every current statistic, every current record is tainted by -- his 4300 whatever it was, that's -- we know that's not tainted by juice. >> but i also want to -- it's a line in the sanden i think there should be a better line on steroids. >> i want to see you gambling while broadcasting. thank you for indulgeing my voice. >> get rid of that other stuff from bangkok, too, that you got. >> join us on monday. squawk on street begins right now. ♪ ♪ come on show me what you got♪ >> live shot of the apple store in new york city as preorders for the watch go live online. customers can try them on at least in stores. we'll gauge the response both in the united states and overseas. good friday morning. welcome to "squawk on the street," i'm carl quintanilla with david faber sara eisen, simon hobbs. cramer is off. futures in a tight range. chatter around ge's move to dispose most of ge's capital

authorizing a big buyback. a big move in oil after what has been volatile week. the ten-year crept up to 1.93. reroad map, blockbuster news out of general electric selling the bulk of g.e. capital, $50 billion buyback. stock's up 7% in premarket. we'll get faber's exclusive with jeff immelt. >> apple watch preorders began at 3:00 a.m. large lines absent this go-round but online models not available until june or july. what does it mean for sales at apple? >> retail moving in premarket. gap down 2% despite posting stronger than expected march sales. >> stock futures are edging higher here all hail to the power of qe abroad nikkei surging past 20,000 for the first time in 15 years and equities in europe are now at a new record high. we will start with our news of course involving general electric, released this morning at 6:30 a.m. the company

effectively exiting the financial services business. something that will take place over the next couple of years, as disposes of many of the businesses within its ge capital and sells those, perhaps a multiple to those businesses or a price to book value. and also disposes of portfolios of assets beginning that actually this morning with an announcement of sale of $26 billion of real estate loans and assets to wells fargo and blackstone. it is a massive move for ge which has been under pressure from some shareholders to do just this. as there's been a changing nature of the financial services business and its profitability within the company. i was able to speak with ceo chairman and ceo jeff immelt late yesterday, prior to when the news was officially announced, to discuss this very big move. here's the interview. >> jeff ge capital, the first question is a simple one, why?

why now? >> yeah you know david i would say, the business model of financial services certainly changed. we've got a fantastic industrial portfolio. but we're a large wholesale-funded finance company, you know, the wholesale funding model is tougher. we felt like we're disadvantaged versus banks and at the end of the day, you know the way investors view financial services versus industrial assets, it's just starkly different. and we kind of felt from an investor standpoint that this was the right time to make the move. we've been working this way since the financial crisis. you know why now? two things have happened just recently, you know? one is you really have a perfect market to be selling financial service assets. so you've got slow growth low interest rates, lots of liquidity, people searching for yield. and i think recently the fsoc financial oversight board, it's really said there's an off-ramp for companies that were

systemically significant to kind of get off as they shrunk. you know we think this is good for the system. we think it's good for the regulatory world, good for investors, and that's been more or less recent. now's the time to do it. >> now is the time. it's not as though this is any stranger to you or conversation that you haven't had many times over. i know for years you've at least considered it. >> that's -- >> when you crystallize on again, it's the idea of this is the right time it comes because you think you can get the highest price for assets? >> we started at 600 in the crisis and cut that in half. we said to investors since the financial crisis look, we're going to do thing that are in our control and do them at good value. no reason for us to burn out. we have plenty of liquidity and things like that. but when you look where we are right now, you have the perfect market for selling assets. you really have a good -- i'd say regulatory headset for how do you kind of dedesignate? those two things have come

together. once we've announced this morning the commercial real estate transaction, with that in synchrony the remaining piece $170 billion of assets we think there's buyers for all of these things, you know? we've had lots of incoming calls over the last couple of months you know, because of the way i wrote the report and things like that. >> your shareholder letter -- >> it was clear. >> -- telegraphed this is the road we're going down but not necessarily it's happening that quick. >> all of those things together there's never a perfect time. we felt like these things were coming together. at the end of the day, being able to rerate the company as a premium industrial company with a small financial service business that really compliments the industrial assets i think is the highest -- really a value creating move. >> but it's not one without risk, as everything is. this did contribute significant amounts of earnings to this company. >> look, this is a great set of businesses really. a great team. it's a great set of businesses. it's been a big part of our

history. you know we're proud of ge capital. we think assets are worth more to somebody else today than they are to us. from an investor standpoint fundamentally i think you know we're announcing this morning that we're -- we've got the synchrony split, the board has authorized $50 billion buyback, we've got dividends that are quite attractive today you know basically you can hit the same eps numbers with 90% industrial instead of 75. we think that's a better ge. the businesses, we're proud of the businesses. we think we're at a moment of time when they're worth -- what synchrony shows what australia consumer shows, what even real estate shows these assets are worth more to other people than ge. >> synchrony has done well since you floated. there's more behind that. was that partially helpful in your thinking? >> sure. >> in terms of how well that did? >> absolutely. i think there's a various data

point but we were quite impressed with what synchrony's done. the australia transaction was very attractive. you become you know convinced that if we think investors are valuing our financial service assets the one times book and people paying two time book when we sell them that's a pretty good clue they might be worth more on outside. so you know our industrial businesses, david, are, you know, 15 16 17% returns. financial services is 8. >> was the company -- >> it's an easy trade. >> was the company getting penalized, in your opinion, having financial services? >> look, we're a classic sum of the parts, right? you get people blend the financial and industrial. i'd say beyond that think move takes an element of risk away from the company. you know in other words, i think industrial investors can see and touch them they're more consistent, right?

>> they go through cycles, though. >> but in terms of the blend of assets we've got, you really have a chance i think this move really just makes the company more consistent and lower risk than it was before. so i do think, to a certain extent extent, where we got to in financial services it was starkly different than where we were on the industrial side. >> it wasn't always this way. i mean there was a time certainly your predecessor and during your tenure which is now over 13 years, 13 1/2 years in length, where ge capital was considered one of the core assets. did the financial crisis change your opinion? >> look i think the world for financial services has changed dramatically. precrisis, it was 8-1 leverage just a different world. i think, as we plug into the world today with wholesale funding, you know bigness is a bad thing, not necessarily a good thing. i think just the ability to get a good return is really difficult today. at the end of the day, our primary job, maybe more than

most companies, capital allocation. if you've got a side of the company that can generate 15%, 17% return and a side that's really feels like it's going to be hard to even return cost to capital, it's an easy capital allocation trade. look, you've been doing this a long time. you know markets change. i think to a certain extent financial services this isn't a cycle. this is a generational move. this is -- this is a long of it term range in terms how people view size and liquidity and things like that. >> you think this is here to stay? >> personally i do. >> which i assume informs your decision. >> actually helps us make the decision as well. >> you talk about capital allocation. a good deal of capital that will be coming back so to speak from this, 50 billion, going to be used to repurchase shares. >> uh-huh. >> why is that a good use of ge's capital. >> we've got great organic investment in our industrial assets. look at aviation energy oil and gas, health care we've got big-scale businesses that we

continue to invest in. we've allowed in our capital plan ability to do bolt on acquisitions in that vain. synchrony's $20 billion, that's a split. that's a share buyback by definition weep think from an investor standpoint really really allowing them the model the company and our intent to buy back stock, and that gives an investor in ge the chance to say they're going to get the same eps as we execute this plan as they did before only with a better mix. >> but when you make a decision to buy back that much stock, you also, one would expect think it's cheap, do you? >> well look how many ceos have you interviewed previously that didn't think their stock was cheap? >> most do. like elon musk one day said something like, no i wouldn't buy it but yeah -- >> i think -- i think this gives us a chance to give -- reward our investors, allow them they're in it for the long term to see the company in that light in terms of better eps with

better mix. but i'd go back dave you know we invest a lot in r&d every year a lot in cap x every year we've got good organic growth companies. this is a company that's not starving itself for lack of growth capital in terms where we go. >> when you make addition to use bulk of the proceeds coming back for share repurchase they could be used for other things. >> look the base plan is to do the buyback. we always look at different things but i think this is an important message to investors, and the fact that the board has authorizes $50 billion stock buyback, that says we're serious about it. >> you've been in a world of big numbers. a very large number. >> a good number. >> you'll get shares outstanding down to as low as 8 billion. >> $8.5 billion, which is a good thing as well. >> why? >> again i think it's a narrower float. that's a positive. also gives you more i'd say utility around the dividend as well as time goes on.

grow the dividend it's not as much cash out as you do that. i think there's a number of good things that happen as we reduce the number of shares outstanding. >> of course that is avery important component, that being that $50 billion buyback. if you understand the math they are losing the earnings that are contributed from ge capital but using proceeds to reduce the float, hence eps number will stay roughly the same by 2018 you have a business, 90% of which earnings come from these industrial businesses. there's a lot more of our interview where we talk about the portfolio that mr. immelt has created, clearly his company. ge now reflects all of the decisions he's made over the last few years, quite significant ones in terms of parting with assets and buying new ones and how he's decided to group them. some have criticized of course when they bought and when they sold and said they perhaps could have done a better job weep put

those questions to him as well. we'll hear his answers. >> interesting to hear jack welch approve the move say it's a smart one. some discussion about whether immelt is his own activist getting in front of activism or it's so late and whether he's had to do this. forced to do this over time because of the criticism. >> yeah, you know i asked about activists. i don't believe there was an activist here in any way. as i said recently carl when you, me and jim the other day, companies often think about these things long before any activist shows up -- in this case there wasn't one -- they've been thinking about it for years. the question is timing. they believed that now is the time, in part because these -- there's been a seminal change in the way financial services businesses are run and the returns that you can get from them given the regulatory environment that they operate in. and that it's a great time to sell assets. >> perfect time. that's -- that's an important word. >> very important. they believe they can do it fairly quickly. while giving themselves 24 months, this is a massive company.

the asset size equal to seventh largest bank in the country, they're hoping to do it quickly. they think they have a lot of potential incoming offers. >> buyback is stunning. you asked about that. >> 20% of market cap. >> $50 billion buyback, one of the biggest corporate buybacks. >> not counting what they may use from dividends, $35 billion in dividends. >> he's bringing back $36 billion in cash from overseas. >> right. part of the $16 billion charge the company's taking involves that taxes they'll be paying to repatriate assets. yeah, it's 90 billion they'll be returning to shareholders through 2018. now, that's including current dividend which, by the way, not going up next year. they're keeping it steady. but they've indicated they don't expect to raise the dividend next year. it's then the return of $50 billion via the buyback and they're going to be selling the 85% of synchrony that they currently owner or sending that out to shareholders. >> and important they hope they

won't -- official you work in businesses, they're not going to have regulator breathing down your neck which is troublesome from people that i know that work in them. >> interesting see if they can exit what somebody called hotel california. >> yeah. i think it's fully their expectation they will no longer be a significant financial institution. the only businesses they will have are those that support on the financial side the sale of their products. so aircraft lease, equipment, medical, all of the things that are sold by ge they can still finance. it's not going to be an insignificant business but it will be much the same way captive finance companies operate within industrial companies. >> we'll talk about the moody's downgrade, of course more from david's interview this morning. when we come back also preorder day for the apple watch. were you awake at 3:00 a.m. eastern time ordering yours? we'll get an in-store preview under way around the globe, including apple's flagship store in new york city. we'll take you there for a live report. premarket in a tight range.

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sflu long awaited moment for apple. previews in stores in u.s. and abroad. preorders start today. jon fortt at apple store in new york city at fifth avenue which opened at top of the hour. good morning jon. >> reporter: everybody went inside. but before the people in line for the watch went inside there was another line over here people in line to get into the store but not for the watch, that line was actually longer. this is not the product launch

type of experience. this is people who want to get a look at the watch. and for apple's strategically, there are a couple of purposes that this solves. one, to gauge demand. geographically and in terms of the designs of the watch. got to remember normally you've got two different sizes iphone, three different finishes and then three capacities. that's a lot. but not nearly as many as you have with this watch where you've got two sizes, three different finishes and all of the different bands, many of which are expensive and intricate. apple has to decide where to send those based on what the demand is. they're trying to figure out what questions people are going to have inside the store. exactly how they're going to sell the watch, not just now but if and when they decide to broaden this out into third party retailers, they should do that. all of the questions being answered today. it took a half hour to an hour for most of the first allotment it looked like of watches to sell out basically, from people who preordered them online in

that amount of time. it went from availability in april to june of course. we don't know how many apple has available. it's impossible to know exactly how strong that is for apple, of course we've seen one downgrade, but that's based on expectations of tough comps on the iphones. something that we've talked about quite a bit on this program and on "squawk alley." apple expanded their inventory, target inventory which means goits going to be tougher at the end of the year comp wise. apple watch is what people are looking at today. we'll get reactions as they come out. back to you. >> we'll talk to you later on this morning. jon references the downgrade out of raymond james, the second downgrade this week after argued it's the slowdown in the iphoning cycle. and the foe tension reviews for the watch, not material to earnings will be weak enough sentiment on the name gets dragged down. >> which surprises me. if you listen to apple they a

you don't know what the apple is yet. it's a platform. it's like netflix without "house of cards." raymond james raising earnings per share outlook, assuming stronger buyback. it's an iphone commentary about 2016. >> important to remember on this day looking at lines or lack thereof for the watch, this is an iphone company. the estimates for selling of the apple watch in the first year all over the map. but i think the biggest is what 40 million, 30 million, 20 i think soc gen. this is a company that sold 200 million iphones last year. >> isn't the point you have to make an appointment to see the iphone? would people -- >> the watch. >> the watch. >> you don't get to take it home. >> no, no but if you're supposed to be there by appointment only? i assume you book in there's no need for that. >> the important thing from apple's perspective, creating a new ecosystem or one within their ecosystem, that is part of

a long-term plan and whatever the watch is today is not going to be what it is tomorrow or the next day. >> correct. >> and so all of these kinds of projections, it's hard to imagine, really is, what's it going to be in five years? will they be dominant in wearables which many believe is going to be a very popular technology. >> meantime the stock has been trading, close to 52-week high rangen it's been pretty solid. as we await the results in two weeks. >> eight minutes until we kick off at the new york stock exchange. art cashin's take on the markets as yesterday we managed to break higher as rumor of the ge deal swirled. futures, looks week can add another 38 points. that has a lot to do with ge with a 9% surge premarket. more "squawk on the street" direct from the new york stock exchange after this.

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art cashin's point of view direct of floor operations at ubs. happy friday. >> you too. >> tuk immelt and ge the perfect time for them selling financial assets what happen does that mean in the broader scope of things? >> i think it means basically the change of an era, because the financial side of ge was quite important to the company for a long time. but i think the idea that rates are so incredibly low makes it a perfect time to sell an asset because people buying can get easy financing and be ready to put it right up. so timing looks goo good in that

sense. >> $218 billion in stock buyback announcements so far in 2015. this is at a record high. clearly short term traders like this. but in the long term do you have concerns that companies are using cash to buy back shares? >> well it's -- this financial engineering's been a bit of a problem. over the last ten years there were figures that indicate that there are trillions and trillions of dollars in buybacks as opposed to new money coming into the market. the buybacks themselves have been a key factor in two ways helping support the market and, number two allowing the p/e ratios to look more rational. >> see you soon art, thank you. hurry back. get back in time for the bell. don't go away.

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>> back in time for the opening bell and look at s&p at top of the screen on this friday. down here at big board, new media investment group, publisher of locally based print, online media.

at the nasdaq, ben an investment and banking firm. we'd be remiss if we didn't check ge off the bat. premarket gains in the neighborhood of 7% 8% almost 9%. a stock you can count the number of times it's moved 3% in a single day basically on two hands. >> you've added $30 billion of market cap you've got an almost 3% gain yesterday, of course when first we thought there was movement here and then leap of 9%. if confirmed at the open, here at new york stock exchange a $30 billion gain. >> it's 6% now. >> we've come back. a solid gain. >> posting a list of the all-time biggest buyback authorizations, apple at 50 ties now with ge at 50. >> the two stocks of date really, with the apple watch going into stores and that ge mega-announcement. >> probably the level to watch, david, $30 a share. if ge was to pop above that a

cry would go out around the world from ge employees because $30 the cap for a long time on that stock. >> it hasn't seen 30 since the financial crisis. i can remember fall of '07 it was above 40 briefly. >> 28 would take you to lehman in september of 2008. >> yeah. >> 28 and change. >> of course we hit six and the scary days of march of 2009 we i should say, it hit six. old habits die hard. >> people kicking themselves they didn't buy at six or seven. >> but that we, of course reminiscent of businesses ge's owned. ge capital amongst them. an important contributor to the company's profit act through late '80s,90s and 2000s. appliances is gone, nbc universe universal is gone, plastic is is gone, now ge capital.

>> what does it take to get blackstone, of all people, david to come in and buy property assets now, arguably at top of the cycle when blackstone had a desire to exit? there's a reit buy today on the tabletop get blackstone to turn tail, i'd love to know what valuations are. >> all-time high. largest private real estate own, bought the willis tower, bought property from paulson. >> real estate the largest single portion of the firm we think about it as private equity of course, which continues to be an important part of blackstone. the largest, single part of the firm. and, simon, to your question, they're buying and selling all the time. they have a new fund at blackstone, buying real estate using some of the fund for some of the purchases as well. >> but -- >> given ge's history, at least perception, i did talk to mr. immelt about it we'll have his thoughts later, they have occasionally missed things in terms of pricing. i think many investors expect

blackstone may have gotten the better part of the deal because there doesn't appear to have been an auction for assets. >> you were aware of the agony they've been through in internally on discussions more many years under pressure from shareholders. they knew they wanted to exit ge capital, the question when and with the what price. clearly they've tried to bring everything together at one point prior to immelt's exit. within that bringing of everything together, they have to be some cob sessionncessions. you can't do that without some being a better bargain than others, put it that way. >> ge capital, a massive amount of assets in businesses. re estate is a small part of it. there are hundreds of billions in assets still to come that need to be sold hence two-year time line they're giving themselves to do that. >> major averages here it's interesting all of the news this week has been corporate activity. this is a week where we saw shell going after bg, $70 billion deal. another pharma zeal with mylan --

>> we didn't get it. we got a proposal. >> a proposal. >> a proposal from mylan to acquire perrigo. >> the market's risen 4 days out of the last 5 sessions. a bull irk signal of confidence from corporate america, or a signal that the window's closing on low interest rates. >> that back to the idea of why now is the right time to potential potentially sell financial assets given the low rate environment, it's a great time to do that. those that have a yield, which are many of them are in that portfolio, to your point. but, yeah, it's been active -- not a lot of earnings yet, next week they come in force. >> at 26.5 billion, it is blackstone's biggest acquisition, i'm told out of the s&p capital. >> larger than eeop when they bought from sam zell. it's not insignificant for them. >> can i mention the level that we're at on the s&p? for eight days we traded below

2090 and couldn't break through it. yesterday on the ge rumor we got a pop, we've traded significantly above 2090. that's a major breakout to the point that sara was making about corporate news driving us higher. so that's quite a bullish signal to have been able to trade or open above that level. >> ge the biggest gainer on the s&p. not far behind netflix which citi today takes to a buy, arguing that the pullback on the stock reflects competitive concerns they don't necessarily agree with. they think investors are not really getting anything in the share price reflecting the opportunity overseas. 350 million broadband households, the opportunity for netflix. they also say reviews around the new content is pretty good that bodes well for subgrowth down the well. >> excited for "orange is the new black" to come back up. the price target 525, they say upside scenarios for the price of netflix all the way to 750 bucks, trade agent 4ing at 450.

>> 300 higher two-thirds gain. i didn't find the most bullish drivers were. >> i haven't seen many of those on netflix. although a lot of aggressive calls. >> the core case there was 525. 16% from where we are now. >> obviously watching energy shares here. they were the lead yesterday on the bounceback in crude oil, coming after oil's worst slide in nearly two months. i guess the question going into energy earnings how bleak is it going to look? energy profits set to be down 65% from the last year. the other question that investors have to ask going into energy companies, is this quarter the bottom in earnings? oppenheimer, says yes, depends what happens to oil hovering above 50 bucks. >> blackstone clarify, 9 billion of the 23 billion sold by ge is not to blackstone it's

to wells fargo, the first mortgage commercial real estate loans valued at $9 billion. blackstone's, global real estate fund buying $3.3 billion in the u.s. european fund is buying assets from ge real estate debt fund buying a bunch and australia and on and onnen it's large for blackstone but do 23 minus 9. >> how big was the hilton deal? >> enormous deal. that was considered private equity as opposed to real estate, i think. >> you want to mention the gap? >> let's get to mary. dow's flat. ge's the best performer. mary on the floor. >> carl, it looked like we were going to see modest gains in a week that should be positive for three major indices. ge accounting for all of the dow's gains right now, which is just about two points or so. so, generally a little bit of weakness there. the ge the big news in an otherwise quiet morning that it will be selling most of its ge

capital. financial unit assets in its financial unit also initiating $50 billion stock buyback. now the assets are expected to be sold through 2016. and so they have a fairly quick i guess time line in which to do this. let's look at some of ge's rivals because one of the reasons ge's doing this of course, is because there have been concerns that it isn't valued properly as an industrial company. honeywell, united technologies because that financial aspect of general electric essentially muddied the waters, this makes it a simpler company to understand and what of course ge hopes it will help it to fetch a premium to some industrial rivals. united technologies very busy recently. it also recently announced that it would be buying back billions of stock as well. so again, why is it doing it now? as david mentioned timing is right. what's interesting according to people i've spoken with this came together in february the time the company received basically a pathway to for the

sify-d designation, meaning regulators outlined how the company could get out of the designation of a systemically important financial company that is a nonbank. also buyers expressed interest in assets. again the stock is underowned, again, hoping this will prove it to aba more attractive investors. retail stocks we want to watch them as well. the retail stocks we had gap reporting same-store sales ahead of expectations stock lower, though. price mark also coming up with disappointing numbers so the stock is under pressure. wanting oil, of course the best performing sector this week, followed by health care. health care of course benefiting this week from some big acquisitions, as was energy. that certainly is the theme for what is otherwise a quiet week of trading on wall street. the dow's flat right now. simon? >> let me just highlight what

you're saying mary. the timing of this deal had a lot to do with the fact that the authorities had said if you sell off these parts of ge capital, can remove the systemic important financial institution tag line you won't have to have the regulators in there to the degree you've had. this is a go go go from that point of view? >> it seemed to coincide with february guidance that they gave. they've been thinking about, as david's been talking about all morning, thinking about this for a long time. this isn't something that came together yesterday. that may have been one of the catalysts to do than that and the other thing people are pointing out in his annual letter to shareholders immelt talking about how they weren't generating proper return on capital. so in the wake of that a number of people started calling ge because i. a lot of financial assets attractive to companies. >> sure. >> in receiving calls or seeing the kind of positive response to the synchrony deal et cetera they thought this was all of it

kind of coincided to make it the right time to do this massive restructuring. >> mary, thanks so much for that. we'll come back to you later on. we will get more of faber's exclusive with the chairman and ceo of ge jeff immelt in a moment. first, we'll take you to a store in london and find out how people there are reacting to the apple watch on this preorder day for the device. dow's up a mere five points. back in a moment. 80% of the poor in africa are rural farmers. 96% of them are doing rain-fed agriculture. they're all competing with each other; they're all making very low margins making enough to survive but not enough to get out of poverty. so kickstart designs low cost irrigation pumps enabling them to grow high value crops throughout the year so you can make a lot of money. it's all very well to have a whole lot of small innovations but unless we can scale it up enough to where we are talking about millions of farmers, we're not going to solve their biggest challenge. this is precisely where the kind of finance that citi is giving us

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welcome back to "squawk on the street." another stock to check today, altera, very strange day yesterday, after we reports talk to be acquired by intel broken down some time back in fact and no talks taking place between the two companies. yesterday, altera shares were down as much as 8% in the early going, only to recoup all of the loss and end the day up. you can see they are down ever so slightly. the reason why, well lots of chatter about the price that intel was willing to pay, which i reported probably close to54 a share in a cash. while altera chose not to accept that price, something noted by

investors, you can act to replace the board of directors at altera by written consent. making it very easy for an activist perhaps to get into the shares and try to get something going, if in fact they believed intel would still be there with a $54 a share all cash offer for the company. that happened -- will that happen? who knows? nonetheless, it is the reason why we saw such strange trading in altera yesterday, again, down sharply, after people learned that there were no longer talks go on between and it intel. ending the day up over 3% on this belief that well maybe there's a way to get them back to the table. of course, that taken with the fact that there was a buyer willing to pay that discounting even what that value is perhaps got people to a higher stock price than they might have expected. did simply want to come back to altera shares, now down about 1%. simon? >> okay. an international event, earlier

today we talk you to -- earlier in the show we took you to the apple store in new york where consumers are having their first chance to try out the apple watch. it's preorder day. what is the action like across the atlantic? seem moo macerich modi in london. i guess we could best describe it as the "it" store for most londoners as opposed to hard rod's. >> absolutely. this is clear here in london this is not just apple's curb tonight wearables but the luxury space. showcasing here, a high-end department store, that houses all of the top luxury brand names, prada, inside you'll see the apple watch steps away from taag, rolex. many say this is the former ceo of burberry apple's ceo, her decision to make the watch into the high fashion category. big question if you had ten

grand to spare, would you buy a rolex or an apple watch? i pose that question to a couple of customers. >> rolex is classic. this is techie. i spend too much time on my phone. >> rolex. >> tell us why. >> because i would rather just like -- >> the rolex holds its value, apple watch defends if it's like an iphone is it going to be updated every year? so i think it would be obsolete in the next three years. >> reporter: doors opened a couple of hours ago. no line at this moment most people are inside i have to say it's a diverse mix of clientele, trying to gauge who the customer is, who's buying or looking at the apple watch. it's some millennials, young professionals and tech enthusiasts, those already invested in the apple ecosystem and want to see if they should buy an apple watch. back to you. >> looking good thank you very

much. seema mody. if tim cook were here he would say, probably our market is not to take sales away from other watch makers it's to persuade those who don't wear a watch because they check time on iphone to buy an apple watch. that would be their positioning statement, i think. >> i said are you going to get one? he said i'm waiting for a pocket watch, which some people said, that's called the iphone. in a way that's true. >> i guess it's true. >> it's so important, this is an untested untried sort of thing for apple to go into the luxury good sector for a wearable technology here. reading all of the reviews -- there were a lot to digest -- overwhelmingly pretty positive. one thing that gives me pause and that gives some people paushgs it's a learning curve. this is not as easy as using your iphone, if you're an iphone user. a lot to learn in terms of getting notifications, using cool things which apple put into

this. >> they want to get them into the stores. the stores on the product are the be all and end all. that's why they've given staff 50% off. that's how they think they can push the product. it's going to be a longer journey, but of course additionaler to traffic will boost other apple sale as we saw with the launch of the ipad. >> they argue in '07, no one knew what swiping was, and that learning curve happens repeatedly. >> what is it, additional -- what is it called on the new next technology. >> force touch. >> the more you get. >> tim cook's first new major product he's launch under his watch as ceo and first category. we'll see. >> my daughter had to use the bathroom at 3:00 in the morning, i figured, why not? i went online and i got one. >> you got one? the gold one? >> no one of the cheapos, relatively speaking. but process was surprisingly easy, i thought.

if you're up at 3:00 a.m. >> now delivered end of april? >> mine's coming in may. i'll let you know. >> you should have spent more on the postage, you get it sooner. >> when we come back rbc's mark mahaney with his earnings season outlook for tech what he's expecting from twitter and google. dow up 21 points a lot of the gains ge which continue to lead the s&p. don't go away.

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♪ dow's up 22 in early action. oil prices also rising slightly this morning. jackie deangelis with an update. >> good morning. that's right, in positive territory right now. we were lower earlier this morning. kind of indecisive market here traders are saying there are a lot of variables out there, they don't know if it's a supply o'demand story, dollar story or watching geopolitical landscape. a little bit of everything here. fridays are a balancing day. some traders don't like to have big positions going into the weekend. if we hold $50 range, over 51 right now, it

will be interesting as we go into month. the dollar index is over 99. we have dekummeling between the dollar and crude. it's a short-term thing, they expect the relationship to go back to normal especially if the dollar strengthens more. i want to make a quick point on gold, because we're well over the 1200 mark you've got short covering today bargain hunting in the pits as well. the support to watch is 1194 to 96 but also gold is bucking the dollar trend as well. back to you, sara. >> thanks jackie deangelis. what we're seeing for the u.s. dollar is it's reasserting its strength. heading for the first up week for the u.s. dollar in four on the back of what was seen largely as a correction in the dollar's steady path higher. and in fact today the euro back at 105, weak levels strong u.s. dollar of course important to watch what's happening in currencies but with 1% moves, the impact as we really head into the thick of earnings

season, goldman sachs quantified it this morning saying that the lower commodities prices and the stronger dollar going to take 3% off of earnings for the s&p 500, taking out utilities and financials. >> can i mention the gap, which came through with sales figures yesterday? if you look at what's happening at the navy division absolutely great, real surge there. still, banana republic declining for a second consecutive month and also some clearly problems at the main gap brand. huge effort at old navy to get stock in with the ports closed on the west coast. the fact that they've done so well, that brand is i guess testament to management's ability. until you get the turnaround on gap as central proposition, i think a lot of people believe the jury's out. >> a lot of bulls in retail argue inventories are low and that's going to help with pricing down the road. we'll have to find out and see. meantime pretty muted action here dow up 17 points a lot of that of course due to general electric which is the name to watch all day long. >> absolutely. coming up in the next hour more

of david faber's exclusive inter interview with jeff immelt. the big, clear strategic move that has sent the stock up so sharply this morning. when a rewards card is designed to sync with your life it gets talked about... ♪ ♪ ♪ so you can live the way you live, and enjoy all the rewards. chase sapphire preferred. so you can. 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.

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♪ ♪ >> good friday morning. welcome back to "squawk on the street" i'm carl quintanilla with sara eisen, simon hobbs, david faber at the new york stock exchange. what a week on a week where we had so many deals in the news. ge getting rid of most of ge capital. crude hanging in at 51. >> no question carl what leads to the road map heading into the weekend. ge up 8% hitting new highs on news that it's selling the bulk now of ge capital and announcing a $50 billion buyback. we'll get more of the second half of david faber's exclusive interview with ceo jeff immelt. plus the highly anticipated apple watch available for preorders around the globe. some models selling out in china. does it mean the watch is a hit?

>> mark mahaney will join us with his earnings outlook for the internet stocks. he'll tell you which ones will be affected by the strong dollar. shares of ge up over 8% this morning, after the news the company will sell most of ge capital's assets and businesses over the next two years. the bulk of the proceeds from those sales will be put towards what is a $50 billion buyback that will take place over the next few years, as well. i sat down with ge ceo jeff immelt and asked him whether he's frustrated with ge's stock price and if he is now happy with the company that he has put together from both sales and purchases. this is your company now. i mean fully completely the stamp of jeff immelt's and his tenure as chairman and ceo of ge will be felt for years to come. even after you leave. >> uh-huh. >> you happy with what you've done? >> i am.

i love the company today. i love the -- this high-tech infrastructure space where we think we have real competitive advantage. you know we've got great technology global footprint, you know massive backlog in the installed base. a good structure for success. i think financing, you know with g cast and energy finance allows us. fundamentally, everything that we're in today we're both competitively advantaged in and we're good at. i think in the world we live slow growth and volatility this is today is all execution is king and people that are really deep in industries are going to win. and i think that's -- that plays well to us. >> are you done. >> is this the company you want with the portfolio of businesses you want? >> i think the one thing, mistake, you can never make is to say you're done you know? the world changes. the day that i don't get up every morning with a thousand ideas how to make the company

better is the last day, you know? i'm not there. i actually see ways the company can be improved. but i love where the company's positioned right now, i really do. >> oil and gas, i mean we talked about it at length last time you joined us on cnbc. you've made significant investments there. right now, it's not looking like a particularly healthy business given what's happened to the underlying fuel. >> two points. first point i make i think you did an interview in 2001 2005 subject would have been aviation, our aviation business was horrible. you had 9/11 tragedy and sars and what benefited us at that period of time was the oil and gas business or the health care business or other businesses. so one of the strengths of ge is we can accomplish good eps growth without every business always in a great cycle. so we've told investors, 1.10 to

1 at any time 1..20 eps in 2015. we're on track to achieve those numbers. we're going to do that and do that well second thing i make is oil and gas business is doing okay you know, in other words, everybody can see the price of oil but we have a diversified set of businesses. so far oil and gas business is doing okay. we'll keep watching kind of where we go. but you know we run it well. we'll see where we go. >> you know i wonder though because, of course, it's been out there some time, got to figure out a way to separate ge capital from the business. you're doing, it's happening. >> yeah. >> how long until, well aviation gets a higher multiple you know? if that was spun out or if it was separated now with the low ge capital business along or part or this thing you can make the argument sum or part is better than the whole. >> we have the ge store you have underlying technology

global footprint, installed base. i think we can demonstrate we have great synergies across the portfolio into those businesses. we can show how they turn up in returns and margins and market share and all of the valuable things. aviation takes from health care and vice versa. >> aviation takes from health care? >> sure. inspect technology comes out the health care. health care was the anchor tenet in china before aviation got there health care had thousands of people there, a lot of people who work in other ge businesses. we feel very strongly about the infrastructure business we have going forward. but look david, i've sold nbc, ge capital appliances, insurance, plastics but i think we've shown the ability and the willingness to be thoughtful about the portfolio as time goes on and critical about what fits and what doesn't fit. >> right. yeah. plastics appliances nbc. >> nbc. >> some would say you've sold

them at the wrong time and bought some other assets at the wrong time. they look back there's always a critic, you know what nbc, okay, makes sense for the sale but, man they sold it right after the crisis, got a low multiple and redeployed some money into oil and gas which is not performing well. >> i look over the history, right, we've exited insurance, plastics, nbc universal, appliances and now financial services. i think our batting average is pretty damn good when you look over all of the transactions over time, i think when you look at nbc, in particular you know we had a 15% return on 25 years that we owned it. it did what we needed in that transaction. there's always going to be people that say it was too late, too early. but that transaction gave everything our investors needed at that time. on the buy side look david, u think we've got a great oil and gas business. we've got a diversified power business.

we acquired enron's wind business for $200 million, it's generated $6 billion $7 billion in cash since we bought it. >> not bad. >> amersham at 2 x. >> it's quite some time ago at this point. >> no i'm saying it's generating more than a billion dollars of cash a year plus it's worth more than we paid for it. it's mid teens return. since we started it. >> people zil lookstill look at that felt like they overpaid. there's urban myth and then reality. not all have been perfect. i'd say that. when you look at the way -- the trades we've made in the portfolio over a decade or so we've repositioned the company for the future in a very good way. >> so are you frustrated that you haven't been rewarded for that. >> no, look -- >> in the stock market. >> i love where we are today. >> but you've got to be -- come on you've got to be unhappy with the fact that the stock's still 25. >> i just think that's not the

way you can, you know what i feel is different than where i would say this is the day. this is a great time. i love where the company is today. i'm looking forward. that's is the absolute truth. and that's the only way you can run a company like ge. i like where we are today. i like where we're going in the future. i think this is a great stock to invest in right now. >> you positioned the company as a growth company. you did that to a certain extent in your letter as well. some of us have different views of growth. i remember growth at ge double digit top line growth. are you ever going to get back to that? >> look in this environment, slow growth world that we're in today, you know i think being able to grow organically, mid single digits over time is not a bad opportunity. we've got good margin opportunities inside that. but i think if you look at our industrial eps between organic growth margin enhancement,

alston coming in you can have an industrial eps growth that is substantial as you look at next couple of years. >> you believe that will be to a certain extent the case. >> i really do. i really do. in the world we see today. i'm not counting on things getting magically better or blah, blah blah anything. i think of the world we see today we think that's -- we are well positioned for that. >> in terms of the disposition of the assets at ge capital itself it seems it's going to take some time. is that your expectation, it will take as long as 2018 for this company you're talking about -- >> i think that's -- i think what we've tried to show to investors a highly achievable growth path that's credible and conservative. i think, you know today, the gun went off, there's going to be business development teams in every financial service company in the world that's doing an assessment of what they think about ge capital assets. some have already started that

based on things we've said in the past. these are, look mid market lending and leasing business fantastic. our private equity sponsor business amazing. franchise finance business awesome. some european assets are world class, right? you've got a bunch of stuff in the portfolio that people are going look at and say, in a slow growth, low interest rate low yield world, you know anything that gives you yield is extremely valuable and these are safe and secure well-run assets. >> you think it could move fairly quickly? >> we're ready for that. we'll see how it happens. always risk to a plan like this but we're quite -- we think the timing right now and there's just nothing out there that says it will change anytime soon. again, dave low growth right, low interest rates, lots of liquidity, search for yield. >> should benefit you both for the sale of businesses at a multiple and assets as well. >> exactly. >> it's both? >> exactly. exactly. >> i guess finally, just to

come back to the stock price, clearly you do things in part to generate your holder value, that's what you're all about. >> sure. >> you were on with us not long ago, and we talked about the same idea, and i had some calls from some of our old colleagues that may own stock still. they talk about the fact that the stock's not kept up with the pace of s&p. >> yeah. >> what do you say to them? >> look we had a change. we had to change to scale. we've done the right thing for the company. you know it's -- it's a -- it's a much better product today as a company than it was in the past. we think investors are going to see that. >> sometimes your job is to drive change massive change sometimes you have to do it with a big company and sometimes you have to do it with a great company. i think that's what we've done. you know when think about leaders of companies and great companies, like yourself we can take some time and sort of assessing when do you think the

report card on jeff immelt will be? how many years will have to go by before we have a sense -- >> i'm going to let you. >> and jim and carl and the rest. >> you've done a lot. >> yeah. >> it's not like you sat there and said i like this portfolio of businesses. 2009 report, the a very different company. >> yeah. >> it's your company. >> yeah. i love it. i love how we're positioned right now. i really do. >> jeff, thank you. >> david, thanks. >> jeff immelt chairman and ceo of ge on a very significant day of continued change for the company that's gone through a lot of change without rewarding shareholders for quite some time, of course which we discussed. >> that move carl brought this up earlier, moody's cut the rating on ge's debt on this news saying that it's embarking on risky financial policies favoring equity shareholders at expense of creditors, referring

to $50 billion share buyback. >> you know, there are few analyst whose have been more critical than scott davis who had a note last fall he suggested that ge should be broken up like at&t, in order that other investors can come back those that have thrown in the towel. the first question on the conference call this morning, and apologized to jeffrey immelt, suggesting that as far as he was concerned what they've done now was pretty good stuff for redemption quote/unquote, which is telling and interesting. >> some chuckles on the call. >> yes. >> as questions came up. the other thing people toss around, david, take a jamie dimon, resisted breaking up, is this -- news this set in motion some process where those who have been resistant to the idea say, whether i want to or not, i'm going to have to consider this more than i was before. >> yeah. i think the pressures that have come to bear on ge in terms of wait it looks at it's business are different than those faced by a big financial services

company. they're getting out of financial services. jamie dimon does not have the luxury -- he wouldn't view it that way -- doesn't have the opportunity to get out of financial services. that's more a sense is bigger not better? in this kay, as you well know it was more about the portfolio construction of the company and the fact that they simply can't earn the returns on ge capital that they could have prior to the crisis its the multiple. they want the industrial multiple not the financial services. >> right. >> that's appropriate. jamie dimon would get rid of the mortgage business if he could. but he can't. he's involved in universal banking. >> he'd rather have 20 multiple than lower multiple but yeah that's not easy to achieve. >> ge aviation based in cincinnati ohio jeff immelt hometown guy. >> registered in dublin my mistake. >> big employer in cincinnati. next on "squawk on the street," the apple watch in stores around the globe. but only available for preorders. you want you, you better get it fast. supplies low in the u.s. and china. the $10,000 apple watch edition

already out of stock there. we'll take you live to apple's flagship store in new york when "squawk on the street" comes right back. it gets talked about... ♪ ♪ ♪ so you can live the way you live, and enjoy all the rewards. chase sapphire preferred. so you can. i take prilosec otc each morning for my frequent heartburn. because it gives me... zero heartburn! prilosec otc. the number 1 doctor-recommended frequent

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♪ ♪ where do you go i want to know♪ ♪ if you want to look at the new apple watch, you head

obviously to the apple stores 3:00 a.m. eastern time peep's first chance on the east coast to get to try on the watch and see if they might want to buy. did they have to make an appointment? jon fortt at apple's flagship store at fifth avenue in new york. do you have to get an appointment to see the watch? >> reporter: you do simon but it's not as hard as you might think. go online go to the apple store app, make an appointment that way do it on the web. also go to a store, it turned out online the earliest appointment in the afternoon after 3:00 but a work told me i ask ask slip you in at 10:00 a.m. he didn't know i was media. also inside you might wonder who are the people who are really taking a serious look at the edition, the gold watch? they say the first person in line the first people a couple celebrating their 50th anniversary this year, they're still inside taking a look at

that. i asked if they've owned apple stock for a long time. they didn't know. decent sized crowd. not much bigger than your typical day. but a couple of people i talked to looking at watch said they'd already preordered. they came in to try it on see how it worked because they ordered sight unseen. you've got loyalists here. it's hard to gauge what actual demand is from an event like this where people are just coming in to look. if you're me it's hard to gauge. apple is getting a better gaugebase on what they're ordering in different geographies. the larger size was a bit more popular, a couple of people that i talked to. who knows if that's representative. as months go on and apple gets a better gauge and these things go on sale and vailable we'll see more lines and get a better sense of what demand and supply really. >> jon fortt in midtown.

markets higher at this hour dow's close to session highs, 30 points up. let's get to our cnbc contributor, pulitzer prize winning "new york times" columnist jim stewart. >> good morning. >> i'm reflecting on the week. plasive deals in energy and pharma, fedex, right? you had the watch. ge today. i mean, it's -- >> it's an exciting time. >> what's first at the top for you? >> a couple of things, sometime i've been talking about, europe i thought undervalued and there was going to be a move. we've seen that move. emerging markets looked undervalued they're moving. look at china. i have to say everything's looking valued here except maybe energy and commodities. if you really want to be a contrarian and be early here commodity cycle has been moving against commodities now really since the financial crisis. some of the energy deals look like people are bottom fishing, that's a bet that these things are going to solidify in the future and that may be one pocket that is left for

long-term investors. >> to build on that question you've got a lot of fed talk and some trying to figure out is it june, september, it looks like september. you were on the brink of earnings. we've got the strong dollar what happen do you see as the catalyst for the market right now? is it this kind of corporate deal activity? >> that's always a healthy sign i think. i think it does suggest there's a lot of smart monies that sees upside potential. i think it's bullish. now it looks more september than june. they're data dependent. we're not going to get second quarter data until june. they're not going to have that for june. i think it's looking pretty sure we're looking at september. i don't think people should get hung up whether it's june september. it is going to go up. gradually going up, people are adjusting to a smooth trajectory. i don't think things are screaming by but it's a healthy environment. >> worst earnings seasons for

six years, arguably a buying opportunity in do you look through the figures -- >> you've got to look through the figures but it's only a buying opportunity if stocks go down on the earnings news. looks like investors are so far being pretty farsighted and saying we're going to discount the last quarter results because of the weather, weird situation in. the dollar has stabilized that downdraft pressure on u.s. earnings is going away. >> what about the news mohammed el-arien is in cash he's not in the public markets which we read the stock market or the treasury market that he's gone into other areas, private equity and start upups but not in the -- >> i always say, i don't market time. i certainly don't mark time with 100% of the assets dint think it's crazy to be in cash with valuations. on the other hand i wouldn't do

that because no one's ever succeeded with that. good luck if he can. maybe he'll be lucky. i think it's a risky strategy. just mentioned my column there's a lesson for investors, they're being investigated because they had 83% of in investments in a single asset. they count take risk with anything else. they went into alternatives. guess what returns on the portfolio was last year? 1.6%. when the average endowment went up 15.5% the last fiscal year. i think the message there is don't market time. diversify. make sure you have a lot -- the risk is spread over a lot of different sectors. >> you sound like you think there are fewer things to buy than there were a year ago? >> yes. i do. they've all gone up. looking at pretty rich valuations. europe, i've been high on europe, but the europe p/e

values are higher than in the u.s. that can be justified by the future earnings expectations. but it's all looking pretty -- >> that's not good news. mix is less tech focused, for example in europe. that's not good news actually overall. >> certainly less growth. >> yes. >> europe is less growth oriented sector. so i think that these values are starting to get fairly rich. >> the euro gone back to weakening ways. general electric huge move, up higher, 9% right now. any concerns about $50 billion buyback in the context of seeing a record amount of share buybacks? >> i'm concerned at this level. as the strategy for ge you know agnostic about conglomerates who will get the better deal? ge or blackstone? >> exactly the question we were asking earlier. >> who knows more about real estate? who is better at managing it? who is better at maximizing

value there? i don't think i need to answer. >> jim come on. both sides can win. >> true. >> you want to dispose of an asset, do it quickly, getting a decent price on the marketplace, and blak stone has capital that can make it happen. >> wells fargo. >> and wells fargo buying $9 billion, that's part of the 23. >> welch says we want to be the best at what we do. it doesn't matter how many we're doing as long as we're the best. has ge been the best at managing these assets over the last you know eight to ten years? i think the answer has to be they've slipped from that standard. in the sense if they can't be the best at doing it they should sell to someone who is better. >> jim good to see you. >> thank you. >> jim stewart. new vehicle sales surge, hitting the highest level for nine years, big profits for auto dealers. find out just how much the dealers raked in and what it means now for the auto industry when we come back this in friday morning.

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financial noise financial noise financial noise keeping an eye on the dow jones industrial average, up 43

and at 18,000 obviously key psychological level, and the first time that the dow has hit this level, 18,000 in the month of april. last time we saw it was the end of march. just watching here. stocks go up five sessions of past six. new vehicle sales surging and auto dealers are cashing in. phil lebeau, a glimmer of hope on the recall front for a change? >> a little bit, those are starting to come down. we'll talk about that in a little bit. new data from the national auto dealers association showing how profitable it is to be in auto dealer now. last year the most profitable year ever for auto dealers here in the u.s. compared to with five six years ago when business was hurting then had record high revenue, brought in $806 billion, you do all of the math it works out average dealership, before taxes, posted a net profit of more than $1 million. the profit margin was flat compared to with 2013 at 2.2%. look at auto dealership stocks

investors are realizing this is where money's being made. look at the returns for these publicly traded auto dealership stocks over the last year. one reason why the dealerships have done so well because of the service side of the business has been extremely busy. a lot of that is being driven by the recall work that they've done in the last year. but if you take a look at what's happened with recalls in the first quarter of this year relative will last year we're seeing a big drop. first quarter, just 5.6 million vehicles recalled. down 41%. the big of the recalls this year are with air bags compared with last year we were starting to see the surge of recalls related to the general motors ignition switch recalls. the bottom line is this when you look at recalls over the last five years, there's that big clunk of recalls, that record number for 2014 of more than 63 million vehicles, and it it drops down this year. carl, there's a lag effect here. talking with the ceo of group

one, he was saying look people who have had recalls sent to them they still haven't come. those people are going to be coming in all of that churns the market brings customers into the showroom a big factor why the dealerships had a big year last year. >> phil it's also worth pointing out, of course the unique position that these dealerships have they're near regional monopolies oftentimes yi warren buffett is such a big buyer. he recognizes the monopolistic style power they have. and that's valuable. >> they've got state laws in their favor. franchise laws are as strong as ever. >> as we saw with tesla. phil, thank you. when we come back ge exiting financial services industry cantor fitzgerald looking to expand. ceo, shawn matthews will talk to us live. dow up 47 points. back after a break. it gets talked about... ♪ ♪ ♪

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i'm cottny reagan. defense secretary ash carter meeting with south korea's president in seoul today. carter stressing that the u.s. is committed to protecting south korea with joint defense forces and that it would help keep stability in the region. venezuela's president says his government has collected more than 11 million signatures against an executive order signed by president obama sanctioning senior officials of his administration.

he was joined by bolivia's president outside the presidential palace. a suicide bomber targeting a convoy of u.s. troops in eastern afghanistan killed three afghan civilians and injured four more. the attack took place outside the gates of the u.s. military base in jalal la bad. the area hit hardest by yesterday's tornado in the midwest fairdale illinois homes ripped from their foundations, littered the ground with debris. one woman was killed and there are at least seven injuries. that's our cnbc news update for this hour. back to you. dow's up 46 points helped by ge. announcing that it is shrinking largely exitingite financial services industry. today, jeff immelt saying quote the business model for large wholesale funded financial companies has changed, making it increasingly difficult to generate acceptable returns

going forward. we want to welcome shawn matthews, ceo of cantor fitzgerald. shawn, want to talk about markets and volatility but on the news of the day with ge as one of the largest, independent financial services companies, i'm curious to hear what you think of ge's move to get out of the business. >> i think people are going back to core competencies. ge makes great products but a finance company when they thought earnings power was there earnings power not as significant as it was in the past. they go back to core competency which is great for us more opportunities to build out our franchise and get into the origination side on asset based alignment. >> shawn, arguably, it was a core competency the seventh largest bank, still, i think, in this country by size. they were the seventh in the world, if memory serves me correctly. there's an issue here about shadow banking, they want to exit because it's not the business it was. you from notes are looking to

expand into shadow banking. why the different approach? >> shadow banking, it's not a bad word. we are the originator and securitizer of the product and sell to to people. when you look at the finance world and how it evolved and now is going back in time it's essentially a model where you take assets and you redistribute the risk to the people who are running it. the wave of the future bark in time's '80 and '90s style thought process. it's commercial banks will be commercial banks again. you know the large-scale players in the finance space are going to look differently, and we're in here trying to continue to grow our franchise. >> will you be buying assets from ge, shawn? >> no. we may help them redistribute their risk but we will not be buying assets. >> i want to ask about trading. you run a big trading shop trade as a primarily dealer with

the fed and treasury. given what we've seen the past quarter what are you looking for out of the bank earnings next week? you think the boost in volatility especially foreign exchange, is going to be a big help? >> i think volatility's picked up a little bit which is good from a sales and trading standpoint. i think the banks will do a little bit better. nim is still good. net-net, the first quarter will look better than the last two quarters. >> net-nim, net interest margins which brings us to topic of interest rates and treasuries and when the federal reserve is going to hike interest rates. betting on a move in september? do you think that the bond market's going to react to that or is it already in the market? >> i think that the fed wants to get off zero interest rate mentality, so they will raise rates though we've seen data come softer over the last few weeks. so, they're going to raise rates this year. it's priced into the marketplace. i think they'll go as opposed to saying zero to 25 maybe 25.

so does it really move the market in any material way? no it doesn't. >> as you know one of the big of the things we've got at moment the qe from the european central bank depressioning treasury yields here. your idea here your trading idea, to sell bonds especially european sovereign debt. do you believe there's a bubble and if so, is it about to burst? >> i think rates are going to stay low there for a material period of time. the issue is you really can't sell them effectively, right? when you look at it they're hard to borrow, you can get bought in trade agent negative 200 basis points plus as a short. they're very hard to short right now. and you have the sovereigns actually buying their debt back. there's a crowding out effect. it's not logical in today's day and age to be negative yields

for out five years or so but that's what's the reality and some places the world. i think it will change but it's going to take a little bit of time. >> you think this reversal we've seen in equity markets with the strength going to europe now trading at a record high japan, some of the qes where monetary policy's loosest, out of the united states is going to continue for the rest of the year? is that the big theme? >> i think europe is a couple of years behind us. i think their equity markets are in good shape and will continue to rally. in doesn't mean our market won't go up. you probably rather be in europe now because like you said easy money that's out there. but in generaling i think the equity markets are okay especially from the u.s. standpoint certainly better in europe. and they're going to continue to go up. >> finally, shawn, interesting week of debate regarding that october day where we saw extreme volatility in the ten-year jamie dimon asked about it -- was asked about it this week said it was a fat tale event.

are you worried about liquidity on that front over the medium term? >> i think liquidity in general has gone down. so if you look at the amount of capital that services the amount of assets under management and when you look at financial services sitting in the middle there's not enough capital, right? there's really a dynamic shift where all of a sudden asset prices can move significantly because there aren't that many players who are providing tremendous liquidity in the middle. people have gotten bigger financial services community's gotten small somewhere it does create a significant amount of volatility. we've lived in a low volatility environment but when the world changes we get back to a business cycle thought process, there will be substantial amounts of volatility. >> yeah the question is what happens in the next crisis? we'll leave it there for now. shawn matthews, ceo of cantor fitzgerald, live this morning from the trading floor down there. coming up recodes kara swisher will give us her take on

the apple reorder day what it means for the company. also ahead, marvel's new foray into television starting today with dare devil on netflix. will it be a success for both of them. all that ahead on "squawk alley." we'll be right back. doug. you've been staring at that for awhile, huh? listen, td ameritrade has former floor traders to help walk you through that complex trade. so you'll be confident enough to do what you want. i'll pull up their number. blammo. let's get those guys on the horn. oooo looks like it is time to upgrade your phone, douglass. for all the confidence you need. td ameritrade. you got this.

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e financial noise financial noise financial noise financial noise ♪ ♪ preors for the apple watch

started early at 3:00 a.m. eastern time. carl was an early buyer. make an appointment at an apple store, finally to try on the watch. josh lipton live at an apple store in palo alto california. i imagine it's too early for any of that yet, josh? >> reporter: that is right. still quiet here at this apple store in al low aalto but that could change when the store opens in two hours then expect to see customers start coming in and test driving the watch. even if they find a watch they want they might be too late. already you're seeing online that almost all of the models won't be delivered until late may or even later. in fact last check there was one model that was available on april 24th, the official launch date. you know this launch is unique. you're not going to walk in buy the product, walk out. focus is online. apple's retail chief said the company's taking orders

exclusively online during this initial product launch because she thought that was going to be the smartest way to offer the most selection to as many customers as possible. still, though when we look at what we expect to see today, no gene munster, 300,000 preorders in the first 24 hours. a million over the first weekend. he was calling for 8 million overall of 2015. we're going to be at this store all day talking to customers and also maybe getting a glimpse of ceo tim cook who has been known to make a guest appearance at this store. so stay tuned. carl back to you. >> thank you very much josh lipton out west. when we come back rbc's mark mahaney joins us live. which stocks are his top pick as we get set for earnings season. the pursuit of healthier. it begins from the second we're born. after all, healthier doesn't happen all by itself.

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welcome back to squawk on the street. shares of nokia, according to a boom burg report the company's map unit is seek-- see the shares

spiking up 3.5%. this is the remaining company of network and technology infrastructure that's left after it sold the handset business to microsoft. simon, shares spiking on that bit of news. >> thank you very much. despite the talk of bubble in technology and silicon valley mark mahaney out with a new report ahead of tech earnings on the public markets and the number of names clearly trading below or above the historic multiples. where is the value in the internet arena. joining us now, from one market with a preview is rbc internet analyst mark mahaney. one market being our new studios in san francisco. welcome. nice to see you again. >> good morning, simon. >> i'm just going through the note here. the context seems to be the degree to which a lot of these international players, they are international, the big caps will be hit by the foreign exchange head winds. that still for you seems to be the main headline and point of engagement if you like?

>> simon, i'll make two points. first, yes, fx still an issue. the large cap internet like large cap tech have material international exposure 50% of their revenue and profits. that's still a pretty material headwind maybe in the back half of the year a setup for revenue growth acceleration but not yet. valuations we started three months ago talking about trough valuations. this sector got beaten down oversold, we thought. we've had a nice recovery in some, not all of these stocks and in some of them the valuations aren't as attractive going into these as three months ago. we see a couple interesting plays. google at 17 times earnings priceline at 17 times earnings for good assets are still attractive values. >> i have here your longs is amazon priceline and facebook. is that correct? >> yeah. that's correct. our top three picks with a 12 month outlook, not necessarily for the quarter, would be nose names. amazon is very interesting as we get the disclosure on aws profits or lack theref and what

that means for the company's core retail profitability. we think there will be a positive surprise there. >> question relating to the overseas competition for these big technology companies. it hits them before an exchange moves but talk about the pressure on margin and pricing. if these companies are in the gadget business aren't they going to have to start to lower their prices to compete with some of the local players and is that already happening? >> yeah. that probably sara is almost happening for the gadget companies. most of the internet stocks steer away from that. amazon is your gadget company and always gone in probably as that lowest price competitor in the space, lowest cost competitor in the space too. for the other names, they're driving down deet flags, but, you know advertising names and travel names benefiting because they usually come in with the lowest cost items out there or the efficient advertising model, that's google something will come along better but yet

invented. you have that deflation that benefits these kind of names. >> you say incrementally constructive going into the season earnings season. linkedin, alibaba and yahoo! am i right? >> that's correct. >> and then the riskiest near term stocks expedia and amazon. the action on alibaba has not been encouraging to anybody. >> well actually you're absolutely right about that. the question is are we washed out on alibaba? and our point fundamentally was we've had a couple negative news items, one was very much anticipated, the lockup expertation, another one in september, some fraud issues and problems with mobile monetization. our take around $80, you get 30 times earnings for a name like this that dominates chinese on-line retail that's where the risk is very much washed out of the stock. we think the stock has a floor in this space. we may be kind of tapped out on the high side until we get through the september lockup but down in the low 80s we think alibaba is a very compelling

long. >> okay. what about zillow and trip which are two negatives, which is the most dangerous or the clearest short from your point of view? >> well i don't know about a short. we have a hold rating on zillow but we are highlighting they've closed an acquisition of an asset called trulia that had strong deceleration in the metrics and revenue. they've had a little bit of disruption in terms of the listing. the traffic trends we've seen have been mixed, the survey work we've done in on-line real estate has been mixed. we would be cautious on zillow. we're not buyers of the stock near or long term. near term we think there's more risk with this name than any others in the large cap space. >> are you buying an apple watch, mark? >> probably at some point. i'm not going to stand in line for one, but i probably will. >> do you think there will be -- because it is said that in silicon valley, there hasn't been a huge take up of smart watches in general. do you think this one will move the needle for most people or

people will buy them? >> you know i'll defer to my colleague on apple, but look there's a broad move towards wearable devices. now i wore my google flas for a while and didn't get much traction. we're going to see rev two, rev three, rev four of these devices. people want internet connected devices in a lot of ways. i don't know if this watch wins or not but you know i feel strongly, that some watch will win and probably in the next three years and the question is which rev is it going to be. >> oddly enough i think google glass would have suited you. mark, good to see you. have a great weekend. >> thanks simon. >> from rbc in san francisco. well on that note let's send it over it to jon fortt live at the apple store on fifth avenue with a look at what is coming up next on "squawk alley." any action? >> quite a bit actually i found somebody in there who isn't impressed with the apple watch. the full range of reaction coming up. evernote raised quite a bit more money. a look at what that cloud

start-up is doing. and netflix's daredevil not hard to see that it's a good addition to that company's lineup. all that and more coming up on "squawk alley." tune in.

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. we're seeing a mini rally across the board. looking at the dow specifically simon, it is up 64 points above 18,000, first time we've seen that in april and the two stories in focus are both dow members. general electric the biggest gainer pushing up the dow almost 8% on the announcement it's getting out of the ge capital business. it was a drag on the dow, now higher as the apple watch hits the stores. >> $50 billion of buybacks from ge 20% of the market cap. extraordinary. carl over to you. >> it is 8:00 a.m. at netflix headquarters in california and 11:00 a.m. on wall street, "squawk alley" is live. ♪ ♪

>> that was our tribute to "game of thrones" that premiers sunday on hbo. joining us for the hour jon steinberg ceo of the daily mail north america. call la out today. jon fortt live at an apple store in new york city where the company is previewing the new watch. we will begin, of course, with general electric shares rising after the company said it will sell most of its assets related to ge capital and put the bulk