>> i'll watch it from universal. >> big number. watch tomorrow. next week you're out. >> i am. >> andrew's back. >> he is. >> we've got that going for us. >> scott, great having you. >> see you next week. >> monday and tuesday. >> boys club next week monday and tuesday. >> see you soon. time for "squawk on the street." ♪ ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer david faber at the new york stock exchange. last trading day of the week as we head into a long holiday weekend. and futures suggest investors might keep their cards close to the vest ahead of the jobs number tomorrow. claims were very nice beat. oil, down about 2%. a bit higher than the session lows. watch the ten-year around 1.87 almost a two-month low. road map begins with the markets and a jobs report on deck. doubts about u.s. growth weighing on stocks but claims come in better than expected.

>> mcdonald's joins walmart, gap and target announcing a wage hike for 90,000 employees. the ceo saying it's all about the turnaround. >> europe going big against google. reports the eu is seeking a $6 billion fine. does google in fact have an antitrust problem. futures are mixed after the first trading day that q2 had. saw losses on wall street. oil prices pulling back as investors await the outcome of the ire ran nuclear talks. jobless claims down last week from 20k to 268 near a post-recession low. data coming out of tomorrow's jobs report. stock markets closed for good friday. a special edition of "squawk box" tomorrow from 7:00 to 9:00 a.m. eastern time and of course they'll be all over the jobs number, which jim, after adp, some think might be disappointment, somewhere in the mid 100,000s but now claims. >> people playing name the number. they have to redo their name the number, right? whatever they came in yesterday, they had to come and revise.

these numbers are so in inconsistent they must drive the fed crazy. it looked look a good number. but interest rates went down. honestly, there's a disconnect now. i mean if you're going to do minute to minute trading you really must have your bell is rung constantly. the numbers just don't make sense moment to moment. >> in terms of interest rates, responding to -- >> yeah. >> -- well conceivably the macro economic signals they should be except maybe responding to the fact 7 1/2 years out in germany you're paying them to hold your money? >> could be true. numbers out of germany are so strong, europe so strong. >> auto sales for germany, up nine. italy up 15. they're set to go double digit for march. the 19th month up. auto sales in europe. >> you get up in the morning, it's the exact os of what we've seen for years. how much is europe up? how much will we be down right? that's been the trade. there's a great disconnect. when europe's up you say, darn

it that's padbad for the u.s. companies will get hurt. >> looking at the dollar again. >> every day we hear that numbers are going to be cut. the more we hear numbers will be cut, it's a nice tie. >> beautiful. >> german tie. >> i can't take my eyes off of that tie. >> if you listen to what i was saying -- >> i always listen to what you're saying. but it's really pretty. >> i'm taking the darn tie off if you don't pay attention. >> i'm looking at your eyes and mouth. i promise. >> i forgot my thoutght. >> something about europe. >> look at plea, i'm the captain. the numbers out of europe make me feel they're in control of our markets and every time i see a good number there, i think okay, who did they take business from? which of our companies did they take business from? >> what do you do today ahead of a jobs number you can't react to tomorrow? >> i think that people are just going to -- first of all, we're -- it's wrong. i mean every day's not a bad day. yesterday was the biotech, we

did have a lot of supply. we have more supply today. carmax reported a good number contrary to what we heard from the autos yesterday but it's used car. a great number. i'm betting the action, if david were to ask me the key to the market than the key to the good tie i would say micron, up a buck and a quarter, a buck and a half conference call it was down 60 cents is now rallying. negativity for some stocks may be in the market at last. >> micron mu. >> were you on the call? >> no i have you to be on the calls. >> guiding down, pricing's down 9% for average selling price but did say good things about -- from micron -- they did say good things about flash which means the moron defenders of sandisk who cannot -- i didn't mean moron. did i say moron? optimistic people cannot stay away. they'll take sandisk up on the micron call and won't sell

micron like they would because people said it was horrible but it wasn't unbelievably horrible. it was just actually or zblibl leading the s&p, sandisk yesterday, though it's the worst performer on the s&p for the year. >> they can't stay away. they just -- they love -- they being the analyst community, not the community of village idiots but the analyst community -- just like certain stock. they love sandisk. if they love sky works it would be better. but no sandisk. >> you're emotional about sandisk. >> i am. >> moron and idiot. quite harsh. >> welcome to my world. i'm emotional about the flash memories. i motional about d-rams disc drives what i focus on. >> it's passion. >> i focus on big things. >> some big wage hikes coming to mcdonald's hiking wages for about 90,000 of its workers. starting july 1st. the fast food chain will begin paying employees at its u.s.-owned restaurants $1 over

the local minimum wage that will lift the average hourly rate from 9.01 to 9.90. hikes do not apply to works at 90% of restaurants operated by franchisees. what steve easterbrook said on cbs this morning about the reasons behind the pay raise. >> ultimately to drive the turnaround we want to deliver better customer service day in day out in our restaurants, motivate teams, you can retrain the talent motivated teams in restaurants typically we'll see better levels of customer service and that will help us in the competitive environment we're in. >> big full page ad in the washington and "usa today" acknowledges that a lot of people do not believe this is going to be enough. we will see. i also -- personal time off, a crew member who worked for them for one year for any reason. >> i think there will be people who make a lot of money who will sniff at this. i say no these are positive for the u.s. economy. add up all of the different

raises and they are raises i know that someone who is making huge amounts does not think this matters but it does matter. and i think the personal days do matter and it paints a positive picture for perhaps wage gains, unless you're some of these people who like no wage gains because they trade bonds. it is a five to six cent headwind for mcdonald's, 1%. if you look at walmart, ever since you were down there, and they raised that stock's been in a downturn. >> down 7% since they those raise wages. the stock market doesn't like that. >> right i was thinking -- >> thinking broadly about the benefits for the u.s. worker and the economy. >> it's hard to switch to the passion issue i have about d rams and flash memory. it's not so bad. look, if you add up how many people work at these places, numbers are staggering that the people who work at these places. >> we can do it it's only 90,000 people talking about.

talking about a buck an hour. i don't know what the average shift is is it eight to ten? >> i have no idea. >> ten bucks a day? that's going to help them. >> even if you look at walmart employees affected and now these, i mean it's very hard to draw a correlation to big, broad wage hikes coming. >> you have a hedge fund manager has a good year it triples what they -- >> they're oligarchs. >> one guy. >> look, i'm not here -- what are you lennon? let me focus on this. >> i'm saying. >> heating bill down electric you know electric bill down. you've got gasoline down. you get an extra dollar. you're painting a mosaic of more spending in the u.s. >> why is saving rate gone to 5.8 or whatever it is. >> charlie scharf at visa has done a lot of work takes six to eight months starting to kick in. but if you're kohl's dillard,

my go-to retailers you're seeing. this is a kohl's customer. it's kohl's david. >> understood. >> you ever been to a kohl's. >> never, not once. >> when i was rejected for the credit card, 13 people behind me unbelieveble. you've told that story. >> i went back to kohl's because they have some special -- they have proprietary shirts. >> like the socks. >> socks hold up forever. >> if i recall. >> versus american apparel. >> you don't like the socks. >> easterbrook was asked not just about the wages but about some of the menu changes that we're waiting for over at mek. here what happens he said. >> what we recognize is the pace of change outside of mcdonald's has been quicker than the pace of change within. so you will see us run the business, me run as ceo with a sense of urgency and purpose to make the meaningful changes that customers care about. they love our food. they love to see us invest further in the quality and just a day-to-day customer experience. they will recognize those

changes and will reward us for that. >> wait a second. did he really have a sign for the in and out burger next to the mcdonald'sburger? that's trav essy. that's like a danny meyer play next to olive garden. you can't put those signs together on the same wall. i like his aspirational burger theory. i like as accent. doesn't seem like an american burger guy. he's trying everything. he needs to win back these franchisees. carl if they all fall in lock step, the franchisees might want to foe togo to somebody else. he's like don budge, great tennis player if everything's fine, don't change a thing. if things are bad, change everything. anything that isn't on the table for this guy other than perhaps farm to table? >> interestingly, he's offering educational opportunities for the owner operators trying to get their good side to some degree. >> doing everything you can. >> got to bring the cost structure down from the

franchisee level got to simplify the menu which adds to the cost. and he's got to sell more hamburgers. >> how about taste? >> no. >> of course that's important. of course. >> we are getting more news on the religious freedom restoration act in indiana. mary thompson this morning who is down on the floor. >> carl governor mike pence said the legislator get him an amendment to this bill. he wanted it by the end of the week. the legislature coming out and, again, i'm not a lawyer so bear with me on this, but the bill actually under the language that i'm reading right here says that this law does not authorize a provider to refuse services to any individual in indiana based on among other things sexual orientation or gender identity which might be wording gay advocates asking for as far as changes in the bill.

bill goes on to say this cannot be used as part of the their civil defense. you see feed from the indiana state house as the lawmakers there are just announcing changes to the bill. now exempt from this of course will be any church or nonprofit religious organization priests, rabbis, et cetera, anyone who has that exemption under the federal tax code. this has to be looked over by both sides. and we'll see whether or not it satisfies those who are disturbed the law would provide a legal cover for businesses and others to discriminate against gays and transgenders. we know it created quite a public outcry especially the business community. jeff immelt adding his voice to those who expressed concern about this law today in a letter to governor mike pence. again the indiana legislature responding, when i was out there earlier this week they promised we will fix it. and this law, again, that they are submitting to the governor and for committee consideration today is their fix to the

outcry, again, that was prompted by the original religious freedom bill. and we'll be gathering any response to this and see what both side of the aisle think of the changes to this. back to you. >> talk to you soon. thanks so much mary thompson at the exchange. >> it's funny, some people disregard this. go to jim cramer on twitter, this is totally religious freedom, jeff immelt aren sorenson mickcmillan. >> final four coaches. >> they're not saying religious freedom. >> ibm got involved and the arkansas law as well applauding the -- >> these are people from left and right. they're not known as being bomb throwers. maybe it started with mark benioff who has some leaning, but these people aren't -- they're -- i mean is walmart afraid of costco taking -- losing the business to costco if they discriminate? >> ed meese in "the washington post" with a nice defense of the

bills. >> who are the ceos? >> conservatives are not aggressors. >> which ceos have come out, which fortune 500 companies? you know any ceos that said this is a great law. >> no i don't. stepping out to defend it is probably -- >> why? why? people have conviction. >> i know. typically you don't see corporations take one side or another. they're in the business of trying to get as many people as possible to use whatever product it is they're selling. so antagonizing anybody is not something you see. >> clearly antagonizing. walmart is antagonizing people who might want to say i want to go to some place that doesn't look -- >> that's why it's a news story. >> exactly where i'm going. people say, cramer's, butt your head out of religious freedom. i'm like you know religious freedom, marriott's not -- they're focused on the notion of discrimination, it's not the government that is discriminating which was the clinton law that he signed. it's corporations. they don't want to be lumped in with corporations that they

perceive, they perceive to be discriminatory. >> went you're walmart, 2 million employees that figures prominently into decisions as well. a broad group of people there. >> yes. not the last we've heard of the story. >> no. >> more to come. how shares of lumber liquidators moving in reaction to its sales figures. and more on mcdonald's, s&p revising its outlook on the fast food chain to negative. talk with a credit analyst making that call. one more look at the premarket. quiet action. the gain on the s&p year-to-date 0.04. >> sad. >> boy. >> more "squawk on the street" from post 9 in a minute. hey, girl. is it crazy that your soccer trophy is talking to you right now? it kinda is. it's as

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♪ google feeling the heat on the other side of the atlantic. the "wall street journal" says the european union is preparing to file antitrust charges against the search giant in the next few weeks. paper says google could face a fine of more than $6 billion. this has been obviously in the works for a long time. we'll see. google, of course, defending itself state side. >> my charitable trust owns goorg. this is not to be sneezed at these investigations have hurt this company. they kind of don't really address. this reminds me of microsoft when they didn't address -- you had joel klein after them. google is tone deaf. i did say on "mad money" a time

for a -- this is time for the twitter, zillow time for priceline, this is -- that google's become yes, pitiful, helpless giant, they won't be able to buy anybody and have difficult wiping out a vertical. every government around the world has its crosshairs on google. i think that their attitude is not the keen ofind of attitude to exhibit in front of government officials. the attitude you should exhibit is what do you want me to do? it's the government. people here may disagree that's how you play it. but ask jamie dimon what you have to do ask brian mon na hand bankers. you cannot go to the government and say we're giving you the heissman. they'll say, we negotiated. but obviously, when you have these kinds of reactions, you just know that google's going lower. painful that my trust owns it. >> not talking about the u.s. government, talking about the eu all of the journal's reporting but report there has been attempts to settlement but it does not appear that the new

person in charge that the eu is interested in going down the road at this point. happier taking it to court. >> i think the ftc, notes from behind the scene are very negative for google. >> here in this country, the ftc. >> i think google will be trapped in certain verticals and not able to go after others because it would be viewed as anti-competitive. very important story. we say, we overlook. anybody who remembers ge/honeywell, don't overlook what they do in europe. >> stock's managing it outpace s&p for the year. >> didn't have a great year last year. my trust owns it i believe they're getting disciplined. remember they hired cfo, ruth porat. they said famous will i the conference call they cared about the stock price, which was wasrevloratry. you don't hear warren buffett

saying he wants the stock price higher. in the case of google we didn't presume they cared about. it's a private company that trades as a public company. >> good point. it's a controlled company. so as a shareholder you do not have a great deal of power. you're not going to see actavis getting into the shares. >> we work for brian roberts, comcast, they care about the stock price. >> they do. the same point, many media companies are also growth companies. are. >> they have done a lot to try to to address stock prices. i'm not just a house man. i could have been talking to cvs ringing the bell. >> cramer's "mad dash" in a moment. edie falco "nurse jackie," on the trading floor. they're going to ring the opening bell. a look at that. and one look at premarket on the last session of the week. we're back in a moment.

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♪ >> i'm john slattery from "mad men" and now the "mad dash." >> look at that. >> there you go. >> wasn't smoking a cigarette or drinking a scotch. >> one of my absolute favorite actors. my executive producer for "mad money" sat next to him at a restaurant and described him as being lovable, smart, terrific and grateful to have a terrific job. >> that was a nice intro. >> whenever you see them in

another setting and they're fabulous it's nice. >> "mad dash." last trading day of the week. tomorrow's a holiday. >> you'll feel good about there is. credit suisse says don't worry about tesla anymore. the guidance is indeed beatable. there's been a substantial uptick in europe 3500 cars up from 2500 cars. 290 price target. doesn't seem to matter a lot because they opened a lot of new stores, so to speak. it not really a comparable stores number what i care about. but i know those who have been worried about tesla going down will feel so much better going into a three-day weekend knowing that credit suisse says don't worry. >> where are we in terms of amount of automobiles expected to sell this year? >> we're kind of all over the map. >> we are. >> all over the map. main thing is i spent a lot of time with audi. no one really has this -- the range anxiety, yes, but no one has the full electric yet. that remains the reason why

tesla's a cold stock, because a lot of people don't care the audi has 19 to 21 miles that it goes electric on and a plug-in. it's not just enough to be a plug-in. in t. has to be all-in plug-in. do i care for tesla? i love the car. >> but you do not like the stock and have not liked the stock for -- >> last quarter, i urged people go over conference calls. you will feel like i do if you listen listen to that call. it was like a comedy routine. yes. >> really. >> two bald men put their heads together, get tesla. >> got it. all right. we've got the opening bell just a few minutes away. edie falco "nurse jackie," ready to ring the bell with anumber of cast mates. last trading day of the week coming up.

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plays ] [laughs] no way! i have no financial experience at all. that really is you? if they're not a cfp pro you just don't know. find a certified financial planner professional who's thoroughly vetted at letsmakeaplan.org. cfp -- work with the highest standard. you're watching cnbc's "squawk on the street" live from the financial capital of the world on this thursday. the opening bell in 30 seconds. last chance to trade stocks ahead of the job number tomorrow, when the market is closed for good friday. claims were pretty good today. the third lowest of the expansion even the four-week average, jim, within 6,000 of a

post-recession low. a lot of people quibble about labor force adjustments. >> i also think people are surprised. you get great numbers and the futures -- there's a lot of selling. a lot of sellers, whether it be biotech sales. there's a lot of sellers in this market pretty much every day. i think that's confusing people and confounding the bulls. but april, it's a good month. >> there's the s&p at the top of your screen. and look at big board, down here at nyse actress edie falco and cast of "nurse jackie," begins its seventh and final season april 12th on showtime cbs represented there. at the nasdaq sabr corporation. a lot of people still know falco as carmela soprano. >> i was thinking -- i forget which season of sopranos remember it was traded out of new jersey. >> yes, i do. >> a boiler room separation.

fantastic analysis of how stocks worked in that moment of the show. >> keep our eye on facebook. citi takes price target from 91 to 97. long report looking at equations of monthly active users versus cpms, engagement versus user time. >> look, as poorly as i feel about google for my charitable trust, i think facebook can feel great on because they got sustain ability of ads. a report that talks about multiple revenue streams. i said that i feel what's app is going to be very big. what's app is a drag. there are sellers lurking at 82 83 level. you can get past them. they come out of the woodwork 82 83 it's like the twitter sellers that come out at 50 51. they are not deterred. just sitting on the stock. they will sit on the stock all day. >> citi argues you don't need to make big assumptions to get to 27% compound revenue growth.

33 if you throw in whatsapp and instagram. >> the stock's not expensive. deserves the premium multiple the best growth story out there. it should get a premium multiple. that's why the stock should go high bur att at same time sellers lurking. >> carmax will lead s&p at get-go up almost 7%. >> out of sync with what we had yesterday but it's used cars. the numbers were impressive. and this is a company that has delivered, delivered, delivered. hand it to these guys. >> mike jackson of autonation on "squawk," what a week of news whether cadillac yesterday, ford earlier in the week. >> this car show i think that there's a lot of interest in the connected car. a lot of interest in -- more than i've soon in a long time cars got exciting again. and i think that there's a lot of people trying to challenge tesla. we see tesla going up. but they don't have what tesla has. they don't have -- whether it's

the cost of the battery or think it isn't worth it that that's still lurking. when every discussion you have about cars tesla comes up which is pretty impressive given how small the company is. >> how few units it has out there. >> going to make as many as volkswagen makes in a day, they'll make in a year. that's the ratio. by the way, volkswagen audi big seller in china. china's a big growth market. the companies be careful if your base your buying of ford motor on u.s. that's not a good decision. that's not the swing factor. >> a muted response, i think, to be fair mcdonald's, in terms of the stock, it is down about a half percent on the news that it will raise wages for 90,000 of its workers. the number of people tweeting and saying it is a significant amount of money if you do 50 bucks a week however you cut it for people at that wage level it is significant. i didn't mean to imply it's not.

but assuming somehow it is going to translate into a great wave of spending i think, is also -- >> people look at what happened with walmart. they look at the stock and realize, wow, this really may be it did hurt them. but they look at brian cornell, what he's doing at target and didn't think it hurt it at all. one for one analysis doesn't hold up under close scrutiny. >> target's a different animal. >> brian cornell's making great strides there. >> yeah. >> he's been tremendous. you're going to see aisle after aisle do better. i think you'll go there, say holiday time a new disney movie, "star wars," he will feature great "star wars" stuff. natural and organic aisles very exciting. the food aisles will be good. i like everything that he's doing. and he shut down canada which was rough for people who work there. that took guts. ta took that took corporate guts. >> best buy followed it with a similar move the other day.

transports have not continued to make a new high since december sitting at 200 moving numbers. >> american air, can i just say that trades at five times earnings? you have to have an incredible decline in traffic is what that's forecasting. >> really at five -- >> five times earnings. isn't that amazing? and it's a clean balance sheet. and they can return capital. this is not bethlehem steel at the peak before it went bankrupt sold at two times earnings. the industry's selling at five to eight, continental, united continental, united delta trading five to seven times earnings. >> deutsche cut the group to a hold. what they expect weak international sales. a dollar question? >> strong dollar. no one's knocking save spirit. but alaska air's down and it's annan believable operator. i think these are hedge fund

names. the shorts will cover and then the longs will come back in. this is just a dance. in the end, these companies are making a fortune. charts are bad as you mentioned with the average. chart has come in make a bet that american air's going down. they don't look at new balance sheet. don't think of the new american air. these are airlines again, and they can't have multiple years of good though southwest has certainly had. i like southwest. >> you like it here. >> yes. >> i think southwest -- i wish they'd come on. terrific when they come on. really fabulous. >> transocean yet another rig disposal actually i think 90 million to $110 million charge. >> not that deep water rigs the whole rig business i happen to like the drillers okay? i like the service companies. these particular aspect the drilling platforms, whether it be sea drill, transocean, a different animal entirely, and

when ensco had contracts cancel which is extraordinary, that told you stay away from the group. big charges. i'd say the beginning, because the number of ships come drill ships coming on because they were built at a time when everyone thought oil was going to 150 is horrible. be very careful on the stocks and bottom fish different from halliburton. >> housing, horton lenore up a percent. charts float on inventory, which is way down. >> this group does not have a -- like the shopping centers, macerich, we keep thinking about, well, we're building homes at what a million, less than a million, that's what we did in a country in 1960. last i looked we have more people. get household formation going, get banks loosening up. >> mortgage rates coming back again. >> geez that's so right. i have a 3.2 mortgage. >> 3.2?

straight -- straight -- >> 20-year. but i pay twice a month. >> jumbo. >> that wasn't a loan i couldn't get two years ago. now people want to loan. it's a vacation house. i don't know if you saw vacation house figures, how strong they are. house, critical shortage in the country right now. >> rents are -- people driven out of markets because of high rent opting to buy instead. >> yeah the rent in new york new york is an aberration. now you're starting to get neighborhoods that have never had, you know, they're buoyant. i keep thinking about the toll brothers had apartments on the brooklyn -- right where the brooklyn bridge is and they thought they'd go for two, they're going for four. it's very unusual. homes that they -- they misjudged how much homes would be worth. the gross margins are terrific. stuart miller came on this show and said that lennar's going to

have a good year and completely delivered. toll brothers doing well. horton doing well. a scarcity. and hgx is the lead group. >> a new year-to-date high. >> that's something. >> david and i would love to go to the vacation house, if and when it opens. it can be like a bachelor weekend. >> which one do you mean carl. >> mexico. >> we could go separately to different ones. >> taking a beating on the mexican one. i bought with the peso at 12.50. >> that's going to hurt. >> it's 15.5. i have to take a write-down. >> cramer to mexico cramer to united states, you don't have -- cramer to mexico like kimberly-clark to mexico buy to hold. >> aren't you going to make it up at bar san miguel what you're buying from mexico coming down in price? >> having big numbers. when the patio opens, same-store sales will grow up dramatically. >> tequila sales. >> george clooney, you can't keep it stocked. >> wait until apple pay is in.

>> you can't go like that and get apple pay. it will be like this by the end of the week. >> traders sitting on their hands ahead of the jobs number tomorrow. dow's up six points. mary thompson. >> a mixed open for the markets. markets moving higher at least stocks do. as you mentions traders not expecting big volume today. no one wants to go long going into the employment report tomorrow in the long holiday weekend. stocks are up. weakness in today little bit of weakness in the dollar. pull back in bond prices. gold and oil lower. transports as well in today's session. again, expected to be a fairly quiet one. so let's take a look at dow components, see how they're moving in the news today. of course, mcdonald's, saying it's going to be raising minimum wage at stores that it operates that doesn't include franchisees, which account for 90% of its stores. stock down just about .7 on that. jpmorgan monitor saying close to paying off $9 billion it owes

to homeowners as part of mortgage settlement. exxon mobil higher. crude down 79 cents at 49.30. pfizer closing its chinese vaccine operations, up .2 on than the group we're watching is energy. one of the leading groups to the downside in early trading. this in the wake or in response to the weakness we're seeing in crude prices. trans transocean, of course, in the news, selling a couple of rigs. going to take a charge on that news. then chesapeake and noble trading higher. end with the auto seller stocks carmax coming up with better than expected numbers, earnings ahead of expectations, revenue as well and autonation reporting strong sales. new car sales up 10%. the stock up 1%. seeing modest gains. dow's off the highs holding on to seven-point gain but broader across the gain. we'll see whether this lasts going into the close. >> mary thompson. let's get to the bond pits.

rick's in chicago. ten-year, almost at two-month lows. rick? >> yeah, well you know on a closing basis, that's pretty much the case from yesterday. as you see the intraday chart, we had a bit of a u-turn and it wasn't so much associated with the data but we'll cover unusual numbers embedded in today's drop in the trade deficit on the santelli exchange in a few hours. as you look at two-day chart, a better glimpse you know yesterday we did get down in yield structure was higher. we do get to be pulled up. the simple explanation, as the sun came over america, pretty much that's when we started to see all of the activity on the sell side in treasuries. keep an eye on ten-year boourns. two-day chart is best. though hovering at 16 17 basis points yesterday clearly see that 15.7 basis points was the low yield. you really want to see low yields, let's go to a two-year

in the eurozone. minus 25 basis points a one-year chart. eye popping. negative yields out to seven year. there are seven countries who have significant negative yield somewhere on the curve, in the short end mostly obviously. if we look at the currency side, it's fascinating because the euro has done an about-face. it's up over a handle right now. it's really once again, starting to counterintuitively move. remember, these are positions on and all things being equal, many are not sure if the ecb is having any success in finding the type of securities they need on their quantitative easing if you're a qe believer. a year today, euro versus dollar, you can't put the euro down with the death knell punch that keeps coming back. >> rick santelli. get you look at oil prices here. to the nymex, jackie deangelis. >> good morning. a little bit of a decline in oil

prices after 5% pop yesterday. traders are tell me this is interesting, because we've got a weaker dollar today, yet crude is moving in the same direction. of course, right now there's a lot of factors on the table, including geopolitical issues like what's happening in yemen, like the nuclear talks with iran. but also at the same time they're looking at supply demand fundamentals and saying none of this really seems to make sense. a mark that is trading on technicals especially as we go into a long holiday weekend. at this point, traders want to be short, take profits after yesterday, and see where we stand next week. back over to you. >> jackie deangelis at the nymex. samsung's new galaxy sx reviews are in. what tech watchers are saying about the device. surprising review in "the journal" yesterday. dow's up 20 points. back in a moment.

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>> reviews are in for the new samsung galaxy sx and sx edge phones. the pressure was on samsung to respond to feverish exer tition with something special. samsung met the challenge, in his words. while the phones are magnificent to look at most likely not enough to fix what ails the company despite edgeimproved hardware it lacks compelling hardware. joanna stern, positive i love samsung's new phones maybe even more than my own iphone 6. like a child who found out santa isn't real i've spent the past week questioning everything i know i know samsung people doing cartwheels with that review yesterday. >> i do think that the sprint plan i'm waiting for john legere to respond what happen time is john going to call in or tweet? the sprint plan head to head

they give you the phone, it's dramatic, the savings. i think that there could be one more price war coming with these major telecos. >> sprint involved in trying to fix its network or expand and make its network much stronger in key areas. but, man that requires a great deal of money. a great deal of money. while also fighting wars on the price side trying to obviously get as many people in there to sample that network. >> this is the kind of thing people will go into the store, i'm going into a sprinter store which is radioshack sprint store. this group is so hard. the telecos are all stuck on the one hand you can say youhad a good return, verizon, on the other hand ledgers out there throwing bombs. you have sprint out there doing, you know, just offering a fabulous deal on this phone. i don't know. i mean people will check it out this weekend. >> we'll see, obviously, it will be a busy month for apple with

the watch. >> absolutely. >> the clarity on the initial opening weekend numbers might not be there. not sure we'll get anything. >> i just feel strongly this is a continuum, the watch is a continuum, as they write new programs. i had someone on last night, a doctor, a guy a medical company, are you going to write for this? he wasn't. i felt like i want to single him out, i think every major pharma will have somebody write for the apple watch. >> when are you going to begin your continuum? >> i'm not getting rid of the breitling. they're both for devices. one tells time one tells everything i need and also gives me the time but i'm not giving up the breitling because it's fashion. >> you did promise -- i'm saying you promised to throw it at the wall if the apple watch did what you thought it was going to do. >> i thought it was coming my way. people know that on twitter. you promised it to me. >> i don't know. i wore this once when swimming and time stopped.

>> no kidding. >> time stopped. it broke. >> yeah. it doesn't probably not good in the pool. it is attractive. >> thank you. we'll get "stop trading" with jim in a moment. dow's had a very sudden rally here. up almost 100 points. back in a moment.na me nt our teams collaborate around the world, which leads to better decisions for our clients. put our global active management expertise to work for you. mfs. there is no expertise without collaboration.

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into time for cramer and "stop trading." >> watch proctor & gamble. downgraded buy to hold. yesterday we heard walmart will try to squeeze proctor. proctor's not going down. bums bum bulls must be hopeful, the quarter's not good we don't care it will be discounted. if proctor can hold 80 people say bring on the bad numbers we don't care. that's what the market needs. starting to see that in today's trading. people are starting to say -- >> when ibm and cat are in the top five of the dow. >> we also know on monday we have a buy program, a lot of buy programs go on in the market illiquid ahead of the holiday. keep in mind if stocks discounting, like pvh has horrendous international and the stock's up ten points, you need to see horrendous international built in before you can expect bullish. you need to see that in the

transports. watch union pacific, my bellwether. >> wow. also that jcp upgrade earlier in the week. >> i just think -- i have a mixed emotion, if they're doing well buy target to 90. >> "mad" tonight? >> i'm fascinated by mac, the macerich macerich. >> fascinated that they don't do the right thing i'm have federal realty, don wood with simon property, this is shopping center not shopping mall but these have been great companies because you don't build shopping centers anymore and there's a shortage. don wood, take a look at the stock, a bankable stock. huge how big the reit is. amazing man. i want to hear more about what happened. bricks moore said the same thing. there is a shortage of construction in the country that if you could ever unleash, it would give us 3, 4 gdp. >> it's not clear we'd need any

more shopping centers, hence, why they're not building them. >> you need new housing developments away from urban centers. >> zell argue everybody's moving back to the city. >> bush wick is red hot. i've been looking, ticker kicking the tires. >> good long weekend. >> why wouldn't you be? >> see you tonight, "mad money" 6:00 p.m. the s&p credit analyst who revises his outlook on mcdonald's to negative. what he thinks about the company's wage hikes. dows up 93 points. back in a moment. woman: it's been a journey to get where i am. and i didn't get here alone. there were people who listened along the way. people who gave me options. kept me on track. and through it all my retirement never got left behind. so today, i'm prepared for anything we may want tomorrow to be.

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♪ do it♪ ♪ good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen, david faber at new york stock exchange. nice action give than markets are closed tomorrow during a jobs number. you would have thought maybe traders hesitant to make bet but was good performance by ibm, caterpillar.

oil down to 49.41. >> less than a day way from the big march jobs report what you should be expecting from tomorrow's nonfarm payrolls number. plus mcdonald's raising wages for 90,000 of its workers but some say that still is not enough. and facebook getting a price target increase at citi group. the analyst who made the bullish call live with his take. factory orders, rick santelli. rick? >> well finally we get a positive number. it's up .2. looking for another negative looking for double down down .4. ended up with up two, a nice spread in a positive direction. here's the rub, what we gained on this one, we lost on last month. originally down .2. now stands at down .7. this is the first positive number that we have had. my goodness it is surprising since july of last year when we had a big up 10.5 egg negated the following month with mine us ten. keep in mind both extremes are

historic in nature. the comps always going back to those. you know yields are up part of that claims potentially. but the sun seemed to bring in selling earlier than that 8:30 release. back to you, carl. >> rick thanks a lot. might be a shorter trading week but tomorrow is jobs friday, of course. even know the market's closed for good friday expecting increase of 250,000 on nonfarm payrolls. steve liesman back at hq on that. >> i'm looking at this data here and -- that just came out -- it look likes a lot of negatives but ships and boats up by 26% and that's what caused that better than expected number. overall, what we're seeing is that january revision that rick talked about. now there's a recent trend of weaker data and it's been a lot of disappointing data. want to show you, affects the payroll numbers for the thinking about the payroll tomorrows tomorrow still looking for

248er in versus 295. 13th month in a row above 200,000. average hourly raise up decent 0.2% versus 0.1%. last time. when we thought the data was bad, along comes three data points in the past 24 hours to muddy the picture. auto sales, 17.1 million, 250,000 better. trade deficit, everybody thinks that was the port not all that much thinking that's improvement in the economy but it will help the gdp number. and jobless claims that's getting commentary. down 268, 17,000 better than expected. bank of tokyo says we can't keep getting reports like this showing current labor conditions are at full employment and have the fed maintain that there's something wrong out there in the economy. the fed continues with a mantra

they remain slack in the labor market but data suggests any slack is evaporating quickly. morgan stanley nervous, we anticipate weather a drag on march job growth after a boost in february. sara you can be sure that the fed is looking at what just happened to mcdonald's and that wage hike right there along with some of the other retailers and these wage rises at the lower end. it will get the fed's attention. i still think they're going to believe there's ample slack in the economy. >> you think it will show up in the data wage increases? >> not obviously most recent one. but i think we had some little bit of an increase that came from some of the state mandated minimum wage hikes that took effect. plus wages are doing okay. still, what janet yellen has said 3% to 4% wage increases not inflationary. we're down towards 2. >> steve liesman thank you. markets are drifting little bit higher. actually sharply higher now with

the dow up 114 points. let's bring in president of global strategies to discuss the data impact on the market. you've been pessimisting on the u.s. economy. not surprised to see weakness in the data. what about jobs tomorrow? think we can get above 200,000 print? >> good morning. i think the jobs figure is probably going to be somewhere in the 200,000 to 220,000 range tomorrow, so it's going to be significantly worse than 295,000. every time it happens, i see people saying weather is the reason and i think we should get to understand that it is always cold in january and february here and it's nothing amazing. but what you see happening, despite the mcdonald's number that was just discussed, sara wages are not increasing significantly, and i believe the fed is correct in saying that it's a considerable amount of slack in the market. people who are accepting jobs at

lower pay and people accepting part-time rather than full-time employment. so there are other measures such as the u6 unemployment ray, 11%, which i suggest a significant amount of slack. i don't see the fed getting perturbed about the most recent data. >> it's confusing, as to when they're going to move because they say there's slack in the economy, monitoring international developmentsing including the u.s. dollar which is hurting exports but, at the same time, the message from the fed, they're itching to actually get off of zero interest rates and raise interest rates. where does that put us in terms of when and the path that comes after that? >> spot on in your assessment of what the fed is trying to do. i think they're cheerleading the interest rate and hoping people would believe that the inflation rate is headed up and that the inflation rate increase is coming so they are prepared for. at the same time, the strong

dollar, the weakening global economy, the increase in part-time employment and slowing increase in wages are pressure which we are going to see on exports during the coming months suggest to me that just before they pull the trigger, let's say in september, they will decide to postpone yet again as they have done in the past. we have had zero interest rate now for seven years. the fed has not increased interest rates since june of 2006. so i think there's a considerable amount of danger the fed faces, and i don't think they're ready for it so they're trying to prepare you for it but in answer to your question what they would do i think it gets postponed to 2016 at the earliest. >> interesting. i've heard a couple of different things in the past couple of days. one is if european yields continue to fall it's like an anchor around our own yields. on the other hand if foreign currency reserves are down as

they were last year that's going to lessen the recycling of funds back into u.s. treasuries. what's the stronger dynamic? >> i think the stronger dynamic, carl, is the fact that european yields are falling so sharply and ten-year german bund yield which hit record low yesterday, in my opinion, is heading toward zero mark. and if that happens, the fed may well be thinking in terms of further monetary easing later in the year rather than look to see in terms of what they should be doing about hiking interest rates. that's one. second, karl if you have a situation with lower bund yields, what the u.s. yield longer end is probably not going to go up. even if the fed increases interest rate at the short end, which means the yield curve flattens and that means less money to be made for a number of financial institutions and that's a negative as well. >> quickly here given your

outlook for the u.s. economy, lackluster growth, and what you're expecting from the federal reserve, what's the play book? still bullish u.s. dollar and bonds, and what does that mean for stocks. >> somebody is bullish on dollar, bullish on defensive equities bullish on high grade fixed income, i think al of them are likely to do well in the current setup, and very baddish on the euro because longer term the euro has to fall if the europeans have to have any expectation of a recovery. >> it already has so much. always good to collect in with you. meantime indiana republicans saying today they're presenting an addition to the controversial religious freedom act that will prevent discrimination. mary thompson back from indianapolis and joins us on the floor of the exchange this morning. >> indiana senate delivering an amendment for committee consideration today one that many hope will put an end to the controversy over the state's religious freedom law. state lawmakers tasked to write

a new bill to serve as an amendment to the old law. a new bill would maintain religious freedoms and civil liberties. civil liberties, many believed the old law would impede as could have been interpreted to provide businesses legal cover to discriminate against gays. this championpter does not authorize a provider to provide services on the baseis of race color religion, sexual orientation and gender identity nor does bill establish a legal defense that would allow a business to refuse service. exempt from the bill are churches and other religious organizations and leaders. this fix called for by the state's governor mike pence following a national backlash on his own inability to articulate whether or not gays and transgenders would have been

dis-kimnateddis dis-kim discriminated against under the original law. business leaders and advocacy groups welcoming the attempted effects and thoughts on the new bill once a chance to look it over. ncaa based in indianapolis, has already weighed in in a statement. we are very pleased the indiana legislature is taking action to amend senate bill 101 so that it is clear individuals cannot be discriminated against. of course, ncaa having a big dog in the fight because you have the final four coming up this weekend and of course hosts a number of sporting events in that city and they don't want to be the subject of any boycotts because of the law. >> mary thompson thanks a lot? when we come back after the big declines earlier in the week oil's all over the map, nearly erasing some losses. how should we be playing wild swings in oil? more on that when "squawk on the street" continues. the dow's up 101.

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oil sliding today as we await the outcome of the iran nuclear negotiations. meantime, brent crude's down 2.5% in a weak over all market. darren horowitz energy analyst at raymond james trying to make sense. good morning to you. >> good morning. >> a lot to balance. the deadline's extended two

times. we don't know how that's going to wind up. we know what supply is like in this country. what's the future? >> i think a lot of it hinges on, you knowing partly what happens with u.s. oil inventories. you know if you look at data yesterday we built by 4.8 million barrels. we've got about 470 million barrels in inventory, nominal capacity to store crude oil in the u.s. about 520 million barrels. so i think a lot of people are focused on inventory builds week to week. to your point, you know what's going happen with iranian sanctions, could that be incremental 500,000 barrels coming on to the market? and the element of geopolitical risk. there's a lot of different things going on creating incremental volatility in oil prices and whipping around prices. >> "the journal" had a chart looking at analysts' expectations for crude, gailing out the rest of the year. hardly any analyst see it going markedly lower. >> it does concern plea you've

got to look at the balance between supply and demand. the big question is how quickly can we cut rigs what impact does that have on lower 48 supply growth and where do prices need to go before you start seeing incremental industrial or commercial demand step in and balance the market. if you back out all geopolitical issues on the supply and demand side and just look at fundamentals, we've got an oversupplied market. and the only thing that can correct that is lower prices. >> darren i know you have some buy ratings on some of the midstream companies like kinder morgan and williams. talk about where they are in their cycle of cutting costs, cap x reduced across the board and how much more is ahead. well that's a good point. everybody's focused on reduction in cap x through the drill bit first, was at the hands of the producers. after that it's up to midstream companies to start reducing some of their variable expense in cutting costs. i think we're in the early

innings, you know i think that cap x cuts are probably somewhere in the second or third inning. i think you might see more. of course, 2015 is the year that that's implemented but more costs certainly need to be cut from the equation. >> when does m&a take off? some of them have cash. when do they put it to work if at all? >> i think from an m&a perspective you really haven't seen that much of a separation between multiples and we really don't expect a lot of m&a towards the end of the year. there's a lot of private equity money out there across the midstream asset clasp m&a really could be more, i think, of a back half of 15 maybe first half of 2016-type event. >> are the dividends safe in the sector. >> we think so. a lot of it comes down to capital allocation being prudent in how you allocate capital and balance sheet management focusing on lowering leverage, retaining cash. but the way we see it distributions are safe. remember, a lot of the pipeline

companies are more of a toll road type structure where you're not taking direct price risk more vol u, through put and we've minimized volume a little bit but the cash flows are stable and transparent. you should be able to clip a pretty good coupon in this market. >> if you had to rate favorites, integrated rigs, oil services refiners, what comes first? >> i think the refiners are going to benefit to a large degree based on what's going to happen with crack spreads and a lot of regional volatility. behind the refineries we certain lie like midstream companies, pipeline stocks, again because of the stable transparent cash flow. in this market you've got to play defense. there could be more of a supply correction. we really don't know but certainly with the inventory situation, it feels like there's downward pressure on price. so you're going to want to stay away from the commoditized service companies that could possibly sacrifice price to maintain utilization. you want to play defense and focus on stable cash flow.

>> darren horowitz from raymond james, thanks a lot. >> thank you very much. up next -- mcdonald's announcing a wage hike for workers at company-owned restaurants but that's just 10% of its u.s. locations. is it enough? at the same time s&p took its outlook on mcdonald's to negative. we'll talk to the analyst that made that call on the credit rating after the break.

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mcdonald's, struggle with protests from its workers, planning toing raise wage as the company-owned restaurants in the united states. kate rogers with more on the story. good morning to you, sara. some 90,000 mcdonald's workers around the country are going to be getting that raise that you mentioned this summer. but here's the cash only account for 10% of the company's u.s. restaurant workforce. the wage hike, more than $10, will apply to company-owned stores. doesn't account for 90% of stores owned by franchisees.

ceo steve easterbrook appeared on cbs say he defends the move and hopes that it leads to a better customer experience in stores. >> ultimately to drive the turnaround we want to deliver better customer service day in day out in our restaurants, motivate teams, what you can retain the talent we'll see better levels of customer service and that will help us in the competitive environment we're in. >> so of course franchisees will be able to continue to set their own wage rates. the international franchise association took the opportunity to point out the move doesn't affect franchisees because they're not joint employers with mcdonald's franchisees make separate and independent decisions about wages and benefits for employees over which they exercise direct and immediate control. but it doesn't mean locations like the one behind me will be off the hook. they could face pressure if neighboring corporate-owned

stores are stores are raising wages and they're not. back over to you. >> kate rogers. standard and poor's revised the outlook to negative. they feel the fast food giant might not be able to reverse in markets over the years. bob shuts made the call. a negative outlook, has a-rating talking about mcdonald's's credit. >> correct. >> curious about the decision over night and into the morning about the wage hikes. will that do anything material to mcdonald's financials. >> sure, obviously a robust committee process. we went to a negative outlook we think the company's turnaround as mr. easterbrook was saying but the increase in wages there's a cash cost to that but also a cash cost to turnover morale customer service business. so the wage increase we see as one of the many things that company has on the table to reconnect with the customer menu simplification testing out some other menu items.

so all of this is part and parcel of getting back to their track record of having positive comps in the u.s. so what other metrics are you looking at menu changes, for instance, and other changes, that steve easterbrook is going to make when it comes to making your call on whether to downgrade the credit. >> up to two years we'll watch same-store sales comp in the u.s. this is not the first time mcdonald's or others have had soft comps in the restaurant business. go back to 2010 most people were down, mcdonald's was up. mcdonald's has a track record with a positive comp. we'll be looking at are there benefits with lower turnover better customer service, what kind of same-store sales comps have they gotten from simplifying the menu returning to speed also one of the criticisms. so we think there's one-third chance they're unsuccessful but we think everything's on the table. we call it a turnaround with

clowe lower case t, it has a lot of cash and levers to pulp we don't expect to see much that would cause us to go back to stable in the next quarter or two from two ways to get comps up. get traffic or get ticket right? >> right. >> the company's long said that they could use a little bit of inflation. some argue that by raising wages, it gives the franchisees the license to raise priss on the menu and that's a good thing, is it not? >> i mean potentially, debates about how the minimum wage flows through. obviously anumber of other companies including walmart, which has raised wages. on a macro level this is pressured upwardly on wages. but at store level, i think raising the level of customer service some of the burger competitors higher priced but higher touch service have also put -- talked about wage levels being higher. it is part of getting the customer service up, we think. >> how much is the problem due to international?

we know we've had the food safety issues over in china. clearly mcdonald's number one market is the u.s. and that's the home market. but it's also struggling abroad. >> yeah in europe it's been more favorable. china obviously supply chain issues as you mentioned. that's a rebound situation. that's one of the risks of being over there as yum brand has also demonstrated. we think that market will come back. but the consumer in europe obviously cautious in the economic situation, the same thing here in the u.s. until gas prices fell 50%, roughly, we thought the restaurant space was one of the more challenged small ticket retail. that seems to be getting help but there's more product offering from competitors. >> thanks for joining us. bob schultz from standard and poorers. >> citi raising its target for facebook, it's confident in the sustain ability of the company's ad revenue growth rates. we'll talk to the analyst that made that call in a moment.

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good morning. i'm sue herera and here's your cnbc news update at this hour. at least 15 people were killed when the islamic militant group al shabaab stormed a kenyan university campus taking christians hostage and engaging security forces in a shoot-out. at least 65 people injured, 500 students are still unaccounted for. french prosecutors say the second black box has been recovered from the site in the french alps where the germanwings jet crashed.

german prosecutors say the co-pilot appears to have researched suicide methods and cockpit door security in day before the crash, that from information from a computer taken from lubitz's. appealing for more loans before agreed to. mexico's president says he's ordered an investigation to find whoever is responsible for a massive fire at an oil platform in the gulf of mexico yesterday. that killed four people. another 16 workers were injured and the owner of the platform says it is unclear whether any significant amount of oil has spilled into the gulf. that is your cnbc news update at this hour. back to you. i'm jackie deangelis reporting from the floor of the nymex. department of energy out with weekly natural gas storage report.

a drawdown 18 billion kukcubic feet sending prices higher. at 267 right now. what we're looking at here is we were expecting to see a build we saw a build last week and traders were thinking maybe this was the end of the cold weather. warming up on the east coast. other parts of the country have been hit hard and that's why we got this draw-down. interesting to see this pop today at the same time traders are saying this could be the last withdrawal of the year as long as mother nature cooperates. we do have a little bit of a pop, 267. remember, way off of that $3 mark that we saw not long ago. back to you. >> jackie thank you very much. marks in the green ahead of jobs friday tomorrow. economists looking for 250,000 nonfarm payrolls in mar of. joining us steven reese, global head of equity strategy at jpmorgan private bank. michelle meyer. michelle, adp no good claims

good. is it a wash? >> we think so. i mean both of throws are noisy indicators, so you want to look at a range of different figures. we think pretty much all things point to a fairly solid jobs number. so we're above consensus, at 270,000 for tomorrow. that is a slowdown from the six-month moving average of 293,000 but still clearly a strong labor market if we're right. >> everyone's wondering, what's with the gap between gdp growth and what we're seeing in jobs. gdp's disappointing and now jobs are doing quite well. is it a productivity issue? >> well sara that is i guess a key question something we're struggling to answer a little bit. i think generally, gdp figures are more volatile you'll see periods where gdp moves around a lot of the labor market numbers.

laeb labor market is solid. last year 4.1% growth in q2 5% growth in q3. we're not running at a sub 2% growth economy now. so i think probably what's going happen the data gets reconciled and the most likely outcome is q2 gets -- sees a nice bounce in gdp. >> steven how's the market setting up for tomorrow's jobs report given the mixed batch of date da ta. >> expectations are low. whispers things could disappoint. we're in the camp of 240 to 250, we need to remind ourselves the recent trend is very very strong and even if we get a slightly lower labor report that doesn't derail our view. >> is that why you're telling complaints to buy the dip. >> we think there's a double digit return possession this year. we are however focusing on part of the market that have better earnings growth. that's a key message in earnings season growth is slowing. >> everyone's putting up charts

of guidance q1, 16 companies with positive guidance 85 negative. it's the worst since '06. you believe it. >> everyone's talking about it i feel like it's in the market. you look at bottoms up sell side consentsus numbers expectations for q1 negative. we could shape up and see a market where earnings come in there's issues for the larger multinationals that have a lot of exposure outside the u.s. reality things could be better than feared and the market could turn higher. >> michelle everyone's talking about the atlanta fed and their gdp forecast for q1 which is really weak. i mean below what the street expects. what did you make of that? >> it's possible we get an unchanged reading in q1 gdp. there's a lot of room for measurement issue when tracking for the first estimate of q1. we don't have final trade numbers. we have a lot of data still left to come in in term of inventory. so it is clear that the numbers

are coming in weak for the first quarter. that, we know. whether it's zero or 1% 1.5% we'll find out with the final release. what are the early indicator saying about potential for a bounce in the second quarter? i think some of the housing numbers have looked better. we'll see what retail sales look like for the month of march. we'll hopeful the jobs numbers are a signal there is underlying strength in the economy and we'll get a bounce in the second quarter. >> steven, do you think that the equity markets in terms of pricing and for earnings and economic reports have the dollar factor right? are they underestimating the impact of the strong dollar? are they overestimating it? it's really hard to get a clear picture of what this is going to do. >> i think the street has it just about right. early on they were probably a bit light. what surprised many people how quickly the dollar strength versus the euro. but it remains to be seen. what we're seeing is a lot of the companies reporting, giving lower guidance based on a stronger dollar but the market's

looking beyond that if core fundamentals are strong. i think that's the case in q1 earnings season. >> where do you feel that? manufacture, exports, inflation? >> terms of the dollar impact you raise a really important point which is we had a big shock no the economy in the beginning of the year, combination of the decline in oil prices and stronger dollar and that creates uncertainty in terms of forecasting. the stronger dollar means the trade deficit will widen, we're importing disinflations, that puts downward pressure on inflation april lot of wild cards in terms of forecasting right now. that's right. why we're here. why you're here. thanks so much. coming up -- citi's facebook analyst mark may joins us live to tell us why he's increasing his bullish call and his price target on the stock. "squawk on the street" will be right back.

is a jobs bummer ahead? tomorrow's employment report could be a disappointment. what would that mean for your portfolio? find out at tradingnation.cnbc.com and catch our live segment in "power lunch." "squawk on the street" back after this. when market move affects, say a cloud computing stock you're holding, we can help you decide what to do. with tools that help you see how market activity is affecting your positions. so when the time comes to decide whether to scale in or scale out... you can make your move wherever you are. and start working on your next big idea. ♪ ♪

dow's up 64 points. take a look at telecom sector trading higher. courtney reagan with more on that. >> we're green across the board for the major groups, all higher. telecom standing out as the top performing sector. wind stream holdings leading the way, up over 2%. level 3 and frontier also in the green. carl, back to you. >> all right. thank you very much. courtney reagan. over to the cme group. rick santelli at santelli exchange. >> hi, carl. well, i'd like to welcome my guest, thanks for taking time today, mark. >> my pleasure. >> two issues i want to go to. first, everybody's been talking

about it but it's getting more mass as we get closer, of course, to assessing first quarter gdp. models, whether it's atlanta, have been talking zero for a while. it seems like wall street's converging on 1% maybe less. here's my analogy. in the 90s and os precrisis the government wanted acertain level of housing activity whether qualified or unqualified. teaser rates pulled everything forward. everybody ended up with a house. we were all loaded up and, boom is this the same thing as the fed keeping rates artificially low and programming around the globe that create cheap debt and then all of a sudden everybody's loaded up everything's pulled forward? where does that leave us? is that what the gdp number's telling us or am i writing too much into one quarter? >> well, probably more in one quarter. there's definitely a trend, my business to business model, b to b index in the third quarter was flat than suggested that we were

headed downward with gdp statistics and that's what happened. and in a couple of weeks we'll get the b to b index for the fourth quarter and if that shows flat then that's what's going to be happening. i think a strong dollar i think also because the fed is panicking. a lot of people don't realize that because janet yellen looks like she's you know very calm and so forth. but if you looked at money supply growth rate m2 is growing at a 10% rate. it's the fastest growth rate i've seen in years and that suggests to me that the fed is concerned that inflation's going to be low. i don't think they're going to raise interest rates at all this year. i think they are panicking and they are fearful of this strong dollar and that gdp in the first quarter is going to be near zero. >> you know mark you bring up a very good point. my opinion is is that it doesn't matter how you

normalize, maybe a better way to go would be put balance sheet reserves back into the market it needs anyway or raising rates a token 25 or 50. it's the idea that you're making an effort to end something and normalize something. but, they've missed so many opportunities to do that maybe things are slowing down to a point where it done make sense now but the problem is if we did dip into a recessionary or close to recessionary or stalled speed-type growth what do they do for an encore? final 20 seconds. >> rick they fear deflation. the cpi is not going up. they need to it go up 2% to 3%. they're doing everything they can to reverse that trend. that means one simple thing that they're postponing raising rates. you have to remember that raising rates could disrupt this whole recovery that is so fragile, that's the danger. >> well they always say anybody who says that's crazy, but the

proof's in the response, if everything was so good they always seem to find reasons not to do it. if you have a car loan at 6%, 25 bis basis points isn't going to affect your life much. we're out of time. back to sara. >> thank you. >> thank you very much. rick santelli. facebook getting a price target boost from citi group this morning. taking its price target to $97 from $91. the stock on a tear over the past year up over 30%. joining us on that call this morning, citi group's internet analyst, mark may. thanks for jfrper jumping on with us. talk about why you see increased potential for revenue growth which seems to be the core of your call. >> yeah, that's right. part of it is coming out of the developer conference last week in san francisco. some news coming out of that event. part of it is based on new analysis we're publishing this morning. at its core seeing strength and

opportunity for growth in video advertising for facebook as well as opportunities to expand revenue beyond just the core facebook application into areas like instagram, messenger app and whatsapp. >> yeah, i know that is a big part of the call. talk about the timing specifically for instagram and whatsapp and what numbers you're talking about, both as becoming billion dollar-plus ad businesses? >> yeah. that's right. instagram's the one that probably will have the most near-term opportunity. if you think about instagram, it has a user base that's larger now than twitter. its users are significantly more active on instagram than in average twitter user is and both users and engagement are growing faster. if you think about twitter, it's just a relative comp. the company is doing well over a billion in revenue growing 100% year on year. we think there's a path for instagram to deliver over a

billion in ad revenue next year and continue to grow from there. so that's whatsapp is a longer term opportunity but we see multibillion dollar opportunity for that application as well. >> mark we have seen a lot of calls from the sell side last couple of weeks arguing that twitter's product development is improving and in some cases some argue better than rivals. is that enough if you believe that, is that enough to offset the scale that facebook obviously has on them? >> yeah, well we don't view it as kind of a war between the two companies. i think there's a lot of growth overall in digital and internet advertising particularly in the mobile area for both companies to win. product improvements at twitter are really important for helping to reignite growth in its user base which has been stagnant for the last several quarters. we are noticing some improvements in the product and there is encouragement that user growth could react sell rate for twitter this year.

twitter also has a big tune regardless of user growth to just do a better job of monetizing the users that it has today and we think there's still a lot of upside for that company. in terms how that would impact facebook or instagram we don't see it as competitive head to head. we see the market growing quickly enough to support growth in both companies. >> yeah mark on the market itself we've got the upfronts coming up soon for the traditional media players, if you will and anecdotally of course i continue to hear that digital simply keeps growing in terms of on the desire of advertisers. what kind of trends are you seeing or expecting on the bigger picture the flow of ad dollars? >> i think this -- we always say this, this is going to be a big year for digital and the upfronts. but i think it really will be this year. what we're seeing is companies like facebook and youtube are really beginning to grow their

inventory in terms of video ad inventory, particularly packaging it in a way that is more similar the way agencies and traditional advertisers buy television advertising. so i think you're going to see companies like google with youtube and facebook with what they're doing in the video side to really take advantage of continued declines in viewership on television, but real improvements in their own video products to move the dial on market share this year. so i think you're pointing out a positive trend for the whole internet ad market but particularly for facebook and google. >> a story in "the journal," both about facebook and google facing potential probes and charges on antitrust, facebook one specifically saying that it's confronting a wave of european regulators looking into at least its privacy practices. as facebook continues to grow gain scale, and become more international, how big of a risk is this for the company and is it going to eventually have to impact the financials in terms

of legal charges? >> yeah those are certainly issues that are well outside my expertise zone. i think facebook probably has a long way before they start to hit up against regulatory concerns. obviously google is a company that's been under scrutiny for a while, both in europe but also in the u.s. notably the company had a favorable ruling from the department of justice, google that is a few years ago. we're encouraged that they'll be able to sort out their differences with the eu regulators but again, that's an area probably outside my area of expertise. >> well, we'll keep an eye on it obviously. privacy watchdogs are coming after them. thank you for the call bullish call on facebook. mark may of citi group. >> when we come back imax ceo explains why hollywood's big new star is china. dow's up 60 points. that's coming up on "squawk alley."

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welcome back to "squawk on the street." let's look at shared of tobacco companies. reynolds american, investors have been expecting a vote from the ftc staff on their proposed merger this week. stocks have been falling on blocking the deal but they are reversing course on some of those losses today. as can you see, reynolds american up 4% lorillard up almost 3%. >> thank you very much. today is autism awareness day. that's why we're all wearing some form of blue. sara well. also taking a deeper look at autism, the people it affects and where we stand on treatment. we have more on that from hq. hi, meg.

>> that's right. autism encompasses under a uchl brel la of autism spectrum disorder. the cdc defines it as a group of developmental disabilities that can be associated with significant social communication and behavioral challenges. well, the advocacy group autism speaks calls it a group of complex disorders of brain development. while all causes of autism are not entirely understood yet, it's thought to be associated with both genetic and environmental factors. more than 3 million people in the u.s. and tens of millions of people worldwide are affected by autism spectrum disorder. and the prevalence is increasing. in the u.s. about 1 in 150 kids had autism in 2000 according to the cdc. in 2010 that had risen to 1 in 68 kids. the reasons for that increase aren't entirely known. it's thought to be partially due to increased diagnoses, but not completely. treatment options focus mainly on behavioral therapy, though there are medications they're mainly for the symptoms. the only approved drug according to the cdc is ris per daal from johnson & johnson to treat irritability. though it is associated with some side effects.

other drug companies from novartis to roche to pfizer also have programs focusing on autism. there's also an increasing focus in the community on appreciating what's known as neurodiversity valuing neurological differences without seeking to treat or cure them. today is all about bringing awareness which is five times more common among boys than girls. the reading according to blue autism speaks is that we wear blue today. >> autism speaks founded by bob wright and suzanne wright of course, after their grandson was diagnosed almost ten years ago. they're in their tenth year have done so much to raise money, get business involved. one reason you're seeing buttons like this at the exchange and all around america today. 70 million children teens and adults around the world and 50,000 of them moving into adulthood with some complex issues. >> unfortunately a growing number and an important cause for research. let's send it over now to jon fortt. morning, jon. >> morning, sarah.

the latest on indiana's controversial law and the tech world's reaction to it. also can lasers improve the movie experience? imax's ceo will be here to tell us. and finally, "mad men's" john slattery also known as roger sterling on the end of that esteemed show all coming up on "squawk alley." in my world, wall isn't a street. return on investment isn't the only return i'm looking forward to. for some every dollar is earned with sweat, sacrifice, courage. which is why usaa is honored to help our members with everything from investing for retirement to saving for college. our commitment to current and former military members and their families is without equal. start investing with as little as fifty dollars.

the reviews are in for the new samsung galaxy s6 and s6 edge phones. and they're pretty good actually. "usa today" writing the pressure was on to samsung to respond to feverish competition. samsung has met the challenge. "the new york times" not quite as positive. though did say that while the phones are magnificent to look at, they're most likely not quite enough to fix what ails the company despite improved hardware. the s6 and s6 edge still lack compelling software. joanna stern of "the wall street journal" ex-tremely positive "i

love samsung's new phones like a child who just found out that santa isn't real. i have spent the polewhole like questioning everything i know." that is a bullish statement. she'll be joining us in the next hour. i don't know certainly samsung needs a hit as it's been losing share to apple and some of the local chinese phonemakers. we'll see. i know you have a lot more on that. >> we are going to talk about that, sarah. thanks a lot. dow is up about 56 points or so. it is 8:00 a.m. at google headquarters in mountain view california, 11:00 a.m. here on wall street, and in midtown at the headquarters of sterling cooper & partners "squawk alley" is live. ♪ ♪

our little tribute to "mad en," the final season of course, starts sunday. we'll hear from one of the stars, john slattery later this hour. joining us the founder, editor and ceo at business insider. >> great to be here. >> kayla tausche and jon fortt. what is essentially friday for us because the markets are closed tomorrow as the jobs number will hit at its