wall street. >> no, he's related to the mickelson/icahn situation and i don't think we set that up to explain why we were going to see jane to talk about all this. >> we know that at this point. jane thank you very much. that does it for us today. join us tomorrow. right now it's 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 back from san francisco at apple's worldwide developer's conference. we'll have more moments from now. a look at the futures as we start off the week we are looking at a potentially higher open and as for the ten-year note hitting records last week, we are inching above the 2.50 level that after hitting what,

as low as 2.44 or 2.43 last week. let's take a look at europe. you can see the marks overseas not too bad, a little more red on the screen. the china pmi released saturday night, people seemed to think that was positive. the nikkei in japan is up 2%. >> sent the bonds down a little bit. >> hence the yield back a little bit above 2.50. let a's get to our road map the dow s&p finishing may at record closing highs. the nasdaq outperforming both last month and stocks continue the upward momentum through june. after striking a deal to buy beatz the watch is on to see what apple will do for itsen core. carl is live from san francisco, he'll have the lowdown. carl icahn, phil mickleson

and billy walters are reportedly subjects of an insider trading investigation and icahn is speaking out. we'll have the latest on that coming up. we enter june with the dow and s&p at record closing highs and four months winning streak. the nasdaq has a 3% gain that it posts in may this week, in fact the markets will be bracing for friday's may jobs report and the ecb's interest rate decision on thursday and as i mentioned of course jim, you briefly remarked on, we did get a more positive pmi out of china, that was released i think saturday night that tends to have some impact. so here we are beginning in june, where we find ourselves as i said not too bad. >> you just talked about the nasdaq. if you recall, let's go back four weeks ago. what the trend was is to say the nasdaq is overvalued and that's going to bleed into the s&p, like it did in 2000, we were in april 2000 moment and that story

was obliterated. there were some stocks taken out and shot, and it was cordonned off to that group. the ipo stopped, so there was not a glut anymore, that could change of course in september, but everything that was supposed to go wrong didn't. in the interim, we saw some good jobs numbers. we saw interest rates go down to the point where people stopped talking about oh, boy, is it frightening at the federal reserve. remember tapering, we were supposed to sell stocks and tapering? >> yes. >> i don't believe in the china numbers because the baltic freight and copper is not adding up. you get a good china number, people say wait a second they were all bad before this and the takeover chatter is endless and the takeover chatter is what makes shorts really afraid. >> and activism, too, as we continue to see it rear its head, whether it's this morning with starboard and veco or moves on, we'll get to it on valiant or endurance holdings or another deal, ventas buying yet another --

>> ventas is nick shoorish again, he's involved with a host of deals, including darden and with aubrey mcclendon on a brand new company you'll hear about that hasn't come public that will be gigantic. >> this gentleman is who? >> nick shoorish, he runs american realty. thomas piketty talking about ceo pay, he's widely regarded as overpaying himself. he's created a lot of money for people. suki pays his people too much but that was a package put in a couple years ago so there's income inequality going on all over the place, companies shrinking the growth, broadcom, a heavily shorted stock in the nasdaq and there's too much activity in a normally slow time to be short and think that you can make money. >> okay, that being said, a year

ago this time, we started to suffer in the markets, tapering talk, of course, and the emerging markets, wow. they just really kind of recovered. >> i'm still not getting a good read in emerging markets other than people who have an axe to grind in emerging markets. mexico hasn't come back, brazil is terrible. india, perhaps private and foreign investment. china seems to be going down. they want me to invest in malaysia and indonesia and the philippines. shame me once, twice, three times, four times, you get your fees to take that money in, fool people with the idea of reaching for yield and we deal with the consequence of your reach for yield. i'm tired with those guys getting away with a free ride. i'm talking about the managers who always come on and says that's the great growth area. then we deal with people who didn't know what they were doing and went into that, take big losses and the next thing i know, wow, that was a shame. >> i know, geez, we didn't

understand cheap money, the idea of it going away might hurt the markets more than our own at home. >> reaching for yield is the dumbest thing you can do. dumb in the '80s, dumb in the '90s, dumb now. the people who tell you to reach for yield are shameless charlatans. i cannot play for dinner and tell the truth about these people. >> you haven't been up until this point? >> i felt last year i let people down by not saying that this could happen if rates rise. it was a bad thing i did. i knew it could happen but sensed those people always say hey listen, i don't want people to lose. professionals you can be there. individual retail investors it's not for you, there's not a lot of suitability there. people will come on air and tell you it is suitable. >> let's get to carl quintanilla, second time in less than a week headed out to the west coast, there in san francisco this time for apple's worldwide developer's conference. take it away, carl. >> it is a very big month for tech conferences.

we had the code conference last week. google's io conference later in the month but of course today, they call it the single biggest newsmaking event in technology, centered around one company, and that is apple's worldwide developer's conference here at the mosconi center in san francisco. 1,000 apple developers, 5,000 app developers. there's a lottery to get tickets to get inside. banners outside the conference saying "write the code, change the world." developers show up, they get the updates, they get the beta version of the code to write apps for devices debuting in the fall and that helps drive the demand. we'll see if there's any indication on hardware today. in the past jobs historically did unveil a refresh of an iphone here. we talked to mike gurman outside the mosconi center this morning and said what could happen in the way of surprises? here's what he said.

>> apple there's always surprises, qt is the really nice pipeline for the second half of this year so it's possible they'll talk about that today when they have developers and media watching closely. will there be a new iphone or ipad? i don't think so. they like to save those for the fall. it's possible to throw a curveball here or there perhaps, a new watch product or tv related product. would i count on it? no, but it's always possible. >> guys like mark who watch the company closely are not dismissing out of hand the debut of some wearable, maybe a watch, or updated set top box for apple tv. more confident in looking for a health book that would be an app that manages and aggravates all of your health and fitness data, itunes radio perhaps broken out into its own app to better compete with pandora and the smartphone news from the ft guys last week, who knows if it will

be a true platform in the sense of the word or maybe a certification program where apple gives their blessing to manufacturers of other products saying you are now blessed with the halo of producing a product that works with the iphone. tim cook's keynote is at 1:00 p.m. eastern time and headlines outside all day long. >> carl, i think this is again i'm hearing a change in the way apple likes to deal things, deal with things. is it possible tim cook comes out basically and says we've created a huge number of jobs. the real story is you, the audience, you've created more jobs than the federal government's created during this period. in other words once again the inclusion of people who are not apple, in order to make people realize that apple is more than just the company itself. >> that's a good point. obviously domestic mac production for them is a big political card. they've beenle to play it

lately. there is a sense the conventional wisdom is they're behind the eight ball. the beatz news from last week lets them come in with a bit of a head of steam. we might see jimmy iovine and dre on stage and some speculate a musical performance to get the buzz going. i think you agree, jim, the stock not withstanding they could probably use. >> maybe they'll have shakira, i don't know if you were in silicon valley but i love that show. >> no but i'm going to watch it right now. >> because the sales force has done, your dream force and suddenly dream force has become this event that it's a tough ticket. this notion of the tough ticket, kind of exciting again, isn't it? >> i wish we had a camera across the street because the line outside is always fun to watch, guys, who even at this late hour, a few hours before tim

cook takes the staplige, there a competition to get inside even though it's streamed and headlines, people want to see this in person. that says a lot about the buzz that apple continues to have years after jobs' death, of course, and years after -- one year after the stock was hitting those 52-week lows. >> carl, we'll be checking in with you of course throughout the next three hours. carl quintanilla of course in san francisco. we've got new developments regarding valiant's push to require allergan. we'll have that after the break and hilton introduces a new brand. simon hobbs will have a live and exclusive interview with the ceo. another look at futures, a lot more "squawk on the street" coming to you live when we come back after this.

questions this morning about an insider trading inquiry involving phil mickelson, william walters and activist investor carl icahn. scott wapner has a closer look at mickelson, icahn and the whole situation. >> already reports that the investigation we're talking about, which has shocked wall street and the sports world, has potentially hit a snag. the "wall street journal" saying the investigation going public may have hurt the government'serts to build their case. for his part, carl icahn has

denied any wrongdoing, telling me exclusively over the weekend he knows of no fbi investigation, hasn't received a subpoena and has never given inside information to anyone. he also said that, while he's heard of phil mickelson, the two have never met or spoken. icahn telling me he's proud of his 50-year career and unblemished record and that's why this news is so stunning. people have certainly criticized icahn's style and takeover strategies over the years but he's never had a big dust-up with federal authorities. blockbuster creditor sued him four years ago alleging he used inside information as he converted his equity stake to debt but that case was dismis d dismissed. mickelson is mostly mum releasing a short statement over the weekend from the memorial golf tournament saying "i've done absolutely nothing wrong. i have cooperated with the government in this investigation and will continue to do so. i wish i could fully discuss this matter but under the current circumstances it's just not possible."

mickelson's sponsors, amgen, kpmg and barclays, and callaway says "the reported investigation does not involve callaway and thus we have no comment on that matter. we would like to note we have a longstanding partnership with phil and value our relationship with him. he's always acted with the utmost professionalism and integrity in our dealings." important to note neither mr. icahn or mickelson are accused of any wrongdoing at this point but guys, this was a shocker, friday night, 8:00 p.m. when we first heard about it. >> yes, in dealing with icahn as i know you have, scott, and i have for so many years, it seems odd to me. >> yes. >> you can tell the press whatever you want and he obviously won't do that. i don't understand what benefit

could possibly -- these things, i don't know, i mean the trade was in 2011, right? i remember following this fight obviously for clorox, where he failed by the way, icahn, one of his big defeats. >> that's the irony in the whole thing. >> scott, i read this, and first thing i thought was how outrageous is this? obviously unless there's some weird guy who is between the government and icahn, how the heck did this get out? the next thing you know, i start thinking maybe mickelson is not a great guy. this is how you wreck people. this is how you wreck people's reputation. you don't have an indictment. you put something out. you don't arrest, and you wreck them. who would ever allow this to happen? >> now you're obviously, jim, they forced carl icahn and phil mickelson and this other gentleman people don't know a whole lot about, billy walters, to come out and have to defend themselves. at the top we noted how the case

could be hitting a snag, because the investigators apparently had been doing electronic surveillance, human surveillance or whatnot, then when this was made public by two fbi guys showing up at the memorial golf tournament in ohio, after phil mickelson finished his round, then it becomes public. now you wonder what the case is. on the other hand, as you know, jim, from your many conversations with pete barrara, the u.s. attorney in manhattan, there's been a crackdown on insider trader. his record is 80-0? >> you know, but look, you want to go make clear that there's an investigation, you have the fbi show up at a tournament. you want to do it a way where you don't want to ruin this guy, you have his lawyer come in and say listen, this is the way you ruin someone's reputation. it's not the american way. it's what happened to giuliani when he wrecked some reputations way back. >> early arrest.

>> yes, it's not the way we do it. i looked at the trading in d foods in 2011, you lost anything if you did anything in d foods. i thought you had to make money to have an insider trading investigation. >> you'll be following throughout the day of course. we'll check in with you. >> final thought for me on this activism is something that we know the federal authorities are looking more closely at in terms of the circles of information, and what does and doesn't actually constitute material information in an activist situation where there is occasionally conversation, people are bringing ideas to an icahn for example and things of that nature. we'll see how it goes from here. up next, the mad dash with this man right here to my right. we'll count down to the opening bell. here's one more look at futures. we're back in just a couple of minutes. what can your fidelity greenline do for you? just take a closer look. it works how you want to work. with a fidelity investment professional...

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♪ over your shoulder, yes. sorry, sometimes got to finish those songs. we have a "mad dash" on monday, 7 1/2 minutes until the opening bell. in terms of federal probes and people looking at what goes on. it's alive and well, well, well. starboard getting active in a new name. >> it is a remarkable company, a dominant packaging company. you see the assets they have, a lot of real estate assets and different businesses especially chemical business, we know those are red hot.

starboard comes in and write a thoughtful letter that says maybe there's a lot of fat here. this is that new thing we saw. >> 5.6% ownership, they want to unlike value. we'll see. right away they do hit with you things like corporate overhead expense 4.2% of sales. we haven't heard from them in management. three times higher than the 1.2% average. >> it's a great company and done well. no, the stock hasn't done well. the company's done well but maybe with the changes it would go better. i don't think it's a bad idea. it's a combination of mead office supply. they have a lot of real estate. it makes tons of sense to me. >> and of course a fight to replace all of darden's board of directors. each time we report on these things we incense, enable some of the activist, we give them a platform, their name becomes bigger and powerful.

broadcom. >> we've seen them flailing, try to stay in qualcomm's orb so to speak. they're off-loading the cellular base band systems, $700 million in savings. it has been a black hole. david, it is about time that broadcom focused on profitability. if they do, the stock is indeed worth a lot. it has missed quarter after quarter, be very careful. be very careful. >> do we have any idea what this thing is worth, the cellular based band business, jpmorgan is helping them try to sell it. >> frankly it may be worth very little. what's important is that it's been a black hole for r&d and broadcom has historically had a great reputation but if you were to look at the long-term of broadcom, are you kidding me? have you developed absolutely no value? getting rid of a division that doesn't have a lot of value is saying the rest of the company may be worth more than we

thought. >> we got so many other things to cover including bill ackman and valiant getting a lot more, what would you call it, almost constructive in the sense of they're coming hard at the hostile offer for agn. that's one of the stories' we'll be following when we come back. ♪

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a research tool on thinkorswim. from td ameritrade. you're watching "squawk on the street" live from the financial capital of the world where the opening bell is set to ring in two minutes. jim, we've been talking about coal. you've said many times coal's done. >> right. >> this morning we get the press release announcing it, not really, the release from the epa of course discussing what we've known was coming this morning, far-reaching, new rules that will be put into place over the next well many years. >> right. >> involving combating climate change and by that, trying to cut carbon emissions in this country, particularly those from coal-fired plants and the like. they are now out. just having been released. by 2030, the steady and responsible steps the epa says it's taking will cut carbon

emissions from the power sector by 30% nationwide, below 2005 levels. that's the level they're choosing, 2005, saying 30% below what we were doing back in 2005. >> i don't mean to shock people here, but this is very pro-industry, much more than i thought. because they're going to give governors a lot of latitude. when you deal with aep, and i've dealt with nick aikens, he was on last week. the governors are pressing them to use coal. they don't care coal, natural gas, they had to build these 40-year plants under jimmy carter. they've receipt ftrofitted and retrofitted. gchb might be more sympathetic that be the epa. this is not as bad as i thought for the industry and i think that leaked out a couple weeks ago when you saw a spur in all the coal-based utilities. don't freak out on this. it's not freak outable.

>> flexible time line for states to follow for submitting plans to the agency, the epa with plans due in june 2016 with the option to use a two-step process for submitting final plans. [ bell ringing ] it more time is sneneeded. >> you're not building another coal plant but the existing coal plants are not going to be shut like they made in canada. canada they called the utilities and said guys you're done. not here. >> you heard the opening bell for this monday, taking a look back at hq there on our real time, cnbc real time exchange, showing a bit more green than red. here at the big board -- >> nice video of oil stakes. very smart. >> accommodations in the natural resource industry. >> this is what exactly by the way we've seen other companies get into like clean harbors, might be interesting to unload their businesses, just an idea. >> this is where people can stay. >> man camps. >> man camps. over at the nasdaq alliance fiber optic products doing the

honors. we're starting off this morning, we have a lot different things to look at. we mentioned of course in your mad dash broadcom, we haven't gotten to endurance specialty holdings. we haven't gotten to, where they've increased the pressure. and ventas, i wanted to come back to as well. >> deb cafaro is one of my bank of 21, she's created a tremendous amount of wealth building an incredible business in assisted living. senior assisted living, and she sells one of their, you know, ventas to buy this business, that is being offered by american realty. arcp has become the most controversial real estate investment trust in the country because nick shoorish has big -- >> triple net lease, isn't that them? >> yes, they did red lobster. >> they're the ones that agreed with darden to buy the actually buy the restaurants themselves

and doing a sale lease back. >> exactly. arcp, we'll get nick shoorish is a likeable guy, got a loss of things going on. ventas because of the way they're doing the acquisition the stock is hammered. they were yielding 5.5 and they've been bond market equivalent. i would not run away from deb cafaro. there's arbitrage presh ubsure this is a good deal for both. >> we're talking about valiant being a rollup, this is rolling them up, too. >> right and at the same time no one's ever said anything other than good things about deb cafaro because she created tremendous wealth and these are companies that do quite better under one roof. she's been a great rationalizer. deb cafardo, you talk about her, everyone has the same comment about her. she is the best operator in the industry and doesn't get enough credit. why? one of the least promotional people i've ever met. i begged her to come on for

years. finally i used every real estate investment trust contact i had to have her come on. she comes on, self-efacing, but she is not a promoter. she's an operator and a good one. >> i want to look at shares of ihg, intercontinental hotels group. later on this morning, as our viewers may know, simon hobbs will be at a hospitality conference not far from here interviewing the ceos of hilton and of starwood as well, fritz van passchen. there are a number of rumors that impacted the stock for the better and potential buyers for the worst. i can imagine van paasschen is not going to talk when asked about the takeover but people close to the company is that starwood's not interested. starwood is not interested. >> the pressure on starwood is to buy back stock.

it's got a great yield. simon's done remarkable work on the idea that no new hotels, very few hotels have been bought, have been built, so there is an idea that you can buy them cheaper than you can build them. >> some of the lower end brands you'll see, we also get inversion with this thing. tax rate is not that great but i come back to it on the tax inversions, as much about being able to deploy cash held overseas back in the u.s. without having to pay taxes on it that the inversions are also being pursued or why the inversions are also being pursued so aggressively. that's not stopping. i know i say that all the time. we will see more. i wanted to point that out on ihg again, i'm sure we'll get a lot more insight into the overall industry from simon when he sits down with the ceos. from what i am hearing from sources no interest on the part of starwood in intercontinental. >> we have a lot of '80s things happening. in the 1980s that was the great food consolidation year, pillsbury, general foods.

we had another thing happen at the begin of the '80s. oil companies would put out releases that they had found oil, dome we opatrol yum goes to 400. we're back. good rich petroleum talks about fines in the louisiana/mississippi border. you see the stock take off here. this is incredible to me that we are now back in the era where there's so much oil in this country that when you hit pay dirt, you issue a release, your stock goes up. david, this is early '80s, and then it was canada, now it's usually eagleford, east texas or south texas. >> permiant, still. >> rbm does the best research, new pipeline this time coming from the delaware basin. you get that pipeline to the east it's remarkable. that will be eog, you know that's my favorite. i keep recommending it because they keep finding oil. >> enron, oil and gas. >> well, you know, yes. >> that's what it was. >> yes.

i keep mentioning endurance specialty holdings. why? because they have increased their proposal to acquire aspen insurance holdings to $49.50 a share in cash and stock. they also are coming after the board of directors trying to increase the size of aspen's board from 12 to 19 direct, which shares of endurance are doing now. another one of the contested situations out there, and we've got quite a few of them as our viewers well know, hillshire or this deal people are not that focused on or valiant, which i'll speak about in a few moments, going after allergan. there are quite a few of them out there, whether it's pfizer and its inability to want to go fully hostile and not be able to complete astrazeneca. >> is there an insurance wave of consolidation? apparently, i hate these stories, i'm going to say something and you're going to shoot me down. daichi life is supposed to be talking to protective life. it is an expensive company.

when we report on supposed to be talking, where is the value added? the only reason i'm doing it and i would not do it otherwise is protective is up $7, so i feel like going back to last week, we talked about smith and nephew, maybe it has a bid, maybe not. that's another 1980s thing, you would hear things from the late great aran greiner at drexel saying wait a second, maybe general foods is in talks and you'd say buying general foods. i don't want to go back to that era but we are in an era where everything is rumored and people should be sure they have the facts before they get in. >> there is now a good deal of robust m&a activity. all the reasons that have been there for years but this time there seems to be a psychological change in the willingness of the decision-makers to actually say okay, we're going to go for it. perhaps having seen a competitor do it. it tends to force their hand more than they might otherwise,

perhaps also some decisions in terms of deploying capital, not just for stock buy-backs any longer but in what might be more productive realms, if that is considered to be m&a. we've seen lots of destructive m&a in the past but shareholders of companies doing the acquiring, not in the case of hillshire but often the case believe they are going to be good stewards of their capital and applaud when they see a deal. >> francois nader has a big drug in the pipeline, done unbelievable drug work and there's rumors that he again only commenting on it, because the stock is up $5. >> yep. story on friday, that's right, ft alphaville i think. your caution is well thought out, because -- >> it's painful. >> yes, because you can get caught in these things and i certainly don't have time to track down the different rumors and see what's true and not.

you were surprised at that. >> he has a great thing going. he has a big approval he's hoping for and in the fall and why would he sell now? why would he sell? he's a terrific operator. i'm going back over a lot of things that he's told me in the past, he's got a july 24th nat parra hearing in hyperthyroidism. why would he sell now? it sounds wrong to me. >> that's important to share. bob pi ssani is back on the flo. >> mixed market, happy monday. s&p is at a new high. transports every day, they're a leadership group, energy and materials, better on the cyclical side. gold's down again, we dropped almost $50 in the last week or so on gold here. look, everybody over the weekend was again trying to figure out what's going on with the global low interest rate environment. i told you last week and it's still happening, the biggest beneficiary of low interest rates have been emerging market countries and frontier

countries, they're doing fantastic. double digit gains. nobody is paying attention to countries like turkey or egypt or the fill peeps or vietnam. i've listed the etfs here. there are a little bit of currency effects going on, because these particular etfs don't x out the currency effects but you get the point and the old-fashioned emerging market ones that have been around for a while are doing better. indonesia is up 18%. thailand is up rather dramatically. the one sick man out there is china. that's the problem with these emerging market etfs. this is the one everybody owns because it's so top heavy in china, it's really been underperforming. it's basically up 1% to 2% so far this year, that's far below what most of the other emerging markets forring. put the fxi up, that's down about 4%. this has been the sick man of emerging markets for years and years now. maybe it will get a little

better at this point. the chinese pmi numbers for may were better than expected but still dramatically underperforming. why the outperformance? number one clearly is low global interest rates. that's really what matters in these countries. that's powering them but other people over the weekend argued there are some other things going on, the valuations are compelling, when you have developed markets at international or historic highs, the valuations are more compelling and while there's been a few crises in ukraine, thailand, none have really ripped into the global markets in any substantial way so there's your points on what's going on with the frontier and the emerging markets. let's talk about some gapers right now. broadcom was up dramatically in the pre-open, up again here now, exploring strategic alternatives for their cellular base band business. that would be a positive for qualcomm, either going to sell or shudder that business here. con's excellent numbers overall, same-store sales up 16%, that was a bit of a surprise, tripor

up, allergan increasing their offer on friday talking almost $53 billion now and pershing verb behind the whole deal trying to replace the majority of the board members on allergan's board here. finally, i just want to point out some of the early comments on the second quarter that i'm hearing. i'm rather surprised, thisser' not very good right now. so far, there have been 117 companies have issued guidance for the second quarter. 103 are negative. that's a shocker. i hadn't done these numbers until this morning. almost 8:1 negative to positive numbers, that is very, very high, and unusually high. as of right now the early indications is much more negative than positive commentary for the second quarter. by the way, david, we are getting 3.5% earnings growth for all the commentary you started out with negative earnings growth for the first quarter, 3.5% is the number that we get right now and the bottom line is, we usually end up beating by

3% or 4 percentage points, that's what's happening now. still meager but still enough for a nice little gain. back to you. >> thanks very much, bob pisani. wanted to come back to something bob mentioned the fight for allergan. 2:30 on friday, strange timing it would seem when we learned after allergan's stock halted that valiant was increasing yet again its offer for the company, only two days after having increased it originally. the 58/30 cash portion of the offer goes to $72 a share, roughly $23, little more than that above where valiant started its bidding for allergan, bidding against themselves of course. >> right. >> strange timing on that. they follow this up morning with what i would argue is perhaps even more important which is outlining a path here that is much more realistic and typical of what we see in a hostile

fight. remember this reverend dam bill referendum bill ackman was talking about, none of it was bind,'s that he aout the door. pershing is trying to replace the board of directors at allerg allergan enough of them so they can say why he to this deal and there's the possibility of valeant moving to an exchange offer. it's on firmer and hostile footing with a $23 increase from the original bid from valeant. timing wise as i pointed out many times, this has a ways to play out. it gives flexibility to allergan to try to consider its options, but as i've also said many times it's unclear that allergan is going to say no, no, no, and five months later, let's call it november at some point, when the meeting is actually held, they're going to be able to win, and retain control of their own board of directors. so we shall see what it is that allergan can actually do.

this is no longer a delevering transaction for valeant. the idea that allergan to colever up its balance sheet more could be a deterrent though not completely a deterrent. jim, valeant needs to get its stock price in the right direction, which is up. typically the stock price would move higher but allergan itself has attacked them wholeheartedly now full-throatedly so so-to-speak and it's hard to imagine, though we have seen it in the past them turning around and saying okay, when 44% of the consideration that you're getting as an allergan holder is going to be in valeant stock, where you own 44% of the combination, excuse know. >> i've seen behind the scenes and we all have our sources, it's not like they're coming out and saying please go on tv and say this, i'm getting pushback from real top ceos saying this is an outrage, that david pyatt

built a great company and imvented new drugs and done great things. i have never seen a pushback before from prominent ceos saying when are you going to stand up and say something's wrong? >> they don't mean a thing here. the only thing that matters is his shareholder base and his base has not been making a great deal of noise. you haven't seen the big shareholder come out and say you've got to go to the table. that could change. pershing square saying it attended two in-person meetings last week, six in the top ten non-index investors representing 29%. they're starting to get real support from them who believe a proposed merger is highly strategic and create enormous value. i would argue forget your ceo friends. it's only when his shareholder base starts to speak publicly which they haven't at this point. >> i only mention it because this level of activism, there will be a backlash at a certain point. you're right, the ceos who came forward to me, there are trees falling in the woods. >> a big spread if you do 0.83

plus 72 bucks a share and the possible cvr for darpin as well. we're going to get one quarter of earnings if not two between now and the special meeting to replace the board and the question becomes still what can allergan if anything do? a lot of firepower used here early, early in the battle by valeant i would argue. they come with the big guns and maybe haven't saved a lot for the end. rick santelli at the cme group in chicago. >> thanks, david. pyramid shift on the yield curve. most are up several basis points from their settlement on friday and if you look at a one-day chart of tens you could see it shot up a bit but maybe if the two-day chart gives you a better technical glimpse of the notion that the minute we traded above the high yield low price of 2.49 from friday, you see it

accelerated a bit, a technical feature in important of the ism number coming out. one-year chart reveals we're hovering in a zone of low yields that dates back to june of last year. let's look at relationships with other sovereigns. we've talked about this a lot, keeps you out of trouble. ten-year chart of boones versus tens, we hover in a zone set up in april, basically at 9.5-year wids even though there's been a readjustment of some of the southern securities against the boone, this relationship against tens is not altered much. if you think this is wide, look at the 17, yes, 1-7, 17-year wids of boones versus the gilt. the uk ten-year dates back to 1997, since we've been this wide. currencies in lieu of the meeting thursday's ecb and overnight germans inflation rate in a variety of their areas of the country and definitely less than expected, but tomorrow, we get the eurozone aggregate cpi,

we should pay attention to. you see the euro there, looks like 136 is what we see the currency defending in front of the ecb decision to ease or not to ease more, and the last chart is the dollar/yep and it certainly is sideways, even with abe's 60-page reform, yes, 60-page, footnotes on any legislation and ideas here is usually five times as big. david, back to you. >> thank you very much, rick santelli. bristol-myers making news in the battle against cancer. we'll have a live interview with the drugmaker answer head of oncology coming up. lots of buzz around apple as it gets ready to kick off its worldwide developer's conference today. carl has more in san francisco. "squawk on the street" still here at the nyse and we're back after this.

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internet, e-commerce segment. it's been bulletproof and the stock's name is zillion row, letter z, you roar as woolworth and use the anachronism of a dow stock. this morning, both pacific crest and rbc downgraded saying there's little upside, that it sells at 12 times ev, which is the highest of any of the companies other than fire eye. david, my prediction is this. the ceo, spencer, is probably behind me saying how can you mention this? spencer is one of the most activist ceos and someone i have to tell you a great spokesman, the zillow ads are everywhere. he told you he'd carpet bomb in order to wipe out true leo, although maybe there's enough room but zillow is the most expensive and i would be careful speculating right now that you have a bottom when two firms downgrade. what happens is then the salesmen will get on and say listen it's not too late to sell zillow but they should also add

one other thing, until spencer comes on and says it's cheap. >> and he will. >> are you kidding me? i think he's booking himself right now. >> there he is. what do we have on that? >> alliance data systems is a stock that isn't talked about enough. it is one of the best barometers of retail sales. ed heffernan, i love him, he gives you the known. gary evan has teamed up with relational. is he another one of the wildcaters that is changing the face of america. he's got west virginia properties. there is oil in a lot of places we didn't think there was oil, david, and that is really boosting employment in this country. i'm telling that story. you can't stop me. >> all right, i won't. 6:00 tonight "mad money." breaking news on ism data enaconstruction spending, top of the hour. moving across the world? to join a start up. so he sent money and rented an apartment in a new land.

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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™. welcome back to "squawk box." breaking news. april construction spending rising 0.2, one-third of expectations, but last month, the 0.2 was revised up to 0.6, so kind of call it a wash to some extent. may ism, 53.2. this is indeed a miss. we're looking for a number closer to 55.

53.2 equals what we saw in february. we have to go to january's 51.3 to find a lower number, and prices paid, buckle up, move from 56.5 to 60.0. anybody looking for signs of inflation? sarah, back to you. >> thanks very much, rick santelli. want to dig deeper into the market reaction and the data. we've got our seepor economics reporter steve liesman joining us from hq. this was a miss on manufacturing but indicated expansion following a few months what have we've been seeing. >> this number has not done a good job over the years since the recession, forecasting the level of growth. anything above 50 is definitely growth. and this is a miss as you say, i can't look in the internals and find anything good. the only thing i know is that come into this report, six of the seven regional manufacturing surveys had indicated pretty strong growth in manufacturing, which is why you had some

buoyant numbers out there in the 55 range. the construction rebound is going to flatter probably the first quarter of gdp but not the second, so 0.2 a somewhat higher even. we'll check on that as the morning goes by here. the employment index in the ism is the only troubling one here. 51.9 and i want to underscore what rick said about prices paid being up to the 60 range from 56, something to watch right there, the employment index falling to around 52, 54.7, sarah, so definitely a miss, something to watch, big week of data, we'll be following all the data including culminating on friday with the jobs report. david? >> thanks very much, steve liesman. a golfer, a gambler and one of the world's greatest investors caught up in a federal insider trading inquirinquiry. scott cohn is at hq is has the latest. >> david, the fact that we're

even talking about it at this point does present a problem for federal investigators if it they were hoping to do any undercover work in the case which makes it more curious that federal agents conspicuously approached phil mickelson last week at the memorial tournament in ohio. over the weekend mickelson said he's cooperating. >> i have done absolutely nothing wrong. that's why i've been fully cooperating with the fbi agents, and i'm happy to do so in the future, too, until this gets resolved, but for right now, hopefully it will be soon. right now i can't talk much about it. >> an attorney for mickelson says the golfer has been told he is not a target, but what about the others? gambler billy walters isn't talking at least not to the media. he supposedly is the middleman for tips from carl icahn, who insisted to our scott wapner friday night he has never given out insider information and hasn't heard from the feds. the "wall street journal" reports the publicity scuttled plans to wiretap icahn, but that's not the only way to make

an insider trading case. >> the government at least the sec part of the government can do this by circumstantial evidence, if they show telephone calls immediately before trades or meetings that occurred and then trading that took place. >> the stock at the center of it all is clorox, a chart from 2011, the big jump in july is when carl icahn announced a 76.50 a share takeover bid. days before it was heavy trading in color ox options. did someone like mickelson and walters know the bid was coming and would icahn have violated anything if he was the source? the law is murky, david, and sarah, and so are the facts here. >> absolutely, which is why we want to dig into it further. thanks for the setup, scott cohn. where does this case go from here? richard holwell, former federal district judge in new york,

certainly a high profile cases. what do you make of the case the fact that it's in the press and that may keep them from going further like wiretaps? >> it's curious how it got into the press. certainly the suspects, targets or subjects or simply people of interest, have no reason to be leaking this to the press, so some can say that maybe the government has leaked it to attempt to stir the pot, get information flowing. >> would that work? >> it can work. >> they aren't just smearing the high profile people we're talking about? >> this may not be a matter of mr. icahn himself doing something wrong or alleged to do something wrong. lot of people who work for his organization, maybe an intern said something he or she shouldn't have. >> i come back to icahn and what would he have to gain from sharing that information, and would the government, if they were to try to bring a case, which we know is far from conclusive at this point, would they have to prove that there was some benefit to him in

giving the information to somebody else? >> well, there are a lot of problems with any kind of suit against mr. icahn at this point. not the least of which is the fact he probably didn't have any inside information about clorox. so the fact remains, though, is that there is a gap in the area of tender offers and there's nothing particularly legal from people who are acquiring stock in making that public. >> and you know, there is a lot more talk about the authorities looking at activism and the chains of conversation and information that take place but this is an admittedly murky area right now, knowing that you're going to acquire stock in a particular company and potentially try to replace the board or get them to do something isn't necessarily material, is it? >> well, it is material not inside information, and possibly inside information in comparison to mr. icahn's company but

certainly not with respect to clorox. >> what is your take overall? is this a big nothing and that's why they did leak it to the press? >> there is certainly smoke here. these investigations start either with the financial regulatory agents or the sec that monitored trading before these types of announcements, and they saw something not unusual. >> it's going to be difficult to prove as david said the fact that it was material, nonpublic information that was being leaked. >> absolutely correct. >> what about the timing here? you cite those things. usually we see action within weeks sometimes when we see unusual option trading or something along those lines, and somebody's brother-in-law is taken away. this has been four years. >> this is normal to see this type of movement before an announcement. it's not always a sign of trading, a sign of information, sometimes you know mr. icahn has filed a 13-day saying he's got 5% of the stock of the company, people are going to anticipate

he might make a run on it, if only to drive up the price. >> my point is four years passed since this trading took place. what does that say about where they've been? >> timing it self is not necessarily a negative here. the government has its statute of limitations. yes, it's starting to feel a little steal but if they thought they could get the goods, it wouldn't stop them. >> what is the next move from the prosecutors. do they have enough to send out grand jury subpoenas? >> i think they do. they surely do and now that it's public they have no reason to scurry around, if you will, quietly. they will issue document request, the sec probably will, the grand jury could be impan impaneled. there might be one impaneled right now, we don't know because that's secret. >> what is your guess here what happens? i know -- >> my guess, smoke not fire. >> smoke not fire. judge, as always appreciate it, thank you. >> my pleasure. >> judge holwell joining us here at post nine.

top ceos in the hotel industry are gathering in manhattan for the 36th annual nyu hospitality investment conference. simon hobbs is here and joins us with a special guest. >> good morning to you and hilton kicked us off at the nyu investment conference by announcing a new brand for four and five-star hotels in urban locations that they can kind of mop up those that are not already customers, joining us now for cnbc exclusive is the ceo of hilton worldwide, chris nassetta. >> good morning, simon. great to be here with you. >> why when you are doing as well as you are with the ten brands that you have, you've got 18% of the hotel rooms under construction around the world, do you need yet another brand? >> we do have 18, actually 18.5% of the rooms under construction in the world and number one in every single region in the world but the reason we launched curio this morning is simple, responding to the demands of our customers and owners.

both of our customers and owners have said increasingly they see an opportunity for urban and to some degree resort assets that are very unique in their characteristics in a particular market but don't necessarily fit within the confines of any of our existing brands. >> sure. >> and our owners want to serve customers and obviously we want to serve customers. >> another brand coming up, accessible lifestyle brand you'll launch before the end of the year. you said you think it's a mistake to target the up and coming generation of travelers, the millenials, as your rivals are doing. why do you think they're making a mistake? >> i don't think it's a mistake. i think what i've said is that i think all of our brands 10, now 11 with curio, need to appeal to a broad base of customers including the millenials, not that any one brand would be solely focused on any one age cohort. in our lifestyle brand which we're not talking about today but briefly, we'll talk to you again in the fall when we launch

it, it will appeal to a broad array of customers including millenials and may disproportionately weight heavier to millenials. all of our brands, there will be a segment of millenial customers we are trying to appeal to. >> chris, you are a big personality backed by blackstone, which is a huge owner of assets now and people wonder what your big thing will be. at the moment you're very focused on paying down debt, up to $9 hub million this year. >> that's right. >> to return to investment grade by the end of next year probably. >> that's about right, yes. >> why don't you accelerate that? you own an entire block of manhattan on park avenue. >> we do. >> why don't you sell the waldorfs aer waldorf astoria? >> we are looking at all of the options and particularly the waldorf astoria.

we've talked publicly on one of my visits with cnbc about the options we're exploring. >> are you waiting for people to say yes i'll buy it? >> the waldorf is a complex asset in terms of what we could do with it from a use point of view and structurally what wha makes sense. we're just not there yet. clearly what we're looking to do with the real estate is maximize the value, but we think we're in a very nice part of the cycle for growth and operations. we have a bunch of value enhancement opportunities including the waldorf that we think are going to drive significant value. >> i have to cut you off, so many questions i want to ask you and we run out of time. >> keep going. >> you're accelerating that pipeline and no impact on the balance sheet and no acquisit n acquisitio acquisitions. the hotel owners are paying, we're not paying, the balance sheet remains as it is. >> that is correct. >> which makes me think you're preparing people to do something with the balance sheets. let me ask you directly, are you

the guy behind this report of a $10 billion takeover for intercontinental in the uk? >> we were not. >> would you like to take over someone like intercontinental? >> that is not in our plan. what we have with our 11 brands, soon to be 12 brands with the growth profile that we have, with the 40 million plus honors members we have hitting broad geograph geographic, geographies around the world with very broad geographic distribution and significant chain scale distribution, honestly, simon, we think we have everything we need in the company, to be very successful, which is i think supported by the fact that as you described when we started that we're the fastest growing in the world. >> but at the same time the way that the tax system works means you are at a disadvantage, some would say, from being in this country, tax domiciled here, why don't you do the tax inversion like the pharmaceutical companies are trying into the uk, and actually save maybe 20% of your tax bill?

>> we feel quite comfortable with our tax structure and if you look at what our cash taxes are, they're at a reasonable level in the high teens, and so a lot of people have looked at those types of transactions. we're quite pleased with the structure of what we have, and what's in place. >> have you looked at it as a possibility? >> no. no. not in any serious way. >> would you look at it as a possibility? >> no. and the reason you and i pointed out, we're being successful executing against our plan with our current structure. >> it's good to see you, chris. >> good to see you. >> chris nassetta ceo of hilton worldwide. still to come the ceo of starwood who may have been bidding $10 billion for intercontinental. david, you don't think they're interested anymore? >> i can tell you i'm looking forward to what fritz van paasschen has to say. sources close to the company say they are not interested in ihg. that was an interesting interchange you just had with

mr. nassetta about the same subject as well. i'm surprised that stock is holding up as well as it is. ihg shares down about 1.6%. we'll get back to you later. >> we have an exclusive interview with ihg on "street signs" later. mentioning that on the program. >> see you a little bit later in the hour. let's send it over to dominic chu for a which can market flash. >> mastec took a hit after it expected second quarter results to be negatively impacted by new and unexpected delays in wireless prong spending as well as weaker than expected oil and gas segment results. down to session lows about 11% off. mastec is one of the companies that's taken it a little bit harder than the overall market today. back to you. >> thanks for pointing that out. coming up, if you use an ipho iphone, ipad or a mac, today

could mean big changes for you. apple's worldwide developers aconference kicking off in san francisco. we'll take you there live to get a look at what we can expect when "squawk on the street" returns. e financial noise financial noise financial noise

financial noise

in just a few hours, apple's ceo tim cook is expected to take the stage of the company's highly anticipated worldwide developer's conference in san francisco. carl quintanilla is live outside the event with a look at what we can expect.

carl? >> david, three hours and counting until tim cook's keynote as you said at 1:00 p.m. eastern time. the doors just opened a few moments ago at the mosconi center in san francisco. some of the folks have been in line since 2:00 or 3:00 this morning. lot of them wearing this black jacket that apple gave away to attendees, has the number 14 on the back for wwdc14. will it be an iphone? pretty much no. anybody you talk to is skeptical on that, but the software we see could give some indications as to what a phone might look like this fall especially if the software tends to work better on a bigger screen. we will see. look for some possible improvements on the ipad, some clarity on the beatz acquisit n acquisition. this show is becoming more and more important as apple becomes less of a hardware play and more of asoftware play. the iphone is half of revenue. growth has to come from

somewhere else. that was a big part of goldman's call last week where they moved their target to $720. we're going to cover it all, beginning at 11:00 a.m. eastern time on "squawk alley" and that leads to us tim cook's speech which begins at 1:00 p.m. eastern time, 10:00 a.m. local. should be an exciting morning and in true apple fashion, guys, the stock is down, we'll see that changes after the keynote. >> carl, btig pointed out it usually declines more than 1% on the day of the wwdc and 1.5% on the day after. lot to look forward to from you. good to see you, carl. see you a lot more in the next hour. up next here on "squawk on the street," the head of oncology at bristol-myers gives us the latest on its fight against cancer. we'll be right back. moving our y to new york state. the numbers are impressive. over 400,000 new private sector jobs... making new york state number two in the nation in new private sector job creation... with 10 regional development strategies

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and global broadband network free you to focus on what matters. with custom communications solutions and responsive, dedicated support, we constantly evolve to meet your needs. every day of the week. centurylink® your link to what's next. the american society of clinical oncology is the world's biggest cabber is research meeting and it's under way in chicago. our biotech and pharma reporter meg terrell joins us live with a special guest. meg? >> hey, sarah, that's right. i'm here at asco with brist

bristol-mye bristol-myers' head of oncology, dr. michael giordano. thanks for joining us. >> it's nice to be here. >> you're presenting important day in in melanoma and the first drug showed a survival benefit for patients with melanoma. tell us how the landscape is shaping up for people with this kind of skin cancer and how it's changed over the years. >> thanks. this has been a really exciting for broistol-myers squibb. our strategy is to focus on the durability of response and the potential for long-term survival is being realized at this congress. for example this morning we announced very important data on the combination of urevoi, first drug approved for advanced melanoma in combination with your oekd checkpoint inhibitor and that study in advanced melanoma, 88% of patients were alive at two years. this is a phase one study but

those survival rates are unprecedented. >> huge advances there. these drugs aren't without side effects. tell us about the safety profile of them. is that concerning? >> as pioneers in the treatment of cancer with immunoon kohl, e oncology, the first drug we approved, we instituted treatment algorithms which help cancer doctors identify and treat the side effects so we can optimize the benefits for patients. we put the same treatment algorithms into our programs for nevolamab and i'm cop fortable the oncologists will be able to use that. >> can the success be translated into other kinds of cancers? what are you seeing there in terms of lung cancer and solid tumors? >> i'm very excited about the conference. renal cell and lung cell khan sar, the strategy into durable response, potential for

survival, are playing out. we're presenting today some exciting data on renal cell cancer which has given us a path forward to combine those two agents to be able to improve upon the standards of care. similarly in lung cancer, bristol-myers squibb has a broad program across the histologies, the lines of therapies and we're confident we'll have the right program designed for the right patient population to deliver the potential for long-term survival. >> and a lot of people, you're talking about combining drugs and to have really good outcomes with you of course you have two drugs and they could be expensive, the average cost of a branded cancer drug up to $10,000 a month. how are you think being price with the combinations of drugs? >> we take a thoughtful approach and at bristol-myers squibb we're committed to make sure patients have access to innovative medicines. the treatment for advanced melanoma we have a robust

treatment, patient assistance program in the u.s. which ensures these patients can have access to this innovation. >> dr. michael giordano, thank you for joining us. >> thank you. >> sarah, back to you guys. >> thanks very much for that conversation, meg terrell. look forward to more interviews from you throughout the day at the cancer conference. straight ahead what carl icahn had to say about the sec investigation involving him and phil mickelson. plus the epa wants to cut carbon emissions by 30% by 2030. they're set to make that announcement any minute now. we'll have it for you live after this quick break. she's still the one for you.

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a lot of questions today about an insider trading inquiry involving golfer phil mickelson, the las vegas gambler named william walters and activist/investor carl icahn. scott wapner has a closer look at mickelson and icahn. >> there are still more questions than answers but it appears that the government's investigation could have already hit a snag. the "wall street journal" saying the investigation going public may have hurt the government's efforts to build their case, a case that has focused on phil mickelson, carl icahn and gambler billy walters. mr. icahn denied any wrongdoing. he says he knows of no fbi investigation, hasn't received a subpoena, never gave inside information to anyone and also said while he's heard of phil mickelson the two have never met or spoken. icahn telling me he's proud of his 50-year record and unblemished record at that. as for mr. mickelson, he's been

mostly mum on the subject, releasing a short statement over the weekend from ohio where he was prlaying in a tournament saying "i've done absolutely nothing wrong. i've cooperated with the government in this investigation. i'll continue to do so. i wish i could fully discuss this matter but under the current circumstances it's just not possible." as for mickelson's sponsors, which include amagain, kpmg barclays and exxon, most aren't commenting at all. calloway which provides mickelson with clubs and apparel says they're standing by their man. the reported investigation does not involve calloway, they say, "and thus we have no comment on that matter. however, we would like to note that we've had a longstanding partnership with phil and value our relationship with him. he's always acted with the utmost professionalism and integrity in our dealings with him. we continue to support him during this challenging time for him and his family." david, as i said at the top, many more questions than answers. where does this investigation go

from here? and important to note, as you know, neither mr. icahn, mr. mickelson or this other gentleman at this point are accused of any wrongdoing at least at this point. >> we had judge holwell here most famously sat in judgment on the roger ratnam trial. >> more smoke than fire is what he said. >> that's exactly what he said, more smoke than fire. we have that question, scott, why now, many years after the trades of course took place. >> three years. >> yes. >> i wonder, what do we know about william walters? he seems to be sort of the key in the middle of this thing. any comment out of him yet? >> i believe, in fact, that he is maybe in the process of making a statement. jane wells of course covering that angle of the story. i'm sure she'll have much more coming up from him. we know he's a very well-known gambler apparentfully las vegas with a successful record betting on sports. >> we will see. as you said, scott, a lot more questions than answers at this

point. thanks for filling us in on the latest. apple engineers and thousands of developers are all gathering today in san francisco for apple's worldwide developer's conference. so what's going to be announced? carl is outside, along with josh lipton with a look at what we can expect. carl? >> sarah, i don't know what's more fun the actual conference or the guessing game that happens in the hours and days leading up to the conference. josh lipton is here with me outside the mosconi center and talking to us before he goes into the we wibelly of the beas. >> good to he so you. >> wwdc says what would dre code. beatz gives these guys momentum going in. >> some of the excitement could see new faces, cook comes out, gives a formal introduction and do we say dre and jimmy eye iovine. >> is that the story,ing mat,

ios 10? >> the expectation is the conference is all about the new software updates, kind of laying the foundation for products that could be on the way, and we just heard apple eddie cue saying it's the best pipeline in years. maybe improvements to siri, maps, maybe a fitness app, does that suggest a wearable is on the way and you think about carl how does ios stack up against the competition, and the most basic metric is, just market share, and if you look at google's android, clearly dominates, 81%. ios is a way distant second at 15% a cording to idc but all these thousands of developers behind us, they're less concerned about market share than they are about you, and ios makes up 50% of all mobile use, phones and tablets, it's incredible. >> if you are a developer you

make more money writing for ios than android. >> the app story is the battleground between google and apple. google has the lead in terms of downloads but apple is still on revenue. >> let's talk about you mentioned mobile payments, right, the smartphone, the health part. apple is clearly trying to start, they want to dominate some of these platform refreshes. they're almost becoming a bigger story than all right, when am i going to get the next one of these? >> right. listen, in terms of the products, phone, wearable, i think you'll look for that in the back half of the year. today a fitness app would be huge, also the reports that they're going to create this new software platform for the smarthome. that's the wild card to watch, the idea you control your smart thermostat, lights, security with your ios device. we'll see if apple does that today. >> you'll be tweeting @cnbcjosh. i already follow you but everybody should in the next couple of hours. josh lipton outside the mosconi center. guysing baaing to you. >> try to snag one of the 2014 jackets for me, carl, would you?

>> okay. that's you wear a small, i'm sure. >> it's a small. i'll take any size you can get your hands on. the epa administrator gina mccarthy unveiling the first national limits on carbon dioxide, part of president obama's plan to reduce pollution linked to global warming. john harwood joins us with details, which could have big itch indication fos are a loft industries. >> very big itch indications for the entire u.s. economy as well as the environment. this is something the president's been talking about ever since he was a candidate. he try toyed get limits through a cap and trade system legislatively past the house, couldn't pass the senate. that prospect for legislation died. now the president's using authority that the epa has as affirmed by the supreme court to regulate emissions. what gina mccarthy is announcing today is a proposed regulation that would cut car bop emissions

by 30% below 2005 levels by the year 2030. now there's a year comment period so you're going to hear pushback politically as well as from business, after that, states would have another year to propose their own plans, this is a state by state proposal each state depending on its own energy mix can choose its own path toward reducing emissions that much. it's significant and also going to cost them money and that's where a lot of the political pushback is going to come. the chamber of commerce was out last week with a study attacking these proposed regulations saying they could cost $50 billion for a year for the u.s. economy. proponents say that's not all that much, given the size of our economy and the environmental benefits, so the game is on, the fight is on politically over these regulations, but this is president obama fulfilling a pleng he made during the campaign, and if he can make these regulations stick, because they're going to be challenged

legally, that will be a major transformation of the energy basis of the american economy. >> john, acting by executive action would be the one area coconceivably still make an impact. given that legislation won't for the rest of his term >> there's not going to be legislation on this, everybody knows that. that's why the president is using this authority, he kind of slow walked it up to using the authority because he was trying to work with congress, but it was clear that wasn't going to happen, but this could be a major impact without legislation because what it's likely to do by effectively setting a price on carbon, you set market forces in play that enhance the renewables which have already grown significantly solar and other methods and you also have cheap natural gas which is lower carbon than coal. lot of the coal plants are going

offline already. big changes for the u.s. economy. >> john harwood from washington. let's send it over to dom any chu with a quick market flash. >> all right mr. faber. protective live corp. is moving toward a deal with daichi life. the deal would be a biggest deal in the string of overseas acquisitions by japan's insurance companies. back over to you guys. >> quite the jump on that speculation. thanks, dom. up next a first on cnbc interview with the ceo of starwood hotels and resorts. we'll be back with the interview after a quick break. [ female announcer ] there's a gap out there.

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welcome back to the nyu investment hospitality conference here at the marriott

marquee off times square. joining me is frits van paasschen, ceo of starwood hotels and resorts. >> it's great to be back. >> we have many things to discuss but i do want to start off with the technology that you're introducing, the idea, and you're proving this in hotels that you can have mobile keyless check-in. >> we launched this in two hotels, lofton harlem and lofton cupertino in california. you can take your mobile device, check-in before you get to the hotel and then use your mobile device as your room key and go straight to your room. it's a really simple idea, but it changes an age-old pain point for many guests as they've been traveling in a way that we think is going to be exciting, if not revolutionary. >> rollout in 2015? >> rollout to elements in lofton and ws in 2015. >> what about the google glass, what are you going to do with that? >> we're working on beta testing using voice activation.

it used to be people engage with travel through web search on pcs. now everybody's gone to mobile. half of our interaction with people today is on their mobile device which is much more of a dialogue. clearly wearable is where things are going next. it makes connect i feel that much more ubiquitous and we think it gives us great opportunities to give people individually what they want by having a dialogue. >> i want to talk about, and i think you need to clarify to shareholders what you're doing on returning cash to shareholders. five weeks ago you had an earnings call you said was the most challenging you've ever faced even through the financial crisis, where the analysts pushed back and said frits your stock is underperforming because you're not buying back stock. one week later your competent cfo left to join our parent company nbc universal and the day after that the board announced it would buy backs $0 million of stock to year end. why did that u-turn happen? >> over the last ten years we've

returned cash to shareholders through dividends and share repurchases to the tune of $1 billion each of the last ten years. this year between our difficult aends at $750 million and continuing the authorization which was already in place and our intent to complete that by the end of the year, that's $1.35 billion. so what shareholders are saying is you have a great business model. business is good. you're selling hotels, your balance sheet is less levelage than it's been before. let's see what you can do to return cash to shareholders. we completely agree. on the other hand -- >> you didn't, i've read the call and the first quarter you didn't agree and it makes sense. it makes sense if the reports are right, and you were talking to intercontinental about spending $10 billion to take them over and you needed to keep your powder dry, and then maybe those talks broke off, and you're not interested anymore, as david faber is reporting, and so you can afford to turn the cash to shareholders >> of course as a matter of policy, we don't concept on a

mermger a e merger and acquisition rumors. we were active in buying back stock last year. this year we're continuing that very same program. when we announced we were going to continue buying back on the authorization through the end of the year, we were assuring markets that in spite of many questions that investors had on the call, in spite of the fact that our cfo left, by the way, on very good terms, with no issues. >> sure. and nobody's doubting that. look, frits, let me ask you a direct question. have you been in negotiations with ihg to take them over in londons aa tax aversion. >> we make a policy not on commenting on m&a rumors, true or false. >> david faber is reporting you're not interested anymore. who on your team do you think is telling david that or do you think it's not your team? >> we have 180,000 people in our company. the real sit people are going to speculate one way or another. >> if you bought ihg it would give you holiday inn, exposure to the mid scale so you could

compete with hilton's hatchton and marriott's fairfield. would you like to gain exposure in some form to that area of the market which you don't have at the moment? >> so far we've been able to succeed very well by focusing on the high end of the market. people who stay in five-star hotels, who stay in luxury properties, they're very unlikely to trade that far down. the second is the middle market of the hotel business is not a very globally branded business today. so we've stayed focused on global high-end hospitality brands, the acquisition that we did at la meridian eight years ago has been april great success for us. we'll continue to focus on the high end of the market. >> it is said if you do a deal with ihg or with david saying you're not doing a deal, but it would be a tax inversion. you'd take the business and domicile it in the uk to say says wells fargo about 20% of your tax bill, value creation $500 million. with 60% of your money or profit coming from overseas, is it

inevitable in that growing over time that you guys will seek tax inversion? is that not the correct way to minimize what you guys would call tax leakage? >> that depends on your definition of correct. we'll continue to grow our business in the 102 countries where we operate today. 80% of our pipeline is outside of the u.s., over 60% of our management and franchise fees are outside of the u.s., and of course, we have to manage our tax planning, but that by itself wouldn't be a reason to do an acquisition and of course i wouldn't speculate as to whether a tax inversion through any transaction would get us there since i'm not commenting on transactions in general. >> it would be a helpful add-on if you were to do a deal is what i think i'm hearing from you. it wouldn't be the driver in the hypothetical. >> in the hypothetical if it improved your tax situation it would be a consideration. if you're the u.s. government you don't want u.s. domiciled companies to find a way out the back door. >> great to talk to you, frits. we're out of time. frits van paasschen, ceo of

starwood. see up the network. >> i look forward to it. >> back to you guys. >> the relentless simon hobbs with a lot of great reporting on hotelses. coming up, the big question on everyone's mind at the apple's developer conference, what is up apple's sleeve? we asked the senior editor of "9:00 to 5:00 mac" earlier today, coming up on "squawk alley" plus a lot more on the event in san francisco. we'll be right back. relax into child's pose. sfx: bing.

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and get two wifi networks included. comcast business built for business. wells. in los angeles, we've now heard from billy walters the famous sports gambler part of this investigation of carl icahn, phil mickelson. he told the golf channel, i am innocent of doing anything wrong, it's that simple. those that know me best know it is preposterous to think i would be involved in insider training. no one says anything when i lose money for not successful and how it has happened to many of us. the bottom line here is as i stated before, i am not involved in any insider trading and never been involved in any insider trading. billy walters telling that to

the golf channel. i will be back with more on that and his connection to golf. >> thanks. rick santelli joins us with the santelli exchange. >> thanks. i'd like to welcome our guest, jeff schneider. thanks for joining us this monday morning. >> thanks. how are you? >> very well. in some of your pieces you've written to a great extent how the average consumer may have gotten to the point where he's de-levered or he's de-levered and you can see this in autos or potentially gsc's making extra student loans. are these good forms of credit? why are they necessary at this point? what's the problem with the economy creating its own credit? >> there's nothing wrong with student loans or mortgages or any kinds of credit as long as it's done for organic means and

organic creation. the simple fact of the matter is we're trying to create artificial boosts of credit to get the economy towards an aggregate demand level there's no way for the economy to tell which is artificial and how it will shake out. you end up with a bunch of bubbles and certain areas that don't do much toward the real economy. >> back in the early days of the credit crisis, the midst to late '08, many talking you needed priming of the pump. i don't necessarily disagree with that. this is many years after priming. if you have to prime the pump on an annual basis, doesn't that defeat the whole point of what the keynesians believe in? isn't it a sustainability issue at this point? >> of course it's sustainability. we're what 5 1/2, six years past the crisis and still talking about emergency monitors to do exactly what you said, emergency

measures to prime the pump. it wouldn't need pump priming and move on its own. the difference between organic economy and artificial economy. >> whether it's ben bernanke or janet yellin, we've heard many times the reason they're embarking on extraordinary measures is because congress won't act. we heard it from the epa, because congress won't act. if people are allowed to vote for people they send to congress but not necessarily allowed to vote for mel watts or epa officials, it seems to me this is a go around of the checks and promises and constitution, of the checks and balances of government. am i right? >> i think you're right. it goes to this idea of aggregate demand. some way somehow we have to create aggregate demand and each of the individual pieces of the credit apparatus are taking their own signals from the fed and deciding, well, we will do

housing, we will do student loans, whatever it is each individual piece wants to do. they're all moving towards the same goal, which is the feds' idea of pump priming or monitorism to create artificial demand from nothing. >> i don't know, after listening to all of this, i think mr. piketty ought to be in charge of the federal reserve. i don't think that will work out. thanks for bringing that to us. >> thanks. rick santelli. carl is live at the developers conference in san francisco and talking to everyone about what they want to see. the event of the day. we are back after a quick break. ♪fame, lets him loose, hard to swallow♪ ♪fame, puts you there where things are hollow♪

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good morning. it is 8:00 a.m. right here at the masconi center in san francisco and 11:00 a.m. on the east coast. and squawk alley is live.

we are live in front of the masconi center in san francisco where in just two hours the worldwide developers conference will kick off with a keynote from the ceo of apple, tim cook. joining us this morning i can't think of a panel i'd rather talk apple with. steven levy of wired and our own jon fortt and the others. good morning to all of you. >> steven, do you think this will be better than most wwdcs? >> i was there at the code conference when eddy said that. that was an amazing session. this culture merger between the music industry and apple, where he came out with that really raised eyebrows, whoa. >> he said it twice. 92 think of what they've done in the last 25 years. a real game changer they've had. are we going to fin