from time to time, this will be good, marty, and we'll check back with you once in a while? >> that would be great. i'd love to help you out. >> all right. and we'll pay chex, paychex, paychex whenever we do it and that will help. rebecca, thank you for being with us. >> thank you. >> we'll toss it over to "squawk on the street" right now. ♪ good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. welcome to q-2 and the month of april historically the strongest of all months at least for the dow. futures are higher as the street does turn its attention to gm's ceo on capitol hill. ten year's right around 274 and we'll see ism manufacturing today as well as auto sales and europe's off to a pretty good start as the pmis were not bad especially in france, ireland

and spain. the roadmap goes like this -- >> gm motors ceo mary barra on the hill to answer questions surrounding the company's controversial ignition switch recall. the s&p and nasdaq looking to start down the road to a sixth consecutive gain as we head into the second quarter. the current five-quarter winning streak last accomplished way back in 2007. activist investor starboard redoubling charges that darden's planned spinoff of red lobster is designed to benefit management over shareholders. if you see something fast, say something fast. fbi launching an investigation, actually, it has launched an investigation already. we only learned about it, that it is looking in to high frequency trading. interesting how many stories have bubbled up on this suddenly. >> if we can get mary barra to talk about it, we'll have a collision of worlds collide. >> she'll have enough on her plate. >> oh, my, this is big. >> gm ceo mary barra will be on

capitol, and the hearings will focus on why they took more than a decade to recall vehicles with ignition failures. barra says she cannot say why it took years for the safety defect to be announced but she adds, quote, as soon as we learned about the problem we acted without hesitation. we told the world we had a problem that needed to be fixed and whatever mistakes were made in the past we will not shirk from our responsibilities now and in the future. today's gm will do the right thing. that's as about as specific as they're getting in terms of what they're planning to do for the families with whom she met last night. >> right. >> you look at the coverage today especially "the times" it looks like nhtsa is going to point the finger at the company and say they had data that they withheld. >> and you start getting into a toyota reverse situation, remember that, 2010? i went back over to look to seeing what happened, because a lot of people are saying to me, jim, when does it impact the

stock? obviously the stock is down from $41, but when is there a second round because the stock has hung right here at $34. and there was a 16% decline in monthly sales for toyota. toyota had really been on an upramp. you could argue gm was, too, and it just hit a wall. that's what i'm looking for is the beginning of a double digit decline in sales. if we don't get that. then gm is going to prove to be a buy, despite everything you hear. >> it will have financially weathered what is certainly a very difficult period with an uncertain end to it. in fact, we don't even know. millions of recalls. but when you're reading stories like the one today that i was reading, i think it was in the "new york times," might have been "the journal," about the cobalt, the car stopping out of nowhere. >> right. >> windows are falling out. you know, i mean, on and on, is that not going to perhaps have an impact as you point out --

>> right. >> -- is it likely to i guess is the question. >> it's pinto-like and that company survived, right? the pinto, remember, where you could -- >> yeah. >> you could have a rear end collision. >> exploded. >> there is a remarkable -- >> that's not what we're talking about here. i'm talking about impact of gm sales. of course, it's going to survive. >> no, no. but i read that cobalt story and if you know you are putting out faulty merchandise you are not going to get through this thing unscathed. obviously the damage control here, jeff -- i was listening to jeff seinfeld earlier talking about how they are upfront, they are not hiding. now, that is true. and i like that. but what they're not hiding about is horrendous. >> yeah. >> then there's also the additional recall for some of these power steering issues that was issued yesterday. they are kitchen sinking this well ahead of the hearing today. >> they ought to just call every car back and say, listen, we're

doing a little tune-up. because it does seem to be a plethora. i've been involved, my daughter had the toyota, we had that recall, very frightening. very frightening recall. these recalls when i read the cobalt, i mean obviously this is core va corvair and ralph nader and unsafe at any speed. these are the stories we used to have. i find it very daunting. i got to tell you i'm somewhat sympathetic to her situation. where are all the other people that were involved? this is a great national story. tremendous test of a new ceo. and i don't know, i think every single eye in the country is on this woman. >> the testimony will be interesting. not the testimony, the "q" and "a," of course, as it always is. what about the culpability of government oversight that we're learning may have been turning. >> she does not seem to be willing to throw anyone under the about us which i think is a great sign of her integrity. i could easily say, look, hey, you know, before i got here, the

government owned this thing. the government did nothing. the government must have known. ceos must have known. she is not pointing any fingers. other than herself. can we just admit that is brave and i think kind of very iconic stance. by a ceo who is not saying, hey, don't look at me. >> yeah. i'd like to know what the general counsel's office thinks about that because it was only after the private lawsuits started piling up that they got engineers together and said, hey, can we go back and look at this thing, what happened there and why have we been so quiet on this all this time. >> it's a great quandary and we'll all be -- it's one of those periodically someone testifies before congress. it was the fat cat bankers before that i think we'll find riveting. it will be a lead news story tonight. >> yeah. >> high frequency trading. >> difficult, too, to read. a lot of the families are in d.c. >> oh. >> they'll be there today. >> yep.

>> you are talking about a family whose kid was behind the wheel and for years they thought she was asleep and that's why she crashed and only years later they realized that was not the story at all. >> let's see if it impacts this great american company that we all thought was making a tremendous comeback. all right, in the meantime as we get ready to enter the second quarter the subpoena and the nasdaq coming off five consecutive quarterly gains since the first time since 2007. and the dow ended down 0.7 for q-1. s&p i love this, has made an all-time high for nine straight quarters. that's the second best run in history and we'll see if it can do it again in q-2. >> i gave a speech last night to a number of investors. at the harvard club. i'm saying that because -- >> putting that out there. >> doing it barnes & noble white plains. get around. >> did you talk like this? >> i may have. do you know what? >> what? >> people wanted me to. i came out, like, geez, who is this guy, what is the dems and

dos thing he's doing. isn't it a bubble? it's got to be a bubble. that's question number one. i said, how many quarters can we have it's a bubble before we have to declare it's not a bubble. this s&p number and people i guess retail is coming in now. i said, i heard that at every single one of these. can we just stipulate something is going on here that is not bubble and that is not just retail being in the wrong place and if you look at the makeup of this last quarter, it was not the stocks that we thought were bubblicious. >> no. >> it was caterpillar. >> cat, prike mimike romicrosof merck. >> obviously forest had a takeover. green mountain was coca-cola's endorsement but when you look at these stocks, do you know what these stocks are, companies that have been around. this is not a cloud.

this is not software as a service. >> interesting i would assume some of the biotechs which people do want to put the bubble label on perhaps erroneously were amongst the poorer performers for the quarter. but i had a conversation yesterday with an old friend who is an extraordinarily talented health care investor and has been. >> right. >> he won't let me name him. but he made the point to me, do you know what, these things are not in bubble territory at all. you've been making this point. >> yeah. >> multiples are as low in many cases as they have been. they are not at 40, 60, 80 times, the metamune and named the incredible multiples and, by the way, the risk that you won't get there on developing a drug is less. the transparency is higher. the chances are better. the multiples are lower. and there has been a transformation in the treatment of some of these key diseases including cancer amazingly

enough that are really true advances in the science. >> thank you. gilead, fantastic article in the paper today about how $1,000 day but there's a course to be able to -- hep-c. gilead is selling at seven -- it's going to earn $7 in 2016. it's at $71. it's cheaper than merck. it's cheaper than pfizer. >> and the treatment is cheaper, too. when you are taking everything else and everybody else had to do. >> it's a fatal illness. >> you can cure it. >> yes. celgene. remarkable. remarkable advances with multiple myeloma. remarkable breast cancer franchise that nobody is talking about. how about an arthritis franchise that i can begging to get into the darn trial. $16 a share in 2016 and it's at

cheaper than lilly and merck. >> say that again. cheaper. >> i think you are right, baird is not a major house necessarily. i happen to love their work. it's high quality. we are starting to see the gilead number. now, there are some people who say it will only earn $4 because they question whether bristol-myers has a better hep-drug, right now you can get in that -- anyone who has hep-c listen to me. i have lost friends who had hep-c. this is it, man. this is it. >> wish we had this 40 years ago. >> yes. this is a killer disease. 50,000 people will die from this disease unless they take the gilead pill. what is that worth? and the answer is a heck of a lot. so, those hmos that are pushing back shameless. >> you are also talking about now not having to take it forever, i don't believe some of these therapies and then it's over. >> and then it's over from the

disease that people were dying from before this approval. and we know this is that fabled acquisition they made about phar pharmacet and it's the greatest acquisition in the history of pharma that is not hyperbole because it's a ten billion tran chic franchise. >> it was an $11 billion in that range. >> great memory. it was $11 billion but they had the formulation, remember, bristol-myers bought a company that thought had the formulation and they wrote it off very quickly because there were two fatalities in the test. this is remarkable that you have -- now, these stocks are up huge, so someone says, well, wait a second, ca-ching, ca-ching, celgene up 12%. my charitable trust has been buying celgene. can i tell you what an idiot i feel like? because all i did was look at the valuation. sorry. >> what else are you supposed to look at? >> you are supposed to look at

the buzz. it has no buzz. >> shame on you. >> i should have looked at merck, it hasn't had buzz since 1987 and suddenly merck is up. >> it's easily acquired if you have a multibillion drug. it gets you some buzz. >> i think this quarter will be a change in those stocks. a lot of people are telling me they are ready to buy. >> it's under way now. trust in the markets and the fbi when we come back what the agency told cnbc about investigating high frequency trading. also ahead domino's game plan for growth beyond the final four. we'll talk to ceo patrick doyle a little bit later on. take another look at futures. like we said, april the best month historically for the dow. it's off to a decent start and we'll be back live from post nine in a moment. ♪ say it again i said lar vorte, road construction, and gaping potholes.

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the fbi has launched an investigation in to high frequency trading. a bureau spokesman tells cnbc the probably is still in its early stages and is looking in to whether that practice violates any insider trading laws. on other agencies are working with the fbi on the case coincidentally where michael lewis is on the "today" show and will be on "power lunch" at

1:00. well timed? >> geez, that guy is powerful. if i ever write another book, i want him to plan the whole thing. >> yes. >> in fact, i'd like him just to prevent he's me and that way i would actually get some attention. >> i don't know if he wants to do that. >> i don't think he would. >> no. >> the point is "the new york times" has three separate stories and a review of the book. >> sorkin's column. >> and a story on fht. >> i thought the fht and fbi story was confusing. is it the front running that michael lewis talked about? is it some of the great stories that eamon javers has broken? >> meaning information getting to you first. >> yes. that's what i want to hear. are they after people who are buying something ahead of you who -- >> it's also about false orders and trying to create the illusion of an order trail that's not really there to try to draw people in. it's not clear completely. >> the "times" has another piece where they profile algo writers,

guys who write algo rhythms for the firm, and the last line is the last time i checked it's not against the law to use your brain. there's no unfair advantage for using your brain. >> yeah. let's also remember the s.e.c. has been very pro-financial innovation whether they're -- you know, it hasn't liked -- they ruled -- did you ever see a ruling which said they don't like high-speed, high-frequency trading? you know, if the fbi is investigating something that's legal, that would be curious. >> right. and not to come back to it, too, we've talked about it so often, but in terms of the exchanges and the reliance they have on the revenue stream from collocation, something that andrew sorkin in his column today does point to. and what we've talked about so many times here which is how much of volume is actually -- >> 7%. >> -- related to high frequency trading, therefore, masking what is otherwise extraordinarily low demand for stocks. >> what will be interesting to

see is michael lewis, the ripple effect, is that it really is the powerful coalition in favor of high frequency trading is underrated in all of these articles that i've read. they got -- they got the horses, okay? they have the exchanges. which many people feel the s.e.c. is bound to listen to. they have a lot of different companies that say that they're doing good things, that they present themselves with a white hat. the s.e.c. so far has agreed with that. so, does the s.e.c. read this book and say, do you know what, we've been backing the wrong side? i don't think so. big splash. no change. >> well, "the times" does review the book. janet mazlin reviews the book and her line is it's guaranteed to make blood boil. >> right. >> which is probably obvious given the reaction so far. >> yeah. well, look, i just -- look, the coalition, i mean, i've been railing against these guys for years. i remember i had -- senator ted kaufm kaufman, a great senator, wharton business school grad and

understood the markets. he told me, jim, stop wasting your time. stop. not going to change. now, i'm not michael lewis but -- >> no. >> i mean, michael lewis, does the s.e.c. say michael lewis, one. s.e.c., nothing. i mean, is that the way it works? >> it may. when we come back, we'll get cramer's "mad dash" as we count down to the opening bell. take one more look at futures. chris evans, captain america, will ring the bell and we'll get when "squawk on the street" from the nyse continues. ♪ go on take the money and run ♪

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all right. the clock tells me we have a little more than seven minutes to go before we get an opening bell here on this tuesday and that is time for the "mad dash." >> ebay refused to go down after carl icahn got involved? >> yes. >> darden, missed quarter, missed quarter, missed quarter, missed quarter. it won't go down because of starboard, starboard reveals its game plan for olive garden and red lobster and said it's not about the split into red lobster which they think would be kind of a joke since red lobster is doing so bad -- >> we can talk more about it. >> and clarence otis has been saying, listen, we can make the second km about olive garden which is only minus 5% same store sales. that's a remarkable decline. they think the real estate, starboard thinks the real estate has great value and don't forget they want clarence otis fired. >> it is a complicated transaction, the situation in which by the way, they first have to get consents to call a

special meeting to try then. there's no vote on this split. shareholders don't have a voice on it unless you get consents to call a special meeting, then you are in a position to actually say you can't do this and to toss the board, by the way. on the real estate -- >> no one gets to vote on it? hey, let's split the company, what the heck? >> you can do these kinds of things without necessarily a vote. they are saying that the real estate that would reside within red lobster is inefficient from a valuation and a tax standpoint. it would be much better off split out. they're talking about red lobster being traded at about 6.5 times ebita which would implii imply the rental portion of its remember one-third of the income would be worth to a real estate owner at about 18 times. >> they've a real estate adviser here so they are not just winging it. >> it's an endless presentation from starboard. they do their work. they own a little bit more than 5%, it's a nasty battle, but as

you say -- where do you come down on it, jim? >> if otis moves on to do other things and he was one of the great executives in the food business, but if he moves on, stock goes to $55 and everybody wins. that's what i think happens. that's why i think otis is viewed as somebody standing in the way of fixing the company rather than just splitting it into two failing companies. >> not the case of shrinking to grow. we're just a few minutes away from kicking off the second quarter. there's a look at chris evans. he's otherwise known as captain america. the opening bell right after this. this. [ male announcer ] what if a small company

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♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. you're watching cnbc "squawk on the street" live from the financial capital of the world. there's captain america. actually the real captain america's up on the balcony today ringing the opening bell. chris evans stars of marvel's "captain america the winter soldier" which, of course, opens on friday. we talked a lot about "frozen" and its effect on disney earlier in the week but this will be a potential blockbuster and people laughed when they bought marvel, not laughing so much anymore. >> i'm glad you mentioned that

because i remember when the stock got hammered on the buy. wait a second, it's a one-trick pony. iger looking at this franchise and saying it will generate hit after hit after hit and people looking askance. it generates hit after hit after hit. >> yeah. not to mention disney's market value is, where are we on disney? oh, yeah, about $140 billion a that would be. >> makes every sense when you consider espn, when you consider abc, when you consider all of the huge, huge hits that will come at the theme parks from these things. >> correct. >> yeah. >> and not to mention pixar, marvel and lucas films. >> lucas films. >> underrated stock. underrated ceo. >> underrated ceo? >> the rating has been creeping up over time. >> wait a sec, really? >> i still think so. >> really? >> how about this? all the media ceos tend to be underrated there. >> how about that? >> all right? you sat next to les moonves, did

he not seem like a billion dollar man to you? >> almost is. he'll be a billion dollar employee, incredible. >> let's get the opening bell here at the exchange and a look at the s&p at the top of your screen. as we said, down here captain america chris evans, sebastian stand celebrating marvel's "captain america the winter soldier" out in theaters this friday. and paychex the provider of payroll and human resource and benefits outsourcing. we want to get straight to dominick chu who has auto sales figures out of ford. >> ford is reporting march u.s. sales rose by 3.4% compared to the same time last year. now, that's better than the 1.6% increase that analysts had anticipated. ford sold over 244,000 vehicles during that month. its best march total in over eight years. a quick note, though, gm was originally expected to issue sales numbers at 10:00 a.m. eastern time but that will be delayed a few hours due to

computer systems issues, so, again, better report for ford. gm's report will be delayed until later this afternoon, carl, back over to you. >> thanks, dom. that doesn't put a good shine on a busy day for gm? >> can i just say what a comeback ford and chrysler. remember how bad february was weak and everyone was saying maybe we got to take down the number of cars that are being built this year. now, there may be discounted, i think we have carfax later this week to find out about discounting but that's a remarkable number that says when the weather gets good, the shoppers are back. >> that will be the dynamic to watch for. march was warmer than february, jim. >> yes. this is a yellen story. this may be is what yellen was seeing when she, well, maybe didn't mean to be as upbeat for the economy, but that's a big number. that's big. >> you really think it was all weather? >> i'm thinking weather it mattered. >> i know weather mattered but -- >> did you see my numbers at the restaurant? >> no, i haven't.

do you carry them with you in your inside pocket? >> i get them each morning at 6:00. >> how are they? >> not bad. but now that you've been in the restaurant business, you're not supposed to talk numbers. it's something i've learned. the etiquette. you just say it's jamming. you are supposed to say it's jamming. >> always good to watch. ual, a couple of analyst moves and ubs takes it to a buy. they've seen accelerating revenue growth in the second quarter. >> important because the group has languished and i think every time you see jet fuel up because of oil, then you recognize that these companies are just triumphing over a remarkable negative environment and don't forget there was bad weather before. i think ual an inexpensive stock, not as well run as delta which is not as well run as amr. >> wynn and las vegas sands up 4%. these reports that macaw macau

will be up. >> incredible. i am just in awe of how the chinese are still spending even though we keep hearing negative things about the pmi. it was 48.5 but i feel this is a sign that the chinese are alive and well. >> yesterday we had john lid on who is a former analyst who runs a hedge fund arguing that las vegas sands is sitting on a lot of undervalued real estate as well, that you could break out all of the properties that are retail associated with its casinos and you'd have one of the highest-end mall properties and get a much higher multiple. you know, we'll see whether that ever comes to the fore . it wouldn't seem they are under that much pressure given the performance of the stock. >> no. >> give the ceo more money to support it. >> adelson is the power -- the koch family.

and he's a remarkable power broker and a remarkable leader. and we were talking about bob iger and les moonves, the casino industry has remarkable ceos who have built the great powerful franchises. >> five years on that stock, oh, boy. >> you mean when it was trading at, like, $5? >> and adelson was putting new money into the company because they couldn't get capital any where. >> and mgm has been incredible. >> miss hard has struggled because they are trying to transition into online gaming at the same time there's not been a new cycle of -- of new machines. >> yeah. >> i think hard's trying to do a good job in a secular decline. >> chris evans is making his way to the floor. they generally do a little pony show here. one of the phone polls or at

least over here at the disney post at post eight, disney, by the way, we said up 1.2% one of the better performing dow components so far this see. did you see any of the originals of the captain america series? "the avengers?" ? >> what can i tell you, i like action movies. these are good action movies. they are. >> i saw one where captain america is part of it. they are blowing up new york which they always tend to do. i find it a little disturbing. >> philadelphia? we could pay a little attention to philadelphia. >> they blew up cleveland. >> i don't like that. >> you want them to go bergdorf and shop? >> i'm not the demographic, so what i think doesn't mean -- >> the avengers take sachs fifth avenue? >> cbs is up 2.5%, i don't know if it had with you lauding leslie moonves. we had the recent spinoff of the outdoor property. >> right.

>> 19% of it the further 81% yet to come in an exchange offer that will follow later this year. but, man, that's strong. >> well, time warner will then have to come back and viacom. the stocks all vie for shareholders. when they buy back stock, there's a lot of just sultry buybacks. not less moonves. he's saying, hey, take it up to $64. >> at will. >> it's actually sumner. >> i used to do buybacks when i was at goldman. buy 50,000. i think that some of these media executives when the market's down, they are just standing there and buying. you seem to be mesmerized by captain america. >> camera's over this way. >> i'm not familiar with him and so i was taking a look. it's a movie star. he's bearded kind of like the washington nationals watching the mets lose yesterday, every one of those guys has a beard.

>> only you could relate and work the mets in. >> it was painful. >> that was a great comeback, oh, wait for the nationals yesterday, yeah. yeah. that was a rough game. >> it was. i mean, yeah, you got to get -- these games, you know, i had the phillies day game and, you know, we were up by six after the first. of course, we were behind immediately. but we did win. did win. >> anyway, we'll see if pisani can grab chris evans if not it's the good time to look at the netflixes and the teslas and the pricelines are hanging on to gains. yesterday was the first in six or seven that biotechs did not roll over in the afternoon. >> there are many technicians who tell me that you had to have that quarter end before the money flowed back and that today is a seminal day. watch netflix, watch tesla, watch as maybe the rotation has run its course. i still continue to believe that if you do more ipos you'll have more pressure on the group. but it has not been unusual to see the end of a sea change when a new quarter begins and these

stocks, the netflixes have been horrendous. >> one name that has not been gaining any momentum even though there have been other rebounds of its cohort is twitter. >> twitter just acts terribly. and, you know, i'm a believer that twitter is a news source but i think we all want to see something from twitter which says you don't need to use twitter yourself. >> yeah. >> in order to learn from twitter, that hasn't happened. >> there's actually a big debate about whether or not what made it great is what made it powerful as it is or whether it needs to change to bring in a new generation of people who clearly were not early adapters so to speak. >> i think the stock says they need to make some changes. >> it is off of $44 but still well below obviously where it was a couple of weeks ago. facebook's an interesting story. mark zuckerberg taking a dollar in base salary although $3.3 billion in options and reports that cheryl sandberg has sold off half of her stake. >> charitable trust bought some here thinking the thing has to rebound because i think the

quarter's going to be good. but i got to tell you this stock has not been able to get out of its way. it's actually one of those stocks that the at a technically perilous level. i think it rallies. when i look at the action today, it's so funny, i see the biotechs coming back and isrg has been a difficult stock and just got approval for a new machine. i'm seeing a rotation back into what led us last year. but i don't know yet. >> all right. >> very important. with that we're up 48 points. bob pisani is our own captain america on the floor. morning, bob. >> and unfortunately chris evans declined requests for interviews but a lot of fans standing around with him. he didn't wear the suit, duff notice that? welcome to april, everybody, the important thing is the old leadership is back. look what's leading biotech stocks and semiconductors stocks and the old leaders from the last quarter and even health care in general ask leading. nine days in a row on the eem, the emerging market index.

normally the first day of the month you get money going in and usually it's an up day. that hasn't happened, the s&p has been down four days in a row on the first trading day of the month. the last time that happened was 2011 and i don't have an explanation. normally the first day is an up day overall. the big debate going into the second quarter is the whole growth versus value debate. this has been going on. the popular trade going into q-1 was long growth and short nongrowth. and a lot of the debate has been over whether or not the growth names have been worth the prices. you guys were talking about biotech. i get e-mails, my heavens, is there a lobby out there for biotech. pisani why don't you tell everybody they're not expensive they are cheap. i get e-mail on gilead, the e-mails say tell them gilead is ten times 2016 earnings. are you happy, guys? all right, i just told everybody. the lobby is incredible on this. celgene is another one, why do you say celgene is overpriced? celgene is 15 times 2015 earnings. that is not overpriced.

stuff is great. they have a pipeline. it's dramatic. you can see the lobby about it. you get the point, okay? however, if you look at the boring old value-type names, and i mean, the krogers and the pepsis, the last few weeks, there's been some rotation going on and a lot of guys have been caught flat-footed. there's a lot of hedge funds that have been caught in the last couple of weeks that have lost a bunch of money on this so the bottom line going into the second quarter the overall trends are not clear so i watch flows, inflows and outflows, into the biotech etf, the ibb, the outflows have slowed down recently so it's not clear whether this is a little mini decline and we'll now move up or not, it's still not clear. unfortunately i can't give you an explanation for it right now. today is the big day, michael lewis on with us, 1:00, i'll be there with him to talk about what's going on with the entire business and i hope not just high frequency trading but talk about the entire stock market business. also on this is perhaps more

important, william o'brien who is the president of bats which is very much in the book will be on with us as well to talk to michael o'brien. we'll have a very lively discussion. i put out a trader talk last night calling for the s.e.c. to conduct hearings into the overall stock market. i don't mean high frequency trading. there's a laundry list that a lot of people would like to have investigated and talked about a little bit more. put it up here for me. not just high frequency trading, but dark pools and exchanges paying rebates, do we need to do that. is it the right thing to do. new standards for testing technology to avoid the problems with night trading they have issues and ways to address it but they haven't yet done so. should they be doing that? what else can they be doing? what about charging for excess bids and offers, a lot of people say there are firms that put in bids and orders that are canceled. the best way to deal with the issues i think is for the s.e.c. to have hearings on this and then put out recommendations and get a timetable by the end of

the year. more on all this and what i'd like to see at my tradertalk@cnbc.com blog. let's head to the bond pits and rick santelli at the cme group in chicago. good morning, rick. >> good morning, david. historically at least for 2014 if you were looking for lower yields you would be looking for curve flattening but that's not happening now, we're actually getting curve steepening and it's resulting in yields that are kind of sideways but maybe moving lower on the short end. let's look at the charts. two-day of fives. and then quickly look at a two-day of tens. see a difference there? yes. okay, now let's look at a two-day of the dollar/yen. let's look at a two-day of all the yield curves. twos to tens, steepening. five to tens, steepening. why do i care about that dollar/yen? whether it's the two-day chart or uf open it up a bit, uffle can see that the dollar/yen continues in many ways to move higher and this is making some traders that are looking for lower rates a bit nervous.

the chart you see there is year to date. we're at the highest dollar values against the yen since the third week in january. hey, we're coming up to an ecb meeting. this is going to be a very important one. are they making inroads to economic horsepower or are they making inroads into quantitative easing and more stimulus? i can't tell you. but the euro currency seems to be undecided of late. the two-day chart is definitely building. it's moving the other way. maybe those looking for more easing already sold the euro currency in front of the meeting by several days. carl, back to you. >> all right, rick, thanks so much. when we come back kevin o'leary of "shark tank" doesn't pull punches when it comes to business. stick around to find out what he's talking about today. "squawk on the street" will be right back. ♪

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we're just three days away from jobs friday and that means another opportunity for you to nail the number and win a prize. just tweet us your predictions for march nonfarm pay rolls use our handle@squawkstreet and if you receive you receive a wireless speaker autographed by the "squawk on the street" gang. you'll have until one minute before the friday release at 8:30 a.m. to submit your predictions. best of luck. it is usually, like, a pen or a hat. this is actually something you can use. you've already signed it, jim, you said booyah. >> it has our name and cnbc on it. >> pass it down to david. >> i have to tell you these numbers, people have a good time with it. >> yeah. yeah. >> people have a good time with it. take the over this time. >> we get multiple correct answers and then it comes down to timing because i had a friend who e-mailed me, i got it.

sorry. >> you got to be first. >> it's a friend, that's not fair. are friends allowed? >> yeah. >> a friend of david was -- almost won? >> it might be rigged, is that what you are saying? >> nail the number contest is rigged. it's rigged. no, it's not at all. >> david's friends are sending in guesses. but the guess, you know, the consensus is 195. >> i heard that. >> you just got the best march for ford in i think eight years. >> yes, that's why i want to do north of 200. >> really? >> i do. north of 200. these auto numbers matter tremendously in the economy so does housing and get some retail sales. >> get some retail sales. >> obviously you know the number. >> get some retail sales. >> your friend came close. >> get some retail numbers. i'll get me some of that retail sales. >> the sun was out for a lot of march, it does matter. >> where you been living? the sun wasn't out here. >> 307 smith street bar san miguel. >> freezing. lives in a bar.

>> the price of limes is not just -- it's not just guac-pocalypse. >> they are talking about having to add lemons to corona. >> i stopped putting lime garnish. very honest. cut down the lime garnish. >> that and the problem with pork prices. apparently this virus is wiping out the supply of hogs in this country. >> you got to watch corn go higher. the next thing i got to pull the lamp chops. i'm going all vegetarian. have you had the empanadas? >> i haven't. stuff them with lettuce. >> corn is connected to everything as we know in this country. it's connected to your feedstock, your food. when you're eating chicken nuggets you are really eating corn. >> absolutely. when we come back this morning "stop trading" with jim. i'm randy, and i quit smoking with chantix.

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♪ time for jim and "stop trading." jim? >> look, i wanted to do alcoa the stock has gone from 8 to 13

and i was looking at oracle, but it's eog. eog announced last night, the stock just split for those who care about that and has five wells pumping 13,000 barrels a day. now, when you think about this, you realize, this is the kind of growth that no one thought, this is evil for texas, they are a three-legged stool, permian, balkan, this stock which hit an all-time high yesterday is not done going higher. think about it 13,000 barrels a day from five barrels. do the numbers. this is really one of the great finds ever. mr. mark pappas told me you could hit oil with a straw there and i think they are hitting it with a straw. >> come to pappas. yeah. any concerns about him leaving? i was going to ask. >> do you know what, he's the great american oil man but he's also conservative. eog is one of the great oil companies. you are going to hear about this as a major oil company. and remember what eog stands for.

enron oil and gas. it was the survivor. >> i forgot. >> it's as good as they were bad. >> jim, what's on "mad" tonight? >> i have enbridge and schein, enbridge is the great growing pipeline in the world, what a wonderful company. a lot of the limited partnerships have been stalled because they don't have the growth, monaco has the growth. i will light a fire under him tonight. >> you are going to light a fire? >> light a fire. >> don't make it too combustible. >> it doesn't sound bad. i will use an e-cigarette. speaking of which you got a -- you got to go to white plains tonight, this is the final signing? >> this is it. you want a book signed by me, you get to white plains tonight to barnes & noble. i am done. my hand is done. the callous is done. i'm putting it in a cast!

i signed -- i have signed so many books, i'm done. i'm done. i'm going to become a lefty. >> do you always write booyah? >> always. i'm ambidextrous after tonight. this thing's shot. thank you, guys. >> between that and your voice, jim, you are holding up great. >> the voice came back after a vicious, vicious battle with laryngitis and everything else. >> we'll see you at white plains and on the air at 6:00 p.m. tonight. ism construction spending at the top of the hour and plus a unique perspective on the gm recall crisis as mary barra gets ready to face the grilling on capitol hill. don't go away. don't go away. these don't look clean. [ doorbell rings ] the johnsons! stall them. first word... uh...chicken?

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welcome back to "squawk on the street." we are awaiting ism manufacturing, this is a march number, but we're also waiting construction spending a february number. i'm a little early here but consider how important the difference between february and march data is ultimately going to be. have we overridden the horse of weather having a huge impact on the economy? difficult to say. but we should start getting numbers especially the march numbers where the isms, the pmis basically lead the way in that regard as well as we start to

clear the hurdles for some of these job numbers. we see interest rates today slightly elevated mostly a long-end phenomenon or i should say dropping rates or soft rates a short-term phenomenon. in three seconds we're expecting this number from ism to be in the 53.8 to 54 range. 53.7 is what we arrive at. so, it's a little light. a little light. 53.7. our last look was 53.2 so you can see how it fits in. let's look at prices paid. 59. that's about where we were expecting the employment index at 51.1 drifts a little bit from 52.3. important in the context of adp. and, of course, pls. 55.1 is on new orders and that's a little bit up from 54.5. now, let's go to that february data i was talking about. construction spending. that's up 0.1. about what we were expecting although on the revision we've

lost 0.3, originally reported january up 0.1 and stands minus 0.2. if the ism is giving you clarity on weather it doesn't seem as though it had the type of effect at least based on this series that some thought with regard to intensity. sara, back to you. >> all right, thanks for breaking those numbers, rick santelli. of course, march numbers very important leading up to the jobs report. let's go over to steve liesman now back at hq with more on what we can make from today's numbers. >> i'm reading the details of the report and it's very mixed, but let me bring your attention to one item which is the customer inventory numbers. they took a big hit down at 42. so, the inventory correction coming out of the fourth quarter still alive in the first quarter. and even accelerating in march. it looks like customer inventories are actually contracting from that number at 42. production, though, was up a little bit. employment down a little bit. though still growing.

inventories were down, sorry, supplier deliveries were down a little bit. the backlog, though, was up and prices were down just a touch. so, a mixed report outside of this inventory which was a big correction. some of the comments, though, are very interesting. this is a week where we're looking for i think rick was talking about it, snapback from the weather, so the february data should be depressed by the weather. the march data should show some increase which we got on the ism, so some of the comments beginning to say business beginning to heat up and business is good and we are optimistic says somebody in transportation. the year starting off very good. outlook very bright. so the comments i'm reading off the top, the ones that appear at the top of the report, carl, seem very positive and we'll be watching the auto data where people not on the showroom floors because of the weather are out kicking the tires and are they back doing it in march. i guess ford and chrysler both beating. we'll be watching for gm and some of the other reports today. adp tomorrow along with the jobs report on friday, again, looking

for snapback in the data, carl. >> all right, steve, thanks so much for that, steve liesman, joining us back at hq. speaking of gm, ceo mary barra heads to the hill as an additional 1.3 million cars are being recalled which brings their total to 6.1 million vehicles since february. the latest recall stems from a sudden loss of electric power steering. david coal is chairman of the auto harvest and joins us this morning on the news line. good morning to you. >> good morning to you. >> a lot of people trying to grade mary barra's performance today on the "q" and "a," that will be interesting, but the problems date back so far and it appears that there's going to be some kind of back and forth between what nhtsa says and what gm says. nhtsa, the early read is that they're going to say gm had some numbers they didn't tell us. what do you think's going to happen? >> it's hard to say. it's clear this is an extremely complex issue because what you're looking at in terms of the serious problem, fatal

accidents and so on, were extremely infrequent. and anytime you are dealing with -- while they can be very significant in terms of each event, they're hard to find and tell the story. and historically gm the whole auto industry has worked very closely with nhtsa on accident issues. and it's been a very good relationship, though, with the enormous complexity of the data and in retrieving this data, getting it to tell the story is very, very tough, so while it's a tough period for gm, you have new leadership with mary and mark and the others at the company, what i think you're going to see is they're going to be very straightforward, one of the things that everybody in this business knows is that the worst thing you could do is hide something. and they want it all out. they want to deal with it. i think what you'll see, for example, in mary as the ceo is she's really impacted by this. that -- and wants to get things squared away just as quickly as

possible. it's a very important issue. tough issue. and it's not an easy one. >> you talk about complexity. this was a part that cost $10 wholesale. costs just a few minutes to replace and then you talk about not covering things up. that appears to be exactly what the company's done for ten years. >> well, i can assure you that that was not the case as it got up into the leadership. if there was somebody down in the organization that tried to hide it, that's grounds for instant firing. but when you have a large company, it's just like the government we're seeing with the affordable care act, that the complexity of things are amazing. and what most people are not aware of is that the auto industry is the most complex industry in the world in terms of size and technology and everything that's embedded in the car. finding things sort of a needle in the haystack and in this case, these can get lost. it's unfortunate, and it needs to be resolved if you go back a

few years our data mining capability today is so much greater than it used to be. but finding stuff and getting to the root cause even though there were bits and pieces that were known is extraordinarily difficult. >> mr. cole, it's more than that, isn't it? the committee appears to have a memo which basically implies that gm decided not to fix the part across the fleet because it would have been uneconomic to do so. i mean, hindsight is 20/20. there are deaths, there are families giving a news conference now. we can see that. but these are judgment calls surely that executives make every single day of their lives as to whether or not you embark upon a major recall on a small probability. this is actually, though, they're very bad accidents a small number of accidents even with 2020 hindsight. you know, these are judgment calls surely. >> oh, they are. but these kind of things don't really bubble up typically to the top of the company. and, again, you've got this amazing amount of data and, for example, you look at that little

pin and the ignition switch, you know, 99.9% of them worked just fine. my wife has a solstice and she's got a pound of stuff hanging off of her key ring, it's a little outside of that performance criteria that's all it takes. but getting to this stuff to tell the story is very difficult to do. and i can tell you with mary barra and her executive team is interested in from their standpoint is doing the right thing and making sure that these problems do not occur again. and this is the same story that the nhtsa is to get to the point where these things never occur again. >> i'm curious about the politics of the auto industry and capitol hill. cnbc.com has a great chart today looking at just how much general motors has been contributing to members of congress.

in 2012, it was in the top 4% of all campaign contributors. is she going up on capitol hill to a crowd of people that is very friendly to general motors that might be easy on her? >> i don't think so. if you know mary, and i don't know her real well, but i know her and the people that have been around her for a long time. she came up through manufacturing. she understands what it takes to design and build a product. she's an extraordinarily honest, direct person and i think people will see that. the other thing that, of course, was an impediment in this was the bankruptcy and all of the problems that occurred during that particular period where you had a massive number of people leave the company. you had reduction of a number of plants. it was chaos and that was not just unique for gm and chrysler in bankruptcy, it was true at ford also, that went through massive restructuring, so you have this discontinuity that certainly hurts the overall

effort. but the main thing now is that kn nhtsa and the auto industry has to have robust systems that can identify these very infrequent things. and as quickly as possible resolve the problem. things that linger, things that are not addressed appropriately when you first are aware of them. >> dave, thanks so much for your insight. we'll watch it this afternoon. dave cole, director from automotive research talking gm. as we hit a new all-time intraday high. >> 1884 on the s&p as you can see. we'll get perspective on this the first trading day of the second quarter. and a special delivery, the ceo of domino's will be with us to discuss the all-important march madness pizza ordering season that's when "squawk on the street" comes back. [ male announcer ] when fixed income experts...

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♪ welcome back to "squawk on the street." check out shares of intuitive surgical, the stock is surging after the fda said it cleared a u.s. introduction of a new surgical robot system which has broader capabilities than prior robot generations. the stock for the company 13% toward session highs. let's also quickly check on shares of toyota motor just out

with its march sales up 4.9% better than the 1.1% analysts were expecting. again, these auto sales flowing in slowly. we're seeing nice beats from some of the big carmakers out there, simon. back over to you. >> thank you very much, dom. the market is higher for the third straight day and the s&p hitting a new record intraday high. we've just moved marginally back from that so can the rally continue into the second quarter? let's bring in the chief market strategist from lpl financial and the president and chief investment officer from castle art management joins us. good morning. >> good morning. >> no doubt here, the party in the stock market is not yet close to being over. what will propel us higher in your view? >> earnings are critical, simon, the data we just got the ism is a great indicator of where profits are headed in the next six months. that suggests that some of the weather impact on q-1 is beginning to lift. the production component headed higher. that's critical. earnings getting into the high

single digits. very important to sustain these valuations and keep the market moving higher in q-2. >> i thought at 53.7 ism manufacturing was a bit light. i mean, it's depressed from where we were surely. >> you're right. it's no longer in the 55 to 57 range that it was in parts of last year but even around 54 it suggests a 5% to 10% rate of earnings growth in the next year if you look back historically which we think is a good enough number to sustain this market and get it moving higher. >> jerry, what do you think? >> i would start with that and amplify that. we've got the fed still foot on the gas pedal no matter how you describe it, interest rates are low and there's plenty of liquidity in the system. the banks are just getting going in terms of lending. when you throw the earnings backdrop that we just discussed on top of what will now be a back-end loaded economic cycle, meaning look for the second half of the year to accelerate, those are the conditions under which markets have historically hit

big surprising up moves. and while a lot of people are worried here that we're at a new high and that, you know, we don't have enough oomph -- >> hang on, jerry. aren't we trading at a record high because we assume that's going to happen anyway? >> it's one of the reasons. >> the market assumes that growth will accelerate. the disappointment could surely be that doesn't actually come through and we can't sustain these levels. >> that's right. and there's always something out there, there's something behind every turn in the road to be concerned about, but those are the kinds of things that we've seen over this entire five-year up cycle that have failed to come to fruition. what you have to focus on is how much power there is between the liquidity, the up turn in the economic cycle and what we just described is a much better earnings outlook for 2014. you put all those in one package, with a market that has yet to really move up for the year, and that can put not just 9% or 10% but i think another 20% on this market. >> wow, we've got a pair of

optimists here on the program. what about the fact that you do see these pockets of excesses, froth, bubbles, call them what you will, and the fact that they're starting to loose some air and looking volatile, what does that signal about sentiment right now? >> the way we see it there are four industries in the s&p 500 that have bubbly-like valuations, p/es over 30. but if you look back the last time the stock market valuation bubble was inflating in the late '90s and early 2000s, you had 70% of the p/es over 30. we're just not in that market. doesn't mean the overall market itself is overvalued we think we are fairly valued here. maybe below the long-term average but the bull markets never end at average valuations. i think from here we could see an upside on the back of earnings growth. >> we're trading at 16 times earnings, aren't we? 16 times earnings is high.

>> no, not necessarily, simon. that's not true. that's below the historic -- >> are you assuming profit margins are going to expand from these levels? >> no, i'm assuming the economy is going to grow and i'm assuming we'll follow earnings and that 16 will turn into 14 or 15 in the next 18 months. >> it's possible. every bull market since world war ii has ended with a trailing p/e in a 17 to 18 range. we're not there yet. >> we'll see 20% to the year end. thanks, guys. >> thank you. we are three days away from jobs friday and that means another chance for you to nail the number tweet us your predictions for nonfarm payrolls for march and use our handle @squawkstreet and use the #nailthenumber. and you'll receive a pen autographed by the "squawk on the street" gang. and best of luck, simon's, about to sign it. nice prize. >> what is it?

>> it's a wireless speaker. >> oh. and jim's optimistic about the march number, he's looking at -- >> he said he would go 200 with consecensus at 195. march sales for ford, march sales for toyota just did five on a 1% estimate. >> gm's already delayed. i see. on a big day gm's are delayed with a technical problem. >> the optics of that are not good. >> beyond that we are shaking off the effects of weather. we saw that in the manufacturing numbers today, the question is will we see it in the all-important jobs number. coming up on the show the final four is set. still left to decide where you'll be ordering from this weekend. the ceo of domino's with us next. we'll also talk breakfast food, fast food wars, part-time employment, obamacare, not enough time. that's all coming up. and don't miss our interview with michael lewis on his new book "talk of the town flash boys" a lot of controversy.

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♪ basketball we love that basketball they're playing basketball ♪ the final four teams are set in college basketball and as the teams gear up for the big games this weekend, the pizza giants like domino's are cashing in. last year the company sold about 1.7 million pizzas during the final four weekends game. joining us patrick doyle the ceo of domino's pizza. it will be a big time for you, a big sales event, but now that you know who the four teams are and the four marketplaces you have a better sense of what it will mean for your business?

>> the four markets will definitely be bigger, but 1.7 million pizzas during the three games and, you know, i'd bet we'll be -- we'll be at least there this year. i think it's pretty high-interest tournament. >> how competitive is it between you, papa john's, pizza hut, all the big mainstream pizza delivery companies? >> i'm sure we'll all be busy, but i like our odds of coming out on top on this one. >> want to ask you about one of the big stories certainly for me today and that is that starbucks is bringing back its lemon pound cake. i don't know if you saw this, patrick, but old bakery items coming back after starbucks bought lame menboulange, can th afford a misstep in this new competitive environment? >> i'm sure the answer is they are listening to their customers, we do the same thing. you always try to get it right,

right off the bat. but you do things, you make changes, you listen to the customers and ultimately if you are responding to them you're going to be successful. i'm sure that they're listening to customer feedback. it's going to work for them just as it does for us. >> or alternatively so you don't make changes and you pay the price. you've got clearly a very high profile partnership with coke. as a businessman when you look at the implosion of the diet sodas, what occurs to you? is that a lack of innovation? is it just this health and well-being movement that is growing at a very grass roots level? where does this take us? the implosion of the major world category like that? >> yeah, simon, i think it is just an evolving, you know, taste for consumers, for our customers. we're seeing some of those changes but the reality is coke is phenomenal at following the customer trends. they've got the drinks that we need. we certainly still sell more

carbonated beverages than anything else, we're selling dasani and we're selling other things in the store. they've got the line-up we need that will move as our customer pace moves. >> so, it's simply evolving tastes? there's no other major lesson for business people? >> i think that's exactly right. and i think the fact is people are still drinking as many beverages as they were before, it's just a different mix than it was. and coke's a great partner for that. we'll just keep evolving with them. >> we've had a long discussion with cramer this morning about pork prices, about corn prices, about food inflation in general at the wholesale level. do you foresee having to raise prices this year? >> do you know what, we've got to react to our customers. and, you know, we had a very strong year last year. at some point, you know, you look at what's happening with commodities and if that all flows through, then, you know, we'll make decisions based on what our customers tell us we

can do from a pricing standpoint, but, you know, i actually think a lot of this is still fairly short term on commodities. cheese is at record highs right now. pork is high. you know, because of the issues they've had in that market. >> right. >> but i'm still actually pretty positive that commodities, you know, over the medium term are still going to be fairly benign. >> that's an interesting prediction. but to carl's point, what's happening with your profit margins, obamacare sets in for businesses next year, are they getting squeezed and perhaps not just because of the input costs but you'll have to raise prices for consumers like a lot of other restaurant owners? >> ultimately it goes back to the customers. we had a record year last year and our stores were more profitable than they've ever been. we're used to it. we're used to taking cost increases as they come through. i'm actually still very

optimistic about where we'll be and about how some of the costs are going to come through. i get a surprise and they come a little bit more aggressively, you know, then we're going to go talk to customers and see where the best opportunities are for us to continue to, you know, kind of mete the needs both of the customers and of our franchisees so that their profits are continuing to grow. >> you would think you will ever get into breakfast in a big way? people on twitter are asking us right now when are the cinasticks breakfast pizza coming? we talked all week about mcdonald's giving free coffee and taco bell with the waffle taco. you guys could make a push if you wanted? >> yeah, do you know what, i think we've still got other opportunities we'll go after before that. we've got a few stores that do breakfast actually. we've got a couple of 24-hour stores that do a breakfast pizza. you know, i think for us we've still got a lot of opportunity on lunch. we've got a lot of opportunity on late nights. there are other ways that are going to be easier for us to grow our business i think than

necessarily going into the breakfast fray in the near term. >> you must be bummed. i know you are in ann arbor, i'm sorry about the michigan loss last weekend, patrick. >> i got on my amazing blue here. >> i used to live in ann arbor, i feel his pain. patrick doyle, always good to see you, thank you for your perspective on a number of topics relating to the industry. ceo of dominick's pizza. the dow was up triple digits now and up 89 points. let's get a market flash with dominick chu. dom? >> a strong day for casino stocks after the gaming revenue was better than expected 20% and analysts were expecting a gain of 15% to 17% for the entire year. mgm, las vegas sands and gmg overall are all moving higher. wynn resorts, you name them, they are all going higher. and they are a focus for investors today, back over to you, carl. and families are speaking ahead of the gm hearings on capitol hill this morning in washington.

want to take a quick listen to this -- >> -- brothers, mothers, fathers, wives, and husbands are gone because they were a cost of doing business gm's style. corporate executives made a decision that fighting the problem was cheaper and easier than fixing the problem. my mission is two-fold. first, to make sure that everyone who is driving one of these dangerous cars is aware of the defects. a lot of these cars have been resold and as such a recall notice will not be sent to them. when i went to the website of the national ha trask sighway t safety administration, known as nht nhtsa, it doesn't say anything about 13 people who are known to have been killed because of this defect. the language does not convey the urgent, critical and potentially lethal portion of this message.

nhtsa must be more direct, helpful and transparent with the public that they serve. people with these vehicles should get their cars off the road until the ignition has been repaired to protect themselves and everyone sharing the roads with them. the second part of my mission is to reform the way gm and other car manufacturers do business. car manufacturers cannot be permitted to continue as if there is an acceptable loss of life. now is the time for congress to act and pass legislation that will give the public access to life-and-death information. give nhtsa the enforcement tools that they need and give automakers a warning that this is not acceptable and will not be tolerated. nhtsa which is responsible for protecting the monitoring of the american public needs more resources to get their job done. i urge congress to take immediate action to provide additional funding for nhtsa and to make the agency more transparent and informative for the public they are charged with serving.

please help us protect our children and pass legislation to make sure it doesn't ever happen again. thank you. >> there you see families for those involved in the gm accidents campaigning on capitol hill ahead, of course, of mary barra actually facing testimony herself, the new ceo of gm. let's bring in eamon javers with more on what we can expect. how is this afternoon lining up as we get more information from both sides? >> you can see the emotional e dynam dynamic. i was out there with those families a few minutes ago before coming to the camera position here and i can tell you it's an emotional scene. there are tearful families. some are holding up pictures of their loved ones killed as a result of this ignition switch issue. that's the emotional weight that mary barra will have to counteract when she testifies on capitol hill this afternoon at 2:00. we know she'll give a direct apology and she'll stay that gm still doesn't know exactly why

it took so long to issue this recall but she's going to get to the bottom of it and you can expect based on the emotional testimony of these families that we're going to see hear some very tough questions from gm and for the u.s. government entity responsible for regulating all this from the members of congress. they're going to want some answers. there are members of congress out there today mingling with these families. they seem very much to be on their side in this going into this hearing this afternoon. very tricky situation for general motors today on capitol hill, simon. >> all right, eamon, thank you so much. eamon javers on capitol hill. we also want to mention the president will give some remarks on the health care deadline today coming up at 4:15 p.m. today eastern right here on cnbc. when we come back, the profit himself, marcus le mo le on mary barra and gm in a moment. moment.

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♪ ♪ get your motor running head out on the highway ♪ about an hour into trading some of the stories we're talking about, 7:35 on the west coast and 10:35 on wall street. the ism index up to 53.7. any reading above 50 marks the tenth consecutive month of growth in manufacturing. shares of ford up 3%. the automaker reporting better-than-expected numbers than a year ago. and oracle and alcoa among the

stocks hitting new multiyear highs today. general motors ceo mary barra will be on the hill to answer questions regarding the controversial ig nit switch recall and how gm plans to rectify the situation. who better to weigh in on the turnaround than the specialist himself than marcus lemonis, the profit, the chairman and ceo of camping world and from the hit show "the profit." she walked in at the worst possible time to be the ceo of general motors. how does she walk the line of the gm of today and the gm of yesterday and all of the mistakes it made with at the same time taking responsibility for the problems? >> i think there's two issues here. one is she has to be obviously responsive to congress today, but there's a bigger issue that i see brewing that we're not talking about. two issues, the 6.1 million cars that are out on the street today, what are they worth now? 20%, 30%, 40% impairment in value? not only for the consumers themselves but the banks that

have financed them? that's number one. number two, what's happening to the auto dealers who post-bankruptcy paid five and six time multiple for these franchises, are they now impaired? and so i just don't know when we're going to start talking about other value that's eroding other than general motors value. >> this morning cramer said start -- be on the lookout for a double digit sales dip. if you don't get it, he would warm up to the stock. how likely do you think that is? >> i don't know if ford's number that we saw today 3.1 is a function of weather, i don't buy it. i think it's a function of a little bit of shift in market. we'll see it in the small vehicles and also some of the pickup trucks. i think he's right about the double digit dip. >> really? >> i do. a good dealer will make it up on used. they're going to feel it in the small cars. >> they have -- unless they can actually prove, this will be the point this afternoon, unless they can prove that gm covered up what was happening, they actually have no liability because of the bankruptcy as i understand it to the families. >> they have criminal liability, right? >> in a financial sense if they

haven't covered anything up. because the liability -- because the bankruptcy protection should have cleared all that. >> that's right. >> do you think barra has to step over that? i know she met the families last night. do you think it is absolutely 100% business proof that you actually give them money now, actualily pay them off, give them the compensation that they clearly are after? >> the challenge is between doing what is right and what the business can afford. it's good to write a check but as a bondholder of today's general motors do i want money leaking out of the system? is it marketing? is it goodwill? how do you book it? >> for the investor it comes down to the brand damage and the damage on sales. how long does something like that last for something of this magnitude? >> it depends on how many more recalls come out. the recalls that are coming out of later typical. auto manufacturers have recalls on a daily basis. the ac didn't work, this didn't work. the problem now they are front page every single day. >> more recalls this year than the last four combined.

that's not common. >> would you throw people under the bus? this afternoon they'll press her for names internally about who made a mistake and she'll probably -- she will resist that. if you were in her position for the sake of the business? would you throw employees under the bus? >> i would take the fall myself and tell you how i would fix it. what happened ten years ago is a bad thing but i think as the leader, the leader has to be the one to take the hit, period, end of story. >> i wonder if there is a bigger problem with the industry. this isn't the first recall? is there something in the supply chain? does the entire industry and the rest of the company need to look in to the process itself to make sure this thing doesn't happen anymore? >> i think we can do it with any manufacturer. should we look at the way toasters are functioning because the cord may burn. these things happen and it is awful. what the issue is, that it covered up, not that it happened. >> how much responsibility does the former, ackerson and fritz henderson, all the guys that used to run the company, to speak up, to say something about what they knew?

short of being. ed? >> they'll get subpoenaed. and she'll take the hit because that's the right thing to do and congress will call everybody else into the room. >> we'll see what she has to say, the testimony begins at 2:00 p.m., marcus lemonis, always good to get your input. you can catch a new "profit" right here on cnbc. when we come back, caterpillar also on the hill this morning. executives defending the company's offshore tax strategies. and don't miss kevin o'leary. it is "squawk tank" he'll join us in a few minutes and we'll talk about apple and samsung and mark zuckerberg's pay and more with the dow up 83. mine was earned in korea in 1953. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation.

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♪ change change chan change change change change

chain of fools ♪ more hearings on the hill, caterpillar under scrutiny for its tax strategies. hampston pearson is in d.c. monitoring the drama and the billions increasing that corporations are holding offshore. good morning. >> reporter: this is at least what senator carl levin the chairman of the permanent subcommittee on the senate side on investigations believes is basically a textbook offshore tax strategy if you will where in essence over 13-year period caterpillar shifted $8 billion in profits to an offshore swiss affiliate and avoided paing $2.4 billion in taxes. now, as we look in on the hearing right now some international tax experts are being questioned about all of that, but right at the start of this hearing, we had two completely different takes about where this all fits in the overall debate on the need for tax reform and specifically

corporate tax reform. listen to what senators carl levin and john mccain had to say. >> caterpillar is an american success story that produces iconic industrial machines. but it is also a member of the corporate profit shifting club that has transferred billions of dollars offshore to avoid paying u.s. taxes. >> as we have seen from previous hearings, parking those profits overseas rather than bringing them back to be subjected to a 35% corporate tax rate. this makes a compelling argument for broader tax reform. >> now, we're waiting to hear from caterpillar and pricewaterhouse coopers whom caterpillar paid $55 million to design and implement that strategy over the past 13 years. they'll be up and have a chance to give their version of events later on this afternoon.

specifically what happened here is the parts division, by the way, is caterpillar's most profitable and during a 13-year period going back to 1999 they moved 85% of those profits to that 20s entity once it had been created and as we see avoided paying a huge tax bill. carl, back over to you. >> another big -- another big industrial company being grilled today, hampton, thanks so much, hampton pearson on the hill. we want to get to the cme and talk to rick santelli. we just asked the domino's ceo whether he thought it was long lasting. he didn't think so. >> well, do you know what, that's the great thing about the grain markets and commodities in general. they don't adjust quickly because usually cycles whether you are trying to fatten up livestock or bring on new livestock or grow a crop like corn or beans, you need a growing season, but, yeah, from growing season to growing season things can change fast and nobody's faster at covering fast

than my buddy frank, i call him uncle frank. we just heard carl, basically the best commodity return in 18 months where i come from we're basically talking the best quarter in six quarters. and just look at some of these numbers, uncle frank. cheese at record highs. dairy's soaring. coffee, arabic.a and double digits on grain. which one would you like to talk about first? >> beans have an interesting story. >> we'll start off with soybeans. >> soybeans we had the report and it was a two-part crop report. one is the stocks that we have on hand. >> okay, so hold on. stocks on hand. give me o-crop. >> we were up a little bit by about 3 million bushels from 989 to 992 million not a big change there. it was sort of neutral. >> and new crop for those out there that will start trading commodities after we're done, new crops what we're looking

forward to based on what we are putting in the ground. >> new crop is november soybeans what we'll be planting here soon and what we find out is we intend to plant 5 million more acres to serve beoybeans. it's created the soybeans trading up to $15. >> let me stop you right there. we see in the equity markets most unloved rally in history. and most of the talk is the fed instead of dynamics. right here we have a real traders market. when there's a disparity between storage and how you'll replace it that creates spread relationships which really offer opportunity. what's the spread relationship if i'm trading soybeans and what contracts am i looking at? >> right now the spread is widening out because we have a tight situation with old crop and demand is just stellar right now. >> near beuy futures. >> the back month or new crop

beans we'll have a lot more of that. we'll probably have record acreage, 81.5 million acres up from 76.5 million last year and an additional 5 million acres and these are just in tangents. we could see more than that. >> these will fluctuate. we're still not putting seeds in the ground. before we were on camera you said some things that really interested me. on the grain market, what type of market did you say that was? >> right now it's demand-led rally in the front end. but yet it's the supply -- >> supply in the long end. hogs, demand or supply? >> it's all about supply. demand is a constant and we've had a lot of problems with hogs. >> and disease is the main issue. real quickly before we wrap up, do you think commodities like the ceo of domino's, do it's short-lived or pricing commodities more long term in your view? >> i expect demand to continue to increase and we should be moving higher with these prices. >> all right, uncle frank, thank you for taking the time today. sara, back to you. >> all right, thanks very much,

rick santelli. from commodities to real estate. where in the world is the richest real estate market right now? turns out new york has met its match. the top sales and the most expensive listings coming up. and do not miss the one and won't walt moss berg coming up in a few minutes on the tablet that you need to be looking at. "squawk on the street" will be right back. (announcer) scottrade knows our clients trade

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♪ one thing for sure the tech movement has been good for real estate in silicon valley. robert frank tells us why the valley now leads the nation in luxury sales. good morning. >> good morning. new report from coldwell banker marks the markets in america based on price, sales volume. number one in the country is woodside, california. that's the posh equestrian community in california. it has the most expensive homes sold in america last year. that went for $117 million. even for a modest home the bidding wars have crazy. this house just came on the market. let's just see it.

$5.8 million. within three days the broker had five competing bids. sold for $7.3 million a week later. the buyer was 30 years old. three of the top five luxury markets in market are in silicon valley. along the woodside, portola and hillsborough county. everyone in finance that's feeding off the tech boom. we look for the cheapest home in wood side. it's the cottage in the woods. two bedroom, one bath, price, $949,000. guys, back to you. >> that's scandalous. >> i like it. >> what's scandalous about it. >> it was a little shack, like a little nothing. that reminds me of new york, what you can get for a million dollars which is not that much. >> you get what you bay for. coming up in the next hour, forget 3d, 4d movies are coming to a theater near you. we're talking wind, fog machines, rain, even a little neck tickle device. it's all coming to the u.s.

>> i like it. >> we'll talk to the hollywood executives coming up. you probably know xerox as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users

remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business. and life gets lived. whoyour boss?rk for? yourself? your parents? your family? at baird, what matters most to you... matters most to us. as an employee owned firm, our financial advisors have the freedom and resources to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird.

♪

here we are on the first day of the second quarter. looks like we're kicking it off in rally mode for the dow, s&p, and nasdaq. yesterday's gains. >> obviously yellen has a lot to do, that very dovish tone. it's worth pointing out emerging markets are having a great day again. up for the seventh straight session. in general, world markets are rising but certainly we can't, carl, a new fresh record intraday high, i might be saying, on the s&p 500. >> yes. we'll see how the afternoon, whether we get a rollover this afternoon like we have for much of the past week. if you're just joining us this morning, here's what you missed. welcome to "squawk on the street." here's what's happened so far. >> that's what i'm looking for, is the beginning of a double digit decline in sales. if we don't get that, then gm is going to prove to be a buy

despite everything else. >> let's get the opening bell here. >> what i think you're going to see is they're going to be very straightforward. one of the things that everybody in this business knows is the worst thing you can do is hide something. >> you can see liquidity, up turn in the economic cycle. and what we just described is a much better earnings outlook for 2014. you put all of those in one package with a market that has yet to really move up for the year and that can put not just 9% or 10% but i think another 20% in this market. >> it is 11:00 a.m. on the east coast. 8:00 a.m. out west. markets are higher. and some corporate news. apple and samsung in court today as part of a major patent battle that could end up banning some samsung phones in this country. we'll tell you which top execs

are taking the stand and why. 3d printing, a $16 billion industry. it could happen sooner than you think. we'll explain. >> are you t in the market for a new laptop this spring? you could shop around in stores or online or you could just listen to walt mossberg. latest laptop buyer guide is here with top recommendations. >> have you ever wanted to smell, feel, even touch your favorite movie? now you can thanks to the brand new 4d movie theater. the latest dimension is coming up later this hour. we want to start up with the big news. apple and samsung back in federal court today for the latest chaptder in the two companies on going patent battle. the stakes are high. with a win apple could get several samsung smartphones banned in the u.s. josh lipton is live in san jose with more. josh? >> yeah, kayla, phil shiller, one of apple's top guns is expected to testify today. that really more than anything tells you how much now is at stake for apple and samsung. in this case, apple is alleging

that samsung violated five key soft wear patents including ones that every iphone user knows well. that slide to unlock feature and the auto correct feature. the patents relate to apple's iphone 5 and samsung's gal lax xi 1rks3. grit ticks have charged that apple's demands ares excessive but sources at apple tell me, listen, this is some of the most innovative technologies. apple devoted a lot of time, hard work, and money to develop that slide to unlock feature. and they're not about to get ripped off by rivals. samsung is counter that it licensed a lot of this technology from google's android operating system if that's true then apple's complaint should be with google. in fact, google's andy ruben, the man who built google's android software, is on the witness list here. apple and samsung have been battling for years. two years ago in this very

courtroom a jury ordered samsung to pay apple $930 million in damages. opening statements are today. they start in just about one hour. carl, back to you. >> that's a big story with a lot of ramifications, josh. thanks so much. it does bring us to the squawk feed. joining us this morning, kevin o'lea o'leary, investor on "shark tank." he joins us remote today. and jon fortt is here. let's start with the big court t battle. a lot has been said about patents in general but not just about samsung and apple, too. >> i remember v covering that not so many months ago round one. probably not going to get a ban on samsung phones. that's what they wanted last time. even though they got a nearly billion dollar judgment, at least for a while, they weren't able to get a lot of banned phones. sh a pride issue for apple. some people would say you ought to let samsung have auto

correct. have all the means without the auto correct mistakes out there. unified search. these have become such common features in phones that we feel like they always existed. apple's burden is to prove that, no, we inventeds these. >> so common a google executive is going to be an expert witness here. that's how it is in the tech industry. you have this trial taking place in san jose. not far from where apple is located. you got to pick a jury that somehow is impartial. how do you do that and can samsung cry foul on this? >> i don't think you can. at the end of the day litigation is a tool in modern business. when i teach young people in business schools today, i say, listen, business is war and if you get an opportunity to go to court and actually hurt your competitor with a ban on their product, it's like pouring boiling oil and salting the earth their offices are on. this is wonderful stuff, if you can pull it off.

if i were an apple shareholder i would wish them to win this and ban the galaxy series of phones. the likelihood is low. but at the same time it's a great strategy if you think you can do some damage to your competitor's brand. the likelihood of it working is not. >> you mean whether or not you're standing in court is legitimate, it's a competitive tool? >> absolutely, carl. it's weaponry. remember, business is war. there's nothing wrong with this strategy. you should put this in everybody's income statement. you're going to litigate everybody every time you can. that's what makes it work. and at the end of the day if you are lucky, maybe lucky that you can ban a couple of phones this could add to your earnings. that's what you're supposed to be doing as a ceo. we've forgotten about this. >> i would argue even though apple actually won in court the last big round in this court, they might have lost the marketing battle because the message out of that trial was samsung has managed to copy apple and even apple sort of admits it. i think that sort of got drug in

the consumer consciousness and maybe buy a samsung. >> we saw that play out of marketing when samsung said not only did we do this but now branding ourselves as cooler than apple. kevin, how much is this going to cost in the long run? i know we don't have estimates right now. they got samsung to pay over $00 million the time before. is that worth the slog in court, the lawyer's fees, the reputational tan anybody that could potentially come out of this. >> most firms this size have their own contingency of lawyers within, in-house counsel. there are external fees. i think at the end of the day it does tell you something as an investor. if you don't know which way it investigation is going to go, simply buy qualcomm in this case. at least you're participating in both brands regardless of who wins. and maybe that's the most important thing. at the end of the day if you really thought one of these people were going to win in court, it would hurt the stock for sure. these are core elements to their earning strategy. go right down the middle. take the long bomb and go

qualcomm. facebook's top executives took home a big haul last year. mark zuckerberg made $3.3 billion by exercising options in the social network. even though his overall pay dropped 70%. meantime facebook's number t sheryl sandberg sold more than half of her stake. kevin, the sandberg part is the more interesting one. what does that tell you about the long-term prospects or how she views their long term prospects? >> i have no problem with what she's doing here. what i love about this story is at the end of the day it makes us go back to that wholeville fication of the 1%. notice something here, carl that is so important. they are going to pay hundreds of millions of dollars in the case of zuckerberg, billions of dollars in taxes. thank you, capitalism. thank you. and let's not forget that.

that is what fuels the government, is the money these people are paying in tax. now, regardless, they should be diversifying their portfolio. nothing wrong with somebody taking some off the table because, let's says face it, facebook is not risk free. these are pillars of capitalism and they're doing their job. they're making money for me as shareholder and paying their taxes. let's leave them alone. >> they're selling a little bit more stock to actually pay for some tax bills as they creep up. jon, i'm wondering, sandberg's selling scheme is automatic. happens every three months. can we countdown two more years before she completely exits facebook? >> i don't think that's going to happen. i think they're careful about making a mistake. i think so opticswise this is pretty good proxy. look at who they consider in their peer group. adobe, microsoft, amazon, qualcomm, ebay, sap, google among them. and one of the things that i look at, too, is the perks. you don't see sandberg using company aircraft for personal use. there's a lot -- zuckerberg does

and they actually account for that specifically. opticswise it's not as egregious even as a company like ibm which allows her family members to use a car service on the company. that's a little bit of a throwback. it's not a lot of money by executive perks standards but still it's an eye catcher. nothing like that here. >> does her stock sale make you think she's not long for the company? >> it doesn't make me think that. look at the rate and i try to track this at which google executives sell stock. apple executives sell stock. it's like they use this as an atm. you got to look at how much of the stock they're still holding. she's got big grants that come up yearly, too, that take quite a while to vest. hers in particular in the ctos are tied to these four-year time trenches that are really designed to keep them there. that's an important part. >> quite a salon chatter about what she could do. could she potentially replace bob iger or run for state

senate? >> replace barack obama. there are all sorts of talk about her. she's arguably the highest profile kind of political social executive in silicon valley right now. she's not shy about putting her perspectives out there about work, about women. she's a high flier. >> is there a job you think she should take? >> i love this idea for president. if she's going to do that she better sell a ton more stock. it's getting very expensive to run these days. >> i got a few friends. finally, the 3d printing sector set for some major growth over the next two years. according to the research firm canalys, the size is set to grow to over $16 billion by 2018. that market was worth about $2.5 billion last year. i mean, obviously dealing with a lot of unknown, jon. does that number sound right to you? >> no. if you believe this number there's a social game prog jekz i'd like to sell you. beware of the three and especially five-year

projections. here's my issues with 3d printing. when you look at the idea of a consumer market like this, unless it's something like scrapbooking it's hard to imagine what it will g. there's no easy way to design a beautiful object through 3d printing at home. the printing process is too expensive. dentist dentistry, it's professional, it's high margin. other than that, it's hard to see practically. >> it takes forever to print even one of the smallest objects here. >> exactly. >> just by nature of that you can't really produce that many things to actually go out and sell. kevin, i'm interested. what do you think about this market? how quickly can something grow when it takes so long to produce? >> i don't think this is going to become a very large market. you can talk about $5, $10 billion but printing companies only make about 15% free tax on the sale of a printer. it's an expensive item. i think this is a rounding error

for the industry. i don't think it's going to become mainstream for the reasons we detailed here. i have 17-year-old programmers in he basement that are hackers. i asked them would they want to play with one of these? they say it's so complex to write the code to actually do this, you have to become a cad genius to make anything, like a pair of dice. it's not going to be consumered until it's easy to use. >> kevin, have you been pitched anything related to 3d on the show and what's been your response? >> we've been pitched three separate times in this area. and you know, the trouble with it is, is when you look at the projections of sale, it's a firmware, software and the printer itself. no projections make sense to me. i can't find anybody who is making any money at this right now. it's almost in the prototype stage. and for me, that's not worth investing in. if i can't get to market within 36 months and make money, take it behind the barn and shoe it. >> i think you've got to look at desktop publishing and digital

photography as models for something like this. desktop publishing took off making it easy for anybody to create a beautiful document. and digital took off with point and shoot digital cameras. nothing like that for 3d printing yet. >> you guys are good together. i like this. jon fortt, kevin o'leary. you can catch more of kevin o'leary tonight at "shark tank" on tuesdays. you will see him later this hour, too, because up next if you're in the market for a laptop this spring, which one is right for you? luckily we've got the guy, walt mossbe mossberg, on the case. and walt will join us when his picks when "squawk on the street" comes back. e

financial noise financial noise financial noise financial noise

s&p 500 hitting a new intraday high today. the consumer discretionary sector a big winner on the s&p. if more on that we head back to domed a headquarters. >> kay larks a strong session for the consumer discretionary stocks led by of all companies trip adviser and expedia and price line. more on the online travel side. prease line group. also in the group here ford which reported better than expected march vehicle sales and delphi, the automotive parts maker. overall it's a broad swath with regard to all consumer related stocks. remember, they didn't have a great first quarter but they are roaring out of the gate this time around. back over to you. >> all right, dom, thanks so

much. it is the first day of the quarter. maybe it's time to get a new laptop. walt mossberg is here with his spring guide to buying one. he, of course, is the coexecutive editor for re/code and joins us this morning from d.c. walt, good to see you as always. >> great to see you, carl. >> you like to do this every spring. this year there's a bigger reason to get into a new laptop, right? >> actually laptops themselves have not had, you know, any fantastic new features added to them or anything like that. but there's a ghost from the past that may drive you to the store. and that is windows xp. windows xp was designed in 1999 and shipped in 2001. and in just a few days on april 8th microsoft is completely ending its support for it. that means no security patches, no tech support, nothing. so if you are still holding on to a windows xp computer, and a

surprising number of people are and companies are, this is the time to think about getting something different. >> walt, you mentioned in your review that for some people a tablet with a keyboard, that's what i use, i'm pretty much dropped the laptop all together, it might make sense. who do you recommend actually go with that versus a laptop? where is the cutoff? >> well, you know, before last week, jon, i would have said, well, if you're doing a lot of spreadsheet work or you're creating presentations, you probably don't want a tablet even with a keyboard unless it's, you know, one of the surfaces for microsoft where you're really working in desktop windows. but, you know, last week, as you know, microsoft put a very robust version of office on the ipad and i think that changes a lot considering the ipad is

still the most popular and versatile tablet. and especially popular as you know in business. i think you can now do all of a sudden in the blink of an eye you can do a lot more with familiar software on that ipad than you could have done two weeks ago. >> but, walt, what about the cost conscience consumer who doesn't want a tablet because they want to get out of that interface but they want to not spend more than, say, 5, $600. is that possible? >> yeah, it is. the problem is windows -- first of all, it's not possible on a macintosh. it is possible on a tablet. you know, i don't know what you mean by get out of the app environment. but but there are many lab tops in the range, windows laptops in the range of, you know, four to $600 that would be adequate for light to moderate use. what you're not going to find in

that range, unless you, you know, are careful about finding a sale, is you're not going to find a touch screen which is really important for windows 8.1 if you're going to use those new start screen applications. and you may not find in the cheapest laptops the newest intel processors which really boost battery life. but there is a bargain kind of thing you can buy for even less than that for $200 or $300. that's a chrome book. you guys know what a chrome book is? >> oh, yes. >> yes. very basic. >> using the web, right? >> it's very basic. it's something google developed. it's made by azur, hp, toshiba, and samsung. basically what it does is it runs the chrome browser and there are apps that run inside

the browser like google drive which has docs in it and some other thing. the irony is the exact same stuff can be run on the chrome browser on mac and windows but the entire chrome book is very inexpensive. it's a good second computer. it may be a good computer for a student. >> it's a great read. your wrap-up of laptops. one thing you don't like hybrids which we should make clear which we can talk about at a different time. the president is meeting with the red sox today, walt. we know you love them. congratulations on last year's victory. why do you like your chances this year? >> well, you know, i think they have a great chance. i expect them to be in the playoffs. but if you xwru up in new england like i did, you're a little wary about asking for too much. three world series since 2004 is something i never thought i would live to see. and if that was all i got

between now and whenever i die, that will be fine. >> don't get greedy, saying something who used to live in chicago. >> right. >> walt, thanks so much. good seeing you. >> take care. >> a reminder, nbc news group is a minority investor in re/code and we have a content sharing partnership. there's been talk of high frequency trading and whether the markets are rigged this week. if it's such a big problem what can we do about it? gary kominsky is here to give us his take on that topic in just a few minutes. but first, rick santelli, what's on your mind today? >> jobs, jobs, jobs. with adp and lbs on friday, we're going to talk about how interest rates may be impacted by the reports. right after the break. tdd#: 1-800-345-2550 trading inspires your life.

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nice shot of michigan there. speaking of chicago, let's get to the cme group and check in with rick santelli. >> well, you know, traders change their minds like, you know, we change channels on tvs. yesterday was all about, you know, talking about the things like high frequency trade, how that's different from electronic trade. today it's all about jobs and the yields curve. it isn't only the trader on this floor, it's the big boys as well. so we haven't talked about the curve in a week or so. let's refresh. when it comes to what the yield curve has done of late it's been about flattening. why? let's look at a couple of issues here. the short end has issues like the tapers, zero interest rate, policy, and, of course, the

exit. let's go through them individual individually. the taper, that was already priced in last may and it has a bigger effect on the long end. zero interest rate policy, the reason the curve flattened in the march meeting and how it's pretty much been shocked into a stable place. much flatter but not moving a lot. and, of course, the murkiness, the question marks, the uncertainty exit. this is the one that looms large but this is the one that changes pricing. on the long end it's so much easier. pricing pressures, well, commodities, yes, but the government's numbers not so much. not at this point in time. sustained growth. this is a biggie on the long end and risk i can simplify that the long end is your hedge. for anything that goes wrong with stocks. now, why is this important for tomorrow's number? because many traders think that you're going to get a pass on this number tomorrow fits weak. why? well, because of the weather and we want to kind of get over this hump potentially. so maybe it will be the next several on the weak side.

so the weak side of tomorrow's jobs report probably isn't going to change that shift that we saw on zerp and if the number is super strong tomorrow, most likely the area that will be affected the most will be the long end because, as i said, they're going to get a pass on super weak. they're probably already priced for super strong. so it's all about the long end. so really what we are saying is, most likely, unless things are status quo tomorrow, and i would say status quo is 150 to 2, 225, anything super weak or super strong, i think you have to get another steepening of the yield curve for the most part. and that seems to be exactly the way traders are positioned. back to you. >> that's a good curtain razois racer, as we take to say. a couple of minutes until the european close. we are back on track with simon hobbs. >> a few gains in europe today. we've extended the rally on the good day until we got here on

manufacturing. about 90 minutes ago. so as you can see gains virtually across the board. fascinating situation with greece. not only has the eurozone finance minister signed off on the bailout but greece is talking about coming back to the markets and selling sovereign debt again just two years after effectively it defaulted. let's see the yields continue to fall there on greek debt. there's obviously a lot of speculation now as to what happens on thursday with the european central bank. that lousy inflation data that we had yesterday. the feeling seems to be nothing for now though there's a possibility of extraordinary measures further down the line. bull market is supported today. that's why you see so many of those third and fourth line banks doing well. m and a as well in europe into the mix today. you've got one of the uk engineers where we're making an attempt to make an offer. that stock is up 20%.

that will probably be a 7, $8 billion deal. the french engineering giant that makes the super fast french trains that have the profit warning last month. it's just come through and announced it's got a billion dollars of sales of steam powered equipment to private equity in europe again. an interesting mix there, guys, european markets higher into the close. back to you. >> thank you for that simon. any handicapping of what happens on thursday? what are people in europe saying about that? >> there's always talk about the possibility they could move but the feeling seems to be anything major would have to be further down the line. that 0.5% print on cpi yesterday is very scary. diverting to economy if you're looking at the unemployment figures tomorrow. italy and germany. >> closely watched. we will stay tuned with you simon. glad to have you back in the 11:00 hour. not a bad way to start the quarter. in the u.s., off the highs. dow up 55. when we come back, smoke, wind, fog, rain, and strobe lights. no, it's not a club.

it could be your next movie theater experience. behind the world of 4d movies later on this hour. ♪ geico motorcycle. see how much you could save.

high frequency i trading is the talk this morning. we want to bringer gary kominsky, morgan stanley's vice chairman of financing. what's happened over the last couple of days --

>> i houth thought kayla was going to say you know something about the fbi. no. look. and i understand that yesterday this had to be covered because everybody wanted to sort of get an understanding. kayla, do you remember the last time "60 minutes" did a piece on this financial services industry and they had a lot of sort of very big statements that made a lot of big sound bites, i.e., this certain sector you're going to lose billions of dollars. >> sounds like meredith with it. >> you have to recognize when they are approaching a topic like this they're trying to do it in a way to sensationalize it and keep the viewers. for what investors need to focus on high frequency trading is almost irrelevant. >> a couple of issues here. one is the laying of expensive fibers to get trades processed by certain traders before others. and there's an idea of a proprietary feed that some traders can watch in realtime a book being built. are these fact, fiction?

>> again, if people are breaking the law, that's what the fbi looks into, that's illegal. but the idea of putting servers next to certain locations to my -- the way i look at it is it's more of a disclosure issue. in other words, if you're telling people that you're selling the service, faster access, i thought of the analogy yesterday when i heard about this, if you go to fill up gasoline in your car, you have an option of putting regular unleaded in or super unleaded. i don't know if there's any difference between the two. if there isn't, great marketing. if you think you can get a faster utilization out of your car by paying super unleaded, you pay a higher price. >> you get a penny. >> it's irrelevant. >> how much is it worth in the end? >> it's irrelevant to long term investors. if you can indulge me for a second. i -- sense i couldn't put it in words myself the best way, the great strategist nick coal put something together last week about the difference between what is a trader, somebody who

cares about this, and who is an investor, an analyst. read the full screens here. what do traders say on analysts? fire them all. in a bull market you don't need them. in a bear market, they will kill you. analysts about traders. how do you know what stock traders like? look at yesterday's new high list. same thing. what do trader s do when they get bores? buy a few heavily shorted names. kind of like intraday and see if they can get other traders to buy higher. what do an analyst do when they get bores? read warren buffett's 197 letter to shareholders. what is the trader's mantra? respect price. what is the analysts' mantra? i just spoke to management and everything is fine. it's tongue in cheek. but it makes the point if you're an investor it's interesting to watch "60 minutes" and listen to this but it's irrelevant to long term. >> you're not saying it's right, right? you're not saying it's right or wrong. >> i'm saying if you're an investor -- >> ignore it?

>> if you're an investor you don't need a penny on the top. >> exactly. i spoke to a number of good friends down here on the floor before we came on air today. i'm old enough to remember when everything traded in increments of 8s. when you bought and sold securities you knew you were giving up 12 1/2 cents on the buy side, on the sell side. there was a spread in between. it's not that it's irrelevant but if someone is gaming the systems illegally, it matters. if someone figured a way to scalp pennies here and there because they are faster, not relevant to your long-term investor performance. >> have your clients raised concerns in the wake of this debate? >> no, not yesterday. i'll be at an event tonight. i would be surprised if somebody didn't ask about it given the fact that "60 minutes" is a wide viewership. but my response to them is going to be the same thing as what i just said here today. if somebody is breaking the law, they need to pay the price. if somebody figured a way to

game the system for a couple of pennies, if you're an investor, who cares. >> it might delay some inflows from retail investors long term. you don't think that's a possibility? >> if that's the case, if somebody is going to make that decision, making a bad mistake. the fact is as i told you now paul for the better part of the year, you see it when you look at the performance of the markets today, it's all about quantitative easing. yellen coming back yesterday, reminding people what her mindset up. stocks have been going up for two years. >> you alerted us, it must have been three weeks ago. >> that was a crazy day. >> that one of your sources said look for a big change in leadership. a lot of momentum names are going to give up the ghost. that's exactly what happened. >> as you know when i used to be doing the cap markets, that is the person who tracks thedex us fantastic job in pennsylvania. all of the closet indexers who had to own the names had full positions. no different than what happened

at aal couple years ago. when they are fully invested in the names they're trying to mimic the index, there are no buyers. that's what happened. especially in the large cap biotech as he pointed out almost to the day. >> come back soon. don't stay gone too long. >> you got it. i like the leopard dress. >> this is tiger. >> somewhere in the safari. >> see you guys soon. we should also note michael lewis is the author of "flash boys, a wall street revolt" will continue the conversation later this afternoon. he's live on "power lunch" at 1:00 p.m. eastern. you will not want to miss that interview. swimping gears. making a golf ball is a complicated process so we went to nike's high tech golf lab to see how it works. morgan brennan is there live in beaverton, oregon. >> they call this the oven because this is where nike's golf ball engineering are constantly cooking up new designs. the goal, at least one new golf ball prototype per day.

we're the first tv crew inside the lab, two miles from nike's headquarters. here's what is sitting next to me. these are the made in oregon resin golf balls. they are going the hit store shelves but right now they're going through their final coating. if the thickness of coating is off by a couple of microns, basically a fraction of the thickness of your hair, you're looking at a trajectory that changes by several yards when you swing. super detailed. as for what's inside the balls, resin. so that's being supplied by chemical maker dupont and it has the surface has a waffle iron shape. the idea here is that -- it's also lighter weight than rubber which is the more traditional used core in the golf ball. the idea is there's more energy with impact. that's going to be good for your nike spokes people like tiger woods who is switching over to these balls. it's also supposed to be good for your average everyday golfer who has an off center swing like me. it's a very -- may seem like a

lo of time and energy and money going into golf balls but it's a very crowded space. $1.2 billion business. we have a lot of competitors here. the usga saying theyested 1300 golf balls last year from 73 different companies. the top company here is actually titlist. nike is looking to bring the heat to take on larger market share. carl and kayla, back to you. >> obviously competitive business and widely watched name. pretty interesting stuff. morgan brennan at mike in oregon. went we come back, mary barra is testifying about the faulty ignition switches on capitol hill in just a couple of hours. we'll tell you what she plans to say in just a moment. [ bagpipes play ]

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coming up at the top of the hour on the "halftime" show, trading day of the second quarter. liz ann saunders is reporting where she is put 2:trillion to work. we have a defender of the practice battling it out with a floor trader vocally opposed. gm ceo mary barra is going to

capitol hill for her testimony today. we've got the gm trade. all straight ahead at the top of the hour in about 15. >> scott, thanks so much. in a couple of hours as scott said, general motors ceo mary barra will take the stand in washington testifying on the problems with those ignition switches in gm cars. our eamon javers is live in d.c. with that. >> you can expect this is going to be an all hands on deck moment for general motors. very high profile situation. emotions are running high. we had family members of some killed as a result of this ignition switch issue up here on capitol hill today. they're going to be here throughout the day. that just adds an element of drama to this hearing that's unpredictable for the company. the company has got the assets to handle this in washington. take a look at some of their lobbying power house here in washington. they spent $8.82 million on lobbying in 2013. that was up from 2012 although not as high as it had been during the financial crisis. they've hired ten outside

lobbying firms to work for general motors here in town. their hired guns include three former members of congress and also 30 former capitol hill staffers. you can imagine that a lot of those folks are going to be on high alert today as we into this hearing which is expected to start at 2:00. we're expecting a brief statement from mary barra in which she's going to apologize and q and a session with the lawmakers. that's where things could get interesting for general motors. carl? >> eamon, thank you. we'll come back to you later on. in the meantime, send it over to dominic chu and get a market flash. >> let's look at pandora, the internet radio service company. repeating a buy rating on the company and $43 price target on the stock saying that march ad load suggest a sfrotrong first quarter. they're up 3 1/2% here in trading. back over to you. >> big move in that stock, thanks. coming up, see me, feel me,

touch me, smell me? you can do all that and more while watching the latest blockbuster film. the creator of the 4d movie theater will show us how it works when "squawk on the street" comes back. ...for the year. hi. sorry. just want to say, i bundled home and auto with state farm, saved 760 bucks. love this guy. so sorry. okay, does it bother anybody else that the mime is talking? frrreeeeaky! [ male announcer ] savings worth talking about. state farm. we know we're not the center of your life, but we'll do our best to help you connect to what is.

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tech companies are taking april fool's pranks to the internet from cats to helmets. you will be thinking twice before you click -- twice. jon fortt has been keep an eye on the pranks. people say titsz worst day of the year. what do we have to deal with? >> i'm going to save my favorite for last. that's linkedin. but we've got uber, new yorkers will appreciate this. they say they expanded the second avenues subway overnight. that's only funny to us, i guess. they added oculus rift integration. you can see the owl with the big goggles on his face. that's pretty hilarious. one of my favorites, not linkedin yet, but htc and samsung both had the same joke about a wearable glove. show you just how similar the android seem to be thinking. how do you tell these phones apart? same prank. for the win, for the win in my

humble opinion, linkedin's cats you may know. cats you may know from linkedinlinkedin allowing your cat to find similar breeds and others to play with online. one of the cats that they have on there is battle -- what is it? >> cats and liar likenesses? >> i'm not sure. it could be cats from linked in employees. there's also a pooptart you can check out there if you ant to connect to that. >> i love the market watch story where steve was saying on april fool's day he is to try his hand at the apple customer service line and he would ask customers how they like their iphone, how they liked their ipad and just be completely straight faced about it. >> silicon valley gets into this. i think in a way it shows your company's sense of humor. you get to see who can bring a funny and a few of them have. >> some nontech companies get into the game. american eagle had american

beagle outfitters. >> there it is. cats you may know. >> the ini havitation is stalil waiting nk want to be in the movies? you probably will not get a starring role any time soon but you can be closer to being immersed in your favorite film than ever before. we're going to talk about how in just a moment. i'm nathan and i quit smoking with chantix.

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welcome back to "squawk on the street." it's a known fact that movie attendance is down but what if you could feel, smell, or even touch your movie. would that get you to the theater? two entertainment companies are bh making a big bet on that, on 4d technology in your theater. mark has is ceo of cj entertainment. thank you for joining us. mark, i'll start with you. what is the process like from the ground up to actually fund and build one of these theaters? how long does it take and how much does it cost? >> yes, well, thank you. and first of all, i wanted to

say we're excited to be partnering with aeg. it's an exciting company. and to be launching our first 4dx theater at l.a. live in the regal cinemas there is just an amazing situation. so we're very excited about that. and secondly, in terms of the technology and getting it all up and running it really depends in terms of the size of the screen itself but it could be as low, if it is low, a million dollars to $2 million per screen. and it could take probably anywhere between, you know, two to three months to get it all installed if we get the permits and everything right. >> so, this is kind of like a kitchen bathroom remodel, i figure. you've put the money in. you hope it increases the value of your theater based on the ticket receipts you can get in. how much more can you charge for tickets, how much more packed is the theater going to be based on your experience thus far if you install this system?

>> our experience is that occupancy rates have doubled of tripled. so it really does significantly enhance obviously the foot traffic into the theater itself. so that's one of the main reasons why we developed this screen for our theaters which are mostly out in asia. and in terms of the ticket price we work with our exhibition partners to figure out exactly the right surcharge for this. but we've seen the surcharge to be reasonable at like $5 to $8. so it's not so much so that it would be difficult for consumer's do to get there and certainly lower than amusement park rides and less lines as well. we found it to be very well received. >> we mentioned the fog machines, the rain, the neck tickling device, which i still need more clarity on. how much does this cost to install, convert, and how much does it cost to operate? >> as i said, it costs about

maybe a million to $2 million per screen. and as far as mate nance goes, we've now been in the operation for three years. you know, the systems have worked really, really well. so our maintains has been relatively low. as far as, you know, the tickling and all that, i think it depends on the producers so we actually work with the studios and the producers and sometimes the directors of the film to really, you know, figure out exactly how much tickling and how much movement people might want. >> is there any possibility of a home version some of this because i imagine that could be a nice market for 300 bucks if you can get that experience. >> absolutely. thinking about that as well but focusing right now on the theatrical exhibition rollout. after that, i think certain folks might want it no their homes, yes. >> tom, based on the experience of c.j. and japan, taiwan, some of the place where's this model has been rolled out already, what are you confident that a theater like this in l.a. could bring in revenuewise?

>> we're very confident it will drive consumers down to l.a. live and want to experience this in that live entertainment fashion. we love innovative products being able to be brought to our campus. for us to be able to have this more than 100 seats available where everyone can experience this in a communal experience we certainly expect this to increase our revenues on a daily basis once this theater is open. what better place to be able to premier a theater in a location like this in the united states than in l.a., the capital of movies? >> dollar projection? >> we expect the dollars will increase probably somewhere at a minimum of 5% to 10% for that theater and those are minimum projections. we're cautiously optimistic that we have the ability to do even better than that. we're also excited about being able to bring so many more people to experience this unique way to watch a movie that will

increase the attendance for all of our screens. >> mark, i'm interested to know how much say do the studios have in exactly what bells and parts you make. during "frozen" do you make it cold in part of the movie? >> they absolutely control it. this is their product. we provide the technology and the editors that will make -- create the experience as they want it. they will come in and qc everything that we do. some are very, very active. and some are less active. but i think they're getting more active as they see, you know, the impact that the experience is having for film goers they want to make sure they put their creative input into the process. >> congratulations on the partnership. todd, mark, thanks for joining us. best of luck with the new opening. >> thank you. meanwhile, dow has given up half of the gains. we were in triple digit

territory at the get go. we've seen a slower erosion has europe closes. now at 51. things are pretty interesting, too, on capitol hill with mary barra and gm this afternoon and for that we're going to turn our attention to scott wapner and "the half". >> we're going cover mary barra on the hill. april as you guys know how the dow's best month since 1950. >> up 70% of the time, two-thirds of the time roughly? >> yeah. and off to a pretty good start. losing a lit bit of a steam. welcome to the "halftime" show. youtube playbook. after a shaky first quarter what's in store for stocks now? schwalb's liz ann sanders has your winning plays. with the fed zeroing in on super fast trading we hear from a defender. nchtz in the hot seat as gm's ceo gets grilled on the hill, our traders reveal whether the stock has broken down or ripe for a bounce. let's meet