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>> >> in squawk booze news, george washington's dry whiskey will soon be on sale at the first president's mt. vernon estate. washington's estate reconstructed his distillery and will make more than 1100 bottles of unaged whiskey using his original recipe. the first bottles will be available beginning april 4th

and they will sell for $95 each. that would be a cool thing to pick up at the gift shop there. >> never told a lie. >> i think that was a lie. >> and the dentures, right? >> i think so. >> our guest hosts have been david dart and jim keenan. thank you very much for coming in and i hope you'll join me soon. >> the first part of the show was what you all were saying off-camera. it's funny and it's insightful. thank you for having us. >> you outed us. >> "squawk on the street" begins right now. ♪ ♪ ♪ good morning and welcome to "squawk on the street." i'm melissa lee and carl quintanilla and jim cramer. david faber is off today. the shiller home price report is just released and they were showing you the results at the bottom of the screen. s&p's david blitzer will join us shortly to break down these

numbers and meantime let's get you set up for the u.s. trading session and let's take a look at utsch fooures with the durable goods numbers which did come in at 5.7%. the dow looking at 47. the s&p 500 looking at five righta the the open. a bevy of officials backing off from the comments from the dutch finance minister saying cyprus was a template there in france as well as germany. shanghai seeing a big decline. worries about further property curves and the boj outlining qe ongs in terms of buying japan government bond, jgbs. that's the focus in japan this morning. the road map starts off with the bulls getting more bullish. forget cyprus at least for now. lifting the s&p to 17.60 and we return on record watch having a point away from the all-time closing high on the spx.

>> no more subsidies that's what t-mobile is saying making it the first wireless carrier to do away with them. cramer calls it phoneacide. details on that call straight ahead. >> boeing's first test flight of the 787 goes quote, unquote, according to plan one step closer to possibly ending the worldwide grounding of dream linerses. we start with the markets. futures rising as the s&p looks to march to the record highs and yesterday was close, but no cigar coming within a point of the all-time closing high as optimism over the cyprus bailout deal faded pretty quickly. it was interesting because we saw the markets sort of starting to deteriorate in the 10:00 hour. so it was pretty fast. >> we needed to hear the repudiation of this -- this is the template. the italian banks and you can cram them and the spanish banks and all of the banks are holding by a thread and you needed to

get them off the table and you needed to see a lot of interest in the usuals and the consumer product companies didn't see a lot, by the way, in the cyclicals because i still feel that caterpillar is casting a pall on everything. you tend to see the drug stocks and the food stocks have bids all of the time. the cyclicals, people are still worried. i continue it like these defensive stocks and they won't quit and i've come to make my peace with them down 1% to 2%. >> melissa mentioned this call. they're moving their target from 110 points from 1860 to 1760 and tony dwyer not unreasonable to expect a pullback. rates are low, inflation's low and the rest of the world is an absolute messmess >> i've been telling you for so long. i have to take it seriously because i have to take tony seriously because that's why i've made a lot of money listening to tony, and i thought

this piece was too bullish at the same time and we are struggling with the fact that investors are willing to pay more for earnings than we see. really interesting discussion this morning with jim paulson saying people are willing to pay more. >> when you take a look at his assumptions, they weren't overly bullish by historical measures and that's not crazy, but there was one line in it that was very interesting and that was telling in terms of this move higher that we've seen recently and that was don't fight the fed and don't fight the tape. a lot of people want to find reasons to sell this and they haven't come out with reasons that held so far. >> this is the tape. the great marty zweig recently passed away. on "wall street week" when i first heard don't fight the tape, my dad was selling scotch

tape at the time. i'm not going to fight scotch tape. don't fight the fed. why would i want to fight with the fed? no, no, people seem to want to own lots of stocks down below. the dollar general yesterday was really instructive. they thought they could take that down, the bears. at one point midday people said it wasn't that good. is still finished higher. i did a thing last night on "mad money" that i prefer the cheerio to the you're onio. and the eurio. it's a hobbled currency and monoel come here not overnight, but if you're a trust officer over in europe, if you are a treasurer of a public company i would be worried about being sued if i had all my money in a spanish bank. >> oh, absolutely. fiduciary responsibility. they've been hobbled probably for good, some say and that will

have some impact long term. at minimum, it has elongated the process of the recovery. these guys care about carbon, fighting carbon and fighting nexus. they are more concerned about oxygen than they are about job growth. they care more about the environment than they care about creating an employment picture and a growth picture, and i use that just as an example. they care about austerity and fossil fuels and they don't seem to care about jobs. when you crunch the banks you are making it difficult to to g credit. here it's getting more plentiful and there more scarce. bank employees outside the bank in cyprus wondering what's going on. we are told they'll re-open thursday and there's no guarantee that will happen

either. remember when you see those bank lines you still have to think do i want my money in these banks and the answer is slowly that money will come out. slowly. i don't think, based on believe, do you believe the credit is good there? i was watching michelle and i was thinking if it weren't for the beautiful skies there and the weather it would be, like, a wholesale exodus. like an 1847 exodus out of ireland and that's the last place i want to live, but the weather is better in ireland. >> 36 degrees. >> really? is that celsius? >> will apple deliver more cash to shareholders? piper's munster says it it will boost the dividend from $14. munster also calling consensus estimates for apple's march and june quarters too high, but does it mean investors will look to the second half of the year for opportunity? meantime, t-mobile says it's doing away with service contracts making it the first

major u.s. carrier to drop smartphone subsidies. some call it a sea change in the way these things are sold. jim? >> t-mobile is the one who should be giving the phones away. t-mobile needs the customers. they can do whatever they want to try to stick it to apple and samsung, but the at&t, verizon stranglehold will just become even greater. when i saw this t-mobile i said geez, that's good for dan hessy and that's good for at&t and not that those stocks need any. those stocks have been fabulous stocks and you look at verizon maybe doing a vodafone deal. at&t is the apple company and t-mobile. that's why i said this is phoneacide. that's a great pitch. we're the guys that don't subsidize you that have just an okay service. i don't know, caveat emptor. >> is there nothing attractive

about separating the cost of the phone from the cost of the service? >> not to care about t-mobile because they do have the sexist ads that are certainly -- >> i think that in the end we want to know how much great p phone power that we can get for little money. they're doing something i don't understand. i'm sure there's some rationale, but this is like jc penney. >> this is the new coupon. >> okay. maybe, hey, man, we're mr. coupon and we offer wi-fi. wi-fi? >> so when you say it's phoneacide. and so therefore in a weird, perverse way you can become more profitable on the phones it does sell. it won't have the at&t, but it's not losing the $450 or whatever the subsidy is per iphone 5. >> i keep thinking of the blackberry this weekend and it

launched and 28 seconds later we decided it was a failure. >> it was selling terribly. >> because at&t wasn't supporting it. the phone companies don't support the product or alternatively, if they don't subsidize the product, the public is smart about these things and they know how to play off phone companies and i was playing off verizon and said listen, guys. i'm not playing that bill. they're football and they will do things. the next thing i'll do is go to t mobil and say how much will you offer me on an iphone. we're like germany in europe, we don't mess around. merkel says no discount and that's it. go back to cyprus. no, i live here and i'll go over to at&t across the street. it doesn't work. >> just on the note from munster on apple. the stock's come a along way in the past week. what do you think about the earnings for earnings growth and the double digits in the second half? >> as soon as i saw that they're going to miss, and maybe this is

the test case. now you have munster saying they're going to miss. everybody expects in this and then they miss and people say it's ready. i mean that would be the way apple would bottom and obviously it would help if apple, the vast kingdom that they are actually said we're going to return more capital than you think, but this was the setup that you need to be able to get the stock to bottom and i don't know if the bottom is here. you need the axe to say they're going to miss. >> it's also banking on a second half that will be stronger and that will be fueled by new product launches which we don't necessarily have firm indication of. we might see the bottom right now and it might be better in the second half and the things that predicate a better second hachl, they're not tangible either. >> do we think he has access to the pipeline? do we think he has special insight to what the company is doing? >> probably not. apple is a secretive company

that keeps things under wraps. >> why would you come out and say they have great products. ford has a car that will run on water. >> it's the back half of the year. >> it runs on disstilled water so pay no attention to the women bound and gagged in the -- >> it's a beautiful car. >> it runs on only -- only evian. >> it runs on a mixture of tequila and water and it's incredible. >> if only that were true. >> on the rocks. >> it runs on a rgarita. jimmy buffett, whatever. you need to have some product that says wow and then he's going to be right. i don't know the wow factor. i don't know. i only mention the water thing because jobs was fixated on developing a car that ran on water and he did not live long enough to be able to do that, but that was one of his goals. it would have been great.

>> yeah. >> let's talk boeing this morning. the jet maker says it completed its first test flight of the 787 and it had six crew members and went according to plan and maybe this paves the way for the 787 to resume flights. >> they should continue to say that we're close to a solution because every time they do the stock goes up. maybe once they have a solution the stock stops going up. i saw goldman had the ceo for aerospace and it was very positive. if boeing fixesy this then you begin the multi-year talk about the cycle again. in the interim, it's been a miraculous move for boeing. >> if you take a look at the durable goods orders and you see the orders that defense stuffed down the pipeline in advance of the sequester. that was an amazing number. 68% jump. this is not the climb of a bash are barbed wire and claim more

minds. >> and you have someone on your back and they still just shoot you. people say i want boeing and i'm going over the top. give me boeing or give me death. >> on the component in durable, even though it was down 2.7 for the month and we got the pop which seemed unworldly and dan greenhouse this morning said the first couple of months of the year were pretty good. >> yes. >> and the housing. i keep coming back to feeling richer. >> and the markets don't hurt either. >> i don't look at my house every day and say i just get 1438, but i feel like i ought to plant new daffodils. >> and you will. >> i will! the old daffodils are coming up. there's no doubt. the ones i put up in the fall and they themeses have added maybe $30, $40 to the house in the last six months. >> wow! >> easter is christmas for

do-it-yourselfers. >> big season. >> yes, and it is time to get the roto tiller out and just don't wear flip-flops. my advice to gardeners no flip-flops and rototillers. little perceived wisdom. >> someone is calling 911 otherwise. >> some of the other stories we're watching ahead of the opening bell on this tuesday. carl icahn is talking to blackstone group about possibly teaming up in a bid to buy dell. separate bids from icahn and blackstone as potentially superior to the $3.65 from michael dell and silver lake. doug overhelm is telling cnbc about the debt in the crisis. it will overcome the challenges and the battle over gay marriage heads to the supreme court. the nine justices will consider whether california's proposition 8 which defines marriage as being between a man and woman is constitutional.

how are home prices faring? david blitzer will break down the just-released kaye shiller and take one more look at futures and we talk about the dangers of an up open yesterday. similar picture today and we'll see where we go. the opening bell at the bottom of the hour. "squawk on the street" back in a minute. governor of getting it done. you know how to dance... with a deadline. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. this is awesome. [ male announcer ] yes, it is, business pro. yes, it is. go national. go like a pro. yes, it is. (announcer) scottrade knows our and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading.

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want to i want to get out to the housing data. the shiller report showing average home prices accelerating

in january. all 20 cities in the 20-city composite posting year over year gains. here first on cnbc to dissect the data, david blitzer, the chairman of the s&p 500 index committee. david, good morning to you. >> good morning. pretty notable not only that all 20 cities have year over year increases, but is this the highest since the summer of '06? >> uh, yeah, i think it is. in fact, the overall, we are now about 9% above the lows for the 20-city composite. we beat the consensus forecast which would be a touch under 8% and we're at 8.1% over the last 12 months. so across all 20 cities and really across housing given a lot of the other economic data, we seem to be cranking on all cylinders. >> what exactly is driving it? is it steady employment? is it the low rates and do you think we're entering a zone where prices are rising too much? >> well, we'll answer the last

question first. no, i don't think the prices are rising too much. it's clearly buoyant and there are a handful of cities that are truly amazing. phoenix made the top of that list with prices up something like 23% over the last year. as to what's driving it, it's a broad-based improvement in the economy and we're seeing it in terms of confidence. we're seeing it in terms of economic activity and we're talking about durable goods which was up very strongly. so we're seeing the u.s. is economy after a long, long wait, come back and really beginning to grow a little bit better. low interest rates really help it, but i can't imagine anyone in a rush to buy because they think interest rates are about to go up. >> let me follow up on what carl asked. i look at phoenix and las vegas and think to myself, take down three houses and flip them six months from now.

isn't that happening yet? >> what seems to be happening and it was featured in "the wall street journal" yesterday was we seem to be getting some large corporation, private equity and other groups coming in buying homes with the intention of renting them and, you know, the estimate in the paper was it could be as much of a third of the buying. that sounds very high except maybe one or two spot, but this clearly is picking up the market. it's probably pulling a lot of houses that are under water or in some state of foreclosure off the market and helping renovate them to help neighborhoods look better. so all of that is a plus. down the road it's quite possible if prices move up more than expected. some of these homes may suddenly be back on the market. a lot of people are renting because they're not quite sure which way it's going and they're not quite sure about the economy. renting sounds like an easier option or unfortunately, their

financial situation is still damaged from the recession. >> all right, david. we'll see, but your point is that -- i mean, is there a level at which you would start to worry about some of these distressed investors looking to exit? >> sure, there's some level, but i don't think we're there yet. i think we're a few years off. he has to be planning if for a few years. if he turns around and sells it next year, the closing costs alone will be in the economy. >> well said. a great report. everyone should take a look at it. david blitzer over at s&p. >> cramer is about to highlight a pair of stocks. should you find a home for them in your portfolio? hear what jim has to say. that'sa, head in "the mad dash." the dow looking at a whopping 60 points at the open. much more "squawk on the street" straight ahead. [ kitt ] you know what's impressive?

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about four about four and a half minutes before the bell. berkshire and goldman did make news in terms of that agreement. interesting in how. >> anything from goldman, i thought it was a neutral, but people say it's a positive. >> because they're in for the

longer term? >> yes. look, i have felt that this was something i liked. i loved what berkshire did for goldman and what berkshire did for itself. i want goldman to stand on its own. i don't want investors and no warrens and no nothing. i want goldman to be clean. look, goldman's doing well and i don't want to make this as a reason to own it or not. earnings, earnings, earnings. >> speaking of which, pacific crest upped its earnings. this stock has been a horrendous short, okay? it's also been one of the stocks that's up the most throughout this period. pacific crest is talking about subscriber growth, okay? that's what caused this to go to this. if there's additional supplier growth, i can see the stock go even further. carl, one of the thing about netflix is it's a generational stock and when they meet younger people they want to own the stock of netflix. they want to watch the following and not yet, but, wow! i won't put that thing on that and it's the creepiest show in

history. the old box set is replaced by netflix. this is a generational thing and this stock goes higher. >> andy hargrave is 225 and he's on the show at 10:00. >> you know what i really want to know? i want to know what it meant to have it on the clicker and when you bea new phone and new tv, there it is and i have to set that up. >> it's easy to find. >> it is so big. >> when we come back, the bulls are trying to bounce back today and the question is can they succeed? the opening bell is next. ♪

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they'll find some retirement people who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other, which isn't rocket science. it's just common sense. from td ameritrade. back just in time for the opening bell on this tuesday. let's get a look at the s&p 500 at the top of the screen. at the big board this morning. nypd chief, esposito highlighting his retirement after 45 years. >> holy cow! >> of dedicated public service at the new york stock exchange. that's a career, gem. that is a career. >> these guys make it so the city's a changed place. a lot of it has to do with what

the police have done. >> in our life time. frightening place, neighborhood. >> talk to anyone who was raised in this city and they've got stories to tell that the rest of us newbies cannot understand. trying to explain my streets why i would never walk down this street and now i want to live on this street. these guys. >> the stars of comcast and the e network's playing with fire. a new series that goes inside the professional and personal lives of the chefs, stars and taste makers of new york's culinary world. we love e and we love anything on e. >> who doesn't? i'm speaking for all of us. >> anyway, a lot going and we continue to watch apple and we talked about some of the big names and had to mention dell by sorkin, jim. >> yes. >> and icahn and blackstone, they play together. >> i continue to believe and leon cooper made very critical comments there. i continue with this is just ridiculously overvalued and i don't care what michael dell knows or doesn't know.

michael dell has told me repeatedly. my company's undervalued. look, this has created a huge amount of value for the stock. i don't know whether going private will go anywhere near the value that the stock has appreciated. this is a $9 billion -- there is a huge amount of money. i would exit this. >> take a look at shares of oracle and finally an update and i believe this is the first up day since the dismal report. mike herd saying, no thanks, no interest in the offer for dell would install to herd. you would say to herd directly on the show -- not a good idea. >> you need to hear ellison say enough is enough. my charitable trust is trying to buy some here and it owns a tad and my take is this stock has come back every time. that was a horrible quarter. that was a horrible quarter and they need to say something good.

>> you're looking at the chart. it's horrendous. you look at the drop on the right hand side of the screen ask remember back december 2011 and similar drop on earnings and it did bounce back. >> right. oracle has a history of executing quite well. we'll see if that holds up this time. >> they have a lot of cash, but this was a cliff jump. it was its own fiscal cliff. it was the oracle cliff and they got -- right now, they stabilized and that stock with bold statements. >> yes. >> a few retailers to watch. we were talking about children's place earlier in the show. >> ugly. >> $1.15 does beat by 11 cents, but the current quarter projection well below. do you play some of these specialties. >> the current quarter estimate is half of wall street estimates. it was that dismal. >> look, there are so many retailers that are doing well. why do i have to go to gucci or children's place?

walmart breaks out every day? walmart trades like a small cap. there's a consistent bid underneath. costco, small cap. i love the action retail and the rth. it is incredible and the last thing i need is children's place. no, thank you. >> and they kitchen sinked it. beat macro, bad weather, rising costs. what else can you throw in there? everything's in there. >> i was surprised they didn't mention that the voice is coming back so we think our numbers will be bad coming forward. "dancing with the stars" has the guy from the ravens. he's hurting our sales. you know? come up with anything. >> yeah. it is hurting retailers and in a pretty good tape here. we've got the gap and nike, urban outfitters, jc penney and abercrombie are close to the top of the red list. >> right. right. i do think that -- i've been spending a lot of time on urban and this stock has hit a wall and yet the -- it hit a wall. the last quarter was not that great. it is the essence of that

specialty retail other than williams-sonoma. i am much more at tune with ross stores and this bed bath has moved up a great deal and the dollar general. t.j. max, tjx, this company has quietly moved up and it's been stalled for a long time. these are the kinds of inexpensive retail names i like. re inexpensive retail names that sell inexpensive goods. >> we'll get some data coming up at the top of the hour and new home sales and we'll see whether those stocks begin to play anew given what kaye shiller did. >> weren't those numbers from kaye shirl stark? >> yes. what concerned me was what blitzer said about the exit that all of those funds are now investing and they're all getting in at the same time. they timed it, right? on the way in, imagine what their exit's going to be on the other side. >> think if homebuilders billed 1.5 million instead of 1 million

they could be in trouble. when you buy something you can rent it for a very good cash flow because uncle ben with the good rates. >> that's true. take a look at what's going on in banking and the european banks are telling us a very different story here particularly among the spanish banks. we have santander down 1.5%. bbba down 22% and there are cracks in the financial stories that we should be watching because this was a turn yesterday that gave us a signal that the u.s. session was going to turn, as well and it was something to watch as the losses deepen in spain. bbva. i did banco santander. it has a franchise in america that is so strong and they -- santander does, too, but i think santander and you don't get the big value like bbba and that is the one getting a potential buy and it goes below eight because spain is terrible.

no growth, but i do think in the end bbba would say -- i was going to say bank of america, how about the j.p. morgan of spain. >> we have s&p cutting their eurozone gdp forecast for the year from .1 negatifeeinnegativ negative. >> how can you put money there when you have so much going there. you have autos looking pretty good and oil and gas looking pretty good and commercial real estate could come back. i just see no reason to invest there. either put money in their banks or invest in their stocks. i just don't get it. i don't get the compelling valuation. i don't. >> and the price target of 17.60. >> delightful guy. >> he's been getting it right and he's been pushing the envelope. >> let's check in with bob

pisani on the floor with what is moving this morning. hi, bob. >> happy tuesday. i see europe's mixed and spain is mixed. here in the u.s., homebuilders, no surprise there and great shiller numbers, just fantastic numbers from that. defense stocks are up, too, and energy stocks are also on the positive side. pretty good open. i mentioned yesterday we have two problems and one is the poor earnings guidance commentary we got last week and that's a problem for the markets and the second problem is sell in may. i know it's an old wife's tale and it has a big following on the street and they've seen it sell very, very well. so the debate has been heating up. isi had a very interesting argument out this morning basically saying we'll take the other side of that trade. we think it's a stupid idea to sell in may. they listed several points that were brought up and dudley was out yesterday saying the fed will keep rates low for a while.

the rising home prices and the tax refunds picking up and japan, economics could be much greater stimulus than people imagined. they listed pages upon pages indicating that may be the case. you saw the kay shiller numbers, that's fantastic and i'm glad you put up the year over year numbers and did you look at those numbers? double-digit increases and not just san francisco, it always has a double-digit increase. we got a bit of a lull here and everybody bes that. we basically stalled out right now. we went straight up from the beginning of january into the middle of march to 1863. that was two points away from the historic high and basically we just stalled out here, but everybody has stalled out. europe has stalled out and did you see the emerging market economies and basically those stalled out two months ago so the global markets were teetering and probably this is a

good thing and we have to broaden out the arguments a bit. so here's what i think will happen. the next catalyst will be the central banks and we'll get the ecb and the bank of japan and the bank of japan will come out like gang busters and the ecb will be very conciliatory and they'll offer liquidity to all people who want it and need it. i think that's the message you'll hear from draghi and they're going to offer a very conciliatory tone. i think the big problem is after that because the next catalyst will be the earnings situation and you all know what happened with oracle and with fedex and in particular fedex, the most important comment last week as well as caterpillar's monthly decline numbers and that will be an issue and that's the reason the market has to move forward. all of this low in the data points will change very quickly. we'll get new commentary on the earnings situation and men will know within about a month whether or not the numbers for the second half of 2013 are too

high or not. right now the expectations are typically very much on the upside. guys, back to you. >> thank you, bob. i've been trying to figure out exactly when people have been trying to sell in april in order to sell in may. it looks like april 14th and i'm trying to find that one out. rec santelli at the cme in chicago. go ahead, rick. >> thanks, jim. sometimes the market gives you subtle clues and sometimes they flat line which is kind of the case with interest rates and especially the safe harbors. >> yes, we're up several becausis points in yield and some of that, of course, was after better than expected data after kay shiller or part of the durable goods numbers and it really jumps out at you and it's flat lining and here's an interesting chart and let's put stocks and the don't industrial average on the same chart as

closing yields for ten and they've had a closing range of 24 basis point closing range for all of 2014 and while that's occurring and remember, we officially closed a whisker under 180 on the last day of last year during that time the dow was up 1200 points. think about that. try to reconcile that and see what issues are affecting stocks in a large way to the upside, part the economy and part uncle ben without a doubt. now let's take a look at the same instruments overseas, when you are up several basis points and the two-day chart. it is not buying into everything, and it's great. things may have improved and maybe not. the banks still aren't open in cypress, that's a smart mogul and it might put skiers off regardless and let's take a look at that because they're connected at the hip. look at the two-day chart of the euro. once again, we've said it a lot

and if you want to know what's going on with europe, really simple and on canada. you get the picture. >> euro versus everybody. let's check out the latest news on energy and metals and go to sharon epperson at the nymex. >> they're still talking about europe and cyprus, but they're very focused on what's happening here in the u.s. and the positive economic data that we've seen. durable goods are arters and all of that helping the u.s. oil price lead the gains in the energy sector. we're also seeing this spread between brent and wti evaporating quickly and a lot of traders continuing to point to u.s. shale production and continuing exports from canada as a reason for this, adding to the fact that it's 100 bucks and that's reasonable for the price of oil and that's why brent may be capping some of the gains that we're seeing in that market

and that's what they're saying. we're also looking at the gold price which has come off $10 or so and the fact that it's below 1600 an ounce and that has to do a bit with cyprus and there was rotation back into the riskier assets as we look at stabilizing in that area and also keep your eye on the copper price because there's plenty of supply of copper and once again, the durable goods are orders and that's what traders are talking about for some of the stability that we're seeing back in the copper market after it's been under so much pressure. >> back to you, melissa. >> thank you very much, sharon epperson. >> what's america's favorite investment? the answer is coming up courtesy of the you will all-america survey. we'll take an in-depth look at what is rooshg working in chicago's real estate market. as we head to break take a look at the early movers on wall street.

and take a look at the s&p 500 as we are just six points away from the all-time closing high. the intraday high, record high was 1576, a little bit aways from that and interesting new all-time highs to take note of today. johnson & johnson, cbs care mark, american press, visa, delphi, abbvie and they're rich according to their own historical valuations and yet they keep going higher. >> i find these moves amazing because what they're saying is people are willing to pay up for some degree of safety. there's also a notion, i don't like to do this, but you take the same amount of earnings, okay? and you just decide that you'll pay more in part because the fed has said over and over again, you're not going to make money in fixed income and enough, i'll

just get to 3%. a lot of them have nice yields and i'll take the 3% and i'm not making more money anymore and it's gradually becoming a theme. even 3% that used to be 4% and i'll take it. give it to me because i'm making nothing on my cds. >> it's not much in the way of keeping track with inflation year over year, but it is better than half a percent in the cd. and i think that this is finally happening. shouldn't it have happened earlier? i think so, but money rolls over. people are now getting more and more comfortable with the idea that we're not a great growth environment, no inflation to speak of. >> a couple of test cases, the italian elections where we were faced with a potential mini disaster an markets recovered, right? the news recovered. >> right. this is very much a bristol-myers. in other words, these stocks are not impacted. i featured celgene last night on "mad money."

celgene is very expensive in the near-term, but it's nine times 2016 earnings. people are doinging that kind of thinking. this is what we saw in the '90s. listen in 2016 that stock is very cheap. general mills in 2016, that is very cheap. that has not been the way to look at stocks in the last decade. it is the way to look at it 20 years ago. >> general motors is working to attract younger customers. the company unveiling revamped of the lacrosse luxury car and mid-sized regal sports sedan so that ing brings us to this morning's squawk on the tweet. what does gm need to do to make driving a buick cool? tweet us. we've got a couple of women in the back of the station megan. >> and we have mulally talking about japan and the yen and that will cause problems down the road, too. >> so what does that mean? how much do we pay for ford?

14 instead of 13.5. >> touche. touche. >> you can try on one, and its guide shop, but if you want to buy them you have to go online. we're talking about men's retail start-up bonobos. we'll meet the co-founder and ceo later in the show. up next. ♪ ♪ >> still to come -- ♪ ♪ >> the number six is special to cramer, too. "six stocks in 60 seconds" is on his mind and ours all that and his mind and ours all that and more when we return.

welcome back to "squawk on the street." i'm mary thompson. the news this morning concerning goldman sachs. goldman and warren buffett amending a crisis era deal under the terms of this agreement, instead of paying $5 billion to buy warrants worth $43 million shares of goldman sachs, mr. buffett instead will get shares valued in the dollar amount that is the difference between the strike price of those warrants at $115 a share and the average price of goldman sachs stock shares in the last ten days or

prior to october 1st. he has this time to go ahead with this option. what this means essentially is that warren buffet and berkshire hathaway will eventually become a top ten holder in goldman sachs. it's a positive for mr. buffett because he doesn't have to pay out $5 billion for those warrants and for goldman sachs. it is not dilutive to the shareholder base because under treasury accounting those options and warrants have been accounted for. so essentially a win-win, one trader saying, for both sides. its stock is higher in early trading. >> it's an important story. thanks, mary. mary thompson at hq. >> let's get to "six in 60." >> everyone is trying to create valuation in this one. they're going to take over and i don't think so. >> ray jay, up pea body. people are switching back to coal and be careful because coal in the end is a declining

commodity in this country. citi says buy allem ease. and i really like this company and it's worth more than it's selling for. >> credit suisse cutting schlumberger. people are all cutting numbers and no bottom yet for schlumberger. >> some of the parts story on pepsi. >> goldman says it's not that compelling. look, it's never been a sum of the parts. it's just an inexpensive long-term growth stock. people want to pay more for growth. >> and finally, steve cutting southwest. this is the other side of the pea body. the prices have moved up too much and i think it's a sale. >> how about tonight? >> i've got -- whoa! i'm just so excited, by the way and driven by the hotel stocks and this is a gigantic hotel company and i want to know why people are not building more hotels and why rates keep going up and it costs a lot of money to stay in hotel these days and

it's been a terrific investment trust. >> you want discipline on building, but you want growth. >> as long as there's no more building and these guys do well, it's zero sum. >> we'll see you tonight, jim. >> oh, thank you, buddy. >> 7:00 eastern time. simon is here with what's coming up in the next hour. >> we have breaking data as soon as we get over the break. home sales and consumer confidence and we'll look at facebook's slumping stock at the moment and has apple got its mojo back up 5% this year. a lot of people are piling in. we will talk apple in the second hour of "squawk on the street." stay with us.

welcome back to "squawk on the street." we have march richmond fed expecting six and it moves down to three and that brings us tocomp of december of last year. next this is also a march number. consumer confidence drops to 59.7. we're expecting a number closer to 68. 59.7, well let's put it this way. it fits in between january's 58.4 and a slightly revised

february at 68. now we go to new home sales and this is a february number and we're expecting a number around 420, very close and 411,000 and that's seasonally adjusted annualized rate and that is down about 4.5%. why is it down? because last month originally reported to 437 and moved down to 431 down to 411. to give yuan idea and it was one of the best reits since july of '08. still it's under 400,000. in summation, the numbers are not bad other than consume are confidence and for new details on new home sales, who else? i think diana olick, that's who we need to go to. >> excellent idea, rick. let's get to the aforementioned diana olick in washington. >> okay. it's not a fantastic number and

it's not a bad number and it's right along expectations. supply moved to 4.4 supply. prices were up 2.5%. the homebuilders have been really cash strapped because not only do they have higher labor cover thes because of a problem finding labor, but they're also trying to get more land which is getting more pricey and material costs are going up so they're strong price up a little bit and up nearly 3% from a year ago at 246,800. so along the lines of good, but remember, these are contracts signed in february, not closings. the existing home sales numbers are closings. so we'll have to wait and see what we see on cancellation rate which is run higher for the homebuilders. overall, the homebuilders have been seeing steady increases, but remember, last month we saw a 15% increase from the month before. so you expected a little bit of a pullback and we are heading into spring and weather conditions will not be as difficult for the homebuilders, but they are still telling us

they're having trouble getting from that new order to the actual finished home. timeliness are extending again because of that labor shortage. all in all it is a fine number for the homebuilders. >> especially on top of what kay shiller told us this morning. >> thanks so much, diana olick. to help us digest the data, senior economist from b of a global research and the cio of wealth management. good morning to both of you. >> good morning. >> let's just do the three data points we got. three points and all misses and it doesn't seem to be having too much of an impact. >> i think consumer confidence was the most important. confidence returned back to what it was in january and reversed the pop that we'd seen in february. consumer sentiment and there were reasons to be concerned about the consumer right now. remember, taxes spiked higher in january and retail sales had

continued and they're feeling better about wealth appreciation in housing and stocks, but income growth had been subpar, particularly take home pay as a result of higher taxes. >> and we'll get michigan later and i'm just thinking are they payroll tax cut explorations because the home values appear to be going up. upon why are they so worried? >> think we just went through the debate around the sequestration although it went into effect and we haven't seen the real impact of it yet and that still hangs out there now and there's some concern in consumers as to the issues that are out there. it's not that much of a surprise that there's some concern, but you look at the rest of the economic backdrop and it remains pretty positive. job growth is up and consumer spending continues to be positive so i would rather see what they're doing than what they're saying. >> that's always what we say when the confidence numbers come

out. michelle, you went into the year relatively cautious as i recall. you upped your targets on gdp for the first half. >> we have. how would you describe your mindset right now. has cautious not worked as a strategy? >> i think cautious is still probable the right approach. we revised q-1 gdp to 1% on the back of better retail sales numbers and we've seen stronger capex, but remember that comes after a 1% increase in q i 4. so when you look at domestic demand we're still trending between 1.5% to 2%. for q2 we still look at 1.3% gdp growth so we learned there was a bit more momentum than we previously thought. i think the wealth gains we've seen are important, but at the same time although job growth has improved as bernanke has reiterated in the past it's not strong enough given the underutilization in the market. things are getting better and we're healing, but it's still a

pretty choppy path. >> well, let me pick up that precise point, jim, if i may. jim, you can argue and today is a prime example, poor data and the market up 82 on the dow and there is a disconnect between what the markets are doing and what the economy is doing and i wonder if what the fed is engaged in is backfiring and let me explain why i would suggest that. we know the fed is forcing people in the search for yield and that is driving the stock markets higher, but they're also running their companies increasingly like bonds and returning cash to share hold is not about creating jobs and growth. how do we undo that loop, jim, if you believe that it exists. >> i think there's certainly evidence that we've not seen the kind of job growth we've seen? this recovery, but we have seen job growth and the fed has provided an environment for that job growth, but i think they'd like to hand the baton over to

fiscal policy here to help out in that job growth side. so i'm not sure we've seen a backfiring there yet. the economy is on stable ground. we've changed the conversation, as you know, simon from a double dip and a weak economy to one that's gaining momentum here and what we will likely see going forward as we continue to see gains in housing, energy, manufacturing and all positive in this environment catching up. so company, you see some of the dealmakers and m & a activity will be very strong and cash on balance sheets is becoming a liability here and i think companies are looking to see what they can do and return it to shareholders is just one component of that. >> michelle, there's a note out overnight from goldman in which they argue that the unemployment in the company is cyclical. if you can get the economy revving fast enough it is possible to reverse this. would you agree with them? >> i think there are structural elements to it, so i think that

nehru or the steady state unemployment rate is higher than it was prior to the crisis, but i would agree that there are cyclical components, and if we stimulate enough consumer spending and if we stimulate enough demand in the economy, then i think it will result in job growth and that's where the debate around qe comes in. is it still impactful in supporting overall economic growth which will, in turn, thop create job and i think it turns to housing in particular. >> housing is one of the best ben fishery rates in the improvement in housing demand and we are seeing an improvement in housing construction and we're having labor shortages in parts of the housing market so there is a need for hiring and that will ultimately trance tliet positive multipliers. >> you just need to convince the carpenters thinking they'll never come back in.

thanks so much. >> you about the? we'll see you later. >> thank you. >> one stock having its own bout of march madness. shares of apple are up 8 pertz since the march 4th low. what about the ipad 5 rumors in plus the rally shares are soaring 95% since the start of the year, slapping a $225 price target on this stock calling in the global leader some subscription streaming. the analyst behind that call joins us right after the break. ♪

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isn't technology supposed to make life easier? at chase we're pioneering innovations that make banking simple. deposit a check with a photo. pay someone with an email. and bank seamlessly with our award-winning mobile app. take a step forward... and chase what matters. pacific pacific crest upping its price target up to $225 a share and that's more than 20% upside to today's price. increased margins and strong subscriber base will drive shares higher. andy hargraves is analyst who made this call. it's always great to speak with you. >> yeah. thanks for having me. >> key to this price target raise is the assumption that domestic streaming subscribers

will increase and you're ratcheting up your model from 43, and you feel confident in this number based on the information you have. so what is that information that makes you believe 46 is athainable. >> there are a couple of things and one is the price. it's cheaper than the other premium services that have big subscribers bases at 8 a month and increasingly the quality of the content that they have is unmatched by their premium services. hp has tremendous quality and we think netflix is headed in that way and has more breadth. you throw elasticity around the price and the content quality and breadth together and we think you can get there. how does a 46 and the increase overlay with how many households have a broadband capable tv

hookups or pc hookups? >> i'm just curious if this feeds into this model and the number of subscribers they can have? >> right now it depends on who you ask, but 85 million broadband households although it's a slow pace at this point. we have them getting to 46 million which is 20, 21, i believe. we're expecting somewhere between 90 and 100 million broadband households so you're running 50% penetration which is not a small number. >> andy, if you say netflix is headed toward hbo, it's clear from the comments that hbo may well be headed toward netflix when the ceo said that perhaps they would make hbo go available in conjunction with broadband providers further down the line. an attempt to move away from the cord if you like. does that challenge the netflix model further down the line or is it a symptom of where the whole industry is going?

the latter. we think that would be tremendously positive and our view here is we think there's a paradigm shift and it's a big move from everything live to on demand to essentially everything you don't have to watch live and netflix is essentially the best in the world and we think at executing that model. so hbo is moving toward them is a recognition that this model is the future of non-live viewing. >> when you mentioned elasticity around the price i assume you're referring to the subscription price. how much more should we expect to pay for this in 12 months, let's say? >> in 12 month, i don't think you'll pay any more. if you look at what netflix viewers are watching on average it's about an hour and a half. you're paying 20 cents an hour if you're an average netflix sub. the average cable sub is paying

a little over 50 sebs. so there's a lot of room for eating of them to increase prices or cable prices to come down. >> do you think they would increase prices on a monthly basis or would they come up with some sort of a tiered program based on how much you watch? >> well, they'll have both options which is the nice thing here about netflix is because of their position and because of how good a service is there's flexibility and what they can do with it and eventually it makes sense to raise the price, but other things you can do would be to break it up a little bit and have different verticals and i don't think that will happen any time real soon, but there's choice. >> we'll leave it there. thanks for your time. >> another big stock on the move in just three weeks and apple shares have rallied more than 8% while speculation is clearly rampant as to what the next big product launch could be and whether it's an iwatch or a generation of the ipad. could the catalyst be apple's

next big move with the stockpile. channing smith is with capital advisers growth fund and he has $1.1 billion under management and apple is his biggest holding. it still would appear the biggest holding in your fund. >> it's close. yeah. we just added 230 about two weeks ago. >> why did you do that? >> cramer touched on this about an hour ago. what you've seen is the stock has stopped reacting to bad news. we've seen a number of analyst downgrades, the earnings and revenues have been chopped and the stock price is the stock going down. so that's a good sign. the bar has been set very low for this coming quarter which we think could be a rough quarter and if you look at some of the technical indicators and take a look at the stock from may 14th and this is when samsung launched their newest product and apple stock is up 7% while the overall market is flat. the tech sector is flat and samsung is flat and that's positive and if you look at the 50-day moving average and apple

is trading above the 50-day moving average and thirdly, simon. if you look at the s&p on down days, apple has performed very well and that's a good sign for us. the comparison to samsung, i get, but isn't it unfair given samsung's stock, to say that samsung has been flat since its launch and that's probably a victory for shares of samsung who have had a tremendous run. >> melissa, i think the worry is here's the samsung product that will displace the apple iphone. that didn't happen and the reviews were mixed. it's a great product and it's a formidable competitor for apple and going forward it it will be apple's turn and we expect new product launches in the summer. the stock is going to back and fill here probably for the next quarter, but -- >> go ahead. let's be clear about the next quarter. even today piper jaffray is reiterating its overweight in

the price target and there's another analyst saying we believe that the current street numbers are too high for march and june. it is going to get bumpy on the announcements here, isn't it? >> it is, and i think what you're seeing is a lot of investors have expected this dividend announcement. we expect to see that dividend announcement when they announce the quarter and hopefully that will take some of the pressure off the earnings and i think that could be a rough quarter for them. i think what you're seeing is that the stock price is recognizing this and the expectations is very low and that's been priced into the stock. >> isn't that the point? it may well be now priced into the stock? right. apple gets a quarter and the investors will start to see the new product announcements and finally apple will do something with the cash and that's the expectation and we think the focus will be in the second half of the year with potential announcements with china lower -- >> channing.

i'm just curious, in terms of the new product announcements we're expecting another generation of the ipad. certainly another generation of the iphone 5 and iphone 5s at some point. are you expecting it to be revolutionary or something completely different like a low-end phone and i'm wondering if you're baking in a reaction to what we've seen in the past and these products are incremental than the new products we've seen in the past. i think what's happened over the last six months is that the stock is really no longer a hypergrowth stock. we need to realize that we're entering a mass adoption stage and what you will see is that earnings will come down in the mid-teens and revenue growth should be in the mid-teens and the days of the hypergrowth are probably over. however, apple's valuation has never traded at a hypervaluation level. so at 10.3 times we thank more revenue consistency and with

more earnings consistency we'll see p-e expansion from the 10.3 times p-e that we currently see. so it's going to be a combination and they'll continue to focus categories and we'll see the p-e expand ever so slightly over the next few months. >> we're 462 on the stock at the moment. where do you think it will be at the end of the year? >> we think 600 is a fair price target. >> okay. >> we've come down from 700, but we think 600 is very fair and it's one of the best opportunities in the marketplace today. >> i get it. thank you, channing. channing smith at capital advisers growth. >> pharma names trading in the green today let's go to josh for the market flash. >> hi, melissa. pharma stocks reaching the highest level in more than 11 years. some of the best performers there. you have bristol-myers up 24% this year. valiant and allergan also big gainers. johns onnon and johnson up 14% and ubs raised the price target

from 87 to 81. simon, back to you. >> thank you very much, up next on the program. the results of cnbc's all-america economic survey between stocks, real estate, bonds and gold, which choice clocked in as the top investment choice on the street? steve liesman will lay it all out for us. plus, forget s&p 1565. 1760 is the next stop so 12%, 13% from where we are here now and it could happen, they say, faster than you think. we're back in two.

let's get to steve liesman who has the results of the all-america survey. i know you're talking about gold bugs this morning. >> we asked a question a year ago and we recycled it for the economic survey and we asked 800 americans, and we asked them quite simply what is the best investment? back in march 2012 and now a year later, let's see what they say. i'll tell you what the answer is not. it's not corporate bonds, it's not bonds and savings accounts. that's like less than 10 for any

of them. how about stocks? that went up a little bit, 21%. real estate went up 27% and gold, still the number one choice of americans when asked to choose among these investments. down a little bit, up a little bit in real estate, up a little bit in stocks, but gold is still a pretty good winner statistically. let's move on and take a look at who these gold bugs are. remember, the 35% here is of all adults. okay, if you think your home value is under water. in other words, your home value is worth less than your mortgage if you have a high school education or less and the white working class, they're all around 40%, but now let's take a look at these next two groups here. tea party supporters, 45%. if your home value is going down 50% so clearly an issue here if it is risk off the table and not optimistic about the economy and these tend to be or at least in greater percentages are your gold bugs compared to all adults

in the economy. what about generally looking at the stock market. let's see, these are the percentages that you have heard about some about some critical financial issues here. 80%, how about the dow being an all-time high. only 66%. >> reporter: and only 29% if you highlight that, that's the least well known economic story that we've asked about in the past several years. what are people's attitudes toward the dow being an all-time high? if we could move on, yes we can. the dow being an all-time high. the does that mean the dow is better 22% of the public say that's the case. the corporations and the wealthy are doing better? does it make you more likely to invest or less likely to invest? 16% saying less likely to invest. 70% say no difference. it's a little contradicted by the next graphic we'll take a look at. is it a good time or bad time to

invest in stocks? let's start over here. this is six years ago before the recession and before the financial crisis and 49% thought it was a good time to invest. 27% said bad and that all changed and it remained essentially one where people on average thought it was a bad time to invest and you could see right here for the first time in our six years of surveys it's back just about even and a good time to invest or bad time to invest and i guess this goes back to simon and you can read all about the results of the survey on cnbc.com and you have more results and housing and diana olic will be on later, as well and i don't know if there are still retail investors that can come back to the market, and it was better than it was and not as good as it could be, simon. >> so while the majority identified gold as being the best place to be it's been one of the worst places to be so far

this year. gold is down 5% year to date and the s&p 500 is up 9%. if you can come back to the graphic. 49% on the eve of what was a market crash they were optimistic about stocks. it simply tells you what the issue is in the minds of the public on a polling basis. >> and i suppose those cable television ads that tell you to buy gold again and again. >> absolutely. >> it's a fascinating survey. we'll come back to you throughout the day. >> in the meantime, let's talk about the unanimous vote in washington, they're asking regulators to develop a surcharge. so are the banks preparing to add the levies? kayla township has more. >> we should vote that vote was 99 to zero and the bill against big banks it got through unanimously and it ends the

support to end what congress is calling big bank, quote, subsidies, in the form of government backstops that are basically guaranteed when you're a large institution. a spokesman for senator vitter, one of the authors confirmed the separate bill would be put to the senate as early as april that will introduce a new capital surcharge for the country's sixth largest bank. it would appear that the move has the backing from the federal reserve. the bill began last year as a letter to fed chairman ben bernanke from the senators who requested that regulators take away this funding insensitive. bernanke said introducing new surs is charges will help fix the problem of too big to fail. they would come in excess to basel 3, the global capital reals to hold more capital than others and they will post the remaining banks. for the bank's part they're focusing on the basel rules.

they don't believe there's anything in the current language that's coming to the floor that denotes more fervor and that's breaking the banks up and that's noting what washington is proposing is more capital and the results will be mostly borne by shareholders if the banks fall even further, guys? >> thank you very much, kayla tausche. >> facebook's face plant. hitting an intraday low of 2425 yesterday. is this the beginning of a stronger pullback and should you be buying on the dips? plus, the housing recovery and we're headed to the windy city to find out what is behind the exploding sales and the shift to the sellers' market. you won't want to miss that. back in two. using technical analysis streamline their process? at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. we like this idea so much

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it's been it's been half an hour since we got new data and the fed and all of those were a miss and yet the dow is up triple digits. >> s&p is up to 9 to 1560 to the all-time closing high which we did not get to. and the nasdaq's up 15 at 3248. >> the nasdaq gaining 25% over the last six months so is it time to unfriend the stock?

rich greenfield is a median entertainment analyst at btig and he has a sell rating on facebook. rich, it's always good to see you. >> thanks for having us. we talked a few different times about facebook in the sell rating and at this point it's close to 22 bucks a share and i'm curious. at that valuation, does it actually become in your view a more compelling optibased on valuation? >> to me there's still a decent downside with the market that you talk about breaking new highs. facebook continuing to go down certainly creates a lot of value for investors to continue to short this stock. when you look at 22 the issue that you're really hitting at is two main problems with facebook right now. one from an investment standpoint, numbers are too high and we talked about how people brought down their 2013 expectations and they're still very, very robust. numbers need to come down. they may even miss from a mobile advertising which is the key focus number. we worry that mobile advertising could be down sequentially in

q-1. that would come as a surprise to the street and could pressure the stock more in the near-term. the other issue, melissa is really the question of social advertising. does social advertising work? and i think of today's new york times they took a picture of a ford motor ad that came out of the blog posts and they reprinted it in the times today. when you see that ad look at it. it's one of four ads. one of rich greenfield's friends likes ford trucks and because of that they decided they'll push a ford truck ad on me. i don't drive a ford truck. i don't know what in my profile they know where i work and what i do and everything about me and all my friends why are they pushing ford truck on me? social advertising is really, really challenging. >> social advertising in general, i'm wondering how much of this is a facebook-specific story and how much of this skepticism over social advertising should be extrapolated to other stocks? >> the overarching point is people thought going into the ipo that facebook's data was better, that because of their ability to target based on social that they would actually

outperform in advertising and what you're increasingly seeing is if you're looking at your facebook news feed you're seeing more of your suggested posts and that means it doesn't come from one of your friends and targeting you based on demographics and other places you've gone on the web. that's just what yahoo does and that's just what aol does and lots of other sites do that. what makes facebook special was the data on social and they're retargeting a long practice of the internet and it just makes facebook a lot less special and probably deserves a lot less of a premium multiple because the data isn't as good as you thought it was. >> you're probably not target audience for facebook and therefore the way you react to having push notifications or whatever come at you may not be the same as a 15-year-old girl, for example. >> don't take me -- grab one of your friend's phones and grab

one of your kids' -- whatever device they're on and look at the advertising and i think what you'll end up looking at is it's looking less and less like facebook and ads that don't seem terribly relevant to the target audience. whether it's game installers trying to push a game install on you and these are taking up the full screen and they're very, very small. those are actually very big, very invasive, disruptive ads and the question is historically they were supposed to be better and they were supposed to be content if they were driven by social and now we're seeing them get away from social ads and we're seeing more of these so-called suggested posts which are really just direct marketing. that's basically what it is. >> it's not facebook. it's spambook, one of the great quotes of the day, rich, thanks for your team. rich greenfield of btig. >> the battle over gay marriage heading to the supreme court today. the nine justices will consider

callal's prop 8 which marriage between a man and a woman is constitutional. john harwood is where there's an active scene outside the courthouse. >> it's a remarkable scene. i'll have the cameraman pan over to the side to show you, there are thousands of protesters out in favor of marriage equality and on the other side of the street you've got people standing up for the traditional notion of marriage. this is -- they have a loud voice still in this country and they're on the losing side of public opinion and if you look at trends in the country very rapidly over the course of the last several years, opinion has shifted in favor of the right to same-sex marriage which the justices will define today and if you look at what corporate america has been doing. it's already a settled question. look at these numbers which the human rights campaign published on their website and 99% of major american corporations and

they surveyed the 1,000 have anti-discrimination policies in place and 84% of them provide domestic partner benefits for same-sex couples. so you can see that the drift is very, very clear, historically speaking, but that doesn't mean that this supreme court which has a majority of justices appointed by rep relationship presidents who in the past have been opposed to same-sex marriage doesn't mean this case will come out the way the protesters on this side of the street wanted to, carl. >> we've got two cases here, john. when do they actually resolve themselves? >> it will be this summer before we get rulings from the court. >> right. >> today they'll take on the question of constitutional right to marry and all of the benefits that go with that. tomorrow they'll be considering the constitutionality of the defense of marriage act which was signed by president obama when he was running for

reelection and he has switched sides and said he himself who signed the law believes it's unconstitutional. >> in the meantime i see tickets for those that have cued are trading at $6,000 in order to watch the supreme justices today. we'll come back to you throughout the day and obviously over the following sessions. for the moment john harwood in d.c. thank you. >> up next, the housing rebound in the windy city. we've got an in-depth look at what's working in chicago's real estate market. plus the analysts behind the highest s&p price target now on the street. tony dwyer says 1760 is on his cards. he'll join us later in the show. [ male announcer ] when it comes to the financial obstacles military families face, we understand. our financial advice is geared specifically to current and former military members and their families. life brings obstacles.

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heading to the windy city and the latest kay shiller report out this morning shows chicago home priceser not doing quite as well as perhaps the rest of the country. colin joins us. he's a real estate agent with green town realty. welcome to the show, sir. nice to see you. >> thank you. thanks for having me. okay. just before we dive in to looking at individual houses, today we have a reading from kay shiller that shows that house prices in your area in chicago in that city are up 3.3% in the year. that's the worst performer after new york, but i imagine that's not how you're telling the story. >> no, right now in chicago we're really seeing an increase in pricing. we're having what we're seeing as a lack of inventory of the existing homes and we're seeing very short market times right now. we're having multiple offers on product that's coming on the markets. we're pretty much seeing a perfect storm right now with interest rates being at historical lows and with our product also being at a historical low.

>> let's look at some of that product and the penthouse that you've got that overlooks the park. >> that's's spectacular building. it's 400 square feet and it's on four levels and it overlooks millennium park which is the jewel of chicago and it has unobstructed views of lake michigan. that unit right there will sell right around $5 million. i thought you were expecting four and a half. will you do sealed bids? >> we're expecting multiple offers on it and we're seeing right now that things we're having flash sales pricing here in chicago where things are increasing at such a price that we're able to get higher than what we originally projected. >> let me take you to olive avenue and the property you have listed there at $445,000. where do you expect that to go? >> that right there is a prime example of the housing recovery.

that's in a planned unit development on the northwest side of chicago that's traditionally blue collar neighborhood. we sold 19 of these houses last year and we put another nine under contract this year and we figure that will be going from 445 to $450,000. we have time to show one more. which would you prefer, gulf road or north sheffield? >> the one on north sheffield. >> okay. >> that's in the heart of lake view that's a two bedroom, two bath walk-up condominium. we ended up having that as pending right now. that unit sold in two days for 2% under asking. in the past, a unit like that would sit in the market for a few months before we got a qualified buyer. >> just before we let you go, colin, how easy is funding? are you taking cash buyers? how are you playing that side? >> what we're finding right now is we're getting financing and the major banks are financing buyers and our sales prices are

jumping so fast we're having problems with the appraisals and we're finding that the buyers want to stick in these days and they're paying the appraisal price. >> colin hepson with a look at the chicago realty market. >> i want to know if the sheffield address comes with tickets. that's a great area. a couple of tech stocks on the move. >> western digital and seagate technology moving higher this morning leading the s&p, actually. both mentioned positively at green capital and analysts there saying the hard disk drive environment remains stable and they see upside to march quarter consensus effort mats and analysts say western digital is a buy and the price target 54 and they rate seagate a buy. the price target is $38. >> fixing the unemployment problem when not all of the numbers add up. and that's the topic of santelli's exchange. back na couple of minutes.

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welcome back to "squawk on the street" and tuesday's rendition of the santelli exchange. if you want something fixed, whether in the private sector or

more importantly in the private sector, there always has to be incentive. everything is about incentive. capitalism is a great incentive. but sometimes without incentives, large issues either go un ♪ ed or totally unfixed. i'll give you an opinion in this regard. the federal reserve. yesterday we had my buddy on that said the grand bargain a couple of years ago never happened. enpart of the reason is with low interest rates there isn't this climactic epilogue to an issue to address it. when you think about employment and unemployment, we all know by looking at things like labor forced participation rate, there's a huge swath of america not counted as ub employed.

now think incentives. we are going to go to something i found great. npr planet money wrote an article called unfit for work. it's about people on disability. we've heard this. anybody who has watched larry kudlow has done a great job. instability is on the rise. here's some aspects that make you grind your teeth. okay. there's about 14 million people on disability right now. and how many of these people are counted in the ranks of the unemployed, you ask, zero. zero. so where is the incentive to address this? we need to put them above the radar screen. in this article they concentrated the first half on an area, hale county, alabama. one in four working age adults are on disable. it isn't just a problem for

people who are older, although that's part of it. most of the stories being recanted in the article are 18 to 64-year-olds. not in retirement. and it's really portrayed as another welfare program. but it isn't exactly the same. first of all, if you look at minimum wage you can come up with $15,000 a year income on minimum wage. here's the wild card. on 13,000 you get health insurance. yes, health insurance. and the whole program is just shy of $300 billion a year. if you look at the research, this is the final point. anybody in the first quarter, how many of them have moved out of the program? less than 1%. this is something we need to address. i'm not saying there aren't

people that are on disability that shouldn't be, but much of it is illnesses like back pain, mental illness, but it's a judgment call. the doctor of this article, the first question he asks, do you have a college degree? if you don't, most of the time you're going to be on your feet for a job. we have to do better. melissa lee, back to you. >> thank you very much, richard santelli. >> we should touch on headlines coming out of europe and getting attention. at the daily news conference it was suggested they may write bailings for depositors to repair the loss if they have over 100,000 euros. that's then repeated by an eu lawmaker as a possibility for parliamentary law. we have seen banks declining in europe. i don't think for the market it's a great surprise because we assume this is where they now are. everybody is like, oh, no.

we get it. the cat is out of the bag. they're not big market moves, but it's very important. it undermines the change in europe, and a lot of analysts are very worried. it was a lot of noise overnight saying how stupid are these europeans, because as soon as you think somebody will go for restructuring, you get another look at the country. it's crazy. >> it seems like a strange way to foster confidence in your banks among large depositors. it is a model, right? regardless of the walkback was like. >> you have two ecb members clearly worried about financial instability. the politicians are clearly not joining them. crazy. crazy. >> that much more "squawk on the street" is straight ahead. ♪ ♪ [ male announcer ] help brazil reduce its overall reliance on foreign imports

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bill writes they have to keep the "b" drop the uick and replace it with mw. bill writes a crossover add driving to a jcp store. wait. never mind. it's all about design. audi has fwd-sporty cars but the design is hot. hard to say. car business is tough. >> yep. >> there's always new models coming. >> yep. the contrarian show. why the housing bottom is not in yet, and we have the analysts making a bold call in one of the worst performing s&p stock this is year, peabody energy he says outperforms the analysts from raymond james. and one matchup that we're going to talk about tonight, apple versus google. that's a question a lot of people are asking themselves. >> did amention a special street

signs today at 2:00? we're going to meet some of the cnbc reporters in greater details. it could be fun. >> that's nice. we'll see you guys later on. if you're just joining us, here's what you missed. welcome to hour three of "squawk on the street." here's what's happening so far. >> there's six tst's a bear market checklist, and i don't see them. is the fed tightening? no. are evaluations stretched? no. is the recession looming? no. are banks, transportation stocks and financials taking bullets? no. and are bond shields widening? no. >> >> they care about austerity and fossil fuels. they don't seem to care about jobs. here credit is getting more bountiful. there it's getting scarce. >> no growth environment in europe. >> yes. you look at verizon doing a phone deal. at&t is the apple company, and

t-mobile. that's what i said. this is phone-icide. whey don't they say don't use us? don't come to us. we're more expensive than everybody. that's a great pitch, right? >> overall, we beat the consensus forecast, which would be a touch under 88%. we're in 8.1% over the last 12 months. >> they were supposed to be better. there was supposed to be content if they were driven by social. now we're seeing them get away from social ads and seeing more so-called suggested posts, which are really just drerkt markirec marketing. that's basically what it is. good morning. we're live here and beginning with breaging knew on citi. kayla? >> the federal reserve is charging citigroup with inadequate oversight for the

money laundering practicing. it's unclear what nature of the inefficiencies were, but it comes after several banks have been caught in cross hairs dealing with countries like iran and libya. it carries no monetary penalty but it requires a detailed joult line within 60 days. that lays out the efforts to reinforce with staff and solutions to audit problems among other things. citigroup is required to submit quarterly updates to the fed on the efforts to remedy the issues. the bank previously signed consent orders over similar issues. this is not a new issue, per se, but it's definitely news because it is an enthe forcement action this time from the fed. >> kayla, thank you for that. let's get a check on the markets, meantime. the dow is hanging onto a pretty decent rally here. we are up 90 points at 14,538.

s&p is up to 1,559. not quite keeping pace with the dow's gain. nasdaq is up almost 10 to 3,244. shares of netflix rising as pacific quest raises the price target to 2.25. andy hargraves says increased subscriptions. abercrombie, gap, macy's, coach all in the red. march weather one unseasonably cold and wet and they believe soft sales trends in february will continue to march. let's get to the road map. markets flirting with new highs. the streets are starting to take notice. we'll talk with the man with the most bullish s&p 500 out there. cyber attacks are becoming more and more common. are we really our own worst enemy? a former white house security

adviser weighs in on what the u.s. needs to do to protect itself. and best buy and jcpenney going through big transformations. only best buy seems to be getting anywhere. we'll find out what best buy can learn. the s&p is edging closer to record highs. two of wall street's biggest bulls are joining us this morning. danny raised his target last week to 1,700 and senior managering director, big call today. the most bullish target, as we said, 1,760. an increase of more than 100 handles. barry, you want to show me what's on your shirt? >> 1,600. we went to that target if you recall, second half of '12. >> how do you feel about it now? >> well, reraised it to 1,700. in 2011 we had a target of 1400. hit it in the first quarter of

'12. now the target of 1700 is directionally correct, it seems. >> it's been that way. not sure we have a bull/bear debate. it's more like a bull/bull. what is magic about 1760? do you feel like you're pushing the envelope in turms of the room the bulls have to operate? actually i think i'm being too conservative again. i think we are competing as to who can be the most optimistic. because they are able to do whatever they want with monetary policy, the funds rate haven't changed since 2009. as a result of that, my market rate has changed since 2009. the fed is able to print money. the money is becoming more available, you have no chance of going into a recession, even with some of the global shananigans that we've had. to change your opinion, we are

accused all the time of flip-flopping and changing opinions because of price. i'm not going to change my opinion from the bull side until we are much closer to a recession. historically that only happies with a weakening of availability of money. it's the opposite today. typically you trade at 19.1 multiple. i went all the way from 15 up to 16. and i'm high on the street. >> tony, you say you're increasing the target into a correction. you say it seems obvious that we'll have a pullback, 1500. why is that obvious? >> we're 9% above today the recent peak. this is the third longest streak without a 5% reflect. there's not magical about it. it's time for the markets to rest. it's that overbought. if you're a long only fund and

looking at the next 6 to 12 to 18 months, i would buy them here, buy them lower, buy them higher. i think you'll get a chance to buy them over the course of the coming weeks. i would rather convince people to be bullish in a correction because they're only natural and healthy until they happen. i think i will do my job the best if i convince them as it's happening to use it to their advance. >> what is the mix between just fed-driven flows as tony suggests and fundamentals from corporate america, from the economy at large is this all about the central bank? >> the bullish call the last year and a half has been based on that fine balance between inflation and deflation. we felt all along this is a

balance sheet recession. things like lending would be a late cycle. if you can get 10% from the pe, sure, 17% is very reasonable. >> do mar vins at the level that they're at right now give you any concern? one of the chief arguments is that they have nowhere to go but down. >> there's no question that cheap money and deficits creates margins and profits are in the peaking process. we don't expect a big drop from these levels of rapid decent. >> can i handle that one, too? >> yeah. yeah. >> in 1966 margins peaked in the middle of the cycle after tax margins peaked in the middle of the cycle. it's the only time the yield curb inverted. we have had an inverted yield curb without a recession. the reason i'm bringing that up,

the only times the margin collapsed, and they're right, but simply cannot cut costs fast enough. we keep thinking we're going to get a margin correction or aversion. companies don't raise cost more than the rev new. they simply can't cut them fast enough when the revenues decline. >> that's a good point. tony, barry, we'll come back to you guys throughout the year. prevoktive calls from you both. thank you so much. >> from apple to the chase website, no one is immune to cyber attacks. when we come back, the former secretary of homeland security and white house security adviser are here to explain why we're our own worst enemy when it comes to hacking. first up, rick santelli will talk housing. >> absolutely. in case schiller wasn't bad, we're going to talk about it

from two directors. the regulatory body, not a lot of people are enamored with what he's doing. i am. we're going to talk about, can they get rid of him? and historic trends about low interest rates that may surprise you. not that they were low, but how much higher they were after the cycle ended. clients are always learning more to make their money do more. (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me.

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let's take a look at the health care sector. flat but up 1% over the last week. hey, josh. >> hey there. the best performing sector is health care. health care up some 13% this year and the second best performing sector, one name is gilliad. providing an update on the hepatitis "c" drug. they concluded the trial should continue without modification. carl, back to you. >> josh, thanks a lot. cyber security and cyber espionage have surpassed terrorism. the cyberspace war keeps tallying up. toj ridge is the former secretary of homeland security adviser to the president and president george w. bush. both are cofounders of the ridge

schmidt cyber initiative. good to have you back. >> good to be here. >> you wrote an op-ed not too long ago calling us our own worst enemy. what did you mean by that? >> i think we have underestimated and our goal is to raise the notion you have to build a culture of resiliency in your operations. look, the private sector looks to expand the network through cyberspace. they talk to customers and supplier suppliers. they do it for sufficiency reasons and profitability reasons. when you extend yourself, you increase your vulnerability. we're own worst enemies when we don't pay attention. >> howard, ten years, i found this hard to believe, since we unveiled this national strategy to try to secure cyberspace in this country, and yet, politically you make comparisons

between that and the the fiscal cliff. what is the dispute? why the elongated period of inaction? >> well, that's the tough piece that we have problems understanding. we hear both sads saying we need to do more. we need to reduce vulnerables. we need to create legislation to hold criminals accountable for this. yet when it comes to getting this finalized through congress, there is tremendous inaction. so it's one of the things that we're really concerned about. businesses should not have to spend millions and millions and millions of dollars making their systems more resilient. it's about risk management and the government has a role to play in that. one of the big roles is the information sharing with the private sector. that the government has unique visibility and the threats can help the businesses better protect themselves. >> if i might, president bush when he dro the introto the

cyber strategy ten years ago and president obama talked about the public slr private partnership. so the information component is something that a lot of people talk about, but as of yet, they haven't really determined a protocol to enable the private sector to protect the government's infrastructure and the government to share information so they can protect their own. >> meanwhile, the examples are piling up. we had one with apple and their password function. linkedn, chase. you say the private sector should pressure business to do more, howard. what specifically? especially for a bank that, they know where their interest lies. >> that's correct. there's a lot of compare songs in the physical world you have a

major snowstorm. in cyberspace you can avoid a lot of that stuff. one thing they need to do is make this part of the business plan. they have to do the risk management. it has to be an issue that the board of directors look at as well. and none of the business schools to date have been teaching about cyber risk. sees a report on it and thinks "a "it can't happen to us or "b", it's too expensive to fix it. take a look at this. make it part of the dialogue and elevate this to the same level that we have in the government. >> finally, mr. secretary, it's been more than a decade since you opened the doors at dhs. did you think we would be having this conversation at this point in time? no. i don't think anybody did. we commercialized the internet in 1993. fast forward 20 decades and you see everything you do from the

personal world to the corporate world that you report on every day is the backbone, is the nervous system. and for every incident that you read in the newspaper, there are probably 1,000 or 100,000 more times. some are detected. some are not. for that reason, howard and i have to get in and talk about the regulatory and legislative framework, let alone the tactical air space that executives not only in government but the private sector need to be aware of. >> people are beginning to get the pictures, but we need everyone on board. >> tom ridge and howard schmidt. demonstrators are gathered outside of washington today. we'll get an update on the hearing live from washington in a few moments. when "squawk on the street" comes right back. carfirmation.

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let's get back to rick santelli in chicago and look at reform of the mortgage market. >> this is a big topic not talked about nearly as much now that the gscs are making a little bit of dough. welcome, ed. >> hey, rick. how are you doing? pleasure to be on your show. >> very well. i want to cover three area. the first area is i personally think that fhaa acting director ed demarco is doing a great job because he's trying to watch out for taxpayer dollars. he seems to be holding the line. but he's an acting director. if he's actually the director, the government for cause could get rid of him. but what's the difference? should the political wins try to

get rid of them because they would rather do more, even though i don't personally think they should? what's your thoughts? >> i agree with you. he's the quintessential civil servant. he's doing his job to the best of his ability. following what congress sets down as the guidelines. if he's asked to do something out of the guidelines, he says, you change the guidelines and you do that. that was his position largely on principle reduction and says it may cause fannie and freddie even more, which meant the taxpayers. in terms of his removal, you are right. there isn't that i have seen or anyone has seen particularly. so it's really incumbent on the president. he has to get that through the

senate, which he has been unable to do. he tried it once a couple of years ago. it didn't make it through. the whole issue of doing interim recess appointments is now under a cloud. so it looks like the president would have to do a straight forward replacement, which hasn't happened. >> ed, point number two, historical interest rate trends. you identify three. and the end result after these trends reverse at least from the low interest rates perspective, something big happens. tell us about what you found looking back through history? >> well, i looked back to just after the civil war. and so interest rates peaked during the civil war, as you may expect. then they had a long decline. interest rates tend to decline for about 0 years or so, 35 years. and then they went back up, peaked again in 1920, and then had a long decline to about 1950. and then peaked again. most people will remember in the

early 1980s and have been in a very long decline and now running 32 years today. we don't know how much longer it's going to but my takeaway is these interest rates tend to go in very clear cycles. they go down for a long time. they go up for a long time. they're a little bit choppy, but the trend is clear. it's very hard to call a turn given particularly the enthusiasm of the fed for keeping interest rates low. but tease rates, you know, have to be at near bottom. they have to turn at some point. when they do, they will go up for a generation. so i question, you know, the housing recovery that we're building here. it's real in terms of house prices going up, but ha is the foundation if it's built on interest rates that are 3, 3.5%. in the early 1900s mortgage rates were 6%.

we're talking interest rates half of what they were, even when they were low in 1910. >> thank you very much. next time you come on we're going to talk about jumbo mortgages. . the rates have been contained. that's an interesting topic for another day. thank you for being our guest. >> absolutely. the cyprus bailout deal could be getting divine intervention. would you accept land as payment from this man? we'll have the story on that after the break. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade.

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about two hours into trading. 8:30 on the west coast. 11:30 on wall street. boeing is the biggest gainer on the dow. the maker says the new battery system went according to plan. speaking of dow components amex rising to new highs and toid expects the japanese automaker to sell 2.2 million cars in the u.s., siting optimism about the consumer. let's bring in bob pisani. >> the dow is responding to good consumer numbers, too. >> yeah. i say the numbers were meh today. but consumer confidence is a little bit of a disappointment. the important thing is we're seven points away from new

highs. a lot of people say the market stalled out. stalling is not bad, considering we were up the second week in march. let's look at the sectors here. a little bit of a defensive tone today. teches, financials, sort of on the downside. all the major sectors are to the upside overall. in terms of individual sub sectors strong today. building sectors are good today. ch sherwin williams is up. 411,000 new home sale numbers. not as strong as january. but january we were at a multiyear high on the numbers here. let me show you new home sales here and the important thing is the trend is to the up side. that's the good news. the bad news is this is where we were in 2006 and 2007. and we're at 411 down here.

so bear in mind, the trend is up. but it's a long way from the old highs. we're still a long rgs long way from all of that. let's move on. that reallily stalled out. i'm not that worried about it. here's what i watch when i want to look at the total stock market. it's everything. 99% of the market capitalization in the united states. it's bigger than the s&p 500. and we're less than 1%. less than 1% away. this is not what i call signs of deterioration. you can own this. the exchange traded fund. i've been asking people, what did we learn from cyprus? give me two or three bullet points. first, bank creditors race greater risk than taxpayers. depositors are unsecured creditors. i think you'll see legislation on that to clarify it.

they can't take their money out and put it anywhere they want. here's one other thing. this is my personal observation that i think is a lesson from this. put up italian credit. it hasn't changed much. we're not seeing in dramatic changes. european government debt may be more secure than bank deposits. european government debt may be more secure than owning bank depositive silts. the portuguese finance minister just on the wire, cyprus deal does set a precedent on deposit protection. if you can backtrack all you want, mr. dutch finance minister, but they're saying it is. >> speaking in unison over the past 24 hours. thanks, bob pisani. hi, sharon. >> hi, carl. we're looking at gains in the oil harkt, and particularly in the wti oil contract.

that has a lot to do with the positive data we got on durable goods this morning. we saw contracts hit a five-week high and the gains that we're seeing there far outstripping what we have seen in the brent crude market. it's evaporating very quickly. it's an an eight-month low right now. and several reasons for that. a lot of traders and analysts say we're seeing refinery demands picking up here. we're seeing them get out of the scheduled maintenances. we've been telling you about that. part of the country, which is a key delivery point for the crew. and that's another factor. everyone listens to what the saudis have to say. they're saying $100 a barrel is reasonable is another factor that may be keeping the brent price around that mark. we're also watching what's happening to copper.

it's seen the decline that we have seen over the last month or so stall with that data. keep your eye on the gold price. it has been falling tw with the cyprus bailout. we're looking at gold year to date so far in this quarter, this will be the first quarterly loss for gold since 2001. back to you. >> that's saying something. thanks a lot, sharon epperson. a deal may be in the works, but the unrest is not over in cyprus. thousands of students are protesting in the capital. michelle, good morning. >> hey, good morning. the unrest is growing every day as the people of cyprus begin to realize the implications of the bailout, which is a massive hit to the economy. thousands of students took to the streets today. they don't think this is a bailout deal at all.

this downsizes one of the country's biggest banks and that will lead to a contraction in the economy. the financial sector is 50% of this economy. only believe we could see 10 to 30% over the next three years. thousands of employees al protesting. they were there because they heard rumors that their bank would be liquidated. so far that is not true. the bank has the power to do that in the future if it wants to. and it's to the point now that the employees leave the central bank there are armed police officers there to make sure that the cars are not attacked. in the meantime, the bankings are still closed. they won't open until thursday at the earliest. there's a combination of factors. there's lodgistical issues.

there's questions on what kind of collateral the european bank will accept in the process, and one of the more surreal turns in all of this has been the continuing presence of the ar archbishop of cyprus. he has repeatedly offered the land of the church. he says it's worth 2.6 billion euros as collateral. use it as deposits or funds that could be monotized. and in the discussions of the ecb and blah, blah, blah, once again the land of the church of cyprus comes up. but central banks don't tang land as collateral. that's one of the big problems. back to you. >> i knew you would come around to that. michelle caruso-cabrera, thank you so much. >> hey there, carl. how about a burger and a milk shake. check outsonic. sonic is forecasting same store

sales in the low digit range. that's after reporting flat sales in the second quarter. also, those more cautious on the stock seek tougherps ahead. sonic is up some 9.5% rite now. up some 6% in the past 12 months. carl, back to you. >> thanks so much. let's get to washington. the supreme court is hearing arguments on same-sex marriage. people have been camping out in front of the courthouse for nearly a week. john harwood joins us with the latest on that. hi, john. what's going on? >> reporter: well, the arguments are over for today at least, but the emotion is not. you can hear the speeches being given, the cheering going on. advocates of same-sex marriage on this side of the street. opponents on the op side site of the street. the court heard a case today on proposition 8 and whether or not the right to marriage can be

taken away by a proposition of that kind. tomorrow there will be arguments on the defensive marriage act signed by bill clinton in 1996. but it's important to note that public opinion is clearly drifting towards the side of gay marriage. the advocates of gay marriage are going to win historically. that's what all the signs suggest. and they have won in corporate america as well. if you look at the statistics, 99% of major corporations surveyed by the human rights campaign, which is lead leading gay rights organization have anti-discrimination policies based on gender orientation or sexual orientation. 89% have domestic partnership benefits for same-sex couples. you can see which way the wind is blowing in corporate america. it's blowing that way in public opinion. what does the supreme court do? do they rule in favor of a broad right to gay marriage? do they have a narrower ruling? or do they go the other what?

which it still could. >> john, we know how hard it is to try to guess about the decision based on the arguments. people have been burned on that before. is there any sense to what they may do after how the arguments went today? >> well, because i was outside not listening to the arguments, i wouldn't try -- or i couldn't try. if i was in based on what happened on health care, i don't think i would go there, carl. you cannot predict which way the justices will go. >> right. the questioning often means very little. what a day. thank you so much for that coverage. john harwood in washington. >> jcp cannot seem to get it together. look at the stock. we'll find out what best buy is doing that jcp is not. and imagine a store with you cannot buy anything. you can try their clothes on in the store, but you have to buy them online. the ceo will join us live to tell us how the strategy is making them millions when we

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see you in about 15. >> take a look at best buy and jcpenney. best buy is bouncing back. jcp is losing its edge. with can we still be there for a turnaround? anthony was the first analyst on the cell side to upgrade and rick schneider, a retail specialist with maxim group. guys, good morning to you both. we're talking to you about two names. they are on opposite ends of the spectrum in terms of year to date performance. is what's happening for best buy real and was it easy to predict when you made your move? >> it's 100% for real. there's no question about it. in best buy you had a company that was $50 billion in sales, the largest brick and mortar consumer electronics retailer but was just behind the times. became a little bit bloated. still was opening stores when they really shouldn't have. and didn't respond to the change in terms of consumers. shifting to ecommerce.

you now have a new management team in who has turn around experience and a lot of el vent experience to turn the company around. no question about it. >> it seems like the turn the in the shares began when schulze emerged. people are saying well, it's a good thing that didn't happen. we'll be able to use his expertise and deep knowledge from within. do you agree? >> i agree. the other thing is he is chairman and has two board seats he's unlikely to sell his 20% stake in the company. it's nice to have the soap opera behind the company. it was a distraction for senior management and employees throughout the organization. now they can focus on the turnaround at hand. so we have cost cuts. you say they're the tip of the iceberg.

you have competitors like amazon, and then we have e commerce and the cfo who changed the game on that front. which is the most important to pay attention to? >> i would say in the near term it's going to be the cost cuts because that is very within the company's control. the other thing we will see is better top line performance. particularly given a price match program and also trying to improve customer service in their stores. >> all really interesting points. rick, i'll turn to you on jcp and ask if there's anything positive that you're seeing, other than the claim that comps will go positive this year? >> no, there's not a positive metric that anybody can point to that would indicate this company is on the verge of a turnaround. now this move with caribou coffee. explain what this means?

>> it could mean any number of things. caribou didn't say why they pulled out, but i think it's very unlikely for an apparel retailer to pull out because they would never get the square footage back. so if jcpenney would turn around, they would be missing the square footage. so caribou coffee is unique in that they pulled out. they could be worried about the cash flow characteristics. i continue to hear rumblesrom the community that they're all worried aboutjcpenney's catch flow situation. >> they've been resolute about not touching the revolver. you say you wouldn't be surprised if they did try to raise cash through some other means. how do you mean? >> well, they have telegraphed that they may try to put in what

they call permanent capital. we think they can do a mandatory preferred which could be diluted to the shareholders. and if you're owning the stock, you have to bet that they are going to turn profitable again. i think that could be further downside for the stock. >> the return to promotions. we're all sort of -- we have gotten past the idea that it's ha massive u-turn in strategy. i wonder if the brand partners feel at last like johnson has found the right path. no matter how long it may take to get to where they want to go. >> that's a very good question. a lot of the brands may not want to be associated with someone who is very promotional. they make a big deal about trying to get their customer back by promoting. if you go to the stores and look at it, the customer who was shopping there in 2011 is not

going to be buying the merchandise that's in the stores now. >> and then they get the conversion rate up, which is also a tough metric. couldn't talk about more two different names. appreciate your time. >> thank you. >> >> you might like those pants you're buying in the store, but don't plan on taking them home. it's the ultimate in showrooming and helped the kpen raise $30 million in funding. ♪

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an e-tailor on a mission to solve a simple problem, men's pants that don't fit. customers have the choice to buy pants online or visit a guide shop location where you can try on a pair and go home with now bags in your hands. cutting out the way customers perform to shop. think show rooming in a good way. could the future of shopping be bagless? andy dunn joins us here. we're talking about our adoration for the cubs earlier. you announced funding in the last couple weeks. it's not the only news you have. what else is going on? >> the firm was built around better men's pants. we spent three years spending time. what's exciting about the last couple years we started to expand to the rest of the outfit. i have a seasonal suit on, a jacket, a blazer we now sell.

a dress shirt. doing premium dress shirts made from italian fabric, called the gentleman collar in slim fit. the brand is built around fit. we're excited to evolve what the company needs from pants company to menswear company. >> people not familiar with the model may think, that's crazy. you have big large brick and mortar retailers you're partnering with. is this the way retail is going where the "e" part is half or more of the business? >> we were wrong in the beginning. in 2007 we started the company and said the whole world is going to online only. all we're going to do is be online. we made e-commerce the core. e-commerce is going to be the flagship store in perhaps as much as half of retail for any brand. we learned recently the offline experience of touching and feeling clothes isn't going away. people want to try stuff on. for a brand like ours built on fit, we want to provide that. we're now doing three things.

a partnership with nordstrom, we're in 70 nordstrom stores having a blast with that. we were lucky they made an investment in the company as well. we're rolling out our version of in-person retail stores, service driven e-commerce rooms than traditional stores. this weekend we launched our print catalog. we're redefining what offline means in an on line driven world. >> your initial pitch, you must have been in meetings where people said you're out of your mind. that must seem a lot less revolutionary now i'm guessing. >> we were lucky. we were surrounded at stanford with a community of people who think about innovation. i remember the first time i pitched someone on the idea. i sat down with joel peterson, a wonderful mentor, the chairman at jetblue. i said we're going to take these better fitting pants and build an e-commerce driven experience that's going to bundle together clothing and service together in a way we haven't seen. >> he wrote you a check. >> joel cut me a check. that changed everything and made this possible. >> where would you put the

consumer right now? out of curiosity. we keep getting confidence numbers that are softening. yet overall gas prices are coming down. markup, housing's up. are they feeling good as far as your data tells you? >> unbelievably good. you know, i think perhaps we're in the fortunate position of being optimistic. we're an innovative business growing at a time a lot of other people are feeling pain. we don't want to pretend the economy is sizzling for everyone. from what we're seeing, we're encouraged about the future and think we can continue to build great companies in america. >> i wonder if there's a demographic split, if an older gentleman, right, who's used to shopping though he hates it, in a certain way, is not going there. right? if you have to wait for some of these younger kids to get older and get into the shopping zone. >> this is where we've been fortunate with nordstrom. with nordstrom we have a pant called the weekday warriors, a noniron pant. retails for $98. travel with it, throw it in a bag, looks great, fits amazing.

all brands built on less boxy than the typical american fit but more comfortable than the european fit. we're finding a 50-year-old guy, 60-year-old guy who will wear that product. once they know it they can come back and transact online. at the same time as our online-driven model appeals to the younger customer. >> talking to that audience to a large degree right now. andy, it's a fascinating model. please come back. annie dunn. don't forget to tweet us. gm attempting to freshen up its buick brand and get younger customers. company unveiling revamped versions of its full-size lacrosse luxury car and regal sports sedan. what does gm need to do to make driving a buick cool? tweet us @squawkstreet.