Transcripts For CNBC Squawk On The Street 20130114 : compare

Transcripts For CNBC Squawk On The Street 20130114

Youll hire people without de mapped . Invest in new things. Create new demand. You spend joe kernan, you spend. We appreciate it. Thank you. Right now its time for squawk on the street. Im melissa lee live from the new york stock exchange. Lets see how were setting up on this monday morning session. Apple may be away, but we got a rally from china overnight. As for the picture in europe, the euro, we should note, is hitting 11month highs against the u. S. Dollar. Marginal changes on a percentage basis. A road map this morning starts off with apple. Even more doubts about the demand for the iphone 5 sending shares below. Did you see your paycheck on friday . The payroll tax hike obviously kicking in for Many Americans. Felt like a pay cut. Will this be a temporary shock or a headwind as stocks hover at fiveyear highs. Ubs achoirs tnt after a commission throws up road blocks. To the top story. In the premarket, weve seen apple shares fall below 500 for the first time in 11 months. The tech giant has cut its orders for iphone 5 components because of weaker than expected demands. Screen orders for january to march quarter have fallen about half. The company had planned to order. Apple said to cut orders for components other than screens. Now, jim, weve had sort of this concern about demand for the iphone 5. I think last week when Deutsche Bank came out with the note from the japanese team, specifically citing this very issue, thats when the concerns really started to mount and the stock really started feeling the impact. I think that theres something wrong with the iphone 5. I think that samsung has come on very strong. When you go to a resaler, the sales for samsung are much stronger than they used to be. I think this shift has got to be acknowledged. As Henry Blodgett said, the stock is inexpensive. When you have something that is old news, new news, it doesnt matter, there is a continuing recognition that something is just not as great at apple that it used to be. I think we can make the argument all day and all night, the valuation, cash on hand, dividend that apple is paying. At the same time you can make that case for a lot of other tech stocks out there. They pay a dividend and yet the stocks dont move much anymore. And im thinking of like a microsoft, for instance. Well, i was just reiterating what henry was saying. Right. I feel that, again, theres a lot of things that are subtly wrong with apple. The new itune iteration is just hated. I dont know a soul who likes it. Its very clear that there are real issues involving the ipad mini and whether its as exciting as it used to be. There is no omg factor. Its just frankly, as my daughter said to me, who got me in the stock at 50, dad, apple stinks. Theyre just not a Great Company anymore. Funny you say that, because forbes did a piece last week, talking about whether or not they have lost it. Heres a quote. Teens are telling us apple is done. Apples done a great job of embracing genx. Theyre all about surface tablets, laptops and galaxies. But i dont want to get quoted as saying apple is not a good company anymore. No, but younger people are saying apple is great. My daughter texted me friday night, i was at a Surprise Birthday Party for a buddy of mine. And she said, dad, do you know anyone at apple . Youve got to speak to them. I was having problems downloading my itunes, too. I think its a good company. Its a terrific company. But i just am seeing people who liked it turn on it. I was at my verizon reseller this weekend. The guy saying, listen, i dont see the demand anymore. Right. These are worrisome. It can go down, because the valuation is like other texts. I said when steve jobs died that it was just another stock. Then the stock went up another 200 points. People said, you dont know what youre talking about. But it is a notion that it is not hot and perhaps it doesnt have great value. I think the apple maps app was not a good one. The idea that no one from apple is going to come out and say this is old news. No one. I mean, so when its going up, apple has to say nothing. Never complain, never explain. When its going down, the never explain, never complain attitude doesnt work. Things can move more quickly. In general in Technology Even five years ago. Even three years ago. Consumer taste, the ability to actually change quickly, would you agree . Yes. What are they supposed to do . Listen, apples going to generate prodigious amounts of cash for years to come. The question is, will it come back to multiple. Many will argue it is extraordinarily cheap. But things can move very fast. Market share has dropped dramatically in the smartphone industry in a short amount of time. Its like the quote that carl read. Look, when you have kids, saying, listen, dad, i dont want that apple product. But i cant say to my daughter, hey, what are you crazy . The stocks very cheap. What does she care about the stock . In all fairness, its not a teen retailer were talking about, right . Teens are not theyll be grown up, buying macintoshs. Im stuck in the ec ecould system. Look, the story is that there was never any product better than apple. Whatever apple put out was the best. You know, look, youre not allowed to say anything about apple. I wrote a piece saying, i should just say apple is the greatest and not say anything more. I can just say, listen, you dont know what youre talking about, except theyre talking about whether to buy the product or not. Analysts on the street are starting to lower their price targets, lower their estimates, et cetera. If the street is finally turning en masse, is that now the time to get in. The time to buy. Right. Except the fact that its going to be rocky. Were going to sit here every day and talk about how things are not good. Is that a sign that hewlettpackard has a lot of theres a lot of people who want to own hewlettpackard because they think its bottomed. What kind of world are we living in . People want to own hewlettpackard and not apple . Do you hear yourself . I just saw the venus demillo. Its in the louvre. Its harder. People are going to say, im posting cramers address. Because he has a gun license. No, i just said theres issues with apple. That was a good part in the New York Times today. Theres another debate going on there. Meantime, stocks beginning to weaken a fiveyear high. Up more than 3 in the first eight days of the trading year. The markets are facing headwinds, including the payroll tax taking a bigger bite out of americans paychecks this year. Social security taxes reverted to 6. 2 of salary, up from the temporary rate of 4. 2 . If you got paid on friday, guys, theres a good chance you said, what . Is this my net income for the next few weeks or months . The charts in that group are saying the dollar stores, youve got to stay away. I know Howard Levine was on this morning in a conference call. People were so, so skeptical. If you look at every domestic retailer, say, perhaps, urban outfitters, the charts all look like theyre rolling over. The retailers that are weakly related to housing, anthropology has a housing fund in urban outfitters, theyre holding in. But i think people are worried that retailers there was a big theme that youve got to stay home to invest. All of a sudden people want anything that is emerging markets and nothing related to retailers. Its stark. Do you think the old barbell where you buy the high end and very low end if consumers across the board are feeling it . I would imagine the lowend consumers are feeling it, and the highend consumers might not feel it, except in later tax increases. I think deutsche is holding in. Im just the pressure in dollar general, the pressure those Conference Calls were hideous, by the way. Their stories were so bad, you could see people fleeing from the stocks. Its very difficult to defend them. The analysts have turned on them so aggressively, that no one the skepticism of what management says is just so thick. Its difficult to own them. And people feel thats where people come back. Do they not shop at all . Thats hard to believe. I mean, do you go buy mccormack, because they are stay at home . You cook . Spices. You buy mccormack because youre cooking at home. More broadly, though, between the tax debate and whether that stops, slows consumption, politico has a poll that half of the republicans want to see a default as we get closer to the debt ceiling deadline. Will this put a limit on what stocks do over the next few weeks . I read this weekend another piece that says the Social Security checks arent going to come out. Theyre going to come out, okay . We can go down this path and scare people. But im not going there. I remember when i was going to the balk last year and we had the debt ceiling. A woman said, im not going to get my Social Security check. And i said you will. She said, no, im not. I feel like, its incumbent on people to say, look, maybe theres a week but when you say Social Securitys not going to come out, we are not a third world an emerging third world nation, whatever is political to say. We can really scare people here. Our job should not be to scare people. But you can scare people very easily. Right. On the other side people are citing mutual funds, we talked about this on friday, and thursday of last week as a positive. Perhaps you shouldnt, given there were so many inflows to bond funds. The s p was up nicely last year and the year prior, so who knows if its not indicative of the opposite, that the retail gets the memo last. What youre saying is that washington may have we may talk about washington a lot, but the individual investor is not hearing. No. But theyre looking at something weve talked about at the beginning of the year, extraordinarily low bond yields, and the risk to the extent people understand that risk, if you see Interest Rates rise and what seems to be an appetite for equities early in the year in terms of inflows. Well see if it continues. Limited partnerships, a bunch coming public this week. Those are good bond equivalent, get some yield. Lets watch how those deals do. I agree, that the individual just saying, listen, i cant make ends meet, take that vacation on bonds, and did they get the memo on the Social Security checks not coming . Well, they just heard us with the fiscal cliff, theyve heard us with the election and the last debt ceiling. And they heard us with the italian bonds. Theyre saying, maybe the media is too negative. Speaking of deals, lets talk about one deal that does not look like its going to happen. U. P. S. Is abandoning the takeover of dutch Delivery Firm citing resistance from european regulators. U. P. S. Had sought to buy them for the European Network in business in asia and latin america. Not entirely a surprise, i would imagine, since the ecb had sent a number of requirements out. But melissa, i think there was a generally held belief this was making good progress. I think the reason youre seeing tnt shares down so sharply because it was something of a surprise. You know, it may trade over there, but the fact ,t is owned largely to well, over here, and as you might expect hedge funds have been big players in this. They are getting well, theyre just getting crushed today, as you see that stock down. It was a debate about creating competition there. There appeared to be the dpd division of lepost, the French Post Office essentially. They seem to be making a lot of progress in terms of access for air routes, and, you know, they had already gone through 17 countries where they had remedies, that is u. P. S. And yet they were unable to get there to the finish line. So a surprise to a certain extent that u. P. S. Decided to throw its hands up and say enough, were not going to be there. This idea that fedex doomed the deal because it wouldnt buy divested assets, im hearing thats not necessarily the case. Also not expected really that fedex will come back and play in a meaningful way. Some may hold out the hope that they may come back. Did u. P. S. Did u. P. S. Get lucky . They paid too much for this. A big number when they put it out there. But there were some very meaningful synergies. Of course, you start to eat away at them when you say we need this, this, this, and this. Not the First Company to watch its deal go down given european regulators. Well watch that stock today. The facebook rally, meantime, rolls on as the company gets ready to hold a big event tomorrow that is full of mystery. Well tell you about the latest upgrade this morning of the social network. Also ahead, one of the streets bestknown analysts. Take one more look at futures as we kick off a week of full of earnings, full of data. And a lot going on today. [ male announcer ] dont just reject convention. Drown it out. Introducing the allnew 2013 lexus ls f sport. An entirely new pursuit. Getting word that the president is going to have a press conference at 11 15 a. M. Eastern time in the east room of the white house. This will be the last press conference of his first term. Comes as a bit of a surprise to the press corps this morning. It could cover anything from immigration to guns to his cabinet selections. So we bring that to you live at 11 15 a. M. This morning. Were watching shares of facebook, because they are rising premarket. Deutsche upgrading from a buy to a hold. Th the call comes ahead of an event facebook is holding tomorrow in which the company is inviting people to come and see what we are building. Facebook shares up 65 in the past three months. 65 . Thats a tremendous run over the past three months. A lot of momentum here. What im hearing from advertisers, they offer the option that no one else has. That the mobile plans that zuckerberg announced have really come on strong. Again, this is something that will reference what Henry Blodgett said this morning, comparing apple. Facebook has tremendous momentum. You can argue it is overvalued. But i can tell you the advertisers do love these new different you know, lets just say different methods of communicating advertising. A lot of other companies not been able to reach those advertisers. Facebook has. And its working. Its working. Yeah. Price target for Deutsche Bank went to 40. Above the ipo price seen as sort of a High Water Mark for a lot of investors who got stuck with the shares on the fateful day in may. Raising numbers facebook, because the big advertisers are saying, i can get broader reach, younger people. They want that group. Its working for them. And again, when i say its working, im not saying the momentum is working for the stock. There are actual advertisers who say, listen, i want to do a plan on facebook. Because when facebook sees you as an advertiser, they have Empirical Data showing its really working. And the return on investment is much better than anybody else. For a company who says we deliver the super bowl every day, were going to get an actual super bowl in a few weeks, after an amazing weekend of football, jim. Whether your teams won or lost. I love that color. Incredible. Cramer is ready to help you get off to a fast start in a new trading week. Hell bring you the mad dash next. Rick santelli will talk with americans for tax reform. Grover norquist, what is the father of the antitax increase saying about the debt ceiling standoff . One more look at futures as we kick off monday morning. Dont go away. About seven minutes before the bell. Lets get jims mad dash this morning. Theres the investing carl icon. Always a good investor. And then the put into play carl icon. I think transocean, this is more of a rock bottom valuation. It had been hurt very much about an investigation, obviously what was the role in the condo. That is now behind them. The stock spiked a little bit after that cloud was removed. I dont think anybody can buy them. Theres no one big enough to buy them in the sector of the driller. They break the momentum because of international drilling. Its a deep water driller, chiefly. Not domestic land drilling. Big calls on hp and emc. Look, this is the kind of thing were seeing. Whats cheap, okay . Hewlettpackard, jpmorgan said theyre cheap. It could divest some assets. Sanford bernstein said the breakup value is very good. They do have a consulting business, a printing business. Ibm at one time split up, downgraded by the way. The emc is really complicated, because theyre saying that theyre slowing storage. This is the third downgrade emc. My travel trust sold emc, because i fear preannouncement. I fear there could be something that comes out and says, look, were not going to make the quarter. Even jpmorgan cut of ibm mentions if some of these safe havens could lose some luster, if smaller tech firms grow faster. I think that one of the themes of research and whether you want to take research at its value or not, is that, listen, we should buy more emerging market names, look at companies we regarded as being risky. Ive got to tell you, the safe havens, whether they be general mills, okay, or whether they be ibm, ibm inexpensive stock, but as melissa mentioned, a lot of these stocks have been inexpensive for a long time and it doesnt matter. Facebook jumping ahead of a big announcement tomorrow. There are those who say it is time to sell the stock. Meantime, gm experiencing a resurgence of its own. The stock up sharply in the last month. Phil lebeau with the gm president from the auto show. Lets get the opening bell in just a minute. What are you doing . Nothing. Are you stealing our Daughters School supplies and taking them to work . No, i was just looking for my stapler and my. This thing. I save money by using fedex ground and buy my own supplies. Thats a great idea. Im going to go. We got clients in today. [ male announcer ] save on ground shipping at fedex office. Executor of efficiency. You can spot an amateur from a mile away. While going shoeless and metalfree in seconds. And you. 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