what if there's a craft beer bubble brewing and this market pops? it's done it before. >> we tend to somehow ruin our market, and i think farmers are pra really good at that. right now, we're in an expansion phase of the industry where there's enough profit around to justify expanding for the demands, which is great, but with that brings on all this new overhead and capacity, and that capacity, when it's there, tends to be used at break even or at a loss. farmers just want to keep things turning. >> reporter: all right, back to you. back later. >> thank you very much. that's all for us right now, right now, it's time for "squawk on the street." good wednesday morning, welcome to "squawk on the street, i'm carl quintanilla and futures suggest we'll make another run at dow 17,000

falling short yesterday. adp helps, up 281,000, above estimates, strongest number in almost two years. ten-year yield crept up to 26, two days in a row now, the fed may fall behind, and yellen speaks at 11:00 a.m., and u.k. home prices surpassing the 2007 peak. road map begins with dow 17,000, index closer to the landmark. will that better than expected adp number get us there? >> dimon diagnosed with throat cancer plans to run the bank as normal during treatment. >> google buying songs for an unus closed amount. >> gopro going negative. stocks setting up for the first down session since going public. >> dow inches closer to 17,000, new record, and s&p and nasdaq

at new highs, adp surpassed expectations ahead of jobs thursday, tomorrow. improving by 281,000, estimate was 205. may unrevised. economists do not tweak models on adp anymore because of new methodology, but it's better than the alternative. >> the surface jobs, well, where were they created? i don't see them in retail. i don't see them in restaurants. i don't see them in insurance. i don't see them in banks. it was a good nonresidential construction number, and, again, oil and gas -- oil and gas. >> a lot of oil and gas. when it comes to figuring out where we are in this economy, there are still people puzzling over that negative 2.9% gdp number we got and trying to figure out how that measures up and where to be right now. i think a lot of people said it was a weird number, forget about it. i assume this adds to that, at least to that thinking, that we're just -- can't think about

what's that is going to mean. >> five stocks led us from dow 16,000 to dow 17,000. talk about caterpillar, disney, merck, and cisco. i can make a case on a fundamental basis on every single one of those even though with had a big run. you know what? it's not like the market is completely crazed, caterpillar not back to where it was from 2011, 2012, disney with "star wars" coming up, and merck a buy back, selling the $14 billion from consumer products, and cisco, had a first good quarter. i sit back and say, well, those are the dow leaders, 16,000 to 17,000. i don't know. they can go higher. >> how much do you worry about? see what yellen speaks about at the imf conference, taking q&a, but some argue this number this morning shows the rate hike might be an early 2015. >> what i hope that she does is stick by the script that she set

out because i think that one of the things we don't want to see is her say, you know, what i said recently, that's not right. that's where we get nervous about a fed chief. i think inconsistency, all remember last year when we finally had a head fake, rates go to three, almost to three -- >> i think we did briefly. >> right. that's one of the things where it's just be consistent, ms. yellen. stick with the script because you don't know one month to another. look at, it would be terrific to think we bounce back entirely from q1, i deal with owens corning, they don't make it up. walmart is one of the most acting stocks and went negative in the period of the last quarter, and, you know, i mean, from dow 16,000, dow 17,000. david, it's still the u.s. economy. >> it is, about 20%, over 20 % of all publicly traded retailer sales. think about that. it's like why do we bother with

the rest? you need to look at walmart. >> you don't think restoration hardware and lumber liquidators are to focus on? >> they make up two. >> who has the catalog? >> restoration hardware weigh in heavier than a hampton's real estate catalog. >> wow. >> i put two catalogs -- >> explains the gun. >> i couldn't, l5 is a problem. solve l5, and that's why i like celjene. all the artificial parts we need, it will be good. suddenly saying that. i saw an article today, blew me away, a directv and dish in talks. >> right, i know. >> i know. >> incredible. >> that was yesterday's story. i know. >> the fact that david says something, and the next -- >> smith is still out there, potential inversion too.

>> i think we're -- we see the inversions. i'm going to speak to jack lew at delivering alpha, and it's still the question that pops up all the time. how do you keep allowing this? republicans want comprehensive tax reform. it's almost funny. is this 1980? are you reagan? he did tax reform. >> yes, he was. >> "squawk box" called the code an abomination in his words. >> it was a different era. bill bradley, you had cooperation. >> what i was asked, what do you think about the kemp ross bill? pay it. that was before i got involved. >> on now to jpmorgan and the ceo jamie dimo who told shareholders he's been diagnosed with throat cancer saying the condition is curable and proknow sis is excellent. he plans to run the company as

normal as possible during treatment. that being said, no small things, of course, to fight throat cancer, to go through chemotherapy and radiation. i want to offer my best to him and hope it passes as easily as possible as we have hoped for anybody suffering from that. all that said, it points to, well, what is the plan for succession? you always think about that. i'm not sure what it is these days. you know, i would know departure of mike cavanaugh months back was a big deal at the time and looms larger now. i think the expectation proves correct, no doubt, dimon, comes back to work and -- >> and even through this. >> it's not easy. >> what's distinguished between those executives with a form of cancer that's incurable and those who came out and said it's curable. talk about ben -- cancer is

curable, that was 1029, 2010, you have warren buffet with prostate cancer, came out 4/17/2012, the stock was 7981. the big most unfortunate was we didn't think prostate cancer was easily cured in 1995 saying, listen, i can beat this cancer, wrote a lot a treaties about it, and them there was a double in one year. as he came back. when the company responsively says it's curable and it was. i did not get to steve ross, the prostate time warner a long time ago keeping records where prostate cancer was much more uncurable. >> unfortunately. something they did not catch early. >> this is not prostate. it's throat. good luck. >> as we said, prognosis is excellent. we'll see how it goes for him. >> points to succession and the importance, of course, at the

board level, and something mr. dimon talked about a number of times and the host of candidates that would proceed him. >> first to stefanie, works with me, see her all the time on a lot of shows, and she just said, wow, where is mike when you need him? i said, is this the beginning of is there anyone from the outside? ed clark from dt come in there? a temporary play from wells fargo? is that just ridiculous? always in term in. >> if it's just a period of a number intense weeks, no. let's hope. >> funny, reactions when you read it. last thing i said about jamie dimon is thanks for nothing for that quarter, and then you see that and wish you didn't say that. life is real. >> meantime after weeks of speculation, google is buying streaming services songs for an undisclosed amount, integrating

them in google play and youtube. pandora is lower premarket, which, by the way, has 75 million users versus songza's 5 million. it says $35 million, unbelievably low figure. >> i don't think it was a big win for songza. i love it because i'll say, okay, i want to learn about mozart. put it in, learn, five hours, and the ring -- when i was in vienna, and was trying to explain to people why i like them, and, no, songza. not politically. >> yeah. it does so point to the idea of cureation, part of the beats deal from apple. as was said at the code

conference, it's about having a selection of music not computer generated. it's different somehow. >> interesting. i never heard of spotify until you mentioned it on air. now i'm like what was i thinking? the services -- i like sirius -- >> downloading music, now, of course, streaming now, spotify, pandora, you name it. one expects google will make this a larger service, no doubt. i wonder if it's beneficial to the music companies? i believe it may well be who are paid more in royaltieroyalties, again. >> right, hasn't thought of that. >> universal music is out there. warner music, again, maybe who owns that thing is going to have wandered into something that will be a positive, but don't forget that as streaming becomes more and more ubiquitous and downloading stops and illegal downloading stops. >> would be a change. who made the greatest call to

sell out before apple itunes? good trivia question for you. herb albert. sold out at the absolute last moment. had a vision. >> yeah. >> how do you do that? >> had a vision that they were going to wreck, there was a digital wrecking of the industry, and the am records sold at the top, did one of these yahoo! conversations, and i was on as -- people don't realize there's some geniuses, not just geniuses that associate with music, but he was would have been a great choice for knowing where the music industry's going. >> the songs of guys going to be employees of google, and we'll see if google play gets traction. a long way to go to catch up. >> they do. but, again, amazon, moving into streaming recently, prime service, not a huge catalog available, but they are going to build. >> look -- >> it's going to be -- you're going to pay your electric bill

and your song bill every -- like a cable bill. >> that is so good. it's auto pay. the only thing -- yesterday, i got an e-mail from the nfl saying, listen, you paid for next year's f nlk. thank you very much. >> sunday ticket? >> no, but i listen on the radio so i have everything going. >> the ceo of at&t, and i did not know what he said about sunday ticket and whether the deal is done. >> wide ranging discussion, by the way. >> twenty minutes, a lot there. when we come back, a land mark session for gopro this morning, more details on that. it's down on premarket. oil nears the highest point in six years, talking to gulf oil on what's in store for the industry and for you. he's joining us live a little later on. look at the futures. moderate green arrows as we had the best start to the second half since 2011 yesterday.

a lot more "squawk on the street" coming up in just a minute. ugh. heartburn. did someone say burn? try alka seltzer reliefchews. they work just as fast and taste better than tums smoothies assorted fruit. mmm. amazing. yeah, i get that a lot. alka seltzer heartburn reliefchews. enjoy the relief.

gopro setting up for a down sigs, would be the first since it we want public last thursday. the stock, at least in the

premarket trading, is down, but it's still nearly double since initial public offering. that's not a lot of trading days either. brought public at 24. as we pointed out, 30 times over subscribed. listen, you hear the numbers, sometimes it does not mean the stock will double over three trading days, but in this case, that's been the case. the multiples up there, although you quoted me a number yesterday for 20 16 making that not cheap if that number is achievable. three bucks or small? >> these guys may not realize that the broad nature of what is really an ecosystem that gopro has, not yet apple, but people think of it as just one thing, that bradley, i think he was wearing one in the last 20 minutes of the -- that's me. i didn't mean that. >> that was mean. >> i love the u.s. team. >> came alive in 20 minutes. >> he did. >> everybody did.

not quite enough. >> gopro is not a one product thing. it's a pan plea, and people are excited. will it be twitter, going up and crashing? i think it has two or three or four quarters where you are fine, but hard to justify, to me, buying it on evaluation basis, but, no, institutions that were late on the deal, come in, buy a at 29, and get the average. >> nick woodman, family's own 49%, made a billion on top of what he made on the day of the ipo. we laughed yesterday at the market cap being above u.s. steel's, but they are closing in now on nikon's cap. >> what can i say? listening in this morning, caught from bloomberg, credit whoever i get it, about a blah blah, the french modernization of your own car where you can

pick up people and hundred days race, hundred million dollars. you know what? we're going to see air being beat back, you'll get evaluations and hear once again about uber and how people are insta insta insta instant oligarchs. >> first advertisement i had seen. >> can i use your apartment when you go away? >> yes, but you don't have to pay. >> really? >> yeah. >> you're a pal. >> for friends, you can just stay. pick wherever you want. >> like you don't have enough places to live on planet earth. >> can i use -- >> yeah. >> because i don't know which of the seven homes i want to be in, so i'd rather sleep in your living room. >> sure. when we return, cramer's mad dash, and a look at futures keeping 17,000 in our sights. more "squawk on the street" from the nyse straight ahead. who don't have electricity

and i just figured that it's time i do something about it. what we're doing right now, along with ibm, is to actually transfer data through a satellite from our wind farms directly onto the cloud. i think we could create a far more efficient system across the whole network where we could actually draw down different kinds of energy based on when it's needed by the consumer. a smarter energy system is made with the ibm cloud. at every ford dealership, you'll find the works! it's a complete checkup of the services your vehicle needs. so prepare your car for any road trip by taking it to an expert ford technician. because no matter your destination good maintenance helps you save at the pump. get our multi-point inspection with a synthetic blend oil change, tire rotation, brake inspection and more for $29.95 or less. get a complete vehicle checkup only at your ford dealer. the porter was so incredibly...

careful... careless... with our bags. and the room they gave us -- it was... beautiful. a broom closet. but the best part but the worst part was the shower. my wife drying herself with the... egyptian cotton towels... shower curtain... defined that whole vacation for her. don't just visit new york. visit tripadvisor new york. [ male announcer ] with millions of reviews, a visit to tripadvisor makes any destination better. [ male announcer ] with millions of reviews, in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.

all right. we have seven and a half minutes before the opening bell, time for the mad dash. we're going airlines and booze. not necessarily connected. >> no, not together. delta this morning, guiding -- different metrics for different companies. past revenue receipt mile. delta saying they could do 5 to 7%, came in at 4.5%, disappointing to people. the stock had a great run. >> 22% this year. >> a good performance, takes a

breather, i love the airlines very much, and i'm not fretting one particular month. the reason i'm not -- american is my favorite -- is because this is an industry that got blessed by the justice department. >> that is what connects delta with constellation. both beneficiaries of antitrust. >> or protus? >> in the case of antitrust, the authorities came and said, wait a second, in terms of modello, they were the beneficiary. >> yeah, that's the biggest seller, a 17-table restaurant in brooklyn, and what's amazing to me is you just didn't know how powerful the combination would be. the reason why molson-coors was a top ten gainer in the previous quarter has people believing that anbev is going to buy miller. >> there's rumors of more consolidation to come in an industry that's consolidated massively over the last decade, let's call it.

>> people feel in the end the loser is consumer because beer is one of the most -- it's a universally drunk beverage, but there's not price increases yet because boston, you know, sam, ipa, there's a lot more than just the old days. brooklyn brewery, but watch mol sorks. >> reported nice numbers. >> yes, watch molson. consolation is doing well, they sail they get miller, sab miller, they have to be divested. one of the top ten performers in the last quarter, could be higher still because the ceo has not rule out what constellation did, buying a piece they otherwise didn't have a chance to get because of justice. >> stocks incredible. >> this is not rough justice. this is easy justice, not rough justice. >> no, a key them as well. all right, opening bell five and a half minutes away, and a lot more "squawk on the street" coming right back after this. radio announcer: it's mattress discounters 4th of july sale.

bulldog: that cloud reminds me of.. radio announcer: a queen size serta pillow top mattress... bulldog: that's it! radio announcer: now on sale for just $597. bulldog: that's a ringer of a deal! radio announcer: mattress discounters 4th of july sale ends sunday.

but we're not in the business of naming names. the fact is, it comes standard with an engine that's been called the benchmark of its class. really, guys, i thought... it also has more rear legroom than other midsize sedans. and the volkswagen passat has a lower starting price than... much better. the... vo: hurry in and you can get a $1,000 turbocharged reward card when you lease a new 2014 passat s for $219 a month.

who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ so the magic shell went back to being a...shell. get live squawks right in your trading platform with thinkorswim from td ameritrade. live from the financial capital of the world, opening bell in two and a half minutes. busy day, of course, the dow up

129 yesterday to start the third quarter. we did not see a triple digit move in june. that has not happened since 2005, and with the triple digit gain, s&p has not moved 1% in 52 days, the longest stretch since 1995. >> wow. >> it's app up exciting rally. it does not have the peaks and valleys we associate with it. it's steady. i always think i wish more people were involved. this is the rally that makes you feel like, you know what? i can sleep at night owning good quality companies, and people aren't. we know from the numbers it's shocking. >> there's not a lot of liquidity either. >> true. >> that's the time of this year, this week, before the long holiday weekend, but there's not, if you run a portfolio, take risks down or generally take positions down. >> if a big seller comes in, i have to below it takes it down.

tomorrow, we have a day that is, i think, historically one or two big buyers or sellers determines things, and i don't think people realize that can happen. >> see what yellen says at 11:00 a.m., and we'll get the jobs number tomorrow instead of friday. couple of reports or rumors moving a couple names, thinking of a shutterfly today. >> how many times they tell you, listen, we're interested, hiring, might be able to get a deal. >> a story from another service saying the process was not going well, stock is down, and now a story from another service saying they might go private, and the stock's going up. >> right. meantime -- >> i don't know if it's modern day. >> i like shutterfly, put together books of your trip, and the company is undervalued and taking action here. new company, frankly, to really just decide, you know what? we're ready to go. >> i don't know if they confirmed that. i don't know. >> we don't know. i don't want to -- >> find those dangerous

sometimes. >> yes, yes, good point. in the meantime, awaiting the opening bell and looking at the s&p at the top of the screen. by the way, we've gone a thousand days without a 10% drop. >> a thousand days. >> yes, on the s&p. >> that's amazing statistic. >> there's the opening bell. at the big board, a provider of packaging, print, and publishing services, celebrating its spinoff from international paper and unisource worldwide, and the tennis association providing education to underresourced children and individuals with date disabilities and what a day at wimbledon. nick, did you see this? ranked 144th takes nadal out? 19 years old. >> i was in europe last week, and the headlines were, let's have the coronation for nadal. it's a coronation. no coronation. i'm -- >> that's why they play the

game. >> saying, by the way, we have to declare, i'm going for colombia for world cup. >> oh, interesting. >> yeah. >> trying to figure out who to support. i think argentina, why not. >> they are all fun. that's what turned out -- it's interesting, you hear the nation turn the moment that the last -- you know, the end of the game, all switch to the lightning round. 639, boom. just like that. delta's the biggest loser this morning, 4%, what's going on? >> yeah. when you start trading these things on a month-to-month basis, the revenue number is disappointing. if the stock had not run so much, i don't think anyone would care, but when you guide things to 5.7 and average seat model is not what you thought, people panic or ring the register. i want to say, don't, american air is cheap ergs but this causes pressure on all these guys. i don't want to trade them month to month because we have periods

where a month is weak and it's the opportunity to buy, not sell. they are inexpensive stocks that generate a lot of cash and return to capital is there. don't give up the ships so quickly. >> talking about return to capital, this is last week's story, but i wanted to come back to it, monsanto, and i missed this days aechlgt did you see what they sold 50-year debt at to help the $6 billion additional buyback they moved to? 4.7%. >> come on. this is -- >> i mean -- this is a biotech play. >> five year, seven year, ten year, a whole range of debt, 4.5 billion worth aggregate. >> incredible. >> tax adjust that because you get tax savings on interest, 3% cost to capital for 50 years. why isn't everybody doing that? >> why doesn't jack lew do that? >> you've been saying that for a while. >> permanent capital for a

company that transformed itself from a commodity chemical company to a great biotech company, happens to be in ag. dupont did not have the great number. >> nay did not. monsanto had the number in terms of corn harvest. >> see how much corn we do year over year, and monsanto invented great seeds. they have. you have a triple stack, seeds that do well in drought. boy, we had a drought in california, which is really tremendous number of days with no rain there, and seeds still seem to work. whatever the environment is. this time yesterday, talked about anthony noto going to ceo at twitter. taking a pessimistic view, company struggling to find its footing in the wake of, obviously, the multiple management changes they had. >> carl, you know these guys really well. seems like they just basically had a valentine's day july 4th,

go through the whole year massacre. were the people there just not doing the job? >> you know, their media chief, chief operating officer, head of product, now the cfo, i think there's an issue -- saying this for a while, they are not broad, period. in terms of accessibility, ease of use, ability for new users to on board as they like to say, there's hurdles to getting used to twit e and i think they feel their story is not told well. yesterday, on "squawk alley" suggested have eyes open for whether or not they are dressed up down the road. >> oh, come on. >> believe it or not. >> that would be amazing. >> now, look, i -- meanwhile stock is up following gains on yesterday on the noto news. >> thinking like anthony noto, sure hand comes in when eric schimt was at google. >> that's a little different. >> no, no, definitely, and noto

was a successful ceo for an outfit, the greatest brand of all time, which is the nfl, and noto, i know him personally, not about friends, but money, but you'll see end of turmoil at a certain point if noto goes in because he'll decide quickly who gets the program. >> to the point carl made is anthony noto will not have a lot to do to get people to sign up and user growth rate to move more aggressively higher. >> no, i know, but you go on twitter, and you're watching the usa bell and realize people express emotion, like, they used to call, david, what do you think of the game? david, and 200 million other people, let me tell you how i feel about world cup. if you can monetize that, there's something. >> favorite quote in the times, if they got a dime for being mentioned on television, they'd

be where they want to be. that's not it. it's not monetized. >> that's interesting. i saw this before. they have a franchise bigger than the actual business. >> right. >> you can't monetize that, then you are a charity. >> right. shares of amazon up a little over 1 %. the journal this morning has a story with the guy who runs the kindle/publishing, if you will, at the company, on the record, saying, hey, wii trying to act in the benefit of consumers in the battle that continues over digital pricing of books, but it is interesting to note that. >> well, you mentioned music decimated. the book business, when you do a book, the conversation is, look, we can't do what we used to because of amazon. amazon is disliked incredibly. >> no, the market share numbers are quite eye-popping. >> aren't they? >> 40% overall, 60% according to the latest people who keep track of these things of the digital

book market. >> right. >> went into it in detail in the documentary which i believe reairs tomorrow evening. >> oh, that's good. >> give people a head's up there. >> i was doing a signing at a store for it carefully, and two people asked me to sign their e-book. >> how do you do that? >> you wreck their device. one of the sillyist things i've seen. at prague at the great california, the guy stops me, i bought the book. i said, no, you bought the e-book. i need you to buy the book! >> i'm not sure if that makes any sense whatsoever. >> no. >> sign the kindle? >> sign my kindle. >> sign their forehead. >> it's all right here. >> listen, put an stp and always making fun of my -- by the way, i did not -- i was not the person who originated the

anthony don't know. okay, maybe i was. >> too easy. >> anthony don't know. >> had to go there. >> it's the anthony know, k-n-o-w, and n-o when it comes to spend. >> yeah. strong buy saying retail sales domestically grow slower than expected. >> that would be the only guy who they are. i was looking through the gm numbers yesterday. i mean, unbelievable. i don't know if you saw the new suv, more than 100% sales gains. chevy was amazing. >> buick. best year since 2006. buick. >> buick. i think the people have to recognize gm is a china play too. don't forget that. people are excited about u.s. these are big international companies and gm, i think, has not got ahead of ford. you hear of mark fields, new ceo, but gm is not just an american company, but fact is people like their new models. >> all right.

>> within 25 points of 17,000. checking in with box on the floor. >> another rough morning, folks. we are seeing a lot of beaten up groups move to the floor again. a tough time with stocks, but look at the internet index, you know, i wonder what happened in march and april, terrible situation, moving up almost every day. this is up, this saul the big momentum names we talked about. retailers, horrible first quarter, dropped dramatically, look at the retail index, and that's coming back too. this is what i talk about with the rotation, groups fall back and come back and step in. that's why the market stays at a high, you get the rotation. meantime, evidence that the economy is improving, adp number good, saw the pickup in the 1046 year, past 2.6%, people worry about inflation at this point, but if we get modest growth in the economy, the stock market may well be able to handle modestly higher interest rates. at least, that's my theory. look at the signs of life in the economy we had. aside the adp report today, may

new homes sales up 18%, pending home sales up 6%. this morning, isi said the truckers survey had the highest level since december of 2005, and that survey correlates very well with gdp growth. this are signs things are getting better. we need more hiring, obviously. moody's had a comment awhile ago, forecasting job growth of 1.8 % this year. that would be the highest since 2005. that's what we are missing. let's hope for better numbers friday. movers here, mentioned hog there, downgraded over at raymond james, and constellation had excellent numbers, earnings and sales beat and raised their 2015 eps view. bank of america got an upgrade over deutsche bank, and banker hughs did as well over at googen him securities. bioteches having trouble. global immune price, $10, good heavens. we talked $15 to $17 last week.

we saw that a lot with the bioteches, so many of them, hard time differentiating themselves, a cancer biotech company, again, trading in an hour. finally, a loot of talk yesterday about the s&p, six quarters in a row on the upside, and that's true, happened only a few times since 19 28ment important thing, five out of six times when this happens, up six quarters in a roerquarter, s&p p in the following quarter. bet against it. david, in fact, historically, the opposite is true. with it rather than against it. back to you. >> thank you very much, bob. we mentioned tax inversions, a story we've been following, frankly, longer than the general press followed it, just to say, but there is another one today attempted. so far going along the lines that we've seen, pfizer, shaire

and now in this case, destination maternity. i think their pea pod trying to buy motherhood llc, rejected two officers so far. owners of pea and the pod, a play on a lower tax rate and repatriate tax earned overseas and bring it back without paying taxes on it to the u.s. it is another potential inversion. in this case, again, they've been rejected twice, u.k. takeover law, and those of us who follow ma reacquainted ourselves over the last few months as so many companies are trying to make plays in the u.k. for u.k. based companies in part to invert. think pfizer, and all the missteps they made. perhaps their advisers are not familiar with u.k. takeover law. >> worst performer since dow 16,000. >> absurd. >> thought they were buying an

apartment in brooklyn. >> i think they did. final bids. you got the 30-day window, remember, then stand down. don't say best and final otherwise you're done for quite a while. take a look. i mean, we talk eed so often abt it. i think we put together attempted deals. pfizer, and abvee shire as well. >> do you think they would? >> yes, why wouldn't you? >> i think he would have said, do we do it or not? >> shareholders push them as well. make an argument it's your fiduciary duty to make sure your tax policy works to your advantage. >> of the ones that make since. they bought before -- >> they did.

>> an economic thing, not just a sham. >> strategically done. >> not a mail drop. >> not about the inversion being the main driver, many argue was the pfizer and number of other deals. this is alive and well and we'll keep an eye on the small deal here, but it is, of course, we mention it because it's reflective of the larger issue. >> right. >> that we can't stop talking about it. >> no. >> eventually -- kidding, but you're going to have a hole in the treasury. you will have a hole in tax revenu revenues. >> big story in "business week" the rich moving to puerto rico. with all the problems and inconveniences of living there -- >> right. >> i looked at real estate in puerto rico. >> really? >> yeah. i felt my -- the people talking said, listen, the moment's going to come, and i guess it came already. >> you got the exploration of the tax deferrals, moving money back by 2017 as a hedge fund.

establish residency there if you can so you're not taxed back here in new york. that's another thing. >> i have jersey and new york residence because they find me a dual rez sense so i have a 52% tax break. >> amen, you're a great american. >> let's go to rick santelli at the cme group in chicago. >> good morning. we had a powerful adp number, 28 1,000. let's look at the intraday of tens, they popped, and the 10 -year guild popped at 815. look at gjb, japanese government bond 10-year, flat, nothing, comatose, in the mid-50s. booms popped not just once, but, boom, yesterday, popped again in terms of yield, lower prices. stick with the booms. benchmark that against tens. well, we see that spread continue to move to historic proportions.

as a matter of fact, today's move is now widening the distance between the yield on our ten and the yield on the boop to a level not seen in 15 years, the summer of 1999. i was on the floor in the preopening, dow popped, came back a bit. look at dax, it popped at 815, gave it back, and we'll monitor stocks. pounds versus the dollars, best levels since halloween of 2008. carl, back to you. >> thank you very much, rick santelli. when we return, alibaba, this year's most anticipated ipos, but will investors buy the stock? a new survey actually says no. details on that coming up. ♪ [ 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. ♪

just one day away from jobs thursday, meaning another chance

for you to nail the number, win a prize. tweet predictions from nonforeign payrolls, use the hasht hashtag, nail the number, and in honor of the jobs report on a thursday, we're giving away a throwback thursday prize, a time lapse video of the construction of the headquarters at cnbc, back in 2003. as a result of all that, you'll receive this. a cnbc hard hat autographed by the "squawk on the street" gang in honor of the 25th anniversary, and jim is signing it live on national television right now. >> be consistent. i'll give the boo-ya. >> and the secret ticker tip. >> oh, yeah, forgot about that. oh, yeah. >> i don't have anything. i got nothing. >> what about socrates? >> what? >> no. >> we can steal, are you ready, sky daddy. >> i like that. >> i need a catch friez.

>> you really do. >> you'll have one until one minute of the friday release at 8:30 a.m. eastern to submit predictions. best of luck, consensus for the month, looking here, 213, yeah. which would be the fifth month of 200-plus. >> frequency traders get the number right? are they allowed to play? just kidding. they don't get the number earlier than anybody else. >> they don't have a pipe to the labor department. >> they don't, or the orange juice futures either. >> see what happens tomorrow. best of luck. stock trading with jim in a moment, and dow's up 13. be right back. [ male announcer ] some come here to build something smarter. ♪ some come here to build something stronger. others come to build something faster...

something safer... something greener. something the whole world can share. people come to boeing to do many different things. but it's always about the very thing we do best. ♪ f provokes lust. but it's always about the very thing we do best. ♪ it elicits pride... ...incites envy... ♪ ...and unleashes wrath. ♪ temptation comes in many heart-pounding forms. but only one letter. "f". the performance marque from lexus.

female announcer: sleep train's 4th of july sale dit's going out...with a bang! through sunday, save $300 on beautyrest and posturepedic. plus, pay no interest for 36 months on tempur-pedic and serta icomfort. big savings and interest-free financing? these deals aren't just hot... they're explosive! sleep train's 4th of july sale ends sunday. ♪ sleep train ♪ your ticket to a better night's sleep ♪ could help your business didavoid hours of delaynd test caused by slow internet from the phone company? that's enough time to record a memo. idea for sales giveaway. return a call.

sign a contract. pick a tie. take a break with mr. duck. practice up for the business trip. fly to florida. win an award. close a deal. hire an intern. and still have time to spare. check your speed. see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business. built for business. greenbriar up all day, a major rail car play, and i thought trinity peaked, obviously nots, companies with big beneficiaries of things like the keystone pipeline not aproved. want oil, you have to use a tanker car. you don't have enough pipelines, and this is the the core of what is exciting in the rail car business. don't forget, if you want to ship fracking, that's important, one of the things they are doing, company called emerge on "mad money" the other day, going

from 4,000 to 8,000 cars within two years. why? because you got to get the sand there, the oil out. it's all done by train because pipelines are hard to permit these days. i mean, obviously, there's pipeline work, and transcanada, but the idea is that even though railroads, to me, are a dangerous way to do it, greenbriar has a nice safe tank car, and people are lapping it up. vitacost, and saw muscle milk, consolidation going on in the vitamin space, going in against gnc and vitamin shop. let's say that kroger, moving into natural and ogranic, sliced margins of other people, most aggressive player in all the supermarket chain these days. >> what about "mad money" tonight? >> paychex is on tonight, a good small business number on adp.

small business company, the company that does the payroll stuff is paychex. we have to see what's going on with small business, ask about yellen, what she says today because small business is hiring, well, seems like a very cross current portion of the u.s. economy. >> finally, if we do see 17,000, does that draw out bears? >> i think the numbers do do that. i think the numbers do not encourage people, discourage people. i think people say it's automatic, not as much algorithms because of the dow's and s&p, but it brings out sell e and i caution people, a great run, and tomorrow is a thin day. i like the market longer term, they buy back stock aggressively, move stock, and not supposed to take off, obviously, but with a sell, you see those buying back stock held up well in the rare big selloffs we have. stay focused on those if we are hit tomorrow. >> thank you. >> thank you, guys. when we come back, joe

petrowski weighing in on the high crude prices, and, first, breaking news on the economy, factory orders hit the wires after a break. we give you thet free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and e-trade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. call or click to open your fidelity account today. but we're not in the business of naming names. the fact is, it comes standard with an engine that's been called the benchmark of its class. really, guys, i thought... it also has more rear legroom than other midsize sedans. and the volkswagen passat has a lower starting price than... much better. the...

vo: hurry in and you can get a $1,000 turbocharged reward card when you lease a new 2014 passat s for $219 a month.

ugh. heartburn. did someone say burn? try alka seltzer reliefchews. they work just as fast and taste better than tums smoothies assorted fruit. mmm. amazing. yeah, i get that a lot. alka seltzer heartburn reliefchews. enjoy the relief.

welcome back to "squawk on the street," moments away from may factory orders being released. remember our last look was up 7/10 of 1%, a big number, and expecting a give back, the highlight is a stronger than expected adp at 281,000, and the survey says factory orders for may dropped half of 1%, down.5, and factory orders, transportation month over month dun one-tenth versus five tenth, and positive, our last look. sarah eisen, all yours. >> thank you very much for the breaking data. checking out the markets, we are keeping an eye on the dow inching ever closer to 17,000, just a day before the big june jobs report, and andrew berkley, managing director, steven, the chief u.s. economist with

securities. the economic data seems good, on trend, but it's not so, so, so good where we have to worry about the fed and higher interest rates. >> well, i think that's exactly the right interpretation, and the data is consistent with an economy that on average is running about two and two and a quarter percent, the trend rate, so you're right. it's not a number that says, realm, the fed is going to stop tapering, and it's not a number that says it rushes out and raises interest rates. the fed is on hold throughout 20 15 when it comes to interest rates. >> does that scenario set us up for a good second half falling on the 6 %-plus gain seen on the s&p 500? >> yeah, i think it does. the big benefit, this year, obviously, long interest rates, you know, came down 40 to 50 basis points, modest, but the economic data is rebounding, going into earnings season for q2 here next week, and analysts

look for plus-5% earnings growth, which is good, and reaccelerate in the back half of the year. i do agree. i think we're still in the go goldilocks environment. pricing power is decent, but not inflation pressure that continues to push the fed back larts into 2015. >> good enough is the consensus there. steven back to the data in terms of jobs tomorrow. adp, a positive surprise at 281,000 jobs created in the private sector. it's not a perfect indicator of tomorrow's report, but does it guarantee or suggest that we should see a 200,000-plus level? >> well, i will tell you it's far from a perfect report, as you indicated. if you look at the misses in adp, been as little as 1,000. it's been as much as 151,000, so, i mean, when you look at that kind of number, people are probably raising their whisper numbers. we're not changing our number. our number's been 17 5 to 200,000 the past six to nine months, and on average, running

close to that, and we think that's probably still the best point estimate to have going into tomorrow's number. be that as it may, the 10 -year number goes to the back enof the range in anticipation of an adverse number tomorrow, especially in the thin market. people want to be as close to home as possible in the trading book for the tomorrow's number with a shortened day and thin holiday weekend. >> going through the adp report, construction industry added 36,000 jobs, more than double the may number, encouraging. if you look at the pillars of the economy, what we learned this week is housing is coming together and recover. manufacturing coming in better. is the one wild card right now the consumer? >> well, the one wild card is always the consumer. nothing is really sustainable in terms of all the other components of gdp unless you have the backdrop of consumer spending, not only needing employment, but you need income generated out of that employment. if we start to substitute employees for hours, if we don't raise wages enough, we could

wind up getting, you knowing wage and salary growth of 2%, and it's hard to imagine a su l consumer adding more than 2 % to gdp, and 75% of gdp starting on a 1 .5% base, and you're back to two, two and a quarter. accelerate wage and salaries out of the payroll employment numbers tomorrow. we'll have all the details in the number when it comes out at 8: 30. >> andrew, given what is working and what's not, what sectors are you interested in the second half? the winners from the first half? utilities, energy, health care? >> i don't know about utilities. you know, i think utilities are bit up quite a bit, but energy is what we look, faif rate area, all in the first half, strongest earningings profile, and it's still a good valuation. you know, i think the big part of the first half, in my opinion, was a rotational correction. everyone looked for the price correction in the big cap

indexes. a big rotation out of the early cycle areas like consumer, small caps, things like that, into the later cycle areas and energy fits that bill. we are positioning in energy, industrials, and tech, the three favorites for the second half. >> industries and tech. why do you like technology here? >> technology, you know, i think is an ongoing improve. story in terms of business capital spending, you know, consumer spending coming back, just overall, you know, technology infrastructure, and still valuations look great in the sector relative consumer discretionary. >> steve, janet yelp is speaking at the imf, taking it live there, and how good does the economic data have to be for the fed to consider raising interest rates? >> it's not a matter of how good the data has to be, but a matter of how long it's good. we need, after seeing this economy under perform for years, to need quite a run of stronger than expected numbers. i think the shift janet yellen

and other dubs on the committee to moving interest rates higher. this is an economy you have to be careful, up to 3%, the economy begins to weaken with the 10-year note rapidly, the economy slows on the backdrop of that, and when they pair back from things, the economy gets momentum. sensitive to interest rate, and therefore, they move judiciously. >> gentlemen, thank you very much. we are building on yesterday's rally with the dow less than 30 points away from 17 17,000. good to see you. and, of course, a day away from jobs thursday. not friday because of the holiday. you know what that means? another chance to nail the number and win a prize. tweet us pretixs for june payrolls, use the handle at squawk street and use the hashtag nail the number, and in honor of thursday, it's a throwback jobs thursday. if you win, you receive a hard hat from our renovation when we renovated -- what did we ren

vase? i don't know. we -- >> we do construction. >> we didn't renovate, built a new building. >> that's at 8:30 eastern to submit predictions. best of luck to you. >> 215,000 is the estimate. interesting to see in the next 24 hours if that goes higher from adp, although, a less than perfect indicator. your chance to win a hard hat. over to dom chu. >> good morning, check out what's happening with constellation brands this morning, surging on better than expected first quarter earnings and sales. resulted boosted by an acquisition, the big one, the spirits maker raising the full year outlook as well. the stock, as you see, off session highs 2.5%. the stock, stz, up 33 % this year, and in a programming note, in an exclusive interview, rob sands live on "closing bell" 3:00 p.m. eastern here on cnbc:

back to you, krarm. >> thanks a lot. jamie dimon reporting he's diagnosed with throat cancer, saying the proknow sis is excellent, caught quickly, and condition is curable. he'll be actively involved in the company during treatment, and limit travel in the eight-week long radiation and chemotreatment, but other than that, says, quote, we'll continue to run the company as normal. thoughts are with him. >> yes, wishing him well. coming up on "squawk on the street" gas prices got you down, as we hit a six-year high at the pump, the former ceo on gulf oil on where prices are headed next. still a fed-driven rally? the only chart that matters, you are looking at it. we'll discuss it coming up on "squawk on the street." lution d. ugh, we don't have that. what should i tell him? just make that super annoying modem noise...

(shuuuuuuuh....zzzzzzzz...de ee...dong...shuuuhh...) hello? not all credit report sites are equal. classic. experian.com members get personalized help plus fraud resolution support. join now at experian.com. with enrollment in experian credit tracker. thank ythank you for defendiyour sacrifice. and thank you for your bravery. thank you colonel. thank you daddy. military families are uniquely thankful for many things, the legacy of usaa auto insurance can be one of them. if you're a current or former military member or their family, get an auto insurance quote and see why 92% of our members plan to stay for life.

bulldog: ibut my friends i are learning skillsnt! that can change a life. that's why mattress discounters good deed dogs is raising money to help train dogs like suzie to engage students in schools and special education classes.

while ginger visits folks in the hospital offering quiet comfort. with your help, we can do even more! make a donation at mattressdiscountersdogs.com or any mattress discounters. mattress discounters good deed dogs helping dogs help people. more than 30 million americans are expected to travel 50 miles or more by car this upcoming independence day weekend, and they'll be stuck paying higher gas prices. in fact, the highest in six years. this as tropical storm arthur heads to florida, threatening 4th of july plans along the east coast. joe petrowski is the former ceo

of gulf oil, thank you for joining us. >> thank you, appreciate it. >> on the price of oil and gas, yes, the highest for 4th of july in six years, but the read is it could have been worse, is that right? >> oh, absolutely. the good news is our domestic production and loss of demand for demographic and technological reasons, the cafe standard have dampered the price effect. i still think we're going to go to $4 within the month on a national average price from today's 3.70, but the good news in is that we lessened alliance on gasoline because of the urbanization, zip car, uber, now families don't own three cars per family. there's a profound demographic trend going on downstream in the industry. we can go down further if the government would actually institute certain policies that would not all the problems are the fact that 18 % of the world

oil is threatened by isis and the hurricanes. we have things to do here dmoesicily, and our trade association in mid-month is in washington lobbying for changes, more infrastructure, relief from chipping. i mean, what we forget is chicago is 20 cents a gallon cheaper than the east coast. the gulf coast is 30 cents cheaper than new york. yet we don't really have the way to move it there. we're producing a lot of crude. >> sure. >> but it's light sweet crude refineries are not geared up to handle. i think, by the way, that makes the pipeline and lo gist ticks company great investments. i'll put in a plug for them. i'm not an equity analyst, but -- >> no, we were just talking about companies that make the cars to carry sands and all that doing very well since the pipeline's not happening. >> oh, yeah. >> joe, we had the policy announced days ago, the u.s.

allowing exports of ultra light stuff to be turned into jet fuel. is that a wedge into a broader category falling under the same umbrella? >> oh, i think i was surprised they hit the refiners like valero. i think it was overdone. they'll swipe the light u.s. crude for heavier crude that refineries can process. in the long run, i don't think it's going to dampen earnings, but might, in fact, strengthen them, and commodities are essentially have to be free. i'm in full support of the administration allowing the exports of crude. i mean, because, in fact, one of the big costs of the commodities is not just the cost of production or the everlasting demand, a problem in gasoline. it's the fact, as my old boss

used to say, the function of a good commodities trader is to move it from where it is to where it isn't, and i think that was sensible policy on the part of the administration. >> just on the last point about gas prices. you mentioned we're headed to $4 a gallon, right at $3.70 right now. what takes us higher? things calmed down in iraq and supplies in the southern part of the country are not disrupted at this point. >> well, one of the things that's happened in the last four years -- that's a great question -- we have concentrated more and more of our refining in the gulf coast where we don't have take away capacity either because of the jones act or because of the lack of pipeline capacity. we're shipping a hundred million gallons a day on the colonial pipeline, and believe it or not, even that is not enough, and the fact that you have all your refineries concentrated in a narrow geographic area is not a good from a terrorist

perspective. it's not good from a hurricane perspective. we closed the east coast refineries, closed the west coast refineries, have capacity in the upper midwest, but no take away capacity on pipelines, so the gulf coast is extremely vulnerable to a hurricane more than it's ever been, and that's not good for policy. in addition, i think you're seeing a huge pickup in chinese demand for transportation fuels as they have a concerted effort to develop suburbs for political reasons, trying to move a lot of young men and young family out of the cities to the near suburbs, and just like we did in the 40s and 50s with the gi bill and housing boom, that will put a lot of strain on transportation. might be great opportunities for auto manufacturing, home build, and all the other things, house formation brings, but we're

having a reverse trend in this country where we're leaving the suburbs for the city, which is dampening transport crude. china is literally where we were back in the '40s and '50s. look at hawaii, at 4.50 a gallon in hawaii. >> it's true. it's brutal. california above $4 as well. joe, great to talk to you and get insight on the changes land scape of the u.s. energy supply especially in this country. >> thank you. >> joe is the former ceo of gulf oil. >> thank you very much. lots more ahead, a look at alibaba's ipo and whether investors would buy shares, fishy about what they are saying. we'll get to the bottom of it, and in the meantime, speaking of fishy, gopro doubled its ipo, but giving up gains today. we'll talk to one of their suppliers on their plans when we come back. helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved

to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial.

ask your doctor about cialis for daily use f provokes lust. ♪ it elicits pride... ...incites envy... ♪ ...and unleashes wrath. ♪ temptation comes in many heart-pounding forms. but only one letter. "f". the performance marque from lexus. just want to say, i bundled home and auto with state farm, saved 760 bucks. love this guy. so sorry. okay, does it bother anybody else that the mime is talking? frrreeeeaky! [ male announcer ] savings worth talking about. state farm. frrreeeeaky! are the largest targets in the world, for every hacker, crook and nuisance in the world.

but systems policed by hp's cyber security team are constantly monitored for threats. outside and in. that's why hp reports and helps neutralize more intrusions than anyone... in the world. if hp security solutions can help keep the world's largest organizations safe, they can keep yours safe, too. make it matter.

our next guest takes a look at the bullish implications of the fed's balance street and correlation with the market. i want to bring in the market report news letter joining us from out west, and, tom, good to have you back, good morning. >> hi, carl. >> the chart last week got amazing response, at least on twitter. leaving it up on the screen with enough time for viewers to absorb it all. walk us through what it says on the face of it, and then what it says about the stock market. >> well, it's a comparison between the s&p 500, everybody knows about, and the fed's total holdings of the treasury bonds and mortgage-backed securities. there's a lot of ways to look at the fed balance sheet. this looks at those two kpoen components, and we see every time the sheet rises, that's great for the stock market, but, also, even when it goes flat, like at the end of qe1 in 2010, we got the flash crash, and ended qe2 in 20 1 1 with a

selloff in jaw that year. the fed learned never to let it go flat again, but they hope they can taper slowly and wean the market off much more gradually than the last two attempts. we'll see if they are right, but for now, they're still 35 billion a month going in and keeping the slope of the line going upward, and that keeps the slope of the stock market going upward as well. >> it does appear to a layman to be a pretty firm floor. we know what tapering means, what happens in your view to equities once that line starts to flatten out again? >> well, we -- this is only a limited look back. there's been other things the fed did in the past, but the magnitude is just so huge compared to what the fed did with the balance sheet in the past, that we can't look back 30 years and say, what did it mean last time? they've done so much injection of money increasing balance sheet that we're in new history, and what this chart shows is that the fed was horribly

miscaken in 2007 and 2008 when they started shrinking the size of the balance sheet, and taking money off the market in the midst of the liquidity crisis, worst thing to do that magnified the depth of the decline in 2008. >> although, on the chart, the decline does not seem that great. i just -- you know, trying to understand here because it doesn't seem the correlation between shrinking the balance sheet and market going down is as strong as increasing the balance sheet and market going up. >> that's right. hardly any decline in 2007 and 2008, but that reveals how important this is, just a little bit of action by the fed to move the slope of that balance sheet curve down word has a huge effect on the stock market, huge implication. we're in the volatility phase, money comes in pushing the target up at the point of the slope of the line changes, we'll get into more typical volatility as the market has to switch off of the all fertilizer all the

time banks system and look for its own pockets of liquidity. >> if you overlay a chart of japan's balance sheet, that gives support where the federal reserve tapers, they go the other way, all the money slushes in the same system. >> very true, especially the european central banks balance sheet with the same message. >> another great chapter from you, tom, focusing on housing. we want to know where housinglar out futures on lumber. what does that tell us? >> whoever looks at lumber? why would anybody care about lumber prices? turns out the movement of lumber prices a year ago tells us what happens to housing stocks today. if you're at a football game and the said yum wave, you see it coming, you know when it's going to get to you. the same dance steps show up in lumber prices show up in the

hgx, the housing index on the philadelphia exchange, and people who play that -- there's a couple etfs you can use that track the housing market. one is itb, the i shares version, and the other is htb, the spider version, and they are similar in the terms they rep kate almost exactly, nfegtly rp but prices move upward at the end of 2013 so housing moves up in 2014, but not doing so well in early 20 15. >> is the chart material enough to tell you there's a leg down or not? >> should have a leg down, how much we don't know, but in early 2015, i would not be as bullish as i am now for housing stocks. we don't -- the magnitude does not match up as well as the direction, but if you get the direction right, the magnitude cares for itself. >> great stuff, tom, appreciate you coming on.

see you next time. >> okay, carl. >> talking fed and housing today. let's go over to dom chu for market flash. >> moving higher, the railroad rail car maker raising full year earnings forecast after reporting better than expected third quarter profits helped by increased deliveries of the rail cars and specifically tanker cars. stock is trading, you see there, up 12 % on the day, and for the first half of the year, this stock's been on its hair, nearly doubled in value, and, of course, any time i think of greenbrier, i think of golf, but in this case, it's all about rail cars. back to you. >> good to know. not what i think of. dom, thanks. shares of kroger, a real out performer for grocery stocks making a deal today, small deal, $280 million paying to buy vitacost.com. it's unchanged now, but what's interesting about the deal is the strategy here when it comes to online.

vitacost.com sells health care and nutritional products online, and kroger making a play here against the likes of amazon fresh and fresh direct where increasingly consumers are ordering their basic goods and groceries online, and, david, we've seen other companies try to do this before. we've seen amazon experimenting with it, kroger made a purchase at the end of last year in the south bay, online program, sort of click-and-connect program. programs roll out shelf product, in other words, not the fresh stuff because that's going to be easier, but it's an experiment. walmart working hard on this as well as consumers shift for the companies to adapt in this acquisition, i think, speaks to that. >> the harris deal was, obviously, a large deal for them. what is the main driver as to why the stock is up from what's called 35 in earlier february of this year? >> kroger? >> yeah. >> growing same store sells from the recession, lowered prices

ahead of it, got ahead of that, and stocking the shelves, a good old cincinnati company. >> favorite in the acquisitions. >> other than walmart, the biggest grocer. >> between kroger, hormel with muscle milk, hillshire, food is going bananas. >> consolidations, yeah, more to come. coming up, a real breakthrough or setback? exclusive report for the alibaba ipo. life with crohn's disease or ulcerative colitis

is a daily game of "what if's". what if my abdominal pain and cramps come back? what if the plane gets delayed? what if i can't hide my symptoms? what if? but what if the most important question is the one you're not asking? what if the underlying cause of your symptoms is damaging inflammation? for help getting the answers you need, talk to your doctor and visit crohnsandcolitisinfo.com to get your complimentary q&a book, with information from experts on your condition. to build something smarter. ♪ some come here to build something stronger. others come to build something faster... something safer... something greener. something the whole world can share. people come to boeing to do many different things. but it's always about the very thing we do best. ♪

that's why i always choose the fastest intern.r slow. but it's always about the very thing we do best. the fastest printer. the fastest lunch. turkey club. the fastest pencil sharpener. the fastest elevator. the fastest speed dial. the fastest office plant. so why wouldn't i choose the fastest wifi? i would. switch to comcast business internet and get the fastest wifi included. comcast business. built for business.

. welcome back to "squawk on the street," the government reporting that crude stocks fell last week by 3.2 million barrels, just outside of the high estimate for withdrawal. gasoline bigger withdrawal than expected, down 1.2 million barrels. of that withdrawal, gas and oil, overall, million barrels of that came out of cushion. we are seeing wti and imex come off the lows of the day, but overall, the energy sector under a bit of pressure because of the geopolitical pressure easing a bit. more oil coming back online in libya, the prospect of that, and also the situation stabilizing in iraq. we are coming off a bit of the run up of that we've seen, and we are still holding steady here, although off the lows of the morning. carl? >> all right, thank you very much, bertha. we are counting down to the big

day, and we want to look at whether investors will be in or out. turns out there's a survey, and the results may surprise you. nick, the chief market strategist joins us this morning at post nine. good to have you back. >> good to be here. >> what's the survey say? we have not seen this yet. >> there's a lot of optimism about the ipo, 77 % of the folks think it prices well and work in the first 30 days and believe market structure is not an issue, no worries about heavy volume related to trading and expect to have good long-term prospects, and they said good or very good. the real mechanics of the deal look excellent. >> that does not mean they'll invest, right? >> that is the wrinkle in the whole survey and biggest surprise to us. there was a lot of optimism around the initial pricing of the market structure and long-term prospects, half of the people said they don't plan to invest, at all. >> i'd love to understand the mechanism behind this and whether the survey has any

meaning, no offense to you guys, but you said you surveyed the network, financial industry clients, partners, and how many people are we talking about? done a survey like this of a previous ipo so we could put this in perspective? >> absolutely, a couple background points. had roughly 3 30 people respond, the buy side, no retail involved here, and the other half from brokers and other partners we work with, but all financial professionals. we have not done prior ones. we did this for because it's a landmark transaction, so important in a number of ways. if this deal is half as big as people talk about, it's a top ten ipo of all time, and mark valuation very rich. we were really intrigued how the intersection of the pass couple of years of market structure issues as well as a big ipo come together. we do a lot of market structure surveys. >> no basis for comparison so the numbers are the numbers, but can't say, well, we did others. we have no sense what demand is like when you do these surveys. >> that's right. >> sentiment. >> we and we get few landmark

ipos like this, and we'll do the next one and come back. >> all right. half don't plan to buy. is that at any price, certain parameters? what's the appetite like? >> yeah, that was at any price. >> at any price. >> if they own chinese equities, they are happy to buy, two-thirds will. if they don't, well less than half, it's familiarity with china. >> which is interesting, a number of chinese ipos this year at the nasdaq. u.s. ipos up 20% on average, and it may be wise to jump in. >> yes. the way we looked at it is a branding opportunity, not just for alibaba. they will be fine, optimism. this is increasing the size of umbrella, interest in chinese equities so the next deals down the road have similar amounts of attention and probably more buyers. >> of course, we have not yet got the road show, a couple of weeks at the very least and it's

going to involve exactly what you're talking about, familiarizing people with the story, getting them comfortable. i mean, the survey could conceivably be a different one taking it in late july rather than when you did. >> thinking of a follow-up as the road show rolls through the european markets and into the u.s. to see how it plays because, to our mind, looking at the data, it comes down to the road show, engagement with investors that have not bought equities and pulling them into the fold. if it's not alibaba, what name could do it? what story pulls them in? this is the one. >> biggest ipo conceivably of all time, one of the largest retailers, if you can call it that. >> what do you make of the corporate structure, the partnership that nominates the majority of the board? we have to get used so the way they do things differently around the world, right? >> it is. funny enough, i was the lead analyst on the first chinese ipo of all time in 1992, china brilliance automotive. it had a similar structure in ways, and we moved forward quite

a few steps, it's the same basics around the issue. it's not changed yet. >> fascinating. >> kept them from the hong kong exchange and brougts them here. >> yep. >> hope so have you back. >> thank you very much. coming up, the stock has been on a run since the ipo. there is the chart. one of the risks of the gopro outlined, quote, we incorporate semiconducts from provider into all cameras. the soul supplier is at a risk. is this flying too close to the sun as this stock rolls off the highs this morning? the ceo of the chip maker is joining us on that risk next. 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...

with the state creating dozens of tax-free zones where businesses pay no taxes for ten years. become the next business to discover the new new york. [ male announcer ] see if your business qualifies. in today's market, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities

and see them through, we say: let's get to work. because the future belongs to those who challenge the present. veggies you're cool... reworking the menu. mayo, corn dogs...you are so out of here! ahh... the complete balanced nutrition of great tasting ensure. 24 vitamins and minerals. 9 grams of protein... with 30% less sugars than before. ensure, your #1 dr. recommended brand now introduces ensure active. muscle health. clear protein drink and high protein. targeted nutrition to feed your active life. ensure. take life in. [ 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. ♪ quite a run since the ipo, gopro shares down 10% now, but a hot start for the company going public. disclosed in the company's s1 was actually its reliance on a

single supplier, josh lipton is not valley right now for us with that supplier. josh? >> that's right, here with ambarella's ceo, feng-ming wang. and it's used for drop cam and p chips process high quality video. you know, market cap of around $900 million, stocks a monster of 930% in 12 months, interest in the partnership with gopro in particular. talk about how that relationship developed. >> well, i think you start the five years ago at a consumer electronics show, first time we had a chance to meet with nick woodman, the ceo and his team, and that's when he had the first video camera, and since then, we have been working together closely with the gopro team on all of the camera products. amazing to see how well they

grow in the last several years. >> you've been working for gopro for five years. over that time, you got to know, you know, gopro's nickwoodman, what is he like to do business with? >> oh, he's full of energy and ideas, and i really believe he's a marketing skill is the main reason behind this amazing gopro story. >> a lot of high energy, focused passion there. switching gears here feng-ming, it's security and surveillance market. when you look at the market, where do you see growth? resident side or where do you see? >> if you look at the security camera in terms of revenue and revenue growth, the security camera is the largest camera market for us today. if -- we also believe this market will continue to grow in the next several year, and the reason for the growth comes from two areas. one is transition from the

standard definition video to high definition video. the second is a transition from the end low camera to digital ip basic cameras, and i think one thing we have to point out is maturity of revenue today coming from commercial, professional use, but we do believe that the security camera will go to home, become consumer use very soon and we believe that's a fast growing market for us. future. >> did you have a question? >> yeah, back to the dependence on gopro, reading through the s1 they put out going public, business would materially and adversely affected if ambarella, your company, stopped supplying components on acceptable terms or delays. that's a lot of pressure. what's the risk that something like that actually happens? >> well, i hope it will never happen. i don't think that will happen. i think that is basically a standard language, a1, you have to put in for potential

investors, but our intention is continue to provide the best quality products for our customers, especially for gopro. >> and from -- you're in the space, competitive, right? big names here, texas instruments, for example. when you think about your technology, what differentiates it? what are the, you know, va advantages, competitive advantages you have there? >> we differ in three yeahs, the video quality, efficiency, and the power consumption. if you look at our ambarella founding team, we have a lot of video processing experience. most of us have worked in the video-related market for 20 years, and our core technology ambarella is about media processing algorithms, market leading quality as well as compression. >> with that dependency -- sorry to interrupt, but with the dpeps si on go-pro, now that they raised a ton of money in its

ipo, are you considering being a part of gopro rather than them acquiring you? >> well, i think our business model is continued to be an independent supplier because we provide to a lot of people in business and customers, and i think gopro, of course, is very important and very one of the largest customer for us, but the business model is to stay independent as a supplier. >> last question. we talked about gopro, but your technology in dropcam, work with google on its help outs applications. what's that relationship been like? anything in the pipeline there to know about? >> well, we are now working with google's collaboration this year, and this is ongoing jerning development. i don't think the near term revenue i feel is high, but we do believe the potential in the future for the future of growth that is there, and we are optimistic about the wearable

camera market. >> all right, feng-ming wang of ambarella. we appreciate it thank you for your time. back to new york. >> josh thank you so much. our josh lipton. going to rick santelli for the santelli exchange. good morning. >> good morning, carl. thank you for taking the time today, andrew. >> thank you for inviting me. >> you wrote many articles that i just read and reread about how there's a whole lost generation of young people that just aren't being integrated into the labor force, and being the ceo of a large restaurant chain that employees, what, over 70,000 people, you know about youth employment or lack therein, maybe you can explain. >> well, we do employ young people. the restaurant industry is famous for entry level jobs. it's how i got my start, scooping ice cream for minimum wage back in 1966.

it's something i'm familiar with, something that our company is familiar with. unfortunately, they are the jobs disappearing in this economic climate, and that's why i wrote the articles to see if we can try to reverse that. >> i'll put a quick face on it, and maybe you can tell me why they are disappearing. 16 to 24-year-olds in the u.s., that group is roughly 13% unemployment. excuses, well, they are going to school, but there's close to 6 million in the subset not in school and not working. u.k., number is 18.5%, and in spain, 50%. where are the jobs going? >> well, in the united states, we have a problem, and the problem isn't so much the unemployment rate. the problem is, as you referenced, is the labor participation rate because if kids don't look for a job for a month, they are out of the labor force, and labor force participation rates for that age group hit historical highs.

the problem is in the u.s., and there are economic problems in europe that go way beyond what we have, although we are trying to copy their model, but in the u.s., minimum wage has been going up in municipalities and states, making entry level jobs more expensive, more expensive to hire a high schooler or college kid, and there are experienced workers who are willing to take those jobs. one, because there are not a lot of jobs out there, and, two, because a lot of them have had their hours reduced because of the obamacare legislation and the cutoff at 30 hours a week. a lot had hours reduced under 30. they knee the hours. they are willing to take them at the higher, minimum wages, so you have, really, a whole generation of kids who have not had the kind of employment opportunities that we certainly had in my generation, and that my older kids had as well. this is a big problem, something that will haunt us for years. >> you know, you hit on it, large policy issues. you know, one the givens, always the sound bite for elections,

minimum wage, minimum wage, but you had a sentence in one of your pieces i heard several times by friends involved in the restaurant business. that is, hey, you know, raise the minimum wage. instead of giving your order a person, you'll punch it into a key pad. can you comment on that for the last 20 seconds? >> it's not just the restaurant industry. you go to a strupt, you can order on a kiosk. go to the grocery store, scan them, go to the airport to check in, you don't need a person anymore. you get your boarding pass and luggage tags printed out. and gas stations don't need employees anymore. when i was a kid, there were employees everywhere, checking your oil, washing your car, and filling your tank. now you use a credit card and gas yourself. we are pricing them out of the market. if it's more expensive, businesses use less of it, if it's less expensive, they use more of it. this is happening to the young people's jobs.

>> well, andrew, listen, thank you so much. we're out of time. >> okay, great, thank you. >> those voting age, make sure you pass the sound bite and look the policy dynamics affecting your employment or lack thereof. carl, back to you. i'll take it from there, rick, timely ahead of jobs day tomorrow. coming up, turns out there's a hops shortage. what that means for your beer consumption over the holiday weekend. we are in the weeds next. when he agreed to cosign for his daughter's credit card... he thought it was the end of the conversation. she didn't tell him that her college expenses were going up. or that she maxed out her card during spring break. when the satellite provider checked his credit, he found out his daughter didn't pay her bills. but he's not worried. now he checks his credit report and score at experian.com, allowing him to keep track of his credit and take a break of his own. experian. live credit confident. tdd#: 1-800-345-2550 can take you in many directions. spark your curiosity tdd#: 1-800-345-2550 you read this. watch that.

tdd#: 1-800-345-2550 you look for what's next. tdd#: 1-800-345-2550 at schwab, we can help turn inspiration into action tdd#: 1-800-345-2550 boost your trading iq with the help of tdd#: 1-800-345-2550 our live online workshops tdd#: 1-800-345-2550 like identifying market trends. tdd#: 1-800-345-2550 now, earn 300 commission-free online trades. call 1-888-628-2419 or go to schwab.com/trading to learn how. tdd#: 1-800-345-2550 sharpen your instincts with market insight from schwab tdd#: 1-800-345-2550 experts like liz ann sonders and randy frederick. tdd#: 1-800-345-2550 get support and talk through your ideas with our tdd#: 1-800-345-2550 trading specialists. tdd#: 1-800-345-2550 all with no trade minimum. and only $8.95 a trade. tdd#: 1-800-345-2550 open an account and earn 300 commission-free online trades. call 1-888-628-2419 to learn more. tdd#: 1-800-345-2550 so you can take charge of your trading.

it can help your business save money. false. the truth is when you compare our fastest internet to the fastest dsl from the phone company, comcast business gives you more for your money. why pay more for less? call today for a low price on speeds up to 150mbps. and find out more about our two-year price guarantee.

comcast business. built for business. higher gas prices and beef prices. a new one to worry about this weekend. beer prices. live from a hops farm in woodburn, oregon. jane? >> reporter: sarah, it's just an issue of supply and demand. demand for this is high. supplies are these are low. that's why hops prices have pretty much doubled over the last decade as kraft brewing has grown and making hoppier ipas. most grown in the northwest. the crosby hop farm where i am now invest emillions in making machine making hops into pellets and a family in the business for

generations has contracted and locked in prices the next three years and some farmers are now cutting out the middleman. >> there's a lot of farmers that have started their own brokerage firms, and so they'll grow their own hops. put in a pelletizing plant and get a sales team out, and they'll start selling their own hops. direct to the brewers. >> this one's called topaz. >> reporter: now, jeff edgerton, beer34569er of bridgeport, oldest in oregon. famous for ipas. go to beer festivals, it really is all about ipa. some using ridiculous amounts of hops. he is concerned about future supplies. >> we're always concerned. absolutely. it's a tight market and a lot of people out there, forward contracting. probably five years ago, half the people out there just bought hops on spot. nowadays, i bet probably 80% of the breweries are buying on contract because they know what's going on. >> reporter: now, for now, he is

not passing along those higher costs to you, because right now, guys, the kraft brew industry is so competitive nobody wants to raise prices and price themselves out of the market with everyone else. that may happen, too. oh, man. that smells good. >> thank you. what a day for that story after the constellation earnings. amazing. when we come back, fake charges totaling hundreds of millions of dollars. the feds make a big accusation against t-mobile and janet yellen set to begin speaks in a few minutes with lagarde. we'll bring you all the headlines and her q&a, a little later on. about speeds and feeds. it's all about latency. it's all about how fast does it run. i often sit with enterprises who ask me about how mission critical and how's the performance of the cloud. and i tell them, if you can make gamers happy, you can make anybody happy. speed is made with the ibm cloud.

at every ford dealership, you'll find the works! it's a complete checkup of the services your vehicle needs. so prepare your car for any road trip by taking it to an expert ford technician. because no matter your destination good maintenance helps you save at the pump. get our multi-point inspection with a synthetic blend oil change, tire rotation,

brake inspection and more for $29.95 or less. get a complete vehicle checkup only at your ford dealer. for that moment, where right place meets right time. and when i find it- i go for it. (announcer) at scottrade, we share your passion for trading. that's why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so you're always connected, wherever you are. because at scottrade, our passion is to power yours. life with crohn's disease ois a daily game of "what if's". what if my abdominal pain and cramps end our night before it even starts? what if i eat the wrong thing? what if? what if i suddenly have to go? what if? but what if the most important question is the one you're not asking? what if the underlying cause of your symptoms is damaging inflammation? for help getting the answers you need, talk to your doctor and visit crohnsandcolitisadvocates.com

to connect with a patient advocate from abbvie for one-to-one support and education. just a day away from jobs thursday. not friday. of course, because of the fourth of july holiday, trading closed. markets closed. that means another opportunity for you to nail the number, and win this very cool prize. in honor of it being jobs thursday tshs is a throwback jobs thursday. if you win you'll receive a cnbc hard-hat from our construction days. tweet us your predictions for the pay roll numbers. use our handle @squawkstreet,

autographed by the entire "squawk street" gang. until 8:30 a.m. eastern time to submit. a cool prize a. leftover from when we moved into our new building. >> oh, you found that out? >> no. i remember it. remember, i've been here a very long time. it was all going to be better in the new building. our saying. it's been about 11 years. still waiting. absolutely much better. >> a hat we've all signed. 215,000, what economists are looking for. adp, solid. 281,000. expectation only 200,000. the stream, steady stream, of positive economic data continues. >> if we get a better than expected number, what will we think on the ten year? what's our conversation about tapering going to be? >> depends how much better. right? a conversation earlier in the hour, and that was as long as we get these numbers that are good, solid, not too good, for the federal reserve to start to disrupt the party, the market can go higher, and we've seen

that support from lower treasury yields. 260. >> we have. although we were at 250 not that long ago. >> creeping higher. >> creeped a little higher. people trying to figure out the negative 29 and gdp. bizarre number, and what it means particularly in the consumer, for the consumer. >> also spending numbers weren't so hot on the consumer. later i'll be on with mandy drury on "street signs." bill gross or guest. interesting ahead of the jobs report. we'll ask wham he think answer the ten-year treasury yield and outflows he's been experiencing. >> total return funds having outflows. >> the flows going in, right? >> yeah. other line doing better. the performance. look at the performance numbers, that takes you where you need to be to understand outflows and inflows for these particular products. the biggest funds out there. total return funds, certainly at pimco. >> and the dow, still on 17,000 watch. a little more than 30 points away from it right now.

key milestone. key psychological. last time we saw these major levels, 16,000, back towards last fall. seven months before. with that, we'll wrap it up. carl, over to you for "squawk alley." we do have breaking news. janet yellen getting ready to speak at the imf. hampton pearson in washington. hampton? >> yeah. nothing in fed chair janet yellen's prepared remarks ar future rate hikes, much of the focus in her speech to the imf focuses on the limits of monetary policy when it comes to overall financial stability. she points out low rates over a long period of time can create incentives to take on risk, and that overall monetary policy has powerful effects on that risk taking. what led up to the crisis, the fed chair makes an argument tighter monetary policy alone at that time would have been, in her words a blunt tool, and not have averted the financial crisis. looking at the here and now,