bob, we said it was the worst day in some two weeks for the stock market. down 43. >> what does that tell you? >> right? >> i want to put up the dow industrials. i believe it is, here, and, yeah, we should be. let's put up the dow industrials. because all the real action really came in the last, really, the last hour. and we want to put up this comment from john williams. john's the head of the federal reserve bank of san francisco. and a number of fed officials commented today. but he came out around 3:00, with some headlines, saying that the fed could begin easing up on bond purchases later this year. now, this was important, because mr. williams is a dove. and so people who have been believing that the fed might taper their purchases later thi! williams is a dove, this is a strong indication that the fed is going to do something, so they jumped on that. remember, a lot of people now have positions around this and believe something's going to happen so people are looking for anything they can find to get on top of that argument. i think there's two problems, number one, he's not a voting member of the fmoc, and number two, the economic data has not been very good recently, and he went on to say, the barrier is going to be fairly high. we've got to see some consistently strong economic data for us to do that. it's really not evident yet. so i don't put too much into this, but i can see why on a fairly slow day, a number of people seized on his comments. put up the sectors and we'll show you, fairly indeterminant day. tech, materials, and energy doing a little bit better than the defensive names like utility and health care. finally, one thing that people are talking about isn't the stock market, it's the bond market. again, we're seeing another strong day in bonds moving to the upside. this in response to the, frankly, crumby economic data that we've been getting in the last couple of days. guys, back to you. >> not crumby for dell, at least on the revenue side. earnings just coming through and the revenue does look like a top line beat, but that earnings figure is well shy. let's get out to jon fortt for the personal computer -- do we need to spell it out at this point -- pc maker's numbers. jon, what can you tell us? >> revenue at $14.1 billion, a little bit better than people were expecting, but eps, as "the wall street journal" also predicted, lighter than expected at 21 cents. some people thought it would be 20 cents, so that's maybe a little better than the diminished expectations. interesting to note, though, here, it's not all bad news across the board. the surprise services group, enterprise solution group, was up 10%. the services group, up 2%. the really problem area here is end user computing. revenue in that group is $8.9 billion, a 9% decrease. operating income for that group, $224 million. a 65% decrease. so as expected, the big decrease in the pc, overall pc market, we saw it down 14% in the first quarter, affecting a lot of pc makers, especially affecting dell, where 70% of its revenue is either directly pcs or the ecosystem around pcs. some of the other areas in dell, however, holding up pretty well. this, of course, going to impact mike dell's efforts to take dell private. carl icahn's efforts to say that michael dell is seeking to get this on the cheap. this deterioration in the pc market is the main lever that's going to cause this to swing one way or the other, guys. >> jon, thanks so much. let's get more reaction now to the dell earnings. i want to bring in ctacar to react to this how would you characterize what dell is reporting? >> that sounds about online with what we were expecting. michael really does try to articulate, so that's growing. >> the you look at what's growing here, whose side do you think that these earnings played better into? right, on one happened, michael dell needs to convince his shareholders that the company is in such bad shape to vote for our deal, because the only way we can fix it is to take it private. and on the other hand, you've got carl icahn saying, the company is in such bad shape, you need a guy like me to come in and fix this thing and focus on some of the key areas that the company's performing in. >> that's a good question. and it sounds like it was actually a combination of both. i think michael dell would have been better suited if the solutions group had actually stayed a little bit familiarity. but you did see some serious price compressions and some sales declines from the hardware side, it sounded like. so that does lend credence to the fact that michael dell is saying, you know, this is going to poorly that we need to take this behind closed doors in order to make this entire company work. it's going to be an end-to-end solutions package. and we don't want investors and shareholder pressure trying to spin this off, because then we're basically an ex-pc company with just a solutions business. and that doesn't drive too much value with customers, i wouldn't think. >> carr, just walking through these numbers, fundamentally, where do you think dell goes from here? >> i'm sorry, say that one more time? >> where do you think dell goes from here? what does this mean just in terms of its strategic options? >> well, that's another good question. we think that, actually, carl icahn's bid constitutes a superior offer, if he can line up the financing and demonstrate that. his offer allows shareholders to participate both in the upside and mitigates the downside by allowing shareholders to participate in a $12 dividend payout. and then those shareholders that are actually very bullish on dell's future can double down. and so he would be one of those. southeastern asset management would be one of those. and so you could actually increase your exposure by doing -- by taking that route. so we think that that is a superior offer, yeah. >> carr, thanks. good to talk to you, carr lanfooer, morning star. and today we have the bulls versus the bears. >> michael jones of riverton investment is still a believer. john splat zanny agrees, seeing no nend sight to this rally. but randy bateman of huntington funds has been taking money off the table, and rob warns investors not to lose sight of the challenges that face the u.s. economy. gentleman, thanks for joining us. rob, let's start with you. so we've got a day where we've got the dow shedding about 40 points. is that consistent with where you think we go from here? the start of another downward move? >> well, long-term, kelly, we do think the market is going to be in a continued bullish trend. but after a 17% increase year-to-date, we wouldn't be surprised to see some short-term pullback. having said that, there are many opportunities for investors, we believe, as the market becomes a little bit more challenged and investors look for substance in earnings, we're favoring high-quality, high return on equity companies, such as pepsi, such as 3m and adp, that have the fortress-like balance sheets is and cash flow to determine their own futures and provide that consistency of future earnings. that's really where we see the opportunities. >> randy, what about you? what are you doing? same thing? starting to take money off the table? >> for some very good reasons, our market has done quite well. we're up about 17%. but if you put that in perspective, if you look at the emerging markets, they're basically flat year-to-date. so there's a valuation disconnect there. our markets, about a 17 time muppet. the emerging market, about 11. and if you look at where global growth is coming from, since 2009, 55% of the growth has come from the bric nations. another 25% of global growth has come from the emerging nations. and only 20% has come from the developed nations. so to us, if you really want to find some growth, it's time to maybe take a little bit off the domestic market and put it into the emerging markets, a very attractive area. >> john, where do you see us going from here and what's going to get us there? >> well, i think, you know, continually, you have to fight the fed and the bank of japan, actually. that's $2 trillion per year, that they're pumping into the market. obviously, david tepper concurs. we think that if they do taper, that will be a positive sign. we think the exit to all this qe may last, at least, ten years, before they normalize policy and also the yield curve. so as long as the yield curve t-bills are at 0.1%, 30s or teetering around 3% and the tens are teetering around 1, 0.8%, we think there's no alternative to put your cash, as well as the fact that emerging markets, you know, let's talk about japan. japan has been in depression for 20 years. it's the third largest economy in the world. you know, couple japan with the united states, pumping in $2 trillion a year, with some of the best managements on the globe, and you want to be short this market? i just don't see it. >> right. and michael tepper also used a word, somewhat hesitantly -- >> goldilocks. >> yes. >> we've used that word too. you know, we have the fed missing on both of their mandates, they're missing on inflation, they're also missing on employment. the fact that mr. ip said that if the fed did nothing, employment might be 7.5, 8%. well, employment probably would have been 15%, the unemployment rate. so given the fact that that was what bernanke faced, what he was doing was not confounded that much with the zero bounds that he faced. so if we look at past easing cycles, you know, what's the difference between raising -- lowering fed funds from 8% to 4% or the fed doing qe. we see it at the same time. >> michael jones, you just heard john there say ten years before there's any kind of exit in qe. what do you think? >> i think there's no question that the fed has kind of painted themselves in a corner, with the kind of debt that we've accumulated, if they raise interest rates, the budget deficit will reverse the improvements that we've had pretty quickly, because of rising interest costs. so i do think the fed is an an aggressive mode for a very long time. i also think shorter term, while we are in a normal environment, we'd be ready for a pullback here. this is kind of a mel brooks market. you've got all this liquidity coming in from the fed and the bank of japan. makes it harder for a pullback to be sustained. the other thing that's happening, six months ago, we were looking at trillion-dollar deficits as far as the eye can see. we're now looking at the cbo revising down deficit estimates very aggressively, the combination of the sequester, the fiscal cliff tax hikes. we're looking at 2% in less than two years. it's one of the reasons why the market is saying, we're now able to wean ourselves off this debt-dependent growth without a recession. that's critical. >> we haven't even mentioned the energy dividend that's awaiting us in the next five years. you know, the fact that the united states is going to be a big energy independent within five years, the fact that we're going to be accounting for 50% of the oil production in the world, how could you discount that? i just don't see it. >> i see everyone nodding. everyone loves the energy story, that much is for sure. whether you're an optimist or pessimist on more on the market is next. two weeks ago, it was an apology video, and this week, after a tumultuous reign, jcpenney is thanking retailers for coming back. but was jcpenney premature in its victory lap? we'll find out. >> and taco bell's ceo joins us to tell us just how a new product spiked up the job market and sales in his latest menu item do the same? >> then later in the show, we'll have the latest on the irs scandal that's rocking the nation, as congress prepares for more hearings tomorrow. you are watching cnbc, first in business worldwide. [ female announcer ] it's time for the annual shareholders meeting. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪ [ roars ] ♪ [ roars ] ♪ [ roars ] ♪ [ roars ] ♪ [ male announcer ] universal studios summer of survival. ♪ is the market experiencing a profitless rally? that's what cnbc.com's jeff cox says. >> jeff is here with us now. also kevin polcari. what do you mean, profitless rally? >> we're talking about corporate profits and how that's going to reflect on the rally going forward. it's all kind of about peeling the back the layers of the onion here and figuring out what's getting the rally going. a little while ago, we were able to make the argument that stocks are cheap. that was back when stocks were trading about 12 times earnings. we're up to about 14 or 15 times earnings right now. stocks aren't so cheap anymore. you compound that with the fact that companies are about 4 to 1 negative guidance to positive guidance for earnings going forward. if we are going to continue this rally, i think it is going to have to be, basically, a profitless rally. >> danny? >> it's frustrating, because he's absolutely right. every time we see negative news come out, whether it's earnings or macro or keep taking the market higher, today's a perfect example. the numbers out today, all negative across the board. the market rallied early, sold it off a tiny bit at the end. but it's frustrating there's a disconnect -- >> somebody's making profit, cisco's numbers are pretty good. >> dell's numbers are terrible. >> are you going to judge the market on what dell reports? >> are you going to judge the market on what cisco reports? >> i would say cisco has a hell of a lot more to do with the health of the economy than dell does. >> that might be true, but i don't necessarily you can take one company, one stock and make a judgment about the market. >> 69% of companies beat on the bottom line. >> whoa, whoa, whoa -- i love how they do that. >> i knew that was going to get you guys -- >> mr. top line! >> 47% missed on the top line and a very weak top line forecast. i think the point is here, what you have to do is look, going forward, you have to be very selective. you'll have to look for -- my feeling, number one criteria is stock buybacks is what's going to propel this rally going forward. >> if you look at corporate profits since the trough, we've seen a pretty sharp rebound. it's no wonder the market has followed that. yes, there's some engineering going on here. but this has not been a profitless rally. is your argument that now it begins to be one? >> my argument is going forward. >> so you're saying we keep going here, despite the fact we're seeing the negative row announcements? >> i don't think you're going to see a 15% rally over the course of several months. i'm not making a big, bearish call here. just, i think it's going to be more selective call here. you're really going to have to watch out and look for what you're buying here. >> you can't really make a bearish call, because the market is clearly being supported by every central banker around the world. no matter what, the company is not going to trade on fundamentals the way it should. the minute they talk about the fed pulling back the market rules, they get nervous. the volume picks up on the down days and very light on the up days. >> look at what we saw today, benign comments out of san francisco -- >> oh, the market went down 40! >> it was a benign move lower anyway. >> but it was a move. and i think it just shows that this market is sensitive to anything. >> it's always going to be sensitive. if you look at -- and you make the statement that stocks aren't necessarily cheap anymore. there are certain stocks in big groups of stocks that have not participated in the rally to the level that others have, and they look cheap relative to some of the other more expensive ones. >> that's why he said, it's going to be very spot specific. you can't just broadly buy the market. >> people have been saying that the entire rally. the entire way up, people have been saying, you've got to be specific. and that's not been the case. >> i have not. i mean, i've actually been a big fan of index funds going through here. >> up until now. >> up until now, yeah. >> and now it's going to start to get a little bit dicier, just because we are back at 14 times or closer to 15 times, which is really much more fair value, right? so unless they really start delivering, i think it's going to be a struggle. >> good to see you. now for today's addition of as the irs scandal turns, it's a new soap opera here, another new twist in the story. live to washington for the latest developments, next. plus, how are bloomberg clients taking the news that the financial services giant feeding them data is also a competitor? we'll have a rt eport coming up. we're back in a moment. e compled every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers. [ male announcer ] this store knows how to handle a saturday crowd. ♪ [ male announcer ] the parking lot helps by letting us know who's coming. the carts keep everyone on the right track. the power tools introduce themselves. all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that's stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy. busy day in scandaltown, as a presidential news conference with the turkish prime minister was dominated by questions on the irs scandal. john harwood has the latest developments from washington. john? >> reporter: scott, the biggest news today, aside from the fact that the president appointed a mid-level omb official as the new acting irs commissioner, he fired the old one yesterday, was that the president ruled out the calls that have been made from some for a special council, special prosecutor to take over this case. he said, in light of the inspector general's rooteport t the irs has done, that the treasury has done, that the various congressional committee investigations, and more beyond that, that we've got plenty of investigating. >> the ig has done an audit. it's now my understanding going to be recommending an investigation. and attorney general holder also announced a criminal investigation of what happened. between those investigations, i think we're going to be able to figure out exactly what happened, who was involved, what went wrong, and we're going to be able to implement steps to fix it. >> now, earlier today, i also interviewed the chairman of the house and senate tax writing committees. dave camp, the chairman of ways and means is having a hearing tomorrow on this same issue. i asked him what he wanted to hear from steven miller, the guy who was fired as the acting irs commissioner. he said there's plenty still to hear from him, including exactly what the motivation was for what the irs did. >> well, he's still the acting commissioner until june. so he's still the guy. we have a lot of questions to answer. >> do you personally have any reason to believe, or do you believe, that the white house was involved in this? >> again, i don't know thee answers. we need to get answers. and we're going to follow this where it goes. >> and ultimately, that is going to determine whether or not, scott, this scandal turns into a long-lasting problem for the white house. and that is the question about whether it goes beyond the irs. the inspector general of the treasury department said, no, but that's not going to be the last word, because of all those investigations the president referred to. >> yeah, all right, john. thanks so much, john harwood for us at the white house. >> and it's from one battle to another. jpmorgan chairman and ceo, jamie dimon, fighting to keep both of his titles ahead of next week's shareholder meeting. the banking giant enlisting the help of a former white house chief of staff. >> an unlikely negotiator in the face of jpmorgan, currently facing a nonbinding proposal from shareholders to split the role of chairman and ceo. it's bill daley, before serving as president obama's white house chief of staff from 2011 to 2012. daley held discussions with organizations pushing for that split. the topic of discussion, source of the group's consternation, and whether a kproepgs at this stage of the vote is at all possible. one person familiar president matter said that it was communicated that it was too late to broker a deal. the vote, of course, is next tuesday. now, as public opinion starts to gel ahead of it, daley not the only jpmorgan alum coming to dimon's defense. larry bosserty did so this morning here on cnbc. >> i can't help but think it's misdirected and misguided. if you take a look at the history of what's happened since dimon's been there, he navigated through the shoals of the 2008 financial collapse without any problems, they didn't have a loss quarter, they didn't need t.a.r.p., they took it to be a team player, and therefore they've had three record years of earnings, a return better than most. >> less than a week to go before the vote. today, jpmorgan shares hit a 52-week high. kelly? >> kayla, if people think jamie and the white house are too close already, i'm not sure this news helps defend that argument. but kayla tausche there with the latest on that story. >> it is ticktock on jcpenney earnings. the struggling retailer posting results any minute now. we'll have full team coverage of jcp's numbers next and discuss whether it was right in giving former ceo ron johnson the boot. also coming up, in google we trust. g-mail account holders will soon with able to send money as an e-mail attachment. we'll talk about the game-changing potential of that bold new movie. and we've got taco bell's newest tacos in the house and we'll talk about the fast food chain's ceo about its product line. >> this is the nacho cheese taco, it is expected to be ordered and the company says it has created thousands of jobs. >> something like 15,000 jobs. >> do we really believe it? do we think the taco is responsible? we also want to know if their next product can do the same, a waffle taco. a breakfast item, that's being tested right now. >> we had a picture somewhere. there it is! the waffle taco. >> we'll talk to the company's ceo when we come back. a simple question: how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ with the innovating and the transforming and the revolutionizing. it's enough to make you forget that you're flying five hundred miles an hour on a chair that just became a bed. you see, we're doing some changing of our own. ah, we can talk about it later. we're putting the wonder back into air travel, one innovation at a time. the new american is arriving. bny mellon combines investment management & investment giving us unique insights which help us attract the industry's brightest minds who create powerful strategies for a country's investments which are used to build new schools to build more bright minds. invested in the world. bny mellon. jcpenney will be out with its earnings any moment now. the company released preliminary results last week, expecting a decline in sales of more than 16%. >> well, will thing get worse before they get better for the struggling retailer? joining us now, a cnbc contributor stacy widlitz and bert flickinger. stacy, great to see you. so what are you expecting to hear from the company? what do they have to post today? >> well, we already know the comps were down over 16%. and actually on that two-year trend, that was worse than last quarter. if anyone was questioning getting rid of ron johnson, there's your answer. but i think, certainly, we're going to hear from mike ullman, the new ceo, and we want to hear, what is may, what is the start off to? they have brought back couponing, they've sent an apology message to the consumer. are they coming back in the stores? >> bert, it's not the numbers that are really going to tell the story. because they're backward looking and they closed out the ron johnson era. but it's anything mike ullman has to say about where the business seems to be trending that the street is going to be paying most attention to, don't you think? >> you're right, scott. and it's the vendors who are critical, because if they lose confidence in penny, working capital could lead to a possible bankruptcy restructuring at the end of the year. >> actually, we understand the numbers are out. the stock is moving. courtney reagan has those. >> i'm down here in dallas, because the jcpenney shareholder meeting is tomorrow. this is what we have so far. the number for jcpenney, first quarter earnings, a loss of $1.31. the street was looking for a loss of 0.86. much, much worse than what we had anticipated or at least what the analysts had been forecasting. the revenue numbers does come in at $2.64 billion. remember, that's what they gave us in the pre-release, but that was un-audited. that is now confirm. the comp store sales down 6.6%. it's a bad number, but it could have been much worse, and it's better than the down 32% that we saw in the holiday quarter. i know that shares were up about 1% in today's trade, up 1% before earnings were released. i'm sure they're moving now. interesting things coming out here today. i'm sure we're going to hear more from ceo mike ullman on the earnings conference call when he leads that at 5:00 eastern time. i'll be back on to update you with what he says. but for now, jcpenney posting a loss, $1.31 a share for the first quarter. back to you. >> stacey, if you look at the earnings, and given what the stock's doing, perhaps it's the market thinking that this was the kitchen sink quarter. that the worst is now out and then mike ullman's going to get some direction going here. if you factor in that soros is involved now as well. >> right, so i think you have to give ullman some time here. he just came in the beginning of april. the quarter closed the beginning of may. so you have to give him some time to go out to the consumer and say, we're going to give you back your coupons. that's why you ran away from us. so, certainly, we want to hear about the progress in the home launch. you know, certainly, the construction there has been behind schedule. so that's been a drag. you know, just looking at the press release here, it looks like margins are down about 700 basis points. you know, a little worse than last quarter. so we want to hear how we're going to get the consumer back and if they're going to offer coupons, what's going to happen to gross margins. >> right, especially heading into the holiday period. they're going to have to be aggressive when it comes to pricing feining if they want to people in the stores. >> to your point, jcpenney's profits and gross margins have plunged so much, they're more like a grocery store more than a family fashion retailer. this is quite concerning for the future of the company. as stacey referenced, a lot of right moves by mike ullman, but maybe too little, too late. he may run out of time. he really has bts, back-to-school between memorial day and labor day. if he can't get it done then, the company may have to look at more severe consequences. >> and of course we know the product for that time of year would already be ordered, to some extent, trying to turn the ship now. it's already mid-may. >> mid-may and the competitors are all capitalizing. they're hitting 52-week highs, every month, wheel penney is finding to hit a 52-week low every quarter, macy's, kohl's, tjx, all the specialty players, everybody's hitting highs. they're getting all their same-store sales increases from pe penney's. they're accounting for over 100% of the decline in the overall department store sector. this is quite catastrophic and hopefully, we're hoping for the best for penney, but fearing for the worst. >> with all due respect, it sounds like you're overstating it a little bit. catastrophic may have been before they lined up their financing. the bear case has become harder to make. if the company has lined up the financing, right, so most of the street thinks that they've got a couple years leeway now, at least on the balance sheet. and they can get the sales turned around by any stretch, then how is it catastrophic? >> catastrophic in the sense that a lot of firms have gone to private equity for slbs, sale leasebacks, as penney has done, it adds a lot more liquidity, but the cash burn at the company is so severe, the consumers are looking at common denominator pricing that's about 40% off. typically, they'd expect it, to stacey's point, 70 to 80% off, and there may not be enough time. penney really has to increase its business 40, 45% to really have the right gross margins and the right percent expense levels, and with higher taxes and fewer working hours, there's going to be a lot more pressure on consumer's pocketbooks in terms of purchasing power. it's a tough time. >> stacey, i was going to say, we've gone from plus 4% on the shares to now up less than 1%. >> yeah, so, you know, i think the gross margins here are a concern and the question mark, you know, the big thing will be, what is ullman going to tell us on the call? what has been the response again to the apology campaign? but, you know, i would agree wi with bert. you're just punishing a massive amount of cash here. and yes, ullman has shored up the liquidity and maybe given some venders a little bit of confidence here. but you've got a couple years, really, until that debt kicks in and, you know, is that enough time? they've really scared their core consumer away, so they've got to reach out to them and get them back somehow. the question is is, you know, a year, two years, is it enough to bring them back? is it enough time. >> courtney reagan, you've been going through the press release, what have you been able to gather from that? >> there's an interesting quote in the press release from mr. ullman who says, we've been taking critical steps to stabilize the business. and that's what we've been talking about. that's sort of been his key job in the moment, stabilize the business. also further down if you read, he mentions that the difference in the brands between the new brands and the long-loved brands, sort of alluding to the fact that they are going to bring back some of those brands that those core customer really wants to see, because they're going to the store and they're not there. we know they're bringing back st. john's bay, maybe we'll hear a little bit more on the conference. really anticipate what we're going to hear out of ullman, but he is using those key words, stabilizing, putting jcpenney on the path to a profitable future. i think that's really key here. that's what investors want. and i also think that perhaps it's ullman's job right now to lose. maybe he is the man for the job. for a while, i can't imagine if you pull him out and put someone else in that doesn't know the business, can you really stabilize something that you're not familiar with? i sort of like what ullman's doing right here. >> i would agree with courtney on that. >> stacey? go ahead. >> i would agree absolutely with courtney on that. ullman originally came in, we heard some banter that maybe it was just to plug some holes, maybe it was for the short-term, but i don't think it is for the short-term. he's the person, he's the one to reassure the venders, he knows the business. and there's been so much forced turnover under the ron johnson regime that bringing ullman back brings some confidence back and some moral into the organization. so that's key. i think he's going to stick around. >> in the near-term. >> in the near-term. >> but you don't see mike ullman five years from now in that job, do you? >> i'm sorry, scott is that to me? >> i don't know where jcpenney is going to be five years from now. >> come on, you made the case that mike ullman's the right guy. do you think he's going to be in the job five years from now? >> you know what, i think he's the guy -- he's mr. now. he's the right guy for now, to reassure the vendors. you know, certainly, he's bringing back some of the old brands that were billion-dollar businesses that ron johnson sent for the hills. so i think he's making the right moves, again, to stop the bleeding for now. in five years, what does this real estate look like? how many stores do they need to close over time? different story. >> stacey, thanks. >> thanks. >> bert, thanks to you as well. >> thanks, scott. how would you like to sink your teeth into one of these? >> come on, i dare you. >> one of these! that, of course, would be the dorito, there it is, where are we shooting it? there it is! the doritos taco from fast food giant taco bell. the ceo speaks us exclusively about his latest product innovations, expansion plans, and a whole lot more. >> you're not supposed to eat the paper there on the outside. that's just the label. also coming up, you can soon deliver money via g-mail. you can e-mail money to anyone. what that could mean to google and its stock when we come back. 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[ coyote howls ] how about no more surprises? now you can get all the online trading tools you need without any surprise fees. ♪ it's not rocket science. it's just common sense. from td ameritrade. yum brands testing out their latest kitchen creation, the waffle taco. there it is. it is a waffle folded around a sausage patty and scrambled eggs. and the word is it costs, are you ready, just 89 cents. but right now it's only available in three locations in southern california. >> well, will it expand nationwide? here to talk about taco bell's latest product offerings is ceo greg cree, joining us exclusively. thanks very much for your time. the secret's out, the waffle taco. why do you think this is going to bring people into stores, and how is the product going over so far? >> well, it's as you said, it's in five stores around our office in irvine and it's going really well. and what's amazing is in five stores, it's already picked up like 42 million in social media. i don't think i've ever seen a product in five stores pick up so much social buzz. and the buzz has been, predominantly, really positive. so we're very excited. >> have you guys had a breakfast menu before this? >> we've tried breakfast a couple of times, many years ago. we have breakfast in about 800 stores in the western part of the country right now, but obviously, the waffle taco is only available in those five stores. >> you know, at a time when m mcdonald's is coming out with new egg white sandwiches, how is this going to take hold? how many calories does this thing have? >> it has less than 400 calories in total, and it's just another innovation. people have known waffles. the challenge with waffle is you either need a knife or a fork or can eat it as a sandwich, but no one's ever turned into a taco. sometimes the biggest innovation is not earth shattering. making doritos tacos where we took the flavors of doritos and turned entitle shells and 500 million shells later, we've had a huge hit on our happened. innovation doesn't have to be so dramatic, it has to be really relevant and like something no one has done before. >> at the same time, isn't there a risk here that you're going to confuse the customer. not only is it an expansion into breakfast, an area that people don't associate with taco bell, but you've talked about trying to get healthier on your menu. now this seems to be a total pivot back into the guilty eating. >> we're driving off two key insights. one, making taco bell, one, making taco bell more relevant. so there are a lot of things we're doing to make taco bell better. there's a lot of things we're doing to make taco bell more relevant. we're not seeing any confusion as we talk to customers and engage in a lot of dialogue with customers. what they like is the choice that we're offering. and i think bringing choice to breakfast, a lot of customers are really excited about taco bell entering the breakfast place. >> can you explain how this taco that i'm holding up, and by the way, thank you for the late afternoon snack, has led to 15,000 jobs for taco bell? >> yeah, sure. yeah, well, as you know, our same-store sales grew 8% and we've already sold 500 million doritos locos tacos at an average price of $1.50, that's about 750 million. and with transaction growth and new units we're building, last year we hired 15,000 people in order to handle the growth that we got from both doritos and from the launch of both can tina bells. it's very exciting we can do that. in fact, going forward, we believe we can double the size of taco bell from 14 billion to 17 billion, and we will need to hire another 100,000 people in the next eight to ten years. >> where are these new locations potentially going to be? where would you like them to be? and specifically, where internationally, at a time where yum's other subsidiaries, like kfc, really struggling in china, will be a major market for fast food. >> in rural areas, we're very underpenetrated. we have 6,000 restaurants nationally, we think we can build that to 8,000. probably a thousand of those will happen in rural areas, about 800 in traditional suburban area, about 200 in urban. and our international expansion, there's less than 300 taco bell restaurants. outside the united states. most of the growth in the short-term will certainly occur in the united states. >> given your comments about the united states, how's the economy feel to you, right now? >> well, it's pretty tough. i mean, the category, the qsi category in the first quarter was flat to minus one. we had a great quarter. we were plus 6%, rolling over plus 6, but i think that was because we had great value and great product innovation. so if you're not innovating and you don't have great value, you know, your numbers are not going to be that good, because the economy is tough. and there's a lot of people, as i said, if you've got a share portfolio, you're feeling pretty good, but a lot of people don't own their home, don't have a share portfolio, and they're not feeling anywhere as near good as a lot of people are. >> greg, thank you. greg crede, again, the chief executive officer of taco bell. we look forward to having one of the waffle tacos as well. >> maybe if you're lucky enough to live in that part of california, maybe if you've tried the waffle taco, let us know what you think. coming up on the program, the check is in the e-mail? really? wait until you hear about the new service that google is launching that could change the face of ecommerce. >> plus, the cat's out of the bag. financial services bloomberg quietly gets into the investment advisory business. well, quiet until now, anyway. we'll have the details, next. 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>> we've all known bloomberg has a new service, very big terminal service. but what most people didn't know is that they have an online wealth management business as well. they have registered this business as an investment advisory business with the sec. and it's basically a lot like some of the sites you see, betterment.com, where they're offering traditional wealth management services, but online for probably less than what you might pay somebody, say a financial adviser from merrill lynch, which brings up the conflict. here they are, their biggest customers are wall street and they're going into a very core wall street business. and a lot of people are pretty surprised about it. >> john, at the end of the day, though, the story is no doubt overshadowed by the current issue that bloomberg is emersed in. >> it actually feeds into that story a little bit. because a lot of people are saying, what the news scandal revealed is that bloomberg actually has conflicts of interest between different parts of its business. and here, they really are going into competition with the big wall street firms that subscribe to what really makes bloomberg all its money, which is the terminal service. this thing is never going to churn out money like the terminal business does, but they do expect it to provide some incremental income without that issue additional overhead. remember, they already have all the data services, all of this information infrastructure there, so it's a way to squeeze a couple more pennies out of it. >> before we move on, maybe it's a way as they deal with the fall-out from this current story, if any business were to fall off from a terminal standpoint, maybe they fall back a little bit on this side, i don't know. i'm just throwing things out there. >> the terminals have been slowing down. so they have been looking for a while on other ways to make money, other ways to grow revenue out of their existing infrastructure. this is just one of the ways -- i doubt they're spending a lot of money to built this out. it's still in an experimental phase. but they want to take a shot at it. and bloomberg has a lot of money, so why not try? >> just speaking of wealth management, i just wanted to mention google money as well. because it sounds like google will rival pay pal, this is huge, if it's happening. >> pay pal dominated the online payment system so much that firms like visa, mastercard, american express were all embarrassed they let themselves get clobbered by pay pal. the same thing is going on in mobile, where everybody is now scrambling to control the idea of mobile payments. google has its product wallet. there's a whole bunch of competitors. everyone is trying to get really hard into this product. and they're fighting really hard. i mean, on most u.s. carriers right now, you can't get google wallet. because the big carriers have a product of their own called isis, and they're blocking out google wallet and not letting it in. >> all right, thank you. >> everyone's doing what they can to stick to consumers. john, thanks very much. whether it's bloomberg trying to use bloomberg black, whether it's google money, they want to be that go-to product. they want to be in your wallet. will stocks close out the week on the upside? >> pros buy in on today's market action next, so stick around. 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