>> boring last word, sorry. you look through the volatility of the data month to month and where we have been for two years. the average monthly job growth is around 175k and that is where we were and where we are. how about that for 20 seconds? >> thank you. and everybody have a great weekend and join us monday. "squawk on the street" begins right now. ♪ good is good ♪ bad is bad wellb , it looks that way. i'm carl quintanilla here with k kelly and david faber. jim cramer is off today. the earnings are up 0.4 and the biggest since 2008, and take a look at what is going on. the futures looking at a good gain and a lot of it coming off of what draghi said yesterday

after forward guidance. the dollar and the gold are key today. the dollar and the yen, and gold close the touching a low today. the 10-year 2.685 which is a far cry from the 2.5 that we were used to last week, and of course, mixed issues in europe. and of course, though one of the biggest moves for them yesterday in about ten weeks. our road map begins with the jobs number, and june payrolls up 195 and unemployment at 7.6 and a lot of information still to come. corporate news, heading t r korea that they have embattled cell phone. and due to prosecutors lack of evidence, steve cohen's fate. and the south sinai and the suez, and we will keep an eye on the response in oil's action.

>> and the market spiking after the jobs number with the u.s. adding 195,000 jobs in june according to the labor department. economists expecting around 160,000, and all of that is both the ecb and the bank of england yesterday offered forward guidance breaking with the tradition saying that record low interest rates will be maintained for a prolonged period. part of it is almost hard to separate what is going on with us today, because of what draghi said yesterday. >> all part of the same story, because the ecb and the bank of england came out to say that when the yields in the u.s. jumps, it sets rates along other developed markets and they have had to deal, and image anyone the position of europe and britain and not only as strong an economy as the u.s., but you have to deal with the higher rates as a result of it, and they are trying to push back against it. i will quote citi because this will give you a sense, they say that a positive response today is more likely to unwind the

currency blocs and replicate and this is important because we are are seeing it, replicate the mid-june forward and we saw bond flow redemptions and the yields higher and people worrying about the emerging markets, and that pattern they are talking about is back. >> and interesting warning in so many ways. do not forget that a lot of people are on the beach, and hope they are enjoying themselves, and volumes are going to be small one would expect with the move-up with the 10-year to 2.66 again. and a few weeks ago it was the end of the world and now apparently the equity markets are not worried and the gold falling dramatically and the last i looked exports were important in the country for the auto makers and the like. we will see if the trend continue continues. but kelly, if you look back two weeks at the response, we saw this trend in the 10-year, and maybe the fed's jawboning has worked. >> that the argument, and certainly everything since may 22nd when the taper came to the fore after bernanke's testimony suggested that even though the

equities took a spill, they didn't collapse. we are only a couple of percentage points off of the highs, but remember, on that day, it was the 10-year that told you what the new trend would be and it was a period of weakness for the equities. if that is the same thing that the markets are telling us today, i would be worried about whether we can hold the triple-digits there. >> and looking at the refinancing and the fed had to be concerned where we were headed there given how they fell off of the cliff, but we will see as the day goes on. >> for more insight on the markets we will bring in the strategist for cliff ban yon and chief strategist for payton and regal. the worry, bob, about a strong number today was that it would send stocks into what some called a taper tantrum, a taper tizzy, and is that still in the offing? >> well, it is not yet. i think that the market is going to continue to move higher, even as we approach the july meetings. right now, we are look at the strong non-farm payroll report,

and means that the economy is improving and on track to at least pick up a little bit of momentum. as we get closer to the september, i think that the possibility that the market gets a little bit worried about the rise up in treasury yield starts to come back into play. i think that the market wants to move higher and we will get into the earnings season and see how that plays out. i don't think it is going to be all that strong. i think that q2 will be a large repeat of q1 and you will see a good increase in the earnings per share, but not going to e see a tremendous increase in revenue which could create problems for intermediate term, but short-term, the market moves higher. >> jeffrey, two schools of thought. one is that if we can manage to bust through and hold above the 50 day into s a&p, that is goin to force new mo money to work, but we hit 2.7 on the 10-year, and issues around the 2.5, and which wins today? >> well, carl, it is july 5th,

and we should all be celebrating higher interest rate, because that reflects better macroeconomic conditions. we should be happy about this and not fretting a move to 270 on the u.s. 10-years and compared to history, it is still very low still, and it is happening because the economy is getting better. >> but jeffrey, some things in the report that is causing concern, we saw a broader gauge in the eu and more people working part time for economic reasons, and in other words, there are employers out there who are cutting hours, because the business conditions don't justify it. so while there are good signs, but is it necessarily, to unilaterally declare that it is great and yay, and job accomplished seems premature. >> you are right, kelly. it is better relative to where people saw the economy this spring months when the 10-year treasuries got down the 1.60,

but it is not a gang buster robust environment. this is not going to change anything for the fed, if you think about the fed's bond rate, because they are way above 6.5 on the unemployment and way below on inflation, so nothing changes there, but the experiment which is qe which i argue is not helping the eu measure, and the broader measures of unemployment is an experiment, and maybe they will step away from that given the recent run of data that we have seen. >> bob, interesting that bernanke here has data that would back up a case for at least beginning or continuing the conversation of tapering and meanwhile, draghi and carney are going in the exact opposite direction breaking with the custom as you know around in not his words 6 months and not 12 months, but extenned period ee time and how odd that they are

coming as we are going? >> well, draghi deserves the mvp, because he has not done anything and talk it up. you see the markets reacting and he has not had the do anything. you look at bernanke, and we are stuck in a market malaise slowly trying to get out of it. as far as the market is concerned, it will focus on the non-farm payroll report today and today and heading into next week which is good news, but you have to turn to what the other economic reports are going to be telling us. if the other economic reports continue to come in as positive as this one just did, then you start to get concerned about how the market is going to be reacting to the e removal of tapering, and then it is doing to be a refocus back to how the economy is improving, and it really depends upon report the report. these reports are so far, so good, and it shows that the economy is adding the jobs and wonderful to help the retail

sales and help the more consumer discretionary areas and the industrials and the cyclical areas of the market. >> well said, bob. thank you and jeffrey for your time. the retail jobs did add 37k. not bad. >> and restaurants, and there is a lot of talk of what we will see because of the obama care, and the employers trying to keep the consultants all over the country to help before we heard the last announcement, carl, what we heard of delaying the employer mandate delay, and there was not much time before this happening. >> and the health care added 23q and government lost as you might have expected given the cutbacks we are looking at. keep a close eye on the jobs obviously, and samsung is reporting record quarterly profit today, on the investors are unconvinced that the smartphone business can maintain the rapid growth. the electronics giant is

estimating a high of 8.2 billion, and sales of last year rising a minimum of 18%. and that is higher than expected sales -- cell phone application s. >> is it or not a zero sum gain. how can apple and samsung not make expectations if they are battling for the market. it will be interesting to see what happens with apple. here they may be a victim of their own success. so maybe the investor want more and mobile is the largest single component and mobile and computer and tab lelets overall samsung, and a giant that they make so many things that we don't talk about, but this is a key part. >> wellk we put this question to the analyst that we had on last week or the week before, but it is not just apple hit here, but samsung as well sh, and what is

happening to the space? is blackberry winning share? >> no, that is not appearing to be happening. and might be nokia. >> they are coming on. well, they are looking for the more market is saturated and the growth is in emortgaging market, and if you think of the global players like the htcs and the nokia and the space is where the action s and unfortunately, it does not bode well for any of the companies. >> we will see, because samsung is 1/5 of south korean gdp, and 20%, and that is people don't have a sense of the behemoth they are. >> and the same as finland. if you want to talk about industrial success on a mega, mega level, and samsung is the poster child for that in korea. >> incredible. >> if you look at the buy recommendations for apple last week, and they are not talking so much about the smartphone wars as getting apple's

ecosystem into other devices, your car, your appliances, your television. fleece a sense that we are at a stasis regarding the smartphone a wars as we know, the phone and the tablet wars that we talk about so much. >> and yes, don't forget the ca carrier where is the subsidies are incredibly significant in terms of the dollar amount, and always a question as to whether there would be pushback from the likes of verizon or at&t to try to push the number down nerm thes of what they subdiz that you can buy the handset in a price that makes some sense for most consumers out there. >> keep an eye on europe as well, because the "journal" was talking about this in the last couple of days, because the regulators are trying to keep four players in the space here and there to allow the enerindu consolida consolidate. and we had freedom pop on and we know where the meg fa competition is coming from in this industry.

>> and steven cohen might avoid all of the criminal charges he is facing. we will dig deeper into that story. and we will talk about the job numbers today and what it means for the economy with jan hatzius. >> and in the opening bell the jobs number 195 beating the expectations of 160. we are back in a moment. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company."

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futures losing steam here and looks to open up nicely, but it could be the second consecutive up week since the middle of may, but clearly nowhere as nearly as explosive after the jobs number this morning, david. >> yes, a lot of it has to do with the 10-year and boy, that is something to watch. something else we have been watching for oh so long is stevie cohen. according to the "wall street journal," the prosecutors do not have enough evidence to file insider trading charges against cohen. the five-year statute of limitations will pass without any action. we have been following this story closely for quite some time, and mr. cohen himself in san trope last week, and trying to get some relaxation in. we will see. it has always been a difficult case that we are talking about here with matthew martomo

specifically with wythe and the profits and the happenings of five years ago. i wondered how possible to get martomo to turn, and if you did, what would he say went on in the key 20-minute conversation, because no way he said to steve cohen, i would believe, oh, we have this inside informationment forget it. he is an employee of the firm that you are paid, because people believe you are a great analyst and therefore you want your boss to think that you are a great analyst and you change your opinion because of the great work. so it is a difficult one to imagine that the prosecutors could bring especially in light of the -- i mean this is obvious, but they more or less have won everything they have brought either at trial or through the settlement, so they don't bring the cases where it is not going to be easy. that said, keep an eye on this, and again, we haven't confirmed it, and there is still the question of the s.e.c. and the firm, itself, and he has paid a

$616 million civil penalty, one from the l-- nonetheless, you c have further sanctions of the firm in which assets have flowed out steadily, but the bulk of the money is mr. cohen's. >> and attention paid to the man hunting down steve cohen and whether he can change the strategy and extend the five-year statute of limitation s which is a couple of the wrinkles that the "journal" story is trying to flesh out. >> yes, and they have brought so many of these insider trading and matthew martomo who worked at the s.e.c. or a division of it, an steinberg who they indicted not long ago on dell trades which it appears that mr. cohen did not have any part. you are right, that the investigation has been going on for so long, that one has to expect it would come to a end at some point, and the belief is that they were focusing on mr. cohen, but the question is do they have enough to really feel

like an indictment and then win? and the firm, itself, could be in some jeopardy perhaps in the s.e.c., and if it all passes, i'd be curious to see how much money flows back, because he has had great success. we talk about his success as a trader, but i would argue that mr. cohen is a businessman and restructuring the firm, and changing it as times changed and particul particularly even in light of compliance, f.t. and all of the things that he needed to do and perhaps he did do so much so that they might avoid criminal prosecution. >> wow. >> keep an eye on, that and big story and very big story around the street today and almost as big as jobs friday. the question is how do you play it now that the futures are off of the high and the 10-year yield is at 2.7? we will talk to art cashin. and the futures and the opening bell in ten minutes and 30 seconds, so don't go away.

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just a couple of minutes left before the opening bell today, so some thoughts from art cashin, the director of floor operations for ubs services. art, good morning. we are watching the 10-year at 2.67, and what is your reaction? skw >> well, we have skeleton desks and the juniors are drawing it

and we had to get the call in from the hamptons saying that the yield is up to 2.7 and stop buying the stock market. that is going to yield a interesting test, because when the futures look up 15, we would have blown through that resistance at 16.24 or 16.26 and that is important now for several days but by pulling back and going into the opening, it is going to set up another test, and when we see where we are going. the currencies also a factor. the euro coming back a little bit. you would have thought that would have helped the european markets from the export standpoint, and but instead, it is taking a little -- >> give me an order of importance here. 10-year, dollar, gold, oil, which is down a little bit -- which is the equity market going to take its lead from? >> 10-year number one. >> okay. >> i would say probably the dollar number two, but the rival for that could be oil. we have already seen some

clashes beginning in egypt this morning after morning prayers on friday. if that begins to widen out, again, concerns about oil, and the region. so that could pop up, but i think that it is primarily the yields. >> and what did you make of what draghi did yesterday and how surprised were you? >> i was in the fact that, you know, certainly, it is not traditional and the same thing with carney and now europe has decided that we will -- draghi surprised everybody with last year with "whatever it will take" and yesterday was "and as long as it takes." and so that gave everybody a big boost. but i think that it is very interesting that the central banks all around the world are trying to communicate, and europe did all right yesterday, but both china and the u.s. are having difficulty communicating, and they have disrupted the markets by doing so. >> and now china will do less communicating by taking out sector specific information in the pmis. >> you are going to get, and we

are doing pretty well, and i will give you the details next month or next year perhaps. >> well, i mean, art, i was talking about this earlier the 10-year at 2.7, and we hit that almost a few weeks ago, and of course, equity markets are down particularly anything income-linked and not expecting to see it this time? >> no. i think that what you find, david, is that markets are here like a recuperating cardiac victim. they got there before and now do they go past it? so they set little limits and those are the former highs and things like that, so when you went through the former highs this morning, that is why you had almost a belated, but sudden reaction to what went on. >> and interesting session setting up. thanks for the help. >> my pleasure, and let's hope there are no further fireworks. >> okay. art cashin here at post 9. we will see if there is

anymore fireworks on this friday. we have much more coming up on "squawk on the street" straight ahead. delivering alpha delivers. lew, icahn, pelts, and delivering alpha delivers.

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"squawk on the street" live from the financial capital of world on this friday morning. the opening bell is set to ring in over a minute's time, and it has been an eneventful morning already if you are waking up. the jobs number was a surprise to the upside, 195,000 above expectations and unemployment around 7.6%, and the private parolls adding 202k and huge revisions to april and may, and essentially three straight months of just about 200,000 job creation in the country. >> that the trend. i think it was 195 the six-month trend and we have been seeing a remarkably steady increase in jobs. we have been seeing it everywhere, but in hourly earnings which is outpacing inflation at this point. >> and the discouraged workers and the -- >> part time work jumped. a couple of worrisome signs in there. >> and the bond market and the 10-year yield has spiked up to

2.7 which is a big cry from where it was before the data hit this morning. there is a look at the opening bell and the s&p at the top of the screen and we will look at the 50-day moving average today, at at the board campus press communities, and the nasdaq, coalition for queens, fostering opportunities in technology and entrepreneurship in the borough of queens, new york. >> i would love to see a sector map if we can see it as well, because we want a eye on the financials and the home builders and the story is not as straight forward as you think, because the 10-year, and the 30-year, and we are seeing that curve flatten, but in other words what we are not seeing is a spike in the longest end of the bond market that is coming in, and so what impact does that have across the financials? a rally of better than 1% for many of the big name banks. here are the builders and a mixed picture.

lennar and toll giving up some gains with hovnanian up. and looking at the sector board, and a lot of green. >> and the speaking of housing the "usa today" has a good piece on how home buyers are being squeezed out because of the higher rates and some of them have not done as well from the income standpoint and first time buyers are up in the first quart quarter. we talk about this in the mushy sense, but it is very specific. >> anyone wondering why so much focus on the 10-year, and one of the main reasons for watching this in the u.s. is the impact of the mortgages. a lot of the mortgages effectively trade off of this as a benchmark. so when we saw the jump in mortgage rates as carl, we talked about the other day, the biggest jump in percent on record in the recent week to 4.5%, and you look again at a day like today, and you will see the reverberations coming. >> yes, we have, because the

mortgage applications are down, and refinancings have stop and that is something that the fed has looked at knowing that housing is important part of the economy and not just sales, but sales of pickup trucks and contractors feeling flush and buying more. i want to keep an eye on the gold as well, because that fall has been fairly dramatic, and looking at the one-year if you want of the gold, but down today another 2% roughly, and we will call it a little bit more from the gld, the big etf that follows the gold as well. you know the hedge funds out there, and paulson we talk about and david ihorn has a big focus with the main green light fund, but you to wonder where the pain is with this significant fall in a broadly owned asset. >> and remember, that a lot of the structures were issued around the price of gold the investors where they were able to maybe cap some of the downside, but you fall below the

key threshold and the issuers say, we don't want the risk and liquidating the positions so you can get down drafts and 2.5%, and 12.21 on gold and silver and other metals hit as well. it is interesting to look at the price of oil, too, because typically when the dollar is stronger, it is under pressure, but there again, you have the situation of egypt reaction as well this morning. >> and the dow components and the top performing component up 1.4%, and we will get jpmorgan and wells earnings today, and to what degree what has happened to the bond market affect the thick trading or the re-fi market? >> well, on jpm where the fixed commodities can be important, and we saw incredible turmoil in the bond markets and issuance pullback dramatically in the month of june, and that is a question there for both the likes of jpmorgan and morgan stanley and goldman sachs and for wells fargo down to the net

interest margin and how much to benefit from the housing and therefore mortgages and therefore, what does that slowdown mean for wells fargo and how much do they benefit from the increase of the net margin as a result of the higher rates. >> disney is one more component the watch, and just as the side note "lone ranger" pulled in 9.6 million and disappointing and "despicable me" was the number one film in north america, and that is john carter-esque in terms of the poor performance. >> and to point out "john carter" that meant nothing on the stock price. if you bought on any dip as a result of john carter, you would be happy owning disney shares. >> but critic says that anything not marvel or pixar-related will do well. even though stock has done fantastically as we know. >> and you have to wonder how much of this is broader hollywood theme with spielberg

and lucas who said a couple of big misses for the studios for the entire model and the industry to be called into question. and perhaps disney does not suffer as much, because there is concern out there more broadly. >> and the parks and the espn who are the key drivers of disney, and there are pure drives out there when you look at the likes of cable warner, and the net cable studio, and fox to a certain extent now, which is trading up sharply now, and look foing for the news, an fox is now of course, a member of the split company and we have news corp. which is publishing assets and fox which is the broadcast cable and the studio. there's a look at that. seems to have the nationwide sports network of course and trying to compete with espn, but having a nice day on it, are they not. >> yes, very nice. let's go the josh lipton to see what else is moving on this f friday. >> hey, carl. kicking off the session with the green on the screen. listen the dow had been up triple digits in the premarket

and that is as we were busy barbequing overseas, and others were having a historic moment for the ecb and monetary policy saying they would stay easy for a long time and notably devil ish guidance from the central bank bankers, and here the beat upward revisions, and you saw the u-6 uptick, and the jobs created in the soft segments, but some of the traders said good news is good news nfor the the stock market. the concern here is that the fed might taper before the economy was ready for the transition, and now maybe the stock market is saying that the taper is coming, but so, too, is organic growth. one thing, also want to talk about today and the traders on the floor are talking about it, the interest rates and the yields across the curve, the 5, 7, 10, 30, and all new 52-week highs and that is something that we will be watching in the session today. and the levels that traders can watch today. i was on the phone with scott

redler who said he is watching the 50-day moving average of the fpx and it can hold and close above, you will get new shorts and force new money in. and the next level of real resistance is 1640 and 1644. >> great stuff, josh. keeping an eye and the floor there, and some of the consumer names that we were talking about, and again, the average hourly earnings growth at 2.2%, and we have seen that while that is horrible, keep in mind that inflation at this point is only running 1, 1.5% year to year. and if you have disney and park exposure, maybe you are looking at the consumer doing okay, and maybe there is bifurcation, because more discouraged workers. >> and gas prices have fallen 21 straight days and 3.48 is the average and looking for the lowest levels of the year just

as we are getting into the heart of driving season, and that is a plus. >> what it does for the confidence levels and a mixed story. >> i am told by pete najarian our fox colleague that there is a reinstatement to buy gold by goldman sachs. perhaps that is why. >> and that will do it. and let's shift over to the bonds and rick santelli joining us from the cme group with more, ri rick. >> well, the group focusing on the interest rates which by the way are on fire are the equity boys. boy, if you look at the futures down after the futures and we have lost well over 100 points, and the squawk crew is enamored with the number and the movement, and the word of kaug is wait until 4:00 eastern to see how the new marriage between higher rates and equities works out. if you are looking at the 24-hour chart of fives, they zoomed up to 160 to open up the two-year going back the july 2011. and the chart made it up over 270, and we will be comeping

august 1st for a while. it was up 2.0 to 2.25. and open upping up that chart, we are hovering around the same as october of 2011. and looking at all of the maturities and no 52-week here, and the dollar index, buckle up. this is the one, and i bet you that the fords and the caterpillars noticed this blast off, because as we sit, three-year high on the dollar index. all of the levels are based on where the market is closed, and we are quite a few hours from that yet. carl, back to you. >> all right. rick, thank you so much for t t that. let's get a check of what is going on over at the nasdaq, and s sima is over there. >> well, a big story in tech with the latest report showing that thech is ration in the mobile market might not just be an apple story, but a challenge facing the broader smartphone space. apple shares in comeback mode

this week up 6%. isi group with a strong reading with $600 price target on the stock. dell shares also in focus, and they and the pc giant will be exploring wearable tech phase specifically around the watch concept. it is one week since blackberry reported earnings and the stock has fallen more than 32%. the company announced yesterday, it is going to be hosting a special meeting, web cast on july 9th, and the analysts are trying to speculate what blackberry would announce, and the bills a s -- the bulls are looking for the clarifying remarks of the release of the bbm channels and a quick check on the nasdaq. we are up 20 days on the dip of the better than expected jobs report. carl, back to you. >> thank you, sima. when we come back, goldman sachs chief economist will join us, and weigh in at post 9.

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markets are losing some ste steam. the dow is up 66 points and the futures reporting to a gain at the open of more than 150 at least, but we have lost obviously some ground as we continue to watch some of the other markets, too. the 10-year is the big story, and cashin told david a few moments ago that is the tell of the day. we did hit 2.7 and change and now down to 2.68 but that is of course, the highest level since 2011. the dollar is important, too, and the dollar index at a three-year high. this morning 101 yen to the dollar. and gold is off $138 and 1213 and if that is not a new 52-week low. and i knew we were nearing record levels in the session, but we will check that late ore in. >> and oil prices are

concerning, too, with the tensions in e jgypt. we go the jackie. >> like the equity markets we are seeing the prices of oil pear back a little bit, but the strength is coming on the back of the stronger than expected u.s. jobs report and the geopolitical unrest and the tension existing in egypt. tradering are thinking that we will see more demand out of the u.s., and the geopolitical tensions are crucial as well, because we saw a 2% gain wednesday as a result of that. the concern that mr. morsi has stepped out of the picture and the egyptian military is in control, is that there could still be more violence in egypt. keep in mind that egypt is not a oil producer, and we see 400 million barrels going through the suez pipeline, but some traders say that we need to watch that situation closely. meanwhile, the headf of the commodity research at goldman sachs says he is keeping the wti

forecast at 105 for the next three months and citing the reasons in the middle east and tempering it that in the arab spring we didn't see any disruption that was impact afl at this time. in the meantime, i want to bring in jeffrey grossman, the brg growth president, and talk about the numbers that we are seeing today, and the jobs growth, and the oil tensions, and how how could oil go? >> well, the geopolitical tensions are tantamount right now, and in ngt fact, the last $5 or so is exclusively related to the situation in egypt. now, they will bolt ster it to strengthen it, and the market will go with it. but the market is stopping at a technical area 102.60 or 102.80, and that is where it should have stopped. i look at the trading in up thor range which is one that we just broke out of recently. >> talk about the brent wti

spread, because we veen it come up, and we have heard this morning that there could be potentially parity there, and what does that tell you and how soon do you predict this? >> well, we haven't seen parity, but the market is coming in at $25 at one time and now $3 or $4 area, and keep in mind that back in the day, as we say a few years ago, the wti traded over the brent on a regular basis, and again, i have a feeling that has changed and won't change soon. i think that the market may widen out to 7 or 8. >> and quick hit on the gas prices, and obviously in the peak of the driving season ashgts and we haven't seen them rise as quickly as we thought, and when do the wti and the crude prices translate into the market? >> a two to three week gap, and most of the retailers on a slow moving average here, and again, in two the three weeks, you may see a nickel or so higher on the gas prices. >> thank you so much from brg

brokerage. >> thank you, jackie. millions of americans hitting the roads this weekend, but no indication that they are using less gas. we will explain when "squawk on the street" retons. [ male announcer ] this is george. the day building a play set begins with a surprise twinge of back pain... and a choice. take up to 4 advil in a day or 2 aleve for all day relief. [ male announcer ] that's handy. ♪ [ male announcer ] that's handy. (announcer) at scottrade, our clto make their money do more.re (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars.

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i want to take a look at shares of dell computer and interesting week for that stock. it was of course on monday they cited the increased likelihood that michael dell and his partner silverlake could lose the july 18 shareholder vote in which they will vote in favor or against the $13.65 a share leverage buyout of the company.

of course, importantly michael dell not able to vote his 273 million shares there. and competing against the recapitalization proposal of carl icahn as i cited after meetings with the institutional shareholders service, and the international proxy advisory firm and on the dell side be it special committee or mr. dell and silverlake that it did not go well and isi coming out against them. so that is the question. will michael dell and silverlake, and that is less likely, but would michael dell raise the bid in order to secure isi or more importantly to secure carl icahn if possible and i referred to a dinner not long ago in which price was discussed, but the stock is off, because there is a july 18th vote where the deal could go down, and what happens to the stock in you are in a fwho man's land and then you will have competing proposals from the likes of michael dell and carl

icahn and it could be fascinating to say the least, but the dell shares are weaker, largely, because of the fear that the deal will be voted down, and then what happens with the stock. carl icahn could come in and start buying and so could michael dell. carl, a lot of different iterations here. don't have the time to go over all of them, but it is an interesting week, and we are starting to e sea the serious weakness there. >> and think have a business to run day to day, and the global vice president telling the "guardian" that they are considering getting into the wearable computing which is all of the rage these days. >> apparently talking about it is all of the rage, but the focus is on the continued decline of the old pc business at dell and just how bad things are there. >> and yet carl icahn saying that the pcs are not leaving the office space any time soon, so he has made it clear how he sees the value. >> yes, the balance sheet, and putting the numbers together,

but he believes to run the company, and have a company that is not going the go bankrupt, and still generate the significant earn inings from th holdings and the enterprise and the many acquisition that it has done there and to that point that pcs are not going away. >> interesting. obviously, we mentioned gold before the break, and the intraday low was 1789 and the closing low is 1211 and those are three-year number, and gold is going to the woodshed, and the miners, the biggest mining company on the s&p is getting smacked around a declin of more than 5%, and guys we are going to break even for the week. dow, you have a close of 14909 and a slam dunk at this point, and despite the softening action this morning, some of the highest levels of stocks in two weeks. so whether you attribute it to the ecb and the notion of more policy around the world or the jobs number today, it has been worse. it has been worse. >> and rbc just getting several

notes here as people continue to digest this report. there are those among those who saw the growth to picking up to the 2.0 to 2.5% of the pace, and this report is consistent with it, an consistent with the job gains we are seeing 200k for months now, and the fact that the wage pie is running up 4.7% year on year, and that means that practically cements a fed tapering, and it could be the announcement could be sooner than their previous october expectation. so again, one look, i guess at the tenor of the notes coming in this morning which may explain why we are in the situation where the 10-year has moved up significantly, but the stocks are holding in there, and people are hopeful of belter grow bet d not just the tightening of the rates. >> and the non-farm payroll number in, and the question is are you the win over the nail the number contest? if you are, you will take home the tote bag signed by the folks

here at "squawk on the street." we will get to it at the end of the show. >> i loved that interview. >> it is a reminder that the viewers are smarter than any of us. >> enthan we are. >> and when we come back, oh, yes, by the way, it is right here. and you can see cramer's boo-yah! he takes the best spot, because jim generally signs first. >> i want to get that out first so that perhaps the person can enjoy it at the beach. get it out quickly. >> money, gold. >> we could hand deliver it and send it across the kun tcountry. >> and strong canvas and excellent zipper and excellent produck. >> and the stocks are moving higher from the jobs number, and we will get reaction from goldman's jan hatzius, an exclusive. and also an update on the situation in cairo. "squawk on the street" is back after a break. ♪

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to have all our messages in one place. to browse... and share... faster than ever. ♪ it's time to do everything better than before. the new blackberry q10. it's time. welcome back to "squawk on the street." our road map begins with the markets continue ing ing to rea this morning's big numbers 195k and above expectations and we

will talk to goldman's chief economist jan hatzius and what does he believe the fed will do now. >> and samsung bringing phones to the fore. >> and we will get a live update from the ground. and first, let's dive deeper into the jobs number with our chief economist who came close to nailing the non-farm payroll and you won't get the tote bag, steve, but fit had been employees you would have definitely won. >> that is all i want, carl, is the tote bag. and i'm going to need to do better apparently to get it. i'm going to be sharpening my pencil and working on the spread sheet to get that tote bag. it was a robust jobs report, and what is nice about it is that when you look inside of the number, it still looks good. so do that, look inside of the number. payrolls up 195, and the estimate 165, and the unemployment rate is 7.6 which is an interesting development. we will talk more about that, and more people coming into the workforce. we could be seeing that in the

future. robust payroll numbers, and the unchanging rise in unemployment, and the average hourly earnings is strong, and the best month to month change since november of 2008. and the revisions adding 70,000 really helping out the overall picture here. here is some of of the commentary here, and there are the month over month changes. right there, over 200,000 is where we have been, and that is a pretty good sign as compared to where we were last year. now we will look at the commentary out from the economists, and bmo saying that it was not a mind-blowing, wow, i didn't see that coming number, but non-farm painted a optimistic portrait of the labor market. and then this one, people coming into the workforce, and jim sullivan saying that if employment growth looks stronger to keep the unemployment rate trending down, and i disagree with that, and a big debate on

the street, but this one, good enough to sustain the fed's expectations for the fall, and here are manufacturing challenge though down 6,000, and that is going to change i believe because of what is happening in the auto sector in the month of july. services, and the robust report, and the index led you to that number if you followed it this week. and retail up 37, and the hospitality and leisure, and government down 7 and may get worse depending upon how the sequester affects government payroll. i want to look at the wages here. and up 2.5% year over year, and you can see what the robust wage gains are since '09 and not near that, but this one month if it holds can make the street more optimistic about the outlook for consumer spending. more money in the pocket means more money out of the wallet,

guys. >> steve, the big question of how it moves the fed. oo either to or from policy? >> well, the fed is on track for september tapering, and it will be interesting to see how the street settles in on the number. i have a view, carl, but i'm conflicted right now, because we are going to put a survey out to the economic, and the people who are experts out there to see where they come down. all right. i believe a 20 billion incement, and we will see where the street comes in, but if everything goes to plan, and the big impact is the sequester. i have seen gdp estimates as low as 0.5% that just completed and a bun inch the 1.and the 1.5%, and so what we are trading on and thinking about right now is a third quarter and fourth quarter rebound, and again, i have seen the numbers there double and triple where we are in the second quarter and maybe around 3%. >> all right.

steve, thank you for the insight, and we appreciate it this morning, and hey, congrats for almost nailing that number. let's look at the global markets on the heels of the job report, because that is where we have seen the reaction already. jennifer delaney is a emerging strategist for ubc, and david kelly with jpmorgan strategist fund funds. good morning to you both. >> good morning. >> morning. >> jennifer, how worry should we be about the trending emerging markets, because with u is a -- because we saw the message from bernanke on the emerging markets? >> well, we have been negative on the emerging markets for the last ten poimonths. we haven't seen the growth coming back nearly as strongly as we would have wanted to and the second is an earning growth problem, and so despite faster growing gdp, the emerging markets have not managed to

translate it into superior earnings growth, and in fact, we have had zero growth in the emerging markets in the last two years. >> jennifer, do you then say to investors who are looking at the space and seeing the potential for the value, and certainly some hedge fund managers who have seen the value, but do you recommend that people steer clear of this sector for now? >> well, yes, we say to steer clear of it for the time being. we see it with a few pockets of cheapness and they are a big part of the index, so it is flattering the headline comparisons. >> david, what about you? would you guys agree about the vulnerabilities here? >> well, certainly problems in the emerging markets, and i completely agree with jennifer about the weakness in the emerging markets, but it is difficult to time these things, and when i look at the valuations of the emerging markets and the long term growth over the next 5 years and 10 years, i want a position in te mortgaging markets, because i believe they are cheap, and they

will see the fastest growth in the world, so it is tough, but long-term investors need to remember they are long term investors and weather some of of the bumps here. >> david, turning back to the states, i wonder, and we did hit a high today of 2.7 and change on the 10-year, and is that adequately pricing the kind of growth that you expect for the states this year? >> no, i still don't think it is. the problem is that it wasn't a blockbuster are jobs report and the fact that the 10-year moved so much tells you something. it is priced for the e kconomy moving backwards and this economy is forwards and it is not a tortoise or a hear. if you believe in the short term interest rates we should not be at 2.7%, but significantly higher so what is happening is that the bond market is coming to grips that they are in the wrong place for a steadily

improving economy. >> wait, david, if you take that approximation of 2.7 about where growth might be, we have been in the 1.0, and the 1.5 range for the first part of the year? >> well, i disagree a little bit with steve about the labor force, because this economy is not going to be seeing any labor force growth going forward for demographic reasons. so if if u.s. economy is up to 3% growth that will push the unemployment rate down and tighten things, and so even 3% growth in the u.s. economy in the second half of this year, and next year will push down unemployment, and push the rates up to more normal levels and that is what the investors need to position themselves for. >> and we have seen investors moving not just into the emerging funds and yields from those corporations that issue debt in these markets and what does the prospect of higher rates mean for nernlging corporations in these market, and is it being felt?

>> well, the yield among the growing market universe is a growing trend, and you can pick up significant yield in the emerging market universe. clearly higher interest rates are unanticipated and undesirable from the harder hit markets. >> yes. jennifers last word, differentiation, and do you lump them together in nernemerging mt names is an oversimplification, and who is particularly vulnerable here? >> well, if you are in the emerge markets youshg need to be selective, and we would advise advisers stay inging away from american markets and we prefer asian like thailand and latin america, and smaller markets with good growth conditions and we like korea and taiwan which give you a good expose sure to the technology sector which is

one of our most preferred in the emerging market. >> thank you both for your time this morning. thank you. sure. sure. >> and meanwhile, samsung's forecast disappoints. john has more on that from san jose. >> yes, carl. i'm not sure how attractive korea is going to look this morning with one of the biggest stocks getting hit. and it looks like samsung has caught apple's cold. some of the problems that hit apple's shares seem to be catching up to the korea giant, and look at the stock today if it is charted down. better than 5% right now. like apple, samsung is seeing strong growth for the smart phones and still, but also like apple profitability looks like it might be suffering a little bit. samsung is projecting $8.3 billion in operating profit for the quarter and up 47% which is pretty darn good, but the investors wanted about 7% better than that. samsung is the top spender on

the marketing to sell the smartphones which is apparently what is it spending on the galaxy s-4 and that is not apparently panning out the way some people had expected the pressure pressures. samsung is facing similar to the pressures that apple has been facing. the market for smartphones is getting saturated particularly in wealthier markets like the u.s., like samsung's home market of korea. we are seeing the penetration levels better than 50% which means that it is getting harder to find people who don't have the smartphones anymore. you are starting the have to convert people who already have them, and that cost marketing dollars. software and services are an important focus of where the guys are trying to spend and goat people to attach to the brand -- and get people to attach to the brands. apple is set to launch a new iphone in three months and raise ing the stakes on samsung, and attacking the low end where samsung has had a lot more competition, and not only apple,

but mote rolo will launch a phone with custom design options. i have learned over the past few days, you will be able to customize the colors that you want on the phone, preorder, and get the phone within a relatively short period of time. that's a track that mote t-- moo r -- moto row la is trying to track. and so samsung with more competition and pressure on the markets. >> and how much of a phenomenal is this that it is less about saturation, and more about the demand there incredibly weak. is that consistent with what you are hearing? >> well, a little bit of that and europe comes into play a little bit more. demand in china still huge. it is demand at the lower end. apple for example saw the iphone

4 sales there last quarter way outp outpace the expectations, so it is more of a margin issue than sales issue, and like to europe with the problem, because samsung ha had strong sales the there. >> thank you, john ford with the latest on that battle. and the jobs report is what we have been talking about all morning. we will get the reaction from jan hatz ixus and remember he nailed the non-farm number last month, and we will see who nailed it this month as well. and we will go to the ground as egypt continues to unfold. we will be right back. powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. now get 200 free trades

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dow was up 116 at the high of the session and as you can see, we are up just 16, not the one, but just the 16. and meanwhile, the protests continue in egypt as the muslim brotherhood calls for a day of rejection following the ousting of president mohamed morsi, and we have yousef there. >> well, the situation is heating up on the ground, and we have reports that people have n been killed in a pro-morsi march towards the barracks in a part they call new cairo, and it is believed that former president

mohamed morsi is in that vicinity being held, and the protesters calling for a return and also for the military to free the former president. we have no confirmation at this point about the number of fatalities, but we understand that it did get violent, and that shots have been fired, and that is in addition to the violence we have seen elsewhere outside of cairo and also northern sinai. now n the la now, in the last few minutes the apache helicopter gunships have been flying low, and slightly out of the ordinary, and the army has made it clear, they will not tolerate any violent protests, and they have put a lot of preparations in place. we understand when it comes to the suez kale na, they are in a heightened state of readiness, and deployed the tanks and continue to monitor the situation closely, and of course, the muslim brotherhood is defiant and they will clamor to the legitimacy that is maintained in a free and fair election and fight what they call a full military coup, and

you can see right in the background here, right above the nile, the apache helicopter passing by. a bit unusual. >> yeah. obviously, we know about the threats, yousef from the morsi supporters and the question is how seriously we take those. do you see violence? the threat of violence coming more from the muslim brotherhood side or the military side? >> well sh, carl, it is difficu to tell at this point. it is clear that the muslim brotherhood is becoming increasingly desperate trying to clamor and hold on to some level of power and influence they have lost. they have lost so much, carl. remember, that just a few days ago, the muslim brotherhood were running this country, and now ousted and it appears that the military has launched a crackdown on them, and they have pulled the plug on three televisions and on an islamist-leaning newspaper, and arrest warrants issued against them as well.

if the violence escalates will be seen, but the tensions are high, and the military as you can see from the background as well as taking all precautions necessary, and the suez canal. i don't know if you have been there, but you cannot just walk up. it is a military area, and even the reporters have a difficult time to get there to verify traffic or any violence happening in the vicinity. >> and yousef, more broadly, just again, a lot of discussion about the fact that morsi is trying to lead a more or less islamic democracy and failing, and calls into question whether that model can ever succeed, and that is a question, that i'm sure that the region more broadly urgently needs to answe answer. >> well, definitely kelly. a lot of questions here, but what is clear as well in the discussions that are happening as well here within egypt is that the fact that you had a freely elected leader in a newly created democracy that is now

ousted, yes, by the military and the people who ousted nonetheless. what kind of precedent does that set for a region still experimenting with theocracy th united states and europe, and now how can they navigate, because this is a method that works, when you are dissatisfied with the leader instead of dealing with it with the ballot bock, you deal with it by pop u popular unrest, and that is why the u.s. is struggling as e well. president obama has not mentioned the word coup in any of his speeches and the same in the other parts of the world. it is not just condemnation and people hesitant to take the story, but this is the world saying this is a democracy and in the case of turkey, they have condemned it. >> we know how much money is at stake for that vocabulary. thank you, yousef. we will continue to follow this story. and how pain could hurt you if you are planning to hit the

road. and jan hatzius just lowered his gdp, and he will be here at post 9 to discuss that and the big jobs number. we are back in two. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine. plays a key role throughout our lives. one a day men's 50+ is a complete multivitamin designed for men's health concerns as we age. it has 7 antioxidants to support cell health. one a day men's 50+.

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see if they are baare barel hanging on to the positive averages. gold is taking a big hit as the u.s. dollar index hits a three-year high. jackie deangelis is taking a closer look at the nymex. >> well, the gold prices are down roughly 40 and we are looking at the session lows, and meanwhile, the good news for the u.s. economy and that better than expected jobs report this morning that is pushing the precious metal lower and that coupled with the stronger dollar and the higher bond yield as well. i want to draw your attention to the miners, they are being crushed, yamana and others are

going down. and you are seeing the gdp of gold decline as well. >> and we go over to melissa cabruso cabrera. >> we will see if the auto stocks are going lower, because originally they were all climbing in the wake of the jobs numbers and people have more jobs and they can buy more card s. ford and gm in a high, and tesla and gm still in positive territory, and you will see with the highest interest rates is more difficult to borrow for the car. and if you look at the chart, it is a 52-week high. back to you. >> thank you, michelle. traffic can be a nightmare in the holiday weekend as you might know, but this year may not be as bad as prior years. phil lebeau is here to explain and phil, you have not been caught in traffic, i am guessing. >> well, that is right, kelly. this is a bigger story in terms

of the fuel consumption in the united states. and kelly, take a guess of what percentage of households in the u.s. percentage do not have a car? >> do not have a car. do not have a car. 20%. is that too high? >> well, you are more optimistic. >> it is actually, and i'm going to show you the chart here. it is up to 9% which is a record high, but here is what is happening in terms of the fuel consumption in the united states. we are losing the gas guzzling ways for a lot of different reasons, but the implications go well beyond the auto industry, and the number of no-car homes is increasing and the car sharing services are growing and more people in the cities saying i am not going to buy a car and share whether it is zip car or some other program and the autos are more fuel efficient. how much more fuel efficient? well, the university of michigan tracks this every month based on the new vehicles sold and the latest data showing that it ticked lower in the month of june, but it is still 24.7 which is a record high, and look at how much increased since 2007. at the same time, look at the number of no-vehicle households

out there, and you will see generally flat, and then shot up over the last five years, and it is now sitting at 9%. that is the number of a percentage of the no-vehicle households. what has happened here? well, a potential drop in the gas tag revenues with si a growing ree serve. remember the gas tax is how a lot of the states and municipalities pay for the road and the highway maintenance, and if they are not getting the gas tax revenue, who is going to i pa for that and the implication to the retail sectors as well. shopping centers are reporting a slight dip in traffic and not a huge dropoff, but enough to be noticeable. at the same time the analysts are saying that the consumers are making fewer trips. gone are the days of people two to three trips of a shopping center, an instead, one trip, and maybe make it a consolidated trip to buy more and look at the gas lean chart over the last year. the bottom line is this, carl, we are seeing a dramatic change in the united states when it comes to fuel consumption, and it is only going to continue,

because you are going to have more fuel efficient cars and people doing thing likes telecommuting, shopping online, and all of that have implications when it comes to a number of sectors beyond the auto industry. >> driving teslas instead of conventional cars. a lot of things feeding into it, phil. thank you so much, our phil lebeau in chicago. we should note that the markets are negative now. the dow off 130 points or so from the session highs not too long ago. when we come back, goldman sachs chief economist jan hatzius is here, and we will find out at what meeting he believes that the fed may taper. and later on, former governor randy crossner will join us to talk about the same issue when "squawk on the street" continues. ♪ the world is changing faster than ever, creating new opportunities for those who stand ready to seize them. in a time when the biggest risk is playing it safe,

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the traders were pumped about that jobs number premarket, but as art cashin called it a delayed reaction in his view to 10-year spiking and after rising 116 points this morning the dow is now up 1.5 points to 14,990. and that jobs report is coming up better than expected versus the 160 estimate. and we are joined by jan hatzius whose guess was 150 in june, and now what is his guess coming up? have you made a call on the

taper mee meeting? >> yes, it is september. it is not a done deal, but e september. it seems when you take everything together, what they have said, and what you have seen in the numbers, september is more likely. >> and meaning what, that they come out to say starting now we are going to do x or what form is it going to take? >> yeah, i think that the way they would most likely do it is to say that starting next month we are going to, you know, take it down from $85 billion to $665 billion. not say anything about the p pattern beyond that beyond what bernanke has said, and emphasize that number one, this doesn't mean that you are going to get another reduction necessarily at the next meeting or the meeting thereafter, but leaving the options all open, and number two, more importantly to make sure that they say that we are not going to raise the federal funds rate any time soon, because we will stand by the forward guidance of the funds rate, and we believe that is going to take a very, very long time. >> and would that argument be built upon what the unemployment

rate has done? because at 7.6, and having stayed there this month, this is not budging towards their target. >> yes, it goes in that direction, and what we have seen. the unemployment rate did not come down and the broader measures of underutilizatiiliza came up, and discouraged workers and part timers for economic reasons went up, so there is a lot of slack in the labor market which underscores the idea that, you know, participation might start to edge up or at least not fall any further, and that means that you won't get down to 6.5%, any time soon. and in fact, i think that they are going to actually let the unemployment rate fall further before hiking. >> fall further? >> beyond six. and the forecast comes when the unemployment rate is 6.0, and we think that is because there is a lot of slack even beyond the people who are captured in the unemployment rate. >> is the bond market reacting appropriately then to what we

saw today and to perhaps what you are talking about in terms of tapering beginning in september? >> well, it is appropriate in terms of the direction, because it was a stronger than expected repo report. in general, the bond market has a tendency to conflate tapering with hikes in the funds rate which has been true really ever since the may testimony by bernanke to the joint economic committee, and that is not appropria appropriate. it is not appropriate to believe that the first hike is going to come earlier because they are likely to taper. >> i have to say i don't understand why the fed and everyone is at such pains to split the taper from the move in the funds rate? what matters is the sliding scale of how tight the ak co accommoda accommodatetive monetary policy s. so when talking about the tightening, it is not relative to the dictations of the form it is taking. >> well, that is true. the form it take s s is not as e vant, but you don't want too much at the same time.

you don't want to have the market to basically frontload the entire normalization of monetary bond policy at the time you take the first step, because their view is that the economy is not set up for that. >> well, the conditions could still change, but then how would you, and one way for people to think about the taper is mini increases in the bonds rate or something, and would you have a sense of what that would equal out to, increase of 0.1 or something like that? >> yeah. it is probably less than that. i mean, it depends what you are assumed for, you know, the path after that, and so forth, but in general, the tapering by itself should not be a huge deal. it has been a much, much bigger deal for the financial conditions and bond markets than it should be in theory, and the reason is that the bond market has said, okay, this is the start of the normalization process, and we need to frontload all of the normalization process to the greater degree than we did, and that is what the fed is up against. >> what do the higher rates mean

for the gdp, because we have seen the mortgage apps develop, and refinancings, and significant connection of what has happened higher rates and not historically high, but certainly higher than gdp? >> well, it is, and that is the reason that the gdp forecast for the second half is weaker than the fed's. and second quarter is tracking 1.46 and qe to 1.4% and if you look at the forecast, it is closer to the 3, and that is a little less than that. 2014 and 2015 is going to see stronger growth. i agree with that call. i think that the next couple of quarters are going to be relative to the part because of the tightening. >> and the hourly earnings are up 1.4, and away, and is that a sign of things to come? >> it is one of the encouraging

signs in the report. you know, 2.2% year over year here for the average out of the earnings is quite low, but it is no longer quite as abysmal as it was, you know, for most of the last couple of years. >> you want to see the consumers be able to tread the water and that is going to give them a little bit of cushion, right? >> well, i would not expect strong consumer spending growth numbers. it is going to stay moderate if you are going to get the stronger growth, and it is going to come from other areas, and residential investment in particular, and maybe more investment as well. >> one issue we have been grappling with in the last couple of days is the delay of the employer mandate on the affordable health care act, and is that material on the job creation side at least on the small business side? >> i'm not sure. i'm not sure it had a major impact in the reports that we had over the last few months. i mean, there was a lot of talk about it, of course, and it is possible, but, you know, i didn't really see a strong impact, so i would not put it

high up on the list. >> in a word, have we put the lows on the inflation, the way that the fed measures it? >> i think that probably yes, but very, very low confidence call. i think that it is still, the inflation is going to stay low, and still going to be below the fed's target for the next few years. >> wow. that gives them quite a bit of breathing room. jan hatzius and no gift for nailing the number, jan, but it is remarkably consistent. >> i can see that you are broken up about it. >> you will always this have that shirt. >> jan, thank you. over to michelle cabrera caruso. >> you are having a talk with him and if the market is reacting correctly, a ndnd withe rise in interest rates looking at the home builders, that will translate to higher mortgage rates and they are whacked across the board. lennar is lower by more than 4%, and the rest of them lower by 3% and approaching 4% and remember, this is a group that has been hit, as you can see for xexampl

in the home builders index, because of the anticipation that pap tapering is coming sooner rather than later. david, back to you. >> thank you, michelle. now the latest on the situation in egypt of course following the ouster of the k country's first islamist leader morsi. on the line is the north african correspondent with the "financial times" and can you bring us up to date to what is going on, in the streets, and the supporters of morsi. >> yes, in the mosque in eastern cairo, there was a large gathering of the pro morsi demonstrators approaching the head quarters of the republican guard which is a unit of the egyptian military, something happened, shots were fired, and at least one person is dead. news agencies are reporting up to three people dead. more crowds came, and more people came, and more shots and

tear gas fired and more people are coming, and there are apache helicopters hovering over the scene, and the situation is tense, but calm as prayer time approaches. other reports are saying that the protesters are breaking rock and getting ready for another round of clashes. >> any sense, borzou, how long this may continue and what the willingness of the muslim brotherhood to take it to the streets is in terms of the days or the weeks or the months? >> well, the muslim brotherhood is very determined to take this into the street. i think that the supporters are outraged that a president that they elected has been overthrown, and in what they see is a military-backed coup d'etat, and they believe that their president was a legitimate legal president internationally recognized and they see it stolen away from them. their supporters, and their leaders rather have called on the supporters to engage in

peaceful protests burk as spro have seen in egypt in the last several years these protests escalate and one yahoo to throw the stone, and the clashes erupt. >> borzou, can you comment on the extent to the islamists using this and reacting it to, and the youtube videos out there and what not will inspire or allow people to seek martyrdom out of this? >> well, i don't know about the martyrdom, because this group that is stripped of power is conservative organization, and steeped in principle and continuity and i don't know if they will -- i don't know if they will turn into -- i doubt they will turn into a violent jihadi organization over this, but i do see a potentially prolonged period of instability for egypt and other arab

countries as islamists around the region who had been entering electoral politics, and looking at the egyptian example and say, ha, so that's what they mean by democracy. if our guys win, you take the presidency away from us and throw our leaders in jail. it is only if your guys win that it is democracy, and i can see a prolonged period of instability with this as the sort of r rallying cry. >> certainly not going to help the egyptian economy. borzou, daragahi with the "financial times" thank you. we are continuing to dig into the jobs number, and come up former federal reserve governor randy kroszner will tell us if it is good news and what it means for the dreaded "t" word, taper. and we will also have a conversation about whether

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volatility today as a lot of people predict. the sector map shows the half of the components or the sectors in the green, and health care leading the charge, utilities and the laggard as they have been for some time. >> financials falling from first to third, and health care leading the way and utilities getting hit hard, and this morning the big story is the monthly job report. and we are joined at post 9 by a ceo who is bullish going into

the second half of the year even though his clibts a s aclients . fred freedman is from deloitte. good morning. i want to hear what you are hearing from the client, because there is caution that is not picked up in the report. >> the clients are cautious, and they are lacking the confidence still, and they will start hiring when they get the confidence, but right now, a little cautious are the cfo survey indicated that cfos believed that the revenue would increase 6% this next year and 10% on the earnings, but lacking confidence right now, i think that the jobs report helps, because, you know, confidence comes with the demand. and so this should be assistance to them. >> and there was some inconsistency of the report of people working part-time for economic reasons meaning that the employer may not have had the business in place did spike, but i wonder if this is not cfos being cfos and being more cautious and prudent than the

drum beating they are hearing from the bosses? >> well, you are right. cfos are cautious for sure, and they are probably a reflection of the ceos oftentimes burk certainly, we are seeing the cfos saying they are more opportunistic and looking for ways to use the cash and scale and grow rather than contract and become restrictive, so i think that things bode well for the last half of this year and the first part of next year. has the conversation amongst cfos switched from buy back the stock and up the dividend from the turn of the year to the more cap x hiring in the general sen sense? >> i think so. i think so. and i will tell you why, the underlying things, and the jos s report today, we saw it with leisure up, and retail was up, and we saw services and businesses way up, and

construction way up, and the leading indicators of housing have been up, so more capital orders have been up for the last couple of months, so they are certainly a little bit more bullish, and they will start to use the cash in a way that corresponds with that. >> what are you hearing from the clients about obama care both before and after the latest move? were they looking to say i have to be below that and obviously dealing with a lot of the larger companies, but how is this reverberating? >> well, obama care is uncertain, and they don't know what is going to transpire and when it is going the transpire, and they pushed it back a year now. i think that there is a lot of uncertainty. we do deal with large companies mostly, and many of them are prepared and doing the planning for it, but i think that the jury is out on the impact that it will have on them. >> and a year delay sounds like a lot, but when your business plan is 3 to 5 years, it is not as if you will make a bold call as a result of the 12-month delay on the mandate. >> absolutely right. they are planning and still trying to figure out how it will impact them. time does help them sometimes to figure out the next step, but they are still in a wait and see

attitude. >> and so relative to the recession, and where does the cfo confidence stand? >> much higher. much, much higher. we have been in the recession for quite some time, and it has not been the recession for the last four off years, but the slow growth has made the cfos cautious, but we are seeing us come out of it at this point in time, and the statistics, is it sustained? is it going to last? are we on a roller coast e or o -- coaster or yo-yo, and if we continue to see the jobs added as we have nn the last three months, that i will gain confidence. >> and fred friedman from deloitte, off to see some hospitality work? >> yes. >> thank you very much. >> thank you. and now close tlo flatline, the dow sup 4 and we will talk to the former fed governor randy kroszner to see what the fed's

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nice shot of the river there in chicago. let's get to rick who is not too far from it with the santelli exchange. hey, rick. >> hey, what's going on, carl? you know -- oh, helicopter ben! that's what many people see. i love that commercial. we have a helicopter. we have a helicopter ben. because every conversation and almost every guest, the conversation goes 195,000, that was pretty darn good. maybe the only thing that wasn't very good was the, well, 4.3, 14.3 on the underemployed versus 13.8% but the conversation still continues to be the fed. here is why it shouldn't be the fed. first of all, 15,112 is where dow futures were right before the number. let's see where they're at now. 14,920. we've lost 190 points from the

highs, and that's what matters. now, if you were to look at the dax and cac, the dax was over 8,000. it lst 180 points. the cac lost 70, 75 points and the dollar index went straight up because all the pieces went down. and unlike last month and the month before that, canada, one-tenth the population, had a very weak report. they didn't really have the type of job creation. but let's try to put all this and wrap it up nicely. when i look at what's going on, i see a 90-day forward rate, euro dollars, not the currency. they have sold off in certain months, 18, 19, 20 basis points. i look at what's going on in fed funds. they have sold off. i look at interest rates and i see the highest yields in a five-year in two years and 10s and 30s not far behind. but what does everybody else see? especially the fed? all the fed speak coming out, market and fed funds is wrong,

ten-year rate doesn't understand our message. the cutest tweak today is, you know, the taper. the taper is here. wake up. the taper is going to be here. i say wake up, interest rates are here and the market is awake and i think that's the vaable we should pay attention to. listen, we're not at the highs. we're certainly not at 12,000. fed, don't fight it. embrace it. the market is doing the heavy lifting. back to you. >> all right. rick, interesting point there as we continue to try to digest this. the dow is only up about four points. certainly some concern there still lingering and as we pointed out, the 10s, 30s curve flatter as well. now, the samsung slow down smartphone sales falling short of estimates. the question is whether this presents an opportunity for buying apple. also fears of fed tapering is hitting stocks today. randy kroszner will be here to break down his few in a couple minutes. don't go anywhere. aving triplet. [ babies crying ] surprise -- your house was built on an ancient burial ground.

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next hour, hopefully talk to them on air. >> what you can do to win lately is just take last month's number and guess that. >> that's right. as may was revised to what june ended up being, 195. >> the growth in general has been so consistent and not just since the recession but really over the past decade. i know we have mentioned this before, but it is extraordinary. we've now had 12 months with 100k plus number. we haven't had that since 1999. >> that's an amazing statistic. there was always that outlier month that ruined the year essentially. >> people have been saying why haven't we got that number that's come in way below or way above expectations. is there a vix for the nonfarm payroll? >> you're always inventing new indices. you want gdp futures. now you want the vix for the jobless rate. >> yes. get on it, people. >> meantime, we're keeping a close eye on some home builders getting smacked around hard

between the gold miners and home builders, you're looking at losses in the 3%, 4%, 5% range. with all that in mind, let's get to what else is coming up. here is what you missed if you're just tuning in. >> welcome to "squawk on the street." here is what's happened so far. >> i think volatility is back after a number of months of below volatility increase. i think the flow argument is what matters. every time the fed does more qe, it increases more expectations. it desensitizes the market. >> up 195,000. unemployment unchanged at 7.6%. >> steve, i do congratulate you. you got it very close to the number, and if you bring is tote bag down here, i will sign the heck out of it for you. >> you're a gentleman, rick. >> we're looking at a very strong nonfarm payroll report. it means that the economy is

improving. it's on track to at least pick up a little bit of momentum. >> he surprised everyone last year with whatever it will take. yesterday was basically an as long as it takes. that gave everybody a big boost. >> our view is if you don't have to be in the emerging markets, then don't be. we don't actually see a cheap asset class. we actually see an expensive asset class with a few pockets of cheapness. >> have you made a call on a meeting, a taper meeting? >> we now think it's going to be september. it's not a done deal. it could still be december but it seems to us when i take everything together what they've said, what you have seen in the numbers, i think september is more likely. >> good morning. hope you had a great fourth of july. we're live at post 9 at the new

york stock exchange. we were up 116, currently up 21 as there's been a bit of a delayed reaction to the jobs number which was a beat. s&p hanging in right below the 50-day moving average at 1620 and the nasdaq is up about 13. buffalo wild wings rallying this this morning. stock is upgraded to buy from hold. analysts citing lower operating costs as well as lower prices for chicken wings as the main reason for the upgrade. meantime, lululemon down over 1% today. lululemon chairman dennis wilson said he would sell about 3.4 million shares in the company, dropping his ownership stake from 28% to 25%. wilson stands to make about $200 million from selling those shares. >> not bad. the big story today as we look to the road map is the jobs number and the u.s. economy adding 195,000 jobs in the month of june. that did top estimates and we'll get a take from a former fed governor to tell you what it could mean for the central bank's next move. also stocks looked like they

were going to rally but the dow is hovering right around the flat line. we'll follow the latest moves you need to know. and following the latest on egypt. the muslim brotherhood calling for massive protests today in what they've dubbed a friday of rejection. we will go live on the ground in cairo. >> first up, as we said, the jobs number coming in much better than expected. want to get some insight as to what the fed's next move will be. randy kroszner is a former fed governor and economics professor. great to have you back. welcome. >> happy fourth. >> your point largely is to look at the trend, not just this month but the past few months, and we've had a couple calls this morning that the fed could announce a taper in september orb october. you don't see that as out of the realm of possibility. >> right. what the fed does, it doesn't react any one particular month but we have seen the stronger visions up for the past two months so now you have three months of solid job growth.

i don't think you're going to hear the word taper coming from the chairman's mouth. i think you may have a step down in the asset purchases in either september or october, but he's not going to say that, well, now we're going to take this down and keep taking it down. i think they're going to take a step down, they're going to see how the markets react, how the economy reacts and then potentially take a further step down at the beginning of next year. >> right. how off in the distance do you see an actual rate hike? >> that's still far into the future. i think they've been at pains to say even if they start to reduce the amount of asset purchases now, that doesn't portend this they will suddenly pull the bunch bowl away. if you look at the most recent fomc forecasts, virtually everyone at the fomc says it's going to be 2015 before they start raising rates. i don't think anything we heard today will change that. >> hasn't the punch bowl already been pulled away though in if you look at the ten-year going from 1.66% to 2.70%, in other words you could equate that to

increasing the fed funds rate by let's call it a percentage point, throw in the drop of inflation expectations, maybe 1.5%. in some ways we've already moved significantly on that front. so it's less a question of what is going to happen than how do we digest this move already. >> so i wouldn't go quite as far as 1.5%, maybe 75 basis points. it's been interesting to see the sharp market reaction to this. but in some sense this is what the fed wanted to do is experiment now while they're still providing the liquidity by buying those assets. but start doing what i call open mouth operations rather than reducing the open market operations. they started talking about pulling back a little bit to see how that would affect markets and the economy. i agree there has been a little bit of tightening that has occurred. omaha what will happen is when they do start to reduce the open market operations you won't get the sharp reaction you did back in 1994 when suddenly the fed

pulled back and interest rates skyrocketed. >> right. we've talked to a lot of fed watchers who argue that the committee is prepared for a fair degree of heartburn. these open mouth operations that you referred to, do you think they've essentially gone as the fed had planned it? >> i think there is a stronger reaction than the fed had expected. chairman bernanke effectively said so in the -- in his remarks. others have said that also. clearly, they've been trying to pull back the expectations because i think they really want to try to separate out the reduction in the rate of asset purchases from interest rate increases. but exactly as you guys had said, some of the interest rate increases have already occurred and that's a little bit more rapid than they had expected. but in some sense it's a good pretest. they will be able to see if the economy is robust enough to withstand that. >> it's actually going to be the hugely important question, randy, and i suspect it's one reason for some of the market volatility here because, frankly, the answer is very simple.

we don't know. we don't know if the economy is strong enough to handle this kind of tightening. what's your guess? >> no, i think -- in some sense the fed doesn't quite know. that's why they're doing this pretest now to see because they probably aren't going to do anything with respect to the reduction of asset purchases until september or october. that gives them time to see how the economy is reacting because they want to avoid -- now they have avoided the spring swoon but they don't want a summer swoon. we'll see if the economy is robust enough. i think it's likely to be but there's still a lot of variables. we have our friends around the world who are trying to make things for difficult for us rather than helping us to grow. >> is that how you read it? it's interesting to see how the bank of england has said, thanks a lot, now we have higher rates, our economies can't handle it and they're trying to push back. >> it's interesting they're now adopting the open mouth operation approach that the fed has had. because they had not given this so-called forward guidance, and now they're using exactly the same tool, a tool about expectations, not about current actions, to affect interest

rates and the u.s. is using that tool to try to prepare people for something moving up and, of course, what drag hawaii is doi doing is trying to get people to expect -- >> randy kroszner, thank you for your time this morning. have a great weekend. >> great. >> michael jordan is a name randy knows well. turning to the global markets at the end of this eventful week, we're joined by david seeberg and patrick legland the global head of research. david, let's talk with you first about the levels we're at. again, this 1620ish, 1622 resistance appears to be pretty firm. had you hoped earlier this morning that that might have been tested and beat? >> yeah, actually i did. it was interesting.

the market -- the traders loved the fade gap opening. i think that's what we're seeing a little bit of right now. we opened up strong and we're pulling back a little bit. light volume day. i get that. i personally believe we're going to trend higher as the day moves on. albeit light volume. but i'm absolutely -- i was a little shocked because i did expect the market to really respond a little bit better to this number and stay afloat. you know, last time i was on we talked specifically about the anticipation of what was going to happen when the employment number came out and there was all the tapering question that was in the air. bernanke on his last, you know, go around took that overhang off and today was very different. there wasn't the talk about tapering. there wasn't the concerns about tapering. that was sort of alleviated from the entire part of this number released today. >> patrick, what's your take here and especially kind of given the reaction we saw not just in the u.s. but around the

world really? you'd almost expect u.s. assets to hold up better than any other part of the world given the strength of the dollar here as well. >> these figures really confirm our view which is that the u.s. economy is in a strong recovery mode at one signed and on the other side it's really a great opportunity for reinforce on u.s. market all other areas in a very sharp slowdown as in europe or a real financial crisis, emerging markets. keep a strong stance on u.s. equities on the back of the figures. >> did i hear you say a real financial crisis in emerging markets? >> yes. what we see is really a problem on high yield and high grade credit. we have had the larger amount of investment and investors are looking for liquidity and are pulling out these funds outside of emerging market to go back to

u.s. and to a certain extent to europe. when it will happen, it's not an area to invest. >> you mentioned the light volume we're seeing today. we understand why that's happening, but i wonder how long that's going to stick with us if that bleeds into next week. at any point will a move above or beyond certain key levels be meaningful if the volume remains light? >> yeah. we talked a little bit about the light volume much, much earlier in the process when i was on maybe several months ago. the volume is not necessarily the biggest concern for me. you know, i'd say the winners in this market have really been the fedamentalists. they have embraced fed policy and looked at the fundamental. we have seen a strong advancement in the fundamentals of a lot of companies. they had tight balance sheets. the profitability and the margins have improved dramatically, and those embracing the fed policy in combination with that have been

the winners. so, again, i have said it before, there's not many places where you can get a growth in yield and i do believe that, you know, volume -- i know you question volume, whether or not we need it to go higher. i don't know the volume is going to necessarily be there on the upside. and i'm not super concerned about that, but i do see the market trending higher still. >> david, just a quick question. we just saw schwab up 3%. the financials generally are taking this perhaps swms you might expect if you look at the 10-year alone but better if you consider what's happening across the whole curve and some of the growth worries. >> no, they definitely are. i know everybody is super concerned about rates. you know, the one thing i'd say about rates is rates with inflation that's a problem. rates without inflation, it's not a problem. it's actually relatively healthy. we don't have inflation right now. inflation is not an issue. the fact that rates are going up, i view that as a very, very healthy thing. i think the market will continue

to run higher and again i don't have very many concerns about that. >> all right. as randy kroszner said, time will tell. david and patrick, thank you both for joining us. >> thanks, guys. it is a big day in egypt. the muslim brotherhood calling for massive protests in what they call a, quote, friday of rejection. all of this coming after the military removed prime minister mohamed morsi from power two days ago. yousef joins us now live in kay row with the very latest. there are helicopters behind you last time we spoke. what's happening now? >> reporter: that remains the case. thousands of pro-morsi demonstrators gathering close to where it is believed the former president mohamed morsi is calling he be freed and returned to his post. they have vowed to fight and clamor to what they call his legitimacy obtained in a free and fair objection. the army remains on high alert. richard engel was on site and

witnessed the clashes that happened. at least three people have been killed. nothing official yet as such, but we're keeping a close eye on the violence as competing rallies take place. now, it is unclear as well how much further the violence could escalate, especially given the strong army presence and as you mentioned the helicopters that are, of course, roving around this area and elsewhere across egypt. >> thank you for that. we'll keep a close eye on cairo as we get sunset there and we'll see what happens as they go into nighttime and the crowds continue to gather in tahrir. back in the states, what the heck happened to samsung? a slowdown in phone sales hitting the company's bottom line. we'll tell you if this might be the end of their rapid growth. first, rick santelli watching some markets around the globe. >> it's just absolutely amazing to see the breadth of the move in the interest rate curve, the short curve, the euro curve, to watch foreign equity markets along with ours give up pretty

much huge numbers. why? what's going on? we're going to talk to sergeant jeff carter in about ten minutes and he'll give us his take on everything going on on this monday that turns into a friday all in ten. mine was earned in djibouti, africa. 2004. vietnam in 1972. [ all ] fort benning, georgia in 1999. [ male announcer ] usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection and because usaa's commitment to serve military members, veterans, and their families is without equal. begin your legacy, get an auto insurance quote. usaa. we know what it means to serve. the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade,

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the blisters were oozing, and painful to touch. i woke up to a blistering on my shoulder. i spent 23 years as a deputy united states marshal and i've been pretty well banged up but the worst pain i've experienced was when i had shingles. when i went to the clinic, the nurse told me that it was a result of having had chickenpox. i wouldn't wish it on my worst enemy. welcome back to cnbc. we have a market flash for you. we're going to show you the banks because of the rise interest rates today. we spent a lot of time talking about how the ten-year yield is hitting multiyear highs.

the yield curve is getting steeper. take a look, even as we have seen the markets come well off the highs today, the broader market, the regional banks are all higher by 2%, 3%, nearly 4%. in fact, if you look at zion bank, key bank, they're up 50% over the last year or so. remember, when the yield curve gets steeper, their profit margins get better. you put money in a bank, they pay you nearly zero on that but when they lend you money to buy a house they're going to charge you more. >> samsung's latest quarter a big disappointment. our jon fortt has more on that story. morning, jon. >> morning, carl. sales are doing fine but growth isn't what it used to be. samsung says to expect sales of around $50 billion in its second quarter and operating profit of about $8.3 billion. analysts wanted $8.9 billion in operating profit on average.

now, that $8.3 billion in operati operating profit, it's still 47% higher than a year ago. revenues nearly 20% higher, but the worry is that the galaxy s4 which some expected to dominate, take share from apple, isn't living up to the grandiose expectations. that possibility is at odds with a report out a couple days ago that said sam song has sold 20 million s4 units in four months. if that's true, that's 70% faster than the s3. what's less clear is how much samsung is having to spend on marketing. the suncu.s. is their biggest market. it's estimated samsung spent $400 million on u.s. marketing, more than $60 million more than apple spent. samsung spent another $200 million or so on promotions. that would mean sam sosung spen twice as much on marketing as

apple did taken in total. this year jay-z alone trying to add more. we expect multiple iphones from apple within about three months. question is will apple come in at the lower end of the smartphone market and even challenge samsung more in an area where they haven't had a lot of competition? as i mentioned earlier, google with motorola also coming out with the moto x. >> it has an "x" in its name, has to jazz things up. jon fortt, thank you for that. huge moves in commodities. gold is down over 3%. is the $1,000 level close to becoming a reality? we'll talk technicals coming up. we'll be right back. ♪ ♪ unh ♪ ♪ hey!

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dow is up 23. let's get to rick santelli in chicago. hey, rick. >> hi, carl. well, everybody down in the trading floor is still trying to digest exactly the best way to proceed. you saw the data this morning. let's start there. anything jump out at you? >> i think the interesting thing you have talked about earlier today, if you look at sort of the midpart of the euro/dollar curve and then the bonds how they got crushed. >> i'm looking at the gold contract. some of those were up 31, 32 basis points. that's a very large move. now, do we see the normal players help cushion some of these sell-offs? in other words, in the old days in the pits before computers, the market makers were there to tighten up the bid offer spread. it doesn't seem there's a community doing that in the cash treasury markets anymore. >> no, i don't think so. i think the market has changed. i don't think it's for the better or worse or whatever. it just is. so you have to deal with it and you have to position yourself to know and expect what's going to

happen. so you get instead of a one standard deviation move on a day like today, you might get a two standard deviation move. the market is a little more volatile, especially in the interest rate markets. i think the increased volatility over the last month is a telltale sign of what could come. >> some of the biggest bond fund managers both on the fed day when we were 60 basis points lower in yield than we were now, that doesn't include the big move in may that was another 50 or 60. >> right. >> they're still most likely the wrong way. many bond funds say we're going to test 2.25% again. i don't think they anticipated testing 2.75% first. >> i don't think they did either. even though the central banks came in let's say yesterday in europe and china's central bank, too, said we're going to reduce factory excess, i think that they think our central bank is going to step in and be a big buyer. i'm not sure if they can be a big buyer. i think they can try to job own

rates down but i think the market is starting to wisen up. >> even though i hate to get into this, we have to because so many people are already in the tunnel of the fed. okay. so from the perspective of, okay, i believe it's the markets. markets are flexing their muscles. >> right. >> the fed is going to look at this. do you think that they are going to embrace the idea that higher rates are going to come or happen or occur in greater intensity or do you think they're going to try to moderate this move or continue maybe to buy more treasuries? >> i think the fed guys that have the ear of policy right now see themselves not as participants in the market but puppet masters of the market. they think they can control it, especially over what's gone on since 2008. and i think they're confident they can exit in a timely manner that's not going to cause a ripple in markets. i think they're wrong about that and i think the bond vigilantes will wake up and get ahead of thome. >> many traders said it's going to be messy, the exit.

are they going to be able to get us back from mars back to earth or back on the aircraft carrier, but this is the messy we were talking about. this exact issue. that the markets really aren't taper tight mechanisms. they're kind of all or none mechanisms. >> yeah. markets price in all the public information and expectations before anybody else does. so even like today in the s&p, you look at that big rally. yes, the day before it was rallying, so it priced it in, now it sold it off, so it's profit taking, right? so they don't always work the way you expect based on the numbers, so you kind of have to watch them ahead of the np and that's what we're starting to see in the long end of the ten to five-mart -- >> so chicago guys on the knee jerk and the sweating hedge funds on what's left. carl, back to you. >> thanks so much. >> the bells are about to sound across europe. pressure on that trading session after the jobs report here today.

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the european markets are closing now. >> markets have just closed out the week across continental europe with shares ending lower today even after the better than expected jobs number here in the u.s. the index moved higher right after the jobs report but dipped back into negative territory not long after.

developments in portugal remain firmly in focus. that country's prime minister says he has assurances from his junior coalition party that the parties will reach an agreement on government stability. investors also keeping a close eye on greece. that country hoping to reach a deal with its lenders to free up more aid by monday. ali rend, vice president of the european commission says greece's last tranche of aid could be made in installments which would continue to keep the pressure on greece. once you're involved in one of these programs, it's quarterly, now it could be monthly you have to report back. simon really should have been here. so much happening. we've got the ecb, mark carney at the bank of england coming out with a statement and then the forward guidance. >> it always works that way. we hope to have him back next week. let's bring in josh lipton. >> we have given up a lot of green right here. you had that jobs report, you saw a beat. the upward rerevisions, but the dow is now up just 15.

traders i'm talking to pointing to a few different factors. one will say the technicals. the failure of the s&p to break and hold above its 50-day moving average or short-term trend line. also rising rates. yields across the curve, the 5, 7, 10, 30, all hitting new 52-week highs. so questions about what that means for growth for corporate funding costs, for mortgage rates. you can really see the pressure in those rate sensitive sectors. in the s&p, utilities your worst performers. names like eix and aee. also the home blrs, toll, lennar, the etf down 2.5%. the stronger dollar, you saw the dxy jump. gold takes a hit. you look at some of the gold miners, gdx down about 50% now so far this year. guys, back to you. >> thanks, josh.

on that note, let's pick up on energy and commodities. see how they're reacting to the stronger dollar. the answer, not great. >> let's start with oil prices. you know, stronger dollar would usually push them down. today we're bucking the trend. oil is continuing its gains on the back of the stronger than expected jobs report here in the u.s. the idea, of course, that the u.s. economy is improving will help boost demand for oil. geopolitical issues are still a focus for traders. they are keeping an eye on egypt where after the ouster of president mohamed morsi, they are looking for potential of more conflict between the morsi supporters and the military that is now in charge there. keep in mind though west texas intermediate is rebounding and coming closer to those session high that is we saw earlier this morning. 102.65 and traders are citing that as a technical level. some of the top gainers on the s&p 500 energy sector. apache, national oilwell hand

halliburton. switching gears to gold, you were talking about it earlier, that strong jobs number but also the stronger dollar is really where we're seeing the impact there. you also have rising rates and yields on the ten-year pushes the precious medals down. rebounding off the session low that we saw earlier, $1,206.90. those miners, let's bring up a board, they are getting crushed. names like yamana and newmont mining. >> want to look at some of the key technical levels to watch. narcotic is the chief technical analyst with graywolf excuse partners. good to have you back. >> thank you. >> let's talk first about crude, where it is technically. >> the move over the last couple weeks is a bullish short-term development for crude. getting above $100 has been important. this marked the highs really not only of february but september last year and so that's suggested near term we can drift a little higher. crude has moved about 10% or so

in the last couple weeks. my thinking is it gets up to an area near $104 to $105 a share before stabilizing. >> when do you think the peak is? we have to deal with season seasonality. >> crude still tends to trend higher. we bomb to the out between december and february and trend up until the fall. august to september is when crude often peaks out. there's a lot of refiners that start to concentrate on inventories in heating oil. near term you can still move up. it's no the same move as 2007 but crude has been relatively range bound as this daily chart shows. once you get up near $105, i expect you can stall out. if you get through it, it's likely we can move up to $110. that could be a bigger move forw ti. >> what happens to the relationship between west texas and brent? does that go to zero? >> i think it does go to zero in the near term. it's moved up over $20 in the last year. so it's had a huge run. as you mention, the majority of the move has been in wti moving up. i think that can continue.

i don't see it getting back above zero. i think we probably will peak out and brent probably will catch up. >> i don't think you built a dollar chart but just to correlate the dollar to crude, is the dxy overbought? >> a little overbought. had a huge move this morning after the jobs report. we got up right near may highs here 84.5. that has more bearish implications for the you'row and pound sterling. but really the dollar should continue to trend up and that could be somewhat of a negative with concerns to exports, gdp growth, and this and that. obviously pressure on the currencies, everybody is worried about tapering. >> heading into earnings seasons, too. s&p, are we still in a 50 day moving average conversation? >> it's still tough to make much of this move weep seen over the last few weeks. the trend has been lower since late may. this manufacture is in the context of the choppy down trend

we have seen since late may. it's tough when you look at seasonality, coming into second quarter earnings. that tends to be a time that's more bearish for the s&p coming between mid july and early august. really still the time between may and october is negative for stocks. momentum has seen a big hit based on the move down in may. we've seen a big rollover in things like the technical indicators. despite the fact they have had a little bit of bounce and it has been lighter volume in this holiday period, we still haven't gotten above levels near 1630 that are important. we hit that earlier this morning, backed off about 15 points right away. that continues to be the area that at least i and some other technicians are watching on the upside. >> 1630. i think some people had hopes for that number being maintained today. didn't happen. session is not over but it didn't happen in the early going. always great stuff. nice call this morning. mark newton. >> and as we focus our attention on the stock market reaction today, we're also taking a look at the exchange itself.

eamon javers has some news out of washington. >> it looks like there was some kind of market trading glitch here this morning at the nyse. we're looking into more details as of right now. it looks like there was a network outage at the nyse that affect what had they call the sip fee, the consolidated feed. i'm expected they will put out a notice to its members later on today. we might get more details about exactly what happened. but eric over at nanex in chicago spotted this for us this morning. he said according to his data he's looking at in realtime, it looks like the outage lasted about 42 minutes this morning from before 8:00 a.m. until after just about 8:42. it encompassed the period of time when the jobs report was released. he says that what he's looking at, the data he's looking at, shows that it was unable to send quotes to the son sol daconsoli.

we're going to look at this and try to figure out exactly what the impact might have been here but it looks like there was a network outage this morning and we'll get more information about it later on in the day. guys? >> eamon, thanks. 8:42 would have been right around the time i think that the ten-year popped. not that it is something that's traded here at the nyse obviously but we know how interlinked these markets are. it will be interesting to see if that's one reason for the delayed reaction. >> that's right. we also should say we asked the s.e.c. for comment on this this morning. they have declined to comment to us so we're going to have to wait and see what they have to say about it, too. >> eamon, thanks very much for reporting on that. eamon javers from washington with the latest. in just a few months after hurricane sandy, the boat industry is back nationally. mary thompson is here to explain. mary? >> hey there, kelly. boat sales are up and they're actually getting some help from higher prices on land. we'll have that story coming up after the break. mine was earned in djibouti, africa. 2004.

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mary thompson joins us with more now from viking yacht headquarters in tuckerton, new jersey. ha mary, love the shades. >> you have to have them. it's so bright out here today. this is really a perfect day for this kind of story. kelly, you know i am aboard a 70-foot sports fisherman custom made by viking. it will cost you about $5 million. large boats like this, of course, accounting for a small percentage of unit sales but a significant percentage when it comes to dollar amount in the boat industry. keep in mind that 95% of all boats that are sold here in the u.s. are actually on the smaller side. under 26 feet. not the 32 to 34 that would put you in the yacht division with a kitchen. the national marine manufacturers association's carl blackwell saying sales for the industry were up 10% in 2012 to $36.5 billion and are tracking for a 5% gain in 2013. >> consumers are a little more

confident. we've certainly followed the consumer confidence index, and as home values increase, discretionary income increases, and boat sales follow. >> now, according to sold boats.com, may sales were the best month since 2009 with over 3,700 boats sold. sailboat sales were up 5% and powerboat sales were up 4%. powerboats make up 80% of the total market. larger boat sales were strong as well with the exception of those between 45 and 55 feet. they were down but just slightly. for marine max selling beats from $13,000 to $2.5 million, sales have been good but not great. the president saying for some of the bigger boats, financing has been tougher to come by. while boat sales spiked 30% after katrina, an anticipated jump in the northeast after superstorm sandy has why et to

materialize. >> people are still working on their boats, getting insurance checks, so i think that it hasn't hurt us, it hasn't helped us, but eventually it will create a lot of business in the service department. >> now, here at viking they say that sales are about 80% of where they were in 2008 which was the peak in the boating industry. they say recently they have seen a pickup again thanks to stronger stock market when you talk about higher end boats. back to you. >> mary, for your last live shot, i want to see you fire that thing up and pull away from the dock. you have to promise me that. our mary thompson looking at some of the toys of the summer. >> that would be dangerous, carl. that would be dangerous. i'm bad enough in a car. wint want a boat. >> thanks, mary. big change for the new health care law. the white house, of course, delaying that employer mandate for a year. we'll tell you exactly what it means for business and for your health care when we come right back. i'm scott cohn.

we're getting ready to stop down america's top states for business on cnbc and our special website where we also have lots of special features on the change in competitive landscape. you know there's been a big domestic energy boom. we're looking at how the search for shale oil, fracking, is really shaking things up. also the states are a lot stronger financially than they have been in a long time. we'll see what that does to the rankings. we want to know what you think as well. please follow me on twitter and use the hash tag top states. ♪

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the white house delaying that employer mandate portion of the massive health care overhaul. for more on how this might have impacted business and their employees going forward, bill george, the harvard business school professor and former medtronic ceo joins us from houston. great to have you back. good morning. >> great to be back with you, carl. >> bill, let's start out by saying you think delaying the mandate is a good thing, right? >> i think so. i think this whole system is so complicated that there are going to be a lot of unintended consequences. i think it gives employers a little more time. the big issue is with small business. large business will continue going the way they're going providing their own health care insurance, but i think at the small employer level, this is

where a lot of disruption will take place. some people trying to keep below the 50 employee limit. it's going to be noncompetitive for them. i think taking more time to get started out but it creates an odd thing because of the individual mandate going forward on january 1st, 2014, you're going to have kind of an unusual mix. i think you will see people trying to opt out, many of them willing to pay the penalty to avoid going into full up program. >> yeah. we all are -- that raises the political question as to whether or not you can have one and not the other. if the gop really senses weakness in the white house. if there are other dominos to fall. >> well, i think there are going to be other dominos to fall not because the gop can force them, because president obama is never going to approve any legislative changes during his tenure. but i think you will see a lot of the things fall by their own way. the whole exchanges which is key

to the plan, you're going to have trouble getting that up and running. i think the government is really struggling with getting its software up and running. when it does, there will be a lot of issues. i think there could be further delay on the exchange side. the administration is so committed to individual mandate, i don't think they will delay that. their goal primarily is to get people into the system. by big conce my big concern is cost. we can't keep cutting medicare and medicaid reimbursement. i don't know a hospital in the country making money on medicaid or medicare. that's a nonstarter. we have to find ways to address our nation's health care problems because as we get more disease care and get sicker, the costs rise, and this system is not going to address those issues. >> bill, what's a small business to do here? they're the ones, especially those around that 50-person level who have some really

important decisions to make and not a lot of clarity, especially if you're saying this delay could go beyond a year. >> i think they're going to hold off. i think they're going to have more part-time employment, more contract employment, and they're going to hang back. those that don't provide health care now. those that do will probably continue on. for the small business, they're going to struggle. they're already struggling economically, and it's not going to help jobs, that's for sure. that's where a lot of jobs are created is small business. i worry about the job impact. >> i guess i mean almost more specifically what would you recommend to them because there are those who argue by putting this off for a year and the fact we haven't seen it in the latest jobs report, no the a huge effect here for this size of firm. what would you almost as an executive say to them about now moving forward with their employee payrolls for the next year or so? >> with the xz that westbounds mu. if are are a-- i think they nee

to figure out how to absorb the economics of it unless they can beat the system. for the smaller employers, i'm worried, and i think a lot of them are going to have to scramble to try to stay underneath that 50 limit and -- but i'd like to see everyone have health care coverage. i'm very much in favor of it. it's a question of how to pay for it. i think that's the big issue. i think we have to look for more catastrophic plans with high deductibles. particularly the younger employees have only catastrophic coverage and i'd like to see more flexibility in the system. that's what i would recommend to try to find insurance companies come up with more flexible plans that allow them not to have a full up plan for health care perhaps they can't afford or people don't really require. >> it's a very real conversation for business owners and all americans going forward. appreciate your guidance, bill. have a great weekend. >> thanks, carl.

good to be with you, and kelly, too. the u.s. economy adding 195,000 jobs in the month of june. if you missed it. the question is did you nail the number? >> the jobs report is out. >> up 195,000. >> were you able to nail the number? if so, you will be the winner of this cnbc tote bag signed by the entire "squawk on the street" gang. find out if you're the lucky winner next on "squawk on the street." hmm...fifteen minutes could save you fifteen percent or more on car insurance. yep, everybody knows that. well, did you know some owls aren't that wise? don't forget i'm having brunch with meghan tomorrow. who? meghan, my coworker. who? seriously? you've met her like three times. who? (sighs) geico. fifteen minutes could save you...well, you know.

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ladies and gentlemen, we have a winner. this month's nail the number winner with the guess of 195,000 nailing the payroll number is christian coughlin and he joins us on the cnbc newsline. christian, congrats. >> thank you, thank you. >> i'm sure this just has made your week if not your month, perhaps your year. how did you come up with 195k? >> made my year actually. i looked at april revised numbers and may's revised numbers and i took a wild guess. >> well, now we were saying earlier one way you could nail this number it seems lately is look at the recent trend. it seems you might have had a

little insight from conditions on the ground because you're a small business owner, are you not? >> i am, yeah. >> did that have something to do with it? >> it did. i have seen pretty decent sales the last couple months. i don't know if we can attribute it to the manufacturing number last month, but, yeah, this past year hasn't been that bad for me. >> and sales in what -- tell us a little bit about your industry. >> we're an industrial supplier, industrial supplier, safety supplier, food service supplier. from small businesses to large businesses but we're ecommerce based. >> obviously it's been an interesting flow of data on manufacturing. ism has been softening a bit but some of the employment sub components are doing well. if you had to make a call about employment in manufacturing in the back half of the year, better or worse than the first half? >> i hope better.

>> christian, what are you going to do with the bag? >> i'm going to probably frame it and take it to the beach a couple times. >> are you going to frame it before or after you take it to the beach? >> probably after. >> very good. try to get all the sand out of it and we very much appreciate you calling in. congratulations. 195k is better than a lot of guys on wall street did this morning. >> yeah. >> i think we got a couple guesses that were 195 but the rules are if you're first to guess it you're the winner. got to use the hash tag. it's heartbreaking when people have the right guess but don't use the hash tag. >> i think i have seen some guesses for next month already, 195. >> dow suddenly is up 60 points. we talked to the head of sales and trading who suggested we might trend higher.

>> this is on higher volume interestingly. we've seen a pickup as well keeping an eye on the ten-year which has been such a key gauge for how stocks have done over the last month or two. >> have a great weekend. let's get back to headquarters. scott wapner and requesting t"t" guys thanks very much. welcome to "the halftime show." glets to the wall and see where we stand. the dow is up 66. that's where it sits. there's the s&p, nasdaq positive as well. ripe for a buy. with apple booking its best week in two months, is the stock finally, finally safe to own? bet the farm. is zynga's 25% surge this week game on for your portfolio. first, our top story is rally watch. stocks initially shooting higher today on the back of that better