Skip to main content

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

9:00 am
>> couple of stocks to watch, shares of hertz falling in the premarket. the company warning first quarter results will be weaker than expected. that's dragging shares of avis and budget lower. avis bought budget? >> that's true. >> see? >> a while back. >> "squawk on the street" is coming up next. good monday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber. we have the unofficial start of earnings season with alcoa tonight. the opec meeting on sunday. china's cpi was in line, ten-year around 1.73. oil steady. we begin with larry fink and a warning for central banks as the president and fed chair yellen meet later today.
9:01 am
no deal, canadian pacific walking away from the norfolk southern bid after norfolk resisted talks forever. and another company reportedly enters the fray for yahoo!. the ted line for bids this week. stocks are looking to rebound for the worst week since february. alcoa due tonight. the president set to meet with fed chair yellen today to discuss the economy and wall street reform. and la and larry fink saying certain actionsi actionsi actionsi may lead to reduced spending and growth. an echo of what he's said in the
9:02 am
past. >> right. i think that we're getting actual success in europe. no one seems to recognize that. i think three months from now, germany will say enough is enough. we want rates to go higher. germany will prevail. the numbers that i'm getting, car registrations, employment, pmis from europe, they're all strong. i think this is a backward looking letter. >> really? >> yeah. >> other than japan. japan, i don't know. i can't figure them out. nothing seems to work. >> ten-year negative 0.796 for the japanese ten-year. it is still negative. >> they should just go buy gold. that's what do you when you have negotiate stiff ra negative rates. everybody who tried to get their currency down is losing now. they're losing because the wo world's had enough and janet yellen had enough.
9:03 am
i think that there's a -- we better start taking janet yellen on more seriously. i get the sense a lot of these -- i will say something that -- i spent the weekend with my daughter. >> yes, you did. >> in new orleans. my daughter says what's the deal? is she -- because she's a woman? what's the deal? how about a little respect. >> really, you feel like it's a gender issue? that it would be different? you do or your daughter does? >> i'm heavily influenced by the idea that she's so easy to be run over. they don't feel that way about others. i do believe europe is coming back. we're three guys, there's a lot of guys in the media. there's a woman who does criticize yellen who is on the
9:04 am
fed. is anyone listening to what she's saying? she's saying enough currency devaluation. i think europe is about to have a major breakout in growth. china is about to have a breakout in growth. >> your point to fink or to big gross in barron's, they need to see normalization in the next one to four years, your point is we're on it? the fed is on it? is that it? >> you think we'll see a break out of growth in china? >> yes, i'm seeing baltic freight up over 500. the stock market there is on fire. >> stock market on fire doesn't mean there will be growth there. >> that's a part of why wholesale inflation not great but narrower decline than we thought. >> i think valet, not the valet i use when i go out, but the iron company, they're a great way to measure china.
9:05 am
that stock is one of the best performers of the year. i see green chutes in china and in europe. more than green chutes. i'm not talking about the lines at the new strasburg starbucks which were equivalent to "pirates of the caribbean" on a heavy day. >> starbucks is bringing their roastery to new york. 20,000 square feet. >> saw that. >> i assume "mad money" may go live there on day one. >> i may go there today. it will not be ready for a bit. it's across the street from google. i hear google has okay coffee. >> they have a lot of stuff there. snacks everywhere on the west side. it's free, you can't beat that. there is free versus having to pay. >> really? >> yeah. >> all the food is free. >> really? >> yeah.
9:06 am
everything. >> jim -- >> when i went there to visit, this, too free? really? >> let's pivot to earnings. alcoa tonight. banks starting in the middle of the week. we know how much expectations have come down. third quarter expected of negative growth for 7 to 10 sectors. >> sandra o'neill downgrades wells fargo today, thanks for nothing. at a certain point, you get a valuation kick in. they won't all hide in mastercard. there is a degree of which a bank does not lose money. rates did go up and by the way, i don't know if you looked at how much you get more after rates go up. i didn't get anymore. i'm arguing with my bank right now saying why can't i get a little bit of a bump after the fed took up the rates? i feel like i'm arguing with an atm. listen, atm -- the atms are not responding. not like talking to a person who wouldn't respond. it's more of an insult. i think the banks are going to
9:07 am
do badly, everybody knows it. i see hertz came out with a bad number. if you ever heard of uber and alcoa will be horrible. there. alcoa is splitting. >> right. >> you covered earnings season for us now. >> i'm done with earnings. >> alcoa horrible, banks priced in. we already know hertz -- >> if everything is horrible, it's probably less than horrible. if you take everything to a super strong sell, like price target -- >> you think sentiment is getting negative here? >> he just summed it up. >> we're at 20 -- valuations are year to date highs, you're saying all this bad sentiment is washing through? >> i'm saying i see the dollar weaker against the yen. dollar weaker against the euro. if you're a cfo, you're not going to be able to be as negative as you were.
9:08 am
when ibm reports, they will not be in that mode which says, listen, in real currency we would have done not as horrible as we were doing in not real currency. you know, currency -- >> all of which says what? i want to own this market? >> that the international stocks may be stronger than you think. domestic ones. do you see that gap store's number? >> yes, we did. >> wasn't that something? people do not go there? >> if old navy continues to crack, that has been the saving grace, the last couple years. >> i know. >> we talked about this. mall traffic. that's -- >> i didn't think elle brands was that bad. sears is putting together a new facility. >> are they really? >> yeah. >> what is that facility. >> an iou from eddie lampert. iou nothing. >> that guy could have created a lot of value if he had gone down a different road. >> if he bought amazon?
9:09 am
>> if he had just been a hedge fund manager, perhaps. >> because you haven't shopped at kmart lately, you don't know what kind of blue light specials they have. >> it's sad to watch. >> are you sad about it? >> not really. >> another big story, canadian pacific announcing it's ending efforts to merge with norfolk southern saying they see no friendly path to merge at this time. here we are again with a different method, but still a deal that was going to happen, maybe, then didn't. >> yeah. i think saying it was going to happen, maybe, is a stretch. this deal many people knew it was dead. it's news that cp says we're done, but frankly most people involved in the marketplace, which is why you won't see major reaction in either stock, knew that this deal was done the day it was actually announced as an intention on the part of cp to
9:10 am
try do somethinto do something. they never talked. they said there was not a chance that a tier 1 merger would be allowed. both companies considered tier 1 in terms of railroads. if they were to have gotten there, there would have been better merger partners from norfolk southern. they were never under any threat of this deal occurring. the only question is why cp kept coming at them. they tried different structures. they were going to put everything in a trust, it would sit there for a long period of time as regulators did their work. >> it's extraordinary the day the story broke, i was sitting next to you. stock at 97. you said this is dead on arrival what was dead on arrival is everybody's capital who bought it at 97. it was rather extraordinary. it was almost like a hoax.
9:11 am
you remember hudson hoax in 1980 -- >> 1990 something. >> somebody mailed a letter saying we're bidding. >> somebody called dow jones from a pay phone. classic. back in the days when you could do that. >> one of these things that immediately people said hold it, are they doing this ahead of csx reporting this week? maybe there's something going on at csx. >> the question continues to be for canadian pacific, which is still a large holding of bill ackman's and pershing square, hunter harrison, their ceo what do they do next? what do they do in their attempts to put together some sort of rail that spans the nation. not clear they can do much of anything. >> can they do earnings? >> maybe. >> that's an old-fashioned way. i hate to just resort to something that 6,000 companies resort to. i think earnings could play a role. >> yeah. stock nowhere near its low. nowhere near it's high. certainly not the worst performer for mr. ackman.
9:12 am
he has plenty of others that don't look as good. >> coal has fallen off a cliff, but this crude by rail has not stopped yet because they signed year-long contracts and two-year contracts. don't look at crude by rail as something that will hurt them this quarter when csx reports this week. thank you rbm for that. coal is the story. i saw a coal barge this weekend in new orleans it was not coming upriver. it was going downriver. it was reverse apockhorror. >> yes, brand do. >> all one story. >> when we come back, a lot more of this morning's movers. former italian prime minister,
9:13 am
mario monti is with us. we'll get his take on the challenges facing europe's banks. does he think draghi is on the right track? we have yet to put together two days of gains this month. more "squawk on the street" from post nine in a minute. it's more than the cloud. it's security - and flexibility. it's where great ideas and vital data are stored. with centurylink you get advanced technology solutions from a trusted it partner. including cloud and hosting services -
9:14 am
all backed by an industry leading broadband network and people committed to helping you grow your business. you get a company that's more than just the sum of it's parts. centurylink. your link to what's next.
9:15 am
9:16 am
britain's daily mail may become involved in a bid for yahoo!. in a statement a spokesperson says the company that been in discussions with a couple different bidders, but it's early stage. those bidders taking the form of private equity firms which may team up to make a bid for the core operations of yahoo! which as viewers know, are for sale. first-round bids are due for next week. it's just first-round bids. we're talking about a process that will go on for two months. it does appear now to be a fairly broad process in terms of the interest of parties who might want to make a bid or show intent to do so. but it doesn't mean at the end they'll end with a group of bids. and frankly other than jeff smith who is leading the activist campaign to unseat the board and a number of
9:17 am
publications out there that seem to report on nothing but yahoo! i'm not sure there are many people who care. >> wow. you mean other, like, the verizon world or viewers? >> i think viewers and investors. if you get a surprising number here, that here, that certainly could move the stock. private equity is a difficult move for them. in part because of the comp that's delivered now to yahoo! employees in the form of equity. so when you're a private equity bidder, you have to slice out some of your own equity to give. the equity check itself would be large. if verizon wants it, verizon will take it. it's just the number. there's a lot of complexity with the yahoo! japan stake that's out there. unclear what will happen to
9:18 am
that. if that will be kept by what's left behind. the alibaba stake the key part of that. i'm just saying that every last move of yahoo! is not potentially of great interest to the investing public. when the day comes that there is a potential sale, we can tell people about it, certainly that will be news. >> when you interviewed the chairman and marissa mayer in that -- let's say somewhat subdued interview, did you detect that anyone is really in charge to be able to say we're for sale or not? aren't you either for sale -- if you have a house and you put up a sign that says we're for sale maybe. >> the board is running this process. >> we have to ask our wife that kind of thing. >> there's not a sale, but inquire within. >> there may not be unanimity of purpose between the ceo and the board.
9:19 am
that's fair. she's running the company. the board is pursuing a sale of the core business. bankers are reporting to the board who are dealing with that sale. at the same time they are also dealing with that proxy fight from mr. smith. >> right. >> would seem they have the opportunity to conclude the sale of the core business prior to when that proxy fight would end. meaning before a vote would be taken of yahoo! shareholders. but, you know -- >> look -- >> we're going to live with every-day stories. this one's bidding this one is not. >> you're saying it's cocktail hour. >> yeah. yeah. the keynote is not until the summer. >> probably not early to mid-june is when we'll get a sense of if somebody is left standing there and what number is. and what the board chooses to do when they get the real number. >> okay. so how does it work? i wake up this morning, and i see the daily mail. will i wake up tomorrow and see
9:20 am
meredith? tuesday maybe back to time? >> you may. >> is it reporters calling and saying are you interested? >> these are first-round bids. having followed a number of auctions in my time, it's not indicative of where you'll end up. why not take a look. >> let's do a story that says who's not interested. google is not interested. last week there was a piece about paypal. i'm not going talking about a p said google is not interested in paypal. no one said they were. google didn't say. alpha beth, ruth porat. maybe we should call great american and just get a solid denial that he's not interested in yahoo! >> my guess is there would be a major technology deal of importance that comes between now and when yahoo! gets sold
9:21 am
for $5 billion. >> you think we could call jenny rometty -- watson may want to buy it. >> watson knows all. >> just ask watson. we don't need us. just have watson. >> you're back to artificial intelligence. scaring me again. >> a.i. when we come back, cramer's mad dash, at least for now still done by a human being. we'll get the opening bell. futures look okay as we kick off this busy week. glasses? they are. do i look smarter? yeah, a little. you're making money now, are you investing? well, i've been doing some research. let me introduce you to our broker. how much does he charge? i don't know. okay. uh, do you get your fees back if you're not happy? (dad laughs) wow, you're laughing. that's not the way the world works. well, the world's changing. are you asking enough questions about the way your wealth is managed? wealth management, at charles schwab.
9:22 am
unlimited data from at&t means you can stream it all. like that anthony michael hall movie where he fights with the girl. the one where he gets rejected by the girl. even stream the one where he creates the girl. with unlimited data, you can stream all the anthony michael hall movies you want. i wonder what he's up to these days maybe he's shopping in an at&t store? get unlimited data and your fourth line free when you have at&t wireless and directv. plus, get up to $650 in credits to help you switch. to make the world a more beautiful, colorful place?ob at ppg we think that's something we all need to do. we create, invent and formulate amazing paints, coatings and materials. so we can make the world run faster, stronger, fresher, smarter, cooler, lighter, greener and better for the next generation that comes along. ppg. we protect and beautify the world.
9:23 am
everhas a number.olicy but not every insurance company understands the life behind it. for those who've served and the families that have supported them, we offer our best service in return. usaa. we know what it means to serve. get an insurance quote and see why 92% of our members plan to stay for life. first mad dash for the week. hertz, jim, has been -- there's
9:24 am
always been hope in the hedge fund community for this stock, it's gone ever lower, way back when it was spinoffs, a new ceo, the old ceo, they didn't like him. then they got rid of him. it's coming back. >> it's a spelling problem at this point, david. one of the reasons why it's this bad, they talk about pricing pressure endlessly. further intensified in the first quarter of 2016. david, i think uber is playing a role with everything. >> every time people ask that, they say short-term rentals were doing fine. i can't believe that's the case. >> they have to say something. >> how many people go to their phone for a one-day business trip as opposed to renting a car? >> what you have to do, the only way to defeat that is through corporate sales. avis is winning in the corporate sale battle, i believe. so i think this is a challenged group. not unlike the auto companies. all of which are dealing with
9:25 am
uber. the failure to acknowledge uber shows their head is in the sand. there's obviously something wrong. the government allowed all these mergers, completely anti-competitive mergers, it meant nothing. >> everybody thought it would help enormously, have huge pricing elasticity or pricing power. >> what they did, they dot -- everybody raised prices. he hertz and avis. we have that uber app. hertz charges you for gps. i got gps on my apple phone. >> plus you still have to return it and take the bus. who wants to do that. >> the whole thing is unsatisfacto unsatisfactory, versus uber, which i love. >> the opening bell on this monday coming right up.
9:26 am
great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business.
9:27 am
♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ but they demand the best shopping experiences. they may want the latest products and services, they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models... ones that transcend channels and locations, anticipate expectations...
9:28 am
creating new ways to engage at every imaginable touch-point. it's a new day in retail, and together, we're building the store of the future. digital works for retail. let's talk about how digital works for your business.
9:29 am
you're watching cnbc's "squawk on the street," live from the financial capital of the world. the opening bell in over a minute. we start the week that will bring the unofficial start to the earnings season with alcoa tonight, banks later on. u.s. inflation data. got chinese inflation data over the weekend. the big opec meeting is sunday. reuters today, jim, saying according to qatar, 15 members or nonmembers, two-thirds of global production are in favor of this deal if they can get this iranian thing ironed out. >> my concern is iran pumping more than the u.s. is dropping. the u.s. is really starting to drop. we'll be down a million barrels by next year. but i feel like the real story here is worldwide growth and usage. usage is up. and that does matter tremendously. if they did you would get more of an upper move.
9:30 am
the demand is going higher. >> let's get to the opening bell. a look a the s&p. at the big board, mexican telecommunications company, american movil celebrating isem nasdaq, the independent petroleum association of america doing the honors. >> this is really that day that pause that refreshes, as klaus kleinfeld storms into the scene tonight. kelly and i are interviewing him, and then for a longer more in depth talking about the split on "mad money," the big spl split up. aluminum spiked during the quarter and came down. >> did the stock it does seem to mirror the move in aluminum prices instead of appreciating
9:31 am
the power of the split. >> that's why they're split. the tail is waging the dog. the alumina and aluminum dog is waging the dog of autos, the huge amount of aluminum that goes into airplanes now. i think that what you want to listen for is aerospace and the amount of aerospace business. trucks we had a downgrade today for cummins, buildings, cars, cans which have always been weak. and then just overall new uses of 3d aluminum. >> 3-d? >> powdered aluminum being structured into things with great tensile strength. it's an invention klaus' team has come up with. >> advances in technology. >> jim always walks you through
9:32 am
kleinfeld's playbook. we did not have you friday, i want your thoughts on facebook which had a miserable day. the f.a. conference this week. some reports they will announce a large investment in video what explains that action. >> we have bob peck coming to their defense today. i felt they were a large seller of facebook what i hear about oculus is good. mark zuckerberg is very involved with facebook live. i think he feels it will be the ultimate behind the scenes channel. what they need is curated questions. i do a pre of "mad money," we'll say tonight we're talking about alcoa. someone will say, okay, can you tell me when the phillies are going to beat the mets? wow, we need that question out of the queue, even as the answer was soundly yesterday. there is just kind of a free-for-all that exists in periscope. sorry. that's what has to change.
9:33 am
facebook has to be curated so the questions all relate to what you're talking about. and then you'll have a program that i think is going to be quite exciting. zuckerberg's actual interest in this is surprising. i feel he thinks this is the way to beat youtube. be careful. these guys are all going up against each other. curated questioning, would have a show. really big show. >> it will be interesting to see how much money they decide to spend on all those kinds of efforts. >> yes, true. i do believe that instagram is what younger -- they don't use facebook, they use instagram. facebook is for my generation. talking about my generation. >> talking about your generation. i know, roger daltry probably just uses facebook. >> thank heavens for the rock and roll hall of fame. steve miller is now my favorite. very few people invented words
9:34 am
like pompanous. >> did you hear what he said to the hall of fame? >> two tickets. two tickets, and ten grand for anybody else. >> bunch of tokers and jokers. >> i love steve miller band. oddly his first name is not steve. he will change it when he is inducted. >> still on the aig board. how is aig doing? >> eh. >> versus travellers. >> not as well. >> travellers in the insurance hall of fame. >> if you are going to come after a company, you don't have a lot of time left. be interesting to see if we get settlements in the activist front in existing battles or ones we're not fully aware of. not that far from annual
9:35 am
meetings season. so the deadline is ticking if you're going to nominate. >> circle back to carl's question. facebook will remain -- there's a big seller of facebook. i don't get it. the stock had a great run. i'm using -- you know, they have $6 earnings power for 2018. but, you know, sellers come in. you know, any seller can hurt a stock up this big. >> you mentioned under armour earlier today. not having a good morning. down about 1.5%. of course one of their key athletes, jordan spieth, having lost the masters, what is being called an historic meltdown. tough weekend. >> i'm into under armour, just saying could you please refute some of these things. the price target of 32 is -- i know they split the stock, but 32? that, to me is -- that's a wholesale saying that under armour will lose -- that under armour has lost the consumer.
9:36 am
i don't see that. but this is a very damming piece. quite frankly saying that under armour peaked, and, you know, if you follow steph curry the answer is no. if you watched the masters, the answer is yes. quite a meltdown. >> looking at the performance over the course of the year of so many stocks that came back sharply. the banks, as we move into earnings season, which one, if you had to pick the big guys, whether it's jpmorgan down 12% or bank of america down 23, or morgan stanley down 24% for the year, or citi down 21%, who do you like going into earnings season? if there is any one name? >> my travel trust owns wells fargo, which is being hurt. they did a -- >> only down 13% this year. only. >> wow. because of the limits. bank of america has been sorely
9:37 am
disappointing. because of the oil and gas loads. you need rate hikes there. this is a group so oversold t may not go down as hard as people think. there are very few adherence. it is a big sector. i was going over some of the banks this weekend. a lot of them are back to where they were in 2011. first horizon, bbt, they have been performance killers. >> so few of them have outperformed the s&p over any meaningful time frame. they just don't. >> and now if bernie sanders becomes president, i predict, not unlike what mr. t. did -- >> you pity the fool. >> i pity his pain. >> forecast calls. >> there are a lot of roads to go down with the various presidential candidates that will bring pain. >> yes.
9:38 am
yeah. stopping in the woods on a snowy evening. i lot of -- some of these candidates don't care for the banks. don't you think it's interesting everyone wants to know what lloyd blankfein said to hillary? i'm not the least bit interested. >> wasn't in his letter which we went over on friday. >> do you think that dimon stock will go back to the dimon buy level? >> where was that level? >> 53, the absolute low. i went through his letter again. and, you know, what he's really saying is it costs a fortune to be a banker these days. a fortune to the regulators. i don't think that's wrong that that's the case. now, he didn't blame the regulators. it wasn't like he said the reason we underperformed is the regulators. the cost struck smture of a ban bad, they need rates higher. they are stricken by the fed curve. larry fink's comments about having to stretch. rate hikes will come.
9:39 am
you'll get your way. you'll get your way. >> we mentioned ua, how about ual? they are up, strong play here, customers affected by low oil prices. some of these airline stocks trade inverse of the news. we have a serious challenge going on there. >> we do. i pointed this out on friday if you look at the calendar f there's going to be a settlement in the ual fight now, the one where they want six board seats, you would expect that would be coming in the next day or two. soon they'll be within 60 days of the potential. haven't set the meeting date yet, but the calendar is tight on that. >> i think delta will have -- the airline group and the banks share a couple things. delta selling at six times earnings. no one believes. i think the airlines are very
9:40 am
inexpensive. the banks are not inexpensive if there's no rate hikes because of the big drag that they have just on earnings power. you know, they always used to joke when they turn the lights on they make money. but they don't make nearly as much money as they used to. the airlines are making a lot of money. >> the banks are more like utilities now which is what the regulators were hoping for. >> that was the key paragraph in jamie dimon's letter. don't turn us into utilities. what i did this weekend, because i'm a man of tremendous excitement, i compared american electric power to jpmorgan. they should wish their utilities. adp crushed them. american electric power -- no offense, jamie, but utilities -- they are on fire. con ed has crushed you. >> con ed -- has con ed crushed anyone but consumers? >> con ed stock is a winner. because they get rate hikes, these guys don't. >> the idea they can beat
9:41 am
utilities, that's a great business. do you think jamie would be switching to coal or solar? maybe solar. >> still get the tracks credits. still available, for a short time only. >> that part of his letter i found almost facetious, as you look at dominion, adp. wisconsin electric. they're killing them. come on, don't slag adp. i saw an adp barge in the great mississippi. i took some pictures. >> can't wait to see those. your china thesis is at play with cat, the best dow performer at the moment. >> the stock trades on what will happen next year. we're looking at baltic freight going up consistently. again up. it's now double. that's caterpillar's wheelhouse. they do have a lot of coal and oil, tar sands.
9:42 am
if there's construction coming back, and we'll find out from claus today, we'll find out about construction. and how bearish it really is i don't want to short caterpillar. they can pay that dividend. i don't want to short them. that's a sucker play. >> on that note, dow is higher. let's get to bob pisani on the floor. >> very nice start to the week here. all ten sectors of the s&p starting on the upside. jim mentioning china. a nice session overnight. shanghai up nicely, almost 2%. they had lower than expected inflation data. that's sort of fueled speculation that beijing may continue with the stimulus policies, loose monetary policies. europe generally on the upside. italian banks flying. there's been talk, was it last week and over the weekend, of an italian t.a.r.p., these central bank officials have been meeting to possibly discuss creating a fund to purchase bank shares. that's essentially an italian
9:43 am
t.a.r.p. you can see how much they're up today. that's helping. here in the u.s., all ten sectors on the upside. nice move up on consumer discretionary. some builders on the upside. materials up nicely. financials also on the upside. energy is up as oil is over $40. look at material names. metals names. iron ore names, freeport there, which is a copper name is. i think these are moving likely on what's happening over in china and hopes for stimulus over there. you were talking about the bank earnings starting. it is not a pretty picture. the estimates for the s&p financials overall, earnings expected to be down 8.5%. this would include some insurance stocks as well. the top six banks, their earnings are expected to be down 20%. this is not good. we have hashed over exactly why these banks are having trouble. this is well into the stocks. the rates are lower for longer, net interest margins flat to
9:44 am
declining, slow growth economy in the u.s. little or no growth for those banks that have international exposure. the point is everybody is well aware of this the expectations are low. we have the big names this week. jpmorgan on wednesday, bank of america later, pnc and wells fargo and regions. they have been beaten up. the sector down 12%. that's the bank sector. the risk is on the upside. if you have positive commentary, these banks should show some rallies. we are finally getting a fault in the ipo business. boy, have i been talking about this. finally we're seeing it. today trading on friday, bats global markets pricing thursday for friday. the following week, mgm growth properties and american renal. and u.s. foods and soulcycle should be announcing because they're out of the gate. this morning we had a new terms announced, that was secureworks, which is the dell security spinoff. pricing 9 million shares at
9:45 am
$15.50 to 17.50. the bottom line is two months, two months after the market bottomed we're finally getting sign that's ipo market is opening up. that bats global markets pricing this week will be important because how they do is going to very much set the tone for the rest of the ipos coming. the dow up 90 points. >> bob, thank you very much. let's get to the bond pits, rick santelli at the cme in chicago. >> good morning, carl. we've seen this movie again, doesn't mean the end is exactly the same, going to be the same. the final reel will be the same as the last couple looks, once again europe is supposedly fixing what ails it, in this case maybe the italian banks. will it work? i'm not sure. one thing, again, they bought tide. they being the european central bank, the italian central bank. it's affecting all markets two-day of fives, rates creeping up a bit. very important area. if you open the chart up towards the summer of 2011, look at all
9:46 am
those bottoms and tops around 117 to 120. this is very big area. we're big areas in currencies, big areas in the fixed sovereign market. ten-year, open the chart up to the beginning of 2015. the same true on tens and fives, just a different level, around the 160s, 163 to 166. 166 is the current low yield close for tens right now for 2016. look at a two-day chart of bunds. their yields are creeping up. maybe it's because the next chart, this is a year to date chart of the italian stock market. you can see it's turn the uped bit. some banks are insolvent, sounds like the topics we talked about in 2006 and 2007 in the u.s. 19,000 is key. we're all trading the same market in the end. look at the dax, the driver of the european group with regard to economic horsepower, same
9:47 am
chart, except it's 10k there. both have turned up. the final chart is a one-year chart of the euro versus the dollar. i picked the one-year versus the one-day or two-day. see the little nub at end? yes, it turned up. let's see if it holds true. we all know the foreign exchange has been somewhat important of late. even though the dollar/yen is the main story, taking a pause to see what kind of follow through the italians get and the biggest issue of all how all central bankers may be communicating as referenced in a barron's article this weekend. maybe they all need to get together and normalize. the future is not looking as bright if policy remains the same. >> rick, thank you. when we come back, elevation partners, roger mcnamee about what he would like to hear from facebook and where live video may come into play.
9:48 am
the dow up an even 100 points to start the week. (patrick 1) what's it like to be the boss of you? (patrick 2) pretty great. (patrick 1) how about a 10% raise? (patrick 2) how about 20? (patrick 1) how about done? (patrick 2) that's the kind of control i like... ...and that's what they give me at national car rental. i can choose any car in the aisle i want- without having to ask anyone. who better to be the boss of you... (patrick 1)than me. i mean, (vo) go national. go like a pro. when a moment turns romantic why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night.
9:49 am
tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis and a $200 savings card. from icy ocean your wild-ckitchen counter. mon. when you cook with incredible make incredible meals. get your first two meals free at
9:50 am
it's more than a nit's reliable uptime. and multi-layered security. it's how you stay connected to each other and to your customers. with centurylink you get advanced technology solutions, including an industry leading broadband network, and cloud and hosting services - all with dedicated, responsive support. with centurylink as your trusted technology partner, you're free to focus on growing your business. centurylink. your link to what's next. - diversity isn't just important for your financial portfolio. it's also important for your life. celebrating, welcoming, and surrounding yourself with people of all kinds is an investment in both you and your community, and we're all the richer for it.
9:51 am
siri, open the nba app. >> here he is, over jackson. >> see that. >> how good is this kid? >> that's the guy you're playing in this movie. cold-blooded assassin. >> that is nba star kobe bryant, the latest star to appeal in an apple ad, the two are demoing the new apple tv. apple featured many mega stars including taylor swift, jamie foxx, cookie monster. over the weekend barron's sees 40% upside over the next year saying it needs to be valued like a cable company. >> i think the 5 is doing better than people think. kobe was in new orleans this weekend. he signed everybody's jersey.
9:52 am
this guy, this kid was in tears. kobe stopped and signed everybody's jersey. what kind of guy is that? he must be the greatest. everybody's. >> that's nice. that's nice. >> that's nice. glad to hear he did that. >> yeah, it's okay. he's a big star. he doesn't sign anybody's jersey. >> one of the greatest. >> thank you, from lower merion, p.a. >> on apple, you agree on that? >> don't trade it. own it. this 5 turns out to be a hit in china and among the people who like the smaller form factor but big among the young people. tim cook seems to be underestimated, but underestimate him at your own risk. when we come back, stop trading with jim. r and he would have wanted you to have it. it meant a lot to him... yes, ge makes powerful machines.
9:53 am
but i'll be writing the code that will allow those machines to share information with each other. i'll be changing the way the world works. (interrupting) you can't pick it up, can you? go ahead. he can't lift the hammer. it's okay though! you're going to change the world. mary buys a little lamb. one of millions of orders on this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack. with the help of the at&t network, a network that senses and mitigates cyber threats, their critical data is safer than ever. giving them the agility to be open & secure. because no one knows & like at&t. and ca"super food?" is that recommend sya real thing?cedar? it's a great school, but is it the right one for her? is this really any better than the one you got last year? if we consolidate suppliers, what's the savings there? so should we go with the 467 horsepower? ...or is a 423 enough?
9:54 am
good question. you ask a lot of good questions... i think we should move you into our new fund. sure... ok. but are you asking enough about how your wealth is managed? wealth management at charles schwab.
9:55 am
great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. time for cramer and stop trading. >> just in terms of just tremendous mergers common among executives, the release put out today by -- this sin credible -- by bull pulte attacking richard
9:56 am
dugas, the ceo, with richard's uniquely disastrous track record of cumulatively losing so much money, the board is telling shareholders how out of touch they are. his record is not that bad. but uniquely disastrous, i think does say, kind of like, well, are you even just trying? the headline is 530 million of cumulative losses over 12 years, time to replace richard dugas. doesn't read well for mr. dugas. >> rare you see this kind of fight between the board, foun r founders and the ceo. >> mr. dugas, please come on our show tomorrow. explain whether you feel that you have the uniquely disastrous track record. there are other home builders that are more disastrous. i know he wished they had mr. pulte believe they should have bought, i suggested kb homes as a target. some analysts came out and disputed that.
9:57 am
kb homes has the best california land that could be for sale. this is a negative letter. the kind of thing you don't, you know, bring home to mother, so to speak. >> yes. >> tonight -- >> alcoa. >> we make look at some of the new highs that you highlight which are interesting in your twitter feed. i continue to see some drug stocks go down. it's still not the place to be. >> allergan. >> allergan. people still think maybe that was not the brent saunders -- may have stubbed his toe on that pfizer thing. always love to have him on the show. >> richard galfont. >> some cinema. >> we'll see you tonight. when we come back, former italian prime minister, mario monti.
9:58 am
9:59 am
10:00 am
good monday morning. welcome back to "squawk on the
10:01 am
street," i'm carl quintanilla with david faber and simon hobbs. dow and the nasdaq positive for the month, s&p almost there. oil at 40.68. the highest since march 23rd. >> our road map this monday morning, the imf and blackrock's larry fink warning against negative interest rates and the risks they pose. and worries about gdp, several economies forecasting its economy nearly shrank in the first quarter. of course it is a big week for bank earnings, but analysts forecasts are dismal. find out how you should be playing the bank stocks. in other words, do they rally from here? coming up later in the show, the former prime minister of italy, mario monti will join us live. we'll get his thoughts on the european union and its economy as david cameron prepares to make a live statement on his own
10:02 am
finances. in 30 minutes. >> earnings season is kicking off today alcoa after the bell. expectations not that good. how much of that pain is priced in? mike santoli joins us with a look at what we can expect beginning tonight. >> yeah. i think it's fair to say part of that pain is price d in. arguably a fair bit of it in the most cyclical sectors of the market. expecting first quarter earnings down about 9% year over year. those estimates have been falling unusually fast. the stock market, the s&p down 4% from the high last may. i don't think it's an accident that the market's all-time high may 20th of last year, as the last quarter was earning. the hardest hit areas of the market, financials, materials, energy sectors, those stocks each down 9% to 20%. they have seen that the earnings picture is not looking so good. the hottest stock sectors? they could be vulnerable. earnings may not support the performance.
10:03 am
consumer staples up 7.5% in the last 12 months. estee lauder, kimberly clark, coca-cola, people crowding into those perceived safe stocks. because earnings have been weak, have stalled and the stock market is about where it was a year ago, stocks are really no cheaper, not much cheaper than they. were the argument is maybe the bulls will need some help to continue going higher. is the market telling us the earnings trough is here and the second hatlf it will come back? that's what the street is betting on. china could calm down. and stocks don't look so bad relative to corporate bond yields, back to about where they were last year. you mentioned alcoa. claus kleinfeld will be on "mad
10:04 am
money" tonight. and larry fink saying not nearly enough attention has been paid to the toll the low rates and negative rates are taking on the ability for investors to save and plan for the future. let's bring in the director of global macro at fidelity investments. are you in this camp that things need to normalize sooner rather than later before we do lasting damage to the economy? >> you know, the u.s. economy is in decent shape, at least in terms of domestic consumption side. we continue to be in a global trade recession. two forces are battling each other as they have for the last year. the central banks around the world, the u.s. is in tightening mode. though in recently certainly the fed has backed away from its tightening campaign. so that's allowed the markets to breathe a bit easeasier.
10:05 am
globally central banks are trying to buy time for a debt super cycle to work itself out. there are questions about whether the central banks are running out of ammunition with negative interest rates clearly not doing what they're supposed to do in terms of markets. >> mike, your thoughts? >> i think nobody would ever draw it up this way, where you have trillions of dollars at negative interest rates and global central banks pushing in that direction. i don't know how that manifests itself in the rest of the capital markets. people are uncomfortable with it. it's interesting the way janet yellen has been talking about, hey, we can always do qe4. they want to stay on this side of the zero line. >> i guess the point is, as you know probably better than anyone else on the panel t cuts both ways. if i price money cheap enough, can i reinvigorate the animal spirits? on the other hand, the more you push rates negative, the less that most people are actually earning on investments.
10:06 am
they continue do this, pushing cheap money up. if you're saving for your retirement with so much cheap money around what gets rewarded? therefore what are you able to spend as a consumer in the economy? >> yeah. we see this in japan. they push rates negative, and the banks basically fell off a cliff because the banks are told they can't pass this on to the customers. the whole banking model goes out the window. even in europe, the ecb wants to pay the banks to lend money into the economy. but there's no demand for credit. this is the same demand we had in the u.s. about five years ago with qe over here. the fed flushes the banks with excess reserves and the banks sit on them. when there's too much debt, demand for credit diminishes. people don't want to borrow. this is the whole pushing on the string part. at the same time, people get less money.
10:07 am
and with nerp in europe and jap jap japan, it seems to have created a hoarding mentality. >> let's talk about as earnings start. the bulls argue we have seen nice inflections in the oil, in the dollar, yet people maintain technicals are not support here which is true? >> i think the technicals are neutral. we've surmounted a couple of these tests. we've been going sideways for basically three weeks basically. that's kind of worked off this overbought thing. people are not convinced that this is anything more than the upper end of a new trading range. i don't think it's been determinative of whether the technicals are endorsing this or not. i think sentiment is again neutral. people are feeling better, but not buying in and saying, wow, this means all clear, off to new highs. >> do you think that regardless of what earnings do in the season, that the guidance will
10:08 am
be clear? will be more clear than we're used to? . i think we have an interesting development here. i followed the progression of earnings estimates week by week. they have continued to come down in recent -- the last two months, even though oil is up 15%, the dollar is down 6%. those have been two key drivers for earnings estimates over the past year or so. it seems earnings season could surprise to the upside here. we have not seen a bounce in expectations even those two drivers have recovered quite a bit. i wouldn't be surprised to see upside surprises here in the coming weeks. >> mike, i think it's worth pointing out, as each of these big companies comes to market, hundreds of man and woman hours will be spent on what they're saying what the earnings are and what evaluation is. therefore they should trade as
10:09 am
close to ever at fair value. this is an important earnings season with so many variables to reset where we are. we know we'll have fair value over the next six weeks otherr . >> i do agree, after three quarters of negative earnings, you're at a moment of truth. either this was the profit cycle or you'll have a revival. you had one of those in the '90s, one of those in the '80s. it's not particularly common, but it does happen. that's what is baked in second half expectations. >> and finally you say healthy bull markets are always based on valuation that is reasonable, earnings growth and supportive liquidity. for the past year you say we've been batting .330, 1 for 3. >> yeah, the valuation side is okay. forward p/e of 16 is in the middle of the range.
10:10 am
the liquidity argument has been clear with the fed tightening while the rest of the world eases. the dollar goes up, that puts the squeeze on the yuan, leads to fx draw downs, there's been an ill voluntary liquidity tightening, now the fed gets it. even the probability of a june hike is only about 14%. i think we have a reprieve on the liquidity side. it's only a reprieve, not a reversal of this policy divergence. and the third factor is earning. the earnings cycle did peak about a year ago in terms of earning s growth. a lot of the weak chance been in energy and materials. so does earnings growth actually go negative which hasn't happened for the last year, it was up about 4%, or is this just a moderation of earnings growth that's more benign, like we've seen in some other sort of mid-cycle slowdown cycles.
10:11 am
>> good stuff. mike g to see you. coming up on the program, an economist who knows a thing or two about negative interest rates, the former prime minister of italy, mario monti will join us to talk about where we are with the european union, the banks and much more.
10:12 am
10:13 am
uk prime minister david cameron is about to make a
10:14 am
statement defending his personal financial arrangements after revelations in the panama papers. it could be a watershed moment of the man trying to lead britain into the european union. if britain does vote to leave in ten weeks time, many argue the european union itself could start to crack. joining us now, the former prime minister of italy, mario monti, he famously blocked ge's takeover of honeywell. good morning. >> good morning. >> david cameron has done nothing wrong, but how worried are you about what's going on in the uk in advance of this referendum? >> i'm very worried because this may have wide-ranging implications. of course all this would not be there if david cameron himself
10:15 am
had not decided three years ago to facilitate his own personal and political future by finding a way to reconcile a certain anxiety of the uk people of europe and his position at the top. >> you don't think she have givgivhe should have given them a r referend referendum? >> that's my opinion. >> that strikes at populist forces striking back at the elites. if the uk decides to leave, that's the will of the people, yet you say they shouldn't have been given that choice in the first place? >> i think we all cherish our democracies. we don't have better systems,
10:16 am
but all our national democracies are going through a very dangerous drift. so many of the political acts that we consider natural are, in fact, slight or gross abusers of democracy. here, for example, the idea -- well, take the latest manifestation, the vault in the netherlands on whether the -- the agreement with the ukraine -- >> on thursday, they voted against. >> exactly. >> on 32% turnout. >> that's a very, very, very tiny minority of the eu people which can decide in the end for the outcome of the eu. so sh so -- so i believe that the ways
10:17 am
in which the democratic game is being played everywhere implies a great shortening of the time horizon. we are living like the chinese, dealing with the glory and monopoly of the long-term. they have plans about 2021 and 2049. >> in this environment what do you do? do you believe, for example, that free trade or many of the institutions that your generation and others built up are now under threat, can the european union survive if the uk votes to leave? doesn't it begin to crack when everyone else says we want our referendum, too? >> this is a big concession that was made by the rest of the eu. but when you mention financial
10:18 am
institutions, this is the key point. over the last several decades we have seen a mounting integration globally at the continental level in europe, with an effort to govern the globalization process. now, to me, the biggest victim of the kind of politics towards populism is precisely integration. it appeals to us particularly in europe, but this is a much more genuine phenomenal. look at the backward movements and the achievements of the wto in the last few years. even nationally look at catalonia, scotland at the eu level. elsewhere, i mean -- the u.s. is also turning more adverse in
10:19 am
terms of public opinion towards trade negotiations, for example. the u.s. is reducing its sympathy for global integration. one may have different judgments, but that's not the nature itself of the u.s. for us integration is the name of the game. so it is not so much to me brexit or exit, in the end i'm convinced neither will happen. it is this implosion from within that is a supposedly eu policy in the interest of the eu, which is simply a cacophony of conflicting 28 national short-term politics of leaders when they meet in the european council. and to be frank, and i will
10:20 am
conclude with this, it's not even national interests replacing the eu interests. in most cases it's person interests of the politicians involve involved, covered up by the word national interest. >> one last question. why don't you think brexit will pass? >> for two reasons. first of all, i think the british people after all are very pragmatic. they will see what is at stake. secondly, however weakened and short-sighted mr. cameron may be in the circumstances, i think he will do the utmost to avoid going down in history as the actor of
10:21 am
decintergration. >> it will be great to talk on, but we've run out of time. thank you for coming. mario monti there, the former prime minister of italy in when we come back, some first quarter forecasts for gdp have plunged, but should investors still plan on a rebound in q2? don't go away. ife ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call now and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, it helps pick up some of what medicare doesn't pay.
10:22 am
and could save you in out-of-pocket medical costs. to me, relationships matter. i've been with my doctor for 12 years. now i know i'll be able to stick with him. [ male announcer ] with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients. plus, there are no networks, and virtually no referrals needed. so don't wait. call now and request this free decision guide to help you better understand medicare... and which aarp medicare supplement plan might be best for you. there's a wide range to choose from. we love to travel - and there's so much more to see. so we found a plan that can travel with us. anywhere in the country. [ male announcer ] join the millions of people who have already enrolled in the only medicare supplement insurance plans endorsed by aarp, an organization serving the needs of people 50 and over for generations.
10:23 am
remember, all medicare supplement insurance plans help cover what medicare doesn't pay. and could save you in out-of-pocket medical costs. call now to request your free decision guide. and learn more about the kinds of plans that will be here for you now - and down the road. i have a lifetime of experience. so i know how important that is. doing small gigs,side gigs...gig gigs. quickbooks self-employed helps me get ready for tax time. to separate expenses,i just swipe. it's one hat i don't mind wearing. [passenger] i work for me. and so does quickbooks. it estimates my taxes,so i know how much stays in my pocket. and that's how i own it. [announcer] stay in the flow with quickbooks self-employed. start your free thirty-day trial today at join-self-employed-dot-com.
10:24 am
forecasts for q1 gdp have fallen from a high of 2.3 to as low as 0.1. should investors count on a rebound or something more troubling at work? steve liesman is back at hq. good morning. >> big debate on wall street over weak first quarter numbers. is it a sign of really weakness in the economy or statistical noise? we have data this weekend, fed speak may have put meat on the bones of the argument. the forecast had been as high as 2.3% in february. it's come all the way down. every data point that's come in the average now -- the median now is 0.6% with some, as carl
10:25 am
said, as low as 0.1%. the big one here, a half point on march 28th when it came to disappointed revised down spending numbers. all of these data points are different parts of the economy, retail, inventory and trade. the impact of the dollar. this is not isolated to a single part of the economy. let's see what different wall street houses have done here with their tracking. the atlanta fed, down 2.5% to 0.1. barclays down 2.2. goldman sachs down 1.2. mark zandi don't 1.1%. the bull argument is hey, we're back again to weak first quarter growth. the seasonal issue we've seen time and again. 2014, negative. bounced back big time, 4%. barely positive q1 2015, bounced
10:26 am
back nearly 4%. here we are again with some on the street, jpmorgan writing this weekend that we could have another 2% growth. they're banking on the second quarter rebound. we will get some information on this this week, retail sales on wednesday. imf, world bank meetings, tomorrow morning, don't miss robert kaplan, dallas fed president. we have an interview with him on "squawk box" tomorrow morning. back to you, simon. >> okay, steve. thank you very much. straight ahead, uk prime minister david cameron is set to go before the house of commons in just a few minutes to address his own finances having been essentially implicated in the panama papers. he is the man arguing for britain to remain within the european union. ve management. we actively manage with expertise and conviction. so you can invest with more certainty. mfs. that's the power of active management.
10:27 am
it's more than tit's security - and flexibility. it's where great ideas and vital data are stored. with centurylink you get advanced technology solutions
10:28 am
from a trusted it partner. including cloud and hosting services - all backed by an industry leading broadband network and people committed to helping you grow your business. you get a company that's more than just the sum of it's parts. centurylink. your link to what's next. great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you.
10:29 am
even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. good morning. i'm sue herera, here is your cnbc news update. an historic visit to japan. secretary of state john kerry visiting the revered memorial to hiroshima's i tommatomic bombin. no serving president has ever visited the site. syrian government forces and rebels clashing in the north, in an indication that the latest cease-fire may be breaking down. chicago's mayor, rahm
10:30 am
emanuel, says more than 450 new body cameras are being shipped to the city this week. those cameras will be able to record audio and video in hd for up to 72 hours on a single charge. and this was so hard to watch. a collapse for the ages at the masters. gordon spieth blowing a five-stroke lead on the back nine at agusta. bogey on 10, bogey on 11, yikes. as you can see, quadruple bogey 7 on the 13th. he hit the water twice and in the space of 90 minutes spieth lost eight strokes to eventual winner danny willett. he led the masters for seven straight rounds. it's just painful. that's the cnbc news update. back down to guys. we were all sitting at dinner going, oh, no, what happened. >> yes, we're not involved. imagine if you're there. sue, thank you. let's take toyou to the hou
10:31 am
of commons in london where the uk prime minister is about to address concerns about his own finances. his authority is leading the campaign to keep the uk within the european union. that referendum in less than ten weeks, june 23rd. therefore you have the opposition and his own out-voters attempting to weaken his authority through these revelations now for a weak on the panama papers. he is going to offer a crackdown, criminality in the case where businesses aid people to use tax havens, we think. it's a very important moment. it's potentially a watershed for uk politics and this debate. opinion polls are neck and neck as to whether britain will remain in the european union. if they do leave that could weaken the eu overall as other member states decide they, too, would like a vote or they would like to reject part of the treaty that ultimately they don't like.
10:32 am
usually we start on time. prime minister is effectively making a statement after they were on holiday for the easter break. this is the first time they will be able to listen to what he has to say about his own finances. he hasn't done anything wrong, but the optics are fairly poor as far as most people are concerned. effectively it involves a trust that his late father set up and which he did benefit from before he became prime minister. he sold out, effectively $42,000 worth of that trust that was held in panama. he said he paid his taxes, but clearly he needs to regain the upper hand here politically in order to move forward the argument that the uk should remain within the european union. this is -- these are questions to the home secretary that are coming through. usually they start fairly swiftly on time. the speaker will call to make the statement. as i say, this has been watched
10:33 am
not just within the uk but around the european union more broadly. don't know if you want to stake with this or come back. we seem to be slightly late here. >> let's get to some oil prices this morning, which is having its best day in a while. jackie deangelis is at the nymex. we broke through $40 a barrel early on. key technical and psychological level. this week traders will be looking to the d.o.e. report on wednesday to see if there's more evidence that u.s. production is declining. the pace has been slow but steady so far. also this is the week ahead of the doha meeting. so investors will be cautious because you never know what did happen. also supply constraints out there. some of it seasonal, some of it temporary outages. but the demand picture is confusing people a bit. a bit mixed.
10:34 am
barklclays pointing out there's some diesel overhang, then bernstein saying second half demand will pick up. and we could see $60 oil at some point at the end of the year. gas prices are creeping up. the lundberg survey saying the national average is up 8 cents in two weeks, 2.10 across the country. >> jackie, thank you very much. earnings season is upon us that meanings it's a big week for bank earnings. let's bring in for analysis paul miller who joins us from fbr capital markets. this is the eye of the storm for many people. do you think stocks could -- forgive me, david cameron just got to his feet in london. >> yesterday i published all the information in my tax returns, not just for the last year but for the last six years. i've given additional information about money inherited and given to me by my family so the people can see the sources of income i have.
10:35 am
my salary, the benefit in kind of living at number 10 downing street, the support my wife and i have received as leader of the conservative party, the renting out of our london home, the interest on the savings i have. since 2010 i've not owned any shares or investments. the publication of a prime minister's tax information in this way is unprecedented but i think the right thing to do. let me be clear i'm not suggesting this should apply to all mps. there is published information to the shadow chancellor. this begs the question however the tax information should go. mr. speaker, i think there's a strong case for the prime minister and the leader of the opposition and for the chancellor and shadow chancellor because they are people who are, or who wish to be responsible for the nation's finances. as for mps, we already have robust rules on members
10:36 am
interests and their declaration. i believe that's the model we should continue to follow. we should think carefully before abandoning completely all taxpayer confidentiality as some have suggested. people would then also ask for a similar approach for those who ask us questions, run large public services or lead local government or, indeed, those who edit the news programs or newspapers. i think this would be a very big step for our country. it certainly shouldn't take place without a long and thoughtful debate and it is not the approach that i would recommend. mr. speaker, let me deal specifically with the shares my wife and i held in investment fund or unit trust called blairmore holding. the fund was registered with the uk's inland revenue from the beginning, properly audited in an annual return, submitted to the inland revenue every year. the share price was listed in the financial times it wasn't a family trust.
10:37 am
it was a commercial investment fund for any investor to buy units in. uk investors paid all the same taxes as with any other share including income tax on the dividends every year. mr. speaker there have been some deeply hurtful and profoundly untrue allegations made against my father. i want to, if the house will let me put the record straight. the investment found was set up overseas because it was going to be trading primarily in dollar securities so it made sense to be set up inside one of the main centers of dollar trading. there are thousands of these investment funds, millions of people in britain who own shares, many of whom old them through investment funds or trusts. such funds including those listed outside the uk are included in the pension funds of local government, most of britain's largest companies and even some trade unions. even a quick look shows the bbc, the mirror group, guardian
10:38 am
newspapers and islington all have these sorts of overseas investments. to give one further example, the trade union fund managers limited in congress house, they have a portfolio of over 50 million of investment in the trade union unit trust with 3% of their net assets based in jersey. this is not to criticize what they do. it's to make the point this is an entirely standard practice and it is not to avoid tax. mr. speaker, one of the country's leading tax lawyers, graham arrenson has stated unequivocally this was a perfectly normal type of collective investment fund. mr. speaker, this is the man who led the expert study group that developed the general anti-abuse rule, so much debated and demanded in this house, which parliament enacted in 2013. he chaired the 1997 examination of tax avoidance by the tax law of the uk committee.
10:39 am
he said it would be, and i quote, quite wrong to decembscr the establishment of such funds as tax avoidance and utteryouav. that is qui why getting rid of unit trusts has not been a part of labor party review, conservative party review or addressing tax evasion. investors of these funds benefit being set up in jurisdictions with low or no taxes. unit trusts do not exist to make profits for themselves but for the holders of the units. those holders pay tax. if they're uk citizens, they pay
10:40 am
full uk tax. as we do so, we should differentiate between schemes designed to artificially reduce tax and those that are encouraging investment. mr. speaker, this is a government and this should be a country that believes in aspiration and wealth creation. so we should defend the right of every british citizen to make money lawfully. aspiration and well creation are not somehow dirty words. they are the key engines of growth and prosperity in our country, we must always support those who want to own shares and make investments to support their families. some people have asked if this trust was legitimate why did you sell your shares in january 2010? mr. speaker, i sold all the shares in my portfolio that year because i didn't want any issues about conflicts of interest. i did not want anyone to be able to suggest that as prime minister i had any other agendas or vested invests. selling all my shares was the simplest and clearest way to do
10:41 am
that. there are strict rules in this house for the registration of share holdings. i followed them in full. the labour party said it will refer me to the commissioner for parliamentary standards. i have already given her the relevant information, if there's more she believes i should say, i am happy to say it mtchlit. mr. speaker, i was angry about the way my father's memory was being reproduced. he was a hard working man a wonderful dad, i'm proud of everything he did to build a business and provide for his family. mr. speaker, on the issue of inheritance tax, there's an established system in this country far from people being embarrassed about passing things to their children like wanting to keep a family home within the family, i believe it's a natural human instinct and something that should be encouraged. as for parents passing money to children while still alive, it's
10:42 am
something that the tax rules fully recognize. many parents want to help children when they buy their first car, get a deposit for their first home or face the cost of starting a family. it's entirely natural parents should want to do these things and again it's something that we should not just defend but we should proudly support. let me turn to the panama papers and the actions that this government is taking to deal with tax evasion, aggressive tax avoidance and international corruption. when this government came into office there were foreigners not paying capital gains tax when selling uk homes, private equity managers paying a lower rate of tax than the people who cleaned their offices and rich home buyers is getting away without paying stamp duty because houses were enveloped within companies. we have put an end to all of these things. in the last parliament alone we made an unprecedented 40 tax
10:43 am
changes to close loopholes that raised 12 billion pounds. no british government labour or conservative has taken so much action in this area. in 2013 i put tax, trade and transparency on the global auto exchange of information on who pays taxes and where. many said it would never happened. today 129 jurisdictions have implemented the exchange of tax information on request and over 95 jurisdictions have committed to implementing the new global common reporting standard on tax transparency. in june this year, mr. speaker, britain will become the first country in the g-20 to have a
10:44 am
public register of beneficial ownership so everyone can see who really owns and controls each company. this government is also consulting on requiring foreign companies that own property or bid on public contracts to provide beneficial ownership information and we're happy to offer technical support to administrations also considering these measures. as the revelations in the panama papers have made clear we need go further. so we're taking three additional measures to make it higher for people harder for people to hide corruption and to investigate wrong doing. let's deal with our overseas territories that function as financial centers. they have already agreed to exchange taxpayer financial account information automatically, and will begin doing so from this september. that never happened before i became prime minister and got around the cabinet table and said to them this might happen.
10:45 am
mr. speaker, today i tell the house that we agreed to provide uk law enforcement and tax agencies with full access to information on the beneficial ownership of companies. we finalized arrangements with all of them except anguilla and gurnsey. for the first time uk police and law enforcement can see who exactly controls -- >> the uk prime minister saying he has done nothing wrong. he would debate all laws in terms of paying taxes. the uk is not currently involved in a general election but you have a robust defense of aspiration, wealth creation and the desire to leave wealth to your children, which arguably may be missing somewhat in other campaigns that you would see around the world. quick check on themarkets. up 73 points on the dow.
10:46 am
10:47 am
10:48 am
10:49 am
monday morning on cnbc, the dow is up 78. let's get to rick santelli in chicago for our first exchange. good morning, rick. >> good morning, simon. i'd like to welcome my guest, andy rothman. thanks for taking the time this monday morning. >> good morning, rick. >> good morning. viewers, listeners, andy and i met a while ago. i was always fascinated with how he dug into the issues, fundamentals of china. he has unique perspective. when i look at china, one of the first things i discussed with sources are things like gdp, the size of its economy, how much it's contributing to global economic horsepower.
10:50 am
sometimes you take a different route. tell us how you look at china these days in simple terms. >> okay. let's start by talking about how much things have changed in china. that's something people miss. when i first went no private companies. not even privately owned restaurants. today more than 80% of employment, all of the new job creation in china comes from small, privately owned entrepreneurial firms like here. and that's really important to understanding the government there is capable of making big changes. >> now, when it comes to capable making big changes, no disagreement here. but just today i was reading an article about how we're going to see so much unloaded on the global economy, like steel, aluminum, the ship building industry, chemicals, flat glass, paper and how 1 million manufacturing jobs are going to be gone. yes. there are some kind of free market enterprises. but state-owned is in front of media there. doesn't that make a world of difference that we have
10:51 am
individuals versus market forces? >> well, we have to put in context. there are parts of the chinese economy that are in really bad shape, both in terms of industries, like steel and ship building. there are parts of the country that are the rust belt. but other parts are growing fast and making change there too. last year, chinese industry lost 5.8 million jobs, including more than 400,000 in steel, and 400,000 in the ship building industry. so those things are changing too. the other thing i would add, rick, when the gdp number comes out friday, don't spend a lot of time looking at it. how much time do our investors look at the gdp number in the united states and wrap that into a key part of their investment-making decision? look at the same things in china we look at here. how are jobs doing? how is income doing? how is consumer spending and inflation doing? is all those things are holding up quite well. >> all right. now, no argument there. and in a final half minute, i guess my issue is, i would like to see the notion that leadership there maybe let's a
10:52 am
little bit of the rope out. but it seems as though the rest of the world is moving more towards the china model. i call it faith-based policy. you have to believe. because senior officials no better than the market. do you think there's going to be any changes in the regard we'll be able to eventually look to china more as allocating resources based on market forces, or are current market conditions going to make that adjustment impossible? your final thoughts. >> actually, i think, rick, that's already happening. most bank credit is now going to private enterprise and to households. last year, it two-thirds of gdp growth came from consumption. this is going to be the fifth consecutive year in which services in the consumer part of the economy is bigger than manufacturing and construction. i think that they're well on their way towards becoming more like us. >> excellent. andy, always interesting to talk china with you. simon hobbs, back to you. >> thank you very much, rick. we're seeing something of a significant reversal in the dow
10:53 am
early in the session. the dow was up 154 points, as you can see. we basically halved that, and then some. currently up 69. more on where we are, a big week for earnings, when we come back. the kitchen...that's home. that's like my grandma cooked, my mom cooked. i make a lot of banana bread because the baby likes bananas. (laughs) whatever home means to you, we'll help you find it. zillow.
10:54 am
(ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...) man snoring (don't fear my darling...) (the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store.
10:55 am
great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business.
10:56 am
dow up 73 points on the dow. kind of the lull before the storm with earnings season kicking off this week with the banks. top loser today, under armour after the recent stock split. stock down 4%, another down slightly more. one of the top gainers today is gamestop. gamestop has said it will have its investor day thursday. maybe moving in advance of that. coming up on the network, legendary film maker ken burns, premiering a new documentary on jackie robinson tonight on cbs. that's next on cnbc. h. aflac! isn't major medical enough? no! who's gonna' help cover the holes in their plans? aflac! like rising co-pays and deductibles... aflac! or help pay the mortgage? or child care?
10:57 am
aflaaac! and everyday expenses? aflac! learn about one day pay at blurlbrlblrlbr!!!
10:58 am
it's more than a nit's reliable uptime. and multi-layered security. it's how you stay connected to each other and to your customers. with centurylink you get advanced technology solutions, including an industry leading broadband network,
10:59 am
and cloud and hosting services - all with dedicated, responsive support. with centurylink as your trusted technology partner, you're free to focus on growing your business. centurylink. your link to what's next. good morning. it is 8:00 a.m. at facebook headquarters in menlo park. 11:00 a.m. on wall street. and "squawk alley" is live. ♪
11:00 am
♪ welcome to "squawk alley" for a morning. kayla tausche and myself at post nine. john out today. we welcome back this morning from palo alto, roger mac that me coming back from a very nice tour. roger, good to see you again. stocks are off highs of the day. nasdaq positive in the month, rebounding from february. the president set to meet with fed chair yellen at the white house to discuss the economy and wall street reform. and roger, we have seen a bit of a turn around since you last joined us, all major indices up more than 10%. i wonder if things got cheap enough in february for you. to start taking advantage of stocks. >> it's a great question, carl. you know, to me


info Stream Only

Uploaded by TV Archive on