they're accepting. >> so somebody is taking a bag of cash to the state to pay taxes and the state isn't putting that in the bank? >> absolutely. >> but you can't put it in the bank? >> no. in that case the bank has the risk of the federal illegalities. >> guys, they're talking about trying to start a banking cooperative. back to you. >> thank you. mary jane wells. >> don't know if you can bake that stuff. "squawk on the street" begins right now. ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla, jim cramer, david faber at the new york stock exchange. big morning for retail as it has been all week long. today, sears, best buy and more. futures up slightly after pretty decent china pmi numbers. 10 year yield, existing home sales in an hour, jobless claims

did rise 28,000 and europe remains in another tight premarket range today. our road map with another tough day in retail. challenges continue at sears and best buy. both brands declare a bare market consumer electronics. apple the new weather. >> and internet ipo jd.com pr e prices in the range. what it means for alibaba, the market, feature of e-commerce. >> can we maintain yesterday's rally. positive data from china but claims elevated. >> and one very steamed darden investor, starboard, launches a fight for the entire board of directors at darden, all of it or much boiling down to the sale of re red lobster announced last week. >> best buy first up reporting better than expected operating profits of 33 cents a share in the first quarter. revenue and comp sales did miss. the company says it expects to see ongoing industry-wide sales declines in many consumer electronics categories. sears posting weaker sales,

first quarter losses came in wider than expected. the best buy story, though, is marginal and the fact that they head added 20 basis points, expense control, pricing pressure, are they getting that under control? >> i thought it was a good quarter in the sense the previous quarter was so horrible that they -- things are stabilizing. this is a tough category. go over what target said yesterday, by the way, i like the target quarter very much. that's contrary. this is the one sector that is just being footballed. it's just -- guys are bringing these price downs to get you in the store. that happens to be best buy's bally wick. this was not a bad quarter. when they report they're underpromising to overdeliver. they've learned how to handle wall street. i don't want to sell the stock. i don't want to buy the stock. but the shorts should cover. >> best buy actually gained some share in consumer electronics and as far as sears goes, consumer electronics costs them 60 basis points on comps.

>> yeah. continuing impact to consumer electronic industry trends. kmart comp stores down 2.2. >> they're closing the bad ones. >> they're making progress and did see comparable sales growth at the sears domestic. he's trying to change the company as he said apple had its really bad years and then came back. >> well -- >> i just don't know. i don't know. but it's the first time i've seen a top line actually -- i mean an actual positive same store comp. >> first time in more than a year. >> that's important because if you finally take a look, look below the line and see what they're closing they have some stores that don't -- aren't horrible. it's very hard to judge how a company is really doing when you see that the bad stores leave, but you know what, this was not a bad quarter and the short position here is just humongous. again, don't want to own it. don't want to be short it. there's other guys doing so well. i want to own target really badly here, by the way. >> why? >> because they stabilized the

customers back and they don't have real management yet. >> as bill george pointed out target revenues up 2, sears down 7. >> right. >> walmart up less than 1. those people who didn't completely divorce themselves from target are staying pretty loyal. >> yes. target is suffering from they haven't spent enough on their so-called omni channel. haven't spent enough doing things off-line. if you want to see the picture-perfect quarter it is williams sonoma. williams sonoma, i am now saying, other than tiffany, but tiffany doesn't give you a lot of information, it's hard to read tiffany, laura albert and williams sonoma quarter it's what you want. 50% is digital. the digital brings people into the stores. the catalogs are still working. pottery barn, kid, teenage pottery barn, we know where they're shopping. amazing. and west elm, i'm ordering from west elm this weekend. everybody else is and i don't want to be left out and using

etsy, they have a supply chain that is sustainable. williams sonoma is the retailer for the -- for this decade. >> comps up 10. raising their forecast. margins up 40 basis points. >> geez. >> hard to find any noise in it at all. >> none. i have to tell you, they spent and nordstrom spent. these guys recognized we are not going to let amazon come in. i spent a lot of time on the petsmart site last night. it is horrible. go into amazon if you want the nine lives 24 cans for cats, you get a price that you can't believe. and it's amazon prime so it comes. i can't even get prices for what the real units are in petsmart for the dotcom. it's -- it's an abomination. they need to spend money on that. >> wow. >> and amazon, amazon pet food, you breeze through that. breeze. >> like the home shopping network review channel sometimes. >> you bet.

by the way, people don't want chinese pet food. >> petco. >> i said yesterday. >> you don't want chinese petted. >> no. >> you want russian gas if you're from china and chinese exports were good but if it's -- i don't think it's pet food. >> stocks are hoping to maintain momentum in part because of the chinese numbers. chinese pmi for may rose to highs. contraction in factory activity but at 49.7 head of estimates people will take anything close to the breakeven point. >> that's is a great depiction. looking at the export, the export lines are up. china is not back. but you need to see a few months where they don't terribly disappoint and you can make a case that some of the emersons of the world, does big business in china and had good orders last night, that those industrials can be bought on. china needs -- we don't have enough growth away from the u.s. we have it in uk. they have a property bubble.

if we see stabilization in china a cohort of stock wills fly. >> what's not happening is some of the rift between washington and beijing. china banning windows 8 as part of their government procurement process. we don't want to buy american goods. >> if you're cisco, which i believe in, you don't want to see that. >> i haven't seen china this close to russia since the korean war. >> since the korean war really? >> yeah. >> since the '50s? >> yeah. i think that -- remember there was a rift. didn't like the way the communism was going in russia, well, i think that they're very much in sync as rogue capitalist countries and this -- we're not playing up enough. i see the journal they kind of got religion. this $400 billion deal between russia and china that is so big and says to europe, we don't even need you as a market, the numbers of jobs that will be

created. this is a center in genic putin negotiations -- jilted noble off israel, thought to be the largest natural gas field other than in russia, that deal is going to get back on the table. do not sell noble. i think noble is -- has got the cards. western europe needs and central europes need natural gas. this was a break through deal not getting the attention. >> it's a very important deal. i think it is to a certain extent getting a decent amount of attention. china's ability to secure its energy needs around the globe is one of its key considerations. probably number one. whether it be coal, natural gas, oil, they are the largest importer now. >> isn't that something. >> and the largest creator of carbon emissions as well. >> right. kyoto accords. people in this country who -- i don't want to get on my soap box here. >> epa a couple weeks from the new plant regulations. >> look, there will never be another coal plant built in this

story, period, end of story. never going to be another one built. >> you said that a number of times. it does appear to be too. >> war against coal, really kind of coming out now, the utilities are scrambling, built the coal plants during the jimmy carter year, those plants still have a few more years to go and being told to scrap them after they spent billions ret toe fitting them. these guys when you look at southern, talk to american electric power, these guys are reasonable guys and keep moving the goal posts but they pay the yield, they pay the dividend. so be it. >> did want to move on to deal talk. a couple things to mention. let's start off with tobacco which i can try to bring you up to date on. talking about tobacco consolidation a bit of late, april 29th we talked about it here, and i referred to a lot of chatter that was throughout in terms of potential divestitures that would need to take place if reynolds were to acquire

lorillard. the stance expires in july. bats would be part of that in a sense. but things seemed to quiet and, in fact, many people noted that directors of laura hard were selling stock, actually sales, not preordained and saying that also gave me pause. earlier this week we brought up bonnie herzog from wells fargo and her 90% number, let me at least give you sense as to what i am hearing based on reports from reuters, the journal this morning, citing a source saying that the talks are back on between reynolds and lorillard and even indicating something could be seen in the near term. speaking of people close to the situation, they certainly indicate to me that timetable wise, this thing has got a ways to go and there's great deal of complexity here not just on the anti-trust front but because of the ownership stake by bats and its role in any deal. talking about a large its menthol at lorillard, 41% or something like that of the

overall. reynolds conceivably would have to divest and then overall concentration between all tree ya and -- or i should say -- and the new -- and the new combination were to occur is quite high. so d. >> you're not going to mention e-cig. >> you brought it up any number of times. it is worth mentioning in terms of why they might want to do it. there are talks going on, but the read i'm getting at this point at least is complexity and is very high and timing if you're reading the newspaper or wires you may be getting a little ahead of yourself. some people terming some of the stuff from bonnie herzog at least, frank wily saying, not qe right. >> okay. . so stock going down on that. i understand. i think there will be a deal. i think e-cig is an amazing trend having smoked. important gateway for me to go

to tobacco. >> as far as small and graduate. >> and then you really go right up to camels. no. i had -- one of the companies in e-cig on and people are waiting for this because people -- the guys who make esigs are saying it's the same amount as in the patch. the fda endorsed the patch. the fda endorses the patch to get off combustibles. it's not -- it's a gateway to being anti-cigarette. >> we'll talk more about darden and starboard's attempt to -- >> how did you get that? >> acquire to take over the entire board. >> a closer look at a chinese ipo, another one, jd.com going public today. we'll explore what the debut could mean for alibaba's ipo and also a live interview with the cfo of jd.com this morning on "squawk on the street." another look at the futures here in the premarket. coming off the dow's best day in the month, tightest range for may, of all three averages, since '87. all three averages have not moved more than a percents they

morning. >> do nothing and go away. >> more "squawk on the street" from post nine in a minute.

got news. got news from the nyse.

duncan is retiring from the nyse. tom farley the coo was named as his successor. ice says the rapid integration of ice has accelerated his planned departure. told he's not here today but interesting to get his soon on a day goldman is selling their market maker rights. >> people are getting out of businesses left and right. i think they're still trying to figure out what their mission is. i think that's one of the reasons why their price to earnings multiple are so low. >> goldman had good action yesterday as i recall. >> let me tell you the back chatter that i heard on that. there's a groundwell of beleaf there will pension fund after pension fund will drop credit suisse because they did plead guilty. the justice department is saying we're not taking away their charter there are institutions that say listen we can't deal with a company that has pled guilty to something. and then you start thinking like why do you have to deal with credit suisse. i don't want jobs lost or

anything but there is a lot of belief that maybe goldman's going to pick up credit suisse business and that's what that move was about. >> that's interesting. meantime china's second largest e-commerce site will make its wall street debut. jd.com raising almost $1.8 billion in the ipo. priced at 19, a share above the range, comes ahead of the planned ipo from their bigger rival alibaba. jd.com listing under jd and when that stock opens for trading. we will talk to the cfo on squawk alley later this morning a couple hours from now. >> well -- >> we know you like the space as -- >> i like the space but j date is more lucrative than jd. this is a company that has the amazon model of losing money but because we like them to lose money in china -- no. the world has changed. people are going to love this. i'm not saying jd -- >> [ inaudible ]. >> yeah. >> it may have a strong debut although we'll see.

>> it will. i like vips. that's a profitable site. i tire of companies that lose money that people are excited about. that is what happened -- look at salesforce.com. they do not -- they did great growth and the stock fell from 53 to 50. the market will sort itself out and we will not like chinese companies that don't make a lot of money. we will like chinese companies -- >> alibaba does make a lot of money. >> yes. >> extraordinary margins, something along the lines of 48 to 50% because they don't hold inventory. we love to ascribe whatever the chinese company is to the equivalent in this country even though they're not necessarily accurate. but jd does more closely resemble amazon in the sense of they actually do take in inventory, in other words they buy the stuff and then sell it, and they get it there same day in at love citys. >> they know how to -- >> they have their own delivery network. alibaba is a different model. t mall with the belle big

well-known names on there selling directly and then tabu, millions of merchants buying advertising. go on alibaba. you search. almost google's business model. >> i happen to like -- >> not to mention alibaba in terms of money management, so many different ancillary businesses that they can get into given their dominance, but it's growing still so quickly. you don't have the retail infrastructure in this country, don't have bricks and martyrs the way you -- mortars the way you do here. they're just getting started. >> in this country we decided we don't like that model. i like alibaba. i've said over and over i like alibaba at the right price. this is a me too company not making money that's growing really fast and we have -- you want one of those. i have 100 right now. they're in the soft as a service, you know. >> yes. sort of brings to mind speaking of monetization, upgrade of facebook, upgrades to overweight, target to 75. they say that they monetize

mobile versus the industry nine to one x search that's how much facebook is in the sweet spot. >> my travel trust owns facebook. i'm ridiculed about this among others thing including pictures of me holding babies on twitter. >> you were saying good-bye to people. >> but facebook has a fabulous model that the advertisers love. making a ton of money. but they're kind of caught in the vortex of companies that we think aren't making money. so when you mention that they could be selling at 22, 25 times, 2016 earnings or maybe pull through the 2015, people laugh. they're losing a fortune. they're making a fortune. >> yeah. when we come back cramer's mad dash ahead of the opening bell. one more look at the premarket. "squawk on the street" is back in a minute. with all the opinions about stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers

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♪ you want to come to a name that i followed closely when there was a big activist fight. they went at it. it's a while back now. they got a lot of -- >> let me tell you who broke that story, right here, turned out to be one of the great buying opportunities. elliott could do saber rattling in activism. wanted them to break up the company. >> they said there were underperforming and bakken assets. >> they discovered the bakken. am rad da hess discovered it. marathon pete bought their network for 2.7 billion. s hess truck, the marathon truck

for christmas. >> keeping the hess truck. >> that's a great insight. that leaving them with with bakken, unika, gulf of mexico, asian pa sif ka and that is not as good as what sanchez did last night, symbol sn. get to know this company. this company doubled down on the eagle ford. we need numbers from eagle ford i've got them. do you know the eagle ford, east texas, producing 50,000 barrels a day in 2011. producing 1.4 million barrels a day now. >> three years later? >> 50,000 to 1.4 million. it's a major reason why our country, we got the new figures, we are pumping 8.4 million a day, highest since 1986, i think we will take out the 1970 benchmark, we will soon be doing 10 million barrels, by the way we're importing so much less oil. a feel good story i insist on. that's why hess is up. >> eagle ford talking about the

permian and what that means for the likes of -- >> permian, that's eagle ford, that's eog, it's sim mer rex, which has a terrific business. by the way -- north dakota produce morse oil than alaska. >> talking about backen. >> back to hess, but can move on -- >> sanchez doubled down. you're talking about mr. mark papa who built eog into the company it is he said eagle ford is you hit it with a straw. it is as bountiful as saudi arabia, light crude. we don't have enough refining capacity for this crude. which is why they want to export oil. we can't pump it all and refine it. we have less pipe. permian is a 100-year-old field. they've discovered so much oil there in the last literally year they have no room to ship it anywhere. we will be producing 10 million barrels of oil a day but we naysayers about that.

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robert grifeld, ceo of nasdaq have had his challenge, in fact. sunday was the two-year anniversary of facebook's botched ipo. there he is with the ceo of jd.com going public today. when that begins to trade, we will bring you that trade as soon as it happens. interesting story. you're watching cnbc's "squawk on the street" live from the financial capital of the world. opening bell about a minute away. he's lasted longer than some thought at the time. >> yeah. survivor. total survivor. really one of the great survivalists of the year don't you think? >> maybe his greatest tall. >> like one of the survivalist like the shows you watch, channel 478 where they're in a bunker and survive. down with canned food and ar-10s and staying at the nasdaq. >> amazing. >> of course jd ringing the bell

at the nasdaq this morning and talk to the cfo in our 11:00 hour. a look at the s&p at the big board, provectus specializing in pharmacology and dermatology. as the nasdaq, jd.com. and we'll interview cfo sydneyisydney i huang later in the show. >> exciting types and all i can tell you we have exciting times in march for ipos and then april they crushed us. just be aware, that when the ubber comes and the air b and b, and everything 10 million we're going to get hit again. >> retail is going to be the story of the day. >> yeah. >> we knew it was retail heavy calendar but it has been the top of -- >> it's become a hedge fund play ground. >> dollar tree. >> i like they said discretionary sales -- jane

elfers, ceo of children's place delivers again. very unamazon-ble. a new term. oxford -- >> what does that mean? >> it's very hard to wreck children's place margins with amazon. it's also hard to wreck dollar trees because they have so much inexpensive stuff including can i just say the single best candy aisle in america. >> america? >> america. >> i'm from philadelphia. >> america. >> you are. >> i got a good dollar tree in south philly. i got a great dollar tree in south philly, great dollar tree in neptune. my one in neptune you can eat off the floor not that you necessarily want to do that. >> l brands by the way, 53 cents does beat by a penny, cut the top end of their range for a full year. still going to be a 1% gain this morning. >> look, we take our pulse of the economy every minute. dollar tree is good. wait a second, that means poor people are spending. l brands that's discretionary.

we have to get away from the notion that every retailer who reports determines the strength of the economy. it's stupid. >> how about one, walmart? >> stick with that. >> i'm hearing great things about the walmart ceo being able to put through technology. they've underspent and a year from now walmart will look different. i'm not kidding. >> it's an interesting thing because for quite some time, in fact that was their strength. >> yes. >> they were well ahead of many of their competitors in terms of advances on technology. i'm talking in the '90s. >> right. >> in terms of data, in terms of understanding customer behavior, long before big data became such a huge issue. >> understanding customer behavior. salesforce.com has got out of fashion. bell bottom and pocket protector company. a home depot app about what the community wants powered by salesforce.com that i think is explosive. it's fun. you get to know what other contractors are doing, what other people who are redoing their kitchens. the community is very important. nordstrom recognized that the

community is important. walmart is going all-in with the technology that home depot is doing. a year from now, i -- if you patience, i think walmart will be better. i like this ceo. >> it's not necessarily moving into a walmart. doesn't mean instant success. soda is going in and still get cut by barclays to underwhat et. >> it's not that much fun to shop at. target has not been fun. they can reinvent. >> i just love the association of the word fun with shopping because i must tell you, that is never -- that's the difference between you and me. >> it's not like i'm praying for rain and can go to the riverhead mall. but i'm hoping for -- >> fun? just get me, get me out. thank you, amazon. >> are you american? >> i'm american. american. >> taking a look at other names we're following. lorillard shares are down again. a lot of reports out there about this coming consolidation between reynolds and lorillard.

from what i can tell you in my reporting, complexity. the deal moving perhaps, you know, in terms of certainty and/or timing, i got a lot of pushback on both. >> right. >> meaning not as fast as might be portrayed and certainly not as certain as might be portrayed. but we shall see. there does seem to be a desire certainly for there to be consolidation. you brought up e-cig. >> right. >> menthol, they would be huge, that combination. so you would expect there would have to be divestitures. that was the basis of my report on the 29th about reynolds looking for divestitures of menthol brands ordered to move ahead and not face greater anti-trust scrutiny. some believe regardless given market share and cigarettes, versus m.o., it would be significant. >> is there a public policy incentive to let the deal go through as opposed to blocking it because you want price competition. in other words, if you're like

cvs took cigarettes out, i applaud them for doing, would the government want combinations in that industry so they all raise price and therefore fewer people smoke and our country is stronger? >> taxes will make sure prices stay high no matter what. >> yes. >> interesting. that would be a diversion from any trust doctrine. >> suddenly the health trump justice. >> very much so. >> i think it would be interesting. >> couple dow components. mcdonald's is facing all these protests outside their annual meeting which is going on right now. some reports that don thompson is talking about hiring a digital technology officer. >> does he need to do that. he apologized to you when you interviewed him in that great lab interview. he has missed the boat on loyalty. loyalty is -- you know, when you get to what starbucks is doing, if i were thompson, i would call howard schultz right now. i don't know if howard would go with it. >> how do you do it? >> let me license it. let me license your technology. howard is talking to people about licensing. mcdonald's should license it.

panera needs to license it. a lot of companies that don't understand social media and they don't understand mobile payments and howard schultz you an give howard a call and he would take your call and maybe even if you're not directly competitive, he would, indeed, sell you or lease you some of that. i think he would. he's been saying it over again. big meeting in a couple weeks. we could get him to talk about it. >> speaking of meetings, boeing's meeting with mcnerney this week, the second ceo to say he wants their products to be more like apple's, indra nooyi over the weekend. >> [ inaudible ] mcnerney is one of my favorites. air lease told a better story than mcnerney. air lease is a huge customer, one of these companies that take downs planes. gave me last night on "mad money" a picture that says that boeing has got orders for as long as it makes planes. now, if it make's apple's fine.

the stock has been stalled here. terrific buy but the market disagrees. >> apple at a new high since october 2012, 607.5. >> do you think they're saying we have to be more like boeing? long demand, long cycle. >> there it is. want to move on to another story we have not yet really discussed today which is starboard and jeff smith, of course, who runs that firm. increasing its stake in darden restaurants and more importantly challenging for the entire board of directors. they are going after all 12 directors of darden. at the annual meeting and so this is somewhat different than we -- where we have seen success by activists in consent to solicitation, thinking glenview and hma or keith meister and core vex with commonwealth, but this would be doing it at the annual meeting. the latest thing that seemed to get his dander up about

darden -- >> right. >> was the transaction to sell red lobster. >> wasn't that good? >> to golden gate. i did point this out, although they got $2.1 billion. then they immediately that is golden gate entered into a 1.5 billion sale leaseback with american reality. >> which did a big deal this morning. >> they delivered 600 million for the red lobster operations except after taxes, starboard argues it's really $100 million so it's one times ebitda they got. >> that's -- >> they could have done their contention is, a tax advantaged tax advantaged deal, they could have kept red lobster there, tried to actually reengineer it and fix it within the company. they believe there is still a great deal of embedded real estate value at darden and again they increased their stake. they also say, you know, we won for a special meeting it was over 55% of shareholders want a special meeting in a vote that

took place and a consent that took place and meanwhile, their voices have not been heard. this is the convention of starboard in its attempt now to replace the entire board. by the way, they can't stop the deal. they can't stop the red lobster deal. >> why is that? >> why is there no democracy. >> get rid of the guys with the expensive new headquarters, not listening to shareholders, going to hold a special meeting but in no, actually way that would have allowed a say on what to do with red lobster. >> how can they not let them in, and two, otis, he just seems to be entrenched. i think starboard's dead right on this. red lobster, well look, the fact is, is that the company is being run into the ground, okay, and they don't want it run into the ground and i don't blame them. >> they have increased their stake to 6.2%. >> seem like smart guys but you know better and they're going to be on. >> hoping to speak with starboard's principal jeff smith later in the show. >> they have a right to be

enraged. >> hoping we can get more there. certainly worth noting again. activism alive and well. has been superseded by good-old fashioned merger and acquisition activity without a doubt and talk about that business. >> but activism everywhere, lifetime fitness, a company i like, mar caddo capital. >> used to work for ackman. >> lifetime doing real estate. >> barra is a terrific ceo. i happen to love lifetime. a guy saber rattling, not doing that badly, it's flatlining, i shouldn't say that. the activist come in on companies and stock pops. >> we were talking about hess earlier another example that is some time ago already, a nasty battle, but elliott did win. >> elliott was right. >> y think so? >> a lot of embedded value. >> and that retail divestiture something hess said they would do prior to even -- >> right. good point. >> to even losing elliott as i would term it losing --

>> these guys are -- look, shrinked to grow. oxidantal came out. there's a lot of companies bringing out value and who's growing to grow? sales force, work day, cornerstone on demand, and people don't want grow to grow, they want shrink to grow. but -- >> why are you laughing? >> i just hearing you say it it's funny. it's true. they like shrink to grow. >> yeah. with that dow down 18. to bob pisani on the floor. hey, bob. >> good morning. sort of choppy indeterminent in trading. banks up a little bit, semis up a little bit retail up a little bit. this has been the problem for the last couple months. it's so bad, i have a new word for it, calling it the year of the churn. trading desk. active trading desks are getting chopped up by this indeterminate trading. we've got volumes near the lowest levels of the year. that's early to hit volumes at the early levels of the year. the vix.

yesterday a close below 12. that's the lowest levels that we're seeing of the year. fixed income yields you know about that, they've been low for a while. whatever you want to call it, deflationary concerns, lower than expected economic growth, you look at the ten year note downs there at 2.5%. the biggest problem the desks have right now is the narrow range on a daily basis. the s&p 500 for the last six weeks or so, you're up ten points one day, down ten points the next day, up ten points, down ten points. not only can you not get a trend on an intraday basis the amplitude is so small you can't make money. active traders are getting chopped to pieces in this market. that's why a lot of them are pulling back. you say bob, it's summer come on, chill out. it drops in summer, get low volatilit volatility. may has not been this low volatility for a long time. i'm up 0.2%. in 2013, 2012, a lot more active trading, bigger amplitude in the

change. thanks to peter who crunched the numbers for me. choppy trading forces people out of the market because it's trendless. long-term buy and hold this is not necessarily bad news. sideways makes sense when you have uncertain economic situation and you to admit reversion to the mean does happen. markets can't go up 30% every year. it makes some sense. but it's causing a lot of anxiety on wall street amongst the active trading community. move on, talked about jd.com, this week, let's not belabor the point. they priced above the range. okay. $19. the price talk was 16 to 18. this is now the third largest ipo of the year. there's alley number one, santander number two, jd.com number three at $1. billion. brave pricing. good luck to them. see where it opens and closing. the post trading the following days. jd.com priced above and everybody said that's great and it is great. sun edison semiconductor another

one at nasdaq priced at the low end, 21st century on oncology was postponed, a southern california bank first foundation postponed. i do not call this a sterling record for ipos. i know jd.com gets all the attention, it's terrific, just bear in mind this is a choppy ipo market that we've got right now. i think that jd.com will open around 10:30 eastern time. changes at the nyse, duncan need needer mire leaving in august. >> want to take you to times square where some of the fanfare regarding the jd.com ipo is the likes of which we have not seen in a while. there's -- a golden bull. >> really? >> very little background on this but know gold is -- >> where's -- >> highly priced commodity in china. >> lot of gold in calf.

>> they're doing it up at the nasdaq. selling 93.7 million shares. 47 million active customers and as jim pointed out earlier this morning has not yet returned a profit. >> not yet. >> i mean, it always could happen. but this is not -- this is the amazon model. spend spend spend and win win win. i like the alibaba model. don't spend spend spend, but win win win. >> right right right. >> one more. >> i don't know how their ceo is regarded versus bezos who i would argue is an iconic figure. >> i agree. >> differentgiven a great deal respect. i don't know anything about this ceo. >> can you name the 20th largest city in china, probably bigger than philadelphia. >> 200 cities bigger than chicago. >> it's probably bigger than the 20th still bigger than every other city other than new york. >> i mean i think people don't understand the size of this market and that's why people love these things.

>> my favorite stat of the day, china's share of global gdp in 1982, 2%. in 2012, almost 15%. >> really? >> yeah. >> and going in that direction. >> that is bananas. >> that's pretty something. that's growth. that's why they are -- when you look at what boeing is doing, believe me, every plane could be bought by chinese cities going one place to another. >> continue to create a middle class at that rate, urbanize people coming in from rural areas. >> 400 million. >> give them wireless phones and the ability to buy things with money they now have to do so, aren't you going to want to own these names? >> you will. that's why i like alibaba. you have to pick your spot. i like vip. think about what is happening, you mention about cell phones. i mean, china, that's -- remember apple did start going up when they got china. that was -- it wasn't the technicals and wasn't icon as much as china. they got religion about china and it's been working. apple by the way wants to be apple. >> in china? >> in china.

>> yeah. that's a good discussion. let's get to rick santelli and check in on the bond pits. hey, rick. >> hi, carl. there is an upward drift to yields but i caution traders say don't draw huge conclusions from that yet. doesn't mean it ultimately won't be important. look at a one and two-day, you can see what i'm discussing. smidgen above yesterday's highs. seems as though the equities have found their legs especially on this holiday shortened scenario with early closes in many markets tomorrow and markets closed monday. open the chart up month to date you get a feel for things. that low that you see on that month to date chart that represents the lowest level on a closing basis going back to july. but maybe more important, is how high the bounce in yields has gone or not gone. remember, 2.57 to 2.60 what technicians say is a minimal retrace and haven't gotten there yet. the month to date from the boon perspective. we know how important overseas

rates have been, whether the good sovereigns or not so good sovereigns. i would tend to think that we should be looking at the 140 level as a key pivot. down at 1.3. it did have a sell-off push in yields up a bit and much like the u.s., the markets seemed to be kind of at an equilibrium for the moment. china figures in prominently never so much to do about a preliminary read on china with regard to the pmi. 0.3 below 50. i understand it's a bigger share of global gdp which means even if it doesn't grow as fast it still has a bigger influence, but nonetheless something to pay attention to. on the foreign exchange side, june 5th is a big day. that's when the ecb and mario draghi have to deliver the postcard that they tell everybody is already written with regard to how they're going to put pressure downward on the euro and help their economy through lower rates. look at the euro currency over a two-day chart and then look the

fact that we haven't been at this level since about the second week in february. carl, back to you. >> rick, thank you very much. rick santelli. we are keeping an eye on jd.com as the chinese e-commerce site makes its debut. stick around to see how the stock does open up for trading. squawk alley, a live interview with the cfo when we return. (mother vo) when i was pregnant ...i got lots of advice, but i needed information i could trust. unitedhealthcare's innovative, simple program helps moms stay on track with their doctors to get the right care and guidance. (anncr vo) that's health in numbers. unitedhealthcare. ♪ "first day of my life" by bright eyes ♪ you're not just looking for a house.

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we are volvo of sweden. take a look at apple. did hit an 18-month high. pulled back just a touch, although twitter down for the seventh straight day. >> is that true? >> yeah. >> we'll talk more about some of the big names, get stop trading with jim in a minute. but what if you could see more of what you wanted to know?

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not so with internet from the phone company. i would email the phone company to inquire as to why they have shortchanged these customers. but that would require wifi. switch to comcast business internet and get two wifi networks included. comcast business built for business. time for cramer and stop trading. >> where there's smoke there is fire. two pieces in the last 24 hours on dhr. citi and jpmorgan liking it. jpmorgan telling you the fundamentals are great. citi talking about baby danahers. split to unlock value. there is tremendous value in danaher. you want to get ahead of this. because the earnings will be fine. i don't think you will get

bushwhacked. dhr is my pick going into the month of june. >> actually congom rate, the wells brothers. >> the wells brothers. thu think they might -- >> a lot of different divisions dental life sciences, industrial technologies. the parts worth more than the whole. because we get this news from citi saying listen the earnings are terrific, it's got to be rerated there is without a doubt something going on here that makes me want to be in danaher more than just -- >> after jci it's all the rage. >> travel test name people overlook the fact that deal gets the lowest margin business off jci's balance sheet and focus on h vac which is an industry coming back around the world. although from europe has been weak for jci. i think it's about to turn. new magment wants to bring out value. >> what's on "mad money" tonight? >> one of the popular stocks is opko health and phil frost.

and then intermune has the pulmonary fibrosis, maybe the life-saving drug, dan welch, first on cnbc to talk about that drug and how i think that could be a billion dollar drug in a couple years. >> we'll see you tonight. >> thank you. >> by the way, we want to congratulate one of our crew members on his son conner brian schwartz and his son conner thomas schwartz, happy and healthy last night at -- two nights, 7:40 p.m., 6.7 pounds. mom is doing well and dad is still in shock. >> that's great. keep those stories coming. >> we'll get breaking news on the economy. existing homes and lei in just a minute. hollywood movies all the villains are played by brits. >> maybe we sound right. >> good evening, sir. >> thank you mary. >> more focused, more precise. >> we're obsessed by power.

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well that's what type e*s do. welcome home. taking control of your retirement? e*trade gives you the tools and resources to get it right. are you type e*? welcome back. "squawk box," breaking news, lei indicators up exactly as expected 0.4, no revision last month up 0.8. we go to diana olick in d.c. >> exist hoping sales up 1.3% month to month to a seasonally adjusted annual rate of 4.65 mill be units that is right in line with expectations.

march numbers were unrevised. existing home sales still down 6.8% from a year ago. breaking it down regionally, northeast unchanged month to month, midwest down 1%, south up 1%. the big move was out west where we saw sales increase 5% month to month but still way down from a year ago, down 10%. we can look at prices to talk about that. median exist home price at $201,700. up 5.2% from a year ago. this is the slowest gain we've seen since march of 2012. we're seeing these slow down because while we are still seeing the median price disparity fewer selling on the low end they are beginning to come together a bit. inventory the good news. we saw inventory increase 6.5% to 2.29 million homes for sale, 5.9 month supply. for who's buying the homes, investors driving it with 18%,

all cash, still high at 32%. first-time home buyers still not in this market just 29%. they should be up above 40%. back to youp. >> so sounds like overall a mixed picture on existing home sales. diana olick, rick santelli, thanks very much. here on set with us at post nine to break down the data and the impact on the markets, dine, chief economist and senior managing director at mesereau, also with us art cashin with ubs financial services. diana, i'll start with you, in town from chicago. what's happening to the housing market recovery we've seen and supposed to bounce back with the better weather? >> it's interesting. the housing market one of the big concerns for the fed as well. we saw in the fed minutes yesterday and what we're seeing is the lack of turn in the market. not only are first-time buyers not showing up to buy but also people unwilling to list their homes. we know that some 10 million home buyers out there or potential home sellers still under water. not able to list their home and

clear closing costs. also people unwilling to qualify for a mortgage. i think they will take out home equity lines of credit that's easier and remodel and add on to their home. it is undermining turn in the market which we need. >> the fed as you mentioned pointed this out. assume from a traders, investor's perspective the fed won't think about implementing normal higher interest rates until we get the final piece of the recovery happening. >> housing got nous the mess and we need housing to get us out. part of the way is a better economy. until we see a better economy and better labor markets this fed isn't going to move. they might find they're going to end up moving later than we think. i think that's one of the issues the fed is struggling with and how do they move when they do move. they don't know that. >> what the message was yesterday we're in some sort of new environment where older population is lower, potential gdp rates will remain lower but hear about price pressures increasing, strengthening, gaining ground. >> yeah. it's a very, very puzzling place for the fed because they're

talking about going back to the quote/unquote old posture of raising interest rates a little. they did that in an environment of federal funds. they would encourage banks to begin to borrow from one another and that would raise federal funds up and then we would know how tight money was and they would add some in. there's $2.5 trillion in excess reserves laying around. what bank will have to borrow from another bank. so the old structure -- >> you're right. it doesn't work. you're looking at all options but any options they have could have ripple effects and unintended consequences. this is something part of the discussion and they haven't mapped out yet. looking at it but haven't mapped out. >> as an investdo you have to b prepared? any way they can get out of it without being messy. >> anything is possible but in the rare rare case of something being true, for the fed, this time it is different. this is an environment they haven't seen before. people talk about where do they

go? will they start charging on the excess reserves. that will be a big change. we'd see major things there. so it's very, very difficult to see how they begin to work out this environment. >> diane mentions renovating your house as opposed to listing it. i'm thinking back to home depot's numbers earlier in the week, talking about a robust may. are we in a home depot type of market? >> i think we're right. diane is spot on and the other thing that was touched on actually on "squawk box" this morning about how difficult it is to actually get a mortgage these days. the originators have this look back clause, they don't want to get started into it. it's very, very difficult. you look at the senior lending loan officer's report, you can see that they talk about things loosening up but they're not. >> i mean the pile of stuff you have to go through is overwhelming and so i know the most sophisticated people throughout are having a hard time, bankers that are pretty sophisticated in terms of what they can do, and they're having

a hard time getting mortgages refinanced let alone getting a new one. >> diane, we're six years past the already imploding housing market. >> right. >> six years ago. >> which is amazing where we're at. that doesn't sound good, but given other historic financial crises, this was worse than the great depression in terms of the magnitude and how it hit markets we're lucky to be here. i hate to say that. this is no the a lucky market. we don't feel great about it. i think the overall economy has many years of healing. what we're starting to worry about is how many of the collateral damage from the initial crisis is becoming more structural rather than cyclical, how much of the unemployment is more permanent. we talked about that this morning on "squawk box" is more permanent rather than sort of transitional. i think a good economy heals and covers up a lot of problems in the labor market as well, but we're nowhere near a good economy. >> i want to ask about china. chatter about that today in the markets. that was a lingering question for investors as well. manufacturing gauge at a five-month high. are you seeing enough signs of

stabilization for the chinese economy? >> i'm still worried about china. they've got a lot -- the shadow banking industry lent short. a big accumulation of short-term debt. they're trying to pull it in a bit. china is in very rocky territory. i'm nervous about china right now. >> art, you're nodding your head. >> absolutely. shadow banking over there is potentially 2007 all over again if things don't go properly. >> although they do not have a lot of securized products. that's the one thing i would point out. they haven't spread the risks the way we did all over the place. they actually have loans that -- >> not as global in reach because we don't have the london aig. >> or even within the system. >> right. i think you're right about that. that's how china always was. that said, for china, there's a couple issues. one is how fast can they grow to keep the middle class about growing. they're saying we're willing to take the lumps. it's a lot of lumps. this is major upheaval in political instability within china as well. and you've got a lot of empty buildings in china right now

that are not being occupied that are supposed to be for housing and people can't afford them even though their wages have gone up. >> and david to your point, there is contagion but it's straight line and that can be equally dangerous. >> got to leave it there. thanks for joining us on the u.s., that breaking news and, of course, on china with a flat dow right now, down about points. art and diane, good to see you both. >> sears and best buy reporting weak sales today but the stock is having different reaction to those results. our courtney reagan at hq with details. >> hi, carl. both sears and best buy discussing weakness in consumer electronics. sears has a number of separate issues. best buy's core product category there is cause for concern. i just got off the phone with best buy's ceo and he says the lack of excitement in the consumer electronic category means in the short term our comps will be negative, even though we're gaining market share. but i believe in the long term there is a lot of innovation that will come in that space.

he wants shareholders to understand best buy continues to drive to be a frugal, efficient retailer, turning attention to igniting growth engines and delivering service and convenience to our customers. every change will be incremental in the multiyear transformation. did beat profit expectation base wide margin but total revenue and same-store sales fell short. on-line business gaining traction with 29%. i asked if he imagines a best buy in the near future that does the majority of its business on-line. and he explained increasingly it will be hard to determine what is on-line and what is in store. if a customer orders on-line and picks up in store that counts as an on-line sale, but if a customer orders on-line and the product ships from store that counts as in store revenue. crate spraitsly. another rough quarter for sears, posting its largest sales drop in five years. the troubled department retailer will close 80 additional stores, possibly more, but hardly makes a dent in its 2,000 store

footprint. that story i just don't see turning around. i don't see a scenario where sears actually comes back. >> yeah. more asset sales. wanted to mention, dollar tree, which sort of stands in contrast to some of these other retailers, i noticed they had higher traffic, bigger average ticket price and wonder what that says about the overall environment economically that these retailers are standing against? >> and again, it's hard to say, sara, because something like a dollar store also offers convenience and we're seeing some consumers move away from the big box stores. it takes time to park your car, get in, get through the line. they move more towards the convenience of a dollar store. walmart seeing strength in the smaller format stores. so it's really hard to paint this economic picture with the same brush. i think there are different things that these small format stores offer. >> all right. interesting. very interesting. well we will see how they continue to fare against all of those challenges. courtney reagan, thanks for the roundup. up next, starboard launching a

fight to take over the board of darden restaurants. the ceo of starboard jeff smith will be joining us live to talk about that move when "squawk on the street" returns. huh, 15 minutes could save you 15% or more on car insurance. everybody knows that. well, did you know that game show hosts should only host game shows? samantha, do you take kevin as your lawfully wedded husband... or would you rather have a new caaaaaar!!!! say hello to the season's hottest convertible...

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sleep train's ticket to tempur-pedic is ending soon. ♪ your ticket to a better night's sleep ♪ dog: get four years 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. mattress discounters' memorial day sale ends monday. lot of activity in midtown. the nasdaq where jd.com is awaiting its first trade. the ipo valuing the company at $26 billion. prices above the range. even throw it is not yet posted a profit. we'll talk to the cfo in about 45 minutes. >> all right. the activist hedge fund

starboard has launched a proxy fight to replace the entire board of directors at darden. follow nating 12 directors for the company's annual meeting. joining us on the phone is starboard's ceo jeff smith. jeff, good to have you on a news-making day, if you will. why should shareholders give your chosen nominees control over this company? >> first, david, thanks for having me. it's nice to speak to you again. this has been an exciting opportunity and aggravating opportunity as you might imagine. lots of shareholders often complain about past performance of companies which extremely aggravating about this is this was predictable and we tried to stop this red lobster transaction and destruction of shareholder value before it happened. the company has had an egregious

record of corporate governance, ignore shareholder wishes and now we've seen that firsthand. as we've approached the company we've put out two separate long presentations talking about how their plan to separate red lobster was flawed and the wrong idea. we even as you know, went out and solicited consents from shareholders for 57% of the shares outstanding to call a special meeting with the purpose of stopping the red lobster separation which is really, you know, 80% of the available shares considering the high retail vote. so what we've seen firsthand is that this board has proven that they do not want to listen to shareholders and for whatever reason, continue to make decisions that destroy shareholder value. >> they come out in a letter this morning, jeff, responding to you and say your assertions are based on incorrect and unrealistic analysis which is resulting in misleading

conclusions regarding the value associated with the red lobster business. they say we got $600 million, we have to pay taxes on that, but we were in the market, we knew, in fact, what we could get for the sale lease back, surveyed the market, did extraordinarily well for what is a declining business at this point, that has been dragging down the rest of darden and we're going to do better. what's your response? >> david, they've been saying that from the beginning. actually the transaction validates what we've been saying. so we came out early on and said that the real estate could be worth $4 billion or possibly more and the company's initial response to that was that we were way off base and the real estate didn't have that much value. and that -- and now they go and sell red lobster with the real estate with the sale leaseback transaction as part of it for $1.5 billion and if you use that valuation on the real estate at

darden it actually not only cup firms our $4 billion -- confirm our $4 billion for the real estate but would say the value of the real estate is more than $4 billion. so they've been saying things like that for a while without backing it up. again, as you know, we put out two 100-page slide decks with a lot of material and a lot of detail and all we've heard is rhetoric from the company that our information may not be accurate without really any detail behind it. as it relates to their sale and whether it's a good sale, it's not a good sale. the $1.5 billion for the real estate underlying red lobster was available to them any time they wanted. we knew it was available to them. it could have been done tax-free. so if you take away the $1.5 billion in tax-free or what could have been tax-free proceeds, and look at the net proceeds that shareholders are receiving in this transaction, $1.6 billion, they received $100 million for an iconic brand.

red lobster is known by just about every person in this country. >> although to be fair it is in decline and they say we held it any longer it would have reflected worsening sales trends, able to maximize value. we got a multiple of more than nine times. what's wrong with that? >> well, david, the multiple nine times again is misleading because most restaurants don't own their real estate. you to take the real estate out of that valuation, the $1.5 billion, and so on a gross basis they got $600 million compared to $115 million of after rent ebitda for red lobster which is at best five times. if you look at the net proceeds to darden which is what the board should have been evaluating, they received $100 million against an ebitda number which is pro forma for the rent expense of about $100 million. they sold it from a darden shareholder perspective at one

times. in other words, if they were to have gotten rid of the real estate, sold the real estate in a tax-free transaction and took it $1.5 billion and held on to red lobster, yes, it's been challenged, but they would have been able to receive $100 million just by opening it for one more year. >> why are you holding on here? there are plenty of opportunities when it comes to activism. you've had a good amount of success. i would assume given the amount of capital you have tied up here, that you have to think at some point, well, do i want to move on or do i want to double down? why are you actually doing the double down as opposed to saying all right, you know what, these guys, they're going their way, i'm going mine? >> yeah. you're right, david. i mean to some degree, this has been a little bit of a scorched earth campaign by the board, possibly in an attempt to get us to move on, which is what you're referring to. from our standpoint we still believe there's a lot of opportunity at darden and we

feel strongly that with a new board, that opportunity can be unlocked. just to give you numbers around that, pro forma for the sale, based on where the consensus shakes out, that darden is trading below its peers at 9.5 times ebitda, with importantly a 4.5% dividend yield. if the real estate separated the remaining real estate which the valuation has been confirmed by this transaction, the reals estate could be separated for possibly as much as $3 billion tax efficiently. >> you believe that could be done tax efficiently and tax-free. they push back big time on that. they say assuming a tax-free sale is not correct, not viable and not a real alternative. >> we know it can be done. we know there are parties out there that would be happy to work with the company and do it on a tax-free basis and how it can be structured and as you know, we put out 100-page slide deck on how you can handle the real estate. it can absolutely be done and after you you would do that,

then you're talking about a multiple that would be eight times pro forma that. if you spun out the specialty restaurant group you get down to a multiple that's 6.5 times and if god forbid you improve the operations of this business and get the operations to be in line with their peers where there's 250 to 300 basis points of operating margin improvement that's available and maybe even have the ability to turn around the top line of the business, but let's not even count turning around the top line of the business, you would be talking about a company that's trading at five times ebitda compared to their peers that are trading at over ten times ebitda. the opportunity is tremendous. but, it needs people involved in the company that are a, going to listen to their shareholders and b, provide good oversight for the company, c, understand how to operate restaurant businesses and how to operate them well. and, you know, there needs to be dramatic improvement at this company for the benefit of not only the shareholders frankly, david, but also for the employees. >> okay.

jeff, we got to leave it there. appreciate your being on with us this morning. we'll be following the coming fight over the board of directors at darden. jeff smith, ceo of starboard value. carl? >> all right. when we come back movie theaters want to lure you away from the netflix marathons on your couch. they're stepping up their games. offering luxury meals, waiters, in the dark. the ceo of i pick entertainment will join us live after the break. (mother vo) when i was pregnant ...i got lots of advice, but i needed information i could trust. unitedhealthcare's innovative, simple program helps moms stay on track with their doctors to get the right care and guidance. (anncr vo) that's health in numbers. unitedhealthcare. became big business overnight?

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take a look at the consumer discretionary sector. one of the best performing sectors today. dominic chu back at hq with more on the reason why. >> i peen you gu-- mean we all the reason why. the second best performing sector in the s&p 500 in a relatively flat trade. dollar tree, best buy, l brands along with lowe's and chipotle all leading the way higher. you can see there anywhere from

a half percent tonight 5% of the upside. dollar tree posting strong earnings saying comp store sales or sales that existing stores will stay strong into may. best buy is posting a quarterly profit on cost cuts and tax benefit and l brands posting better thatten expected quarterly results after last night. overall a good day for the retail side of things in some of these consumer discretionary stocks. back over to you. >> thank you so much. memorial day weekend almost upon us. the traditional start of hollywood summer movie season. but are the big budget blockbusters enough to lure people away from their in home netflix or amazon streaming accounts? in the past decade ticket admissions from v flattened, fewer buying tickets last year than in 2004 and now theaters are trying to change the trend offering dinners, drinks, night club type atmospheres to get people back into the box office. joining us this morning is the president and ceo of ipic entertainment. a chain of very high-end theaters. good to have you with us.

good morning. >> good morning. >> you know -- >> thanks for having me. >> part of the problem is television as a medium is where all the creative juices appear to be flowing the best, not in hollywood, not in studios. how do you leverage that? >> well, uknow, even though we have a really great product you can watch at home people still want to get out of the house. people allocate their entertainment dollars to what they're going to spend in the house and outside the house. we compete in the outside of the home entertainment segment. in order to do that, we realize that we have to create a true experience. i mean we're in the business of creating memorable experiences and our theaters from the moment you go on-line to buy your ticket all the way to the entrance to the pillows, blankets, comfort and conveniences that we offer, we compete with what you can get in your house as well as what you can get outside. >> i'm trying to think how you do this at scale. seems you're limited to maybe high-end urban markets with discretionary income. is that true? >> we're not actually. we have theaters in the suburbs of chicago and dallas.

you know, the decision of going out to the movies is primarily about a good night out. and the pricing variable pricing. we have prices in the middle of the week less expensive than the weekends and vary our price from market to market. what we charge in dallas or chicago than what we charge in south florida or l.a. market. it's all about -- go ahead. >> how much does it cost? just clear it up. how much does it cost versus your average movie theater ticket price to attend one of your movie experiences? >> sure. we have basically two type of seating in the auditorium. we have premium seats that are comfortable, large, 33 inch wide leather seats and we have premium plus seats. premium plus seats are seats that recline, you get pillow and blanket, servers come to you, bringing you food and drinks, martinis and the pricing is for our premium pricing which is the seats that don't have service at the table, very comparable to what you pay at a traditional

theater. they can range from 12 to $14. in the premium plus seats, our prices range anywhere from 18 to $24. but when you factor in what you spend in a movie theater in a traditional movie theater, say between the popcorn or when you go on-line to buy your ticket on-line, we're an all inclusive pricing. when we charge you $18 that includes -- we don't charge you extra for 3d glasses, free popcorn, no extra charge to buy your ticket on-line. when you add it up it's a value experience. >> sounds like a lot of expansion from new construction. is that the case? what does the commercial real estate picture look like for you right now? >> actually it's very favorable. we have 10 locations operating. we have six more locations opening before the end of next year. and we have another dozen sites behind it. real estate market is very active. in terms of, you know -- we're considered an anchor tenant. we draw the right kind of clientele if you want to call it

to any project that we go into. our demographic median age of our customer is 33 years old. and predominantly we range from 21 to 65 years old with d discretionary income. when it comes to picking and choosing who you want as an nker tenant that's going to bring 300 to 400,000 people to your center we rise to the top. >> we talk about netflix, maybe we need to talk more about you guys. time well tell. >> thanks for having me. >> the only thing i care about at movies. popcorn. >> what? >> i'm a fanatic. >> we have the best. >> to the nymex. breaking news on net gas inventories. >> good morning. we are waiting for the department of energy to release its number on weekly natural gas storage injections. the number is out, 106 billion cubic feet, more than analysts were expecting. we're watchings these prices right now. we were trading at 445, now down slightly 440 in that sort of range. but remember a couple things to

think about here. this numbers at 106 billion cubic feet is higher than what we saw last year at this time and higher than the five-year average. demand has been a little bit weak because temperatures have been mild. so the market is get a little bit of a chance to catch up here, but the next few weeks are going to be key. keep in mind that total storage for this time of year is still about a trillion cubic feet under where it is and has been in the last five years. traders will be watching these numbers closely. technicals driving this trade. back to you. >> thank you. with a story on natural gas. straight ahead on the show, more than 100 arrests have been made as thousands of protesters gather outside mcdonald's headquarters right now chicago. union officials promising the largest labor protest the company has ever faced. we'll take you there live 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. chinese e-commerce site jd.com is expected to start trading shortly. >> we were expecting it to have opened pretty soon around this time or at least to have an indicative price. while we aren't at that point just yet we're told orders are still coming in from clients of bank of america. the indicated price according to sources is $22 a share. that would be above the price where it did price last night. $19 a share, which was it itself

above the previously stated 16 to $18 per share range jd.com had expected to price. if it does open at $22, that would give the company a $30 billion market cap. that would also value the company at 2.6 times its 2013 revenues of 11.5 billion. that would make it more expensive than amazon on the same metric but less expensive than ebay. of course jd.com one of the marquee china e-commerce companies. it is not profitable, at least hasn't been in the last five years as it has been investing in its own delivery and fulfillment network, a la amazon. they have been trying to build that out in the more rural areas of china, trying to expand to 43 chinese regions to get a bigger footprint and compete against alibaba. we'll ask cfo sydney huang in an exclusive interview next hour. we are still waiting for jd to hope but hearing the price is indicated at $22 a share. back to you.

>> we'll continue to check back with you as we look for the he first trade. all ahead of the alibaba ipo. still ahead on "squawk on the street," want to know where the throwback thursday trend came from? we've got the answer for you and, of course, some great throwback pictures of the team here at "squawk on the street." that's all coming up later. we're back after a quick break. (vo) watching. waiting. for that moment, where right place meets right time. and when i find it- i go for it. (announcer) at scottrade, we share your passion for trading. that's why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so you're always connected, wherever you are.

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welcome back to "squawk on the street." check out what's happening with zale corp moving lower after iss came out in favor after a proposed sale to sig met. throwing cold water on a higher big. zale had traded above $21 a share in terms of its bid on part of the 9.5% stake that holder tig had. tig urged shareholders to reject the deal. zail down 3%. for sig net it's higher.

may not have to buy it pofor mo than it wants to. >> mcdonald's set to face criticism as protester target the shareholder meeting today. hampton pearson is live there with the late pestp good morning, hampton. >> how are you doing, carl? make no mistake about it, the mcdonald's board of directors and chairman don thompson cannot be loving what's going on here at its headquarters over the last couple days. the annual shareholders meeting frankly has generated a not so happy meal of protests both inside and outside today's meeting. >> today, about 300 protesters recruited nationwide were targeting mcdonald's as part of a campaign for a $15 an hour minimum wage and organizers from several labor unions say the long-term goal is to unionize fast food workers nationwide.

the crowd today was about half of wednesday's, nearly 1,000 protesters, when there was about 100 arrests for protesting. as far as what went on inside the shareholder meeting you had a vocal minority pressing the top leadership at mcdonald's over the health of its food, at one point accusing the corporation and the leadership of basically putting profits before people. chairman don thompson had a partial response to some of that rhetor rhetoric. >> as a parent the other thing that i sometimes hear, you guys are predatory towards certain individuals. as a parent we wouldn't do that. not only that, but we are people. we do have values at mcdonald's. all of us are parents. >> now for the record, all of the board of directors were re-elected with about a 96% margin and shareholders overwhelmingly voted on an advisory proposal concerning executive pay.

the chairman got $9.5 million in salary in 2013. back to you. >> all right. hampton pearson, thanks very much, live outside mcdonald's headquarters for what has become a chaotic shareholders meeting. coming up, it's for your car. the auto rental start up cuts out the middle man and lets you rent from the people around you, run by the co-founder of zipcar and speaking to the ceo of buzz car after the break. financial noise financial noise financial noise

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could mean less waiting for things like security backups and file downloads you'd take that test, right? well, what are you waiting for? you could literally be done with the test by now. 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. let's get to the cme and check in with rick santelli. hey, rick. >> good morning, carl. i would like to welcome my special guest senator david vitter. thank you for taking the time to join the santelli exchange this morning, senator. >> thank you, rick. thanks for the invite. >> well, listen, i guess the best way to start is, i've been following housing for a while and doing business as a broker in the '80s when the notion of implicit versus explicit government guarantees on freddie and fannie, people in the marketplace understood that if anything ever unraveled the government would step in. >> right. >> i don't think much has changed. so now mel watts takes over for

ed dimarco and it certainly doesn't seem to me like we're shrinking or acting as though the gses are in conservatorship. i know you didn't vote to put him in this office at fhfa but he is. so now tell me, sir, if there is no reform any time soon, even though there's been several votes to get the process moving, how much control does mel watt have over expanding the gses, kind of putting them in a similar mode as they were in before the credit crisis? >> well, first of all, i don't think anyone should think that there isn't a demand on capitol hill for major gse reform. there is. bill passed out of committee recently. i couldn't support it because some of the significant details, but there is a broader consensus for gse reform and nobody should think that the gses are just going to be left as is, status quo for years and years. however, until we do that,

you're certainly right. mel watt does have a lot of leeway, too much leeway in my mind, and unfortunately he's not moving forward with the sort of reduction of loan limits and reduction of footprint that fhfa was talking about before his appointment. >> you know, senator, i really understand and i have great respect for your comments that there is an appetite for reform. there's an appetite for corporate tax reform, an an tight for -- >> you're right. >> general tax reform. >> got to get done. >> yeah. i mean i don't know. i think, you know, there's obviously an appetite if i'm hungry in the middle of a desert but no way to satisfy that appetite. in the interim period what i'm most concerned about is, while there is hope for reform, mel watt has the reigns, the horses on the move right now. >> right. >> i want to know, should he move and continue to put the gseness play, you know, for more 3% down payment, what recourse do you and the senate or the house have? >> well, if he starts moving

aggressively more aggressively in that direction, he will absolutely spur a reaction. i can guarantee you that. he's been -- >> what would that reaction be? >> he's been sending mixed messages so far. he hasn't done what i would like in terms of reducing loan limits at fhfa the way they talk about or reducing the footprint of the gses but he hasn't been all-in in the other direction either. if he starts going aggressively in that other direction, i think it would absolutely spur bipartisan reaction and action on capitol hill. >> all right. there was recently a vote for silvia burrell to replace sebelius at hhs. i know you weren't one of the senators that was into putting her into this role, but it certainly seems like it's going to happen. now that the bar is 50 votes versus 60. for the final 30 seconds, what is your issue with miss burwell and do you think that ultimately

it doesn't matter that she's going to end up being head of hhs? >> well, i think all those obama care calls are being made out of the white house. however, this is an important instance that we need to further that debate and she certainly had a role and should have stopped the administration from making the pledge that if you like your health care plan you can keep it. that was said dozens, hundreds of times. it was never true. and omb was supposed to be involved in checking out that sort of promise. >> senator, our time is up, but i've always said about trying to handicap legislation, garbage in, garbage out. it's impossible to know the true issues of finance down the road, whether it's a foiled rollout, potential bailouts for insurance companies, thank you for taking time this morning. >> thank you very much. >> thanks very much, rick santelli. want to get over to brian sullivan at hq with breaking news on the sec. >> you know most sec cases are pretty serious. i'm going to try to do this with

a straight face. the sec has settled with glen cohen, a former director of the vitamin company ntby. according to the sec cohen allegedly found out carl isle w. what did he do? he told his three brothers and one of his brothers' girlfriends about the purchase. they apparently allegedly bought stock and, of course, were quickly caught. so the s.e.c. has settled with glenn cohen and the other family members. they discorged any profits. i tell you this, kids, if your friends or family members are on the board of a company and they tell you they're getting bought out by a private equity, don't buy the stock. that's my legal lesson for today, and that, sarah, is one to grow on. >> thank you very much, brian sullivan with breaking news and even some advice. with ride sharing and chauffeuring start-ups like uber, lyft and side car making

cost-cutting and gouging services, let's look at what the future of commuting could look like. robin chase with us, the co-founder and former ceo of zip car, the former ceo of buzz car. peer-to-peer shared cars. it's only in france, correct? >> yes. >> what's the idea? how is it different from zip car? >> with zip car, the company owns their own cars. with buzz car, the companies we use are individuals' cars. and it transforms the economics of the situation, because zip car will only place cars where it can get a return on the asset because it has to buy the whole car. with buzz car, we're using existing assets that have been paid for, so if you rent your own car out once a year, great. if you rent it out three times a week, better yet. you don't have to get a return on the entire asset. >> how has the reception been in france? you have any plans to move it to the u.s.? >> so buzzcar is three years old now in france. we have 8,000 cars being used by about 80,000 people across the country.

it's doing well. as to whether we want to move into the u.s., i'm still eyeing it. insurance is a serious issue and i take it seriously. >> i was going to ask you about the liability and how that changes everything when the car is owned by someone other than the company itself. >> it does change everything. that's actually the reason i launched in france, because i could get the kind of insurance i wanted. here in the u.s., particularly new york state, they're very stringent, appropriately so. we've been working hard to get the right kind of insurance here. the issues -- the issues are not only the person driving the car, the liability for them, but for the car -- the car itself, and will that person lose their underlying insurance if there's an accident. and right now, with your own personal insurance, it's illegal to accept money driving your -- with someone on your own car. if we think about the past economy versus the future economy, in the past, we've separated clearly personal things from private things and

commercial use versus private use. there's a lot more gray area with the sharing economy. >> i drive my car to the airport, leave it at the airport, somebody getting off a plane, they could conceivably use my car for the week i'm gone? >> there's a start upcalled flight car. exactly. i haven't looked into their insurance. in california, the state changed its laws to accommodate this type of use, and other states -- so california, oregon, washington changed the laws, but new york has not changed its laws. but as i say, the key piece is will that person lose their underlying car insurance? and you have to protect tell. >> it reminds me of airbnb, with the legalities and now the users turning over some of the information to new york attorney general eric schneiderman. i wonder what you think of that and the fact that lawmakers are increasingly zeroing in on the shared companies? >> i was just talking to the driver of the person who brought me over. and if we think about the rules that have been established in

new york city around housing and the rules that we have established for the taxi licensing, a lot of those are good rules, and a lot of them are really dumb rules, because they were established, you know, pre-smartphones, pre being able to do small transactions, and when i look at uber, there are some rules we're protecting that are dumb and we should get rid of them. and there's other rules that serve a real purpose. so as we go forward and try to unpack this, let's do it without a clean yes-or-no, we have to rethink each of those things. >> all right. if you're a regulator, it's like trying to jump on a moving train, the way technology is moving. >> it is. >> uber has changed my life. the founder of buzzcar. when we come back, colorado holding a cannabis convention, of course, and there's only one person we'd send to cover that. jane wells. jane? >> carl, pot entrepreneurs are learning best practices at the

cannabis summit, and, boy, if you have a gun, you better get rid of it, they're told. who's being challenged by the rules and who's making a killing because of it? we'll have that after the break. mine was earned in korea in 1953.

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let's share the news tomorrow. today we failrly busy. tomorrow we're booked solid. we close on the house tomorrow. i want one of these opened up. because tomorow we go live... it's a day full of promise. and often, that day arrives by train. big day today? even bigger one tomorrow. when csx trains move forward, so does the rest of the economy. csx. how tomorrow moves.

it turns out it's been six months since marijuana was legalized in colorado. how is the pot retail business working out? jane wells is live in denver with more on the cannabis convention. >> reporter: it's been since january since the actual pot retail stores opened. you know, they collected $8 million in recreation at pot taxes in just four months. but it remains a work-in-progress, as marijuana goes mainstream. for example, edibles, pot brownies, have become very popular. people weren't sure how much thc they should ingest, and in a few cases, it has led to tragic results, like a young man who leapt to his death after eating six types the recommended dose. so they're coming up with rules to limit it to 10 milligrams per service, and this will require jamie lewis to make over her product line. >> it's costing us more money to create different packaging. we'll have to redesign the

products we currently have so we can score them in 10 milligrams. we make really small products, so we'll have to redesign and figure out how we'll change that product to make it maneuver through the new scoring process that they're talking about. >> reporter: now, new regulations means business is booming at can labs, a state-certified testing facility. revenues used to be about five grand a month. this year, they expect to do $1 million, but found eer jennir murray says it hasn't been easy. >> when we first started, it took about ten calls to get a waste removal company, first of all. which is amazing. they'll throw away radioactive stuff, but god forbid if you throw away marijuana. so that was interesting. and then, we have been told by other scientific companies that they will not deal with people in the marijuana industry, which shame on them, it's going to be $1 billion industry. >> reporter: guys, what she says the state needs is an

independent company to certify labs like hers to give them credibility, because unlike other industries, she can't go out and get a dea license for her lab, because pot is still federally illegal. back to you. >> fascinating. jane wells with the update on the retail pot business. that's it for me, carl. back over to you for "squawk alley." good morning. 8:00 a.m. at the facebook shareholder meeting in california, 11:00 a.m. here on the east coast. we're waiting for jd.com to open at the nasdaq and "squawk alley" is live. ♪ ♪ everywhere you look ♪ there's a heart a hand to hold onto ♪ ♪ everywhere you look everywhere you look ♪