Transcripts For CNBC Squawk On The Street 20140603

May. At t ups guidance, sees 5 Revenue Growth in 2014. The bidding war for jimmy dean and sara lee orts old or hillshire rages on. Pilgrims pride raises its offer, above tysons 50 bucks. This may not be over. Investors, apple wraps up its key. Health, home a fully integrated apple world. Why the stock is down this morning. Record auto sales, chrysler beating estimates. More numbers from car makers in a few minutes. Sales estimates for the year, finally tops 16 million vehicles. At t raisings full year guidance. Company citing what it calls strong Second Quarter wireless trends. Anticipates net post paid subgrowth of 800,000 for q2. At ts quarterly rulses are due out next month. We know the war between the big players, the way tmobile disrupted it. What does this mean . That. This means something but i wouldnt draw too many conclusions here. You have to remember at t did change their way it went about recognizing revenue for handset sales moving to something called iep, equipment installment plan. The cost and price of the device are fully recognized at the time of the sale. That occurred i believe it was in early december. Or not that long ago. They also are doing well, it would seem with their next in mobile Share Value Plan but again, looking at what theyre doing now in terms of iep, what does it mean. They put a piece out on this not that long ago i went back to refer to. I looked at this number and said well, is there a counting issue here as well. It may be. The cost in the price are fully recognized the time of the sale even when customers pay nothing. Receivables created on the Balance Sheet to be reduced by payments on the ill installment plan. You get the revenue up front and book the revenue up front so it becomes a accounting tree. You have a receivable eventually paid off by the customer. That, of course, can result in a higher rev revenue number. Lets keep a closer eye on service. It was moffits belief when they looked at this a spike in revenue from the recognition of equipment you have a corresponding spike in ebitda and earnings and a corresponding drop in service average revenue per user. Does it match or is it more expense when you have more customers . Youre just recognizing the revenue in a different way than you had in the past. Subscription business. No longer youre no longer taking in the Service Revenue in the same way. Well i like this. I know that the stock is going to be down because people are focused on ebitda. I like Revenue Growth. There are some Revenue Growth and its possible. Except it may be an accounting issue. At the same time the last quarter wasnt that good. The subgrowth was good. Thats a number you may want to focus on. The turn number is lower. So those are two good metrics for at t. No doubt about it. And as carl said in a very competitive, more competitive, very, i dont know, more competitive environment. I was thinking about this tmobile revolution, whether that was, you know, hurting at t. I mean its good to see that theres just a lot of people making calls and a lot of people playing video games. Remember, theres not a lot of work being done. People on the phone, people are shopping. Right. And people are playing video games. Also tablet ads are not phone ads. And a lot of the growth has been tablet editions. And the life of the tablet, the revenue on the tablet, its not the same. Its not the same as adding a new wireless customer. Whos got the device. At the same time listening to your excellent coverage in apple. I think theres this internet of things, we talked about that with skyworks too, everything is connected. Many touch points. And it may not be reflected in at ts numbers but holy cow, every time theres a new application, theres more people just using the applications. Not like the stuff goes into the either. No the bits are going up, not down n terms of monthly and daily use. Cisco is right about that. Apple entering day two of the Worldwide Developers conference in san francisco. Among the highlights you probably heard ios 8, the version of the mobile operating system and then the company as jim said revealed health kit which lets users various Health Apps Share data. Home kit designed to make the iphone a Remote Control for your house. Interesting the past five Developers Conference, the day of the keynote, stock has been down, yesterday no exception. People saying boy what a bunch of jokers. Theyve lost the pizazz. No. This is a different kind of event. You covered it. This is a nuts and bolts event. It is true that i think at the vanguard of this health kit is kevin at under armour trying to get the shirts to respond to what people are how many steps theiryre taking. There is a notion that we all know many more things about our car than we know about our body, apple clearly is embracing that notion. About the things that shut off at your house, im tired of those. Like a gazillion of those. I like to have my cell phone be my credit card. I like that idea. And some companies are coming up with that. I think that makes sneens payment is going to be important. Did they talk about payment . They didnt. No. In general the notion you can add a thirdparty keyboard, you will link with windows, theres now office for the ipad, the sense is theyre Getting Better at playing with others. Right. Even as they try to stiff arm android and take share back and take on google that way. Android was it was food fight like. Yes. It was comical, food fight. And has something changed here in terms of the aggressive nature. Ill tell you whats changed even though were looking at video of tim cook, the cover of usa today is of greg fedusa be the next steve jobs. Brought an electric air. I think apple, i like cook because of what hes done. Cook is recognized. He gets pizazz meisters. Nothing the matter with that. Theres a team. I know. The team is good. Recognized he doesnt have pizazz. He doesnt. Its okay not to have pizazz. Looking in the mirror shaving, i do not have pizazz. Its all right. Hes an operator, not a promoter. Okay. Not to have pizazz. Operator in the Largest Company in the world. That can be an important moment. Do you think the guy that runs exxon has pizazz . You dont think he has pizazz . I dont feel hes putting a tiger in my tank. You dont want a ceo with pizazz. Thank you very much. One last question on apple, some of the technicians arguing its got to come back to the high fives before it can reclaim those that 675 high from 2012. In the end, i mean its a new product. We get excited. The analysts are all struggling with how to value it. It overran their price targets. One of the things that has happened over and over again when you use these price targets and cut them on the way down and the stock goes up you have to boost it and we had this kind of faux target boost before that then the stock does come back down. Do you chase the stock . I dont know. I think that the stock is cheap. Cant you own it . You got that split. Boy ill tell you when i did this analysis, back to the coke and pepsi in the 80s, the reason why splits dont work so to speak and get the stock going is when you get the seven shares, you tend to say im going to sell three of them. Right. And that stock has to be sopped up by new people who say oh, apple is so much cheaper now. Of course its notp cheaper. People like dollar amount stocks. Speaking of pizazz, who knew. What do you got . Hillshire brands has pizazz, apparently does. Pilgrims pride sweetened its offer for hillshire to a 55 a share, all cash. Up 10 bucks. The 45 bid was the first one. This, of course, also after tyson food launched a 50 a share bid last week. That a couple days after we saw pilgrims pride. As for hillshire it says its board has authorized talks with both companies but isnt withdrawing or qualifying its recommendation on its own bid to acquire pinnacle foods. It is in auction mode. 55 bucks a share from pinnacle, 75 from jbs, Largest Meat Company in the world. Pill xwrims. Jbs owns 75 . 55 is 14 times the expected ebitda from this company in 2014. Thats 14 years worth ebitda willing to pay for now. They say theres going to be at least 300 million in cost synergies that takes the multiple down to as low as nine times and thats how youre willing to pay 55. By the way, the market at this point thinki ing that tyson is going to raise higher than that. A 58 stock price right now. The bidding for this is insane. Should go buy Bob Evans Farms if you need links that bad. Have you gone to the brands these guys have . This is not necessarily a whole foods kind of right. Talking about the ingredient sflis. Im talking about, for instance, state fair, thats one of your favorite brands. In the 1930s two texans invented a revolutionary fun food. Their honey battered wrapped hot dog on a stick. Wow. I mean, what aisle is that in whole foods. The number one brands in their respective categories and apparently have 13 ebitda margins a belief the ghis brazil can get up. Theyre going to integrate it into the supply chain with access to all of what jbs is doing, the largest meat producer in the world. Therefore, they see real value here, jim. Jerky perfected. Unlike a lot of what the market saw initially, the idea of and will tyson come back . Theyre fully financed. The pinnacle side said no financing condition. Stison has been fully financed at 50. I was in the supermarket yesterday doing a little selfmeasurement. Not only do i go out and shop, i also go to the supermarket. And the chickens, its kind of back there, its in that one area. But the meat section is a fight. Its, i think you want to revalue oscar mier from craft. Bob evans. Bob evans down from the farm has sausage. If this aisle is up for grabs there are other players. Dont forget. These are real trench warfare, world war i battles in the supermarket. Inch by inch. You got to go over the top and you got to go get you got to storm the beach. You do. Im telling you take the bluff. This is about the paths of glory. Good movie by the way. Curt douglas. Some of his best. Kirk watches our show. Hope youre doing well. I have nothing to add after that. Lets go to break. When we return, Dollar General blaming the weather as the retailer posts a Quarterly Earnings miss. Were going to tell you how the stock is reacting to that news. The commissioner of the nhl, gary bettman, on the business of hockey as the rangers and the kings get ready for that stanley cup showdown. Take one more look at futures. Only 3 1 2 weeks left in the quarter. The s p is on track for the sixth positive quarter. Its on fire. When squawk on the street comes back. Dollar general reporting firstquarter results below estimates, citing what it calls the challenges of unfavorable Winter Weather, heightened competition in the current economic environment. Sales trends gaining momentum, confirming guidance for the full year, comps up 1. 5 and 800 million worth of buybacks in the quarter. On may 28th, deutsch bank downgraded the stock, worried about margin prices. On june you get that kind of thing and what happens is, you get people who are negative and then the Company Reports and the company doesnt really disappoint. And they also have that line, i love these lines in these releases which says, sales trends began to improve in april and continue to gain momentum. So what that happens, people say the worst is over, congrats to Goldman Sachs who stern ag downgraded, which said the stock is too low and were going to stand by it, by recent capitulation, and that was the terrific call and the stock is going up because too many downgraded it ahead of what turned out to be a decent quarter. Another discount retailer looking for comps in the 3 to 4 for the year. Is that good enough . I had Alliance Data systems on last night and he does most of your private label credit cards and said were seeing a 1 to 3 environment for retailers, except for some who have done creative stuff, including some of his clients because he does marketing but were looking at 1 to 3 , thats why the autos are amazing. Theyre not 1 to 3 . The consolidation chatter has calm down. There was a lot of that around. Yes. Last year in terms of fdo and dg or would something occur or walmart choose to try to compete more effectively through an acquisition, all that sort of called down. Walmart kind of let this group take oever meanwhile targt stores, the stores are looki in do youedy. How about sears . Kmart . Are they looking good . How about abercrombie and air row postal. Quick siller what a blowup. Everyone talking about the turn and i said big turn your opened in a russian suburban mall. How is that going . Russia is a little challenged right now. Quick silver this teenage apparel is fickle. You just dont know. Look at that. Thats not a two for one split or three for five or whatever. It is when you get it wrong. The Balance Sheet not that good there. When you get it wrong it is wrong in teenage apparel. You know, youre just selling the wrong clothes, you got and they also lost their they had a guy who was a great surfer, i dont know the surfer market that well, i do know that what happens when you lose a spokesman, we werent really sure about why they lost the spokesman but he had been with them 20 years, and i think that hurt them too. Dude bring in a lot get the guys name. Maybe you know him. Kelly help me here. David slater. Youre amazing. Chrysler up 17, estimates 14, they see u. S. Auto sales the annual run rate at 16. 9, the best year since 2006, and then nissan crossed 18. 8 their best year ever. This is amazing. Its amazing. We know that the average age of cars is 12. You need a car to get a job. When you have a job you need a car. This is bullish. We had marty musy talking in the previous show about paychecks, best three months for Small Business. I think that this is an incredible sign. Union pacific said the same thing. Autos are great. Of course 5 million autos in mexico. They make the cars in mexico. They make them here too. Steve liesman good point, saying lets see if they have to ramp up. Once you start ramping up opening the factories having them run more you get really good numbers for the economy. You do. Sorry to be so cheery. I know. Were going to rid you of that habit. Its not easy being a philly fan. Im trying to put a good face on things. Not easy. Eagles Training Camp not that far away. Look beat by my team. Communications with the general manager the other day. I like the quarterback. Sanchez is good. Oh, my god, sanchez. Vick with us and sanchez with you. Well get cramers mad dash after the break as we head toward the opening bell on tuesday. One more look at the premarket. More squawk on the street from the nyse is straight ahead. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. My mom works at ge. Fame, makes a man my mtake things over fame, lets him loose, hard to swallow fame, puts you there where things are hollow the evolution of luxury continues. The next generation 2015 escalade. Fame here at fidelity, we give you the most Free Research reports, customizable charts, powerful screening tools, and guaranteed 1second trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Its that time the mad dash. Start off with sky works. Yes. People, there are companies that are revolutionized themselves. This is david aldridge. Not a promoter. You dont know it. They are the innards of cell phone companies. If you want to know what this mean when they had to preannounce things were better, foxconn, essentially apple, 36 of their business, samsung, 15 . So you want to know why to buy apple. Hey, sky works says things are good thats worth more than all the developer conference ps in the world. Connect the dots for me one more time. Skyworks provides the stuff into an i phone. Stupid enough to smash open your iphone which would be as dumb as wood you would find skyworks products in there and that means apple when they raise guidance may be good for apple too. More important than tim cook not having pizazz. Lets move on. Doughnuts. Krispy kreme, they failed to deliver and the Company Stores didnt do i had mr. Morgan on, whos executive chairman. Tell me the truth. Arent doughnuts fattening and bad for you and not doing that well . He assured me its the treat, that people like the treat. David, they dont like the treat. They dont like the treat. They dont like the treat at least from krispy kreme. What about dunkin donuts, still like the treat there. You got me. They still like the treat. Okay. Maybe Domestic Stores that are owned by krispy kreme were disappointing. Samestore sales versus the franchise. Went bankrupt once. Popeyes is doing great. And last i looked thats not that good for you. Its a treat too. When we go, ill take you to my popeyes you will be blown away how good it is. Well go during the crawfish month. I look forward to that as i do so many other things were going to do together. Keeps promising me but im waiting. I go to the one in new orleans. I dont know. Thats really silly. They have real good food. I go to the one on st. Charles, its dynamite. Lot of good food in new orleans. May want to stay away from popeyes. Five minutes to the opening bell. More squawk on the street. Oh my god look. You need to see this. Show em the curve. Do you know what this means . The greater the curvature, the bigger the difference. [scifi tractor beam sound]. Sucked me right in. Its beautiful. Gotta admit one thing. Cant beat the view. Introducing the worlds first curved Ultra High Definition Television from samsung. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. Youre watching cnbc squawk on the street live from the Financial Capital of the world on this tuesday. Opening bell set to ring in a couple minutes as we settle into the month of june, which by the way, has been positive for all three averages only two times in the past ten years. Yeah. Its one of the worst months of the year. Its always so funny you have all these little diddies about may and june i found is a lockin month. A lot of people want to lock in gains before they go away. It has historically been a time when people say im up nicely for the year, i dont want to give it back, i want to be able to enjoy my house at the beach and its actually been that kind of lock in thinking that has hurt you. How does that how should that affect your strategy . You would typically lock in the biggest winners which there are been some great winners and i think that they could be under pressure, wouldnt shock me. We dont have the earnings power that makes you say i have to be in that stock. Lets look for that again. Yeah. Interesting. The worst month for the dow in the past 20 years, higher only 40 of the time. Thats statistically interesting. Who knows if its significant. I think especially when youre up, i think it plays a role. So be careful. New york times discovers salesforce. Com today. My friend peter did a real number on marc benioff and sales force saying you have to keep the bulls in the air, the stock is going up, higher the right people, the stock has been disappointing over the longterm, the stock has been terrific. Its is in that very challenged area. You saw the software as a Service Stocks get hit yet again yesterday. Theyre not the place to be. Yeah. Finally keep your eye on biotech this week at the conference, so much discussion of the immune therapies and how the golden age of cancer is going into second gear. That group with this notable exceptions of clovis, that group is levitating again. Pie owe te biotech coming back, important to watch, the future. The opening bell. A look at the s p at the top of your screen. At the big board Energy Distributor now celebrating its spinoff from national oil well. As the nasdaq, sbs commerce, cloud supply chain services. We mentioned the auto sales coming in. Phil lebeau has gm and ford. Carl, strong numbers from gm and ford. Lets take a look at the General Motors may sales increasing 12. 6 . That is well above what the edmonds estimate was for an increase of 6. 7 . Chevy the big gainer there. Sales jumping more than 14 as gm posted very strong numbers for the month of may. Shifting to ford, sales increasing by 3 . Thats better than the edmonds estimate of an increase of basically 1 . And ford is the best retail may since 2004. We also had nissan within the last 15 minutes better than expected with an increase of 18. 8 . Carl, the most important number to watch today, the annual sales pace for the month of may, gm is now saying its expecting the number to be at least 16. 5 million, chrysler out last hour saying it could be as high as 16. 9 million. Most were expecting it to be around 16. 2 million but all the numbers were getting much stronger than expected. Phil, thank you for that. Phil lebeau. Phil is right. If these numbers hold, these annual run rates for the year, you got to go back a decade to find people as interested as they are to buy cars. My travel trust owns gm. Its been a house of pain. You cant imagine how bad this badly the stock has performed. Versus the actual sales. I think those sales are remarkable. Could there have been more bad headlines about a company . The question has been will it actually stop people from going in and buying a General Motors automobile. The answer it doesnt appear to have done that at all. No. There were not discounts by the way. Relative discounts, obviously always some discounting going on. I think that the Gross Margins could be good. Watch europe. Europe had good car registration numbers. Obviously china does matter for gm. Its an international company. Wow. I mean come on. They blew the numbers away. Lets just agree. They blew the numbers away. Right. Youve stayed with the stock through all of the turbulence. Obviously it is still down, what, 13 . Its been a munster. Munster bad. But good yield. Business has been pretty good. And these numbers are really strong. Surprising. Gm and ford, the second and third best performing s p only exceeded by Dollar General. Another one that disappointed and david, when we go car shopping i will open your eyes. Were going harman systems. Beats is in the chrysler. I kept thinking that yesterday when harman was down 2 bucks we would hear something about apple and cars and we did not. I know. Did we not hear as much as people thought we would hear from the consumer standpoint thats probably true. There was a hope they would show a little leg on hardware or at least a hint. That was not forthcoming. It was a nerd conference. New coding languages and talking about accessibility for thirdparty developers. No. Did not get any hardware or really any hints of hardware. All that said the stock up about a half percent today. Up 12. 5 this year. And by far the leader in market cap approaching 550 billion. I think this is split. I think now were back in the focus of the split. People get excited about the split, get more shares, new guys coming in. Do we think theyre an effective steward of their shareholders capital. Are you kidding me . New cfo coming in too. I think theyve been tefk. They were one of the companies that wouldnt pay the dividend ahead of time because they didnt seem to think that remember we all felt the taxes would go up for dividends. They had always i think they had always been standoffish about their stock and now heavily involved in the stock. I think theyre effective stewards. You do . I do. I think theyre effective stewards. I think they are opportunistic and aggressive in their buyback. They do not have one of those buybacks in there des siller to, how they told me to pronounce it when reading my audio book, theyre there when theres a big drop and that makes sense. They are effective stewards. Its important. Very important. Theyre real good. At this time now where were starting to see Companies Choose to do purchases as opposed to of companies as opposed to just their own stock price. Right. Which take ps me to hillshire which we knew would be up, 58. 10 a share what people are willing to pay for a share of that. The highest bid on the table 55 from pilgrims pride which is controlled by the brazilian giant jbs. Will tyson come back . The market thinks its going higher from here. We will approach multiples paid for heinz. Would could argue thats a far superior business but much more of a leveraged buyout. In this case you would have synergies acroon to one of the buyers who could say were paying not really that high a multiple because when you add back the synergies we get on an annual basis we will deliver more ebitda than currently sdmits stay focused on this for a second. When they did the split up, the sara lee split up, this was a dog. People are saying ballpark franks, geez, jimmy dean. This was the big disappointment in the splitoffs. Ive done a lot of work on companies when they divide to shrink to grow. And people said, jim, dont get behind this one. This is a loser. Well, this is one of the great winners ive ever seen. Where all at action is now. These huge brand name, brand label. Thats why i like white wave. They spun it off. Dean is commodity and white wave is plant based foods and thats been a terrific business. Its a stable, recurring earnings business that conceivably has real integration benefits with another buyer. Think about it. This is not stuff that is in keeping with the natural and organic. I know. But you seem so offended by the fact that people are still eating this stuff. Its not that great for you. So what. I mean, you know. Why did i plan i mean my god. Enough with the quinoa. Will you stop . I planted a row of quinoa in my garden. I didnt know you could grow quinoa. Im trying. Doesnt look that good. Hitting it with miracle grow, chemicals. Im hitting it with soil and green. Eat jimmy dean sausages. Its not easy to grow quinoa. One final note on quinoa. Ford f150s came down 4 in may. Really . Often seen as an indicator of Small Business optimism. Housing certainly, construction, that sort of flies in the face of the good ford numbers. Alcoa going down. A couple upgrades. A lot think light weighting has been important. The f150. The f150 is iconic. I went to the plant where they make those and that is interesting. Thats been such a winner big margin. Bigger on the super duty 350. On the takeover battle front like to come back to valeant and allergan, fairly negative story i think in the times on valeant. I agree. All the things we have pointed out many times in our reporting here and our conversation about valeant and whether or not the Business Model is for real. Cutting r d and benefitting from an extraordinarily low tax rate is what shareholders really want or do they want drug development. But the key here they have to get the stock moving the other way. Every time it appears they have more of an opportunity or a chance to succeed here, the stock should move up because conceivably it will be quite creative. Thats what theyve got to do. As ive said many times now we know the timeline on this is going to play out over a long period. The question what is allergan will choose to do. Still has much time to figure that out. Post during to get a higher price by david piatt or find a higher buyer. The way that theyve attacked valeant its underlying Business Strategy and stock price and raised real questions about that currency, given that it is still the bulk of what youre going to get,. 83 shares and 72 in cash and potential cdr for this, its hard for me to imagine they could go back on that, though i have seen it before. Where . Thats a good question. I mean nasty fights where, you know, they end up sort of saying okay, but air products. Its hard. But pennsylvania is they didnt go after the currency in the same way. No. I think what bothers me here is they have to do another deal after this. They have to keep doing deals, keep the thing in the air. They took away the 150 billion target. Where they were using that, maybe that was a mistake. They do. Look, im a house man. I will admit to being a house man for piatt whos been on the show about ten times on mad money and done remarkable things and when the stock was at 80 he said listen our stock is substantially undervalued. I guess he was right. It doubled. Absolutely. With all that dow is down 37 and bob pisani is on the floor. Hey, bob. Good morning. Happy tuesday, everybody. A little bit on the weak side here. Nasdaq weaker than the rest of the market. All ten sectors of the s p 500 started the day to the downside. I think theres a little anxiety about whats going on in europe. Europe has been weak since the open. Futures down, bonds have been down. Yields moving to the upside. Mr. Draghi, head of the ecb will be talking thursday, press conference, a lot of expectations. Theyre expecting a very aggressive multistep program from the European Central bank. Theyre expecting rate cuts, expecting these longterm refinancing operations, the ltro. These are low cost loans to the banks. They did this twice before, expecting them to revive that program. Talking about asset backed security purchase programs. Of course qe programs. Potentially. And, of course, have to buy sovereign debt, Corporate Bonds of some kind and thats xwli cated over there. A lot of moving parts to this. The point is the market is expecting them to do something very aggressive and the concern i think today, the reason were seeing pullback, theres issue that may not be as aggressive as some people are anticipating. So is any of this will help growth over there, help employment over there . I dont know. Certainly doubtful it will help employment in any big way. Thats the direction theyre moving. The market anticipating Something Big for them. Take a look at sectors. All ten sectors to the downside at the open. Most of the big names. We see Something Interesting today. Wells fargo changed their waitings on some of the weightings on the sectors. Upgrading materials to overweight, improved chemical production, acceleration of buybacks, upgrading the Energy Sector on improving commodity production, but downgrading Consumer Discretionary and financial. And financials that flatter yield curve nobody was anticipating, and dampening trade activity which has been tell graphed. We heard citi talking about that just a short time ago. A little bit of an update, update on alibaba. Everybody keeps asking when is the ipo and the answer we dont know. Heres whats important, though. One month coming up since they filed the ipo. They did it on may 6th. In these kinds of ipos the sec will typically send private can comments to the company roughly 30 days later saying heres what your registration has, heres what we want, we want more information, fill in the gaps for us, tell us more. That communication is private. However, usually within two weeks, the company will update its registration. Which is public. Fill in the blanks. The sec will say okay, this is enough. You can now go into the process of actually going on a road show and setting terms. Or theyll come back and say, we want more information. The betting right now is that the sec wants a lot of information. Particularly on how the company is doing, particularly on the Corporate Structure and how theyre controlling the board. Things like that. And the bet here is that the ipo while now scheduled for midjuly to midaugust could well drag into midaugust easily because the bet is right now the sec will have more questions. So i think yurl yourr going to see an update in the registration in two weeks and another two weeks after that. A second round of questions from the sec. As soon as we get that update and i think it will occur in mid june, well bring it all back to you guys. All right. Bob, thanks a lot. Bob pisani down here at the floor. Rick santelli on the floor of the cme in chicago. Hey, rick. Hello, carl. Everybody continues to talk about the ecb and mario draghi. Most of the traders i talked to, just dont think theres any way to deliver because theres nothing to deliver. What are they going to do, what type of program . Its going to be so complex to think it will be announced thursday morning. Its hard to swallow. Well see how the markets look. Right now it seems as though a little bit of equity pressure, a little bit of selling pressure in the fixed income markets as well. But, were only talking a small amount. Look at tenyear, it 2. 55, 2. 56, the pattern holds. The stair caste. The volume isnt huge but steady. If you open the chart up were still going to test that breakout. You see it on the far left. 2. 57 from february, three weeks ago broke through, traded to our lowest yield close at 2. 44 and here we sit. Boon yields you can see theyve come up a bit as well. Heres the catch. Looking at spanish tenyear or italian ten year, look at the charts. They reversed but no more. Pretty much back on the historic low yields. Some cases for centuries as Deutsch Bank Research has dictated. The nikkei wasnt more than three or four days ago toying with 14,000. Here we flip the handle. Even though down on the year its making a nice comeback on the equity side. There was data last night, whether be whether blended inflation in the eurozo eurozone, it isnt as low as the whisper number. Chinas pmis were on the weak side under 50, thats nonmanufacturing. You can see based on the currency of the dollar versus the yuan not at the highest level since mid 2012 but seems to be making a comeback. Carl, back to you. Thank you very much, rick santelli. Getting news from carl icahn in the news a lot this week. Helping shares of fannie and freddie, up a bit. Apparently in march he bought small amounts of shares in the common of fannie and freddie. 6. 8 shares of fannie at 4 apiece. 5. 7 million shares of freddie at 4. 07 apiece. For icahn its tiny, all that is his money he manages. Its having an impact. The key here is most hedge funds have focussed a great deal more on the preferred where they believe there might actually be a real return of capital. And remember, the key gauge, not that far off from hitting court brought by perry, in terms of that socalled third amendment where they basically sweep all the profits of fannie and freddie into the coffers of the u. S. Government which has done a nice job of helping deficit reduction, but they deemed to be completely and totally illegal and well see. But ackman is in the common. Burco is largely in the preferred, though he owns some common at fair home and now icahn in fannie and freddie. New york post showing icahn in a rainstorm that has not started out well as last year certainly was. A killer year with a number of wins. Been that kind of week. Yeah. I wouldnt count him out. No. You look at the longterm track record there fbi shows up on the golf course. And then planning wire taps. I dont understand. Though dont make sense to me. Wire tap you and show you up and pull you off the 15th hole. I mean you want to be visible, you show up. People decide the guy is a crook yeah. When you show up. May not be the case. Im just saying that that was not the way i like to see business done. I wish the fbi had look, i dont know him from adam but when two agents show up in a visible place it makes a statement. A frightening statement. Approached by the fbi is frightening. Real quick on fannie and freddie common again, that is a speculation. Be aware of that. These are small amounts for icahn. Again the preferred is thought to be perhaps the better possibility of seeing significant return. I want to point that out. Those are not that liquid and can be bid up quickly. Jim cramer on twitter every day, should i buy fannie, its up to a couple Congress People and senators. Its not up to the hedge funds. Maybe the courts. Right. When we come back, gary bettman, ticket prices for rangers kings, surging. Were going to hear what he has to say about the economics of hockey, business of hockey overall when squawk on the street continues. Were moving our company to new york state. The numbers are impressive. Over 400,000 new private sector jobs. Making new york state number two in the nation in new private sector job creation. With 10 Regional Development strategies to fit your business needs. And now its even better because theyve introduced startup new york. With the state creating dozens of taxfree zones where businesses pay no taxes for ten years. Become the next business to discover the new new york. [ male announcer ] see if your business qualifies. Thats keeping you from the healthcare you deserve. 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Just three days away from jobs friday and another chance for you to nail the number, win a nice prize. Tweet us your predictions for may. Use our handle squawkstreet and use the nail the number. If you win, a cnbc 25 pillow autographed by the squawk on the street gang. Until one minute before the prooi release at 8 30 to submit your predictions. Cramer will sign it right now. Definitely. This is a winner here. With the stock tip you typically put on there. Exactly. This is nice to have like a saying you can do. I never know what to say. I know. Put my name. Lets go mets. Wheres the offense. This month could be an interesting month. I know marty from paychecks was saying, listen, could be worse than last month. Its interesting. Hes got a good handle. There it is. Enjoy. Good luck. Dont forget that nail the number. When we come back stop trading with jim with the dow down 46 points. Dont go away. I always wanted to design a bike that honored those who serve our country. And geico gave me that opportunity. Now naturally, we wanted it to be powerful, innovative and we built this bike as a tribute to those who are serving, those who have served and their families. And i think we nailed it. Geico. Proudly serving the military for over 75 years. But with less energy, moodiness, and a low sex drive, i had to do something. I saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. 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A lofrts people have been lot of people have been discussing this story in the Financial Times that Goldman Sachs is going to move much more into commercial lending, into wealth management. Ive been waiting for them to rec niz that they dont have the Profit Center from the fixed income anymore on trading. This is a positive, no the a negative, even though a lot a of people on twitter saying how desperate can goldman be . Goldman has to reinvent constantly and this is the way. Second, people say why did facebook turn around. A guy that covers Facebook Like no tomorrow, fellow from topeka, victor anthony, saying facebook is moving into direct advertising. Direct response advertising is usually considered to be not that high a call. People like branding. Theres a lot of money in direct response and turned around the stock. Im happy to see goldman doing this and facebook needs direct response because google has a lot of direct response. You can take share. Interesting. You got a heck of a lineup tonight. I have companies, nothing has been hotter than Palo Alto Networks since they settled the juniper deal. Dyna equity, you know them as ihop and applebees, bill mcdermott, ceo, loves to take aim at the sales forces and oracles and we will have fun tonight. Wow. That is a great lineup. All right. Ihop versus krispy kreme. I hop has been the leader in putting the calories on the flap stacks. You can get flap stacks under 500 calories. Bob evans. Saying theyre going to get a bid, your activist friends would love it. Krispy kreme did meet estimates but revenue light. Samestore sales disappointing. I believe that the International Business is where the hope there is. Watch these oil companies, independent oil, pioneer, the permian, buzzing with pipelines getting that permian stuff out to where it can be refined is the big story we all have to go down to the permian. Go to midlands. Im ready. And odessa. The twin cities they call them. Ill see you tonight, jim. Simon here with a look at whats coming up. Good morning. Well look at how you play apple after yesterdays conference and the product launches and stock split coming. And the nhl commissioner gary bettman joining us live. As we enter a crucial phase for World Markets where Interest Rates are likely to go not just with the ecb but payrolls on friday and what that means now for equities at a record level. Hour two of squawk on the street. Drivers want to go further with their electrical vehicles. But you cant take a trip from lisbon to stockholm if you cant plan and recharge along the way. The European Commission is using cloud to make this possible. Creating a single charging and Billing Network across 28 countries. So drivers can travel as far as they want to go and when they want to go. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Cut [bell rings] this. Is jane. Her long day on set starts with shoulder pain. And a choice take 6 tylenol in a day which is 2 aleve for. All day relief. Hmm. [bell ring] roll sound action in todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Pcentury link provides reliable yit Services Like multilayered Security Solution to keep your Information Safe secure. Century link. Your link with whats next. Breaking news. April factory orders, hitting the wires momentarily. Were expecting up half of 1 . Our last look was up 1. 1 . 0. 7 . Better number than we anticipated and last month revised higher from 1. 1 to 1. 5. Whether youre looking at auto sales, as phil on the floor lebron has be lebeau has been discussing or recent spat of data it seems to be improving. Back to you. Thank you very much. Lets bring in st. Louis feve lr more. This is a crucial period, look at the ecbs and payroll on friday, whether the Interest Rates will stay as low as they are or get a bounce. This is crucial now. I think thats right, simon. You can kind of see how crucial it is by what happened with the ism data yesterday. The market is ready to sell off if the data doesnt remain robust and ready to buy it if it does. I think this number comes in with the robust data that weve had that 55. 4 yesterday in ism, the actual number after the third correction by ism. Beating the expectation, revision up to march going to help gdp as well and then were looking at the nondefense aircraft number. The Business Investment number, which was 2. 2 for march and then minus 0. 4 for april. Is the number we have here. And then weve been following these vehicle sales. Looks like theyre blowing it out of the water. We dont have the total annualized rate just yet, but phil lebeau, earlier, pointing out that gm sees it at 16. 9 rate. Ive seen doubledigit increases. Well let phil give you the details. Adp on wednesday, International Trade and ism nonmanufacturing coming up on wednesday. Just want to show you the vehicle sales chart which we have. You can see december, january, february the depressed Winter Weather months. People were talking about, if we get a numbers at just 16 million, it will be the first time we have a threemonth average of 16 million in the past seven years. First time for the past seven years. Moving on looking at thursday, we have jobless claims coming out, expected to be 310. The friday nonfarm payroll number. 210 expected. Unemployment rate 6. 4 and watching as always hourly wages. The number today the vehicle sales number, going to factor in the gm gdp, well bring you the rapid update. Show you where it is right now before the update. Were tracking minus 0. 8 on q1 and 3. 6 . Theres your bounce back. Youre right, a lot has to do with the outlook for Interest Rates and where people think youre going. What im looking at, though, is remarkable stability in the outlook. October and, in fact, through next year and well have a cnbc fed survey, the ecb edition, coming up tomorrow with the outlook for what the ecb will do and well have that tomorrow morning for you. Just for the record let me point out there were actually i believe five weekends in may. It was an unusual calendar month when we look at the auto sales. Just worth bearing in mind. Definitely. And whether or not that seasonally adjusted out for the five i dont know. Ostensibly they know that. Often times when an extra weekend a month the seasonals have trouble digesting that. Yeah. Still, quite a blowout when it comes to those numbers. Steve liesman thanks for rounding it up for us. How the Economic Data is impacting the markets. Looks like stocks are losing a bit of ground this morning coming off the record highs. Lets bring in two cnbc contributors to help get you through the markets. Rich bernstein, don luskin, the cio of trend macro. Don, these auto Sales Numbers are absolutely incredible. Youve got good numbers on factory orders. You have to wonder now that were not seeing much of a stock Market Reaction, how much of the better Economic News is already baked into these record high stocks . I dont think investors have even begun to appreciate the better Economic News. We have been conditioned by five years of a crummy recovery to this idea that were going to have 2 growth as the new normal. Folk, the age of the new normal is over. Were about to see a sequence of beat after beat after beat on all the macro numbers. We are going to have quarters in 2014 and 2015 where real gdp has a five handle. The stock market has it right by being at new alltime highs. The bond market is the one that has it wrong. Rich, do you agree with that extremely optimistic view on the u. S. Economy and the u. S. Equity market . Well, im not sure i can say were going to beat every number the way don did but i will tell you the risk in our view has been for the last five years. The risk is consistently that things would be better than people thought. If you look at the way portfolios are positioned, whether its hedge funds or Pension Funds or whether its individual investors everybody is still more concerned about protecting against the downside than accentuating the upside. I dont think youve ever got an market top where people have been more worried about protecting against the downside. I know you have an optimistic take on the u. S. Not just about the u. S. Two big event risks this week. Jobs on friday but the ecb comes first on thursday. How do you want to be positioned there . What does it mean for u. S. Stocks and u. S. Bonds . The ecb seems destined to do some kind of european version of qe. I think it is a completely unnecessary gesture. I actually hope they dont do it. If they dont the market will be disappointed and well have to digest that for a couple days. The way equity and bond markets have performed worldwide year to date in 2014, you know who the best performing markets are . Equity and fixed income . Its the socalled pigs of europe. Portugal, italy, spain, all the ones that were dying in 2011, 2012, 2013, best performers in 2014, barely had a correction. Why does the ecb need to act . Why are we worried about europe . Europe is a bright spot. Investors are paranoid about the downside, the downside is gone. I can forgive you suggesting well get 5 growth in the United States because i would love to dream thats possible. I cant let you get away with the nonsense you delivered on the european economy. Weve had a print on inflation at 0. 5 . Jpmorgan suggests next month it will go to 0. 3 . Pimco is suggesting across the eurozone we will get growth between 1 and 1. 5 . If you dont think the ecb should do something now or done something earlier you are on cloud cuckoo land certainly. I have it to tell you, i mean im sorry, i im sorry, i dont i dont drink the global central banking cool aid theres something about 2 inflation that arose peoples savings faster than 0. 5 inflation. This is a Perfect World for europe. Late cycle out of a long recession, just going to be in the sling shot phase where growth accelerates and if they can do it without inflation thats a blessing. Its not happening. Why should we correct that blessing by creating inflation we dont have. Have you ever heard of a country called japan . Have you seen the destruction of wealth, growth that occurred there because of thats been outright deflation. Were not seeing that. You list the list of experts like jpmorgan and whoever else you had they have their forecasts. I dont forecast that. Thats not in the numbers now. Sure, if that happens and if it goes on for 15 years, then we can talk. Can i play the hockey referee and step in between you and two and push you two apart since were in the nhl finals. I think, you know, the thing about the ecb which most people i dont think recognize is the ecb has not been neutral, the ecb has been tightening into this environment of slowing inflation in the risk of deflation. Credit in europe has been contracting, bank Balance Sheets contracting and the ecb has been contracting their Balance Sheet as well. Theres supposed to be a counter balancing force to whats going on in the real economy. Theyre fueling the deflationary fires. Theyre not because the ecb Balance Sheet is a function of what banks choose to take from it. The ecb has not been tightening. Thats a myth. I want to spin it forward and get back to the u. S. Its a big week for Economic Data here. With this outlook youve suggested, higher growth, certainly better numbers, better stock market, do you think that there is a risk then that starts thinking about a Federal Reserve tightening Interest Rates, we get back to normalization of Central Bank Policy and that could sort of hold the euphoria in the markets . I think this is what this what is the bond market has been reacting to, why instead of 3. 03 on the ten year e we have 2. 55. Janet yellen has changed the feds forward guidance. Stop getting investors focused on when we go from zero to nonzero. Shes giving guidance across the whole curve. Shes now saying whatever happens in the economy, whatever you think the fed funds rate should be, five or six years from now, depending on how everything will happen, well be 2 lessp. Thats going to lower longterm Interest Rates and great for the economy and stocks. The only break on that, if we get an inflation outbreak. Thankfully since were coming worldwide from a starting point of low inflation, thats not much of a risk. I dont know, rich. Were starting to see risks. What do you think . Starting to see whiffs of inflation or price pressures. No . I think we have to differentiate between normal cyclical inflation as the economy begins to mature and the United States becoming botswanna or Something Like that. I think that yes, inflation will go up as the cycle matures. Thats perfectly normal. We actually should want that to happen because it says the economy is starting to hit on, you know, six cylinders or seven cylinders. I think we would want that. That is a far cry from lets go invest in gold and canned goods and shotguns. I dont think i think the people that are worried about inflation getting out of control are really worried about nothing right now. All right. Gentlemen, good to see you both. Thanks for all the insight, commentary wound up on the markets, rich and don here on squawk on the street. Meantime dow is down 28. Lets send it over to dominic chu and a market flash. Some stocks down a lot worse than others. A tough opening for the casino stocks, namely the big ones like wynn resorts. The biggest loser in the s p 500. Las vegas sands and mgm moving lower that makau gaming revenue up weaker 9. 3 , below the estimate of around 15 . Those stocks down anywhere from 2. 5 to 3. 5 on the day so far. And you know whats interesting, simon, about this, you cover these hospitality companies, with names like wynn, Las Vegas Sands and mgm, levered to chinese gaming and makau hinges on whether the chinese are spending on the gambling Discretionary Spending on gambling and casinos. Today to the downside. Theyre always a volatile trade. So far betting against the macau dynamic has not worked. Chrysler, ford and General Motors reporting may Sales Numbers and also the day that tesla holds its annual shareholder meeting. Phil lebeau is live in chicago and joins us now. Before we go further, can you just deal with this idea that maybe the automotive sales are distorted by the fact that were five weekends this may and only four weekends in the may we had last year . Well, the raw number will be larger but when they adjust the sales rate they will take that into consideration. And the sales rate when adjusted is expected to be higher than many on wall street were initially forecasting. Well talk about that in just a little bit. Here are the may numbers. By the way, we just got toyota numbers, well have those in a bit. All of these beat the street by a wide margin, chrysler, ford, gm, nissan, up with chrysler and gm posting doubledigit gains. Talk about gm because of all the recall news, theres been speculation we would finally see perhaps a slowdown in business in the show room. Weve been reporting for some time traffic has been strong and reflecting in may. Chevy sales jumped more than 14 partially on the strength of the chevy cruz and demand for that vehicle. Also the inventory for General Motors dropped to 77 days at the end of may. Thats an improvement from april when it stood at 85. Now, on to chrysler and the story here is jeep. Jeep posting its best Monthly Sales ever. Not just may, any month ever, theyve never done better than they did last month. Jeep may sales jumped 58 and guys, this what is a lot of people will be focusing on today. The sales rate and the first five numbers that you see, the first five bars, the ones that are in blue, those are the annual sales pace the low coming back in 2009. Look on the far right. The estimate for 2014 in the month of may, thats chrysler saying it will be 16. 9 million. Gm was out saying it will be at least 16. 5. Both of those are above what the street was expecting. And as you take a look at shares of General Motors and ford today, peter shack who crunches our numbers says its been a long time since theyve seen these guys in the top five when it comes to s p gainers on the day. Both of the stocks moving higher this morning. Real quick we want to talk about toyota. Numbers for the month of may here in the u. S. , toyota sales up 12. 6 . Again, another automaker beating the estimate. The estimate from edmonds increase of 10. 5 . You have all of the major auto makers, guys, beating the street by a fairly healthy margin in the month of may. And there you see the adjusted numbers there, what, up 17 . So a healthy beat by all of the major automakers. Yeah. That is a clean sweep, phil. Thanks so much for wrapping that up for us, phil lebeau, covering auto sales for may. Apple unveiling ios 8 at the Developers Conference this week. But is it enough to make investors buy the stock . It is up today. Well talk how to play it when squawk on the street comes back. [ tires screech ] chewleys finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. Get the most extensive charting wherever you are with the mobile trader app from td ameritrade. How much money do you think youll need when you retire . Then we gave each person a ribbon to show how many years that amount might last. I was trying to, like, pull it a little further. [ woman ] got me to 70 years old. Im going to have to rethink this thing. Its hard to imagine how much well need for a retirement that could last 30 years or more. So maybe we need to approach things differently, if we want to be ready for a longer retirement. Shares of apple are trading slightly higher after the company unveiled a new operating system at its developer conference. The stock fell monday as investors hoped apple would offer more details about its product line. Some people thought they would. Usually this isnt the conference that you unveil hardware at. Bear in mind that apple is up 16 over the last two months. An analyst with bgig has a buy on apple and 600 price target. Welcome to the program, walter. Thanks for having me. What did you think of what you saw yesterday . I mean there wasnt really that much to comment on. Its a Software Event meant for developers. This is going to be a shock to people, but wwdc actually stands for world wide Developers Conference. Its not an investor conference. As you noted in the setup, they dont they havent announced products there. Theyve separated that back since like 2010 announced the iphone 4. This is more of something more to Show Developers what more they can do. There was interesting stuff in that regard to get the developer base encouraged about continuing to develop for their products. Yeah. I mean, the health kit and home kit basically some would say filling the vacuum on the internet of all things and creating a Building Blocks to go forward, i dont know, with an iwatch to then have the totally connected lifestyle i would argue. Thats true, but theres also this integration concept. Integration is not an easy thing. When you open up your ipad and see a date and click on the date and the calendar comes up, that stuff is not easy to do. So to enable developers to more to integrate more with some of the functionality thats in the products, theyre trying to build more of an ecosystem within their own world. The issue is its not a platform or its restricted to their platform. In the case of google, i can go across multiple platforms, android or ios or whatever it is. What apple is trying to do is keep you on their platforms and create an ecosystem so theres a halo effect so you buy more tablets and whatever products theyre going to launch. I wonder, rich, who is most worried by the apple announcement yesterday with the latest Software Features . Was it a google, maybe one of the social players . Or perhaps a samsung that competes on hardware . I think theres always people that worry whenever apple comes out with something new as far as how its going to impact their existing business. You can talk about some of the social or google when talking about search and trying to skim a little bit on not having you to go to google and say search within safari or text messaging, add all the functionality is that going to hurt operators around the world or the large text messaging over the top services that companies are spending billions of dollars for. Walt, what do you make of this between them and microsoft . Is it longlasting . Whos in a position of strength versus the two players . Which again . This day tant between them and microsoft, building of a bridge between the two . I think microsoft is theyve tried on the handsets on the recode conference theyre shifting more towards other products almost recognizing on the hand seth side of things it hasnt gone that well for them. So i think maybe its a daytant but in apples case all they care about is selling new phones and new products. Thats been a big promise. Cook said it last year. Products all across 2014. That was reemphasized again at the recode conference where there was a mention of great new products, best products theyve seen in 25 years by eddy cue. A big anticipation for the products apple has. In the meantime i wonder if its worth crediting apple with transforming or tim cook transforming in terms of leadership what were seeing before our eyes. Craig federighi the head of software written about in the press, usa today suggesting he might be the new steve jobs. Look at what cook has done, hes assembled team apple, eddy cue, johnny i from the old school, angela ahrendts, jimmy i owe vin one of the most successful record producers and dr. Dre, much of the time tim cook has been criticized not being up to what steve jobs was because steve jobs was the man in the limelight. Seems to me tim cook will put team apple on stage and it will be a force to be reckoned with down the line. Management is important and putting the right people in place is good. To say fed ricci can will be the next guy, just because you can introduce your products well doesnt mean youre going to be a great ceo. A great ceo is putting strong people in place which is what tim cook is doing. With that said there is a big promise for new products in 2014 and while theres an opportunity for a massive upgrade cycle on the iphone 6, because theres positive things happening in the United States, they still have to deliver on the promise of new products. No matter what you mention toward that list of Management Teams if they cant come up with something new to deliver on the promises, people are going to start questioning the Management Team again. Got it. Eddy cue has written it large, we have the best Product Pipeline ive seen in my 25 years of apple and we will see it later in the year. Good to see you. Thank you very much for joining us. Walter from btig. Coming up, Tech Startups are not only disrupting the wall street world but turns out the real estate world as well. Landlords are scrambling to find ways to profit. How theyre doing that. And later nhl commissioner gary bettman joins us for a live interview days before the stanley cup final begins. Live after a quick break. No matter what kind of business you own, at t Business Experts can help keep it running. Seamlessly. So you can get back to what you love. When everyone and everything works together, business just sings. And cialis for daily user you. Helps you be Ready Anytime the moment is right. Cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. 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So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Take a look at the consumers staples sector. One of the worst performing sectors in the s p 500. My favorite sector, dominic chu at hq with more on that. Shocking you are consumer correspondent like the Consumer Staples companies. They are weaker and again theyre down by about a third of a percent in the s p this morning. Munster beverage the biggest laggard in the s p 500 for this sector followed by whole foods and lorillard and colegate palmolive and procter gamble. Still the second worst performing sector those Consumer Staples and those names leading the charge lower today. Back over to you. Thank you very much, dom. Straight ahead on the program, the senate race that represents the tea partys last chance to unseat an incumbent this year. Its steeped in controversy, to arrests to ugly accusations. All the details on what could be a pivotal race for the gop next. Fame, makes a man take things over fame, lets him loose, hard to swallow fame, puts you there where things are hollow the evolution of luxury continues. The next generation 2015 escalade. Fame trwith secure wifie for your business. It also comes with public wifi for your customers. Not so with internet from the phone company. I would email the phone company to inquire as to why they have shortchanged these customers. But that would require wifi. Switch to comcast Business Internet and get two Wifi Networks included. Comcast business built for business. The startup world is reshaping the world of real estate and landlords finding new ways to profit. Diana olick live in crystal city with that story. Hey, diana. Carl, its all about offices and the new way we work. The Office Sector has been so slow to recover after the recession. Major National Landlords they usually like the big tenants, the law firms, big companies, but just not finding them. One here in crystal city is taking a bet on the little guy. In fact, lots of little guys in shared spaces. Not only filling the offices but creating new urban corridors with restaurants and retail outside the nations capital. Sparse space in crystal city, virginia, more than a dozen Small Companies barely stand out from each other but they are plugged in. Into a fund that aims to serve them at every level. What were doing is doing it top down from here, saying hey, lets dangle all this money in front of the high growth companies, and lets make them a compelling offer of where they can live, work and play. Venture capitalist paul has funded hundreds of startups but noticed a new niche. The gap in the middle where you have revenue, whether a million bucks in revenue, seven in ten people working for you, hard to raise the money you need at that gap. But also hard to find office space. Where do you put them . If the 50 million Crystal Tech Fund you put them here in a work space owned by one of the nations largest publicly traded reits which happens to be an investor in the fund. Crystal city has always been and will continue to be a Strategic Value oriented location. We happy to have 26 buildings, 8 million square feet in this location. Now whats so interesting here is that they dont want to just build the office space, they want to create an ecosystem. That is, bring in the Tech Companies to the spaces, but also fill up the entire urban space. Theyre going to convert an Office Building into micro unit apartments with shared spaces. Again, its the whole campus style of living that they believe the younger millennials will want. Sara . Very interesting. Diana, thanks very much. Look forward to a lot more on the intersection of tech and real estate from you throughout the day. I want to talk about the market story of the week. That would be the euro. Because thursday is the ecbs most highly anticipated and important meeting of the year. Everybody is wondering, how you trade the euro into that allimportant meeting. Right now theres a 2. 8 billion bet against the euro that it will weaken on further easing measures to be announced on thursday, including lowering Interest Rates into negative territory, upping liquidity measures to pump money into the system. All of that would bode for a weaker currency, not so fast though. The question is how much of those moves have been priced into the market. The euro is sitting near a threemonth low against the dollar. A fourmonth low against the japanese yen. Mario draghi may want a weaker euro but the top strategists on wall street, guys, say to do that, you would have to see something extremely aggressive announced perhaps a qe or at least an announcement that a qe plan could be in place. Eventual asset purchases. That would be a surprise. Not priced in or expected on wall street. Surveyed a bunch of their clients, more than 90 expect mario draghi to lower Interest Rates more than 50 , do expect ltr or a Lending Program but less than half expect more. And that means you could actually see the euro rally. Its very interesting, and its not just a move that affects the currency market. It actually affects a number of different assets. There are even etfs you can use to track the euro where you can trade them like a stock if you want to go long euro, fxe the ticker, short, ufx. There has been a lot of activity as you might imagine going into this important ecb meeting. I think the other thing we should mention is the human amount of demand for our ross because of the m a activity or the expected m a activity. And also theres been one trade, one clear trade that has worked recently. Thats to buy fixed income in europe. Because growth is so bad and inflation is possibly deflation. So it was a oneway bet for fixed income. The more theyve talked, theyve talked up the problems theyve had the more the money has flowed in and the bond markets have risen and may be another reason why you see treasuries higher. A new read on european inflation today. 0. 5 . The question is, what will the Market Reaction be . Is this going to be so aggressive and impressive by the ecb . You hear all of u. S. Stock strategists and traders talking about it as well. Stocks would rally. That would boost the euro. Very counterintuitive and when talking about a 5 trillion market a bunch of shorts get caught thats a big deal. Really . Yes. 2 billion in a 5 trillion. 2. 8 billion the futures in option speculative activity tracked by the big trade. We will see early thursday morning. A primary race going on today that could determine whether the tea party is able to take its last senate seat. Its a possibility that is weighed on the contest which has been at times extremely controversi controversial. Cnbcs washington correspondent john harwood live outside of a Polling Center in jackson, mississippi, with the details on that. Good morning, john. Good morning, simon. This is a race that would draw attention in any event. Youve got an older republican incumbent, sixterm senator thad cochran running for a seventh term against a Tea Party Challenger Chris Mcdaniel, who campaigned with sarah palin over the weekend. Younger candidate trying to make a changing of the guard argument. Its gotten exceptionally troublesome and nasty because of what happened at a nursing home a few weeks ago. Some supporters of Chris Mcdaniel went into the nursing home, took photographs of senator cochrans wife who suffers from dementia and who has been there a long time to dramatize senator cochrans age or in the decade shes been there that senator cochrans developed a relationship with another person. In ne case, it has produced attack ads from both sides that have spiced up this race with cochran going after mcdaniel, mcdaniel saying i didnt do it. Take a look at these ads. Its the worst. Chris mcdaniel supporter charged with a felony for posting video of senator Thad Cochrans wife in a nursing home. Had enough . Youve probably seen the negative attack ads. Newspapers called him shameless. I called them outrageous. Now this is, of course, a classic for why people dont like politics in this country. We heard that from a voter yesterday outside a shopping mall. Just do not like dirty politics. They should be able to promote themselves without having to bring in the dirty politics. But heres a relevant fact about this dispute and this ugly episode. It has not, if you look at the polls, collapsed Chris Mcdaniels support. Some predicted it would when it broke. Hes running even withed that cochran. This could go either way. Small electorate, 300,000 are going to vote. Notably, simon and sara, this is a primary system where you can vote whether youre a democrat or republican, in either primary. I talks to a democratic voter who went in, cast a ballot in the republican primary forred that cochran. Of course that dynamic could work both ways. Looks like were headed for a long night. Going to be a close race. Well be watching. John harwood, thanks very much. Bigger houses, bigger tax bills. Robert frank is back at hg with a story on top property taxpayers. Robert . Are you going to name names for us . We are. Only thing better than real estate voyeurism is tax voyeurism. The top property taxpayers in the tristate area, new york, new jersey, connecticut. In at number three charles wang, the former ceo of computer associates. His mansion on long island has a market value of 36 million. A property tax bill of 564,000 a year. Coming in at number two, is brad jack. The former Lehman Brothers executive. His waterfront mansion in fairfield, connecticut, on the market for 62 million. Its 13,000 square feet. 17 bedrooms, 20 acres and the tax bill, 579,000 a year. Coming in at number one, the biggest property taxpayer in the tristate area is ira renner. His 64,000 square foot home has a market value of 247 million. Its on 63 acres. 29 bedrooms, 39 bathrooms and 30,000 square feet of outbuildings. His annual property taxes, 649,281. His taxes are a bargain compared with some folks in california. Property shark says massa son of softbank on the hook for 1. 28 million in property taxes for his Silicon Valley pad and petra eckel stone pays over a million a year and gary rennic pays 971,000 a year in taxes. This is a tax we dont often talk about but if you have a big house, it can add up. Guys . You know what they say f you to ask what the taxes are going to be. Those are stunning numbers. Thanks a lot, robert frank at hq. When we come back, gary bettman joins us live. Well talk about rangers kings, stanley cup final and hear what he has to say about the business of hockey which is back in a big way. Were back after a break. Huh, 15 minutes could save you 15 or more on car insurance. Everybody knows that. Well, did you know that game show hosts should only host game shows . Samantha, do you take kevin as your lawfully wedded husband. Or would you rather have a new caaaaaar say hello to the seasons hottest convertible. Ohhh. And say goodbye to samantha. [ male announcer ] geico. 15 minutes could save you 15 or more. With all the opinions about stocks out there, how do you know which ones to follow . The equity summary score consolidates the ratings of up to 10 independent Research Providers into a single score thats weighted based on how accurate theyve been in the past. Im Howard Spielberg of fidelity investments. The equity summary score is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. You need to see this. Show em the curve. Do you know what this means . The greater the curvature, the bigger the difference. [scifi tractor beam sound]. Sucked me right in. Its beautiful. Gotta admit one thing. Cant beat the view. Introducing the worlds first curved Ultra High Definition Television from samsung. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Welcome back to squawk on the street. Another tough day for Clovis Oncology shares. The stock plummeting as citigroup cuts its rating to a neutral from a buy rating. On monday clovis said 22 of patients in an early stage study testing its lung cancer drug experienced high blood sugar levels following a 7 drop from yesterday. Stock down another 15 near session lows today. Carl, another rough day for clovis. Back over to you guys. Thanks so much. The nhls long awaited stanley cup finals one day away. Represents a rare sport duel between two of the top tv markets as the rangers take on the kings for the cup froe trophy. Joining us is gary betman jones us live from 30 rock. Good morning. Good morning. Great to be with you. Fun time of year. I want to talk about ticket sales but Sports League of the year, sports event of the year in the winter classic, sports executive of the year, yours truly. Whats going on in hockey . Were in a very good place. Weve spent a fair amount of time trying to build a foundation for our game, making sure the game on the ice is healthy, entertaining, exciting and competitive and at the same time building our businesses around the game, particularly as it relates to our Business Media partners such as nbc in the United States and using all the digital platforms. Weve got the best fans in all of sports and the connection right now is better than ever. Youre referring to labor strife in the past, lockouts. We know what happened to the sport a few years ago. A lot of viewers managers of sorts would want to ask you, how you turned it around. Is there an easy lesson in there. Well theres no easy lesson in running any business. But particularly with a Sports League just to have a healthy system. You have to have a healthy game. And in our case, its unfortunate that we have had to go through work stoppages to address our problems, the fact is, we needed to change the fundamentals to get the game healthy and our fans, who are the best fans in all of sports, understood what we were doing and when we solved the problems and we didnt do it with a bandaid, theyve come back in record numbers, both after the year we lost an entire season and the abbreviated season of two seasons ago. Were in a much better place because we took the hard medicine in the short term. I have a question about valuations. As you know the nba is working with Steve Ballmer to close a 2 billion deal to buy the clippers. According to forbes the two most valuable teams in the nhl are worth 2 billion together. Is Steve Ballmer good for nhl team owners . I think what youre seeing with the clippers is a combination of two things. One, sports, particularly because were great the best content in this everchanging media landscape, sports franchises in all sports, the majors, have become increasingly valuable. And i think you a unique circumstance with the clippers, both as it relates to the unfortunate way this developed, the market itself, and the uniqueness of the person whos buying. If the clippers are worth 2 billion, we have franchises that are worth multiples of that. This is going to be the most expensive final since looks like 09 2010. Is that a function of the markets we mentioned earlier . Is this about hockeys comeback . When you talk about the average ticket price, i think thats what youre referring to is the secondary market which shows that perhaps our clubs dont even charge enough. Theres a huge demand. Obviously having the two largest markets in the United States competing for the greatest trophy, most historic trophy in all of sports, and the fact that the hockey throughout the season and particularly these playoffs, has been so compelling, theres a huge demand to get into our arenas and Madison Square garden and Staple Centers both going to be rocking and its going to be a real fun place to be and im sure the games are going to be terrific. Youve been in the job more than 20 years, through three lockouts. I wonder, gary, how much longer do you see yourself at the helm . Are you trying to make me feel old or get rid of me . No. She does it all the time, im telling you. Curious about your future. My future is i love what i do and i work for the best owners in all of sports. I work for the best players and the best fans in all of sports and as long as i get up every day excited and they want to keep me around im going to keep doing this. You know, despite everything that has happened in the past, you still have your critics, gary. People who say that the players hate the deal, that you were the source of all that strife in the first place. Does it matter to you . Do you have to win the hearts of everyone before you do step down . You cant win the hearts of everyone in this industry. If in fact youre thin skinned and cant take the criticism you should do something else. While there are always going to be critics, the fact is weve made longterm decisions. We were criticized for work stoppages but we came back healthier each time. We were criticized for making a revolutionary extraordinary deal with nbc and Nbc Sports Network as opposed to taking traditional route with other Sports Networks and that has worked out fabulously well. In fact, the same night that i won the league won three awards, nbc won nbc sports won three awards. This has been a great partnership. There are always going to be critics. Theres always going to be debates, particularly in sports, but even if youre a player, when i took over as commissioner i think the average player salary was about 300,000 a year. This year its probably 2. 7 million per player for the year. There may be critics, but if you look at the realities, the sport has grown very well. The players have done very well. And most importantly, since the game is better, the fans are in a much better place. We have perhaps the best competitive balance in all of sports. All i know is i heard its cheaper to fly to l. A. And buy a ticket there than be a ranger fan and try to buy one here which is an amazing statistic. Great time to be a ranger fan or kings fan. Mr. Commissioner, great to see you. Please come back. Thank you. Good to be with you. Gary bettman of the nhl. Enjoy the playoffs. Thank you. Still ahead on the program, 9to5mac will join squawk ally live with his reaction to apples developer conference coming up on cnbc. To new york s. The numbers are impressive. Over 400,000 new private sector jobs. Making new york state number two in the nation in new private sector job creation. With 10 Regional Development strategies to fit your business needs. And now its even better because theyve introduced startup new york. With the state creating dozens of taxfree zones where businesses pay no taxes for ten years. Become the next business to discover the new new york. [ male announcer ] see if your business qualifies. Theyre the days to take care of to disbusiness. New new york. 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See how fast your internet can be. Switch now and add voice and tv for 34. 90. Comcast business built for business. A Beautiful Day here manhattan. Down to chicago and rick for the santelli exchange. Thank you very much, simon. Welcome matt, thanks for taking the time this morning, matt. Always great to be here. All right. Obviously in my opinion, the biggest news thats going to affect the marketplace is going to be thursday morning, the ecb meeting. What are your expectations . Well, i totally agree. I think this is going to be a very important event. The problem is that the markets are pricing have already priced in a significant move in the markets. You look what happened with the big qe programs and big stimulus programs from japan and the u. S. In both of those places, the stock market was down 60 in the years leading up to the to the qe programs, and then the big stimulus packages. That left the markets washed out. The european markets, both the stock market, up with 60 and 30 in the last year, its way overbought. And the bond markets are the yields are at historic lows. Theyre really expecting. Theyre not set up the way the other markets were in the past. You know when it comes to discern whats real and feddriven or maybe not as real, i look at some of the southern european Interest Rates, spain, portugal or italy, and the question is simple, do you think the current rates are real value . Are these Interest Rates tradeable and real . I dont think so at all. Look at the spread between italian ten year note and the u. S. Tenyear note. Or spains tenyear note. There are minimal spreads there. Are you trying to tell me that those countries have the same risk default that the u. S. Has . Thats ridiculous. People are buying with the anticipation that the ecb is going to buy them back at better prices down the road, not for fundamental reasons. All right. Let me get this straight. Basically many of the banks, the big banks in spain and italy are holding their own paper. If the level isnt a real level, then basically its the notion of the quarantine effect, like the effect of all the trillions of dollars in securities the feds hold. Can they hold them forever . If the ecb doesnt have something specspectacular, whatd of movement will they have . I think they could take off. Exactly. Even if the fed im sorry, even with the ecb makes a big movie, i think its already priced in. Sarah was talking about the short positions in the youre row. We are set up, they are high, and the market could sell off a little bit. If they dont meet expectations, a big set up. And if they did taper last year, the market would rally. They were set for a selloff. The market took off. We could see a similar move with the ecb on thursday. Matt, thank you for taking the time this morning. I look forward to learning firsthand what the decision will be on thursday morning. Back to you. We all do. Rick santelli for that ecb meeting. Nice weather on wall street, take it back inside to find out whats going on squawk ali. Kayla, 140 characters or less. We have the blogger, the investor and the 16yearold app developer, and the Fastest Growing Cloud Company ever. Ceo of that company is on squawk alley qualiti, coming. mother vo when i was pregnant. I got more advice than i knew what to do with. What i needed was information i could trust on how to take care of me and my baby. Luckily, unitedhealthcare has a Simple Program that helps moms stay on track with their doctors and get the right care and guidancebefore and after the baby is born. Simple is good right now. anncr vo innovations that work for you. Thats health in numbers. Unitedhealthcare. 800,000 hours of supercomputing time, 3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. Whether its building the worlds most advanced satellite, the space station, or the next leap in unmanned systems. At boeing, one thing never changes. Our passion to make it real. All right. Were just a few days, three days away from jobs friday. That means we have another opportunity to nail the number. And win a great prize. So heres how it works, tweet us your predictions for the may nonfarm payrolls number. Use our handle on twitte twitter, squawk street. We celebrated here at cnbc, rang the closing bell, it was a big celebration. Heres the pillow, cnbc, if you win, you will bwin this pillow, autographed by the entire squawk on the street gang. The entire cnbc cast of characters. Just us. A and you have until 1 minute before 8 30 friday morning when the monthly jobs report is out. Economists looking for the number of 200,000. See if you can nail the number. A lot of positive data so far today and recently. Hopes are running high for this jobs report. Absolutely. Carl, back over to you. Thanks, guys. Enjoy the beautiful weather. It is 8 00 a. M. , where developers are getting their first hands on ios 8. Squawk alley is live here at 11 00 a. M. Welcome back to squawk alley. Dows down 41 points. Big week in tech continues. The Worldwide Developers conference in san francisco, day two. Kayla and john watching apple finally get a little bit of traction after falling