Transcripts For CNBC Squawk Box 20140424

Billion in buy backs. The company also approved Quarterly Dividend of 8 , nearly 3. 29 a share. Analysts were looking for about 38 million phones to have been sold. Apple earning 11. 62 a share and that blew expectations out of the water there, too. More than a dollar above estimates. Revenue came in at 45. 6 billion. That was more than 2 billion above expectations. Heres what carl icahn tweeted out after apples report. Agree completely with apples increased buyback. Believe well be happy within we see new products. As we said at conference yesterday, we continue to believe apple remains meaningfully undervalued. Many analysts fail to understand the company. Well, investors really took a second look at this, jumping on apple shares, soaring more than 40 in the late trading, gain of 7. 5 . We haven aanalyst coming up in a few minutes. One of the tweets that was really great yesterday was like 11 weeks and 6 days of doubting apple in the quarter and one day of believing and jumping back in. Getting back to the midfives. Its been in the sevens. We had the discussion to get back on the fast track to a trillion dollar market cap. My question was, do they need new products . Do they need new products or because they only are still in the teens for penetration of smartphone. Can they continue to sell and bring the market share up . Yesterday it wasnt new products and it wasnt ipads. It was the iphone. The iphone can still give you 40 bucs. I dont know if it can get you to a trillion. Thats why icahn, i like what you did, cant wait to see the new products, tim. That was a pointed remark. Actually less pointed than normal. Than he normally is. Thats exactly what hes saying, great quarter. You did great with the iphones but what have you done for me lately . Some of the increasing the dividend like that, splitting 7 for 1 so that other investors can get in because that stock was pricey. You can get i dont know if id do that. The split . I kind of like it because i understand, if youre an investor who wants to dabble in stocks, youre not going to be buying a lot of stocks at 564. Theres a certain berkshire never split. Theres a certain cache in berkshire and google. Then you can figure out, you know what, im going to mack a couple classes, im going to give those people the opportunity, with nonvoting stock. Thats what berkshire has done, too. Right. Its always better, i think, to split the stock. When you do a reverse split it goes down, when you do a reverse split, it goes up. It just looks cheaper. Well see what happens. Whats wrong . Facebook are the other big report investors are reacting to this morning. The social media giant earning 34 cents a share, a dime ahead of estimates. Revenue also beating expectations, thanks to facebooks mobile advertising business. Facebook did say video ads and ads within its Instagram Photo sharing app would not make a meaningful contribution yet to revenue in 2014. The company also announcing that chief Financial Officer David Ebersman will be stepping down june 1st. Hell be replaced by david winter. He was also you heard of him. He was from zynga, a cfo there. I like the name of zynga. Thats what facebook did, up 3. I dont know what the market cap is of that. Im surprised apple well get back to that we add 8 on to that. Its almost 2. 5 . Its gone up today. That will bring the yield down. Right. Lets talk about earnings were expecting. Today is a huge day for results. Weve got eli lilly, caterpillar, 3m and General Motors, all expected to report just over the next 90 minutes. Buckle up, people. Today will be capped off by microsoft and amazon after the bell. And well get first on cnbc reactions and comments from eli lillys cfo. Thats at 7 00 a. M. Eastern. We have gm cfo Chuck Stevens, happening around 7 50 a. M. And at 8 00 a. M. , caterpillar ceo. Hes also forthright about the global economy, too. A lot to talk about with all of these folks today. Alstom, one of the big movers today. There are reports, they came out yesterday, that General Electric is in talks to buy the company for about 13 billion. And that a deal could be announced as early as next week. That was out yesterday. I havent looked in all the papers this morning but wasnt it bloomberg it was bloomberg. Ges declining to comment on the report. And alstom says it was not informed of any takeover offers. Can you say that . I was not informed of any i dont know. The stock youre saying that sounds like legalese . Where theres smoke theres usually fire. It makes sense because ge is unable to bring back 80 billion in repatriation. This will be 13. They have 87 in cash, 57 over there. Out of this country. Alstom shares have been good right. Down 20 or something. I still say we, even though were not owned by General Electric anymore. I understand. Move into more of transportation. We already there i go again. Ge makes locomotive engines and are involved in jet engines, things like that. Theyve gone away from ge capital and finance. Kind of makes sense. Alstom shares had dipped about 20 over the past year. It was a cheaper buy. Thats up 14 . We will see. If ge were to pull off such a deal, it would be the biggest acquisition in the companys history. Now i dont know if thats adjusted for inflation but this was the first dow component, at least the last original dow component. Its thomas edison. This would be the biggest acquisition ever. It would be a big deal. Are the animal spirits back . You cant buy yogurt from that country. Right. And also you have politicians and unions in france where the company employs 18,000. Can you imagine i dont know whether ge would go in and rationalize, is that what we call it, rationalize operations but it could mean i dont think you can. Youre not allowed in the first place. Would the french and i use that not as a pejorative, would the french the word itself. No. I love france. Favorite city in the world. If you cant buy a yogurt company, youd be able to buy this . This is a jewel of french industry in manufacturing. I think that would raise more than a few brows. These euros, they know the bullet trains. Everybody travels around in trains. We tried to bring them here and connect cities that dont even want to visit each other. Bullet trains in europe theyre the thing, the way to get around. You dont have to take off. Oh, fly. I think the nauseous is from the nervous. No. Its a motion thing. Youre strapped in. Its a motion thing. Trust me. Lets talk more about General Electric. Janing us joining us now is nick heymann from blair and company. Longtime follower of General Electric. Where theres smoke, theres fire, ge, are they considering buying this company . Good morning, joe. Excuse my voice. I would tell you in november of 2010 ge was critically interested in the grid portion of alstom, which at the time aviva owned. In turn, it was alstom that beat out ge for all of the utility Power Management products that now are a part of alstom. That is interesting. So you werent surprised you cant say. You dont know whether theres actually something going on or not. Theres a lot of puts and takes here. Okay . Clearly, they have a significant overlap in their gas and steam turbine business. We added it up last night. The two collectively are utilizing about 40 of their combined heavy gas steam turbine capacity. Ge is one of the top two wind producers. Alstoms entry into the business is probably not strategic. As you mentioned, ge has focused on the freight side with these locomotives and alstom has been one of the three leaders in the Passenger Rail side across all spectrums of the market. So the transit rail business has consistently grown moderately but grown strong free cash. At 13 billion, this could be 13 billion, joe, i think we have to check the numbers under the hood. Okay . Because 13 billion might be the 25 premium ive seen referenced to yesterdays equity price for alstom. That would equate to if you paid something in the 32. 50 range, thats euro, it would equate to about 9. 9 billion in euro just for the equity. Theres 4. 5 billion euro of gross debt, 500 billion in capitalized lease. Wrap it all up, its about 1. 6 billion euro which in dollars would be about 18 billion. Assume something of that debt. They got a lot of money over there. Theres a lot of i think theres a lot of opportunity here, but, you know, i think its certainly affordable by ge. I think the strategic fit could be rationalized. But i think clearly to ensure the required returns, remember, alstom for almost the better part of seven or eight years now has earned 7 or 8 margins. Youd have to have an extensive Restructuring Agreement with regard to alstoms existing cost base. As you mentioned, today 19 of its employees are located in france, 18,000. You think the french would let ge buy . Heres another tweak. 2 8 of alstom is owned by bouygues. The stock was down 68 from its alltime of 76 euro back in 2008. He suffered for quite a while. He apparently supports this transaction. Really . Thats interesting. Wish we had more time, nick. A lot of stuff in tech and elsewhere going on. Appreciate it. Okay, sir, have a great day, joe. Have a hot toddy. I think that has booze in it. Its 5 00 somewhere. Shareholders approving managements Equity Compensation plan at cocacola yesterday. Warren buffett is cokes largest shareholder, holding about 9. 1 of the shares outstanding through berkshire hathaway. He told me he abstained from that vote because he didnt agree with the managements equity plan. He hadnt said anything before that. He does say the plan to increase the number of shares it awards managers he thinks is excessive. He didnt want to vote against it or say anything ahead of time because he didnt want to express any disapproval of management. He says he still loves cocacola. He reiterated his support for cocacola ceo mukhtar kent. In 2002 coke had a plan that involved 240 million shares. That lasted six years. They had a plan in 2008, six years later, that was 280 million shares. That lasted six years. And then this plan when i read about it was for 500 million shares, which they would equate to 340 million, still, 340 or 500, they were going to use it, they said, in four years. That really struck me as quite excessi excessive. So i didnt actually read that until after winters wrote the letter. I would have felt the same way. Heres a statement from cocacola on buffetts comments. The Cocacola Company board respects mr. Buffetts philosophical stance on ek we equitybased compensation. We greatly respect his views and look forward to continuing our productive relationship with him for many years to come. Buffett said hes never sold a share of coke, never plans to sell a share of cocacola. Still has a lot of faith in the management, loves mukhtar kent. He has been outspoken about excessive compensation in the past. He said to him this felt excessive. Im all over the map on this, as far as nuances go, i thought a lot about this, too. I think were both right. I knew he wasnt going to go against coke on this. I didnt think of the im not going to say chicken a word i cant say. If he feels that way, vote your shares. To be able to talk the talk and comment on it without doing it, the only way if you want to prevent the public secretarier from getting involved in excessive compensation fwb thats what you view, it has to be shareholders who take the initiative on this. If he doesnt stand up to take the initiative on something that he thinks was wrong, then i dont know who will do it. I think sometimes a rebuke like this is potentially enough. I think so, too. My guess is mukhtar kent and the board got the vote they wanted but they can choose how many years to use that. Originally they would sbend pen in four years. I asked him if they took longer to spend that, would you be happy . He said yes. You can get more with sugar than you can it may be just his to speaker suede in persuade in a softer way. He doesnt do hostile takeovers. He likes the management here. He think kent is the best person to be running this company. I love warren, you know that. Hes a piece of work. He was the most incredible businessman in his generation which doesnt mean youre always that nice all the time. Okay . Now hes a nice old guy, he has a lot of money and everything. The way that people immediately will accept the worlds richest man, assuming the role of the protector of the little guy and the protector of the working class and the guy against excessive compensation, the guy against rich people getting a tax break, no one ever sees that with even a hint of cynicism or with skepticism. I just think, here he is, he can set himself up, i wish i paid a lot more taxes. But he doesnt pay taxes. He talks the talk but he never really there were people who complained about that yesterday. First of all, it caught me by surprise. I was trying to figure out how to react. What . Say that again. Did you say that . Just say that again. I was a little i will say, if somebody like that doesnt speak out, i havent heard from david winters. He put out a statement right before. All that cocacola said was that 83 of the shares cast were cast in favor. I assumed that meant buffett voted in favor. So did winters. He said were surprised he had an opportunity to stay a stand on failed to seize it. The more i thought about it last night, the more i thought he can be more persuasive by doing things this way rather than going hostile. He says when the tide comes down, everys naked. When the tide comes you can see whos naked. This time, its belching when youre invited to a dinner, you do it too many times youre eating alone. Youre eating in the kitchen, he said. He thinks long and hard about everything i dont think he thinks long. I think he can think so quickly about things. A lot of things struck me. Big news coming out of apple. Joining us now, dan morgan, senior Portfolio Manager at cenovus trust company. What struck me here was the company may not be ready to take over the living room and it may not be ready to buy tesla and may not be ready to have flying cars yet. But all those things hold a lot of promise but in the meantime they have to do some it looks like theyre rearranging the not the deck chairs on the titanic but rearranging finances to give shareholders right now because they dont have a new product yet. Youre right, joe, i heard you talking before about apple, saying can they extend the current portfolio and drive growth that way or are the new products like the iwatch, going to make up for the slowing and the products. They seem to be taking a bit from ibm in terms of reducing the share count year to year was 65 million. They reduced the number of shares, really jacked up that earnings per share on 7 net profit growth. So you know, increase the dividend, repurchase shares and so forth. Overall it looked like a decent quarter as you were talking about throughout when the numbers came out. Youre right. The jury is still out. Are these new products going to actually be able to make up for these more mature products that are starting to slow down in terms of volume . In the meantime, i mean, tim is like how about this . Ill give you this and what about this . Right. How about i throw in this . You have 40 of upside. It worked. Yes. Everybody loves a split. Thats huge. I like 2 for 1 split. Ge split 3 for 1. I never got a 7 for 1. I think there have only been three or four larger ones. Reverse splits from 30 cents. If youre a bank you do reverse splits. Id rub 7 all over my body. You dont need to see that. 7 for 1, its like, whoo suddenly its pretty great. For a tech stock, a growth stock, id have to question close to a 2. 5 yield. How much are you growing . Microsoft, intel, theyre all doing that now, cisco, paying big dividend yields. If you look at the top line growth on amle what was apple, little over 4 . Theyre trying to move things around. Its like a drug company, joe, if you think about it. You have these Big Drug Companies with the huge blockbuster drugs coming off patent. They have to come up with new products to account for that. You think about it, you have the four key products. You have the iwatch, itv. Its a big question. Youre on a treadmill and somebody is turning up the speed. Just to stay in place youre running faster and faster. There you go. Appreciate it, dan. Thank you. Okay. When we return, a special bring your kids to work edition of executive edge. We go to the front lines of a very hot topic, which is cooler, facebook or apple . Well ask the kids of america which ones they use. They have answers for us, right after this. [ dog barks ] [ male announcer ] imagine the cars we drive. Being able to see so clearly. To respond so intelligently and so quickly, they can help protect us from a world of unseen danger. Its the stuff of science fiction. Minus the fiction. And it is mercedesbenz. Today. See your authorized dealer for exceptional offers through mercedesbenz Financial Services. Take this simple test. Press your tongue against it, like this. It moves do you feel it . It can happen with every denture. These movements may irritate your gums. But you dont have to bear with it. You can try fixodent plus gum care. Thanks to its formula, your gums become one with your denture. This helps stop movement and helps prevent gum irritation so you can keep enjoying life. [ apple crunches ] fixodent. And forget it. Teach the children well the fathers health did slowly go by it is time now for the executive edge. Which do you think is cooler, facebook or apple . We just happen to have a Panel Experts here to tell this out today. We have scott, kimmy, natalie, blake, who are all around the table. Joe, you have to admit, these are the experts when it comes to cool, not us. They are. I think we might have the same answers, because kids how old do you have to be to be on facebook . I think 13 unless you have permission from your parents. Is that how it works . Are any of you on facebook. Instagram. He whereas talking about facebook. Its bad for you to be on facebook if youre younger. You are not the customers. You are the users. Thats right. I saw that. I saw that. If you had to pick. I have my phone right here. I have my iphone. Kimmy and natalie. Ipads and ipod touches. Yes. Kimmy . I mean natalie . Im ipod touch and ipad. All around the table. I use an ipad for school and i have my iphone in my pocket. I dont know what id do without apple, although unfortunately sometimes i do instagram in school also. If you got to own a piece of the business. Thats what a stock is. You get to own a piece of the business and kimmy, you asked a good question before we came back. What was the question . Which one makes more money. The right question to ask. You are thinking like investors on this. Which one would you like to own a piece of it . Blake, you vote. Thats a very hard one. The reason why is because, you know facebook is a big thing. Its been around since 2004. Good. A lot of people use it but like the head of apple, it would be good for you to own electronics. Yes, you can Program People communicating with each other but apple owns everything. They do everything. What do you think . Ill tell you one thing to think about. Apple is already worth 500 billion. Theres something called the law of large numbers. Facebook has more possible growth but that doesnt mean you shouldnt own apple. Which do you think has more potential . Isnt your blog on facebook . I promote my blog on twitter and facebook. Its really good. You should check it out. Peace loves profit. Oh, please, if you were not my daughter id say cut with the promotions. And huffington post. Dont forget. Dont do that. Sorry, go ahead. I feel like im at home. Go ahead. Which would you own, buy, sell or hold . Can apple get any better. Thats a good question, too. You also need to think facebook has some potential. I would still go with apple, though. Natalie . Go ahead, natalie. Okay. Facebook is more for like adults but then again kids usually use apple because they dont really use facebook. I would say apple because its cooler. Your friends think apples cooler, right . Yes. None of us use facebook. Its not something you can think about all that much . Yes. Kimmy . I would say apple because like most people in school use apple and everyone has apple. It makes a lot of money. Can i be a kid . Sure. Apple is already moved a lot but its no comparison. Sitting there how do you make money on facebook . Some crummy ads . If i can sell ipads, ipods, iphones, i can buy things. Im with tim, man. Not with whos the other guys name. Zuckerberg. Thats not his name, is it . Jessie eisenburg. Im going to disagree with some of you guys. Maybe my later years when im 20, 30, my opinion might change. But right now i think its apple. But i dont really know. Maybe if we get to know a lot more of facebook and get to follow more friends and stuff like that, it might be a draw. I think right now its got to be its like my favorite fruit. But its not a red apple on the phone. I can take my cover off. Its a gray apple. Very good point. Very good point. Who knows what will be around in 20 years. It will be better phones, email, come on . Phones have facebook. I cant believe im wrapping you kids. You talk as much as i do. I dont know where you get that. Whose son oh, yes, thats right. Good job. All right, you guys. Awesome. Were you nervous . I dont think so. Not really, right . Natalie is like arent we on tv . We werent live. That was all practice. Oh, okay. It helps to look at it that way. Warren buffett weighs in. We put the markets front and center, next, the fda proposing new rules that would govern ecigarettes. You know if i ever catch any of you thinking about anything like that, youre going to have heck to pay. Anyway, we have a report on that coming up in the next half hour. Yuck. Look at that. Addict. Youre an addict. True businessgrade internet comes with secure wifi for your business. It also comes with public wifi for your customers. Not so with internet from the phone company. I would email the phone company to inquire as to why they have shortchanged these customers. But that would require wifi. Switch to comcast Business Internet and get two Wifi Networks included. Comcast business built for business. Passion. Became your business. At t can help simplify how you manage it. So you can focus on what you love most. When everyone and everything works together, business just sings. Good good morning and welcome back to squawk box here on cnbc, im joe kernen along with becky quick. Andrew is off this week. Is it not murphys law . Mergers and acquisitions, ge and Drug Companies and valeant. I hope it was worth it. Maybe next time you think about vacation, you think about let him enjoy his vacation while hes there. Youll think about the rest of us and viewers that could use your you start a deal book for gods sake. Let him enjoy his vacation. No. I want to make him feel bad. Time warner cable earned 1. 78 per share for the First Quarter, 10 cents above estimates. That was roughly revenue roughly in line. The company also added 148,000 more residential customers last quarter. Thats the most in more than seven years and, yes, youre right. This is the company thats in the process of being acquired by our parent company, comcast pending regulatory approval. Thats happening right now. Elsewhere, insurer aetna earned 1. 98 a share for the First Quarter, well above estimates of 1. 55. The Company Raised its forecast for the year after record quarterly earnings, revenue and medical plan membership levels. Thats our friend, too, isnt it . The big thinker. Mark bertelini. He says whatever hes thinking. He does. To the concern sometimes of some of the handlers that would like to wrap it back in. Ive seen it. Its refreshing. It is. I like it. Thats why we love him as a guest. Its great. Well have to get him back soon. Lets talk about the s p 500. It ended its sixsession winning streak with the market closing slightly lower on thursday. I spoke with legendary investor Warren Buffett and asked him if he thought the markets were getting frothy. Its a big zone of reasonableness but stocks ought to be higher every ten years. Theres a plow back of earnings that go back year after year. Stocks will become worth more decade after decade, not in a presigh manner, even manner or anything of the sort. Joining us right now from new york, michael ryan, chief investment strategist of Wealth Management in the americas for ubs. Warren buffett says he doesnt think stocks are unreasonably expensive at this point. Do you . I agree with warren. Weve had a repricing of stocks were still at exceptionally high valuation levels. One of the things warren was getting at there, at the end of the day its about corporate profits and earnings. We still think that the profit momentum is intact. We think well get high single digit earnings this year. Where does that put you at the end of the year . We use sixmonth targets. We think were at 1950 over the course of the next six months. We think the market will continue to go higher. Id welcome for mid to high single digit gains over the course of the year. Do you think this will be a slow and steady plow or do you think well see volatility like weve seen recently . Not necessarily the same weve seen over the course the last five weeks but lets face it, we are getting to the point where were in the midst of fed tapering. We get to the point where valuations are no longer as cheap as they were 12 months ago or 18 months ago. I think youll get more choppiness in the market. Directionally well head higher. I think it will have to be select knife terms of the way youre positioned in markets, becky. Meaning what . Are there sectors 0 are stocks you like better than others . I like the sicyclicals that e geared to the capex spending cycle. We bring the next driver will be the acceleration in capital spending. It will be technology, industrials, financials. Within technology, is that tied more to the old technology, much less to the new technology . It really is. Its where we think theres going to be growth, we see enterprise spending, even the hardware side. Its not some of the high flyer names that have come under pressure recently. Its the strong, steady growth names. Good to talk to you. Thanks, becky. The fda unleashing new rules for ecigarettes. Its a delivery stm for niystem nicotine . Its better than actual cigarettes. Id hate to see anybody start smoking these things. I can understand it as a way to get off of real nasty smoke cigarettes. Who would take up ecigarettes . I dont know. Nbcs tom costello will have a report on that, next. You have to become addicted to nicotine. You dont start that way. Why would you even do that . We all pick up habits. Wine is an acquired taste. Beer is an acquired taste. Coffee, you dont come out of the womb liking. We pick up habits we shouldnt. Well have more squawk box coming up next. [ 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. Welcome back, everybody. Right now it is time for the squawk planner on this special bring your kids to workday. We have Quarterly Reports coming up on the way from several industrial giants. I need help here, guys. The first one were waiting for includes 3m. Excellent. The second one were looking for is . Call caterpillar. We have two big economic reports on the way today as well. Weekly jobless claims. We also get the march durable goods numbers, both coming out at 8 30 eastern time. After the bell, amazon and microsoft are expected to report. That is your squawk planner. Lets get back to joe. Joe back over to you, joe. Thats a good toss. The fda is proposing new rules that would govern ecigarettes, adding restrictions similar to those that currently govern Tobacco Products. Really, live, my buddy . Seriously, tom . Mr. Kernan, you have never looked better with all those young fresh faces offering words of wisdom. I thought you were talking about yourself. You still have a young, fresh face. Great to see you, my friend. I immediately think, you know, the regular cigarettes cause cancer and tar and nicotine. This isnt much better, tom. Its a nicotine addiction youre helping satisfy, right . Yes, yes. Tell us what are all the ramifications . The argument is, it helps people get off cigarettes because you dont have these 4,000 chemicals associated with smoking tobacco. And yet youre right. It is really a nicotine Delivery System that comes in these ecigarettes. They call it vaping by the way, the new proposed regulations would do the following, essentially place these items under tobacco regulatory control. That means prohibiting sales to anybody under the age of 18. No vending machine sales, no free samples, no Health Claims without the fda reviewing and approving those Health Claims. There must be a nicotine warning label. I talked to the fda commissioner about this, dr. Margaret hamburg. The Current Situation is of great concern to all of us. It is an unregulated environment with respect to these products. We think that the fda can and should have a role in the oversight of these ecigarette products and other Tobacco Products as well. Thats why were moving forward today, to try to make sure that we can extend our Regulatory Authority to these products that are increasingly available in the marketplace and do raise very Serious Public Health concerns. Heres the problem. The fda doesnt really have a firm grasp on what, if any, health risk is associated with an ecigarette because theyre not regulated. Now that they would fall under fda regulation, the fda scientists can go through, do a thorough review and address whether there are safety concerns, much like tobacco. However, this is something that the consumer advocates are not happy about. There will still be no ban on online sales or market. You can still buy these onloan and market these online. Lastly, no ban on tv advertising. To while you cant advertise the marlboro man anymore on tv, in theory, you could have a marlboro equivalent for ecigarettes on tv. Back to you. Great. All right, tom, terrific. Tom on nightly every night, Brian Williams favorite goto guy. He gets more air time than anybody else. Youre a list now. They say, its tom costello. Or is that joe kernens side kick. Many years ago. Dont make it so long next time. When we return, cnbcs first on 25, a profile of one of the members of the exclusive list. Heres a quick hint. Hes a billionaire. Youll have to wait to phone out the rest until after this break. We do have more squawk box, right after this. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. Predicting the future is a pretty difficult thing to do. But, manufacturing in the United States 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. Were soon going to unveil that big list, the cnbc first 25 list. We have a profile of one of the names on the roster. One of the worlds richest men with one of the coolest names. Carlos slim. Carlos slim is a very influential billionaire from a developing nation. The wall street journal said its hard to spend a day in mexico without putting money in carlos slims pocket. His enormous net worth of 71 billion, the worlds second largest fortune says forbes. Theyre not just in from his native mexico either. Theyre everywhere. Parts of a vast, global diverse conglomerate called groupo carso. You can describe it in one word, bold. He made his first round of money and became wealthy the first time around because i was buying in mexico when everyone else was selling. He has the strategy of buying when crisis strikes. And certainly when mexico has been through a time of economic crisis hes been able to swoop in and pick up companies perhaps on the cheek. That streak runs some critics the wrong way. But it has helped him build a massive empire in everything from construction, retail, to food, to the heart and soul of his wealth and power, telecommunications. His largest Single Holding boasts 265 million subscribers in 18 countries. What carlos slim did that nobody else figured out is that the prepaid telephone model can actually be profitable. Nobody believed that before he did it. Hes now actually the biggest prepaid provider in the United States. His prepaid cell phones go for as little as 20 a a piece with 60 minutes of use. He will put them in the hands of people who might not be able to a afford them myself. American mobile may be his legacy. He has many other investments. But when you look at what telecom and wireless in particular has done not just in mexico but around the world, its what people remember you buy. The telecommunications tycoon controls 70 of mexicos cell phone market through america movil. Not to mentioned land lines through telmex. Its going to be tough ownership. Hes clearly the target. And so they are going to do everything they can to try to reduce his market share down to 50 . Perhaps particularly tough on a man who slowly and strategically built himself up to become easily the wealthiest man in latin america and uses his money not just to buy businesses but to rebuild them and his entire country. Hes made sure he has used his personal resources and the resources of his companies to develop areas where his building is operating. At his core, he is a very, very smart, dedicated businessman. Carlos slim is a symbol that mexico has arrived. To have one of the richest men in the world as a citizen of your nation says we can do it too. And tomorrow and monday squawk box will unveil a couple more members of the first 25. The big unveil is coming up on tuesday. That will start right at 7 00 a. M. Eastern time. Thats right. Some of these people around, arent we, maybe . We might be very well. We would like to talk to some of them. See what they think about it. See what they think happened in their industry the last 25 years and what they think will happen in the next 25 years. Who better than that. All right. Do you know anyone we have yet . I might. I could tell you but then i would have to kill you. Anyway, we are just getting warmed up. We have eli lilys cfo. G. M. , 3m and caterpillar set to report. Our guest host today, former white house economic adviser Austin Goolsbee. Good morning. Good morning. Great to see you. [ 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. Another big day for earnings central. G. M. , 3m and cat are all about to turn in Quarterly Report cards. We have the numbers and the instant reaction. Corporate titans in the spotlight. Apple announcing a major stock split. Germ electric could be looking to make a big dea b france. Squawk begins right now. Good morning, everybody. Welcome to squawk box here on cnbc. Im beck request quick, along with joe kernen. Andrew is off this week. Today is bring your kids to workday. This is our favorite day of the year. Austan goolsbee is going to be with us the next few hours. Good morning. Good morning. Its been way too long. What kind of punishments are there for forcing your kids to come down here at 5 00 in the morning. They were up before i was this morning. Kimmy was already dressed. Natalies alarm had gone off. And putting that tie on. Why is it so hard to look up . Im behind him trying to and then blankets in the car. Something tells me that you were not the most soothing of waker uppers either. Thats right. Did you set them up to come in and ransack the guests . How are you . Now, wait a minute. What are your earnings . Anyone that thinks having your kids sit live knowing what they say sometimes. Im like a sitting one of those censorship switches. Im ready for a ramble. It could be anything. And i feel the same way with you sometimes. Im not sure what you know who used to feel like that too . The obama administration. Oh, my god. Up in canada. Hes talking about math. Oh, gee. David, what do we do . No, im kidding. I know you are. You know that was totally bogus. I know that. But i do also know that youre my guy in terms we needed you i think to be there to just pull people towards the private sector once in a while. I know how you do it. I understand how you feel. Many of my clients have felt that way in the past. But they found that the private sector does generate jobs. So he can be reasonable. You pulled them a little bit that way. And the reason all those things came up and the whole rumor on things. You are a man who says whatever you think. Honestly. I think thats a huge compliment. No one is ever going to tell you what to say on anything. You are very open and honest and says what you think. Smart. I think thats a great compliment. I really do. You know whats going on in economics. And economics the only science in the world where completely opposite of viewpoints on what works can win a nobel prize for both . Probably. But i appreciate you called it a science there. Did i leave out pseudo . Quasi . Look, the thing is i think our in ability to just go run an experiment in a lab makes it more like i dont know. Its not physics. Maybe more like biology or something. And i think the fact that you can win nobel prizes for fundamentally different views, i think thats healthy. We have had the field of economics had a lot of intellectual ferment. It is actually pretty exciting. You see the new golden boy, this french guy. Were going to bring those ideas up again. Whats his name . Vichetti. I dont know. My french is not great. His argument, maybe its not exactly what its been portrayed. In the u. S. , were trying to jam this book into the debate over the 1 . His argument that if the returns of capital have gone up permanently. If you roll a tape forward 1 years, are we going to have 10 families that have all the money. Its not that its inherited here. Its different. Were talking about how do you explain alan mulally . Look, im definitely not here to defend the book. I just think this idea that if capital becomes inherited and so 100 years from now the u. S. And france is 1710 or whatever, i do think of all the countries in the world, this is the place i still think if we can just get education figured out. I agree with that. If we can get it figured out this is the place you can still do it. I agree with that. Theres no dukes. The answer is were on a road to surfdom. There is not a level playing field. If youre born in certain areas and in certain families you have a better shot. Absolutely. All right. We will talk more in i just a minute. Yesterday you finally saw that six session winning streak broken. Dow futures 68 points up. The 10year note at this point is looking like its yielding 2. 71 . Its been stuck there all week. Investors casting a bullish eye on shares of apple. The Company Reported better than expected earnings. It increased stock buyback by 30 billion, upped dividend by 8 , then it declared a sevenforone stock sphreufplt you add all that up and its up 8 , a gain of 41. Eli lily, 70 cents a share. Revenue below estimates partly because of generic competition on sales of cymbal ta depression drug. That went just went off in march. They have had a series they have had to deal with. Because earlier this week they decided to get into the Animal Health business. We talk about animals that you keep healthy so you can eat them. And then animals you keep healthy because theyre pets, right . Yeah. Some guys on our staff where the pets arent necessarily safe from the other option either. Oh. I thought you were going to say animals. I dont know. They have squirrels as pet. They compete for a meal. Joining us now with more on eli lilly. A drug company. Its almost unique, suspect it, that 30 of your revenue, you have it one day and its gone the next. Thats tough to maneuver around. Joe, youre right. The pharmaceutical industry is unique. Were the only one characterized by pat expectations where you can severe profit and revenue cliffs we have to manage our way through. In the case of lilly, its not a surprise. We have been preparing for some tie. In regards to our first approval asrns for seramsa for advanced gastric cancer. Top Pipeline Data we read out in the First Quarter. As you mentioned earlier, we kapld capped it off with novartis. A lot was written this week after that deal. You were part of a three wereway deal with that. Maybe Drug Companies not all things to all people. We had this valeaant deal with allergan. They said its so hard to develop new compounds, the risk is so high, that most are developed in universities anyway. We are going to focus things we can control. Thats bad for all of us. Is eli lilly going to try to bring things from the lab bench to the bedside . Absolutely, joe. Really two i think, one, what you see is witnessed by the latest series of deals. Companies navigating towards their strengths. For us it was Animal Health, with that acquisition. One of our areas of strength is in oncology, diabetes, neuroscience. So for example our innovation led based strategy centered around research is really the core of what were about. Thats allowed us to create the pipeline we had before which is the strongest in history. We have had 12 molecules between late stage development, submission, and the last receiving approval with seramsa. It is through that focus and Research Effort that allowed us to create that outlook. We are sitting on the strongest pipeline of the history of lilly. Thats the core of our strategy. We might be cusp too. They changed one letter of a dna in a mouse and these cells corrected mutation. Can you imagine when we can sort of do what the immune system does and redo the sequences to make sure people dont have genetic diseases. We cant be afraid to spend money to have big payoffs. I hope thats not where were headed. Joe, we are sitting at unprecedented time in our industry. If you take our latest approval of suramsa, it is for the third most deadly cancer. We are going after the greatest need of unmet potential. If we can attack those type of disease areas like alzheimers, we believe we can not only add to the welfare of patients but you will see really an economic boost. You will reduce the burden on the economy itself. Hey, derrick, one more question for you. We have seen an awful lot of mma activity. Zimmer holdingsings is going to be combining with biomed. 13. 35 billion dealing to create a musculoskeletal innate sor to Shape Solutions for an evolving health care industry. Does this surprise you . Do you think theres a lot more to come . Again, becky, what i think is happening is youre seeing companies beginning to sell to areas of strict. Whether i like at novartis and blackstone or what you see here with lilly. If you look at other acquisitions we acquired two molecules focused on pain. Those are areas of strength for lilly. Thank you. We appreciate your time this morning. See you later. Just to talk about this deal again. This is just crossing. Zimmer, which is the joint company. We talked about an awful lot about them. This is not the one in colorado. Hip replacement joints. I was like, can they fix me being bald . How far away is that . You said the joint company. Zimmer and biomed teaming up. They have approved a tentative agreement which a cash and Stock Transaction valued at 13. 35 billion subject to regulatory approvals. Im trying to find the breakdown for how much is stock, how much is cash. I thought it was bmt, but its not. I thought it was bmet. It was bmet. Who are they buying it from . They might be buying from a private equity firm. Yeah, a private equity firm. The acquiring stocks have been trading higher too. We have had a lot of guests who say they have never seen this where the acquiring companies do this and making sure it makes sense for their shareholders too. I dont know where they are trading. 91. It is so strange to see acquiring companies with the stock jumping like this. Its going to be interesting to see too, youre getting a whole angle a lot of times for these acquisitions. In phrma. There are going to be some controversy. A lot of companies will invert and move ahead. That is a great conversation. We need to talk more about that. These are the guys in a were worried they got singled out in obama care for the medical device. I think they got rid of it eventually. They actually cut it down. Is that your idea . It came from congress, actually. It wasnt in the original plan. They wouldnt play ball. They have a whole bunch of more people covered so theres a lot more demand. And they wouldnt play ball like the Drug Companies. Yeah, yeah, yeah. Quid pro quo. When wii come back, Warren Buffett on his investment in big blue. Prepare for earnings blitz. G. M. , 3m, caterpillar and verizon. E financial noise financial noise financial noise financial noise he doesnt see a parallel back to 2001 that he warned so many investors about. I asked about one of his tech holdings, ibm. It depends on the price. 191. 63 on the last trade. Your average cost close to 173. In the annual report, you have seen a gabe of 12 . Its now worth closer to 13. 05 billion. So what is the right price . We could buy it. I wouldnt rule it out. I paid that much for the stock. What we asked is whether he had soured after the most recent Earnings Report where revenue was down another quarter. He said, no, not at all. He wasnt surprised. He bought more shares. He hasnt sold a single share. Im going to watch. To see if he does . Yes there were rumors with jim cramer talking about some stuff. If it becomes clear that, you know, they are going to get left behind by new tech. They have had a couple of makeovers already. I dont know how many times you can do that. I dont think he will be there. He wont wait. Arent you with ibm . Its either seven or eight. We had bill miller in. Six consecutive quarters, which is why he felt it was ready. I think it might have been the eighth. If its still down a year from now that will be a different story. Austan, you were talking right before break, you think it is happening because of u. S. Tax policies. I think thats a factor. I definitely think its a factor. That we have not sorted out our complicated and deeply messed up Corporate Tax system in the u. S. Which we could do on a bipartisan basis. Its a motivator just itself to have transactions. Even if they didnt make economic sense pause they can use this the difference of this tax wedge. It gives an incentive for foreign purchases of u. S. Companies and then flip where the headquarters is. The u. S. System treats u. S. Companies on a worldwide basis. If you make money, you make money there. It is taxed in china. And then the ditches in the u. S. If youre a German Company its not. So if youre making profits like guys in pharma or tech, you have this incentives to flip it around. Valeant, the canadian company, the way they can bid more than anyone else mr. Is that wedge. G. E. , i dont know if its true or not, they have a different situation. G. E. Got 57 billion 80 something in cash. And 57 of it is oversees. So they can buy a French Company and leave it over there. Its true, though. If you have a company as big and complicated as ge, theyre going to be doing a lot of investment overseas. But this is the point. This irritates me. The worldeer taeuts you. No Companies May 35 . They pay much lower. But the reason they pay lower is that number makes them move facilities abroad. Traets true. The blended rate is naturally lower. Thats partly true. Because they are moving things under there. We have a narrow base, high rate. If youre doing a lot of r d and physical investment, you get low rates. If youre making money, you tend he to pay high rates. Too many loopholes. Its a mess. In front of congress is this an argument for a simpler tax code . I would love to hear more about this. We will continue us. General motors is going to roll out results. The first on cnbc anywhere. The first interview anywhere with the company cfo. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. 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Tdd 18886486021 because when your tools look the way you want tdd 18886486021 and work the way you think, you can trade at your best. Tdd 18886486021 get it all with no trade minimum. Tdd 18886486021 and only 8. 95 a trade. Tdd 18886486021 open an account and earn 300 commissionfree online trades. Tdd 18886486021 call 18886486021 to learn more. Tdd 18886486021 so you can take charge tdd 18886486021 of your trading. First on squawk in the street. 11 00 eastern cnbc. Its bring your kids to workday at cnbc. Theyre on the set. They are at the wall. They are now in the control word. Natalie is rolling prompter. Well done, natalie. I appreciate them coming up with us. Natalie, youre in our ears too. I wasnt going to say anything. But the kids read prompter really well. Some people cannot read prompter. Im not going to name any names. Are you talking about me . No. Hes not here to defend himself. He is tell me to wrap up. I have 10 seconds. Up next, earnings parade starts. G. M. , 3m, cat and verizon. 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. E financial noise financial noise financial noise financial noise welcome back to squawk box, everybody. General motors Quarterly Reports hitting the wires. Phil, whats it look like . Its a kitchen sink quarter for General Motors. Well talk about all the charges included. It beat profits 6 cents a share. They were expecting g. M. To earn 4 cent a share. Revenue coming in 37. 4 billion. The street was expecting g. M. To bring in 38. 4 billion in sales. Keep in mind, there is a 1. 3 billion charge relate to the recall switches. Thats the reason you are seeing 100 million in profit. The headline, g. M. Beating the street on 6 cents a share, two cents better than the street. Chuck stevens, cfo of General Motors coming up in a few minutes. Well go further into details on these as well as the impact. Phil, thank you. We have 3m, verizon, caterpill r caterpillar. 3m is 1. 79, the first number i see for the bottom line. I can tell you sales were 7. 8 billion. Might be a penny shy of expectations. 3m is giving us an outlook for 7. 30. 7. 45 is the estimate. 7. 8 billion in sales is also below. So 3m is below on both counts. It is down 2. 97. Verizon came in with 84 a share. That includes the five weeks in which they owned 100 of Verizon Wirele wireless. Most made it on a pro forma basis. On that basis the company said adjusted earnings would have been 91 cents a share. I dont think you should look at this as a miss at this point. If those analysts were looking pro forma it would have earned 81 cents a share. On an adjusted earnings basis, where they are only looking at five weeks, it would have been 84 cents a share. The company talks about 1. 15 a share, including nonoperational adjustments of voda phone. Verizon wireless looking at Service Revenue of 7. 5 looking for ads. 539 retail. Breaking news, very rye whereon is a dow component. 378 still is. They keep switching them. I have to get used to Goldman Sachs being a dow component. I dont like change very much. Let me mention caterpillar. The bottom line number is 1. 44. If its clean, its way above expectations. Its up 4. Sales of 13. 24 billion versus expectations of 13. 152. That is also above expectations. However, it is increasing its 2014 profit outlook by 25 cents. Lets remember this is the First Quarter. Just beat by 20 cents. For the year increasing by 25. So a little bit more. That is a new high. It is all about china, mining, what was going to happen there. Doug is going to be joining us, chairman and ceo. Joining us i think at 8 00. He was okay the last time i was on. Up to 1. 20. Then it went back to the 1. 15. Adjusted 2014 at 5. 30 a share. But then the adjusted 6. 10. Yeah. Regular. Had seen 5. 30. Now 6. 10. Raising the outlook nicely. Thats kind of a big story on two counts. You never know whats going on from the numbers theyre looking at. How their revenues are doing tells a lot about whats going on. Dow chemical we had on yesterday. Their growth was much better than expected. Part of that is where the company was moving. The second is this, plus the moves from apple i think the biggest thing to be looking at in 2014 is if the earnings are going to stay strong like this, what are they going to do with the money. They have been sitting on their money for a couple of years. Either they use it and invest or do they pay it out individends. You can expect more Capital Expenditure from dow. They are putting in plants down in texas the. Some of that is coming right back here. The energy price is a big thing for dow. Well get the chance to the ask about that coming up so you say dont really believe that the numbers you said that about the employment numbers here. The one they point out, look at the actual job situation to see if you really believe thats fair. No, no, no. You attacked me. That was santelli you said it in previous years. It did make sense what you said. Anyway, austin will be with us. We have a lot more to talk about. When we come back, the ceo of pnc on the state of the banking industry, the economy and much more. And the chairman and ceo of caterpillar. Beating the street by a long shot. Raising guidance for the first year. Well be back with more in just a minute. Did you get my email . [ man ] i did. So, whatd you think of the house . Did you see the School Rating . Oh, youre right. Hey, babe, i got to go. Bye, daddy. Have a good day at school, okay . [ man ] but what about when my parents visit . Okay. Just love this one. Its next to a park. [ man ] i love it. I love it, too. Heres your new house. Daddy [ male announcer ] youre not just looking for a house. Youre looking for a place for your life to happen. Zillow. [ 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. 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. Pnc Financial Services holding its annual Shareholders Meeting earlier this week. Lets try to get a better read. The president and ceo and newly a painted chairman of pnc. You taking the roll of chairman. What happened at the annual meeting. Not a lot. That is good. We had a good First Quarter. Were making progress in all the objectives set out for the company. That showed up in the annual meeting in the sense that it was boring, and well take that. Stocks up 27 as you came in as ceo. Thats nothing to sneeze at. Youre a power play. Youre pretty big. People dont know what to do with those banks. The middle child, somebody called us. Fair enough. Were 300 billion in assets, which is a big bank by historical standards. Were the first of the size of the next one up kind of thing. People struggle with that. Are you hit by the new banking regulations . Are you able to perform better . What do these things mean for you . At the margin, its more cost on compliance, risk management. Not all of which is bad. We are caught at times in where do we fit . Are we a reg bank or more of a Community Bank. We call ourselves a main street bank. We take deposits, make loans, move money around the Payment System for our clients, help them manage their wealth. Were a generic Community Bank type of activity, not a big wall street player. How long have you been there . Been there 11 years now. Did you learn the fruit of the mast senator. From rohr . Yeah. I did. Carte blanche he was one of the best bankers ever. He is a great man. He said to say hello, by the way. He picked you . The board picked me. I guess he picked me. I dont need to know anything else. Bill, what can you tell us . Theres a lot of discussion that after the financial crisis, lending to business, Small Business lending, a, the channel has dried up. Banks dont do this anymore. Right. Is there any truth to that . Or banks getting back into this business of lending to main street u. S. . We have always been in the business of lending to main street. We did well through the down turn. I think what you hear, and its true, certain of the regulations have impacted the ability for Small Business to get credit. For example, part of the some Small Businesses, the owner would borrow against their home to invest in their business. If youre selfemployed, its hard tore get a loan because of qualified mortgage rules. Businesses that rely on Owner Occupied the they occupy their own store to the support their business, tougher to get a loan because of some of the requirements. We work as best we can to get around that and the economy. Were doing pretty well. Are things improving, steady, strong . Its good. Its strong. We will wait to see how it was affected by weather. We just got our Small Business survey. Talking about sphaupl business. Its been done twice a year for 12 years now. Across every metric on that survey, this is the best reading we have gotten. Small expectations on hiring, sales improvement, capital investment. Across every line item other than money. Its great. You said youre doing okay so far. Keep it up. And the two days as chairman. Sit up straight. This is only did jim sit up straight . No, he didnt. And neither the do i. Commercial loans, are those ever going up . On a scale of 1 to 10, where are you on that . Were a 4. Where are these people . A 4 on commercial loans. Is it demand . Its demand. Let me say this. Over the last couple of months, and you have probably seen it in the fed data, you have seen increases in cni at paces we havent seen it before. It is showing up in utilization. I lend you a line of credit. You finance to support your business. Business activity picks up. So you will draw more on the line. That is increased for us and around the industry, just over the last couple of months by a percentage. Why do you think it is . Activity is picking up. Its one of the things we look at. Thats the single thing i watch. Is that the reason you think the end of the year will be strong . You watch ceo confidence surveys, which tick up in their correlations of Capital Expenditures. It has got to come back. And you think about that and the impact when that flows to the general economy. You get pretty bullish about it. The First Quarter was the largest. And now the volume. I dont know. Hes theres a lot to derail but a lot to look forward to. You know why i smile . Because no matter what you throw at this u. S. Economy and the u. S. People, were going to get around it. It will come back. Youre talking financial crisis. Im talking the current administration. Youre agreeing with me somehow. You see things go down and wiggle. It seems ultimately people want to believe. Lets get back and lets start putting the engine back. Im hoping as we get in the low sixes and below six, it doesnt trickle down. I hope it happens. I hope were not talking income and equality. Its got otherwise, this is all were going to be talking about. Youre the new guy. You came on squawk, right . Theres no other outlet youll need. People told me never to promise anything. You have been friendly so far. You dont have to sign in blood. Thank you for being here. My bank for 20 years. Big outlet in cincinnati too. Up next, first on cnbc with the cfo of General Motors. Caterpillar ceo Doug Oberhelman will talk about the global economy. And take your kids to work on cnbc. These little squawkers got up early to spend the day with us. Squawk box will be right back. Why relocating manufacturingpany to upstate new york . I tell people its for the climate. The conditions in new york state are great for business. New york is ranked 2 in the nation for new private sector job creation. And now its even better because theyve introduced startup new york dozens of taxfree zones where businesses pay no taxes for ten years. Youll get a warm welcome in the new new york. See if your business qualifies at startupny. Com [ dog barks ] [ male announcer ] imagine the cars we drive. Being able to see so clearly. To respond so intelligently and so quickly, they can help protect us from a world of unseen danger. Its the stuff of science fiction. Minus the fiction. And it is mercedesbenz. Today. See your authorized dealer for exceptional offers through mercedesbenz Financial Services. U. P. S. Earning 98 cents a share, 10 cents below what the street was expecting. The company says it sees fouryear earnings at the lower end of guidance range. U. P. S. Says usually harsh weather trimmed 2 billion. It is down two percentage points. 97 last trade. G. M. Reported a short while ago. Phil lebeau has a special guest. Were getting mail, phil. Let them go back to marketing. Maybe in this case we would have either. Were glad to have this guy. The open invitation to mary barra is out there. Lets bring in Chuck Stevens from g. M. Headquarters, cfo of General Motors joiningquarters. Two cents better than expecting. Revenue a little lighter. Specific to First Quarter, what was the difference, if anything, in terms of what you saw once the recall scandal exploded midfebruary versus the first month of the quarter. What impact was on the bottom line . Well, obviously in q1, 1. 3 billion charge related to the recall campaigns overshadowing our results. We were quite pleased are results. Strong performance overall. North america, earnings were actually up 500 million year over year. That would have been the Third Quarter in a row. Earnings up just under nine percent year over year. We were overall quite pleased with the results despite the impact. We saw it explode in the beginning of february. Was there any change either in terms of the revenue you were bringing in in the first six weeks versus the second half of the quarter, or did you see no change at all in revenue, pricing, showroom and the impact it might have had on sales. Its early. I would say we are cautiously optimistic about the cost on sales. In march, retail sales were actually up. Retail share was up year over year. The first 20 days of april we have seen improved sales versus march. Thats testament to the strength of our new products. Early but cautiously optimistic that the new products and the launches will continue to help from a revenue perspective. Actually, revenue north america was up year over year quite significantly. Marchen sent ifs was down versus february. Were still going to maintain discipline. We have not had to do anything to off set the recall. Because we havent seen it yet. The number one question i get sent to me either on twitter or email, is this the worst it gets in terms of an investor standpoint and the 1. 3 billion charge. In other words, do you see charges continuing in the second and Third Quarter relative to the recall, or do you look and say were pretty confident this is everything . Its too early to predict that, phil. What we are going to do is actively monitor the safety performance of our vehicles on the market. If an issue comes up, were going to aggressively address it. What we have done is redoubled our efforts and tried to put behind us those issues that had been in the pipeline for some period of time. But very difficult to predict what could happen going forward. Europe, a loss of 300 million. Are you changing your guidance in terms of when you expect to break even or keeping it mid decade . We havent changed our guidance mid decade. 300 million lost. 200 million of restructuring costs associated with the plan end of production. Chuck stevens, cfo is joining us from g. M. Headquarters in detroit where the company beat the street. When we come back, we are digging into caterpillar. Ceo and chairman will join us after the break. Cars are driven by people. Theyre why we innovate. Theyre who we protect. Theyre why we make life less complicated. Its about people. We are volvo of sweden. Digging into caterpillars quarterly results. Getting a piece of apple pie. Apple giving more cash to shareholders and it prepares to split its stock. Earnings from social network giant facebook. A roundtable is ahead. What will wall street look like what i work there . A cnbc special report is there. Squawk box begins right now. Everything was going along so well. Im ready to not do this again. They have to play this . Its a small world after all, its a small, small world ill have this stuck in my head a month. At the oscars there was a woman who designed the costumes for the original its a small world ride in disneyland. Where were you . I was at the oscars. I saw how you did that. What in gods name were it was the economics. It was very important. Its a social study. Caterpillar reported 30 minutes ago. Joining us with more on the quarter is chairman and ceo of caterpillar doug, we are on an emotional roller coaster. Mining has been down. High data in terms of results, no . I sure like the First Quarter operationally. Year aefr overour pull through was great. We made 1. 61 compared to 1. 31 . It is really starting to show through as well. Im happy with that. Lots of risk for the future. Did mining get better or china or what happened . Well, its a mixed bag across the board. We talked about all of that in our statement. Really what we saw in the First Quarter was continuation in the drop in mining sales. We lower our mining outlook to take it down 20 . We raised our Construction Equipment to about 10 . It is really mixed all over the place. Even with all the risk we see and the possibilities of other risks in china, our business is building in china. All our products and services are doing well over there. Dealers are investing. Thats coming along pretty well. In fact, in china, our sales fitter quarter this year were up 30 . If you start looking at construction, is that china narcotics the u. S. . That 10 increase, the brightest spot is the United States. We had our big mining show in las vegas a month ago. Just about everybody had positive stories. All our customers, dealers. Its a brighter picture in the United States. Its not great. Were stillwell below 2006 peak. At this point in 2014 the equipment business looks pretty good. Why is that . Is that housing or big commercial construction . Can you break that down a little bit . I think it is across the board. We have seen some areas depressed, arizona, florida. Some of that is coming back. It is still relatively low compared to what the people of six or seven or eight years ago. Its Building Back slowly. Were calling for a u. S. Gdp of approaching 3 . We have growth to come to make that happen. Overall, were pretty happen. I do point out go ahead. What is your view of emerging markets outside of china . Nice to see you. Its a mixed bag as well. Were seeing middle east extremely hot. Oil prices where they are, that continues to go along. Brazil has slowed. A lot of special approximate problems for all the games they have. Southeast asia is a real mixed bag. Some signs of growth. About twice what the developed countries are. Its really a mixed bag and fraught with a lot of geopolitical risk right now, as you well know. I think about when we always talk, we have a lot of similar thoughts about private sector. I had six flat tires the last three months. We cant wait forever, can we, on bridges, on with goolsbee here, we can figure out a private sector, government sector i like the way youre coming around. How do we get on the same page . What about bringing back some of the repatriated stuff. We have a lot to do. How should we do it . The need for infrastructure is great. We all see it. Our airports are antique ated. All of our contractors and our Customer Base are worried about that. Some are running out of money this summer. We have to find a way to get it done. We have been vocal with various coalitions. We started a new coalition to get support on this one. All of that has to be worked out. There doesnt seem to be a lot of progress right now. I cant guarantee they still take his calls at the white house. But he might be able the Larry Summers plan, Interest Rates are still low. I agree with that. You cant look at the infrastructure of the company. Heres the thing. With the over seas profits, they agree with you. Because you have 2 trillion about sitting on the Balance Sheet being unused. Right. Half of that is outside the u. S. Half is here. Then the question is why is 2 trillion sitting on the Balance Sheet being unused. We have to think of a Public Private way thats a really good idea. It got pulled into the same vortex that Everything Else has. Seems like a nobrainer. We dont want to be a third world country. Correct me if im wrong, wouldnt it take a lot of people working with your equipment to do this . It sure would. Food stamps, disability or whatever else theyre doing right now. Well, theres no doubt that it has been great for rebuilding jobs. We have prioritized in a way. We have got to find a way through that. Austin, you are pushing on one subject that we are focal on. Thats tax reform. It would simplify for a lot of us. We have been vocal about that. Caterpillar has been vocal on that. We were talking earlier, we are now in a situation wherewith the weird system we have of narrow base, high rate at the corporate level is generating a bunch of mma activity. Just for the reason that people are trying to Pay Attention to the tax difference. It creates friction. That Pharma Industry is probably like that now. We are obsessing on minimum wage. Lets just raise it. God. And global warming. Cant we just do this. Lets pick the five things we can actually do together. Yell at each otherment im not blaming you. You yell all the time. You just have a loud voice thats not even yelling. Sorry, doug. This is a little spat were having here. Im enjoying the show, actually. A plan for Corporate Tax reform. It was one that a lot of people in the business sector said, hey, this is a decent starting point. Didnt get in. But theres this black hole. Washington has no appetite for that. Were focusing on small things that dont structurally help the overall picture of things. Doug, keep talking. Thanks for come canning on. Great quarter. We have a lot of answers here. Is she an ally . Yeah. Spec put it on dvr. Im sure she watches squawk box every morning. She doesnt need a tape. When we come back, lots of headlines for facebook and apple. Later, what will wall street look like in 25 years . A special report. The future of finances just ahead. announcer scottrade knows our clients trade and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Voted best Investment Services company. 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. [ 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. Welcome back, everybody. Facebook and apple posting Quarterly Reports after the bell. The social networking giant posting a strong earnings beat but announcing cfo would be stepping down in june. That stock up 5. 5 . Apple beat the street and announced a 71 stock split before spiking on that news. Theyre up 8. 5 . A gain of 44. 5. Could apple be right for the dow . Joining us is daniel earnst. Thanks for coming in today. Thanks for having me. Some pretty exciting news on both these stocks. Yea. A lot of noise. A lot of signal. Lets talk apple first. In 2012, they grew earnings 60 year over year. Last year earnings fell 7 . Quarterly reports up 15 . So whats the real a year ago it was down 18 . If you look why it went from 700 to 400, it was the earnings growth. It didnt desell accelerate. It declined. Its the earnings to growth. 15 is meaningful. Of course it was assisted by the buybacks. Actual net earnings are up. It was assisted by lousing comps. Whats it look like the rest of the year . Comps always move around with apple. The reality is the number one thing that matters to apple investors is what is that category . Its going to be stabl. Theyre never going to grow 60 a year on the current portfolio. Google is good at it. Facebook is good at it. None of it have segments they have to report out because they built them. Everything else you search. Now we are doing it inside mobile. Facebook is just advertising in its place. Mobile now is advertising in the news feed. Apple is really innovating. They havent done it in, oh, three years. It sounds like you are a believer. I am. 11 times earnings they returned 21 billion in cash to shareholders this quarter. Thats more revenue than facebook will generate in two years. A 30year track record in innovation. 2. 5 dividend kwraoel. Youre not paying a lot for the prospects. Maybe they do surprise you. A lot on say it will be a wash. You are paying a lot for that opportunity. Do you think apples move is idiosyncratic or a lot of money is sitting there getting paid out for the shareholders. They buy back more stock in dollar terms than any other company. So i think they are doing the right things. Buying back stock. Thats all good stuff. Its not going to move the stock 50 , 100 . It is going to do real innovation. Its a tech stock. Lets talk quickly about facebook too. Should we be concerned about the cfo stepping down . Im a big believer in if its not broken dont fix it. Its hard to understand the numbers. Facebook is very apparent. I dont understand that. Hey, he doesnt understand 2 billion. Maybe he is too much of a number cruncher purchase we have Warren Buffett on the tech bubble. Theres warren. I dont know how someone gets invited to the oscars. I dont know who you need to know or what parties you go to. Where is the picture . [ male announcer ] help brazil reduce its overall reliance on foreign imports with the launch of the countrys 6r 34 6r 34 fp, 789 ltd pblgt. Blgs accountsedd saysings accounts 6r 34r mr. Good 12k radio i frb r ever i ever. If you wear a denture, take this simple test. Press your tongue against it, like this. It moves do you feel it . It can happen with every denture. These movements may irritate your gums. But you dont have to bear with it. You can try fixodent plus gum care. Thanks to its formula, your gums become one with your denture. This helps stop movement and helps prevent gum irritation so you can keep enjoying life. [ apple crunches ] fixodent. And forget it. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Welcome back, everybody. We have been trying to figure out whats been happening with the stock market. We have seen some volatility that pushed things up and down, and all over the place. Those sitting within striking distance of new highs. Warren buffett told us that he rejects the notion that the stock market is too frothy. I asked about david eihorns warning about a new tech bubble. I dont think its like the period prior to 2001. I dont. A lot of companys valuations i dont understand. But thats always been true. I dont think it has reached that point. Certainly i dont think the general market level has got a bubble up. His point is that Company Profits continue to grow. As it happens, he said you should see stock prices that are higher. We have come a long way. Thats been his longtime point. Hes been right. Over time thats where you want to be. He said this isnt one of the times. Theres two ways to think about it. We have these multiples because there was something not quite right in the air. Whether it was the economy or whatever. It seems to have a little more wind at his back. The other commentary was the fed hit the market up to where it was. If he was really juicing the market, couldnt they get it past 15 or 18 times earnings . The thing is, the earnings coming in today, this is what will determine in the short run whether the market is worth its value or not. You just add up all the future profits of the companies. That is what they should be worth. The point is the whole world was growing slowly so it wasnt self inflicted in the United States. It wasnt due to policy. All right. We have much more coming up right now. Over to joes daughter blake. Blake, you have some special friends with you. Thats your cue. Coming up, jobless claims and durable goods numbers. Squawk box, the number one business show in the world, will be right back. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires 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. Carstheyre why we innovate. Theyre who we protect. Theyre why we make life less complicated. Its about people. We are volvo of sweden. Welcome back to squawk box, everybody. We are just a few seconds away from jobless claims and durable goods numbers. Rick santelli is standing by. Is Steve Liesman is in studio. Our guest host Austan Goolsbee is here. It has been an important data point. Right now lets send it over to rick. March durable goods up 2. 6 . Last month it was revised a bit higher for 2. 1. Lets look at all the important internals. Transportation, youre up 2 . Much better than our last look which is standing at. 1. Nondefense, business spending, some capital investment, that is up 2. 2 . A stark reversal to last months minus 1. 3 that was actually upgraded to minus 1. 1. That was orders. If we look at shipments, shipments up 1 . At least based on the spwerpbls, march durable goods were decent. Im sure the weather boys will be up and say that was part of it. They call it spring for a reason. Reborn. Reconsuming again in the economy. Jobless claims, 329,000. Thats a jump from giving 305,000. Were looking at 24,000 jump on initial jobless claims, continuing claims covering 2. 68 million. Markets didnt do much. Real quickly, Interest Rates moving up a bit. Were at 3. 5 in a 30year. Several basis points below it. Stay right here. First, lets get Steve Liesmans reactions. Im not surprised to see markets not moving even though it is better than expected. When we dont see strength from weakness, thats when you get a selloff. Minus 1. 1 in february. 2. 2 in march. And i can tell you over at the fed the question is whats wrong with cap bats and how can it be fixed. Right. We were just talking about as the earnings came out for caterpillar, this is the big story of 2014. Does cap ex come back to what would be appropriate for how fast were growing. Where is it . Some would argue there are structural impediments created by this administration keeping it from being what it could be, the great numbers it could be in this economy. You may say that. Austan is finger pointed. Somebody at this table just admitted that the previous what i have been saying all along, if it were policy, why do you see the same thing happening in all the other advanced countries of the world. Because they copied your policies. Joe is trying to back up from his previous statements. Earlier i said isnt it great to live in a country where a bunch of impediments and head winds, in spite of a lot of things you will stable be able to do well. Theres depreciation. It is still there. They the use the money and pay it back to shareholders. Which way that goes is going to matter. Remember the 800 billion dont forget the friends at the irs. It would have been much worse if we didnt do it. Thank god for low Interest Rates, austan. Worked great. Worked out wonderful. How do you know what it is right now . Heres the way that i would judge it. I would say, okay, if you think its about regulation, about health care, about something, lets go look at industries that are the most hit by these regulations and the least hit. Do we see a difference there . On hiring and on cap ex you dont. Some already cover all on their employees. It has very little effect on them. Thats not over yet. Okay. Theres no how many of them are delayed . Theres an election coming up. Another issue which is worth bringing up, in the world where theres excess capacity, uncertainty about the willingness of consumers to borrow to spend. Correct. And not knowing what the right level of savings is in this most crisis world. Why build new plant and new capacity i think steve is exactly right. Kwroepg its the only reason. Its annan environment with lack of demand and not a lot of reason. People were burned and very frightened. Thats fair too. I want to point out that the 3 scenario from the Second Quarter and beyond requires cap ex. I would not see it as the turn around. Its been weak. You need a couple together. To be sustainable, i agree with that. But there is a stepb areaeo to get 3 if residential construction. It seals like the ceos sound much more optimistic about this and sound much more willing to put their money where their mouth is. Dow will be spending a lot more. This is the year. We heard it today. Do you guys worry when you see apple. When you sigh icahn winning. Thats the way i like at this. The activists won. Does that mean less r d and less cap ex . I think apple is a unique situation. They can do it all. If its increasing dividends, does s that less cap ex and less r d . Ill tell you what, i looked at the apple news and watched the way the stock traded. I thought when it comes to technology its a bit disappointing to see that mr. Cook can, unlike his predecessor gets created with the Balance Sheet as opposed to with the gadgets. No surprise within 10 months of mr. Jobs death traded the all time high of apple. It is so rarely talked about. With regard to the economy, Austan Goolsbee, the programs designed Interest Rates are low. Thats a wonderful thing. One of the most sensitive is housing. Here we are how many years after the crisis . We had how many new home sales . 384,000 . In 2005 we had 1. 4 million. I rest my case. It was a bubble. Whatever. Its a bubble that everyone was aware of. We didnt do anything before the crisis and after the crisis. Its a deficiency of anything good happening. Its an overabundance of too much government. And we see that as well and were not doing anything about it. Were guilty before and after the crisis. A lot of smart economists like you wonderful at teaching students really dont do very well when it comes to aggregating all the rules of a big economy. Okay. Do you think well get a rebound of cap ex or do you think they will pay out the money of dividends and buyouts . Payouts. The money will to go back to the shareholder. Icahn, you won. Everyone else lost. Thanks, rick. Austan has bigger fish to fry. Who did you meet at the oscars . Oh, my god. Oh, my god. Youre standing next to oscar. No. Im standing next to the most beautiful woman in the world. Yes, you are. Is she married to you . She married me. Can you imagine . I did pretty well for myself. That was a big deal. I was going to the mens room. I kind of got shoved out of the way a little by brad pitt. He kind of moved me. Wow. Im just looking daily is joining a hedge fund. Thats good news. Theres a guy that talked about being a fish out of water. Being in a place not comfortable for him. Chief of staff . He was chief of staff. He was an old friend from chicago. Wrong guy for this job. What wall street will look like in 25 years. A special report from kayla tausche. Time for a report on the future of wall street. Who knows . Might not even be there in 25 years. Its there now, kayla and a great back drop. Some suggested it will be only a relic in 25 years. All trading will be done by machines and commerce will follow growth. Since the late 18th century, wall street has been the worlds premier trading hub. By 2039 it will be more of an idea than a place. Banks will lean on their core businesses on liaison underwriting bonds and stocks and writing loans to consumers and businesses. Thats how it should be. I would like to see banks going back to being Community Banks, irrespective of where they are locating. Empowering the local economy through lending and through securing deposits. Theyre pulling more people into the formal economy instead of necessarily gambling on a collateralized debt obligation. Investor agree. Companies will seek independent advice on mergers. Head count will shrink dramatically, especially in the financial centers. Groundwork for a working population of 650,000 giving new york, london, and hong kong a run for their money. Competition will come from all over. International banks, big data, and appears in the shadows says hoffman from pwc. There will be a move of foot and other entities in the gamement the question is, who is going to really create the most frictionless Customer Experience . Who is going to have the trust on of the consumer, whether its a deposit or a loan account, and who are the regulators going to ultimately let in the business. We talked to consultants from pricewaterhousecoopers, oliver why man on where the future is going. Tech companies will take overpayments without these huge Compliance Costs could end up being your run of the mill consumer spender. A lot, joe, will change. Yes. I dont know. Because my kids decided they were e going to work on wall street. Now we have to get a new plan, kayla. Well see. Anyway, thank you. Well see you back here probably tomorrow. Coming up, jim cramer joins us to break down the news. To tell you what it needs for the trading day. Squawk box will be right back. Cnbc is joining force toss bring the future of finance to the Financial Capital of the world. Learn how artificial spwels and biomedicine will transform the entire investment equation. Emerging threats and opportunities going to affect banking, traders, Money Managers and investors. Register online now. [ 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. Futures indicated sharply higher. I saw when i was watching and the numbers came out, the futures looked like 32. Fair value down 28. 66 points. Jim cramer joins us now. In the past you have owned cat in charitable trust, havent you, jim . I have. Candidly, commentary on our network ahead of caterpillar ahead of the number and you could say it was mining and china related but this was all construction and energy row lated in the United States. That was the swing. I know you guys are talking about hiring. Fire 8,000 people, your raw costs go down, your construction spent in his country goes up and thats how you get this magnificent quarter. You know, we want to do i think one of these days, were going to do something here that actually maybe santelli started talking about a tea party and we know what happened from there. If we talk about stuff like this enough, do you think they ever get the message or its too poison . They dont. The government is trying to extricate itself from doing anything other than, i believe, subsidizing antifossil fuels. Thats i look at whatever the money is being spent by or what the president wants and it seems to be concentrated in that one area that is lets ween ourselves from fossil fuels, co2 and thats really it. Even defense spending down big, congress playing a role here too, Infrastructure Spending doing nothing. This is all private sector. So you do not have the government doing anything here to be able to create jobs. Anything positive. Hes not an ideallog either. That wasnt antiadministration. When you say antiideal log, describing the budget is shrinking. Try to be developing things that are 20 per when you have it 4 per natural sghoos nobody can do anything. The clean energy stuff is a tiny fraction of the budget and i think we ought to be trying a whole bunch of things to see if we can use use the bully pulpit. If you look at the ryan budget or what the republicans are putting out, i think what it shows you is that if you want to try to hold the line on spending in the way they describe, you have to basically abolish every form of discretionary spending, all the r and d, all the infrastructure, everything you need, in my world, to stay competitive, you cant aforts ao do that if youre not going to consider any revenues and cuts to other stuff. Dead right. All right. Dead right. Its congress and the president. Look, the logjam makes it so they take themselves out of the equation and because they take themselves out of the equation you dont see the kind of spend you discuss with doug. Its not going to be a factor. Neither side seems to be willing to agree to any Infrastructure Spending of any magnitude. Let alone tax reform. Thats an idea that some day maybe. Anyway, you may not have a place to go to work anymore according to kayla. Enjoy yourself around there at the actual physical new york stock exchange. Well see you at 9 00, jim. Thank you, guys. When we return, Austin Goolsbee will predict the Economic Future for our kids. Take your kids to work day and we will have a round table when we return. Today is thursday 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. Thats the power the power, thats the power of today. Cleveland clinic. Call today, for an appointment today. [ chainsaw buzzing ] humans. Sometimes, life trips us up. Sometimes, we trip ourselves up. And although the mistakes may seem to just keep coming at you, so do the solutions. Like multipolicy discounts from Liberty Mutual insurance. Save up to 10 just for combining your auto and home insurance. Call Liberty Mutual insurance at. To speak with an Insurance Expert and ask about all the personalized savings available for when you get married, move into a new house, or add a car to your policy. Personalized coverage and savings all the things humans need to make our world a little less imperfect. Call. And ask about all the ways you could save. Liberty Mutual Insurance responsibility. Whats your policy . [ dog barks ] [ male announcer ] imagine the cars we drive. Being able to see so clearly. To respond so intelligently and so quickly, they can help protect us from a world of unseen danger. Its the stuff of science fiction. Minus the fiction. And it is mercedesbenz. Today. See your authorized dealer for exceptional offers through mercedesbenz Financial Services. Lets get back to our guest host Austin Goolsbee former council of economic chairman Strategic Partner at 32 advisors and economics professor at the University School of wise busy. Go gives you a great background where we will be in ten years for college, college prices, we have the kids here, what the future is going to look like. First of all i want the future to include all four of you promising youre going to apply to the university of chicago. Thats good. Inyes. We love chicago. We saw the report on the future of wall street. If your kids want to work on wall street what thats telling you they can still work as living in your basement and now working from the basement. I think the that trend in the job market that were going to have more freelance lets call it, thats been a trend for a while and that seems like its just Getting Started and the overwhelming most important thing screaming out at the day to international, National City level individuals got to get more education, more skill. I dont know if a kid would grow up today in the current politically charred environment admitting to want to work on wall street. Its tough. That might be true. So good. Let them de sign something, build a website, do whatever, get some education because boy, its life has not been youre not talking necessarily liberal Arts Education either. A little more focused. I dont know. Math. Engineers are good. I think engineers have done very well but liberal arts graduates are not doing badly. You look at the Unemployment Rate of college graduates, its Something Like 3 . Go somewhere. Yeah. So i think its really important. College cost is going to still be with us. Its still going to be a huge is it going to continue to climb at a rate above i think it probably is. People are expensive and highskilled people are more expensive and the people at big Research Universities are, you know talking 60,000 a year right now. You could be talking 100,000 a year plus. You could be. We got to keep the focus on what where the costs are driving but also on financial aid. We cannot over emphasize on take your kids to work day, do what you love. We do what i know you do what you love, you get to go to the academy awards. I love standing up for whats right, for the american way. Youre right, i do love that. Were going to ask what everyone wants. Youre supposed to start. I dont know why. What do you want to be when you grow up . Thats the thing. I have a lot of i have a lot of interests. I like music, photography. I dont know how im going to choose. You dont have to choose yet. Those are great things. Take all of your interests and keep running. Right now im trying to get an a in math and go to a good college. Not easy. Something from your future . I dont know. I want to do a lot of stuff, but i guess an economist with thats new. Thats great. And or a smoke jumper. The smoke jumper we talked about yesterday. Austin, you influenced her. Kimmy . I dont really know because i like to do a lot of things. Um, but i was thinking about a teacher. Thats great. Austin does that too. And scotty, you are in going to world finals in odyssey of the mind. His team is is it six girls or five girls . Six girls. And him. Six girls and him. Youre used to waiting for the goir girls to finish. Definitely a director for a movie, an author for a book, or a producer for a video game and all that stuff. You know what, you can do all those too. You do the first you do the book, then you make a movie out of it and then you make a video game for the movie. Thats been done. That works. And then invite your dad to the oscars. Yeah. Because yeah. Who invited you . You going to come clean on that . Never tell. Thank you scott, blake, kimmy, natalie, thank you, and our fifth kid here austin. You still are young like a kid, energy of a kid. I appreciate it. Join us tomorrow. Squawk on the street is next. Good thursday morning. Welcome to squawk on the street. Im carl quintanilla, jim cramer, david faber at the stock exchange. Hope you are ready for a wild ride. Busiest day from caterpillar, gm, 3 m and verizon. Taking futures higher. Tenyear 2. 72p. Durable goods a beat, cap