Transcripts For CNBC Squawk On The Street 20130802

Economy and the markets, lets bring in diane swonk, with mesereau financial, brian bell kin, and dan greenhouse, a cnbc contributor. Good morning to all of you. Diane, if im not mistaken, you werent too far away on your guess, were you . The original guess was closer than the revised guess. I was surprised on the downside and the downward revisions are a disappointment. Some of the key issues that are important here, youre starting to see the imprint of obama care and sequester. The people moving from full time employment to part time for furloughs are really picking up right now. Youre getting all kinds of anecdotes in the contractors to the defense industry. Were also seeing in the Health Care Industry Health Care Employment has really slowed. Thats where medicare cuts have are starting to come through. And back off as many people are working from full time to three days a week, and thats showing up in the Unemployment Rate, the number of workers taking part time for economic reasons. They actually had a full time job and their hours have been scaled back. Also, we saw you know, the manufacturing numbers, the composition is not great. Not just the quantity that is a disappointment, but the quality of reliance on those sort of part time the low wage workers in leisure and hospitality, retail, food preparation has been a big area of increases. Those are the things that are not the most reassuring about the composition. Not just the quantity, but the composition. Sure, well talk about part time versus full time today. Dan, how does it square with the blowout ism we got yesterday and the employment subcomponents and the last few months of 200, roughly 200, was that noise . The pace is now 190,000 over the last 12 months, which isnt terrible, but not good. I think one reason we were above consensus is some of the recent trends, jobless claims numbers turning down, the ism number. I felt like were perhaps this would be a continuation of the recent trend of better than expected numbers. That isnt the case, so in that respect, it is a bit of a disappointment. The conversation is going to turn to the Federal Reserve, and that regard we still have another jobs report to go before we are set to meet. The gdp revisions remind us none of the reports are gospel. Given this looks like an odd duck, do you think it is right for the ten year to be rafting the way it is. The short answer is yes, but cnbc fast money contributor josh brown made a good point on twitter earlier which was this must number will be revised before all is said and done and the final number will look nothing like the number reported. How does the market trade on this, at least in the shortterm . We have come so far, up almost 20 on the year. People said you would have to have a blowout number to keep the trend going. We think so. It is a bit like employment purgatory, if the employment number would have been stronger, we would have had to worry about tapering. If it would have been a lot weak, we have to look forward to more fed accommodations. So given the fact, as you said, it is up 20 , we need a respite here. Remember the formula, stocks, lead earnings which lead the economy. The stock market already reflected this overall gain we have seen in employment. Its august. Lets take a respite and regroup for the fall. Now that were finishing up the last week of earnings in the last major week of earnings season, it sounds like you and i grow some extent, but are you seeing trends here in the Quarterly Reports that suggest that Earnings Growth should continue with the same pace or less or are you looking for a pickup in the back half of the year . According to our models, were going to see a backup in terms of earnings and pick up as you say, back half of the year. The problem, dan, is that most of the stock prices already reflecting the gains, so the key thing, we think, for the second half of the year is really start to see sales growth to kick up, the Earnings Growth side of things. I think multiples have peaked here. The market has a lot of work to do in terms of prices and fundamentals from here. Thats why i think from a near term basis, we need a respite, but next five years, you definitely want to be in equities. Diane, lets talk some ten year. Last night, people were saying look out tomorrow, do we graduate to a new trading range on the yield . Do we start to worry about creeping wage inflation, clearly thats not an issue this morning. No. But for how long can we table that discussion . I think were going to be able to table it for a while. I think thats really important because the doves are really out there saying, listen, were well within our mandate on both sides of the game with the Balance Sheet. I do think as much as the doves didnt like the runup in the ten year, i think they would like to see it come back down again. And one of the things we did see an unintended positive consequence was that quick unwind of the market that we saw that whipsawed the market, did reveal some emerging bubbles and it was a warning shot over the bow, but now reset the efficacy of the feds large Balance Sheet and taking away some of the risks of bubbles that were out there. Thats an unintended consequence now of where we are. The feds mea culpa may have helped the markets if they get that rate down again. They want the tenyear lower. It is interesting, if you were to say how important is Financial Stability from the feds point of view at this point going into may it appears it was getting important, they were worried. Were back above those nominal highs in the stocks, we have seen some trauma in the bond space. How do you think they look at this now . The interesting discussion now, i love to get dianes take if we have time, the fed is clearly moving in the direction of favoring low Interest Rates over asset purchases. They want to get way from buying bonds. And the problem is for this whole debate, we dont know to what extent they want to do that at what speed. Those of us that think this happens in september, even though the data doesnt support it you still think it is september . I think, yeah, i think they want to do it in september because even though the data is not awesome, they think that by promising to keep rates lower for longer, by the way, were talking 2016 now, the Forward Guidance can offset the for lack of a better word, the damage you do by buying less bonds. Would you agree with that . I think that is a debate. I think thats an important issue. I do think they derail some of that debate by shooting this warning ball over the markets that help to unwind some of those things theyre worried about. I think the other issue, and we have to keep it in mind, how much does the fed buy now relative to how much the treasury is issuing . The deficit is plummeting like a rock. And also, mortgage generations have plummeted without the refinancing out there. The fed is becoming a larger player, even though theyre still buying the same amount in the markets as a percentage. Thats brian, sorry, i want to get the last word in here brian, with you, do you think from the stock markets point of view, investors point of view, they believe this is the case that what happens with regard to the purchases if the fed starts to wind them down will be more than offset by keeping rates lower for longer. Thats the key thing. This unwinding process is going to be a long process, and trying to call september may be just a little bit too soon. Remember, corporate american, the fed is paid to be conservative. This will be a slow unwinding process, it is going to take some time. We a couple of shocks near term but thats how a big bottom develops over time. All right, thanks so much, guys. Brian, diane, thanks so much. Well see you soon. Dan will stick around later on. Now the jobs number is out, we want to know, did you nail the number . All week long we asked you to tweet us your predictions for july nonfarm payrolls for a big prize, the duffel bag we have given out this year, autographed by the squawk on the street gang. Our staff is combing through the entries. Well announce the winner later in the show and had been seeing a lot of 200 plus. I tried to get people off it. I know. There were a couple of deutsche was 225. Goldman saw 200, right . We took a stab at it. Didnt work. Yeah. You have to. If this had come in at 210, 225, you know, god forbid higher, it really would have been the coup de grace. The point is were not getting anywhere near that number. God forbid we got a real jobs number. I see. I see. I dont know if god forbid is the right tone. I dont knknow what youre s. Heavens to betsy. Not the only big story today. We seemed to have reached the final point in the battle for dell. We told you first this morning, dell special committee, the board of directors and michael dell and silver lake reached a new deal underwhich the buyout group will pay 13. 75 in cash. And also guerin need shareholders will also receive the eight cent Quarterly Dividend, which was in some question as the buyout moves along. All of this, of course, coming after a very tense showdown between that special committee and michael dell in which earlier this week, of course, special committee said, no, we cannot give you this change in the voting standards you want for 13. 75 a share. However, now, for this new deal, in fact, there will be a change in that voting standard and that is the key here. It will be a majority of those shares voted as opposed to a majority of all shares. Notwithstanding, not excluding michael dells shares. So at this point, if you get yes shares, that amount to 84 , so if you get yes shares at 42 point something, youre done. Very key consideration here that almost assuredly will carry the day for michael dell and silver lake. This comes, as i said, after tense negotiations that were ongoing through the day yesterday and into the night. Michael dell and silver lakes egone durbin both in hawaii, never got on a plane to go to austin, texas. Number of shareholders did. And reporters. They were there in hawaii, negotiating with advisers. Egon durbin was adamant they wouldnt pay more than 13. 75. We may not hear that again, after free port, after this, dont use best and final again. I guess they can say it was the best and final cash portion, now special dividend. But, please. Egon durbin feeling like, listen, i cant be the guy who let michael dell lose his company and that very well may have happened. Many times throughout this, one thing that gave me pause is you never get the most dramatic outcome, which would have been a deal voted down today, and then the onset of a gory proxy fight between carl icahn and michael dell with a real possibility that carl icahn would have taken control of the recapitalization plan. For his part, icahn sued yesterday about the vote, trying to get the annual meeting in the shareholder vote tied together. Well see if he tries today, but it would appear that delaware law is on the side of the special committee. In fact, leo strin already opined on this very issue. It looks like theyll change this voting standard and give the deal to michael dell and silver lake for 350 million more, that is, for the shareholders, not michael dell, than they were going to pay originally. Prap perhaps an outcome that we knew had to come. Could they lose this all over what is a small percentage of a 24 billion deal or were they ready to let it go down to a vote as at some point seemed like a real likely outcome. More likely outcome, i would argue, is the one they finally arrived at, but not without a lot of difficult negotiations and give and take by both sides. The special Committee Also showing its cards. It didnt want to go down that road either. You can imagine these directors are exhausted. Everyone. What about icahns lawsuit . What about the transfer . Does that go away . It doesnt necessarily go away. I dont know it is going to have a great deal to stand on. Certainly when it comes to both the annual meeting and the vote, but even more importantly the voting standard again because earlier litigation, leo strin the chancellor in delaware, has already weighed in in part on this issue. The board has the leeway to change the standard and they have. We havent seen the press release yet, but we expect it before the open of trade. Very quickly, the funny thing about this whole thing, lost in the whole debate is the pc market being going away, so to speak. It is funny, we havent talked about the fundamentals of dells business in quite some time because ive been so taken with the give and take and the strategy. Well get a Quarterly Report from dell later this month and well see what that looks like. Some saying theyre tanking the numbers, not as bad tass loas i. Others saying you should be lucky were buying this company what were willing to pay for it. My personal feeling is they wanted to get the deal done before david went on vacation today. That was the deadline. It was. In fact, today was supposed to start vacation, but im happy to be here. We all want to get things done. Yes. A lot of vacations have begun today, i noticed. The phone was not ringing as often and lurusually a 631 area code. When we come back, linkedin shares at all time highs, opening up 20 bucks, having more than doubled in the past 12 months. A live and exclusive interview with ceo jeff weiner. Can the website keep growing revenues at such a fast pace. Also ahead, first reaction from the white house to the jobs number today. Well talk to dr. Kruger, the chairman of the president s council of economic advisers. Futures, a strong start to august. Well give some back at the open. A lot more squawk on the street in a moment. With fidelitys options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens, and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. 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Tell your doctor about other medicines youre taking. Call your doctor right away if you have muscle pain or weakness, feel unusually tired, have loss of appetite, upper belly pain, dark urine or yellowing of skin or eyes. These could be signs of rare but serious side effects. Is your cholesterol at goal . Ask your doctor about crestor. [ female announcer ] if you cant afford your medication, astrazeneca may be able to help. Shares of linkedin in are rising sharply, poised to open at noon all time highs. Posting better than expected Second Quarter results helped by a surge in membership and revenue. Linkedin also raising full year guidance, Third Quarter outlook was below consensus. Well have an interview with jeff weiner, we should mention as well this company as we said, guys, up 9. 6 premarket and 350 since their ipo. What is their secret . I dont know. I cant wait for you to interview them. Visitors to the home page went through the roof, theyre unique visitors coming from mobile, 30 to 20 . Whatever theyre doing, theyre doing it right. Yesterday was at 52week high before they reported these numbers. I think, dan, to answer your question, there is lots of hope that the Business Model can expand greatly. Theyre in so many corporations now. Forget about the people you get the emails from, you remember linkedin, more the relationship between the company and corporations. What as a result of that enormous database that they have they can do for these corporations. What are the services they can add on, curious to see with weiner, it is very powerful this community, if you will, that they created. Saw excellent growth in that group, the highest paying group on the site. Up to 20,000 users in that category, which is sort of their target for what they call the sweet spot. Imd looking forward to that interview. Theyre killing it. They sure are. Im trying to be loud because im in cramers seat. We have you hooked up to an electrical current. Aig a gainer in the premarket. Revenues short of consensus, though. Also announcing a 1 billion stock buyback and a Quarterly Dividend of ten cents a share, the companys first since being bailed out by the government. The ceo was on the closing bell late yesterday. Great top line, great bottom line. You look across all of our businesses, all of our businesses are fundamentally producing good earnings, good revenue for this quarter. Really a full story about not just our investments, not just our property, not just for retirement, not just for mortgages. Were doing good across the board. The Aircraft Leasing, theyre still trying to do. Some issues there. I still go back to it was the last quarter of 2008, i went on to break news aig was going to lose 99 billion for the quarter. And they were going to need a bigger boat. The bailout already under way was going to need to be bigger. The fact that not only do they come back from that pay everything back but are now successful, still shocking to me in some way. This week, hank greenberg, not aig, the board opted out of the lawsuit, he went after him saying i want to know what you knew and why you did what you did during the crisis. Still arguing about that. By the way hell have his day in court, i guess. We talked about this, but the stock market is shrinking. No, yeah. Im waiting until the earnings season is over, but in three of the last four quarters, shares outstanding has gone down. And that has been for the more bearish individuals, more skeptical individuals a powerful argument against when Interest Rates go up, the stock buybacks will slow and eps wont look that good. More on viacom and that subject later in the show. Right. Janet yellen and Larry Summers, step aside. Who thinks chuck norris, yes, walker, texas ranger, should succeed ben bernanke as fed chairman. 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Were about five minutes from the opening bell. It is official as well, we have been reporting it as of other news outlets, dell and its special committee have reached a deal with michael dell and silver lake on the deal we have been telling you about. 3. 75 13. 75, excuse me. And also the eight cent a share dividend. And language in the release explaining why they were willing to change the voting standard. All right, again, with five minutes to go before the opening bell, lets bring in ben willis, managing director with Albert Friedman and co. What is the impact . We seat tenyear yield lower today. Perhaps a good thing. Leike a christmas morning, expecting a package from victorias secret. It is tapering what would otherwise would have been a much more dramatic move down on the market. Because we got the 7. 4, evidently because there are fewer people willing to look for a job in the Participation Rate number, here we are today. So another summer friday. Summer friday out for a record yesterday. Yeah. Yesterday was pretty impressive. Im looking for a market, you know, away from the news that we just had on the unemployment number, the big story right now that traders are talking about is a story coming out of fortress and black stone and whether or not you use the strength of this equity market to sell and i would view their position on more providing a dividend for the people that invested in fortress and black stone than any sort of comment on the valuation of equities at this point and whether or not they should be selling them. That would it seems to be the underlying theme. It is the fact of the matter is were tapering, watching, were watching Central Banks throughout the world, how they manage their economies, that goes to china and how theyre going to manage. Get a little cpi number from them next week and then there is nothing throughout the month until about the 21st with the fed minutes and then jackson hole. 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After all, whats the point of talking if you dont have something important to say . [ cows moo ] [ sizzling ] more rain. [ thunder rumbles ] [ male announcer ] when the world moves. Futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with papermoney to testdrive the market. All on thinkorswim. From td ameritrade. There is the opening bell and lets get a look at the s p at the top of the screen on this jobs friday. A day where we got jobs at 162. Again, below estimates if you were just joining us. The big board today, texasbased aflon energy and oil and energy celebrating its ipo. Sprouts Farmers Market celebrating their ipo yesterday. The organic food retailer debuted not only debuted, the top ipo debut of the year with a gain yesterday of 122. 83 . Not bad. Congratulations to sprouts on a good day one at least. Well see what the future brings. Timing to do it on a thursday, carl, instead of today appears to be fortunate as well. It is not a story that necessarily moves in line with the macro, but, today, you look at the sea of red out there, the question will be just what markets start to look like as we move throughout the session and digest the details of this report. Always difficult to say in the shortterm here. The topic we talked about earlier, now into august, traditionally a slow period, almost no real earnings and Economic Data over the next few weeks. It is going to be a very slow period. Couple of interesting little data points, august has been the weakest month for the market over the last couple of decades. Fighting a trend there. We saw a strong open yesterday. We know the first day of the month can be a gauge for the rest of the month. You have this issue with correlation, which, a good thing if youre a stock picker, are there any of them out there, down to 18 from 66 correlation from july. I disagree, are there any of them out there. Our clients are all single stock pickers, they pick stocks, not markets and the breakdown in correlations has really given guys a chance to show their stuff, not everybody showing it, but really given guys a chance to show their stuff. Speaking of picking stocks, eden has been a name where management has been consistently bearish on the overall macro picture, they do report dollar nine misses by two cents, revenue was light. They cut the top end of their fiscal year outlook on Slower Growth. Stocks down 4 . For a long time they seem like the outlier in what was a sea of better numbers. Do you think eden is telling the truth . Everybody is different. Going back to when if we define the start of earnings season as when alcoa reported, industrials have been the second best performing sector since the start of earnings season behind health care which is being boosted by the biotech sector, something jim talks about every single day and night. Industrials have performed quite well. You look at comments out of honeywell, out of caterpillar, it has been somewhat more optimistic. Not for caterpillar shortly. Yes, we will. The issue for the global industrials is china. The issue is whether or not china is bottoming or going to improve and whether it is if you expand further beyond the industrials to the starbucks or the yums or the companies that are operating in the environment, theyre all speaking somewhat optimistically or less than negatively. We got the jobs number, of course, for july, showing a miss. As u. S. Employers slowed their pace of hiring but fell to a fouryear low. Lets get the first reaction from the white house. First here on cnbc is dr. Alan krueger, chairman of the White House Council of economic advisers. I know it is your last day on the job. Congratulations on a great run. But you know what that means, it means you can be completely candid today, no talking points, just tell us exactly what you think. You mean i can be like i am every month when im on your show, carl. I think today we have seen another solid report. Over the last 12 months we add ed 2. 3 million private sector jobs. The economy is slowly healing. I think the most important thing Going Forward is that we get some cooperation from congress to support jobs and growth and most importantly that congress doesnt mess up the recovery by having an unnecessary protracted fight over the budget or worse yet, failing to raise the debt limit in a without much drama. You mention government. Government, i believe, added just a sliver of jobs, the net contributor to the month of july. Some have suggested maybe we have cut as many government jobs as we can. Do you agree . I think what were going to see Going Forward is local government stabilizing over the last five months. We have added local government jobs, thats turn around. Hopefully that should flow and we have seen over the past several months a decline inle from government jobs and if the sequester stays in place, unfortunately that will continue. Dr. Krueger, this is dan greenhaus. I have a question right up your alley. Im sure you saw the strikes at a number of fast food restaurants. This is in your wheel house. What happens to the Unemployment Rate and the economy over the next couple of quarters if we increase the minimum wage or as some of the strikers, one, a double of the minimum wage. The biggest problem we have had in this country over the last three decades is that wages have failed to keep pace with productivity growth, with profit growth, with sales, particularly at the low end. President obama proposed raising the minimum wage to 9 an hour. Right now the minimum wage is lower than it was when Ronald Reagan came to office in real terms. Studies have shown that when the minimum wage goes up, modest amount, like the president has proposed, low wage workers are better off, gives them more spending power, and we dont see adverse effects when it comes to jobs. Alan, if we ask you about this tomorrow, when youre no longer working with the white house, will the answer be different . It will be the exactly the same as it has been all along. What about the impact of obama care. People are parsing through the jobs report that we just got this morning and while the overall share of people working part time because theyre forced to, because there are no full time jobs out there is roughly the same, there are signs that there are structural changes in the nature of the labor force. Is it something youre worried about and what do you think the white house can do if anything to solve it. Do you think obama care is part of the problem . I think if you step back and look at the impact of the Affordable Care act on the economy, so far it has been positive. We have seen the slowest growth in Health Care Costs that we have seen in 50 years. And employers are seeing Slower Growth in Health Insurance premiums, especially small and medium sized employers. The total effects of the Health Care Act i think will be beneficial for employs and for employees. Dr. Krueger, the president has been on the road the last couple of weeks talking about, among other things, the wealth gap in this country. We know what wages did in this last month. We know conversely what the stock market has done. Does the white house begrudge the progress . I think the stock market is a reflection of the progress we made in the recovery. The president ran for office to begin with because he wanted to see a Better Bargain for the middle class. If you go back to the original speech he gave in illinois and the one he gave two weeks ago, it is remarkably consistent in his goals and objectives, and the president is going to continue to press the case for Better Bargain for the middle class, and he has an ambitious agenda, some of which he can implement on his own and some of which hell need cooperation from congress and hes also going to use the bully pulpit and pull together business leaders, civic organizations, to do what we can to support the middle class and provide more ladders of opportunity for people to get into the middle class because quite frankly thats who struggled over the last few decades. Alan, i was going to say we want to remind people that the debt limit is coming up, an issue raised right off the bat there. Something you likened to the effects of a sharknado. Take a listen to those who havent seen this. I was thinking about this scifi movie that you probably saw, sharknado, where you have this tornado which brings sharks and they land on peoples heads. I think if we cross the debt limit, it would be worse for the financial sector. Worse than a sharknado. Thats the first time we have heard that reference come out of the white house. It is unthinkable, like that movie is unthinkable. I was at treasury during past fights over the debt limit, i tell you, it is just wrong for congress to play russian roulettele with the u. S. Economy, with the full faith and credit of the u. S. Dollar. We shouldnt be a deadbeat nation. We should pay the bills that congress has already rung up. Finally, i assume it is a scifi movie, a network owned by our parent company. You have seen the film, yes . Ive seen parts of it on cnn. Thats enough. Well take it. Dr. Krueger, always a pleasure having you on. Look forward to talking to you a lot more in your next chapter. Thanks so much. Alan krueger with the council of economic advisers. Lets get to bob pisani, see what is moving on the floor, the dow down 61. Modest declines, energy industrials. A lot of people were hoping to do that, aflon, opened 26. Thats a great number. 20 was the price for that. So this is an oil and Gas Exploration company. Texas, hot area, nice little ipo we have here today. Certainly good news considering the disappointment from the Energy Companies we have seen. The debate down here is whether or not these numbers might be better enough, just good enough for the fed to taper. Im surprised i dont think they will. A lot of people think the numbers may be just good enough for them to go ahead and do it considering we got europes calmer, china calmer, im surprised but that seems to be the feeling now. Where are we for the stock market right now . Here is a couple of points here that we were talking about this morning here. Monetary policy will stay accommodative. We may argue when the taper will begin, folks. But the end is a long way off, and the fed is raising rates, fed raising rates even further off than that. Macro environment is quiet now with europe at least quiet. China quiet for the moment. Earnings fair, not great. The corporate Balance Sheets are strong. Valuations not stretched. A lot of people are arguing that with these facts it still stocks over bonds. Thats where were at right now. This is the third Big Oil Company that is disappointed. Exxon, Royal Dutch Shell and now chevron. You can blame it all you want on downstream, on problems with shutting refineries or misses on that level. But bottom line is big oil is having a lot of trouble growing because they eat their seed corn. One analyst put it simply to me yesterday, exxon puts out 4 Million Barrels a day. 6 is lost every year. Thats 240,000 barrels. They have got to replace just to stay even. It is harder to find those 240,000 barrels a day. Thats the problem here. A little bit of good news. Aflon opening somewhere around 26, 6 above its ipo price. Bob pisani, thank you. The dollar now some big move for both of these. Rick santelli. Big moves in a big number. 240,000 people not counted as unemployed anymore. If i look at 263 yield in ten, definitely. It is 11 basis points lower than we were before the number. We settle it at 256 last week. So the march goes on as you can see on the intraday twoday and especially the chart going back to june 20th of this year. Really doesnt change the complexion. If you want to be technical here, any kind of yield close for the week, and weekly closes are a higher priority than daily closes, anything above 261 probably keeps the momentum to the down side of price and upside in yield. Lets switch gears, maybe a better indicator. 5s to 10s, steepening. 123. The market goes up or the market goes down, this steepening trade is in tact. If you open the chart up to june of 2011, you could see we are really quickly closing in on a level of wideness on that spread we havent seen in close to two years. Whether you look at the euro versus the dollar or flip it around, the dollar versus the yen, in either case, this number wasnt good for the dollar, Interest Rates down, dollar down. But we still see a subsequential move of higher rates that at least at this point in the trading session remains in tact. Carl, back to you. Thanks so much, rick. To Mary Thompson at headquarters, breaking news this time on apple. The department of justice as well as 33 state attorneys general proposing a remedy for the recent ebook price fixing case against apple. Essentially this needs to be approved by a federal judge, but if it is approved, this is what the proposal would require. It would require apple to end agreements with five publishers that were part of that ebook price fixing conspiracy, which include harper collins, mcmillan, penguin and simon and shuster. The remedy would start apple for five years from entering into any new ebook distribution contracts, restraining apple from competing on price. In addition, apple would be required to let competitors like amazon and barnes and noble. Com to help consumers shop for a better price with ebooks. It would require an external monitor. This needs to be approved by a federal judge. The doj and 33 states attorneys general proposing this remedy in that ebook price fixing case. David, back to you. Thank you very much, Mary Thompson. Microphone always helps. Lets talk viacom, as some would say viacom, the greatest company in the world. Actually did say that philippe du monde is the wisest man he knows on the Conference Call this morning. And, by the way, that being born out at least today with the stock up over 7 . There is philippe. The wisest man i know. There he is. Philippe du monde, 7. 2 is the rise right now and the stock price after reporting better than expected results. The focus for investors is both on domestic ad sales up 6 , that was not expected, in fact, they were looking for closer than a 3 rise and you had a big buyback increase. Theyre going to 20 billion from 10 billion. Theyre buying 2 billion, almost right away, additional 2 billion worth of shares in the next several months. What is important is the leverage ratio at the company, to a conversation were having earlier is going up at this company, to what is the prerecession levels of three times. Theyre around 2. 75 turns now, going up to three turns of leverage, which says theyre comfortable keeping a higher debt level at the company to continue to fund the buybacks. As we have said so many times, buybacks have been one of the key engines in terms of the Media Entertainment sector, in terms of fueling the stock price rises that they continue to shrink their market cap, their caps overall, their number of shares outstanding and therefore, of course, help the overall earnings per share that theyre dividing that over. Thats viacom this morning. The big buyback certainly helping fuel that. And what were good numbers particularly in the key metric of domestic advertising. Cable vision, it is continued vague talk, consolidation, it is actually up this evening after reporting what was not a great quarter. For cable vision, if you think about it in a way, june 30th, what happens in june, they turn the cable on. And so there is a seasonal factor, usually for cable vision, yes, long island is their key territory, where they actually see some growth. They didnt see it this quarter. Well see what that portends, but investors not unhappy with the quarter at this point. There is also this general sense of will there be consolidation and will cable vision, for the first time ever, actually participate in it as a seller. I have no idea what theyre thinking. Youll be contributing to those ratings in a few hours. Yes, indeed. I hope to. When we come back, a live and exclusive interview with jeff weiner. Stock is up 100 so far this year. Question is, do you make an investment connection now . And as we go to break, take a look at this mornings early movers. announcer at scottrade, our clients trade and invest exactly how they want. With scottrades online banking, i get one view of my bank and brokerage accounts with one login. To easily move my money when i need to. Plus, when i call my local scottrade office, i can talk to someone who knows how i trade. Because i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. 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To give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because now more than ever, the future belongs to those who challenge the present. First day of my life by bright eyes youre not just looking for a house. Youre looking for a place for your life to happen. Wreck back. Look at shares of linkedin, up 6. 8 today, rallying after reporting strong earnings yesterday after the close. New all time highs for the stock which is up about 350 since the ipo. Joining us now with more is ken sensen, managing director at evercore. Ken, good morning. Good morning, thank you. Dan greenhaus made the point, the pe ratio is off the chart. So it makes the valuation even higher. High can you justify that . You look at growth, you see acceleration among the user metrics, you talk about the market and the consumer enterprise. Youre in an investment phase still. You really look beyond, i think, just sort of pe story and really investors are willing, i think we are, willing to look at on the basis of revenues. In that case, what do you see happening with Revenue Growth at this company. What are they doing right . One is user membership is accelerating, engagement is accelerating. Theyre pushing into newer markets, sponsored update ads, similar to facebook. Thats going well. And stands to be a big opportunity. If you look at beyond hiring solutions, look at sales force, and other areas, that stands to be a big opportunity for them as well. It is funny, a lot of people might have a linkedin in account that sits there dormant, may ignore emails or check in on it every now and then but would be surprised to know how well financially this company is doing. Is that because of a lot of what happens isnt so much with the consumer but on the b to b side. Some of it. It also has a lot to do with the opt mization and putting people together or putting products in front of people, whether it is ads or it is paid services that linkedin in offers or jobs that ultimately, you know, are working for marketers. And i think, you know, and recruiters. So i think a lot of that is showing up in the results now, but as you look at the network and the fact that people continue to update their pages more and more, spend nor timore on the site, membership growth is accelerating, i think the company can go into areas like analytics, you know, as i said before, sales force automation, and i think that, you know, youre already starting to see those results, you know, be reflected in terms of the revenue lines, but still i think you have a little bit of a way in terms of profitability. Ken, real quick, a second left. Mobile is a big story this earnings season, google or facebook. Unique visitors to the site went up to 31 from 22 coming from mobile. Is that a particular area of excitement for the company and where do they go in that regard . I think certainly, but, you know, mobile also represents a little bit of a transition for them within their marketing line. You can look at growth now for linkedin in, under 60 and i think facebooks advertising growth grew a little over 60 in the quarter. Part of that is linkedin is going through a transition from display ads on desktop to sponsored update ads on desktop and mobile. And theyre just sort of the beginning of the transition. A lot of engagement is on mobile, growing double year on year. Their desktop is still growing, but i think it represents a big opportunity for them to expand the montiization. Sount ken, thanks very much morning. Have a great weekend. Dont forget our interview with jeff weiner coming up later on in the program. Squawk on the street continues after a short break. Ale announc. Time to have new experiences with a familiar keyboard. To update our status without opening an app. To have all our messages in one place. To browse. And share. Faster than ever. Its time to do everything better than before. The new blackberry q10. Its time. [ male announcer ] you wait all year for summer. This summer was definitely worth the wait. Summers best event from cadillac. Let summer try and pass you by. Lease this allnew cadillac ats or purchase for 0 apr for 60 months. Come in now for the best offers of the model year. Busy morning. Jobs number, big headline. Dan, thanks for coming in. Good weekend to you. Thank you. Lets get to simon hobs, see whats coming up. In the sorry, carl, in the next hour of the program, jan hstzius will talk jobs. We will give you a look at the new moto x. The question is, of motorola and google, who is zooming who . Thats in the second hour of squawk on the street. [ male ] these days, a Small Business can save by sharing. Like carpools. Polly wants to know if we can pick her up. 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Mike Mike Mike Mike mike. What day is it mike . Ha ha ha ha ha ha leslie, guess what today is . Its hump day. Whoot whoot ronny, how happy are folks who save hundreds of dollars switching to geico . Id say happier than a camel on wednesday. Hump day yay get happy. Get geico. Fifteen minutes could save you fifteen percent or more. Welcome back to squawk on the street. June factory orders improve 1. 5 . Were expecting a number closer to 2. 5 . However, however, last month originally to 2. 1, added. 9 to an even 3 . You can split it either way. I guess the average is close to the same, but subsequentially a little weaker on factory orders. Yields have slipped a bit, of course, due to the weak employment report. But yields are still up on the week. Carl, back to you. All right, thanks a lot, Rick Santelli in chicago. David . Lets give you the latest on dell, of course. You can look at those shares. They are actually up about 5 , of course, investors reacting to the news that we got right before the opening bell, that we shared with you earlier in the morning. That michael dell, silver lake and the special committee of dells board of directors reached a new deal for the purchase of the computermaker that calls for a 13. 75 cash payment, a special dividend at close of 13 cents a share and the assurance that the 8 cents a share regular Quarterly Dividend will be paid by the company. The record date for this has been moved to august 12th. The vote on this new deal will take place september 12th, and dont forget, it still wont close, im told, until most likely to be potentially as late as october. You continue to see a spread in the share to that overall 1388 or even 13. 96 price when you include the eight cent regular dividend. All of this, of course, will arrive after torturous negotiations, very windy, and very windy and actually ended up with an interesting twist that i want to share with you now. A new development in this story, namely that michael dell is funding the special dividend out of his own pocket, that silver lake, they did go best and time, they could say, in fact, at 13. 75 a share. Mr. Dell is going to accept what im told by sources close to the situation is a lower valuation on the 16 on the shares that hes rolling into the deal, hence an effect funding that 13 cent dividend by accepting that lower valuation. So for silver lake and egon durbin, facing great pressure from his partners at the firm not to raise, not to have to put in a penny more, they are not going to put in a penny more other than 13. 75 together with michael dell. The remaining 13 cent special dividend being funded by mr. Dell himself. All of this, of course, done to get a change in the voting standard from the special committee, which they did, allowing it to be a majority of shows shares voted and that is expected to carry the day when that vote takes place on september 12th. It does appear we are at an end, of course. We have yet to hear from carl icahn, should be waking up shortly and so perhaps we will hear some. Early, only 10 00 on the east coast, right . Yes, true. Thanks, david. Back to the jobs number today, senior economics reporter Steve Liesman breaking it all down for us. What did you think . I thought it was weak. What im picking up from the street, carl, the reaction is most disappointing part of the report is that it is not decisive on what the Federal Reserve will do in september. Strong report would have sealed the deal on that taper or reduction in purchases by the fed. A weak report would have taken it off the table. But this was neither, really. Take a look. 162 was the number. We had a 183 estimate. People were hoping for 200. So it comes in, the trend is still around 190. Thats okay. Thats pretty strong. Then the Unemployment Rate ticks down by. 2. Without the strong payroll growth, people are a little more circumspect or a little bit cynical about the strength of the job market. The average Hourly Earnings ticking down. Here is some of the commentary we get. Barclay saying for policymakers, the rules nothing in or out. Mizzou says it will leave the taper story in play until the next jobs number. Thats great. Bmo saying it was steady, but unremarkable progress for the jobs market. And jeffrey saying not going to encourage the fed to prerhee duce t reduce the pace of purchases. We put some numbers together here. Full time growth, depends when you count from. In the july report, full time growth 220,000. Part time, 731. A lot of the growth year to date was part time. But if you count december 2011, you see all the growth has been full time. So it is a matter of when you start counting from. The share of part time work as a percentage of the full time or total employment really not very much change. So a lot of volatility in that number of the early days yet, guys, to make the conclusion that obama care is resulting in more part time hiring. Depends when you count from a lot of volatility in the number and no big shift in the percentage of part time workers as percentage of the total. Can i just pick it up. I think for what it is worth for my point to make here would be that the director to be clear on what the direction is overall to the jobs market, and that is that employment growth is clearly slowing down. If you look at now the revisions and what we got today over the last three months, youre increasingly tracking below the 12month average of job creation of 189,000. And that direction must be worrying surely to the Federal Reserve. That slowing of growth in the economy. How much slowing are you actually talking about . Down 20k or 10k or whatever from that 12month trend, were talking about what is happening to 130, 133 million workers, okay . And plus or minus 20, i dont think it is definitive enough to make big policy on. Okay. Just i mean, if we do the figures, thats what the figures say. I dont disagree with your figures. I disagree with your conclusion, the policy conclusion from your figures, governor holmes. Okay. Lets continue the debate. Steve liesman, thank you very much this morning. Markets are seeing red after the jobs report. Lets bring in but white with lpl financial. Good morning. You heard simon and steve going back and forth a little bit here. Should we be drawing conclusions from this report that the pace of job creation is slowing down . Probably not. I think simon has a point, the point where hes missing the point here is if you look at on balance, the overall Economic Data stream has certainly improved f you look at this week alone, our jobless claims numbers are low for this cycle. Our ism manufacturing numbers are high for the cycle. If you look at the stream over the last three weeks, were having a slow and steady improvement in the u. S. Economy. It is bothersome were not creating as many jobs as we would like to. That will start to improve, certainly with an ism in the 54 range. That will demand more jobs creation. But i think in general the trend hasnt changed and i think it doesnt change with september taper. What about you, burt . Well, part of it is about the number of jobs. The other part is the quality of the jobs. You know, i think steve talked about the part time full time. The last four months we have created 4. 2 part time jobs for every one fulltime job. That trend is not going in a good direction. You nix that with the sequester and what you end up with is lower average earnings, lower average workweek and thats not a good trend. On the flip side, you have good stuff. Manufacturing, first time positive since february and then you have mining continues to do well and just illustrates how real this Energy Renaissance is. If im hearing you correctly, what youre saying is we do have a forward trend in place, just you dont like what that trend is. Well, yeah, the trend is definitely were adding jobs. I think were adding jobs at a rate, at a quantity that ends up to be where the fed can taper in the fall. I just dont like the quality. Exactly, exactly. The quality what about that point then, what about the idea that were actually see something job creation here, but that, you know, we would rather see perhaps a slower pace of Higher Quality positions . I think you have to what you have to do is make the assumption and thats what were doing here, part time jobs never turn into full time jobs and part time jobs arent being caused by obama care,er that being caused by the seasonality of how many jobs were created and things that are temporary, whether in consumer lets remember where the jobs are. The big amount of those jobs are in travel and leisure, the biggest place were seeing jobs being added is in restaurants and in bars, right . Those arent the full time jobs that we need. Let me flush that out. Over 2. 2 million jobs we have created over the last 12 months, one third of them are in retail, food and drinking places. I want to just pick up the point you made about manufacturing. On the Strong Manufacturing data. Im just looking at the figures and having a conversation about the figures. I wish we were in a great position, but as the job is to look at the figures, in fact, what they say, manufacturing employment was essentially unchanged in july, and has changed little on net over the last 12 months. The idea that there is a manufacturing renaissance in this country is simply not born out by the figures that the government is giving us. Thats completely true, simon, if you look at the last 12 months versus what was reported in july and how the trend reports for the future. If youre talking about manufacturing, whether it is it has to do with what is going on in the energy industry, which i think is booming and will continue to boom and be a hard thing to argue against or manufacturing for the first time in july and starts trending better toward the end of the year. If we look in the rear view mirror and say it has been lackluster and disappointing, i think youre correct. I think things turn and this is the turning point. Youre seeing the trend that schaaping here. What do you do . Do you acknowledge things are weak and so keep people defensively positioned or look at other data which has been stronger and hope the fed stays in the game and the market so what is the outcome here then . We think the fed is going to taper. Theyre looking for an excuse to taper and given the fact that youve got, you know, darn close to 200,000 jobs over the last year per month, this is going to change that trend. We think they taper. With that, we think that really stocks are the better place to be here. On a real basis, yields rise, it is tough to have your money in bonds. We think thats going to be a tough road over the next year or two. We also think that cash is tough on a real basis as well. We think that staying here in the United States, having good names, staying domestically, maybe some small cap names, some cyclicals are an okay place to be. In a word, what is your strategy here . Defense trading at 20 times, i think the rotation continues to balance this year into next. All right. Great discussion. Thank you very much for your time this morning. Simon . Coming up on the program, Goldman Sachs chief economist will join us. He too is disappointed by the jobs number that came through today lower than even they were expecting. Plus, linkedin ceo jeff weiner will join us later on. Squawk on the street will be right back. In todays markets, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Get on board for better sleep. Its sleep trains interestfree for 3 event get 3 years interestfree financing on beautyrest black, stearns foster, serta icomfort, even tempurpedic. Plus, get free delivery and sleep trains 100day low price guarantee. Youll never find an Interest Rate lower than sleep trains interestfree for 3 event, on now superior service, best selection, lowest price, guaranteed sleep train your ticket to a better nights sleep shares of aig surging today as the company reinstates its Quarterly Dividend and announces a share buyback. Mary thompson is back at hq with the details a trade that is a favorite, mary, of many hedge fund managers. Over to you. This dividend is a significant milestone for the insurer. A massive government bailout during the financial crisis required suspension in 2008. Its reinstatement shows the firms renewed financial health. Yesterday on the closing bell, the firms ceo also spoke about the firms Aircraft Leasing business. A 4. 8 billion deal aig struck with the Chinese Consortium to sell it has been plagued by delays, so aig is now looking to take the company public. Were going to proceed with an ipo and so this is something were working towards. As we proceed with the ipo through august and into september, my guess would be if we begin to see the markets are ready for us, get a good valuation on the company, we will drop the chinese offer and then move right to an ipo. On a Conference Call, he added details saying theyll look to sell a 51 stake in the ipo the company adding the size of the stake sold will depend on Market Conditions and investor interest. The sale is still possible, but he noted the complicated deal with a number of different parties involved who have already missed past deadlines. If they come through with the money, the deal could go through. Aig plans for the ipo in the fall. Executives said there is still a deposit on it, and the firm will pursue its right to that deposit if the deal falls through. They declined to elaborate. Carl, back you to. Mary, big story today. Thank you for that. Mary thompson at hq. Up next, jobs friday. Also a big day for earnings. The earnings squad will be here after the break. Talk about how to play all of todays results when we come right back. [ male announcer ] come to the lexus golden opportunity sales event and choose from one of five lexus hybrids thats right for you, including the lexus es and ct hybrids. This is the pursuit of perfection. announcer at scottrade, our cexactly how they want. T with scottrades online banking, i get one view of my bank and brokerage accounts with one login. To easily move my money when i need to. Plus, when i call my local scottrade office, i can talk to someone who knows how i trade. Because i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. 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Analysts were buoyed up, it is a value destination, will return to outperformance, going to the bar and grill scene. The company was guiding more for stronger comps Going Forward. Was that eps was in line. The other party is competition, cheesecake factory, chipotle. So far up this morning and up strong this year. Interesting to see how these fare into the fall. Gas prices start to hit the consumer, if we start hearing about that coming the next earnings season. Will shell out for the nachos. Speaking of dining, open table Second Quarter earnings. This is a stock that has been an outperformer this year, up 38 so far this year. Also a monster Short Interest which is at play in terms of the whipsaw action we see not just on the back of earnings, but day to day basis, we get any sort of data point from this company, 18 of shares outstanding short of this company. In terms of what were looking at in the quarter here, there are concerns that the comparisons are going to get tougher as you go and into the year, open table will get tougher and tougher and spending near term on international expansion, which will pressure margins and the valuation cannot be ignored here. One analyst points out it is trading at a 30 time fiscal year 14. Thats a long ways off here. This is a great bull bear fight. Brad saflow, one of those out there bears, points out theyre hemorrhaging restaurant klines, that continues. They made this announcement yesterday this is one where he actually i would say brad is surprised the stock is down today. There are so many people who want this thing to rally. There you go. Down 3 now. We got to talk about church and dwight, reporting Second Quarter earnings this morning and herb has been following this one for us. As i drop everything else, i think on church and dwight, what got me, you know, the company came out, reaffirmed full year guidance. What i found fascinating was they talked about a challenging business environment, Consumer Spending expected to remain weak in 2013. Some categories. This is what got me, exacerbated by increased price competition. Thats are there certain products, they make a lot of different kinds of products. Are there certain categories theyre facing more competition . I didnt say specifically, they had the ying and the yang and good, bad, Good Business and with the liquid laundry detergent, bad business with the powder. Look, i think this is the kind of thing you see. You look at procter gamble, they werent talking about this same issue, which i would expect it to see if it was more than just a Company Related issue. Lets touch on value. Fell short of expect takings here. Were seeing big moves on this one as well in todays session. It was a company that came out in the early part of the press release and said how great everything was, and then, ca boom, lower the guidance. Thats it for this morning. Were on twitter. So tweet us, earningssquad. Up next, jan hatzius reacts to the employment numbers. And about an hour into the trading session on this busy jobs friday, here are the stories were squawking about at 7 27 on the west coast and 10 27 on wall street. Chevron is the biggest decliner today falling 2 after posting weeker than expected quarterly results. The nations second Largest Oil Company citing softer Market Conditions for crude oil and refined products. A different story for nike, and pv8. The Commerce Department says factory orders rose 1. 5 in june, below forecasts, but there were revisions and it does mark a third consecutive monthly increase. A surprising drop in the jobs number today. 162 added in july. Street was looking for 185. Joining us on set, jan hatzius at Goldman Sachs. Good to have you back. Nice to be here. You say on balance, disappointing. Everybody looking for symptoms of the sequester. You say hard to see on government jobs, which was roughly unchanged, but some of the private industries affected by government were maybe. Weakness in transportation equipment, outside motor vehicles, weakness in health care. Health care was quite a weak number. It is a little more indirect, but a little harder to see how much of that is the sequester, but we are seeing something, i think. Not a massive amount, and overall on the government side, you know, clearly didnt see very much at all. Is your sense that trend will accelerate, decelerate in the months to come. It will go on, maybe go on at a low level for longer period of time, given that so far clearly there is a sequester that had less of an impact that i would have thought three or six months ago. Participation rate, how disappointing and wages too. Those key metrics, things we look to, to predict future months, not especially reassuring. I would say none of the things that we are looking at are particularly good with the exception of the head line Unemployment Rate drop. I dont think it is a disaster on any particular dimension. I dont think it necessarily changes very much for where were going. But on balance, it is disappointing. What is going on with part time employment . Is there a real change happening in this country, and is obama care part of the reason for that . Yeah, i mean, i think some change structurally in the direction of part time employment is there. There is also, of course, still a weak labor market, a lot of involuntary part of unemployment. Thats definitely an important aspect of the overall employment we have got. I wonder when it comes to the we have been having this debate all morning, to some extent for a couple of months now, is the number of jobs even as weak as it is overstated by the fact these are part time positions, Something Like that, or do you think the whole effect is getting too much attention and is a distraction . I think the broad notion that we have got a weaker labor market than the 7. 4 Unemployment Rate would suggest by itself thats extremely important. And i think thats absolutely right. And you can look to part time employment and maybe even more importantly you can look to deliver for Participation Rate, which partly is coming down for structural reasons. But in a very important part of the decline that we have seen over the last five years, i think it is cyclical. I think thats a very important consideration when you think about the policy implications and something that the fed, of course, is very well aware of and that bernanke talked about a fair bit over the past few weeks. Would you accept that since the past three months we continue to track further below the 12month moving outage, employment growth in this country is slowing . Probably not by enough to really make a strong statement about a desell ration. So i would say, you know, it is possible, of course. But there is it is true, they are going down and down, below the 12month average. So that the question is, is it of magnitude. I think impeerically the question is, you know, when you look at individual noisy jobs numbers, how much of a signal should you take away from that, and what i try to find out is basically what is the underlying reality underneath all of these noisy observations. And the underlying reality to me looks broadly stable, at a pace not particularly rapid, not making were making up ground, but not making up ground at a very rapid pace. The point is it comes at a time when they may withdraw tapering because they believe the Employment Situation is getting substantially better. Youre not telling me the Employment Situation is getting substantially better, are you in. I think it is getting better, substantially i think would be a slight stretch, which is why i think the point that bernanke made about the mix of instruments that theyre maybe getting a little less enthusiastic about qe, but want to offset whatever negative restrictive impact you might have from tapering qe further fortifying the guidance. Can i make one last point. Can we put up a chart of the tenyear yield and where we have been. This if there was a deterioration in the last two or three months, it would precisely be after the point at which bernanke started rallying the marketed by talking about the need to taper. Do you think the rise in bond rates is affecting the Employment Situation . I think probably not a lot. Although i think when you look at the construction numbers, you could probably put a small amount of weight on that. I think the to me it still seems like the lag is a little too short, so i wouldnt say it is a really major factor, but i think at the margin, if you want to look for something, you probably look at the construction numbers. You had a great call a few weeks ago. You said the 65 target would be malable, the fed would be looking to get something a little lower than that, because of the unmeasured weakness in the market. Sure enough, bernanke comes out and says that, essentially, to the press. Is that still in tact . Where do you think the number has to be before they climb off the fence . I would say that my expectation would still be they taper in september, but that they combine that tapering with a further reinforcement of the Forward Guidance either through reduction in the threshold or through making the threshold even more clearly dependent on where inflation is and where labor force is. Not a calendar not calendar guidance. I dont think theyll go to calendar guidance. Theyre glad they moved away from calendar guidance. It worked pretty well in practice. In theory, and conceptually it was never something they were enthusiastic about. But i would expect them to do the shift of the mix of instruments that bernanke talked about. Who is the best candidate to succeed bernanke . I think we have seen a lot of very strong candidates. Im a big admirer of Larry Summers and janet yellen. I think more importantly i view the economy through a similar lens, which is basically, you know, the lens that we have had a large shortage of aggregate demand with the fund rate stuck at the zero bond. Government policy, macro policy needs to be more imaginative in boosting growth. I think both summers and yellen and of course we dont know, you know, who the other candidates might be, but both summers and yellen have been very clear on that. If you were emperor or fed chief for a day or more broadly than that, what is the one Public Policy, is there one Public Policy on that if we can only just deploy it would help to dramatically improve the pace or speed or of the u. S. Economy . I would further reinforce the Forward Guidance. Forward guidance worked very well. It had a large effect on financial conditions. Youre saying the fed can still have an effect here. I think it can still have an effect. At the margin, im a little more enthusiastic about the Forward Guidance than i am about qe. I think qe had an effect, but, you know, it is still not a huge effect, and i think if you get tapering of qe, in exchange for reinforcement of the Forward Guidance, that wouldnt be a bad trade. Where is the keynesianist in you . Where is the obama in you . I think the i think on the fiscal side i certainly wouldnt want to see significant restraint. So i think were seeing clearly too much restraint this year. But we are on track, i think, for basically neutral fiscal policy Going Forward and i think you can make a very good argument for infrastructure spending. Debt ceiling in a word, will we avoid it or is that a real risk to the second half outlook . It is a risk, but i think were going to avoid it ultimately but it is a risk. Well leave it there. Jan, thank you. On jobs friday, have a great weekend. Thank you for joining us. Ahead on the program, can the moto x make waves in the smartphone wars . Well find out from someone who has seen the google motorola phone. Linkedin ceo jeff weiner is live with us for an exclusive interview following another set of blockbuster earnings. Mine was earned in djibouti, africa. 2004. Vietnam in 1972. [ all ] fort benning, georgia in 1999. [ male announcer ] usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection and because usaas commitment to serve military members, veterans, and their families is without equal. Begin your legacy, get an Auto Insurance quote. Usaa. We know what it means to serve. [ male announcer ] you wait all year for summer. This summer was definitely worth the wait. Summers best event from cadillac. Let summer try and pass you by. Lease this allnew cadillac xts for around 399 per month or purchase for 0 apr for 60 months. Come in now for the best offers of the model year. [ male announcer ] ive seen incredible things. Otherworldly things. But there are some things ive never seen before. This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. The most Free Research reports, customizable charts, powerful screening tools, and guaranteed 1second trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Welcome back to squawk on the street. Im josh lipton. Were watching Weight Watchers tanking this morning. A double whammy here. Cuts its full year forecast now, seeing 3. 55 to 3. 70. The seat wanted to see 3. 72. The ceo stepping down. Saying now is the right time to embark on something new. Been with the company some 14 years. President and coo James Chambers will step into the role as ceo. That stock down more than 19 right now. Simon, back to you. Huge move. Thank you, josh. Motorola introducing the moto x, first major new phone to be built now jointly with parent google since it acquired motorola for 12. 5 billion. But does the moto x have the x factor to help it stand out in the brutally competitive Smartphone Market . Lets ask someone who has got one, Research Manager ramon lamiss joins us this friday morning. Good morning. Have you got it with you . Right here. Check it out. Right in my hand. Do you like it . You know, ive only been playing with it for 24 hours and this has been a lot of fun to use. Now, there is going some things you have to learn about it, but altogether, you know, so far no problems. The idea the big thing is not only does it listen solely to the voice of its owner and learns what its owner voice is like, but it will, for example, from sleep mode on the other side of the room suddenly come to life when you talk to it. Have you managed to work that . I stood on the other end of my bedroom and i said to my phone, okay, google now, and it came up. I dont know if you can see that, and i can shout a report or a request at it and say, you know what is the weather going to be for today and it comes up. And it kind of hits every single request i had thus far, batting close to a thousand right now. Wow. Youre not a teenager. But what about the parent 2,000 variations in color and texture and wood look and textile look. Is that working for you . I think that will be really neat, because if you look at the Smartphone Market today, virtually everything is black, a smattering of white, a smattering of silver, but talking to a lot of my friends, i would like to have my smartphone in a different color. Granted you get cases in different colors and thats fine. Think of it this way, you can select from about 18 different colors now, and it is not too hard to imagine things like your nfl team or a picture of you and your family or the logo of your company on the back. There is a lot of great customization that will come out later on. I havent had a chance to try it yet. This is something that will be pretty happy with later on. I wonder if we have reached the saturation point where you can go for the camera, there is apple siri, maybe this google now thing attracts people. I wonder if it could be the battery life that could be a game changer. How is the battery life on this thing . What they told us, this will last you about a day on mixed usage. You put mixed usage in quotes. For me, i watched a little video, did a lot of wifi, made a few phone calls and only had to charge it once. The big test for me is what happens when i take it on the road, put it through gps, go to more remote areas and see how the battery is. Now, lets not forget, motorola knows a thing or two about making phones and battery life. Some of the phones they released in the past couple of years, they released with batteries that lasted about two days. Which, if youre a heavy Smartphone User like myself, is nice to have. I expect more improvements along the way. Lets cut to the chase, will be priced at 199, when all five Major Telecom providers in this country take it over the next month or so. Do you think in an environment where so many people are locked into family plans and not able to instantly upgrade, even if they wanted to, do you think it is going to gain Critical Mass . Look, it is not going to gain Critical Mass right out of the gate. Youre not going to put this up against apple or samsung who have volumes in the tens of millions every single quarter. This is going to take time. But if youre one of those not named apple or samsung, and quite precious market share out there, this is something to look at. It is not every day. You know how challenging it is to have just one model reach across all five major mobile phone operators at the same time. A massive feat, a massive agreement. Just motorola stand a chance, absolutely. Is it going to take police immediately . Not at all. Give us some time. Do you get to keep the phone now . Have you got it on loan or what happens now . Usually ill use this for probably another month or so. A sim card tucked inside. Well see how long that lasts. Usually ill either hold on to it or i got to check the contract and might have to return it. Nice. Nice to see you. Good to see you, sir. Thank you for joining us. Thank you. Ramon lamiss from idc. David faber thought he was heading off to the hamtens for the weekend. Hes magically appeared back in the studio. More details on the dell deal. No, we have new chatter out there, simon. In the cable realm. It is certainly worth at least sharing because you may have noticed at home or at the office that there has been movement in a number of the major stocks. Charter, shares up, competitor bloomberg reporting there are this is the only word they used, discussions going on between charter and cox. Cox, of course, is a private company. Controlled by said family and also others. You may recall a couple of months ago when i first reported on charters desire to try to consolidate within the cable universe and focus on Time Warner Cable that i reported if they failed there, they might try to move on to the likes of a cox. No confirmation as to whether there is anything to this. But certainly not unexpected. Separately, we have cable vision. We talked about it earlier on the show. Company having reported earnings this morning. They were not particularly strong. The metrics on subscribers which were down were expected to be up, cash flow was actually a bit ahead of expectations, but on the Conference Call apparently, cable visions executives in response to it, took a question about will you consider selling yourself, answered it in a way that at least is being construed by those who were on the call, as a bit more constructive towards the sale, lets call it, than they might have been in the past, saying were operating the company, but well rule nothing out. That enough to actually kick that stock into gear. Again, behind all of this is the known desires as ive reported a number of times, john malone, greg mafay, to try to consolidate the cable sector with large acquisitions, whether with Time Warner Cable, which has not gone anywhere in terms of getting momentum behind the deal or with others. That led to conversations among investors about whether your cable vision would consider selling as it really never has in the past, at least getting to the point where it actually signed a document to do so. Or a cox. So that at least is a bit of background behind the various stories moving some of the stocks. I should mention Time Warner Cable shares as you might expect are down. Were down rather sharply. They have come back a bit, but have been down as much as 5 . There it is. Only down 2. 8 now because, of course, were charter to move on, there is a takeover premium. And charters advisers will tell you it is 18 above the unaffected stock price. And that will come out of that stock if they do go in a different direction. Okay. Both on twc and cable vision, they tripped the Circuit Breakers. And now resumed trading. A lot of flurry of activity in the past 15 minutes. Thanks, david. To Rick Santelli in chicago with some news on trading halts and treasuries. Yeah. Ill tell you what, i guess it reminds me of if a tree falls in the forest, i certainly didnt hear it because apparently a tree fell. I was live on camera for the greatest business channel in the world, cnbc at 8 30 eastern, 8 20 to 8 40, covering the number. But apparently for just a handful of seconds, right before the 8 30 release of the july employment report, treasury futures stopped trading briefly, a circuit breaker, it is not officially confirmed by the cme, but the word is out, number of stories i talked to a number of traders, i cant tell you if it was a block trade in the futures, i cant tell you if it was a High Frequency issue, i cant tell you which platforms, but what i can tell you is there was a very brief moment where they just werent trading. And it wasnt due to a technical glitch. It was something done intentionally by the exchange. Thats my read. As im telling you, folks, i was there. The only thing i noticed monitoring the cash market was right before the number came out, i noticed an extra amount of volatility in the cash for yields were moving a lot. Markets always go subject before big numbers. Well keep you informed of any ongoing statements by the cme in regards to the story. Thank you for that. Steve liesman has some more on this as well. Steve . I did just get off the phone with the cme who confirms the halt, carl. They said that for several seconds, five seconds, Circuit Breakers kicked in, and they say this shows the market worked. They would not confirm a wire story that there was a large buy order of tenyear treasury contracts, futures, that is, ahead of the number. Followed by another bid offer that comes from a dow jones report. The cme confirms the Circuit Breakers were kicked in and they say this shows the market worked. The other thing, though, obviously we have to think about is all of the noise and that has come around issue of early rae lea release of the numbers and some people getting it early, neither the cme or the bls i called said they had any evidence at all that the number came out early. The only thing i would say is the trade that was apparently made reported by dow jones would be in the direction that the yields actually went after the number. Weaker than expected number coming in and resulting in a much lower treasury price. So somebody at 8 29 had a really good feeling about what the number was going to be, put in a large order and it appeared to kick automatic Circuit Breakers at the Circuit Breakers at the cme. A really good feeling i think is what has people so foe kused on this. Didnt this happen last month. Correct me if im wrong, but i swear it was a similar situation where we saw this pause and took a couple minutes for treasuries to react to the jobs report at that point. I dont remember that, kelly fwrairst of all, let me jump here. There are only two things you can do in the marketplace, you can buy or sell. The fact that happened to be in the direction the way the number kout, im sorry, to me lately it seems like theres pitchforks aiming towards the castle. Every number by reporters that cant spell Financial Futures seem to weigh in with all these opinions. How unusual is it i traded for 20 years before i got in this business, and markets always had big moves before big data. We called it, oh, my god, im going to change my mind and change my position. Not big enough to shut down the market. This is an extraordinary trade, right . You have to acknowledge that. Because you never had the kind see, here is the issue. Whether its university of michigan or this, the real issue that is the elephant in the room, High Frequency trade, okay . Whether people want to admit it or not. The fact of the matter is, is that when one entity in the blink of an eye can take or sell or do humongous amounts of volume, that is the issue. It really never existed other than the last several years. It needs to be dealt with because at the epicenter of all these stories, thats the part that we need to study. Well, and thats what the Circuit Breakers are meant to do, right, is get at some of the issues. Right. Is that the right kind of move then or should people be its the only move they can have. To come slamming down when people are trying to make a trade. I give the exchange supreme credit in this regard because until somebody on the regulatory side, and believe me im not a fan of regulation, but just like derivatives that were in the ether world before the credit crisis, off radar or off Balance Sheet, this is the only way the exchange could deal with it until we get regulators to sit down and acknowledge that High Frequency trading, whether you like it or not, is a gamechanger, and when somebody could run the buffet table before you can even look at the dessert, it needs to be dealt with. Steve, finally . I think thats interesting. It sounds to me like what rick is propose something the notion of shutting down the exchange or somehow limiting the amount of trade that can go on in the minutes before an important release comes out. I think theres a lot of talk about whether or not theres any actual economic value to that liquidity provided in the seconds before the data comes out. Exactly. And ive not been convinced it exists. If it exists, im all for it, but i dont see it right now. The idea that a guy can trade 2,000 futures we completely agree, steve. I am leaving the country. I am retiring nobody wants to limit traders or the markets, but in this case if it ends up creating a less perfect market, you could see a rationale for limiting the trade. It also shows you what an important issue this is. Thank you both for updating us. Still ahead, guy kawasaki will tell us why he thinks the moto x will give the iphone a run for its money. More when squawk on the street continues. [ cows moo ] [ sizzling ] more rain. [ thunder rumbles ] [ male announcer ] when the world moves. Futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with papermoney to testdrive the market. All on thinkorswim. From td ameritrade. Im gonna have to ask you to power down your little word game. I think your friends will understand. Oh. No, its actually my geico app. See . I just uh paid my bill. Did you really . From the plane . Yeah, i can manage my policy, get roadside assistance, pretty much access geico 24 7. Sounds a little too good to be true sir. Ill believe that when pigs fly. Ok, did she seriously just say that . Geico. Just a click away with our free mobile app. We just heard from santelli in chicago. Now its time for the Santelli Exchange with charles biedermann. I always like it when we have chuck bed idermaniedermann as o. Betelgeuse, betelgeuse, betelgeuse. Its show time. Welcome to the show. Thank you. I had all your notes, i threw them up in the air, okay . Lets talk. You saw the report, you saw, of course, that it really is more of an issue between job splitting full and part time. Its an issue about we just dont count people anymore so the Unemployment Rate drops. We know ben bernanke right now in some room is biting his nails because 7. 4 is not representative of the issues hes looking for from his perspective to address tapering. Can you comment on all of that . Well, since early 2011 each month weve averaged between 160,000 and 180,000 new jobs for two years in a row. Thats no growth. Thats flat and most of those jobs as you said are low paying jobs parttime or whatever. Withheld income and employment taxes which we track says that wages and salaries have been relatively flat, about 3 , and recently posthike in Mortgage Rates, wage and salary growth is plummeting yearoveryear. That says that there are less new jobs being created than being reported. The bls number was from the week ending friday july 12th, early in the july. Higher Mortgage Rates started in march. It took a month for the impact to be felt. The slow you know, lower Mortgage Rates boosted the economy first part of the year, late last year, higher Mortgage Rates are hurting. A 1 boost in mortgage from 3. 5 to 4. 5 is a 29 increase in Monthly Interest payment on a 100,000 mortgage, per 100,000. Thats taking people, killing deals, and taking new deals off the table. Theres a slowdown thats not being recorded yet. Is that enough . Chuck, when we talk about stimulus, and, you know, we were talking about it a lot lately because Larry Summers is supposedly on the short list and he was one of the architects, here is the way i look at it. Tell me if im looking at it correct. I see 2. 6 trillion with a t in money market funds. Over the last dozen years that return if you look at it from a threemonth bill standpoint is 31 , the s p is 35 . Why do i say that . Because theres 2. 6 in stimulus. We need to get it off and into the economy. Dont you think if the fed just shut down all the management that that might happen more quickly . Well, maybe. You know, its like at 1. 5 on a 16. 5 trillion listen, chuck, im out of time. But im telling you what, were going to put you on dotcom at some point next week and have a tenminute discussion on this so viewers can get a flavor. Thanks for taking the time today, sir. Youre welcome. Carl, back to you. Rick, thank you so much for that. Dow was trying to repair some of the losses in the middle of the session right around 10 00 a. M. Eastern time. We got as high as minus say 20plus points or so. Now down almost 60 points. Again, as the market sort of wrestles with what the jobs number told us today, what factory orders told us. That was also a miss. Some of the real moves have been in the tenyear, which is interesting as well because were having this discussion about whether the fed in introducing Forward Guidance might try to talk markets and defend inflation from the lower end. Dow needs to hold 15558 to stay positive for the sixth week. If youre just joining us we were going to go to tape, instead well go straight to the 11. Well talk some europe. We are live at post 9 at the new york stock exchange. Lets get a check on the markets. Dow down some 54 points. S p is back to 1702. Still holding above 1700. And the nasdaq is down five points. Shares of aig rallying. The company will start paying a common stock dividend for First Time Since the crisis. Earnings beat expectations, profit up 17 . And toyotas First Company profits surged 94 . They sold fewer cars yearoveryear but reported a big jump in overall revenue and net profit and their Production Target for the year, 10. 1 million cars. It would be an industry record if it sticks. Okay. One to watch. Now, one of the first big acts following googles is 12. 5 billion acquisition of motorola, google unveiling its first phone. In our road map, the brand new moto x. Well talk to one of the biggest names in tech, guy kawasaki to find out what the new phone is all about. Plus, more viewers logging onto linkedin. The stock way up this morning after a strong Earnings Report and a huge increase in membership. Well talk to the companys ceo a little bit later. And forget Larry Summers, forget janet yellen, who we really need is chuck norris . Well explain it in a bit. Lets take a look at linkedin today. A stock that has increased literally 100 , actually now 105 for the yeartodate. Its been a steady climb higher over and over. Premarket it was around 233, closed at 213 yesterday but thats a nice gain. Well be talking to jeff wiener in a few moments. Lets go to hampton pearson, i believe, with breaking news. Hamptop . Carl, you know we reported that in the last 24 hours about some embassies being closed worldwide, heightened security threat, if you will, over the weekend, an abundance of caution. Now the state department has put out what amounts to a Worldwide Travel alert for americans. The department of state alerts u. S. Citizens to the continued potential for terrorism attacks, particularly in the middle east and north africa, possibly occurring or emanating from the arabian peninsula. Current information says an Al Qaeda Affiliated organization continues to plan terrorist attacks both in the region and beyond and that they may focus efforts to conduct attacks in the period between now and the end of august. The travel alert expires on august 31st, 2013. So, again, this is new, a Worldwide Travel alert, if you will, for u. S. Citizens traveling abroad. Thats the latest update from the state department. And hampton, can you give a sense of how unusual this is . Because to put out a Worldwide Travel alert, letting people interpret that however they might and letting it stand for a month seems extraordinarily serious. Well, again, i cant, you know, quantify that, but, yes, the news is the news, and the travel alert speaks for itself, that it is so broad and the specific nature of the kind of threat that theyre also talking about, it goes on in this particular memo, terrorists may elect to use a variety of means and weapons and target both official and private interests, u. S. Citizens are reminded of the potential for terrorists to attack Public Transportation systems and other tourist infrastructure. Terrorists have targeted and attacked subway systems as well aviation and Maritime Systems in the past. U. S. Citizens it says should take every precaution and be aware of their surroundings and adapt appropriately. So quite detailed travel alert for the entire month of august. Detailed and at the same time leaving people a lot of room to interpret that however they see fit. Hampton, thank you very much for that. Some big news on dell breaking this morning. Michael dell and silver lake reaching a new buyout agreement. Jackie deangelis joins us from round rock, texas, with more. Weve seen this play out before, twice before. Now it seems third time is not the charm. Hey, good morning, kelly. We thought three times might be a charm. It wasnt exactly this morning. But shareholders here really mulling over the details of this new proposal trying to decide if it is, in fact, in their best interests. The reaction to the adjournment today a little confuse, some happiness, some anger, really depending on who you spoke to. Those who are in the dell camp said they felt that with the changes in the proposal that we saw this morning, this is a deal that will pass in september. Lets recap some of those points, as you mentioned. Increase in the share price. 13. 75 a share. Also looking at a special dividend, 13 cents a share and a q3 guaranteed payment of 8 cents a share. Key dates to note, they reset the record date to august 13th. The new Shareholder Meeting will be on september 12th, and the annual meeting as well scheduled for october 17th. But perhaps the most key change is the fact that there was a change in the voting standard, and that was something that michael dell had long been lobbying for. The abstentions will no longer be counted against his proposal. Meantime, you had reps for icon and southeastern here. They were prepared to speak but they did not have the opportunity. Those in the icahn camp said they do think there should be a new board of directors, they think shareholders should have a choice in this matter. With the annual meeting date set for october and the vote set for department, if we do see it pass on september 12th, we are probably looking at a q3 close here for this deal. Kelly . All right, Jackie Deangelis in texas, thank you. He was once responsible for marketing apples mac in 1984 and now hes backing googles new phone the mow ftto x. Guy kawasaki joins us. Hes the managing director of garage technology ventures, a Venture Capital firm that makes direct investments in early stage tech companies. Guy, its a pleasure to have you on. Good morning to you. Thank you. Thank you. Good morning to you also. A lot of discussion about this phone. Big piece in wired. Steven levy weighing in saying this is what weve all been waiting for, that we finally have the google phone. I assume you agree. Yes, it is a very, very interesting phone. I have one here in my hand. I think the three key points about the phone is its very responsive. Things like if you want to take a picture, you just flick your wrist like this and it boots the camera. You can point anywhere on the screen and it will take a picture. It is also a very pure Google Android experience. And, finally, one of the most easy things to evangelize and he can change is the level of personalization. You can get it in 18 different colors with 7 different colored accents. You go online, pick out your phone, your colors. You can pick out how you can have the back engraved with your name or your address, and you send it off and about four days later youll get a phone totally customized for you. Guy, obviously a lot of bells and whistles. It will be interesting to see how consumers respond. Some of the skeptics though say the market has changed a great degree since the days of the droid and the razor. Are we at a level of saturation where even this level of inknow vaths is not enough to get that replacement cycle going . Well, were at a very high level of competition between apple and samsung and motorola, but from looking at it as a glass half full, it means that consumers get a lot more choices and a lot more competition for their dollars. All things said, those consumers do benefit from this kind of competition. It is a very, very tough market, and you have to innovate. You have to have these kinds of features and these kinds of new benefits for people to be competitive. Thats just how it is. Do you think the street needs to Pay Attention to sales, unit sales, the way we Pay Attention to sales of a blackberry or a samsung . Or is this more about how google is going to use the hardware to monetize their other businesses, to get people to say, okay, google now more often and get the search metrics going . Well, its actually both. I mean, google has some very strategic reasons to have bought motorola, but at the end of the day, you know, it is how many Motorola Moto xs are sold, how many droids are sold. We live in that world so its both. Its at a high level, its very strategic for google but at a tactical level we are competing with those other manufacturers. Thats the nature of the business. Guy, i wonder if to some extent the exciting product lunch has already happened at google and it was chrome cast . Well, lets just say that google has a lot of excitement on any given day. We had chrome cast, we had the new nexus 7, and we had the moto x. Its kind of a trifecta this week. Its a good week for google. And i guess what i mean by that is i wonder if some of the innovation, the disruption is moving from the mobile phone space to some other kinds of things like a google glass, like a chrome cast where if you say maybe people are getting a little tired or arent going to turn out en masse, and again, maybe they will for the new phone, but i have heard lots and lots of people talking and saying, wait a minute, for only 35 i can get this dongle device for new and different ways to watch television. Lots of excitement. What can i say . Obviously chrome cast is a very interesting product, stick it in your hdmi and all of a sudden you have all this video coming in but you cant exactly make a phone call with it. So its different products for different uses, but the core here, i mean, the central message is exciting things are happening at google. Guy, a lot of discussion about culturally where motorola was when it was bought. People have called it the google of its day. We all remember those days. And now the process with which google has tried to googlify motorola. He had to let people go and bring in new engineers. How would you characterize that process, and is google done changing motorola . Well, google is a very innovative company. Its brought in management into motorola. Its basically revamped motorola. But i will tell you that it started with a very good company, so motorola admittedly it had too much head count for the volume it was doing, but now that head count has been pared down. Its been right sized for the kind of volume we can foreseeably do, and the key though that motorola, its history, its legacy is basically inventing cell phones, and its a pioneer. Its an engineering kind of strength company. Obviously i came from apple. Its very similar to apple. Thats one of the reasons why i was to attracted to motorola. The core is engineering, and i think in this market the core for the success of a phone is how good a phone can you make . And thats the strength. Guy, one other last sort of broader question, you know your way around Venture Capital. Were entering some interesting territory regarding valuations, especially companies that are newly public, that are highly leveraged to mobile, that maybe havent monetized it but certainly their share price doesnt reflect that. Do you think were in or approaching bubble territory on that front . That is a classic question. I have lived through a couple bubbles. Yes, i know. In my career. Yeah, every time youre in a bubble, you say, no, this isnt in a bubble. This one is for real. So youd have to refer to history and say that, you know, when you ask yourself if its a bubble, its probably a bubble. Guy, good to have you on. We could have covered a lot more but a busy day. Hope youll come back soon. All right. Remember the phone guywasaki from garage technology ventures. Some big moves during the trading week. Josh lipton is watching all that. A recap of their social stocks. Some leaders, some laggards, some doing a whole lot of nothing. Lets review them. Start with yelp surging this week. Soaring some 40 . The local listings website, its Second Quarter loss narrowed. Better than expected Revenue Growth. Also lifted its full year revenue targets. Short interest in this one, 21 . Another winner, facebook. Rising some 12 , now up around 40 since reporting earnings last week. The intraday low here, 17. 55 in september. Now back near that offering price of 38 bucks. Not always green though in this space. Groupon down about 6 this week. Groupon scheduled to report next wednesday. Street will be looking for 2 cents on revenue of 606 million which would mean year over year growth of 7 on the top line and finally theres zynga. Remember, reported earnings july 25th. Second quarter loss narrowed, but the gamemaker saying its number of daily active users fell. Zynga basically flat this week though up 30 this week. Kelly, back to you. All right, thank you, josh. A huge quarter for linkedin. Weve been talking about it all morning. The stock up 10 today after earnings came in above expectations, and we will talk exclusively to the companys ceo jeff weiner, coming up. Also, he doesnt lower Interest Rates. He roundhouse kicks them in submission. Why one economist is nominating chuck norris for the next chair. Say good night. With fidelitys options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens, and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Why one economist is nominating well, the war over who might succeed ben bernanke is heating up, janet yellen, Larry Summers, or our next guest who has another suggestion, chuck norris. Hes saying the fed needs more target, discipline, all characteristicings found in that guy. Joining us is the chief analyst lars christiansen. Great to have you on the program. Good morning. Thank you, good morning, guys. I wanted to ask you so explain to people what you mean here, which is that quite literally if the fed were run the way that you see it, anyone could be chairman. Exactly. My point is that we have far too much focus on who should run this institution rather than on what should the institution be about . What rules should it follow . What should it target. If there was a very clear target for the fed to target, for example as i have suggested nominal gdp, it would be very clear. It wouldnt really matter who would be fed chairman. It would be some suggested there should be a robot or computer running the Federal Reserve. We should define clear rules of what we want to achieve and then let the market decide on Monetary Policy. Actually, that used to be the case during the great moderation. The years of stability during the late 90s and early part of the 2000s was really a period where Monetary Policy was very rulebased. The market knew what the fed was going to do, and in that sense the market determined fed policy. The fed actually just followed the signals from the markets. So i suggest that that is what we should do, and i simplify that by having the chuck norris effect. The market determines Monetary Policy after the rule is defined. Well, and lars we should explain when the fed is talking about changing Forward Guidance or the targets on the Unemployment Rate, its doing that, trying to depersonalize the fed and make it more rules based. The argument against what youre talking about is economies evolve, things change, circumstances change, so we wouldnt necessarily have known ten years ago some of the broader barometers with regard to Financial Stability or the labor force Participation Rate. This should be taken into account or become more important today. So you can never entirely remove the Human Element of this, can you . Well, im not sure about whether you can remove the Human Element. My point is, however, we should try to move away from discretion. The Great Recession we have lived through over the last five years has been characterized by an enormous amount of central bank discretion. The Federal Reserve since the onset of the crisis being one way or the other, and now we are talking about one candidate, Larry Summers, who says he would never like to follow rules. He would like to run from one crisis to another and be a firefighter. I would suggest that instead we put out some rules, we try to follow them. Robert hetzel, who is a fed economist, has called this lean against the wind with credibility. This is what the fed actually used to have prior to the crisis. We lost that during the Great Recession because we lost track of what we were really targeting and with what instruments. You need simplicity in the instruments and clarity in the targets. And for people who want to read more about that, about what we could do to Leverage Private Prediction Markets to some extent to develop the rules you can read more about it on lars blog. We really thank you on this friday afternoon for joining us. The minutes would certainly be more interesting, ill tell you that. Then the minutes would say chuck took out a bazooka and then theres a look at linkedin, up 23 bucks. 236 now. A slow increase all day long up more than 10 . Were going to talk to jeff weiner in a few moments. Make sure you stay tuned. A lot more squawk on the street. The dow is off 46. First day of my life by bright eyes youre not just looking for a house. Youre looking for a place for your life to happen. Lets get to the cme group in chicago. Rick santelli with the Santelli Exchange. Its been an exciting morning, its been an exciting week. I guess my definition of excitement is lots of data, lots of market movement, and lots of area to carve out to try to figure out whats going on. I think obviously we know that we are not counting some of the unemployed people, thats distorting the rate. We know theres a war going on between parttime and fulltime and parttime seems to be winning. And everybody, whether its democrats, republicans, independents, whether its john boehner or president barack obama, everybody wants the public, those unemployed that want to work, to have jobs. And they want them to have wages that they can live on and have opportunities. Everybody agrees with that. Its not only the moral high ground, its the only ground. But yet there is a huge philosophical gap on how to accomplish it. And never have i seen a Little Exchange that showcased that notion more than i did this morning on squawk box. I will set it up real quick. Dan greenhouse basically asked the Outgoing White House head of the Economic Council of visors, mr. Kruger, allen kruger, a question. He said, listen, theres strikes at fast food restaurants. What do you think the impact would be on the Unemployment Rate and the economy should we raise the minimum wage and here was there krugers answer. Roll the tape. The biggest problem weve had in this country over the last few decades is that wages have failed to keep pace with productivity growth, with profit growth, with sales, particularly at the low end. President obama proposed raising the minimum wage to 9 an hour. Right now the minimum wage is lower than it was when Ronald Reagan came to office in real terms. Studies have shown that when the minimum wage goes up a modest amount like the president has proposed, low wage workers are better off. It gives them more spending power and we dont see adverse affe effects when it comes to job. Why is that important . He never said what would happen to the Unemployment Rate or the economy. These jobs are meant to be stepping stones. If they turn into careers we have an issue we need to deal with but were not. Were ignoring it. Carl, back to you. Thank you very much, Rick Santelli. Social is back in style. Huge earnings beat for linkedin. The stock is rallying today. We will get reaction from the companys ceo. Our exclusive interview coming up in just a few minutes. Also, the bell is about to sound across europe. Just a couple minutes left in the trading session. Well get you details and the impact it will have back here at home in a few. [ kitt ] you know whats impressive . A talking car. But ill tell you what impresses me. A talking train. This ge locomotive can tell you exactly where it is, what its carrying, while using less fuel. Delivering whatever the world needs, when it needs it. After all, whats the point of talking if you dont have something important to say . To appreciate our powerful, easytouse platform. No, thank you. We know youre always looking for the best fill price. And walk limit automatically tries to find it for you. Just set your start and end price. And let it do its thing. Wow, more fan mail. Hey ray, my uncle wanted to say thanks for idea hub. O well tell him i said youre welcome. He loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. Yea, and these ideas are across the board bullish, bearish and neutral. I think you need a bigger desk, pal. Another one . Traders love our trading patterns, now with options patterns. Whats not to love . They see what others are trading like the days top 10 options trades by volume and get ideas yea i have an idea how about trading that in for a salad . [ male announcer ] so come trade at the place thats all about options and futures. Optionsxpress. Open an account today and get a 150 amazon. Com gift card when you call 18882800154 now. Optionsxpress by charles schwab. If youre wondering where carl icahn is in this whole dell news, hes now officially out with a statement on twitter. Quote, we are pleased to have won another battle in the dell war, but the war itself is far from over. More to follow. Man does a good tease. Yes, yes, he always does. Just a few minutes ago, carl breaking that news on twitter. Lets bring in simon hobbs as we count you down to the close. Bell is just ringing there across europe. What are we seeing . You can see its a mixed picture today. I just want to simplify this report and point out why theres loads of corporate earnings, loads of things i could say to you. I want to point out simply this chart, if we may bring it up on the screen here. Its the fact that during the course of this week while were flat in the United States on, for example, the dow, european equities have gained substantially. Theyre up about 2 . So european equities are beginning to lift because the data is stronger in europe. If you have a look at a threeyear chart, if you have a look at a threeyear chart of this is the dow, this is the European Equity market, you will see that basically europe has tracked along the flat line. My question to you is, is europe going to make up this difference with u. S. Equities and should you, therefore, be invested in european equities moving forward . Will they offer you a greater bang for your buck . Hopefully well be able to discuss it on the program, but if they are going to close that gap, that is potentially substantial gain. Obviously the jury is still out on what exactly europe is doing, but ub s for one has closed their underweight on european equities because of the better data, because they say the austerity is lessened because of better financial conditions. One more, let me mention sylvio ber lus coni, confirmed his fouryear sentence. He will probably do a year of incarceration in his own home. Word is, guys, that the Italian Government could still hold together even if hes disbarred from public office. Back to you. Simon, thank you for that. Simon hobbs. Lets get to bob pisani and see what he sees moving. Dow down 34. I think its pretty impressive were only down 34 points with this kind of disappointment. If it wasnt for chevron, another Big Oil Company disappoints, dont get me started about that, the dow would practically be headed toward positive territory. Chevron down 2 is weighing on the dow. Where is the stock market now . I started thinking about it this morning now that we have this major data point out of the way . It seems to me monitor policy is staying accommodative right now. You can argue when the taper might begin but the end of it certainly a long way off. The fed raising rates is even farther off. Quiet macroenvironment for the moment. Earnings are fair, not great, and the corporate Balance Sheets are strong. Valuations arent stretched. I think it argues more for stocks than bonds. You want to see what a high stock market is doing . Take a look at the ipos. Ipos in august, its deadville normally, but we have a pretty hot ipo market going. Ipos in the next week or so in the new york stock exchange, six of them. Are you kidding me . There were three all the whole month of august last year. There is one little effect of stocks at their highs right now. Meantime, big oil, another disappointment today from chevron. I have been noting this day after day here. Royal dutch miss, exxon miss, bp misses. Everybody wants to blame refineries going down or misses on the down stream level. As i pointed out, the longterm problem is they are having problems replacing existing oil fields. You see chevron and exxon to the downside but you also see the refining names, guys, that are down as well because weve had problems on the refining end. Thats the down stream end for those stocks as well. Guys, back to you. Some big moves there, bob. Thank you very much, sir. The labor force Participation Rate may have ticked down last month but theres one group seeing a notable increase and it may surprise you. Robert frank is back at headquarters with more on this. Kelly, it turns out that the leisure class is turning into the workaholic wealthy. A new survey from Spectrum Group shows those folks making more than 750,000 a year have the highest planned retirement ages. Nearly a third of them dont plan to retire until after 70. For those making under 100,000, only 6 plan to retire after 70. 50 of the top earners say they never plan to retire. Why arent the rich retiring . After all, they are the one group that actually can afford to retire, but most of those top earners, theyre entrepreneurs, and they are more likely than any other group to credit hard work for their success and they like to take rick. Now, as entrepreneurs, their life is their company and their company is their life. To them this is not really work, its fun. Its what they really love to do. Now, think about David Murdoch still running dole food at 90. John malone still shaking up the cable industry at 72 or steve wynn still overseeing that casino empire at 71. The dream used to be to get rich and retire at 40. Now its get rich and work past 90. But continue to look like youre 40. I dont know if you saw the piece of Plastic Surgery in the times yesterday, guys want to look like theyre somewhere between 40 and 55. Some of these guys have had a lot of work done. Thanks a lot, robert. Disturbing. Robert frank. It is a good day for linkedin. The stock surging. Stay tuned. The ceo will join us for an exclusive interview when we come back. First day of my life by bright eyes youre not just looking for a house. Youre looking for a place for your life to happen. And experience the connectivity of the available lexus enform, including the es and rx. This is the pursuit of perfection. Like carpools. Polly wants to know if we can pick her up. Yeah, we can make room. Yeah. [ male announcer ]. Office space. Yes, were loving this communal seating. Its great. [ male announcer ] the best thing to share . A data plan. At t mobile share for business. 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Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. On the halftime report, whats the best trade if rising rates are off the table. Disney, one of our traders says sell right now. A morningstar ultimate stock picker reveals the new names hes buying today. Thanks. Looking forward to it. Linkedin shares surging this morning. Membership growth rate also saw a tick up. Lets send it over to Julia Boorstin who is now live with the ceo of linkedin, jeff weiner. Julia . Thanks so much, kelly. Jeff, thank you for joining us today. Congratulations on great earnings. One of the things that really stuck out, especially to wall street, is the fact that you accelerated the number of people who lined up. How did you do that and can you keep up that growth . Our growth team has done a great job of optimizing the site. Your stock continues to soar. Its up about 11 . Are you worried about a stock that keeps moving higher . Is this kind of stock run unsustainable . We will leave the pricing to wall street and the investors. Well focus on longterm value creation. Its all about executing our plan and we were pleased with the results. In terms of executing their plan, mobile seems to be a growing part of that, but what is your biggest challenge in making money from your mobile users . You have got limited real esta estate, and so i think for a number of websites, the challenge has been navigating the transition from desktop to mobile in terms of advertising. For us advertising is only one of three diversified business lines were in. By virtue of mobile, we increase the ubiquity with which people can generate value. With regard to ad sales specifically, were excited about a new product called sponsor updates that enable companies to get their content into the feed, both desktop and mobile. I want to talk about sponsored updates because there were a lot of questions about it on the Earnings Call yesterday. This is a shift in ad strategy for us. Its very similar to what facebook has with paid posts and what twitter has with promoted tweets. Why are you going this direction . We think it makes sense. If you look at the industry right now in terms of whats working for marketers in terms of the best way to leverage that more limited real estate within mobile environments, sponsored conte content, sponsored updates, as you mentioned, for facebook, sponsored stories, its working. Were seeing higher levels of engagement via mobile sponsored updates versus traditional display. People who use linkedin are used to not having ni ads. How do you avoid annoying people . Relevancy is top of mind. Theres really three considerations here. The first is this is content. So unlike traditional display advertising, this is the same kind of content that companies are already distributing to people who are following them. Sponsored updates enables them to get the same content in front of members who are not already following them. You look at Companies Like microsoft or ibm, on linkedin they have well over a million followers already. The second is targeting. By virtue of the profile information, you can target a financial journalist different than you would target a senior executive. And lastly is relevancy. We have a World Class Team of data scientists who are always thinking about how to create more relevant experiences. You dont break out mobile revenue. Is that something you consider doing . In the future perhaps. Right now its not something that weve broken out. Facebook does seem to have figured out mobile monetization. Do you think you will be able to match facebooks success and growth in the mobile space . Facebook has a very different mod model. Advertising is the predominant source of revenue. I think they have done a really impressive job of navigating the transition from desktop to mobile and you saw that in the most recent quarter. But do you see mobile influencing things like Town Solutions . Certainly. So as recruiters and job seekers increasingly are turning to their mobile devices for solving their needs, were definitely going to be there. As a matter of fact, weve already introduced new functionality via the most recent mobile application update. People can now edit their profiles, job seekers can see Jobs Available to them via mobile. And were excited about where we can take our flagship recruiter produ product. The majority of your user base is outside the u. S. International is still the minority of your revenues. What will it take for your International Revenues to match the size of your International Audience . Its time. About 65 of our membership comes from international markets. Our revenue is about 38 international, and thats up considerably from four years ago. We were at about 25 . Its been a steady increase over time which is a reflection of our global expansion. Were now operating in 26 cities around the world in terms of our physical presence. Weve translated the site into 19 different languages. I think our goal over time is to make sure International Revenue is proportional to membership. Can you give us a sense of when it will happen. A part of that is going to be the rate with which developing economies can continue to increase the likelihood more mon if iization. Whats your outlook on the u. S. Economy . Taking a step back, you look at the numbers today, unemployment moving in the right direction as far as the rate was concerned, 7. 6 to 7. 4 , but i think its masking underlying problems. In terms of overall workforce participation, that number is declining. Youve got youth unemployment at twice the rate of National Employment and theres still 3. 8 million available jobs in this country. Based on what you see in terms of supply and demand, you have a unique perspective here, what needs to be changed to fix the jobless problem . I think its all about defining what problem youre trying to solve for. I think one of the biggest issues is the growing gap between the available Economic Opportunities in this community and the aggregate skills of the workforce. To close that gap i think we need to do at least three things. One, improve education. Both in terms of Primary School reform and vocational training. I think we need Immigration Reform to make sure its easier for people with unique skills to be getting jobs in this country. And then, lastly, digital infrastructure. Now, i want to switch gears and go to some questions that have been tweeted in on twitter. And we have a couple of interesting once here. B. J. Says the main point of the site so to connect business people. Will you ever charge a commission or finders fee on deals initiated on the site . Havent considered that, but thank you for the suggestion, b. J. We will take it under consideration. What percentage of your growth counts include fake profiles and spammers and how do you detect that . We in et that out. We have a very talented group of people who are always adjusted our methodology. Marty schindler asks, it seems like theres a lot of uproar from the many people i connect with regarding endorsements. Explain the philosophy. Endorsements has proven to be one of the most popular new services. Weve seen over 2 billion endorsements generated. We recognize not every endorsement is created equally. If theres an engineer with job or programming background and theyre being endorsed by a connection, we want to make sure were putting greater weight if that endorsement is coming from another expert. With that greater weighting on that skill, we can improve the experience for that member across the site. Were out of time and we have to leave it there. Jeff weiner, ceo of linkedin, thank you for joining us and playing along with the twitters questions. We appreciate it. Thank you for that. Julia boorstin joining us with jeff weiner. Here is a question, are you sick of your job . How would you like a tryout at a new one without having to quit if i dont like it . One company is trying to make that a reality and well explain when we come back. Hey linda what are you guys doing . Having some fiber with new phillips fiber good gummies. Theyre fruity delicious just two gummies have 4 grams of fiber to help support regularity i want some. [ woman ] hop on over [ marge ] fiber the fun way, from phillips. Lets get a market flash. Send it over to josh lipton at hq. Were watching care fusion, the health care group. You can see the nosedive in that stock. The news smith group in reports saying it has terminated discussions over a sale of its medical division after it could not agree on terms with the bidder. The company said in may it was talking about selling the unit after a bid approach. Reuters had reported that was care fusion. Cfn down more than 9 right now. Kelly, back to you. All right, josh. Thank you. Now, if youre not a fan of your job, theres a new company that allows you to speed date. Thats right, you could speed date your way into a dream job even without your current boss finding out. Manuel medina is the ceo of group talent. Good morning. Good morning. So whats so interesting about this is not necessarily the idea of letting someone try out, but to let them try out while keeping their job and perhaps never leaving it. Well, thats right. We feel that your professional life and the decisions you make around it are just its one of the biggest choices you make in your life. And making it without knowledge as to what youre getting into seems a little too difficult for somebody to make a decision around a job that youre going to keep for several years without knowing what are you walking into. Its very similar to your marriage, to dating. We figure that allowing people to engage in this type of professional relationship would be a win win. Employers get to see their contributions and candidates get to see the kind of environment they will be working in. Most of the people who signed up for this, the space youre in is developing, programming. To what extent as you guys grow, employers will push back on this and say, wait a minute, the last thing i want is someone working for me who knows intimately about another company and vice versa. Its really up to the employer to figure out what is the best way to bring somebody in. So its no different than boarding new talent. The difference is the employer will get to see the talent ccs right away and figure out whether theyre a good fit. Perfect fit will have benefit for the employer in the long term in terms of having a person working in the company that will work out over the period of several years. Given that the cost of hiring is so high in this country. Knowing that youre going to be working out in the long term is actually a very positive benefit. You mention so many examples where it ends up potentially not being a good fit. Where does it generally go wrong for a new employee and their employer . At least in the programming front . Its usually around the personal fit. You know, you can interview for knowledge and you can interview you can interview all you want for culture, but the culture is something that is in the people realm. So its emotional intelligence. Its ability to fit with your team and sto forth, and that can only be found out by doing it. Sorry, i didnt mean to interrupt you. I was going say curious, and i may not have put this the best way, what i mean is if you as an employer are worried, for example, that you have employees who might be working with other companies, manuel, are you not concerned that will create issues down the road . It shouldnt. The employment market is fluid, and when a person is looking for a job, theres nothing the Current Employer can do to prevent them from doing so other than giving them more interesting work or paying them more. Were not trying to facilitate something that isnt happening already. Were just trying to make it more efficient. So in the labor market people are constantly moving from one job to the other after a period of several years. What were trying to do is make that decision as informed as possible for both parties. And 7,000 a week we read is what some people can command. You can understand the attraction for some people who want to try it out. Thank you, manuel. Its almost that time. Were moments away from announcing this months nail the number winner. I know youre excited. Stay tuned. The big reveal is next. [ male announcer ] its time. Time to have new experiences with a familiar keyboard. To update our status without opening an app. To have all our messages in one place. To browse. And share. Faster than ever. Its time to do everything better than before. The new blackberry q10. Its time. [ male announcer ] you wait all year for summer. This summer was definitely worth the wait. Summers best event from cadillac. Let summer try and pass you by. Lease this cadillac srx for around 369 per month or purchase for 0 apr for 60 months. Come in now for the best offers of the model year. All week weve been asking you to tweet us your bhes guess for the jobs testimony at the nailthenumber. We got over 900 entries but only one guessed the right number, 162,000 on the head. Joining us on the phone from atlanta is carl white. Good to have you on the program. Good morning. Thanks, carl, and let me just say im a big fan of your first name. Its a good one, krsespecial with the c. You knew it was going to be lower. How did you know that and what drew you to 162,000 . Ill be honest, it was just i thought it was going to trend down, just a feeling that everybody seems so optimistic and i just kind of pulled 162,000 out of the air to be honest. Yeah. Kind of like the street does it in some ways. You are the cto and the founder of a Company Called web tickets. Com. Im still learn being it but it sounds like its in the secondary market for tickets for live events. I mean, are you seeing something in the labor market that gives you a bullish or bearish sentiment Going Forward . The labor market i would definitely have to say bearish. At least in my industry, business is not great. Its tough out there and its hard to put money into a new employee. Carl, thats interesting. And how long have you been trying to guess the number . I have been playing it off and on, you know. I dont know how long you all have been doing it but i play it off and on if i catch you and im not out of town or something. Yeah. And what are you going to do with the gym bag . Im pretty excited. Being someone that works out three times a day and if you could see me you would know im kidding about that. I was going to say three times sounds like a lot. Maybe this will spur your next workout campaign. Carl, congratulations on a great win. One thing we havent done is actually opened the bag to see whats inside. Have you looked in here . I was joking. I was going to put my shoes in here. Carl, im not going to tell you whats in here but i have been curious. Oh, my god. Oh, man. Open it up. You are in for a big surprise. Congratulations. I do appreciate it. Carl white, winner of our nail the number contest. Thats a good one. Thats a good bag signed by everyone, too. And dying to find out what exactly is in there. Dow is off 23. Tenyear a little tighter here, kel. I think theres some sense that if the bears were going to have their shot, might have happened earlier in the session and certainly some of the longs at least if you look on twitter or what have you feeling a little bit more confident that the bloodletting wasnt worse in light of the disappointment. Theres sort of a lack of catalyst for now. So the extent it will set the tone for the month, thats also what people are snapping up to attention. Some have drawn our attention to whats coming up next week. It will be not as busy as this week but monday is the twoyear anniversary of the s p downgrade of u. S. Debt. Since then s p is up 50 . And rates have come down how much . So its going to be an interesting thing month to look back at the past mile markers. Of course, as cashin said earlier this week, were all looking forward to jackson hole. And a couple battleground earnings. Good weekend to you. You, too. And to everyone out there. After surviving this crazy week. Lets get back to headquarters. Melissa lee and the fast money halftime. Welcome to the halftime. Four hours to go until the close. Here is where we stand. Markets little change. The highlight here is the s p 500 holding onto that 1700 level. 1704. 5 at high noon. The dow 15,603. And the nasdaq 3674 right now. Here is what were following on the half time. Boring to soaring. One of morning stars ultimate stock pickers. Disney hovering near alltime highs. One of the top performers this year so why does one of our traders think tuesdays earnings will trigger a selloff. But