Transcripts For CNBC Squawk On The Street 20140411

Nikkei. Overnight in asia not good. 2 drop wrapping up what is the worst week in three years. Of course concern about china in terms of exports or lack thereof. A look at europe where we also are going to see a good amount of weakness. The follow through as you might expect from here yesterday, a day in which we saw the s p down almost 2 and the nasdaq nasdaq down 3 . Lot more than that. Yeah. Lets get to our road map this morning as you might imagine. Does start with that meltdown if you want to call it that in the markets. Stocks slide around the world. You just saw. Is this the start of a correction . The tip of the spear, jpmorgan profits disappointing. Jamie dimon confident in the american recovery. How will the banks weak results drag on the market and other financials. The flip side wells fargo profits up 14 and those shares are rising. Another bad month for sales at gap. Gap discloses a 6 drop in march samestore sales after a disappointing february. Gross margins taking a hit. One downgrade ive seen. No relief on wall street this morning, of course, as weve told you. The futures moving lower after thursdays selloff which saw the nasdaq suffering the biggest one day slide in 2 1 2 years. Biotechs and the momentum names continue to get hit after having been up the day previous. You had the dow and s p posting the biggest oneday point declines since early february. Not interested in point declines. Just a matter of percentage. Thats how everybody measures their performance. Right. As ive said day in and day out here, the pain is much worse even than you would see in a 3 down day. It continues in the hedge funds. I would have thought at this point many of them who may be a lot of the volume have already taken their gross exposures down, and i thought that was a sign of it on wednesday. Yes. And i felt it. Remember were down 3. 5 from the high, were not down that much. To hear all these blowups is rather incredible. Yesterday was something ive never seen in 31 years. Okay. I saw incredibly strong u. S. Economic data and Interest Rates go down dramatically and its continuing today. And that is a combination of the fact that worldwide rates are so low, why not be in a much more riskfree bond than a greek bond, but also because the money is pouring out of equities. Pouring. And going into bonds. And a lot of this is what youve been saying. That hedge funds, im calling them wounded tigers, and the momentum funds, overwhelmed by supply, overwhelmed by zoes kitchen. Zoes kitchen. That pyramid were trying to stay away from, although it will figure in some of our shots today. Ever been to the pyramids . . Theyre not that nice looking and eroding. Well this doesnt have a top. That pyramid. Of course another public offering. Youve been pointing to what you believe at least to a certain extent is weakness in some of the momentum areas. High multiple names in technology and biotech. In part because of the supply that keeps coming from new wi wish issues. We talked about 3d printing. Im going to give people at home let me give you some insight. When i go on a book tour, 3d, d, d, d the stock most asked about. It is the stock most asked about. This morning voxle jet which you and i have joked about when it was in the 40s and 50s prices 3 million shares at 15 bucks. David, this stuck was in the 40s and 50s a few months ago. Isnt it interesting that theyre still selling and thats whats going on. Fireeye. Why sell at a high price if you can sell at a low price. If your basis is down 52 from the high. Still raising money down here. Fireeye a good company, now they did they announced when the stock in the 90s 14 million secondary it was then prized in march, second week of march, priced at at 82. Feye. Feye is now at 48. This is just less than a month a month ago and this secondary you have to believe if youre opening one of these stocks or if youre an insider, youre going into your board room saying we are not fireeye. We are going to get the deal done now and we are not going to be down so quickly. I mean im just saying that theres no price these guys want to sell. There may not be a fundamental underpinning to this weakness. Like the actual how the businesses are doing. Yes. Not just the businesses but the broader economy. There is quite good. Concern about china and we shouldnt understate that. That has been an important drive he of Economic Growth worldwide. Export numbers were far worse than had been anticipated. They were part of our bond. You cant necessarily draw many conclusions from one number for one month from china on anything. Export you know, the import and export numbers were both horrendous. They were. You know what no one talks about thats a fundamental but there havent been other fundamentals. This seems to be largely a lot of stocks that had an enormous move up that suddenly started to move down and then a lot of forced hedge fund selling or taking down a gross exposure and that keeps playing out. Right. The companies its the shareholders. Not the companies. As opposed to 2000, in 2000 the companies, many of them were jokes, 300 went under. In 2014, we chose to value some companies as revenues and those companies are getting hammered. But so are the dhaeps have good earnings. Thats going to be a mistake eventually. In other words, what im trying i dont want to hate myself as a bear paint myself as a bear. Im saying there are bearish segments where i thought the underwritings would cool and the insiders would cool and they have infected other areas of the economy and unless you have a dividend, david, a nice different depds, theyre going to dividend theyre going to hammer you. Mcdonalds, did you see mcdonalds yesterday . Is there a Fast Food Company doing as poorly as mcdonalds . Stock was up 1. 08 yesterday. 3 plus yelled. Better than youll get in a lot of places. You can buy a Berkshire Hathaway bond at 3. Mcdonalds will turn it around. Thats why the stock is up six bucks. If you are trying to live off Retirement Income or plan a portfolio to give you some income what are you going to do . You still got to end up back in the stock market. Who are you going to call . Verizon andth. Another reason at t has been doing extraordinarily well. And that stock was good yesterday they kind of like lets behold the stone wall. The fundamentals are not particularly good. Stonewall jackson at at t. A couple names taking divergent paths this morning in the very important area of financial services. Two big banks this morning, wells fargo posted better than expected firstquarter profit, 1. 05 a share helped in part bay sharp decline in the lenders charge off rate. Jpmorgan chase missed street expectations. Q1 earnings, 1. 28 a share. That was hurt by weak trading particularly in fixed income currency and commodities. The earnings released chairman and Ceo Jamie Dimon did strike an upbeat note. Dimon said, quote, we have growing confidence in the economy, consumers, corporations and middle Market Companies are increasingly in good financial shape and housing has turned a corner in most markets. All right. We got that going for us. Wells fargo does not have trading exposure. You know what no. Im going to own this. My Charitable Trust sold some jpmorgan. What are we talking about first here . Start with jpmorgan. Yeah. But, you know, we held some of it. This was a bad quarter. Okay. As opposed to saying that it was a good quarter and people are misunderstanding it. It was a bad quarter and no one is misunderstanding it. One of the few misses of jamie dimon. I read the annual letter yesterday and i said on mad money i said boy, everything every data point for banking is bad but he reaches the conclusion that better times are ahead. Well, you know what, thats jamie, better times are ahead. Jon stumpf speak softly if not at all and carry big numbers. Im mad i wasnt telling people this wells fargo number, look at this, commercial industrial the lone growth here is incredible. Real estate, automobile, credit card, jpmorgan didnt do well on credit cards. Well, its not the credit card force. Wells fargo up 9 , new account growth up 29 . Jon stumpf you are americas greatest banker. Yeah. I talked to a couple of pms who focus on financials this morning, portfolio managers. Weak on most fronts is what they said about jpmorgan. Think hes distracted. By the way, they were talking about theres an expectation in fixed income currency commodities would be weak. Not in lending. Weaker than expected. Not lending. Im mad at myself. I saw it. What do you mean . What did you see . Because his letter did not give you enough to hang your hat on to like the stock. Just to like the country. Now im not you know, were not trading the country. Right. Were trading jpmorgan. Dividend boost but that was in line. Glen shore from isi one of the better analysts, solid Business Performance consumer deposits up, card sales valium up 10 . Jpmorgan. Client Investment Assets up 16 . 14 billion of long term net new flows, dividend yield of 2. 8 . Took the Mortgage Service rights. Im switching. Sister, mother. Mortgage service that they did that wells fargo did not have. Look theyre making a lot of money not doing well. Who knows. This is the bull case. Theyre making a lot of money not doing well. Wait until you see what happens when they do well. The problem is wells is doing well now. There was a reserve release and a bit of a tax benefit we should point out on wells. No, thats why youre you were good partners. Because youre tempering my enthusiasm on wells and tempering my negativity on jpmorgan which youve done since 1998. Not necessarily using these two stocks. Good. Im glad were able to do that and i like the fact that we are. Good partners. We have a lot more coming up. Retail, the economy, the consumer. You want to hear what macys Ceo Terry Lundgren has to say about the mall. We have him. Speaking of retail, what is gap blaming for its weaker than expected samestore sales . Yeah. Well have the answer after the break. Lets give you another look at futures by the way. Very important market day here as we follow yesterdays shellacking. We have a lot more squawk on the street live from post nine. Save you fifteen percent or more on car insurance. D Everybody Knows that. Well, did you know pinocchio was a bad motivational speaker . I look around this room and i see nothing but untapped potential. You have potential. You have. Oh boy. Geico. Fifteen minutes could save you fifteen percent or more on car insurance. I cant wait to get to mattress discounters good and early for the tempurpedic bonus event. Choose 300 in free gifts, and, get up to 48 months interestfree financing with any tempurpedic mattress. Mattress discounters we got a fair price. Ruecar. Com, my feeling is that. Theres no buyers remorse, you know. Im happy with my purchase. Its the truth. When youre ready to buy a car, save time, save money, and never overpay. Visit truecar. Com unfair. Thats a little rough. Yes. Thats a little rough. Thats real. 5 drop its not titanic. Come on the white star line, give me a break there. Shares of gap are falling, falling. Theyre not sinking to the bottom of the ocean. Never to be heard from again. The apparel retailer did post weaker than expected march samestore sales down 6 . Gap predicted the month would be negatively impacted by a shift in the easter holiday. Last year i think it was march 31st, this year late april. This morning janney downgraded gap to a neutral citing incenter growing inventory growing faster than sales. Thats the oldest when it comes to retail. The inventory grows faster than sales, get rid of inventory as mickey calls them our mistakes when you walk to the back of the store sometimes. When my father told me he was doing inventory at gimbels too many gab ber dean pants and they got too many gab ber deans. The old navy number quite disappointing. This company has become hit or miss and i dont mean that terrible chain called hit or miss which i think went under. I shouldnt say that. Maybe my hit or misses have closed. The ones that i would go to. Its possible. But this is the kind of thing that has become endemic with gap. You know, is it good, bad . You cant be month to month in the retail business. You have to be consistent. Were going to hear from Terry Lundgren. Hes been consistent. See what he says. It is interesting that gap does chooses to share samestore sales with us monthly where there are very few retailers anymore that do that. That has disappeared. Its a hedge fund in terms of something that you hear from. A hedge fund annuity plan. Once a month you can make money as a hedge fund manager. Bed bath another downgrade. An article they talked about what stocks were down a lot and the overvaluation. Can i in bed baths defense, the stock is down 20 , selling 12 times earnings. Dont lump that in with splunk. This is not splunk. Now you you know, splunk . I do. I know splunk. Only because you mentioned it a number of times. Its a satisfying word to say in a way in a strange way. It means going down into the cave. It does. Yeah. The bear cave. Like that . I do. All right. Overall how should i approach retail at this point . Case by case my friend. Case by case. Case by case. As opposed to all negative. The rth is such a powerful etf and we dont talk enough about etfs on the show. Whats happened you get this retail. Watch walmart. Now look at this. Im finally not talking about watching tractor supply. Watch walmart. The warren buffet retailer. It has held in very well. It is not my favorite but watch that one. Versus Family Dollar which by the way i wish you were here yesterday, but you had to go to the play. I was at the second grade play. You did the right thing. I made the plays but later on i didnt and i regret. Everyone at home, go to the darn play. The play was indecipherable but my daughter was the star. She was the star . She is a star. My daughter is in chorus. Starred in field hockey. I just want to point out if you look at these retailers, the biggest ones are not expensive. Lets focus on costco for a second. They did Charitable Trust did a great number yesterday. Stock was still down. So i dont want i find that where the bargains are, rth takes down everything and you look at the ones doing well and buy them. Did you get a look at this yesterday . Came out at about noon, amazon. Coms annual letter from mr. Bezos. And it is largely taken up talking about retail, of course, with all of their new ventures or the things relatively new, whether its prime, prime instant video, fire tv, the amazon app store, game studios, spoken word audio, web services, fresh grocery, career choice. Did you know they pay people, i spent the last four months studying this company, i did not know they have a pay to quit plan at amazon where once a year they offer to pay their associates to quit. The first year 2,000, then it goes up by 1,000 a year until it reaches 5,000. Why would you say you have a plan to offer them a pay to quit . Well, the goal is to encourage folks to take a moment and think about what they want in the long run and employees staying somewhere they dont want to be isnt healthy for the company or the employees. Whats the earnings per share . Thats not read the letter, man. Just read the letter. Bottom line. Please. Read the 97 letter. He said there. Dont be me. If i can have me i can be me. Dont High Frequency trade me. Future cash flows forget reported earnings. Amazon will find a level where it will bottom and the momentum guys will come back after the momentum guys replenish their coffers. The momentum guys are busy trying to figure out how much chipotle to sell to buy zoes kitchen. Okay. Thats going to be a small offering so theyre not going to need much. Its a giant pyramid. Its a pyramid that doesnt have a top. No. Yeah. I find that disturbing. Well, we dont want the market to have a top. Maybe thats symbolic no top. Maybe so. Youre right. Right now were talking more about heading down rather than up. Up next we do have cramers mad dash as we count down toward the opening bell on this friday. Heres one more look at futures. It does appear we are going to open in the red as you can see right there following yesterdays significant percentage losses for the major averages. 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See what the ford experts think about your tires. At your ford dealer. All right. We have 7 minutes before an important opening bell on friday. H r block. H r block is up nicely in a down day. Definitive agreements on the bank. I had mr. Cobb on recently and this is a company that has got oodles of cash but hasnt been allowed to buy back stock. Remember, it is almost its almost impossible under obama care for you to do your taxes without leaving money on the table. Hence that great ad campaign they have. Suddenly got momentum from the business and youve got cash coming in and david your know when you get under get out of Federal Reserve oversight its pretty good news. There is an expectation of a significant capital return here now that bank is being sold. They were forced. Dodd frank kind of forced them to have to do it. Its been up for sell, they got it done. The Investor Base waiting are we going to get a significant return in capital here. I dont think theres been news this morning on that front. You could say maybe this is place to go if its down. Yesterday automatic, adp, doing a spinoff, very positive. Stock didnt go up because of the market. What i try to tell people not everything should is goes down at once. Some shouldnt go down. H r block get this at 28, because the market is bad, thats kind of interesting. The market has been bad for bioteches. You and i had this conversation many times which is simple. The multiple here is nothing like what it was 15 years ago. No. Nothing. In fact its cheaper than pharma. Heres the issue with gilead. Go to inesters business daily, the lead story, mercks drug that has tremendous efficacy against help c. Here we thought gilead had the market to itself. What i want to say its a phase two study. Wait a second. Gilead people are saying cramer says buy gilead. Gilead will continue to go down to a level to be absurd and then you get your chance. So many iponess this sector, Insider Trading in this sector every time you feel its going to get footing a new one comes public. The people that want biotech do not have room. What they do, they short the etf thats biotech and brings down all the stocks. Every time you think youre going to get terra firma, etf selling comes in, goes short that and long individuals that they have to because theyll call you and say you took the good one, now eat the bad one. No give without a get. Theres something im going to teach you. Thank you, julien broad ski of comcast. No give without a get. Well be watching the biotechs closely. In addition to other beat up stocks. The opening bell just a few minutes away. [ male announcer ] what if a Small Company became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. Youre watching cnbc squawk on the street live from the Financial Capital of the world where the opening bell is set to ring in one minute. Couple more ipos ending what has been a very busy week. Lets kill the market. You really yes. Supply can kill the market. It really can. Now it doesnt mean it cant bounce back because well get a certain valuation. Look at cisco. I dont care for cisco. Look at intel, hewlettpackard, old tech. The supply were talking about is not i know the dollar if etf selling to hedge against taking these in. If you take a look at some of the best companies, you know work day, very high multiple, theyre crushing it. Right. Good operating cash flow. Some day the insiders will stop selling. A very high multiple. All the Cloud Companies. We keep calling them Cloud Companies which is a misnomer. Its basic technology and all the stuff they put on top of it, the services they offer you that vary. Lets talk nontechnology, a Company Called zoes kitchen, live mediterranean. The issue rit large. Tell me. Why is this Company Coming right now . Going to strike when the iron is hot. They have 41 growth. What kind of earnings do they have . I dont know. Nil. None. Right. So this is another one thats just considered a biotech. All right. No earnings but great food. People are saying that opportunity is so great they dont need to show. They do. Which means its not necessarily something you want to avoid but this is not what the market wants right now. Thats chipotle down 22. We should point out its mediterranean fast casual. Okay. Good all right. Its very healthy for you. Over at the nasdaq you may have seen it hbos vampire series true blood. Multiple on that thing is incredible. I tried to watch it. Another one like game of thrones like oh, my god i never wow, man. Porn. Like watching porn with your kids. You thought it was a series so it wouldnt be so bad. A little uncomfortable. Wait until your kids grow up instead of seeing the play, wait until you try to watch popular shows with your kids. Disastrous. Another lesson imparted today. So many. Im looking at my screen here, jim, and we have as you might expect largely red. Im looking at at t and exxon and cocacola. All right. These are i dont know what screen you have. I have mcdonalds up. 0. 1 . Walmart. The warren buffet. You knew youre in trouble when guys attacking him saying hes passe. The guy is up today. Probably having a big week. Big week. Big week. Big week. Getting ready for the annual meeting not too far away. I have to get there. Lets go back to the financials because jpmorgan, of course, is down. Youve been hearing things about the Conference Call. Unfortunately were not able to get on. Were going to hear from Kayla Tausche later in the show. I have stephanie link on the Conference Call. Not i share some of this with you but its wow. The quarter, they didnt execute well. Heres a question for you. Please. When youre busy talking to the attorney general of the United States, okay, which is a very high lofty office we would all like to attain, busy talking to your lawyers every day, trying to figure out whether or not wl someone is going to be under fbi investigation, busy firing people, do you have time to focus on lending, david . Do you have time . On credit cards . Can you focus. Admittedly, obviously its a big bank. Its not as though jamie dimon is going around signing people up for loans. He is the chief executive. There are plenty of people focused on those tasks. So are you saying hes not on people enough . That hes not because theres only so many hours in a day theres distraction. Let me tell you something. You know who is out there signing up loans. Jon stumpf. Ever dealt with stumpf . Five minutes in the conversation asking you about your mortgage. Theyre very good at cross selling. In fact, i know that from personal experience as well with my mortgage and how i ended up using them for other services. Me too. I should have disclosed that. They got my mortgage, they called me and said listen, what else would you like to do . Sure enough i suddenly want to do something. I think of wells. All my money has been with jpmorgan almost my entire life but i do business with wells. My jpmorgan guys are great. Im just saying wells is so aggressive in mortgages. My jpmorgan guys are great too. I am not saying that. Im just saying that wells gets in the door. How and your goldman guys are okay . Really good. My storied guys are good. And investor savings guys are good. San tender not so good. Watch out for bana mention. Banamex. Im just saying, that skl wells is aggressive. So is jpmorgan. You let wells in the door they find a way to do more business. Wells fargo is down, jim, and again more positive quarter. But theyre terrible. But people may be looking at they were helped by the reserve release, a fairly nice tax rate in terms of beneficial and thats true. I will tell you net interest margin, come to that. Youve been talking about that endlessly and it wasnt great. Wells fargo not great. No. I flagged that. I know. So many notes here. A time and a price for everything. All right. Jpmorgan should not yield. If it goes to 3. 5 i dont care. You buy it. Okay. Wells fargo, its a very well run bank but this is again, im going to keep focus. I had the father of the vix. Vix had a dad. Probably didnt know. Did they do a dna test to make sure . Paternity . I hadnt thought of that. You tell me hes the dad i believe it. Bank etf getting killed. It really doesnt matter. It jon stumpf being brought down with jamie dimon. Jamie dimon will pull out of this. Probably want to be a buyer of dimon at a certain point. Not bob dimon. Jamie dimon. Not yet. Probably want to. I was trying to look at the dividend yield. At 2. 91. Youre getting there. Remember where the tenyear is. I do. The greek fiveyear is. Beware of greeks bearing five years. 4 billion worth sold by greece yesterday. That was somewhat monumental. Starting to find this intel. Back to the high flyers or former ones. Facebook, google, amazon, ebay, yahoo twitter all down. Ebay not bad after yesterday. Resolution with carl. Why wasnt the stock down more . The earnings arent maybe someone knows the earnings are getting better. Im not saying that anyone knows anything. Im just you can make a projection europe which had been bad and korea not so great maybe coming back. People tend to think ebay is just paypal. Its not. Its absolutely not. The marketplace is yeah. Still an important component of their business. They are not separating out paypal any time soon. Theyre not. Were going to get an oversold rally in the dividend payers. Because these as long as the tlt which is frankly all you need to really put on your screen if youre playing at home investing at home, i didnt mean to say playing, tlt, shares trust 20 year as long as that goes higher the stock market goes lower. Almost a given. Really kind of an amazing security. Im watching yahoo down again another 2. 7 . I dont know if we can put up a two week or so on yahoo they will be reporting numbers next week. People will use it as a seethrough on ali baba, dont forget, the last time were going to get a look at alibabas through yahoo s reporting earnings. They lag by a quarter. The Fourth Quarter of alibaba but thats important because people are trying to figure out whats that going to be worth. The s 1 not too far away from ali baba when it goes public. Bought at 1,000, export number bad we dont want to be affiliated with a great look at that move down. Extraordinary. Looks like a good sell. I didnt get the exact price. Hes going to be furious. Alibaba the concern sequential growth rate slowing but the last quarter includes the singles day where they sold more stuff in one day than any company ever sold to anybody on the planet. Interesting to see and keep an eye on that. Like a valentines day for singles. Yes created by alibaba. Culturally ignorant towards that day. When you look at that stock yahoo there is core value. People continue to think listen, yahoo regular is not doing well. I think that yahoo regular is a bit of a bank that has a lot of capital to figure it out, as aol was. Remember, they figured it out. Figured it out, got jerry he vine to figure out with him. He did a great deal. Yeah. Jerry levin not so much. Im not going to be im talking about the high flyers, and meantime get the schism of the market not unlike what you saw in april of 2000, literally this week, where you begin to see money gravitate towards cocacola and bristol miers. Well watch more with bob who joins us from the floor. The important thing this morning here is whats going on with the ipo with market. We talked yesterday speculated with a weak market yesterday, we might have trouble pricing some of these ipos. Eight of them last night. Indeed thats exactly what happened. Four of the eight ipos didnt price, including lum bared medical, citi office and paycom software, a hot one, apparently paycom has filed Something Like an amended s 1 and so it is not priced today. Its not clear if its going to price. A possibility i guess it could price later on. Thats not clear right now. Bottom line four of the eight havent priced. Not surprising. You need a strong stock market to have a lot of ipos come out. You need a stock market at your back. Thats the most important thing overall. With the markets moving sideways to down the s p down 2 in the last month its getting tougher here. Lets talk about what is out, zoe kitchen, nice ground behind me. Lot of children Walking Around here. Fast casual the hot space, zoes kitchen priced at 15, upwardly advised. Revise it upward, theres a winner right now. Dont have any indications but that should open in the next 15 minutes. Reit Farmland Partners did price at 13 priced at 14 low end of range it opened at 13. 75. Bit below the price here. We havent had enable partners open, nat gas and crude oil limited partnership. They price 25 million shares at 20. That was the middle of the range. 19 to 21. You can see sort of not bad, but not great on the four that priced. Lets talk about the markets and whether or not theres a lot of rotation going on. Were obsessed with biotech and obsessed with the three dozen internet stocks out there. Lets talk about dividend paying stocks. Want to show you the rotation going on here. Put up the full screen. Utilities, telecom have been hot. Dividend paying stocks like the h tv, up 2 . Reits have been up on the month. Not just dividend paying stocks. I pointed out yesterday Energy Stocks continuing to hold up well. Slumbershay and eog and apatchically are all 4, 5, 6 in the last month. And its even more than that. I pointed out yesterday david not only is caterpillar having a great year but the oldschool tech names, microsoft, intel, ibm, cisco, all of them are up in the last month. Nice rotation going on in that space. Okay. Guys were opening here, not yet here on zoes kitchen. Back to you. Great analysis by bob. Yeah. Exactly whats happening in the market and people have to stay focused and recognize theres two markets. The undervalued and overvalued market. Ibm up 4 this year. Warren buffet. Cisco. Oracle. Hewlettpackard. 17. 5 . Hewlettpackard is putting up smoking numbers. Im pointing out the market is making sense. The part that is everything that is high flyer is being thrown away and some of those high flyers have great earnings and some are just fairly low multiples. Thank you, david. Youre welcome, jim. Youre a calm 20 to 23. For zoes. Starting to get up there the valuation of chipotle for heavens sake. Yeah. Lets get to the bond pits and Rick Santelli joins us from the cme group in chicago. Rick . It continues to be wild times in the treasury complex. Thats for sure. Even a hotter than expected surprisingly hotter than expected ppi didnt do much for yields. Yes, they had their little kind of token rises they should but the overwhelming issue as previous qe have come off just to name one area to Pay Attention to we see that Interest Rates have a tendency to move lower. Why . The equity markets move lower and the only tiny trade then becomes the treasury market. Two day of fives, yes, look at yesterdays lows. Yields are lower. Look at the 30s, how much that two day gives you information on the ongoing holding of major flattening in the yield curve and many traders debate what it means. Many believe it means even though we are growing relative to the rest of the world we are not growing to make the long end happy. Thats why rates are moving down. Not quite enough. Maybe our growth factor should be greater. Now as we look at fives, tens and 30s on bigger charts, you know, 5s were comping back to about mid march excuse me mid may. Tenyear in particular, the february 3rd low around 2. 57 jumps out at you. Keep in mind tens are down about a dozen basis points on the week. Fives are down 14 basis points on the week. As you continue to look at these charts you want to Pay Attention to the nikkei especially. Not only are we under 14,000 but look at the year to date chart. Not far from really extending the comp and the dollar yen, similar to treasuries, back to you david and jim cramer. All right. Thank you very much. Rick has been spot on with bonds. I mean the craziness is being explained. People should stay focused. New headlines from the Conference Call going on with jpmorgan senior management. Kayla tausche has been on that call with including, of course, mr. Dimon. Kayla . Hey, david. You know, a lot of defensiveness from jpmorgan executives this morning on what is a really recognizable miss for a company that has been posting record earnings until what was Third Quarter of last year. One of the main questions is about the credit quality because the divergence of jpmorgans credit quality and wells fargo is something the market is talking about this morning. We know for the last several quarters jpmorgan has had this huge stash of loan loss reserves and been releasing that in pretty large fashion so to see this quarter only 450 million of reserves when that was normally something that would get their epps above the expectations that was concerning. We saw wells fargo relieve releases tick up recognizebly. That helped wells there. Also questions about Michael Lewis book flash boys getting a lot of headlines. That book has just come out very recently during these banks quiet period. Theyre expected to be answering for themselves on whether they do believe the market is rigged. Now jpmorgan Ceo Jamie Dimon on the media call refused to comment on whether the market is rigged. On the analyst call he decided to point out in the book jpmorgan was one of the good guys on that character front. Its an interesting situation today to see these stocks diverging so much, to see the loan portfolios diverging so much and where the growth is coming from here and the call is still going on right now so well have some more headlines in the next hour or so. Thanks, kayla. We bounced off 4007. Thats why things went up in the nasdaq. Up 4007. Did it quickly. Want to point out before we go away, technicals are getting charged when the fundamentals are a loss, right. People revert to the technicals. I dont like that because the technicals tend to be good until theyre bad. All right. What do we got next . You may ask that. Irwin simon, what does they think about the big bet walmart is making on organic foods . Well talk to him after the break. [ cellphones beeping ] [ cellphone rings ] hello . [ male announcer ] over 12,000 Financial Advisors. Good, good. Good. Over 700 billion dollars in assets under care. Let me just put this away. [ male announcer ] how did edward jones get so big . Could you teach our kids that trick . [ male announcer ] by not acting that way. Ok, last quarter. [ male announcer ] its how edward jones makes sense of investing. Makes sense of investing. [ chainsaw buzzing ] humans. Sometimes, life trips us up. Sometimes, we trip ourselves up. And although the mistakes may seem to just keep coming at you, so do the solutions. Like multipolicy discounts from Liberty Mutual insurance. Save up to 10 just for combining your auto and home insurance. Call Liberty Mutual insurance at. To speak with an Insurance Expert and ask about all the personalized savings available for when you get married, move into a new house, or add a car to your policy. Personalized coverage and savings all the things humans need to make our world a little less imperfect. Call. And ask about all the ways you could save. Liberty Mutual Insurance responsibility. Whats your policy . Before we get, i want to point out a lot of high flyers are bouncing. Im going to revert to karen cramers rules when we worked together its early. Be careful. Walmart is trying to disrupt the organic market by teaming up with wild oates to sell pantry staples that will be cheaper than the National Branded organic foods on walmart shelves. What implication is does this have for the organic food injury. Irwin simon ceo of the hain celestial group. Good to see you. Good to see you as always. Im going to repeat it, staples that will be much cheaper than National Brands of organic foods on the walmart shelves. When goy to my walmart i see your nationally branded organic foods on the shelves. Does this mean youre in a price war with your own customer . So jim, number one is, you know, hain is the largest Natural Organic food and personal care company in the u. S. In the world today. Weve been doing this for 20 years and weve set up an infrastructure to grow organic ingredients, gmo ingredients. Walmart is a Great Customer and i said this on your show and many other shows, hain cannot change the way consumers eat by itself. You know, theres not enough supply out there for us to do it alone. No other big food company has gone out there to do it. Its great to see walmart going out there to sell more and more Affordable Organic food. And its interesting what walmart said. 94 or 95 of their Consumers Want to buy organic food. I think this is great for hain. And i think its great for the industry and it shows Consumers Want organic food. What happens if they call you and come down and say listen, you know, wild oates is a good brand like hain and if you dont cut your price to us were going to come in and replace you. First of all theres 700 billion of food sold in the u. S. Listen, you had walter on yesterday talking about going from 380 stores to 1200 stores. Sprout going to over 1200 stores. Theres a lot of great retailers selling Natural Organic foods. And, you know, theres a lot of room to grow our base. Today hain is only in 35 of the acv. Half our business comes from outside the u. S. Around the world today. Number one we have more than 100 products in walmart today, great Branded Products and listen, you know, consumers will pay for high quality products. Okay. Irw irwin, you said youre doing the big international. A lot of your acquisitions have been overseas. Is this the time to say you know what were going to become the gorilla in the space worldwide, challenge the kelloggs and General Mills and companies that are processed food and were willing to cut price to do so. So number one, you heard what i said before, 700 billion of food sales out there. Listen, im down in new orleans today. Theres 30 million College Students that want to eat healthier foods. The market is gigantic for us to dive into. We just did a big acquisition called tillda. Today our sourcing in india is tremendous what were sourcing whether rice, coconut, pom ma grant. Part of building hain today is growing its supply and building the supply. You saw before, jane wells talking about getting into farming today. You know, hain may look at getting into its own farming or doing deals with farmers or Young Students that dont want to go to wall street or Tech Companies and set up their own farms. But what is out there for hain today the market in eating healthy not a fad not a trend. Will get bigger and bigger and demand is out there. Listen our last nielsen numbers, our growth is over double digit over 10, 11 . Not many Food Companies are doing that. Irwin, hate to cut you off. Say hello to my daughter down there. I know you know shes there and great to talk to you, sir. Thank you. President , ceo, chairman, hain. We had to rush irwin off, data after the break and stock trading. Breaking news on Consumer Sentiment when we come back. [ bagpipes play ] make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Female announcer its sleep trains interest free for 3 event. Get three 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 interest free for 3 event, on now. Sleep train your ticket to a better nights sleep welcome back to squawk on the street. The april preliminary read for university of Michigan Sentiment survey sourced to 82. 6. That is the best read. Well the best read since july of last year. That read at 85. 1 was the best since july of 0 7. Caution this is preliminary. We can come back in 2 1 2 weeks and adjust it. But nonetheless, it is a strong read on sentiment and it comes at a time where any good news may help. Kind of the downslide in stocks its given a rise to a lot of buying in treasuries. David, back to you. All right. Well see whether that lends more of a bid to the market. Tlt reversed down. Stop for stock trading. Next stock 328 billion market value. Has a new ceo. Microsoft. This is going to be the key to this market the next level. Microsoft with cisco and intel all yield well. If these stocks keep going up the high flyers will keep going down. Beware you need to see a reversion, that the microsoft cisco intel stop going higher and the high flyers go up and i dont know if youre going to see that. Thats why i think microsoft as long as it goes higher the money will fly out of the high flyers. But theres going to be a stand mate here today. Its just early. Keep pointing out the stand is being made too early if you think we can bounce. Friday afternoon can be a treacherous point. Wait for that. Well wait for mad money where youll wrap up what did happen today and also have some guests. What do we have coming up . A company i think is going to come public and stay close to it. Njoy. I dont know if youve ever smoked. I never smoked. This is smokeless tobacco. If the fda makes this a gateway product, meaning that they dont do any legislation, it is doesnt do any rules its going to go higher. If they decide it is a gateway product and not going to have it and rule against Electronic Cigarettes then njoy not a good situation. No. Have a great weekend, buddy. Great to see you. Great that you went to the play yesterday. I went. I missed the news but i was at the play. Dont screw it up. Go to the play. We got Terry Lundgren coming up very soon. Macys ceo lots to talk about. Stay with us. [ hypnotist ] you are feeling satisfied without standard leather. You are feeling exhilarated with frontwheel drive. You are feeling powerful with a 4cylinder engine. [ male announcer ] open your eyes. To the 6cylinder, 8speed lexus gs. With more standard horsepower than any of its german competitors. This is a wakeup call. This is a wakeup call. I and i got the tools ira to do it my way i got a lock on equities thats why im type e thats why im tyyyyype eeeee, i can do it all from my mobile phone thats why im tyyyyype eeeee, if i need some help im not alone were all tyyyyype eeeee, weve got a place that we call home were all type e can you start tomorrow . Yes sir. Alright. Lets share the news tomorrow. Today we failrly busy. Tomorrow were booked solid. We close on the house tomorrow. I want one of these opened up. Because tomorow we go live. Its a day full of promise. And often, that day arrives by train. Big day today . Even bigger one tomorrow. When csx trains move forward, so does the rest of the economy. Csx. How tomorrow moves. Stops with the markets this friday morning, stocks bouncing but still in the red. The nasdaq flirting with its worst week since october 2012. Jim stewart will be with us at post nine to sort through the rubble. Macys Ceo Terry Lundgren joins us for an interview. His thoughts on the state of traditional retail and on the consumer. Lions gate hit series mad men back this weekend and not the only hit the company has in its lineup. The vice chairman will be with us with all the details on mad mens premier and the movies in the pipeline. We start with the markets and anp ipo that has opened, zoes kitchen, fast casual restaurant opening with a bang. Shares up almost 10 at the open, 66 . Well be speaking with the ceo a little later. First few trades looking hot in an otherwise down market. Markets are lower again today. Theyve recovered some of the earlier losses but were following that selloff yesterday. Momentum stocks like tesla and netflix and facebook which boosted the markets in the past are having a meltdown you could call it. Dow, nasdaq, s p, still red, dow down about 77 points at this hour. Lets bring in jim stewart with the New York Times and a Pulitzer Prize winner. Written about the crash in the 80s, 90s 2007. It doesnt feel like 2007 or 2000 but clearly a correction taking shape and i think thats incredibly healthy. Im relieved. We have gone a long time without a correction. When you go this long it typically never ends well. Stocks do not exist in a vacuum. They depend on earnings. If you look at the recent multiples, these things coming back to earth now they were off the charts. In fact, specifically, its been since 2011 during the european debt crisis when we last saw u. S. Stocks correct. Why its getting attention the Technology Bust were seeing. Not small 10 correction type moves, 20, 30 . I was looking at some of these yesterday. Down in the 25 to 30 range. These are very highly visible companies that everybody has been talking about the last two years. Theyre all on the radar screen. People say oh, my god these things are down, its bad. But if you look at the value sector its not bad and i talked to Value Investors this week theyre finding attractive bargains finally. Go ahead. Its the momentum guys who have been getting hurt. Yeah. And or a lot of hedge funds invested in telecom, media, technology, tmt where theyve had to take down their gross exposure. But people want to try to draw analogies to 2000 and i dont know if i see it, jim. No. Weve had this conversation previously. There are multiples to earnings for many of the companies. There is significant Revenue Growth from many of the companies and theyre not going away. Absolutely. Were not seeing the multiples we saw in 2000. Also 2000 came after about, what, eight to ten years of relatively uninterrupted rally. Its not 2000. Its not 2007 either. 2007 multiples are better but the fundamentals were deteriorating so fast. Theres no real economic reason for this correction. It was simply stocks had gotten too expensive. Others would disagree. Deutsch bank has a note out today where he traces this back to the fed withdrawing its liquidity and if you go back to march 9th, 2009, technology is up 250 , biotech is 284 . The broader market, only 177. So its actually those sectors that have done really well on qe that are now suffering and that is potentially a bigger wakeup call if the fed is going to end that money printing by the end of the year, isnt it . Thats a reasonable point and i think qe certainly has pushed people into risk assets including stocks and out of fixed income, but at the same time those things have been going up, earnings have been going up. Weve had tremendous growth in earnings over the same period of time. I dont think the multiples have really gotten that far off the charts except in this cluster of the glamour fast growth stories. Suppress the fear. If it suppressed the fear and expanded the multiple that might have happened. The vix has been rather low, dangerously low. There is i think thats a fair point. But i dont think its wildly out. Watching the vix it took a 15 move higher yesterday. You look at the psychological impact of some of these things and thats what has people worried. You mentioned theyre glamorous stocks, the Growth Stocks the public is aware of the facebook and twitters of the world when the king ipo. I know. Dropped 16 on its debut and when Michael Lewis is telling the world on 60 minutes the stock market is rigged. The complements of factors right now isnt good. The retailer investor was starting to come back. I think the psychological factors will pass. Sounds boring but the fundamentals eventually always reassert themselves. And i think were seeing that happen now and as i said in the beginning this is very healthy. Lets talk about the book. Yes. Finally a lot of people have been waiting for you to review the book thats been at the center of that storm. Michael lewis flash boys i hear its not very complimentary. Should be on line today on the New York Times side. I think michael is a great writer, love his books. This was disappointing to me. Number one, theres really no news in the book. The news is Michael Lewis discovered High Frequency trading. Scott patterson wrote all of this and more in his 2012 book dark pools. Number two its not a fair book. I hope my review is more fair to this book than the people that get slammed. Goldman sachs gets slammed, the wall street journal gets slammed for not picking this up. The sec gets slammed. No one gets to tell their side of the story. One thing ive learned as a reporter every story gets better when you hear the other side. The thing is its having a real effect. The sec is looking whether it needs to shift to these dark pools. Asset managers may set up their own trading platforms. This book may really change the landscape into yes. And i i applaud that. I think thats great. These things do need investigations. They all say they were investigating but were they really . Good for Michael Lewis, able to shine a spotlight on this. But it says a lot about our culture that Something Like this, the celebrity factor, i think is what brought it into the public attention and thats been good in this case. But as a book, as journalism, i found it disappointing. Looking forward to your review out this weekend in the times. Yes. Thanks. Book review. Book review, yes. Thats jim stewart, common sense. Earnings season has kicked off big time. Two banks out with their earnings, wells fargo posted better than expected firstquarter profits, but jpmorgan is the real focus. The stock in negative territory as it misses, hurt by weak trading revenue. Kayla tausche has been on a number of calls or listening to a number of calls with Senior Executives and joins us now. Whats the take away . Its really a tale of two banks. You can look at the stock prices of each of these to get that picture. Jpmorgan down about 3 . Wells fargo managing to be up in this market. At jpmorgan which is really the focus today, nearly every unit saw a profit decrease from a year ago. Weve been talking all morning how trading revenues were extremely soft and mortgages were bad too and how a severe slow down here affected them. I want you to take a look at this chart. How loans were growing over the last quarter at jpmorgan. This is the worrisome fact, loan growth appears to be so mixed that with an improving economy and a backdrop of such for the Banking Industry were not seeing more growth at the consumer and the corporate level this quarter. Now if you look at wells theres a lot to like. You have commercial and consumer loans up slightly there, balancing out some of the weakness the company had in wholesale banking and saw 42 improvement in credit losses and a positive outlook for the rest of the year. Thats why that stock is doing well. Mortgage banking is a core business for both. The First Quarter is usually fairly quiet in mortgages. They do ramp up in the spring but conventional wisdom would tell you since wells is the nations largest mortgage provider white get hurt even it would get hurt even worse by the slowdown. Wall street is looking at a couple numbers and that is the pipeline which is actually up and across jpmorgan and wells fargo you see originations which is one of the barometers down equally from last quarter but at wells you look at applications in the pipeline and they have been able to hold up relatively healthy. A lot of people are asking why. Take a look at this reuters story from early february. Wells fargo edges back into subprime as the u. S. Mortgage market thaws. Now originating markets above 600 Credit Scores than the previous limit of 640. Starting to dip its toe back into what its calling another chance mortgages. For several quarters we wondered why wells fargo has had a surplus of capital on its books. By every single measure when you started to see them go back into this market you understand why. Thats going to be a huge question for the company on the Conference Call when it gets under way is how exactly is wells fargo keeping this pipeline healthy and what does it mean for the broader economy there. Well have that for you as soon as we get more headlines. Join us in about 20 minutes with more. Well see you later in the program. Up next on the program macys Ceo Terry Lundgren joins us live for an exclusive interview. You dont want to miss about what he has to say about retails. Zoes popping on its ipo this morning. The casual dining restaurant priced at 15, currently trading at 24. The ceo will join us live for a first interview after going public. Squawk on the street will be right back. Right back. Who do you work for . Your boss . Yourself . Your parents . Your family . At baird, what matters most to you. Matters most to us. As an Employee Owned firm, our Financial Advisors have the freedom and resources to realize a plan to fit your familys unique needs. Well listen. Well talk. Well plan. Baird. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. Were here to help you turn your dream into a reality. Bulldog i cant wait to get to imattress discounters good and early for the tempurpedic bonus event. Ill have first pick from the huge selection of tempurpedic mattresses. Then, ill get to choose 300 in pillows, sheets, and other free gifts. On top of that, up to 48 months interestfree financing. Its a Beautiful Day for mattress discounters tempurpedic bonus event. Mmm, some alarm clock you turned out to be. Mattress discounters welcome back to squawk on the street where we are watching the retailers taking a hit today. The xrt, the etf that tracks the retailers down 1. 5 . Leading the way down is the gap, that stock is down more than 3. 5 after reporting Monthly Sales falling 7 in march and reiterating guidance below estimates. The gap is the top loser on the s p. Simon . Thank you, sheila. Coincidentally the biggest players in the retail space are coming together in arizona to talk everything from the consumer to the latest trends in the industry. Courtney reagan is walking with the giants and brings us a special guest. Good morning. Good morning to you, simon. I am here in tucson, arizona, joined by Terry Lundgren, ceo of macys. Were here because this is the global retailing conference and its supported by the Jerry Lundgren centering of retailing at the university of arizona. Youre here to recruit talent. The new promotion of jeff is that part of the success plan for macys. Hes one of the best merchants in the industry. He brings a fresh new perspective and look ive got a great talented team and say the reason weve been as successful as we have for the last four years as a team and jeff is one of the key guys. What this is, is a signal hes take on an big role, big responsibility. He covers merchandising, dotcom, he covers marketing and he covers now our private Brand Development so the title had to go along with that broad expansive role. Thats what it is. Im going to be around for a while so i love what i do too much. Jeff is a key partner. You had a birthday, looking great, of course we had to ask, youve been talking about the changes that are to come for macys and in retail in general here. General Growth Partners has about 1100 malls and told jpmorgan 400 are b or b minus and will be consolidated. What does that mean for macys when the malls smaller . All the Mall Developers and myself and some of the key retailers are coming together and trying to sort this out. Because we have to figure out whats going to be like for the next ten years. I think theyve done great job for the top 100 malls in the country that are powerful and drawing the traffic in. But ultimately weve got to think about what should the size for the footprint look like, the content be, new ideas, should there be more entertainment, more movie theaters, restaurants, a different mix than what we have today. At least were all coming together to talk through those very things and im happy and i think by the way the general growth is very active in this role so i do think there will be changes in the next several years. I think sara has a question . Yeah. Terry, when i see you sort of makes me nostalgic from cincinnati, i remember lazarus before macys changed all over. I miss those Department Stores. When you look at the Competitive Landscape out there, the jc penneys, the sears, you have been outperforming but what is the future of the Department Store in things are changing. Well, the good news is that we took i took this on about four years ago and we changed 400 Department Stores across the country to the macys name and did it in one day as a matter of fact. That was a bit risky on our part. It allowed us to become a National Retailer or Department Store and we have a unique space in that regard. The largest seller of almost every brand you know of and have heard of. I think to have that and the localization efforts made us unique. We always say, you know, we dont need the consumer to spend more money, just with us. So far for the last four years weve picked up almost 4. 5 billion on samestore sales. Seems to be working. At least in our case we feel great about the strategy and the future of our company. So weather has been tough for a lot of retailers. Its been a tough year here. Have you began to see the customer traffic pick up, sales pick up, as the weather has turned maybe not here in tucson but in general . Definitely. Listen, no question about it. I mean, the weather was brutal. We live in new york but even around the country in the midwest and different parts of the country, i mean it was really brutal and january, february and early parts of march. But as soon as it started to turp, the weather started to get better and were now easter its a big easter shift and easter end of march now into april, those do matter in the apparel business and industry and foot ware categories as well. So definitely saw a change in the trend once that happened. And we also saw in the Southern Tier between california and florida markets, texas markets those businesses were significantly better than the northern business. So we feel good about whats coming but it was definitely for i think most retailers definitely were impacted by weather. I think simon has a question. Terry, good morning to you. Gap is under some pressure today. Samestore sales as youre probably aware. Not what the market hoped for. Clearly problems still at sears. Major problems at sears and jcp is attempting the turnaround. As you look outside your own business what is working now and when you see a problem typically what does it stem from . Well, first of all, simon, you know, what we do so i think so well is we really understand local markets. We have 800 macy locations across the country. Were in tucson today. I can tell you what the customers want in this particular market is so incredibly different than what they want in Harold Square in new york city or what they want in minneapolis. You know, so i think our ability to have local talent on the ground who are former merchants and marketers guiding us on the local assortments has meant a gigantic difference in our overall ability to execute at a local level. I really think thats a big difference. And you and i have spoken about that before and the power of the bayers and regionalization of the buyers. When you look at a gap, are you saying structurally it has problems or if you look at what importantly they try to do with jc penney where they try to drag the market across the country or one direction is that again the structural era of your view . I cant tell you, simon. I have not analyzed those businesses and i really cant tell you the inside story about whats behind their numbers and their performance. I can only tell you what weve done. I know for sure is a Different Organization structure than either of those companies that you mentioned. So just to kind of wrap it up and bring it home, youre, of course, watching whats happening at macys but bloomingdales too, perhaps a different customer, some crossover. What are you seeing the consumers feeling how their confidence is right now . I think it was definitely slow. First of all we had a great year, we had the fourth year in a row with the fantastic performance. Our year ended the end of january and while we it was our smallest increase on the same store sale basis of the four years, up 2. 8 , we picked up more market share last year. So i think what were seeing is that the overall market was not good but our growth with market share is has continued to improve and so i think what that tells us is that were on the right track and that while the consumer is definitely, you know, slow and Consumer Confidence is low at the beginning of the season, as it starts to improve and im pretty confident its going to improve from here, the Current Trends i do believe that will pick up perhaps even more market share than we have in the past. I certainly hope that the Consumer Confidence improves across the board and for macys. Thanks for joining us and dealing with all the bugs. Sorry about the bugs. Good luck with the rest of the conference. Back to you guys at the New York Stock Exchange. Its a pretty shot, courtney. Thanks again, terry, for joining us. Scott cohen has breaking news right now on detroit. Scott . According to detroits two newspapers the news and free press reporting from the courthouse the judge in the detroit bankruptcy has approved a major deal, an 85 million settlement with ubs and bank of america over some very controversial swaps contracts that many believed plunged the city into bankruptcy in the first place. The city would have had to pay 288 million to terminate these swap deals which many contended were illegal in the first place. Under this deal the banks will get just 85 million and in turn, they will support the citys reorganization plan. That is key. All the emergency manager kevyn orr needs is a vote or two and this this way he will get it to essentially threaten the unions with a cram down of his reorganization if they dont go along with it. Its a major step forward in the detroit bankruptcy. The banks taking a hair cut but if they had not done this, they might have faced some lengthy litigation and the bankruptcy, reorganization in this largest municipal bankruptcy in u. S. History would have gone on for much much longer. A major step forward in the detroit bankruptcy well continue to bring you deal tails as we get them. Thank you very much, scott coenh coenhen. A deal involving alibaba, a giant that is in the nottoodistant future going to be a Public Company, public here at the nyse hasnt filed yet but what it has done announced a deal to acquire autonavi leading provider of digital map content and navigation based solutions in china. The overall price about 1. 5 billion. Now alibaba owned roughly i think its 28 as i page through the press release here of the company. But will be paying an additional 525 in cash for ordinary share or u. S. 21 and share for american depository share. That price representing a premium of 27 of the companys closing price. 1654 is what it was. You just saw the performance there of the ads. That was on the 7th of february. The date that the company had announced it received a going private proposal from alibaba. Again this is something this is something that has been in the works and perhaps expected by the market. But interesting as alibaba continues to make acquisitions prior to its large initial public offering. Rumors it will be coming to the nyse. What i can tell you a lot of bankers involved here. Of course theyve been having their meetings in china recently and they will be filing the s 1 lets call it in the nottoodistant future. Perhaps we see this Company Public by late summer or september. Despite the Market Conditions. August september is a ways away from now. I guess the ipo outlook has changed. We will get an interesting view into their business when we get yahoo s results. Good point. Kaf david, another deal. Up next, zoes kitchen is trading as a Public Company for the first time speaking of ipos. Theres the stock popping in its debut. The ceo is here on the floor. Hell be joining us after the break to talk about the growth in zoes kitchen. Fast casual restaurants across the southern part of the country. Country. Today is friday today, we greet you. Treat you. Care for you. Today, you can come to Cleveland Clinic for anything, everything or just to get that thing checked out. Big, small, and yes, the best heart care in the nation. Its here everyday, for everyone. Thats the power the power, thats the power of today. Cleveland clinic. Call today, for an appointment today. Aflac, aflac, aflac [ both sigh ] ugh you told me he was good, dude. Yeah he stinks at golf. But he was great at getting my claim paid fast. How fast . Mine got paid in 4 days. Wow. Thats awesome. Is that legal . Big fat no. [ male announcer ] find out how fast aflac can pay you at aflac. Com. 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Call or click to open your fidelity account today. Shares of the fast casual restaurant zoes kitchen have started trading, priced at 15 and have let at the open this morning one of a number of ipos we have at the New York Stock Exchange. It priced at the top of its range and joining us for a first on cnbc interview is kevin miles, the ceo of zoes kitchen. Good morning into good morning. No one has bought a tower of food like this. We have a food pyramid. Like to be the first. Concerned about the fish but lets leave that for the moment. What were you telling people during the building process. I assume its a growth argument. Were a growth concept, incredibly well received across the u. S. The markets were in today. Southern states. Primarily. Kind of texas through up to philly today and thats where were growing. Were a mediterranean concept. Better for you options. Fresh fish, lean proteins, whole grains, lean protein, produce, grilling and baking. Yeah. Those of us in new york arent as familiar with the change chain. Any plans to move out east . We continue to move east. Were in philadelphia and kind of southern new jersey and hopefully one day up this direction. 111 restaurants in 15 states. I think youre adding 28 to 30 during the course of this year. Do you own the restaurants or franchises . We own primarily all. A couple franchisees but were a company model. Why not . Were seeing that franchising has been a little make morse economic sense for the bigger guys . We have great Franchise Partners today but continue to feel like we can grow our growth and were excited about the model were building. Brentwood associates have a 71 stake, goes down to 46. Any of the proceeds for your own corporate use. All the initial shares are primarily. Theyve been a fantastic partner to us. Our proceeds are to help spun our growth into the future. The big news this week from the retail perspective was that walmart is going to increase the number of organic lines that it carries and it says in major discount where other people are selling it at the moment. What does that mean for you . Customer tastes are changing but the competition is getting hotter. They in some senses are a direct competitor. Theyre from a grosser competitor standpoint. Were wholesome fresh quality foods, fresh grains, fresh produce. It is a crowded space this fast casual and you have big players in there with chipotle and panera. What is your Value Proposition . Again, i think were unique in the mediterranean space. Wholesome mediterranean, not greek, not your traditional fa laughle. Again the wholesome lean proteins. You have good humus. Whats special about the humus . That its hand made in the back of our kitchens every day across the country. We make everything we bring in our kitchens fresh. Is that a hard model to have a every day fresh. We keep it simple and fresh. Were trying to get a read on the consumer to see how solid we are and if were going. I appreciate your expanding but what is the general read on stores open a while . Theyre doing fantastic. Its really resonating with customers across the u. S. Better for you option. Its quite frankly not out there. Average bill ten bucks . Little south of ten dollars. Good to meet you. Thank you so much. Kevin miles, the coo of zoes kitchen. With a food pyramid in the stock exchange. Were going to dive into the Bank Earnings that we got a little earlier today. Wells fargo, jpmorgan on the move. Well talk to an analyst about that. Also well talk to Morgan Stanleys head of mergers and acquisitions, robert kindher, time warners banker live at post nine with david in a minute. Minute. In 1953. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, 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 current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. [ male announcer ] when fixed income experts. Work with equity experts. Who work with regional experts. Who work with Portfolio Management experts, thats when expertise happens. Mfs. Because there is no expertise without collaboration. Mfs. Hi, are we still on for tomorrow . Tomorrow. Quick look at the weather. Nice day, beautiful tomorrow. Tomorrow is full of promise. We can come back tomorrrow. And we promise to keep it that way. Driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. What a day. Cant wait til tomorrow. Mergers and acquisitions, defending against activism, weve had a little activity certainly in activism, somewhat in mergers and acquisitions. My next guest has been at the heart of a lot of the biggest deals including the sale of Time Warner Cable to our Parent Company comcast. Joining me at post nine Robert Kindler vice chairman and global head i love saying that, global head of m and a at morgan stanley. One of those great made up titles. Its a great title. A great title, it is. Like gary kaminskys vice chairman title. Talk about Time Warner Cable, they were in front of mr. Cohen and the gang in front of the house this week but there are continued rumblings about charter. You were dealing with and defending and negotiating for Time Warner Cable for both of these parties, charter and liberty and comcast. Do you think the charter is really trying to perhaps consider mounting another bid . Well, its obviously hard to know what charter is doing. Its hard to understand what charter is doing. Why do you say that . The market has completely ignored it. If you look at where the stocks are trading, Time Warner Cable and comcast, Time Warner Cable trading based on the deal. So whatever they may be thinking, whatever the strategy may be, its just not getting any traction in the market. Do you think theres a realistic ambition or hope on the part of some investors that could prove to be fruitful . I mean how would charter go about doing it . Youre a tactician. Im a tactician. Advisie ining charter what w you tell them . As with all things we have a signed merger agreement, a vote coming up and charters what they had on the table was so far off of what was signed up, so look, as i said, i cant really speculate what these guys are thinking about but its absolutely clear no one is paying any attention to it. Other than you. Soliciting votes against, other than me. It does come back to the idea that even if they were to do something, of course comcast could change the consideration, because it is notable that comcast chose to use all stock. Theyve been criticized for that. I know you were not advising comcast. Others were. But why did comcast choose not to use some cash in this deal which would have been more creative for them . Look, comcast has already said that if the deal does happen theyre going to buy back a lot of the stock. They can sin threatically get to the same way. They could borrow at 2 . Come on, so much more from the Time Warner Cable perspective. Please, all stock deal you goat ride the upside of the deal. These guys are smart guys at comcast and think its a very good deal. All stock. They can get to the same economics by borrowing and repurchasing. You believe that . Sure. All stock no breakup fee. Breakup fees as you look, historically, if you look at breakup fees, they actually are something of a red flag that people are concerned about getting deals done. They dont really compensate anyone for anything. So the fact is that doing it without breakup fees we think this strategically makes sense and think its going to get done. No sweat from both companies in terms of i certainly never sweat. Ive never seen you. Youve been busy of course. Cross boarder has been a certainly key characteristic of what weve seen, san torre beam comes to mind, another of other deals, tax inversions, theyre all over the place. I think its a big part of the market. If you look at this year so far over 40 has been gross border. Last year you saw deals like we advised shine way in buying smithfield, suntori in the beam deal. An interesting deal is Tokyo Electron, we advised Tokyo Electron in merging with aplied materials. Whats interesting about these deals you can issue stock now anywhere in the World Without fear that its going to flow back. Same thing happens why is that . People used to wonder, worry, if you issued stock it all comes back here, swaps the common here and the stock comes down. Doesnt happen anymore. Were in a global market. They all have different profits to invest in. This is important. I think this is absolutely a trend thats going to continue. All right. Tokyo electron its interesting you mention that and Applied Materials get together and then a taxpayer i think the netherlands netherlands. Tax inversions come on. We did one of the first ones. These transactions are going to continue. Theres been proposals in congress to end them. I think its doubtful it gets adopted. The fear of that happening is going to push more people to do them this year. Time for some predictions. Right. You come on, you join us a couple times a year at least. You seem to be positive at the end of last year if i recall when we did an interview for this year. I would say this year, you also got double counting, the numbers look better than they are. Doesnt feel that good to me. Is it going to get better . Youre right. Its too early to call a great year but it is a very good start. You know, volumes were up a lot. Deal count only up a little bit. Its a bit early to start. What i think is the most notable thing is that investors are telling companies we want you to do deals. And this whole wave of stock buybacks which ive always been skeptical about anyway, the concept you can make a company more valuable buying back stock is not really increase earnings per share and your return capital to shareholders because you dont have a better use for it. Thats the problem is that if people are just doing buybacks now, theres place for them for sure, if people really have excess capital and dont need it for the business, but what the investors really want is for people to be doing deals and getting growth. All right. So that conversation you have sometimes in the board room or when youre flying all over the place making calls to the executives saying hey is it a different conversation than you were having a couple years ago and the willingness to say im not going to do the buyback im going to deploy capital. People were skittish, ill invest in my own stock. By the way, investors were for want of a better word letting them get away with it, were fine with that. Now the tide has turned. People who are doing deals their stock is getting rewarded a lot. I think thats where we are now. Again ive always been skeptical on buybacks and every now dividends are getting far more for your buck than buybacks are. As always thank you for your insights. Thanks a lot. Rob kindler. Global head of m and a at morgan stanley. Up next we have the final season of the hit series mad men premiering this weekend. One of lions gate most successful franchises benefiting from the hunger games and the divergent trilogies. Michael burns will join us live, on all of that when we come back after this. After this. Beautiful day in baltimore where most people probably know that geico could save them money on car insurance, right . You see the thing is geico, well, could help them save on boat insurance too. Hey okay. Im ready to come in now. Hello . Im trying my best. Seriously, im. Im serious. Request to come ashore. Geico. Saving people money on more than just car insurance. Maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. Mad men returns to amc for its seventh and final season with the premier episode set to air this sunday night mad men one of lionsgate most successful franchises. The companys tv businesses encompasses 34 Television Series on 24 networks. Michael burns, vice chairman of lionsgate and joining us for our first on cnbc interview. Good to see you again. Nice to see you. So what are we, in the 70s yet . How is don . He was left in bad shape at the end of last season. I think youre going to see a continuation of don draper having as many ups and downs as the markets of late. Volatile period for don draper. We wont ask you for any spoilers but in terms of the business proposition, obviously mad men has been very successful for you in terms of what its brought in, in terms of fees from netflix and others. Whats your next big one . How much pressure do you have to get the next mad men on . Ill first say, matt winer created a fantastic show and we couldnt have better partners than amc. As you know were breaking the last season into two. We feel that we have as you mentioned, we have 34 shows on the air, were excited about orange is the new black, if you havent seen that, a hit show for netflix and we like the ratings trajectory of nashville on abc, but its hard to pick a favorite child. From an economic point of view, working with netflix, for instance, on original programming versus an amc, is that a new model . Is that something youre going to explore to try to do more of . We are. We actually have a new show with hulu called dead beat as each one of the new platforms emerges around the globe were trying to create content for it. Again its a good time to be a content creator and distributors. Michael, i was trying to work out how much hunger games catching fire the first movie has grossed. Youre getting on for a billion dollars now, arent you . Hi, simon. We feel very good about the again, the trajectory of the franchises. Divergent about 116 million right now, should be close to call it 150 million domestic, we think it will follow a very similar path to twilight and the first twilight the fifth compared to the first twilight did approximately twice the Worldwide Business so we feel good about that. Im also happy to announce today that we are officially going to have the divergent three book series dividing that into four movies so alee gent, the third and final book will be two movies. You changed the comparison i started with. As far as the hunger games first film that is getting towards a billion dollars. Some might say divergent was a little dye disappointing against that major. Would that be fair comment . Not disappointing for us. Not compared to where we had it in our model. My sense is that again, its one of the highest grossing movies opening this year so far. Hunger games global phenomenom, but give it some time. You take a look at how these things build over time. Catching fire, we did catch lightning in a bottle with that one but we feel very good about the franchise of divergent going forward. We think we have franchises with now you see me shoot a second one of those the expendables goes on and on. Gods of egypt, eric has never been more enthusiastic than that. Were shooting that in australia right now. Again were not disappointed with a box office result like we have for divergent. David faber. As you point out, youre good at sourcing literary content and bringing it to the screen whether a big one or a small one. I do wonder you mentioned, of course, the demand for content but theres an awful lot of companies out there who are supplying it these days. Do you see that youre going to continue to have the kind of Pricing Power you have in the past . I think were in a unique position, david. If you take a look at what we have, what weve built, for example, in the young adult space and the fact that we have so many successful shows, we have almost 400 million facebook fans alone on facebook with our intellectual property. That gives us a very competitive advantage to be able to reach out and touch those consumers. And also, weve got a track record whether it be the horror space or young adult space or some tricky movies to market, weve got quite a track record so were seeing, i would say, the vast majority of all the great material out there. Youve done an incredible job building the company. Theres no doubt about that. Investors obviously have to be happy with it over a period of time, the stock lately has been getting beat up. But it always comes into a conversation about consolidation, about whether lionsgate is big enough still to continue to compete where we may have a world where there are fewer and fewer distributors, for example. Just give me your strategic sense in terms of the willingness and or whether at some point this is a company that does have to consider consolidation . Well, the company is basically the stock price is where it was about a year ago and a lot of great things have happened since then. Whether its new franchises, whether it is cutting our debt cost in half, paying off 350 million in debt, weve done a lot of great things. Our settlement rate with the theaters is better. Weve got a bunch of shows picked up. Movies are working. Good time to be in but is there going to be consolidation . I think there will always be consolidation, because everyone is looking for growth. Weve been growing at compounded 20 a year for the last years since we arrived. And then you get thrown into a growth bucket and you get killed when everybody decides to throw out the Growth Stocks. I was interested to hear your previous guest talking about stock buybacks. We think stock buybacks at the right price are a good idea. We have taken advantage of this Market Correction of late. We bought about call it 60 million of stock over the last few weeks. We think that there are deals that get done. We think that well continue to pay a dividend, but we think that our stock is a pretty accretive transaction for us. But ultimately whats going to happen with lionsgate, is it going to be a consolidated play . I dont know. Our big shareholders will decide whether that makes sense, and at what price. All right. Thanks for sharing. Michael burns, with your thoughts on the new movies and shows. Looking forward to the mad men premier this sunday. I think youre going to like it. I know the shorts are getting the skirts are getting shorter, changing with the times, thats all ive heard. Everyone needs a new start. Okay, thank you. Good to see you, michael. Still ahead, the legendary investor and founder of home depot, ken langone. 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The last edition this week of the santelli exchange. What a week its been. You know, the treasury market continues, in my opinion, to be the market you really want to Pay Attention to if youre trying to get it right in the big picture. Lets consider maybe something i dont say enough, in my mind its there, but lets share the view of economy has improved. Is there any doubt about it . No. Weve talked about grading on the curve rather than raw horsepower. Grading on the curve, yes, the u. S. Economy is outperforming its peers. But that isnt only the issue we need to be concerned about or Pay Attention to. We need a certain amount of Economic Growth to accomplish all the things we need to prioritize with regard to spending, how we create revenue in the economy, tax base. Its important. And we are probably as a matter of fact, i would say we most assuredly are not at our growth potential. So the real, real issue of whats going on right now in the marketplace is that the treasury market on the long end just doesnt seem to be moving higher in yield the way it normally would, or the curve steepening we normally see when the economy is going to gain traction. But its improved. But it hasnt improved to the extent it can. What are the reasons . I think one of the reasons is this whole tina principle. There is no alternative. Sometimes the solution becomes the problem. What that basically means is there is no alternative to riskier assets. Heres the problem. I may have to wrap. Simon, back to you. Okay. Thank you very much, rick. Lets go to the white house where president obama is making a statement on secretary sebelius. Even when the success the successor is wonderful. In early march, Kathleen Sebelius, my secretary of health and Human Services, told me shed be moving on once the first openEnrollment Period under the Affordable Care act came to an end. And after five years of Extraordinary Service to our country and 7. 5 million americans who have signed up for Health Coverage through the exchanges [ cheers and applause ] shes earned that right. I will miss her advice. I will miss her friendship. I will miss her wit. But i am proud to nominate somebody to succeed her who holds these same straits in abundance, Sylvia Mathews burwell. [ applause ] now, just a couple of things about kathleen. When i nominated kathleen more than five years ago, i had gotten to know kathleen when she was governor at kansas and had shown extraordinary skills there, was a great advisor and supporter during my president ial campaign. And so, i knew that she was up for what was a tough job. I mentioned to her that one of her many responsibilities at hhs would be to make sure our country is prepared for a pandemic flu outbreak. I didnt know at the time that that would literally be her first task. Nobody remembers that now, but it was. And it just gives you a sense of the sorts of daily challenges that kathleen has handled, often without fanfare, often unacknowledged, but that have been critical to the health and welfare of the american people. Shes fought to improve childrens health. From birth to kindergarten. Expanded Maternal Health care. Reduced racial and ethnic disparities. Brought us closer to the first aidsfree generation. Shes been a tireless advocate for womens health. Of course, what kathleen will go down in history for is serving as the secretary of health and Human Services when the United States of america finally declared that quality, Affordable Health care is not a privilege, but it is a right for every single citizen of these United States of america. [ applause ] kathleen has been here through the long fight to pass the Affordable Care act. She helped guide its implementation, even when it got rough. Shes got bumps. Ive got bumps. Bruises. But we did it because we knew of all the people that we had met all across the country, who had lost a home, had put off care, had decided to stay with a job instead of start a business because they were uncertain about their health care situation, we had met families who had seen their children suffer because of the uncertainty of health care. And we were committed to get this done. And thats what weve done. And thats what kathleens done. Yes, we lost the First Quarter of open Enrollment Period with the problems with healthcare. Gov, and there were problems. But under kathleens leadership, her team at hhs turned the corner, got it fixed, got the job done, and the final score speaks for itself. There are 7. 5 Million People across the country that have the security of health insurance, most of them for the very first time, and thats because of the woman standing next to me here today. [ cheers and applause ] we are proud of her for that. Thats an historic accomplishment. Thats right. And, by the way, in the meantime, alongside 7. 5 Million People being enrolled, Health Care Costs under kathleens leadership are growing at their slowest rate in 50 years. I keep on reading folks saying, well, theyre not doing anything about costs, except theyre growing at the slowest rate in 50 years. What does that mean . Thats, in part, because of kathleens extraordinary leadership. Health records are moving from dogeared paper to hightech systems. Kathleen partnered with the department of justice to aggressively pursue Health Care Fraud and return billions of dollars, record sums, to the Medicare Trust fund. All told, kathleens work over the past five years will benefit our families and this country for decades to come. So we want to thank kathleens husband, gary, the first dude of kansas. We got two outstanding sons, ned and john, whove been willing to share their mom with us these past five years. And, kathleen, i know your dad, who served as governor of ohio, inspired you to pursue Public Service and who passed away last year, would have been so proud of you today. So, kathleen, we want to thank you once again for your service to our country. [ applause ] all right, were you just listening to the president touting Kathleen Sebelius progress as secretary of health and Human Services for the five years she was serving, talking about how she shepherded the rollout of the Affordable Care act platform, and also talking about how she advanced the Health Care Sector and started to bring the growth of costs down, at least somewhat. We want to get to john harwood, our eyes and ears on the ground there. Of course, he can put this into context for us. John, we expected that since the news broke last night. But what did you take away from what you just heard . Well, i think the president is trying to sweeten the departure of Kathleen Sebelius, and it is a bittersweet moment. Shes been with him now for five and a half years. They did see this through, the end of the open Enrollment Period. This is a moment of accountability for the difficult time they had with the rollout last fall. The president , when he was asked last fall when things were at their worst, are you going to replace Kathleen Sebelius . And he said my priority is to get through the end of the enrollment process. But he didnt push back against the idea that he would make a change. That is, in fact, what has happened. Hes nominated sylvia burwell, someone with a bulletproof reputation in democratic circles, probably as confirmable as a democratic hhs nominee can be. And so, i think the president s decided to try to turn the corner, as he said that sebelius and her team did after the rollout problems, as they prepare for midterm elections when republicans make obamacare a big issue. Hey, john, did she jump or was she pushed . Did she jump or was she pushed . You know, the white house has said that she made the decision she told the president she would leave. But i think the writing was on the wall. So im not sure it may be, simon, a distinction without a difference. I think the president had signaled that he wanted to make a change, and she could see that as well as anybody else. John, this is well timed, it is well choreographed, as well. Do you think this will actually have tangible effects on the midterm elections the way that you see it . Doubt it. Maybe a little bit. You know, the Affordable Care act is doing slightly better in the polls lately, as theyve had a Successful End to the Enrollment Period. And i think having a new face at hhs, assuming that she can be confirmed, may help we turned the corner argument, but i dont think it will be a major turning point of any kind. Kathleen sebelius wasnt the name on the Affordable Care act. Its obamacare, and hes still there. Before we let you go, john, it seems ages since we talked to you. Do you think they could still lose control of the senate come the midterms . Yes, sure they could. I think its pretty much a 50 50 proposition whether that happens or not. Republicans have to gain six seats. They certainly have plenty of opportunities to gain six seats, but weve also seen in 2010 and 2012 they had favorable geography in terms of where the Senate Elections were then, and they didnt get the job done. So democrats are working very hard. And i think you can see this change as part of that effort. Okay. All right, john. Good to see you. John harwood joining us from washington, as Kathleen Sebelius leaves the health post and is replaced by the current budget director. Lets check where we are on the markets. Importantly, the selling has abated. Were positive on the nasdaq, but were not. Were slightly negative. Flat overall, with gilead sciences, theyve risen above the short line. The main concern on the downside today, in the wake of the earnings report, would be jpmorgan, which is currently down 3 . And that has also been one of the laggards on the dow, as well, throughout yesterday, all through this week on the trading. So well certainly keep an eye on those financial stocks. We also want to look at volatility. Weve seen some huge moves throughout the hour, and well keep you posted, because the 11 00 hour throughout this selloff has been the hour where the market has seemed to turn off. So we want to get more on tech and nasdaq, which at its worst was down 47 points this morning. So well introduce you to this mornings squawk feed. Joining us is cara fisher, along with our own jon fortt. Guys, we want to start with the market. Cara, we had jim stewart on the last hour who said every time the market has gone up without a healthy correction, it ends badly. Are the people in your camp looking at this as a healthy correction . Well, you know, it did go up a lot. So i think there was a lot of high stocks, linkedin, facebook, twitter, all sort of reaching rather large numbers. Im not clear on what that why that was happening. So i think theyre probably glad for a correction, although i think the decline has been pretty precipitous in the past month, i guess. Cara bad news. Cara, the valley feels different about these market moves than the street does. A lot of companies have been using their stocks as currency in different ways to make big acquisitions. Facebook comes to mind. Also, its important as compensation. What do you think the impact is out there, just kind of depending on which way the market moves from here, if there is a dramatic move . Well, its not good. They have been using the stocks think about facebook, the two acquisitions it made, a lot of it was stock. Google uses cash more. All of the companies are using stock to their their expensive stock to buy things. So thats an issue, obviously. Its a get while the getting is good kind of idea, i guess. And they pay people in stock. Even though they pretend in silicon valley, they dont care about the stock market, they completely care about the stock market. And the Real Estate Market with the Real Estate Market, cara, it would suggest thats the case. You lived through the weve all lived through the bubble that we had earlier with dotcom. Could you talk us through the type of valuations that we were seeing then, not just in pure tech but also biotech perhaps . And how Different Things are now. Because the word bubble seems to have been thrown around a lot in the last week or so. Right, yeah, the valuations are incredibly high. Ive been talking to a lot of venture capitalists this week on a story im working on. They feel like the numbers are super high, yet all of them are paying them. Its an interesting question is, they said if you had gotten out the last time and you had not invested in those years after the bubble crash, you would not have done as well. And so, they feel like theres no price too high. Some of the valuations going on right now, from uber to a whole bunch of startups, theyre getting the massive billiondollar valuat n valuations. I think there are 19 unicorns, theyre called, billiondollar valuations of startups. And theyre paying the price. And the question is, whether they be able to get them back via acquisition or ipos. There was a story last night, you mentioned the unicorn valuation, that cora raised 80 million for a socalled unicorn valuation. The Companies Pay employees in stocks, and it has an effect on morale. I want to throw this to jon. We talk about private valuation. But how long is the lag time to see Public Market effects really start to hurt private market confidence . Boy, thats a tough question, kayla. I dont know if i can answer it. So ill just spin it around in a different direction. I mean, i think its really interesting what the market has been doing lately. I think itll be key to see, does this strengthen the hand of Companies Like your apples, like your googles, even your microsoft, that have a lot of cash . Do they start to put their cash to work in different ways . If the valuations kind of get if iffy, or even in the wake of all of the stock moves around you know, employees are less likely to bet on just rsus as a form of compensation. But thats another thing, i will say, in silicon valley, its moved toward restricteds stock units, versus the bubble, which could evaporate. And raising debt, too, instead of equity. Lets move on and talk about amazon, because Ceo Jeff Bezos is giving us a different look. He revealed paid to quit, which offers employees up to 5,000 to leave amazon if they arent happy. He also talked about the expansion of amazons grocery business and confirmed the company is hard at work on the next generation, still, of drone delivery. Cara, were you surprised by any of that . Was that kind of all general knowledge . No. I thought he was going to announce an invisibility cloak. No, he likes you know, drones. He loves the drone idea. I suppose its a farout idea. I suppose eventually thats how things will be delivered. You know, he likes to do that. Theres a man who doesnt care about stock valuations, obviously. So i think whats more important was the grocery discussion, which is, i think, in the here and now, which will affect the stock price today. Is this expansion of amazon fresh . Which is a grocery Delivery Service, an idea that had been tried in the last, by the way, right before the last crash. And its probably its reaching its time now in terms of people wanting delivery at home with all of the various things. Interestingly, uber also announced a Delivery Service in new york using its uber car. So googles in this. All of the companies are in this. Thats an interesting area to me. The drones are sort of fun. And the comics are, well, he wants to own comics and have the platform for distributing comic books, digitally and real. Jon, you talked about how if amazon wants to move further into the grocery program, it needs to make its employees happier. Theyre not only announcing theyre diving deeper into amazon fresh, theyre also saying theyll pay their employees 5,000 to leave if theyre not happy. Theyre basically answering you. Well, in a way. Zappos has been doing this for a ill whoo. It was paying people 1,000 to leave. And i think this is kind of an outsidethebox Human Resources approach where, okay, if youre not happy, heres 5,000. You can choose to leave. Do the math. Consider how much you really like being here, what your other options are, and in the shareholder letter, he mentions a program where amazon will pay 95 prepay tuition for highdemand programs like nursing, even if they dont have any benefit for amazon. So i think theres a little bit of culture burnishing happening in this letter as well. I agree with cara, the grocery discussion was interesting partly because bezos had a cautious tone about it, saying he will expand that cautiously. He talked about how in seattle theyve been doing this for several years, and theyve been patient. So maybe thats a signal not to expect a huge Capital Outlay, profitsapping Capital Outlay in the near term. But the thing with th. R. Thing, its a stunt. Well, let me ask you, jack welsh said he would sack the bottom 10 of g. E. Management every year. Yeah. And that was considered quite harsh, quite proactive, and is bezos being harsh here in a kind of jack welsh way . No. Or is he some sort of benevolent kind of gift . No, it gets reporters to write stories about it, like the dollar salaries. You know what i mean . Its just, whatever. Hes saying to your employees, if you dont like it, you know, you should leave. I think Many Companies say that. So i dont know its just a creative way of doing it, i guess. Im not sure they give them 5,000, do they . Well, i guess. Its like a signing bonus turned on its head. Yeah, goodbye, see ya later, dont let the door hit you on the way out. Goodbye, then. Thanks, cara. Have a good weekend. We should note Nbc News Group is a minority owner, and thats part of the reason we have the pleasure of having them on. Lets look at shares of jpmorgan. A big move to the downside still. Theyve come back very slightly. Still a loss of 2. 5 on the day. Well tell you whats beneath that share price move. What does it mean for the future . And paycom was supposed to open for trading here at the nyse this morning, but the stock still hasnt opened. Troubles in the ipo market . Well have some answers next. Plus, Rick Santelli will join us with a santelli exchange. Rick, what are you watching . Simon, were going to grab ira harris and talk about some of the events in the market, how its trading this week. Its been a huge week. Well try to divine what the treasury complex is telling us and try to equate whats moving in stocks to the downside to what may be moving in the economy, potentially to the upside. All in about five minutes. [ bagpipes play ] make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, 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 current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Welcome back. Mixed results from two big banks today as earnings season gets under way. Wells fargo posting strong results. Profits up 14 . Jpmorgan is the big market mover. Its shares getting rocked this morning after the banks profit and revenues slide. You can look at that stock now, now down better than 2 . Here to break it down is paul miller, managing director and head of Financial Institutions research at fbr. Paul, good to see you on a busy morning. Thanks. Walk us through what you think about jpmorgan. Obviously, wells fargo is the contrarian in a down market, but were seeing weakness on jpmorgan. Theres a lot to pick through here, and im wondering what stands out to you . Well, on wells fargo, you know, it looks like a great headline number, but the quality is not good either. On a core basis they probably missed everybodys numbers. As people go through that, theyll lose enthusiasm for wells fargo. But for jpmorgan, the big thing was the income miss. We were expecting a weak mortgage quarter. We were expecting a weak fixed income quarter, and thats what youre seeing with the street. For wells fargo, they had some great mortgage numbers, but a lot was hedging gains, security gains. So on a core basis, they didnt do well. We were afraid a lot of the banks were running up on expectations of a great economy, expectations of higher rates. And now youre seeing rates drop. When you think about what jpmorgan executives have been saying all morning on their Conference Calls, it doesnt seem like theres a discernible reason why fixed income fell the way it did, and they said it could continue through april even. What sort of comfort does that give you that they can identify the problem, they can fix it . Whats wrong with the Business Model so this doesnt happen in the Second Quarter . Well, we already said about jpmorgan, and a lot of the banks, theyre black boxes. We dont know what goes into the fixed income trading desk. I lot of it is mbs issuance. Its down at a 14year low, and thats having impact on the fixed income trading desk, but they talked a lot about less debt issuance. Because of that, the volatility is why people are starting to shy away from the stock. You know, paul, i think from memory, it was last quarter you were on squawk box and bemoaning the fact you werent getting the acceleration in the bank, certainly in jpmorgan commercial loan growth, that many people would anticipate at this stage in the cycle. And thats really why you buy the banks, and theyre not producing on that. On squawk box it was somebody else making that point this morning. How serious is that, if youre in the banks and not seeing that sort of kind of balanced growth if you like . You need to see if you dont get balanced growth, or increase in net interest margin, the banks wont be able to grow and meet expectations. Thats why when you look at these things, the macroenvironment is very important. Right now, were not getting enough gdp to absorb the liquidity in the system and thats whats causing the growth to be disappointing. Its more than that, right . Theyre not leveraging what growth we have, arguably . That is correct. I think were still in the deleveraging phase. This is going to take a couple of years before we get through that. If were deleveraging, we wont be able to grow the balance sheets. If you cant grow the balance sheets, the Bank Earnings cannot grow. Paul, theres some specific macro issues we talked about, bankspecific issues as well. But do you think well see surprises with citigroup, bank of america, goldman . I think youll see more, disappointment on the fixed income, balance sheet, on n. I. M. I think a lot of the street was ignoring that, saying its Rearview Mirror stuff, but the 10year is down 15 basis points in the last week. And i think a lot of people think thats heading to 2. 50. If it does go there, youll see a continued sell offin the banks. All right, paul, for the moment, well leave it there. Thank you for joining us. Speaking of disappointments, a lot of Companies Going public this morning, but one of todays ipos is behind schedule, even as we speak. Bob pisani joins us now with a bell. Over to you, bob. Were ringing. Thank you. Its been an interesting morning for ipos. Theres been several postponed, including one eagerly anticipated, paycom. In fact, look, the sign is still up right here. We were looking for a pricing around 18 to 20, but it never priced. We asked for a statement from the company. Heres what theyve told us. This is from the company. Market conditions have postponed the opening. However, they were required or they did file what you call an amended s1, an fwp amendment, contains updated information on their earnings for the First Quarter. They filed that overnight. So its not clear whether the delay was because of the Market Conditions or maybe because of that fwp amendment they had to file. Its not clear. At any rate, what were sure of right now, theyre supposed to ring the closing bell. Not clear whats going to happen there. There were officials here this morning they were here, i saw them, spoke to them. They wouldnt give me any more information. Im not sured it open or not. As of now, no bell for them. Were waiting for that one. There is a lot of other things going on. Look at zoeys kitchen. You want a hit . This was a big hit. An enormous crowd over here. Theres zoes kitchen trading at 25 and change. The important thing, shares were at 15. The price talk was 13 to 15. It opened at 25. 65. Right now trading at 25. 55. Kevin myles, the ceo, says they are expanding fast. We continue to move east. Were in philadelphia, kind the southern new jersey, and hopefully, within day up this direction. We have great Franchise Partners today, but we feel we can continue to grow the culture, grow, and were excited about the model were building. Fast casual restaurants are having a tough time. Look at the names today, the main competition being chipotle. Back to you. Thank you for that, bob. I know that you did a segment last night where you were talking about how there would be real cause for concern in the ipo market if we saw one of these postponed. So it certainly remains to be seen what sort of compounding effects this will have. We want to give you a check on the markets. Mixed action this morning after the major losses yesterday. A lot of the big moves in stock started in the 11 00 a. M. Hour, as we have been telling you, so well be watching what happens. Right now, the nasdaq is up about 3 points. What can we expect today . Ken langone is here to weigh in on that, and a little more later this hour. Humans. Even when we cross our ts and dot our is, we still run into problems. Thats why Liberty Mutual insurance offers accident forgiveness with our auto policies. If you qualify, your rates wont go up due to your first accident. Because making mistakes is only human, and so are we. We also offer new car replacement, so if you total your new car, well give you the money for a new one. Call Liberty Mutual insurance at. And ask us all about our auto features, like guaranteed repairs, where if you get into an accident and use one of our certified repair shops, the repairs are guaranteed for life. So call. To talk with an Insurance Expert about everything that comes standard with our base auto policy. And if you switch, you could save up to 423. Liberty Mutual Insurance responsibility. Whats your policy . And his new boss told him two things cook what you love, and save your money. Joe doesnt know it yet, but hell work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. Hell start investing early, hell find some good people to help guide him, and hell set money aside from his first day of work to his last, which isnt rocket science. Its just common sense. From td ameritrade. Without standard leather. You are feeling exhilarated with frontwheel drive. You are feeling powerful with a 4cylinder engine. [ male announcer ] open your eyes. To the 6cylinder, 8speed lexus gs. With more standard horsepower than any of its german competitors. This is a wakeup call. Welcome back to squawk on the street. Rick santelli here. Id like to welcome ira harris. When the animal spirits get lost in the equity market, we call our ghostbuster. All right. A wild ride for not only equities, but more importantly for the treasury markets. What happened after qe 1 and qe 2 with Interest Rates . Well, interestingly, everybody thought long rates would go down, but then the market reason is with the thrust of it, the economy will get going faster, so people were satisfied with it, and the curve steepened, as we talked about. It did. But for the most part, we did see rates move down, both times, as the programs ended. Right, as they ended. And its the same this week. Its about the risk assets behavior after them. And if there is no alternative, once the programs are done, you see that there is no alternative to the fact that after every action is a reaction. Always. Do you see this continuing . Is it correction, not correction . It gets hard to say, because everything is topsyturvy. Well, because were so correlated and everything is priced off of everything else, so one thing moves another like never before. Its faster. And it takes place. So again, people wake up in the morning and they go, what am i going to do with my money today . Whats my fair factor . Whats my greed factor . And they try to weigh that, measure it, and go accordingly. Is there any doubt in your mind that the economy is better than it was a year ago, better than it was two years ago . Thats not what were debating here, is it . No. What were debating is where everything is priced. And should it be there or do we need to find more solid footing for the risk spreads . What about those . What do you think about high yield and corporate investments at this point . You know, im a big fan of jeremy stein, others arent, but i think risk has been priced. Nothing says it more than greeks bringing a fiveyear to the market at a sub5 level. Risk is because everybody is chasing yield. Were back to those times where people are chasing yield because everybody has to perform to some bogey, and theyll try to make speaking of bogey, lets talk about another bogey man, nikkei, and we exported some of our selling. Theres a lot of issues, and taxes arent the only issue. What about banks in japan . The banks are one of the missing things, because im buying jeopardy bank stocks. They replace because the lowrisk play going forward. And the banks in japan have been doing something, offloading the bad stuff to who . To the boj, because thats the way the prices right. And the Japanese Bank stocks ought to be solid performers, but the fact theyre underperforming tells me the japanese recovery is not near to taking place. And i say, if anything goes wrong with the stimulated central bank where we have the canary in the colemal mine is . Well, the boj. All in or all out. Ira harris, have a great weekend. Thank you. Sarah im sorry, kayla and simon, back to you. Thank you very much, rick. Rick santelli live in chicago. Lets go to europe and check on the close as they head into the weekend and see where we stand. They are off the lows, but a sea of red as you can see. The biggest weekly loss in a month is where theyre headed. A lot of that has to do obviously with the momentum plays, the tech selloff, for example, arm holdings, the chip designer apple uses in london is down. A full 4 . Europe doesnt have the same concentration of Tech Companies as you have here in the United States. So when you look at the selling and whats impacted, its more the momentum plays, and that could be the airlines, for example. Theyve been caught up quite badly in the selling this week, because air france, klm still up around 46 so far this year. Lufthansa, still, is a high flyer, as you can see. Thats where a lot of the selling has been concentrated. For the week, it is quite serious in europe. Germany, italy, and spain have led the losses, and there you can see the percentage losses. In spain, for example, down 4. 5 , because in part, the italian and the spanish stock market have themselves been momentum plays because of the concentration of the banks. The other thing thats really fascinating, as the European Central bank attempts to talk up the chances of quantitative easing to try and force the euro down is the fact that the euro has nonetheless gained through the week, partly because of the intransigence from the bundesbank on qe, and because yellen and her colleagues have tried to redefine the dovishness, which has caused the euro to rise. One more look at what is happening in athens. Very shortly a News Conference will begin between Germanys Angela Merkel and the Prime Minister of greece. This has been a big week for the greeks with the bond issue. Some would say that the chickens will still have to come home and roost. The economy has lost a quarter of its value, partly because of the austerity since since 2008, and there are local elections looming with an Unemployment Rate in greece, lets not forget, of 26 . Up next on the program, stocks down again this morning. The nasdaq has made some recovery, but its had a really bad week. What does this weeks action tell us about the economy and what will happen next week . Billionaire and home depot cofounder ken langone has some answers, and hell join us in a couple of minutes. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. A volatile session in the market, trying to make a comeback. Meanwhile, off the lows of the morning. The nasdaq slightly into positive territory. The dow is still down 42 points. We want to bring in ken langone, the chairman and president and cofounder of the home depot, and is joining us live from arizona. Ken, good to see you. Thank you for joining us. Thanks so much. Nice seeing you, nice being with you. When you see a market like this, that people have said is overvalued on one side and undervalued on the other, you witness several market cycles at this point. What one does this one remind you of . Every market cycle is different unto itself. I think what were going through right now is a rotational change. Which is okay. But the fact of the matter is you still stay focused on your companies and your investment. If you have great companies, you go through markets like this, and you are essentially indifferent to the market in spite of how the media tries to hype and excite you, and the sky is falling or the times have never been better. Its somewhere in between. What im saying is, you invest. If you invest, you go through these periods of time relatively depth to the sounds and annoyances go on. This market is like any other market. Stocks go up, stocks go down. I think in this period of time what were witnessing is the fruits of intense and unreasonable regulation out of washington. And i think this is what we need to address. Right. I know that not taxes, not the deficit. I know some people have been looking at that specifically. We saw jamie diamond shareholder letter, talking about entitlement spending and the cost of obamacare and also the fact we havent gotten tax reform. As just some of the red tape thats overhanging on the market, and why companies cant grow. But you look at a company like jpmorgan today, which basically no loan growth, wells fargo in the same boat, and what do you think the Companies Need to start lending again . What do you think needs to happen for the economy to start growing . Its very easy. You create an environment where the borrowers want to borrow money, because they see their business growing and they see that investing in their busin s business with the company. Why are Companies Buying back stocks . I dont know every answer, but a good measure is, were giving the money back to our stockholders rather than investing or doing deals. And why . Because they see regulation continuing to encroach on what they can do. Now, im not saying all regulation is bad. But i am saying to you, were in a period of intense and unreasonable regulation, and were seeing the fruits of that environment. Its that simple. It isnt the banks that cant loan the money. Its the borrowers that dont want to borrow the money. Theres no demand. Why is there no demand . Because people are making do with less. Why would i want to build a plant or add a lot of money for equipment go ahead. Right. No, ken, im thinking about the letter from larry fink last week where he was putting the onus on the companies and saying, this is the environment that weve been dealt. You need to learn how to operate in it, and you need to make a decision at the top to say, listen, the markets on its alltime shy, we need to stop buying back our stock, and we need to start reinvesting in our business. He was saying onus was on the company. Dont you think Corporate America can make that decision, too . Wait a minute. Hold, hold. Lets go back to your premise. Larry fink did not say you must growth you must grow. Larry fink said in the environment were in, you must survive. And i think jpmorgan and wells and every company i know is doing a very good job of surviving. But what theyre not doing is going to invest extraordinary sums of money, or any amount of money, into an environment thats hostile. Lets get off this jamie dimond runs ive said it before and ill say it again jamie dimond is the finest ceo. I think its tragic, hes lost great people, might recently mike cavanaugh. But if you got into mikes head, i bet you a good portion of what mikes decision was was to get out of the environment where its hostile. I mean, we have to we have to accept the fact that whats going on in America Today does not come without cost. And the cost is Economic Growth. And, ken, you put your you put your money where your mouth is. You are a major donor to the gop. You are a major donor supporter of, for example, governor christie. So if the gop were to win the next election, or indeed wait, hold it, simon, simon. Simon, lets be fair. Im also supporting Governor Cuomo in new york state. And hes a democrat. Okay. Im also supporting senator schumer. And i take that on board. But are you making a you are making a bigger political statement about a general hostility that is coming from capitol hill, and what im going to ask you, constructively, is what could, in practice, be changed that could increase demand and investment in the country . Give me that question again. What reasonably could we expect to change at the political level that would reinvigorate demand and investment in the economy to the major point that youre making . Look, i have no doubt and i subscribe to the notion that regulation is necessary. But it needs to be balanced. It needs to be measured. And it needs to be reasonable. And all regulation comes with a cost. If the by the way, there are very prominent democrats who share my thought on excess regulation. The fact of the matter is, we have a problem right now. We have a serious problem. The economy in america is tepid at best. Tepid. How do we get it going to 2. 5 or 3 . Guess what . I dont say throw out regulation, but i say make regulation reasonable and consistent with what youre trying to accomplish. Ken, i know im not democrat or im not republican. Go ahead. Excessive or not, i mean regulation is oftentimes, not all the time, but oftentimes in response to a specific problem. In the Banking Industry, its no different. Obvio obviously, its a very big law, doddfrank is, but its in response to the financial crisis. We have a new debate thats come on board in the last couple of weeks, and that is about highfrequency trading. Theres this idea that the market is rigged. I know you have taken companies public, you have taken cups private, and youve spent a lot of time in the market dealing with investors and watching how technology has unfolded. Im wondering what your thoughts are on whether the market is rigged or whether you think Michael Lewis drew the wrong conclusion. Look it, the markets are not rigged. 40 years ago, if i bought 1,000 shares of a 45 stock, i paid 450 in commissions. Today, if i buy 1,000 shares of stock, i pay 20. More of my money is going to my investment. I think this is much ado about nothing. And i have no investment and no interest in any of these highfrequency traders. Give them credit. They provide liquidity. This is peanuts. Heres an example of where much ado is being done about nothing. By the way, lets go back to regulation. Whenever regulation is borne of a kneejerk reaction, expect regulation to be unreasonable. And thats whats doddfrank is a disaster. I dont know all of the nuances of it. Our Health Care Law our Health Care Law changes, you can argue all you want about 7. 5 million, but the fact of the matter is, get into the real world, and people dont like it. Its down to 37 approval. These are your numbers on the media, not mine. But understand something. Whenever you enact legislation, be mindful of the downside. Collectively today i believe america is being overregulated, and i believe were going to pay a terrible price in Economic Growth until we fix it. Now, if it takes getting the democrats out and the republicans in, im for that. If the democrats can see the white, leave them alone and let them fix it. But lets be reasonable about it. Ken this is the result of the excess go ahead. We should point out the beautiful backdrop, the global retailing conference in tucson. Im wondering what youre taking away from the thoughts of the likes of Terry Lundgren or walter robb, many of the ceos there this week. Whats your takeaway from the Retail Sector right now . What im taking away is a longterm prospects in america have never been better, have never been better. Theres young people out here that are anxious to learn about how they can run their Retail Businesses better. This program, Terry Lundgrens got out here, is world class. Its unbelievable. And these people that are out here want to grow, and they want to learn, and they want to expand their businesses. The longterm prospects of america have never been better. But weve got to get through this period of excess regulation and excess government involvement. All right. All right, you speak your mind you certainly know how to speak your mind, ken. Thats why we love having you on. Thank you very much. Enjoy your time out there. Okay, thank you. As weve been talking about all morning, the markets are making another move to the downside. Despite the action this week, mike santoli says now is not the time to panic. Hell tell us why hes not worried in just a moment. Plus, make sure you keep it here. The masters is in full swing, and who better to talk about that than the golf legend gary player . Hell join us after this break. Ahhh. Beautiful day in baltimore where most people probably know that geico could save them money on car insurance, right . You see the thing is geico, well, could help them save on boat insurance too. Hey okay. Im ready to come in now. Hello . Im trying my best. Seriously, im. Im serious. Request to come ashore. Geico. Saving people money on more than just car insurance. At your ford dealer think . They think about tires. And what theyve been through lately. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit card at the big tire event. See what the ford experts think about your tires. At your ford dealer. Coming up at the top of the hour here from the New York Stock Exchange, heading into the final stretch of the tough week for the markets, but can we turn things around, for today at least . Were tracking all the signs to find out if a correction is actually here, with supertrader larry altman. A rough day for jpmorgan shares after a big earnings miss. Should you be buying the dip . Well debate it. And in a roughandtumble market, should you stick with the steady eddies or go after the old fliers . Thats coming live here at the New York Stock Exchange at post 9. Kayla, well see new a bit. All right, thank you very much. The masters this weekend is under way, defending champion adam scott shot a 69 yesterday following closely behind bill haas, leading the board after shooting 68 for the day. What can we expect as players hit the fairway today . For that, gary player, a worldrenown golfer, golf course developer, and our own dominic chu is here to join us in the interview. Thank you so much, gary, for joining us. It looks like its not too shabby where you are, down south. Im wondering if you could walk us through how the masters is going in its early stages. I must say can you hear me all right . Hey, gary, its dom. Are you there . Dom, yes, sir. How are you today . Im great. Kayla was just trying to ask you about how the masters is going now. Any sense this is a time of the year when golfers around the world and the country are called to action. Its the first major of the year. How excited are you and the Golfing Community about the kickoff of the masters . Very excited, and whats amazing is you stand under that oak tree, and there are probably at least a minimum of 30 nations people representing their golf associations. The golf course is so beautiful. If they found a weed on the golf course, im sure the greenskeeper would be fired. But its great excitement here. The tournament is wide open. Theres so many players that can come out and win as usual, and its always full of drama. Well, gary, one of the things about the masters, its also a place where a lot of business networking gets done. I know that youre down there, your organization is hosting a slew of different companies, from barron berg bank, callaway golf, cocacola, even. Why is the master so important to the world of business . Well, first of all, youve had great People Associated with this tournament from the start. You had that great leader, president eisenhower, all the Great Respect for. And then bobby jones, who was world renowned for his great manners and his great play. And then, after those two, we had obviously clifford roberts, who ran the tournament with great discipline. And the tournament has just got better and better and better, and people want to be associated with class. And this Golf Tournament is the bestrun Golf Tournament in the world, without a question of the doubt. Of course, a great advantage in having the tournament the same place every single year, they know exactly what to cater for. And on top of it, there have been amazing finishes, always dramatic, and people like that and the coverage goes throughout the world, and people obviously want to be associated with global business. And america personifies that. Global america. Gary, one of those global businesses, ibm, has been a sponsor of the masters for over a decade at this point. But Augusta National has been mum on when it would extend membership to ibms ceo, jenny, a woman. But theyve invited the male ceos of ibm to have automatic memberships. Im wondering what your take is on this matter . In 2012, augusta did open up membership to Condoleezza Rice. Well, from the beginning, when theres a great drama taking, or controversy was taking about women, tiger woods and i were two of the few players that said, yes, they should allow women. Others were noncommittal and no comment. Im pleased i stuck to my guns, because you have a billion viewers, minimum, watching this tournament. Maybe 2 billion, which half are women. So if youre any sort of a p. R. Person, you have to include the woman. Anyway, we live in the 21st century now. You should be including women. And Condoleezza Rice and the lady from ibm, they deserve to be members. And im delighted to see that the new chairman, billy payne, hes really with it. Hes had junior Golf Tournaments at the course. I was in china representing Augusta National with a junior tournament there. This new chairman is not reluctant to change. And Winston Churchill said, so aptly said, change is the price of survival. Now, gary, really quickly, one last question. Speaking of inclusion. How does the world of golf include more people . How does it grow in the future . Well, weve got you know, its not easy to hear you guys, but if i heard correctly, the way to get the game to grow, Winston Churchill also said, requesting the youth of the nation are the trustees of austerity. Weve got to get young people to participate. We have to go to schools, have junior programs. This is why south africa produced 23 major champions, more than any country postwar, other than the United States, because of our junior programs. Thats where it all lies. The juniors are going to fill the vacuums as the older members die. Right. If you look at tennis, its amazing. Tennis doesnt have a World Champion an american World Champion. You have the best facility, best coaches, and they dont have a tennis champion. Gary, unfortunately, we need to leave it there. I know youll have a wonderful weekend with the azaleas, dogwoods, the beautiful weather. Enjoy your weekend. Have a wonderful tournament. Thank you for joining us this morning. Okay, take care. Dom, thank you, as well. I feel like we should follow that with a churchillian quote on the markets. The markets are on the move. We had a big selloff yesterday. Analysis from mr. Santoli next. Aflac. Aflac, aflac, aflac [ both sigh ] ugh you told me he was good, dude. Yeah he stinks at golf. But he was great at getting my claim paid fast. How fast . Mine got paid in 4 days. Wow. Thats awesome. Is that legal . Big fat no. [ male announcer ] find out how fast aflac can pay you at aflac. Com. Work with equity experts. Who work with regional experts. Thats when expertise happens. Mfs. Because there is no expertise without collaboration. Mfs. Female announcer its sleep trains interest free for 3 event. Get three 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 interest free for 3 event, on now. Sleep train your ticket to a better nights sleep well, we thought wed stabilized on the markets, but were starting to move down into negative territory. Lets bring in mike santoli, yahoo s Senior Finance cocolum. You said yesterdays selloff was smart money selling. This is the impression i get. If you look at things in terms of ipos being jammed down onto the market, a third of them in the last month or so trading below the initial price, private equity firms following on, a big part of that. It just seems if theres just been this general trend of private equity and hedge funds and investors who had been in the winners who are ready to take cash off the table. Thats why to me its much more about the positioning of big investors. Its about risk appetites. And its about those winning trades having kind of become untethered from the fundamentals. Its not as much about the markets sending us a scary or important economic signal about really the macroenvironment. Thats my read on how its been to date. Mike, do you think we needed to see this paycom ipo stall . We needed to see some backup in that jamming, as you put it, of the ipo market . Without a doubt. You want to see the window narrow or close. You want to see corporate insiders selling, dry up. Its been heavy going into tax day and everything else. And i do think you want to see less of the sense that some hedge funds are sort of caught offside badly. I mean, when you see the fact that some people have been pointing out that the brazilian stock market is actually trading precisely opposite the u. S. Market, that the price of nickel has surged, mike pointing this out, basically it seeps like youre having a forest unwind of trades. You dont want to see people trapped. You want to see fewer signs that thats occurring. Okay, good to see you. Thank you very much for that, mike santoli joining us there from yahoo finance, where, of course, he is a senior columnist. Lets bring in scott wapner, whos about to take it away with halftime. Scotty, what do you think of the markets here . What are you focusing on . Trying to see if this is sustainable. Any kind of upward move into positive territory, simon, seems to be sold pretty quickly. Its like anytime you can get any sort of momentum going, the bears are selling right into it. Im sure thats what you guys have been watching, as well, over the last few hours. Of course, when you see the banks with the barometer like they have, so weak, no loan growth, really bad sign for the economy overall, people thought they would come out stronger. And getting close to that correction territory, as well. The official correction, right . Sure. Figuring how steep this will be the nasdaq and the russell 2000 are getting close. I think each of them is off about 8 or so. From the highs, guys. Scott, have a good weekend and a great show. You guys do, as well. Thank you so much. Okay. Welcome to halftime show. Here is todays playbook from post 9. Look out below. How far are stocks likely to fall . Supertrader larry altman, better known as trader exaspen is live with his latest take. Diamond in the rough. After a big earnings miss for jpmorgan, is the stock a cubic z, or still a precious gem . Risk versus reward. Were debating the high flyers against the steady