Transcripts For CNBC Squawk On The Street 20120601

increase in jobs in a year. the average workweek also down while hourly earnings did manage to tick up slightly. >> and, of course, a backdrop to the jobs numbers worries about a global slow down. china and the euro zone coming up weak. the first time since october, it yields around the world hitting record lows. >> morgan stanley to facebook investors. you're naive if you were looking for a first big pop. and the prospect for a three-nudge downgrade. all of those highlights are straight ahead. first, of course, a big story. a disappointing may employment sending futures down sharply this morning. nonfarm payrolls grew by 69,000. private sector up by only 82,000. and the rate up a tick to 8.2%. workweek down, jim, there was practically nothing about this report that was positive. jim, was there a single good number for the stock market? not one. didn't see a single thing that made you want to like the stock market. >> yeah, governments. construction down 28,000. that's the fourth straight decline. the only kbans, though, the bright spot here, if we are going to see a bright spot, manufacturing up 12,000 jobs. >> manufacturing, the results came out yesterday, there's still continuing an oil spin. stunning construction numbers. stunning mass layoffs. i mean, look. you understand as bizarre as the ten-year trading is, i always try to remind people when you look at the bond market, it's much, much bigger than the stock market. the ten-year wasn't wrong. >> and it was stunning. i continue to be completely stunned by the movement of that ten-year to see if they're one, four, six. everybody said the price was going lower from there. of course, the yield is going higher. many people, in fact, shorting it at that point. but, you know, you walk in as an investor this morning, china is slowing, india is slowing. deposits flowing out of spain. and now here we are in the u.s. dealing with what is said to be a slow down. >> at the same time -- when i was being made up. i know it doesn't look like i need make up, but they put make-up on me. there is a sense that when the smoke clears, our country is stronger than others. this is what people are going to be talking about. >> no, they are. one man we know has got to be very happy. >> yeah. somebody said this morning, mitt romney's smile or grin is visible from space. i'm trying to envision what that pr briefing must look like right now? >> can they spin it in anyway? >> i mean, participation rate up a little bit? that's something, i guess. this is the number that they dread. you do the "today show" a lot. this is just -- wake up. we're in trouble. >> this is usa today, front page, tomorrow morning. >> i will tell you a couple things that crashed through which is mortgage rates being lower than they've ever been. and gasoline prices. oil is down 24% from its high. that has got to be a positive. so important, overall, to economic growth. you'd expect that that will be something that will filter through. >> the domestic retailers. very good. i happen to like the stock of mechan mcdonalds very much. unless you are totally insulated and doe mesic, you don't win from these lower commodity costs. there's some part of this operation that you're getting hurt. >> interesting piece in the journal this morning about ge and europe and how it really puts in perspective, david, all of those calls, all the conference calls from the past quarter that we've been listening to the ceo saying the u.s. looks okay, and it's all crystallizing into some big macro numbers. >> it is. and there's been caution on the part of corporate america for so long that we've been talking about since it started, in some ways. i think that has been a result of what's been done. and now there's the self fulfilling prophesy when you get a number like this. >> a lot of people are out there thinking, you know what, jim cramer is saying america looks stronger than the rest of the world, is now the time to look towards company that is have most of their exposure here in the united states? nobody is saying go out and buy today. >> i think if it's a combination of things that you need, you need to be able to have a yield alternative to treasuries. >> anybody who puts it above the ten-year, it has to be big. >> you're going to be paying the bank to have your money there. that's kind of what this amounts to after your fees. so let's use the verizon. could our texting slow? could our fios slow? where we saw in 2009, it didn't. it's got a great yield. it can go higher. they've already said that they can do that. >> well, on that point, some have argued that the most important number today is actually autosales. it's not a statistical crap shoot the way bls is. if they come in stronger, would they take some of the pain out of this? >> yes, but suddenly, people say jim likes ford. ford is latin america. ford is europe. gm, china. you interviewed a ceo. is this the needle and the provpr proverbial? i don't know. beneficiary of feed costs coming down. beneficiary that milk prices, the raw milk, comes down. people are buyers of milk whether they like to be or not. that works. a hundred percent domestic. now, here's the deal. >> is if market not stupid again about a lot of companies that have had torrid runs and are doing well? >> i checked in with whole foods last week. this is a tremendous trend. i mean, look. didn't the fda -- the department of brupture, look, we're going to be doing more. what's the product line? soy milk. why? because people don't trust the food chain. now, i don't want to get too yanular here. jim, the world is imploding. but melissa asks a great question. are there places to invest? i come back and say yes, there's probably 10-15% of the s&p 500 that is very good right now. >> is now the time to rethink your strategy of your investing on the etf that attracts a broader market. >> i always have trouble with that. you go to listen to jeremy siegel, i know he's done great historical work, he reminds you to go -- if you look at the stocks that have good dividendd, that are largely u.s. based, you come up as. but just like a deck of cards doesn't have all as, there's about as many as in there as there are in the s&p 500. >> copper has broken a three-year trend line. do you smell deflation? do you smell recession? >> not in our country, we do not see recession. >> that 1.46% yield does say something about deflation. >> our mortgage rates, is there really no coming in for mortgage money? mortgage money is priced off of treasuries. i think that anyone who doesn't refinance -- in other words, a woman was saying she's refinanced multiple times. i see what's going on. i am not oblivious. i'm saying be a little more granular than that. this is a good day for coned. people are going to sit very raldly. that's the big delta for them. delta is being the word that you want to throw around when you're smart. >> i managed the downside. i'm sorry. >> oh, man. you recommended airlines, didn't you. you told me it was time to buy zynga the other day. you say this week that you want to buy groupon. >> he was pounding the table yesterday while you were out. when that thing turned yesterday, my dad called and said listen, it's turning. it's turning. >> if we throw up the chart on facebook, it was a huge, huge turn. and it was tremendous price action. >> two hours before they close. a couple hours before james talked to maria. >> is this someone making a big bet? >> i don't know. i'm just reporting. and you can decide what happened to the price action. >> do you think it's -- are we doing a disservice if we even just talk about an individual stock? you know, we do the six in sixty. i'm always concerned that someone might say oh, the world is burning, madrid is burning and cramer likes verizon wireless. is that a mistake? >> it's in companies that -- you stop it. it's in companies that yield more than 3.5% whose earnings are not subject to dramatic revisions because of overseas businesses. you see that stock, thank you. >> and, on top of the yield, if you want to super charge the strategy, sell calls. it increases your yield. >> bring in more income. there are strategies to increased income. now, there's enough today for an enterprise product. these stocks have been horrendous. >> coming back to the big picture, if we can. and going back to europe which has been dominating trading for a few weeks. china, i don't think we talk about enough. things seem to be slowing there. carl mentioned copper. >> not to mention the people watch electricity consumption. that has been showing certainty of slow down there. and then india, we get the numbers. gdp there. you're down sharply. what's going to reverse this overall trend where we've got everyone slowing? >> the epi center is still europe. i think you can trace china's problems to europe. obviously, they're starting to speak in panic terms. i think it always comes back to europe. obviously, we need the eur fdi contraction guarantee your bank deposits. >> you need a constitutional convention in europe because they don't really have the authority to do the things they do. next week, there will be an emergency meeting because they don't want to keep supplying the power companies because they're all in arrears. so not to pour gasoline on the fire, but if you did have some sort of structural black out in greece, then you're talking about a new chapter. >> look. this is about -- when will they react to preserve the euro? it was meant to be a way to have peace among nations. if you have riots, they'll react. if the ten-year treasury goes over 7 -- they'll only react to the buyer. >> at the end of the day, it's still a sovereign si issue. they can't deal with the underlying problem. >> right. so you take it down and do an argentina. >> you get another six months, but maybe one day we'll deal with it. who knows, maybe spain will proceed them. >> at what point, jim, is germany not a safe haven? at what point are the liabilities so great that you can't even count on them to stay home? >> well, i think this is just one of the problems of asset allocation. people do not feel comfortable putting trillions in a mattress. i remember when jp -- basically, you were paying jp morgan to put your money in the crisis. >> germany has an 85% ratio in the sovereign debt to gdp ratio. they're the ones who leave. >> right. >> they're the ones who say you can smell you. >> forget about expensive. >> gosh, give me coned, give me duke. >> i certainly said duke. wait for duke. a little true grit, the first one. not bad. when we come back, the first reaction to the obama administration. we will talk live with labor secretary at 9:35 this morning. one more look at futures, a bumpy ride in store. less than half of what the estimate was. hey, did you ever finish last month's invoices? sadly, no. oh. but i did pick up your dry cleaning and had your shoes shined. well, i made you a reservation at the sushi place around the corner. well, in that case, i better get back to these invoices... which i'll do right after making your favorite pancakes. you know what? 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[ male announcer ] marriott hotels & resorts knows it's better for xerox to automate their global invoice process so they can focus on serving their customers. with xerox, you're ready for real business. what a way to start the month of january looking at a sharply lower open on this weaker-than-expected jobs numbers. down 176 is what we're looking at. the s&p down 23 at the open. and keep in mind, 10-year treasury yields have something else to watch below 1.5% this hour. >> we've not had a negative first day of the month, guys, since december. i saw that tweet and said boy, we don't want to get a good employment number. look, the sell and make thing, that has to be dealt with every single month. there's a terrific survey out today for bank of america about sentiment. it's the lowest sentiment ever. that used to work. remember we used to say negativity? that's off the charts just like it was in 2008. it's not saving anything. >> that's a good point. meantime, we asked you to tweet us your predictions for a chance to win. yes, golf balls signed by the squawk on the street gang. our staff is painstakingly going through your entries. we will announce the winner and there was a winner later on in the program. the golf balls do actually exist. up to 63% off. if i could get to staten island and say hello -- >> it would cost you that to get there. >> then it's too early to buy groupon. >> so you're saying the stock is sharply lowered. >> u.s. treasuries versus groupon in terms of safety. >> what do you think? let's ponder that as we head to break. let's take a look at futures. again, it could be a very big, rocky ride here on wall street as we are looking at a sharply lower open. more "squawk on the street" from the nyse is straight ahead. tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus - i can custom build my own screens tdd# 1-800-345-2550 or use predefined ones. tdd# 1-800-345-2550 and i can trade wherever i want, tdd# 1-800-345-2550 whenever i want. tdd# 1-800-345-2550 the kicker? tdd# 1-800-345-2550 i pay $8.95 a trade. tdd# 1-800-345-2550 that's a deal in any language. tdd# 1-800-345-2550 open an account tdd# 1-800-345-2550 and trade up to 6 months tdd# 1-800-345-2550 commission-free. tdd# 1-800-345-2550 call 1-800-790-7706. 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take the privileged investing tools of wall street and make them simple, intuitive, and available to all. distill all that data. make information instinctual, visual. introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. all right, it's going to be a dramatic open and likely a dramatic day with the jobs open disapointing so badly this morning. the opening bell about to happen. a few cheers. and here is the big board. there's some opt kl components celebrating its recent lifting. >> there's a good stock, okay. that's a doe mesic company. they only have one store, all of california. raw costs are coming down. people want a name. let dunken donuts come in a little. that's a good opportunity. watch 12/2/17. we were getting close to the double digit if not above it. >> and people are living through and saying, okay, look, i remember this. this was 2008 the oil stocks crashed. this is 2009 we're seeing the financial staff. this is 2011, we gave it all back. there isn't a scenario where people say, you know what, i've learned from history. it would be a mistake. i am telling people if you have big dividends, don't sell those stocks. the reason why i pointed it out is because of the 50-decorlation. someone is going to say a lot of people are short. there's a lot of people who have very little stock market exposure. they're looking at it's just what melissa mentioned. they're saying oh, my, there's going to be something that happens this weekend. those are the people that buy first. >> this is not a reason to dump your conagera. >> we're only a few weeks away from the meeting. we're talking about qe. you know, if that talk bubbles up, you could be looking at a very short, year-term rally. you could. and you would seem to gets a set prices up, potentially. that becomes more of a possib possibility. when you're looking at a 1.44% on the ten-year, you wonder what exactly can they do? why would they need to do anything to make borrowing any cheaper. when i look at the bond market overall and the 10-year at 1-4, you have to wonder about a few things. if you're on a fixed income, oh, boy, what are you doing? they have born the brunt in some ways. and then if you're out there and you still have a bogey of 7, 7.5%, how is that in anyway sustainable. why aren't people going out on the risk curve. and when will they give in that yield environment. >> they should be looking at these issues that i'm talking about. with just fixed income alternatives with no realty increase in earnings power. home depot versus mcdonalds. we talked about that. gasoline coming down. it makes it more attractive for you to go to home depot. mcdonalds, you tend to trade down if you're really hurting. but they have big international exposure. i don't want to sell mcdonds down here. you mentioned att. here it is. this is as big of a class as it is. >> walmart's 52-week high. jeez, you know, this is going to be someone who says that's my chance. >> a fresh all-time low here, $9.57. today is the day as the lock-up expiration occurs. and it effectively doubles the number of shares outstanding today. so just an up note, it is down by almost 90% at this hour. we see them. we do see oftentimes even reversals. but the initial move is not always 1, 2, draw conclusions from. >> ashds i'm just using this as a microm. you have some good news out there. you have a case to be made for apple. you also know that they just did this big iphone deal with a prepaid player. >> i say use that. >> let's check in with mary thompson. >> how are you doing, melissa? the dow has come upmost of the day. now down 143. traders' response to the jobs' number staggering in that it was so bad and disappointing.ting they say prior to this number, there was a thought here in the markets that the u.s. was holding up better than the rest of the economies in the world. if there is any positive in this report, it does start some chatter about qe3. it could put pressure on crude oil and gasoline which, in turn, could be positive for consumers. as i'm watching the headlines, you can see that crude picked up in large part about easily hitting the markets. again, as we checked the dow, it's up 150 points. that would raise all of this year's gains. another level that traders are watching are 12, 84 and the s&p 500. that could be a significant downside, i should say, to the s&p. a couple of stocks that we're watching today, groupon, i don't want to go on about this because you guys have been touching on it all day. half of it where it was at $20. bp was actually higher in the premarket on use. it's exploring the possible sale of its russian joint venture, something that could reap the company billions of dollars. the company also issuing a special dividend to shareholders once it completes its spin off. a quick check of the dough. down 170 points. two points above where it ended 2011 right now. now three-points above. carl, back to you. >> thank you so much, mary thompson. that jobs number coming in unexpected. i want to get the first reaction from the white hougs this morning. madame secretary, always good to have you. good morning. how does the white house see the number? >> well, you know, we're going into a month that obviously is somewhat similar to other may months where you do see a drop. this is something that we've seen in the past decade. but i will say that if we take a look in the last five months, on an average, we've seen about 170 thousand jobs added in those last five months. go back 26 months. and it's been about 150,000. and 4.2 million private sector jobs. if i'm looking at the long road and the road ahead. reegt now, i think the congress has to take some action. we need the cooperation. we need to be proactive. that's why the president is out there today going to talk about investments and job creation for veterans and tax credits for businesses. >> madame secretary, i've just got to ask you, in the papers today, the chinese, there they go. wanted to make it a little bit more competitive. what i regard as being unfair trading. hurts american workers. can't we substantiate up to the chinese right now? this is not the time for them to be doing this. well, you know, that isn't necessarily under my bailee whip. but wup of the things the president will tell you is that we need to have some closure in allowing for our major companies to, you know, to take our jobs offshore. and to bring those jobs back home and to really create and stimulate good manufacturing jobs here. and incentivizing businesses to do more here. >> madame secretary, by most accounts, this is a disappointing number today. it's not unlike one we've seen at the same time last year or even the year before when the first quarter of the year seems very strong and then we move along and hit some significant bumps. but what gives you the confidence that it's going to be any different where at the end of the day, job growth has not been enough for most americans. >> well, we know that we have to do more. so we have to be proactive. again, going back to making sure that the congress works with us on a lot of these issues. the american public doesn't want to see anymore infighting than any of us do. we need to have action to create jobs and construction, infrastructure development and putting people back to work in local and state government. you know, putting veterans in as firefighters and cops on the beat and emergency unit individuals. these are all things that we can do right away and we shouldn't allow for any other sidetracked discussions to overwhelm where we are. we still are in a place of recovery. and we are still in an area where we have to stabilize our growth. and we know that may, as you said, is one of those areas where we tend to see a trend where it does go down. but my feeling is we're going to see a continued stability and stabilization. right now, all i can say is again, when we started with the administration, we lost about 800,000 jobs on an average. now that's turned around. i want to see investments in people using their ui fund. get more training so that they come in and more people are actually participating in the job market. that's why the unemployment rate ticked up a bit. >> are you pointing the finger at congress? it sounds like you're saying congress has to do something to improve the picture. right now, millions of americans are sitting home and saying it is the president's job to do something. it is all of our responsibility. and there's no one that is saying that it isn't our responsibility, either. it's my responsibility, as well as the president's, but more importantly, the congress needs to take action so that we can help to incentivize. we know when we create jobs in insfra structure, we're going to put construction workers back to work. we know if we take returning veterans coming home, we made a commitment to help them. those are the questions that i would ask the public and the congress. and i think the public is on our side on these issues. >> well, i think the public, madame secretary, probably remembers that today's the anniversary of the gm bankruptcy. we've had multiple rounds of quantitative easing. we've had a very large stimulus package. here we are again asking congress to do something. they have done something, haven't they? >> they have, i think, participated in a very minimal way. we saw what happened when we did work together. when we did tax cuts and credits and rebates for people. so i know that there is a solution to these problems and challenges that we have. but we need cooperation from our friends on the other side of the aisle. >> madame secretary, we have a great opportunity in this country right now, a lot of oil and gas companies come off on "mad money" and come on this show and they say look, if we can only get the workers. we've got to get the workers where there are too many people looking for jobs. come even to ohio. but these are fossil fuel jobs. are you against them? no, we've tried to find the trained individuals in the area. we have a challenge because we have a shortage of the trained and skilled workers there. and the real challenge for us to is make sure that we can build upon that training. we need to get in there now. that's why we are making our investments. so, no, i am totally supportive of increasing employment. and these are good jobs. so i'm eternally supportive for seeing renewable energy and also the transition that has to take place. finally, when the data hit, groans across the u.s. floor. when you were first told the number, what did you say? >> silence. because i know that these things happen. we go through ups and downs. may tends to be that month where you do see a decline. but then, slowly, as we've seen in the last two years, we've been able to put back jobs. and that's really the bottom line here that we've not gone below that. we've actually been able to add jobs for the last 27 months. bb but we need to do better. there's absolutely no question about that. >> madame serk tear, thank you for your time. >> your sales figures for the month of may. >> let's start with ford. an increase of 12.6%. that's about 4% below what the street was expecting. keep in mind, two extra sales days in the month of may. as we get all of these numbers today, we're going to see some numbers that should be a substantial increase. we'll get the really big number later on this morning from toyota. they're comparing with a very weak may of last year. >> phil, you've been so right about all of this stuff. it's just a delight to get it right. let's check the bonds and the dollar. rick, take it over. >> well, you know, what could i possibly add to all of the insight from the labor secretary. if we look at yields, we've been down to around 144 in a ten-year. ten-year booms and we're around 144 and a ten-year guild. that's a u.k. ten-year. we're not only watching the euro. boy, you're talking about volatility, euro had a 120 handle and then it popped up to 124 handle. even though it's had a horrible six weeks, to think that the low move here, and e know it's above a couple of years, but still above 120. i think that's amazing. by the way, if you look at the entire run, the midpoint is right around 1.22. >> all right, rick, we do want to take a check on the markets. the drk ow is back 1.5%. right now, we are at 12.88. so four points above that. we're seeing tremendous weakness in the financials. >> as we head to break, take a look at some of the early movers here on wall street. all in one account. it's powerful, easy to use technology for trading stocks, options, and futures. optionsxpress, the broker smart traders deserve. open an account today at optionsxpress.com. would you mind if to be i go ahead of you?omer. instead we had someone go ahead of him and win fifty thousand dollars. congratulations you are our one millionth customer. people don't like to miss out on money that should have been theirs. that's why at ally we have the raise your rate 2-year cd. you can get a one-time rate increase if our two-year rate goes up. if your bank makes you miss out, you need an ally. ally bank. no nonsense. just people sense. well, it is official. the dow had wiped out its gains very briefly for the full year. just marginally. you can see all three components are in the red as we were down 161 with the back of the very negative jobs number. >> the move in copper is very interesting. this has been a slow fund higher. this is going to be one to watch. >> almost a 4% yield. people are afraid. this is a stock that people reach to to cover if they are short sellers and they feel that something good is going to happen over the weekend. may i remind people that this stock bottomed at 17. it was around the '08, 2009 period. china is 38% of the world's copper market. so, yes, it's a great point out because there are some people who are getting very nervous that something big has to happen. >> to expect some sort of stimulus package, about the half size, it would be about $314 billion. and that could be coming soon. we typically see something come out on weekend, over a weekend, on a sunday night. we all come in and china has cut the reserve ratio require or whatnot. >> a lot more "squawk" on the street still ahead. it's my dre. on a day to day basis, i am not using gas. my round trip is approximately 40 miles to work. head on home, stop at the grocery store, whatever else that i need to do -- still don't have to use gas. i'm never at the gas station unless i want some coffee. it's the best thing ever. as a matter of fact, i'm taking my savings so that i can go to hawaii. ♪ a living breathing intelligence bringing people together to bring new ideas to life. look. it's so simple. [ male announcer ] in here, the right minds from inside and outside the company come together to work on an idea. adding to it from the road, improving it in the cloud all in real time. good idea. ♪ it's the at&t network -- providing new ways to work together, so business works better. ♪ tdd# 1-800-345-2550 you and your money deserve. tdd# 1-800-345-2550 at charles schwab, that means taking a close look at you tdd# 1-800-345-2550 as well as your portfolio. tdd# 1-800-345-2550 we ask the right questions, tdd# 1-800-345-2550 then we actually listen to the answers tdd# 1-800-345-2550 before giving you practical ideas you can act on. tdd# 1-800-345-2550 so talk to chuck online, on the phone, tdd# 1-800-345-2550 or come in and pull up a chair. the dow down 174 on a disappointing jobs number. the first response will be by mitt romney. in the meantime, simon has a look at what's coming up at 10:00 a.m. >> you know, the last time we had biggs on the program, he said he wasn't worried about the quality of american growth. he's on the show again in five minutes. talk about groupon rngs we'll ask the central question. is all that we witnessed here today a direct consequence of the germans unwilling to take europe to the next level. that's in the next hour on squawk on the street. >> thank you very much, simon hobbs. finally gold is a safe haven. >> wouldn't gold have been a terrible performer? it was a currency. greg cannot wait to see him today. it's a stock that is most asked about in "mad money." romney, play him that sound bite. carl, when you ask madame secretary and she said silence, a lot of ways to interpret that. it could be stoicism. it could be wow, didn't they know? >> i'm going to show you what happened in 2008 if you don't get a change. >> all right, we'll see you tonight, jim. have a great weekend. "mad money" 6:00 and 11:00 eastern time. the isn number, construction spending coming out in just a couple minutes. plus, what's next to the markets now that the jobs number is out. keep it here. [ female announcer ] it's time for the annual shareholders meeting. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪ [ male announcer ] to hold a patent that has changed the modern world... would define you as an innovator. to hold more than one patent of this caliber... would define you as a true leader. ♪ to hold over 80,000... well that would make you... the creators of the 2012 mercedes-benz e-class... quite possibly the most advanced luxury sedan ever. starting at $50,490. c'mon dad! i'm here to unleash my inner cowboy. instead i got heartburn. [ horse neighs ] hold up partner. prilosec isn't for fast relief. try alka-seltzer. it kills heartburn fast. yeehaw! welcome back to "squawk on the street." it was three tenths close to expectations. ism, a may number. 53.5. that's light in terms of expectations. they're around 53.8 to 53.9. last month, at 54.8. so we are seeing the same type of dynamics, although i haven't looked at sub text with regard to yesterday's chicago. now, in march, we had 53.4. so this 53.5 doesn't pop us out of the range. it just shows us that the rate of change, like many numbers, is in the deterioration camp. we are still hovering above 150 in a 10-year note yield. boy, oh boy, with everything going on in europe, there's so many outrageous rumors going on. be prepared for those the entire session. >> they call them tape bombs for a reason. road map for the next hour, weak is the name of the game today. 69,000 far below expectations. what's to be made of the beyond dismal data? we'll talk to martin biggs. >> from crude to gold to copper. what's the trade out? we're talking all the moves in just a few. >> plus, groupon marks the em battled ipo's lock up exploration. will the editor running. >> and liberty media stepping up to kban control over sirius xm. an exclusive interview right here in just a matter of moments. >> all right, let's get back to that very poor jobs number. and here to help us sort it all out, who else other than steve leisman. >> the construction-spending data for april interesting in that private spending up a regionally strong 1.2% with residential up 2.8. that's interesting because we'll be talking about jobs in just a second. office spending is up, commercial up, transportation up. on the ism, a very mixed report. new orders were up pretty strongly. employment down a bit, but still a strong level. we always look at the level in the isms. unemployment up. we're pointing badly towards the future. there's that 28,000 decline. manufacturing was up. retail was up just a touch. government resuming its compliants. there could be some weather pay back still in this number, but that doesn't explain the weakness elsewhere. here's the real unemployment rate ticking up 15.8. and that's all discouraged workers. here's some of the economists saying basically, all of the commentary he's saying is bad, awful and terrible. and groult may be no better than the 19 we have in this quarter. combined with the fact that inflation is below target, the june 19th, 20th meeting has increased. they call this number being around a hundred thousand or less. they're now saying we expect to see through it. perhaps look passed. we may record april personal spending. >> sorry, that's a mistake down at the bottom. melissa, bernanke kpmted a pullback from the stronger growth this month. i wonder if he's still seeing that saying you know what, we have a worrisome downward shift here. >> and, steve, we were having a conversation earlier about this number and the possibility of qe3 and the increased talk because of these numbers. what would a qe3 look like given where rates are right now. >> i think there's a lot in that question you just asked me. the question would be does it need to do any better here? i think it would look at what the market is doing. and it would say the market is doing a lot of our job here to the extent that qe3 would spark more inflation and could cause rates to go the other way. i think any qe here from the fed would have to be sizable. and my take right now is that they do not have the stomach for a very sizable intervention given what the numbers are. if things continue to deteriorate, you get a meaningful move. if jobs go negative, we're looking at a recession here. that changes the picture. i just don't think the fed can make that conclusion. you know better than i, steve, the negative interest rates, potentially in the future, that people actually have to pay to deposit money with the central bank. that's what they discuss with switserland. does that have any track here in the united states? >> i have publicly and privately asked the fed about it several times. they do not like the concept. they hate the distortions that are created by it. so that's a problem for the federal reserve on several counts i had just not heard any stomach for that concept of negative industry, other than philosophical discussion, simon. >> all right, steve, thanks so much for your analysis. steve leisman headquarters. let's get the political impact on the jobs. john, carl is going to be speaking to mitt romney in about an hour's time or so. well, look. there's no sugar coating this. this is a very bad number for the obama white house. i was talking to a democratic political strategy not affiliated with president obama the other day. he said how do you size up this obama romney match up. he said it's going to be close. but if we get back to that path of 170,000 jobs a month, the president is going to eke it out. that's why the white house started out saying it will be long in the making. this is grim news for them and the idea that right at the summertime point, the idea that we would be fully into that spring slow down that we've experienced in 2010 and 2011. it's very worrisoisome from a we house point of view. >> one which is construction, which, basically, is down again this month and hasn't moved over the last 18 months. the other area, as we know, is african americans and hispanics. is there any mileage from mitt romney beginning to talk about stimulus in infrastructure? in essence, what we theed to do is pay people to dig holes and somebody else to come in after them and fill them up again in order to get those key areas of the economy moving. >> much more likely that you would hear that kind of talk from president obama. he's going to argue that stimulus didn't work or won't work. that's the argument that he's been making throughout the primary season. i think he's going to stick with that argument. in fact, we've heard republican leaders on the hill saying exactly that just a few moments ago when they were asked does this tell you that we need some more stimulus. . and their answer is no, it doesn't. and by the way, the grim numbers among african americans and hispanics are also difficult for the president because he is so reliant on minority voters as part of the coalition that he hopes to carry them to victory this year. if he's going to sustain enthusiasm, especially among hispanics, african americans are likely to vote for him regardless of overwhelming numbers. but when you're talking about turn out and enthusiasm, it's problematic the worse the economy is. >> all right, john, thanks so much. >> today, joining us today is barton biggs. >> good morning. >> you eve been making some rather bearish comments about the markets overall. but just some thoughts on the data itsz today. it sounds like you think that this shows that the soft patch is a little softer than we thought? >> yes, that's right. we were looking for a soft patch from maybe trout the summer. but certainly the risks have now increased that if not just the soft patch, that we may actually roll over into a mild, double-dipped recession. but it's a very volatile situation. with the price of oil declining the way it is, that's very positive for the economy and for growth. >> do you want to put that on a perspective of likelihood? skbl i would have said that's a 20% possibility two months ago. >> you've made some bearish bets in europe, german and french benchmark equities. are you holding pat or doubling down? >> no, e'm not doubling down, but i'm not covering them, either. i don't really see, yet, how europe is going to get out of this mess. and so i think it makes sense to be short with some of the europeans. the last time we had you on, my sense was you were pretty bullish and we spoke about technology at the time. what has changed for you? what has taken you by surprise? >> it's the numbers that came out today. and certainly we're surprised by them. >> but hasn't the market moved in anticipation of this? isn't this for something that people that have been positioning for certainly through the last month? >> yes, i think that's right. that's certainly the market that can discount to get them the mildly disappointing numbers. >> i'm curious what your opinion is on what had been perceived as a bernanke hood. at this point, with an e nor mougs sort of stimulus, do you think that that is completely off the table? that the economy is where it is and we're on our own? i think the fed could step in again. they're also very wary that they don't want to get the market hooked. >> i think they're going to wait and see. >> can you call a bottom on the ten-year yield right now? >> no, i can't call a bottom on the ten-year yield. and if this keeps up, we can go the way of japan or germany. and the bond yields or whatever it is, 2%. i think underneath the statistics, there are some positive numbers. and the decline in the price of oil is very important. and so -- i'm not that -- i'm not that bearish about the economy or about the market. but am i ready to just step in in a big way? no. >> always good to talk to you. thanks for your insight. we'll see you next time. a reminder to stay tuned with mitt romney. 11:00 a.m. eastern time. that's about 45 minutes from now. >> that could be the interview of the day. fascinating to see what he says now. >> we also have toyota's numbers. we'll touch on those in just a little bit. general motors with an increase of 10.9%. as you take a look at shares of general motors, that is roughly in line with estimates. the estimate was 11.4% increase. by the way, strongest sales since august of '09. we talked with gm sales about whether or not the jobs report and what we're seeing with the e economy concerns them and here's what he had to say. >> i'm concerned by the inconsistency we see in the jobs numbers. i never like to see a low number like that. but we do believe there's that underlying strength that we are going to continue to create jobs and it's going to turn around. the real concern is when you look at the chevy brand. their focus, increasing on the full sized and the mid sized level. remember, those are the trucks that they sell to small contractors, small business owners. don johnson says those sales still remain relatively strong. we want to talk about sales coming out from toyota. that's roughly in line with expectations. people are going to look at this number and say wow, what a huge increase. >> guys, back to you. >> coming up, mitt romney speaks out on the kpchted jobs report. we'll be talking life to the republican presidential candidate in less than an hour from now. >> but, first, it's judgment day for groupon. the stock officially ending its ipo lock-up expiration today. the shares, as you see, taking down 9%. we're talking groupon, that's next. so much is down across the board today. it's fascinating to see that gold is making gains. gold is rising. >> meantime, watching shares of group on taking a hit today. it marks the end of the lock-up period. ken senna is the analyst who recently upgraded the stock back in april. ken, great to have you with us. the number essentially doubles with the lock of expiration. are all the head winds over? >> yeah, we feel a lot better about the last quarter in terms of the lock-ups, we were concerned about that in upgrading the stock. but i think if you look at valuation right now, it's roughly less than half of where most of those insiders actually redeemed. >> in terms of how the mechanics of the exploration can, at what point do we stop seeing the impact of that doubling of the shares out standing. is it immediate? or does it take weeks? i think for the most part, sellers can now, you know, insiders as well as mid level employees both sell. i think from a sell standpoint, i think most employees will be more willing to part with their shares. i think insiders as well as a lot of the owners have already said that they would not be redeeming on this pass. i think they'll probably wait for a better exit point. >> it's how you an looiss have been in a month and in an hour's trade, we've lost 8% of the s&p. how does that change the way in which you call stocks? are we rerating here? do you take your price targets down? what do you do? >> from a fundamentals perspective, it's hard to take in your target price. i think for groupon, we have to look at what scale advantage do we think they have. how they can drive revenues and market expansion. i think for us, a lot of that is tied to overall market conditions. it's tied to what's going on in europe. i think at least in a short few-week period of time, it's relatively for the markets to do it. >> and last question here, just switching gears a bit to facebook. are you surprised at this point? now that it's a two-week anniversary of the debut and facebook shares are down today 5% erasing yesterday's good day, which is one of the only good days that facebook has had. are you surprised? >> it's starting to think about what fundamental opportunity that the stock has. when you look at linked in, a lot of it is structural and an advantage that a linked in has. facebook has, as well. and the opportunity to kind of reform many industries. right now, people are on the model. but i think people have to really step back and look at the overall opportunity that facebook presents. so, yeah, i think it's nice to see that people are revisiting it. >> all right. great to speak with you. >> we're talking if moves on today's very disappointing job report next. and add the top of the hour, a live interview with mitt romney. he'll be talking about today's much-weaker than anticipated may unemployment report. ♪ [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the 2012 c-class with over 2,000 refinements. it's amazing...inside and out. ♪ the c-class starts at just $34,800. in your fight against bugs. ortho home defense max. with a new continuous spray wand. and a fast acting formula. so you can kill bugs inside, and keep bugs out. guaranteed. ortho home defense max. at u.s. trust, our expertise extends well beyond investment advice and research analysis. it includes proprietary offerings like our eldercare program, which helps provide for those who came before you. and our financial empowerment program, which helps prepare those who come next. resources like these have made us the number-one trust company. that's why generations of families have come to us to help build their own legacies. we're confronting a loss of 198 points. what's the clever thing to do here? >> what's the clever thing to do? try and survive the weekend. it's not just the job's number. the fed, i think, is handcuffed. i mean, you see british trading at the lowest yield in over 300 years of trading. 10 years, they're trading at the lowest yields and over 200 years of trading. these are truly historic times. and no one is talking, as i just said to carl, about china and india. india is sinking into the sea. there's a lot more going on out there. >> yeah, it's funny, looking at gold, i'm watching that and i know you follow it as well. it is spiking big time. >> well, that'sing, once more, a fleegt to safety. people are reduced to the idea they don't know what currency to hide in. apparently, this morning, regretted back to gold. >> the bigger issue is everyone is crowding back to treasures. what is the consequence of that for the market? of that huge dynamic sweeping through. . it's got to pop. people are desperate for safe haven. it was an asset class up until 8:32. and then it turned into a safe haven. >> you were on this show yesterday. we were trying to forecast the jobs number. you had a little bit of a prediction. we'll play a brief piece of tape. this is from "squawk on the street" yesterday. >> a 20% chance under a hundred thousand. obviously, that happened. what were you looking at? was it the seasonal adjustments? what gave you the confidence to say that out loud? >> a couple of things. and it proves that a blind squirrel finds an acorn once in a while. but a cupouple of things to loo at. very strong correlation with the payrolls. it was so terrible, it indicated maybe 25,000 jobs. so that was one clue. although it seemed like an out liar at the time. the second thing, and i wrote about it in my comments this morning, is that many people in wall street think that there's a kind of post-lehman distortion. the economy turned so bad, so many sudden changes were made. people were fired in the thousands, et cetera. that when you came in the next two years, they became warped. that's why we have this phenomenon that you get pretty good numbers from october into april and may and then things seem to fall off a cliff or dry up rapidly. and everybody looks at it as seasonality. i heard somebody this morning trying to attribute the payroll number to more pay back for the warm winter. when are we going to stop that? december? >> hey, art, real quick, today in trading, you've seen plenty of employment fridays. and i've seen plenty, too. >> ordinarily, i'd say let's wait to see europe close. we tried to rally off the isn number, it didn't happen. but conversely, the euro is trying to rally now. that is straengly under pressure. >> the other currencies are under huge pressure today. >> that's going back to the beginning of the conversation. china and india. i mean, what happened in china this morning probably should have caught everybody's attention. but it got papered over by the payrolls. so david, i'd love to tell you we're going to get a rally later. we're going into a weekend. this could be a very meaningful weekend. >> okay. finally, we have wiped out the gains for the year. are there enough to get us through the weekend? >> well, i've stored up a few. so i'm ready. >> we'll see you next week. >> thanks, art. with me is starting out in a sell off mode. what can investors expect next? we've got a top-ranked panel for june and talk that dismal jobs center. that's next. and in about a half hour, mitt romney. what's his presentation for the economy? the market is trading lower. the s&p 500 is holding low. and the dow has wiped out its gains for 2012. more reaction on the report and let's bring in tom parcell who is a chief economist. michael, president and portfolio manager of the funds. guys, great to have you both with us. michael, i want to start off with you because you told one of our producers yesterday that the numbers today won't change your mind. won't change your outlook. but seeing the numbers are much weaker than expected, has your outlook changed at all? >> previous to the report today, we potentially have a slowing economy. u.s. growth is anemic. it's underperforming its potential. and i think the reports today, the various labor and statistics that came out this morning, just confirmed that. tom, double dip, is that on the table? >> it's not enough just to look at this report. i think you have to look at it in a more wholistic way. we not only got a bad report, we have pmis from basically around the world that have slowed down now. and on top of all of this, you have a massive fiscal brick wall that awaits us. so i think you're sort of fooling yourself if the recession is not part of the discussion. >> i feel like it was just a couple days ago when people were saying that the u.s. could actually be insulated from a slow down in europe. is that no longer the case? >> we've basically shown that if you look at all of these countries, if you try to correlate them, what you'll actually see is they're correlated to the tune of 90%. decoupling doesn't exist. it's foolish to think that u.s. can come through a downturn anywhere with any of our major trading partners relatively unscathed. that's not reality. >> would you agree with tom in that whole notion? >> i would agree for the most part, although i think it's a question of lags and delays. the u.s. economy is growing and europe is not right now. so there is some growth in the world. there's just the risk of a major slow down here. how do you trade it? i think you stay very diversified. i don't think any of us can really predict what's going on. i think you do. gold is up interestingly today. probably on speculation that there could be more monetary easing around the world. until i see it with corporate earnings, i'm not going to fully believe it. i do think we have more anemic economic growth here until we have a seat change in economic thinking. it remains to be seen what's going to occur. >> i want to double down on what you were saying about europe and ask the question on everything we see here today is actually a direct consequence on merkel's unwillingness to go to the next level. it's stopping confidence here and in asia. yesterday, mario, it seem fos me, that the euro might break apart. he says the situation was unsustainable and the president went further suggesting it was not the bank's duty to make up for the failings of national politicians. that is a huge deal, tom, isn't it? >> i think it's a major deal. and i think it really goes to show that in a lot of ways, the central bankers are going to feel compelled to respond at some point. the question is what's their threshold for pain? i think here in the u.s., when we think about the hurdles, i think the threshold for pain, many have been it. i think the last hurdle that needs to be jumped over is the equity market. i think for the thread in particular, that's probably their threshold for pain. you need to see more before you can have the serious discussion on the qe. now, again, as i've said on this television show a number of times, we think that the odds are very high for another round of qe. and i think with this report and other reports that we've seen, you're creating an environment. >> and michael, last question to you. we're running out of time. if the fed does step in, is that a positive for the markets? >>. >> i don't believe so, in the long term. i've been sort of a negative on fed easing for a while now. that hasn't changed. i worry about it. i worry about the problems it creates down the road. and i think the job report today made a further fed action more real issuesic than the u.s. and i continue to worry about whether the fed being the bank of last resort around the world can't do what it continues to do over there for much longer. >> all right, thanks so much for your time. >> next on the program, a big day and a very big interview. republican presidential candidate mitt rohney will join carl live. you'll want to hear what he has to say about the report and sparking such a big sell off again on wall street. first, liberty media taking over sirius radio after asking the sec to reconsider its earlier decision to refuse de facto control. we're going straight to the source to talk the battle for sirius next with liberty media's ceo. that's next on cnbc. thermal night-vision goggles, like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering, web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. a living, breathing intelligence helping business, do more business. in here, opportunities are created and protected. gonna need more wool! demand is instantly recognized and securely acted on across the company. around the world. turning a new trend, into a global phenomenon. it's the at&t network -- securing a world of new opportunities. ♪ :. welcome back to "squawk on the street." still ceo of liberty media, of course, giving him a hard time there. nice to have you here and have you come down to the floor. >> let's start off with sirius, it's been in the news. yesterday, in fact, ready to go back to the sec and why do you want to take control? and what would you do differently if, in fact, liberty does take de facto control of sirius satellite radio? >> as you pointed out, this is only de facto control, which is only how you're able to exercise the rights that you have. how we're allowed to use those rights under the sec's rule rules. we're just going to go through a regulatory process to exercise the riegs that we have. >> and, if you get those rights, is there something that you would do differently that's currently being done? >> well, we think mel and the team there have done a great job. business has been performing well. so we're very happy with all of that. liberty makes its weight and thoughts know. but in general, we're very serious. >> something else that you've been enthused about is the $6 million gain. the greatest investment probably of all time. you came in when the company was close to bankruptcy. many people think that you're going to pursue a trustment basically a way to spin it off to shareholders in a tax-free manner. is that the case and is all of this just posturing to agree to allow you to pursue? >> i'm not sure where we're going with the investment. we've said there are two logical paths for us. one is to go in the heart control. the other is to pursue a reverse mortgage trust the way we did with direct tv and ult maltly be with our shareholder's hands. i can't tell you which way we're going to go. if i knew, i would tell you. we think sirius is a great company. it has a lot of potential going forward. and we're not in a rush to make any decisions. >> it's also going to start spitting out a good amount of cash flow, correct? >> absolutely. satellite money has been spent. leverage is coming down. it has, as it's been noted before, a large nol position. so it's going to spew a lot of free cash. >> now, there's some speculation that you'd want to take your speck up to 80%? is that the case? i think that's highly unlikely. we tend not to want to pay top dollar for the last share. in addition, all of those nols are going to be used by sirius. >> are you sick of being a manager? >> you don't even know if it's accurate. i can tell you it's not. >> would you want to get rid of it if you took control? >> no. we want to keep mel involved. >> then why not just go along with whatever you want to do? >> you'll have to ask mel that. >> let's move on with a couple of the other investments you've made. barnes and noble. you're in town, perhaps meeting with those guys. you're very close to where your preferred converts. 17 bucks a share. the stock giving that big microsoft deal. are you happy with that position? could you see increasing it? >> well, a, we're very happy. we think they're doing a great job. so lots of great stuff happening. could we increase our stake? i think we have the right to go up another three or four points, not that much. but we're very enthused about where they're going. >> do you really believe it's a seminal one for them? >> absolutely. >> why? >> it's technology. it's international reach. it's presence. suddenly, when they go to around the world and say we're microsoft's bet in the e-book space, that's a very compelling statement. >> given macro concerns that are so present in this market today, qvc, your largest operating asset. what are you seeing? at this point? >> i think we're seeing across the countries in which we operate, we're seeing challenges, no doubt. germany has slowed. the u.s. is good but not great. japan is surprisingly strong. and the u.k. is kind of doing better than one might think given some of the austerity measures. >> it's clear that the consumer is very nervous. >> can you put that in perspective for us? has that been the case since the financial crisis? or are there pockets where things seem to be picking up. >> well, our consumer, she has been since the -- you know, financial crisis, has been value conscious, very much aware of what she's spending her money on. the affordable luxuries that qvc has are the things that she wants if they're at the right time and place. but she's judicious. >> and finally, why do you guys own the atlanta braves. are you going to get rid of that? >> i love the atlanta braves. >> i do. really. >> very nice to have you, thank you. >> you're very welcome. >> all right, from a mets fan to a braves fan. when we come back, a live interview with mitt romney. but, first, rick santelli, what are you working on for the next hour of "squawk on the street." >> rules are important when you're raising kids. rules are important when you want a prosperous economy. it's important when you want a consistent job growth. all of that was touched on by john taylor. we're going to dig deeper. rules at the top of the hour. all in one account. it's powerful, easy to use technology for trading stocks, options, and futures. optionsxpress, the broker smart traders deserve. open an account today at optionsxpress.com. [ male announcer ] to hold a patent that has changed the modern world... would define you as an innovator. to hold more than one patent of this caliber... would define you would define you as a true leader.or. ♪ to hold over 80,000... well that would make you... the creators of the 2012 mercedes-benz e-class... quite possibly the most advanced luxury sedan ever. starting at $50,490. seven minutes and change until we talk to mitt romney. he is joining us on cnbc at the top of the hour. in the meantime, he's joining us on a heck of a day. the dow with the biggest one-day point drop since april. that's news. but the s&p with the biggest one-day drop since december 8th. >> if you allocate that with last month, now 8% in just a month and two hours. >> if anything, people were saying coming out of may we are due for a short-term bounce, but it didn't happen. then gold up $47 today. back to 1609. it is clear what the sentiment is. >> look for europe for guidance heading into the european close. and in europe right now, it's standing pretty much pat with the loss we have seen all morning with the dax down 3.5%. the bright spot is the euro, which we brought to your attention many times. that's because the euro and the s&p 500 have a high 50-decorlation. >> i think when you look at the bond market, the smart question to ask is, are we going into a joop news-style depression and how widespread will it be if yields are this low? that's the question that comes up. that's interesting for your mitt romney interview. in that environment, can you come in, and is your remedy for the economy on the supply side, bain capital style, cutting services, scaling back the public sector, or are you forced in that environment going into a depression, going into infrastructure spending, it will be a fascinating interview. >> a key point i have not heard the man say directly, at least, if you were at the table with merkel and hollande, if the u.s. is going to leave, how do you get that conversation going? >> secretary geithner tried many times, but it is difficult. you are dealing with political issues beyond that cross borders. we know it is tough because here we are 2 1/2 years since the crisis began, still talking about it, and potentially witnessing the worst absolutely yet to come. and that's what you hear time and again. even when you talk to greg maffei who says business is slowing in germany, what they are seeing in terms of qvc, it is worrisome. >> we are talking about europe, sorry to interrupt you, but we have hit the buffet, haven't we? we have said many times we are entering the end debate, but after the warning for euro bonds or bank guarantees, it is bang right against the end of where we knew we would come. he's suggesting the euro will break apart unless americael, merkle moves. >> will the german populous spend the money that it needs to be done to save spain? or greece? or any others. >> that's where we are. this is it. >> if we are there, fine. at least we are finally somewhere. >> if the euro breaks apart, that is -- >> larger picture, ray dahlio talks about this, deleveraging takes a long time. and during that you will see periods of significant weakness. it's bumpy. and it goes on for a lot longer when you are e merging from a recession led by a financial crisis then a than perhaps another one. when we think about where we are and how far we have come, perhaps not nearly enough. >> according to reports, briefly on bloomberg terminals today, if you called up a currency page, there was a drop. icran confirmed it, but it was all the rage. the fact that some day soon you could look up a dry month. >> if trading desks are preparing the worst-case scenario, then it makes sense the terminal would also be prepared. we are just four minutes away from talking to mitt romney. he'll talk about what has been a very, very difficult employment report for the market to digest. stay with us. [ female announcer ] want to spend less and retire with more? then don't get nickle and dimed by high cost investments and annoying account fees. at e-trade, our free easy-to-use online tools and experienced retirement specialists can help you build a personalized plan. and with our no annual fee iras and a wide range of low cost investments, you can execute the plan you want at a low cost. so meet with us, or go to etrade.com for a great retirement plan with low cost investments. ♪ mine was earned off vietnam in 1968. over the south pacific in 1943. i got mine in iraq, 2003. usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection, and because usaa's commitment to serve the military, veterans and their families is without equal. begin your legacy, get an auto insurance quote. usaa. we know what it means to serve. the may jobs number showing just 69,000 jobs atted in may. a dismal number sending ripple effects throughout the markets today. being jobs friday, it is also nail the number on "squawk on the street." we asked members to tweet us their estimates of what the numbers would be. thousands responded and we are pouring over the responses. we found someone who guessed right below the 69,000 number. i think they missed by 1,000. it's quite interesting, the winner, you are never going to guess who nailed the number this time around. we'll announce the shocking winner a little bit later on in the program. they are going to win these fancy golf balls signed by myself, melissa, simon, david, rick and jim and gary. >> where are the balls? weren't they up here before? >> they are in a safe place. in a disclosed location. very valuable balls. >> take a look at that signature. look at that. that was a great smile. >> we'll see the european close in a half hour. in the meantime, have a great weekend. >> good luck with the big interview. >> mitt romney coming up. if you are just joining us, here's what you might have missed earlier today. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> the fear of contagen is real. one of the reasons why there's such a strong desire to keep greece or has been to keep greece in place is the fear of what will go on in the unwinding of the system. and i think that's a real threat. >> up 69,000. may payrolls increased by 69,000 jobs. the unemployment rate is 8.2%. the average annual earnings is 0.1%. >> the markets reaction, 1.463%. the dow dropped another 100 points down 200 points right now. >> nobody is saying to go out and buy today. maybe you are. you do. >> it's a combination of things you need. you need to be able to be sure you are looking favorable to treasuries. >> there is? where is it? >> it's in companies -- you stop it. it is in companies that yield more than 3.5%, whose earnings are not subject to dramatic revisions because of overseas businesses. thank you. >> it's been a draw hat dramatic open and a dramatic day with jobs earnings disappointing badly. >> i'm looking at the long road and the road ahead. and right now i think the congress has to take some action. good friday morning. welcome to the third hour of "squawk on the street." here's a check on the markets on a busy and important friday. the dow is down 225 points. it has wiped out its gains for the year on the back of a miserable jobs number earlier today. the s&p looking at its worst decline since december. 1284 at last check. the nasdaq is weaker by 60 points. gold topping $1600 an ounce. it is trading 2% higher for the week. homebuilder stock are the biggest losers today. that is taking a hit despite of positive construction data earlier this morning. we'll get to the road map today. republican presidential hopeful mitt romney joins us with the first response to today's jobs number. he'll be live in a few moments. the ceo of calstrs plans to use the stock to go against walmart's entire retail board. he'll join us live to tell us why. then ten-year yields hitting new lows. how low can it go? we'll talk rate strategy to find out how. finally, the winner of the nil the number sweepstakes will be revealed. and you won't believe who won. all that and more is coming up next hour. but first, we'll hop over to get rick santelli's take on an amazing friday shaping up. rick? >> it is. am i going to be shocked at who won this, because it was mitt romney? he guessed 9,000 or 69,000, huh? for the santelli exchange, we'll keep it really simple. rules. when i was a trader, and i'm sure every trader on this floor, the adage used to be, plan your trade and trade your plan. and invariably when things are going well, you would have your buy stop at a certain spot, your exit at a certain spot, but what always threw that into a tailspin was crisis. whether it was a big move against you you didn't anticipate, and what happened when the markets put your position in crisis? the cruels, rules, usually went out the window. that was never a good thing. you take your protection out. you double up on bad trades. that's the trading. you need to clearly see whether it is that analogy or parenting. if you have certain rules, you have to do this, cut the grass, clean your rules to get the allowance. when you bend or change the rules once, it has a permanent negative effect. let's translate that into governing and hold on to that thought of crisis. how many times have we heard, and we won't put names on it, many politicians say never let a good crisis go to waste. why is that? because you can get away, in terms of either governing or trading, you can do a lot of things nobody ever anticipated would be done under the eyes of how people get during crisis periods. what's the biggest thing we hear from ceos on cnbc? uncertainty. what's the exact opposite of uncertainty? predictability. what gives you predictability? read john taylor's op-ed today. what gives you predictability are rules, the rule of law or in general, things like, well, dodd frank, that's a rule. but dodd frank, health care, those programs came about at a time when we had crisis. now, when we had crisis, and anything could get done because people are nervous. the people that are being governed are nervous. they'll do anything. they worked on thing that is were indirectly, at best, tied to jobs. and once more, why do you think that none of the blanks were filled in on dot frank or health care? because while that window is open where the government can get away with anything, they wanted to put as much in there as possible because they are not going to get a chance again. it was all quite intentional. but in the end, if you want to create jobs, the reason congress is enactive, the labor secretary, action by congress, they took action. and what did they do? they mall managed, they took money, trillions of dollars. and the results are questionable, do they get a second chance? if you want more taxpayer money, prove that you are responsible in what you do with it. carl, back to you. >> more to talk about later on this hour. rick san till lee at the cme. now to the capital market center. gary komisky looking at the numbers. >> we are going to talk about rules in a second. i have three kids as well, rick, you have to follow the rules. the s&p 500 just broke below its 200-moving day average. something that traders and technicians will pay very careful attention to. that's a first time since late 2011 in december that it moved below the 200 moving day average. traditionally, back in december, we are all asked here at cnbc to put out a couple predictions. i want to remind people what i said back in december. i was laughed at by a lot of people. please bring that up on the screen. the yield on the ten-year treasury hits 1%. the secular move into bonds, coupled with easy money around the world, will continue to push beyond yields to historic lows. now that we are at these levels, rick, this is something we focused on for some time. the people out there, the viewers out there that paid attention and played by the rules are the ones being penalized here and in a dramatic way as rates continue to go down. those living on a fixed income, fixed income pension, rick, those are people that followed the rules. and what they see here now by this attempt of the federal reserve to keep stocks at a certain level, which by the way is not working anymore, they are the ones who followed the rules. and we have to remind people today, and carl, when we are joined by mitt romney, i hope you get the opportunity to ask him, what would he tell all the possible voters out there that have to worry about what interest rates look like for the next five years as a result of all the easy money around the world. >> gary, there's one positive thing here, okay? i think that if we get back to simple rules that are predictable and won't change and be wishy-washy, the u.s. economy could turn around very, very quickly. much quicker than people think. obviously the effects of europe are still going to be important, but it does offer us hope. >> rick, i would agree. i just am having a conversation here, this huge leverage all around the world, carl, you remember peter carl mentioned it on wednesday, saying he had not seen an environment like this in 43 years. lit get better, but the pain still has to be taken in kate's place all over the world. and again, this interest rate scenario, that 1% ten-year, when you look at japan, when you look at the easy money around the world, the likelihood that china is going to start being dramatic again, that's the reality we are living in. >> i see your point, gary, on what the fed has done, but this move to 1.45 is not fed driven. you will give them that, right? >> no, it is not directly driven by the fed but indirectly given. the requested of -- if they came out and said under no circumstances, under no scenario are we going to continue to print money, then the market would have a different behavior. >> but it is also the treasuries they have taken out. it is what they own that, in my opinion, makes the biggest difference. it's like, if you were to take 3/4 of the facebook shares and lock them in ft. knox for a couple years, how would that affect what's left? >> again, the argument for lower interest rates and the by-products it should create, you can't make the arguments anymore. it is not creating jobs and it did help the stock market for the first part of the year, but it is not helping the stock market anymore. >> another topic to bring up with the governor when we talk to him later this hour, guys. don't go too far. we'll see you in a few moments. when we come back, calstairs plans to use everything against them in the meeting with walmart later today. and governor romney later this hour. we'll come right back. that amendment went to every investors. >> what do you want to say to the guy out there who thought he bought this stock at $38? >> we are on day seven or eight of the story and the stock was up 10% just today. >> are you afraid walmart's board facing scrutiny today at the company's annual meeting in the wake that walmart executives bribed mexican officials to open store there is faster. all 16 members of wall math's board are up for re-election. calstrs is planning to vote against all on the board today. joining me is calstrs ceo, jack ehnes. >> good to be with you this morning. >> what's new about voting against the entire board? is this an acceleration of your concern? >> the news isn't the outcome of the vote here because the concentration of ownership is so high that won't be successful. i think the news started earlier this week when you heard the announcement by institutional investors in the midwest voicing concerns about the board of directors and the lack of independence and the need for the independent investigation. so i think we need to step back and say there's been quite a strong chorus of concern and that's framing the issues. it won't be the specific vote outcome that we'll hear in a few minutes. >> a good chance the vote will be largely similar bombic, symbolic, in large part because of the walton family. >> the issue is the scandal being discussed here won't be solved by public statements or a proxy vote or meetings with the company. we now are at the point where this will really require serious investigative enforcement action by department of justice and the sec to really layout the facts for us. symbolism, i'm not sure that's a way to phrase it. there's so much concern here, but we hope the enforcement authorities will get control and start to move through this. >> so you're welcoming the investigation by law enforcement even though potentially it could be material to the stock. and you're a holder? >> well, absolutely. i think any serious long-term shareholder wants to make sure any company is on the right track long-term. that's why we don't live by the daily news, the daily fluctuations. we live by the long-term health and integrity and focus in strategy of a company. and that's what this is, making sure the company is on track so we all know the real facts. we would never want to say, don't do an investigation. let's just be happy that the stock price is good today. heck no. we want code of ethics that are followed, we want internal controls followed. and if there's willful disregard of those, we all should be concerned. that's what we need outside parties to validate or tell us differently. >> have you gotten any indication that the walton family has even gotten incrementally closer to your point of view? >> we've had no direct communication with the company. and that really wouldn't be appropriate given the litigation at this point. >> of course, the stock, i mean, i know you are long-term holders, but it has been working unexpectedly. the best performer on the dow for the month of may, one of only four stocks are up, why do you think this subsequent fallout didn't hurt the shares? >> well, again, this is really just the first discussion around this scandal. and people need to wait to see the results of the investigation, to see those facts validated. again, we are not concerned about the daily fluctuations of this stock. but again, the long-term path of the company is what we should be concerned about. no one should have blinders to violations of ethics or internal controls if you are investing in a company. and that's what we all have to get focused on here going forward. >> if you're voting against the board, does that mean you want to see duke replaced? >> i think, you know, it doesn't take sherlock holmes here to see where the footprints are heading. but to reach those conclusions today, i think, is not responsible action for our voice. i think, again, we want to make sure that the record is complete. and at that point, there absolutely should be discussions on corporate government that is speak to the leadership. >> no suggestion has to who should replace them, whether that person should be external or internal candidates? >> since this is the theme here to plague the company, to the ultimate outcome of this is going to be a very fresh perspective of what it means to be independent on this board. >> finally, on the spectrum of activism that you have, right? on all the different holdings you have, where does this rank? is this your top priority? >> it is at the top because this involves the largest retailer at the world and involves serious allegations of breach of fiduciary duty. you have to be responsible fiduciary to your shareholders. if that proves true, that's important as anything. >> thank you very much. still to come, a live interview with republican presidential candidate mitt romney. we expect it to happen this hour. we think it may be delayed, in part because of l.a. traffic, where he is. we'll get you an update on that later. in the meantime, we'll count you down to the close in europe. 12 minutes away. those markets hit hard by our job numbers as well. we'll see the impact on trading here in in this afternoon in just a moment. i went to a small high school. the teacher that comes to mind for me is my high school math teacher, dr. gilmore. i mean he could teach. he was there for us, even if we needed him in college. you could call him, you had his phone number. he was just focused on making sure we were gonna be successful. he would never give up on any of us. or creates another laptop bag or hires another employee, it's not just good for business, it's good for the entire community. at bank of america, we know the impact that local businesses have on communities. that's why we extended $6.4 billion in new credit to small businesses across the country last year. because the more we help them, the more we help make opportunity possible. [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the 2012 c-class with over 2,000 refinements. it's amazing...inside and out. ♪ the c-class starts at just $34,800. a dismal jobs number taking a toll on the markets with the dow down 216 wiping out gains for the year. we have the vice president for us here, a tough day, warren. this clearly gave them some gusto. >> it gave them a lot of gusto. we have been following what's happening in europe for quite some time. in the last few weeks it has been a drain on our markets here, certainly a big drain on their markets. people were hoping and optimistically looking for a positive jobs number today to help out the markets. that certainly didn't happen. this gives the offshores more possibilities. >> technical status report, 200 day on the s&p. >> i think we are hitting a couple levels here where it's getting close to some potential damage. >> i kept hearing 1285, 1285 this morning. >> that's the numbers we are hearing. we are currently right around there. again, it's going to be how we are going to hold up for the rest of the day. i think if we can pop above that and give hope that maybe damage is done. if we close much below this, it could be trouble. >> right. they pointed out to me this morning that when the s&p is down 1%-plus on a non-farm friday, it tends to bounce about 2/3 of a percent. does that mean good things for the afternoon or not? >> i think one of the hopes you have is this is the first day of a new quarter and month, and a lot of times you get money coming into the market that happens at that period every quarter and every month. even though there's been outflows and equities for a while, we still have a little bit of the pot. i don't know if we'll see that much damage this early, it's too early to be seen. it's a tough call. >> traders are in a disadvantage because it is headline trading. it is tape bombs. you don't know who is going to say what in europe over the next 72 hours. so how would you be comfortable exiting at 4:00 today? >> i tell you, you probably want to be flat. shorts could get rips against something positive coming out. i think most people want to just stay away from this market as best they can. if you have an opportunity to go along on monday, if there's positive news out, it's a much better position than to be long and wrong going over the weekend. >> and we are trying to put in perspective the conference calls from the past few weeks from ceos here in the states who said, yeah, europe is terrible, the u.s. is not so terrible. we have a lot of cash. is there some reason to believe fundamentally that the summer, given all the bearish sentiment, much worse than last spring, could lead to jobs somehow? >> well, the u.s. corporations are in pretty good shape. the difficulty is the overall economy and the individual in this country is struggling. that's the big push and pull we have been seeing. if you look at corporations in the equity markets solely from the corporate standpoint, we are in much better shape than the rest of the world. what we do need is a little bit of positive economic data coming out to show the rest of the world we are ahead of the curve on getting out of this mess. once the belief is out there, a lot of money is flowing back into the market. i don't think today's number helped us at all. >> that's true. finally on the ten-year, you see a number like this, clearly you haven't, it's a record low, but it does seem odd to you? >> in past years when you had a move like this with a yield going toward this direction, the money was flowing out of bonds into the equity market. we are not necessarily seeing that. in that respect, it is very unusual. i think what you're finding in the term i have been hearing batted around lately, is people are looking for a return of capital and not a return on capital. and i think they are willing to take the low rates just to preserve what they have. >> and volume for the month of may was the biggest volume since, i think, january. as i guess people are exiting. you have to trade to exit. >> we would see the improvement in the volume on the upside of the market as opposed to downside. people have been getting out and the old selling way. it appears that maybe the bearish market may hold true. >> appreciate it. when woe we come back, a live interview with presidential candidate mitt romney on the weaker than expected jobs number. it will happen later than we thought, but we'll bring that to you as soon as we can. and europe markets are closing in 4:22. we'll get that in just a moment. almost every day i walk into the office and somebody asks me a question about the volt. what really blows them away is when i tell them i almost never go to the gas station, despite the fact that they see me driving to work every day. i fill the volt up once every -- maybe once every couple of months. and that feels absolutely wonderful. i'm hardly using gas, but it's there when i need it. anybody that thinks that this car doesn't have solid performance, hasn't driven it. there's no other car like this on the road. ♪ normally at this time we bring you headlines from europe. and there were a lot of them today. among them various pmis, unemployment rates, the german two-year going negative on the yield, but the real news over there has been our jobs number. >> without question. confidence around the world obviously was already in question. and now you get the jobs number, which has taken the markets there further into negative territory as we head into the weekend. it's quite clear that the effect that you get there up from what happens here in the united states, but the broader issue is the fact that you have this negative swift coming down. there's a bit of a bounce into the close, but it's no great shape. a heavy fall on the german dax. it is already in quite a difficult territory. the financial, it's a broad-based sell-off today, call it what you want. the financials are at the helm of it. deutsch bank in italy borrowed 9 billion euros saying it was a small amount. i'm not sure if 9 billion is a small amount. more than just the banks on the broad sell-off. a lot of the exporting stocks come back to what we said at the beginning of the program about what happened in china overnight. the luxury goods, christian dior joined the maker of mercedes benz in neck negative territory. the irish vote went through. the opinion poll suggested it would, so i guess there is a potential upside there. i want to leave you with two things heading into the weekend. bear in mind the spanish economy minister today said the battle for the eurozone is about to play out and play out in spain. this is, and we mentioned it to you many times -- >> the your mean european markets are closing now. >> we are in negative territory here. let me come back to the two things i wanted to leave you going into the weekend from europe. this is the spread. the extra investors demand to hold spanish debt over german debt. and you'll be aware that now we have gone above 5%. that's important. the number of days the previous eurozone members have been able to sustain that level of divergence without asking for a bailout is 16 days for greece. it was 24 days for ireland. and it was 34 days for portugal. and already spain is clocking up the days. the second thing i want to leave you with, and i make no apologies for coming back to think, we saw angela merkel meeting various european leaders. you can argue what we see around us in the asset markets around the world are a direct result of confidence undermined by angela merkel's unwillingness to go to the next level of europe integration without bank guarantees. right or wrong, that's arkbly arguably where we are. i want to leave you with this quote from mario dragi, the president who told the european parliament that the euro was unsustainable now unless steps are further taken towards integration. and this is important. he says, it is not the ecb's duty, it is not in its mandate to fill the vacuum left by inaction from national governments. and that raises the question as to whether the ecb is as willing as we assume it is to buy, for example, spanish debts. >> interesting to hear greenspan on "squawk" saying the first things he looks at in the morning, the ten-year in italy, the ten-year in spain and the french ten-year spread against the bond. >> because that's the heart of the breakup of the eurozone. >> we'll see what the weekend brings. simon, thanks a lot. we'll go to gary kominski up next. this time talking markets with a slightly different angle. >> we talked about the hedge funds and the black swan bet on buying thor in the german bond. doesn't look as crazy today as tuesday, right? >> that's right. >> my wife says i repeat myself. i get criticized all the time. when you rely on the research of others, you only rely on what they know and what they don't know hurts you. we had a man by the name of peter to talk at china pmi and manufacturing. let's listen to what he told us then. >> if you look at china, it is really built on two pillars. one is manufacturing and export, their number one customer being europe. the number two customer being the united states. and there's demand destruction in both of the places. >> that was happening. you saw it at the manufacturing level back in january and it tend to get worse. i wanted to check with peter for consumption in europe and the united states. what are the issues now? this is what he told me earlier today. bring that up on the screen. i thought it was telling in terms of things happening in china with the banks. bring that up, please. >> wait till the credit bubble bursts in china. lit make ours look like child's play. europe like a walk in the park. it's the end of the ugly week. and i'm not trying to make this point to hammer in the negativity. but again, if you look at what the chinese banks are now selling u.s. dollars. maybe it is because the u.s. dollars appreciate it. there are many who believe that the chinese financial system is finally getting ready to absorb the own credit burst. there's a lot of bad loans out there with the greatest short sellers are weighing waiting for this to happen. we won't be talking about the de-leveraging of europe, but we'll be talking about the global markets and about this not slowing down in china but the shrinkage of china. something to think about this weekend. >> sir, you think they bet all the long-term china bears. their call is finally coming true? >> it seems as if the global slowdown is finally forcing china, if you want to think of a game of poker, to show their hands. there are a lot of people who believe the numbers coming out of china, and not in the last six months but in the several few years they have been made up. you basically now have to say that peter li-- the sort of sca tips so their scenario being more likely when you look at the data. >> the question then would be is it a broad slowdown or the popping of a real estate bubble in shanghai. there's a lot of generations we will take. >> thank you very much. mary is here now with a look at what's happening today. >> disappointing car sales today, disappointing data for india and china. all contributing to the sell-off today. the dow jones industrial average reis-erasing all the gains from this year. and we are keeping an eye on two things. first of all, the euro. the reason i'm pointing this out to our viewers is the movement in the euro has correlated quite closely with the s&p 500. and the s&p 500 we are watching, not because it briefly blew below 1284. breaking below 1284 is a negative. what we have seen is the euro gave up gains to break the low at the 1284 level. now rebuilding off the lows of the day with the euro ending recovered. a quick check of the sectors moving today. financials pace the decline along with discretionary stocks. all ten of the list are home builders. if you look at the chart, they moved to the upside. but today giving up the gains because, the jobs report raises concerns on whether or not the u.s. economy is slowing down. do you think a double-dip is a possibility according to traders? a lot of people think we'll see very slow growth, not necessary lay double-dip right now. the one bright spot has been gold. it is higher today as once again investors are looking to this as a safe haven along with u.s. session. that's pouring into the mining stocks. if you look through the list, we have a big list on our computers here. these are the only ones in green. back to you. >> the gold sector is incredible on the flight to safety. back to rick santelli in chicago. we'll talk dollar/yen and jobs with our special guest. >> we have art here with us. when i look at the dollar/yen, we would show a chart today with 3 1/2-month lows. i don't know if there's reality to the rumors, but it is not helping the japanese markets. these are issued with currencies we are going to see more than europe, okay. are we looking at a global slowdown? is europe going to spread with a a -- japan has been slowing down with very low rates for a long period of time. obviously, none of this will help them. >> now, when we talk about what's going on in europe, and there's going to be rumors the closer we get to the close because everybody is skrangabling to contain this one. 6.5 million i saw on his ten-year. do they have market that they are demanding. >> we have been talking about this for two years. i think at some level they have to let greece grow. they may try to put a firewall around the rest of the countries, but greece' problems can be fixed. >> which can be fixed easier. >> well, they take time. >> if you ell a bakery they can't open on sundays. when you tell people in business that if you hire somebody part-time you have to turn them into full-time. once they are full-time, you can't fire them. that makes an immediate situation. european problems do not get fixed quickly. >> but they have a chance with the size of the economies to put a firewall around them. i think at some point they have to start talking about a eurobond. >> you are a good friend. many of you talked about gold. why do countriike spain, italy, they don't need stockpiles of gold. use it to entice investors to buy their paper after they announce and stick with positive reforms to give us growth back in the bonds. >> the real problem we are going through right now is this is the fourth time, fifth time we have not had -- there have not been any real answers. a lot of talk and no real answers. >> i think it is childish to think that years and years and years of these issues that have caused europe to show themselves after they join the european union not to have the balance sheets elt represented. this is why the elections are such problems. you have knucklehead positions leading people to believe there's a solution that can be implemented quickly. >> that's what we are doing now. if the government agrees to something, the next election they are out and the newt government does not agree. back to you. >> thank you, rick santelli. get more reaction on the morning jobs number with michelle meyer of b of a. this is a slower patch for the second half of the year. the most worrisome metric for you this morning. >> oh, there's a number of things that were pretty worrisome in the report. the headline number was shot with downright provisions the last two months. i think one of the things two other metrics are not talking about much a fell 1% over 1% year after year. that means that compensation for the month is going to be weak. income growth is going to remain soft. and that's something revealed in the gdp numbers. a revision to cure disposable income. the consumer can't spin it. >> more part-time news is out there that you are led to believe? >> yes. one of the reports is that we are seeing more part-time hiring than we have in past recoveries. and that is speaking to the conscious nature of businesses. businesses are engaged in just-in-time labor. they are responding to the increase today and are not thinking about increased demands down the line. meaning they are hiring more part-time workers and to fill the output numbers right now. >> do you think the outlying trend is closer to $125, right? >> we are not just adding 69,000 jobs going forth. we are seeing weather pay back. just in the winter 2005 was not the number. now it is probably closer to something near 125,000, consistent with the gdp numbers right around 2% growth. >> the labor secretary this morning tried to shine a light on the participation rate tipping up what could lead one to believe there's a little more confidence, a little more payback in looking for a job. do you think it could be students? >> yeah. i wouldn't read too much into the participation rate. that is incredibly noisezy noisy. it is kind of hard to seasonally adjust the status, so the trend is still down. we have seen a massive drop in the labor force precipitation back to 1980s levels in the past several years. and if the labor market remains weak, we will also participant low. the fed, do we think it is increasingly with the fed announcing another round. this is when we thought -- if the economy does what we think it will, reach 1% gdp growth by the fourth quarter, i think it is inevitable. the fed can't sit idle, so i think the june meeting is a little difficult for the fed to engage right now. you are seeing slowdowns but not across-the-board destruction. we have not seen those filter into the real economy by europe, but by the august 1st meeting or the beginning of september, the dow could spike this in terms of the election. >> is that the tipping point for him in their respect to how it it pacts the company or tells you about the company, but they have a price dueling. slow job growth continuing, a big sell-off in the stock market, and slower manufacturing, more cyclical components of the economy turning. >> michelle, great to talk to you. have a great weekend. >> you, too. when we come back, a live interview with republican presidential candidate mitt romney on today's dismal job number. 12:40 p.m. eastern time now. we'll ask him about jobs, the economy and more broader political issues. ten-year yields reaching new record lows today. at 1.47%. we hit 1.5%. how low can it go? we'll talk about that after the break. welcome back. coming up on "the halftime report." what does mitt romney think of this morning's dismal jobs report? we'll ask him in a first cnbc interview. stocks getting slammed and the s&p hits a four-month low. we have the hedges you should make to protect your money amid this sell-off. treasury yields also falling today. the ten and 30-year at record lows. the head of fidelity funds has a place for near zero returns. carl, back to you. a lot of data to digest today. back to steve liesman at hq with details on the torrent of numbers we have seen, not just today but all week long. >> not all of it is as bad as the jobs number. spending was up 0.3% in line with expectations. income falling a bit short. the construction spending numbers were okay. you had the public specter sector declining but the private sector up 1.2%. and the isms were down 53.50, but the employment number was not too bad. carl, going into this point of where we have seen weaker data, data that has come in below expectations, but not data falling off the cliff, at least not yet. now i'm hearing stories like, stall speed in terms of the jobs report and other sort of bad commentary or negative commentary around the economy. raising the question about the federal reserve. i like what michelle said in the last segment, i don't think it is a june story, i think it is more of an august or september story. >> even with the sensitivities to the elections cycle. that does not wave you off of that possible move? >> i really think the fed is going to do what the fed feels it has to do. and if it feels like -- and i think maybe the bar is a little bit higher because of the election, but i think the bar has been high anyway. when you take a step back and think about the political environment in which the fed has been operating, i don't think the fed can come forward with positive job growth. but it could come forward with negative job growth. remember, bernanke in his speech a few months ago said, i understand we are having to bounce back from the weather or bounce down from the weather. and we are going to look through that. some economists think the fed needs more data to decide if things are really falling off a cliff. >> steve, thank you so much for that. steve liesman back at headquarters. bonds are a story today reacting to the disappointing jobs number. the ten-year moving aggressively down to 1.45%. michael, good to talk to you. welcome back. >> thank you, carl. >> we keep thinking about the big generational calls made by various analysts around the street. the long good-bye to bonds just hasn't happened. how many more chapters does this have? >> well, eventually rates may rise in the years to come, but the right trade at the wrong time is the wrong trade. and we think positioning for a bearish move, even if the economy improves a bit, is the wrong time to do it. given the uncertainties that continue in europe. and as steve and michelle mentioned, given the possibility we may see additional movement by the fed to stimulate the economy. >> what is your forecast for the ten-year? >> by the end of the year, we think the ten-year goes back up to 2%, though the growth outlook does seem to be weakening a bit. even that might be optimistic. and you still have uncertainty in europe adding to the liquidity to treasuries. so even 2% is a bit optimistic. one of the things we think keep the fed from coming in the near term with additional stimulus is the inflation markets where things still seem to be holding up. >> we had greenspan on this morning who said don't be fooled, we could be looking at a late '70s-type scenario where rates spike dramatically in a short period of time because we have issues we have not completely grappled with in this country. are you in that camp? >> we still have inflation pressures, not like we did in the '70s, but we still have a stagflation-like scenario keeping inflation rates higher. so inflation is higher, even though real rates continue to drop. so real rates in the u.s. are in negative territory all the way out to the 20-year today. that's an all-time low. and yet inflation are not. so we could not see a sharp rise in rates until a higher inflation scenario. >> you think you'll get a warning on that call. >> that's right. >> in the meantime, people have also said, look, why would the fed do more qe when the market is doing a lot of the work for them. is that a misguided notion? >> yes. they pointed out earlier this week that the european situation is doing more to lower rates in the u.s. than qe3 would. so why bother? and, in fact, what good would it do? with a 1.45 ten-year rate, would the economy be that much better off with a 1.25 rate on the ten-year? it's tough to argue, but i think the argument is increasing for if they do another round that they do it unsterilized, which is different from where we were a month ago given that low rates aren't the answer. clearly, they need to improve risk in the economy. and they can only do that, we think, through unsterilized intervention. >> you think there would be ammunition in that particular bag, the unsterilized bag? >> that's right. well, greater potential in the unsterilized than sterilized. in qe2 risk assets rose, the dollar fell, the commodities increased, e merging markets increased. that doesn't happen in operation twist. operation twist got yields lower but didn't provide a risk to boost assets. we think that's why there's an argument for unsterilized relative to sterilizing intervention. >> finally, when a client calls today and says, i want out of stocks. i want to hug fixed income full boar. what do you say in response? >> well, we don't love that. only poultry will return in the 30-year, but investors are increasingly concerned about the return of their capital, particularly the real return of their capital rather than return on their capital. so that's what is driving investors into treasuries and yields continue to decline because there just aren't a high amount of safe assets around the globe. >> yeah. mike, thanks so much. over at barclays today. i want to bring you up to speed on the live interview with presidential candidate mitt romney over in california where traffic is tough, not for him, but his camp to get a television truck to his location. largely about getting the infrastructure of tv to the candidate. so now that the truck is there, we expect to have him on our air around 12:40 p.m. eastern time. look for that. mitt romney first on cnbc. when we come back, we'll talk to the winner of the nail the number sweepstakes and see what method he used to get the jobs number right and how we'll use the set of the coveted "squawk" golf balls after the break. 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[ all ] i'm with scottrade. we have been telling youabout this all morning long. we do have a winner. and you'll never guess who it is. this follower tweeted yesterday around midnight and got the closest guess, 68,000. the actual number was 69,000. he's the first two-time nail the number winner because he actually won last month from fairfield, connecticut, matt mclain is wearing the hat that you won last month. we got to stop meeting like this. >> well, i tell you, carl, it seems like ages. it's a good time. >> what led you to 68? >> well, earlier in the week i was a lot more confident and thought things were going to be flowing a little smoother. but by the time the data came out on thursday, things just started looking a little more dismal. and then i revised my initial 168 and just lopped the one off it and came down to 68 and was just 1,000 shy. >> wow. with the way this data works, that's a smart way to play it, just knock off the one. are you going to tweet your guess for next month in a place where everyone can see it? >> i would be more than happy to. i hope some financial firm out there would like to pay me exorbitant consulting fees for doing the same. >> matt, congratulations once

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