll be right back with more.
7:28 am
40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors that were just totally pitch black. those things had to change. we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit.
7:29 am
people can see better when they're out doing their tasks, young people are moving back in town the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.
7:30 am
welcome back to "squawk box," everyone. among the stories front and center this morning, the senate failing to extend a controversial nsa surveillance program. that means that starting today the agency can no longer collect americans' phone records in bulk. presidential hopeful fulful fulful rand paul block a two-week extension some of patriot act provisions that were backed by the senate majority leader mitch mcconnell. secretary of state john kerry canceling his european tour after breaking his leg in a bicycle crash in france. he will be heading back to boston and is expected to make a full recovery. an outpouring of support for the biden family this morning. the vice president's oldest son, beau biden died on saturday after two years of a diagnosis of brain cancer.
7:31 am
the iraq war vet served two terms and once planned to run for governor. and betsy palmer. you may not know the name but betsy palmer died friday at the age of 88. she was best known for jason's mother in the original "friday the 13th." in fact she was the person that did all the slashing and killing. she was the person. it wassen her son, actually. she only took the role. she was famous. she was in all kinds of movies. she only took the role to pay for a car, she said. also in that movie and you know anyone else in that movie, sorkin? >> tell me. >> you don't need six degrees of separation to find kevin bacon. he was in that movie. he was in that movie. kevin bacon. this was two years after he was chip dylan in "animal house" and a couple years before
7:32 am
"footloose." you don't need six degrees of separation. >> i've seen that movie probably 15 times. >> "footloose"? >> no "friday the 13th." ? >> i saw the original one. >> they did a remake. you know in adjusted dollars, almost a billion dollars. >> just the first from all 15. >> all of them. which were all made for nugging. you used to go to camp bravely. >> they showed that at camp. >> your husband went to the camp where it was filmed. >> it was in jersey. >> i was what they call a super senior. i was old -- >> that's a terrible thing to show kids at camp. like showing "jaws" when you go to the beach. >> and then you sell paul rand and -- >> two first names are confusing. >> always. >> john kerry or is it kerry john? >> saw a guy yesterday michael
7:33 am
george which made me think george michael. >> you change it when you have two first names. coming up the ceo of matador resources. it's up 67% in the last six months while the s&p energy index is down nearly 3%. founder and ceo george forum joins us after a quick break. (vo) me? i don't just wait for a moment. i watch for the perfect moment. the one nobody else sees. and when i find it- i go for it. (announcer) at scottrade, we share your passion for trading. that's why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so you're always connected, wherever you are. because at scottrade, our passion is to power yours. seven out of ten power outages in the us are caused by weather.
7:34 am
but utilities can now predict where the power will go out, within a few city blocks. working with ibm they're combining micro weather forecasts with detailed data from local sensors. to predict where outages are likely to occur. and send crews exactly where they're needed, when they're needed. ibm analytics from the internet of things is making energy smarter every day. e financial noise financial noise financial noise financial noise
7:35 am
7:36 am
welcome back everybody. we are honing in on energy our high-power trading block this morning. crude prices surging reporting that energy firms pulled another 13 rigs from the united states oil fields marking the biggest rig count drop in a month. joining us now on set is joe, chairman, founder and ceo of matador resources. he's in town for rbc's energy conference. shares of his company, by the way, have been soaring.
7:37 am
up almost 40% this year and up 10% over the last 12 months. joe, i want to thank you for being here. >> thank you. it's a delight to be here. >> that is an anomaly. an energy company with basin rigs and property holdings that's actually seen its stock go up over the last 12 months. what happened? why are you unique in this? >> well, thank you. not exactly sure. we've been around for a long time. we have good properties good people. but when you've been around as we have every five or six years you'll have a downturn in prices. you just need to be ready for that particularly with a strong balance sheet. if you have that strong balance sheet, then you can keep going and there's some deals available to you that would not be in more robust times. >> you made a deal was it earlier this year or late last year? >> earlier this year with a long-time producer into mexico. it's a family group and he realized he had some good
7:38 am
properties. but didn't have the access to the capital that a public company would. we've been friends a long time and we decided to join together and it's worked out very well. >> let's talk about what has been happening with oil prices. after falling precipitously, they have been inching higher again. crude oil back at $60. what does that mean in terms of what you will do with rig count yourself and with trying to get back to those places? >> well becky, we'll continue to try to be cautious in what we do because i think there's a feeling that the worst is behind us on prices. but it isn't going to be up and up and up. it will be up down, up down because the news is somewhat mixed. and in doing so what you are really aiming for is the efficiencies and drilling and completion that are sustainable by drilling the wells faster and fracking them better. using the latest gas lift technologies and producing them.
7:39 am
those are sustainable. now, we're enjoying some price cuts, which takes a lot of the sting out of prices. because about every $2 cost reduction is about the equivalent of a $1 increase in the price of oil. >> when you say you're enjoying some cost improvements some cost reductions. that's in terms of what you have to put in to your costs, i'm sure. >> excess capacity in rigs and fracs and all kinds of services. they're discounted much like an airplane does its tickets to try to get people or a hotel to fill back to acapacity. so as that happens, we've seen prices come down 30% to 40%. >> wow. >> in many instances and that's made it much more to drill. your returns have shrunk a little bit. but most companies have really
7:40 am
improved improved our cost. our break even point in 2013 was $43 a barrel. this year in 2015 it will be less than that. probably in the mid to upper 30s. >> wow. okay. so those efficiencies. some of those are efficiencyies in technology and improvement and some of them as you mentioned, the cost structure actually compressing. if prices come back up and more demand. how much of that do you hold on to and how much do you lose? >> right now it looks like it's about half and half. so, you have about 20% that you're gaining in drilling in the wells faster. better bits for example. better rigs you know. 7,500 horsepower rigs. and those make a big difference particularly in horizontal drilling. so, those are couple of the examples that are going to be sustainable and will continue on. >> so, is it fair to think that okay, perhaps the worst is behind in terms of crude oil prices from your perspective because you're looking for a better dollar figure that you
7:41 am
get. perhaps the low prices are behind us. but this doesn't mean that we're going back to $100 oil. whennia get to 60 and $65 it makes a lot of sense and people put the rigs back up. >> that's right. it's not going back to 100, but i think the trend is back towards 70 to 80. maybe that's where the stabilization point will be. >> and you think we get to 70 to 80 when? if you had to put a bet on it. >> that's a hard one, given one of the big unknowns is, of course, the political risk involved in the middle east. >> will we still be alive? >> i think we will be, joe. the political risk is real. and that's hard to predict. what's going to happen mideast, russia. but as far as the industry itself, demand is continuing to grow. this is -- >> you know all these things. it still went down 50% and we're good at making and there's a
7:42 am
piece in here. we know how to turn it on and turn it off. we're getting better and better at horizontal drilling and there's a lot down there. >> the laws of supply and demand work. i agree with you completely. if you let them go the demand is continuing to increase. >> good for everyone but you. don't worry. it doesn't have to go back to 80. it's good for everyone but you. can't you be a big person and just let it happen? >> yeah. well, we're trying to be good. we're trying to be good at we're happy that everybody is enjoying this break. we think it's good for the economy. we're patriots. and -- >> okay. >> but i think that you'll see it stabilize somewhere where it's good for both sides. >> joe, thank you very much for joining us today. we really appreciate you coming in and we'd love to see you, again. >> thank you very much. thank you. we will invite you back before it's at 80. that might be a while. >> all right. >> whatever you say.
7:43 am
>> i don't know e. we'll see how long it takes. >> a programming note for you folks at home too. putting the power in power lunch. live at the rbc the ceos of several big names in the sector. watch it all starting at 1:00 p.m. eastern time. when we return for years frank abagnale eluded the fbi while he committed check fraud and posed, as among other things a doctor and airline pilot. the man famously played by leonardo decap rio joins us next. talk cybersecurity and irs fraud, when we return.
7:44 am
7:45 am
you wouldn't order szechuan without checking the spice level. it really opens the passages. waiter. water. so why would you invest without checking brokercheck? check your broker with brokercheck.
7:46 am
>> the truth is i'm a doctor, not a lawyer. airline pilot. i'm nothing, really. >> that was releonard eo decap rio's portrayal of our next guest "catch me if you can" frank abagnale famous for formging checkformg forging checks. he worked for the fbi for 40 years and now says for those impacted by the irs security breach, this is just the tip of an identity theft iceberg. good morning to you, frank.
7:47 am
>> good morning. pleasure to be on the show. >> thank you for joining us. help us just try to understand this. the irs says this has affected 100,000 people, but i gather you think it's actually going to impact many more. >> well i think it's going to impact a great deal more. but, also you have to realize that if i've got a transcript of your tax return, not only had i already had your social security number and date of birth and information to get that transcript, but now nat i have your transcript i have your wife's social security and your children who you claim as dependents and your earnings and all the other information i received off that copy of that complete filing of your taxes. >> so with all that data in hand, walk us through the risks. what do you think we're going to start to see happen if that's the case? what we constantly hear about breaches and we hear about small frauds that relate to individuals and we haven't heard about sort of mass scale millions of people being
7:48 am
defrauded all at the same time where you wake up in the morning and your bank account is zero. >> you know doing this for 40 years. when you deal with corporate fraud, you're dealing in the millions. when you deal with government fraud against the u.s. government, you're dealing in the billions. $5.8 billion in phony tax returns last year. $100 billion in fraud against medicare. i mean, these are billions and billions of dollars. a criminal knows this is where the money is. you go to the government to steal the money. when we see these breaches occur and information and data is stolen criminals warehouse that information. if you take a credit card or a debit card information, you have to get rid of that information very quickly. has a very short shelf life. if i steal your name social security number date of birth, you can't change your name or social security number or change your date of birth. the longer i hold it the more valuable it has. so, some of this information that we see now being used to get state income tax returns and get federal tax returns are actually information stolen from breaches that occurred two or
7:49 am
three years ago. and now we're just starting to see that surface. so they're always going to hold that information because the longer they hold it, the more valuable it becomes when they go to use it. i think what's most frustrating to me is in corporate america if you have a problem, you solve the problem and you fix it. and in the u.s. government you have a problem, there's technology to fix it. and nobody goes out and fixes it. and if you can just save a few billion dollars. that's billions of dollars that goes back to feeding the needy and building streets and schools, et cetera. >> frank as a former com man yourself help us save billions of and save ourselves. what are we on an individual level supposed to do? credit monitoring services trying to sell packages to protect us. would that help? what are we supposed to be doing on an individual level? >> i never ask people to do any more than i do myself. that's number one. of course i do use a shredder. i use a microcut shredder which
7:50 am
is a cledshredder that turns paper into confetti that you cannot put back together. i use a credit monitoring service. it notifies me in real fm if someone is attempting me to use my identity. i don't write a lot of checks any more because if i write a check in the drugstore, i have to give the clerk the check and on the check is my name and address and phone number and my signature on the signature card on the bank and then the clerk has written down my driver's license and my date of birth. i am only going to get an aimage age image of the check. anyone that sees it goes into my bank account. you wrote that check out of a private banking account where you might have a great deal of funds in that account. finally, i never use debit cards. i only use credit cards. visa mastercard, american express. this way if someone does get my account number steals my account number and charges a million dollars on my account,
7:51 am
by federal law, my liability is zero. i have no liability. every day i use a credit card and spend their nony my money sits in a money market account and gains interest. i don't have to worry about exposing my number. if someone gets my number i'm not libel. the safest form of payment is a credit card. by simply using a credit card you take away a great deal of the financial risk that individuals have every day. >> that's great advice frank. i'm guessing that not a lot of people are nearly as careful as that. and i just wonder i mean the latest breach at the fbi or at the irs seriously concerned me. i don't know what you can even do or what recourse these people have at this point once this has happened. what would you recommend to someone who find out they were one of the 100,000 who lost all of that information? >> well i think you have to notify, of course the irs so that they assign you a number so that in the future when you do
7:52 am
apply for your taxes, that you have to have that security number. >> the pin number. >> or the pin that they have given you. >> they have been reluctant in the past. >> the irs has been reluctant in the past to hand those out to anyone and everyone who asked. >> they need to do it. this is what i mean. they are not being very proactive. a lot of things that occur, we have technology that existed that we use at the state government that just for example in indiana saved $22 million in fraudulent returns last year. so there is the technology out there from companies like lexus, nexus and other companies that can authenticate the person who is filing for those returns. and knowing who that person is on the other end that is filing for that return. so f we use it in private industries and banks and retailing and corporations and state government i don't understand why the federal government is not using that type of technology. >> a little ridiculous when you think of how the government is cracking down on these
7:53 am
companies that have been breached but not minding its own house. >> if you don't do anything about fraud, then, obviously, you end up being a victim. >> frank, leonardo decap rio wishes he looked like you. wishes. even a little bit. half as good as you. >> thank you. >> you're both very handsome men. thanks, frank. when we come back this morning, wealer have a look at some of the big movers of the day. stocks to watch ahead of the opening bell. that's right after this. plus we'll tell you what these guys you're going to see in a moment. we'll tell you what these guys are doing, too. stick around. "squawk box" will be right back.
7:54 am
you wouldn't take medicine without checking the side effects. hey honey. huh. the good news is my hypertension is gone. so why would you invest without checking brokercheck? check your broker with brokercheck. ♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve.
7:55 am
get an auto insurance quote and see why 92% of our members plan to stay for life.
7:56 am
one of the stocks we're watching ahead of the opening bell disney. baron suggesting the stock could climb 50% over the next three years. the company's ability to generate profit from its businesses including movies, merchandise and pike zarks. we showed you this video before the break. the antual shin kicking championship held in england. sometimes it happens on the set here as well. competitors grapple and kick each other's legs until one contestant falls over. >> that sounds like the worst contest ever. can you wear chin guards? this year champion adam miller said he planned to dull the pain with a few extra drinks that pub. this is i know what happens
7:57 am
under the desk here sometimes, but this is taking it to a whole other level. they spelled shin -- >> they're protecting their shins. >> all right. coming up a supreme court ruling this month could wipe out health insurance for millions of people covered by obama care. we'll be talking about this as we get closer to that decision. we'll tell you what to expect when the decision comes down. shall we dine? [ chuckle ] you wouldn't expect an insurance company to show you their rates and their competitors' rates but that's precisely what we do. going up! nope, coming down. and if you switch to progressive today you could save an average of over 500 bucks. stop it. so call me today at the number below. or is it above? dismount! oh, and he sticks the landing!
7:58 am
can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is can your business deliver?
7:59 am
you are looking at two airplane fuel gauges. can you spot the difference? no? you can't see that? alright, let's take a look. the one on the right just used 1% less fuel than the one on the left. now, to an airline a 1% difference could save enough fuel to power hundreds of flights around the world. hey, look at that. pyramids. so you see, two things that are exactly the same have never been more different. ge software. get connected. get insights. get optimized.
8:00 am
a cnbc exclusive this morning. astrozen cupromises to talk about the war on cancer. stock is on the move this morning and the ceo is here to react. economic stimulus from obama care? how a key supreme court ruling expected this month could be an economic boom. an effect to affect your wallet is just moments away. one woman's trash is another man's treasure. almost ending up in the dump instead, it sold for big bucks. that story and more as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york. this is "squawk box."
8:01 am
welcome back to "squawk box" here on cnbc. first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. most of the session rebounding a little bit and now much better. up 93 points or so. we were up 10 and then up 19 and now we're up 92. that would get back 0.75 a little bit more than we lost on friday. see if europe has turned around as well. it was kind of doing what we did on friday responding to that and it has. except for greece which has its own fundamentals. obviously, affecting what happens to the stock market and now all across europe the averages are at least green to start the week. let's get you caught up with some of the stories that investors will be talking about this morning. the world's biggest cancer research meeting is under way in chicago. data from thousands of studies presented there and in the last hour we heard from the chief
8:02 am
operating officer of roche. the company gave positive news including data on cancer treatment. >> what we are focused on is precision medicine and what patients may benefit from one immuno therapy medicine and one of our strengths is combining those medicines to get responses in larger number of patients. >> take a look at shares of roche right now. that stock up 11% this morning. later this hour we'll hear from the ceo of astrazeneca. in other corporate news intel is close to a deal to buy altera for about 54 cents a share or $17 billion in total. official word could come today. and in global news greece's prime minister is slamming in an op-ed missed a self-imposed deadline to unlock aid. we asked roger altman about a risk in the last hour. >> if ultimately this broke apart, yes, i would be shocked. the forces are such, each side
8:03 am
has to do it. ultimately they will do it and it will drag out longer than anybody would like. get settled on the courthouse steps, so to speak. which is longer off than people think. two months from now. as we mentioned greece's self-imposed deadline was yesterday. that deadline included at one point wednesday and then friday. roger pointed out this really could go towards the end of july before you are really in a push situation. check out the euro right now. you will see euro dollar at $109.32. >> you may have read about this. a protest is planned at facebook headquarters today. native americans, drag queens activists and others are planning to speak out against the social media company's real name policy. facebook requires users to create accounts using their given name and let others report those allegedly made with fake names. facebook says that it's been working with groups on how to better implement its rules and that according to g.l.a.d. is an acceptable usage of the term.
8:04 am
>> yeah, i think the problem becomes is how, if you don't have to provide your real name how do you prevent trolling and situations of fake accounts that are out there. >> i would argue that facebook has been as successful as it has, you can't use a fake name. so many people on twitter used the fake names. >> we want to argue a lot. you start a lot of sentences with, i would argue. you constantly want to argue, which puts me in a position where i don't want to argue any more. >> you don't want to argue any more. >> really you finally broke -- >> yes. let's tell you about a couple stocks on the move this morning. citigroup upgraded from buy to hold at goldminean sa a number of key concerns uris ounding surrounded citi. apple filing for a yen-based offering in 2020 with minimum denominations of 100 million yen. the total size of possible
8:05 am
offering was not disclosed. new this morning, the national security agency can no longer collect americans' phone records in bulk. the senate failing to extend the highly controversial program late last night. instead, started to consider the usa freedom act that was already passed by the house last month. now that bill transfers the authority to collect both telephone data from the government to telecom companies where it's originally collected. also republican presidential candidate rand paul, he moved to delay that final vote on the bill that angered some fellow republicans who walked out as paul stood to speak. >> all right. the supreme court, i want to see him walking out. but i guess we're not quite there. the supreme court issued 30 major rulings this month, including one on obama care that could have a major impact on jobs and the economy. a recent study conducted by the american action forum shows if the court rules to undo a key part of obama care it could mean 237,000 new jobs was more
8:06 am
than a million workers reentering the workforce. joining us to handicap the court's thinking and the implications of a potential repeal are dr. scott gotling. we wouldn't have even said a physician, i don't think there. you have a totally -- >> i still have -- >> you're not a recovering md are you? >> i still have it. >> not in a 12-step program. vitap patel. >> she's a doctor too. two doctors. >> we got all that straight. scott, let me start with you. what i asked you off camera. i read this report or at least parts of it and one of the things that didn't immediately make sense to me was that out of the 11 million newly insured, they say most were people that had insurance and had to get new insurance under the law and then i didn't understand how the
8:07 am
insured rate in the u.s. could have fallen from whatever it is 18% to 12% or whatever i've seen. is it real -- how many net coverage is there? >> a lot of different analyses. the one that i think is the best is the report goldman sachs put out two weeks ago which says about 3 million new net commercial insured people. those who have commercial insurance. obama care churned from their existing private coverage into obama care. the insurance rate has fallen in part because a lot of people have been put on to medicaid. so most of the newly insured -- >> there you go. right. >> they also change the way they calculate on insured. this goes back three years ago and the census bureau calculated and that is also boosting the statistics. they talk about illegals who don't have insurance. when we talk about the number of americans who are uninsured. we don't include them any more when we talk about it. >> any idea what we're talking
8:08 am
about there? how many points would that add? >> i haven't gone back to try to recalculate it. hard to look at the trends because i think that goldman analysis is worth looking at and other studies, including one by rand but that was based on a survey. a lot of people pointing to that. that shows slightly bigger increase in the commercial insured. >> do you have different data dr. patel? >> the rand data is also difficult but it's around 5 million if you look at some of the range. $3 million to $5 million. so that's an accurate portrayal. >> i'll ask you both i don't know whether anyone can handicap one person because we're really are we talking about one supreme court justice and he asked some questions. i think kennedy asked some questions one way and he asked some questions the other way. is it even worthwhile trying to project how it is going to happen. let's just for argument's sake dr. patel, let's say that they
8:09 am
do decide to rule on the letter of the law that you're not allowed to have these exchanges or that the federal government is not allowed to provide the subsidies. what do you think will happen? >> so we're seeing what is already happening. there is already some gop proposals to try to extend temporarily extend the subsidy subsidies. this is likely to get us to basically a 2016 eelection so that we can do something. i mean remember despite the american action forum statistics, we're going to have millions of people who would not get health coverage especially in key states like florida and wisconsin where there are big battleground races to be had. there are already proposals on both sides and what the democrats really want is to clarify the law, which can be done in changing and tweaking just a couple of words and you can bet that the gop is going to try to have some alternative proposals and this is going to put president obama kind of in between to declare either a veto
8:10 am
in one situation or try to work with congress in another. >> right. i think the administration can put out a regulation that basically redefines what it means to be an established exchange. they never clarified that in regulation. the court is unlikely to speak to that. they can make it very easy for the states to set up a quote/unquote state exchange and defaulting to healthcare.gov. the administration does that which i think they will. that will put a lot of pressure on red state governors to go along. easy for them to comply to get the subsidies. what the republicans should do is then attach through legislation certain market-based reforms to obama care to that new definition that would revert back to the states and extend some of the waivers that the president has granted. >> the republicans would be able to pass that through both chambers. >> good question. the proposal there's a proposal in the senate by ron johnson that does some of this that is getting a lot of traction in the senate. it's unclear what could pass the
8:11 am
house right now. >> now, i mean keep in mind though, i mean this is very if this does happen it's it could be a lose/lose for both sides. if you actually temporarily extend likejohnson's proposal argues you can create market shifts by extending current subsidyies but not allowing for new people to enroll. the stability on the market will rely on some sense of future enrollment. scott's right that we could have some enrollment where the administration has through regulation some possibilities. but if i was any member of congress, i would want to see some stability through a congressional active proposal. remember, this is what brought the case forward in the first place was what was written into law and how congress interpreted it. that's what everybody is kind of reading between the tea leaves of what the justices would think. >> the republicans just let it go and says the individual
8:12 am
mandate that comes no longer enforceable. >> if the subsidies go away the mandate goes away and the employer mandate goes away. you're not forced into the affordable care act. it already destroyed the market and ended a lot of small group plans. a lot of consumers would have no alternative. >> really it would leave people -- >> you're getting all the pain of obama care and the subsidies that let you go and buy the overpriced plans. no offense. but they are overpriced plans in the exchanges and you get the subsidies. if i had to drop something into a model, i would say 70/30 in favor of the administration. that is a lot more risk. >> in the court. >> that is a lot more risk. >> they said they had no plan. but they put in what you just said to do with the exchanges. they won't admit they have a plan. >> take about one evening to draft that on two pieces of
8:13 am
paper. wouldn't be a big regulation. >> it's working. >> anyway kavita, dr. patel, thank you. one final quick thought, though. >> the only the only thing is that we're already seeing states trying to sort through, even states that have put in their own exchanges are trying to sort through how they can kind of help other states. so i agree with scott that there's already some solutions in the background. >> right. >> okay, good. >> thank you, guys. when we come back staggering new numbers from the auto loan industry. a look at how much people are paying a month and what it says about the state of the economy. take a look at what's coming up later in the program including stock picks from platinum portfolio member scott black. "squawk box" returns in just a moment. (trader vo) i search. i research. i dig. and dig some more. because, for me, the challenge of the search... is almost as exciting as the thrill of the find.
8:14 am
(announcer) at scottrade, we share your passion for trading. that's why we rebuilt scottrade elite from the ground up - including a proprietary momentum indicator that makes researching sectors and industries even easier. because at scottrade our passion is to power yours. when you're not confident you have complete visibility into your business, it can quickly become the only thing you think about. that's where at&t can help. with innovative solutions that connect machines and people... to keep your internet of things in-sync, in real-time. leaving you free to focus on what matters most.
8:15 am
my name is marcus jenkins. i'm a lineman here in oakland. day in, day out, a large part of what we do is about providing reliable power to our customers. pg&e is dedicated to the community. i love working here because this is my home. oakland is my home. this is where i'm raising my children so it's important to me to make sure my family and friends have the power and energy that we provide. this is very personal to me. it makes me work a lot harder knowing that this is my community.
8:16 am
together, we're building a better california. welcome back to "squawk box," everyone. on this monday morning, it looks like the futures, at least at this point have picked up pretty substantially. dow futures are now up by about 92 points. s&p futures are up by 7.5. these futures were looking relatively flat earlier this morning. nasdaq is up by about 27. part of this may be because of
8:17 am
rumors floating around about a potential greek deal. this is something we will believe when we actually see it. but, again futures have picked up substantially since the beginning of the morning. in our headlines today, blackberry agreeing to settle with the ryan seacrest company that makes the keyboard attachment for the iphone. terms were not disclosed. >> that has been going on for quite a while. they were fined for violating, i for violating an original agreement and now we'll see. what do you think they paid for that? >> it's been a couple years. >> did you get it? >> i got it. >> you didn't use it? >> i stuck with the blackberry. i just like the way i could type on it. it's a good product. new data showing americans are taking out auto loans to buy cars and trucks are paying $500 a month. joining us right now to take us inside the numbers is our own phil lebeau. phil, good morning. >> good morning, becky. these are record numbers
8:18 am
reported by expeerian for the first quarter of this year. we'll run down the record numbers and keep in mind a lot of this because the price of vehicles continues to move higher and therefore the loans being taken out in order to finance that purchase they're higher. the average loan now up more than $1,000 compared to the first quarter of last year. almost a third of all new vehicles financed were leased in the first quarter. that's a record. and the average length for a loan now stretches out to five years and seven months. and when you take a look at the loans and how they're stretched out. look at the popularity of loans for that six to seven-year period. new car loans are at least 73 months long and that's why we're seeing people move towards that or one reason we're seeing people move towards that they want to keep their monthly payment as low as possible. still, the average monthly payment for a new car loan is up to a record of $488 a month. why is leasing growing in
8:19 am
popularity? look at the average lease payment it's almost $100 cheaper. $405 a month. it went down year over year. you look at shares of some of the auto dealer stocks. keep in mind we'll get may auto sales tomorrow and the expectation is that we will see a very robust sales rate of between 17.3 and 17.4 million. guys, the bottom line is this we're no where close to seeing the end of this cycle where people are looking for more vehicle and larger loans. expect this trend to continue through the rest of this year. >> phil lebeau thank you. >> talking about automobiles and talk about tesla and big article in "l.a. times" about the massive subsidy on elan musk's empire. >> i like 9.4. >> i like 9.4 better. >> between tesla and solar city and spacex. $4.9 billion in government.
8:20 am
do you support his efforts? >> no. >> no? >> i don't. >> okay. >> figure i would ask the question. >> do you? >> the government takes -- i do support it. >> actually, i am supporting it. am i happy about it? no. >> the military has often created. talk about internet. these things happen. >> you know what drove the internet? >> al gore. >> no. what? >> cue the music -- >> i'm slow. >> everything i start i'm going to start messing with you. >> tell me the joke in advance so i can try to get it. coming up one woman's electronic trash turning out to be a piece of tech history worth very big bucks. we'll tell you about it when we return. the san francisco skyline is forever changing. we'll take a look at the newest and tallest building residential building west of chicago. check out shares of the futures right now before we head to that break.
8:21 am
you're look at some green arrows. dow looks like it opens 83 points higher. squawk returns in just a moment.
8:22 am
8:23 am
welcome back to "squawk box," everyone. a woman who dropped off a couple boxes of old junk at a recycling center. she handed him one of 200 apple one computers. the silicon valley based
8:24 am
recycling sold it at a private auction for $200,000. now, it's looking for the woman to give her half of the proceeds. in other technology industry news, chipmaker and video says it expects cloud computing revenue to hit $1 billion in the next two to three years. the main driver big data analysis which is raising demand for graphics chips. still to come, how much money did americans bring home in the month of april? we'll find out after the break. and then president of delfy management scott black will join us. we'll get his stock picks just ahead. right now as we head to a break, look at the u.s. equity futures. the dow futures up by 88 points and s&p futures up by 7 and nasdaq up by 26. things have picked up considerably since the beginning of the morning. stick around, "squawk box" will be right back.
8:25 am
verizon say neversettle. t-mobile agrees. never settle for verizon's overpriced gimmicks. try the un-carrier risk-free for 14 days you'll love it, or we'll pay for you to go back. ♪
8:26 am
♪ call 1-800-royal caribbean or your travel agent today.
8:27 am
amupg this morning's big market story is greece. reuters reporting a funding for reform package with greece or denying a market rumor that a deal could be announced this afternoon. again, this is one of these situations where a lot of people talking their books.
8:28 am
a lot of noise coming out from both the creditors and the dwreek greeks on this side. take a look at the futures right now. stock market futures have been higher after some of these rumors started hitting the wires. you can see the dow futures up right now by 87 and up by 18 points when we started the morning at 6:00 a.m. eastern time. s&p futures up right now up by more than 6.5 and nasdaq close up to 27. in europe most of the major averages there are doing fairly well. the cac up by 0.7% and the ftse flat in london and the greece composite down by 1.4%. but this is par for the course over what we've seen over the last many weeks and months. and i think yields are a little lower, too, in europe. on this week's watch list. european central bank holds its june policy meeting on wednesday. forecasters say that the ecb is a unlikely to announce new policy news and watching for
8:29 am
clues about the effectiveness of the bond buying program that started in march and we're watching oil prices this morning. opec holds a key meeting and the group not expected to cut prodaukzpro production from a current and then the latest government employment numbers on friday. and we are now just seconds away from the april personal income and spending report. we have the ten-year note. take a quick look right there. you have 2.127 is the number and our good friend rick santelli is standing by at the sme in chicago. rick still have about 30 seconds before the numbers. maybe you want to give us a little preview. >> i think income and spending is a very key component. of course, many of our fed officials would like us to spend more. that's what makes the economy go round. but you can't spend what you don't have. income and wages have been one of the backbone issues that we just can't seem to make any progress in terms of impacting
8:30 am
productivity has been soft. growth has been soft. it's really not a surprise. now, we're looking for a number that's close 0.3. if you recall last time goose egg on income although last time spending was up. here we go. income up 0.4. better than what we were looking for. and spending a goose egg, which was exactly what we saw on income last month, which remains unrevised. the spending side actually gets a revision. the up 0.4 was revised up 0.5. let's be clear. income up 0.4 and spending up zero. now, let's look at the personal court expenditure pce deflater year over year. that's up zero. if you sorry up 0.1. that's the core is up 0.1. if we look at month over month, the core is also up. these numbers are about as expected on pricing. not a big move in interest
8:31 am
rates. the big story continues to be ten-year note yields are below where they settled last year at .2at 217. dow futures up 76. we still have construction spending and ism manufacturing yet to come. and, of course, many look to manufacturing for better clues because supposedly seizeinalities are impacting our better view of first quarter gdp. i will tell you some national resemable resemble chicago you want to pay attention to the inventories that we haven't been able to widdle through to bring them down to the point to search again. back to you. >> thank you, rick. in the meantime, bring in steve liesman who has more on those numbers. i just heard you say wow. what are you wowing? >> the pc price index was unchanged and looked to be up 0.2. >> whoa!
8:32 am
say that again! say that again! please. the pce -- >> monday i was playing a great gig on saturday night on the beach. >> welcome to monday morning. >> now i'm here on the "squawk box" set on mandonday morning. >> the intel deal. we'll go back to that in a minute. >> that might be worth a little while. >> the might come up consumption unchanged. the savings rate up to 5.6, again. cue the whoa. where is your leaf blower when you need it? i could use one. what's unclear to me is whether or not this is going to change the outlook for growth in the second quarter because it looked like you had an upgrade to spending in the previous month. up 0.5 if i'm not mistaken here. yeah, it was up 0.5 and then unchanged. i think it's about even.
8:33 am
>> we'll just tell you what is going on here. what we thought is $54 per share. an all-cash transaction valued at approximately $16.7 billion. you're looking here. let me tell you what the ceo of intel is saying. expand core assets into complimentary market assets and with this acquisition we'll harvest power. the other acquisition to make the next generation solutions better, but able to do more. the company saying that the transaction expected to be a creed to intel's nongap eps in the first year after the close. >> after the close. >> after the close. i'm looking here. to fund the acquisition and expected the transaction to close within six to nine months. and they say that's going to happen with a combination of cash from the balance sheet and debt. the company, i think, has something like $12 billion on their balance sheet right now. >> no equal way there is any problems with this. right? >> in terms of anti-trust? >> yes.
8:34 am
>> i want to say doubtful. not in a comcast/timewarner cable way. >> take a look at shares of altera. they're halted right now but got to 51.20. that stock closed at $48.85 on friday because expectations that something like this could come as early as today. >> even more meaningful it's up i think about 56%. that price is a 56% premium to where the news first emerged back in late march that the companies had been in talks. of course, those talks fell apart after altera said you know, give them the heisman. talk to the hand and then the investor said, you people are crazy. take $54 and run like the wind. now, they're running like the wind this morning. so here we have a deal that we're talking about for quite a while. >> this is the question of who would buy zilinx. he talked about adm as a possible acquirer and other
8:35 am
chipmakers that could look -- >> who? >> adid i say adm. >> if you want to sell some corn or other vegetables. amd has a $1.7 billion market. so they're not buying. they could buy, maybe they can buy lattice. >> reverse pac-man. >> i like that. anyway i'm sorry mr. liesman. >> love means having to never say i'm sorry. >> did you have any other wow things to blow us away? >> if i just ignored joe, does he go away? >> no. >> he just stays right there. >> stays right there. >> i would like to inform viewers, if you wouldn't mind about the week ahead when it comes to amazing economic data. there's going to be an incredible number of wows. the ism manufacturing cue. nice. and then we have construction data today. that is going to feed into gdp.
8:36 am
tomorrow factory orders as well as vehicle sales and, again, we're all about this issue. is the second quarter going to show a rebound from that weak first quarter? adp on wednesday looking for for .208 and trade another factor in gop along with the services report from ism and the beige book and friday is the big day. i'm skipping over jobless claims on thursday. payrolls 220. >> i have to come up with something new. >> that's another wow thing. that's another wow thing. >> how do you top the symbol formally known as prince. >> they have prince. what about the pyramid pink floyd. >> out to 100 number. >> by the way, you were both like right on the number. >> i was right on the number. i have another one i'm thinking about for friday. another something i'm thinking about. >> guys, this was incredibly enjoyable. i'm glad i got to come by. >> we're so glad you're here. >> good morning.
8:37 am
>> it was fun. >> well, it's all i got, joe. it's all i got right now. have a great day. thank you, becky. up next platinum portfolio member scott black of delphi management joins us with some new stock ideas. >> stock ideas? >> for your portfolio. that's enough. don't overdo it mr. economist. and then the ceo of astrazeneca will talk to us about the company's promising lung cancer drug. "squawk box" will be right back. what if there were only one kind of dog? then it would be easy to know everything about that one breed. but in fact, there are over three hundred breeds of dogs. because no one can be an expert in every one... an app powered by ibm watson will help vets tap specialized knowledge in the cloud for every breed... and whatever else walks, flies or slithers through the door. ibm watson is working to make medicine smarter every day.
8:38 am
hey, what are you doing? you said you were going to find out about plenti, the new rewards program. i did. in fact, i'm earning plenti points right now. but you're not doing anything right now. lily? he's right. sign up, and you could earn plenti points just for being a wireless customer. in the meantime, i just kick back and watch the points roll in. where did you get those noodles? at&t cafeteria. you mean the break room... at&t - the only wireless carrier to be a part of plenti now when you add a new phone line to your wireless plan you get 5,000 plenti points to use in lots of places.
8:39 am
♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.
8:40 am
tracy morgan speaking out this morning in his very first interview since the car crash last june that left him critically injured. he suffered broken bones and terms of the settlement were undisclosed. the comedian talking to matt lauer on "today" show about his settlement with walmart. >> bones heal, but the loss of my friend will never heal because we've known each uth arlong time. i'm happy that walmart stepped up to the plate in a tremendous way. and they took full responsibility, as you said. it's true they took full responsibility and i'm happy that they looked out for jimmy's family because i know my friend can rest in peace now because they took responsibility for that. in the beginning it was a misunderstanding, but that got square away and they came
8:41 am
through in a clutch. >> morgan's lawyer detailing a planned meeting with walmart. >> the ceo of walmart, doug mcmillan reached out to me and tracy and i are going to be speaking to him personally this week because they want to say they're sorry. he wants to say sorry to tracy directly and i think an apologize and see that he is okay. >> thank you. >> i thought that was a huge gesture. >> walmart has called that settlement amicable. sad situation. great interview on it. >> at least a better ending. >> better ending than where things were even just a couple months ago. we should talk a little more about the recent weak economic data. raising concerns for our next guest. scott black is the president of delphi management and also one of our top ten portfolio managers. and he joins us right now with his view of the markets. the economy, plus his stock picks for the second quarter and, scott, it is great to see
8:42 am
you, thank you for being here this morning. >> thank you for inviting me becky. >> so scott, first of all, let's talk about your concerns with the economy and what that might potentially mean for the stock market. we know gdp was pretty lousy for the first quarter. where do you think banks stand in the second quarter? do we bounce back and are valuations at fair levels given what you think is happening? >> i'm not a macro economist, but i looked at the conference board numbers over the weekend and looks like the economy is poised for 2.2% real gdp growth in the second quarter, but if you look at the s&p for the overall market and $116 worth of earnings it's an 18.2 multiple. if you look at the russell 2000 and 2,500. they're up at 22.5 and 27 times respectively. o so in any case, the u.s. stock markets are pretty
8:43 am
expensive. >> does that make you pull back or because you're looking at this from the bottom's up you feel okay about it. but you're worried what other investors might get in to. >> while it gets increasingly difficult to find deep value, 6,500 u.s. equities and we're still able to find little companies and some mid-cap that still fit the kind of criteria we use. but there is no question that the market as a whole is pretty expensive. but the other caveat is interest rates are so low and very few alternatives i wouldn't be surprised that there is enough liquidity to drive markets up for the rest of the year. >> let's talk about what you like and what you don't like. out with the old and in with the new when it comes to one of your pick. taking customers bank corps out and replacing it with super micro. why? >> because they had a nice move. we bought it in last fall and about 17. it's over 25. earn 205 to 210 and roughly a
8:44 am
12.5 p/e and not much multiple expansion. they're doing an excellent job. they're controlling their growth now at about 10% rate and 3-1 reserve against nonperformers. very good. strictly on valuation. but the company we're replacing it with has more dynamics and that's super micro. a little company that is intel-based service on a specialty bases. for high-end harvard and research kinds of operations. 1.85 billion market cap. if you look at the past few quarters, the revenues have been growing over 20% year over year. and we think they'll continue to grow at 20%. the stocks should do for june of next year about 255 in earnings. up from 217. the stock is 33 here. there's about $1.27 in cash. and we also net out stock-based comp is 14 cents a share. and you get the magic number of a 13 p/e for 20% grower.
8:45 am
just not many 20% on the 13. >> let's talk about the stocks you're sticking with. first up is activist. that pharmaceutical company it looks like it is at this point trading near its 52-week high but you still like it. >> i do. i think next year they'll do $21.5. i mean, they've done very well in integrating and they'll take out over a billion dollar in cost and next year free cash flow of $6 billion. based on next year's earnings 14 p/e and the following year 2017 they promised a minimum 25 in earnings per share. the company is no longer a generics company. over 50% of the mix is branded and paul has done an excellent job of growing it from a little company which is called watson pharmaceutical into a real giant, which is about $115 billion market cap. they just got approval on fda last week. for irritable bowel syndrome.
8:46 am
40 mdas. >> scott, thank you so much for joining us today. we'll tell everybody very quickly folks, if you want to find out more about it go online to cnbc.com/pro to read their exclusive analysis. but, again, scott, thank you. we'll see you again soon. when we come back this morning, astrazeneca on the move after the drugmaker presented positive data on its lung cancer drug. the company's ceo will join us. "squawk box" live from new york. stick around, we'll be right back. ♪ ♪ [ radio chatter ] ♪ ♪ [ male announcer ] andrew. rita. sandy. ♪ ♪ meet chris jackie joe. minor damage or major disaster,
8:47 am
when you need us most, we're there. state farm. we're a force of nature, too. ♪ ♪
8:48 am
8:49 am
the american society of clinical psychology is gathering in chicago today. let's get back tattooo meg and she joins us with another special guest. meg? >> thanks joe. we're joined by pascal soriot. thank you. >> thank you. >> the idea that amino therapies using the word cure for cancer. >> the prospect is exciting
8:50 am
because what you'd want to do here is allow your immune system to kill those cancer the cancer cells. you could turn it into a -- and even cure patients. we are at the beginning of a long journey of develop ago combination selfproducts that will turn the immune system against the cancer. we're going to see the treatment the cancer completely transformed over the next 5 to 10 years. >> people say we're in the early days. they do say astrazeneca may be bur but the combination therapy could put you down the front down the row. >> it's quite possible we would be the front-runner very soon. what is also exciting is the speed at which technologies evolve. five years ago -- which is for -- and not many thought it
8:51 am
would have a big impact. people realized the potential of this product, but it's already on the decline. we saw in and we are even moving to combination with melanoma and the same is happening in lung cancer. we took the bet a few years ago that combination was the way to go and we could be the front-runner with combination regimens. we're hearded buzzword financial toxicity really the focus on the price of these drugs. is it possible you would even lower the price of the drugs that would independently be more expensive so together they don't overburden the health care systems. >> the -- to treat people with cancer. the more options we bring to patients and more tumor types we
8:52 am
can treat, now we're talking about the combinations so i think as an industry we need to come up with solutions to address this issue, come up with regimens that are even more effectic and can cure patients. if you turn cancer into a clingic condition, you become cost-effective, or look at pricing for the treatment of a tumor type. so instead of selling your 1, 2, 3 vials of products with actually the charge for the treatment or the -- lung cancer and come up with a price that is sustainable. >> regardless of how many drugs are in combination. joe, do you have a question? >> i do. maybe a bit too in the weeds maybe, pascal about you for a while immunotherapy consisted of designing an antibody against a certain type of cancer. has there been a switch to where it almost appears that you're trying to unmask cancer cells
8:53 am
that used to fool the immune system and let the normal immune system take on what is then seen as non-self? that seems like a powerful tool that could make a big difference. >> yeah it's a very, very point you're making. for many years we all worked on developing so-called targeted therapies, that we are targeting the cancer cell trying to kill it. that was effective, but it cannot be as effective as unleashing your immune system to go after the cancer cells. so there's a variety of way toss do this. the cancer cells are very smart and they try to hide. some of those products are removing the ability of the cancer cell to hide from the immune system. all of the products are stimulating the so-called t-cells, the lymphocytes that go after the cancer cells, sos there's a variety of ways to
8:54 am
help the immune system become active against those cells. >> instead of something as specific as a b-cell an antibody directed at only a specific thing, to ramp up the whole immune system to go against, you know an -- how many different ways do different cancers mask that they're cancerous? do we have to do it for every type of cancer? >> it actually looks like different treatments may be needed, depending on the cancer types, and so you know there's a lot of work that is happening today to better understand that. as i said we are at the beginning of a journey, and it's -- this journey will end up with a series of combinations of products that will all probably be different depending on whether you go after -- today we haven't unfortunately found products that -- colorectal
8:55 am
cancer from immunotherapy viewpoint, but i'm hoping it will come. >> pascal thank you so much for joining us. back over to you. meg, thank you. when we come back this morning, a look at the tallest residential building west of chicago, with some of the highest home prices in the san francisco area. but first comments judd hitting the wires from boston fed president rossengran arguing that a weak economy makes the case for patience in monetary policy. futures still looking like the dow is up 80 s&p just up over six. "squawk box" will be right back.
8:56 am
e financial noise financial noise financial noise financial noise seems like we've hit a road block. that reminds me... anyone have occasional constipation, diarrhea... ...gas, bloating? yes! one phillips' colon health probiotic cap each day helps defend against occasional digestive issues. with three types of good bacteria. live the regular life. phillips'.
8:57 am
♪ ♪ ♪ (singing) you wouldn't haul a load without checking your clearance. so why would you invest without checking brokercheck? check your broker with brokercheck.
8:58 am
cnbc gets a look at the tall necessariest tallest building. >> reporter: what you're sigh behind me is the start of what's going to be a historic building here in san francisco that's going to change the skyline here dramatically. the top 17 floors of this 70-story tower will be luxury residences, where some of the highest price tags in the city. we're told these condos will go
8:59 am
for north of $8 million a pop. the penthouse hasn't officially been listed. potential buyers including foreign investors, and of course the tech-heavyweights in silicon valley, what if the bubble bursts. the sales firm isn't worried. >> we won't have much inventory right through the decade. 3.5% unemployment. we've created more jobs than 47 states, so there's continued growth. this is where people really want to live. >> it remains to be seen what demand will be line and how residents feel about the tower. we're told units do go on sale this fall. guys back to you. >> okay. thank you for that. we should say -- i think he just
9:00 am
said this -- a beautiful place. by the way this is happening all over the city. >> the big one here not quite as big as $100 million. >> but also the big shadow that it casts over central park. make sure you join us tomorrow. "squawk on the street" begins right now. good monday morning. welcome to "squawk on the street." i'm here with sarahizen, david faber, kramer is off today. we kick off the month of june with a flurry of news a $17 billion buyout? tech. a lot of rumors about a greek deal. futures in the green for now. oil set to have a very busy week as well opec meeting this week journal saying its clout is at

138 Views

info Stream Only

Uploaded by TV Archive on