good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen. andrew is off today. our top market story is a revision to first quarter gdp. forecasters are expecting the data to show the economy shrank for the first time in three years. polled economists are calling for a contraction of 0.6%. we also have weekly jobless claims and pending home sales. as joe mentioned, it is corporate news. it's official, apple is buying beats for $3 billion. analysts say apple is try to catch up in the fast-growing business of music streaming. we'll have more on this story from jon fortt at the code conference in just a few minutes. we've been waiting on this one. the video from dr. dre himself already out there. there are rumors it was maybe

falling apart. >> we heard from andrew that apple was none too happy about that video. >> i bet. i bet. >> it was 3.2 is what it was supposed to be. >> $200 million. >> $200 million for saying that. you get fined for talking. what i like about the deal is that everyone hates the deal. >> $3 billion for apple. >> they're streaming, they're hip. >> reconnect and restart the hipness of their music business. which is what both of those guys can bring to apple. >> right. >> in hindsight -- >> i don't understand why it's such a big deal, especially when you have whatsapp out there for $19 billion. >> we overlook other things and then 3 billion -- maybe because

they look cheap. >> apple has always invented itself but tim cook pointed out himself, that's not the case. we've made 17 acquisitions over the last couple of years. >> we've had, you know, i don't know whether cheap is a good thing or not. each of my kids has had two or three pairs of these. >> we're still on our first pair for each of them. >> you are? >> yes. >> they want this pair for whatever reason. >> they've held on to them since christmas. >> they break. they're plastic. constantly putting batteries in one of the sides. they have batteries that go in the ear piece. >> that's why they're so big. >> we'll see. it's not a lot of money for apple. nobody likes it, they think they should have bought spotify or pandora. >> that's a good way to invest and go through life. >> i agree. cost costco, the warehouse club operators earnings missed wall street's mark. they got hurt by an increase in merchandise cost and other

expenses. we will talk more about costco and the consumer in the next hour. we have jan kniffen who will be joining us to talk about it. an engineer that worked on the ignition switch, say he had forgotten ordering a change to the switch within he testified in a deposition last year. >> what? >> "the new york times" reports that the engineer made the most recent comment to congressional investigators. is he not said to have suggested that mary barra knew about the defective switch before she took over at the helm of gm early this year. i honestly don't know if that's a tall tale or not. think about what goes into making a car. there's a lot of switches. i forgot a made a change to the switch. if he made the switch in relation to what looked like a safety issue, you'd probably remember making the switch. >> it's been a long time. i guess you would go through

some of those things. if you were definitive in your earlier testimony, that's where you can get in trouble. and bill ackman is reportedly trying to raise billions of dollars for a closed-end fund. the fund could list on the london stock exchange as soon as this summer. that moves let's him raise money not subject to redemption requests. i used to sell these things. they trade on -- they don't trade based on that asset value. they trade based on supply and demand. we had something that was hot. marty came up with a closed-end fund. it can go up or down. >> it's animal spirits, what somebody else will pay for your portion. >> the net asset value may move one way or another. it's not like a mutual fund. it's priced on nav every day. this trades in the marketplace.

>> like a stock. >> like a stock. yes, like a stock. it can double or go down 50% and not necessarily based on the underlying -- >> ackman is interesting. he's tried some very innovative techniques. you said you've done this before but this is -- between this and what he's doing with valeant are some different ways of operating as an activist. >> he's a smart guy. that's for sure. he's always business. >> he is. carl icahn gave him props for what he did with valeant, too. saying this is a new way for activists to start looking at things. let's check on the markets. yesterday, the stock market closed lower, breaking a four-day winning streak. this morning, futures are indicated higher. even though the markets eventually closed lower, the s&p did hit another record intraday high. you can see right now, the dow futures are indicated to open up by 30 points. as joe mentioned, first we'll take a look at oil and we'll see the ten-year. oil is up by about 14 cents to 102.86. the ten-year note is going to be

worth paying attention to. >> 2.42. >> anybody who thought the decline was over for yields, now can now see 2.425. >> if you were in a time capsule, put the yield is 2.42 and the gdp was showing a contraction of the economy, it would make sense. the only reason we think it's crazy is because -- it's based on what's supposed to happen. you're saying that shouldn't be there based on 3% or 4% for the rest of the year. >> there have been plenty of people that argue this is an anomaly, this is because the fed is still buying so much of what's available because there are so many concerns about foreign markets and this is the one safe place you can park money. >> i have a bigger macro view now based on some of the stuff. also, think of the banks that are trying to get a steeper yield curve to make money. we done the know yet about all

the ancillary effects of qe. one of them seems to be that things aren't trading. there's no volatility. there's so much money that it almost has put a lid on volatility so people who make a living trade be and with volatility, they're down 25% based on this. where would things be? what would the volatility be reflected as that we're not seeing right now? i don't know. >> will the volatility be at the end of this year, too? >> would it have been down? would we have a 10% correction if it wasn't for the fed? would we be all over the place? look at gold. i don't know what it did today. i saw it yesterday. gold seemed to be indicating that things weren't rip roaring. today was below 1300 yesterday. 1.253. look at that move in the last three months. it's been straight down. >> there have been plenty of anomalies. >> either they're anomalies --

>> or it's indicating -- >> or the economists are not right about whether things will uptick. >> i think it's hard to argue in this quarter at least you're not going so see a massive snap back from what we saw in the first quarter which we're still trying to figure out. >> most of the numbers are pretty good, i guess. global goods, all that stuff. let's take a broader look at the global markets right now. julia, good morning. >> good morning. to joe's line about things aren't trading. it's been a sleepy day here in europe so far. evenly split between the gainers and the losers here. the symptom 600 says it all right now, relatively unchanged. we have a few markets out. they are open but investors certainly taking that opportunity to have a day off. let me show you the individual performances. what we are seeing is a bit of m&a activity, the potential lifting, the ftse 100. i also want to point out the

ftse mib has gained over 4% on back of strong election result. they issued five and ten-year debt. the positive sentiment as far as the italian markets here continues. what we are focusing on again today is glaxo smithkline, up right now around 0.7%. the it latest news, sales people saying the company aren't going to reimburse them for brabs they were ordered to pay their superiors. the report coming after news that chinese officials have accused that uk pharmacy of operating a massive bribery network. we know here in the uk, the britain's office is looking into this scandal. guys, on that note, i'll hand back to you. >> okay. we'll have your buddy nigel on later today. did you know that, julia? >> yes, i did. i was talking to michelle this morning. can't wait to see the face-off

between nigel farage and michelle. >> i don't know whether -- we don't have a lot problems with him. i think the euros have a lot of problems. we'll see. we've had this guy on before. he was refreshing. i enjoyed having him on. this should be interesting. >> he's a closet american. he's a closet american. he's very -- >> exactly. exactly. >> he's very american in his approach. >> that's what i'm talking about. did i say refreshing? others might call it ugly. >> maybe. >> 27.5% is -- that will get your attention, which is weird the way you vote over there. no one gets 50%. the idea that someone could get 50%. 27.5% is like a majority in europe. >> this is true. >> i love running a continent like that. out of the code conference in california where jon fortt joins us with the big tech headlines,

including apple finalizing its deal for beats. john, you didn't like this deal either, i don't think, you and andrew and everybody else. i defer to them. i'm not running apple. you just wish they would have invented it themselves. is that where it leaves a bad taste in your mouth? what's the problem. >> by no means is it everybody. i talked to a lot of people at the code conference about this deal. from the moment apple announced it, a number of people willing to give them the benefit of the doubt because of the enormous success they've had, certainly in music. eddy cue and jimmy iovine wouldn't take questions from the audience but took questions from kara swisher and others about this deal, talking about this event. listen to eddy cue right here. >> we just looked at this as, this is a great opportunity for us to partner and do some great

things with beats. we'll make incredible products together. we've bought 27 companies and we'll also keep looking. if we see an opportunity, we'll certainly strike. >> now, walt mossberg pressed eddy cue on a number of issues. eddy cue said they've got the best product pipeline he's seen in 25 years. and walt said, wait a minute, including the iphone, the ipad, et cetera? eddy cue said, yes, i believe it's the best. i'm sure you'll tell us. jimmy iovine also had a lot of criticism of the current streaming market, compared to what beats will be able to do with its curation. listen to that. >> the model isn't right yet. it's not hot enough yet. it's not satisfying enough. we're in america. spotify should have 10 million people in america. not worldwide. >> not worldwide. but in america. now, listen, the contrast

between these two guys was evident to a number of people. jimmy iovine, depth of experience in the music industry, huge. he certainly could bring a lot of firepower to apple when it coulds to negotiating content deals, he and dr. dre will report up to phil schiller and eddy cue within the organization. they won't be at senior vice president level but it's going to be an interesting cultural clash. look, a number of people here who were skeptical about the deal came away from this conversation even more skeptical on the deal. but the people who believed in it continued to believe in it. one thing is for certain, jimmy iovine is irrepressible. he's going to be an asset to apple but also could be a challenge to control. he was very outspoken on a number of issues and wanted to step back and say i'm at apple now, i can't say anything. but he mounted a spirited defense of this acquisition, certainly $3 billion, not a lot of money for apple. i think in the future we will judge the acquisition this way.

if apple makes big content deals they haven't been able to put together up to this point, it will be seen as a success. if they figure out the brand issues and apple continues to innovate and they retain these executives, it will be seen as a success. on the other hand, if they don't manage to keep the brand loyalty of both of these brands and figure out how to communicate that to people, people will look back and say maybe it made sense on a money front but in terms of apple's focus, this was a liability. >> isn't there anything in it that says they have to keep them around for a number of years? are there contingencies in the deal. >> i should say i don't know. i haven't seen the paperwork on this deal. they didn't say there's anything that says they have to stick around for a number of years. iovine did say, i retired from the record business.

i'm working for apple. we're going to try to make this technology thing and content thing come together in a way they haven't before. the $3 billion, apple doesn't need a head phone business. they don't need to add $1 billion a year worth of accessories revenue. just based on what they do on the iphone and ipad, there are other ways they could get that. the asset really here is the people. that's a lot of what they talked about up there, too. the people. dre and iovine, if they can't hold on to them and the bench they havality apple right now, people will question it. >> listen to those names, dr. dre, eddy cue, jimmy iovine. it reignites the coolness. you have all these journalists. i'm not one. i play one on tv. i really don't like the whole industry. all these guys at apple are

doing, you have skeptics writing. who are you going to believe? >> you have cheerleaders for this deal. you have skeptics on this deal. >> i would defer to them. >> i'm not saying you, joe. >> it hasn't looked at the detail. like i said, let's give it a shot, see what happens. the music business was starting to decline a little bit. >> it's going to be a management challenge. one of the things tim cook is doing is bringing in heavy hitters with big personalities, with big track records and he's got to be able to manage them all and make the whole bigger than the sum of its products. that's what great ceos do. we'll see if he can pull it off. >> thank you. let's talk more about apple's acquisition of beats. joining us on set is jonathan gellar, from ver.com. gentlemen, thank you for coming in today. jonathan, you were a little

skeptical of dr. dre in this whole thing. you do think iovine is important? >> i think jimmy iovine is the best music executive in the world. i think for them to get apple is a huge, huge coup. i think $3 billion is expensive for one person. we don't know a retention type of deal. i don't think dre will do much. if there's anything cool in this deal, it's dr. dre. it's not even the beats brand. it's a great brand but dre can add extra cool. he's not going to do much at apple. >> do you think it's a good deal or not? >> for $3 billion, i think it's a fine deal. they have an amazing executive that can help them with the barrier between silicon valley and hollywood and help music initiatives. >> tom, what do you think? >> i think there are more positives than negatives. the company can easily sell more high margin accessories through its distribution.

what gets me excited is is this an indication by apple that they're willing to make larger scale transactions. i say apple should have made other acquisitions. now that they've done this $3 billion deal, are more larger scale transactions in their future. >> the reason they're not making the deals also is because of the integrati integration. apple has never bought a really big existing brand. but when you look at jimmy and look at the team he's built, i think the music culture lends itself to being easily integrated. >> what do they need in their product lineup? what has to come next? >> i'm not sure what has to come. i think what people want is a bigger phone. that's obvious. especially in asia. that's a huge thing for apple. the company just needs to let us see what it's been working on. i really think we're going to do it this year. they are going to kick off an amazing year for them. >> what you're talking about

with a bigger phone is these are just very slow, sort of changes to the existing things that are out there. do you think -- >> you mean a bigger screen, don't you? >> a bigger screen. i thought you were asking if he meant bigger. >> like the samsung. >> like half an inch bigger. >> that's what people want, a little better. >> that's an incremental change. >> do you need that? do you need something like that or is it fine to have incremental changes? >> apple is about incremental changes until there isn't one, until there isn't another category. they have a great iphone business, they have a great ipad business. do i think we'll see a new category? >> yes, in the near future. >> is it apple television?

>> apple needs to make sure they're going to be relevant in the future. the question is in the future, is the smartphone or the tablet going to remain the hub of the operation? if it's device to device, it could be android. apple needs new products to remain relevant for the future. >> is jon fortt still with us? >> you're tom forte? >> yes. >> and he's jon fortt. very close. >> are you sure it's forte? >> yes, i'm sure. >> what do you do with the stock at this point? >> i'm a buyer. >> do you have a price target. >> yes, as of last night it was $650. >> you like what you've seen. you think it will continue to climb. i know that's not the area you play in but what have you thought about the ups and downs we've seen? >> i think this year will be big just with the new announcements. investors are seeing things they've wanted to seep this they're starting to spend their money.

there's pent up demand for these new devices. i think it's incredibly positive. >> apple has stayed at half a trillion dollars longer than any other company. how long was cisco there? not that long. microsoft, not that long. apple, 537, 510. you need to keep doing things. someday there will be a trillion dollar company. >> only a couple have been a half trillion. apple has been there since 2012. >> a couple years. guys, thank you very much. >> no small feat for a gadgetmaker which was a $9 billion stock.

emilio was running it. >> yes. >> john sculley. >> that was their largest acquisition when they bought jobs back with next. >> didn't they have a crappy tablet the first time around, too? what was that called? newton. was that apple? >> yes, that was april. >> microsoft had a tablet early on, too. >> newton was that one -- it was in the '90s? >> microsoft had a tablet in the '90s, too. a chinese money market fund that started ten months ago is larger than all but three of its american counterparts. the blackhawks forced a sixth game. the nhl's western conference beat the kings in 5-4 last night in double overtime. tonight, let's see if the rangers can -- king henrik, what happened? sometimes i think these teams --

i thought miami was going to win. this makes it interesting. the pacers are still alive somehow in the nba eastern conference final. 93-90 in the win over miami last night. a bad night for lebron. he was plagued with foul trouble. he shot 2 for 10 in 24 minutes. >> a three-pointer. won't go. rebound. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.

an interesting story on the

cover of institutional investor. the rise of alibaba's money market fund, the fund has $90 billion in assets and it boasts 81 million investors. that's more than the combined total of all other chinese asset managers. that's especially impressive since the fund launched in june of last year. that makes it the fastest growing mutual fund much all time anywhere. vanguard, fidelity and jpmorgan have larger money market funds. for more on the explosive rise of this alibaba fund go to cnbc.com. and in an unusual move for a major corporation, google releasing its work force demographics. the company is disclosing it has a significantly below proportion of minorities and women employees and saying it is, in its words, miles from where we want to be. blacks and hispanics made up 2% and 3% of google's employees respectively and women accounted for 30%. >> they said in the past they've never released these demographics but they said, as

you mentioned, miles from where they want to be and the first step is to address it by getting the numbers out there and trying to go after it. it's tough when you're looking at engineering. there haven't been a huge number of engineers that have gone out there. although those numbers are starting to change, too. based on who is in college for these things. >> i'm afraid of where you're going with the engineering thing and women. >> it's been a huge struggle. when in elementary school and middle school, girls are just as good as boys in these things. there's a switch that take place in high school. we can't quite figure out why that is. >> i'll let you do the talking. you seem a little bossy today. >> i can't believe you actually said that. >> kidding, kidding, kidding. >> i hate that word. >> i'm with cheryl. i banned it. i've banned it. two female dogs, a daughter and

a wife who, you know, is in charge. but i can't say boss. coming up, a british politician shaking up europe but edward snowden speaks out in his first american tv interview. first as we head to break, a look at yesterday's winners and losers. if i told you that a free ten-second test 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.

welcome back to "squawk box." in global news, europe in shock at the results of the most recent continent wide elections, anti-european union parties did phenomenally well. that raises questions about the stability of the eu. joining us now from london, wow, that's weird, i just saw her yesterday. that may be a green screen behind her. our international correspondent michelle caruso-cabrera. she's with one of the politicians who's shaking things up. earlier, julia, our person in london said, well, yeah, you're describing nigel farage. he's kind of american. it just occurred to me, we've shown them for a couple hundred years that welfare capitalism really isn't that great. they've seen the results. should it be a surprise they're finally coming around? why is it shocking? >> that's a great point, joe.

let's ask nigel farage, been a guest on "squawk box" before. good to have you. -- from "the new york times" where politicians here in the uk are trying to recalibrate their positions to deal with the threat of the leader of the uk, nigel farage. that's you. why do you think you did so well and why do you think people are surprised that you did so well? >> 40 years ago we have an establishment that decided the future of this country would be part of a project in europe. what's happening is the united states of europe is being built without the consent of anybody. and really, we've come along and said, hey, hang on. we want to trade with europe. we want to cooperate with europe. we want to be good next door neighbors. but we do not want 75% of our laws made somewhere else. and this magnificent building

behind us effectively turned into a museum of democracy. >> this is the parliament? >> yes. >> they don't do anything? >> very little. very little. most of our laws that affect our businesses and our ability to trade globally are not made in this country, they're made somewhere else. what we've done, we've stood up and said what many people think. >> here's the one thing, though, that we've noticed about the european union and in the united states, it strikes us as andy democr -- anti-democratic. france, right wing, andy eu, i'm not sure brussels is going to care or if there's going to be any changes out of them. >> little story for you yesterday morning, half past 11:00, i attended a meeting called the conference of presidents, the leaders of all the european political parties, the greens, the liberals, the social democrats. we sat in this room, the president of the european parliament called the meeting to order and they proceeded as if nothing had happened.

they're pushing on to choose the next commission president. that will be chosen over the next couple of months. that is the most powerful guy in the european union, not elected by anybody. paid more than president obama with enormous power. i saw it yesterday. i have decided to try and ignore the result. >> you're proving my point. is anything going to change? they've ignored votes against the constitution. they keep going regardless of voices in the population. >> they are fanatics, euro fanatics. they determine the flag and the anthem should become a flag and anthem. they will ignore it, continue with the project and that means that the opposition votes that you've seen, the other day, remember as you said, it was left wing in greece. left wing actually in italy. it's across the spectrum. i think the euro skepticism will grow. >> joe? >> great to have you on again. i don't know if i can call you nigel.

>> of course now can. >> i felt like we became friends. nigel, something that occurred to me is how fickle electorates are in this country and in europe. i go back to the thatcher days. i thought things turned around. i go back to the revisionist history. i wonder how long you think you have where you'll be in the sweet spot of public opinion and whether it's going to be long enough to do anything useful. >> well, i think you're right. i'm a realist. windows of opportunity in life are always a bit narrower and shorter than any of us would like. i reckon, i reckon realistically, you know, we've got, i've got a couple of years to fundamentally change british politics. what happened on sunday night with the result here with us beating the labor party and the conservative party and coming first across the united kingdom is genuinely an earthquake in british politics.

if we can keep that momentum going, bring this to a referendum and let the british people decide should we govern ourselves or be governed for the bureaucrats of brussels, i think if we can get it to that point, we will win. when we do that, we won't just get back our independence, democracy and freedom but the rest of europe will follow us, too. please, anyone watching this, i'm not anti-european. i'm married to a european. i love europe. it's a great place but it's a better place if we have independent, democratic sovereign states. >> let me ask you this. one of the things you are dogged by here, that you're a racist. continuously people say i believe in a lot of his policies but ultimately i think he's a racist. >> we've been going as a party for nearly two decades. until three months ago, nobody called us racist. it's only when we started to challenge the establishment that they decided to club together and throw this term of abuse at us. >> there have been statements, how would you feel if romanians -- >> hang on.

hang on. let me be clear. i haven't got a problem with romanians but i have a massive problem with romania. can you imagine if a known organized criminal gang got off the plane at jfk airport and tried to get in your country? of course not. american immigration would stop them. the problem we've got is some of the post-communist countries have not made the transition to full western democracy. they have their own minorities that have discriminated against in a way that is truly shocking when you see it, organized criminal gangs have countries like romania in their grip. we as members of the eu, cannot stop known criminal gangs at the border from coming into britain. that's all i'm saying. >> joe? >> nigel, i want to quickly talk about another hot button issue. michelle gave me a heads up on this. we are, in this country, on a daily basis having a discussion about guns and about how to regulate guns and i know that in the uk, this is what i've been

told. this probably is a cliche and a stereotype. i'm told that burglaries are on the rise in the uk because burglars know there's absolutely -- nobody is going to have a gun that can stop them. so that's what i hear from pro-gun people here. i don't know whether that is true or not. do you want to reintroduce handguns in the uk? is that something you want to do? >> well, i mann, our gun culture in britain is very, very different to yours. we've always had a licensing system. even to have a 12-bore shotgun, you have to have a licensing system. you have to have a cabinet and the key is kept in a separate part of the house. in the wake of the massacre in britain a few years ago, there was a total gun on all handguns. even if you went through a registration process, no, that didn't matter. i founded it odd that the british olympic team weren't even allowed to practice in this country.

they had to cross the channel to france to practice. if gun clubs, registered, safe gun clubs were actually allowed to hold pistols and allow us to practice, that would make sense. you would have thought from the reaction i got from the uk establishment i said something truly dreadful. >> let me just ask one more thing, michelle. i could keep nigel for a while. we have well-known economists that attribute the slow growth in the eurozone to currency problems, that the euro didn't work. paul krugman, for example, that it has nothing to do with the -- with what i would refer to as welfare capitalism and the amount -- he even said that 50% of gdp being spent by the government is not unreasonable. do you attribute the overall malaise in the continent to a different political style? would you like to separate uk even further from that type of

government? >> what you've got to understand, the european union is built on what is called the social market model. now, in theory, it's wonderful. it means none of us have to work too hard. we can all have huge holidays and isn't life wonderful? the economic facts of life don't bear it up. that is part of the problem. for the southern europe, mediterranean states, they're trapped inside a currency that is massively overvalued. they have youth unemployment rates approaching 60% and they're going to a downward deflationary spiral. there are two other problems i would highlight. one is we have a regulatory regime in terms of employment law, health and safety at work which make us uncompetitive and lastly, the european union, my country being part of it have gone head long for a wind energy program that's put nearly 20% on the electricity bills of britain's manufacturing industries and we wonder why they're all closing down and relocating to india.

you guys, at the same time, have gone for shale. your gas prices are only about 40% of what our gas prices are. and at the same time, in india, and in china, they're mining coal and burning coal on a scale that none of us can even believe. we've actually made ourselves uncompetitive through, yes, the state controls too much of the economy but we've given ourselves expensive energy and too many rules and regulations. >> sir, just a quick question for you. early today someone described you as being very american. how do you feel about that? >> well, i don't know about that. i thought i was rather english. perhaps the reason people say that is that i'm not frightened to say what i think. i think that democracy should be a vibrant process whereby people engage and agree to disagree and let the public make their mind up. what's happened to politics in britain in europe is bit by bit we've transferred control of our country to foreign bureaucrats.

it's left us with fewer things to talk about. we finished up in britain with three parties who, frankly, all resemble social democrats. they look the same, they sound the same. you can't put a -- >> there he is. >> if what i've done is to reinvigorate politics and give it a little bit more debate. if that means my style is american, you know what, so be it. >> michelle, i remember the first time he was on, we thought he was like kind of idiosyncratic. he has to be surprised, 27.5%. it vaulted him into the mainstream. is he ready? do you think he's ready for prime time here, michelle? >> are you ready? let's point out, you actually don't have a seat in this parliament. >> no. >> your party hasn't gotten enough votes. do you think that will ever happen? if somebody were worried you'd be the ralph nader of the uk, you'd end up dividing the conservatives that actually you

have labor -- >> this say big misunderstanding. if you look at the results that came out on sunday night, many parts north of england, old labor areas we top the polls. we're drawing our support from across the spectrum. we get conservative support, lib dem support. one in five of our voters are folks that haven't voted in 20 years for anybody. what we'll do in the general election next year, we'll target our constituents and we will get a good number of mps across the road into that chamber. if we get enough of them, there will be a referendum on britain's future in the european union. i think we can do it. >> mr. farage, thank you so much for joining us here in london. >> thank you. >> guys, back to you. >> thank you both. >> we got in early on that. yes. we built a relationship early. it's great to have him on today. >> we appreciate it. thank you, michelle. within we come back on "squawk box," edward snowden, is he or isn't he a spy?

we'll have more of his revealing conversation with nbc's brian williams, still ahead. aah! [ female announcer ] the complete balanced nutrition of great-tasting ensure. 24 vitamins and minerals, antioxidants, and 9 grams of protein. [ bottle ] ensure®. nutrition in charge™. [ bottle ] ensure®. ♪ here's a good one seattle... what did geico say to the mariner? we could save you a boatload! ♪ foghorn sounds loudly ♪ what's seattle's favorite noise? the puget sound! ♪ foghorn sounds loudly ♪ all right, never mind doesn't matter. this is a classic. what does an alien seamstress sew with? a space needle! ♪ foghorn sounds loudly continuously ♪ oh come off it captain! geico. fifteen minutes could save you fifteen percent or more on car insurance.

♪ ♪fame, makes a man take things over♪ ♪fame, lets him loose, hard to swallow♪ ♪fame, puts you there where things are hollow♪ the evolution of luxury continues. the next generation 2015 escalade. ♪fame mayo? corn dogs? you are so outta here! aah! [ female announcer ] the complete balanced nutrition of great-tasting ensure. 24 vitamins and minerals, antioxidants, and 9 grams of protein. [ bottle ] ensure®.

nutrition in charge™.

coming up, edward snowden speaks out again. first, small cap stock picks poised for big returns. "squawk box" will be right back. . cialis is also the only daily ed tablet . approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision,

or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial.

single stroke and pause for two minutes. >> our heroes will now open the marketplace. >> everybody should step to the plate and show the strict of the

american economy. >> this city is the capital of capital. >> just getting the markets open is a victory. >> the small cap stocks have lagged the broader market so far this year. joining us is greg hodges of hodges small cap fund. not spraoeugs. you look at the 10-year, dividend paying stocks. we have seen a weird internal rotation. i don't know what it's all about. a lot of different markets will try to signal something. not surprising small caps lagged a little. >> first of all, i would like to apologize for not having that nice british accident and had to go to this west texas drawl this morning. small caps are the most volatile part of the market. when you get to the first part of the year, a lot of uncertainty. a mix of anxiety and optimism. you're going to see a lot more volatility. the markets have changed,

especially at the low end. the market making isn't the profitable business it once was. small caps are thinner than they have ever been. therefore you get some activity opportunities. what we see is we see a lot of companies that we can buy a growth rate. which are great businesses to be in. great way to invest, we feel like. >> i don't know history cool if you have got this info. but small caps, the the demise, the underperformance was predicted so many times over the years. >> yeah. >> go back -- in the '90s. they were great. they were good for how much of the 2000s? this is a recent phenomenon, is it not? >> in the 90s, there were really wide fluctuations in small caps. you had years where they were down 15% to 18% while the general market was up, which is

very rare. i noticed every time that happened the snapback was tremendous. you know, we've had, like you said, we had outperformance in the small cap for a number of years. frankly, i think large caps are more undervalued than the large caps. but the thing about small caps is there's always opportunities. there's always new companies that are merging. and we've got seven research guys that are uncovering companies all the time we have never even been aware of. >> what kind of economy do you want? what would play into small caps? if we go 3% to 3.5%, is that good for small caps? that would get people less nervous and less worried about parking money and safer dividend plays, right? >> right. i do think that. you know, we have had seven years of money coming out of u.s. equities into bonds. i think when you do get a gdp

that's up and rates start going up, i think you'll see a big pendulum swing out of bonds into. and i think the first place it will go is large cap dividend paying stocks. at the same time, when the economy does get better, it will help the small caps on a greater degree than in general companies. a good growth rate for a large company could be 10%, 12%. there's a tremendous amount of small caps that can grow 15%, 20%. that's a good risk to reward scenario. >> at this point it might be a time to start acquiring. not with both hands. but some day they will outperform. but we're still in an environment where they might favor large cap dividend stocks you think? >> yeah, i do. they have underperformed for a lot of the time. >> all right. it was always small caps. small caps outperform for years and years and year.

thanks. appreciate it. when we return, apple sings a new tune. the $3 million acquisition. okay, listen up! i'm re-workin' the menu. mayo? corn dogs? you are so outta here! aah! [ female announcer ] the complete balanced nutrition of great-tasting ensure. 24 vitamins and minerals, antioxidants, and 9 grams of protein. [ bottle ] ensure®. nutrition in charge™. [ bottle ] ensure®. alright, that should just about do it.

excuse me, what are you doing? uh, well we are fine tuning these small cells that improve coverage, capacity and quality of the network. it means you'll be able t post from the breakroom. great! did it hurt? when you fell from heaven (awkward laugh) ...a little.. (laughs) im sorry, i have to go. at&t is building you a better network. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.

is the deal music to investors's ears in. going for broke but falling short. nervous investors in wait and see move ahead of this morning's revision. our news maker of the american ken langone. as the second hour of "squawk box" begins right now.

good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick, along with joe kernen. andrew has the morning off. ken, it's great to have you here todayed. >> thanks for having me. >> we have a lot to talk about. you guys are already going at it. >> i didn't realize how stupid he is. he's fooled the world. >> why did it take you so long to realize that? >> i'm not smart. i plead guilty. >> you're in andrew's seat. >> andrew is sometimes right. bad facts. >> andrew writes bad facts? >> yes. >> the column on nyu? >> yes. >> he's not here to defend himself. >> it's full of errors. >> wow. right out of the gate. i swear i didn't -- >> you know why he didn't show

up today? i'm sure he knew i knew. where is he today? >> i'm not sure. >> andrew? andrew? >> well, we've got two hours. >> we will beat up on the 10-year yield. >> also let's take a look at the futures quickly. we did see the equities market closed lower. this morning the futures are indicated higher. dow futures up 31 points. s&p up by three points. and the 10-year, as joe mentioned, this is the one we're watching. the yield continues to drop. 2.431%. wow. do you have any thoughts on that? >> which one? >> the yield at 2.4%. >> we're awash with money. until you figure a way to sop it up, people will want a return. it's dividends. you look at these funds with an

assumed rate of return, they are going further and further in the hole every year. >> we have a mutual who talks about there are going to be consequences for the fed. hearing gary cohen at goldman yesterday saying all the volatility, everything has been obscured by all the money. the markets aren't acting the way they normally would. >> let me tell you what scares me more than that. there's no inflation. i don't care what anybody says about the economy. it's not strong. by the way, it's free money. >> yeah. >> we will be looking at economics today. >> as ken mentioned, the numbers have not been strong. first quarter gdp is expected to show the economy shrank at an

appal of 0.6%. the labor department's weekly look at initial jobless claims. later this morning, the national association of realtors will issue a report on april home sales. we'll talk with ken in just a moment. apple announcing its deal to buy beats. john joins us from the co-conference in california. john? >> hey, becky. yeah. i don't like this deal any better than i did the day it was announced. what do i know? it's about retaining the talent. doing the content deals. and making the brands work together. we'll see if they can do it. hey, apple confident about this. eddie q., the head of services, last night said they have a great product lineup this year. take a listen. >> the reason we have been successful is we're completely focused on the products we're building. we don't try to do too many things. as i said, we're not smart

enough to do 100 great things. we want to do a few incredible things. we're focused on that. and that hasn't changed. and it's been, you know, keep going down the path we're going of building great, great products. you know, later this year we've got, you know, the best product pipeline that i've seen in my 25 years at apple. >> they pressed him saying, wait a minute, you had a pipeline that included the iphone, the ipad. you're seeing this year is the best? and he didn't back down. we will see how this turns out when the holiday season is up, guys. >> we had a day named forte. i made the point. very few companies stayed above half a trillion dollars in market cap this long. you have to hand it to apple at least in that respect. sisco was there for a while.

microsoft might have been for a while but not very long. apple, $538 billion. you have to keep running in place just to stay where you are. i wonder if that has something to do with it stkpwhrfp. >> yeah, joe. you'll be hard pressed for anybody to go on the record. hey, look at the track record they do have. >> yeah. but i don't like it. >> hard pressed, except for john. >> besides tv, what do you have? tesla. cars. it's tough. but then again we never know what the next big thing is until it's here. i would have never ever understood facebook or twitter. how do we know beforehand. did they know all about social media? microsoft didn't know about google and search. it's crazy. >> arguably, apple is the only

one who we expect to come up. we expect it from apple. that's tough. it's hard to be king. >> i've got kids. we were going to a hockey game. i tweeted it out. they sat next to some people on a bench waiting to go on the train. my kids had beats on with an iphone. all the other people on the bench, disparate people. maybe that's why i don't understand it stkpwhrfplt doesn't that tell you something? it tells you people like the the products. that's the first step of selling somebody something. >> john, people think steve jobs is number 1 in our top 25. he is iconic. they think everything is internally generated. i think there was initially just that feeling that it's not internally generated so it can't be great. can't be apple.

>> steve jobs was a maestro. he brought the best people together to get things done. he had the ability to control the culture and make it work to actually drive them to getting the product. now we have to see him conduct the orchestra. >> all right. >> i can say it's true. you know the store on fifth avenue in the general motors building where they put a hole in the plaza. >> yeah. >> how much do you think that store does in business? over $500 million a year. one store. >> i see lines out there all the time. >> let me tell you, harry, who owns the building, apparently when they made the deal, got a volume deal. in other words, he got a percentage of volume. >> smart man. >> let's get jeff lewis, partner at venture capital firm,

founders fund. jeff, do you remember hearing about this? do you remember reading all the commentary? where are you now now it is a done deal? >> i'm where i was before it was a done deal. this is a $3 billion talent acquisition. it's a $3 billion bat that jimmy ivine will be able to join apple and create a spotify killer product as part of the apple team before the apple culture kills his mojo. very, very tricky to do successfully. they do not know what it will be. beats streaming product is not the right product. they implicitly admitted that yesterday at the code conference. this is a case of two very, very different cultures coming together with a hope that he will be able to work his magic. i think it is a long shot but so the of appallsy acquisition by apple. we will see what happens. >> so you love the deal? >> no, i don't.

i do not love the deal. rink there's a sense in which when you have a market where there is a product four orders of magnitude larger, in this case spotify, the table is largely set. apple has sort of woken up. spotify was founded in 2006. apple has woken up and realized their download is broken, the future of streaming. they have gone out and bought one of the best people in the music industry to help them. >> is that a word lott west coast now in the nomenclature? ballsy. >> you're going to use it regardless. >> well, you just did. so i'm using it also. >> all right. we can use that then. what is going to determine whether there's a barrier to try for streaming. what will the eventual winner --

how will you win? what will make you -- why don't you think maybe iavine and dr. dre, because they're cool, because they have a way of being in a better position than apple alone to win in stream stkphrg we. >> there's a sense where you can't buy cool. apple has created cool. they have tried to go out and buy cool with this acquisition. i would argue that the streaming winner has already been determined. it's spotify. this is a company with 10 million paying subscribers. unit economics that are going to work at scale. at this point apple has a really talented person in iavine. i think what needs to happen for them to have a chance is he needs to craft a series of deals that no one else can replicate with labels i think the table is set with what these deals look like whether it's spotify,

beats, apple. secondarily, they need to come up with a product that resonates. they have brand awareness, distribution, listener lock-in. all the existing folks. the product is very good. unlikely to switch. >> explain something to me. apple has a market cap of $500 billion. >> yes. >> if my path is right that's half of 1%. so what if it's worthless? what the hell is all this noise and talk about. they're taking a shot. and based on the history, i bet the shot is going to pay off. more importantly, all these headlines, over half of 1% of the value of the company. it's nuts. >> it's not about the company. >> of course it's not. let's assume everything this fellow says is right. everything. so they lost half of 1% of market value of the company. that's a bet i would make every day. >> so, jeff, how much would

spotify have cost apple? >> well, it wasn't for sale. it would have cost a lot more than $3 billion. >> and pandora would have cost a lot more. see, i don't understand it well enough. you figure because they already got 10 million paying subs they're in a market-leading position. that's going to be hard to replicate. >> they've got the momentum, the brand awareness. i think that the risk here for apple and the reason why -- i think it is definitely a big bat, it was not a lot of money relative to apple's balance sheet. however, apple needs to come can up with applications that they have exclusively on the iphone, the android, that android does not have. this is a shot they're trying to make at doing that. very unclear they're going to be able to do that. says a lot where things go for apple. >> thanks, jeff. appreciate it. it was ballsy for you to come on

all the way from the west coast. >> and use the term. >> use the term. the genie is out of the bottle. toothpaste has left the tube. >> if it was 300 million? >> of course. that is a lot to pay. >> wait a minute. if they need to do other things, this doesn't preclude them from doing other things. >> you're right. how much did they -- >> i think it was a billion dollars. >> the markets were so high. >> anyway, when we come back, edward snowden's motive revealed. stick around. out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work.

because the future belongs to those who challenge the present.

welcome back to "squawk box", everyone. edward snowden speak out in an interview with brian williams. amon? >> a fascinating hour-long primetime interview last night. brian williams flying to moscow secretly last week to tape the interview, airing it last night. snowden made the case for why he did what he did and denied working for the russian government. >> i have no relationship with the russian government at all. i've never met the russian government. i'm not supported by the russian government. i'm not taking money from the russian government.

i'm not a spy, which is the real question. >> he was at pains at various points to tie his actions into a longer tradition of american civil disobedience linking what he has done here to other periods in american history. take a listen to that. >> i think the most important idea is to remember there srpb times throughout american history where what is right is not the same as what is legal. sometimes to do the right thing you have to break a law. >> he said he would like to come home to the united states but that doesn't isn't up to him. he says he has no contact with the russian government. he didn't turn anything over to the russians. he said he made sure they had the opportunity to vet the information before they published it. i was watching for an hour yesterday. i was waiting for a flash of emotion, anger, sadness, disappointment, anything from snowden. the guy comes across as

extremely emotionless. very rationthe al. very logical making his case. but not a lot of emotion. logical argument after argument after argument. that was a fascinating insight into his personality, guys. >> hot-button issue. i was going to say without commentary that the emotionless aspect in -- not calling him a sociopaths but they have been able to control their emotions. >> it leapt off the screen last night. this is a guy who has been through more emotional and political drama and trauma the last year than maybe anybody else in the world. yet he's not angry. he's not sad. he's not joy us. there's a very even keel to him. that's a personality type you find among computer types in particular. that's strikeng. >> the emotion i saw is when he

was emotionless. >> i was trained as a spy. >> you have to go out to the left. what did john kerry say? come can back, face the music. >> called him a coward and traitor. you have to get all the way to mother jones, media matters almost to get to -- anyway. >> what did they say about john kerry picketing in front of congress? come on. >> i wouldn't put john kerry in the same -- >> i'm not putting him in the same. look, this guy may philosophically believe he's doing the right thing. blowing the whistle. i have no trouble if they want to spy on me. if it makes my life more secure, spy on me.

the only people that have to worry are the people that have something to hide. back to kerry for a moment. of course you know how i feel about the other party. but the fact is for kerr cannery to be talking about the things he said about this guy, he was awfully close to the edge himself. >> you can't -- >> oh, no. come on. ask the g.i.s that got those medals what they did, how they felt when he threw them over his shoulder. >> john kerry fought for his country. >> he had a right. that doesn't mean you have to disrespect what other people hold dear. >> edward snowden, i would not put him anywhere -- >> please. i'm not comparing kerry. i'm saying i find it ironic that kerry would use those words about him. >> you're calling it irony. >> that's all i'm saying. that's all. >> coming up, the story of the

consumer and why shares of costco are under pressure this morning. let's just not go to break and we'll pretend we did. [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ my mom works at ge. you need to see this. show 'em the curve. ♪ do you know what this means? the greater the curvature, the bigger the difference. [sci-fi tractor beam sound] ...sucked me right in... it's beautiful. gotta admit one thing... ...can't beat the view. ♪

introducing the world's first curved ultra high definition television from samsung.

i want to do something i want to build something. create something. i'm only one in seven billion, but i know i can make a difference. i'm just asking for someone who believes in me. for over 200 years, citi's job has been to believe in people and their ideas. wherever ideas come alive. wherever you are. the world's citi. welcome back, everybody.

costco's quarterly results missing the mark. joining me is janet niffin. great to have you here. off camera you said you've been doing retail 50 years. >> now on the set with ken langone. i feel like a novice. >> if you have six months, you'll have all the mistakes on me too. it will take that long. thank you, though. >> you're welcome. >> let's talk about costco's numbers. were you surprised by the miss? >> i thought they would be 1.08. they're 1.07. the world thought 1.09. taxings a little lower. sales were fine. do i think anything was going on that's unusual? i don't. i think costco is the best retailer in the world. any time you can buy costco cheaper than it was the day before you should. they are still running the business really, really well. they didn't buyback any stock

which would have caused the number to be higher. i don't think anything happened. no news here. >> jan, how is the consumer doing overall? >> marginally better. it is not growing fast enough for most of retail. costco deals with a high-end consumer. they have a lot of $90,000, $100,000 incomes. if you're walmart, your life looks different. the upper end is doing better. macy's did pretty well. they're not that high up. costco in my opinion did fine here. they will do fine going forward. but i do think there's a lot of issues with retail. a lot of it is lack of growth in the economy and lack of growth in people's incomes. >> ken, what do you think? >> same thing. look, this so-called robust economy recovering, i don't see it. look, by the way, i had stu miller in last week.

interesting point of view. if i can address one thing in america, look at regulation and say, okay, what don't we need that if we took it out we would enhance economic growth? by the way, all these people hired to enforce all these laws are sitting at a desk and

saying, i've got to do something. i'm getting paid. i'm sitting at this desk. what they do may not be necessary or productive. this is the price we will pay for insanity. >> we are going to continue this conversation with ken langone. thanks for coming in. >> thanks for the kind words. i appreciate it. i'm only that much of what you think i am. >> and that head of hair you've got.

welcome back to "squawk box", everybody. let's look at some of the stocks on the move in premarket trading. third quarter profit of 11 cents a share for palo alto networks. the maker of security products settling patent litigation dispute with juniper networks. it is up by 13%. intercept pharmaceuticals is a winner. fda granting fast track for

autoimmune liver disease. it was up 6.8%. and shares of medical device manufacturer smith&nephew. striker corporation would make a takeover bid. it is a rumor that striker specifically denied. yet that stock is up another 4% today. >> where there is smoke there's fire. an update from the code conference. julia joins us now. i saw sam wright directing traffic. i saw you, julie. did you see those? this is exciting. >> it's been a very exciting conference. very exciting, joe. and the big headliners last night could not have been more topical. eddie cue and jimmy iavine who runs beats music. they took the stage just hours after apple's $3 billion

sbgatisb acquisition was made. how he thinks it is apple's real understanding of the music biz that helped to overcome the northern california/southern california divide. >> i met eddie and steve i came back to l.a. and said, hey, guys, these get it. they understand culture. they have a feel for it. they can transmit it. they can commute in it. they know what we do. they respect what we do. they respect copyright and the entire food chain. >> now, iavine explained this deal. he said for him this deal makes sense. beats brings the best audio technology. curation and subscription service and its massive user base 800 million strong. he wants everybody who buys a phone to also buy headphones. now, iavine stressed the urgent need for this new partnership to

reinvent the music industry, desecrated by the death of the album as a format. he said it ultimately forced artists to shift away from focusing their energy on music to going on tour. here's what he had to say. >> there's young bands but they're not being funded properly. to invest in new artists is very, very difficult. the economics is very, very difficult. not just for the labels. a lot of people focus. oh, those labels, those corporate guys are making all the money. what it really does, the trickle down effect is devastating to the artist and to the recording engineers and to the songwriters, record producers. >> iavine said the ultimate silver bullet to curation. he said peel will be willing to pay for the human element, the human touch of curation and someone really giving them a service. he thinks people aren't going to

be willing to pay just for access to music. so he called curation the new album rather than two minutes of audio. he slammed the rival spotify and said they are not doing curation well enough. guys? >> all right. julia, thank you very much. we're together to continue this conversation. yesterday twitter ceo spoke at the code conference addressing concerns of slowing user growth. >> i don't spend amount of time thinking of third-party growth. we have seen reacceleration in our biggest market, the u.s. and growth across the rest of the globe. so i'm happy with the work the team is doing and service to growth. and i think we like our plan there. >> anthony is senior analyst who recently upgraded from neutral

to buy. >> i think with the stock down over 50% year to date, you know, the market is discounting the possibility that twitter is more of a niche product. when you think about the number of smartphones in the world, 1.6 billion. that's 30% of mobile users. the tail wind is tremendous. given the product enhancements they are making, there is a chance. there is a good possibility that users reaccelerate, particularly in q2. you think of the product enhancemen enhancements. your risk reward is much more favorable at 30 bucks. >> it has been downgraded much higher. did you ever have a buy? >> i launched it at neutral. >> you did? >> yeah. >> for me, the big improvement when i block someone now, i have all these things i can say. he's annoying. he's this. he's that. one more thing. can you get an all the above?

you know the haters? >> so you can do that. you are talking about social actions. replies, retweets, refavorites. it's much easier to block and hate people. >> can i call them spam? >> there is a positive side to technology. >> thank you. >> very important. i mentioned this to you. i just invested in a company called my force. on your smartphone. you've got an app. you're a student. you're walking across campus. you think somebody is trailing you. you hit the map. automatically the line is open. somebody hears everything that's going on. god forbid if you need somebody. they call somebody. there's gps. they know exactly where you are. i'm interested in all these messages back and forth. but i look beyond to human needs. this is something i got excited about. this is an incredible opportunity for people to have

access to personal security without having somebody follow you. >> the human need on twitter is real-time information. real-time news. taking share of old media. sorry, joe, newspapers. it's got the world at your fingertips. when you think about mobile, you think about world events. whether it's media, world news that people care about, wars in ukraine, malaysia. things like that. twitter has been the place people continue to turn. we just look at the valuation. it's monetizing half of what facebook is. international, they're just scratching the service. and if you think about a business model, there could be a lot of upside. we are recommending the stock to our clients. >> how do they speed up that monetization? i see sponsored tweets. >> if you talk to ad agency

buyers and brand marketers, they are allocating dollars from media to digital. it's 30. when you think about digital advertising, it's not just facebook. there are companies that benefit from that shift to it being a big one. the reallocation to digital is going to increase the average ad revenue per user. we're looking at that and it monetizes less than half of facebook. twitter will monetize facebook's 2013 level in 2015. that's just a sixth of google. so monetization is really large. >> do they have a way of tracking -- i have cnbc, looking at stock quotes. an ad pops up. thing i do is whack the x. i don't even know what it is. i just want it off. >> for twitter the ad low is

low. we think face book is 5%. twitter is much lower. you don't get a lot of complaints. >> i'm not talking about complaining. >> penetration? >> right. the consumer reading something. the idea of advertising is to get somebody to do something or buy something. >> the more you use the service the more you tell twitter what you care about and your interest graph improves in its depth. then twitter will be able to create an ad that looks like content. so it is not intrusive and targeted. the less that you click the x and kind of eliminate that ad the more you are drawn to that ad, the higher the price of the ad that twitter can charge. that's the promise of digital media. >> if you read "time" magazine, you would flip the page there was an ad, you flipped the page

and went to the next text. >> that's always been a question of advertising. >> welsh measurement is a big key. and so in digital, monetize a click. it's basically a lot more measurable than print, right? >> you know they were there for at least a split second. >> people are looking at me like i'm in the print business. i need to keep up. the print guy is over here. andrew sits there. >> i'm not andrew. >> no, you're not. anthony, thank you. >> thank you. >> i credit you for that.

when we arrived at our hotel in new york, the porter was so incredibly careful careless with our bags. and the room they gave us, it was beautiful. a broom closet. but the best part, / worst part, was the shower.

my wife drying herself with the egyptian cotton towels, shower curtain defined that whole vacation for her. don't just visit new york. visit tripadvisor new york. with millions of reviews, a visit to tripadvisor makes any destination better. as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business. and life gets lived. in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different -

to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. woeublg back, everybody. shares of abercrombie & fitch rising. smaller than expected loss with revenue above forecast. wow. up 8.5%. >> we are opening ken langone's

portfolio. yarn producer unify to home defoe. ken's portfolio is as diversified as you can get. you mentioned the app. what are some of the best investments you have made in the last five years, 10 years. >> unphi. it was almost bankrupt. we put a new management team in. >> that's the recycling one. >> that's the company that the basic business is to take rayon. the raw material for that product is recycled water bottles. >> water bottles. >> exactly. the ford f series, all the ford trucks made with upholstery compared to leather will be made from this yarn made from recycled water bottles. it's a wonderful way to see how

we are learning to recycle. by the world, the rest of the world is way ahead of us in recycling. we only recycle 28%. europe is over 50%. far east is way up. >> we have talked with ceo of waste management. part of it is americans don't know how to recycle. they put too much food product into the recycling. >> i think we have proven we can change human behavior. good example is cigarettes. we stopped people from smoking. the more conscious we are of the benefits of recycling, the more likely we are to move the needle. but, joe, apropos, the breadth of my investment, like my force, this little company i mentioned before. dick foehl brought it to me. they were doers. look at apple before steve jobs when he left. look at apple after he came back. warren buffett has it right. you can't underestimate the

value of great management. and if you take their business -- i disagree a little bit because it is a rather mundane business. the new team has done fabulous. so i'm always betting on people. that's my life story. bernie and arthur were out of work. seriously. that's a great story. >> they were what? >> they were e fired. they were fired from their job. >> they were out of work? >> they were out of work. got fired by sandy. >> sanford sigaloff? >> he died. >> i remember him. >> what was his company. dale owned 81% of home depot. i had 19%. bernie persuaded me to sell it back for 100%. i said if i do that you're a dead man walking. three months later he was fired. he called me. he said i've got nothing. i'm broke. i need a job. he came to new york. you have this idea. you wouldn't tell me what it

was. you said it would change the landscape. let's do it. that's how we started. >> was he a raider? >> he was a guy that would go -- the banks would bring him spo a company. and the first thing he would do is screw the banks that brought him in. squeeze the debt. >> >> after that he was wicks. >> that's how i know him. >> god bless bernie. he was 47 years old. starting a business at 47 years old. by the way, i saw bernie the other night, he looks spectacular. and you want to see him hit a golf ball. it annoys me he hits further than i do. he's five years older than me, but that's besides the point. >> i don't like you. >> it doesn't matter. i'm here to hold you fat cats

responsible for a lot of your corporate behavior over the years. that's why i'm here. >> hold meabilitiable. >> i don't cozy up to power. that's what that guy says at all of these. >> you're not getting any strawberry jam. make sure they all get strawberry jam and biscuits. >> except for me. >> no. you can't touch it. >> ken is our guest host today. dr. dre found a new friend in tim cook. it was just one deal that was all the buzz at the code conference. up next, empowering women through golf. lpg a's top ranked golfer joins us. stacy lewis will be here with the chair of on wpmg. we'll be right back. tdd#: 1-800-345-2550 you read this. watch that. tdd#: 1-800-345-2550 you look for what's next. tdd#: 1-800-345-2550 at schwab, we can help turn inspiration into action

tdd#: 1-800-345-2550 boost your trading iq with the help of tdd#: 1-800-345-2550 our live online workshops tdd#: 1-800-345-2550 like identifying market trends. tdd#: 1-800-345-2550 now, earn 300 commission-free online trades. call 1-888-628-2419 or go to schwab.com/trading to learn how. tdd#: 1-800-345-2550 sharpen your instincts with market insight from schwab tdd#: 1-800-345-2550 experts like liz ann sonders and randy frederick. tdd#: 1-800-345-2550 get support and talk through your ideas with our tdd#: 1-800-345-2550 trading specialists. tdd#: 1-800-345-2550 all with no trade minimum. and only $8.95 a trade. tdd#: 1-800-345-2550 open an account and earn 300 commission-free online trades. call 1-888-628-2419 to learn more. tdd#: 1-800-345-2550 so you can take charge of your trading. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation.

because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.

>> the new 42. >> you won't tell me your stphaeupb age? >> lpga is teague up for success. the idea is to create a platform to develop, advance and empower women on and off the golf course. joining us to tell us more about this collaboration is stacy lewis, number one ranked u.s. women's professional golfer and global chair and u.s. chairman and ceo of kpmg. we were playing -- that's your swing, isn't it?

you weren't just posing. that's smooth. the tempo is real, isn't it? >> that's my actual swing. it's a little slower than normal, but that's it. >> it looks just like my swing, joe. >> mine too. i'm sure her chipping tempo is like mine too. it's just horrific. i don't even want to think about it. you won a major already, didn't you, stacy? >> i've won two. >> what will this do? how does kpmg figure into the whole thing? what's this tournament? >> well with, it's the kpmg pga championship. we have five pages a year. that's our opportunity for the lpga to really get out and show us off. and this tournament certainly helps that. we have a huge purse at a great golf course at westchester country club. and on network tv, which is something we needed for a while.

we got a great partner with kpmg. it's a home run. it's a great day for our tour. >> john, every time i say west chester and pga, they will say kpmg. that's a lot of letters but it certainly gets kpmg out there. >> we're really excited about this. they have been permitted to advancing and empowering women. this is just a great platform to do something that actually we view as pretty unique. we have an opportunity with the pga of america, lpga, great broadcast partner in nbc and coming together to create a three-pronged initiative here. one is to stage a great women's golf championship. and really through the purse, through the venue, empower women and golf in a different way. but use the tournament itself as a platform to really empower women more broadly. we will hold a women's summit on site at the tournament where we

will bring together business, political, sports leading women to really create a venue and an opportunity to network and really pay it forward to that next generation of future women leaders. and then all charitable proceeds from the tournament we will work together with our partners in this initiative to create year-round program to go really come up with ways to mentor, coach, develop, skill develop and really continue to empower the next generation of women leaders. >> hey, john, ken langone. how are you? >> i'm freight. great to see you. >> i'm glad to see you're paying some of the fees we are paying. >> you only because of great clients you we are able to do this. >> this is a wonderful thing and i compliment you. >> thank you. >> frank was in my office last week. >> do you have any other venues

picked yet, john or stacy? >> we will work together with the lpga and pga of america on that. the only one we have identified is westchester. the whole here is to move it around each year, focus on major markets. new york, chicago, maybe the west coast. and really provide an opportunity for the greatest women golfers to play the greatest courses, deserving of the caliber of golfers we have on the women's side. >> do you want me to mention this to baltis? my wife is a member. it's perfect. she's a woman, obviously. >> you didn't get in? >> i didn't try. i can play whenever i want. >> if we can get it down for 2016 -- >> i will work on that. have you play, stacy? two beautiful courses. i don't know if we would do the upper or the lower. >> i've been out there.

i think it would be a perfect venue for us. this announcement i think we will get a lot of offers. they will have to work on getting us there. >> i don't know. do i miss tiger? do you guys miss him? i think i do, although, you know, they're not quite ready. i thought the masters was great again this year. i don't want to bring up men's golf. we're empowering women. but golf in general has been on the decline. they are going to make a hole the size of a manhole cover so maybe i can three putt. >> from wpmg, we love our relationship with golf. we began our involvement with phil mickelson. it's been a complete home run for us. not only one of the greatest golfers in the world but certainly the most popular golfer much we are disappointed tying s tiger is not going to be here. when phil wins the u.s. open, he

likes all the best players. >> we've got to go. phil jumping up. i think it says wpmg. all right. thank you both. good luck. good to see you again. >> take care, ken. >> when we come back, we have some economic data ta could move the markets. jobless claims and the first quarter gdp numbers. both numbers ahead. also, take a look at the futures this morning, you're going to see they are indicated higher. yesterday the markets were down breaking a four-day winning streak. later, we have former lycos ceo bob davis. [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪

you wouldn't have it she any other way.our toes. but your erectile dysfunction - it could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about experiencing cialis for daily use and a free 30-tablet trial.

payday for dr. dre. >> they need to update the forbes list. [ bleep ] just changed. >> we'll talk about the deal and who else is making tech headlines as we wrap things up in southern california. >> was it really the weather? a revision to first quarter gdp. we'll dig through the data and find out if the numbers will send a chill through the market. >> snowden speaks. >> when people say why don't you go home and face the music, you have to understand the music is

not an open court and a fair trial. >> is he a patriot or traitor? that discussion is just ahead as the final hour of "squawk box" begins right now. welcome back to "squawk box" here on cnbc. i'm joe kernen, along with becky quick. >> is that for me? >> no. >> and andrew who is out this morning. andrew. >> is he here? >> he's a permanent cast member. by the way, i have seen him lurking around. >> you know how people do things. >> look right over here. >> there he is. >> that would almost be to scale. but that's a little bit smaller

than his actual head. you write a book. you get a movie. you write a column. the head tends to grow a little. we have widened all the doorways. >> where is he? >> i don't know where he is. >> is it a scheduled day off or not? >> i'm sure he got sick at 6:00 when he heard i was coming on. look, he's a raging liberal. how much better could i have than two hours? >> ken langone is here. >> we're going to have much more to talk about in a moment. let's get you caught up on your headlines. busy day for economic numbers. two reports at 8:30 eastern time. weekly report on initial jobless claims and the latest first quarter gdp revision. the first drop in three years. economists looking for a decline of 0.6. the latest pending home sales

numbers are out. and if you're looking at earnings, costco reporting 1.07, two cents short of what the street is was expecting. increased expenses for merchandise and operation. sales growth, however, was better than expected. we had an analyst on today who said any time he sees costco lower he thinks you should buy it. satellite tv dish network will allow customers to pay in bitcoin. coin base will be the payment processor for bitcoin. joe, i'll send it over to you. >> thank you. how the markets will react. head of capital markets at pro shares. liz ann sonders at charles schwab. she is in connecticut. what do you think this will be today? it's going to be negative maybe.

and does that really -- market and the gdp negative being totally disconnected at this point. >> i have no reason to be outside the consensus. we go down at least half a percent. that's it. second quarter will be a bit stronger than the consensus. it is clustered around 3.5. i don't even think 4.5 is that much of a stretch. extrapolating that is a mistake. it's a backwards looking number. i don't think it's market moving unless it is significantly different than what consensus suggests. >> we have been talking about the 10-year and some of gary cohen's comments from goldman yesterday how the markets are not normally in terms of volatility. it's being obscured by all this fed action. do you think that's true? and is that dangerous for when they are finally out of the market? >> see, my view maybe is a little bit different than the

consensus. i think the fact that they have had the foot on the act accelerator so long and so hard is contributing to uncertainty. a baby storm towards normalization will lift that uncertainty. there's been a lot of concern why all this fed stimulus has not had an effect on the economy. to some degree it has been negative from a confidence perspective. i think it's great if the fed were to continue to taper and get to the balance sheet by the end of the year. >> of the number of people arbitrarily taken out of the unemployed ranks because they stopped looking for a job? >> well, we do. >> except the majority of the people dropping out of the labor force are doing it for reasons of retirement. second, disability. third is the other category which includes people who have just given up. i think in consumer confidence there's the jobs hard to get reading. that's also been coming down,

which suggests this is as much secular as cyclical. >> maybe i am being too simplistic. these people are no longer looking for a job. for whatever reason they don't have the purchasing power they would have had if they were working. that to me is the significance of those numbers. and it impacts the economy. i think we ought to have a more qualitative understanding of the number of people, for whatever reason you want. don't forget, if they're retired, they're not doing very well with their profit-sharing plans unless they own dividend paying stocks that are hitting new highs every day. >> i agree. there's an offset. that phenomenon has always existed. the fact that i think it keeps getting lost particularly from the unemployment perspective, we're only a couple of ticks away from 20-year unemployment.

the market doesn't necessarily always perceive this. there is a disconnect even with the negative gdp. the fact of the matter is, on any given day, week or month, you can see it technically in the bond market from the perspective of the overall economy. while the headline numbers may be weak, in the employment perspective, i argue it's not all that bad relative to the last 20 years to where we had been. >> look at retail sales. my belief is very simple. people are being very cautious because they don't have the income they had. okay. and you look at the retail numbers. they're okay. but they're not robust. >> agreed. what should the numbers be? 4.5% to 5% gdp growth where we were in the '8 0s and '90s? >> no. >> right. do you think, to steal the pimco term, this is the new normal.

>> in 2008, the one thing i'm convinced of is all the decision makers had no idea what was going on. that's scary. >> agreed. >> you're not looking for a job for whatever reason. you're no longer unemployed. they count. they matter. they have spending -- they used to have spendng. >> and looking at people who are going to be long-term unemployed. >> and people will react to their ability to pay. for example, you take homes now. think of these poor kids who can't buy a home. every two years their rent goes up. they don't have equity that's going to go up in value which gives some sense of a net worth by the home they buy. these are all things that impact the economy. so the disposable income, instead of going up because you lock your mortgage payment, and as you get raises, there's more for other purposes. not only a home now. and this is regulation. make no bones about it.

what's happening is i think the banks are saying we're not going to make money to somebody who can't pay their bills. >> the last question, liz ann and real quick, the 10-year being where it is, i could see that as a negative because it says growth isn't going to be up to par or a positive because it makes stocks more attractive. do we like it or don't like it? >> look at high-yield spreads to determine whether we have an economic problem. i think the 10-year is low. ken talked about it before. lots of liquidity. treasury issuing fewer treasuries. it is technical more than it is weakness in the economy. >> all right. thank you. ken will be with us the rest of the show. >> when we come back, we will head to the west coast to the code conference. apple, intel and others making news. and the "squawk box" market indicator. you can see how markets have

been fairing today. we have been talking about that yield on the 10-year yield note. keep an eye on that. in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.

the big code conference

wrapping up today in rancho paloverdes. julie joins us with a wrappup of last night's highlights. good morning again, julia. >> good morning again to you, joe. one recurring theme in conversations people are having here at the code conference, the revelations about nsa surveillance. they have sparked major concerns and frustrations among the whole range of tech ceos. >> it is not like a muff in basket. welcome to this thing. >> it's a huge disappointment to me and the world as a whole. >> everyone has been talking both on stage and off how content and distribution companies can and should work better together. last night's beats cofounders

and apple addressed the divide. >> everybody is desperately insecure. >> in hollywood. >> in hollywood. you are desperately insecure. and the guys in silicon valley are slightly overconfident. right? so that's a rub. >> speaking of the distribution divide headliner, in netflix ceo reed hastings. he is taking on comcast's proposed takeover of time warner cable. we'll hear what he has to say coming up on "squawk on the street" before he takes the the stage later today. guys? >> okay, julia. thank you. those hollywood types. >> i like what he said about

silicon valley being overconfident. >> $30 billion when you're worth that tends to make you a little more confident in sergey's case. coming up, edward snowden. defending his decision to leak classified documents. patriot john kerry saying man up. come home. you're a coward and traitor. we'll discuss that next. and ukraine. and maybe the west point speech. also, economic data. weekly jobless claims will all be released before the market opens. just stay with us ahead.

>> nsa whistle-blower edward snowden telling his story to brian williams in a one-hour special that aired last night. >> do you see yourself as a patriot? >> i do. you know, i think patriot is a

word that's thrown around so much it can be devalued these days. being a patriot doesn't mean prioritizing service to government above all else. being a patriot means knowing when to protect your country, knowing when to protect your constitution, knowing when to protect your countrymen from the violations and encroachments of adversaries. those don't have to be foreign cups. they can be bad policies. >> nbc chief foreign correspondent richard engel joins us with a unique perspective considering you doctor i don't know how many countries in the world. but at some point you're in most of them. how do you think this plays, richard? with what he said there, it's impossible to disagree. he's got his story down and no one can disagree.

it's the way he went about it some people might have a problem with. >> well, i think that is what is fostering this debate. some people think what he did was a product of the 9/11 era. if you watch the special, read the transcript, you see that he tried to join the military after 9/11. he was inspired by active patriotism or wanted to be more patriotic. washed out of the military. ended up in intelligence. and then somewhat as the years went by, the surveillance apparatus had gotten out of control, in his opinion, and decided to leak these documents. what went wrong, according to mr. snowden was the actual leaking process. that he ended up here in russia, which is something he said he didn't want to do. that he got marooned effectively when the state department revoked his passport.

even russia said the intention wasn't to have him here in moscow. flat mere putin said the united states could have detained edward snowden in almost any country of his choosing. but they effectively got stuck here and russia is keeping him as long as he has for amnesty, mostly as a point of pride. but i think this debate -- or this interview will raise a lot of debate. and i think the reason he gave it is because he wants to appeal directly to the american people and show them why he did this with this criminal act because there's no way of getting around that. he even says it was a crime. hopefully he wants amnesty. he even said that in the interview. he would like to leave here. >> let's shift gears, richard. i can remember the conversations we had during the whole red line debate. you know, i know what the rebels wanted and what they were trying to accomplish.

and we've talked about the -- i don't know what kind of foreign policy you would call it. the president yesterday i think made his case for his foreign policy moves yesterday. i know you probably saw the text of his remarks at west point. i don't know who he's talking to necessarily, the president. he doesn't have to convince the left. the left didn't want any more involvement. i'm not sure any american want thad much. listening to mr. obama trying to assemble a coherent foreign policy of the last five years reminded them of tom hanks trying to survive in "cast away" using whatever was left over from the wreckage that will have to do to defend the legacy. that's pretty hard, i admit. >> that is pretty harsh. >> it is. >> well, i -- so the question is, why are they criticizing his

foreign approximate policy when this is a president that has gotten the united states or is getting the united states out of two unpopular foreign wars? is that basic live the question? >> i think the question was, he did not talk yesterday about the reset with russia that didn't work. he didn't talk about the pivot. and with china that didn't work. >> he didn't talk about the failure with the palestinian/israel question. and didn't talk about the red line in syria. they go over five or six things. but i think most americans -- i think the left is perfectly happy. i'll not sure where i stand. no one had the stomach for more foreign involvement. and i think mccain has had seven different instances where he is like -- he's ready to send in troops at the drop of the hat. i don't think they had the stomach for that anymore. >> name me one country where we

have -- i'm sorry. i'll ask my question after you're done. >> i can't figure out where one person is talking because i can't see you. the way i kind of think about it -- go ahead. >> name one country who we have better relationships with today than we did when he became president of the united states six years ago? >> you would naturally want to say europe. but generally the realizes with a lot of european countries have gotten worse because of these relationships. i think a lot of our -- >> i can name all the countries where the relationships have gotten worse. i'm asking you to give me one country where they have gotten better. >> yeah. i think you would be hard pressed to find that. and this is the reason. even our allies -- yeah. and i think the reason is our allies have become confused.

for eight years you had the bush administration with a very interventionist policy, driving world affairs, driving primarily into the islamic world army first or first first. people adjusted to it. now you have a presidency that for the last six years is pulling out very rapidly. that is creating a pump action, vortex of in stability that has left allies like saudi arabia, egypt, and some european countries very confused. are we going in? are we pulling out? are we leading? are we trying to set the agenda. that has been a lot of frustration. so in terms of the foreign policy objectives laid out in west point, yes, he talked about ending these two unpopular wars. but i do sympathize with some of the things said in the wall

street journal. right now we have a black hole in syria. iraq is in a state of collapse. libby is about to go back into a civil war. this was the one case where we intervened militarily. so i think there is a lot of problems on the more rye in the foreign policy world because you are offramping afghanistan. >> we will need you again. in ukraine, violence escalating. it almost seems like the ukrainians that are in power now are going to try to root out the separatists. i don't know how that is going to play. we have one of putin's guys say the u.s. is trying to start the third world war by backing ukraine. we will need you to talk about that. we only have 30 seconds left. we need to stay tuned on that. >> well, watch the city of donetsk. it's the biggest industrial city in the east. a curfew has been put in place there. the people are worried that there is going to be a military

intervention by the ukrainian government to drive out separatists. that could be a turning point moment. it's a big city. that's my 30-second answer. >> great. i know we're a business network. i don't know why we are so fascinating whenever we have you on. we appreciate your time today, richard. thank you. >> my pleasure. >> foreign policy is in shambles. >> how do you really feel? >> we will continue this conversation in a moment. up next, we have breaking news. jobless claims and gdp revision. stick around. "squawk box" will be right back. and a low sex drive, i had to do something. i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair

or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer, worsening prostate symptoms, decreased sperm count, ankle, feet or body swelling, enlarged or painful breasts, problems breathing while sleeping and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. ask your doctor about axiron. the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

gtp down 1%. let's go through the internals. personal consumption actually improved from 3% to 3.1%. the price index, 1.3%. pretty much 1.3. it was our last look. expectations. it was the actual number. if we look at the pce quarter over quarter, up 1.2.

a tenth lighter. corporate profits were down 13.7%. down 13.7 versus 2%. now, economist friend is e-mailing. everybody is going to get a pass on first quarter gdp. i'm not so sure i agree. i don't think we should pass it up. but granted, second quarter and third quarter will average in to give us a more approximate or accurate look. at this point i don't know that we will get 3.5% to 4% to get the type of numbers we were looking for. jobless claims also out. they moved down right exactly to the 300,000 mark. lost 27,000 in continuing claims. continue to go hover a whisker above 2.63 million. back to you. >> rick, thank you for the incomes. steve liesman is here. this is going up. >> i don't think so. >> you think it goes down on

this? >> of course, it goes down. joe, are you paying attention? >> it's at 2.43 already. >> i think we will see 2.17, 2.18. >> i've been saying it's going to go down for a while. now i think it's finished. i don't believe. where is liesman? what has the white house spent on this, steve? >> how would i know, joe? >> oh, play along. >> didn't open your e-mail? i think what we're learning here, clearly you had this huge dip in economic growth. if it's weather, it's well beyond. it may be double. could be triple from what the weather effect would be. clearly things slowed down. consumption didn't. that number being there. i'm guessing. i don't have the details in front of me. here it is.

let me give you some of the details and see how it came up here. >> steve, let me ask you, how difficult is it to get to 3% gdp when you start with minus 1%? think of a grade point average. that's a pretty tricky order even if you get much stronger growth the next three-quarters. >> so it's not hard, becky. the data we have had so far shows that january and february were the soft months. then you ratchet up to a level in march that's higher than it was in february and january. and so as long as we continue that level of march, the way you do gdp, the average of one quarter versus the average of another. even when you do zero in april or may, if it's at the higher level of march, you can do pretty good. >> you didn't believe me about selling off to china. tyson is making an offer now. all cash for hillshire. this is unbelievable. it started out hillshire buying pinnacle.

>> right. >> then that might have been by trying to stave off the other company that then offered to acquire hillshire. and the other one? quick. >> smithfield? >> no. >> anyway, now tyson -- here comes tyson into the mix, which definitely throws a complete wrench -- pilgrim. pilgrim came in to try to buy pilgrim. now tyson is offering $50 a share in an all cash proposal. $6.8 billion. >> why? >> because of all the -- >> the premium to hillshire holders would position, reposition tyson as the clear leader in the retail sale of prepared foods. it has secured bridge facility from morgan stanley. it is above the $45 a share offer that pilgrim's pride had

offered for hillshire. and they already got, as i said, they got morgan stanley and jpmorgan providing the bridge financing. >> why do you like hillshire? >> i love meat. >> money is cheap. an all cash deal. >> all cash. yeah. >> money is cheap. >> so it went up to -- wow. 47. then it went to 53. so this is like a full on. we haven't had one of these -- >> pinnacle deal. >> it is in question because pilgrim's pride offered to buy. >> all of this is being driven by cash flow. >> and what's happening obviously with pork and the entire meat context. all right. so the last i looked we're back to 2.44 on the 10-year, santelli. the yield is going up. >> you're talking about the next 10 minutes.

i'm talking about for the rest of the year. >> i just went what's been driving it down. liesman, are you still there? >> hold on. what, santelli? >> go on. >> i was going to say they want to end in the fourth quarter at 3%. no one thinks we will average it, do we? >> what we don't know, joe, is what wii lost in weather, to what extent do we get that back. a visit to the doctor, you don't do that later. a lot of the critical areas were revised up or unchanged. two areas looked like they took a big part of the downward revision. the first was government spending from minus 0.5 to minus

0.8. that was one piece of it. and it looks like a pretty massive downward revision in inventories. i bring it up because it could be that economists look at the big inventory adjustment relative to sales which, were okay and give more strength to the second quarter through inventory building. and if consumption remains in good shape, we don't have a problem here. whatever we get in the second quarter i said all along is not the trend. it wouldn't be surprising to be in the 4% for second quarter as snap back. and the argument you're getting at, joe, is trend. >> i was kidding you. that wasn't right out of the -- the you didn't just open an e-mail? >> why was that? you can bounce back on inventory. >> right. >> the government spending was what caused this. >> do you know where i am, man?

i'm at the hoover institution, man. that's where i am right now. in stanford. we're at a big fed conference here. >> really? >> a bunch of fed guys. mostly this is the santelli wing of the fed over here. >> you better get in. >> you better be careful. >> you better get a disguise. >> that's a better wing than the other wing, nut wing. woo, woo, woo. >> what were you going to say earlier, santelli? >> west point is a cool place. my dad was a marine. obviously i didn't go. but to listen to the president then throwing climate change, you know, i don't know. did he think he was talking to meteorologists? i don't know. i was just lost by the whole thing. it seemed like so out of place. you know, joe, they call people with the certificate birthers. what do we call the climate nut cakes? the climers?

clems. we have to come up with a clever name. call matthews up and see if we have a name for that. >> i don't think you should engage in all of those. they have horrible numbers for people that just raised anything skeptical. i'm off of that. i can't convince the the world. i saw prince charles saying we need to fundamentally change all of capitalism because we have .04% atmospheric. >> he put a petition in boston saying if you want to come back, we'll take you in. >> all right. >> we've got to go. liesman, it's just surreal. i know. you're out there going, wow, what was it. thank you. you're at the hoover institution. it was named after the president, not the fbi guy. >> yes. >> vacuum cleaner. >> very conservative. >> you went there? >> the institute is very conservative. >> when we come back, we have

former lycos ceo to talk tech investing. cnbc is joining forces with the single later university. learn how technologies like artificial intelligence and biomedicine the change the entire equation. >> we will dig into emerging threats and opportunities that affect banking, traders, and investors. >> register online now.

♪ ♪fame, makes a man take things over♪ ♪fame, lets him loose, hard to swallow♪ ♪fame, puts you there where things are hollow♪ the evolution of luxury continues. the next generation 2015 escalade. ♪fame

our next guest says services like uber are blowing up. joining us is bob days, general partner at highland capital partners. bob is primarily focused on digital media investing. former ceo of lycos. >> good to sigh in this early california morning. >> we appreciate you getting up early from the west coast. what do you mean the uber of everything? >> it is such a disruptive force. back in the bubble days, the ultimate killer app in terms of what it does, on demand at our fingertips. what you want, when you want it, any time you want it. it is really perfect in terms of what uber does. that concept will extend itself

very, very broadly across a many services. not just taxis. it will be across the board opinion. >> you butt into existing things that stand. it's the medallion cab drivers who have such a big problem with this. what's the answer when you run into a situation like that? >> what a crazy system that is. travis, the ceo of uber, spoke about that yesterday. he's pushing up against a whole set of incumbe kupcouple ben si. the reason is it's protected environment that says you can't do it. you have someone like uber coming along that offs a better service for the customer, for the citizenship. and the in couple ben seu says you can't do it. they have been making the

service widely available. there are cities and towns where it's tough to get an uber car. if i'm the betting man, and i am, they will blow through that pretty quickly. >> handy book is another investment is. is this what you think of as the uber for everything, furniture assembly? >> it's the uber for the home. everything you want done inside the home is what it provides. instant on-demand service. i have it on my phone. i have like a house cleaner, plumber, electrician, furniture assembly. this is a relatively young company put together by two harvard school dropouts. they are doing tens of thousands of repeat bookings from people coming back saying let me use this again. it's a next big phenomena for sure. in my opinion, it dwarfs the car ride service. it's so much bigger. and like uber, it prevents an

employment opportunity to a whole wave of americans that might not otherwise see it. >> i feel like it is something that already exists just looking at the handyman in your neighborhood. how is this really taking this to a new level? >> it's nightmare. if you want a cleaning person or handyman in your experience, the real world experience, you pick up the phone and call a neighbor and say who do you use. they give you an kwrut daoutdat number. >> i e-mail the mom's list. >> you call and you call and you call trying to get the handy person. with your busy schedule the person says i can't be there tuesday morning at 10:00 on. i just can't get there. and you have to start all over again. with handybook it is instant. press the button. the person is there when you

want them every time with reliable. we have a certified, insured, bonded person that comes to your home. handy book provides all of that beautifully from a consumer experience. >> finally incident to talk about oyster books with you. i just heard about this in the last week. this is netflix for books. >> yeah, becky. isn't that a great idea? that's exactly what it is. with oyster, the idea behind it, an incredible example is the idea that we can do most anything online. for those of that enjoy ebooks, this is where this is for ebooks, we can now rent for $10 a month an unlimited number of he books from the best publishers and authors in the world. all simon and shuster. it is sitting on your ebooks for $10 a month. at any point in time you have 5,

6, 10 books on your device. you browse through the way you would a movie experience. it takes it through a new level. the ceos in this apple economy are doing amazing things. they are working really hard. these are guys that are building real businesses, substantial businesses that are turning into something. >> do you think if google with this new skype, could you talk to someone in atlanta that could understand what you're saying? and someone in atlanta could -- >> microsoft. >> yeah, microsoft. do you think that will work for you, bob? >> with me, nobody -- that's not a -- >> they have chinese to english easier. what school do they go to? they dropped out? >> harvard. hah-vad. it takes a while to get used to us bostonians on the west coast.

that's quite a product. i don't know if you guys saw it. it was demonstrated the other night. it was amazing how that worked. >> i saw german to english. >> i have sent dictated e-mails and nobody hosni -- they're not even on the same. we have to get it really good. >> i don't dare tell you what the auto correct i have with siri. she was not nice to me. >> i don't like her. she could be a smart as. >> we like you, bob. thank you again for getting up early. >> always great to see you. >> we'll see you soon. when we come back, tyson looking to get into the ballpark. jim cramer joins us after the break to talk about that deal and more or. we'll be right back. tomorrow on squawk buy, biographer walter eye sock son of the aspen. and dog fish head craft brewery.

6:00 a.m. eastern time right here on cnbc. profit from it. trading opportuns tdd#: 1-800-345-2550 just waiting to be found. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 bring what inspires you tdd#: 1-800-345-2550 out there... in here. tdd#: 1-800-345-2550 out there, tdd#: 1-800-345-2550 there are stocks on the move. tdd#: 1-800-345-2550 in here, streetsmart edge has tdd#: 1-800-345-2550 chart pattern recognition tdd#: 1-800-345-2550 which shows you which ones are bullish or bearish. tdd#: 1-800-345-2550 now, earn 300 commission-free online trades. tdd#: 1-800-345-2550 call 1-888-648-6021 tdd#: 1-800-345-2550 or go to schwab.com/trading to learn how. tdd#: 1-800-345-2550 our trading specialists can tdd#: 1-800-345-2550 help you set up your platform. tdd#: 1-800-345-2550 because when your tools look the way you want tdd#: 1-800-345-2550 and work the way you think, you can trade at your best. tdd#: 1-800-345-2550 get it all with no trade minimum. tdd#: 1-800-345-2550 and only $8.95 a trade. tdd#: 1-800-345-2550 open an account and earn 300 commission-free online trades. tdd#: 1-800-345-2550 call 1-888-648-6021 to learn more. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading.

when we arrived at our hotel in new york, the porter was so incredibly careful careless with our bags. and the room they gave us, it was beautiful. a broom closet. but the best part, / worst part, was the shower. my wife drying herself with the egyptian cotton towels, shower curtain defined that whole vacation for her. don't just visit new york. visit tripadvisor new york. with millions of reviews, a visit to tripadvisor makes any destination better.

welcome back to "squawk

box." tyson foods is offering to buy hillshire for $50 a share in cash or $6.8 billion. a couple days ago pilgrim's pride offered $45 a share for hillshire. tyson said its bid is superior alternative to hillshire's deal which to buy pinnacle foods. down with this latest news to the new york stock exchange and jim cramer joins us now. who knew that you know, remember gulf oil or connaco, these were really exciting times. this is a bidding war. what's going to happen? what do you think? pilgrim's pride coming back? >> april 19484, we're back with chevron buying gulf. these things are incredible. i think what's happened here, there's no growth whatsoever in the supermarket. the particular aisles that all of these guys play in, nobody has been able to make that much more money than the previous year. so when you get a deal like this where tyson said it's creative

and the money is basically free you to do it to take share. deal makes sense. >> by the way, jim, top line growth is across the economy difficult. this is what's going on in america right now. >> right. >> with subpar growth pretty much everywhere. i had union pacific ceo on yesterday. growth is good. where is the growth good? in mexico because of nafta. >> that's exactly right. >> because they just -- they ruined the workers' wages doing that. you're not allowed to talk about it but it's true. >> people don't understand that a lot of this is a reflection of regulation that's gone amok in this country. >> oh, yeah. listen to toll brothers call. why are they doing well? they have land you can build on. much of the land in this country you can't build on it the way you used to because of regulation. >> that's exactly right. >> a real problem. >> it's meat. i love meat, though. i could never be a vegan. >> pilgrim's pride, nixed at

that. >> all right. jim, see you in a couple minutes. >> all right. >> up next, ken lan gown's greatest investments and stay tuned to "squawk on the street," reed hastings of netflix will join jewel be boors stein. helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial.

you are gonna need a wingman. and with my cash back, you are money. forget him. my airline miles will take your game worldwide. what i'm really looking for is -- i got two words for you -- re-wards. ♪ there's got to be better cards than this. [ male announcer ] there's a better way with creditcards.com. compare hundreds of cards from all the major banks to find the one that's right for you. it's simple. search, compare, and apply at creditcards.com. first round's on me.

. we are opening ken langone's portfolio this morning. talk about buying banks, wells fargo, jpmorgan. >> love the top and wells fargo and jpmorgan. look, the government's eventually going to get tired of beating up on the banks. especially jpmorgan. they'll get tired of it and it will stop the real value in that company is phenomenal. jamie is clearly, if not the number one ceo in the world, right up there. he's done a hell of a job. the same true with wells fargo. i was intrigued by it when you had the former head of wells fargo on the show a couple weeks ago. he said it all. but these are great values and they're doing a hell of a job. so i love those. i -- believe it or not, i'm getting pretty excited about facebook. >> because? >> because i think they're

demonstrating traction and revenue growth in terms of -- >> do you own facebook? >> yes. >> are you on facebook? >> no. i'm not on facebook because i don't know what to do if i got on it. >> i don't either. >> when did you buy? >> we started buying last week. >> wow. >> i think they got a business here. i want to say something, appealing to all of our leaders in congress, let's not argue about who's wrong with this veterans problem. let's fix it. let's get in a room and say here's something we can do bipartisan. here's something that we can sit and say, how do we get the backlog down? the easiest way is to issue an appeal to doctors and say, who would like to volunteer, whether you're a gastro enterologist or whatever you want a task force like world war ii. >> the latest 115 days kept waiting. >> just say we know we have a problem. >> 115 days. you know, there are people, you know, krugman used to say, this is the way the government can

run health care and run it great and now we sort of know -- >> i like your task force idea. >> i'm saying -- by the way, doctors will appeal -- respond to it. we need doctors, okay. last thing, this is coming -- >> can't you see where it says 9:00? we got to go. >> bye. >> come back soon. does it for us. time for "squawk on the street." ♪ >> good morning and welcome to "squawk on the street." i'm david faber with jim cramer. we are live from the new york stock exchange. carl quintanilla is in california at the code conference in rancho pales verdes, california. the apple/beats deal causing buzz at that event. more a few moments from now. futures this morning as we head into the open. a half hour from now. you can see we are looking at a positive open it would appear, as for the ten year note yield, setting ne