dislocation of the housing market is a great opportunity that you don't have to look at the news or look at the keyboard and make your own investment. >> and the biggest run in mortgage rates in 20 years in home prices and mortgage rates rise. >> yes, and history has proven it. >> thank you, tom, for being e here, and brian for being here all week and have a wonderful week, and have a great weekend, everybody. "squawk on the street" begins right now. if you just invest in the stock market, we think that you will double your money in ten years and double it again ten years from now, and we are thinking of the dow being 30,000 in ten years and 60,000 in 20 years. >> ron baron, the market legend on squawk this morning speaking from the hamptons and david is copying the look as we wrap up the month of june in the second quarter and the first half of the year. good morning and welcome to "squawk on the street," and i'm carl quintanilla with david faber and jim cramer here.

dow up, and lost some ground after the past three days of gains and the 10-year yield hovering at 1.5, and the global trading is around the end of the quarter and the last half of the year to look at what 2013 could bring for your investments. >> a black eye for blackberry this morning, and the shares are down 20% after the company's quarterly report. how can the smartphone recover or can it? >> and expectations of weakness in china, and we will break down the numbers for you. >> and jim cramer talked to some of the top ceos in the country as part of the investment series, and we will get a sneak peek of what is coming up tonight on "mad money." >> and the bulls and each average posting double-digit percentage gains and meanwhile the nasdaq and the s a&p has no had a down month since october, and the dow since november, but those streaks are in jeopardy.

the s&p needs to go 17 more to break even for the month, and the nasdaq 54 points which is a decline of 1.5%, and the dow 91%. and have not made up for the losses of the may intraday high? >> well, there is carnage and reading about how the investment grade bonds and junk bonds never recovered in the period. we are still in purgatory in the bond world, so it is difficult to ignore, because the bond world is bigger than the stock world. today does not help. it is not a fed guessing game today, but it is earnings per share, and some very big high profile misses that can reverberate throughout the stock market. >> interesting. you look at the newspapers today, and there is a fed story "above the fold" on the cover of the "times" on the cover of "ft" and the "journ"journal" and we get williams and pinolte speaking. >> well, they have refused the

housing pickup and point blank say, listen, the headline was really mortgage rate party is over. well, you know, the party is over, and call it a gain. this is a very distressing piece which basically says that all of the companies that reported that say housing is good, well, forget it. it already things have gotten weaker in the last few weeks. >> and even with the chart where it shows the 10% -- >> people have to take a deep breath, but you know what, 10-year to the rescue and maybe if the fed can talk yields down, then maybe this article reverses, but right now, there is a kind of, wow, some damage was done, so rethink, and go pack to the industrials. they have done very well historically and 94 in 2004 when the rates go up, the markets go up between 4% and 7% and thank you jpmorgan for those numbers today and we need that. >> and affordability is certainly going down, but it is

still many would argue quite affordable to buy a home with the mortgage rates moving up almost 100 basis points. >> but think about it for a second, and you say, maybe i missed it and the rates will come back dourng and in the interim why not pause and hope that the rates come back down. >> right. >> and lloyd blankfein addressed the topic of what the fed said, want t wanted to say, and tried to say when he spoke on the air yesterday. take a listen. >> i think that the market understood and the market overreacted if you parse through the words the chairman bernanke said that we will be very data-dependent, but if the data reflects growth and very much focused on unemployment specifically, then we will ease ourselves or taper ourselves out of the quantitative easing, and he said potentially by the end of the year, and not necessarily if the data does not support it. the market of course took this as, oh, my god, the first moment and an avalanche, and of course, that is not really going to be necessarily the case. >> well, you hear it from mr. blankfein, and of course, saying what we have been saying yesterday from many other people. >> and on sportscenter they

covered it. >> i would assume it. >> ben bernanke could go all of the way! no outlet got this a call. no outlet, and everybody got the kaushlgs a call, and lloyd got the call, please, ratchet it back, and back to may 21st, and no, it does not work that way. the damage is tough to put the rates back in the bottle. >> and may be tough to put the blackberry shares where they were, because the shares of the blackberry are slumping, and the smartphone maker are posting what were not as good of a quarterly results as has been moped. in fact, a loss, and the revenues below consensus, and the company has shipped 2.7 million devices in the end of the period, and that is a low end of the analysts, and they say that the market is highly additive and hard to estimate profitability or lack thereof is the key, but this is way off for even those hope ing fing for a

of progress. >> well, we had citigroup setting you up, telling you that the blackberry upside could drive a short squeeze, and no. morgan stanley expected to blackberry to beat the estimates, and no. and the ceo on the conference call echoing my buddy and pal dennis green where he said that getting very comfortable, and people are getting very co comfortable with who we are as a company, and where we fit in the market. may i hear denny green, please. oka okay. we will have an attempt to kind of do a broader thing there that failed. but this is, you know, we are who -- and remember that they are who we thought -- what is he talking about the ceo? they are getting comfortable with who we are? no, we want them comfortable with buying the produchblgtt. i'm not trying to be their friend. >> this is a sound bite from the cfo today. >> we shipped 6.8 million smartphones in the first quarter compared to 6.4 in the fourth

quarter which represented a 13% increase. approximately 40% of the devices were blackberry 10 devices. >> okay. so they left out the only number that people wanted to hear in the press release today which is sub numbers and the blackberry 10 shipments and they got around to it a couple of hours later on the call and it was a miss and now they say they won't provide the subscriber numbers. >> well, that is going forward. it is like the fifth amendment, and those who take it rarely innocent. if you don't give us the number, it tends to be a tell that the numbers are not that good. is that the kind of rash nail th -- rationale that you think? >> well, it is hard to take you seriously and i'm having a hard time with you. >> well, it is friday and i'm thinking hamptons a la ron baron and feeling it and so i wanted to come on with you guys and be relaxed. >> great interview with ron baron and it was distracting with the sweater over it. it is not my look to be candid.

>> in fact, it is not mine either. >> well, that is because you go to montauk. >> and the people on twitter love it. >> this is kelly evans and courtesy of her, and they are not getting it. >> when it comes to the looks department, you are no kelly evans, and that is not a knee sharp, but it is just an observation. >> well, it is around my shoulders and that is what the blackberry shareholders will need as they suffer a 20% decline. >> a short squeeze. >> and would you be worried about the j-bills and the suppliers here? >> well, i was on the conference call where they said tech is dead from accenture. >> well, accenture coming in below estimates, and there is some sequester talk here, and with oracle, too, and don't forget that the government is a big client of the firms, and it is starting to hit? >> well, let's see. was there a big sequester in latin america? well, europe?

did they do europe? did brazil have a sequester? i didn't know there was sequestering in brazil? >> well, other areas that the u.s. government would. >> and what happened with accenture, because do you have a gre greenland? >> no, a green sweater. >> this is a devastating conference call, and $400 million for consulting, and the consulting was 10% lower than expectations in three of the categories and said that the enterprise is not spending and this is a depressing call. it is a call that is a xanax and klonopin call. >> any other -- yeah, give me all of them. list them. >> mushrooms. >> mushrooms? >> psychedelics. >> you would need it after this conference call. >> and like john slattery in "mad men." >> yes! one of the analysts went with a "seinfeld" call, and they are downgrading and said in the ubs, as jerry seinfeld said, that is

not going to be good for anybody. it is a great restaurant, and i don't know, because i have not been there, but it is good for accenture. >> and talking about nike. they did report a fourth-quarter rise by strong demand in north america, but the futures in china were flat. 8% year over year which is up sequentially overall, but man, a goose egg in the greater china. >> look at that. you are going through the conference call, and saying, this is the greatest thing like they are the miami heat, and michael jordan and the kevin garnett, and -- without the sweater, you are helpless. and then you look at it, and you say, great! look at the mojo and ticking 63, and 64 and then in greater china currency neutral declined 30%, and then the phrase old enough for david, to do this groucho marx phrase, the duck coming down and it is a year of investment. oh, man, when you hear year of investment, you have the run. you can't hide.

a year of investment reminds me of rebuilding year. these are code in sports which means, you can just forget about it. >> it is a losing season. >> worse nan the nets taking pierce and garnet? >> hey, zack wheeler, too. >> you are playing good ball. this is a ryan howard year. look, garnett, at least a chance for a championship now, but the year of investment, no, we want a year of better than expected earnings. the year of investment, and k.o.d. kiss of death. >> kiss of death. >> to be fair, equipment was up, apparel was up, footwear is up. >> no, no! the market is being too, it is being too discerning here. everything about nike is great, and i'm being facetious, but the analysts and everybody keys on china. nike is doing everything that is great, but the stock had a little undercurrent and a whisper that china had turned. and there was a whisper by the

way, and the only general cho was beating colonel sanders and that worked. so maybe china is a little better, and china was not better. you got 2 billion shares to be sold there. >> all right. so we have nike, accenture, and blackberry -- they are all perhaps one offs, but -- >> that is why the futures are down. >> right, right. >> they are not playing the fed guessing game. >> they are not playing the earnings going up game either. >> right. if lloyd blankfein and ron baron combined, they'd be like the -- >> they'd have a beard and sweat er. i got rid of it. people on twitter, they did not watch the last show, and i don't think they got it. >> no, they tune in at 9:00. >> we have our own independent audience which is fine. >> yes, and the headlines on lacquer here. and the tone on lacquer is supposed to be better than we heard earlier in the week, but it is wise for bernanke to clarify the moves, because in his words this type of

volatility should not interfere with the moderate growth scenario that i presented. >> well, there you go, again, another guy on the bandwagon and they want the 10-year to be 2.25, but they won't get it to 2.25. >> why not? they might get it to 2.25. >> well, because i think that a lot of the people learned the lesson when the rates go -- >> they are never going back? >> well, you got your head put on a stick. >> you did. you did. in a way that perhaps none of us had anticipated. >> i don't know a sole who anticipated that. >> and the and bonds there. >> and you say, thanks for the head's up, and we will not go back to where we were, because i will lose on the total return fund. >> and the dow weather fund. >> the dow is having the best first half since the late '90s so in a word, what is the second half playbook going to be? >> industrials. yeah, they do well in this environment. you have to switch.

not necessarily new tech which is consultant, but actual industrials when you sit there and listen to some of the great industrialist, and i regard jim mcnerney from boeing one of the great industrialists, and the level of confidence is extraordinary, and you feel like, it is their time. >> and on that note, we will take a quick break and despite a volatile market for the ipos for this week, the restaurant chain noodles and company cooking up a wall street debut, and they play with the ceo who was the head of chipotle when they went public. and also, we will look at the slide in what else, but gold. and up 20 points on the dow, and looking at the implied down on the dow. on the "squawk on the street" of the last day of the first half of 2013.

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you know who has had a good week? this man right here, jim krcram scoring a big hat trick last night on "mad money." if you missed it, jim had the exclusive with the ceo of starbucks, macy's and ford as

part of the invest in america series and tonight, part two including a power panel with all three of the gentlemen. here is a system sample. >> i came back from china and i see more and more fords on the road in china. >> talk to us. >> and a increase in sales, why not? who else has bought a ford besides me? >> i bought a ford plex. >> allan knows. >> i called from the dealership. >> and was in a f-350. >> yes. >> and what about a starbucks cup hold ner in there. >> well, that is my favorite. >> these people are all salesmen for america. >> and salesmen for america and we were joking about the idea that terry has the ford, and howard is trying to get you to drink a starbucks while you are driving there, and clearly the guys are bullish on america. they are bullish on the companies. >> are they bullish overall on the larger economy both here and abroad? >> they all, maybe you need to be an optimist to be a successful ceo. >> mulally is dealing with europe all of the time. >> he said that europe has

bottomed, and that is where i got the european bottom rap, and think they allan turned around ford, and he had been very skeptical of what happened in europe, because it kind of ruined his earnings per share outlook, but all three of the gentlemen see a decent growth pattern. they are looking for a good second half, and they are not in sync with the futures today, but more in the sinync with the mart yesterday. >> does one of them have a leg up in the growth? >> well, all three in the sweet spot, but jim mcnerney of boeing the day before has the leg up on everybody, because he has a 20-year plan and remember, this is amazing and the dreamliner and trying to get one. and howard schultz is the most bullish i have seen about his institution, and a lot of it is because china will be his number one market. he has food, and this initiative for tea in india, and so many things going for his company right now, and best of all the united states. you know that stock is down. you know, you have got it, sure, but we will have round table

tonight and the panel. >> and rbc with the note aing they are testing new carbonated beverages at starbucks and sparkle drinks. >> well, three legs. there's going to be tea, and good for you drinks and going to be coffee, and this is a company that will be having, and they can open up in china as far as is the eye can see, and the tier one, two, three cities, and howard said, this is it. they are all first inning guys and it is amazing game, and doubleheader clearly, because they are going to hit the reset button. >> 15,000 and 16,000 -- how many units already? >> well sh, he thinks that this the moment where you see earnings really explode. look, why doubt this man? has he ever done anything that was not healthy? >> well, before the air -- >> and the projects in canarsie, brooklyn, you can do anything

this the country. >> he used to rumble with lloyd blankfein and the two of them used to go at it. it was rough. >> well, i have to tell you that lloyd did show himself as being, you know, willing to be a little bit more rough and tumble. they were close and grew up close to each other. absolutely right. >> and when we come back, cramer, we will help you to end this quarter on the profitable note. and then the chairman on the tobacco's foray into the ecigarettes and what a war that is. and the dow needs 94 points to break even for june. we are back in a moment. [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room.

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all right. here we are at 6:00 before the opening bell, and the last trading session of the week, and time for the "mad dash." >> and keeping in mind with the horrible accenture call, and they were down beet, but but the growth of the industry, they were minus five, david, which means they might have a uptic, but bernstein at the same time sticks by hewlett packard $29 price target and i start to thinking, well, maybe citade --s going to have the bad number. >> well, the last we spoke to meg whitman, she says they have never seen anything like this, the secular decline in the sales of personal computer, and she will cite you the replacement rate and how many are out there and how long they have been out there, and it is not everybody stopped using a pc, but one

wonders how to predict. >> well, how about the tablets and morgan stanley said they are okay, and you heard us talking about a tablet, but you need to have a tablet out there. >> and they are talking about things that are devices that are both. >> and engineering, and david, i don't want to be an owner of dell in this forecast. >> you own it at 13.35, you will get 13.65 come september or you are going to get more from carl? >> well, the risk reward -- >> if the boat goes down and you are in no-man's-land before the second vote -- >> take the money and run. total steve miller situation, don't be a space cowboy and don't be some people call me mau ree maurice. when they lower the dell computer, you say, can i risk owning this until september? why? what's the maximum that carl is

go ing the pay? carl is my buddy. >> well, the recapitalization plan that he has if he can fund it is going to go more than 13.65. it is an interesting debate. >> well, maybe on the conference call that is going to be more informatio information. >> that is the 17th and the vote is the next day. interesting by mr. carl on the one-day vote there. >> and we will be looking at hp and other stocks as we end this week, and can we rise enough, and doesn't look like enough on the dow to make it a june that we won't forget. stay with us. we are back after this. us vitamd

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[ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ ♪ some people call me the space cowboy ♪ >> yes, they do, steve miller. and the last session of trading of the second quarter in the month of june, and you are watching cnbc "squawk on the street," and opening bell in 30 seconds at the low of the month, jim, the dow was down 456 from the high. for the month, and now we are down 91 points. >> well, given the fact that the rates are ticking up today, and that is an extraordinary

comeback and take a look at the makeup of it. some of it is good, but some of it is industrials and i keep talking about boeing being the phenomenal driver of business in the country, phenomenal. >> and data on the way, and chicago pmi, and university of michigan in about 20 minutes. there's the opening bell. and a look at the s&p down here at the big board, russell investments commemorating the russell rebalance dye. >> yes. >> and at the nasdaq, noodles and company celebrating the ipo and both ceos will join us later on. >> that is exciting. >> and hard to start the session without at least peeking at blackberry, because in premarket it was down 24%, and this is a big day even for that name. >> well, we have to do a sum of the parts analysis, because there is no earnings and no reason to own it on a earning bas basis, and frankly the press release was like, you should sell us before it gets really bad. and that is over the top. >> and we can look at the chart and look at the time when the

people have the financial viability of what is still large cash position at the time, and i wonder if the trends continue, and we continue not to get real answers for the company in terms of the targets of sales will we have this conversation again? >> well, it could be a nokia situation, and you say, wow, the train left the station. they net wa the ter lao which is where they are located. i feel strongly that, that press release was, you tremble. you trembled when you read the release, because you said, maybe they don't don't have any conviction. i didn't like it. it happens now and then, and you will see a press release that changes your view. >> and it is also an added wrinkle to blame the venezuelan currency restrictions and without that, they would have been nearer. >> and colgate has some in holdings in venezuela, and it did not slow them down. >> well, that is a new one.

>> and peru, you know probably hurt them. >> the shining path. >> i knew you were going there. >> and yesterday, jim, you had strong words about bed, bath & beyond and saying that it does not get the respect it deserves? >> yeah. i have the upgrade and those guys who bet against them union and right down the block from me in jersey are making a serious mistake, because this is a company when you look at walgreens and you think that harmon is taking share, and you look at the balance sheet of bed, bath, it is withstanding a difficult day so far. >> and i want to talk about the cable providers and earlier today, we were talking about them, and two weeks ago i did a story about charter communications which control four board seats was actively pursuing the idea of consolidation, and not a big surprise at that point. i pointed to a meeting that had taken place between time warner ceo and greg mcfay the ceo of

liber liberty, and in fact, in my story, i quoted him as of saying that i put the odds of a deal as low. the stocks took off after that report two weeks ago and they have not looked back. there has been a, you know, when you are dealing with a much smaller charter, jim, trying to po ten shally figure out a way to do a bigger deal with a much larger time cable that is not interested in doing so, you have to keep stirring the pot. boy, they have been successful at doing that, and keeping the idea out there amongst the analyst community and investors who have been sent into the shares of time warner cable and charter with this idea. but time warner cable is not coming to the table at least not for a while it would seem. so that is where we leave it. it has not changed from two weeks ago. >> well, you mentioned the analysts and citi says basically, charter buying time warner cable for 120, and jeffrey says wait, 135. so the certainty of the notes. >> and the first of all the difficulty of doing a deal that

is not hostile, and that is why you see the pop of thing going on and the bankers and the management of said pursuers will say some things to try to get people to get stirred up. it is one way to do it. it is a slow bear hug, and does an activist show up at time warner cable? it is possible, but people are getting a little bit ahead of themselves, and not consolidation, and not that it is not possible, but it is not happening this weekend. >> and the first thing i saw -- >> i don't think. >> as far as i was able to discern from yesterday and speaking to the people around us, it certainly did not seem to be likely. >> people at home, david is closer to the analyst. >> and so, the story yesterday, and not saying anything different, but we will keep an eye on it. >> smoke/fire situation? >> well, there is smoke. >> that industry is underneath the radar, and they are all merging. >> the programming savings that you could have in terms of the

buying power and being able to bring the costs down are significant. there synergies and the large noella charter, but it is a difficult thing to do with time warner, and also, it is difficult to borrow in markets that are a little bit -- >> well, more difficult than before. when i hear you and listen to you a week ago and hear about ish and charlie ergen and this is feeling like the rent-a-car department, and we have a justice department that is pro, and let's take advantage of it. >> that is true, we are in a phase that his about to occur ad that is a fair point and in six months we could say, the landscape is changing. >> well, speaking of changing landscapes. pfizer is a big buyback authorization, and something that drove the whole market in the first half, jim, is that going the last? >> well, that is a great

company, but i looked at the merck spun off the health department which is dr. scholl's and coppertone, and you could add a huge amount of market cap to maybe 20% market cap and 25% to merck, because this pfizer is an inspiration to everyone. pfizer does not have a lot of growth, but great properties. pfizer is a remarkable company in that it is creeping up. everybody said once it plunged off of the lipitor cliff, nothing there, but they have to find in love with pfizer, and my charitable trust owns it, but there is value in the companies that people don't realize. and j. and j., hugely valuable. >> and the gold, where is the pain? where is the pain? there has to be somebody out there. >> i have somebody making a bold call on the gold today. >> suffering mightily, and we moved below 1,200. >> remarkable. >> and down again today, and there it is 1,195. >> we will be exploring that on

mad money, because it is either the greatest opportunity or without a doubt the worst market i have come across. >> well, it would be the worst quarter since '62. >> '62. >> what were you doing in '62? do you remember? >> i was getting a capital gains tax cut from president kennedy. larry. >> he was trading even back then. i think that -- i still stand by the gold koins and i don't want to give up on the gold coins, because i like them. i like gold bullion, and it is a free fall obviously and a butcher block situation if you buy the gold, but as a concept, i just right now it is obviously in freefall. >> right. josh lipton on the floor to help us out on a friday. josh? >> well, carl, we are kicking off the friday edging into the red here. we are pointing out that the dow and the s and the p and the nasdaq are all poised to break the two-week losing streak. you look at the s&p, it is 4% from the record high. for the week, benchmark gauge is

up 1.3%, and compared to the rest of the world, japan up 3%, and though still off 14% from the recent high. you can see germany and brazil and leaning green china with the liquidity fears and the economy is down 4% this week. and gold, and you were talking about this and for good reason, at the lowest level in three years and on track for the worst quarter on record. we are going to be watching the minors auggauyaem, and the gdx which is the gold mooiners gdx is down 50% in the last five months and the gld which tracks bullion, and all of the etfs at 14 billion, and finally the last week of the quarter and the last week of the first half, we will have a quick check of where we stand. the s&p up 13%. compare it to the veu, which is all world sux or bonds or

emerging markets now down double-digits. mr. cramer, back to you. >> thank you, josh. gold is top of the mine, and great job, justin. shifting to the bonds and the cme group in chicago. go ahead, rick santelli? >> well, it has gone through in the last couple of hours walking through the time zone in the last couple of hours and most importantly it is friday and certain digestion problem and certain honesty on the fridays that you want to pay attention to it, and if you look at the intraday, we are in the 40s, and 45, and here we are back up, and keep in mind that 250 and 300 yield and significance to the round numbers and the.25 and in this case, 2.50, but 2.61 is the high yield close for basically three months and so you want to pay attention to that spread. if you open up the chart, you

can see the dynamic that happens to be a chart starting on the close preceding the statement of the fed meeting, and it has been a wild ride. foreign exchange, and switch gears. a lot of eyes on the dollar yen, and a lot of eyes on the credit spreads and the risk trade as depicted by these currency cross trades so that the dollar is doing better, and the two-day chart shows it. if you open it up to may 1st, we are close to 100 again, and the big part of the correction has happened quickly, but if you compare the euro, and the two-day chart looks similar and b better day to today, and if you open up the yield, you can see much less develop and it is about the dollar yen. back to you, carl. >> thank you, rick santelli. moments away from the chicago pmi, and another report that you know is being sold to insiders early. eamon javers has been following this story and a lot of the related stories lately. he is in washington with the lat

late est. good morning, eamon. >> well, good morning, karm. over the next few minutes we will see the chicago pmi coming out, and that is sold early to subscribers who pay for it, and the rest of the universe sees it at 9:45, and so we will see at 9:42 if the traders who get that number are trading off of it early today like we have seen in the past, and maybe and maybe not, and then later in the half hour we will see the university of michigan consumer sentiment number which is one that they sell early to the high speed traders at 9:54:58 and it goes out to a breerd universe on a conference call at 9:55, and we have seen trading in those two seconds ahead of the broader release of the data. so two points watched closely traditionally by the markets. both of them are sold early to high paying subscribers who have a chance to trade on the information before it is available to the rest of the

public. we will watch both of those in real time here, carl. >> yes. with about 15 seconds to go here sh here, eamon. and we should point out although it is getting a lot of broad notice now, how long has this practice been going on? >> a lot of it has been going on for years, and this is one of the things that is hiding in plain sight or one of the practices that is traditionally built up in the marketplace over time. with the university of michigan number for example, we know that it is sold in advance over the course of since 2007 at least, and they have actually told me that going back to 1940s, they have had a private sponsor of the number, and it has always in fact, been sold to the private sp sponsor ahead of everybody else. >> and amon, even though the actual release is not out for 2:30, it is a miss from the action we are seeing on the action on the screen right now. >> yes, it looks like we are down a little bit here, and holding.

you can tell that after 9:42, and 9:42:40, and the traders have it for 40 seconds and they know what to do, and they are professionals and the algorithms are well written software, and so you can see that what is happening at 9:45 is not necessarily inspiring or bullish and we will have to wait and see. it is like pulling a rabbit out of the hat. we don't know what is happening, because we can't see the number yet, but somebody can see it and there is market action going on and we have to call it. >> eamon, i want to congratulate you talking about the peers talking about the release of manufacturing data, it is because of you, and this kind of reporting is breakthrough. you basically blew this story. a lot of the people on the trading floor said that everybody knew it, but the s.e.c. doesn't want this, and i know that it is difficult to get from the s.e.c., but i want to congratulate you for changing and bringing back a level playing field for the individual

inv investor. >> yes, thank you, jim. what we reported yesterday is that the s.e.c. was launching an investigation looking at a relationship between thomson reuters and the institute that puts out the manufacturing number. we reported earlier in the month weird trading 15 milliseconds ahead of the manufacturing number, because thompson reuters had accidentally released it to the high-paying clients and then the s.e.c. following up and asking for the contract asking for the relationship between ism and thomson reuters, and they did not reveal to the s.e.c. how much thompson reuters is paying for the manufacturing number in advance. >> all right. i think that this is a big story. >> yeah. you have a problem with this, jim, don't you? >> well, i do. and the government does, too, because the spirit of the government is fair and full disclosure and this is not.

if i were the lawyer for thompson reuters i would be saying, look, we make a lot of money on this, and we don't want the s.e.c. to be the enemy, because it can hurt us in a competitive situation. they are going to reverse this. they are going to reverse the way they do this. >> and with that in mind, we will go the rick santelli to see if the number is just as weak as we think. >> 51.6 coincidentally, it seems to be. >> i dwhaesz we all kind of used to it. jerry next to me, every number, it must be good or bad and he is no soothsayer. we do see that the market is moving a bit here as it should, but i should say that moved with the e.d., and this is an important level. keep in mind it was not that many months ago that it was actually the april read that was under 50 and that is the first time since september of '09 under 50. so, yeah, we go from 58.7 to

51.6, and that is going to raise some eyebrows. and we want to pay also particularly close attention to another number coming out that's under eamon's scrutiny and that is the university of michigan confidence shortly. back to you guys. >> thank you, rick. 51.6 on the chicago pmi looking for 55. here is what is coming up next on "squawk on the street." >> announcer: coming up, we follow the beat of the drum, and the one beating them is jim cramer playing the song "six stocks in 60 seconds." "squawk on the street" will be right back. in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through,

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limited partnership, and no, sell it. >> rejenron? >> well, it is a paradigm shift barkley's says on how to deal with the allergic diseases, and this is strong, do not sell it. >> and facebook? >> topeka says that the admiral cruise is good and remember it is a quick stock for the quarter and the year, and i do not expect it to take off, but this is a positive note. >> and you call biogen an end of the quarter gift? >> well, they have skrimts on the new m.s. drugs and sharply better than expected and according to deutsche bank and i love that it came out today. >> and what about goldman unilever? >> well, i like it. >> and what about kb homes? >> well, the mortgage rates, i like it. >> and anything tonight?

>> well, in the gloom of the daily, go listen to the people tonight, and they will tell you why ron baron could be right that the market could go up big multiple years and the optimism and the faith is sterling. i was quite, i'm going the say it, i was blown away by these guys. >> and all of them togethers and i don't know if i have ever seen that on cnbc. >> they were all friends with each other, and i said in the green room, would you all do this, and they said, yes, we are all friends. >> so maybe there is an echelon that people should focus on. >> and "mad money" tonight at 6:00 and 11:00, and if you miss missed it, get that clip from last night. >> and we will look for the consumer confidence number coming up out, and also, we will look at the company whose car broke the speed record believe it or not. that is on "squawk on the street" coming up after the break. ♪

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>> welcome back to "squawk on the street." everybody, of course, is going to be paying close attention to the university of michigan

confidence number, and for all of the normal reasons and plus for cnbc, eamon javers doing an outstanding job to make everybody understand how this number and other numbers work as regard to when they are released to whom, and how much it costs. so we are seconds away theoretically from our ability in the media to put this number down. >> 84.1. >> 84.1, and this is the june final. 84.1. 82.7 was the june preliminary. 84.1 is just 0.4 lower than the final read last month at 84.5, and the reason that one is kind of famous is because it was the best level since july of '07 when the index was above 90. so 84.1, and this is e definitely going to be kind of in the different direction of the chicago purchasing managers survey, so that the market will have to grapple with it, but quite frankly, because whether

it is high frequency or whatever dynamic, i see that the dow stocks are hovering on the lows, and just when the triple-digit lower, and the interest rates are moving up back towards the mid 250s and it is a wild friday, carl. back to you. >> all right. rick, thank you for that yeom yeomen's work today. and manufacturing an confidence are tied so to many things, and wouldn't michigan be reflecting the housing prices and so forth? >> yes, and as rick pointed out the market may have been down thinking that the number was not that good because of the things that eamon is talking about and the auto sales, because you need the confidence to buy the car, and hardware restoration saying should i go on the vacation or redo a room? if your confidence is up, you might do both. and so just keep it going. it may not be hard in line. >> thank you, jim.

closing out the big week and first half on "mad." great job here, too. >> thank you. >> and when we come back, when tobacco moves into e cigarettes. we will find out how murray k s kessler plans to take out the competition. and we will talk to the ceo of noodles and company. and we will hear from what tv's pawn stars has to say about the drop in gold when "squawk on the street" continues. announcer: where can an investor be a name and not a number? scottrade. ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade. because i don't trade like everybody. i trade like me. that's why i'm with scottrade. announcer: scottrade- proud to be ranked

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so everyone goes home happy. welcome back to the "squawk on the street," and another down day, and the road map begins with more fed drama and yet another fed official saying that the markets misinterpreted bernanke's statements and we will break down to fed speak and see what it means for the economy. and the ceo of russell investments will weigh in on the market futility on this market day as well. and how you should be playing it. >> and lorillard is here to tell

us how tobacco is putting big money into the ecigarette business. >> and "pawn star" president will be here. >> and courtney is at the flash desk with more on the market. what a day, court. >> yes, the shares of the year and this is unbelievable for blackberry and so much for the comeback. the shares are down 20 and almost 27% in the first 30 minu minutes of trade after putting out those earnings, and very disappointing to the market, and it does not look like they will take back the market share they hoped to get at least not now, and we understand that the orders are weak, too, for the newer models. kelly? >> well, thank you, courtney. we are focus on the fed, and the issues of quantitative easing. and earlier tom baron weighed in on what time geithner told him about the qe. >> he was explaining that what he thought was that it was not likely that the interest rates would not rise short term, and

he meant for years and years, and then he also said that as far as the ending of quantitative easing he thought that would, when it ultimately began would take five years a five-year process to wind down the bond purchases. >> five-year horizon and on that note, let's bring in the chief economist with jpmorgan and also the chief economist with siozul securities. first, reaction to what ron baron said about what tim geithner said about the news of the five-year cycle? >> yes, five years of further purchases, but winding down the five years of the balance sheet is optimistic, but five years of purchases is well at odds from anything else that we are hearing from the fed officials. >> do you think that he misspoke or maybe it was a misinterpretation or -- >> well, it sounds more like a misinterpretation, and geithner is not that far off from

obviously not at the fed anymore, but he is not that far away from the way that the fed official officials think or advocating or forecasting another five years of asset purchase. >> right. what about the current fed speaker, because we have heard so much from them in the last couple of days. is the message changing or simply trying to make it clear whatever it is this point? >> well, it is not changing, but they are trying to clarify that the asset purchases and the interest rate policy are two things. interest rate policy, they are pushing back a little bit against the market expectations of the earlier rate hike, but i don't think that on the asset purchases, they are going up against the news that could end this year, and instead, trying to clarify what that means rather than put a later time horizon on that. >> right. and steve, you know, look, when we are talking through what they are trying the communicate here, and are they changing with regard to the reaction function, you know, emphasizing employment more than inflation than we are used to in the past or changing

the horizon that for example you think that they might use when it comes to tapering, and anything there? >> well, i think that when you look at the policies that they have laid out, they have a real communications problem. i honestly think they need to hire a public relations firm for them to figure out how the communicate with the market, and it is shame after all of these years to attempt to increasing the transparency, they have made the problem worse for themselves, so when i look at what they are attempting the do, i don't think they are adjusting the quantitative ease org their view on inflation, because it is uncomfortable feeling with qe throughout the entire period. every time they have executed qe they have looked for the exit doors, and each time they is done it, they have misinterpreted the underlying data and forced to back pedal and this time is no different. the market's problem is that the market takes what the fed says as gospel, and the fed lays out a forecast, and the market believes that the forecast will be there and under that forecast, the fed reaction function says they will taper

soon and get it done by the middle of next year, and that is not misinterpreted by the street, and the fed is wrong if they are saying that is misinterpreted by the street, but the fed does not get what is going on in the marketplace. >> and michael, what is your take on all of this and especially with regard to the stein comments that you flagged saying that this lowers the bar for september in some respects. >> right. i would agree with steve's comment that the public relations from the fed has not been the best. and the problem has really developed last summer, and into last winter when they went into qe3 without a clear plan on how to exit it, and what that process would be. and now, we are kind of seeing the fruits come the bear, and the fed is trying to correct the market, but i think that hopefully the message here over the next few weeks we could see the markets calm, and ideally if the economy holds in, the plan could be on track, but that is obviously going the depend if the data do hold.

>> steve, i can remember chairman greenspan would not say anything, and we all tried to figure it out then, and i don't know which is better that or this dish mean, be -- to this - mean, bernanke is saying what he is saying, and it is making sense to a lot of people, but it is how you interpret it? >> well, the problem is when you try to be transparent by laying out the interest rate path, and the quantitative easing path, and the market does not care. this is the central forecast, and the market believes that the fed knows more than anybody else, so the market discounts what they say, and they have to zi sit back to say, what are they are trying to transmit to the market? what the forecasts are, and what the reaction function is, a nd that determines where the market is going to go, and to sit back and say the market misinterpreted us, then why are you being transparent? because this is what you wanted them to understand and now you are trying to back off of it and you are confused about what you are trying to do, and the dois

c -- the disconnect is on the fed side and not the markets. >> right. and now the markets down 130, carl. >> all of the gain is gone and more. and the biggest drag on the dow by far is the ib, many. it is a big move on big blue. a lot of it is coming off of what accenture said about technology. . >> right. and you can see the effect on the dow with the market down 1.5% already. >> and the russell rebalance will take into effect that the market closed billions of dollars of stock trades will be executed in less than two seconds to account for some late day volatility should we say. the nyse bell ringer, and the ceo ron bundy joins us here at post 9 to break it down. do you get nervous of the volatility that this brings us? >> no, we are not nervous.

today is russell rebalancing or reconstitution, and we do it every year. the exchange partners do an excellent job of managing that. this is predictable, and well planned out, and on the days with a lot of the volatility, it always goes smooth. >> you say that you try to give people time to make the portfolios work so it is not a shock, right? it is not a shock to the system at the end of the day. >> right. >> how do you do that? >> up with of the most important things to do for the investors is to provide predictability, and transparency at the indicators that we can. so starting the end of may 31st, we strike the first list of stocks that are going to be coming in and going out of the index. then throughout the month of june, we start to share that information with the clients and with investors, so on june 14th, investors got the first snapshot of what might come into the index and what it might look like, and on june 21st, we strike the final list leading up to today which is the rebalance

and the big event. >> right. two seconds, is that true? >> that is true. sometimes less than two seconds. it happens very, very quickly. >> i mean, i have heard of the orders on close, but that is really packed into the back end. why is it so compressed? >> well, yo if yu have to look e asset management side of the business and looking at the managers. and for reconstitution day, we bring all of the trades -- and throughout the day, as investors are making their buys and sell orders, we cross those at the end of the day so that everybody gets the same price so that on monday, july 1st, when the new index is live in trading, everybody is at the same starting point. >> you are barred from front running the changes, correct? >> absolutely. a lot of rumors around that as well. in fact, they don't tell me what

is coming in and out of the index. >> but people will guess, and they will try to guess. >> absolutely. >> what is the criteria of the biggest changes that you are making this year? >> well, there is always a story of looking in the markets over the last years, and the biggest story is small caps so the large cap break between the russell 1,000, and the small break russell 2,000 is at the all-time high due largely over to the last 12-month period, the last year, the small caps have gained 31% in that period, and that has been great news story for the small companies in the u.s. >> but what does that mean, because the -- those are two f different indexes and how does that affect the rebalancing? >> well, you have small cap 1000 and the russell 2000. so, for example, some are upgraded and considered large cap stocks and some companies in

the russell 1000 have fallen down and now in the russell 2000. >> so moving them in between the indexes? >> yes. >> what is the biggest surprise for you this year? >> one of the big surprises is apple. i mean, apple, even though it has decreased in the value over the last several months, it is still the largest stock in the russell index. >> wow. >> not by as much as last year, and apple still holds the top spot, but the interesting thing about apple, it was 100% growth stock, but this year, we are seeing the value characteristics in apple, so 25% waiting in the value of russell 1000 index. >> and finally, we talk about the information leaking, and so on some platform from someone everyday. >> yep, yep. >> how big of a concern is that for you? how do you make sure that does not happen to prevent what kelly was mentioning? >> it is an excellent question, and the reason why we have construction methodology and the rigor around the index is to give everybody the same

information all of the time. so the chance of a leak is dramatically diminished and i will give you an example. so when we cut the list of stocks on may 31st, we go then and start to scrub the index and put it into the right cap tier, the right country, and classification, and the right value growth split, and then we share the information with the investors two weeks before the reconstitution, and so on june 14th this year, investors got to see what to expect in the index. a week after that, we cut the final list, so we are very transparent of what is going in and out of the index. so on trading day, no surprises, and everybody has the same information. >> ron, i can't wait for 3:58. thanks for coming by. ron bundy with russell today. and ecigarettes are a new trend around, and sparking controversy at the same time. some of the tobacco's biggest players are quickly getting in the action, and the president of

lorillard will join us. and also, if you are looking for a place to stash the gold, we have the man to talk to the head of the "pawn star's" show, and rick harrison is here with his look at the collapse. "squawk on the street" is going to be right back. he money they've invested elsewhere -- to create a plan that can help weather all kinds of markets. because that's how they're getting ready, for all the things they want to do. [ female announcer ] 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.

dow is down off of the lows, but another session in which the gains from yesterday are lost. largely because of a miss on chicago pmi and tried to make up some of the ground with a nice university of michigan confidence number, but so far, it is not enough. >> and shrugging it off and the

end of the quarter looms. the fda meanwhile has approved the sale of two new cigarette brabds. they are allowing lorillard to introduce two menthol cigarettes into the market. marty kessler is the chairman and ceo of lorillard and the biggest manufacturer of cigarettes in the u.s., and he joins us here at post 9. welcome. >> thank you. >> and can you tell us about your plans to expand into ecigarettes here? sdwlel w it is a frustrating time, because as the fda took over, there was a process to approve new products, and it was not anticipated to be a 90-day process, and it has taken a few years for them to get to the first approval. finally, there's a new director mitch zeller, and he said he would get action going, both good and bad, and he came true to the word. lorillard was historically the

first two products approved by the fda in hits history and i say approved, but authorized for sale. they don't approve anything. and for us that is big news, because it is a key part of the strategy. we fundamentally outperform the tobacco industry, and with these items, it is all white space. it is volume growth for the lorillard and continuing growth for the buying future. >> and who are the buyers of these products? >> well, this is a less than full product flavor. you have marlboro, and reynolds all have brands in the space. our company has historically been a full flavor menthol s cigarette, newport, the number one brand of menthol cigarettes in the united states. that is all we did. we branched out a few years ago and that is why in a category that is declining 3% to 4%, we grow the cigarette volume which is counter intuitive and to the comment in the opening, we are all about growth. we have not conceded the growths

in the business, and fundamentally why we grow the market share 11 years in a row, and why we continue to perform so well as a company. >> can you talk about the cost or the production of these things or the margins materially different than the cigarette business? >> well, they will change a lot right now. right now on e cigarettes, they are lower than cigarettes today, but still robust, but a lot of it is handmade today, and we are in the process of automating and probably 20 points of margin expansion over the next couple of years, and as we innovate and fully auto mate, and the scale comes up to play, i expect it to be margins similar to cigarettes. >> and you have always generated a good amount of cash and you talked about the growth, and debate among the shareholders and how do you view it? chance to return the cash to stockholders or is there acquisition -- >> well, renot an acquisition

company. we bought blue ecigs, and since going public, we have returned 2.3 billion to shareholders and so this is small. it is an r&d opportunity that has exploded. cigarettes are going to throw off a bunch of cash and pay big dividends and 75% of the earnings will be paid out in earnings and when we can buy stock, we will do that, too. >> long term, how much of the old cigarette business can e-cigarettes displace? >> well, it is displacing more than people are willing to admit except for me in the traditional cigarette business. i look at it right now that the category has declined 2% to 2.3% and this year, it is declining 4%, and you can do the math, and the full 1% is explained by e-cigarettes. equivalent of 30 million packs of e-cigarettes sold which is

one-third of the market, and the consumer research says that the people are switching and cutting way back and i estimate 2.5 billion less cigarettes smoked this year because of to e-cigarettes. >> why soing a gres saichbd pushipush i -- so aggressive and why pushing into the space when there are so many questions of the safety, and you have been through this before, and why not more super careful this time. >> well, we are in a process with the fda called deeming regulations, and they are about to assert authority over ift, and we are partnering with them, and we are not making a health claim. that aside, this eliminates complete think carbon monoxide and virtually eliminates all tar, and many public health officials around the world and the countries have recognized the potential for harm reduction for this prod duct. it is disruptive technology, and it is going to be at best.

>> and i can't think, what am i inhaling? if it is not second-hand smoke, what is it? what are these clouds of vapor this is. >> it is a humidifier from the standpoint that you sauna the investor presentation, we showed what was in the vapor on the analytical basis, and virtually almost nothing other than the flavor and the nicotine going n and the body is a good filter for nicotine. there's no second-hand stream. it is no smoke just while it is sitting there, so the only thing that you are getting is virtually nothing and it is 99.9% reduction and all of that has to be validated by the fda but second-hand smoke or second-hand vapor should not be an issue with the produshgts ct again, we will partner with the fda to get there. >> here is one of the blue light cigarette. >> well, the blue light ka note

activity. >> right. and it is for one person to say it is a lower risk alternative and more convenient without affecting those around them, and enjoy the behavior they love. so when we have a black cigarette with a blue light, you won't get confronted at a restaurant with somebody saying, put that out. they are going to say, what is that? i just showed a bunch of the traders here, and they said, what is that? can i try it? >> i have a feeling that we won't be seeing more of these products. marty kessler from lorillard, thank you. >> whether you are buying or selling, you might want to move with gold. we will talk to the star of "pawn star" about what profit is moving gold and the crazy stuff he has seen through the shop and more when we come right back. i'm a conservative investor.

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gold is on track for the worst quarterly performance since at least 1979. who better to ask about the impact of the gold's drop on buyers and sellers than rick harrison who is the co-owner of the gold and silver pawnshop in las vegas and star of the history channel's top-rated show "pawn stars" joining us from las vegas. rick, great to have you back. welcome. >> thanks for having me. >> we have been talking about this metal for seems like everyday for the last few weeks. are you noticing that business is different because of where you are? >> well, i retail a lot of the gold and the silver, and i'm having real difficult time right now getting physical metal. it is the crazy world about gold and silver, and you know, sometimes the paper market is going down, but you can't actually find the physical

items. but, you know, i think that it is still a good thing to have around. >> yeah, we hear it a lot, a difference of the those in the gld and the big institutions and those who buy the physical stuff, and why are you having a hard time find iing it? >> well, there is a shortage of the physical metal out there, and the private mints and the government mints are behind. there is a lot of demand for the physical out there. the physical side is having a hard time catching up is the problem right now. >> what is the amount you are willing to pay for physical gold? >> around spot, and it is not going to go much lower, because right now the spot price of gold and silver is below production cost costs. it is a commodity. they fly up and down. i believe that people who invest in it don't put a lot of money

into it, and regard it as an insurance policy, and you know, governments have a tendency to screw up the currencies, so. >> well, rick, i suppose that the trouble is that it has not acted like much of an insurance policy lately so that people who thought they were protecting themselves and diversifying by buying gold and silver -- and you are one of them, as holding them as an asset and now going, well, i could not actually afford this kind of insurance at all. >> well, it is an insurance policy that you hopefully don't need to cash it in right away, and if you look back, a lot of the people will compare the price of gold and silver from 1980 to today, but it is not as doing as well as the market, but if you look back to 1971 when you could actually legally own gold, you have done better than the dow jones. it is a long term investment, and luckily, we live in the united states where our government hasn't completely screwed up the currency like the

other countries in the world, so it is a good insurance policy, but remember, we do have -- there's a lot of -- it is like i said, a good insurance policy, and the government can screw up the currency. >> rick, anybody who watches the show knows that you know a thing or two, and not just about your business, but the way that the global economy works. when you aret a bar with your buddies, and you are talking about the fed, what kind of report card do you give them at this point? >> well sh, it is sort of difficult, because you have the government regulating and making business more difficult, and the fed trying to compensate for it. it can't go on forever that way, a and i have a problem when we have 7% of gdp is based off of the borrow and the printed money. eventually, we have to make a good business environment in this country so that we can start tapering. because if we keep on printing fref, things will get bad and it is a matter of math.

>> people do look back at the 1930s, rick, and there was the early withdrawal, a policy can be dangerous. >> oh, yeah. i mean, i not believe that we should slowly taper, but the fed is not going to be able to taper unless we have some sort of less regulations and make it easier for business to actual ly do business, and then we can start ta tapering, but if you make it difficult to do business, there is not going to be any business, and how are they going to taper? >> and rick, a question as well, because pawnshops are a gauge for the health of the consume e and what kind of traffic are you seeing in the shop, and can you talk about it in terms of the depth of the economy or still seem to be under pressure? >> well, i have a different pawnshop than most and i average 4,000 people a day, and most of them are tourists and they come in there to buy bobbleheads of me for some reason. but, you know, the economy does

seem to be getting a little bit better, but, the pawn business is sort of weird. most people don't realize this thing, and people think that we do really well in a bad economy. we don't. when people are bringing in items to sell in ra ba bad econ there are no buyers and when the economy is good, i have a lot of buyers and no sellers. so that is one thing about the problem. >> so where right now? >> right in the middle. i have a nice balance at the moment, and the las vegas economy does seem to be doing better and the real estate might be getting in a little bubble here gone up 20% in last year. >> absolutely. it is fascinating to get your perspective on the ground here. any changes to your personal portfolio then when it comes to gold, silver or anything else out there? >> no. i mean, i'm actually considering selling a little bit and taking a capital loss and buying it back in a month. i think that a lot of people should do it.

you will save a little money on the capital gains. >> not a bad point. rick harrison, thank you for joining us, and again, he is the star of "pawn stars" on the history channel. different perspective on what is happening with gold. blackberry shares and look at this this morning, they are plunging after the first quarter results down 27%. what happens now for the stock? we will tell you how to play it or if you should even try when we come back. stay with us. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away.

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about an hour into trading on a friday. this ism so of the stories -- this is some of the stories are we are talking about. rough morning for the blue chips. disney and home depot among the biggest gains, andk is censure down, and the university of michigan consumer sentiment index showing a reading of 8 4., and down below the 84.5 from may, but up for the quarter. thorson heinz is painting a bleak market for blackberry saying it is difficult to make revenues and profitability. and we have a market performing at 18 for blackberry, and we have the tech analyst at

jeffreys with a buy and a $22 target this morning. guys, thank you for joining us. >> good morning. >> good morning. >> peter, this has to be capitulation for the bulls. how can you keep a buy rating on this stock? >> well, our thesis was always on the mobile device management market. we said that the experience on an iphone is fabulous. we have used it and said it is the best push e-mail, and desktop-like device. the samsung, apple and blackberry markets are crunched. we thought they could avoid it, but not. >> and you are saying that blackberry is not doing enough to get the word out for the product? >> correct. we think that the high end of the market is flooded. if you look at the expectations for apple, and other products, apple has cut for the december quarters, and if you look at other tracks from the eom for

four weeks, you can see that it is a tough market out there. >> are you going to slap a sell sign on the sector then? >> no, we have to look at underneath the covers and evaluating all of that right now. >> and mark, what is the reaction, because there seemed to be a lot of onumbers that people were looking for and not only that the company missed on, but significantly. >> that is correct. our view is that the market is growing. the cell phone market will grow 58% to 78 million units this year, and so that the market is healthy from a unit perspective, and the first full quarter for blackberry, and for bb 10 the number should have been better, because they are selling to 300 carriers around the world, but they missed the target of 3.5 million bb 10 units coming in . 2.7. the inventories are higher and the investors are worried about the cash burn, but the concern

is in this market, can they run faster to maintain the units. >> mark, when is the cash conversation becomes a repeat of the kinds of conversations that we were having late last year and early this year? >> late last year, they were actually burning the cash, and starting to improve the working capital and generating cash. they had a one-time benefit from the irs, but is that sustainable or a one-time item going forward? so that the tangible book value decreases in the skalulation, which means that the stock is still rangebound and the upper limit is going to be 15, and the lower is 8.50. so investors and more for traders you could trade it within that band, but this is clearly a company that needs to run faster than the competition to stay ahead. >> but going into the release, you said that the range was 11 to 18, and we are playing with the definition of a range at this point. >> yes, what we didn't forecast

exactly is the rate of the forward cash burn, because the unit should have been better in the current environment. remember n the early stages you are elling is into tselling int but the debate is that you want the take off while the other markets are fading a little bit. so that the range will be moved within the upcoming quarters quite a bit. >> peter, in one word, what can the company do at this point and how quickly to reassure the investors it has a great future. >> software. software. they have to address the smartphone market, and all of the growths at the low end 138 to 150 isps and that is not apple or samsung or apple blackberry can make the money. it is saturated. they have to focus on the software. >> mark and peter, thank you for joining us as blackberry shares are down almost 58%. >> wow. they have a lot to say about the

come concomitant quarters. sharp and samsung could be and apple heading to the tv space. look for back to school numbers in pcs, because this is a chance for the intel and microsoft to show that the core numbers can be turned around. and finally tablets on the light for the holiday season. expect december, new ipads and iphones and kendalls. that is the sectornomics. >> in sears, we have heard that they have decided to phase out all products related to the paula deen brand. they say that we will continue to evaluate the situation, and the members' needs will be given priority as we provide quality cookware in the stores and

online, but that follows target, follows walmart and smithfield foods and other partners despite the appearance on the "today" show to cut ties. >> once one goes, there is no upside to stay in the game, and so they throw up the chips. >> well, that statement coming from sears to the assignment desk a few moments ago. coming up, the battle for hulu is heating up. we will find out who the serious conte contenders are and who will win the bidding war. >> and it is like something out of "weeds" and a mother and daughter charged with $3 million pot business are due in court. we will take you there after the break. [ male announcer ] my client gloria has a lot going on in her life. wife, mother, marathoner. but one day it's just gonna be james and her. so as their financial advisor, i'm helping them look at their complete financial picture -- even the money they've invested elsewhere -- to create a plan that can help weather all kinds of markets. because that's how they're getting ready,

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take a look at the markets with the dow down 67 points but off of the low, and the interesting thing is that the nasdaq was briefly positive. so again, we are not necessarily seeing the same kinds of losses

across the indexes and the dow's decline has a lot to do as we mentioned earlier in the program with ibm. >> and the volume is low, and we will see what this rebalancing has to do at the end of the day. a lot going on. and the bidding process for h u hulu, and what is next to thor the video giant? julia boorstin joining us with that horse race. >> well, sources say that the bid will come in $800 million and $1.2 billion. and the suitors must supply their bids a week from today, and that deadline was extend ed to give the bidders time to finalize the financing plans. sources tell me that today, the purchase agreements or the terms of the complicated deal are due. directv is a lead contender, and it wans to use hulu to grow the online presence and reduce the hedge cutting. the flipside of that is that hulu's parent disney and news corps may not want directv to

have more leverage. going head tohead is peter cheranyone group with at&t, and guggenheim digital media is said to be out. and so time warner cable wants to invest rather than buy hoo lieu flatout although yahoo! is looking to invest. who is hulu? well, it is a about 4 million subscribers at the end of qe1. and the company is not wanting to deliver content for e three years and that is not much, and the owners get $8 of the monthly fee. though comcast is a co-owner with disney and it is not part of the negotiations. the longer the uncertainty for

hulu, the harder it is for the company to hold on to the executives and the engineers and everyone is hoping that the sale process will happen quickly. carl and kelly, back over to you. >> thank you, julia. we will keep an eye on that today. also, noodles&company debuting as nasdaq. the ceo will injous live fjoin exclusive interview. "squawk on the street" will be right back. [ male announcer ] the mercedes-benz summer event is here. now get the unmistakable thrill and the incredible rush of the mercedes-benz you've always wanted. ♪

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>> welcome shares of jetblue airlines. the shares were moving higher on a report that azul's founder was going to be buying jetblue or was interested. however, they're now denying those reports. shares have since pulled back a little bit. right now it looks as if he is not going to buy the airline, but there was perhaps some hope from investors that he would and that's why we saw the shares move higher. kelly? >> clinging to that hope it would appear. courtney, thanks. let's go from the new york stock exchange to the santelli exchange. over to you, rick. >> well, we are in chicago, but i'll tell you what, new york, chicago, the interesting part about both cities is they still have trading floors with people on them. that's a good thing. all right, listen, i have to

continue to talk about the deleveraging because it is the topic du jour. even with the big blackhawk celebration, a lot of the talk continues to be exactly what happened, why did it happen, when it happened, how important was that? because in order to try to pick or help you viewers or listeners get an idea where interest rates may go, where equities may go, where leverage may go or not go ever again, we have to understand what happened. and let's start in a very simple place, leverage. i'll tell you why this is so fascinating a conversation i had with a couple of my sources yesterday. that in the world of hyperleverage, there isn't going to be any money left for excess margin. in other words, it's counterintuitive that the trading community, investors, funds, have a certain amount of leverage on and it's not the same everywhere but it's still

rather large. what is excess margin? excess margin means you have some money laying around, whether it's your gold position, bond position, s&p, or etf, whatever it is, that when the position starts to work against you and you need to pony up more money, where does that money come from? that is at the epicenter in a simple way of what may have been the catalyst for much of what we've seen. now, i know you always hear me talking about the fed, the fomc, ben bernanke and that the markets still have their moments of power, but i do have to say the other big conversation the last 24 hours is no matter what you think about all of those topics, that ben just happened to be the guy that we all identified, not me so much maybe, but everybody seems to identify with being the culprit somehow as to the catalyst. i'm not so sure that's true. i think in leverage, no excess funds, things have a way to work in he verse in an aggressive fashion but it's even more interesting. everybody wants to talk about

the great rotation. now, you could go to cnbc, they will have a boat load of stories about the exact numbers. i'm going to round out. there's been basically record outflows for the last month or so in the bond world, just the last week it's been rather large. could you break it down into taxable, nontaxable, municipals, whatever. but here is the key, equities and equity etfs are also seeing outflows. this really needs to be thought through. as much as everybody wants that to be true, it doesn't seem to be true, and this has to figure in because you could be the biggest bond guy in the world and you can see all the flows, but in the end the real key is the inflows and what we're not seeing there. back to you. >> well put, rick. very well put on a week where we're watching flows carefully. thanks a lot. when we come back, he was held hostage by his own workers he says in china, but now he's back in the u.s. find out what chip stearns had to say about his experience

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how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ chip stearns, the american ceo who had been held hostage he said by his own workers in china is back in the sauft speaking out about his experience.

he was talking about whether or not he has plans to go back. >> i don't know if at this particular moment it would be wise for me to go back. i don't think they're too happy with me right now. you know, i have partners, a cfo, there are issues that need to be dealt with head on. right after this this morning i will be heading to the office to begin that task. >> starnes spoke about the overall environment for business in china. here is what he had to say about that. >> you lost 25% against the usd. you have a shrinking labor population there. you have escalating salaries going on, and the business environment for more of commodity driven items, plastics, and labor and a force to do it, it's not as inl viting. there are other parts of the world that are more attractive. >> if you take at face value what he's saying about his experience, it backs up the

notion that china, though it's a world player, it is still the wild west for business in a i lo the of ways. >> i think one thing that's been overlooked in the focus on what this gi is all about and sort of the weird context of how it played out was actually that the workers themselves, the ones that eunice spoke with and were interviewed, were quite serious about how upset they were and really felt like they had the right to basically threaten this guy because he was going to do away with their jobs. so that's kind of an extraordinary statement as well. >> because of the distance between us and the story, we don't know exactly what was true, what his freedoms were. he seems to have done a lot of press in the past 48, 72 hours which has made some people suspicious -- >> you have to wonder how it's been for business, for example. that's one way to offset labor costs. >> be a global talking point, but he's back. speaking of being back, dow is down 41 points. >> and the nasdaq is positive. it's adding about a 0.1 of 1%.

i was looking at apple. apple is down 0.6 hfof 1%. blackberry, of course, off quite a bit more than that. so impressive that the index could perform as well as it is broadly although different story for the dow, way down by ibm. >> of course, the lottery balancing happening today. last day of the month, the quarter, and the half and a lot of the worst performing stocks are in big cap tech, ibm, computer zeinssciences. >> such a tough sector. it's been brutal for investors. >> yes. >> of course, europe is about to close in about half an hour. 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.

>> i laid 35 people off. the rest of those people had jobs, and all came about just easing the workers there in the local area. i got no support from the local government, no support from beijing. >> if you just invest in the stock market, we think you're going to double your money in ten years and double it again in ten years after that. so we're thinking about the dow being 30,000 in ten years and 60,000 in 20 years. right now there is a kind of a, wow, some damage was done so let's rethink. let's go back to the industrials. they have done very well historically. 94 in 2004 when rates go up. the markets go up between 4% and 7%. thank you jpmorgan for those numbers today. we need that. they're not getting it. >> don't you ever compare yourself when it comes to the looks department with telly. that's not a violation. that's not -- it's just an observation. >> i can hear the ocean in my ears when i have this around my shoulders. it makes me very relaxed. >> there's the opening bell. >> this was more of a r & d

investment that's exploded into a big business opportunity, but cigarettes are going to three off a ton of cash. that's our job. >> the fed is not going to be able to taper unless we have some sort of less regulations and make it easier for business to actually do business, and then we can start tapering. on our way to the end of the month, the quarter, and the first half. we're live at post 9. all boo black and blue. blackberry plunging after reporting a loss. of course, big blue, ibm, currently the biggest drag on the dow on the back of accenture's earnings. ibm down a little less than 2% right now. dow hanging on to a 31-point loss. we were down 133, so we've shaved 100 points off the

bottom. s&p is down less than a point. the nasdaq is the only one in green. gold, of course, continues to be a source of pain at $1,200. also getting some news on the fast casual chain noodle and company. ipo that just opened for traysing over at the nas. on a week where we have not seen new issues do well -- >> a year really. this is first restaurant company ipo in quite some time. i think it's because people like the word noodles. up 90% and they have done this strategy for they describe themselves as still an emerging restaurant chain even though they've been around for 20 years. they have got a track record for investors. they have a story. and even though there haven't been as good performance in this sector over time maybe since the recession, this is going to be one that maybe gets people's tongues wagging. >> the ceo who was a former coo of chipotle will join us a little later on. it's the first restaurant ipo of the year and apparently there's no tipping there. have you heard that? >> that's true with a lot of fast casual chains.

you can go, you can order your food, sit down and eat it and you don't have to worry about the service aspect in terms of waiting for the person to deliver the food, how much do you tip, do you have cash? who has cash to tip these days? >> nice gain on day one. >> absolutely. look at that. so 33 bucks, wow, wow. up 84% for noodles & company. there will be a couple others waiting in the wings, a potbelly sandwich company. does the story just get better in what's been an otherwise relatively more bund market? >> the dow is on pace for its best half since 1999 despite some of the volatility lately. ron barron also telling cnbc this morning that he sees the dow headed, get this, to 60,000 in ten years. we have two top strategists to weigh in and as we mentioned, blackberry taking a big hit on first quarter earnings. stocks down almost 30% after reporting a loss. we'll give you all the highlights from the call.

yahoo! may be walking away from hulu but what about video sharing site vim yo? and an electric car company just set a new world speed record. we'll be joined for an exclusive interview. first up, blackberry not having a good morning after first quarter falling short of wall street estimates. they reported a loss. blackberry ten shipments were a miss. here with the highlights from the conference call is seema mo mody. >> the quarter is disappointing for all analysts and shareholders who believed that by this quarter, q1, blackberry would have good news to report. expectations were clearly way too high. reporting a operating loss, adjusted earnings negatively impacted by venezuela, foreign currency restrictions. more concerning is the amount of smartphone shipments, 6.8 million, came in below the

analysts' estimates of 7.5 million. the ceo said the smartphone market remains highly competitive. turnarounds take time. but the street wants to know how much more time? blackberry is still the laggard in the smartphone space making up 2% of the worldwide mobile phone market in 2012. that according to gartner research. an analyst says blackberry's lon lon long-term viability is under scrutiny. jeffries saying it's too early to pass judgment. kelly? >> thanks very much. off 25% today but we want to mention that the s&p has just turned positive joining the nasdaq in positive territory if just slightly. the dow is still down by almost ten points. the volatility continues on wall street as stocks paring losses this morning after being down almost 130 points, and that's following more speak from the federal reserve. ron barron also joining squawk box earlier today offering some pretty positive insight to this

market. >> if you just invest in the stock market, we think you're going to double your money in ten years and double it again in ten years after that, so we're thinking about the dow being 30,000 in ten years and 60,000 in 20 years. >> 60,000 in 20 years. let's bring in scott clemens with brown brothers and ross. guys, good morning. >> good morning. >> scott, dow 60,000? >> i'd love to know what ron's forecast is for inflation over that same 20-year period. at the end of the day it's not what you earn but what you keep and what you can purchase with it. i think he has a decent point. as long as corporate earnings can continue rising and the top line of corporations can continue rising, it's not a bad forecast for the next 20 years. >> it's the kind of thing you could always say, right? there's no reason why if you had said that 5, 10, 15, or 20 years ago your point would be fundamentally different. >> xp fexcept you were starting

valuations on a stretched level. >> russ, talk a little bit about valuations. are they normal in this kind of environment? dow 60,000? >> the 60,000 is not an outlandish call as it seems. what that basically implies is the market goes up 7% a year. it's actually a bit worse than the long term average. i don't think it's a ridiculous call. the valuations are reasonable from this level. you have got the s&p trading about 15 times trailing earnings. that's a bit below the long-term average. i don't think we'll have some of the tail winds we've had for the last 30 years where rates were steadily going down and inflation was going down, but generally it's still a good environment for stocks. the other point, if you take a broader view of the equity market and you look at stocks outside of the united states, most markets internationally are quite a bit cheaper than the

u.s. so there might be better prospects globally. >> they're cheaper because there's been a rout in emerging markets. are you saying this is a good time for investors to start playing the space? >> i think it depends on your time horizon. in emerging markets right now you're going to see more volatility, they're adjusting to tighter monetary policy. we have some concerns about the currency. but from a long-term perspective, there is some deep value. right now em trades at a 30% disyou don't developed markets. that's the biggest discount since the end of 2008 and that's been a fairly interesting entry point. >> scott, when you guys talk to clients, are you telling them that actually there's some, as russ put, it deep value or are you staying home? >> we're saying the same thing. and we have tilted our geographic exposure within our clients' equity portfolios at the at the margin away from the u.s. and into that part of the world, emerging markets. >> is that because you're desperate for better sflurns. >> we're desperate for better

values. emerging markets are quite inexpensive, volatile but inexpensive and this is not a bad entry point. >> do you think we've seen the near term high on the vix or do people carry that hedge over into q3? >> i think you do. this is a really interesting point. we had a spike in the vix last week, but it's really important to put that spike in context. i believe the vix at 22. you put that in the context of previous events back in 2010 or '11 when the vix was in the high 40s, let alone 2008 when it hit 90, so far this has been a very mild correction. we have not seen real panic. i'm not predicting a 2008-type event, but i think you will see more volatility in q3, and while investors wants to remain long equities, they want to be prepared for more volatility than we had the first part of the year. >> do you guys agree? >> i do. i think part of the reason. >> we've seen the volatility over the past couple weeks really in response to no underlying fundamental crisis is the vix touched a six or

seven-year low in march of this year, 1130 if memory serves. and that says to me there was widespread complacency in the market. doesn't mean something is going to go wrong, but it does imply if something does go wrong, the fed, china, whatever it is, the market reaction is exaggerated. >> look at that even as we have been through this correction, the dow for today is almost turning positive. we're just a percentage -- couple percentage points off the highs. i guess that goes to your valuation point and why you potentially see a tougher clog ahead. >> although corporate earnings have been a great fuel, the tail winds are starting to subside. we're watching earnings reports particularly for strength in the top line. revenue growth is what's going to be important going forward. >> a missing ingredient so far. interesting stuff. thanks very much, scott and russ. >> she's the real life nancy botwin from "weeds."

she's being arraigned for operating a marijuana factory in queens. >> usually it's crime show that is are based on the headlines. this time as you said it seems that the crime is based on a tv script. 45-year-old andrea being arraigned as we speak. the mother of three dubbed the pot mom. she is accused of operating a multimillion dollar pot growing operation in a warehouse in the new york city suburb of queens. police arresting sandra lynn on may 20th after a tip from another group that was busted for growing and distributing marijuana. in the warehouse operated by sandra lynn's fantastic enterprises, police confiscated 2800 pot plants, dried marijuana, and $6,000 in cash. the dea estimating those 2800 plants have a street value of $1,000 to $7,000 each. at the low end they estimate the pot she was growing to be valued at $3 million. now, all of this helped to fund a very ritzy lifestyle.

she and her two daughters lived in a rented 5,500 square foot house in scarsdale. she owned three cars and a horse and she's a member of a riding academy. now, jailed since her arrest sanderlin's lawyer pointing out she has no criminal record in the past. he declined comment to cnbc. again, the arraignment is happening. we'll bring you all the headlines as it happens. kelly, back to you. >> mary, thanks. that courthouse looks like a movie theater behind her. >> it does look like a cineplex. blackberry is under pressure this morning. the ceo highlighting that the smartphone market remains li lily -- highly competitive. and then noodles & company surging in its debut today over at the nasdaq. the ceo will join us coming up. 105% gain. first rick santelli will be talking to mark about europe.

rick? >> we are. you know, today when we were talking about flows and outflows and inflows, the word global comes up, and it should. the world is interconnected. there's a lot of stories about germany and the retail sales being better than expected. france may be the key and mark grant is just the guy to open the door that that key unlocks. make sure everybody shows up for this one. bottom of the hour.

the s&p 500 is now slightly higher on the day, but take a look at the tech sector which is one of the weakest performers. it's down a third of 1%. courtney reagan is back at hq with more on that. >> equities starting to strengthen, but the tech sector remains the worst performing group. investors concerned businesses may be holding back on technology investment and consulting services. it's the i.t. services subsector dragging down the group after we heard from accenture missing estimates, culling the full year outlook. that's pulling down shares ofi bm making big blue the worst performing stock in the blue chip index. the shares have recovered some of the early losses. it's the last day of the second quarter. hasn't been a strong first half of the year for ibm. >> coming off a pretty nice year last year as you point out.

it's been a bad morning for blackberry. shares are down 27% on the heels of a disappointing loss. is a comeback still possible. roger, it's good to see you. >> good to be here. >> people had not kind things to say, roger, about the disclosure and the release and then about the call. i mean, where was this relative to an earnings disaster? >> well, actually one analyst told me it was a complete ziss a ter. the conference call i think got a little heated towards the end. there were a lot of pointed questions that i think the blackberry executives weren't willing to answer. >> and they certainly will not be -- they'll be answering fewer questions now that they won't be giving subguidance. i wonder what you made of the one number we all wanted was the blackberry ten shipments. you open the release and it's not there. it makes you wonder if they

thought people wouldn't ask about that. >> off the bat i thought that was a red flag right there. the fact they started skipping out on certain disclosures they had regularly provided and then only really kind of backed into disclosing the sales. they said 40% of total sales. that and subscriber number was another red flag. something they didn't disclose in the release and they sort of said it half an hour into the conference call. these are all things that companies are in trouble tend to do. >> roger, you know, it's making the fed look like great communicators by comparison, and i just wonder again, they can't -- in this day and age you just can't try to get away with that. there are too many people who are going to be on twitter immediately saying why not give us the numbers. so from that -- that seems to compound i guess what i was saying, the trouble of an already weak quarter. >> that's exactly it. there's a communication issue with blackberry. i was on twitter the entire time and there was sort of an endless stream of people asking for

specific numbers, asking for more metrics, and it sort of shows. the company is in trouble right now and knows it, even though the executives won't really admit it. >> it is the worst someday for the stock in over 12 years. largest intraday drop since january of 2001. you wrote this morning the ground they're standing on just got shakier. what's their best case and how much do you worry about a stronger competitor revisiting the physical keyboard? >> well, the keyboard market is fairly small at this point. i think a lot of other companies have sort of ceded it to blackberry. for whatever reason, its keyboard phones are actually still very popular. the problem was they started launching with z 10 which is an all touch screen phone. i think that's somewhat reflected in the results. that's really a reflection of the z 10 and possibly waning enthusiasm for the device. it's important to note that the q10, the keyboard phone, just

launched at the end of the quarter, so we don't really have numbers for that. there's still some that are holding out hope that the q10 might spark sales but it's -- right now it's looking like a comeback is more of a long shot right now. >> roger, good to have your insight on probably the story of the day. thanks so much. >> thank you. >> roger chang of cnet. >> i am in that small but dedicated group that loves the keyboard. i love it. you will have to pry it out of my hands. >> they will be happy to hear that in toronto. >> i don't want the apps and all that business that comes with you. noodles & company just opened for trading and it's surging in its debut. up 90%. and google owns youtube. yahoo! may be dropping its bid for hulu. what does it mean for a company like vimeo. we'll ask the ceo of vimeo coming up on this program. [ female announcer ] doctors trust calcium plus vitamin d

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i'm mary thompson outside the brooklyn courthouse where just moments ago 45-year-old andrea sanderlin pleaded not guilty to two counts, one for manufacturing and possessing marijuana with the intent to distribute and one for maintaining a drug involved premis premises. the 45-year-old mother of three was wearing dark blue prison garb in the courthouse. she responded to questions by the judge in a very soft voice. she has been dubbed the pot mom. she was arrested back on may 20th for operating a multimillion dollar pot growing enterprise in a warehouse in the new york city suburb of queens. now, her lawyers are expected to submit a bail package by the end of next week and there will be a status conference for miss sanderlin on july 15th. at that point the 70-day countdown to a trial will begin. if convicted, she does face ten

years in prison. over my right shoulder you can see her lawyers making a statement right now. as soon as we have that, we will get back to you with what they are saying, but once again the pot mom pleading not guilty to two counts at brooklyn courthouse today. kelly, back to you. >> okay. mary thompson, thanks very much for that. we turn our attention to noodles & company. the casual dining chain making its debut at the nasdaq pricing at $18 a share. that was above the expected range of $15 to $17. they're jumping, up 90%. over $34 a share. joining us for a cnbc exclusive is kevin reddy. chairman and ceo of noodles & company. also the former coo of chipotle and worked in various management role and we understand in the kitchen at one point in mcdonald's, is that right? >> that's right. >> so your career has made quite a progression. what was the opportunity that you saw here with noodles? did you expect it to do quite so

well today? >> you know, obviously we're pleased and excited. it's an important day. we've had great reception and interest and just really through quality investors and quality people. so we're excited with what's happening. >> it's been kind of quiet out there for restaurant ipos lately. has that made you nervous? >> not really. we don't really focus on that. we focus on delivering a dining experience we're proud of. if we're building a good business and it's an enduring brand, we felt comfortable that we would find the right way to grow. >> and these proceeds, kevin, they were largely used to pay down debt or that was the intention, correct? >> that is correct. >> okay. talk a little bit about where you see the company headed. so you're paying down debt. you are going to expand quite aggressively i understand. so anyone out there who hasn't been in a noodles yet might have the opportunity nearby pretty soon. >> yes. we have been one of the best performing restaurant brands in the best space over the last five years.

we have already been delivering double digit unit growth. we plan to continue that path and take globally inspired dishes to many more nakeds in the yea -- neighborhoods in the years ahead. >> how selective are you guys? >> we're incredibly selective. we run about 80% of the system as company owned restaurants. so we have the good fortune to really find folks that appreciate food, value serving others, really great from an interaction standpoint that pay attention to both the tangible and intangible aspects of a dining experience. so we really look for successful businessmen and women that want to be engaged in the restaurant space. >> kevin, how do you keep the concept fresh and make sure it's not a fad? >> well, that's a good question. i tell you, we really focus on delivering great tasting dishes. we put a lot of choice in the guests' hands. the broadness of our appeal and

menu allows us to create culinary inspirations in appetizers and core dishes that cover a world of flavors and taste in one roof. and that really gives us plenty of places to experiment and bring phenomenal seasonal limited time offers as well as offer a great core menu. >> all right. what one dish do you think is going to be next for the company? >> i don't know. we do have a phenomenal job with limited time offers and seasonal dishes and we have just had some naturally raised pork that is phenomenal as well as a gluten-free salad with asparagus. there's no limit to what you can be creative about when you have a real kitchen and do real cooking. >> and you can go gluten-free at noodles. who knew. thanks very much for your time this morning looking at shares up 92% in their open. >> nice gain. bell is about to sound across europe as the dow once again in the red. we'll get the close and details on the impact on our last afternoon session here before the end of the quarter in a moment. ne thing dave's always wanted to do when he retires --

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the european markets are closing now. >> markets have closed across europe largely in the red wrapping up the first half of the trading year. stocks are off the lows of the session after digesting more fed speak and economic data from the u.s. they didn't close down quite as badly as they traded. take a look across the major european bourses. we'll begin in london. look at the ftse, down about 0.6 of 1%.

and spain, some pain across the periphery while the dax holds up a little better. a rough dojune comes to an end r a lot of these indexes. since the beginning of the year all three indentixes are on the plus side. let's get to rick santelli in chicago with a special guest. hey, rick. >> yes, thank you, carl. and i'd like to welcome mark grant, southwest securities. mark, thanks for taking the time and it was last minute, but the reason i wanted you today specifically is you wrote a very interesting piece on a day where, you know, we saw retail sales in germany a bit better. the german economy isn't doing bad but in my opinion germany really isn't the issue. let's start with the periphery and work our way in. what have you seen of late regarding updates on greece and

cypress? >> greece's economy is in horrible shape and getting worse regardless of what any official agency tells you. the retail sales, rick, were down 14.2% last month versus a year ago. the economy is in terrible shape. they've had tries at two privatizations that have not happened, and i expect that they're going to be back soon asking for more money, and i think that's going to be very problematic for the european union. >> cypress? >> cypress will have about $ $10.17 left in the bank account of the country by the end of the year. the amount of money that's flowing out of cypress banks is ungodly, even though they continue to have the capital controls. but, rick, cypress is a country that's bankrupt and is going to be back for more money as well. >> all right. now, let's get to the epicenter,

france. ratings are ploum meting. the people in his behavior aren't happy with his behavior on cutting spending. he isn't doing this voluntarily. he cease a certain reality. can you describe what reality he sees and how that reality is probably underpriced? >> yes, i can, rick. >> the debt to gdp ratio that's the official number is 90.2%. the real debt to gdp number, which is just a calculation including the liabilities of france that aren't counted, is just shy of 200%, and here is the issue, rick. you cannot count things, you cannot count the bills that the bills still have to be paid and that's the problem. the other issue is a political one. they've raised taxes to 75%. they have a tremendous social system that's incredibly

expensive, a tremendous amount of people that work for the government. they've driven out entrepreneurs. they've driven out a lot of the major companies in france, and they cannot afford any longer all the social problems that they have and the myths, rick, in terms of what france is going to miss in terms of the debt ratio that mandated by europe is going to be way more in reality than they're going to tell us. >> mark, i wish we had more time. i always do when you're the guest. thanks for taking the time, and before we toss it back, i would like to show a little clip about some very proud times in chicago. the big parade for the stanley cup victories, the chicago blackhawks. >> i assume is that a wrigleyville shot, rick? what are we looking at? that's grant park. >> yes, grant park, and the procession is leaving there and they're going to have a big function at daley center plaza.

so it's just one of those grand days, and i keep dreaming, carl, that some day we'll all have cub jerseys on doing that parade, but i hope at the time i'm not in a walker. >> got to get rid of the goat curse first, but as an ex-chicagoan myself, that's a beautiful picture. as if chicago isn't great enough in the summer. >> and the crowd is being so well-behaved. just a proud moment for the city. >> that's great. fantastic shot. >> and now let's send it over to josh lipton who is at post 6. the crowd isn't quite as big, josh, but you're keeping an eye on ibm. >> we're watching ib m, big blue. it will trade right behind me at post 6. it's down nearly 2% right now. stock down about 10% in the three -- in the last three months. remember there was that drop in april after it posted disappointing results. the stock basically flat now on the year. today analysts talking about accenture, the consulting firm

and how its results suggest head winds for ibm. >> the guys at rbc are telling their clients ak ten tour's earning report and toord loforwd look are a negative for ibm. they also believe a cautious spending pattern may limit revenue growth and profitability in the near term. they consider this one a sector perform. the price target they say 210. >> gold is on track for its worst quarterly performance on record. sharon epperson has a lot more from the nymex. >> you know, no matter who you speak to, who is watching any market, they're all fixated on what has happened to gold this week and really all year after a 12-year bull run. gold prices year-to-date down almost 30%. but the bulk of that, of course, has been in the second quarter with a 25% plunge just in the past three months. and what we've seen in the last

two weeks since the last fed meeting, all the concern over the tapering talk has sent gold prices down even further. overnight we saw gold plunge below $1,180 an ounce. keep in mind a lot of traders in the futures market are pointing markets at exchange traded funds saying the selling there has exacerbated the gold price slide. the good news coming out of this for some retail investors, particularly in the u.s., is they're buying gold. they're buying gold coins, looking at the figures from the u.s. mint that we're seeing for the month of june. over 500,000 one-ounce american gold eagle coins have been sold. we have seen a steady climb in gold coin sales all year long and, of course, as we reported earlier this month from the u.s. mint, they are producing them fast and furiously. in fact, increasing their production levels to meet the demand that they're seeing from consumers as gold prices continue to fall. back to you. >> that's just been an amazing fall from grace. thanks so much, sharon epperson

at the nymex. richmond fed president jeff lacquer with some more comment on fed asset purchases during the q & a portion of an appearance. he says september is one meeting at which the fed could start tapering. he adds that the market reaction since bernanke's news conference is a sign the market had overestimated the amount of the fed's bond purchases. he says the fed does have a communications challenge and that it wasn't realistic to expect investors to separate the subject of asset purchases from that of possible rate hikes. interesting take. again, you have these fed executives coming out and saying the market doesn't understand. the market is the market and that's what a lot of people have problems with. >> yes. i won't get on my soapbox again. i think they have had a challenge this week. i think our guests throughout the program have put it well when it comes to is the issue the way they're communicating or, in fact, just changing their minds trying to figure out what to do in this environment, et

cetera. the head of vimeo will join us next. later an electric car sets a world record breaking 200 miles per hour and that's google's eric schmidt talking to the man who drove the car. he also happens to be ceo of that car company. lord drayson, ceo of drayson racing technologies will join us when "fast money" returns. ♪ [ engine revs ] ♪

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from worst to first. can utilities come back after a horrible second quarter? plus, blackberry taking a beating. is one of our traders sticking by his long call? a an update is straight ahead. we'll see new 15. >> thanks so much. popular video sharing service vimeo is presenting a challenge to the movie industry by offering a new alternative to traditional theatrical film releases. the producers of "some girls" starring kristin bell and adam brodycided to bypass traditional methods and release their movie on the vimeo

platform. >> kerry trainer joins us for an exclusive interview. >> thanks, carl. >> this is another chapter in the avenue of distribution. >> we were talking about our first efforts to offer filmmakers the chance to monetize with vimeo. this is the first film to floblly release on vimeo on demand. our objectives put powerful tools in the hands of filmmakers and creators of all levels to bring their content directly to their audiences. >> speaking of charging, $10 to own it, $5 to rent it. >> that's right. >> on your platform as opposed to a movie ticket that could cost you what? in new york. >> that's right. it's a great level of flexibility for creators whether it's streaming or charging to own and you're offering consumers that choice. you have the ability to consume it on any device whether it's a mobile device, tablet, computer,

and, of course, the beautiful screen in all of our living rooms. now that internet services can deliver it, it's an exciting chapter. >> what they wanted was basically after the buzz to quickly drkt it which you guys allow for going around the typical distribution process and just recognizing there are a lot of people out there who don't think twice about watching a movie now online. >> that's exactly right. it was one of the serendipitous partnerships where we announced our platform at the same time that the team announced the "some girls" premiere and we got together and they did have traditional options. one of the reasons we're very excited about that is they turned down the options for the reasons you cite. instead of having their audience wait a year to have this film roll out, they can offer it day and date to the entire world at the same time it's in theaters. it's a very creative innovative approach on their part. i think we will see more and more filmmakers taking more

direct routes with the release of their product. >> steven spielberg was on our air not long ago talking about how the pricing structure for film content will change. here is a brief look at what he said. >> that's going to eventually be an implosion or a big meltdown. there's going to be an implosion where three or four, maybe even a half dozen of these mega budgeted movies are going to go crashing into the ground and that's going to change the paradigm again. >> he talked about paying 20 bucks to see "iron man," $7 to see "lincoln." >>. >> when you have someone like steven spiel ber making a comment like that, he has access to every distribution channel imaginable. for him to cite and illustrate how many of those things are in play right now in terms of the role the theatrical release will play versus direct channels will play, that's why we're very excited about the opportunity pwe have. i tend to agree theatrical

release will play an important role for many types of films. however, for other films where it can be enjoyed beautifully in the comfort of your home through a platform like ours at a more accessible price point and also in turn it returns a lot more of the value to the creators themselves. it just creates a much more interesting set of options. >> that's why i wondered, briefly, what's your ownership structure and can a yahoo! if it's looking at this wanting to be in the video space say this is the way to play it? >> well, vimeo today is owned by interactive corp. we operate quite independently within that company and we do partner, you know, with all players. so as mentioned from any creator from the individual through to professional filmmakers like this as well as production companies and other media companies, we're excited about the interest we're seeing of people wanting to utilize the platform. >> do you think you will ever produce your own content? >> it is something we absolutely are giving some thought to. for now we're focused on providing the very best tools we can to empower creators at all

levels to distribute. but certainly we do see there could be opportunities in the future. >> i see a show about two co-anchors covering business news. >> absolutely. >> and what happens behind the scenes. >> of course. >> kerry trainer, thank you so much for stopping by. >> thank you so much. >> vimeo's ceo. eric schmidt tweeted this out yesterday. drayson racing electric car sets new world speed record driven by the owner. this is so cool and a real step forward. you can imagine that sparked some interest. we'll be talking to that very ceo when we come back. [ male a] the mercedes-benz summer event is here. now get the unmistakable thrill and the incredible rush of the mercedes-benz you've always wanted. ♪ [ tires screech ] but you better get here fast. [ girl ] hey, daddy's here. here you go, honey. thank you. [ male announcer ] because a good thing like this won't last forever. mmm. [ male announcer ] see your authorized dealer for an incredible offer on the exhilarating c250 sport sedan. but hurry. offers end soon.

it's the last day of the quarter, and we're taking a closer look at some key market sectors. simon hobbs has a special report on what investors need to watch in the travel and leisure section. >> here is what you watch for in the travel and leisure section in the quarter ahead. watch if hotels are able to achieve not just the near record 70% occupancy that's being forecast, but if they're also able to raise prices and be substantially more profitable. for hotel owners, watch for short interest and sharp share price moves on changes to fed policy and yields in the bond markets. cruiselines will likely continue to slash prices in order to fill their ships in response to that spring of mishaps. and finally, watch the advertising between the online travel agencies like expedia and priceline for the costs and

payoffs, especially with their recent metasearch takeovers. i'm simon hobbs. >> he's on vacation but you miss him when he's gone. >> he's here in spirit. >> markets, dow is down 20. we're heading into the end of the quarter, end of the half, end of the month. close to the flat line. that could change with some of the rebalancings that happened at the close. for the time being well off the lows. we were down 130 and change at the lows of the session earlier this morning. s&p virtually flat. accenture continues to be one of the big stories regarding tech. >> if you're wondering what's accounting for the difference, ibm is weighing on the dow. it goes back to what accenture had to say. ibm down 2%. accenture down as much as 14%. it's the world's second biggest technology consulting company. as we've seen changes in terms of demand from its clients there

is whether they have all of a sudden been caught in some kind of shift away interest their traditional stalwart sector. that's taking -- >> heck of a reversal. >> absolutely. >> take a look at this photo of google's eric schmidt hanging out with lord drayson right before drayson broke the world record. lord drayson talking about electric vehicles is going to join us live in just a moment. [ male announcer ] my client gloria has a lot going on in her life. wife, mother, marathoner. but one day it's just gonna be james and her. so as their financial advisor, i'm helping them look at their complete financial picture -- even the money they've invested elsewhere -- to create a plan that can help weather all kinds of markets. because that's how they're getting ready, for all the things they want to do. [ female announcer ] 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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an electric car has just set a new record breaking 200 miles per hour. drayson racing technologies was the maker of that car and the chief executive who was behind the wheel as well, lord drayson, joins us now. lord drayson, we thank you very much for joining us on the program this morning. >> great to be here. good morning. >> you know, this event really caught the world's attention because it happened just recently in britain. you developed this technology in oxfo oxfordshire. can you explain how you have been able to come forward and set a new record with regard to speed for electric vehicles? >> well, our business is about

developing very high performance electric vehicles, and i think the reason the media interest has been so strong in our world record is because it really shifts people's perceptions of what an electric car can do. to average over 200 miles an hour through the measured mile really is unexpected i think for a lot of people, but it shows just how far we've come with modern technology, how quickly the car industry is changing, how important electric vehicles are going to be in the future. and setting records like this helps us to understand what are the major technical challenges and how we can overcome them. >> i think still the map question for a lot of people when it comes to widespread adoption of electric vehicles is not how fast they go as one analyst put it, but how far they go. and that goes down to the battery technology and the limits that are inherent to those batteries. so in your -- from your point of view, is there a bigger hurdle for developing distance with regard to electric cars as opposed to speed?

>> you have to offer solutions for both. we have to develop electric cars which are as fast as we need them to be but also go as far as we need them to be. and that's why we're working hard in collaboration with a great american technology company, qualcomm, on freeing electric cars from the constraint of the cable using wireless induction charging to charge the car without wires. the car you see there doing the record run was charged wirelessly, and we see this technology as being a way of speeding the adoption of electric vehicles, freeing them from the constraints that they have with batteries at the moment. >> interesting. you were behind the wheel, lord drayson, in yorkshire. we all know electric vehicles tend to run quietly. is the experience much different than if you had been in another land speed record race in a conventional vehicle? >> yeah. it's completely different. i have raced cars pretty similar

chassis style cars in the le mons 24 hours and the experience of an electric car is really transformed. you have this amazing acceleration because you get 100% of the torque from the electric motors from zero revs unlike an internal combustion engine. we're doing 0 to 150 miles per hour in 8.6 seconds to give you some sense as to how fast the car accelerates. but unlike a normal racing car, if you like, where you have all of the vibration, the mechanical noise, that engine behind your head, in the electric car, it is much quieter. it's not completely silent, but that really gives you that sort of eerie sense of something that is very futuristic. >> lord drayson, so is google

buying? >> well, it was great to have eric schmidt to make the time to come up and witness our event. >> yeah. >> he's personally very interested in innovation -- >> it looks like it. >> it was wonderful being able to spend some time with him. >> thank you -- hate to leave it there, but thank you for joining us on the program today. really appreciate it. congratulations again. >> fascinating. let's get to headquarters, scott wapner and "the halftime." thanks. welcome. four hours to go to the close. let's go to the wall and see where we stand on this friday on the street. right now the last day of the quarter is a fight for 15,000 on the dow. we are currently above it but we're down 18 points. s&p and nasdaq are positive. here is what we're following on "the half." black and blueberry. after earnings stunned the street, where does the company, the stock, and steve weiss go from here. can one