Transcripts For CNBC Squawk Box 20140421

China says they plan to build five more plants in china next year. Eunice yoon will join us with more news in a minute. Look at my font. What happened . Who knows. Wait a second. You have no idea. Anything on any given day you can read that from 30 feet away. I can see it. Im fine. Thats right, you are good with the distance, right . I was a good boy in high school. Anyway n corporate news, pfizer reportedly approached british rival astrazeneca to propose a 101 billion merger or takeover according to britains sunday times. The paper reported that informal conversations about a deal had taken place but no talks were currently underway after astrazeneca resisted the approach. They have been touted as a potential takeover facing patents on several of its best selling drugs. Not a matter of complete surprise. There are very few left, not very few, but theres been a lot of consolidations over the years. A lot of Drug Companies we always talk about, three or four anytimes are put together from individual Drug Companies before. So theres been a lot of consolidati consolidation. Its a way of pooling resources and its hard to develop new blockbuster drugs. And they are all going off patent. So usually you seize bio techs left to merge but thats a huge number. Do you have allergies . I do. With claritin, someone sent me some claritin but it takes a few days before it builds up in your system. Did you just start taking it . No, but i went from 12 hour to 24hour and dont necessarily i may miss the 24hour sicycle so it takes a while to kick in. You are very high up in the air. That thing is too high. No, i sit on a pillow. No, but you are higher than you normally are today. No, my legs normally you are lower than you usually are. There. See . Better . Yeah, thats a little better. Its a little threeday start. Coming in this morning was a shocker. At least seth was using the set this morning. They were here early because its a holiday in europe, so sarah and don came in. Did you change my prompter. Are you going to do nothing about this . The prescript is small. You cant see that . Its much smaller. I know its not affecting you, so he doesnt really well, they say, size doesnt matter. Well, it does when its too small, the font. Anyway, go ahead. I can do it. Im good. Im all right, but its just i have issues with that. Its a busy week on the earnings front with onethird of the s p 500 Companies Set to report this week. Netflix is going to be reporting after the closing bell today, and thats a biggie because people are wondering whats been happening after this stock and the decline its seen, the rapid decline, over the last couple of months. On tuesday we get results from mcdonalds, travelers, United Technologies and at t. On wednesday we get boeing and Proctor Gamble before the bell. And apple and facebook report after the bell. And thursday, caterpillar, gm, microsoft, amazon, visa and well close out with Quarter Results on 500. The First Quarter earnings are projected to increase by 1. 7 from a year ago. Well see how those hold up. A lot of numbers. We better get our machines ready. Well check on the overall markets this morning with the futures this morning, at least at this hour, are indicating higher. Dow futures up by 21 points. S p futures up by a point. And the nasdaq up by 4. 5 points. The you check out oil prices, you see right now they are down slightly. Down by 21 cents, but still talking about wti, above 104 a barrel. The tenyear note this morning, which has been a huge position of interest that people have been watching, the yield at this point is 2. 706 . Just creeping up over 2. 7 for the year. The dollar is down against the euro, the pound, it is up against the yen. The euro is at 138. 24 and the dollar yen at 102. 53. Gold prices this morning after all of that are down by 5. 80. 1,288 an ounce. Well below 1,300. Major markets closed this morning in observance of Easter Monday. Exchanges in the u. K. , germany, france, italy, australian and hong kong all closed. What happened to monday . Its the day after easter. We take good friday. I dont know that was a brilliant, you gave me a lot there. I dont know. I understand why we have good friday. I knew monday was the day after easter. You get the holy thursday thing. Tough good friday. You have the easter day but what happened to monday, people were just cleaning up, werent they . Probably. Thats milking this a little bit. Do they get friday off, though . Huh . Do they get friday off for good friday . Some people do. Wasnt that the actual holy thursday. So a lot of stuff was happening. Friday was the initial day for three or four days, but Nothing Happened on monday. I will look it up. I dont know off the top of my head. I think it is milking. If they are going to keep the teleprompter that way, im not going to read it. You never do anyway. Are you reading it now . Who would mess around with that . I think its a little crisper and clearer. They brought it closer. But it is much different its a different font. It is just a smaller point size. Not a different font but a smaller point size. Well talk about this, the Obama Administration delayed its decision on the keystone excel pipe line project. No conclusion now until after the november midterm elections. John harwood is joining us with more. John, i understand how things work, you know, politics, washington, the question that i have is, and you probably are the one to answer this, i know that it will help democrats and sort of reddish states that have professed to be for it because they can continue to say they are for it, right . Weep now and then, so they can get elected and then, i dont know, after november, he can hes going to owe tom steyer 100 million. So i can see how hell give the payback there, but does it help any democrats that are in vulnerable play . Are there any democrats that are riding on this that could get not elected by are there any, sigh how some of them can win as republicans, but i was trying to figure out how this is going to work . Give me the calculus on what they are thinking. Are you clarifying, are you going rogue off your teleprompter . You are just going crazy there, just saying anything you want . What was it . I dont know, they just one little put top, but im wondering how it happened. Somebody sets you off and you say, okay, im going crazy now. Yeah. Basically, i dont have a script here. Do you . I do, yeah. Thats worldwide exchange. This is our script, yeah. All i can say is becky, please keep your hands on the steering wheel, okay . Hopefully its not a the ignition doesnt get jostled by your knee so that it gets stopped, yeah. There you go. On your question, i think your analysis is right. I think your analysis is right, joe. I think for some of the democrats in red states, Mary Landrieu, mark pryor, the inact or refusal to come to a decision allows them an issue where they can separate from their president and tell their voters, hey, im pressuring him to try to make the right decision. I dont approve of their delay. It gives them something to talk about. On the other hand, theyve got the donors, tom steyer, others, you have environmentally active voters in other places who they are trying to get to turn out. Democrats have huge turnout problems in this election, republican supporters have much more likely to show up. So i do think this is pretty much 100 politics in the delay of this decision. And to the administration that has got a couple years to go, they are trying to prevent themselves from losing the senate. You know, not get wiped out too badly in the house. And i think its kind of simple as that. Its not the finest hour for the administration in terms of leadership. Because i was thinking that if your case that youre making is that you want to keep the oil in the ground, then if thats his decision, he aught to just, he can do it right now. Honestly, i think he wants to approve it. And my assumption has been that eventually he will approve it on the basis of the fact that they review and concluded that it was not going to significantly exacerbate the problem of climate change. What the administration had been looking for was approval with some agreement by canada to spend some money on carbon mitigation to prevent the worst effects of the pulling oil out of the ground and whatever is ascribed to it. So ive been thinking for a long time that thats where they are headed. I still think thats where they are headed, but i think this is a tactical thing to help their chances in the election. They must have figured its not going to help push some republicans over the top, that decision. Because it is in terms of whether you call a 20,000 jobs, i dont know, 200 jobs, i have seen both sides, they have both politicized how many jobs it is, its a certain amount of jobs, we know that. And then theres ancillary jobs to get created from that. And they would be highpaying jobs. And its like infrastructure, funded privately, shovel ready, all these great things about it. So i would think that there would be certain places where that would actually hurt, help republicans and actually hurt democrats, but i dont think thats the case. I think the key elections that are the calculus they are thinking about, this can only help with those democrats. I think what they are thinking is if you are Mary Landrieu and you are pushing for this to get done, if it does get done, is that going to get republicans off your case . No, its not. But if you are able to go through the election and say, im taking on my own president , im challenging my own president , that might be of some benefit toer her. Okay. John, stick around, well bring in our Political Panel as well. We have a cnbc contributor and best selling author of karen roth, also a contributor here at cnbc. And folks, welcome to both of you. Ben, your thoughts on this, you heard what john thinks. Im not sure i agree on Mary Landrieu. Her whole case democratic from louisiana facing a tough reelection. She has a lot of influence in washington. The energy committee, shes not just displaying that by getting the Keystone Pipeline done. I think its probably in that negative for they are. I mean, theres some truth to the fact to say im standing up to my president who is unpopular in louisiana and for key stone, but what would help her in louisiana would be to get this thing done and be able to say, it was partly due to my influence we have approved this. It is bad for landrieu and mark pryor in arkansas. I think it is negative for democrats across the board totally outweighed by tom steyer who says if you aproef keystone, my money goes away. The white house sayses they need that money to win the senate. We need to counter balance that with 100 million from tom steyer. They are making the calculation thats more important than another sort of hit against conservative state democrats, landrieu, pryor, i dont know if they are right about that. They may be wrong ultimately, but clearly they have made the decision. You can hang one piece of substance, you can say you are delaying this because of in nebraska the court has said were going to review the process by which this was approved to go through nebraska keystone. So that doesnt mean the administration couldnt say right now we are for it, but at least it gives them the peg to say, were unsure whats going to happen. There could be a new route based on what happens in nebraska. So well wait until this court plays its way out. It is totally politics but they have this to hang it to say this is why we are doing it. Karen, do we get a decision ever on Keystone Pipeline . Unfortunately, becky, im not sure we ever get a decision on anything let alone Keystone Pipeline. I think thats the big issue here for the democrats. They dont always agree with ben, but in this case, go figure, i do. I think that the uncertainty and the fact that the administration is putting the politics over the progress is a huge issue here. Number one issue that everyone keeps hearing about is jobs. And the only jobs anybody in washington seems to care about is their own. And this is completely, completely transparent. Not only does this create the shovelready jobs we are talking about in terms of building the pipe line, but it also preserves the jobs down in the gulf in terms of gulf refineries. So i think them punting the ball here after six years when the state department has produced 11 volumes and cant find a single thing, doesnt help anybody other than the republicans. Do you know what this means for business . We Vice President really thought through what the implications are of not having something decided. Well, it means for transcanada that eventually they probably figure out another way to do this. They do it by rail. Without the United States . Yeah, or doing it by rail over pipe line and you dont get new jobs to create the pipeline. It is bad from the jobs perspective. Ultimately, that oil is not staying in the ground one way or the other. Theres a new environmental case based on not taking oil out of the ground. They would rather do it this way. The rail cars are actually its been, universally accepted that the rail transportation is much more dangerous than having the pipeline to begin with. The environmental arguments are not sound. The state department, if anybody, the Obama Administration would try to find a way to say this is virmtly dangerous and we shouldnt do it, they havent done it. Its going to come out here way. What i didnt understand is how i didnt see how appeasing the far left environmentalists would get anyone but now i see the calculus because the landrieus, they need to look like republicans, sort of. They need to say, im for this. But her argument is keep me in the senate because im a big player in washington. Im chairman and ceo of the energy committee. And that is based on having influence with the administration. Shes demonstrated here with no influence on the administration. They are looking to say, we can help you out but were not going to. And theres a forward looking aspect to that if you reelect me, i will exercise influence and the fact its not done right now does not necessarily hurt that. Ly say one thing, joe, that may help you evaluate the credibility of bens argument. Ben picked the Chicago Bulls to sweep the Washington Wizards in their first round playoff series. And the wizards won in chicago last night. Let me explain the psychology of that. Im a big wizards fan and hope they won. Every time i expect them to win they lose. So i said if i put a sweep down there and theres reverse psychology. You guys are killing me. I was happy to see them win. Youre killing me out in chicago here. Not only do i have the blackhawks down two, now ive got the bulls down. We have nothing to look we have jay cutler to look forward to and his fiveyear 50 million contract. This is very depressing. Carol, that was a surprise. It was a surprise, but carol, i actually saw did you see with six seconds left when they tied the game . Why were you watching it . It was on in the restaurant we were in. I couldnt believe it. I was watching at home. This happened two times in a row. This was the second game in a row there was very little time to go and they scored. It was absolutely heartbreaking. Are you talking about hockey . Is that a canadian game . And i was watching the rangers up two and then lost four. Talking sports is better than talking about the teleprompter, so lets do that. But i would say dont worry about your bulls. They will come back to beat the wizards. Wizards are historically meant to lose in the finale. I grew up in d. C. Heres the good news, at the end of the day, my team is not called the wizards. There you go. Has the beltway ever let you down, joe . No. Were going to win this series. No, the beltway ben let me down. No, no, no. The beltway, seriously . Yeah, its an everything it stands for. I dont like it. Joe, i love the confidence, i hope youre right, i really do. Ben, carol, john, have a great day. And rest of the week. See you soon. I still need to think about this. If it was a president ial election, it makes sense to rejkt it or delay it because this is no . I dont think so. He has to appease his base. 2014 is a base election. You need women to come out, environment lists to come out and all the folks. And youre going to crush them if you would prove keystone. The whole thing. Im used to it. Its politics. I looked up Easter Monday for you, joe. It says the day after easter sunday, so there. I knew that. I knew that. But historically werent the guys with the brooms out there everything had already happened, right . Jesus was beginning to appear to the disciples. The stone was rolled away and they are picking up the sheets and its like, what happened here . Its important in the Eastern Orthodox Church known as bright monday or renewal monday. And hes starting to appear to people. I still contend most of the important stuff had already happened. Coming up, the race for the chinese sector is heating up. Eunice yoon is going to join us. Plus, well tell you what Proctor Gamble is doing to increase their market. Flends mens facial hair. The company is planning a new highend razor to push premium products. The wall street journal obtained marketing documents for the new Gillette Flexball to feature a swiveling ball with a hinge. The price tag is between 11 and 13 for manual and Battery Powered versions. How would that work . Well talk to cfo john muller after Proctor Gamble reports on wednesday. Nobody is clean shaven anymore. Nobody is. You are. I am, but a lot of people, theres something to the even if you have a Little Something going on, you still have to shave around the rest of it. It doesnt just come out that way. Right. And you need to clean it up once in a while. But i see a lot of that is the goto look for people going out. I dont know, its not i want to see that thing again because i cant believe thats real. That looked like it may have been faking people out there. I dont know. Proglide flexball razor with multiple blades going around . Im not sure how thats quite a contraption. Its one blade that rotates around. Im still confused. This is a tease, this is a mega tease for when we have john muller on. Our guy that runs this place looks unbelievably good in a beard. And im not just saying that to suck up to him, you know what i mean . But still, you have to clean up and go around. But hes got a beard. These other people have the get past the velvet ropes, adam levine stupid although hes one of our guys, isnt he . Yes, hes big and important. And peoples hottest man this year, too, isnt he . Hes hot every year but even hotter. Its hard to keep it straight, isnt it . It is. Who is what and where things are. Is there more executive edge, though . No. What we are going to talk about now is General Motors announcing new investments in china and five new plants planned for next year. Eunice yoon is live from beijing and the latest auto show there. Reporter yeah, definitely, a lot of news out of the beijing auto show. This is the largest car market in the world. And despite the fact that the economy is slowing down every single carmaker wants to be here. The big news out of gm is that it is moving very aggressively. Its investing 12 billion over the next three years in order to build new plants. The company also said that it sees sales here growing in line with the rest of the market this year at around 8 to 10 despite the fact there are these u. S. Recalls that have been affecting the image in the United States. The companys president told me that so far those recalls have not had any impact on the reputation or sales here. We havent seen any impact and i have not seen a lot of discussion about that in my couple days here, but clearly in the u. S. We are putting the customer in the middle of everything we are doing. We are working very quickly to address and repair the vehicles involved and make sure that our customers feel good about how we have handled this. Reporter and gm had another recall revelation over the weekend. A federal document showed that gm waited for years before recalling saturn ions with a steering flaw. The companys president didnt say much about that, other than saying they move as quickly as they can on recalls. In terms of the other trends out of the beijing auto show, even though the skies are polluted here in beijing and the economy is slowing down, the big trend is big cars. People love luxury. They also love the big suvs that are coming out. And ford is jumping on the bandwagon with a new luxury car line of the lincoln. They are debuting the lincoln brand here. This is what the ceo, ellen molelli said to me over the weekend. Well n the United States, were bringing all the new lincolns out because we are investing in transforming lincoln. And i think i would characterize it as all the technology that ford brings to bear, plus the elegance and plus its affordable luxury. Thats what people want today. Reporter and ford is going to be rolling out the lincoln cars this year in seven cities. And they are expecting to up that number to 50 cities by 2016. And by the way, guys, alan mulally said hi to you specifically. He said hello to the squawk box team from beijing. I remember him saying hello to becky, although im assuming, joe, he says hello to you. Hes a friend of the show, we like him. Tim cook sent you i had to beg for my that happens a lot, i dont know what it is. Its fine. Mulally, thats fine. I think youll get an email now. I dont know. I dont know what it is. Im nice to people, arent i . Maybe its me. Anyway, coming up, a closer look at the markets in the week ahead as we prepare for a flood of quarterly reports from major companies. At the top of the hour, we have a guest host that was on earlier and now will be here for more than just a segment. Well learn about the markets, the economy and the fed. Hes a former executive at the new york exchange. As we head to break, heres a look at last weeks winners and losers. If i told you that a free tensecond test could mean less waiting for things like security backups and file downloads youd take that test, right . What are you waiting for . You could literally be done with the test by now. Now you could have done it twice. This is awkward. Go to comcastbusiness. Com checkyourspeed. If we cant offer faster speeds or save you money well give you 150. Comcast business built for business. [ banker ] sydney needed some Financial Guidance so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. Good morning. Well come back to squawk box on cnbc. Im joe kernan along with becky quick. Andrew rosssorkin is off today. Nike is reportedly set to exit the wearable hardware market. Cnn reports the athletic foot ware and apparel maker fired the majority of the team to make the fuel band fitness monitor. Theres a lot of im shocked by this news. But smart people are getting into the business. This is right up the alley for nikes core company. Wouldnt you buy one of the things that andrew wears on his wlis. There are better ways to get a lot more information. The band plans for the new version of the fuel band originally planned for the fall. Nike plans to focus on software for the wearable markets. And the worlds two biggest gold miners recently talked about a possible merger. This was a story that was out saturday in the journal. According to the weekend wall street journal, the paper says berry and newmonday intended to discuss a new talk as of tomorrow. And the rise in gasoline occurred over the weekend. I think summer is coming. A chill in the air again for easter. I was excited to see it was 69 degrees here today. It was 36 when i came in this morning. Yeah. The latest lumberg survey puts the average price of gas just under 3. 61 a gallon. Demand is up 3. 8 from the same period a year ago. And the survey offered trilby responsib responsible. We have the cnbc contributor here with us, and Barbara Reinhardt is here from credit suisse. 2. 7 feels different than 2. 6 on the tenyear. Less worries about deflation and about a slowing economy . 2. 7 is lower than where we were in july of last year, but its important to notice whats happening in the markets right now. A lot of the wide led positions have been flushed out. In the Technology Sector and a couple of others, i think this happens a couple times every year that the comments received by her last week were received by the market. He has a study happened on the community and a commitment to try to get the structural employment rate for the u. S. Down, which was a key and critical component. I think what happened, rebecca, you wonder whether theres something we dont understand about the economy when you see the yield curve flattening even though it did not flatten that much. And the tenyear, we are supposed to be recovering going to 3 gdp, theoretically, but we did that for the last two weeks. More and more people came in and said there are up in of the conditions that are apparent to cause a recession at this point. And this comes out today. Sluggish, even though it hasnt been a great recovery, its likely to endure longer with the same. The last three weeks had the hallmarks of a technical correction or washout. Yes, the yields were lower and that felt like a squeeze in the bond market, but then we had emerging market stocks rallying like crazcrazy. They shouldnt be outpacing by that margin. They didnt confirm that, i didnt notice that. Huge ilbm. That smelled like a technical conversation because the funds are very short emerging markets going into this year. They were in too much pain, they needed to get that train now. If fed is going carefully slowly and we are Getting Better signs out of the u. S. The so its not a strong recovery but theres a decent recovery going on in the u. S. , and i think well continue to see that as spring continues. Are you talking 3 growth for the year, do you think . When we look back at everything, when you take the First Quarter and weather into account, what happens in the second quarter, really 3 . I dont think it matters if it is 2 or 3 , it will feel a lot worse than the one in 2013. You are starting to see earnings better sales growth now that you saw it in the corner. That was a very positive surprise, but you just have to have the soft market. Parts of the equity market beat up last year are having a nice run and a nice game of catchup. They are cheap in terms of the fixed income market, so theres still plenty to do. And it probably is healthy that, remember, we saw facebook go down to after the ipo and suddenly it went to 70 or 60. And on twitter, that was a little frothy. When it gets frosty, its not bad when someone comes out of the market for the rest of the time. Sometimes you have to shake ahead what has gotten ahead of its fundamentals. What we can take away is nothing is fundamentally changed in this country. We still have the payroll tax that came in and we have an obama just the abatement of those things allows us, we are that resilient. This economy goes to 3 just naturally . I think that helps a lot. We are seeing both municipal and state governments starting to hire again. Whether they should or not is a different question, but we are seeing job growth only back there with she crest tragss helping. You mentioned gas leap prices going up comfortably under 4 a gallon. Thats a pain threshhold i would watch for the consumer. So oil and Energy Prices staying relatively well behaved with inflation relatively bell bhaefed. You still have a global story. I would say well have to get used to that. In general we are talking about a Global Economy. If we look backwards, what is doing better . Bonds or stocks . I still say stocks, but you have to stomach the roller coaster rides. Doing nothing is the hardest thing to do sometimes. Right. I guess that the im making the point that the economy is resilient here no matter what in the United States. And i dont think washington on either side of the aisle has done much. One party has been in the way and the other party would say the other party has been an obstruction, so we havent done what we wanted to do. But despite that, the u. S. Connecticut continues to do well. Then i think, corporations, no what pattern. So the money flows so corporations have their way a lot of times. Im shifting a little bit about my money talk. Its been an antiprivate sector for five years weve had, but then again, these guys are smart enough and have enough money to they are doing better than they ever have. Any time you have a sluggish recovery with the pressure points, they are definitely seeing who is taking the more conciliatory tone. The new elections will cause uncertainty in the, ma. It is not riskless, thats for sure, but thats a little bit of a ways off at this point. But it certainly will be out there, probably compostlabor day for sure. What we need, its in the front of everyones mind now, and thats the lagging middle class income distribution. And do you expect that to start to ease as we do a little better . As unemployment comes down and we get to 3 . Because it cant get much more louder than where we are. Yeah. We certainly hope that theres a cyclical element and its not only structural. And i will guess you will see some easing of it with the employment rate coming down as people go back to the labor force, but it does feel like theres a structural element in it to do. And she was speaking here in new york city and very transparent. People may love her or hate her, but she was very good about giving specifically for market indicators. One of them who worked parttime and will work fulltime. And people out of work for an extend period of time. Those are the people youre talking about, joe. Some of them we want back to work. And the fed will be relatively easier until you see the healing it talks about. Some of the demand that Companies Still say isnt there for them to expand or to build plans and to hire more people, some of that has to come from consumers that still havent really participated in the recovery. But you get part of the way there from the chief Natural Gas Prices up through the cold weather. Flat union labor costs mean some broadening of the expansion. And you saw disney raising its hourly wages, which i thought wasle another very important indicator. I got a little annoyed with a new economist du sorry. Hes being embraced by krugman. He says, hes not going to think socialism works but at the same time he has serious questions about longterm, what happened with capitalism as well. A distribution that isnt equal. And his point was that capital always grows at 4 to 5 , but the economy if it only grows at 1. 5 , thats what real wages grow. So people who have the capital will continue to do better, and thats not sustainable long term. Its hard to argue with that, though. But it is politically naive. If they have money to make money, right. As people get older and theres more people that have assets that appreciate to go you have to have the story. You have to have money to make money. You do. As the population ages, those are the people who have the assets. I think by now its pretty well underand there are social implications because of that. Do you know his name . No, i dont remember. I skimmed. Educated and friends like you are surprised this is his do we have forever . No one is wrapping me up. I think we have interesting stuff to talk about in the next block. You want to wrap me if we are not wrapping, one thing you need to make sure is on everyones radar screens is the purchasing major indices on wednesday. Who doesnt know thats coming up on wednesday . Anyone away for easter. What is it . Coming out china on wednesday, the u. S. , on friday. Why is it important this w k week, historically the pmis tend to lead actual Economic Activity by a month or so, but also tend to move hand in hand, its coincident, but they move hand in hand with valuations and multiples. If you see the pmis go up, you will see them excited about growth going forward. And believing it was a bounceback and it was just the weather or something. Bingo. If it is not on your radar screen because you are on a rock, get out from under the rock and watch it. Easter monday was not on my radar. Is it 8 30 on wednesday or 10 00 . Actually, i think its 10 00. Well. Thank you, rebecca. When we come back, well tell you what to expect for the Major Company that is report. And later is fred davis, the sop of singish produce earl clyde davis. He started a business with a focus on this. Well be right back. E financial noise financial noise financial noise financial noise [ male announcer ] when fixed income experts. Work with equity experts. Who work with regional experts. Who work with Portfolio Management experts, thats when expertise happens. Mfs. Because there is no expertise without collaboration. Mfs. We did a 27point inspection on your chevy,ce, you got new tires and our price match guarantee. Whos this little guy . Thats birney. Oh, i bet that cone gives him supersonic hearing. Watch what you say around him. Ive been talking a lot about his procedure. whispering what . Get our everyday price match guarantee plus a 100 rebate on 4 select tires from your tire experts. Chevy certified service. Welcome back. U. S. Futures at this hour, well take a quick look after a solid week. A good rebound last week as the tenyear yield rose back above 271. We were up 27 points for the dow and the s p is at 8. 74 back up a little for the year. I want to share a story with you that joe shared with me over the weekend from the wall street journal. Joe knows my aversion to germs and all things bugs, so you went out of your way to make sure you emailed that to me very early saturday morning. Heres the story all about dirty money. Scientists are discovering a surprising number of microbes live on cold hard cash, especially bills. Thats according to this journal article from over the weekend. Nyu researchers identified 3,000 types of bacteria that was many times more than thought in previous studies. They say easily the most abundant species is one that causes acne. Others were linked to gast trick ulcers, pneumonia, Food Poisoning and staph infections. Apparently paper money is one of the most passed around in the world. A body temperature wallet is like a petry dish. You get the germs and they multiple easily. There are still times when i count things out and put one in my mouth or you lick your fingers. If you ever worked in a lab, its so gross. You should see what grows on there. And if you work under a hood where its completely sterile, but if you just touch one thing with your own hand, it just theres bacteria everywhere. You cant avoid it. But we have had every type of illness to go through your house, we have had the flu. Everywhere. You need to be comfortable. You need to embrace the germs. Embrace the germs. Im struggling with that this morning. Bedbugs are scheming. And what is worse, lice. Because you pick lice. I hope youre enjoying your breakfast, folks. Back after the break, well talk to phil lebeau. But first, scott cohn talks security at todays Boston Marathon. Tdd there are Trading Opportunities tdd 18886486021 just waiting to be found. Tdd 18886486021 at schwab, were here to help tdd 18886486021 bring what inspires you tdd 18886486021 out there. In here. Tdd 18886486021 out there, tdd 18886486021 there are stocks on the move. 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So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit card at the big tire event. See what the ford experts think about your tires. At your ford dealer. First day of my life by bright eyes youre not just looking for a house. Youre looking for a place for your life to happen. [ male announcer ] help brazil reduce its overall reliance on foreign imports with the launch of the countrys largest petrochemical operation. When emerson takes up the challenge, its never been done before simply becomes consider it solved. Emerson. 36,000 athletes are going to run in the Boston Marathon today, putting the race back in the spotlight after last years bombings. Scott cohn joins us with more. The first thing that hits me, thats a lot of people for me it would be trying to pass. Anyway. Yeah. It is a lot of people. Its also a lot of spectators. To give you a sense of how big an undertaking it is, 36,000 runners, as you said, thats the largest field since 1996. A million spectators expected to line the route, which goes through eight communities over the 26. 2 mile marathon route. Extra security is visible. You can see more cameras. You can see more security. We asked some runners about that at the annual pasta dinner, prerace pasta dinner about whether they are concerned. Most are here for more than just a race. Theyre here for a mission. They say they feel very secure. Everybody being very helpful. All the bag checks. All the dogs walking around. Theyre taking extra precautions. They want to make sure nothing is going to happen again. Ed davis, the former police chief, now private consultant. He said they are not taking any chances this year. I think we can go to former chief davis. There are three times the number of air assets that we have. There are undercovers in the crowd. They have check points set up so bags will be. It is very intense security posture. And i think it should be. Start of the race less than two hours away. Lets hope they Start Building up an eventful Boston Marathon. This will be the first one. But we are just focused on the runners. Coming up, isi group vice chairman. Chairman. Means advanced technology. We learned that Technology Allows us to be craft oriented. No ones losing their job. Theres no beer robot that has suddenly chased them out. The technology is actually creating new jobs. Siemens designed and built the right tools and resources to get the job done. E financial noise financial noise financial noise financial noise more problems for g. M. This year has seen the fastest starts for ipos since 2000. The company set to go public and the prospects for alibaba. Major tech earnings on tap this week. What to expect for apple, microsoft, netflix. Its monday, april 21st, 2014. The second hour of squawk box begins right now. Good morning, everybody. Weve been watching futures this morning. So far we have seen green arrows. Dow futures up 30 points. S p up by two points. The nasdaq up by just over six. We have been watching the 10year. At this point the yield has indicated 2. 719 . Youre looking at a yield above where it had been much of the week when we were looking at the numbers pushing beyond the 2. 6 threshold. Government documents show g. M. Waited years to recall 335,000 saturday ions. Every day theres another article, phil. Phil joins us with more. Theres all kinds of different ways you can address little problems. Right. And i guess consumers and owners of the cars, they judge how serious something is based on whether it is a full recall. So i read that over and over again. Right. They said, you know, i saw i was supposed to do something. It didnt seem like a big deal. I finally took in my commander, Jeep Commander after several months of them kind of harassing me. I had to call and follow up repeatedly. Its hard to get in the dealer when youre working and try to figure out how you can juggle. Joe and becky, if theres a Service Bulletin and its sent to the dealership, do you know about it . No. If you take it as seriously as if its a full recall. This adds more fuel to the fire of people saying, look, corporate kul customer wise, General Motors has an issue it needs to resolve. By the way, this recall was issued back on march 31st. The documents came out over the weekend. They basically have power steering failures. It dates back to 2004. People are looking and saying, wait a second. You had complaints back to 2004. You received more than 30,000 ion warranty claims regarding the power steering issues. Why didnt they act sooner . It is a complaint that nitsa issued to General Motors within the last few months saying youre slow to ask. We have brought these to your attention. You are slow to issue a recall. Ultimately nitsa can push a company, automaker. But the recall needs to be initiated bit automaker. In many cases, they have issued Service Bulletins instead of a full recall. Whats interesting here, guys, this stock is iffy. If it dipped under 32 a share a week, week and a half ago. Since then it is up over 7 . 7 is not a huge rally here. But it does bring into question whether or not investigators look and say, yeah, were going to see more documents, more deadlines. But at the end of the day, we think this is as bad as its going to get. At least thats the question for investors right now. I think youre right. Looking for a bottom. 32 is pretty cheap. You know, you got to have a little bit of sympathy. It was finally starting to work. The government was out. Overhang is gone. Good cars. Over the weekend in china narcotics they will be having annual production of 5 million vehicles. China alone. China is huge. It continues to grow for them. A lot of people say were going to get passed this in the United States from g. M. s perspective. Look what they have globally. Exactly. Pretty good cars too the. I actually im not going tore admit it. A buick actually caught my eye. I dont know what it was. Was it the enclave. No it was one of the sedans, phil. Do you know what im one im talking about . I think you should be in the commercial where people say im in the buick. And the old person says, thats not a buick. I could be the old person. Thats what you just said. Okay. Thanks, phil. I like the enclave. Phil is taller than i am. And older. Im going to start hunching over soon more than i do anyway, phil. Youre shrinking. Nobody likes shrinkage. More than a third of the s p 500 to report Quarterly Earnings this week. If you check out reports that have come out, hasbro 4. 55. Revenue did miss consensus. Hasbro is looking better than rival mattel. Hasbro shares right now down by 6 cents. Suntrust banks reported a profit of better than 7 cents than expected. One Earnings Report left from over the lates thursday. This is late thursday after the market closed. Chipmaker Advanced Micro Devices earned two cents a share. They were looking for a break even quarter. Amd was help out by the inclusion of chips and new video game consoles from sony and microsoft. That stock is up 6 . More amd. Its a 3 stock. Less than 3 billion company. Been around forever. Tuff n uff for intel with pcs becoming less and less prevalent. I dont know what i would do. Lets get a look at what to expect a week ahead. Isi, vice a chairman, head of global policy. Former federal bank reserve Vice President. Great to have you in studio for an extended time. A lot of people talk about whether the fed is really interesting or not. And for discussion. I still argue that it is. Because after the president arguable janet yellen second most. Well, actually, putin may be number one. Lets not talk about it. What she does, what she thinks, what the fed does has a huge impact on our lives. Thats got to be right. They are signaling this low for long rates tpra skwrebgtry beyond the moment where they make the first rate increase. We have to be careful. None of this is bake cake. She said the world is an uncertain place. The economy is going to evolve. When it does, fed policy will evolve too. The way i was foggy to actually start the whole thing, how long will they be a rookie . Its kind of like being number 2 at a big company. You can train for the job. Be sure youre ready. But fill still when you step up theres Something Different about being nobody one. Being the person where the buck stops with you. Shes already been tested the first time. Now its like it seems shes already earned some credibility and she seems comfortable. Still a rookie . Look, i think janet is going to be a safe pair of hands. It wasnt the feds finest hour. I think everyone would have to admit that. Shes a seasoned policymaker. Okay. Now back to what was the real core of what she said . It was just stated dependent. Havent we known that all along. One thing she was keen to get across, we are giving you a lot of guidance. Why . Because no one is familiar with this type of world. Were trying to help you out to understand how we think about things. But we are not making any promises to you. This is just a forecast. So what we think will happen based on what we know today. Dont go making your Investment Strategies or corporate decisions. The world isnt like that. Do you think that the rest of the either the doj or what happens at the ecb, are they do they listen to what she says, or are they already making their own decisions. Is it synchronized with the fed, or are they on their own . They cooperate coordinate in a tight way. They listen to each other. Everyone keeps an eye on what the fed is doing. So will there be a big round of easing . Will there be a qe sort of the after probably a year after we did it, theyre going to equal us into that quagmire . Or is it a quagmire . They will move first to a negative deposit rate. This is something we never did. Negative Interest Rates. It was always on the table. But we never chose that option. We were always in two minds i think as to whether it was going to be a powerful tool to stimulate the economy but also whether it was going to have unforeseen negative consequences in the money markets with banks, particularly community banks. What a bigger shock and awe . Is qe even bigger . Thats the intermediate step. I think thats right. I think qe would have more impact. If you really want to do shock and awe its qe. But i dont think theyre there yet. I think we would have to see if the further significant downgrade to the outlook for inflation before they would get to large scale. They do everything slower. You know, look, its tough. Decisionmaking in the u. S. Hasnt necessarily been superb. We are just one country. They are juggling the different interests, diverse economy. But they have a bankbased financial system. We have a Capital Markets based financial system. Buying estimates in the market is a nobrainer if you want to stimulate the u. S. Less clear its going to be as impactful in the eurozone. Do you think the market is reading the fed wrong . When janet yellen came out and spoke again, she looked very relaxed. You said yourself it is data dependent and it could change. It is dependent. They wanted to hear that the noise around march didnt mean anything. Right. Yellen is focused on inflation being too low rather than too high. Steady as shes goes. Everybody is breathing a sigh of relief. A little bit further ahead, she said, look, as the outlook evolves, the fed will evolve too. The stock market has gotten used to having its cake and eating it too. No question about that. The fed has been incredibly dovish. Is there a risk that things could shift. I think all investors would be well advised to understand that the feds commitments is to try to stabilize economic variables. Not to stabilize the pat of the funds rate. The fed will do whats necessary to push inflation gradually back to 2 , avoiding a big overshoot to close out the remaining unemployment gap. But theres no commitment here to a particular path of rates. They are saying, look, based on our assessment today, we think we are not going to have to raise rates too quickly. That could change. Do you think japan might rejoin the Global Economy in a pofplt way . Is it possible this 20year nightmare is finally ending there . You know, im really glad you raise said that. I actually think japanese Economic Policy is workng. Wouldnt that be a big deal . Huge. What are they, number three or four . And we thut we used to talk japan instead of china 20 years ago. Look, theres no question. Even if japan fixes its deflation problem, gets the economy growing, theres underlying deep challenges. The population is ageing and shrinking. Start having babies. Im sorry, yeah. Right . The birth rate is very low. Lets get going over there. They do i think the Monetary Policy is beginning to work. Market consensus is very dark. We think the economy will fall apart again. Yeah. I dont think thats right. Underlying is more strengthening. Corporate sector, investment, export will come back a little bit stronger. But i think the inflation dynamic is going to change. Inflation has a bad wrap. Its like the roaring 20s and deflation. People dont get married. They dont spend. Theyre depressed. Every day is dark. Japan. Sit bad. Nobody wants that. In cash terms, it has not grown in 1997. Imagine if we lived somewhere that hasnt grown in cash terms by 1997. I stand by what i said. Go to dinner. Spend more time with the wife . Yes. More cues and tips for the rest of the world throughout the show. Still to come this morning, a hot start to the year for the ipo market. The Companies Set to go public and the prospects for alibaba. In the next hour, squawk market master will be joining us. Ill b. In a world thats changing faster than ever, ill b. We believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Alibaba set to unveil plans for its u. S. Ipo. They could file a prospectus as early as today. Joining us is garvis. Good to see you. Good to see you. We have seen 99 ipos. Whats happening . Largely driven by health care and technology. April has been a fast month as well. The quickest month on record. 27 ipos in the month of april. The largest since 2007. Everybody wants to rush out the gate . Its a lot of that. In spite of the fact that we have quite a bit of volatility the last few weeks, there has been quite a bit of appetite. It has performed quite well in terms of ipos. In general, 14 , performance of the Technology Sector in terms of ipos, which is much better than ipos overall. You mentioned volatility we have seen the last several weeks. You have seen real high flyers chopped up at the knees. Does that start to diminish the op tight or do you think thats a one off . Its not all good news. A lot of ipos started to price below range. The month of april, out of those 27 i just mentioned, 13 of them have priced below the range. So thats actually so its not all great news. But in terms of alibaba, which you mentioned, a lot of folks will be looking at some of the comps. We saw two khaoeus niece u. S. Ipos listed last week. Both happened to price below the range. They both experienced 20 pops. They have been doing well. So the stocks have done well. Alibaba has to have people excited too because it seems to be on everyones mind when you start looking wall street. Oh, sure. People are excited about the sheer size of it. A lot of media reports have it 15 billion. If thats the case, this is the ninth largest on record, fifth largest in u. S. And then second only behind facebook. Thank you for joining us today. Thank you. Coming up, what to expect as Major Tech Companies report quarterly numbers. We have netflix, apple, facebook, microsoft and a lot more. And later our disruptor of the morning is fred davis. Famous music producer clive davis. Started a boutique Investment Firm focusing on digital music. E financial noise financial noise financial noise [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Welcome back, everybody. Square is facing rising prices dwindling cash. It lost 100 million in 2013 and spent half of the 340 million from Equity Financing since 2009. The company is expected to fetch billions of dollars in a sale. Square was founded by twitter pro creator jack dorsey in 2009. Amazons taxfree profits dropped after the u. S. Internal Revenue Service tightened rules it felt were being abused to shift profits. A u. S. Unit owns its technology licenses. It minimizes tax bills by leasing rights the a taxexempt partnership if in luxembourg. There wasnt anything illegal here. They were taking advantage of tax laws the way they are written. We have to similar phi this thing. Its a game that everybody plays. It does mean loss of revenues. You have to fix the complexity of the season. They have to revise the entire tax code. Things have gotten way too complicated. It leaves loopholes for people who have accountants to find different ways around them. Coming up, what could move the markets in the week ahead. A lot going on. Well look at gold, currencies and equities. All of that coming up next. Get a leg up to the trading day with the morning squawk newsletter. Go to squawk. Cnbc. Com. Morning squawk is a snapshot of the days top stories, guests and fun water cooler stories. Get squawk delivered to your inbox every week day. Squawk box on cnbc. Profit from it p. Disney started in a garage. Amazon started in a garage. The ramones started in a garage. My point . Some of the most innovative things in the world come out of american garages. Introducing the lighter, faster cadillac cts. 2014 motor trend car of the year. Aint garages great . Welcome back to squawk box, everyone. Im becky quick along with joe kernen. Shares of drug Maker Astrazeneca jumping in the industry market. Pfizer approached its rival with a takeover bid of 100 billion. However, astrazeneca said no to the proposal. No talks are taking place. Stock up 9. 5 . Last trade 69. 50. Remember the paper mailings about potential Social Security benefits. Some of us may soon be getting them again. They will resume mailing them even though at fiveyear intervals. They will only do it every five years. They were stopped back in 2011 because of budget cuts. They will now go to workers beginning at age 25, and every five years after that. I honestly didnt realize they stopped sending them out. The average price of gasoline rising by nearly 5 cents a gallon the last two weeks mainly because of increase in demand. The average retail price is now at about 3. 61 a gallon. Gas prices rising since february 7th after falling late last year. And the start of 2014. Gasoline demand up 3. 8 from the same period a year ago. Billings, montana. Los angeles came in the highest at 4. 04. A guest, rebecca, said you need to watch 4 a gallon. That is an important point for consumers where you start to lose things after that. I think thats right. When you look at the strength of retail sales, for instance. These are of the most important data points. Gold prices and currency levels. Cnbc contributor. You have not in your nose. Our guest host continues with us. Vice chair of isi. Ill just start with you. But you were on the left. So im reading left to right. Very apropos. I nailed your name today. Ends with s, starts with s. Its always difficult. Youre getting much better. I am. But you hear the big pause. I dont know if you saw in the first segment. I did. What does it say for what the dollar should do against the euro or yen . The interesting thing right now is the market doesnt believe either side the atlantic. On the ecb side the market doesnt believe it is going to do anything quantitative and accomodative for the time being. Thats why the euro remains so strong. It is dubious about exactly when the fed will begin to raise rates. The needle has moved to the fed. But for now thats the reason why you see the euro staying at such high levels against the dollar for the time being. If the ecb doesnt do anything, germany is such a money machine. Theres so much capital surplus. It still remains relatively strong. Do you agree that japan, maybe we are seeing some positive signs that could aoe merge from this long period of i dont know what you would call it. The trade in japan is the widow maker. I remain dubious they will be able to perform well. I think it may be losing its luster as a safe haven currency. We have 21 consecutive months of current account deficits right now. They are running big trade deficits continuously. They will run them for as far as the eye can see. I think the attraction of the yen may come down a little bit which is why you see the dollar pick up today. Whether japan can really recover, i think the jury still out. Im just not smart enough to hazard a guess on that. You said you were against consensus. Good reason why they are skeptical on japan. If you look at the underlying trajectory, its not bad. Corporate investment will pick up. We are starting to see homegrown inflation. I think thats right in the long run. What we saw in recent weeks, emerging market episodes, we saw the yen take safe haven. Its long term. You agree i think probably. I agree. When we look at the euro, the interesting question is i agree theyre not going to qe. What happens if and in my view, when, they move to the negative deposit rate . Lets talk about that for a second. I think they are suicidal. Think about the average joe schmo. He puts in 98 and gets 100 at the end of the year. Psych lodge kael, incredibly unpleasant. It leaves no negative Interest Rates. As you said, doing qe against the capital is not a contractive. Buy asset bank lanes. Thats not a big market. I think if they had half a chance they would do that. Did the s p put in another bottom on this latest correction . I think theres a good chance of that. Earnings are lower than they would have been because of the bad weather. Lowered expectations. Usual game on wall street. I think we will see good growth this year. It is 15 times earnings. I think were probably getting a real collection. So far it looks like we have tried another one. I think i wanted you to be more bullish. You were looking for this kind of year we are seeing right now i think, werent you . Yeah. I think we will get 10 return. I think were still on pace to do that. We will get acceleration in both earnings, Economic Growth over the course of this year. Im very optimistic by growth before this year is out. I think we will see the market move higher. After a great year last year, its great to have a measured pace. Where do you think where will the 10year be. 10 above . I think the 10year it will rise but do so slowly. A lot of buyers of Treasury Bonds out there. If we really do go to 3 gdp, it is different. It could be what you said, a lot of people have to put their money somewhere, right . All right. Thats music. You hear it. So we have to go. See you later. Thanks. Coming up, big week for tech. Google coming with results. Netflix, apple, facebook and more. Were going run through some of the companies on the earnings agenda next. Later, highland capital mark okada talks about how to position your portfolio for success. Success. About do it. Excuse me, what are you doing . Uh, well we are fine tuning these small cells that improve coverage, capacity and quality of the network. It means youll be able t post from the breakroom. Great did it hurt . When you fell from heaven awkward laugh . A little. laughs im sorry, i have to go. At t is building you a better network. At your ford dealer think . They think about tires. And what theyve been through lately. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit card at the big tire event. See what the ford experts think about your tires. At your ford dealer. [ banker ] sydney needed some Financial Guidance so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. A slew of technology Companies Set to report Quarterly Earnings. Netflix, apple, zynga and more. President and ceo of busby and cnbc contributor. Last week ibm and google knocking out terrible numbers. Google so bad, theyre going to try to do it again. Theyre going to come back and try to be better than they did last week. Google showed a little seasonality. They out stripped it. Does that spell over bad things. I think they will each be individual earnings the the sector has come down a little bit. It can come down 15 , 16 of historical norms. With netflix, we want to see subscriber ads. It should be pretty bad. Facebook, we will look at percent monetization. I think they have all gotten whacked and they may again. Going into earnings, we look at traditional things we look at in each of the companies. U think apple will be the most interesting. Apple is flat. Theyre going to do 43 billion in revenue, flat year over year. And negative sales in ipads. Why flat year over year . Theyre not growing. Big quarter a year ago . Theres no new product cycle. They really need to come out with a larger sized phone. I hope they come out with this. This is 5. 7 inches. They will probably come out with size of the samsung galaxy. They said we need to go into larger phones because the growth is larger. Apple is right in the middle where no one is buying phones. I am such a sucker. I have an iphone, ipad, ipad mini. That would be the one device you would take with you. When you look at millenials that will buy one device, this sits between the two. As a woman, i have a purse. Where do you stick that if youre a guy. In the murse. There you go. Very nice. I have a jacket pocket. I could fit it in my pants pocket. Would it go in your shirt pocket. No. My shirt pocket is starched. I dont ever disturb that. This is too big. A lot of people feel that way. Whats the advantage to having it bigger . If i drop it, will it break . Yes. So if i put a thing on it, it will be even bigger. Get insurance on it. So if i drop it, thats okay. Apple has been missing out on the one that comes to right here. This is if they want it to go to where the puck is going to be. This is 5. 7 inches. Apple will do 4. 7 to 5. 1. Theres a small possibility they will do two phones, the larger and this phone tablet. This is a mini ipad sort of. It has a little pen. I like that. Its cool. Is that what youre use something. Thats what im using. I can do all my notes, everything. It is android. Android is another issue for apple. All the smartphone growth is in the Android Market right now. Lets talk about netflix too. The stock has gotten creamed the last six weeks. Netflix is super expensive. Still . 28 times 2014 ebitda. It has 34 wait a minute. Who else is in the tech tore . He does all the stocks in the sector. You have 34 earnings growth. International thats not profitable but 46 growth rate in revenue. And dvd sales which are declining. So its a very hard stock. Experian did the a study showing 18 of people with netflix cut the cord. They have broad band but not television. This is why people get excited. They think it can be a television replacement. Disrupted technology. They are supposed to add 2. 2 million this quarterment anything above that, the stock will go up. Amazon reports on the 24th after the bell. Whats the market going to be watching on this one. Going into q4 revenue was not as strong as people hoped for. Stock did not perform well. Right. Were hoping for the net revenue of 19 billion. They have to beat that number. The other thing i think were going to be looking at is amazon web services, cloudbased business where they do everything. The coaches are getting tough. They have had high to low mid50 growth. Its 1. 2 billion revenue. People are going to look at a sign of the price war. The price war is a big, big issue. We love amazon. Great stock. Is that something that you think is important . This is going to be the year when amazon doesnt make money. Thats not true anymore. 59 cents in earnings. Consensus, 194426. Margin expanding from 29. 8 from 27 . This is i much Better Business than walmart or target when you strip out all the other things theyre working o. And you have an option on an apple with the amazon phone and fire and netflix with amazon prime video. You have walmart and two other businesses. You have that title loyalty that you can exploit going forward. Lets talk facebook before you go, john. Facebook is actually expensive. They are starting to come up against all the comps when they grew all that mobile revenue. Mobile 53 of revenue in q4. They had that break through happen in q2. This is the last quarter with an easy comp in mobile. 32 times 2015. A peg of. 9. So not cheap. Im concerned. I think there is an opportunity to pick out great products. We havent seen those products. First went through in january 2012. It went below. Went above. But it has not gone anywhere. All these companies have a lot of trouble getting above half a billion. Large numbers. It seems to have affected the company. They cant put out an imperfect product with numbers of that size. But you can think about. Its been years of no new products. Now they are like intel. Steady state. You wonder what they need to do. Whether the living room is the place. I would be afraid. I wouldnt know what to do stkpwhrfplt theres a lot they need to do. Theyre not doing anything. Something for the living room. Roku. These are hard decisions that could end up not working. I dont think thats a huge zuckerberg buys everything. Apple has no good consumer cloud. You cant get anything in the cloud. The cloud is it going forward. I think we are looking for second half upgrade cycle. You talked about the new generation, larger screen sizes and so forth. It is challenge to go grow faster when youre this size. A murse a male purse or nurse . Male purse. So would you call a bro or a mans ear. That, i have no idea. Bro is funnier than mans ear. One more thing on apple. Youre changing the subject. One last thing on aepl. I think where they are now is super weird. If they come out with a watch, larger phone, everybody is going to buy that. It could happen overnight or not. The potential is for an upside. When they come out with numbers, they show declining ipad sales and flat iphone sales. They could have had pretty rough earnings. They could drop 50. Im going to interview fred davis. I need to note. You got it, man. You got it. Were going to break. Thank you for coming in and owning up so quickly. Do you have a murse . Theres nothing wrong with that. Thank you. When we come back, how long does g. M. Wait to recall saturn ions for failures . Despite consumer complaints, phil lebeau will join us with the latest. The earnings race is on. Dont drag your feet. Watch stocks to watch right after this. Which will be winners and which will be losers when wall opens for business. Squawk box will be right back. Take a look at stocks to watch. Halliburton reported 73 cents a share, two cents ahead of expectations. The companys revenue of beating consensus as well as sales increase in all parts of the world except for latin america. Nu Skin Enterprises says china unit will post corporate business meetings and begin accepting new sales. It was fined. Toymaker hasbro, First Quarter profit of 14 cents a share, excluding certain items. Sales grew but not quite as much as the street was looking for. Analysts point out hasbro has outshined rival mattel which reported a quarterly loss and larger than expected drop in sales. When we return, g. M. In the hot seat. Phil lebeau will have more in just a bit. And mark okada on the fed and markets. He told us this was not going to be a great year. We will have a lot more to talk to him about that. And fred davis, son of famous music maker clive davis. Squawk box will be right back. Are we still on for tomorrow . Tomorrow. Tomorrow is full of promise. We can come back tomorrrow. And we promise to keep it that way. Csx. How tomorrow moves. What a day. Cant wait til tomorrow. All stations come over to mithis is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. My mom works at ge. In a we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. G. M. Back in the hot seat. Government documents reveal that the company took years to recall more than 300,000 saturn ions for power steering failures. The latest on what it means for the company is just ahead. Disrupting world of music. Fred davis, son of on clive davis, focusing on Digital Media and music. Hes our special guest. One year after the Boston Marathon bombings. The city is coming back strong. Taking a look how social media will keep the flow of information moving even days after as the final hour of squawk box begins right now. Im joe kernen along with becky quick, talking the fed, the economy and more. Isi group vice chair and former member of the Management Committee of the new york fed. The futures at this hour are indicated up a little after after a really good rebound week last week which got us into positive territory for the year. Some concerns about weather all the forecast for increase for Economic Growth were on track. Now i guess we have good numbers as well that helped last week. Some of the earnings were better than had been. Some of the government numbers. Claims numbers have been good. Retail sales werent that bad even though it was autos. Full retail sales was looking okay. Corporate loan growth is an interesting one to watch. Im encouraged. The banks were pretty good. Jpmorgan not quite as good. Goldman had good news. Wells fargo did well. Lets get you some of your headlines this morning. Self of the days biggest stock from takeover deals that didnt or at least havent yet happened. Check out shares of drug Maker Astrazeneca. Pfizer approached it with a takeover proposal exceeding 100 billion in value. The market capitalization of about 80 billion. Astrazeneca rebuffed the overcher. No talks are taking place. A gain of 4 a share. 67. 62. A similar story with the worlds two biggest gold miners. Barrick and newmont mining. They were in serious talks and had made plans to announce a merger deal as soon as today. Those stocks, yeah, are also trading higher. Barrick up 1 . New mont up 1. 5 . Kraft fads recalling oscar hot dogs. This involves oscar mayer classic wieners because the packages may contain the classic cheese dogs. That sounds like tradup. But they contain milk that is required by the a fda to be on the label because of those who have milk allergies. Were not talking about anthony weiner. Were talking about oscar mayer wiener, not anthony weiner. Its a kneejerk reaction. Where is wiener . Beside insider, right . Yes. I was trying to remember where i had seen him. Whats wiener writing about . I dont know. But i saw him on somewhere on the web. Wiener . Yeah. He had been interviewing somebody on cable and suggested he would like his seat. Wiener was interviewing people . Wiener. Hes a sharp and funny guy. He a career in this. Who knows . New any released government documents reveal General Motors waited years to recall 335,000 saturn ions for power steering problems even though it seemed thousand of customer and consumer complaints. Cnbcs phil lebeau rejoins us now with more on this story, which i guess we knew it had legs. It really does, phil. It does. What were talking about here is a recall that is not part of the original issue that has bubbled up over recent months. It is separate but related to the question of how General Motors handles it overall. It happened almost 335,000 saturn vehicles. Power steering was the problem involved here. But the complaints date back to 2004 when you look at the documents released over the weekend. As you mentioned, General Motors received almost 30,000 ion warranty claims. And the issue here is that nhtsa said General Motors has been slow to act when it comes to recalls. So this fuels into that discussion. Overnight we had a chance, cnbc, to watch up with the president over in beijing. We brought up the question whether or not this is another example where they waited way too long to act. As soon as we know we have vehicle recall situation, we act. We act as quickly as we can, as soon as we have a decision in front of us and as soon as we have all the available information. We act on that right away. We heard from him, mary barra. Critics are saying, look, this shows that is certainly not the case. Or at least it wasnt the case as recently as early this year. You although at shares of General Motors this year, the company will be reported earnings thursday morning. Guys, we know they are going to be taking at least a 1. 3 billion charge. Joining us is mark okada. Our guest host continues with us. Whats on your mind today, mark . We have been through since the last time we spoke to you we have seen a lot of sort of cross currents. A lot of it on banking on better Economic Growth. Do you think were going to see that . How do you analyze this latest break we saw in the high flyers . Well, happy Easter Monday, joe and becky. I do remember the last time i was out we talked about outlook for the market. I think i said on that show we didnt see the Economic Situation falling off. We think the recovery is in place. Certainly the numbers are coming back after this soft patch from the weather. So the economy is on this slow grind back. And so that certainly is in place. I have to hand you some props. Im dying to see what you got for the rest next of the year. Do you think its foggy to turn around. Do you see some point of growth. We were happening that. Theres a big difference between the two. We didnt see 2014 being a great year. And thats where we are. We have had a lot of aversion. A market of stocks not a stock market. We dont think that changes too much this year. We think this growth will be creative to stocks over a longer period of time. This is going to be an adjustment year. Youre up 30 last year. So thats really not the case. Were in a situation where investors have to do something very, very different right now in order to make a lot of money with invested capital. Maybe not 30 gains. Would you look for double digit gains . 10 . I think we think we can get to 2,000 by the end of the year. Its going to be all earnings. Were not going to see a blowout like we did last year. Were believers based in part on our own surveys. The company is firming. We will get to the 3 growth trajectory. Getting back towards the sweet spot. Not too much. Not too little inflation. It seems like a supportive environment for earnings. A lot of Companies Taking up costs. You look at things like the big old banks. Not very attractive. Stocks the flavors at the moment. Heavily geared to that kind of economic recovery. We think we can move higher. Not a blowout year but a good year. Mark, does that sound like a plausible plan . I think thats certainly on some peoples minds. I dont necessarily agree with that. If we think about the long term and what happened since the crisis. The market has been up 20 , 15 on average. Yellen is trying to take the punch bowl away at some point this year. That is not going to be your friend. Our strategy theme is about fighting the fed. When that happens, data dependent. Who really knows. What do you do as an investor . Add more active management into your capital. Marks you must have loved the 10year, then, didnt you . Or you must have been really surprised. The the 10year gave them cover to do qe. You said they tried it and saw what happened. 2. 6 in the middle of qe was beautiful. Exactly. You werent expecting that, were you . Right. Which is the point. Which is the point around this volatility we have seen around liquidity flows, around the fed announcements and the fed decisions, difficult to do as a normal investor, professional investor. You have to sit and think how do you attack this market and fight the fed better . Active management. By and whole over the next period, i think you have to be much more active. You have to look at strategies that dont core late well. Long short will be a place to be. March was tough. But it will be a tough place. We like bank loans, mlp, private equity. It increases Value Creation over time here. As a beta, not going to be that interesting. I would agree with you this is going to be i think a more volatile period going ahead. I think youre right that fed policy normalization is a complex process. Lots of steps in the chain. And risks associated every step of the way. We have to be clear the yellen fed will be very careful not to pull the rug away until we have this acceleration and nominal growth in the bag. The nominal growth environment is supported for earnings. Well, i agree with that. Thats what they have to communicate. But when bernanke came out and said were going to tap on the breaks, we see a lot of volatility. I think it was an error. And i think they understand it privately perfectly well right now. Again, im not call for a big crash. Im not calling for the markets to go down dramatically. Its not going to be that interesting of a beta year. You would think the 10year has to start really selling off and field, in your view, it shoo well above 3 tore this to happen. And that hasnt happened, right . Yeah. Going above three no question. If it got to four, that would be quite surprising. Thats what you need to get the real volatility youre talking about. Mark, thank you. Talk to you again soon. Bye, becky. Thanks, mark. Is the fed giving enough credit. Why things arent as bad as they seem. Why Companies Like spotify are turning to fred days, son of clive davis. I want to know who he met when he was a teud growing up. A teu. All stations come over to mission a for a final go. This is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. Welcome back, everybody. Federal reserve continue to go monitor the Employment Situation before making any drastic changes to its policy. Our next guest says the labor market may be stronger than the fed thinks. Joining us is the chief financial economy of bank of tokyo mitsubishi. I saw your report over the weekend, and it really caught my attention. You think things are better based on the statebystate numbers . Thats my bias. If you look at the nationwide Unemployment Rate, it has fallen 0. 8 age points last year, march to march 7. 5 to 6. 7. Down. 8. Some of the states, they are enormous the last year. Number one is South Carolina, down 2. 5 to 5. 5 . The reason South Carolina is important. Theres obviously 50 states. But South Carolina is where bernanke grew up. And he just gave a speech a year ago talking about how unemployment in his town was something around 15 but it was better now. Well, the state Unemployment Rate right now is the best level its been in South Carolina even during the housing bubble days. Maybe the economy is better than they think. North carolina down 2. 2 percentage points. Louisiana down 1. 9. Pennsylvania and nevada, down 1. 7 . If you look at big states like california, new york, and new jersey they have seen significant declines too. So what does that tell you . You know, obviously theres 50 states. But the magnitude of these declines really caught my eye here. I think they put out the idea that the Unemployment Rate at 6. 7 nationwide that that really tells not the correct story. I dont buy it. I can find another piece of information right from the government website that says this economy is better than they think. Is that something that changed your mind at all. Is that something youre not surprised by. Some of the big states, california, illinois, have quite high levels of unemployment. The interesting question is when we look to the potential sources of the underemployed, increasingly going forward. Well have to see whether they are in the market or not. You want to look at what do the changes stay in state policies. Why has one experienced a faster decline than the other. Tax policy . There are winners and losers based on exactly what . The key thing, this is the new thinking about employment and unemployment. It doesnt really no longer looking only at. Theyre still looking at it. It is the best single indicator out there. But there are a lot of other things that are out there that they are also putting into the formulated figure. Why is the fed changing its focus. Because normally you could pretty much summarize everything that was going on in the labor market by just looking at that one number, the Unemployment Rate. This has been a weird business cycle. A whole bunch of people say they say they are working parttime but they like to have full time jobs. As steve well knows, shortterm unemployment is already there ar forget the rest, its that shortterm unemployment that really matters. Its going to look at other metrics instead. Is that the right way, do you think, for them to be looking at this . Well, you dont want to look at the number of parttimers looking for full time work. If theyre waiting for wages to go up to show a sign of tight labor market, thats never going to happen. Too many other indicators, retail sales, their own index, industrial production, both numbers are at record highs. Its got to mean something. Chris, thank you for joining us. Steve, see you back in a few minutes. You probably, if youve watched down at the bottom of the screen, surepta is up. It was written up in barrons over the weekend. Biggest genetic killer of any disease is this. This company is trying to develop a drug for due shane muscular dystrophy which kills young men before theyre 20, 25. Theres a lot of pressure to get the fda to move on this. The company has gotten guidance from the fda on what it needs to do to get fast track approval. They didnt get it back there in november. Literally they are in phase two trials. Twins. One brother was getting it. The other was not. His disease was stabilized. It is in phase 2. Its not phase 3 yet. Im not sure whether they can do it phase 3. They the did talk to the fda. Theyve come to some type of agreement how to get expedited approval on this drug, the first for sarepta. It is a situation where 100,000 people signed it. Get the fda please moving on this. It seems to stabilize people in phase 2 trials. These people are in need. So thats why that every other you can see every other name. Much look his father, fred davis, son of clive davis, will join us to discuss a lot of things. Things. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit card at the big tire event. See what the ford experts think about your tires. At your ford dealer. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. [ tires screech ] chewleys finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. Get the most extensive charting wherever you are with the mobile trader app from td ameritrade. [ male announcer ] help brazil reduce its overall reliance on foreign imports with the launch of the countrys largest petrochemical operation. When emerson takes up the challenge, its never been done before simply becomes consider it solved. Emerson. A programming note for you. Wednesday, first on cnbc interview Warren Buffett. Dining with winner of the annual glide foundation auction. The winning bid this year was for 1. 1 million. It goes to provide services to the poor and homeless in San Francisco through the glide foundation. Tune in wednesday on street signs. At least we think it will be street signs. Depends what time they finish eating lunch. It happens to be the same day as the cocacola shareholders meeting. To this point, Warren Buffett has not weighed on on david winterss proposal. Well ask him wednesday afternoon. Still to come on squawk box, a new disruptor in the world of Digital Media. Fred davis, son of clive davis, with music technology. He will join us after the break. Take a look at u. S. Executive futures indicated higher in the morning. Up 16 points for the dow future. Squawk box will be right back. [ banker ] sydney needed some Financial Guidance so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. Make a my financial priorities appointment today. First day of my life by bright eyes youre not just looking for a house. Youre looking for a place for your life to happen. Welcome back to squawk box, everyone. Lets take a look at some of the Earnings Reports. Suntrust banks earning 73 cents a share for the First Quarter, beating estimates of 66 cents a share. Suntrust saw solid credit demand. A continuing drop in credit loss provisions. The stock is unchanged. Hasbro reporting First Quarter profit of 14 cents a share. When you exclude certain items, that was 4 cents better than estimates. Sales grew but not as much as expected. It outshined rival mattel, which reported a quarterly loss. Halliburton beating estimates by 2 cents. 73 cents a share. Consumer products maker Kimberly Clark revenue marginally below estimates. It is on course to achieve despite head winds related to Currency Exchange rates and higher costs. What do we now know about janet yellen . Steve liesman joins us. Initially, shes a rookie. Are you a rookie . We have had a couple rough packages. The rookie stage will be truncated here. I think shes well on her way. Fair to say shes in the early stages of forming her own views on the economy. Maybe a tradeoff in the works. More volatility for fed possibility for more stability in the economy. Lets commit to commitment. Frustrated with the frayed work and how its been working, ever changing framework by the fed, and more durable guidance when it comes to policy, in a press conference, she said 3 to 4 wage growth would be normal. Less upbeat perhaps than underlying growth. They are only achieved through snap back. I want to tell you something about what she said. Heres what she said about systematic fed policy. The idea that Monetary Policy should react in a systematic matter to blunt the affects of shocks has remained central in the fmoc policy making during this recovery. However, the application of this idea has been more challenging. Okay. So she goes on to note that the fed has continued to try to adjust policy in a systematic way. It sounds like an oxymoron. Yellen is looking for a different way. Maybe we can come back and ask about how you keep doing something. Special guest. Hello again, scott. Hi, joe. Walsh is the mayor of boston. Talk about a big challenge going in. Huge security presence. But you want to make it accessible. Great morning. The weather is cooperating with us. Good energy all right. The marathon route. We have a good security presence down there, however. People are going to be safe today. Everything been going the way you wanted it to . Its been going great. Very safe day. An experience that people can enjoy. This is special for so many reasons. This is us taking back the finish line. This is a special event. There are so many people running for so many Different Things today. It is incredible. A year ago, when the bombs went off. So many things were affected. Inspirational through the whole country. Loss of limbs, loved ones. Inspiration is absolutely incredible. We talk about wanting to make it accessible and secure. I imagine there were some back and forth decisions to be made. Can you take us behind the scenes and how that balance was struck . It was. One of the first meetings was with the one fund. One woman asked, she didnt want to see the rifles on the route. She didnt the want it to look like a please state. Other survivor said i want the security. We talked to them so we had plenty of Police Presence on the street, as well as undercover, bomb sniffing devices to make sure theres no problems out there. I hope everyone acts accordingly. This is a day to enjoy and celebrate all the advances that people have made in the last year. We hear it is going to be a record Economic Impact for boston. I imagine it is something the city would trade in a heartbeat. Today is about the spirit of this race. It is incredible the outpouring. When you go in the street, you can feel it. Even right here. People are excited. The crew is. Your crew is. People are excited to be here today. Lets hope it goes off without a hitch. Guys, back to you. Scott, thanks for that. Appreciate the mayor taking his time out to speak with us. Were continuing our disruptor series with a man behind financing some of the biggest music and tech startups. Fred davis. Yeah. I cant spend too much time just knowing about your childhood. Have you met everybody in the business . Imagine being a kid growing up the way i did. Any cool stories that you can share . Maybe you cant share them. I can share some of them. 11, 12 years, visit to go visit my father at his office. Bright yellow carpet in his office. He said wait for me. He gives me this album. It was blinded by the light, the lear issues, before it came out. Or paul simon comes over, grabs my friends guitar and starts playing songs. Youth is wasted on the young. I was 12 years old when these things were happening. Meeting Whitney Houston for the first time. Its safer because youre a boy. Yeah. I know i have i dont want my daughter to meet any of these rockers. I dont want to go here. Never mind. So, fred, you launched a Great Law Firm now this is different for you. The law firm still exists. In the music business i was a music lawyer. I represented artists. Some of the hopefully the artists youre listening to. When i got into the Digital Media space it was much more capital as the hub, not the lawyer. So it was the raising of the capital. I realized thats really the fuel that helped these companies grow. So i repositioned myself in banking. Suddenly i can see the potential here. I love music of all kind. I listen to sirius xm. I was listening to joni mitchell. I spent 60. I havent spent money on music in a long time. It is so easy on my iphone. I have them all. This is a huge potential business. I come to the game a little bit late. The content is going to be momtized even more easily than in the past. The big thing would be if you didnt want to listen to joni mitchell. We had to work through that. It was getting stolen. Yeah. Disruptive stuff. Sure. But were past that now . Were at the early stages. There is a cultural revolution in all media. Netflix is not that much different than spotify. Our kidss walls will be empty because they will be paying for access and not owning content. Were still at the beginning. You will do the financing. Yeah. Across the board. It is a boutique bank. Now known as a kiosk bank. Its a small bank. Offices in new york and london. Focusing on Companies Helping raise growth capital. If you think 10 years ago if you wanted to raise 50 to 100 million oar north of that, you had to go public. I helped broker relationships and have become an expert in that area. What kind of Business Models get you excited . High growth. A lot of companies that have been credibly high valuations losing money. Because they need the fuel to keep going. Why not offices in Silicon Valley . I understand new york and london. When i think about technology and the music, i think l. A. And Northern California too. Some of the best Music Companies have come out of new york. Lastfm, sound cloud. A lot of music and gaming and Consumer Internet sector come out of here. You have helsinki, london, berlin that are growing incredibly. The valley is an important part of the business and the world. But if i were making movies isnt it sometimes more interesting to make them not in l. A. . Thats kind of the theory. To be part of the concept just not so deep into San Francisco. Do you have the clive davis gene for recognizing a huge star . Do stars start great or manufactured . There is an instinct when you met a star. When i met daniel from spotify, he was 22 years old. I equate the founder of the company to a lead singer of a band. Theres no question. Were going to do something i think maybe in a couple of seconds. I have to keep you talking for a couple of second. In terms of being able to identify i mean, your dad. He knew people long before they were famous. He said im going to get on this. Im going to get on that. Do you have that gene . I dont have that gene, no. Hes taken it to a level that i can only aspire to. You know this guy you were talking to here, liesman . Hes available. You didnt tell me hes a performer. Hes not. Okay. Thumbs up on that . What do you think we should do . Would you introduce him to your dad . For me, i will introduce him. For you. Hes got six bands. The mud crushers. Stella blues band. Seriously . Hes good. I was teasing you before. But hes good. Here he comes. Come back and explain can you play better music i have better stuff. Were going to go out with this music. Up next, a check of the markets. Right now as we head to break, an emotional scene at fenway park in boston. A tribute and special ceremony before the game. Spread out across the outfield banners have all 50 states, representing all 30 major league teams, signed with messages of encouragement and hope for the victims. Also taking part, the first responders, the police officers, and medical professionals so involved in the event. Jim gallagher threw out the first pitch. It was created to help those affected by the bombings. So far it has raised 80 million. Velocity 1,200 feet per second. [ man 2 ] youre looking great to us, eagle. 2,000 feet. Still looking very good. 1,400 feet. [ male announcer ] a funny thing happens when you shoot for the moon. Ahh, thats affirmative. [ male announcer ] you get there. Youre a go for landing, over. [ male announcer ] the all new cadillac cts, the 2014 motor trend car of the year. E financial noise financial noise financial noise financial noise make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Lets take a check on the markets this morning. Take a look at whats been happening with futures. We have seen them in the green most of this morning. You can see there are mixed markets. Nasdaq up 4. 5. S p just turned negative. Its down by less than a point below fair value. Oil prices coming down the last time we checked. They are down 10 cents. You are still looking at wti above 104 at 104. 20 a barrel. 10year note we have been watching with interest. The yield is at 2. 702 . And the dollar has been weaker. Most of the morning at least. It still is against the euro. Yen 102. 71. Gold prices stillwell below 1300 an ounce. Down to 1,287. 8 an ounce. Major markets are closed in observance of Easter Monday. I like it. I like the idea. You get friday off and monday off. I just dont understand what the heck it is. I dont know what happened on monday. Apparently easter orthodox. Big holiday. Historically what happened. They call it brightest week, a week of hope and remembrance. The whole week off . Now youre talking. Thats an idea. I think thats a good one. When we come back, sarepta shares soaring on news of its muscle disorder drug. Squawk box will be right back. Quick look at the weather. Nice day, beautiful tomorrow. Tomorrow is full of promise. We can come back tomorrrow. And we promise to keep it that way. Driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. What a day. Cant wait til tomorrow. In a we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Drivers, tgo our marks. Its chaos out there. But the mclass sees in your blind spot. Pulls you back into your lane. Even brakes all by itself. Its almost like it couldnt crash. Even if it tried. The 2014 mclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. Welcome back. Futures up about five. Theyve been up a little more, 20 or so. But theyve been positive after a great week. Sarepta pharmaceutical, possible news from the fda. The company says its going to start some new trials for this experimental drug for muscular dystrophy. And its the biggest killer as far as genetic killers, the biggest killer, mostly young men that have what we all grew up with watching, you know, jerry lewis and muscular dystrophy. Nothing works for it. In phase ii trials, there were some that thought it was showing efficacy. And then in november, you can see where it dropped off. It was then where the fda didnt think that the ongoing trials gave enough info for a new application. Theyve been in talks and the news that came out just today is that they have in discussions with the fda, figured out a way to get an nda, new drug application by the end of 2014. Wow. And therell be some new trials, but it would be accelerated approval and its the only drug approval. There was another company with a similar drug that didnt work in clinical trials. That one into the november decision. So they found a way forward, i think, is the news. And it would be good. Believe me, theres a lot of people that sign petitions to get the fda. Because its been around this drug, which may work and people that have the disease its progressing. And if it may work, you can see, you can get 100,000 people or more to sign. Tell the fda, lets get moving on this if it can help people. All right. When we come back this morning, how janet yellen is changing fed policy. Our guest host of isi group sounds off after this. Also, a programming note for you. On wednesday, a first on cnbc interview with Warren Buffett. Hell be joining us after dining with the winner of the annual glide foundation lunch. The auction he does every year, the winning bid this year, 1. 1 million. You can tune in wednesday on street signs for the oracle of omaha. Of omaha. Today is monday today, we greet you. Treat you. Care for you. Today, you can come to Cleveland Clinic for anything, everything or just to get that thing checked out. Big, small, and yes, the best heart care in the nation. Its here everyday, for everyone. 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Because when people talk, great things happen. All right. Steve wanted to ask our guest host to respond to well, go ahead. We were talking about systematic changes. She wants it to be systematic. Something is in the works, kristen, whats your guess about how fed policies, especially when it comes to guidance is changing . So, i think what janet yellen wants to make clear is that the commitment is to stabilize the economy, not to stabilize the path of Interest Rates, right . The Interest Rates will go wherever they need to go in order to get inflation to 2 , get unemployment down to the lowest sustainable level. What shes saying is our commitment is to respond to the new information, the changes in the outlook in a systematic way. But steve, heres the catch, right. Its very hard for us to model how the fed will behave in the situation. Weve been here before. The fed has to try to communicate very carefully. There are limits to how much you can truly communicate here. Partly because there isnt deep, deep agreement on the committee herself. She goes through a long list of changes to fed policy. We did this and we did that and we did this. It sounded like a somewhat frustrated policy maker. Is what youre saying no more, were going to do this until december 2011 . And were going to do this until 6. 5 . Now were going to do this until employments back to where we want it to be. Thats right, steve. Thats right. I call this goals based Monetary Policy making. You focus on what youre trying to do. You dont focus on the tools. The tools go where they need to go. If youre a trader out there, yellen is saying im going to you can expect more volatility if youre trying to predict fed policy. And she thinks shes going to trade that for more stability in the economy . I think if she felt she could get that trade, shed be happy to take that trade, and why not . On the backs of the fixed income traders or the guys following fed policy versus stability to be clear, right, still guiding that right now the assessment is that low for loan rate path is going to be the one that will deliver the economic goals. Theyre saying if the world changes, dont assume were going to stick with the same policy. You think the market this year has strong potential in the stock market because you dont think this is a disconnect were going to meet this year. Look, my view is as follows, you should be really focused on the feds commitment to achieving economic goals. If youre basing your strategy on nothing can change that rate path, thats a dangerous play. Krisha, thank you very much for joining us today. Huge fun. Its been a pleasure having you here and its been a great two hours. Steve, we appreciate it. Keep an eye on whats happening with the markets today. We did look at futures that were quite a bit stronger earlier this morning. This week is a big one for the s p 500 for the earnings that were going to be seeing. You can see right now, the gains have been paired through the morning. In fact, right now, the dow futures up 12 points, near the lowest levels of the morning. At this point, though, you do see green arrows across the board. The s p futures turn negative. Youll see what happens when we go closer to the trading day ahead. Make sure you join us tomorrow. Right now, its time for squawk on the street. Good monday morning, welcome to squawk on the street, im carl quintanilla. Cramer is going to be back tomorrow. Stocks coming off their best week since july, although we actually still in the red for april. Big week for earnings, 150 S P Companies will report this week, including netflix tonight. Ten years, still right around 2. 7, were going to get housing data later in the week. Our road map goes like this, the market, stocks poised for