Skip to main content

tv   Squawk on the Street  CNBC  April 6, 2015 9:00am-11:01am EDT

9:00 am
1.2%. look at the french. .4%. >> nobody's worried. >> .2% for germany. joe, also buy japan. also think about taking some money off the table for reits and putting them into mlps, which have been beaten down. >> thanks david. >> our thanks to david darst. and make sure you guys join us. you're back? >> yes, tomorrow. >> "squawk on the street" is next. ♪ swing, batter batter swing, batter batter ♪ >> good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. first chance for the market to react to friday's disappointing jobs number and it has set up some bearish action to start the week. get ready for earnings season as well. alcoa hits on wednesday. oil back above 50 this morning as the saudis raise prices again, recovering from that tumble after the iran nuclear deal. ten-year is below 185, a fresh two-month low.
9:01 am
our road map begins with the markets and that disappointing jobs report. bill dudley making some downbeat comments on the economy in the first quarter. >> tesla sales set expectations setting a new record a 55% increase, despite the weak rollout in china. >> and what's missing from samsung's new phone has qualcomm shares moving lower in the pre-market. first up this morning, the march jobs report adding concerns about slow economic growth. payrolls up by 126,000, the fewest since december of 2013. the unemployment rate stood at 55 but average hourly earnings were up 3%. oil prices are on the rise. some analysts believe that iran exports might take several months to ramp up. oil did tumble about 5% on that news. >> i think we're all kind of stuck looking at the same thing, which is that the numbers kind of confirms what we've been seeing from the industrials, which are weak. i was looking at emerson's numbers. emerson being the quintessential control company. a lot of oil, a lot of dollar.
9:02 am
and the numbers are horrible. you could say there's a huge percentage of the market that's horrible, but i see oil coming back a little. so you'll see oil coming back into those. this is a market dominated by activist and kraft. doesn't matter what these futures do. there's a couple of technology stocks that are weak and shocker, so you take a look at a microsoft. how does it react in the future? someone upgrades microsoft today saying listen, the worst is over. and you can decide, when they report, it's going to be a really bad number. the futures tell us that. and jobs numbers tell us that. i don't know, give me something i don't know. i end up thinking all right, well, maybe they've got to sell the airlines union pacific, and buy some mcckesson and amerisourcebergen. she's even telling you the month's not going to be that good. but 2016. people are thinking about 2016 they're looking domestic they're trying to find what is working anyway.
9:03 am
so this is an environment where maybe bowing's tough for a couple days. >> let's back up to that jobs number. 126 was below the estimated 245. revisions down. dudley's on the tape this morning saying that the weather is a significant factor. although the dollar he says also significant stress on the economy. what was your take on the jobs number? >> i think march was bad. we've been saying march was bad. the job creator in texas which is oil and they're laying off people left and right in the oil patch and they don't need that many people because they're doing the easiest wells. just very low technology. the rails you're not going to move as much oil. now rails don't hire a lot of people, but i'm just saying there's just not a lot of commerce associated with oil versus where there were three months ago. when you drop 123,000 barrels versus the previous month, which is what happened between january and december it's going to get worse. >> oil and gas added jobs which made no sense to anyone. >> well, that's problematic because unemployment rate went up very big in north dakota.
9:04 am
it went up in the permian. these numbers -- i wish i could make more sense of them. >> you're not alone in trying to make more sense of them. >> i'm not? >> no. >> but it doesn't mean that we're not more concerned, even more so than we had been. >> or are we? because perhaps it works the other way. concern has gotten so high that maybe we make it easier to have a positive reaction to when we really start getting a wave of earnings. let's call that next week. this week we get alcoa, but not much. >> i think that's a great point. alcoa was at 17. now it's at $13. is this stock going to go to $12.78? perhaps. it's down huge. the company's reinventing itself so maybe it's not that special. it's not even a dollar play. there's been a lot of articles saying the strong dollar is bad for them. that's because people are uninformed. they do a lot of different businesses that are actually levered to other currencies. but the main thing is i think
9:05 am
david's right. what are you going to do with an emerson? you going to sell it now? it's down a lot. are you going to sell a lot of the chemical companies? the chemical carloads have been really bad. and the stocks have been really bad. i mean, that's kind of what happens. it's not a revelatory jobs number. why is germany up so much? they're taking or our jobs taking our sales. >> in part because of currency and the benefits they're seeing there. which obviously the dollar, if it stops getting stronger, could at least halt that a little bit. >> so let's say you're ibm. they can't possibly talk about what it looks like with the dollar. go over the conference call and they're giving you, like what the number would have been if the dollar had been not so strong. it would have been maybe the best quarter -- well it was a
9:06 am
great quarter. some of these companies you have to look through the dollar. they do a terrific deal. deb cafaro makes money for you and you're saying why didn't i pay attention to the futures when deb is out there. she's not saying wow, i guess my hands are tied. i mean she's going and doing her job. there's a lot of ceos that are doing their job, managing during this period and making money. >> i knew you'd get a mention in there. >> it was great. deb e-mailed me at like six6:00. i was very excited for her. we do have a little m&m this morn g -- m&a this morning. >> have you seen that group? it's insane. >> with rates well below 2%. back to that idea of the yield below. where do people go if not the equity markets? >> maybe they cycle back to the
9:07 am
utilities. >> i'll tell you what, utilityies of all the major indices off their highs. the worst. 10%. >> con ed could be terrific here. that could be a great situation. >> con ed? >> yeah it's opening day. >> i'm constrained by the material. >> they're playing wisconsin. with a are you talking about? sorry. >> shares up in the premarket almost 4%. the electric car maker says it delivered more than 10,000 vehicles in the first quarter. that's highest quarterly total ever for the company. stock awfully close to the lowest closing levels of the year. >> this is a fabulous short squeeze motivator.
9:08 am
bank of america was saying it's disappointing. disappointing? we didn't even expect it. this was a good number. i like the car. but bank of america says this is only 2% sequential growth. there wasn't even supposed to be a number. was the number good or bad? i don't know. there was a number. it's beginning to look a lot like other car companies. >> you need a positive integer, that's what you mean. >> yes. they issued a release. he realized it was reverse head and shoulders and he comes out with a great number. >> he is somebody who talked the stock down in the past. >> he's an amazing stock manager who also is pretty good at putting out cars. he's a rocket guy. he is a car guy. and he is a stock guy. and sometimes he puts on the stock hat and he gets that thing rolling. i do not believe it was idle
9:09 am
that they decided to put out numbers. that's about saying listen you know what? we've had it with you bears running all over us. here's the deal. >> as you have said many times, you love the car, but you don't necessarily care for the stock. >> i don't care for the stock because it's a game. >> that only happens once a year. >> you want to talk about same store sales? >> sure. let's talk about that. >> mankins. >> who? >> the fact that there's a department store mentioned. holy cow. "better call saul" tonight. you going to dvr the wisconsin game? >> no. "mad men." the game tonight. you're going to have to stay up late. >> i think that's what david
9:10 am
wants to talk about so i can go there. i'm busy looking at zillow and the barclays downgrade. but i can easy go wisconsin. >> is that who you're going with? >> i think they're the hot team. >> qualcomm by the way, the shares down on the pre-market. the samsung galaxy s6 shows it does not contain the qualcomm modem, which was expected. it was done by chip works. there's a name that's down. >> qualcomm has been going down and down and down. why? because we knew they weren't in the samsung. so this teardown organization -- hey, thank heaven. you tear it down. i don't want to tear it down. this is something that is so well-known well-known. i want to talk about sandisk for a second. these analysts will not give up. they will not give up. so today what do they say? sandisk is down so much it's going to get a takeover bid from western digital. you know it's so bad, it's
9:11 am
good. >> i mean on qualcomm they did not get the benefit from that enormous share buyback that i believe they hoped they would in term of the return of capital of the shareholders. people were well aware that the relationship with samsung had become much more tenuous. >> that's true. so it has. >> they did settle china. that was a huge, huge thing for them. i think the company in terms of its approach to its future really needed to get that done. it was a big number. the question is how many other things are they going to be able to sell chips to. >> i just can't go there. i want to change my prediction. i no longer think it's going to be wisconsin. i think it's going to be duke. because duke announced a big buyback. >> you're going to confuse our viewers. >> 68 years old. he is even better destroying the stock.
9:12 am
look at that. d-u-k. >> you can spell it any way you want. >> okay. >> one of several names, yielding 35 or more. duke verizon, teague. >> well this morning i went over what buffett owns. he's got gm. he likes verizon. yield works. that's why i come back to these utilities. yield works. that group has been horrendous. i saw first energy get upgraded the other day. that's a not so well run utility. i like that, too. >> just so people are not confused by our banter, duke energy has initiated an accelerated repurchase. >> i was having some fun. >> i know that. i just want to make sure our viewers -- >> because we were going back and forth between the basketball team and the utility. >> do you think they picked this day idly? >> i don't know. >> maybe not. when we come back a strong
9:13 am
box office debut for "furious 7." will the film generate $1 billion in sales? and later, talking the future of tech and the cloud with an executive who was once the president of oracle. charles phillips will join us live. >> oh man! fabulous! >> it's been a while. take a look at futures. s&p bounced off 2038, but we're looking at some weakness in the open. a lot more "squawk on the street" from post nine in just a moment. doug. you've been staring at that for awhile, huh? listen, td ameritrade has former floor traders to help walk you through that complex trade. so you'll be confident enough to do what you want. i'll pull up their number. blammo. let's get those guys on the horn. oooo looks like it is time to upgrade your phone, douglass. for all the confidence
9:14 am
you need. td ameritrade. you got this.
9:15 am
9:16 am
a blockbuster start for the latest installment in the "fast and furious" series. "furious 7" debuts with a north american box office take of 143.6 million. that's the ninth biggest opening ever. the film cost nearly $200 million to make. took in more than 240 million overseas. puts it on track to gross more than a billion worldwide. comcast is the parent of both universal pictures and cnbc. it's actually the number one opening if you take out all comic book and young adult novel film openings. >> i always have to watch that on pay-per-view. i can't get a quorum to watch it. they're great. i do a little pay-per-view.
9:17 am
>> do you? >> i'm a little upset that my 12.5-year-old i think saw it. that should not have been allowed. >> is he american? >> say again? >> americans all watched that this weekend. >> seemed a little excessive. >> the big discussion about building a franchise from scratch these days is not an underappreciated effort. >> do we have "fast & fears youurious" at the universal theme park? >> not yet. >> but the numbers are incredible. >> they're very exciting. >> and to your point, you need to -- i mean most of these movie studios to a certain extent are twinned with whether it be consumer products or a ride at your theme park disney obviously the model there. perhaps the best. paramount perhaps the least because they don't really have that going on in tv or consumer products as much. and their return on investment capital is low. but not the case for any other studios. but not necessarily paying for
9:18 am
that. >> to start a new franchise, to start john carter or whatever. you get this -- vin diesel is bankable. >> did you see the pictures of him and mark zuckerberg together? chip, do you have that ready? it was vin diesel who by the way is i'm sure doing very well after seven of these. >> oh, yeah. i wonder how much tesla he has. probably a big tesla owner. >> i guess we don't have the shot. >> they should have teslas in "fast & furious." a little product placement. are that's probably down the road. that's probably coming. >> right when the shorts are pressing, vin's in a tesla. >> i assume we'll see number eight, and number nine. >> i think we're running to a conclusion. >> the "star wars" franchise goes to nine-plus. >> well, i'll tell you, these are exciting movies. and if you guide goo them -- which is the one where he wears the fur coat in moscow?
9:19 am
so cool. such a cool guy. fur coat. >> i've never seen any of these -- i'm not afraid to say i've not seen one of these movies. >> just proud of that aren't you? >> i'm just saying. >> i'm actually right there with him in this case. they're for an audience. >> a lot of action there. >> if you don't like action -- >> i do like action. >> you can watch "mad men." talk about whether they got that account. fine. >> when we come back, cramer's "mad dash." take one more look. the pre-market as we start, off a busy week. looks like a tough week. a lot more "squawk on the street" from the nyse in a minute. olio. monitor it. and automatically rebalance it. all without charging advisory fees, account service fees or commissions. that may be hard to compute. but i'm a computer. so trust me. it computes. say hello at
9:20 am
let me talk to you about retirement. a 401(k) is the most sound way to go. let's talk asset allocation. sure. you seem knowledgeable professional. i'm actually a dj. [ dance music plays ] woman: [laughs] no way! that really is you? if they're not a cfp pro you just don't know. cfp -- work with the highest standard. the pursuit of healthier. it begins from the second we're born. after all, healthier doesn't happen all by itself. it needs to be earned... every day... using wellness to keep away illness... and believing that a single life can be made better by millions of others. healthier takes somebody who can power modern health care... by connecting every single part of it. for as the world keeps on searching for healthier... we're here to make healthier happen. optum. healthier is here.
9:21 am
9:22 am
there's that photo we were talking about. >> you know the vin diesel franchises are so ingrained in my mind it was "triple x" that he wore the fur coat. vin diesel is cooler than i am. i'm sorry. i could shave my head and be vin diesel. but that's pretty cool isn't it? >> yeah that is pretty cool. zuckerberg trying to be cool by hanging with vin. right? he probably thinks vin is a number on his tesla. i don't know, change your look already. enough with the t-shirts. enough with the t-shirts. come on. his mom probably wishes he'd put a tie on now and then. >> we've got the market opening for the first time in a while. digesting a jobs number that did not meet expectations or anywhere near that. let's get to our mad dash. >> the key to this market would be microsoft. >> why? >> because if it can buck the downward trend in the futures, hold the buy, say it's been punished enough. they say it would have been
9:23 am
enough. had the numbers just been cut. it would have been enough had they just said anything. so that's what i'm saying. it's enough. >> are they going to be led to the promised land? >> i think they're going to wander in the desert for another 40 years personally. >> you do? >> yeah. i don't think you get to the promised land. river's too deep and wide. >> all right. we will watch microsoft. what else do you want to watch today? >> okay, david. one of your personal favorites. lumber liquidators. raymond james says the test results are coming back not nearly as bad. it's time to get in it. jamie says the trends are stabilizing. to me it's still got that kind of not so great glow. i don't think i want to call call lumber lick waycall call lumber liquidators and say put my new floor in. but it's baseball season and you always see their sign behind home plate.
9:24 am
>> to the extent it's become a battleground stock. do you want to step aside entirely? or do you think there's an opportunity here? >> i think that this is one of those you can go up 5%. but you're playing with fire. we have a lot of retailers -- look at the dollar stores. get that employment number. dollar general, dollar tree. great places to go. maybe you circle back to those. >> all right. >> lumber liquidators too hard for me, david. >> yeah. all right. down 63% so far this year. stay with us. we're back on "squawk on the street" after this.
9:25 am
9:26 am
woman: it's been a journey to get where i am. and i didn't get here alone. there were people who listened along the way. people who gave me options. kept me on track. and through it all my retirement never got left behind. so today, i'm prepared for anything we may want tomorrow to be. every someday needs a plan. let's talk about your old 401(k) today.
9:27 am
on this opening day of major league baseball, there's 12-time all-star mike piazza often called the best offensive catcher of all time. as we watch the mets undefeated for the season so far. >> this is the best time of year when you're a mets fan. you go to shake shack. >> it's all hope. a lot of hope.
9:28 am
>> they're going to ring the bell in a moment. you're watching cnbc "squawk on the street," live from the financial capital of the world. opening bell in just about two minutes or so. fers first chance for the markets to react. alcoa wednesday, as you know. bed bath. family dollar is coming. i think five s&pers this week. >> goldman saying listen green mountain coffee you might want to take a look at it. i think that the telling point for some would be that if bed, bath & beyond can get those soda makers, remember they sold a lot of soda stream. so this is that new soda maker from green mountain is going to come out this year. very interesting to watch. coca-cola is counting on that in order to be able to juice the numbers. not meaning juice like baseball players. >> they might need more juices as opposed -- healthy and natural to your point. >> yes. healthy and natural is a very difficult thing. you look at monster beverage,
9:29 am
another thing that coca-cola owns. that's not as healthy and noz att as healthy, but it sells great. think that's an aberration? >> no, not necessarily. does take me back to that kraft deal and those brands. it will be interesting to see how much cost 3g could take out of that company. >> they have a lot of protein and there's a lot of international markets, emerging markets that crave protein. we know that from the hillshire farms deal. i also think that kraft, not buying another company right now. general mills was very good on thursday. i thought that was very interesting. >> brings to mind mcdonald's, rbc today, cutting their target from 115 to 110. they are long-term bullish but they think u.s. comps are going to stay negative for march. >> on saturday went to see the 9/11 museum which was quite
9:30 am
stirring. i suggest people do that. later on i was with a guy who actually had a big mac. just happened to have it. i said, why are you eating the big mac? he said, because it's the best-tasting food in the world. because they're great, all right? i mean was right in my face. saying listen, it's great, the big mac. you know what? it's great. you ought to try one. i said jeez, there's kind of a backlash organic and natural backlash. he was in my face. saying you know it's great. you just don't want to admit it. >> see if that holds up. there's the opening bell. mlb all-stars mike piazza, jeff nelson harold reynolds celebrating baseball's opening day. kicked off last night with the cubs losing. and the nasdaq zebra technology celebrating its acquisition of motorola solutions enterprise business. i thought about you, because you've said for weeks that numbers got to come down.
9:31 am
their point is that the market is anticipating these earnings reductions. >> now yield is 3%. it is one of the worst performing stocks in the market. wells had numbers that are lower than ever else. so it's entirely possible they're saying it's discounting the worst. my problem is there's always some brain dead analyst who sees the number and says holy cow, microsoft's not doing as well as i thought. and then cuts numbers. but i also doebt don't like the secular challenge of pcs. he has to really tell a better story. the conference call that really didn't get anyone excited about the stock. it was a snoozer. of the snoozing conference calls, that one had no arc. it had no real story to it. it really felt like a dead end. and that really was bothersome. and he sets his conference calls to piano music and tells a
9:32 am
fantastic story. you pull up a cabernet and watch that call and have some cheese. >> get out your pipe. >> you know you just feel like wow, this is a fine cabernet and a fine conference call. you don't feel that way with sachi. it's like holy cow, this is the equivalent of ambien. there are people who are sleep deprived who can play that microsoft conference call. and i'm telling you, that thing is better than the stuff that procter & gamble came out with. doesn't have the alcohol and that nyquil thing. i'm telling you, you'll be asleep. it's better than meditating. >> i'll keep that in mind. >> it's much better than meditating. >> i'll keep it in mind for a difficult evening. >> for those who find meditating to be difficult, microsoft's got a conference call for you. >> here's a shot of mike piazza making his way to the floor of the nyse. i don't know if you saw in "usa today" this morning, a survey of ballplayers. the average salary now has crossed 4 million for the first
9:33 am
time. >> i thought that was incredible. dale ennis one of the great baseball players for the phillies during the heyday i remember him putting up our awning during the spring right before the season began, that's what he did. took down the awning after the season was over. dale ennis was my hero and he was like doing my awning. but that's what they had to do. they all had businesses. >> that was before tv contracts became very large. chuck berry, he was doing cement. telling me this weekend that he got him into wharton. >> you just went from baseball to football to pelts. >> i just like -- people want to talk sports i can go there. >> yes, you can. >> how about the disney investment. $200 million into a website that is devoted to fantasy.
9:34 am
>> the draft kings. yes. >> yes. got to tell you, it took my breath away. a few years ago, bob iger was on the fence about the importance. telling him listen fantasy is reality. >> and espn has been all over it. great e-mail addresses for a great demographic, too. i can attest to that. >> you can watch me. >> there are some older fantasy fans as well. >> did a piece on fantasy. >> that's right. >> reality's awful. >> in terms of reality, next week when we start to really get a lot more earnings i think google is amongst them if i'm not mistaken. watching the technology sort of complex today. google not down any more than most. >> but it's been a real dog. the watch now. we're going to start to hear a lot more about it. the journal had a piece about
9:35 am
the future of wearables. >> garmin downgraded today. >> yeah garmin is getting competitive pressure there. people have always tried to write off garmin. those of us who have a boat know that garmin is key. >> you have a boat? >> i have a 17-foot boston whaler. we stock it but you're not allowed to drive. >> citi takes the target from 68 to 42 on garmin. because of weakness and what they think will be weakness in fitness bands. >> i think that everybody is driven by the other ways to get what garmin has. i love my iphone. my iphone 6. you really don't need a lot of this other stuff. i do think that garmin when you go to a rent-a-car, they'll stick a garmin or one of those things in. >> how about zillow? lowest level since january, it looks like on this downgrade out of barclays to equal weight. looking for short-term challenges in growth. >> i know.
9:36 am
there's a lot of numbers that are not adding up here. and i come back and just say okay listen if it's got any sort of -- if it's not health care i'm worried. it's got to blow the numbers up. even some of the defense contractors were bad last week. i think when is spencer going to call in on zillow and defend zillow. >> he's a vocal ceo. >> john legere by the way, you've got to follow john legere. from t-mobile. that guy is breaking news left and right. every day he breaks news on his twitter feed. >> i think we all do. >> do you want to know the past five aprils which stocks have done the best on the s&p? >> i would bet it's the dollar store. >> very good. also nrg. >> nrg? >> macerich and simon. >> that guy could be on the wall of shame as early as this week. >> and dr horton. all with gains of mid to single
9:37 am
digits. >> horton's chart is a thing of beauty. it's almost like that slope from k2. as long as we don't get to the tops like base camp three. >> home builders overall are showing very positive charts. >> they've been great. rates are down. people feel that now the spring has sprung and people are looking at places again. toll house and fabulous inner city stuff. a lot of people are moving back to the city. one of you guys corrected me on that. i said people moving back. a way to play those quarters. those are beautiful. bought a piece and land and said he had to get obviated because of the super fund, but that koanis is going to be venice one day. i'm putting that out there. >> i can see the gondoliers right now. >> i'm building a gritty palace
9:38 am
there. >> it's a super fun site. >> that's okay. those get resolved within my grandchildren's lifetime. >> dow is off 76 points. let's get to bob pisani, see what's moving on the floor. >> this is not as bad as the futures indicated. we were down more than 15 points in the s&p just a little while ago. right now we're only down almost six points. the important thing is we're right smack in the middle of a trading range. right in the middle is 2060. so just remember that overall here. the european markets were closed for easter monday. half of asia is closed, too. we don't have much open around the world. want to show you some sectors that are moving. the weaker dollar is helping the metals sector, so all the prerks precious metals are on the
9:39 am
upside. and the base metals, too. alcoa is up. crews up about 2%. over $50 on crude again. that's the high end of the trading range and that's helping a lot of the oil stocks. the airlines are weaker. then down again today on the stronger oil for them. banks are also lower. i think there's a concern about low yields throughout the year. flattening yield curve. yields a little better today. all down 1% to 4%. i don't have a lot to say. the only thing i would say is i look at the numbers, the confidence levels. you could drooi a truck through this. one month is not a very good indicator of anything. if you read the fine print, the
9:40 am
90% confidence level, was 21,000 to 231,000. that's how wide these numbers are. how bad they are on a month-to-month level here. so my bottom line is generally the numbers have been greatly improved in the last three to six months. here's what i'm worried about. need growth to support the earn but the weak economic data means lower top line. we have a major problem now with the expectations versus the actual top line numbers that we're getting here. going to start earnings this week. started first quarter earnings for the last 15 years. the first 15 trading days the best performer has been utilities. partly sunny been quite a big performer. industrials have also done very good. the average gain there is up 2.6%. big market maker and high speed
9:41 am
trading firm. 17 to 19. we don't have a date but they're on the road show. it's starting. this means likely in the next week, certainly at most two weeks from now, remember they withdrew their ipo last year after michael lewis's flash boys book came out. but this time they're going. we'll have more on that in just a little while. >> bob pisani. let's get to the bond pits. rick santelli is at the cme group. >> good morning, carl. i know lots of markets are closed, mostly in europe. but the markets do have to and are digesting what was, no matter what type of spin you put on it from weather, of course, to seasonalities, to just general end of business cycle type trading. you see the markets are soft in equities. if you look at a one-day chart of tens you can see at least they snap back a little bit.
9:42 am
haven't really recouped all of the big drop back but if we open the chart a bit from february, you really get to see that once again, no matter how good of a technician you are that chart looks like an anvil hanging mid air, meaning intuitively it looks like yields will go lower. if we look at one of the indications that traders monitor to see, let's look at the spread on the yield curve from 30s minus fives, hovering around 124. this chart shows you how far back. since early 2008. but it's changed a bit. we're definitely seeing this trade reversed to some extent. we want to pay attention to this. a lot of people now are talking about wow, ten year minus bunds. they're so wide it's meaningful. relative value trade.
9:43 am
it was and maybe it still is. but it's definitely changing as you see the next starting before christmas of last year. so we want to monitor these reversals. if we continue to look at what's going on one thing i want to caution, this trade in particular has been out to 190. we've shaved 30 basis points. even though much of europe is closed the foreign exchange market is trading, and very similar to that anvil analogy i gave you, many believe that the dollar index may be in the same mode. hence you see a firmer euro versus dollar. but it still is in a range we continued to monitor the 110.5 level in terms of a closing price that could reverse that range mentality. back to you. >> rick santelli in chicago keeping our eye on oil prices as well. jackie's at the nymex. >> we are seeing oil prices make a little bit of a comeback here. we had traders digesting a lot of news over the weekend, really
9:44 am
taking into account the potential for a deal with iran and saying yes, iranian oil could come back on the market but analysts are saying it may not be until 2016 so really no reason to panic to the downside right now. you also have saudi arabia raising prices to asia. this is the second month that they've done it. what that signals is that they're seeing stronger demand. they've been saying that demand is picking up for quite some time. meantime, we're also watching the dollar which is weaker today. what's also interesting is the spread. notice the spread between wti and brent is tightening here. now only around $6. really shows that the market is focusing in on wti. it is over $50 a barrel a very key psychological level, but a key technical level as well. back to you. >> thank you. when we come back one of the greatest hitting catchers of all time, mike piazza at the big board for major league baseball. the selloff not nearly as dramatic as the pre-market suggested. the dow is down 32 points and we're back in a moment.
9:45 am
well, a mortgage shouldn't be a problem your credit is in pretty good shape. >>pretty good? i know i have a 798 fico score thanks to the tools and help on kaboom... well, i just have a few other questions. >>chuck, the only other question you need to ask is, "what else can you do for me?" i'll just take a water... get your credit swagger on. become a member of experian credit tracker and find out your fico score powered by experian. fico scores are used in 90% of credit decisions.
9:46 am
9:47 am
9:48 am
♪ swing batter batter swing swing, batter batter swing ♪ >> welcome back to "squawk on the street" here on the floor of the new york stock exchange. as a lifelong mets fan, you can imagine i'm excited to have mike piazza join us here. >> thank you. >> nice to see you here. well-done ringing the opening bell. a couple of former great veterans as well of the sport. opening day, you know you hear a lot of people say well got an aging fan base. the games are too long. and there's no offense anymore because the pitchers seem to be so dominant. perhaps the end of the steroid era. you know what do you say when you hear those kinds of criticisms of the game of baseball? >> i think like any business any entity is going to go through ups and downs, and i think baseball is always going to evolve whether it goes from a pitching dominated game or an offense dominated game as we
9:49 am
saw a few years ago. so ultimately, i'm not worried. i think at the end of the day things do come back to balance. i think the pitchers right now are strong and they're talented. eventually it will counterbalance and come back. it's just the way the game has always been played. i agree with you. i think baseball needs to continue to do a grass roots movement. because their bandwidth -- you know, there's a lot of new sports out there. and kids are playing like lacrosse now and things like that. games that they have to compete with. but i'm optimistic. i think mlb is always trying to recruit new kids to play the game, because i still think it's one of the most fun and the greatest game to play. >> listen i love playing it. i've got a son who plays. but you know what he doesn't necessarily watch a full game. i mean how often do you sit down and watch an entire baseball game? >> not as much as i used to. but that's the fun of it. i think in society, everything is so time-driven. our attention spans are so short. and if we can continue to
9:50 am
impress upon people that baseball is like -- you know, it's funny, you don't hear about picnics anymore. it's like a picnic. and yet it's a little bit of a nostalgic vibe that you have to go there and not really worry about the time and hopefully that continues to at least be impressed upon people. but there's little ways now they're trying to speed up the game, get hitters to stay in the becomes, and obviously keep it to where it's at least the pace is, you know as quick as it can be. >> now, of course we're a business channel. you had a pretty easy transition from player to retirement so to speak. your family's been in the car business a long time. >> yeah i come from an entrepreneurial family. we have piazza auto group in philadelphia. >> how are things going, by the way? >> good. we have honda, acura, hyundai, mazda. the car business is doing well. i mean there's a lot of really exciting products coming out from all manufacturers. some of the domestics are hot right now. but i think the technology just is like this. i mean, it just keeps growing
9:51 am
leaps and bounds. every year you see really cool stuff coming out. so i think the car business is exciting. i'm bullish on the car business. i'm on the board of another company, a business media company. it's fun. i knew i couldn't play forever. so it's stuff like this today is really fun. >> every year i watch and you're on the hall of fame ballot. you're still in your eligibility period? >> yeah it's my fifth year now. >> if and when you get elected, do you go in as a dodger or a met? >> it's funny, i've been asked that question a lot, and i will acquiesce from that question because i don't want to jinx anything. i really enjoyed my time here in new york. i had eight amazing years. the mets fans just adopted me as one of their own, which is rare in this city. i mean i have an emotional connection to the fans in new york. but, you know i'm saying i'm definitely leaning in that direction. >> that's good to hear. hopefully we'll have a winning season with the mets? >> i'm excited. they have a lot of great
9:52 am
pitching. matt harvey is back. travis, the catcher. it's a marathon. it's not a sprint. it's a long season. we're excited for opening day. but, you know the team that has that resiliency over the course of the season is beginning to be the one that's going to win at the end. so i'm excited. i'm praying for the mets because i think the fans definitely deserve a championship. and so i'm cautiously optimistic. but i'm excited because i think they have as good a chance as any this year. >> i'm glad to hear that. thanks for joining us. >> my pleasure. >> appreciate it. pleasure to meet you. we've got "stop trading" coming up next with jim. it took tennis legend serena williams, fencing champion tim morehouse and the rockettes years to master their craft. but only moments to master paying bills at depositing checks at the atm and transferring funds on the mobile app. technology designed for you.
9:53 am
so you can easily master the way you bank.
9:54 am
9:55 am
time for cramer and "stop trading." >> this is what the bulls have to hope for. emerson came out with tremendous numbers. they were terrible. big estimate cuts. this is control processing. is oil and gas. and the stock's screaming. this is what you have to worry about. if you're really negative you have a copy that should be down very big. it's down enough. so therefore, it's very hard to
9:56 am
be as big as the negative as the futures would have liked to have been all night. i mean golf. i don't know. >> played the other side constantly because they're just al algorythmic. they have no soul. >> doing so so well. a little private company. anders is good. you want to hear what anders has to say. they have giant swing. >> we'll see you tonight, jim. when we come back breaking news on ism services. don't go away.
9:57 am
i care deeply about the gulf. i grew up in louisiana. i went to school here. i've been with bp ever since. today, i lead a team that sets our global safety standards. after the spill we made two commitments. to help the gulf recover and become a safer company. we've worked hard to honor both. bp has spent nearly 28 billion dollars so far to help the gulf economy and environment. and five years of research shows that the gulf is coming back faster than predicted. we've toughened safety standards too. including enhanced training... and 24/7 on shore monitoring of our wells drilling in the gulf. and everyone has the power to stop a job at any time if they consider it unsafe. what happened here five years ago changed us. i'm proud of the progress we've made both in the gulf and inside bp.
9:58 am
9:59 am
let me talk to you about retirement. a 401(k) is the most sound way to go. let's talk asset allocation. sure. you seem knowledgeable professional. would you trust me as your financial advisor? i would. i would indeed. well, let's be clear here. i'm actually a dj. [ dance music plays ] [laughs] no way! i have no financial experience at all. that really is you? if they're not a cfp pro you just don't know. find a certified financial planner professional who's thoroughly vetted at cfp -- work with the highest standard.
10:00 am
good monday morning. welcome back to "squawk on the street." i'm carl quintanilla with sarah eisen eisen. look who's back. we were anticipating a selloff, but dow almost perfectly flat for the moment. let's get to rick santelli. >> 56.5. it's spot-on expectations. this is march ism non-manufacturing. the bigger part of the economy. this is followed by an unrevised 56.9. so it is obviously down a bit. and just to give you some granular context, the high water mark going all the way back to '05 was 58.8. that was the november read. let's look at some of the internals after that weak employment report. we see the ism non-manufacturing employment component rose by .2 to 56.6 from 56.4. it looks as though new orders
10:01 am
also had some improvement from 56.7 to 57.8. now, i know that we are beyond those numbers but, of course it's beginning to be important to continue to handicap with jones coming out tomorrow. carl and the gngang, sarah, back to you. >> let's get some more reaction to that data and a deeper dive on friday's jobs report. steve leishman, i know you were here. had all weekend here to figure out. why the big miss? >> all weekend long to digest it. it did not go down well with me or with markets. what's interesting about this non-manufacturing report is it suggests a much stronger jobs report than what the number actually came out at. this 56 number, either the employment component or the headline number for services. quite a bit better than would have been suggested by 126,000. raising the question the market will continue to try to figure out what the disappointing report means for the economic
10:02 am
outlook and for the fed. bill dudley speaking in new jersey offered the first commentary after that friday report. >> it's going to be important to monitor developments to determine whether the softness in the march labor market report that we saw on friday whether that foreshadowed a more substantial slowing in the labor force than i currently anticipate. the labor market report is another indicator that the first quarter is likely to be quite weak. >> dudley looking for growth. jp morgan slashing, saying the unexpectedly soft march labor report raises obvious concerns about underlying growth. still, they're looking for 3% growth in the current quarter. the government reporting on friday, as you may recall just 126,000 jobs well below the forecast of 250,000. the reaction of economists ranges from those we've seen as an inevitable blip and a strong string of jobs numbers, and those who blamed it on the
10:03 am
weather, to those like jp morgan who say it questions underlying growth. as for the fed reaction also mixed pnc saying it moves their call for the first rate hike from september to july. goldman saying the risk of a hike is later than their call for september. credit swiss says a rate hike will require better data on the labor market which is what dudley said. here's the fed funds futures, taking to what i believe is a low of the contract. 34 basis points for december 2015. that's one hike and maybe just a little bit. then there's luke crandonle. there are two jobs reports. still crandle sticking to his call. >> i want to bottom line what you've just said. for many people what dudley says in two speeches this week are really front and center. not only the airline to yellen
10:04 am
but as deutsche bank reports twice last year he laid out the cutting edge of fed policy. so what is the main takeaway from what he said in jersey today? >> definitely tilted towards the risks of this report. he is not going to be a guy who you could think of as being quick to hike rates. so the extent to which this raises rates to the forecast he's going to jump on them but i think he's also saying i think he must have used the term data dependent like three or four times in the speech. >> let's bring in jp morgan's chief strategist david kelly, and diane swan. guys, good morning. >> good morning. >> good morning. >> david, i want to -- of all the stuff that was written over the weird, i want to just read you two lines from an editorial in "the wall street journal." the investment consensus seems to be that the federal reserve will wait until later this year for its first interest rate increase. as if an increase from near zero to 25 or 50 basis points runs
10:05 am
the risk of shocking the economy back into recession. if the economy is that fragile, we are in more trouble than the white house or anyone else is saying. david, how would you react to that comment? >> i don't think the economy is that fragile. first of all, we should not overreact to one miss on the employment report. this is an estimate of the seasonally adjusted change in a magnitude of 140 million people. to miss by over 100,000, that does happen from time to time. but i think you've got to look at all the other things. look at adp, look at the ism services, employment component. look at unemployment claims. overall, we were never really growing. i think 300,000 jobs per month. i think we're not growing at 126,000 either. it's a bit better than that. as for the economy tolerating the fed rate hikes i absolutely think the economy can tolerate fed rate hikes. it's just got to lower trend rate much closer to 2% to 2.5% than the 3% we've been used to. i still think they will probably
10:06 am
do that by september. >> diane, if what david says is true why is the fed apparently so reluctant, and continually, as dudley just did, stressing its data dependence? why don't they just get on with it if everything's okay? >> well, the reality is that the fed does not want -- they're still hedging their downside. they're treading as if we're on thin ice. even if the economy below us is firming. right now, it just got thinner. the ice got a little thinner. and they have to be a little careful. the biggest mistake they'd want to avert is raising rates and having to reverse course and lower rates again. they want to really know that once they raise rates, they can at least minimally pause if not continue to raise rates thereafter. and even then, yellen has said she's going to be very cautious. >> are you therefore agreeing with the wall street for suggesting the economy is so fragile that if we get on with it, they can tip us back into recession? >> i think there's a worry that it won't necessarily recession,
10:07 am
but even a slowdown would be very costly at this stage of the game. and the fed -- you know learn from the temper tantrum. we're still recovering in housing from the 2013 taper tantrum where they talked about ending quantitative easing and long-term yields rose dramatically. they don't want to trigger something like that again. they want to prepare markets for this. this is really being extremely cautious. i think that's prudent at this stage of the game. it's also notable the chicago fed and charlie evans has a lot of weight on the fed. they've done some research. it said last year it wasn't as much weather. so the fed sort of trying to figure out. we really don't know how much weather, work stoppages on west coast ports, and all these excuses really undermining the economy. when you see backward revisions, that also gives you a little pause because it means we were now losing more jobs than we were counting initially. much rather have upward revisions. so it was just one month. that would have been one thing.
10:08 am
but we know it's soft. we think there will be a catch-up. but we've got to see it. the proof is in the pudding. >> when we find out why there was such a miss or for the economic data as a whole, diane just mentioned the port congestion and the weather. those are two factors being blamed, which should be temporary. the third one that gets a lot of credit is the stronger u.s. dollar. economists are still trying to figure out just what kind of impact that's having on the economy. >> i think that will last over the next two or three years. we estimate that the stronger dollar could take about 2% out of gdp over the next three years come bind. that's about twice the boost from lower oil prices. so it is a drag. i don't really think that's what's showing up right now in the first quarter. i think that will be more later on in the year. but i'll make a prediction right now. i bet that we will see an upward revision to those prior downward revisions when we get the next
10:09 am
employment report. >> let's cut to the chase as far as the equity market is concerned. oppenheimer says analyst bearishness on earnings for the quarter that we're about to report is arguably now the most severe since the financial crisis and they think we'll be beaten by 300 to 500 basis points as we go through that period and actually then return to record profitability, they say, in 2016. so where does the market go? >> i don't know that that's quite right. as far as we can tell there was about a $2 hit from operating in the fourth quarter from high dollar and low oil. could be a $4 hit in the first quarter and the second quarter. i think it's going to be rough going in earnings. the problem is every time you have a correction in the stock market and people say where else am i to go, i think that's going to filter down. by 2016 these effects of the dollar and oil at least they
10:10 am
won't be getting worse, so year over year gains in earnings should look better. i think the earnings are trending up. it will cause them to trend up as well. >> thank you for your time. when we come back oil prices getting a boost today, although still in the red for the year so far. we're going to talk to bank of america's head of global commodities about why he's staying bearish. expecting west texas to hit 41 by the end of the quarter. dow is up 23. "squawk on the street" will be right back.
10:11 am
10:12 am
10:13 am
welcome back to "squawk on the street" on this easter monohere. mattel up about 5.5%. the stock has been upgraded to a neutral. mattel has an attractive risk versus reward ratio given its high dividend yield. analysts also citing confidence in the ability of a newly appointed ceo to restore the toy maker's fortunes. before today, the stock dropped 40-plus percent in the past four months. oil prices climbing today after saudi arabia the world's top exporter did raise crude prices to asia for the second month running. brent crude also up more than 2% since reaching that preliminary
10:14 am
iran nuclear deal. will the oversupply in the oil markets continue? let's bring in the head of global commodities at bank of america merrill lynch. good to see you again. >> good morning. >> we've got the saudis doing their move. and then we've got some lower than expected forecasts on inventories. why is the action on crude down and not up in your view? >> well look i think the market is a little bit jittery still as it relates to the specifics of the iran deal. i do think the deal is generally quite bearish for prices over the next 18 months or so. the other issue that's got the market moving is the u.s. dollar. as you know, after a few months of dollar strength the market seems to have reversed and we've seen the euro dollar breaking 110 to the upside. so i think those two factors, kind of the macro factors, the dollar weakness and the iran
10:15 am
deal, how long it's going to take to get the iran deal done, are pushing the market up a little bit. >> you know, it was a brutal earnings quarter last quarter for the big energy firms. now we're on the brink of another one. how bad is it going to be? what are you hoping to learn from these companies? >> well, i think we are looking very carefully at cap ex announcements. we are looking very carefully at how these companies are talking about their projected volume growth over the next few quarters. and we are also very interested to learn about costs. because if costs keep on going down, this makes it more likely we will be in a u-shaped type recovery situation rather than a v-shaped. so those are the things we're looking for in the earnings reports. >> i'd really appreciate your help on something that a lot of people believe is very very dangerous. and that's people that are watching now that are piling into oil etfs,
10:16 am
disproportionately in the belief that they can pick a bottom here. because there's not a huge amount of other things maybe working for them at the moment. with that understanding, the way in which oil etfs roll over and therefore buy oil almost daily at a higher price moving forward, and therefore the volume of the oil that they're holding will be less and less. can you tell me whether that is a real fear that people should have, and we need as a network to communicate that better to the people that are watching. >> well look think about it this way. when the discount is between the first month and the second month contract is $2 a barrel you're basically paying about 5% or so to roll your index positions forward every single month. so the question you have to ask yourself is will you buy a stock that had minus 5% monthly dividend yield, and that's what the oil etfs and wti are now
10:17 am
delivering. now, of course the spot price may go up and you might make money because spot prices do recover. but you are still paying 5% a month to make that happen. so pretty expensive. >> to be clear, if the caveat is you'll make money if the spot price rises, do you believe the spot price is going to rise? >> i think it's going to take a while. >> thank you. >> i think it's going to take a while. >> back to the iranian deal or at least the framework that was announced by president obama also he talked about it in a "new york times" interview, how do you trade that when it's not a done deal and when we don't have any certainty on when those sanctions on iran may be lifted and those barrels of oil will come back to the market. >> well there are two key things here that we need to pay attention to. remember, some of the comments around the lifting of sanctions have been centered around oil and banking. those are the most important parts of the deal. so if we do get the oil and banking sanctions lifted that's
10:18 am
going to be bearish for oil. and the question is there are two elements on the oil side that we have to watch. first is what happens with the 30-plus-million barrels of oil that iran has floating offshore right now that could be delivered to the market relatively quickly if those sanctions are lifted. and the second thing is how much are iranian volumes going to ramp up on a forward basis as domestic production increases again. i do think it's important to keep in mind that oil trades a month and a half ahead, so effectively the sanctions are lifted in three months or in four months. oil is going to start pricing that up pretty soon. we could start to see that pressure building as soon as the congress and senate give obama a greater backing on the iran deal.
10:19 am
this is still a deal for the market. just like the iraq lifting of sanctions deals were back in the 1990s. they were bearish deals for oil. so we have to keep that in mind as we look out over the next 18 months. >> finally you say that opec has not only given up on its traditional roll of keeping supply and demand in check. you say it's now effectively dissolved. what do you mean by that? >> we think opec has very little ability anymore to influence prices for the simple reason that saudi arabia, the cartel leader, the one that has the swing capacity to make things change, make things happen, has effectively told the market we're going to let prices do the work that we once did. so we're going to let prices balance supply and demand. that's not a cartel. that's effectively just a market finding an equilibrium price level as opposed to having a constant adjustment of volumes as they did for many years. >> yeah talk about a seat
10:20 am
change. that's incredible. thanks so much for your time. see you later. >> thank you. when we come back it certainly has been a rough year for tesla. the stock, though sharply higher today, it's down about 10% for the year. will that change now that the company has announced it is breaking a sales record? more on that after the break. >> the cnbc real-time exchange market snapshot is sponsored by interactive brokers. so what's going on today? news alert! message! email! calendar update! most of us admit to being overwhelmed by information at work. that's why ibm created verse. it uses powerful analytics to uncover hidden patterns in your email, calendars
10:21 am
and social feeds. it continuously learns how you work. and helps you prioritize the people and projects you need to focus on. there's a new way to work and it's made with ibm.
10:22 am
10:23 am
♪ it's back! xfinity watchathon week. the biggest week in television history. it's your all-access binge-watching pass to tv's hottest shows free with xfinity on demand. xfinity watchathon week. now through april 12th. perfect for people who really love tv. tesla announcing on friday it broke a company sales record for the first quarter of the year. that news sending the stock sharply higher today. it's almost up 8%. phil lebeau live in chicago with us for more on the announcement. >> we're going to see quarterly
10:24 am
sales records probably every quarter this year from tesla as they ramp up production dramatically. the news coming out on friday surprised a few people because typically, tesla releases quarterly sales announcements when they do their quarterly earnings. now the company has shifted and will announce quarterly sales numbers pretty much at the end of every quarter. 55% increase over the first quarter of 2014. the target for this year deliveries of 55,000 vehicles. that would be a dramatic increase compared to 30,000, or roughly speaking 31,000 32,000 for all of 2014. look at quarter to quarter sequentially, the increase in deliveries. keep in mind as you look at that for the first quarter of 2015 we will see a dramatic increase as they bring on the model x. the back end is where you're going to see the number of increases. model x being the biggest change. we expect some deliveries to trickle out in the third
10:25 am
quarter, but really the fourth quarter will be the focus there. can they get china on track. they've never been on track in china. that's the big question. keeping the factory on schedule for its opening in 2017. as you take a look at shares of tesla, once again trading above $200 a share, keep in mind there is one other piece of news on friday. the state of west virginia has decided it will band the direct sales of automobiles, which impacts tesla. we're not sure how many tesla model ss are sold in the state of west virginia but there are four states that we know of that do not allow the direct sale of automobiles. >> you mentioned the model x there as being critical for the company moving forward. there is a huge risk there that they fail to in a sense succeed in an area which arguably they have to to justify a higher stock price.
10:26 am
>> keep in mind, the model x is not really a mass market model like the third generation vehicle, because it's going to be starting in that 65,000 $70,000 range. you're looking at a premium suv. that's a hot market and there's heavy demand there, but the model x is not aimed at what we call the mass market which is where the third generation model comes in. that's going to be in the 35,000 range. there's no doubt simon, people will be watching to see what kind of demand is there for the model x. but most believe that when you're looking at that premium suv segment, you will see demand there. >> thank you for that update. straight ahead marngtkets higher. it is a big week after the employment report on friday, of course, for fed speak, and earnings begin. bob dole and pimco's richard clarita next on cnbc. why are we so committed to keeping you connected? why combine performance with a conscience?
10:27 am
why innovate for a future without accidents? why do any of it? why do all of it? because if it matters to you it's everything to us. the xc60 crossover. from volvo. lease the well equiped volvo xc60 today. visit your local volvo showroom for details.
10:28 am
10:29 am
here's your cnbc news update at this hour. we could learn the fate of accused boston marathon bomber dzhokhar tsarnaev. the defense team's goal has been to keep him from being put to death. they blamed his older brother tamerlan as the mastermind of the attack. ""rolling stone" retracted its story after a report cob colluded the piece had serious flaws throughout. the magazine said no one on staff would lose their job. overseas the kenyan air force struck back at al shabab in the wake of last week's militant attack on the
10:30 am
university that killed 148 people. one of the attackers was a law school educated son of a government official. greece's finance minister says his country intends to meet all its financial obligations to all its creditors. he told reporters that his government plans to "reform greece deeply." and that's your cnbc news update for this hour. back to you. stocks are in turnaround moat sharply. markets continuing to march higher throughout the morning in this early trading. actually, year to date the dow jones industrial average just turned positive. so it's been flipping around that unchanged line for 2015 now in the green. rich clarida, a pimco adviser and former assistant treasury
10:31 am
secretary is with us as well as bob dahl joining us from princeton, new jersey. rich, good day to have you here. there are a number of theories as to why this market has turned around. one of them, though is that the fed is just going to be on hold for even longer. does that seem healthy as a reason for the rally? >> i think the fed is data dependent. and certainly the market has pushed out that data, the first hike to the fall. perhaps the markets are romancing this goldilocks notion. the economy is strong enough to be supportive, but not too hot to get an aggressive fed move. so data dependent but i expect a hike later this year. >> steve leishman said that bill dudley of the new york fed this morning said data dependent three times in his speech. he also mentioned the strong dollar is coming as a shock to the economy. this suggests that the fed is in no hurry. >> the fed is in absolutely no hurry. we had janet yellen recently talking about a new equilibrium, a new normalization for policy. it will be a very shallow normalization process, and i think absolutely the fed definitely wants the momentum
10:32 am
and the economy to continue. >> one of the concerns this morning when we were looking at a steep selloff is that earnings didn't accurately reflect the valuations, that earnings are going to be rough because the economy is rough, and companies aren't hires. has that sort of disappeared? >> i don't think it's disappeared. look, we know the companies are going to have negative surprises. many of them have telegraphed that. either because of weak overseas economies, the strong dollar or potentially lower oil. what we don't know the positive surprises. are there companies that are benefiting, for example, from lower oil prices? i think there are. maybe that will be a sliver of good news. i think corporate earnings will be very confusing for the quarter that's about to be reported, and maybe the next quarter, but in the back half of the year positive surprises as the oil dividend begins to make a difference. >> if anybody should know about
10:33 am
fixed income the guy from pimco should know about fixed income. how worried should people be, how worried is the fed do you think about the joining together of two major factions? one is the malfunctioning of the market many believe through a lack of liquidity. you can't shift big trades through as you used to be able to and we could discuss why that is, at a time when the fed is creating chronic uncertainty by not clearly telling the market in which direction it's likely to move on or broadly at least when it's likely to move. how dangerous is that do you think, moving forward? both those things. >> i wouldn't say it's dangerous, but i think it is a concern. clearly there is much less liquidity in markets than there was before the crisis. in terms of the uncertainty, probably june or september. i don't think there's a lot of uncertainty. but then normalize at a very gradual pace.
10:34 am
>> will we live to regret the fact that there isn't liquidity there and why isn't it there? >> broadly, the answer is we made a decision after the financial crisis as a country in washington to change the way in which finance operates in particular to provide much more capital to banks, to go to the rule, which in effect by taking banks out of prop trading, provides less liquidity in the markets. there is no free launch in economics. >> do you think that dudley and yellen are scared to death that they could actually spike yields higher? because the market can't take the moves that they make. is that the danger that they're so afraid of? >> i would not characterize them or scared or scared to death, but they are recognizing that when they normalize, there are some unknowns and that is how does the lack of liquidity play into this cycle. they want to avoid a replay of 1994, which for those viewers who don't remember it was a very disruptive rate hike cycle. >> or the taper tantrum. >> the leaders today are
10:35 am
utilities, which were beat up in the first quarter, and energy, which is getting a rebound off of the price of oil. what does that tell you in terms of leadership in this market, especially as you head to earnings, and see which sectors are expected to post earnings growth. >> great question. i think it points to the confusion or maybe the on sense of leadership. what didn't work in the first quarter is working today and vice versa. i think we don't have a whole lot of leadership in the market, although companies with domestic earnings continue to outperform those that have significant multi-national earnings. i don't think that game is over. nor do i think the game of owning the disinflation their names and avoid the inflationary or priced increased required names in commodities and other cyclical cyclicals. i don't think that game is over. >> speaking of price increases and inflation, rich clarida, the ten-year note yield. 186. how low can it go given the fact that we're a negative interest rate world and you're
10:36 am
up. and the rate hike is being pushed out further. >> obviously we've seen lower yields on the ten-year in this cycle. i think you hit the nail on the head. a big part of what determines ten-year yield is outside of the fed or washington. it's what's happening in europe china, asia. negative interest rates in europe. there's a demand for quality duration for interest rates. that's pushing down treasury yields. we may well be in a world of another conundrum as we were ten years ago. >> would you be surprised to see a 1% yield? >> i think that would not be a good sign. that would indicate a serious, serious downturn in global economy. >> bob dahl your thoughts on -- you would think these low interest rates in the u.s. and now what we're getting with a little bit weaker dollar would be supportive of those stocks. those two things have held back stocks in the past. >> i think that there are cross currents there. when the rates fall it's good news from a dividend discount standpoint. but bad news because why are rates falling? is there some deflationary
10:37 am
force? a higher yield than the ten-year treasury. and there are some technical reasons. when you think of it conceptually, i think that makes stocks interested relative to bonds unless you have a depression mentality. >> yep, it's all relative. thanks very much. it's good to see you. coming up, kara swisher joins live from ow our new west coast home at one market in san francisco. she'll be weighing in on the apple watch, the record-breaking tesla sales and a lot more. we'll give you our first look at one market coming up on "squawk alley." here to build something stronger. others come to build something faster... something safer... something greener. something the whole world can share. people come to boeing to do many different things. but it's always about
10:38 am
the very thing we do best. ♪ ♪
10:39 am
with more and more companies
10:40 am
hiking wages, will the fed feel the hit to hike rates? plus, how to profit off the british election. it's all on and you can catch our live segment. more "squawk on the street" right after this. organic food stocks schwab can help. with a trading specialist just a tap away. what's on your mind lisa? i'd like to talk about a trade idea. let's hear it. [ male announcer ] see how schwab can help light a way forward. so you can make your move wherever you are. and start working on your next big idea. ♪ ♪ if you're running a business legalzoom has your back. over the last 10 years we've helped one million business owners get started. visit legalzoom today for the legal help you need to start and run your business. legalzoom. legal help is here. 73% of americans try... cook healthy meals. yet up to 90% fall short in getting key nutrients from food alone.
10:41 am
let's do more... ...add one a day 50+. complete with key nutrients we may need. plus it supports physical energy with b vitamins. one a day 50+ welcome back to "squawk on the street." the worst performing stock in the s&p 500 right now is hudson city bancorp. it is theyed and will not close by may 1st. shares down by about 6%. hudson city says the federal reserve told the banks it will not be in a position to review the proposed merger by april 30th. both those stocks among the worst performers in today's
10:42 am
trade. back over to you. >> hudson city down more than 6%. thank you, dom. as jim cramer noted earlier, stock of the nation's home builders are getting higher. let's get to diana olick with more data. >> home builders may be happy about the potential for long-term low interest rates but housing today is not so much about the rate as it is about the ability to get a home loan. we have some striking new numbers to show you just how tight the credit box has been. forget any comparisons to the housing boom when credit was available to basically anyone with a pulse. instead, take the four years from 2009 to 2013, and compare them to 2001 which was a relatively cautious lending cycle. using the same standards as 2001, four million fewer loans would have qualified between 2009 and 2013. that's according to researchers at the urban institute. four million. and that's just a bit less than the total number of homes that sell in a whole year. average scores needed to get a
10:43 am
loan today are still far higher than they were in 2001. less than 40% of today's borrowers have fico scores below 720. in 2001, more than half of borrowers had scores below 720. all loans now need to be fully documented, which makes things harder for small business owners or those who are self-employed. researchers point to new factors in the mortgage market making lenders extra cautious. first, of course lender overlays due to repurchase risk. that means banks are so worried that they'll be forced to buy back loans that go bad, so they're going beyond the normal underwriting guidelines. and then of course the high cost of servicing bad loans and fears of litigation. all those billions of dollars the banks had to pay to the justice department and states attorneys general among others. that has made credit increasingly tight. back to you. >> thank you very much. let's whip out to chicago. link in with rick santelli for this morning's exchange. good morning, rick. >> good morning, simon. i'd like to welcome our guest
10:44 am
this morning, frank lesch. we used to do chart work together in the early '90s. let's start with the gold market. we're throwing it on the screen now with charts starting around october. bullish or bearish gold? >> right now, bullish gold. it's really neat formation we've got going. inverse head and shoulders. the guy is standing upside down. head is pointing down. shoulder is on the other side. gold low is about 1190 end of february or so. we made a head formation when we pushed down towards that 1140 lows we made mid march here. and last week we've made the right shoulder which is down at 1180. today we're up $20 or so here. >> so if it's picture-perfect and as head and shoulders works, what close do you need and where should it go? >> we gped high edgapped higher here. a $5 gap to the upside. 1223, key area. that's a high from a couple months ago. we close through 1223.
10:45 am
we've got upside 1267. 1286. and ultimately 1309 the highs from this year. >> let's switch gears to the ag market. on wheat, bullish or bearish? >> i'm trying to be bullish. it has this inverse head and shoulders similar to the gold market. it's got that left shoulder at five. right shoulder at five. the head's down about 478, about a month or so ago, and we're pushing up about 555. 545 or so today. and we need to get through this 545 here to propel this market higher. and we push through 545, close above there, we're looking at a six market. >> both have something in common which might explain the valuations. dollar dominated commodities in terms of global trade. the dollar is obviously an issue. but it isn't the only issue. i think people make light of that when discussing how the strong dollar of late was such a detrimental impact on the grins or the gold. but they do have a life of their
10:46 am
own outside of that don't they? >> no doubt about that. and there's a lot of other influences with supply and demand that don't have a lot to do with the value of the dollar. but it is an important situation. >> and you're dollar neutral at this point. >> right now, dollar had a high of 101 here. we are back trading 96.5 or so. we had lows down towards 95. we get below 95 on the dollar we're looking down towards 92. >> the moderately bullish wheat would solely depend on how it behaves based on that technical pattern. >> exactly. >> the last 30 seconds, ten-year note yields, my first love. i personally think the 186 level is going to be with us for a why. your final 20 seconds of thought? >> we like that pivot you've been using at 186, rick. we're in a range. you know until we really get some clarity on where rates are going. upside here right now about 193 to 203. down sides are about 171. maybe down to 167.
10:47 am
>> i just want to put one answer out there. we're not getting clarity in terms of where rates are going to go. don't you remember the dates where clarity was looking at the price discovery process. those days are long gone. carl back to you. >> thank you very much, rick santelli. when we come back, baseball fans rejoice. opening day is finally here. we'll be live at dodger stadium in l.a. the dodgers just set a baseball record with a $270 million opening day payroll. the team's president and ceo will join us live after the break.
10:48 am
10:49 am
10:50 am
♪ baseball is back. st. louis and chicago kicking off the 2015 season last night with the cardinals beating the cubs 3-0. today, it is opening day for the 28 other mlb teams including my cincinnati reds and the los angeles dodgers. we're there today with their ceo and president. jane, over to you.
10:51 am
>> this is one of my favorite days of the year. >> mine too. >> full of hope. >> thanks for joining us. you have the highest payroll second year in a row. relief pitching situation is a bit chaotic. how do you feel going into the season? >> i feel we're just fine because i don't think the payroll is determining the type of team you have. i love the front office that we have and i like the decisions we made both for this year and the future. >> if you don't win the pen innocent this year what happens? >> obviously if everything goes wrong for us, we're going to have a problem. just like with any team. we have a good team and we have a lot of depth. >> you have already sold over 3 million tickets. two of them to me so far. that will probably be the only dodger game i get to see. i don't get to see it on tv. one year later, we had this same discussion a year ago.
10:52 am
time warner cable which has taken a bath on the channel, hasn't been able to come to terms with direct tv and other providers. >> we have been involved behind the scenes in whatever we can do. >> they're mowing the lawn here. >> there's no resolution i'm aware. we keep working on it. it's a very difficult problem for us. >> what if you gave back some fun? some fans -- >> a million things have been considered behind the scenes are are always going to be considered. there's nothing the dodgers haven't considered involving all the people in the process. involving cable systems, involving politicians involving the leagues. so far, there's been no answer. all of the simplistic answers that are out there have a fatal flaw in them. we continue to work until we find something that does work. >> you told them it's the worst customers relations period you've ever had. >> it is.
10:53 am
this ownership has demonstrated how much it cares about the fan experience. for us to still have this many fans that are unhappy, there's a difficult blow for us. i don't know when the solution will come. but it's not for lack of trying. and until it's fixed, we won't give up. >> cuba how does that situation now change for you -- you have the guy who could be the greatest cuban baseball player ever. we'll hope this is the year he proves that. his journey here was troubled and troubling. >> it hasn't done anything yet. but obviously, it's a big part of our future in baseball. i think everyone and every team has had their eye on cubans imgrays as they come out. the commissioner said he's in close contact with the state department. as the policies change we'll be i'm sure at the forefront of opportunities that arrive. >> how does puig feel?
10:54 am
his leaving cuba was -- >> first of all, at 7:25 a.m., i was in the locker room and he was already here. that's a little sign of his growth and maturity, his leadership. i have asked him what he plans. he plans to remain in the states like a lot do. i don't know how he feels. but obviously has family and friends. wouldn't surprise me if he wants to go back. >> and finally how much have you spent on improving the stadium. we were shooting the new food earlier. there's fried dodger dogs and vegan nachos. >> we try -- as i said it's the customer experience. we try -- >> well, you have an operating profit this year. >> you can believe forbes any time for whatever you want on any subject, but that's up to you. i never discuss dollars publicly because it's all about winning and playing on the field. i think we're going to have a very good season on the field.
10:55 am
>> thank you so much for joining us. i hope to see you in the post season. guys, back to you. >> not only is major league baseball kicking off, but jon fort is now addressing the summer. >> trying to make it happen. warm weather trying to make it happen. not just opening day for baseball also for our new san francisco digs. one market we're going to take a look at that. also apple watch tours. apple posting videos showing people how to use it. and finally, charles phillip, big enterprise software company, it's private but does more than $2.5 billion in revenue. we'll have all of that coming up on "squawk alley."
10:56 am
let's take a look at your credit. >>i know i have a 786 fico score, thanks to all the tools and help on so how are we going to sweeten this deal? floor mats... clear coats... >>you're getting warmer... leather seats... >>and this... my wife bought me that. get your credit swagger on. become a member of experian credit tracker and find out your fico score powered by experian. fico scores are used in 90% of credit decisions. there's nothing more romantic than a spontaneous moment. so why pause to take a pill?
10:57 am
and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. why pause the moment? ask your doctor about cialis for daily use. for a free 30-tablet trial go to
10:58 am
well, in anticipation of the big launch apple rolling out instructional videos for the apple watch. the first four of the planned series of guided tour videos have landed officially on varying in length from nearly five minutes to 97 seconds. the videos demonstrate basic functions of the watch, customization and more details use. in a more convenient less
10:59 am
obtrusive way. apple begins taking preorders for the phone on friday. watches available on the 24th. obviously investors are curious as to how this is going to go down in terms of demand. >> it's all a question of how hard you product. the european markets are closed today for easter monday which is a thing in europe. the u.k. it's now 4:00 in the afternoon. a huge number of people. tens of millions are now drunk in the gardens. >> is that what happens? >> yes, every year. >> i missed having you here last week. >> i was in garden getting drunk. >> we'll send it over to you for "squawk alley." >> thanks guys. good morning. it is a very big day. it's 8:00 a.m. at our new one market bureau in san francisco. it's also 11:00 a.m. here on wall street and "squawk alley" is live.
11:00 am
♪ ♪ >> good monday morning. today is a great day for us here at cnbc and "squawk alley" where we cover the top stories in tech every morning. today, we're excited to welcome you to the opening of our new home in san francisco. we call it one market. it's an


info Stream Only

Uploaded by TV Archive on