eric schmidt revealed j. lo in her green dress the most popular search at that time. this spurred the idea users were interested in more than just texts. >> interested in a dress, that's really weird. >> it's the dress. i don't know what's great about. i guess the color's nice. andrew, you're back. see you tomorrow. >> see you tomorrow. >> hope your cold is tomorrow. >> join us tomorrow. "squawk on the street" is next. ♪ good morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer david faber at new york stock exchange. relatively steady premarket this morning as earnings start to hit from bed bad,th, alcoa. oil rebounding after 6% decline. ten year's below 1.9. four-week average is at a new post-crisis low.

road map begins with retail results. costco sales, bed bath earnings dis appointappoint but walgreen off to a good start. >> alcoa, the q1 results miss on the top line. profit did beat. shares lower in the premarket. >> greece makes its payment to imf. european stocks at new intraday high. christine lagarde first on cnbc later this morning. but first, david's got breaking news on intel. >> that's right. we want to tell people about the talks that have been going on between intel and altera first reported march 27th, have ended. >> yes! >> in fact without a deal. jim seems to be excited about that. >> i knew it was phony. i knew -- they were talk bug just another -- >> let me give you details. >> just furiates -- >> a march 27th story, intel in advanced talks to by altera that got the stock price up and frankly intel's as well what

happen i can tell you now, intel made an offer, in the low 50s, which is significant premium to where altera was trading and a price that altera stock despite the move up on the "wall street journal" story never reached it was not a price altera was willing to take. and so while they had talked for months and there had been a good deal of due diligence on intel's part unable to agree on price. they have not spoken for the last week intel has abandoned any attempts to acquire altera. of course, when the story was reported by the "wall street journal," it was greeted positively by shareholders on both sides. altera is one of intel's biggest customers and it indicates -- and this is something that will continue according to my sources -- a willingness on the part of intel to consider large acquisitions under its new management. this was not a deal that involved a great deal of cost synergies but more about growth.

altera is a faster growing company. but they simply could not agree on price. i have not been able to determine the price which at least altera felt like it was willing to sell itself. that may have been as high as 60 or above and intel unwilling to go to that level again. my sources indicating it was in the low 50s in terms of its offer price. could not agree. the two sides have not spoken. i am told for the last week. and there have been no talks, no plans to begin talks. again, although one always wonders, jim, whether shareholders hear a report and say, come on really you're not going to get involved? >> i thought it was broadcom. i thought stories were dead wrong. they already have a partnership, they didn't need to do the deal the partnership is great, put them ahead of xilinx. not unlike when they tried to talk in the '90s the deal failed. the deal failed because the

broadcom was erratic man and it made more sense to be broadcom if they did not need this deal. see broadcom trade up. i'm no more official than "the journal" with the altera to be bought on top of farm sickpharmacyclics. >> lots of people wondering what happened. we can tell you now, talks ended without their ability to reach a deal. i mean -- >> a big scoop. >> it is in fact there were talks, there were talks. they were talking seriously -- jim, intel was trying to buy them. they were willing to off ar price $53, $54 a share. altera chose to walk away from that. >> that stock was up for a long

time and it shouldn't have been. i knew it didn't make sense, they weren't going to make a deal. >> altera unwilling to accept the price. intel was willing to do a deal. >> altera didn't need the deal. they were killing xilinx. >> we'll see what it does when it reports earnings in a couple of weeks. >> now up 3%. >> absolutely. >> whether it's -- more likely one. look, broadcom didn't want to sell in the '90s when intel wanted to be in mobile and set top box. they may not -- it's totally different group now. but it certainly made more sense that they were willing to pay up for broadcom. altera could make sense for intel because it would raise their muttable. but the idea that was if you read the stories, a done deal what i was offended by. >> people jumped to conclusions, and it was a strongly written story that had a lot of people believing a deal was hours if

not days away. >> to be more circumspect, be more careful, logical in the way it has to be. >> we know intel's out there. we know they're going to be aggressive. that is clearly a takeaway here. this would have been $16 billion, $17 billion, assume low 50s 53 54 300 shares of altera altera. >> broadcom would be $40 billion if they did it. >> all cash. >> whether it's tech or oil, after yesterday's news everyone's trying to figure out who's next how big these deals can get. ft saying it just the beginning of huge large cap consolidation in oil. people say, exxon, like in '98, bp am ma co, exxon goes exxon mobil, another big deal because of the deal yesterday. >> if you want to know who looks like bg no one. that company was sorry.

the only thing they had going for them the chair, everyone revered because he ran schlumberger. if you bought from andrew you're an idiot. there's no way you want to be on the other side. that was 50% premium for a company in the most glutted area of natural gas, liquefied natural gas, the worst single area to go into. there are oil companies worth doing. yes, i understand somebody might want to go for marathon conoco these companies are proud companies, and they don't want to sell. but b.g.? b.g.? brad -- brad gilbert is b.g. great tennis pro. >> are we in a new chapter of m&a? linked today -- >> you mean new, stupid chapter? >> maybe. >> they overpaid. wait, who? >> royal dutch. >> we talked about that yesterday, of course. we have a smaller linkedin deal -- >> why didn't they buy whiting?

why didn't they buy continental? if it's a new chapter, they're paying too much. pioneer, you need permian -- >> you didn't say about mylan perrigo. >> this deal makes so much sense. >> we'll do more on that later in the faber report. carl, to your overall -- >> drop another bomb? >> we'll try to give people insight into what's going on with the mylan situation. second only to 2007 given the kraft deal the shell deal but we've got deals, as we reported falling apart, not getting to the finish line. we're in a strong m&a market for all of the reasons we cited for years. >> one drug company, it's valeant, it's actavis, it's mylan, it's teva perrigo, and not talked about much meloncrot. >> also inverted. >> a st. louis-based company

that's got that -- >> of course. perrigo is where? >> perrigo's an israeli company with michigan plants that is in pennsylvania that is chiefly an irish company. >> and mylan is -- >> it's a melting pot. >> mylan's in the netherlands, of course they inverted through the abbott deal. yeah. >> it's great country. >> brent saunder figured it out. watch malloncrot. sorry "wall street journal." it's 192 bid this weekend from j and j, i'm not playing that game. i go to david. is this a done deal? he said do not put that in your -- do not put that in your game plan. so i left it out. so suddenly i wake up the paper next day, i'm an idiot i didn't say that the deal was done. thank you very much for making me not look like an idiot. >> you are welcome. >> can be an idiot for other

things, love for the apple watch. >> on sale tonight 3:00 a.m. pacific, are you going to be up? >> i've got two bands. going for two bands, one watch. >> will you order 12:01. >> not like people going for the who concert two weeks early. i'm going to the store. >> online ordering only. >> i want to know i saw -- i got the right size. but i do like to -- i want to put it on again, because it's not an -- i want to buy the more expensive one. i want to buy the little more expensive, because i've the got the breitling. >> well aware of the breitling. >> keep waiting for the breitling to make a move to the left. >> it's coming. it's coming to you. it's not even water resistant. >> maybe in his will. >> from hitting the wall to straight to david. >> why should i throw it away. i think you might like it. >> walgreens, boots alliance revenues amiss.

the drugstore operator planning to close 200 stores to save costs. shares of bed bath falling in the premarket. quarterly revenue below consent consensus consensus. costco, 2% comp stores shift in the easter timing. >> bed bath spending too much on technology. they have a big brooklyn project that's going to open but remember, a lot of the companies when they do omni channel, missed goldman's number for guidance. they came in 507, 532. they have an opaque conference call. but in the end, to be able to keep up with jones, meaning amazons you have to spend a fortune and they're behind the curve. interesting omni channel initiatives but at the same time, they didn't spend enough money when they should have. costco, i think one off and you want to buy on weakness. still 4%. i like the weather. walgreens, remarkable. my charitable trust sold it. i feel even more idiotic about

that. why did we sell? up 20 points but there was not enough because that combination's proven to be powerful. >> something from the conference call on walgreens, they continue to explore opportunities to expand the network. >> i told you buying a pharmacy business you didn't believe me. >> top priority for capital use, m&a. >> if people buy -- jpmorgan put it out. >> would they conceivably try to overbid the unh deal for -- >> catamaran. catamaran, they stole. remember, greg got rid of it. it makes too much sense. people putting out express scripts. perhaps rite aid could be down. it's an 8 stock. they want to be in pbm. cvs is killing it with that pbm. >> that seems to be the -- if

that's the model. i have no idea whatsoever whether any approaches made. but that's interesting headlines. >> tobacco has to come out. you're a pharmacy benefit manage get rid of tobacco. you can be health care company and kill people at the same time. it's not synergistic. >> u.s. pharma sales up 6.9. thanks to a strong cold and flu season. >> perrigo said it wasn't a strong cold and flu season. you had to be on the other side of the street to catch the flu. >> apparently. >> a lot more to get to this morning, including of course reaction to alcoa's results last flight. later on today, imf's chief, christine lagarde, whose group received the loan payment from greece. stay tuned for sara eisen's live interview. a look at the premarket. more to get to. more "squawk on the street" from post 9 when we return.

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premarket. the miss overshadowing the beat on the bottom line. yesterday, klaus kleinfeld said

he was pleased with alcoa's results. >> i think you see it's a strong operational performance on the quart, and the transformation is well on track. looking at revenues revenues year on year up 7%. mainly driven by organic growth in the auto as well as arrow sector that's what's happening. when you lift the hood on the profit side you see record performance on the upstream side, again, super good first quarter and you see a very very good performance on the downstream side. >> that's what surprised a lot of people the upstream stuff, jim. all of that capacity's come out. when you refine in brazil and sell in dollars, that actually helps. >> right. strong dollar player. trying to say there were a bunch of articles saying strong dollar could hurt them because people don't know what they're doing. i emphasize, the thing they said about 7% it's becoming like 3m, doing a lot of proprietary product, they're getting rid of high cost commodity operations

which are important. there's increase in demand using 6.5% demand. all the analysts cared about throwaway line how china is overproducing. on page 11 after tax, ordinary income decrease 30% for grp, one different division. this is a great mistake that people do not understand. this company's going to be dramatically transformed by the end of the year, if you're five months rti deal's going to close. the alcoa story is aerospace of which, by the way, nine years production, 23,700 engine needed one of the big of the players in an individual plane and lightweighting for autos remarkable. one line was bad and that was packaging and, by the way, extrapolate constellation brands the soda business isn't good. they did lose coca-cola business. this was a great quarter, and no one cares. >> any play book, earnings

season play book? too early. >> yesterday cummins downgraded by goldman and the truck orders were remarkably down horrible in china. now a lot of that was a pull through from last year's regulation. truck orders down for february that was bad. but the takeaway for europe is europe is -- europe seeing better auto. but we can say we saw german numbers very good. gross domestic product for china, not giving up on it. but i would say nonresidential construction takeaway terrific. the auto race was fantastic. i really saw a lot to like in the economy, in three, big areas, nonresidential construction, auto aerospace. auto and aerospace, a lot of new products. new tire rims worth a billion in sales. a lot to love here. the analysts focused on the fact that aluminum is at the three-week low like aluminum is iron and this company's valai or

cliff's natural. owe contrary. >> thank you. >> i like the quarter. but i'm the only one who liked it. >> glad i'm your friend. >> you're right. >> it's not this -- you've got to close the deal with rti and the first deal was fantastic. you look at engine don't go walking into an engine on a jet but you'll see a lot of alcoa. this is a hexcel play. people have to understand klaus kleinfeld fundamentally changed his company. it doesn't mean six months from now when the titanium deal closes you're looking at aerospace and lightweight play that has other stuff you don't like. >> we'll get cramer's "mad dash" as we count down to the opening bell. one more look at premarket on what's a busy morning. more "squawk on the street" from the nyse straight ahead.

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♪ make me a higher love ♪ bring me a higher love♪ >> front row tickets to that steve win wood concert. >> did you really? >> "take me to a higher love" that's when i was somebodien. >> let's get to the "mad dash." >> okay. disappeared on us. there it is. united continental. >> justice department theme. raising numbers. the blessing of the airlines of having all of these -- all of the mergers here they had -- they did a number today, this is a passenger seat mile number

which indicated that you're going to get much higher revenues, 6% to 7% higher than people thought looking like 1.10 versus 1.45 versus 1.10. this breaks what people thought was going to be the breakdown, when you have oil stabilizing they hedge badly, united continental, you can make a case this is going higher as southwest, which also plus one. i was looking for mine us one. big bears in the airlines have to deal with 6, 7 times earnings factor which means you'll get run over by alcoa-built plane. >> they are generating cash, which is shocking to talk about. >> turn on investment fantastic. >> when it comes to antitrust, i point out our own parent company, comcast time warner cable, a question mark. at&t direct we don't know yet. baker hughes halliburton, i don't know. maybe, maybe not. tobacco, ftc, still haven't heard anything. even others. >> there's a lot of antitrust.

>> too big? no? i think that they got a little nervous, they blessed this and i think, kind of like they got a lot of heat for it. >> a lot to keep an eye on. >> they created a company called constellation brands by giving them madello. rob sands conservative, they gave low guidance. constellation -- >> if you bought the stock when they did the deal? >> yes. >> oh. >> one of the largest sellers of corona and modella in brooklyns. i have 140 tequilas. they bought a good tequila. smart acquisition. i thought they'd buy george clooney's. he's having too much fun. this is not done. those who sell here are going to wish they bought it back. this company, rob sands, cash

machine. the growth here i thought this was an interesting extrapolation. klaus kleinfeld talking about 1% to 2% beer can growth offsetting soda 2% to 3% but not totally. put this together if constellation brands is going mid single digit, okay and klaus kleinfeld's beer can business growing 1 to 2, they're growing three times the size of the rest of the beer market. i rest my case. >> tap, i've got to tell you, they'll pay anything for beer. i come underneath everybody's beer. on my block, i've got lower prices than everybody. >> good to hear. bar san miguel. >> address. >> smith, union. get off the f train. >> all right. you know you can get down here, not on the f but the 1, 2, 3, 4, the 5. opening bell coming after this.

"squawk on the street." live from the financial capital

of the record. opening bell in about 15 seconds. a busy morning as alcoa gives some investors reason for optimism, mixed picture on retail. m&a train continues in technology with linkedin. and there's the opening bell. s&p at the top of the screen. down here, physicians realty trust a health care reit doing the honors. nasdaq, mr. met and the new york mets as 2015 baseball season is under way. he looks good. beefed up a bit. >> our phillies -- >> he's feeling good. though we're .500. >> we won yesterday. >> managed one run yesterday, feeling good. >> we won yesterday. exciting. we're not mentioning l brands enough which is an incredible story. that's less wexner, shooting the lights out. 9%, i was looking for 5.8%. this is thesis that you can craft, the mall is not dead. the mall is not dead.

okay? >> they do see flat to down single digits low single digits, i think, for april -- was it april? let me see. lb, flat to down low. >> they have been known for the conservatism, what you have to do these days. you can't put out a big number and just say it's -- you can't -- you have to go -- you have to shoot low so you can do high. >> you say the mall is not dead? >> it's not dead. >> i want to understand that comment a little bit more because there are plenty of retailers suffering, depends who you talk to in approach to the mall. which runs aren't dead which ones are dead? >> some operators have mastered the way to look at -- to be able to offer product and they tell you, les would say, if they made it more interesting, offer better product, people would still go. sears, jcpenney not looking the way i would like it to.

>> to your point, watching simon try to buy macerich there are good operators. no growth in malls at all. >> right. a shopping center mall if you look at what federal realty's doing, mixed use, apartments fabulous tenants with exciting profits, or if you look at restoration hardware not a mall store but museum dedicated to furniture -- >> what the stores look like. >> companies are doing forward thinking they had to be worried about amazon from day one. all they do is think about amazon. nordstrom, the same way. nordstrom's able to bring in a lot of people. macy's delivered excellent numbers. so, just don't write off the mall. >> pier 1 is a beat by 3 cents at 39 cents. they guide lower than expectations. div hike as well. >> i feel bad. alex smith, he had a big turn and told you when they started doing omni channel, really

terrific. it's finally come. a horrendous stock, tough stock to own. >> pulte, downgraded over jpm to underweight. housing is vulnerable not only going to underperform, but that housing is vulnerable after a strong year so far. >> thanks for nothing. a hold on the stock that was doing well. lennar and toll brothers had been sensational in the housing business. the housing business away from the major home builders has been not so good because of the credit issues. so good operators have done quite well. toll was at 32 33 forever. lennar in the 30s. look at runs that they've had i don't think a guy who sat out the rally in pulte can say a sell without feeling like wow, i didn't do it. by the way i did not mean to jump express scripts when i said walgreens was interested. i'm saying people are saying walgreens would be interested in pbm. i jumped -- >> that would be an enormous

deal. >> express scripts is so big. >> that being said walgreens, i had one phone call during the break, somebody on the call they were very very clear in their intent to pursue m&a. some people are quickly taking a look and wonder diagnose -- i don't believe we've seen the background on the ka ta ma ran -- at least the thought could walgreens try to play there. i've got to look. i haven't had an opportunity to make extensive calls. but to their point of being aggressive on the walgreen call saying we're going to use capital for m&a and buy backs, mib maybe they'll get involved in buying pbm. >> they talked about government regulation they said additional m&a is coming. people are jumping to the conclusion it is express

scripts. rite aid, able to intergrat well. i totally get it. be careful. unlike news organizations you say see a stock up it's 100 bid and it's this weekend. >> look at top s&p gainers, right, express scripts, broadcom marathon right, names -- >> three we mentioned, which is -- >> yeah. >> put them out there. i didn't mean to jump any of them. people, they're all logical, this is what people are saying. it's like you know david, when you speak to people these are ones -- i'm not like pulling them out of the cloth -- >> nobody knows how much work you do better than i do. express would be enormous. >> come back to our story at the top, intel has stopped its talks, ended talks over a week ago to acquire altera. they had been in talks for some time. good due dill gentigence was gone

done. both stocks down. intel moved up on reports of potential deal and altera skyrocketed on those reports, not that bad. altera shares had been down 8% in the early going. you can see down 6.5% now. intel paring its early losses at opening bell. >> do they think people will come back in. >> a question is let's see what altera's earnings on because one would expect if you're willing to reject a price in the low 50s, you must be doing fairly well. you clearly think -- that multiple, jim, that's a low 20s multiple to ebitda that we're talking about. when anybody's willing to pay over 20 year of ebitda for your business, you've got pay attention. >> if intel could be in any communications, people would get excited about intel again. they're viewed as pc company. you know broadcom's got communications. broadcom will be what you hear next. that's not far-fetched. >> interested in doing deals and

not just cost synergies, that would not have been the key. it would have been about growth. altera's a faster grower than intel. >> higher value added. frankly, when you saw what happened to intel just in terms of the talks, people -- got to feel like i've got to do a deal. guys out saying that the next quarter's the bottoming in margins. i do not see that to be the case. >> for intel? >> i don't believe that. >> dunkin' almost at 52-week high. credit suisse looking at improved income scenarios for lower income americans along with pricing. >> i like the term -- dunkin', the fifth time maybe fifth time's charm -- technicians are telling me if it can break out, go to 52 53. the language they used was great. i'm going to adopt it. improving macro for low-end consumers which is saying gasoline doesn't cost as much. nice. >> the possibility of wages growing at low wage retail

services jobs. that's where the wages are going up fastest. >> right. i think that starbucks has been amazing. starbucks split today, so people will sell half of the stock they get in a lot of cases keep the rest. you get a churn going. starbucks, i think numbers very good. coffee's come down in price, not that that should matter. more levered dunkin' than starbucks. a part of the actual cost -- i like the way retail's acting here. it makes a lot of sense it's doing well because gasoline's not going up. that's that scare that oil went up very big, now we realized it's not going to happen. constellation is up too, thank you. that was stupid. rob sands is bankable. the market does dumb things because it looks at headlines and doesn't understand there's a tradition of certain guys saying things on a headline and when you get to the company, bingo. >> i did want to come to twitter, which is down today. your comments yesterday, of

course about expectation, nothing's going on. rumors involving twitter. i can tell you, there are no talks going on for twitter to be acquired, as far as i'm aware and reporting has indicated. >> thank you. >> however there is an expectation we'll get an announcement from twitter, unclear what that is perhaps some sort of joint venture. got to move into the realm of speculation here. so let's see. i don't know but i can tell you that to the points -- to some of the rumors out there and reporting as well what was it? the daily -- >> telegraph and "usa today" a story on the stories. >> contacted goldman. you've taught me you can contact a banker it don't mean you're in talks. >> there was not truth to any talks going on. >> no truth? >> of an acquisition-type. however, there is -- i do expect we may see something of an announcement that could be significant involving some sort -- i am being vague here i

don't know. we'll see if we get something but i did want to share. >> ibm mentioned twitter twice on the call which i thought was curious. i think they were trying to affiliate with something that's viewed as hot. >> right. >> i think twitter's going higher, i think that twitter, those who use it the user experience has improved dramatically in the last three, four months. i thu thatink that's worth noting. i had been somewhat critical. >> i hadn't noticed. >> it gets lost. >> a couple zyn. ga. >> too early to buy zynga. they have a 1.50. pink cuss is back. it's like gandhi ii the movie. >> it's the lowest since early march. >> zynga's a punch line. what can i say? that whole era. look at this mylan labs. i've got -- >> we'll talk about it. no. >> in a minute.

>> surprise? >> give me a chance to catch my breath. look at my notes. >> intel thing was a breathtaking thing. >> way to start the show. good way to start the show. >> dow's up 38 points. pisani's on the floor. good morning. modest gains, health care gaining, energy great. nice turnaround in oil today. you know interest rate sensitive, utilities, telecom are lagging a bit. real action's in china. talking about the strange action going on. look at the hang seng seven year high, 2.7. up 8% this month. mainland chinese investors getting astute. piling money, taking money out of real estate putting it into mainland china, talking shanghai. they seem to be pouring money out of shanghai and sh. nechlt zhen. they're getting sophisticated. a lot of strange traffic going on between the mainland and hong

kong kong. that new connect between shanghai and hong kong have gotten very active. nice rally in europe as well. look at greece they've got -- greece did make the payment to the imf. portugal up 31% this year. 31% portugal's up. france got to be up 20%. nice rallies across the board. you mentioned retail sales. a couple of things here l brands margins improved one great standout. victoria's secret bath and body works strong. kato and stein mart, double digit comps. they've got a presence in the south. the weather was warm somewhere that may have been an issue. their numbers above everybody else's. costco you know gasoline's a bigger thing, negative 2% comp largely gas, take gas out, positive comp. the first negative comp since august 2009. buckle, zumiez 5.5% below

expectation. buckle negative. aeropostale trying to change things around. teen retailers struggling. for march retail sales a dis disappointment. we had an easter shift. march should be front-end loaded more with the easter shift. we're not seeing it right now. you mentioned bed, bath body work, you mentioned guidance. stock is down. outlook for 2015 only talking 2% to 3% comparable store gain and that's the problem. overall, earnings were in line. constellation, you mentioned constellation, what impresses me, we're at historic high for constellation. look the beer sales. mexican beer sales are on fire 11%. what? that is way ahead of the industry expectation -- standards. they should be delighted. put up constellation. we're at historic high here 120. i'll check that. i believe historic high for them. an interesting note this morning, talking about the earnings recession.

they are noting with the price of the s&p right now, it's expecting 9.6% earnings growth. that's what the pricing. we know we're not going to get that. put together optimistic earnings growth with economic uncertainty, downside risk. what happens here is when you get that divergence usually it's pricing that has to come down not necessarily the earnings going up because it's slow moving around the earnings shift. pricing moves a lot faster. david, back to you. >> thanks very much bob pisani. yesterday 11:30, unexpectedly, it's fair to say we got a proposal from mylan to acquire perrigo for $29 billion roughly or $205 a share, in cash and stock, although the composition to upset offer was not made clear, nor were ratios of anything of that sort. expectations given mylan's size and the size of perrigo, which would almost be identical, there would be a good amount of stock

that would need to be used. mylan, for its part given the abbott labs transaction it doid in to invert itself took it down put more debt on the balance sheet and fund a good portion or let's call it half and half lack of a better term. i don't know. what is most interesting trying to answer the question as to why now. clearly, there have been talks between the two companies. this is made clear in the letter that accompanied this proposal and i use that word intentionally, proposal, not offer, dealing with irish takeover law given where perrigo is based or has its headquarters. headquarters. because it also pays a lower tax rate as a result of its inversion. the question as to why, though not in a position to answer exactly at this point. i will tell you, people who know both companies well indicate there have been conversations, businesses line up well as you might have expected.

you know perrigo has the royalty from the acquisition of alan nutrition, the store brands that many people know. you buy in walgreens, it's the walgreen store brans and the likes competes against branded products. specialty pharma deals are being rewarded by shareholders. take a look at mylan which moved up sharply. why? the continued question why are they trying to avoid something? trying to avoid the clutches of teva pharmaceuticals? a question asked a lot yesterday. i don't know the answer. teva had a presentation yesterday at barclays somebody ran generic business didn't give an indication one way or another. there's a coalescing of thought around the idea teva might want to do something but thinks mylan is expensive. you have to ask the question that they really wanted to buy mylan, why wouldn't they have done it before mylan inverted, when you needed a vote to do so

and you could have potentially had that vote be the proxy, if you will on whether or not to sell to teva and was smaller then. now added $8 billion in market cap with the deal. parago's trading below the offer price. perryigo perrigo, in talking to people familiar with the situation, did not expect this to show up at their doorstep this proposal. it was unexpected. they're going to take their time. don't expect we'll get some sort of resolution here in any near term. the indications i'm getting, they're going to take time and reviewing the offer. they have morgan stanley working at perrigo. so we'll see what they choose to do and what mylan chooses to do and what teva chooses to do. but nobody argues what the strategic logic of potential deal. when you think about a teva/mylan, israel and west virginia getting together -- no offense to either one please -- but culturally that could be

interesting. >> read the book a novel came out in '70s, texas/israeli war. >> no. >> unbelievably bad. i do think -- >> my brother-in-law gave it to me. i do think that the fact that you mentioned the key words, specialty pharma. when this thing's over there's going to be like three specialty pharma companies. now watch this horizon pharma. they want to be specialty. that's that hybrid model that people like one proprietary drug growing, they've got generics. i happen to always like perrigo. when you buy pepto bis mal i love to chug it i'll buy the store label because it looks exactly the same. >> with the blog activity on pharma m&a is any indication, they're all over the map today. >> final word from me on this i didn't go into the intricacies of dutch governance but it's a netherlands based company, mylan, it does have a lot of

protections preventing anybody from making a hostile offer but it doesn't make anyone from making a bid. >> it's hard enough to remember what happens going on in m&a in united states in terms of law. >> big interview, the managing directinger of the imf, christine lagarde. hear what she tells sara eisen about the greek bailout situation and of course their forecast for growth in both developing and emerging markets. dow's up 31 points. back in a moment. ♪ ♪ the pursuit of healthier. it begins from the second we're born.

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you may have seen crude down of% yesterday. stockpiles now 482 million barrels of oil, 13 straight weeks of build. unbelievable, though getting back today, 51.15. "stop trading" with jim in a moment.

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trading." >> i know i may sound like a broken record, and i mean to because under armour today it's piper, after meeting with finished line saying extraordinary growth. i say kevin plank is out to win. this company has got the wind at its back all over the globe. by the way, curry, turned out to be a good guy to ling with a lethal three-point shot this is

shoes, clothing china. this is greatness under armour. >> all-time high going back to 2005 ipo. >> think tried to short kevin plank. one of the most dangerous things in the world. walk off the plank if you're short kevin plank. >> all right. what's on "mad" tonight. >> talking about consolidation, put together maybe the best real estate investment trust growth story out there other than simon properties and federal realty wow. i think deb is fantasticen this is a great deal. >> they did that deal earlier this week. >> right. that was a deal by the way, announced, came out, it was good, stock came up. the way it should be. >> mylan is up more than perrigo in two days. >> wreaking of something. >> that's the teva question. which, by the way, not by any means guaranteed teva's going to make a move. >> what a chance to buy mylan.

>> could have done it previously much cheaper, and had a vote in front of them. >> i like the ceo of perrigo. he's very self-efacing. he did not talk the stock up on "mad money" a month ago. i was saying, cheer up, your quarter's good. i was trying to get him excited about the stock, but he's -- he's more calm than i am the way i put it. >> see you tonight, "mad money" 6:00 p.m. sara eisen's live interview with christine lagarde of the imf as the dow crosses into red. back in a minute. i care deeply about the gulf. i grew up in louisiana. i went to school here. i've been with bp ever since. today, i lead a team that sets our global safety standards. after the spill we made two commitments. to help the gulf recover and become a safer company. we've worked hard to honor both. bp has spent nearly 28 billion dollars so far to help the gulf economy and environment.

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♪ welcome back. good morning, welcome to "squawk on the street" i'm carl quintanilla with simon hobbs, david faber at post 9 at the new york stock exchange. sara eisen live in washington where she'll be speaking to christine lagarde of the imf later on. we'll check in with sara in just a few moments. first, the markets have given up early gains, dow's down two points -- s&p up fractionally. oil's the story, along with retail sales and m&a, which continues to chug along. let's get over to jim youriuorio.

>> we got the wholesale sales and inventories numbers and they were disappointing. the sales number came out at down .2. expecting plus .3. the inventories numbers came up at plus .3 expecting plus .2. what we wanted down here was to see a decent sales number compared to the inventories number to try to convince yourself that we're chewing up inventories and that was going to cause a need for great he production. we didn't see that. stocks traded up on this maybe because a tightening is less likely. ten-year yields 1.91 where it was when it started. simon. >> thank you for that. so 17,906 on the dow. european equities on the other hand climbing today, after the imf, greece made its $500 million repayment to the imf. oil regaining some of its losses after that washout. wti back above $50 a barrel. joining us now at post 9, citi's

chief economist. we bring in scott wren senior global equity strategy at wells fargo investment institute. you think the market can rise 8% with two interest rate increases? >> i think it can, simon. you know really the markets prepped for an increase hike or two. i think there's a little bit of concern over when the initial one's going to be. i lead towards september, certainly not june. but also i think that what's going to happen is consensus expectations for earnings not only this quarter, but i think for the entire year, are too low. we'll see decent economic growth, modest and we're also going to see some modest earnings gains that are better than what many people expect. >> was this your note this morning? we think the media will cover this earnings season as though the skies falling in and point out all negative possibilities that may accompany an earnings recession, don't buy it, is that you?

>> that is me. i mean do not buy that. i mean you have a job to do. there's a lot of things to talk about during the day. but the sky is not falling. we may stumble here a little bit in earnings, you know, weather, the dock strike the dollar. but i think when you look ahead, remember, earnings are a lagging indicator. that's what happened in the past. we want to look ahead. that modest growth modest inflation environment, is still well intact. we're going to see that through the rest of the year. >> good morning, an honor to have you. >> a flash. >> a former member of the bank of england monetary policy committee, now head of citi. you find the conversation tedious what the fed might do. but is our friend scott right here, there will be two rate hikes by the end of the year. >> everything's possible. everything's likely. no, i think recovery in the u.s. is sufficiently soggy that i think the odds on one increase, at the very end of december, are

about as far as i go with a material risk of an increase until next year. it depends on whether the weakness in q1 is frosty the snowman again like last year last year we didn't make up for it we got 2.3 instead of three. we won't see an increase until the end of the year at the early earliest. >> we must keep rates until the end the year? >> not emergency situation. >> not an emergency molnetary poll. >> i smaller balance sheet, negative rates. simply in an economy but still disinflationary pressures but negative output gap left so we need stimulus. we don't get it from the fiscal boys monetary boys have to do it. the only way to do it at the moment, keeping rates low.

>> scott pointed out, it's our job to carry headlines of the day, today one of the headlines that greece has made its payment to the imf. and will interview christine lagarde later on. important questions particularly if you're european. are they important questions for american investors. >> if there is a mishap and there's grexit it will cause a flight into safety in the u.s. dollar, which would cost the u.s. stock market to tank, the dollar to go through the roof and further, downwardly depress long yields. bad news for the u.s. economy. it's unlikely fortunately, although the europeans, both sides of the negotiations the creditors and the greeks giving it every effort to make sure there's isn't a mishap. they're risking unnecessary failure of negotiations by grandstanding on both sides. >> i'm sure you have a great deal of respect for jamie dimon at jpmorgan.

what did you make of his shareholders letter in which he looked at movements we've had in the bond market and said be very careful here. we may have a major structural problem with the markets that they cannot handle financial crisis. >> well, we've never been able to handle financial crisis well. >> we have less liquidity, his argument, this time around. 40-basis point move in yields in a short space of time. >> we will see. markets are meant to be shock absorbers and movement in prices are the right response to news. >> scott, more tactically, it's telling the only sectors in the green at this moment at least are energy and health care. arguably the two sectors m&a speculation is running at its most torrid pace. that is healthy? >> you know carl i tell you, when m&a froth really gets going, typically the markets hit higher valuations. i worry about it more than

certainly biotech, to me looks look it's certainly run hard over a long period of time. and that's you know responsible for probably 80%, 85% of the outperformance of the health care sector. right now the m&a situation, it's not worrying me too much only because i think valuations there's a lot of talk valuations are stretched, stocks are expensive. not based on the work we're doing. we're slightly below the 30-year median for the s&p 500. valuations are not stretched. >> on that point, we'll leave it. scott, willhem, thank you. sara is in washington. wow want to raise the kurt on this one. >> good morning, carl simon, david. an important day for the imf, the day that a very critical greek payment was due to its creditor. we know it's come in there's a question about what happens next. it was a pretty last-minute

call, and there's another big payment, almost double the size of this one, due from greece to the imf in may. we'll ask about that. keep in mind the managing director of the fund christine lagarde did just have a meeting with the greek finance minister here in d.c. on sunday. we'll find out about what they talked about, how those greek reforms are coming about, whether they're go to be able to make key deadlines. she's here today at the atlantic council to give traditional connect-off speech to the imf world bank meeting, that is next week. we'll bring you headlines from that speech and get a chance to talk to her about the outlook, what's changed, is it really all of the winter weather that's affecting the united states? and, by the way, what is the concern and what is going to happen when the federal reserve raises interest rates? a unique perspective from the imf on the impact of global markets and the global economy. much more coming from here the atlantic council in washington,

d.c., with the manager director of the imf and that's in the 11:00 hour of "squawk alley." >> we can't wait for that. sara eisen in washington. early easter hunting look at costco's march sales number. helping things over at l brands which posted a 6% rise for the month. why is it good for one, bad for another? we'll talk about that with the dow almost perfectly flat, in a moment.ou work for? your boss? yourself? your family? our financial advisors are free to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird.

♪

♪ costco reporting this morning that comp sales, sales that stores open for more than a year, dropped larger than expected 2% in march, hurt by the timing of earlier easter. combine with the negative effects of the harsh winter weather, west coast port slowdown. could we see more headwinds? joining us at post 9, the managing director of specialty retail analyst atstearn. more red than green, people considering march a one-off given the weather. >> people expecting march to be a good event. look at limited brands we cover, comp phenomenal. high single digit comp.

doing it with inventories down 10% per square foot. comps are going in the right direction. the stock's going in the right direction. up 60% since august on last year. so, that's really what you want 30 see, momentum on the top line with well-managed inventories and if you do that you have earnings visibility with retailers. limited brands multiple all-time high people want visibility. >> what about everybody else? >> everybody else is more volatile. look at handbag names, michael kors and kate spade, more volatility, what happens go on in that space? seeing stability and a lot of investor interest is the off-pricers the west coast port disruption lower gas prices burlington coat factory, ross stores, those stocks making new highs, too, those are stocks people feel comfortable. to your point, no euro no hong kong protests to worry about. >> you're able to separate all of those sort of temporary

dynamics from what's really go on in the consumer's mind and you think it's positive. >> they don't really know what they're doing. we looked at holiday, it was okay, it was good not great. we had a slowdown in february. things are starting to bounce back in march. easter shift is hipping everyone, better weather for the apparel categories. april will be ugly because the easter shift reverses but look forward, it's all about inventory management and promotional activity. when we do our checks we're the leanest level we've seen in 2 1/2 years. companies are doing what they can do to support their own gross margins. >> does consumer spending take off in a big way? is that possible? what is the major break on that given all of the talk about gasoline prices? >> on the low end, you're see a step change here. not only is the lower energy prices benefiting them there, but if you listen to some retailers like target t.j.x, like a mcdonald's, the wage increases on the lower end -- >> at lower end?

>> that's helping their spending. they're going to spend dollars in the areas like off-price retailers, low-income retailers. that part of the economy, that part of spending i think you see a step change. for everyone else steady as she goes. >> inventories relatively low. bed bath suggest promotional pressure is going to continue, right? it's not like it's come off completely. >> no. it's company by company. again, back to michael kors we think they continue to be promotional. they have -- their margins, 30%, those have risk to the downside. the gap, which will report comps later today, a good comp because of the easter shift and weather. but their inventories, though lean seeing more mark downs. specific channel by channel. >> how sensitive is the consumer to interest rate rises at this low level? >> it's tough to say. there's no real -- we've tried to back test it look at correlations. it all over the place when you look at it. it's a difficult question to

answer especially consumers on the low end, burlington ross. you have the super high-end. a lot of vashlt. >> the level of the stock market? >> the level of the stock market is a good thing for the high-end retailers, it gives more disposable income to those, you know, go in. >> having had gains, phenomenal gains over two, three years in the stock market are you in cumulatively then or do you need to see further rises. >> i think where we are, it's all beneficial. and i think when you talk about that kind of impact that's more of the high end. for us it would be tiffany in terms of consumer spending. >> finally, i'm thinking of retailers that rely heavily overseas right? look -- chart nike versus ralph lauren. it's like a "v" go in absolute different directions but a lot of the same issues. >> we don't cover them. the two-week cover high fx exposure fos and tiffany, both going in the wrong direction.

fossil transaction risk 35% of the sales. for tiffany, translation and the transaction risk -- >> u.s. >> tourism. >> 25% is tourism. they're getting hit on both end than creates a difficult dynamic a company can't do much. >> good to see you. thanks for coming in. next it's been one year exactly since la quinta's ipo and during that time the stock's up 35% from its ipo price. what i their secret? what happens now as blackstone exits? the ceo will join us after that.

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it's never been done before simply becomes consider it solved. emerson. investors in hilton are having a good week. analysts refusing to rule out a report having paid 32 times earnings for the waldorf, chinese insurers might buy

blackstone's remaining 5% controlling -- 55% stake. one of the main reasons every analyst entertains the idea the private equity giant blackstone halted offering of hilton in the first quarter, despite the fact its trades at all-time high and despite offloading below 50% would allow hilton to enter the s&p. joining us now, separately is another recent blackstone lodging projecttege celebrating the first anniversary here at nyse, la quinta's ceo, wayne goldberg. >> good morning. >> welcome back one year on. >> it's surreal it's been one year. >> you priced at 17 trade at 23. >> it's consistently executing, saying what you're going to do and delivering results you

commit to. >> you're the fastest-growing brand in the fastest-growing area of the lodging sector, select service, which one analyst described to me as a place where you have to carry your own bags to your room. why is it doing so well in the economy? >> well, first of all, the sector continues to be the sector where the last number of years the growth has been in our industry and the reason for that is the investors, the franchise partners and folks investing, realize that's where the returns and the return on their investment is. >> why? >> why should it be there nowhere else. >> we're able to deliver returns. we're more robust through cycles. there's less volatility through the cycles. and it's also where the consumers have migrated because consumers have realized that's where the value is. >> interesting. you are quite anxious blackstone sells down its stake. they sold 600 million during the first quarter. you talk about free cash flow and paying down debt.

where do we get to by the end of the year. >> focused on continuing to delever our business. we will be below four times this year, in 2014 we paid down $205 million of our debt $195 million of which voluntary. we are on a path to continue to do so and get below four times. and there's significant reasons to get below four times. first of all, we get below 4 1/2 types, which we're close, we get a reduction in interest rate which is meaningful to investors and shareholders. below four times we have a cash sweep that would go into place at beginning of the 2016 that we will avoid. it gives us flexibility, ability to determine what to do with that cash flow. >> that was a technical argument. if i'm trying to keep up with what's going on here what is your basic message to me why i should invest for the next two years given that the lodging cycle may turn? >> we have been the fastest

growing, select serve brand against those that we compete the most directly with for the last ten years weep believe, based where we are we are half of the size of our largest competitors, we believe that we continue to be the brand, that has the ability to continue to be the fastest growing. we were again in 2014. again, we're not in 35% of smith travel researches 628 defined market tracks today. >> you're in texas. >> we are. >> 30% of hotels are in texas. how is the -- clearly the slowing rig count, if nothing else affecting you? >> first of all i like to say we -- 70% of the properties outside the state of texas. we have a handful of properties in markets that are impacted, we have accounted for those, forecasted and expected those to be impacted. those properties however, in many cases, have been in our system for many years, they will continue to do well. they'll continue to produce positive cash flow and be profitable. they just won't perform to the level that they had the last

couple of years. >> how much of the pipeline's in texas. >> over70% of our pipeline outside of the state of texas and feel very good lower gas prices is a tail wend. if you think about the segment, retail, when consumers have more disposable income retail does better. some of our biggest customers are retail. retail consumers do better. all hotels have additional demand generators, leisure is a big market and does better. there's a lot of demand generators, each in oil markets for hotels. we see the outlook very positive. >> when you read big macro think pieces about the death of the texas economy, what do you say? >> i remember when $150 barrel of oil was going to destroy the hotel business didn't happen. $45, $50 a barrel of oil is going to destroy the hotel

business i don't believe it's going to happen. plenty of demand generators for our business based where we're located and distributed. we'll very fee good. we have improving economy, outlook for travel international and domestic. international, where we have exposure mexico central south america, very positive. we see consumer confidence on the rise. demand is strong. we continue to see the ability to have octobercupantcy from you're a good advocate. why is there one brand? >> a single stand alone brand is a negative. what i said to franchise partners and vendors at our conference i challenge people when i hear that show me a metric, one location one place where that has a negative. i argue that it's a positive. we're singularly focused. we've grown against all of those competitors that are multiple tiered, have multiple brands we get 48% of members from loyalty

program. our advertising awareness is at an all-time high tie ford number one in our segment. we have -- all of the metrics would say that it doesn't hurt us, it actually helps us and i challenge people to point to an area where it is a negative. >> congratulations, one year at the new york stock exchange. >> thank you. >> wayne goldberg joining us, la quinta quinta's ceo. >> after falling 7% yesterday, oil bouncing back. where prices may be heading next, when we return. seven out of ten power outages in the us are caused by weather. but utilities can now predict where the power will go out, within a few city blocks. working with ibm they're combining micro weather forecasts with detailed data from local sensors. to predict where outages are likely to occur. and send crews exactly where they're needed,

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cnbc news update at this hour. iranian president says iran will not sign a final nuclear deal without a provision lifting all economic sanctions on the first day of the agreement. he made the comment during a speech marking iran's national nuclear technology day. defense secretary ash carter arriving in south korea as he continue his asian tour. he'll meet with u.s. soldiers in the country and tour u.s. military facilities as well. the pentagon saying he will reiterate the strong commitment the u.s. has to korea. apple sees demand for its new smartwatch exceeding supply when it goes on sale april 24th. the watch and only be preordered online starting tomorrow. and voluntarily recalling 30

toushgs ,000 cases humus. the routine test tested positive for listeria. there's no evidence any has gotten sick from the product. back to you. welcome back to "squawk on the street." i'm jackie deangelis. the department of energy out with weekly natural gas storage report. an injection of 15 billion cubic feet, it is sending prices lower. traders are saying that they expected to see or start to see builds. we're getting into the in between period you don't need heat air-conditioning demands starts to drop off. last year at this time and with the five-year average, we've seen a couple of withdrawals because of colder weather. right now seeing builds definitely going to send gas prices down. traders looking at 2.25 as potential target unless mother

nature throws us a curveball. reprising a story at 9:00 a.m. this morning intel has ended talks to acquire chipmaker altera, after a number of months of negotiations between the two companies, significant due diligence on the part of intel. they could not agree on an appropriate price. but intel, at least in the view of altera was willing to pay. as i reported earlier, sources familiar with the situation indicate intel had offered a price in the low 50s, all-cash deal, may have even been as high as $54 a share. however, it was rebuffed. and it has not had any discussions with altera having walked away from discussions over a week ago, according to people familiar with the situation. the talks themselves first reported on by the "wall street journal" march 27th in which it said it was in advanced talks to buy altera. that sent shares of altera up and intel up on our report of

course, this morning both stocks came down. as you see now, altera's made up a good amount of ground. intel back to being positive on the day. the deal itself in the low 50s, would have been at least $15 billion, $16 billion in cash for intel, marking the largest deal it would have consummated, again, if it had been able to get altera to agree to the price. but it does indicate according to my sources, a willingness on the part of intel, and its relatively new management to entertain large acquisitions. this would not have been a deal about cost savings as much as it would have been a deal about growth. altera is a faster grower. reporting earnings in a couple of weeks, perhaps we'll get a sign to the health of the business. perhaps more sign why it was willing to reject an offer that valued over 20 times ebitda. low 20 multiple on ebitda. that being said that moved back up, and share of altera perhaps, investors expected to pressure the company to sit back

down with intel. no signs that i was able to garner that intel would be willing to do that though one has to imagine, given its willingness to pay, perhaps as much as $54, it would be willing to, if ailltera were to face some insurrection. that has to be the reason why the stock has come back so sharply, having been down originally 8%. >> the whole thing feeds the argument we hear again and again, we were sitting here when they warned on revenue, now when the market or were for a big deal average lap global companies struckling for growth and looking to m&a as the answer? >> no doubt about it. many of the things have been in place for a long time megastrong, m&a marketser the response of the acquirer stock, in this case intel did go up but your point's a good one. go to m&a as one in the play book of trying to get growth. many cases we of course see horizontal mergers or things

that are driven by cost savings to get growth. but in this case, looking for revenue growth that altera potentially would have bought to them. they appear to be willing to do so but not enough for altera to say yes. >> stubborn. sara eisen sits down with the imf's christine lagarde. sara? >> well we have a lot of topics to get to with her. top of mind of course today, that critical deadline for greece to pay the imf. its payment, we've heard it's done so, but a lot of big payments coming down the pike. we'll ask her whether she has any assurances from greece that they will come through. we'll talk about the global economy. we'll talk about the u.s. the federal reserve, and maybe even the fact that german bund yields for eight years went negative today. how crazy is that? all when "squawk on the street" comes right back.

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as we roll into earnings season, what stocks are likely to move the most on the earnings? gee to tradingnation.cnbc.com or check out the live version on the 2:00 eastern time hour of "power lunch." more "squawk on the street" after this. so open an account with schwab. and when a 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. ♪ ♪ [ male announcer ] some come here to build something smarter. ♪ ♪ some come here to build something stronger. others come to build something faster... something safer...

something greener. something the whole world can share. people come to boeing to do many different things. but it's always about the very thing we do best. ♪ ♪ ♪ markets slightly negative overall. energy sector rebounding today. dom chu has more at hq. >> good morning. energy standing out as top performing sector. today's oil prices make their way higher at least wti crude, after yesterday's sell-off. up a percent on the crude prices. among leading stocks in the s&p 500 for the energy sector

offshore and drilling-type companies like inensco, halliburton, up there as well exploration production represented by flu field, all stocks up by 2% or more. a nice smaller pop but still energy in focus for many investors. >> energy and biotech, dom, that's for sure. mylan and perrigo, both higher one day after mylan proposed an off to acquire perrigo for $205. barbara ryan was on the phone with us as that news broke yesterday. you're here on set this morning. good to see you back. >> thank you for having me. >> it's like pictures of the food chain, you're not sure which fish is going to eat which one first. >> used to call that the pac-man strategy years ago. >> what's the play book here? >> what's the play book here? i think it's everything's up for grabs. as we were talking about, david was talking earlier this morning, about teva i think certainly it is like musical chairs or a land grab companies

feeling that if we don't get into the game now, what's left to do? these companies, we were talking earlier offset if you look at the market caps of these companies today and compare them to four, five years ago, unbelievable. one deal after another, for multiple years look the perrigo, even mylan, and the size of these companies, through the consolidation of the business -- at some point these companies just are too big to acquire -- teva -- >> actavis. >> right. exactly. that's a company that teva probably looks at and goes my god we could have done that ages ago, what were we thinking in. >> on the action this morning, i'm interested to get your opinion, mylan shares up another 5%. it's up more than perrigo, seeking to acquire in part because of the idea teva will come in. does that comebination make sense? culturally two very different companies, or is it possible

that teva would consider a perrigo, does that combination, would they consider coming in over the top there? >> i think there's a couple of things at play. one the market's pleased and impressed that mylan is being as aggressive as it is to go after perrigo given what that means for their growth outlook and stature in the industry down the road. i think that's one thing. certainly the second is, you know, accretion that would come from this financials. and lastly that mylan, too, is in play vis-a-vis teva. i would say that teva's a cultural challenge almost for anyone and i don't mean that in a malicious way but the challenges that teva and its senior management and board have had, you know are not new, that's been going on for quite some time. any company would have to deal with that. i think, too, the market probably you know has been wanting teva to do something

substantial for yitquite some time. if not now, when and what? >> what about the roll of pfizer? there some speculation on trading blogs it might get involved. mylan is -- >> it's a really good question. here's my point of view on that and this is just my point of view. people have talked about pfizer splitting into three pieces right? my point of view was three years ago that wasn't possible. now the company has positioned itself so that's possible. when they bought his para, i took that as a tell they will likely split the established products mature brands from innovative core. you follow that logic further, right, established products business, right, would make total sense to my mylan, perrigo, something else and think about the fact that pfizer has $45 billion outside of the united states, that they want to

use, right, you put all of those things together absolutely pfizer could be -- >> you think it makes more sense than teva/mylan? >> yeah i mean, teva might think that that's not the case but i think from a market perspective, yeah, i think that would be a better fit. >> investor perspective, to buy one of the big behemoths? you'll get a pop there in. >> absolutely. if pfizer wants to split, right, there's two things that have to happen. one is they have to have a pipeline in the innovative core in order to get paid. and they can get a multiple like a big biotech, they're never going to get that as pfizer. people view it a financial story. these companies are get larger. to be a global participant and a major top player, that business would have to do an acquisition. >> i want to caution people mylan has significant anti-takeover defenses as a result of being incorporated in

the netherlands. >> i learned a new word from you today. >> makes it impossible to take it over from a hostile perspective. in terms of overall trend, you've been around a long time -- >> don't rub it in. >> so have i. >> you've seen the cycles. where are we in this one? >> you know, i think that these things, as you know tend to go in waves. and one begets the other. you know in order to remain competitive, these companies are going to have to continue to consulate and roll up the industry. i think it will continue for quite some time. >> interesting to see pfizer move on the things you're saying now, that's how active it is. good to see you back. >> thank you for having me. i hope so. >> enjoy it. >> in the meantime dollar index is edging high after yesterday's fomc meeting showed a fed divided. then historically on when it raise rates. is a june hike in the cards? jpmorgan's chief u.s. economist and joins us now.

>> good morning. >> i would have thought yesterday's statement was kind of a little bit old given we've had a poor payroll figure since then what happen are you telling clients? >> yeah, i think two things to keep in mind. one it is old, we've had some data since then that's been soft, most notably the payroll data. second i thought the reference that there were several participants who still wanted a july hike -- sorry, june hike that we also knew from the march it rate forecast there's a core of hawks who wanted june or something earlier. i didn't think we learned that much new. june, to me still seems unlikely unless we get blowout data between now and then. >> what does this mean for the markets. how sensitive do you think we are? with the signaling going on clearly nervousness, clear le they want to telegraph to be as dovish as they possibly company are we like a stretch elastic

band waiting to ping as far as marks are concerned or will we take them in its stride. >> a dovish message over the last few weeks. i thought the comment tear yesterday was dovish. it seems to me a, we're still pretty primed i think for a september lift up. and they're trying to tell us in addition to that they're going to be very gentle in raising rates. whether that forecast actually pans out i think, is another matter. i think you're right the market is sensitive here to the fed communications. you know the fed, i think, clearly, is trying to massage the messagen one of the things that stood out yesterday in the minutes the fed is going to be sensitive to the dollar and and they're going to condition any rate hike on the dollar stabilizing. i think there's a back and forth between the markets and the fed, and the fed is clearly i think trying to influence the currency marks in particular. >> mike we had larry summers on "squawk box" earlier this morning. there's been some back and forth between the two of them on the blogs. his point today was, he calls it

secular stagnation, this idea developed economists ten years out, hardly anybody sees 2%. call it what you will nobody's looking for growth the way we did structurally before the crisis. do you agree? >> i agree. i think the fed's, you know you have been seeing that in their forecast. a couple years ago looking for 4% numbers. now looking for low to mid 2s. everybody's ratcheting down their expectation for long-term growth. so i do share the broad sentiment there that demographic and productivity trends are leading toward slower than -- slower growth than we've come to be used to. >> what does that mean for asset classes? what winds in that environment, classically i guess it's fixed income. but we're already up there. >> right. so, i think that was the big story of last year was that fixed income markets it seem like they realized a trend

growth was lower and started pricing in a lower-term funds rate. >> sure. >> a lot of that may be behind us. you know where things go from here i think, is obviously anyone's guess. >> there is not a clear -- let me ask the question is there a clear asset -- is there a clear asset class that does well in the world that you're painting as a picture? >> not really. i mean in the long run, stronger productivity growth is not only good for the economy, it's good for assets. so having lower productivity and growth is on net, you know it's something that you have to revise your view of what asset classes are going to deliver on a sustainable basis going forward. >> good to see you, mike. jpmorgan's chief economist. >> coming up new high valuation for sea geek. higher ticket prices for the masters and of course for baseball season as that kicks off for 2015. dow's down 49 points. back in a moment.

. oil prices rebounding today after yesterday's sharp

sell-off. of course that $70 billion deal between royal dutch shell and bg made news. joining us by phone is matthew beasley head of global equities at henderson global investors. good morning to you. >> good morning. >> i want to read you something out of the ft comment section. he says the long dearth of big transactions in flrg is over and every company in the sector will be nervously considering whether they should kill or risk being killed. is that fair? >> yeah. i do think yesterday's transaction between bg and shell is a special situation. you had a willing buyer in shell who had been looking at these assets for some time knowing they were a good strategic fit for their business and a very willing seller in bg. with some change of the management team operational changes ahead of them but more cautious view about operating they were facing that you had a willing buyer and seller. i don't think it means we're about to have a wave of m&a sweeping across the energy sector. >> really? today another paper makes the

argument back in '98 bp does am maco exxon not will be to be outdone does mobile. you don't see a repeat of that dynamic. >> somebody like exxon mobil has a strong balance sheet, where they are absent might be willing to contemplate deals. bp as one of the large major has a lot on its plate dealing with the ramifications with the issue in the gulf of mexico as well as the challenges in russia it's not necessarily clear to me that they will be keen to follow where shell is leading. then i look across the north american sector i see a sector where there is not a lot of costs really to take out, so much of the production is outsourced to the oil services companies, there you might see following what we see with baker hughes and halliburton but i'm not sure many asset rich organizations are willing to sell out, sell those assets. what could be typical lows for

their sector. >> you say you've run a slide rule over halliburton post bhi. had that deal made sense in retrospect? >> i think like shell/bg deal announced yesterday it's hard to judge if these deals are going to make sense until we get two or three years out, a sense of what a normalized oil price is. i find it fascinating as an investor when i look across most analyst models and expectations they have for normalizing $80 oil looking two or three years out, look at the huge disconnect between that and where the futures strip currently is pricing 65 or $60 oil out to 2017, 2018 and i think something has got to give. i think it's very hard for us to judge the merits strategic merits of the deals today, when the financial returns of these deals is so uncertain and dependent on where the oil price ends up looking two or three years. >> matthew, in the meantime for people who want to follow the money for this year what names would you put on the table as

potential bid targets for say an exxon? >> i think people will look at those companies that are of right size. companies where acquisitions can occur without lots of equity issue wans or the majors where the size of the deal is not prohibitive to maintaining the ongoing dividend. that was notable yesterday in what shell was talking about with bg. this is about as big a deal they could muster while keeping a decent credit rating or decent in their eyes and be able to satisfy the dividends that they have promised to their shareholders. >> if you had to give one name as a potential target what would it be? >> i would look at the u.s. emp stocks like apache anadarko where there has perhaps been some change in the management structure and the assets room for a strategic change under a new owner. >> matt, good to talk to you. thanks so much. exciting time. matt beasley joins us from

henderson global investors. >> we're almost at the alley. see what jon fortt has in store for the next hour of cnbc. good morning, jon. >> good morning. big show. we've got international monetary fund managing director christine lagarde live with us and linkedin bought linda.com for $1.5 billion. like a 20-year overnight success. and we'll be talking to the stars of hbo's "silicon valley" on its way back. all coming up on "squawk alley."

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