>> people weren't doing m&a. >> now they should be doing m & a. >> you never disappoint. >> you still didn't react to headlines of the -- >> "squawk on the street" is next. good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. the continued overhang of ukraine and gaza, after a tough weekend there. but earnings seasons does roll on. a quarter of the s&p, half of the dow this week, big names, netflix, apple, facebook, boeing, amazon more on the way. ten year yoeld under 2.48. europe, mild loss es in the eary

session. road map, the busiest week of the earnings season. netflix, apple, chipotle later tonight. markets have to digest them all. investors dealing with international uncertainty in the middle east and ukraine. live updates on both. emc reported ly pushed to spin off a unit while allergan cuts its workforce 13%. >> mcdonald's apologizing to consumers in china for expired meat, we'll explain. after friday's rally, wall street gearing up for the busiest week of earnings season. t.i. due after the bell. apple and facebook set to report with a third of the dow, including microsoft and verizon. halliburton with results, the company increasing buyback program, the $6 billion, very large increase in the buyback. and maybe some clarity on succession down the road, too. >> halliburton's one of the companies that is basically

north american fracking and they say it is great. i love a release which says we're hiring like mad, because that does imply business is terrific, not done by firing, not done by making it to the company's shrinking. they have a great business. internationally spotty but we learned that from schlumberger going. a buyback's a tremendous buyback. >> a quintupling of the buyback what i saw. north american revenue up 11. 91 cents did meet expectations. shares up 40% this year. >> do people want to play the permian, they want to play halliburton. halliburton, i've interviewed them twice on location where there is drilling, and both times they have said to me, can we emphasize we need workers. it's i mismatch in the country. workers do not need college degrees. they want people to go and help get oil out of the ground.

it's a great service company. people are still underrating it, which is why it can go higher. >> we have not had a chance to talk this hour about ukraine, last week, gaza over the weekend, again, geopolitical concerns, what point does this break the market if at all? >> i think there was a sense, russia wasn't down, interest rates went higher friday, that this malaysian aircraft was the -- the crash was so horrible, putin would have to come to the table because it's gotten out of hand. and the answer is he didn't. and so people saying wait a second, the sanctions, the air crash, putin wants to come to the table, now start thinking, germany's going to have to be heard, time for real sanctions. real companies that do business are going to start getting hurt. i thought interesting, last week, 3:19 a.m. the day of the crash, malaysia, visa mastercard say new sanctions not affecting

russian operation. we hadn't seen the new sanctions. the new, new sanctions. i think that we've got complacent friday. that's not the way it plays. you can't be. you've got to let the market come down. a lot of people using thursday as a buying opportunity. i totally understand that except the market was down about a percent. i think that you need a couple of percent to shake people up and not just, wow, you know what, this is a great opportunity because russia, germany, europe, 20% of our earnings you can't have europe slip back to recession again that would be disastrous. >> pullback on the market of some type described by those as bullish as digestion, consolidation as we get set to move higher. >> that, i don't dis agragree w. lower prices make a lot of sense. you'll see earnings this week, companies doing quite well. a lot of halliburton-like companies out there that frankly have the wind at their back. you'll see, i have honeywell on tonight on "mad money," dave delivered amazing numbers, okay? you can see, it's across the

board why. if you don't get a halliburton better numbers, honeywell better numbers you get an emc which says your multiple's too low, taking a run, i'm sure you'll do a faber report on that. >> we'll do it momentarily, we'll lump it in with allergan. if we don't get to it enough -- >> you kind of -- the investor wins. emc's down, maybe it's been because the global gdp's not growing. you know what? they have assets, so someone takes a position and starts sabre rattling. next thing you know, hey. >> at the same time, israeli air strikes pounding gaza today. more than 500 palestinians have been killed since the beginning of that offensive. 20 israelis killed, including 13 soldiers who died during heavy fighting sunday. nbc's martin fletcher is in tel aviv with the latest. good morning. >> reporter: how are you, carl?

well, the fighting continues and those numbers of dead may go up. israelis had a clash on the border, inside israel palestinians came through a tunn tunnel. they split into two groups on the way to attack two israeli settlements. spotted by the israelis, an air strike killed a group of palestinians. the other group got into a firefight, gunfight with israelis. the israelis say they killed ten palestinian but was also apparently casualties on the israeli side, but no numbers announced yet. the elephant in the room here in israel, at the moment, is that hamas announced a few hours ago they had succeeded in kidnapping an israeli soldier. yes, they in the heavy fighting in northern gaza. that's where the 13 israeli soldiers were killed, more than 100 palestinians killed. hamas say they've kidnapped the israeli soldier. the israeli ambassador to the united nations he said it's not true, and the israeli authorities here have not responded in the last couple of hours. we're not sure what's happening

there. but that would be from the hamas point of view, major success, cheering in the streets of gaza announced by hamas. the fighting is getting more intense as israel goes house-to-house in the northern suburbs of gaza looking for rock the launchers, tunnels. the israelis say they found about 15 of these tunnels, sophisticated tunnels, with concrete archers, with radio communications, which the palestinia palestinians and ahamas using to dig under israel to attack the settlements. israel will continue the fighting until it succeeded in doing that. cease-fire proposals on the table, secretary of state kerry, the united nations' secretary-general, going to cairo to work on those. in the meantime, however, fighting is just getting worse today, carl. >> thank you. martin fletcher in gaza. malaysians pushing for their government to take a tough stance against russia, after pro-russian separatists in

ukraine allegedly shot down the jet. miguel almaguer in kuala lumpur for us today. >> reporter: good morning. shock has turned to anger here in malaysia, not just the government but many of the population here in malaysia demanding bodies of those victims aboard flight mh-17 be brought back home. here in malaysia, they've seen images of the bodies strewn across the cornfield in ukraine. folks have said they want those victims brought back home. it's a call echoed all around e where victims came from the country. there's a growing protest here, planning to demonstrate in front of the russian embassy in just a few hours from now, very upset with the government. folks here saying they want bodies brought back home by the end of ramadan which ends later this week. they say they don't have much power internationally but believe they are gaining support. it's a large rallying cry all

across malaysia, carl. >> thank you. miguel almaguer. as jim mentioned earlier, activists investor elliott management reportly have taken more than $1 billion stake in emc, 2% of the company's outstanding shares. pushing the company to spin off its vmware unit. elliott saying it believes emc would get a substantial boost from such a move. at the same time, allergan, of course, continuing its fight against valeant. it does have better than expected quarterly results announced, along with a plan to cut jobs and save as much as 475 million annually by calendar year 2015 as it fights back against that valeant offer. news on both sides. start with emc. i can tell you that, elliott has been there for about a year, at least looking at it. and does have a roughly 2% position. meetings are coming up between

elliott as one of the large shareholders though obviously dollarwise it's large, percentagewise, not that large, and management. they're going to see them, i believe, next week from what i'm hearing. the key here, focus is, you know they own 80% of vmware. it's being held back by being owned within emc, as you pointed out, and the multiple is much lower than it otherwise would be. the ceo is retiring in february of next year, he's 66 years old. they believe there are a lot of strategic acquirers for business or spinning out vmware and what's left. and so they're going at it. they believe elliott, they have the support of a lot of the other larger shareholders. i've made this point many time. when you see activists in the stock, they are most effective when already being prodded on by the large long onlies who do not take activist stances because they don't want to jeopardize the 401(k) business.

fidelity's calling on the same companies for their 401(k)s. but that's kind of the way it goes. that may be the way it goes here, this idea of separation. certainly not one that's lost on longtime emc shareholders who you can make an argument, at least, suffered from lower multiple than otherwise might be the case. >> there's always been a sense, but wait a second, you've got this great asset, why don't you monetize it? they've pushed back, listen, our company's stronger with vmware vmware is faster growing emc. but what's happened i looked at the splitup a couple years ago, what's interesting, vmware sells monster, 24 times, 24% with 48 times earnings, always had a high multiple. all that's happened with emc over the years the multiple has shrunk. some that because of florida storage has taken a kind of front seat over the traditional storage that emc has. if you looked at intel's quarter, this part of the business is really picking up, e

mc's been a packager. if you go to a emc plant, it's a giant packager. people say where's the value added there? during '80s this is one of the great growth stocks, people felt it challenged ibm. 90s stayed strong when i visited the factory. vmware is worth a lot more on its own, if you separate the two, it makes a lot of sense. tu tu tucci's fought it a long time. i think elliott management could win. >> giving the timing with departure, february of next year, talking about, what, six months from now they own 80% of vmware, so it would enable it to be a tax-free spin. >> virtual software. people love vmware's product. the stock could be higher with emc ownership emc, yes, it would be lower. >> more on allergan, maybe we'll get to that later. food setback in china.

last thing the mcdonald's and yum brands need to hear. we'll tell you about that. later, ubs explains its upgrade of apple, on squawk alley. futures, despite everything going on, around the world, the dow is still on track for its best month since february. just about half a dozen session left in july. more "squawk on the street" from post nine in a minute. in a world that's changing faster than ever, we believe outshining the competition tomorrow

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mcdonald's and yum brands issuing a apologies to consumers in china that follows shutdown of a shanghai meat supplier used by both companies. a china-based unit of u.s. food supplier osi group and supplying products past expiration dates. a lot of coverage in the chinese media the supplier had expired beef, changed dates, the labeling, continued to sell it to mcdonald's and yum. now there's an investigation of both of those companies, days after yum prints 15% china. >> my travel trust owns yum, it was not china, taco bell and pizza hut, those have rarely been a factor in the stock trades off of china, now

obviously nothing's working for a moment. i think that we overestimate recalls in china because they hit it they come back. china had come back. it's going to take some time. yum is not do well. again, charitable trust owns it it's not doing well. i'm not going to say it's doing well because my charitable trust owns it, no. the company's lost focus. all stocks discount that loss of focus. it just doesn't seem to be at this level. >> tough morning for food. campbell's out warning on sales long-term target for the year's not going to be met. may have to reshape portfolio. second time they vote, guided lower since may. >> value added research, goldman against it. margin stanley's selling it. this canned portion of your pantry and the supermarket is doing so badly that it's almost as if people are saying look, we give up we don't know what the customer wants anymore. the customer wants fresh product

that doesn't have a lot of salt in it, that's not in a can. i don't think that's hard to figure. we don't want that. >> but that's not campbell's business. >> no. >> not a key part of it. >> got to keep up with the times. >> you do. you can, i would assume, shape consumer tastes as well with some of your product. >> campbell's tried to make some acquisitions to get fresher. but this is the major problem that i see with all supermarkets, there -- this is the depantrying, something that sprouts farmer market introduced me to. it's, depantrying. go to commercial break, what is depantrying. people don't want to own -- the new generation -- >> empty cup over time. >> everything's fresh. we started using cans because it's cheaper, we couldn't afford fresh. but the country's gotten more wealthy and health conscious. >> sure. >> when you deal with companies

in the food business, they just say that the next generation doesn't want this. look at conagra's numbers. look, chef boy ar did, david i used to have it growing up, it was a staple. >> i -- if you gave me that ravioli now, i would eat. i still love it. >> still love that stuff. >> you liked tang. >> no, hawaiian punch. hawaiian punch. >> franco american. these are things people don't like now. >> i'm aware of that. >> cpp, you think it stand for soup? campbells pork and beans. other things you don't eat anymore. took you to school just now. i schooled you. >> i did know. >> why didn't you say you knew it? >> i wanted you to deliver the line. i thought we were setting up, come on. >> very nice. >> a big piece of chipotle's story tonight. >> right. >> chipotle -- >> having to raise prices. but late in the quarter. were margins preserved. >> signs at chipotle, this is

not organic, they can't -- they can't afford it right now. that's a big departure. it says not natural and organic. i don't know what they're saying at yum in china. you know, not stale and rancid? hey, listen, we're not rancid. >> i know. the levers that chipotle has to pull are like through put and catering, break fast, gmo marketing that we're -- gmo. >> they have the quarterback, the linebacker, sorry, they call them the linebacker. it's defense. they had a monster last quarter. but of course, costs are going up. now remember, corn has come down. the food chain needs rain. i think -- i don't know. it's interesting to see whether sales are hurt because the beef isn't as natural, you know, they've got the sign. >> food chain needs rain. >> forecast calls for pain. >> oh my. >> but you know what? spain's looking better. >> yes, it is.

>> when we come back, we'll get cramer's "mad dash," countdown to the opening bell. 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 serious investors are choosing fidelity. call or click to open your fidelity account today.

habeing able to pay as we goo rawas crucial for a start up.s. having to fork out a lot of money up front was risky. you can launch a feature really quick, and if the feature doesn't work, we haven't lost anything and we can have something up and running in days. and this would not be possible without the cloud.

we are now supporting over 25 million users each month. ideas can be tried and tried again on the ibm cloud. the ibm cloud is the cloud for business. bell. for a monday, let's get to the first "mad dash "s of the week. >> periodically we have stocks that capture the fancy of americans. and they capture the fancy such a way they love the product, so they buy the stock and gopro is

one. i can't come up with a valuation metricer to gopro that make me want to own. the stock's going to go higher. global consumer based, no longer enthusiasts, it was initial, people that surfed, i know something you may not partake in. but now it's all about the ecosystem, videos, people put them online, it's remarkable. and, david, if gopro, if they're able to come up with a camera for dogs or cats, this thing explodes. >> explodes because we all know they have so much disposable income, dogs and cats. >> there's a medical insurance company coming public. but, no, this is what i'm saying, gopro is positioned like anal. >> but you said, i can't come up with a way to value it but i stay by it because they're going to sell a lot more stuff. >> right. >> how long does that work until there is some pain. >> until the pipeline's filled. a couple of quarters at least. by the way, sporting good stores are having a hard time stocking

gopro because of the use, people just love it. and it's gotten to the point where -- i have a garden, okay, i have a garden, and the beans are growing beyond belief, overnight. i'm trying to hook up a gopro, okay, a gopro to my fence, to watch the beans. this is the kind of thing that used to be time lapse photography, used to watch it while you were in school, elementary school, it was amazing. we're all time lapse photographs are now. >> really? going to hook a camera to watch your beans grow? >> why wouldn't you do that? >> don't you have some -- >> are you going to have to say something else to do? you're going there. no. >> you're making the point. >> why don't i can my beans? >> watch their beans grow. >> i'll can the beans, dump 60% of your salt take into a can and sell it. all right? you'll buy it because you love sodium there. no, i'm saying there's a mill uses for gopro, where i'm going, including putting it on your dog

to see what your dog sees, posting it on a post to watch your beans grow and posting it on youtube. >> right, sharing it. >> sharing it. >> with all who want to see. >> sharing is caring, david. >> see how quickly your beans are growing. >> opening bell, what is that, four minutes away. stay with us. back after this. ♪ ♪ ♪ [ 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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with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. you're watching cnbc "squawk on the street" live from the financial capital of the world. opening bell in a minute's time. gaza and ukraine continue to take a large part of the market's attention. earnings season heads into a new chapter, tech names this week, netflix, apple, amazon, boeing, caterpillar and so forth. >> look, we saw last friday what earnings could mean, in other words, on days where you have a belief that what's happening overseas doesn't matter and the proponder rance of earnings are good and stocks go higher. you have to keep one eye this week, because this week i really think is the week that united states says to europe, come on,

man, get with the case against russia. let's start sanctioning like we would cuba. let's coordinate it like cuba. >> certainly the outrage over that crash site, what's happening there, victims' bodies will drive some debate, just incredible. the inequities they're being dealt. >> i think putin has gotten -- the republicans, senator johnson, this morning, republicans who speak, who have the microphone, they clearly, i think, want to say, come on, let's just get -- let's start arming ukraine, moving soldiers in. he said let's move soldiers into poland, nato soldiers. that would be a ramp it up that could hurt. >> ringing the bell here, rexford industrial realties celebrating first listing anniversary. at the nasdaq, blackbaud,

celebrating its tenth anniversary. emc our big winner at the open here, jim. >> this is one of those -- there's always been a given that a certain point they would spin off vmware, that tends to be what happens. but vmware, they have always said, listen, it's a big architecture. you need them. not unlike paypal and eebay. in the last ebay conference call i defected donohoe moving a bit to say, if we have to split off paypal, we will. i wouldn't be surprised if the new ceo doesn't come out in -- you know, we don't know, but tucci's there, and it's a well-timed initiative by elliott who takes a long view. >> they do take the long view as 2% owner, obviously not talking about enormous percentages here. but that has not been the case necessarily needed to win a lot of the fights. look at valueact, microsoft,

potentially saying some change responsible for their position though dollar wise it was large, percentage wise and was tiny because they have support of the bigger, much larger, long onlies. we'll see if that's the case here. they wanted to initiate a proxy fight, they're lined up as well heading into the fall and that is possible from what i'm hearing but that's not where they want to go. see what happens next week from meetings and what we hear, if anything, from the company because the ceo's planned the exit. >> quarters have not been good. the company's not done that well. this is, you know, ibm hasn't done well. a lot of companies in the hardware space that have, and i think of michael dell making his move, buying the company when the hardware company hit a bottom. i think emc will a series of better earnings because i believe hardware's doing better. that's the point of the intel conference call. >> you mentioned intel, the best week for the stock in, what, three years, up nine straight

weeks. >> well, remarkable job in the quartering, saying firsten ter prize. big for pcs. apple reports this week. in the notes that i see in the updates on apple i don't see this great story unfolding for 2015, which is ibm placing apple in the enterprise. it's not in. that's the mac. they make a fortune. it's not just the iphone 6. now, apple people say, jim's saying buy it ahead -- i have been consistent for a decade, own apple. i'm not a trader of apple. you oapple. >> firms that update the rating, susquehanna, jmp today. >> not what you want. you want people to keep ratings and estimates lower to make it so you have an upside surprise. they're playing the game that tim cook doesn't like, we have seven different sources indicated without a doubt there's another phone sold more

than you think. i mean, really is, it's a -- >> also -- >> they're doing it with sky works, you know that? sky works had a great quarter. >> saying a great quart, mystery guest, it's all apple. alcoa makes the skin for the ipad. no one talks about it. you're not allowed to say i got a great order from apple. apple will cut you off if you do that. apple done want you to figure out how much they're selling so those who play that game, i think often are wrong. because apple does everything they can to confound you. >> yeah. >> on emc, just to round it out, back to where we started, you pointed out up 5%, you've got analysts starting to weigh in. this is how to starts in terms of momentum, saying the stub value, emc, the stub of emc undervalued worth, i'm look at what, 14 a share versus and 1.50

in the market -- 11.50 based on the multiple. >> you always say, thought about the tax implications of emc. >> they can do it tax-free, it's 80% own. >> spin off the rest. >> they can spin off vmware, exactly and then you've got trading separately. >> great point. >> tobacco getting hit, 23.6 billion jury verdict on friday, against rj reynolds, smoker's widow filed a lawsuit in the wake of the big lawsuits back in the day. this is for real? talking most likely an appeal. >> this is the big engel decision made, supreme court of florida said you can't do class actions anymore. so you have individual cases that are brought. these punitive awards tend to be sliced dramatically. every time we've had one of these you get this exact hit. i remain convinced that reynoldses american is the winner of all of the turmoil

other than imperial tobacco which we can't recommend because it done trade here. i think this is going to be momentary. talk about an event that doesn't -- that really shouldn't scare people out of it. >> timing is just -- i mean a week after they announce the -- the same week they announce the deal, lorillard trading at $60.64, there were those who bought it above $65 in hopes that the deal would be perhaps far higher than it ended up being. obviously it's now has a significant spread to the value of the reynolds off deal with is cash and stock transaction. >> hasbro, 36 cents meets. international up 17. girls up 10. holding a better than mattel. >> but still, i think these are all of the losers. it's ea, take 2 the winners. people want video games, we know that from xbox number, they're just not playing with the sam y

toys they did when we were growing up. hasbro -- mattel was down so badly, barbie has just -- i mean, people don't play with barbie. i never played with barbie, i'm not familiar how people stopped playing barbie. >> that's a mental image i'm going to have trouble shaking. >> and ken, the family of product -- >> dolls for -- >> a little barbie house, dollhouse, that resonated with some. >> i've got twin girls, i can name every my little pony which drove the girls for hasbro in this case. >> right. but at the same time, you have to understand, the video game numbers, i had -- the numbers for the games that they have are just like blockbuster movies. i mean these are interrations and sequels not unlike what esee for time warner where they make a lot of money. >> they do. it's funny you mentioned time warner. it's monday, we're in the most

robust m&a marngt, certainly we've seen in years but not any big deals to announce. but digesting last week, between tobacco and the unsolicited bid from fox for time warner. not to mention the shire deal. no inversions. nobody's inverted. >> after jack lieu called out patriotism. >> somewhat unwise. i get. it's all just lip service. >> why is it unwise? what are the repercussions. >> i guess, listen, there's an argument that says companies that are here and that take advantage of all benefits of being in the united states should therefore pay taxes here. but you do pay taxes here if you are -- i don't want to -- not in favor of it or against it, i'm saying i fully understand. when you earn money in the u.s. you pay taxes regardless where based or incorporated. we should make that clear. overtime what i have made the point, it not just being able to

access foreign cash, it's also that your earnings streams overtime will tend to move as your tax rate, if you invert, you'll just find a way to plan so that your earnings will not be as high in the u.s. as they had been previously so the tax base comes down. but to say these companies are not patriotic, i made the point friday, you weren't here, they've gone to every single single thing in their balance sheet, structure to take costs out of the business and they hit the bottom, which is tax rate. >> no, you're right. >> okay. now we've got to focus on than that's what's happening. >> i have st. jude on "mad money," major medtronic competitor. medtronic buys covidien, gets advantage of the lower tax rate. i have to ask dan starks are you un-farley disadvantaged because of the medtronic tax rate? i think that's a legitimate question to ask. >> without a doubt. what do you do about it? you're competing against a

number of your key competitors who -- look at valeant. the tax rate will live on forever as one of the greatest single benefits. >> are you joining the allergan people saying negative things about valeant and therefore saying unfair things because you say negative things? that's the story this morning that they talk, right? >> i'll come back to allergan in a minute. >> we have bill ackman on the judge wapner show and he's going to slag pie opyott. it's a slag fast. we had a love fest, right, with act mba and icahn. we'll have a slag fest on wapner's show. you don't like that in. >> no, i think you may be right. >> we need you in promotions. >> i can deliver these things. >> i know. >> i can write ad copy. >> dow down almost 80 points. bob pisani. >> happy monday morning. energy's up, health care, consumer staples to the downsigned the big week for earnings. so far off on the right foot.

that is numbers are increasing. that's what we want to see, 89 companies reported. that's almost 20%. of the s&p 500. earnings up 6.9% on a blended basis, better than what we started earlier. revenues about the same, 3.6, 3.7, now 3.8%, aren't increasing much. that story, typical. earnings increasing revenues about as expected. we'd like to see more increase in revenues here. regional banks, same story, continuing to report earnings but it's the same. loan growth up modestly, 4% to 7%. net interest margins down for all banks, that's the same with suntrust, you know them, big atlanta-based bank. they had core earnings above expectations, revenues in line with expectationans they're a consumer banking company, we want to watch for consumer growth. net interest margin down again. this is the problem. we need to see higher interest rates particularly on the short end for these banks. all reporting the same problem,

the same with bb&t, this is a big bank in north carolina, also largely a consumer. they have commercial aspects to. the same situation. that stock's down here. they did have a miss here. they had an increase in mortgage tax-related reserves but the bottom line, same problem that interest margin to the downside. modest loan growth. the problem with the banks and again, we've seen this with every one of the regional banks so far. we need more loan growth, 5%, 6%, 7% isn't enough. most analysts need 10% ye year-over-ye year-over-year. short term higher interest rates. companies base loans off of libor, short-term rates. the other big issue, stocks are expensive now. here's the forward multiples. suntrust 13, bb&t, 13.1. that's what they were back in 2006 and 2007. wait a minute, paying the same amount of money but they're not making the same amount of money. that's a problem. something's got to happen.

these multiples have got to come down or we're going to have to see more loan growth and higher interest rates. i've said this for a few weeks but tension's getting obvious. halliburton, right to announce to talk about that repurchase authorization. but here's the big thing. though everybody says this is an international ol services firm, 50% of their revenues are in the united states. when they started talking about acceleration in fleet additions for fracking, that's what matters. that's what everybody's going to pay attention to. that's what we're listening to on the conference call. a nice story here with ak steel and steel dynamics. it wasn't a surprise but buying a russian steel company. their business in the united states. getting ak steel buying dearborn, michigan plant. going to consolidate ak steel's activity there. consolidate the detroit auto supply complahain for steel. steel dynamics, the lowest cost

sheet nils in the u.s. and able to double capacity. both stocks trading to the upside. nice move, 6% in steel dynamics. dow's down 74 points. back to you. >> thanks very much, bob pisani. the cds outdoor deal, helping shares. let's get to allergan. bring up to date on the back and forth. allergan reporteder. earnings, perhaps the one data point to share, better than anticipated. not a surprise. when under siege, you'll find a way, not that they're changing them but they are very strong. most importantly, perhaps they include what they're calling another stockholder value enhancement plan, if you will, to improve efficiency and productivity, to further increase shareholder value, reducing workforce by 13%, 1500 jobs being cut. almost taking the play book of valeant in terms of the way they run their business. >> i know. >> these are going to add up.

talking about as much as $475 million in annual pretax savings, by next year. and they are reconfirming target of double digit sales growth. not just earnings per share growth but sales growth, top line growth, talking about 2016 earnings per share estimate, jim, $10 a share. that's where they want you to focus. 2016, throw multiple on that, and why once you get 18, 20 times hence worth more than valeant's current offer at this point april lot back from valeant. remember, on friday, valeant put out some numbers, percentage increases for bouausch & lomb, allergan firing it saying you have no organic sales growth, you take everything through price, not volume. not true said valeant on friday. pointing out bosh and lom's total sales grew 6% in 2014. while the prescription

pharmaceutical business grew 17% compared to the prior year with 70% of the growth due to volume. not price, due to volume. and they come out and tell -- ask the u.s. regulatory authorities in quebec and here in the states, s.e.c., of course in the states to get on allergan will b. what it says false and misleading statements. allergan says we stand by our comments. we call on valeant to report complete and transparent details on its business on an ongoing basis. at end of the day, investors will make their own decisions. we've got percentage numbers but there's a debate about the actual numbers. in other words, giving us percentages now because they haven't reported their quarter at valeant, not the numbers. they want to see those. but a lot of back and forth. perhaps the most important, single data point, though, the cap rate, no wronger really owns the stock. one of the largest shareholders, i was remiss on when i ran into it it's reported in the "wall street journal," it is correct,

one of the bigger long onlies, big supporter, they've sold. they didn't want to get perhaps valeant shares, allergan could argue but sold at a nice price. a lot of shares owned about by paulson. >> they don't care about -- >> they are not going to be in the pyott corner than may end up being one of the more important parts of what happens going on today. ubs, coming out on things. i think you saw that. $10 a share in value 2016 without a deal. asked the question, credibility of double digit top line growth, will that -- will they be able to deliver on that? that's a key for the conference call upcoming. >> why do i need valeant to bring out value if pyott is giving you 8.20 to 8.40 for 2015? more importantly, yes, 689 before this. $10 number in 2016, if he can bring it out, he's a seasoned

hand, knows product well, why do i need valeant to do it? valeant has to make a strong case saying you don't. we can bring out 12, maybe 11. i think that this anger back and forth, what are you going to do? of course, you get a hostile take jobe, they're not friendly. >> they're not friendly. to your point earlier, it's going to continue, bill ackman, i assume not going to spend his time talking about herbal life. >> no, it could be wide ranging. why ranging discussion on "halftime." >> former u.s. ambassador to russia, michael mcfall on geopolitical fallout from the malaysia air disaster. 11:00 a.m., steve milunovich on apple.

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awe few gainers on the down led by intel and jpmorgan, which did get upgraded today. the market dealing with gaza, ukraine and marks tonight, netflix and chipotle. stock trading with jim in a

minute. >> time for cramer and s

trading. >> one guy who has a beat on microsoft, every turn, mark mortler, talking about

understanding effects of microsoft's 18,000 employee cuts he's saying when they report, you'll hear exactly how much this means. now, obviously this has been a completely upstock. we know it's been up post intel. it's -- but we haven't seen how much exactly is going to translate for earnings next year. and i just think this stock's going higher. >> all right. what's on "mad money"? honeywell. >> dave cote delivered a monster quarter and st. jude, find out whether medtronic has a head start because of the corporate tax. amazing devices, including devices that i think are cutting back number of people who come back to the hospital which we know is important for hospitals. >> honeywell, i of course look at ge because they compete. different quarter there wasn't it? ge. is down 1.3%.

>> my charitable trust owns ge. disappointing quarter. so much that was unexciting and unacceptable, health care not good. talked about headwinds and different divisions where other companies have tailwinds. you need to see the spin-off. maybe it will move the stock up. but what can i say? i mean -- >> environment was reasonably positive, a lot of jet engine orders. backlog up 10%. what was the problem? >> i think it's the other divisions, appliance people thought something happening with appliance. maybe thought something with a dividend. it just -- when i read the quarter i said, wow, give me a reason to own the stock. i didn't see it. >> they have lagged the market. >> they've lagged the market. the yield, maybe buy for the yield. but i read it, i said, wow, i mean, geez, so many other companies are doing so much better in the business. i've got to put it out there. disappointing. >> i like the pained look on your face as well. it's emotional.

>> hard to share. >> yes. >> jim, see you tonight, 6:00 p.m. eastern time. simon's here to tell us what's coming up at 10:00. >> talk to the man who until four months ago was the country's ambassador to russia about the tense situation with putin. netflix up over 70% and earnings upon us. talk to strategist john rutledge about whether putting too much faith in central banks to calm the turmoil in hour two of "squawk on the street." we do? i took the trash out. i know. and thank you so much for that. i think we should get a medicare supplement insurance plan. right now? [ male announcer ] whether you're new to medicare or not, you may know it only covers about 80%

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welcome back to "squawk on the street." road map begins with global uncertainty. israel air strikes pounding gaza today as anger grows over the handling of the crash site of malaysia 17. what does that mean for investors. another food safety scandal hitting chine nap mcdonald's and yum apologizing. all of the details. netflix to report later today. investors watching the subscriber number. will original content give that number a boost? >> we start with the middle east, israeli forces killing palestinian militants after they crosses the boarder from gaza.

the death toll topping 500. nbc's martin fletcher live in tel aviv with the very latest. martin? >> reporter: hi. well, the israelis and the palestinian -- and hamas fighting is intensifying, although there is talks of progress in potential cease-fire with secretary of state kerry coming to the area. the secretary of the united nations all going to cairo. apparently the palestinian president abbas going there, too, with representatives of hamas. there does appear to be some movement. still very early days yet in terms of arranging a cease-fire. but the fighting intensifying. the hamas was able to intill trait ten fighter through a ton until israel this morning. the israelis, they split into two groups, apparently on their way to target settlements inside israel. but a rocket hit one of the

groups and there was a gunfight between the palestinians and israeli soldiers. and the other group, israelis say ten palestinians were killed appear to have been israeli cad waltz but no numbers announced yet. the elephant in the room is that hamas claims to have kidnapped to have caught and captured an israeli soldier in the fighting yesterday in northern gaza. the israeli ambassador to the united nations said that it was not true. there's been no response yet from the israeli government here in israel. now if it's true -- we are waiting to find out -- that would be a major success for hamas who said one of their goals from the beginning was to take control of an israeli soldier, the idea being to trade him, to bargain with israel, trade him for palestinian prisoners. if you remember, the sergeant from the israeli soldier was kidnapped by ha has, held him five years and managed to swap

him for over 1,000 palestinian soldier. waiting to hear whether that's true or not. israeli troops continuing their movement forward in the northern suburbs of the gaza strip, looking for rocket launchers, looking for weapon stockpiles and continuing to try to uncover secret tunnels that have been successful for hamas. they lead from gaza inside israel to carry out attacks. israel says they found 15 of the tunnels with 50 different entran entrances. each tunnel may have several entrances. that's where we are at the moment, carl. israel beginning to bury dead from yesterday's 13 -- hitting of 13 soldiers, the death toll inside gaza climbed over 500. so there's more deaths on either side, more clashes, direct clashes, between israeli soldiers and palestinian fighters and movement towards cease-fire. but that very much in the early stages, carl.

>> thank you. martin fletcher. anger over the downing of mh-17 growing as international monitors unable to gain full access to the crash site. western leaders have set an ultimatum for putin to allow full access or face further sanctions. jim maceda is live in moscow with more on that. good morning, jim. >> reporter: hi, carl. we took the pulse of the rush be people to find out how they felt about the crash. when you speak to the russians in the street, especially, it's my experience that they'll surprise you. you expect to hear some very entrenched pentagons and opinions in a country that gives putin 83% approval rating. but they are more -- it's much more nuanced. it's true all voted for for putin and support him, they think he's been completely vilified by the western press and should not be the only one punished, if in fact a horrible

mistake was made. now one man walking with his wife and young boy told me, he was angry about all of this media hysteria coming from the west. he said that when you get the evidence, we'll talk. but so far, we've not seen anything, just theories, he said. i was struck by how deeply sorry many russians are over the tragedy. i asked one housewife what she would think if putin were implicated himself directly and she started waving her hand and saying, that would be very bad, we would regret that. but she said that it would be like americans after hiroshima and nagasaki, saying we'll have to get through that, which is stunning. one young woman, engineering student, worried about more sanctions, that she knew many people in the defense companies here who were already hurting from sanctions, already in place. some said that they would probably not vote for putin in 2018, that's the next election,

if an unbiased investigation were actually to prove there was a russian connection to the air crash, which i found interesting, carl. if that's true, and if it's widespread, putin ultimately might be hurt more by his own base inside the country than any sanctions imposed from outside. carl, sarah? >> thanks so much. jim maceda. the stock market is starting off the week in the red, the face of the tensions with russia and of course the conflict in the middle east. the dow down 70 points at this early hour. let's get insight from john rutledge, a cnbc contributor. we should mention he's a former economic adviser to former presidents reaganen and george w. bush. good to see you. >> good morning, how are you? >> so you do have this unique perspective of advising presidents and the white house on geopolitical international issues, and also being an investment manager.

do you think that the equity markets are underestimating the potential threats and contagion of these geopolitical riffs in russia and the middle east? >> i'm not sure they're underestimating them but i think they're being overcome by bigger forces in the market, which is the central banks. but it's very clear that the geopolitical situation is a mess. it's hard to say anything constructive about the israeli/gaza situation. russia/ukraine, is a mess. the china sea, the growing conflict between china/japan, china/philippines and china/vietnam. this is a very difficult period we're going into. and it is surprising that prices have been going up. today, notwithstanding. and volatility has been so low in the middle of all of this. >> and you attribute that to central banks?

blackrock, a nice op-ed how easy money flooding the system and numbing the pain for the geopolitical events and other riffs. >> sure. talking about prices there's a wall of money out there. the fed has printed $3 trillion of bank reserves during the qe programs. everybody talks about tapering and end of qe. when it's over 3 trillion will be sitting there in place like water behind a dam. it's leaking into the economy through banks but only through the large banks. is something no one talked been large banks increased loans 50% since the bottom of the financial crisis. small banks have not really increased it at all. in fact, small banks have been going out of business at a record pace. large bank customers are hedge funds, private equity funds and m&a transacts. mall bank companies are small businesses that make jobs. you've got robust financial markets and a weak underlying job economy at the same time.

that's why we've got such a positive central bank or a pushy central bank and that's why prices are going to continue going up, i think. >> at some point they may not. john, rbs asks an interesting question, whether investors are putting too much faith in central banks to rein in tensions and stabilize marks. the policy will have to change direction from loose -- from loose to less loose, and a small will come. they're out of dry powder at the moment. people should be careful on what they're exposed to, given that that could happen. would you agree with that? >> yes, they're probably talking about the interest rates, and the interest rates of course means the risk of holding longer-term bonds especially investment grade bonds. i think that's the greatest risk today. the greatest opportunity today is the large banks are funneling huge amounts of money into private equity firms to buy those smaller, middle market company at low prices. this is the time when private

equity makes all of its money. the long bet for me is companies like blackstone, apollo, car lie and those guys. the short bet is the long treasury. >> aren't they leverage to the economy? in other words you have a lingering fear it's a bubble pair know ya almost, i've heard it call, the market has run up so strongly, so fast, if we get a sharp correction these guys are on the front lines, aren't they? >> they are. i would expect, therefore, volatility. don't be surprised if you have very bad bumps along the way. let's look at numbers. the monetary base in the u.s., which bank reserves plus currency is quadruple what it was at beginning of the financial crisis. bank reserves are 30 times what they were then. it you leave those in place, that's enough to make the u.s. price level four times higher than it is today. we just are beginning to see the first signs of firming wages and rising prices. the initial action comes out in

asset markets. that's why we've had strong stock markets. but for me the two positive -- the two big bets to make are private equity firms and real estate. not reits but the actual real estate itself. so you're protected from that rising price story down the road. >> john, before we let you go, to pick up on a point you're making about smaller companies russell 2000 has broken down. what specifically would your advice be on that for people that are watching now? >> well, the reason it did so well for aso long is that, during the financial crisis those companies were denied credit and you could, over the last three years, place money into those companies at 20 to 30% rates of return. in spite of the fact that interest rates looked like they were 1% or zero in the market. as the -- as the loans become more available, those -- they get more availability and the costs of capital go down, small

firm dozen bs costs of capital go down, small firm dozen do better. small cap stocks are still a bet to make over large cap. for me it's stocks over bonds, short over long durations, and the stock market avoid interest sensitive stocks, small caps over large caps. u.s. over europe, and beware of japan. >> rates have bottomed? >> sorry? >> interest rates have bottomed, is that what you're saying? >> i think so. the truth is i thought so earlier, too. but i think the rates are heading from here up. the fear buying in the political crisis is pushing them down below 2.50 on the ten year but i think from here, my bet is they're higher, not lower. >> we'll see if it finally happens. a lot of folks have been waiting for it. john rutledge, always good to see you. >> down 87 points on the down let's get over to dom chu. >> check out what happens

happening with monster beverage bun of the biggest losers today. the stock lower after morgan stanley analyst downgrades from equal to overweight and lowered earnings estimates duing to slowing u.s. sales trends. the stock down 2.5%. back over to you. >> thank you. the most recent u.s. ambassador to russia joins us live. hear what he thinks about possible new sanctions and how this affects the u.s. relationship with russia. dows down 90 points. back in a minute. the world has gotten you far,f but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running.

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we picked up imagery of this launch. we know the trajectory. we know where it came from. we know the timing and it was exactly at the time that this aircraft disappeared from the radar. we also know from voice identification that the separatists were bragging about shooting it down afterwards. so there's a -- there's a stacking up of evidence which russia needs to help account for. >> that was secretary of state john kerry making the case against russia and later today, the u.n. security council is expected to vote on a resolution demanding international access to the ukraine plane crash site and indeed a cease-fire around the area. we also want to mention, we've just learned that president obama will now deliver a statement on the current situation in the ukraine at 10:50, so in just over a half hour's time. joining us by phone to share his insight, a man who until february was this country's ambassador to russia, michael

mcfaul. welcome to the program, bad. >> thanks for having me. >> how tense do you believe the situation is now? how dangerous is it, in your analysis, of where putin now stands? >> well, it's very tense, of course, because of i think we have now told the world, unfortunately from the tragedy, that this war in ukraine has international implications. and putin doesn't have great options here. he's got to make a decision. so far he's stalling. he's denying everything that you just quoted secretary kerry saying. russian officials at lower levels are saying it's not true. but at some point he's got to make a decision here whether he just doubles down and supports the rebels or whether he uses the tragedy as a moment to say, enough is enough, we will gauche great, we will press for negotiations with the rebels. >> what really has angered the international community, ambassador, over the weekend, as you will be aware, is the

treat e and the treatment of the bodies and for the dutch, the fact that they have 80 children lying dead that have not been treated with respect, why does putin not deal with that situation better? he's a bright man. he knows if he lets this continue it's only going to make the situation worse. why has he not gone in with troops on the ground to assist the situation? >> to be honest, i don't have a good answer for you. it is atrocious what is happening there. it's just awful. and he could do this. i mean, this is the thing i think it's right for you to point to him, right? lots of people say, well, putin's not in charge, putin didn't do this, put didn't do that didn't pull the trigger. if he wanted to be more proactive he could be providing that assistance. i think it shows his disregard for humanity in a tragic way and it's deeply depressing to me to watch as a person who knows that

region and knows russia, not all russians are that way. but the way they've responded has been just, you know, unconscionable. >> there is talk of tougher sanctions from europe and the united states. ultimately, how detrimental is this entire conflict going to be for russia? >> well, the debate has started, that's right, all thole it's going to be a long debate because of the different economic interests that our european allies have. and remember sanctions, especially with russia, because of the size of its economy, are better as a threat to try to make putin change his behavior. but once you put them in place, then the time in which it has an effect on the economy is measured probably in years, not in week or months. so, that unfortunately means that the initial new wave of sanctions -- wheich i fully support i want to make it clear,

no other choice for the west -- once it happens the feedback effect will take a long time. >> mr. ambassador, some of us in sochi are amazed at just how quickly the degradation in relations has occurred. how do you explain that to people? how has this soured so rapidly? do you agree with senator fine stirn we' feinstein we're back to cold war levels? >> it was an era when putin was trying to show the world that russia's different, this is the new russia we wanted to be a respected partner. i think what happened was not some grand design by putin to go back to do a cold war era or re-creation of the russian empire but rather he viewed what happened in kiev in the fall of the government as a sinister plot by the united states of america.

and then he said, you know, to h e ll with these guys and responded in an emotional, tactical going into crimea and supporting rebels or terrorists in eastern ukraine. the good news of that is that he doesn't have a grand design, and i think on balance his strategy is failing in eastern ukraine, even if it did succeed in crime mia. the bad news i don't think there's any ways to get back on track. i don't think there's some moment between russia and the united states. as long as putin is in power, i think we're going to have this level of conflict with russia. >> ambassador, we thank you for your analysis. thank you for joining us. ambassador michael mcfaul. >> thanks for having me. next, another food safety scandal in china, leaving mcdonald's and yum brands to apologize, once again. all of the details on that story. plus, airline tickets are going to be more expensive

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tsa fees on plane tick its go up especially round trip tickets or no layovers. phil lebeau in chicago. it's going to push prices up again, is it? >> it will. the old saying, once a tax is in place, it's hard to see it removed or go lower, and that in fact is the case here at tsa security fees. you know sense they put these in, people have warned for years, they're going to continue to go up and up and that's what's happening here. starting today, tsa fees have been raised from $2.50 per flight up to 5.60. there is no cap. that's not the case anymore. the higher fees are expected to raise another $16.9 billion, additional $16.9 billion, for the transportation security administration. airline fees, we're not just talking about tsa fees, but overall rose to 31.5 billion worldwide for the entire industry last year. now most of that is because of

ancillary fees like baggage fees, changing reservations, et cetera, per passenger the revenue in ancillary fees $16 per passenger worldwide in 2013. if you take a look at airline index, it has moved higher, 46% higher in the last year, guys. and this is an indication that a lot of people when they hear complaints that the tsa fee might stop people from flying they say, look at airlines, look how packed the planes respect it hasn't stopped people from flying and it probably won't. >> good point. phil lebeau, thanks very much. we hate to pay higher fees. mcdonald's and yum brands facing new safety food scandal in chine nachina. eunice, we've seen this before, how does this one stack up? >> reporter: it's pretty bad. basically what everybody's talking about here. just when yum brands appeared to finally be recovering from the food safety scandel from two years ago in china, both it and its rival, mcdonald's, got hit

with a big one. one of the suppliers was targeted in an investigative report, basically a reporter undercover for two months, expired beef, he said sold and could have made it to the restaurant. that report is being played up this evening. was on national tv again, a couple of hours ago. the tv's running it, listing previously asking people how much they do not know about foreign fast food. the scandal comes, companies once dominated the market, you've been reporting on this, yum brand's biggest market. we saw it had improvement in sales, same-store sales were up. they've issued a statement saying they stopped using the shanghai supplier and they are

very apologetic to chinese consumers, many outraged by the scandal. >> eunice yoon. netflix rising before its results this afternoon. how do you play the stock before it reports? that's after the break with the dow down 84. ise financial noise financial noise financial noise

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pressure's on. julia boorstin joins us with a look of what to expect from the streaming video giant. good morning. >> good morning. subscriber numbers will be in the spotlight when netflix reports this afternoon. and the number to watch is 50 million. the company forecasts addition of 1.46 million new streaming subscribers for 49.8 million total. if netflix overdelivers as it has in the past, it would hit or top the landmark 50 million number, subscriber additions indicate how netflix investment in exclusive and original content like this quarter's orange is the new black and hemlock grove is paying off. the other question, impact of the price increase in may for new subscribers that can lock in existing subscribers and lower churn or turnover. investors looking for earnings to more than double to 1.16 per share, $1.16 per share with revenue expected to rise by 25%

to $1.33 billion from the year-ago quarter. in the quarterly letter to shareholders, hastings expected to update timing of expansion into europe and path of profitability overseas with launches in france and germany. on the earnings call, a q and a with investors we expect to hear about net neutrality. hatings has come in opposition to let internet providers for fast lane service. he does not like that idea. back over to you. >> thank you. after the bell, 150, of course, of the big companies, s&p 500, reporting this week. want to mention to you that the uk prime minister david cameron started making a statement on russia to the house of commons in london. over the weekend, the french, germans and british were discussing whether to increase sanctions on russia because of the treatment of the malaysian jet air site. the uk would like to have sanctions on those close to putin in particular.

russia and germany are at this stage we believe resisting that. this comes tomorrow when foreign ministers meet in order to do something, they say, with regards to russia. we have to wait and see. meantime, how do we play netflix ahead of earnings tonight? let's bring in the senior analyst at fbr capital markets. good to see you, welcome back. >> thank you. happy to be here. >> we know about the price hikes. i wonder if subs are the message tonight. >> you know, sub growth is crucial. wasn't so many years ago they did a price hike that was disastrous. this seems to be the opposite. they have done what they should have done before, which is do something that people don't notice, locks in your loyal customers because you only pay the higher rate, if you leave or try to come back, existing subscribers are grandfathered in. they've been spending a continue of money investing in content, getting great recognition. emmy award performance, over 30

nominations, sets a new great mark for the company in terms of credibility. i think what you can take from the investments and content they feel good about subscriber growth. they try to run a balancing act, they don't want to spend too far in advance. the setup is very good. the question on the stock is that a lot of that is already discounted. >> right. i remember saying several quarters ago they became hbo faster than hbo could become netflix. do you think they're sweating, murdoch owning hbo? >> i don't think they are sweating at all. they're focused on what they're doing. i think that the flip side of it with hbo and time warner, you know, the opportunity maybe that hbo has to get a netflix style model and what that might mean for the take overover battle. netflix focused on this great trajectory, momentum of picking shows resonating and rev languaging investments to continue expansive subscriber

growth and create a virtuous cycle. they're hitting that well now. >> except i picked the quote out of your research note, you said netflix -- how i see it -- remains an indulgence you pay with your paid television subscription rather than replacement for paid tv. why is that distinction important when looking at a stock that trades more than 100 times this year's earnings? >> it gets to the core of why we're market performing despite how the company's doing now. you have a debate what's a market opportunity. if they're a supplement to your tv subscription rather than replacement it's hard to go to the lower half of household income. i think we're assuming by 2020 there are 55 million subscribers, there's a lot of people that really can't easily afford netflix in addition to tv subscription. that's not only the case domestically but internationally where people have more income constraint. today if you're buying netflix as stock you have to believe the

market opportunity in the u. is larger in terms of rate and subscribers and internationally larger than what we imagined that's a serious question, one i'm not prepared to step up to make that bet today. >> it's worth pointing out your price ctarget is 3.93. my question, are we safe at these levels? in other words the whole rerating of netflix and the realization of what the business was, have we gone through that and it's a one-way street. in other words, stay at levels, maybe build, maybe lose a lot but you wouldn't plunge back down? >> i think the price target, where the stock is, speak to the volatility of internet stocks now. to my mind, at this price the risk isn't worth the volatility to absorb. it's hard to make a credible argue mb it should step up, that doesn't mean it won't. the stocks can create plemoment.

i try to make an argument on valuation looking beyond volatility. if you can get it below 400 bucks it's a great investment. above it, i'm not ready to do that today. >> people trying to understand international story, too which obviously would abbbe on obviou lever to pulp rights aren't the same in north america. >> i think the international rights have to be fought country by country. there's not a ton of scale from a rights perspective on licensing. where they get scale is best practices, they know what works around the world, take it to a country and beat incumbents. i think they're doing great licensing rights around the world, they're not the same as they are in the u.s. but similar then they are different. some places they're doing better than the u.s., like canada. they're getting disney movies eight months after released in theaters, i which is faster than paid tv in the u.s. and sooner than netflix has them, starz has

them. it's uneven, but in some cases it's to their benefit internationally. >> we'll see what happens tonight with the print. thanks for your time as always. barton crockett. the latest on one of the biggest takeover battles of the year, allergan and valeant. news this morning, david's got that. "squawk on the street" will be right back. my motheit's delicious. toffee in the world. so now we've turned her toffee into a business. my goal was to take an idea and make it happen.

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welcome back to "squawk on the street." watching shares of bb&t corporation, the worst performer in the s&p 500 so far today. the stock is moving lower after reporting second quarter profits that missed analysts' forecast. this due to increase in mortgage and tax-related reserves. net interest margins or profit margins declined for bb&t. the stock down 4.25 on the

trade. back over to you. >> thanks very much, dom. back to allergan. more news to share with you on the continuing battle between allergan, of course and it's unsolicited suitor in the form of valeant. this morning allergan reportedernings per share, conference call going on right now, not only were earnings better than anticipated by the analysts who follow the company but more importantly the company came out with its cost savings plan, if we can call it that, or what is also terming stockholder value enhancements, which include unfortunately for some employees job cuts, about 1500, 13% reduction, in job cuts. why? a lot of the restructuring going to create pretax savings of 475 million by 2015. and it does reconfirm its target of double digit sales growth. the conference call going on now. dave pyott on the call saying the careful yet creative

approach in developing the plan serves twin goals of minimizing impact of the cost reductions on our ability to grow sales at a double digit rate in the period up to 2019 as well as preserving ability to keep their r&d pipeline strong. look at cost savings, we have it for you, many come from sg&a, as you might expect. gross margin a bit and as well overall cost saving there's in terms of what they're saying operating efficiency in r&d. as for valeant on friday, it came out with what were new targets, or at least a preview, if you will, of the second quarter numbers which we have yet to get. we may get second and third quarter numbers from valeant. all of this is circular. valeant is up, an opportunity to acquire allergan. allergan is up because valeant's up but also because of stronger than expected numbers and the plan and i'll get to why valeant's up in a moment. for valeant on bausch & lomb,

organic growth grew. u.s. business up 17%. here rebutting one of the criticisms receiving from allergan, it said, 70% of this was volume growth, we're not just getting it from price and losing market share. a lot of it was through volume growth. valeant says stop all of the nonsense, allergan, goes to the s.e.c. and regulators in canada and says stop making false and misleading statements about our company. for its part allergan responds by saying, we'll stand by our comments we call on valeant to report transparent details on its business on an ongoing basis. investors will make their own decisions. they will. the most important data point, one investor, one of the largest in allergan, making a decision to sell the stock. it's largely out of the stock. that's something i can confirm, reported by "the journal" after what i'm told also conversations between the key portfolio

manager there and mr. gallagher, the company's chairman. they're gone. where does that stock end up? the hands of hedge funds and others who have a less than long-term view, and maybe or probably are backing valeant in its continued pursuit here. pursuit that we will continue to follow. we'll have anything more from the conference call should it be worthy of mentioning. >> sounds good. in the mean team, dow's down 123, only one dow component in the green, that's intel. the ten-year yield down to 2.45, starting to test may lows. cameron is on the tape. the president expected to speak in a few minutes. when we come back, art cashin will join us on set. you'd do that for me? really? yeah, i'd like that. who are you talking to? uh, it's jake from state farm. sounds like a really good deal. jake from state farm at three in the morning. who is this? it's jake from state farm. what are you wearing, jake from state farm?

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welcome back to cnbc "squawk on the street." uk prim david cameron just addressing the british parliament and telling the members there that hi has spoken with putin and told him no more bluster or obfuscatioobfuscatio has to ute influence and expects russia to end support of the separate ifs. he pleas all evidence shows plane shot down by pro-russian

separatists and went on to say that the european union should consider what he called hard-hitting new sanctions against russia in light of what happened, starting with the consideration tomorrow at foreign ministers meeting that going to occur tomorrow. another international leader weighing in on the horrific tragedy that occurred last week. >> more pressure on putin. thanks for the update. the sell-off accelerating down here on wall street. doubt's down triple digits, down 116 points, s&p 500 down over half a percent. art cashin joining us for wisdom from the floor. over the weekend, obviously, and this morning headlines are going from bad to worse in gaza, russia. what is it specifically investors are zeroing in right now when it comes to geopolitical tensions? >> it's more of the russian thing and the probability that we're going to have at least pressure for enhanced sanctions and at the same time the european economy doesn't look that strong. as we've discussed before,

russia is the third largest trading partner for the european union. right is right, as we all believe, but that having been said, markets about the economy and where things are going. so there's a little bit of nervousness here. i can't call it a flight to safety. it's more like a stroll to safety. but if you look at the risk monitors, you see gold is up about $5, oil is up about 75 cents. and as carl noted earlier, the yield on the ten-year is down. >> yeah. that's probably an important litmus test right now. >> yeah. >> when it comes to -- >> certainly the three of them together, that tells you it's geopolitical. >> any sense what the president might say in a few moments? >> there's going to be nervousness about it, but i don't know, he didn't take the opportunity to go basically head to head with putin. so we don't know if that's going to be where they come out. but that is making the market more nervous. >> you know, the strange thing if you look at a months-long chart of where the market's gone

is that it's up over this last month. so actually we've traded higher through all this geopolitical tension. that's written on the wall. do you think this is a turning point now that maybe we've become sensitized to it, or with i will it prove to be temporary as it always has been in the past? >> well, it's been temporary because a big concern is contagion. does a particular incident spill out into something else? does it begin to build out? it has not. and that's why the markets are up as you aptly note. but one day that may change, and that's what you've got to be adjusted for, ready for. and that's why i say you watch the three risk monitors, and you can see are the concerns building any higher than that? now, as i say, the two aspects of this are one, the economic spillout, what does it do for the european economy? and then what happens to things like the price of oil? and there you see a little bit of interplay with gaza. not so much that either israel

or gaza is producing any oil, but if the region begins to change. >> can i just into that mix mention jpmorgan on europe that came out today where they were suggesting actually that it will have minimal impact on the eurozone economy. it's only if you interrupt the gas supply notably to germany that you have a problem. i just want to throw that in as perhaps just added value on the extent to which we might not want to have to worry about it. >> no i would certainly hope they're right and certainly one of the aspects is supplying fuel to the european area and it being thankfully summer. the gas situation isn't as critical as it might be if we were talking about this in october or so. >> but is the takeaway here, art, that as long as central banks are in it, as they are in full force and you have this idea of a put from all the major central banks, geopolitical concerns, selloffs on wall street, scary as they may seem, are just an opportunity to buy the dip? >> well, they are "a," if the political contagion doesn't spiral out of control, but "b,"

i noted in my comments this morning that my good friend david cotock was checking on tapering, and he beliefs that it has kept pace and has not had an effect on bond rates because as the budget has contracted, the need to issue more bonds has come down, at the same time the fed was buying less. that's about to change this month into the next three months. so we'll look to see if the geopolitical pressures keep rates down or does the effect of the fed begin to -- the tapering begin to show up. >> tapering tightening. >> good to see you, art cashin. we're down 113 points, waiting for the president to give his statement on the ukraine. we'll be back after this quick break.

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so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. we're waiting for the president to give a statement on the south lawn about the situation in the ukraine. of course, yesterday john kerry, the secretary of state, was pretty emphatic that they had all the detail on the launch of that missile that hit the malaysian liner. it's pointing towards russia, almost fully -- almost fully concerned that that was the case, though not quite. we'll wonder if they have extra things to say on that. >> yeah. of course, waiting for the

president. also keeping an eye on those markets in the selloff mode. s&p 500 down 0.5%. you mentioned july still set to be a positive month. the best month, in fact, since back in february. we've got a few themes. obviously geopolitics and some of the risks and concerns are playing out front and center. you've also got earnings with a number of companies coming out. >> this 150 this week alone for the s&p 500. >> big ones after the bell including netflix. later in the week we'll get from coke, mcdonald's, some of the big bellwethers of this economy and consumer prices very much a focus today. just on the earnings note, we have been seeing better earnings. profits are up 6% for the companies that have reported so far. so that is good for this market, though. of course, as we mentioned, the focus has to be on what is going to happen, the fallout with russia and of course in the middle east as well. >> as art cashin pointed out, if you get contagion, if the set of facts blow up to other possibilities, other concerns, as you piece them together.

so when the president comes out and says something, if the analysis is changing on what the united states believes russia's role in that crisis is, that in itself could be a consequence for the market. >> and of course, we're keeping an eye on some of the indicators like the vix, the fear index, which is elevated this morning on the ten-year yield which has broken below 250. the tlt is the equity etf people watch to track the ten-year yield and other metrics like gold which are higher right now. that sort of flight to quality, safe haven. carl, i know you're back on set with mr. cashin who is watching all the indicators. watching these markets, watching to hear what the president will have to see to see whether that contagion factor is alive and whether it's a concern. >> right. as usual when we get into this kind of environment, we don't let art stray too far. he's still here at post 9 and will hopefully walk us through with wisdom if it calls for that. for the time being, guys, thank you. the dow is down 113. we've lost dow 17,000. we've most, if not all, of friday's gains, so we'll keep an

eye on the market as the president is expected to make that statement on the south lawn in a few moments. in the meantime, all of this, of course, surrounds not just ukraine but gaza, the malaysia airlines flight is the big story. for more on that, we go to nbc's katy tur who joins us from amsterdam. katy, good morning. >> reporter: good morning. we've been focusing on the victims out here in the n netherlan netherlands. most of the passengers were from the netherlands. we spoke to one father last night who said that he just can't believe that he is having such a hard time getting anything of his daughter back. he's hoping for at the very least, a shoe. but so far only infighting between the russians, the separatists, ukraine and the western governments all trying to get in there and finding nothing but problems and blockades in their path. malaysia has said they have people on the ground, but they can't guarantee a safe corridor. the families we spoke with here, some have expressed interest in going there themselves, but others have said it's just not safe. a lot of tragedy, a lot of

unimaginable pain from the members of the families that we're speaking to. detectives have gone to each of these families and taken dna samples in hopes of helping to identify remains. so there is some hope that they will eventually get something. but a lot of frustration that they haven't gotten anything yet. we're seeing memorials without bodies, funerals stalled and nothing but questions as to when this is going to get resolved. carl? >> katy, just an incredible story. i think it was "the journal" this morning that said those families suffering iniquities rarely seen. our thanks to katy tur in amsterdam. if that weren't enough, more violence in gaza over the weekend. we want to go back to nbc's martin fletcher who has joined us all morning long from tel aviv. hi again, martin. >> reporter: hey, carl, my friend. the fighting here is growing and intensely at the same time as it does appear to be