driving a race car. indy car racing is incredibly dangerous so there is compensation in there i guess. >> thanks for what you do and joining us, mike. >> love you guys. >> the work for cancer too. we appreciate it. that does it for us today. time for "squawk on the street." ♪ >> good wednesday morning. happy 30th birthday to springsteen's "born in the usa." welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futures a little bit soft here as adp comes in below expectations for may. back below 200,000 at 179. that's the second lowest reading in about 12 months. watch bonds, the ten year is up, the yield up to 2.57 as productivity comes in at the lowest rate in six years. the unit and labor costs up 6%. europe remains a big story, of course, ahead of the ecb tomorrow. our road map begins with that

data, adp lower than expected, mortgage apps dropped but markets quiet ahead to jobs friday. >> a new sense of confidence, general motors signaling ceo mary bare barra will be cleared of any wrong doing. no signs of slowing sales. >> the it brand for today's youth second only to nike, the other fund mentals eroding, lack luster sales, coach and under armour. >> pandora is falling in the premarket, investigation into how artists are paid royalties as pandora faces shareholders at its annual meeting an hour from now. >> first up the countdown to friday's jobs numbers heating up. adp said the private sector added only 179,000 jobs, below the forecast of 210,000. april's gains will revise lower a touch, down to 215. second low nest a year. the lowest since january. certainly not what you want to see ahead of a friday. >> i don't get it. you have the auto sales number that's incredible.

you've got some amazing oil and gas hires. it's starting to spread into other states that didn't get a lot of business before. wisconsin. you're getting it in west virginia. but i get in the government -- no. white collar no. insurance no. banking no. you're just not getting it in some areas. don't have a housing boom yet. the lower rates haven't helped. it is so stop and start, it gets your head spinning. i cannot believe that we're not hiring more people. >> it comes on the heels of what you said last night, the positive trends working in the market, oil and gas, food consolidation. >> right. >> bottoming and interest rates meaning banks start to perform, airlines, transports hanging. >> there's so many individual companies that are doing well. now i had a guy on the other day, you look in your wallet you will find private label credit cards he supplies. he hired 1,000 people. the stock nearly got hammered.

what are you doing hiring people? what are you supposed to hire? bots? that kind of thing. in the end there is still a reservation for people to hire. yesterday marty from paychecks said the month was softer talking about minimum wage, regulation, i don't get too caught up in the weeds. i think business is better and people should be hiring more. >> they should be. when it comes to employment we are seeing other corporations laying people off. thinking, for example, of hewlett-packard last quarter remember. >> barclay's. >> the numbers are going up. >> barclay's. you can name any number of larger companies still in the mode of cutting as opposed to adding. they may be adding in selected areas, but overall the number is going down. >> but silicon valley is hiring like mad. >> yeah. >> you're getting a resurgence in tourism. disney, what's happening there. so many areas that are good but you sit down and think valeant gets allergan. right. >> right. >> there's -- fire a couple people real quick there.

>> or a thousand. i mean, you know, yeah, the numbers add up quickly. >> merck was on this morning. you think merck is going to make the number by just discovering fabulous new drugs? you make the number by saying you know what, we got to streamline. lily has been streamlined. you have some industries that are -- you have big guys laying off or streamline. these companies they just don't have to hire when someone leaves. then biotech is not hiring. all the ipos used to hire people, they died. >> yeah. and the numbers are still small. i mean when we bring on one of these emerging companies or recently public companies how many people are you going to hire? 50, 100. good paying jobs but they're not the thousands that conceivably will be lost as a result of consolidation, which is potentially a downside of m&a if you want to talk about it in the larger contest. >> a lot of what you will see, companies saying i can automate, do things, cane have three people do things instead of

four. frankly look i think business is good in this country, quoting union pacific jack koraleski who is hiring and i'm not going against that, but kind of astonished we can't put together three solid months. >> yeah. >> just not -- maybe we'll get a surprise on friday. >> yeah. >> we will see. of course, if you're playing the guessing game on nonfarm payrolls still time to nail the number ahead of friday's job report. tweet us your predictions for may nonfarm payroll use our handle @squawkstreet. if you win, the cnbc 25 pillow autographed by the "squawk on the street" gang. as usual you have until one minute before the friday release at 8:30 to submit your predictions. >> is that a metaphor for the economy taking a nap? you get to take a nap like the whole economy gets to do. we're napping. wa wake up america. >> we've been napping for a long period of time. >> rip van winkle. >> sound like dudley and fisher.

>> i don't want to do that. >> low volatility meaning -- >> yeah. >> some of these guys, fisher wanted to tighten during a period -- not allowed to talk about people who got it really wrong. but i do think -- i just cannot believe there is not incremental hiring going on that ford motor doesn't need to put more money, gm has to put more people to work. those kinds of numbers you have to have more people build. you have to run those assembly lines around the clock. >> 24/7. that's a good thing. >> and you talk to halliburton, every time i talk to them, what do they say? they look into the camera, where is the camera, look into camera six and say we need another thousand people. but try to find them. you have to some education. >> jim mentions gm. officials believe that ceo mary barra will be cleared of any wrongdoing in the recall crisis, that's according to the times today. gm's internal probe led by former u.s. attorney anton, expected to name individuals and

departments within the company. last night on "mad money" jim is sticking with his call to buy gm. take a listen. >> when i recommend gm four weeks ago i took a chance the monthly numbers for may would be good. what's the astounding thing, those numbers were far better than i expected. yet the stock is not up 50 cents from where i got behind it. in many ways that is the most absurd fact of all. which is why i'm telling you right now, it is time, it is still time, to buy general motors. >> look, mary barra gave a -- that was a fabulous article about how she's putting it behind her, may 28, she gave a speech saying we've had all these recalls and we're still selling cars like mad. they spent a lot of money upgrading their line. people forget like these are companies that don't just like say we're going to pump out the same bad cars we've been pumping out, gm is a better company than it used to be. it is. better product line. so does ford.

>> the times says she was defiant. >> when you see her on tv, you say wow, what a tough day, take some xanax. i think she's past that face. she's on the munster drink, five-hour energy. mary barra. >> do you see the stock regain its old highs? >> yes. it's too cheap. look, one thing if europe were to take another leg down but that's not happening. they're talking about break-even in europe. another thing if china, other than the trade war we're trying to precipitate with china, solar panels, big tariffs, things are moving in gm's direction when people say it should be moving against them. i find it somewhat incredible frankly. the headlines. >> talk about mike jackson on "squawk" their sales for may up 15 at auto nation, kelly's blue book said may sales almost seemed to defy logic. that was the period we got a negative print on gdp. >> i feel like buying a car. just feel like going out there and buying a car.

>> do you need one? >> no. that's the problem. >> that's never stopped you in the past, has it? >> oh. >> zing. >> meantime coach being downgraded over at stern ag to neutral from buy due to lack luster sales trends. stock down 30% this year. jefferys upgrading under armour from buy to hold. not factors in their growth professional and the growing dominance with the youth, the next gen stock. >> under armour is very expensive, one of the highest multiple of trades. sad. suffers a disservice to your portfolio. the coach piece, i think stern ag does great work and i was very influenced by them thinking coach could be a turn but they start, where did our thesis go wrong? domestic sales trends have deteriorated, now talking about cash needs, restricting returns to shareholders. coach is in a downward spiral and when you get in the spirals it's hard to break.

>> amazing if you can time it right as an investor, the long periods of time when these things are in an upcycle and really seize on when there has been a seminole change somehow. what was it for coach? what has it been? >> price. price. they got too expensive. kors came on with a higher end that coach got saturated its own market, they talked endlessly about china and got people thinking that china is going to turn it. there are 100 coach factories in china except not sanctioned by coach. >> that is true. >> and it is incredible when you go to the bowery how i can get you a coach bag for a quarter of what the coach bag is. >> wasn't a lot just kors, kors became next thing. >> and kate spade came on. so i mean coach turned out to be -- you know what bags sell well for coach? the retro. you go on ebay your can get a coach bag from 1960, those are what is selling.

but you are not getting any traction from this current line. i thought this shoe business was going to be good. the shoes look really good at coach. i may not be the judge i would like to think of women's shoes. >> i cannot unsee that image in my head. >> they did not have toe cleavage. know toe cleavage which what is you have to have. jimmy choo has. jones, it's true, jones new york gave up. they did -- stewart whiteman. decided to sell. accessories are a hard market and in the meantime even kors' stock is down. my friend herb greenberg, saying there may be inventory issues. but coach is flailing. new ceo not happening. this one may not be done going down. >> no. this is where we really need a woman in the 9:00 a.m. someone who would wear a pair of shoes like that. >> i think -- >> i think he covers the landscape pretty amazingly for us. he knows about it. >> that $700 jimmy chew is no

bargain. >> no. >> compared to the mcqueen shoes you can get for $700 at jeffreys. check othose out. love them. >> steve mcqueen design shoes. >> oh, my god. steve mcqueen. >> just kidding. >> the blob. >> when we come back -- >> magnificent size 7 he is. >> the doj considering a move that could sound a sour note for pandora. what's at stake for the on-line music service and stock. blackstone global head of real estate jonathan gray, the man when it comes to leading major hotel deals including hilton's ipo. take another look at the futures. nasdaq down today as four straight. we haven't done that since march 6th through the 11th, although the decline has been minimal each day. >> but still wearing you down. the enthusiasm, investor survey, 60%. people love it. >> more "squawk on the street" from the nyse in a minute. ♪

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♪ shares of pandora down in the premarket. the justice department is mulling changing or scrapping decades old music licensing agreements with bmi looking to take into account the internet aid. a revision could result in

pandora paying higher fees to play songs on its service. one of the long-standing head winds for this companies. >> pandora, big position. always says the next guy is nipping at their heels. pandora is really popular. maybe they have gross margin room to do this. this is a remarkable company. i know these stocks have all stalled, these kind of, you know, new-age companies so to speak, bus -- >> don't have a lot of -- spotify is one of the big players not public. >> doing incredibly well. >> streaming is -- i mean we know, for example, that downloads of music have slowed dramatically. streaming is growing very, very quickly. hence, apple's interest in it and others. will amazon introduce a streaming service? continues to be at least an area for speculation along with its prime service in some way for an additional price or as part of it. >> no. i think spotify we have situations where private market is valuing something when you

hear the fund raises. much more than the public market. a lot of companies want to come public in this period. i saw home away note that was positive. airbnb needs that. i'm tired of doubting pandora. the stock hasn't done much. the stock has been a dog this year. but the business seems very resilient. >> by the way, they did put out listener hours for may, up 28% year on year. but that's the last time they're going to give -- they're stopping giving monthly -- >> good. pause that's a hedge fund, that's what the retailers do. not playing the hedge fund game of whether this is a good or bad month month. >> and maybe get ahead of it. >> stock has been a dog. >> when dmoits retail not getting monthlies we get so few it's not easy to get a read on things either you could make an argument. >> that's why we've seen so many retailers pop when they say listen, our last month was good, we used to get these months as they come out. >> right. >> then you're surprised to see jc penney the last month was good. keep in mind the fact that we

have a dirt of information versus of what we used to have. >> on the streaming companies, back to greg mcfay, interviewed him a couple weeks ago, sirius, there is going to be consolidation, my guess at some point, maybe not today or tomorrow. >> has to be. >> but eventually they will buy one of the streaming services at sirius. why the doj keeps getting involved in these things. airlines. forget about it. go four, three, two, don't worry about it. >> delta the shares remain the most undervalued group. dell it's over 40. why did this happen? the justice department has blessed -- >> songs and books. >> god forbid. publishers should charge $11.99 for a book. >> delta is going hire. the railroad-ization of america. ever talk to the railroads? when is norfolk southern coming up against union pacific. nobody competing in the railroad business. that was the 1890s. delta is going higher.

look i continue to say that american goes to 60. everything is going these guys' way. >> wow. >> what a stock. it will still be cheap at 60. >> when we come back cramer's mad dash as we count down to the opening bell. one last look at the premarket and "squawk on the street" is back in a minute. ♪ you've reached the age where you've learned a thing or two. this is the age of knowing what you're made of. so why let erectile dysfunction get in your way? talk to your doctor about viagra. 20 million men already have. ask your doctor if your heart is healthy enough for sex. do not take viagra if you take nitrates for chest pain... it may cause an unsafe drop in blood pressure. side effects include headache, flushing, upset stomach, and abnormal vision. to avoid long-term injury, seek immediate medical help for an erection lasting more than four hours. stop taking viagra and call your doctor right away if you experience a sudden decrease or loss in vision or hearing. this is the age of taking action.

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cnbc.com about a firm doing m&a. >> yeah. former president of morgan stanley who has been lauded for being able to accrue so many fee ace lone as a solo act, casually advising companies whether verizon and comcast did hire a couple senior bank prers morgan stanley. >> -- bankers from morgan stanley. >> japanese buyer $6 billion deal. like who cares. i got $30 billion deal. but this is a -- [ inaudible ] that's another bank. >> it is insurance. i don't know. sorry. >> this is going to put a new valuation on prudential and on metlife. this is life insurance. those stocks have been not that strong. they are about to get strong. their business has been good. this is out of nowhere. it's a plain vanilla company. look at ameriprice. some of the companies have done well. people don't want to own the banks so hide in insurance. >> this stock already made a bit of a move on a one source story from a japanese daily reporting

on what turned out to be right. >> right. so you have 16-point move. again, this same chart is hillshire. you had this thing kind of going along, no one liked it, no sponsorship and bingo, people take advantage. >> the point is an important one. m&a can re-set values in an entire sector. still going to have a discount on what the takeout value would be, but it can move you. >> the life insurers have done -- it's boring. nothing boring about making 16 points in 24 hours. now, speaking of companies that we're worried about secondaries. a very good article talking about how secondaries weighed on techs. palo alto bought a security company, and they registered 1.5 million shares and have to register perhaps juniper stock that was gotten in a settlement. let's see how, this is just a registration. >> that's not a lot of money. 1.5 million shares. >> all secondaries have been busts. and palo alto had a great quarter. i also think that a lot of

companies have to be acquired in this business. this is cyber security. so just watch palo alto, see if it gets hit because people are scared of secondaries. allison transmission with the giants secondary, that was a private equity deal. i'm saying the secondaries have been the tale of weakness. you need to see them hold up if you think this stock market with its really unbelievable bullishness from individual investors can stay this high. >> hard to judge with the secondaries or lockups. we all knew it was coming on twitter and look what it did to the stock price and yet others you don't see. >> those are lockups different. the insiders. this is not the case of insiders. >> yes. >> let's keep in mind the fact that insider sales have been busts almost all year. last year they were fabulous. you bought them, made money. zillow, remember zillow had a giant one. you can tweet that, spencer. the ceo. who watches the show like a hawk. will now say cramer called me a hawk. you know that the hawks are

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you're watching cnbc "squawk on the street" live from the financial capital of the world. with the opening bell in a couple minutes. busy day, adp was a disappointment. the productivity numbers no good. unit and labor costs up. that's why we have bonds up. >> i thought interest rates were done going down and coming back. nope. we just don't get the data that makes it so you should go back to 2.75. fed should be selling bonds. selling its own inventory. >> you've been saying that for a while. >> what are they waiting for? continue to buy is ludicrous. every bank i know says if we could get a little rate relief we would lend more meaning if we could get a little more higher interest rates. >> little more margin maybe. >> they sit on capital and don't

do much, banks. >> no. no. and their lending standards are stronger. we're seeing people creep out on to the risk curve of trying to find yields. gm did a subprime deal. >> hey look -- >> by the way, fine it's backed by auto loans and it's fine. >> it's coming back. >> subprime and go oh! subprime today is not subprime of '06. but, but it's coming back. >> you can do securitization. you can't have everybody say it's triple a. >> right. >> single b. yes. >> we need honest rating agencies with honest ratings and dispense with the idea there are so many loans in a given package you don't need to have all of them succeed. that's got to end. >> securitization in home loans has not privately come back. fannie and freddie's game entirely. >> opening bell will be here in a moment. the yale chief executive

leadership institute of the yale school of management ringing the bell. our friend, the senior associate dean, ceos of merck, lanar, mike ullman from jc penney is here. >> and jeff is instrumental in picking our cnbc 25. this is always one of the biggest conferences. he gets the big names. he is tremendously respected and as he should be. >> hoping to chat with mike ullman. not sure we'll get him. over at the nasdaq mondelez international supporting the men's u.s. national soccer team ahead of world cup, the official snack maker for the team. >> should they be snacking? >> maybe the refs, maybe the refs should snack. in between trips to deposit cash at the bank. >> you can run seven miles a soccer match. >> you're allowed to snack? >> you have to snack on something. i don't know. >> first solar will be our winner out of the gate. >> i like this company very much, but they've been

eviscerated by chinese dumping and looks like we have some -- look we're in the trade war. we're back in cold war with china. i mean, like china is attacking everybody. not attacking. i shouldn't say that. china is behind the scenes is doing -- rebuilding army, making a lot of noise. we had felt this country has kind of started a very tough relations with china, not tough enough as far as some of us here are concerned. >> they've been dumping solar packages for years now. >> ridiculous. >> dumping steel. dump a lot of stuff. dumping they'll say how can we say that, they haven't been convicted of anything. first solar on tv not that long ago and first solar has a really terrific product but their material hasn't fallen like silicon has. >> right. >> but your point is an interesting one between confrontation to a certain extent on the trade front or tension, south china sea, what's going on there, and then cyber espionage which you talk about great deal and the fact that we

indicted five guys, not that we'll put them away. >> those five guys, they were not nobodies. >> no. >> we're in a bit of a -- be careful here. in a bit of a war with china, financial war. not like it's been for a long time. financial war with russia. remember those countries? they became our partners. now did they take advantage of the partnership with us? i think china did. but that's me politicizing. you don't need that. >> a lot of the winners today are analyst driven. munster upgraded its cs. under armour at jeffreys. among the top five gainers. >> such a great point. one of the things that happens in a bull market a guy upgrades the stock and the stock goes higher. m mon store has been teetering. suddenly monster has come back. looking at jeffreys saying you want to buy united natural because of the price war among all of the different natural and organic supermarkets.

i just find raised the price target well. dare i say every single one of what we used to call the health maintenance companies are just on fire endlessly. and i think well point deserves to be much higher. >> coach is the biggest loser as you might expect. analyst driven as we mentioned earlier. stern goes from buy to neutral. >> devastating piece. >> a little late wasn't it? >> you know what, they called the turn wrong. no one knows what to do with coach. everyone just feels that this thing could go down substantially from here. no private equity chatter like there was with jones when jones had a slowdown. watch allison transmission. equity offering. you need to see these companies lick questionfy. everyone is hoping it's dollar general or hga. those are the ones that have worked. so big. >> in terms of the p/e, the sponsors. >> yes. >> everyone wins. >> incredible.

almost all out. >> look at the metlife revaluation off this protective life. to get that stock up a bic and a half gigantic. takeovers, analysts making calls, and it's working. >> working for long time. >> we are down a quarter percent. apple i notice up again. not a lot. 146, people will take it. >> the second and third day coverage, they've made changes that the developers love. you're going to see a lot more apps. apps are exciting. watch under armour by the way. under armour kevin was one of my favorite ceos. he's big on the next generation wearables. making a lot of very -- he has got a terrific product where you compete against others, compete against yourself, it's a dotcom and that's worth a huge amount within -- buried within the tremendous momentum under armour

has. >> we mentioned gm and the times story saying mary barra may have gotten her groove back. the stock will take you back to the march highs. >> waiting forp analysts to come out who downgraded it. a lot of fear and pain among the analyst community when the stock broke down. i think you will see the euphoria break out and the stock break out as the analysts get out of their foxholes and pillboxes and say maybe gm the worst is over. that is should be doing it now not at 38. that's the way it works. >> multiple disparity versus ford for reference sake. >> not huge. >> not huge. >> why wouldn't i just own ford? i like ford. >> you do? >> i like ford. i think gm is down 3, 4 points because of the ignition. >> yeah. >> but i think ford -- i like alan mulally. ford has been creeping higher. >> another winner. >> both in that sector very

strong. >> last night on "mad money" you quoted tina turner. you said we don't need another hero, don't chase the momentum names like a trip that's down today. >> as soon as they go higher you get a secondary and they crush you. my friend anton did a lot -- he does a lot of anecdotal research ib about plug-s ins. bmw plug-ins, lot of chatter about those. he was the first guy to tell me the parking lots in silicon valley were filled with teslas. lot of bmws. people like their plug-ins. >> best may ever for bmws, mercedes and nissans. >> isn't it amazing. this auto market worldwide is really strong. china. of course pollution in china, you think they would cut back. >> i know. >> wall green same-store sales up 4.4 for may for the quarter up 5.1.

front up up 2.2. >> they're doing the alliance, cvs has been terrific. the one i continue to recommend even up here is rite aid. i continue to think rite aid is back. it's no longer a turnaround. it's earnings per share story. rite aid doing very well. >> walgreens is interesting. alliance boots. they're going to accelerate the purchase of the rest of the company. they bought 48% or more of it. >> mr. wasson, did he pull it off? >> there are some shareholders in their ranks including jana, barry rosenstein, arguing they should invert. in this case it would be strategically motivated because they actually wanted to buy this company before there was a lot of talk about inversion. but it would be uk based. >> by the way -- >> say again. >> the former, chairman, jim skinner. >> skinner jusuch a winner. i think mcdonald's will get it together. the stock has been a rocket. every number has not been that good and the stock going 94.

people keep thinking they had a great balance sheet. skinner is remarkable. walgree walgreens, what a dominant company. when they made that deal alliance, remember the stock dropped from 36 to 28. >> loot of people didn't understand it. >> i didn't. >> he called and walked me through it and i said i apologize. i got this so wrong it's scary. >> they're going to have a large shareholder -- and it's interesting the shareholder base in walgreens is hoping the europeans will manage the company. they're more aggressive. viewed as more aggressive. >> it's funny. >> and forgetting his name. the italian guy is going to own 16% of the combined company. >> when you look at the drug stores, when you to to your drug store, they don't look like they used to. >> no. >> i buy my beer -- excuse me, i buy my beer at rite aid. not kidding. >> i saw dom peer yon. a huge champagne case.

>> i think i saw champagne from flynt, michigan. >> good vintage. >> yeah. it's very smart. >> mary thompson is here on the floor, dow down 22. hey, mary. >> as expected we have a weaker open for the markets. modest losses across the board. dow down 23 pointsp the s&p continues its slide from yesterday. the only area showing a little strength right now is the banking group. other than that pretty much losses across the board. traders waiting for calm things. the beige book, want to look over that. they're waiting to see what mario draghi says tomorrow about interest rates and the ecb, what he will do to provide stimulus to that area. looking at the dow, a one week chart. we've seen the dow up three days until yesterday snapping a three-day losing streak and weaker today off 23. on the home front, we did have how vain yan with a wider loss

of shares. mortgage applications fell as horse gauge rates dropped as well. see weakness in the home builders today. fuel cell with a loss that more than doubled hurt by higher operating expenses and lower revenues, shares up 13% in trading. brown foreman with stronger than expected results, of 62 cents a share. stock not responding about a half a percent. mattress firm, saying that full year sales will be up on stronger sales. nevertheless weaker than expected results for the quarter. there. the stock turned higher. we want to leave you with united health care which raised its dividend by 34%. stock not responding down 15. that's the story with the markets up about 25 points for the dow. back to you, david. >> thanks very much, mary thompson. did want to talk about at&t and directv. yesterday you recall at&t reported what looked like better revenue guidance a lot was

because of accounting changes and the stock did not react positively and down again. after the close yesterday, at&t came out, there was a form 425 showing up in directv's filings. basically providing additional details and updated information, clarifications around key facts related to the proposed acquisition by at&t. number of analysts focusing on one key part which is the scale of the transaction provides at&t that at&t's u-verse content cost after the completion will be reduced by approximately 20% or more as compared with our forecasted stand-alone content costs. again, u-verse which has about 5.6 million video subscribers i believe it is, they're saying they see their content costs coming down by 20% or more as a result of the deal. this adding in to what they're talking about of at least 40% of total synergies being realized by year two after closing. the total synergies being likely

to exceed $1.6 billion annually by three years after closing. all of this impacting. but all of this also being considered by those who invest in media stocks with the question of okay f they're going to be in a position to potentially bring down their content costs by so much who benefits. do the content providers, can they hold the line? do they need to consolidation date to be able to fight the fight as we know it plays out with those who distribute their content. that fight is almost always been won by the content providers. think cbs and time warner cable, for example. but will it be in the future or is it conceivable you will see consolidation amongst the big names. nobody says anything is happening any time soon. there is going to be a period where the ceos try to figure it out, whether it be ceo, sumner red stone controlling viacom or jeff at time warner which comes

up and is not a family controlled company. but it is certainly something that is front and center for many of these companies as they watch comcast, our parent company, buy time warner cable potentially and at&t buy directv with the idea we're going to be able to save over $1.6 billion and a lot coming from paying less for content because of our size. >> time warner, jeff bucus, cbs,less moonves they buy back their stock every time it comes down. so does bob iger of disney. they have money to burn. i don't blame someone saying we want more. just like we were talking behind the scenes about how walmart is saying hey, we want our suppliers to give us a break. everybody wants to make the next level of money by really putting the screws on to whoever is supplying stuff and boy, i have to tell you, watch that. that's going to be a theme for 2014. >> something we sit here and

talk about potentially for years to come. conceivable cbs and viacom got back together. one day that might happen. or cbs and time warner and news corp. consider all these things in time warner. probably the doj allows studios to consolidate. hbo the key property of time warner many people would be focused on. again, i don't want to get too far ahead of myself. it's years to come. >> espn -- >> but disney is alone. i mean it's so much bigger than everybody else. >> i watch espn. >> it has the theme parks. >> i was watching a usa shshs turkey game. usa looks good. you know, espn 2 is -- these are not, you know, you dial around, about 437 channels you don't need and then an espn cluster or -- >> to your point if you have football you probably win the content war. >> oh, goes. >> got food. >> cbs. >> we were football. they all cave. >> you can't pry my cold dead

hands off the nfl. there. >> all right. >> a statement. i didn't say the nra. i said the nfl. >> last word on that. head to rick santelli at the bond pits at the cme group in chicago. >> thanks, david. good morning. you know, if we consider the data this morning, adp, wasn't a bad number but it certainly doesn't show there was a quarrelling going on post-winter weather. what it shows we're getting back to trend and the trend established the second hal half 2013, a little bit on the spongy side whether housing or other areas. the one bright spot continues to be autos. as phil on the floor lebeau has been talking about, a lot started when there was a boot boat load of snow on the ground in chicago in march. we consider that trade deficit was the widest it's been since march of 2012. productivity on a month over month basis had its biggest drop since '08. that is huge. and last but not least, labor costs on a big jump, how does

all that affect the markets? look at the 24-hour chart of n tens. so enlightening. coming in the 24 hours, rates dropping. into our time zone rates were increasing. selling going on before the adp number. that tells me the burden of proof and positions that were established were long. so the passive trade, the liquidation trade, was the selling. then unit labor costs may imply structural issues with labor but the costs may imply higher costs and that is a negative. pushed yields down a bit. the two-day chart is the most reve revealing. last couple days, the two-day chart, staircase. now all of a sudden the 260 is a stop per. auger that rate is going to go down and challenge 2.56, 2.57. open the chart up, kind of satisfied its correction to the 2.60 level. two year to date charts, both etfes, one high yield, one investment grade they've had

corrections. there is anxiety about the spreads. and not spreads here but relationships on the etf side. the last chart two day of euro versus dollar, little doubt with the meeting tomorrow that 136 is the battlefield. many thought it would be lower. what's the next area? 1.34 or back up to 1.40 so say traders. back to you. >> thank you very much. rick santelli. elon musk had quite a bit to say at tesla's shareholder meeting yesterday. there was never a dull moment. stick around to see what he said. we'll be back in a minute. ease you back to sleep with the cnbc pillow signed by the entire "squawk on the street" gang. you want it? >> all you have to do is guess friday's nonfarm jobs number.

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elon musk holding fort in mountain view, california, yesterday. a few take aways, he's not going anywhere in the next four to five years, may do something controversial with their patents and a nice moment at the end of the event yesterday. look at this. >> i'm an 11-year-old from burrelling game and so i was -- i invested in tesla last year as my first stock. [ applause ] i was wondering if i could have a tour of the factory? absolutely. just speak to a tesla person afterwards and we'll make sure it happens. >> 11-year-old shareholder has probably done fairly well.

>> it's time for him to bring the register tesla an buy gm. >> really? >> yeah. >> after the tour. after the tour. >> i like that kid. >> i like that kid too. no one ever got hurt taking a profit? >> no one got hurt taking a profit, dade. >> no. that's very good advice. never heard that before. >> stop trading with jim in just a moment. honestly, the off-season isn't really off for me. i've got a lot to do. that's why i got my surface. it's great for watching game film and drawing up plays. it's got onenote, so i can stay on top of my to-do list, which has been absolutely absurd since the big game. with skype, it's just really easy to stay in touch with the kids i work with. alright, russell you are good to go! alright, fellas. alright, russ. back to work!

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and add voice and tv for $34.90. comcast business built for business. ♪ it's time for cramer and stop trading. >> there's a term that goes on now among the big pros called re-rating. re-rating meaning we've looked at this company and judged it wrong, maybe it should be reevaluated higher. predungsal, has a very big investor day, going well. i want to do that gen worth. my life insurer, full disclosure, is a company that's had a remarkable rebound but again off of protective life. you want to look at gen worth. my travel trust, stephanie link, cosport portfolio manager, hartford, but hartford is pnc.

pnc could be the next trend. don't forget travelers is way too big to be acquired and is also the best operator in the group. and fabulous for small business. really the only game in town by the way. travelers is a remarkable insurer. their business is fantastic. >> rerating -- >> meaning the group has been kind of sluggish and now people are saying you know metlife maybe better than we thought. prudential. the rates are good there. daiichi coming in, what that says is the japanese, who have little growth in their country, look we're not going to go back it 1988 or 1989 where a japanese company was buying a semiconductor of ours, 18 of 19 were the largest in japan. keep track of this sleepy group. isn't so sleepy anymore. >> some of the best gains across the week have been among those insurers. >> not expensive yet. >> tonight a name people know on "mad money." >> we have sketchers, don't normally do tv. the sponsor of california

chrome. now i don't expect to see california chrome in skecher shoes. but it's very, very young. at belmont, a very big visible p thing. including a man i now regard as our own mark cuban is one ofmatt in the fall. they have done remarkable things. cannot way to sit down with him. pvh, manny chirico. that stock is weak, but i do think these two apparel plays -- i'm wearing a joseph, which is one of their names. >> see you tonight, jim. >> thank you, guys. >> ism services after the break. ♪ ♪ no matter what kind of business you own, at&t business experts can help keep it running... seamlessly. so you can get back to what you love.

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it's no accident - aflac pays fast. find out how fast at aflac.com and remember,accidents don't hurt as much when you have aflac. better. breaking news. may ism nonmanufacturing grows to 56.3. besting expectations. well above the 55.2 read for last month. 56.3 the best number since august which was 57.9. and if we look at maybe what's the most important component in the employment side, 52.4 versus 51.3.

and 52.4, is the best read other than march which was 53.6. so on the employment scene it's deteriorating a bit. on new orders, new orders 60.4. that is a nice jump from 58.2. mostly good news on the largest swath of the economy. we will handicap how the data is changing calls not only on the revisions to q1 which are getting more negative but serious drops to q2 based on trade deficit data. back to you. >> thanks very much, rick santelli on the breaking services data. mean time checking out the markets looks like u.s. stocks are slightly lower this morning. nasdaq just flipping into positive territory. barely seeing strong moves following a huge dump of data when it comes to the economy. let's talk about what we learned. john with obamaer mire asset manager, drew, senior u.s. economist and director with ubs.

drew, what do you make of the jumble of the data? are you worried that the adp number is a concern for friday? >> i'm not too worried about that. if you look at the overall trends in everything you could possibly look at with regard to the labor market it's pointing in the same direction. that's towards a pretty healthy. . 230 and the unemployment rate at 6.3. if you get that the market will like it. an i think the fed is going to have to begin to think about whether or not they're right in terms of how much spare capacity in the labor market there is. >> you're starting to see some really good news on the economy. if you look at auto sales yesterday the services number was quite a bit. not exactly lifting all boats but can we talk about breakout growth now that winter weather is behind us and starting to see numbers like this? >> i think we can and i think if we had not had such a horrible winter we would have been talking about this three months ago. simply put the economy seems like it it's in a good shape,

accelerating. everything seems to be lining up nicely. and as long as we don't get any more bad luck, the u.s. has been subject to a lot of bad luck of late and if we can just avoid, you know, an oil spill in the gulf or bad winter weather, or bad spring weather, then, you know, we should be fine. >> so i wonder, john, how much of that good news recovery is priced into stocks already. you characterize this bull market as slow growth, super low interest rates and easy monetary policy. how much of that can continue to propel these stocks? >> you know, that's a good yes. the bottom line is we are still in a low growth environment, low interest rates and combined with fed stimulus, that's -- it's led to low volatility in stocks. what low volatility has done is led to complacency and speculation as we've seen. consumers are still in the sort of de-leveraging mode at the household level. we've seen if you look at debt to disposable income numbers, employment to population ratio is still really low.

so we're kind of stuck in the mode for a while and, you know, ironically that's kind of bullish for stocks because it brings obviously brings fed stimulus. the green light speculation, green lights manager to pay for growth as we've seen before. >> drew, one of the major questions this week is whether interest rates would remain at what seem to be very surprisingly low levels. this is day one of three critical days for the markets as everybody who's in them knows. what's been interesting if you look at what the ten-year has done over the last week we've actually come up now 20 basis points, a major move in those yields higher. one of the major reasons for that certainly yesterday was the article in the journal saying that the fed was worried about complacency which makes me wonder to the point you were making whether the fed needed to up its game and get more aggressive. whether a it planted the story in the journal or told them that's where it was and here on in we're going to see more

hawkish statements from the fed to deliberately push those long-term or the ten-year rates higher. what do you think? >> i mean ubs, our view has been there's going to be a pick-up in inflation, the pick-up in inflation combined with the expectation that the fed will be hiking rates will lead to a rise in yeelsz as we approach year end. it's not going to be a tepid move that goes every month. you go up by a little bit. a swing higher as people begin to fully price the stuff in. and that means that you're going to end the year somewhere around 3.25 on tens and next year you will be higher. i think the important thing to bear in mind is that the fed has been reluctant to recognize that the long-term unemployed are not putting downward pressure on wages and i think as we move throughout the year, those inflation pressures are going to be building. you see it in all kinds of measures, whether it's surveys of wages or whether it's in things as simple as looking at, you know, imported price

components. there's a lot of small bits of data towards higher inflation will lead to higher yields. >> in that context do you think what the fed pays attention to or says it is paying attention to in public now has to change? >> well, i think they're going to be reluctant to do that because they want to believe in the story that they're telling. the problem is that the chapters of the book they're trying to read aren't telling the story they want. they're going to have to adjust their view of the world based on reality and that's always a painful process for the fed and usually for markets. >> well, see how much wage growth there is on friday. you're expecting 230,000 jobs to be added in the month of may. good to see you both today talking markets and economy john and drew. >> thanks. >> staying on that topic, forecast for the u.s. ten-year yield have plunged and market experts can't agree on why. our senior economic reporter steve liesman here. >> hey, carl, stick with me on

this. they're all over the map. see if your favorite reason for the decline in the ten-year comes up in our survey of 30 economists and fund managers and strategists. we asked them, put how much you think each one of these factors was responsible for the recent decline in the ten-year. they said a 7% scrapped to the lagged effects of qe, 9% of ecb action, lower u.s. inflation expectations, 18%, lower u.s. growth prospects 21% and flight to safety was the number one except for all other. that was 39%. and we got a host of reasons. earnings uncertainty, eurozone, global disinflation, lowers u.s. deficits got a lot. should have been one of our questions there. fed statement of lower long-term rates and portfolio rebalances with banks buying more. bottom line what's happened here is the forecast for the ten-year has plunged and you can see how much of a surprise the lower rates were when you look at the next chart.

what you see is over the course of june they predicted june of this year, the ten-year to be between call it 2.80 and 3.40. look where they are now, dropped down to 2.53. well outside of any projection we had for the entire year. moving on, the forecast now for december 31st, that also comes down 2.90 as well. comes down. i guess that's yeah, 2.90 from 3.44. 54 down to 324. looking at the s&p, well they followed this up here. we're going to do growth forecast here. 2.75 to 2.33 that's where the 1% decline in gdp. look at 2015, 3% down to 2.81. we'll look at the s&p and what they're forecasting. they have followed this higher. their original forecast for june. 1800. now it's 1930. moving on and looking at december, now 1956 and june 2015, the number is 2029. we should top according to this

group a year from now. the entire results of the survey on-line including the outlook for the european central bank and back at 1:00 with how all these interest rate changes what it means for the outlook for fed policy. simon? >> i just have one question for you, steve. i'm curious what your take is given the fact you've gotten all these responses, read all the research, tracking the gdp number, day to day, based on the economy, do you think that the ten-year yield is mismatched with the economy and with the setup for next quarter? >> i don't. i think all of those reasons sara, probably play a factor and might be the lesson from this, how spread out and dispersed all the responses were. i think the lower u.s. deficits is a big issue. pointed out by diane swan. i think lower growth expectations that had been otherwise expected they're a part. global disinflation. u.s. inflation. kind of disagree with drew in the last segment about the brewing inflation concern. i think those concerns are modest right now. >> steve liesman back at hq.

>> pandora under pressure on news that doj decided the royalty rates to songwriters should go under federal review. that is pandora holds its annual share meeting today. forgive me, its annual shareholder meeting today. remember pandora is dominant with a 70% market share in this company but competition is mounting from google, amazon and now an apple owned beats. richard greenfield is a media and technology analyst with beig has a sell rating on pandora and $10 price target. welcome back to the program. >> thanks for having me. >> how important is this decision now as to how much they pay songwriters to stream their records? i believe the last we had on this long running battle, a judge told them it should be 1.85% of revenue. >> look, there is a continuing battle between artists and the on-line radio services, most notably pandora. i think the thing you have to pay attention to is that for

artists, they used to have their music downloaded. people are now using services like pandora instead of actually going on and downloading songs. the actual -- the transition in dollars has proved very, very painful to artists, even though companies like pandora are growing, those, you know, kind of compulsory licenses, basically how pandora gets its music from artists have come under a lot of pressure from artists. the artists want the rates to go up. pandora wants the rates to go lower. investors are hoping that the rates only go up a little or down. i think the reality is especially with the doj looking into it, we continue to believe that bias is to the upside. every time we see these negotiations play out, the on-line music services end up paying more and more. we think that's going to be an increasing problem for pandora. not as big as competition have a problem but going to add to the problems that pandora has. remember the reason we have a sell rating this is a company that doesn't make money today,

everyone's betting on what 2017, 2018 looks like. how can you bet when you look at the competition growing and the cost structure going up. it makes for a very hard way to project out and be do a discounted cash flow back several years. >> how long have you had your sell rating? >> we've had the sell rating a couple years now. >> if i look at where you've been demonstrably wrong, because if i look at where pandora has traded over last year it's up 44%, better than the market by far, better than amazon, better than apple. you know -- >> i yurnurge you to take a two view, a stock are from its ipo hasn't performed whatsoever since its ipo. it would literally have been flat to down, since its ipo level. >> okay. however, it still has 76 million active listeners. >> it does. >> each -- each month. which is a phenomenal share of the market. it's about a 70, 80% market share. once these other competitors may come on and have monthly streaming services, if you look at what pandora is getting

people to listen to, it's the commercial service. people don't want to pay, they want it free, and in that regard, pandora is succeeding, is it not? >> but from a very important statistic, if you are an artist, pick any artist you love to listen to, that artist make morse money on the free service of spotify than on the free service or even the paid service of pandora. the artists want you to use the free services of the subscription services, because they have direct relationships with the music labels. that's exactly what this whole doj debate is over, whether there should be direct deals or government set compulsory licenses. >> okay. >> that's the battle. >> rich, before we let you go, you've noticed that things seem to be shifting on how netflix is dealing with the net neutrality debate over literally the last 24 hours and what some people have been tweeting. just run this through what is happening from your perspective. >> what was actually shown last night, there was a vox media

reporter who noticed that his netflix screen was now showing that he has verizon was actually showing that he now has sa slow down caused by the isp by verizon. netflix is telling consumers that the reason why your netflix isn't working is because of your isp. they're actually calling out verizon fios. we asked netflix over twitter last night what was going on and they said this is their new way of keeping consumers informed about the quality of their service. verizon has actually responded this morning saying this is a pr stunt and they're investigating. but it's clearly a battle playing out over net neutrality. >> we know that. where does that take us as investors? because already netflix has done a deal with verizon as with comcast to pay for access. this is about the reputational or trying to affect the reputational position of those broadband providers. that's what netflix's game is here. >> i think netflix is trying to

convince consumers to complain enough. it cannot be an accident that where this was noticed was in washington, d.c., on verizon. they just cut a deal with verizon. they're doing this in d.c. where the fcc and congress is. clearly netflix is trying to sway consumer opinion to influence regulators, to influence congressmen and women to change the laws or to basically affect policy. what netflix wants is free peering. they don't want to pay to connect to comcast or verizon. i think a lot of this is very political. i don't think it's actually going to play out the way netflix hopes but we'll see what happens. >> as brian roberts said on this program last week, that's a business position you can understand why they do it. rich, good to see you. thank you very much for joining us. rich greenfield on netflix and pandora. >> when we come back the chairman and ceo of interactive brokers one of the richest people in the world, weighs in on the markets and tells us what he thinks about high frequency trading. later on blackstone's global head of real estate responsible

for taking names like hilton and la quinta public, joins us. dow down about 19 points. back in a minute. ♪ [ 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. ♪

ceos from the world's major exchanges gathering in new york today for sandler o'neill's global exchange conference. bob pisani is there live and spoke to the ceo of interactive brokers a little bit ago. >> i did. always great fun, carl, to talk to thomas. not only is he a trading legend

but claims to have the best trading technology on the street with interactive brokers. helps a little bit, one of the 50 richest men in america. gives you a little credibility. two hot topics everybody is talking about. the first one, what's up with all the trading volumes, low volumes across the board, in stocks, bonds, across the board, and low bond yields. like most of the ceos pettify blamed it on an uncertain economy. >> low bond yields, as long as the economy doesn't pick up the fed is going to keep pumping money into the economy and going to keep interest rates low. >> i asked him how the low volumes was affecting him. got a laugh from the crowd that said if markets don't move market makers like me don't make money. stock at interactive brokers has been holding up well. high frequency trading and the michael lewis book, that's the topic everyone is talking about here. he said high frequency trading

both helps the mark and at the same time abuses the market. >> high frequency traders are on the one hand market makers in the sense that they put in bids and offers in the market, a tight market so they provide liquidity but only for a very small amount. on the other hand when the market moves a little bit, they all run for the door, they have mini crashes and run away markses. >> what do you do about it? he has an interesting solution. proposing a randomized speed bum. he released a letter details how it could be done. would allow lick providers to catch up with the markets and reduce the influence of high frequency traders. right now a very interesting discussion going on between brad katayama who runs the iem and

doug seefor the head of the market maker that's filed to go public. having a discussion in there and tweet out anything interesting i hear. >> we'll follow you on twitter. bob pisani in your element talking trading. up next the 26 annual world pork expo in full swing despite a deadly pig virus. our resident bacon expert jane wells is live in the thick of things. jane? >> yes. sara, right now they're judging the best castrated males. this is happening through intense biosecurity measures because of the virus we're going to talk about what it's doing to supplies and chinese ownership of smithfield when we come back. we're moving our company 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 to fit your business needs. and now it's even better because they've introduced startup new york...

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across 28 countries. so drivers can travel as far as they want to go and when they want to go. bacon prices are rising toward record levels because pork farmers are struggling with a deadly pig virus. jane wells is live at the world pork expo in iowa so you don't have to be. jane? >> hey, simon. despite the virus being so highly contagious, there is a record number of pigs being shown. blood tested ahead of time to

make sure they're healthy. it's important in this environment to hold this event. you want to keep these kids it interested in farming. the expo is happening as the ped virus has wiped out millions of young pigs driving up the price of pork. this is great if your operation is disease-free and everyone is taking all kinds previous cautions not to spread the virus. >> you're seeing washes, people change clothes, they talk about boots, coveralls, wash your hands. by fourth quarter this year you will see plenty of pork supplies. >> he is selling his hogs about $100 an animal more than he was a year ago, spending a lot less on feed and at the same time there are some concerns about what's happening in terms of consolidation. we can expect to see more of that. you know, hillshire farms is a takeover target. tyson, and hormel warning of reduced pork supplies and smithfield which has slowed down

its processing plants. smithfield is owned by a chinese company. the u.s. the largest pork exporter. china the largest pork consumer market. >> what's the biggest change you've seen with chinese ownership? >> well, at this point not a lot. it's going to be a joint effort to try to develop the chinese market for u.s. pork products. they've always been good customers for a lot of our products, but the challenge is for us to develop the whole muscle products in china. >> the bottom line, they still don't really have a handle on this virus. pork prices are going to go up and great for people who have healthy hogs. back to you. expect to pay more for bacon for a long time. >> i want to know one, how bad does it smell in there? >> you know what, i'm used to it now. to me it's -- my concern is getting on the airplane home. >> yes. >> i need to change my shoes. >> hope you have a change of

croats. >> wash your hands. >> i was in a pig pen -- >> i've been doing it all day. >> interesting story on pig virus and what it's done to bacon prices. straight ahead an interview with blackstone's global head of real estate. helped take hilton and la quinta public. he will join us live after the break. 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. 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.

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the street." i'm bertha coombs at the nymex. awaiting the weekly inventory numbers. we have crude trading above $103 a barrel. the number from the industry api were supportive for crew. a draw down of 1.4 million barrels. the expectation is 1.2 million. slightly bearish was the gasoline build according to the api of 800,000 barrels. the numbers here coming out of the government. looks like decline of 3.4 million barrels, a build of 200,000 barrels of cgasoline. a much bigger decline than expected. citi futureses had an expectation of 2 and 3 million barrels. as we continue to see oil stocks out of curbing, oklahoma, that is what people here are watching and that is the thing that is helping propel oil prices higher. also supported is the fact that we are seeing on an

international level continued shipment problems out of libya with violence in benghazi being disruptive. that is likely to be supportive for the crude complex. back to you. >> thanks very much. blackstone is the largest real estate investment manager with $81 billion under management, $17 billion available to invest. it's also the largest owner of single-family homes in the u.s. and has brought hotel chains extended stay la quinta and hilton public in the last six months. joining me now at post nine blackstone's global head of real estate, john gray. probably the only time you've been down here not ringing the bell. >> nice to be here again. >> i want to talk ability exits but to single-family homes. you're at about 45,000 homes, an effort started i guess three years ago at this point. you've deployed almost 9 billion in capital. are you guys done? >> well, we have reduced the pace of buying pretty

significantly. at the peak we were at $150 million a week. last week we did $25 million. as the market's moved up a bit, less distress in the market, we've been buying foreclosed homes, there are less for us to buy. >> some say you're only 1% of the market overall, but some say in particular market jus focused, those hit hardest during the downturn, you have become the market and you have influenced prices beyond what the dollar certainly would say. how do you respond to that? >> i would say again, the numbers are different than that. you've got more than 100 million homes in the united states as you point out, we're a very small percentage, even in those markets 1%, 2% of the buying our being is down 70% or more at this point and prices continue to move up. what's driving that increase in prices is a shortage of new supply. new supply of single-family homes is down about 65% from where it was historically. that's what's driving prices

higher. that's why we think home prices will continue to go up. >> why don't you actually contribute to the supply and start selling? >> our homes? well, i think the shortage isn't the existing stock. we need new homes built. the reason they're not being built today because existing homes are too much of a discount. we need existing homes to come up in price as they do. it will be economic for developers to build. >> you've been refinancing a bit. recent press indicated a billion dollar deal with deutsch bank to take out equity amongst the portfolio. are you going to reinvest that cash into buying homes or what are you going to do as you start to sort of refinance essentially and add leverage to the portfolio? >> it's a combination. some of those proceeds go to buy additional homes, some go to returning capital to our investors. when we started on this as you can imagine the banks were very reluctant to finance us. we were under leveraged by our standards. >> even blackstone were reluctant to finance blackstone?

>> at the bottom of the crisis as you recall people were nervous about u.s. housing. lending to us, putting in huge amounts of equity, even though the prices were down, they were lending us less against the individual homes. banks were nervous. >> you've been doing this three years. you went in -- i remember hearing at least a three to five-year time line. i don't know if a that still is the case. okay. you're slowing your buying. when do you start to try to realize what seem to be potentially double digit cash on your returns you've been able to conceivably set up for blackstone? >> we've been fortunate on our timing when we bought these homes. good experience of the lease up of the homes. in terms of the exit we want to get the business fully stabilized. there's some public companies out there today, they're not trading great. i think that's a reflection of them trying to do a lot in the public markets. because of our investors we have the benefit of time. we want to really get the model right and when we do, we'll look to the public markets. my guess in the next 12 or 24

mond. >> months. >> you know those public well having taken three companies public in the last six to nine months. again on the portfolio of homes, it seems like that's a couple potentially a couple years out. >> it's hard to say but certainly not in the near term. >> talk about some of the near term. bricksmore you can't talk about, a secondary that's ongoing or will soon happen but there is a certain amongst investors in hilton or extended stay who say blackstone is going to monetize what would have been wins here. what can you tell those investor bases about your plans to sell your remaining shares? >> well, first i would start out by saying that the nature of our business we have to sell. we have closed end funds. we say our model is buy it, fix it, sell it. last week we sold to strategic hotels. would love to own that asset but we can't because of the nature of the funds we run. when public market investors own stocks in our companies what

they should think about is blackstone going to be a responsible owner, focused on maximizing value, do they want us to do well? and the answer to those questions are yes. and as we think about exiting how are we going to do that? we're going to do it in a methodical way over time. no rush to do this. these are good businesses that we own. have controlling stakes in. the management teams are excellent. and we're in a good part of the cycle. for all those reasons there's no particular rush. but we do have to return the capital to investors. >> you mention you're in a good part of the cycle. i am curious, those calling for rev per available room up 6 to 7% this year. do you see that as sustainable? >> well, the hotel business like a lot of real estate has a certain cyclicality. the good news in the hotel business like the broader commercial real estate sector supply is relatively limited. it's running today last year about again half of historical levels. as a result, when you get a pick up in the economy, you begin to see this acceleration in same-store sales. we'd expect you'll see good

numbers in the industry at least for a couple more years. >> is a lot of that going to be made up on rate or occupy pan sni that goes to margin when rate goes up margin goes up. >> early in the cycle you fill up with volume and then you start to get price. you're at the part of the cycle volume is still there but now it's more the price side, margins will go up, the flow through will be good and seeing that in the public hotel companies today. >> we've been talking about exits, what about entrance? recently you bought a property in las vegas. you do this a lot, of course. i mean, it was a property that had -- that deutsch bank had it to foreclose on, the cosmopolitan. it was a big number. is that more of a play on gaming or more of a play on real estate? >> i'd say it's probably more of a real estate play. i would say there are two driving factors. first the cosmopolitan is a world-class asset, 3,000 rooms, 150,000 square feet of meeting space at the heart of the strip. we were able to buy it at a significant discount to the cost to build.

the second thing i would say is, vegas is really coming back. we're making a play on vegas more broadly. in housing we've been a big buyer there, warehouses, we bought the largest office complex. vegas is coming back. gaming is just a piece of the puzz puzzle. used to be the driving force of vegas. today it's entertainment, the show, the retail, the restaurants, the meeting space, all of that is driving vegas. that infrastructure is almost impossible to replicate. as a result, we think revenues will go up in that market and this asset thing, so physically well positioned, should benefit. >> this is, obviously, a purchase you've made in the u.s. but the sense i've gotten from some of your other public commentary, at the hospitality conference that simon covered a few days ago, you're more interested outside the u.s., you don't see opportunity as you might in china or europe. is that the case? >> i would say yes. the reason why is, we've really passed most of the distress cycle in the u.s. there's still some opportunities, but on a relative

basis, there's less capital, more distress in europe, and more capital dislocation let's describe in asia. in europe what we're buying is primarily from financial institutions who are looking to deleverage their balance sheet, slower in addressing their issues. we're spending time in places like spain and italy, buying shopping centers, warehouses, hotels, often times buying debt to get at the assets of favorable prices. in asia what i would say is, the money from the west is coming home. people have had a bad experience. they're worried about slowdowns in china and india. it's making investors more cautious. and yes, those economies have been slowing, but we think the capital markets may have overreacted a little bit and there's real opportunity and in our space in particular, there aren't a lot of folks doing what we do over there. a lot of our competitors left the playing field and it's made for a favorable investment dynamic. >> what everybody thinks about china they think about a property bubble. would not seem to me to describe

an environment where i would see john gray willing to play. >> china the bubble talk may be a little bit overheated. what's happening in china is a transition from an investment oriented economy and export oriented economy to something that's more domestic consumption oriented. that's going to play to a retail, to shopping centers, to warehouses. we think there's an opportunity there. in general because investors are so concerned about the headline risk, we've seen the stocks in the chinese market, the real estate stocks trade at 50% discounts to estimated navs. that's significant. in our business sometimes you have to take risk, look at the world a little bit differently, and china today is a place that has a pretty negative perception in the outside world. we think there are better things happening under the hood than people may realize. >> as always, appreciate your taking time to provide insights. >> thank you. thanks for having me, david. >> of course. >> you didn't ring a bell. we can bring one if you want. >> we'll do that. >> bet you will on that

platform. john gray the largest single business at blackstone. back to you. >> thanks so much. still ahead, the governor of north carolina joins us live to weigh in on jobs and the budget. plus, you can now invest in san francisco 49ers tight end vernon davis and you even get a dividend. davis is going to be with us at the nyse with more on his stock a little bit later on. [ male announcer ] whether it takes 200,000 parts, ♪ 800,000 hours of supercomputing time, 3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. whether it's building the world's most advanced satellite, the space station, or the next leap in unmanned systems. at boeing, one thing never changes. our passion to make it real. ♪

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welcome back to "squawk on the street." solar the stock taking the spotlight in early trading today. the u.s. department of commerce announced last night it's going to impose stricter trade rules on imports of solar products from china. now that announcement is boosting u.s. solar stocks like first solar, sun power, you can see there up 3.5 to 7%. meanwhile the chinese solar stocks like trina, ginco are sinking on this news.

an interesting trade of haves and have nots on the solar side of things. >> thanks for pointing it out. >> coming up vernon davis has his own stock and there's even a dividend. we'll talk about what kind of investment he is after the quick break. she's still the one for you.

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welcome back to "squawk on the street." i would like to welcome my special guest from the great state of north carolina, governor pat mccrory, thank you for taking the time today, governor. >> thanks for having me. i appreciate it. good being ba back. >> i believe you have a pen if your vest pocket you put to unique use within the last several hours. maybe you could share that with the listeners and viewers on cnbc. >> we signed a bill in north carolina to get north carolina involved in the gas exploration business. we think there is some great possibility for natural gas exploration, inland in north carolina and about four or five county, and we've been sitting on the sidelines for a long time while we're having to ship in gas from other states. and we believe to help jobs, to help our country's energy independence, we need to get in

the natural gas business. we began that process today and we hope to start doing some test wells possibly on some state property to see exactly what type of natural gas reserves we have, wet gas or dry gas and create more jobs in north carolina as part of the carolina comeback. >> excellent. now governor, let's switch gears a bit. the country's jobless claim benefits at the end of last year, your state slashed them about six months earlier, in many ways you're a case study in what this may mean. can you tell me how the experience is going thus far? >> i think it's the major veritable different than most states we were fifth high nest unemployment when we decided not to extend unemployment. that was to cut off our debt. we owed about $2.6 billion to the federal government and our businesses who were having to pay the unemployment tax were only paying on the interest, not even getting to the principiple

and a lot of employers telling us they had job openings but people weren't taking them. as a result of that decision we're not in the top 30 or 40 in unemployment right now. for the first first time in eight years the unemployment rate is below the national average. people are taking job ares and getting in the job market. off the government rolls which is what we wanted. it's part of the strength of the economy. >> governor, i will push back a little bit. >> okay. >> first of all, let's read something. both of the quotes. we'll start the first one. an article in the wall street journal. it was a quote from school districts in avery county. he said when we post a clerical position, especially those with limited skills, we are flooded. okay? so on one hand there is definitely a lot of people out there that need to find work.

this tells me there may be a skills gap. can you expand on that. >> i think our country and state aen long with other states had a disconnect between education and commerce. we have job openings. education is not teaching the skills we need for job openings. especially electrical, plumbers, hvac. these are the people employers need now. we weren't rewarding the individuals which are more expensive with less graduates. there is a 100% employment rate with the graduates. we have changed the formula on how we reward educators with taking courses in classes where there is openings for jobs. that means students won't have debt when they graduate. they'll get a job and pay off the debt.

tying education into the job market. >> governor, we have about 20 seconds left. here is the thing that bugs me. okay? >> all right. >> the jobless rate plummeted from 9 ppt 5% to 6.9% at the end of 2013. 110,930 people left the labor force and employment rose by 13,000. when you cut benefits we see people not counted as unemployed though you did bring in 13,000 that's a far cry from 110,000. this is an experience on the national level as well. your final thoughts on that dynamic. >> we are actually going to start seeing the first net increase in jobs in the last five years. we are seeing companieses come here because they are finding the talent and the talent is willing to take the jobs where job openings are. that same percentage of decline has been across the nation. the unemployment rate dropped. now it's cheaper to do business

in north carolina. that encurrentlies new investment which means new jobs. >> governor, thank you so much for taking the time. congratulations on the signing of the bill to bring fracking to the great state of north carolina. carl quintanilla, back to you. >> thank you, rick. we have a lot of economic data today. steve liesman has a rapid update on gdp. >> thank you very much. our rapid update incorporating the vehicle sales numbers from yesterday on the trade data from this morning which was highly negative. the vehicle sales number positive. q1 tracking gdp of the nine economists polled averaging minus 1.1%, a .2% decline. q2 tracking downward. a positive 3.5%. but the change now, minus 0.3. a lot of that with the range of 2.9 to 4.2%. let me give you commentary. this is compiled by moody's. it says the 3% escape velocity

gdp story has gone up in smoke. hold the presses. this economy looks the same as the old economy. speed limit still stuck at 2%. just a couple of notables. goldman sachs went down .4 to 3.4. mark zandy are went down .6 and mor sedan stanley down .5 to 3.5. >> steve liesman at hq. when we come back, vernon davis, nfl tight end, is here live. passion... became your business.

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welcome back. offering investors a chance to buy stock tied to a professional athlete. we reported on this a few weeks back. the 49ers tight end vernon davis began to trade on april 28. on the exchange. he also, it also -- i don't know -- paid a dividend that was announced this week. the quiet period is up. we are join bid the ceo buck french who joined us and the man himself, vernon davis. i have interviewed a lot of ceo companies that go public. i have never interviewed a

person who went public. why did you choose to do this? >> it's all about developing your brand. this is a brand building entity. so it was a wise decision for me to partner up with the guys because i definitely look forward to building my brand. >> you will be giving up 10% of your cash flow from playing for the 49ers or anything else you do related to your are brand, correct? for a long, long time. >> 10% of my future brand income. that can be a variety of different things. i just thought it was a wise decision. buck can tell you the same. >> are shareholders starting to call you up, make sure you're okay, how you feeling, your legs all right? everything moving all right today? >> sending me flowers and candy. >> last week you made waves skipping the off season workout,

not taking the preseason bonus. what kind of deal are you looking for? >> it's not about the deal. everything i do is in the best interest are of building my brand. i'm not looking at it from a deal standpoint. it's just how can i use leverage to continue to build my brand. >> what did you get in return for giving away 10% of your income? >> $4 million. >> you are in an odd position trying to live your life but a lot of how you live your life is in a sense insider information. if you feel tired, ill, how do you keep the two separate? >> it's all about balancing. you have to balance the two. for me, i have to balance football as well as the ipo. >> in terms of talking to people. you have to be so careful what you say to strangers about -- >> issues or from a -- whether he's tired or what's deemed

material is what's important. if he has a material injury, obviously he would have to disclose that to us. we would disclose it to investors. people are investors in fantex, not vernon davis. he has a contract with us. if he's working on a deal or doing something material to the future cash flow stream then he obviously shouldn't and won't disclose it to other people. >> how many more years do you see yourself playing tight end? >> until i can't play anymore. >> any idea? >> only time will tell. i'm not in a rush. i love the game of football. i em are brace it. it's something i have been doing my entire life. i look forward to playing for a long time. >> do you like being a stock? >>i like being a security. it's fun, exciting. >> vernon davis on a field near you and trading on