of stuff. >> covered a lot of ground. >> a big morning. thank you for being here. appreciate it very, very much. joe kernen, thank you for being here. >> be here tomorrow. >> becky will be here tomorrow, too, i believe. >> i'm on assignment tomorrow. >> make sure you join us tomorrow. "squawk on the street" begins right now. good mod monday morning. welcome to "squawk on the street." i'm carl keent knn quintanilla. the beginning of a new week after the worst start ever for the dow. futures mildly positive to mixed after a selloff in asia overnight. big week in europe setting up as well with an ecb meeting in the middle of the week. nor now markets in the uk, ireland and greece are closed for the holiday. our con garagelatiraj lag garag queen on a 60 year rain. not bad. >> diamond jubilee. our monday road map begins, of course, with the markets. dow just 167 points away from correction territory.

s&p and nasdaq, they're already there reeling from the disappointing jobs report friday. does this make fed similtimulus certainty? >> tough session in asia overnight. sony back to where they were when the walkman came out. in europe get used to the words master plan. merkel's under pressure to provide. george soro says she has only three months in which to do it. >> how much of an economic tail wind is $82 oil? west texas crude sinking to eight month lows while brent at levels last seen in january. >> speaking of energy, chesapeake bows before icahn. aubrey mcclendon will remain ceo. the journal looks at how the energy giant bungled their hedges on nat gas. the dow in tnegative territory for the year. worries about a slowdown in the u.s. now putting the fed back in the spotlight. the watch is on to see if the chairman of the fed, ben bernanke, and his fellow policymakers will put more qe on the table when he speaks. jim, before the senate banking

committee on thursday, 10:00 a.m. talk about tv ratings. that's going to get a number. >> true. but he's a pitiful helpless giant at this point. because the market is doing his job. i expect that the 10-year will go to 1%. that's where it is in germany. no reason to think ours won't. >> that's a bombshell of a prediction. >> really? i made it last night and no one even blinked. geez. people were watching "mad men." apparently "mad men" is a good episode. >> why? >> the money is flowing here like there's no tomorrow. i really feel that what's happened is that we are now the beneficiary of smart people from around the globe, whether it be japan. that sony comment. whether it be europe. whether it be latin america. whether it be india. because, frankly, geez, you know, we got a stronger currency than the germans. why put money there? >> do we hit 1% simply because of the markets and market forces or hit 1% with the help of the fed? what's baked into that prediction? >> i think the fed doesn't even

want rates at 1% because, boy, the banks can't make much money. i think it's just this incredible flight to quality. obviously people do not care at this very moment whether their money makes money. it's really one of those moments that big money is saying, you know what? i want to hide. when this is over, we'll make a comeback. >> there are already people trying to figure out what the 10-year is telling us at 1.5 or 1.45. i can't imagine they're going to be seeing great signs if it ever does get to 1%. i would assume one word we're going to hear a lot more about is deflation. which scares the heck out of a lot of people. >> yes. >> i wouldn't necessarily say that's a good thing. if your prediction proves correct. >> remember, it's foreign capital. i really don't think -- look, we have a number today. auto nation came out with sales. you're talking about 40% increase in retail. i want to make another statement. this may be as much of a bomb throw. more of a molotov cocktail, less of a b-52 ark light mission.

there are a lot of parts of our economy that are stronger than you think. the employment, somehow that's forward looking. i look at auto sales. i think of housing signs. construction is not that strong here. i know this is a radical view to say the world isn't about to be over. other than the 200 moving day average which may not control american spending, i just don't see the world ending. >> the 200-day moving average is bad for those who are technically driven. >> i think if you get a rip, i think people will sell. i think the rip is caused by, are you ready for this, the double secret ultra meeting. the european secret meeting that's supposed to be happening. people say there's going to be something big. interesting there's going to be something big when a lot of europe is closed. >> have a big party over the weekend and get back to work during the week. your prediction on the 10-year, 1% by when? >> i think it's moving there rather rapidly. >> i love this prediction.

>> it's got big money. >> i think it's probably a bad thing. in a lot of ways. >> does that necessarily mean the markets will go lower? >> i think that the market without -- not a secret meeting but a real meeting in some sense, i love that soro says they've got three months. maybe kind of like the jc penney turn. maybe two months and 28 days. can i just say that it feels -- that's like a .007 prediction. remember when they stopped the bond. old bond. i'm saying it's seven days. they've got about seven days to at least say, you know what? merkel says -- merkel! did you see her in the press conference? nine, nine, nine. talk about herman cain. >> that hasn't stopped the flow of unattributed officials to the journal this morning in this case saying there is the possibility of a master plan if other countries give up enough sovereignty. soros's point is you need deposit insurance and you need direct bank recaps.

his point of three months is by that point the german economy will be so weak merkel won't even be able to sell it compared to now. that's his point. >> germany's got 5.4% unemployment. that's a percent of.1 better than it was the previous month. if you do do that deposit insurance, not only will money stop flowing but you've got a chance to break up the euro if you do that. if you know your deposit's not going to work tomorrow, you'll keep your money in. that will buy time to be able to break up the euro. honestly, how do you get any sort of long-term fix when you go to ireland. they just agreed to austerity. you go to spain. there's no bargains. you go to greece and there's no bargains. meaning there's no money flowing in from the outside to buy up assets. >> the key thing, the conversation we're engaged in yet again about europe is greater fiscal unity. it's not as though that has not been on the radar in 2011 or 2010. >> meaning it doesn't matter. just a stale issue. >> meaning it hasn't yet happened. and spain wants money to potentially bail out its banks. but how far is it willing to go

in terms of, again, that idea of unity? what does that mean? we're dealing with different countries, different languages, different cultures. come back to the fiscal crisis we had here. i should say the financial crisis. and what pallsulson was able to. could you imagine if it had been different states with different cultures and languages? spain, how long can it hang on with deposits continuing to flow out. >> tower of babble versus 50 states unified. 50% of the money that comes in in taxes goes to washington. 2% goes to the ecb. where are the divisions they have to misquote the great stalin? i keep thinking -- great stalin being facetious. what really is going on here i felt was that spain was willing to give up financial sovereignty. i thought that was a rather amazing move. i know the people at home are saying, spain. what are they talking about? why aren't they talking about unemployment in the united states? i think obama directly linked us

last week. your interview with romney which was extraordinary and incredibly important, by the way the one that still people are quoting because they just put out the facts this weekend. he was just saying he was like general ford. you know, did he get any sense he's really thinking about this -- >> to his advantage to frame it as it's not a european issue. it's a domestic policy issue. that's clearly -- tried to lead him there a couple times. asked him if he thought europe was in another cyclical slowdown. not worth trying to do anything. he clearly thought it was more about the president's policy which is what you should expect. >> how much do you think we should discuss domestic -- kind of a commercial break thing. how much do you think we should be discussing domestic versus foreign right now? >> all the business leaders you talk to, how many of them are citing dodd/frank versus collapse of the euro as an inhibitor to investment. >> it's euro. we can talk all we want about the strength of our domestic economy and clearly it's not

strong, but versus the others. and our market. and all the positives that we can talk about. but at the end of the day it seems to be a self-fulfilling prophesy each summer that we worry about europe and people pull back. people worry about others pulling back. therefore it actually occurs. we watch the s&p sink. >> remember the 200 day moving average. don't want to be facetious. gary kaminsky on our special last night, maria hosted a special. you might have been watching the conclusion of "the killing" or "game of thrones." maybe it was the celtics game. the thing that really did matter to me was that kaminsky said remember what happened last august when we broke out the -- when we took out the 200 day. 11% decline on no new news. unless ben bernanke on thursday says i don't like the charts and i'm going to take it back over the 200 day moving average, i don't know whether you can do anything. that, too, is not going to happen. >> in terms of the stock market what does this mean for the investor out there if one is to

believe that fed -- some sort of stimulus is in the books, is going to happen? congress is not going to come to the rescue. that's a common belief. the elections are looming. the fiscal cliff is looming. what does this all mean for the investor at this point? >> gld up 5% year over year. i think gold is going to be back in vogue. >> finally a safe haven once again. once again. >> yes. i think that's right. >> then we've got asia to worry about, of course. new data showing china's services sector expandsing at its weakest pace in more than a year. this morning on "squawk" mark fodder of the gloom and doom report expressed concerns about china's growth prospects. >> i think they're very meaningful and more substantial slowdown in china than the official statistics would suggest. probably there is at the present time hardly any growth at all. and so that slows down the demand for industrial commodities. >> you have to know when to listen to marc and pundits in their certain areas.

and marc faber. we share the same name. different pronunciation. on this he's perhaps more knowledgeable. he's got a gloom and a doom in there and just one boom. he's mostly gloom and doom. but china is -- is a real concern. and it was last week. we watched that market in shanghai. by the way, down 2.7% after they reported their pmi. they didn't get to react to it on friday. but one has to wonder how important that is. are they already suffering as a result of europe's woes? >> we are seeing a lot of ceos also talk about china. last night, what a great night for china to be able to say, you know what? inflation's down big. commodity's down big. we got some coal numbers over the weekend. coal is down big. joy global indicated that. what a great opportunity for the chinese to do something. they did nothing. let me tell you how pervasive this. if you want to know how to trade u.s. stocks. yum. people are saying -- i love this. i just have to do it. the word is is that western china, they've slowed in buying

kfc. the absurdity of thinking about the 30 cities that are more than 1 million people in china. how many are in western china. but the idea they're not eating as much kentucky fried chicken because they're cutting back, i don't know. i find that to be a little disturbing. >> where is that word coming from? is it out of your western china sources? >> an independent guide. we did get a downgrade this morning worried -- here we go. raymond james worried aby eied kentucky fried chicken sales. >> in western china? >> they've got at least 30 cities with more than a million people. >> the think about western china, they are -- obviously cities aren't as big. any slowdown is marked. it's a much more sort of rural area in general. in the western part of china. but the concerns about u.s. multinationals in china and things softening, that's really becoming much of a bigger deal. deutsche bank today taking down the price target of mcdonald's down to 100. they're heari ining executives

about weaker margins because of europe and overseas. this is all coming to a head here. >> it sure is. a lot of people are just talking crunch time. that we're in crunch time for the world right now. my only issue with crunch time is it tends to last -- crunch time tends to be elongated because of exactly what you said, david. you have 17 countries that are going to somehow make it so crunch time lasts a little longer so that we will be discussing crunch time for several months. which makes it more of a noncrunch. >> when do we finally -- >> captain crunch. >> -- find out the real crunch. >> exactly. back to headquarters really quick. breaking news from kayla tausche on mf global. >> we haven't heard a lot about recently because this investigation has been ongoing for seven months. we got a report today, a very detailed report from the trustee that's overseeing the investigation and liquidation of mf global. there's pretty interesting points here. noting that management failed to add to its treasury department and technology infrastructure in the wake of jon corzine trying

to make mf global a full service investment bank. that it was that lack of infrastructure that kaugzed the liquidity crisis and the failure to actual monitor where some of the money was going. because of what they found in the investigation, the report says that the trustee is pursuing claims against individuals and entities and individual ceo jon corzine could be a target of those claims as well as cfo henry steincamp and edith o'brien who has been at the heart of this investigation. also jpmorgan chase, mf global's clearing bank. even though jpmorgan has returned the bulk of the customer money to the trustee where they're overseeing distributing that. there still could be claims against jpmorgan and the trustee believes most all of the transfers would be voidable or otherwise recoverable. the interesting part of this report is that the lack of oversight occurred at the treasury department where they're trading treasury securities. this is supposed to be a very safe arm of the bank. the report says there should have never been any sort of liquidity issues there.

they had just started trading these treasury securities month earlier and that was where there was a lack of intrastructure. using those treasuries to plug the liquidity crisis. should have gone back to customers. carl? >> we'll keep an eye on that story developing slowly. thanks, kayla tausche. let's do chesapeake. the company is announcing changes to its board of directors. four directors have resigned. a fifth has retired. new independent directors will be added. one will be either investor carl icahn or an icahn rep. company also close to finding a new independent chairman to replace ceo aubrey mcclendon in that role, david. this story also moves forward. >> they're trying to get closer to some shareholder accountability, perhaps. again, four new directors. we'll know june 22nd. southeastern asset management owns 13.6% of this company. they're going to sign off on three of the directors. icahn gets one. he's at 7.6%. together, of course, southeastern and icahn own 21%. aubrey mcclendon owns very, very little. he'll remain ceo.

also a destaggered boar. all the directors will be up in 2013. we'll know by june 22nd who the new chairman of the company will be. that being said when it comes back to the debate amongst investors so often it comes back to the asset value of the company. they are in the midst of trying to sell some of those assets. and what you're going to get for them is a key consideration. i know guys who are short based on the belief that it's not going to be a number people expect. of course, there's the other side of that equation as well. >> the preferred has soared here. i only mention the preferred has been much better predictor than the common or the future. it makes me feel that there is something at work. that aubrey mcclendon does have a plan. i also don't think that they would let go so quickly unless there is a plan. i don't want to be optimistic about the future of aubrey if only just because oil and gas. i mean, i think aubrey's a little pessimistic. they took off those hedges. that was a very good article in the "wall street journal." obviously he didn't think that natural gas would fall where they tid. a lot of the oil companies i talk to are very worried that if west texas and brent continue

down, they will not be able to keep their drilling programs. what would they need more of chesapeake's assets unless you think a foreign buyer comes in and says let's take advantage of the disarray and start buying. >> that could go for the entire company as well. >> right. >> there's always that possibility. certainly wouldn't be embraced by the likes of a carl icahn who just moved into the stock over the last couple of months. had no path to gainny directorships but does manage in his carl way to at least have one director who will be either him or reporting sort of -- or, you know, approved by him. >> the unical option, off the table? >> off the table. >> china tried to buy uni cal. it caused tremendous, tremendous turmoil. >> political turmoil. >> i think you can break it up. one of the things that's really incredible, you got to love chesapeake. it's a continued fountain of news. talk about the largest fine ever last week. 5,000 barrel. that is gigantic. aubrey mcclendon, for all of the troubles that he has, does make you feel like spindle top has been found again and that our

country is the great oil and gas power we used to be. >> lightning in a bottle in some ways, aubrey is. when we come back this morning, a hedge fund manager will tell us why he thinks facebook might disappear in five years. we'll talk about that. taking a look at futures this morning, flattish action today. we'll see what this week shapes up to be like when "squawk on the street" continues in a moment. ♪ ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future. ♪

aig's ceo saying in an interview that because of the situation in europe, he will likely have to work until teenage of 80. wow. that brings us to this morning's squawk on the tweet. if ben is right, we ask you, i wish i had blank. for me it would be i wish i had taken five years off after college. because if you're going to work tillle 0, there's no retirement. we want to hear from you. tweet us@cnbcsquawk st. we've got your responses throughout the morning. >> richard dawson died this weekend at 79. renting "running man" and seeing dawson in real action as the host, that was his finest moment. that was it. stephen king short story. >> estimated that he has kissed 20,000 women through the course.

and married one of them. >> i didn't realize that. >> wilt chamberlain kissed 10,000 women. >> just like his 100 points in a game. >> at least dawson's was documented on tv. >> we're going to take a break. after the friday selloff -- let's end this! how can you head off to a fast and profitable start this week? run with cramer. he's got his mad dash next. let's take a look once more at futures as the dow potentially could head into correction territory. 167 points away. it looks like we are adding 14 points at the open. tdd# 1-800-345-2550 let's talk about fees. tdd# 1-800-345-2550 there are atm fees. tdd# 1-800-345-2550 account service fees. tdd# 1-800-345-2550 and the most dreaded fees of all, hidden fees. tdd# 1-800-345-2550 at charles schwab, you won't pay fees on top of fees. tdd# 1-800-345-2550 no monthly account service fees. tdd# 1-800-345-2550 no hidden fees. tdd# 1-800-345-2550 and we rebate every atm fee. tdd# 1-800-345-2550 so talk to chuck tdd# 1-800-345-2550 because when it comes to talking, there is no fee.

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five minutes till the bell. mad dash for monday with jim. we tease playfully this news about sony shares in the asian session. but 28-year low is really saying something, jim. >> i think that sony was the first casualty of apple. everything that apple has done was to replace sony. now, maybe one day apple will be sony. but this is amazing. i remember when japan in 1988, '89, their stock market, 38,000. it has been one amazing bear market. and this has been one of the worst stocks i have ever seen that is still a solvent company. stay away. >> to you see it more as a reflection of what's happened to a competitor or is it a larger comment on global growth? >> it's a nation. i think it's a nation that is in tremendous retreat. there was a book called "the

enigma of japan" at one point. amazing book. there was a time when japan ruled the world. and it was not in 1939, '40. it was in 1988, '89. and this company was the world leader. this was right before the walkman, for heaven's sake, when they took off. the walkman annihilated by apple. >> absolutely true. in the meantime you're impressed by auto nation's numbers. >> i think it's important to keep in front of us, not that either politician seems to understand this. we have an auto related recovery and housing related recovery. they are happening at a time when unemployment has not been good. i want to keep people front and center on this. because we could be at 14 million car buildup from 11 million. tha and this is a company that has got 45% increase in sales year over year. carl, if we're really going into recession, you don't get that kind of action. >> that's true. something to watch. melissa, over to you. >> global downdraft that we're

seeing in stocks around the world. also, more on the call that is sending facebook shares lower premarket. all that and much more. the opening bell the other side of this break. [ male announcer ] let's level the playing field.

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you're watching the opening bell here at the big board. essence magazine celebrating the essence musical festival. at the nasdaq, major league baseball hall of famers and former mlb stars commemorating the 2012 first year player draft. >> i actually almost had plans to go to the game. but was at least lucky enough to turn it on in the sixth inning and watch with my 9-year-old son and my wife. so exciting to watch. santana, 51 seasons. >> these guys have had a lot of no-hitters. >> thanks. 8,020 games and we got there. now to the world series. >> jim, you've been pretty clear on twitter and everywhere else. sell the rips. i hear you talking to glowingly

about bristol myers. where's the split? >> as i said last night in the special, bristol myers and the johnson & johnsons of the world are where the money goes to after you sell the rips. there's a very important downgrade today of cummins. i point this out because the industrials have been a source of funds for most of this selloff. wells fargo saying now cummins is the exact opposite of bristol myers. if we were on jeopardy, david, i know you're an entertainer, if we were on jeopardy it would be like, what is the opposite of bristol myers. cummins would be the answer. >> what is cummins. thank you. >> bristol myers had some good data over the weekend because this conference. j & j had good data. growth and yield. fixed income with a kick zbler is there a minimum yield on a stock that you are willing to accept? >> above 1.5%? >> if it's -- if it's a financial or an industrial, no.

if it's an oil company, no. because those are connected to europe. if it is a regular u.s. company, i will accept 3.75%. >> really? that high? >> yes. i'm willing to get that for a -- >> how about mortgage. >> hey, listen. ferrell's got it going there. that stock has been pretty good. he's returning billions to shareholders. >> certainly paid himself. >> most of technology does not fall into that category. most of technology does not meet 3.75% app 3.75%. >> no. beware of technology. 20% usually connected to europe. your seasonal slowdown even without this. not the place to be. >> if you run a screen on revenue from europe, is there a maximum you're willing to accept? is 20 too much? 10? >> i want to say none is too much. because if you look to pepsi, that held up like a champ last week. i think that you have to decide what kind of business it is. i'm willing to accept 20 from

pfizer. i'm willing to accept 20 from j & j. i just can't get my arms around a lot of revenue for, say, caterpillar from europe. because these stocks are still in free fall. you get a little bit of lift, people are going to sell them. >> at&t and walmart the only two dow components positive for last week. walmart has a lot of exposure there, but at&t not as much. >> it is the age of walmart, david. >> it would seem to be. the age of walmart yet again. i'm hoping that doesn't mean i have to do a third documentary, though. >> we would love it! dollar general reports tonight. i bet you they subtly have to mention the fact, nice market today. subtly have to mention the fact that walmart has figured out their game. they have been letting that dollar store niche really win. i think they're back. >> well, certainly the stock is back as we pointed out with walmart. you watch dollar general which has just been an incredibly strong performer. walmart breaking out almost $66 a share. the market value, by the way, now $223 billion.

yes, while they have foreign exposure, it is not nearly as large as a lot of their competitors. they want to get bigger because the growth is still in overseas markets. >> what happened in germany? >> somewhat slower. they really screwed up in germany many years ago. >> that turned out to be a really good thing they screwed up in germany. >> potentially. it took them quite a while to understand you can't impose what you thipg is the way the world works in bentonville on germany or other countries. >> germany's tried to impose its will many a times. including this time financially. >> that's true. facebook. we're watching facebook, of course. down by a percent early on. bernstein initiating facebook with an underperform rate ing. $25 price target here. saying they don't have clarity on how facebook is going to monetize. this, of course, comes as "the wall street journal" has this article about facebook looking for possibly the new frontier when it comes to customers, those people under the age of 13. >> well -- >> who right now need parental permission in order to be on. but apparently a lot of these

13-year-olds and parents collude to get permission. they lie. they get on facebook anyway. >> i think when you're relying on that key cohort of the 10 to 13 yee 13-year-old you're really struggling. three words speak out in the bernstein research. revenue growth decelerates. >> we knew that, by the way, before the ipo. we saw that already. >> we did. >> at the same time, i think that people have to understand i do some work obviously at the street where i am a director. this incredible, mad dash, so to speak, to mobile is happening faster than anyone wants it to happen. in the meantime, i mean, even google i think is going to have to struggle. now google more of a hardware company. all these companies are doing things that would compromise themselves. if you go to google, by the way, and you go enter best diner near exit 51 on long island expressway, it's just going to send you to ad, ad, ad. by the way, siri had 14 -- this is apple. 14 different diner selections. i'm just pointing out that

google has become let's get revenue anywhere. facebook. what's next? the 8-year-olds? i know the 8-year-olds, they should be spending more time studying. but it could turn out to be that they're the crucial revenue accelerator for facebook. give me a break. >> yeah. i'm not -- 3-year-olds don't respond to ads all that well. trust me on that. >> 3-year-old cohort. "goodnight, moon," goodnight, facebook. >> mary thompson? >> we're see techs or at least the nasdaq take the early lead. up about 20 points. dow up 18. the s&p up four points. of course, the s&p and nasdaq entering correction territory in friday's selloff. investors looking for a little stability in the wake of that decline and the decline in the asian markets overnight. however, hsbc in a note today said don't let a relief rally today fool you. their continue, of course, as we all know there remain critical elements that need to be dealt with on an economic basis around

the globe most notably in the eu where reports today say they may be working on a master plan. we've heard that before. this week some of the things traders will be watching, bernanke's speak on thursday before the joint economic committee. te sigss on rates from the ecb and bank of england. keep in mind uk markets are closed today, of course, for the diamond jubilee holiday. these are three important things they're watching. also a spanish bond auction later on thursday. quick check of the s&p 500. of course, on friday in the selloff it broke below that critical 200 day moving average. the support traders are watching for now, 1275. trading above that right now at 1282 and change. also watching banks right now, deutsche bank popping in the premarket. this in tandem with some of the other european banks like the dutch bank ing also moving higher. the u.s. bank index, bkx, down 16% this year. we're watching that to see whether or not it enters into bear market territory. financials the leading losers in friday's session. we'll see whether or not they bounce back today.

couple of quick stocks we're watching, of course, chesapeake on the news it's going to be replacing five board members, four independent directors will be named. also auto nation coming out with strong may sales numbers. they were up 45%. jim, back to you. >> thank you so much. amazing. auto nation does nothing, you know, just stock was up. i thought it was up premarket. great to point it out. just shows you the slog. the slog is still very much with us although i see some cyclicals going up. let's shift to bonds and the dollar. rick santelli the double duty with me last night at the 10 -- at the 9 which was the 8 for him. rick, take over. >> thanks, jim. you know, we need specials like that because we're in a very unique situation, obviously. if you look at a chart, 2-day chart of tens rates have come back a little bit. now back above 1.50. wow. if you open that chart up a bit you can clearly see how the 10-year note continues to respond in ways that reflect, of course, the anxiety.

but it is also showing up in other areas. and this is unique. think about how some of the weaker hand companies are going to have problems funding down the road. let's look at two etfs. corporate grade in the form of the lqd. since april 1st. it's coming back. it's doing well. as the credit funnel narrows. but look at how the high yield etf contrasts that by moving lower. and that same dynamic is reflected in all of the index high yield spreads, whether it's barclays or merrill lynch. this is something we're going to have to pay very close attention to. some companies have been able to go to the capital markets, clean up their balance sheets. others, maybe not so much. it's going to be that much more difficult down the road. jim, back to you. >> all right. thank you very much, rick. it does seem that if the 10-year finally goes down and price yield goes up, maybe that's a signal that people want to buy some stocks. let's check out the latest moves in energy and metals. metals been good, energy disaster.

sharon, take over. >> jim, we're seeing a little bit of a rebound actually in the energy markets in oil prices right now after brent crude fell all the way down to a $95 handle overnight. wti touched the $81 handle. we, of course, have seen wti prices down about 22 bucks in the past month. more of a negative tone from china services pmi data coming out overnight. add that to the horrible jobs report we got on friday and, of course, still greater concern over what's happening in the eurozone. keep in mind as we look at brent crude prices here at a 16-month low, wti at an 8-month low, the spread there is still rather wide. around $14 or so. so some traders and analysts out there are saying that we may see that spread come in a bit and brent crude fall even further. whereas wti may be more of a value area at the moment. we're also going to keep your eye on, of course, what is happening to gold prices because gold seems to be holding steady right now. right around that 1620 area after the huge rally we saw on friday, some $60 rally.

the key components to watch for the week in terms of what the market is looking for is what comes out of the ecb meeting on wednesday. and as mary mentioned, what, of course, comes out of bernanke's testimony on thursday and the idea that there may be more quantitative easing, david, that is something that could send gold prices toward the next level to watch will be 1650. back to you. >> thanks very much, sharon epperson. worth pointing out it is another monday without any mergers. it's been quite some time since we were able to call a monday a merger monday, hasn't it been? given at least the conversations i've been having with those who are practiced in the art of trying to get companies to merge or acquire, it is going to be a potentially quiet summer. in stark contrast, in fact, to what had been the hopes and beliefs of many market participants only a few months ago. certainly as we entered 2012. where given all-time high levels of cash on balance sheets for corporate america, given all-time low borrowing costs, and the fact that the few deals that had been done typically saw

the acquirer's stock price go up, many anticipated we would start to see those kinds of large transformative deals that this market has been without for years. it would seem it is going to be another year without, as you take a look at global m & a year to date comparisons. that being may. see how that compares. you've got to go a long way back, don't you? okay. '09. but a long way back to really put that in some perspective. global m & a a bit higher. there is some activity in the emerging markets. again, you can see, of course, the '07 period, leading up to that, how enormous that was. what does this mean for wall street? well, fewer fees coming in. perhaps we're even looking at more layoffs as this year goes along given the lack of capital markets activity in certain corridors and m & a and advisory fees. we've seen some of the stocks, some of the companies, of course, that need an m & a environment to be robust somewhat suffer as a result. one of the reasons morgan stanley shares are down or goldman sachs. worth, jim, noting that lack of

confidence. there may not be any better reflection of confidence overall than a robust m & a market. the converse is true as well. >> this is rather incredible, david, right? you can borrow money for next to nothing. you would think someone could just do this. they just don't think the earnings will be there. >> ceos, their tenures are shorter now than they used to be. they don't want to make the big swing. we will continue to see, this has been the case in pharmaceuticals. the $2 billion deal by the bigger guys. $3 billion deal. but they won't do the wyeth deal that pfizer did a couple of years ago. they won't take the big swing. they know their terms are relatively short. they're on a shorter leash with their boards. some will argue with that. but that is probably the case if you look at the data. that may be another reason why. and even though there's been positive response from shareholders to the deals that have been done. we're talking about a market in which it's going to be the small deals, it would seem, if any at all. >> american politics? european worries?

what would you pinpoint? >> we've been asking that question of ceos all yearlong. not just about m & a but just generally. it's hard to know what exactly is at the root of it. is it lack of consumer demand that they see? sit worries about europe? is it the fiscal cliff at the end of this year? regulation? there's so many different reasons. >> speaking of big swings and cheap money, larry summers, jim, over the weekend. big ft piece about how we should do essentially what you've recommended in some ways. that is go long, borrow a lot of money now at these low rates. >> yep. i've not been a fan of many things that larry summers has said or done over the years. i will say that this was a great idea, although he wants to spend the money immediately. >> exactly. >> i just want to refinance. i've been telling tim geithner both behind the scenes and in his face, listen, refinance. make sure that we do not have a liquidity crisis in this country. sel sell $500 billion in 30-year paper. would that ever be snapped up

immediately. >> isn't that the fear? what happens if it's not? if the market wasn't there how bad that would look? >> even if you had to pay up 100 basis points, it would still be a home run. you could really -- this is a great piece of business for -- and i think one of the things that summers is right, is that you've got to borrow more. paul gruben is saying it's not tax cuts and spending cuts. it's borrowing and pumping up the economy. isn't that what we need? looking at me with two heads, david. >> i'm just thinking about what the response would be from the tea party or from most of the republican party. that's not going to happen in this environment. you can hear the criticism of it. i mean, if rick santelli were on, he'd be yelling at you. >> yes, he would. i don't like to be yelled at by rick because he's a buddy. >> probably yelling right now. >> if he's listening. >> come on, jim! >> i like rick so much. i don't want to argue with him. i like the comedy comity kind. >> as we mentioned to you, ceo robert benmosche quoted as saying he will likely have to

work until the age of 80. we asked you to complete the following sentence. if benmosche were right, i wish i had blank. let us know. we've got some of your answers straight ahead. as we take a break, take a look at some of this morning's early movers on wall street. high schools in six states enrolled in the national math and science initiative... ...which helped students and teachers get better results in ap courses. together, they raised ap test scores 138%. just imagine our potential... ...if the other states joined them. let's raise our scores. let's invest in our teachers and inspire our students. let's solve this. with scottrader streaming quotes, any way you want. fully customize it for your trading process --

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squawk on the tweet for a monday. as you might have heard, aig ceo robert benmosche tells in an interview because of the situation in europe people may have to work as late as the age of 80. which seems really, really old. this morning we're asking you to complete the following sentence. if ben mo say is right and i have to work until 80 i wish i

had blanked. maggie writes partied more all over world. amen to that. patrick writes not joined ancest ancestry.com to find most relatives died at 79. taken better care of myself and started work late ner life. dee writes if i have to work to 08, i wish i had married for money instead of love. >> existential crisis. what do younger people do if the older people work till 80? what where are the jobs going to come from? >> we're going to have to expand much faster than what we're looking at now, that's for sure. >> going to be tough. health care would be a good profession given the demographic bubble. >> we won't be able to pay for it any longer out of government funds. that will be bankrupt. >> hopefully i'll get my contacts cheaper with that ab acquisition of 1-800-contacts. >> private deal. terms not disclosed. >> usually that means it wasn't material. perhaps less than 5% of 12

points overall market value which is $22 billion. not sure what the number was. >> great ages on america play. people are losing their eyesight left and right. >> absolutely true. >> i use readers. anyone use readers? >> no. >> i got them from cvs. the ones with little lights on, makes you look like you're from mars. which confirms for people. >> the trading day still young. a lot more "squawk on the street" still ahead. coming up, market volatility hurting your head? >> he's got a headache. >> no, i don't. >> how about now? >> yeah, it's coming on. >> cramer's got the cure for the insanity. >> don't forget to dot the "is." >> six stocks in 60 seconds when "squawk on the street" returns. ♪ [ laughter ]

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fresh from the diamond jubilee, simon hobbs here to tell us what's coming up at 10:00. >> nice. it's still raining. good morning to you.

the u.s. economy is much stronger than we think. this is a major buying opportunity. so says the head of jpmorgan's equity strategy. he'll be here on the program. a sirius analyst will tell you seriously why facebook won't exist in five years' time. also there's just a possibility that the supreme court could rule on obamacare imminently. big hour. back to you guys. >> thanks for that, simon. six in 60 with jim. six stocks in just 60 seconds. we'll begin with nordstrom recommended buy at deutsche. >> third firm in as many days. i don't know. i just don't see a lot of upside here. i'm a seller into spring. >> td amer trade downgraded at citi. >> part of the short term interest rate problem. same thing with a lot of the regional banks. >> monster beverage, goldman raising their number gls this is the strongest and best chart in the chart book. i would not get in front of this if i'm a short sell zbler sales force buying buddy media. >> i think this is directed at exact target et. also me len yal media. be careful.

mark benioff trying to make a stand. >> monsanto. b of a raising the price target. >> a major preannouncement to the upside. name me one other. >> under armour. >> they're in the best position. cotton prices have just cascaded here. they buy a lot of cotton. they've got a lot of new technology. i like this company. >> for more on those names go to sots.cnbc.com. it's going to be a light data week, jim. we're all going to be waiting for thursday when bernanke speaks. we've already had someone at goldman double down on his call that they'll at least hint on something. are we waiting until then? >> i think we're really waiting for the anything, any meeting, anything on wednesday from europe. i think that, look, i think that bernanke's going to again try to calm things. even he has said, listen, it's up to congress. morgan stanley with a piece out late friday saying there's going to be qe-3. who needs qe-3?

the market's taking us there. >> what's on "mad" tonight? >> unigen. i'm trying to fe kous on speculations that are trying to keep people in the game. >> see you tonight. 6:00 and 11:00 p.m. eastern time. when we come back, more fallout from facebook. we'll talk to an analyst who thinks the company may disappear in just five years. back in a moment. tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 the spx is on my radar. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus. tdd# 1-800-345-2550 i can custom build my own screens tdd# 1-800-345-2550 or use predefined ones to help me find tdd# 1-800-345-2550 possible trading opportunities quickly. tdd# 1-800-345-2550 i can also bounce my ideas off their trading specialists - tdd# 1-800-345-2550 on the phone or face-to-face. tdd# 1-800-345-2550 and i can trade wherever i want, whenever i want. tdd# 1-800-345-2550

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welcome back to "squawk on the street." may factory orders take a dive. down .6%. significantly lower then the up .2 to .3 we were expecting. in addition, a number i don't often mention. we're looking at a may ism new york. it plummeted from 61.2 to 49.9. as we see interest rates hover closer to 1.50 in the 10-year and look at the equity markets starting to give up ground, many traders down here talking about they know there's issues in europe, but there certainly are economic issues domestically for the market to take a look at as

well. carl, back to you. >> all right, rick. thank you very much. for some good numbers, the road map for next hour. markets edging a little lower. dow down 36 as people hope for a response to spain's banking crisis. offsetting yet another round of weak china data. we've got a top ranked market panel to talk the next move amid equities as we gear up for wednesday's ecb meeting. facebook shares still trending lower. find out why one investor says the social network giant will be obsolete in just under a mere five years. with jpmorgan out with a report friday saying that may's job's number just might not be as bad as the data made it seem. we're going to talk to the man behind that report. jpmorgan's chief u.s. we canities strategist tom lee for his take in just a few. chesapeake energy, of course, this morning announcing that it has some board changes. four directors have resigned with a fifth retiring. new independent directors will be added. one will be carl icahn or a representative named by mr.

icahn. chk also close to finding a new independent chairman to replace mcclendon. let's get more on that from cnbc's kate kelly. good morning, kate. >> good morning, simon. how you doing? interesting news out of chesapeake this morning. they have worked with their two largest or two of the largest and most disappointed investor. that's carl icahn and southeastern asset management. to come up with a plan to sort of preempt any further turmoil at friday's annual meeting. essentially they're going to elect several new members to the board. they will use shareholder input in order to decide on those folks. it'll be carl icahn himself or someone appointed by him and another three folks who have the strong support of southeastern asset management, which owns almost 14% of the stock. this will take place a little bit later in the month, though. going into friday they have a short list of chairmen candidates. as you may recall they're going to replace aubrey mcclendon as chairman. he'll stay on as ceo. as soon as they can find somebody, he's going to step down at chairman. they're working on that list. they have two or three people that are seriously engaged, i'm

told. they will have that person in place by june 22nd. but not in time for friday's meeting. once that happens, they'll also put together a new slate of those additional four directors. so what you essentially have is a very reconstituted board. you'll have mcclendon staying on as a director. you'll have -- assuming they're reelected on friday, burns, hargas and i believe it's richard davidson standing for re-election friday. you'll also have lou simpson who was elected recently with the backing of southeastern. they're really trying to get active on the corporate governance front here amid a cry from a number of shareholders. you have the new york state controller, thomas anapoli suggesting people withhold votes frlt two chairman standing for re-election as a protest. that's one among many complaints that we've seen in recent weeks against the way this company does business at the director level. we'll see. we'll see. i mean, shares are rallying a little bit today, up more than 1%. i don't know if it'll be enough to kind of satisfy the critic.

the other thing i'm told is that they're working very aggressively on selling some natural gas shale assets. we may hear some more news on that front this week. i don't know the name of the shale play that they're close to finalizing a deal on. although it's been in the news that they're trying to come up with a buyer for parts of the permian basin. possibly that could be it. i don't know for sure. >> that is probably paramount for investors or at least choosing to buy, sell or otherwise abstain in terms of the stock right now. we should also point out, there are going to either potentially put in majority voting for directors. if, in fact, it gets voted in at the meeting this week, it will apply immediately. so a couple of those directors up, if they were to put in majority voting and then not get a majority, that could create an interesting outcome. and they are going to destagger the board as well. >> on that second point, david -- >> you'll have nine directors all up. >> on that second point, i'm glad you mentioned that. this has been a point of controversy. i believe it's calpers right now asking the company to reconsider

their current incorporation in the state of oklahoma which has allowed them to have this staggered board so that not everyone is re-elected every year. the company wants to see what happens with that proposal. whether there's enough support behind the delaware plan to do that. if not they'll voluntarily make sure everyone is re-elected every year even under oklahoma state law. which is unusual in the sense that it does allow for those staggered boards. kate, for people watching, wondering if they should pick up the stock, what are we able to say to them in terms of greater realization of value for shareholders? can we anticipate the stock will rally from here? what do you think? >> simon, i think there are two issues here. one is aubrey mcclendon and the other is chesapeake's exposure to natural gas and how quickly it can become more of an oil play. on the aubrey front, he has foes and fans. i think a lot of people find it hard to imagine the company without him. he, after all, has built the second largest gas in the company out of chesapeake.

his corporate governance issues, compensation, the fact he's required personal loans over the years has been controversial. secondly, you know, you've got natural gas prices at a terrible level. a lot of people are bullish three or four years out. but can the company kind of hang in until then? can they move as fast as they need to to pay down debt and become much more of an oil company kind of remains to be seen? >> thank you very much, kate kelly at hq. a quick check on facebook here. we mention this because the stock is down by about 4% hitting fresh all-time lows intraday. we're down to about 26.61. the new low here, 26.57 hit moments ago. this is one we continue to watch. again, a steady drum beat of negative analyst commentary today. last week it was s&p taking down estimates. again, facebook new low here. back to the markets, dow down 45 after the worst start to june for the dow ever. want to take a look at where investors can find some opportunities amid the turmoil and the volatility. richard bernstein is ceo of

richard bernstein add voi sors. mcneill curry . good morning. everybody's talking about the 200-day moving average for the s&p today and how negative that is historically. characterize your level of concern sfl. >> carl, it's clear the economy is going through a growth slowdown. no doubt about that. i think that's pretty obvious. i think people know that. how long is that slowdown going to occur? is it going to have a meaningful impact on markets going forward? i would say i think there are some positives that are developing here. sentiment is excellent. interest rates are at 1.50 on the 10-year. gasoline prices are falling. there's some -- there are some positive things out there that i think people should balance against that growth slowdown. >> which -- so essentially you're saying in terms of equities, what, stand pat?

look for some bargains? under what kind of screen? what do you do with stocks right now? >> oh, i would say, carl, given the sentiment backdrop right now where in our proprietary sentiment, we have officially hit capitulation, i think it's more than standing pat. i think people should actually begin to look at the equity market quite constructively. keeping in mind that the best times to invest are when things are the darkest. and certainly that's what's going on right now. that's what our work seems to argue for. >> mcneil, i've got to ask you about the 10-year yield. how low are we going to go? we had jim cramer on this morning predicting 1%. >> i'd actually like to address the comment about sentiment. i'll take a little bit of a different approach there. we're on the topic actually not just equities but risk assets generally. while certainly sentiment has gotten worse as we've seen markets come under pressure, by most measures of investor anxiety, we're not really, i think, at the extremes from which we should see panic lows. whether you look at something like the vix index which

traditionally tends to peak out at a minimum of 30% or 40% to 45% or if you look at pretty much u.s. swap spreads, pretty much across the curve, none of those have reached the levels from which we tend to see real extremes and anxiety which coincide with market lows. we're certainly getting there. i don't think we're there yet. i will take a little bit of a different tact. i don't think you should be sticking your hand out to try to pick up some risk assets. beyond just the equity markets. if you look at commodities they still look quite negative. i think copper could actually fall about maybe 25% from current levels. what does that mean for the rate space? what tuz that mean for treasuries? that means we've got further to go. if you think the bull market in treasuries has run its course, i'd say, you know what, think again. as long as risk assets remain under pressure, i could see 10-year yields trading down to 135, 137 quite easily. >> these are huge calls that you're making. >> not really, simon. if you look at what we just did, right, we traded south of 150

basis points in u.s. tens just on friday. that's not that much of a move to 130, 135 or thereabouts. >> it was the copper call that particularly stood out for me. that you think copper could fall by 25%. copper, of course, let me explain it, is a proxy usually for global growth. >> yes, yes. all right. let's talk about china for a second. think about what the shanghai composite's done. it's in the 3 1/2 year bear trend. there's been no indication as of yet that that thing has run its course. in fact, the six month range trade that we had been in just looks like it's resolved to the downside. don't forget, you know, shanghai composite was down over 2% and change overnight. the path of least resistance is clearly to the downside there. i think copper will continue -- continue to fall. in fact, frankly, if you look at copper prices, there's a technical argument that says -- i'm not completely on board on this as of yet. but it does say that we could see a potential move down to

2009, 2008 lows. again, i'm not saying we're going to see that. i think the 25% move is far more reasonable. but base medals across the board don't look constructive. i think as i just said, risk assets in general don't look like they've run their course yet. copper should continue to suffer. >> finally, rich, under what kind of onus is the fed chairman on to soothe the markets or investor sentiment on thursday? >> i think he will obviously say things that are going to be quite constructive and try and make people feel better. but i think it's important to remember that what's happening here is the united states is benefiting from the rest of the world's problems. i think that's critical. i mean, it was mentioned before that risk assets haven't run their course. i agree with that. but most risk assets are based on credit. and are based on non-u.s. economies. i agree with that. i think that's where the ultra risk is, is in risk-on assets. but the fact that risk-on assets are not working is benefiting

the u.s. economy dramatically. and that's what i think people are underestimating. you know, everybody wants the fed to do qe-3. i will remind you that europe and china are right now doing qe-3 for the united states. we have a 1.50 10-year. the fed may add icing on to that cake. i think there's a bigger story here in that the united states is benefiting. we have lower gasoline prices. we have lower agriculture commodity prices. we have lower industrial prices. mostly because of the weakness outside the united states. >> yes. few tail winds and a few head winds, too, guys. appreciate your time. richard, macneil, thanks so much. as you heard just moments ago, facebook shares hitting another new low in today's session. up next, one investor claims the social media giant will be all but nonexistent in just a mere five years. find out why he is beyond bearish. >> jim is a friend, clearly, as we go to the break.

that's blatant advertising from cramer. >> i friended him. he didn't accept. we're back after this.

now back to the fallout from facebook. which, by the way, hit another new low this morning. 26.57 was that level.

facebook is down 27% from its ipo price of $38 a share, making it the biggest two-week loss of any ipo since 1995. our next guest has been avoiding investing in facebook. he says the social network is fwoing to disappear in five years. eric jackson is founder of iron fire capital. also a forbe's columnist. he joins us now on the news line. eric, always nice to speak with you. aren't you assuming that facebook won't be able to evolve? because you're essentially saying that the technology life cycle of companies are compressed these days. >> yes. >> you're also assuming it won't be able to evolve. >> yes. what's really interesting is specifically when you look at web companies, melissa, there's -- there's really an interesting phenomenon going on right now. there's really been three generations of web companies over the last 15 years. there were the first big portals. webone.o. yahoo! and so forth. who came along who were all abouting a gating information, getting you in one spot. then with facebook we have the dawn of social or web2.o.

maybe a couple of years ago we really have the advent of companies that are purely focused on mobile. they don't even have websites anymore. they are entirely focused on maximizing in a phone or a tablet form factor. what's most interesting to me is when you look over these three generations, is that no matter how successful you are in one generation, you don't seem to be able to translate that into success in the second generation. no matter how much money you have in the bank. no matter how many smart ph.d.s you have working for you. look at how google has struggled with moving into social. i think facebook is definitely going to have the same kinds of challenges moving into mobile. >> you also think google would go away in five years. is that correct? >> yeah. google's obviously sort of the king of that first generation that i mentioned. they've had really the perfect business model with ad words. they've been able to keep that going, obviously, through the second generation and now into the third. but i think as you said at the very beginning, you know, the world is moving faster.

it's getting more competitive. not less. and i think those who are dominant kind of in their prior generation are really going to have a hard time moving into this kind of newer generation. specifically with google, i think the world of just typing into a blue box on your desktop pc to get search terms, that's going away. in the world of mobile, search is far less profitable for google. >> the thing is, eric, as we go through this process more and more people, of course, come into the world of technology. and now you have facebook with 900 million users. >> right. >> you know, those users will be sticky for a long time. you can go back, for example, to yahoo! which has not been the best managed of all tech companies. it is still around after a very long time. surely facebook similarly could be around for a very long time and monetized. >> you're right, simon. i mean, i'm saying in five, ten years they're going to disappear in the way that yahoo! has disappeared. yahoo! is still making money. it's still profitable. still has 13,000 employees working for it.

but it's 10% of the value that it was at the height of 2000. i mean, for all intents and purposes, it's disappeared. myspace is still around. they still have a website. but, you know, for most people, it's disappeared. i think that's what i see for facebook. i don't see -- i think facebook's not going bankrupt. i think what's going to happen is something new is going to come along that we haven't seen yet, probably, doesn't exist, and yet people are going to be fascinated by it and attracted to it and away from facebook. facebook didn't become facebook by -- >> eric, it's david faber. they've got 900 million users. i mean, they've got an installed base that's just almost insurmountab insurmountable, it would seem. it would seem to me they've got a shot at making that mobile transition over and over and over again before somebody can really do anything to dislodge them. >> it doesn't happen, david. rook at google and how they've struggled to get into social. everybody has said again and again, well, you know, google will just -- they'll buy somebody.

they'll do something. they'll use their cash. and they'll suddenly get into the space. yet they've struggled. why have they struggled? because it's just not in their dna. what made them successful in generation one is not what makes you successful in generation two. doesn't matter how many bolt on acquisitions you put on something. it's still basically that core business. organizationally their structure to support that core business. i think facebook, they can buy a bunch of mobile companies. but they are still a big fat website. that's different from a mobile app. >> eric, thanks for your time. appreciate it. eric jackson of ironfire capital. >> which brings us comfortably to our new sweep stakes competition on "squawk on the street" which as you guessed resolves around facebook. where do you see the bottom for facebook shares? you have until june 12, about a week before the one-month anniversary of facebook's public debut, to send us your predictions. what is the bottom for facebook.

tweet us at cnbcsquawkst with hash tag nail the number. >> cnbc embroidered peacock logo. it's quite a nice hoodie, i have to say. i wear mine to the gym. >> do you? >> yeah. >> look very comfy. >> david faber's signature on the back. >> no. maybe i should bring mine in. >> you directed me to take up the entire back, and i have. i signed it. >> team faber. we should all have those. >> if i had a team, i would do that. >> i feel like your entourage. >> you are. >> thank you. as you know, friday saw the dow plunge 275. that was the worst loss of the year. as worries continue over global growth and spain's banking system, as that weighs on investors, are the netechnicals pointing to a further leg lower? we'll check the charts after the break. [ male announcer ] at scottrade,

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a lot of people asking where we now stand after a brutal five weeks for the market. of course, importantly on friday, a lot of chatter about the fact the s&p 500 broke below its 200-day moving average. joining us now, u.s. market technical strategist with rbc capital markets. good morning. >> good morning. >> how bad is it, then, that we've lost the 200-day moving average on the s&p 500? because last time we did that, we actually fell afterwards quite badly again, did we not? >> yeah. it's certainly a reference point. i think if you can look back at

the previous correction since 2009, it was a trading range in 2010, call it 1050 to 1100. in 2011 there was a trading range between 1100 -- sorry. 1050 and 1100. around those levels is where i think the market finds support. the upper band of that 2011 trading range takes you somewhere between 1250, roughly where we are now. plus your minus 25 points. the 200-day is a reference point. but the upper band of that q-4 trading range, call it 1250, i think is much more significant. a lot of the indicators are getting very oversold. you've got to expect some type of trading bounce from around these levels over the next couple of days. >> interesting. >> does a duration of the selloff, robert, make a difference? one technical analyst this morning pointed out that the selloff happened between april 2nd and june 1st and it was a 10% decline of 144 points. does that make you more optimistic that there is the potential for a rebound? >> you know, i think you really have to look at this in two contexts. one is very short term.

and the other analyst has a very good point. really the correction began back in february where all the cyclicals began to roll over. that's already quite a bit of time. the duration is now starting to get quite long for a lot of stocks, particularly the economy sensitive names. the bigger point beyond a trading bounce is that we think the cycle that began in 2009 and peaked in april of 2012 is rolling over. and that the next six to mine to possibly 12 months could be quite challenging for equity markets looking through 2013. that's the real issue. >> what about oil, robert? a lot of focus about the breakdown there. >> so, you know, again, another global macro barometer getting very, very oversold. i think this low $80 range is going to provide at least tactical or trading support for the commodity. i'd expect a rebound from these levels. i think the more important commodity to look at here, though, is gold. there is where we're starting to see some di vur jenss develop. gold is starting to hold up. i think it's a much bigger and more important event technically

beginning to develop there. we think gold is heading higher off this 1550 level. probably back to the old highs. >> robert, some have tried to compare this selloff to last spring's selloff. the vix looks a little different. and sentiment looks a little bit different. do either of those tell you that this summer might be different than the last? >> absolutely. those were all variables to consider. the thing that really strikes me as more important than that is the di vur jenss between what we're seeing in the emerging markets and the small caps which did not confirm the highs in the s&p in april. that's a different story from what we saw last year where those indexes were leadership and continue to be leadership. they really began to struggle in the fourth quarter and the first quarter o f this year. that is much more important technically in my opinion. >> okay. suki cooper will join us shortly from barclays to talk about gold. for the moment, robert, thank you for joining us. the view there from rbc capital markets. may's dismal jobs report sending equities sliding on friday. one report out of jpmorgan

claimed the number might actually be hiding some strength to come over the summer. straight to the source. sitting with the man behind the call, jpmorgan's chief u.s. equity strategist tom lee in just a moment. if you are one of the millions of men who have used androgel 1%, there's big news. presenting androgel 1.62%. both are used to treat men with low testosterone. androgel 1.62% is from the makers of the number one prescribed testosterone replacement therapy. it raises your testosterone levels, and... is concentrated, so you could use less gel. and with androgel 1.62%, you can save on your monthly prescription. [ male announcer ] dosing and application sites between these products differ. women and children should avoid contact with application sites. discontinue androgel and call your doctor if you see unexpected signs of early puberty in a child, or, signs in a woman which may include changes in body hair or a large increase in acne, possibly due to accidental exposure. men with breast cancer or who have or might have prostate cancer,

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one hour into trading here

are a few of the stories that we're squawking about. 7:31 on the west coast. 10:31 right here on wall street. shares of dell falling to new 52-week lows. the stock has lost or the company's lost almost a quarter of its value over the last month after disappointing earnings. american express, boeing and johnson & johnson among today's biggest gainers on the dow jones industrial average. and factory orders down unexpectedly in april by .6%. falling for the third time in four months. over to brian sullivan for a quick market flash. >> let's hit walmart, carl. a company i think you know pretty well here. over the weekend even though there was a lot of discord about renomination of board members, lee scott and mike duke both got through. they received about 13% and 15% votes against from large pension funds angry over their bribery scandal allegations. still, all slates for all boards of directors made it through, no surprise. because the walton family controls most of the stock. carl, by the way, listen, walmart's up today. i don't know how to read this in

some sort of a macro way. i did find ut ironic when the markets were down a few days ago. you'd look at your screens. 29 dow stocks would be down. one would be up. the one that was up was the only one of the dow 30 that had been subject to a bribery scandal allegation. >> absolutely true. walmart and at&t. the only dow stocks positive for the week. incredible. thanks, brian. the market is now pricing in more action by the fed. whether they believe it'll do any good or not. cnbc's senior economics reporter steve liesman joins us now with the results of his exclusive cnbc fed survey. i'm guessing, steve, the questions were asked just after the jobs report? >> exactly. we did it from noon till about 6:00 last night. kept it open. 16 responses. the survey shows the market looking keenly to fed chairman ben bernanke and the fed to come in with more easing to boost a sagging economy. in the wake of that weak jobs report friday, 58% now believe the fed will conduct additional asset purchases to try and lower interest rates in the next 12 months. that compares with just 33% who

thought so in our april survey. among the comments from the 60 economists, strategists, fund managers who answered our survey, dean baker writing in -- from the center of economic and policy research -- the prolonged period of high unemployment is by far the worst crisis the fed has faced in the last 60 years. it should be acting more aggressively to counter pit former fed prosecute lee hoskins saying from pacific research institute, qe-3 is a loser. does nothing for employment and raises the risk of a clean fed exit from its current policy. skepticism about the effects of fed policy is widespread. but market participants don't think the fed will wait long to act. 42% of those who say the fed will act say it happens in june. 47% say july. asked what else the fed will do to drive long-term yields down, 42% think it will extend operation twist. that's where it buys long dated treasuries and sells those -- that is up from just 25% in april. only 24% think the fed will do nothing down from 42% in april.

lynn reeser writing in, the global economy has now suffered from a massive loss of confidence. the fed's only option is to flood the system with liquidity. in hopes of reviving risk appetite at least in a few corners. all of this comes with a slight downgrade to the economic outlook. interesting, though, no recession calls just yet. cnbc looked to changes in the forecast for seven watt street economists, averaged them up. they found they shaved only ten basis points. that, of course, masking sharper markdowns for individuals. ubs took a half point off its second quarter gdp outlook all the way down to an anemic 1.5%. jpmorgan takes a full point off its growth outlook for the full quarter. saying the anemic 2% growth rate we had this quarter is going to continue for the rest of the year. david? >> all right, thanks very much, steve liesman. as everybody knows, at this point u.s. treasury yields had fallen sharply. although modestly higher this morning. the benchmark 10-year note, you still see it there at 1.51.

flirting right around that 1.5% level. what does this mean for the markets in the future? let's ask managing director at armored wolf and joins us right here at post nine. your alpha fund had a good may. up 1.4%. you were short copper. you were short aluminum. you were short european bank stocks. i don't know if you were short the treasury, though. do you stay with a lot of those positions at this point? >> i don't think that the move that we saw in may is over yet. in friday's report confirmed that. europe is closed mostly today. we're not seeing the follow on action from friday. but i'm not looking forward to the rest of this week. >> you're short the euro as well. you call this the defensive posture. you say you're staying with it. why? >> well, the euro has moved some. it's moved 10% in the past, what, four or five months. but that doesn't even begin to reflect the required move in the euro. for europe to be competitive, for europe to kind of have an

exchange rate that reflects the seizing of its economy, i think you need a europe closer to par or lower. >> but that's not actually how europe is. a lot of europe is doing very well. in fact, unemployment is falling in germany, for example. so it's not immediately obvious that the euro should be substantially lower or move lower. it follows one of the great stories of the euro, one of the great mysteries is why it hasn't broken for so long. admittedly, now it has. for a long time it was way overvalued for people like you. >> sure. there is a institutional, i think, denial going on in europe. uk is going into recession now. southern europe is in a disaster case. spain's banking system is seizing. even germany's having problems. >> that sounds more like a lehman scenario, what you're describing there. in some ways i'm surprised you wouldn't be just pulling back entirely, given that's what a lot of other market participants would choose to do if they had a similar viewpoint. >> i wish we had pulled back

more. you know, we made 1.36% last month because we take measured bets. but the bets on the short side are the ones that are paying off for us. >> does this necessarily make you short of or skeptical of china and some of the other emerging market economies out there that are dependent on europe and china as trade partners? >> china had a peak pmi over the weekend. china probably has more dry gun powder than just about any other economy in the world. and that's the good news. they are having a slowdown because the chinese officials engineered a slowdown starting about 18 months ago. they didn't like the high real estate prices. obviously about six months ago, they started to take the foot off the brake and they're starting to put it on the gas. they're actually managing things down. they came out with a relatively hawkish statement last week. which took the market down. but it seems like they're trying to engineer a soft landing. it's looking more like they might be a hard landing.

>> there were two reasons why you might get very powerful rallies in europe this week. this month. forgive me. one is the greek election going a certain way. the second is if there are eu wide bank guarantees. you're very short a lot of assets. are you standing by ready to cover those shorts? >> there aren't really any pretty scenarios for europe. i mean, absent -- absent the wealthy people in europe repay treeuating their assets from offshore, the governments themselves are essentially bankrupt. the ecb is essentially bankrupt. if greece were to be taken into the european union, then germany's finances would look worse. if greece stays out of the euro or falls out of the euro, then you obviously have big questions about spain and portugal and italy. there aren't too many pretty scenarios for europe. clearly, if the euro depreshuated by 30% or 40%, possibly then you could see a competitive -- >> john, we go to go. we're getting a lot of

predictions today on the 10-year. you think it goes lower from here? yield. >> the short-term trade for 10-year yields is lower. but obviously, you know, looking out three months or six months or three years, i could see 10-year yields at 4% or 5%. >> we'll leave it there. thanks for joining us. appreciate it. >> meantime, gold is retreating this morning on some speculation the fed could unveil a new round of monetary easing. but the precious metal has been gaining ground in the past week as investors search for some tafty plays. suk cooper is commodities analyst over at barclays and joins us this morning. suki, always good to have you. welcome back. >> thank you. >> sounds like you think short term the trend is positive. longer term, though, more questions about inflows and outflows and fundamentals, right? >> i'd say in the near term some of the factors we were concerned about still kpus. the broader macro environment and the key risk events in june still look like this should be positive for gold. this is gold's opportunity to real le re-establish itself as a safe haven asset. longer term we still need to see that incremental investment te

ma demand to drive prices higher. when you're looking two, three years out the trend does look to be lower for gold. >> right. but in the shorter term how much room is there to dance here? i see a q-2 forecast of 1565. which is clearly not material from where we are right now. >> in the very near term there are some key risks for gold. on the downside the physical market still looks fragile. we're still not seeing very solid demand coming through from india and china. on the other hand, physically back to etfs are holding up very well. having said that, gold still needs to battle the dollar strength we've been seeing. although last week it did manage to establish itself as a safe haven asset. it also needs to behave like a safe haven asset given the heightened macro uncertainty in europe and eventually in the u.s. as well. >> are you taking your average target for this year or next up or down?

>> at the moment we have 1760 for 202. 1790 for 2013. we're still comfortable with those price targets. we still see upside in the near term. >> suki, i'm curious whether or not you factor in hedge funds positions in gld, for instance, into your short-term forecast. we've seen a lot of hedge funds go into the past few months, go into the year, very long gold. they hold a sizable position in gld, for instance. and there's some talk that with redemptions coming around the quarter this month, that there could be sales of gld. does that factor in at all, or do you just remove that entirely from the equation? >> i'd say there's two key factors to watch here. how the etfs perform on gld. also the speculative positioning in terms of -- positions as well. here we've seen growth short positions actually reach their highest since september last year. that was the data reported until tuesday. so there has been a short covering rally. and there is -- in terms of short term speculative positions

which is actually positive for gold. in terms of gld and broader etf holdings they've currently prove to be quite resilient. there's a growing risk that -- at current levels certainly above 1600, the bulk of the etf holdings are still in positive territory. so they should still hold up to be quite robust. >> i don't know how you do it. talk about a challenging commodity to cover these days, suki. thanks for your time. >> thank you. the u.s. economy isn't anywhere near as bad as you might think from the figures. the nonfarm payrolls report is wrong because seasonal adjustment doesn't work out and now is a major buying opportunity. so says thomas lee, chief u.s. equity strategist at jpmorgan. he's with us next on cnbc. this man is about to be the millionth customer. would you mind if i go ahead of you? instead we had someone go ahead of him and win fifty thousand dollars. congratulations you are our one millionth customer.

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a weaker than expected may jobs report certainly weaker than expected. surprise wk in fact, sending the dow into negative territory for the year. are may's farm numbers not as bad as they might seem? tom lee is a u.s. equity strategist at jpmorgan. tom, it's a pleasure to have you with us. this note was so widely circulated on friday. there's so many e-mails coming in. i think people were focus on this sentence out of your note. think about it, you write, referring to the nonseasonal adjustment to the payroll data. we are talking about the best number since 1999. yet the may 2012 payrolls figure seasonally adjusted is one of the worst since 1999. you aptly ask, what gives? which led you to believe there was a surprise coming. walk us through that logic. >> sure. you know, just a little background, i think one of the things that's been peculiar we've noticed the last couple of years is economic data tends to suhr price us on the downside from february to may.

if you look at surprise index, it always seems to trough around june. then all of the sudden we have major surprises all the way through the -- through early -- the early part of the following year. so it got us to ask ourselves, maybe some things are going on with the seasonal adjustments. we look at the may payrolls data. the establishment survey had 800,000 jobs added for may. which is 10% better than last year. it's really only bested by '04 and '07 which were around 900,000. as you know the seasonally adjusted number was one of the worst. if you look at the household survey which i think is another way to look at, you know, employment trends, the unseasonally adjusted may was 732,000. that's the best in ten years. so it does make us think, well, maybe the data is seasonally skewing to the downside. are there surprises coming over the next six months? i think there are. gasoline looks like it's going to be a huge tail wind. with the drop in oil so far, with brent or wti, looks like it's about $100 billion of tail

wind in the second half of this year. mortgage rates have actually fallen to historic lows. housing seems to be bottoming. then auto sales are strengthening. i think there's tail winds building in the economy. >> so, tom, now is the time to buy. you say here, june/july is a high quality buying opportunity. >> yes. i mean, i think we're getting close, simon. i think the things that we just haven't seen yet is capitulation. you know, i think we need to see the vix get to that 30 to 40. we need to see the percentage of stocks trading above their 200-day drop to that 10% to 20% level. so a real sign of a washout. but, yes, i think, you know, i think if you had to say at 1270, is it a good time to sort of sell everything and forget about stocks for the rest of the year, i think that's a huge mistake. i think it's a time for people to say, listen, we're going to get close to really high quality buy signal. what do i want to own as the economy starts to show some resilience in the second half and lower gasoline? what stocks are going to start to surprise us? i think the story really still continues to be that the u.s. is

going to be sort of the focus of growth globally. >> tom, i mean, you're not -- you're not making any bones about it. you say buy domestic cyclicals. >> i think that the tenure itself is already cooperating. we know it's because people are doing equality. but it is lowering the risks of the country. but on the other hand, if the market has to be comfortable, we know that the turmoil in europe, the weak current economic day and the market should take comfort from that. >> i want to follow up on that in terms of the presidential

odds. in your note, when i first read this and circulated among traders there are a lot of conspiracy theorists about this 789 leading up to the presidential elections. there are a lot of comments about that. there could have been adjustments made on purpose. >> i think the economists who compile this data standby their integrity.

>> we're going talk to an investor who warned to stay away from apple shares. is he sticking by his am case still? first, rick is working on the next hour. hey, rick. >> good morning, carl. you know, the president made a speech last week and of course referenced the end of the year and what will happen when the tax code is changing. you know it's been the bush tax code for a long time. i don't know if letting it expire or saying that we need to work on a good tax code that people can count on. and the other topic is the president talked about talking

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>> shares of facebook pairing its losses. hit a fresh all-time low. 26.57 was that level. we should remind you of the contest to guess facebook's bottom. >> a sweeps stakes. >> you could win this. a hoodie. you could win this. you would win this. >> it's much nicer. >> melissa signed the front as well. >> we don't care. >> and everybody else. >> face the number. >> is that what it is? >> yes. >> you have a future on the price is right. >> tweet time. aig saying in an interview because of the situation, people will likely have to work until

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>> the ceo of aig saying that because of the situation in euro europe. >> john writes, i wish i had a vacation. if i knew i had to work until the age of 80, i wish i had married that rich gal. speaking of money, what is coming up on fast money? >> we will be speaking of whitney. he has had a rough month. we will see how he is gearing up for the month of june. >> we will see you all later. see you in half an hour. if you are just joining us this morning, here is what you might have missed both times today.

>> america has. >> if we do maintenance project s s. >> how do you get any sort of long term fix when you go ireland there is no money flowing in from the outside. >> it could turn out to be that

they are the rushl revenue accelerator? >> give mae break. good night moon, good night facebook. >> keeping in mind that the best times to invest are when things are the darkest and certainly that's what is going on right now and that's what our work seems to argue for. >> good morning. welcome to the third hour. get a check on the markets today after the worst beginning to june for the dow ever. marginal losses today. dow is down almost 11 points. and the nasdaq, the only one that has not crossed below the moving average. boston scientific and biogen two of the biggest gainers. boston scientific let's get to

our road map. markets taking a breather. discussing how you should be positioning your portfolio to stay in the green for the rest of the year. plus the fund manager who told people to stay away from apple. if you had listened, you might have saved some serious money. we will see what he is telling clients now. we will see how the overseas but it is not going anywhere. is that a positive for the stock. the answer to that and a lot more is coming up in the next hour. first we will start with a hunt for value.

>> carl just mungsed that we wanted to take to heart what jim cramer discussed earlier. yielding growth considering where stocks are relative to that 200 day. we took the whole s & p. we got almost 300 of them. 144. but when we factored in 20% revenue growth, the list went to 21. here are name ace cross several sectors iffer you. how about a utility. if you want to bank with just u.s. exposure, fifth third made

the list just below the trend. a 24% year-over-year growth. two dow names came up. down double dimgts from its 200 day averagement that could be a concern concern. >> pop on over. the president and jobs today. hey, rick. >> good morning. you know, friday the president gave the speech and i know.

>> if you have $3,000 a year extra, that helps you pay down your credit card. good for business. >> i know that some are giving the president a bit of a hassle. listen, he was in front of a crowd. i don't have a problem with. what i have a problem with.

just rooking at this in ice ration. and i think the worst part is not including in the conversation all the things that -- just makes the uncertainty that much larger and any benefits that much lower. and finally, was there any notion there about how to deal with the deficit or the baseline spending at crisis levels is low. and that, of course, is entitlement, health care and tight programs. >> congress should pass a bill. thousands of teachers ask firefighters and police officers on the job.

>> it is about all those who have retired. the current teepers, firefighters and policemen ought to be upset. they are taking over a job where their job is in jeopardy. and their cost and that really is the issue. and how do i know it is? >> carl, back to you. >> good points. we will talk to you in a little bit. our capital markets editor worked some overtime last night. >> we know what facebook did to retail confidence. we know on thursday, right

before jim came on cnbc and spoke with maria. interestingly enough, does a great job, he has joined us on the show before. ran some of the numbers. take a look at what happened late thursday afternoon. we know that gorman came on air later that afternoon and talked many times about a longer term perspective. how the stock had had the best day since trading public in terms of percentage gauge from low to high. if you. this is pretty good evidence. they did, you draw your own conclusions in terms of what does it mean. it is just another thing that creates this image that facebook was just a bad thing for retail

confidence. >> okay. let's wait a minute here. you have schooled us. >> there has been so many things going back to that ormgal pricing that i still can't figure out. here is the point. if they did not do this, why have they not disclosed yet how much stock they bought in terms from the day that deal with us priced? i just don't know. i wonder why did it spike up. >> if i'm wrong and i drawing

false conclusions, please shout out and tell me so. >> i would imagine that you think that the short interest was significant enough to spark a short rally? >> traders tell me there was a big print that went up after the 145 change of volume. there was a big print that went up and cells stepped away thinking this was a size by order. again, there is nothing illegal. we have to make this point. nothing illegal about paying for the tape. you draw your own conclusions. >> jaws were on the floor on friday. we will talk to you in a little bit. >> david, always good to have you.

>> risk assets look particularly cheap. >> in the short term we look at a couple of things. first valuation does look more attractive. 11.5 times, not quite as low as it got to back in the fall when it got to ten and a half times. still attractive. volatility now rising. that's usually a good indicator, but the problem is on the catalyst front, there could be negative catalysts. there could be positive. so it's a mixed picture. >> what do you make of the fact. what do you make that it's not back to 30 and 40? it's not as aggressive an indicator. >> it's true.

certainly as you point out it could go higher. >> 60% of those polled believe that the fed will react in those 12 months. what brings them to the table? i mean, does the fed respond only on a market crash? will they respond if it is a slow grind over two or three months? >> the fed has been clear that they are looking at very critical values. they are also looking at price stability. on that front we are seeing measures of core inflation. that could be another catalyst to get them to move.

i think the odds are increasing that it will see some further action from the fed as we approach the meeting later this month. >> overall would you say you guys have gotten more defensive as we worked our way into summer? is it all about utilities and telecom. >> we are taking a little bit of a contraryian stance. we are in several weeks of a sell off already. somewhat elevated. >> interesting. david, appreciate your time. as always, thanks a lot.

>> yeah. >> get the market flash here. >> hot dogs. i'm not talking about my work here, but nathan's hot dogs. obesity is not stopping people from eating hot dogs. keep that in mind but the stock is up about 4%. sit near an all time high. >> it's nathan's right? >> it's an icon. >> that's right. thanks. >> meat in tube form. >> when we come back he told you to stay away from apple two months ago and now stocks are down more than expected. i went to a small high school.

the teacher that comes to mind for me is my high school math teacher, dr. gilmore. i mean he could teach. he was there for us, even if we needed him in college. you could call him, you had his phone number. he was just focused on making sure we were gonna be successful. he would never give up on any of us.

>> what is he telling investors now? john, welcome back. >> thanks for having me. >> a lot of the euphoria has come with the stock price.

>> we are in between product laumplgs. it is difficult to say how the market will react to new product announcements. but i think the focus will br more centered on economics of the business. >> john, good morning. it's gary back here. since you joined us and we did talk about apple, we have had the facebook ipo in case you didn't notice. i'm curious using the value parameters, did your firm participate in the facebook ipo. is that a stock that you would look to invest in for your

clients at these levels. >> whether or not it's >> somewhat. >> we have detailed that we have broken the average. >> you have to invest money

every day. >> certainly these days, these are challenging markets. john was on your show. you have to look at value behind investment. . in environment, we are looking at where some of the leverage has been liquidated.

resources and assets there will generate businesses are extremely low at this point. we don't know if these are going be the lowest levels. considering being. >> always the debate in terms of val value. >> we should remind people, painting that tape means you are moving the stock price up or

down to create some image. you get some alternative motive. >> absolutely. >> good for clarifying. >> we are going count down the close. seven minutes to go. of course, remember some of the markets in europe are closed today and tomorrow for a holiday. but we will get what we can when we come back. 5

5. >> i will keep an eye on research in motion. it has been a long road to single dimgts. for a company with $2 billion in cash and practically no debt that is another extreme move.

don't go away. 5

5. >> simon hobbs, we continue to debate whether or not germany is up for this master plan. >> the master plan is coming. it gives the ecb political cover to intervene massively.

it opens the way to wide bank guarantees. >> london, of course, is closed for a public holiday. the first of two. they are off again tomorrow for the queen's diamond jubilee, 60 years on the throne. >> partly because the -- china was not so good this morning.

>> but also some of the big industrials. that big construction company is also making gates. and other banks around europe. there is talk that spain -- i will talk about this with michelle in a few moments time.

>> the way in which viewers in sentiment is calling. rur a lot to watch. >> a great long term picture. what do you do in the short term? the leading newspaper of spain is reporting that the spanish government, specifically the finance minister is in full on negotiations with the rest of europe for a what they are calling a euro wide bank recapitalization plan. but let's translate that into what it really means. spain is asking for money from its european partners. one of the big four

>> the government of spain that was their plan for me a few week ace go. where does that lead you? the european union's bail-out funds. the only legal way for that to happen is for the european government to hand it over. spain says let's skip that step. if you make us the government borrow the money, you force austerity of the people, that hurts the banks more. spain is so desperate that the

prescribe went as far this weekend to say he would support centralized control by brussels. handing over some of their sovereign power as a government. clearly as a kid pro quo. he said no way was that ever going to happen. other headlines that had helped the market this morning. the door is open to the possibility of money going directly to the banks. just on friday he said that door was not open. it is shifting. we wait to hear from the lynch pen of europe which said no no no in public. it says reports behind closed doors that maybe they are starting to become more swayable if that is a verb. >> i am reminded of that. there are no atheists in fox holes. >> this is a key week. particularly for madrid. you can talk about the long term

grand plan. but in the meantime what do you do? spain has got to borrow money on thursday. that's going be a key test. >> one last question, foolish, i mean, bold? how would you describe that move? >> both. we are sure he will broach this idea of bank back so stop. all depends on the headlines for the past coup lt of days. >> mary tompson is here on the floor. good morning to you. >> good morning to you.

you know, some disapointing economic data. now it's down just about six points. we do see areas of strength in the green today but overall the tone is negative. april's manufacturing activity in the new york region. that too is weaker than expected. it did have an impact on trade today. the dow right now right above its worth level of the day. let's take a look at the s&p. we have been watching this in large part because it did breakthrough the moving average. also breaking through, traders looking for 12.50. what are the sectors pacing the decline in the s&p today?

you can attribute a lot of this to the weakness you are seeing in the airlines today. delta came out with may numbers on its consolidated passenger unit revenue of 6%. that was below expectation. >> hi, and thanks. dan has to be one of the most even keel kind of non-tempermental traders on the floor. talk about trying to spend more on infrastructure. as i was trying to be hijacked this morning, let's bring forward all the military

projects that we have to do anyway and do them now. >> we had a stimulus package a couple years back and we got nothing out of it. i don't see it happening. let's use the money like steve said earlier. let's pay down the debt we have and use the savings on the interest rate and let things happen the way they should. >> i like that latter one. i can't tell you how many people in this trading floor, home of the 30 year bond have told me that why shouldn't the federal government with interest rates low forget

>> i think the title of this movie wouldn't be a movie. desperately seeking a bump. it's an election year. this stimulus money might not have follow through but it does create a temporary bump. it has gotten to be that sort of a deal. >> it has. and i am hoping that the elect rat is smart enough to say none of this is working. you are just making campaign slogans. this goes for both sides. let's do what works.

>> if they are using pencil lan to treat me and it's not working, you have to switch. >> if the government wants to get a needle the size of a bucket and give you more pencil lan. back to you. >> thanks a lot. >> on chesapeake >> remember, a board change, sometimes a positive thing, but this is a company that will have

to delever. whether you're a company or a countr country, it's about shrinking down the leverage. so i need to remind people that take lehmanbrothers. one of the weakest boards that was out there. changing the board in early 2008 is not going to change the fact that when asset prices are going down, you are going to change that entire board and it would not have made a difference. pay attention and see what they are able to sell and for what price. that's the key. >> to you think, i mean hedging story in the your honor today, how much is that? >> you know, the whole aspect of chesapeake hedging themselves has always been called into question.

really came from selling upside calls that were brought into the p & l were never brought away. they will join us on wednesday. i think that is a better question to ask rob. >> we will see you early on that. >> when we come back, we mentioned chesapeake making some changes to the board except for the ceo role. one of the best performers today. is it really going improve the company in the long run?

>> coming up in a few, should you bet on bernanke? our traders make that call. are the dollar stores the best bet? and an off the radar way to play. lots to trade. >> all right. we will see you soon.

chesapeake energy up on news. for anyone who has been watching the name for a long time, this is a continuation of a touch chapter. >> always good to talk to you. good morning. >> good morning. >> let's just talk to the management changes first. is this icon at work? >> absolutely. he was the catalyst. he pushed for it. he was accompanied better than anyone else. he moved a lot of money. moved away from his recipe and the stock tanked so he is coming back for much,much more.

>> speaking of which, your price target, $28. although the company believes its net asset value is in the 75 to 90 range. >> let's get to the 28 and then we can worry about the 70 or 80. >> okay. go ahead. why 28? why is your target 28? >> our price target has been there for a while. what happens is it is basically some sort of covering, if you will. but it doesn't get into the net asset value. but the net asset value is still the same now as it was five or six weeks ago. whether or not the company was

giving the founder some excessive bonuses or whatever, the fact of the matter is chesapeake is an asset rich company but very poor when it comes to cash. their target is to sell the assets and to put their head do down. >> anything short of that would be a disservice to shareholders. how confident are you that the chairman is going be strong? >> there are so many candidates out there that my view can come within six months of the company would be completely different company. that two active shareholders know the company very well and know what the company needs very

well. >> energy giants went away and not in a good way. >> i can assure you that yes, they made a lot of mistakes. yes, they took a lot of risks. but if we have $5 gas, nobody would have talked about chesapeake in the same light. in all fairness, everybody wanted to invest with him. he made a lot of mistakes and took a lot of risks. that is over. we are where we are and the changes in the board are going to be for real and this company is going to seek its fair value and in my view the fair value is

significantly above. >> thank you for coming to the phone. always good to see you. >> a lot more squawk on the street coming up after the break. >> will the jobs number rock the market? mitt romney turned to cnbc. with a first on interview. >> what is not working? >> their policies have not worked and in many respects their policies have made it harder for the economy to recover. that's the indictment that you are seeing on this administration's policies.

>> want to bring your atoengs a new competition. where do you see the bottom for the shares? where do you think they will bottom out? use the hash tag face the number.

>> meanwhile, another contest. saying an interview saying because of the situation in europe, people will likely have to work until the age of 80. [ male announcer ] citi turns 200 this year.

in that time there've been some good days. and some difficult ones. but, through it all, we've persevered, supporting some of the biggest ideas in modern history. so why should our anniversary matter to you? because for 200 years, we've been helping ideas move from ambition to achievement. and the next great idea could be yours. ♪

>> you are watching the dow. people were worried about this morning being driven into a sell-off. >> absolutely. you remember last night as you mentioned, below the 2050 moving day average. and so i guess from that standpoint, not terrible bad day here. but the question that i was always asked and got is how do you know if you have got enough cash. you can eat well and sleep well. forget what planners tell her. sleeping well is something you want to do. you can always come back to the marketplace.

>> in three month's time, even the german eeoc. >> is that a reasonable argument? >> i should point out that. >> then, there is the yields in japan, mind blowing, right? >> if you have that 20 year chart, what i would like to say is we have not been over 2% in 14 years, since 1997. what good has it done them. creating jobs. and last but not least,