Transcripts For CNBC Squawk On The Street 20140429 : compare

Yesterday. A 27point range in the s p. Earnings from coach, merck and panera and twitter tonight. Tenyear yields around 2. 72. The fed begins a twoday meeting today and europe is up across the board led by the dax in germany. Our road map goes like this. A day we here at cnbc has been counting down to. Our official first 25 list of rebels, icons and leaders unveiled this morning. Well bring you the ranksings. Merck shares are higher in the premarket after it beat the street despite some generics cutting into revenue and reaffirmed fullyear guidance. Coach shares lower in the premarket. Womens accessories taking a lit despite earnings coming in ahead of consensus. First up, the list is out, this morning cnbc has unveiled its first 25 list as we celebrate 25 years on the year. The people who have had the biggest impact on business and finance over the last quarter century. The top 5 is led by steve jobs, followed by bill gates, ben bernanke, alan greenspan, the google guys, written, page and schmidt and jeff bezos. On squawk on the street well have interviews with two of the first 25, starbucks ceo and chairman Howard Schultz going to sit down with jim and david has hewlettpackards Ceo Meg Whitman later on in the show. It does sort of bring to mind where American Business and the economy was in 1989 when we thought japan was going to basically own the world. Now its a much different picture because of the people were celebrating today. I think thats true. When you go back to 1989, the tokyo market was really where the action was. You had to get up at 2 00, 3 00 in the morning to trade in the most important market in the world. During that period intel was not the largest because of japan, but i think that the u. S. Reclaimed the leadership. However, the inferiority complex i hear from Business People is rather extraordinary. Its almost as if china is the leader. The torch somehow got passed from tokyo to china, left out u. S. The list does not say that, though. The list verifies what i think the common person thinks in this country which is that if you work really hard even if youre from Humble Beginnings that would be jack welch this morning or Howard Schultz later this morning you can still make great. Its a shame i feel what jack welch said today was stunning, which is that people just feel like its they hate business because business has been has become a whipping boy in this country. Thats unfortunate. Listen the vibrancy of and creativity of the people youre looking at what they were able to do for the u. S. Economy since 1989 is incredibly significant. I do think a lot of the talk that is negative in tone ends up back in washington. We talk about it so many times and you throw the conversation off. We dont have immigration policy. One day well figure it out. Dont have Corporate Tax reform we have all these corporations looking to get out of the u. S. Jurisdiction which will lower revenues but at some point maybe well figure that out. We dont have an energy policy. It would be helpful. Well figure it out. A lot of it goes back to that now, the negativity and the fact that we do not have a hope in some way that were going to deal with those large problems that typically government has, at least and i know many of our viewers and im sure here, government has sometimes led on and succeeded at. I think that maybe one of the themes of the 25 years, judging on what you said, this is right, the governments become the most intrusive force in business. You know, you can go back to when cnbc started. And the government was a veteran of business. Maybe because the previous administration, Bush Administration was too la say fair, you get what you pay for, ceos maybe they had too good a time. But it is odd to listen and realize well, theres been great triumph by the execs, but was the triumph done in the United States . I think it was. You think so . Any doubt in your mind we are at the forefront of innovation, entrepreneurship, of Digital Technology, now of energy. No i think we forget i think the ceos want a challenge to lean into and it has the fact that it is the government this time is nothing new. Thats a good point. I tell you, im thinking more about where Howard Schultzs expansion is because im going to be interviewing him soon. The technology mantle, japan was regarded as a country that had taken world war ii technology, that we had given them, postwar, you can go back to this 25year period, and really improved on it. Its was as if truckdrug drunk drucker, lots of management had become ossified. The period where you felt the raiders shook everything up. It is true we have gone from a country where you wanted to go to an Ivy League School in the northeast to be able to triumph at a major investment bank, to wanting to go to harvey mudd and pomona and cal tech and stanford. Or drop out of college completely. One of the most zuckerberg. When you look at the 25 no one finished harvard. Obviously went wrong. I finished harvard. Clearly that was one of the greatest mistakes of my career. Carl icahn on the list. Princeton. He did finish princeton. Up from nothing. Conceivably he would claim the mantle in terms of helping to shape corporate boards, although he says theyre as bad as theyve ever been. We can have a debate that went on every one of the issues we could spend a show on. Thats whats good about the 25. A source of discussion. We could easily just go through the names. I listen, im look for these common themes. Up from nothing. Lots of people went to Great Schools that are paid for by the state. In other words weve seen Good Government intervention and bad. I have to temper my negativity because i felt what jack had to say resonated so clearly with us. This list is filled with people who have triumphed over whatever the barrier is. Im not sure that jacks world view matches jeff bezos world view. Thats a very good point. Very different areas that were talking about. Youre right. Very different all from each other too. Zuckerberg and bezos dont have the same world view. Onehour special on the cnbc 25. Provoking a lot of discussions today. Tyler mathisen heads that up tonight at 7 00 p. M. Eastern on cnbc. We have earnings this morning. Merck reported First Quarter numbers of 88 cents. That did beat expectations. Revenue slightly short of consensus heard by generic competition for singular allergy. Dow component reaffirming earnings guidance. Genuvia came in good too. R and d down 17. Isnt it funny you have the incredible dichotomy between allergan which spends more on research and development but perhaps going to be bought by valeant one of the things theyll do, i believe. Theyre going to get rid of 80 of the r and d budget or more if valeant is successful in its attempt to acquire allergan. Merck has merck is kind of the newer big pharma thatter what were that what were hearing in big pharma, you have to buy overseas to get the money and lower your tax rate. Thats the pfizer solution. The merck solution, is to fire fire fire. The allergan solution was to spend spend spend. The allergan solution make that company no longer independent. The merck solution is liked by the market. The pfizer solution is being loved by the market. Loved. Im trying to think that through. You dont spend or succeed but you do succeed and then do spend and do succeed but you get bought and then you invert yourself because everybodys got to invert themselves. Im just as weve been talking about. You were head of everyone on this. I congratulate you. You told me this was going to be the wave. What im saying is that what this market has gone from is liking Research Companies or having them bought in the case of to liking eps. Thats right. Absolutely right. Not better. Just wanting deals and bottom line eps and not about r and d and not about how you about growth necessarily just about eps. Mcdonalds. The echo of the letter about buybacks and dividends. And whats happened remember we were supposed to no longer like the companies that just did it. Bottom line only, we liked top line. Top line growth has been the destroyer, portfolios in the last six weeks than i can recall any other. The companies that went 60 growth, it means nothing. I had home away on last night, brian sharp developed this model f if you have a vacation house or property, ive watched that stock be crushed. It is a Profitable Company with 30 growth and what people want is b and g foods which is a company that had no growth, but yields 4 and is finding ways to acquire deadbeat companies and bring them back to life. This market has done a total inversion because of tax inversions. Its a great point youre making. By the way, amazon yesterday, beat up again, down 25 this year. 23 revenue growth. Continuing to spend money and this focus as you say on the bottom line, perhaps for first time in a while there. Bad day yesterday by the way. Again not for a lot of the hedge funds. It was an ugly day. Nasdaq up 0. 3 . S p terrific. A lot of names getting crushed again. Whats interesting youre seeing a lot of competition. Last night at one point home away talked about a product that could compete with yelp. Rubicon. Just became public a month ago. Stock was the biggest percentage decliner. How about amazon going up against really what used to be partners. How about partners going up against partners. How about old line coming back, oracle ringing the bell, becoming the cloud company. How about ibm up 3 yesterday because it is more cloud and then how about gogo this morning. Youll see that stock down badly. Why . Because at t has decided to go up against them and theres a materiality clause in the gogo contract. If someone comes up with a better mouse track they will lose the contract with the airlines. At t. At t in the air, go, go, go, going. Competition everywhere which is one of the reasons why the multiples have come down and meanwhile big pharma is carved up. You dont have a lot of competition. Maybe the mosts competition youll see is help c, old line pharma coming in against market darling gilead. Yep. When we come back, Nobel Laureate Robert Shiller on the caseshiller numbers. His take on the markets as well and later this hour, wings, beer, sports and earnings beat for Buffalo Wild Wings. Well talk to sally smith, the ceo, one more look at futures as we try to get some back after the crazy day yesterday. More squawk on the street at post nine in a moment. E in a mo. Want to take you to the key housing data this morning. A slowdown in annual increases in the 10 and 20 city composites remained unchanged month over month. Robert shiller the cofounder of the caseshiller index, noble lawyer et and professor at yale university. Good to have you back. Good morning. Good morning. Part of the release talks about the disparity between the prices, the home prices, and the weak numbers weve seen out of new and existing over the past couple of weeks. What do you make of that . Well first of all, our numbers are for february. But its been more than a couple weeks that weve been getting weak numbers in various dimensions like permits, the nahb, Housing Market index starts, existing home sales, so yeah, the market would seem to be weakening. Even months ago. But our data are Still Holding in there on a seasonally adjusted basis they look as pretty strong. Do you expect the numbers to start a downtrend once we get into march numbers . I think it might. Although years ago, i used to publish regular forecasts and one thing i learned then, is that theres a lot of momentum in the Housing Market and so the most important number is the Housing Price number. Now it is flat now. Its not going up. But it might be just repeating what it did last year. Last year at this time the Housing Price index was flat again. But then it took another upsurge. So i really am uncertain now. I think theres a chance that we still are in a strong market, despite this data, but the data do worry me, the other data that starts in permits data do worry me . In the past prices lag sales but theres a lot of discussion maybe sales are lagging prices and why is that, due maybe to the Institutional Investor dynam dynamic. Whats your thought . This Institutional Investor dynamic is a new era. As Institutional Investors start to play in the Single Family market that changes it fundamentally. This market as i wrote chip case and i wrote 20 years ago, is horribly inefficient. Its s unbelievably or has been, but once the professionals start coming in, i dont know if thats going to still be true. And as markets develop, you know, they might get looking more like a random some day. Wow. Random wonk. We have seen over and over again that the big buyer in the market is private equity and a lot of times they want to convert these into rentals. How does that secular change impact your numbers . Well, i think that its a very important these people are not just speculators, theyre fulfilling a very important function. Namely, there seems to be a high demand for rentals now. So its perfectly natural for these people to go into the business of converting. But then, the way i think of it, this may be a new equilibrium with more people wanting to rent. That equilibrium doesnt bode really well for existing home prices. Because existing singlefamily homes are not ideally suited to be functioning as rentals. And so it seems to me that might bode for an equilibrium price. I want you to put on your Nobel Laureate price and talk about the markets which weve been talking. Revenue growth out, high multiple stocks suddenly out, everybody focused on the lower, and im using quotations, multiples. Is that a positive in your opinion, a healthy sign for the market . Well, i think the market is a bit unhealthy already, so things that boost stock prices right now are not in my view so terribly healthy. Yeah. Why . Why is that . I think the market is kind of highly priced. It looks a little bubbly in some sectors but its not horribly high. Its sort of in real terms its still there, still in the normal range. High normal range. High normal. So what gives you pause then . Im sorry. Im not understanding. What are you concerned about . Well, yeah, im concerned, theres always a concern about bubble thinking, starting to develop. Weve seen it in the tech sector. And it isnt strong. You can i cant forecast the market very well. I can just say it look highs, theres some bubbly sentiment that make mess mistrustful of the market. On the other hand it still looks like an okay bet at this point. Finally, robert, i wonder, do you see anything on the horizon that could boost household formation . That would boost household formation . I think, you know, a lot of people are just waiting. I think one problem with household formation is, its uncertainty. Its not a worry about the future. If you look at the michigan they have this question on Business Conditions in five years. That has people are kind of pessimistic about that. So theyre waiting for some really good news. Theyre not the confidence is not low. But there is this anxiety about the future. A lot of people are postponing home purchase decisions. They dont want to jump in right now. I think a lot of our viewers can relate to what you just said, robert. Always good to get your color commentary on the numbers. Thanks again. Thank you. Robert shiller joining us from yale. Immigration down. Natural bid under the Housing Market. Right. Lack of confidence coming out of the Great Recession means more renting. Those comments were row found and i think profound and i think again totally, totally in sync with the prices mentality that still exists among many people in this country. Five years after the fact. Well get cramers mad dash as we count down to the opening bell. One more look at the premarket and opening bell in about nine minutes. Why is our arizonabased company relocating manufacturing to upstate new york . I tell people its for the climate. The conditions in new york state are great for business. New york is ranked 2 in the nation for new private sector job creation. And now its even better because theyve introduced startup new york dozens of taxfree zones where businesses pay no taxes for ten years. Youll get a warm welcome in the new new york. See if your business qualifies at startupny. Com dewhos got twond rhooves and just got ae. Claim status update from geico . This guy, thats who. Sfx bing. And i just got a. Oh no, thats mom. Sorry. Claim status updates. Just a tap away on the geico app. At your ford dealer think . They think about tires. And what theyve been through lately. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin 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. We got about 6 30 before the opening bell. Time for a mad dash. Going over a deal that hit moments ago or not very long ago i should say. Atk spinning off its Sporting Group business to shareholder immediately that includes guns, and then merging the remaining aerospace and defense businesses with Orbital Sciences where atk shareholders will own about 53 of the combined company. This is a breathtaking deal for a couple reasons. Atk is a leading provider of defense bullets. 14. 4 market cap. A lot of people felt after the wind down ps in the wars in afghanistan and iraq this was a fabulous short. That has been a bad bet. Management has been motivated to make a lot of money. The idea of splitting this up Howard Schultz<\/a> going to sit down with jim and david has hewlettpackards Ceo Meg Whitman<\/a> later on in the show. It does sort of bring to mind where American Business<\/a> and the economy was in 1989 when we thought japan was going to basically own the world. Now its a much different picture because of the people were celebrating today. I think thats true. When you go back to 1989, the tokyo market was really where the action was. You had to get up at 2 00, 3 00 in the morning to trade in the most important market in the world. During that period intel was not the largest because of japan, but i think that the u. S. Reclaimed the leadership. However, the inferiority complex i hear from Business People<\/a> is rather extraordinary. Its almost as if china is the leader. The torch somehow got passed from tokyo to china, left out u. S. The list does not say that, though. The list verifies what i think the common person thinks in this country which is that if you work really hard even if youre from Humble Beginnings<\/a> that would be jack welch this morning or Howard Schultz<\/a> later this morning you can still make great. Its a shame i feel what jack welch said today was stunning, which is that people just feel like its they hate business because business has been has become a whipping boy in this country. Thats unfortunate. Listen the vibrancy of and creativity of the people youre looking at what they were able to do for the u. S. Economy since 1989 is incredibly significant. I do think a lot of the talk that is negative in tone ends up back in washington. We talk about it so many times and you throw the conversation off. We dont have immigration policy. One day well figure it out. Dont have Corporate Tax<\/a> reform we have all these corporations looking to get out of the u. S. Jurisdiction which will lower revenues but at some point maybe well figure that out. We dont have an energy policy. It would be helpful. Well figure it out. A lot of it goes back to that now, the negativity and the fact that we do not have a hope in some way that were going to deal with those large problems that typically government has, at least and i know many of our viewers and im sure here, government has sometimes led on and succeeded at. I think that maybe one of the themes of the 25 years, judging on what you said, this is right, the governments become the most intrusive force in business. You know, you can go back to when cnbc started. And the government was a veteran of business. Maybe because the previous administration, Bush Administration<\/a> was too la say fair, you get what you pay for, ceos maybe they had too good a time. But it is odd to listen and realize well, theres been great triumph by the execs, but was the triumph done in the United States<\/a> . I think it was. You think so . Any doubt in your mind we are at the forefront of innovation, entrepreneurship, of Digital Technology<\/a>, now of energy. No i think we forget i think the ceos want a challenge to lean into and it has the fact that it is the government this time is nothing new. Thats a good point. I tell you, im thinking more about where Howard Schultz<\/a>s expansion is because im going to be interviewing him soon. The technology mantle, japan was regarded as a country that had taken world war ii technology, that we had given them, postwar, you can go back to this 25year period, and really improved on it. Its was as if truckdrug drunk drucker, lots of management had become ossified. The period where you felt the raiders shook everything up. It is true we have gone from a country where you wanted to go to an Ivy League School<\/a> in the northeast to be able to triumph at a major investment bank, to wanting to go to harvey mudd and pomona and cal tech and stanford. Or drop out of college completely. One of the most zuckerberg. When you look at the 25 no one finished harvard. Obviously went wrong. I finished harvard. Clearly that was one of the greatest mistakes of my career. Carl icahn on the list. Princeton. He did finish princeton. Up from nothing. Conceivably he would claim the mantle in terms of helping to shape corporate boards, although he says theyre as bad as theyve ever been. We can have a debate that went on every one of the issues we could spend a show on. Thats whats good about the 25. A source of discussion. We could easily just go through the names. I listen, im look for these common themes. Up from nothing. Lots of people went to Great Schools<\/a> that are paid for by the state. In other words weve seen Good Government<\/a> intervention and bad. I have to temper my negativity because i felt what jack had to say resonated so clearly with us. This list is filled with people who have triumphed over whatever the barrier is. Im not sure that jacks world view matches jeff bezos world view. Thats a very good point. Very different areas that were talking about. Youre right. Very different all from each other too. Zuckerberg and bezos dont have the same world view. Onehour special on the cnbc 25. Provoking a lot of discussions today. Tyler mathisen heads that up tonight at 7 00 p. M. Eastern on cnbc. We have earnings this morning. Merck reported First Quarter<\/a> numbers of 88 cents. That did beat expectations. Revenue slightly short of consensus heard by generic competition for singular allergy. Dow component reaffirming earnings guidance. Genuvia came in good too. R and d down 17. Isnt it funny you have the incredible dichotomy between allergan which spends more on research and development but perhaps going to be bought by valeant one of the things theyll do, i believe. Theyre going to get rid of 80 of the r and d budget or more if valeant is successful in its attempt to acquire allergan. Merck has merck is kind of the newer big pharma thatter what were that what were hearing in big pharma, you have to buy overseas to get the money and lower your tax rate. Thats the pfizer solution. The merck solution, is to fire fire fire. The allergan solution was to spend spend spend. The allergan solution make that company no longer independent. The merck solution is liked by the market. The pfizer solution is being loved by the market. Loved. Im trying to think that through. You dont spend or succeed but you do succeed and then do spend and do succeed but you get bought and then you invert yourself because everybodys got to invert themselves. Im just as weve been talking about. You were head of everyone on this. I congratulate you. You told me this was going to be the wave. What im saying is that what this market has gone from is liking Research Companies<\/a> or having them bought in the case of to liking eps. Thats right. Absolutely right. Not better. Just wanting deals and bottom line eps and not about r and d and not about how you about growth necessarily just about eps. Mcdonalds. The echo of the letter about buybacks and dividends. And whats happened remember we were supposed to no longer like the companies that just did it. Bottom line only, we liked top line. Top line growth has been the destroyer, portfolios in the last six weeks than i can recall any other. The companies that went 60 growth, it means nothing. I had home away on last night, brian sharp developed this model f if you have a vacation house or property, ive watched that stock be crushed. It is a Profitable Company<\/a> with 30 growth and what people want is b and g foods which is a company that had no growth, but yields 4 and is finding ways to acquire deadbeat companies and bring them back to life. This market has done a total inversion because of tax inversions. Its a great point youre making. By the way, amazon yesterday, beat up again, down 25 this year. 23 revenue growth. Continuing to spend money and this focus as you say on the bottom line, perhaps for first time in a while there. Bad day yesterday by the way. Again not for a lot of the hedge funds. It was an ugly day. Nasdaq up 0. 3 . S p terrific. A lot of names getting crushed again. Whats interesting youre seeing a lot of competition. Last night at one point home away talked about a product that could compete with yelp. Rubicon. Just became public a month ago. Stock was the biggest percentage decliner. How about amazon going up against really what used to be partners. How about partners going up against partners. How about old line coming back, oracle ringing the bell, becoming the cloud company. How about ibm up 3 yesterday because it is more cloud and then how about gogo this morning. Youll see that stock down badly. Why . Because at t has decided to go up against them and theres a materiality clause in the gogo contract. If someone comes up with a better mouse track they will lose the contract with the airlines. At t. At t in the air, go, go, go, going. Competition everywhere which is one of the reasons why the multiples have come down and meanwhile big pharma is carved up. You dont have a lot of competition. Maybe the mosts competition youll see is help c, old line pharma coming in against market darling gilead. Yep. When we come back, Nobel Laureate<\/a> Robert Shiller<\/a> on the caseshiller numbers. His take on the markets as well and later this hour, wings, beer, sports and earnings beat for Buffalo Wild Wings<\/a>. Well talk to sally smith, the ceo, one more look at futures as we try to get some back after the crazy day yesterday. More squawk on the street at post nine in a moment. E in a mo. Want to take you to the key housing data this morning. A slowdown in annual increases in the 10 and 20 city composites remained unchanged month over month. Robert shiller the cofounder of the caseshiller index, noble lawyer et and professor at yale university. Good to have you back. Good morning. Good morning. Part of the release talks about the disparity between the prices, the home prices, and the weak numbers weve seen out of new and existing over the past couple of weeks. What do you make of that . Well first of all, our numbers are for february. But its been more than a couple weeks that weve been getting weak numbers in various dimensions like permits, the nahb, Housing Market<\/a> index starts, existing home sales, so yeah, the market would seem to be weakening. Even months ago. But our data are Still Holding<\/a> in there on a seasonally adjusted basis they look as pretty strong. Do you expect the numbers to start a downtrend once we get into march numbers . I think it might. Although years ago, i used to publish regular forecasts and one thing i learned then, is that theres a lot of momentum in the Housing Market<\/a> and so the most important number is the Housing Price<\/a> number. Now it is flat now. Its not going up. But it might be just repeating what it did last year. Last year at this time the Housing Price<\/a> index was flat again. But then it took another upsurge. So i really am uncertain now. I think theres a chance that we still are in a strong market, despite this data, but the data do worry me, the other data that starts in permits data do worry me . In the past prices lag sales but theres a lot of discussion maybe sales are lagging prices and why is that, due maybe to the Institutional Investor<\/a> dynam dynamic. Whats your thought . This Institutional Investor<\/a> dynamic is a new era. As Institutional Investor<\/a>s start to play in the Single Family<\/a> market that changes it fundamentally. This market as i wrote chip case and i wrote 20 years ago, is horribly inefficient. Its s unbelievably or has been, but once the professionals start coming in, i dont know if thats going to still be true. And as markets develop, you know, they might get looking more like a random some day. Wow. Random wonk. We have seen over and over again that the big buyer in the market is private equity and a lot of times they want to convert these into rentals. How does that secular change impact your numbers . Well, i think that its a very important these people are not just speculators, theyre fulfilling a very important function. Namely, there seems to be a high demand for rentals now. So its perfectly natural for these people to go into the business of converting. But then, the way i think of it, this may be a new equilibrium with more people wanting to rent. That equilibrium doesnt bode really well for existing home prices. Because existing singlefamily homes are not ideally suited to be functioning as rentals. And so it seems to me that might bode for an equilibrium price. I want you to put on your Nobel Laureate<\/a> price and talk about the markets which weve been talking. Revenue growth out, high multiple stocks suddenly out, everybody focused on the lower, and im using quotations, multiples. Is that a positive in your opinion, a healthy sign for the market . Well, i think the market is a bit unhealthy already, so things that boost stock prices right now are not in my view so terribly healthy. Yeah. Why . Why is that . I think the market is kind of highly priced. It looks a little bubbly in some sectors but its not horribly high. Its sort of in real terms its still there, still in the normal range. High normal range. High normal. So what gives you pause then . Im sorry. Im not understanding. What are you concerned about . Well, yeah, im concerned, theres always a concern about bubble thinking, starting to develop. Weve seen it in the tech sector. And it isnt strong. You can i cant forecast the market very well. I can just say it look highs, theres some bubbly sentiment that make mess mistrustful of the market. On the other hand it still looks like an okay bet at this point. Finally, robert, i wonder, do you see anything on the horizon that could boost household formation . That would boost household formation . I think, you know, a lot of people are just waiting. I think one problem with household formation is, its uncertainty. Its not a worry about the future. If you look at the michigan they have this question on Business Conditions<\/a> in five years. That has people are kind of pessimistic about that. So theyre waiting for some really good news. Theyre not the confidence is not low. But there is this anxiety about the future. A lot of people are postponing home purchase decisions. They dont want to jump in right now. I think a lot of our viewers can relate to what you just said, robert. Always good to get your color commentary on the numbers. Thanks again. Thank you. Robert shiller joining us from yale. Immigration down. Natural bid under the Housing Market<\/a>. Right. Lack of confidence coming out of the Great Recession<\/a> means more renting. Those comments were row found and i think profound and i think again totally, totally in sync with the prices mentality that still exists among many people in this country. Five years after the fact. Well get cramers mad dash as we count down to the opening bell. One more look at the premarket and opening bell in about nine minutes. Why is our arizonabased company relocating manufacturing to upstate new york . I tell people its for the climate. The conditions in new york state are great for business. New york is ranked 2 in the nation for new private sector job creation. And now its even better because theyve introduced startup new york dozens of taxfree zones where businesses pay no taxes for ten years. Youll get a warm welcome in the new new york. See if your business qualifies at startupny. Com dewhos got twond rhooves and just got ae. Claim status update from geico . This guy, thats who. Sfx bing. And i just got a. Oh no, thats mom. Sorry. Claim status updates. Just a tap away on the geico app. At your ford dealer think . They think about tires. And what theyve been through lately. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit<\/a> card at the big tire event. See what the ford experts think about your tires. At your ford dealer. We got about 6 30 before the opening bell. Time for a mad dash. Going over a deal that hit moments ago or not very long ago i should say. Atk spinning off its Sporting Group<\/a> business to shareholder immediately that includes guns, and then merging the remaining aerospace and defense businesses with Orbital Sciences<\/a> where atk shareholders will own about 53 of the combined company. This is a breathtaking deal for a couple reasons. Atk is a leading provider of defense bullets. 14. 4 market cap. A lot of people felt after the wind down ps in the wars in afghanistan and iraq this was a fabulous short. That has been a bad bet. Management has been motivated to make a lot of money. The idea of splitting this up Sporting Goods<\/a> guns, this company Orbital Sciences<\/a> which has been undervalued, if you take a look that has missed the market and this is an example, david, of what i call incredible creativity on the part of ceos. To bring out value. Right. Nonstop. Obviously attempted to bring up value its been an amazing performer. Orbital science unhappy with its stock price and boom. Splitting atk into two and merging one with Orbital Sciences<\/a>, atk shareholders will own the majority of the stock that is taxfree, i believe that can be considered an rm it t reverse trust. And atk debt will stay with the Orbital Sciences<\/a> deal, being well received by orbital science shareholders. Where is the market going towards the Financial Engineering<\/a> people like at pfizer, astrazeneca, and away from the pure growth that defined this market in the preamazon data. You will have a pure play bullet gun company i guess. A lot of people would like that. We know gun registrations are at a multiyear high. We know that this unfortunately is never going to go out of fashion and what i love about this, david, this company spun off by honeywell years and years ago, has just been without a doubt one of my Favorite Companies<\/a> ive written about in many books. This company is what i look for. I look for a company that is nonstop motivated to making you money. Atk. Were going to talk about a lot of other stocks and dont forget brian robert, meg whitman, Howard Schultz<\/a>, all coming up on the big show, opening bell after this. To prepare our kids to compete main todays economy . Way woman a wellrounded education that focuses on science, math, and Career Training<\/a> for students who dont choose college. Man and thats exactly what superintendent of Public Education<\/a> Tom Torlakson<\/a> has been working on. Woman because every Student Needs<\/a> the real world skills for the jobs of tomorrow. Man torlaksons Career Readiness<\/a> initiative is helping schools expand job and Technical Training<\/a> across the state because it makes a difference. Woman so tell Tom Torlakson<\/a> to keep fighting for the career and Technical Training<\/a> our students need. Female announcer sleep trains interest free ends sunday. Its your last chance to get three years interestfree financing on beautyrest black, stearns foster, serta icomfort; even tempurpedic. Plus, get free delivery, and sleep trains 100day low price guarantee. But hurry sleep trains interest free for 3 event, ends sunday. Sleep train your ticket to a better nights sleep im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. [ tires screech ] chewleys finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. Get the most extensive charting wherever you are with the mobile trader app from td ameritrade. Youre watching cnbc squawk on the street live from the Financial Capital<\/a> of the world on this tuesday. The opening bell in about a minute or so. Earnings kicking too second gear here after a relatively light day yesterday. Weve not gotten to coach. 68 cents beats by 7 cents although north american comps down 21. Its difficult for me. My travel trust thought it was going to bottom and it hasnt. Its very difficult to come back from 21. And i think that what epps now is even though its a new ceo, you have to call into question the viability of a company that could have down 21 numbers. Jc penney, chinas numbers are strong. They dug themselves into a hole. I dont want to say they can dig it out next quarter. This is not a quarter hold. This is a multiple year hold. You cant just come out and say, you know what, our handbags are strong. Theyre not. The most googled handbag michael kors as Courtney Reagan<\/a> told us yesterday. A look at the s p 500 at the top of your screen. Down here at the big board its oracle unveiling the oracle solaris 11. 2 operating system today. A former nasdaq name that made the move. Larry ellison one of ours. I want to point out this is the old world coming into the new. When people see these softwares Service Companies<\/a> come down, a lot of them were gunning for oracle. They come on mad money were gunning for oracle. Oracle is offering a suite, not supposed to be, supposed to cut into the gross particular begins, suite of products. Software service for the coffee room, dining room and what these are obviously facetious extensions of what were seeing, human resources, information technology, we have one the other day for global payments, oracle is offering a onestop solution and i doubted them and wow, theyve really kind of come on in the cloud. Remember the cloud is low margin. Very low. And ibm, you know the fight of the soul of ibm. Obviously Amazon Web Services<\/a> we know is largely the other revenues in amazon. Again, what, sh, 1. 8 billion in u. S. Constantly bringing prices down when it comes to that. Really its all about the services you put on top of the cloud. The cloud is simple stuff relatively. Its what you combine. Sales force. Com. What work day does. Those are the thats the value added. They have 60 growth and they would tell you theyre winning every time an oracle contract comes up theyre in the bidding. People thought oracle was going to kind of roll over and play dead. Thats never been oracles style and mark herd is in there riding herd too. And theres another guy that he doesnt really back down. He doesnt back down whether it be a race on the sea or business. Hes a brutal competitor. Ibm, look at ibm. Remember ibm reported the most horrible quarter in show and then what happened . Warren buffet one of our 25 comes on air and says im not backing away from ibm. The stock has been a oneway ticket up ever since. Old tech, reclaiming the mantle. Dont forget microsoft using the word cloud three times before they get to windows in the Conference Call<\/a>. Yes. Windows purge quarter. Over at the nasdaq today, in for monica is a provider of data inste gration software did ring the bell. They raise guidance on some north american demand. Youve been talking about strength in trucking. Truck truck truck. At least a year. Revenues up 25 in north america. All you had to do was listen to Klaus Kleinfeld<\/a> on that alcoa call where hes called out trucks as being the strongest of the companies, of the divisions. When you think trucks you should think cummins. Although india and australia were considered weak and international in general relatively flat compared to whats going on here. Renaissance in america, caterpillar took back the night. Remember the United States<\/a> had been a big drag. Right. Residential nonresidential construction, highlighted and energy for cat, youre going to hear energy for cummins. Caterpillar is not done going higher. Remember david, what they were doing, appro po of april of 2000 people were shorting s p and going long wild growth. Its the opposite now. Just like that. Changed february 28th. Stock moves up to suddenly nobody likes the fact theyre spending anymore. Heavily for china. When did that change with amazon also. Youre right. Couple things i want to get to it can change back to. I dont want to make it sound like it can change back to. Allergan, so many reports involving allergan as you might expect yesterday. One Service Reporting<\/a> that they are at least considering shire which would be a tax inversion. Right. Another this morning reports of santa fe or j j. If you are allergans bankers, the annual meetings next week, they have time, that is one thing they have at this point. Theres nothing coming on at the meeting thats going to force their hand in any way. If youre their bankers at Goldman Sachs<\/a> and b of a, merrill, youre going to knock on doors, youre going to be happy to have that get out there, and put pressure on valeant to have to raise the bid if you do sit down to discuss it and try to hammer something out with them or come up with a viable alternative. The question comes back to tax inversions and the rate. If you are a company that is not inverted, for example, how are you going to be able to get the same synergies and or cost savings, the synergies between valeant and allergan are significant and that tax rate which will come down perhaps high Single Digits<\/a> which is higher than valeants current rate, how do you compete with that is a question. On the allergan side if they were to try to do their own buying shire, remember to do an inversion you need to issue over 20 of your stock. If you issue over 20 of your stock you need a shareholder vote and so if youre allergan you might be stuck in the position of okay, we need a shareholder vote to do the shire deal f it gets turned down, my shareholders are telling me to do the valeant deal. Thats Something Else<\/a> to keep in mind. Why do companies why is j j, one of my Favorite Companies<\/a>, going up on rumor they might be getting involved on the fact they cant do an inversion. I dont know. Nothing stops them from why not talk. People like acquisitions. Can you distinguish between pennsylvania law the last time i saw someone just say no was airgas. Any way allergan can just say no . I think its going to be difficult for them given the move up in the stock price. Really . Without doing anything. Youre talking about an unaffected stock price of 116. That is the slight bit of risk for bill ackman. Many saying he took virtually no risk and made a billion dollars in a day but the risk is they do although i would argue its pretty low they will simply be able to say no, thank you. Its is incumbent on them to do something. Every day shire up. Yesterday i heard shire was im sorry. We have a lot of breaking stuff. Speaking of ackman apparently the hatchet has been buried between ackman and carl icahn. In each others heads or actual. Ackman spoke with icahns assistant saying im calling to forgive him. He said, he didnt see anything illegal about bill ackmans pershing deal with valeant. Whats next . Get them on the air together . Greenberg on the street called a hail mary pass to get rid of the dividend and buy back the stock. I see ackman say you know what, i dont hate herbalife as much as i thought i know the hatchets will stay buried. This could be a cold war hiatus. Not unproductive for both of them to be at each other so much. Carl last week was the one that started it by referencing marty lipton originally and saying well, the enemy of my enemy is my friend. Theres glasses nose between parastrike ka between the two. Real quick on sprint, jim, which i know youre mad money viewers follow closely. The stock is up a bit, average revenue per user coming down. The ebitda number was okay. Dealing with an accounting change and theyve lengthened the time in terms of the Service Plans<\/a> and the equipment and so that has had a beneficial effect for verizon or at t or sprint. This is the first one thats gone up in this class. Everyone has been worried tmobile will come in and say were going to slash and burn. The key question continues to be, frankly, when and i believe its when, not if, ma sa sun which controls sprint will try to get a deal done with tmo. That they will bring the regulators in and get in one of the ugliest fights of all time with tom wheeler. Want to talk about burying hatchets that will be good. Working on sprint during the break. You were . Did i blow away did i stop trading . Yeah. Sorry. I have a new stop trading. A couple more where thats coming from . If youre not watching, i got to tell you something youre going to be like what did i miss . You will have. All right. Im going to be there right here at this seat. We have no choice. Well true, but were joined at the hip. And those who think im fighting with him, could you please tell people i actually like him. I will make that clear. Its all for the camera. Merck doing its part to help out the dow and bob pisani is on the floor. Got a nice move. Dow up 67 points thanks very much, carl. Energy moving nicely, Aerospace Stocks<\/a> doing well. Biotech doing well today. Health care on the upside. Lot of sectors moving. Gold stocks the only to the downside. My email is full of sell and go away, stage commentaries. Everyone says worry about may. Can i point out for the last four years, may has been a crisis month, every one, and im not saying sell in may and go away doesnt exist but im saying, its been greatly exaggerated by the crises weve seen in the last four years in may. 2010 we saw a euro debt crisis in may, 2011 portugal greece prices, 2012, greece was going to exes it the euro and everything, the euro was going to fall apart. That was all in may. 2013 bern nar ki talking abe the fed going to taper and Interest Rates<\/a> moved up. Whats the crisis in may of 2014, some saying its going to be the ukraine. Its exacerbated by the crisis so dont automatically think may is going to be necessarily a down month. Let me move on here and talk about what im concerned about. Everybody knows about the drop from biotech from their recent highs. Everybody knows about gold miners down from their recent highs. Im a little more concerned about what i am seeing in Home Construction<\/a> stocks down 11 from their recent highs, bank stocks are down 7 , airlines are down 5 and even semiconductors a Leadership Group<\/a> down about 4 . Those concern me more. Home construction banks, airlines and semiconductors a lot more than biotechs and gold mining stocks off their recent highs. Thats what im watching particularly the bank sector right now. Lets talk about earnings for a minute. I want to point out a couple companies, mgm had great numbers. They did well. For all the talk of makau, 65 still in the u. S. Parker hanna fin, coach a disappointment they were on the light side good year tire on the light side. Before i toss back to you, david, were still dont have any announcement from any ipos. Nothing from alibaba. This goes on another week definitely ipos will be on a hiat hiatus. Ibm annual meeting today. Good call. Thanks very much, bob. You know, one thing that has not been on a hiatus is merger and acquisition activity. I wanted to come to another industry talked about about a month and a half, two months ago as a consolidation play. Its been quiet since. Perhaps shouldnt be based on what im hearing. Im talking tobacco. Yes. Where youve got bat opening 42 of reynolds and expiring in july and continued rumors about reynolds buying laurel. What i can tell you at this point, there is a lot of activity amongst bankers and lawyers involving potential consolidation and a lot of it seems to revolve around laurel hard and reynolds and what would have to be a divestiture of reynolds of significant brands in menthol because laurel hard, 80 or so of its sales come from the new port brand of menthol cigarettes. Thats a great brand. If you reynolds and want to buy laurel hard you have to divest cool, winston, maybe salem, in order to get past the antitrust regulators and a lot of the conversation that seems to be going on right now, seems to be focused on the potential divestiture or possibility of finding buyers for those brands. Those prior to embarking on a potential for reynolds for laurel hard. Still around speculation. I can tell you theres a lot going on but i cant tell you theres going to be a deal. Bonny herzog comes out again, she said a number of times, laurel hard reynolds combination continues to be in our view, says herzog, Reynolds American<\/a> can pay up to 80 a share for laurel hard would incorporate synergies and cost savings of 400 million. That merger would increase sales, greater retail leverage and help maintain a rationale competitive environment and you saw some of the brands in question there. B. A. T. Would probably sign off on such a thing as an honor of a significant amount of reynolds. Ibm raising dividend as we talk and one of the things my value added on lorillard, the esync business, since the fda has told you what the deal is, lorillards esync business is the Fastest Growing<\/a> part of this market. Lorillard is the only Major Company<\/a> that has esigs. They can afford to lose cool, a great brand no great brands if youre from my house but this is esig generated too. I think lorillard is worth a tremendous amount again this is another area of consolidation. We will focus lorillard shares had moved up in march when the early reports came around. Its been quiet but not quiet when it comes to at least the talking. Lets head to the bond pit ps Rick Santelli<\/a> at the cme group in chicago. Rick . Thanks, david. Maybe the best way to look at tens is a twoday chart because were virtually unchanged in all maturities from yesterday. The game becomes to the 2. 66 close on friday. Up five basis points. Theres your geopolitics in action. February 1st chart, really shows you were in a range pure and simple, most likely 2. 79 to 2. 82 is the top of the range. If we look at another area that i think is more important, our yields versus boon yields 9. 5 year wide. Right now where its trading, 121 basis points separation. Here you can see the chart going back to october of 2005. The ruble, the good way to assess whats going on geopolitically, dollar versus ruble for twos days, dollar down down. If we look at it since march 1st, cry mea referendum was midmarch. Theres what it looks like. The dollar continues to be lower from that chart as well. Maybe the area we should pay most attention to is in our backyard the dollar index. Heres the year to date chart. I know that when it comes to the yen its a separate ball game but whether the ruble or the wan, a lot of tug of war going on with the dollar. It consistently has been trading under where it closed 2013. Carl and david, back to you. All right. Rick, thanks so much. When we come back, Buffalo Wild Wings<\/a> ceo sally smith on her companys better than expected numbers. Well tell us what shes working on. Your pizza concept. Its revving up. Stocks up 5 . Were back in a minute. Minute. Bancorp. We got a wild within here. Shares of Buffalo Wild Wings<\/a> trading higher after First Quarter<\/a> earnings easily Beat Estimates<\/a> top and bottom line. Here first on cnbc is one of my favorites, 21 ceos sally smith, great to have you on the show. Thanks, jim. Always great to talk with you. All right. Sally talk about a couple things. People were betting against you. We talk about how foolish that has been. You had raw costs go down because of wings, top line go up because of march medness and olympics. Secular trends or cyclical in wings and secular for sports . Everything came together really in the First Quarter<\/a>. Certainly our revenue beat strong samestore sales. We opened strong restaurant openings on our new restaurants or average unit volumes are exceeding our samestore sales and some of the lowest wing prices weve seen in a while. A couple things, carl mentioned a concept, these are the new legs of Buffalo Wild Wings<\/a>. He mentioned pizza rev. I see the emerging and International Coming<\/a> on. I see you are doing things to make this brand go international not unlike mcdonalds. Is that really a better road map than right now than in the u. S. . I think we have both opportunities. We said we think we can have about 1700 units in the United States<\/a>. Were just at a thousand. Plenty of runway there. Weve been working on international for a couple of years. Really trying to find the right partners. Theres a huge demand for American Brands<\/a> internationally. That and emerging brands which we think is an opportunity to continue to remain a High Growth Company<\/a> for the long term. All right. Why the switch, coke to pepsi . We thought that pepsi really met what we were looking for as well as what our guests are looking for. They have strong beverages, mountain dew being a favorite among our guests as well as some of their partnerships in sports and nfl. Their sponsorship of the nfl plays right into our experience and what we try to give our guests as a great football viewing experience. All in all a win. All right. Sally, really kind of heralded you guys as also early adopters of technology. How much did social media do for you this quarter and electronic tablets on the desk top . Weve had a presence in social media for some time, whether on, you know, one of the dotcom sports events. Were also rolling out tablets in all of our restaurants. Certainly for orsdsering which will come later in this year, but our guests can come in and get the latest sports news any kind of news, theyll be able to certainly they have or cads and games arcades and games, another reason not only for sporting events but another reason to come into Buffalo Wild Wings<\/a>. You gave a preview of samestore sales were excellent. Of even the first beginning of the next quarter seems like the samestore sales are consistent and no point did i notice anything involving the weather at your company. Well, we think that if other restaurant groups are having weather issues were probably having those as well. But we have a strong Operations Team<\/a> and our philosophy is if they didnt come in yesterday, you better get them in the door today. Its really hard for us to tell if weather is impacting us, you know, guests will come out if theres a great sporting event op. Well, sally, once again, fantastic delivery. Those who bet against you jim, thank you. Sally smith who is the the person in charge of Buffalo Wild Wings<\/a>. And they just delivered a lot of wings to the exchange. They did . Ive been told to thank her. Spicy. Over by the balcony. Youre about to get off the show. Thats good. Thats a good wing right now. Feels like around 1 00. Absolutely. Well get stop trading with jim in a moment and tomorrow, the ceo of twitter, dick costow lo will join us. The quarter, new initiatives, whether or not they drive tv ratings and more. Dow up 87 and the utilities a fresh intraday high. Squawk on the street is back in a minute. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Female announcer sleep trains interest free ends sunday. Orks at ge. Its your last chance to get three years interestfree financing on beautyrest black, stearns foster, serta icomfort; even tempurpedic. Plus, get free delivery, and sleep trains 100day low price guarantee. But hurry sleep trains interest free for 3 event, ends sunday. Sleep train your ticket to a better nights sleep trwith secure wifie for your business. It also comes with public wifi for your customers. Not so with internet from the phone company. I would email the phone company to inquire as to why they have shortchanged these customers. But that would require wifi. Switch to comcast Business Internet<\/a> and get two Wifi Networks<\/a> included. Comcast business built for business. Time for cramer and stop trading. Going back to the well on the time. One of americas great doctors, also my doctor, on cbs in the news talking about the American Academy<\/a> of neurology saying we have to go allin marijuana, allin marijuana for ms, for epilepsy, all in marijuana for pain, cancer. Only one company that has a product that people respect and that is this gw pharma, down a lot from its high, billion dollar uk company. What happens to uk Irish Companies<\/a> in the drug business, you cant do experimentation on marijuana in this country because its a class one issue but you can in england. This is the company that is going to solve a lot of the pain problems. Dont forget, digitalis is from fox club. People always developed drugs plants. Second time you mentioned that name. I believe. If you want to know go to the Morgan Stanley<\/a> piece dated april 22nd and the street. Com on the piece about how it could be used to combat autism. Tonight on mad . Okay. We got the triple, we have underar mur kevin plank going to see him, lot of tremendous guys, spirit, ben ball danza, if you walk into the airport youre going to get charged. Charging for overhead bins. Charging for overhead mind shirt. Thinking going spirit. Costs me ten dollars and eaton i cannot believe this show and our network. Im proud. Were going to miss you next hour. See you tonight. Hes coming back. Coming back. Yeah. Triple latte, i got to have a triple cappuccino swim wet. Also Consumer Confidence<\/a> in just a moment. Oment. Why relocating manufacturingpany to upstate new york . I tell people its for the climate. The conditions in new york state are great for business. New york is ranked 2 in the nation for new private sector job creation. And now its even better because theyve introduced startup new york dozens of taxfree zones where businesses pay no taxes for ten years. Youll get a warm welcome in the new new york. See if your business qualifies at startupny. Com in a we believe outshining the competition tomorrow requires challenging your Business Inside<\/a> and out today. At cognizant, we help forwardlooking Companies Run<\/a> better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Welcome back to squawk on the street. Breaking news from the conference board. April read on Consumer Confidence<\/a> unchanged at 82. 3. But 82. 3 is unchanged as it may be, is still the best level since january of 2008. So Consumer Confidence<\/a> at least from the conference board, holds its wafty levels much has probably to do with the resurgence in stocks. Sa sara, back to you. Thanks very much, Rick Santelli<\/a>, on the breaking can Consumer Confidence<\/a>. Well start off with one of the big movers of the morning, coach. Shares of the luxury retailer down sharply today after the companys thirdquarter results. Courtney reagan back at hq with all the details. What happened at coach some. Nobody expected a Strong Quarter<\/a> out of coach but demand for handbags in north america especially weak for the legacy accessory maker. Coach beat consensus by 7 cents, reporting earnings of 68 cents a share, profit still down 20 , revenues came up short at 1. 2 billion. North american samestore sales down 21 , worse than the expected 15 drop. North america is the lamgest market for coach and largest problem too. International sales rose 14 , with sales in china specifically strong up 25 . But you isolate north american sales and get an 18 decline year over year. New ceo victor luis blames north america sales on weather and late easter. Though on the Conference Call<\/a> executive says they dont see any improvement in u. S. Comps in the Current Quarter<\/a> and expect sales to fall about 10 . Weather and a late easter dont explain that. Beyond q4 he refers twice in the release to excitement around the fall collection led by new creative director. On the Conference Call<\/a> coach says it hasnt tested any of the new product. Cnbc contributor stacy widlet says no pressure, stuart. Believe it or not, not even though shares are down more than 8 right now, the street may be giving coach a pass on the terrible quarter because so many are looking towards the influence that shoppers will finally see in the fall for the very first time. Coach shares have traded in a relatively narrow range over the pass three months. Weather and all, that is, of course, until today when we got more of those details. Simon some. Thank you very much. In the meantime the market up 89 points, the dow up 89 points and the strong running coming from the base yesterday. Analysis on where the markets in general are going, jordan is managing director and Portfolio Manager<\/a> with matrix asset advisors. Jordan, good morning. Good morning. We keep getting these very big swings, but at one point yesterday it looked like on the s p 500, we were going back to exactly where we started the year. Four months in, weve overall gone nowhere. What are you telling your clients . Well, we think that theres going to be a fair amount of volg tillty this year, more so than last year. We expect for the full year, the market to have returns similar to historic norms, 8 to 10 , that would be including dividends, but we do think that individual Stock Performance<\/a> and selection will be much more important than its been in the last few years. So it pays to be much more selective. We wouldnt chase rallies like today. Instead we would rather try to be more selective and pick stocks up on dips. We think its likely there will be some type of a correction during the course of the year, created by some type of macro event. And we would not be excited to be in longterm bonds because we do think that rates will move up over the course of the year. What does that mean, some sort of macro event . Well, who knows. It will be some kind of exogenous event, could be something as simple as Russia Ukraine<\/a> becoming more difficult. Okay. Dont know. Something out of the ordinary. I wondered if you were going to say growth is disappointing and perhaps wont get the growth the market assumed. If you look at whats happening in the market you have strong rotation. Weve spoken many times about the high flying tech stocks, biotech, social media, that have lost a huge amount of value but you see weakness in housing. In financials. Economically sensitive areas, the utility index is pushing up towards an alltime high. What do you do with that rotation . Do you follow through . Well, we look at the individual companies and their own valuations. So we think that some of the high flyers, which have come down, are still at fairly lofty valuations and hard to justify. We contrast that with other Old Technology<\/a> dinosaurs like microsoft, cisco, hewlettpackard, where their actual results have been quite good and their valuations are very attractive. So we wouldnt necessarily look at the rotation in a kind of a sector base. We would look at individual stocks and where they are most attractive. Do you need to strategize based on the return of m a activity weve been seeing, the mega deal is back, clearly health care, pharmaceuticals have been an exciting place for deals, but do you want to target another group of stocks where you see we might see more activity . Well, theres the potential for activity weve seen in terms of size, almost any size company is vulnerable. We do think that there could be some consolidation that could take place in the Consumer Products<\/a> names where growth has been a little bit more difficult but there are a lot of synergies by combining companies together. Do you want to name some names for us, jordan . We dont speculate really in specific names when talking about takeover targets but we do think that m a activity will be supportive of a lot of stocks that just havent really participated as much. So, jordan, the Federal Reserve<\/a> is meeting. We have a lot of data tomorrow. Weve got the gdp data for the First Quarter<\/a>. Friday the employment report. And still you have the fed that is presumably going to continue to cut back on the taper. Is that money printing eases back into the second half of the year, are you confident that the market can still return the sort of gains that you are expecting, despite the fact that the liquidity from the feds will be drain . Well, i the accommodation will be eased somewhat, although we dont think interests are moving Interest Rates<\/a> are moving higher soon. The general Interest Rate<\/a> environment will still be very will make stocks be very competitive with bond investments. There will be some lower liquiditity in terms of general support to the markets, so maybe some of the frothiness may come out, but again, individual stocks, individual companies, are performing well. We expect the economy to continue to perform well and we think thats the reason why Interest Rates<\/a> will eventually move up because stocks and the economy are doing well. Thanks for the advice, jordan. Nice to see you. Jordan poser joining us from matrix asset management. 86 of tuesdays this year the stock market has gone up. How do you know that. Dave lutz emailed it. Strip out tuesday, stocks are down 8 for years. Can we strip out mondays as well. How about that. And wednesdays and thursdays. Just come in for fridays. I like thursday, the anticipation. We have a big show coming up. Howard schultz is here at the nyse. A member of the cnbc 25 list. Plus number 18 on that list, meg whitman, we will hear from her about what made her a success and what she thinks is her biggest mistake. The ceo of our parent comcast, Brian Roberts<\/a> will join us live and talk about time warner, Liberty Media<\/a> and a lot more. Dow is up 85. Squawk on the street will be right back. Right back. [ bagpipes play ] make it happen with fidelity active trader pro. Its one more innovative 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 theyve been through lately. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit<\/a> card at the big tire event. See what the ford experts think about your tires. At your ford dealer. Welcome back to squawk on the street. Alliant tech systems, the largest ammunition maker, said it will merge with orbital science after spinning off its sporting gun business. In addition to ammunition and guns it makes small and medium space rockets for the military and government uses. Trading up 21 . Alliant up big trading up about 8 on the day. Carl, back over to you. Dom, thanks a lot. In celebration of our 25th anniversary cnbcs created a list of the 25 most influential and transformative people in business in the last quarter century. Earlier today, we revealed that list and how they were ranked. All day long on cnbc were telling their stories. Reported by Tyler Mathisen<\/a> who joins us back at hq. Thanks very much. Tough, competitive, with a bristoling dare i say electric skl intelligence, perhaps the most iconic ceo of the past quarter century, studied in Business School<\/a>s, imitated by successful Business People<\/a> around the world, hes also number 12 on cnbcs first 25. Hes the quintessential celebrity ceo and a business icon. Jack welch wrote the book on leadership on how to wake up a sleeping Corporate Giant<\/a> and books have been written about him. More than 25 of them, all trying to explain the welch way. I dont think you can take a ceo and teach them some of the things that game naturally to jack. I think he was born with those gifts. Today show host matt lauer has known welch since 1992p. Lawyer lauer was a young news caster and welch his boss, chairman and ceo of General Electric<\/a>. Jack is one of the most competitive people ive ever met. Theres no question about it. In business its legendary. Jack wanted to win. Jack is one of the ultimate industrialists of our time. Took this massive company, founded by edison, are you kidding me, and just made it ruthlessly efficient, right. When you worked with jack, you wanted to work. You wanted to execute. You wanted to take whatever you were doing to the next level. Welch became ceo of ge in 1981. It was a slow and steady profitable behe must with 25 million in annual revenue. The young maverick, just 45 years old, immediately started reshaping the company. Jack set the standard for deciding which assets to keep, which ones to jettison. Out were slow growth businesses like Small Appliances<\/a> and tvs. Welch could see the japanese were taking over in those industries. He spent billions moving ge into services and technology. He cut the payroll by 100,000 people through layoffs and divestitures, earning him the nickname neutron jack. I think neutron jack referred to that the building is Still Standing<\/a> but some of the people are gone. And the neutron jack label was about being insensitive and uncaring and i will tell you in my personal experience those are two words i would never ever use with jack welch. The merger of General Electric<\/a> and rca is an excellent opportunity for both companies. Arguably the most important deal of welchs career came in 1985 with the 6 billion purchase of rca. With it came Television Network<\/a> nbc. Since General Electric<\/a> bought nbc they said theyre not going to interfere with any of the programming. Not true. I saw miami vice the other night. Tubs were busting the maytag repair man. Welch launched a white collar revenution. He removed layers of bureaucracy, gave managers free reign and created a culture built around speed, quick change and openness. He understands how to inspire people and really find ways to take the best ideas that people have, and move them up and get everybody behind it. And that is a very special skill. Its a people skill. Welch brought sick sigma to ge a Quality Program<\/a> designed to remove defects from every function of a company. Welch didnt invent it but no one had ever used it so broadly or effectively. Which was basically an attempt to drive your errors on the production line to zero. You know. I mean talk about aiming high. Consider welch did this with a work force the size of the population of pits burg. You didnt want to let the guy down. He had a way of creating a loyalty in the people that worked for him where they would walk through fire for him. And i dont know how you do that, but jack had that knack. Throughout the 1990s, ge continued to grow. Its market value reached 410 billion, up from 14 billion, when welch took the helm. Some questioned how those numbers were generated. A lot of its earnings power over really much of the 90s and clearly into, was a function of not of all of the things they were doing that you could see the light bulbs, the turbine engines, the health care business, but ge capital, which was effectively, a bank masquerading as all of these things. The earnings looked smooth. The smoothest earnings around. He would always hit his numbers and he was able to hit those numbers in large part because he had this money machine that was printing money behind him. After 0 years welch 20 years welch retired as ceo in september of 2001, trans formed General Electric<\/a>, changed people and made a lot of people a lot of money. Ge was the most valuable company in the world. Its a run that earned welch the title manager of the century by fortune magazine. There are students in Business School<\/a> across the country learning the world of business as seen through the eyes of jack welch and using him as an example. He wrote the book on corporate leadership and anybody whos trying to run a big company has definitely studied jack welch to see how he did it first. I think his legacy will be, you know, summed up in a word like excellence. Push yourself to be the best you can be. Push yourself to help the people who work around you. Go home every day being able to look in the mirror and say, im proud of what i did today. I accomplished something. I helped someone else. I made a difference. Thats the way jack has lived his life and inspired others to do as well. Motivator, epic wealth creator, jack welch one of cnbcs first 25 rebels, icons and leaders. In the next hour the story of number 11 on the list here on squawk on the street, a side note, we compete with him. Tonight at 7 00 p. M. , a special reveal of the top five. Folks, back to you. Thats a great spot, tyler, really captures him. I think talks a lot about as it should the generation of managers who are incorporating that blueprint that he essentially wrote. A big reason america is in the spot its in. You think back to the early 1980s or thereabouts, that was sort of predated welch, but remember, it was all about japanese management style. Dem iming druker and all of the pushing a japanese style of management. Welch was an american original and one of the points that you and others made, was what a motivator he was. He made you like a lombardi. He made you want to play for him. Ty, wasnt just in this country 12, 13, years ago i hosted a q an a in a frankfurt theater in germany when he published straight from the gut. The germans could not get enough of what he was saying, particularly, of course, the idea which everybody spoke about at the time that you would challenge the bottom 10 of the work force. If they werent performing basically shown them out at one form or another. That was a game changer in a way a lot of people felt about work forces. It may have had its day. I dont know. But it was very powerful at the time. I think thats really right. There are lots of ways you motivate people. Motivate them through awards and you can motivate them through some fear as well and how you hit the balance of reward and praise and a little bit of motivating fear is the art of very good managing. You know, ive worked at General Electric<\/a> owned companies for a long time, cnbc was owned by General Electric<\/a> for a long time, im not sure that lop 10 or 15 was followed in every business, every year, year in and year out. The truth was if you didnt perform, you knew you were on a short leash. One of the dynamics thats getting a lot of attention op twitter in response to that spot. Thanks. Well have a lot more with tylers special tonight, 7 00 p. M. Eastern tonight. Some breaking news on housing. Diana olick has that for us. Thats right. The u. S. Census bureau just reported that the Home Ownership<\/a> rate fell to 64. 8 in the First Quarter<\/a> of this year. Thats the lowest level since 1995 and its the first time weve seen it cross below that 65 rate. This number doesnt usually move very much quarter to quarter but it took a big drop down from 65. 2 at the end of last year down to 64. 8 and its particularly interesting given your interview earlier with Robert Shiller<\/a> who talked about how prices were so high, but sales were lagging and he talked about investors in the market that were not speculators but that had come in and really put a floor under his market. Investors own these homes. Americans are not opening these homes. They are not coming back into Home Ownership<\/a> the way we expected and as those investors pull out if we dont see the sales from regular buyers come back, we could see yet another downturn in housing. Again, 64. 8 the lowest level in 19 years. Simon . Diana, thank you very much for that. Diana olick. Up next on the program, its been a rocky year for twitter. The stock sinking about 35 so far. How should you be playing it ahead of the Earnings Release<\/a> tonight and perhaps more importantly the expiration of the lockup of 20 billion worth of stock on monday. Latest starbucks ceo Howard Schultz<\/a> live here at the new york stock exchange. Were back after a quick break. No matter what kind of business you own, at t Business Experts<\/a> can help keep it running. Seamlessly. So you can get back to what you love. When everyone and everything works together, business just sings. Tdd 18003452550 life inspires your trading. Tdd 18003452550 where others see fads. Tdd 18003452550. 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That would be 110 jump in revenues from last year, but that biggest number to watch is going to be, of course, monthly active users. Analysts expecting a 5 quarterly increase to 255 million. Thats important because user growth has been slowing for the company. One reason weve seen shares tumble about 35 so far this year. So twitter has been rolling out product changes to lure more active users and actually to reengage dormant ones which the Company Calls<\/a> its biggest opportunity. Also keep an eye on advertising revenues. Thats a bulk of twitters business as the company ramps up its ability to cash in on the active users it already has. Mobile will make up at least three quarters of that. Expect lots of hype around mo pub the mobile ad network the company is leveraging on and off the twitter platform especially since there are the rumors that facebook will unveil its own competing ad network tomorrow. Data licenses, thats another revenue stream ta could get bigger now that twitter has bought ganip. Other acquisitions two for tv and twitters first major stock lockup expiration next month. Shares of twitter trading up over 1 . But still, well off its 74 high from december but still above its 26 ipo price, carl. Morgan well see what happens tonight. Of course be sure to tune in tomorrow when twitters Ceo Dick Costolo<\/a> will join us live for a first on cnbc interview 9 00 a. M. Interview and being twitter tweet us with the asktwitter with your questions for cos toe lo, tomorrow at 9 00 eastern. Straight ahead Container Store<\/a> shares are falling sharply. The company blaming harsh Winter Weather<\/a> for a difficult Fourth Quarter<\/a>. The companys ceo and cfo will join us live for the first reaction to the results after the break. At your ford dealer think . They think about tires. And what theyve been through lately. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit<\/a> card at the big tire event. See what the ford experts think about your tires. At your ford dealer. [ male announcer ] when fixed income experts. Work with equity experts. Who work with regional experts. Who work with Portfolio Management<\/a> experts, thats when expertise happens. Mfs. Because there is no expertise without collaboration. Mfs. That corporate trial by fire when every slacker gets his due. And yet, theres someone around the office who hasnt had a Performance Review<\/a> in a while. Someone whose poor performance is slowing down the entire organization. Im looking at you phone company dsl. Check your speed. See how fast your internet can be. Switch now and add voice and tv for 34. 90. Comcast business built for business. Check out shares of Container Store<\/a>s sharply lower this morning down almost 6 . Profits surging but fall short of what analysts were expecting for this company. That rough Winter Weather<\/a> hitting samestore sales. Joining us from dallas, texas, first on cnbc, Container Store<\/a> ceo kip and chief Financial Officer<\/a> jody taylor. Welcome to you both. Thank you. Glad to be here. Kip, i dont know if a lot of people realize this, you have been leading Container Store<\/a> since 1978. Have you ever seen a winter like this impacting the Retail Business<\/a> . No. In 36 years this is the worst winter weve ever had. 33 or so years of our allimportant sale this is the worst weather weve had. You know, we cant control the weather. The 28 stores that were most impacted by weather we have 65 stores, the 28 that most impacted by weather had a comp store increase of 7 points higher than the stores that were not impacted by weather or not impacted as much. We still had like a 12. 3 ebitda for the quarter in spite of that over7 swing. So weather, weather, weather, we dont like to be able to talk about weather but i think we have to this quarter. The other thing thats interesting most retailers have a very poor january, february. At the Container Store<\/a> thats our alpha store, our most important two months of the year. Were ready to be past the Fourth Quarter<\/a>. We still had an average ticket increase of 6. 5 . Something we can control. And, you know, the mean wicked witch is dead and were on to the next quarter feeling great. I want to talk about the ticket sale or average transaction but jody on the weather, what happens to the sales given it is such a critical period for Container Store<\/a>, are they lost or do you expect them to come back for the rest of the year because of pent up demand . You know, thats great question. For us, as kip talked about, the Fourth Quarter<\/a> includes the period of december, january and february, and we have a really unusual pattern of sales where january and february are when we conduct our annual alpha sale. So we have over 60 of our profits that are derived during the Fourth Quarter<\/a>. Were confident as kip said as we head into this fiscal year. Annually we feel were heading into the right direction. Weve got a lot of really great things going on here and we think, you know, our loyal customers continue to adore our brand just like they have always. Well, you know, we a lot of very positive things in the Fourth Quarter<\/a>. The only bad thing was that the stores were closed a lot. So, you know, the traffic was down because of the weather. Every other metric we follow closely were encouraged by for the Fourth Quarter<\/a>. And ill tell you what, im kind of looking forward to the Fourth Quarter<\/a> this year ill gamble the weather wont be like that again. Hopefully youre right for all of us. We felt it here too. Kip, you mentioned one of the positives 6 increase in ticket sales or the amount per transaction. What would you say is the reason behind that . Are you raising prices or is this a sign of Economic Confidence<\/a> . Consumers spending more . No. Its more items in the basket. Were one of the only housewares companies, retailers i know of, theres one or two, people use shopping carts and theres another item or two, our average item costs about 7. Theres another item in that shopping cart. Its better salesmanship on the part of our great high service employees, were an employee first culture. Spend 280 hours a year training our employees and so you can control average ticket. You cant control the weather. Were just proud of that. I think it does show a little bit better Consumer Behavior<\/a> in that theyre buying more items per trip and we look forward we think that will continue this year. You know, kip, the analysts say that sometimes wall street will ignore the longer term opportunities and the fact that your stock is down 35 so far this year, sets it up for a great entry point for what they believe is one of the best growth stories in their coverage. I guess it comes down to the idea as to whether you should have ipoed in the first place, because now that youre in the Public Market<\/a> youre going to take a lot of pressure when you have a quarter like this, that you wouldnt have done if you had stayed off the Public Market<\/a>s. Do you think it will change your behavior . Will you end up having to do things that you might not otherwise have done, as a growth story . No. Were going to manage for the medium and long term and thats why hey, Fourth Quarter<\/a>, weather weather weather, were looking forward to this year. We have 65 stores as we stated we think we conservatively have over 300 stores in the United States<\/a> alone. We discovered something in the last couple years that by putting stores in markets the size of indianapolis, raleigh, charlotte, that sort of middle million and a half greater metropolitan area, our sales are almost as good in those stores as in the l. A. , chicago, atlanta, dallas sized markets and the cost of real estate there is so much lower that were getting like 23 , four walls ebitda out of the stores. Never before have our new stores contributed so much to our profitability. So weve come out here in the last couple of days and said look, weve given 10 Square Footage<\/a> guidance and were raising that to 12 Square Footage<\/a> guide an and what were hoping is with continued Macro Economic<\/a> improvement well get more Retail Real Estate<\/a> Development Improvement<\/a> too. The more Retail Real Estate<\/a> Development Taking<\/a> place in the u. S. The more turn key our locations become and with the same finite supply of capex dollars you can open more stores with the same amount of dollars. Another thing is that before the Great Recession<\/a>, we werent as attractive to the best develop and the best centers. Now it takes 35 years to reach this point. Now were the first call by the best shopping centers, best developments and thats exciting too. We want more Retail Real Estate<\/a> development. Kip, weve got to leave it there. I know youre hoping for the growth and saw that in the call also for the better weather. Both of you thank you so much for joining us from dallas, kip and jody of the Container Store<\/a>. Thank you. Coming up on the program, starbucks ceo Howard Schultz<\/a> will be live here at the new york stock exchange. You dont want to miss that interview. Were back after a quick break. Those Little Things<\/a> still get you. Cialis tadalafil for daily use helps you be Ready Anytime<\/a> the moment is right. 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Samantha, do you take kevin as your lawfully wedded husband. Or would you rather have a new caaaaaar say hello to the seasons hottest convertible. Ohhh. And say goodbye to samantha. [ male announcer ] geico. 15 minutes could save you 15 or more. All day today on our network we are revealing the top 25 rebels, icons and leaders for the last 25 years. These are idols, people who made the most profound impact on Business Finance<\/a> since 1989 when cnbc went live. Who has had a bigger impact in terms of the corporations and the stocks some i dont know. How about this guy, Howard Schultz<\/a>, the chairman and ceo of starbucks and a member of cnbc 25 list. Congratulations. 14. You apparently met with number 7 before you came here. Got good intelligence. Spent the morning with oprah as we introduced oprah kchai. Im humbled and honored to be on the list. Your background what is inspires a lot of people. You did not come from silver spoon environment where it wasnt a lot of risk to get started, did you . I think we all carry our childhood experiences with us. I grew up in a poor family, projects. I think thats well documented. I carry that with me every day and candidly i carry the scars of being that poor kid in the fear of failure. Thats what drove me all these years. At the same time you have installed a safety net in 20,000 stores for the videos who work there . I individuals who work there. I have tried to build the kind of company my father never got a chance to work for. Education, health care, equity in the form of Stock Options<\/a> and more than anything else, demonstrating that you can make a profit and do good things for other people. This is important because i think a lot of people have said you know what, maybe business isnt such a good thing. Business got a bad name all lumped together and yet the profit experience does not necessarily exclude treating your employees well. I think we learned early on as a consumer facing business, that our customers would respond to what we were doing if, in fact, there was transparency and they understood what we stood for. And as a result of that, i think we have made more profit and built more shareholder value by demonstrating that success is best when its shared. At the same time, youve had reversals. I remember you calling me oh, god. When you came back. It was brutal because you had take an leave of absence in 2000. Your company, youve never wanted you wouldnt do it. I was begging you for dump on people but that wasnt your style. You came back, disappointment turned back into greatness for shareholders and people. What is it like to watch your baby, kind of fall on hard times and resurrect it. I remember that phone call. Thank you. You were tough on the stock. Thats why i called you to say listen, i respect your opinion, youre valuing the stock but were going to turn things around. This is about love. This is about responsibility. About love. This is business but love. It is about love, humanity. The difference between perhaps others and what i try to do is i take this so personally. And our people take it personally. When you are personally engaged and youre not going to be a by stander you have to will things to happen. In 2008, the whole world was against us and we said were going to show up and show up every day. Now, lets talk about the idea of what happens when i go to starbucks, you go to starbucks. I get my triple venti cappuccino. Someone last week said can you pick me up a dirty chai. Everybodys own starbucks. A dirty chai. What is the secret menu and posted menu at starbucks sfla. I dont think we ever planned for people to start ordering things that were not on the menu. Whats happened is one of the keys to the success of the company has been the ability of the customer to customize. And that customization has given rise to things we never believed were possible but also a credit to our people for being able to make it. You can make your own starbucks in ways i was just in last week, i was in indonesia and i walked into a starbucks in bali and i walked in and i heard people ordering things that ive never even dreamed were possible but again, its the local relevancy of starbucks around the world now in 64 countries. Local relevancy has to do with something that is uniquely american capitalist and i want to talk about with you. The worlds changed. We were enemies with vietnam for substantial portion of the of vietnams existence. Vietnam is now a remarkable country for starbucks. Talk about starbucks capitalism and how its changed relations with countries. You know, i think one of the great things that business can do, where politicians perhaps can not, is that we can introduce things that are american, that are western, and be a bridge and be in a way allow people to understand nous a different way. Were Opening Stores<\/a> today in vietnam. I was just in cambodia. Hard to believe. Cambodia. 2 Million People<\/a> slaughtered, a terrible tragedy, people felt we looked the other way and theres no animosity. There is still a halo on america and i think a business can carry that flag. In the meantime youre not stopping. I was shocked when you said youre going to give troy a little bit of the day to day a remarkable manager, an youre now thinking about big picture technology. Not just coffee. Heres the thing. Theres no Consumer Brand<\/a> on the planet today that can endure and succeed unless it is being integrated seamlessly with a digital social and mobile strategy. We are leading in mobile today but that lead is not something were entitled to. We have to constantly reinvest, not embrace the status quo and were going to build a mobilized business we think is going to be significant in the future. Among the new initiatives, theres so many going on, nighttime day part, lunch day part, technology and conceivably white label of Technology Given<\/a> to other companies. You have Consumer Products<\/a> goods you have not talked i have not asked you about. Dont forget about tevania. Which you rank these are going to produce both longterm and shortterm results that will drive the results . My answer might surprise you. Starbucks is still the core business and i think the growth vehicle for the company. People will be surprised how many stores we will be able to open. However were sitting with 350 tee vanna stores, well over a thousand theres going to be. Theres going to be tee vanna stores outside of the u. S. But the mobile platform and what were going to be able to do with Digital Technology<\/a> on the starbucks mobile platform i think is going to surprise people. The thing im worried about. Please. Put to rest my equkwaums. Sam walton one of the great previous generations always wanted to get in that pickup truck and visit his stores. You cant visit 20,000 stores. How do you know the quality stays whole. Thats a fair question. The company is completely decentralized by seasoned people running starbucks that understand the culture, values, understand the customer is most important. We are all visiting stores every single day. We are not sitting in some white tower in seattle. We are in the mix in the mud with our people doing everything we can to exceed their expectations and the expectations of our people. Jim, im telling you, there may be bumps along the way but i promise you Starbucks Coffee<\/a> company just getting started. Our country is great but do they have enough thinking terrific people to work both the day part and night part if you roll out beer and wine. Rolling out a thousand stores. Maybe all stores. Your stores will be working all the time. Is there enough management talent for you . We want to leverage the fixed asset. Weve got a pipeline of great people. Our people are the ones driving this innovation. Theyre the ones coming to us saying lets do these things. Were going to do it a thoughtful disciplined way. Introduce car by nags this summer, all things weve tested for a year. Nighttime we tested for two years. This is nothing new. Doing all these things in a thoughtful disciplined way. Were not perfect. Were going to make some mistakes. Over the long term starbucks is here to stay and best years are in front of us. I have to know this, we all know luck can play a role. You do you have lucky charles, anything related to chance in your background . The luckyist thing that ever happened to me is i was born here in america. But i think yeah, we have been fortunate we have been blessed but a great line and i think its true, luck is a residue of design. Wonderful. Really figured it out. Any message to our viewers, someone in the top 25 gets to have the camera and says his peace. I would say to all young entrepreneurs dreaming big dreams dont let anyone tell you, even your families, your dreams cannot come true. Im a kid from brooklyn the other side of the tracks and this is no hollywood movie and your dreams can come true. Keep working hard. Provide yourself with a great education, surround yourself with great people. Leave it at that. Thank you so much, Howard Schultz<\/a>, for everything youve done for the world. Thank you. For the world. Thank you. Back to you. Jim and thanks howard. Of course that was Howard Schultz<\/a>, number 14 on the cnbc 25. Dont miss our special coverage tonight. Rebels, icons and leaders, airs 7 00 p. M. Eastern time. When we come back another member of the cnbc 25, meg whitman about what she has to say about her success in the tech world. Dow up 76. Were back in a moment. [ banker ] sydney needed some Financial Guidance<\/a> so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. Make a my financial priorities appointment today. Why relocating manufacturingpany to upstate new york . I tell people its for the climate. The conditions in new york state are great for business. New york is ranked 2 in the nation for new private sector job creation. And now its even better because theyve introduced startup new york dozens of taxfree zones where businesses pay no taxes for ten years. Youll get a warm welcome in the new new york. See if your business qualifies at startupny. Com could mean less waiting for things like security backups and file downloads youd take that test, right . Well, what are you waiting for . You could literally be done with the test by now. Now you could have done it twice. This is awkward. Check your speed. See how fast your internet can be. Switch now and add voice and tv for 34. 90. Comcast business built for business. Welcome back to squawk on the street. Check out lenders cit group, near session lows right now for the business lenders, firstquarter profits fell by 33 , as its margins sank and set aside more money to cover future losses in loans. The ceo calling it a disappointing quarter. Simon, near session lows, back over to you. Thank you very much, dom. High time we had Rick Santelli<\/a> in the show. Lets cross over to chicago. Thanks, simon. Theres two things in the news today that really grabbed my attention. The first was, and it should be no surprise, today is the first of a twoday fed meeting. But the other was apple. Now, theres a lot of talk about apple out there, but what caught my eye was, first of all, about the beginning of the month they had, what, 140, 145 billion, about 70 of thats overseas. And today, they announced a multitron Debt Offering<\/a>. Keep in mind, its been about a year since their debut Debt Offering<\/a>, 17 billion. Now, the Debt Offering<\/a> that were looking at, multitron, multimaturity, is arguably going to be in the 13 billion camp. Ive seen numbers 8 to 13 billion. Let me get this straight, as we embark on a twoday fed meeting where the main medicine for everything weve seen really since the crisis is test tube liquidity, okay . Put on your white jacket, central bankers, were going to drum up some test tube liquidity, and maybe in the beginning, the notion of trickle down wasnt a bad idea. It wouldnt be my idea, but lets give fed officials the benefit of the doubt. As we roll past this, what i see is Companies Like<\/a> Apple Holding<\/a> their stock up by basically using cash hoards, not to enhance computers or come up with an iphone that you maybe strap behind your ear, but buying stock back. And some of the money overseas really under scores the notion of the Corporate Tax<\/a> policy needs revamping. But does it really . If that 35 didnt exist, 70 of the 140 billion was here, theyd probably still buy stock back, which shows that as we head into an ecb meeting on may 7, where theyre talking about going into u. S. Style qe, i ask why. Why . You have boone yields at 150 basis points, okay . The difference between our tens and their tens is a 9 1 2year wide. I look at portugal and spain. Spains five year is at 1. 71. Its below our fiveyear. So why do we need to push rates even lower when u. S. Style quantitative easing . When i look at homeownership, diana olick, 19year low in homeownership in the u. S. What happened to low Interest Rates<\/a> there . See, it isnt about low Interest Rates<\/a> and its not about the m. I. T. Models well share with other central bankers from the u. S. Vantage point. Its that the strategy of trading liquidity is really easy. We could test dub liquidity all over the landscape, but the problem is, and europe is going to figure this out, an its why im not as optimistic on europe, even with moodys making a stable outlook for greece, i get it. The debts come down, southern debts come down, greeks debts come down, but the real problem at the end of the day isnt about really big customers getting money, because the apples go to market, elon musk sells 23 cars, he can go to the capital markets. Its that smaller customers in the u. S. And especially in europe. They cant get credit. And until they get credit, youre not going to see a good oldfashioned economy rebound like we did in the old days. Carl, back to you. Were still waiting for that trickle down, rick, youre right. Thanks a lot. Rick santelli. When we come back, comcast chairman and ceo Brian Roberts<\/a> will join us for a live interview. Well get his stake on the state of the cable business. [ female announcer ] the sun powers life. And now it powers our latest innovation. Introducing the worlds only solarpowered home energy system, which can cut your heating and cooling bills in half. Call now to get up to 1,700 dollars back or special financing on select lennox home comfort systems. Offer ends june 13th. Plus download our free lennox mobile app with an energysavings calculator. If your Current System<\/a> is 10 years or older, start planning now and take advantage of special financing. So call now to get up to 1,700 dollars back or special financing on select lennox home comfort systems. Offer ends june 13th. And download our free lennox mobile app. Lennox. Innovation never felt so good. We are the thinkers. The job jugglers. The up allnighters. And the ones who turn ideas into action. Weve made our passions our lifes work. We strive for the moments where we can say, i did it we are entrepreneurs who started it all. With a signature. Legalzoom has helped start over 1 million businesses, turning dreamers into business owners. And were here to help start yours. Take a look at the dow hanging onto gains, largely helped by merck, which did beat earnings estimates by about nine cents. Well see if that hangs on as we enter the more volatile period of the morning. If youre just joining us today, heres what you missed. Announcer welcome to squawk on the street. Heres whats happened so far the list verifies what i think the common person thinks in this country, which is that if you work really hard, even if youre from Humble Beginnings<\/a> and that will be jack welch this morning or howard you can still make great. The market would seem to be weakening, even months ago. But our data are Still Holding<\/a> in there on a seasonally adjusted basis, they look pretty strong. [ bell sounds ] you know, the winter wicked is dead, and were excited about the year going forward. One of the keys has been the ability of the customer to customize, and that customization has given rise to things we never believed possible, but its also a credit to people who are being able to make it. Good tuesday morning, its 11 00 a. M. On the east coast, 8 00 a. M. Out west. We have a great show lined up. Comcast ceo Brian Roberts<\/a> is here to talk about Net Neutrality<\/a> later this hour. Meg whitman making cnbcs list of the top25 people in business in the last 25 years, but what was the biggest mistake she made in her career . Shell talk about that. And speaking of cnbc 25, Walt Mossberg<\/a> will break down the most dramatic changes in the past 25 year when is it comes to personal technology. Thats coming up this hour. First, we want to get to some of the top stories in the world of tech. Another great guest, kevin oleary, chairman of the oleary funds and investor on shark tank. Kevin, great to have you back. Great to be here. Investors are keeping a close eye on twitter as its set to report earnings after the bell tonight. User growth and User Engagement<\/a> the key things to watch as Analysts Expect<\/a> a loss of 3 Cents Per Share<\/a>, revenue at 241 million. Twitter has struggled since going public, down at least 35 this year. Id love to get your thoughts knowing how active you are. Well, twitter is not an investment for me, because you know i will not buy a stock that doesnt pay a dividend. Yes. As a vehicle, let me ask you a hypothetical question. If you buy sirius satellite radio, and you want Howard Sterns<\/a> content, you pay a premium for that. Why cant we see and envision an opportunity for twitter thats cureating the thoughts of a very famous person, with millions of followers, what stops them from turning that into a payperview radio station, where i, perhaps interested like someone from walter moss berg, content i wouldnt get through any other vehicle, and i would pay 99 cents a month for that. Why cant twitter do that . What would stop them . I think the argument might be its still early. Theyre still going for scale. Theyre still a fifth of the size of facebook, right . But if you own that stock today, you better hope theyll be able to do that, or youre screwed. The other issue, kevin, you talk about how much you use twitter and how important it is to be tweeting alongside who are watching your shows. The arguments the wall street journal makes is it has yet to go mainstream, 200 million users. It really hasnt it really hasnt gotten the wave of people from the populous that they maybe need to get the momentum. The first 200 million are really hard to get. Yes. And so, my thesis is for this stock, although i have to, you know, continue to disclose, i dont own it, is that at the end of the day, they will hire the people that will figure this out. Youre right, the engagement aspect is more its diffic t difficult, i redid my whole front end, easier to work with. Will it get to a billion . I say yes, if can you start with this much momentum. Now, all of the issues around profitability, should you pay pay this for the stock right now, it would be against everything in investing, until it pays a dividend, i wont own it. Call me when that happens. You think back five years, nobody really was paying attention to twitter at all. How much would you worry about five years from now . Something completely annihilating it, making it obsolete and irrelevant . I always worry about this stuff. Because i have the advantage of a bunch of teenagers in my basement boys, girls, men and women now in their early 20s, and thats my litmus test. I ask them whats hot. Facebooks not hot, twitters not hot. Theres a whole lot of other stuff hot. They tend to use it for a while and then did dies away. I think getting traction is difficult. Thats why you have to give some credibility to twitter and facebook. Theres always Something Else<\/a>. There was another one called facefeed, my son got into. Hes forgotten what that was. Ive never even heard of that to be honest. Check it out, its kind of cool. There are some people in the investing community who think twitter is hot. But it still only has half the user base of whatsapp which weve often debated the 19 billion price tag on that one. Can i ask you a question . If you had 23 billion, would you buy twitter for that today . Would you personally do that . I probably wouldnt be here. No, no, my point is, if you are making an investment decision, would you do that . Its an interesting concept. Depends on what your investing strategy is, right, early cycle i think on aggregate, that purchase price, to buy that platform now, would be excessive. And so, to me, that stock is overvalued. Thats my opinion. Yeah. Well keep that in mind. Of course, speaking of twitter, tune in tomorrow. Well pose all of the questions and more to Ceo Dick Costolo<\/a>, joining us live for an interview 9 00 a. M. Eastern time, and tweet us with asktwitter, for your questions with him. Well try to pose as many of those to him as we possibly can. Next up, yahoo officially jumping into original content, ordering two tvlength original comedies from the producers of wedding crashers and the office. Theyre expected to launch with eightepisode seasons. You can watch the shows on yahoo s website or the screen app on roku or apple tv. Yahoo also announced plans to stream live concerts through a partnership with livenation. Everybody knows theyve been wanting to get into original content. Is the space getting too crowded, though . These things are not cheap to make. I like to look at it this way. The benefit that yahoo has is 800 million users and theres certain content they like to buy or watch. But to get into the creation of content in my view is a mistake. The crappiest business on earth is producing television and movies. Im sorry, its true. Ive been there, and ive done that. It is horrific. The risks are huge. Just dealing with the artists is insanity, and the whole concept of getting hits is next to impossible. Now, you know, you can start to fine tune what yahoo has to do. Why not curate content . To take the risk and say thats a winner, lets do a pilot and lets not, thats insane. The returns on that are sub7 since the beginning of time. Why bother . Whats the point . Im also against netflix doing it, because their subscription model i used to love, and now taking a chance thinking everything will be a hit. At least theyve generated buzz doing it. They looked at video and tv, and said if you dont own the pipes or the content, youre a middle man and you will not be profitable in the long run. You disagree with that . It goes in and out a phase every seven years. Theres a time when the pipe is hot and the content is hot. Then somebody dreams up together its the only way to go. It cycles in and out. Thats the genesis of all of the aol deals in the beginning, time warner. Theres a place for each of these Business Models<\/a> mitigated by the amount of risk youre willing to take. If you have hundreds of thousands, millions of subscribers, and you can sell them other guys content, you will make money doing that. You will acknowledge when you do have a hit, its sweep. It will drive eyeballs and subs. Netflix is testament carl, if could you do three hits in a row on television or feature film business, you would be a rock star. And practically no one does. Its almost impossible. Like baseball. Even the hall of famers are batting. 300. It doesnt happen that way. Its the nature of chaos making art. Thats why i hate it. Yahoo is making a bet. They said theyre doing it. They made the announcement last night. Do you think if theyre going to do it, the right thing to do is go in, two news shows, new comedy series, just put all your eggs in that basket . No. No, thats not a good idea. Right now, theyre going to get a reboot when alibaba goes public, and this is not the way to invest the money. If are you a brandnew hedge fund and put all your dollars into micking television, i would be shorting your fund. This is my opinion. Listen, its bad idea. Thats why we turn to you. Please come back soon. Thank you. Kevin oleary. Good to see you. Up next, meg whitman is the only woman to have headed two large public companies, and for that and more, shes on the list of the top people in business over the past 25 years. Whitman is known for Great Success<\/a> in the business world, but what is the mistake shes ever made as a ceo . Shell answer that question in a moment. Plus, comcast ceo Brian Roberts<\/a> is here to talk about Net Neutrality<\/a>, the future of cable, and a whole lot more. Thats coming up later this hour. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Have been there for america. Fannhelping millions realize my mom works at ge. Their dreams of homeownership. And when fannie mae and freddie mac needed help, america was there for them. Today, fannie mae and freddie mac celebrate payment in full to taxpayers. Together, weve created one of the greatest comebacks in our nations history. So, lets preserve and strengthen fannie mae and freddie mac. Because without them there really could be no place like home. Look at energy, one of the big winners on s p. The best one so far in the s p 500 today. Energy stocks are on fire. The S P Energy Index<\/a> is hitting an alltime high today. Among the Energy Stocks<\/a> that are hedging their 52week highs this morning, check out shares of exxon mobil, schlumberger, and its overall a great day, but its not Oil Exploration<\/a> production, services, its across the board. A decent day for the Energy Stocks<\/a>. Dom, thanks a lot. Getting word that germany siemens is in the process of submitting an offer to acquire the Energy Business<\/a> of frances alston, according to the frinch economy minister. He said its being considered by the board. Of course, General Electric<\/a> has an offer on the table for the power division, although we know so much of this is happening in the halls of the highest political offices in france. David, do we we talked about this the other day. We did. That will be an important part of this. They have confirmed that. In fact, siemens putting a release out saying its Supervisory Board<\/a> decided to make an offer. They are asking for and have received four weeks of due diligence. Remember, its a different process in europe and in the u. K. Than it is in the u. S. In terms of takeovers, and in this case, you have france itself and the government highly involved in the process. But siemens will be there now, conceivably competing against ge. Ultimately a u. S. Multinational against a german multinational corporation. Do you expect one will receive more favorable reception . Yeah, i think the question answers itself in a sense, potentially. But again, we dont know and we dont know what the numbers will be or how shareholders will b included in the Decision Making<\/a> which seems to be beyond simply the board of that company and its shareholder base. But obviously, including france, given it is viewed as a champion, so to speak. So well see. Yeah. Meantime, davids back on set, obviously, with another edition to the cnbc 25. Thats right. We want to talk to meg whitman, carl. She comes in at number 18 on our top 25 rebels, icons, and leaders. Of course, i had the chance to talk to whitman virtually every quarter about the turnaround taking place at hewlettpackard, but in this case, i was also able to talk to her about the last 25 years and what she believes has been the key to her success. Well, first of all, thank you very much for the honor. It really is fantastic. So i appreciate it very much. You know, listen, i think theres a number of different things. First is, i think i have a lot of energy to keep tackling the tough challenges and, you know, businesses is a fullcontact sport, and its hard. And then id say, you know, it has always been for me about a team sport and who you have on your team. And who your team members are, even if youre not the boss. And so, its the right person in the right job at the right time with the right attitude. And then, making sure you got, you know, the right strategy with a real eye on your customer. Thats probably at the high level how i think about it. And in terms of the Successful Company<\/a>, when you think about obviously ebay and your tenure there, and now two and a half plus years into hewlettpacka hewlettpackard, what do you think about when you do think about what has made certainly made ebay successful and what youve been doing at hp to make it a Successful Company<\/a> . Well, the challenges are almost entirely different. Ebay was a startup with an incredible tailwind of the revolution. Hp is a company trying to reassert leadership in a tough, competitive business. But the commonality is allaround focus on customers. At ebay, we used to say that we provided the trading platform, but we didnt, in fact, build the company. It was our users, buyers and sellers, who built the company. At hp, its around the customers to make sure were the very best Technology Partner<\/a> in the world. The commonality is customer, customer, customer focus and make sure youre tailoring your offering and doing everything you can to help your customer succeed. When you think about yourself as a leader, you know, and ive watched you in that role, and ive watched especially your ability to communicate particularly for enormous organization like the one youre currently running, how important is communication . And what do you think has lent to your own skills, your own success as a leader . Well, first, i think youre right, communication is critical, because whether youre running a company of 30 people, which is what ebay was when i arrived or a company of 275,000 people, which is what hp today is, is Everyone Needs<\/a> to know what the mission is, what the vision is, and where the Organization Needs<\/a> to go. And thats all about communication. Ill have to say that i think im a better communicator today than i was at ebay, because i had that little run for governor in the middle. And that really did actually help my communication skills in terms of communicating with huge numbers of people. And what i learned is its not the facts and figures, its not the left brain, it is the stories you tell to communicate the vision that you are trying to get the organization to rally around. Time for one of those questions that were going to be asking a lot of our winners, so to speak, which is to look back and think about a loser, think about something that did not work out, a failure. Yeah. And if you could pick one for me, if there is one. And, of course, what it may have led to in perhaps of learning experience and enabled you to do Something Better<\/a> in the future . Sure. Well, i think, you know, the numbertwo internet market in the world is japan, or was japan when i started at ebay. And you will notice that ebay never really got a position in japan. And the story behind that is that we had that very well publicized site crash in june 1999, you may have been covering it at the time. Right. So we had to repair our existing site and, therefore, miss the window of opportunity in japan. And it just taught me follow your intuition, you know . I had a sense that the technology underpinning ebay was perhaps not going to help us scale where we needed to. You know, we had so many other things to do, and it was such a we were growing at 70 compound monthly growth rate, so that miss of ebay japan is one of the big failures of my time at ebay. And id say the other failure, which we talked about earlier, is the run for governor. Right. Put everything i had into it. You know, but it didnt work out the way id hoped. I learned a lot from it. And i think it made me a stronger executive and probably actually a stronger person. You think youll ever run for Public Office<\/a> again . I dont think so. And finally, meg, we want to try to get a broader answer here again from our winners, so to speak, our 25. When you look around and you have a great vantage point, of course, having been in Silicon Valley<\/a> for so many years, when you look at some of the people you think will be the leaders of the next 25 years, is there anybody in particular who comes to mind, or that you have an eye on, whether they be working at hp or elsewhere . Well, i will tell you that the leadership capability of the 20somethings and 30somethings is unlike what ive seen in my career. People are taking on leadership positions at such young ages. You know, i was 42 when i came to ebay, and, you know, some of these young men and women are doing extraordinary things in their 20s and 30s, whether its Mark Zuckerberg<\/a> or jack dorsey. You know, they are taking on huge revolutions and changing the way we live and work in ways that are really quite extraordinary. So lots and lots of leaders who are changing the landscape at a much younger age than certainly my generation did. Right. Of course, you have to end here by telling me the benefit of us being older, right . Theres got to be baby fit to that. Meg, thank you so much, and again congratulations on being on our 25. Interesting, david, to hear her talk about her skills as a communicator and how thats made her a better ceo, no doubt shes one of the more vocalist ceos. As you say, we hear from her almost every quarter, but employees appreciate that, a way to imprint strategy, morale, and make sure the companies of various cross roads you are vocal. Without a doubt. And earlier, tyler, we had the piece on jack welsh and one of his strengths being enthusiastic, being a communicator, i think might not have come easily to meg whitman, and she pointed out the run for governor helped in that regard. Youre talking about an organization that had over 300,000 employees when she took over hp. Its less than that now, as you heard 275. Nonetheless, thats a key part of it. You cant run every little bit of it, but what you can do is communicate a vision, a strategy, and try to get everybody involved in that in terms of their behavior. Which means saying the same thing often again and again and again. We talk about the role of women on the list. And tech has been through a couple of cycles. Right. When she was back on in the day, its, wow, thats meg whitman. Yeah, hearing 70 monthly growth at ebay, you can remember those days, the torrid growth in the internet, but different assignments, if you will, for her. One taking a company that was growing so rapidly and trying to professionalize it, if you will. Another, the iconic Silicon Valley<\/a> company, the first one started in the gram, trying to reinvague rate it. If shes successful, theres no doubt she will be looked on as one of the alltime great leaders, period, in terms of corporate america. With amazon, one of the forefathers of ecommerce ebay, you mean. Yes. Yeah, exactly. Thank you, david, thank you for that. When we come back, were talking live to ceo of comcast, brian robert, on Net Neutrality<\/a>, the future of the cable industry and netflix. Hell join us when squawk on the street comes back. After this break, Walt Mossberg<\/a> on 25 years of changes in technology. All of that in two minutes. [ male announcer ] great rates for great rides. Geico motorcycle, see how much you could save. For 175 dollars a month . So our business can be on at ts network [ male announcer ] great rates for great rides. Yup. All five of you for 175. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line anytime for 15 bucks a month. Low dues. Great terms. Lets close. New at t mobile share value plans. Our best value plans ever for business. [ banker ] sydney needed some Financial Guidance<\/a> so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. As cnbc counts down the list of top 25 important Business Leaders<\/a> of the last 25 years, a good chunk of the winners have come from the tech industry. We thought it would be a good idea to look at the greatest innovations within that sector during that time. Who better to ask than walt moss berg, the executive editor of recode. We could talk about phones, computers, cameras, cell phones. What do you think is the biggest change in the device space that weve seen over that time . Well, i think definitely the biggest change in the device space has been the smartphone. You know, when you went on the air in 1989, phones were still, as i said in the essay i wrote for your website, phones are still sort of cell phones were sort of a science fair experiment. They were meant mostly for the use in the car. They were incredibly limited. And even as recently as the s 90s, the late 90s, they were kind of iffy. You didnt really have a real smartphone. You know, its hard to believe, but the blackberry didnt come along until ten years after cnbc started, and when it did, it was really more of a glorified pager. So the smartphone that we carry in our purses and pockets today is just vastly more powerful than the entire computer you could buy in 1989, and thats quite a change. Walt, one of the toughest questions on this list, anyway, is whether you put gates in at number two, jobs number one. Or do you flip it . Give us the definitive answer on what was the right thing to do . You know, i have huge i have huge respect for bill ga s gates. Ive spent many hours in conversation with him. I had huge respect for steve jobs, and spent many hours in conversation with him. They both they belong in those spots. But its a tough call. I think you did the right thing. I would have i would have put jobs number one. Not to take anything away from bill gates, either from his contribution in spreading the software, the personal computer software, allowed personal compute rs to be standardized ad lowered in price, and all the things he did in his tech career. But steve jobs was more the risk taker, more the guy willing to take the big leaps, the big betthecompany leaps, and he had a string of fundamentally gamechanging things that disrupted not only the tech industry, but, you know, media industries, you know, just all kinds of industries. By the way, during the heart of his career at apple when he was rolling out these big game changers, the ipod, the imac, the ipad, he was running a movie studio, pixar, which is now owned by disney. He was just an amazing an amazing guy, and i think you put him in the right place. Walt, you mentioned that blackberry was actually first to the smartphone market. You could argue that sony was first to the ipod market with the diskman and walkman, and amazon had the kindle before the ipad. What lessons do you think other people in the sector can learn from this idea that you dont have to be first, you just have to be the best . Well, that is i think you stated it real lie well. Really well. Jobs attitude was to look around the landscape. He had an uncanny ability, which gates acknowledged, by the way, when we had the two of them interviewed together at our conference, he had an uncanny ability to figure out what people wanted next, when they were ready for it. A lot of these other products were a little early or limited or didnt quite close the circle. The blackberry was an email terminal. It didnt quite close the cir e circle yes, there were some apps for it and so forth. But it didnt really do the full job. The same thing the kindle was an ereader, not a fullblown tablet that did everything else. And steve jobs had the uncanny ability to look at the landscape, see what kind of a partial products were that were out there, and then pull the software and hardware together in a really beautiful way. And im not im not i dont know when well see the next the next person with that ability. Its a great lesson to remember, walt, and a great column you have. Cnbc. Com 25, for anyone interested. A lot of great and then images. Thank you for joining us. Thank you for making me a part of it, and concongratulati. Simon is here with the close of europe. Check out the figures on the screen. Were at the height of the earnings season in europe. Some strong gains today. Turns out that the u. K. , britain, is the fastestgrowing economy within the g7, growth at an annualized rate of 3. 2 coming through today. In the meantime, the other thing of note is its widely reported that mario draghi, the head of the European Central<\/a> bankers, told german lawmakers that theyre not close to embarking on qe. No, its not going to happen. He says near term, tomorrow, we get some important inflation data. The breaking news now at the corporate level is youve just had a Statement Released<\/a> in munich from siemens over the battle for alston. The Supervisory Board<\/a> of the german giant was meeting today whether to bid against the prospective offer from General Electric<\/a> here in the United States<\/a>. The statement we have from siemens says we are prepared to bid further down the line, but we want access to your data room and we want to interview management over the course of the next four weeks. So the whole process, if youre waiting for german bid, it will slow down. Siemens over the past week has lost about 5 of its value. In paris, the French Economy<\/a> minister, whos basically as socialist as they come, has been defending the government and saying they will do everything that is necessary in order to protect french interests. That probably means insuring that 18,000 jobs are secured. The question is, which of the two offers ultimately from siemens or from General Electric<\/a> will do that . Here in the United States<\/a>, in fact, on this network, the former ceo of General Electric<\/a>, jack welcwelch, says ges recor stands on its own. It was the biggest market for many years. And as far as hes concerned, ge could win this. Take a listen. Weve built over of the last 30 years a french relationship thats very deep. And france and ge have had great partnerships, so im optimistic that the chips built over 30 years with france will, in fact, go well for this. In the meantime, let me for the sake of completeness show some of the Companies Reporting<\/a> today. Nothing is falling out of bed. Abb, the power line distributor, it was slightly up higher. Slightly disappointing. Bathrooms chips, oils, telecom, doing well. And the banks are higher. Number of banks reporting in europe. Noticeably deutsche bank. No real problem there with the talk of the capital increase. The other thing that happened is the authorities published the detail, guys, of the stress test that the major banks in europe are going to have to go through. I will save that glorious detail for another day. Back to you. Sounds good, simon. Thank you. After this break, comcast ceo Brian Roberts<\/a> of our parent company. Dont go anywhere. Were back in a moment. Just take a closer look. It works how you want to work. With a Fidelity Investment<\/a> professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. So you can invest in the life that you want today. Tap into the full power of your fidelity greenline. Call or come in today for a free oneonone review. Thats why i got a new windows 2 in 1. It has exactly what i need for half of what i thought id pay. And i dont need to be online for it to work. It runs office, so i can do schedules and budgets and even menu changes. But its fun, too with touch, and tons of great apps for stuff like music, cause a good playlist is good for business. I need the bosss signature for this. Im the boss. Honestly i wanna see you be brave mattel started in a garage. Disney started in a garage. Amazon started in a garage. The ramones started in a garage. My point . Some of the most innovative things in the world come out of american garages. Introducing the lighter, faster cadillac cts. 2014 motor trend car of the year. Aint garages great . Dow up some 89 points thanks to strong action out of merck. A series of winners and losers as we take stock of earnings season again. Coach is one of the biggest losers on the s p, after beating by 7 cents. David . Thank you so much, carl. Comcast yesterday striking a very large deal with Charter Communications<\/a> that will see comcast invest some 3. 9 million subscribers once it completes its acquisition. Of course, it is contingent on that successful merger taking place, or i should say it taking place. Joining us now from the cable show in los angeles is comcast chairman and ceo Brian Roberts<\/a>. Nice to have you with us, brian. Good to see you. Nice to be with you. Good morning. Well have to start there on the deal itself, given the news yesterday. Does it make Regulatory Approval<\/a> more likely, and also, does it perhaps move up the time line for said approval . Well, i dont know about that. But i think it hopefully makes good on the commitment that we made on day one, which is that we would be below 30 of the market for video homes and now identifying which markets we would part with, and we also are doing a transaction with charter that allows for both companies to have regional operational efficiencies by trading markets, so that as we enter new Communication Services<\/a> and broaden our capabilities, the businesses make more sense. Each one is a standalone basis. So i think its a good transaction for both companies and for time warner. I think it is a few more customers, 3. 9 million, than the 3 million we originally said, because thats how these how it worked out. And i think it gives more certainty to the viability of those other companies, the investment that charters going to make, their long tradition of being in cable. And so, i think as the ceo of time warner, its a winwinwin for all three companies here. And i hope it will be help the process along. Yeah, on that process itself, of course, i know last week you took note of comments as we did from the ceo of netflix, reed hastings, when he said, and he said, hey, if theres anyone i wanted to trust with controlling half of the internet, you might pick Brian Roberts<\/a>, because youre thoughtful and a number of other very nice things, he said. He went on to say, i dont want anyone to control half the internet, and thats the real basis of why netflix is objecting to the merger. Can you respond to that . Well, ill let our filings speak for themselves. I will point out that onethird of all the bits of the entire internet in the United States<\/a> in prime time or netflix, and weve had a nice relationship, we hope, and even when people may disagree and we certainly disagree with that, we think hes done a great job building his company, and at the same time we want to make sure that all the statements that are made are truthful and are accurate about various statements that have been made. And ill let our filings and our comments speak for themselves. We think what were doing is going to allow for more innovation, more scale, and really when you put all that transaction together, were getting 7 million more cable customers net of the charter disposition. So to go into new york and l. A. And dallas and really maybe just a couple of other markets, thats what this is all about for comcast. It allows us to create a company that can continue to roll out the kind of products that are over my shoulder. Were here in los angeles at the cable convention, the annual show. And i think innovation, staying relevant, finding a way to invest more in the networks, speed up our customers, and at the same time not change anything. Were not in new york. Were not in l. A. With our products. Right. And so, i dont quite see why he would object. But hes entitled to his opinion. Well, he certainly is, and he may be able to get leverage out of it. Something that hasnt garnered as much attention as perhaps it should, and i want to get your insight, brian, last week the fcc and potentially what my no longer be Net Neutrality<\/a>, new rule when is it could come to that, it would seem quite beneficial for a company that will be bringing broadband to more people in the country than any other company. Are you heartened by it, and are you surprised by it . The reality is i havent seen anything. So theres been a rush to judgment in the media that i think is premature. And there were rules, the open Internet Order<\/a> that had previously existed for several years. Comcast has agreed to live with that order regardless of the new order, or regardless of the courts when we bought nbcuniversal, and through 2018. And Time Warner Cable<\/a> will come under that open Internet Order<\/a>, again regardless of any new activity. So i want to wait and see what the rules are. I think having clear rules, so long as theyre in the spirit of the last set of rules, makes a lot of sense in that it allows you to invest, allows your investors to know that theres a what the rules are. And i think it allows consumers to know theyre always going to go wherever they want, theyll be able to do so in an open way, never have any blocking, and thats never happened. Frankly, i think its a bit premature to know until we see the specifics. Brian, whether its netflix or amazon, today its yahoo everybody is trying to get into the original content pool. And i just wonder, can you help us understand how much we can absorb and whether or not when we reach some sort of bubble in terms of original content, or at least companies trying to enter original content . Well, its a great question. Its a golden age of original content. Being here in los angeles and hollywood, theres never been more excitement, more platforms, more choices, more direct ways for authors and creators of that content to get it to the consumer. And it goes to kind of the broader point, which is this world is changing so fast. Thats why were trying to do our transactions. Its why, i think, Companies Like<\/a> yahoo and others are changing what theyve historically done, and nobodys crystal ball is perfect. I think our company is very fortunate. We had a great quarter. Nbcuniversal, it looks like nbc will finish the year as the numberone broadcast network. But you cant rest on your laurels. You have to keep investing, innovating, and try to reimagine who and what you do and how you relate to your customers. And thats why i think in the regulatory arena, people should have a careful and thoughtful touch, because this world is changing so fast, and what the next generation wants is not what our generation perhaps, the way we grew up. And thats what make it is so interesting being in this business, and our company is touching a lot of those spaces, but we dont have any more perfect information than anybody else. On that note, of things changing fast, last week arguments held in front of the Supreme Court<\/a> about the legality of aereo. Id be curious, brian, in some way, if, in fact, the Court Upholds<\/a> the legality of aereo in a ruling that will come in a number of months, it would be bad for nbc, but possibly good for other parts of your busin s business, namely retrans. But maybe bad on the corecutting side. What are your expectations when it comes to the aereo ruling, and what will it mean for comcast . Well, i think in the end, were all going to have to wait and see on this one. It has clearly gotten a lot of attention. Our legal view excuse me, my earpiece our legal view is that it is not legal and that we believe the majority scenario is the court will find it isnt all within the copyright laws and the intention of creating retransmission consent for the local broadcasters, but well have to wait and see. One of the ways were trying to build our company, one of the things we feel is unique about comcast, nbcuniversal, is that were a company that is in a lot of spaces, and sometimes were on different sides of those kind of matters. In this particular case, we felt it was clear as a legal matter to come down and support that we dont believe it is a legal scheme. Right. But it is a fastchanging world. And i think were well positioned in any event. Finally, back to the finances, as i hear the music kicking up there. So hopefully youll hear me, brian. Yeah. The charter deal leveraged neutral, i think, is what the company said yesterday. But your shareholders are always clamoring for you to buy back more stock. It was 10 billion done, i know, in conjunction with the completion of the deal. But is there a possibility with the proceeds from charter that you will add to the buyback at comcast . I think we tried to indicate that on our earnings call, and again yesterday. That while the exact cash flows and leverage ratios arent completely clear, because you have to wait until we get to closing, and when that occurs, that our goal here was to buy time warner, now be able to, in effect, give to our shareholders significant value directly between what will be charter stock and spinco security, as well as reduce our own debt and end up with some cash balances, and all of that we then hope to keep about the same leverage where we started this year before any of this happened, which is around 2. 2 times debttocash flow. If the run the math on all that, we probably will need to be in a position to increase the buybacks, but lets wait until all the numbers come in. But at least thats the plan of action, and i think its, you know, really good for our share hole e holders, because it will give them immediate liquidity or dividend at the same time immediate reduction in debt, and we pick up, as i said, about 7 million video customers and give ourselves a wonderful footprint, and with the 1. 5 Million Exchange<\/a> in customers with charter, making our existing properties, so time warner had dallas, i believe, and charter had ft. Worth. We will get both markets. Los angeles, similar story. And other and charter will have great properties, as well. So a lot of work by a lot of people. But i think it ties well together and the Balance Sheet<\/a> is the next area well keep talking about as the quarters go on. All right, brian, of course, a lot for us to wait on and look forward to. Thanks for joining us. Brian roberts, chairman and ceo of comcast, which, of court, is cnbcs parent company. Thank you. All morning long, weve been highlighting the top people in business over the past 25 years, and that list is not complete without the most important people in media, Rupert Murdoch<\/a>. Well go behind his story and his legacy in just a minute. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. With the mobile trader app. Trwith secure wifie for your business. It also comes with public wifi for your customers. Not so with internet from the phone company. I would email the phone company to inquire as to why they have shortchanged these customers. But that would require wifi. Switch to comcast Business Internet<\/a> and get two Wifi Networks<\/a> included. Comcast business built for business. Female announcer sleep trains interest free ends sunday. Its your last chance to get three years interestfree financing on beautyrest black, stearns foster, serta icomfort; even tempurpedic. Plus, get free delivery, and sleep trains 100day low price guarantee. But hurry sleep trains interest free for 3 event, ends sunday. Sleep train your ticket to a better nights sleep all right, coming up at the top of the hour, well look at how Larry Ellison<\/a> landed himself on the top 25 list of rebels, icons, and leaders. Plus well talk to another member of the top 25, carl icahn. And wait until you hear who he says is even tougher thank him on wall street right now. One of the most powerful women in finance joins us with her outlook, sunni harper from citi, on why shes worried about fridays jobs report. And ebay releasing earnings after the bell, but traders are battling it out before the results. Straight ahead on the half. Kayla, well see you in ten minutes. Thank you so much, scott. Cnbc created a list of the 25 most influential and transformative people in business in the last quarter century. Earlier today, we revealed the list and how they ranked, but all day were telling their stories, reported by Tyler Mathisen<\/a>, back at headquarters in engelwood cliffs. Tyler, take it away. Its been a busy morning. Weve counted down the top 25 list of the transformative Business People<\/a>. Here are the top sort of 15 from number 11, and thats where we are right now. Number 11, we compete with them, love him or not, Rupert Murdoch<\/a>, the transcendent media tycoon of the 20th century, brash, bold, and almost as attention grabbing as his headlines. There is no question that Rupert Murdoch<\/a> is a newspaper man. He is really the last of the old media lions. A lion with a roar heard round the world. Polarizing, indomnitable, Rupert Murdoch<\/a> is all that and more. In media, over the past 25 years, no one comes close to the global sweep and audacity of the man from melbourne. David fullkenflick is a media correspondent. He found his role model, hero in many ways, his father had died. Young murdock inherited a newspaper business. Its a very different life he has to lead, and he has to figure out more about the business side in the way in which his father wasnt entirely convinced he could do. Carefully, shrewdly, one acquisition at a time, over a period of decades, murdoch pieces together the publishing and Digital Assets<\/a> to form a media empire. Its two parts are known today as news corp. And 21st century fox, with a combined market value of 86 billion. Stubborn, controversial, unafraid. I mean, unafraid of virtually everything. He is a one of a kind. The economist magazine said he invented the modern tabloid, but he can go upscale, too. He bought london times and sunday times and in 2007, the wall street journal. He bought it for 5. 5, 5. 6 billion. Within a year, he had to write off the value of the acquisition by half. Investors rolled their eyes, threw their hands in the air, why are we doing this . Youre not doing it with the personal money, youre using shareholder money. To be sure, murdochs companies are publicly traded, but they are murdochs companies, family dominated. Sons james and lockland have run key businesses and lockland is poised to take over when and if the old old man steps aside. He has been a disrupter in movies and tv, too. It took a guy like murdoch to say, oh, okay, three networks around for 40 years, ill make it a fourth. And he did, building some of the most enduring franchises in tv history. There would be nfl deals, the world series, global satellite and sports channels, and then, in 1996, the fox newschannel, led by master showman and former political operative roger ales. The way fox was able, from a standing start, pass cnn, and really double the combined ratings of all its competition, was just by offering up a viable alternative. It wasnt just how they told the story, but the stories that they picked. He made general media realize they had a very controlled and contained prism that probably did not reflect the entire american population. The newschannel was like murdoch, the man, aggressive, unapologetic, sharp with the elbows and the opinions. It was a huge, transformative hit. But that same aggressive edge can cut both ways. In 2011, murdoch faced allegations that reporters and editors at a london tabloid had hacked the voicemail of celebrities, royalties, and common citizens. I would like all the victims of phone hacking to know how completely and deeply sorry i m am. Rupert murdochs imprint is on all of his tabloids and the hacking scandal is the result of what appeared to be hundreds, if not thousands, of individual criminal acts committed by a cadre of people. But they are the fruit of a free that was planted by Rupert Murdoch<\/a> himself. This is the most humble day of my career. Still, the old media lion retains his roar and his bite. He is the true successor of William Randolph<\/a> hearse or cain, citizen cain. His influence in media cannot be understated and the empire he has built cannot be understated. To compete with him is to learn firsthand how formidable he is. Rupert murdoch, one of cnbcs first 25 rebels, icons, and leaders. The number 10s story coming up on the halftime report. You can view the full list and their stories online at cnbc. Com. And also tonight at 7 00 p. M. , a special reveal of the top five and a couple of extra bonus picks, folks. Carl, i thought you nailed mr. Murdoch there when you said he is fearless, and he is. Tyler mathisen working a long day today, tyler, thanks. Well see you soon. Stubble and 5 00 shadows giving razor blade Companies Something<\/a> of a rusted edge. Americans are simply spending less on shaving products. Proctor gambles gillette business wants to buck this beard trend with a brandnew razor. Sarah eisen is live with the president of gillette in an exclusive interview. Hey, sarah. Hey, carl. Ive got the new razor. Its the flex ball. It has this little ball, brandnew innovation, with patrick levay, and global grooming for proctor gamble. Whats revolutions about it . Were excited about the launch with the flex ball. Heres the starting point. When you look at a guys face, it wasnt built for shaving, right . Its full of curves and contours and the challenge of todays razors, they dont follow the contour, jump off, and the result is missed hair, and thats a real frustration this is 20 more with this, the way the flex ball works, a 3d pivot, and maximum contact around the contours, so you get virtually every single hair. The guys absolutely love the transformational experience. So efficiency is one thing. You cant ignore the fact that razor sales have been disappointing. If you look at the scanner data, 16 of the last 17 monthly periods saw declines for razor sales. Why arent guys shaving anymore . Different things going on. What were focused on is as the leaders of the category, to drive the gloeth of the category. The category is growing globally. This type of innovation, we know, appeals to many guys that will bring more guys into our franchise, more guys into the category. We also know that from guys who have decided to go to facial hair, and they discover this product, a number of them come back clean shaven. They abandon the beards . Exactly. Because they like the razors . Exactly. Are you worried it could be a secular change in the way that men groom themselves . No, if you look at the history, these trends have come and gone. Right . So today, about 40 of guys have facial hair. And we see it as an opportunity. We actually launched recently a product called style wear, 3 in 1 tool, great way to manage your hair. We think it ebbs and flows. Like body shaving. We were talking about that earlier. Its a big trend right now. Its a big trend . Big trend. 44 of guys, 18 to 44 shave their whole body . We launched gillette body, something designed for the male terrain. We have the startups. How much competition do you feel from those guys . We respect all of our competition, whether theyre old or new. Frankly, our focus is really making sure we provide the best shaving experience to guys out there in a way they say this is fantastic value, right . Thats how this company has been built. Thats what this whole launch is about is elevating the standards of shaving and continuously delighting guys that are interested in this experience. And i know this was five years in the making, this technology. It is critical for proctor gamble. You said 9 of total sales come from grooming . Correct. How do you turn that around . It has been flat to disappointing lately. Is this going to do it . This is an important Building Block<\/a> of our program, absolutely. We know from the experience that we have in terms of feedback from guys that this changes their perception of shaving. We know this brings more guys into the franchise. It brings more guys into the category. And whats and women . Ive used mens razors. I feel that theyre better than womens. So actually thats a great question on women. Im going to reserve any comment at this stage, but id be happy to talk about it in the future. Ill use it and give you my expert opinion. Thank you very much for shutting down with us, at the launch of the new razor, hoping to turn the category around. Did not know, carl, that mens body shaving was hot right now. Neither did we. Were still shaking our heads over here. I love how guys you sell them the razor and later sell them the razor blades. A cool business model. Fascinating. Were watching sprint today. Nice increase in quarterly and operating profit. You know, carl, the stock has moved up since the first hour when i mentioned in regard to sprint. Its not if, but when. Softbank and sprint will make a try again or try to announce a deal with tmobile, and thats moved the stock. Want to come back to it. Its not an idle remark on my part. Ive been reporting on this many months. Important for investors to keep an eye on the incentive auction rules. There have been leaks. They do seem favorable to keeping the companies separated by giving them some edge of the incentive auctions that will come up next year. Nonetheless, based on everything im hearing, i would not be surprised regardless of what the rules look like to give them a shot to how much investors have been waiting to pounce on any glimpse of a potential deal. Exactly. All right. With that, the dows up 88. Well toss it over to scott wapner at hq. Hey, scott. Thank you so much. Were all over the market moves. Welcome to the halftime report. The playbook, sell in may, for the past four months, its been the month that shook up stocks. What will happen this way . Keith banks of u. S. Trust gives us his view. Ebay brawl. One stock, two traders, and a fight over the internet stock. Youll decide who wins. Cnbc 25, from jobs, icahn, ellison, and the rest. Were ranking the most influential in the past quarter century. Lets meet the starting lineup, pete, murph, joe, josh are with us today. 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