tv Squawk on the Street CNBC October 5, 2012 9:00am-12:00pm EDT
to go to seven,aity, a tenth, it'sing to ridiculously obvious. maybe they knew that, but maybe it's perfect. dow below 8 for the first time in 12 months. make sure you join us on monday. "squawk on the street" is next. ♪ ♪ ♪ for the first time in four years unemployment in this country below 8%, now at 7.8%, but as you heard everyone say on squawk, time to break out the conspiracy theories, 32 days before election day. welco welcome to "squawk on the street," futures reacting to the data, of course. 114,000, roughly in line, positive revisions to july and august. europe has plenty to react to, and angela earning innel saying she will visit greece next week. >> our road map starts off with the stunner.
the jobless rate falling to a 44-month low falling below 8% for the first time since january '09? does this give the president the edge he might have lost in this week's debate? >> zynga's weaker player demand on farmville 2. shares of facebook feeling pain on that warning, as well. >> it is the one-year anniversary of the death of steve jobs. tim cook paying tribute to jobs on the company website saying the greatest gift jobs gave to the world is apple. >> added last month, but the big surprise is that unemployment rate falling to 7.8, dropping below 8% for the first time in three years. you six, unchanged? i think at 14.7, but the timing so critical ahead of the election has people not trusting the data. >> i trust in the data.
i've trusted in the data for years. i don't think it can be massaged. they get it wrong, but they get it wrong for both teams. look, the report's good. hours worked up, pay up, july and august revisions up. you want to look through it because you're political? i can, i'm not political. trying to make money here. >> i'll go with you. >> thank you. >> know we hear a lot about conspiracy theories. i suppose that's something to be expected certainly if people are partisan one way or the other, but we have to go with the data. not bad. not great. let's not forget we had 1.3% in the second quarter. it's not as though we're steaming along here, but the revisions were pretty strong. >> sometimes good is good. that's something i learned very on stocks. i can turn good into bad. it's something we can do. we can all do a theoretical construct like we were in some sort of ideological debate. stocks are good. >> the data has jim mixed this
week, but we did get numbers mixed and consumer confidence is good and unemployment and yet, jack welch, the former ceo of general electric as you just mentioned on squawk out on twitter today. he's been obviously critical of the white house for years now, but he says unbelievable jobs numbers. these chicago guys will do anything. can't debate so change numbers. that's the former head of a very large company. >> i'm on tv, and i remember jack sent me a fax when i was first on with mark haynes. i like you. i love jack. i'm trying to reconcile jack with the numbers because i trust jack and think he's terrific. i come back and say listen, they've been wrong -- he's jack. i don't think that they're phony. it doesn't make me feel that jack is off the reservation so much that i think that this particular issue -- i disagree with him. i read the tweet and i was, darn, jack, come on, man.
>> let's say good is good. >> does this mark the turning point and we had david come out this morning where he was establishing 1575 and that's quite an upside for 2013 particularly if he's standing by a year-end target of 1250. so between 1250 and 1575 by the end of 2013 that's spreng loaded to the upside. >> he must know how the fiscal cliff is resolving itself. do you remember that scene in "the wizard of oz" when they look through the crystal ball and they find out how to get to the promiseland. he's got the crystal ball. my hat's off to you. >> it's a great note. 1575, next year because congress, in his view evades the fiscal cliff in the first quarter which then allows investors to in his words focus $114 for s&p. >> the stock market is saying
that, okay? i don't mean to be too gratuitous or say, look, what does he know because there are people who are making presumptions based on stocks. i have the unfortunate task of speaking to the ceo after ceo. if it's resolved, he's right. if it's resolved, he's right. maybe he gets resolved? >> isn't that the problem with confidence, david? there's this binary outcome that is facing us over the next few months and you're either very right or very wrong. >> perhaps even overstated a bit by the executives that led the corporations in this country and around the world. >> and by the way, so are market amusements and i spent three days with 40 or 50 hedge fund managers and it comes up a lot in the larger context, of course, with the deficit and what we're going to do about it.
>> there's no doubt. if you were to get a $4 trillion deduction, it would be, than the numbers themselves. >> captured by the tea party. do you think the tea party will make a deal? this is the kind of talk you get. as soon as you say something like what i just said. cramer on twitter say i'm a house man for higher stock prices and that's what i stand for. that's the campaign that i've had. my principles are clear. you get this thing resolved with the fiscal cliff and the stock prices go up. that's my party and i'm in the higher stock price party and i'm not in the pajama party, by the way. >> you have jim brown talking about investors fleeing the market and the percentage of households from 2001 that have stocks or stock funs down to 46% now. i mean, is that a contrarian indicator of any kind? we make fun of these types of stories constantly.
>> you see that the stock market was down? the machines are in charge. 50% of the trading and the sec is beginning to answer this question. >> sorry. i think it's funny, but yea, being look, every day you come here and there's some fiasco involving trading. >> we still haven't sorted through. we still don't know what the levels are with the ratios and kraft and the trade went off, the machine trade and people say, of course, because it's all phony and this used to be a place to raise capital. >> it still is a place to raise capital. >> no, 60% of volume have high-frequency trading. >> it is something that would be up 33% in the second. confidence has been hurt by an 11-year, no move at all in the s&p and we're up a bit this year and by so many of the trading
glitches. >> no, no, was the bad -- >> no. no, that wasn't really. >> night trading? was that the night securities. >> the crash is where it all began, but you know, they keep moving into bond funds, referring to texas because sitting in his room for quite a long time, the consensus does seem to be we'll have qe forever and rates are going to stay low for a very long time. one wonders, whether in fact that will be the case when so many people seem to think the rates will stay low and we'll see them creep higher. if that happens and the duration risk and the bond funds is significant and i'm not sure people fully understand it and they may be ruining the day that they're moving so much of the money out of their equity market into fixed income. >> there is one that's a big mover this morning, zynga taking a beating in the trade. the current quarter is challenging due to poorer than expected performance for certain games. news of zynga's warning pulling
down shares of facebook. this morning j.p. morgan is lowering its payments on facebook on the heels of zynga's preannouncement and there's a crucial announcement that facebook said in the first six months of the year, payments revenue was 10% of total revenue. >> there are people trying to -- jefferies, instantly saying pay no attention to the zynga problem. zynga was a major source of payments if facebook can monetize and if facebook can come on tv this weekend and the stock goes higher and they get it higher. i will say this. i think it's important, david and maybe you disagree with me and it is still too early to buy zynga. >> still too early. >> even after today because now the cash is going down because they're having a loss. >> when you play -- and it just went and bought omd. >> i have seven people that
haven't rushed it from three months ago. it was a fad and zynga might be a fad. >> they bought it in march for 200 million. >> the peak of usership and the peak of popularity for that game. it's so six months ago. >> i'll just make it personally. please, my daughter, return my last few friends. >> too early to buy groupon also? >> very early. >> does this -- it doesn't speak to all of the games that are played online that there will be an attention span for these gentlemens has been compressed greatly. you play it in an intense way and therefore, all of the money you put into developing these games you have to be able to advertise that pretty quickly. >> this was a brilliant thing that they brought this company public. bad for everybody other than
pinkus. groupon is giving me the deal on the remote control helicopter and if i act right now it slices through the stratosphere. >> oh, you can command it from your iphone or ipad. >> that's pretty good. >> you get that from matrix? >> remember the e toys, how value added they were during christmas? come on, david! sock puppet. >> to the zynga story, the analysts are out in force. >> don't you love it? >> baird cutting it to neutral and take their price target from 6 to 3 really with hp during ag today. i love this line. we're at a loss to identify positive catalysts within a reasonable investment horizon. >> they were at a buy, correct? >> they went from a buy to a neutral. >> that's very helpful. >> great research. >> someone downgraded today using $1.50. thanks, guys, really helpful.
thanks for warning the investor out there. >> it happened again and remember in 2000, the companies came public and they went to zero break quickly and we learned nothing. we learned nothing. zynga, groupon. >> in defense of the companies they did have what appeared to be earnings growth and earnings. >> right. >> it was in the distance for the quarter. >> like we were saying in the late '90s and 2000 was forget it. we have an idea and we were in refridge raising and now we moved into internet because it is similar and we're going public. >> how about yelp continues to go up because they're affiliated with apple and by the way, also, linkedin keep going. 140 times earnings and starting to get cheap. >> speaking of apple, today does mark the first anniversary of the death of steve jobs. apple's co-founder whose innovations, of course, transformed the technology giant
into what's now the world's most valuable company. on its website today, apple has put together a montage of steve jobs in his own words. >> an ipod, a phone and an internet communicator. are you getting it? ♪ ♪ >> good morning. >> yes, i'd like to order 4,000 lattes to go, please. just kidding. wrong number. thank you. >> incredible to watch on the company's website, they say one of the greatest gifts steve gave to the world is apple. no company has ever inspired such creativity or set such high standards for itself. our values will be the foundation of apple. october 5, 2011, stock was at $378.25 and it is now $666.80, 79%. >> the last two pages of steve
jobs and it has in person his last words and his gift was apple. he said it. my gift is apple and what we've done and i think it's very rare that one person, they say the gift isn't company. >> maybe the gift is humanitarian. this was a laserlike focused man who delivered and he delivered an a-team. he left apple with an a-team and he would have expected the stock to be here by now. >> there are certain companies out there that have managed to weave themselves into the fabric of everyday life and throughout the years of his change, you know, maybe 50 years ago. 100 years ago, it might have been something like a coca-cola and today it was a technology company like apple because think about the way it integrates with our daily life. it's seamless at this point because it's a large part of what steve jobs did to the world of computing.
>> save the music industry with i tunes, created the ipad. >> here's the cover of the most popular of newspapers "usa today." how high can apple fly? a huge stock chart talks about who might one day succeed tim cook. people are talking about johnny ive because you know the bearish arguments are building, jim, about products being more incremental and errors like maps. how much does that weigh on us in the longer term? >> there's -- there have to be questions after this kind of run. there's this great stuff where jobs was slagging microsoft and it was faint praise about bill gates, but i need to see a better mousetrap. sewn, does sony have a better mousetrap? 2 doesn't work and somebody spilled water on it and it doesn't work. yesterday, meg whitman had come
on the show saying i have an apple killer. i didn't hear that. >> no. no, but the history of capitalism in our markets is one of which companies eventually hit stasis in some way because innovation slows and they're so wedded in the current business and they're unable to move and even though they see it they just can't get there and that will happen. it may not happen for years. >> they can still be dominant. they can still be the market leader, but reach stasis and we have seen that as well. >> microsoft plus. >> it still is. it still is, but does it stay at $30 a share? yes, it does. >> enormous aims of cash. it's not a failure. >> when steve jobs died, whether the closed system would be the open system and i think we now will say one-year later after all of these years the closest turned out to be able to produce more wealth and the open system. >> and the piper's gene munster
who missed badly for the first week of iphone shipments did trim his numbers for september are down to 25 million and he knows that supply is tight in the stores? he says it's not a big deal and it's not the december quarter you want to worry about and if the supply remains limited he might shift unit into march. >> i want to own apple and still want to own it and not trade it. i'm concerned, not so much about applegate because i think it turned out to be a thing of the past. new products, what did he leave on the -- >> how long is the pipeline? >> i think board members know, but they're all so tight mouthed. we just don't know, did he have something else that was revolutionary? >> the tv. >> it could be the mini. it could be ipad mini in just a matter of weeks. >> the companies may not allow jobs' vision. jobs had a lot of visions that
evolved technology with their parts. >> or it involved him beating it down until he finally said yes. >> we'll talk to the new york times a year after jobs death. what is the mood after the jobs number. we'll talk to hilda solis about the results and maybe about the methodology and about the white house' game plan for job creation. >> the netflix rebound. the stock surged in an early october rally. a sign of things to come or many a one-week wonder. let's take a look at the jobs data and we are looking at a higher open across the board. much more "squawk on the street." humans. even when we cross our "t"s and dot our "i"s, we still run into problems -- mainly other humans. at liberty mutual insurance, we understand.
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the september jobs number shows 114,000 jobs were added last month, but did you nail the number? this week we asked you to tweet us your prediction of the non-farm payroll figure. there were a lot of them in search of the lucky winner, the prize, of course, that gorgeous umbrella right there autographed by simon, by me, jim, david, melissa. did we give it to santelli and david? >> i think we did. >> we'll announce the winner later in our program. maybe it's you. best of luck, we think that pen,
by the way is waterproof, but if it's not. >> that's why i signed it on the inside. >> i wasn't sure. i thought it would be safe. it's great. it's a collector's item, really. >> i hope they don't see it on ebay immediately. >> no bid. i like visa mastercard and i like paypal. >> all right. last night on "mad money," in case you didn't watch, he sent it to the shredder. get ready for cramer's mad dash and shoppers and investors, the president of sears and kmart will share his holiday season strategy for giving both stores a much-needed sales boost. >> take one more look at futures hanging on to an implied open about 60 points to the upside after the jobs number. we'll see if it lasts when "squawk on the street" comes back. er. who has 11 major brands to choose from? your ford dealer. who's offering a rebate?
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>> all right. about five minutes until the bell. let's get a "mad dash," before we head off to the weekend, a look at bp and what some say is news a long time coming. >> he'll come in as non-ec and tiff chairman. andrea jung will be off the board. what do we know about fred haston. he sold schering-plough. avon goes from a short, in my eyes to a long because haston's taking it over. his influence will be felt
immediately. the stock can go higher with haston in charge as chairman. >> does your gut tell you it ends up being a cody story? >> yes. i think fred -- any time he seems to be involved he brings out value. he would not take this job ideally, even if he's non-executive. this is a man of great honor and great convict, and he favors higher stock prices. >> buffalo wild wings. >> all right. i've been waiting for this. red bush comes out and says this is a chance to buy this. this is a company that, by the way, and i happen to like it. >> i think wings have peaked. i think they are doing a fabulous job. i'm looking for a par. i think it goes to 100. >> we'll talk some football later in the hour. it will be a good weekend. we're the place to be on this jobs friday and labor secretary hilda solis with the white house's take on this morning's jobs number and meet some everyday apple investors who have retired early thanks to the
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>> the opening bell. a very big friday with the dow under 8% for the first time since '09. manage is celebrating its ipo and the charity celebrating world smile day. we should know that dave & buster's was expected to do the hon o but they withdrew their ipo citing market conditions. remember thes we've seen go this week. both trading lower on their debut day. it has been a tough week for the ipos and what was expected to be a big week for the ipos turned out to be a very different week for them. >> would it be hard to price the ipos in a much different price.
everyone wants to be greedy and this is what happens. you lose money for everybody. >> some are still reading this week as we're up year to date on the number of deals and up 3%. 104 doles and people are saying the ghost of facebook has passed even with dave & busters and they'll say this has been constructive. do you agree with that? >> there's very little cost. >> that's true. >> yea. taking a look at the banks here. we're seeing them trade higher. morgan stanley is up by 1.9%. there's an article in the ft, interview with ceo james foreman. there will be possibly more job cuts at smaller bonuses. he said that as a shareholder himself he's sympathetic to the shareholder vow that perhaps his industry is overcompensated and open to the idea of a lower compensation base as well.
>> he's been talking about that publicly to a certain extent, off the record to a certain extent for quite some time and has sent many others and particularly when it revolves around fixed income which used to be a driver of not just profits, but compensation. it's an area of the bank where you have to hold a lot more capital where you had to significantly cut compensation into which transparency has taken away a lot of profit margin and so it's happening. it is actually happening at the investment banks. compensation started to trend down and many think it will continue and let's not forget what management at morgan stanley do, it is in terms of the percentage of revenue and it is growing and it is a business where they really want some focus because they are the largest brokerage firm in the country as they ramp up what they own of smith barney. >> meanwhile, the banks are fixing up their balance sheets. bank of america called it
preferred. bank of america did very high cost financing when things are bad. they're bringing the high cost financing in and some of that is bernanke's magic and if there weren't so many pushbacks for deals that were done, i think bank of america would be at 12 or 13 by now? >> really? >> yes. >> they rallied yesterday off the perception that romney won the debates. health care, for instance, hitting at another high here. if we take a look at the etf that tracks health care, xlv, that's the new 52-week high, and the kol is up by 1.25%. the financials seem that will do better under a republican administration. kohl's is interesting, jim, because there are a couple of positive analysts out saying that now with nat gas is $3 and maybe there could be a bid for
coal. coal in the east is 4 to 5 is where nat gas has to be competitive. and union pacific is the major player in the way coal is shipped out west. union pacific remains a buy. if you want to buy and be reg rouse about it you can buy union pa sick and not pea body. >> some of the japanese automakers are worth watching. the ft has numbers out. the exports of autos to china in the past month have been sharply lower among japanese automakers. toyota was down 40% year on year in the month of september and we're seeing the adrs trade down a percent. >> take a look overall at asian exports. that chart, i don't have it for you, sorry, is shocking. shocking. when you look the how down, how sharply they have fallen. overall, china japan. >> samsung just reported. it is really significant and
certainly one worth watching if you want to worry about a slowdown in the global economy, it is, man, that's a scary-looking chart. i will try to get it for you. >> do you think that's because of europe -- >> i think some of it's europe. i think japan to china. terrible job out there. >> because we know that honda had auto sales in our country. toyota, but they make them here. >> want to go to bob pisani. fleet matiches is an ipo and it will be pricing higher and you're in the crowd right now. >> it's always nice to see this. look. >> here's employees of fleet manics and they did fleet management and they priced last night at $17. 21 to 23 are the indications and my point is all of these people are employees of the company and jim travers is right over there and he's the ceo and he'll be on with us for a little while and they're all waiting for him to make the first trade.
the ceo makes the first trade and it's 100 shares and they come over and they talk to us and that's the way it's done these days. we'll talk about it later and get more information and that will open to the upside. this morning, folks, it's all about politics and that doesn't happen every day. boy, was that obvious. the minute it came out i got blasts from everybody, but from the white house, 103,000 change in the private payrolls. that's not a good number. that's certainly a positive for republicans. i heard all sort of comments, theories, conspiracy theories and some of them interesting and some of them down right silly. let's just leave it at that, from my perspective, from the stock guy's perspective, it is sitting right at four and a half-year highs and we have to close above 1465 on the s&p 500 and that's where we are right now. we've had a good week for stocks. the dow's been up 1.25%. the dow transports are up almost 3%. we haven't seen the transports outperform the dow industrials in a long time for three months.
the transports have been underperforming and the bears have been seizing on that in that the market is weak, and this is a week that'singe chaed a bit and the headline numbers have been decent. the ism and the auto sales and retail sales for september is know as good as august. stock mutual funds. let's just talk about this and i know you mentioned this, carl had an article in the "wall street journal" continuing outfoes. they're getting exposure to stocks in a lot of other ways. more investors are using them. more companies are offering them. they high yield bond inflows and while they're bond funds they tend to act like stocks and people do understand that about them. there are hybrid funds where there have been big inflows where they can allocate tactically between stocks and funds and there have been investments in them. what will get investors back into these stock funds and
bottom line is any improvement in the economy and when we see those bond funds finally start moving to the down side. right now we have 21 to 23 on fleetmatiches. guys, back to you. >> see you in a few moments. >> the unemployment rate falling in september dropping 8% for the first time in four years. the non-farm payrolls came in slightly shy from estimates. first on cnbc is hilda solis, the u.s. labor secretary. madam secretary, always good to have you, happy friday. good morning. >> good morning to you. >> i don't need to tell you that we -- [ inaudible ] we're getting bombarded by people who do not believe the number. they believe this number was fixed and typed to coincide with election day. what do you say to them? >> you know, i'm sorry, but i can't hear you clearly over the applause and the noise in the
background. >> that's capitalism at work, isn't it? when a new ipo prices. fleetmatiches is a new issue we're watching and the traders are a little noisy. i'll rephrase the question. a lot of people do not believe the 7.8% and they believe they nexted this to coincide with the election cycle. what is labor's response? >> you know, i'm insulted when i hear that because we have a very professional, civil service organization where you have top, top economists that work at the bls. they've been doing these calculations. these are -- these are our best trained and best-skilled individuals working in the bls, and it's really ludicrous to hear that kind of statement, and i say that because just look at the -- we have to look at what happens across the board, not just in one month, but look what happened in the last two months. we also saw revisions there upwards of 86,000 additional jobs added and that things us now to 2 million prior at sector
jobs across the board. we saw 104 private sector jobs created. we still need to do more. we than there is still the willingness for all of us to see that more people are put back to work, but in this particular report, i'm happy to see continued growth in professions in business and also in local government, education, and more importantly in health care and those are areas that i know something about, i've been traveling around the country and we're seeing more investments in manufacturing and high-skilled labor areas and that's where you need to play the focus and we need congress to cooperate with us to make sure we can go. >> we can go through all of the talking points we do every month, madam secretary. congress needs to do more and i want to read you one tweet for jack welch who used to run general electric and a man who knows a bit about economic data is created and this is his tweet this morning, madam secretary. unbelievable jobs numbers. the chicago guys will do
anything, can't debate, so change numbers. what do you say to him? >> i would say that i have the highest regard for our professionals that do the calculations in the bls. they are highly skilled economists trained in this area, and you have to look at two surveys that have been done. the payroll as well as household survey. you see where those two bits of information tell us that there has been growth. household survey looks at self-employed. it also looks at new start-ups while the payroll is really driven by those actual that are turned in. at least in this report, it's an increase. do we need to do more? absolutely, and we need to make sure that congress does work with us. this has been in spite of congress not being willing to work with the president. >> madam secretary, jim cramer. the other night governor romney talked about creating 4 million jobs by embracing an energy
independence for north america. i have the ceo of the largest pipeline builder on my other show "mad money" last night. he said 4 million is reasonable, but the federal government is not being helpful. i know you favor all sort of energy, solar, fantastic. what do you say about the 4 million? >> actually, a say that we need to create more jobs across the board and particularly, highly skilled people to work in the refinery and production areas where we're finding more energy and we have to have a balance, so i'm totally for that. i encourage more a perennisship programs and training in that area. we have a high need for welders and people working in refineries and i'm all for paying for those jobs and looking at other alternative forms of energy and we have to have a balance of both. >> the unemployment rate falling below 8% for the first time since january 2009 and i'm sure the labor department was hearing about that this morning.
at the same time, can you tell the american people that this 7.8 number marks the turnaround that we have seen the worse when it comes to the labor market. i would say we still have a ways to go and we have it well below 12 million and we have to continue on the path that the president has taken us down and this is in spite of the resistance of members of congress. i am hopeful that we'll see some movement on creating tax breaks for the middle class, especially those businesses and people in the middle income area and see the refinancing of our mortgages so people can be secure in their homes and know that they won't be thrown out into the streets. >> so, bakley, for you vooers out there, for voters out there who grab on to the 7.8% rate and say that is a bright spot, you are saying, be cautious. there is still a bumpy road ahead. >> we're on a steady path, but i would say the president has laid out some very good choices unlike other individuals and i
would say that this has shown us already 5.2 million private sector jobs created. we still have more work to do so let's look forward to more work toward getting the congress to work with the president and getting everyone working as a team together on making sure that people get those jobs. >> finally, before i let you go, you say skepticism over the numbers are lewdious. you say you're insulted. is there a danger, you believe, when large sections was country don't believe the data. not that it's ever been considered gospel, but when you have disbelief how much danger is embedded in that? >> i will tell you that we look at each report differently. we just saw revisions for the last two months and this happens. i mean, these are estimates that obviously, the bls puts out. they do the best calculation, using the best measurements and tools and we've been using them for the past 70 years. we haven't changed anything and the information that i received
is given to me by our professional, civil service staff in the bls. >> madam seas. i very much appreciate your time on a busy day. hilda solis joining us from washington. jim? >> i think you have the payroll processing to tip co or sap and we can get it daily. you want to take it out of the realm of questioning and if jack welch saw it was from sap. >> don't you think it speaks to the fact that americans don't see the progress so they think the economy is bad and not showing signs of a turnaround so they do cast this as a shadow. >> we're looking at twitter and we're looking at tweets from well known business people and pundits. i don't know how mc's going to view this. i have no idea. >> you think it's a purely political thing? and the confirmations that jack welch is seaing i don't see the signs here from a 7.8% here from
an 8.1%. >> i don't see it. he's a strong mitt romney supporter. >> true. >> data is wrong for everybody? and by the way, when people see the 7.8%, whatever side you're on tomorrow in the newspaper or today on the internet they are not going to be thinking about well, how does the bls actually do that survey and how does all that work in the headline itself is probably all they care about. >> i have people call for example my job because i said the bls numbers are honest. he should be fired immediately. >> i know chicago will disagree with me, certainly, and you. >> i should be fired because i trust the numbers. great. that's a firing offense in this country. >> it was great working with you. >> i'll see you at the pittsburgh steelers-eagles game. i'm taking on sports commentating. no politics in that. let's get to what secretary solis had to say about the jobs numbers. let's go to rick santelli at the cme group in chicago. >> thanks, jim.
i want to ask you a question, jim. i thought the team did a very good, very aggressive interview yesterday with meg whitman. my question to you is right before a big earnings release, if all of a sudden hp would have sold 50 times or 100 times more computers or printers would you have questioned her about that a bit? >> the private company that violates sarbanes-oxley? i'd be all over it. >> okay. just wondering because i thought the interview style with the labor secretary was a bit different. i would never send a tweet like jack welch and i respect jack. he's a great guy. that's why last month i said it would be below 8% before the election, that's why i is said it. i don't say things i can't prove. that was my prediction. i'll leave it at that. i'm an apples to apples guy and i've always looked at the establishment survey and it was up a bit over 100,000.
the household survey has always been my favorite and i don't like when people dial up whether it's a isses issing who will be the next president or how many jobs and if you want to go to that universe, there are plenty of things online that will give you the difference. a lot of people are selling things on ebay ask they're probably part of the over 800,000 number and it's not the kind of jobs i want, but i can't prove that it was fudged. i do find that that's the common question on the trading floor. it is what it is. i'm on record last month saying below eight. if you looked at interest rates, they all popped and i found fascinating. we didn't see a pop in the dax stock market based on the ecb and their press conference, but boy, everything around the world popped when we hit our release of that number at 8:30 eastern. back to you. >> thank you, rick santelli. >> this is so hot. >> it's very hot. >> yea. >> we believe in the number you're obviously a card carrying
communist. >> rec was veick was very reaso there. i think it makes sense. >> if i thought she lied about the number of course, i'd be all over it and the implication that maybe i should be all over madam secretary. >> i don't know? >> i don't know. >> listen, it's discourse. >> exactly, discourse. >> zynga shareholders not in a playing mood this morning and the stock plummeting on the gamemaker's warning and we'll talk to the analyst who lowered his price target to depths you might not believe. exactly one year after the death of steve jobs we look at apple co-founder's legacy and how much of it has lived on at the technology giant. >> as we head to break look at the early movers on wall street being led by avon. andrea jung is out and the stock is up. up. a short word that's a tall order.
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up 28%. along with lifelock's decline. >> due to market conditions and after fenner, jim, my question last night was what's up with the bear market and fund? anything involving fund? >> you don't think fleet management is fun, carl? >> i disagree. bouncing around the 52-week high? >> good comeback. >> october has been more kind than net flicks. the stock surging more tan 20% this week. first -- >> coming up, with all of the focus on jobs today, let's put jim cramer to work. his six stocks in 60 seconds is up next when "squawk on the street" returns. i'm only in my 60's...
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in the next hour, goldman sachs chief economist, the president of kmart and we'll look at how investing in apple changes lives, free at-home investors who share their hopes and fears online will meet each other on television for the first time. back to you guys. it's time to make your way to post 9. "six in 60," six stocks in 60
seconds. >> i like this g stock, it goes to 35. >> you can't kill this thing. this is a cloud play. i don't want to short it or sell it. >> family dollar, upgraded to buy, credit suisse some. >> this is a play on food stamps. governor romney is right. they brought in frozen food cases and they're doing well. >> they raise price target to pier 1. >> i spent so much there last saturday. >> there's a great article about meningitis in "the new york times. a competitor, there are problems with contaminations. regeneron will go high or this. >> and calling a dead-cat bounce on. >> every cat has its day. >> what's coming up today? >> gold. we're going gold, gold, gold. we have a terrific executive and sandstone is the way to play gold as we go to 2,000 for gold and 1800 is the next stop. >> 1785 right now as i'm looking
and this sunday, eagles and steelers. >> i don't know, man. people are starting to say that the eagles could be an upset. >> yea. >> i say dream on, and i like the eagles. >> have a great weekend, jim. see you next week. >> what does this morning's key job numbers tell us about the stock? an interview with jan hatzius from goldman. hi. i'm henry winkler. and i'm here to tell homeowners that are 62 and older about a great way to live a better retirement. it's called a reverse mortgage.
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the street." let's get the road map for the next hour. in case you haven't heard, it's jobs friday. we have to kick it off with the shocker of an unemployment rate falling to a 44-month low. 7.8. below 8% for the sister time since january, '09. we'll talk to goldman sachs jan hatzius. he's here. shares of zynga hitting yet another new all-time low this morning after cutting its full-year outlook and dragging facebook down along with it. so is this the start of an even begger social media slide. >> today marks the one-year anniversary of steve jobs' passing and we're taking an
in-depth look at the passing and we'll tack at the way we forever communicate. >> the non-farm jobs added last month. the big surprise, of course, coming from the unemployment rate falling to 7.8%. in just the same ways it wouldn't be christmas without santa, it wouldn't be jobs friday without bringing in our good friend steve liesman with his analysis of his figure. >> was there an analogy to santa, simon, that i should know about? >> i'll come back. >> simon, this sometimes wide disparity. it's happened before between the two different jobs reports and the establishment survey which gives us the payroll numbers and household survey, sparking a debate about just how strong is the labor market right now? the answer, not as strong as portrayed in the better survey and not as weak as the lackluster one. here's the payroll survey. 114. that's not a great number, but if you look at the revisions, they revised it up by 66,000 and
that's not a huge revision and you look at those revisions to see which way you might go in the future. household survey, jobs, 873 and a huge surge in part-time for economic reasons and mark zandi points out this has happened the last three septembers, so we could be dealing with a seasonal issue and on top of that you have 118,000 self-employed not counted in the payroll survey. here's what jim o'sullivan said. while the size of the decline in the unemployment, some improvement is consistent with the revised payrolls data. i guess the whole point of this report is everybody, take a deep breath. here's other stuff that's pretty good inside the survey. after declining for a very long time, we have a tick-up in the participation rate. the 63.6. that's good, but it was well above 64 and 65. we're not all that excited about it and it ticked up and that's inside the weaker payroll survey to 34 1/2 and average hourly
earnings up. overall, the number is getting more play than it's worth, folks, because what is it? it's the silly season. the political hormone is taking control of otherwise intelligent people's brains that makes them say things and analyze data in ways they wouldn't. we have average monthly job growth of 145,000 and the unemployment rate is coming down slowly. there will be no change in fed policy. carl, i guess that's the charitable way to put the comments that have been made. the uncharitable way we talk is irresponsibility, but i'm not going go there. >> it will last 32 more days. >> and then we all get back into analyzing data. by the way, the market's getting a twofer here, right? it gets the fed policy because that's on track regardless of the numbers -- not regardless, but in the face of these numbers here and then you will also get the better job growth. so you get the economic plus you get from the jobs and you have the fed with its easy policy right now. >> steve, thanks so much.
crazy day. good to talk to you. steve liesman back at hq. we'll get analysis on that report, and the chief u.s. economist from goldman sachs. jan, always good to have you. welcome back. >>. >> explain 7-8. how does it get to 7.8? >> there was a big increase on household employment. some of it was government and some of it was involuntary part-timers and that takes the shine off a little bit and nevertheless, each with those adjustments it was a good employment gain and then that basically gave you a big breath in the unemployment rate. now, the household survey is very noisy. you probably want to put less weight on what you see in the household survey than what you see in the establishment survey, but nevertheless, overall, it's encouraging. >> of all of the things to be encouraged about what leads the
list? revisions? earnings? '06 was not that impressive, right? >> i would say the household, survey employment gain, each though you want to take some of that when there are part-time issues and something like that, there is something with that. revisions are a bit even though that was entirely in government and that doesn't tell you as much as business conditions and increase in the workweek and the increase in hourly earnings is also pretty good. >> it was a historical indicator for future job gains if we take a look past recoveries? >> i don't think it's a leading indicator. i would say it's just an alternative measure of what's going on, and you want to put some weight on both the household survey and the establishment survey though probably more on the establishment survey. >> your colleague came out with a 2013 year-end target of 1575 which would be quite bullish considering he sees the s&p 500 finishing this year at 1250.
so that would be quite an upside. does your economic forecast in today's jobs data, does that support such a move? >> think the baseline for us is essentially more of the same, but in an environment in which earnings are still pretty good and interest rates are still very, very low. i think the baseline forecast does support higher equity prices from here. i do think it's quite bimobile. i think that the alternative scenario to the baseline is one that's significantly worse because we do get a much bigger hit from the fiscal side, but on the baseline, it's supportive. >> i'm really quite confused here and the economy created 114,000 jobs and there's so much noise about the various aspects of the survey. and i'm not sure. 114,000 jobs create side bad, isn't it? that's very, very disappointing. >> it's lackluster, i would say. >> don't we have to -- typically say we have to generate 200,000
to deal what's happening with the population. isn't that usually where we are? why are we not there today? >> to keep the unemployment rate stable you need about $100 and the participation doesn't change. anything over 100,000 will push it over time. under 14 it would be extremely slowly so that is bad and, you know, it's an aspect or -- another illustration of how disappointing a recovery this has been. today's report changed that. >> are we clear on what this means for the fed? when the fed says we'll keep pumping away and buy mortgage-backed securities and 40 billion each ng mo, will that do that forever on the number of jobs we create or the unemployment rate? will it do different things here? we're seeing a disparity. >> i think both will be important and over team they will also generally move in similar directions.
on a month to month basis, you can get huge dispareities and ultimately they're measuring the same thing and if you take a six-month horizon or a 12-month horon you'll have a lot less disparity. >> what is the number, you know? for 145,000 on average a month and we've got qe3 and rates staying low through 2015, what do you think the number is that changes that approach? >> how quickly does the -- does employment have to grow for them to pull forward the first hike in the funds rate? i think you'd need to see well above 200,000 for a long time. >> that's a long time. >> if you have more than 200,000 jobs over a year's time, then you would probably pull it forward. the mid-2015 date will be fairly sticky and they'll be reluctant to pull it forward especially because they've indicated now very clearly in the statement that they want to see stronger
numbers and they expect to keep the funds rate basically at zero even if you have a period of stronger numbers. >> if there's nothing that you saw in these numbers and the revisions and we saw the notes yesterday from the fed. >> there's nothing that you -- that would have you question whether they should have gone ahead with qe3? >> i think it makes sense in an environment where you're missing on the employment mandate to provide more stimulus. i'm somewhat skeptical about the size of it, but i do think there's a positive boost. >> you were early in calling in qe3. >> you stuck by it and we were skeptical and you were right in the end and there were others that had some version of qe4 was not imminent and probably coming. are you there yet? >> it's hard to decide what that means given that qe3 is open ended and at the moment there's no sign that it's going to stop,
but of course, there are other things that they can do if they still want to provide more support, and more explicit commitment to a particular employment rate and an evidence rule. i think this is pretty civil to a rule already and we're not quite there and if you want to draw substantially more, you can go to a nominal gdp target and there's some good arguments for it. it does get more play than it did a year ago. >> you're not calling for it, insly? >> think it's a very worthwhile thing to think about, but i'm not forecasting it at this point. >> before we lose you, jan, i just want to ask you about oil and what is going on there. the effects on the american economy, because on the one hand you have the headline rate falling quite dramatically during the course of the week, but we have fallen and obviously that means that you're keeping more demand in the united states and it's not being sucked out to oil imports. the converse of that is on the west coast and you have gasoline prices rocketing. what is going on at the moment?
what is happening to demand in the economy as a result of the basic raw material? >> overall, while we've seen quite a bit of volatility and energy prices and gasoline prices as well as oil prices this yore, it hasn't been a major factor one way or the other. there's been a short-term boost and short-term restraint and it wasn't like 2011 when the $30 increase in oil prices in the early part of the year was the main reason and one important reason why especially the middle of 2011 turned out to be so disappointing. >> jan, always good to have you. thanks so much for coming by. jan hatzius with goldman sachs. >> with the s&p up half of 1%. let's go to courtney reagan. >> thank you very much, david. take a look at shares of buffalo wild wings off the highs of the day and still up firly substantially and we look at the broader index up 4.25% and this
getting two positive notes from two research firms. also wedbush upgrading from outperform to neutral. stable costs and they're shifting the menu prices and charging by the pound and it's football season, folks. go to bwld. back to you. >> thank you, courtney. kmart and sears stepping up ahead of the new shopping season with a new plan to lure shoppers. we'll be joined by the president of sears and kmart in a very rare interview. perhaps you don't want to bet the farm on this one. shares of zynga hitting another new all-time low after lowering its ref now outlook for q3. after several executive departures and a big miss on q2, what is next now for zynga? ♪ ♪ the jobs report is out. >> september non-farm payrolls increased by 114,000 jobs. did you nail the number? if so, you'll be staying dry in
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♪ ♪ >> reporter: it is a life and a legacy that may go unmatched for generations. >> a truly magical and revolutionary product. >> reporter: steve job introduced one brainy, innovative product after another. consider, 244 million u phones sold, 131 million desktops and laptops, 84 million ipads, 350 million ipods. >> it's unbelievable. >> reporter: and while at apple, jobs had his hand in every part of every creation. >> steve jobs was not really an engineer and not really a programmer, but he was very hands on from the design to the execution to what the menus looked like to the fonts and the colors. >> i didn't want to tell you i had dean martin on my ipod. >> reporter: he had a whole new way to appreciate music using software he designed at a price he set. >> he wanted to sell songs, not albums. selling songs in many respects was, you know, herretical.
>> reporter: job, the man behind the personal computer, the man who changed mobile communicat n communications and digital entertainment may have just been the greatest retailer of all time. >> apple sales are the single most profitable store on a square foot or cubic foot, any stores in the world. >> reporter: and while some question that jobs' legacy is enough to carry the apple brand, a year after his death, the company's stock price has nearly doubled. >> they're doing something right. on the other hand, without their sort of visionary, charismatic pioneer, other business factors might weigh in and interfere with design and usablity. >> reporter: but for the millions of mac faithful, jobs will ultimately be remembered as a rebel, an icon and a genius. >> had the courage to follow your heart and intuition. they somehow already know what you truly want to become. everything else is secondary. >> hard to believe it's been a year. a lot of discussion today, guys about what kind of leader you
need if you run a consumer and technology company. you look at hp's troubles. some say you almost need a dictatorial manager because of the bets you have to take and the speed at which you have to move and the verdict is still out as to whether tim cook will be that guy. >> he's not steve jobs and he's obviously a very capable executive and the company has executed extraordinarily well since the time mr. jobs passed away. steve jobs was a unique figure, no doubt about that. >> as you move farther and farther away from steve jobs' death and the pipeline of what steve jobs left behind gets shorter and shorter, you have to wonder what sort of price rise in the stock will continue and evaluating, apple stock will deserve. >> you will see the legacy now focussing on the consumer and i think it's only now showing up in certain industries. for example, i covered "travel and leisure," this airlines
inside the aircraft cabin. that's driving that forward. hotels haven't done anything. they haven't done virtually any changes for 20 or 30, 40 years. they're looking at great intensity at the detail of the consumer experience because what you get with apple is the price for the executive and it's domination of the industry and vast returns simply by dreaming of where the consumer would like to go next and that's the difference that we've not yet felt across the economy. >> for some apple competitors, it's maybe too late. >> if airlines can get those seats buckled down. >> let's start with the basics. i get you. >> kmart, upping the ante ahead of the holiday shopping surge. sears and kmart's executive vice president will be here to talk about holiday incentives next on cnbc. plus attention all you apple fanatics, we might have found the most dedicated group of apple supporters around. we're going inside thea secret
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research firm shopper track, seese and kmart are gearing up with the holidays for a new layaway home delivery service. ron boyer is executive vice president, chief marketing merchandising officer and president of sears and kmart and joins us for a first on cnbc interview. great to speak with you. >> great to be here, thank you. it seems like retailers are moving up their plans for a layaway program and loosening terms to make it more friendly to the consumer. what does it is a about the u.s. economy right now? >> think consumers are in a tough spot and i think retailers like sears and kmart are using tools like layaway which has been a tradition at kmart for over 50 years now. they can give unique benefits and powerful financial incentives and been fits to their customers they'll do well. >> how much more in sales are you anticipating in terms of
consumers saying i am going go ahead and deciding that i will buy this for the holidays ahead of time? >> what we do know is that a tool like sears and kmart gives the financial flexibility that they may not had. >> customers that may have had credit card before use it as a financing tool and they pay over time. those customers are more valuable. they buy more and at the end of the day they become more loyal to the brands. >> is there an estimate, though, on how much in sales you'll be able to pull forward because of the elimination of the fees? >> we think that these -- we know these customers buy materially more than customers that don't use the layaway program and we don't disclose what those estimates are and we think the program is very strong, not only for our custome customers, but for sears and kmart. >> what does it is a what you think about the u.s. economy that you're willing to exlimb nate some fees, because there is
the risk that some of these people don't pay you back. >> there are a certain number of customers that don't complete the program, but by and large it's a very good program for the customers because as sears and kmart we have thousands of items and no price limit that you can put on layaway and you can put literally anything on layaway. the benefit to us way outweighs the risk. >> did you see this article in forbes the other day that suggested that you should ditch apparel and categories because they are basically a money pit and you increasingly focus appliances, tires and tools. >> our members and customers come to sears and kmart for a complete experience. we're seeing our apparel business in footwear and businesses get stronger and stronger. we have great brands and exclusive brands like kardashian, joe boxer and great national brands like levis and
u.s. polo for our customers. we're seeing that business get stronger and we're seeing that business get very, very relevant to our members and our customers that know us for hard lines like kenmore and craftsman are more and more appreciating the quality of the apparel for the quality we bring into the store. >> we're still trying to digest yesterday's same-store sales number, but given how much uncertainy is between now and real holiday season, how aggressive are you being with inventories going into that? >> i think we're making bigger bets on the brands that matter and from the categories that matter. our members are telling us through our membership, our shop away membership program what they're looking for and we're making much bigger bets on those categories and we're getting smarter with inventory. overall, like many retailers, we're taking a little bit stronger position on things that we're very confident on and managing risk on the things that maybe we're less confident on,
but we are optimistic for a strong holiday season because of things like the layaway program and things like the shop rewards program which is becoming a stronger and stronger mechanism to communicate with our customers and show them value. >> ron, one of your criticisms of your chairman, eddie lampert, has been affecting the customers experience. do you think that's a fair criticism? have you been taking steps to perhaps make that a better experience overall by simply improving the look and feel of the stores themselves? >> overall, i don't think the criticism is fair. i think we've been investing a significant amount of money on the experience and certainly focused on technology. we recently announced the addition of thousands of ipads and mobile check out capability in our stores. we've invested significant amounts in the membership program and customers more and more are buying on the phone, online and in-store and want an
integrated experience and there's been significant material investments in there and we announced the shareholder meeting this year and the program in the sears stores to refresh stores, and that program is rolling out now and it will continue to roll out next year. so we're really focused on our members and we're focused on investing on the things that drive their shopping behavior which is more and more integrated shopping experience. for example, our customers can buy at a sears website in five minutes and pick it up at the store. those kinds of investments is what's going to drive retail in the future. >> ron, great to speak with you. ron boire, president of sears and kmart. >> thanks, folks. >> next, you can argue it's a secret society. certainly it's a society that revolves solely on sitting at home, investing in apple. what is it all about? we're talking about the invitation-only apple members next. ♪ [ male announcer ] how do you make 70,000 trades a second...
verizon. good news in what's been a tough week for ipos. fleetmatices group up 30% in the wall street debut here. >> apple remains a very unique investment. it's pulled back a bit since hitting their 700 a share, but as you're aware it's delivered extraordinary gains over the years. for some people it is perfectly logical to devote increasingly large parts of their lives to following the stock. apple sanity is an invite-only online group of 600 retail investors linked together around the world. three members join us now in manhattan, david foal, an advertising art director, in nashville, desiree owen who likes to hunt and fish and in new orleans, vietnam vet j.b. neighbors, a former military intelligence official and they're meeting, many of them for the first time and learning each other's real name. desiree, you're the founder of
this group. it says here that you first bought apple when it was $20 a share. why the need so many years later to found this online community? what does it give each other? how do you feel about it? >> actually, we met each other first on a public apple stock message board and migrated over to a new site called investorvillage.com which allowed us to create this private community. being private allowed us the freedom to exchange information, ideas, even personal information thatting for thor bonded us as a group. we have such a great depth of knowledge and information and experience from all walks of life that i think, in analyzing the stock and the company, makes us the envy of most wall street firms, i would suppose. we look at ourselves as our own boutique firm. >> david, full trance parnesy here. i met you socially in manhattan.
one of the things that astounded me is the degree to which you really are only interested in apple. it is a one-way bet for you and it is important in the context that you've been as an investor. you got burned in 2000 on dot com and in 2008 diversification failed to save you. so you feel comfortable in just one stock. that's a very dangerous position to be in, isn't it? >> no. i don't think so. as warren buffett said risk is not knowing what you're doing and by being a member of this investment group i have access to firsthand information. in fact, i usually get it a lot sooner than people might get it trying to sift through the endless noise of blogs out there, so i'm able to make an informed decision. as an investment group it's given me self-confidence in being able to stick with apple. >> how do you know that the information you're getting is accurate? >> it's being vetted by dozens
of people that are members from all over the world and some of them are technical. some of them are -- these are a pretty varied group, a pretty educated group of people and they're pretty skeptical, and collectively, it works, that's the proof. >> j.b., you're a successful investor and you have two groups, one in louisiana and texas, but you're not a long-term holder of apple's stork. what is typical on the site and how are you playing it at the moment? >> well, i've been holding apple or derivatives since about 2006. i found it's a unique story and many of the analysts on the street just don't grasp the broad nature of apple's product line and where it's going. right now i am holding a few shares and looking to for the
earnings announcement which will be on the 25th of october, then it should be a very large christmas quarter. >> so, j.b., do you think the stock is going higher or lower from here? >> like all stocks it will go up and down, but long-term the stock is going up from here significantly. >> to where, do you think? to where? $1,000? >> oh, lots of things can happen. i would guess at least $900. >> desiree, where do you think the stock is going from here? >> oh, i think it's definitely going 1,000 by 2014. the way we're successful in trading and investing apple and we have our different methodology in doing so. some people hold a large core position. some people just hold their stocks long, for many years and
others trade around it using options. there are any number of ways to achieve success with that, but i don't know if you're familiar with the phrase that, you know, if you don't know what you're doing, at least do it quickly? we think wall street trades apple that way. >> david, don't you live in fear that apple could fall from here? >> what i do is when i get a little nervous i just look at the numbers. the annual income growth, average, over the last four years from apple is 66%. so as long as the apple business model stays intact which it seems to be, i see no reason why it shouldn't continue to grow. even half that, that would be phenomenal. so in my opinion it's got -- the short term, it trades on technical analysis. on the long term, it trades on market growth, and i think the market growth, particularly in
china is just beginning and it's starting to ramp up. >> desiree, i know we persuaded you to go to nashville, on the basis that you could pick up an iphone 5. did you find one? >> unfortunately, no. i visited an apple store yesterday afternoon and they get a shipment every single day and there are people waiting in line at the door every morning and the shipments are all sold out before 11:00. >> it's great to meet you all. >> thank you, simon. >> good luck, guys. >> thank you, simon. nice to be here. >> we have another market flash for you, once again. it's within the food industry. courtney reagan, what's the name? >> thank you, david. i'm a little hungry this morning. it's dunkin brands. citi says they see them tracking above consensus. consensus is 2%. citi thinks they're looking up 3%. as a result, shares are higher, carl. back to you. >> thanks so much. let's take a quick check of the markets. the dow sitting near its highest levels in almost five years
since december 2007 on the back of that strong jobs number, perhaps. s&p not quite at an intraday high for the year and 1469 and got to get to 1474.51 to set a new interview intra day high for 2012. when we come back, more pain at the pump and up next we'll find out yet perfect storm will be brewing in california. a state that refines its own gasoline and why stations are closing their doors. that's next. if we want to improve our schools...
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up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again. >> back to levels we haven't seen since december 2007. the banks largely leading the way as well as intel up 1.5%. gm up almost 3%. >> yea. >> zynga is one stock that is not doing well, hitting a new all-time low today after the company lowered its full-year outlook for the second time this year. shares are down almost 80% since the ipo back in december, but how much lower can it go?
>> ken cena is with partners. he lowered his price target to $1.70 this morning. $1.70. ken, how does the story end? >> there is option value and we'll we keep the underweight here we're not advising clients to short it. we're basically saying that, look, the stock is basically trading for close to where it's cash and building assets are any there's optionality here and the transition will continue to be rough. >> in terms of $1.70 price target in the underweight rating, what are some of the things that zynga can do at this point because it does seem that perhaps there's an inflexion in the business where customers aren't being drawn to the games as much and they're not engaged in the games as much. how can they turn that around? it seems so fundamental. that's exactly what will change it for us. if you saw one game that was a hit for them that was translating for mobile, i think we'd feel completely different about the stock.
those questions are unclear and what investors want to hear is what is zynga going to do with the roughly $2 in cash until they can provide more detail on that. we assigned a 50% haircut. so we will see what happens. >> could somebody come in and buy it, do you think? it's lost a lot of top executives recently, as well, to add to all of this. >> i think so because the question is what are you inheriting? they do have some of the major leading games in terms of overall engagement and time spent, but you would be inher inheriting the company with pretty rough morale issues and given the transition that they're going to be going through, i'm not sure that gets better any time soon, but that being said i think it's fair to assume that investors will agitate to see what can be done here given where the stock is trading with the deconsolidation with some of the gains. is there a potential for a dividend here and something that basically gets the company to answer a few more questions.
>> so, i'm sorry, ken, why would you not short it at this stage? why can you not have that solid a conviction? >> well, we've had an underweight on this stock since, you know, it was up in the 14s. i think we've had solid conviction here. i think where we are now is we are getting to a point where you can argue some fairly justifiable floor values. i think the cash is some area where they have almost $2 in cash and building assets. if an investor is comfortable giving you full credit for their cash there's probably an option for them to want to buy. i think for us we don't want to make a recommendation that people hold the stock simply on that basis because you do have to acquire the recent games they have acquired and have not proven successful in terms of monetization. >> ken, in term of the impact on facebook. zynga has important revenue stream in terms of the payment services and how does that flow
through? what amount of the revenue are you discounting for facebook? >> we did lower our facebook numbers on this. one of the things that we're a little bit cautious about here is zynga also lowered its guidance last quarter for the year and that read through to facebook was not perfect and facebook has been able to resome of its reliance on zynga and i think, nevertheless, i think just for the sake of being conservative, we did feel it was best to lower our estimates for facebook in the payment line both for this year and next. >> given their inability to retain, i guess, some position in the gieft here, i have to imagine marketing costs go up and that cash burn accelerates. is that your forecast? >> it is. >> that's why we reassign very little value and it's 30 cents per share and we offer value in
terms of online gambling. we've done work in that area and feel the prospects there are fairly dim, as well. >> sorry, ken, go ahead. >> i was just going to say so i really feel that what you're buying right now is the cash and building assets. >> last question, ken. is this, do you think it's a zynga-specific story or online gaming sort of story because we are seeing a glee mobile trade down sharply on the back of the zynga news? >> i think it's a little bit broader than just zynga because i think some of the pressures that they're really facing is users moving away from most of their game activity from simply desktop and mobile where it's much more competitive and given that zynga is the leader in the space has given it out and you can draw it to other companies, as well. >> ken, we'll leave it there. thanks for your time. it is down $90 a barrel and there's certainly more pain at
the gas pump. california might be running short on gas these days continuing with problems from the chevron refinery and other refinery issues in california and jane wells is at a gas station in northridge, california. is it open, jane, because i hear some gas stations are actually closing. >> yes, they are and they're lining up at this gas station this morning like they're selling iphones, trying to get in while supplies gas. the cheapest price is $4.42. i snapped a photo. gas is now topping $5 a gallon in many places. they're calling it a perfect storm. refinery -- california refines its own special gasoline. you've got these refinery problems, you mentioned and issues are happening at the same time that the state is transitioning over to mandated winter blends and the result is record-high prices and that also means some stations are running out of fuel because they don't have it.
they are shutting down and it's concentrated in southern california. costco tells us 16 of its gas stations have had to close for now. that's 40% of the stores stores have in southern california including in the san fernando valley where they said they don't know when they will be resupplied. this is the life blood. >> we wanted to get cheaper gas prices, but turns out there's no gas. so we got to go pay 4.45. >> i've never seen this. i'm very upset. can't do anything about it. >> reporter: this arco station and the man says he's never seen anything like it. >> we have no control. suddenly they give us a notice that the price is going up and today, half an hour ago i have a notice that it's going up 20 cents. in a couple of hours i'll be around 5:00, i'll be out of gas.
5:30. >> he did get half a shipment at around 3:00 this morning. he thinks it will be enough gasoline to keep this place open at 4:00 this afternoon. wholesalers are having significant trouble getting unbranded gasoline, that is the first to dry up in a crisis like this. they have asked state air quality regulators to waive restrictions so they can get gasoline in the system that's okay in arizona or nevada but not allowed here. give them a break. costco hopes to re-open six of their 16 stations. no one knows how long it will take for this work out. we're very vulnerable right now. back to you. >> it seems obvious you need a strategic gas reserve. >> reporter: this is california. perhaps, but this is california. things are done differently here. we have our own special gas from summer blend to winter blend and
during that transition period inventories are always very low and at the same time now you got an exxon refinery problem, chevron refinery problem, a pipeline issue. supplies are slowly coming in. the situation, though, may take a few weeks to work itself out. the question is if you get gas over $5 a gallon, how long until that goes back down? >> i love that line. this is california. thing are different here. isn't that truth, jane. thanks a lot. jane wells in north ridge. today marks the one year anniversary of the steve jobs passing. still to come a man who wrote about jobs and his unsurpassed accomplishments at apple. jim stewart from the "new york times" will join us live. rick santelli is working on the next hour of "squawk on the street". >> we'll have to talk a bit about employment but not in a way that anybody would suspect. us and them, one of my favorite pink floyd songs. in this context us and them is
canada versus u.s. canada had some employment data and actually i'm optimistic about the employment scene down the road but not so much from our data. more from our north of the border friends and trading partners and we'll talk about that at the top of the hour. boring. boring. [ jack ] after lauren broke up with me, i went to the citi private pass page and decided to be...not boring. that's how i met marilyn... giada... really good. yes! [ jack ] ...and alicia. ♪ this girl is on fire [ male announcer ] use any citi card to get the benefits of private pass. more concerts, more events, more experiences. [ jack ] hey, who's boring now? [ male announcer ] get more access with the citi card. [ crowd cheering, mouse clicks ]
get a market flash and go to courtney regan. >> thank you very much. take a look at shares of pure one. we're seeing them sit at levels we haven't seen since 2004. positive comments are out. the investment story is only just beginning. e commerce expected to drive sales. op op oppenheimer has increased their price target. >> it's the end of an era over at olive garden. >> when did you learn to be so generous. >> guess it runs in the family. >> olive garden, when you're here, you're family. >> after 14 carries the garden is scrapping the when you're here family slogan. parent restaurant is looking to
a new tag line and it's called go olive garden. it will have more nonseafood fare. twice in one week. >> the stock holds in there despite this has performed so badly, the data is so out of line. the share purchases are suspended. got a lot to do with people having to benchmark into the industry. you see that actually, the stock market time and time again in this market. >> well today, of course, marking the one year anniversary of the legendary steve jobs passing. still to come a man who wrote about jobs and his unsurpassed accomplishments. jim stewart from the "new york times" will join us live. very in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level.
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we should note we're awaiting president obama's address speaking this morning in fairfax, virginia. we expect him to mention the jobs number today. the unemployment rate falling to 7.8%. first time below 8% in about four years. when that starts we'll bring it to you. in the meantime -- here's what you missed earlier on this
morning. >> welcome to hour three of "squawk on the street". here's what's happening so far. >> the thing is that you got to play this in the short term. equity market looks great. risk on is every where. go out the beta curve. trade. >> so do it. >> you can create excuses for these guys if you want to, but the fact of the matter is every single jobs bill the republicans in congress have voted against. >> september nonfarm payrolls increased by 114,000 jobs. 7.8% is the new unemployment rate. >> the report is good. hours worked up. pay up. july up. i'm not political. trying to make money here. >> when you play -- >> past tens? >> then we just -- i have like seven people who might draw
something from three months ago. it was bad. it was a fad zynga might be a fad. >> unbelievable jobs numbers, these chicago guys will do anything -- can't debate so change numbers. what do you say to him? >> i would say that i have the highest regard for our professionals that do the calculations. they are highly skilled economists trained in this area. >> almost made to it the end of the week. good friday morning. check on the markets as we continue to see the dow touching its highest intradie level since december of 2007. off the highs here but still up 63 points. s&p is about seven points or so away from its own intraday high for 2012 and the nasdaq with one of the longest winning streaks up 11 points as well. fleet maddox making its trading
debut after pricing at 17. high end of the range. stock is trading sharply higher. hp trading in the red again after getting hit with a double dose of downgrades. taking the stock from neutral to buy. and downgrading hp from hold to buy. one of the worst weeks for hp. time for the road map. jobless rate falling below 8% for the first time since january of '09. how will the romney campaign respond? a year ago today the tech world lost a legend, steve jobs passed away. we'll talk to jim start your about steve jobs legacy. and we'll tell you how much zynga has lost and should other social media executives be worried. speaking of which, we'll start with stock under serious pressure today after the company slashes it's outlook for 2012 for the second time.
julie boorstin is here with more with that. >> reporter: the big question is it game over for social gaming, zynga's warning wall street ahead of it's october 24th earnings announcing poor third quarter results. zynga shares plummeting today earlier down more than 20% now off by 17.5%. the game maker slashed about $100 million from its estimated bookings for the rest of the fiscal year. zynga's biggest investment omg pop isn't paying off. zin zynga is writing off about $95 million. the problem is users are shifting away from social games on the desk top to mobile games. new games like chefville and e the ville are drawing fewer than 500 million gamers. this is hitting facebook stock as well.
facebook shares are trading down more than 2.5% since zynga was responsible for half of their payments. according ing ting to jpmorgan claire lowered their estimate. mark pinkus wrote a blog indicating he'll slash jobs in underperforming areas as the company shifts its focus more to mobile games but said mobile is the future. mobile is a much more competitive landscape. >> more competitive and left profitable at least for now. we'll continue to watch it. unbelievable story at zynga. >> in a statement on the jobs report this morning, governor mitt romney said this is not what a real recovery looks like. we're going to hear more from the governor later this hour as he speaks in virginia. in the meantime we're joined by romney economic adviser, ceo of cke restaurants which employs
about 120,000. andy, good morning. good to see you. >> good to see you too. >> i don't need to tell you about some of the, i would call it widespread spentism about this 7.8 number. how far is the romney campaign going to go in that direction? >> we're not going to go after people trying to mess with the numbers. i think that it's a number that gives the president a talking point. i think some people out there will feel good he has a talking point. in the debate, after that debate he needs a talking point. but didn't seem he was a bad guy, admonish like a bumbling guy. feel better that he's not talking about the altitude. in reality it really isn't a good number. we've set the bar slow for this president on economic issues, if you look, in october or september of 2008, if the president had said if you elect me i'll get the unemployment number down the number it's at when i take office or if he said
when he was trying to get his stimulus passed, if you agree to spend this $800 billion i'll get the unemployment number down to 7.8% by september of 2012 i don't think anybody would have voted for the stimulus or him. this is not a good number. we've had three months in a row. even if you look at the bureau of labor statistic numbers we had 181,000 jobs created in july. 142 in august. and 114 in september. that's a declining number. that's not a good number. look at this year versus last year this year we're averaging 146,000 jobs per month. last year we averaged 152,000. the numbers are not getting better. the numbers are getting worse. the only reason the percentage improved and the only reason it's comparable to when he took office is because the labor participation rates is near a 30 year low. >> andy, on that front, why not -- there's the participation rate. there's a large part of this 7.8 is due to part time jobs and i
don't need to tell you. >> two-thirds. >> how they define part time work. the revisions are about government adding jobs, not positive revisions to private-sector. why not go in there and say, you know what? not only is it not a good number your methodology makes it took better than it even is. >> we can say their methodology does make it took better than it is. they revised july and august today. the number is that showed a lot of jobs, the number that showed the 800 plus jobs is not the bls number. their number is 114,000. it's the household survey number. the household survey number is seasonally adjusted. teachers going back network. bus drivers. transportation was one of the things that was up. if you look at the 114,000 jobs, i think you're looking probably at a more realistic number of what's being added to the economy. if you look at manufacturing, manufacturing is down -- and this is important -- we lost 610,000 jobs in the manufacturing sector since this
president took over. we lost 16,000 manufacturing jobs just in september and if you look at august and september we lost 38,000 manufacturing jobs. if you look at the real unemployment number which is the u6 number which is under employment, it's at 17.4%. last month and this month. it's not a good result. it's not at that recovery. it's not a good number. it gives the president something to talk about which i'm tired of hearing about the altitude in denver so at least he has something else to bring up now. >> that's good, andy. now the one retort from their side which i imagine we'll hear, the biggest drop in the jobless rate whether you believe it or not in an election year since reagan was re-elected in '84. how do you respond to that? >> first of all you have to look at where the jobless numbers are. we need huge drops. now the 800,000 plus jobs number is something that -- whether it's revised up or down, i guarantee it will be revised. it's not a number we'll stick
with for very long. even looking at it, two thirds of those were people that took part time jobs because they couldn't find full time jobs. and the only reason the percentage is any good is because you've got so many people getting unemployment, so many people going on social security disability, so many people on food stamps that the number of people in the workforce is at a very low percentage. so when you say what percentage of that, of the workforce is unemployed you're going to come up with a lower number because you got so many fewer people. there's so many things here that are moving pieces. i think hat the american people need to understand this is not a recovery. these are not enough jobs to get us out of trouble. we're still in trouble and we need to have a change in the white house and we have a candidate who can fix these problems as you saw in the debate. >> finally, andy one last question on jack welch's point
of view. >> jar welch is very experienced. i don't believe that's the approach the campaign will take. we wednesday need to deal with the reality of the situation and not pick apart what the bureau of labor statistics or washington does. 23 million plus people are unemployed or looking for work. too many people dependent on government. people need jobs. we need an economic recovery. we have a president that can bring us an economic recovery. and i sure hope the american public sees it because we cannot afford four more years like the last four years. >> andy, thanks for your time. always good to talk to you. >> mitt romney will react to the jobs number today at about 11:35 a.m. rick santelli has been watching these numbers. what a day, rick. >> what a day is right. you know, just for viewers and listeners on satellite radio to understand, you know i always try to do a lot of homework so i try to go back and see how many
times we've had a jump month to month in the household survey, the one done on the telephone. it's happened a lot. this isn't unique. remember a month ago i said the unemployment rate would fall below 8%. that's all i can tell you with certainty, i was pretty convinced. we'll leave it with that. anybody saying anything else i would like to see their proof. it is what is it. but a couple of things to keep in mind. the 873,000, of course, the other rick santelli exchange we did qualitative versus quantitative. numbers versus survey. university of michigan or consumer confidence versus hard data. like the establishment survey versus the household survey. so, obviously, whether it's part time workers or whatever, all these issues may skew it but it's what is it. what i want to talk about, one of my favorite pink floyd songs is us and them. us is u.s. and them is canada.
isn't that haunting music. let's look at what's going on here. in the most recent read we created 114,000 jobs. 7.8%. this of course comes from the household survey. i've always liked to look at the establishment survey. our last month at 142, so a bit lower. that was 8.1. look at canada. remember canada, you know, you have to kind of adjust it. they are about one tenth of the population. they created 52,100 jobs. last month, 34,300. it's interesting because their rate went up from 7.3 to 7.4 they add ed 70,000 people in their labor force. this makes me optimistic. not so much this. not so much the 873. why? because there's good things going on in canada. job growth was broad based and i think, you know, our economy has a lot of positives.
the negatives are, whether it's the fiscal cliff, tax rate uncertainty that can be fixed easily. we do have an election coming up. but i think the unpinnings of our economy can do a lot more like canada without a whole lot of effort whether energy or retail in the end this number may be very strange but i still think canada gives me a bit of hope. back to you. >> the canadian number is one to watch. we'll see you in a few moments. we should mention the president is being introduced in fairfax, virginia. when he comes to the podium we'll take that live. in the meantime a quick break. we'll talk to the congresswoman trying to save you money on your insurance bill. congresswoman judy biggert will talk how americans are funding big bank bailouts after a quick break. [ male announcer ] at scottrade,
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since the passing of steve jobs a year ago today apple has become the most valuable company and shares have cracked the $700 mark. there's an apology. what would jobs think of today's apple and of tim cook's performance. joining us today is jim stewart a columnist with the "new york times," one of my favorite guests. jim, happy friday to you. thank you for joining us. >> thank you. >> so much talk these days about this notion the company is no longer leading but starting to tread water. their products are more incremental in improvement. they lack the cult of personality that jobs brought. how much of that is fair?
>> it's too soon to evaluate most of those things. you have to say in the short term tim cook has done a great job. there's been many milestones. it couldn't have been easy to step into the shoes of steve jobs. they have to stop thinking about what steve jobs would do. that's always paralysis. they have to chart a new course. the personality of steve was so intense but great in his strive for perfection. it was not great in his need for control. it was obsessive need for control. he was basically a walking anti-trust violation and the flap over the iphones reflects that. they tied unanimous fer ormapping product to the apple in an effort drol. that's the old steve jobs still at work and they need to break with that. >> steve wouldn't you know it the president talks right in the middle of our conversation. i'm going to have to let you go and hopefully we can restart this at a later date. >> that's fine. thank you. i'll defer to the president.
>> jim start your talking some apple. as we wait for the president to start talking about the jobs number we'll go to john harwood for a quick preview what his message might be. john is in washington. good morning, john. >> good morning. i think his message will be one we've heard from the administration which is first of all they are delighted by the news. delighted the rate is under 8%. delighted the august numbers were revised upward. but also have a tempered tone and say we got a lot of work to do because we do as one economic analyst told my colleague at the "new york times" earlier today this economy seems to only have three gears, slow, or reverse. it's not a good economy for president obama to be running with but this is good news. it was good news for the country that just a few minutes ago andy in his interview with you rejected the conspiracy talk about the jobless number which is a reflection of the disease in our political media culture. that was a step forward and the
debate we ought to have about where the economy is really going. the underlying reality of the situation. >> might have been a step forward, john, but another more cynical view might be that the jack welch, our former boss and a man we all like may be doing something as an unofficial surrogate that the romney campaign is happy about. >> i respect jack's accomplishments in business but that's lunacy the idea that the labor department is cooking these numbers to help president obama. people said that during the bush administration too. they accused the bush administration of doing that. it is just not true. doesn't happen that way. and i think people need to have a real debate over the argument and not a cartoon debate about somehow darkened conspiracies with the number. >> so the discussion will happen on the sunday shows whether or not the week was about the president's performance in the debate, or this economic data. which wins?
which one is more important? >> you know, the debate was seen by tens of millions of people. i think that's important. i've said all along during the campaign, the jobless numbers have been hyped in their importance because people are living in this economy. they feel what's happening to their lives and their own prospects. this is good news for the president but doesn't change what voters already know about their own lives and the prospects for their kids to get ahead, the prospects for them to get jobs if they don't have jobs now. i wouldn't overexaggerate. its a psychological thing. it helps the president. it's a high rate. not a good rate. >> yeah. we've asked this question for months. the romney people, when the data does turn and who chos if it would actually, i'm told the president is starting to address tissue itself. here's the president of the united states. >> anticipated 5.2 million new jobs over the past 2 1/2 years.
this morning we found out that the unemployment rate has fallen to its lowest level since i took office. more americans entered the workforce, more people are getting jobs. now every month reminds us we still got too many of our friends and neighbors looking for work. there are too many middle class families that are still struggling to pay the bills. they were struggling long before the crisis hit. but today's news certainly is not an excuse to try to talk down the economy to coscore a f political points. it's a reminder this country has come too far to turn back now. because of your strength and
resilient, the strength and resilient of the american people we cannot turn back to the policies that toledo the crisis that happened in the first pass. i won't allow that to happen and that's why i'm running for a second term as president of the united states. >> that is the president of the united states addressing the jobs number today in a guess you could argue even though bleakley mentioning some of the skepticism over the data itself he didn't go there in any direct fashion. let's go to rick santelli at the cme with congresswoman biggert talking jobs as well. >> yes, carl. welcome congresswoman biggert. well, of course, we just had a jobs number. any thoughts? >> well, it's 114,000. it's a moral victory. i don't think that it really is a number that -- what are we going to do with the 22 or 23 million people that are out of jobs. >> but any progress, even one
job. >> it's good day. >> is a good thing. absolutely. we talked about canada. there are other issues. >> one other thing is actually what's important too it's gone below 8 to 7.8%. that's really, that's been 44 months that it's been above 8. so that's another good thing that's happened. hopefully we're on the -- >> would be nice to be on the mend. >> in terms of the fiscal cliff, off camera we were talking about that and you had some interesting thoughts, at least from the house side. what does the house side done to address or alleviate the fiscal cliff issues. >> first we did a bill asking the president to tell us exactly what he was going to do as far as where he was going to get the most to pay off the $1.2 trillion, and he's supposed to return and has a little bit, but he hasn't defined that yet. the more important thing is that
we want to delay things. we're in the silly season right now with the election and so we really didn't solve all the problems but if we continue with the sequestration and particularly with the military, even panetta has said that there's a real fear because for national security. so, i think that we've got a bill out there in the house that will delay the military part of it for the next year. >> speaking of delays on a job day not to interviewpoint, but there's also an issue that the press seems to be pretty big on that pink slips -- there's rules. pink slips need to go out regarding the job loss that will be ultimate if the sequestration proceeds but they are not going out. any thoughts on that. >> they are not going out because they are hoping they will extend this. it takes a long time for all those pink slips and then you lose people and then many won't be able to get back on the track. what is happening is the lame duck session after the election
is where people are going to know then what's going to happen. and, where everybody is worried on january 1st everything will go into effect. i think we got the opportunity after the election will be back in congress. >> to get something done. >> to get something done >> you're a chairwoman of a committee. which committee do you chair? >> insurance, housing and opportunity of the financial services committee. >> mitt romney in the debate talked about how dodd-frank has created too big to fail banks. you believe there's a negative side chairing that committee with regard to insurance companies. we don't have very much time. maybe you can quickly give us -- >> the banks that are too big to fail have really -- have special status and guarantee and would help if they go under. i'm afraid that the insurance companies have gotten into this too, whether they have to pay for whatever might happen. insurance had nothing to do with the bailout. i nene bailout -- >> it's unfortunate we have to
go. but it was aig and aig's problem wasn't traditional insurance it was derivatives. >> a few moments left in the trading week for europe. we'll get the close in about three minutes. don't go anywhere. h management m and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety. like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account.
angela merkel will go to greece on tuesday. huge news. who would want to be angela merkel's body guard in that situation. but it's very symbolic. let's take in the close. >> the european markets are closing now. >> so, there's a lot of green as you can see. bill gross tweeted today in the wake of the jobs figures here in the united states, inflation policies from the central banks by tips and short maturities here in the united states and importantly says bill gross by spain and by italy and the european union and boy is that what they did in the wake of the jobs numbers coming out. let's look at the session charts. it was about this time you got the jobs figure come through. europe continued to rally on after that because clearly central banks will keep printing on both sides of the fence. it's a disappointing headline figure. let's be honest. meantime let's look at angela merkel off to greece. it's announced on tuesday. bear in mind the greek press has
been antagonistic to the woman. one put her in a nazi uniform because of the austerity she's been bringing to the table. they need 31 billion euros from the rest of europe. if she's going on tuesday it's quite clearly an indication that she's not about to kick greece out of the single currency if ever you had a doubt about that. but you wouldn't if you followed closely the change in rhetoric that we've had over the summer out of berlin. in athens itself, emergency talks are under way to create the largest bank there from a position of weakness these banks are coming together. national bank of greece and efg in discussion there's. these two guys here have tried to do a deal twice and it's fallen through but now alpha bank is off to buy the french bank, selling out locally. those bank stocks have done well and greek stocks in general have done well again today with angela merkel now arriving on tuesday. threw see the gains. if you look on the blue chips, telecom for example, if you look for the week overall, american
equity market, the dow is up 1.5% for the week. top 50 blue chips in europe are up 3%, double of the gain for the week overall. look at where greece has gone. a gain of over 12% there on the ase. let me just show you the mining stocks. they were rallying in london. next week china will come back from the golden week holiday. china growth reflation discussion. i don't know why they are gaining. it might be you were short coming in anticipation of some china but i'm making that up. let's show you finally what's happening in motor on the tip of spain a big meeting of leaders and we did half an hour, spain and italy will have a submeeting where they will talk about already and when spain will ask for a bailout and so the conversation continues. will spain ask for the bailout. will the ecb come in buying the
bonds. >> october 21st is still a ways away. >> those are the elections. for as long as the yields stay where they are, arguably they don't need to come forward. the confidence is still in there. >> true enough. what a week. we'll be watching wednesday very closely. simon thank you very much. good twoud. let's get a check on commodities. shares of the nymex with crude making another $2 swing. >> european markets close. we saw crude oil at the low of the sessions. wti futures below $90 a barrel and we're looking at brent below 112. the fact that the jobless rate better than expected really doesn't do much when you look at the oil price traders say because we'll still have quantitative easing as simon mentioned whether we're looking in europe or here in the u.s. what traders are watching is demand and there's a great deal of concern about what that jobless rate still means in terms of consumer demand, industrial demand for energy.
add to that the technical levels that we're seeing the oil market which are quite weak and seeing heaviness in the oil price going into the weekend, despite the tensions in syria and turkey and of course keeping an eye on the headlines in iran. the big volatility this week has been in gasoline and gasoline futures continue to be actually in positive territory for the week. it's a refinery issues overshah to the demand picture when you talk about gasoline. back to you. >> bob pisani is here. i know you'll start with these levels. >> this has bean good week for the stock market partly it's been on headline economic numbers, a tad better than expected but the momentum is there. let's take a look where we are for the week because we're at new highs right now on the ones that matter. dow industrials had a good week, up 1%. new high. florida die high. s&p 500, 1.8%. if we close at these levels, 1466 is where we're at.
new closing high for the s&p 500. most interesting long time since we've seen this happen, the dow and transports up 3.8%, way outperforming the industrials. the transports underperforming for three months and bears have seized on this. this is a better number that we've seen a little bit of catch up on the part of the transports. major sectors today, euro has had a great week. your josh powell, dollar down. generally good for materials and commodities have done well. industrials. this is today's numbers. financial, here's your risk on trade. my heavens did i get a lot of comments about that jobs number that 7.8% from all sorts of political persuasions. let me point out a simple statistical fact how these numbers are gathered. this was something i was interested in 20 years ago. every month 60,000 households are sue vaed as part of this. that's what happens. they physically call 60,000, almost 110,000 people are talked to every month by 2,200 employees.
now pure labor statistics might put out number but census does the collection process. so think about the number of people that are involved here and everybody thinks that there's something funny going on. 2,200 people making the phone calls. if you want to do something that's more worthwhile how about trying to improve the quality of economic statistics gathering, something i've been trying get going for 20 years and nobody pays attention to me. look what happens here. this is the new home sales number p.m. i was the real estate reporter here 20 years ago. i know these numbers. august 2012 we said new home sales were up 27%. what we don't tell you plus or minus 18 percentage points. that means add 18 and subtract 18 the range is up or minus 8.9% to 46.5%. that's crazy. 20 years ago i went to census bureau and interviewed the guys who did numbers. the numbers were screwy. why are we getting these wide
numbers. the guy who collected these numbers you give me $10 million more end i can improve these numbers by 50%. they knew exactly. it's about statistical gathering and that's a product of how many people they can get to and that's a product of money. yet the president and the congress have been proposing cutting census bureau and other statistical gathering agencies budgets for years. you want to help things out, let's get better statistics. >> an argument for 20 years nobody listens. >> somebody is rigging the numbers. >> for more on the number we want to bring in diane swank, senior management director. diane, good morning. >> good morning. i just want to sing bob pisani praises as a former president of the national association of business economics and one of the only things we care about is quality statistics. we've been singing that same song for a long time. that's very important and he's
got it exactly right. >> so with that in mind, is it legitimately 7.8, and how messy is household? >> household is a messy volatile number. i think what's important the devil is alligator in the details and even the details, some of them -- good details on the household number some are not. 8.6 million from 8 million, 600,000 people we saw actually increase their employment for economic reasons taking part time instead of full time. two-thirds of the increase in the employment in the household number alone was because people were forced to take a lesser josh be than they would like to take and they would take anything so it was part time. you even in the household survey there were things that were not perfect or beautiful. if they could massage the numbers i would massage them more aggressively than this. >> is there any breakdown in the relationship between the unemployment rate and various component parts? >> you know, there always is a difficulty because of participation rates.
how long are people staying in school. are people willing to put their hat in the ring to actually go in and look in the labor force. we've seen women staying in the labor force longer and early retiree, people run out of unemployment insurance pulling out of the labor force taking 62 with reduced benefits on social security and medicare just to have anything. there's a lot of moving parts. what i would say from the payroll survey we're looking at a different survey there. that survey suggests we're creating jobs. not enough. not enough to get people excited about the economy and pop champagne corks and that's the bottom line. also you see the divide between the manufacturing sector, goods producing sector and the service sector. domestic doing much better than of course our manufacturers are doing and you've seen that in consumer confidence and other surveys as well. >> i would afraid to take on inventory too if i were in a capital intensive business given the outcomes we've yet to see resolved. overall, diane, ism, confidence,
housing, the market, all these things add up to a net positive point of view going through the fourth quarter? >> net positive marginally. we're still looking at the drought will be taking off growth. we're linebackering at about 1.5% growth on the fourth quarter. subpar at best. maybe jump up to 2% in the third quarter now. this economy has not been moving anywhere quickly so it does look like the consumer is coming back a bit. as manufacturers have to deal with the fwlobl economy they can't do as well. refinancing is paying off and we're seeing about 80% of mortgage applications now are refinancing and now people are finally actually getting some money back from that and that's is going then holiday season but you really like to see more jobs than just refinancing. we want to see a lot more jobs than what we're seeing. >> or lighter guidelines from banks or a whole slew of things. >> don't get me started on the regulations. >> have a good weekend. see you later. let's get a market watch with
courtney regan become at hq. >> reporter: united hearth dow components seeing pressure down 1.7% on news that they are going to expand into brazil. haven't participated in the m and a activity of some of its peers. but going after a brazilian insurer. their shares are lower. >> new member of the dow. thanks. ego trip time. we're asking you the viewer who went on the biggest ego trip this week. good or bad. the nominees are "sesame street's" big bird, mark zuckerberg or meg whitman. to vote go cnbc.com. we'll reveal the winner on "street signs". markets are higher on this jobs friday. how should you position yourself heading into the weekend. i take insulin,
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and s&p. traders will make the call. is the week's biggest lose ear screaming buy. the bull case for the hp. >> see you in a few moments. markets are higher after the jobs number with the dow earlier touching it's highest intraday level since 2007. good to see you art. we're off the highs, though. what's going on? >> i think they bumped into a little resistance. people are rethinking it, depending on who you are. it may be a good political number. but it's not that good an economic number. heavily distorted, influenced by part time workers and may be christmas season hiring is beginning to get in there. but both sides will make the most they can out of it. i don't think it should make an economic difference. the u6 number didn't change one wit. so you have a lot of people
underemployed and not necessarily happy. we got more work to do. >> i asked you earlier in the week if it was a romney rally you said no. didn't have to argue this would be an obama rally. >> i would think so. same people who were trying to push the victory leading to the prices yesterday how do they figure the unemployment numbers here. so what we're really seeing and i wrote about it in my comments this morning, is we're still going by europe is driving the bus. and yesterday was moving up. could you see some romney influences? the coal companies that he mentioned and some of the health care people and you can see some of the obama influences. but that's kind of the backdrop. the reason why the numbers look disproportional says a blot our mrk markets being illiquid. >> what does it mean about merkel going to greece. is that pivotal? >> i'm not sure unless there's a
surprise. poor greece is out there festering. everybody is concentrating on spain. greece has not been solved. would be good to solve it. but that doesn't change anything about spain which is a much bigger factor and spain brings in the challenge of italy behind it. so that the game has moved up field a little bit here. so, you know, i think it's more ceremonial than anything else. >> since '09 investors have pulled 138 billion out of stocks and etfs. they put a trillion into bonds. is that is going to change? is that going to change next year? >> it will eventual. you have to be careful how the public does things. after the dot-com bubble burst and we had 9/11 and the fed was panicking that the economy was going to collapse and they kept throwing that same liquidity in. the public said okay i'll use it but not buy those dumb stocks i'll by something safe like real estate. that money will wind up going somewhere else and you can't
live off the bond returns you're getting. we have to wait and see what they decide. >> what has a shorter shelf life, big bird or the ice cubes this weekend? >> the ice cubes don't have a shot. we will think fondly of big bird. early and often but the ice cubes don't have a shot. >> see you monday. thanks art. when we come back how to get your net worth to drop by more than three quarters of a billion dollars. we'll be back in a minute.
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earlier we asked you to guess september's nonfarm payroll and we have a winner. he nailed it with a guess of 114,000. joining us i think on the phone is patrick blood our nail the number winner for the month. patrick, good morning. >> how are you doing? >> i'm good. good to have you. 114. you know, when the estimates come out, people tend to like try to make outlier guess. i guessed 89. i've seen other people in the romney office who a number above 140. you went almost in line with consensus. what gave you that confidence? >> well i do a lot of research
and i guess after i did my research and looked at the numbers i just felt like, you know, we have a lot of work to do out there but we're headed in the right direction. you know, we've had about 24 straight months of job growth and i didn't think we would have anything that was, you know, out of line and after doing the research i guess that was the number that i had come up with. >> yeah. how many months have you tried to play, and in general have you been above consensus or below it? >> to be honest this is the first time i've done the nonfarm payroll numbers but i've done the cnbc million dollar contest and i was hoping to get a call on that in the previous contest. i'll take the umbrella any day. >> i was going to say, the big question around here is what your going to do with the umbrella? obviously you're not going to use it in the rain or maybe you will. >> that's a good question but i mean depending on what the economy does i thought i could save it for one of those rainy days. i value it more than taking it
out in the rain. >> you got views on the fourth quarter, and i don't know what your trading portfolio is like, but just on a lashing, what sorts of names do you like and which ones you running away from. >> i don't name specific names i guess but do i look at different sectors and my feeling is that we are headed in the right direction and i take a more macro view. one of the areas that i look at is i continue to look at natural gas. i think pickens is headed in the right direction. exploration will continue. the country will be better off as we pursue that track. >> you share that point of view with a lot of other people. congratulations on winning the powerball of economic data, patrick. good to have you on the program. >> thanks very much, carl. >> patrick blood our nail the number winner for the month. a lot more "squawk on the street" in just a moment. ♪
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up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again. it is not a good day for zynga and probably an even worse one for mark pinkus. he lost a substantial amount of wealth as zynga stock plunges. walter frank has more details in a guess we have to redefine what wealth is.
>> indeed. back in march, mark pingus was silicon's latest billionaire. his 94 million shares was worth about $1.3 billion. he join mark zuckerberg and other young tech ti coons who suddenly became members of that famous ten digit club. but what markets give they take away. zynga share price have fallen and his wealth have fallen by more than $1 billion. he's worth less than $250 million. his paper wealth has fallen by 80%. he's lost more than $4 million a day or close to $200,000 an hour for the past seven months straight. of course pinkus will be fine. we shouldn't be sorry for him. he sold 200 million of shares back in april before the big fall. he bought a $16 million mansion in san francisco. multimillion dollar home in
aspen and has wealth from facebook and other investments. mark pincus is proof how fleeting the fortunes have become in social media. today's sudden wealth is tomorrow's sudden wealth loss. never before in american history has wealth been created and destroyed. the new dot-com guys they did learn one lesson from the first dot-com boom. they learned to take money off the table before all that paper wealth goes up in smoke. back to you. >> rob, stick around with me for a second because you literally have written the book on the wealthy in this country. and i wonder in general are there patterns by which they absorb their wealth. you mentioned pincus selling some of his shares. do these new billionaires spend it all or are they smart enough after the dot-com fwouft reinvest it in different ways that we don't see. >> they've gotten smarter again about take being some of that paper wealth off the table. eve seen how volatility, how
beta wealth is just so threating today. so the big difference again just in the past ten years they are taking money off the table away from that concentrated stock position and putting it into mr. diversified investments. these guys haven't had time to really take money off the table or spend. so we've yet to see what their true spending patterns will be. zuckerberg and these guy, it's in the past year that they've become billionaires. >> that's going to be fascinating to watch. great stuff and great statistic. thanks so much robert frank. i want to take one quick look at hewlett-packard. we close shop for "squawk on the street". one. worst weeks for the stock during its history. down again today. analysts are out in force. downgrading to neutral. had a target price of 21. they are suspending that and say they have lower confidence in the company's long turn around strategy. but today is the discussion about jobs. jack welch