record. he basically opted out, exhausted by the draw down, but never had a losing year, not running public money at duquesne. >> he was soros, really, when soros was great. join us tomorrow, "squawk on the street" is next. ♪ i'm on top of the world eye i'm on top of the world♪ >> on top of the world, right. congratulations to germany on its world cup victory. angela merkel in rio. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. what a week, first full week of earning, 55 s&p companies on the deck, yellen on the hill. boatload of news. ten-year yields around 2.53. housing starts, industrial production, and more this week. and as for your mostly in the green and, yes, that includes dax, for anyone in germany at

work today after last night's win. the road map goes like this, earnings beat for citi top and bottom line. stock's up sharply as the bank announces its settlement with the government, $7 billion for, quote, egregious mismanagement. >> far from the only deal news, we'll have more on mylan, for example, in a moment. >> markets in the green on this monday. goldman raising forecast for the s&p, as we gear up for that busy week of economic data. >> apple, barclays back on board ahead of iphone launch. sees a weaker samsung and a stronger tim cook. first up, citi group, reporting second quarter operating profit, 1.24. revenues above consensus. citi taking the charge of $3.8 billion in q2 in connection with the company's $7 billion settlement with the doj

regarding mortgage securities sold ahead of the 2008 financial crisis. trading revenue down 15. not as bad, jim, david, as some expected. >> no. this was in contrast to wells fargo, expectations were so high going into the quarter, there really was a lot of great expectations here. i like citi holdings, which had been kind of like leftover positions, went to a profit this quarter, i thought that was extraordinary. the justice department settlement, included cdos, how important is that? certainly no overhang. all the big liabilities now behind them. the tangible book 56.89, scrubbed through. interest marjtgin better than expected. i liked the quarter. >> people readjusted based on expectation fixed income weak. >> right. >> revenue number, when you strip out dva, accounting, is down year-over-year. >> right. one of the things, look at all

of banks and say, what were people looking for? citi's supposed to be eh. and it's just turned out genuine excitement to the quarter. you know what? how about the cap, $3 been in capital with the settlement, they raises $10 billion, increase in cap, all i can tell you, citi shouldn't have been where it was going into the quarter and ma maybe wells shouldn't have been going into the quarter. >> trading down 15. fixed income down 12. equity down 26. so is that what you want to hear going into a week like this. >> interest margin up year-over-year, people want to hear that. something wells didn't deliver. citi's a consumer, worldwide consumer bank, 50% of consumer business overseas. only thing i didn't -- i wanted to hear mexico's behind them and i dbts gidn't get that. that's the only thing i didn't hear that i would have liked to. >> current investigations of

fraud in terms of some transactions that occurred there and the company that turned out to not be what they assumed it was. >> right. >> i mean, overall, they still get a discount to tangible book, right? >> substantial. >> the stock trading 47. now it will be up today, as you see, perhaps 48.70. >> the government doesn't let you take your cap, doesn't let you buy up to tangible book yield. old days, it's -- the government still got its head in these things, yeah, it's great to see the justice department get out of the picture. a lot of fascinating articles in the new york times and "wall street journal" how this deal done. >> tick tock's fascinating. >> congratulations to both brad carp and ted wells from paul weiss, involved in a bunch of other settlements. this one i thought particularly well handled. >> the complexity of citi's business, i argue, still something that investors are going to keep thinking about. investment bank not great but

you pointed out, worldwide consumer franchise, that seems to be the advantage they need to push if they can. >> right. what i wish they would do, really, i still like -- stop criticizing me -- it did a lot of the subsidiary floatings. >> yes, yes. >> i would love to have a piece of citi's consumer bank over seas separate from the rest of citi because that would be a kind of american express that is an emerging market play. they're not going to listen to me. i know michael corbat watches the show. but when you come back and watch the dvr show -- which i know you, he's a dvr guy -- do flotation to get the stock to 56. >> jpmorgan tuesday, bank of america wednesday, morgan stanley thursday, step in front of any of those? >> i like the fact that my indication, all indications of jpmorgan, that jamie dimon will be on the call. >> i didn't know that. >> stepping in front of these banks is so unpredictable.

here you are, you step in front of wells fargo, you would have backed up ahead of citi. i don't mind in punting here, literally what i'm going to do, i'm going to overtime, maybe 118 minutes, and then i will predict what will happen. not before then. might just be -- it might be a shoot-out. >> too hard to call. >> super jim, right? instead of super mario. >> so many deals to go through. we'll try 0 ur best our best, s it's willing to recommend abbvie's latest takeover bid to shareholders. now that's an improved bid. it's their fifth and it's worth $53 billion. 2440 in cash, that's pounds and .8960 shares of new abbvie for shire. that's a tax inversion. you still got due diligence.

shares of abbvie, down a bit. you have due diligence, you've got people squaring their positions, you've got -- there it is. the overall value is not going up that much because of the decline in abbvie shares. but again, it has been recommended, this is going to avoid potentially what would have been a hostile fight under uk takeover law and they're getting closer. so many other deals to cover this morning as well. >> right. >> i don't know where we want to start. i want to get toy mylan, another tax inversion, in this case, abbott, mylan issuing 5.3 billion in stock to abbott to buy the nonu.s. developed market specialty in brand of generics business. what is that? that's $1.9 billion of revenue, 75% of it's in europe against developed markets, the rest in japan and the like. talking about $60 million in ebida. end up in the netherlands but choose tax jurisdiction, look for that to be the uk or

ireland. all right. we've got the whiting deal where it's a takeunder right now. >> takeunder but it becomes the king of the bakken, people like that. >> paulson's the big holder in kodiak at 10%. it doesn't appear that he's voting in favor. there is some question here, jim, to whether they're able to get the shareholder vote at kodiak. some analysts weighing in and saying they are buying at least you know, this was a 5% premium to their 60-day volume weighted price average. a discount to where the stock just changed hands. will whiting have to increase the acquisition offer, at least a question mark in terms of looking where previous deals have been done. it does look favorable for them. >> this week last year, kodiak was between 8 and 9. why was it between 8 and 9? it put itself up for sale. there were no buyers. david, this one reminds me a little bit of hill shire

pinnacle. why? i was looking for whiting to be acquired. now, whiting management, i like very much. it's a terrific company. terrific. >> should we rule that out or is that a possibility? >> paulson the biggest holder in both. >> really? >> i think so. >> interesting. >> i think so. >> i thought that stat oil, which was like that play, it came on "mad money" they liked the deal, which is also bakken, stat oil, the gigantic norwegian company had seen a tremendous decline in the north sea production. i thought that it was a natural fit to buy whiting. i think whiting understands what a lot of people particularly howard hamm understood from continental before. bakken could pass texas. remember, they passed california. three years ago i remember going out to north dakota and they were saying, listen, we can be bigger than california, alaska. guys are like, are you kidding? they're bigger than california, bigger than alaska.

to be king of the bakken, to have more oil, more barrels per day than continental, i like the deal. if people are being greedy if they say no. >> one more to keep an eye on this morning. this was announced yesterday at aecom -- >> when it was announced -- >> during the game. >> during the game. >> nice. >> what kind -- what are they trying to hide? >> i don't know. >> urs, by the way, i mean, this is multibillion dollar, 33 in cash, .734. aecom shares talking about it worth 56 bucks, 56.31 for urs. urs, started back in february, reached an agreement, added four new directors in march, modified change in control for some management members in june. and they moved into auction mode not long ago it would appear. here we end up with a deal for

urs this morning. >> the analysts did not like urs going into the deal. we had a guy put out a note recently saying, listen, it's unlikely that a deal's going to happen. that guy's wrong. i'm being a nice guy not talking about the person's name, because i happen to be like jefferson and gaun dhani when i'm on the >> outright sale, unlikely scenario in our view. this is -- geez, sorry. it's -- it just happens to be a note from bank of america, merrill lynch, underperform. unfortunate. >> right. what i like about the deal, the antitrust people may not like about it, companies that do federal government government work. >> yeah. >> urs a tremendous underperformer over the years. jana understood than congratulations to -- >> more than 25% cash -- >> good deal for aecom. >> did 50 million of cost synergies nearly all of which

going to be achieved by fiscal year 2016. allergan, questioning valeant again, another day, another question for allergan, valeant's model on m&a. tobac tobacco, most likely tomorrow, not today. >> you know, russell stover. >> forgot about that. >> private deal. >> third biggest candy maker behind hershey and mars. >> i was shocked, i thought russell stover an old brand, make it more exciting. david pyatt, ceo of allergan, thinking that allergan could come down a lot if valeant were to walk away. i no longer feel that way. there's a lot of things that allergan can do. i also think, though, acquisition is one you don't want to rule out. >> you can't. he made it -- he wanted to put it front and center in investors minds that we could do this. >> yeah. >> vie no idea what it is, i haven't heard talks of anybody, but something to keep in mind. >> something he brought up, he said, yes, we want to do a major acquisition, shareholders want

us to do it. as long as it's a foreign company, right? >> wouldn't be bad if they could figure out a way to invert allergan. >> they're not buying kodiak. >> no, shire's out. >> no talks. when we come back, apple getting an upgrade from barclays, months after he moved off of the outperform for the first time in ten years. c. eo, vivek ranadive. talking about the note at goldman, upping the target for the s&p. premarket, good action. more "squawk on the street" from post nine at the nyc in a minute. ♪ ♪ ♪ [ male announcer ] if you can't stand the heat, get off the test track.

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offers end july 31st. ♪ m&a news helping to lift future following worst week for stocks in months. david costin lifting his target from 2050 to 1900 and 12-month to 2075. the u.s. equity market appear attractively valued in relation to bond yields, that's the key. talks about going into a tightening cycle, multiples contract, returns get more modest, year-end this year, would be 25050.

2100, 2200. a flattening out. >> what like about david, his timing. last week was a so-called bad week. it's not like he's riding the wave of bullishness and cheerleading the dip that we had if we continue to dip, you want to get in. david represents the level-headed guy who moves his price targets and i applaud his work. it's really clear-headed and not cheerleading. >> talks about valuations. in his words, only time the s&p has traded at a higher multiple than now during the tech bubble of '97 to 2000, when multiples were 25% lower than they are now. >> we need to see earnings expansion, right on the cusp of. i was thinking, the dow's not the important index to watch. but imagine if alcoa and citi hadn't been kicked out, you wouldn't be seeing the dow with two juggernauts flying higher and we'd be saying, alcoa's made

its turn and citi, maybe it's time. >> proved to be a decent strategy, right? buying the ones -- >> honeywell got the boot. what a great one that was. aig, delivered consistent results. >> with yellen hitting the hill, she's -- >> tuesday and wednesday. >> tuesday and wednesday. >> also profile in the new yorker with nick lemon. >> nick? >> all right. got to get that. >> expect more talk of inflation, more acknowledgement perhaps of that, and a little more hawkish tone and -- >> are people going to get scared? >> have insight, better than anyone else, anyone in the world, "wake up with al," al roker, what matters the breadbasket of america. anyone ever to the valley in california knows that really is where food comes from. and this drought is just killing this country. it's causing noisy inflation that janet yellen talk bpd gasoline's coming down.

>> first drop in ten weeks. >> yes. >> wheat, greens coming down. but the problem is, the breadbasket of the country is burning up, we're short water. we don't know how to move water around in the country. water credits being traded you've got to watch the weather in california because that -- if we get rain, it is going to be noisy inflation. but, boy, do we need. it's something, look, the global warming people are -- tom stire, who obviously the head of global warming coalition in our country. >> right, in other words, favor of acknowledging climate change and doing something about it. >> right. those involved with that would say, listen, this is not idle. we're having this burn up because of coal and natural, you know -- >> could use a polar vortex in other parts of the country. >> they need the storm we had last night at 11:15 that woke me up from my slumber. >> sorry. >> my vicodin slumber.

>> asking 3:00 a.m., is it time to go to work? >> i did. >> 11:15 key rem time. >> when we come back, cramer's "mad dash" countdown of the opening bell. one last look at premarket. more "squawk on the street" in two minutes. kid: hey dad, who was that man? dad: he's our broker. he helps looks after all our money. kid: do you pay him? dad: of course. kid: how much? dad: i don't know exactly.

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>> there's a note this morning out saying that the advertisers are loving facebook and u.s. minutes are increasing 42%. when i speak with ceos who are trying to reach younger people, they throw money at facebook and say the same thing, return on investment is fabulous. they love it, profitable company. now at the same time we had wonderlick saying look out, engagement monthly average user for twitter disappointment. twitter trades monthly average users. when i speak with ceos about advertising on twitter, took a lot of heat this weekend, they say, you don't have to pay twitter, you get a lot of free exposure. the return on investment is good. that is interesting because it means they're not investing twitter they're getting eyeballs some the two are very, very different. the people who use twitter love the fact it's their news source. a lot of heat, twitter showed

you world cup numbers, very good at promoting themselves. but are they very good at generating earnings per share? i want to know what anthony noto things, monthly average users feels very much like eyeballs in 2000 where you and i were saying, wait a second, we can't measure by eyeballs, measure by earnings per share. we were wrong for a while, and then very right. >> people believe perhaps, you said this, power of the platform will win out over time, they'll figure it out. >> they have to figure it out. >> for now we keep coming back to this metric of, is user growth growing in a significant way and that seemed to hurt the stock last week. >> yes, it did. >> what you're talking about. >> look, people, the ceos i speak to are "mad money people" and people who place ads, particularly restaurants, i do a lot of that, retailers. they say, how great twitter is, we don't have to give them money and we get a good return. that's not what you want to hear

if you're twitter. it's what you want to hear if you're an advertiser. facebook, they pay and just think, terrific, and they love the custom ads this is the dichotomy of facebook making money and twitter making eyeballs. i'm not an ophthalmologist, i'm an earnings per share aficionado. >> opening bell a few minutes away. stay with us. "squawk on the street" coming right back. ♪ ♪ ♪ [ male announcer ] if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. but hurry, offers end july 31st. share your summer moments in your mercedes-benz with us.

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12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. you're watching cnbc's "squawk on the street," live from the financial capital of the world. opening bell in just about a minute and i half. busy week. first full week of earnings, among the companies posting over the next several days, goldman sachs, intel, jpmorgan, ibm, google, general electric friday. >> brian, running intel, they announced the upside. in the old days when andy grove running intel -- i think brian is the logical heir apparent --

but their philosophy always been don't do these preannouncements unless you're going to even be better when you finally announce the quarter. intel has not come in one, really, 25 cents has not come in since preannounced. i look for intel to go higher. old tech doing so well. we had nice, nice target bumps for western digital and seagate. this group is where the action is. and i've got to tell you, people are still underinvested in what i regard as being old tech, deutsche bank price target seagate 64.74. western digital 100 to 118. if it's in pc, it's going higher. >> amid a lot of downgrades for momentum names, tripp, yelp, ebay. >> tripp's doing well. ebay, talk about that. that has to do with algorithm that's been changed and some worries about the hacking.

typically don't hear hacking hurting things other than target. now, ebay is being hurt by hacking. >> let's get the opening bell here. start things off, get a look at s&p at the top of the screen. at the big board, best buy's geek squad, celebrating 20 years of people with technology. >> wow. >> doesn't seem that long. >> tibco celebrating 15 years and we'll talk with the company's ceo in the next hour. speaking of upgrades and downgrades, barclay's call, upset to overweight, had an overweight for almost a decade, if not longer. came off of that in the springtime. today they say tim cook has investors' confidence back, price target 110. >> i didn't like this call, and the reason i didn't like the call is because he downgraded it on february 20th, as a matter of fact, 75, 80, there was no acknowledgement other than this back on board moving to overweight. thank you for nothing. now there's this kind of sense

that we keep hearing that samsung has lost its way. >> yes. >> and a lot of people like the samsung product. i don't know if samsung's lost its way. what i do recognize is that a lot of people want to be aboard apple these days. they kind of like it, to fight apple inexpensive growth stock, fighting a big buyback. fighting a lot of new interdrukzs and tim cook that wants the stock higher new york longer regards the stocks irrelevant. he went from beinging anot stick about a stock to being a zealot. >> the board revamp, which we talk about, whether or not that happens. the post saying their ad account could go into review or bring it in-house, after 30 years with the firm that brought the famous 1984 commercial. >> i just -- it's funny. the company's on a roll. now we saw there are some companies saying be very careful because this product may be late, that product may be late. guessing game about what they're

going to earn, people have been wrong quarter after quarter after quarter. that's the reason i didn't like this upgrade. it seems like, oh, boy, i downgraded it, maybe nobody remembers i downgraded, 75, 80, darn it, cramer mentioned it, "squawk box" looked it up. i think apple's a cheap stock. i think it falls -- even carl icahn thinks it's a cheap stock. >> he's done quite well. that has contributed nicely to what otherwise not a strong year for him this year as last year. >> right. >> private business, the railcars have to be just going gang busters, right? largest owner of railcars. >> railcars in short supply. i thought that trinity peaked, that was wrong. greenbriar reported a number. people don't want pipelines -- good series in "the new york times" -- people don't want pipelines. i had a pipeline under my property when i lived in pennsylvania, every year i got a

calendar from the people from the pipeline. >> nice of them. >> very nice calendar. ripped the month off, the next month appears, extraordinary. >> how that works. >> that cardboard thing with the stick out. if you're not the guy who gets the payment, you're the guy who buys the payment -- buys the property that has 50-foot wide thing you have mow, you don't feel so good about it. >> no problems from the pipeline, though, other than just -- >> no, but i felt like the calendar, how about something special? >> just a little something for the effort. >> maybe a notebook and calendar. puzzle. crossword puzzle. >> six of the top ten gainers are banks or financials in some sense. schwab, genworth, morgan stanley, citi's second biggest gainer. >> before you decide to write these guys off, because they are supposed to put up more money from fha, be careful. that's a proposed rule. i heard jim mcnerney speak, 4:30 a.m. interview with bloomberg, i

have never heard him more bullish. everyone tries to trap these guys is the cycle over? no what's the biggest problem? we can't make the planes fast enough. xm bank, cost the stock maybe eight points, terrible underperformer, what are you worried about? it's going to be approved. too many small businesses will be hurt. mcnerney, one of my favorite ceos, making a great case. alcoa, we had germany's own klaus kleinfeld. >> market americanny on later as well. >> ray corn, commercial chief. >> the air show, look, every time boeing has gone up at the opening, a seller has materialized, i want to make that point. my charitable trust owns it. if you want to buy the stock, wait until 10:30. that guy will come in, he obviously hates the stock. >> unveiling new variant of the 737, up to 200 seats trying to

make a pitch to those low cost airlines around the world that could put ten more seats in, model changes completely. >> that's who's got the money. european airlines don't have as much money. this is a world travel story. kleinfeld always emphasized that he's got the wing, the fan, the fan is now made with aluminum. used to be made nit nickel. airbus, i remember speaking to jim mcnerney and i said, between you and airbus, on "mad money," he goes not at all, we don't care for each other. okay. >> they make coke and pepsi look like friends. >> yeah. those guys are buds compared to bowing and airbus. and one of the things he's making the point, airbus has a real edge if you don't let xm -- larry kudlow, friend and former partner saying the a corporate giveaway if you're a shareholder for boeing, it's a necessity, some people say, 19% of the business financed.

>> shares of citi this morning. we've discussed it. the call has wrapped up. kayla tausche on that call. cfo provided little detail on the settlement with doj. they confirmed 3 billion tax deductible, 3 of the 7. geopolitical tensions eased in june that helped the markets. hits international equities due to ukraine and russia volatility. decreased exposure to russia and ukraine, have 30,000 people in compliance by the end of the year no update on mexico. >> 30,000 compliance. >> compliance increase paid for by cost cuts elsewhere. highlights from the call with reporters that the -- >> you'll see the paul weiss deal go down. it's funny, talking about apple bringing advertising in-house. i once made a joik ke how jpmor out to make a bid for paul weiss.

they are my attorneys. when you see the big settlements, you also are able to get smaller legal fees. when you see citi holdings, swing to a profit, that's also smaller legal fees. legal fees, i can't tell you how much the hidden pain they have caused banks. >> a lot of the law firms, the lehman bankruptcy alone, what did it deliver? a billion in legal fees, something like that at least. there were law firms staying alive on just that there right. >> thriving, not just staying alive. >> did you see the number of people taking the lsat down 6% over last year? >> that is something. >> down 6%. >> jobs tend not to be there. >> it's a very good sign. >> kill all of the lawyers. >> more people want to -- >> i don't want them to die. >> not a shakespearean fan? >> less litigation might be beneficial. >> look, when you talk to people, young people now, what -- they want to work at google and facebook. you never hear, i am hoping for a morgan stanley offer, no

offense to mr. gorman, who has gone a great job, the country's changed and the country recognizes you want to be the lawyer for google or work at google. i know a guy trying to get a job with the google driverless car. i mean, they're like if you go to google's campus that driverless car's doing everything. the hookup between driverless and uber is the hope for solution to traffic. >> did you watch silicon valley the show on hbo? one with the driverless car, hilarious. i encourage you to swing through. >> emmy nomination? >> fun show. >> we lad mike judge on the show. >> that may be true about google, people love that to be their first but they're not unhappy to take a job at investment bank that will pay them a good salary. >> people that don't have engineering background. you need computer science, engineering to get at companies. if you're just engineering, it's not even good enough. >> no. >> let's hope our country develops more engineers.

i understand companies wanting to have more immigrants because the pool of workers just isn't big enough to meet the demand of a google or facebook or you know, twitter or yahoo! yahoo! reports this week. >> dow briefly up triple digits now up 92. bob's on the floor. good morning. >> good morning. dow's up 90. we have had a global rally. the second half of the rally that began overnight. shanghai, nice move up there. shanghai market near one-month high. japan's rally, germany's having a great morning, off the highs there france also to the upside. part of it may be the proliferation of deals you were talking about here, lindt and russell stover, that's another deal, shire up inniping theed b mylan buying assets from abbott. the big deal everybody's talking about kodiak deal, whiting offering to buy kodiak for a substantial am of money here. the comments that i hear is this

is not about the bakken exploding it's about the bakken matu maturing, doing deals so that you can operate more efficiently and with lower costs. for example, now, whiting will be able to rent 30 rigs at a lower price than renting 20 rigs than they had before. more easy money made and now the game seems to be more efficiency directed and survival of the fittest. it's an indication of things maturing rather than things opening up at the very beginning. this is true if you're concerned about lower oil prices and that's primarily what the bakken is. so remember, nat gas declining for a while, those prices. bakken is an oil play. we've seen what brent crude haze been doing. here a three-month low. west texas declining. oil goes to 80, talking west texas, companies will be more hard pressed. they might be profitable but will anybody pay them huge valuations and will they get the

money people are expecting to pull out of them? here's one to watch here. oasis petroleum, another play, bakken play that's there. that's up. continental resources, one as well. they may be an acquirer, we don't know, haven't heard anything about them so far, but might be a buying of whiting or kodiak. unlikely they are going to be acquirer of anything any time soon. talk about citi. as you heard, earnings pretty good. impressed with wells fargo numbers, auto loans up 9% on wells fargo friday. citi's up here. all of the big banks on the upside this morning if you look at big names. we'll get jpmorgan tomorrow, goldman sachs tomorrow, but all of them trading on the upside. speaking of charles schwab, buy over at jeffries, waiting for numbers from them. mylan buying abbotts develop market branded generics, on the upside 3%. back to you. >> thanks, bob. that's where i want to take it.

is to mylan, so many deals this morning, but i have been fixated on the so-called tax inversions. i like to think i was the first person to use the word "inversion" a long time ago. but we all know what that word means, which is u.s. taxpayers, that is corporations that pay u.s. taxes, actually leaving this jurisdiction. doesn't mean they stop paying u.s. taxes on money earned here. but over time when you change your tax jurisdiction, it does tend to happen that as well earnings, earnings tend to go down, interestingly enough, all sorts of ways to do that. they flow often to where you are paying more of the taxes or, in fact, a lot lesser rate. mylan looking for an inversion for a long time. and it failed to find one until it inked a deal with abbott. i highlighted that relatively small deal buying did merging

with units, asset dropped down, italian pharma company so it could reincorporate in ireland. it's the same kind of thing that's happening here except in this case, abbott's u.s. company. abbotts in devices. abbvie is all of the drugs. but they did keep a portfolio of drugs they sell in europe and japan, developed markets. none of them on patent anymore. all off patent. but 1.9 billion in revenues. mylan talking about as much as 600 until ebitda once they take over the portfolio. exchanging 5.3 billion of stock, 100% stock, for that ebitda of the drugs, they believe -- the revenues declining but they believe they can plat continue out. you lower your leverage ratio because you're taking 600 million in ebitda, not adding debt, only exchanging stock. 21% of the company will be owned

by abbott on close, that's what you need to have it invert. they end up in netherlands and choose their tax jurisdiction, probably the uk or ireland. and then plan for years to come about what you want to do. by the way, lower leverage ratio, mylan talking about more acquisitions in the future. they get that key inversion that so many others in their industry have availed themselves of. remember, if you're a mylan especially, you're not about developing new drugs. you're about selling drugs that have been on the market for a long time, as again nairgenerict a company's that stock will move on new products what happen will make it move? more cash flow. what can 500 basis points in a reduced tax rate mean for more cash overtime? a lot. a lot. that's one of the keys here. initially that rate's not going to impact much but over time in terms of tax planning, that the savings will come through in

terms of accessing cash that is generated over seas, bringing it back to the u.s. without having to pay u.s. taxes on it is key and being able to do more deals. again, get inversion here and they get it 1.9 billion of revenue, 600 million in ebitda, they pay $5. 3 million. mylan shares up as you saw on that deal. another inversion. >> and i like, for miles white, the excellent ceo of abbott, who created all of that value by putting abbvie and abbott, i think it's a good deal. look, they're getting rid of 23% of the sales, 24% of abbott's profits. but this was a business that's out of -- it's not what miles white likes. that stock should be going higher. they point out quickly, at least in the deal notes, a good piece by jpmorgan, they do not want to be a long-term holder. >> all you need to qualify for inversion is they own 21% of it at close and then abbott is going to dispose of that stock.

>> it's phonier this tax law. i'm not saying miles white's -- abbott's great american company, i'm saying that this kind of thing is a loophole. i'll ask jack lew about it at delivering alpha, you hear the republicans, you knee comprehensive. this is the biggest joke on washington going. how much royalty do i owe you? i and about to use the term "inversion" i didn't know you pat ended it. >> i'm going to wait to invert. >> yes, why would you want to pay taxes. >> on the royalties. >> you'll do netherlands and then dublin? >> looking at my jurisdiction. the bond pits now. rick santelli at cme group in chicago. take it away. >> good morning. you guys hit on it, you don't need economic data, which there is none today. the inversion tax issue is its own economic fundamental for any of those who have questions to why we're operating at such a

neutral type speed, and jack lew, let's face it he's not going to give you unvarnished view how to fix it or why it isn't fixed but needs to be. train day of tens, up on basis point. two-day, challenging on friday's train day's highs but hasn't punched through. maybe the most important chart open it up, these are basically the highest -- excuse me, what a fraudian slip, the lowest yield closes in six weeks. look at the yield curve. we know that it's been mostly about flattening. i continue to look at one of the wider spread trades, 5s to 30s. 5 to 30 now under, under, what, 1.70, around 1.6, close to the lowest and tightest it's been since september '09. look at may 1st charts, may 1st on the ten-year, yes it came within several basis points of 4%, it's moving lower. i don't know if there's lehman momented in europe but certainly

saddlebaged with a lot of the structural issues keeping economy at a very low, slow speed. let's look at etfs. the hyg, undera bit of pressure, makes me happy. high yield or junk rates the ctf represents should be moving higher but the more investment grade reflected by the lqd seems to be looking for a bottom like the ten-year complex. and the last chart is june 1st chart of the euro versus the dollar, hovering solidly but tightly above 136, the notion looking for bad news to sell a continence currency, euro's the best argument not to. carl, back to you. >> when we come back, boeing ceo making news across the atlantic at the air show. a live report. later on squawk alley, 11:00 a.m. interview with reid hoffman, cal ripken jr., good show. dow up 137, new all-time

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boeing and airbus upping the rivalry in england. phil lebeau joins us with latest. phil? >> reporter: carl, if anybody thinking thicks are slowing down in the airplane tri, they would be mistaken on the news coming out of here today. airbus, announcing this morning anew wide body plane, a-330 neo, a plane 14% more fuel efficient according to airbus per seat than the current a-330, competing with 787 dream liner.

people have said the market has had big business over the last several years -- excuse the plane plying over -- people have said is there enough demand? talked with boeing ceo jim mcnerney, sees no slowdown in the demand for not only wide bodies but all planes. >> we anticipated that the middle of the big airplane market was where the action was, not at super big airplane or the smaller wide bodies but right in the middle. that's what's happened. we've got 1100 orders for dreamliners spread across dash 8s, 9s, 10s. we've got the market covered and the market is there we think it's great. >> reporter: meanwhile, lockheed martin's f-35 getting a lot of attention, not because it's flying but it's not flying. it was scheduled to fly today. of course it has been grounded since the engine fire in florida in late june, as a result lockheed martin's f-35 has not made its public debut here.

the ceo told us today, she is optimistic that by the end of the air show, over the next week and a half, we will eventually see the f-35. >> we're certainly looking forward to the opportunity to see that f-35 here. it's a unique capability for u.s. government and allies around the world. we're in a development program, we're in the midst of dealing with a particular issue but like any aircraft development program, we work through the issue get to the root cause and looking to see it here this week. >> reporter: shares of lockheed martin. back to you. frankly, it's hard to hear out here as military jets flying overhead. >> occupational hazard, phil. great stuff all day today and more to come, phil lebeau. stop trading with jim. not only a fresh record high for the dow, best day since may 21st. ♪ ♪

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the car and lear has been a very good stock but so at trw, this could be next. i thought make magna. this is an inexpensive stock, i've been trying to figure out how to do it for a segment for "mad money" i didn't want to let the opportunity pass up. lear is next. >> what's on "mad" tonight? >> we're going through some of the whiting/kodiak deal, that is very, very important. also going to talk about a name that is breaking up, i think broken up because of hedge fund pressure. they succeeded with another one recently that we talked about and had the ceo on, and i've got to tell you, it was real. >> keep an eye on record setting market. don't go away. [ male announcer ] we know they're out there.

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welcome back to "squawk on the street." road map begins with citi, the bank beating on the top and bottom line, announcing $7 billion settlement. the markets in rally mode. dow hitting new intraday high,

this as david kostin raises target for s&p 500. the ceo of air lease joins us live from the air show as the company signs a very big order. let's start with the marketsen as i mentioned rally mode. the dow up 125 points in the early session here as s&p 500 up half a percent and nasdaq up more than half a percent. flurry of m&a activity, perhaps igniting animal spirits since last we the worst week for stocks since april. >> the top dow component components, jpmorgan, goldman sachs, visa, ibm, boeing making a splash today. after citi numbers and m&a, how many pots can david have boiling at one time? >> did you work this weekend? >> i did a bit yesterday, yes. we haven't gotten one of the bigger deals, tobacco, lorillard purchased by reynolds, on track from what i hear but not today.

as you might imagine, given not just reynolds and lawyer ore ri lards and imperial tobacco, a lot of things to work through. expectations it's on track for announcement in near term. >> the return of the megadeals and tax inversions. >> tax inversions. >> start with citi. financials in the lead. eric holder set to begin his news conference announcing $7 billion settlement with citigroup to resolve the government's mortgage probe. kayla tausche here with more on all of that. the bank is trading higher right now. >> it is because of markets trading being better than expected. but it that is settlement marring a positive picture for citi group of the payout, $4 billion straight to the doj. consumers by the department of

housing a housing a housing and urban development, 2.5. citi's not pay taxes on $3 billion of that. so that's going to be a point of contention, you have to imagine with critics of the banking industry. now as i said, that marred a positive quarter for the bank. they did post the settlement 1.24 on bottom line, wall street expecting 1.05. profits down 96% given the giant legal charge wall street not expecting this quarter. citigroup offered 363 million. doj volley of 12 billion. but when you think about marks, that actually is where the revenue picture did improve. cfo in june said he was expecting markets' revenues down 25% because of the volatility around russia and ukraine through the second quarter. because that eased, he said on a

media call moments ago, that improved. revenues in trading down 15%. europe hit the weakest. that's what's lifting financials today. a lot of people expecting the second quarter to have been so bad for markets, it was going to hurt the banks across the board. but down 15%, that apparently better than expected. >> good news. the international exposure's a big one when it comes to citi. thanks for running us through the details. let's get more insight on citi and the markets this morning. key owneriearnings reports out, jpmorgan, goldman sachs. david katz with mate tricks assea advises are. is this an inflection point. >> a surprisingly good quarter. cautious on citi but today's earnings a nice step up, $7 billion settlement putting another overhang behind them.

we prefer the jpmorgan more than the citi, we would expect citi to trend higher. actually nicely higher over the next 12 to 18 months. >> what is it about jpmorgan that you like better than citi right now? >> we, as a firm, have a lot of financials and in order to have a lot of financials weave tried to focus on the lowest risk financials companies that have their act together strong, cap cal ratios. sticking to the jpmorgan and wells fargo, stronger, better managed banks. you look since 2007, those -- we're trying to focus on companies whose book values have grown significantly. wells fargo book value up. citi group's book value down more than 50% over the time frame. citi seems to have its act together but not well run as some of the others. >> that's enthusiasm going to extend to the regionals or not. >> we do like the regionals. we think of bbt, which is our favorite in terms of the regionals, going to have an okay

quarter but poised to do better over the next 12 months. the second quarter earnings in aggregate okay to modestly better. don't expect it to move the needle and don't expect it to move the stocks in aggregate but as people look toward the fed raising interest rates and the economy picking up steam and loan growth picking up the financials which have done nothing over the first six months of the year poised to be a leader in the next 6 to 12 months. >> what we saw of wells fargo friday optimistic when it comes to the broader economy, take out mortgage and housing activity, loans up for autos, for other parts of the economy. i would think that that would benefit the regionals versus bigger guys which are way down by legal cost and trading. >> well, the bigger banks right now have such a negative expectations that when they put these legal costs in the trading starts to get better we think they have upside. but we like regionals, toop wells fargo, one of the largest holdings, we think poised to do nicely over the next year. as people increase riskiness in

the banking trade, wells fargo could lag the group a bit, because it's done so well over the last 12 months. >> i wonder, now that we have figure out, 7 billion for citi on top of 13 billion for jpmorgan, related to mortgage and the financial crisis what does that mean for bank of america, trying to hammer out its deal? >> all of the things help size the ultimate settlements. we think bank of america going to pay a lot of money but manageable. again, you're putting woes of 2008, 2009 behind them and that's a net positive for the banking group longer term. >> citi, i would think, has outstanding legal issues, still has that probe related to fraud in mexico and it also still has concerns about emerging markets. i mentioned russia and ukraine on the call today. you're not ready to jump in here? >> we're not. but we expect it to be higher. the reason we're not ready to jump in, focus on lower risk financials we can own a number of them rather than just put a bet into one or two.

>> got it. jpmorgan, wells fargo. thanks for the perspective here. meantime, all of the biggest names in aerospace and defense at the air show this morning. both airbus and boeing courting our next guest for a big order. the winner, airbus. air lease the launch customer for the a330neo, 25 firm orders. phil lebeau with another first on cnbc interview with one of the deans of the industry. phil. >> reporter: a man who the airbus ceo himself, carl, said, if steve says it's good enough for selling a thousand, i'm going to do it. you're joining us, ceo of air lease corps. give us perspective as the launch customer for the new a330neo. why do you want to be in that space so bad? the largest component of the wide body market is 250 to 350 seaters that can go anywhere from 2,000 to 5,000 miles. that's about 80% of the wide

body market. >> you brought up a great point, people are losing sight of the fact the aircraft age around the world is still very high. >> yes. >> planes that you're ordering now, how old are planes that they're going to replacing. >> anywhere from 18 to 25 years old. >> with almost 100,000. >> yes, 100,000 flight hours. >> when you look at that, in your opinion it's a no-brainer in terms of fuel efficiency? >> absolutely. fuel efficiency, lower maintenance costs, rely ability, a host of economic issues come in to play. >> we've talked with a number of market experts and investors, and i hear this all the time cov offing this industry, close to a top. guys can't go stronger much longer. you've got to scoff at that. >> the global airline traffic grows about twice the times of gdp growth. so this year there will be 3.5 billion passengers flying airlines services throughout the world. and so, 5% or 6% modest growth,

the sfri needs over 1,000 new planes just to replace and keep up with traffic demand. >> hear people say you're close to a top, investors say that, what do you say? >> aviation is a dynamic business. it's always grow, it's a matter of how fast and how slow. >> big day, carl. they are the launch customers for the new a330neo. morbid in the wide body segment. >> looking forward to more coverage and interviews. janet yellen speaking to the "new yorker" magazine, saying easy money will be needed even after the u.s. economic recov i. cnbc's senior economic reporter steve liesman has more on this. why did she talk to "new yorker." good we question. the market goes beyond, what did she say, but why talking at all, who is she talking to? first, yellen didn't make a lot of news in the article.

except to reiterate fed policy in her own words fed will stay lower for longer. even when the headwinds have diminished to the point where the economy's back on track, where it's where we want to be, acquire unusually accommodative monetarypolicy. in touch with main street. policies towards unemployment than inflation. is it about appeasing the left while the fed moves to right? what i mean, with the article makes clear what everybody already knows, however, liberal or activist janet yellen may be she's the fed chair who has to normalize policy becoming the first fed chair to raise interest rates since 2006. that's eight years. it's at least 61 regularly scheduled meetings, any fed chair hiked rates. when the fed does move, the biggest hue and cry comes from the left and maybe talking to "new yorker" could be a sign the biggest voler in ability on its

left, it would like to move to right in coming years. more from janet yellen tomorrow, she's scheduled to testify before senate bank committee 10:00 a.m. one question, not a great time to be talking about activist fed policy when the house meeting and talking about prescribing fed monetary policy making through rules. but, ultimately what i see this is talking to the left while effectively headed to the right, though in no particular hurry. >> interesting triangulation. see how that works long term, steve. steve liesman back at hq, thanks a lot. the owner of the sacramento kings and ceo of tibco software joins us live. my mother made the best toffee in the world. it's delicious. so now we've turned her toffee into a business. my goal was to take an idea and make it happen. i'm janet long and i formed my toffee company through legalzoom. i never really thought i would

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the street." stratus' share, stock moving higher on news home depot will sell 3b printers in 12 stores to start at least beginning toepd first time home depot offered these printers in its stores. you can see shares off the session highs but up a percent and a half on today's trade. back over to you guys. >> thanks so much. big milesteone for one tech company, tibco. fresh ringing the opening bell, vivek ranadive, found somewhere ceo of tibco and owner of the sacramento kings.

welcome back. good to see you again. >> good to see you. 15 years, quite an accomplishment. of course brings to mind some of the challenges you have short term, guidance recently has been relatively weak, investors getting agitated. walk us through where you think you are, what challenges you have against you. >> carl, we've had challenges before, 15 year agz we had finished $50 million year. we've grown 20-fold, over 1 billion company. we think our best day as ahead of us. world is transitioning from slow data to fast data, tibco is the platform. >> it's an internal issue, some people complain you're distracted by the team or do you need the market to change somehow? >> no, we've made adjustments in the past. much of our business is directed the low end and we need to build a low touch model. we have absolutely the best products. and so we have to find ways to get them to our customer base.

>> to carl's point, we see you all over the place when it comes to the nba and the sacramento kings how many can you reassure investors your focus is on turning around the company, tibco, and not just on the nba? >> the nba's a big opportunity for me. so we just closed a $4 million deal with a basketball team. and my experience with basketball is really a software experience. basketball team is a social network on the one hand, and it's got perishable inventory on the other. that's exactly how every company thinks of itself now. whether selling basketball tickets, airline tickets, banking products, consumer electronics, every business thinks of itself as a social network perishable inventory and tibco has the fast data platform to connect those tibco is the last defense to prevent that

from happening. >> transition from subscription revenue, does the street have a good handle yet? >> it's starting to. we'll do about 20% of our software product, revenue next year from subscription. and what i love to do is i'm a software salesman, that's my passion. >> where that is number headed? what's the target? in terms of the target on subscription-based revenue. >> this year, about 9% of our revenue will be subscription based. and about 20% of it will be subscription next year. more importantly, if you look at our time based revenue, which is a combination of maintenance and services 75% to 80% of total revenue will be time based. >> owner of the kings, what did you make of friday's announcement? were you surprised? how does it change the dynamic east-west. talk about everything that occurred to you. >> dpirs of all, the clear statement life is bigger than

basketball and lebron made that statement. it also tells you about the importance of sport and basketball in the world today. basketball, the arena, which is the 21st century communal fireplace, has the ability to transform an entire city and we're doing that in sacramento. you'll see that in cleveland. i'm impressed with the way lebron handled. his essay was fantastic. >> on the contract, something wrong with a salary cap, caps $21 million for a superstar that adds so much to a team and a city and franchise? >> i don't think so. as you know, it's two-year contract. and the tv contracts are going to be renegotiated. so lebron's a smart man. i'm sure that he'll do even better in the future. >> yeah. >> 3-1 favorite to win it all. do you think that's likely or is he sort of a home room teacher of sorts with the young talent

and coach? >> it's going to be a process but he's the greatest player of his generation. and so he can have that kind of impact on the team. but the western teams are not sitting still. we're work hard to get there as well. >> please come back. congratulations on 15 years. >> thank you, sir. >> vivek ranadive joining us from tibco. >> how about the "new york times" cover on saturday? with lebron and the transakz. >> on "the plain dealer" front page. tequila made famous by "entoura "entourage" has a new owner. talking about the deal and what is next for the brand. and the spirits industry. ♪

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>> not a bad way to start the week for the bulls. a big week for us at cnbc. along nit institutional

investor, the delivering alpha takes place wednesday, biggest names in business and politics on hand. kate kelly with a preview. >> the day starts with treasury secretary jack lew, followed by the world's biggest investors including ken griffin, nelson pelts. john paulson, manager of the $2 billion firm paulson and company the grandfather of the famous subprime short. paulson made news last year revealing he had done a 180 and snapping up u.s. residential properties in large numbers. he also recommended a primary residence as single best investment in individual could make. afew -- >> housing starts up 50% from the trowel and that created a lot of excitement. however, the peak was 1.8 million, and we estimate you need about 1.2 million new single-family homes a year to meet population growth and replacement demand in the u.s.

while up 50% for the lows, we're still only half of what we believe is the long-term trend. >> a few things have changed since then and at least one notable housing buyer, blackstone group, thinks the big opportunity to invest is passing right now they've slowed their pace of investment. mortgage rates are lower than last july when paulson spoke and housing starts are still a ways off from where paulson thinks they can meet demand. we'll see if he still feels as strongly as he did a year ago. m&a, paulson established himself 20 years ago this month as arbitra arbitrageur and the fund is one of the best performers so far. we'll get his take on the landscape wednesday and perhaps advice on how to make money there. >> we'll see what the market is in the near term. kate kelly back at hq. goldman sachs says s&p lit will hit 2050 by the end of the

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that's why i always choose the fastest intern.r slow. 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. markets starting the week on a high note. dow at fresh intraday high. almost every component in the green. one of best day for the market since may. goldman's chief equity strategist david kostin lift his

year-end target to 2015. 12-month target 20.75. the market attractively valued. sam stovall with s&p capital iq and paul hickey. good morning. >> good morning. >> sam, you've done your bit in terms of raising your target. how do you feel now that others are following suit? >> it's a sigh of relief on both count youpz hate to be the only one out but you like to see the market doing what you're expecting it to be doing. now the question for how long. >> part of kostin's rational, it's that bond yield, year-end target only 3%. actual multiple of the market, paul, he says, is rich when you consider history. how do we square that circle? >> look at multiples, we've season expansion last year into this year. that's the only part of the bull

market where we've seen the multiple expansion. you look back at prior bull markets, you know valuations are above average, valuations typically expand in bull markets and based on those prior experiences there is still believe it or not more room for multiple expansion before we would be overly concerned. >> how close to the beginning of the tightening cycle are you comfortable being invested? >> i think investors should be comfortable being long this market for the remainder of the year, at least. we're looking to like second, third quarter of next year for potential hikes in rates. but let's see how the economy and things play out between now and then. the fed's forecasts have been notoriously optimistic for the past several years and reined back in expectations. let's see what happens going forward. whenever it's time to doubt the bull market, they've been proved

wrong the last five years. we don't see any reason to doubt it going forward this year. >> sam, higher interest rates is potentially a scary pros special, if you look at what has been one of the defining features of the last five-plus years of the burl markpull mark. should investors be worried about higher interest rates. >> it's a good question higher interest rates are likely to come. a year from now, we'll probably see the yield on the ten-year note averaging 3.2% in the second quarter of 2015. yet, if you look to history, what we find is that the yield on the ten-year note has to approach the 6% level usually what i call the line in the sand before the average monthly price change for the s&p is negative heading up to that level, it is positive but on a decelerating rate of pace. investors basically say, where else am i going to go? also, if rates are raising it's because the economy is

improving. so will earnings. >> the problem there, paul, is i mean 6% could happen quicker than you think if in fact janet and company are behind the curve? >> yeah, one of the things we looked at beginning this year is one of the worries that you have, worried about things even if you're optimistic. but would the fed find themselves behind the curve? at this point, after the data we've seen this year in the u.s., we don't think they're going to fine themselves behind the curve this year, at least, especially after the data we've seen out of europe last year, the economic data -- i mean last week was horrible. i think that's maybe one thing to worry about with the industrials reporting this earnings season, to see how is the slowdown in the european economic data going to impact their results and, more importantly, outlooks into the third quarter. >> sam, since we're on the brink of getting a boatload of corporate earningses, something like 10%, 12% in the next week,

s&p 500, wall street estimates, 5%, 6% growth, they're sounding optimistic. is that a worry. >> we're starting the quarter at a higher bar level than last quarter, yet s&p capital i. qui consensus estimates around 6.5% and usually the actual number comes in anywhere from two to four percentage points better than estimates. we could end up with a number that approaches 10%. >> wow. >> right now the market's feeling euphoric. >> good to see both of you. interesting read from goldman today. gold having not a good day. down almost 30. jackie deangelis. >> a big move for gold today, gold prices hovering around 1307 level, close to 1300 again. traders saying that there are a couple of issues here. first, strong stocks getting people to sell gold and rotating back into the stock market. also the fears about overseas subsiding a bit.

portugal seems to be okay, middle east cease-fire with israel and hamas also on the table here. this move in gold lowers causing miners to fall, you can see, barric, newmont, lower. if we cross through 1300, a big technical level for gold there it had been on a strong run. sotheby's and ebay formed a new partnership to stream sotheby's sales worldwide. robert frank with more on that. is this a game changer for the industry? >> it really could be. i'm calling it sotheby's 2.0. it's the second time that sotheby's teamed up with ebay to have a big push. e bay and live stream the sales for lower value i'ms like wine, jewelry, photographs. sotheby's getting better online auction technology and a chance to broaden its base to ebay's 36 million buyers.

what ebay gets out of this the cachet of the sotheby's name as it tries to sell more high-end goods. these two companies did have a partnership in 2000 that collapsed after three year because of a lack of sales. but they say this time is different now. online auctions are one of the fastest growing segments of the art world and sotheby's online sales grew 36% last year and it sold a piece for 3. 5 million this spring. christie's the undisputed leader in the space, having sold $9.6 million edward hopper painting in december. don't expect multimillion dollar picassos to be showing up on ebay. sotheby's will not stream the big contemporary sales, where you break the records and half of sotheby's lot sold last year went for less than $100,000 but the most profitable. this is in keeping with the strategy laid out by dan lobe who is on sotheby's board. david faber reported last year he wants the company to push online to catch up with

christie's and of course to broaden its customer base to tap the emerging, younger collectors. >> i have a question. robert, when you show up at sotheby's or christie's or phillips they charge you an off the top fee 20%, 25% just for being in the room on top of whatever you pay. do we know any fees charged here? >> what sounds like ebay will take a percentage cut of any sales, but i think that's. i'm not sure how the buyer and seller premiums will work. those are negotiated by the auction houses on one to one base cnbc. as far as this deal, ebay will get a percentage and that's how they'll make money from this. >> certainly interesting. we'll see what else happens in the industry. ratings for the world cup just in. julia boorstin has more on the numbers. >> yesterday's germany versus argentina fifa world cup final the third highest metered market

rating on espn networks. 9.7 overnight rating up 13% from the overnight numbers from the 2010 final and all 64 matches up 29% from the matches in 2010. national ratings and viewership numbers in more detail this afternoon. >> judging by the fact i watched, you knew it would be good ratings. a big gulp of tequila, taking control of the brand for $100 million. the founder and chairman joins us live at post nine to discuss after the break. with all the opinions about stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason

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avion went public today. >> it did? >> if not for my selfish desire to prove i don't need you, if we didn't sell the stock i would have made almost $4 million. what's worse, you would have made almost 15. >> jesus. unbelievable. >> sorry, vin. i'm so stupid. >> you're not stupid. you're smart for getting me into the tequila thing. i'm smart for not [ bleep ] listening to you. >> what. >> i never sold. >> made famous by hbo's hit series "entourage" and backed by aol's tim armstrong and coach chairman luke frankfurt, the spirits brand tequila avion has a new owner. shelling out a reported $100 million for 84% stake in the company as part of its plans to expand its u.s. presence. joining us for a first on cnbc interview, tequila avion founder and chairman, ken austin. good to see you. >> great to be here. >> how did the deal come

together. >> in 2011, we were doing really well and as you -- as a entrepreneur when you do well it gets hardrd, it doesn't get easier. we joined up with perndo and saw them as a minority stake in 2011 and created the relationship. the brand has taken off since then and we got together and decided it was time for have more skin in the game, and they deserve it. >> now that you have the size and scale of i pernod. >> we're in the second inning, the tequila category is explode, avion as a brand showing incredible growth weep have to continue to increase our distribution and build the brand awareness more and more every day. and we'll go global. >> if you're in the second inning, why sell? >> well, pernod had rights to acquire more. we did it sooner than we thought. but it was really the situation where it felt right, the deal

was right for our stakeholders. i'm still in the deal. and you know, it just -- the stars were lining up properly and we think the world of the company and they wanted to do this and we thought it made sense. >> talk about how the whole thing began. it's a great story with buffett. an enormous hole, it's amazing no one had done this, no strong number two anywhere in the world. >> totally the drinks business to break through, it's hand-to-hand combat every single bar, you're dealing with that in many cases an individual entrepreneur, just like we are, liquor stores the same thing. it's really tough. breaking through the odds are almost zero in the drinks business. lots of entrepreneurs try and fail, like many businesses but spirits are tougher. for me i thought we could break through. we had a lot of good friends out there, you named some investors, based on us being the marquis jet guys as well we took care of a lot of people and felt our network of people if we made the right product, the right liquid in the bottle, they would come,

and they have in droves. so it's a tough one but we did crack the code. >> what's driving the demand for premium tequila. >> you see premiumization, we look at whiskeys, bourbons, vodkas, consumers are gravitating towards higher-end products. a crafted small batch that's the future and young people don't have to deal with the havevagrai did growing up drinking tequila. was much different then. >> are they drinking it straight? >> drink a margarita, to have a avion margarita it's a dollar more versus using a low-end poor quauk quality tequila. $150, the pappy van winkle of tequila, people coming out in droves looking for sipping tequila because it's that good and aagave product delicious.

>> i've talked to guys who have the small craft business. the hoard all of the lumber, does the small-time guy have a chance against the pernods of the world? >> of course they done the entrepreneurial opportunities are always there and always will be there. you have to burst your hump. there's wood out there. you have to work harder. nen who uses that as an excuse is not a entrepreneur. >> i assume it helped elevate the brand. >> out of the gate "entourage" was amazing. there was negative, too. people thought it was a fake tequila. i thought it was like bubba gump shrimp. people thought it was fake. they thought couldn't be good, it was made for tv when it wasn't. i was working on the profile for years. with that said i wouldn't change a thing. i became a great friend of his and he decided to put it in and

got nothing for. amazing story. friends doing things for friends. that's still alive. friends take care of each other. >> do you, ellen, armstrong, kenny, have a party? can we go. >> the answer is you will be invited to the party we'll be having a party. >> lots of shots? >> lots of shots. we're looking forward to that and looking forward to continue to build the brand. it's monday morning. the deal announced friday. i'm back to work. my wife said get out of the house. we'll continue to grow this. >> there's growth in margaritas with corona bottles. >> we see a lot of. as long as it's avion, i'm good with us. >> ken austin, the founder of avion tequila. when we come back, linkedin founder and chairman, reid hoffman will join us top of the hour for extended interview, a lot to talk to him about tech, social networking and latest investments.

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welcome back to "squawk on the street." check out shares of gt. this stock is moving lower after analysts reported its check of the company's sapphire supply chain to apple indicates poor yields, which is limiting supply and posing a risk to gt's 2014 guidance. you see the stock off its lows but still down almost 4% on the day's trade. back over to you guys. >> thanks, tom. now let's get over to chicago, the cme group, rick santelli. good morning, rick. >> morning, sara. thank you. i'd like to welcome our guests this monday. richard farr, thanks for taking the time, sir. >> thanks for having me on, rick. >> richard, a turning point in the market every month is nonfarm payrolls number. you have a chart that hopefully we're showing right now that shows part-time versus full-time. why don't you elaborate recent years? >> sure.

well, this is a blip for sure of the roughly 300,000 jobs that were created last month according to the household survey. when you look at the establishment survey, of those 300,000 jobs, 800,000 were part-time which means there was actually a loss of roughly 500,000 jobs, full-time jobs. so far it looks like a blip. so, you know, i wouldn't raise too much of a red flag. when you look at other things that are happening out there in terms of you're not seeing really any material increases in average hourly earnings or hours worked. it starts to tell you that there may be a trend in the economy of a shift from full-time employment to part-time, and there's obviously some reasons for that with the obamacare. >> well, you aren't the only one that seems to have gravitated toward scrutinizing this issue because this morning in "the wall street journal," there was an op-ed by mort zuckerman titled "the full-time scandal of part-time america." and i want to pull a quote out of there that isn't necessarily about the fact that we had 800,000 part-timers and 523,000

loss on full-time, but it's along the same topic so let's put it up on the screen. since mid-2007, the u.s. population has grown by 17.2 million according to the census bureau, but we have 374,000 fewer jobs since november. '07 peak and are 10 million jobs shy of where we should be. do you agree with his assessment there, richard? >> well, yes because one of the things you've got to factor in, you know, a lot of people are saying hey, jobs are back to where they were, you know, post-crisis. but you have to remember the population has grown substantially over that amount of time. so you have the same amount of jobs while you have a larger population is not necessarily a good conclusion to what's going on. we need far more jobs. and one of the things that we track is population growth relative to job growth. and it's only been the last few months that job growth has been starting to beat population growth. when we see data like we saw last month where it's all coming from part-time work, that's obviously a very big concern. >> all right. now, let's move to a more macro

view. many including myself many years ago thought it was jobs, jobs, jobs that would make the ultimate difference in reaching escape velocity for the economy. is the market so smart that it's discriminating and dissecting the issues of full-time, part-time quality of jobs, or is there something else going on, keeping the economy in first gear when at this point we should be in much higher gears? >> well, rick, we think there is something else going on. if you look at demographics in this country, 37% of the country doesn't work anymore. so that's a large percentage. it's a multigenerational low in participation rate. so when you think about the economy, you can't just think about jobs. you have to think about the conditions that people are no longer working, whether they're aged or so forth. and one of the things that we have, you know, been stating all along is monetary policy could be a headwind, actually, for people in that category because as the fed tries to create inflation, well, if you don't have an income, that's not

necessarily a good outcome for you. and a larger percentage of the country now falls into that category than ever before. >> thank you so much, richard. and a very interesting spot to end, knowing that janet yellen is going to spend one day on each side of the aisle in d.c. tuesday and wednesday. and we'll talk again when we see or hear more from janet yellen, head of the federal reserve. thanks, richard. sara, back to you. >> timely debate, as always. still ahead, the co-founder of patron spirits. live here at post 9. you won't want to miss it. we're back after a quick break. [ male announcer ] we know they're out there.

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and take a break of his own. experian. live credit confident. let's take a look at the major indices because we are seeing stocks take off here on this monday morning. sharp rally across the board. the dow up 134 points as we speak. s&p 500 up a little more than 0.5%. and the nasdaq up 0.7%. plenty of positive catalysts that people here are talking about. janet yellen, the federal reserve chairman, talking to "the new yorker" magazine about easing policy even after the end of quantitative easing. a flurry of merger and acquisition activity perhaps igniting some good vibes here on wall street. a sign of confidence that ceos are making deals.

and we are coming off a down week. last week was the worst week for u.s. stocks since back in april. one area, carl, just want to point out getting hit are the golden miners, and that is a sharp decline in gold worth watching. >> hard to ignore the impact of financials this morning, sara, after those citi numbers. after trading was down but not as much as some expected, and that's why citigroup's with the top of the list along with a bunch of other financials, morgan stanley to name just one other. >> and we'll get to digest a few later on in the week. jpmorgan, goldman sachs among them. >> busy week. good to see you. see you soon. good morning. it is loom 8:00 a.m. in cupertino, 11:00 a.m. on the east coast. "squawk alley" is live. ♪

and welcome to "squawk alley." big day for the markets. dow setting all-time interday highs. best day for the dow since may 21st. look who's back from a little vacation out west. jon fortt and john steinberg, the two johns. good to see you both. a lot to get to. let's get a quick check on those markets. dow, new intraday all-time high. s&p, 1978. david costen speaking of the s&p, raising his target for year end to 2050 from 1990 and interesting targets in the years following that. apple also a big story, getting an upgrade ahead of quarterly earnings. we're going to talk to the analyst, ben reitzes over at barclays later this hour. this is an interesting st