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tv   Squawk on the Street  CNBC  May 27, 2016 9:00am-11:01am EDT

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that. so, you know, stay tuned in terms of broadcasting. stay tuned in terms of small regional banks. a lot more love making -- >> who's going to buy all the spectrum on monday? -- or tuesday rather. >> well, the spectrum on monday is being auctioned off -- the broadcasters have a reverse auction. and they're all buyers. >> have a great weekend. >> you too. enjoy nashville -- knoxville. >> that's it for us. make sure you join us on tuesday. it's time for "squawk on the street." ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. ahead of a long weekend, we are watching a pretty steady premarket. yellen's speech this afternoon. pretty solid revision to q-1 gdp as well, a mixed picture in europe, oil settling back after crossing 50 as you know earlier this week. we are going to start with gdp revision to 0.8 from 0.5 as for
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stocks the dow and s&p are on pace for their best week since march. we're going to close out the month on tuesday. we're going to start talking about how to play this in june ahead of brexit and the fed, how to play it in a summer where stocks have alternated up and down for six years. >> but at the same time we have groups that have come alive. this tech rally is very real. it is broad based. it's chips. it's software. it's high growth. it's cloud. the bank rally is in its infancy. as we get closer to a rate hike, which i think we will get given the fact that these fed heads of carpet bombed us with the two to three, that bank group can get stronger. net interest margin will go higher. it's very undervalued and i think it works. so right now -- and i'm not saying i'm sanguine because if we get a really weak employment number that's bad. because they'll tighten into a weak employment number, but i like it. we're not focused on china as much. oil's reached a level where we don't have to worry about banks
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going under, they won't take them under. 50 is okay. oil companies can sell futures. i hesitate to be as buoyant as i am, but i'm buoyant. >> i saw a good poll yesterday on twitter 2051 or 2151? >> oh, i like it. >> it's a tough one to call as we meander in these high 2,000s. >> we are meandering but every once in a while something happens and turns your head. ulta. >> what about it? still key to this market? >> yes. >> really? >> today, yes. biggest i've seen on comparable 15%. i only mention it because you are just getting some stores that are doing great. big lots, dollar tree, i don't know if you were on that dollar tree conference call yesterday, it was monster. it was a monster conference call. i'm saying that the consumer's alive and well just not shopping where we used to. they take advantage -- they're frugal. frugal. so i'm okay.
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i'm okay with a rate hike because bob toll blessed it in that conference call. said it would be good for housing. >> housing numbers we got -- >> housing numbers were great. that matters to me. >> do we keep going? >> yes. does bob toll it does, does he know more about housing than i do? yes, he's the dean of housing. >> big lots and ulta with a beat and a raise. deckers beats gamestop and palo alto -- >> gamestop was -- i keep waiting, let's put it this way, i'm early on gamestop. it's kind of a groupon like situation, not that good. palo alto disappointed, talked about seasonality, macro woes, talked about slowdown -- of course they didn't put it that way but slowdown in orders. the thing i would point out about palo alto is i wonder was not on the conference call is
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everyone already in? this was a green field place for cyber security. nobody had it. now it seems like, well -- speaking of someone, they talked about taking a couple orders from some other guys, but it seems like the pie is filled out and now it's just take your share. and when you talk about the price of oil and your cyber security conference call, maybe later than you think in terms of the land grab, later. >> what's going to be later than i think? >> we're further along in the cycle of companies that have -- that are concern about cyber security. remember when they weren't? and now everybody is. so it's very hard to like -- now you're starting to take share from others. >> sure. >> one of the things that bothered me they talk about taking big contracts from other companies. no, i don't want to hear that. i want to hear it's so green field you don't have to worry about taking contracts from other companies, because that's -- when you're doing a share taking, you're doing it -- >> market has come a long way in a short time then. given the unpreparedness of so much of corporate america for so
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long against -- >> well, ford net would tell you that, palo alto would tell you that, but i got to tell you the body language of the call -- now, mark is fabulous. he's a great ceo. but the fact was if you listen to the analysts on that call, there was a lot of trying to get and figure out why things are slowing. and that matters tremendously. versus the ulta call. guys, here it is. are you ready? >> i'm ready. >> congratulations -- ten. >> from analysts. >> hof -- >> congratulations on the quarter. >> additional color on x, y, z. >> you tell me how you can possibly handle the demand. and you know why it is. >> you sometimes congratulate too though. >> oh, yeah, i'm ridiculous. it's this. okay. people cannot leave home without going and having some makeup on.
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look at the resolution of this thing. do you think that you can go out -- do you know i had the makeup ladies -- if i just go out for like a cocktail, i don't take my makeup off anymore because you know what's going to happen. david, you've been out with me. we went to the polo -- >> club. >> lounge, club, zebra. >> the mascara, i think, is not necessary. >> no, i needed this. david, i needed this. >> no, you didn't. >> david, i don't use botox. >> i know. neither do i but brent saunders would like both of us to start. >> when he does that -- he doesn't close that deal with teva we're all going to have to use botox to make the quarter. >> there's no reason to believe that deal won't close. >> what did you hear something? >> no. i know they continue to say it will close. >> by end of may, mid may, june, end of june, which does not close first, mr. jeopardy? do it in the form of a question. >> yes. >> dow dupont -- come on,
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celebrity. >> that's good. >> you never know when jeopardy's going to pop up on the show, carl. >> we've been talking about it a lot this morning. >> well, because that guy is really running the table. >> yes, he is. >> have you seen that? >>ive heard about it. i haven't checked in on jeopardy in a little while. by the way speaking of checking in, i want to check in with our friends at viacom this morning because this could be a momentous day in viacom's history. i mention that because something i reported earlier this week which is either more let's call it, well, maybe even more likely though we don't really know which is that the board of directors of viacom today could get notice at some point that it's been replaced. and that's somewhat shocking in and of itself. >> what? >> see. you weren't paying attention then you were. >> true.
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i was texti ining my wife. >> this goes to a report i had earlier this week, board members i've spoken with and others expect that at least there's the possibility that sumner redstone, the controlling shareholder of course of viacom, could change the composition of the board of directors. that would be done perhaps by calling a meeting of the shareholders of which he and his daughter shari represent 80%, given their 100% ownership of national amusements which controls 80% of viacom, and were that to take place they could immediately throw out the board including of course chairman and ceo philippe dauman. this would follow the changes that took place roughly a week ago in the trust that oversees that ownership position in national amusements that would take over when mr. sumner -- when mr. redstone passes away or is deemed yes competent, but that is not the case as of now.
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in fact, right now sumner at least to the extent you believe he's rational and competent has been doing a number of different things. and, again, there is an expectation on the part of some board members that at least the possibility exists, and report on this earlier this week that they're going to be gone. if you were going to do it, you'd do it on friday before memorial day. you'd do it in a quiet news cycle. >> in the times you've been reporting on this, david, it has gone from possibility maybe, massachusetts court, whatever, to like sianara? >> if in fact this happens the board of directors is immediately prepared to petition court in delaware, which is where it's incorporated under section 225, the statute in delaware, which essentially says we want you to immediately hear us on what we believe is a, you know, having been replaced as directors in a not proper fashion, in an improper fashion,
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essentially saying there appears to be wrongdoing in how they remove directors. so they will immediately go to delaware. but it does, when you step back, put into stark belief how tumultuous right now it is for viacom and the people running that company in terms of their relationship with their controlling shareholders. >> so in between when this is happening, isn't that when you strike and make a bid? when it's in total disarray? >> who's going to make a bid? >> there's assets. >> who? who wants to buy viacom? >> no one, huh? >> i don't know. nickelodeon, we know selling stake in paramount continues and they may put something up in the next few weeks, philippe dauman told us by the end of june with a chinese buyer with some stake that gives effect to large valuation to paramount above
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what people anticipated. but to your point it's not clear there's a buyer for all of viacom, and i believe shari redstone's approach is to try from her viewpoint to restore its luster. >> okay, thank you, because that's what i'm getting at. i think there are a lot of people feel this is a very undermanaged company and they could do a better job. and that's what i'm saying. i'm not saying there's, wow, i can't wait to get in. i would say this company has been dramatically undermanaged and the management has enriched themselves to a level that i find fascinating. >> from someone who is an experienced content generator, or someone who wants to be, ie apple? >> i'll tell you the apple stuff they can't put a steak in it. it keeps coming up and i don't believe any of it. i think viacom in many ways is a property. if they want -- >> i know. i really believe -- listen, this is not like this story hasn't been around for what i'm talking about -- >> for life. >> but there might be buyers for different parts of it. but i do not believe there's a
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buyer for the entire company. >> okay. >> so when you are shari redstone through her father right now and by the way there are many who believe he's not competent, that's a picture that shows more or less -- i know but that goes specifically to the story we're talking about. okay. which is going to reinvolve around his competence. fred solarno who i spoke to earlier this morning, the director at viacom continues to try to see mr. redstone trying to get in there saying i'm the lead director of this company i want to talk to our controlling shareholder. he was originally supposed to see him on the 16th, fred told me. he wrote this letter that went out the other day saying i've been trying to schedule a meeting with him for almost a month. certainly concerned. a lot to talk about. and all he's gotten back is letters and correspondence from this new lawyer that's shown up. i don't know who he is. >> this whole thing sounds so
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fishy to me unbelievable. >> you know who turns 93 today? >> mr. redstone. >> really? >> happy birthday, sumner. >> happy birthday, sumner. could be a very interesting day. stay tuned. >> does he know? >> i don't know. >> he had some fine words to say about that paramount. >> he did. he did. when we come back, holiday travelers bracing for long lines at the airport this getaway day. we'll get a live report from chicago's o'hare. take another look at the premarket, best week for the s&p in 12 weeks. best week for the dow in 10. and stocks still trying to put together three straight winning months. haven't done that in a couple of years. back after a break. ♪
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tens of millions, about 40 million americans taking to the roads, rails and skies for the weekend. our phil lebeau is at chicago's o'hare with a look at what air travelers can expect. not sure if we want to hear this, phil. >> actually, carl, when you take a look at what's behind me right now you'll say what's the problem. maybe a minute to go through the tsa checkpoint here at the third terminal for o'hare airport. the bottom line is this, we are seeing shorter lines in part because of greater staffing from the tsa as well as more contract
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workers being hired by all of the major airlines. those contract workers assisting the tsa means more tsa agents are doing the screening. and that's allowing the flow to increase a little bit. you ran through some of the numbers earlier about how many people are traveling this weekend. 38 million, that is the most to travel on memorial day weekend since 2005. it's an increase of about 700,000 compared to last year. now, majority of people going away this weekend will be doing it by driving somewhere. but over 2.6 million people will be flying. and for many of those people that meant getting to the airport earlier than expected, or earlier than in the past. we were here early this morning, guys, we did see the longest wait, maybe 35 minutes. it looked really long, but people were moving at a pretty steady clip. bottom line is this, this should be a fairly smooth weekend because of the greater staffing from the tsa at all of the major airports. having said that, you know that a lot of people are going to be upset even have to wait a half
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hour. be a little patient. >> phil, thank you very much for that interesting. what a week it's been talking about baggage fees and the tsa and. >> you can't make money in these stal stocks right now. they are so inexpensive. the fact is estimates are still too high, whether it be for delta, american, certainly for united, continental. only southwest i believe will beat numbers. and one of the reasons why is they're coming in under. there's price wars all over the country. they don't talk about it, but the price wars are back. >> really? >> yes. >> every time we book a flight it feels like it's incredibly expensive. >> do you use expedia? >> i think we use expedia. >> i got to tell you southwest, when i had gary kelly -- they've come into houston with guns blazing. i'm saying they're under, under, under. there's too much capacity. >> i thought there was no competition anymore because the doj let them all get together? >> well, they all got more planes and they're all going at
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it. there are some bargains, again, in air fares. that's how you're getting these poor numbers. >> just a matter of time before we start hearing them complain about oil that's doubled since february. >> that's another reason why the numbers have to be cut. the numbers are too high, so the stocks are not as cheap as they look. i think the rail numbers are too high. we have not had a seasonal uptick -- remember because i was trying in my thesis banks are good and i really like tech. but i cannot come up with a thesis there was a great piece yesterday about united parcel, and they're still going to get amazon business, but that's coming down. same with fed ex. the transports are the most hurting area. and typically that is not good for the market. it's the only fly in the ointment. but it's a big one. not one of those big dumb ones you can swat, it's a pesky one. >> no, the theorists -- >> they've got me on that. i keep thinking this will be a couple weeks that are good. if i listened to phil i think maybe this is the weekend we get a little change in the revenue per seat mile, but boy it's been bad. i'm just pointing it out.
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it's been bad. >> yeah. >> bad. >> i was not aware of that. >> yeah. a lot of it is gary kelly was saying, listen, i've seen all of these fares go up at southwest. and we can come under them. we're cheaper. that's the old days. that's how you get the price journey multiple five, six here, that's because the numbers aren't for real. it's a shock these things were making money. >> sure. remember a few weeks ago said models essentially not your father's model anymore. >> you know, i keep hoping that it ends and a lot of it's strong dollar, which i believe by the way. some of it sadly is brussels. okay. but for the most part it's southwest coming in. and united not doing the numbers. >> all right. i'm going to check expedia right away. >> you should check expedia. >> i will. >> by the way, watch home away, watch what expedia does with home away.
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could rival airbnb. if that company were to come public today, we would pay -- that is one great company. >> i know. that would be a big number. >> big. >> i don't know where the last funding ran was done. >> i don't know. but that is such a well run company. and i got to admit that is an annuity stream for people who own property. it's fabulous. people are making property decisions based on airbnb. as a stream of income. >> stream of income. >> because it's so well run. >> can support your mortgage. >> when we come back, we'll get cramer's mad dash, we'll count down to the opening bell, take another look alt the premarket as we wrap up this week get ready for a shortened week next weekend end of the month. back in a minute. ♪ ♪ for decades, investors have used a 60/40 stock and bond model, with little in alternatives.
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yet alternatives can tap opportunities that traditional assets can't. and even though they're called alternatives, they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation? goodbye 60/40, hello 50/30/20. you wouldn't take medicine without checking the side effects.
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♪ earth, wind and fire. >> i saw earth, wind and fire so many times. >> indianapolis. >> oh, my, that's right. headed to the club. >> say again? >> i'm headed to the club. >> are you? >> i never belonged to the club other than the elks club until i got married. now i'm in the club. >> that's nice. >> club's hard for me. >> all right. where are we headed on the mad dash for this friday? >> david, mark casper was on "mad money" over the week and i asked him directly when are you going to do your next deal? he played card close to the vest. it's this morning, literally five days i had him -- four days. and i got to tell you i love it. he's buying fei, this is particle bean technology,
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transmission electron microscopes, fits in with thermofisher become the foremost equipment company for biotech and for health care. and this deal is immediately added for $1.2 billion for 30 cents additive. mark casper was not fool around. he is one of the greats, david. >> he knows how to run a balance sheet too. >> how'd you know that? >> leveraged between three and four times, generate a lot of free cash flow, bought back a billion dollars worth of stock. investors are very happy with their capital allocation. >> this is the opposite of like i hate to even put them in but a theranos. the most transparent company and the hospitals love them. whether it be mt. sinai -- they do unbelievable work at sloan keterring. they partner with great companies and they offer -- you know the thing that's most exciting they're doing are these
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oncology tests in your blood while you get a reading while you're at the doctor for a screening for blood. this is happening now. keep an eye on shares feic, the ticker cymbal. a -- symbol. we're right back from "squawk on the street."
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you're watching cnbc "squawk on the street" live from the financial capital of the world. the opening bell in just about a minute's time. a lot going on as we know it's been a good week for equities. still, some of the macro japan cpi down for two months always going to postpone the sales tax hike. >> as long as the yen does not make it so ford and gm are not continually disadvantaged. when you get those guys off the desk, they say it's not been fair. well, it's been fair lately, so i like that. the yen must be watched. >> yes. meanwhile, dow still green for the month by 54 points.
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going to try to hang on as we work our way to tuesday afternoon. let's get a look at the s&p at the bottom of your screen. at the big board this morning cotiviti, sole brating ipo which happened yesterday. and astro nova celebrating its corporate rebrand. is this ipo window open for good? >> i don't like the fact so many deals at once people not able to do the work. a whole bunch of them next week. a lot of small biotechs, another bad sign. look at ions, stock's been cut in half. be careful of the biotechs that are pure speculative, they're not working. they're just not working. maybe for takeout periodically, but holy cow. i mean, i don't like it when
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these deals come all at once. people are not doing their work, they're trying to get in because the u.s. food deal was good. that's going to be like the mgm, those are real companies, real earnings, those are interesting companies and some of the secondaries by the way by these p/e guys are good, but just be careful. next week we're really going to get into some stuff i've been analyzing for "mad money." and i don't want to -- i don't like any of them. >> you don't? >> you brought the wall of shame back. >> oh, well, i mean this fellow farrow from tribune, he begged to be in. now, he did it subliminal. it was a simulation. he's a simulation. but there's a man, he's committed to destroying value. the only -- you know, i've got to tell you, he should work at sears. he should take that cfo job. did you see what the cfo -- did you see him what he wrote? he says after a very long -- very long, very long and productive tenure with lambert,
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2011 he came in, that's very long with lambert. >> i know, that is. >> berk wits continues to own 27% of sears. doesn't amount to a lot of money. >> do you high actress to go there and buy tire sns. >> i don't know. the stock up yesterday on the earnings. or not earnings, on the loss. >> ebitda. >> yeah, you came after him. you know, jim, i mean -- >> david, you interviewed -- here's what made me put him on the wall of shame. david's interview with a man who came in and did reverse -- the fellow you interviewed. >> yes. >> comes in at 15 -- >> well, he bought stock at 15 even though -- >> that was all 15 for everything. >> bought it at 12 in the market. >> how about oak tree? >> oak tree still a big owner, but on june 2nd, gannett is trying to have a withhold vote.
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it's unclear at this point. >> he should have started newspaper -- >> you are doubtful then i guess of his plan and dr. patrick -- plan to use artificial intelligence to really give new life to the data that they collect from all of their different newspapers and sites around the country but make it a more fruitful experience for advertising. >> i'm not doubtful at all there's zero chance it can work. so there's no doubt. i mean, it's below black and white. this company without gannett i was going -- i had done a lot of work on this company and i was going to give it 24 months. instead gannett comes in because they have the scale and they can make it work. but farro -- >> listen, farro has had an interesting career -- >> not in this business. >> all the guys in this business haven't been able to figure it out. >> how about tool from illinois
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toolworks. >> make the printing presses run well, i'm sure. >> the steel company could be good for news companies, right? if they can handle the steel decline, you know what they ought to get, a coal section. go for iron ore, go for cloud peak energy. >> okay. you are doubtful. you are doubtful. you're not in doubt at all. you have no doubt that they're going to be unable -- >> artificial intelligence. i mean, you know -- >> i don't know. >> marc benioff? >> i don't know. >> how about virtual reality read the paper and walk around with a headset. this is newspapers. gannett is the only guy who knows how to make money in that business. i try to get him a job at the sacramento bee, how they doing?
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how is that chain doing? >> i know. i know. >> they were eight. >> the graveyard -- >> that was the greatest sale ever done $60 a share. oh, my god, tony ritter if he's out there somewhere he's got to be happy. >> newspapers are their own worst enemy. >> even buffett this week acknowledged, i think the quote was, we can't crack the code. >> had to put this fellow on the wall of shame, i saw buffett -- remember when they were all single, the "new york times," the daily news. >> news corp. >> this week we have enterprise wise crm hits an all-time high. >> adobe. >> yes. but western digital guidance with sandisk is disappointing. >> but the stock was up big ahead of that meeting. and i see this flash memory is all part of what's good -- go
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over what meg whitman did. the good stuff is flat. she does have the really good data center business that she's -- remember, too many data centers. csc and her, but think of the value in hp and what was in there. >> you mean hp services -- enterprise services at hp that's being merged into csc. >> well, meg whitman delivered. i've got to tell you i am a big believer in the 3d printing of the other hp. >> really? hpq, the symbol for hewlett packard. >> i've seen it. >> no kidding? >> yeah. it's amazing. it's the way people are going to -- you're going to design anything, you're going to do it 3d. by the way, alcoa has a 3d division that is also great. 3d, if you ever get a chance to look at it, it is extraordinary. you're just not going to model anything. hewlett packard's got jnj. hp. they got to change that. they got to make it easier, you
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know? people get confusing. >> i know. they're going to change the name of csc potentially and hp -- at hp enterprise services to a new name. >> stark industries. >> and charter time warner cable -- >> no, they're just charter. i think they're sticking with charter. >> no, they're going to come -- >> time warner cable. >> they're going to become -- and who's dunder mifflin? >> theranos is dunder mifflin. >> meantime, we are see iing offshore marathon, a lot of discussion what happens at 50. do these guys actually look at their rig count, or do they look at their balance sheets first? >> they sell futures. and that's why 50 is that magic level where they can bring in income. remember, these guys are not working for the shareholders right now. they are working for the banks, the banks are coming in, the
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rating agencies are coming in there saying, listen, you've got to take advantage. so this is that ceiling, 50 would be a ceiling. i felt in the high 30s, this is where i felt it could go. and at 50 the spigot opens but the future spigot, not the actual in the ground spigot. nothing in tbakken, nothing. there's another ten counties that can be added. remember, there's only the perm yeen can you make any money right now. they have the great infrastructure. >> ete and williams have had a brutal week. i don't know if you've watched but as they move closer to figuring out what's going to happen there in delaware, twot companies just hate each other but are still locked in this potential deal. ete counterclaimed against
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williams saying they've breeched the murder agreement, this all will end up it would seem in a court in delaware where they'll either force ete to do it or the tax opinion they can't get from latham and watkins represents their ability to get out of the deal. delaware does not look lightly at companies that try to get out of deals. ibp/tyson comes to mind. >> oh, right. >> when we get closer to that day, there's going to be a lot of play in this thing. >> i remember when they forced -- >> down week until today. >> forced by credit home lending and then -- almost immediately. you're right, that deal comes through. >> i don't know if it comes through, but the point is -- >> who makes the money? does that mean they know -- >> they have to be ready, right? walgreens raised $6 billion rite aid transaction. >> or could they turn that into a buyback?
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>> well, i think their expectation is it's going to go through. but we've seen expectations be dashed on the rocks of the department of justice. >> i know. >> i like june. how about you? >> thank you. >> you're welcome. >> meanwhile dow up, nike the outperformer. let's get to mary on the floor. >> hi, carl. modest gains for the stock market ahead of the long holiday weekend of course. we're seeing a little pullback in bonds so yields are higher, also stronger dollar and that's putting pressure on commodities. this is bha traders are focusing on today. the yellen speech at 1:15, she's speaking at radcliff day in massachusetts today. some people wonder whether or not she will make any significant comments about interest rates. many traders say it's better to focus on the speech she'll give in philadelphia on june 6th once she has a chance to look at the
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employment data for the month of may. also we're keeping watch on oil which is pulling back from those $50 a barrel levels we saw in yesterday's session. and keep in mind we get numbers on consumer sentiment later today. let's look at the s&p 500 because i want to point out the indexs have a lot of trouble breaking above that 2095 level. it's right below there as we speak. but this has been a significant area of resistance for the s&p. we'll see whether or not there's enough momentum today to push through those levels. as i mentioned of course we're watching oil. down 60 cents and this in turn is putting pressure on a sector that has been certainly was stronger in yesterday's session. also the banks we're focusing on this group, we have seen strength in banks recently as central banks prepare for higher interest rates whether it be june or july, but one thing to note about the big banks is may has been an extraordinarily strong month for corporate bond issuance and should help corporate banking results in the
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second quarter. freeport-mcmoran says talks to sell stakes in north american and south american operations. this according to to bloomberg. slightly lower on that. you were mentioning western digital a little earlier, this company cutting current quarter forecasts citing debt cost linked to acquisition rival sandisk. we're in a bit of a holding pattern. the dow is up just about 25 points right now. carl, back to you. >> mary, thank you very much. let's get to rick santelli in the bond pits this morning. interesting data out earlier today. rick. >> we absolutely did. i think when it comes to our first look at gdp of course it's all about teaming up. and we're going to team up the growth that popped a bit in the second quarter looking like it's close to 3%. we still have some time to go to get through it. but that will be the averaging factor. we've seen that in many, many years. and do keep in mind last year's gdp was, you know, a bit under
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2%. the previous two years were very close to 2.5%. so it's going to be interesting to see what janet yellen does say today. one thing i can tell you the markets seem to have had their fill of speculation on a tightening. now, first let's look at a two-day of tens. see that big yield drop yesterday. after the auctions were done, probably because some early closing and the long weekend, there was an exodus and it did push yields down. where did it push them to? yields or foreign exchanged everything is pretty much close to unchanged. within one basis point the whole curve is like that. even the yield curve is like that. look at tens minus twos, the flattening granted we're still at levels basically we haven't seen since the end of '07, but the proactive part of the trade stopped, it's come floating back a little bit. dollar index same notion. something interesting we spend a lot of time about energy and commodities, we also always talk about risk on and risk off.
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i find that these two are going hand in hand down the yellow brick road. this is a year today the hyg etf overlayed with the crb index, they look a little similar, do they not? carl, back to you. >> thank you very much, rick santelli. when we come back, disney versus time warner. the battle in hollywood of the superheroes. we'll discuss with pulitzer prize winning columnist jim stewart, dow up 21 points as we close out the week. back in just a moment. what are you doing right now?
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making a cake! ayla reminds me of like a master chef and emiana reminds me of like a monster chef. uh oh. i don't see cake, i just see mess. it's like awful. it feels like i am not actually cleaning it up what's that make mommy do? (doorbell) what's that? swiffer wetjet. so much stuff coming up. this is amazing woah. wow. now i feel more like making a mess is part of growing up. stop cleaning. start swiffering.
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♪ gawker president speaking out amid challenges facing his company. supposedly gave nearly $10 million to fund multiple lawsuits against gawker including hulk hogan. this is what denton said this
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morning on "squawk box." >> the biggest regret i have is actually business regret that we believe that so much of the press and especially in a place like silicon valley is ak we es ent to the power and money, they ask differential questions, wait for the embargoes and we've absolutely pushed the band. >> obviously they did. the question is whether a differential press corps in tech means you go after executives' personal lives. >> having been involved fortunately in way too much litigation in my life, no one ever would take on a publisher, costs too much especially when it's a public figure. but they have so much money out there that suddenly fair game $10 million -- i've been involved in very expensive lawsuits, but you can fund a destruction of anything if you want to with that kind of fire power that they have out there. he's going after -- gawker talking about hiring a banker. >> sure. >> i mean, can thiel bankrupt
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them? >> sure. does he have the right to? >> it's a free country, the courts. they're free country. and i think people have to recognize that the court system is capable once -- if you have enough money, you can buy justice. and i say buy justice meaning typically you run out of money if you have a good case like this. you just run out of money. no one wants -- i've been involved in cases where someone was so guilty that i won against them can't really talk about the outcome, but let's say i had to fund it and it was like are you kidding me? you have to be -- at this level this is big time litigation. and typically only a huge company could afford this litigation. but individuals out there are huge companies. and it really is just amazing. i'm not -- i'm just talking about the economics of it. peter thiel i happen to like very much. he was a constant guest on kudlow and cramer. the justice system typically
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doesn't allow the ability to take on anybody. the insurance carriers have so much more fire power than you. >> they do. the larger question being raised here is the growing power of silicon valley to control much of the news business. >> right. >> and his place of course in the facebook board is very interesting given how influential facebook is. and him firing back really against the first amendment what gawker does a lot of these situations including -- it's very distasteful. >> but there's no right to privacy in the first amendment. it's only found by the courts. the founding fathers did not believe in right to privacy. you're really kind of bucking that. but it's a fascinating case. we've done some great reporting here on the case. >> yeah. hats off to squawk and andrew who's had a good week of coverage. it's going to be a story with ramifications for sure. we'll get stop trading with jim in just a moment. dow's up 27. don't go anywhere.
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they're the reason that i want to protect our community and our environment, and if me driving a that truck means that somebody gets to go home safer, then i'll drive it every day of the week. together, we're building a better california. time with cramer and stop trading. >> i want to go back to ulta because it's up 20. it was a clinic. the conference call is a clinic. mary dylan is one of the best executives in the country. it's not the unbelievable comp
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5.15, they did a promotion called the mother's day promotion called pamper her with pretty. everyone in the papers today -- in the last few weeks how do you reach milleninialmillennials, t capture millennials who then buy for their parent makeup and israeli cell phone king, mobile online business growing 38%. that's a huge number. better than amazon. gross profit's fantastic. my hat's off to mary dylan. she's superior exec. she wants to take over the world. i would not get in her way. >> are they the standard for retail the way l.b. was? >> no, mary just started not that long ago. she was cell phone company. she's remarkable. and, you know, people have to start realizing the force that she is. the customer relationship force that she is. she is in touch with her customers. and they are doing a fabulous job. so that stock deserves to be up what it is. there's a lot of sorts in it.
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go listen to her conference call. she buries everybody else. i wish sofora were public. i'd buy that. >> amazing. >> deserving. it was a remorkable quarter. i want to shoot down something that's starting to bug me. if you're buying time warner, you're buying because there's a great american who's the ceo who's monetizing it. you're not buying it because tim cook is going to make a bid for the company. can we please, david? >> yeah, no, that's not going to happen. >> no. >> one great american is not going to challenge another great american. >> no. you don't want that fight between two great americans. but it's not going to happen. >> i want to tell people you're buying it, you better be buying because of what jim stewart's going to talk about, which is a movie slate, though he's candid about that versus superman which people did not see. >> they saw it the first weekend but then it dropped off. >> that thing was not a money
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monster. >> nice reference. what's on mad tonight? >> wife says i'll see that one on pay per view. >> i guess we're going to also. >> pay per view? >> yeah. i'd like to watch it with you though. >> banshee season four and strike back i'm going to take a hard look at money monster. okay. got the game plan tonight because next week's so important. because if we get a strong employment number, guys, all we're going to talk about is who does best in a rate hike situation. and, david, again, congratulations on the scoop of this week, which is viacom. >> we'll see what happens today. could be interesting. or maybe nothing happens. >> you fabered them, man. my wife says that. you fabered that guy. that means you were like unbelievably powerful. >> thank you. thank you, jim. >> good fabering. >> have a relaxing weekend. try to relax. >> i hope that the mets do well over memorial day. >> as do i. >> they ought to lighten up on the harvey coverage. >> got it. >> i don't like that stuff.
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so he let out three home runs -- >> have a great weekend. >> long weekend. we will see you tonight. >> this was so exciting. "mad money" 6:00 p.m. travelers getting a big gift this holiday weekend, cheap gas. we're going to look ahead at what's in store for prices at the pump this season. and jim stewart on this superhero showdown between disney and time warner. don't go away. my mom loves giving me advice. she even gives me advice...
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good friday morning. welcome back to "squawk on the street." i'm carl quintanilla with simon hobbs and david faber at the new york stock exchange. market's putting together the best week in about 12 on the s&p, but with some mild gains today up 22 points on the dow. s&p just adding a touch, and then crude settling back after hitting 50 earlier in the week. let's get to rick santelli. got some breaking news on consumer sentiment. hey, rick. >> yes, thanks, carl. our final may read on consumer sentiment from the university of michigan. keep in mind our mid month read was 95.8. new number, 94.7, so you take the 95.8 out, it doesn't really
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count. sequentially that's coming off an 89, that was in april. now, here's what's fascinating, the mid read at 95.8 was the best since june of last year, so ten months, which was 96.1. we still comp to that same month so this is a ten-month best at 94.7. just to put a face on it, january of last year we had a read of 898.1, the best since january of 2004, so pretty good news there. are markets moving on it? let's check it out. we are seeing very little trade in treasuries. it's active, but it doesn't seem to be moving much. dollar index definitely firming up. and of course the equities, not big numbers but at least they're in the black. carl, back to you. >> all right, rick, thank you very much. speaking of data it's a big day for macro. gdp revisions to q-1 a little disapointding raising some questions about the strength of economic growth right now in this country. plus yellen speaks today at harvard. our senior economics reporter steve liesman has details.
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>> it was a weak upward revision to an already weak number, and dashed hopes at least the u.s. economy could eke out a whole number for the first quarter gdp growth. it could not. just a meager 0.8%, just 0.3 higher than the original number. we were looking for a 1% revision on consensus. but the trend of weaker growth unmistakable in this chart here. some economists see it as noise in the data, part of the pattern of weak first quarters. it goes back years. they point to recent strength in the data and say the worst days are in the rearview mirror. others see it as a meaningful and worrisome downshift. here are the details, consumer spending unrevised up 1.9%. there was hopes given strong retail sales numbers and upward revision question as to why that was not part of the revision but unchanged at 1.9%. business investment revised down. and you can see some of the strength. strength in housing, the trade numbers were better and the inventory numbers were better. and that's the reason why you did get what you got, which was 0.3.
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barclays says first quarter growth still looks disappointing, but the most recent data indicate that activity is bouncing back solidly in the second quarter. over at pantheon, in one line, still understating the trend q-2 heading for 3% plus. rdq takes a different tax, profits and investments are the heart beet of a capitalist economy and these data suggest the underlying economy is not as strong as data would suggest. as a result inflation adjusted disposable income, how much money people have in their pocket after inflation now seen as much higher than previously reported and again raise another question how come consumer spending isn't higher if they have more money in their pocket sns outlook for economy, fed, consumer, these are all topics that could be approached this afternoon when fed chair janet yellen sits down for discussion with harvard professor. we're going to have full coverage of that begins on
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"power lunch" at 1:00 p.m., simon. >> steve, are you able to give us any color on whether that is likely to be market moving from janet yellen today? clearly she's got another speech a week on monday after the jobs data. a lot of people are going to hang around -- >> simon, i'm terribly conflicted. i want everybody to tune in for our coverage at 1:00 p.m. but i don't think this is the place where janet yellen is going to make the policy statement about the possibility of another rate hike in june or july. when i think about the june 6 speech in philadelphia, it's after the isms, it's after jobs, it's a speech which means she gets to wind up and say exactly what she wants to say. it's a much better forum for it. all that said, there is a possibility and chance that former director very renowned harvard analyst is going to ask a question that has market moving possibilities as to the answer. you got to tune in for that reason. but if i was janet yellen, i
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would think june 6th would be the more appropriate and better venue to make that statement that the market is so listening for. >> that said we've seen it before where they just put one line in. they know what the line has to be and they -- >> right. there is no prepared text, simon. it's just a conversation. >> all right. thank you very much, steve liesman there. stocks meanwhile up 25 points on the dow essentially struggling to pick up momentum before the long weekend. investors waiting clearly for janet yellen. it's worth mentioning of course we had two good days on the market this week and that's perhaps the broader context from low volume tight ranges at the beginning of it. global marketist strategist at j.p. morgan asset management and scott ren with us, senior equity strategist at wells fargo institute. david, just to pick up this yellen point because for most people this is front and center for them. you no, we've had ten days now of minutes and fed speak what the short-term timing is actually going to be because the market hasn't fully shifted on
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those interest rate rises what's really dependent on what yellen said today. does the data change the context? >> so i think the data does change the context a little bit. this is federal reserve which has said for years at this point that their decisions are going to be data-dependent. and i would agree with steve that i'm not sure this afternoon is really the right venue for yellen to paint with broad brush strokes when it comes to monetary policy. i think the more hawkish fed speak we've seen recently is sending the right message. the fed's basically saying it looks like we are going to be able to go in the middle of this year. obviously there's room for data to deteriorate, but some of the harder data we've seen, the retail sales figures, international trade figures they all suggest the economy is much health departmentier than the 1q report suggested and the fed will move in the middle of the year if deemed fit. >> simon, i'll tell you our highest probability and it has been this way for a long, long time is december's probably the month they go. we've been calling for one rate hike this year. you know, it's just shocking to
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me that in march, you know, two months ago janet yellen sounds completely dovish. these statements are completely dovish. then you're telling me that two months later suddenly things have changed? the trajectory of the economy does not change that quickly. >> right. >> i don't think they're going to raise in june. let's face it, janet yellen is a dove. she's always been a dove. you know, you mentioned employment. she watches that closely. and you have to take that 5% unemployment with a huge grain of salt. you know, less than half of the people in the u.s. are in the workforce and almost 10% of the people that are are either unemployed or at the very least underemployed. the labor market is not nearly as tight as that 5% rate implies. otherwise wages would be going up. >> well, yes. david, there is some -- there's clearly some disappointment we didn't get a stronger revision to the first quarter gdp data
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only up 0.8%. and obviously the key question for many is the rebound that we now experience because many people had assumed that was what we were getting and presumably will still get through q-2 and q-3. j.p. morgan has a note out where they are bemoaning the weakness in profits in the data today. now, obviously the profit data is choppy. they would say that themselves. but they do think it's a fallback on both business spending and growth. from an equity standpoint what does it mean? >> so i think that obviously at this point in this cycle corporate profit growth is key, and we've been talking for six quarters at this point about how a stronger dollar, lower energy prices have been weighing on profits for u.s. corporations. you know, i think the key thing to look at here is the profit data was a little bit less bad. it's our expectation that profit growth won't turn positive until the second half of the year. so we're beginning to see some of those headwinds dissipate. and the biggest question in my opinion is do these headwinds dissipate before -- we are seeing signs in the profits data
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and employment reports that wage growth is beginning to rise. so the real question is can corporations maintain their margins to allow these headwinds to subside or will wages begin to rise and undermine profitability for the remainder of the year. >> and the judgment is? and what is your conclusion on that? >> so our view is that these headwinds are beginning to subside. i think the profit growth will turn positive in the third quarter. >> okay. one last question, scott, a lot of people overnight will have seen this figure about $100 billion has been flowing out of equity funds around the world during the year to-date. and i think it's now seven consecutive weeks of that happening. i wanted to get a context around that, scott, if i may. $100 billion out of equities funds when what can we expect on this market alone $200 billion of corporate buybacks in the same period? just give me a view here. >> we're going to see some buybacks here $100 billion outflow, look where the market is, simon. we're very close to the all-time record high. so clearly those outflows haven't hurt where the market is. it's noise and consolidation
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right now. but in the end i think we're going to be somewhere between 2190 and 2290 at the end of this year. you need to be in this market. you need to be buying on pullbacks. >> okay. we'll leave it there. have a great weekend. scott wren at wells fargo, scott joining us from j.p. morgan. directors of viacom including the chairman and ceo philippe dauman are bracing for their removal from the company today by sumner redstone, it would be a culmination in a week events have spiralled very quickly out of control in some ways involving this company. an extraordinary week in which really all-out war has begun between mr. dauman and sumner redstone's daughter shari redstone, beginning one week ago when mr. redstone removed from his trust that oversees the controlling stake he owns or the
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trust that he oversees which in turn controls 80% of viacom, he and attorney were replaced by two new directors of that trust. that trust would kick in on the event of mr. redstone's death or if he were to be deemed incompetent. that was filed in lawsuits on monday from mr. dauman and mr. abrams in probate court in norfolk, massachusetts, saying that it was a case in which a 93-year-old man's multibillion dollar businesses had been seized by an estranged daughter who has manipulated her father to achieve her goals. alleging undue influence in that change in trying to overturn it. that case will of course take quite some time to work its way through the probate courts of massachusetts. you then had a response from shari redstone and her father in the superior court of the state of california where they asked
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to confirm his move to have two assume their place on the trust as directors which they since have. and then to today in which i, again, those directors of viacom are at least preparing for the possibility that sumner redstone, who again controls 80% of the votes at viacom and at cbs, will call a meeting, essentially present his votes and say i am replacing these directors with new directors. if in fact that does occur, the directors at viacom who are prepared to go immediately in court in delaware seeking to enjoin that under section 225 or statute 225 saying that their removal is not being done properly. we will see if this in fact occurs, but of course it would be at the next in what have been a series of truly astounding moves here as the camps form to
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fight over the future of this company with an ailing mr. redstone caught in the middle, some would say. of course his daughter shari says in fact he's fully competent he is behind all of these decisions. viacom shares for their part are up rather sharply that perhaps if there is a change of foot in the management of the company that it would actually be seen as a positive, as many know viacom has suffered from a number of different missteps over the last year, year and a half, comedy central and mtv have been under ratings pressure, nickolodeon seems to have righted itself and continue to negotiate for selling a stake in the paramount studio. we'll see if the afternoon brings more intrigue, gentlemen. >> we know what happens before long weekends, that's for sure. thanks, david. when we come back, global growth is our urgent priority, that's the message from the g7 as it wraps up in japan. more on that. and then this debate, batman versus superman versus captain
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america. jim stewart's latest column takes on the superhero wars at the box office and inside the major studios. we'll talk about that after a short break. ♪ there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be. plumping surface cells for a dramatic transformation. without the need for fillers. your concert tee might show your age...your skin never will.
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hiroshima. we have the details in japan. >> this was an emotional moment for the 180,000 atomic bomb survivors who are still alive seeing a sitting u.s. president visit the very site where the u.s. dropped an atomic bomb 71 years ago killing 140,000 people. president obama joined by prime minister abe as he laid a wreath at the memorial park in hiroshima. he didn't offer an apology but did speak about the larger vision of a nuclear free world saying we have a responsibility to look directly into the eye of history. >> in the image of a mushroom cloud that rose into these skies, we are most starkly reminded of humanity's core contradicti contradiction. how the very spark that marks us as a species, our thoughts, our imagination, our language, our
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tool making, our ability to set ourselves apart from nature and bend it to our will, those very things give us the capacity for unmatched destruction. >> reporter: the president spoke with some atomic bomb survivors shortly after the speech. this was a speech carried live across all networks here in japan. but it wasn't without controversy. china and south korea criticizing prime minister abe for politicizing this event, attempting to paint japan as a victim at a time when the country has failed to own up to its own astros trocities commit against neighboring countries during the war. there's also increasing unease here in japan about the direction the abe administration is going in, aggressively trying to roll back that pacifist clause in the constitution so the japanese military can take on a more active role. . coming up after the break, "new york times" jim stewart on
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disney and what's working at the box office. that's next on "squawk on the street."
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batman versus superman was supposed to be breaking records at the box office. it's now limping to the finish line. joining us at post nine to talk about that this morning, cnbc contributor, pulitzer prize winning "new york times" columnist jim stewart. his column this weekend, disney versus warner, how captain america beat batman and superman. and i love this column, jim, because it gives us a feel of what you would have been like as a movie critic. part of this is about what's a better movie, right? >> that's true.
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the simple answer of course is why is captain america doing so well and batman not doing so well is captain america is a better movie. i'm here to personally tell you that after having spent five to six hours in the multiplex this week seeing both of them as well as every preview for every superhero movie in the pipeline. >> what does it say about disney's ability to execute on a concept versus time warner's? >> well, that's what's so fascinating to me here. these are multibillion dollar investments in whole franchises, whole comic book universes they're trying to create and this is almost like a lab experiment. on paper how do you tell the movies apart? they're like the same movie but one is done really well. i think the key difference is disney lets the studio run this, the head of marvel studios put his stamp on that. there's a one central fanatical guy who's interested in this and oversees the whole thing. warner is as it always has been is a director-driven studio. so the directors put their own thing on it, i guess, and then
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you have sort of everybody else. nobody could really tell me who is responsible for batman v. superman. if you want to hold someone accountable, who would that be? everyone's kind of scratching their heads. so there's a very different approach and this seems to be working for marvel. >> your point is now or at least in the view of some analysts that time warner better step up, like the next few better be good. >> they've got to be good, they have extremely valuable intellectual property here. superman, batman, they're probably the two best comic book characters out there. they're immensely valuable. you know, one misstep here -- by the way it did $871 million. it's not a disaster by any means. >> no. >> but it cratered after the first weekend. and the reason this is so important financially is that these things are setting up for hopefully a string of multibillion dollar movies. the original avengers did $1.5 billion. captain america is surging already past $1 billion. so if you do this right, you can look at 10, 15, 20 movies out
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there and you're looking somewhere to $20 to $30 billion in box office revenue. it's a big issue there. but if you turn the fans off, it's going to take some time to get them back. but these things never -- you know, superheroes never really die. we've been through good superman, bad -- >> batman in particular comes back in many different ways. >> genres. warner can revive these things. look at the bond series, probably the most successful franchise of all time. not every bond movie is great and i believe i've seen every one. >> it's funny the f.t. this morning has a piece on whether or not it's time to retire the bond franchise because dinner jackets and martinis in this critic's view are not of this era anymore. >> that makes no sense to me. i don't care what era they're of. dinner jackets and martinis on the beach are never going to change their appeal. >> i want to push back on the idea that a film that grosses $900 million is not a success in
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batman versus superman and find out why you would say that. i understand that they're tale tails to bigger franchises, i get that, but why that sort of take $900 million is that judged to be a flawed? >> well, first of all they only get half that. figure out the cost of the movie is somewhere $250 million to $300 million, marketing another $75 million to $100 million, not a big profit margin. i don't think it's so much the money didn't roll in. the way it happened, it all came in first weekend huge fall off. the critical reviews on this thing were savage. and the fan base reviews on this were terrible. and so the danger is the next movie. you don't have the built-in fan base. >> not to mention synergies with consumer products and theme parks. >> exactly. >> it does put into sharp relief hollywood's reliance on these -- this scale of budget, right? >> absolutely. >> everything that middle ground of the $50 million romantic
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comedies essentially gone. >> it's gone. i mean, the independent studios are doing some of the lower budget, you know, adult so-called fare. but if you look at the total box office last year i think the number was -- the top four or five movies, all of them you know blockbuster, adventure, superhero, fantasy kinds of things accounted for just a bigger share of the total box office than ever, which is really forcing the studios into these strategies where they have to put all their chips on a h d handful of these blockbuster types of films. >> cost ol failure is high. >> a problem of their own making you know this, jim, this is a problem of their own making. they could release many, many more cheaper films. they decided this would be the strategy. >> well, disney kind of -- well, warner got it started with "lord of the rings" and the potter movies, but disney really perfected this and it's a model that wall street likes, it's more predictable when it works. but it's becoming much more of a winner takes all world.
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now, it can go the other way. i remember the old singles and doubles strategy where you put out a lot of mid budget films, do 20 and figure 10 do okay and you'll make money. there are still people pursuing that too. >> independent financing that's for sure. >> right. >> good memorial day weekend. >> yeah, happy memorial day everybody. enjoy the blockbusters. >> enjoy the column in the paper by jim. coming up on the program, gas prices at a ten-year low. what does that mean for travelers on the big weekend? well, the staycation is probably out. that's next.
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good morning everybody. i'm sue herera. here is your cnbc news update this hour. firefighters battled an apparent engine fire on a korean air jet at hanada airport in tokyo. two fire trucks blanketed one of the plane's engines with foam. all passengers and crew were evacuated safely and no one was
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hurt. supporters of slain taliban chief man sour held tours across pakistan for him he was killed in a u.s. drone strike last week. some 400 mourners took part in the north western city of peshewar. a deadly shooting at a t.i. concert wednesday night shows three men rush sboog a green room, one shoots point-blank at an unseen object. police arrested brooklyn rapper known as troy avenue. g-e-s-e-l-l-s-c-h-a-f-t. >> that is correct! >> excellent. and with that we have a t-i-e at the national spelling bee. 11-year-old from texas and 13-year-old of new york outspelled the field to win the scripps national spelling bee. third straight year co-champions
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have been declared. the two will take home $40,000 in cash and prizes. that's the news update this hour. back downtown to you guys. as joe said this morning they know all the english words, they had to go to german words, sue. >> there you go. i can't even pronounce it nonetheless spell it. >> that's sue herera. oil slightly lower this morning ahead of a busy travel weekend. gas prices will be the cheapest we've seen for memorial day in more than a decade. bertha coombs at the nymex today. bertha. >> even as they have moved up over the last week and over the last month, carl, we saw oil hit $50 yesterday on the back of that better than expected or more bullish than expected inventory report on wednesday. but we are seeing it fall back $50 is kind of a psychological resistance point not just as far as technical aspects of trading and terms of oil, but the feeling is at $50 you'll get some of those producer here in
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the u.s. starting to think about coming back online and boosting their production. we've seen 12 straight weeks where production here in the u.s. has fallen, and that's what's made wti nymex crude the best performer in the energy complex this month. we do have gains across the board. today the dollar is providing a little bit of a headwind. and it is the memorial day weekend, the unofficial start of summer. we are seeing the highest prices at the pump as gasoline has moved up. but gasoline ironically has been the smallest gainer in the energy complex this month. nonetheless at the pump according to aaa we are paying the highest prices of 2016. every state in the union now has gasoline averaging above $2 a gallon. nonetheless when you look at it year over year we're still 40 cents a gallon below this time last year. and as you mentioned we are paying the lowest price going into the weekend since 2005. 34 million of us expected to hit
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the roads, carl, and i suspect a lot of people are going to be using those apps to try to get around traffic. back to you. >> thank you very much. sharon epperson at the new york merck. joins us now for more on that walt doyle who joins us from gasbuddy, the ceo of gasbuddy. are you there? nice to see you. welcome to the program. >> thank you. >> so you've done a survey and this is really interesting, the survey of the degree to which people are going to travel this summer. what are the figures in particular the distance figures that people are expected to drive this time around? >> sure, simon, we recently did a survey coming into this big weekend as it were memorial day one of the highest traffic weekends of the year with over 100,000 respondents 56% of those responsibilities will be driving over 400 miles, 2% increase year
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over year those consumers will purchase over $12 billion worth of tul this weekend. >> what are the sort of prices people will pay as they travel though? because you hear for example hotel prices are rising. >> correct. well, as you noted earlier we're seeing historic lows. in fact, with a national average of about $2.31, this is the lowest price in ten years for this weekend. and as previously mentioned that's 40 cents lower than it was last year. and a dollar lower than the year before. so cheap gas is clearly fueling the desire to have a road trip and enabling the consumer to do that with less discomfort on the pocket. >> what about the price variation across the country? as we just saw that. >> sure. it can vary dramatically. typically the cheapest gas is in the gulf states, and that has to do with proximity to supply as well as low state taxes. sorry everyone in california, you pay a little bit more on average about a dollar per
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gallon. and then of course anybody looking to fuel up try to avoid the big cities, particularly in the warmer months where there's more control on emissions for more efficient fuel burn gases typically more expensive in the city. >> okay. what about do you think the future of pricing? ber t ber tha was telling us prices at a high for a year but this week oil prices broke above $50 a barrel. where do you think should assume where prices are going? >> we think it's going to be a good summer for consumers and business. for a couple reasons. the gasbuddy estimate is prices on a national average will remain somewhere between $2.50, wane in june and picks back up in august. in the midwest there's been a lot of maintenance work on those refineries that have big output,
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those will be coming online as we enter the july and august months. >> so what will that mean? what does that mean? >> it should mean that our prices on average should stay low even though crude is coming up. the short story is that we have a big healthy supply of crude, roughly 12% up year over year as well as refined up 9% year over year. and that's good news for the consumer and for businesses because that should keep our prices low. >> okay. i hope you enjoy your weekend, sir. nice to see you. walt doyle joining us there from gasbuddy. speaking of low gas prices, more travel, about 40 million americans will take to the roads, rails and skies for this weekend. what will that mean for the airports? our phil lebeau has been at chicago's o'hare with a look at that. hey, phil. >> hey, carl, it's been a relatively quiet morning here at o'hare airport. i say relatively quiet because we did have the influx of people for the morning rush, the line was maybe a half hour, 35 minutes. but it was moving at a pretty
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consistent pace. here are the numbers in terms of how many people will be traveling this weekend, the most since 2005. as you heard bertha mention 34 million people will be taking to the road in a car, that is up substantially compared to where it was just a few years ago in part because of lower gas prices. 2.5 million -- actually 2.6 million will be flying. low air fares certainly having a role to play there. and then you've got the remainder taking bus or rails, whatever the means may be there. for the tsa the focus is going to be how will they handle this holiday weekend rush. they are adding more staff, but it will take time for them to put the 750 additional officers at the major airports around the country. they're going to be doing that through july. they do have many of their people freed up from outside the security points to work the security points because you have the airlines adding contract workers. and for the airlines a lot's at stake this weekend. they are at risk of having people say, you know what, in the future i'm not going to be doing a short trip. if it's maybe three or four
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hours to drive instead of flying i'll drive instead. so for the airlines they want to make sure that they can get past all of the headaches that we've seen over the last couple of weeks. take a look at the airline index, which has been under pressure for a variety of reasons not just because of what we've seen in the last couple of weeks with security lines. but the bottom line is this so far, guys, we have not heard of any major delays at any of the major airports around the country. and as you know, yesterday and today these are the two big days with a big push in terms of people traveling for memorial day weekend. guys, back to you. >> thank you, phil lebeau there. in the meantime the return of the '80s in a flashy way. we'll tell you why these cars are all of a sudden so popular with buyers and the reason will surprise you. before we head to the break let's have a check on where we are with the dow up 32 points. a relatively quiet end to the session given that of course we're still waiting for janet yellen at 1:15.
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are investors missing a key bullish sign from the bond market? that's catch that interview at tradingnation.cnbc.com with more "squawk on the street" coming up. there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be.
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if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be. the '80s are back. the wider collectible car market may have sled, but one surprising segment is surging. our wealth editor robert frank has that story and three prime examples. i'm looking forward to this, take it away. >> simon, thank you. amazing to think these cars are 30 years old. like the art market the classic car market has slowed lately. prices are declining for the first time since the financial crisis in 2008. but one segment is just soaring '80s cars, some models have more than quadrupled in value just over the past five years. now, the reason is that the young collectors who grew up in the '80s are now getting wealthy and they want the cars that were in the movies and tv shows of their youth. let's start with the ferrari
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1986 car, this is the one that don johnson drove in "miami vice." his was white, this one is red. these cars were selling for $40,000 or $50,000 now selling for $100,000 or more so more than doubling their value. this is the famous lab bor gmbo this is the car in the famous cannon ball run opening sequence and one of the first cars that had these cool scissors doors. these cars not that long ago selling for $100,000. now over $600,000 with some going for over a million. and this was one of the big surprises, bmw's not considered really a collectible car. this is the m-3, it's a 1988. they were selling five years ago for $15,000 or $18,000, now they're over $50,000 to $60,000. you've seen all these cars which still look pretty good for their age selling two or three times or more because all those guys
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like me that were teenagers in the '80s have the posters of these cars on their walls, now they got the money to buy them again. back over to you. >> way to drop the cannon ball run reference there, robert. very nice. let us know if you see adrian barbo -- >> and farrah faucet, let you know. let's head to cme group and get to rick santelli for the santelli exchange. [ technical difficulties ] >> hi, rick santelli. nice to meet you. we were talking off camera, let's continue. all right. janet yellen and company, they must understand that if you have the dynamiiynamics of a busines you're a business, what are your cost sns. >> well, i have fixed costs and variable costs. >> okay. >> labor is a variable cost for me. >> stop there. a lot of businesses have minimum wage employees. >> uh-huh. >> we don't know what that cost is going to be. next cost. >> well, gabelli -- mario
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gabelli this morning called liesman out on it and said why are jobs so good, this is the conundrum they have. because if i own a factory, it's easier for me to hire people because i can get rid of people easier than i can write down a $5 million capital investment. this is what their models don't allow for, so which is why people who call labor -- the unemployment numbers lagging, that's what it is because at the end of the cycle it's easier for me to take on more workers because i can shed them easier than i can get rid of capital expenditure. >> health care costs. >> that's a whole -- that's a new day namic. >> so little talked about. all right. what are some other costs. say you know you're going to have various i equipment running and be obsolete in the next two, three, four years. you need to know interest rates, you need to know how you're going to amortize. all of that. do we know how any of that will turn out? >> no, here again we had the g7 meeting and i've argued in my blog regularly with all the talk
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that was going on this was going to be the g7 meeting that paid homage to larry summers, who won a surprise election the polls were way off on that too because of fiscal stimulus. so this was going to be the g7 meeting of massive fiscal stimulus, whether you agree with it or not doesn't matter. but part of that was going to be tax legislation for investment tax credits, which would lead to new capital investments, which would increase productivity. there's no -- productivity is lagging because there's no capital expenditure because nobody wants to take it on. it's too great of an unknown. >> okay. one of the other questions that everybody's been asking is if we have such great job growth, why don't we have actual growth? shouldn't the question be different? doesn't this call into question the jobs in particular that aren't giving the growth? there has to be issues there. are we multicounting part-timers because the definition gets so fuz fuzzy? >> no, but this is a problem with, again, the fed models.
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we've laughed about it before. not accelerating inflation rate of unemployment which is what the fed looks at. but the world, a globalized world where you unleash 2 billion new workers on the world, there's a lot of wage pressure and that doesn't take place in their model. and this is a flaw in the model. >> everything we've said bring it down a level and rise another level above it. in a world of growing debt, debt everywhere, journal talking about books people are writing, like how much debt -- we're going to be spending potentially tens of trillions of dollars of money that we don't -- aren't taking in. now all of those issues, if there's one hiccup in a world drowning in debt it's going to amplify everything. >> that is the story of the world, which is why you can be a
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akazian -- you have to have the austrian school in there because every debt crisis we know begins with that. we're now worried about the chinese debt. it's always debt, debt, debt. >> so maybe we just whisper this, janet yellen, we feel your pain. they have to normalize. but normalization isn't just about the here and now, it's got -- because basically we're trying to turn this destroyer in this little pond. somebody's going to have to do it because if we keep going down the same canal it's going to get narrower and narrower. it's going to get wedged in and there will be no more turns. >> especially because debt all over the world is so badly mispriced. >> well, how could it be mispriced? mario draghi can't find more securities to print money -- >> the ecb is the most disruptive force for global credit markets because it's causing everything to be mispriced. you every day show that bund to 10-year note yield differential. and why are they so connected? because the ecb has now driven everything to a relative value
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trade. so if bunds are 15 basis points, sure, i'm going to buy ten years at 185 no matter if inflation -- >> but the signal represents for people looking at the curve going, aha, i know what that means, you don't know what it means. it means. you see, now you know why i missed the cue, because i can't stop talking to this guy. and yra, we should talk about memorial day honoring those who died and discussing what we discuss everyday. >> yes. it is beach season, and you know what that means, getting in speech, and those workout session sessions are just a click away. and the demand is rising. more on that next on cnbc. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird. illuminates skin with pearl optics science.
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well, now you can work out in your office or living room, because on-demand fitness is a trend. diana olick is in washington with more. good morning, diana. >> good morning, simon. from cardio to core to back to bunsb and if you can press a button, you can do it anywhere, because there are literally hundreds of demands of fitness offerings, and some for free and some for a fee, and all part of a big new business that is
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raking in the bucks. >> reporter: at the santa monica, california, he headquarters, the company that brought fitness to your home for a subscription fee of around $13 a month, they say it is 68% of the users who want both dvds and on-demand. >> instead of cannibalizing it, it is enhancing it. >> reporter: but the money is fueling competition. brick and mortar gym chain crunch which has 150 locations in the u.s. now launched on demand classes two years ago, and the service is free to most gym members or $9.99 a month on its own. >> it is a powerful brand, and we felt that adding the online digital experience helped to
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extend the brand outside of the four walls of the gym. >> and now i have to say that i have been a dvd girl for a long time, but i just got the roku and the on demand stuff, and i'm not going back, but carl ikeler says they are are selling dvds at twice the on-demand and customers are saying they want both. i don't know why, but they do. >> and diana, on essence what is on demand fit neness where you think that you are training with everybody else or feedback or how does this work? >> well, with what you do is to go to any one of the offerings like beach body or daily burn, and pull them up, and they will have tons of workouts. some of them are subscription, and beach body is subscription, but instead of the dvd in, you will get it streaming here, and you are getting a lot more offerings, and loft othem are for free, but it is a question of what is working for you, and what you like, and you know, you
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pull this stuff up. no more, i have to say that the dvds are a pain, and they start to scratch, and then you will get the content, and flip through it, and literally hundreds at the fingertips. >> wow. that is a fortune to be made adding in social media. and diana olick on the latest in the fitness trends. and meanwhile, two movers going in the opposite directions. big lots is surging after better than expected quarterly results, but the gamestop is down over the quarter overshadowing what would have been an earnings beat. on that note, we go to jon fortt with a look at what is coming up next on "squawk alley ". >> good morning, simon. on the floor here on the way to "squawk alley." we will talk to kara swisher, and also more on twitter, and more leaving, and is that something about twitter or the prospects of the company? and final ti ily the ipos, we hx
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yesterday, is that a turnaround or more choppy waters ahead on "squawk alley" coming up. ♪ nah. what else? what if we digitize the whole supply chain? so people can customize their bike before they buy it. that worked better than expected. i'll dial it back. yeah, dial it back. just a little. live business, powered by sap. when you run live, you run simple.
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york and we are live on "squawk alley." ♪ we got no choice ♪ all the girls and boys ♪ me and all the noise happy friday and welcome to "squawk alley." kayla tausche and jon fortt and kara swisher from re-code out west, and, a t lt lot the talk you. tech is riding high, and the highest performing stockton dow, and now, while the nasdaq is being led month today by apple. and what ary

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