matt: welcome to the most important part of the session. this is street smart will. stocks --"street smart." stocks rising back to record highs. we are counting down to results from twitter, go pro, and kraft foods after the bell. plus, economist nouriel roubini will join us, and billionaire investor jeff glen rock gives us his call on european sovereign bonds. "street smart" starts now.

we have less than an hour until the close of trading. let's go to the breaking news desk where scarlet fu is looking at the action on the street. scarlet: the action was concentrated in the moment -- morning. there is some drama that has given way to a quiet afternoon. a sharp drop, and a recovery. we reached session highs about 90 minutes ago. we have since been drifting lower. the morning did feature disappointing economic data. an unexpected drop in consumer confidence for one, and another month of contraction in the richmond manufacturing. all of this is as the fed began a two-day meeting that concludes tomorrow. right around the time the data came out, there was report that iran's military seized a u.s. cargo trip. the pentagon denied the report

saying the ship fired upon was flying a marshall islands flag. treasuries did fall with yields currently at session highs. you can see right there, the 10-year at 1.89%. the dollar weaker as well as we head into the final hour of trading. matt: two i very much. a story we are watching -- president obama rolling out the red carpet for japanese prime minister shinzo abe. they talk security and economic issues and face reporter questions. peter cook is at the white house with more. the leaders sounded optimistic about a pacific trade deal didn't they? peter: they did sound optimistic. the hope was some time ago when the leaders met they might be rolling out a final agreement with regard to the truce -- transpacific partnership, an agreement that might pave the way for the other 10 nations to jump on board. that is not what happened.

they talked about the progress they have made, but they are not there on a final deal. the president sounding optimistic they will get there in the end. take a listen to him a short while ago. president obama: with respect to trade we reviewed the progress our teams have made toward the transpacific partnership. i know that the prime minister, like me, is deeply committed to getting this done, and i'm confident we will. peter: and could get a helping hand from shinzo abe tomorrow when the prime minister speaks to a joint meeting in congress. he could make a pitch to help the president send this deal, a transpacific partnership, too skeptical democrats in congress. matt: peter, the president also offer tough words and a long drawnout answer on the situation in baltimore. peter: that is right. we knew he would get the question, asked about the violence overnight. he was critical of those that he

called thugs, criminals who were alluding stores and causing problems overnight, and also some words for the injured police officers, but he said the country as a whole needs to do soul-searching to deal with the issues that are basically at the forefront of the violence we have seen not just in baltimore, but other american cities. he said it is not just police's responsibly, the country as a whole. matt: stephanie one erik schatzker are at the milken conference. nouriel roubini joins them now. stephanie take it away. stephanie: thank you, matt. here we are at milken and we always hear about the new normal. for you, it is the new abnormal. what does that mean? nouriel: seven years after the global crisis, policies that did

not exist are still the norm. zero interest rate policy qe forward guidance, and that is the first puzzle. some people argue that all of the e-zine of money, balance sheet increases will cause runaway inflation, bond yields through the roof, collapse of the dollar gold prices going through the roof, but look at the reality. the opposite has happened. bond yields are low and falling, negative around the world. the dollar is soaring. gold prices are falling 50%, and last year the worst performing currency, if you can call it a currency, was it coin, that lost two thirds of its value. we live in a world when there is a lack of capacity. too much supply, not enough demand.

labor market, high unemployment. lots of oil, energy commodities. we have these inflationary and deflationary demands in the world. erik: what will it take for the demand to revive? nouriel: i would say many things are required. first, structural reforms that increase potential growth. recently, i said between the age of population lower productivity growth, potential growth is falling. we need more aggregate demand. we need them right combination of monetary and fiscal policies. i think we emphasize too much the use of monetary policy, not enough of fiscal policy. with interest rates so low a mother are in for structure problem -- projects in the u.s., europe japan, in emerging markets, that would be highly productive. we have to produce aggregate demand on the physical side. erik: the supply-demand balance

you are looking for you calculate on the basis of what -- the supply-demand relationship we knew before the financial crisis? nouriel: certainly potential growth for a number of reasons including too much debt and a rising inequality has fallen but we live in a world where there is a glut of capacity, good neighbor -- good labor market. erik: this is capacity that was installed before the crisis or since the crisis? nouriel: some of it was before but investment rates in china increased from 40% of gdp to 50% of gdp, and now china is slowing down leading to a deflation in commodities, but all of this excess capacity. manufacturing is being dumped in global markets. therefore, these inflationary forces will be not only in the commodity space, but also in the space of industrial and manufactured goods because of

the slowdown in china. stephanie: let's talk oil. oil prices are rising. woody think they are going and why? nouriel: i think over the next year and a half gradually oil prices will go higher, but it will be closer to $70 a barrel for two reasons. demand will recover, but more importantly lower prices imply that high-margin producers are going to produce less, and more importantly, everyone around the world is not reducing capital spending in the sector by 30%. over the next two years, reduction in spending will affect prices in the future. we will not go back to a world of oil prices of $100 a barrel. i think the new normal in oil markets will be around $70 for the next two years. erik: and why -- the production capacity that is being taken out of the market, or the behavior of the saudi's? nouriel: well the behavior of

the saudi this important because they did not want to lose market share, so they decided better to have that -- lower oil prices to get rid of the high marginal cost producers, maintain that capital spending, to force everyone else to do under investments into new capacity so prices are low, but the market share of saudi arabia is going to be larger over time. there also geopolitical considerations. with low oil prices the strategic enemies of saudi arabia, whether it is a ran and ran supporting -- iran, and iran supporting syria or russia. stephanie: let's talk greece. what happens if the greek banking system truly unravels? nouriel: the risk would occur if there is an accident and greece decides to go to the imf, the bank run accelerates, capital controls run out of money and

they will start to use a parallel currency. one of the reasons why the greeks are going to become more compromising and the decision yesterday to try to sideline mario draghi was because the greeks know it is an economic and financial impact on the banks. that has more losses for greece than the troika. the troika has more leveraged power on greece then greece has on the troika. we have avoided an excellent, and i think we will avoid an accident. erik: let's look into this further. you are saying that by effectively firing a negotiated for the eurozone with greece, that signals that greece is not willing to play microchip, take it to the end. -- brinksmanship, take it to the end.

nouriel: there was a game of chicken where they were saying they were not going to blink but in terms of leverage, i think people realize that the compromise is the troika. miracle told -- angela merkel told them that if we optimize the middle, we will give you the money, and that is why you have to phase out the groups. you have to create a new coalition. erik: that will be one hell of a short run as prime minister. nouriel: well, he he goes to unilateral action, or he gets to the left of his party and you could find other centrists in a coalition. that is the direction we are going. stephanie: be realistic. you say it is going to be bumpy but it sounds more like an earthquake, a tsunami that bumpy before any of these things to happen. nouriel: if an accident were to

occur, as i say, you have other contagion occurring, and both sides are realizing an accident will hurt both sides and there is more willingness to find a compromise. we have the time. i think in may the ecb will give greece enough to offer t-bills to pay the imf, and then a program in july and august. so, it is not yet an earthquake at fedex it were to occur. -- if an accident were to occur. there are political and geopolitical reasons. russia is becoming more aggressive in the ukraine, and the baltic, and the americans and germans know you want to have peace in europe. erik: i want to take one step back and talk about geopolitical risks because we have been told for years already strife in the middle east, and what is going on right now in syria -- that

isis is waging -- the tension around iran, we have been told that would always lead to oil prices being higher. oil is not $125. it is $55. we have been told that instability in panic in greece will lead to inflation, and it is trading through the 10-year treasury. stephanie: which is crazy. erik: and we have been told that the antics vladimir putin has undertaken in the ukraine will strengthen russia's hand and demonstrate the weakness of the west. what has happened instead -- letter putin cannot turn off the gas taps to europe because he needs the cash. none of the scenarios have played out. erik: we are --stephanie: we are confused. nouriel: central banks have suppressed voluntarily with unconventional monetary policy. the volatility would have been higher. secondly, in the past, whenever there was a geopolitical risk in the middle east, there was an

actual set -- shock to the supply of oil. in 1973, the iranian revolution, the iraqi can -- invasion of kuwait. there is not a shock to the price in the middle east, but because of the shale gas revolution, we have a glut of supply. the premium is not there. there are differences relative to the past. stephanie: let's talk the fed raising rates. last week, stanley druckenmiller said they should have done it nine months ago. what do you think? nouriel: i disagree because the economy is weakening. the dollar is strong. i have been saying they will not hike in june. this point, september is not obvious because three months ago we were saying demand will be strong. consumption is weak.

capx is weak. the strength of the dollar is hurting exports, inflation, and growth. and the fed is to be worried about the impact of the dollar on the real economy. i would say december, maybe. not earlier. once they raise rates, they will be slowing gradual. erik: people accuse janet yellen of talking down the dollar. a , is she and b to talk down the dollar? nouriel: i would say she is not exquisitely talking down the dollar. six months ago people say domestic demand will take care of that, even if exports are week. now we realized the mistake demand is softer, and now we have to worry about the dollar. certainly, talking to people about the fatty, i sense a different concern for the first

time in years about the strength the dollar -- the fed, i sense a different concern about the strength of the dollar. it is not an exclusive policy, but it is what you hear. stephanie: what do you really think? no opinions? nothing? [laughter] i am kidding. nouriel roubini, thank you for joining us. always a pleasure. matt: it was a pleasure to listen. thank you. coming up, more from the global -- the milken global conference. we will hear from double line capital cofounder and ceo jeff gundlach. he sometimes has strong opinions as well. twitter reports after the bell. we will bring you those numbers as soon as they cross. can the company keep up user growth question mark shares headed into the report are down. ♪

matt: just about 40 minutes until the close of trading. scarlet fu was looking at notable movers as we approach the bow. scarlet: i want you to come inside a bloomberg terminal. this is twitter. you see a leg down in the shares where it went to below $49.50. it is good for a drop of 3.2%. celerity tweeted out the earnings. they are sending headlines saying that adjusted earnings per share of seven cents per -- for the quarter, which appears to top the average analyst estimates of four cents. they are reporting revenue that would be below what analysts anticipated. the monthly average user for twitter up 302 million, basically in line with what the company had guided for in its

first forecast. an increase from the previous fourth quarter and the one-year ago period. the fact that these numbers are coming out is causing a big leg down in shares of twitter right now. really about one hour before earnings are supposed to be released. matt: yeah, getting leaks this close to your report is not a sign that would make people feel couple with your company. we just heard nouriel roubini speaking about what is holding your back. joining me for the rest of the hour, wall street veteran mac -- mark patterson. you like what nouriel roubini does and how he doesn't. what you think about his performance just now with erik and stephanie? mark: exceptional. he is a gifted mind that can reach into the vaults of contemporary and historic data

and cross pollinate. the range of topics he covered was quite profound. u.s. come a lot of questions. he is very thoughtful, not just analytical ideas but conclusions and recommendations about the future. the hardest part is the letter. matt: you agree with what he says -- he was described you as you a person in the room more bearish than he. mark: that was back at a panel for and why you students. -- nyu students. within months, things have gotten better. let's tackle a couple of things he talked about. the first thing he talked about, interest rates -- he is not a big believer that the fed is going to raise rates eminently. i share that view. i also think it is not highly relevant whether his june september, or did -- whether it is june, september, or december. matt: it will be nothing -- a quarter of a point raise, then

nothing again? mark: i agree. all that is healthy for two critical components of the economy. the insurance companies will go bust if we having no interest rate policy forever. their business model cannot hold forever. we need positive interest rates. matt: do you think the economy justifies zero interest rates? even if you do not think the growth is not as it steep -- as steep as it should be, we are still not a zurich economy. mark: people like you and me and more portly the people that look at these decisions, cannot make these decisions in isolation or we have to look at where we are versus trading partners, the strength of the dollar interrelationships -- who owns our currency, our debt? not very unlikely germany's economy. matt: what you think about the strength of the dollar? do think it continues or have we plateaued?

mark: let's hope we plateau. it would be better if we can become a strong exporter and oil could add another $10. i think he is a little bearish on where interim, 18 months out, oil prices are going to be. i'm a little more bullish. i think we're going to see, not $100, but he is looking at brent going from $65 to $70 over the next month. i think it will be 10 to $15 at least. i think we will see a stronger oil base. matt: he had great reasons. one of the most interesting things was his take on greece. he says that record is in a stronger position because they think they can ring fence any catastrophe that comes from a greek exit. do you agree? mark: yes, and that was the most powerful card the greeks could throw at those that had a grip on the throat. matt: if we go down, we're taking you with us. mark: semi-comical hollywood

element is they get a motorcycle got in a black shirt, a phd, to confront a guy in a wheelchair. matt: he cannot be messed with. mark: you cannot mess with the guy. it was a big card to play. the imminent catastrophe would destroy greece. they cannot afford that. the outcome nouriel roubini described as commonsensical in my view. matt: he said they are raining and verify kiss, but there are two schools of thought -- either they are taking him out because it was too embarrassing for them, or they have moved into more of an admiral or general's position and sent in someone else to be on the field. matt: he is still holding the bad and the ball. --mark: you still holding the bad and the ball. he loved the role. no question about it. i think they have recognized the

reality you sketched 30 seconds ago. they could lose a lot more than anybody else could at this juncture. they must meet the 750 million dollar imf payment and multiple payments behind it. this restructuring is critical for the long-term benefit and politically he says that. citrus has -- has since that and he pushed varoufaks who did a good job of breaking tables. matt: let's move to china. they let they are blowing up a huge bubble on the way. mark: you can see elements of that. they're almost in a no-choice mode. they have to somehow feed the bubble. far from comedy. 7% gdp is a terrifying ambitious number for all countries but china. that is the week number for them. matt: although if you keep inflation up at the same level

it does not look as appetizing does it? we have to take a quick break. mark patterson will stay with me. my cohost for the hour. when we come back, double line capital's jeff gundlach will give his call. he will tell us if he thinks ecb are blockheads, to. ♪

matt: welcome back to "street smart." i am matt miller in for alix steel. twitter shares were dropping after a leak. now they are halted ted let's get back to the news desk or scarlet fu is watching situation unraveled. scarlet: unraveling to a good way to put it. polarity tweeted out what looked to be highlights of first-quarter results. they were not supposed to be released until after the markets closed. the number started to come down over twitter. twitter was already trading lower before these tweets came out, and it went from $51.23, to

below $49.50, and then it seemed to stabilize before taking another leg down below $49. that is where it is right now. $48.67. this is volume in shares of twitter. you can see volume picked up as selling accelerated because of all of these leaked numbers. here is what was tweeted out when it comes to results -- adjusted earnings per share of seven cents for the first quarter, which appears to top a consensus of four cents. revenue of $436 million was lighter than what analysts were looking for, and the monthly average users was in line with what the company implied in a forecast. we reached out and neither got back to us with any kind of response. now that shares have halted, twitter is being asked for a comp -- confirmation of it will with an announcement.

matt: twitter getting ready to put out its own release since it has already been front run on twitter. scarlet: we will keep you posted because we do not have all the numbers here. matt: scarlet fu on twitter watch. erik schatzker is at the milken conference. earlier he spoke to jeff gundlach and asked him about the low interest rate environment we all have been talking about. jeff: i am worried that the things we all think we have learned -- i have been in the business for over 30 years, so i think i have learned something -- what i've learned has been informed that the only secular decline in interest rates. we are like summer and -- and sex. -- incects. a chinese philosophers and you cannot talk about ice with a summer insect. my guess is the historical norms we have educated ourselves on

might not hold during an opposite type of secularly rising interest rate environment. the average default rate on high bonds has been 4% per year. maybe during secularly rising interest rates it will be 8% but i think it will be higher. the rollover of bonds to talk about is simultaneous with rising rates generally -- that is not a prediction, but a premise and the consequence of the premise would be that high yield bonds would probably suppress people in terms of the default rate being out of context. erik: is there a way for you to capitalize on this conclusion today, or do you have to wait? jeff: i am long high-yield bonds now. i owned almost none at the end of 2013 because i thought they were wildly overvalued. our work at double line showed they were the most overvalued in history.

long-term treasuries had a great year. junk bonds had a clunker of the year, so that was the right move. with the valuation move, the high-yield bonds are reasonably attractive. they have done quite well lately. they're gone cheap with the energy meltdown. think it is ok to own high-yield bonds, but you have to think about investing down as we move into 2016 is certainly later into 2016. i believe the rising interest rate crowd is onto something. i often get asked about rising interest rates, which we know is going to start tomorrow. actually rising interest rates started. i often use a metaphor from the ernest hemingway novel "the sun also rises." a character asks how you would bankrupt, and he says two ways first gradually, then suddenly. i think that is a metaphor historically if you are a student of interest rate. that is how they bond.

gradually. the perfect storm for interest rates rising -- the most plausible case seems to be out three years from now. erik: what about today -- the best trade in the bottom market? jeff: short-term, i like emerging-market debt. they get nervous when the dollar is strong, capital flows, and perhaps repayment currencies that this transit in the dollar. the dollar stopped rising when the fed blinked back in a meeting with a mention the dollar. so we are now in a weird, circular logic world. matt: we'll take a quick break. more headlines on twitter. scarlet: shares were halted from trading after selerity came out with initial reports and twitter came out with their own results and we have adjusted earnings per share of seven cents versus a consensus of four cents, so that is a beat, however twitter is cutting its full-year

forecast the negative news, and revenue, while up 74% at $436 million, it does trail the average analyst estimate. adjusted even death -- ebita was higher than what analysts were looking for. active users is roughly in line with what the company anticipated. there are also other headlines about google double-click services partnering with twitter to help twitter so more promotions. i do not have further details than that. this is a promotion between google's double-click platform with twitter that aims to get it more monetization of twitter's user base. for the full life in outlook, twitter is anticipating revenue of 2.17 year -- $2.17 billion. it is lower than originally expected, as high as 2.3 5 billion, and the consensus was

even higher. so twitter reducing its full-year profit and sales outlook even as a first quarter earnings per share beat estimates. revenue beating estimates. matt: interesting news on twitter there. it is amazing that this earnings week brought the shares down -- leak brought the shares down so much pretty see them trading down 5.8% in the aftermarket. i was taken look at what they have done year to date, and it has not been a bad year for twitter at all. this is only brought them down from a 30% gain. that means they are still doing pretty well year to date, so it is not so bad for a cut forecast and a miss to still be up 25% year to date. scarlet: that is a good point. i am looking at the headlines. matt: 35%. i should correct myself. scarlet: 35%. twitter also making an announcement they will acquire

tell apart, a marketing company -- this is an acquisition from twitter. there is no dollar amount given here. they are unveiling all of this news along with this partnership with google's double-click platform to make it easier for marketers to track twitter campaigns. this is all part of monetizing its monthly average user base and move beyond its niche status , which is the criticism levied against twitter. it is very niche and popular with a loyal base group of users, but it is having trouble gaining traction beyond a specialized group of people, like us in the media. matt: let me bring in aaron kessler from raymond james. let me ask, does this hurt your confidence in the company, or is this something that occasionally happens, companies get leaked?

carl riccadonna --aaron: it does happen. we have not heard twitter moves as well for more direct response advertising can that is been one of our concerns recently. matt: so, what are you looking for to support this -- we just looked at year to date, 35% gain, not bad. why is it worth 35% more than it was at the beginning of the year? aaron: we will have to see what it does here. it is still halted. we have to see what it does tomorrow. it is still growing quickly. there is potential, but any to make the change to further improve. a lot of users, a lot of potential, but not monetizing that yet. matt: obviously monetizing is the name of the game and it has been before twitter even went

public. people want to see them make money on ads and they're not delivering on that quite yet. scarlet: they're not delivering on that yet, and i have a comment from the costello in the news release. he said they fell short of forecasts due to lower than expected contributions from some of our newer direct response product. you and i use twitter pretty regularly, pretty professionally. i would say we are part of the core group of niche users. direct response products, do you know anything about this, have you heard of this, have you ever responded to it? matt: i use twitter a lot, and i have actually responded to an ad that came across my feet in the form of a tweet -- feed in the form of a tweet. there is a company called shift that boxes up your stuff and males it for you. i have not seen a lot.

aaron kessler, is is the kind of thing twitter hopes to make money on because although i responded to that one, i have not seen very much advertising otherwise. aaron: there are two types of advertising -- brand advertising like coca-cola, and then e-commerce company's, and that is what we heard twitter is not as effective at today. they have not figured out the e-commerce stuff. that is a big source helping facebook right now. he does not float to twitter yet. matt: it seems there must be some advertising that is hard to directly value as far as how much it hits your bottom line, right? if pepsi is tweeting from the super bowl, that might improve my opinion of the brand, but they will not know because i am not clicking to add a quarter to twitter's coffers every time.

is that an issue of complexity they have to deal with? aaron: there are companies figuring that out, so there are ways to track geographically when you test in different markets. i do not do that as an issue. i see it more as the format you see on twitter. the formats are not as good as facebook at this point. there is room for improvement, but not there yet. matt: scholar what about the shares here? is there any indication they will -- scarlet, what about the shares here is any indication it will rejoin us before the bell? there is only 18 minutes before the bell. do think they will open back up or are they done for the day? scarlet: it is a good question. they have 18 minutes to go before the close, and they were halted at 3:27 p.m. they had plummeted 5.8%. you can see the spike in volume might around 3:15 p.m., 3:10

p.m. of course, this is before twitter came out and confirm -- confirmed they reduce their full-year forecast for sales and profits. perhaps more people want to get in. i will keep my eye on this. so far, twitter shares will -- have not resumed trading. just to give you numbers basically in line with what they forecast, that is an increase of 18% from a year ago. the problem is even though 18% sounds impressive, in the prior quarter, twitter posted a 20% increase for the number of monthly active users. so, that would indicate a deceleration of twitter's user base, something you do not want to see, when this is a company trying to prove he can stay profitable. matt: i want to point out that selerity tweeted that the release was sourced from the investor relations website, no

leak, or hack. just to make it clear, they did not do anything illegal or immoral. they looked on the website where they apparently flubbed the timing of the release. we'll continue to talk about twitter after a quick break. stay with us here on "street smart." ♪

matt:matt: we have breaking news on twitter. it's investor relations department apparently released earnings early part one analyst looked at it and tweeted out results. scarlet fu has more on the fallout, the aftermath. scarlet: the aftermath. the stock had tumbled in the wake of these headlines that came out on twitter on twitter by another company on twitter. the irony is not lost on anyone. in terms of the outlook, the second forecast falling short of estimates come a week to clarify this includes the impact of a strong dollar. there is a four x impact, and it

also mentions that it reflects the acquisition of tele-part. we do not know how much it cost because the company did not say how much it cost, aside from the fact that it is making this purchase to acquire tele part, a marketing technology company that will close on june 1. perhaps the second quarter outlook and full-year outlook is not copper bowl with full-year analysts. if you come outside, you can see this -- come inside the terminal, you can see the spike up in volume even as the price continues to lower now down to $40.20. volume picking up right now in the final minutes of trading with 12 minutes left to go before the end of the session. trading really picked up at about three: 10:00 p.m., 3:11 -- 3:10 p.m. three: 11 p.m. --

numeral 3:11 p.m.. we will continue to keep and i here as we dig through these releases. the headline number for you are that the headline earnings beat estimates. revenues below estimates, and monthly average users basically in line with what analysts were looking for, even as the outlook disappoints because of this acquisition of tele-part and a strong dollar. matt: the stock getting crushed on very high volume paradigm here with paul sweeney from bloomberg and television and lee drove in. i feel like we could watch that chart for the next 10 minutes and be sufficiently entertained. we will not do that. you cannot set a minute ago with interesting story. you have seen selerity do this in the past. paul: a bunch of years ago we got the selerity feed when i was

working at a hedge fund and i was the first person to see microsoft release earnings. i'm sitting there looking at it, and thinking can this possibly be true, and five minutes, seven minutes goes by, microsoft is not moving i tweeted it out and microsoft starts to move. it took that long for the market to integrate. this time it was immediate. matt: how far we have come. leigh: 3% this time, but the stock was down 20. there was a 70% arbitrage. if you knew the numbers were real -- i have no interest in the company, but it is pretty interesting. matt: how much does the 17% differential -- how much of it is investor disappointment in the actual earnings report -- release, and how much is investor disappointment in twitter's ir? paul: it is all about --

matt: it is not about the users? paul: it is a topline story, with investors trying to figure out if it is a niche media story or if it is brought pattern when they called with a revenue miss it goes to the heart of the matter -- i'm not sure if they can grow their subbase, and even if they do, i am not sure they can monetize it. this is that we see with weak revenue guidance. it goes to the revenue story, and embrace the surface once again the concerns from twitter from day one. matt: let me go back to aaron kessler from raymond james who sums it up perfectly before we saw twitter begin to trade again. you had the right directional call as well. you sort of, knew this had to come down further after the shares resumed trading. what you think about the kind of drops we are seeing now? 20% 25% -- is it worth a

quarter of twitter's value? aaron: not a big surprise. there were at the 40 dollar range with subpar results, and even last quarter day had mixed results user growth was soft -- mixed. user growth was soft. you have weaker some growth, and now you have mixed ad results as well. that is not translate into good success near term. matt: why can they not monetize things quick enough acquiesced to turn more tweets into ads? leigh: their stock is based on the -- generating revenue growth at a high clip. the story has gone into the background because of the fact that they have proven they can

do revenue growth, but this throws that all into question. matt: you take a quick break on bloomberg, come back and talk about this breaking news on twitter. ♪

matt: welcome to our viewers around the globe. you are watching bloomberg television. this is "street smart." i have matt miller in for alix steel. twitter reporting numbers earlier than normal. revenues falling short and they cut their first year forecast and the results were first reported by selerity that found them on the investor relations page. let's go to scarlet fu on the breaking news desk. this was a bit of a calamity for twitter, but it would have been just as bad if they came out 30 minutes later. scarlet: it caught everyone by

surprise to you can see the damage done. let's show you the movement in the share price. this is twitter, lower through most of the trading session. this is where the headline started leaking, crossing on twitter by another company --selerity. we stabilized, took another leg lower, then it was halted from trading. twitter released the results themselves and when it reopened, a traded at almost $40 a share. we have since come up a little bit down by only 20% as opposed to 26% and they are currently trading up $41.65. i will move this panel so you can see the movement on the volume. trading was quiet for most of the session, and then a big spike at about three: 10:00 p.m. or so -- 3:10 p.m.. then the volume spikes up. let me come inside to this screen here to show you twitter's revenue in the second quarter. twitter reported revenue in the

quarter that missed analyst estimates. there is the first quarter number that shows the deceleration, highlighting the concern here about twitter's monthly active users slowing down. either the numbers projected for the second quarter, the current quarter, and for the third and presumably analysts and investors will have to take these down as well, and the repricing re-rating is causing the drop in the stock price, off by 18% to $42.21 a share. matt: we are looking at the court of the disappointed there, the drop. scarlet: that is the drop, the court of the disappointed. these are the projected revenue numbers from analyst that we have survey. you can bet analysts are looking over the numbers, bringing the numbers down, waiting to get more details. matt: i do not want to to try own horn, but it is pretty fantastic that we have that in the bloomberg terminal already.

michael joining us on said. there are a lot of things i want to talk to you about be on twitter. let me ask from your decades of experience in the industry, is this the same thing -- the kind of thing you see fairly often leaks like this, or is it a rare problem? michael: you see it from time to time from big established companies and other ones. matt: it is a fat finger, basically. michael: it is a fat finger at a young company like twitter will get punished more, as you were suggesting earlier. on that bar chart, it would be interesting to see how much during the call they back out the fx issues. every company has been talking about fx and guiding people lower throughout the year. matt: that is right, for said -- mark said $2 billion were destroyed by the strong dollar. michael: people are giving them the benefit of the dollar. matt: well if they were making

any money at all, right question mark you have to make some money and other currencies for it to be an issue. leigh: they do not >> were talking about a 20% cut in second-quarter revenue outlook. >> this is a challenge for these guys. they have had some concerns over the last couple of quarters although things have stabilized a little bit. we're not seeing them introduce new products. matt: barely any tailwind on twitter from the prices at the. we just heard the closing bell. gain on the s&p and the dow jones natural average, -- national average. scarlet: i just wanted to tag

would you guys are talking about would twitter and international revenue. international sales make up 34% of overall sales and international revenues just puts it in one bucket, $147 billion. that was a doubling from the same time a year ago. it doesn't sound like a lot for a company that has seen so much momentum in trading and so much hype built into the share price. matt: that's what the ceo gets paid in one year. as far as stocks, scarlet, do we have any more record highs today? we were seeing them all over the place. scarlet: let me take a look. the s&p 500 and the dow gaining by at least .3%. the dow up .4%. when it comes to record highs, we are skirting around those levels.

the dow industrials not getting there. when it comes to the s&p 500, missed the mark. the last tie was reached on april 24. most of the trading day was dominated by news about the economic data. manufacturing numbers came in we had an unexpected drop in consumer confidence as well. that caused a lot of gyrations in the morning session, in early trading. but we stabilize throughout the trading day. it wasn't until about 3:20 that we saw more activity and more drama coming out during the trading day. other than that it was a very quiet session. health care shares moving quite a bit. the earnings report set of come out this morning, it did not get people really excited or trading in one direction or another. in general, we had more

companies beating analyst estimates than you expect, and that's typically the trend. matt: it always happens, because companies are very good at guiding analyst down as we get closer to earnings and then massaging their numbers down. did twitter executives just not understand how the game works yet? leigh: instead of the sell side they cannot really massage our numbers at all. we are about $10 million above where the sell side was. that's why twitter stock has gone up so much. this is a huge miss. they really did miss it big. matt: why isn't twitter under promising and over delivering? is it a problem with their monetization model?

>> in the last few quarters they have under promised and over delivered. i think they got a little ahead of themselves. they had a strong quarter in the coming into a seasonally weak quarter. you had a couple of one-time events plus the direct response advertising has not been as strong as they expected initially. that was a real issue on the corner that we will hear more about on the call. matt: i wonder why they aren't getting any credit for -- quitting tobacco was easier for me than quitting twitter. i use it more than anything in my life. don't they get credit for having such a dedicated user base? >> they do, and one thing they try to sell is the engagement. like every other social site, they are trying to drive engagement.

presumably it is a more attractive person to advertise to. matt: they need to turn it into money. what can they do to change that? leigh: i don't know if they had visibility themselves into how the ad products are going to go. facebook has done an incredible job. stuff like the drafting guys who are paying one dollar to get four dollars in revenue. twitter thought they could do the same thing and it just looks like they were not that successful at doing it. how do you make that business go? i don't know, that is dick's job. matt: let's shift our focus to buffalo wild wings. julie: buffalo wild wings coming in below estimates. $1.52 is the earnings for share.

one dollar 63 cents is what analysts had been projecting. revenue falling short of estimates. the company-owned store is up 7%. analysts had predicted 8.6%. the company calls out increase costs of sales and labor as a percentage of overall sales partly to blame for the net earnings growth. also what is happened to the price of chicken wings, up 41% of price per pound. matt: we are getting a string of earnings going across the bloomberg terminal. let's head over to scarlet fu for more. scarlet: go pro, which makes those little cameras that people put on their helmets reported first-quarter jump in earnings

per share of $.24. this is a beat on the bottom line. in terms of revenue, analysts were looking at $341.1 billion. so upbeat on the top line as well. i don't have the year ago figures. the company just went public in june. they have a growth margin number of 45.2% growth for a company who's really set at this point is some hardware to connect you to other people who do the same thing, take videos and post them online. earnings and revenue beating analyst estimates as well. let's look at how the shares are trading in the after hours. go pro moving down in after-hours trading off about 5%. also they are making an acquisition, buying a virtual

reality startup. i know you play video games. have you heard of this company, a virtual reality company? matt: i have not heard of the company. i cannot imagine where go pro is going with this. the coolest thing about this company is watching it shift from a hardware company to a media company. isn't it amazing they are making things i want to click on an almost starting to get ready to pay for. >> go pro is one of those companies that went from a hardware to software company. ideally it will be a media company where they can get paid for content whether through its advertising or subscription revenue. they recognize their creating a

tremendous amount of video content. ad dollars are going to social and online video. the go pro folks want to monetize it in that format. >> is this development of new businesses away from the hardware? matt: how many go pros do you have in your household? >> we have a couple, and i have no kids. a higher estimate as number and they keep putting this up. i bet tomorrow go pro trade positively for the next three days. the revenue growth rate is not

declining as much as people expect. you look at stuff like how well disney has done with espn and all the sports content. i was on a virgin america flight where they had a go pro channel and i was glued to the thing for three hours. i was hoping i did not have to get off the plane, because she -- because you cannot find that channel anywhere else. matt: it's amazing to watch this company just continue to succeed , especially against the odds of a competitor. you would think it would be such an easy space to get into for contour camera to come with a different shape or it cheaper offering that does the same thing. let's get back to twitter. scarlet you are watching twitter in the after hours. what are receding as far as indications of twitter's trade tomorrow? scarlet: twitter in the after-hours trade is down by only 1%. remember it had tumbled quite a bit in regular trading.

so down 1% from the close after it tumbled 18% in regular trading. so twitter's losses are decelerating in the after-hours trade. go pro shares have extended their declines, now off by 5.7%. you guys are talking about how the company is transitioning from hardware to software to a media company. the highlights go pro is putting up on the press release talks about the go pro channel and a wireless micro-transmitter launching on premium services. i know you are a big xbox fan. over one million downloads on the xbox platform with users watching an average of 25 minutes of go pro video. that sounds like the road to monetizing some of the video that people contribute for free.

matt: i spend a couple of hours on my xbox every night and i did not know they air the go pro channel. i will go home and watch that later. it could be a little bit of buy the rumor and sell the news that far as earnings are concerned. tomorrow, and interview with dick costolo, the twitter ceo. you don't want to miss it. we have a lot more to ask this guy and a lot more to talk about here on "street smart." stay with us, more on earnings when we come back. ♪

matt: kraft foods following the tech companies we have been discussing. let's head over to julie hyman for the details. julie: shares five cents above

analyst estimates. however we are seeing sales numbers at about $4.25 billion that analyst have been looking for there. it looks like the meals and desserts segment is one that is suffering partly responsible for the shortfall in sales here. the backdrop for all this is that kraft is in the process of being acquired by heinz. the deal was orchestrated by warren buffett and 3g capital. all this is pending the closure of that deal. matt: back to our top story, which is twitter. shares plunging after the company cut its sales forecast. the numbers leaked onto a website, selerity found and tweeted the numbers about a half hour before the end of today's trading session. we have lee grogan and michael

purvis, and still with us from san francisco is erin kessler from raymond james. scarlet, let's check back with you to get a wrapup of the situation p requests were looking at twitter shares rising in the after-hours trade after a tumbled 18% in the last bit of the trading session. the numbers were released inadvertently by selerity. the highlights from the results at least what selerity had sent out initially was that earnings beat analyst estimates but revenue miss the mark. it was an 18% increase which marked a slowdown from the increase with all the prior quarter. twitter was forced to release its results as well overall. that's when we got the news that twitter reduced its full-year

sales and profit forecast. it also made some acquisition so the new outlook reflects the acquisitions and the effect of the stronger dollar. it did not help the stopping -- because the stock finished down 18% in regular trading. now it has a little bit of rebound for the close. matt: michael, you are talking about the possibility of trading twitter options. michael: if you were long volatility you certainly have cheap volatility to play with. obviously we've had something much bigger than that. matt: you would not have predicted that before that. tomorrow will we talked to dick costolo, what do you think we should ask them?

aaron: user growth is still growing 18%, but not as strong as we would expect. twitter is not quite there yet. what are they going to change over the next two quarters to get up to work facebook is that? matt: thanks very much for joining us. michael purvis and leigh drogan. you are saying goodbye, sorry. i was thinking we could spend a little more time. a quick programming note tomorrow, ceo dick costolo joins us from twitter. a lot of questions to ask this guy, especially after today's bleat earnings and disappointing earnings report. next, you're looking at live shots of the crowds forming in

baltimore again. the protests are peaceful right now but as the curfew approaches, will police struggled to clear the streets? we will continue to follow this for you. stay with us here on bloomberg. ♪

matt: let's shift to the crisis in baltimore. after nine of file and riots the orioles will play the chicago white sox at camden yards tomorrow, but the game will be closed to the public. the home we can series with the tampa bay rays will now be played in st. petersburg. for more on the situation i'm joined on the phone by andy dolan, former -- former oakland a's vice president. they me ask andy, as far as i remember, this must be the first time to teams in baseball have played a game in private.

andy: i've ask a number of my colleagues and i cannot come up with anything that has been played under these circumstances. it makes me think back to more than 25 years ago, a different circumstance come the earthquake world series between the a's and the giants. that game was postponed for 10 days. we will step aside because our modest little game is not as important as public safety as working to bring the bay area that. i think that has some focus on what is going on in baltimore. matt: why is this important enough to play through? they canceled games around 9/11. they don't have to do them in secret or in private. andy: i would only question what jackie robinson would say about this. i believe that there is so much going on in baltimore, such a

wound that is going to take a long time to heal. baseball and the orioles, if they would play a role in that healing process, i believe the game should not be played, move on, reschedule. it might be complex, but nothing more complex than real life. baseball is a modest little game in reality to what is going on in baltimore. matt: how much of a challenge does manfred face in his you -- first year as commissioner with this tragedy, with this crisis? andy: every great leader has circumstances like this thrown at them, and they show their leadership capabilities by making quality decisions that ultimately -- it seems like there will be more focused played on a game with no people

than what is going on in the streets of baltimore and what is going on in other cities throughout the united states. this is a societal circumstance that we don't seem to be a to get our arms around. sports plays a role in it, but in this case it seems like the game played in a closed camden yards almost diminishes the circumstances that are occurring in baltimore. matt: what do you see happening if this situation continues? if we have another ferguson on our hands, do we see no more games at camden? andy: that is something that nobody hopes for, that call will return to the streets of baltimore and other cities around the country. as i said, this is an american societal issue which is not being solved in any way, shape, or form. one of the benefits that sports does have it's one of the last

town squares left in our society and can be a place only one place to bring back that healing. i think they should have moved on and not played this game. matt: andy dollars, angst very much. ♪

matt: welcome back. i'm matt miller. a slew of earnings out after the closing bell. let's get to scarlet fu and the breaking news desk. scarlet: the earnings just keep on coming. let's begin with wynn. the company cut its quarterly dividend by two thirds. now $.50 versus the previous $1.50. the first quarter revenue missed analyst estimates and fell 28% from the same time last year. analysts were looking for a drop of 26%. revenue fell even more than that. the only chinese city where

damming is legal was down in the first quarter. you have china's anticorruption campaign discouraging mainland whales from going to macau and gambling in any overt way. of course you have a slowdown in china overall. the economy grinding to a 7% rate. all about that is affecting the share price right now. matt: before you move on, i want to point out that even if it's more difficult to gamble in macau, the chinese are much for your to invest in the stock market. so this mainland wales still have an outlet. scarlet: this is true. instead of gambling in macau, they are gambling in the stock market. is that what you want me to say? matt: aren't we looking at eight are 10 year highs?

scarlet: there have been more than a million new accounts that have been opening. property is not the place they will put it right now. >> they might as well by domestic shares. scarlet: that is true, but we will see how long that lasts. let's move on to put narrow. revenue was $2 million shy of what analyst forecasts -- move on to panera. the smallest sales increase in the first quarter since 2009 since the financial crisis. comparable sales of 1.5% missing analyst estimates. now they want to build to sell back some of those bakeries to franchisees. the big story of the afternoon is twitter. shares up by almost 2% in after-hours trading after a late lunch at to get from $51 to as

low as $38 before the stock closed at $42. first quarter revenue missed analyst estimates and the headline is that twitter also cut its full-year outlook, its revenue forecast, a sign that it's not moving in the direction investors had thought. it's still pretty much a niche to four people in the media and marketing. the advertising rate suggests it's probably not as good as a lot of people had hoped. matt: a lot of earnings to come out. bloomberg businessweek is bringing together world's top designers at an annual design conference in san francisco. brad is at the event speaking to the leaders in technology and design and he joins us now. brad: i'm here with the ceo of i groove, a great app that allows

people to make their own music video with the music of their choice. talk a little bit about the usage you are seeing. scott: it is used by a lot of different people but core uses are teenagers, especially teenage girls. they really love to express themselves through music and finding a song that expresses whatever they are feeling. there are other core groups like skaters who love the app. brad: i've seen some of the videos, they really are great. people just really funneling their creativity. scott: what eyegroove does, you have more time and all these beautiful effects in the music. people convey the way they really feel about their lives. if you are at skateboarder and

someone shoot the video, it just looks like a skateboarder going down the street, but in your head you feel like you are flying. you can make a video that conveys the way your life feels to yourself. brad: you're a visual artist. how did you come to work in app development? scott: i always had a lot of very strange ideas for programs that really were not used. -- were not useful. a book, a song, a movie. when the app store came along, all of a sudden i didn't have to convince anybody that -- millions of people started downloading these apps. things like music and animation programs. many of them went to the top -- top the charts and then it the

whole company was building those kind of apps. read: tell us where people can see the work? scott: i want to release the album as an app, rather than a physical object. we worked for a long time, 18 months, and produced in app that runs on ipad, iphone, android. every song is an interactive experience. you can not only hear the music but see it in touch it. some is like a music video, but all are interactive. somehow you can engage with the music. brad: check it out in the ios app store. back to you. matt: breaking news, we want to get back to scarlet fu. it's not earnings.

scarlet: it is a bloomberg's close it. spectrum brand holdings, a consumer products catch all company, is buying armor all. it's what car fanatics used to polish the interior and exterior of their car. i have none of it in my garage. the price tag for the acquisition is $1.4 billion. the current owner of armor all since the purchase will be announced later this afternoon later on tuesday is what we are hearing here. you have a lot of armor all. matt: i have a lot of armor all. do not armor all your motorcycle tires. not a good idea. scarlet: what happens when you did it? matt: very slippery stuff.

it's for the walls of your car tires seniors eat and dashboard but not for the motorcycle wheels. scarlet: i just have a lot of candy wrappers in my car. i don't know about armor all. matt: you might need extra towels during your next hotel stay. less getting from new york city to the airport in under 10 minutes is now possible because of gotham air. i will tell you the cost of catching your flight in record time, and how this helicopter service could take you a lot further than just jfk. ♪

matt: welcome back to "street smart." the twitter cofounder spoke to brad stone at the design conference about twitter's earnings and its faith in the team in place. take a listen. >> no one likes to see a stock fall like that but honestly, i have the utmost faith in the

long-term business of twitter. the team and the business they building, i'm very optimistic and feel good about. matt: we will have more on "bloomberg west" starting at 6:00 p.m. eastern time. now we go back to the business design conference were cory johnson is speaking to leaders in technology and design. cory: matt miller, when you think about what is cool in the world of technology, you have laser beans then you have robots. >> we make delivery robots for hotels. let's talk about what's possible in the world of robots. the most prevalent robot in my life is the room bob backing cleaner. -- roomba vacuum cleaner.

i thought robots would be something crazy are sexy or less monday. i thought it would be iron man, not rosie. what do you guys do specifically? >> we do deliveries in hotels. we take something from the front desk like a toothbrush or water bottle. the robot drives by itself of the elevator to the room. when the door opens it opens its lid and you get your stuff. cory: is it meant to be a cheaper solution? >> it lets the perp and -- the person at the front desk multitask. they can basically take 15 seconds, put it in and say go and the robot does the rest of the work. cory: what is it about robotics

that we talk about a lot but we don't really see in the world a lot? not to the extent that we see the vacuum cleaners are the hotel delivery stuff. >> there are about 12 million roombas in the world and industrial robots that are in factories that you don't see every day. they can start to do some of those clever, repeated, process oriented things in environments where there are people. matt: we appreciate that with steve cousins there in san francisco. let's revisit baltimore if we continue to monitor crowds on the streets as police begin to mobilize in advance of tonight's citywide curfew. you have to be in by i believe 10:00 p.m., and 9:00 if you are under the age of 14.

you're looking at a live shot of the city as police stand toe to toe. no reports of violent in the last few hours. we hope that continues to remain the case as the evening hours approach. more next on "street smart." ♪

matt: the supreme court today hearing one of the most watch cases in history legalizing same-sex marriage and giving gays constitutional protection there. over the past two years, the number of states where gays can legally wed has tripled to 36, and advocates want the hype court to extend that to the remaining 14 states. joining me is the vice chairman and cfo of pwc, just one of 379 companies and financial services that have signed the marriage equality amicus brief. thanks for coming in spending some time. this has been an issue that financial services companies

seem in favor of, marriage equality. light is it seem like financial services companies are more in line behind this than other industries? >> they wanted to explain that in order to attract and retain the best talent, we really have to create organizations that are diverse and inclusive. equality is fundamental to giving those rights to all of our employees in order to have an inclusive work environment. matt: we already have 36 days behind it, so it's not really like sticking your neck out to support this kind of ring.

+++ better working environment if it is mandated federally? carroll: right now we have an unequal work environment. we have 12 or 13 states where by law we have to treat our people differently. many of us to workarounds in order to give same-sex couples that would like to be married in a state that doesn't allow marriage. we would like to give them equal benefits. right now we do give them equivalent benefits. matt: so you have your hr departments in states where they cannot legally marry try to get them the same rights where they can legally married. carol: it's also emotionally not the same. matt: what do you think the economic effect will be if we see the supreme court vote in -- supreme court vote in favor of allowing marriage equality? carol: in 2013 it cost $1.3 billion in the private sector to get those same benefits. hopefully it is a savings of that order magnitude of money. matt: about $1,300,000,000 as

far as positive economic. i assume your hr department will have a lot more free time than creating these run around. carol: more importantly, we can attract the best talent available. matt: and focus more of the time on the work that you do. you served as an executive in the nba. when i saw the nfl story today that they had given up their tax-exempt status, to me it has always made sense. the nba never has had a tax-exempt status. carol: but it was a partnership, so was a pass-through into t. in many respects, it's more of a

symbolic lesson of financial difference making that change. matt: so you don't think it will affect the way the owners do business, it will affect the way they collect profits? i wonder why they didn't do this a long time ago. roger goodell and the league have always gotten a lot of flack about the tax -- the fact that they are tax exempt. the nfl itself is making billions of dollars and not paying taxes. carol: i didn't work for the nfl, so i'm not sure why they kept that structure in place. matt: i appreciate you coming on and talking about the more important issue of marriage equality. next golf the mayor wants to get you to the hamptons as quickly as they can -- gotham air. we will talk about this all important issue for new york city executives. stay with us. ♪

matt: if you're like me, you demand to summer in only choicest of locations. he's hampton, martha's vineyard nantucket. but getting there by car is so last century. enter gotham air, which is introducing a new fleet of helicopters in order to expand to new routes. the ceo joins me now, tim hayes. actually i've never been to any of those locations, but i do go to the airport a lot. talk to me first about the service you already offer. how much can new yorkers expect

to pay to get to the airport quickly? tim: we take people from manhattan to either jfk or north liberty for as little as $99. the average prices closer to $150, but it's x-men it's guaranteed. -- six minutes guaranteed. people can go from their car into our aircraft in minutes and it's literally six minutes from takeoff to touchdown. matt: i don't usually go to the hamptons because it takes so long to get there. i don't know if it's three hours or something on this giant bus that is parked out in front of our building here. how much does it cost to fly there in a helicopter? tim: about $550, depending on

where you are going. it takes 35 minutes from manhattan to east hampton. matt: i would rather spend more time in a helicopter, because i'm sure there are beautiful views, you're flying out over higher island. tim: were lucky enough to have a fleet of the newest and the nicest. it's like a race car, like a ferrari in the air. six passengers in the aircraft we are flying right now. matt: you have a bottle of champagne with you. you are allowed to drink on the helicopter? tim: within reason. what we are trying to do is give people some of the key parts of their life back. they can make it to the little league game, to soccer to dinner with her family. matt: where else do you go, i

saw westchester on the list. tim: we announced almost a dozen new routes with daily service from westchester, from belmar, from all over the tri-state area. instead of doing that ugly two-hour commute to manhattan, you can make it to wall street and 13 minutes. matt: i have not heard of very many services doing this. do you expect more services to pick up this model? tim: we are expecting it, but we are happy where we are. matt: you just count on word-of-mouth to make it more appealing? tim: we never want to compete on price. we have great public relations. we have a great team behind that. beyond that, it is word-of-mouth. we try to excel on the service. matt: thanks so much for joining

us. we look forward to getting on a gotham air helicopter but i don't know where i would go. i would need an invitation. tomorrow dick costolo will be on the program. ♪

mark: with all due respect to the english only crowd you should've heard jeb bush today input in puerto rico. ♪ on the show tonight, the supreme court bench, but first the protests. baltimore's curfew goes back into affect at 10 p.m. tonight the maryland national guard is still being deployed and conditions are so bad that tomorrow's orioles-white sox game will be played at camden yards with no fans present. president obama