market road. there's no reason to think that we're not going to continue down the status road, is there? >> yes, there is. >> john, thank you for joining us. "squawk on the street" starts right now. >> congratulations. i'm melissa lee, jim cramer, carl quintanilla. there is a disappointing jobs report and qe 3 is back on the table. dow jones down 115 points right now. today's road map, carl? >> it's a case of the mondays with futures pointing to a big selloff. is this the pause that refreshes the market or a beginning of a stumble in the economy like we saw last spring? >> and apple gets a downgrade.

>> meantime, aol has cash be. shares seeing a monster pop, up about 39% premarket. >> and avon has a new chief. the stock had the best week since 1989. wow. >> the market is getting a chance to react to the less than stellar economy. obviously much fewer than expected. the unemployment rate dropping to 8.2% suggests that the recovery remains trepid and could lead to new rounds of quantitative easing. you learned us that the market would see turbulence this morning because we had no opportunity to respond on friday. >> look, i wanted very much for the jobs report to come out thursday. we're an automated society other than the labor department. people at home are saying, wait

a second. some people have to trade futures, some people got out ahead of this. everyone is going to want to sell. i see people on twitter who say, listen, is this the time to panic? panic has never been a great strategy. all stocks are not trading together in 2012. some bargains could be surfacing. >> four-month average, david, for the jobs is 214? >> yeah, 214 to 215. >> and steve liesman in a widely quoted tweet said, everybody settle down a bit. this is not a disaster. that happened on friday. >> i think that's probably a good point. as we head into earnings season, perhaps more in the past on exactly how well corporate america is doing. over the last few years, quite well. but there is a question about profit margins and how they can be sustained or how much they can be expanded given the productivity improvements, so

many other things that have helped, including extraordinarily low interest rates. as we move into the season to see why things didn't pick up quite as quickly or may be slowing, we're going to focus on that revenue number in america. >> you've got to remember, there was a revolution going on in drilling in this country. we're going to hear from the ceo. this was about natural gas and there was a tremendous number of people put to work drilling all over the country. well, we have a big glut of natural gas. some have shifted to oil. it's not as many drilling opportunities. >> do you think those numbers, those results showed up in the payroll report or do you think it was sim flee the warmer weather and all of the jobs were added and this month was weak? >> i think it definitely showed up. the rate count showed a dramatic decline. almost every single ceo that i had on my show, whether it be chesapeake, they tried to move

people, heckman tried to move people. little guy. they just couldn't move them fast enough. that had been responsible -- that industry responsible for 15% job increase in year over year in their business. that's going away and shifting into negative. >> well, that is a very, very bad sign considering deeper production cuts are to come. if we are to believe that a lot of this weak number is because of the layoffs that we've seen in the natural gas industry and those layoffs will grow in time -- >> if only we can find a way to convert vehicles to natural gas. something that rick santelli will be doing all day today. >> the incredible differential between natural gas and oil, exxon supports top dollar for xto, natural gas company, shell the other day talking about turning natural gas into diesel. it looked like the entrenched interest are going to fight this. they cannot make as much money on natural gas.

that's why they have done so well. obviously a speculation not as something for the squeamish. >> do you think that the easy games in the market are behind us? >> well, first quarter was so great. we didn't have a selloff, we would literally be in a trajectory that reminds me of many pair bol lick be moves. i would actually like to see the market cool off. xps versus that's very 2012. >> manufacturing, it seems as though there's a continued pace there. our parent company, ge, making appliances here in the united states. it will bear watching closely. >> natural gas, where are the companies going to put their expansion? united states. it's so incredibly cheap. our natural gas prices are well

below the middle east. if you were going to locate a petro chemical plant in dubai, you're an idiot. you're an idiot. we already know what to do with that. >> we've got to talk apple. price target of 633.68. this could lead to slowing sales as customers opt to delay future upgrades or shock may be moved to a lower device. in line with the general market drift lower than what we were seeing this morning, every point that they make is reasonable. >> i think that we have to look very hard. there's an advertising piece about who at&t is going to support. they feel it's important to

start getting behind nokia. one of the reasons is verizon is selling far more iphones than at&t. i look at that broader downgrade and say, that's a fun downgrade. $50 and 30 odd cents is the con sen says. he takes it and says you should sell it. it sells at 600 bucks and it's so hard to downgrade. >> we should mention, too, the analyst is will pison, the infamous -- >> which we were just talking about last week, i believe. yeah, that is noted -- dually noted. got to give him credit for being around this long. >> sure. >> longevity is the key. i do need to worry about the

continued tension between with apple. you do have to wonder whether they are going to take real estate back in terms of fighting back against that. >> verizon made its bet with the android while at&t didn't spend enough to be able to support the iphone, i believe. at&t may disagree with that. i wonder whether this is at&t not doing it right. i know it got good reviews in the last few days. but this is an at&t stumble of verizon share take and people love their iphone. i'm sticking by that piece. >> as apple sells more and more of these to emerging markets, as they are not dealing with u.s.

carriers, maybe they are not as big of a pushover, right? >> samsung has done very well in asia. i want to come back to apple being an ecosystem. people love their apple plugging into other devices. i always have a hard time selling a stock that sells at 10 to 11 times earnings. >> in countries where the telecom industry is more fragmented, does that give them more power to push back and say, you know what, you go to the other guy who has one-fifth or eighth of the telecom market and if they all agree they don't want to do it, then -- >> good point. i just very rarely have found apple not having the upper hand. if samsung can come in with the superior product, that i understand. in the end, i come back and say, apple has the preferred machine. and until someone comes up with something that's revolutionary, not evolutionary against them, i

think that selling apple here is still not a great idea. >> certainly the downgrade adding on the margin to the downside pressure. >> yeah. >> multiples are an interesting one. if it was trading 30 times earnings, it might be a different conversation. but 13 or 14 times -- >> qualcomm sells an expensive price. the sins of -- it's not the sins of our fathers. it's the sins of our analysts. and i think qualcomm is a more expensive stock than apple. again, institutional memory is too long about what walter did during that qualcomm period because a lot of people liked aol and it turns out maybe they were on to something. >> yeah. >> announcing it is selling more than 800 pat tents to microsoft. microsoft will license more than 300 additional patents as part of the deal. chairman and ceo was on "squawk box" this morning right after that news broke. >> the deal we did is tremendous because it basically gives us

the ability to sell assets that we weren't using, still maintaining a very clear and distinct i.p. scenario and as much as possible this will return to shareholders in the terms of cash or buybacks. >> david has been working on this all morning long. >> look, i've talked to people who have focused in part on aol in the last six months, eight months. sometimes you try to assess the value of the company but nobody would anticipate that they would have a billion dollar price tag. >> market versus the money that they are getting stocks holding up in 23, 24. i don't want to misspeak here. maybe 25. so 15 of that is going to be cash after this is all done. this he will continue to license it. now, as for the overall

business, they are still relying on people to hook up to the internet. >> that's the green factor? >> we thought that was an oil well but it would run out of oil years ago. it still continues. in terms of putting in $150 million bucks a year in patch? >> yeah. >> so that's still a question for people but, man, this number -- and hats off to armstrong and the auction that they did getting it. >> i was worried about whether patch could ever make money because of local salespeople, whether huffington is -- is she taking over more of the day to day and is huffington ever going to make money? >> apparently for the fear of shareholders, they are going to return a lot to the shareholders, at least that's their anticipation. a significant portion of the proceeds will be returned to

shareholders. >> because there's nothing better that they can think of to do with their business to turn it more into a sustainable business model? if a company has a billion dollars in cash to help reinvent the business, no, our business is fine and we're going to give it back to shareholders. done. >> there is a huge number for the i.p. portfolio that they will be able to use. >> we see yelp and they may never make a lot of money and if they were just to go and have funded something, funded, i have no social media to speak of, no mobile, they have no cloud. >> you know -- >> jim is like, i changed my mind. >> tmz is a remarkable thing.

can you monday advertise tmz? >> she looked bad for a while. it's a shame. i've watched her. did you know taylor swift is from redding? >> i didn't. >> redding, p.a. >> an amazing business story behind that young lady. >> yes. i'd like to buy shares -- that sounds bad. in a company -- when we come back on this monday, fueling the future at a decade low flat gases, it's flat gas that has brought rick santelli to oklahoma. rick? >> absolutely, carl. we're getting ready to put this 24-gallon carbon fiber nat gas tank down in the bed of our f-1506789 when we come back from the break, we're going to be bolting it down and we'll be done with phase one. see you in a few minutes. ♪

welcome to the world leader in derivatives. welcome to superderivatives. never has natural gas been so abundant and cheap at the same time. we're exploring how that is reshaping the industry and having an impact on the economy.

will automakers jump on that? we're going to go to rick santelli. rick, good morning. >> reporter: good morning, carl. it's not just running on nat gas but nat gas and regular gas and you can switch back and forth as easy as changing the channel on your radio. we had our producers behind the wheel and you couldn't tell from the performance when you switch back and forth. we've lowered the 24-gallon tank. we're going to have it done in a few minutes. then we're going to take the line that we have to run, its quarter-inch line and then go underneath the car and run it to the front and then phase two

will begin when we put in the ecm, the new module. the neatest part about this conversion is -- and you've said it's a challenge. it's no challenge. i think changing the oil on some of my old cars is more of a challenge. it takes a little bit of time but it's pretty much fairly simple and nothing gets changed on the engine. the computer chip doesn't get changed. when the epa has the settings for your chip, none of that proactive function is altered in any way. >> rick, walk me through what else is interesting. walk me through -- you're going to be on several times into the afternoon when this project will be complete. so where are you in that time line right now? >> well, we're actually pretty much on schedule. we start with the tank. the tank is progressing right on schedule. we took about a half hour to do this. we had some of the holes predrilled. we'll do the tank, run the line, and once we run the line we'll then -- follow me over.

>> rather remarkable. >> we're going to take the new harness and it connects to all of the jewfuel injectors. you jump each injector and that goes into the new injectors that we're going to put on top of the carrier. we leave the old ones in place so it can still run on natural gas and nat gas. here's the regulators. that's the parts. you're going to monitor me throughout the day. you keep me informed on where the 30-year bond is trading, carl. >> i think we went down to 210. thank you very much, rick. talk to you soon. rick santelli. all right, coming up next, going long after the long weekend. get ready for cramer's mad dash and a look at the futures once again, the jobs report on good friday sending the futures lower in trade. take a look at them as we head to break. more "squawk on the street" straight ahead.

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while looking at a bit of a selloff this morning, time for cramer's mad dash and some companies not having bad news today a dramatic freely used preannouncement, it's going to go to 9295. carl, it's not just earnings which is obviously been doing

well because of the price of natural gas and making paint. the paint stores, the sherwin-williams are above. think about this. you have a renovation trade, housing doing better and yet employment and carl i'm telling you, we are not going to be in for a really huge selloff mem cal companies see their costs come down. >> right. >> but that doesn't mean that margin presh be you are is going to be any less intense. >> right. but they came out, a major chemical company and now you're starting to see the benefits of the raw stock. we have the report, remember, if you become the cheapest provider of natural gas, then people are going to locate here and more

jobs are going to come here. i just want to present a bit of optimism. i have people on twitter, jim cramer saying, this is going to be the blood bath, you didn't see the blood bath. i refuse to get as negative as the people who are around it. >> yeah. >> it hasn't paid off in 2012. i don't think it will this quarter. >> that's a good point. we'll talk cbs after the break and get to the opening bell. we should ring at 4 1/2 minutes. >> carl, we've got the open plus the cnbc exclusive with the ceo of eog resources. it's all straight ahead here on "squawk on the street." what the world wants to know and share is here.

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the street," live from the financial capital of the world. still a lot of digestion, jim, on the numbers on friday his first chance to respond to the jobs number? >> he's not just swinging in the breeze. he's saying, we are there in things slow down. i was very critical of the way people regarded his previous speech and people seem to think he has a weird ideological approach to things. he's saying, i'm going to be looking after you until somehow congress does something right. he's a grownup in washington. >> you won't pin your hopes tonight that more liquidity is on the way? >> i pin my hopes on the fact

that alcoa which is aerospace, construction, turbine. that's tomorrow's business. alcoa took a lot of refining capacity out. that's a sign that things are okay. >> there's the opening bell at the big board. nyse and the euro board for workplace leader in personal finance education. over at the nasdaq, a nonprofit providing educational programs to children facing medical challenges. >> yeah. >> so, jim, the timing for the fed isn't until june which is what most people believe because of the election. it's a much more compressed time frame. if the fed is pinning their hope on what corporate america is saying, we are going to see rate hikes at this point given what we have been reporting incorporate america? >> true. what i'm focusing on is trying to pick stocks in an environment where this offense, risk on and risk off. they don't need the fed to continue to do well. they get tossed out like everything else does today.

does sher win williams need natural gas down and yet they are doing it without a lot of home equity loans out there because the banks don't want to give you home equity loans. case by case this year, less macro. i'm going to be tough on people for a second. you know when you shoe horn macro? when you haven't done the hard work. that's what is going on. >> in some ways, it's a lace zee person's ability to work the market. let not forget last week. the spanish yield moved above 8.5% and it's still with us and

a solvency problem, even though they are taking care of a liquidity problem. >> that is the worry, right? that europe hasn't gone away, that the jobs market here may be stalling. it's a convergence of all of those things, right, jim? >> right. but at the same time, i look at a zion's, capital one and say to myself, listen, they are not europe. they are leaving it to a more lick kwi fied consumer. yes, they get hurt if the job growth stalls but they are not europe and that's a huge part of the s&p. mastercard price target raised today. i warned people, if you get really negative all at once, you are playing 2011's game. and that doesn't work this year. >> doug cass has a note out today -- we love doug -- why wait until may when you can sell

today? it's like when you are at a bar and they call last call and you want to hang around for one more drink? >> when i did that on saturday, they didn't seem to mind. the reason i'm so adamant that you don't want to throw out everything is that one of the things that we've seen over and over again this year is that you could have tremendous earnings. >> it's true. we had a great first quarter. sometimes you wonder whether we're just sort of waiting for a takedown. >> good fourth quarter, too. >> since 1943 when the nazis stalled. >> no surprise the financials are seeing a defined weakness, as well as citigroup down 3% apiece. sizeable moves there. at the same time, we're watching

apple. >> how are apple sales? that's an interesting question to ask? i would say they would come back incredibly strong. i've been meeting with a lot of people and this apple 4s is a huge winner. it's a giant games player. $50 million downloads, i find it compelling that they question this idea of how much time we are spending on these. if you want to talk to your kids, you can't talk to them and say, how is it going? you draw something and if you get it, they feel great and you feel great. >> that's absolutely true. >> yes. listen -- >> and you get the conversation going again. >> now, have you ever exceeded 800 points in scrabble with friends? i had an 800 points round last week. my daughter had a $1300 trump.

i'm talking about a single round and she did a message to say, dad, i happen to be quite good at this game. >> she's a cramer. >> let's get to bob miss sunpis is on the floor. bob? >> i think it's a simple question. how alive is the bernanke put at this point? we sell off because qe 3 is less likely. everybody is worried about that today. job growth is less likely and qe 3 is more likely. so we sell off and if the bernanke put is alive and well stocks should hit their bottom early in the morning and calm off their is this a buying opportunity? boy, did i get an opportunity from the bears. they say in february job numbers are borrowing from march. a lot of people have been arguing that. now the bears are coming out and

saying, by the way, the same thing is going to happen with retail sales, for example. we also borrowed from january and february. i think the good news so far here, jim, is the earnings bar has been set fairly low for this quarter. we now have 11% expectations of earnings for the s&p 500. jim, remember that. expectations are low. my bet is we are going to beat that. remember, if the analysts keep dropping their numbers, and we always end up beating the numbers, one sector to watch, ho home builders. valuations have been very high and everyone has been playing the home building recovery in the middle of the year. if that doesn't happen, the stocks are clearly overvalued and have traded 1.5 times the book value. jim, pay attention to that and you may see that with guys like lannar or pulling away from the lower end guys. that's my point. guys, back to you. >> that's truly a good point that bob is making.

kb homes really blew it. lennar, home, hgx, they all traded together. now we're saying, kb homes, if you go back over that conference call, you're saying, boy, are those guys bad. and then you go over to the lennar call and say they really took advantage of us. they are winners, kb homes are the losers. >> good point. >> we want to direct our viewers' attention to avon. typically a new ceo would bring a higher stock price or it might in the case of avon if the stock had not moved up so sharply last week. the new ceo as chairman for two

years. and it's very loyal to young and that's a key question. that's what -- that's the heart and soul of avon. still ringing on door bells or directly selling to the consumer. that being said, of course, why was it up last week? coty, the german company, small family-controlled company, avon was getting closer and closer to naming a ceo. why not be opportunistic now prior to when this happened? with the ceo being named, the board having rejected 23, 25 out of hand, where are you going now if you're an af vob or key shareholder? as for coty, they may not abandon the bid. they don't have a paddle to gain control in any way. they are expected to firm up for at least the markets purpose

their idea where the equity check is coming from for what would be the financing. not that they are going to sign tup and pay for it. more likely is the fact that coty goes public this summer. they brought in all of the investment banks and some have said to me, you know what, why not take a shot at avon? there's a lot of strategic rationale. with the board under great pressure, it doesn't work. >> i think that coty may have a very big valuation. that the perfume industry has been a darling of investors. i want to go back to andrea young and just point out, she is not chairman, she is going to be executive chairman which means she plays a role. >> no doubt. >> she's one of the great wealth destroyers of all time. what i'm guessing is, why isn't she stepping aside right now? a loyalty without stock price

advance is a vice. >> right. >> you know she's not a vice chairman. >> no. >> maybe i'm too influenced by mad men in the '60s. >> it was the virtue part of it. >> exactly. >> we'll see. apparently she was in the running for the top job. she did not get it. thereforeit's potentially looking for other ceo jobs and has found one. the challenges are significant at avon. remember, it's not a domestic company. most of its sales, in fact 70% are abroad. it's incredible an important market for the company. there is a lot to set right there. we'll see what path she chooses, but many expect she will do so.

>> boy, that's been a disappoint an incredibly important story that cnbc is totally embracing. the nat gas theme day. we're going to take back our energy future. we have an exclusive interview with the ceo. great to see you, sir. >> great to see you, jim. >> i'm going to put it point blank. nat gas is going under 2 bucks. mr. fossil fuel romney who is going with oil or the president who is anti-fossil fuel embracing this once in a lifetime opportunity to be able to take control of our energy future. >> yeah, it's kind of interesting that it really hasn't gathered the importance

that natural gas has affected the economy. natural gas is relieving a burden of about $180 billion a year in terms of lower energy costs to the economy but the response by both presidential candidates has been a bit muted to that and i'm a bit surprised on that. >> now, at the same time you talked on our show, on "mad money," about your assets and the -- that we are basically in a saudi arabia general situation for oil, too, in some parts of our country? >> yeah, that's correct, jim. if you really look at the overall picture between the abundance of natural gas and then the great editions we're making to domestic oil as far as the total industry, i think there's a good chance that, say, within ten years the u.s. can be considerably less concerned about reliance on imports of crude oil and you can do that

two ways, really. one is, you can substitute natural gas as a transportation fuel for some of the gasoline and diesel fuel that we use today and the second thing is, we can continue to increase our don't mess still oil production. so in a period of ten years, i believe we can dramatically transform the entire u.s. economy and that's got a lot of ramifications for foreign policy, for balance of payments, for employment, all of which is positive for the united states. i think this can lead to an industrial resurgence for the united states. >> mark, we've long been saying that developing natural gas as an alternative to fossil fuels for transportation purposes is a matter of national security and not just energy policy. how much would it take, if we were to wave a magic wand and give $20 million, would it be

enough to build out a national system of nat gas filling stations? what's the number? >> you know, i really can't give you a good handle on a number. $20 billion might be a reasonable number. but i think it will happen because the economics are so impressive in favor of natural gases, so on and so forth. so in my opinion, by 2020, you have a very good chance for this manifestation toll ha manifestation to have occurred. >> when you say there will be an investor resurgence in that area, it will be private investors maybe like a private equity firm or so on? >> yeah, i believe most of the investment is going to come on the private side as opposed to federal subsidies.

if you really look at this whole transformation from natural gas and shale, all of that was done without any subsidies from the federal government or anything and i believe that's the same change can occur with just a degree of private industry and it will be able to come on with most of those investments because it will be a remarkable job creator, one of the few industries that did well was the construction of pipeline industry. this would put,000s of people to work what we seem to be doing is putting people to work, bidding out the insfra structure. >> yeah, i -- you know, i believe that you'll hear a bit

more about that from the republicans once they firm up a nominee. i think on the democratic side there's an anti fuel agenda that is still in there. if i were looking anywhere in there, i would say look on the republican side. >> i do not believe that he is the man if romney wants to understand this business. he's got to go to someone who is just has done a fantastic job. melissa? >> mark, thanks a lot for your time. it's interesting to note, quickly, billions of dollars have been loaned to subsidize the green energy. >> some we already know. >> to build out an infrastructure $3.97 a gallon is

the price. >> clean energy is selling right now at $2.20 a gallon and diesel is dirty and diesel is imported and diesel is just the worst fuel on earth and it took seven years for us to go from gasoline to decembiesel. it's ridiculous. >> speaking of nat gas, we're heading back to oklahoma where rick santelli is getting revved up about nat gas. [ female announcer ] the next generation of investing technology

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i'm rick santelli. we're talking about the challenges. turning out to be minor challenges of converting a pickup truck to run on natural gas. let's take a listen. >> well, i tell you what, we are actually doing well. we are ahead of schedule. craig wright and myself. what we've done so far is we'll keep it simple. we have the tank mounted and strapped down. we have the valve on it. we're making the natural gas come to the front. the whole trick is it's running on anything. whatever you get into it. the whole trick is, just getting the fuel into it. we ran the line and if you look up in here -- you don't need to know all of that. there's a coolant feature to this. we hook it up into the cooling

tank and all sounds pretty technical but it's pretty easy. as you can see, we have our vacuum lines all ready to go. so we're on schedule. the next phase will be to get the injectors that kind of -- they blow the natural gas into the cylinder for combustion and we're putting those on the rail and craig has a pretty neat invention to make these conversions so we don't modify anything. we can pull it off in half the time it took to put it on and we're good to go. jim, isn't this fascinating? what do you think? >> listen, you're doing patriotic work. what can i say? you're saying, i think it should be the way they make them. >> the whole point of this is to show that it's easy and extremely cheap, it's safe, and i can do it so, yes, it probably

ought to come down a little bit. >> well, rick, you're the first person who has done a piece on this. great job be. >> it helps to use power tools. >> the guy is a car genius. >> yes. >> >> the trading day is still young. a lot more "squawk on the street" straight ahead. monarch of marketing analysis. with the ability to improve roi through seo all by cob. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. i'm going b-i-g.

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all right. time for stocks in 60 seconds. google with higher than expected earnings. >> frankly, i'm more worried about mobile than i am for cost and play. >> limited brands price target at rw baird. >> under armour upgraded to a buy from neutral? >> a stock that i absolutely

like but this -- an upgrade shouldn't have been done here. >> monster? >> this is one of the great growth stories of all. >> titan machinery? >> buying it ahead of the quarter, that's what goldman did it was a disaster. >> and bed, bath, and bond, this is a stock that had a nice run. >> the conference call shows we are down 1375 what sectors and groups are you looking at? >> they don't have europe.

i love the facts that everybody i talk to are universally bearish. suddenly it's terrible. i'm not buying that. >> we ratcheted down expectations. it may be better than expected. >> especially if the stock breaks through the nine level. this is something amazing. we have oil going down. it's possible that gasoline prices have peaked. it's a negative. this is the kind of nonsense that i see. oil is good, not bad. let's not be risk off, risk on. that is a made up turn. >> people are saying that we have high ger gas prices even

with the potential headlines of higher gas prices? >> yes. >> which one? >> it means that we are going to do better. >> which ones? because today they are all down pretty much. >> target had a very good month. that's worth looking at. costco was not that good of a month. i do like the limited which no one thinks about. it's a very expensive stock and best of all a risk off, risk on. it's across the board. >> sell the market when it's down, sell it when it's up,s that a strategy for you. >> it was mack droe. just because it goes away for a quarter -- >> how about if you just bought starbucks when it got week? did you notice how much money you got if you bought when it was weak? is that making money? i'm in the making money mode. these guys are theoretical. they should go teach.

i don't mean that as a debt pri meant to teachers who work really hard. >> of course not. >> tonight, "mad money," what do you have coming snup. >> i'm talking about growth. people fight it at every turn. wake up and smell the coffee. that's a hint. all right. squawk object the street. >> and we are in the midst of a pretty decent selloff. investors taking the weekend to ponder. as earnings season kicks off tomorrow, we will talk the latest market moves to the jim paulson of wells capital management. also, the ripple effects from the payroll data sending crude tumbling, what is the trade on

oil? dan, you're here to break it all down. plus, is going great to the source, fngs financials leading to help us lower. what is ahead? we'll tell you how to play those financials in just a moment. >> ford motor is recalling for a problem with the windshield wiper motor. >> right. treasury prices gaining this morning as you might expect pushing ten-year yields back 2% a one-month low, in fact. traders return from the easter holiday reacting to last week's highly disappointing payroll report. big rally. >> around 6% of the global

workforce, potential reductions with restructuring plan due to be announced at the corporate strategy plan on thursday. shares right now are trading just about flat. and it's been a victim of apple's success. >> so they would like to you think. in fact, half of the cuts i read are actually from units that they are selling off. they are double counting, in many senses. and the total is 26,000 and that didn't turn sony around. tech -- in tech it's clearly war about where your technology is and the cost of what you're making. >> yeah, you wonder how many is in the works and how much more we will see. sony has had its share of trouble.

i spoke about a treasury rally. it's been selling off recently until the rally today. excuse me for that reversal. >> let's talk about the markets trading risk off. the dow is continuing to slide lower. where should you be putting your money to work? jim paulson is wells capital management. jim, good morning to you. >> good morning. >> where do you think we are? how do you interpret today's selloff and the jobs report on friday? >> well, we had a 120,000 payroll gain and it's certainly a disappointing report when we were expecting 200k. had we had 200k for the month, it would have been the first month since 1999 that we had four consecutive 200k plus gains in monthly jobs. so it's -- it would have been an odd event indeed. it reflects the fact how

volatile that number is. i don't know if it changes the underlying message here of an economy that is still recovering. in the first quarter, for example, we created 200,000 monthly payroll jobs. that's the best job creation of the recovery. it's the only quarter of the recovery that we averaged over 200 for the whole quarter. and i do think with 2% job growth in the first quarter, 1% average hour work, we're going to have, looking at about a 3% gdp quarter, if we come in at that level, that will help this market at some point in the future. >> jim, i have thought this for a long time. we are dangerous investors overemphasizing this report. there are 200 million people plo employed. and we're messing over the miss.

when the flights are full and the restaurants are full, i don't think we should -- >> if you look at the entire package, adp was good, challenger layoff announcements were good, unemployment is good, components have been good. so i think this is more about a huge attitude and i'm curious as we get reports for the next month that are decent if this market continues to trade off or whether it rallies on to new highs, i would take the vantage i might move cash flow to the

sick la cal rather than a selloff. >> earnings is not supposed to be cellular. only three s&p sectors are going to see earnings growth by expectations. that's not good for the market, is it? regardless of what you think of the labor market, qe, or anything else. >> i think the thing that you said that is good, kacarl, ther is not much expectation for this earrings. it's modest. the good news is, that's what i hear the consensus expecting. so i don't know if it will be that damaging. if we have a decline in earnings, that certainly will pile on to the jobs report and create additional selloff pressures. we created earnings last year and we didn't get paid for it because the valuation went down.

>> what would be a reason not to, in your opinion? >> well, i believe before the year is out, the treasury will break above 3% and perhaps in the latter half of this year the stock market will indeed struggle. i don't think it's going to be gas prices. i think it's going to be interest rates that takes the steam out of the stock market. >> in terms of what the fed may do, do you see that to be supportive of a trend upwards for the market or do you read it

that it's going to be bad? >> i see it as additional money is presented the bampg reserve is not helping the economy. if they do more, i don't think it's helpful. what is bad about it, it will hurt confidence. they've shown a bit of confidence. >> jim, always good to speak with you. jim paulson of wells. >> still to come on the program, we're talking fueling the future all day long here at cnbc. we'll sit down with award winning energy author and chairman dan yergen for his take on the nat gas trade. if only you could see carl -- what is this? san ta santana? >> yes.

stay tuned.

eastman in a position to benefit from a drop in propane prices the stock is dropping.

boeing delivered 137 jets to customers versus 131 for airbus and shares of target downgraded to neutral. reporting very strong same-store sales last week. >> if you're just tuning in, let us kick off a special series today, called fueling the future and the future may be looking pretty bright for natural gas. well, if you're a consumer, perhaps if not you're a producer at this stage. our very own rick santelli is hanging out over at edmond, oklahoma, converting vehicles to run on natural gas. where are you now, rick? the tank is in, these blow the natural gas through so they can be burned in the cylinder.

and just to put one other thing out there, you said to convert this truck to natural gas, that is correct. but when you convert it to natural gas, it can still run on natural gasoline. that's absolutely key to realize. there's only one vehicle left and it's the honda. >> it's a honda civic ngv. >> but the problem is, why don't you think people are buying them? they only run on natural gas. i think this is great. i'm thinking it doing it to some of my cars. but the fact that it can do both on the fly while you're driving is amazing. >> some of my cars. obviously you have a fleet of santelli vehicles somewhere. rick, the only thing that slightly concerns me is the prospect that later tonight you or somebody might be home with a natural gas pipe and loading a tubing. how do you fill them at home?

is it dangerous to fill them at home? >> reporter: obviously there is one danger. we don't want anyone working on this that doesn't have the skills or the qualified person to soup advise. i've done a lot of mechanical work in my time. the filling is a piece of cake, simon. they make an apparatus that you install or have installed in your natural gas in your home. maybe you can tell a little bit it, craig. >> it's just a small pump that goes right off your utility line, the same thing that runs your furnace, stove, anything that -- an appliance that runs on natural gas, it feeds on that. >> reporter: and it takes a couple of hours. it's a high pressure system and your house is low pressure. >> you have to compress it so you have natural gas that you compress at home. i'm happy to pump it into a furnace because i can see it your honor burning. but trying to compress it into a cylinder t. worries me.

>> well, it's actually pretty simple. it's very much like -- have you ever gone to the gas station where you put a quarter in to inflate your tires, it's the exact same principle. >> all right. >> reporter: we're going to go to break and we're a couple more hours away from the test drive. back to you guys. >> thanks so much, rick. sticking with the energy trade, i want to bring in energy expert, author of "the quest," a well-known expert on all things energy. dan, good to see you again. >> thank you. good morning. >> do you care to comment on what rick is doing and the possibility that this could ever be done on a broad scale? >> yes. i think that the change -- the sense of -- we have quite abundant natural gas and prices are low. although i don't assume that they are going to stay this low. particularly in fleets, particularly in long distance trucks, i'll tell you over the

last year. >> at the time you recognize shale as an important contributor to energy supply. do you think it is getting its fair share of attention from the administration right now? >> i think there's been a change over the last year, year and a half. and i think you can see it in the president's state of the union address. it's created 600,000 jobs in the last few years and it's seeing now a fuel not only of our economy but of america being more competitive in the world economy. >> daniel, in terms of natural gas becoming more viable as an alternative to regular fossil fuels, how much does the spread have to remain between crude oil and natural gas in order for the

private sector to be sustain blee interested in putting money in that space? either through infrastructure or just creating filling stations out there? >> it's so interesting to see the change. i already see it. at the conference we had the ceo of shell talking about putting l and g stations along highways in canada. so i think it's happening and it's being driven by, as you say, this great price disparity. even if natural gas gets out of the seller where it is right now, and it's still a relatively low cost fuel, i think we'll see more of it at the edges of central power and manufacturing. >> there's been some company cans that have not gone well. would that be used to further nat gas? >> what we've seen is the low

cost of natural gas has really changed the kind of economics of the bhoel energy marketplace and it does make it harder for renewables or puts more pressure in terms of competing as it does with coal and i think just the power of supply, the scale of the supply will continue to work. and the president of brazil is here in washington. i'm going over to the meeting a little later this morning and certainly the focus on domestic u.s. oil production up 20% since 2008. so there's a different perspective at work. >> dan, i'm curious on your thoughts of how long it will take nat gas to get down to production. we're hearing about cuts being considered for the future and a

switch from power plants come back. >> we're looking at 2 and $2.50 on average. a lot will be determined by the weather. we're about 15% warmer so two things will have to happen. also there has been enough to have an impact. so for probably a year we'll be in this surplus situation. >> you've got that right. thank you so much, dan. appreciate the time. >> we want to take a check on where the markets sit right now. we are in the midst of a pretty good selloff. we're seeing pronounced weakness as well as consumer discretionary. bank of america is down 3%. citigroup is down by more than

2%. let's take a look at these movers. aol selling 800 patents to microsoft. that stock is up 40%. down 2.5% and in the green it's tratding higher by 7 cents a share. we're going to talk to a man in that trade. a squawk on the street exclusive is next. >> i think risk is coming back into the markets. low interest rates are having an impact. >> last quarter was better than people thought. the u.s. is not in trouble in the short term. >> largest market right now, china? >> china was lost. >> jamie dimon's annual letter to jpmorgan shareholders was a

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a live picture of the white house and the easter egg roll. >> the easter egg hunt. i think the roll was yesterday. >> oh. >> even though easter was yesterday. in the uk, simon, apparently they are still selling it. >> across the entirety of europe almost. it's still a public holiday. >> easter monday, yes. >> wow. who knew? let's take a look at the markets. >> the easter bunny. >> any way, on the markets, it's been quite a rough open. it's interesting to note that the nasdaq is up 17% even with the losses that we had today.

the s&p had a 10% gain. technology might have to decline 7%. then the question becomes, should you be rotating into those. >> right. >> this increases the possibility that we get qe 3. doesn't the market do better under that scenario? to jim paulson's point, higher rates is what he's worrying about. >> that's true. that would definitely get some people's attention. meantime, commodities as the markets are risk off, although a bit of a bounce here.

silver is down, as well as copper. i want to show you how wti, brent, nat gas is trading. nat gas may bottom out as we look for places to store it. >> friday's jobs report is seeing a serious slowing but is that enough for the fed to consider more easing? we're going to go to alfred broaddus. stay tuned. >> announcer: want more "squawk on the street"? no problem. talk to us any time. e-mail us at sots at cnbc dotcom. and get our twitter updates they have names like idle time books and smash records

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one hour into trading on this monday, here are the stories that we're squawking about. aol planning to sell more than 800 patents in a more than $1

billion deal with microsoft. bloomin brands in common stock and ford recalls more than 140,000 focus cars from the 2012 model to repair a possible problem according to u.s. safety regulators. >> let's check back on where we are. a rough open. f financials leading to the employment report that we had on friday. let's look at the breadth of the move and you'll see down here at the nyse, it's five to one. declines to advances and over at the nat gas. let's go over to chicago. kevin is a senior market broker. does this feel like something big to you? >> you know, i think one month

doesn't make a trend. that number wasn't good and i think it makes the april and may unemployment reports just that much more important we've seen bond lower and i think it's going to be important to watch inflation numbers that's going to make a difference longer term. i don't think this one number can make a difference in terms of the numbers. >> do you see the fed restraining itself or do you think they would argue a much longer game? >> i think they are playing a much longer gain. in the last meeting minutes there was discrepancy whether they should or should not do more easing and i think they are going to assess how they are doing and if additional stimulus is needed so they don't --

>> so what can traders do now? >> we had a great quarter for the s&p 500. we are seeing that correct a little bit. you can see things pull back 5% or. so that's not unhealthy. that's looked at as an opportunity to get in. right now you certainly have to protect yourself a little. >> kevin, have a great week. thank you. >> you, too. thank you. we have a full week of economic data ahead of of us. clearly the fed will be focused on that. will it deny the weakness signal by the disappointing jobs numbers? steve liesman has a preview. good morning, steve. >> yeah. simon, i want to continue the conversation that you were having. what would cause the fed to want to do more stimulus or not? and i think one of the questions asked is, nick, come over here, let's zoom in at the recent history here. we were up 200,000 on jobs and

then we came down is it the recent past or how about where we were in a reasonably strong jobs market and that led to worse where you had monthly changes that were more than 200,000 below the trend. now, i want to take a look at the next chart. one thing that we're watching is claims. it's all we have between now and the actual jobs data. now, what are we looking at here? we're looking at 355 and you can see that goes along with reasonably strong payroll growth. come back over here. we ticked up above the red line. it was 400,000. let's go on. the jolt survey job opening in labor turnover. simon asked about inflation. cpi is something that will limit how much the fed is going to say if they are running hot, they are going to give us less

information. retail sales, critical information on the consumer and then claims back here on the 19th. a week full of fed speak bernanke today, i wouldn't count a lot on that. the vice chairman of the fed and bernanke at 1:00. one i would watch closely is nick right here on cnbc. the vice chairman can often be an advanced guard. i'd be listening close to that meeting. operation twist runs out. melissa? >> thanks so much, steve liesman. let's get more on whether qe 3 is more likely than ever before. let's bring informer fed president of the richmond fed.

alfred, it's good to speak to you. have they increased based on friday's jobs report? >> i think certainly the possibility it has increased somewhat but i don't think it's done at this point. i think what is going to have to happen is for the incoming data that we will see over the course of the neck several weeks to give some confirmation in the jobs number, you mentioned a claims data. i think any information that the committee gets on consumer spending would be high here. the probability is less than 50% at this point. >> i think a lot of investors are keying into the friday's job

number because there is a belief that they would have to act by june in order not to be caught up in the election come november. are you in that camp as well? the fed won't do that. >> a lot is made of that and it has been over the years, melissa. i've never, in my experience at the fed, certainly not explicitly. it doesn't seem to play too terribly importantly and obviously there's a good reason for the fed to play quiet in the immediate runup to the election. but there's a lot of time between that and now. >> yes, and importantly they are indicating they are likely to have qe or not qe. any time we get a statement, generally the fomc seems to be hawkish and then typically bernanke bounces out and he's a

bit more dovish. would you want him to raise the prospect of qe on the basis of what happened on friday? >> i think he will be very cautious. i don't think anything very explicit will be made at this point. essentially it demands that. it's very uncertain at this point. so i'm not terribly surprised about that. >> qe 3, we believe, will be the buying of mortgage-backed securities. will that help the unemployment situation, do you think? >> you know, the link age is a pretty long and complicated -- you know, if the economy were really beginning to enter a phase of significant weakness it was going to show up in the

labor and i don't think that is clear yet. the huge amount of liquidity that the fed has put into the system is going to have to be taken out. it doesn't look like that's going to happen immediately but that's something that the fed has to have in the back of it is mind and that may argue against, you know, any sort of haste in doing qe 3. so -- but, again, the key point that i would make is, this numbers throws a bit of a monkey wrench in what we thought was a recovery. it's only one monthly datas, as many people have already stated. one monthly data point. so it doesn't really make the case in and of itself. there's going to be a lot of focus within the fed in the next

couple of weeks. >> alfred, thank you for your time. former president of the richmond fed. david? >> okay. for a look of what is driving the decline today, bob pisani joins us. >> and -- standing next to you. if it's a disaster, it's a pretty large disaster. the dollar is about flat. commodities down 1% and overall it's pretty modest and as people suspected, we hit our bottom right after the open and it's come off of that. not very much but we're off of the bottom and a lot of talk about the bernanke put or greenspan put. and obviously we will be down on the day and if you look at the broad sectors, home business as well. sectors have been running up on hopes that the economy will be proving and consumer

discretionary, the same problem is going to happen with retail. we borrow from march the gains we had maybe now that we've seen it with some of the other sectors, that's not happening today. very modest selloff. i wanted to mention the builders because as i discussed this morning there is biforcation going on. you notice the distinction here, the entry level builders are down a lot more because of concerns that first-time buyers, much more sensitive to jobs and the move-up buyers may get hit more. interestingly, if you look at the do it yourself crowd, that may hold up a little better.

sher win-williams dramatically raised their price target. you know why? do it yourself is up in a big way look at the material sectors so we are getting the biforcations in various segments of the market. >> bob pisani, thanks. the markets are leading lower on the back of the jobs numbers on friday. what is expected ahead of friday's big earnings reports? we'll get your bank trade in just a moment. first, we'll check in on rick santelli as he's in the midst of switching the ford f-150 gasoline engine over to nat gas. what do you have in your hand, rick? >> well, i tell you, we've dumped all of the piping that moves the natural gas. now we're going to be moving into the wire loop. when we come back, we'll show

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as bob was suggesting just now, given what we missed in the people badly on the employment report on friday, the market has held up reasonably well. the dow is down 120 points. the breadth of the move is quite broad. >> all right. here is a stock to watch. rangold resources, and ebay a topic. equity, the firm remains most

positive. and 2012 and 2013 earnings raised at wells fargo. the rating is now performed and the stock is lower today. >> i want to go back to oklahoma where, rick, as you just saw is rolling up his sleeves to show how easy it is to convert a car to natural gas. how is it coming along? >> reporter: it's going great. a quick summary, we put the tank in, where the natural gas goes, lines go underneath that run the natural gas up to the front to a regulator and suffice it to say, that's kind of the quasi cuberator, so to speak. we ran all of the lines for the fuel injectors. here's the new fuel injectors on top of a custom made and the plug for the injectors, it gets between the old and new. what does this mean in english? it means we have not cut one single wire, we haven't changed anything. this is add on.

so we take one wire harness and substitute it with another. all precut, premeasured and ready to go. and this is kind of the middle phase. so i would say we're about halfway through the process at this point. how many glasses do i have, i feel like a commercial. >> rick, assuming you could get the labor for free, how much money will you be spending on this conversion? >> reporter: this conversion, if we were to bring our own f-150 in, what is the whole thing going to cost to do this? >> about $9400. >> including the tank. the tank is by far the most expensive. it's real safe. it's made out of carbon fire and would withstand impact. it's a pretty impressive tank. and we just had a gentleman that owns that vehicle who says he will pay for his full conversion. but he drives a lot. about 600 miles a week? >> yeah. we converted one earlier in the

summer and he was on track to pay it off in seven or eight months. in through or four months it was paid for. >> there you go, carl. depending on how much you drive, even if it took me three, four, five years, it's really cool. it's simple and good forth environment. it's chip. 66 cents a gallon when you pump it from your own house. >> if you can get the labor free, that's a big if. not everybody has a rick santelli on stand by. >> go ahead and submit e-mails. i'll help them. >> don't do it at your own home. >> thank you, rick. >> stops made at your home soon. ahead, we're going to breakdown the banks ahead of friday's big earnings numbers. stick around. we're back in two. [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪

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bank of america, it is going to be a big week for banks j.m. morgan and wells fargo. as you saw on the back of

friday's weak jobs numbers the financials are leading the market lower so far today. so far this year the kbw bank index is up 5%. should you be banking on the banks and which ones are your best bets? good morning to you. >> good morning. >> how exposed should people be if they are sitting ing bank of america which is up 65% so far this year. >> bank of america is a name we are avoiding. we think there is still a lot of outside liability with that company even they could make money we don't think they are reserved for the litigation coming down the road. the companies that we really like are the companies highly exposed to mortgage banking like j.p., morgan and wells fargo.

those should do well. >> that said i have a bunch of your research notes from the middle of january. the big guys, wells fargo and j.p., morgan have hit the targets. it's pnc of all of them that is not. >> pnc is struggling here a little bit at these high levels. i think there is a lot of skepticism out there on earnings. a lot of people think pnc earnings are going to be relatively flat. we think they will continue to outperform on the earnings side and when they do that stock will pitch a bid. >> the times has a nice take on comparing b of a to citi group. what do you make of that notion? >> i think both companies will

continue to struggle. they both don't really make a lot of money. i think they are going to be flip-flopping back and forth on what is favorite. i think with the stress test b of a is better to pay a dividend a year from now but has a long way to go. >> if i had to pick one bank to sit in, perhaps if i wanted to buy a bank stock for my children, what would be the top pick? >> i think wells fargo. right now they are really dominating the mortgage banking. >> even if they go on an acquisition spree abroad? >> i think they will be more focused on returning capital. they never been on an acquisition bid abroad. >> have a good week. thank you. it is tweet time. aol is in the news this morning after announcing it is selling

more than 800 patents to microsoft today. that brings us to the squawk on the tweet. with aol, what do aol, the letters really stand for now? tweet us. we are curious to see what you think. your responses straight ahead. [ male announcer ] you are a business pro.

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tomorrow on "squawk box", larry lindsay, former bush economic counselor, the politics of unemployment.

>> and we'll have donald trump. >> he's always great. get the ""squawk on the tweet" aol announcing it is selling 800 patents. we ask what do the letters aol really stand for now? johnny writes all out of luck. vick writes another online loser. a little harsh considering the growth of huffington post. >> a lot of their strategy is built on the success of patch and trying to replace so many newspapers no longer with us on the local level. this deal, of course, you can't say enough. very, very few people expected to get near a billion dollars in

proceeds. >> do you know that sheraton mckoyacktually owns four u.s. patents? she is a former chemical engineer and owns four patents. >> i'm sure those are complex patents. >> before that she had a degree in textile chemistry which i believe is similar to tie dying. >> kind of mixed notes in terms of her appointment from the analysts that follow the company. it is unclear they can do anything. they wanted to come before they appointed the ceo. >> she could help with the acquisition. >> if you are a new ceo taking over you want to try to turn around a business. you are not going to sell it.

>> tonight on "fast money" we are speaking to the global head of android partnership at google. we are seeing stocks move higher. that is all tonight. >> see you tonight. let's get to the third hour of "squawk on the street. 'here is what you might have missed. >> welcome to hour three of "squawk on the street." here is what is happening. >> it gives us the opportunity to sell assets that we were not using. >> this is by any definition in american history of the worst recovery we have had. and it seems to me it is policy. >> i know this is the seminole piece of data is everyone is going to want to sell. i see a lot of people on twitter

saying, is this the time to panic. panic has never been a good strategy. >> people love their apple plugging into their other devices. i always have a hard time selling a stock that is ten or 11 times earning. >> avon named sharon mccoy as new ceo. she will take over april 23rd. andrea young will stay on as chairman for two years. >> how can it be that she is an executive chairman? what do you have to do to lose a job at that joint? >> st wasn't that long ago 120,000 payroll gain would have been a good thing. it is disappointing when we are expecting 200 k. good morning. largely a sea of red. markets heading for the fourth negative session in a row. the dow down 139.

s&p 500 down 16 and change. nasdaq down a little more than 30. molly corp up nearly 6% on news that the california mine has risen 36% which can help. other stocks, ea, radio shack, peabody and devry. tell us how to play today's selloff and an interview with the ceo of anadarko. while we are hard at work the europeans taking a vacation. while they are taking a break we are going to take a jump start and talk europe and global markets. rick santelli is heart at work

changing an engine to nat gas. first steve grasso, director of institutional sales, good to see you. welcome back. >> rick is heading to my house to transfer my chevy suburban. i e-mailed him. >> how much concern today? natural? >> if you look at what we had last week we had four days of action. we had the terrible -- i shouldn't say terrible number. it was way below the estimates. that is what you are seeing in the markets today. is it an overreaction? possibly. you have to look at the 1370 level. you and i discussed that level. that is the line in the sand to watch. >> it is disheartening to think that we have come back to that

because we have spent so much time dancing around 1370. >> it is but on the way up when we discussed 1300 s&p 500 it was a huge level. a break above that level was good for 50 handles, basically. break below good for 50 handles on the way down. before you start shorting this market you have to think about it and say i want to see that break of the 1370 level. i want to see 1370 break. >> if you are going to buy growth at a discount or buy some sort of qe bounce in advance you have to be more patient than buying right now? >> i would think if you suggest to anyone entering never want to do it in all one lump. >> do you think there is the hunger for that given that europe is rearing its ugly head? given that the earning season is

not expected to be gang busters? given what happened with jobs and the earn cans over the labor market? is there enough there to keep appetites from getting wedded? >> i think that is the major importance of the 1370 level because it is not the end all be all. what was the reason we rallied? greek worries dissipated. now we are talking about depression and not recession. that's huge in europe. look at the unemployment rate in spain. 24%. across the eurozone i believe we are at a 14 year high in unemployment. is there an appetite? i think you have to wait. >> bernanke is going to speak tonight. is there enough rhetorically they could say to provide some support we are not seeing? >> i don't think so because we

factored in qe 3. i think if you have true worries on the eurozone once again that would be intsir mountable. >> good morning. a lot of stuff you and steve were chatting about. there are a lot of things we risk on and risk off. how many people talk about risk on and risk off. there is a great piece about that very phrase being used and not used. we also hear beginning of every month this is the most important jobs report and obviously the jobs report having an impact on today. i am one who overuses the phrase respect the technicals. look at this chart behind me. this was in the wall street journal piece today talking about earnings season starting and looking at the s&p 500 versus earnings. what we have here is basically

the bottom here these are the expected growth rate and s&p 500 earnings for the first quarter. let's see if i can draw here. you get the point on the chart. and if you look at the s&p 500 on the top here this whole area call, we are just drawing here. try again. sorry, guys. the point is very simple. these two lines if you went back and looked at 20 years call you have to have some sort of eke e -- analysts estimates for this quarter's earnings are very, very conservative. we have had tremendous upsides of price. i can guarantee you in the next four weeks and change one of these lines are going to come up or down and will have to meet

because history tells us we can't have it the way it is. >> hard to read whether analysts are under estimating what earnings may do. >> anyone will point out to you that the s&p 500 based on trailing numbers and somewhat muted growth numbers the s&p 500 is not expensive. the earnings estimates that you have here now are just not -- the stocks are way ahead of the earnings estimates unless these are too conservative. sorry i couldn't draw on this. i was trying to make it work. i'm going to get in trouble on why i couldn't make it work. >> let's head to edman, oklahoma. rick santelli. >> we exchanged locations. last time we were on i had the

big spaghetti harness around my neck. you don't see it around my neck anymore. here is where it is. all the wires we connected to the natural gas injectors, we made them nice and pretty, twist ties, plug and play. we have a couple of other components left on the spaghetti. here are the modules that go into the computer for the engine and those are the last plug ins. we are very close to the electrical side being complete. so to summarize we put the tank, ran the lines of natural gas. we ran the regulator and did the electrical part. now is a matter of cleaning up and putting final apparatuses in and dealing with the interface to the computer. it doesn't change it. it just interfaces with it. this is one of the coolest santelli exchanges i'm going to

do. >> are there limits to the type of car you can do? >> the interesting thing with pickups is you can go with big tanks versus smaller tanks and have easy places to put it. the smaller the car then you have issues. we did see a couple of great fans e-mailing us. somebody had a smaller late '90s lexus and the trunk went back towards the back seat and fit in. so it is really an issue of how big of a tank and where you can put it when you get into the smaller cars. >> you will finish up this afternoon. there was no prep work in advance of this. this is literally how much time it is taking you to do it from start to finish? >> we took off the hood beforehand and we had a couple of holes drilled in the bed for the tank. other than that it has been on the fly. if he was installing it on this

truck, kraig wright, he would be about half hour ahead because i have slowed him down a bit. >> unbelievable. this is trully the year where nat gas becomes a surface fuel this tip is very, very important. we'll come back to you later. rick santelli in oklahoma. >> the push for nat gas becoming stronger all the time. is the auto industry ready for this exchange. live at a nat gas station. >> reporter: the auto makers are ready but i'm not sure the public is ready. we are at two nat gas public fuelling gases. 2.65 versus 4.65. hereser the problem with the infrastructure issue. look at the number of service stations that sell gasolines

versus the number with nat gas pumps. just 505 here in the united states versus 157,000 service stations selling regular gasoline. service station owners are hesitant to invest in cng pumps because not many people are looking for this gas. most of those are fleet vehicles. there is only a limited number of cng powered vehicles for sale. as a result, when you look across the country, if you wanted to drive across the country powered by natural gas it will be tough because there are six states that do not have a single public nat gas pump. down about 48% it is far cheaper to fill up on nat gas. it is a chick and an egg issue. if you don't have the pumps you

don't have people buying the vehicles. as a result you need one of these things in this equation to change. the auto makers are saying until they see more pumps and more infrastructure they are not going to build a lot of nat gas powered vehicles. >> we went through this with plug in stations. we'll see who jumps first. when we come back the chairman and ceo is here for an exclusive interview. we'll talk about gas prices and more. you know, those farmers, those foragers, those fishermen.... for me, it's really about building this extraordinary community. american express is passionate about the same thing. they're one of those partners that i would really rely on whether it's finding new customers, or, a new location for my next restaurant. when we all come together, my restaurants, my partners, and the community amazing things happen. to me, that's the membership effect.

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theme we happen to have another exclusive interview. joining us the chairman and ceo. i don't know if you have been able to see it all but we are playing this game with one of our correspondents, rick santelli trying to show how easy it is to convert to gas. there is so much talk about the promise of nat gas being a true transportation fuel. is this realistic? >> i think it is absolutely essential to the country's future. not only do you have this

wonderful events where utility rate payers are saving a thousand dollars a year on gas bills but you have an opportunity to use it in the transportation sector to displace oil. we should have been doing this years ago back when we were throwing stimulus dollars on corn based ethanol we should have been doing it on natural gas. i drive a flex fuelled vehicle already. it is not convenient to the residential consumer but it will work for heavy duty fleet and light duty for sure. i think it is a great answer. >> when and how does it go beyond municipal fleets, buses, things like that? when does it trully become a consumer product? >> the way to solve the chicken and egg i think is put the highway infrastructure in first.

the industry with private equity can get that done if they have governmental support. you can get after the supplies to continue to provide that to the transportation sector. so i think for a very reasonable amount of money without a lot of fiscal stimulus you can get the infrastructure built and work on the truck companies to get the units converted. i think this can be done in the space of three years with any kind of real effort and policy commitment. >> that is an aggressive time table but if you say it can be done i'll take your word for it. nat gas at a ten year low. more production cuts on the way. any impact on the price of nat gas on your view? >> ultimately it should recover. it is a very low level. made us the second most attractive destination for industrial siting for

fertilizers or petrochemicalsism these things magically happen with change. what will happen is we will go to a number that is reasonable for supply and demand. i suspect that it will be somewhere in the four to seven dollars range. for the average consumer to convert that to meaningful that is $24 to $42 per oil equivalent. this stuff is cheap, cheap, cheap even with increased demand. once the prices recovery more will come back so you have this overhang of a lot of drawing. it will equilibrate and drilling will come back and keep it at an affordable and scalable price range. >> you mentioned crude off more than $2. now below $1.01. given the dynamics out there the possibility of an spr release,

demand destruction, where is your target for crude going out? >> we drill on less indicates. 90% of our capital is liquid spending. we need to as an industry and country and world need to find more resources. our commodity spends over a billion dollars a year doing that. this is a respite. this is not where this price deck will end up. we need to continue to fight this model. we as a country can produce twice as much oil as we are producing if we have the policy support for doing that in the next 20 years. that is natural gas can get us largely independent of foreign oil. we need to make it go down. you don't want it to be too high. it is not a good answer for the world. >> when you say respite are you saying we should brace ourselves for something -- the lumberg

survey today, $3.47. >> if you had to get on whether oil is going to trade a lot below 100 or above in the next four or five years i would bet on the latter. >> i know a lot of discussion and you guys are vocal of making sure fracing as it is known is done in an environmentally sound way. tying fracing to the occurrence of earthquakes or seismic events. do you buy into that science? >> gentleman named ellisworth thinks he doesn't think it is the cause of it. it is on the mexico line with texas or colorado and no evidence it is causing it. certainly there are tremors distinct from earthquakes caused by injection wells not just from our industry but geothermal.

you are putting high pressure fluids into the ground. these are not things that cause disturbances of the surface and harm to individuals or property. as a country we can continue to live by fear or by science. i prefer to live by science because it will make america competitive and successful. >> always enjoy your time. thanks for seeing us again. got a quick check of the market the dow down. s&p 1370 which if you recall was a point of support and resistant for a long time going back over the last four to six months. we'll see if there are winners out there on such a negative day. we'll be right back.

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get a check on the markets on this monday morning. the first chance for the markets to react to the rather dismal job numbers. 166 on the dow. now down about 152. all 30 dow stocks in the red as of this moment. a tech stock, apple between gains and losses after a downgrade over btig. some had taken it as a challenge that was vested. in this case trading close to the flat line of 633.74. one of the few gainers. low nat gas prices mean good things for chemical companies including paying companies.

that stock is up almost 1%. coming up next the europeans take ag day off today but we are not. we are going to use this extra day of work to get ahead of our friends overseas. we'll break down global market currencies and all things europe when we come back. a route map shows you where we go. but not how we get there. because in this business, there are no straight lines. only the twists and turns of an unpredictable industry. so the eighty-thousand employees at delta... must anticipate the unexpected. and never let the rules overrule common sense. this is how we tame the unwieldiness of air travel, until it's not just lines you see... it's the world.

five, four, three, two, one. european markets -- >> not so fast.

the european markets are already closed. that won't stop us from the job at hand. while they are enjoying the holiday across the pond we are getting ahead of the game. watch as we break down global markets, currencies and much, much more as "squawk on the street" continues right now. >> the global markets report is taking off with them. get another check on the markets with the dow down 153 and s&p down about 18 and the nasdaq also in the negative, as well. been watching this sell off and trying to get a sense of what it might mean when we start getting real earnings reports. >> that equilibrium has to balance itself. i'm not certain how it is going to happen. i can guarantee you on may 15th we will let you know how it happened. i want to talk about the euro

market here. the markets are closed today. did you catch "60 minutes" last night? "60 minutes" did a piece on the euro crisis as theytyp typicall do. they try to explain what is the euro crisis. if you watch the piece much like what they tried to do on the municipal bond market it has a lot of points but very opinionated. it basically said everything that has happened in europe is the fact that the southern nations have taken on too much debt and the germans no longer want to bail them out. if you watched the piece and you didn't know anything you said germany is bailing out all of europe and the world is going to depend on whether germany wants to continue to do it. it was an economist on the program. he has already put out a press release this morning because he

does not like the way the edited program presented the facts about how the euro crisis begun. what i found interesting was the fact that the greek proposition was we took on a lot of debt but th the germans have benefitted greatly from the production of the euro. they have sold many productwise the money that the southern european countries borrowed. to all journalists reading this and who may be interested on advice on how to report the euro crisis please see my article which was commissioned by the british journalism review. bottom line is simple. you watch the piece and see the reaction, this euro crisis is not going away anytime soon. >> that is the fear, that's for sure. >> when journalists are told how you are supposed to report the crisis, guess what, crisis problem not over yet. >> that's a good way to look at

it. >> in 2008 we had the saying when delusion is the solution you are not at the bottom. when people appearing on programs say you are not reporting the crisis right you are not at the bottom. >> don't go too far. >> if this is a disaster it's a pretty modest disaster. it's a low volume selloff just north of 2 billion selloffs. that is hardly a major selloff. that is modest volume. you want to look at the major sectors. the russell 2,000 down about 2%. goldman sachs had a very bullish call on march 15th. they said we are going to get better macrodata. the important thing is they tend to outperform more when the u.s. economy gets a little bit better. they have ended that. ended that bullish call on the

russell 2,000 on the basis that maybe the macrodata is not p panning out. russell has been notably under performing. russell has done just about the same as the s&p 500. it is a little bit under performed because of its decline today. you can see up 8%. the s&p up about 11%. talk about other things. i'm a little concerned about what has been going on with apple. i want to show you something and nothing to do with the downgrade. as apple has moved up 50% since february, the volume has moved up almost 50% in apple. apple is one of the only stocks out there that is actually having volume surges. look at this. the six month average, 17.5 million shares. in the last ten days, the ten-day average has been 22.5. this is a little bit of a concern when you get the stock

as big as this. not only sucking up the market capitalization but ucissing up the volume. in other words, there is a lot of risk sitting in apple in terms of amount of trading and terms of the market capitalization. home builders as expected we had concerns about first time buyers perhaps having some problems with their jobs. entry level builders like kb home and hovnanian doing a bit worse than lennar and toll brothers. the bottom line is it is certainly not a great day but no heavy volume sellout. watch the volume in apple. >> watching apple and a few other things. the europeans are on holiday as we are dealing with a less than stellar jobs number on friday. to decide the eurozone's

benchmark refirate. recent economic indicators suggest headed for an official recession. could u.s. weakness accelerate their trajectory. simon hobs also joining us. even though things may be range bound, go long euro? >> we like euro a lot. as pressure hits the eurozone you find if investors aren't buying the euro central banks are. the survey came out that showed euro purchases by banks are up 8% year over year and shows the central banks are protecting the down side in the euro. you are not going to see it go much further. >> you should see the dynamic you see in the markets. you see it has everything to do with the chinese fix.

can you talk us through that. >> china fixes currencies very important. if they strengthen overnight every country in asia allows their country to strengthen by several amounts. strengthens to thailand and buy dollars to sort of stop that move. they then sell the dollars in the market and buy euros. it means a lower dollar china fix mean as lower dollar asia and a lower dollar net in general. we see that consistently. >> we are going to get numbers this week. let's hope that doesn't strike fear. >> the bigger number is the gdp number. i like many thought you would see a seven handle for gdp growth. it looks like we will come in above that right now. like any sort of china data point we have to remember that nine guys in a room are deciding

what growth is going to be in terms of forecasting it. you are really just playing sentiment than a material number. >> how much do you think the last four sessions have been about spain here? >> i think certainly that's part of it. something simon and i talked about last time we were here was the extrapolation trade that central bank liquiddity as eased concerns. >> you said your point was not that. you feel the markets will fall. you have a long list of why the market will be lower by the end of the year. >> lower than where we are. spain was an important part of that. everybody says it checked global economies into a methadone clinic so to speak and we sort of pushed underneath the headline some of these pressing concerns. you have seen a reemergence of

that that spain would come back to the floor. people ask jim rogers where gold is going. i did know it would be a problem. it appears to be now. >> so are we just left to deal with the dwindling effects? >> put things on hold for three years. over that three year period europe will be working hard to change the fiscal efforts. it's a life support for that. it is euro against the u.s. the u.s. has had the life support of qe yet to do the fiscal situation. over the next three years i see europe fixing their fiscal situation while the u.s. manages to put it off. >> with faster progress than ours? >> they are progressing. they started. >> what is your view of the fed? >> i think the fed qe 3 really is a way or the discussion of qe 3 is a way to look at the effect of the united states. equities were to take a down

move of 300 or 400 points you would see that talking about qe 3 how it is on the table. if the dollar was to strengthen you probably also hear more from the fed. >> for how long do you think the fed would be engaged in qe in some form? >> i think qe 3 on the table will be there until the euros are 150 or 160. the stock market is higher until pension funds feel like they have gotten back the dollars they have lost in 2008 and 2009. >> that could be a very long time. >> 151.60 on the euro. that's a long time. the underlying point i want to reiterate something i say all the time. we talk about qe as if it is a newly invented esteric. you are cutting interest rates. i don't think anybody would freak out if the interest rate was cut.

>> unprinting money. this is a long term devaluation of the dollar to help america sort out its problems. >> we have had a weak dollar policy in the united states since 1985 that goes beyond anything the federal reserve has been doing. google the accord. we do not have a properly run country. if you don't have a properly run country you won't have a properly run currency. >> thanks so much, guys. we are going to check in on santelli switching the gasoline over to nat gas and get an update on the progress in two minutes. insurances that we're going to have you taste. the first one we're 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.

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it provides bay leaves for every one of my restaurants. the customers, tools, and insights to help grow your business. that's the membership effect of american express. welcome back. two big tech calls on the half time report. apple gets a rare downgrade from the same analyst that put a $100,000 price target on quaalcomm. we'll talk price line with the analyst who says the 60% run isn't over. and should you buy today or pull back? >> look forward to seeing that.

take another rick stop and head to oklahoma where rick is working hard converting that engine to nat gas. where are you? we are about wrapping up the electrical side of this. you saw the harness looked like a bunch of spaghetti. it is all beautiful tied. here is the ecn, electronic control module. here is the original. we don't thinker with anything original. this is an add on. we plug it in. done. the next step is we have a switch we run inside the dash to hit a button. we are going to do that a lot. and then this is a first. never before has any kit ever had this. natural gas is dry. gasoline is wet. so there can be issuewise the engine. kraig, explain what you have kind of invented here. >> it is an additive that supplements from going from the dry fuel to the liquid fuel.

if you see tech ron with chevron, they add additives into the motor. when we switch to dry gas that valve is no longer getting lubrication. this is the dosing pump. it ties with our natural gas system only and allows this product to meter into the dry gas. >> so in essence if we are looking at just internal combustion in a macroway this engine is going to be better cared for than a gasoline engine only? >> i'm so confident about it we'll give the customer 100,000 mile warranty on the valve and valve seats. >> many manufacturing warranties -- >> they won't warranty it. >> there may be very few infrastructure stations out there for nat gas.

if you own a house and you have a gas drier or gas connection to your dish washer or water heater or furnace you can be a gas station. that apparatus costs about how much? >> there are variables but between 7 and $12,000 for the unit for home. >> and the prices have been been going down? >> on those units they have. >> people buy them and prices go down. you can have the loop from using natural gas which is cheap to filling it up on your own. >> who knows what prices may be tomorrow when people get more information on it. when we come back aol, remember them back to being relevant and popping more than 40% this morning. could the company's billion dollar patent deal be the start of something bigger? we'll talk about it after a short break. zap technology.

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here is a look at the markets this morning and a look auto aol getting a boost after announcing it plans to sell more than 800 patents to microsoft. david joyce is the media analyst joins us this morning to talk about. if anybody knew that these guys had anything worth a billion dollars plus. >> clearly the stocks reacting to a much larger than expected deal. there had been a chatter of aol hiring advisers to look at the value they could get for patents. aol has patents dating back to the development of the consumer internet. some of those infrastructure related patents is what microsoft was seeking. microsoft trying to gain long term access to advertised related patents to web mail related patents. this is more than just a one time sale of patents. there is a greater possibility of the other 300 license patents

as part of this deal to be licensed to other internet-related companies. i think that is why the stock continues to move up today. >> you reiterate your buy and move your target up to 30. to what form does this get returned to share holders? >> if you look at where the stock was trading based on last thursday's trade it was -- if you have the cash they are going to get from this assuming it closes late in 2012 they could be sitting on about $15 per share in cash. not all of that would be distributed but the board indicated that they will still determine the best way to return capital to share holders. even just based on putting that cash into the company's balance sheet that means the stock is changing 1.5 times. getting back to the valuation

last thursday that is $30 a share. not to mention the other upside of advertising and license opportunities for the other patents unlocked here. >> do you think there is a broader structural story here in that domestic display is growing? they have taken criticism for the way they spend cash and how much they pay, what secular upside story do you see? >> they are still losing money on hyperlocal internet businesses such as patch.com. consumer usage in there for ad revenue. huffington post continues to do well in the user metrics. they had been spending money on the infrastructure that you don't see as a consumer. there is a lot of work to integrate the platforms to create better advertising tools

for the advertisers. that has been showing up in financials in terms of growth of their display advertising. i think they are still in the early innings. >> not that anybody who is a share holder minds but do you think microsoft overpaid? >> i don't think so. microsoft has bought some other internet advertising related entities in the past. it's an area where they want to continue to grow. media generally is an area that microsoft has had a lot of interest in and have had plenty of time to do due diligence on these assets. they know what they want and i think they will have their opportunity to get their economics out of it over the long time. in the meantime aol is still protecting itself because it is licensing back what it thinks it needs from the patents it sold to microsoft. >> thank you very much. >> speaking of aol our twitter question for the day we are asking you what do you think aol

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aol back in the news and this morning announced it is selling more than 800 patents to microsoft. with them struggling to stay relevant what does aol raem stand for? sarcastic writes assets on lay away. takeaway time with gary who continues to watch the price of nat gas and how it is effecting these producers. >> we are talking about potential on nat gas. take a look at resources. take a look at that stock. the reason i bring it is up is two fold. big investor on the board. number two, this company with 4 million market takeout of management ceo. price almost about a billion dollars.

the equity here is very, very significant risk in all of these names. >> it has been fascinating to watch. you look at williams, a lot of chemical companies will benefit from nat gas companies that are low. >> there is a lot of companies that are benefitting and that is the way it is supposed to work, isn't it? >> that is generally how it works. a lot of discussion of if this is a replay of last spring where it was the broad economy that took a stumble after what looked like a promising year. >> the earnings picture will give us some visibility there. if we start to hear the possibility of extension of the twist or qe 3 and don't see the equity reaction that a lot of people expect that will be a signal. that will be the ringing of a bell that maybe more quantitative isn't exactly what the market wanted. earnings will be