Transcripts For CNBC Squawk On The Street 20150514

Cisco beat expectations. John chambers did talk to cramer last night. Jc penney narrowing losses but the news not great for kohls. Shake shack beating expectations with a nice profit. Cisco revenue coming in at 12. 1 billion 5 year offer year. Here is what John Chambers told jim last night on mad money. Our company is the most excessive position ever. We moved from selling boxes to outcomes. Youre digitizing every Company Every country. You change or disrupt or get left behind. Cisco is the lead player. You saw that in our quarter and balance and the Public Sector business was up 6 to 7 . So was our commercial and enterprise. Youll see sus change that. Routers up 6, switchers up 4. He came out swinging a way ive never seen him including an analyst who doubted the term. He shot down competitors saying there is disarray in the industry. This guy is disrupting the disruptors. He says hp alcatel, lucent, all which were considered to be competitive have been left behind. Robins is getting a good hand. Chambers is going out on a high. Someone downgraded it today. All i can think is are you kidding me . Stern takes it to fair value. Chambers long said taking stern to fair value. Stern said the business will be half its population gone. He did not care the Service Providers have not come back. They are going to come back. Russia down big. China not that good. These countries could come back. He says theyre political. The point about chambers hes outgoing. I love the new guy robins. If you speak to people in the boardroom about using cisco if something goes wrong and somebody hacks you, theres 20 guys is it you . Was it you . You just call john. Now you call robins. You call and you get them. They solve it for you. Speaking of cyber chambers was asked whether or not this rumor of cisco buying fire. He says never comment on rumors or speculations. Then he says, i wouldnt bet on the one you heard today. This is the chambers, im out of here and heres the truth. When you hear him say to an analyst, im not going to mention towe from Merrill Lynch. Weve known each other a long time, but you dont have any idea what youre talking about. He said alternatives were garbage. Chambers is saying, im taking no prisoners. Take no prisoners. This is a very different cisco than what we are used to. Before we leave it, is the transition a hold dynamic, a buy . Buy. Its really cheap. My Charitable Trust owns it. I go behind this. I talk to a lot of these guys. There was a time, and i said it to john there was a time i was concern concerned hewlett might be coming on to them. Hewlettpackard is picking up. Alcatel, lucent nokia get together, its total disarray. Cisco is in great shape. Those who want to say there are so many analysts who are negative and im surprised. I think robins will run over them. I think theyre road kill. Well see what happens in the next couple of months. The big week for retail kins. Kohls out. Earnings beat. Disappointing sales growth has the stock down over 10 . Penney out delivering a mixed quarter. Reporting a smaller than expected loss, but revenue was light. They did up their guidance for sales and margins the rest of the year. People are saying that kohls and macys are making penney look like a hero today. I like the penney call. The previous regime came with a wrecking ball. How quickly can we destroy it . This home section was awful. Kohls the Third Largest retailer had been on a major roll. This is worrisome because it justifies why we saw that big mac row retail sails. Kohls down. You have to buy kohls. Dont buy it today. Let the downgrades happen today. I do believe that people are going to extrapolate and say the gasoline money saved is not being spent. This is something charlie sharp from visa told us. Penney is taking sales back. The west coast port didnt hit jc penney that much. The rails are bad. Retails bad. I think those two groups of people who are in. The 57 cent loss on penney, a year ago was 1. 16 loss. You are going in the right direction. Those who want to jump on the stock, its already moved a lot and they are using 2017. Im using 2016. I like how honest they were on the call. Theyve got to get home right. Ultrasalon can come in. The back store. Those are the guys who are doing well, niche retail. Urban outfitters is terrific. Im going to philadelphia to throw out the first pitch. Im conscious they may have the most momentum. A philadelphiabased retail. Broader markets. Dow up triple digits premarket. Claims were better than expected the four week average hitting another 15year low. Ppi down softer than economists had been forecasting. We were liking for a 0. 1 gain. There is a setup. You want oil to be flat. Futures up. The dollar is the worst asset in the world. We all knew because every hedge fund told us the dollar was going to go 90 euro. People short this thing. They are just being annihilated. Once again the intelligence told us something was going to happen. Its not panning out because italy numbers were strong last night. Germany has been a tad more fixed. France is strong. Spain is strong. Spain, i mean, geez. No one really thought if we get asia going, you could see a Major International with the stocks, the Major International Companies Based here will really fly. People will have to raise numbers. A lot of people were using 1. 05, 1. 10. Be aware the numbers are too low. People are leaving domestic stocks and buying internationals because the dollar has so little momentum. Sure. Are you thinking parity is not going to happen . Going to happen later than expected . Europe is too strong for there to be parity and we are too weak. You did say if you are going to do amalfi. Going in september. I should have locked this one in. I should get insurance liked hedge funds. I want to just get a nice suit in milan. Shake shack. Qualcomms game plan for growth. An exclusive with the companys president and his First Television interview. Well get to a lot more including jack in the box dominos and twitter together. Youve been all over that this morning. A lot more. My name is mary molina and im a pipeline engineer for pg e in the sacramento region. New technology is being used in all facets of the company and what we do. Pg e is employing these technologies as an investment to the system for the long run. Were not just going to roll up and go home because we live here and we work here and we care about the work and we care about doing it right. We all have the same goals to make the system safe and to make the community safe. Together, were building a better california. Cramer mentioned the rails. Kansas city southern withdrawing revenue and guidance volume for 2015 citing uncertainty around energyrelated markets forex impacts, u. S. Fuel prices, but they did have a half a billion buyback. Energy, all the rails are linked with energy, Norfolk Southern with coal all of them have oil. They keep going down. Wait. Wait. Its a nafta operator. Peso, you put them in your wallet and they go down in value. Burlington. Yeah but i wonder how they are doing this time with oil from the balkan which is hard to get to. Mexico is doing well. Its a flow of funds thing. Chambers calls mexico the strongest country in the world. Its bringing back the country but the currency is out of whack with the country. I would be a buyer of the peso but there is really no way other than to go by land. Its taking a beating mexico, but i love it. Walmart testing a new unlimited shoipipping service. The largest retailer said the online shipping subscription will cost 50 a year. More than 1 million items will be available in three days or less. Its invitation only. No movies, music or original content for now. If if youre amazon are you sweating this . No. What does that mean . 3 million rubber maid coolers available . Not only do they know exactly what i want. We all pay more for prime. Wouldnt pay more for costco. A walmart customer might think 99 is pricey. Yes. I think walmart is i like doug mcmillan. He seems very nice. A nice man. Like dick costolo. This is that nice earnings to share thing im working on. Costolo has the lowest he is so cheap on a niceness basis. Its hard to put that into stock valuation, but that guy is nice. Danny meyer, shake shack reporting a surprise profit. Results beat on the top and bottom line. First Quarter Sales up 59 year offer year. Stock is up more than 200 since the ipo in january. I was doodling. This is an interesting metric. The value of a store in mcdonalds is 2. 5 million. Jack in the box 2. 2 million. Value of a shake shack with chairman danny myers, 41 million. There are 70 stores. Its pricey. The burgers taste great and the crinkle fries are killers. You took market cap divided by the number of stores . Yeah. Imperial data. The stores make a lot more. The average unit makes more than the runway. A lot of those you know l. A. . A little bit. They talked about one from la ciena. You dont have one in california . If youre short shake shack they have one in baltimore. They could put it up 680 stores overnight. Shake shack does twoyear comps. They call them same shack sales. The quarter up almost 12 . Raising their revenue forecast to come in in line. Remember there are only 13 stores in the comp. They did do double digit comps. They said we cant maintain this. Thats how you get the shorts. Theyll do the number. This was a fabulous Conference Call from the standpoint of guys, we are like this little company. We are going to blow it out. I tell the guys, if you put shake shack in all the starwood properties, if you put a shake shack in a hyatt, for room service . You said that on the day of the ipo. This is why you cant short the company. 47 of the short. I here a viewer saying you are going to run right into inandout neighborhood is that your plan . Youll get some traffic. This was a beautiful Conference Call for a small cap company. How about jack . 60 cents. Misses the estimate. Comps up 8. 9. I think jack is great. The stock has come down a lot. This is an undervalued story. Im going to do something my nephew and head writer sent me an email and said youve got to do a piece about shake shack versus jack. Shack and jack. Oh, my why dont you come on tonight . Nice dividend hike from 20 cents to 30 cents. Jack has great momentum. Chipotle hates me to use it in the same sentence with codova. I think they are doing very well. One is organic and natural if you had the burrito its an unstoppable burrito. There might be consumers who couldnt get a carnita and couldnt get it. Remember on the chipotle call there are 88 unnatural ingredients in someone elses burrito. I dont think its a homemade place like bettys. It gave the illusion it could be another guy associated with mass. Well get cramers mad dash. Later david fash sits down with dish chairman and ceo Charlie Ergen. Take another look at the premarket. We have a nice set up. More squawk on the street straight ahead. Through programs like mission main street grants. Last years grant recipients are achieving amazing things. Carving a name for myself and creating local jobs. Creating more programs for these little bookworms. Bringing a taste of louisiana to the world. At chase, were proud to support our grant recipients and Small Businesses like yours. So you can take the next big step. When a moment spontaneously turns romantic why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. 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Thats kind of unusual. Unusual that you would have a spike on takeover then have a major from raised price target because the business is doing better. I spoke to mark yesterday. I got him to befriend my wife. To befriend your wife. I said why are you blocking lisa . Okay. He was at the wedding. Hes hard to miss. He was partying till 3 00 then imploded. Anyway, sales force is doing incredibly well. I look forward to earnings next week. Its no more takeover. Merrill lynch has a sale that goes to a hold. They say dont chase. Now they are coming in. Mr. Peltz did not win. Im not calling out a victory for peltz. I cant spin the capitals. They won big against the rangers, but are not going to the next round of the playoffs. Both these companies exiting a weird story line on both fronts. Exactly. That is so important. They were etherial. Cloud is so hot, its amazing. Microsoft could go up again today. Chemical business is not hot. Youre stuck with chemical company. Deutsche echoing with Merrill Lynch is saying. Yes. I like to see agriculture get stronger. Deutsche saying you could use the pullback to buy. All right. Well talk about that and more. Opening bell a few moments away. Davids exclusive with Charlie Ergen. Here at the Td Ameritrade trader group, they work all the time. Sup jj . Working hard . Working 24 7 on mobile trader, rated 1 trading app in the app store. It lets you trade stocks options, futures. Even advanced orders. And it offers more charts than a lot of the other competitors do in desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivative pricing model, honey . For all the confidence you need. Td ameritrade. You got this. The pursuit of healthier. It begins from the second were born. After all, healthier doesnt happen all by itself. It needs to be earned. Every day. Using wellness to keep away illness. And believing that a single life can be made better by millions of others. Healthier takes somebody who can power modern health care. By connecting every single part of it. For as the world keeps on searching for healthier. Were here to make healthier happen. Optum. Healthier is here. Welcome back. We are getting word of another skirmish between iran and another sailing vessel. U. S. Officials are telling nbc news that iranian gun boats fired at a singapore tanker in the straight of hormuz when that tanker refused to halt at the iranian command. The iranian command then sought assistance from United Arab Emirates in the area when those ships approached the iranian gun boats turned and headed back. This is according to nbc news that iranian vessels fired upon a singapore tanker near the strait of hormuz. Courtney reagan, well keep our eye on that. Those types of news items have not been buffeting the market. No. There seems momentum youre post the employment number low inflation, Interest Rates going the right way, oil stocks going up. Now, there is usually something the bears can bring up quickly. We are in that zone when there is very little news. I read a couple. Some retailers werent that bad. The restaurant is good. Cisco good. I got up at 4 20. There was that little to do. Theres the opening bell. Take a look at the s p at the top of your screen. Its city harvest, helping feed new yorkers facing hunger. At the nasdaq gallapagos. We have the saudis saying we made the right call in terms of keeping production robust through the price decline. Scaring off anybody else who might have tried to muscle in. Oil will percolate up. We are not producing enough in this country and europe picked up a lot of the slack. It could work its way to 70. Though could ramp up production again. That could stop it. They could get it up quickly. Asia is getting stronger. China, the baltic freight up. Things are Getting Better in china. You mentioned urban. Upgraded to market perform on valuation. This is the biggest gainer in the s p. And target which my Charitable Trust owns is disastrous. I would prefer if we had news about why target was down. Not everybody is bad. Just understand its case by case with retail. They are not all bad. Some guys had better merchandise than others. Some guys are doing better than others. There was a weakness today. Target macys, nordstrom under armour even. These are great opportunities tomorrow, not today. What happens is analysts will say target is down. Ive got to downgrade it. They are taking cues from the stock. Dana says all the challenges we are hearing about temporal and external. Stocks have come down a lot. Problem is china turns and europe is turning. You want to be in ingersollrand. Wait a couple days. The retail environment was good. First couple of weeks are good. My understanding of may has been good so far. Dont abandon ship. Wait for tomorrow when the analysts panic. A group panic. Gas is back to 2. 67. Down a dollar from last year. I think the job claims are very good. I still think jobs have more to do with retail sales than gasoline. What did you make of this tweet to order system . Dominos will find any way to get younger people to buy. People said we should buy twitter on that. Look at dominos stock. Paddy doyle i love dominos pizza, its great. My kids love it because you can order online. You dont have to pay at the door. People still insist this is why you want to buy twitter. Usa today picked up my positive tweet how great it was. Dont buy twitter my Charitable Trust owns twitter dont buy twitter off the dominos. Twitter is a great product . They have to sit down with us. I have ten ways they can montize. Im only going to do it with my buddy noto football play fabulous funny guy. If you can buy another 2,500. Average up to get to 10,000, anthony. Just tweet you are going to do it and well all be fine. People still for the second day going over the verizon aol deal. New york times saying its evidence verizon is not going to remain stodgy if its been stojy. Went out to dinner with jim stewart. Verizon is another tnp, take no prisoners. I think aol will try to develop a sports channel. They are going to let him run that. People think its a stupid phone company. Its got so many subscribers. I think jim stewart is right. This is against google. I think they hate google. You want to go into wireless . We are going to come and get you with better ad technology. You faceless jokers who dont care about making money, we are coming after you google. This is an antigoogle play. I dont want to be google. Verizon is a gorilla. Guys at google, who knows what they are up against. Driverless. Speaking of verizon, a guy who knows a lot about that, david faber is in phoenix. Going to talk to Charlie Ergen. Interesting listening to you guys. Verizon does figure prominently as you know. A lot of speculation about what will happen to dish the company was founded and run by Charlie Ergen. We are here at their annual team summit where they invite partners, about 3,000 who are selling the service installing the service. Well get brought up to speed by mr. Ergen. No shortage of things to discuss with him. Sling tv. Very important what is going to happen there. And what is he going to do with all that spectrum and comes back to this idea would verizon want to try to buy dish or are they moving in a different direction . The aol deal was a small one, you have to remember verizon does like to keep its leverage at a certain level to remain Investment Grade because of all the money they borrowed to buy vodafone. That was a big deal. I think dish has all the cards. Ergen can do any deal. Can you explain that ergen is a huge card player and often has cards we dont know about . Everybody talks of course about the fact he is a player of the highest order. Well versed in various tactics. Investors start to wonder. They reported earnings last week that were not particularly good, lost 144,000 subscribers. The earnings were not bad. What do you do with that wireless spectrum . Their Investor Base is asking a lot of questions. The expectation is he had cards yet to play. That would seem to be the case. Maybe hell share some of his hand with us today. We are hoping. Does he ever comment to you, on the record you get him to say things. What does he think about the directv at t combo . Is he threatened by that . They filed objections today we can talk a bit about. Hes moving in a different direction. As he said to us in the past, which is i realize the poor business is not a Growth Business any longer, and therefore i made different investors over time in an area i think is going to deliver a great deal of value. The question yet again, that seems to be the right move. That spectrum is worth more than they paid for. The question is what do you do with it all . We still dont have an answer. David, cant wait. Its going to be great. In the meantime dow is up 142 largely on the back of companies that might be benefitting from a weaker dollar. Microsoft, boeing, apple. This is the story. Well try to this is out of retail into companies where the translation will be much better. With that pisani is on the floor watching that. We have a broad rally. All ten sectors of the s p 500 are on the up side. All of them about the same. I say tech is outperforming just a little bit. In addition to the weak dollar i point out that ppi number and not just energy down food down, services down, no evidence of rising prices at the wholesale level, at least. That will help corporate margins, as well. That is a factor in the rise we see today. Now we are getting retailers in and you can see kohls has been a big winner this year. Not today. Down 9 . They did beat, but didnt raise full year value. They didnt raise the guidance. Some people thought that was strange. Big momentum name. They had a great quarter last quarter here. They talk about new initiatives. That rewards program is going very well. Kohls was up 22 . The macroenvironment is tough. Look at samestore sales. The three retailers weve seen, kohls up 1. 4 . Thats below expectations. We were talking 2. 5 . Jc penney, 3. 4 . Macys was down 0. 7 . All three right on samestore sales. Remember the story from the bull side on retailers. Three basic ideas. Number one, traffic is supposed to be increasing. Put up the next full screen youll see that. We are supposed to have leaner inventories. We didnt have that. Kohls and macys up a year ago. Traffic hasnt been increasing. The one component job and wage growth. Only one of the three elements of the full story in retail has been happening. Jc penney is even down here today. They did raise full year same store sales guidance. They did talk about acceleration in march and april. When you have a stock up more than 20 on the year, the news they had out today isnt enough to sustain. A lot of people have been talking about the fact that the market is holding up well. The dow industrial is only 1 from its historic high. There has been a lot of discussion about the dow transports. The dow transports closed yesterday at a low for the year for the whole year. I would say this is not just because the airlines have been weak, but truckers, logistics railroads have been weaker. Norfolk southern closed at a low for the year. Many of the railroads are sitting at the same place. Thats another low today for the year. Some of the truckers like Yrc Worldwide sit near the lows of the year. Why am i bringing it up . Its not one subsector of transports. A lot of people believe that is a real issue for stocks going forward. Finally, just note a lot of traders talking about the 30year auction today. Stock traders dont talk about 30year auctions but with the three and ten year better than expected, that reduced the yield and stocks rose in those two days when we had those auctions. That will come today and then big discussion on the floor here about whether that will help stocks today. Back to you. Thank you, bob. Lets get to the bond picks. Rick santelli. Good morning. Bob nailed it. We have concessions in the marketplace. What does that mean in english for treasury auctions . Yields backed up a bit. You can buy in a bit cheaper and your yields a bit better. The notion of the 3 and 10 year going so well. I gave them a and a plus respectively. May moderate the selling. Well see what the 16 billion 30s at 1 00 eastern today. Looking for 24 hour of 10. Yes, the ppi did bring us down a bit. Not much. We settled at 2. 29 . Lets pick that date and look at several charts. You see the 10year last time we were up there. Look at bund yields. Looks similar. Exactly the same comp last time they closed up at these levels. Yesterday was around 77 basis points. Lets look at the french 10 year. Flirting with 1 . Pattern looks the same as does spain flirting with the 1. 83 level. If we switch gears a minute and look at currencies i want to point to what has been the tightest, the most consolidated the most boring if you are a trader affects the greenback, thats the dollar yen. Open this chart yeartodate we are testing the lower bounds. Its been a 119 closing market. With dollar being a proxy for interpretation of fed activity in the future. Last chart early february euro versus the dollar. This benefits from all the weakness that comes into the dollar. There was a time not long ago where the dollar was going up. I said euro weakness. Now that the dollar is going down, i dont say euro strength. I think this is dollar weakness. Back to you. Rick santelli. Ricks right. My thesis would be his thesis. I love being on the same page as rick because he is an incredibly nice man. I love the guy. I said that yesterday. Relative calm in the energy complex. Lets get to Jackie Deangelis. Good morning, carl. We are looking at prices flat this morning but wti is holding over 60. I want to talk about this notion of saudi arabia taking a victory lap on pricing and production. Sort of strategy that they put into place. A lot of analysts are saying this may be a little premature. Thats because oil prices have not necessarily been trading on supply and demand fundamentals, but really more on the dollar. Weve got a weak dollar right now. A soaring euro, and geopolitical instability as well. When the fundamental situation comes back into play, you have Goldman Sachs warning we could see more down side here. People are cautioning. Its also why weve seen so much volatility over 60 a barrel here as we get buying well see profit taking, which is probably what brought us back down to this level as well. I do want to mention there have been reports that iran has fired on a singapore tanker. That is a potentially developing situation, not impacting the oil market right now, but something to watch because as i said, geo politics have been part of this move past 60. There are a lot of factors to consider when you are thinking about the oil trade right now. And realize traders and analysts are looking at it differently. That doesnt mean supply demand fundamentals wont again be important to this market. Back to you. Thank you very much. Jackie deangelis. When we come back new details on apples long rumored streaming music service. Upping estimates on the iphone for the quarter. And well hear what dish network and chairman has to say about subscriber losses and future of sling tv. Dow up 113. About 120 points with a record high back on march 2nd. Hello. I am here to offer sophisticated investing strategies. My technology can help you choose the right portfolio. Monitor it. And automatically rebalance it. All without charging advisory fees, account service fees or commissions. That may be hard to compute. But im a computer. So trust me. It computes. Say hello at intelligent. Schwab. Com we live in a pick and choose world choose choose choose. But at bedtime . Why settle for this . Enter sleep number. Dont miss the memorial day special Edition Mattress with sleepiq technology. Sleepiq tells you how well you slept and what adjustments you can make. You like the bed soft. Hes more hardcore. So your sleep goes from good to great to wow now we can all choose amazing sleep, only at a sleep number store. Save 500 on the memorial day special Edition Mattress with sleepiq technology. Know better sleep with sleep number. Pretty good breadth. Well catch up with cramer in a moment. Ideas come into this world ugly and messy. They are the natural born enemy of the way things are. Yes, ideas are scary and messy and fragile. But under the proper care, they become something beautiful. Im standing up because my apple watch says its time to stand. China cell phone could be up for apple. I think its very important because cell phone weakness scared a lot of people. His estimate is 51 million for the june quarter. Streets at 45. Hes way above. That is very good. Another thing about the watch, i havent gotten my mothers day watches. Hewlettpackard, citi says be careful when they report next week. They have such a big overseas business. I say be careful. John chambers took aim at hewlettpackard. Basically said they lost their mojo. Competitor, but john was feisty. Could the take away be hp moved beyond the costcutting chapter . Its the split. I think people are excited about the split. This is a weak dollar play. Thats what you are going to be starting to hear. Who is a weak dollar play. Hewlettpackard is that. Dollar at a fourmonth low. What is on mad tonight . One of the themes on the cisco call was cyber security. Thats why cisco feels it has an edge. We have cyberark. They do a particular cyber security. Then zebra. They were up because they made an acquisition. This is a company that is so on the move that its off the radar screen. Zebra people think of zebras, no, think zebra technology. Not like when you watch National Geographic and one gets caught. These get away in the end. You feel bad for the last one, the slowpoke. They are always so cute. Their moms are nice too. You dont like up opens. Does this feel different . This is so bifurcated if you have a domestic stock its getting hammered. This can hold. This theme is holding. Domestic stocks, money flowing out of domestic stocks is breathtaking, including the rails. Its falling right into Companies Based here but had big dollar exposure. I think its going to win. Be careful like the home depot and lowes. This is the weekend for planning. Wait till next week. I think robins has a set of skills that will be a nightmare for short sellers. Well see you tonight, mad money. When we come back, david is live and exclusive with dish network chairman Charlie Ergen and the ceo of houzz. 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. 73 of americans try. To cook healthy meals. Yet up to 90 fall short in getting key nutrients from food alone. Lets do more. Add one a day mens 50 . Complete with key nutrients we may need. Plus it helps support healthy Blood Pressure with vitamin d and magnesium. At chase, we celebrate Small Businesses every day through programs like mission main street grants. Last years grant recipients are achieving amazing things. Carving a name for myself and creating local jobs. Creating more programs for these little bookworms. Bringing a taste of louisiana to the world. At chase, were proud to support our grant recipients and Small Businesses like yours. So you can take the next big step. Good thursday morning. Welcome back to squawk on the street. Im Carl Quintanilla with sara eisen and simon hobbs. David faber in phoenix in morning at the dish networks 2015 team summit. He is going to sit down with Charlie Ergen chairman and ceo of dish for an exclusive interview in about a half hour. Markets hanging on to a nice gain. Dow up 125 points. Dollar at a fourmonth low and that is benefitting the kinds of companies that would make up the dow jones industrial. European Bank President mario draghi speaking at the imf in washington today. Well talk to the gugenheim ceo. Bad day for retails. Macys and kohls down sharply. Cisco reporting Third Quarter results what outgoing ceo John Chambers had to say about the companys growth going forward. U. S. Stocks rising. The dows essentially within 120 points from a record high. The dollar extends its slide. Euro hitting a threemonth high as mario draghi takes the stage at imf headquarters in washington. Joining us is scott minor, chairman of investments. He is in town to accept the Institutional Investors sixth annual u. S. Investment Management Award for core plus fixed incomes. Congratulations. Thank you. Appreciate it. What did you do to deserve that . I showed up and work and didnt manage to do worse than all the rest of the managers. Thats all it takes. Thats it. What is the key to doing that in this environment . I think the key is not to take a lot of bets on Interest Rates. Long term rates hover where we are, maybe slightly higher. And what is credit going to do . As the fed begins to raise rates that credit spreads continue to tighten. So having some exposure to High Yield Bank loans is probably not a bad thing to be doing if you are a fixed income investor. Would you say you had a contrarian view on rates over the next couple of years . I hate to think of myself as contrarian, but i do find myself out of consensus a lot. I think the fed has very little latitude to push rates up dramatically from here. I think both the tenyear note and short term rates cant move much above 3 . Just because the debt load on the economy is so great that it will probably cause Economic Activity to start stalling out. Meantime williams this week saying it could happen, and if it does, dont expect a longterm signal that its about to happen. Right. I think the fed, i think is shifting its focus from being concerned about Getting Started too late to now monkeying around with expectations too much. If, for instance, the world begins to believe the fed is going to start delaying into 2016, the long end of the curve may begin to rally again. The fed clearly does not want long term rates to rally at this point. Can you explain what is happening, scott, with the flows that you see . For instance if people are finally getting fed up with the bond trade and yields are finally set to rise even a little bit, why wouldnt that money go into stocks . Where is it going . If you look over the last month or two in mutual fund flows, money has come out of equities and gone into bonds. You would think at this stage of the game people would be tired of bonds. I just think that the demographics in this country where people are so incomeoriented, every time we get this kind of a backup in rates, people see it as an opportunity to put money to work and they stepped in. While i think you are right that its probably time, we are probably past due to make the trade from bonds to stocks, a lot of people are still hesitant to get into the stock market. Can you spell it out for me . Is the selloff weve got in bonds a longterm trend . I dont think so. I think this is just a countertrend rally that we could see rates back below 2 somewhere in the near future. Can you bring you back to the point you made about the fed needing to raise rates . What is happening long term with the bond market . Can you run us through that again . Is the idea they will seem to be way too far behind the curve, and therefore risking inflation in the future . I think the first thing they are concerned about is by keeping the short term rate so low, they are running the risk of inflating bubbles. Other than that picasso i bought a couple of nights ago, i dont see a lot of bubbles. That was you. I wouldnt have paid 180, that was too much. I think they are worried about bubbles so they want to get started. They are afraid of being criticized for what happened under the greenspan era. The second thing is now that long term rates have come up, they are also concerned when they do start to raise rates we are going to get a replay of the 2013 taper tantrum. Since they are concerned about a dislocation in fixed income that could lead to perhaps a run on mutual funds and maybe something more systemic, i think they are happy rates moved up here. They would be hesitant to start seeing rates dramatically fall. I know what sara wants to ask you. Weve got brandnew cnbc survey results. People are starting to freak out about their dollar bullish position because now the dollar is at a fourmonth low. You are seeing the market react. Obviously, this puts a huge weight on earnings in the Third Quarter. Am i right this is a massive overshoot we saw with the Dollar Strength . Right. Im with you on this one, sara. You dont have to agree with her, incidentally. She is hard to disagree with. Its impossible. Just ask simon. I think that the long term trend in the dollar is down sorry, is up. The euro is down. History shows us to get an economy that has been in a structurally deep recession to begin to recover, that we need to get the Exchange Value of the currency below purchasing power parity by maybe 10 or 20 . This is where the big macs come in. Exactly. The idea is until you get the currency to trade at a significant discount to 1. 10, which could be 100, it could be 90, even lower i dont see how we really get European Manufacturing to be more competitive. Just for the sake of completeness, the euro zone grew much more rapidly than this economy in the first quarter. Right. The bar is low. Thank you very much. In the meantime, shares of kohls are falling sharply. Down over 10 highlighting what has been a tough week for retail earnings. Joining us by phone, oliver chen senior retail analyst with cowan group. Kohls is a fascinating story. You have this big momentum runup of 22 coming into february. Then today its beaten on the earnings per share. 8 cents a share. Margins are above average. Because the volume isnt growing as rapidly as people hoped, its being slammed. Talk me through why that is. We had a weaker february combined with a very good march april combined. The weaker february led to a slightly weaker comp store sales. Thats truly leading the pressure. A few key points on why we had a cooler february. So weather did play a role in terms of a lot of smoe removal as well as making people not as interested in going to the stores. The port slowdown had some impact. Before we bottom lined it on this stock in particular this standout data was retail sales ground to a halt in april. In fact, they are down or flat for four out of the last five months. What is happening with the consumer in this country . Im optimistic for the back half when i think about retail there are some trends that are positive trends such as leisure and denim but the lower gas prices its a fadein impact over time. The cold weather in february a lot of retail is discretionary. With some store closures and weather that did not necessarily make you want to buy spring goods, thats weighed on the quarters. I read that people are cutting their a, some of their bearish bets on a lot of these retailers on the belief they will still rebound retail is on a cautious walk with macys and kohls reporting softer than expected top line. Curious to hear what you think about walmarts move into amazon prime territory going after the lower end Free Shipping consumer. 50 a year sounds good. Is there a big opportunity for walmart . We are excited about the integration of bricks and clicks. What we are seeing is pure plays. Think about store fronts and also internet bricks and mortar retailers think about the internet. Grabbing share in this highly growing field the advent of mobile is great for what really matters as we think about malls showing negative traffic. What is your best stock at the moment . What excites you the most . We upgraded american eagle. We think there is a denim cycle happening for back to school. And restoration hardware. Im looking for compelling growth. Im a positive on the u. S. Consumer, as well. When you say there is a denim cycle on back to school, what do you mean . For the first time people might want to restock their closets and have new jeans basically. Theres newness. Its high rise, low rise mid rise treatments, distressed denim. For back to school thats going to be a hot topic, we believe. We think we are ahead with this message at cowan. I see charts that compare denim on women to athletic wear. Everybody is buying nike and under armour. Its worked both are working. The yoga pants, versatility light weight shoes health and wellness, they are working together. The hybrid model is a jogger model. Good to see you, oliver. Thank you. Oliver chen from cowan. I dont wear jeans on the weekend. Its only leggings. Up next the dollar largely correcting after its big leap over the last year. 1. 14 on the euro. What does wall street think of the currency . Exclusive new data on that. Later david fabers exclusive oneonone interview with dish ceo Charlie Ergen, what he has to say about subscriber losses and the future of the television industry. Good. Very good. You see something moving off the shelves and your first thought is to investigate the company. You are type e. Shorten the distance between intuition and action. E trade. Female announcer the mattress price wars are on at sleep train we challenged the manufacturers to offer even lower prices. Now its posturepedic vs. Beautyrest with big savings of up to 400 off. Serta icomfort and tempurpedic go headtohead with three years interestfree financing. Plus, free same day delivery setup, and removal of your old set. When brands compete, you save mattress price wars are on now at sleep train. Your ticket to a better nights sleep we polled a number of wall street strategists and the results are in. They are staying bullish. Even though it has been a brutal week for the bulls. After a massive runup over the last year, the dollar has plunged to a fourmonth low. Getting whacked on weaker economic data. Better european data. As you can see the bulls are hanging in there. Strategists see 1. 06 by june 1. 02 by the end of the year. Good news if you are holding out for that european vacation this year. A strong dollar against the japanese yen. They expect that pair to run up to 121 by june and Even Stronger next year to 127. That doesnt mean its going to be a smooth ride. Most expect current heightened volatility to continue for currencies. 30 we ask say those swings will get worse. When it comes to the dollar which has been at the center of the action for stocks and commodities, do not count it out. The fed is signaling higher rates and strategists say thats bullish. The explanation for whats going on, the market got ahead of itself buying up the dollar until april. Jim oneill, longtime forex watcher says it was silly how consensus the dollar trade was. He says the euro will trade in a tight range. 1. 05 to 1. 17 for a long time here. In other words, it was a historic rally. Something you have not seen in many years what we saw over the last year. Its going to take a while. I take it with a pinch of salt. You have to. Its not an easy business. You say the u. S. Economy will grow rapidly and Interest Rates will rise. So many of those trades, there are trillions of dollars that reversed direction over just the last five weeks. No one really knows what direction they are going in. The question is is it a correction or has something fundamentally change. The other thing i would add to you, you have this powerful force of european quantitative easing. They are not going to let up on it, even if europe shows better signs. People are getting in the way of the central banks. Dont fight the fed. Dont fight the ecb. Or maybe they got too excited in this longerterm trade. You have to think of it longer term. Short term there is room for correction. Judge, we havent seen these calls for 80 cents rescinded out of goldman. No. They are sticking to their guns. We did ask about parity in the survey. Only half say the euro will go down to parity with the dollar by the end of this year. Its worth bearing in mind, we didnt get to parity at the height of the european crisis. People couldnt work out why that was then. Theres a lot of stuff in positioning thats off the radar. We didnt have the qe stimulus. That is true. Thats going on now. Coming up, a pleasant surprise for air travelers. Those frequent flier points are becoming easier to use. Which airlines are the best and which are the worst when it comes to air miles. Seven out of ten Power Outages in the us are caused by weather. But utilities can now predict where the power will go out, within a few city blocks. Working with ibm theyre combining micro weather forecasts with detailed data from local sensors. To predict where outages are likely to occur. And send crews exactly where theyre needed, when theyre needed. Ibm analytics from the internet of things is making energy smarter every day. Welcome back to squawk on the street. European steel producer arcelor metal says the European Commission is opening an investigation of steel in russia and china. This is the second set of measures to protect european steel producers. Shares up almost 9 . Thank you. Cisco beating estimates for the Third Quarter, reporting a 12 rise in their profit as high demand made up for sluggish spending by customers. The companys chairman, outgoing ceo John Chambers was on mad money last night talking about ciscos big opportunities for growth. The opportunity for cisco to dwarf what we did during the 90s is very much there. And when you combine security we had the Security Strategy that the white boxes and new challenges do not. Combine that with every Company Going digital, that is a boardroom discussion. I feel good about where we are. Youll see it in terms of growth. John chambers with jim cramer on the Conference Call. Chambers commented on rumors that cisco was buoying fireeye saying i wouldnt bet on that one. Alibaba looking to invest more abroad according to the new ceo daniel zhang. Zhang said the company will invest heavily in new and existing ventures abroad. We must absolutely globalize. We spoke with him last week about the importance he puts on creating value for his customers. Competition already exists. We always think about how to create value for customers, for merchants. If we can continue to create value for the participants in our system, we will continue our growth. Thats been the great pallor game is where will they spend money exchina. It held on to the levels. We saw the investment in zulily. They get less than 10 of revenues overseas. In the last quarter chinese and commerce revenue grew 39 . They do more business than amazon and ebay combined in china. In the future, how will they expand that . Good news for air travelers. Those frequent flier miles you have been holding on to are going to be easier to use. Phil lebeau live in chicago with more on that story. That does sound like good news. It is. A lot of people think ill never have a chance to get a rewards seat. It is becoming easier. Take a look at the results. They do this every year. Survey future flights from around the world. 74 of the flights had frequent flier reward Seats Available. Here is something that is important. U. S. Airlines are improving their options. There are more Seats Available. Why . Competition with the credit card companies. Talking about capital ones. That is creating incentive for the airlines to perhaps say okay, well free up a few more seats to show our programs are still attractive. Also, there is debate about whether or not we could see ipos in the future for these reward programs as a way to monetize it for the airlines. One negative using miles to book an International Flight remains challenging. Overall the long haul, if you want to travel to europe during june, july and august, its going to be a tough sled to try to find seats. I would suggest you go for may, september or october. If you are flying domestically, which of the u. S. Airlines did the best in this survey . Southwest is number one with 100 of the flights checked having rewards Seats Available many then you have jetblue and Alaska Airlines 80 of the flights had reward seats. That is a 21 point increase from last year. Clearly alaska air showing a little bit of the impetuous to do more in terms of freeing up these seats. You look at shares of the airline index. This index has been plateauing over the last couple of months. A lot of people are saying, look, can we see stocks go higher . Thats a big focus here. Well see what happens. When we come back, david fabers exclusive interview with dish ceo Charlie Ergen. How the company is dealing with subscriber losses. Dow up 155. I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. Building aircraft, the likes of which the world has never seen. This is what we do. Thats the value of performance. Northrop grumman. If you want to succeed in business, mistakes are a luxury you cant afford. Thats why i recommend fast reliable comcast Business Internet. They know what businesses need. And theres a nomistake guarantee. If you dont like it, you have thirty days to call and get your money back. With comcast Business Internet you literally cant mook a mistick. I meant to say that. Switch today and get the no mistake guarantee. Comcast business. Built for business. Good morning im sue herera. U. S. Officials telling nbc news that iranian gun boat shot up a singapore tanker in the strait of hormuz. Five iranian gun boats ordered the ship to halt. When it refused it was fired upon. So far no injuries reported. Indian Prime Minister given a warm welcome by the chinese president in his hometown province. Chinese leaders almost never receive their foreign counterparts anywhere. The visit highlighting warm ties between the two asian powers. Honda and daihatsu will recall 5 million cars to replace air bags. Australian authorities ordered johnny depp to fly his dogs out of the country by saturday or they will be put down. They accused the actor of smuggling his yorkshire terriers into the country bypassing its strict quarantine laws. Im Jackie Deangelis from the nymex. The weekly Natural Gas Storage report. An injection of 111 billion cubic feet. This is slightly under expectations. Actually, it sends us to 3. Prices are spiking. I was thinking about this technical level traders were not expecting us to break the 3 mark today. Natural gas prices soared over the last month, up 15 alone this month. Interesting to note that a lot of people were short nat gas because we were building storage and demand was falling. At the same time traders say when too many people get on the short side of the boat, thats when we tend to go higher. Will be interesting to see if we hold the 3 lowell today at this point. Again, this number bullish for nat gas prices. Thank you. Dish network reported earnings earlier in the week. The company said it lost 134,000 subscribers in its first quarter, but the profit doubled on a year ago. Whats the ceos plan now . Not least with a vast amount of wireless spectrum. David faber is live in phoenix for the dish team summit. Thank you very much. We are here live in phoenix with youre still chairman also . Chairman and ceo. Yes. I have a few titles. Charlie ergen is our guest and your shirt is old apparently, back when you were ceo originally. Thats right. I used to do a monthly show called charlie chat and i would wear this shirt s. We are trying to save money for shareholders. I dont have a new one. We would like to start with the dish network itself. We want to get to talking about spectrum spectrum. The numbers down 134,000 subscribers. About 13. 84 million overall. Churn was up. To those who would say this business is certainly peaked and you are going in the wrong direction, is there anything you can do to arrest that . I think theres extenuating circumstances. We did have to take down broadcasting channels followed quickly by the Fox News Channel being taken down. That did negatively affect our numbers. Overall the industry was down a little bit in terms of numbers, which is negative the first time in this quarter the industry has been negative. The trends three, four years ago continue in the sense that the Younger Generation is not really paying for tv exactly the same way with hundreds of channels which they only watch a few. Even some of the people are traditional pay tv customers are skimming down their packages. There are fundamental shifts. What can you do to change that . The biggest thing we launched sling tv, which is not in the numbers. You are not giving us numbers. We havent got numbers. Had we published sling numbers and had hbo, the numbers would be positive. In terms to those watching. Sling, 20 a month and talking about others that come from the likes of cbs and hbo. Sony has one. Exactly right. When you look at the mod ill in our perspective do you spend 800 or 900 to acquire a customer or can you spend probably less than 100 with sling tv. When you look at the economics we see a shift in perhaps where you might get a return for your money long term. You talked about traditional customers and approaching differently than you are going to take than your previous ceo joe clayton focusing on people with better Credit Histories or people that will be longterm customers. Its competitive for the traditional bundle. Most customers have four potential offerings then have multiple offerings over the top. Are you going to keep a customer the next ten years . That doesnt exist because Technology Keeps changing. Your model changes and you need a higher paying customer and higher credit customer. In our case, we prefer to have customers in more Rural America where our base is and where there is less competition. I think of dish. I cant think of your ad campaign. We give the customer better value. Tv is relatively a commodity. There is no difference between espn on dish and espn on directv, yet people will typically pay about 20 more a month for directv. Its something weve got to work on to make sure from a brandnew perspective we do a better job. Its cable overall. At t is buying directv. The deal is going to likely happen. When you think about it from the strategic rationale of at t, does it make sense to you . I think it does. You do . They get scale and video. Video is going to be a big part of what they do in their wireless networks. They get International Business in latin america where they will come follow that on with wireless and in mexico they made a move there. It does make sense. For everything you do there are typical reactions to that. Do you see them becoming a tougher competitor for you . I think they will be a tougher competitor. There will be some dislocations here and there but overall will be tougher. They have scale. They will be the largest mpvd. Theyve got broadband and large parts of the country. They have more of core ingredients they need. How fundamental is it . Its important. If you want to get a lot of the new people who arent paying for tv today are paying for netflix or hulu, but not paying for the traditional bundle you are going to waste your marketing dollars trying to go after them for the big bundle. Go after what they know what they like. Sling tv gives customers a lower price for a lot of good channels particularly sports. It also gives them it takes away pain points. You dont have a twoyear contract. You can go on for a month, off a month, go on vacation, quit paying, do everything through the internet. The tv is always on. Works anywhere that you are. It eliminates some of those pain points you have with the traditional model. At what point will you give investors information on how well that service is doing . There is a good chance well release numbers next quarter. It has to be enough. It hasnt been a year. When did it start . It started february. We are in our third month. We are learning a lot. We are not perfect yet. We still have technical issues. Ive read there have been outages. Live tv is hard. If you miss the last minute of the ballgame, you are going to hear about it. We are on dozens of devices. Each one has different processors. We are inserting data for commercials and working disney and developing that technology. Thats really hard. Every programming contract is different. We have multiple streams in some contract. One stream with disney. We can pause in some. We have to get it more consistent. As we see the proliferation of these overthetop products, and verizon is coming with one soon. They just did the aol deal, what will differentiate sling to the extent you believe it will be successful from Everything Else that is coming at these core covers or core nevers . We have to be technically superior. Its not just about having an over the top service. Youve got to work on all these devices. Multiple with tvs ios, roku android and everything. Lets move on to spectrum which is where so many questions typically come from you and continue to. Verizon, at t, even the fcc now are not happy with or at least taking a close look at the way you went about buying 13. 3 worth of spectrum for 10 billion at the auctions. You used designated entities, you control them, 85 of the ownership. They were biddingly seemingly against each other. They say that is not fair, you should be penalized. I think verizon has been our largest critic. Ironically, they didnt file any formal comments against the merger. There were only a couple of companies that filed formal comments this week. In general i think the Biggest Issue has been kind of the headline has been the dish and des. We dont control the des. Got a 3 billion discount. The headline is that is a loss to the tax payer. That is an easy headline on a superficial level. The people who know about automatics and people who understand these things, and take a closer look at it realize this auction generated 20 billion to 25 billion more in terms of value. Most thought this would be 10, 15, maybe 20 billion. Nobody saw it reaching 45 billion. I think analysts in general, the de structure in this auction and dishs participation, probably increased the value of this automatic. It was the first competitive auction where at t and verizon didnt control everything. Raised the value about 20 billion or 25 billion. Take the 3 billion discount off that. Do the math. Somewhere between 15 and 20 billion the taxpayer made more because of our participation and de participation. There were 19 de companies. All in all when you study the matter, the structure made way more money. You spent a great deal of time preparing for your strategies here. You think the fcc will allow it to stand. Yes, i do. The de structure has been attacked many times. Its been around 1994. 100 of the commissioners all five s. E. C. Commissioners chose the rules for this particular auction. They chose not to limit the amount of discount a de could get. A de could get a 1 discount or 10 billion discounts. S. E. C. Chose not to do that unanimous by the s. E. C. I dont believe you can change the rules and move the goal posts after the auction. We followed the rules. I think there are sour grapes on people who perhaps verizon now sits back and says, oh we dont have the fastest network. We lost customers in the first quarter. Ive seen three studies. All three of those studies show timo has a fast erer spectrum. John legere always has nice things to say about you. They are taking on the big guys attacking the pain points for the Consumer International roaming. Its impressive turnaround. We are innocent bystanders as we look at that. You hold more spectrum at dish than tmobile. We have more. We are going to be a wireless company. What does that mean . Well take our spectrum and get in the wireless business in some form or fashion. Well be in the business. That spectrum is going to be used. We hope to compete. Its not just compete. We hope not just to do text and voice and so forth, but a lot of where wireless goes is one is going to be huge amounts of data which most of that will be video. Its more than that. The world will go machine to machine. Its not just going to be about human beings as customers. Its going to be Everything Else that is connected. Youll see where samsung will connect from refrigerators to cameras to tvs. Cars will be connected. You can imagine everything in the world connected. When everything is connected you are going to need to do that through a wireless mechanism. You need spectrum. There is no doubt that spectrum will be valuable, but your Shareholder Base wants an answer when you say we are going to figure it out. When are you going to figure it out . Are you going to sell it . Are you going to buy tmobile . Are you going to do something, sell the company or are you going to build it yourself . Those are all options. What i would say to shareholders, we are not a company, you buy it and next quarter sell it and make a big profit for your fund. We are a company you buy, stick it in a drawer and look at it in five years and see how you did we returned 20 annualized for 20 years. That is not a bad track record. We think long term. Its a great advantage not to have to go to the street and do something short term that hurts you in the long run. Advantage having 90 of the votes, you do. Do you care about the share price . I do long term, obviously. I have 99. 9 of my net worth tied into the stock of the company. I have an old shirt. I didnt spend 10 on a new shirt. Im in line with shareholders. I hope they are going to like dish. If you are looking for a quick profit or play the arbitrage game. At some point you are going to make a decision . Yes. It seems its become more incumbent on you to choose what strategy its going to be. I think the way i look at it, there are two ways to play it. Be reactive or proactive. Sometimes events happen where you become reactive. Sometimes being reactive is good. This happens, this happens and opens the door for Something Else. In general, i would rather be proactive. Sometimes when youre reactive might be a better deal for you and your shareholders but you are reacting to what somebody else did. They may capture part of the flag you cant get out yet. Are you being proactive . We certainly are looking at a lot of things that would be proactive. Im being told weve got to end it here in terms of our live interview. Well do something on tape. Thank you for taking the time. Thanks for having me. Charlie ergen is chairman and ceo of dish. Thank you so much. David faber in phoenix. When we come back the president of Qualcomm Joins squawk alley. The biggest chip maker for smart phones and just made a big bet on the internet of everything. Thats coming up later on. Dow close to session highs. Financial noise financial noise financial noise vo rush hour around here starts at 6 30 a. M. On the nose. But for me, it starts with the opening bell. And the rush i get, lasts way more than an hour. announcer at scottrade, we share your passion for trading. Thats why weve built powerful technology to alert you to your next opportunity. Because at scottrade, our passion is to power yours. Is a summer bummer ahead for the Home Builders . A surprising report from Goldman Sachs says you might want to sell your housing stocks now. Well break down why. D 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. Its been a tough week for the rails, were getting word this morning of a derailment. This time near pittsburgh. Confirmed from an affiliate wpxi. Several train cars have overturned on the tracks. Empty this time and this is involving a Freight Train apparently, no passengers involved. But it comes on the heels of amtrak train 188 and on a day when Kansas City Southern withdrew their guidance for volume and freight for 2014. Because of 4x uncertainties and fuel uncertainties. Dow up 154, technology up sharply higher. Kate rodgers at hq with more. Helping drive the tech sector higher is microsoft extending recent gains up near 2 , near the highs of the day. The the Company Still riding high an upgrade from Deutsche Bank yesterday. The firm raised microsoft to buy from hold. Citing investor enthusiasm about office 365. Some other stocks leading tech higher are facebook adobe, semantic and Western Digital up 2 . Lets send it over to chicago. And Rick Santelli for this mornings exchange. Rick . Thanks, simon. I would like to welcome my special friday eve guest david ader. Thanks david. Thank you for being here. You know, other the last couple of weeks, actually to be quite general in my opinion. At least from my perspective. The last four to five weeks. The personality of the fixed income market, treasuries and generalically all fixed income products, have had a personality change. Have you noticed it . And what are your thoughts . Yeah ive kind of noticed it. Its caused me some sleepless nights. And falling asleep during the day. You know i think that as weve been talking, you and i have been talking about liquidity. That is a major component to it. Things have changed, right . Weve had a big selloff in bunds. U. S. Economic data has been weaker. Which means that we may have to put some sort of a stall on when the fed is going to hike and that has consequences for inflation concerns. Oil has rebounded. So theres definitely been a lot of changes. I contend that you know prices have probably changed more than the facts. And its been a big panic in a very, very liquid environment. I love that, prices have probably changed more than the facts. That is huge. What i call that logistics, mechanical its kind of way the market packs and unpacks. Many times that can be untethered from all the things we normally associate with the strategies of trading the fixedincome market. So to that end, my question to you is if your notion is Global Growth may be improving, and europe is still going to be on the down side for a while. In the big picture its hard to imagine a big followthrough and hold for higher rates but that doesnt change whats currently happening in the short to mediumterm, correct . Exactly. Think that again, there have been some changes. Oil has rebounded. The dollar is weaker, were going to see impact on that and inflation down the road for a quarter, maybe. You know, maybe it will pick up. And maybe the fed in fact is going to you know go a little bit slower than they otherwise would have done. So you know, well be talking about the fed being behind the curve. When you see markets move the way theyve been moving, this is a position panic. People are getting out. There you go. Im with you david. A lot of margin calls, most margin positions are fully leveraged. When you get into what i call virgin range territory, things change quickly. And the interesting thing is about it is, when you look at the position proxies that people look at, the various surveys Dealer Holdings for example, the long is not in treasuries, treasuries are only the liquid vehicle that people can sell because they cant get out of Something Else or theyre being stomped out of other sorts of trades. So i think again the price activity is a bit deranged but i think its somewhat exaggerated and as an investor, you know what you want to see here is a little bit of calm. Finding a footing and determine whether in fact im right that the facts havent changed that much and it really is about the price action. But you know its a good time to be patient. Excellent. David, thank you for your perspective. Lets go back to post 9. Thank you very much. The bird flu outbreak escalating now in 16 states. So what will rising egg prices on main street mean for investors on wall street . Our Morgan Brennan joins us from hardhit ames, iowa this morning. Thats right. Well if youre a Poultry Farmer in iowa and your birds get sick, the future of your business hinges on the bird flu tests that happen here. This is iowa state universitys veterinary medical center. And theyre getting so many cases that the labs here have had to stay open 24 hours a day, seven days a week. So overall weve seen more than 33 million birds affected by bird flu thats across 16 states. By far the hardest hit has been iowa and most of the cases are tied to hens that lay eggs, many at commercial facilities that supply major food companies. Over half the business of egg processors is done in iowa. Certainly were likely to see that Ingredient Market where eggs are an ingredient, be even greater impact than probably the shell market. So the egg market breaks down into two categories, you have shell eggs basically what you buy as a consumer at the store and breaker eggs which are processed and used by food manufacturers. So while the shell market specifically midwest large eggs by the dozen, wholesale have increased 30 in price in the past two weeks, its the breaker market thats really feeling the pinch. With liquid whole egg prices up 77 . Over the same time. So as Companies Like post holdings, which owns michael foods, experienced steep interruptions in their supply chains, the ripple effects are really still to come for these major food companies. The companies that make everything from fast food breakfast sandwiches to mayonnaise. So guys, this is really expected to get much worse with so many facilities offline indefinitely. Yeah, morgan we saw post warning about it, the cereal maker, 20 million hit. Thank you very much from ames, iowa this morning. Morgan brennan. Lets send it over to john ford with squawk alley. Well Strong Quarter from cisco, solid quarter as John Chambers gets ready to hand over the reins as ceo. But what is next for them . And do they stand to lose from some competitors who have been trying to breathe down their necks . And qualcomm, the president of qualcomm is going to join us to talk the internet of everything and cisco says its going to win in this arena. Can both be right . And ardio has a new plan for streaming music. Even as apple plans to release its redefined version. Can both win . Find out coming up on squawk alley. Good morning its 8 00 ampl at sis Corps Headquarters in san jose california. And 11 00 a. M. On wall street, squawk alley is live. Cisco headquarters