Transcripts For CNBC Squawk On The Street 20150422

10 year. That seems to happen so frequently yet. 1. 9 is the yield youll get for loaning your u. S. Government the money for 10 years. Lets start with the road map and it starts with earnings. Mcdonalds, all out with stocks. Is a google Wireless Phone Service Launching today . A new report on the move that could maybe shake up the industry. How about the turn around . They plan for yahoo japan in the spotlight. The core business were going to talk more about it. Youre not paying much for it. Maybe theres a reason. Lets start with mcdonds as sales continue to slump, the fast food chain expects sales to come in negative for april. Mcdonds release initial details of its turn around plan next month. In the meantime, chipoltes being up 10. 4 were a bit below what the analyst were expecting. Yum brands were down 12 in a very important market for it yes, you can say it with me china. You want to start with mcdonalds . Yeah. Were missing it. The revenues were made. I was shocked. This was not a bad quarter. I honestly we could go back and look line by line and look at the big picture, the forest not the trees, it made the revenues. They came in at 2. 3. 2. 3 drop. They gave you hope big early meeting and talked about ray crock. Talking about bold action this man is winning them over. You believe that. This is so important in the overall echo system if you will and we talked often about the fact that cost per franchise are far higher than they are at competitors such as burger king. Ive got to tell you, i think easter brook is giving you hope and dividend is giving you safety. Giving the u. S. Government what you get. Given the money, mcdonds you get better. Theres a lot of hope there. I dont think its displaced. Now, i think the most hilarious thing is the controversy about young verses chipolte. Suddenly, we love yum. Theyre only down 12 in china, not 15. Among these, Natural Organic losing . I dont know. Theres a great line. People have to do homework on chipolte before they write it off. Theres 85 ingredients in the single fast food competitor. Theres only 65 ingredients in an entire chipolte. 800 artificial preservatives. People like Natural Organic but chipolte doesnt like Inhumane Treatment of pigs. If youre going to grow pigs in a factory environment with slatted floors and no bedding, theyre not going to take it. They gave away pork rather than serve it. This is a controversy i think we reserve and the companies being conservative. I like the quartearter. Wait 10 days. This is the thing you had to do this time. You caught the bottom in the 470s. A billion dollar quarter for the first time. 2. 5 million per store. Only making 2 million three years ago. Thats amazing. Hes turning into sarah. Sarahs going to be joining us in a minute on cocacola. You were on a roll. I think theres so much here thats great and i do believe, by the way, in the end rotating black out of cornetus turned people off. You have to understand there was a rolling black out instead of just saying this became kind of a treasure. That turned people off. Thats not going to happen again. Theyre going to give them where it has to be. Dont forget food prices are up. Last year at this time last year they gave you the same kind of thing. They said look we cant continue to give you is sale numbers. Everyone sold the stock down. This was march 2014. It went all the way to 474 after reporting a socalled bad quarter. If you wait 10 days here youll capture a great price. Lets move on to yum now. I mentioned china the key market and double digit cop store sales declines. Yet that stock could be up as much as three bucks. Were talking about a nice panel move. China, i imagine having 80 ingredients in a burrito, its kfc over there. I think many people came back. There could be a turn. The turn doesnt occur overnight. I see a number of hundred dollar price targets. This is not an expensive stock. Its always been kfc china. People like this. Is there a real take away about buying mcdonalds . Yes. Here it is. Is it internationally people are not conserved . Cocacola cocacola, the rate of decline of diet sodas is no longer as steep as its been. Maybe some people like inorganic and natural. I like pop tarts. You could read that all day, the number of ingreend yent ingredients in a pop tart. You know how to make one . I dont. I had carls granola this morning. Cocacola posted earnings at 48 a share. Revenue rose for the first time in quarters. Youve seen her already and now jim can talk to sarah as well. She spoke with cocacolas cfo. You mentioned, of course the slowing decline. 6 down. That was a little bit better. I think thats interesting. A lot of people felt like the diet coke anville was just going to keep sinking. 4 volume growth in spray. Actually what sold a lot there was the wine. The good stuff. It was 8 organic growth that surprised people. Aggressive pricing was the headline. When i talked to kathy, the cfe, she talked 3 increase. Dont get use to that. Its not going to last. They start taking these moves. When they say pricing they start charging higher pricing. That helped a lot during this quarter. The other temporary factor here is they did and she told me this benefit from an easter shift and six extra days of selling. Theyre still calling this a transitional year. They had been very clear thats what its about. Productivity, cost cutting. Reinvesting in brands. She said we feel good about the quarter. I like the fact its a cheaper bank for the buck. Theyre up to 20 of add ver vising media. They get more sales from using social media. The other thing i like is the monster beverage deal closes this quarter. Thats the distribution version. Thats going to boost revenues. Do not forget theres a lot of hope here which they have a big investment in. Two Big Investments which people continue to speculate eventually. Theyre going to become expensive thanks to the coke investments. True. Maybe cocacola is the conservative way. They took out some of the natural juice in monster last quarter and sales were boosted by that. Theres clearly some sort of bizarre backlash between people who would actually prefer not to get sick from what they eat and people who seem to be neutral on the issue. The other thing i want to mention is theyre fully hedged. Two big markets overseas. Its the merging markets that are better hitting them. They kept their outlook for the year. Midto single digit kind of growth for the year excurrencies and that was better than the nationals which are getting slammed on these currencies. They deserve credit here. Theyre starting to pay off. Its ahead of schedule. Nice cash flow. Theyre saying listen were going to have a meeting. Its going to give you a turn around plan. Ive got all week. The cfo live from atlanta. I may go to atlanta. Its the opening eagles game is a monday night game in atlanta. That wont be until the fall. Youre going to get ready and go now. I got the schedule last night. Thats why the schedule comes out so people that are football fans can take the day off. Sarah, well see you again at 10 00. Not going to look your way again for the rest of the show. Shes disappearing for a little bit. Boeing beats with 97 a share. Thats jumping commercial revenue. The dow reconfirming for earnings and deliveries. We get through a lot of these big names and this earnings parade here, jim. Looks down a bit. Theres always a margin issue. To me the stock has had a markable run. Were still waiting for the dream liner to breakout. I dont think its going to be appealed. By the way, to be sure as much as i like honey well, as much as i Like Technology this one is still a key. No one looked at ati. Much like rti, im saying if its involved in aero space, dont sell it. We have melissa myer we have her sending a message thats helping overshadow her accompanysaccompanycompanys earnings. Also, ahead, scott mcgregor. Theres another look at futures coming your way. Were popping up a little bit as we head towards the open. We have a lot more squawk on the street right after this. Last night web cast spoke about unlocking the value of her accompanys 36 stake in i cant loo in yahooo japan. We have retained advisers to determine the most promising opportunities to maximize value. Its a key priority to explore the options thoroughly. Embarking the plan to spin off in full. Yahoo japan another significant asset about the accompany. Yahoo japan is controlled by soft bank. As for the quarter itself i had a chance to talk to a couple of investor investors. Maybe not quiet as bad as it looked at first. The operating expense keeps coming down. Theyve been under pressure from activist shareholder jeff smith, for example. They cut 1,100 jobs during the quarter. I know guys who are following, there are ways to follow people losing their jobs. It sounds you can look for whose looking, all the different online postings that go on and there are people closely following this because thats a big number. The operating expense coming down. In many places. This accompany was really poorly run and i think its layer after layer that they have to peel. David, i think that this accompany is in the same race as a lot of others. They call it in ibm they can call it something. Mobile video social you need that. Obviously, this is growth. This is similar to that part of the strategic world. Youve got to be in those areas. You cant be desktop. Of course you need to new initiatives to overtake the old at some point. Its not happening yet. No, in the meantime the stock just pops when they mention japan. Right. Well heres the thing. Youre getting by most math that is done out there from investors based on the discounting what the spending will be worth and yahoo japan and what its worth, youre getting the core business for nothing. For free. It is still generating cash. It is still creating so to speak. That said youve got an operating expense base thats declining. From a bigger point ive made times now, theres no clear turn around. No. A lot of that theyre spending money on search. Search is owned by another accompany. They redid the deal with microsoft last week. Look in the end. Search the owned by one accompany. Its a accompany that people feel has a monopoly. When on the other side of a monopoly feels terrible. They may be replaced by twisertwis twitter as the third seller. It wouldnt shock me. These are all about the smart phone. I know youre on the verizon call. Theres still many people who do not have these which is incredible. We have the lady last week. I asked her whether they could go to the smaller bundle and she said they would be fine. Meanwhile, she says not fine with us, fox says not fine with us. Comcast, not fine with us. Who is it fine with . Its fine with no one. Seems like the contract violations, how could they get away with this . I dont know. Its the question i asked. She didnt provide an insightful answer at the time but now theyre in trouble with well see, theyre moving ahead. Ceo is saying hey, were going to do these smaller bundles. I thought that was amazing. I went to law school didnt practice. Theres things like contrast. You have to have a meeting of the minds. Well keep an eye on verizon shares this morning. Seven times, david. So many other stookcks to get to. We have the mad dash coming up after this. It took tennis legend serena williams, fencing champion Tim Morehouse and the rockettes years to master their craft. But only moments to master paying bills at chase. Com. 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A lot of people rerating this stock from thinking it was to being the envy of people. We know these are very loved, broadcom very good quarter. Scott will make you want to own it. He tells you a story of a major league transformation. Daiftd david, there isnt anything left. They had tough actions. Yep, was a strong performer then. Welltheres a lot of stuff there. All right. Lets move to a deal. Yet again, a lot of consolidation among the realestate trust. Associated states being required for 75 cash. They own the world financial center. Theyre regaining what they play here. All cash deals you might expect it would be there. They are mostly based in ohio i guess. They do deliver. One of the things weve seen david, theres way too many reads. The simon deal. Which did not happen. At least it hasnt happened yet. Ive got to tell you, theres so many synergies when we merge these two. I said listen these guys have it together. They are companies producing growth and income. This is a good deal. I think brookfield will give you growth and income. This industry is going to have five or six huge players. One of the closings expected to be in the second half of the 2015 again. 28. 75. Mergers continue. I know we have a favorite report that covered a three way battle. Thats got to be the most exciting thing. Its fascinating. What will happen . Yeah, that will be on the favor report. Israeli companies that do big business here that are mostly dutch. It is really, you cant even make this stuff up. Before we get to that we have the opening bell a few minutes away. Back after this. Automotive innovation starts. Right here. With a control pad than can read your handwriting, a widescreen multimedia center, and a headup display for enhanced driver focus. All inside a redesigned cabin of unrivaled style and comfort. The 2015 cclass. At the very touchpoint of performance and innovation. 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You got this. Youre watching squawk on the street. The opening bell for this wednesday. Back in hq, recomposing itself. Looks like a bit more green than red. Lets wait and see actually. I dont want to jump ahead. The opening bell theres the s p real Time Exchange and let me tell you who rang that bell. United nations and i shares highlighting earth day. Low carbon etf. I think they need a new name. Yeah, thats a mouth full. By the way, at 3 30 the futures were up nicely. Between 3 30 and 4 00 they got hit. A lot of this may have been the french terrorist action. The market never got covered. Ive got to tell you im surprised at how wrong the futures were. Oh at the nasdaq earth day celebration. They were waiting. We said something to cheer. So many different places to go. So many things that first look down and go up. You can see. I read through the quarter russia bad, china bad, execution and stocks up. You start thinking okay whats some of them going to do. Elliotts already gone down that road to a certain extent. Were talking llc and hewitt pack packard and nothing happened. People come to sbu igs. Sometimes. It reminds me of alteror. We heard from broadcom, the strong numbers. Altera reporting tomorrow i think after the bell. They may not be great number altera. Which may be a surprise when youre willing to turn down 54 bucks a share. Putting up earnings numbers that indicates why youre in a position to turn down a large multiple multiple deal that many shareholders encourage you to recorr. If they dont put up good numbers but bad numbers. It will be very interesting to see why altera can justify saying no given the fact if the quarter is not that good. That stock is up on air. I dont want to prejudge it. It is up in the air a bit. These are the numbers people might have not anticipated given their robust ejection again. What if they win some contracts . That would be devastating. Ill give you another example. Vertex. You cant kill the rumors. Its almost as if somebody says lets rumor this. One thing thats changed is the analyst make these calls. They use to no do that. The way allen did in the 80s. There was a hand full of analyst, very few were willing to do those kinds of things or talk take overs way back when i can remember some guys. Its much more prevalent now. Bernstein writes a piece saying what about this and that. Smith. Or even a golden sack saying break up jpmorgan. Thats one of the drivers. If a professional analyst makes that call as opposed to a rumor you have to discuss it. You cant shelve it. We have to discuss the vertex. Because it showed up in gilliad. Well discuss perego. We cant discuss that yet. I think we need to talk about the parent accompany comcast for a moment. Theres so much connected to comcast deals to require time westerner cable warner cable. If this were not to occur, you would have the creation conceivably of great land. This accompany that is being created out of the subs that will be spun from comcast time warner. So much riding on that. Meeting today at the d. O. J. Im airing basically that this is not a high level meaning. Youre not talking about the kingpins going. Its new staff with staff. In the end, lets find out what youre thinking. What are your objections here at d. O. J. . What are they based on . Some reading a lot into it. What comes out of the meeting . Doesnt mean something significant wont. I dont believe senior members are attending. David, the reporting on this one is going from yeah, its going to happen to look there are things that comcast did. Comcast disputes them and the parent accompany is in violation of a previous deal. I dont see this violation. What happens is theyre senators. Senator frank who should have no influence here. What surprises me still, jim, is the fact that the d. O. J. Is active here. Frankly, my anticipation has been that you get the f. C. C. Involved. It was the first question i asked Brian Roberts when the deal was announced back in february 2014. Nachlly, market power and broad band. Market power and broad band. Yes, the f. C. C. Would they look at that . We knew they would. The d. O. J. They dont compete. They dont. Whats amazing to me even during the time that the deal was announced, theres five more guys i can get programming from. Hongsly, honestly, the events are overtaking the reason to block it. To me if its justice and like the big bank deals, in the end its the top guy at the d. O. J. And the top guy at comcast and Everything Else is a dance. The f. C. C. Is more important. They were considering queening a hearing. By the way they never do that. Theyve got one guy on that whole hearing staff if the d. O. J. Were the try you, theyve got to get an injunction to stop st. Deals unclear to me. Well see, the point is there are certainly a lot of question marks around comcast to complete the transit actions. No break fee. Of course, dont forget that. At this point the two sides have to be very much committed to work it out. Time westerner cable doesnt want to be reached. That will seal it. Comcast indicates theres still a lot of faith that the d. O. J. Done. I find this fascinating because when i read the papers its almost as if my Justice Department is doing what they did for the banks. Theyll say listen were having trouble with this. Let the airlines basically become. The overlap was incredible. Im not trying to sale this deal to anybody. The airlines, that was basically a root structure deal meaning you can stop competing if you emerge. This doesnt effect anybody. On broad band, especially with the new rules, its the same 25 megabits theres some questions. Lets just, i hope theyre interested. If fios is successful in swing, its successful, comcast, i would think needs to get this deal. Theres so many ways. Fios is traditional cable. They offer, they still have a big footprint. It needs to get bigger. If they cut rates, im sure they feel it could be triumphant. Bob is going to cover abunch of them. Bob. We started on the upside but it faded quickly which often happens here. We have Telecom Utilities leading. I want to point out the big rally continuing over asia. Heres whats important. Were at highs everywhere. The nasdaq of china at a historic high. Shanghai at a high. Things are flying now. Over in europe a flat day despite continuing concerns over greece. The German Government revised their Growth Outlook up. Theyre talking about bigger gpd growth. They raised it for 2016 as well. Were talking weeker euro oil prices helping boost exports and employment overall. Lets talk housing and earnings. D. R. Horton saw a big surge in quarters. Net orders up 33 . Its had a great year. Its up 12 . Thats the problem youve got overall. By the way, Mortgage Applications up 5 week over week here. Earnings were good. Roofing was okay. Insulation a lot better. Thats a nice move up 5 there. The problem with the fracking slow down housing is showing up united rentals. Also in Home Building they had a beat and lowered their four year revenue. Elsewhere, i want to point out trucking is getting a lot better. Did you see ryder . That stock has a nice boost today. Finally, staple went out and boosted their price targets on a whole bunch of Oil Companies and production companies. I would think this was a fabulous call two months ago. Remember, these guys are up double digits so far in the year. A lot of people had the same idea already. David, back to you. Thank you very much. Coming back to a story were going to follow for some time trying to make sense of, a good deal of reporting ive been able to accomplish over the last 24 hours which is what is going to happen here in perrigos pursuit of mylan. Perrigo came out and rejected the offer mylan made earlyierier in the month. That rejection, by the way, was kind and calm. It didnt throw a lot of rocks. It simply said hey, we think were worth more and thats important. Its important to measure a rejection because it gives you a sense to the willingness of a accompany to engage down the road. On that engagement what i can share with you at this point is the expectation among people familiar with the situation is mylan will be coming back with a firm offer. An offer under irish law that will include Firm Financing commitments which they are paying for and paying a lot for and Firm Commitments to move ahead, things like ticking fees and showing a real commitment to get this deal done. As for what the new price will be or a higher price for something they offer, unclear. Mylan is far from done in pursuing perrigo and showing their significant focus on getting the deal done by firming up financing commitments it will be paying for. That is no small matter. Now, back to tevis offer yesterday invailed 82 a share. As i said a number of times yesterday in directing people to dutch law, there is a lot of question out there to the ability to complete a deal for mylan because of something called acall called a stifting. Its basically a Foundation Run by four trustees that has the right to essentially call the Voting Rights of mylan as much as 50 of those Voting Rights that will prevent anybody from being able to gather more than 50 of the votes. It is a somewhat vulnerable poison pill. That is an argument up for dispute, jen. In the last day youre talking with people who understand dutch law. Im still getting different reads. One side as you might imagine the mylan side will probably argue, take a look. If youre a european accompany and listed as a european accompany, there is a two year rule. Yes, we can do this. After two years they have to redeem the Voting Rights. As a nasdaq voting accompany rebelieve our foundation can hold the rights if they call for them. As long as the threat continues to be in place meaning no time limit, they argue, in fact there will be a shorter time limit that the amp court will tell them to move it along. Theyre the ones to make a decision as to whether or not to actually call for those rights. Final thought for me here on this on the particular issue is mylan did the deal to invert with abbot. A new place of corporate inseparation. It turns the u. K. And then it looked all over the world and found the netherlands as the place it wanted to go in the corporate incorporation position. Why would you not go to the netherlands if you werent looking for the place to protect you the most . They did. They found it in the netherlands and people need to pay close attention here to see teva has a chance. There are different opinions on how long but thats certainly something for people to keep in mind. When it comes to mylan, theres no doubt about it. They said no before the offer came out on friday. Rob, their chairman who is described by many who likes to drop the f bomb every other word. No way hes going to say yes. They called the toilet paper the stock. Ive heard it too. Quotes adds well. Wall street journal says that. Here is their Statement Last week. Thats where things stand. Mylan getting more serious and real questions about that. Right. Thats an unbelievable summary. This happened to be a bad stretch. I think its a brilliant move. Of course teva getting there may keep them from getting the vote. Final point from me teva could have succeeded in buying mrk ymylan if they had pursued a few months ago. Big mistake by teva. Petrobras voting today on whether the release audible financials. Chief international correspond nt is at petrobrasheadquarterers. Michelle. Reporter hey there, daiftd. When the sheet comes out tonight investors are looking at how big is the hole. It matters because theyre the most indebted country in the entire world and the most major leverage accompany in the world by a long shot. This is one of the biggest if not the biggest financial scandal to hit brazil in its history which is a high bar to jump over in brazil. Even though the shares trade, the adr trade at the stock exchange, make no mistake, theyre controlled by the brazilian government. They control more than half of the voting shares and use the accompany as an arm of government policy. All of that coming home in the last year because in march, one of the accompanys directors was arrested for bribery. In september he started to sing and he told investigators for nearly 10 years nearly every contract was padded by at least 3 and then the money in that padding was used for bribery, kick backs and funneled to the ruling part ruling pearls of ruling parties of brazil. There have been Party Members and the president of the country at risk herself. Shes not been connected to any of the fraud but the treasurer from her Workers Party has been arrested and she was chairman of this accompany for much of the time when the fraud was allegedly occurring. She denies any knowledge of it. Tonight once again we wait to see the numbers from the fourth quarter. Remember, everybody else is reporting First Quarter numbers now. Theyve been delayed to do accounting to figure out whats happened here and theres going to be a News Conference to get right on what theyre going to do Going Forward and to improve the corporate governments which is to be understated lacking. Consider this onethird to your executive upon being arrested offered to give back himself 100 million. So glad youre there, michelle. Weve mentioned it a couple of times. Theyre going to slow down iron production. Exactly. Coming up roger mcname,e. When a moment spontaneously turns romantic why pause to take a pill . And why stop what youre doing to find a bathroom . 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Com [ 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. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Stock trading with jim. under loud music this is the place. Their beard salve is made from sustainable tea tree oil and kale. You, my friend, recognize when a trend has reached critical mass. Yes, when others focus on one thing you see whats coming next. You see opportunity. Thats what a type e does. And so it begins. With e trades investing insights center, you can spot trends before they become trendy. E trade. Opportunity is everywhere. 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A quarter where youre not suppose to get anybody to come. Ryder does not rent the yellow trucks. This is the logistics accompany that does logistics. Ive been begging them to come on for a long time. These are great stories. I cant wait to see them. Good to see you in a festive environment. Yes that was an wonderful evening. Now youre a married man. Lisa cramer. Great to have you back. See you tomorrow. Coming up breaking news on existing home sales plus an exclusive with the ceo of broad broadcom. I went to school here. Ive been with bp ever since. Today, i lead a team that sets our Global Safety standards. After the spill we made two commitments. To help the gulf recover and become a safer company. Weve worked hard to honor both. Bp has spent nearly 28 billion dollars so far to help the gulf economy and environment. And five years of Research Shows that the gulf is coming back faster than predicted. Weve toughened Safety Standards too. Including enhanced training. And 24 7 on shore monitoring of our wells drilling in the gulf. And everyone has the power to stop a job at any time if they consider it unsafe. What happened here five years ago changed us. Im proud of the progress weve made both in the gulf and inside bp. Lets take a look at your credit. I know i have a 786 fico score, thanks to all the tools and help on experian. Com. So how are we going to sweeten this deal . Floor mats. Clear coats. Youre getting warmer. Leather seats. And this. My wife bought me that. Get your credit swagger on. Become a member of experian credit tracker and find out your fico score powered by experian. Fico scores are used in 90 of credit decisions. Bring us your aching and sleep deprived. Bring us those who want to feel well rested. Aleve pm. The only one to combine a sleep aid. Plus the 12 hour pain relieving strength of aleve. Be a morning person again, with aleve pm. Good morning. Welcome back to squawk in the street. We are live from post 9 at the new york stock exchange. Lets give you a quick look at the markets. Kind of mixed this morning. You can see there, the s p flat on the desk for oil. There it is at the bottom down fractionally as well. Some big moves today but a lot of earnings weve had already and that are di jesting. Breaking Economic Data. Reporter sarah, existing home sales up 6. 1 to a seasonal seasonally adjusted rate 5. 19 million unit ins march. Thats a huge beat. Twice what the street was expecting sales 10. 4 year after year. This was a high rate. These are seasonally adjusted numbers. If you look at the raw data from february to march, sales usually go up 25 . This year they went up 37 . Sales up across all regions. The highest over the midwest. Up over 10 . That, of course heres the headline, pushed prices way up. Up 7. 8 year over year the gains were barely 4 . Nothing for sale. Inventory up 2 year over year. Were at a 4. 6 month supply of homes for sale. Healthy market is six month supply. The realtors say they would like to keep the sales pace at 5. 2 million. That would be the best level for the year in nine years but theyll only be able to do that if they can get more inventory on the market. Sellers not listing homes because theyre concerned they cant find anything else to buy. They inched back in march. Still not strong. Realtors expecting if prices dont go much higher, the buyers wont come back. If we continue at this rate were not going to see them in the market. Breaking news on the housing. A tale of two fast food stops this morning. Former stock market star chipotle down. Concerns that growth may be slowing for the mexican grill. Mock mcdonalds training high. Joining us now, Nicole Miller and restaurant on the analyst. Good morning. This is one of the strongest results in the restaurant industry. Exceptionalal exceptional is what theyre calling it. Its clearly not high enough to meet expectations. Today would be a great day to buy the stock here. Were not worried about the stock. Its the strongest management team. The culture is the best to transfer ability of the culture as they grow restaurants around the globe. I guess the concern is the guidance. It begs the question are they going x growth . I think that investors at this point are showing theyre scared of what they do know and not what they dont know. Prices falling off, 6 price, comes likely do go down. Theres still lot after things they can do to in terms of catering and price on some of the proteins. Just turning to mcdonalds, why are they trading so strongly when the sales down 3 globally on a bigger hit to profits for foreign exchange, why is mcdonalds such a firm companier today . This is why we eat careful around earnings. Their trading more on sentiment than fundamentals. Clearly, mcdonalds is trading up with the expectation it could have been worse and its not. Nicole has Steve Easterbrook outlined a strategy. I see this news on daytoday about menu changes and experience changes. Do you have a firm turn around story in your head you could help articulate here. Were still living the results at this time. Any menu or marketing change to get through the pipeline. Whatever it is easterbrook wants to do is not showing up today. I think hes expressed to the franchise what he wants to do. In terms of the onlyist community, it need to be a more direct solid plan. Theyre quiet battered and this is expensive. I think that if the performance shows up they will follow suit. That is what we think is the critical aspect of the mcdonalds turn around story is getting the franchises to buy in. Hearing what it is they want is critical and paramount. Just to underline it to bottom line it the of the two stocks chipotle and mcdonalds which is the better bet for the whole year . I think investors living in the large cap world look at chipotle. Have a great day. Joining us from piper jeffrey. While the dow is down coke shares are trading higher beating analyst estimates on the top and bottom line. The beat was driven by higher prices. Coke has been raising prices charging more. That is helping sales and that is really the story of this quarter. I got a chance to talk to the cfo right after the result. She says we feel really good about the quarter referring to those pricing. A few points here on the pricing that drug the better sales. She says that will moderate this year. In other words, dont expect that to last. That was a three point gain. Another warning here on the temporary effect we saw this quarter on the cfo. There was six extra selling days during this quarter. That is why kathy and ceo have continued to emphasize this is a transition year for coke 2015. They talk a lot about this whand it refers to is billions in cost cuts productivity savings. That includes the lay offs we saw the First Quarter. Cfo says theyre in early days of productivity improvement and finally, on this idea of currencies because coke gets most of its sales abroad theyre feeling it 6 off of sales but she did tell me theyre fully hedged on the euro till 2016. Those swings dont hurt. Its the emerging market currencies thats significantly impacting the bottom line. Thats better than the multinational companies. Coke still expects midto single digit growth this year. So the bottom line guys. This wasnt a game change or quarter. People are still not drinking soda like theyre use to but theres improvement on the way coke is managing results and pricing and thats what investors are picking up on today, at least in terms of reaction to the quarter. Im still shedding the routes. I think theres seven deals around the country to get rid of those. Yeah, theres two efforts here. Theyre refranchising, theyre expanding some of the agreements with bottlers and trying to cut cost. Theyre in the middle. Its part of the whole transition. Theyre in the middle of streamlining this. And also the zero basis. Yeah, theyre doing that as well which so many other of these Consumer Companies are doing. They did it and the 3g guys do it every year. That sort of idea permeated. Its hard to do every year to say what are our real cost . If you do it every year you cant say youve had a transition year like coke can you . Theyre building a lot of expectations up for growth next year is what theyre doing. By the way, were going to talk to ceo and cfo live in atlanta on friday here on squawk on the street. Iphones, samsung galaxies what about new gadgets like the apple watch . Were going to ask b Broadcom Broadcom ceo about that. Squawk on the street will be right back. Thank you for being a sailor, and my daddy. Thank you mom, for protecting my future. Thank you for being my hero and my dad. Military families are thankful for many things. The legacy of usaa Auto Insurance could be one of them. Our worldclass service earned usaa the top spot in a study of the most recommended Large Companies in america. If youre current or former military or their family, see if youre eligible to get an Auto Insurance quote. Were losing bround on the dow. 38 points. The main lozser, boeing. As weve seen time and time again through the earning seasons as we are revenue. Phil is live in chicago with the details on that. Morning, phil. Good morning. Its not just about the revenue not coming in as expected by wall street but also questions for cash flow. Lets look at that time earning numbers. Coming in at a buck 97. 16 ahead of estimates. The revenue 21. 2 billion. Shy of expectation of 22. 48 billion. When you look at the First Quarter for boeing a couple of things to keep in mind. On the commercial side thats been driving the stock lately 184 plane deliveries which is an increase verses 161 in the First Quarter last year. Commercial Plane Division earnings up 8 . What are investors focussed on . A couple of issues. They revolve around the Free Cash Flow down 186 million in the First Quarter. Negative Free Cash Flow operating cash flow 88 million. Compare that with 1. 1 million for the First Quarter of last year. Operating margins a little smaller than last year at 9. 6 . The Conference Call is going to beginning shortly. The accompany reconfirmed guide ins in terms of revenue for the entire year and cash flow. They have at least 9 billion in cash flow. Those questions are front and center when the Conference Call begins in 15 minutes. Boeing feeling pressure this morning. Simon said the bottom of the dor dow. Shares are trading at levels we havent seen since back in january 2011. The chip maker a 27 rise in First Quarter earnings. High and smart phone and broad band access markets as some of the components. Joining us the ceo of broadcom scott mcgregor. Can you give us more to what drove results beyond the smart phone and broad band . Go ahead. It was a good quarter. Besides smart phones we saw broad band access and in particular, our infrastructure business in switching was strong. Strong performance across the businesses. Were also impressed with your guidance. The new Samsung Galaxy 6 was launched in april. It isnt just smart phones. Its across the rest of the space and the infrastructure side doing well across the world. You think its the latest cycles . We know that the iphone 6 is having a strong cycle in terms of sales. A lot of hype and positive reviews on the galaxies. Are they turning it up a notch when it comes to meeting consumer understands . Theyre doing a great job getting them to replace some of their existing phones. The combination of that is creating the demand and new excitement in the mark. Zotyou obviously comment on whether youre an apple supplier. Your major supply of wifi components. There are a lot of different chips that go in a smart phone and we chose to focus on some rather than others. We were trying to do a broad swap across that. No money in the face bands. We focussed on wireless lan and blue tooth. Its the networking boxes as well thats a key business for you. I see youve booked yourself in four or five conferences over the next month. Can you talk us through the new product in laymens terms. Clearly, you believe you have a story to tell here. I think a lot of people focus on the devices consumers see. Its easy to see how all those get connected. Broadcom focuses on how those devices are connected. You think about your smart phone connected with blue tooth or wifi and the devices in your house, your pc set top box connected, cable modems. We make the technology and also the technology in the carrier side. The telephone or cable accompany, the equipment there and all of the backbone of the internet. Broadcom does this and things that switch the traffic. Something like 98 of all traffic goes across the chips. Theres a lot of talk about m. M. A. With reports of intact. Can you talk about how you see the industry evolving with these new technology . I know youre going hard after the internet of things. Obviously, we cant comment on rumors. I think whats interesting is we provide the connectivity side. You mention the internet side of things. That plays to our vengtstrength. Its wearables and the one thing in common with the internet devices is connectivity. Which technology are you talking about the connected home what projects are you working on . We do all of those things. Weve seen not only wearables, you think about watches, health and fitness, we really have a great place to play. You think about appliances in our home becoming smart and connected. Your Kitchen Appliances preheat your oven on your way home. Its interesting because the appliances and devices also create data for Power Companies to manage their load. Theres a lot of other ways to mono tiez that information and create more value for consumers. Our devices enable all the devices in the home and machines and stuff like that to be connected to the internet and people and create the data and new service. Can you confirm your chip is the one in the new apple watch . We cant talk about specific customers but we are in a lot of the watches out there today and we think we have great products. Can you tell us a bit about what you see Going Forward in terms of Enterprise Spending . Enterprise spending looks to be fairly strong across the world. We seen a bit of a pause in the United States. Some of the carriers reduced spending a little bit as they wait for mergers or other mma of their own industry to happen. Were seeing the rest of the world very strong in infrastructure and a lot of build out of cloud data centers. All of us love the high deaf video and that decree unitescreates the need the record the servers to get to us. You love seeing your movie at night. The servers and at a at thatthe data centers, thats a Growth Opportunity for us. Thanks very much for talking about some of the trends. Broadcom ceo wouldnt give up any client names. Theres a lot of speculation. Comeing coming up, accused of making millions of dollars a day all from the comfort of his parents house. Well take you live to london for the latest next on cnbc. Your moms got your back. Your friends have your back. Your dogs definitely got your back. But whos got your back when you need legal help . We do. Were legalzoom, and over the last 10 years, weve helped millions of people protect their families and run their businesses. We have the right people onhand to answer your questions backed by a trusted network of attorneys. So visit us today for legal help you can count on. Legalzoom. Legal help is here. Theres some facts about seaworld wed like you to know. We dont collect killer whales from the wild. And havent for 35 years. With the hightest standard of animal care in the world, our whales are healthy. Theyre thriving. I wouldnt work here if they werent. And government Research Shows they live just as long as whales in the wild. Caring for these whales, we have a great responsibility to get that right. And we take it very seriously. Because we love them. And we know you love them too. Constipated . Yea dulcolax tablets can cause cramps but not phillips. It has magnesium and works more naturally than stimulant laxatives. For gentle cramp free relief of occasional constipation that works mmm mmm live the regular life. Welcome back everybody. Earning beating the street on the top and bottom lines. The spring selling season got off to a strong start. Year to date the stock up 8 . As you can see its down 4. 1 sitting at 27. 39. Simon, back to you. One of the big stories of the week iowa. They have found a lethal strain of bird flu in a flock of millions of hens at an egg laying facility. Were live at the very facility. Morgan good morning. Reporter good morning, simon. This is the farm behind me. This is where the latest and largest strike of this influenza has happened. This facility is under strict quarantine right now as the entire flock of 4 million egg laying hens is euthanized and is highly contagious. This process could take weeks if not longer. I need to know according to the u. S. D. A. This string of flu poses little threat to human health but that being said the cases are mounting. Weve got some 6. 5 million birds across the u. S. That have been if he canned by this and more than a dozen at state. The question now, what does this mean for the poultry intrus industry . Even so industry consultant says its too early to tell just how large the impact of this bird flu will be on the broader culture industry including eggs and consumer prices. Its going to be what happens from this point forward and can we control the disease from spreading during the fly aways. Reporter so he and others say that the biggest risk moving forward is if this flu were to spread to broiler chickens. Thats basically, the chickens raised for meat. Thats a 9 billion bird per year market in the u. S. Its larger than turkey. If we see the flu spread to those crops, that could pressure exports because of the flu and it could also if we see supplies significantly decrease that could have ripple effects to the market. Nonetheless morgan i wouldnt get too close, if i were you. Reporter im sorry. Dont get too close to them. Reporter i cant get too close. Theyve got sheriffs and even else here. This place is quarantined but i tell you, you can smell the smell of this facility for miles. All right. That sounds lovely. Thank you very much. Morgan on an egg farm for us. Breaking news out of london. Wilfred cross outside the house life for us. Reporter sarah, thank you very much indeed. That man is 36 and comes west of london. The breaking news is he has been granted bail about 10 mens ago but with very strict conditions attached and he will face a trial here in the u. K. On the 18th of august. That date is subject to change by a day or two. All of this of course relates to 22 counts of financial fraud and misconduct which were filed in the u. S. Back in february this year. It was made public yesterday after he was taken into custody. Of those counts as you mentioned, at least one relates to his involvement with that flash crash in the United States back in 2010. That really of course whats been grabbing the headlines throughout the day. Its alleged he made some 40 million from these acts of wrong doing and that is why included in these strict bail conditions is him needing to paste 5 Million Pounds as bail. Hes also not allowed to use the internet at all. He has to surrender his passport passport, stay at his home dress and not leave during midnight hours. Its also asked his parents have to post 50,000 pounds and surrender their own possible. District judge was very clear on the severity of the charges and what would happen to him if he broke any of the terms of his bail. All of that breaking over the last 15 minutes. The trial happens in theon the 1th8th of august. Well continue to check in with you. Straight ahead a strange trend in the First Quarter g. P. D. Data. Well have the details for you when we come back. I am never getting married. Never. Psssssh. Guaranteed. You picked a beautiful ring. Thank you. Were never having kids. Mmmmmm. Breathe. I love it here. We are never moving to the suburbs. We are never getting one of those minivan . We are never having another kid. Im pregnant. I am never letting go. For all the nevers in life state farm is there. If youre looking for a car that drives you. And takes the wheel right from your very hands. This isnt that car. The first and only car with direct adaptive steering. The 328 horsepower q50 from infiniti. Welcome bark. Reporting from the imex the department of energy out moments ago with its weekly inventory report on crude oil. We have 5. 3 million barrels. Interesting market reaction. First we were down 0. 50 and now turned positive up 0. 10. Looking at the suggestion numbers seeing a build in less than a million barrels. That could be what the market is looking this point, a small build. Trader rs still concerned about the geo political situation in yemen. Air strikes ceased and started hours later. Theres a situation potentially there. Guys, back to you. Im sue and heres your cnbc news update at this hour. France top security official announcing the arrest of an islamic extremist whose planning an attack on one or more french churches. The suspect, a 24 year old algerian student was arrested after shooting himself in the leg. Thousands of grieving either open canadians took to the street. Protesters we have posters con testimonying the act shown being carried out in a video released over the weeked. Actor and director ben affleck discovered a distant relative was a slave owner. It was done for finding your roots but his move to how that was admitted went public after leaked emails. A flawless 100 carat White Diamond sold for 22 million. Its one of six sold at auction during the last 25 years. Both the buyer and seller remain unanimous. I dont know how unanimous youll be if you walk out wearing that thing. Thats our update at this hour. Back to squawk on the street. Thank you sue. Stocks in the meantime are losing early gains this morning. Investors digesting a mixed batch from yahoo, cocacola. Joining us mark. I guess were seeing a lot of bottom line beats. Can you really get excite window the lack of Revenue Growth . Hardly sarah. I think the market is conflicted with that. Going into earning seasons, theyre going to be down had4. 7 . They have beaten on their earning side and it shows slight improvement. The disappointment comes in the form of less than half of all companies that have reported so far had beaten on the revenue side. You can only manufacture earnings so far before revenues begin the matter and at the moment i think thats whats weighing on equity prices. The s p 500 is flat. Little direction. You have to go back to early march to see the highs. Record high for the s p, nasdaq above 5,000. Are we going to get back there this year mark and if so whats going to take us back there if youre not impressed with earnings . I think we get back there and then some. We have to ultimately work through the period where we have Economic Data thats been quiet terrible on a comparative basis. Some of that is unanimous. We havent yet gotten data thats been clean which were not going to get for several weeks more. When we start to see numbers for april that hopefully gdp is back on track. It should then be supportive and then stock prices can react positively and then react gain and climb upward. Between now and then thewere probably going to stay locked in this channel for some time. What are we in the Business Cycle . Believe it or not, were five and three quarters of an economic expansion at this juncture. Thats not all that atypical post world war ii. I think it continues on for an extended period of time. Its primarily because were neither growing too fast at the Federal Reserve has to step in and murder the economy nor are we growing too slow to suggest theres a remote possibility after a recession over the next foreseeable future. Theres a consequence, kind of this environment that says this Business Cycle that were in the midst of is likely to last longer than what is typical. Just to combat where you started on the earnings youre not worried about the clear problems we have with the revenue for these companies. Well, dont forget a lot of it has to do with the dollar strength. The dollar was up 9 in the First Quarter alone. It was up 25 from the end of june to last year. That violent move and its order of magnitude was problematic from u. S. Multinationals. I doubt were going to see a repeat of that projecture in the dollar. As we get through the weather induced problems for revenues that companies faced here domestic domestically, i think well see modest improvement. Were not expecting anything in particular robust but certainly something in the middidnts ought to be sufficient to substantiate. Lets talk a little strategy when it talk comes to different intrus ri groups. Health care and down assumer discretionary would appear to beneficiaries but they have been the best performers all year. They have been the best performers. Thats not a reason to abandon them. Those are two of our picks. We look at the strength and consumer in terms of labor market sinment and Household Network at all all time high. We still like aspect for the down assumer kiss cession their sector recognizing high evaluations you want to be careful about. In addition we like the health care sector. Certainly, medical device managed care even farma. In addition to that we like the sector particularly the Money Center Banks that continue to be weighed on by the net interest margin. At the same time theyre activity is bailing them out. Very quickly, how should investors think about buy backs now . I think thats a big part of whats going on. If that continues do you want to invest in sectors where youre seeing that . Certainly, americas cash rich and theres a consequence were going to see more of that. Were seeing more activity and di dend increases. Thats the benefit of seeing companies, corporate health. Well look for the Smart Program of a share of buy backs. Thats corporate americas ability to buy high and sell low. Yep, were seeing it all over the place. Thank you for joining us with the dow down. The growth appearing to slow down in the First Quarter just like last year and 2013. The recurring q1 slum may not be a coincidence. In a report we are joined with a look a detailed look at the governments reporting gdp data. Simon, the latest tracking showing a quarter on tap as low as 1 . Will it be a coincidence . Not according to a detailed look at Gross Domestic Product which is the most followed measure of wealth in this country. We found average First Quarter gdp is 1. 87 . Six of the ten worst quarters over the 30 year period since 1985 were First Quarters. And since 2010 First Quarters look like another economy all together averaging 0. 2 . Finally, wall street doesnt seem able to compensate for it. Its been overestimated by wall street 80 of the time. Take a look here. Very simply we see we get some of it back. Here you can see first kwurtquarter be sush substantially weaker. Economist using tools found these findings robust. One other thing we want to show you is expansions and recessions, what we find is the orange bar is overall. You can see its overall weaker. Just look at the recessions. Q1 is the weakest. Of your Economic Analysis they decline the comment. The potential for the q1 effect is significant. Officials are considered and they might give pause. Investors are faced with what your last guest was talking about with whether the economy was weak in the first kwauter and should you be banking on a Second Quarter rebound, sarah. Steve, isnt it is brutal winters we have had . That would be true over the last five years. Some officials are aware of it over the last five years. The real finding here is it goes back over 30 years, sarah and if we take out the last five years and look at 2010, q1 by the weather should be corrected over time. The data should correct itself over a long period of time. If it doesnt, the government should go back into it and work on what the problem is and correct it. Steve, dont they seasonally adjust . They do. If they over adjusted, they would be accused of cooking the books. The idea of seasonal adjustment is if something happens on a regular basis, it should be smoothed out. For example, the Christmas Spending is the best example of that. By the way, the problem in q1 is not from the consumer its not a matter of spending a lot in december and not if january and february, its other parts of the economy that seem to show it. The seasonal adjustment should pick this up and if the data were seasonably adjusted correctly, you would not have this big difference. Very interesting that you notice that, steve, well see what happens. Thank you. Up next so much for the turn around. Yahoo sales disappointing again. What should you be doing with that stock . More when squawk on the street comings right back. Man you run a business. Could be any kind of business. And every day youve got important decisions to make, like hiring. Where are you gonna find those essential people you need . With ziprecruiter, its simple. We post your job to over 100 job boards with just a single click, so you can reach millions of qualified candidates. Then well give you the tools to help you manage, screen and rank your applicants all so you can find the right one. Try zip recruiter for free today. Dont just visit new york. Visit tripadvisor new york. With millions of reviews and the best hotel prices. Book your next trip at tripadvisor. Com today. Is the energy rally over . Plus why Market Sentiment could go up. Then you can catch our live segment in power lun. More squawk on the street straight ahead. Th schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. The dow and s p just went up today. Morning mandy. Good morning, sarah. Youre right. Telecom standing out as one of the topper forming s ps today. One of the leaders verizon and at t report First Quarter earnings after the bell today. Watch out for that. The Telecom Giant could come under pressure as it faces stronger price increasing. At t asitting flat. Simon, back over to you. Thanks mandy. Shares of yahoo up last night. They were down this morning. Last night during the web cast the conference spoke about unlocking the value of her accompanys 36 stake at yahoo japan. Joining us now is s p capitol scott. Scott, good morning. Focus on the fact shes going to try and do something with yahoo japan and the fact that the core business is still struggling. I think you need to focus on both things. You referenced the call last night. When the accompany recorded results the stock traded lower and once they started to talk about yahoo japan then the stocks seemed to gain lift. Right now people arent sure where yahoos going. Thats been a theme for the last couple of years. Its just that back a couple of years ago up until last year it was really about alibaba. She continues to dangle this as she did with the alibaba. Can she win in search ultimately . I know shes done the deal with microsoft. Thats the bigger deal isnt it. I agree with that actually. We have an opinion on the stock. Really the thinking is that the operations are still a big question mark. Look at display advertising pricing down double digits four straight quarters. Yahoo needs to fix that for significant appreciation in the stock at this point. Scott, some of your peers and those investors who choose to own the stock will point out if you back out the alibaba stake, youre still getting the rump if you will the core business for free as an argue of value. Do you agree with that . David, we dont agree with that. If you look at just putting together the stakes and those two businesses applying a discount we come to something closer to 40 billion or maybe 35 a share. We actually value the business a little bit more significantly than others but conversely, we think those nonoperating stakes are worth less than what other people think because theres a control issue and there are uncertainties there. So we just right now in yahoo that others see. And it does also appear to us like news flow could be turning against the company. Right. Hey, scott, am i right in saying that Marissa Mayer, that if she stays another 18 months she collects 250 million in share options . And do you think she would stay past that point shall. I dont know the specifics on what the compensation details for Marissa Mayer would be over the next couple of years. I think shes very much incentivized to get the stock higher and up until the alibaba ipo or so the stock basically ran under her stewardship from lets say 15 to 45. It tripled in price. Now its traded sideways and i think theres are a lack of catalysts and people are wondering whats going to happen next. The fundamentals of the business notwithstanding talk about mobiles, mavens this is a nogrowth company and i dont think people see that changing any time soon. Stocks are now higher across the board. Financials in the lead. Up next how bill nye the science guy is trying to get kids into coding and robotics and what he thinks about Silicon Valleys gender gap. Silvan learning taking on a new educational challenge, teaching children robotics and computer coding. The company has the backing of bill nye, the science guy, who came to post 9 and explained why when he stopped by. Have a listen. Sylvan learning has an after school program, a Weekend Program called the edge were trying to give you an edge. We want to get people especially before theyre 10 years old, before theyre 12 years old. Interested in science and math because thats when you make decisions about your whole life. In the same way you got to learn to write. You got to learn the alphabet. Its good to know a few principles of computer language. Well the Program Gives kids handson experience and increasingly important fields of science, technology and engineering and math. Also known as s. T. E. M. And sylvan learnings ceo thinks the education could help solve Silicon Valleys gender problem. 85 of Computer Science majors in college today are males so then you ask well why is Silicon Valley and the i. T. Economy dominated by males . Because were not graduating girls with those skills. If we want girls to be to take their place in the s. T. E. M. Economy, weve got to introduce them to these concepts early and thats, we think we can change the gender dynamic in the economy by introducing girls this early. And girls are in middle school, theyre sort of better at everything. So we want to encourage that because in order to be competitive, just think if we had twice as many brains i think it carries on for the rest of their lives. Just think if we had twice as many brains addressing every problem. Weve had all, half the people are girls or women if they were also engaged in science and math, in a ratio commensurate with boys being involved in it we would change the world. So after Pilot Testing at several locations, sylvans program launched nationwide. On robotics coding other topics, to help kids prepare for the workforce, thats where the jobs are and thats where the higherpaying jobs are. John ford is ready for the alley and hes in camo. You can never be too sneaky. Well dive deep near yahoo, what is it a good quarter or a bad quarter . And also google wireless the mbno what could it mean for the Wireless Industry . And Angela Ahrens the head of apple retail out with a new video that gives insight into how apple is dealing with the new watch. Coming up on squawk alley. Who do you work for . Your boss . Yourself . Your family . Our Financial Advisors are free to realize a plan to fit your familys unique needs. Well listen. Well talk. Well plan. Baird. Bring us your aching and sleep deprived. Bring us those who want to feel well rested. Aleve pm. The only one to combine a sleep aid. Plus the 12 hour pain relieving strength of aleve. Be a morning person again, with aleve pm. Lets take a look at shares of visa and mastercard getting a boost object news that china will open Bank Card Clearing market to foreign firms, giving the cards direct access to a market valued at 6. 84 trillion last year. Mastercard surpassing the 30day average volume of 4. 2 million shares. Visa approaching the 30day average of 10. 1 million shares. Visa is up by over 6 mastercard is up by 5 now and i believe over the past 12 months visa had gained up to yesterdays close, about 25 . While mastercard had gained about 18 . Kayla . Back over to you. Mandy, thanks so much. Well good morning, it is 8 00 a. M. At yahoo headquarters in sunnyvale, california and squawk alley is live