>> they do drinks like this. >> yeah, but you tried hard liquor and you live to tell about it, but just barely. >> it was a tough three hours. make sure you join us tomorrow for another three hours,: "squawk on the street" begins right now. ♪ >> good tuesday morning, welcome to "squawk on the street." a lot of the stock exchange playing a little new orleans jazz for those two gentlemen right there. jim cramer and david live at the wireless 2012 show in new orleans. they have just rolled in from the bars, had a couple hurricanes, ready to go. take a quick look at futures today. the initial shock about grease may have worn off a little bit. also look at the ftse, the cac,

the dax. failed to reach a coalition foe coll lowing sunday eats reelection. so wlo knows about the next trench o. bail out. >> a whole lot of questions out there. let's hid the road map. a rare miss for mcdonalds comes in short of the company's own forecast. could the stock which had a torrid 2011 be solid. >> gas prices down five weeks in a row. pseudocombat for the consumer or bad for growth? >> facebook eegs road show continues from boston. we'll tackle that and find out why the media just can't stoep talking about it. >> one of sprint's largest shareholders is opposing dan's reelection of the board saying his pay does not match the company's aper fore manse. let's start with mcdonalds, a smaller than expected rise in april sales.

sales rose only 3.3% globally while analysts were expecting a gain of 4 neolyte. of course, jim, one of the true blue chips. explain and set up why you guys are in new orleans. >> well, first, macdonalds, thi has been such a consistent monster in to 20 11. it does have some yield support at three. every single digit seem today be off by a little. there was a calendar shift. i doubt lidon't like it when th ceo who sells hamburgers says it challenging. we're down here day and night to do ctia. we're official partners. >> which is very exciting, isn't it? >> including dan. >> thank you.

>> last year, i was down here last year, guys. and the cta, the day before, at&t launches a bid for t-mobile and obviously he was in the hot seat. this year, he has to come on -- by the way, ontario, for people at home, they're going it's jai gappedic. it's like the biggest fund-a-rama. >> and they have always been very aggressive. they've been active in private equity for their own book. not necessarily just investing with private equity firms. remember, hay partnered with mcgraux hill. they have shown up in a number of situations where you don't typically see a pension fund alm rating. >> listen, we've said many, many times, they are closing down that network.

human of those subscribers can you keep? from what was one of the worst deals at all time for sprint, perhaps 80, $90 billion billed lost. >> some people say it's not a sprint. it's a moore thin. i'm trying to remember how that guy did once he got to the finish line. i don't think it was reilike th boston marathon. >> carl, oil is in free fall. >> what about that? >> you know, that is certainly one of the more important developments over the last week and a half. ten bucks since friday or close to it. what does it mean for the companies that you've been very positive about? and then, obviously, there is an important economic component. >> guys, i think the futures take everything down and then you look at those who are takers of commodities.

now, unfortunately, there's a lot of companies in art. and they get hit. david and i were talked ewing. ing yesterday. this is something to watch positively. we can't come in here and say it's going to be 4, 5. oh, no, it's going do be $3.50. it's good. >> it's great for companies like mcdonalds. but after a week of losses on west texas, at some point, you've got to wonder whether or not that's going to hurt the oil companies. you've seen that in the price action whether it be the drillers or the integrateds here. and at what price level? do you say, do you know thai, the profitability of this company is being thrilledenned for the courteder. >> totally agree. i think the stocks, and exxon is a sale. i know that is heresy. you're never allowed to say something bad about exxon.

just mack it so i'm the -- i got driven out of new york, obviously. and now they went let me in new orleans. >> i'm certainly not going to get a star on that hall of fame there. >> and now you won't in texas, either. >> hollywood diner, right. i'm going to switch to being a vegetarian, too. it eegs a lot better than omahoa beef. >> jim, do you think -- it's hard to tell. but these mcdonalds numbers, is there a pink slime effect? >> i'm going to quote early simon on that. he says pink slime may be the continuation of the trend of not just wealthy, not just the 1 prnt. but this has seeped through the

consciousness that beef is bad for you. you go to the doctor and the doctor says do you know that there are a thousand cows mashed up into one doctor? my doctor is a vegetarian. he works for another network, so i'm not going to mention his name. but, yes, quarreling -- >> you have a television doctor? >> yeah. your need a television doctor. >> there's two letters and then there's one with more than two letters. >> i got them both. oz told me to get more sleep. >> yeah, i see they've listened to my vote this morning. >> when it comes to mcdonalds, if you read through, wendyy's is saying higher costs. that's what hurts new chains across the board. >> well, listen.

wendys, is -- you know what, this is one of those stories. there's a wendys next to every mack dodgeds i know. it's time to understand that as we know from julius al law shakespea shakespeare, the fall is in themselves, not the stars. >> meantime -- >> my shakespeare lesson for today. >> i like cr bard hire on this -- here, read the. >> moving on, the facebook road shope moves onto bean town today. the second stop on the company's ipo road show. mark zuckerburg who crdropped o is expected to be there and par tis pates in the metedings that starts. not just the content of this show, but also the optics.

right? wears whatever he wants to a button up crowd. >> yes. and he can wear whatever he wants. . of course, mr. zuckerburg is selling about a billion dollars worth of stock? about 5.6 billion will be raised, demanding on where they priced it. but he selling a billion dollars went to hg exec for a cane that he can controls whatever he likings. and there you do see the ubiquitous hoodics e that he enjoys wearing. >> i was listening to that bill gates interview. i've seen my biggest mistake. i graduated from harvard. that's why i'm wearing a suit and not a hoodie. >> well, gates doesn't wear a

hoot hoodie, either. >> well, times have changed. >> these are things. he's thin. he's rich. whams? >> well, you're thin and rich, too. >> well, i'm not as thin and i'm not as rich. >> but you are both. >> that's why we're down here in new orleans. >> well, really, what's going to end up, as you guys well know, where is it going to be priced. yvon investors, we can assume it's going to be euphoria. but when it comes back to pure old valuation, where do you put a multiple on this incredible growth company with incredible margins, none the less, people are concerned about what they believe -- they saw it: slowing growth. is it season nan or a sign of something. >> these are fabulous points. dave, you and i were with the late fabulous mark haynes and

with joe. and we went through this period in '99. and we saw the beginning. this is not aen eyeballist company. this is the quickest i have ever seen. and it will have earnings. one of the things that is troubling is people are talking about the 2015 and 2014 earnings, therefore it's cheap. when the public plays that game, they don't understand. so what happens is i'm recommending people get in on a deal. i know that sounds ridiculous. most people won't. but don't buy it when it opens. that's been a fail strategy for almost every single stock out there. so the bottom line is buy it, flip it other wise don't buy it on the open end. >> yes. >> exactly. >> really, jim, that's what you

said about groupon. >> no, groupon, and i didn't get my -- for some reason -- maybe they discountsed groupon after i trashed that brazilon thing. i have no desire to go to brazil. if they can send me to brazil for like 8 bucks thorax's ridiculous. >> there's a difference? >> yeah. i thought i got a 60% off to go to brazil. well, i get everything there. laser hair removal, i have no hair. that's another thing i don't need. but i will point out that groupon is just one of these countries -- zynga. it's another company. i love to use it, but i don't want to own it. facebook, as you said, this is going to be a deal that's going to have tremendous retail interest. but it's not groupon, carl. bauds in the end, it's a very good company.

i any i can recreate groupon. i think a bunch of guys in a raceme can beat groupon. lot of people saying listen, we have media reporting being initiated today and the analysts tend not too like it. that is an advertising on mobile strategy. i think that facebook will become the first internet play where you don't need to click ton app because it's in your face. and proctor wants to sell you that tie before you even have a washing machine. >> you were harsh on bircher last night, jim. >> yeah, i said that the parts are worth more than the whole. i was talking to my executive producer regina and she said holy cow, jim, i don't know. i mean, this is real orthodox.

and i think off the desk, dave, can you confirm what you hear? buffet doesn't have it anymore. but, listen, can i say that on the record? will listen, are you kidding me? don't you dare link me with that comment. >> what about the past track record? but if numbers recently bare out a different story. that's just a fact of the matter. if you put a label on that charted for the past three years, you would say do not buy that stock. >> yes, how about buying gold, which charlie munger's assistant let's just say not delicately hbr paired in 1939. i i this it's a comment that i tend to shy away from. overlay during the last ten

years. and you'll see what i talk about a closed and fund. if folks mattered, if playing music mattered, if being a cool guy mattered vanillate i'll take bircher over facebook any day. >> i feel like they've been constant for good reason. and, yet, over time, he does come back and perform. but perhaps that's a fallacy. we were talking about a long period of time. >> i mean, look, he was great. the company is fine. it's just that they should be breaking the company up, not piling on more assets. i'm sorry. i don't want to say any of this stuff. can i take it back? >> no, you can't take it back. skbl no, i've got to say it. i've got to say it. >> i think it's fair criticism. >> thank you. >> we'll talk more about it and we'll talk some europe after a break, guys. don't go too far. when we come back as facebook's road show heads into its second

day. take one more look at futures here on this tuesday morning. a lot more "squawk on the street" when we come back. if you made a list of countries from around the world... ...with the best math scores. ...the united states would be on that list. in 25th place. let's raise academic standards across the nation.

let's get back to the head of the class. let's solve this.

kicking off the ipo road show in new york city. the social network ceo wearing his signature hoodie to address potential investors.

that hoodie brings us this morning to "squawk on the street." the company's actual ipo day. he will wear blank and here's why. we'd love to hear your responses. my guess is that he'll wear another hoodie or maybe even the same one. >> i think a t-shirt might be involved. >> oh, that's daring. >> but what is it about, i don't know, extremely courageous, adventurous business leaders who crave consistency in their wardrobe. you think about jobs in the black turtle neck. >> i just keep thinking about eric schmidt. there was this period when the boys were running google. i never saw them in hoodies. they were much more t-shirt oriented. but it was remarkable. when you've got eric in there and he's from sun micro. i happen to like him very much. that's when google really started to move.

and i don't think in the end we want this zuckerburg on a conference call. i apologize to all who love warren buffet. he made some comments about zuckerburg. they want growth at an unreasonable price and they don't care whether the guy is wear egg hood hdlg ie or not. >> would you ever wear a hoodie on air, jim? >> have i ever worn a -- no, i've never -- i was thinking, i got this really great -- listen. i've got a boater for sack's. >> maybe on ipo day -- i'd like to see you in a hoodie. could you do that for scene. >> no. no. >> i want to wear a new orleans saints hoodie. and i on'm not picking out anyb.

>> that's a disaster. they also need a disguise. and the doisguise should be a nw york met uniform. this is like -- >> coming up next, guys. we're tracking all the big news from the big easy. get ready for cramer's mdad das. mad dash. much more "squawk on the street" from the nyse straight ahead. ts the health of our cells plays a key role throughout our entire lives. ♪ one a day men's 50+ is a complete multivitamin, designed for many of men's health concerns as we age. ♪ it has more of seven antioxidants to support cell health. that's one a day men's 50+ healthy advantage.

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all right. judging from my watch, about five minute pheres the opening bell. regardless, we're doing mad dash from new orleans. let's start off with fossil. sfwl this is going to rock people. i first got involved and for a while was recommending fossil because of one of my closest followers. that's a jersey shore term. he used fossil 17 times in one show. the stock was at $40.50. it then climbed up. and then it rallies back. but this time, they single out europe, which had been very good, david, very good as the weakest. and the stock is looking down so much that it is going to spill over to vf corp. it's going to spill over to michael cores. >> to any con steamer name, to a certain extent. >> right. >> rather remarkable, given the fact that, you know, this is a

trinket cambrian. but this can have a powerful effect on the market. i know we're here. >> we are. >> and there's two stocks that people care about on "mad money." sprint and sirius. >> yeah, sirius and liberty are in conversations, there's no doubt about that. a deal under which from what i'm hearing liberty would try to pursue a v verse morris trust. >> is it good or bad? >> it would be a good thing for everybody. it's not going to be the easiest thing to accomplish. we should point out that liberty did take its stake up in sirius from what had been 40%. this, again, part of what i'm hearing, jim, this intent to do the reverse morris trust.

very similar to what they did with direct tv. it would be a win/win if they get it done. >> we are looking for some big moves. we mentioned fossil and macdonalds lower. we've got all the action covered here on "squawk on the street" stay tuned. ncer ]e a what if you had thermal night-vision goggles,

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you are watching cnbc "squawk on the street." the opening bell set to ring in a little less than 45 seconds. interesting day opening up here. some of the jitters in europe not going away by any means. >> and the difference between yesterday and today was that the markets were closed yesterday for public holiday. so we have full trade ning effect on the markets in europe. it's a fuller reaction to the news that happened over the weekend in addition to the news that there are no coalitions being able to be performed in greece. so that's a real detrimebtrimen

the smooth sailing. >> and there is the opening bell. look at the s&p 500 at the top of your screen. tajoe resources. 1-800-flowers.com ahead of mother's day. . jim and david, i know you have not forgotten? >> no, not at all. i remembered about nine seconds ago to do it. >> jim, despite all the uncertainty in greece, screwwormny industrial production blows out today. yesterday was .8. is the hope that germany may,

itself, avoid recession? is that the reason we're seeing the euro hang on today? >> the germans seem to be the scourge of europe. they're about harder money. stronger money. they're about trying to be sure that inflation doesn't come roaring back. wow. are they ever off the reservation. this is need for growth. the german plan is not working. but know what, yesterday, we thaulgt the mares were kombic to step aside. the germans do not want to promote growth if it means inflation and hurting the euro. >> you have to imagine that there's going to be conflict to come. >> i hope world war i style compared to world war ii. well, look, d rest of europe has had it with germany. >> they have. although your point is an interesting win.

when we look at the overall picture and the eu and the fact that there has been no war in an area that was just torn by war for so many years, that is one of the key points. that being said, germany has been an incredible beneficiary of the euro zone. its export led economy benefits from a currency that is artificially low if it were its own. and if ireland would have had its own, i walked have bought a castle. >> it's always weird to see a for sale sign on a castle. >> the german euro has kept the bargains in castles from coming to real bargains. they don't have central air. the amount of work you have to do with a castle in terms of going to home depot, it is unbelieve blowing.

unbelievable. >> where's your mote section? >> can you imagine the backhoe? the whole thing is just a tremendous amount of work. >> it's too fast. >> keep it in mexico. >> relating to europe, when we take a look at today's open, what's troubling is the european financials fairly weak on today's session. u.s. is following suit. 7.87 is the trade there. and we've got a big open on mcdonalds, guys, downright now by almost 2% here. jim, what do you think? is this stock stalled for now? >> mcdonalds does have a 2.99% yield. i mean, they were not great quarters. has been the 3.3 ranges for

alleged protection that shouldn't normally be if you have 6789d i think the buyers will come in when we get to 92, 91. they hone that next month will be better. down about 4.5% right now. the oprah network has not been a success, to put it mildly. >> and, yet, animal planet, the most recent it ratieration they done, how can they not trump one channel? >> well, they've spent a lot of money on it. the question is what are they going to do with it? and how much of a drag were they going to let it continue to be. >> discovery, what really are its great assets are its foreign assets. their programming can cross borders in a way that so many other networks have trouble with. and they have worked on it for many, many years.

oprah is deaf fitly a problem. >> and let's not forget raising the full year rev nigh forecast at the same time. jim -- >> hasn't been a good bet. >> very dangerous to bet against david. >> uh you can't bet against zazloff. he hopes today's credentials are going to be over soon. collateral damage over for now or not? >> i think if third point weren't there, we would now forget about it. but when you make a filing to the government, you're signing something that you believe is right. >> it's funny. i misjudged this a bit myself. i thought a lot of these stories in the past have not had legs.

i've reported on a few of them. had those confers with a ceo where somebody i know was questioning the resume not in the same way. this is not. your point is a good one. >> remember walmart. ? where was walmart? was it hondoras? they stocked bounced right back. sfwl wham, it does. but not in an activist campaign. there's a look at walmart, by the way. it's hard to imagine. what do you end up with there? no ceo and a directionless company? >> well, that's pretty much be been the case for the last decade. guess where we're trading today, dave? >> 22? 21? >> you're right. 22. do you want what the range of the stock has been? >> well, i'm going to guess base

you and i have talked about it onset a couple of tombs. to 22.06 to 22.13 or something like that? >> 21.85 to 22.45. but if you just eyeball the chart, it looks like 22 to 22 opinion 05. this is the tightsest i've ever seen. it's amazing that despite the market gyrations, we have seen this stock hold steady at that 22 muehrcke. it's strange. >> it puts you in mind of somebody holting up a weight and desperately trying there. >> let's hope it's not tan rhes and gleich mythology where it didn't work out. >> people have google. >> all right. we've got to head over to check in with andrew and see what is

moving on if floor. >> everybody is talking about this alexus. you've got to hobbed it to this guy, he's the fella who is the head of the left party coalition that's been handed the mandate after the party yesterday fail today form a mandate. this would be interesting if it wasn't for the fact that it would basically throw a wrench into everything. yesterday, all the smart money said we're in trouble with the bail out. so everybody is trying to figure out what is bail out three going to look like? whoa are the terms? will they agree do a bail out three? i don't know. but he basically came in and said forget bail outed one, two, three or four. he's calling for an international commission to invest gault whether any such bail out is even legal. forget it. they don't want to negotiate.

they're also insisting that the other two parties that they go a qh back on agreement. the bottom line is very simple vmt they are not goings to negotiate with a man with these kind of positions. they're going to tell them, guys the money is not there. they've got to come up with a deal. this greatly increases the chances that they're going to be exiting from the euro. >> bob, thank you very much. shift to bonds and the dollar. rick over at the group in chicago. good morning, rick. >> well, i get to cover the only couple of adults in the room in the form of the fixed income markets. you can see that the trajectory has been pretty i orderly.

and here we see ate the five-year with six basis points closing at 70 and 13 basis points away. 30 year bond, about 33 basis points away from its low-yield close, which is around 270, 271. if you look at the boom, it's hovering around 1.56. needs are pretty easy to disearn. in the end, it's about the fnser and the equation. talk abatout os terrausterity au want. >> thank you very much. let's check out the latest moves in gold and oil. >> reporter: hey, melisa, we're looking at the biggest decline of gold in a month's time. something very strange has

happened. we've broken outed of some key trading ranges. gold had been stuck in a 1625 to 1675 range. it happened right at the open. a lot of sell stops were triggered. keep in mafeniind what's happenn greece, what's happening in europe. that is certainly impacting the dollar. the dollar strength is impacting commodity. so we're seeing a melt down across the board. silver, copper, down 2%. oil prices have broken below $97 a barrel. back to you. >> what a week it's been. microsoft ease chairman telling silver investments at the same time as warren buffet and did very well. as for gold, here's what gates had to say. >> i'm certainly in that camp.

historically, i did have some silver investments at a time when warren had some. he got out fairly quickly. i stayed in. and did very well on silver. but gold is a very tough one because it's so psychological. ceo kevin mccarthy is here withous. kevin, welcome. congratulations. first mine in guatemala goes online next year. commercial production in 2014. what's the progress of the mine? >> we're in construction. we're building the big equipment. we're getting everything ready chlts we're working with our communities. a lot of social license involved.

and it's going to be the best silver nine on the planet. glo are you talking about having enough cash to address unanticipated start up issues? what do those tend to look like? >> mining is a very -- it's an old technology. big, big equipment. we've built a lot of mines. we believe we understand how to do it. but it's very difficult to build a big mine and have it start up correctly. we've got a great cushion, an extra $65 million that will last us through any issues. >> what is your cost analysis? because our grade is so high, we have a very low cost analysis. the energy cost is about 10 or 20%.

so because of high grade, the energy cost is not a big impact to us. we could double our energy cost and still produce silver for less than $5 an hones. >> he did very well in if commodity. it hr he says gold is a tougher call, generally, because of the psychology surroundeding it semm. >> in some ways, gold doesn't have the undin u.s. rail demand. i believe gold and silver will continue to trade somewhemomewh parallel on an upward trend. you think of gold as a currency. it's the best currency in the world because ewe can't print anymore of it. in these days, when the printing presses are running, i believe gold and silver will ute perform for some time. >> it's all about getting the

rock out of the ground, grindings the rock out, having the processes to get the gold out. but the good mines are goo gone. we're now going after more and more marge until deposits. >> so given where prices are, are you hedging any of this? >> oh, no, no, no. we've taken the no hedge pledge. we believe that silver price is going up and hedging our product is the wrong thing to do. >> congratulations some presence and would like to come visit sometime. >> all right. keep those tweets companying. so we're asking you for the company's actual ipo day, a very good day for the company. here's why. tweet us at ncnb's cake and see what we 'got to say. before we head to break, take a look at this early ease knew

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♪ >> time now for squawk on the tweet. mark zuckerburg is wearing his signature hoodie. it's a hoodie for the road show, but for the ipo, he will wear what and why? that's our question. a plain blue facebook t-shirt. i guarantee it. >> i think that's a very fair

point considering this is a guy who didn't graduate from college, is willing to wear a hoodie. >> a lot of investors quoted anonymously in the paper when you have built something like that, you get to wear whatever you want. >> right. that's what you have earned. i kind of agree with that. >> yeah. >> trading day is young, of course. a lot more squawk on the street still ahead. >> announcer: good buy ruby tuesday and hello jim cramer. six stocks in 60 seconds is moment away. we'll be right back. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams

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simon hobbs here. >> we've got to talk about mcdonalds. the stock is down 6% for the year. we'll talk about when should you buy winn stock or the fact that they won't tell you how much it's going to talk and a lower table take in vegas. and a fascinating interview with facebook. one guy thinks it's worth $160 billion. another says zuckerburk is

seriously challenged. it's only worth a houndred billion if it's monotized. >> all right, thanks very much, simon hobbs. yes, i'd like to see him in a hoodie. >> new orleans style are six in 90. >> kind of seems we should started with. >> this is a big perhaps coming. who cares. this is not help villi. >> not helpful that they got the go ahead. let's move onto rack space. >> this is going to hurt all the other cloud plays. people are going to say wireless, wire line, internet, storage. not work. >> so what happened? >> they just -- guidance was bad. >> ea. >> okay. i've got ea on today. we've got to figure out what the heck on here. this is a the sole judges

industry. >> it was a big same-story increase. that stock, if it turns, the rest of the market could have -- or at least nasdaq could get a bit. (buzzer). >> this is a play obama how to do mobile advertising. >> i do this because of at&t wireless. >> a greet group of people on tonight. >> thank you. thank you. and by the way, david. buffet. there are things he does right. and we want to get them on the table. >> yeah. there are plenty of things he does right. first of all, he is able to get deals nobody else can combat. we know that. whether it's ge or goldman. getting it right. bank of america. but, listen, your points were interesting ones. we'll see how his performance continues during the course of this year. and people have said this when w

when we made the depth of the cry says. more to come, he could have chosen some stocks. but the stocks have not performed well. >> and the new guy, whoever comes in, there's going to be a very per eent et cranic. >> talk about what we're going to see from you guys during the day today. >> yes, it is. jim has a very dbiting show. i'm going to have the president avisa coming um. >> it's a faux financial everybody loves. >> the day may come when you don't need your credit card anymore. >> we're going to be talking to mastercard and pandora.

>> ctia is partnered with cnbc. >> great. >> we'll have more tomorrow. oh, no, you're leaving. you're not here tomorrow. >> i'm vir chill. >> yeah, all right. carl, back to you. >> we'll see you before then. when we come back, as david said, visa posting some stellar roulettes last week. we will get the company's perth live from ctia. so uh this is myk and his, uh, retirement plan. one golden crown. come on frank how long have we known each other? go to e-trade. they got killer tools man. they'll help you nail a retirement plan that's fierce. two golden crowns. you realize the odds of winning are the same as being mauled by a polar bear and a regular bear in the same day? frank! oh wow, you didn't win? i wanna show you something... it's my shocked face. [ gasps ] ♪ [ male announcer ] get a retirement plan that works at e-trade.

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welcome back to "squawk on the street." get to the road map for the next hour. wynn? >> and facebook has arrived in bean town today. what is wall street saying about the company ahead of its ipo. we have the analysts coming up. >> and the 7th session, the longest losing streak since 25008. what are the ripple effects of falling gas prices? >> it's been revealed that its

latest contract, chesapeake energy gave him permission to trade commodities for himself. the contract raises new questions about what chesapeake's board members knew of mclendon's per rive impression. he did hit 3.39 a share. that's over 3.5% lower from 2012's high. >> google is clocking in as the self driven car license. they will soon be appearing after the dmv yesterday move today approve the nation's first autonomous vehicle. that's what they are being called. autonomy. driverless. althou although there are lot os v regulations because two passenger haves to be in the car at all times. it can only be self driven in certain areas. it's not that it's -- >> so do driverless vehicles have to take driving tests? >> with el, it's a machine vmt.

>> how do you know that it knows how to drive? oh, the computer -- >> you ask it. >> that's fine. >> facebook's top executives headed to boston today. i don't think was driven there by a driverless car. she's alive in boston with all of the details. >> carl, i took a very slow train here. but just moments ago, we did see that facebook day 2 road show meeting let out. in just a few seconds, as far as how the meeting went down, about 200 investors wants down. mostly long only. as well as a few stragglers who got boxed out of yesterday's group lunch. they had salmon, coffee and a spread that included eggs, as well. as far as the presentation, cfo

and coo led the show. mark zuckerburg nowhere to be seen today. but they each made presentations of about 5 min otts. and then opened up the floor for questions admitting that it was a mistake yesterday to show what was a rough rio 30 minute road show video that had been heavily produced at facebook hq. they opened the floor right up for a lengthy q and a session right there. some of the long only value investors saying that won't fly. a ceo who makes a deal without consulting his board and pays what is looking to be an exponential prices. also scheie that. china. assuming a billion user is as saturated as the company can

get. advertising. is the company willing to compromise user satisfaction? and that's making a profit off of it. how satisfied are advertisers? that should be improving. as far as the event as a whole, investors said they hadn't been to an event in boston that had as tight of an event since 2007. a lot of investors saying that the last time this crowd built up in boss ton was for blackstone, perhaps that's reason enough to be cautious. >> wow. kayla, there's also a question about mobile in the road show video. there was a comment, i believe, saying that they will invest in mobile, even if the payoff is unclear. did you get a lot of questioning along those lines? those are the responses in terms of whether or not that would pay off and whether mobile right now

is more profitable? >> i believe it was actually david who made that comment in the video. that was a question that came up not only yesterday, but also today. i think as far as mobile, it's really some uncharted territories as far as far as what they expect as far as revenue comprising the company's revenue. they did admit yesterday they have a game changer in zynga and payments. if mobile can be a slice of that, that would be a game-changer. >> all right, kayla, thanks so much for that update. >> did you see the com score figures? people are spending more time than they actually are on the computer. the gains, potentially, it's 7:21 minutes for its smart phone users. so that is clearly the way to

monotize it. >> all right, let's get to dan who's got a quick marketed check. >> yes, thanks, melissa. we're looking shares at the vitamin shop they had hair herbings call this morning. but to look up 20% and we have to believe part of that is the ceo saying they doe not think they have significant exposure which we reported last week is in prework out supplements. the fda sending out warning letters about those two items and to other mob ewe faketures of dmaa. they say we believe we'll get through this depending on how the fda rules: but they say they have 8,000 different items at the vitamin shop and do not expect significant pose poe sure.

>> all right. taverns so much for that. our next guest lurchiaunches a e-book with some interesting angles. >> three basic buckets of topics. valuati valuation on facebook. let's kick it off with valuation. e you hearted the concerns emerging. >> we buput together this calculator. you can put all the inputs in there and you can come up, if you believe that this is like google was, you can sort of put in the growth trajectory, put in the e-bit margins of about 33%. apply a 15% discount rate and you come up with about 30 bucks a share.

so, really, the only way you can justify, fundamentally on the number, and with human assumptionin assumptionings would be something a long those lines. the idea of smart book users accessing facebook and that is growing: at the same time, we've banged a lot about the government's issues. maybe investors don'ts care so much. but i would say really about instagram, that's a government issue. when you've got 57% of the votes, you can do whatever you like. >> that's a problem if you believe there's no premium, though. if you believe that there's a premium having a founder leading

the company, then that's a trade off you make. >> that is a trade-off you make. and it's a trade-off people made with murdoch. it may be a trade that people made many years ago. >> i still hear the bell. >> you've argued today that the whole road show, especially this company, is somebody called it american kaboke. the idea that you can understand the business trends for the next five years, who was saying that a year ago? >> we're trying to do a fundamental, analytical -- >> you're say it's going to have the growth trajectory of google. we will have an analyst, repaided analyst who says it could be a 160 billion. that people will pay for streams of information. you know this argument. you peg it to the dream that they've sold these people behind

closed doors. >> nay're sellinging a dream. if you want to buy a dream and you want to pay 35, 40 bucks a share, we'll see what happens. but you know, i newlywcan't go there and write about a dream. the only analog we have is something like a google, qh has been a fab lois success. it justifies 28 bucks a share. >> just as an adjunct, do you think priceline is there? >> i think linked in is a good business. people go there to transjubilate. it's still overvalued. it may be growing into that el valuation. price lib line, you have to understand the dynamics. it's like a $30 billion stock.

pretty hard to imagine it could bigger than all the airlines combined. >> meantime, digs cove rio and gammopathy kaless recording a liver courtederly property. certify losses. shares this morning down a little more than 50%. david joyce is a senior analyst and joins us this morning from new york. david, good morning. >> morning. >> how much of this puffivots around the loss and where are we in the narrative of bringing those to a close? >> i think there's much too much foe cuss on the oprah win free losses. so what happened in this kwaurter was because of the cumulative losses that now equate into the eck khity contribution, they now have to reflect 1 hundred percent as

opposed to just 50 per kerned. what's getting nixed by the focus is that the add revenue and distribution revenue, you know, if the company, do messedically, internationally, were phenomenal. so the company is growing share. they're taking more -- they're adding more networks internationally plus more and more poochl are getting on the platforms internoblyly. so the company is growing affiliate fees as well as adds fertizing. >> yeah, good point on international and the advertising growth. how much does it matter to you, though, if the ratings improve? david, do you still have me? can you hear me, david?

>> if you can make it work. >> of course, this point about now accepting all of those losses. and, as we would say, about as international as jim was saying in the past hour, growth there well outed pacing the growth in the u.s., too. so hopefully we'll get david joyce back on the case. in the meantime, for stocks on the move, get over to brine sullivan. >> this is ugly, guys. i've got four stocks on my screens that are down 20%. fossil, look at that, guys,

they're down 34% riblet now. kochling out of a disappointing forecast. i don't know if i've seen a retailer fall this far, this fast. you've also got maco surgical. disappointing sales. you have dendrione, again, disappointing results. and synchronos, bad outlook. an lists are out defending today. guys, that's a beaten as we say down in virginia. >> yeah, and a market that's now down 106, 105 on the kow. . >> also ahead on cwt squawk on the street' the international just a few of the big names holding court down there. and cnbc's part ne'er at the con freouens.

let's head live now to new orleanss. good morning, david. >> you know who is not here? apple, in fact. you've got a thousand exhibitors, perhaps as many as 40,000 people attending this conference. the biggest name, many could argue, is mobile. and yet, they are not here. as you minks mat, they have that he had their i nous mouse presence felt. >> we want to kind of take a clewser look at that in a a way that our bribed new cnbc social conversation index mobile edition. it's an exclues of tool. it's powered by our collective ant leblgt. 15 million posts a day on blogs such as tumbler and a lot more.

you're looking at what we're talking about in terms of companies and the platform that is we are monitoring. which carrier is it most popular on? according to our index, gee, this is not a sir please, of course those are the major four carriers in the united states. at&t ken rateding the eye phone by far. but neon it's t mobile. but there is news about the pare getting its network up to full speed for the iphone in the not too distant future. boost doesn't even sell the iphone, but there is some conversation. our tracker identified some major conversation tied to comments made by at a tricksat&.

he regrets the way the company rolled outs unlimited data. they were widely recirculated in the social universe. i found loyalistst made wide rageing with them. >> we're going to be checking out the social conversation index right now. >> feel free to do that. again, an interesting tool that we can use and it may have some relevance. >> interesting stuff, david. dad. i look forward to a lot more lilter on today. meantime, dow is down 107. maybe it's something to do with fossil's and what brine was saying. seriously negative.

that's the caw. >> and then piece that together with macdonalds. mcdonalds has recooped a loot of it resources, be thaw is the most notable there. a playerlily week eck by are 1.8 prngt. . so that's's where a lot of the weak rns is coming. and price line is down by 2%. >> and i think this is a skean well demand growth story. check out where you are on oil. combine, we've lost a lot of it. so that copt continues to fall. so fossil, yes, is europe. >> europe was the only beat after mcdonalds. meantime, wynn disappointing. revenue, though, was up across

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and then the force is research analyst with key bank capital marks. guys, thank you both for joining us. nice to see you again, rachel. good to have you on the show, in particular. we're taking about the excitement of what might be happening there for wynn with a new resort. rachel, what do you make of the situation closer to home in vegas where the tables are simply not taking as much cash off the punters and the reeve knew there is dope just over 8%. what's your review there? >> well, a couple of things. obviously, a very difficult comparison in the first quarter, and then the ces which did exceptionally well in january of 2011. wynn had more inventory to sell this year than they did last year.

last year, they had a number of rooms out of service. it also seems from their results that they took the strategy of trying to hold an average room rate so that they made sure they had the highest quality guest in-house. and, in doing so, well willing to sacrifice some occupancy. a so what you saw was rate of 6% and occupancy down. on a gaming front -- >> is that a transitional effect, then? or is it something that should worry people longer term? >> i think what you're looking fer in vegas, we had commentary out of lvs, as well. you're looking at core table game revenue growth of low sinkle digits. so it is a slow and study as she goes recovery. but a number of the stocks ran ahad had of that vmt. >> jai necessary, let's focus on the hot spots which is obviously

what is hamming in china and what they do well they selly qh back even though it's going to take them 3.5 years to build i lt? >> it's not just the new land grant in the cow. it's a company that's got a billion dollar as year of free cash flow that pay a substantial amount out to shareholders. they have the top position in both las vegas and in mccal in terms of the high end. and as rachel said, vegas had a very tough come parson in the first quart other. they're doing something a little bit differently with their room inventory. i think steads day as she goes is exactly right. there are other opportunities around the world that will crop up. i think the stock is going to be a tough one. longer term, this is a terrific company.

and i want to participate over the nerks four years. >> and your price target is $175, which is 40% higher than we are at the moment. i think just -- we're out of time, rachel, but just very briefly, you are getting more down beat on the stock? >> and we're just not describing any value. we don't know the scope or the project at this time. >> thank you, guys, back to you. >> tragedy tv shares down more than 2 pnts. but the satellite provider reported earnings of a record 593,00 customers in latin america. let's go trading the globe. with tim seymore, managing partner, contributor to fast money. tim, always good to see you. you're going more the content play? >>.

>> well, dtb's numbers give you the type of exposure that people wan. the rising middle class incomes and the underleverred play consumption growth. so that actually, their latin base will be 80% of their u.s. business. that's amazing. these are two exciting parts of the story. so if i'm looking a cross, first of all, latin america, tell tv is the granddaddy of them all. but this, through the uni vision acquisition, it's 30% of their companies coming from the u.s. so tv may actually get that benefit. >> and quickly on this russian, the russian viacom, as you call it, ctc media, that stock off a

52 week low here. >> well, it's definitely come guaiac off of what had been mostly concerns about management changes. the control share group is something i think people were unsure of. i think it's a prioty good environment here. these combos, we liken them to viacom. these guys are developing their own content. these guys are seeing overall 0 10% ad revenue growth. so this is a place where people have exciting exposure to a company that's younger and vie brent and really combilighted to get. so ctcm is an interesting play here. >> tim, see you later. >> thank you. >> google, zynga and now linked in. the retailer vester have no rights.

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what is cicaprosting is that the consumer discretion sector is being hard hit. ralph lauren discovery, big lots, all in negative territory. you've had some retailers reporting disappointing figures today. and wynn certainly was disappointing in vegas. fu will, ton oil is another concern. the energy sector has taken a lurch. look at ralph lauren down 8%. that stock cannellatas to fall. if you look at the breadth, there is a 3-1 decline to advances down here at the yysc. over at the nasdaq, let's just check on where we were with the bledst of the move. >> about one hour into training, ton to to take to the cme. cooed morning, you to you. >> how did rick more having he

for the thirst tim since squlan 25th. >> i guess that's a bit surprising given how weak the equity action is. my attitude has moved from moderately bearish to moderately apock lippedic. what is going on in europe is an absolute disaster and people are trying to say it eegs priced in. you know what number scares me more than any other piece of that out there? is the jobless rate of people under the age of 556789 in relucians have ha and the risk on trade right now is not the place to be. i want to be out of equities and very, very defensive. >> so you basically see the break down of social order in those countries. you think the sell off today is about that or about some of the more empirical guidance we're getting from companies about business in europe? >> well, keep in mind, each

viewing country may not be that big. but the euro's own take in a whole is a very big part of the economy. this is a slow motion. and what he said is that a democracy can only last until the electorate starts voting itself more benefits. that is compactsly what has happened in france and greece. you o you do not get economic growth by expansion in federal history. europe is in horrible shape. >> why does it matter to the market today and yet yesterday, it didn't. and on both side of the at leantic, we rallied. >> yes, our market may focus on things like apple and things like that. as an investor and as a fund manager, i am not interesting in hurting h market because uh am fearful. >> 13.534. where do we head from here?

i recall a lot of traders watching 13.54 as being a key level. we've reached that. >> if where he want to start talking about levels t level that bothers me more than anything, and i've been on several times talking about the nasdaq versus the s&p. get that difference? that difference now is breaking down from the cr cent lows that it made just before apple came out with earnings. that is not price action and that keeps me want to tell. >> thanks a lot. talk to you later. the moderately kono 3rks otiyptic. blarng blank sskl what's interesting is the verbal intervpgs we've got from the saudis. they say they're pumping $10 million barrel a day and they've got another 80 million stored in case it's needed.

it's something that has been in the market places for some time. they have been trying to talk down the price of oil for the better part of the week. talking that $100 a barrel is too high a price. what they're talking about here, among the traders that i've bevan talking to is yoourp and is exactly what you were hearing from the cme in chicago and ambiguity in the markets that is causing the sell off across the board. the sell off in gold extremely severe today. breaking below $1600 and the fact that we may be seeing, acureding to rbc capital, we may be seeing some private banks in europe coming to raise cash for collateral. that is something that also may be pressuring prices. we as we look the sell off across the board. it is copper that is get qh hard hit. those have the industrial scobinates. those are good indications of

what the economy is and concerns about the recovery. we're seeing cleaverly, simon, about the technical levels that are going to be key here. we are looking at oil that is below the 208 moving average. we hit the 95 angle saturday night. now traders say to go to 9d 4 drs. a blarlg. >> so we're just about to lose 96. you say it's opened up to 94? >> the way has open teed up to 94. and we should get the monthly report from the energy department on their short term energy outlook. that will talk more about opec production as well as domestic production. we had some investment banks saying we could see through opec production through the third quarter. >> 95, '92, we have lost 9d 6 drs. a barrel. sharon, thank you. >> well, the friend psi we're faced with taking on a life of its own.

in this video, you can see the coo geting shoved out of the way as photographers jostle to get a shot of mark zuckerburg yesterday. paul sloane is exec editor. guys, great to have you both. ken, i'll start off with you. you've seen 140 to 1$160 billio valuation range. i was talking yesterday and he said a cascade of miracles would have to hatch. for it to even go public at the high end of the range and hold that valuation. what drives this thing to 1$160 billion, potentially? >> i think it comes down to advertiser. what we tried to explain was what would change social media and cause advertising to shift out of other medias to it? and i think what we try to do is dig into what facebook is doing

now, how is this model changing and ultimately whoa will it deliver to the advertiser. when we look at the magnitudes of roi on the sponsored content in terms of the display advertising, its magnitude is higher. it's laying the ground work to become a bigger challenger to search. and we also work with a lot of publisherings and machletters. really, phs a pretty definitive conclusion. if it doesn't happen within these sort of product roll outs, it will it rate and it will ham. >> if you get to 160 billion, is that at the expense? is it sucking the oxygen out of the room? >> i think that if you look at google's marketing cap and you look at what google can deliver to add fer tidesing, it's the law. marketers are really willing to spend about $30 per year on google. it's a fraction of that on

facebook. if facebook could deliver a yield to marketers, there's no reason why face book shouldn't be closer in value. facebook's revenue should be looked at as somewhat of a legacy. >> hey, paul, so to what degree do we need a big player to make a big leap into facebook advertising? and who might that be? >> a big player in terms of a big at fertizer? >> yes. >> what ken smells out in his report is really really smart and really entrustsing. >> we just don't know yet. when google went public. , it had ad words. the tension, really, is a cultural one with big adverti r advertisers. they wanted to be there. they want to work with these -- with facebook and do things like if they have a movie trailer or

a creative way to send the vide throe to your complies feet. >> this is really interesting because the review funneledmentally disagrees. you believe in facebook. you believe that the bronalide presentations that they've made. it's no longer about clicks. they will be able to sponsor streams of paid for content for so many years: and even if you do believe, they are five years out. way down the line. and this guy doesn't believe they've combat the relationships with advertisers at all. i actually feel that they do have an add.ad words. they're actually showing add fer tietize tietizers. that's troveing the that shall is that i think what was genius about ad words is google was

able to say if you have a really quality paid link, you're goings to bring in dollars from educational where. >> i think paul ohs point is they're not treating the advertisers like third-degree hr they should. >> the ads, even the ones ken is talking about, all of the sponsored ads is that really could be sort of their google equivalent and kiev incredible intent and drill down and find the best users. so advertisers don'ts quite see how they're going to use it. if they look at taking money away from television, they doubt really quite see how it's going to play out. what you're talking about is really a kind of add.ad, yeah, phis facebook has some examples, but it doesn't exist on a wide basis yet. >> well, i the it is starting to. and i think it will take the place of its display advertising. and i think the way that

facebook -- the way we're heading is that publishers, in order to augment a lot of the reach, aring are having to become advertisers. it's free for any advertiser, brand or trekked, to load u7 for free. if it's a good offer, it gets spread. it's a great yield for a marketer. if it's not good, it will fizzle out. and i think it's that kind of balance that facebook has to work with marketerers right now. but if they go through it, there's the potential on this platform. >> one last technical question for you. are you an tis pating? are you getting the word from investors, from clients that there is going to be a trade off? that they're siphonage to be liquidating out of other positions and some of the stocks that you coffer? >> i think that the allegation cautions will not be learning enough to be able to move anything. when ewe look at the impact,

it's pretty spread across the traditional media. and so i don't know that there's any particular player that should be worrying. >> paul sloane. >> i want to send it over to brian sullivan. brian? >> you know, carl, you guys have been talking negative. there's a lot of red on the screen, so i thought i'd give you a riddle bit of good nests. unless or especially if your holdings are up 26 hpth. they said america's lousy infrasphericture, bower lines down everywhere. that's not just neck knelling. people going out like me going out and buying generators profit from just under 5 35 million a year ago, to 30 milon. one stock higher than you. >> so you're prepared. >> i purchased a ygenerator las

year. i figured whale oil is not as plentiful. so i thought i would tap in in my own way to the grid. >> it's amazing. they billet power lines before they discovered electricity. but apparently not before sarcasm. [ laughter ] >> brian, tlanks. when we come back, some stellar results last week raising its forecast for the full year. we're going to talk to the company's president live from ctia to wireless conference in new orleanss and see why he says we'm be making credit card payments from our smart phones sooner rather than later. but proven technologies allow natural gas producers to supply affordable, cleaner energy, while protecting our environment. across america, these technologies protect air - by monitoring air quality and reducing emissions... ...protect water - through conservation and self-contained recycling systems... ... and protect land - by reducing our footprint

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most pain here over the major three averages. want to bring in joe grecco, a managing director. joe, we were just talking before in the break that it was a very curious sell off in that we are seeing gold trade firmly lower in oil. >> yeah, gold is getting hit pretty aggressively now, even in the last half hour. it seems like any position that's out there, people are looking to take, you know, moneyoff the table. and it's not clearly going in any one particular direction. >> what is the chatteder you're hearing in terms of what is behind the selloff? they are sort of just delayed from yesterday to today? >> well, remember, we opened sharply lower yesterday. and then we're starting to really see a little bit more of that aggressive selling. but thebe we have that ahmed saying, perhaps people said enough is enough. we had to wait until august to find out that we were exposed. let's get rid of it now.

let's trim down the portfolio and we can revisit on the way down. u.s. equity is still strong. so barring that negative picture, i still think people believe at some point, it's a lot lower. >> so when you say the equity market is still strong, what term is that? you said it looks like sell in may is a pretty good strategy, so far. >> i tend to think i'll be looking at, and i'm going to throw these dates out there, june 19th and 20th. at that point, we're going to see if there's further government intervention and that could really be what sets the markets back in the right direction. >> and just quickly as we head into the final hours. what is the tell on the markets for you. the fix? the gold? >> i'd like to see gold get some support here. the 1600 number was really nice to see. we should be back up to 12-16 range. we'll keep an eye on that. the fix, surprisingly still low.

>> all right. joe. great to see you. thanks so much. joe barko, we at 30 with all the turmoil going on in the world. >> we want to send it over to david faber, who's down in new orleans at the ctia wireless conference. >> thank you, melissa. we are in new orleans at the ctia wireless conference. our next guest says mobile payments will be ubiquitous in the u.s. in three to five years. he is john partridge, president of visa. nice to have you here. >> good to be here. >> it's funny. we say three to five years, and people say really? i'm going to be able to get rid of the plastic in my wallet. but most other countries have started mobile payments. >> we're way behind. mobile payments began between years ago. we're going to announce this tomorrow in africa. there was a company in south africa that provided the

platform for a company called cell pay. it uses a feature phone that allows individuals to use that company online and make payments between themselves. it's called fundamo. we acquired that company last year and we're taking that technology and applying it over visa map, so it closes off these systems and allows the ability to a card to use these systems wherever visa is accepted. we're standing up a service in india, a mobile service with that technology. so throughout the countries in africa and asia and latin america, we're using that platform where it's already used today in many areas. >> areas where you're seeing, obviously, a lot of growth. back to the u.s., how are you going to manage that transition? it's my understanding that, for example, an iphone right now does not have the necessary chip for you to be able to offer the

service. >> correct. what you're going to see in this country is the network operators have agreed to a secure mobile technology standard called nfc. that allows for a secure payment to move from the hand there is set device through the point of sale terminal. and this technology is based on a global standard, and it's 134g that we've incorporated into our contact list cards. so the technology will allow you to load your payment credentials on the phone and be able to wave that at a terminal and be able to make that transaction happen. that's first. secondly, the information on that phone is encrypted. so it's secure. and, thirdly, you're now seeing the nfc devices being put into the phone. so the manufacturers are starting to put in these next generation phones these nfc

chips. and you've got merchants who already accept these contactless payments. so you already have a base for contactless payments in the u.s. >> is there more transaction volume when i can pay with my phone? >> i think there's another dimension to this, and that is, if it's just the -- if it's just mobile devices replacing the swipe of a card, that's not necessarily a driver. the more important driver of this is with that mobile device, you as a consumer have much more control over your financial accounts. so you're going to be able to check your balance. you'll be able to set alerts so you can be alerted when a transaction takes place. you're going to be able to get offers and promotions sent directly to you and tailored to you. i think it's going to be -- the infrastructure is now both on the merchant side and on the handset side.

the technology is in the marketplace, and you're going to have these drivers of these value added services that will drive the transaction. >> final question, of course, security. one has to wonder about that given the banks, the network operators, all of whom are taking hits constantly within their network from thieves trying to get information, and the cell phone providers. how can you actually create a secure environment where people are going to be confident in using their phones to pay for things? >> we have to. that's just a fundamentally basic requirement for payments. as today, when you you pull out your visa card, you expect it to be secure and reliable. the mobile technology actually gives us additional layers of protection and security. so first of all, your application will be password protected so you will have to activate that application with a password. as i said earlier, all the payment information on that chip is encrypted. so it's secure. probably the most exciting part

about this is the ability to move to dynamic data so that the chip will generate a one-time unique code called a cryptogram, and our system will be able to identify whether or not that's a valid cryptogram, and it's missing or not. if either of those two conditions aren't met, then the transaction will not be approved. and then finally, you have the ability to get these realtime alerts sent to you so you could see when your card is used. security, i think, in the mobile payment space, has to be there, and i think we're addressing that. >> john, we look forward to that day. thank you for joining us. i appreciate it. >> thanks. my pleasure. >> john partridge, president of visa. $96 billion market value, by the way, guys. i had not focused on that in a bit. it's an enormous company. back to you, carl. >> david faber down in new orleans with visa. analysts starting to lower their

price targets on wynn after they missed estimates in the first quarter. are they placing too big an interest in their ma caw ventures? ♪

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we're down 159 points on the dow.

consumer discretion is getting hit in particular. let's get a market check with brian sullivan. >> conoco phillips is apparently pulling an ithzak den seine and getting out of africa. they'll sell their nigerian assets both onshore, offshore, as well as facilities. could be sold at once or in pieces. could be billions of dollars for conoco phillips. stock not moving, but potentially a big move for them out of africa, conoco phillips. >> we've broken 1.30 on euro dollar. i'm not sure necessarily this is a totally european phenomenon. the move on the australian dollar is quite a bit. obviously, the dollar spiking on a flight to safety argument. 129.95. if we could bring up the australian dollar, that's what i'm trying to say. it's a risk off environment across the board, from gold to oil to australian dollar to commodity currencies. obviously the headlines -- and it's being blamed on europe.

i'm not sure the european story has advanced a huge amount from where we were yesterday. >> given the big declines we're seeing across the board in the european banks. >> certainly a new wave of unanswered questions have posed themselves. >> that is for sure. as art said to us yesterday, there was no need to panic yesterday. why suddenly today you would do it -- it matters when it matters. >> you're going to tackle this tonight, aren't you? >> absolutely. we've got someone who says bull market hasn't been given any respect. does he change his mind now that the selloff has began? and we've got this guy, eric anderson. think asteroid mining. could be the next big thing out there. >> could be your next documentary, from space. >> maybe, from space. >> if you're just joining us, here's what you might have missed. welcome to hour three of "squawk on the street." here's what's happening so far. >> if you just look at raw, tremendous tax income, you're going to see more inequality. you get rid of all that stuff, and you look at how people are

living their lives, and equality is not a big issue. >> the question is is it fast enough? do we need to outrun productivity? i believe we do. >> there are some jobs going out. the age of our fleet, all of the construction equipment we sold in the united states the last ten years, we've been in a replacement cycle here for a little bit the last 18 months or so, and that's helping us. >> we can't suddenly switch. we come in here every day and say gasoline is 4, going to be 5, and now we say, oh, no, gasoline is going to be $3.50. no, it's good. oz told me to get no sleep, and i can cut out the red bull. he obviously doesn't know what he's talking about. >> i see you didn't listen to him either this morning. >> not at all. >> i think a bunch of guys in a room can be groupon, but you can't recreate facebook. there's 900 million people, going to 1 billion. >> there's the opening bell. look at the s&p 500 at the top of your screen. >> the idea of going smartphone users accessing facebook 7 1/2

hours a month, they still haven't monetized that, and that shift is growing. people are moving away from the place where they do actually monetize, on the pc. >> welcome to the third hour of "squawk on the street." bit of a maybe delayed reaction of all the uncertainty over the weekend in europe because, despite moderate selling off yesterday, the dow really taking a more sustained blow today. down almost 160 points. 12,849. s&p is down almost 18 at 1351, breaching some barriers at 1354 that some were calling crucial. two executive managers groomed for the management team at research in motion. and from tech to fast food, wendy's reporting a quarterly profit that missed estimates, mainly on account of high beef costs. clocking in at 12.4 million for the nation's second largest hamburger chain.

mcdonald's missed estimates for april sales. gains in europe far outpacing those in the u.s. is this the beginning of a stronger domestic downturn? we'll talk mcd in just a moment. plus wireless carriers chip agwai at smartphone subsidies, raising monthly rates, charging higher fees for customers to upgrade. who wins in the battle for consumers? also, all eyes on the facebook as the ipo road show embarks on day two. as new breed companies like google, linkedin, and zynga, are the shareholders getting any benefi benefits? just reporting much weaker reported sales for the month of april. below estimates in all regions with the exception of europe. shares of mcdonald's down 1.5% this morning. nicole is a senior restaurant analyst at piper jaffrey, has an overweight rating on mcdonald's and a price target of 113.

nicole, welcome back. good to see you again. >> good morning. >> what accounts for the weakness overall? is this a comp issue or something going on within the company right now? >> there's just little room for weakness in the market overall. i don't even know that's necessarily specific to mcdonald's. clearly, comps were a mild slowdown. i think europe was stronger, but atmio was weaker. this needs to play out. >> how do you think this plays into may, june, the summer months then? >> i think they're well positioned. what the company can do is sell beverages. they can push day parts around breakfast and around late night and afternoon. i think that, at the very least, they'll do the low single digit. if pricing can be effective, we might see mid single digits. >> we've seen, obviously, wendy's numbers. beef prices are a problem there. are the commodity headwinds, do they get easier or more challenging in the second half of the year? >> frankly, more challenging. it's the one piece of the puzzle

that you can't contract, like some other xhosity items. that is still a risk in terms of all qsr for beef prices. >> ironic that over the weekend "the new york times" magazine had this story about how they continue to eat all of their competitors' lunch. big profile in part on jan fields, who runs the operations here in this country, trying to get eventually people who don't go to go there, people who go there a little bit to go a lot. long term, are you optimistic on those for tuntunes? what about price target? >> optimistic long term. they have close to a 2.5 million auv. if mcdonald's closed at lunchtime, they'd still outpace in returns and volumes their two closest competitors. the second thing is we look at atmia sort of a weak comp versus consens consensus. it's important to remember that japan is mostly a joint venture partnership, so it doesn't flow

through to the bottom line. while it's not great from the top line perspective, there's really no earnings impact. >> so you don't see yourself moving off your price target at least given the information we have at this point? >> not at this point. >> nicole, thank you very much. nicole miller regan joining us to talk mcdonald's this morning over at piper jaffrey. joined by bob pisani this morning on the market selloff, which has accelerated a little bit the last few minutes. people wonder why this didn't happen yesterday. >> you reach a trigger point where all of a sudden people decide to move some money around. it's mysterious sometimes. sometimes it's obvious. sometimes it's not. we're seeing a risk off day. there's a flight to quality going on. the dollar is up. you can see the treasury is to the upside. german bunds to the upside as well. and the australian dollar, the standard bearer of international growth, is to the down side. there's your flight to quality.

doesn't get more simple than that. i get a lot of e-mails about gold. gee, i thought gold was the flight to safety play. gold is not a flight to safety play when the global economy may be contracting a bit. that simply means there's less chances or less probability of high inflation. that's not positive for gold. that's negative for gold overall. there's a reason gold is down on the day. i want to point out the vix. people saying the vix is up today. the important thing is not to spot vix, which is up about 9% today. it's the future. you can't buy the spot vix. you can buy the futures, which is what people play and what matters. there's not too much difference in the spot futures. they're up one or two points and the cash is up a lot more. today is a lot more noticeable. when the june futures are up 5% and you see 3% and 4% further out into august and even into november, that's a little bit of a sign that the market is taking today's move a little more seriously. finally, you're going to talk about fossil. its disappointing numbers is

having an effect right across the whole value chain in jewelry as well as even in consumer in general. luxury retailers, fossil not necessarily considered luxury retailers, are down across the board. even guys like abercrombie in the middle end of the chain in the clothing end on the down side. so the news seems to be affecting the retail sector. >> ralph lauren, the second worst performer on the s&p 500. let's get to the cme group. rick santelli joins us with the tuesday edition of the santelli exchange. hey, rick. >> good morning, carl. sometimes the math just doesn't add up, but even more than the math, the lessons from europe and the elections this weekend is simple. nobody's going to volunteer for austerity, and austerity is definitely about past due bills. in this country, the minute you're born, according to the debt clock, you have about a $50,000 debt the minute you're born. now, that's per individual. if you just look for taxpayer, it's closer to $138,000 per head.

let's look at what everybody wants to talk about. we want to talk about growth, and that's definitely something out of the windshield where austerity is something in the rear view mirror. when it comes to growth, it's all about trying to hook in, of course, future capital and create more jobs. now, what did we learn this weekend? this weekend, we learned after thinking about it that the jobs outlook in the u.s. isn't very good. it's really about young people. look at the unemployment rate among the young. you realize that jobs are most important to them. why? because young people -- and as a voting bloc, all of you people out there about 27 or younger, i just want you to understand the lay of the land. your generation and the generations to follow you that aren't born yet are paying for a meal that previous generations like mine heavy, we're sending you a check. in order to send you the check, we have to make you optimistic about the future, and i find

that rather difficult. when you have these numbers on your head, that doesn't include the fact that to get a job, you have to get an education. the numbers are clear. the higher your education levels, the more money you make. if you have to pay for college, add that into the 50k you're born with. and the other thing you have to pay for is going to be some form of health care. this is an interesting one. we get a lot of groups on the floor. i always say, who's going to cost more to insure, me or you? and they all raise their hand because they're smart and say you, of course. and i say, you're right. why are all the health care policies being bandied about, those in the supreme court and ones that haven't been put forth yet, all make it so you as a younger person are going to share the same cost? you end up subsidizing everybody else. so how do you hook these young people in? you give them student loan forgiveness. $1 trillion is where the student loans are now. where is that money going to come from? consider this. if we give you that to hook you

into the ponzi scheme to pay for all the other austerity of the past, what we're really doing is promising to take care of you although we've demonstrated we can't take care of the people already in this country, and what's more, to take care of you, you are basically volunteering to not be able to take care of yourself. why? because if you worry about your retirement, can you save for it? there's no interest rate. you can't get a job. and in the end, the money that you're going to be contributing shortly, if you're one of the 18 to 24-year-olds getting near finishing college, that money doesn't have your name on it. it has other people's names on it that are already in the system, and, of course, the money to fuel that system, partially payrolled taxes, the politicians bartered away, once again, to pay the past due bills. wake up, young people. it's on your shoulders, and you're a big voting bloc. you can make change. carl, back to you. >> not a good time to be young, as paul krugman wrote today although i think he was coming at it from a slightly different angle. talk to you in a few moments.

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welcome to the world leader in derivatives. welcome to superderivatives. welcome back. fossil revenues dragging down some high end retailers right now. >> despite beating expectations on the bottom line, fossil reported hit on revenue and

blaming the economic condition ins europe. fossil as a result lowering full year guidance from 540 to a range. overall sales dropping to about 26% from 28% a year ago. the seemingly teflon retail names looking less indestructible today. it's spreading quickly throughout the high end retail sector. ralph lauren, coach, tiffany, just some of the names feeling the pressure today. despite the majority of the s&p with first quarter earnings behind them, many of the retailers will just begin reporting this week. markets are concerned the weak sales news out of europe could be a theme we'll see from retailers in the coming days. asia certainly remains a key growth area for many of the names, particularly with the high end, but with worries the chinese economy is slowing, it's particularly unwelcome for the group. >> tough board to look at right there. serious declines, courtney.

courty reagan back at hq. for more on the selloff, i want to bring in david spica with whg funds. good to spatalk to you. >> good morning. >> a lot of chatter about what the market has priced in the greek exit from the eurozone. is it pushing people already worried about seasonality to sell early? what's going on? >> i think there is some nervousness about the seasonality. i think a lot of people are expecting the market to respond this year the same way it did in 2010 and 2011. trying to get ahead of that. there's still some concern over the weak jobs report from friday. the elections in europe over the weekend. some concerns about greek and their status in the eurozone. what we're seeing today is a very typical risk off market where the utilities and staples are performing the best, and the more economically sensitive sectors like materials, energy, and tech are performing the worst. i don't think it's any more than

investors looking for a reason to sell, and they found one. maybe we've broken through some key supports and that momentum has taken the market down. >> only three s&p sectors are above their 50-day moving average. telecom, utilities, and staples. energy the only sector below its 200-day moving average whchlt you'. when you're looking for victims around here, energy is clearly number one. >> absolutely. oil prices are down again. i think there's some concern about demand globally. obviously, supply and demand fundamentals don't really favor rising energy prices. if you factor in some concerns about growth in china and what's going on in europe and still potential concerns about other things, those are things weighing on the energy market. as a harbinger of global growth, energy is a great way to look at that. from an earnings perspective, energy was the worst sector from an earnings perspective as well. that is taking it on the chain today. >> high profile misses from the

likes of exxon and so forth. let me ask you this, david. the notion that the markets would behave the same way for three springs in a row is kind of hard to swallow. i wonder if you think that seasonality argument is taking on too much water because some are beginning to argue that maybe i'm thinking of sam stovall over at s&p and some others, that summer might surprise you given that everybody seems to have bought into this idea that may is the time to get out. >> i do think it's taken on a life of its own that really isn't justified. when you look at what's different this year from the past two years, inflation is not a factor. we've got a global easing cycle. the economy seems to have softened somewhat, but from a sustainability perspective, it seems like the growth is much more sustainable now than it was in the last two years. you've got certain industry groups that are performing much better now than they did in the past two years, which gives the economy more diversification. it's a herd mentality out there. when everybody decides the market is going to go down, what happens is people rush for the

exit. ultimately what you'll see the opportunities to buy. i don't disagree. i think the opportunity to make money over the summer is there. >> in europe, i know we're dealing with a lot of unknowns here, but some chatter, at least people i talked to suggest, look, market seems to be getting closer to the idea that greece does, in fact, leave. maybe the others that are left behind find a way to issue some euro bonds. citi this morning, or last night, said 75% chance they exit the eurozone sometime this summer or later this year. do you think the loss of greece would come as a complete surprise now? >> no, i don't think it would come as a complete surprise. however, i do still think it's in the best interests of everybody in the eurozone to keep greece in the fold and to work through these issues. a complete surprise, absolutely not. just like the elections in france this weekend were not a complete surprise. the market has reacted somewhat negatively to it, but by no way,

shape, or form was it a complete surprise. whether it's a surprise or not will not necessarily mean the market won't react negatively. i do think it's something we have to keep an eye on. it's something we have to be aware of. from a perspective of managing assets, we have to be very cognizant of the risks that are out there. >> we should point out that right around here, if the dow were to close at these levels, it would be the worst close for the dow since april 10th. we obviously got a lot more to go. european close in a few moments as well. we're going to track the selloff. dow down 175. nasdaq down sharply. that european close on its way in just 9:30. [ male announcer ] the inspiring story

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together, the elements of science and the human element can solve anything. [ all ] shh! [ male announcer ] solutionism. the new optimism. dow and s&p not the only ones getting it on the chin. let's check in with sima. >> tech stocks falling precipitously. all the nasdaq 100 heavyweights, including apple, are currently

in negative territory. what's leading the nasdaq are decliners including electronic arts and wynn resorts. these two companies reported earnings yesterday after hours. disappointing earnings results from both of the companies. that's why those two stocks are currently trading lower. one stock also that is falling precipitously is shares of dendrion, the biotech heavy weight known as one of the most volatile stocks of 2011. the company reported earnings last night. they actually beat on their top line, but they missed on the bottom line. they also are experiencing a lot of strong competition from some of the other players in the prostate cancer space, including medivation as well as johnson & johnson. shares of dendrion down around 20% at this point. i'll get you the details. for now, carl, over to you. >> sima, thanks. ryan sullivan has another flash. this time on zynga not having a

good day either. >> apparently, a lot of slumlords in the virtual farms, zynga on the conference call for electronic arts, ea, during the earnings, ea had weak guidance and the stock is down. an executive on the conference call from ea suggested that zynga overpaid from draw mag app maker omg pop. basically, ea is bashing zynga's purchase of that application. remember zynga hitting a new fresh low, all time low. it hasn't been trading that long. about two months ago this was a $14 stock. carl, you know as well as i do, when you have ipos that lose half their value essentially from their high in two months, that is just another blow to investor confidence. how can that happen? >> look at google, topped at 31. i don't know where it is right now. i imagine it still is below 10. point well taken, ryan. thanks. >> get to work on farmville, carl. buy some cows, man. >> talk to you later.

let's get another check on the energy markets as well. get to sharon epperson at the nymex. new york crude down. . approaching the lows we saw sunday night. traders breaking low below that level will send prices to $94 or below. everyone is talking about the greek elections. they're talking about the uncertainty overall in the eurozone and what this economic recovery will mean, when it will happen, and how quickly it will occur. gold prices here below $1,600 is key as well. we're looking at gold that could fall perhaps to $1,576. where we are now, basically, we have seen gold erase all of its gains for 2012. >> sharon epperson, thank you very much. european close means something for our markets, especially today. we'll get that close in just over three minutes.

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we usually watch the european markets for a close at how the u.s. markets may trade in the afternoon. today whatever the case is, simon hobbs, it will be dramatic. >> there's absolutely no question. what did happen yesterday in europe with the french and the greek elections, for whatever reason, the headlines matter today. let's just have a look at where we are on the map of europe, and you'll see what i mean. it is a sea of red. i can tell you that 80% of the stocks within the stock 600, the top 600 stocks in europe are in

negative territory. it's not just the banks. the banks will attract a lot of headlines here, but it is a broad based selloff. >> the european markets are closing now. >> let me just take you back then to what has actually happened over the last couple of sessions as we came out of the weekend. if you look at a weekly chart, for example, frankfurt, paris, and athens. what really didn't matter yesterday and the markets actually close, sure as hell as i mentioned to you just now, do matter today. just look at the turquoise line there. the athens market in one week is now down 11% as you can see. germany's lost five. paris down almost three. and, in fact, we are now closing out for what it's worth in athens, and they're not international stocks. we are closing out at almost a two decade low. that is a 20-year chart of where we've been. is that 20 years on the athens composite. you can see that is obviously climbing now to fresh debts. the big banks will be the ones

you'll focus on here in the united states. they're brand names you might know. certainly soc gen, royal bank of scotland and bnp paribas are down. in spain, bank ia is a combination of banks they'll put together by this weekend. taxpayers money. will they have to borrow on the open market? a lot of questions to work through. that's meant to be a strong signal from the spanish. we'll see exactly how that pans out. i mentioned to you it's a broad based rally. i could take you into the united kingdom, my home country, and show you how the home builder stocks, those retailers associated with home building are doing today. we've got now prices falling,

house prices falling in the uk to a six-month low because tax breaks have ended. and you might not be aware, but actually uk house prices have been driven high nathanks to lo interest rates and the banks are stay at home, and they've passed on the profits to consumers. another thing is the rally into the bond market. we have no problem with peripheral yields rising today in italy and spain because of a general move into the bond market, and, in fact, a 1.535, i believe, by my calculations, this is an all time record low for the german bund. i'll wait for that to be confirmed by the wires. i want to leave you with one last thing. as you look at the reporting that may or may not surround what's happening in greece and you see the socialist leader or the radical left leader now being able to -- because the main party that won the most votes yesterday was unable to form a coalition. as you see this guy attempt to

form a coalition, bear in mind that nobody believes he will be able to form a coalition because the two other major parties are pro-europe and pro-austerity. whatever you hear out of the mouth of this man, do not let it spook you at this stage. he has no power. he can talk about reneging whatever agreements with the rest of the european union. it is irrelevant as things stand now. carl, i'm not saying that the situation is bad. it is bad, but just bear in mind, let's not assume that this guy is about to rewrite the rules in europe. he has no power. there will be another general election. he might do well. he might win. >> he might come in first. >> but at the moment, he doesn't. >> good point to make. simon, thank you very much. as simon said, the euro did fall below 1.30 after the greece temporary leader said the bailout is null and void. our international correspondent, one of the few journalists to

interview him, michelle joins us with who exactly is alexis sipras. >> alexis sipras is the leader of the party that came in second. he's the coalition for the radical left. we interviewed him in september because he seemed to be an up and comer in the greek political system. young, charismatic, extremely smart. also extremely left leaning, as the title of his party would imply. it's very important to him, at least, that he differentiates himself from the official communist party of greece because he is not pro soviet union. yes, the major communist party in greece would favor a return to the soviet model. that's another story. still, he favors government control of the economy. here's some of what he's saying today that has frightened the market. whether it should have frightened him or not is the question. restoration of collective

bargaining agreements. restoration of salaries and pensions. publication of black rock's examination of the banks. yes, the new york firm has done a very in depth look at banks. the results have never been released despite my best efforts to get it leaked to me. nobody's seen it yet. moratorium on all debt payments until after an investigation into the bailout. and he wants state control of all the banks. that is very similar, a lot of that, to what he said to me back in september. >> what you have to do to pay the banks and to catch the pensions and salaries for the people who don't have to leave, i think this is not a solution. >> so that's a default. if you don't pay the banks, that's a default. >> no, we have the opportunity to have the banks under state control. >> if he and a future greek government were to follow all his goals, it would mean greece leaving the euro. can he form a government? highly unlikely. will there be another round of election ins june?

highly likely. will greece leave the euro? that's more likely than before. will greece leaving the euro be catastrophic? a lot of people believe, carl, that is now less likely than before. >> you also think, maybe michelle, any talk about greece actually leaving is actually leveraged to get them to issue euro bonds or not? >> so alexis sipras says he absolutely does not want greece to leave the euro and the eurozone even though everything he proposes absolutely does. he is convinced he can convince the european union they should change their ways. lost my mike. >> just as it was getting good, michelle. we'll check back in with you later. that's a key point. that's important to a market off 168 points. let's get to rick santelli in chicago as well. rick, what have you got? >> i have ira harris with me. lay the foundation what we're going to talk about, as i walk around this trading floor, remember certainly there are lots of bonds. there's a lot of nonfinancials,

agriculture, grains, livestock, and there is a commodity margin call going on. that's what's on the lips of every trader. we're going to dig down deeper into this whole commodity issue. for you, really, the story starts at what warren buffett and charlie munger said about gold. >> you know what, for two bright guys who really are crying that there's really no use for gold, from their standpoint, brilliant as they are in the financial world, to me, i think about it, rick, and it becomes easy. huge gold holdings in the central bank vaults of the world -- spain, portugal, italy, germany, united states of course, imf -- take that gold. create a gold backed bond. we used to see them. a lot of guys spent big money on them. take those bonds and leverage them. for every ounce of gold, take 20% and pledge it against the bond and put it to work. it doesn't have to lay there dorma dormant. let's start utilizing this.

we live in a world of derivatives. why not take what both munger, gates, and buffett say is a dormant asset. put it to work. create a gold backed bond. for a lot of these distressed economies, create a financial instrument, a bond that people would actually want. >> it's not like it hasn't been done. watching copper yesterday, it was up, i'm not sure for what reason. if you take a step back and look at copper for the last four or five years, the chinese, when the outlook of global economy was better, we were amassing huge amounts of commodities, copper being one of them, and making loans based on them. amassing loans on commodities is a good idea, but what happens to the financial world when the financiers think, wow, this is working well. what happens to the other corporate structures of finance out there that are predicated on paper? >> it puts some responsibility. why don't these sovereign nations want their gold pledged to bonds? they're afraid they'll be called away on a default. therefore, you invoke -- >> some responsibility, yes.

it's amazing. i don't want that to go away. i want to keep that. it's not a gold standard. it's a derivatives standard by creating some use for a dormant asset. >> we all know the luminaries out there that are good at securitization are bored to tears at the moment. i think we just gave them a new mission. carl, back to you. >> thank you, rick. and thank you, ira. talk to you guys in a little bit. want to alert you quickly to a few of the names having the biggest impact on the dow this morning. we didn't quite get to 200 on the minus side. 198 is where we bottomed out. ibm, caterpillar, and mcdonald's all adding up to about 60-some-odd points of the dow's losses right here. perfect time to bring in bob pisani, who's on the floor. at least there's some interesting things happening. >> and you will drive yourself crazy if you try to answer the question why today? 600 people keep messaging me. why didn't this happen yesterday? we don't have any dramatic new information we didn't have yesterday.

and the answer is there is a herd mentality that develops today. when people have the time to sit and think about what happens, they make decisions sometimes the next day. not everybody moves like a computer program every second you get an instantaneous response. people think. and obviously, some people thinking today that global growth is going to be slower. it's not just going to be greece. i think that's the simple answer. when you see stocks moving steadily as you open, and it doesn't bounce around 10:00 when it normally does, start bouncing, that's a signal to press the market. don't get too crazy about trying to figure out why today. a lot of this is driven by momentum. when you don't bounce, you press it a little more. we've got the risk off day. simon pointed this out. he's right here. the dollar up. ten-year up. german bund up. australian dollar down. there's your classic risk off day. important thing to point out is the weakness in the commodity sector. there's the clear indication. not just the australian dollar. clear indication things are weakened.

commodity index. this is my standard go to how the commodity market is looking. now at the lowest levels in the year. last few days, look at that, straight down here. this is the lowest level since the beginning of the year. this is a big basket of all the commodities. that's telling you about the concerns about slowing global growth. i want to show you something about the vix curve. the vix is up 10%. it's not the cash vix that matters so much. it's not this one here that matters so much. it's the futures, the curve going out. often on days, this has been up 7%, 8%, 9%. these futures, june, august, october, up only 1%. a little bit different today. that's why i'm bringing it up. out here to june, up 5%. august up 4%. october, that's pretty far out, almost up 4%. these are pretty significant. it's not panic at all, but it's worth noting. it's a little worse than it's been recently. obviously, there's a little more concern. there's key sectors breaking down. the leadership group we've noted for a long time has been

retailers out here. retail index hitting a historic high. for the last several days breaking down. fossil is the major reason it's breaking down today. it's not just fossil. this thing has been weak for several days and signaling a clear top. today we're down rather noticeably. as we've noted several times, retailers down dramatically. finally, sell in may and go away? maybe it's all wrong. i like to play against the old fashioned terms. so far, the s&p is down 3% for the month. and it's been essentially almost straight to the down side. carl, back to you. >> thanks a lot, bob. talk to you later this afternoon. straight ahead, a lot more on the coverage of the market selloff. the bright spots, if there are any. actually, there are some. and how you should be protecting your money. market still heavily in the red, down 158. ♪ [ piano chords ]

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coming up on "fast money" report, the stocks are something you should be buying today. will it be gold and copper? we're trading it with the commodity king dennis scarmman. we're going to trade all the multinationals at the top of the hour. carl, back to you. >> thanks, michelle.

see you in a little while. want to alert you quickly to a few key indexes. s&p, nasdaq. russell, of course. small caps tend to be a little more volatile. down 7% from the highs in april. all breaking now below their april lows. markets in the midst of a substantial sell-off with the dow down 161. we're all sharply in the red. our managing director of lazard capital markets. good to talk ou. >> good to talk to you. >> is this about slowing growth? we've been getting these signals for a while now. >> it's a couple of things. i think you're right. the larger story is that the economic data stream has hit a soft patch, and it has for several weeks here. i think, if you went back to the good friday jobs report, that was probably the kickoff of the slowdown season. we had two of these reports that were suboptimal. the ism services number was certainly weak last week. there's been a handful of things and some minor positives, ism

manufacturing and some of the pmis a little better. i think if you aggregate that and layer it on top a concern sort of reigniting another summer talking about greece and maybe throw in some spain, i think people have a short memory back to last spring when we started to sell off, very reminiscent to what we're looking at right now. that lasted 20%. i think it's the muscle memory of what happened last year. it seems like the same movie. >> right. whether or not the market actually behaves that way, that's going to be harder to call. what do we do? it starts to rain, and we run outside? >> i don't think we're in the same place we were last summer. you have to look at three things. first of which, when you look at the situation in the eurozone, it's more contained. we've got aggressive monetary policy. we didn't have that last summer. i think that's new. it's a more localized problem. there's less contagion. obviously, throwing a greek election into the mix is going to be a wild card. i think that's going to sort itself, and i don't think anybody newly elected or

currently in office in the sue rowzone has a death wish. i think we clearly will see constructive news coming out of the eurozone and probably more monetary policy out of the ecb. i think, if you look at last year, the yield on the ten-year is about 3%. 1.8% now. less attractive yield there, and multiples were actually higher on the stock market last year than they were now. more attractive. could we go to a garden variety correction of 5% to 10%, we're probably in the middle of that now. s&p down from the five-year highs. we're prubly in for the garden variety pullback, and the investors probably will take advantage of some of these pull-backs as buying opportunities and sharpen your pencil and make your shopping list now. >> it does seem, though, so much is pivoting off of the comments on a company like fossil. the things they're saying about that demand in europe have, i think, accelerated bearish sentiment toward any company with that kind of exposure. whether it's a cummins or a nike

or whatever. >> you can throw all the multinationals into that mix. what you need to do, if you haven't done that homework, look at how much european exposure you have and how much is at risk. let's face it. 8 of the 17 euro countries currently in a recession. we don't know how deep that gets or how long it lasts. european demand is definitely going to be called into question. fossil reminded us of that today. i think analysts have miscalculated on that name, and i think we're looking at the rest of the names that probably fall into that category. the flip side of that, where we have days like this is where we have basically indiscriminate selling. major moves on all three of the major indices. you're throwing the baby out with the bath water on companies that don't have massive exposure out there being sold. >> that's a really good point. normally, we'd see the pain in different gradations across the market. it is pretty uniform today. art, good stuff as always. thanks for coming to the phone. >> thank you. >> art hogan over at lazard. we'll continue to track the selloff.

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huge selloff although it has erased 60 points of losses in the past hour or so.

art cashemof u.p.s. financial services. so many unanswered questions about how they put together a government and what that means for various tranches of bailout money. what do you think is going to happen? >> i think traders came in this morning assuming they still had a couple of days, that you'd be following the pattern of yesterday. they'd try again for a coalition government and probably fail. have a third try. and that things would be relatively quiet. if the gentleman they asked to try today who had the second largest vote, whose party had the second largest vote basically decided to throw kerosene on the fire. he said a plague on all your houses. we're not going to cooperate. we'd like to see something like a marshall plan. we think you guys should give us some money to get ourselves organized. the germans basically said we're not in the business of financing greek electoral promises. that hit the fan.

>> you think they're going to default on the loan in june? >> i believe they are. up until now, i thought they'd make a couple of tries. we're going to see this election between june 10th and the 17th. they all think that, as one of my partners in london said, that the chalice is poisoned. you know, it doesn't matter who it gets passed to. austerity, the people won't take it. i think, if they don't make the deadlines, pensions won't get paid, government workers will get laid off, and we'll be in the streets. at that point, it may become, to avoid chaos, we go to the drachma. >> exit the euro? >> i think that's the only resolution they'll have. i think that's what they call a rationality put. people have since then assumed that, if rational leaders can see a problem, they'll they'll

avoid it or push this off. i'm not sure we've got the stick to push this one. >> there's that issue and then just the macro business environment issue that we're hearing about from companies that do business in spain, that do business in italy, and it feeds the ism and the reports we've gotten from china and europe and commentary from caterpillar. the slowing growth story is not new, but it seems like more people are suddenly reading that page. >> no. i think it is growing more and more worrisome to people as they look around. in fact, if it begins to sound like the greeks are, in fact, thinking of exiting the euro, the natural next response is a bank run in both spain and italy. it lets -- do this. you live in athens. today you go in and withdraw your money, and it comes out in euros with the purchasing power is. you're about to have a transfer to drachma, and you don't know what the purchasing power is. people in spain say, i don't this to happen to me. you run and take that money out

of the bank before the currency gets changed. >> personal likelihood of a scenario like that. >> we should take it a step at a time. we take it to greece. greece will be the canary in the coal mine. we know what's going on, and you'll know how to protect yourselves after that. >> seen this movie a couple of times. might be different this time. >> it might be. >> thank you, art. art cashin. final thoughts on the selloff when we come right back. [ male announcer ] at scottrade,

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a look at what yahoo!'s doing amidst the selloff today. all things digital now reporting the yahoo! director in charge of the botched ceo vetting will step down from the board. patty hart, in charge of the search that resulted in the hiring of scott thompson as its ceo, in the words of all things digital, making her directly responsible for a clearly botched vetting of his academic record. will not seek election at the next annual meeting. that's according to all things digital. see what yahoo! does this afternoon. meanti meantime, a quick check of the markets from rick santelli. >> i think the quick takeaway is to build on what art