>> the s&p right now is off the drone list for the obama administration and they're in the good grace of the u.s. treasury again, putting us back in stable outlook. good for us. >> thank all of you for being with us today. appreciate it. >> a lot of fun. thanks. >> join us tomorrow, "squawk on the street" begins right now. good morning. welcome to "squawk on the street," everybody. jim cramer here. we are live at new york stock exchange. carl is on assignment. david faber is off. second best day of the year. how the futures are beginning to shoip shape up the beginning of the week. green on the screen. what about europe? how did they do on the first trading day? mostly in the red. austria, germany, netherlands higher. ireland, my people, up .1%. overnight in asia, all eyes on the nikkei in japan, nikkei

tumbled the last couple of weeks. not last night. nikkei rising almost 5%. yen getting weaker. everybody calling for japan's demise. guess what? japan officially, i guess, is back. >> expansion. expansion. >> 1.4% gdp growth, stronger than expected. see if that can continue. the demographic profile of japan, to say in one word, awful. but in the short term they'll keep printing. we will see if it occurs. our road map begins with the markets. kicking off the week after the strong rally friday that basically took back all of the losses from earlier in the week. dow component 3m a rare and exclusive interview to cnbc moments ago. find out why the ceo's confident in the second half of the year. also, mcdonald's expanding its menu. consumers are eating it up. posting stronger than expected sales for may. apple's worldwide developers conference begins in a few hours.

we are supposed to get new detail about company's i-radio pandora clone. that is enough to get apple faithful excited again? i doubt it. jim doubts it as well. stifel nicolaus saying facebook is one of the most compelling investments in the internet space. upgrading fb. stick around to find out. we call that a tease in this business. designinged to keep you listening and watching for longer. the markets, bulls looking to keep up momentum, go after friday's jobs report rally which saw the dow jump 207 points. s&p upgrading from stable. thanks to an upward revision of first quarter gdp. european markets, lower on disappointing economic data out of china. worries about a slowdown in that country. jim, facebook, apple, the nikkei, probably going to be

things that drive us today. at least right now. >> we're in the summer. that last number on friday, it gave us something to talk about. now we're in this powerful vacuum of information. i thought it was interesting, talk about japan, and then we talk about europe. how about europe in relation to europe? starting to see numbers that aren't as horrible. i know that is darning with faint praise, but you're not seeing continued drop-off in europe. maybe that is significant. >> what i -- with all due respect to traderers and investors we quote at cnbc, to hear that europe's down on china slowdown worries, but japan up nearly 5%. you're big into geography. japan and china are closer to each other than europe and china. japan also affected. to say one is not and one is, no offense to anybody out there that we've quoted, just doesn't make sense. >> shorthand drives me craze crazy. i talk about the notion people have to have a reason for everything. listen, europe's up because of japan but part of europe down

because of china. let's not be stupid. individual events occurring in individual countries. i was surprised, france industrial production, not horrendous. i think france got the worst government in europe if we ever saw a bottom in europe so important for every country, including by the way mcdonald's you'd see a turn in the markets that's rather dramatic. >> you're a former reporter. >> sure. >> reporters have a tough job. if you're running markets desk at any publication, someone says why are stocks up, you've got to have a reason. you'll quote somebody until they give you a reason. reality, maybe more buyers than sellers, maybe institution stepped in and had a block order of one dow component. that's the point. you don't have to have a reason every day why things move. >> thank you. take a look at first two days of the month. big selling. i'm thinking the big selling came from the fact a couple fed guys and some large account

wanted to get ahead of what they knew would be negative chatter from different fed people. there may not have been more to it. the market's so thin, you could get a couple of big accounts coloring everything, brian. it's the thinnest market in ages. >> apple's going to get a lot of attention. talk facebook now. >> jordan rohan, someone i've known forever, he is i think both the best at numbers -- very unusual -- and the best at timing of a stock. he's waited for facebook to come down. he does raise numbers. talking about a stronger brand presence. the monthly average users, total internet minutes, they on the conference call said they were going up. immediately every analyst called facebook a bunch of liars by saying they were going down. rohan has empirical evidence they're going up. i think rohan is the ax. the stock has been horrendous. it has been a complete disaster. unmitigated. i've blown it. but i blew it because it was

buying at 28. at 23, maybe not so bad. talked about mcdonald's and proctor & gamble engaging. when i have a ceo on, i say are you using facebook? the answer always, of course, you knucklehead. >> it gives four reasons, we hear retailers, back-to-school season, right? he cites back-to-school as part of seasonality saying, i guess because of advertising on there. >> yes. >> right? >> also a new form factor. i do a lot of work on the internet and video is what the advertisers want. i mean, a lot of the analysts, yeah, they've got a video product. anyone who is in the mix and knows the cpms, what advertisers willing to pay, willing to pay sur stanchi substantially more. >> stifel nicolaus upgrading facebook to a buy today. >> that's my friend jordan. i've known him from when i was a hedge fund manager. what i liked about jordan, he had a good sense of timing. analysts, google's running to

9/30. this is a contrary upgrade. jordan knows this stock has been hideous. i just need people from facebook not to talk because when they talk they trash their own stock and talk about great twittersel >> instagram expected to be the twitter of pictures, if you will. >> yes. >> never as big because pictures take longer to consume and post. >> exactly. >> there is a waiting time. stifel notes this waiting time for instagram month taization. what point do they figure out the special sauce of instagram and say here's how we're going to make billions off a deal that cost us a billion and a company that had zero dollars in revenue? my daughter's lemonade stand in the summer had more revenue than instagram. >> that may depend on the corner. >> and better lemonade. >> let me say, i think if you ever -- here's a trading insight. when people ask about facebook

people, they feel like they're idiots, they've all had lobot y lobotomi lobotomies, take a look at physicists they're hiring at facebook, the guys top of class, they're not as stupid as people think. >> nobody's saying they're dumb. they're very smart. instead of hiring astrofizzists why not find somebody who knows how to get jim kramer to click on pop-up when he goes to facebook. >> another network a heard a brilliant guy, brilliant, and i'm listening to him, facebook needs data ta, things they're doing will matter. google, had a great quote -- >> you know who should buy facebook? nsa. >> they've -- >> think about that. >> i've been seeing them in the headlines. i've been trying to get a quote for nsa. every time i hit it up, it doesn't -- it's not a great

stock nsa. it's more of an organization. yeah, symbol not found. >> no symbol. isn't it ironic, everything we talk about with dole and facebook and other ones is gate ta mining. i don't agree what the nsa's done. i got into a fight on the air last week. we don't like because it's being involuntarily but we voluntarily give our information up to google and facebook and what we look. jim, let's go sailing suddenly there's pop-up ads for sailboat rental companies because the cell phone company's degrgeoloc me. >> true. >> some point there's a backlash against that or we're going to the motorola star tack. >> this fellow, he was saying the biggest opponent of google could be the government. not enough regulation. google can do what it wants. i have been focusing on the nsa.

they tend not to pick the names they go after from the phone book. just a revelation about the nsa. i've never seen them target like, you know, grandmothers from dubuque. they've more focused on the bad guys. in other words, i i think that obama in his defense, and of course the british with that special relation, maybe they're not as offbase. you mentioned big brother on your show. >> well, when i went to singapore abothere was a note i the hotel room that said, in big letters the government monitors your internet usage, please choose websites accordingly. >> they do. >> let let you know at the hotel, they're watching. >> don't they cain you if you chew gum and spit it out on the sidewalk? >> we can notify people, when go to facebook, we know what they're doing with our information. >> why does anyone think anything's private. as soon as i put something on the web, i presume it's going to

"the new york times," it makes me look bad. guys that troll to make cramer look bad. >> might have been you, somebody smarter than me said about facebook that they have the world's largest unpaid workforce. right? that we are the engine of facebook and google. we are the revenue source. we're the donkeys pulling the quart. >> to quote the guy, he says that google has the largest group of saves. your people are unpaid. that's the rest of us. >> we voluntarily give out information. shares of mcdonald's, from search engines to delicious nuggets, rising in premarket. reporting global same-store sales up 2.6% above in may. mcdonald's says u.s. same-store sales beat consensus up 2.4%, led by breakfast items and a wide range of chicken options. i didn't realize there were that many options with regard to

chicken. usually it's breast, thigh, leg, wing. >> they have a potato burger in india for those who are vegetarian. >> you think they're doing a good job? trying to expand late night menu? i don't know if has to do with the legalization of marijuana. >> you're all over the map. i appreciate that. what happens when you -- i've not been in the loop in terms of the drug use. >> friends -- sources familiar with the industry tell me times you get hungry. >> get a crystal burger. mcdonald's, two companies, i mentioned this, two companies out there talking right now. a company that doesn't intinnov special all-day thing going and there's another company that is innovating the heck out of its business, coming up with new menu items. first one is apple, second is mcdonald's one's got a needle mover, that is that egg white mcmuffin.

it's like 200 calories, maybe less, it's good for you. >> mcdonald's needs to watch out. they've got to offer the value proposition that people want, right? at the end of the day, people go to mcdonald's, inspectionanexpe tastes good. if you tweet, being able to feed a family of four for 20 bucks, maybe less if you tweak to much of the formula, mcdonald's could have an issue. they need to make sure the core offering remains the same. >> they do. but i -- >> my kid -- she doesn't say dad, get a salad, dad i want mcnuggets. we'll indulge, double order fries, whatever. >> it's not panera. i like panera. that stock's been soaring. and they have a new menu item constantly. ron shake a fantastic ceo. >> everything but the stock

moving last three weeks. stock's come down ten bucks a share. >> stocks regained 100 or -- >> you wonder if it can get back to its all-time high. >> i don't know. >> just a month ago. >> people felt that this number was going to be bad and it wasn't bad. and i like this more than a pandora killer for the other guy. >> you think that's going to matter for apple? let's say they come out for viewers that aren't familiar, rumor is i-radio what they call it, it's not what apple calls it, we're calling, because they put an" i" in front of everything now. listen, i'm a music fanatic. i have a new one called mog. a great app called songs list. based on your mood what are you doing in making dinner with the girlfriend or wife. >> i'm in a bad mood. what kind of music? >> play lists for that, too. maybe nine inch nails.

john response sperns spencer b >> you've got to raise numbers. what i trade off is numbers. if you take off numbers the stock goes on. mcdonald's is the opposite. this is a number mover. i'm raising numbers mcdonald's. we've got to go. it's a message that would make a bull frown. and morgan stanley, right, chief -- >> adam parker. look that the. >> you say his name a graphic comes up. adam parker our guest. >> i'm raising my price target with adam. >> really? >> for the s&p. >> we'll tell us why his price target is below were then dex sits now. >> holy cow! >> i know people at morgan stanley. wealth managers saying are these calls by parker right? we'll challenge him a bit. another look at futures. let's look. pretty green on the screen for monday morning.

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we have the low single digit growth in first quarter. we continue to see growth and estimate 2 to 5% growth in u.s. for the year. u.s. is an important market for us. we are very strong u.s. we are strong brand equity. we have a research and development capabilities there. we have manufacturing capables. we should be able to take more market share and have a better penetration. >> that was the ceo of 3m speak exclusively to cnbc. rare interview with thulin. outpacing the dow industrial average the last three years. it's innovating. it's come up, valuation's gone up. what you think of 3m? >> i thought inge was very good. michelle saying how about the fact you disappointed last quarter? he put a little haze on the fact he was disappointed and talked

about america. it's asia that i care more. i like him. i think that the company's fabulous. it's a pro-shareholder consider. my father used to rep them in philadelphia. i don't know whether they're having better than exed. quarter now. i don't think so. >> 17 times trailing earnings, do you worry that's rich for a company like this? >> yes, yes. they have got to get more growth. the last quarter, it was not that great. i love this guy. i would have liked a better quarter from 3m before i go out there and table pound it, three points above where it reported. right? >> right. we're going to watch 3m today. rare interview with cnbc. >> just carlos slim tomorrow. she's in my favorite country, mexico. great stuff. >> carlos slim is going to be amazing. losing his title as richest man to bill gates. don't know how he's living. >> how many yachts can you water ski behind? it's like the queen elizabeth.

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there you guy. music ramped up. time for cramer's "mad dash" with red hot chile peppers and red hot alta. >> downgraded by goldman sacks. they report this week. why do i like alta? a barometer of high growth, high multiple. only star bucks and bf corp and shining in that world. it used to regain its mojo, i don't think it will. >> a harder story to tell. fannie and freddie, traders favorites right now. >> this is like crack or it's like the product thon "breaking bad." these people have been trading these things like ban chis. this one is worth zero. >> zero. >> zero. >> saying fannie and freddie are worth zero. >> they're saying, listen, we've

done more work, everything -- this has been, what, four -- look at this. there you go. another one. we don't have a telestrator here. >> you have 300%, 400% swings on the stocks in a week. >> like raindrops you know? i think that raindrop's going to beat this raindrop. be careful. i think he dut quality work. if worth zero they shouldn't be at 1.86. >> when you can throw in a crack reference talking about a fannie, it's perfect. it's a plumber's -- >> that's awful. holy cow. where's my -- where's my -- >> you know who done make jokes like that? >> you. >> carl. more sophisticated. >> you're the only one that makes jomake s jokes like that. >> all right. after friday's rally what kind of ride will the markets give us today? we are going to kick off a new trading week. more bad puns and jokes. everybody has different investment objectives,

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is so pink, radio listeners said they can see the tie. fantastic show. looking for a higher open on the first monday of the week. you are watching "squawk on the street." we're coming to you live from the financial capital of the world, the new york stock exchange. we're about to bring here, what, what time is it? >> michael mann perhaps? >> one minute to go. >> looking the banks. one of the things people have to recognize, cd repricings are not occurring. banks are making more and more money in what i regard as being the best way for a bank to make money, to turn the lights on. people keep waiting for lending. i say i don't want lending, i want printing money. when you don't raise cd rates but bond rates go up, that's exactly what they do. >> net interest margins will expand. >> increase. not only that, a bank deal today. stellar bank. oh -- you were in virginia for a

while. it's important that's the second bank we've seen in as many weeks. i've been waiting for bank yields for ages, maybe they're beginning to happen. >> we'll watch the banks. heat map looking solid on a monday morning. coming back on momentum from friday. let us ring the first opening bell of your trading week. blackstone mortgage trust, listed bxmt, ringing opening bell. you see the opening buzzer dinged at nasdaq. a lot of jumping around going on there. >> yes. one i like to talk about. dueling analysts. merrill says it's going to break up. use an interesting percentage to break up. saying it's 100% chance it's going to break up. ubs who recommended the stock in the '70s takes a victory lap, buy to hold. and the best california assets, one reason why trust owns it. i believe this monterey shale is going to be bigger than prudhoe bay. >> you do? >> yes. jerry brown has to say we've got to put people to work, let's let

the shale games begin. >> that's a big if, though. >> it is. but he's been kind of turning of late. i remember him, in 1978, he was talking about breaking instate highway system and he was against the rural electricitification grid. i don't know. those to me seem well set. >> we'll watch that. my eye on monsanto. upgraded. >> upgraded. >> to -- target to 117. >> it's all the way back. talk about stocks going back. people are worried about genetically modify. do you care if something's gmo, genetically modified. >> only my baseball players, not my food. >> you this somebody's juicing what we don't know about. >> we have one of those organ organically raised turkeys, awful. free range turkey. >> why don't you get your turkey from whole foods? >> just -- all thigh. >> it's delicious. >> i have no problem with

25-pound turkeys bulking up in the weight room. they're here to pump you up. more delicious. >> go to lifetime fitness, those turkeys. >> doesn't bother me one bit at all. we'll take a quick break. i believe we'll come back. >> why don't we -- >> we've got to keep chatting. >> makes it sound like it's not natural. >> all right. tesla -- >> i don't read barrons. >> make some time mistakes. barrons did slam tesla. i know what you think about "barron's," fine. unless the battery technology gets better the stock could go back. i think mid-50s. because the batteries are just not good enough. >> ellliman saying we'll continue to innovate, battery's going to get better. look, if you are barrons and want to make a splash, you have to attack tesla. next week sun city. remember that during our radical period? but i believe that they're surprising people.

i -- i rode one two weeks ago, i loved it. one of my friends is a partner in a major firm said i saw your piece, bought the tesla, love it. how did i know i was in the business? >> everybody that drove's a tesla model, it's the best car they've ever driven. >> it's the best. that's why we added a tesla station at inn that i own. >> selling 2 1,000 cars. a multi billion market cap for 21,000. >> you were calling it 500,000 per car. >> a cheap and easy way to value the company. >> i don't think -- >> selling 21,000 cars in less than a week. >> i've never -- i've said i'm not a buyer or seller of tesla, but when i speak to students -- i was going to speak to students this weekend -- they told their parents to buy tesla at 25.

what were parents buying in? fannie mae. >> what's interesting, i'm looking at screens here -- >> what are you doing. >> remember plug power? some of the names, ten years ago, everybody said fuel cells were the future of automotive power trains. >> yes. >> those two names are up 5%, 6% right now. i wonder if it's on the tesla bashing about the batteries. i'm speculating. >> how about the x side? there's a loser. >> filing for bankruptcy. >> that often is a bad sign. in years of being in business when i watch a stock, when the company goes bankrupt, i've never seen it go up on that. by the way, nokia, a lot of people buzzing, not me, that nokia's having a turn. >> jim, talk about nokia. >> they -- $3 stocks. >> nokia lost its market share lead in finland. nokia has a second-place mark share position in its home

country where it is the largest company and the national pride is based on nokia, which is baseed on banks of the beautiful river. >> there was an upgrade by hsbc, what i was referring to. >> i know. >> i don't want to put nokia words in either one of our mouths. >> nokia up 1%. it's a 3.58 stock. >> it was upgraded. i'm not recommending. talking about edwards life science. that was upgraded. nokia's a river in finland. and they are -- by the way the cell phone and actual internet reception is awful in finland. one of my best friends in finland. it doesn't work. you've got -- you're right like a quadruple whammy on nokia there. i will say it was upgraded. i don't know, maybe there's a turn. >> all of the people with the curled up shoes riding reindeer cutting the cell towers down. it's a crisis. >> those people are thrifty and work hard. >> leonard shares down.

morgan stanley downgrading the home builder. home builders have had a big run. >> they recommend standard pacific. a lot of home builders came up. lick. now they're trading like dot.comes. that's an illusion. lennar, stewart miller talking a good game, sat two seats from you, i would have loved to ask about the downgrade. we're in the early innings of a housing cycle rebound but the press hates it and analysts hate it. >> bob was riding the mark, upgrading names a year and a half ago. you want to hate things that have burned you. you don't want to believe it's real. >> like the phillies. supercell. >> i'm an angels fan. we're sad sack baseball teams. >> why are you so bad? stock have burned people. that's why the jordan rohan's

facebook call has some gravitas because he was not burned by facebook. >> jordan will join us in the next hour. >> is he? >> that's just in. breaking news in a good booking in the business. >> good booking. >> can we bring up bah? bah, booz allen hamilton, the contract that reportedly the one who leaked information was a contract employee for booz allen hamilton a big firm in d.c., consultancy firm, some call it a secretive company. suddenly their nape's in the headlines for the wrong reasons. >> a poor lamb that lost its way. >> what? >> next word. >> i don't know. >> ba, ba, ba, bah is the symbol. >> i was thinking ba, ba, black sheep. >> i never liked that -- it's been a not great stock, let's put it that way. the government players, the lockheed martins, man, they've

been great. smoke shows. talk about stocks that make you feel good, stocks that make you feel bad. lockheed martin's been great. >> if you are the pr in media strategy team for booz allen hamilton, you're own on the phone with crisis management experts and figuring out how to shape -- >> they're saying, guys, give us a hand. in terms of disaster. >> might be worse in a way because people knew bp, where i got gasoline. people in america don't know who booz allen ha hamilton is. >> i don't always drink defense contractors but when i do, it's a booz allen hamilton. >> bob pisani on the floor. i wore this tie in honor of you. >> mixed data out of asia. that's sort of you know china to the downside on the exports. japan to the upside on the gdp numbers here. but we've got a mixed opening here. important thing that is stock

overall are up and moved up around 910, 915 on word raiding the outlook of the u.s. debt to stable on receding crises associated with debt issue. very good news overall. they'll maintain the aa plus rating. they didn't upgrade the rating itself. but change outlook, i think psychologically is very important. theory in theory, this should keep bore rogue costs for the government lower for the u.s. indirectly an endorsement that the usa is healthier and at least the fed is doing its job better. in theory, though the stock market moved up, the bond market moved down because this is increasing talk that the fed will be tapering earlier. this is an argument for the fed to continue tapering talk earlier. but the fact that bonds moved down, interest rates up, and the stock market moved up, on good news is good news, i think is a healthier sign that the u.s. economy's healing. overall a positive development today. one thing that people are talking about over in europe,

could make things rocky this week, german constitutional court is holding hearings on whether or not the ecb's bond buying program is constitutioning. last july the market turn around when the ecb started buying in the secondary market bonds of spain and bonds of italy. this created a constitutional issue. in germany, the german courts and a lot of the -- a lot of people felt they can't do that so there's a ruling on this. they're having hearings this week, may or may not be a ruling. this could revive the issue of the eurozone. a lot of people are going to be watching that. elsewhere, everybody's talking about apple. yes, we get an ios upgrade, a refresh of the mac system, hear about i-raid yo 500 million users of itunes. 500 million itune accounts. you know how many pandora has? 30 million, 70 million.

makes sense to do iradio. one thing i've been asking for, i don't hear talk about, and that's iphone mini. where is -- where is this low cost iphone that should be competing in asia, particularly in places like china, against samsung's low cost offers out there? i heard nothing in comments i got from traders over the weekend about a low cost iphone. that's one thing that will move the dial. no matter where i looked at number on an iradio i didn't see anybody who thought this would be materially important to the ratings. i don't know how you feel about it, i want to hear about an iphone mini. that's my main interest in the apple developer's conference today. >> i want to see something that moves the needle. i misspoke on nokia. analyst has it underperform. rick santelli in chicago. rick?

>> good morning. about ten minutes after 9:00 eastern, s&p changed outlook of the u.s., if you recall i believe in august of 2011, they lowered our rating from aaa to aa plus. we've moved from negative outlook to stable. you can clearly see it showed up on the chart of ten-year note yields prop s propelling us to yield. if we open the chart up, we are making fresh moves against high yields that we haven't seen since april of 2012. open up to a year-to-date chart of boons you can see though the pattern's the same, comp goes back to february. and if we open up the chart to jgb, and this is important, je volatility was down. yes, the nikkei was up a lot. but until we either move below 80 or above 100, regarding the japanese impact on qe and many other issues, probably doesn't

dissipate. year-to-date dollar index. this chart looks iffy. kind of hanging in midair. let's look at some of the pieces. if we look the euro versus dollar -- excuse me, euro versus yen, and this is important, dollar/yen is below 100. it's dabbling with 99. euro versus the yen is still holding its significant proxy for a pivot at 130 been he see the euro's doing a bit better against some of the pieces. and if you look at the aussie dollar, it's performing in similar fashion. of course we want to monitor everything going on with abenomics. in our fed, next week we will handicap the eventual moves in unison by central banks and how investors feel about them. sully. >> santelli. thank you very much. appreciate it. let's bring in style intelligence and most of all sanity here at the new york stock exchange. >> i'm looking around for it. >> it's right there. >> good morning. >> you better bring that because

between us two, someone's going to need lipitor or a stent. >> we're having fun here. i was cracking up at the booz allen hamilton. 221, significant, we hit about 219, 220 overnight. we pulled back. we're back here. jim, remember we were talking about on friday, we said the jobs report came in and the idea was maybe this is a goldilock scenario and the ten year does what? goes to 201. >> right. >> that's not happening. so here what happens i think is interesting. just the message that we are gleaning leer which is to say it's as much as the report may have been weak enough to keep the fed in play, we then saw what the journal talking about how we might hear taper talk as soon as june. we'll hear from st. louis fed james ballard in ten minutes. he's probably going to reiterate the theme. and if the point is not that this is disaster for stocks that we're talking about, transition towards fed exit, but the talk

that we're having, i guarantee more volatility. >> it would be something if the ten year were up 100 basis point this quarter. this is an expected move. a jarring sea change. i believe it can play havoc with equities. this pace maybe doesn't freak people out but this is not what if you own stocks, you want to see. >> interesting, as well what have we been saying about the rally? don't fight the fed, right? the question is now, is the fed itself worried about the increase we've seen in stock prices this year? just wanted to put this up. a note over at citi group, kind of get together point of saying, actually, is the concern now on the fed's part partly this increase that we've seen which would change the reaction function and change what people should think about markets. take a look at his quote. he's saying the likely fed pullback from full-blown qe either suggest they are confident in the recovery's

ability to deal with fed tightening, or they're worried about irrational exuberance. you can't be gung ho about stocks unless it's the former and not the latter. >> i agree. if they have recovery, you're in the wrong stocks if you're buying bond equivalent stocks. i want to watch utilities. we've seen upgrades in utilities. if those take hold, maybe i'm wrong. you shouldn't be buying based on what you talked about. >> i love history but i'm nervous about equating history to the current situation. you had a couple of alternatives in america, bonds or stocks, maybe a couple of munis if you were rich. >> right. >> now options as an equity investor are globe. you buy u.s. dollar based echtf. because history says this, this, this, it's tough because there's so many options now. >> in the end, i feel like the people who are hiding in certain stocks are being outed by this

run. >> i will leave you with this nugget. you know what the best performing stock market this year has been? and last week? pakist pakistan. >> pakistan. >> talk about -- >> stability, exactly. >> fundamental here in the u.s. hardly the worst of it. >> tim cook said to shareholders and the tech world almost two weeks ago -- >> i think we have several more -- several more game changers in us. >> there's a big opportunity for apple to prove that. as the iphonemaker kicks off its worldwide developers conference. a data run on how the stock tends to do after conference. i have got the numbers. i can't give it to you because you won't stick around. early movers. monsanto, cme, apollo group, devry, edwards life sciences.

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conference kick off in a few hours. expected to unveil their iradio music service and compete with like of pandora. that brings us the morning's squawk on the tweet. if you are riding the soundtrack to apple's conference, what song would be at top of the play list. tweet us@@squawk street. any ideas? what would be your theme song. >> unless they get it together, fade in the darkness. >> that i tough. >> got to get it together. >> i was thinking public enemies, it takes a nation millions to hold us back. >> word up, my friend. >> louder than a bomb. >> yeah. >> cramer's all revved up he's got your number. >> coming up -- there are a lot of superman

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♪ 6 stocks in 60 seconds. we'll do it good. let's hit the 6 stocks in 60 seconds. >> this week, this weekend a conference, street monster, wit our buddies, and i said that micron's a good buy. wells fargo downgraded it. >> it's not moving the stock. maybe your word's helping it out. >> could be. >> etr. i don't know -- >> got to watch. utilities, see if they move. there we go. >> citi, reiterating something on -- >> going down, minus 10%, get out. i don't like the call. >> morgan stanley hit by opco. >> you've got to get out of it. it's premature. i understand. >> l.e.d. displays.

>> lights no longer look like weird out of space things. they're being used. i like them. >> hardest stock name to spell in all of the land wy. >> it should have been warehouses. it was up. it's a big housing play. and i was measuring the housing plays by the or downgrades. >> warehouser upgraded by rbc. >> yes. >> "mad money." look at screen. this is -- last week when target got the bid? this is a rival. so far sales force starting to look good after that. i thought -- >> what his doing? he made another deal over the one for edge spring. it wasn't as big. >> trying to take over the world. >> what are they trying to become at sales force? >> everything to everyone. please all, please all. that's benny. >> there you go. simon hobbs, a look at what's coming up on the next hour on

"squawk on the street." >> good morning. we'll have the chief u.s. equity strategist adam parkered amorgan stanley here talking about what interest rates will do the tome. seven months and nothing from apple, finally the developer's conference. can it move the stock higher? a look at buying frenzy that is chinese money in the american housing market in the second hour of "squawk on the street" monday on cnbc. [ male announcer ] with wells fargo advisors envision planning process,

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good morning. road map starts with the markets front and center. dow struggling to stay in the green. morgan stanley's adam parker will be here. painting a bearish picture of this market. he'll explain why. >> mant behind the nsa controversy is revealed. the 29-year-old booz allen contractor taking credit for the biggest leak in nsa history. >> opening the new facility, an exclusive interview with the ceo about his business. apple's developers

conference kicks off in a few hours. will iradio be enough to get investors and consumers excited? we'll get into that. first, we'll start off with markets. simon said, we're coming off a week where we had a volatility. volatility may be the theme. dow has turned negative. it's shedding 20 points. the same goes for the nasdaq and s&p 500, weaker after being pointed higher overnight. adam parker, chief u.s. equities strategist the morgan stanley. good morning. >> good morning. >> this is a market that you've been saying for quite some time appears to be either divorced from fundamentals or just trade on a higher multiple than you expected. what's happening now? is there a significant re-rating of what people expect going into the end of the year? >> 3 1/2, 4 months ago we got bullish on the market. it's good to be bullish and right for the change. i think the hall pass we've been calling it if you believe the second half of the year's going to be better nothing you learned

in the quarter will derail that dream. we have a target in the middle of the pack. around with the market trading now. it's more of what you said, we'll have more volatility in the second half of the year, particularly if we get more centered tapering. it's all multiple and qe-driven. >> we got the jobs report friday, strong but not too strong. we saw the rally in stocks, second-best day of the year. we come in today, not much follow through. is it the fact that people are realizing the federal reserve here may be pushing markets instead of the other way around? >> i don't think there's any doubt that qe has driven the multiple expansion. we analyze that and nothing we found new york economic data, no corporate results have had a higher predictive power to the s&p week over week than the fed balance sheet. taping does matter. it will matter a lot for psychologies and multiples. >> say it improves in the second half of the year and market

interest rates rise. what will that do to different parts of the stock market? i know you've done work on this. >> we have. that's a top question we've been getting from investors, what is that interest rate playbook? financials didn't do well in an environment, i and others suspect it will be different this time. i think the biggest thing will be what you saw last month, the high yielding companies in utility will continue to underperform. i should point out, our house call, yields remain lower for longer and the rotation may pause out. people may find some value now in some of the high yielding stocks that sold off and underperformed last month. >> why do you say yields will stay lower for longer. >> you're not going to see tapering in september. incoming data won't be strong enough. second daryl you may have somebody replace bernanke that may be more acometive. e. think about morgan stanley,

the biggest financial adviser in the network, almost 2 trillion under management the average age fa 58, the people want income and i think they could find it still from a basket of high yielding equities the average age at 60, also requires as they get old, health care. you say health care has never been cheaper on a relative valuation basis. why do you say that? do you love the group overall? >> that's been our top overrate sector. there's two parts. one re-rating on the r&d pipeline, you've seen that in biotech and farm ta. on the services side, potential of 40 million customers, good for distribution businesses and hospitals and possibly even the hmos. we're bullish on health care. >> if we look to other areas of the market historically, you favored china facing stocks one of them. but overnight another set of data, adam, adding to the sent

economy's not growing as strong as hoped. even if it's 7% instead of 8%, not a disaster. but certainly a problem for a lot of the stocks that have overexposure to china. >> we never have been in materials, energy, or machinery or that infrastructure side of it. it's much more been a basket of high quality u.s. equities that do have exposure to china. let's say you're right, say it's 5%, 6% gdp, that's still better than what we can get in u.s., europe, japan, uk combined. i don't think you want to own necessarily the chinese equities or that's a different debate. but the u.s. equities expose faster growth. they traded at discount to the u.s. market overall. that's part of why we tried to lean into some of the quality industrials when they get oversold. >> i want to come back to this point you made off the top which is to say, forget about earnings. what's mattered most to the market is the fed. and if that's the case, what kind of situation are we now

where we've moved perhaps from risk on, risk off, all about whether the fed would do more or less to something different, seeing the ten-year rally, seeing rotations in kind of stocks outperforming and how do you packer that back into look to where the market might be headed between now and year end. >> earnings trajectory will improve. it will the not improve as much in the consensus view. we're in the middle ground. the same thing, in my opinion, truer to the economy. post people expect a stronger second half of the year economy. it will improve. it's not as such as consensus expectation. calling the multiple will be will the fed. if they remain acometive, you have multiple expang. as soon as they start to tape, multiple will contract. that's an area to watch for your signals. >> adam, thank you very much for your time this morning. adam parker at morgan stanley. investors in apple have been starved of new products for seven months. that's a long time for apple.

now within hours they're going to unveil new products potentially at their developers conference in san francisco. john fortt is in position for that later in the day. welcoming welcome. good morning. let's put to one side whether or not we're going to get an update on siri or new apps and and concentrate on the meat the new operating system, mobile operating system, ios, which is for the iphone and for the ipads. within that, do you think there will be anything to move the needle for investors? >> well, i think it depends how you look at it. i mean, look at wwwdc. this is apple's most important, strategic show of the year. they've got developers here. teaching them things about how an's apple's going to work going forward. since they stopped launching iphones, there hasn't been that

kind of hardware news out of this that investors love to see. one of the important theme to look for, foundation of apple's old ecosystem are shifting. look at the pillars. itunes music, you tend to use ipod and iphone. ilife, the suite of politics including iphoto, imovie. one of the things steve jobs put into place to drive differentiation. the istore has been big. retail stores have allowed apple to continue to directly address consumers in a way that other electronicsmakers have not been able to. but now, right now, growth is shifting from developed markets where strategies are key and when the smartphone was growing into developing markets where most of the growth is now that we've reached above 50% penetration for smartphones in the u.s. and several other key

markets. right now we expect services will be an important area for growth for apple and others. we saw google putting the emphasis on services, a strong suit of theirs at google io a few weeks ago. johnny ive a key player. he, of course is the lead on industrial design. it's his vision that is largely shaped how all of the products look. but now he's also in charge of user interface in software. we'll see that with ios 7 today and any other products and services that apple rolls out. very unique that johnny ive right now, we're not sure what the die nam ig is and how he's working. used to work closely with steve jobs. steve jobs and he would go back and forth. now it's johnny ive, front and center. we'll see what he's come up with his teams. >> explain, jonathan ive a

british guy at apple for a long time a lot of the products that come out have been designed by him. he's been reluctant to take the stage. do you think it an environment where apple would like to turn the corner in terms of pr, he might be the man for that job? >> well, you know, johnny ive, as you mentioned, doesn't like to take the stage. he's none videos and talks about the aesthetics and kind of sits back and has a serene personality, an air that he gives off. not the stage presence that say a phil schiller might have or one in charge of a lot of the software in os engineering. i would be surprised if johnny ive spends much or any time on stage today. i would expect to see phil shiller as usually. tim cook always spends time up there as well. we'll see if there's anybody else who takes more of a

prominent role. perhaps kevin lynch. but he's so recent it might be too soon for him to take on much of a visible role. guys? >> john fortt. a long day, buddy. thank you very much. we'll see you soon. i'm a big apple user. i have noticed i've got a lot of problems with apple products i've never had. a year ago it started with icloud, delays, i couldn't sync up the ipad. i don't know if they're losing a step. >> an important pillar for apple. originally and over time it helped people make the switch. they got frustrated with pcs, with the service, they went to anal and it worked like a dream. fit not working like a dream, it's a problem. >> it's a relative statement. my pcs here are causing a huge amount of problem. for more than the apple products. >> true. >> but they cnbc laptops.

>> the hobson's choice and the simon hobbs choice. >> look at that. >> like that? call that a segue. 29-year-old government contractor claiming responsibility for that massive nsa leak. we are live in washington with details. the man who said facebook is one of the most compelling investments in the internet space now. four reasons facebook got an upgrade today. we'll bring them to you, coming up. t's get the ball rolling. in parks across the country, families are coming together to play, stay active, and enjoy the outdoors. and for the last four summers, coca-cola has asked america to choose its favorite park through our coca-cola parks contest. winning parks can receive a grant of up to $100,000. part of our goal to inspire more than three million people to rediscover the joy of being active this summer. see the difference all of us can make... together.

waze is a wrapper. right. all of america and -- >> so is jay-z. >> pointing it out. >> known as hova. another big tech acquisition may be on the horizon. google paying more than $1 billion for waze to boost the firm's navigation offering. google's fourth largest by dollar value. apple and facebook expressed interest in buying waze. appearing on "squawk on the street" in september and he spoke about competition with google maps. here's what he had to say. >> think about what wikipedia, the way they built an encyclopedia, unlike britannica which has every possible ease of information, the same thing with maps. allowing user to do it local people living in the neighborhood or solving problems that matter to them. that's why we can build a map

that's global and users everywhere in the world. the map is global but we can do it at a reasonable budget. we don't have to do that. >> i know you're a new york city, you don't drive like i do, it's community activated. there's a wreck, you find another route that's fast, you say hey accident here. watch out. >> do you use it. >> i use that one. i use a competeitor. google maps is better than apple maps. wonder if they're buying this as a defensive mechanism so others can't buy them so it might level the playing field. >> to the point we were making about apple, if they're a software and services focused company don't they need to be the most innovative doing that? first they had the stumble with apple maps period. dole will get waze. >> i'm not sure i want to subscribe to a map service that's changed by the locals before i arrive.

>> it's fantastic. >> you have to rely on them not to change the roads. they can send you on detours. >> i don't want to get pulled over or audited. some of the apps can be used to identify where the police might be sitting. >> interesting. >> with a radar gun. >> or the police might manipulate so you don't know where they are. crazy. >> true. >> illegal in our home state, kelly. as soon as i hit the virginia border i unplug he escort. escort's a radar detecter . >> show's going well, i think. >> when has software driven innovation for apple or tech companies? what apple has done during its life cycle introduced new hardware that then drove the software innovation. what's interesting about this is they're at developers conference saying we're driving innovation through services and software. i mean, show me how that's a game changer. >> see what ios is, what they

do -- >> simon, it's a bit sad, to kelly's point, when you look at a company that's created entire industries, right, the first diamond rio had the first mp3 player, created aa model that made it where people said they wouldn't be able do it. what we're getting excited but how johnny ive might flatten the edges of ios 7. instead of changing a paradigm, johnny ive may flatten up the look of the app and elimb national the skewnomics. >> wait for the man to speak. see what they do. >> a couple of hours do. >> they might come out with apple tv. it's 99 bucks, black box. no one wants to swipe their television. that's why the remote control was invented because we're lazy and don't want to get off the

couch. swipe a new channel. >> hardware. >> get me a beer while you're swiping. >> a ham sandwich as well while i'm up? >> little mustard. >> 29-year-old contractor at booz allen hamilson claiming to be the source in the biggest leak in usa history. eamon javers working the story from washington. so much focus yesterday. what have relearned? >> the question is, who is edward snoweden, the 29-year-old former intelligence contractor at booz allen hamilton who identified himself in an interview with london guardian yesterday that went out on the web late afternoon east coast time. why would he have leaked the information? he wants americans to understand exactly what their government is capable of. he fled to hong kong after revealing the situation. glenn greenwald asked him why he

had chosen hong kong. that complicates matters diplomatly. here's snoweden's answer. >> hong kong has a strong tradition of free speech. people think, china, fire wall. mainland china has restrictions on free speech but the hong kong, the people of hong kong have a long tradition of protesting in the streets, making their views known. the internet is not filtered here, no more so than any other western government. i believe that the hong kong government is actually independent in relation to a lot of other leading western governments. >> meanwhile, u.s. intelligence officials are reeling in the wake now of these disclosures. three major cleveland disclosures last week in the 48 hours leading up to the visit of the president of china to the united states to meet with president obama last week. intelligence officials describing these as massive

leaks and dangerous to the u.s. intelligence communities' ability to continue to gather information. here's james clapper on that subject yesterday. >> this is someone who, for whatever reason, has chosen to violate a sacred trust for this country. the damage that these revelations incur are huge. >> also damage being done to the reputation today of booz allen. that's the contracting firm where snowden apparently worked. they released a statement confirming knowden had been there, less than three months. they say news reports that the individual claimed to leaked classified information are shocking. and if accurate, this action represents a grave violation of the code of conduct and core values of our firm. we will work closely with our clients and authorities in their investigation of this matter. so, simon, a lot of questions

here squirrelliwirling around t incident. trying to figure out what the geoimplications are, what the intelligence implications are for the defense contractors sector in terms of companies that do this kind of work, now that there's apparently a risk of more leaks from some of the employees. a lot of employees have these classified clearances but a lot of people are surprised one man had access to so much information. >> thank you very much for that. ceo of 3m speaking exclusively to cnbc in his first television interview since taking the top job of the company last year. hear his game plan for growth at 3m next. from 3m to 3-d. the ceo ofmakerbot will talk about its new facility. everybody has different investment objectives,

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they might sell freeze frames, who knows? company's ceo increasing r&b in order to ramp up new products. kelly evans, before your time. cnbc's michelle caruso-cabrera spoke with the 3m ceo and live with the innovation center in mexico city. michelle? >> reporter: they have different areas of innovation center that they use to show customers new products involved with customers here. we're in the dental area where they're always working on new things. one of the things, a product that they now, makes it easier when you go to the dentist and need a crown. in the old days put one in your mouth, the tray, filled it with gel, took a couple of weeks, got the crown back, had to test it. the new product they have or a product that they find successful it's like a magic wand. it's a light stick that they shine at your teeth, just one pass -- >> michelle.

unfortunately we're having audio issues. we'll get michelle's audio issues fixed, of course. it's a long way. we had to string that cable from here to mexico city. we have to get audio tweaks fixed. >> from 3m to 3-d, special as access to makerbot new 50,000 square foot facility in brooklyn. the company's looking to hire new staff for its products. he's chosen to keep factories in the u.s. keep up with 3-d printing. >> here at makerbot factory we make the desktop 3-d printer. and when we started five years ago, it was a dream of ours that people would buy these. so we started a company. turns out they did. and now actually, we have announced that we're going to releasing a makerbot desktop 3-d scanner. that's the frontier. it's going to make it easier for

people to design things, make things, and get their ideas out into the world. >> now the "wall street journal" reported the privately-held company is a potential takeover target. what the ceo had to say about that. >> i have a standard answer. i can't -- i shouldn't -- and i won't comment on speculation. that's all i can say. >> can't blame him for trying. speculation of what 3-d companies or other manufactures are might be interested in makerbot. this goes back to that great documentary that you did, it was about gun control but one of the main issues on that -- in that conversation is actually using like of 3-d printing and the way in which that gets around and circumnavigates controls in place. a ton of issues here. >> the technology that we showed was older technology for 3-d printing. when i saw the gun magazines coming out of the chemical flew that a hardens up, a laser

hardens it, cooks it, creates these things and i fired an ar-15 made from plastic parts from a 3-d printer in a guy's garage. >> you're a gun guy, aren't you? >> i don't own a gun. i'm not anti-gun. i played down the middle. but i shot the gun. and i realize at that moment even with guns, 3-d printing is going to change the world. >> right. >> there are few things that i have seen that have amazed me. you aerealize in formula one, teams are bringing 3-d printers with them and at the track if something breaks, they will make a part right there. >> wow. it's a cross industry. the "financial times" today has a story about nike, adidas speed up the process and design of footwear, from months to literally weeks going through china. everything changes. >> it is. there's a day where my daughter says or kelly your kids when you

children say, i want this for christmas. you go online, buy it you print it at home. you makes blocks or toys. >> parents are like, can we have that technology now? >> one thing i worry about, this country's undergone manufacturing job losses for 30 to 40 years. >> right. >> a large part of the manufacturing middle class has been wiped out. >> right. >> i do worry that we need to balance this technology with also making sure that people still have the few manufacturing jobs that this country has to offer. >> someone's got to manufacture the 3-d printers. >> always the idea. never seems to work. >> self-generating 3-d printers. that would cut out the need for any labor to be involved. >> could you print a printer? >> apple's worldwide developers conference, a portfolio manager next on the program who called the apple sly, he was bearish just before it hit the top. the shareholder will join us who is sticking with the stock. hear what both have to say when

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welcome back. in just a few hour, tim cook will take the stage at worldwide developers conference. apple's expected to unveil a new separate operating system and iradio. the company is trading higher ahead of the big event but follows a steep sell-off over the past year. eric jackson, founder and manager partner for iron fire capital. john warned investing in apple last year when the stock was hitting all-time highs. good morning. >> good morning. >> and you know, john, let's start with you, then. didn't like apple in april 2012, warned the company was overvalued and look what's played out. are we now at a point where you're comfortable getting exposure to the name? >> well, apple is a test investment for me to assess the stock price. now that people are more skeptical of the story the stock price looks less risky than it did at the euphoric top back in

september. over the summer last year, it was hitting on all cylinder but was everybody piling into the stock. a lot of liquidity there. our analysis at this point shows that it's probably trading around fair value. for me, to start getting more interested, i'd like to see it trade off a little bit, maybe into the 300s. and at that level i think you're getting paid well to participate in the investment. >> into the 300s. you think that's likely? is that your call, then? >> that's not my call. you know it happened recently. it could happen again. anything could happen, it's the stock market. but you know, it will remain -- remain to be seen what happened at developers conference here. whether or not it could whip up enthusiasm in the investor community. >> john, what would you like to see out of the conference if what would apple have to come out with to get you to say, even at 450 or theres about, that

you're interested again? that's a good question, kelly. i'd like to see something where it signals to me there's software orr services where it could depend on recurring revenue as opposed to high level of dependency on innovation and hardware in the hardware market. to me i see innovation is risky. to be continuously dependent on innovating, it's a difficult thing to do. and to get people excited. >> i'm assuming you're still a believer, eric? >> yes, still a believer. but i think there are two big problems weighing on the stock. for the next few months at least, one is that i think apple and tim cook has doon a poor job of managing cadence of new products coming to mark, i think the stock only works when new products hit the market that people start saying wow, i guess they can innovate. >> so, seven months, i mean, nothing. then we get the developer's

conference today. let me go through ideas that g monster has. >> piper. >> 80% chance of new maps and update to siri. 80% chance of iradio and ad supported music service. 90% chance of redesigned ioo and, which is of course as you mentioned before the mobile operating system for iphones and ipads. does any of that excite you? >> they are all important. i do love the stock long term. these are the blocking and tackling must-haves that apple needs to incorporate. i don't think they're going to excite the investor community. i think the other big risk is there are rumors they'll come out with a cheaper iphone next month and they've announced a trade-in program for old iphones as well. i think investors might get spooked when the product comes out, margins are going to take another hit. i think they'll work in the long term but i'd like to see us get past that point once the product is announced and it's working to

get into the stock more. >> i'm sorry. i don't understand. after so -- after so many big losses, why given the comment tri that you've given us are you sitting in apple stock? >> i think the basic idea that the other guest mentioned off the top, there's so much pessimism now in this stock compared to a year ago is one of the reasons why i think this stock will work. and it's hard to predict when it will work. there is still innovation alive and well at apple and i think we are going to see that over the next few months. >> eric and john, thank you both. apple trading up by less than 1% today. the tin can and string has been cleaned out. let's get back to michelle caruso-cabrera. live at 3m's innovation center in mexico city, mexico. it's more clear now. toss it over to you. >> reporter: yeah. and the mice are running on the treadmill so the electricity's

working. this is where they interface with customers so they can show them products, find out what products they need. we're in the dental area right now. they're coming up with new things that they try to make it easier when you go to the dentist. remember in the old days when you got a crown you had to put one in your mouth, tray, filled with gel, uncomfortable be, maybe took a couple weeks to got a crown. nowadays you can go to dentist and they have almost a magic wand with light in it, open your mouth, aim it at the tooth, produce the number of steps so they can quickly produce a crown that is far more likely to be accurate. the dental division is the division within the division of health care which last year was a little bit more than 5 billion out of 3m's $30 billion in revenue. a company that's always trying to innovate they're also beholden to the global business cycle as well. it's one of the reasons ywhy thy announced earnings they were

below what analysted had been expecting them to make. they think it's because of electronics that were weaker in the first half of the year. ceo told us he thinks it's going to improve in the second half of the year. regionally, u.s. is improving. asia looks okay. still waiting for a turn in europe. >> western europe, i would say, have stabilized on a lower level. we do not see any strengthening but we don't see any weakness either coming. so i think in west europe you are to wait and see when the growth is coming. our plan for the year is minus one to plus 3%. and i think that's very much where it will be. >> reporter: so that's a window of 4% pretty wide. if you'd like to see the entire interview see it on cnbc.com. tune into cnbc tomorrow as well. we're going to be live from mexico again with an exclusive interview with carlos slim, now the second richest man in the

world. how does he feel about being knocked out of the first place by bill gates? back to you, kelly. >> all right. really looking forward to that interview with carlos slim. people around the world, simon, you've been talking about kpn what they're doing in europe. lots of attention on his investments along with the man himself. >> that's a big get. one an left calling facebook one of the most compelling investments in the internet sector because he believes the bad news already in and the back-to-school season is coming and facebook could get added to s&p 500le. we'll talk to the analyst next on cnbc. later, find out who's buying these million dollar luxury homes. a clue, they're coming from asia. "squawk on the street" will be right back. [ male announcer ] frequent heartburn? the choice is yours.

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right back to the cme group and rick santelli joining us with the santelli exchange. >> reporter: good morning, thank

you. on my train ride home on friday, there's always lots of traders on my commute. and most of the traders were talking un lat ilaterally about fed. is the fed going to continue quantitative easing and is abenomics going to work? about what about the volatility in japan in the discussion i didn't hear was, what's going on with part-time workers, why is there such huge unemployment rate among young people of america, age 16 to 19. how can we tell if some of the lead-up into obama care is causing job splitting. how do we handicap job splitting in the restaurant sector, that sector seems to be hiring though the retail sales has been lagging. these are the types of discussions that i remember we used to have on my train ride after a first friday of the month. so, the point of this is, that if i wanted to have a discussion about the economy, the first and

main discussion on every trading desk what most analysts write about, what most steve leasiesms surveys measure, what's the trigger? is it 6.5%? the fed says after six months of 200,000 job growth but we haven't had six months in a row of 6.5 in 14 years. what happens if things get good first and unemployment rate goes up to 8.5% because so many are coming back into the workplace? shouldn't that stop quantitative easing? instead, what we do is we put a drop on a white piece of paper and try to bet on exactly where that drop's going to go and predict what some certainty how level the paper is, how level the easel is. where's that drop going to go? it seems we're wasting a lot of effort. it's a program that we can't even handicap. just think about the news of the day. the news of the day is, the

government and the congress and the patriot act are involved in a lot of different patterns that cause mistrust. but we're supposed, on the surface of it ignore all of those issues and believe. well the same could be true for the fed programs. it's difficult to kick the tires. nobody knows exactly is it 50% the economy's improving, 80, 20, 70, 30 and the goalposts are constantly moving. the unemployment rate's dodgy issue to put any type of fed policy in terms of a trigger. i get the long and short of this is, maybe we need to hunker down and get back to the basics that when we try to predict job growth we try to look at what's go on in the economy and see if it's good or bad, not necessarily if it's money, liquidity or if it affects the economy versus actually measuring the economy. kelly, back to you. >> mr. santelli, thank you very much. stevele upgrading facebook

from buy to hole. facebook shares have bottomed and represents one of the most compelling investment ideas as far as they're concerned into the internet sector. a $29 target. if they're right it's almost 20% upside from here. jordan rohan is the analyst who made the call and joins us now. good morning to you. >> how are you? thanks for having me on. >> the central proposition here seems to be facebook is cheaper than google, as far as you're concerned, and it shouldn't be. >> yeah, facebook's growing faster. fewer believers in the long-term story of facebook so the sentiment is negative. there are several reasons why people don't believe, either they don't believe the ads work or believe the younger demo's heading off and the platform is losing engagement. i'm going to stay -- step aside of those debates now because i think there are several back half of the year catalysts that will make people have to buy the shares. i think facebook shares could be added to s&p 500 by year end or

beginning of next year. the company's doing well near-term. i think numbers this july will be good. back-to-school and holiday seasonality favor facebook the stock and even facebook the company. and overall i think it's been overly punished and the recent underperform 'of the stock compared to the internet large caps is to much. >> what does back to school matter? >> the stock's stalled -- well, a couple of things. first of all, back to school matters because people are going to look for stocks to play based on that and facebook's historical roots are in college campuses. so there will be new ad campaigns targeting people who are rearriving, coming back from summer break, coming back from camp or what have you. it's actually not as big a driver fundamentally for the company as it is for the stock. also, remember facebook reports its next quarter at the end of july. soon thereafter you have a bunch

of seasonal catalysts towards the fourth quarter and portfolio managers will start to look at 2015 earnings to project facebook's stock price instead of 2014. it's growing fast so you get a bump there. >> i don't think you like you l call. i am not feeling a lot of conviction here >> one thing i try not to too is get emotionally wrapped up so i take these things as this is the preponderance of news flow over the next six months, this stock will be positive. >> hang on. that's not what you said. you said there may be very many negatives moving forward. i am putting them to one side at the moment and focus on the positive. you defined the parameters you're calling on. >> if you go reread the note, i say these debates will continue, that it is factored into the share price and i think people have ignored the positive at lists. i am not apermeable. i don't wake up bullish every

morning. i try to call stock what is they should be and will do. on facebook in particular we had the right support of the stock the last time the stock was at 23. i think things improved since then. when the stock got to 31 we had taken down our rating. this defines the trades range. >> jordan, have a great week. >> thank you so much. >> quite a big call on facebook. >> the new york city real estate market is booming but americans are not the ones buying. we'll tell you who is and how many millions they're willing to pay for property when is we come back. you don't want to miss it. farmers presents: 15 seconds of smart. so you're worried about house fires? stop smoking. manage your wires. watch out for space heaters. clean the chimney. get one of these. cool the romance. and of course, talk to farmers. hi. ♪ we are farmers bum - pa - dum, bum - bum - bum - bum♪

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the chinese are now the second largest foreign investors in housing spending $9 billion over the past year. chinese money is driving up property prices in major cities across the country and especially right here in new york city. dolly lenz, a vice chairman and focuses on high end real estate and welcome. >> welcome. >> just how strong is chinese buying and what is it doing to the manhattan real estate market? >> i have to tell you developers

that are smart are absolutely catering to all of these chinese buyers all there, forring feng shui, the way they start, where they start numbering floors, lots of eights, anything that is of interest to a chineses buyer who is who they are catering to. >> do they have to dry that hard? sounds like there was interest without all of that. >> it is a kplet active interest. are you buying 432, 257, they're competitive, so they have to do that in order to reach them. >> how much of the market would you say the highest market, for example, is comprised of chinese money? my own personal buyers, it is more than half. the general market is more than 10% which is a lot. >> wow. >> you got individual properties you want to talk about. let's talk property number one.

the asking price is almost $20 million. >> that sold to a chinese investor, wanted to come into the market, saw it was a nice property, purchased it, and in ten seconds decided i love this property and i am buying it. >> i heard that is how it is now. as soon as it hits the market can can be broad up in hours. you can pull the over the eyes of the chinese. >> you actually cannot. >> are you sure? >> positive. the chinese buyers are the smartest, savviest most question asking buyers in the universe. traveling there 25 times and every time you have to be on top of your information in realtime. >> how much is this distorting the market for people that live in manhattan and work in manhattan. >> it is a competitive market. you're skom peting against a chinese buyser so it will push up the market. >> is it a possible.

>> it is not a bubble. >> certainly happening in other parts of the world swu. >> thank you for a look at what what chinese money is having in this market. >> apple's woorld wide development difference is kicking off in hours. we're asking you if you were writing the sound track what song would on the top of the playlist? tweet us. read read your answers bilgts later in the 140e. [ male announcer] surprise -- you're having triplets.

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breaking news. >> kelly, during the second quarter resumption period of deadline was last monday sac capital lost between 2 and $3 billion in assets, closer to 3 what i am told by multiple sources. it comes amid government investigation into allegations of insider trading and growing concerns the founder of the firm may himself be indicted although he steadfastly maintained he did nothing wrong. during the first quarter sac lost 1$1.7 billion in resumptios

on paper. in the second quarter it appears they got not double that but certainly a number closer to 3 billion. this is more or less in line with expectations, and still a big flow for a firm that only started with $6 billion in external capital and the vast majority of that unless it is replenished may be departing by the end of the year. >> thanks, kate. >> if you're just joining us this morning, here is what you missed earlier on. >> welcome to "squawk on the street." here is what's happened so far. >> we have no single loss in the quarter. we estimate 2 to 5% growth in u.s. for the new year. >> i don't see it ending the bull market now but i do think the market will digest a number of things here.

we had the huge run that will take time to digest. >> europe is up because japan and there is part of europe down because of china. let's not be stupd. there are sefrts occurring in individual countries. >> most people do not know who it is. they have low grade underneath johnny walker scotch. >> allen, tastes like coming home. >> i don't always drink defense contractors. when i do, it is allen hamilton. >> we have a target in the middle of the pack and i think it is more of what you just said, more volatility in the second half of the year, kickly if we're more central around tap ring. >> it is risky. to be continuously dependent on voting, it is still to do and gets people excited.

>> if you're just joining us, let's get a check on the markets on monday as we kick off a new week after the crazy good day on friday, of course, dow up 18 and either side of the flat line this morning so far. s&p adding almost three and the nasdaq almost 12. morgan stanley hit with a downgrade to perform and the analysts say and the stock will struggle to out perform and intel reportedly making progress to talks for the new television service. the report also notes intel has not yet closed any programming deals. >> on that note let's get to the road map for this hour. apple's developer's conference hours away. we'll talk to two droppers about the message here hoping to hear from tim kak and we have the ceo of one of the biggest players in the mortgage market and they're doing something they haven't done since the krar. mcdonald's expanding its menu and consumers eating it up.

the fast food chain posting stronger than expected sales for my. with an after our breakfast menu be help. >> in two hours tim cook will take the stage to deliver the keynote at apple's worldwide developer conference and they're hoping for new product and content announcements and we're joined by ann ackerman and both on side in san francisco. good to have both of you good morning >> good morning. >> tim, let me begin with you. what will not big story? we keep hearing about potentially new laptops and new desk operating system. what are you expecting? >> we're definitely expecting new laptops for sure. intel has a new line of cpus far more efficient in the past. we will have the lap books and it could mean thinner lap type.

expecting a new vehicle touk operating swm l and. >> and he has been in the news a bunch of reasons but large part because of the additional responsibilities, software and hardware and what do you think this ios 7 will look like? >> i think they're going to go away from the sort of kind of pop-outlook at the icons. we agree they'll go to a more flat design. ironically like on the windows phone plating system and i think it is a lot of what we're talking about today is software rather than hardware. i think the hardware is incremental upgrades. i don't think there will be a super flashy hardware gaj. >> talking about how they look has to be one of the least overwhelming things i have ever heard going into a conference and i wonder to this point of how much innovation can you drive with software and services? ultimately with apple it is a case of a new gadget, a new

piece of hardware and then the soft swirs follows. >> a lot of people get the note you can download the upgrade and they decent do it for months ar driving them to passengers and really in a long drought from apple but i am not sure they will solve that problem today. >> we'll talk to developers later in the program. part of why they have this conference is keep those guys engaged. doesn't that involve at least some small way giving a clue about the real announcements going to be this fall? >> definitely a challenge. apple needs to keep them happy and they can't tip their hat too much. they want surprises for us to consumers. there is a lot of conferences going onto teach them about new advancements but it is an avielg

of features and throughout the rest of the week giving developers a look under the hood and thet them have an opportunity to write new appears that will be out whenever the new versions . we've heard about potential watches under development. we always talk about a television some day, some how, some way. are either of those things meanly truly revolutionary product hence or announcements. is that in the of onning as well today. >> probably not today. i am watching everybody's wrist to see if i tee a suspicious looking watch. that would be a cham changer. a. >> in the meantime we're left with new macbook laptops. i guess they potentially may get thinner because of battery technology improving? >> absolutely. the new processors are said to be up to 50% more efficient when

it comes to battery life than before so in theory you could have 50% less battery and maintain it the same as prosecubefore. this year apple could make a thinner version and make a lot of people. everyone really wants a retina version of the macbook air. unfortunately we don't think we'll see that. a lot of people will be happy myself included. >> next couple hours interesting, guys. thanks so much for your insight today. we'll see you later. >> in the meantime, markets here are having a volatile morning and this follows the volatility last week as well. they're trying for a third day of gains and let's bring in the managing market with stateku & is bmo capital markets.

welcome. brian, first to you, you were on talking about a correction. is that being pushed off a little bit. >> it has been quite val tile considering the gain we saw. we think a lot of the gains are already in. it doesn't mean the market is derailed. it means stocks may be a bit ahead of themselves. if you talk to clients such as we do, you are seeing the action in the market. there is not a lot of volume. there is a lot of complacency and heading into the report people were not sure. we see if it goes higher, people will react and the next fiez of the bull market is clearly the unwind of the bull market. now we need to transition away from monetary policy towards fundamentals. lieu that process we'll see woman tilt. >> this is the biggest question, are they strong enough right

here 20 support a market with less fed support. >> i think. i think there are important fundamental changes over the last couple of months which are meaning and justify higher multiples. the first thing, the fiscal situation is better than people are expected. it is not good on any normative sense, but you're looking at a deficit 4% of gdp as opposed to 10%. >> we'll see what happens because of the goings on in washington now but they started to include all of the fas sill fuels which i think is a very important change. >> i think one of the things they will point to is when apple floated bonds to increase the dividend. i think it is a meaningful change because it broadened out the market from defensive only to something that could be somewhat dieder.

i think there are real fundamental changes. i think if you're, you're playing blind and decent know. what is is it about the negative interest rates. >> a lot of people are talking about the pain and retirees they have sustained in may because of capital losses on fixed income. is a soon to be retiree supposed to jump into the stock market now? >> we say one month is not to use a term from the bond world. we need to see a duration of losses before the pain is such that they stop believing in the asset class of choice. it is clearly bonds and bond funds and from a bet basis rur still seeing look at those in a negative sense. we believe we need to see more pain in that prayed before i

think did i have on geocaching growth. >> i think it will be funds and analysis. later on i think a retile investor will have to yump in but it is going to take quite a long time. >> and stock market volatility will push that off. if it is going to encourage more conservative investors spook into the markt. thank you very much. joining us here this morning. >> meantime one of the biggest players in the mortgage market doing something it hasn't done since the housing crash. we'll explain next. rick is tackling the markets rarity on. hey, rick. >> well, it is going to be somewhat local, $17 million a day, the underfunded mention growing in illinois, according

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take a look at the home builders. all in the red. neutral to over jpmorgan.

you can see the others with problems in the green today. >> at the same time spoking of housing, jumbo mortgages are back and chase and ever bank are getting in on the action. as it returns diana has more on the story for us. >> the short answer is yes for the last five years the jumbo nbs market has been close to nothing as lenders have been holding these loans on their books and now one of the biggest players is getting back in the name. chase mortgage, the second largest began issuing the securities this year. the ceo telling me this morning as fannie and freddie charge banks ever higher fees, private investor deals are becoming more attractive. >> we think it is important private capital gets back into the business and as guarantees and they should bring it back into the market. >> the number of loans originated in the first quarter of this year was up 15% from a year ago. the number of loans securitized

and sold by lenders to private investors was up 400%. it is still a small share of the 54 billion. that is expected to grow. we have to ask, though, are we going back to the dubious days of the boom era when some of those securities were a mishmash of high and low risk loans. >> they're great documentation, great borrowers, great credit products, great for people looking to get additional yield. >> they are still holding the majority of jumbos on the book largely because demand is trickling back. >> thank you for that. talking about housing today. when we come back, find out what

new start up j. crew ceo mickey dres her is getting behind and can mcdonald's overcome problems overseas now that mcmuffins are available any time you want. we'll be right back. 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.

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whether are you in the grocery store or a high end boutique, purchasing a razor could cost between 20 or $200. one company is trying to bridge the gap between quality and price point. harry's is a site that sells them at affordable prices. the co-founders have experience in other retail ventures. too. >> thank you for having us. >> we mention other retail ventures. parker is one you are involved in. this is an echo of that.

taking an entry where pricing is out of rack and trying to disrupt it. >> that's fair with harry's and parker we strive to give people high product product they're proud to use and do it at a reasonable price. the reason it is possible, there are markups on the traditional stuff in the categories and we can deliver the same quality product and people would love to use from high end brands at an affordable price. >> we have seen them break the monopoly with razors in particular. how are you going to differentiate yourself when there are more competitors in the space. >> we are focused on product quality and designing and manufacturing our own products. we spend nearly a year trying to source product finding the best manufacturers in the world. the blades come from germany. we design our own handles.

we think delivering the highest quality product out there and thoughtful design and branding it will make us stick out a little bit. >> how much does it cost? >> our blades are $2 or less per blade, comparable to big brands out there, so half the cost of mass morkt brands. >> for women as well. >> women have been using our razor and getting rave reviews. lots of women. >> and you complain about it. >> lots of women tend to use men's raise orz. it is an interesting opportunity to deliver a separate women's razor that is well designed and works specifically for women. we are super excited about the response by women so far. >> gillette, huge channels into the walmarts and costcos, and is that something you would try to do. >> i think today we're selling direct and only on our website

and there are two reasons. we think we can deliver a purchase experience better than waiting for ten minutes for someone to unlock the keys by selling direct and secondly we can develop strong relationships with our customers and get to know them and become a trusted force for them in a way we wouldn't if we were selling through retailers. >> i understand the likes of j. crew were pinging their e-mail list and telling people about your brand. >> we did a limited run for father's day and have gotten to know them as well and they've been fantastic partners and i think for us what we're most focused on is very slowly trying to build a customer case that loves the product and we have been loan away about the i positive response. >> why do you think the traditional makers of these goods have gotten away with these kind of pricing.

>> we won't know they're more expensive to make. how come there hasn't been a harry's before. >> it is hard to make high quality razors and some of the big brands manufacture their product inhouse and delivering really high quality product is actually challenging. i think the other thing is they sort of historically have controlled distribution channels and the nice thing about the internet is being able to sell direct to customers in a way that if we were competing on the self with mass retailers, i think would be for challenging. >> perhaps it is walmart that should be most upset. >> maybe. we like retailers as well. >> i assume you are sort of we holden to metals pricing or the cost of manufacturing. how much of that vertical is it. >> it is surprising. the cost of all the raw input relative to the cost of the razor blade itself isn't very material. the real magic that happens is the way you grind the steel to

make it played such that it is super strong at the base and thorpe at the tip. the approach you take to shotting the blades in the cartridge, it is the manufacturing know how that knows into what is differentiated versus the raw materials? we won't be printing them at home any time soon sdwr it is why we went to germ and partner with them and we learned more than we could anticipate or imagine. >> fascinating story. best of leukemia. luck. thank you. >> thank you so much for having us. >> a few minutes left to go in europe's trading day with stocks trying to hold onto small games. we'll bring you details on the close [ male announcer ] i've seen incredible things.

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. a couple minutes to go, about a minute. >> not great news out of europe today certainly on the economic front. we learned italy contracted more rapidly than we thought in the first quarter at annualized rate of 2.6%. you have the dutch central bank saying probably in the netherlands and the french was optimistic. they think fans will pull out in the second quarter albeit slightly. germany and france are half the economic power of the eurozone. the other thing, we learned the greeks unable to get a binding

tender to sell the natural gas price deeper. that's important because that was one of the conditions that the international community set on greece as part of its privatization program to get its cash on that bailout money. let's have a look at where we are. right down toe bottom greece is almost down 5%. that's really had a lot of selling there. investor sentiment very poor on that inability to sell off the natural gas operations. elsewhere sluggish with the volatility last week and the view they may have tightened slightly. throughout the session you have seen the mining stocks doing badly and what we had in china earlier on and individual stocks moving on individual news as ever. there is one thing i want to leave you with and that is to note that tomorrow we have the

start of a two-day session in the germ apple constitutional court that will grab an awful lot of headlines. effectively the two main germans at the helm of the european central bank are arguing for and against the central bank because they are considering whether or not the parliament still has or the lawmakers still have sufficient control over the liabilities that may be rapid up on behalf of german tax players both the safety net and also through the prospect of omt, this open officer to buy whatever is necessary to support the bond markets. the expectation is that the court is not going to rule against the ecb. that's probably not going to happen and they can kick it back up to the european corner which is more complicated and this is the important part at the bottom where you see the german that

will argue in favor of the nonetheless there will be significant consequences if the debate over the next two days did not go in favor of the ecb. he says no institution operating in a vehicle um and their commitment might be under some threat. it is ever so complicated. i am sorry. >> it is that. >> concentrated for about an hour today to simplify it for you. >> what's sad, we're talking about granular levels of german politics. it is where we're at right now. >> it could frighten people and the skeptics will run with it and expect loads of e-mails about how often it is. >> our simon hobbs. let's get to rick in chicago this morning. hey, rick. >> carl, when i saw at 9:15 eastern s&p removed the outlook

to stable, i was in shock. what did you think when you saw that? >> i think the market seemed to be rallying for the wrong reason. it is reminiscent of the internet bubble in 1999. you had bad news on yahoo! they would rally huge. the market fell apart. i think like friday on the employment and it is rallying for year reasons, on bad news, not for the right reasons. >> so much activity pulled forward due to dividend and tax issues and sequester at the end of 2012. s&p has to know this. we have one time tax revenues, arguably not going to be replicated and states like california will have real khawam if is. why was s&p so generous? >> i think they used an

accounting palette rather than an economic pallet. you would know every 1% tiek in a tax decreases gdp. every time you degrease by 1%, gdp goes up. >> you get a worst the first year. >> exactly. >> and it takes awhile. >> wait, wait, wait. why the nsa? >> no, i am just making kind of a tongue in cheek joke. >> you bring up a good point. we have all of these one offs, the fed doing a one off issue and nobody knows how it is going to end and a pattern of kargably deception in the ofrt. there is no outrage. till till, what happened at -- the credit rating was crushed. >> the general assembly, they went home and didn't mix

anything. >> of course they didn't. they have a super majority. they didn't want to debate the issue. >> what is the ruling part in chicago. >> democrats. >> i don't want to get there. you brought up a good point. the republicans seem to be every bit as off stride. in the end 100 billion unfounded liability and $17 million a day and we had two programs to rectify this situation. the new york area, the chicago papers talk about neither addresses the issues. >> no. they both fail. they both fail. though both move the shell down the road and so you don't really solve the, and what it is is internally -- >> where is the outrage in illinois? >> nobody feels like they can do anything about it. the states don't jerry mander that kek do anything about it and so kick an incumbent out. >> it seems the rating agencies looking the athese one time issues are an abling this game

to go on. >> thank you, jeff carter, thanks to you. >> let's get to bob with a look at what's moving at the big board. >> happy monday. take a look at the dow industrials, generally in positive territory and briefly negative early on. positive tone. i think the s&p story is one of two main stories today, revising outlook, receiving credit risk, it is good news, lowering borrowing costs, futures moved up on that, increasing talk that they may typer sooner thaern later. part of the improving situation in the united states. do know a lot of people say great rotation, not happening yet. major outflow from bond funds last week including high yield and starting to get more noticeable.

new lows on the bonds funds. good news out of japan on the gdp revisions there. it is the yen weight ebbing. homebuilding stocks in terms of sectors, either side positive or neglect. we're down on the home kders and a down wried at and the mortgage rates moving up and the homebuilding stops under perform during the rising rates. look at the rates here. you were talking about 3.4, a 30 year morning rate a month ago. now we're close to 40%. my experience is mortgage rates have to go up dramatically to turn it around. when they get to 5.5.i will start worrying. now i see starts and sales

overall. >> a lot of people trying to do the math and how much is too much pain? we'll see. >> watch about 200 basis points and from 3.4 to 5.4, in think experience that's huge? bob, thanks so much. >> we want to update you on the breaking news about half hour ago. kate kelly reporting resumptions for the fund between 2 and $3 billion in the second quarter and closer to the $3 billion mark. the number is roughly in line with expectations. first quarter resumptions came in around $1.7. >> mcdonald's seeing same sales numbers over the past yb and this menu doob the reason why. what muffins after nid piet would mean approximate the bottom line. clients are always learning more

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mcdonald's trading higher after global sales rose 2.6% in may. sales topped estimates in europe and the u.s. only air asia pacific falling shy. nicole reagan is managing director and senior restaurant analyst at piper. >> good morning. >> nicole, i wonder is this don thompson's re seng? how much of an upbeat surprise is this? >> i think the results are very

impressive, the u.s. specifically given that price was only about 1.5% of the comp, a return to positive traffic territory. >> do you give the menu credit for all of this? >> absolutely. it is new news, the fact there is new platforms they can expand on as well as customization. that's the key. >> what do you make of it? a lot of people, so many different factor that is may lead is up or down. to tie it to innovations, do you believe it is true? if so, i wonder which in particular you are driving traffic. >> they highlighted in the press release, it is only one month and the premium products seem to be doing well. snack wraps and expanding the chicken lineup so i think that does well domestically and an important part of the international side is europe. those are company-owned markets that did well, the u.s. 55%

franchised and that helps and the rest of europe is 80%. the markets where they continue to struggle, the sprooiz don't, so the skewed markets of russia in the u.s. are doing better. >> it is a good point. i wonder, to talk about asia and middle east, it is a brood swath of the world. is there a sense where in particular the weakness was coming from? >> appears as though the region they all apmea, australia the largest they didn't call out although they said others were strong so australia by exclusion is strong. seemed tore japan is weeker and fighted market for them as well. the over call exposure is less than it might be to a larger market. >> it is ant important point. it could be a big problem for them. are you saying they'll be pushed from that. >> not completely but markets

like russia or china gives them greater extent that. you do want to see the currencies hold up better. >> nicole, just wondering, given the stronger performance in the u.s. do they press ahead with slimming down the menu. >> trimming down the menu? i think the fact they have to stick with the platforms they and customization, there is a good point or the chicken or the mcwraps and it is not just the egg whiting as an example. you can have them any time of day. >> i am wondering what it will take to get you off your neutral. mcdonald's is lag, starbucks, domino's, dunkin'. >> no pun intended, i like that. it needs to earn its wau into its multiple the patrolman

rating would be neutral and better growth in other pockets like you point out. i think the last couple years it has been a hideout. i think you need more than that trading north of 16 times. i think it has to earn its way in. when we start moving forward and valuing it off 14, it does look expensive. it hit resist ants a little over $200 and finding a moment and support when it got to 92 or 94 drs. it is mof of an aevacuation call. having greater ans power you might be able to also see better werings power and more constructive. >> bringing the mk muffin, nick tell, back in after midnight, how much help is that? >> it is the key is customization and it is a big part of it.

you can get it after midnight or 2 a.m. and it is a period they could take share because they have the best locations and want most sisters open 24 hours. >> that may help close that performance gap. matt and sick nomick coal, than you for joining us. >> rob is outside the conference for the halftime report. it will be a good one. >> it certainly is, kelly. thanks so much. a developer's conference is the event everyone is watching from wall street to here in san francisco. yes, we are live for today's halftime report and with an hour to go until tim cook takes the stage we layout what's really at stake with a top analyst and also to the developer behind one of the most popular apps and an apple investor weighs in on what it will take to get the iphone and the stock back to number one. >> owe has the number one rule

taken care of, in san francisco san francisco no tie. >> i am surprised he has a jacket on. >> i took my lead from you. >> thanks very much. look forward to that in 15 minutes time. what do the developers want to hear from apple? we'll ask the guys behind one of the top apples from major league baseball and that's coming up when we come back. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

welcome back.

counting down until we hear tim cook speak today. the company expected to unveil a new operating system at a radio service widely referred to as i radio. what are the app developers hoping for? joining us live from the conference is adam rooter and chad evans, the developers, the top baseball app for the iphone, guys. welcome. >> good morning. >> good morning. >> i am curious if you can first of all tell us what apple has up its sleeve. what would you like to hear today. >> this morning we'll be attending the apple worldwide developer conference and this is going to be our fifth season attending the conference. first we were hear in 2008 and always exciting to hear what apple will announce from products and service that is we as developers didn't get to go back to new york and look to see how we can enhance products and services to make the game of baseball accessible to fans across the range of applications

including mlb.com. >> have you this incredibly successful apple which is no fall fete given it is typically a paid description at least for the at bat and 13, one time annual feel and monthly re curing fee of 2.99. you have the existing product and a ton of people using it. what would get you excited from here about taking it to the next level or working with apple on the next technology. >> i mean, what is great is every year they announce runs of new apis and tools that make it easier for us to create new experiences for fans. whether it is pass back last year or twak in 2009 when they did live streams. there is always something new and completely unexpected. it could be a sensor, ways to make the apps faster. there is a number of

possibilities. we try not to get too much into speculation. >> adam, a bunch of guys that use the app, love it for scores and highlights. if you were going to watch the yankee yankees-mariners, it is a good way to get up to speed on what you missed. a lot of guys say the itunes store is so crowded that the process of discovery is tough. it is hard to get noticed. you don't have that problem. what do you say to developers just starting out and do have that problem. >> sure. i think apple is a risk partner and do a fantastic job cure rating the star. having a fantastic op on the star takes on sun to drive prask to their app.

i think the app store and the way it is constructed, great apps do get surfaced. i think fans vote with downloads and purchases to drive those apps to the top of the top three list and top paid list and top grossing list and add that despite the fact that we have been on the store, this is our fifth season, the top grossing ad really because fans vote with their wallets and downloads and despite the size of the developer, anybody can end up on those lists by creating fantastic products that consumers want to buy. >> chad, briefly, how many of those downloads are coming from android versus ios? >> android has actually been growing but ios is still the leader right now. we're excited to see what happens over the course of the 2013 season. >> a couple hours to go. thank you both for joining us and we'll see if they can get

developers like these excited again. >> very nice. tweet time. apple is expected to unveil its called i radio service, the music service at the developers conference. we'll see. in the meantime, we're asking if you were writing the sound track to the apple conference what song would be on top of the playlist. dave rights destarapo. >> michael rates ding dong, boston dor ais dead. >> tommy tweets sitting, waiting, and wishing by jack johnson. james tweets don't you for get about me. and no-brainer, don't stop believing by journey. >> could apply in some of these situations. a major market push not enough to help internship over the weekend. we'll tell you what went wrong at the box office when we come

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actually touching an historic high this morning and analysts take thank mcdonald's for the move that told us that sales open 13 months and jumped 2.6% in may, 2.4% in the u.s. and mcdonald's seen as a barometer for the general restaurant industry giving starbucks a lift. >> great stuff, josh. thanks very much. like many internships, this one was severely under paid, the comedy a big disappointment at the box office over the weekend finishing at fourth place. the movie cost $58 million to make so it needed a push and a tie in to drive people to the theater. the surprise of the weekend, the performance of the horror film the purge. it took the top spot making more than $36 million and this one, karl, costs 3 million. >> 3 million. and made 36. >> yeah. >> nice return already. >> roi, baby. plus we have seen these with horror films repeatedly.

>> low cost production, huge audience. not hurting the internship is not hurting the stock price of google today which of course we have been looking at. 1% moving pretty good and i am impressed by the restaurant stocks, wendy's, mcdonald's, starbucks as josh mentioned and all a boost or at least on the quick service side. >> what's the story for discretionary consumer staples you either talk about market rotation away from what are traditionally early ie consumer discretionary sector or a different rate environment so it is a mystery on me. >> a lot of these names are plays on employment. if you're going to get coffee, it is typically going object on your way to a job in the morning unless are you surfing on the web for a couple of hours. >> touche. and after friday you may expect them to have support going into the new week. >> it may and lower commodity

prices as well. >> and of course the stifle upgrade of facebook has legs here. up 5%. a stock that truly had been struggling in recent weeks >> we spoke to jordan earlier and said you really like this theme. so does the market today. >> we'll get back to scott in san francisco at the apple conference. >> guys, thanks so much. welcome to the halftime report. we're live from san francisco and apple's worldwide developers conference where in less than one hour apple ceo tim cook will stay the stage in the building behind me for the highly anticipated keynote peach and one thing is certain. wall street and investors everywhere are watching very closely. over the course of the next 60 minutes real layout what's at stake with the