to do that and have the guts to act on it. it's okay to say i was wrong, but the most important person you probably have to understand is yourself. n't forget that. >> you have to understand your wife, too? >> happy wife, happy life. >> yourself second. >> relationships matter. >> i like this message. >> robert, thanks a lot for coming in. >> thank you. >> right now it's time for "squawk on the street." ♪ ♪ ♪ >> good monday morning. welcome to "squawk on the street." carl quintanilla, jim kramer and david faber. 130 s&p earnings and two central banks including the fed, a jobs number, you name it. futures reacting to personal spending for march which was better th better than expected. europe's up as well and it does form a coalition government with enrico letta, the new prime minister. our road map begins with a slew of reasons to hang on to your

hat and not the least of which is your jobs report on friday. a lot more economic data is on tap, too. the ecb, earnings from heavy hitters in tech, autos and drugs. >> you heard it here first. we reported this on friday, jc penney this morning saying it has a commitment from goldman sachs to borrow $1.75 billion in the bond market. the executive jumble at j.p. morgan continues with the coo. >>, they're returning to passenger service. >> we have a barrage of economic data, the central banks in the spotlight and the thursday's the day for the ecb, will they cut rates? of course, the busy earnings calendar continues. facebook, pfizer, gm all set to report later in the week. we are going move from this macro to micropicture which has not been as positive as some would leak. >> true.

this is a fulcrumec week. the ability to be able to turn this market in either direction can be -- can be on the line this week. i have to tell you that the vibes out of europe are about trying to get growth again and all of the vibes out of the united states have been how to resurrect growth. europe is causing a slowdown. i think that when you see the iceland government that got them in trouble back. when you see the italian government wanting growth. when you see spain wanting growth. you see the germans investing in spain to want growth, that explains they're all up for the year. if you read that journal story today, the lead story in "the wall street journal," it's nothing short of depressing. >> there is nothing we didn't know although perhaps you take a step back and realize nothing has gotten better and the one idea that was throughout the story which was not news is how much worse will france and germany get.

i remember when i talk to auto registrations in europe and how it was dramatic, to decline. >> we needed them to change the orthodox. >> there is a growing notion that they figured out austerity is not working, right? and this italy move does confirm some. at least pepe grillo and the far radical side that the government spectrum is not going to play. let's get some growth. i remember you looking at me in november of 2011 and saying the italian bond market, that is going to be the big danger. how will they be able to raise the money? >> the italian bond market is borrowing. >> it's below four! >> well, hello? >> hello? >> i'm, like, what are you, channeling drexler? this is his favorite line. >> i'm just saying if they want to do $100 billion tomorrow

there will be demand for this thing. the issue is these countries couldn't borrow. maybe they should borrow and maybe they should do paul drugman. >> maybe they should get rid of austerity once and for all or move it aside and the germans are still fairly influential, and i just think the germans are in trouble and it's not clear that they've signed on to the idea that you will not stick to a budget and still not cut, cut, cut to get within what you need to to make sure that we style want to give you the hours. we've been waiting for germany to be hurt to figure out that this austerity is not happening. >> there are the pfizers. a lot of media, david, comcast, via com, time warner, facebook, gm. people are still -- from amazon, the worst single day in 15 months. >> amazon did not have a useable

bounce and there were times when it gets hit early on and then buyers come in. i think there is a sense that people want to rotate back to some -- and still want the pfizers and i think people felt that wasn't going to continue, but if you have a u.s. that's not as strong and you know rates aren't going up and you want that three and change yield again. i had aep on friday night. this is a company selling with the peg ratio. >> this is one of the most expensive stocks in the world, but it yields 4.3 and it grows to three. 3%, it grows and it has a price to earnings multiple, david, that makes verizon look cheap. it doesn't matter. so you believe yield in this market is something that sustained stock prices. >> so at&t which had a bad week. maybe done going out. >> apple now with what may be a 3% yield. upgrade for disney today talking

about buybacks and dividends. >> disney has momentum, too. >> i don't know how much they talk about iron man 3. you may have to sacrifice watching the mets. >> that would be a big sacrifice. >> the nets -- >> the knicks look -- >> oh, geez. >> it's going to be a long summer and if i'm going to sit here with you bringing the mets up every single day -- >> it will be a long summer because i am going to. >> then there's the fed, jim. they're on tape with the journal saying leakly to stay the course and inflation indicators continue to be lower than the fed would target. >> look, i don't want to ever say it's not an event, but i do believe i'm more focused on europe because i think if i get a bottom in europe all of these companies that we fret about in terms of revenue growth we'll say why didn't we buy them? >> we need see, germany and

france hold the key, but i get the sense that spain and italy have said listen, we've played by the rules. we've done everything you wanted. >> we've had numrs of unemployed in france, for example, how confident are you that we'll get anything near the bottom for the two largest economies? >> i think what you needed to see was a mindset change and then you can get a bottom and once you get governments to say, you know what? growth is really needed. you'll know that the growth is needed if they ever say listen and we'll stop focusing on carbon emissions and we'll stop worrying about environmental worries and bingo, that means they'll come back. >> some companies it's extraordinarily important in terms of letting them grow and then it rebounds through china. >> and they're not great either. >> china, the chicago fed comes out and it looks not so bad.

>> i think the best quarter of last week was d.r. horton which shows the housing market was still alive and the first quarter was at&t, and if you're the fed and says small business is back yet and we're not done because small businesses are the ones that hire people. big businesses don't hire anybody, they fire people. >> small business do most of their business with big business. so it's the big business deciding to spend money that puts the small business. >> you buy the car and it's the people going to the new ford motor plant -- >> the new ge plant in alabama. >> yes. yes. >> we'll take that. >> something else that we've talked a great deal about here. jim mentioned cheap money. that is still what's driving so much in this market. point in case, case in point is how you want to say that, jc penney. we told you goldman sachs was testing the waters or signing up potential buyers of a bond,

$1.75 billion bond issue that it wanted to put together for jc penney and goldman wasn't alone in pursuing that and this morning, jc penney has said that they have entered a letter with goldman for a 1.75 billion five-year secured term facility that would be backed, as i told you on friday by real estate and other assets and they have below market leases that have some value. important point, though, for jc penney. the stock ran enormously after we reported this news around 3:00 friday. there were 28 million shares that traded in the last hour. >> what happened at 2:58 to get that stock going? >> we reported this news. >> look at that we -- he's a very giving man. david broke the story which said there would be no equity. i expected that there would be's huge component of equity and instead this shows you this market wants to go higher.

>> there isn't any sign that there's a turn in this business and no one cares. >> again, i come back to the idea that i've been hearing for a couple of weeks there were hedge funds that were proactively reaching out to investment banks and reaching out saying if you doing some, we want in. if we could get a 7% coupon or even a 6 3/4 and that was the range where this thing gets done. we'll take it. the search for yield, which you know is a bad sign. isn't that the essence of reaching for you. >> here you are secured by real estate analysts. >> good point. >> there is a willingness in terms of a lot of buyers out there that says i have a secured piece of paper that gives me that coupon. i will take it and that's why when you talk about bankruptcy and things like that you have to really pause because in a market like this, there is a search for yield. they are now -- it's not going to be a conversation anymore. >> if you take it off the table the stock will go to 20.

>> in 20023, it's not a lot of money, but get rid of that. maybe they paid down some of the $150 million that they took down and maybe they pay some of that back, but what we're talking about is not having the ability to try, try to bring the fundamentals back without having to worry as much. >> i'm glad we broke the story. >> right when it came out i was doing the stock trade so i think we broke it. i was part of the coverage. >> we made some phone calls and -- >> yes, we did a lot of work. >> i was trying, by the way, to get it for our show, but it took a while longer. >> we ended up getting it. >> we'll see, jc penney shares up this week. >> i'm marveling, first with the retail back ground. it's not that you're hearing the comp stores are getting better. all you're hearing is the financial engineering. en credible. >> another change in the

management ranks of j.p. morgan chase following the trading mess. the banking officer says co-chief executive officer is leaving the company to become payment processor for his data. matt will assume the role of coo. not a household name by any means, but someone you would know if you're in think bahhing circles. >> you always hear the trusted lieutenant, but this guy is and was of jamie dimmon. train's running on time, and that's what with he did at j.p. morgan. >> he could make a killing on the first day. >> he being. >> the first day -- he's the guy who ran comcast who wanted to run first aid, michael -- i'm forgetting his name. he ran first data for a while and comcast ceo. >> you can understand why he would leave, but what's interesting is, of course, you've had enormous turnover at

management and jp morgan since the london whale. >> the papers made it sound like turmoil. frankly, we wanted change because we wanted to believe that the people who may have been involved are gone. >> i don't think this gentleman got -- this gentleman got a great job, any time you have the company that's about to go public, you should seize that, and the business is better than i've seen it in years. >> really? >> i think it's really strong. >> i do. i think it's really strong. >> what remains? regulatory risk? >> under the new world of dodd frank you need both. i think you need commercial banking and i think you need banking and citi is up very nicely this year. >> which had a meeting last week that by most accounts was well received. >> it sure was.

>> look, let's give it its due. the stock is down terrifically and again, this is what people want. they have the core group of the commercial deposits and they want some trading that's not prohibitive and they don't want business to be crippled by dodd frank. morgan stanley, the stock has been terrible and even though i can question why that is so cheap. they want citi. they want corbat. >> at least they want him now. ? they want him now. >> as we said, a busy morning and busy week shaping up. why did one wall street analyst say he got cold feet when buying a samsung galaxy phone. also following the money flows, why does job's friday fit in. >> take one more look at futures. as you know in general, monday's not terribly positive so far this year, but we are looking at

a live open. more "squawk" at post 9 when we more "squawk" at post 9 when we return. tdd# 1-800-345-2550 when the spx crossed above its 50-day moving average,

meeting this as the company's 787 dream liner on back in service. ethiopian airlines flew it earlier this year. pre-market shares of boeing are pulling back a bit and they've been at 52-week highs and phil lebeau will interview james

mcnerney later today. >> they weathered the storm one would say, jim. >> not bad. >> never waiver. people don't understand, this is an engineering company and they always seem to think that somehow they're not going to get it right. they're a beloved company's, and nothing's changed and i think some of it is the ceo who is really one of the steadiest, least flashy, no hype to mcnerney. none. >> hard to evaluate the level at which they'll have to compensate carriers for the inconvenience. there will be some of that, but it's not material. >> the loyalty that you build up by doing that is amazing and the profit margins weren't going to be good and it's the 737 that's generating the profit and it's leak a semiconductor factory. the first 50% of the chips they'll throw out because they don't work and then it's 80 and then it's 99 and the profits are

assumed and not yet and they didn't expect it to make a fortune. >> they've cleared it, but -- >> they're begging if are this plan. begging for it. >> doesn't it beg the question as to why there's been a positive reaction to what why would have to argue is a negative event. >> the fact that they were able to solve it much more quickly than people thought they could shows that they've got great ingenuity. >> now, obviously, look, i'm not trying to put lipstick on a pig here. it's a problem and it looks like it's a problem. >> there was debate about how much mcnerney should have been out there in front doing press once the difficulties were made public. he did not, he was not extremely visible and he made the calculation, i can afford to do it. >> he used the silver lining playbook and you know what?

we'll stay low, we'll do our jobs and good things will happen. >> he was so not out there saying, listen to me, i'm going to fix it. i think quietly he was telling the customers, look, we have under control. maybe this is the new style of crisis management and maybe this is what people can adopt. >> so it's crisis to crisis. >> and there are certain consumer names -- >> that would have been a good strategy. >> no. >> what is he going to do? force two batteries and something we saw that we were putting this together. >> that's why he chose not to. >> here's a question. how do you unlock opportunities as we begin a new trading week? cramer's got the key. his mad dash coming up next. a lot more "squawk on the street" from the nyse straight ahead.

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>> six and a half minutes before the opening bell and time for a little mad dash with my friend jim cramer ahead of the market open. >> what i thought was most interesting is i come in here every day bounding up the stairs. >> yes, you do.

always on a monday i think this is the day we may see the $25 billion bid. i want to put this in context. there are no deals. >> no. it's another mergerless monday. you can see a decent premium. frankly, i have no idea if it was an auction or not. way to go conceptus. i don't know what to tell you. listen, valiant which is the roll up trying to get something done journal reporting and that has fallen on the rocks so there's a deal that conceivably was in the works that would have been a big print, but we're not seeing the mergers. >> i know it's a non-story, but you would expect -- this is a european company buying these guys in the euro, but you would have thought cross-border deals with the dollar going strong. you would have thought a lot of food and drug mergers because they can't maintain the growth and yet their multiples are high. nothing. we all thought heinz was going

to be good and warren buffett stole heinz. >> because the multiples moved up on so many of the cohort. if you're a ceo, you're incredibly cheap money and they typically go up, but they've got uncertainty, and i hate to use the word. what's going on in 10 your, you being get feared for it. you've got shareholders coming out of the woodwork and activists saying what areio you doing? it may add up to saying high bar for doing something. >> if you're an investment banker you still have to be pitching. you're pitching every day, right? >> absolutely. every day and you're hoping. maybe the second half of the year. >> i thought for sure when i got up early, i thought here we go, and we had to look up the symbol. >> turns out they know what they

do. >> what? >> contraception. >> yes. i gathered that. >> it's contraception. >> okay. let's talk about last week's market showdown. that belongs to the bulls. can we expect more of the same this week? opening bell just a couple of minutes away. ♪

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from td ameritrade. >> you are watching cnbc's "squawk on the street" live from the financial capital of the world on a monday. the dow, the s&p and the nasdaq guys has alternated up and down weeks. down for seven weeks, right and by that calculation we would be down this week. we will see if that trend continues. >> i was looking at -- do we have a risings wedge going? we are bumping up against the ceiling and it goes higher. i would think, carl, that tuesday will tell the tale because we're also down on tuesdays. this stuff is crazy. >> this is coming into so many weird patterns. 2013 is a nutty year. i don't know how else to put it. it's a nutty year. >> also coming up on the

anniversary of last year's lows. june 4th of last year was the most recent low for the dow. remember the whole late spring swoon and that will happen out with the same seasonality that will begin to happen some team in the next two weekses. here's the opening bell at the top of the screen. the helicopter operator celebrating its recent spin-off from seacor and the ceo of the bermuda stock exchange. beautiful, beautiful place. >> why aren't we doing "squawk on the street" from bermuda? what's keeping us here? >> that's where the hedge fund money is. follow the money. >> we have greenwich and bermuda. >> when mayor bloomberg retires he'll allow us to go down and visit with him. >> what are you saying? >> at his bermuda -- >> oh, yes. >> i haven't been invited. >> he has michael douglas this

weekend. >> how fabulous was he this weekend? how much do i love him? >> we mentioned disney out of u.n.s and price target is 72 and talking about retransmission fees, guys. they smell bigger buybacks and dividends on incremental free cash flow and the margin expansion at the parks which we've been talking about a lot lately. >> one of the things i like about bob iger and a guy that doesn't just talk about how big things are. it's not like he had the massive increase in flow. >> i was surprised, espn is the single greatest story on tv. they make fortunes. >> you're running 30 for 30. you run it 472 time and there's espn, do you rye to go through the espn section? i don't have fingers. >> espn the ocho. that was from dodge ball, i

believe, great movie, but there is a fear looking out over time about the bundle breaking apart. you heard it from john malone and the idea that's becoming more expensive and you have more and more people that are ak session the internet for video needs and not only do they need the bundle program and via the cable so to speak, and not the broadband. >> no reid hastings giving interview. they're saying this is the wave of the future. i come back to the fact that i want my programming. i want to watch basketball, okay? i have to pay -- look, i'll pay anything to watch these playoffs. i'm not kidding. >> right. >> i watch any play off game and i'm not sensitive for playing for playoffs. >> and it may be that the pricing changes, but that e, is pn continues the incredible lock. in the mean team, this theme

park business, and i remember not that long ago felt that that was just a loser. >> six flags back, and think, universal putting up great numbers and disney lagged a little bit. >> so i do think, remember, the star wars deal was good. >> we know that the marvel deal was good. geez, that was terrific. >> it is interesting that they had done all of the deals you would expect and whether it was pixar right out of the box with mr. iger doing the deal with jobs or george lucas and they were confident in the deal making. i regard him as being the gre great -- he respects no one and he rbs iger. >> iger is on the board. something else to keep in mind. >> when we talk about media, by the way, it's been an incredibly well performing sector and it

has been to the idea of cheap money and significant repurchases of shares by so many of these companies that have dramatically reduced their share count. and that was the earnings per share. >> media companies. they produce a lot of cash flow. a lot of free cash flow and you go look at share count. for the longest time they staid the same. >> at&t, you may not like the fundamental court, and i hope they do continue the buyback. >> and that's the key. >> that massive buyback that had been taking place and the fears that it will slow and it is going to slow is one reason along with what was not a great quarter that it did not slow this week. >> the buybacks are such that you even for a minute blink and there's that underneath bid. >> did you see the hospital change today? >> medicare came out with

formulations on friday late in the day. i know we did the stock picking draft with the two and one of the teams picked tenet. that's a tired name, tenet. tenet is up 10%. >> these moves are remarkable, and then the bounceback moves after the company disappoints and he's right back in it. it's a buoyant market, and i think that the data this week, if it's benign will make it so that we will have people thinking maybe it's a 15% plus s&p year which would be rather remarkable. >> there will be a lot to work through. we'll get tomorrow kay shiller and the chicago pmi and the isms later in the week and the jobs report on friday. we did get income report and spending and getting a couple of retail calls, jim, briabercromb&

fitch and it hasn't been a star so far this year. walmart has been a huge leader and the stock is still selling 15 times earnings. i'm waiting for copper to bottom and it's the jjc, not just because it's my initials and i do believe if you don't see copper bottom then you will continue to have this bifurcated market of have notes which means the world will go into recession which i regard being led by general mills. i can no longer say bristol-myers because people don't like the quarter. >> what about the idea of bottom fishing some of these mining-related companies, but it won't kill you forever, pot shally. >> there's freeport fcs, and i keep thinking that something will happen with the oil deal and something will break down and maybe copper comes back. >> coal you wouldn't touch. no, i was doing a review of the picks that i made on "mad money," i once talked about the

coal super cycle, but aep, american electrical power is switching and they're going become to coal. >> so therefore, i say btu and as soon as yoi say it there is the power and it can match out against google, a, b and llpl? >> why wouldn't i take a shot on peabody. >> you don't want to take the shot unless you know that quarter. >> go back to when the stock was 78. >> i miss that. where can i find that on tv? >> i'm sure you can go to me tv or some staying. >> yes. >> at 225, right? >> oh, come on, really? >> where is it right now? >> that was andy hargraves was talking about it a couple of weeks ago. steve ballmer should have paid if microsoft had woken up.

>> only 214. the day is early, my friend. has amazon bounced? i'm doing what people do at home. amazon, no bounce. there you go. i say it there and they do it at home. >> one thing they don't have at home is their own bob pisani and he's on the floor today. >> happy monday, everybody. modest gains here and a little bit of risk on energy, tech, materials are leading here and you're wondering why we're up? >> i'll tell you two reasons and austerity is out and the federal reserve and the central banks of the world are very much in on the game. now, by the way, we have scientific proof austerity is bad for your health. oxford researchers have a book out where they definitively find 10,000 cases of suicide and 1 million cases of depression have resulted from the great recession in europe. so now all of the newly elected governments in iceland and italy have a clear reason for wanting

to be in office. it's bad for the health of their constituents. so we've got two elected growth-oriented govern ams over in europe now. they'll be very happy. the governments and central banks will continue to be accommodative this week. the ecb will likely cut rates and the fed will likely affirm they're going keep their qe3 policies in place. the dividend buyers are back and the dividend etfs have outperformed the stock market for the last month or so and i'll show you some examples of that at 11:30 eastern time and that's an old story that was around last year that's very much back. a couple of big global industrials report. they make the nerdy stuff behind the walls and when they get better, the global economy gets better and eaton reported and roper. he makes electrical power transmission products all over the world and radio frequency device is all over the world. bottom line is this.

both of them beat on the bottom line. both of them missed on the top of the line and essentially both of them affirmed 2013 earnings guidance. that has been exactly the trend with all of these big, global companies right now. here's the key quote from the ceo of eaton. 2000 results will depend more on our execution than on global growth. you know what that means? that's ceo talk. that means we'll do more restructuring and we'll cut costs out to get to an improved bottom line rather than relying on top line growth. that's the bottom line and that's what the companies are essentially all guiding toward. the key issue is affirming the guidance and ropper narrowed it a bit and roerp will be down this morning. that means there's a tremendous amount of pressure to get their earnings up because it's been pretty tight so far in the first half of the year and let me move on and talk about the hospitals and moat of them want to move on and we have a couple of upgrades and we'll talk about that in the next hour and there were notes out noting that the hospital's

in-patient hospital payment programs might do better this yore. >> the dow is up 22 points and's risk on trade. back to you. >> i do have eaton on "mad money" tonight with cut ler. suicide figures, don't forget. remember east germany fell. tremendous swes ietd rate there. don't preclude change coming from that. let's shift the bonds and the dollar. rick santelli from the cme group in chicago. >> good morning, jim. i know it's all about austerity, but sorry. full austerity is out ask real growth is out and debt is in. if you look to europe you can call it anything you want without any of the reforms, pro-growth reforms. the growth and the unemployment definitely seem to continue to trend and neither in a positive direction, but interest rates are going down. look at our ten-year hovering now at 165.

you can see it on the intraday chart and you can see the yields in terms of where we will potentially be closing. if you look at the bund, here they hover around 120 at their historic low. our historic low is 128 and their historic low is 116, getting very, very, very close. let's look at a five-year chart of another european debt instrument and let's look at the italian ten-year and everybody's happy. my question is who's holding the paper and why? >> who's holding the jgbs? who's holding the treasurys and maybe it's about stock markets and many of them are move moving down as well and let's look at year to date charts that give you a lot of technical action going on and if you look at the wrur owe it's in a leg to move

higher and if you look at the pound versus the there are. it has aya 5 handle and it looks leak there's imthe pound yen and we can see the swing ask a me, swing and's mess, swing and a miss, but it really pains the picture, but it mae have a ruff right, some international corporations may like that. >> good to see you this weekend great to see you. >> let's go to metals and sharon epperson. >> gold prices are up near $10 near $14.65 an ounce ask metals are higher across the board and he was mentioning the fact that we will see a rate cut from the ecb and low rates from the ecb and that's the reason the kwaus i qe is the reason toy so higher metal prices and add to that the weaker dollar and that issing hg

an impact as well and the physical buying with china and japan and with the holidays there we may see a tapering off there in physical demand for gold. we're continuing to watch the gold forecast that investment firms continue to reduce due to what we've seen in the huge sell-off a couple of years ago. we're looking at ubs and the long-term forecast for 2013 and they've now reduced it to $1600 an ounce and 1740 was the previous forecast and in 2014 we'll see gold prices at 16.25 an ounce and that's a reduction from $1700 an ounce. we're seeing a mixed picture there in energy and we have wte futures and we'ring for gasoline as far as explanation to you, carl. >> we'll see you soon. >> coming up, it is not your

typical yelp review. what are we talking about? we'll tell you after the break. also, the verdict from google glass from someone who tried on the company's smart glasses and yes, he is bringing them to post 9. as we go to break, take a look at this morning's early movers. it's that time of year again, are you trying to get your body on beach mode? what better to do than to drink from the cnbc water bottle signed by the entire "squawk on the street" gang, it could be yours if you can guess friday's non-farm number. don't forget the #nailthenumber.

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disney leading the charge after a downgrade from ubs, altria, mcdonald's as we pivot away from earnings, one last big push to more macro data, getting a slew of data all across the week, watching apple, as well. >> great piece today by isi. the analyst grand marshall writes about how he's going to go to the store and how he was going to buy a samsung and he's got cold feet. >> everyone is buzzing about that piece because it kind of cuts to what happened when you go to a group of people you haven't seen. >> nobody talks about apple the way it used to. people are saying, jim, who is switching? some who is switching. >> they a terrific device in samsung, and the market share, i mean, bernstein talks about the market share being terrible

again. my take is this. stock cuts are cheap. iphone share, how low does it go? >> meanwhile, tablet numbers continue to go up and there is among the sellers. it's got a good yield and it has a procter & gamble thing going. >> the conference is coming up. upon. >> enough with the selling and it's like everyone said exact e exactively, it got to where steve jobs died, not that far from it. enough. i'm not going to sell tenure, i'll hold it. >> it's approaching a $400 billion market value. we should also note microsoft shares off to the races. >> that was a thing of beauty. people do not understand. that was the quarter and people are still constrained by windows 8 saying that's all it is and microsoft has a new xbox coming out. >> do not -- do not forget that xbox and netflix. >> into the 30s here and staying

it there for a change. >> ballmer has been there for a lot of years and there was a lot of chatter. if your suck section talk none, but that said, this company has a lot of financial options and it can do much more than people realize especially if it's more of a cloud play. it's an enterprise play. >> from restaurants to hotels, a yelp review has the potential to sway a lot of customers. the lawyers anden mates have taken to the review service to give feedback on prisons. >> yelp is being used to review prisons and what else can it be a resource for? >> i look at that yelp every day to see what reviews we're getting. >> oh, my, it is so powerful and so, by the way, is tripadviser. >> very powerful. >> atsquawkstreet and we'll get your responses throughout the morning. here's what's next on "squawk on the street."

coming up, take a look at this. those dolphins know what's happening next and they're rushing to make sure they don't miss it. six stocks in 60 seconds when "squawk on the street" returns. 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.

a lot of stocks to get to. we'll do "six in 60." deutsch says intel gaining share. >> the stock never looked back and there's a lot of good coming in the second half. >> they disappointed the last quarter and now the stock is moving up and this is the calvin klein integration. >> the downgrade of eastman chemical. >> i don't know why anyone thinks you have to sell. >> it's a cyber play. >> a couple of people left the aig report and benmosche puts good numbers up. >> bank of america cuts jetblue. >> do not sell an airline stocks. i leak u.s. airways. >> paul miller who is on the show at 11:00 morning. >> is he? this may be the most important call, but we need the banks to start pushing up if we'll take the real highs of this market. they're too high on the s&p and i thought this one a positive story. >> we'll hear from him in less

than an hour. what's coming up? ? i from the trifecta, and i've got eaton, i think people felt that quarter was nonsense. we have periodic callers needing to know about qubis. the farm tomorrow's been hot. the industrials, maybe they any come back, carl. they need to to get us higher. >> this is an important period for the market to prove whether or not it has the goods for the year. >> this is it because we've got the perfect combination of a number of s&p can companies and the european central bank and the united states. if it's weak out there, we have to give up some of the gains. >> if europe's central bank does nothing and bernanke says things are really weak, you will see this market come off. >> we'll see you tonight, jim, at 6:00 and 11:00 eastern time. >> happy monday, just picking up that theme. so many questions at the moment. david bianco will be with us in

the next hour of the program. we'll talk about marshall who failed to defect to samsung over the weekend about why and why he thinks his $200 upside on the stock and also as the 787 takes to the air again, we'll be live from the boeing shareholder meeting looking for an interview from the ceo. that's the second hour of "squawk on the street" monday morning on cnbc. flying is old hat for business travelers. the act of soaring across an ocean in a three-hundred-ton rocket doesn't raise as much as an eyebrow for these veterans of the sky. however, seeing this little beauty over international waters is enough to bring a traveler to tears. we're putting the wonder back into air travel,

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>> welcome back to "squawk on the street." i'm diana olick with breaking news from the national association of realtors. contracts to buy existing homes rose 1.5% month to month and that is slightly above expectations, but the realtors say sales are leveling off despite this being the usually busy spring market. the pending home sales index is up 7% from a year ago. these are signed contracts and not closings and an indicator of future final sales. contract activity has stabilized in a narrow range due to limited supply of homes for sale. listings were down 17% from march a yore ago according to realtors who say little movement is expected in near-term sales closings. the sales index was unchanged month to month in the northeast

up .3% in the midwest, and up 2.7% in the south and up 1.5% in the west. still slow housing starts and millions of underwater homeowners are keeping listings low and some potential sellers are waiting to see just how prices would go and prices up 7% in february a year ago according to the lender processes. lots more online and realty check.cnbc.com. >> thank you for that. >> the first data point among many that we'll get all week long. there is a check on the markets. dow is holding up to 28 points and almost five handles to 1586. >> let's get to the road map on the hour and it's the kickoff to a heavy week of data plus heavy bank-a-palooza. >> david bianco gives us his take. >> the boeing dream liner is back in the air as it has a

shareholder meeting today. >> and why one set to buy a samsung galaxy s4 that got a case of cold feet. could apple be to blame? >> let's take it from earnings to data and investors have a lot to digest. i want to bring in david bianco with deutsche bank and joins us this morning at post 9. always good to have you. >> thank you very much. >> macro hasn't been as pretty as people would like over the next few weeks. is this week going to be different? >> the focus will not only be the jobs report, but the manufacturing isn't because one of the top questions out there is will we have a repeat of the soft patch globally, particularly with manufacturing, business spending and trade. i don't think so. i think what's happening that some investors have been made nervous by interest rates going down and the dollar price softening and enter prettying that as a sign of a global rollover, but it is signs of lower interest rates for longer, stronger dollar and that does present some commodity

challenges, but oil prices in particular hold up and we don't have a global soft patch. >> people look at durables and friday's gdp number. either it's a true soft patch or payback for some momentum that we got in the early part of the year. the consumption activity is good. housings activity is still very good off of still somewhat depressed levels, but it's trou that the business spending which is key to sich profits has been sluggish especially in technologies and it's been a disappointment. >> technology is the cheapest it's been for seven years. >> it's been cheapest ever and it's 12 times this year's earnings and i think this year's earnings estimates are credible. >> i'm overweight tech and overweight financials and those are the two best sectors in the market. >> can the market continue to go higher if goldman says 76% of ceos are guiding down earnings estimates below the mid point where they were in the market and so many have missed on revenue. surely, that has to bite the

market at some point, doesn't it? >> the guidance has been soft, but no one's slashing their estimates. it's basically confirmation of expectati expectation. by the time we're fully done with the earnings season, $110 is the most credible estimate of the year. >> a lot of that has to do with strong commodity prices and it has to be 2.5% growth and share of expang of financials and it will only be 5% earnings growth and you'll only get 5% growth in 2014. we're arguing this is what's to be a low inflationary environment so it is good in real terps and low inflation and as long as the s&p keeps delivering strong dividend growth which i expect from banks and we should better get that from technology. >> we benefited in the market

from some expansion in p-es. you don't seem to be saying that you expect that to continue. >> i do expect a little bit further p-e expansion. certainly when we went from 11 times earnings in the summer of 2011 to 14.5 times earnings right now and most of the gains as well as most of the p-e expansion is behind us and we're still seeing attractive gains into year end and even if they go up and they don't go up a lot and stay low relative to history, we could have a p-e well above p-e by 2015. >> although there are many who argue there's no correlation between p-e and rates and i've made that argument and have been rebutted by people say that they don't correlate. >> there are some flaws with that theory, but i take that point, and the point is we've seen the s&p capable of tapping into where the growth is in the world, certain emerging economies and certain industries and generate respectable and real earnings growth despite low interest rates. >> on the balance they argue for

a higher p-e. >> is the job going to be as disappointing than it was four fridays ago. >> it's hard to tell. the claims data suggests it should be in the ballpark of 8.50. as long as the jobs aren't's huge disappoint. >> hard to characterize what is des appointment when the rate could come down and the absolute number could be miserable versus expectation. >> we are focused on private jobs. >> we were talking about this earlier. europe seems to be getting worse, not better. >> china same story. what about export-driven companies and what about business spending for those companies that rely a good deal on europe and incrementally it could make a big difference. >> china seems to have accelerated and now it's softening a little bit and it's still respectable growth. the point i make is that we and almost everybody expects that over the next handful of years,

china's construction activity will be slower than the past handful of years, but once you build highways, airports and cities there will be demand for a lot of aircraft, trucks, jet fuel, diesel fuel, climate control, water, power. so i think we're actually moving into the sweet spot for western capital goods demand as china settles in to a slower, but a stage of their life cycle where their they're demanding capital goods that allow them to use their transport infrastructure and give energy and labor efficiencies automation. i like the largest industrial capital goods company that i like in the world. maybe want the best timing seasonally, but there's capex and trade plays fwhith tech and industrials that are attractive to us and banks rely on dividend growth. >> we'll see what the week brings us any time. >> let's go from the broader market to the c suite.

>> cnbc's kayla tausche. the revolving door keeps swinging. this time frank who joined j.p. morgan in 2009 personally recruited by jamie dimon who worked with him in the 1990s. his reputation as a fixer upper came in handy when he was tapped to right the bank's mortgage unit. then ran the integration of bear stearns in washington mutual, rising to chief administrative officer and then to co-chief operating officer in july of last year. even then his duties stayed roughly the same. the other executive sharing the title, matt zayne got the brunt of the responsibility. 12 months ago he was the co-head of picked income and harpooned the london whale. two months later named co c 00. though in a phone interview he told me his day to day job won't

change since he was managing the firm's balance sheet and regulatory affairs and his overall strategy. >> it does present more fodder for succession chatter. he had unwinding that disastrous their 150 billion london wale hedge. >> mike cavanaugh, a bank one veteran with strong tees to dimon. >> j.p. morgan often refers to the deep bank of executive and one problem, the operating committee is still relatively fresh. the ninth executive to leave it in just at last 18 months. guy, back to you. >> we'll spend a let of time talking about suck seizing. jamie dimon is still pretty liern although zayne is 42. that seems young to me. >> no one expects him to step down any time soon. that being said the succession and grooming process, you have to understand how every part of the firm works. that's a plan that's years in the making. >> absolutely. great point. thank you, kayla. >> we have one online media

company on the move. let's get a market flash now with josh litz. >> alibaba taking an 18% stake in china's version of twitter. webo has grown quickly, benefitting in part as the chinese government blocks twitter. the analyst is out with a note this morning telling clients it is a buy at $20. now with the alibaba, and wei bo increases and it is up 15% right now. >> speaking of confidence, it was in january when a battery fire led to the first grounding of the boeing 787 dream liner, but the stock has been able to make gains and having fresh 52-week highs and what to expect now from boeing's annual shareholder meeting set to begin

less than an hour away. >> and why one analyst could n let himself go to buy himself an iphone or a galaxy s4. he's here to explain his case of cold feet later on. "squawk on the street" will be right back. it's that time of year again, are you trying to get your body back into beach mode? you better stay hydrated and what better way to do so than to drink from the cnbc water bottle signed by the entire squawk on the street gang. well, it can be yours if you can guess friday's non-farm jobs number and don't forget the #, nail the number. you have to be 18 years of age to enter. sorry kid, for all of the official rules and details go to sort s pts.cnbc.co sots.cnbc.com. you have until 8:00 a.m. friday morning. good luck. with the fidelity guided portfolio summary, you choose which accounts to track

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>> it is a big day for bowing to hold the annual meeting in chicago with the 787 dream liner a major focus and it returned to service over the weekend for the first time since it was grounded earlier this year. phil lebeau is live with the very latest. good morning. >> simon, i'll be curious how

many questions stephen mcnerney will address the topic. in the past we haven't seen too many people question issues and it tends to be the usuals. and i'll be curious what happens earlier today. ethiopian airlines, and uneventful flight which is what boeing wants to hear and it expects the return of 787s start ramping up over the next three weeks and also the same time, we'll watch to see if the backlog of 787s are park outside the factory. they are modifying nine dream leaners that are awaiting delivery. they have 25 sitting there waiting to be delivered and it expects to deliver dream liners. take a look at shares of boeing over the next year and in particular, once it became clear that boeing had its hands wrapped around this battery fix, that's when shares started to take off and you see the shares traded at $92 a share and that's

the best price since 2007. so clearly, investors are optimistic that they're going to be getting past all of the battery problems. >> in the meantime, phil, they're deploying teams around the world to change the batteries on those planes. they'll have to compensate customers. they'll have to advise on p.r. do we have any idea how much does it cost? does it not matter provided the 787 resumes production? >> it's not going have a material impact. they talked about that last week during their earnings. it will cost anywhere between $600 million and $800 million. that's the estimate out on wall street. they can pro-rate that over 1100 dream liners that will be built. so the material impact is knell lidgible and the fact that they didn't have to change the delivery forecast, that's the key and that's why you see the shares moving higher. >> this chrysler conference call is interesting. a lot of candor from macchioni.

>> and he starts it off by saying, listen, the results are not what were expected. at the same time we have another automaker in town. he doesn't say it by name, but we know he's talking about ford who had fan taft being results and he said frankly, i'm a little envious. you don't see that when they compliment the competitor across town. >> it's a street fight every day. have fun, phil. we'll talk to you soon. >> phil lebeau in chicago, why one analyst got cold feet on his way to trade in his iphone for a samsung galaxy s4. we'll talk to brian marshall and the scoop on google glass from someone who has tried a pair on. you'll see what he sees when he brings them to post 9 this brings them to post 9 this morning. it's monday.

want to own a piece of the empire state building?

no, that's want a con. although some legal drama playing out in court could get in the way of the building's initial public offering. bertha coombs is at the courthouse and she has details. bertha? >> indeed, david. supreme court justice peter sherwood will take in a hearing today on whether the whole real estate trust can go forward. a major challenge being brought by minority shareholders in the empire state building. the iconic 102-story tower will be the crown jewel in a real estate investment trust proposed by the malkin family and it will be called the empire state realty trust and it wouldn't just include the tower. it would also include 1.5 dozen other properties in the malkin holdings. they hoped to raise about $1 billion. so far, peter malkin who is the chairman of malkin holdings says that he and his family have managed to convince 75% of the shareholders to take part in the buy oit.

they get bout out for $100 a share and get interest in the reit. the judge now has to decide whether that is fair. there are other shareholders who have objected who say they don't think that's a fair value for their property. they also feel that their property value will be diluted by the reit itself. how did some of these individual shareholders come to hold stakes in the empire state building? well, it was harry helmsly back in the early '60s that allowed individual investors to get in for about $10,000 a share. those shares have been passed on in many cases to second and third generation owners. for some it's a very romantic thing. one owner telling cnbc earlier saying she feels this deal does not value the property at the proper value and she has a real romantic stake in holing on to a piece of the empire state building and that is set to begin any minute.

>> thank you very much. our next guest is a longtime apple bull and a loyal apple user and he was this close to switching to samsung and once he got to the register he chickened out and let's bring in brian marshall, an analyst with isi group. it's like a monday morning confessional. you say you were about to commit an act of treason in your own words. >> true, simon. i did feel pretty guilty at the register and just decided against it. ultimately what i want is a larger format smartphone and the high-end portion of the market is all segmenting to five inches and the iphone 5 is a bigger street and i want a larger format for typing and i wanted to make the transition and couldn't do it at the end of the day. >> i wonder how indicative it is of the market in general if you decided to pull back because you didn't want to transfer everything over. you are probably not the typical marginal buyer in millions of

marks around the world. >> believe it or not, i got tremendous feedback from investors saying the same thing. i want a larger screen on my smartphone. i have five people on my family. everybody is on iphone and i have such an investment on apple products and everything is seamlessly syncing together and working and it's a difficult platform to migrate off of. >> where is the stickiness that we you will are familiar with. i think we all know what you're talking about and what happens if apple doesn't unroll the larger phone which you say is pretty important later this year. >> well, i think that's going to be problematic, carl, if it comes down to that. ultimately, you can see apple losing ground on the smartphone side. we are now growing single digits and this is a market growing well under 30% year over year and they're losing share at the high end and that's typical for apple, obviously and the reason is they're not leading on the

hardware design standpoint anymore. so if we get to six months down the road and the holiday season their main product is a 5s and a simplerade to what they have today, and i think they have to see more share and people are going to be willing to bridge that gap at that point from a platform to a new sort of a design from the smartphone standpoint. >> so i think it's a matter of quarters, not years. >> so do you think there should be a fundamental change in strategy, brian? >> there's more on the models that samsung is about to come out with the tablet and the active phone, that can get beaten around. do you think that apple needs to change its strategy from having one bar to a whole range of flavors? >> not really. i think you need to go back to the basics for apple it's build the best hardware platform on the planet and build the best software and ecosystem on the planet. they're not doing that today. i still think they have hands down the best operating system and hands down the best

ecosystem and ultimately their hardware design is no longer superior. so that's what's broken down here. >> i'm curious about your reluctance to switch, brian. because it would have been the time spend,or the familiarity with the current one that led you to say why would i want to do that? >> i started getting cold chills and saying oh, my lord, i'll have to migrate all of my music to this new platform and my contacts and sink my work calendar to my personal calendar and there are a lot of hoops to go through and spend a lot of hours and time's pretty limited these days and i just didn't want to make the platform decision. >> didn't stop people from doing it when they had blackberries. >> no. that's a good point. >> this morning apple has released its s3 which is the precursor to taking on the debt in order to have this largest share authorization share

buyback? corporate history. $50 billion. are you with einhorn or would you prefer the carves used to expand the product line? >> think the buyback will be important because that will lower share count going forward and increase their rate of growth for their eps. i think the dividend yield is very important and we're in a pretty low yield environment so that's key to raise that going forward. i think the debt will be a superior capital allocation strategy -- or a capital structure strategy at the end of the company. i think all of this will follows secondary to the two key points they have to maker. they need a low-cost iphone to penetrate the national markets and they need to bring down the building materials for their iphone and they need to compete with the five-inch device. >> and just in conclusion is your $600 price target which is

40% upside from here, is that based on the fact that they do those things on the o slump gsz that they do it. >> we get a low-cost iphone in september and the iphone5 in december. >> nice to see you, brian. >> brian marshall. >> we should point out the dow is at 63 and the sich is within the all time closing high of the s&p. getting a jump on jobs friday. plus a peek at sac capital and it's been two months since investors pulled 1.7 billion out of the firm and now the firm is playing an exodus and we'll go inside the mind of stephen cohen later on. we went out and asked people a simple question:

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about an hour into trading. 10:31 on wall street. pending home sales rising to their highest levels since recall april 2010 according to the national association of realtors. ubs raising the dow component to buy from neutral. plus the weekend box office, a strong overseas debut for "ironman 3," the film grossing $195 million in 42 markets outside the u.s. and chrysler says profits fell

65% in the quarter, citing the cost of new vehicle launches and the number three u.s. automaker also reaffirming their guidance for the full year. >> it's a key week for economic data. we have the fomc meeting and a jobs report at end of the week. he'll tell us what to expect. it's one of those weeks that sets economists aquiver with anticipation. ward, tell me what you're watching most closely this week. i would assume the employment report is very person, but we have a lot more this week, as well. >> we have a very busy week ahead of us and it starts today with the treasury. i think what we're going to find is they revised down their borrowing projection substantially and enough so that it gives them room that they can start cutting the sizes of short-term coupon options in the months immediately ahead and we had the fomc on wednesday and it's a two-day meeting and there will not be a press conference afterward and as far as policy

is concerned the fed will hold a steady course and they'll continue to buy 85 billion per month for qe. they'll keep the threshold on the unemployment rate for policy, but i do think there will be some subtle changes. first of all, they will not be able to be as optimistic about their description of current economic conditions as they were back on march 20th and second of all, there will be some subtle language changes that will put more of an emphasis on the fact that inflation is running a full percentage point below the fed's target and as a consequence, i think, we'll see dissent against qe, but i think there's a reasonably good chance we'll see one of the other voting members dissent because the fed is not increasing qe. >> to that point, ward, deutsche bank has a word out overnight in which it says it believes the tenor of the fed talk has changed and they're talking about the threshold for expanding qe rather than talking

about at what point they taper out and they're looking to do more at the margin because the data has been so bad. would you agree with deutsche bank? >> well, yeah. at least in the months immediately ahead, the risk is that the fed will do more, not less, although my inclination is to think they'll probably stick to $85 billion per month through the whole balance of the year, but we really have to watch the commodity markets carefully because we had zero commodity inflation over the past year and if that zero should slip into deflation territory, the fed could take some action. >> does it worry you that we continue to drive the yield on the ten-year lower, that again we have this bull market in treasurys that is so alive and so well and hasn't turned corner now for a fourthiary when we thought it might for the sake of better growth and a rebounding economy? >> what is troubling is the fed has had to do so much to try to stimulate the economy and we still make progress in fits and

starts and a little bit more puzzling is the fact that with all of the qe the fed's done it really has not had the effect on inflation that they clearly thought because they raised this short-term inflation target to above 2% to 2.5% because i think they were concerned that maybe they would get us spurned in inflation. so that's a little bit of a concern and that's also the reason why the fed keeps going full steam ahead. >> the bank of japan has embarked on its own qe of frankly, unprecedented proportions and how much is that playing into our treasury market? >> well, i think it's had two effects on our treasury market. first of all, indications are that japanese investors were really not expecting the boj to be as aggressive as they have been and one of the consequences is now that the boj is going full throttle on the qe, we've seen some japanese investors jump back in and take advantage of higher rates in the u.s.

the other thing is that the bojqe has had some some deflationary effects on the u.s. use of the relationship between the dollar in commodity prices. >> thank you for your time. >> ward mccarthy joining us. >> thank you. >> haven't seen too much impact from the dallas fed here. it was a miss, minus 15 and we were looking for about five, but these regional surveys will start to come in and the biggie, the ism, which feeds all of those will come later in the week. >> it's been a rough couple of months for sec capital and steven cohen. they pulled 2 billion out of the hedge fund and not to mention the legal situation. no surprise cohen has a lot on his mind and our kate kelly back at hq with what that might be. >> with another investor redemption deadline looming, you're absolutely right that steve cohen has had a whole lot on his mind. >> investors have until may 15th

to let sec know if they want to pull money this quarter. sec lost more than 2 billion in outside capital and blackstone have indicated they may yank more. additional losses look bad for the firm, but they have an imon trading it means lower potential returns and with sec charging some of the highest fees in the industry it also means less profits for cohen and other key partners. >> there's also the legal picture and late in march, michael steinberg was indicted on charges of insider trading becoming the most veteran sac employee in a year long justice department probe. another former traderic dieted recently will cooperate with the government to provide evidence against cohen though cohen says he did nothing wrong. a lawsuit from his first wyc patricia, saying not only does he owe her money, but that he

engaged in racketeering. and of course, there's the personal side. cohen is married with seven children and has his family and an estimated $9 billion fortune to think about. lately he's been on a spending spree, forking over 60 million on a beach house, and charitable donations to veterans and all at an awkward time to be looking flash. >> whether or not he ultimately says to hell with it, i'm packing up and i'm going to sit on a beach because people say if he does that, 10% of the analysts community could be shut down. he pays a lot of fees to a lot of people on wall street. it's an important man, basically. >> no, i think you're right, simon and a couple of good points there. first of all, i don't think the doj would want to put out of business a firm that employs more than 1,000 people and that is some incentive to contain these issues or perhaps not go for the jugular although there's every indication that they've

been pursuing steve cohen for years. steve cohen enjoys what he does and much of the money of the dollar 15 billion in total is his personally. i mentioned forbes estimates his fortune at $9 billion. much of that is in the firm and much of the inside money within the firm is his personally. >> thank you for the update. kate kelly there back at hq. still ahead on the program, six months after super storm sandy how the jersey shore is faring for the upcoming summer season. >> and those infamous google glasses are coming here to post 9. we'll have a guy who tried them on and he's spilling the juicy details. stick around. we'll be back in two.

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it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. boeing's annual meeting in chicago. shares of the company have been flying lie lately. up 25% in the last months and two aerospence and defense analyst joining us now. carter leak is senior analyst with bbnt. guys, good to have both of you

this morning on the day of the shareholder meeting. carter, not everyone stepped to the sidelines when the dreamliner started to have some issues, but you did. do you regret it? >> think, i do, you know, to come on live tv and admit that you were wrong is a tough thing, but we have always been a long-term bull. we went conservative which is the style of bbnt capital markets, but we're back in and we think there's still room to run here. >> on friday you went from hold to a buy. 110 price target. how is the picture -- what has changed since the time you were previously at a buy. do you feel better than you did back then? >> it's interesting, the bull case for boeing was always free cash flow generation of the 787. what changed for me besides the battery being put to bed was the fact that the quarter that boeing posted 11-plus percent margins even with the 787 issues

in front of them and, two, if you look at the learning curve progress that we saw in the quarter, it's quite clear that the 787 is on track to cash profitability. >> peter, i wonder if you agree. >> obviously, your price target is not quite as aggressive, but you still are at a buy. i'm guessing in terms of legacy costs related to this whole issue regarding 787, that will be spread throughout 1,000 orders and we're not going to be able to notice it, really. >> it will be completely absorbed, carl. thank for having me on. we've seen tremendous upside, above our target. there are always lending curve issues introducing a new platform. they put to bed the issue around the battery and, of course, to caterpill carter's bopoint, wo we think

cumulatively they'll generate free cash flow and they'll fund not only their development efforts, but buy back a lot of stock. they bought back almost 10% of their stock and we think that will happen again. so a lot of upside still going on. >> the pentagon is reaching a very important point where it will have to decide how many people if it's 800,000 civilians furloughed for the month of june. are we clear carter, what the sequester means for the private sector defense plays. can you hear me, carter? peter, do you want to field that question? >> sure. look, the sequester has been an overhang and everyone's known about that, but just, you know, in boeing's case, 42% of their backlog is international so their $30 billion defense portfolio will hold up quite well and that's what you're hearing from the other defense primes and international trying

to offset the current domestic spending trends and i think boeing is in the best position so again, that's why we feel very bullish about the outlook for boeing and their ability to generate cash and i think a left upside still in front of it. >> any long term concerns, peter about the government business and commercial obviously is on fire all around the world. the carriers can't seem to get enough of the product no matter what it is, but if the pentagon continues to be squeezed beyond the short-term sequester how much of an impact will this have on the name? >> i think you're correct. it will be a risk for quite some time and we came into the 2000s and we're spending 2% of the gdp on defense. we peaked out just above 6%. so there's no question we'll continue to be trending down for the next few years, particularly as we pull back from afghanistan. we're in a post-9/11 environment. i think the spending will remain

elevated and the one area i wouldn't want to be in is in the services area and we're seeing margin compression there and in boeing's case we have a lot of legacy platforms and you're seeing quite nice margins and of course, the head of their defense business has done an excellent job of taking on a lot of costs and we like boeing's position on the defense side and we like what we're doing on the progress on the 787. >> carter we talked about mcnortherny and how he responded to this -- i guess you could call it a crisis and it generated headlines among the broader media. americans who fly a lot were aware of what the dream liner was going through. it does appear to be a crucible for him. certainly a communications strategy that you would argue has paid off by not immediately going to the fore ground? >> absolutely. >> that's what i expect. i lost my audio feed, but he deserves a victory lap at the shareholders meeting. the way that he managed this crisis he was under attack for

sitting in the background, but the way he navigated this boat and in sticking with product, remaining calm through it will be touted as one of his finest hours. >> for all of the trouble it is year to date the fourth best performing dow component almost more than 2%. just incredible. >> peter, carter, appreciate it. >> thanks. >> let's get a market flash with josh. >> hey there, simon. two rating agencies moving higher this morning. moody's and mcgraw-hill. moody's and standard & poor's. saying they settled lawsuits that accused him of misleading investors about debt vehicles and this was the so-called abu dhabi case and plaintiffs have sought $638 million lazard raising its price target on moody's to of 66 bucks and that's more than 80% right now. >> thank you very much, josh

lipton. rick santelli grabs his easels, brushes and paints and he paints the european economic landscape ahead of this ecb meeting and later, it's been six months since super storm sandy devastated the jersey shore. has the area been able to rebuild in time for the summer season? we'll head live to the jersey shore to find out. [ male announcer ] with free package pickup from the united states postal service a small jam maker can ship like a big business. just go online to pay, print and have your packages picked up for free. we'll do the rest. ♪ we'll do the rest. (announcer) at scottrade, our cexactly how they want.t with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me.

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welcome back to "squawk on the street." rick santelli here. welcome to the santelli exchange. you know, i really find it very important that we handicap how we're looking towards the ecb meeting. our own fed meeting, i don't believe there's much doubt. i think -- it seems to me ever since the reinhardt rogolf paper was dissed. there were obviously some issues there. i do think it's been a stellar drop from grace as to what debt may mean and notion of austerity being very much not very helpful. i will continue to say that i think that the generalized theme of that research paper is, is that whatever your growth rate is, specially when you look at it over a 5- 10-15-20-year

horizon, you underperform whatever that benchmark is. pure and simple. we can talk about sampling countries that are tiny and errors that were made. but there's no doubt the more debt you have you're going to underperform. it's just a matter of how much. i called all my sources that i really like to handicap what their thoughts about thursday and ecb are. i find it interesting. from last wednesday of last wee today there have been some major changes. i see that many of my sources think there's a 7 to 8 out of 10 chance the ecb will lower rates. that is a much higher level than just about a week ago. and the rationale is, just like in our markets, in every fashion, that when the markets look for something in a big way, you can't disappoint. and they are seeing that dynamic

of weak data, but then italy, france, all the interest rates go down, stock markets come back. now, just one thing just to talk about because i still think that debt is extremely important. and all the liquidity we're throwing at this little orchid 20 miles down the road, even though only a little bit gets to the orchid and a lot gets to the bank in the shadow banking system, public debt per capita. we lead the pack but we have a great economy that can probably work through it if we ever address what's really wrong. $51,000 per debt per capita per person. you can see the range because i tried to look at various research to come up with it. out of all of these, these have sequentially gone up dramatically over the last several years, all except for greece. to be fair, sequentially they have lowered a bit. once you look at the economic data and what we have in the unemployment area, the gdp and growth area, it seems to me instead of consecentrating on

austerity that was ever implemented outside of higher taxes with many pro-growth measures the real gain we should be concentrating on is who is going to push the global economy back from neutral or reverse to forward and, if anybody has any good answers to that, i would like to hear them. >> thank you very much, rick. in the meantime, market interest rates are at a 13-year low in europe at the moment. tweet time, from restaurants to hotels, a yelp review. "the washington post" reports that lawyers and inmates have taxicab to reviewing prisons. that brings us to this morning's "squawk on the tweet" yes. yelp is being used to review prisons. what else could the service be a resource for? we'll have your responses next.

government's claims it gave kickbacks to prescriptions who prescribed drugs. the pharmaceutical giant offered doctors trips to hooters and fishing lodges. it was made by a former novartis employee. it denied the allegation saying it did participant in speaker program which is an accepted practice designed to inform doctors about the appropriate

use of medicines. >> carl. >> the instinct is to say this goes on all the time in the pharma business, in the medical business, but we don't get many excuses to run that kind of video, david. >> no, we don't. >> can you explain the appropriate use of a medicine whilest at a hooters? i would hope -- >> we've got to talk about the medicines and then we'll get on to, i don't know, probably nothing. >> it also comes on a day when "usa today" fronts on their business section, i might add, guys, a proposed changes in the way the restaurant is designed. the logo apparently the owl is safe but there could be changes to the costume. they're thinking maybe something that looks more like a skirt than shorts. >> more tasteful. >> yes. >> sure. >> i don't know. you got the idea or not. but it's a good story on the "b" section in "usa today." thanks, david. >> carl, my pleasure.

whatever i can do for you. i'm here. >> we'll see you in a little bit and talk about europe and italy today. if you're just joining us, here's what you mised earlier on. welcome to hour three of "squawk on the street." here's what's happening so far. >> between the deficits and entitlement expenses and what the government is doing in terms of regulation, forget it. oh you're going to see a 1% plus or minus growth rate. >> i can see the fed trying to slow this down so that they set the stage for slowly getting out because they don't want to disrupt the market on the way out either and eventually, maybe years from now, they're going to have to unwind this. >> when you see the italian government wanting growth, when you see spain wanting growth, germans investing in spain to want growth, that explains why the european rkt whats are all up for the year. >> going to be a long summer. if i'm going to sit here and be bringing the mets up every

single day, then it's going to be a long summer because i am going to. >> that's just mean. >> opening bell. >> technology is the cheapest it's been for seven years. would you buy it yet? >> it's been cheapest ever since 12 times this year's earnings. i think this year's earnings estimates are credible. i certainly would. i'm over tate tech. i'm overweight financials. two best specters in the market. >> i think we need to go back to the basics. if you think about the basics for am it's build the best hardware platform on the planet, build the best software and eco system on the planet. they used to do that in the past. they're not doing that today. good morn morning. live at "post 9" at the new york stock exchange. let's look at the markets. the dow -- actually the s&p is a couple of points from an all-time closing hyatt 1593.37. dow is up 71. has basically ignored some negative data points. dallas fed was no good this

morning. market hasn't paid attention. dow is up 71. shares of black ber iberry is o rise. the analyst citing early signs of pent up demand for the new smartphone that offers a physical keypad. expedia down 3%. company under pressure thanks to challenges at hotwire which is facing increased competition from trip adviser and price line. from data to the fed to earning, it is a pivotal week for markets and your money. art cashin is here at "post 9" to talk about that. jcpenney getting a boost after investment from george or ross. the stock is up 14% in the last few days. is it finally time to buy into that retailer? google glass will come to post 9. the editor in chief of mashable has tried the gadget is telling us what he thinks. the question is will google glass really be a game changer? but we'll start with the very busy week ahead from the markets, from the fed to jobs. a lot to digest.

s&p within striking distance of that all-time closing high. art is here at post 9, director of floor operations with ubs. hope you had a good weekend, art. >> yes, and you? >> a lot on the line this week. big push of earnings still to come but the macro data will eventually take over. the fed, jobs. is this in any way going to be a consequential week at large? >> i think it could. you know, traders are always looking at what's on page 13 and might show up on page 1. one of the things not pointed out by too many people is the fact that we're going to hear about the treasuries refunding needs this week. and it will be interesting to see whether the change in the payroll tax and other things will slightly reduce that funding need which will make fewer treasuries available for the fed's program, which might put a little bit of a strain on things. secondarily, we get the thursday and ecb, it is probably 85%

expected that they are going to cut rates. but will that be enough? will people be looking for something a little extra special, kind of a qe thing where will it go? so a lot of potential this week. >> your argument would be fed needs to raise less money, fewer bonds come to auction? is that what you're saying? >> yes. >> the consequence being what happens to yields, what happens to bond prices? it. >> puts the fed in a little bit of a problem. okay? they may have to get more aggressive to buy this $85 billion. so what we're going to have to look and see and we'll get that over the next two days, what are the treasury needs. if they're approximately the same, no big deal. if there is a market lower look for the quarter, then the fed may be a little hard pressed to get them and it may do something to trae heasury yields. as i said, the ecb, you know, will a plain vanilla quarter

point cut be enough or what will happen? >> generally what happens is you mention it, weeks go by and we come back and talk about hue you mentioned it a long time before. why is the market not bothered by friday's gerksdp, by dallas today? >> i think the market probably should have been a little bit more bothered by the gdp. they chocked it up to inventories for growth which would have been interesting if it was industrial inventory. but it might be. it might be grain inventories, which would be certainly strange for the economy. but we'll go and look at that. the simplest answer to your question is, europe, europe is calm. they're looking at it. we've gotten away from, if you recall, the european problem was sovereign debt. then it shifted to the banking system. now somehow it shifted back to sovereign debt again as people argue about austerity. i would, again, make the point to you that since there are

questions about reinhart-rogoff, austerity seems to be on the defensive. that is helping markets. a calm europe, lower yields in italy. give a decent backdrop and people looking for a return, you come to a america apparently. >> yeah. it's funny, page 1 of the journal is,000 europe is crippling profits. another page is how china is crimping profits. >> no, certainly not. and you know, i think the other subtle thing here is after cypress and other things, people have a greater respect for the rule of law in america. if i'm going to have any of my assets confiscated in whole or in part, i'm going to get a fair hearing on it. it's not going to be some unelected officials without a court order coming in and saying we're taking 10% of what you got. >> finally, a lot of the big winners today are the googles, the microsofts, companies where the argument is they may be a

growth company, they may not be a growth company but the incremental free cash flow change might mean a higher dividend, might mean a bigger buyback. some of the large caps are moving on that, art? >> well, i think you're getting a lot of that. secondarily, people are saying, okay, they've got all the cash, they can't sit on it forever. even if it's offshore and they can't bring it back because it's tax, what are they going to do? they're going to do a little apple light. they're going to buy their own shares. they may or may not increase the dividend. but one way or the other, that's not going to stay dormant. if they've got a lot of cash and income in cash, maybe i want to take a look at that company. >> argument about apple more than ten bucks. art, it's good to see you. let's get to a story david faber broke here first on cnbc on friday. jcpenney getting a loan from goldman. does this give penney breathing room to turn this keen company around? liz, good morning to you.

good have you back. >> thanks for having me. >> so how much cushion here does mike goldman have? >> i think this gives them quite a bit of cushion. now, this is not a drawing line so it's just available for their use if and when they need it. i think the interesting thing where there's a carve out to pay one of the bond issues that they might trip up a covenant but there aren't really a lot of other covenants gotting to to restrict them this year. this gives them plenty of breathing room to execute their plans, try to get this business back in positive territory. >> i think your intro said your price target was 13. also seeing 19. where are you on the stock? >> i'm at 13. you know, they've got a pretty big hill to climb to get back to positive earnings. in our note dodd we lie hi lighted $2.6 billion in terms of a sales bogey. they basically need to build back their sales base by an incremental $2.6 billion to get

back into positive earnings territory. it's a long way to go. >> yeah. are you seeing -- we had this discussion this morning. it's nice to have your liquidity worries put on the back burner. but people are still going to be looking for any sign that there's a true turn in the business. have you seen -- i know it's early days on ullman, but have you seen the hint that anything like that might be coming in the next few weeks or months? >> certainly not in the next few weeks. i think the first quarter is going to be difficult. they were doing the home renovation and that sidelined significant portion of the selling square footage. i think first quarter comps are going to be pretty tough. but they're reinstating a lot of the discounting and ullman definitely knows how to do that, along with the chief merchant liz sweeney. so i think we will see some improvement, but not enough to really move them back into positive earnings territory which is why i have a tough time, you know, getting more than kind of a $13 price target.

>> i remember we had you at a jcpenney store not too long ago. i think on the day where johnson promised our courtney reagan the comps would go positive this year. you see that as likely? >> it's possible for the back half. there was a big story today in women's wear where they were touting their back to school strategies. i think they're looking at that as really their opportunity to turn comps back into positive territory. it's upon. i don't think we're going to see a positive double digit comp which is what we would need to, again, get them back in a positive earnings territory. i do think we can see them positive. >> people -- it's hard to even think about the amount of business they've lost and what a long road it t will be to get even some of that back. liz, thanks so much for your time. good to see you again. >> thanks for having me. >> liz dunn. when we come back, another member of jamie dimon's inner circle leaving jpmorgan for one of the giant's clients. we will tell you what it means.

and rick santelli talking jobs later on with our friend charles petererman. >> yes, we're going to try to get a beat on the economy. we will discuss flows. he knows a lot about flows. we'll discuss liquidity, the ecb, and supply and demand of something i normally discuss, the supply and demand of equi equities in general. be there bottom of the hour.

welcome back to "squawk on the street." i'm josh lipton. biogen is well in the green today. analysts at isi saying its oral multiple sclerosis drug has amazing growth. sales could exceed $450 million in the u.s. this year. biogen hitting a new all-time high today. up more than 50% already this year. carl, back to you. >> josh, thank you so much. the executive shake-up continues at jpmorgan. the bank's coo leaving to become the coo of first data which is already a client of the bank's. what's the real story with the move? kayla is back at hq with all of that. good morning again. >> good morning. first data had been looking for a new leader and was working with a recruiter who said to reach out to him. his resume would seem taylor based. experience is a high ranking executive of a global firm where he earned an reputation as an

operational expert and fit-it guy before jpmorgan he was coo at citigroup. now, at first data he will have his hands full. the company with $10.7 billion in revenues is big but still chip ag way at some $18 billion in debt incurred when kkr took the company private. that $29 billion deal was sealed in september 2007 near the prerecession peak. the pressure on kkr for a turn around is hyatt this point. private equities have sloweded since the fate of those precrisis deals are unclear. clear channel and first data among the biggest buyouts ever and still stuck in the private equity port foet lows. kkr marking it swept cents on the dollar at distressed evils will and any hopes of what would be a massive multi-billion dollar exit would still be use away. bisinano could be a game changer

for kkr and first data which is aiming to shift the strategy to mobile and e-commerce payments. you can expect, carl, some mention of the road ahead. >> yeah. that's going to be an interesting day for him as we pay a lot more attention to that company now as a result of this move. thanks. let's talk more about the executive change at jpm. paul miller is pan er ier is ma and just upgraded suntrust to out perform from market perform this morning. paul, good to have you back. >> thank you. >> let's do suntrust in a second here. briefly on jpmorgan, how much of these resignation or his leaving the bank is material to at least the way dimond performs strategically and tactically? >> i don't think it's really going to be material. and jamie switches up these guy on a regular basis. i don't think it's going to be

material to the bank at all. >> that said, you were not hugely impressed by the quarter. still a market perform? >> yeah, i mean, listen, jpmorgan is going to do what the market does. but, you know, with this bank trading at 1.5, 1.6 at boork and all the regulatory pressure coming down, rates continue to weigh on the withhohole sector, don't think jpmorgan is going to outperform the market or overall stocks in general. so i think it's a solid market perform. it's a solid company. but i think it's fairly valued. >> you say in your report from a couple days ago the inherent headline risk at the company will prevent them from trading at a premium to tangible book. do you mean that harding the whale, do you mean headlines as it regards -- with regards to the over whaul economy or are people still worried about execution even after all of this shuffling around? >> i'm kind of surprised that really not just a shuffling around but the london whale to me is still a big thing and clients have put that on a back

burner. regulators are still upset about it and continue to bring them up to congress for talks and what not. they've got to file -- now they have to file every six months instead of every year on their capital blan plans. i think all of of that pressure is not just going to way on jamie dimon and jpmorgan but all of these big banks. that hindered the capital plans that all of these companies, not just jpmorgan, have going forward. >> so with that in mind, you upgrade suntrust today as we sort of turn our t attention to the regionals. we talked a lot about this gap between the regionals and the larger banks. is suntrust, to you, the poster child for why regionals are worth paying more attention to? >> you know, i think there's a couple these regionals that look very interesting. for suntrust it was all about capital. all about credit quality. we were very concerned not only with reps and war rapts but overall credit position and it's really starting to improve. the reps and warrants looks like

they're behind it. that's the stuff they had to buy back from fanny and freddie. now you've got to worry about overall credit quality of their portfolio which is improving in the south. this is one of those calls out there saying like, you know what, the economy might not be doing well. yes, we know that the nim is pressure on all regionals are going to be hard to fight through but it's getting much better, quicker than we thought and that's why we like it. suntrust also is doing well in the mortgage banking side as they grow that. overall thesis, own the names that are going to been fit from the mortgage banks and this is one of those calls. >> your target goes from 30 to 37. you still seem a little more luke warm on the regions. the keys of the world even though you do have out performs on pnc. where is the line between among the regionals which gets a higher rating and what does not. >> it's those institutions that are able to generate some type of revenue from the mortgage banking space. key does not have a mortgage bank. i still believe key's expense

bank is way too high. you saw through last quarter anybody who got any earnings growth whatsoever all come from expense cuts. the banks still really don't have religion on expense cuts and they've got to cut expenses. you see the ten-year today at 166, that's going to benefit mortgage banking and is going to put huge weight on the profitability of the portfolios. >> after gdp on friday it's hard to imagine the yields going haver far very fast. paul, good to see you again. thanks. >> you're welcome. >> paul miller at fbr. it has been six months since super storm sandy devastated the jersey shore and some of those areas are still not fully restored. we will go live to seaside heights next to see what this means for the summer tourism season. later on, the story behind this picture. mashables editor in chief gives us a firsthand look at google glass right here on post 9 when we come back.

take a look at utilities today. the far right side of that chart is pretty amazing. a five-year high in each of the past seven sessions. the utilities have just refused to give up. the nasdaq as well. 12 1/2-year intraday high as the comp continues to set new levels as long as it's anywhere in that

neighborhood above 3300. it's been six months since super storm sandy hit the east coast and the jersey shore is still struggling the rebuild. mary thompson is in seaside heights and what the recovery might mean for the tourism system. mary. >> hey there, carl. of course, key to this is the fact that thousands of rental protsz along the jersey shore are still damaged from sandy. and all of that, of course, puts new jersey's $38 billion tourism industry at risk. rental agents say one of the biggest problems facing the shore right now is fighting the perception that all 127 miles of its shoreline has been damaged. >> you have to be smart and it will be a little different but certain pockets i don't think you can tell when you come down this summer that there was a major storm. >> for example, in seaside park he says few properties were damaged but go north two miles

and only 10 of the 100 properties he used to are ready and available this summer. this has shore regulars looking to vacation elsewhere. websites serving cape cod say renters are up 6% this year. the commerce department or the chamber of commerce in matt they're's vineyard says inquires for newark and new jersey are at a seven-year high. all of that means, of course, that the $22 billion that the shore typically contributes to the tourism industry it could be less this year. however, at seaside heights where i am, the home to the tv show "the jersey shore," they have been working overtime to make sure they're ready for summer. >> we're going to be ready. we've really done two years worth of work in about six months. it's been a massive undertaking. our mayor and council have done a great job. >> the famous boardwalk will be

ready this summer. it may not be what you can see but you can see is critical. if you look over my left shoulder that roller coaster is is going to be torn down and the coast guard has to come in and make sure the water is clear of debris so you can actually go in the ocean when memorial day kicks off. of course, the unofficial start to summer. back to you. >> talk about an engineering and logistic call nightmare, mary. an important story we're not going to forget about. got a few minutes left here until europe comes to a close. we'll get that with simon and get the impact here on the u.s. as we see some relative political calm in italy today. f

european markets are closing now. >> so much to talk about regarding europe today. whether it's the italian coalition or what the ecb is going to do this thursday. simon? >> it is another very strong day for european equities. you can see green across the board because the data is so bad. now the majority of economists believe we will get an interest rate cut from the ecb on thursday. european stocks, the top 50 blue chips in the eurozone are now up over 5% in just one week in anticipation of that. and today we learned that economic confidence in april fell back to december low. again, the data is poor. you will notice an out performance as well from italy in particular. that stock market doing very well today.

carl mentioned we now have the beginning of a new government there on those big italian blue chips have rally aid cross the board because it's not just the equity market that's rallying. it's peripheral bond markets rallying as well, driving down the yields for which the governments have to borrow at two on a weighted basis, 13-year lows according to douglas. so that's always a win-win situation all of the way around. you see these guys, mediaset owned by berlusconi. we look at the new prime minister speaking in the rome parliament today before the vote of confidence, not only was he announce that they would stick to their commitments on deficit targets with the rest of europe but he also said that he would visit paris and berlin and brussels immediately. the big question now is the degree to which he will force fundamental change towards growth away from austerity like a set of dominos around the

whole european union, or the whole eurozone, more accurately. and what that will do to the future for investors. and more importantly, perhaps merkel will think about that and the ecb will think about that because you have to have sustained public finances to be considered down the line for direct support from the ecb. that's a very big debate that me we now embark upon now, carl, but some sort of coalition in italy. how robust will it be, how long will it continue and what will it do for property tax snes. >> amazing how many policies are right on the cusp of changing. let's look at the big board. bob pisani on the floor. good morning, bob. >> good morning. put up the s&p because, folks, we're closing out april up six months in a row. the last time that happened was in 2009. that's point one. point two, 1593, old historic cl

closing high. we could do it today. a lot of people over the weekend, i got so many e-mails, how do you explain the ridiculous outperformance of the stock market. we go back to the usual things. for the year, so far total stock market up 11.8%. bonds are only up 0.2%. commodities have been in a stoured spiral for almost six months. how do you explain this out performance of the stock market? we know what's driving the rally. first, there's the central banks backstop the world. austerity while you might think it changed this weekend, austerity has been out six months and has been resistance to it. finally, the nowhere else to put money argument which you would be surprise houd powerful that idea is. traders tell me all the time, what else am i going to do? i'm being forced into the stock market. growth has been anemic. that's been a problem. you can see this with the multi-industry companies reporting. today he had eaton reporting essentially both of them talking

about anemic growth in 2013. beating on the bottom line just barely and mitsdsi inmissing on line. that's been the story with the industry companies. beating on the bottom line. they're generally missing on the top line. they are generally affirming 2013 guidance and this is putting a lot of pressure on them to have a broader recovery in the second half of the year. how about industrials, the big trend, it's very simple what's been going on. beating on the bottom line and missing on the top line. so the bottom line is we've got to continue to find some growth somewhere. i tell you one problem that we've soon seeing, carl. not only are companying sees anemic growth. they're seeing anemic demand. but the products they have are staying in place longer than they anticipated. frekts, if you've got a heating, ventilation, and air conditioning system that's worth $10 million in your building and you replace it every ten years they're holding on to it 12 and 13 years. same thing we saw with automobiles. that's been a major problem. it's called the upgrade cycle.

and it's not occurring with the kind of regularity that it used to occur in. not only is demand slowing but the upgrade cycles are slowing as well. >> autos, bob, are the example that comes to mind first but it's going on a lot more than just in oautos. rick santelli is in chicago with the look at what's driving some fund flows and it's an important week to think about that. >> it is. and we have just the man for a flow question. we have the king of flows, chuck from trib tabs. welcome, chuck. >> how are you doing, buddy? >> i'm going to throw you a curveball right off the bat. i like to keep things really simple. and we all talk about the impact of fed programs on the price of stocks, liquidity, whether it's the bank of japan, bank of edge gland, ecb, our fed, of course it all matters. one thing no one talks about, chuck, is this. if you just look at just supply of investable stocks in the

u.s., it's about half of what it was 15 years ago. what do you think about that? >> well, you know, the fed is -- since the start of qe-3 in september the market is up $3 trillion. the fed's committed to putting a trillion a year into the financial markets. $4 billion a day, 85 billi$85 b month, a trillion a year. add to that a deficit of a trillion dollars. we have a trillion in stimulus and market call capital stock is up $3 trillion. to me that's all that's going on. nothing else is happening. the economy isn't growing. >> less supply of stocks and you add everything you said in, it shouldn't be a surprise that if there's less of them more liquidity that's pushed into changing them, it's going to pop up to the lofty levels. >> more money chasing fewer shares. that's also another definition

of a bull market. >> there you go. tell me some of the trends you've seen since the big announcement two meetings ago by the bank of japan. what do you see in your own backyabac backya backyard? >> we're seeing -- the only place in the last week that's getting new money is japan. mostly, and then europe is getting money. so the drug addicts in the stock market are chasing free money and japan is the leading supplier of free money today. with the ecb meeting and with the probability of some sort of easing lower rates given how horrible the economy is there, so that's the other place money's going. and money hasn't been going into u.s. equities in april, which is a surprise because april usually is a strong month for tax-oriented flows. >> well, we all know that when you raise taxes usually the april 15th that comes thereafter has the surge but it's the april 15th after that.

quick answer, what percentage do you think that we will see a rate cut in europe on thursday? >> oh, it's hard to tell. i think whatever the consensus is. i don't think europe is going to do anything other than the consensus on a rate cut. you know, it's a joke. it truly is a joke. people talk about that the austerity means something or, look, under qe, economies cannot grow. in the united states, take home pay is $7 trillion. everybody pays taxes. 30% easing and take-home pay is going to be up this year. 30% of the economy boosting the economy by 30% ease to get a 2% or 3% increase in after-tax take-home pay. but the stock market is up 3 trillion. who cares about the economy? >> i got you, chuck. listen, we're way out of time. shoot me a number. . what do you think the number is going to be friday on the u.s.? >> 78,000 based upon the slowing

growth and wages. >> chuck, you're always a great guy. thank you. carl, back to you. >> thanks, guys. appreciate it. got some breaking news on empire state building. bertha coombs is live in new york with that. bertha? >> carl, the hearing now over. this morning some of the dissenters, unit holders of empire state has said it's unfair that the folks who want to brick the empire state public as a reit should offer them only $100 a stake in the reit. they say their property is worth much more. their attorney made a valiant effort but the judge said he's inclined to rule against them. bun w big hurdle ahead of the ipo. another hearing on thursday on the fairness of the whole settlement. but the judge says he's inclined to rule against it. the ruling should come down sometime tomorrow. back to you. >> thank you so much, bertha coom coombs. love the jacket, too. when we come back, big week for earnings. companies to look forward to, numbers to break down for today.

"earnings squad" is back at hq ready to tackle it all. find out what happens when one of the industry's top tech gurus got to finally test google glass. we have the gadget live onset. i cannot wait to see this. scattered showe "squawk on the street" will be right back.

welcome to the earnings squad. we dissect the store is are everyone is talking about. i'm melissa lee along with my

squad partner and cnbc is joining us this morning. first off, let's get to the scorecard. 55% of companies reporting 69% beat their targets. 12% meet estimates. 19% was below forecast. this morning's batch. shares of chrysler parent company fiat on a roller coaster ride. fell 65% because of product launch expanses but the company firms the forecast. roper beating estimates. revenues below consensus and fell excluding acquisitions. shares of healthnet jumping 7% after the big earnings beat the company'sful strong full-year guidance. eaton is up this morning. its acquisition of cooper industries helping sales. but, herb, something is bugging you from this earning's release. >> it's the earnings release. sandy cutler, the ceo, is on tonight with jim cramer tonight.

this isn't a call about the company. i hate the press release where they basically talk about exceeding the mid point of guidance. instead of saying your earnings are up, i don't like the fact that the company is talking about how they're beating their guidance or -- because to me, how do i know they dant didn't low ball this guidance and not low balling this. when you look at the drivers of this mid point of operating earnings per share guidance it was the result partially of purchase price inventory expenses in the second quarter related to the cooper acquisiti acquisition. nothing to do with business. >> we talked about this on the conference call this morning. you know what i didn't really understand in terms of your point here is that whoever really reads the headline of the earnings. >> i do. >> why? all they do is tout whatever they want to tout. >> they usually don't tout. >> it is part of the reason i looked at this and i looked down and i see that their core sales off by 5%. >> right. >> you want to take a look at the real issues.

>> of course. >> how long do you give a company to integrate a new company? >> it depends on the company. >> with this one, how long do you think? >> i have no idea. but i do know that you start getting into excluding cost of a merger. you've got a company making acquisitions. you've got to look at the organic growth of this company. >> i agree on all of those points but i would put forth that you never read the headline because it never tells you anything substantive anything way. >> they're pointing this out at the top tells me they have nothing underoath. >> apple 34.4 million iphones sold. big deal. amazon up 22%. big deal headline. >> normal. >> who cares? >> normal. >> all of this tells you nothing in terms of understanding how the stock is going to move. >> single data points they want to use. >> throw that all in the trash. >> yeah. >> i want to take aing look though at rgr. gun maker reporting after the bail today.

interestingly, analyst at key bank says they expect this political uncertainty is actually continued to cause a spike in gun sales and that's going to help a lot of these company sths quarter and background checks which have reached an all-time high but the increase in background checks in march started to decelerate but sales are still on an up trend. >> you look to look at backlog here. there's a phantom backlog. qul is it going to push through? that's going to be an important metric. >> what do they have left and what does their inventory look like, too? >> what's that cabella mentioned in the conference call, inventory and whether or not they're going to be able to keep up with demand. smith & wesson addressed that, they said they missed out on gun sales because there aren't enough guns in the warehouse to take advantage of the demand here. >> the run on guns and where will it be exactly. >> run on guns. >> the run on guns. >> it's a good one, herb. when a company's profit tops

profits the company usually trades higher. look at this. biggest companies reported and you can see a lot of companies selling off an ownings. carter at oppenheimer sent this over and highlighted a list of companies representing 16% of the s&p 500. and you can see some of them, i think we have a graphic here. but essentially they beat and the stock sold off. which gets to the point that the earnings quality and how the stocks traded bog into the reports because a lot of the stocks went into the reports at or near all-time highs. >> they're beating on the bottom line because they're cost cutting and restructuring revenue growth this quarter down 0.3%. that is no growth whatsoever. the divergence between revenue and earnings are getting wider by the day. >> that is the earnings squad for this morning but if you want to join the conversation, tweet us. coming up next on "squawk on the street," the story behind this picture.

editor in chief of "mashable" is live at post 9 with google glass. that's right after this break. a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity.

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♪ up next, it's a huge week for the markets with earnings, the fed, the ecb and friday's

job number. john chambers one-on-one on hiring our heroes and when he thinks technology is going to turn around. also, pfizer earnings tomorrow. what should you do today? carl, see you in about ten minutes or so. >> sounds good. it was not, it wasn't since apple's first iphone that tech gadget got this much buzz. google glass. anticipation is pretty high. what is all the buzz about? lance, a good friend of "squawk on the street", he's brought it with him. okay, glass, and tapping. >> do that, turn it off. so, google, this wear bable. okay, glass. i can take the picture. you can see on here what i'm seeing. this is screen care. blue tooth connections between here and here. okay, glass, take a picture.

so now, it's taking a picture. i can also have it take video, i can e-mail the video directly. it connects blue tooth, make phone call, check e-mail. it has a day's worth of power as long as you're not shooting video all the time and as you'll know, i usually wear glasses,, right? i'm not wearing glasses because at this point, they don't have a prescription version. you can put sunglasses in right now. >> explain to me -- it knows your voice because you're saying okay, glass. what is the tapping? >> i have two choices. i can tip my head up to turn it on and off. but if i want to do another way, i can just tap it and that wring brings it right back. okay, glass, google. well, there's no wi-fi here, so i can't do the search, but basically, i can do a search where i could say tell me how to say hello in japanese and it would show me on the screen -- i

also have the ability, now i'm going to go up. i have the ability to go back in time. this swiping this way is walking back there my past, okay? i'm swiping back to all the things i've seen and done, then i go this way and actually, if i keep going, i'm going to go essentially into my future. oh, i'm going to take a flight today, say i was going from jfk to san francisco, tell me a little bit about the flight status. it's a way of sort of keep ng touch with things and google has been really clear about this. this is not meant to be always on. always in front of your face. in fact, if you notice where i have it, i have it sort of up here. a little bit higher. so if i'm looking straight ahead, i can see you. i look up and i see what's going on. i get a little tone in my ear and see an e-mail, i look up and say, oh, there's an emil for me.

>> you whaelz when you do the head thing, you look a little ridiculous, right? >> honestly, you can set the dreg. you can just do the tap and just work that way and the people say the more they wear these things, the more they get used to it. i don't know about other people because obviously if i'm looking up, i'm not looking at you, you may wonder what's going on. these are not going to be in everybody's hands right away. first of all, they're about $1600. there's only two ways to get them. if you attended google io or got on the google expedition, explorers program. they call you in, you get fitted. not until later this year will they be available for everyone, but $1600 is not an insignificant amount of money, but then again, you're wearing the future. >> there are competitors. other companies. one is called telepathy one. i think we have some pictures. "the new york times" has an app that's going to be available. there's a blogger who tested

them in the shower and posted some stuff yesterday. my question to you is is is it hard to use? >> no, honestly, i've gotten pr pretty much up to speed in a short period of time. again, for somebody like me who wears glasses all the time, i struggle with with it to see the screen. i really am going to need some sort of corrective lenses, it's not in focus for me. that's the only difficulty. it uses bone conduction for the sound. it's got great microphones. the telepathy ones have ear pieces that go in. so you know, what they've done here is created some state-of-the-art stuff that you get going on almost instantly. if you have a google plus account, you start uploaded stuff, that's kind of cool. >> is this going to be a cultural oddity that lasts ten mi mist? are we always going to be wearing these in ten years? >> i think wearable technology is the future. i think this is a glimpse of that. this is the start. and the first wearable

technology where it's not completely lly ridiculous. >> thank you for coming in. and the guys on twitter were dying to see it. see you soon. keep those tweets coming. "the washington post" reporting that lawyers and inmates are now taking to yelp to give feedback on prisons. what else could the service be a resource for? your answers after the break. get giving us unique insights which help us attract the industry's brightest minds who create powerful strategies for a country's investments which are used to build new schools to build more bright minds. invested in the world. bny mellon. ♪

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tweet time. "the washington post" reporting that lawyers and inmates have now taken to the review service to give feedback on prisons of all things. what else could the service be a resource for? brian writes yelp should be used to rate financial advisers. not a bad idea at all. review of the employment numbers. something we're going to do on friday and rick writes we could review courtroom food service for selected jurors. i'm prepared to offer constructive criticism for cook county, illinois. thanks a lot. keep an eye on the bunch of names here, tech having a big day. nasdaq hit ago 12 and a half year high as tech begins to show

some leadership. blackberry's going to be one of those, rbc raising estimates on the company. talking about the q10, the one with a physical keyboard. so far, we saw the z10, but there's a little more hype. scott wapner and the halftime. thanks very much. four hours to go until the close. right behind the wall is where we hand. there's the dow up nearly 73 points. s&p, nasdaq higher as well as we come on the air at the noon hour. chambers on tech. the cisco ceo on hiring our heroes. tech spending and what can jump-start the sector. healthy returns. pfizer shares up 20% this year, but now what? tr two trader, one stock and one big debate coming up. but first, our stop story. that's the huge week ahead for