hi, everyone. welcome to "on the money." i'm becky quick. volatility returns. and janet yellen dips her toe into stock picking. american companies heading abroad for tax breaks. is it profits over patriotism or a smart move for the shareholders? what's the buzz in the world of coffee. why prices for your iced latte is going up and whether the little guys can take on the starbucks of the world. and a tool that's safe for retirement that you may not know about. what's a roth ira, how does it work and is it right for you? "on the money" starts right now. >> this is america's number one financial news programalaysian

plane tragedy in ukraine. the markets recovered on friday. we're in the thick of earnings season and so far big testimony companies are doing well. goldman sachs, bank of america and morgan stanley all beat analyst expectations. in the tech world, intel, ebay, google. a massive media merger may be in the making. 21st century fox offered eighty billion for time warner and all the properties including hbo and movie studio. he rejected the bid but it is likely that murdoch will be back with another offer.

word from microsoft about big job cuts. the company will eliminate 18,000 positions over the next year. 14% of the workforce. many of those layoffs coming in part because of its acquisition of the phone maker nokia. nervous markets after big global events. the federal reserve chair talks stocks. and earning season is under way. what does it mean for your money? jo joining us now is bob doll. thanks for coming in. the world look more unpredictable after what happened with israel and this airliner being brought down. what does that mean for the markets? >> caution. the geopolitical risks never go away, becky. you can't anticipate them. when they show up there's always a pause. the assessment has to be what does this mean for economics and for earnings. until now the assessment has been correct. not much. >> right. >> so the markets continue higher. my guess is that's what will happen at this episode as well. but we don't know and so we're doing to have to watch and wait.

>> let's talk about what janet yellen said this week. surprised a lot of watchers when she got into this idea that certain areas of the market could have been a little over-valued. she talked specifically about biotech, junk bonds, some areas of technology. did that shock you? >> it did, that she would comment about anything inside the stock market. pretty amazing. >> right. we used to get concerned when a fed chief would say something like irrational exuberance. >>al aga >>all >>allangreenspan. >> was this appropriate? >> the press has brought it front and center. interesting, a lot of areas she picked on actually have already come down in price. had a pretty hard time back in the spring. i think what she's trying to say is, hey, look, we're watching. all you people concerned about a bubble here and a bubble there we've got an eye on it. my guess is this is clumsy way of saying that. >> we're watching. what you and i have both been

surprised about is the deal on the tenure. looking at something below 2 1/2% at points this week. that is eye-popping. >> the flight to safety in the wake of geopolitical issues in the short run, i think the bond market is saying i'm from missouri. >> show me, in other words? >> if the economy gets better and inflation picks up i'll go down in price and up in yield. until then, leave me alone. >> i like that. very much the show me bond at this point? >> yes, appropriately so. >> what about earnings? at this point looks to me like things have been relatively good news. >> we have. a quarter of the way into reporting season. a little too soon to predict 100%. the initial news is goods in. not just on the earnings side but revenues have been pretty good. the one sector of the ten in the market that analysts expected to have down earnings, financials. but with reports this past week by a couple of big banks, they might be up as well. >> the meant tear from some of the ceos tended to center around

the idea that things have gotten better the last month of the quarter. >> yes. >> maybe that's good news. >> i think it is. it's indicating they have a little more confidence. the m&a cycle supports that as well. i think that means the economy is getting finally, finally, finally a bit better, exbecky. >> we are a little halfway over the this year. let's do a scorecard, where you stand, what you've gotten right, what you haven't gotten right. >> you've mentioned what we go t most far so far, the bond call. >> shocked me, too. >> my guess is by the end of the year closer to 350 and not 250. >> would you stand by that guess? >> i'm doing to stand by it. i think that when we think about 3% real for the balance of the year in the u.s., 2% inflation, that's 5% nominal growth. i don't think 250 ten-year treasury matches up to that, becky. >> this has been a head scratcher. part of it has been what's happening around the globe. when you see the incredibly low

yields in places like europe and beyond that may look much more attractive here. where do you think stocks will be at the end of the year. >> higher than where we are now but i don't think the second half will be as robust as the first half. the first half was basically a percent a month, thank you very much. if we can get half a percent a month on balance. that will be a very good year. >> you had warned at some point this year we were very likely going to be a 10% pullback. we haven't seen it yet. >> whether we get it this year or not, i don't know. the notion was volatility is going to pick up. that's not been right either thanks to all the liquidity from central banks. i do think volatility will pick up. still below normal but higher than where we've been. >> thank you so much. up next, with are on the money, u.s. companies are seeking greener pastures overseas. many relocating their businesses to foreign soil for the lower tax rates. where is the economic patriotism or is uncle sam just asking for too much? later, if you drink even one of the 500 billion cups of

coffee drank around the globe every day, you will want to hear what it means for your morning joe. right now as we head to the break, a look at how the stock market ended the week.

we should have some economic patriotism here. it's not right to take an american firm, to benefit from all of the things that we do in the united states to make it a safe place to do business, but then to say i don't want to pay taxes here, to shift my corporate address over seas to pay a lower tax rate or no taxes. >> that was treasury secretary, buying foreign corporations to take advantage of foreign tax rates? is lou right? is it unpatriotic.

former irs commissioner doug shulman, jared, doug, thank you for being here. doug, what do you think? ask jack lou right? >> i think everybody is unhappy when they see an american company leave the u.s. and go domicile somebody else. nobody likes that. i think the issue is, i think perceived to real, people don't think the u.s. has a competitive corporate tax structure now. so corporations are looking out for their bottom line. if they can find a merger that makes sense, they're willing to move and taxes are one consideration. >> right. you know, jared, it's a little tough calling them unpatriotic, they are following the law. >> that's right. it's tax avoidance, not tax evasion. it's legal. i agree with much of what doug just said but i also think that jack has a point. i mean, it does strike one as

economically unpatriotic to invert in order to lower your tax bill. >> let's talk about what this actually means, doug, just in dollar terms. an irs study found $20 billion of corporate taxes would be lost over the next decade because of inversions. what does that mean to the bottom line for the snus. >> i think it's hard to put a number on this because there's $3 trillion of taxes that are brought in. the corporate taxes bring in about 10% of that. i think it's very hard to predict, you know, how this corporate structuring is going to effect things. with that said, i think there's broad agreement that there needs to be corporate tax reform. >> right. and corporate tax reform that does what? right now the u.s. is at 35% but not everybody pays that. >> yeah. the rate on paper, which not everyone pays, as you said, is 35%. that's the highest tax rate in the eocd, any country in the oecd. very many things in the country right now but the president,

both parties in congress, have said they want to lower rates of corporations and get rid of some of the deductions and the loopholes p the issue is those deductions and loopholes were put in for specific purposes, for specific industries, and they're real dollars. having that debate about how to clean it up and get rid of some of those, that's where the money is and that's where the issues are. >> becky, can i respond to that? >> sure. >> a couple of things. first of all, i'm completely on board as doug says almost everybody on some of those ideas. the problem is i don't think that they'll go very far to fix the inversion problem. first of all, tax reform is just not going to happen in the near to medium term and the inversions are accelerating as we speak. so we can't wait for that train to leave the station. secondly, how low do we think we're going to take the statutory rate? in ireland it's 12.5%. we're never going to get anywhere near that. we need to do something else to

discourage inversions. calling these firms unpatriotic isn't going to get it, either. i think the best way to go is to change the requirement in terms of share holdings so that instead of the current shareholders continuing to own 80% of the confined value of the new company, it should be moved to 50%. i think that that would significantly reduce the number of inversions. >> mile lan ceo whose company announced a merger this week has a lot to say about this issue. listen in. >> 50% are made overseas. our country had no problem opening the borders and saying we want all the competitiveness we can get for our consumers, for everything else. what our country failed to do is keep pace and make our country globally competitive for corporations. >> doug, what do you think of that? >> i think the point she's making is global corporations are global. they're doing business all over the world. they're going to pay taxes in multiple jurisdictions.

the question that's being debated is are their headquarters going to be in the u.s.? how many jobs are they going to create in the u.s.? are they going to be called a u.s. corporation? even when a company inverts they're still paying some u.s. tax on the u.s. operations. they're just out of the u.s. tax net so they're not going to be paying on worldwide operations in the u.s. so i think her point is, this is a global economy. >> what's the solution. >> we ought to have a competitive tax system. >> to jared's point, we're not going to get down to 12 1/2% with ireland. what is the proper solution? >> netherlands have a 25% rate and they've been attracting corporations. the uk has changed their tax laws and they're in the low 20s. the target the president put is 20%. i think chairman camp put it at 25%. the idea is for us not to be the highest on the books. >> thank you for coming in today. doug, it's great to see you, too. up next, we are on the money. it's the world's most traded

commodity. inside the coffee business and how the gourmet buzz creates opportunities for entrepreneurs. later, traditional iras and roth iras. by the way, you can find us on facebook. facebook. havebook.com/otm. seen...

the $32 billion u.s. coffee industry is getting a jolt. >> for the first thing we're going to do is weigh out the coffee, 30 grams. >> with specialty coffee it's all about the craft, precision,

detail, and flavor. make a cup of artisal coffee is more about the grind and consumers are buying it. 37% volume share but 50% value share of america's coffee cups. as coffee transitions to the best part of waking up to affordable luxury, brett smith joins us, president and cofounder of counter culture coffee, a national wholesaler and roaster of craft coffee. thank you for being here today. >> thanks, beckbecky. >> we've been looking at the numbers. more than 60% of americans drink coffee every day. that is more than any other beverage besides water. where does specialty or craft coffee fit into that? >> well, it's really over the last 10 or 15 years has become a bigger part of that. the trends have shown that people are switching from the traditional coffee that we know

from the '50s and '60s which was generally lower quality to really specialty coffee, greater variety, more and more people are looking for different coffees and trying to find those selections. >> so starbucks you would count as one of the craft types, one of the specialty coffee makers? >> yeah. they certainly are the largest and most widely known. and they really push forward this notion which is valid that there is a difference in coffee. and they were the ones with some other companies that really pushed forward this idea that there's great coffee out there, that there are wonderful varieties and great coffee experiences. while starbucks led the way it's been a great opportunity for companies like ours to come in and continue pushing the envelope. >> it's hard to think of them as being small specialty. they now have about 500 million pounds a year of coffee that they sell. i no we you have about 2 million

pounds a year. you're a wholesaler, a coffee roaster, and an educator for the bar ris as at the independent cafes that serve counter culture. why haven't you done your own to this point? >> good question. we made a conscious decision as company from the beginning to focus on what we do best. despite the fact that both a wholesaler and a retail coffee shop would sell coffee, they're very different businesses. they have different capital structure, different management structure. we decided to try to focus on one thing and do it well, and that is wholesale. we continue pushing ourselves with that. and supporting our customers. we don't compete with our customers. >> i just want to take a look at coffee commodity prices. they've soared. at one point this year they were up as much as 90%. i know they softened a little bit in the recent weeks but you're still talking about coffee that is 40% more than a year ago. what does it mean to you? what does it mean to consumers? what does it mean to a company

like starbucks? >> to a company like counter culture, really our prices, they are affected by the commodities market but when we set our prices we do it by working directly with the producer. a big part of our company is dedicated to supporting our farmer partners and we literally travel around the world and sit down with them and talk to them about their business. understanding what their needs are in terms of cost to production and we communicate what our needs are and we come up with a price. so based on that, the prices we've been paying for coffee have been substantially higher than the commodities market for years. >> wow. >> and that means that our coffee will be more expensive but it mately we think it's a great value because of the quality of the cup and the quality of the relationship. but certainly the swings in the commodities market affect the overall coffee market. i can't say exactly what it might do to starbucks in terms of their costs, but generally

the consumers will see a higher price. the reality there are great opportunities out there for consumers to seek pout. coffees, even though they're more opportunities create a great value in terms of variety and the experience they can have. >> brett, thank you for joining us today. >> thank you very much. >> okay. up next, "on the money," a look at the news in the week ahead and choosing between traditional and roth iras. it doesn't have to be tricky. which one is right for you?

for more on our show and on our guests, go to our website, otm.cnbc.com. here are stories coming up that may impact your mop any this week. microsoft, apple, mcdonald's and coca-cola will be reporting quarterly results. on tuesday, the price index and existing home sales for june. on thursday we will be getting new home sales and comic book lovers will descend on san diego for comic-con. that is the big convention for comics. also on friday the amazon fire phone will hit shelves. when it come to saving for retirement you have to consider not on your asset allocation but your asset location. should you set up a traditional or roth ira? let's get to the truth about regular and roth iras. joining us is sharon epperson. sharon? >> becky, they've been around since 1998. roth iras have grown in popularity and now held by nearly 16% of u.s. households,

according to the vus inestment company institute. savers contribute more readily to roth iras than traditional iras. a lot of folks don't know the difference. >> that's why i love having you here. what is the difference between a regular ira and roth ira? >> a lot of people focus on the tax implications. with traditional ira tax deferred growth is what you're looking at there around you're looking at the fact that contributions can be tax deductible depending on whether or not you are in an employer's plan and which your income levels are. also you can take the withdrawals out. but when you do you will be taxed on that money. >> with a roth ira? >> with a roth ira you're looking attacks free growth. that's what's attractive to a lot of people. the contributions you put into a roth ira can always be taken out tax free. and even your earnings can be withdrawn tax free after age 59 1/2 as long as you have the account for five years and met some other quirmts. >> you mentioned contributions and you mentioned in terms of your salary. what are the limits for either one of these? >> that's an important

consideration to make because you may not be eligible to contribute. with traditional the income limits are a bit lower. and to have a fully deductible ira your income has to be below $60,000 top for single or married couple filing jointly, below $96,000. it changes in terms of being partially deductible all of the way to $116,000 for married couple and $70,000 for sing. >> what about a roth? >> a roth ira the income levels are higher. the income limits are higher there. there, you have to have between $181,000 and $191,000 for joint. so to make that full contribution you need to have income below $181,000 for married couples and for singles below $114,000 of make that contribution. >> if you fit in the range where you can contribute to any of these how do you decide which is the better deal for you? >> a couple of things that people consider when they look at a roth ira and why they say this makes the most sense to them is they could be in a

higher tax bracket get when they require. another thing that people may not want to do is take out the required minimum distributions from a traditional ira. that's what you have to do with a traditional ira. you don't have to do that with a roth ira. the other great thing is in estate planning. a lot of folks may want to have a retirement account they can pass on to their heirs and you can stretch out those tax-free withdrawals from a roth ira to your heir. that's something that people consider. >> sharon, thank you. i learn something every time you're here. >> yeah, definitely. that's the show for today. i'm becky quick. thank you for joining me. next weaken it comes to your wheels, is leasing or buying the way to go? each week you can keep it right here. we're "on the money." have a great one. have a great one. see you next weekend.