>> the center of gravity in the u.s. congress what he stands for. >> saying hear a bunch of people in their 20s saying we're going to start abroad. >> right. >> okay. thank you very much. >> thank you very much. >> thanks, guys. >> great. >> and make sure you join us tomorrow. "squawk on the street" is next. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla and david faber and jim cramer fresh from his one on one with tim geithner from barnes & noble in new york city. futures are weak on the earnings miss out of walmart, one of the worst misses for that company in several years, offsetting strength in cisco after those reports last night. boat load of economic data, the ten-year was spooked, jobless claims at a seven-year low, cpi in line, highest year over year

gain since july and europe mixed for the time being. our road map with more bad data from american retailers. walmart sales and profits below estimates, kohl's disappoints blaming on the weather or a weaker consumer. >> david tepper says there's a time to make money and a time to not lose money. can you guess what time it is now? >> cisco beats as sales fall. john chambers sends the stock higher. first up walmart did report numbers of 1.10 a share, a nickel below, sales fell for a fifth consecutive quarter. the quarter forecast shy of consensus, weather shaved 3 cents a share off the q1 earnings, and kohl's missed with quarterly results. comps down 3.4%, but walmart is the real story, jim. u.s. comps down 1.4, we were looking for a slightly positive number in this country. >> comp traffic down 1.4, really just not a great quarter.

i like to scan these in preparation in coming up in the show and go over the release. i'm looking for something positive, something that says double digit. so this pops out in front of me. double digit. we realize unanticipated double digit percent growth in our maintenance and utility expenses associated with snow removal. there you go. the double digit days of walmart. >> we got it. >> double digit snow removal. >> you could find one which is double digit on e-commerce. >> yeah. >> e-commerce. >> to be fair. >> 27% sales worldwide. obviously off a small base. we're not talking about a huge challenge to amazon at this point. walmart may be getting it together a little more in e-commer e-commerce. still send people to the stores to a certain extent, buy it and pick it up there. >> sams club terrible. >> international bright spot. >> sams club down, comp down over u.s., sams club walmart u.s. 0.2% decline.

0.2. >> what's maybe the consumer is not spending but the small business people used to go to walmart, sams club, great value, has walmart lost its way? i think a lot of people feel walmart is food stomachs, unemployment -- food stamps, unemployment, play on the u.s. government stimulus and i think it's also a recognition that people shop elsewhere. >> also this idea that okay, you say that the second quarter got off to a good start. people now wondering well maybe that's just an easter giveback because of the holiday transition. >> the macy's conference call, a little more upbeat than this, did say again, things did get better. you have this -- it's clearly may is not as -- not going as badly as some of the other months, but look, this is one of the things where when i read this, this is doug, i do not know the man -- >> i do. >> but he says our underlying business is and puts is bold, like how your kids fool with fonts on your pcs, is solid and

i'm confident in the company's long-term strategies. i read this and say why? why are you confident? is confidence misplaced? >> yeah. i don't know. i'm not sure the investor base knows. when we talk walmart a company that sold $80 billion worth of stuff here in the u.s. another $34 billion or so around the world. >> how much can they really sell? >> my point, it's retail in the united states. that's $80 billion in the quarter, u.s. so you compare that to any other retailer, look at the numbers, it is a reflection to a certain extent of what's going on in the 0.2% gdp growth in the economy. >> what you're saying this is just a gross domestic product play and maybe a household formation play and nothing more than that and go -- get another company -- >> return $2.2 billion in proceeds to shareholdersp. >> 1.55 billion in dividend. the dividends walmart pays, a lot going to the walton family. >> invest in the walton family

or the stock? >> significant share shareholders. i can only imagine what their quarterly dividend checks look like. >> and they bought back a lot of stock. >> also, ibm, walmart today, the tax rate continues to be a big part of the conversation. in this case the effective tax rate was higher than they expected. >> invert. invert. >> yeah. >> walmart should buy -- >> buy a country. they could buy ireland and then invert into it. >> ireland pays a good yield. >> there you go. >> and then right, maybe even ireland's borrowing rates would come down if walmart inverted buying ireland. >> it would be good. stimulus. >> almost as many employees as ireland has people. >> look, it's -- all right. let's take it another way. is it too big? is it another too big to invest like the banks? it's just too big. you have to decide i'm going to finds the next walmart. that's what we've been doing the last few years. for a long time you didn't need to find it was walmart because the company returned so much cash like a bond, this is a low

yielding bond. >> but i mean they still generated 3.8 billion in free cash flow, still had an roi compared to -- 16.7%. >> i want companies that make the playoffs. theiry're not in the playoffs. >> you don't feel there's a reason to own it? >> i like companies to be in the playoffs. you're happy with a 500 team, second division team. i want first division. >> i have to be. i'm a mets fan. i have to be. >> so it's better than we used to be. that's all you need. >> i like good. >> how about going in the right direction. >> think belichick would buy -- >> going in the right direction, is better. >> going in the right direction. i like that. that's kind of a -- you think kevin durant is happy with this? watch his mvp. you think it's an mvp company. he had nothing -- thanked everybody in the audience. would not thank walmart. >> how are you supposed to generate significant growth above gdp above anything if you're walmart and you 2 million plus employees and $114 billion in sales a quarter, most of it domestic? >> okay. >> how are you supposed to do that? >> and a demographic in our country at least that is being

squeezed. >> and you have bad weather! >> you have neighboring markets delivering a 5% comp. there's a division doing something right. >> okay. so you're -- and they are growing. it's growing. >> i'm just saying maybe you invent new concepts, maybe -- look, if you work at walmart, do you just say you know what, we're just not that bad. we're just not that bad. you think like the big company -- like not so bad. have a board meeting come to order, we're not so bad. >> the other big story coloring the markets today, get this quote, i'm not saying go short, i'm just saying don't be too freakin' long right now, that's what hedge fund manager david tepper said at a conference in vegas. believes now is the time for investors to approach the market with more caution, concerned that chinese and european bank policies are too tight and u.s. growth too slow. tepper also said, quote, we've moved our position around different times. now i have my position such that i'm low enough in exposure i

can't bring it up or take it down. i am nervous and this is money quote, i think it's nervous time. jim. >> of the things i've heard in the last 72 hours that are most worrisome it's that. i respect david tepper. i've known him, fabulous manager. i would like to know where he's more nervous. remember in tim geithner's book there's a moment where he says, the only guy that really believed in me basically is dave tepper. when i did the stress tests for the banks he bought all the banks and had that gigantic hit in the banks. has he turned on the banks? does he -- is he short europe versus long u.s.? more cryptic than we like in terms of being able to take this notion of doing what a hedge fund is saying, and then trying to turn it into action. that's difficult for me because if the market comes down does he get more bullish? you want to hear tepper say it's all system goss. tepper does matter. i tend to not care about what managers say. >> is tepper looking for

volatility not getting it so he's trying to create some? >> wow. >> i wasn't born cynical. >> geez. that is just -- >> reporting for a long time. >> you're saying maybe he tries to drive the market down through the media and goes positive. >> not down, i'm saying he needs some -- >> look, dave tepper is -- dave tepper looks at his screen, doesn't like what he sees and says it. that's why tepper is great. has no errs about him. when i wanted to sell a piece of junk -- i had this great client that wanted to buy junk bonds. you sell that to your customer you're going to kill your customer. i'm not letting you sell that. he did say things about how goldman was not for me. i think that tepper is a unique video. by the way one of the most charitable people in the united states. he doesn't talk about it. >> that is true. really quickly before we run out of time, cisco excluding items the dow component did beat the street, 51 cents a share, revenues down a year ago, still

managed to exceed consensus as recovering demand in this country and northern europe helped offset sluggish sales in emerging markets. you said listen for what chambers said on the call. and, in fact, he said we are pleased with the progress of return to growth. >> let's go well-mart versus cisco. a lot of people felt going in, nothing cisco can do, too big. i want to give chambers. i've been tough on chambers. he's talking about the u.s. being incredibly strong, talking about enterprise being incredibly strong, communications being strong. he says the word momentum in the u.s. enterprise and commercial remains very strong. 7% increase in u.s. this is a really good quarter. emerging markets are down 7. he's got a lot of problems. brazil, russia, india, china, the emerging markets have kind of disappeared. the u.s., you read this call, listen to this call, this is chambers in his old style. this is the old john chambers. >> really? 1990s vintage? >> this is pre-laying off 5% of your work force chambers? >> which chambers?

>> the most -- which chambers? what is this like -- the good chambers. i don't know. this is the most enthusiastic i've heard him. there's no apologies in this quarter. things are really going well. they bought back a huge amount of stock, bought back like half the company. and he now is average basis 20.56. and i like -- i think that the theme of cisco is what i want to hear from walmart. returning to growth. returning to growth is what managers want, which is why that stock is going up nicely. you want to hear walmart say on their call, we've returned to growth. >> right. >> that's the magic elixer. >> with the companies buying back so much stock that is the choice they make in terms of their capital allocation, as opposed to putting more money in to conceivably future growth. >> if there were things to buy. >> not that they aren't doing r&d, capex or making acquisitions. it's interesting because that would seem to be the default for companies that know they're no longer going to grow at the rate

they were. shrink the cap by buying back stocks, pay a dividend. >> he returns money to shareholders. got a good yield. john talked to 100 different customers this quarter. goes through that over and over again. if the customers want product he's got it. if they don't want product maybe you don't put more money into the product. i'm fast chambers, praising chambers, not here to bury chambers. caesar. >> caesar? >> yes. >> brew tis. >> when we come back -- we're going to hear what cramer asked tim geithner about the most controversial part of the former treasure secretary's new book and how geithner sponned to his question. the premarket. some weakness for the reasons we outlined. more "squawk on the street" live from post nine of the nyse when we come back. .

breaking news. april industrial production, a bit on the weak side. down 0.6 and also a miss on capacity utilization, dropping to 78.6 from 79.3. so misses there as we continue, of course, to monitor the rather historic and surprising drop in rates, we are now only one basis points away from 2.5%. back to you. >> thank you very much, rick santelli. in less than an hour from now there will be a dedication ceremony for the national september 11th memorial museum in lower manhattan.

bob pisani is there with more. good morning, bob. >> good morning, carl. and gray skies down here, perhaps appropriately, ceremony will begin in 45 minutes. former mayor mike bloomberg, chairman of the museum will be opening that following president obama and then followed by survivors who will be speaking as well as family members. this museum has been many, many years in the making, carl. the tour begins seven stories down on the ground level. you'll hear recordings of frantic phone calls that were made at that time, you'll see the rusted steel remains of the tower. you'll see the famous pmetal cross, a battered fire truck, survivor stairs are there, became quite famous, the pathway for thousands of office workers who escaped when the buildings collapsed. you'll see thousands of photographs. p perhaps more controversially, there's a placement of unidentified human remains recovered from ground zero. a lot of things to see. takes about 2.5 hours to go

through the museum. this is the museum that is opening today. the memorial part which contains the two reflecting pools honoring the 2983 victims has been open for some time now. and for those of us, myself included, who were here on that terrible day, it's very comforting to be able to walk up to one of the kiosks, type in a name of a friend or family member who died, and see a photograph of them come up. remember them. then walk over to one of the two reflecting pools and be able to see their names etched into the side. i was here yesterday, there were thousands of people out by the reflecting pools, taking pictures and standing quietly. very beautiful and moving sight. meantime the building continues. freedom tower is scheduled to open in less than one year and there is enormous construction still going on over here. pan to my left here and you will see this -- the transportation center which is slowly taking shape. this is going to be the main transportation center for

downtown manhattan connecting brooklyn and manhattan. it's an enormous effort that's going to be a beautiful development when done. again that also opening in less than a year from now. so the bottom line is, we remember the past, but we keep moving forward. carl, back to you. >> bob pisani in lower manhattan, we will bring you the dedication at 10:00 eastern time and the president when he speaks shortly after that. straight ahead the opening bell and jim's mad dash. with ink plus from chase like 60,000 bonus points when i spent $5,000 in the first 3 months after i opened my account. and i earn 5 times the rewards on internet, phone services and at office supply stores. with ink plus i can choose how to redeem my points. travel, gift cards even cash back. and my rewards points won't expire. so you can make owning business even more rewarding. ink from chase. so you can. tdd#: 1-800-345-255050 tjust waiting to be found. ties tdd#: 1-800-345-2550 at schwab, we're here to help

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it's a busy thursday. time for the mad dash ahead of

the opening bell. we're going to start with one of your names, you just have always liked. >> say it ain't so. bemo. bristol-myers. i think this is frankly a downgrade that is going to send quivers through people. bristol myers has been rerated. people felt bristol myers not the same old, it's a high growth, anti-cancer pipeline play. they question in this report after looking at the data how really effie kay shus some of their anti-cancer drugs are versus kidney, lung cancer. this is a downgrade you must read if you own the stock. you have to understand people are going to be -- bristol has been highly valued in the group. >> right. >> so this is one of those you know how much i like this company. i have read the downgrade once this morning. i'm going back over it. i don't want to lose sight of the fact that this is a great franchise name. >> so you're not oftentimes when we put things up and talk about

an analyst move you will be somewhat dismissive. you aren't being dismissive. >> the data, i was hoping for good data. asco data, the oncologist. >> and the meeting is coming up. >> one of the reasons why i have warmed to bristol myers over the years because of asco data has been good. >> incredible pipeline in terms of dealing with cancer. >> so now what this does is throw a little chink in things. i'm not going to be so dog mattic to say that guy doesn't know what he's talking about. this is this weekend's activity. i will go through these abstracts as best i can. >> this is him. this is all him, this guy? >> yeah. >> all right. but that's -- this stock has a lot of momentum people in it. be careful. this downgrade has gravitas. that's what i'm saying. >> time for one more. >> one that i don't think has that much gravitas. plug power. this was the peak of speculation, this was march 3rd. i was on a oil rig when this happened. >> not that you weren't getting hate tweet soos.

>> people told me how could you not buy plug power. does a gigantic secondary. morgan stanley. i'm sorry $5, much more than that. what happened is it's come down and cou wan visited them and saw a lot of factory activity, they say it's time to go hold to buy plug. >> factory activity. >> why? is there a question as to whether the whole thing is just -- >> absolutely not. it's hydrogen fuel cells. walmart uses them. when you get the pallets. >> like we went to the warehouse and there was stuff inside -- >> this is not sunbeam. you're giving me -- no, it's real. we're waiting for -- everyone wants it to be in cars, okay. those forklifts don't do the trick. but they have a very good forklift business. i am not recommending plug power. i'm saying cou juan goes hold. >> we have a lot more to cover this morning and we will do that right after this break. the opening bell six minutes away. female announcer: when you see this truck,

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financial capital of the world. opening bell in about almost three minutes or so. we're halfway through the second quarter. as of today. and there's something for everyone today. walmart misses, but cisco talking growth. jobless claims plunge but industrial production a business miss and the ten-year, jim, looks like it wants to breach the 2.50 level. >> i'm wondering down from heavy utility use of the winter, a utility use number. look, we talked the other day about the streak we had, the streak has been broken for upside and i don't know a soul who doesn't say well, there is something very wrong when the ten-year is here. yesterday i was watching the spanish ten-year which i tend to have to do now, the spanish ten-year at 2.8 yesterday. 26% unemployment. we have 6% unemployment. how could you not go long this piece of paper and short that piece of paper. >> i agree. that may be one reason we're at

2.51, right? relative. >> relative to what is other higher risk -- i would argue spain is a higher risk. >> instruments that allow you to do that trade without you paying the u.s. treasuries interest. i think that what's happened is people just say, it's just inconceivable the u.s. piece of paper isn't worth more, meaning the bonds should go higher which means -- they're going to 2.75, seems like it. >> you think so? >> 2. 25 with back end way above that? >> some sort of weird one world wendell wilkie thing. >> as santelli calls it, a central bank rabbit hole. >> i'm going to do something -- >> going to agree with him? >> i didn't use the "a" word. >> sorry. >> i think that makes sense. i'm using the makes sense word. >> we went through walmart's

quarter. didn't do kohl's, 60 cents, misses 62, comps down 3.4. didn't give guidance for this quarter like they normally do. >> they didn't cut guidance for the year. i regarded that as being good. kohl's one of the companies that, you know, i remember when kohl's was first making its nationwide push. like when walmart. like when limited was. buy these companies before they go everywhere because once they're everywhere they have very little growth. same thing with target. kohl's is kind of everywhere and you read the numbers. like oh, the stock. i want to go back to what i said about walmart. walmart is a great company. not a great stock. not a great stock because it doesn't have growth. kohl's doesn't have great growth. not a great stock. it's what we buy stocks for is growth. that's why we buy them and we didn't get it. >> that's one of the reasons. >> you can buy for dividend. >> people do. i may very well decide -- >> [ inaudible ] electric. >> you would?

>> kind of. >> or mcdonald's? >> mcdonald's is a good utility. international flavors and fragrances on yesterday. the taste of fries. >> there's the opening bell and the s&p at the top of your screen. down here at the big board, z zendesk, on demand customer service platform celebrating its ipo, ticker zen. we'll talk to the ceo. >> my ticker symbol ever come public that was always going to be my symbol, zen. >> nasdaq, the stuttering association for the young, helping young people who stutter with programs and support. gm, by the way, in the news yet again, initiating a new round of recalls. we're talking 2.7 million vehicles this time. >> yeah. >> involving an array of issues. the brakes included and some other things too. >> my travel trust owns gm. it's been a rocky time. the stock doesn't seem to want to go to -- too low, because it has a good yield.

the yield is protected. i always refer one of the reasons we do that, your interview with kyle bass. kyle bass told truths about gm that says it's not as bad as you think and i'm sticking by that. unless he -- if he changes his mind, like these hedge fund managers change, that would be bad. >> i don't think on this one he is. i have no information to indicate he's nothing but positive and long potential for the company. >> you have these guys on. people should know at home. people you listen to. kyle bass, what's he saying. david tepper. they don't twist it. >> they do their work. >> did want to come to pfizer. following pfizer's attempts to acquire astrazeneca, continued back and forth within the parliament and worth noting there's a letter making the rounds from the science committee to a minister, the chairman of the science committee, sending a letter to the minister of state for

universities and science. >> what? >> yeah, i know. >> but what does it mean? it's about getting more commitments from pfizer that they won't just -- you know, that the five-year commitments to not sort of close and change things, are too short. they want more specific concessi concessions. all going back to pfizer's attempts to try to get this thing done quickly as i've said many times. now we talked a lot about growth. this is nothing to do with growth for pfizer. this has to do with an unsustainable capital structure at pfizer, $40 billion of stranded capital they have overseas, a way to put it to work, and a lot of other things that have little to do with growth. even if you wanted to be generous to astrazeneca about the potential for its pipeline that might get you to a $20 billion valuation. and i am being generous. this is after a decent amount of reporting here. so it's about -- by the way, also unsustainable capital structure they were able to fix

with that deal. the deals are not about growth. >> they're not. that's why in the end they're -- i want to see growth. it's interesting, ge looks like they might be blocked in france. that would actually be a growth platform for ge. they're still trying to get beyond finance. some of the acquisitions are about trying to generate better eps and i think that the market brought that for a while but the market wants little revenue growth and eps and dividend and buyback. >> pfizer is the worst performing dow component of the month. the best performing is cisco, speaking of returning to growth. >> cisco. the comp -- john chambers was on his game. john chambers told you it was no longer cisco's fault. for a while it was like you felt like they lost their way. internet things is doing quite well. customers in the u.s. if you listen to that call, what you say what is tim allergan sa -- tim geithner said last night. united states is so much

stronger to any market in the world, that it's almost like wow, the rest of the world is like deep, deep mire. ge, because boy, the united states is standing out, enterprise, commercial really good, service provider coming back. very strong call. >> historically has had that one bomb he throws in. the enterprise is lumpy or something like that. >> he didn't give us that. really the gross margins are consistent, he did say brazil is down 27. russia down 28. returning to growth, returning to wireless up three. look, the -- some of the gross margins better because set top box, was a tough thing for cisco but the guidance was good, i've got to tell you when he gets it right, i have slammed john very hard and i know that the relationship, i frayed the relationship, and that's not what it's about. it's not about friends. it's about money. this was a good quarter. >> we mentioned pfizer dealing

with government concerns so to speak. you mentioned ge. we should mention france reported to fortify its anti-takeover law so now it may be in a position to actually have to -- they have to get government approval. broadening 2005 law. this is according to reports. so ge stock is up but it is worth noting ge you have these nations getting more and more involved. >> right. it's funny, because we -- our country is again, very much more free market other than the chinese. any foreign company can buy except for china. >> china can't. >> china can't. chinese can't. they've done a couple one third deal joint ventures. >> an abu dhabi port deal -- >> the chinese tend to buy a third of a shale plate. that's how they've snuck in. >> third of a shale. >> in addition to the walmart weakness, urban is down. fbr cuts it to market perform. says the comps will get tougher,

likely to trade sideways. >> the flagship that has done poorly. [ inaudible ] not big enough to move the needle. and anthropology is fine, good home, good story. people worry about home goods because the numbers we're getting in housing starts which are not that good. macy's conference call was downbeat about home. said a little pick-up after, but they were really downbeat about home. millennials are shopping. >> for homes? >> no for little things. i got to go to the mall this week and see what millennials are shopping for. while i fund millennial buying, they are cryptic in the call. little things. what does that mean? >> what does that mean? >> i don't know. >> what's a little thing? >> they're not buying big ticket. >> buy apps. >> they don't like traditional brands. >> they like -- what is little furniture, little people's furniture? i think macy's should flush that out. i'll go to the mall this weekend and check that out.

>> the dow down almost 50 points. mary thompson is down on the floor. >> hey, carl. markets off the lows of the session. a weaker tone as you might expect. the nasdaq closed right at near term support of 4100, down about 3 points again off the lows of early trading as you mentioned, dow off 43. traders talking about walmart's miss and bearish comments from hedge fund manager david tepper saying now is the time to be about -- a bit nervous about the u.s. stock market and looking over the mixed data from around the globe, eurozone growth weaker than expected, japan stronger than expected but taking it with a grain of salt because consumer spending popped up ahead of a tax increase and industrial production numbers from the u.s. are erasing any positive sentiment gained by stronger than expected numbers on jobless claims. the retailers responding to wall mart's, kohl's weaker than expected numbers, both stocks off after the companies missed, dragging down dollar general and gap today. a couple other companies with their results we want to

highlight them. advanced auto parts with strong numbers, helped by a recent acquisition, also forecasting better than expected numbers in the year ahead. alliant technology, stronger than expected result, seller of ammunition and aerospace and defense. the company came in as i said with stronger than expected results but provided a disappointing forecast and you can see it's down 2.8%. agilent technologies coming in with earnings that missed bay penny and its stock is down 10 cents and cainc, the market is not responding. tech is weaker. as i look at the sectors, only group that is higher is utilities. investors taking a bit of a defensive position. traders are watching this rotation that we've been seeing lately to see whether it continues out of financials and into energy stocks. we're keeping watch on the financials because they've been hurt by the flattening yield curve. they are under pressure as well. the dow off 57. carl, back to you. >> mary, thank you very much.

mary thompson. let's get to the bond pits, check in with rick santelli at the cme in chicago. good morning, rick. >> good morning, carl. well at 9:15 earp we saw the buying rev up as we had a very weak industrial production capacity. at the top of the hour at 9:00 we had weak sponsorship of our financial assets in the form of the treasury international capital flows. the net long-term number was over minus 120 billion and i think that really is significant when you consider some of the dynamics going on and once again, belgium probably is a proxy for china with respect to purchases. everybody scratches their heads. to the market we almost within one basis points tested 2.5 percentage you see on the intraday chart. i would normally say, open this chart up to october. okay. . because that's really the last time we were here. i'm not going to do that. i'm going to open it up further back to july of last year.

so getting close to a year. why? because even though we haven't been down here on a closing yield basis in the low 250s since october of last year we haven't settled below 2.5 since july. that is significant and look at how all the spreads match up. mary was talking about a flattening curve, it's a huge dynamic and we've talked about five years, tens and 30s. the twos versus tens particip e participating, goes back to july of last year since the curve has been that flat. tens minus twos. if we continue on this path look at the 30-year, 30-year is also hovering right around the summer of last year. june. since we've been at these yields. it certainly looks as though we're going to be testing 3.30 pretty quick. a lot of buying on the long end. we see flattening on all the spreads continue and the last chart, it's still a dollar/yen correlation with ten-year note yields. why is that? there is this huge risk element

that is reflected not only in the pricing of those two currencies on their relationship but, of course, the relationship that the fixed income credit markets play in a world where it's risk on, risk off, at a time where we're debating risk priced accurately. back to you. >> rick santelli, talk to you soon. thanks so much. when we come back, highlights from last night's big event in the big apple. cramer's one on one with former treasury secretary tim geithner. "squawk on the street" will be right back. so ally bank really has no hidden fees on savings accounts? that's right, no hidden fees. it's just that i'm worried about, you know, "hidden things." ok, why's that? well uhhh... surprise!!!

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when we set up operation in one part of the country, people in other parts go to work. that's not a coincidence. it's one more part of our commitment to america. former treasure secretary tim geithner sat down with cramer in new york city. they talked about geithner's new book "stress test." here are cramer and geithner having their lehman moment. >> most controversial moment the failure of leeman. you wrote the worl still believes we made a conscious

choice to let lehman go. you admit greenspan and former colleagues in the fed believe it could have been resolved. you write i do not believe we could have done it without violating legal constraints placed on the fed and damaging our ability to deal with the terrible challenges still ahead of us. this is like lincoln and habeas corpus. lincoln did not have the right. who was going to come after you? the justice department? they were clueless. >> you know, financial systems and crisis are not like national security. we don't equip our presidents or central banks with standing broad our authority to respond to existential threat because of concerns of moral hazard. >> i kind of like how he wouldn't look you in the eye. >> no, he wouldn't. >> he was like in a med tative pose there. >> you have to do kind of a dance with the secretary because you're not just going to go in and hit him in the first round and the rest of it you get the clicked answers he was famous for. the book, i like the book very much. and the book is i think a very candid -- very candid admission

by the way of what they blew of what they got wrong and got write. it's not like we got this right, also about sacrifice and always with the idea that so many people lost their jobs, far worse than he did. there was -- i dispute i still think he didn't clarify which is that you could do lehman, some people thought you could have done lehman and didn't do lehman. he did make the point saying aig had the definitive assets away from the finance business to make it where it was credit worthy. didn't have any idea what lehman was doing. i say wait a second lehman, dick foal on the board of the new york fed, you were supposed to be regulating. wasn't a tense conversation. there's issues. >> another part which you talked about lloyd blankfein. take a listen to that. >> there's another call where you say to lloyd blankfein who runs goldman, lloyd, you cannot talk to anyone outside your firm or inside your firm you until you get the fear out of your voice. so on the one hand i have been told never to mention goldman sachs never needed the

government's help and a lot of bankers are calling [ inaudible ]. >> anybody who was smart in finance at that point, was scared to death. if you weren't scared to death at that point, you had no idea what was going on. >> yeah. cow being his wife and there's a funny moment in the -- carol. i don't know carol. geithner saying -- all these bankers are on tv saying they didn't need your help. what is -- i'm picking the fun up on saturday and they're on the line trying to speak to you. oh, they don't need help. according to the press. but i know better. kind of -- that's the kind of little thing that geithner does in the book to make the book i think kind of really give you a real feel for how dangerous it really was. and that it was all bra vodsdo. anybody who said they were fine -- >> bravado. >> everybody had to say they're fine because the minute you don't you're done. everybody knew they were close to being done. to his point if you didn't, you

weren't paying attention. >> one of the things he talked about, i said why wasn't there civil unrest. we forget we're scarred as a nation. we've become a different nation since this. we were a nation of savers, not spenders. spend thrift. we're not the way we were before this. i think you're seeing that in the retail sales. like we can sit here and say walmart is not executing right. that's what i said about them. you listen to what geithner said and say yeah, people aren't shopping like they used to. the country is a changed place. buying cars because they have to keep their job. i think geithner was saying the country has changed by this and we may not realize how much it's been changed until many years. >> yeah. look how household credit has evolved. we're not whipping out the credit card the way we used to. we might be leveraging to send our kids to college but that's a different story. >> i grew up in a house where, you know, my grandparents were affected by the depression, my father grew up in the depression and they just didn't do things. they were extravagance was a

sin. you didn't go out to dinner. that's how i knew, you don't go out to dinner. that's a waste of money. going out to dinner, you go out to dinner on mother's day. we went out to dinner, some lousy place, we thought it was big. don't go out to dinner. don't order the soda. don't order the soda because they charge you twice. you didn't spend. >> why am i thinking about olive garden stock or darden. >> i love olive garden. >> it has to do with a way, it's a way of thinking that they had coming out of the depression and geithner is saying our country has got something very similar going again. and maybe that is the olive garden problem. >> maybe. well, it's not necessarily a problem in many ways it may be a good thing taking leverage down. >> right. >> on all fronts. the consumer balance sheet, corporate balance sheet. let's not forget memories have been longer for those in the executive suite in many of our corporations, certainly in finance but even elsewhere as they watch their inability to refinance, a lot of cfos so they

are refinancing like crazy and not willing to take as much risk as they might have been. and lots of cash as we talked about. >> everyone is afraid. that's the takeaway. >> that's abating a lot. >> cautious. >> i like the fact that geithner put it out there saying we're just not -- we're unwilling to admit we just went through the second worst event in our country after the great depression and we all act like it's past but we know better. underneath everybody is fearful. i thought that was the best takeaway of last night. >> we will get stop trading with jim in just a moment. ...and a choice. take 4 advil in a day which is 2 aleve... ...for all day relief. "start your engines" just take a closer look. it works how you want to work. with a fidelity investment professional... or managing your investments on your own.

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now you could have done it twice. this is awkward. check your speed. see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business built for business. all right. about 20 minutes into the session, dow down 90, s&p down more than 12. this is the worst two-day slide for the dow and the s&p in more than a month. go back to april 10th and 11th to see two days worse than this. let's get cramer and stop trading. >> okay. i've got the great -- the next great growth story, already growing a lot, i'm flagging it right now, and it's amazing. vip.com. it's vip shop holdings. this is a company, this is a chinese discount on-line company. you want -- this is what i call growth, david. listen to these numbers. 125% revenue growth, carl, 165%

increase in active customers, 7.4 million up from 2.8 million, 63 cents, looking for 46, increasing growth margins, they have anne klein, l'oreal, sandals apparently hot, dolce and cabana, a line of burberry discounted vip shop holdings. >> revenue growth 120 plus. >> that's what i want walmart to do. of course not possible. but look, this is a company, my friend jim stewart brought this company to my attention when he teaches at columbia and a stock they recommended. stock up 70 straight pointsp not a new revelatory thing. this is what -- this stock is going to become what you hear. you hear this stock mention over and over again. start learning it now. vip shop. this kind of growth is going to be a magnet for growth managers. they will go this way. >> this is one that's owned by john burbank we're going to be talking to. >> you're going to talk to somebody who owns vip shop.

i'm sticking around. >> i thought it was vip shop. >> vip is what they call it. the people in the know. they call it vip. >> got it. >> and just in terms of the opposite of vip, how about a boring stock people are talking about to me that is really going well is bp and rbc goes hold to buy, everybody is rerating bp as opposed to vip, because why? it looks like the litigation problems are winding down, you can get a handle on things, dividend up, good yield, good growth, never sacrifice all its good properties. i like bp very much. >> all that said, getting zendesk to open for trade at post 8. looks like 26% gain at the open. >> that's good. >> dow is down triple digits. how much of the overall weakness do you attribute to tepper today? >> i think people know that tepper is -- he's not joe grandville from the '80s. i think that dave tepper is a guy that has been when the market was really bad, who said

listen people are too negative. when the market is euphoric taking the other side of the trade. i want to know more. i want to know more category, what this man says about vip shop. the sears canada fella? >> no. john burbank who runs passport capital coming from the salt conference in the 10:00 hour. >> i think it was -- >> that was a great sequel. >> like beganty 2. >> what's on tonight? >> dex com. someone will come on and say what do you think of dex com. i will say i think they should come on. a medical health device company and like many of those companies the stock has been a straight line down. find out if that's real or not. i want to speak to tepper right now. >> yeah. a lot of people would like to. >> tepper right now and bump into him at the mall. >> get him line one tepper. >> we will see you tonight, jim. >> thank you. >> when we come back, a double dose of breaking news on the economy.

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data from not only philadelphia, that's real-time data for may, but national association of home builders index. i want to point out that we are dabbling now with yields that have traded briefly under 2.5%, 2.49, having closed under 2.5% since july of last year and the correlation with weak equities becoming apparent to all. all right. philadelphia, 15.4. that's actually pretty close to expectations. and 45, 45 is the home builders index. 45 is the lowest level. wow. this is going to actually go back quite a ways. we haven't seen a 45 or lower number since may of 2013. so basically we'll call it exactly one year. and in the interim period, this is why housing is so important right now, is it slips a bit. we had a high of 58 in august of last year and really, that was the high water mark and we've seen a lot of the metrics sliding ever since.

back to you. >> all right. rick, thank you very much for that. obviously we'll keep a close eye on that ten-year, right around 2.50. it has been a mix of data. empire came in well above expectations. philly in line as rick told you. the home builder number weak, but jobless claims, below 300k, seven-year low. >> inflation numbers ticked up, not worrisome. higher consumer prices. you got a gain 0.3%. you want to see that as the economy starts to heal and pull out of recession. the biggest economic indicator maybe walmart u.s. sales, were impacted by the weather but the fifth consecutive quarterly sales decline in the united states. >> i think cutting through that for many people will be tepper's comments overnight. as far as he's concerned the market is okay but getting more dangerous and he's nervous of where we are at the moment. when you have somebody as well remun rated, successful in the markets saying that, a lot of people are focusing on it. >> you have old-line tech doing well. oracle, cisco.

>> how about going public, a cloud company in this market. >> we do want to take you to lower manhattan where the 9/11 memorial museum dedication ceremony is just beginning. our bob pisani is there live with more. good morning, bob. >> good morning, carl. and the ceremony has begun. mayor mike bloomberg, former mayor bloomberg, now the chairman of the museum is opening the discussions here. president obama will be speaking in a few moment, scheduled in seven or eight minutes, followed by survivor members and family members will be speaking as well. of course there will be government officials here as well. former mayor rudy giuliani, the mayor at the time, will be speaking, andrew cuomo, chris christie, bill de blasio, the current mayor, all going to be speaking as well. the museum was many, many years in the making and there's been a lot of controversy about what should be included not included. includes many iconic objects including the metal cross,

battered fire truck will be there, survivor stairs used by thousands of people fleeing the towers as just before they collapsed will be there as well. of course thousands of photographs. this museum is going to be opening today and it's the museum part that's open today, will be open six days exclusively to family members and to the first responders only. then it will open to the general public next week here. the memorial part of this, the other part of the museum, and the memorial, already has opened. i was there yesterday and one of the most moving things is to be able to go up to it, type in the name of a relative or a friend or just somebody you knew, into the kiosk, get the photograph up, and then go over to one of the two reflecting pools and find the name of that person etched into the reflecting pool on the side of that reflecting pool. it's simple, it's very effective and for those of us like me who was here on that terrible day it's very, very moving. there were thousands of people here yesterday doing exaxially

that. -- exactly that. i think the museum will be just as successful. back to you. >> thank you very much, bob. we should note when the president speaks in six or seven minutes time, at the memorial, we will bring it to you live. in the meantime one of the most closely watched hedge fund managers david tepper triggering an awful lot of buzz this morning. the billionaire says he's nervous about the markets and that it's getting, as he puts it, dangerous. kate kelly live in las vegas wu the details on that. we were saying it's rare that a single voice is heard above the hubbub but david tepper has done it again. >> if there's going to be that voice tepper is a candidate that can do that. part of the reason is that he's been unflaggingly optimistic in recent years. he was one of the major money managers to embrace the idea of the bernanke put or in other words, the quantitative easing was going to float markets higher for a period of years and he made literally billions on that, $3.5 billion personally, just last year with his $20

billion in assets at ap loose sa. to bring you back to what he said yesterday really electrifying a group of several thousand the las vegas hedge fund conference salt, saying we've moved our position around different times. now i have my position such that i'm low enough in exposure that i can bring it up or i can take it back down. i'm nervous, i think it's nervous time. very galvanizing words. he got into detail about what specifically is making him nervous. he talked about central banks in china, the ecb as well, policy too tight in ecb especially. looking for an easing event in june. he thinks it might be overdue. it needs to happen now or risk being ineffective. he thinks u.s. growth has been too slow. he thinks there's a risk of falling into deflation, much more so than inflation, and he thinks in general too much leverage in the system. speaking of sort of earnings and the stock market climate in the u.s., he said growth is slower. you're going to have lower profits. there's a mixed environment going on here. so that brings him to sort of

his final takeaway for people which is to say, i'm not saying go short, but just don't be too freakin' long. in other words, simon and guys, he wants people to be very measured. he thinks they should be hedged, he's not bearish but he's keeping some of his money in cash and recommends that other investors do that too. >> all right. well i guess if you've had a track record like his, investors will take note. kate kelly thanks for bringing those comments certainly having an impact today in the markets. the other big story having an impact, walmart in the red as it reports sales and profit below estimates. blaming the weather. you have to wonder, i mean, clearly walmart is the biggest retailer, guys. so clearly it is a barometer and it gets impacted by the weather but u.s. traffic has been down for the last six quarters for the last five quarters it has missed or it has actually seen declines on u.s. sales. >> you do wonder if there's something bigger in walmart. retail sales didn't grow in

april. that's -- the column of the financial times pointing to the retailer index trailing 21 of the 31 deponents of it are in -- components are in negative territory for the year. something going on, a bigger dynamic than that individual. >> there is a strategy here. walmart has been investing in e-commerce, put neil ash, and has seen double digit growth in that business. can they pivot quickly enough. they've been focusing more on their smaller stores instead of the super centers they've been seeing growth. >> let's fit in a break because we need to hear from the president in a few moments from the 9/11 museum. we are live also from the salt conference in vegas ahead of the show. find out what passport capital's john burbank thinks is the biggest risk facing investors now. we'll be right back.

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get four years interest-free financing on the entire tempur-pedic cloud collection, even a queen size sealy gel memory foam mattress for just $497. the memorial day sale is ending soon. we take you to lower manhattan where former new york city mayor mike bloomberg speaking at the dedication of the national september 11th memorial and museum happening today alongside him, former mayor rudy giuliani. the president will speak in a moment. families of victims of that terrible day, rescuers, this is all going to kick off a six-day preview period during which the doors will be open essentially for 24 hours a day to accommodate all the families, all the first responders and the survivors of the tragedy and on may 21st will open to the public. you can make your reservations on-line. general admission about $24. it's been said to be an amazing

experience that gives you a real sense of scale as to just how large a disaster -- >> wand that managed to keep from it. the museum holds 10,000 artifacts, includes about 2,000 oral histories. >> very much about -- i read from the -- what they've written about it. the personal experience of individuals trying to walk that fine line between exploring the memories and not really seeking to relive it. >> and pay tribute to the six people killed in the world trade center bombing of 1993. >> here is the president of the united states. >> thank you. mayor bloomberg, governor cuomo, honored guests, families of the fallen, in those awful moments

after the south tower was hit, some huddled in the wreckage of the 78th floor. the fires were spreading, the air was filled with smoke, it was dark and they could barely see. it seemed as if there was no way out. and then there came a voice, clear, calm, saying he had found the stairs. a young man in his 20s, strong, emerged from the smoke and over his nose and mouth, he wore a red handkerchief. he called for fire extinct wishers to fight back the

flames. he tended to the wounded. he led those survivors down the stairs to safety. and carried a woman on his shoulders. and then he went back, back up all those flights, then back down again, bringing more wounded to safety. until that moment when the tower fell. they didn't know his name. they didn't know where he came from. but they knew their lives had been saved by the man in the red bandana. again, mayor bloomberg, distinguished guests, mayor de blasio, governors christie and cuomo, and the families and survivors of that day, to all

those who responded with such courage, on behalf of michele and myself and the american people, it is an honor for us to join if your memories. to recall and to reflect, but above all, to reaffirm the true spirit of 9/11. love. compassion. sacrifice. and to enshrine it forever in the heart of our nation. michele and i just had the opportunity to join with others on a visit with some of the survivors and families, men and women who inspire us all, and we had a chance to visit some of the exhibits. and i think all who come here will find it to be a profound

and moving experience. i want to express our deep gratitude to everybody who was involved in the great undertaking, for bringing us to this day, for giving us this sacred place of healing and of hope. here at this memorial, at this museum, we come together, we stand in the footprints of two towers, graced by the rush of eternal waters. we look into the faces of nearly 3,000 innocent souls, men and women and children of every race, every creed, from every corner of the world, an we can touch their names and hear their

voices and glimpse the small items that speak to the beauty of their lives, the wedding ring, a dusty helmet, a shining badge, here, we tell their story so that generations yet unborn will never forget. of co-workers who led others to safety, of passengers who stormed the cockpit, our men and women in uniform who rushed into an inferno, our first responders who charged up those stairs, a generation of service members, our 9/11 generation, who have served with honor in more than a decade of war, a nation that stands tall and united, and

unafraid because no act of terror can match the strength or the character of our country. like the great wall and bedrock that embraces today, nothing can ever break us. nothing can change who we are as americans. on that september morning, allison crather lost her son wells. months later she was reading the newspaper, an article about those final minutes in the towers, survivors recounted how a young man wearing a red handkerchief had led them to

safety. and in that moment, allison knew. ever since he was a boy, her son had always carried a red handkerchief. her son wells was the man in the red bandana. wells was just 24 years old with a broad smile and a bright future. he worked in the south tower on the 104th floor. he had a big laugh, a joy of life, and dreams of seeing the world. he worked in finance, but he had also been a volunteer firefighter and after the planes hit, he put on that bandana and spent his final moments saving others. three years ago this month,

after our s.e.a.l.s made sure that justice was done, i came to ground zero and among the families here that day was allison crather and she told me about wells and his fearless spirit and showed me a handkerchief like the one he wore that morning. and today as we saw on our tour, one of his red handkerchiefs is on display in this museum and from this day forward, all those who come here, will have a chance to know the sacrifice of a young man, who like so many, gave his life so others might live. those we lost, live on in us. in the families who love them still. in the friends who remember them

always. and in a nation that will honor them now and forever. and today it is my honor to introduce two women forever bound by that day, united in their determination to keep alive the true spirit of 9/11, his mother alice and one of those he saved, ling young. [ applause ] >> that is the president at the dedication of the national september 11th memorial and museum. we'll take a break and we'll be back in just a moment. today is thursday

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welcome back. our next guest thinks poor liquidity in the equity markets remains the most misunderstood facing investors. he joins us now from the salt conference in las vegas. sorry i'm not there to see you in person. i would love to start off with the idea you introduced which is

that poor liquidity in the equity markets is not understood and a big risk. why do you think that's the case? >> declining over a number of years and part of it is high frequency trading, part of it is uncertainties, also more passive investing than active investing. it's not just liquidity, it's positioning and crowding. and we started to see the effects negatively since the end of february with growth stocks trading off far more than value stocks and small cap stocks underperforming large cap stocks. i think liquidity isn't an issue when things are going up. when they're going down you want to get out. it starts becoming one. i think people, when it's different than it was in the past, people are surprised. so we've been tracking this for quite some time, have made us more cautious, and put us in a curious position of being fully invested on the merits of the opportunities and companies that

were -- we like, but fully hedged because we see liquidity and crowding and misunderstanding of this a requirement in this market. >> i mean, obviously with the violent rotation we had out of high multiple to growth stocks to perhaps more value names, you might expect there would be a rush for the exits. that's typical, isn't it, when we see that. it's not -- is there something specific to this time period that makes it different in terms of your ability to exit some of these positions quickly? >> last year was the opposite, right. last year heavily shorted stocks outperformed good stocks, market did well, small caps did incredibly well. the trend has been since the crisis bottom has been up. so that it's going the other direction is a surprise. it's not because of economic growth exactly as we think it's going to get better, hasn't been terrific, earnings growth has been okay, company governance

and how they're doing their business is very, very good, so, you know, it's possible to have a bear market here, not because of problems with the economy and not because of quality of earnings, but really just because of crowding, positioning in liquidity. i think something like 2011 could play out again, but not for the same reasons. so we haven't had a real sell-off in two years and that sell-off was cut short by the ecb, you know, promising to do something if required. so i think, you know, two years is a long time in markets like this. and when things turn they turn and people are caught short. >> john, we have limited time, unfortunately, this morning but given what you just said, i am curious to get your reaction to what mr. tepper said, i believe it was yesterday, do you tend to agree with his assessment of the equity markets at this point? >> well, it is a much tougher market. anything that resembles a bear market is a tougher market.

that's why i said it's a -- it's tough because there are a lot of things we like and it's tough because we feel we have to hedge them fully. i think we're going to have some pretty interesting values if this plays out the way we think, because a lot of the secular trends to be invested in are going to be going on for a m in of years which we like a lot. but he has been one of the most bullish people in new york since '09. it is worth while to listen to what he says. >> finally, john, we were talking about a name earlier that is one of your largest holdings so i would like to quickly get to that. it's a number the chinese companies that you own, vip shop holdings, or vip, why do you own this thing and why do you feel these stocks perhaps relative to u.s. internet commerce plays are undervalued? >> well, alibaba is not the only chinese e-commerce play. vip shops has been public since like 2011. it's done spectacularly well.

as we've held it the more it's gone up the more investors have thought it's been overvalued. it's not. our numbers have earnings about 60% above wall street consensus. i think the surprise in china, chi na's e-commerce market is bigger than the united states and china's economy will be bigger than the united states quite soon. in american terms, we underrate china and the effects of various things like we did commodities in the 2000s and their economy and now i think we're underrating the internet, the consumer trends because, you know, they're not competing against the entrenched competition that the u.s. did. the biggest chinese retailer is 1/20 of the size of market cap of walmart. e-commerce companies can be profitable and grow very, very nast china which is -- fast in china. we like vip shops quite a bit, one of our biggest positions and we have to hedge it fully being in this market. >> john, i'm afraid we're tight on time given a number of things. look forward to speaking in the near future about this subject

and others. thank you for joining us. john burbank joining us from the salt conference. >> okay. >> let me send it down to simon on the floor. >> this is a very important morning for a number of reasons. amidst a rough open, zendesk has rallied strongly on its big board debut. it was priced in the middle of the range at $9 a change. it's trading as you can see well over 12. it is the first ipo from anyone in silicon valley one month. it was always going to be scrutinized closely, particularly for those operating within the cloud. i'm joined by mikkel svane, the ceo of zendesk. good morning. >> a lot will know the moto but may not be clear about what you do. what do you do? >> so zendesk is next generation customer service platform. we power a fundamental shift in how we consumers want to interact with the organizations

that we do business with. >> okay. cloud based company, clearly. what's happening with your twitter and the feedback from customers? >> we take all the interaction and make it easy for organizations to process that and come back to customers in a timely fashion, open transparent way, to build the platform for a good relationship between customers and the organization. >> this has been a rough time for ipos. a number of ipos have been canceled. a lot of the tech names have been under a lot of pricing pressure. what went on behind the scenes that you decided to forge ahead and be the first to market in a month? >> i think we have been very determined on going public and becoming a public company for a very long time and we want to define a new generation of business software. we have an immense opportunity ahead of us in defining that new generation of business software and powering that shift and how organizations with their customers to do that and come out on the other side as a winner. we wanted to become a public

company. that's what we expect and what our customers expect from us. >> talk me through the pricing. did you price deliberately conservatively. were they talking about 10 or 11 bucks a share and no ram it down to 9 and get through this thing? >> the market has priced us. we're satisfied about where we are. >> and what are your plans? i think your stake is worth $60 million by my rough calculations? what's the plan. >> of course i'm going to hang on to that. first and foremost, going to spend time with my family, that's what i need. >> in denmark? >> they're all here in san francisco. >> the company did start in denmark. >> that's true. >> mikkel, nice to meet you. >> thank you so much on your ipo. mikkel svane, the ceo of zendesk. over to jackie deangelis and catch up with the breaking news at the new york mer. >> we're watching natural gas trading a little higher after the department of energy came out with its weekly storage report. what's interesting here is the number came in at an injection of 105 billion cubic feet. this was more storage than most

traders and plats were expecting. prices were lower ahead of this report but now higher and traders are telling me because we've seen a bearish pattern in the past few days and weeksp. this trade is bound to pop up a little bit. as i said over the last few weeks this trade technically broke down. we broke through 450, we got down to 435. right now prices are around 4.45. traders are saying if we continue to see more build over the next couple of weeks, during this catch-up period, we could see $4 nat gas again. so all eyes will be on that. sara, back to you. >> yep. and 2%. thanks very much. david tepper says investors should be cautious, nervous i think the word he used right now. what is the one and only, mr. art cashin think about those comments? joining us live on set when we come back.

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that corporate trial by fire when every slacker gets his due. and yet, there's someone around the office who hasn't had a performance review in a while. someone whose poor performance

is slowing down the entire organization. i'm looking at you phone company dsl. check your speed. see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business built for business. some big news going to break on tech. the fcc is discussing the proposal for open internet at its meeting right now. they'll vote on that proposal a little bit later on. hampton pearson live in washington for more on that. >> hey, simon. it's been a long time since we've had this kind of a turnout for an fcc meeting, both outside and inside but for internet junkies today is a call to arms if you will for the better part of the last hour upwards of 100 demonstrators calling on the fcc to do nothing less than, quote, save the internet. that's because we are expecting a new proposal crafted by fcc

chairman tom wheeler on net neutrality, the idea that web traffic should be treated equally. it's believed there will be language in that proposal with assurances that companies won't be able to segregate internet traffic, essentially into fast and slow lanes. now since this is a draft proposal, again on net neutrality, the other thing the fcc we're told might seek public comment on, the idea of declaring broadband internet service to be a public utility. subject to a much tighter regulation and viewed by some as a so-called nuclear option if you will. also, further down on the agenda today, but an item of important interest to wireless carriers and cup assumers, are the -- consumers, are the ground rules for the next spectrum auction that takes place in 2015, should some of the most sought after spectrum, the low band, be set aside for smaller competitors like sprint and t-mobile, otherwise they might just get outbid by industry giants like

verizon and at&t. it's all about what's next for net neutrality at the top of the agenda today. carl? no all right. thank you very much. hampton pearson. markets taking a slide here. second day in a row. worst couple case in about a month. dow down triple digits. russell in correction territory. ap loose sa's david tepper said now is the time for investors to approach with caution. art cashin on set, director of floor operations, with ubs financial services. >> thank you for having me. >> as you say did fed's failure to taper the taper turn tepper trep day shus? >> it certainly may have. >> how did you do that? >> the tepper corollary for years. do you give his comments last night equal weight? >> i think they're probably a factor in today's markets but if you look at what's happening with the ten-year, that certainly is not tepper related. there's a scramble for yield all around the globe, so i think the fear of deflation has got a lot

of people worried. p certainly mr. tepper is well respected and one of the originators of the bernanke put, is there. he's turning cautious, i think that merits everyone's attention. >> volumes this week have been among the lightest of the year. how should we read that? >> ordinarily, you like to see volume as a confirmation, the old saying is volume is validity down here, but that's not always true. i mean, a ship can sink in a quiet sea. that probably is a bit more ominous. if we would continue going down as we have, in light volume, because it becomes evident that it's not really heavy selling then. you're hitting an air pocket, a vacuum, that things are falling into. and certainly this morning we got a little taste of that. again, the nasdaq and the russell are leading on the downside and that's what the viewers should watch. >> and watching the ten-year, you mentioned, this has been an

unbelievable thing to watch these yields break. 2.5%. you mentioned fears of deflation. what's the link with equities, go into stocks that a pay dividends, higher yields than the ten-year yield. >> you're seeing some of that. the utilities came back into favor a little bit yesterday and you'll see a little bit more of it. that's a rather short-term solution, you know. i think people are going to start to look elsewhere and donation nary pressures spread there's a much bigger picture to look at here. >> let me raise europe. certain parts of the european markets are subject to very heavy selling at the moment. some of the markets down 3%. a lot of the banks are getting battered. there is a reporting that the greeks may be trying to put a capital gains tax on foreigners who own greek debt and have made a lot of money. where does greece figure -- sorry, what where does europe figure in your calculations here in this country? >> well, i think they also are a

factor. the market is reacting not to any one single thing. the fear is europe is going to become a summer problem again, are growing. i think that comes from the fact that mr. draghi has gotten away with a silver dung atongue and much more. he has talked the markets to where they want to be. a belief by me and several others on the floor, that they cannot do a quantitative easing over there. >> they don't have the mechanism. >> that's right. >> and secondly, they say well maybe they'll start charging for excess reserves. they don't have a lot of excess reserves over there. he doesn't have a great many options. so it's going to be very interesting to see what he can pull off. >> art, you talk about this rush to yield. what yield? i mean there is no yield. so why aren't people buying stocks for yield if they want that, why in the world would anybody buy the ten-year at 2.5 with a plus 2.5% gdp why would

anybody buy the spanish or italian -- >> it could be central banks buying too. >> having been in this business over 50 years, these don't look like attractive yields to me. historically. but there is a scramble and we still have underfunded pensions and they are desperate. they've tried buying into the stock market. they're not getting a 7.5% rate of return. had a great year last year. >> they did. >> and they haven't this year. they're taking money away from hedge funds. they're looking for relative safety and unfortunately they're looking for relative performance. and that's sometimes the way to the poor house. for now that's what they're doing. >> finally, do you think all of this is just taper behavior and we'll see this all the way into september? >> i think it could be a factor and i think you're going to see how much debate comes up at the next fed meeting. because there is a belief that once we got down to 45 billion, we basically cut it in half. in the past when they stopped

qe, they stopped. and we got an instant reaction. this time they tapered instead of stopping, so we kind of eased into it and people are beginning to believe that you're having these kind of reactions because you're at a critical mass here. >> we'll see you later. >> thank you very much. >> straight ahead, it's been a bad week so far for retailers. walmart, kohl's, sears, seeing big declines. how could these companies get back on track? the former chairman and ceo of sears canada after the break. anything worth pursuing requires precision and attention to detail. it takes knowledge, hard work and a plan. at baird, we approach your wealth management strategy that same way. as an employee owned firm we have the freedom and resources to create customized financial plans built to last, from generation to generation. we'll listen. we'll talk. we'll plan. baird.

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a slew of retailers out with earnings today. there the stocks we're including, walmart, kohl's which both missed estimates, jc penney and nordstrom report results after the close as sears says it's considering selling its sears canada stake. mark cohen joins us, former ceo of sears canada and former cmo and president of soft lines at sears roebuck and company and professor of marketing at

columbia university. been in the business for more than 30 years. it's great to see you again, mark. >> good seeing you. >> what is sears canada worth, if they were to sell it and spin it off? >> he's not going to be able to sell it. he's invariably going to hive it off as he did with lands end, with orchard hardware, as he did with his home stores in the u.s., which is a way of monetizing another asset of the enterprise. >> which is his strategy right now? >> which is his strategy and i think it's the strategy that will result in the demise of the brand at some point. >> just particularly on sears canada, since you have such great insight into it, what is its value? what kind of shape is it? >> it's in terrible shape. it's only able to remain viable at the moment as a result of asset sales. they've sold off almost a dozen of their most valuable stores for a significant amount of cash. they still have some very valuable properties yet to go,

but the business has declined, the margins have declined. they can't cut expenses fast enough to offset the damage that's been done. >> we want to ask about some of the other retailers as well, but just on the sears point broadly what is the future of sears if they will spin off all of the assets? what's left? back to the roots catalog, on-line focus perhaps? >> there is no future. i don't think the lights go out in the immediate time frame, but this is a -- this is a slippery slope that's got no alternative. >> that may be hundreds of suppliers to sears watching you now. what will their experience be like, particularly those, of course, that typically would borrow off third parties to fund the manufacture of goods for sears, presumably the cost of that funding is going to escalate quite rapidly? what would the bottlenecks be from your experience, 35 years in the business? >> the good news is there's no lack of customers. the bad news is, these channels

are in transition and some of them are actually going to disappear. so for manufacturers intent on remaining viable, the answer is find alternative channels to reach your customer. >> are there many of those alternative channels? even when we look at what macy's was doing with its margin it clearly is squeezing the suppliers hard as well? >> for the manufacturers i do consulting with, i have one very, very simple word of advice which is establish or one phrase of advice which is establish a direct relationship with your customer. your business on your own website, control your own destiny. don't rely on traditional wholesale channels because they're almost gone. >> i want to ask about walmart. after the results today, clearly weather was a major factor for all of these retailers. does walmart have a strategy to deal with decreased customer traffic? >> walmart is an analog for the economy at large. i think that's been said widely and i think it's true.

this first quarter had to be tough because it followed a tough holiday season that's almost always the case. weather was more disruptive than its typically been. at the end of the day the disappointment i would. >> walmart's results is their decision or inability to control their expenses and margins. given that they must have known their sales would be tough in this last quarter. >> but in general, they've been investing a lot on the e-commerce business. as i mentioned earlier, focusing on the smaller walmarts instead of the super centers. can they compete viebly on-line with amazon? >> they have to find a way. they're already doing a substantial amount of business, although relative to amazon it's demin muss, but they have to find an alternative to their traditional brick and mortar strategy because customers are

shopping less often. >> there was a big out performance from a lot of the retailers, 2012, 2013, now the majority of the retail index is in negative territory for the year. did we bring the gains forward into those years as investors other bring the gains forward, or is there something more profound happening? >> no, i think there's something more profound, and it's called the internet. there's an enormous paradigm shift going on. >> online sales are still a small proportion of online sales, aren't they? >> they're a small proportion but growing more rapidly -- >> and hit margin, presumably? >> and the shift to the internet changes the margin formula. >> they're also dealing with pressures on the low end -- low-income consumer, as well, on a more macro level. we should mention. >> the low-end consumer, in many respects, has not come out of the recession. >> all right, mark, always good to see you. valuable perspective on the retail business. columbia university, former ceo of sears-canada. coming up on the program,

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keaep your eyes on the market. we're down 145. and after all the news points -- tepper, walmart, claims, cpi, empire in philly, that's what we're left with now. the s&p, the only index of the majors positive for the year. let's get to dominic chu for a "market flash." >> so even more of a downside move for nq mobile stock. it's plummeting after the chinese internet company services said it needed more time to release its report. you can see the stock is trading down about 28% in today's trade. if you recall, back in october of last year, short-selling research firm muddy waters slammed this company calling it a fraud. the stock had rebounded, but it's still taking a large hit, sarah, in today's trade. >> i remember. carson black wrote up the whole report on it. dom chu, thank you. still ahead on the show, want to know where the whole throwback thursday trend came from? it turns out we've got the

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declines getting deeper right now. the dow is now down almost a full percent. the s&p 500 is down a full percent, and the nasdaq is down even more. the russell, simon, correction territory, down more than 2%. >> i thought -- i thought the most interesting question of the day, actually ultimately, for all of the news flow, came from carl when he turned to art cashin at the end of the interview and he said, do you think this is about the tapering of qe? and a lot of people were concerned in the second half of the year, the pullback from the fed would affect the markets. it may be we're beginning to pull that volatility into where we're trading right now before we get to the second half. >> it is a completely different dynamic. >> do you want to mention the yields on the 10 year? >> it's very important. going below 2.5%. i think people are scratching their heads to figure out why. 2.48. art cashin talking about fears of deflation, talking about flows into the bond market on the uncertain environment, it's something you have to be watching today. >> i think we need another hour of "squawk on the street" to sort this out. carl, take it away. >> you're going to get another

hour, and another hour after that. we'll do hours all day. thanks, guys. if you're just joining us this morning, here's what you missed earlier on. ♪ >> announcer: welcome to "squawk on the street." here's what's happened so far. >> i like companies being in the playoffs. that's good. in other words, you're happy with a .500 team, a second-division team. >> i have to be. i'm a mets fan, okay? yes, i have to be. >> so it's better than it used to be, that's all you need. okay. [ bell sounds ] >> there's the opening bell. >> i think liquidity, you know, isn't an issue when things are going up. when they're going down, you want to get out, and it starts becoming one. for people, when it's different than it was in the past, people are surprised. >> we think we have an immense opportunity ahead of us in defining that new generation of business software and empowering that shift with the customers to do that and come out on the other side as a winner. we wanted to become a public company.

welcome back to a tough thursday morning for the markets, at least. the dow is down 148, once again in the red for the year. the s&p is the only one of those hanging onto a green arrow for the year, at least, so far. we're down 18 points. nasdaq is down some 44 points. interestingly, of all the dow components, guys, walmart, which had a bad miss this morning, is not taking the most points away. it's goldman and visa which might tell you about the dow's construction, but also about how investors are feeling about the economy at large. >> and the yield curve, too. when you see a move, watching 2.46 for the next level, that it could hold or see any sort of support right there. but, of course, that will hurt banks like goldman, credit card companies like visa, that have these very heavy interest-rate-based businesses. these are companies that are really going to see some fallout on their bottom line if yields

stay this low when investors hoped they would pick up. >> 2.48 takes you back to last october. that's despite ppi that ran hot yesterday and a cpi year over year that ran hot today. tech is a big part of sell-off. sheila has more from the nasdaq. >> hey there, carl. tech is certainly a big part of it. we're seeing the nasdaq lead the losses in the market, both the nasdaq composite and the 100, right now down more than 1%. in fact, if you look at the nasdaq 100, only 4 out of the 100 stocks are in the green. cisco being one of the big winners after its earnings. as for the why, i've been calling traders all morning asking for their take. two things everybody is talking about. first of all, a breakout failure if we can't hold the technical levels on the nasdaq, so we keep on slipping below them. remember, we'd been in a technical downtrend. and number two, the tepper effect. everybody says, this is a guy that's well respected. if he's bes cautious, traders will take caution, too. >> all right, sheila, thank you

very much. joining us, lance from mashable and our own jon fortt. a lot of tech news today. cisco is a big gainer, the best on the s&p. they beat estimates on the top and bottom line. john chambers' forecast sending stock higher. and despite a continued decline in sales, jon, being pleased with the progress, revenue up 10, and as you tweeted earlier dragging over old-line tech names with it. >> yeah, to put it in contech, though, this is the range, 24 to $27, where cisco has tended to be over the last ten years, so it's getting back into that zone. it had big sell-offs after its august and november reports last year. now it's kind of gone back to that level before the november sell-off. but i'm also looking at oracle in all of this, because oracle is right about at 52-week highs. it hit today. it's about 10% away from all-time highs back from 2000,

and the difference between cisco and oracle, oracle has been extra aggressive about things like acquisition -- remember peoplesoft back in the day, sun microsystems -- it's been key and brought them a different outcome than ciscos, other names that tended to get distracted, or have acquisitions that weren't transformulative enough. >> for the past couple of years, it's been focused abroad. chambers has focused on the tax structure. when you look at orders in the u.s., they're up 7%, and in the emerging markets, down 7%. i'm wondering if you think this strategy is panning out or if you think they'll have to rethink that? >> they're doing some investing and hiring overseas. i was talking to rob lloyd, the head of operations a couple of weeks ago, talking about the amount of investment they're doing there versus here. what they're able to do there, investment-wise, hiring-wise, has benefit for stuff they're selling in the u.s. it's not that when they make investment overseas that's just meant to power growth overseas. it's meant for product, they end

up selling here. and here is where the money is being made. >> lance, your take on this, they had a rough year last year, laid off thousands. are they back? >> cisco is refocusing on the enterprise, as opposed to the dalian ces they did. they did stuff that was either bad strategy, poorly received and confused main customers. they pulled that away. they're still doing the routers and things like that. they're not doing things that are off-message. and i think that's really smart for their future. >> how would you grade chambers as a barometer for up enterprise strength? we talk about lumpy for months. >> he's a charismatic guy. and i think he can sort of lead the charge on sort of the idea of what enterprise is supposed to do. but he's also the guy who's in charge when they made big missteps. it's not so much what he says but what he does.

>> i think he's still a good barometer. here's where i see the good news. it's for enterprise tech companies with disruptive models. the smaller guys who start off here and maybe a little in europe, that's where their strength is before they expand into emerging markets. that's where the growth is now. that's where customers are more willing to take risks on newer technologies, as well, so the f-5s, others like that, i think there's a lot of good news for them in this report. >> the street.com saying the only reason the stock is up 8% is because the expectations were pathetically low. >> that's what i'm saying, the august, november quarterly reports, where the stock took big legs down. we're back to where we tend to be with cisco. it doesn't mean some big comeback run. >> other big news, the government announcing new rules on the internet fast lane. a contentious issue. it would allow broadband issues to sell faster speeds to top-paying customers. they're hoping to complete the

final rules by the end of the year. lance, tom wheeler has his work cut out for him. protest evefsters outside the d. mail flooding the offices. >> they think this is the beginning of the end with the internet. if people with deep pocket can have better access, and start-ups can't do that, we're seeing that already. netflix has been vocal, because they paid comcast for a direction connection to their customers and they offered some really faint praise for comcast saying they support weak net neutrality, and they hope that they support strong net neutrality. so without rules in place, it is the wild west, and it's kind of a scary time. but it's hard to come up with the right language that's going to satisfy everybody. you know, when you talk about commercially reasonable, which was some of the language that appeared in february, it freaked everybody out, because that sounds like it's good for business, but bad for people. >> but that's language that's already existed. it's actually borrowed from

wireless roaming agreements. so they must have thought, okay, well, this has worked in another sector, so maybe we'll just apply it to this one. jon, when you think about the differences between wireless roaming and paying for internet access, and stronger content feeds, what's the difference here? >> here are a couple of fundamental issues i have with this. net neutrality does not apply to wireless data, an that's what so many people are using these days, right? the fundamental problem also is that people just don't trust the cable company. disclosure, of course, owned by comcast. >> shh! >> the reputation is so terrible, people think cable companies are greedy, they're overcharging, providing minimum service. on its face, people should be against net neutrality, because it's like amazon prime, right? but the big company pays to deliver stuff faster. people don't trust the cable company to deliver the data that -- [ overlapping speakers ] >> you know who they trust even less? they trust the government less. they trust the government less to do the right thing. that's the big problem. they're panicked that the fcc does not have -- the government

doesn't have their best interests at heart. and i don't think that that's really the case. i think there's just a lot of confusion and worry, and one of the problems with the fcc's approach in general is they tend to act after the fact. and even with rules in place, that's probably what they'll keep doing is we'll see bad stuff, and then they'll go, oh, we read about it on a blog, we saw it in a newspaper, which are words wheeler used, now let's act. >> if you think about it, how would you feel if the government said, we won't let amazon pay to deliver that package to you faster? people would say, that's a terrible idea. the reputational issues, marketing challenges the anti-net neutrality crowd has. but on a free market basis, of course you'd want companies to pay more to deliver stuff faster. that's what google has done with the data centers -- >> they have billions. that's the problem. these companies have billions and the start-ups have dollars. you know, if somebody wants to reach all -- the thing about the internet is that few can reach the same numbers of people as

netflix, but the big question is, what sort of financial backing, what money do you have to do that? >> but have good engineering, right? write the code so you can deliver your content to people quickly enough. somehow, amazon managed to become amazon over dialup. if you don't have good code that delivering content quickly, you're in the hole anyway. google. they've had an advantage as if it were operating under nonnet neutrality for years. so, you know -- >> this has divided party lines, lance. i know we have to go. any handicap of the chance you think this doesn't pass, that it actually getting struck down in today's debate? >> you know, this is the beginning of a conversation. so we don't know what's going to happen. there will be something for a while until that gets thrown out. >> we'll see. all right, jon fortt, we'll see you later this hour. lance, thanks so much for joining us. we want to stay in tech, though. we're turning the dashboard into an apple interface, that's just become a reality.

josh lipton is in the valley with a test drive. josh? >> yeah, kayla, for the tech titans, the next big battle isn't your home or your office, it's in your car. and in that fight, apple is making news today. pioneer electronics will soon start selling five radios that are compatible with apple's car play. the technology allows consumers, remember, to use their iphones in their cars to make calls, use maps, listen to music, and access messages with their voice or touch. the pioneer radios are going to sell for between $700 and $1,400. and retailers like best buy, i'm in here, in march, apple had announced it was partnering with a range of carmakers from mercedes to toyotas, but now you'll have to buy a new car, you can upgrade the car you already own with pioneer's technology. >> there's still a lot of consumers that don't want to go out and make a new investment in a vehicle. but they have iphones and they

want to use those in the vehicles. so now, giving them a choice to be able to upgrade the radio that's in their car to one of these new pioneer units and get apple car play compatibility -- >> tech companies are working hard to introduce their operating systems into your car. you got google, partnering with carmakers to bring the android platform to automobiles this year. and microsoft's operating system right now powers ford's in-car entertainment system. an analyst who specializes in this area says apple has taken the early lead in this war. it's the first tech heavyweight to come to market with an available product. he says, though, google could potentially overtake the rival given the global popularity of the android operating system. right now, of course, impossible to say which tech titan will come out on top. for today at least, apple taking the spotlight. pioneer saying it was radios with the car play compatibility that will be available in the next few weeks. guys, back to you. >> all right.

the auto battleground heating up between big tech companies. josh, for now, thanks. how's this for an analyst report title? crawling out of the carnage. mark mahaney is next. first, rick santelli, what have you got on your mind today? >> today, it's a very fun day, because we're going to discuss real versus faux. listen, something weird is going on today. we warned you. we have bund yields down 6 basis points, even the french are down 6 points. portugal is up double digits. their tenure. spain. italy. here's what happens when you push rates down beyond where they're supposed to be. central banks continue to lose control, and who wins? the traders win. volatility. up, up, and away. come back in about five minutes and we'll talk about it. today is thursday

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welcome back to "squawk on the street." a big day in the bond market here. check out the yield on the 10-year note. it's below 2.5%. now, according to s&p, dow jones indices, there are 148 companies within the s&p 500 that have dividend yields above what the 10-year treasury note is yielding. look at three of them. for instance, in today's trade, cisco systems up pretty big. you can see there up about 7%. strong earnings. it has a yield of 3.5%. windstream holdings, which provides communications and tech solutions, has a yield up 11%.

you can see those shares up on a down day, up 1.5%, and ppl, a utilities company, a yield of 4.5%, an it's also -- well, it's flat now, but off the session highs, still three green arrows, kayla, in today's trade for companies that have yields above the 10-year treasury note. back over to you. >> all right, thank you so much, dom, for that. we're also watching the nasdaq, currently down 56 points. the nasdaq and large-cap internet stocks have corrected as much as 20% since early march and it's fair to say the, quote, net correction has been substantial. mark mahaney has a new report entitled "crawling out of the carnage" where he gives his top sector picks after q1. mark, good morning to you. >> hey, kayla. >> the title of your report would imply the carnage is over, but as of today's trade, it certainly doesn't look like it. what's your outlook overall for the sector? >> no, you're right, it doesn't feel like the carnage is over yet. what we try to do is step back, look at what the market told us, or what the companies told us with the q1 prints that are all

out. what we've seen is no change in the growth rate. we've had a dramatic correction in most of the stocks, particularly in the small-cap stocks, and particularly in the recently minted ipo stocks. even large caps we've had. we think that's created unusual buying opportunities, and we put at the top of the list facebook, priceline, and pandora. we're in the middle of a market correction. fundamentals haven't changed. valuations have become much more attractive. that's our buy list. >> facebook and faceline have corrected, and you say there's upside. where do you find the upside to be for those two names that it would seem have been victim of some of these day-to-day corrections? >> yeah. so, you know, what we'll point out here is that we think a name like priceline can do $2 plus in earnings power next year, and that's not factoring in some new drivers for this name, like video ads, monetization of the instagram asset that we think is

going to be pretty material for this company. not this year, but next year. so we think that $2 is at least a floor in earnings for the name. what that implies is about 30%, 40% sustainable earnings growth for this name. we think as we get through this correction and the market comes back to looking at quality growth names, facebook will screen probably better than any other name in our universe. priceline will be second. that story is consistent. management team is consistent, one of the best execution stories in the internet space. we continue to like it, and you can buy it 16 times earnings for 20, 25% earnings growth. we think that's cheap by internet standards. >> mark, where is twitter in all of this, and what kind of effect do you see alibaba having on the carnage as we go forward? >> yeah, jon, a great question. the biggest decliner in that large-cap internet space is twitter along with groupon. twitter is still aggressively priced stock, even with this correction, it's still pretty far down the list in terms of growth-adjusted valuations,

attractiveness. there's a lot of things they need to prove still. same points as the last two quarters. they have to approve the monetization growth. it's more of a speculative buy for us. it's far down the list. the impact of the company, you mentioned on the space, tbd, i won't comment about alibaba, but on the rest of the space, you know, could it impact negatively e-commerce names, amazon, i know that story is out there, i would be skeptical the company would have an impact on the core business. we haven't seen it in the past with a bunch of competitors. it's possible it could happen in the future. >> mark, you talk about the correction, even though the growth rates may not have changed. are you assuming the names will start trading more on fundamentals than they have in the past? >> that's a good point. implicit point there, carl. they have traded -- i think for the most part we've had a few egregious evaluation stocks in the space with 40, 45 stocks. of course, you'll have outliers in there.

we've had names that even with a major correction like a zulily we're not going to touch because valuation is still aggressive. we think the stocks have largely traded off valuations in the past, a good chunk of them. it gets excessive on the long side and short side. here, we think it's the stocks getting excessive on the short side. that creates the opportunity. >> all right, mark, for now, we have to leave it there. we know a lot of people are watching this space closely, especially with the market moves today. >> thanks, kayla. >> mark mahaney. we're watching the 10-year, dropping down to 2.48. could today's data signal something greater? we'll get new comments from david tepper as the dow's now down 174. back in a minute.

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some exciting news from cnbc and "squawk." starting monday, we're taking our coverage to the next level with the launch of squawk alley. 8:00 a.m. on the west coast, 11:00 a.m. in the east, squawk

alley will stand at the heart of wall street. we'll be joined by the top voices in tech, the biggest ceos and biggest vc. we cannot wait for monday. congratulations to you and you and all of us here at "squawk on the street." >> it's going to be really fun. we've talked about a lot of the products as new launches. but they're really affecting the way we interact in our day-to-day lives even as some of the companies go public and they're on the stock market and affecting investors, too. >> yeah, it's fwun to get to do this. i'm still a silicon valley at heart. not really that into the finance side of it. you are an ace at that, carl, you do it all. so it will be fun. >> more of an expanded presence out west, as well as out here in the east. watch for that starting monday, "squawk alley." steve liesman has more on the data impact. >> yeah, carl, you can see

what's happening with the markets reacting to the macrodata. it's more mixed than what i've seen before. you have major indicators going in different ways. let me go through and show you what's come in just this morning and show you how it's done relative to the expectation. jobless claims coming in better. that's near-term data. the cpi a touch the same, a touch of inflation, no concern in bond markets. housing coming in worse than expected, that's gone along with other housing data that's not done all that well. let's go on to the manufacturing. three manufacturing reports today. let me clue you in there are different time periods here. the empire state and the philly fed are more recent may data. production, minus 6, is worse. let me show you a chart of industrial production. you see the april decline comes off a strong february and march. so not a whole lot of concern with it. a lot of people saying the march data was strong follow-through, or bounceback from the winter weakness. and they're saying they're not

seeing the strength follow-through. here's one report, commentary from credit suisse who says with tuesday's retail sales report, this suggests that march strength in u.s. data was largely weather related rather than a genuine acceleration. there is other commentary that says, hey, the stronger philly fed along with the empire state shows that maybe we're doing okay and guidance -- it's a very confusing moment here. guys, i want to say what's interesting to me about the new show is rather than forcing fortt to put on a tie, you change the show to justify him not wearing the tie. >> the question now is whether carl will be able to get away with not wearing a tie. but only time will tell. >> that would be a major fashion statement for carl to take the tie off. now, fortt is cool. no worries for fortt not wearing the tie, because the show now works for him. >> when in rome, you know what they say, mountain moves to muhammad. >> don't say when in silicon

valley, because i don't want to know. >> thank you so much, steve. now, get to the cme group where rick santelli has the "santelli exchange." hey, rick. >> hey, kayla. this tie isn't going anywhere, trust me. beginning of the year, when rates started moving down in pretty much the entire universe bucking that trend, i remember we had many debates, and i always had one notion in mind. keep it simple. what would be a reason for rates to go down? a nasty stock market. it's the only hedge against a nasty stock market. and indeed, you know, when you drive the bazooa, what do you get, long-term volatility, and it has arrived. here's my point. here's where the dow jones industrials average started out the year. okay? by february 3rd, like five weeks, it was trading at 15 -- 3.72, lost 1,200 points. where was the interest rate? february 3rd is when we reached

that very significant 2.57 close. we just took out in the last day or two. so we went from 3.03 down to 2.57 because of that dynamic. so does it surprise anybody that as we took out the february, we're seeing a relationship, you could say tail wagging dog, dog wagging tail, but in the end, this is risk and it's volatility. and it's kind of payback volatility. just consider this. in our ten year, volatility in the june, friday close at 3.8% for those of you that follow implied volatility, it's a 4.8, up a whole percent. september, longer data volatility, friday was close to 4%. it's about 4.5%. now, you know, i've talked about how there are so many turnstiles of reasons of why rates are going down. and there is no easy answer. i know whether it's -- even our -- people want to put in a pretty box. you can't. bund yields. remember, right about 1:00 in the morning, we had gdp come out

in germany. it wasn't a bad number. what did the bunds do? bund yields go down to the current level of 1.31. why is that? okay, let's show the chart. let's show spain versus bunds. let's show italy versus bunds. i wish we had charts that were updated for portugal, but we don't. you get the point, okay? bund yields, france, treasuries, they basically went lower. but the ones that have been under the thumb, been managed, manipulated, southern european, a lot of the interest rates, even italy, starting to unravel. two days ago on the "santelli exchange," we said if you took the low rates and put them up for a public investor auction, they'd never go off at the current levels. so call this crazy volatility, and i know many continue to try to want to blame it on disinflation. sorry. don't think that one holds water just like geopolitics. central banks could hold things together for so long. volatility will emerge. i don't think interest rates can be controlled forever, but i think that for the moment it's a

risk trade and people who have the wrong positions on are scrambling, and i think the scramble is going to continue for a couple of days. back to you. >> it's important to get your take, especially on a day like today, rick. thanks a lot. let's send it over to seema mody, watching the downgrade of vodafone. >> that's right, carl. the stock moving lower as goldman sachs downgraded the stock from neutral to buy, citing m&a potential, with possible acquirers. >> thank you, seema. 11:30 on the east coast. simon is here to wrap up a lot of red on the map. >> carl, there are certain jobs doing this job figures do speak for themselves. peripheral europe, the fall on greece, down 5%. spain, italy. look at the way in which the markets are deeply in the red. the acceleration is not coming through within the euro zone despite what the business surveys have indicated.

today, we got gdp figures. across the euro zone, growing at an annualized 0.8%, but a lot of that's to do with germany. if you look at the figures, france isn't growing. italy is contracting slightly, and the netherlands is now contracting at an annualized rate of 5.4%. now, that obviously then pushes on to what will the ecb do about it? the euro is at a two-month low, draghi has talked it down. there's a lot of questions about exactly what they can do in june and the effect it will have, once eventually the jawboning stops and they put their hands into their pockets. the financials have led the decline today. i would mention to you the italian financials that are lower, but ireland's down, portuguese financials are lower. that's why. you see the periphery of europe doing so badly. a little bit -- a little bit of a scare, from left field for greece today, rick was showing you how some of the spreads between these peripheral bond

markets is beginning to grow again with germany. actually, you've seen that greece is going clearly in the wrong direction, a sell-off after the greek government had to deny it is retroactively trying to impose a tax on foreign bond holders, who have made so much money on the rally in greek debt. they are simply clarifying there was a 33% tax on legal entities from abroad that expired in january of this year. there is, however, big political risk as far as many observers are concerned, as we go into the european elections the week after next. it's not necessarily that the balance of power will change. but a lot of very noisy parties from the left and to european parties will be making headlines around europe, and that could unnerve some. however, bear in mind where you're coming from for some of the stock markets. if you look at where we are on, say, the german dax, the london market is close to a 14-year high. one more before i hand you back to carl, and that is what's happening with alstom in france.

the french have decided to issue a decree, basically saying they will determine if strategically important assets to the french economy can be taken over, and the reference is it's about ge's $17 billion acquisition of alstom's power plants, obviously they're calling it the le decree alstom paris, and that's basically how the french roll. if they want to intervene, they write themselves a decree and it's law. >> welcome to france. thanks a lot, simon hobbs. david tepper says don't be too freakin' long. is he right to be nervous? gary is live from salt in las vegas next. s&p at 1,865, a violation of the 50-day. we're back in a minute.

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welcome back. we want to bring you the latest on net neutrality law coming out of the fcc in washington. a proposal to allow internet providers to pay for certain access to certain content -- or to allow content providers pay for access to internet service providers, approved 3-2. this has been a dividing line among the democrats and republicans at the fcc. both democrats voted this down, saying they were disappointed in how this was run, how the process was run, and some of the tenets of this basic proposal. it's not finalized. they will take comments until july. the newest proposal has been approved at the fcc, 3-2.

we're watching the markets today. a lot of buzz this morning out of the salt conference in las vegas. mostly over comments made yesterday by david tepper. what did he actually say? gary kaminski is there with kate kelly, melissa lee. you've been watching the story closely. melissa, what did you make of the comments yesterday and some of the other news out of salt so far? >> well, as you can mannen, kayla, those comments, particularly don't be so freakin' long, have managed to be caught on. i wanted to press him last night on what he meant. what he told me was if he was more than 100% long the markets about six months ago, at this point, he's about 60%. so that gives him the ability with his size to either ratchet up or ratchet down according to the market environment. i wanted to press him on where he saw value in the markets and which sectors and/or stocks he identified as being in the place to be, and so he said the areas

that have been beaten down in the recent market sell-off that started in march, technology, i pressed him on the names, he gave me two names, google and priceline, and this fits with what he said about where the s&p valuation is right now. it's much easier to be bullish six months ago when the s&p valuation was much lower than it is now, now that it's much higher. and these two stocks in particular do fit that bill. >> yeah, melissa, i would add to that, we were out to dinner, at the same dinner with david. i spoke to him before the dinner, and i mentioned to him that while he was speaking to the general session, i was watching the s&p futures along with several traders here in the audience. he was very surprised that the market reacted so negatively to his actual comments, because, kayla, i believe what david was trying to say is there was a time when that quantitative easing trade, you don't short the market and you just close your eyes and go long, he was trying to simply tell this group, that's not where we are today. he was simply saying now is the time to have a balanced portfolio to recognize that the

bond market trade that everybody had wrong in the beginning of this year has reversed, and so a much more measured comment than most of the headlines came out with, and i think david wanted to emphasize that, and certainly melissa and i at dinner. >> gary, i love you generally, but the headlines i saw, certainly on cnbc and the website, and also the competitors whose pieces i read, including "wall street journal," were pretty measured as was he. i think the reason, though, the market has reacted and people found this so galvanizing is for exactly the reason gary mentioned. david tepper was the man of the bernanke put. he was long in recent years and has the returns to show for it. however, if he's not going to reverse himself but modulate himself and say, hey, you need to have cash on the sidelines, you don't want to be overlong, you don't have to go short, but just make sure you have the options open, that feels to people like a huge change of tune. and i know from just color i've heard on his positions over the

last six months or a year or so he has continued to be constructive really until this moment. at least as far as i know or the folks that talk to him that i know can acknowledge. >> gary, what's your perspective of going from 100% long to 60%? that's a dramatic change. even though the comments are measured, the numbers are pretty staggering. >> look, the flexibility point is the important point. i've sat there. i've managed money. i run a portfolio. to go from 100% long to 60% long is not saying you're negative on the market. >> oh, yes, absolutely. >> to go from 100% long to go to cash 100%, when you're running a hedge fund, that's saying you're negative about things. let's make sure people understand the difference. >> by the way, i think i could ratchet up the sort of impact of what david tepper said by reminding folks by saying, i'm nervous. it's nervous time. he also said china could be going down the tubes. he thinks they have a housing bubble and the ecb may have lost the opportunity to help the economy. [ overlapping speakers ]

>> -- melissa, was he able to expand on the ecb being behind the curve at all? >> you know what, carl, you know david tepper as well as i do. he gave me five minutes to talk to him. >> yeah. >> the five minutes it took to walk from the dinner to the elevator bank. >> gary, your take -- >> carl -- carl -- well, carl, if i was going to be reporting on that dinner, what i would have told you the headline was, wasn't that he was nervous about the u.s. equity market. the headline to me was that he came out and he said the ecb better -- and i forget what word he actually used -- better blah, blah, blah -- it was a little more -- [ overlapping speakers ] -- more colorful than that. that was the takeaway in terms of what the market is pricing in right now. >> what he actually said in terms of his speech. he had tough words for the ecb. he said they're behind the curve. he hopes to god, basically, they ease in june. even if they do that, it may be

too late to have a salutary effect. he's not sure. in terms of china, he referenced a story in "the journal" how housing bubbles in asia, and i think chanos will have interesting things to say, because he is very bearish china, thinks things are overvalued. >> carl, can i just add to you, i was going to tell you today, if i had to sort of guess what is the takeaway from this whole conference, we have a day and a half still to go, it's this fear of deflation around the world, not inflation, deflation, is what's driving bond yields around the world, and that's clearly what i think his message was to the ecb, you better be worried about that. >> i understand that. but ppi and cpi, you could use them to build an argument to the opposite of that. >> listen, i got in the elevator this morning, very early here in vegas, with somebody who runs a lot of money and is very smart. he looked at me and he said, i can't get it. why are yields where they are,

because look at what's happening with unemployment claims, look what's happening with the economy -- >> and here's where david tepper yesterday, to me, sounded a little more like a macro trader than an equity market specialist. i mean, he sounded to me like paul tutor jones who said i can't find a direction. sometimes i wish i were on "dancing with the stars" rather than managing money, because it's so darn frustrating. >> that's the trend here. they're the ones that have done worse this year. underscoring what tepper being moderate and cautious. you wouldn't be in a stock like a priceline if you're truly worried that the market would collapse. >> again, to reiterate, melissa, you're not 60% long if you're truly, truly concerned about the equity markets when you're running a hedge fund. >> obviously, that is worth taking note, the ratcheting down of the expoex osurexposure. >> yeah, ratcheting down 40%, nothing to sniff at.

i know there's a lot more content to come. thank you, gary, kate, melissa, for now. enjoy yourselves. when we come back, markets on the move. we'll get the big winners and losers with the dow trying to find some level of stabilization, down 176. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers.

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how much money do you think you'll need when you retire? then we gave each person a ribbon to show how many years that amount might last. i was trying to, like, pull it a little further. [ woman ] got me to 70 years old. i'm going to have to rethink this thing. it's hard to imagine how much we'll need for a retirement that could last 30 years or more. so maybe we need to approach things differently, if we want to be ready for a longer retirement. ♪ sell-off in the markets continuing. you're looking at the dow down 182 points, near the lows of the session. bob pisani is on the floor of the nyse. bob, what are you seeing out there? >> good morning.

the dow not far from the lows. the debate is simple. are we seeing modest economic growth or accelerating economic growth? that's been the debate all winter as we wait to get out of the terrible snow and cold weather that we had over the winter. and the bottom line right now is it looks to be very, very modest at best. take a look today at what's the weakest. it's economically sensitive groups. your cyclical names. so you see materials stocks, financial stocks, energies, discretionary. to the weak side. my point is, if you're only modest growth, talking 2% gdp on the year, for example, where a lot of people are expecting 3%, that has big implications for asset prices. you can't have asset prices at historical highs with very, very modest economic growth. that's going to be very hard to achieve, because you can't get any revenue growth at all that's the driver. you can't just keep cutting costs. at some point, that has to stop. it has big implications here. it's very important to point out the yield's drop, and we've been noting that all day.

rick had a good point about peripheral bond yields and i'm talking about italy and portugal and greece. those yields have gone for the most part to the upside today. here you can see one to the downside. greece is the upside. i think this points out that there is now risk being reintroduced. they were talking about cutting rates in europe. when you see the yields start going up in the peripheral areas, that is an indication that there's a little more risk ott there and the big rally we've seen in the peripherals may be over for the time being. tomorrow, we'll get the next important number, an that's housing starts for april. we had a real disappointment today with the nahb sentiment indexes, weaker than expected. builders are not excited. the htx, the main index for homebuilders, has had a tough time this year. we're sitting right now at the lows for the year. so again, that number tomorrow, if that comes in, kayla, really weak tomorrow, that'll be a real sort of nail in the coffin for the home building revival or rally we were supposed to have

this spring. so far, it's just not materializing. back to you. >> all right, bob, thank you. bob pisani, back here on the floor with us. as he said, the dow is down, 9 out of 10 sectors weak. ben willis joins us at post 9, princeton securities. you think it's nervous time? >> i walked around the floor and talked to the professional traders that i respect quite a bit, and they are all nervous, which is we have not seen that. >> before or after tepper said the words last -- >> actually, it was coming in this morning, prior to this morning, it was -- they were comfortable with the whole idea this is still a very gentile sector rotation if you will coming out of the high beta, names very, very familiar, the twitter, facebook, and the like. the fact you have major market players like tepper, you have the mutual fund numbers that saw a huge drawdown in the month, $3.8 billion leaving the mutual fund equity side and almost entirely going into bond funds is a great explanation of why we're seeing what we're seeing. >> whether tepper was literal or

figurative, he seemed to ignite a sentiment that was already existing in the markets. do you think it's the taper? do you think it's global growth? do you think it's housing? pick any one of them. >> i think it's global growth. the whole idea of the price market is to price the trajectory of the gdp, and in this case, china is leading the pack. when you have the gdp ratcheting back basically 50% to a mere 7% in china, that's the key to the rotation out of high beta names. all those issues having to be repriced coming into the united states. we were very comfortable with the idea that most every talking head on cnbc since january told us we were going to have some sort of correction in the market. we just didn't -- we thought it would be broad-based. i think what we're seeing today is a far more broad base. >> yeah, almost 150 s&p components. yielding more than the 10 year. you're saying you'd rather buy 10-year government paper than any of those names? >> not me. i have no idea why anybody would

buy a bond. it's beyond me. if you go back to january, i can't think of one pundit who said it was a wise idea to buy bonds. >> the journal today said today all those guys have egg on their faces, right? >> yeah, 2.5 on a three-year, and we hear before your latest segment was the ecb being behind the curve, there's -- intellectually, there's no way to justify why we're here, other than concern we're not in a safe place in the world, so you're going to seek safety until the cloud clears. >> june's just a couple of weeks away, so we should have an answer in terms of what the ecb will do, sometime soon. ben, thank you for putting this into perspective for us. we're watching the dow near or at the lows of the session, down 192. more on the markets, more on what's going on here at post 9 when we come back. her vo) when i was pregnant... i got more advice than i knew what to do with. what i needed was information i could trust on how to take care of me and my baby. luckily, unitedhealthcare has a simple program that helps moms stay on track with their doctors and get the right care and guidance-before

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coming up at the top of the hour, back here at the salt conference in las vegas, hedge fund heavyweights sharing their best ideas once again on the markets, and today we are stock picking with omega's leon cooperman. we're getting bearish with jim chanos and steve kuhn will reveal the stocks he love. that's live from the salt investor conference. carl, we've gotten tepper's take on the market and now lee cooperman's take on the market, and see if they agree with one another on where they think the markets are headed. >> yeah, always fun to watch leon speak his mind. we'll see you in a few. the nasdaq is under pressure

this morning. sheila has the latest. >> carl, we are right now at session lows for both the nasdaq 100 and the nasdaq composite. in fact, the composite is down nearly 1.5%, so certainly seeing some real selling pressure. i've been talking to traders as to why we're seeing the momentum pick up in the nasdaq to the downside. they say it's a one-two-three punch. physical, you have the negative sentiment throughout the whole year. certainly, tepper's comments didn't help a whole lot, so people taking their queues from there. second, can't forget about the russell and what's happening in the 10-year. again, everyone saying that the nasdaq and several stocks are trading on the back of that. certainly seen real slowdown when it comes to the russell 2000. finally, we have the wrap-up of earnings season. we're coming to an end here. cisco was a real winner today, a lot of people are ho-hum about the results over the quarter. as for what's moving now on the nasdaq, what you really see moving the nasdaq lower is some of the large-cap tech stocks. look at microsoft, apple, also amazon, they are pulling down the nasdaq index lower.

also biotech and momentum stocks. we've been talking about this group quite a bit this year. you're seeing real selling pressure there. these are the stocks that help take the nasdaq higher. and now, as we are shifting momentum the other way, certainly helping to pull it down lower as well. >> sheila, thank you for that. as you've been speaking, the dow is down a full 201 points and the s&p is down almost 26. we're back in just a minute. i always wanted to design a bike that honored those who serve our country. and geico gave me that opportunity. now naturally, we wanted it to be powerful, innovative and we built this bike as a tribute

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welcome back to "squawk on the street." i'm seema mody. astrazeneca, stock is moving higher on new positive data regarding its experimental lung cancer drug. this gives the company fresh ammunition to argue that pfizer's takeover offer undervalues it substantially. the stock is currently trading higher by around 1%. carl? >> thank you very much, seema. the dow is down 195. the breach below 2.50 on the 10 year may have spooked folks as that continues to be the fear gauge, as art cashin would call it. >> right, the vix has been a traditional one, but it's hovering lower than 14. even though we talk about the markets being volatile, 17 is the level where traders would start to worry about that gauge. >> yeah.

s&p did breach the 50-day moving average. some technicians would take note of that. and we're not done for data for the week. >> no. >> we'll get housing starts tomorrow. and unlikely the numbers will surprise to the upside. we'll have to wait and see. in the meantime, that does it for us on "squawk on the street" as we hit noon. let's get to "halftime" at the salt conference in vague as. -- vegas. >> announcer: welcome to the "halftime report," high-roller edition, live from the salt conference in fabulous las vegas. now, here's your host, scott wapner. all right, and welcome once again to the bellagio as we continue our coverage of the skybridge strategic alternatives conference. i'm joined by two traders, steve weiss and pete najarian, and the first guest we'll get right to, the legendary stock picker and founder of the $10 billion hedge fund omega advisors, leon cooperman. lee, welcome back. great to see you here in salt. great to have you back on our show.