lightly and it's chited to the highest editorial standards. interesting stuff. we have to run. byron, thank you so much for baeg here. it's been great. make sure you join us tomorrow for a very special edition of "squawk" on the unemployment report. "squaw "squawk on the street" begins right now. tgit, happy thursday, and happy birthday. abba, david's favorite band. i'm carl quintanilla with melissa lee, jim cramer, david faber live at the big board. one day after the dow posted its second triple digit loss of the year futures still moving to the down side almost 50 points today despite some jobless claims but did fall to some four year lows. europe a major culprit. debt worries there. spanish bond yields rise to their highest levels since

december. >> so it is no surprise that our road map today says beware of europe. spanish yields now higher than where they were before the ecb's latest rescue plan and with disappointing production out of germany is the periphery of europe now infecting the core? >> good chain store sales here in the u.s. thanks to the warmest march in 50 years. macy's and target beat and raised guidance. gap posts its best in years and the stock ended an 11-year high this morning. and jamie dimon's annual shareholder letter. housing is back. his stock is a buy. and banking regulation is holding back the recovery. >> markets poised to open to the down side one day after posting their worst losses in about a month. renewed worries about the european debt crisis in the spotlight as spanish yields are spiking. all of this ahead of tomorrow's big jobs report in this country and though the markets are closed tomorrow, be sure to watch a very special jobs report edition of "squawk box" from

7:00 to 9:30 a.m. eastern time. some of the worries about spain continue. german industrial production like melissa said disappointing and they're a big exporter. people are wondering if the problems of europe are now beginning to make the benefits. >> the long-term refinancing operation, the ltro, and the positive impact it had in preventing a liquidity crisis in europe at the end of last year, and in aiding so many of these bond markets because, of course, you get three-year money at 1% and some of it you go out and you buy the sovereign bonds. that means the banks going to the ecb to put up that collateral. but spain has had a number of revisions in terms of gdp, in terms of deficit targets. things are not going as well as you might hope there in terms of the overall plan, austerity and hitting their targets. and that's also creeping in here. it's not just the ltro led purchases of sovereign bonds are slowing, it's also, i think,

that. >> the prime minister has been saying things that just make me feel things have gotten off track there. you start mentioning, again, i love michelle's stuff this morning talking about the code for perhaps saying, would a bailout be just wetter than u a austerity? i have to tell you, unlike greece, spain has been trying to do the right thing for years now. and it just doesn't seem to be coming together. >> yeah, and the questions are still out there, what's the real actual debt to gdp ratio? is it what they're saying? close to 80% or is it a lot higher when you add in everything that's out there? and when we really understand what the liabilities are. >> and we are talking about are the problems with the perfeiphe affecting the core. we're seeing french leads higher. they sold 10-year bonds. compare that to the last bond sale they had at 2.91. in addition to spanish yields creeping higher we're seeing french yields creep higher. and then pair that, jim, i'm

curious because yesterday we had the downgrade of ibm from bank of america, merrill lynch, and they cited with problems of spending in western europe as an issue. >> see, my problem is all the conference calls they have been quite bullish about spending there in terms of keeping -- waiting for it to go down. waiting for it to go down and then hasn't. waiting and then hasn't. accenture waiting. sap, i don't know when it's going to happen. i think it should have hit but i think these companies over and over again, the consulting companies, the service companies, are surprised how good things are. let's not overlook the fact germany other than this number today, has really been a fabulous market for the last few months. >> the debate will continue. a big piece in "the journal" about public workers in germany getting a pay hike and trying to determine whether that's going to be the alternative that works. if austerity is not going to work, maybe you do start paying

crazily some public workers more. maybe that feeds down. >> if you were in a perfect country, wouldn't you begin to hate germany, right? here you guys, you public workers, you get slashed. you cut your pension. us, hey, you know what, we feasted off your markets for years and our guys are fat and happy and we're going to get more. >> at the same time, of course, they'll argue, hey, our guys are working and retiring much later than you are, mr. greek worker, and why are we subsidizing you to retire at 56. it goes both ways and gets back to the core question which is still out there. can this thing all pull together? liqu liquidity crisis averted by that long-term refinancing operation but hasn't done anything for the income statement. it's a solvency problem. it may have been pushed out over time but it doesn't mean that, you know, it's pretend and extend. it's like you've got problems still. >> they're more concerned about the carbon tax, i think, than growth. and our friend, larry kudlow, often talks about how growth is the elixir.

boy, they're starved. no one seems to care about how to get growth going. >> right. >> and that's going to determine whether we get out of the jam. >> you have an income statement problem, you have to get revenues up not down. >> despite the concerns about europe, mostly good news on the chain store sales the month of march. target raising its outlook based on better than expected sales. gap and macy's beating forecasts but costco's first sales miss in two years. and that's got to be a little bit surprising given all this talk about the pull-through with the warm weather and an early easter. you would think that costco would have delivered along with the rest of them. >> and i saved money by filling at the pump with costco. it had been a great draw. they are cheaper. i had to drive 15 miles out of my way to get that cheap er gasoline. >> does that really work out for you. >> it does. >> a bargain is a bargain. but i do feel that -- >> a victory, is that what it

is? >> it's a win. i'm sticking it to the man. that's why i don't drink bud. i'm sticking it to the man. i have a big man sticker. carl, you know costco, wouldn't you think more people would go to the gas station than shop at c costco? >> interesting. costco would argue membership fees is what makes our stock almost an annuity, $2 billion fees annual. the sales are less impactful than a gap or a j. crew. >> i thought it would be blow-out. i have to admit. >> those are apparel. apparel in warm weather will n benefit more than a costco or a walmart. target, it's like 25% of the overall sales are apparel. walmart, we don't hear from them any longer. >> or jcpenney. >> no news, i think, is bad news. >> do we think, jim, that this warm weather has thrown us off into believing everything is great but we really haven't seen what a normalized season would be? >> a lot of the merchandise that

is selling -- these guys are inventory turn kms. you get inventory turn and you don't have to mark down which is how their gross margins go up. you have the same store sales go up. you don't have markdowns coming. i'd be surprised if these companies aren't going to make more money than we think. the ones that are really doing great, home depot and lowe's -- >> we should talk gap a little bit. 8% is the best since anybody can remember. for the first time in a wall, all concepts are positive. >> have you been to banana republic lately? >> everything is on sale all the time. all the time. >> i bought a suit at banana republic. >> we talked about this last week. you're feeling very guilty. >> khaki suit. >> all about the khaki suit, we're waiting to see it. >> it's not spring yet. >> i hope you two can coordinate. >> gin and tonic, khaki suits. we're not there yet. don't fool yourself.

we can talk all we want about warm weather. it is not agreeing with me right now. >> you did have a couple of upgrades on the sell side research front the last few weeks, so i don't know how much this was at least foretold or known by some of the analysts. >> a couple things, they brought back a gigantic amount of stock and yet the sales go up. that's the holy grail how you get terrific earnings and yet a lot of people, i think, keep remembering gap as being a fail concept. this fact carl pointed out that all divisions are on fire, quite a change. when old navy came to me to do a jeans campaign -- >> you called that the top of this. you said that was a very bad sign for the stock and here we are and look at the run we've had so far this year. >> if you want me to be their jeans spokesman, which i turned down because of the conflict, it was questionable. i don't regard myself as a jeans kind of guy. >> maybe you turning down that offer has helped that stock move higher.

imagine if you were the spokesperson. >> that was the point. >> it was the deflection point. it was the cramer bottom. >> the cramer bottom literally. >> thank you. >> the banana republic suit, what is it made out of? >> are you giving me like a petrol story? >> no. no, it's real fabric. >> it is? >> that's what it's made out of, real fabric? that's your answer? >> this is real fabric. >> it's not made in an italian mill, i can tell you that. >> you are mr. expert because you went to the italian mills. can i just say that i think this turn around in gap is the most unanticipated, unexpected turn around in retail. i don't know a soul coming into the last three months that believed in this company. >> but then you have macy's which is continuing to fire on all cylinders, much stronger than expected same store sale numbers. it is a string of wins for

macy's. look at the stock and it's climbed this year as well as last year. >> and pvh. >> and do you stick with a name like macy's or switch to a tu turnaround name like gap? >> they have done a remarkable job with this campaign, basically undoing the conglomerate of macy's and when they put all these divisions together and manny turico, tommy hilfiger here the other day for autism speaks, fabulous cause. i do believe pvh is saying it's going better each month. so, i mean, you have this bill. now, again, we come back to weather and that is the wild card. >> it is. >> i think macy's is strong, buying back stock. balance sheet so good. david, come on. three years ago people were putting a major short bet on macy's because of the balance sheet. >> right. and like so many other companies it has benefited interest the rock bottom rates and been able to put itself in a much better position. in fact, that's the broad story in corporate america.

comparing balance sheets as a result of what mr. bernanke's fed has been able to do. >> we should touch on target before we leave retail. 7.3 versus 5.4 estimate raising their view for earnings and more chatter that target's benefitting from at least the transition that penney's is in. >> that could be. it could be share taking. amazon is wrecking everybody, that amazon -- that everything is the showroom for amazon. bed and bath people are say something a showroom. it turns out not to be. those numbers are extraordinary. bed bath is great. >> completely different stores. >> and target has a lot of stuff that you can get on amazon. and target is not suffering. they also have that real food area that turned me off. i stopped going to target. maybe i just have to revisit. maybe target is my target for this weekend's shopping. >> to carl's point about jcpenney, i don't know if we have it but after a huge runup

that stock has been in a significant free fall, if you want to call it that. >> yes, yes. >> if you take a look, there it is. it's only over the last couple of months but that's significant for jcpenney given where it had been. we don't hear month to month any longer from that company. >> i know they've been having the high end advertisement. you see it in mad men not on the right channel, but you go to the stores, they have a lot of merchandise left over. you can't just clean, wave a wand and say, okay, listen. ron johnson's in there. we're going to start getting pretty cool. the ads are cooler than the merchandise. >> two months on the job now by the way for ron johnson. meantime jpmorgan ceo jamie dimon says it would have been even better had the bank not been hit with mortgage related losses. in his and enthusiastically letter to investors dimon says he expects the bank's to grow over time. mentions everything from hostility to the banking

industry to regulation as a problem and includes in a great letter as always, page 20, a chart just to illustrate the compl complexity of regulation. he lays out all the different agencies versus divisions of the bank. and the shared oversight over what is increasingly an okay 0, difficult to run which is. >> i had a problem with this letter. i think he's become like columbia cresse wine or maybe gallo. he's a whiner. >> jamie dimon is a whiner. >> he's a whiner. >> will he sell no wine before its time? >> thank you, or son wells. look at this suit. anyway, that's probably neither here nor here or there. >> yeah, go ahead. he's a whiner. >> he starts off by talking about bad lending. now i know that he heard about washington mutual and how it's getting good commercial. hey, listen, you lent bad, all right, that's not a good thing or you bought companies that are bad and then all this stuff

about the government, oh, come on. i mean, just do better. >> why can't he speak out without being a whiner? just because eraising issues other people in the industry don't maybe have the courage or the appetite to go out there on a limb and express? he has become the spokesperson for the industry because he is in a position of being one of the strongest banks out there. he's leveraging that position.> did a lot wrong. i think we needed regulation. did they overshoot? yes. >> well, that's what he's saying. he's saying they overshot. he's not say iing there should no regulation. he's saying things like the cap on debit card transactions, that's price fixing at its best. he makes a great point about basel, they take a look at how big a bank is. they don't take into account diversification of earnings. >> no one has considered the cumulative effect of all these changes taking place at once. >> that's what he was asking

bernanke. remember that question? it's the same question. >> bb&t doesn't play that game. bb&t's stock is doing great. they're not playing the fine whine game. first horizon, they're not blaming the government. some of these guys are saying, look, there's not a lot of demand. if we got demand, if people felt more confident, i'm picking the other side of the dimon trade because i think, wow, the dimon has lost a little luster here. i'm going with that. >> but does that reflect on your view of jpmorgan's stock? just because the man -- oh, by the way, jim, mr. stick it to the man says jamie dimon is a whiner, does that reflect on your view of jpmorgan stock? >> like travel trust owns it? i think it's a terrific engine of growth. he has a lot of things. i guess what i wanted to hear from this was we are going to profit faster and better from the government regulations than anybody else. we've mastered them. we're terrific. we understand what has to be done. instead it's like, hey, wow.

i have all these regulations. i feel really horrible about it. >> it's costing the banks $3 billion. >> we believe earnings should be $23 billion, $24 billion. the main difference between what we're earning and should be earning, mortgage and mortgage related. the government didn't make them make bad loans. >> no, they didn't. there's always been regulation and costs associated with regulati regulation. it's not suddenly just today there's all these regulations. >> will i ever be inveited to a party where he is again? >> i think you will. >> nah, i think that's it for e me. >> you called the man a whiner. >> i did call him a whiner. i owe him one. that was a little -- >> he wants a lot of attention paid to this letter. he spends a lot of time on it. they make sure everyone sees it and we all talk about it. >> here we are. >> he should be able to dish it out and take it. >> my travel trust owns -- so maybe i'm -- maybe. i wanted him to say, listen, it's a mess. i wish they'd fikts fix it.

in the interim we're going to kill everybody because we get it. i wanted to see offense. i wanted to see charging. i wanted to see no whining. didn't get that. >> we'll talk more about the b sky news. one of the website's original investors will speak out right here on "squawk on the street." one more look at futures on what is essentially our friday although "squawk" is live tomorrow morning for the jobs number. a lot more "squawk on the street" after a break. while some fiber ads use super models, metamucil uses super hard working psyllium fiber,

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b sky b acknowledging two occasions of hacking. we authorized a journalist to access the e-mail of individuals suspected of criminal activity in the 2008 case of anne darwin. they offered new information relevant to mrs. darwin's defense. we stand by as justified and in the public interest. thousand this is just the latest news we've gotten this week. james murdoch stepping down as chairman as a result of the hacking scandal. david, i'm just curious. >> we'll see. i think a little early to understand exactly what's behind this or what will come as a result of it but worth paying attention to.

news corp is almost 39% of b sky b. they wanted to own the entire thing. many think they'll take a break but a year, two years down the road, they will come back for it. there's a fit and proper clause having to do with an ownership of bskyb. there's some real questions here having james murdoch no longer associated with it is probably helpful and say we can keep it at 39%. >> i can't recall the last time a company admitted to something like like this even with an explanation. >> it was justified. >> i don't know the ins and outs of these cases, two criminal cases they are referring to or what was behind their alleged hacking or why -- were they working with law enforcement? it doesn't sound like it. >> why is it in the public interest? >> still not material to earnings or cash flow? >> no. >> it's amazing. >> what does it have 0 to do with the price to earnings ratio of newscorp?

>> or by the cable properties in the u.s. at least not right now. >> people are more concerned about whether "the simpsons" will be renewed. it's opening day for major league baseball. watching very closely. i know david is, too. johan santana, first time pitching since june of 2010. >> the mets have the best opening day record in major league his are try. unfortunately after opening day -- >> just never 162 but that's okay. >> 161. >> 161. >> we'll see how the shoulder looks today. cramer is already hitting some home runs, his mad dash is next. one more look at futures. zap technology. arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz.

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four minutes until the opening bell. time for cramer's "mad dash." it's already cutting production to offis set weak demand and weak pricing? >> alcoa is the microcosm of everything going wrong in the world right now. they have to cut 390,000 metric tons. there's too much aluminum in the world. where are they cutting? italy and spain. so those countries get hurt. why do they have to cut back? the chinese are willing to pollute, no kyoto accords, every single bad theme, alcoa. >> wow. on that note over to carl. >> all right, melissa.

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♪ and a look at the opening bell on this thursday morning. here at the big board, aerospace company command corp secelebratg its transfer from the nasdaq. we'll speak to the ceo in a few moments. over at the nasdaq fuel cell energy, producer of fuel cells for clean power generation. one thing, jim, we have not mentioned jobless claims. roughly in line. unlike earlier this year they're not improving dramatically week after week. what does that mean for tomorrow? >> look, i think it's very clear that some industries are -- that were strong are less strong. coal, natural gas. a 15% increase in jobs year over

year. we just don't need to drill for the stuff anymore. i think you're seeing that. transportation down a little bit. again, could that be related to the trucks to bring oil and gas? yes. i think there's a lot of problems that have surfaced since natural gas went to $2. >> oil production, by the way, in this country now at a 12-year high. 6 million barrels a day. so it's happening, just maybe not in the ways that a lot of people expected. >> right. if shell were to spend the $10 billion to make a new -- and i think it will be quite more than that -- to take natural gas and make it into diesel, that would be okay. but what they ought to do is use the west port and trucks that run on that gas but that has not been -- it's been slow but there's not enough gas stations. >> right. we should mention apple -- excuse me, jeffires is raising estimates basically on itv. also raising the price target up to not as high as 1,000 but $800 and they do outline a bullish

scenario in which they see the price going to $1,000. but another bullish note on apple, jim, apple struggling to stay in the green at this point with most stocks down today. >> what did you think about the itv numbers? extraordinary. >> i thought they were pretty high. the average selling price would be $1,250 which is high for a tv and the gross margins about 30% which are also very high for a commodity product like a tv, but they are apple and they do command a tremendous margin. and their assumptions may be bold but so are the assumptions across the board for apple products. what did you think? attainable? bullish? >> i haven't seen the ro duct yet. look, i was initially thinking why do i need an ipad? >> you need one, at least one. >> at 1:35 p.m. today for mlb.com, i want to watch it on my 4g ipad. here is the issue i have with

apple. unless the tv is revolutionary, why would i get it? >> everybody in america probably has a tv so what is going to force the purchase to totally upgrade? >> a few people do not have a tv which i personally find repulsive. >> so the people who have been living in the dark ages are going to buy an apple tv? >> to get a consumer to jump from just simply having a desktop to a laptop to a tablet. >> that's why i thought the 10 million number and 2 million in the fourth quarter seemed high to me. >> yeah. >> everyone wants to have a reason why they take up their apple price target because you don't want to be, i'm late to the game. je jeffrey seizes on the itv. i'll believe it when i see it. maybe i'll rip out my bi screen. i love my big screen. >> how big is your big screen, by the way? >> not heinous. >> what does that mean? >> 105 inch. no big deal. >> i looked at the costco 70 inch and, holy cow, that thing has some resolution. >> yes. >> and i do like tv.

i have to admit i'm a binge viewer of cable shows, but i have a 40-inch and it's fine. >> morgan stanley, a couple of big news tidbits. goreman is fight iing moody's against a down grade as they try to buy the rest of smith barney. and then also this idea about the jobs act, which the president is going to sign this afternoon in the rose garden. "the times" argues it opens up potentially a new front in banks dealing with smaller companies as they try to go public. >> i'm so glad you mentioned that. one of the reasons that i like the investment banks, we take a look at them statcally. their current about business is not so good and then, bingo, suddenly a new business -- a picture of eliot spitzer in the paper talking about how they built that chinese wall and now that could be coming down between investment banking and small cap stocks. this may be a business line that can move the needle. >> all in a good way is this obvio obviously there have been critics? >> oh, you're asking me about the ethics of it. >> right. never mind. >> wow.

>> let's hop over to bob and david who are on the floor. guys? >> all right. mr. pisani has something we haven't hit on yet and today it's china. i don't even think i've said the name. >> i got up 4:30, 5:40, bleary-eyed, what are the global markets looking like? the only thing green is china. shanghai up 1.7%. i call around. most of the guys say they're going to open up more and more to investors. a very closed market for investing in china. they're going to open that up a little more. this is terrific. have you ever been to a local broker's office in china? i went. >> i have been actually, yes, many years ago. earliest days. >> i'll be blunt. it's like an off track betting operation. >> it is exactly like that. people sitting moving stocks like a horse race. >> you have grandmother sit issing there with pieces of paper and writing down, looking at the tv like they're watching a race and then three go up to the cages and make the bets. it's like off track betting.

>> it really is. >> the reason i bring this up, china could use more boring french pension fund managers investing because they're longer term, not trying to play what's going on. >> the shanghai as opposed to the hong kong. >> this is certainly good news and the main reason -- >> china is opening up more and we should be happy about that. >> of course that exchange has been a terrible performer for a long time. >> meanwhile, back in the united states, there are signs the economy is improving. did you see the initial claims report? four-week moving average at a four-year low. obviously we're not growing jobs fast enough but we're certainly firing fewer people at this point and that's another good sign. another incremental positive so when they write in, show me the evidence things are getting better, here are data points that clearly indicate that along with march retail sales. i know you brought it up. 3.9% is what we have for march. the estimate according to retail metrics, 3.3%.

we were expecting good numbers. we got even better numbers. when you look at discounters, 10%, tjx, 10% on ross stores and both companies released their estimates. that was a pretty good -- >> interesting, though, not as many companies reporting those monthly sales and, by the way, with costco and walgreens not being so good, it may be understated. >> you mentioned costco and jim mentioned costco. here is my take, unbelievable numbers in the last two years for march. 2010, stores were were up 10%. in 2011 they were up 13%. so the last two years 23% on costco. it's pretty tough. what i'm more worried about, david, number one, the important thing here is retailers are nearing new highs so the market has been anticipating great numbers just like home builders are near new highs and april comps will be tough. so we've obviously pulled some numbers with the close of the warm weather.

finally on this point you know there are only 20 retailers that actually report same store sales. there are 120 publicly traded retailers, only 20. the big two, walmart and, of course -- >> well, walmart sales alone add up to more or less all the others combined. so at the end of the day worth 20% of all publicly traded. >> i'm talking walmart and home depot. probably one and two do not report, and as you noted, jcpenney has dropped. >> all right, bob. jim, over to you. >> okay. that's a great discussion. always love to hear bob's take because people just came in so negative again today. it doesn't seem warranted. let's shifts to bonds and the dollar. >> reporter: jim, if you think things are negative with the perception in the u.s., i have a spread that will show you there are a whole lot more negative in europe right now. let's look at a spread of the u.s. ten-year rate which is hovering around 2.18. the difference in the low 40s on

this chart, that's a two-year chart, is the widest differential, the widest the spread has been in over a year. so you could ask three traders and the first trader might say, well, there's better growth perception in the u.s. that may work. ask the second trader, it might be because things in spain are deteriorating so quickly that the boone is just being grabbed like a big mac on special or the third reason it's a combination of all those issues and with the minutes maybe less qe or not extending programs that could affect it as well. no matter how you slice it, this is something you want to pay close attention to as funding issues seem to be bubbling to the surface once again. cramer, back to you. >> this is just -- you have to balance everything and rick gichs you the other side of the trade. it's not a good one. the latest news in energy and metals. to brian shactman at the nymex. how are you? >> reporter: thank you very much. a bounce in oil although the only real news that a major

chinese insurer will no longer cover ships that carry iranian oil. that's a little bit of support here but, again, not a whole lot going on. the rest of the complex mixed. in advance of the inventory numbers we'll have live for you. as for the metals, pretty savage t two-day sell-off. we are getting a balance. bargain hunters are in the market. the one thing i do want to point out, we have a stronger dollar, catching the metals that correlation is not in effect at least today. back to you. >> thank you very much, brian. fresh from the opening bell, first on cnbc, joined by the chairman, president and ceo of command corporation celebrating the recent transfer to the big board from the nasdaq. engages in aerospace and industrial distribution businesses year to date. shares, by the way, up 27%. you brought a toy. you want to tell me what this is? >> actually, carl, we're excited about today is an opportunity to talk about some of the innovation that's driving the

growth of command. and i think this is a great example of that innovation. it was recognized by "time" magazine in 2011 as one of the top 50 inventions of the year. and on behalf of the employees of kaman, lockheed martin -- >> oh, it's nice. oh, my 3-year-old girls will find some use for this, i have no doubt. >> the u.s. had a reasons have found a very good use for it. >> i'm looking at an unmanned helicopter built by lockheed -- >> actually it is built by kaman, the mission management system is supplied by lockheed martin and actual ly this aircraft went into service in afghanistan in december of 2011 for the u.s. marine corps, and since that time we've delivered about a million pounds of supplies, forward operating businesses, eliminating convoys so reducing the risk of ieds to our men and women this uniform and doing it at a lower cost. so if you think about today's budget environment, this is a product together with lockheed

mar martin, innovation and lower costs. all good things. >> you mentioned the uncertainties, one of the overhangs on the defense sector in general. how worried are you about some kind of budget breakdown as we get to the end of the year next year that severely impacts defense spending? >> i think from kaman we're well balanced with commercial and defense businesses, so we think that we can still grow despite some down turn in defense spending. but i think what's most important for the u.s. citizens is to understand what kind of impact congressionally mandated reductions could have. >> sequesters. >> sequester. and i think in particular for support of this industry because there's three important points. number one, the aerospace and defense industry has really led innovation in this country over the last century from the first flight to manned flight and is our largest industry. number two, jobs. it provides 3 million high paying, high skilled jobs in the united states and most importantly, i think, the industry fulfills our commitment

to our men and women in uniform to assure we provide the best equipment so they can get home safely. our u.s. military is second to none and we have to continue to support the industry so that the u.s. aerospace industry continues to be second to none. and i think that's our commitment to our service people, the parents of those service people, and that's why i think we have to make sure these budget cuts don't go. >> kamn, neal keating, thank you. i'm not sharing this with cramer, faber or melissa, just fyi. thank you very much. >> my pleasure. >> melissa, over to you. >> don't think we didn't hear that, carl. you're not making any friends up here. coming up, high tech like you've never seen it before through the eyes of google. as we head to break. also take a look at this morning's early movers on wall street. tdd# 1-800-345-2550 the spx is on my radar.

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a look at the dow 30, only six or so components holding on to a gain led by home depot and, melissa, only 50 points ruffle keeping us above 13,000. >> it's been an interesting first 20 minutes or so to the markets. we're seeing financials turn to the positive and that's where we've found lows. keep an eye as we progress. google is launching web-based digital glasses unveiling wraparound shades that puts the company's web services in your face, literally. take a look at this. >> oh, man. really? >> hey there, guys. hey there, little guy. sweet. remind me to buy tickets tonight.

>> the experimental augmented reality glasses can snap photos, initiate video chats and display directions at the sound of the user's voice. the prototype are being tweaked and tested. they're not available in stores, at least not yet. so we want to you caption this photo of someone actually wearing the glasses. let us know what you think at cnbc. it seems very dangerous like there would be a lot of falls and broken bones and things like that. >> no worse than people i see doing this and/or crossing midtown streets while they're pounding on their blackberrys or iphones. >> my take is it's the first step to us all looking like the fat people in "walle" with the screens that told them various bits of information. although you could probably do something with it, jim, don't you think? >> yes. >> this is us. this is us in about three or four years.

>> very successful. >> at least we won't look like john carter. >> they found their feet again, remember? they got up. >> they were wobbly but they found it. we're going back to earth. interesting stuff. but it's a big trend on google. >> is it? >> it is. >> these all seem like versus apple. apple issues the tablet, google issues glasses that do something. >> if the subway is not operating. >> again, she said i live to serve. >> she just rolled over and tapped you on the shoulder. >> well, she does a little music and then when you thank her, first she usually says there's no reason to thank her because she is just doing her job, but if you press her, she does say, listen, your wish is my command. >> she is the only person who will say that to you, jim. i almost guarantee it. >> true. >> enjoy it. >> true. it's true. >> the trading day still early. a lot more "squawk on the street" still ahead.

coming up, it's the easter egg season and cramer is on the hunt. but he's looking for something completely different. six stocks in 60 seconds. we'll be right back.

it is thursday today but it's friday essentially for the markets. simon hobbs will tell us what's coming up. >> it's been a mad, mad week. we're going to have the voice of reason. a stocksman on the show will tell it like it is. great same store sales. we'll talk about that with goldmans and if you lost money in groupon stock can you succ s successfully sue? we'll have a lawyer on the program who says, yes, you can. >> six stocks in 60 seconds. pandora. >> i think expectations are lofty here. i don't like the stock, though. i don't like the business model which seems to be bent on not having profits. >> ppg resources.

>> with restructuring, thead thing about this they play 1:30 against the phillies, pittsburgh, and a bad day when it comes to baseball. >> laying off 2,000 workers mostly in europe based on demand. >> the same thing as alcoa. >> pier one. >> this is not a good down. this remains a terrific story. i do say that internet commerce starts next quarter. you want to be in that. >> recommended buy. >> a lot of different catalysts. i like this call. this is the cheapest oil stock that i follow. >> bernstein making that call. we mentioned bed bath and beyond. >> remarkable quarter and, once again, these guys -- everyone thinks it's a showroom for amazon. go to one. you'll see cuisinart there, i got 20% off. >> nokia, new phone on sunday. >> the man i listen to says it's great but it may be too late. >> what's coming up on "mad money" tonight? >> i have devin. devin has a big meeting and is

trying to switch from natural gas to oil. i think this is a monster good story. if you have any belief that oil is going to stay high. >> we talked a lot about secondaries. another one. >> sbac, it's a quiet secondary under the radar. merrill lynch dribbles it out. i will say that sbac made an acquisition for more towers. you put more antenna on a tower. that's how you get more bandwidth and that's a good business. >> yesterday you were complaining about the jobs number coming out on a day when the markets can't react. what do you tell home gamers who really can't read what the numbers are going to be? >> once again, guys, i think that no one cares about you and it's just a shame. the s.e.c. and the exchanges should have been saying to the labor department, come on, you can get the number out. just get the number out thursday. again, i feel this is another

part of no one cares about the little guy. >> yeah. you wouldn't put any bets on what the numbers will be. >> i think it's going to be okay. i think that you are seeing layoffs but they tend to be in italy and spain and europe. i think it's okay. i don't know if that's enough. we have more negative news. >> finally next week earnings obvious obviously for one. moody's on banks. volatility up above the 50-day moving average. it's going to be a little crazier. >> yes, i think that we're still dealing with the hangover and an unbelievable first quarter. i am saying there's no sea change. we are in a better year than 2011. don't radically panic like so many are. >> enjoy the long weekend, jim. >> you, too. zap technology. departure. hertz gold plus rewards also offers ereturn-- our fastest way to return your car. just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz.

let's take a look at our road map for the next hour on this thursday, the last day of trading before the market takes a three-day weekend. after yesterday's big sell-off can the street kick the weakness to the curb? we'll talk markets in a moment with the man sitting next to me, jim mccaughan. >> and groupon under fire as one

shareholder sues for misleading investors. we'll be speaking to one of the plaintiffs lawyers behind that class-action suit in just a moment. plus, on the retail front, march same store sales mostly beat estimates. we have your top winners and losers in the consumer boom. >> and why one investor is arguing there's no reason not to own apple shares. dell going on a bit after buying spree keeping its acquisition team quite busy. earlier this week snapping up a privately held company that makes software for cloud computing. software used to re-engineer applications. the number of americans lining up for new jobless benefits fell to the lowest level in four years. initial claims for state unemployment benefits fell 6,000 to a seasonally adjusted 357,000, the lowest level since april 2008. >> the dow is now on track for its sixth weekly drop after a triple digit loss yesterday.

europe continuing to put some pressure on the u.s. indices. is the slump here to stay? jim mccaughan, $242 billion in assets under management. always good to see you. welcome back. s&p is on track for its third weekly decline this year and everybody is still trying to get over yesterday. is it -- was it the fed minutes? is it spain today? is it france? what has fed the selling? >> it's a bit of a combination but really after the rip roaring first quarter, a little bit of a setback and a settling was needed. of this is a benign process in terms of how the market is developing. i think the fed -- i took the fed's comments in their minutes on tuesday actually quite positively. the only people who really want qe3 are bond managers who have too many mortgage bonds. i think fundamentally it wouldn't do any good to the economy. >> and are you -- was your quarter good enough that you're

willing to lock in some gains for the year? >> not really. i think if you look at the u.s. equity market you saw mentioned in the previous few minutes same store sales, lower unemployment claims. the u.s. economic numbers are developing in a pretty positive way and that will continue to be good for the u.s. equity market. i would expect to see it up between 5% and 15% by the end of the year from these lows. but it will be bumpy. one of the things that happened in the first quarter was we got away from volatility in the market. i think this week we saw only the second triple digit move this year in the dow. those happened every other day last year. we are going to go back to volatility because that whole liqu liquidity band-aid on the market only lasts so long. both the ecb and the fed have been given a lot of liquidity to the market which has created that false sense of security so there will be volatility and opportunities. >> what is quite important is yesterday, of course, a lot of people took away from the ecb that it had done what it's going

to do. that's one of the reasons we had trouble. you actually project a one in five disability of a disorderly sovereign or bank default that could plunge the eurozone into severe recession. >> yes. >> that said, how can you also call the market 100 points higher on the s&p? >> that's the negative risk which is maybe a 10% or 20% probability, simon. the other 80% or 90% is the u.s. continues growing the best part 3%. the only way to protect against negative tail risk is to diversify your portfolio. and if that happens, if we saw negative tail risk coming from europe, the u.s. would be relatively insulated. we'd still be down. >> really? >> we'd still be down. >> it would disconnect? >> it wouldn't necessarily completely disconnect. you would see a u.s. volatility but it would be a buying opportunity, whereas if you get a sovereign default, disorderly things happening in europe, that's a reason not to be in europe because they are in recession for quite a long period. >> jim, i'm talking a number of money managers today, yesterday,

they're starting to get more worried about europe. spanish yields 5.8% and they're reliving last year. for them that means, i hate to say it, risk off. >> yeah. but that's not necessarily the right reaction. when greece really got nasty two years ago now, it was a big risk off trade. hey, we've seen a severe default, a big haircut by greece. bondholders lost 70%. you've had recapitalization of the banks. now spain is bigger. >> much bigger. >> but you can still see -- you can still see that process happening. the u.s. has been disconnected. >> i have to dive in there, jim. if it's spain, it is too big. >> it is big. >> you can help greece out. you can -- greece is tiny. spain is not. you know this far better than i do, sir. >> yeah, but spain has a different set of problems. spain does not have the humongous level of federal debt, of government debt greece had. spain is not heading to 160% of

gdp is debt. it's still about 90%. spain's issue is all to do with the labor market, higher unemployment and deteriorating tax base. it's a longer term issue. the market is right to worry about it but the fixes are there. reform is starting in spain. so it is not greece. >> a couple weeks ago goldman makes a big call on bonds, it's a generational time. yields have not trended with that call. >> no. >> at least since then. they're getting mocked on the wires today. >> it's an interesting find. at some point the bull market in bonds will end. i'm not convinced it's ended yet. i still think you could see bumpy conditions are for the rest of the year which could see the ten-year bond yield tested at low points. having said that, we are somewhere in the region of the end of the 30-year bull market in bonds. i wouldn't argue we're close and i would not want to have a lot of duration in bond portfolios. >> getting back to disconnecting

from what is going on in europe, from an overall market standis point, maybe one could make that case but are there second is tors that simply can not separate themselves with what is going on in europe? i'm thinking he can itty specifically where so many companies do rely on sales to western europe and it is a sizable chunk of revenues. >> yes. >> are there certain sectors you would say yes if there were problems in europe you have to stay away from them. >> i continue to be pretty optimistic of u.s. technology and manufacturing. i think those areas, capital goods, are producing goods and certain advices that the world wants and i think it's interesting how in the last ten years, ten years ago a lot of people were saying the tax sector is moving to asia. it is firm ly back in the u.s. now and it's to do with an invasion. it's part of the positive story on the u.s. if i was to be wary on you're even developments, it would probably be banks actually. i do feel bank shares have run up too much in the first quarter and could be dangerous on the sort of scenario i'm outlining.

i think the liquidity pushed them up. that liquidity is at least somewhat being dialed down and, therefore, the financial sector shares that have done so well in the first quarter could be quite dangerous to your point, melissa. >> great insight, jim. have a great weekend. >> thank you. thank you, carl. it's great to be here. well, groupis on, of course, has been in the headlines this week as fears over faulty accounting have taken hold. one is suing say iing it's been business performance. we'll talk about that class-action suit next. [ hermann ] there's always something

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this week groupon was sued accused of misleading investors. one says he lost more than $9,000 from the 3,000 shares he bought due to the company's accounting mess. the lawyer representing him is with robins, gellard rudman. it seems a difficult case to make because you have to essentially prove that they knew what the results were and that they somehow concealed them. is that correct? >> well, yes and no. there are two claims we've made. the first chams we've made are based on the registration statement and for those there's strict liability for any false or misleading information and those are the claims we brought against the management team, the directors and underwriters.

we brought a second set of claims that relate to purchases in the secondary market and for those claims we have to prove what's basically they knew it or they recklessly disregarded the falsity of it. >> going back to the registration, if at the time they believe what they were reporting was correct according to generally accepted accounting principles, then that goes out the window, right? that registration had been out there, vetted by lawyers, et cetera, and accountants for that matter. why is there a belief that somehow they concealed or they misrepresented the results? >> well, they can assert a due diligence defense certain with defendants but we don't think it will apply. if you look at the history of the run-up to this ipo, they had several is missteps with their financial reporting and what they recently disclosed is not only they were restating february 8th but didn't even have the internal controls in place to ensure accurate financial reporting.

>> jim, what they actually did they had a problem -- they were inaccurate in forecasting the e refunds they were going to get as they moved into a higher margin part of the segment of the industry. i've got a copy here of the s-1 they filed in june, eight months before your client actually bought the stock, and it says very clearly in here, we expect that the market will evolve in ways which may be difficult to predict. it is also possible that merchants or customers could broadly determine they no longer value or no longer believe in the value of our current services or the marketplace. they warned your client explicitly in the s-1 filing that this might happen. >> well, there's a difference between warning what might happen and informing people truthfully of what is happening. and in this case they didn't -- they've admitted they had material weaknesses in their internal controls over the financial reporting, so they didn't have any controls in place to ensure they were not

providing false information. >> is there a precedent for this sort of case, jim? what is the most recent example of a case like this where the plaintiff won? >> well, there are several cases. our firm is the one of the largest if not the largest, be a we -- it's not just that you've lost money. there's always going to be winners and losers in the stock market. and that's not what the laws are there to ensure against. with the winners and losers are based upon the dissemination of false and misleading information, that's where you have a right to bring a case against the people who disseminated the information. >> so in the previous cases, did you actually go to court or were there settlements? i'm wondering if you are open -- if your plaintiff is open to a settlement at this point. >> we are in the very earliest stages of the lawsuit. as you noted it's a lawsuit that was filed on behalf of an individual investor but we're

seeking to prosecute it as a class action on behalf of many investors, all the investors who purchased in the ipo or who purchased during our class period which is november 4th, the date of the ipo, through march 30th, the date of groupon's announcements. we've already been contacted by several of our other large institutional investor clients who are interested in pursuing recoveries as well. >> but the guy that you mentioned in the lawsuit only lost $9,000. this is essentially a speculative pitch by you, is it not, to try to attract -- you see a chink in groupon you decided to go after and attract others around you and presumably take a share of the profit. you don't actually have at the onset many people actually lining up behind how have lost a lot of money. >> well, that's typically how all class actions proceed. many individuals -- the whole reason behind a class action is you have individuals who have lost, like in this example, $9,000 that wouldn't justify the

expense of bringing a lawsuit on their own, so the laws allow them to aggregate their losses as a class action which does ju justify bringing the lawsuit and making a recovery that benefits everyone. >> including your firm, right? if you are successful in the lawsuit, you'll take, what, probably a third of the damages, if any? >> well, in terms of what recovery we would make, yes, we do prosecute these cases on a contingent basis. unlike our counterparts who can charge $800 or $1,000 an hour to groupon or other corporations, we only recover as a firm, if we win. if we lose, we don't get nothing. >> you make it sound like you have the moral high ground. >> well, we like to think so. >> all right, jim. thanks for your time. >> thank you. >> jim barz. we did reach out to groupon and they gave us a no comment regarding the pending litigation. later in the show we'll have the first groupon institutional investor joining us to talk about what he thinks about the

revised results. all right, b sky b admitting to two cases of hacking this morning. sky news saying it authorized a journalist to access e-mail of a person accused of criminal activity. we're still working on the story. it follows the hacking scandal that involved phone messages, but now we have a new one in terms of e-mails. we'll see what the impact is. news corp is down but not down sharply. >> we should explain they're saying actually because we ultimately presented what we found, what we discovered to the police, therefore it was in the public interest. but this is actually the case of a woman whose husband pretended he had died. she claimed the life insurance around $700,000, $800,000 and he was living in the attic next to her hidden away while they lived off this money. it was actually a very, very salacious story for a considerable period of time. >> there was another story in which they, in their words, penetrated security at heathrow going back to 2003.

to highlight what they're calling failings in the security system. these investigations serve the public interest. a legitimate part of response journalism but hard to know when dealing with the law. >> i've never hacked an e-mail. >> really? >> no. i can tell you that right now. never done that. >> not even in the public interest? >> not even, no. not even in the public interest. >> would you even know how to hack an e-mail? >> no, i wouldn't. >> really a nonissue then. still to come on the program, breaking news on natural gas inventories and retailers out with actually some phenomenal sales when you look at the aggregate. the winners and losers next. carfirmation. only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the spef hertz.

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we've heard that on this show. bertha coombs has the latest on the winners and losers of a potential pipeline surge. hello, bertha. >> reporter: hey, simon. we're here in houston. the keystone won't be up and running if we're lucky until mid to late 2014, but the seaway, an existing pipeline that they are reversing will be up and running by the end of may, starting with about 150,000 barrels capacity per day running out of cushion and it will terminate here at enterprises echo terminal. it's kind of like the grand central station of oil. we toured the facility on a sunnier day a couple of days ago with the ceo of enterprise and he says what they'll have here is about 6 million barrels of storage, will be able to take in that oil from the seaway pipeline, also enterprise propriety pipeline from the eagle and all that have will be feeding out directly to all the major gulf coast refiners.

it is a huge undertaking and the biggest project that they've done in years, but they say this is just the beginning. >> i think we're in the early innings. we're spending to this year about $4 billion on infrastructure. and the majority of that is in the seaway reversal and here in echo. this is exciting for us. we think this is going to continue for years. >> reporter: and alice agreed, not just for enterprise and some of the big players, overall they see a huge buildout because of all of that shale production needs some place to go. add on top of that the increasing production out of canada that needs to get to the u.s. market as well and a number of analysts like curt at deutsche bank say that they expect to see a lot of building through the rest of the decade. >> we estimate $10 billion to $20 billion per year to be spent

on energy related infrastructure to reorganize the north american oil and gas grid to accommodate the shale plays. >> reporter: some of the ones that launor likes include enbridge, enterprise. morgan, a limited partnership for some investors that are look ing for more of a dividend yield and a smaller player, a smaller cap player in the group. if you want to learn more, get a look, an exclusive look -- we're the first media allowed here. i have more of my exclusive interview with mike creole on cnbc.com. it's an amazing site. back to you guys. >> thank you, bertha. bertha coombs. up next our good friend art cashin gives us his take and the top winners and losers consumers are banking on after the break.

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together, for your future. fiona here was just telling me that ford dealers sell a new tire like...every five seconds, how's that possible? well, we purchase 3 million a year. you just sold one right now didn't you? that's correct. major brands. 11 major brands. oop,there goes another one. well we'll beat anybody's advertised price. and you just did it right there, what's that called? the low price tire guarantee. wait for it, there goes another one. get a $100 rebate, plus the low price tire guarantee during the big tire event. look at that. it's happening right there every five seconds. your not going to run out are you? no.

one hour into the trading day. here are the stories we're

"squawk"ing about. shares of bed bath and beyond, it tjx and ross stores. we'll have more in a moment. freddie mac says the average rate has moved down a tick in the past week. the 3.98%. and general motors announcing auto sales in china rose 10.7% from a year ago to almost 258,000 vehicles. >> markets in negative territory but it's very different from yesterday. it is a mixed picture, consumer discretionary materials, energy, all doing reasonably well. the earlier losses that we have so now flat on the session. let's have a look at the breadit th of the move. here at the nyse and over at the nasdaq, the picture there is actually more negative which is interesting, of course. tech was hit particularly badly from yesterday's sell-off. >> google is launching a web-based digital glasses, unveiling a pair of thin wraparound shades that puts the company's web services in your

face. take a look at this. >> where is the music section? oh, yes, this is it. is paul here yet? how is it going? >> the experimental augmented reality glasses can snap photos, initiate video chats and display directions at the sound of the user's voice. the prototype are still being tweaked and tested. they're not available in stores quite yet. people want to you caption this photo of someone actually wearing the google glasses. our twitter handle is@cnbc. you are wearing those glasses, seeing the directions in front of you. >> apparently you have to call people dude. >> i recommend you wear them if

they keep you from saying, hey, dude. that guy says dude and high-five. >> he has no schedule at all. he's looking up the ukelele. see as poster for -- you know, no schedule. he's just wandering around. >> sounded like our producer, don't you think? >> the voice did sound familiar. but you're right, he has very little going on, buying tickets for a concert tonight. >> she is doing something exciting. she is very chirpy. she is meeting up with that dude. >> at the concert. >> google has gotten so much grief for investing in cars that drive themselves and everybody watches every quarter. i wonder if this will get grouped into that category or something that might have some legs. >> the company is determined to find other lines of business beyond search. search is mobile search, so important for them in terms of the challenges they face there but, you're right, they do go off on a lot of different

directions. they have many, many very smart people there, of course, and they like to give them creative freedom. you never know where your next big business is coming from so you can't argue it is, in part, a good thing. >> we'll talk to art cashin in a moment. first inventory numbers from brian shactman. brian? >> reporter: we're still waiting for it to flip over, it is a build of 42 bcs so anywhere from 10 to 52. tradition energy had an expectation of an injection of 31 so it's more than that and we do see some selling on the news. we're basically right at the flat line and we're now down heading towards some of the lows of the day. so more bearish news. now we'll keep an eye on that two handle call just to let you know over the last year down more than 50% in that gas, year to date down about 30% so, again, a little bit bigger build than expected when it comes to nat gas. >> just have to find a place to put it all. thanks so much, brian shactman. let's go to sharon epperson, i believe, as well. is that what the plan is?

i heard sharon epperson's name in my ear. sharon? >> reporter: carl, i'm this denver, colorado. you know a lot about denver, right? i'm here where many commodities, agriculture you're, mining and energy, and this is where jpmorgan has decided to partner with the university of colorado to create a state-of-the-art commodity center. you can see the trading lab behind me. they talk about natural gas and low natural gas prices and what this means in terms of fueling our economy. of course we're the largest natural gas producer in the world. we have 20% of the market share. will it export 5%. so jpmorgan says there is, of course, a structural revolution going on in the production side but we need to see it more on the export side. >> the u.s. is becoming more of an economy whose growth is driven by investment and you're going to see the investment component take a larger share of growth and in china we're likely

to see household consumption rise at the same time. what we'll see are the two economies looking more like each other and both economies will reinforce each other's growth patterns because one will be a producer of the commodities needed by the other. >> reporter: of course it all comes down to china, at least in jp morgan's view, and they see china's growth in terms of natural gas demand at 18% a year. that's why china will become the second is largest natural gascon assumer. they say in about two-year's time. this puts it on a domestic commodity, exactly the kind of training they're hoping the students who come here to this commodities center will learn. that is why jpmorgan has partnered with the university here to make this commodity center. we'll hear a lot more about the commodities center. we're going to talk to the head of global commodities, blythe masters on power lunch and ask her more than about the commodities center but also about her outlook for commodities and much, m m coming up on "power lunch."

back to you guys. >> sharon, can't wait for that. sharon epperson in denver. art cashin joins us here to talk about some markets after an interesting couple of days here, art. >> sure have been. >> you have some bits in your notes today talking about seasonal patterns going into a good friday weekend. what does it look like is this. >> well, traditionally the day before good friday is up between 60% to 70% of the time. ironically the day before the nonfarm payrolls is up 60% to 70% of the time and you can add in any day before the three-day wengd is up 60% to 70% of the time. all we have to do now is get a rally. >> can one take a lesson that the selling may go away? there's a little more runway until you get to that point is this. >> there probably should be but, you know, you have a lot of complicating factors here. you have tax season, changes coming up, so i think people are

trying to stand back a little bit. that may be what's giving us this pause. >> yesterday people were wondering, is it the fed? is it spain? you said if it had been the fed, there would have been a little different action in some of the bond markets. >> sure. the minute that the qe2 disappointment popped up, we saw weakness in treasury bonds, people were stepping back. there would be no further cushion. secondarily the fed wouldn't be helping. so instead we saw treasuries rally yesterday. that told me it was all about spain and we're doing the same thing today, dollar firm and treasuries. >> art, of course next week earnings season starts and we have this peculiar situation tomorrow where we have the jobs report in the stock market is not open. how are you seeing that play out in today's session is this how do you expect that to continue to play out for the rest of the session going into the long weekend? >> well, i would think you might see extra volatility in the final two hours. time starts to run out. during the day you can deploy certain strategies, do what you want to do. but when that clock is running

out, you have to make some decisions fast. and i think you might see a bit of a rally in the final hours. >> a rally. so there is appetite out there to get into stocks. even tomorrow -- tomorrow the stock markets are closed but the market is open and the currency markets are open as well so the rest of the world can actually react to the jobs report. and yet you still think there is a willingness to step in even though the world around them may come crashing down. >> well, i think it's twofold. number one, nervous shorts and that's one of the reasons before a three-day weekend you tend to get buying. secondarily we're at the beginning of a new quarter, new money is coming in not fully deployed and on the risk that the job number is great, people say, gee, i will have missed the boat then. >> an interesting report that bernanke met with most of the banking chiefs that we know in new york city over lunch on friday, talked mostly about -- >> he talked mostly about europe. >> and not u.s. regulations. >> i found that absolutely

stunning. it would appear to me he's worried a lot more about connectivity, contagion, and maybe more trouble to come in europe. >> so some would say slight of hand he's trying to focus people on the problems in europe rather than the problems that america has and his continual desire to base the dollar -- >> i would buy that, simon, if it was a public meeting. this was very private, only with the big bankers, and i think he was saying, boys, make sure you have your house in order because there can be some contagion coming down. >> do the ice cubes get a vacation for lent? >> well, they weren't overly exercised, i would say. but the easter bunny can bring eggs to others but ice cubes to me. >> god bless them starting this weekend. >> the retailers reporting solid gains in march as the warm weather prompted customers to buy seasonal merchandise sooner perhaps than normal, beating estimates include as you'll probably be aware, target, macy's, limited, and gap.

costco clearly disappointed with the sales miss. goldman sachs analyst adrian shapiro with a closer look at results. good morning to you. >> good morning. >> this is phenomenal. the thompson reuters index for march, which is an index so it's weighted. if you exclude the drugstores, they're talking about an increase in march of 6.8%. that's extraordinarily good, isn't it? >> it's a continuation of what we saw in february. february was up about 6.5%, so you're seeing the momentum that kicked off in february continue in march, clearly the weather helped. there's a strong apparel trend in color that's helping and an early easter as well. so we're seeing the sustainability of some current trends and that's definitely encouraging. >> i can understand the weather. i struggle, though, with the idea that color is suddenly going to change these big dynamics suddenly. just talk me through that and who gains from that?

>> sure. what you've been seeing is actually a lot of come could ps have been strong the last several quarters but it really hasn't been apparel driven. it's been much more accessory driven. so the fact is there hasn't been a new trend to drive apparel sales. there's definitely a big explosion of color. you might not love it, but you probably don't have it. and that enough is probably an impe it us to get people into the stores. and that, i think, we're start ing to see some encouraging callouts of apparel. you heard it from target, from tjx, from costco. they saw in march a positive low double digit gain in apparel trends, and that's a pretty meaningful trend from where we have been. >> in terms of color, adrienne, what i've been noticing is colored jeans. and i'm curious if that is -- we did see quite a stunning same store sales figure from the gap that has had colored jeans in stock and also the limited. >> sure. you are definitely seeing colored denim is very strong for

gap and limited, but it's helpful for target as well. i think it's any sort of newness and especially during the spring season that's encouraging. people are tired of the boring fall colors and any sort of excitement is spurring a lot of these shops, gap, limited, target, and even the department stores, macy's, nordstrom are benefiting as well. >> you know, adrienne, though, to this basic debate, i mean, is the -- is what we're seeing a reflection of a stronger consumer, hence a stronger economy, or is it much more related to the fact we had unusually warm weather for a very long period of time? >> whether it's weather or not we'll know soon enough come april and may and see how truly strong this color trend is. but the fact is these strong march sales are driving upward revisions to the quarters. we heard them raise guidance. you saw target step up guidance.

the fact is early is great not only for sales but for margins as well. the sooner you who have it, the less you have to mark down. >> can i take money out? how long is this going to last? what do i buy? >> we continue to like target. nordstrom is a recent upgrade where we do believe the continued strength not only from their full line stores but online is powering very strong high single comps. their rack business, their off price sort of it tj/ross version is up in the high singles. they seem to be winning on all fronts so nordstrom would continue to like here. >> i don't think you cover costco. i don't think -- >> we do. >> and what did you think of the disappointment today? >> i wouldn't call it a disappointment. a 6% comp is still solid. they didn't see necessarily the step-up that everyone else did but as you would imagine they're not really an apparel retailer. their strength is much electronics side. we know what's going on in

electronics. they are continuing to see strong traffic and sort of 3%, 4% range. so costco is far interest broken. there's nothing really disappointing. it's just when you see the step-ups in the mall costco is not going to be a beneficiary of that trend. >> thank you for joining us. have a great weekend. thank you very much. color, you may not love it, david faber, but you probably don't own it. >> colored jeans, maybe, david. >> you won't see me in colored jeans. i can state that for a fact. >> did he haefinitely? >> that period in my life has passed. >> salmon colored pants? >> salmon? i don't wear jeans that often. there wasn't a lot i was wearing at all back then. >> sometimes works in the hamptons, though, a little sweater over your shoulders. want to send it over to kayla and the possibility of this bankruptcy.

hey, kayla. >> i don't know how i can follow the colored jeans discussion but as far as falcone, spectrum has cause add big headache for the harbinger manager who is considering a filing for that unit. the fcc issued a suspension for them to build out the broad band network and that caused an automatic default on bonds that were due april 1st as the status of the project remained in flux. the payment has a 30-day grace period. falcone is racing against the clock on an april 30th deadline to reach an agreement to keep the investment afloat. that audience includes some familiar faces, david tepper, carl icahn, those who scooped up the debt at much higher prices than it's trading at now and want to make sure lightsquared makes good. if those don't produce an agreement that falcone sees as favorable, bankruptcy would be

the preferred option. in a statement falcone says the rationale behind voluntary filing is to complete the vision to complete the plan to build the network and protect the company from those creditors who are more interested in a quick flip, some of those we just named. if chosen that plan would see falcone as the so-called debtor. normally that situation requires lending a life line to the unit but he says it makes enough cash to avoid that at least in the near term. one thing that is clear as this gate comes up on redemptions, if you are an investor and don't feel good about the fact so much money has gone into this project that might not actually happen, you are not able to get your money out of that fund, so that is something investors are not happy about. guys, back to you. >> kayla, they haven't cleared up what they're going to do in terms of their overlap of spectrum that was the problem with the gps operators, right? >> right. >> even if they do restructure, that has not yet cleared up, is it? >> it's a rhetoric fight. is there interference with the gps? is there not interference?

what does interference mean? is it strong enough for the fcc or the industry organization that regulates that g ps arena? is it actually strong enough to keep lightssquared from going forward. they did grant a temporary waiver. they are trying to say, you approved this in the first place several years ago and now you're reneging on this. as far as lightsquared itself it doesn't look like it is going anywhere anytime soon. >> thank you, kayla. >> thank you. piper afterry claiming they are heading to $1 trillion. up next the man who says it is time to fear owning apple shares. plus, is apple it tv far more than just television? we're all over the apple trade next. great shot.

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jeffires is raising his price target on apple this morning to $800 from $699 on increased confidence that apple will introduce a television set in the fourth quarter. he says the tv which could be called the i panel will include many more features than just an ordinary television. we are joined now with more. thank you for sparing us the time to come and see us. >> thanks for having me. >> this is a deep dive on your part. this is from information you are getting from asia or things that you're seeing in asia and channel checks. what have you discovered? what more can you tell us about apple tv? >> we've done everything to take satellite imagery of apple data centers to see how big they're expanding it. we reviewed thousands of patents. we've taken their code, ripped it apart. i found references to what i think they're going to do and apple's approached britain's itv to get the rights and we're not

sure they're going to pass those rights over so we're hypothesizing it might have to be called something else. we're talking about a device that is your home entertainment hub, your computing device, your gaming console, everything. >> why will i buy it? >> because it will revolutionize the way you interact with tv. it will allow you to move that tv content amongst all your devices, and it will provide you with the best experience to consume video there's ever been. >> peter, i want to walk through the assumptions. you're assuming $1,250 average selling price and 30% gross margin. can you give us some color as to how you get to the actual unit's projected to sell is for apple tv because a lot of people already own tvs. they've already spent $1,000 for a tv. so at what point will they say i need an apple tv for $1,250? >> the big difference is right now you probably have anywhere from one to three boxes sitting under your tv. you probably have between one and three remotes and certainly when my parents come over to my house they don't know how to

turn on the tv sometimes. so the complicated nature of interacting with that is a big issue and the programming guide, frankly, was designed in the 1960s and hasn't been updated. the way we try and flip through through channels and how we see channels, you know, becoming mainstream, we think that that's going to change, and then imagine you're watching, i don't know, my wife is watching "gossip girl" and likes the handbags she sees. she presses on the handbag and it tells her what it is. the integration of interactive ads we think is very big. >> peter, there is still something called apple tv right now, bewildering to a lot of consumers, even people who are fans of apple. how is this different from that, an evolution of that or something completely different? >> completely different. that was sort of a hobby or test case. what we're talking about now is really taking gesture control, voice control, taking all of that apple expertise they have learned from their hobby and building a device that changes your living room, really takes everything to the next level. imagine being able to use your iphone and your ipad as a remote

or input device, tweeting while you're watching cnbc. >> which is the extraordinary thing about apple products. one thing that stands out in your notes is on the valuation risks you are warning that while the carrier networks could be overwhelmed, and that could materially impact the stock. that is a growing concern. >> that's a major risk, and we're seeing it with carriers launching it in q1. in q1 apple has had some big launches that i don't think wall street truly appreciates. kddi ramped up big, and they are seeing their network being overwhelmed. china telecom and china launching with huge volumes, and their networks are being overwhelmed and that takes the apple ipad volumes to the next level and puts a huge burden on the cell networks because some are shared. what we're seeing is huge video traffic, huge tweeting traffic, and it's only going to get worse. >> briefly, where would the backlash occur with that? what is the dynamic that undermines the sales? >> the dynamic that would undermine the sales, if the consumer would have a bad

experience. they wouldn't be able to make a phone call. >> okay. i get it. peter, thank you for your time. >> thank you. >> all right. so from a call that apple will go to 800 bucks a share to apple potentially becoming the next rimm, our next guest argues it could be a matter of time before apple caves to indiana ovation moment mum. adam is a senior research fellow at george mason university and a forbes.com contributor focusing on high-tech policy and digital economics. great to have you with us, adam. >> thanks for having me. >> you run through a few examples in the past, not just research in motion, also palm, also microsoft as companies that failed to continue to innovate and stay relevant. the difference though, the most striking difference though, is that after these companies developed a product category where they essentially defined it, they stopped, whereas apple continues to define new product categories. we were just having a conversation about apple television. why do you think this momentum will actually stop? >> well, every tech titan has

his day in the sun, but often they just fall because they fail to innovate quick enough to meet the competition, and the new folks that are out there offering innovative devices. you know, five years ago it's easy to forget now, but we used to call blackberries crackberries and devices we thought we were addicted to and would have around forever. then, of course, rimm fell pretty hard and now its stock is trading where it was in 2003 and it's laying off top execs. flash back five years ago and asked somebody do you think rimm will still be around and strong in five years, they probably would have said yes because they wouldn't have envisioned the tough competition they would face from apple, google, android, microsoft and others. rimm is in real trouble and apple is having its day in the sun, but it won't last forever. >> that's useless to me as an investor, isn't it, because i don't know what the timing is. apple could stay on top for quite a while. there's an obviousness to what you're saying that doesn't really help surely. >> that's right, yeah, absolutely, and in the short term i think you're right. i think will stay on top and be

strong and will continue to innovate, and it's sitting on a huge, you know, amount of cash in the bank, but apple also faces other types of risk which your previous guest was discussing which are unknowns, various types of regulatory and other types of risk that potentially could affect it negatively in the future. >> all right. adam, we'll leave it there. a lot of interesting issues to think about. >> straight ahead this morning, we've got a first on cnbc interview with the very first institutional investor in groupon, harry weller. stay with us. nouncer ] if you believe the mayan calendar, on december 21st polar shifts will reverse the earth's gravitational pull and hurtle us all into space. which would render retirement planning unnecessary. but say the sun rises on december 22nd, and you still need to retire. td ameritrade's investment consultants can help you build a plan that fits your life. we'll even throw in up to $600 when you open a new account or roll over an old 401(k). so who's in control now, mayans? when you open a new account or roll over an old 401(k).

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all right. melissa is getting ready for his long weekend. first what's coming up on "fast." >> we've got the ceo of armstrong world, beneficiary of the housing recovery. not just for new home sales in terms of the flooring that goes in, but also renovation of foreclosures so we're tall to the ceo. >> a key theme cramer has been watching. simon will stick around. what you might have missed if you're just tuning in. welcome to hour three of "squawk on the street." here's what's happening so far. >> the most serious structural

issue facing the united states is january 1st. obama care kicks in, assuming the supreme court lets it through. bush tax cuts expire. >> would you serve as vice president if asked? >> heck, i don't know, man. having a great time being governor of virginia. a lot to do here. >> survey says 357,000. that is down, down 6,000 from a revised 359. >> sky news just acknowledging that on two occasions he did hack e-mails in order to get stories, and it's now saying the move was editorially justified and in the public interest. >> i think that these companies over and over again, the consulting companies, the service companies, have been continually surprised how good things are and not overlook the fact that germany, other than this number today, has really been a fabulous market for the last few months. >> why do they have to cut back?

because the chinese are willing to pollute. nokia reports endless amounts of overcapacity coming from china. every single bad feed. >> look at the opening bell on this thursday morning. >> they have admitted that they had material weaknesses in their internal controls over the financial reporting, so they didn't have a controls in place to ensure that they were not providing misleading and false information. >> all right. good thursday morning. welcome back to "squawk on the street." markets essentially flat, maybe a little bit lower or higher, depending on your point of view after yesterday's triple-digit loss. crossing into the green in all three, just barely. the dow hanging on to 13075 and the s&p right at 1400. ruby tuesday, one of the biggest losers today, down more than 12% after third-quarter revenues came in short of consensus and the company's guidance well below estimates. retailers some of the best performers, tjx, ross stores, family dollar, bed ba

bath & beyond, the latter being the top performer. groupon, one of the company's first skrstors will join us live and tell us why he's still bullish in the online discounter. plus, bed bath & beyond. the expectations, go-to retailer everything to kitchen supplies and snuggies for dogs, easily beating estimates. should you add it to your portfolio? we've got the trade. a little over a month since j.c. penney's branding makeover. is it working? wall street experts will weigh in, and cons sellation brand, wow, seeing stars today after a disappointing earnings forecast. will the hangover wear off, or should investors take this as a warning? all that and more is coming up in the next hour. but before that we'll get to our capital markets editor gary kaminsky taking a look at samsung becoming the first company in south korea to issue debt at a lower yield than the south korean government. >> an amazing story. did not get a lot of coverage

call. bruced this deal on tuesday. check this out. samsung, who did not need to raise any capital, basically issued bonds, first publicly -- first public bod issuance since 1998 this week. as you mentioned, if you look at the yields on these bonds, they essentially raised capital and are paying a low yield than the south korean government. now just think about that. they could have sold $5 billion worth of bonds. they sold $1 billion. did not need the money. everybody is talking about risk on, risk off, risk on, risk off. what this basically tells you that as much as there is a demand for risk-on equities, be careful with the camera, guys, risk on with the equities, you still have an insatiable appetite for good credit in corporate bonds, and i have to say, here's the question call. if they didn't need to go out and raise this money and they did, you've got to believe some bankers are knocking on the doors of apple and saying, look, why don't you test the water. see if you could issue a

ten-year bond and basically do it a yield lower than the u.s. government, and i know rick santelli, rick, did you see that samsung deal earlier this week? what does it say about the credit markets, and what does it say about the demand still for high quality paper by institutions that basically miniscule yields? >> oh, let motel you something. i think you hit on the number one conversation on this trading floor, gary, and that is when we talk about all the programs at the fed and central banks around the world are doing, what they are doing in essence really accomplishing is keeping good collateral in short supply, so i totally agree with you, and i think corporate america or apple, they should rise to the challenge. i think it would just demonstrate oh, so much if they could come in, really close if not lower, than some of these high quality sovereigns. >> rick, could you imagine if apple goes out and tries issue a ten-year piece of paper and can get lower yield in the u.s. government. boy, that's going to have -- >> all things being equal, gary,

it should be that way. they have a way better balance sheet than the government! >> let's put it out there right now. we want apple to come and test the markets and see if you could issue a ten-year bond lower than the u.s. government, all right, carl? >> what would you demand rick? >> there's one problem, rick. we need to buy them a printing press because one of the key issues of why, you know, sovereigns are different than companies is because they have the ability to print. so maybe they need to come up with an apple script, and i'm not talking about the kind that's in the text. >> but, again, samsung obviously doesn't have a printing machine. they make a lot of printers. they do make printers, right? >> yeah, they do. >> sure. >> samsung does make some printings, no printing machine, but, boy, able to get the low yields in the government. there you go, guys. >> fascinating point. thanks. talk to you in a couple of minutes. meantime, rick, you're going to work tomorrow, by the way, which doesn't always happen on a good friday holiday, but let's get the santelli exchange for today. >> absolutely. i do remember one other early close on a good friday. of course we're going to be

here. it's the employment report. i haven't missed one since '79. santelli exchange today. look to our neighbors to the north. it's remarkable. their job creation, 82,300 jobs. they were expecting 10,000. it's the biggest number going back to '08, but i did some research. i went back through 30 years of canadian jobs data. 82,300 is the fourth best number in 30 years, so that could have a positive effect on the number tomorrow. either canada's catching up, or they are leading. i'm not sure which, but here's the icing on the cake. manufacturing is coming back to north america. our second issue is interest rates. if you were to look at a chart of ten-year u.s. minus ten-year boons, it's in the 40s. it's in the widest in over a year, and it really does underscore, yeah, maybe there's a more optimistic economic look in the u.s., but there certainly is a more pessimistic view in europe. now, we're going to get to the

part that i like the best. on monday we're going to be doing the nat gas challenge. i'm going to be in oklahoma city, and we're going to drive in one of the most monster favorite trucks in america, the mean ford f-150. we're not talking small engine, eight cylinder five-liter, and when we drive it in monday morning, it's going to be running on gasoline, and by "street signs," if i'm as fast as i used to be with a wrench, we're going to drive it out with the ability to run not only on gasoline but natural gas as well. boy, this is going to be exciting tv. don't miss it! >> that's good. the ship is beginning to turn, yeah. shell announcing that it's going to have a production facility to turn nat gas into diesel. look forward to that and, of course, look forward to seeing you tomorrow. >> we're also going to show you a gizmo you can put on your house and fill it up yourself. america always rises to the occasion.

i love enthusiasts. >> rick, thanks so much. a quick programming note. "street signs," by the way, going to be live from the cme today with big guests talking bonds, financial reform and a lot more. brian and the gang, 2:00 p.m. eastern time. you don't want to miss that. meantime, groupon facing an s.e.c. probe and an investor lawsuit, of course, after an accounting mess that forced the daily deal's website to reveal this larger than reported fourth-quarter loss. the troubles weighing on the stock, well below the ipo price of $20. today 14.42. joining us in a first on cbs interview is harry weller, general partner and new enterprise associates and the first institutional investor in groupon about four years ago. harry, good to have you with us this morning. >> very nice seeing you, carl. >> you disappointed in them? >> not at all. i mean, you have to take a step back. you know, four years ago groupon as a business didn't even exist, right? and when things get complicated, i tend to look at things like free cash flow. last quarter groupon had free cash flow of about 155 million. look at facebook, and if you do

my math, look at the s-1 for facebook, it's twice as old as groupon, and yet it has about $140 million of free cash flow, a company that's twice as old. you also look at things like amazon. amazon last quarter was in nine countries with about 40% of its revenue coming from international. groupon is in 48 countries. >> in four years? >> in four years, so you have to take a step back and understand everyone describes groupon as a company very easy to replicate but it's actually very difficult to replicate. they released a the pro last quarter called groupon goods. overnight they became the third largest online marketplace in the world, overnight. so i think a lot of the complexity is due to good things having happened. >> quickly. >> quickly. >> you're talking about the torrid growth which is a great point, but the material weakness in some of these controls might be a function of growing so

fast, right? >> it's not just a function. it's unprecedented growth, right? it's even faster than facebook. >> so does it have to slow down? >> you know, i think the truth is i think we've got a wonderful management team and at the end of the day it's a marathon and not a sprint. >> have closed ranks around their ceo, jason chiles. do you think there needs to be a change at the top in any way, form? >> that's up to the board and the management team. i think they have is t as much under control that they can have it at this stai'm excited, agai opportunities in front of them and the market they are attacking which is at the end of the day local commerce. >> do you think this window of difficulty for them, and i'll -- i'll paint it that way. >> yeah. >> opens up doors for rivals? >> i think it's going to be very difficult for rivals to compete given the scale i just described. again, when you even compare them to amazon, they are almost four times in as many countries as amazon which is 15 years after their ipo. remember, groupon is only five months after their ipo. i think that's very hard to

replicate. >> you've hung on to the investment you put in originally, right? >> yes. >> ipo at 20, 14 and change today. are you willing to make a call as to when it gets back above 20? >> of course no. i'm not a prognosticator on those kinds of things. what we are is company builders and we'll continue to do that here with groupon. >> we also wanted to talk about what will be the next groupon, the next facebook? you've got an interesting thesis, and that is the first round of social web entrants were about people. >> yeah. >> then it went to places and yelp and so forth comes to mind. now you think it's about things. >> that's right. >> where does that lead us? >> the cool thing about the internet was that it was originally about verbs actually, not the nouns. what i mean by that, you know, you used to surf and search, but did you that anonymously, didn't you, carl? no one knew it was carl. >> true. >> then with facebook you added your identity to the internet, and then you started using your mobile phone, location-based services that could tie not only your identity to identity but to places. i think the difference though is when it comes to things, things

are about commerce. place services -- >> products. >> exactly. look at facebook's revenue. facebook's revenue is all advertising, isn't it? that's a -- that's about a $2.5 billion market, carl. local commerce, $7 trillion market, so when you look at things like pinterest or fantasy shopper in the uk or groupon, they are attacking the market of commerce, not advertising which is much, much bigger. >> groupon's response would be we'll sell ads from companies that want to sell things, right, legitimate comeback? >> but the other day groupon selling goods and services, and the transaction itself is a purchase, not an advertisement, and i think in the case of fantasy shopper and pinterest, let's take fantasy shopper. think aboutterm social has impacted advertising, right? has social yet impacted commerce, and the answer is no, not yet. groupon is the first example. others like pinterest and fantasy shoppers, it's literally

like fantasy football, right? >> yeah. >> people go on and pick shoes and pick up an outfit virtually on harrod's, and propagate, this is what i like to do, this is what i would like to buy. think about it, that purchasing intent is already there. that's tapping into that $7 trillion market of commerce, not just advertising. >> i have a feeling we'll hear a lot more about that name in the years to come. >> you sure will. >> you'll come back. >> any time you want. >> great having you. >> thank you so much. >> when we come back today, bed bath & ber beyond outperform the broader markets today spiking in today's action making it the best performer on the s&p. we'll see if this retailer can keep delivering returns beyond expectations when we come back in two minutes.

bed bath & beyond bringing home the goods in its earnings report posting a 0% climb in its fourth-quarter profit. they beat earnings per share, revenue and same-store sales expectations. and as you can see, shares up 8.5%, the single best performer on the s&p today. chris is a retail analyst at jpmorgan and joins us this morning from new york. chris, good morning. >> good morning. >> story looks pretty good, even despite something that doesn't happen a lot, and that is a little bit of margin compression. >> yeah. their gross margin was down 40 basis points and, you know, i think that's actually what we need to be focused on here and worried about.

i think amazon is starting to show up and put some pressure on bed bath & beyond. >> interesting. only one quarter of lower margin. the metric other than that hasn't fallen since the beginning of 2009. how is amazon moving in? >> well, you know, if you go online and you saw this past holiday very acutely, you can find a lucacet pot on sale for 15% discounts. amazon and bed bath & beyond benefitted from linen & things going bankrupt. they are above where they were in '05 in the housing boom, and you just look at it, and you see that the online community is starting to catch up. >> you sound a little bit worried about that. couple that with the profit outlook that was good, but not that far off from where the street is. would you be lightning up on today's outperformance? >> i would. i think part of it today is -- it's a short squeeze. a lot of it had fun community. we're short this stock going

into the print. i think it -- look at where the market is valuing it today. it seems about fair value. would i take some money off the table. they are cutting sg & a to fund that market investment. that's not infinite. can't do that forever. it's coming out of advertising, and you just benefited from having a pretty warm january and february in your quarter, so we expect the top line to decelerate as well. >> interesting. >> any broad conclusions can you draw about the consumer? can you strip out weather? can you strip out easter into the numbers we're seeing overall today? >> yeah. i think that if you look over the past couple of months, you had the warmest march since the 1940s. february was up on average ten degrees year over year. it's been warm, so i would say though that the weather is adding 200 to 300 basis points, the comp overall, and for the march numbers, you've got about 100 to 150 basis points out of the easter shift, so net net we think that the consumer isn't in better shape, but the outlook is

being inflated by some of these one-time factors. >> interesting stuff. chris, thanks for your time. >> thank you. >> always good to talk to you. >> when we come back today, it's been more than a month since j.c. penney's big transformation. is it transforming the company's sales, too? we'll check in on the retail giant, and we're counting you down to the close in europe. just about exactly ten minutes to go. be right back. choose control. introducing gold choice. the freedom you can only get from hertz to keep the car you reserved or simply choose another. and it's free. ya know, for whoever you are that day.

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on the heels of same-store sales numbers out this morning, want to take a look at one retailner particular in the midst of a big turnaround plan. joining us on that, courtney reagan recently named as one of

the top journalists to follow on twitter. hey, courtney. >> thanks very much. along with j.c. penney czeh's ron johnson transformation plan came the revelation that the retailer will no longer report monthly comp sales numbers leaving you to wonder how the merchandise is moving under the new plan. the metamorphosis began with new pricing, the logo change and new marketing on february 1st. stores have been decluttered by reducing inventory and signage but the plan won't actually begin until august and the town square ideas are entirely under wraps. the entire transformation won't be complete until the end of 2015. >> i would give them a "b" in terms of how quickly they have come on and been able to get things up and running, and where i think that can move to an "a" is if the brands and if the town square initiative as we hear more about it can drive the traffic as desired. >> former may department store

exic jan given says despite successfully converting stores and slicing expenses, the changes aren't resonating with customers. two-thirds don't even know about the new pricing. store for store sales are down 17% in two months and gives j.c. penney a c-plus at this point for its transformation. some soy go short j.c. penney and go long kohl's and target and thank ron johnson for the comp sales this month. while the opinions are split on the progress so far, almost all agree it will be years before the final assessments can be made, but if the 100 shops within the store strategy works, j.c. penney could begin to pull share from specialty retailers from ann day already all the way down to children's place. carl in. >> an interesting story to watch. thanks so much. talk to you later. the bells are about to sound all across you're. we've got the close after the break. don't go away. i hit a wall. and i thought "i can't do this, it's just too hard."

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well, we're on track for some losses for the week here in the states, but, man, spain, italy, portugal, down anywhere 3% to 5% for the weeks. simon hobbs is here to count down the close to the uk. >> no doubt about it. this is the week that the cracks have really begun to reappear over in europe. yesterday we were talking about the way in which the ecb and the

kind of glass half full way was being as dovish as it could be given the tensions with the germans, but that's not the interpretation that a lot of other people have had. it's glass half empty because you didn't get talk of unconditional support and specifically, of course, the nervousness is about spain. that is still the epicenter of what is going on. again, today, you can see the way in which the yields have risen over concern about where they are going to go with that austerity. can they politically get it through? let me show you a six-month chart to indicate we're not back to where we were, but we're getting, as you can see, we're getting up towards the sort of zone before the ltro game through. they flooded those banks in europe with liquidity. not there yet, but clearly major warning signs there, and, of course, the contagion is spreading over to italy. have a look at the yield there. for the week they, too, have tracked higher. there you go as again there are concerns about what the italians might or might not be able to do, and the cost of insuring both spanish and italian debt has also risen during the course

of the wake. there you see that's a five-year chart. can you see the way spain has tracked high. let me take you through to the close of the european markets. they have done a four-day break in case you're not aware. >> european markets are closing now. >> and as we circle over latin america and northern -- wow, here we go. this is new. thank you very much. >> as carl said, it's actually the worst in four weeks for spain, italy and portugal. however, there is green on the street. all that said, and if i take you back to a session chart of where we've moved on the big markets, london, frankfurt and paris, you'll see the way in which we've actually cut our losses through the session, and that is actually quite a good sign. what was notable about today's trade before we opened up here down at the new york stock exchange was that a lot of the european banks had fallen. they clearly were on the downside, clearly people were nervous about having that event

risk over the four-day break and we come towards the end of european trade is some of those losses specifically on the banks have been cut? and there i present you carl quintanilla with the silver lining from europe? >> we could use that. >> the cloud. >> yes. >> it is the cloud. >> thanks so much, simon. >> see you a little bit later. gary kaminsky is up next talking about low rates around the world, even though, gary, didn't get a cut from the ecb this week. >> well, actually we're going to talk about higher rates because you were talking about higher rates and obviously the impact the sovereign higher rates have had on the european markets. let's take a look at one asset class that a number of you have written into me about and wondered why have the mlps, an asset class that we've spoken about many times on the air, such a bad first-quarter performance. take a look at the mlp index. that's going back the last three years. investors got used to a one-directional trade there. sort of plateaued. if you take a look at the career-to-date chart and you see where we've been for the first

three months, you get this issue, well, there you go. i mean, if we benchmark that against the s&p, you would see a very clear picture. very good relative underperformers, and there's basically three issues that are sort of overhanging this asset class. let's take a look at what those are, and that's basically rising bond yields, the concern about higher interest rates, the never-ending fear about possible changes to the -- to the tax status advantage that the master limited partnership asset class has but the most important one in my opinion has been basically sly and demand. there's been a huge amount of equity issuance over the last several months, and it -- and, again, also at the end of last year and basically the market has not been able to absorb it. i don't think the interest rate issue is a major issue. i do think the supply/demand is a major factor and it will continue to overhang. i did check in with the top mlp analyst earlier this morning and he focused on the concern over higher yields. he points out three names,

enterprise products, plains all american and williams continue to be the top picks over there at ray james. if you're trying to build your position here on what will probably be continued weakness. >> interesting stuff. all right. keep an eye on those three names. >> you got it. >> don't touch anything in the control room. >> yes, i'm back here. glad you're noticed. going to mess with carl right now. >> the last thing i need is garry in my ear. bob pisani is here on set. on a day when commodities are up, dollar up and stocks >> you notice this has happened a lot recently. not on the majority of days, but we turned positive, all the major indices turn positive on the day when the dollar was up, and guess what? we're not falling apart just because the dollar is up. this is a good sign. doesn't happen all the time, but take a look at the major indices that the dollar moved up. get a close shot of this. when the dollar is up, you'd expect, wait a minute, gold to be down. gold is up. hey, copper is up. you would expect commodity stocks to drop. nah, commodity stocks are up. energy stocks on the upside.

pay attention when something like that happens here. that's a sign, maybe strengthening u.s. economy, is actually going to be a good sign. dollar is not always a disaster for the stock market or for commodities. i keep getting comments, carl. you can't decouple from europe. it's not possible. everything is linked. everything's got to move in tandem. i'm sorry, it is possible to decouple. i didn't say it was disconnect completely. there's a relationship, but, folks, let's put up how we're doing for this week here, and let's just see whether or not you can get decoupling here. put out how the major indices because once again europe is to the downside. europe down 4.6% and spain down 4.4%, brazil, hong kong on the upside and china only open one day this week so i'm not counting it, and the answer, is and we've been getting this week after week, carl, can you get some decoupling, not completely. not making outlandish claims, but you're not paying attention to see our markets have been outperforming the rest of the

world. i've been asked any good indicators of risk on, risk off? i've been looking for a year to find something that's predictive. i have not found it yet, but i have been watching something that's intriguing i want to share with you. it's called the dbv. this is an exchange-traded fund from power shares, and what they do is they track a basket of ten currencies, and they go long the three currencies that have the highest interest rates, the highest yield and short the three that have the lowest yields. right now this fund is long the aussie dollar. it's long the kiwi and long the norwegian kroner and short the u.s. dollar, short the yen, and it's short the swiss franc. in other words, it's a risk on, risk off trade. what you'll notice it hit its high in march, and it's been moving to the downside since then. now, that's very intriguing. put this up because we've got to go. put up the s&p against it. it's now decoup will from the s&p. the s&p has continued to move to the upside. this has moved down. i'm not quite sure how to make this, i don't want to make any outlandish claims, but this is

the closest things i've come to see a pure play on a risk on kind of risk off trade. >> love to see a chart versus chart on those two. >> the s&p has been moving up, decoupled from right around here. >> something happened at the beginning of the month,ing. >> more to say about it later. >> okay, good. thanks, bob. >> let's get to rick selly in chicago who i think has a special guest as well. rick? >> absolutely. i have my buddy jeff carter, points and figures. everybody likes to read it. you know what, you'll tell you what, jeff to. me it's amazing. i looked at canada's numbers today, 82,300 jobs. the fourth best number in 30 years, and just to put a face on how great this number is, if you look at the past year as a running behind us, in the past year, four of their jobs numbers have been negative numbers so this is a big deal. >> big deal, and it shows what an active economy with good banking can do, you know. they have got that great energy production going on right now that's just adding jobs like crazy. >> autos, too. a lot of manufacturing in autos. a lot of cars being made up

north, cars and buses. >> lower corporate taxes. >> now, if we think about -- i've been making some phone calls and many believe you take the canada jobs number and you multiply it by five or six to get an equal number from u.s. perspective. >> right. >> so to have the same kick, to put this in perspective, we've have to see close to 500,000 jobs tomorrow. i don't think we'll see it. >> we won't. >> what's your opinion, is canada a leading indicator, or are they playing catchup to both? >> i think they are playing catchup. i think our economies trade with each other, but i don't think they are necessarily patterned after each other because they are strong in different things. the canadian economy is so strong in commodities. ours is a lot more diverse than theirs. i think tomorrow our job number is going to be better on a headline basis, but i think you're going to see that labor participation rate drop again. >> a big debate, election year and as much as i hate politics, if we really wanted to be objective here, we've done a lot of programs in the u.s. to try to help the economy and greet jobs. >> right. >> the europeans same could be said, the japanese, the same could be said. how does canada fit in that

pool? >> they haven't done anything. >> oh, boy. >> can you say that again, i didn't hear you? >> they have not done anything. >> and the recovery. >> they are recovering quick. >> their banks weren't hurt as big as our banks but they never had the subsidies going forward either so that their banks would get in that kind of trouble. >> sometimes when government are here to help in the big picture it really doesn't help and i know the mortgage industry is way different in canada. >> it's totally different, and i think the interesting thing if you look at spain, their bond yields go up, an article about bond vigilantes, that's actually good because it gives you the true price to the market. they are using austerity and raising taxes correct their budget deficits which is the wrong approach. what you should be doing is cutting taxes and cutting your budget, your spending levels. >> is your middle name art laugher? >> it is. i think it should be. larry kudlow has him on tonight, and i have a feeling that's somewhat his strategy as well. >> taxes are an incentive to -- to behave in a different manner so people are going to avoid

taxes when they go up. >> real quickly, what's your guess on the number of jobs tomorrow? >> oh, god. i knew you'd ask me that. i think the headline rate is going to be about 8.5%, but i don't have a good thing on non-farm. >> i got you. carl, back to you. >> all right, rick, thank you so much. rick santelli, jeff carter in chicago. when we come back, the maker of svedka and corona. that's next, but first a look at some of the winners and losers from the trading day overseas. they have names like idle time books and smash records

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coming up in just a few, the buy america trade as the dollar strengthens, retail sales rip and the job market improves but the strong dollars may hit companies that rely on i.t. spending. the risk on how to trade it and we're trading the masters with the ceo of callaway golf. your midday moves at top of the hour. now back to carl. >> let's check out shares of viacom. an appeals court has reinstated a $1 billion lawsuit against google. the suit accuses google's youtube unit of video piracy. the original suit was dismissed a couple of years ago but the ruling says the lower court must determine if youtube was willfully blind to infringement so the story by viacom and google continues.

meantime, cons selllation brands beating estimates in its fourth quarter this morning. shares of stz currently lower, one of the worst performers on the s&p 500, down a little more than 13%. 2141. time ramey is vice president and senior research analyst at difficult. a. davidson and rates constellation brands a buy with a $30 price target. good morning, tim. >> good morning, carl. >> what explains the weakness today? >> about an hour ago i was ready to throw up on the low guidance that they have put out, but i feel a whole lot bert after the conference call. this is really all about them deciding that it's time to term out a big slug of their debt. we don't know how much they are going to do, but interest expense being up is the main reason for the lower guidance, not an operating performance shortfall. >> yeah. on the face of it, the guidance, 1.93 to 2.03 for the next fiscal year. there's a little bit of a yawn between that and the street of 2.23. >> yeah, no. it was much lower. i was at 2.25 so, you know, apples to apples, it looked bad,

but when you really look at it, it's not because of poor sales outlook or poor margin outlook. it's because they are planning on terming out debt and paying a much higher interest expense in 2013. >> you talk about the wine category still being pretty strong. i get 5% to 7%. is there anything structural in the -- in the growth rate that's -- that could be responsible for today's decline? >> no. actually the -- as you saw, the sales performance for q4 was quite good, and the performance for the category is quite good, and i think the company said they would likely mirror the results for the category in fiscal '13, so i actually feel quite good for the outlook for both wine sales as a category and constellation in particular. >> yeah. people think back to the third quarter which was a rare miss then. stock was at a low. $16 or so back in august. it obviously came up quite a bit, 50%. you've still got $30 on it, and

you say it's cheap at about 10.5 times. what's the multiple at $30? >> well, you know, i guess that would put us up closer to about 15 times. we have lots of brand and consumer product companies that are, you know, puttering along in low single-digit growth that are -- that are trading at those kind of multiples. the key thing i think for constellation is this is not about their ebit growth rate or top line. this is about below-the-linite else, and that makes us feel much more comfortable. >> seeing a lot more innovation, at least in beer. we had someone on from a beer-maker the other day touting a new blend of beer and ice tea. is imported beer doing well, the modella brands? >> imported is doing much better than the overall category, and they are are outperforming the imported beer segment, so, yes, they are doing well. they haven't been able to take pricing. they are looking to the cues

from the big players on pricing, but hopefully -- hopefully they will be able to take some pricing in fiscal '13. >> we'll see what the new year looks like. appreciate that, tim, very much. thanks a lot. >> thank you. >> when we come back this morning, larry kudlow making his way to post nine. >> coming up, larry kudlow's commandments. what does he want to hear more of or less that political season? he's returning from the mountain when "squawk on the street" returns. going to call x. go ahead and take a sip, and then let me know what the baby thinks of it. four million drivers switched to this car insurance last year. oh, she likes it babies' palates are very sensitive so she's probably tasting the low rates. this is car insurance y, they've been losing customers pretty quickly. oh my gosh, that's horrible!, which would you choose? geico. over their competitor. do you want to finish it? no. does the baby want to finish it? no.

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it's a good day to talk to larry kudlow, joins us once again at post nine. looking at a few things. one of those being how the eventual gop presidential candidate will need a running mate. talked yesterday about the veepstakes. a poll showing romney ahead in pennsylvania, 47% to 42%. >> we had foster fries on, an old friend from wall street time, santorum is going to say in and he will help him. the reality is the whole republican party would like this over, and the second reality, as you just noted, polling data shows romney has an excellent chance of defeating strump and

th that will murder santorum's career. the odds are stacked against him. >> santorum sees himself as a cause candidate. >> yeah. >> that even if there's damage to his own career, it's part of the greater good. you buy that? >> no. i mean, nobody is indispensable, sorry. look, i happen to admire rick santorum. i agree with him most of the time. conservatives are voting for romney, and the recent exit polls are showing that. they believe he's the best guy to beat obama so i don't know. i think the race is effectively over. we know, that and the matchup between obama and romney now, with the washington duelling speeches. that's the deal, that's the deal. >> let's talk budget. you have arthur laugher on. >> as part of our ten commandments for growth, limit spending and limit government. art laugher, a famous economist. interestingly, art has a supply-sider is known for his lower tax rates, but he also has become a big hawk on spending cuts, and my own view is we've

got to get the budget as a share of gdp down from 24% to 19% or 20%, and if you do that, that's like a tax cut for the economy. it removes the tax hike threat. it will help balance the budget, but it lowers the government's burden on the economy, and we will take that up tonight. >> erskine bowles has been out this week. do you think in the end there will be a compromise that looks li like simpsocis simpson/bowles. >> simpson/bowles wanted to lower the rate across the boards, simplify them and stop the deductions used by upper deduction people. that's what paul ryan wants even though the president got that wrong in the washington speech the always day. i always thought simpson/bowles would be the frame work, and i may not agree with everything and i think it's pretty good. i think before this election is over, voters may judge which candidate is better geared

towards a major deal in washington? in other words, subliminally i think mitt romney says, you know what, i'm a deal guy. i know how to turn things around. i can put parties together that this chap obama can't seem to do. that could be a subliminal point for romney. >> one of the big liabilities that's hounded him in the primary season could become a benefit in the general. >> you know. what is a buyout guy do? what does a private equity guy do, they make deals? they make deals. what has president obama failed to do so far with the republican house? make a deal, so that may be a subliminal point before this is all said and done. >> what people worry about, larry. you listen to the president and you listen to romney this week, and they are afraid the whole season is going to be about debating bills that -- that don't stand a chance on either side, of ever becoming a law. >> well, i agree with that, and right now they are throwing darts at each other. you know, they are going to debate and they are going to give speeches at the conventions and we will see how this -- how this thing turns out. one thing i want both of those

candidates to do and they are not doing. i want them to talk about king dollar. i want to reiterate my financial view, for what it's worth. the fed not easing anymore and my opinion it's good t.raises the value of the dollar. that lowers commodities, including energy and that says buy the correction. king dollar should be an issue in this campaign. >> i think i'm being told. we may have a short sound bite of foster fries on kudlow last night. is that correct? >> we want -- i think earlier we might have said he's romney's guy, clearly santorum's. >> beg your pardon. >> santorum's backer. >> my bad, my bad. >> he's santorum from day one. >> look forward to tonight. >> thank you, carl. >> don't forget. >> "kudlow report" live at 7:00 p.m. eastern time with the man himself there, he is, looking good, especially in the new promos. keep the tweets coming. it's a caption this day. looking for something on google's new glasses. the company's first venture into

wearable computing. they are calling it project glass. can you see all sorts of bitz of information through this. what is this woman thinking or saying? much more after the break. tdd#: 1-800-345-2550

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>> you don't know already. today is the first day of the 76th masters. of course, coverage begins this afternoon, but we're just now from a white house spokesman jay carney that the president opposes the ban on women at augusta national and in the words of carney, quote, he believes that women should be admitted. of course, a big controversy for the week as we watch ibm and their new show virginia rometty who we don't know whether she's a member of augusta national. no comment from billy payne at that press conference yesterday. time for "squawk on the tweet." google unveiling a couple of thin wrap-around shades that put the company's web services literally in your face. take a look at this. >> well, cool. take a photo of this.

>> prototype glasses are still being tested. not available in stores yet so today in "squawk on the tweet" we're asking you to caption the photo for this woman is wearing some of these things. beam me up, sergei, which i like a lot. charles sweets google's project glass develops sunglasses for customers with unibrows. does she have a unibrow and immersion labs tweets conquering monacle. man, they are going to need to work on the fashion element of that before they get it to be sold to a lot of people. takeaway time. gary, you'd like good in a pair of those, gary. >> oh, carl, thanks so much. >> already got the -- what's the brand you wear? >> i don't even know. >> prada? >> listen, it's been a choppy week around the world for equity markets, credit markets. i thought we'd take a look at a couple of quick pictures. larry mcdonald just pointed out, take a look at the spread between the engineer and the

ten-year, another big day for the ten-year. spread the widest it's been in many, many months. let's take a look at my favorite chart always. stock versus bonds, could be a big day in the bond market tomorrow. take a look though. you know obviously equities way outperforming credit markets. we'll see what happens there. >> rick, gary mentions the spreads. a lot of people chattering, too, about german industrial production with the big miss and worries that the periphery's problems are now the core problems. >> absolutely. i think there's very little doubt in my mind that the spread that gary referred to, which i've been watching very closely right now, you're looking at what, about a 173, 174 bund, 218 on ours. we're in the mid-to upper 40s, vacillating, but here's the key. at the current yield, the bund is only half a dozen basis points from its lowest ever year close which happens to have been 167 on