nikkei. overnight in asia not good. 2% drop wrapping up what is the worst week in three years. of course concern about china in terms of exports or lack thereof. a look at europe where we also are going to see a good amount of weakness. the follow through as you might expect from here yesterday, a day in which we saw the s&p down almost 2% and the nasdaq -- >> nasdaq down 3%. >> lot more than that. >> yeah. >> let's get to our road map this morning as you might imagine. does start with that meltdown if you want to call it that in the markets. stocks slide around the world. you just saw. is this the start of a correction? the tip of the spear, jpmorgan profits disappointing. jamie dimon confident in the american recovery. how will the bank's weak results drag on the market and other financials. the flip side wells fargo profits up 14% and those shares are rising. another bad month for sales at gap. gap discloses a 6% drop in march same-store sales after a disappointing february. gross margins taking a hit. one downgrade i've seen. no relief on wall street this morning, of course, as we've told you. the futures moving lower after thursday's sell-off which saw the nasdaq suffering the biggest one day slide in 2 1/2 years. biotechs and the momentum names continue to get hit after having been up the day previous. you had the dow and s&p posting the biggest one-day point declines since early february. not interested in point declines. just a matter of percentage. that's how everybody measures their performance. >> right. >> as i've said day in and day out here, the pain is much worse even than you would see in a 3% down day. it continues in the hedge funds. i would have thought at this point many of them who may be a lot of the volume have already taken their gross exposures down, and i thought that was a sign of it on wednesday. >> yes. and i felt it. remember we're down 3.5% from the high, we're not down that much. to hear all these blowups is rather incredible. yesterday was something i've never seen in 31 years. okay. i saw incredibly strong u.s. economic data and interest rates go down dramatically and it's continuing today. and that is a combination of the fact that worldwide rates are so low, why not be in a much more risk-free bond than a greek bond, but also because the money is pouring out of equities. pouring. and going into bonds. and a lot of this is what you've been saying. that hedge funds, i'm calling them wounded tigers, and the momentum funds, overwhelmed by supply, overwhelmed by zoe's kitchen. >> zoe's kitchen. that pyramid we're trying to stay away from, although it will figure in some of our shots today. >> ever been to the pyramids? ? they're not that nice looking and eroding. >> well this doesn't have a top. that pyramid. of course another public offering. you've been pointing to what you believe at least to a certain extent is weakness in some of the momentum areas. high multiple names in technology and biotech. in part because of the supply that keeps coming from new wi wish -- issues. >> we talked about 3d printing. i'm going to give people at home -- let me give you some insight. when i go on a book tour, 3d, d, d, d the stock most asked about. it is the stock most asked about. this morning voxle jet which you and i have joked about when it was in the 40s and 50s prices 3 million shares at 15 bucks. david, this stuck was in the 40s and 50s a few months ago. isn't it interesting that they're still selling and that's what's going on. >> fireeye. >> why sell at a high price if you can sell at a low price. >> if your basis is down 52% from the high. >> still raising money down here. >> fireeye a good company, now they did -- they announced when the stock in the 90s 14 million secondary it was then prized in march, second week of march, priced at -- at $82. feye. feye is now at 48. this is just less than a month -- a month ago and this secondary you have to believe if you're opening one of these stocks or if you're an insider, you're going into your board room saying we are not fireeye. we are going to get the deal done now and we are not going to be down so quickly. i mean i'm just saying that there's no price these guys want to sell. >> there may not be a fundamental underpinning to this weakness. >> like the actual how the businesses are doing. >> yes. not just the businesses but the broader economy. there is -- >> quite good. >> concern about china and we shouldn't understate that. that has been an important drive he of economic growth worldwide. export numbers were far worse than had been anticipated. >> they were part of our bond. >> you can't necessarily draw many conclusions from one number for one month from china on anything. >> export -- you know, the import and export numbers were both horrendous. >> they were. >> you know what no one talks about -- >> that's a fundamental but there haven't been other fundamentals. this seems to be largely a lot of stocks that had an enormous move up that suddenly started to move down and then a lot of forced hedge fund selling or taking down a gross exposure and that keeps playing out. >> right. the companies -- it's the shareholders. not the companies. as opposed to 2000, in 2000 the companies, many of them were jokes, 300 went under. in 2014, we chose to value some companies as revenues and those companies are getting hammered. but so are the dhaeps have good earnings. that's going to be a mistake eventually. in other words, what i'm trying -- i don't want to hate myself as a bear -- paint myself as a bear. i'm saying there are bearish segments where i thought the underwritings would cool and the insiders would cool and they have infected other areas of the economy and unless you have a dividend, david, a nice different depds, they're going to -- dividend they're going to hammer you. mcdonald's, did you see mcdonald's yesterday? is there a fast food company doing as poorly as mcdonald's? stock was up $1.08 yesterday. 3% plus yelled. >> better than you'll get in a lot of places. >> you can buy a berkshire hathaway bond at 3. >> mcdonald's will turn it around. that's why the stock is up six bucks. >> if you are trying to live off retirement income or plan a portfolio to give you some income what are you going to do? you still got to end up back in the stock market. >> who are you going to call? verizon andth. >> another reason at&t has been doing extraordinarily well. >> and that stock was good yesterday they kind of like let's -- behold the stone wall. >> the fundamentals are not particularly good. >> stonewall jackson at at&t. >> a couple names taking divergent paths this morning in the very important area of financial services. two big banks this morning, wells fargo posted better than expected first-quarter profit, $1.05 a share helped in part bay sharp decline in the lender's charge off rate. jpmorgan chase missed street expectations. q1 earnings, $1.28 a share. that was hurt by weak trading particularly in fixed income currency and commodities. the earnings released chairman and ceo jamie dimon did strike an upbeat note. dimon said, quote, we have growing confidence in the economy, consumers, corporations and middle market companies are increasingly in good financial shape and housing has turned a corner in most markets. all right. we got that going for us. >> wells fargo does not have trading exposure. you know what -- >> no. >> i'm going to own this. my charitable trust sold some jpmorgan. >> what are we talking about first here? >> start with jpmorgan. >> yeah. but, you know, we held some of it. this was a bad quarter. okay. as opposed to saying that it was a good quarter and people are misunderstanding it. it was a bad quarter and no one is misunderstanding it. one of the few misses of jamie dimon. i read the annual letter yesterday and i said on "mad money" i said boy, everything every data point for banking is bad but he reaches the conclusion that better times are ahead. well, you know what, that's jamie, better times are ahead. jon stumpf speak softly if not at all and carry big numbers. i'm mad i wasn't telling people this wells fargo number, look at this, commercial industrial the lone growth here is incredible. real estate, automobile, credit card, jpmorgan didn't do well on credit cards. well, it's not the credit card force. wells fargo up 9%, new account growth up 29%. jon stumpf you are america's greatest banker. >> yeah. i talked to a couple of pms who focus on financials this morning, portfolio managers. weak on most fronts is what they said about jpmorgan. >> think he's distracted. >> by the way, they were talking about there's an expectation in fixed income currency commodities would be weak. >> not in lending. >> weaker than expected. >> not lending. >> i'm mad at myself. i saw it. >> what do you mean? what did you see? >> because his letter did not give you enough to hang your hat on to like the stock. just to like the country. now i'm not -- you know, we're not trading the country. >> right. >> we're trading jpmorgan. dividend boost but that was in line. >> glen shore from isi one of the better analysts, solid business performance consumer deposits up, card sales valium up 10%. jpmorgan. client investment assets up 16%. $14 billion of long term net new flows, dividend yield of 2.8%. >> took the mortgage service rights. i'm switching. sister, mother. mortgage service that they did -- that wells fargo did not have. look they're making a lot of money not doing well. who knows. this is the bull case. they're making a lot of money not doing well. wait until you see what happens when they do well. the problem is wells is doing well now. >> there was a reserve release and a bit of a tax benefit we should point out on wells. >> no, that's why you're -- you -- we're good partners. because you're tempering my enthusiasm on wells and tempering my negativity on jpmorgan which you've done since 1998. not necessarily using these two stocks. >> good. i'm glad we're able to do that and i like the fact that we are. good partners. we have a lot more coming up. retail, the economy, the consumer. you want to hear what macy's ceo terry lundgren has to say about the mall. we have him. speaking of retail, what is gap blaming for its weaker than expected same-store sales? yeah. >> we'll have the answer after the break. let's give you another look at futures by the way. very important market day here as we follow yesterday's shellacking. we have a lot more "squawk on the street" live from post nine. . save you fifteen percent or more on car insurance.d everybody knows that. well, did you know pinocchio was a bad motivational speaker? i look around this room and i see nothing but untapped potential. you have potential. you have...oh boy. geico. fifteen minutes could save you fifteen percent or more on car insurance. i can't wait to get to mattress discounters good and early for the tempur-pedic bonus event. choose $300 in free gifts, and, get up to 48 months interest-free financing with any tempur-pedic mattress. ♪ mattress discounters we got a fair price.ruecar.com, my feeling is that... there's no buyer's remorse, you know. i'm happy with my purchase. it's the truth. when you're ready to buy a car, save time, save money, and never overpay. visit truecar.com ♪ unfair. >> that's a little rough. >> yes. >> that's a little rough. >> that's real. >> 5% drop it's not titanic. >> come on the white star line, give me a break there. >> shares of gap are falling, falling. they're not sinking to the bottom of the ocean. never to be heard from again. the apparel retailer did post weaker than expected march same-store sales down 6%. gap predicted the month would be negatively impacted by a shift in the easter holiday. last year i think it was march 31st, this year late april. this morning janney downgraded gap to a neutral citing incenter growing -- inventory growing faster than sales. that's the oldest when it comes to retail. the inventory grows faster than sales, get rid of inventory as mickey calls them our mistakes when you walk to the back of the store sometimes. >> when my father told me he was doing inventory at gimbels too many gab ber dean pants and they got too many gab ber deans. the old navy number quite disappointing. this company has become hit or miss and i don't mean that terrible chain called hit or miss which i think went under. i shouldn't say that. maybe my hit or misses have closed. the ones that i would go to. >> it's possible. >> but this is the kind of thing that has become endemic with gap. you know, is it good, bad? you can't be month to month in the retail business. you have to be consistent. we're going to hear from terry lundgren. he's been consistent. see what he says. >> it is interesting that gap does chooses to share same-store sales with us monthly where there are very few retailers anymore that do that. that has disappeared. >> it's a hedge fund -- >> in terms of something that you hear from. a hedge fund annuity plan. >> once a month you can make money as a hedge fund manager. bed bath another downgrade. an article they talked about what stocks were down a lot and the overvaluation. can i in bed bath's defense, the stock is down 20%, selling 12 times earnings. don't lump that in with splunk. this is not splunk. now you -- you know, splunk? >> i do. i know splunk. only because you mentioned it a number of times. it's a satisfying word to say in a way in a strange way. >> it means going down into the cave. >> it does. >> yeah. the bear cave. >> like that? >> i do. >> all right. overall how should i approach retail at this point? >> case by case my friend. case by case. >> case by case. as opposed to all negative. the rth is such a powerful etf and we don't talk enough about etfs on the show. what's happened you get this retail. watch walmart. now look at this. i'm finally not talking about watching tractor supply. watch walmart. the warren buffet retailer. it has held in very well. it is not my favorite but watch that one. versus family dollar which by the way i wish you were here yesterday, but you had to go to the play. >> i was at the second grade play. >> you did the right thing. i made the plays but later on i didn't and i regret. everyone at home, go to the darn play. >> the play was indecipherable but my daughter was the star. >> she was the star? >> she is a star. >> my daughter is in chorus. starred in field hockey. i just want to point out if you look at these retailers, the biggest ones are not expensive. let's focus on costco for a second. they did -- charitable trust did a great number yesterday. stock was still down. so i don't want -- i find that where the bargains are, rth takes down everything and you look at the ones doing well and buy them. >> did you get a look at this yesterday? came out at about noon, amazon.com's annual letter from mr. bezos. and it is largely taken up talking about retail, of course, with all of their new ventures or the things relatively new, whether it's prime, prime instant video, fire tv, the amazon app store, game studios, spoken word audio, web services, fresh grocery, career choice. did you know they pay people, i spent the last four months studying this company, i did not know they have a pay to quit plan at amazon where once a year they offer to pay their associates to quit. the first year $2,000, then it goes up by $1,000 a year until it reaches $5,000. why would you say you have a plan to offer them a pay to quit? well, the goal is to encourage folks to take a moment and think about what they want in the long run and employees staying somewhere they don't want to be isn't healthy for the company or the employees. >> what's the earnings per share? >> that's not -- >> read the letter, man. just read the letter. bottom line. please. >> read the 97 letter. he said there. >> don't be me. if i can have me i can be me. >> don't high frequency trade me. >> future cash flows forget reported earnings. >> amazon will find a level where it will bottom and the momentum guys will come back after the momentum guys replenish their coffers. the momentum guys are busy trying to figure out how much chipotle to sell to buy zoes kitchen. okay. >> that's going to be a small offering so they're not going to need much. >> it's a giant pyramid. >> it's a pyramid that doesn't have a top. >> no. >> yeah. >> i find that disturbing. >> well, we don't want the market to have a top. maybe that's symbolic no top. >> maybe so. you're right. right now we're talking more about heading down rather than up. up next we do have cramer's mad dash as we count down toward the opening bell on this friday. here's one more look at futures. it does appear we are going to open in the red as you can see right there following yesterday's significant percentage losses for the major averages. more "squawk on the street" straight ahead. straight ahead. here at fidelity, we give you the most free research reports, customizable charts, powerful screening tools, and guaranteed one-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and e-trade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. call or click to open your fidelity account today. at your ford dealer think? they think about tires. and what they've been through lately. polar vortexes, road construction, and gaping potholes. so with all that behind you, you might want to make sure you're safe and in control. ford technicians are ready to find the right tires for your vehicle. get up to $120 in mail-in rebates on four select tires when you use the ford service credit card at the big tire event. see what the ford experts think about your tires. at your ford dealer. ♪ all right. we have 7 minutes before an important opening bell on friday. h&r block. >> h&r block is up nicely in a down day. definitive agreements on the bank. i had mr. cobb on recently and this is a company that has got oodles of cash but hasn't been allowed to buy back stock. remember, it is almost -- it's almost impossible under obama care for you to do your taxes without leaving money on the table. hence that great ad campaign they have. suddenly got momentum from the business and you've got cash coming in and david your know when you get under -- get out of federal reserve oversight it's pretty good news. >> there is an expectation of a significant capital return here now that bank is being sold. they were forced. dodd/frank kind of forced them to have to do it. it's been up for sell, they got it done. the investor base waiting are we going to get a significant return in capital here. i don't think there's been news this morning on that front. >> you could say maybe this is place to go if it's down. yesterday automatic, adp, doing a spinoff, very positive. stock didn't go up because of the market. what i try to tell people not everything should -- is -- goes down at once. some shouldn't go down. h&r block get this at 28, because the market is bad, that's kind of interesting. >> the market has been bad for bioteches. you and i had this conversation many times which is simple. the multiple here is nothing like what it was 15 years ago. >> no. >> nothing. in fact it's cheaper than pharma. >> here's the issue with gilead. go to inesters business daily, the lead story, merck's drug that has tremendous efficacy against help c. here we thought gilead had the market to itself. what i want to say it's a phase two study. wait a second. gilead -- people are saying cramer says buy gilead. gilead will continue to go down to a level to be absurd and then you get your chance. so many iponess this sector, insider trading in this sector every time you feel it's going to get footing a new one comes public. the people that want biotech do not have room. what they do, they short the etf that's biotech and brings down all the stocks. every time you think you're going to get terra firma, etf selling comes in, goes short that and long individuals that they have to because they'll call you and say you took the good one, now eat the bad one. no give without a get. there's something i'm going to teach you. >> thank you, julien broad ski of comcast. no give without a get. >> we'll be watching the biotechs closely. in addition to other beat up stocks. the opening bell just a few minutes away. [ male announcer ] what if a small company became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. you're watching cnbc "squawk on the street" live from the financial capital of the world where the opening bell is set to ring in one minute. couple more ipos ending what has been a very busy week. >> let's kill the market. >> you really -- >> yes. >> supply can kill the market. >> it really can. >> now it doesn't mean it can't bounce back because we'll get a certain valuation. look at cisco. i don't care for cisco. look at intel, hewlett-packard, old tech. >> the supply we're talking about is not -- i know the dollar -- >> if etf selling to hedge against taking these in. if you take a look at some of the best companies, you know work day, very high multiple, they're crushing it. >> right. >> good operating cash flow. some day the insiders will stop selling. >> a very high multiple. all the cloud companies. we keep calling them cloud companies which is a misnomer. it's basic technology and all the stuff they put on top of it, the services they offer you that vary. >> let's talk nontechnology, a company called zoes kitchen, live mediterranean. the issue rit large. >> tell me. >> why is this company coming right now? going to strike when the iron is hot. they have 41% growth. what kind of earnings do they have? >> i don't know. >> nil. >> none. >> right. so this is another one that's just considered a biotech. all right. no earnings but great food. people are saying that opportunity is so great they don't need to show. they do. which means it's not necessarily something you want to avoid but this is not what the market wants right now. >> that's -- >> chipotle down 22. >> we should point out it's mediterranean fast casual. >> okay. good all right. it's very healthy for you. >> over at the nasdaq you may have seen it hbo's vampire series "true blood." >> multiple on that thing is incredible. >> i tried to watch it. another one like "game of thrones" like oh, my god -- >> i never -- >> wow, man. porn. like watching porn with your kids. you thought it was a series so it wouldn't be so bad. >> a little uncomfortable. >> wait until your kids grow up instead of seeing the play, wait until you try to watch popular shows with your kids. disastrous. >> another lesson imparted today. so many. i'm looking at my screen here, jim, and we have as you might expect largely red. >> i'm looking at at&t and exxon and coca-cola. >> all right. >> these are -- i don't know what screen you have. i have mcdonald's up. >> 0.1%. >> walmart. >> the warren buffet. you knew you're in trouble when guys attacking him saying he's passe. the guy is up today. probably having a big week. >> big week. >> big week. >> big week. getting ready for the annual meeting not too far away. >> i have to get there. >> let's go back to the financials because jpmorgan, of course, is down. you've been hearing things about the conference call. unfortunately we're not able to get on. we're going to hear from kayla tausche later in the show. >> i have stephanie link on the conference call. not -- i share some of this with you but it's -- wow. the quarter, they didn't execute well. here's a question for you. >> please. >> when you're busy talking to the attorney general of the united states, okay, which is a very high lofty office we would all like to attain, busy talking to your lawyers every day, trying to figure out whether or not wl someone is going to be under fbi investigation, busy firing people, do you have time to focus on lending, david? do you have time? on credit cards? can you focus. admittedly, obviously it's a big bank. >> it's not as though jamie dimon is going around signing people up for loans. he is the chief executive. there are plenty of people focused on those tasks. so are you saying he's not on people enough? that he's not -- because there's only so many hours in a day -- >> there's distraction. >> let me tell you something. you know who is out there signing up loans. jon stumpf. ever dealt with stumpf? five minutes in the conversation asking you about your mortgage. >> they're very good at cross selling. in fact, i know that from personal experience as well with my mortgage and how i ended up using them for other services. >> me too. i should have disclosed that. they got my mortgage, they called me and said listen, what else would you like to do? sure enough i suddenly want to do something. i think of wells. all my money has been with jpmorgan almost my entire life but i do business with wells. my jpmorgan guys are great. i'm just saying wells is so aggressive in mortgages. my jpmorgan guys are great too. i am not saying that. i'm just saying that wells gets in the door. >> how and your goldman guys are okay? >> really good. >> my storied guys are good. and investor savings guys are good. san tender not so good. >> watch out for bana mention. >> banamex. i'm just saying, that skl wells is aggressive. so is jpmorgan. you let wells in the door they find a way to do more business. >> wells fargo is down, jim, and again more positive quarter. >> but they're terrible. >> but people may be looking at they were helped by the reserve release, a fairly nice tax rate in terms of beneficial and -- >> that's true. i will tell you -- >> net interest margin, come to that. you've been talking about that endlessly and it wasn't great. >> wells fargo not great. no. i flagged that. >> i know. so many notes here. >> a time and a price for everything. all right. jpmorgan should not yield. if it goes to 3.5 i don't care. you buy it. okay. wells fargo, it's a very well run bank but this is again, i'm going to keep focus. i had the father of the vix. vix had a dad. probably didn't know. >> did they do a dna test to make sure? >> paternity? i hadn't thought of that. >> you tell me he's the dad i believe it. >> bank etf getting killed. it really doesn't matter. it -- jon stumpf being brought down with jamie dimon. jamie dimon will pull out of this. probably want to be a buyer of dimon at a certain point. not bob dimon. jamie dimon. not yet. probably want to. >> i was trying to look at the dividend yield. at 2.91. >> you're getting there. remember where the ten-year is. >> i do. >> the greek five-year is. beware of greeks bearing five years. >> $4 billion worth sold by greece yesterday. that was somewhat monumental. >> starting to find this intel. >> back to the high flyers or former ones. facebook, google, amazon, ebay, yahoo! twitter all down. ebay not bad after yesterday. resolution with carl. >> why wasn't the stock down more? the earnings aren't -- maybe someone knows the earnings are getting better. i'm not saying that anyone knows anything. i'm just -- you can make a projection europe which had been bad and korea not so great maybe coming back. people tend to think ebay is just paypal. it's not. >> it's absolutely not. the marketplace is -- >> yeah. >> still an important component of their business. they are not separating out paypal any time soon. >> they're not. we're going to get an oversold rally in the dividend payers. because these -- as long as the tlt which is frankly all you need to really put on your screen if you're playing at home investing at home, i didn't mean to say playing, tlt, shares trust 20 year as long as that goes higher the stock market goes lower. almost a given. really kind of an amazing security. >> i'm watching yahoo! down again another 2.7%. i don't know if we can put up a two week or so on yahoo! they will be reporting numbers next week. people will use it as a see-through on ali baba, don't forget, the last time we're going to get a look at alibaba's through yahoo!'s reporting earnings. they lag by a quarter. the fourth quarter of alibaba but that's important because people are trying to figure out what's that going to be worth. the s 1 not too far away from ali baba when it goes public. >> bought at 1,000, export number bad we don't want to be affiliated with a great -- >> look at that move down. >> extraordinary. >> looks like a good sell. >> i didn't get the exact price. he's going to be furious. >> alibaba the concern sequential growth rate slowing but the last quarter includes the singles day where they sold more stuff in one day than any company ever sold to anybody on the planet. interesting to see and keep an eye on that. >> like a valentine's day for singles. >> yes created by alibaba. >> culturally ignorant towards that day. when you look at that stock yahoo! there is core value. people continue to think listen, yahoo! regular is not doing well. i think that yahoo! regular is a bit of a bank that has a lot of capital to figure it out, as aol was. remember, they figured it out. >> figured it out, got jerry he vine to figure out with him. he did a great deal. >> yeah. >> jerry levin not so much. >> i'm not going to be -- i'm talking about the high flyers, and meantime get the schism of the market not unlike what you saw in april of 2000, literally this week, where you begin to see money gravitate towards coca-cola and bristol miers. >> we'll watch more with bob who joins us from the floor. >> the important thing this morning here is what's going on with the ipo with market. we talked yesterday speculated with a weak market yesterday, we might have trouble pricing some of these ipos. eight of them last night. indeed that's exactly what happened. four of the eight ipos didn't price, including lum bared medical, citi office and paycom software, a hot one, apparently paycom has filed something like an amended s 1 and so it is not priced today. it's not clear if it's going to price. a possibility i guess it could price later on. that's not clear right now. bottom line four of the eight haven't priced. not surprising. you need a strong stock market to have a lot of ipos come out. you need a stock market at your back. that's the most important thing overall. with the markets moving sideways to down the s&p down 2% in the last month it's getting tougher here. let's talk about what is out, zoe kitchen, nice ground behind me. lot of children walking around here. fast casual the hot space, zoes kitchen priced at $15, upwardly advised. revise it upward, there's a winner right now. don't have any indications but that should open in the next 15 minutes. reit farmland partners did price at 13 -- priced at $14 low end of range it opened at $13.75. bit below the price here. we haven't had enable partners open, nat gas and crude oil limited partnership. they price 25 million shares at $20. that was the middle of the range. 19 to 21. you can see sort of not bad, but not great on the four that priced. let's talk about the markets and whether or not there's a lot of rotation going on. we're obsessed with biotech and obsessed with the three dozen internet stocks out there. let's talk about dividend paying stocks. want to show you the rotation going on here. put up the full screen. utilities, telecom have been hot. dividend paying stocks like the h tv, up 2%. reits have been up on the month. not just dividend paying stocks. i pointed out yesterday energy stocks continuing to hold up well. slumbershay and eog and apatchically are all 4, 5, 6% in the last month. and it's even more than that. i pointed out yesterday david not only is caterpillar having a great year but the old-school tech names, microsoft, intel, ibm, cisco, all of them are up in the last month. nice rotation going on in that space. >> okay. guys we're opening here, not yet here on zoes kitchen. back to you. >> great analysis by bob. >> yeah. >> exactly what's happening in the market and people have to stay focused and recognize there's two markets. the undervalued and overvalued market. >> ibm up 4% this year. >> warren buffet. >> cisco. >> oracle. hewlett-packard. 17.5%. >> hewlett-packard is putting up smoking numbers. >> i'm pointing out the market is making sense. the part that is -- everything that is high flyer is being thrown away and some of those high flyers have great earnings and some are just -- >> fairly low multiples. >> thank you, david. >> you're welcome, jim. >> you're a calm -- >> 20 to 23. >> for zoes. >> starting to get up there the valuation of chipotle for heaven's sake. >> yeah. >> let's get to the bond pits and rick santelli joins us from the cme group in chicago. rick? >> it continues to be wild times in the treasury complex. that's for sure. even a hotter than expected surprisingly hotter than expected ppi didn't do much for yields. yes, they had their little kind of token rises they should but the overwhelming issue as previous qe have come off just to name one area to pay attention to we see that interest rates have a tendency to move lower. why? the equity markets move lower and the only tiny trade then becomes the treasury market. two day of fives, yes, look at yesterdays lows. yields are lower. look at the 30s, how much that two day gives you information on the ongoing holding of major flattening in the yield curve and many traders debate what it means. many believe it means even though we are growing relative to the rest of the world we are not growing to make the long end happy. that's why rates are moving down. not quite enough. maybe our growth factor should be greater. now as we look at fives, tens and 30s on bigger charts, you know, 5s we're comping back to about mid march -- excuse me mid may. ten-year in particular, the february 3rd low around 2.57 jumps out at you. keep in mind tens are down about a dozen basis points on the week. fives are down 14 basis points on the week. as you continue to look at these charts you want to pay attention to the nikkei especially. not only are we under 14,000 but look at the year to date chart. not far from really extending the comp and the dollar/yen, similar to treasuries, back to you david and jim cramer. >> all right. thank you very much. >> rick has been spot on with bonds. i mean the craziness is being explained. people should stay focused. >> new headlines from the conference call going on with jpmorgan senior management. kayla tausche has been on that call with including, of course, mr. dimon. kayla? >> hey, david. you know, a lot of defensiveness from jpmorgan executives this morning on what is a really recognizable miss for a company that has been posting record earnings until what was third quarter of last year. one of the main questions is about the credit quality because the divergence of jpmorgan's credit quality and wells fargo is something the market is talking about this morning. we know for the last several quarters jpmorgan has had this huge stash of loan loss reserves and been releasing that in pretty large fashion so to see this quarter only $450 million of reserves when that was normally something that would get their epps above the expectations that was concerning. we saw wells fargo relieve releases tick up recognizebly. that helped wells there. also questions about michael lewis' book "flash boys" getting a lot of headlines. that book has just come out very recently during these banks' quiet period. they're expected to be answering for themselves on whether they do believe the market is rigged. now jpmorgan ceo jamie dimon on the media call refused to comment on whether the market is rigged. on the analyst call he decided to point out in the book jpmorgan was one of the good guys on that character front. it's an interesting situation today to see these stocks diverging so much, to see the loan portfolios diverging so much and where the growth is coming from here and the call is still going on right now so we'll have some more headlines in the next hour or so. >> thanks, kayla. >> we bounced off 4007. that's why things went up in the nasdaq. up 4007. did it quickly. want to point out before we go away, technicals are getting charged when the fundamentals are a loss, right. people revert to the technicals. i don't like that because the technicals tend to be good until they're bad. >> all right. what do we got next? you may ask that. irwin simon, what does they think about the big bet walmart is making on organic foods? we'll talk to him after the break. ♪ [ cellphones beeping ] ♪ [ cellphone rings ] hello? 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[ bagpipes play ] make it happen with fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. female announcer: it's sleep train's interest free for 3 event. get three years interest-free financing on beautyrest black, stearns & foster, serta icomfort; even tempur-pedic. plus, get free delivery, and sleep train's 100-day low price guarantee. you'll never find an interest rate lower than sleep train's interest free for 3 event, on now. ♪ sleep train ♪ ♪ your ticket to a better night's sleep ♪ welcome back to "squawk on the street." the april preliminary read for university of michigan sentiment survey sourced to 82.6. that is the best read. well the best read since july of last year. that read at 85.1 was the best since july of 0 7. caution this is preliminary. we can come back in 2 1/2 weeks and adjust it. but nonetheless, it is a strong read on sentiment and it comes at a time where any good news may help. kind of the downslide in stocks it's given a rise to a lot of buying in treasuries. david, back to you. >> all right. we'll see whether that lends more of a bid to the market. >> tlt reversed down. >> stop for stock trading. next stock $328 billion market value. has a new ceo. >> microsoft. this is going to be the key to this market the next level. microsoft with cisco and intel all yield well. if these stocks keep going up the high flyers will keep going down. beware you need to see a reversion, that the microsoft cisco intel stop going higher and the high flyers go up and i don't know if you're going to see that. that's why i think microsoft as long as it goes higher the money will fly out of the high flyers. but there's going to be a stand mate here today. it's just early. keep pointing out the stand is being made too early if you think we can bounce. friday afternoon can be a treacherous point. wait for that. >> we'll wait for "mad money" where you'll wrap up what did happen today and also have some guests. what do we have coming up? >> a company i think is going to come public and stay close to it. njoy. i don't know if you've ever smoked. i never smoked. this is smokeless tobacco. if the fda makes this a gateway product, meaning that they don't do any legislation, it is -- doesn't do any rules it's going to go higher. if they decide it is a gateway product and not going to have it and rule against electronic cigarettes then njoy not a good situation. >> no. have a great weekend, buddy. >> great to see you. great that you went to the play yesterday. >> i went. i missed the news but i was at the play. >> don't screw it up. go to the play. >> we got terry lundgren coming up very soon. macy's ceo lots to talk about. stay with us. 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[ male announcer ] open your eyes... to the 6-cylinder, 8-speed lexus gs. with more standard horsepower than any of its german competitors. this is a wake-up call. ♪ this is a wake-up call. ♪ i ♪ and i got the tools ira ♪ to do it my way ♪ i got a lock on equities ♪ that's why i'm type e ♪ ♪ that's why i'm tyyyyype eeeee, ♪ ♪ i can do it all from my mobile phone ♪ ♪ that's why i'm tyyyyype eeeee, ♪ ♪ if i need some help i'm not alone ♪ ♪ we're all tyyyyype eeeee, ♪ ♪ we've got a place that we call home ♪ ♪ we're all type e ♪ can you start tomorrow? yes sir. alright. let's share the news tomorrow. today we failrly busy. tomorrow we're booked solid. we close on the house tomorrow. i want one of these opened up. because tomorow we go live... it's a day full of promise. and often, that day arrives by train. big day today? even bigger one tomorrow. when csx trains move forward, so does the rest of the economy. csx. how tomorrow moves. stops with the markets this friday morning, stocks bouncing but still in the red. the nasdaq flirting with its worst week since october 2012. jim stewart will be with us at post nine to sort through the rubble. >> macy's ceo terry lundgren joins us for an interview. his thoughts on the state of traditional retail and on the consumer. >> lions gate hit series "mad men" back this weekend and not the only hit the company has in its lineup. the vice chairman will be with us with all the details on "mad men's" premier and the movies in the pipeline. >> we start with the markets and anp ipo that has opened, zoes kitchen, fast casual restaurant opening with a bang. shares up almost $10 at the open, 66%. we'll be speaking with the ceo a little later. first few trades looking hot in an otherwise down market. markets are lower again today. they've recovered some of the earlier losses but we're following that sell-off yesterday. momentum stocks like tesla and netflix and facebook which boosted the markets in the past are having a meltdown you could call it. dow, nasdaq, s&p, still red, dow down about 77 points at this hour. let's bring in jim stewart with "the new york times" and a pulitzer prize winner. written about the crash in the '80s, '90s 2007. >> it doesn't feel like 2007 or 2000 but clearly a correction taking shape and i think that's incredibly healthy. i'm relieved. we have gone a long time without a correction. when you go this long it typically never ends well. stocks do not exist in a vacuum. they depend on earnings. if you look at the recent multiples, these things coming back to earth now they were off the charts. >> in fact, specifically, it's been since 2011 during the european debt crisis when we last saw u.s. stocks correct. why it's getting attention the technology bust we're seeing. not small 10% correction type moves, 20, 30%. >> i was looking at some of these yesterday. down in the 25 to 30% range. these are very highly visible companies that everybody has been talking about the last two years. they're all on the radar screen. people say oh, my god these things are down, it's bad. but if you look at the value sector it's not bad and i talked to value investors this week they're finding attractive bargains finally. >> go ahead. >> it's the momentum guys who have been getting hurt. >> yeah. >> and/or a lot of hedge funds invested in telecom, media, technology, tmt where they've had to take down their gross exposure. but people want to try to draw analogies to 2000 and i don't know if i see it, jim. >> no. >> we've had this conversation previously. there are multiples to earnings for many of the companies. there is significant revenue growth from many of the companies and they're not going away. >> absolutely. we're not seeing the multiples we saw in 2000. also 2000 came after about, what, eight to ten years of relatively uninterrupted rally. it's not 2000. it's not 2007 either. 2007 multiples are better but the fundamentals were deteriorating so fast. there's no real economic reason for this correction. it was simply stocks had gotten too expensive. >> others would disagree. deutsch bank has a note out today where he traces this back to the fed withdrawing its liquidity and if you go back to march 9th, 2009, technology is up 250%, biotech is 284%. the broader market, only 177. so it's actually those sectors that have done really well on qe that are now suffering and that is potentially a bigger wake-up call if the fed is going to end that money printing by the end of the year, isn't it? >> that's a reasonable point and i think qe certainly has pushed people into risk assets including stocks and out of fixed income, but at the same time those things have been going up, earnings have been going up. we've had tremendous growth in earnings over the same period of time. i don't think the multiples have really gotten that far off the charts except in this cluster of the glamour fast growth stories. >> suppress the fear. if it suppressed the fear and expanded the multiple that might have happened. >> the vix has been rather low, dangerously low. there is i think that's a fair point. but i don't think it's wildly out. >> watching the vix it took a 15% move higher yesterday. you look at the psychological impact of some of these things and that's what has people worried. you mentioned they're glamorous stocks, the growth stocks the public is aware of the facebook and twitters of the world when the king ipo. >> i know. >> dropped 16% on its debut and when michael lewis is telling the world on "60 minutes" the stock market is rigged. the complements of factors right now isn't good. the retailer investor was starting to come back. >> i think the psychological factors will pass. sounds boring but the fundamentals eventually always reassert themselves. and i think we're seeing that happen now and as i said in the beginning this is very healthy. >> let's talk about the book. >> yes. >> finally a lot of people have been waiting for you to review the book that's been at the center of that storm. michael lewis' "flash boys" i hear it's not very complimentary. >> should be on line today on "the new york times" side. i think michael is a great writer, love his books. this was disappointing to me. number one, there's really no news in the book. the news is michael lewis discovered high frequency trading. scott patterson wrote all of this and more in his 2012 book "dark pools." number two it's not a fair book. i hope my review is more fair to this book than the people that get slammed. goldman sachs gets slammed, "the wall street journal" gets slammed for not picking this up. the sec gets slammed. no one gets to tell their side of the story. one thing i've learned as a reporter every story gets better when you hear the other side. >> the thing is it's having a real effect. the sec is looking whether it needs to shift to these dark pools. asset managers may set up their own trading platforms. this book may really change the landscape into yes. and i -- i applaud that. i think that's great. these things do need investigations. they all say they were investigating but were they really? good for michael lewis, able to shine a spotlight on this. but it says a lot about our culture that something like this, the celebrity factor, i think is what brought it into the public attention and that's been good in this case. but as a book, as journalism, i found it disappointing. >> looking forward to your review out this weekend in the "times". >> yes. >> thanks. >> book review. >> book review, yes. >> that's jim stewart, common sense. >> earnings season has kicked off big time. two banks out with their earnings, wells fargo posted better than expected first-quarter profits, but jpmorgan is the real focus. the stock in negative territory as it misses, hurt by weak trading revenue. kayla tausche has been on a number of calls or listening to a number of calls with senior executives and joins us now. what's the take away? >> it's really a tale of two banks. you can look at the stock prices of each of these to get that picture. jpmorgan down about 3%. wells fargo managing to be up in this market. at jpmorgan which is really the focus today, nearly every unit saw a profit decrease from a year ago. we've been talking all morning how trading revenues were extremely soft and mortgages were bad too and how a severe slow down here affected them. i want you to take a look at this chart. how loans were growing over the last quarter at jpmorgan. this is the worrisome fact, loan growth appears to be so mixed that with an improving economy and a backdrop of such for the banking industry we're not seeing more growth at the consumer and the corporate level this quarter. now if you look at wells there's a lot to like. you have commercial and consumer loans up slightly there, balancing out some of the weakness the company had in wholesale banking and saw 42% improvement in credit losses and a positive outlook for the rest of the year. that's why that stock is doing well. mortgage banking is a core business for both. the first quarter is usually fairly quiet in mortgages. they do ramp up in the spring but conventional wisdom would tell you since wells is the nation's largest mortgage provider white get hurt even -- it would get hurt even worse by the slowdown. wall street is looking at a couple numbers and that is the pipeline which is actually up and across jpmorgan and wells fargo you see originations which is one of the barometers down equally from last quarter but at wells you look at applications in the pipeline and they have been able to hold up relatively healthy. a lot of people are asking why. take a look at this reuters story from early february. wells fargo edges back into subprime as the u.s. mortgage market thaws. now originating markets above 600 credit scores than the previous limit of 640. starting to dip its toe back into what it's calling another chance mortgages. for several quarters we wondered why wells fargo has had a surplus of capital on its books. by every single measure when you started to see them go back into this market you understand why. that's going to be a huge question for the company on the conference call when it gets under way is how exactly is wells fargo keeping this pipeline healthy and what does it mean for the broader economy there. we'll have that for you as soon as we get more headlines. >> join us in about 20 minutes with more. we'll see you later in the program. >> up next on the program macy's ceo terry lundgren joins us live for an exclusive interview. you don't want to miss about what he has to say about retails. zoes popping on its ipo this morning. the casual dining restaurant priced at 15, currently trading at 24. the ceo will join us live for a first interview after going public. "squawk on the street" will be right back. right back. who do you work for? your boss? yourself? your parents? your family? at baird, what matters most to you... matters most to us. as an employee owned firm, our financial advisors have the freedom and resources to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird. if you have a business idea, we have a personalized legal solution that's right for you. with easy step-by-step guidance, we're here to help you turn your dream into a reality. start your business today with legalzoom. we're here to help you turn your dream into a reality. bulldog: i can't wait to get to imattress discounters good and early for the tempur-pedic bonus event. i'll have first pick from the huge selection of tempur-pedic mattresses. then, i'll get to choose $300 in pillows, sheets, and other free gifts. on top of that, up to 48 months interest-free financing. it's a beautiful day for mattress discounters' tempur-pedic bonus event. mmm, some alarm clock you turned out to be. ♪ mattress discounters welcome back to "squawk on the street" where we are watching the retailers taking a hit today. the xrt, the etf that tracks the retailers down 1.5%. leading the way down is the gap, that stock is down more than 3.5% after reporting monthly sales falling 7% in march and reiterating guidance below estimates. the gap is the top loser on the s&p. simon? >> thank you, sheila. coincidentally the biggest players in the retail space are coming together in arizona to talk everything from the consumer to the latest trends in the industry. courtney reagan is walking with the giants and brings us a special guest. good morning. >> good morning to you, simon. i am here in tucson, arizona, joined by terry lundgren, ceo of macy's. we're here because this is the global retailing conference and it's supported by the jerry lundgren centering of retailing at the university of arizona. you're here to recruit talent. the new promotion of jeff is that part of the success plan for macy's. >> he's one of the best merchants in the industry. he brings a fresh new perspective and look i've got a great talented team and say the reason we've been as successful as we have for the last four years as a team and jeff is one of the key guys. what this is, is a signal he's take on an big role, big responsibility. he covers merchandising, dotcom, he covers marketing and he covers now our private brand development so the title had to go along with that broad expansive role. that's what it is. i'm going to be around for a while so i love what i do too much. jeff is a key partner. >> you had a birthday, looking great, of course we had to ask, you've been talking about the changes that are to come for macy's and in retail in general here. general growth partners has about 1100 malls and told jpmorgan 400 are b or b minus and will be consolidated. what does that mean for macy's when the malls smaller? >> all the mall developers and myself and some of the key retailers are coming together and trying to sort this out. because we have to figure out what's going to be like for the next ten years. i think they've done great job for the top 100 malls in the country that are powerful and drawing the traffic in. but ultimately we've got to think about what should the size for the footprint look like, the content be, new ideas, should there be more entertainment, more movie theaters, restaurants, a different mix than what we have today. at least we're all coming together to talk through those very things and i'm happy and i think by the way the general growth is very active in this role so i do think there will be changes in the next several years. >> i think sara has a question? >> yeah. terry, when i see you sort of makes me nostalgic from cincinnati, i remember lazarus before macy's changed all over. i miss those department stores. when you look at the competitive landscape out there, the jc penneys, the sears, you have been outperforming but what is the future of the department store in things are changing. >> well, the good news is that we took -- i took this on about four years ago and we changed 400 department stores across the country to the macy's name and did it in one day as a matter of fact. that was a bit risky on our part. it allowed us to become a national retailer or department store and we have a unique space in that regard. the largest seller of almost every brand you know of and have heard of. i think to have that and the localization efforts made us unique. we always say, you know, we don't need the consumer to spend more money, just with us. so far for the last four years we've picked up almost $4.5 billion on same-store sales. seems to be working. at least in our case we feel great about the strategy and the future of our company. >> so weather has been tough for a lot of retailers. it's been a tough year here. have you began to see the customer traffic pick up, sales pick up, as the weather has turned maybe not here in tucson but in general? >> definitely. listen, no question about it. i mean, the weather was brutal. we live in new york but even around the country in the midwest and different parts of the country, i mean it was really brutal and january, february and early parts of march. but as soon as it started to turp, the weather started to get better and we're now easter it's a big easter shift and easter end of march now into april, those do matter in the apparel business and industry and foot ware categories as well. so definitely saw a change in the trend once that happened. and we also saw in the southern tier between california and florida markets, texas markets those businesses were significantly better than the northern business. so we feel good about what's coming but it was definitely for i think most retailers definitely were impacted by weather. >> i think simon has a question. >> terry, good morning to you. gap is under some pressure today. same-store sales as you're probably aware. not what the market hoped for. clearly problems still at sears. major problems at sears and jcp is attempting the turnaround. as you look outside your own business what is working now and when you see a problem typically what does it stem from? >> well, first of all, simon, you know, what we do so -- i think so well is we really understand local markets. we have 800 macy locations across the country. we're in tucson today. i can tell you what the customers want in this particular market is so incredibly different than what they want in harold square in new york city or what they want in minneapolis. you know, so i think our ability to have local talent on the ground who are former merchants and marketers guiding us on the local assortments has meant a gigantic difference in our overall ability to execute at a local level. i really think that's a big difference. >> and you and i have spoken about that before and the power of the bayers and regionalization of the buyers. when you look at a gap, are you saying structurally it has problems or if you look at what importantly they try to do with jc penney where they try to drag the market across the country or one direction is that again the structural era of your view? >> i can't tell you, simon. i have not analyzed those businesses and i really can't tell you the inside story about what's behind their numbers and their performance. i can only tell you what we've done. i know for sure is a different organization structure than either of those companies that you mentioned. >> so just to kind of wrap it up and bring it home, you're, of course, watching what's happening at macy's but bloomingdale's too, perhaps a different customer, some crossover. what are you seeing the consumers feeling how their confidence is right now? >> i think it was definitely slow. first of all we had a great year, we had the fourth year in a row with the fantastic performance. our year ended the end of january and while we -- it was our smallest increase on the same store sale basis of the four years, up 2.8%, we picked up more market share last year. so i think what we're seeing is that the overall market was not good but our growth with market share is -- has continued to improve and so i think what that tells us is that we're on the right track and that while the consumer is definitely, you know, slow and consumer confidence is low at the beginning of the season, as it starts to improve and i'm pretty confident it's going to improve from here, the current trends i do believe that will pick up perhaps even more market share than we have in the past. >> i certainly hope that the consumer confidence improves across the board and for macy's. thanks for joining us and dealing with all the bugs. >> sorry about the bugs. >> good luck with the rest of the conference. back to you guys at the new york stock exchange. >> it's a pretty shot, courtney. thanks again, terry, for joining us. scott cohen has breaking news right now on detroit. scott? >> according to detroit's two newspapers the news and free press reporting from the courthouse the judge in the detroit bankruptcy has approved a major deal, an $85 million settlement with ubs and bank of america over some very controversial swaps contracts that many believed plunged the city into bankruptcy in the first place. the city would have had to pay $288 million to terminate these swap deals which many contended were illegal in the first place. under this deal the banks will get just $85 million and in turn, they will support the city's reorganization plan. that is key. all the emergency manager kevyn orr needs is a vote or two and this -- this way he will get it to essentially threaten the unions with a cram down of his reorganization if they don't go along with it. it's a major step forward in the detroit bankruptcy. the banks taking a hair cut but if they had not done this, they might have faced some lengthy litigation and the bankruptcy, reorganization in this largest municipal bankruptcy in u.s. history would have gone on for much much longer. a major step forward in the detroit bankruptcy we'll continue to bring you deal tails as we get them. >> thank you very much, scott coenh coenhen. a deal involving alibaba, a giant that is in the not-too-distant future going to be a public company, public here at the nyse hasn't filed yet but what it has done announced a deal to acquire autonavi leading provider of digital map content and navigation based solutions in china. the overall price about $1.5 billion. now alibaba owned roughly i think it's 28% as i page through the press release here of the company. but will be paying an additional 525 in cash for ordinary share or u.s. 21 and share for american depository share. that price representing a premium of 27% of the company's closing price. 1654 is what it was. you just saw the performance there of the ads. that was on the 7th of february. the date that the company had announced it received a going private proposal from alibaba. again this is something -- this is something that has been in the works and perhaps expected by the market. but interesting as alibaba continues to make acquisitions prior to its large initial public offering. rumors it will be coming to the nyse. what i can tell you a lot of bankers involved here. of course they've been having their meetings in china recently and they will be filing the s 1 let's call it in the not-too-distant future. perhaps we see this company public by late summer or september. >> despite the market conditions. >> august september is a ways away from now. >> i guess the ipo outlook has changed. >> we will get an interesting view into their business when we get yahoo!'s results. >> good point. kaf david, another deal. up next, zoes kitchen is trading as a public company for the first time speaking of ipos. there's the stock popping in its debut. the ceo is here on the floor. he'll be joining us after the break to talk about the growth in zoes kitchen. fast casual restaurants across the southern part of the country. country. today is friday today, we greet you. treat you. care for you. today, you can come to cleveland clinic for anything, everything or just to get that "thing" checked out. big, small, and yes, the best heart care in the nation. it's here everyday, for everyone. that's the power the power, that's the power of today. cleveland clinic. call today, for an appointment today. ♪ aflac, aflac, aflac! ♪ [ both sigh ] ♪ ugh! ♪ you told me he was good, dude. yeah he stinks at golf. but he was great at getting my claim paid fast. how fast? 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[ male announcer ] find out how fast aflac can pay you i'm bethand i'm michelle. and we own the paper cottage. it's a stationery and gifts store. anything we purchase for the paper cottage goes on our ink card. so you can manage your business expenses and access them online instantly with the game changing app from ink. we didn't get into business to spend time managing receipts, that's why we have ink. we like being in business because we like being creative, we like interacting with people. so you have time to focus on the things you love. ink from chase. so you can. with all the opinions about stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. shares of the fast casual restaurant zoes kitchen have started trading, priced at 15 and have let at the open this morning one of a number of ipos we have at the new york stock exchange. it priced at the top of its range and joining us for a first on cnbc interview is kevin miles, the ceo of zoes kitchen. good morning into good morning. >> no one has bought a tower of food like this. >> we have a food pyramid. >> like to be the first. >> concerned about the fish but let's leave that for the moment. what were you telling people during the building process. i assume it's a growth argument. >> we're a growth concept, incredibly well received across the u.s. the markets we're in today. >> southern states. >> primarily. kind of texas through up to philly today and that's where we're growing. we're a mediterranean concept. better for you options. fresh fish, lean proteins, whole grains, lean protein, produce, grilling and baking. >> yeah. those of us in new york aren't as familiar with the change chain. any plans to move out east? >> we continue to move east. we're in philadelphia and kind of southern new jersey and hopefully one day up this direction. >> 111 restaurants in 15 states. i think you're adding 28 to 30 during the course of this year. do you own the restaurants or franchises? >> we own primarily all. a couple franchisees but we're a company model. >> why not? we're seeing that franchising has been a little -- make morse economic sense for the bigger guys? >> we have great franchise partners today but continue to feel like we can grow our growth and we're excited about the model we're building. >> brentwood associates have a 71% stake, goes down to 46. any of the proceeds for your own corporate use. >> all the initial shares are primarily. they've been a fantastic partner to us. our proceeds are to help spun our growth into the future. >> the big news this week from the retail perspective was that walmart is going to increase the number of organic lines that it carries and it says in major discount where other people are selling it at the moment. what does that mean for you? customer tastes are changing but the competition is getting hotter. they in some senses are a direct competitor. >> they're from a grosser competitor standpoint. we're wholesome fresh quality foods, fresh grains, fresh produce. >> it is a crowded space this fast casual and you have big players in there with chipotle and panera. what is your value proposition? >> again, i think we're unique in the mediterranean space. wholesome mediterranean, not greek, not your traditional fa laughle. again the wholesome lean proteins. >> you have good humus. what's special about the humus? that it's hand made in the back of our kitchens every day across the country. we make everything we bring in our kitchens fresh. >> is that a hard model to have a every day fresh. >> we keep it simple and fresh. >> we're trying to get a read on the consumer to see how solid we are and if we're going. i appreciate your expanding but what is the general read on stores open a while? >> they're doing fantastic. it's really resonating with customers across the u.s. better for you option. it's quite frankly not out there. >> average bill ten bucks? >> little south of ten dollars. >> good to meet you. >> thank you so much. >> kevin miles, the coo of zoes kitchen. >> with a food pyramid in the stock exchange. we're going to dive into the bank earnings that we got a little earlier today. wells fargo, jpmorgan on the move. we'll talk to an analyst about that. also we'll talk to morgan stanley's head of mergers and acquisitions, robert kindher, time warner's banker live at post nine with david in a minute. minute. in 1953. afghanistan, in 2009. orbiting the moon in 1971. 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[ male announcer ] when fixed income experts... ♪ ...work with equity experts... ♪ ...who work with regional experts... ♪ ...who work with portfolio management experts, that's when expertise happens. mfs. because there is no expertise without collaboration. mfs. hi, are we still on for tomorrow? tomorrow. quick look at the weather. nice day, beautiful tomorrow. tomorrow is full of promise. we can come back tomorrrow. and we promise to keep it that way. driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. what a day. can't wait til tomorrow. mergers and acquisitions, defending against activism, we've had a little activity certainly in activism, somewhat in mergers and acquisitions. my next guest has been at the heart of a lot of the biggest deals including the sale of time warner cable to our parent company comcast. joining me at post nine robert kindler vice chairman and global head i love saying that, global head of m and a at morgan stanley. one of those great made up titles. >> it's a great title. >> a great title, it is. like gary kaminsky's vice chairman title. talk about time warner cable, they were in front of mr. cohen and the gang in front of the house this week but there are continued rumblings about charter. you were dealing with and defending and negotiating for time warner cable for both of these parties, charter and liberty and comcast. do you think the charter is really trying to perhaps consider mounting another bid? >> well, it's obviously hard to know what charter is doing. it's hard to understand what charter is doing. >> why do you say that? >> the market has completely ignored it. if you look at where the stocks are trading, time warner cable and comcast, time warner cable trading based on the deal. so whatever they may be thinking, whatever the strategy may be, it's just not getting any traction in the market. >> do you think there's a realistic ambition or hope on the part of some investors that could prove to be fruitful? i mean how would charter go about doing it? you're a tactician. >> i'm a tactician. >> advisie ining charter what w you tell them? >> as with all things we have a signed merger agreement, a vote coming up and charters what they had on the table was so far off of what was signed up, so look, as i said, i can't really speculate what these guys are thinking about but it's absolutely clear no one is paying any attention to it. >> other than you. >> soliciting votes against, other than me. it does come back to the idea that even if they were to do something, of course comcast could change the consideration, because it is notable that comcast chose to use all stock. they've been criticized for that. i know you were not advising comcast. others were. but why did comcast choose not to use some cash in this deal which would have been more creative for them? >> look, comcast has already said that if the deal does happen they're going to buy back a lot of the stock. they can sin threatically get to the same way. >> they could borrow at 2%. come on, so much more -- >> from the time warner cable perspective. >> please, all stock deal you goat ride the upside of the deal. these guys are smart guys at comcast and think it's a very good deal. >> all stock. >> they can get to the same economics by borrowing and repurchasing. >> you believe that? >> sure. >> all stock no breakup fee. >> breakup fees as you look, historically, if you look at breakup fees, they actually are something of a red flag that people are concerned about getting deals done. they don't really compensate anyone for anything. so the fact is that doing it without breakup fees we think this strategically makes sense and think it's going to get done. >> no sweat from both companies in terms of -- >> i certainly never sweat. >> i've never seen you. you've been busy of course. cross boarder has been a certainly key characteristic of what we've seen, san torre beam comes to mind, another of other deals, tax inversions, they're all over the place. >> i think it's a big part of the market. if you look at this year so far over 40% has been gross border. last year you saw deals like we advised shine way in buying smithfield, suntori in the beam deal. an interesting deal is tokyo electron, we advised tokyo electron in merging with aplied materials. what's interesting about these deals you can issue stock now anywhere in the world without fear that it's going to flow back. same thing happens -- >> why is that? >> people used to wonder, worry, if you issued stock -- >> it all comes back here, swaps the common here and the stock comes down. >> doesn't happen anymore. we're in a global market. they all have different profits to invest in. this is important. i think this is absolutely a trend that's going to continue. >> all right. tokyo electron it's interesting you mention that and applied materials get together and then a taxpayer i think the netherlands -- >> netherlands. >> tax inversions come on. >> we did one of the first ones. these transactions are going to continue. there's been proposals in congress to end them. i think it's doubtful it gets adopted. the fear of that happening is going to push more people to do them this year. >> time for some predictions. >> right. >> you come on, you join us a couple times a year at least. you seem to be positive at the end of last year if i recall when we did an interview for this year. i would say this year, you also got double counting, the numbers look better than they are. doesn't feel that good to me. is it going to get better? >> you're right. it's too early to call a great year but it is a very good start. you know, volumes were up a lot. deal count only up a little bit. it's a bit early to start. what i think is the most notable thing is that investors are telling companies we want you to do deals. and this whole wave of stock buybacks which i've always been skeptical about anyway, the concept you can make a company more valuable buying back stock is not really -- >> increase earnings per share and your return capital to shareholders because you don't have a better use for it. >> that's the problem is that if people are just doing buybacks now, there's place for them for sure, if people really have excess capital and don't need it for the business, but what the investors really want is for people to be -- doing deals and getting growth. >> all right. so that conversation you have sometimes in the board room or when you're flying all over the place making calls to the executives saying hey is it a different conversation than you were having a couple years ago and the willingness to say i'm not going to do the buyback i'm going to deploy capital. >> people were skittish, i'll invest in my own stock. by the way, investors were for want of a better word letting them get away with it, were fine with that. now the tide has turned. people who are doing deals their stock is getting rewarded a lot. i think that's where we are now. again i've always been skeptical on buybacks and every now dividends are getting far more for your buck than buybacks are. >> as always thank you for your insights. >> thanks a lot. >> rob kindler. global head of m and a at morgan stanley. up next we have the final season of the hit series "mad men" premiering this weekend. one of lions gate most successful franchises benefiting from "the hunger games" and "the divergent" trilogies. michael burns will join us live, on all of that when we come back after this. after this. beautiful day in baltimore where most people probably know that geico could save them money on car insurance, right? 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"mad men" returns to amc for its seventh and final season with the premier episode set to air this sunday night "mad men" one of lionsgate most successful franchises. the company's tv businesses encompasses 34 television series on 24 networks. michael burns, vice chairman of lionsgate and joining us for our first on cnbc interview. good to see you again. >> nice to see you. >> so what are we, in the '70s yet? how is don? he was left in bad shape at the end of last season. >> i think you're going to see a continuation of don draper having as many ups and downs as the markets of late. >> volatile period for don draper. we won't ask you for any spoilers but in terms of the business proposition, obviously "mad men" has been very successful for you in terms of what it's brought in, in terms of fees from netflix and others. what's your next big one? how much pressure do you have to get the next "mad men" on? >> i'll first say, matt winer created a fantastic show and we couldn't have better partners than amc. as you know we're breaking the last season into two. we feel that we have as you mentioned, we have 34 shows on the air, we're excited about orange is the new black, if you haven't seen that, a hit show for netflix and we like the ratings trajectory of "nashville" on abc, but it's hard to pick a favorite child. >> from an economic point of view, working with netflix, for instance, on original programming versus an amc, is that a new model? is that something you're going to explore to try to do more of? >> we are. we actually have a new show with hulu called "dead beat" as each one of the new platforms emerges around the globe we're trying to create content for it. again it's a good time to be a content creator and distributors. >> michael, i was trying to work out how much "hunger games catching fire" the first movie has grossed. you're getting on for a billion dollars now, aren't you? >> hi, simon. we feel very good about the -- again, the trajectory of the franchises. "divergent" about $116 million right now, should be close to call it $150 million domestic, we think it will follow a very similar path to "twilight" and the first "twilight" the fifth compared to the first "twilight" did approximately twice the worldwide business so we feel good about that. i'm also happy to announce today that we are officially going to have the "divergent" three book series dividing that into four movies so alee gent, the third and final book will be two movies. >> you changed the comparison i started with. as far as "the hunger games" first film that is getting towards a billion dollars. some might say divergent was a little dye disappointing against that major. would that be fair comment? >> not disappointing for us. not compared to where we had it in our model. my sense is that again, it's one of the highest grossing movies opening this year so far. "hunger games" global phenomenom, but give it some time. you take a look at how these things build over time. "catching fire," we did catch lightning in a bottle with that one but we feel very good about the franchise of "divergent" going forward. we think we have franchises with "now you see me" shoot a second one of those "the expendables" goes on and on. "gods of egypt," eric has never been more enthusiastic than that. we're shooting that in australia right now. again we're not disappointed with a box office result like we have for "divergent". >> david faber. as you point out, you're good at sourcing literary content and bringing it to the screen whether a big one or a small one. i do wonder you mentioned, of course, the demand for content but there's an awful lot of companies out there who are supplying it these days. do you see that you're going to continue to have the kind of pricing power you have in the past? >> i think we're in a unique position, david. if you take a look at what we have, what we've built, for example, in the young adult space and the fact that we have so many successful shows, we have almost 400 million facebook fans alone on facebook with our intellectual property. that gives us a very competitive advantage to be able to reach out and touch those consumers. and also, we've got a track record whether it be the horror space or young adult space or some tricky movies to market, we've got quite a track record so we're seeing, i would say, the vast majority of all the great material out there. >> you've done an incredible job building the company. there's no doubt about that. investors obviously have to be happy with it over a period of time, the stock lately has been getting beat up. but it always comes into a conversation about consolidation, about whether lionsgate is big enough still to continue to compete where we may have a world where there are fewer and fewer distributors, for example. just give me your strategic sense in terms of the willingness and/or whether at some point this is a company that does have to consider consolidation? >> well, the company is basically the stock price is where it was about a year ago and a lot of great things have happened since then. whether it's new franchises, whether it is cutting our debt cost in half, paying off $350 million in debt, we've done a lot of great things. our settlement rate with the theaters is better. we've got a bunch of shows picked up. movies are working. good time to be in but is there going to be consolidation? i think there will always be consolidation, because everyone is looking for growth. we've been growing at compounded 20% a year for the last years since we arrived. and then you get thrown into a growth bucket and you get killed when everybody decides to throw out the growth stocks. i was interested to hear your previous guest talking about stock buybacks. we think stock buybacks at the right price are a good idea. we have taken advantage of this market correction of late. we bought about -- call it $60 million of stock over the last few weeks. we think that there are deals that get done. we think that we'll continue to pay a dividend, but we think that our stock is a pretty accretive transaction for us. but ultimately what's going to happen with lionsgate, is it going to be a consolidated play? i don't know. our big shareholders will decide whether that makes sense, and at what price. >> all right. thanks for sharing. michael burns, with your thoughts on the new movies and shows. looking forward to the "mad men" premier this sunday. >> i think you're going to like it. >> i know the shorts are getting -- the skirts are getting shorter, changing with the times, that's all i've heard. >> everyone needs a new start. >> okay, thank you. >> good to see you, michael. still ahead, the legendary investor and founder of home depot, ken langone. 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[ male announcer ] savings worth talking about. state farm. frrreeeeaky! i hate when my computer gets grouchy. it's probably due to lack of sleep. set your computers to hibernate after 30 minutes. the rest will do it some good, and save energy. the more you know. welcome back to "squawk on the street." friday's edition. the last edition this week of the "santelli exchange." what a week it's been. you know, the treasury market continues, in my opinion, to be the market you really want to pay attention to if you're trying to get it right in the big picture. let's consider maybe something i don't say enough, in my mind it's there, but let's share -- the view of economy has improved. is there any doubt about it? no. we've talked about grading on the curve rather than raw horsepower. grading on the curve, yes, the u.s. economy is outperforming its peers. but that isn't only the issue we need to be concerned about or pay attention to. we need a certain amount of economic growth to accomplish all the things we need to prioritize with regard to spending, how we create revenue in the economy, tax base. it's important. and we are probably -- as a matter of fact, i would say we most assuredly are not at our growth potential. so the real, real issue of what's going on right now in the marketplace is that the treasury market on the long end just doesn't seem to be moving higher in yield the way it normally would, or the curve -- steepening we normally see when the economy is going to gain traction. but it's improved. but it hasn't improved to the extent it can. what are the reasons? i think one of the reasons is this whole tina principle. there is no alternative. sometimes the solution becomes the problem. what that basically means is there is no alternative to riskier assets. here's the problem. i may have to wrap. simon, back to you. >> okay. thank you very much, rick. let's go to the white house where president obama is making a statement on secretary sebelius. >> even when the success -- the successor is wonderful. in early march, kathleen sebelius, my secretary of health and human services, told me she'd be moving on once the first open-enrollment period under the affordable care act came to an end. and after five years of extraordinary service to our country and 7.5 million americans who have signed up for health coverage through the exchanges -- [ cheers and applause ] -- she's earned that right. i will miss her advice. i will miss her friendship. i will miss her wit. but i am proud to nominate somebody to succeed her who holds these same straits in abundance, sylvia mathews burwell. [ applause ] now, just a couple of things about kathleen. when i nominated kathleen more than five years ago, i had gotten to know kathleen when she was governor at kansas and had shown extraordinary skills there, was a great advisor and supporter during my presidential campaign. and so, i knew that she was up for what was a tough job. i mentioned to her that one of her many responsibilities at hhs would be to make sure our country is prepared for a pandemic flu outbreak. i didn't know at the time that that would literally be her first task. nobody remembers that now, but it was. and it just gives you a sense of the sorts of daily challenges that kathleen has handled, often without fanfare, often unacknowledged, but that have been critical to the health and welfare of the american people. she's fought to improve children's health. from birth to kindergarten. expanded maternal health care. reduced racial and ethnic disparities. brought us closer to the first aids-free generation. she's been a tireless advocate for women's health. of course, what kathleen will go down in history for is serving as the secretary of health and human services when the united states of america finally declared that quality, affordable health care is not a privilege, but it is a right for every single citizen of these united states of america. [ applause ] kathleen has been here through the long fight to pass the affordable care act. she helped guide its implementation, even when it got rough. she's got bumps. i've got bumps. bruises. but we did it because we knew of all the people that we had met all across the country, who had lost a home, had put off care, had decided to stay with a job instead of start a business because they were uncertain about their health care situation, we had met families who had seen their children suffer because of the uncertainty of health care. and we were committed to get this done. and that's what we've done. and that's what kathleen's done. yes, we lost the first quarter of open enrollment period with the problems with healthcare.gov, and there were problems. but under kathleen's leadership, her team at hhs turned the corner, got it fixed, got the job done, and the final score speaks for itself. there are 7.5 million people across the country that have the security of health insurance, most of them for the very first time, and that's because of the woman standing next to me here today. [ cheers and applause ] we are proud of her for that. that's an historic accomplishment. that's right. and, by the way, in the meantime, alongside 7.5 million people being enrolled, health care costs under kathleen's leadership are growing at their slowest rate in 50 years. i keep on reading folks saying, "well, they're not doing anything about costs," except they're growing at the slowest rate in 50 years. what does that mean? that's, in part, because of kathleen's extraordinary leadership. health records are moving from dog-eared paper to high-tech systems. kathleen partnered with the department of justice to aggressively pursue health care fraud and return billions of dollars, record sums, to the medicare trust fund. all told, kathleen's work over the past five years will benefit our families and this country for decades to come. so we want to thank kathleen's husband, gary, the first dude of kansas. we got two outstanding sons, ned and john, who've been willing to share their mom with us these past five years. and, kathleen, i know your dad, who served as governor of ohio, inspired you to pursue public service and who passed away last year, would have been so proud of you today. so, kathleen, we want to thank you once again for your service to our country. [ applause ] >> all right, were you just listening to the president touting kathleen sebelius' progress as secretary of health and human services for the five years she was serving, talking about how she shepherded the rollout of the affordable care act platform, and also talking about how she advanced the health care sector and started to bring the growth of costs down, at least somewhat. we want to get to john harwood, our eyes and ears on the ground there. of course, he can put this into context for us. john, we expected that since the news broke last night. but what did you take away from what you just heard? >> well, i think the president is trying to sweeten the departure of kathleen sebelius, and it is a bittersweet moment. she's been with him now for five and a half years. they did see this through, the end of the open enrollment period. this is a moment of accountability for the difficult time they had with the rollout last fall. the president, when he was asked last fall when things were at their worst, "are you going to replace kathleen sebelius? " and he said my priority is to get through the end of the enrollment process. but he didn't push back against the idea that he would make a change. that is, in fact, what has happened. he's nominated sylvia burwell, someone with a bulletproof reputation in democratic circles, probably as confirmable as a democratic hhs nominee can be. and so, i think the president's decided to try to turn the corner, as he said that sebelius and her team did after the rollout problems, as they prepare for midterm elections when republicans make obamacare a big issue. >> hey, john, did she jump or was she pushed? did she jump or was she pushed? >> you know, the white house has said that she made the decision -- she told the president she would leave. but i think the writing was on the wall. so i'm not sure -- it may be, simon, a distinction without a difference. i think the president had signaled that he wanted to make a change, and she could see that as well as anybody else. >> john, this is well timed, it is well choreographed, as well. do you think this will actually have tangible effects on the midterm elections the way that you see it? >> doubt it. maybe a little bit. you know, the affordable care act is doing slightly better in the polls lately, as they've had a successful end to the enrollment period. and i think having a new face at hhs, assuming that she can be confirmed, may help "we turned the corner" argument, but i don't think it will be a major turning point of any kind. kathleen sebelius wasn't the name on the affordable care act. it's obamacare, and he's still there. >> before we let you go, john, it seems ages since we talked to you. do you think they could still lose control of the senate come the midterms? >> yes, sure they could. i think it's pretty much a 50/50 proposition whether that happens or not. republicans have to gain six seats. they certainly have plenty of opportunities to gain six seats, but we've also seen in 2010 and 2012 they had favorable geography in terms of where the senate elections were then, and they didn't get the job done. so democrats are working very hard. and i think you can see this change as part of that effort. >> okay. all right, john. good to see you. john harwood joining us from washington, as kathleen sebelius leaves the health post and is replaced by the current budget director. let's check where we are on the markets. importantly, the selling has abated. we're positive on the nasdaq, but we're not. we're slightly negative. flat overall, with gilead sciences, they've risen above the short line. the main concern on the downside today, in the wake of the earnings report, would be jpmorgan, which is currently down 3%. >> and that has also been one of the laggards on the dow, as well, throughout yesterday, all through this week on the trading. so we'll certainly keep an eye on those financial stocks. we also want to look at volatility. we've seen some huge moves throughout the hour, and we'll keep you posted, because the 11:00 hour throughout this sell-off has been the hour where the market has seemed to turn off. so we want to get more on tech and nasdaq, which at its worst was down 47 points this morning. so we'll introduce you to this morning's "squawk feed." joining us is cara fisher, along with our own jon fortt. guys, we want to start with the market. cara, we had jim stewart on the last hour who said every time the market has gone up without a healthy correction, it ends badly. are the people in your camp looking at this as a healthy correction? >> well, you know, it did go up a lot. so i think there was a lot of high stocks, linkedin, facebook, twitter, all sort of reaching rather large numbers. i'm not clear on what that -- why that was happening. so i think they're probably glad for a correction, although i think the decline has been pretty precipitous in the past month, i guess. >> cara -- >> -- bad news. >> cara, the valley feels different about these market moves than the street does. a lot of companies have been using their stocks as currency in different ways to make big acquisitions. facebook comes to mind. also, it's important as compensation. what do you think the impact is out there, just kind of depending on which way the market moves from here, if there is a dramatic move? >> well, it's not good. they have been using the stocks -- think about facebook, the two acquisitions it made, a lot of it was stock. google uses cash more. all of the companies are using stock to their -- their expensive stock to buy things. so that's an issue, obviously. it's a get while the getting is good kind of idea, i guess. and they pay people in stock. even though they pretend in silicon valley, they don't care about the stock market, they completely care about the stock market. >> and the real estate market -- with the real estate market, cara, it would suggest that's the case. you lived through the -- we've all lived through the bubble that we had earlier with dot-com. could you talk us through the type of valuations that we were seeing then, not just in pure tech but also biotech perhaps? and how different things are now. because the word "bubble" seems to have been thrown around a lot in the last week or so. >> right, yeah, the valuations are incredibly high. i've been talking to a lot of venture capitalists this week on a story i'm working on. they feel like the numbers are super high, yet all of them are paying them. it's an interesting question is, they said if you had gotten out the last time and you had not invested in those years after the bubble crash, you would not have done as well. and so, they feel like there's no price too high. some of the valuations going on right now, from uber to a whole bunch of start-ups, they're getting the massive billion-dollar valuat n valuations. i think there are 19 unicorns, they're called, billion-dollar valuations of start-ups. and they're paying the price. and the question is, whether they be able to get them back via acquisition or ipos. >> there was a story last night, you mentioned the unicorn valuation, that cora raised $80 million for a so-called unicorn valuation. the companies pay employees in stocks, and it has an effect on morale. i want to throw this to jon. we talk about private valuation. but how long is the lag time to see public market effects really start to hurt private market confidence? >> boy, that's a tough question, kayla. i don't know if i can answer it. so i'll just spin it around in a different direction. i mean, i think it's really interesting what the market has been doing lately. i think it'll be key to see, does this strengthen the hand of companies like your apples, like your googles, even your microsoft, that have a lot of cash? do they start to put their cash to work in different ways? if the valuations kind of get if iffy, or even in the wake of all of the stock moves around -- you know, employees are less likely to bet on just rsus as a form of compensation. but that's another thing, i will say, in silicon valley, it's moved toward restricteds stock units, versus the bubble, which could evaporate. >> and raising debt, too, instead of equity. >> let's move on and talk about amazon, because ceo jeff bezos is giving us a different look. he revealed paid to quit, which offers employees up to $5,000 to leave amazon if they aren't happy. he also talked about the expansion of amazon's grocery business and confirmed the company is hard at work on the next generation, still, of drone delivery. cara, were you surprised by any of that? was that kind of all general knowledge? >> no. i thought he was going to announce an invisibility cloak. no, he likes -- you know, drones. he loves the drone idea. i suppose it's a far-out idea. i suppose eventually that's how things will be delivered. you know, he likes to do that. there's a man who doesn't care about stock valuations, obviously. so i think what's more important was the grocery discussion, which is, i think, in the here and now, which will affect the stock price today. is this expansion of amazon fresh? which is a grocery delivery service, an idea that had been tried in the last, by the way, right before the last crash. and it's probably -- it's reaching its time now in terms of people wanting delivery at home with all of the various things. interestingly, uber also announced a delivery service in new york using its uber car. so google's in this. all of the companies are in this. that's an interesting area to me. the drones are sort of fun. and the comics are, well, he wants to own comics and have the platform for distributing comic books, digitally and real. >> jon, you talked about how if amazon wants to move further into the grocery program, it needs to make its employees happier. they're not only announcing they're diving deeper into amazon fresh, they're also saying they'll pay their employees $5,000 to leave if they're not happy. they're basically answering you. >> well, in a way. zappos has been doing this for a ill whoo. it was paying people $1,000 to leave. and i think this is kind of an outside-the-box human resources approach where, okay, if you're not happy, here's $5,000. you can choose to leave. do the math. consider how much you really like being here, what your other options are, and in the shareholder letter, he mentions a program where amazon will pay 95% prepay tuition for high-demand programs like nursing, even if they don't have any benefit for amazon. so i think there's a little bit of culture burnishing happening in this letter as well. i agree with cara, the grocery discussion was interesting partly because bezos had a cautious tone about it, saying he will expand that cautiously. he talked about how in seattle they've been doing this for several years, and they've been patient. so maybe that's a signal not to expect a huge capital outlay, profit-sapping capital outlay in the near term. >> but the thing with th.r. thing, it's a stunt. >> well, let me ask you, jack welsh said he would sack the bottom 10% of g.e. management every year. >> yeah. >> and that was considered quite harsh, quite proactive, and is bezos being harsh here in a kind of jack welsh way? >> no. >> or is he some sort of benevolent kind of gift? >> no, it gets reporters to write stories about it, like the dollar salaries. you know what i mean? it's just, whatever. he's saying to your employees, if you don't like it, you know, you should leave. i think many companies say that. so i don't know -- it's just a creative way of doing it, i guess. >> i'm not sure they give them $5,000, do they? >> well, i guess. >> it's like a signing bonus turned on its head. >> yeah, good-bye, see ya later, don't let the door hit you on the way out. >> good-bye, then. thanks, cara. have a good weekend. we should note nbc news group is a minority owner, and that's part of the reason we have the pleasure of having them on. let's look at shares of jpmorgan. a big move to the downside still. they've come back very slightly. still a loss of 2.5% on the day. we'll tell you what's beneath that share price move. what does it mean for the future? and paycom was supposed to open for trading here at the nyse this morning, but the stock still hasn't opened. troubles in the ipo market? we'll have some answers next. plus, rick santelli will join us with a "santelli exchange." rick, what are you watching? >> simon, we're going to grab ira harris and talk about some of the events in the market, how it's trading this week. it's been a huge week. we'll try to divine what the treasury complex is telling us and try to equate what's moving in stocks to the downside to what may be moving in the economy, potentially to the upside. all in about five minutes. 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[ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. welcome back. mixed results from two big banks today as earnings season gets under way. wells fargo posting strong results. profits up 14%. jpmorgan is the big market mover. its shares getting rocked this morning after the bank's profit and revenues slide. you can look at that stock now, now down better than 2%. here to break it down is paul miller, managing director and head of financial institutions research at fbr. paul, good to see you on a busy morning. >> thanks. >> walk us through what you think about jpmorgan. obviously, wells fargo is the contrarian in a down market, but we're seeing weakness on jpmorgan. there's a lot to pick through here, and i'm wondering what stands out to you? >> well, on wells fargo, you know, it looks like a great headline number, but the quality is not good either. on a core basis they probably missed everybody's numbers. as people go through that, they'll lose enthusiasm for wells fargo. but for jpmorgan, the big thing was the income miss. we were expecting a weak mortgage quarter. we were expecting a weak fixed income quarter, and that's what you're seeing with the street. for wells fargo, they had some great mortgage numbers, but a lot was hedging gains, security gains. so on a core basis, they didn't do well. we were afraid a lot of the banks were running up on expectations of a great economy, expectations of higher rates. and now you're seeing rates drop. >> when you think about what jpmorgan executives have been saying all morning on their conference calls, it doesn't seem like there's a discernible reason why fixed income fell the way it did, and they said it could continue through april even. what sort of comfort does that give you that they can identify the problem, they can fix it? what's wrong with the business model so this doesn't happen in the second quarter? >> well, we already said about jpmorgan, and a lot of the banks, they're black boxes. we don't know what goes into the fixed income trading desk. i lot of it is mbs issuance. it's down at a 14-year low, and that's having impact on the fixed income trading desk, but they talked a lot about less debt issuance. because of that, the volatility is why people are starting to shy away from the stock. >> you know, paul, i think from memory, it was last quarter you were on "squawk box" and bemoaning the fact you weren't getting the acceleration in the bank, certainly in jpmorgan commercial loan growth, that many people would anticipate at this stage in the cycle. and that's really why you buy the banks, and they're not producing on that. on "squawk box" it was somebody else making that point this morning. how serious is that, if you're in the banks and not seeing that sort of -- kind of balanced growth if you like? >> you need to see -- if you don't get balanced growth, or increase in net interest margin, the banks won't be able to grow and meet expectations. that's why when you look at these things, the macroenvironment is very important. right now, we're not getting enough gdp to absorb the liquidity in the system and that's what's causing the growth to be disappointing. >> it's more than that, right? they're not leveraging what growth we have, arguably? >> that is correct. i think we're still in the deleveraging phase. this is going to take a couple of years before we get through that. if we're deleveraging, we won't be able to grow the balance sheets. if you can't grow the balance sheets, the bank earnings cannot grow. >> paul, there's some specific macro issues we talked about, bank-specific issues as well. but do you think we'll see surprises with citigroup, bank of america, goldman? >> i think you'll see more, disappointment on the fixed income, balance sheet, on n.i.m. i think a lot of the street was ignoring that, saying it's rearview mirror stuff, but the 10-year is down 15 basis points in the last week. and i think a lot of people think that's heading to 2.50. if it does go there, you'll see a continued sell offin the banks. >> all right, paul, for the moment, we'll leave it there. thank you for joining us. speaking of disappointments, a lot of companies going public this morning, but one of today's ipos is behind schedule, even as we speak. bob pisani joins us now with a bell. over to you, bob. >> we're ringing. thank you. it's been an interesting morning for ipos. there's been several postponed, including one eagerly anticipated, paycom. in fact, look, the sign is still up right here. we were looking for a pricing around 18 to $20, but it never priced. we asked for a statement from the company. here's what they've told us. this is from the company. market conditions have postponed the opening. however, they were required -- or they did file what you call an amended s-1, an fwp amendment, contains updated information on their earnings for the first quarter. they filed that overnight. so it's not clear whether the delay was because of the market conditions or maybe because of that fwp amendment they had to file. it's not clear. at any rate, what we're sure of right now, they're supposed to ring the closing bell. not clear what's going to happen there. there were officials here this morning -- they were here, i saw them, spoke to them. they wouldn't give me any more information. i'm not sured it' open or not. as of now, no bell for them. we're waiting for that one. there is a lot of other things going on. look at zoey's kitchen. you want a hit? this was a big hit. an enormous crowd over here. there's zoe's kitchen trading at $25 and change. the important thing, shares were at $15. the price talk was 13 to 15. it opened at $25.65. right now trading at $25.55. kevin myles, the ceo, says they are expanding fast. >> we continue to move east. we're in philadelphia, kind the southern new jersey, and hopefully, within day up this direction. we have great franchise partners today, but we feel we can continue to grow the culture, grow, and we're excited about the model we're building. >> fast casual restaurants are having a tough time. look at the names today, the main competition being chipotle. back to you. >> thank you for that, bob. i know that you did a segment last night where you were talking about how there would be real cause for concern in the ipo market if we saw one of these postponed. so it certainly remains to be seen what sort of compounding effects this will have. we want to give you a check on the markets. mixed action this morning after the major losses yesterday. a lot of the big moves in stock started in the 11:00 a.m. hour, as we have been telling you, so we'll be watching what happens. right now, the nasdaq is up about 3 points. what can we expect today? 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[ male announcer ] open your eyes... to the 6-cylinder, 8-speed lexus gs. with more standard horsepower than any of its german competitors. this is a wake-up call. ♪ welcome back to "squawk on the street." rick santelli here. i'd like to welcome ira harris. when the animal spirits get lost in the equity market, we call our ghostbuster. all right. a wild ride for not only equities, but more importantly for the treasury markets. what happened after qe 1 and qe 2 with interest rates? >> well, interestingly, everybody thought long rates would go down, but then the market reason is with the thrust of it, the economy will get going faster, so people were satisfied with it, and the curve steepened, as we talked about. >> it did. but for the most part, we did see rates move down, both times, as the programs ended. >> right, as they ended. >> and it's the same this week. it's about the risk assets' behavior after them. and if there is no alternative, once the programs are done, you see that there is no alternative to the fact that after every action is a reaction. >> always. >> do you see this continuing? is it correction, not correction? it gets hard to say, because everything is topsy-turvy. >> well, because we're so correlated and everything is priced off of everything else, so one thing moves another like never before. it's faster. and it takes place. so again, people wake up in the morning and they go, what am i going to do with my money today? what's my fair factor? what's my greed factor? and they try to weigh that, measure it, and go accordingly. >> is there any doubt in your mind that the economy is better than it was a year ago, better than it was two years ago? that's not what we're debating here, is it? >> no. >> what we're debating is where everything is priced. and should it be there or do we need to find more solid footing for the risk spreads? what about those? what do you think about high yield and corporate investments at this point? >> you know, i'm a big fan of jeremy stein, others aren't, but i think risk has been priced. nothing says it more than greeks bringing a five-year to the market at a sub-5% level. risk is -- because everybody is chasing yield. we're back to those times where people are chasing yield because everybody has to perform to some bogey, and they'll try to make -- >> speaking of bogey, let's talk about another bogey man, nikkei, and we exported some of our selling. there's a lot of issues, and taxes aren't the only issue. what about banks in japan? >> the banks are one of the missing things, because i'm buying jeopardy bank stocks. they replace -- because the low-risk play going forward. and the banks in japan have been doing something, offloading the bad stuff -- >> to who? >> -- to the boj, because that's the way the prices -- >> right. >> and the japanese bank stocks ought to be solid performers, but the fact they're underperforming tells me the japanese recovery is not near to taking place. >> and i say, if anything goes wrong with the stimulated central bank where we have the canary in the colemal mine is? >> well, the boj. >> all in or all out. ira harris, have a great weekend. thank you. sarah -- i'm sorry, kayla and simon, back to you. >> thank you very much, rick. rick santelli live in chicago. let's go to europe and check on the close as they head into the weekend and see where we stand. they are off the lows, but a sea of red as you can see. the biggest weekly loss in a month is where they're headed. a lot of that has to do obviously with the momentum plays, the tech sell-off, for example, arm holdings, the chip designer apple uses in london is down. a full 4%. europe doesn't have the same concentration of tech companies as you have here in the united states. so when you look at the selling and what's impacted, it's more the momentum plays, and that could be the airlines, for example. they've been caught up quite badly in the selling this week, because air france, klm still up around 46% so far this year. lufthansa, still, is a high flyer, as you can see. that's where a lot of the selling has been concentrated. for the week, it is quite serious in europe. germany, italy, and spain have led the losses, and there you can see the percentage losses. in spain, for example, down 4.5%, because in part, the italian and the spanish stock market have themselves been momentum plays because of the concentration of the banks. the other thing that's really fascinating, as the european central bank attempts to talk up the chances of quantitative easing to try and force the euro down is the fact that the euro has nonetheless gained through the week, partly because of the intransigence from the bundesbank on qe, and because yellen and her colleagues have tried to redefine the dovishness, which has caused the euro to rise. one more look at what is happening in athens. very shortly a news conference will begin between germany's angela merkel and the prime minister of greece. this has been a big week for the greeks with the bond issue. some would say that the chickens will still have to come home and roost. the economy has lost a quarter of its value, partly because of the austerity since -- since 2008, and there are local elections looming with an unemployment rate in greece, let's not forget, of 26%. up next on the program, stocks down again this morning. the nasdaq has made some recovery, but it's had a really bad week. what does this week's action tell us about the economy and what will happen next week? billionaire and home depot co-founder ken langone has some answers, and he'll join us in a couple of minutes. ameriprise asked people a simple question: in retirement, will you outlive your money? uhhh. no, that can't happen. that's the thing, you don't know how long it has to last. everyone has retirement questions. so ameriprise created the exclusive.. confident retirement approach. now you and your ameripise advisor can get the real answers you need. well, knowing gives you confidence. start building your confident retirement today. a volatile session in the market, trying to make a comeback. meanwhile, off the lows of the morning. the nasdaq slightly into positive territory. the dow is still down 42 points. we want to bring in ken langone, the chairman and president and co-founder of the home depot, and is joining us live from arizona. ken, good to see you. thank you for joining us. >> thanks so much. nice seeing you, nice being with you. >> when you see a market like this, that people have said is overvalued on one side and undervalued on the other, you witness several market cycles at this point. what one does this one remind you of? >> every market cycle is different unto itself. i think what we're going through right now is a rotational change. which is okay. but the fact of the matter is you still stay focused on your companies and your investment. if you have great companies, you go through markets like this, and you are essentially indifferent to the market in spite of how the media tries to hype and excite you, and the sky is falling or the times have never been better. it's somewhere in between. what i'm saying is, you invest. if you invest, you go through these periods of time relatively depth to the sounds and annoyances go on. this market is like any other market. stocks go up, stocks go down. i think in this period of time what we're witnessing is the fruits of intense and unreasonable regulation out of washington. and i think this is what we need to address. >> right. i know that -- >> not taxes, not the deficit. >> i know some people have been looking at that specifically. we saw jamie diamond shareholder letter, talking about entitlement spending and the cost of obamacare and also the fact we haven't gotten tax reform. as just some of the red tape that's overhanging on the market, and why companies can't grow. but you look at a company like jpmorgan today, which basically no loan growth, wells fargo in the same boat, and what do you think the companies need to start lending again? what do you think needs to happen for the economy to start growing? >> it's very easy. you create an environment where the borrowers want to borrow money, because they see their business growing and they see that investing in their busin s business -- with the company. why are companies buying back stocks? i don't know every answer, but a good measure is, we're giving the money back to our stockholders rather than investing or doing deals. and why? because they see regulation continuing to encroach on what they can do. now, i'm not saying all regulation is bad. but i am saying to you, we're in a period of intense and unreasonable regulation, and we're seeing the fruits of that environment. it's that simple. it isn't the banks that can't loan the money. it's the borrowers that don't want to borrow the money. there's no demand. why is there no demand? because people are making do with less. why would i want to build a plant or add a lot of money for equipment -- go ahead. >> right. no, ken, i'm thinking about the letter from larry fink last week where he was putting the onus on the companies and saying, this is the environment that we've been dealt. you need to learn how to operate in it, and you need to make a decision at the top to say, listen, the market's on its all-time shy, we need to stop buying back our stock, and we need to start reinvesting in our business. he was saying onus was on the company. don't you think corporate america can make that decision, too? >> wait a minute. hold, hold. let's go back to your premise. larry fink did not say you must growth -- you must grow. larry fink said in the environment we're in, you must survive. and i think jpmorgan and wells and every company i know is doing a very good job of surviving. but what they're not doing is going to invest extraordinary sums of money, or any amount of money, into an environment that's hostile. let's get off this -- jamie dimond runs -- i've said it before and i'll say it again -- jamie dimond is the finest ceo. i think it's tragic, he's lost great people, might recently mike cavanaugh. but if you got into mike's head, i bet you a good portion of what mike's decision was was to get out of the environment where it's hostile. i mean, we have to -- we have to accept the fact that what's going on in america today does not come without cost. and the cost is economic growth. >> and, ken, you put your -- you put your money where your mouth is. you are a major donor to the gop. you are a major donor -- supporter of, for example, governor christie. so if the gop were to win the next election, or indeed -- >> wait, hold it, simon, simon. simon, let's be fair. i'm also supporting governor cuomo in new york state. and he's a democrat. >> okay. >> i'm also supporting senator schumer. >> and i take that on board. but are you making a -- you are making a bigger political statement about a general hostility that is coming from capitol hill, and what i'm going to ask you, constructively, is what could, in practice, be changed that could increase demand and investment in the country? >> give me that question again. >> what reasonably could we expect to change at the political level that would reinvigorate demand and investment in the economy to the major point that you're making? >> look, i have no doubt -- and i subscribe to the notion -- that regulation is necessary. but it needs to be balanced. it needs to be measured. and it needs to be reasonable. and all regulation comes with a cost. if the -- by the way, there are very prominent democrats who share my thought on excess regulation. the fact of the matter is, we have a problem right now. we have a serious problem. the economy in america is tepid at best. tepid. how do we get it going to 2.5% or 3%? guess what? i don't say throw out regulation, but i say make regulation reasonable and consistent with what you're trying to accomplish. >> ken, i know -- >> -- i'm not democrat or i'm not republican. go ahead. >> excessive or not, i mean regulation is oftentimes, not all the time, but oftentimes in response to a specific problem. in the banking industry, it's no different. obvio obviously, it's a very big law, dodd-frank is, but it's in response to the financial crisis. we have a new debate that's come on board in the last couple of weeks, and that is about high-frequency trading. there's this idea that the market is rigged. i know you have taken companies public, you have taken cups private, and you've spent a lot of time in the market dealing with investors and watching how technology has unfolded. i'm wondering what your thoughts are on whether the market is rigged or whether you think michael lewis drew the wrong conclusion. >> look it, the markets are not rigged. 40 years ago, if i bought 1,000 shares of a $45 stock, i paid $450 in commissions. today, if i buy 1,000 shares of stock, i pay $20. more of my money is going to my investment. i think this is much ado about nothing. and i have no investment and no interest in any of these high-frequency traders. give them credit. they provide liquidity. this is peanuts. here's an example of where much ado is being done about nothing. by the way, let's go back to regulation. whenever regulation is borne of a knee-jerk reaction, expect regulation to be unreasonable. and that's what's -- dodd-frank is a disaster. i don't know all of the nuances of it. our health care law -- our health care law changes, you can argue all you want about 7.5 million, but the fact of the matter is, get into the real world, and people don't like it. it's down to 37% approval. these are your numbers on the media, not mine. but understand something. whenever you enact legislation, be mindful of the downside. collectively today i believe america is being overregulated, and i believe we're going to pay a terrible price in economic growth until we fix it. now, if it takes getting the democrats out and the republicans in, i'm for that. if the democrats can see the white, leave them alone and let them fix it. but let's be reasonable about it. >> ken -- >> -- this is the result of the excess -- go ahead. >> -- we should point out the beautiful backdrop, the global retailing conference in tucson. i'm wondering what you're taking away from the thoughts of the likes of terry lundgren or walter robb, many of the ceos there this week. what's your takeaway from the retail sector right now? >> what i'm taking away is a long-term prospects in america have never been better, have never been better. there's young people out here that are anxious to learn about how they can run their retail businesses better. this program, terry lundgren's got out here, is world class. it's unbelievable. and these people that are out here want to grow, and they want to learn, and they want to expand their businesses. the long-term prospects of america have never been better. but we've got to get through this period of excess regulation and excess government involvement. >> all right. all right, you speak your mind -- you certainly know how to speak your mind, ken. that's why we love having you on. >> thank you very much. >> enjoy your time out there. >> okay, thank you. as we've been talking about all morning, the markets are making another move to the downside. despite the action this week, mike santoli says now is not the time to panic. he'll tell us why he's not worried in just a moment. plus, make sure you keep it here. the masters is in full swing, and who better to talk about that than the golf legend gary player? he'll join us after this break. ahhh. beautiful day in baltimore where most people probably know that geico could save them money on car insurance, right? you see the thing is geico, well, could help them save on boat insurance too. hey! okay...i'm ready to come in now. hello? i'm trying my best. seriously, i'm...i'm serious. request to come ashore. geico. saving people money on more than just car insurance. at your ford dealer think? they think about tires. and what they've been through lately. polar vortexes, road construction, and gaping potholes. so with all that behind you, you might want to make sure you're safe and in control. ford technicians are ready to find the right tires for your vehicle. get up to $120 in mail-in rebates on four select tires when you use the ford service credit card at the big tire event. see what the ford experts think about your tires. at your ford dealer. coming up at the top of the hour here from the new york stock exchange, heading into the final stretch of the tough week for the markets, but can we turn things around, for today at least? we're tracking all the signs to find out if a correction is actually here, with supertrader larry altman. a rough day for jpmorgan shares after a big earnings miss. should you be buying the dip? we'll debate it. and in a rough-and-tumble market, should you stick with the steady eddies or go after the old fliers? that's coming live here at the new york stock exchange at post 9. kayla, we'll see new a bit. >> all right, thank you very much. the masters this weekend is under way, defending champion adam scott shot a 69 yesterday following closely behind bill haas, leading the board after shooting 68 for the day. what can we expect as players hit the fairway today? for that, gary player, a world-renown golfer, golf course developer, and our own dominic chu is here to join us in the interview. thank you so much, gary, for joining us. it looks like it's not too shabby where you are, down south. i'm wondering if you could walk us through how the masters is going in its early stages. >> i must say -- can you hear me all right? >> hey, gary, it's dom. are you there? >> dom, yes, sir. how are you today? >> i'm great. kayla was just trying to ask you about how the masters is going now. any sense -- this is a time of the year when golfers around the world and the country are called to action. it's the first major of the year. how excited are you and the golfing community about the kickoff of the masters? >> very excited, and what's amazing is you stand under that oak tree, and there are probably at least a minimum of 30 nations -- people representing their golf associations. the golf course is so beautiful. if they found a weed on the golf course, i'm sure the greenskeeper would be fired. but it's great excitement here. the tournament is wide open. there's so many players that can come out and win as usual, and it's always full of drama. >> well, gary, one of the things about the masters, it's also a place where a lot of business networking gets done. i know that you're down there, your organization is hosting a slew of different companies, from barron berg bank, callaway golf, coca-cola, even. why is the master so important to the world of business? >> well, first of all, you've had great people associated with this tournament from the start. you had that great leader, president eisenhower, all the great respect for. and then bobby jones, who was world renowned for his great manners and his great play. and then, after those two, we had obviously clifford roberts, who ran the tournament with great discipline. and the tournament has just got better and better and better, and people want to be associated with class. and this golf tournament is the best-run golf tournament in the world, without a question of the doubt. of course, a great advantage in having the tournament the same place every single year, they know exactly what to cater for. and on top of it, there have been amazing finishes, always dramatic, and people like that and the coverage goes throughout the world, and people obviously want to be associated with global business. and america personifies that. global america. >> gary, one of those global businesses, ibm, has been a sponsor of the masters for over a decade at this point. but augusta national has been mum on when it would extend membership to ibm's ceo, jenny, a woman. but they've invited the male ceos of ibm to have automatic memberships. i'm wondering what your take is on this matter? in 2012, augusta did open up membership to condoleezza rice. >> well, from the beginning, when there's a great drama taking, or controversy was taking about women, tiger woods and i were two of the few players that said, yes, they should allow women. others were noncommittal and no comment. i'm pleased i stuck to my guns, because you have a billion viewers, minimum, watching this tournament. maybe 2 billion, which half are women. so if you're any sort of a p.r. person, you have to include the woman. anyway, we live in the 21st century now. you should be including women. and condoleezza rice and the lady from ibm, they deserve to be members. and i'm delighted to see that the new chairman, billy payne, he's really with it. he's had junior golf tournaments at the course. i was in china representing augusta national with a junior tournament there. this new chairman is not reluctant to change. and winston churchill said, so aptly said, "change is the price of survival." >> now, gary, really quickly, one last question. speaking of inclusion. how does the world of golf include more people? how does it grow in the future? >> well, we've got -- you know, it's not easy to hear you guys, but if i heard correctly, the way to get the game to grow, winston churchill also said, requesting the youth of the nation are the trustees of austerity." we've got to get young people to participate. we have to go to schools, have junior programs. this is why south africa produced 23 major champions, more than any country post-war, other than the united states, because of our junior programs. that's where it all lies. the juniors are going to fill the vacuums as the older members die. >> right. >> if you look at tennis, it's amazing. tennis doesn't have a world champion -- an american world champion. you have the best facility, best coaches, and they don't have a tennis champion. >> gary, unfortunately, we need to leave it there. i know you'll have a wonderful weekend with the azaleas, dogwoods, the beautiful weather. enjoy your weekend. have a wonderful tournament. thank you for joining us this morning. >> okay, take care. >> dom, thank you, as well. >> i feel like we should follow that with a churchillian quote on the markets. the markets are on the move. we had a big sell-off yesterday. analysis from mr. santoli next. aflac. ♪ aflac, aflac, aflac! ♪ [ both sigh ] ♪ ugh! ♪ you told me he was good, dude. yeah he stinks at golf. but he was great at getting my claim paid fast. how fast? mine got paid in 4 days. wow. that's awesome. is that legal? big fat no. [ male announcer ] find out how fast aflac can pay you at aflac.com. ♪ ...work with equity experts... who work with regional experts... that's when expertise happens. mfs. because there is no expertise without collaboration. mfs. female announcer: it's sleep train's interest free for 3 event. get three years interest-free financing on beautyrest black, stearns & foster, serta icomfort; even tempur-pedic. plus, get free delivery, and sleep train's 100-day low price guarantee. you'll never find an interest rate lower than sleep train's interest free for 3 event, on now. ♪ sleep train ♪ ♪ your ticket to a better night's sleep ♪ well, we thought we'd stabilized on the markets, but we're starting to move down into negative territory. let's bring in mike santoli, yahoo!'s senior finance cocolum. you said yesterday's sell-off was smart money selling. >> this is the impression i get. if you look at things in terms of ipos being jammed down onto the market, a third of them in the last month or so trading below the initial price, private equity firms following on, a big part of that. it just seems if there's just been this general trend of private equity and hedge funds and investors who had been in the winners who are ready to take cash off the table. that's why to me it's much more about the positioning of big investors. it's about risk appetites. and it's about those winning trades having kind of become untethered from the fundamentals. it's not as much about the markets sending us a scary or important economic signal about really the macroenvironment. that's my read on how it's been to date. >> mike, do you think we needed to see this paycom ipo stall? we needed to see some backup in that jamming, as you put it, of the ipo market? >> without a doubt. you want to see the window narrow or close. you want to see corporate insiders selling, dry up. it's been heavy going into tax day and everything else. and i do think you want to see less of the sense that some hedge funds are sort of caught offside badly. i mean, when you see the fact that some people have been pointing out that the brazilian stock market is actually trading precisely opposite the u.s. market, that the price of nickel has surged, mike pointing this out, basically it seeps like you're having a forest unwind of trades. you don't want to see people trapped. you want to see fewer signs that that's occurring. >> okay, good to see you. thank you very much for that, mike santoli joining us there from yahoo! finance, where, of course, he is a senior columnist. let's bring in scott wapner, who's about to take it away with "halftime." scotty, what do you think of the markets here? what are you focusing on? >> trying to see if this is sustainable. any kind of upward move into positive territory, simon, seems to be sold pretty quickly. it's like anytime you can get any sort of momentum going, the bears are selling right into it. i'm sure that's what you guys have been watching, as well, over the last few hours. >> of course, when you see the banks with the barometer like they have, so weak, no loan growth, really bad sign for the economy overall, people thought they would come out stronger. >> and getting close to that correction territory, as well. the official correction, right? >> sure. >> figuring how steep this will be -- the nasdaq and the russell 2000 are getting close. i think each of them is off about 8% or so. from the highs, guys. >> scott, have a good weekend and a great show. >> you guys do, as well. thank you so much. >> okay. welcome to "halftime" show. here is today's "playbook" from post 9. look out below. how far are stocks likely to fall? supertrader larry altman, better known as trader ex-aspen is live with his latest take. diamond in the rough. after a big earnings miss for jpmorgan, is the stock a cubic z, or still a precious gem? risk versus reward. we're debating the high flyers against the steady

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