stuff. >> thi think we're better off tn most. i think we're going to have a softer second quarter, second half the of the year will be better. we grew 2%, 2.5% this year, that's okay. >> larry, thank you. "squawk on the street" is next. good morning and welcome to "squawk on the street." i'm david faber with jaime cramer an brian sullivan live from the new york stock exchange. carl quintanilla is on assignment. futures mixed one day after the dow and s&p hit new record highs. let's look at housing starts. they were down 16.5% although building permits jumped to levels we haven't seen in almost five years. let's look at europe.

largely red. still in recession. in fact a contracting economy. back here in the states, walmart down. shares down in the premarket. >> they may be down but cisco shares are on the rise. the dow component beating estimates last night after the bell. ceo john chambers on "squawk" this morning saying the company is "re-inventing" itself. the proxy fight in hess is over. we'll break down the details. >> folks, take a look at tesla. elon musk who is a rich guy getting richer. he's making a huge bet on his company. he is buying $100 million worth of shares. let's start off with walmart. those shares are falling in the premarket. retail giant says first quarter

profits of $1.14 share was a bit shy of wall street estimates. revenues and current quarter guidance also below consensus forecast. u.s. comp sales stellar returns. they had been up for six consecutive quarters. >> they cite income tax refund check delays, challenging weather, less grocery inflation than expected and why not throw in the payroll tax increase. >> remember may they say did start off strong. their future is maybe a little better than the past. they talk about how tvs were weak. i think that's interesting because we were talking about how best buy has gotten so far entertainment week. is best buy wrong? the stock price is up but we haven't actually seen anything that indicates --

>> they're either taking share from walmart or that business isn't nearly as good as best buy stock would indicate. perrigo is a huge relation with walmart. walmart is a great customer. overall i buy them when they talk about the weather and we have seen from family dollar the tax refund issue. but the tax refund issue has not affected the higher end which is why i think you have this weird bifurcati bifurcation. >> resource down trading family dollar from neutral to a buy. >> let's take the up side of the walmart story. if they're blaming delayed refunds, refunds come. they may be delayed but they will get there. they blame the weather. the weather does eventually change. so for the reasons, david, that you gave for walmart to say we're weak, those would be transitory, two appear. >> that would be something that would be quarter to quarter and

you might get that move jim mentioned. saying things look pretty good in the early days here of may, we shall say. let's not forget, walmart is over 20% of all publicly traded retailer sales. this is retail. and so so much can come from what we see here in this report an they are pressuring from their peer group. they have their foot on the pedal. want to use asle many driving analogies as i can. >> maybe they'll shift into high gear, david, because gas prices have come down. walmart could be as exposed as any retailer to the impact of gas prices -- >> i think things have gotten better. i think it is always important to point out for people, david did a documentary on walmart. >> i spent a lot of time there.

international was up 2.9% but it is not as large as they'd perhaps like it to be. >> i'm not used to walmart saying this. "we are, however, disappointed in our expense control in international." david, is this not the best run retailer in the world? how does that snap. >> it happens. >> but that's unusual, isn't it? >> it is. they are, as we know and have always been since the sam of sam walton, focused on not spending money unness airline. that continues to be a walmart at walmart and a cultural -- part of their culture that's unmoveable. >> how is sam's club doing? they say sam's club is exposed to small business creation. lot of people start a two, three person store, shop, they go to sam's club and set up with their

office supplies and staples. as the job market gets better, as people feel more confident, perhaps see more business creation, i just don't know enough about how important sam's club is to walmart overall. i don't know the percentage of it on the overall business. >> there is a terrific execut e executive -- >> comp sales were up.2%. that's not that great. thind case small businesses not coming back yet. there was mention of the weather for the club. the club is not on fire. >> no, the club is not on fire. brian, if it were a separate company it would be one of the largest retailers in the country by far. talking about $13.8 billion quarterly sales. >> that's just incredible.

that's why we spend a lot of time on walmart. >> we did it twice. that was enough. >> it is probably the most watch stock. >> it's true that they charge for coffee a quarter in the walmart lobby. if you're going in there, if you're a sales person, whatever, it is not even free coffee. >> if i recall, that is right. in the waiting room there is a charge for -- there was that antiquated machine of some kind. it may be different. >> stinginess. >> they'll pay to replace it in 10 or 15 years. >> i still find values to be great. i don't like the outdoor and garden as much. they didn't rave about outdoor and garden. they're still not competing correctly in that business. >> just keep an eye on inventories because they'd risen much more sharply than did overall sales. that can't always be a sign of price cuts to come. let's move on to dow

component cisco systems, up sharply in contrast to walmart in the premarket. reporting third quarter profits, 61 cents a share, two cents ahead of estimates. revenue also been consensus. citing improved sales in both hardware an services despite what was characterize the as a low spending environment. ceo john chambers was on "squawk box" in the last hour. >> it's our ninth consecutive record quarter in terms of revenues and our sixth record quarter in terms of profits growing faster than revenues. good balance across the board. u.s. is actually looking pretty solid in terms of growth an that's a good signal for the economy. but also their emerging markets did very, very well for us. i think we're doing well in a tough market. >> john chambers has been very

dour of late. >> all those things. couple things to point out that i thought was really important. here's something david and i have been not at loggerheads because we're friend off camera, he said europe has bottomed out and he saukd about a corridor. germany, eastern europe, russia all strong. i thought that was interesting. state and local government in the united states strong. good business from at&t, verizon, time warner and comcast. i thought this is one of those quarters where he basically said listen, we are not a hardware company anymore, we are a solutions company. solutions companies get higher margins. >> here's the most amazing thing about the quarter that you talked about. positive quarter growth across all of its four business models. remember when he said the sequester is going to destroy companies like cisco who rely often times on a large sort of

government buy of its routers, servers, whatever? that didn't happen. up 5% on every sector. that was the in fact of the groups up 5%. oppenheimer saying we love the stock. a lot of positive analyst commentary also out on cisco. >> you know what else may help? they were the first to see it. i remember when they first saw this downturn, it's like -- i mean chambers saw it coming. they were the first to see an upturn. david, dell, hugely positioned in state and local business. any take-aways for dell? maybe people are saying dell is a solutions business, too. i'm looking for reasons why anyone would do the dell deal. >> commentary, price target raises, good quarter, this could be a big day for cisco. >> we know we're going to hear from dell today.

those numbers are not going to be good. but we'll see because we haven't seen the numbers themselves. we'll come back to dell a little later. >> people always want to know, jim, how could this stock go up so much? part of it is when you have a piece of research, sell rating by jpmorgan. there was no enterprise weakness. john chambers is saying those macro headwind have died down. potential scn impact. shares were not horrible until you get that. if anything, the cisco kid is now the fiy kind. >> we also have seen false

starts from this company in the past. >> yes, we have, but it was not this quarter. because they've seen the downturn. this is them taking share. the gross margins are good. this is what what the beginning after sustained move looks like. i don't know if they can sustain it. >> the thing i like most about cisco. i know you know john chambers very well. i've been out there. their campus is like a city. this company is not afraid to admit they've made mistakes. scientific atlanta, i'm sure you covered that, david -- you probably broke it -- couple billion dollar deals. they realized, boom, it was a mistake, they get out of it. >> who's been around as long as john chambers? ibm? microsoft? >> larry ellison is another one out there. >> but he started the company. that's a little different. i guess john's got to be the elder statesman. if he doesn't see the tren, who would? >> that's an interesting point.

you never -- >> who's number two at cisco? i have no clue. >> i remember when mr. morgan was the ceo and this guy came along, john chambers, with that west virginia twang. who is this guy? twang? you know. next thing you know we're sitting here discussing him and there's no reason to talk about and and andre -- andy rowe. i've had my ups and downs. i'm a big roller coaster -- but this is pretty good. i foal like when john was down i flag him. you know what? he's up so i praise him. >> music.

>> i can't wait to talk about jcpenney numbers coming out tonight! salivating already. post nine did a live interview. find out how mobile played a bigger role with companies to where they said they could be a 00 billion dollar company. and a new reason tesla shares are on fire. we'll look at that carmaker. let's take another look at futures here on a beautiful thursday in new york. we are seeing futures slightly down but cisco could be a big deal. more from post nine where the coffee is subsidized when we return. ngine can understand 5,000 data samples per second.

which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪

ticker symbol wlh. last hour we told you you hess and elliott have resolved this bitter fight that has been going

on for months, the proxy fight that was expected to culminate today. elliott will see 3 of his 5 nominees on the board. to replace five existing directors and a sixth as well will come, that's quigley, i believe. there's the three from elliott. rodney chase, harvey golub, david mcmanus. will all be taking their seats. what's most interesting here as we said last hour, we have a 14 member board. nine directors of which will be new directors. one might expect there will be sort of a new direction, if you will, for the company itself. though a lot has happened since this proxy fight began.

these are total heavyweights that have come in. i think the assets here are worth a great deal. i think it has been undermanaged. i think it is going to be a reenergized company. i think it goes higher. >> let's talk tesla before we hit a break here. >> if you follow, teper and einhorn, at least in the latest

filing, are long hess. >> my guess is they were getting ready to vote in favor of elliott slade looking for change there. tesla shares -- oh. you're reading tesla. >> because i'm a car guy. >> you don't read anything. >> there's a little reading. that's the best part. i'm going to read this. shares continue to sore. they are up sharply in the premarket. they've more than doubled in the past month. electric carmaker introducing a secondary offer of 2.7 million shares of common stock and a convertible stock, not a conv t convertible version of the model s. this the company looks to repay an energy department lope which everybody is killing them over. tesla's ceo elon musk is going to buy $45 million in stock in the orring, as well as another separate deal. musk pouring more into his company, $2 million. you divide that by the number of

cars they are expected to sell, which is 21,000, the market is currently valuing tesla at $500,000 per car sold this year. you can't use that as a metric psh. >> you can't. because you're applying geometry worth a trillion dollars. >> toyota's $29,000. >> this is a cold stock. the borrow here, how much it cost to borrow is sky high. this is a true battleground for people at home. be careful. if you want to orchestrate a short squeeze, mr. musk has done it. this news came out and the stock was at 92. immediately it went to 84. at last there is a lot of supply coming. then it went to 94. this was one of the greatest turns in after hours about why you should not trade in after

hours. we're going to have the mad dash. talk kohl's after this break. but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. what makes a sleep number store different? what makes a sleep number you walk into a conventional mattress store, it's really not about you. they say, "well, if you wanted a firm bed you can lie on one of those. if you want a soft bed you can lie on one of those." we provide the exact individualization that your body needs. the sleep number memorial day sale. not just ordinary beds on sale,

but the bed that can change your life on sale. the sleep number bed. this is your body there. you can see a little more pressure in the hips. take it up one notch. oh gosh, yes. you get that moment where you go, "oh yeah" ... oh, yeah! ... and it's perfect. they had no idea that when they came to a sleep number store, we were going to diagnose their problems and help them sleep better. and right now save on the closeout of our classic special edition bed set. just $1299-a savings of $600-and discover the only memory foam bed with dual air adjustability. once you experience it, there's no going back. wow. don't invest in a mattress until you find your sleep number setting. sale ends june 2nd. only at the sleep number store. sleep number. comfort individualized

the new blackberry z10 with time shift and blackberry balance. built to keep you moving. see it in action at blackberry.com/z10 ♪ all right, we're about 5:30 minutes from the opening bell. time for cramer's "mad dash" ahead of the market open. >> kohl's reported a 9 cent

better number yesterday. this is a testament to how badly the street needs new names. they didn't actually guide up. it wasn't anything spectacular but it was not as bad as it's been. here's one interesting, mr. age of walmart. what happened? business picked up meaningfully in april as weather improved. so is it possible that on the side of route 22 and all the other places that walmart is the weather was bad and it was sunny on kohl's side of the street? i ask you because it is a weather man related issue. >> i have no idea. i assume it is possible. you never know with climate change. >> and kohl's has got 1,000 stores all over the place. >> you say the street is out of ideas or out of names, what do you mean? >> because everything's been taken up. i've been watching kohl's. i say boy, that hasn't moved. target's moved and gap's moved and william sonoma's moved and macy's has moved. boom! something to buy that's new. david, we love new names on wall street and that's what happened to kohl's. >> and so that may run a bit today -- >> yes. because guys have -- people who

have been writing this company off now have to recognize gross margins get a little better. maybe they got their mojo back. maybe they cleaned up their stores, made them less dowdy. it used to be one of the great growers. maybe it can grow again. live exclusive interview ahead with groupon's co-ceos. hear how they are taking the company beyond the concept of daily deals. the opening bell next. 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, one innovation at a time.

the new american is arriving. [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market.

♪ all on thinkorswim. from td ameritrade. all right. you're watching cnbc's "squawk on the street" live from the financial capital of the world where the opening bell is set to ring in less than one minute. one minute away. we'll be talking a lot of housing when this bell rings. >> but permits very good. people will now look at starts. we were talking during the break. they are really in a great comeback area. >> california, arizona, nevada. outside of phoenix. these were the hardest hit areas of housing. now you got a company that's

posed to come back in the market. >> what about the 16.5% down though in starts we saw this morning? >> i looked at permits. they were over a million. remember, the last -- >> the s&p 500, real-time exchange. the home builder is going public today raising $217 million from that ipo. 8.7 million shares. priced at $25. it hasn't yet opened by $25.27 appears to be the potential pull-up -- >> over at the nasdaq, dsba global supplier of transports and logistic services. all right, here we go. opening of the day. looking a little bit down but not too bad.

>> cisco shares up over 10%. that's a serious move. >> people are short cisco. i tweeted out yesterday during my show i thought the market started to smell a little funny. this comes via strategic research. there is a greater percentage of new highs in the market than at any time in 25 years. >> i know that i'm going to try to be on your 2:00 show. because herb was going back and forth with me at 4:00 a.m. on twitter. herb was saying he thinks that this is now the great soft market. i was saying, yeah, clorox is overvalued. these are real companies which

is why it is so hard. the new high was littered with real companies that you probably want to own. we're not talking about pets.com. my more basic question to you, jim, who are the buyers? who's in this market now? who's getting in? who's doing this? pushing this up? >> i think there is a lot of index money coming in. anybody who hasn't sold yet or who want to own. i think that a lot of this is the buybacks are now finally -- they're realizing they retired a lot of stock. many companies retired stock. you go to the share cap. it is always down now for companies. there's hot enough to buy. >> the underlying theme is cheap money, the ability to borrow. cheap money comes up, the ability to extend maturity for 30 years in some cases and lock in incredibly low rates of

financing. some of which is used to buy back stocks. >> at the same time the cash on the balance sheet is here's this recipe that makes it easy to see how can you keep it percolating. herb greenberg says jim, you got to come out on the show at 2:00 and say -- jim, defend this market. he wants me to defend the market. i will defend individual stocks but it is a move that is i love and respect herb but he was out there telling people to short the radio stocks when jesse livermore was going long. on monday night herb greenberg finally taking me to dinner five months after losing the bet. it's next monday. >> he has not taken you yet? >> he has not but monday we are

going to dinner at an undisclosed location. it is not jack in the box. >> i like qudoba. >> we'll have you on the show. >> apple shares have been something of a significant decli decline. >> i don't know if you guys can put this you up quick, overlay google and apple from yesterday. apple sellers becoming google buyers in. >> i think it's perfectly legitimate to speculate that may be the case. apple is on bottom on the yield but it's not there yet.

>> look at how good this team is. >> i call that craft. >> the movers that we discussed coming in, walmart is down 2.5%. not too bad. >> david, here it is again, netflix. netflix up again. netflix. heavily shorted. arrested development coming out soon. >> who would short netflix? >> big name hedge fund managers familiar to viewers on this network get their derrieres delivered to them on a silver platter on a netflix short. >> by the way though, others who shorted last time it was at $245 did quite well. >> what i think has happened in this market, people say it is too fast, it is too far, it is

too high. they are making valuation shorts and valuation shorts in a time of say 1998, 1999 so a lot of them put on. a lot of henl funds getting blown up by valuations short. >> can you value netflix in any form of -- and amazon for that matter, because you don't know what the next headline could be. i don't understand amazon's business model. >> netflix has a $13 billion market cap it would be worth $18 billion for apple. netflix is adding subscribers. the model works and everyone knows if they wanted to raise price they could do it. >> when they raised prices, if you just listen to twitter, i'm

quitting netflix! it's over! i got to get off netflix! guess what? they keep adding subscribers. all those people complaining on social media, they didn't leave the company. they -- >> reed hastings read that and reversed it. i mean what a bold move to say i am wrong. >> we know 30% of web traffic is netflix. >> it is a powerful model they've got and they know their customers better than anybody which really can make a big difference. >> we'll close somewhere around $26.10 for william lyon homes. $26.10. william lyon homes. this is a very good sign for home builders. remember what happened earlier this year. tripoint homes priced on january 30th.

that stock price is 17 now trading at 19. we had morrison priced $22, i believe? they are at $25 and change. price talk william lyon was $22 to $24, they open at $26.10. three home builders all leading the ipo rally here so far this year. certainly a very good sign for continuing improving home building market here. a lot of very happy executives here. important thing about the overall market this morning, listen. melt-up every single day. just a little bit. we are now getting into very overbought territory. one of the best gauges i've seen in a long time is how far above the s&p 500 we are on the 200-day moving average. i just did some calculations this morning. right now we are a little over 12% above the 200-day moving average on the s&p. how weird is that? that almost never happens. my rule of thumb, as the mark gets overbought, when it is above 8% over the s&p 500, when

you get over 10% it is notable. 1 12%, it is a very rare occurrence. i'd keep an eye on that. economic news, it kind of pours this week. one of the most interesting things is the ppi and cpi, basically negative. that's going in line with the sort of low commodity priced environment that we've been seeing. we've talked a lot about how poor the commodity pricing has been. that inflationary picture certainly plays in line with that. i'll make two observations about walmart. one, management set the bar very low now for the second quarter. they'll probably beat that number. second thing about walmart and a lot of retailers, they're very heavily shorted names. a lot of people believe the prices are too high and the expectations, the retail environment, is not great. of course we have a very simple fact, stocks are expensive right now and online sales are raging headwind for the retail market

overall. you also mentioned cisco. i.t. spending getting better. john chambers looked positively pleasant, happy, pleased. and he should be with that report. here's comments i would make. remember, they beat on the top and bottom line. you know how rare that is? everyone of their competitors did not. every single one. i'm talking juniper missed and did not -- gave poor guidance. f5 networks. aruba networks missed. river technologies. anyone that competes with them missed and gave poor guidance. not only did cisco beat, their guidance was pretty good overall. and a lot of smiling people here, william lyon homes trading at $26.66 after pricing at $25. guys, back to you. >> another home builder that did well. i think also on cisco, this was a tremendous share change.

higher gross margins. it is a hardware company. that's paying off. michael dell always wanted that to happen and it happened to chambers this quarter. >> let's go to the dow. >> we're only going to touch on two countries on this spot because this is the two countries that are giving the more horsepower from the stimulus perspective. start with the u.s. look at these several charts of 10s. on the intraday, you see where 8:30 eastern was, 32,000 jump in initial claims. now granted, it is not a bad level, but once again really if this series of data points, the news is when initial claims goes up, that surprises the market. they've come to expect a low level of claims. when you open the chart up to a couple of months you can clearly see we're not at the highest level levels since mid-march but we're certainly flirting there. we never did get to the 2% mark. currently which side of 1.90 we close at will be very key.

the yen, japan, bank of japan specifically, look at the two-day chart of dollar versus the yen. yesterday it was around 102.78, a fresh start back to october of '08. but today a lower high. pay attention especially with the weekend coming. concerning all events of the dollar-yen over the past week. i talked a lot about the 10-year jgb. japanese government bonds. 92 basis points yesterday was the high. today we are hovering around 84 basis points. but as you open the chart up to one year you can see the unbelievable amount of volatility in their interest rates since the april bank of japan meeting that outlined their stimulus. and remember, if you believe yen carried trade leverage investments of risk in the system, what changes that is a shift to higher interest rates and currency movement. jim, back to you.

>> david, i think have you breaking news? >> not breaking news. just do a little faber report here. i want to talk about the financing markets. something you talk about a lot here. power of cheap money. when it comes to m and a, also showing its head. couple of different deals we're following or contested situations. it appears dish network is getting closer to securing all the financing it says it would need to solidify its bid for sprint. its both cash and stock bids for the company. there's a look at sprint shares. i can't confirm what others reported yesterday. jeffries, barclays, royal bank of canada amongst the groups that are likely to sign on officially to help finance the remainder of what they're saying

is roughly $9 billion in financing needed. there's still an open question as to whether the changing provision of at sprint would be triggered and you'd need to double that amount of financing. yes, a lot of questions but certainly interesting to see. though at this point -- as far as i'm aware, it hasn't begun paying for those financing commitments. on to dell now, carl icahn is in the market looking for $4.2 billion to finance the leveraged recap that he's proposing for dell. remember, most of the cash of course would come through repatriation, sale of receivables, repatriation of cash that dell already has on hand. but they would need to borrow the number out there on the markets is $4.2 billion. that would seem like a layoff in markets like this. wouldn't it? though they aren't there yet. interestingly, i'm not getting

asp much detail as i had's like but they're saying to banks, hey, if you come with the commitment an we don't fund, we'll give you a percentage of the ups on our stock position if there are any ups to speak of. i don't quite know what it is. i mention it because they are sort of offering this kicker to try and get banks to participate. coming back to the larger theme here, everybody running to high yield. anything that's got a yield of any kind expect to be successful in doing that. >> probably a dumb question but if carl icahn's deal for dell goes through, who controls the company? how much in cash is going to be floated? >> they're saying they expect 80% of -- 20% would remain. they'd roll in a 20% yield. the remaining 80% would choose

$12 a share, and then get the stub as well worth $1.65 is what they are saying it is worth. >> i don't think i've ever heard the word "stub" used in a private equity. >> this would be a public lbo. the recap of a public company. they're rolling in entirely and another shareholder can choose to get -- listen, it may be compelling if they can come up with the $12. then you get $1.65 -- they're saying it could go to zero because you have a highly levered company, though not as highly levered as michael dell. michael dell can't vote in the upcoming shareholder vote. upcoming -- it is still a ways away. so that may really be in doubt. but if that's voted down it doesn't mean you get the icahn deal. he's looking for a ceo right now. he hasn't come up with one at this point. you're in no man's land. when the shareholder vote comes

up on his slate of director, michael dell can vote. >> he's using the cash to leverage the company up. >> yeah, he is. >> that's the reason to buy the company, but it's now gone. still to come, shares of best buy began the year around $11. they're now above $26. is this the right time for you to still jump in on the best buy bandwagon? we'll get some unique perspective from somebody who ran circuit city. hear what he has to say about best buy. plus, google's record run. analysts making a case for man than a $1,000 target on google. and as we head to break, this morning some of your early movers.

still to come, is it time to resubscribe to groupon? the call's ceo will join us shortly. is this a deal worth investing in? later on "squawk on the street."

before global opportunities were part of their investment strategy... before they funded scholarships to the schools that gave them scholarships... before they planned for their parents' future needs and their son's future... they chose a partner to help manage their wealth -- one whose insights, solutions, and approach have been relied on for over 200 years. that's the value of trusted connections. that's u.s. trust.

groupon's ceos are in the spotlight this morning saying they are not likely to announce a permanent chief executive for the company until next year and according to business insiders, they say they think groupon can become a $100 billion revenue company. cnbc's the place to be to see the co-ceos live on television. live on good old-fashioned tv. we have an exclusive with lefkofsky and leonsis.

one thing i would point out, in that conference call they have straightened out a lot of the american business. makes you think that anybody but mason. >> it is a better run company without the previous ceo. >> i'm just full of genius insight this morning. just like every day. what is groupon? what kind of company -- no. i mean -- i'm being serious. >> you're saying local commerce. >> think of it as a company that's literally -- you want to have a little savings. they've made terrific strides in mobile. >> it is pinning a deal to my fun.

i'm standing outside the bar. they have two for one points. >> bingo. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ tdd#: 1-800-345-2550 hours can go by before i realize tdd#: 1-800-345-2550 that i haven't even looked away from my screen. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 that kind of focus... tdd#: 1-800-345-2550 that's what i have when i trade. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 ...helps me keep an eye on what's really important to me. tdd#: 1-800-345-2550 it's packed with tools that help me work my strategies,

tdd#: 1-800-345-2550 spot patterns and find opportunities more easily. tdd#: 1-800-345-2550 then, when i'm ready... act decisively. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 with the exact same tools, the exact same way. tdd#: 1-800-345-2550 and the reality is, with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 ...until i choose to focus on something else. tdd#: 1-800-345-2550 all this with no trade minimums. and only $8.95 a trade. tdd#: 1-800-345-2550 open an account with a $50,000 deposit, and get 6 months commission-free trades. tdd#: 1-800-345-2550 call 1-877-994-7694 tdd#: 1-800-345-2550 and a trading specialist tdd#: 1-800-345-2550 will help you get started today.

manny's maverick hurting today. directv. >> this is again this whole price target, directv, dish, comcast, time warner. business is on fire. >> publicly traded 3-d printers. news. >> finally someone takes them down. people love 3-d as part of the herb greenberg floss indicator. >> google play not hitting pandora. >> i like the management. the stock is percolating. >> citigroup. >> we talk about finance and worldwide emerging markets. citigroup is the best emerging market. >> a big win for goldman sachs? >> a big article front page, a1, "new york times." they are going beat the same

profit margin as ever. >> "mad money" tonight? >> i get these calls in the lightning round. someone says what do you think about erickson air crane? i never heard of them. the ceo watches the show. he's going to come on the show tonight and explain what he does. >> udo reider? >> this is a $300 million company. people love these new names. i was telling you the same thing on kohl's. tonight is the night where i say, you think it is too hot? i got some 5% to 6% yielders and i'll be on street signs discussing tesla. >> i'm holding you to that commitment. >> i will be there. >> 2:00 p.m. eastern, 11:00 pacific. coming up, an exclusive with groupon co-ceos right here at post nine. great simon hobbs taking my spot. changing the world is exhausting business.

with the innovating and the transforming and the revolutionizing. it's enough to make you forget that you're flying five hundred miles an hour on a chair that just became a bed. you see, we're doing some changing of our own. ah, we can talk about it later. we're putting the wonder back into air travel, one innovation at a time. the new american is arriving.

just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before.

welcome back to "squawk on the street." breaking news. may philly fed coming in at minus 5.2. big miss there as well. we were expected an up-2 number.

when was the last time we had a number this small? back in february. so minus 5.2. a lot of surprising data today. unfortunately most of it has been on the weaker side outside of permits. sim. hobbs, it is all yours. thank you very much, rick. major indices at the moment, that weak reading comes in the wake after number of relatively weak sentiment readings. the market as we saw on yesterday's session can hang on in there, if not rally. partly because of what the fed is doing and how that changes the calculation there. steve leisman is digging deeper into the data that we have. >> yeah. simon, this is some concern. we got the weaker than expected empire state yesterday. i'm looking at every single component of philly fed that matters is negative. new orders negative. employment negative. number of average work week is negative. only positives are inventories, though that's down from what it was in prices paid.

there is some gathering concern, i would say, certainly on the manufacturing side. i guess it was you who mentioned the factory orders yesterday. then today this morning at 8:30 other weak data. housing starts down 16.5%, although permits were up. some economists say we'll follow the permits, that's where stuff is going. but you can't escape the weakness there in the housing starts numbers. claims shooting up 360. one week's numbers doesn't make a trend but still an area of concern. cpi down 0.4%. why is cpi down? core cpi up a very small .1%. folks offense at jeffries saying none of this should give the fed any motivation to taper the current qe program. over at bmo, they say unless we see it remaining at this level next week, let's chalk it up to

a wonky reading. and this, "the risk the fed has to ease further to stop this decline is rising." economic activity is picking up so you would expect inflation to stabilize here. big decline in gasoline. 8.1%. that's huge. but medical care, something that's always been higher than the average was unchanged this month. apparel down .3%. airlines fares down .7%. i am looking at inflation and also simpson thetically to gold prices as a sign there's maybe weak aness in the economy. david, back to you. >> steve, thank you very much. steve leisman. want to look at some of the big movers this morning both up and down. that one is really up. look at the move in cisco, 13%. the company leading both the dow and s&p, it reported strong

earnings after the bell. we were joined this morning on "squawk box" by john chambers who was more positive than he has been in quite some time. tesla also rallying today, yet again. that stock has had quite a move of late, in part on short covering but they're selling a lot of cars -- at least for them. they'll make some money on all of them. two seem, at least, at this point. after the bell yesterday elon musk buying another $100 million worth of stock. doing a straight common offering, a convertible offering as well, going to raise some money, pay the government back. walmart shares though different story, under pressure. disappointing earnings this morning though again, the damage there not very bad as our own jim cramer has pointed out any number of times. even when you get bad news on some of these names you don't see a significant down draft in these stock prices. >> one of the things when you look at walmart versus cisco you have the difference between business and the consumer. walmart is warning about

significant headwinds on its top line. cisco is talking about a recovery in business spending two or three quarters down the line. very different pictures coming through on those two major stocks. >> very different stories. now to shift gears to another stock on the rise this morning, groupon shares are rallying after the co-ceos said they see the company being worth $100 billion one day. daily deals company has had a tough year though with the co-founder an former ceo andrew mason getting ousted at the end of february. i spoke to mason in september about groupon's difficulties. >> we're certainly not happy that we've been as misunderstood. all we can do is continue to focus on growing the business and providing value for customers and merchants. >> now the question for groupon's new leadership is whether the company is still misunderstood. joining us today with we have co-ceos on set here joining us for an exclusive interview. thanks so much for talking to us today. so your shares have gone up by

50% since you fired andrew mason at the end of february. groupon's business was built on the idea of blasting people with deals in an e-mail. and not drawing them to a website or app to seek out products or services. how are you addressing this fundamental shift? >> i think the most fundamental way that we're trying to address it is moving from, as you mentioned, in predominantly a push e-mail experience to being a marketplace where people can come down and pull deals. we've made great strides. less than 45% of our business today is reliant on e-mail. and more and more we're trying to change consumer behavior and have them come when they have a demand. they want to go to a restaurant or they want to get a massage or they want to find a hotel in their local community, come to groupon and pull down a deal. we're seeing great strides. >> but aren't you facing this problem that groupon's customers are deal hunters. that what the groupon brand is.

how can you turn them into full price loyal customers, loyal to either you or your merchants. >> groupon's main customers shifted over time. there used to be far more focus on getting a deal. they now skew for female, they skew more aflaunt. lart of our customer is a 42-year-old female with two kids. i think it's changed, we've become a part of mainstream life of many people who rely on groupon as a source of many great deals where they can find things to do in their local community. hopefully we'll keep surprising and delighting people. >> looking at the dramatic move in your stock, i bet you thought were you trading at an andrew mason discount. >> i'm not sure we were trading at a discount related to andrew. i think we were misunderstood. i think we caused a lot of that. we absolutely didn't manage the going public as well as we could have or should have. we're focused on running a great business and hopefully we'll be

left -- >> why didn't you fire andrew mason earlier. >> andrew is our founder and very respected in the company. but as a public company, the board just reached the point where we felt that bringing in some new leadership who had managed a really, really big upscale global enterprise store was appropriate. >> i want to pull up the letter. it certainly made a lot of headlines. it sort of raised the question about the -- here we go. he said he decided to spend more time with my family. just kidding. i was fired today. if you've been wondering why, you haven't been paying attention. his resignation letter raised a lot of questions about the company's strategy, whether it was a mistake to go public when you did. >> i don't think it was a mistake to go public. first, at the time we decided to go public we had -- even though it was early in our life cycle we had thousands of employees and we had a shareholder base that was about to exceed the

limitations that you can have. they have subsequently changed the rules. but at the time we had maybe six months before we had to file. we picked the window we thought was right and we filed. >> you and your wife own 26% of the company. >> i don't think that's right. >> directly or indirectly. are you major shareholders. the stock has lost three-quarters of its value. i'm trying to understand what it's like to sit in that position. i mean did you ipo too high? i mean was the price wrong? how did you feel as you watched that mass devalue destruction? what is it like to be in that position? >> it certainly doesn't feel great when your stock goes down and you own a lot of shares. but ultimately i take a longer term view of the stock. right? i'm going to be a shareholder for a long time and so the question is not what is it worth today or this quarter, it is what it is worth over a long horizon of time. i have to stay focused on the

fundamentals, how the business really performs. >> what's the conversation then with andrew mason as he gets a lot of very bad press and yet you stand by him at least in public. what's the conversation that goes on between you guys about what you need to do? >> i think there isn't a lot of focus on stock price within the company. we're hear on quality but most of the focus and attention is on main street, merchants, consumers and what can we -- >> when you've lost three-quarters of your market capitalization, in that first period, that must -- you must have spoken about that inside. >> most of the discussion really is how do we meet our expectations. that's the key focus, trying to major on the majors in the company and the company gets a senior management team and all of the employees focused on doing the right things in the right way for the customer. if you continue do to do that, numbers will speak for themselves. >> ted, you put an expectation out there now, $100 billion in revenue. now if it wasn't you, i would

completely dismiss it. as it is, it does sound as though you might have been getting a bit giddy and what time frame are you possibly talking that this company could be a $100 billion revenue company. >> really, the opportunity before the local commerce and where mobile and commerce comes together really is probably the biggest opportunity that all companies are organized to go after. right now we're looking at growing that top line and i think we can have a lot of up side over the years. >> give me some sense there as to how that number can be possible. i mean, i understand it is a huge opportunity. certainly mobile which is becoming a more and more important part of your business and i assume will be the majority of it, if not now, very, very soon. but we're talking about google here, in that same category competing with people with google maps or whatever it may be to generate commerce. >> ted nailed it. it sounded like a salacious comment. it wasn't meant to be. the comment was we're not

focused on being at the current billings we're at today. we're trying to figure out how to get to ten times that size or 20 times that size. which is the thing you you want a high-growth company focused on. it is a huge opportunity. at the end of the day we sit at the intersection of mobile and local which as ted mentioned it probably one of the greatest places you can be. if you get that right -- and i think we have the chance to become the first e-commerce company of this scale that's predominantly mobile. when people's daily transactions are out moving out and about -- >> as a ceo, do you want a technology ceo like marissa myer who will come up with great technology innovations or are you trying to do sales deals at the local level and therefore you need somebody who's good at executing in that way, say jeff boyd from priceline? what are you looking for? >> the board has set up a xlit. we're very active in the

committee. in june we'll start formally our search and we're going to be very, very deliberate. >> are you a technology company or are you something much more akin to, say, -- >> we're definitely a technology company. first, our ref nice come entirely from the web or from mobile and so we're clearly technology company and on top of that, if you look at our head count and the significance we're making in technology, it is pretty significant. i think we will approach 1,000 people in product and engineering by the end of the year. we're investing significant amounts in making sure that we do have forward facing technology and we are constantly innovating. >> i understand the idea of being deliberative in picking your new ceo. it is a big decision but you said you're in absolutely no rush. but that raises a question. isn't this kind of uncertainty about who is going to be the leader moving forward bad for the company? >> no. i think it was very important for the board to understand what the challenges and opportunities

before the company was. and we understand that now and the senior management team of this company is world class and eric's doing a fantastic job running the company on a day to day basis with the team and you saw the numbers. they speak for themselves in the first quarter. and so we would rather be deliberate and thoughtful and bring in a world class talent at the right pace. >> let me ask you about the international market. there's big disappointment you haven't been able to sort out international as well as you might have done. what do you have to take from the u.s. model to the rest of the world? what do you have to teach that side of the busy to make it do better? >> there's really two things. first of all, the marketplace -- at the time we went public i think people didn't realize just how powerful the marketplace can be and what an important entry it can create when you have healthy merchants and healthy consumers all choosing to interact every day in this marketplace. we recognized our north american

community is healthier. it is older, more mature. internationally the community was not as healthy so we spent the last three quarters making sure customer and merchant satisfaction was abroad and we built a bunch of technology in north america, things like deal bets that house our repository of deals. things like smart deals which basically pick those deals and send them out to people in a way that's relevant. all of that technology doesn't exist in our international markets so we have to get it there as fast as we can. >> but looking at international members, we saw declines in international customers, unit sales for international customers fell. how can you turn that around? >> if you look at the trends on a quarterly basis, especially in local were pretty strong internationally. we saw some good numbers. you're comparing a a year over year comp and the peak of the international business was q1 of 2012. you mentioned the stock price going down, europe began to fall apart in q2 and q3. that brought the business to a

much smaller level. this is really the last quarter in which we are comparing a huge year or year of comp. it will get much better in q2 and q3. >> what about struggle with the daily deals? this is still your core business, your original business, but it is slowing and the number of customers who have purchased at groupon, it is on the decline, it is not as strong as it used to be. i just wonder if this is going to be part of the future of groupon. are you going to move totally away from the daily deals? >> the daily deal business has been pretty stable especially in north america. on a year over year basis our billings grew 23%. on a revenue basis, like 40%. are you talking about pretty significant growth. it is a multi-billion dollar business that's still growing on a billings level, still growing at 20%, 30%, 40%. >> this ceo role really suits you. are you like the steve jobs or michael dell -- >> i'm actually thinking this is pretty good. maybe being up here feels like my next career move. >> a question about jana

partners. 21.9 million shares. t do they have shake-up plans? >> i mean we -- i think we encourage anyone that wants to be a long-term shareholder to come in and buy the stock to buy the stock. i had no idea what their plans are. >> your last question? >> my last question would be about gross margins. sequentially i think we are up quarter to quarter but certainly down year over year and that's another great focus in addition to international. are you confident and how will that gross margin number start to improve? >> the margins have held up pretty well. especially in terms of local. it's been much more resilient than people thought. it was another big knock when we went public and for a few quarters they sequentially dropped but they went up again in q1. i think people like it as a sign of stability. margins have proven to be pretty stable in local. it is not the first issue

merchants have is what's your margin. what merchants want from us is for to us provide them a steady stream of new cuss percent and they want those customers to be good, repeat customers, loyal customers. they want a chance to bring people into their stores and make money. what's interesting is, we did a survey of almost 2 million of our customers and we found 80% of the time we're sending people either new customers who have never been there or people who haven't been there in 90 days and that's what merchants want. they want people coming in their door. >> we wouldn't mind having you down here regularly. >> it's much harder than it looks. >> we look forward to continuing to hear from you in this turnaround process. thank you. the best buy of 2013 stealth rally. look at the move on that stock. we'll hear from someone who ran the big box retailer's one-time archrival circuit city.

president obama expected to face questions about the irs scandal at a news conference soon to begin less than two hours from now. this after the ouster of the agency's acting commissione eco. >> reporter: the dramatic moment yesterday. the president took to the east room of the white house to anoun the ouster of the acting director of the irs in the wake of this burgeoning scandal that threatens to derail the president's political agenda

here in the early going of his second term. president got a little bit emotional expressing his frustration an anger at the situation. >> the misconduct that it uncovered is inexcusable. it is inexcusable and it is right to be angry about itnd a i am angry about it. i will not tolerate this kind of behavior in any agency but especially in the irs, given the power that it has and the reach that it has in all of our lives. >> reporter: but i've got to tell you, the tea party an conservative groups are up on capitol hill this morning holding a press conference, a fairly angry press conference expressing their frustration with what they call years of delays and obfuscation and harassing tactics from the irs. tea party leaders saying they aren't going to stand for it anymore. >> the irs' thuggish, discriminatory abusive schemes and tactics perfectly illustrate why we must have a government

that's constitutionally limited, meaning we must have a government small enough to manage and execute its duties competently and with integrity and most importantly, a government we, the people, can trust. >> reporter: obviously the president will mais face more questions about this later on today and more questions as congressional committees begin the hearing process. we'll see a couple of hearings early next week and key figures in this burgeoning scandal are going to be brought up to capitol hill. we'll see what they testify to, what they say, whether they testify and where the scandal goes from here, guys. >> we'll come back to this important subject throughout the morning. eamon, for the morning, thank you. making sense of walmart's earnings miss. how you should play the giant retailer now. this is cnbc. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has.

investment management combined with investment servicing. bringing the power of investments to people's lives. invested in the world. bny mellon. oh, he's a fighter alright. since aflac is helping with his expenses while he can't work, he can focus on his recovery. he doesn't have to worry so much about his mortgage, groceries, or even gas bills. kick! kick... feel it! feel it! feel it! nice work! ♪ you got it! you got it! yes! aflac's gonna help take care of his expenses. and us...we're gonna get him back in fighting shape. ♪ [ male announcer ] see what's happening behind the scenes at ducktherapy.com.

a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ so you can capture your receipts, ink for someall business purchases. and manage them online with jot, the latest app from ink.

so you can spend less time doing paperwork. and more time doing paperwork. ink from chase. so you can. the big news in the bond market. can you see the rally under way. in other words, the yield coming down. earlier we were at 1.95% for that negative philly fed number. breaking another wild swing on the 10-year.

walmart reported missteps in its revenue and current guidance also fell short of what wall street was expecting. joe feldman, managing director and senior research analyst with the pelty group. >> you know, back at that time the sales trends were fairly weak actually. they've said after the first two weeks the quarter sales were trending flattish to slightly positive so far, in may they are more positive so they had a rough patch at the start of the year, that's for sure. >> what's your recommendation to people now on the stock? what should you do? >> we see walmart as a good core long term holding. they pay a nice dividend yield of 2%. they buy back a lot of stock every year. we forecast $8 billion a year for the next several years. i see it as a nice healthy stock that's going to perform in line to slightly better than the market and you want to own it.

you can buy it on a day like today when there is a little weakness. >> what do you make of the fact their guidance fell so far short of consensus? is that concerning looking towards the rest of the year? >> i think they had a misread early on and the sales didn't pop back as well as they could have. i think that given the fact that sales trends are doing a little bit better right now an just getting off the conference call they did a q&a call with the analyst community, they actually sounded like they are getting things back in order. there is going to be some expense issues in the second quarter but they should be able to continue that productivity loop and drive solid earnings for the full year. >> are you seeing this as a walmart problem that they can solve by cutting prices or better locating like dollar general or family dollar, or when they wanted considerable headwinds on revenue do you see it as an economy wide problem? >> i think that we're going to hear from a lot of retailers in the next week that there was a tough first quarter in terms of sales. there is a lot of plaqmacro

pressures going on. i believe the weather was a bigger impact than some of the tax pressures. i think it is bigger than just walmart. walmart's core consumables business was very solid. i also think that middle to upper income consumer which is not you walmart's customer will probably be okay. stock market is a little bit better, home prices are a little bit better. that part of the economy is doing okay. it is really the lower end where you see some pressure. >> what is your outlook on the kind of threat that, say, jcpenney could pose? >> i think jcpenney has a lot of work ahead of it. walmart talked about even in apparel some of their core basics did pretty well, that they're still driving good trends there. i think that their home category has gotten a little bit better. the product at walmart looks good. i think there is threat out there and i think we'll hear from a lot of retailers this first quarter that some of the discretionary categories were a

little softer but a lot of it was weather related in our opinion. >> okay, thanks very much. a real defensive stock in many senses. the view there of walmart. let's get over to the nymex where we have some breaking news on natural gas inventories. >> yeah, the expectation is for an injection of between 93 and 97 billion cubic feet according to analysts surveyed. what we are seeing here looks like up 99. it has has come up on the board but over in the pits they've called up 99 waiting for it to come up still on the board. not seeing it just yet. nonetheless, we've had natural gas was above $4 ahead of that number. natural gas now helping to sort of ease back the rest of the complex. we've seen the rest of the energy complex, the oil and product, hauled in today at a

flat level, slightly positive with the dollar pulling back just a little bit. david? >> thanks, very much, bertha coom coombs. the google 1,000 club just keeps getting bigger after the tech giant keeps turning out product after product. is it all enough to keep the street's love affair with the stock going? we'll have the analyst with the highest price target on the street coming up. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

larry page at google is expressing his unhappiness. >> we've kind of had an offer forever. i think just this week microsoft took advantage of that by interoperating with us but not doing the reverse. this is really sad, right? and that's not the way to make progress. you need to actually have interoperation, not just people milking off one company for their own benefit. >> a utopia view from the man at the helm of google. microsoft's ceo saying google hasn't been so nice either citing the youtube app for its windows phone. that not weighing on google's shares. they reached an all-time high

for the tenth straight session this morning. google, $1,000 is now being very widely talked about. collin sebastian raised his google price tath rget to $1,02. you're called quite late to this club. >> i would say stock has certainly outperformed this year. it's been one of our firm's top picks but we see room for further up side for google. the company is leveraged to the most important growth trends in internet technology, including mobile and cloud services. stock is still far from being the most expensive internet play. >> one of the reasons it did so well yesterday was because morgan stanley suggested youtube could actually capture 6% of the worldwide television advertising spent and therefore that the company would be worth a huge amount. do you agree with that idea, collin? >> yeah. we've quantified what we think the potential impact is as well

from youtube. we think within a short period of time youtube will generate up to $5 billion in revenue for google and we already believe that we're seeing some of that shift away from tv advertising to the web and youtube is the leading video site and trends there are on fire. >> just last week youtube announced some subscription channels. yesterday we heard about the new music subscription service. google, which gives away everything for free, charging for products. when do you think we'll see the impact of some of these new businesses? the vast majority of their revenue still comes from search. >> that's a good question. obviously google still dominates in search but consider what they've achieved in a relatively short period of time with chrome browser. that surpasses internet explorer in terms of market shares. that helps costs in terms of distribution. android is doing incredibly well. they don't monetize that directly but they make a lot of money on search clicks through

android. then maps and gmail in the same respect describe more reach for google. youtube's advertising specifically for areas where we think they are already moving the needle. >> just a quick follow on the new google music service. are they late to that game? is that going to generate anything for them profit wise? >> i think that it is going to be very inconsequential for google's revenues certainly for the next few years. but as google becomes more competitive in online media, they are going to experiment with a variety of business models, including downloads and streaming subscriptions. that's what we're seeing with the music service. google has over 1 billion active users so that's a fairly robust base that they can try to tap to extend these services. >> are you concerned about growing competition from facebook and twitter who are also in the same ad business as they are? >> well, there are achilles heels here.

google doesn't bat 1,000 with every innovation. facebook's clear dominance in social is one of those areas. i'd say commerce and payments are another one where google has lagged a bit. but this is a far cry from a year ago where there were well publicized concerns about apps and people calling for the death of google search. so i think on a relatively basis google is still in a very competitive position. >> and at the heart of that, collin, you have this use of analytics to basically hoover up money in so many areas. at the moment google's market cap is $300 billion. do you think it will be bigger than exxon and apple at $400 billion? >> well, i think that there is a tremendous amount of disruption and change happening in tech nom no technology driven large lly by e internet. google is certainly at the

center of that change. in terms of other legacy companies, that's not something that should be too controversial. >> in other words you are telling me it could become the most valuable company in the world. >> i think over time that's certainly a possibility. >> good to talk to you, colin sebastian. still ahead tesla is raising capital while its ceo doubles down with an intent to purchase $100 million worth of stock. so should you jump on the tesla bandwagon and buy it now? we're back in two. [ female announcer ] what if the next big thing, isn't a thing at all? it's lots of things. all waking up.

♪ becoming part of the global phenomenon we call the internet of everything. ♪ trees will talk to networks will talk to scientists about climate change. cars will talk to road sensors will talk to stoplights about traffic efficiency. the ambulance will talk to patient records will talk to doctors about saving lives. it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. the next big thing? we're going to wake the world up. ♪ and watch, with eyes wide, as it gets to work. ♪ cisco. tomorrow starts here. dave's always wanted to do when he retires -- keep working, but for himself.

so as his financial advisor, i took a look at everything he has. the 401(k). insurance policies. even money he's invested elsewhere. we're building a retirement plan to help him launch a second career. dave's flight school. go dave. when people talk, great things can happen. so start a conversation with an advisor who's fully invested in you. wells fargo advisors. together we'll go far. wells fargo advisors. are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers.

take a look at some of the financials today. those are all in the green, so to speak. not large percentage moves up. morgan stanley and citigroup, for both their parts, are down this morning. of course we've seen financials have a nice move after an earnings season that was not widely lauded. want to bring you back to hess. this morning that proxy fight over. we talk so often here about the lack of m and a but one thing there has not been a lack of is

activism. as it driving force in many ways for transactions. in this case that remains to be seen but this has been one of the more bitterly contested battles we've seen in some time between elliott management and the management of hess. it is resolved today. elliott of course as you might expect claiming victory having 3 of its 5 nominees placed on the board along with the five new nominees that hess had put up to replace five existing directors. you'll end up with nine. er that also adding another directly. currently nine new directors on a board of 14. for its part, elliott saying look what we've managed to do. we've reconstituted a board with nine new directors. chairman and ceo role will be split. board of directors staggered. we're starting to undertake steps to reposition the upstream portfolio. they are making commitments to modify mid stream assets, increase the dividend, return capital to shareholders. they as you might anticipate are

declaring victory. for its part, mo victory today for shareholders. certainly over time but today the stock down more than 2.5%. it is a fascinating day in the bobbed markets. let's get to the cme and rick santelli for the santelli exchange. morning, rick. >> good morning, simon. indeed simon nailed it. we've had a lot of fits an starts with regard to data. just consider our last look at housing starts. we finally jumped over the million mark. today it was revised away but permits took up the slack to some extent doing the same thing. industrial production capacity utilization. shift to japan. we all know japan has been in a funk for a long time. well over a decade. and their most recent gdp number actually jumped up to 3.5%. sounds pretty good. that's on an annualized basis based on the recent quarter. but if you look closely, well, they had over 10% not that long ago well after the crisis.

think about our data. just try to think about it from a gdp standpoint. we've had some pretty high numbers since '08 but intermixed we've also had some low numbers. for the quarter we're in right now, many analysts think it will come in under 2%. what am i getting at? listen, if there's one thing i've learned about what i consider the one tool in a very large tool box that fed officials and central bankers say is filled with tools, well, the tool is basically li lickification in various forms. you know you can buy yourselves a rally in the economy. money can be put to work in jobs or in this a variety of issues. but the key is the sustainability of what the central banks are doing needs to outlive the debt or the issues or the unintended consequences it creates and therein lies the rub. whether you look at changes or

no matter who you look at, the issue becomes structural versus cyclical. i get it, sometimes you need to dip in and create deficit. but if there is something broken, you can cause things to move up, whether it is gdp. you can try to kick-start housing by trying to silence rates, but in the end the key to house something sustainability. let's switch gears. i'm going to read you something, a tweet. okay? associated press, irs, ask not what can you do for your country, ask what your country can do to you. i didn't write that. i think it is clever. a tea party person didn't write that. even though there is nothing wrong with being a conservative voice. bill gross. that was bill gross' tweet for today. the point of this is the country is not happy. now whether you look at the associated press story, whether you look at the residual issues of benghazi or specifically you look at the irs, we know a

couple of things. the country's divided. i'm not saying divided is bad. throughout our history maybe the division of government is one of our greatest assets. the tug-of-war goes on constantly. it is a good thing. it might be messy. maybe the press doesn't like it. but look towards history. it is a good thing. countries that don't have the tug and only have the pull, well, it's not the way it is supposed to be. the people have an opinion. maybe it changes, but you should always have the ability to put it forth. with the irs, a divided country, a whole wad of mistrust of obama care and the fact that the irs is going to play a role in obama care, we could debate the size or the scope. in my opinion, the issue in all of these scandals is trust, and i don't believe trust can be repaired fast enough for them to keep a proactive role in obama care. david faber, back to you. >> all right. thank you very much, mr. santelli. still ahead, we have a lot

more on the irs scandal that's been rocking washington and of course taxpayers. what's next for the irs? and the obama administration. plus, we'll hear from d.c.'s tax man, senator max baucus an representative david camp. with the new staples rewards program you get 5% back, on everything. everything.

everything. everything. everything. everything. everything? [ all ] everything? yup! with the new staples rewards program you get 5% back on everything. everything? everything. [ male announcer ] the new staples rewards program. get free shipping and 5% back on everything yousiness needs. that was easy. score planner tool with these cool sliders. this one lets us know what happens if someone checks our credit. oh.

this one lets us know what happens if we pay off our loans. yeah. what's this one do? i dunno. ♪every rose has it's thorn ♪just like every night has it's dawn♪ score planner is free to everyone. free score applies with enrollment in freecreditscore.com bret michaels slider still in beta.

tesla is soaring yet again this morning. almost 8%. the company announced a secondary offering. 2 million shares of common stocks. they are going to buy 45 million stocks from the offering. another 55 million shares in a separate deal. tesla has been on a tear this year. the stock as you see it there up over 170%. and the last week it's up over 50%. collin is an analyst. he has a buy rating on tesla. just raised his price target from 95 to 50. may need to go higher than that. let's deal with the news we got yesterday.

much of the proceeds going to pay back the u.s. government. not going into necessarily the company, right? >> well, only a little over 400 million will go back. it was really an enabling grant that they had gotten the loan. so to see them pay back the doe is a great success for the department of energy that's had a huff go with the program over the past few years with the investment and clean energy sector. >> you have a bullish scenario for the company that is quite bullish in terms of the ability to produce one day 200,000 automobiles. is that getting a bit ahead of ourselves? >> potentially. that's not the price target. we think the 200,000 vehicle run rate would equate to a 160 year target. the facility they bought in fremont is very large. and they have plenty of room for expansion. probably four times the current expansion.

they bought it for pennies on the dollar. and they've been very, very efficient with the capital in terms of developing the products and bringing it to market. >> in the meantime with the ability of hindsight you've been dragged kicking and screaming from where you were on the estimate of where the stock should be. now you're raising your price target effectively to where you are trading. >> i don't think i'm a reluctant believer. the experience gets introduced into the market. with tesla they've outperformed everyone's expectations in the time that they set out. everyone agreed it was a very short time frame. what we saw when we went to the factory and met folks on the line is the quality of the team there is phenomenal. they have folks on the line working out the processes where the cars are made and the details are taken care of.

>> it's the folks putting the doors, hanging the doors on, detailing the cars, they're managing the process. and they're doing a couple of things. they're making the car. they're refining the process for putting the car together on the line. and what we have seen them do is improve the process on an ongoing basis. >> the company has delivered. when you look at the stock, there's still these obstacles like the infrastructure. how do you factor this in? >> tesla looked at this like a third car on the household. this is a luxury item. they've made a phenomenal product. so when we look at the infrastructure issues, those are challenging. and certainly when you want to take a road trip or longer drive. i don't think that's what the use of the car is. and the scale they're delivering cars, they're trying to deliver 21,000 cars this year st relatively small amount of cars to the overall market. so this is a third car, a toy

for a lot of folks. and the challenge for them to get to the run rates is to introduce the cheaper products. enable consumers to access the products with the leasing and enable the infrastructure. so i suspect the company is going to be -- >> if they do that, you're talking 160, $170 a share. >> tenfold increase in production. >> absolutely. and the thing that is interesting about this technology, is it's very simple relative to a typical car. there's only 15 parts in the drive train. so the scaling of the manufacturing and the cost reduction is fairly simple. the challenge they have now is introducing a leasing project and enabling a wider consumer market to enable the technology. >> collin, it's a fascinating story we'll be watching for years to come. thank you. >> up next on the program. that 101 carat diamond up for auction at christi's. we showed it to you earlier in

the week. it sold for a record breaking price. you'll be pleased to know the details next. hey, so uh... what's going on here?

do you want the long or short answer? long i guess. chevy is having a big...huge, in fact...event. the-great-deals-on-our-most- fuel-efficient-lineup-ever- for-just-a-very-short-time-so- you-better-hurry-extravaganza! so what's the short answer? awesome. [ male announcer ] the chevy memorial day sale. now, combine current offers for a total cash allowance of $2,500 on a 2013 chevy malibu. offer ends june 3rd! available out there. i knew devry university would give me the skills that i needed to make one of those tech jobs mine. we teach cutting-edge engineering technology, computer information systems, networking and communications management -- the things that our students need to know in the world today. our country needs more college grads to help fill all the open technology jobs. to help meet that need, here at devry university, we're offering $4 million dollars in tech scholarships for qualified new students. learn more at devry.edu.

bob will retire when he's 153, which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage. luckily, he found someone who gave him a fresh perspective on his portfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense. from td ameritrade. and earlier this week for million dollar minute we sold

you the megadiamo diamond. naming it big mike. the giant 101 carat flawless diamond set a new world record for colorless diamonds yesterday. legendary jewelerer harry winston was the highest bidder and named it appropriately the winston legacy diamond. so how much did the megadiamond go for? the estimate was 20 to $30 million. well, harry winston snatched up the super sized rock for $26.7 million, keeping it in line with the estimate. the winston legacy item was the top item of the jewelry auction, which totalled over $102 million in sales and would look pretty good around julia boorstin's neck. >> i'll take it, simon, yeah. >> do you know winston? >> not personally.

>> thank you for the groupon exclus i. now the third hour of "squawk on the street." welcome if you're just mentioning us here's what you just missed if you're tuning in. >> welcome to "squawk on the street." here's what's happened so far. >> well, anybody who deserves both jobs is him, and i think it's a widespread feeling in wall street that he's the best leader to have. >> we've gotten much better in the operations. also we continuously reinvent where appropriate and stay the course where appropriate. so we are are hitting on all cylinde cylinders. >> we have seen from the family dollar the tax refund issue. but the tax refund issue has not affected the higher end. which is why we have the weird restoration. >> i would would seem to result in a lot more governing and

accountability. >> it makes you feel like what were the other guys doing? these are heavyweights that have come in. i think the assets are in a great deal. i think we were misunderstood. i think we caused a lot of that. we didn't manage the process of being public as well as we could have or should have. we're now intensely focused on the day-to-day business of running a great business and we'll be less -- over time. >> we are very active in the committee. in june we'll formally start our search. and we're going to be very deliberate. >> good morning. we're live here at post 9 at the new york stock exchange. let's start by getting a check on the markets. the dow, the s&p, the nasdaq. the only positive is the nasdaq.

wow, it almost makes 5,000 seem not far away. shares of coals are rising. revenue did fall short. the stock is up almost 5%. cisco is up more than that. and it suggests the networking gear makers' customers were perhaps spending more on technology. >> here we go. let's get the road map for the next hour. the ceo mike juk says he's still optimistic about the jin's future. we'll hear from a top analyst fresh off that conference call. the stocks in the s&p 500. we'll talk to the ceo of one's arch rival circuit city for more on big box retails changing

landscape. and senator max baucus and congressman trying to rewrite our tax laws. find out what they have to say about the chances of any kind of reform and the now massive irs scandal in washington. let's start with a name we have yet to mention. intel is about to kick off in 30 minutes. today is the day the chip maker's new ceo will take the reigns. john ford is live where that is going to start momentarily. >> that's right. good morning. i'll have smith in power launch to talk about the future of intel. this is the first day for brian kucinioou kzrrzanich. he will address the shareholders as ceo for the first time. looking back to 2005 we have to consider the career of the ceo of intel. it's a time when he dramatically

expanded intel's enterprise business. so on the the agenda for intel today, pretty standard stuff. reelect the board of directors. they hope to also address the shareholders for the first time. they're also going to talk about save on pay. tlths a little bit of controversy there. a number of things coming up this season is the question of will executives have to retain a certain percentage of stock? there's a prepoe sal that would make them retain 25% of stock. intel does not want to have to do that. one question they may take up is whether the president renee james may be elected to the board. it's a question i raised with the chairman a couple of weeks

ago. i'll bring you the latest on that if we find out. you get inside. thank you very much. another chip mover on the move. let's send it over to josh lip on the. >> have a look at amd. goldman sachs says this one is a sell. amd has surged 80% this year. goldman only partly off. the secular charges in the pc business that goldman estimates at 25%. goldman downgrades to see 40% downside in the stock. david, back to you. >> thank you very much, josh lip on the. shares are trading lower. the world's largest retail reporting a disappointing forecast. today it's down 2.5% today.

a senior analyst who has a market perform on wal-mart. the price target is 76 a share. almost everybody that could possibly happen. whether anniversary of leap day, tax refund check delays. should we believe them? >> well, it was a bucket of bad news. clearly a lot of headwinds. but it was a challenging quarter. and there's one-time events there. >> what did they say on the call? did they give you. >> the current conditions? >> they talked about the u.s. businesses are positive in may. it's positive and inflation is still very, very muted. that would suggest that traffic has picked up here as you get

into may. >> we can always expect that wal-mart is willing to pressure the margin of the peers is that the case here? >> we're not seeing aggressive pricing. this is the second quarter in a row where gross margins were up. they oerp the business to try to keep margins stable. you're not seeing the leverage of expenses that they would normally expect. >> collin, how far can the stock go from here in your view? >> well, as you said, we have a target price of $76. the stocks trading at 78. so we think it's fairly valued here. the stock has had a nice move. it responded very well. the underlying funnels are tepid with eps growth around 5%. >> more than 20% of sales for

publicly traded retailers are wal-mart's. nothing we can brag about. >> we certainly know the weather was bad for everybody. they are no exception. as you pointed out, the low-end consumer is more pressured by the payroll tax high. there's weak rage growth there. we're still in a world of the haves and have notes. and so they're in a tougher position. the weather was tough for everybody this quarter. >> they said it on the call. they said it in the release as well. are you a believer? >> they mentioned outside the first two weeks impacted by the tax rebate delay. the u.s. would have been roughly flat. they were pretty negative early

in february. were relatively flat in may. weather improving and we should get a bounce forward that people didn't buy when it was cold and wet. >> you're about what 13 times earnings or so, is that where you are? >> that's about right. about 13.5 times. we think it's a fair multiple for the stock. >> finally international. i guess it's always somewhat of a disappointment. characterize it for this quarter. >> i would agree. it's disappointing in that every single region they are in is negative traffic. this quarter was more disappointing. again, very specific issues. but profits were not strong. they have a persistent traffic problem. >> collin, we're going to leave

it there. >> and we're going to stick with retail. jcpenney continuing to struggle. maybe doing better on sales. it's clear the world of retail is not for the feint of heart. he'll tell us what he thinks best buy is doing wrong and right. but first, rick santelli, what are you working on for later in the program? >> simon, we truly have a special guest today. bernard connelly was one of the few people there at the very beginning. before the euro there was the european rate mechanism. the erm going all the way back to '78. he wrote it in '95. he was sacked in '96. he questioned the party line of the strategy that became the euro. bernard connelly will be our guest at the bottom of the hour. : how old is the oldest person you've known?

we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ are proven to be effective pain relievers tylenol works by blocking pain signals to your brain bayer back & body's dual action formula includes aspirin, which blocks pain at the site. try the power of bayer back & body.

circuit city, once the second largest retailer behind best buy is long gone. it filed for chapter 11 in 2008. best buy is one of the best performing stocks in the s&p 500 this year. so how has the landscape changed since that time? let's bring in jim. he's the former president and ceo of circuit city. . you were running the company as

it entered bankruptcy and began the liquidation. nonetheless, i would love your insights in terms of what you saw at the company. and share with me the challenges you perhaps see for best buy. >> well, it's interesting, dafd david. and i'm sorry i couldn't join you there in new york. when you looked back at circuit city it was one of the most tumultuous times we faced many many years. best buy, i've been very impressed with what the management team has done recently and the actions that they're starting to take. i think the board has recognized that the model was challenged and retail has dramatically changed. and that's the tremendous thing. he's engaging the management teams right now. he's making great decisions from

my outside opinion. and i think that's a very big reality today. and to the issue of samsung, a store within a store, i think it's a phenomenal opportunity. i think you're going to see good things. it's going to be a lot of work and they have to be very aggressive. so that kind of gives you my two cents. >> i'm interested in hearing it. beyond all of that is this overarching concern of showrooming. at the end of this, amazon is still going to own most of the business. they're going to get almost instant delivery. are you a believer that the challenge is one that can be met? >> well, number one, i'm a believer that showrooming is real and alive today. and it is having a big impact and with that said, i think

there's a lot of opportunities, and that issue of itself will be an opportunity for best buy. it's true with mobile technology. consumers can scan a bar code. price is transparent. it's realtime, which is phenomenal. make a click. it's a big hurdle. with that said, let me tell you about the consumer. when i was at circuit city. 70% of the consumers before they made a report went to the web first. they went for education, understanding, try to get a feel for the product. in the end they wanted to feel it before they made the determination. showrooming the traffic coming into the floor where people are taking advantage of the mobile technology and those types of things. i believe there's an opportunity. what bestbuy is going to do and they have a great baseline, but they're going to have to have

customer loyalty programs that are just bar none, catered toward the customer. make it such that you need to close that transaction at best buy, and it's better to do that. and with what they've already decided price matching and now a second phase, which is getting into the vendor showcase. ie, samsung, those are tremendous opportunities that they didn't have before. traditionally these big box retailers presented the merchandise by classification. so if you wanted to buy a tv, you bought a tv. if you wanted a sound bar, you went to the sound bar. it was a mismatch of product that was being put together. and the questions are going to be which ones, but the concept really allows not only best but

buy samsung to showcase number one, their technology, how easily it integrates. a lot are pc and ip related. there's an immigration component there. it's ease of integration. the best opportunity will be can they take the customer, stop the showrooming, get them converting, which means service will be critical, loyalty programs are going to be very, very important. and if they do it right, i think they could have a real impact. >> jim, appreciate your insights. i'm afraid we're out of time. certainly a story that bears watching. next time you come here, okay. >> thank you. >> you're very welcome. jim martin. >> i don't think that was a yes. >> no. it was. >> earlier in the program you heard from groupon's two co-ceos. coming up next on "squawk on the street," how mobile is playing a

bigger role in the company's growth strategy. plus the company's first bit coin is coming to san diego. we will see it. and bring you the details next on "squawk on the street." tdd#: 1-800-345-2550 opportunities are waiting to be found in faraway places.

tdd#: 1-800-345-2550 markets on the rise. tdd#: 1-800-345-2550 companies breaking through. tdd#: 1-800-345-2550 endless possibilities. tdd#: 1-800-345-2550 with schwab, i search the globe for the big movers. tdd#: 1-800-345-2550 i can trade in 30 different markets

tdd#: 1-800-345-2550 to help me seize opportunities, tdd#: 1-800-345-2550 potentially better returns and new ways to diversify. tdd#: 1-800-345-2550 to get an edge, i use schwab's global research. tdd#: 1-800-345-2550 they give me equity ratings on foreign stocks tdd#: 1-800-345-2550 based on things like fundamentals, tdd#: 1-800-345-2550 momentum and risk. tdd#: 1-800-345-2550 i also have access to independent firms tdd#: 1-800-345-2550 like ned davis research and economist intelligence unit. tdd#: 1-800-345-2550 and with my schwab global account, tdd#: 1-800-345-2550 i can trade directly online in top markets tdd#: 1-800-345-2550 in their local currencies-- when the markets are open. tdd#: 1-800-345-2550 plus, their global specialists are on call around the clock. tdd#: 1-800-345-2550 there's a world of winners out there. tdd#: 1-800-345-2550 and now i have a better shot at finding them. tdd#: 1-800-345-2550 now get our best global offer! tdd#: 1-800-345-2550 trade commission-free online through september 2013 tdd#: 1-800-345-2550 when you open a schwab global account. tdd#: 1-800-345-2550 call 1-800-308-1280.

just over an hour ago we had the two co-ceos, the new co-ceos of groupon on the network. they had some interesting things to say. >> they did. they're in the midst of transforming from the company from being a push service that blasts out deals to making groupon's website and app a destination. they say they're making great strides to change the.

>> a think we were misunderstood. we caused a lot of that. we didn't manage the problem. we're now focused on the day-to-day business. >> now, though the company's stock has shot up about 50% since andrew mason was fired in february, the co-ceo said it wasn't a mistake to not fire him sooner but it was time to shift the team. now they've been criticized for thousand hay handled the ipo. but here's what they said about the decision to go public. at the time we decided to go public we had thousands of employees and we had a shareholder base about to exceed the limitations that you can have. the sec subsequently changed the rules. but at the time we didn't have a huge window.

maybe six mons or so before we had the file. we picked the window we thought was right and filed. >> they say they're in no rush to find a new ceo. not kicking off the process in earnest until the summer. so i'm curious to see who they choose to replace themselves. >> do you think they really want to find someone? >> i think if they were eager to they would be moving the process more quickly. >> things were on a much more even path. but he certainly answered more of our questions. >> he did seem to be taking the lead in the consideration conversation. they wonder if they can continue the growth trajectory that we're starting to see. >> in about 30 minutes president obama is going to take questions about the irs scandal. he joins us now from washington.

john? >> david, both max baucus and chairs of senate finance committee and the chairs of house, ways and means, camps is tomorrow. and he is having as a principal witness, steve miller, who president obama fired last night. i asked him in light of the firing what exactly disease he expect to hear from steve miller and whether that's the end of the pros. here's what he said. >> well, he's still the acting commissioner until june. so he's still the guy. we have a lot of questions to answer. first, why did they target people for their political beliefs? >> you don't have confidence in the ig report that's being published? >> i don't. i think the ig report is not complete enough. it doesn't really describe why this occurred. look, the american people need to have faith that the government is working on their behalf, not targeting them.

and so i think it's serious. i think it's important that mr. miller resigns. >> what do you intend to accomplish at the hearing that you have? and a question for both of you, do you have any reason to think that what happened at the irs that the irs acknowledged was improper was directed or caused to happen by none at the white hous house. >> the key is to let the facts determine our conclusions and where this goes to. we want to, both committees, have a very solid hearing, not political. not partisan. not on behalf of one political party or the other. it's our job. the american people want more confidence in what the government does or does not do.

our job is to gain more confidence by getting solid answers and following up where the answers lead. >> do you believe that the white house was involved in this, caused it to happen? condoned it? >> i don't know. ou hearing is bipartisan as well. the ranking member together and i have called the hearing. we have together written the questions we need to get answers for. i don't know the answers. we need to get answers. and we're going to follow this where it goes. there have been repeated letters. and they've not been forthcoming. we've not had the candor that you would expect from government officials. and the american people deserve better than that. we're going to get the answers tomorrow. >> simon, we'll see tomorrow when the house, ways and means committee meets. it's as contentious a hearing as eric holder had yesterday but

certainly he's going to -- steve miller and the ig who filed the report are going to get definitely questions. >> we are going to fly. we will come back to you as we approach obama's news conference at the top of the hour. for the moment, thank you john harwood in washington. the bells are about to sound around europe. we'll have the closing details in the u.s. here next on cnbc. ♪ [ agent smith ] i've found software that intrigues me.

it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ] dave's always wanted to do when he retires -- keep working, but for himself. so as his financial advisor, i took a look at everything he has. the 401(k). insurance policies. even money he's invested elsewhere. we're building a retirement plan to help him launch a second career. dave's flight school. go dave. when people talk, great things can happen. so start a conversation with an advisor who's fully invested in you. wells fargo advisors.

the european markets are closing now. >> it's been a dreary day. we have negative inflation. deflation in belgium, germany, greece and france. exports or imports aren't doing terribly well either. that's what you are seeing today. interestingly the bond market was better supported today. you've seen the bond market retreating in italy and spain. and the yields sparking higher. partly because there was so much supply on the market. italy sold $6 billion worth of debt. spain $7 billion earlier in the day. we are beginning to turn the tide there. and partly because of the data. the bond market is rising on the yield on negative territory. one standout stock territory and that is the luxury goods maker

richemont. take a look at this. today they announced they're going to hike the dividend 8 the 2% in partly because the millionaire with 52% of the voting rights who basically formed the group as we know it today has decided that he's going to take a year off in order to travel a little bit more, do a little bit more fly fishing and has put the old guard in line there. it's interesting, david, we've seen a number of -- in europe, the guys in their 50s running big companies. notably royal butch shell. they're saying i've had enough now. i want to do something elts in life. it's prevalent. we don't see it here. he actually gave up smoking. some of his friends died of heart attacks and he was like, okay. time-out. >> we could all use a time-out

from time to time. except this man, of course. bob pisani. he never takes a time-out. here he is looking at the big board. >> the s&p just turned positive again. another high here. between 10:00 and 11:30 it always seems to turn around. it did it again. key point today, we are 12% bv above the average. that's very rare. whenever you get 8% above, you're starting to get overbought. 10% above, that's overbought. 12%, all right. we're out there now. the sectors, the continuation of the trend over the last week and a half. that's health care under pressure. that's been the trend. the sub trend underneath the suck sectors, a little bit mixed today. so, for example, banks, semiconductors defense.

that's a historic high for the defense sector. the best part of the tech area right now. modest gains. i would call this pretty darn modest. a few big leaders are much weaker. biotech stocks have been on fire. there's been a few names out there. we mentioned them many times. they've had great runs. they're seeing profits today. no particular news out there. the other one that is weak are the home builders. we saw the housing start numbers below expectations. not just multifamily, but the single family starts were below expectations. i'm the son of a home builder. what matters is starts. that's when it starts. you know you can sell it. elsewhere this the home building area, we got a nice ipo. the third ipo of the year. price is 8.7 million. the price drop was 22 to 24. it opened at $26.10.

you can see holding up pretty here. this is the third one, as i mentioned, the other two, tri-point homes went public. $17. and even though it's down because of the poor april starts number. about a month ago taylor morrison went public. they're now at $25 in change. these were the first home building companies to have gone public in ten years. and now we've had three of them in the space of a few months and they're among the leaders in the ipo moment. >> like buses. you wait around forever and then three come at once. >> i'm sorry. i didn't hear you. >> thank you very much. let's get to rick santelli in chicago. he has a very interesting guest. >> i do. and before we welcome our guest, the title of his book is the rotten heart of europe. and he was one of the first

insiders in the '70s to start touching the blocks that has now built the european currency, the euro. but he left a handful of years before the euro was brought out. why the title? why did you see things differently than all the powerful insiders who thought of the plan of integration and with the benefit and luxury of hindsight, who was right? it's the foundation on which a political unit is intended to be built. and it's rotten. it's produced a depression in much of europe. we used to think that the policymakers would never allow a return to the conditions of the early 1930s.

they have done it in greece and ireland and spain and portugal. and what's more, they claim the countries are now a success. greece is exceptional. but the point is that the union has produced this disaster. and the people who put the disaster in place hail it as a success. are they crazy? if they are, that's pretty disturbing. if they're not crazy, then the question of why they have done it is more disturbing. and why they have done it is twofold or threefold. one can look back at the history of the european union and note the claims made for it. the reality is that what the european union is about is

reversing the result as perceived by many people in europe of the second world war, that is to say of a perceived triumph of an anglo-saxon system. unfortunately that never really existed in the full form. there is a clash of civilizat n civilizations between an elitist or repressive set of institutions on the one hand, and that's essentially what the european union is. and the idea, even the never in practice or political legitimacy. of accountability, of democracy. and to enforce the harmonizing between them. let me repeat, this being the main weapon for attempting to

produce the harmonizing. even hatred between the people of the european countries sochlt that's the reason for the title. why did i take a view for so many others? at heart it's because i'm an economist. if one thinks back to when the project was being talked about, most thought it was lunatic. as it's. i'm not a politician. it's the politicians who have aims to create a kind of super state. and an ill legitimate, unaccountability, ultimately repressive super state. so i think i'm right if one looks back. >> i think many people would think you're right.

now we're almost out of time. i want to ask you one last question. we have what changes or differences in the landscape of the currency or the integration do you suspect we will find? >> i think probably we'll have the same members of the currency. there will be more attempts at the banking union. the potential ways of getting off the mess are just unthinkable. can't do it. for germany's sake. the greater revolution in germany. carry on with the present austerity, you have a cycle of deflation, depression, default. more banking crisis. more sovereign debt crisis and social and political crisis.

>> well, it's been a pleasure, an eye opener. i'm not saying i agree with all your issues. but considering your pedigree, i'm not sure i should be questioning your ultimate outcome. thank you for being our guest today. >> thank you. >> up next, bitcoin is getting an atm. it's heading to san diego where we are going to bring you for the details. that's next. [ male announcer ] it's simple physics... a body at rest tends to stay at rest... while a body in motion tends to stay in motion.

staying active can actually ease arthritis symptoms. but if you have arthritis, staying active can be difficult. prescription celebrex can help relieve arthritis pain so your body can stay in motion. because just one 200mg celebrex a day can provide 24 hour relief for many with arthritis pain and inflammation. plus, in clinical studies, celebrex is proven to improve daily physical function so moving is easier. celebrex can be taken with or without food. and it's not a narcotic. you and your doctor should balance the benefits with the risks. all prescription nsaids, like celebrex, ibuprofen, naproxen and meloxicam have the same cardiovascular warning. they all may increase the chance of heart attack or stroke, which can lead to death. this chance increases if you have heart disease or risk factors such as high blood pressure or when nsaids are taken for long periods. nsaids, like celebrex, increase the chance of serious skin or allergic reactions or stomach and intestine problems, such as bleeding and ulcers, which can occur without warning and may cause death. patients also taking aspirin and the elderly are at increased risk for stomach bleeding and ulcers.

don't take celebrex if you have bleeding in the stomach or intestine, or had an asthma attack, hives, other allergies to aspirin, nsaids or sulfonamides. get help right away if you have swelling of the face or throat, or trouble breathing. tell your doctor your medical history. and find an arthritis treatment for you. visit celebrex.com and ask your doctor about celebrex. for a body in motion.

coming up next on the half, a man that was there for the tech bust in 1989 is sounding the alarm. the traders weigh in. and one tech not named today, apple. we ask a top analyst when he thinks the stock will hit bottom and should you buy what mike ullman is selling. we debate what to do with jcpenney ahead of the earnings tonight. thank you very much. want to share a little news about a stock that's up. i can confirm that's the case as well. sometimes things go out of my head. perhaps to wage a proxy fight here. it has been a name in a potential activist play or a take-out play. no stagger for it. no poison pill.

it red lights also does not have a dedicated sales force for the storage products, meaning it that has to go through other companies. so there's a thought among some that it would be better owned by a larger company. it's been generating a good amount of free cash flow again. so there's a belief it's been somewhat inefficient in terms of the capital structure or some would say highly inefficient. we'll see what comes here if anything does. the nominating deadline was today or a few days ago. wow wouldn't have heard necessarily. but let's watch it closely. eliot, you hear it. but jesse cohn runs the technology practice. bmc recently agreed to be sold. they're in the midst of compuware that is for sale. big market cap. big name. big move. >> thank you, david.

the world's first ever bitcoin atm is coming to silicone valley. our own jane wells just sat down with the inventor of the atm which i am imagining works the most opposite way to atms. but they said about them that they don't exist. that's just with the brothers who will debut them in the silicone valley. all you need is a free app setting up a bitcoin account and some cash. >> well, you press the start button. there are three steps. you show the machine the code. i've got it. >> i have $5. >> 0429 bitcoin. not much. they say they're already getting

nibbles for five grand a piece. unline competitors taking to market, they won't license the atms, just sell them. it will be the buyer's responsibility for future regulatory issues. >> this isn't really an atm. it's not a way for you to talk to your bank. you can think of it as a vending machine in a way. here you're putting in dollar bills and getting a digital currency. >> but with the fed breech breaching accounts could demand vanish before the atms come to market? >> a lot of startups are doing everything by the book. this will be a lot of customers for the amazing technology that is emerging and a lot of people are excited about. >> well, everybody who is interested in bitcoins want to be outside the banking system. and you know a lot of controversy, but these guys are putting the bit coins where their wallets are.

i asked them how much of their net worth is tied up in the volatile currency. >> most of it. >> well, yeah. >> we night not have that much net worth. >> well, um, maybe they will have more. they plan to have the first atms ready by summer and say it's been written before. but they're not dead yet. simon and david. >> what an excellent idea of what you can do with real cash. thank you, jane. and you've seen him making his way here to post 9. we're on the exchange floor to talk about the scandal at the irs. that's next on cnbc.

how do traders using technical analysis streamline their process? at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. we like this idea so much that we've applied for a patent. i'm colin beck of fidelity investments. our integrated technical analysis is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

in ten minutes sh a news conference will start in which president obama is expected to take questions about the irs scandal. of course, the president sacking the acting commissioner of the irs amid an outcry over revelations that the agency improperly targeted tea party supporte supporters for scrutiny. let's bring in larry kudlow. an awful lot of people are very angry. in fairness, on both sides of the divide about this. >> actually, that's interesting. most of this came against conservative groups, but we are uncovering some examples of liberal groups. as rick santelli has said that basically defunding these groups and taking them out of the

election cycle, now, the fast majority were conservative groups, you can't let that happen. you know, in the usa, i guess it's like the inland revenue service. this is a very important agency and more than taxes is going to be running obama care, so that makes it. you can't have this kind of corruption and i like the fact that yesterday, the president sacked the acting director miller. he has many more people to sack, okay? that's very important. including this lois lerner. my opinion, he has to appoint a special counsel, here's my basic bottom line. i have nothing against jack lui, the treasury secretary, who oversees the irs, but he is an obama guy. i'd like to see a special counsel who's completely independent to oversee, to oversee the entire restructuring and changing and firing to get

rid of the corruption. >> applies conspiracy, certainly, there was a great deal of incompetence. do we know which it was more of? >> you know, reading the inspector general's report and reading reports about the report, gee, whiz, i don't think this was about incompetency. i think this was politically directed by a growing number of people that we are learning about. some are even pressured by senators who don't like the campaign finance laws. i think you've got the map, there have to be massive firing. >> although they went after the smallest guys, not the guys who necessarily had a lot of money. where as the big money -- >> some of these tea party groups, we had bill henesee on, some of these groups pretty darn influential. is that a secret that's a conservative group? i would think not.

you've got to play by the rules. they were making threats to these people. >> "the washington post" said today the most corrosive political scandals are the ones that feed a preexisting story line, that obama is too big government, does not respect his opponents, that the guy is basically as far as the story goes, out of control and disrespectful and this just plays to that. how does he get over that? >> there is an issue here of government overreach. and that is a criticism of obama's policies and he has to own up to that or he has to deal with that or he has to fix that. at the moment, i don't think anybody can possibly speculate and i'm not going to, that he knew what was going outside the irs. i have no evidence of that. maybe he did, but i have no evidence of that. today, i would like to see him appoint this special counsel. and i think he's got to say here's the keywords, independent, independent, independent.

you must restore the confidence in the irs, it is such an important agent issy, i'd like him to say that today. just go ahead and say that. >> we've got to fly, larry. great to see you. and tonight, larry will go live, one to one with indiana governor, mike pence. >> and a couple of tea party people, also. >> irs. >> on the irs. >> here's a shot of the white house wii the bay. president obama expected to face questions about this irs scandal in a matter of minutes and of course, we will take you there live. with the new staples rewards program you get 5% back, on everything. everything. everything. everything. everything. everything.

everything? [ all ] everything? yup! with the new staples rewards program you get 5% back on everything. everything? everything. [ male announcer ] the new staples rewards program. get free shipping and 5% back on everything your business needs. that was easy. on everything your business needs. are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers. (announcer) scottrade knows our and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online

so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company." [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ]

welcome back. some break iing news. we're still awaiting the president, but here's news involving bill daley is assisting jpmorgan in rallying support or a potential compromise in a nonbinding proposal on its approximatey to split a chairman and ceo role. i've learned he held conversations over the last week, two conversations. one last week, one early this week, with high level sources, the american federation of state, county and municipal employees who have authored the proposal on jpmorgan's proxy to

try to see if a compromise was possible. i am told by people briefed on the matter that both conversations came up empty and that no compromise could be reached. jpmorgan chase could not be reached for comment before air time, but it seems jpmorgan's trying to drum up support and trying to figure out if any deal can be reached before this deal happens and that would be a good thing. >> what would a compromise be? >> we saw a compromise in the form of what happened with goldman sachs. a similar proposal was on the table, but never made it into the proxy because goldman was able to come to a compromise in which its lead outside director came to a compromise by himself. some would tell you it's an optics issue, but unfortunately, this proposal has already made it on to jpmorgan's proxy and i'm told when david attempted to have these conversations with with senior union sources, he

was told the train had left the station. >> that's going to be an interesting vote. >> taking it very, very seriously. >> yes. all right. that's about it. as we hit noontime on the east coast, president obama about to begin his news conference. let's get the fast money halftime report back at headquarters and scott wap ner. >> thanks very much. welcome. we're following two developing stories at this hour, the rally's latest move and the president set to meet reporters in rose garden alongside the turkish prime minister. we're going to live to the white house when that event begins. president obama likely to get more questions about the unfolding irs controversy as well, but we start with the markets and a tweet that caught our attention today and should get yours, too. bill gerly sending this out