don't die. you pick yourself up and keep going. you've got to take risks. >> you can't retire. you've got to reinvent constantly. >> case in point right here. thank you, guys. >> thank you so much. the book is "the real-life nba." >> so much great stuff in there. >> that does it for us today. right now it's time for "squawk on the street." >> a day for ipos. etsy and party city giving away candy, literally. we'll talk to the ceo of all three companies. welcome to "squawk on the street." i'm carl quintanilla with simon hobbs and david faber. cramer is off and sara eisen is in washington. we'll have a series of big interviews including stanley

fisher and the eu trust complaint against google and world bank president jim young kim. we wade through earnings from goldman and city. try to hang on to 55 and the ten-year around $1.08. netflix shares poised to open at all-time highs. they did beat expectations. netflix issuing upbeat subscriber guidance for the current quarter. we know what happened to the shares after the bell last night. up 12% to $530 and change. fpr with a price target of $900. i thought that $750 the other day was aggressive. >> i don't know what the implied multiple of 900 is. subscriber growth is what shareholders are most focused on. not earnings per share or anything else. there is no doubt netflix did better than its own estimates

and many of the estimates of analysts that follow it. international becoming an important part of this company. the margins over there start looking worse rather than better. you've got to rely on the u.s. on that front. again, it's right now all about growth of that subscriber base, which is 62 million now, i believe. >> yes. fbr argues they see 180 million global subs by 2020 60 in the u.s. alone. they argue international is an opportunity. 6x u.s. earnings was a miss. 38 cents misses 69 because of currency. his point on the call really was two things. one that hbo now is not arrival, per se. they can co-exist. it's a war now on linear television, which he says had a nice 50-year run, which is apparently now beginning to come to an end. >> it's very interesting he

should frame it in that way. today ever core repeated a sell. specifically what they point out is there will be new entrance to a well resource into this field. i don't know if hbo becomes that call down the line. they point out free cash flow has gone from positive $23 million to negative $163 million. they say in valuation perhaps shouldn't be as high as it is. clearly momentum is there. i think it's 800,000 subscribers above what they themselves forecast. >> estimate was about 4 million and almost 5 million in three months. >> listen knows who have been nay-sayers continue to talk about the off balance sheet, liability in terms of the way they account for their programming costs. all the new programming, of course. it is many billions of dollars. amortization policies. none of this resonates with shareholders who again are really focused on their ability

to get to perhaps they will get to that 120 million sub number. you can't doubt reed hastings. we are at perhaps the earlier stages of a true change in the way people view things. what it means for that ecosystem is crucially important for those who invest in so many of these media companies as they are trying to slowly but surely adjust to what is going to be this world of what we called over the top for quite some time. different offerings. eventually the dissolution of the cable bundle. that will take a long time. we said there will be quite a few people for whom it makes sense to pay for a bundle. >> obviously, heavily shorted name. must have been a lot of covering going on last night. we'll see if the stock goes down. >> three companies making their wall street debuts each pricing their ipos at the top of their expected ranges. etsy pricing at $16 a share,

valuing the online shopping marketplace at $1.8 billion. party city pricing at $17 a share with a $2 billion valuation. the not uncontroversial high frequency trading firm virtue financial pricing at $19 a piece. we'll bring you all their opening trades respectively during the course of the next two hours maybe followed by interviews with each of the ceos. let's head down to the nasdaq where john fortt has more on etsy's ipo. >> they've got the sellers out in front of the nasdaq in times square showing their wares. pretty festive over here. they are going to ring the bell here. here's one of the bells they are going to ring. you can buy this bell on etsy. they've got sellers here who are going to be ringing the bell if

you look at etsy and that $1.8 billion valuation happens to be just about 1/10 the size of amazon. if you think where they are hoping to fit in the e-commerce space, if amazon is like safeway, etsy wants to be whole foods. some stuff is more expensive. they are unapologetic about that. it's unique and crafted in a way that is not about efficiency and squeezing every penny out of the supply chain. they want to give the feeling of everybody able to prosper. they say in s-1 2/3 of their manufacturers in their ecosystem have fewer than 20 employees in manufacturing. their buyers are also very loyal. 78% of revenue, people who came to etsy were repeat purchasers in 2014. that is impressive when you consider their growth overall was quite strong. they also had a number of new people coming in. overall question is how quickly

can they expand internationally? how quickly can they offer more seller services that gets them more revenue in the chain. of course profits. they are not profitable. they might do things to uphold their culture that don't line up with getting profits quickly. we'll ask the ceo about how important profits are to him and when they might come. all that coming up as they get ready to trade shares the first time. >> i think they said explicitly they may never be profitable. >> you don't know how much of that is boiler plate where they throw that into the documentation. how do they think about profits? do they think of them as being important, not for the sake of just making money, but for being a viable way to spread their mission going forward? the old hp model of profits? curious how he talks about that on a day like this. >> we should mention the structure of the deal. they reserve, i think 15% of those shares off the small

investors. >> 5% i believe it is. they can get them in allotments of $20 up to $2,500. they are opening it up to their community, as well. they seem focused on this isn't about us about the people at the top of the chain. we want to bring our sellers in to ring the bell. we want to make the ipo accessible to them as well. >> alibaba was very focused on their book. these guys kept the book very small. clearly nothing like the size of the alibaba offering but very small in terms of any institutions getting in there. not going to get a lot of hedge funds flipping. they are not going to make their lunch money as they often try to do when they think there would be a first day pop. from a new york point of view it's one of the first companies of this era that's gone public from this new world, if you will of silicon valley whatever you want to call it. it's brooklyn.

pfizer came out of brooklyn. >> brooklyn representing. a lot of people were disappointed tumbler sold to yahoo rather than going public. they are looking for a market cap close to $2 billion. that is a big deal for a company to go public to bring its culture to the fore rather than be subsumed by somebody else. that is a big deal for new york. >> we always talk about what i call creeping ipo marketing inflation. that is the show that gets put on at the various exchanges. we'll see some of that at party city. what does the nasdaq have planned? >> they have these big orange booths in front where the sellers have their wares in a booth. it's like a craft fair happening on times square. it's amazing how well it fits. i thought times square little booths, that's cool. then putting the goods front and center like this bell. a number of sellers will have

their bells. they will grab this from me as soon as i'm done here because they will literally be ringing this and other more modern-looking bells, as well as they are ringing in the nasdaq this morning. >> john fortt, thank you. he'll be joining us throughout and we'll be watching etsy and talking to their executives as well. let's get to some other earnings. goldman sachs reports quarterly profit of $a many 5.94 a share. goldman raised dividend to 6 cents from what had been 60 cents. citi out with better than expect ped earnings. revenue shy of what some on the street had been forecasting. i was able to make a couple calls on goldman. numbers look very strong. whether it's investment banking. led in part by a very robust m&a

market which their financial advisory fees were $961 million. institutional client services always a key for this company. $5.43 billion, higher than the last quarter. goldman had a very nice quarter. the stock looks to be trading right around what would be a 52-week high. at this point, i don't have it up that much. at least looking at the assets. >> hit a seven-year high after jpmorgan reported results earlier in the week. four-year high on quarterly revenue. investment banking at 1.9. highest since '07. back to precrisis levels to find banking levels this robust. >> he said we have to maintain what we are doing

internationally around the world. if you look at the european banks, they are going to pull back further from where they are now which is ground for them to make up. >> if you look at what was available to him, it's clear he had to go all in with what he had at goldman sachs. they did that and what appears to be growing in significant success. that firm has known success for a long time. they did buy back 6.8 million shares over the course of the quarter, as well. that's about $1.25 billion. i usually like to look at comp which came in at 43com ratio. >> 42 from 43. >> we'll talk about that and whether the money center is where all the action is. sara's interview with the eu competition commissioner on the anti-trust complaint against google. big "the washington post" piece calling her a tough cookie. >> at the nyse we are getting

set for the ipo of party city. one more look at the premarket a day after the russell hits those all-time highs. the s&p is not too far away from its own. what if a small company became big buiness overnight? like, really big. then expanded. or their new product tanked. or not. what if they embrace new technology instead? imagine a company's future with the future of trading. company profile, a research tool on thinkorswim. from td ameritrade.ipos

sara eisen sitting down with the european union competition commissioner for the first word on the anti-trust complaint they released yesterday against google. sara joins us from d.c. with the latest. what mood was she in, sara? >> she was in a pretty good mood. she literally just landed in washington, d.c. we are talking about the woman of the hour commissioner vestager filed those official charges against google for competitive practices. i started by asking her what was behind the decision after several years of investigating google and even making settlement talks of bringing these charges now? here is what she said. >> i think that there are reasons for doing this. to say google big successful company, very dominant in europe

in general search our preliminary view is they have used that dominance to promote their own services. you can't do that to european law. >> i asked her how much influence and how much pressure was put on her by other american technology companies like microsoft, lobbying against goog until this case and whether that was a big influence in this decision. >> a number of the companies who complained about google are american, but more companies are european. you find both. you find the people who complain being very direct and also very balanced about it. i think everyone admires the success of google but they also want google to play by the rule back. i asked if that was the influence in the decision? she said no you can't. we have to hear the evidence.

and google android, she said we are in the very early stages of that. we talked about comparisons people are drawing between what's going on with the eu in regulation and google versus what happened to microsoft several years ago. the billions of fines microsoft wrapped up. very interesting comments i'll save for "squawk alley" about comparisons there. we talked about other investigations apple over its tax practices in ireland. amazon over tax arrangements in luxembourg. i asked if she would be as tough on them as google. all that will be later in "squawk alley." i asked about this idea she was a tough cookie more tough than they are predecessor. she's only been on the job since november. she said that may be a fair statement, but she said she tunes out all the noise. i talked to a lot of european commissioners in my day. she was very honest and candid. look for her to sharing a lot more of her conversation. we'll have later in this hour

the president of the world back jim young kim and the host of today with very interesting thoughts on the emerging markets right now. >> interesting her predecessor didn't file that statement until she came along. we did talk to google's head of government affairs for economic policy in europe on "squawk alley" yesterday. his name was adam cohen. here is his response to the eu charges. >> look at the tremendous innovations. we can't stand still. we face enormous competitive pressure. we'll respond to that in the marketplace. >> can i just say not to underestimate the politics of what is going on here. the last competition commissioner explicitly complained of what he described as defensive and irrational pressure from politicians in europe to reopen the google case. he is gone. the new woman in the case decided to do that. i think that is important. >> if sara didn't have a bunch of high-profile guests when we

come back she'll talk with federal reserve vice chairman stanley fisher. what he has to say about the u.s. and global economies. premarkets relatively weak. we got good numbers out of goldman and netflix. ♪ ♪ the pursuit of healthier. it begins from the second we're born. after all, healthier doesn't happen all by itself. it needs to be earned... every day... from the smallest detail to the boldest leap. healthier means using wellness to keep away illness... knowing a prescription is way more than the pills... and believing that a single life can be made better by millions of others. healthier takes somebody who can power modern health care... by connecting every single part of it. realizing cold hard data can inspire warmth and compassion... and that when technology meets expertise... everything is possible.

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the first and only car with direct adaptive steering. ♪ the 328 horsepower q50 from infiniti. goldman sachs beating expectations. citi rising on its quarterly results. joining us on the phone is bank analyst from. i think the response was it's like the days long ago they beat the numbers so handily you have

to make sure the numbers are right. are we back in that neighborhood? >> i don't know necessarily back in that neighborhood but it was a strong quarter for a number of businesses particularly investment banking advisory and of course fixed income trading. >> why the disparity between the likes of a goldman in terms of trading revenue down at citi up at goldman? what's going on there? >> well part of that is just a function of the fact citi had a good quarter a year ago. it's important to remember that both are up significantly sequentially and citi put up a $3.5 billion number. that is a bit higher than goldman's. i think that got lost in the noise today. >> that is good. you've got loan demand better across the board. legal expenses regulatory expenses at least starting to normalize a little bit. obviously client activity is looking more robust. is the regional over money center bank trade coming to an

end? >> i'm not sure that it is necessarily. some of the capital market trends will probably continue we would argue, for example, the strength in m&a advisory is probably in the early stages of a secular trend. with the regional banks, we remain concerned about credit exposure to the energy industry and how that managed the next few quarters. >> in goldman's case comp ratio comes down a little bit. there were comments about improved operating leverage. how sustainable is that? >> these levels of revenue, it's certainly sustainable. one of the beauties of the investment banking business model is that since comp is the biggest cost line item you can control it in both directions. as you get this rebound in revenue, the absolute level of comp goes up but the ratio doesn't have to increase as much. >> eric goldman sachs'

conference call begins in about six minutes. anything anybody should be listening more closely for on the call? >> certainly i think the two key things are the sustainability of some of these trading trends. secondly the use of excess capital over the next several quarters. >> eric thanks for coming to the phone. >> thanks very much. >> eric wasserstrom. >> opening bell five minutes away. three ipos on the docket.

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you are watching "squawk on the street" live from the financial capital of the world. opening bell in about 90 seconds. our director just said more cow bell which is what you are about to hear as party city rings the opening bell. they staffed the floor with supporters and investors in a bunch of different gear a bunch of different noise-making instruments which we are about to get a demonstration of.

>> i haven't heard cow bell until you heard them in the middle of the song. remember the cow bell instrumental? party city -- david, you will know this more than i -- loaded up with $2 billion of debt. there are still a number of questions over the business as an investment. we have two of the ipos today which paid close to the market then withdrew. it is not entirely plain sailing coming into this. it is obviously a growth party. >> nice exit for thomas h. lee, back to raising $372 million, valuation at almost $2 billion. we'll keep an eye on that. a bunch of bank earnings. the make row data was a bit of taking the shine off the morning. housing starts were a disappointment.

people can hear that. let's get a look at the opening bell and the s&p at the top of the screen. at the big board. it is party city. celebrating its ipo today. we'll speak with the retailer of party goods after the first trade. over at the nasdaq celebrating its ipo online marketplace etsy. we'll speak with its ceo after the stock opens, as well. i can't hear myself talk. >> did they ring the bell? must have. i didn't hear the bell. it's a lot of cow bell. >> with all of that take a look at the s&p. gainers at the start. not a surprise that netflix will lead the charge after posting

4.9 million subads in the first quarter, well above expectations. it's a bit of a short squeeze still hanging on to 530 with a hit after the bell last night. >> absolutely. 800,000 to start it. when are they going to stop? >> it is party city after all. >> has the actual bell rung? no. it has not rung yet. i guess the cow bell will have to do. >> somebody has to ring the bell. >> what i love is immediately people draw comparisons to the double-click party back in the dot-com boom that this is the sign of a top. it's just a wave of marketing ipos have become. >> it's interesting the first

call was the slowest quarter in five years. i think it was just 41 deals in the first three months of the year. it will be interesting to find out when they pull the trigger on the road show whether it was actually three weeks ago with that stock employment report and we are likely to have a period of calm in the markets. since then the s&p has risen over 2%. >> most annoying opening bell ever writes in one of our viewers. >> that may go down as one of them. party city if you are wondering, revenues seen between $459 and $469 million for this march, for the quarter that end ed ed -- excuse me the quarter that ended march 31 2014 it was $433 million and $439 to $469

for the quarter that just ended. comp store sales up. we are not talking about a small company. over 800 locations already. to simon's points proceeds will be used to deleverage. >> they are going to open about 30 a year. i didn't realize the retail party goods industry is a $10 billion business. >> it's not a new company. it was founded after the war. it's almost 70 years old. what is interesting is the way they are framing it saying the price of what you sell at party city is so low relative to mailing or postal costs, we have a niche within bricks and mortar from which we can make money. they have grown aggressively through acquisition. you have this $2 billion of debt which is the private equity how they made their money. >> investors haven't been quite excited about delevering ipos as

they are about pure growth ipos. that said they seem to be relatively receptive to most everything that hits. we'll see 1850 to 1950 is the first range i'm seeing behind me for party city. >> we shouldn't ignore big large cap earnings. revenue was ahead, they raised their view for 2015. it's going to lead the dow. the index is down. jeffries, if you remember went hold to buy unh on monday. at the time cramer said look out for a good quarter, which turned out to be exactly the case. >> philip morris which has risen at the open. the tobacco giant beat estimates by 15 cents a share. profit of $1.16. it's also forecasting and

raising 2015 early guidance above where the market was based on better volume and market share. philip morris is also a top gainer at the opener. >> did want to share news out from yahoo and microsoft. just had a long running agreement in terms of microsoft providing search on the yahoo platform. they come out and say they amended that search partnership. they say it improves the partnership what they say will accelerate innovation and increase agility. some of the key questions here and i don't have them answered. they say the update includes improvement in two core areas. yahoo will have increased flexibility to enhance search experience on any platform. it's nonexclusive for desktop and mobile. they will continue to serve bing ads and search results and search traffic. microsoft will become the exclusive sales force for ads delivered by their bing and platform. unclear if that means there had been a previous arrangement, a

reduction in some way and positions at yahoo in terms of selling these ads? we'll see. overall, a lot of investors at yahoo are focused on the size of its cost structure and the size of its employment roles. there is a belief they are actively trimming that trimming expenses under pressure from activist investor joseph smith. there does seem to be that focus on it because, as we said many times, when you back out the value of alibaba, back out the value of yahoo japan, many saying you are getting that core business for nothing. there may be a reason for that. it's less profitable than it was. >> a couple other names to watch. panera having a very nice gain. we are talking up almost 12%. they increased their buyback by $750 million. that is going to be within a stone's throw of an all-time high for pnra. sandisk, 62 cents.

misses by four cents. worst performer on the s&p for the first quarter. this is their first revenue drop in two years and they are cutting 5% of the work force. a lot of people were prepared for a rough quarter out of sandisk. >> blackstone, as well. continuing to sell out some of its private equity holdings on real estate. assets under management grew overall. more than doubling a year ago. paying out 89 cents a share for the first quarter. you are getting a dividend there in excess of 2% just for q-1. assets under management higher on a year ago despite the headlines you might see. raising $30 billion of new cash for investors. partly for real estate and of course you wonder whether blackstone is a big player. >> he said we are an earnings machine. talked about the ge deal which fell apart a couple of times in the process over a few weeks. said this is not the picture of someone picking someone else's

pocket. >> right. they want to make that clear. i did some reporting on that as well. it does appear ge moved with fairly deliberate speed. blackstone was not aware it was part of a much larger announcement, which we spent a lot of time on friday discussing. mainly more or less the dissolution of ge capital overall from ge. they did move quickly. it's not as though they auctioned off those numbers. there's very few people can come to the table other than blackstone when you are dealing with real estate. they passed $300 billion in assets under management in blackstone. real estate is the largest single component of that. that's quite a number for them. before we get to dom, netflix, it's worth noting market cap is above that of cbs, which at $32.4 billion, netflix now worth a good deal more. a good deal more than cbs. i didn't get to what cbs made

last year but i guarantee it was more money than netflix. >> last night i saw it was a horse race between the two. dom chou joins us on the floor. >> this is fun and games. from an investment standpoint it's very serious. right now i have a lot of guys behind me here. you see the pit trying to open the stock for trading. the indications we are hearing -- you are seeing up on the screens, $18.50 to $19.50. those are not indicative for right now of what could actually happen. they are just up there to give people an idea of the market. i do have some of these guys behind me whispering in my ear they are talking about x million shares for bid at around $19. to give you an idea of what's happening behind me and you know this better than anybody, it's a whole bunch of guys getting together with all of

their client orders and trying to find one price that will clear as many buyers and sellers at the open. that is the price it will trade at. right now the indication we are hearing is $19 per share. it's interesting right now only because there are so many people here and so much interest in this stock because of the party aspect of this whole thing. it will be a very very indicative trade to see whether or not there is investor demand for at least this kind of consumer discretionary company coming from private equity backers. >> hail the cow bell. thank you, dom. two ipos at the nasdaq. let's not forget etsy on the not uncontroversial high frequency trader virtue. bobby is at the nasdaq to handle that. >> finally, some excitement in ipo land. i was getting worried. three pricing at the high end. i'm here to talk about virtue pricing at $19. that is the high end. in the next hour we'll have an exclusive interview with the

founder vincent viola. this will be interesting. virtu are controversial. they are a market maker but others call them a high frequency trading firm. we'll talk about the distinctions. and that famous controversial comment made in the s-1 last year they only had one day of trading losses in six years. that streak continued in 2014. what's the secret sauce? how exactly do they do it? of course they trade 10,000 securities across 30 countries. we'll talk about that and how they make their money, and the future of trading in the next hour. >> back to you. >> bob pisani at the nasdaq. let's get to rick santelli. >> good morning, carl. we could talk about normal all day long. it ir's easy to show you abnormal. something that is getting more abnormal. 24-hour chart of 10-year note yields. it is holding this very

important 186 level. if you open the chart to mid march, we are in a tight range. we need to pay attention if we start to close anywhere a couple of basis points below these current closing ranges in this tight trade you see there. why? you tell me why. let's look at at couple of short-term charts. bund. 0.7 basis points. the new intraday low. we'll see where it settles. does it end there? no. let's move around the curve a little bit. eight years i pointed to yesterday, negative all the way out to eight year. now the eight year is starting to build up those negative numbers minus four basis points. it doesn't win on the euro curve, the two-year bund is the winner clearly in negative surreal, rod sterling territory and minus 27 basis points but aha the swiss say, minus 87

basis points. central bankers think this activity is good for their economies and it's going to create pricing pressure. you've got to scratch your head on that one. if we look at the foreign exchange markets, you only need to show one chart. i'm telling you, traders are playing this range every day. we talk about 105 to 110, a two 0 day chart of the euro versus the dollar shows victory buying that 105 handle. back to you. >> thank you rick santelli. when we come back sara eisen is in washington and she'll have an interview with federal reserve vice chairman stanley fischer. first she'll talk with the president of the world bank jim young kim. party city indicated $19.50 to $20.50.

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take a look at post 8:00. we are watching for the ipo of party city. prices indicated $19.50 to $20.50. chances are you are familiar with the change.

designs and manufacturers a lot of its own products. more vertical than the likes of an amazon. it's drawn comparison to michael's which priced at $17 last summer and is up 59% since then. >> you are looking at a gain of $350 million to $400 million on the initial pricing last night. we are generating wealth, gaining interest as we move towards that. 860 locations worldwide. a strong wholesale business distributing in 40,000 retail outlets. offers 25,000 different products in its own stores with 40,000 overall. >> dom chu is manning post 8:00 for us. >> the indication we got, like you said right now what we are seeing on the screens behind us is anywhere from $19.50 to $20.50 range. a couple of traders said it looks like it's around $20 per share for a few million shares. we'll see it gets closer right

now. things seem to be calming down which they may be getting closer to finding that price and that order number of shares that will open the stock for trading and get that first trade out to clear the most buyers and sellers they can get on this opening trade here. $20 per share, again if you look at what it things are shaping up right now, this is going to give us a better sign of what is going to happen with the consumer market here. this is a company taken private a few years back. maybe these guys can get back to where they were when they took this company over. thomas h. lee and partners is the main private equity backer of this particular company. >> 860 locations. a lot of exposure to europe united kingdom, france germany, australia. >> i'm not sure we celebrate halloween quite the same way they do here. >> they do like to party.

>> probably not the same kind of trinket way. >> when we come back dow is down about 32. sara eisen with a big get, the vice chair of the federal reserve stanley fischer. the lightest or nothing. the smartest or nothing. the quietest or nothing. the sleekest... ...sexiest ...baddest ...safest, ...tightest, ...quickest, ...harshest... ...or nothing. at mercedes-benz we do things one way or we don't do them at all. the 2015 c-class. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. being a keen observer of the world has gotten you far but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform,

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the annual meetings of the world bank start in d.c. tomorrow. sara eisen is there with the first of two big interviews. good morning. >> thank you. i am here with one of the hosts of today's events. that would be president jim yong kim who joins us. >> it's great to be back on. >> it's an interesting back drop economically of what's going on. the developed world and emerging world switched places. the outlook worsened for the emerging world which you've done a lot of work with. why is that? >> there's a lot of different factors. the contraction in the russian economy, problems in the brazilian economy had an impact. we predicted in january 4.8% growth. now we downgraded it to 4.5%.

overall what we are seeing is that the lower oil prices have been linked and have contributed to lower commodity prices as a whole. latin america, growth prospects are still quite low. the countries that have benefited from lower prices are there, but the drag that russia and brazil these big economies -- exporters getting hit -- >> yes. this has been a real issue. that's one of the risk for developing countries. the other what's going to happen when financial conditions tighten. >> talking about a fed interest rate increase. are they scared of that? >> we are not sure when that will happen. there are different predictions. what we are saying to the developing markets, you've got to know get serious about structural performs. there is good news. if you look at india, very transparent monetary policy with clear targets now for inflation. fiscal policy. the prime minister has been clear about increasing efficiency of public spending and structural reforms. who would have thought he would

get done in a few months this goods and services tax which prevents trucks from stopping at every border to have to pay taxes. the fact he did that is sending a powerful signal. our own growth estimates for india have gone up. mexico, as well. a fantastically respected central banker strong fiscal policy and structural reform. what we are saying is if you do those things the market will recognize it. you'll be rewarded. >> what about china? you did recently downgrade your growth forecast for china. we learned it's seeing its slowest growth in six years. the question is how much appetite is there in china for imminent monetary stimulus and other pro-growth measures? >> we also have great faith in the chinese leadership. governor zo of the central bank and also the minister who is here this week. we have to remember when we talk about slow growth we are talking about growth between 6.5% and 7%. it's a high rate of growth in

the context of the world. >> for china, it's disappointing. >> it's lower than the 10% growth it had. we are seeing the impacts. lower growth in china is having a big impact in latin america. >> do you expect this easing to come through? >> what we expect and signals they've been sending is that they are going to stick to their reform programs. changing the growth model from one focus on investments and exports to one focused on con sums services increased productivity, that is a huge step to take. the thing that encourages us is despite these ups and downs and growth projections, they are sticking to the reform agenda. the resolve to do that is there. also the reserves to do that are there. >> while on asia, i was surprised to read some of your recent comments about the asia infrastructure banks. larry sommer says it is a big threat, not just to the world bank and imf but the united states as the back bone of the

financial system. why do you disagree with that? aren't they doing exactly what you are doing? >> if you look at the need for infrastructure in the world, this is the big, big problem. china in many ways has overinvested. has invested huge amounts. the rest of the world needs to turn their attention to investment. for example, in brazil and turkey, they have to do the opposite of what china is doing right now in moving toward a more intensive investment. there is need for that. >> the thing is the two structures competing structures wondering how relevant the world bank is in a world where the need is over there and resources are coming from there. >> the relevance of the world bank lies in two very very important factors. one is that we are a global institution. we have global knowledge. we have 2,000 ph.d. plus many more with masters degrees who have been implementing projects. it's a special knowledge.

it's knowledge on how to actually deliver. the need for that kind of knowledge will always exist in the world. it's very difficult for an organization to just start up and build that kind of experiencial knowledge. because of the need for infrastructure is huge we'll have a role preparing projects and putting implementation in doing the implementation of certain parts of it. procurement. we have safe guards. we have international safeguards that the private sector wants. they are asking us to bring our safeguards to prevent their reputational risk. i don't think there will ever be a lessening demand. the important thing is we'll have a record year this year. demand from middle income companies including china and india has never been higher. despite the entrance of anyone else there is room for our global knowledge will always be there. >> thank you for your comments on that. a lot of people were interested in hearing from you on the record. always good to see you, president jim yong kim.

big question here, what happens when the fed raises rates? we'll have the man to answer the question, vice chairman of the federal reserve stanley fischer in a few moments from d.c. back to you. >> in addition to that we'll get the ceos of the ipos today at party city, etsy and virtu financial. back in a moment.

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a number between 5.7 and 7.5is the number. it bests expectations by a bit. to give you a little context, all i need to say is november was 40.2. let's look at internals quickly. on the employment side a nice move from 3.5 to 11.5. new orders not as good. this is important. new orders dropped from 3.90 to 0.7%. you continue to monitor this the aftermath of the marketplace, 5s 10s and 30s haven't moved. the preopening in equities still

under pressure -- sorry, post opening pressure. welcome back to "squawk on the street". carl quintanilla, simon hobbs and david faber. you can see it's a big day at the big board and nasdaq. party sitting getting ready for opening trade. at nasdaq virtu financial and etsy getting set to open there. we'll talk to the ceos as well as executive chairman of virtu. sara eisen is in washington where she will sit down with fed vice chair stanley fisher in a live exclusive interview. that's coming up in five minutes. markets a bit weak. dow is down about 18 points. s&p trying to hang on to 2100. oil, though down a bit, still hanging on to a gain for the full year at 55.43. >> interesting to see if fischer can move those markets. clearly the big interview of the day, if not the week. >> shares of netflix surging

more than 13%. the company adding almost 4.9 million streaming subscribers in its first quarter. beating both its own and wall street's expectations for subscriber growth. netflix also issued an upbeat guidance on that for the current quarter. although it massively missed on its headline earnings per share. joining us from san francisco, mark mahaney. raising the price target there. >> good morning, simon. yes, we did. this was a very good subs quarter. the subs came in better than expected for a variety of reason. there is more market interest in streaming. this has the best value proposition in the market. with this original content, they are giving people more reasons to sign up and stay with the service. they are getting better than expected. they are showing ramping margins. that is key. it's not just subs. showing more profitability in the u.s. market and the market

is giving permission to expand that aggressively internationally. that's why the stock is up. >> international is going to cost them in terms of margins. is it your expectation the market will continue to reward this company as long as those sub numbers come in above expectations? >> i want to get back to something. david faber made this comment earlier about it being a sub story. i don't think that's the case. i think they need to show the subs, but if the model is profitable in the u.s. and over the last three years, margins have gone from 15% to 30%. the market is saying and we agree, that you can build a high-growth profitable business in the u.s. take that model and expand it overseas. so far they've shown that ability to succeed profitably in canada the uk and other markets. long term there is $50 in earnings power. that's why it's above even above 500. >> what is a long-term

sustainable arpu growth rate? what do you make of this "morning call"ing for a $900 target? >> i don't know about $900 and i don't know when but if this company can do $50 in long term earnings power the market probably puts 20 multiple on that. long term there is a pitch here for $1,000. arpu is a key part of the story. you're seeing it rise in the u.s. why? price increase is kicking in. it doesn't seem like subs have subscribers seem to have tolerated it very well. there's a lot of upper tier plans. arpu is rising long term. if you go over 100 million subscribers worldwide, take that up to $10, $11, $12 and margins close to where hbo is today, you get $50 in earnings. that's why the story is so compelling. >> this is clearly a momentum story. up 60% this year. market cap is only almost now $33 billion. to ask the other way around from

the evercorp point of view where they reiterated a sell the stock should be 30% lower on valuation grounds, their main concern is there will be at some point a scale deeply pocketed competitor that comes in on that space. at that point a momentum player of this nation could turn around dramatically. >> i agree. if there is one big risk here it's not the streaming story. it's not to the current profitability of the model, not to the content cost. they are getting big enough to manage those content costs. if is there a spoiler in the market, i don't think we've seen that yet. if there is one, it's amazon. amazon is out there. if they were to launch stand-alone service in typical fashion at $5.99 a month, that would derail this stock. that's the biggest concern i have. the other risks are there in terms of execution, as well. >> given the success of for example "game of thrones"

internationally, why would it be amazon and not hbo? >> it's a value proposition and price point. the content you get off netflix is broader than anybody in the market offers. they're increasingly offering you that edgy hbo material. they've got the family package there, as well. by the way, they are doing it at a price point that is dramatically lower than hbo now. and dramatically lower than any cable bundle out there. $8.99 is a steal for this content. >> to come back to your first point in terms of it being about more than subscriber growth if this company were to come in with a number below its own targets for subscriber growth given it's not generating free cash flow don't you think the stock would go down? >> yeah. we saw this two quarters ago. they missed the subs. this stock traded off 20%. even more than that.

yeah. there's a high wire act. i think that's true but i do think you have to look at the business long term. if you believe they can do $50 in earnings power, what you are doing is buying particularly aggressive buying on weakness. we started the year with this is our number two pick in the space. it's still a top pick but it's number five. there is more compelling risk/rewards. you can make money buying the stock here. >> when do they finally wash their hands of the dvd business for good? >> they have about 5 million dvd subscribers. they'll stay in there as long as those subs stay in. you can't get better selection than with netflix dvd. there's still plenty of things you cannot find on netflix streaming. there is a hard course base of users. they'll stay around 30 years and so will netflix' dvd business. >> the bundle will exist for all people for a long time. >> there are old movies on

there. >> thank you mark. >> we do have an opening on party city. dom chu. >> we have an open right now. it will open $20.50 it looks like right now. about 4.9 million shares traded so far. opening trade was $20.50. on the higher end of all those ranges we were giving throughout the course of this particular half hour. it did take about a half hour to open it up. we are now trading at around $40.70. a very quick 22% pop in the stock from a $17 ipo price. we don't know whether it's going to stay there or not, but it did take a little bit to open. let's see what happens. back to you. >> we are going to talk to the ceo of party city. now that first trade happened. what a morning down here at the big board. meantime, the imf and world bank

meeting kicking off in washington. our sara eisen is there live with a pretty important exclusive interview. >> good morning. i am here with stanley fischer, vice chairman of the federal reserve. nice to see you again. >> nice to see you. thank you. >> so here at the imf world bank meetings the economy is described as uneven and moderate. the global recovery. is that how you see it? >> yeah. it's very uneven. it's growing. but it's not growing spectacularly. >> united states is the bright spot or at least was the bright spot. current economic data isn't showing all of that optimism. is it temporary? do you expect a rebound here? >> there is a rebound under way already. see at what speed it proceeds. the first quarter was poor. that seems to be a new seasonal patent. it's been that way for about four of the last five years.

>> because the winters have been so cold. >> yeah. >> does that affect the trajectory of what the fed is going to do or not do this year? >> well it depends how quickly we come out if you look at last year, we had negative growth in the first quarter. then spectacular growth which made up for that. we don't know what's going to happen in the second quarter here yet. >> but the expectation? >> certainly a recovery. whether it will be spectacular or moderate is hard to say now. >> it does seem like from what we heard from various fed presidents and fed officials, they are itching to raise interest rates. is that true? you have this sense it is time? >> most people think it will happen this year but you don't want to get more definite than that. it depends on how the economy develops. >> are you fearful of not raising interest rates sooner than later? >> i don't think fearful is the

right word. we'll try to do it at the best possible time and we would like to see the economy beginning to grow again. and grow at a decent rate. we would like to see unemployment continuing to come down, and some signs that inflation is getting close to the 2% target is heading towards the 2% target. >> do you think inflation will hit the 2% target by the time it is time to raise interest rates? >> no. the requirement is that we'll be moving in that direction. we'll have reasonable basis for believing we are moving in that direction. >> optimism about the wage growth we are starting to see? it's little. not enough. >> there are more signs every day. lots of papers come through this is the turning point right now. >> let me put it this way. are you fearful of raising

interest rates? >> you always have to take account of the fact you may be making a mistake on one side or the other. we have to ask what will go wrong. i say if we get this in proportion we are going to be changing monetary policy from the most extremely expansionary we've been able to do in all of history to an extremely expansionary monetary policy. the interest rate is scheduled to go up if it goes up by 0.25%. we'll be between 0.25% and 0.50%. zero would be the lowest it's ever been. >> what is a 10-year yield below 2% signal to you? >> it signals in part the fact that the markets are waiting to see what we do. and when they get convinced we are going to be moving begin

moving the interest rate gradually to where it will be in the long run, we'll probably see a reaction. >> don't you think the currency market is convinced though? >> the currency market is convinced, but there are two sides to the currency market. the domestic side of that market seems not yet convinced perhaps of when we are going to move. we don't know. we look at what they think. >> you have to be taking the dollar strength into account right now when it comes to that decision. >> we've got two goals. one is unemployment, maximum employment, which is low unemployment, and the other is inflation at 2%. if the rest of the world is weaker and the dollar is strengthening, then we'll see some impact on growth. so because of its impact on the domestic economy, yeah we take it into account. we don't sit around saying the

economy is weak because of that. >> but isn't the economy weakening because of the u.s. dollar? >> the dollar is one of many factors affecting the way the economy's behaving. >> what about this idea monetary policy is very uncoordinated right now. federal reserve is preparing an interest rate increase at the same time everyone else almost is going the opposite direction. as a central banker that has to concern you. >> there are lots of discussions whether it's better for everybody to be coordinated, and if everybody was always coordinated and growing nicely then coordination would be great. if we are growing and the rest of the world is in trouble, i don't think we want to coordinate down. we'll vb happy if they coordinate increasing -- >> you could hold off.

>> we could, but that is saying we are taking a dimmer view of our growth and inflation than we actually are. >> it's been a very exciting day on the floor of the stock exchange. party city opened up ipos, there is a buoyancy in the markets. do you see it as the fundamentals to the economy? >> there were lots of complaints when the markets were very steady and there wasn't much volatility and the vix was low and all that. we are artificially keeping the markets steady. now there is a lot more volatility volatility. complaints about too volatile. >> are the markets too reliant on the super easy monetary policy from the federal reserve? >> well, we expect that the markets look ahead somewhat. i think -- i hope they are taking into account that the fed at some point is likely to raise

the interest rate and they can't depend on current situations continuing forever or beyond the end of this year. >> one thing propelling equities in part is the share buybacks in a record amount. more than a trillion last year 200 billion plus announced this year. is that hurting our economy that instead of investing in their long-term businesses businesses are buying their own stock? >> obviously, we would like to see more investment. whether it's those companies generating cash that should be doing investments is an issue. we hope each company is figuring out how to manage itself best with regard to investments and distribution of revenues. >> but you need to see more. >> we would like to see more investment, yes. >> want to ask you about europe. that was a laggard. coming to this imf world bank meeting, the outlook has

brightened for europe. do you see that as an improvement? >> yes. they have the impact of the lower price of energy and gasoline. >> and they have a cheap euro. >> and now they have done what everybody told them to do for a very long time. they are doing qe. it's far more successful at this point than be the general view had been before they started. so yeah they've got some wind in their sails. >> here we are talking about greece again. is that a threat to their nascent economic recovery? >> they've done a lot since the problem first began to i can't say inoculate. they've done a lot and have a very good probability of being able to deal with this. it would be a bad thing from the view point of the future of europe and so forth if that were to happen. it would also be a problem for greece. it's going to be very difficult

to deal with if it happens. it looks less problematic than five years ago. >> you are not seeing contagion in the marketplace. >> with all these phenomenons, they can wake up one morning. you have to take account of the risks. you can't rule it out. on the other hand so far, so good. >> we mentioned they were getting a boost from the weak euro. which continues to weaken. at what point do you say enough is enough? we are near parity. it's been a tremendous fall. >> well there is an international agreement. if currencies move as a result of measures that clearly undertaken to strengthen the domestic economy, that's acceptable. if currencies move because somebody's manipulating the foreign exchange market -- >> but they're not. >> but they're not. this is a side effect. it will have some impact on us.

it is having some impact on us. if you ask whether we would rather have a europe that is growing at a reasonable rate and slightly more trouble with the exchange rate or exchange rate is wonderful and europe is in the dumps, we would take a growing europe any time. >> i've been at the fed almost a year ago now you joined at an interesting and critical time. what has been most surprising to you? >> well, i had to get used to a new central bank and one which is far more important in the global economy than the one i've been in before. the surprises have been mostly positive. that is quality of the staff is phenomenally good. the discussions in the ward are very very substantive. it's a complicated place. i think i'm beginning to understand it. >> all right. thank you very much stanley fischer, for taking the time and speaking to us here on cnbc.

stanley fischer is the vice chairman of the federal reserve, former governor of the bank of israel. i'll send it back to you in new york. >> very nice sara. moving the markets as the vice chair says as you just heard, markets can't count on low rates forever or even till the end of the year. q-1 was poor but a rebound coming. >> what i thought was really important is the emphasis they are moving from a most extraordinary expansionary policy to an extremely expansionary policy. we asked on this program again and again why the federal reserve is so scared to raise interest rates. we got a signal yesterday from the imf. it warned there could be a super taper tantrum that could raise yields by 100 basis points. he is trying to reassure the market the rises will be i think he said one by the end of the year but slow and steady in order they don't get that big spike in yields. that is in the cards now. >> ten year crept up a couple of basis points. when we come back crude

pulling back a little after hitting its high for 2015. is this just a pause or is the oil -- is the pain for oil coming to an end? we'll talk to goldman's head of energy research about that. >> big ipos today. we'll talk to the ceos of all those companies. eats etsy, party city and virtu. your mom's got your back. your friends have your back. your dog's definitely got your back. but who's got your back when you need legal help? we do. we're legalzoom, and over the last 10 years, we've helped millions of people protect their families and run their businesses. we have the right people on-hand to answer your questions backed by a trusted network of attorneys.

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the biggest one-day rally in two months. opec forecasts the booming growth in u.s. oil supplies will end this year. our next guest says the u.s. market is exactly where we need to be focused. co-head of european equity research for goldman saks. good morning to you. interesting week when it comes to inventory builds. a lot of people wonder if at least here in the u.s. and with regard to west texas, have we turned a corner yes or no? >> we definitely think we are close to turning a corner. we think the recount in the u.s. is close to a trough. falling rates has slowed down in the past few weeks. if we think about the u.s. inventories with a lot of refineries coming back on stream in the coming weeks, we think we'll start to see some easing in the inventory builds.

>> would you rule out a return to the mid 40s at this point? >> i wouldn't rule it out. we are still in a volatile period and in an oversupply period with extra areas of volatility coming from situations like iran libya, et cetera, but we think that the oil price is likely to trough in these next few months. >> michelle are you able to say when it will trough? have we seen the trough with the 10% move from where we were a few days ago? a $10 move forgive me. is this the bottom now? are you able to time it? >> i think it would be impossible to time it perfectly. we know that the oil price is a very volatile market but i do think we can say with reasonable certainty that we are seeing the trough of the oil price in the

middle of this year. we have a very good chance of recovery in the third and in the fourth quarter led by a slowdown in u.s. production while at the same time we see a clear recovery in demand. >> what about the landscape of producers on both sides of the atlantic? deutsche bank is warning that now a third of all high-yield energy single bs and triple cs are at risk of some form of debt restructuring with prices at these levels. in europe, the question is whether some of those plays could be taken out. how do you think the landscape will change? >> within the landscape we change dramatically what we call the new oil order. what we are seeing is a lot of great assets in the hands of highly financially leveraged companies. and a set of poor investment opportunities in companies with a very good balance sheets. we think what needs to happen

here is consolidation that leads the better assets in the hands of the companies with the better balance sheet. this refocus on higher return projects with less complexity lower costs we think will reshape the industry and make it much more efficient. >> people are trying to decide whether that m&a picture you are painting is going to be one that involves the highly-leveraged distressed companies, the big caps after what we saw out of royal dutch shell or is it a combination of both? >> we think we'll see it at a variety of levels. mainly it will be big oils which lack great high return opportunities, buying probably some of the emps with the higher returns, the higher growth. there is going to be a clear focus on the u.s. emps but there are interesting opportunities in deep water. >> michelle della vigna, as we pay attention to oil more.

thanks so much. we are still waiting for two ipos at the nasdaq to open. virtu and etsy. we'll bring those opening trades soon as they happen here on cnbc. of course we will talk to etsy's ceo and virtu's executive chairman. bring us those who want to feel well rested and ready to enjoy the morning ahead. aleve pm. the first to combine a sleep aid... plus the 12 hour pain relieving strength of aleve. for pain relief that can last until the am. so you... you... and you, can be a morning person again. aleve pm, for a better am.

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welcome back to "squawk on the street." i'm jackie deangelis from the nymex. the natural gas storage report.

63 billion cubic feet is more than traders were expecting. it's double the injection we saw last year and well over the five-year average. as you see from the chart, prices are going down on this. a bearish number. $2.55 is where we are trading at the moment. what is interesting about the nat gas trade, we are in that season where the mild temperatures are out there. you don't need heat or air conditioning. traders are expecting to see nice builds as we go forward. the injection coffers well above last time at this year. nat gas trade probably poised to go lower. watch out for technical levels. it could bounce around. jackie deangelis. now to sue herera with today's cnbc news headlines. >> thank you. here is your cnbc news update. iranian president hasan rouhani says his country is determined to reach a nuclear deal with world powers. he says a deal will be reached

if world powers have the same determination to get the deal done. about 4,000 workers at a northern greek gold mine are demonstrating in athens. it's the most significant labor challenge the new government has faced since the election in january. >> the measles outbreak in disneyland california could be over. it will be declared over if no new cases pop-up today or tomorrow. it started in december and spread to other states. >> brazilian supermodel gisele bundchen is retiring from the catwalk. the highest paid mold is retiring after almost a decade in the fashion spotlight. she earned about $47 million last year. there is her husband tom brady. star qb of the new england patriots. he was in the audience. congratulations to her. that is your cnbc news update at this hour. let's get back to "squawk on the street."

thank you. virtu financial set to begin trading at the nasdaq today. bob pisani is there live with the executive chairman and ceo. >> good morning. it's a big day down here. virtu financial pricing at the high end of the range, $19. joining me now the executive chairman vincent viola. and the ceo, as well. congratulations. taken a whole year but you finally made it. we do not have an open yet, but maybe it will happen while we are talking. a lot of people are confused about the firm. you describe yourself as a market maker. other people say high frequency trading shop. could you tell everybody what it is do you and how you make your money? vast majority of the markets we trade are regulated and

electronically formatted. >> there was a lot of controversy last year s-1. only one trading day of losses in six years. briefly describe how you had one trading day of losses. >> it generated a lot of interests. it comes down to the law of large numbers. if you do anything and win more than you lose and do it a lot during the course of the day, you'll be profitable. >> 49% of our trades are winners. the others are made up of scratch trades where we break even and losses. >> you're big market makers and all over the world. in the united states what percentage of the volume are you on any given day in the stock market? >> you want to take that? >> we don't disclose

specifically what our share is. obviously as a market maker, our score card is to have as much share as we can profitably. it will vary depending on what's happening in the market. >> roughly 5%? is that a fair number? >> that is fair. >> i want to take an example. say general electric. maybe you're 5% of the trading in general electric. it trades 30 35 million. any given day you are about 2 million shares of general electric? how much money do you make on general electric? >> we'll trade somewhere 5% 6% some days 10%, 11%. >> you trade 200 million shares a day and only make $600. >> electronification allowed access to price and fair price in a way never available to the average investor.

so the competition to improve on price is now enabled through technology. spreads have never been as efficient. >> you only make a few hundred dollars, but you trade 10,000 securities in 30 countries. >> 11,000 in 34. it's a scope-and-scale business is what we run. >> your point which you keep making add those pennies up over many different venues and that's where you get the money. that's where you get the accumulated gains? >> i think it's important to understand there has never been more efficiency in the marketplace at the point of price discovery. the spread between the bid and the offer has never been more efficient. the criticism around availability and depth of liquidity, that is a byproduct of fragmentation of the marketplace as anything else. >> how do you feel about the market structure? we debate this all the time.

are there too many exchanges? is it too complicated? >> we provide our service across all market structure descriptions. we do best where there are fewer marketplaces. is there an optimal number of price points? that's hard to determine. we can tell you from our trading that market structures that are less complicated and less fragmented are better for the market-make funds. >> we've got to go. do you cause volatility? a lot of people say volatility is up. the machines are running. do you cause volatility? >> during times we are buying and selling we are smoothing out prices and providing the service of transferring risk. we actually smooth it out. >> the point is you benefit from volatility. is that a fair statement? >> we are taking more risks. we benefit in the bid offer tends to widen and volumes tend to go up. we think we are providing that

service transferring risks from buyers and sellers even in times of stress and volatility. >> want to emphasize, 34 countries. >> 225 exchanges, 11,000 financial instruments. i want to say one thing about our marketplace. the efficiency of the markets has never been more profound. the average investor has never been able to access price at a more transparent and fair manner. >> okay. vincent viola. thank you for joining us. this is an exclusive. i appreciate you coming down. >> doug thank you for joining us. the two principals of virtu. we'll get the numbers as soon as they are out. >> thank you, bob. then there were three. we are waiting for the third ipo of the morning, etsy. the homemade goods platform to open at the nasdaq. john fortt, i hear we are seconds away. >> probably before the end of

the show. indications are the stock could open above $30 pour share. that would be nearly double. maybe around double the $16 a share where initially priced. bringing the total valuation between $3.5 billion to $4 billion. that is significant. that would be a nice marketing outcome for them. for a company like etsy that deals with buyers and sellers, has this home grown culture and feel. has this message they are trying to get out to the world. that kind of first day performance and opening, opening at least could be nice for them. we'll have chad dickerson on just in a few minutes as we wait for that to open. >> thank you very much. here down at the nyse party city is trading higher after its debut. valuation of about $2.4 billion. we'll talk to the ceo in just a few moments. it was almost three years ago when we spoke with etsy's

ceo chad dickerson about the possibility of an ipo then. this is what he had to say. >> i think what you are asking are we planning to go public soon? our commitment is to stay independent as long as we can. i see etsy as an independent company as far as the eye can see. >> we'll follow up with him first on cnbc after the first trade at the nasdaq. stay with us. 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, when they're needed. ibm analytics from the internet of things is making energy smarter every day.

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just about every s&p sector is in the red. consumer staples trying to hang on to the flat line. >> consumer staples stocks are standing out as the top performing s&p sector today. among the leaders are food and beverage companies, coca-cola, hershey and tyson. they are being led by shares of cigarette maker philip morris the best performer in the sector today. the company raised its 2015 profit and forecast and reported better than expected profit and sales for the first quarter, as it sold more cigarettes at higher prices and gained market share. philip morris up by nearly 8%. >> thank you very much. three big ipos today. one party city here at the nyse surging on its debut to a valuation of about $2.4 billion. joining us post 9:00 is party city ceo james harrison. good morning. >> good morning. how are you?

>> i'm good. second time lucky for you guys. you tried this a few years ago, came back strongly today. >> it's fantastic. we are excited about the opportunity to get public and process the next journey. >> you priced the top end of the range at $17. talk me through what worked on the road show. >> i think what resonated on the road show the most was the fact we are in a traditional retailer. we have three legs to the stool. we have a manufacturing operation, wholesale operation and retail operation. that is a unique paradigm. for our manufacturing operation its largest customer is our wholesale operation. our retail business is its largest customer but not its only customer. if you look at manufacturing and wholesale businesses separate and apart from our own stores it's about a $650 million business. our total wholesale business is about $1.2 billion. >> overall, 860 locations,

obviously expansion plans beyond that. how true is it to say as someone did that you are in a unique bricks-and-mortar position because the value of what you are selling is so low relative to the cost of mailing? therefore, it's unlikely to be taken online. i imagine what you do is impulse buying for people. >> actually, what we do outside our own stores to a large degree is impulse. the model itself is a destination purchase. if you look at party city our consumer is coming for a planned event. our stores are generally located in strip malls. we don't depend on walk-in traffic for transactions. we are a destination purchase. >> when you are planning a party, you know what you need. >> exactly. grandpa turns 80 you've got to go to party city. >> we were talking about the differences between you and an amazon. why would you want to do that? why would you be in the business of having to design and make these things?

>> several reasons. the economic opportunity to make manufacturing as well as wholesale profit. there is the opportunity for us to control supply chain. when you look at the party goods business there are certain key components which drive the consumer buying decision. if you are out of stock on a napkin, in effect party city we might have 70 coordinating items, being out of stock on a key component would obsolete all the other skews in the store. short supply chain, maintaining quality and being able to be in stock quickly is very important. >> this is largely delevering exercise. you are paying down debt. thomas h. lee will still own a lot of the company stock. what's the plan there? what are your expectations for them continuing to disperse stock into the market to the extent it can have an effect on the stock price? >> sure. one of the things to look at is obviously every private equity holder in the world looks for

equity. this is part of the investment cycle. they invested in the business in 2012. if you look at a normal private equity holding period there's a lot of runway here for a very ordinarily monetization on their part without putting pressure on the stock and the market. >> you haven't raised growth capital. you feel fine in terms of what you have available to expand? >> we have plenty of dry powder in our revolver and ability to refinance expensive debt as the core premium steps down. >> you mentioned strip malls. the death of the mall the obituary has been written several hundred times. why are you not worried about traffic? >> because we are a destination purchase. people are going to come out to the store to buy party goods. we sell online but about 15% does not translate online. you can't buy a helium balloon online. you are not going to buy candy 15 for a dollar. very people are going to buy

sterno racks and foil trays online. >> you've been with the company 19 years. how do you feel about the fact that you mentioned just now you used the expression some expensive debt you have that you wanted to refinance. how do you feel about the fact your private equity partners loaded you up in total $2 billion in debt? how do you feel about that? >> we've been held by private equity since 1997. we were public one year. i came onboard to take the company public. we were public for a year and a day. unfortunately the founder passed away leaving a young widow with a heavy concentration of public equity. subsequent to that we've been owned by different partners. at one point in time someone said how do you sleep with 5.5 times leverage? i said the same way i slept with five times leverage. >> james, we have to leave it there. james harrison the ceo of party city. >> thank you very much.

>> we are getting an open on etsy. priced in the teens now. this is 106% begin for etsy. john fortt clued us in we to at something close to a doubling in share price. you should know that etsy is now open for trade. we're awaiting that the interview with the ceo, chad dickerson will join us live. [ female announcer ] who are we?

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etsy pricings at 16 last night. now etsy has opened at $34 you can see. doubling on its debut there over at the nasdaq. within the last few seconds. let's bring in john ford, who is awaiting an interview with the ceo. why we have got such a big gain at the open do you think here? >> this is a brand that a lot of people know. i've got several friends who actually sell goods on etsy. there's a certain demographic, maybe somewhat of the pinterest demographic that's very interested in this company. and there's a party going on in the room where i am now.

there are sellers here the ceo, chad dickerson having his first comments after signing the initial documents when the stock started trading with bob grifeld here. this is a big day for the company. this is a company that has a very loyal base. remember 78% of people who bought on etsy in 2014 were return customers. so you have to imagine some of those people many of those people also buying in on the stock. i was looking at some forums on the internet a few minutes ago and people saying they had bought in. >> this is an extraordinary gain. it was priced at $1.8 billion. it's doubled in value. so $2 billion have been created instantly. there's got to be more to it than that. is it because as david was suggesting suggesting, they limited the number of people who were able or the number of institution who is were able to buy at that $16 a share. ? an institutional phenomenon? >> i would certainly defer to

david on that simon, you'll get a better sense from him than from me how these things tend to go down and how the limited allocation tends to affect stocks. we have seen it in the past with stocks in this era of the internet and the mobile era. limiting the float. and that causing a pop on the first day. but for a stock like this normally you might say if you get that big of a stock, how much money did you leave on the table? is that bad thing? certainly etsy does have enough to do the international expansion that they want to provide some of the seller services they provide. the marketing that comes from having a pop is particularly beneficial for a company like this. so i'm sure there are a number of other factors that at play here and i defer to david faber on the effect of that limited float. >> you mentioned you have friends who are sellers, some of the numbers are staggering, 1.4 million sellers. not customers, sellers. and almost 20 million active customers. of course you mentioned chad dickerson, the ceo who we're

going to talk to in a moment. a former yahoo executive. it's been pointed out that their net loss for 2014 widened to $15 million when it was less than $1 million year earlier. even though revenue continues to grow at 56% plus. so it's a 10-year-old firm founded ba being in 2005. >> a lot of selling shareholders, they did raise about $180 million as is typical in these things when you see a zwrump of this type. people say you could have priced it higher. only selling a small percentage of the overall. that is does give a great deal of value to those who hold the shares, john. all of those who have been participating. >> well of the three big ones and we're waiting for virtue. this is obviously a much bigger gain than party city posted here, up 20%. an important day for new issues market remains in the range. we'll be right back.

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good thursday morning, it's 11:00 a.m. at etsy headquarters in brooklyn new york. it's also 11:00 a.m. on wall street and "squawk alley" is

live. ♪ ♪ ♪ ♪ >> welcome to "squawk alley" for a thursday joining us for this morning for the full hour jon steinberg, the ceo of the "daily mail" north america. kayla is out this morning. john ford live at the nasdaq where etsy has just opened for trade. what an open. more than doubling as you suggested it would right before it started. >> strong early on. and got to remember etsy set aside 5% of shares in this ipo for individuals. a lot