>> live from new york where business never sleeps this is squawk box. >> good morning, everybody. welcome to squawk box here on cnbc. i'm becky quick with andrew ross sorkin and steve. joe will be back tomorrow. welcome steve. >> thank you. >> there is media buzzing as well. full house is coming back. netflix is buying 13 new episodes from the popular sitcom. fuller house will premiere next year and star the grown up characters of d.j. stephanie and kimmy. john stamos will guest star. netflix is also talking to other full house stars about appearances including bob sagget and mary kate and ashley olsen. let's bring you up to speed on the u.s. equity markets now. we saw the markets pick upmost of the ground they lost on

friday. you can see this morning there's green arrows up again. the s&p futures up by 6 and nasdaq up by 18. >> steve. >> dupont is just breaking and my software is just loading and i don't have it. we're going to read the stories here and becky and andrew look up dupont there. four dow components among the companies set to release before the bell. united and verizon. in economic news arguing central banks need to set higher inflation targets to avoid dealing with low economic growth. rosengren said he wanted to debate whether the u.s. target of 2% was too low. developing story out of the midwest today. an iowa farm holding nearly 10% of the state's chickens when 5 million hens must be destroyed as a result. iowa is among 12 states that

detected bird flu since january including wisconsin which has declared a state of emergency. the risk of human infection is considered to be low and no human cases have been reported. hormel warning it will sell less turkey this year because the viruss forced farmers to kill more than 2.4 million turkeys in the last month. >> just quickly, we do have headlines from due uponpont. they're raising their dividend to 49 cents from the 47 cents it had been before. just looking at the yield right now. that's a 2.5% yield. so that will increase the yield spiral. >> in the meantime let's tell you about stocks to watch this morning. a mixed quarter for ibm's big blue. their earnings beating the street but sales falling for a 12th straight quarter. the strong dollar continues to be a head wind. we'll talk to an analyst about all of this. chip design makers technology

that of course may have the technology that powers the iphone and profits topping expectations. also software giant s.a.p. posted better than expected results. also rio tinto's iron ore lower than forecasted and we have credit suisse reporting erngs ahead -- earnings ahead of estimates. >> i'm seeing dupont now. i have an operating eps of $1.34 and that looks to beat the estimate of $1.31. that's the first headline and maybe some other issues but that's what i have there. it's $1.34. redesign contributed 10cents per share. i don't know how you guys do this when you do it every morning. >> try and jump in.

still loading uptaking a look at these things. >> 80% share. >> the estimated negative currency impact increased to 80 cents a share. that's up to 60 cents a share they previously communicated. if you're looking at guidance on this, the company is saying they expect to be at the low end of $4 to $4.20. that's probably not a huge surprise to the street. if you look at the earnings expectations the street was already at the end of $4.25. >> it's higher that the bottom is a little higher. >> they expect to be at the low end of $4 $4.20. >> the street knew that already already. they're looking at earnings to be at $4.25. we've seen them at a lot of the multinational companies. dupont is talking about sales.

that's slightly below the estimates. 9.4 billion. i'm looking at sales of $9.2 billion itself. 937 is slightly below what the street is looking for. they are talking about the sales that were down 9% versus the year earlier because of impacts from currency of about 6%. portfolio changes of 2% and expected near term industry wide challenges in agriculture and performance chemicals. let's look at how the stock is performing right now. down about 3% from yesterday. this year it's 20% higher than previously estimated. so whatever is going on out there it's getting worse for dupont. >> 80 cents a share is for all of 2015 they're expecting. for this quarter alone it does

have a 25 cent per share negative impact for currency in these results. we'll keep an eye on this. currency is dpif cull to figure out. analysts say sometimes that's a blilt little bit of a black box. it's kind of complicated but the street so far has been pretty good at pegging some of these massive head winds. >> my question is whether or not we're at a point where we're starting to look through that. i see this market go up 200 points yesterday and at some point the effect of the currency wears off and there's some visibility of these companies estimating it. i can say it's 80 cents this year. to me when i look at the earnings the thing that matters is what does he think of all of this? i believe they're having an

investor conference meeting later today to try to persuade shareholders that dupont is not doing it's job so the question will be how are they going to look at these numbers? do you say the revenue story is really the story here. >> this is a company being helped. it also has a fairwind coming from lower cost of oil. it does not break out. it is clear how currency is having a major impact. >> it looks like it's unclear where that stock is going to change. the bid is down at 6265. david einhorn's green light capital has taken a new stake in general motors. the hedge fund sold off a position in the auto maker nearly a year ago. the gm put ignition switch recall issues behind it.

it also expects them to begin the $5 billion greenlight buy back soon. einhorn says it's tougher to find good long positions because valuations are on the high side and earnings are in a precarious spot. >> a new warning from mark mobius this morning. >> right now we're seeing emerging markets outperforming the u.s. and the world. since the begin ofg the year we've seen theoutperformance. now is the time to shift out of the u.s. >> corporate earnings are poised to disappoint. switched to a u.s. recovery at early stage and government regulation. he favors emerging markets over most u.s. investments. not sure that's the most original thought from a lot of guests we've had on this show. we're sitting there saying ems and europe and out of the u.s.

that seems to be a theme pretty prevalent out there. >> it's one he has been focused on for awhile. but we have heard that from a lot of guests over the last few months. >> it looks like we're looking at a positive open earlier this morning with green arrows across the board. yesterday was a positive day for the markets. gains back 200 points for the dow. that is taking back much of the losses they have seen on friday of last week. still you're looking at the s&p futures up by 7 points this morning and nasdaq up by 20. why don we see how the early trading is going in europe this morning. looks like right now stronger moves for germany where the dax is up by .8%. the cac is also positive. it's up to a quarter of a percent. in greece the market there by

2.8%. eventually we saw the yields for greek debt moving to highs. something like 28% for the debt. that's what you were seeing on the yields. that put pressure on the stock market there. in asia overnight you see the nikkei was up by 1.4%. the hang seng was also positive. up by 2.8% and the shanghai was up by 1.8% to try to get the banks to continue to loan to small businesses pushing out that money. wti this morning down by 25 cents. wti was higher. up by 64 cents. you can say it's trading at the 56 dlfrs range 56 dollar range. you'll see the yield is still under considerable pressure. you're talking about the ten year yield at 1.881% but when you're looking at 0 or even negative potentially in other

places oversaes and europe thiseas and europe this is a much better deal. you'll see at this point the dollar is up across the board. euro sitting at 106.87. gold prices this morning are still looking like they're below 1200 at 1,000$1,197.80 an ounce. joining us is the senior technology analyst at deutsche bank research. thanks for being here today. >> thank you for having me. >> the overall picture is better than the street was expecting but revenue continues to decline. how would you rate this quarter? >> it was probably a good enough quarter. revenue continues to decline for the company as you mentioned. currency i think most people will look through but their core market software and services continue to decline and the only growth was in hardware. some upside on the eps number they're seeing benefit from the hardware business but the real places where ibm plays they're

not doing as well as the rest of the market. >> jenny talked openly about how the company has to get rid of some of this business. the places where you're bringing in revenue but it's just not profitable. when do we reach the point where we have gotten rid of all of that? >> it's a big question because ibm has been a big story for the past years. all they have been doing is divesting these in favor of software and services. everything in the technology industry eventually co commoditizes. the big issue is transitioning to the new models in the cloud and where the industry is moving and they're being challenged by what they have is really a big traditional business being challenged by that. >> how are they doing in term of righting the ship. >> well she has done some things well and some things not so well. it's a difficult job that she

has to turn a big company like ibm around and transition this business to the new model. at the same time ibm could give us more disclosure on the new areas where they're growing and maybe make tougher decisions about the new areas like the cloud and mobility. >> i saw yesterday, did i get this right, cloud revenue was up 75%. 3.4 billion. is that right? >> so the run rate for the cloud business now is 3.8 billion and it was up pretty significantly. >> is that a a profitable business and b are they a competitive player in that space? >> well ibm when you think about the cloud business especially on the infrastructure side the big players are amazon and google and microsoft and ibm in is in there but they're not as big as the other three. >> will they ever get as big? or does it matter? >> well, it's a good question. amazon dominates that space. that's where everything is moving. i mean you talk about -- >> 75% growth is nothing to

shake a stick at. that's good. >> but when the rest of your business is declining 10% and that's 80% of your revenue it's hard to offset that and see any growth in your business. >> is that piece of the evidence, is that a key business though? because the rest of ibm's business was supposed to be sticky. >> yeah. >> cloud services has always been one of the things the reason it's so great and easy is it can be transferred i can jump from you to you to you, right? >> the cloud business is probably not as sticky as traditional businesses where you buy a server and put software on and it sits in the data center. also we don't know the profitability. we don't know what the profitability is. they don't give us those numbers but amazon's business that's pretty competitive business. hard to say. >> the stock closed yesterday. it looks like it's indicated to work higher this morning. what's your grading on the

stock. >> if you think about all they're facing it's hard for me to get excited about the name right now. >> thank you. >> coming up when we return your money your vote. new word today on who the coke brothers are backing for president and later tom faulk is going to join us to talk about his company's earnings. plus skinny girl founder bethenny frankel is going to join us and dish on her growing brand and crude realities, harold hamm is going to join us first at 8:40 eastern time. before we do that head to a break here a look back at this date in history.

tell me why i should have any faith at all in the gain yesterday. >> one day it's happy.

one day it's sad. you to take a longer term view of the market. a 6 to 12 month horizon. valuations are reasonable. there's a lot of good things happening in capital markets. we have a year like last year we buy the difference. >> does it worry you though when the market is so definitively negative one day and definitively positive the next. does the earnings justify the 200 point gain yesterday? there was no economic data to justify it. >> sometimes you can't read too much into anything. earnings in aggregate have been okay. they have exceeded expectations. the norm last quarter was 67%. earnings are okay. >> that's on the bottom line and not the top line at all. >> that's absolutely the case. people are becoming accustomed to that. >> but are we starting to go negative? is it negative year over year quarterly earnings? >> absolutely. >> a little hard to get excited

about 76% beating when what they're beating on is a less negative number. >> it's what the earnings are versus expectations. the fact that earnings are going to be lower. everybody expects earnings will be lower. energy will be significantly lower. earnings will be up about 5%. >> now in the old world you have the financials doing well yesterday. morgan stanley, goldman did well, is that a leading indicator to you of where the stock market and economy are going? >> we don think it's a leading indicator but we do think if you look at the balance of this year financials are going to perk up. they are one of the worst performing groups in the first quarter. even though businesses have been good the stocks haven't started yet we think that's going to happen. >> you were more positive on ibm than the analysts. >> we do in our dividend accounts. they're paying about a 2.6% yield even though it's not exciting in term of prospects it's under 10 times earnings.

they're slowly getting their act together. you'll do okay with them. we think the stock can be 10 or 15% higher. >> they'll look stabilize and start to move higher again. >> not for sometime. you still have quite a little bit of time where the hardware business is going to slow down. so the new businesses were growing at 30% or better. so they're paying a nice dividend to shareholders. it's not going to be excited. >> is warren buffet going to be vindicated on this when it's all over. >> we do believe he is. he has a longer time horizon. a lot are looking at a week or month. as a multiyear investment we think they'll do fine. there are better places in technology to make more money quicker but we do think it's going to be an old hold. >> do you connect this

volatility to federal reserve policy. >> the volatility is normal. the fact that we didn't have volatility is normal. the fact that valuations are up significantly increases that volatility. so the equity investment is why you get paid more than getting in the bond market. >> we're going to have a reporter on later that's going to argue that the fed already tieg tightened and the slow down in the economy is a result of that. >> we don think the fed has started to tighten yet. everybody knows the fed is going to tighten but we don't think that happened yet. >> when does the tightening begin? >> best guess now is september. >> and how much does it matter for markets? >> well the market is going to have a little temper tantrum again but it is going to come to terms and go from 0 to a

quarter%quarter percent. should be manageable for the stock market. >> let's give you a little political news this morning. the cokoch brothers favor scott walker. a spokesman is disputing the wording saying that he pledged to remain officially mutual during the primary campaign. so a little bit of news. also a little bit up in the air. >> when we come back this morning, big news from netflix. the streaming giant giving viewers a blast from the past announcing a new full house. we'll have the details right after this. but first as we head to a break take a look at yesterday's s&p 500 winners and losers. ♪

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♪ i'm going to give you the exclusive. >> please do. >> it's a labor of love and we have been literally trying for so many years to do it right and i think we finally got it perfect and they just five minutes ago said you can give the exclusive to jimmy kimmel.

>> oh that's nice. >> there he is. john stamos from full house. netflix is going to reboot this thing with a brand new comedy. all new episodes. another case of netflix thinking out side the box for programming and this effort to capture a demographic that's moved on. a little bit older now, get their kids. >> i watched full house. >> late 80s, early 90s, weren't you 12 then? >> late 80s. this was the show that created the olsen twins. >> they played the little ones. >> the little girls. >> there was one girl. they both played the same person. >> bob sagget. >> he is not signed on yet. nor have the olsen twins. we should also say mary-kate olsen has a connection on this show. she is married to oliver now.

>> oh wow. that's a weird 7 degrees of squawk box. then candice cameron that plays d.j. is going to come back -- she was the kid. >> d.j. was -- she was dj. >> she's going to come back i believe as the mother in the story. of course her brother was kirk cameron on growing pains, the other show that i used to watch at this time. talking about out of the box, netflix has done this before they rebooted arrested development which was a show that was a bit of a cult phenomenon on fox and did well and got cancelled and they found a way to bring it back to netflix. >> but it's going to raise the question of what else can be rebooted? happy days or something like that. >> i'm waiting for the a-team. >> you want the a-team to come back. >> nbc is bringing back coach. i love that. that's fantastic. dj. has been around too. she was just on dancing with the

stars a season or two ago. john stamos does everything like the yogurt commercials. >> you din have a crush on him. >> he's cute you know but -- >> i think you did. >> i think my wife did. everyone i know. he was like the guy. >> he was. >> you have another one you want to talk about too. >> so the pulitzer prize came out yesterday for those print journalists still in the business and very sad story. one of the guys that won the pulitzer prize already left the business because he couldn't afford to be a journalist anymore. he worked at a paper in california and went into the pr business. so there were a lot of people playing around on twitter. i still have my print sheet journalism roots. >> i am a member of the team

that won in 1999 for international reporting but i have many many friends, colleagues from columbia university that had to leave the business. when you talk to kids these days about going into the business what do you tell them? it's good to write and good to become a journalist but i'm not entirely clear what the economic economics are for a writer. >> in any job that skill set is good. >> but would you tell your beloved niece for example to go into journalism. >> i wouldn't tell anybody. >> i would. in this day as age. >> as a recommendation for a career. >> a i'm a believer that some of the print institutions whether it be the times or the journal, actually do survive and in some cases thrive and then on the other side you have all of these new media publications. >> but there's no pay. they pay like they're textile workers from the 19 hundreds.

it's outrageous some of these things. >> it's insane. >> you're lucky to get like $30 to write a 500 word piece. >> but i think if you were to call him up to come on the set he would tell you there's people that are getting paid very very good salaries. >> i think the printed word right now for many, many people is a secondary thing. if you have a book to petal or service to offer you can write and make a little money that way but as a way to advertise and market your main deal. >> i'm going to talk about something near and dear to my heart. c kraft macroni and cheese. they're changing their ingredients. they're going to do it without the colors that create the orange and artificial preservatives too.

that's january 2016. this is not because of intense pressure coming from activists but it is from the changing taste for mothers and fathers. it's getting it from annie's. >> can you make it organic? >> are there mothers and fathers trembling right now that they're going to get their 3 and 4-year-old that's going to say i want it orange. >> i did think about stocking up just in case because as you said, a 3-year-old that says no way, that's not real mac and cheese. >> are you a kraft family or annie's family. >> both but the kraft is top with the kids. >> we would go to costco and buy

cartons of 20 mac and cheese. there was a period of time when that's all the kids were living on. but they passed through that. >> right. >> okay we have more news coming up. why don't we go there. coming up the street's reaction. quarterly results, let's see what people think of it. one of the companies in the middle of that major activist battle. we'll take you inside a volvo factory in china where cars are being made. squawk box returns in just a moment. if you're looking for a car that drives you... ...and takes the wheel right from your very hands... ...this isn't that car. the first and only car with direct adaptive steering.

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the dow looking like it would open up higher. our nasdaq up close to 20 points higher and the s&p 500 up 6.5 points. among today's top stocks to watch, durks, approximate, on earnings beating the street just happened but revenues short of consensus. the results were impacted at 25 cents. dupont increasing to 49 cents. we'll talk about it right now. joining us is mark connolly. he covers dupont for cslk. good morning to you. put the numbers in context. he has a presentation he'll be doing to investors starting sometime this morning. if he's watching these numbers this morning he's thinking what? >> he's thinking they padded every number they possibly can. this is not a quarter that dupont could afford to miss. i think he pulled out all the

stops and you can see from the quality of the numbers that it's awfully tough in this environment. there's a huge amount of foreign exchange head winds but they're finally taking out costs. i don't know why we didn't do that in 2010 when she originally said she would but there's a lot of effort here to put on a positive face. >> are these numbers sustainable? if you throw everything in now buzz ever does that mean a quarter or two from now it will be tougher? >> the guidance is not all that encouraging. i think we're going to face an uphill slide here. they're going to keep pushing to get costs out. they lost one of their best businesses for fixed costs so the cost problem became much more difficult. it's the right thing to get rid of tio 2. they didn't sound like they were going to do it.

>> he wants board seats. do you give it to him? do the numbers make you more confident or less confident about the business? >> i don't think he has much chance at all. he has put big named people on their board. i don't think he has a good chance here. >> so these numbers end the fight? >> i don't think they end the fight. they keep him as the under dog. dupont is doing everything they possibly can. thank goodness nelson peltz is here. i doubt these numbers would be as good as if he weren't. >> thank you. we appreciate it. >> volvo betting big on china. manufacturing the first chinese built car made for the u.s. markets. we're joined now with more.

>> it's going to start manufacturing at this plant in a couple of weeks. it will be exported next month and available in the dealerships there probably around the summer. this is a big turn around for volvo. they had to do a lot of things to turn their business around add as you know made in china has certain connotations. connotations the ceo is very aware of. especially when they're trying to reclaim market share in their dominant market. here's what he had to say. >> there could also be customers that have an opinion made up before the chinese project is not as good as the european. probably we're trying to address those customers. >> but this is simply more than just a volvo story. it's about the transformation that china would like to make. the rebalancing of its economy. if they can take the technology

to transfer their knowledge to their own home grown product if that happens they can build their own car they too can experts to the global markets. there's a lot of ifs in there but i spoke to the owner of volvo and he said sure he has ambitions but he's a practical man as well. it's a symbolic move and once it happens it takes chinese manufacturing not just for cars but industry overall to a whole new level and that's going to be critical in this very tough rebalancing act the government is trying to institute. >> two questions, first of all, are there other cars made in china for the u.s. market and is there concern by volvo that there will be some stigma attached to it by u.s. consumers? >> steve this is the first made in china car that's going to be exported to the u.s. so this is really an all time first. there was something at a very very low production level many years ago but that time has long gone. so this is really a first in

that sense and i think concerns i mean look as i said there are connotations to made in china but look at it this way, volvo is a niche player. they produce 500,000 cars. that's a small number compared to volkswagen and toyota. it could be detrimental to say the least to their business and i would be very surprised for a company like volvo that's an iconic brand and always ranked as one of the first in surveys for safety and reliability to put that on the table as a risk and i would be very dubious as to whether or not they would do that. so i took a look around the plant here today. very interesting because it's china compared to where i'm usually based in japan. that's a lot of manual labor going on. to get back to your original anonymous question putting that on the line is just too risky

for nach player like volvo. >> thank you very much. coming up, they unveil the annual hot list. everything from hip hotels to exotic locales. places that andrew visits. the world's best travel properties. and later, bethenny frankel in studio. >> i'm a real housewives -- i've been watching real housewives for a long time. >> the reality tv star and entrepreneur stops by to talk about the big business of her brand. andrew just stay in your chair. ♪ [intercom] drivers to your marks... go! it's chaos out there. but the m-class sees in your blind

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welcome back to squawk box everybody. we have been watching stocks this morning. among them rogers communications. earnings dropping more than expected after the company is struggling to hold on to customers. it is unchanged. also earnings at canadian national railway beating consensus. they'll improve safety as volume rises. >> in other headlines, millennials getting a big loan from the bank of mom and dad. young adulls are three times more likely than their parents were at the same age to get financial hope from their parents. andrew are you getting loans?

>> that's interesting that it's three times more likely at that age. >> i think that it may be -- first of all, they're getting out of school with a lot more debt. >> debt. >> i think basic stuff costs a lot more in terms of getting a house or down payment on a house than it did -- depending upon i didn't read the study but when they're comparing it too. >> we're going to talk about refined travel. town houses with butlers to remote safari out posts they're out with the list of the world's best hotels. 60 properties made the 2015 hot list. she is from continental strategists. the editor and chief. what's the hottest. do you rank them or not really? >> no we don't. it's not always apples to apples. >> what's the one you want to go to? >> i just came back from india

and was lucky enough to stay at the palace the incredible royal palace and the suites are named after people that stayed there. there. jackie kennedy. >> what is the nightly rate? >> oh, you know it varies. and it it depends on the suite but it's expensive. in the thousands. >> like $2,000. >> like $1,000. >> what's the cheapest hotel on your list? >> i guess it would be 21 broad. there are a couple in that category. >> 21 broad is in nantucket. >> new hotel, really charming. you are in it. it feels like you belong there. >> i like to travel to crazy, far away places as possible. trend wise where are people wanting to go? >> i still think despite eebola that seems to have died down and

i think back beyond africa is very -- >> that's the hottest place? >> one of these sort of you know, sort of god forsaken and glorious. >> dare i ask what is the most expensive hotel on the list? do you know? >> the most expensive hotel. a lot of them are very expensive. part ofaic paage. a lot of them aren't because we weigh different criteria. >> new york city. >> that's not fair. don't put me on the spot. that's on our cover. it is spectacular. i have to say. >> what makes it spectacular? >> the craftsmanship. when i was there and they were putting on finishing touches before they opened i watched a very sort of chic frenchman hanging drapes. >> what's the one thing you look for? becky and i were talking about

the one thing we like in hotels. >> i like a big room. you like it be awake when you get up. what is your one thing in the hotel room? >> level of intimacy and attention to detail. that's about the finishes and, again, that can be at the very high end. it can also be a fantastic cup of coffee. >> since you like intimacy you probably like -- what's the best, big hotel you love? >> the big, big hotel. >> that's a good question. >> great question. so many to choose from. it's true. they're not big, but they're grand. i think that's sort of that is not part of multi-rooms, but about grounds. i think that you know that's something that i value. >> one thing we were talking about during commercial breaks all these very very expensive hotels -- >> which you know very first hand all about. >> very little margin.

you think you're spending $2,000 a night. he would tell you that you much prefer to have a courtyard marriott. he'll make more money off that room than, i don't know the economic, but $1,000 a night. >> what do you pay for an internet connection. >> breakfast is included in the smaller hotels which i think is part of the -- i'd rather be charged more in the room and have breakfast included. psychologically, i like that better. >> i'm always gone before breakfast is served. >> a cup of coffee or cup of hot water. >> and not in a paper cup. >> i started to say -- >> just trend wise. do you i mean from where you see the economy going, do you think that 2015/'16 we're going

to see more travel? there was some talk that airline prices might come down marginally this summer. >> marginally. i think, one, the dollar is strong. that for americans, at least, there is a booth there and america is cheaper. >> can you get a good place in europe right now or is everyone running to europe? >> between all the hotels and at the higher end of the rentals, apartment rentals you can still get places. i, you know -- >> do you do air b&b.? >> i believe a narrowing of the universe of the reader. for us you want sort of a tighter edit. >> can you do that? >> maybe team up and then edit. >> can i ask the question if i didn't have a lot of money eand i was a traveler but i wanted to stay at a place that was as close as i could get to some of these places that you're talking about. >> i actually do think this is

where sort of the air b&bs of the world makes sense. you want to be in neighborhoods that make sense and not tourist neighborhoods and you can go around the corner and have a nice coffee eand in the treeline street rather than in sort of times square-type environment, which is how most people many people that i know want to travel. they want to be embedded in the neighborhood. so i do think that, you know the sort of that model works well. it's a lot cheaper, especially if you're traveling. a lot of people travel with extended family or whatever. two couples and kids. it's a lot cheaper. you know you don't want to pay $40 for a yogurt. it's the kind of thing where you can actually be in a gorgeous place and, you know have a yogurt. >> there we go. the $40 yogurt. >> we did in paris, it was great. >> you did? >> we stayed at -- >> i don't know if it was air

b&b. it was a third of the cost and an unbelievable apartment we stayed in. >> also a number of fantastic hotels that are smaller that, you know, you are on a budget i think that it is a great option. >> thank you for coming in. >> thank you. >> appreciate it. of course the hot list issue hits the newsstand next week. you can check it out. when we return this morning, back to earning central. united technologies and verizon all set to post quarterly results. right now, check out the futures this morning. things are looking up for bulls, once again with the dow futures up by 46 points. s&p up by 5.5. stick around, "squawk box" will be right back.

a deadly flu outbreak. we'll tell you how it it will affect prices and food stocks. earnings alert. united technologies and verizon all set to report this hour. we'll bring you the numbers and the instant number reaction. bethany frankel is here to talk about her line of consumer products, her new book and her return to the "real housewives of new york." live from the beating heart of business, new york city, this is "squawk box." welcome back to "squawk box" first in business worldwide. becky quick and steve liesman.

couple earnings report hitting the wires. utx and travelers hitting and both mr. liesman and ms. quick going through the numbers. >> 253 compares to the 254 that the street was looking for when you look at thompson estimates. looks like revenue was very close. came in at $5.9 billion that the street was looking for. we're using that number because i believe that's what the street actually looks if for. although it is a strong report, coming off of a very strong quarter from a year ago for this company. let's take a look at what they're talking about. some things they're doing is raising the dividend by 11% and the board is approving the $5 billion of share repurchases and take a look real quickly at that stock and esee how it's shaping up this morning. down by 2%. travelers is a company that has often beaten the street expectations and doesn't give a

lot of guidance to the street and insurance can be a black box when you try to figure out what's going into this. coming off a very strong quarter from a year ago. other points that they're making, i think there were a few issues that happened. one of it is the money that they were making on their portfolio, obviously, a little bit impacted. fixed income down pretty sharply over that period of time. the other thing they had private equity investments that are not valued nearly as high because of the energy hits. private equity investments that is paying off for this. but, again, you can see the stock is down by 2% and that is a dow component. >> you're looking at utx. >> $1.58 here. solid beat compared to the street at a dollar. 45. light on the revenue. i had $14.5 billion versus an expectation here of 14.88. a little light right there. they are firming the school year view of 675 to 705 and i have here a 7 cent currency impact is

what they're saying. and then one of the things they're in line with their expectation of organic top line growth of 3% to 5%. which is pretty decent. >> that's 12 or 13-cent beat. they are sticking with the guidance they had already secured. usually when you see a big beat like that, you'll see a company raise its expectations for a full year, too. this could be a concern about currency for the rest of the year. making sure they're giving themselves room. >> modern currency impact. >> their guidance again, had been for 6.85 and 7.05. >> they're affirming that. >> this 13 cent beat from this quarter will give them comfortable room to make sure they meet that guidance for the full year. >> that's what i see here. >> again, that stock looks like it is up slightly up by 0.5%. >> you're right, no optimism in what i'm seeing in the outlook here given such a big deal.

>> i guess it's tough to see what is happening this year. a lot of moving things from the dollar to oil prices. >> i haven't been here becky, the whole earnings time. is this a consistent theme here of they're beating on revenue, on profits, but light on revs. >> repeatedly. >> for six years. >> a trend for years. >> what surprised me is because of the massive impacts, because of currency and energy prices too. what surprised me is that it seems pretty well telegraphed in the street. there have been companies that have been beating lowered expectations, but the street was able to get its head around the idea. >> we certainly stabilized on the dollar. it's very difficult to estimate something that is falling at an increasing rate, unless you have a radar out there in your earnings forecast which most people don't. but now that it's stabilized, i think as we talked about in the last hour, analysts can at least get their arms around it and say there is an effect of a currency ratings from x to y.

>> sure. >> and companies are out there estimating this now. so you've gone from completely unknowable to somewhat knowable and i think that's something that you can then create propositions around. >> a second outbreak of bird flu has been discovered in iowa. this time at a commercial chicken laying facility. 51.3 million hens there will be euthanized to prevent the disease from spreading. the flu was found in a flock of 27,000 turkeys in iowa last week. the egg laying industry is the nation's largest providing one in every five eggs consumed in the u.s. the risk for human infection is low and no human cases have been reported. we'll talk to food analysts in a few minutes on the impact of poultry prices and food company shares. you know me, i like my eggs. >> what stuns me is that the initial reports, at least, say that there won't be any changes to egg prices at least not

immediately. i don't know how big the nation's flock is. the idea that you can wipe out 5.3 million hens and not have any impact on hens. what does it actually take. that's something we'll talk to the analyst about. among other stories we're watching this hour. texas-based blue bell creameries is recalling all of its products. two samples of chocolate chip cookie dough ice cream. kind of my favorite. tested positive for lis teariosis. >> kind of take ss. that's never happened to me before. last month the cdc linked ice cream contaminated to three deaths at a kansas hospital. in economic news i'm going to read right by that. central banks may need to set higher inflation targets to avoid dealing with low economic growth. rosengrand he wants the u.s. target of 2% is too low and in corporate news take a look at

shares dupont earnings beating the street but revenues were short. the company says its results were impacted 25 cents by currency. dupont also increasing quarterly dividend by 4% to it's off a little bit. 1.62%. stocks rebounded from friday sell-off with the dow, s&p 500 and nasdaq posting their best gains for the month. here's the futures right now. what are we looking at here? we're up. so that's top, that was yesterday. this morning right there we go. kind of coming off a little bit. i feel like we came in this morning and the dow was up around 90. i remember that number. right now showing the dow would open around 41 points higher and s&p about five points and nasdaq 15 points. joining us now on set, i guess jason, strategic research partners. jason, react to the numbers that are coming in this morning. what are you hearing? >> listen i would say in terms of your discussion on earnings

i mean the thing that is interesting here and this is part of the reason why the market seems to be dealing with it not only are the earnings beating, but also, you know you're buying in a lot of -- the s&p is buying in 3% of its shares. the share purchases continue unabated. and also if you look at just dividends paid in aggregate for the s&p 500, last year and last 12 months, i think it was something like $370 billion. so, you know investors. the stock market is not the economy and the economy is not the market as we know. there are things that are not particularly good, perhaps for the economy as a whole. but for investors a lot of good things going on. >> i want to bring in greg "wall street journal," the mixed argument that the economy has slowed because the fed hose already tightened. greg, i kind of disagree with youilatal bit but i'll let you make the case and then i'll give you my take. go ahead. >> the fed has always acted not

just through its actions but its words. when the fed starts talking about tightening the markets start to incorporate it. it hasn't shown up in the usual place like higher bond yields or higher forward expectations for the fed funds futures. it has shown up in mostly the dollar and a little bit in credit spreads. with the ecb and all the euro block countries lowering rates or doing quantity of easing people have sort of weighed that against expectation of fed tightening and the dollar has shot up. it shouldn't shock us that we're seeing some hit output as a result. >> greg, i agree ewith you. the dollar has obviously, been something that has taken something off of growth. i think it was one of the fed presidents the other day estimated it was half a point or 0.6%. i think that was dudley. but i'm not seeing it greg in any of the, interest rates or any of the ways that the fed normally affects the economy. i just want to throw it to jason.

jason, is all the talk by the fed of a coming rate hike slowing the economy right now? >> personally, i don't think so. i think there are other factors that are at work. i think the fed, though it's always normal for the fed when it's going to tighten to condition the market for tightening. there's a very asymmetrical way of the fed actually expresses its ability to change policy. when you're easing you can ease right away. when you're tightening though you want to make sure everyone is onboard because you can create unintended consequences that get in your way. i think the fed personally will tighten this year. that is simply to normalize rates. you'll still have negative interest rates on the short end. it's hard to view that as a de facto type. >> greg, you also had financial conditions ease in two the first thing is you had lower oil prices during this time the feds have been talking about the higher rates.

you also had rich really come down. we were up north of 2% and now pretty solidly south of it. >> right, because of the feedback effect going on steve. as the effect of the dollar is felt or expected to be felt both on output and on inflation, the market says, how will the fed react to that. oh we think the fed will take longer to tighten. that you see showing up with lower bond yields and that in fact, has been ratified by how the feds spoke. if you go it back to the march meeting and dramatic downward revision of the dots the market basically said oh, they heard us. they're lowering and pushing out the path of tightening and that's precisely when the dollar stock climbing. just remember the fed can try and aim for a particular level of monetary tightness but they can't dictate how it is between the interest rate, credit spreads and so on. essentially what you have roughly equilibrium it stock

going up and the fed seems to be gravitating towards that september liftoff date rather than june. >> i think, you know, for stocks what this means what we're saying in our shop is that you want to be cautious going into the first fed rate hike and i think one of the things here alan greenspan used to call him quarter point al because he would use quarter point every meeting both up and down. what is going to be different this time in my view steve, i don't know whether you agree e. i think it's very likely you'll get a move and then a pause for a couple of meetings as they see how it affects financial conditions. that could be a very important, very powerful signal for a risk later on this year. >> i think it sounds trite and not very up front. it depends on the data. if they have a scare when it comes to wages, that will be an issue. greg, did you hear anything last week. and i was very interested in

what lockhart said which he had told me the end of march that he was definitive in this june to september range and then took june off the table. are you hearing the word, the center of gravity of the board move out a little further from what you initially thought? >> i think you've nailed it. lockhart as good a bellwether you can ask for on the center of gravity. he's talking about september. yesterday i thought it was interesting he was still hopeful for 2015. like a 2015 rate increases itself, not necessarily a given. but, let's keep one thing in mind here. first of all, almost certainly part of the first quarter weakness was whether the port strike, we're going to get some kind of a bounce back in the second quarter. the key is does that bounce back bring back all the growth that we've given up in the first quarter? i don't personally think so. i expect to see further downward revisions in the fed's path for output. the other thing i wanted to go back to a point you and jason were discussing is the other

thing we're seeing that as the fed goes from this forward guidance mode to the data dependent mode it gets harder for the market to call what is going to happen. one reason you see a lot more volatility in the rate market and a lot more volatility around the fed action. >> greg, thanks for joining us. folks, tune in tomorrow i think i can tease this. i have the results of a major two-week-long analysis i have been doing on first quarter growth and how and why it's different. that might surprise some folks. i think we might do that story tomorrow. if there's time, we'll see. tune in. it's interesting and it gets to something that greg was just talking about. something that fed vice chair stan fisher has talked about. i have been crunching with the spread sheets and working with three other economists for two weeks on this story. we should also tell you that underarmour earnings beating by a penny. expected than 25% and the

athletic wear making is upping. the company's 20th straight quarter above 20% net revenue growth and you try add mr. speith and i imagine it may be in the future. we'll see where that goes. at the moment it is on a straight up -- >> those 20 quarters. that's over the last five years. many companies have blamed a lack of consumer interest and said that there just isn't enough demand to pull this stuff off. plink says i don't care how everybody else is doing, it is my job to make sure i create demand for my products. kind of an amazing story line to listen to. when we come back, more on the deadly bird flu outbreak that is threatening the nature's poultry supply. the disease is capable of killing the entire flock in 4 hours. the impact on the food company stock and what this all means.

later she was the real housewife of new york and the entrepreneur of skinny girl consumer cocktails and products. bethenny frankel will join us here on the set. under armour shares look like they're going to ebe down sharply. 83.75 after that stock closed at 87.76. we'll take a look at more about what is happening with these earnings numbers when we come right back. e financial noise financial noise

financial noise financial noise

all right. welcome back everybody. take a look at what is happening with the futards this morning. many earnings reports we've seen some big dow components doing better on the bottom line and that has helped things this morning. the dow futures up by 54 points and s&p futures up by six points and the nasdaq up by 18. take a look at shares of under armour, again. shares of harley davidson. earning topping consensus and the company is lowering its estimated growth rate for the full year for motorcycle shipments. it's citing competitive discounting among other things. that stock down by 5.7%. take a look at shares of under armour once more. the stock is down this morning. down by 4.5% because the guidance, while it's raising its

own guidance not where the street had been anticipating. talking about how 2015 net revenue will come in at about they think $3.78 billion. slightly above the $3.67 billion that they had been guiding in the past. the street was already at $3.82 billion in terms of that revenue. >> blame it on the company or the analysts? >> look, for a hay-growth company, for a high-growth stock, you anticipate big numbers. what happened, the street was already expecting bigger numbers. the stock has been built up based on these higher numbers that the street had been anticipating. even though these are better than the street guidance analysts got ahead of themselves and the stock got ahead of itself. they also talk about what they are looking at. some things that continue to reflect the net impact from the connected fitness aquacquisitions including one-time deal related costs. including playing in on some of this as well. the stock down by 3.8%.

>> it's a huge gains. we just saw them while you were talking, becky. they did the three month. 26% and the six month was 25%. and there's the three month and the one year was like 60%. giving up 3.8%. not higher than the high they already had projected. not the end of the world in under armour as we know it. as we have been talking about all morning. the arrival of a deadly bird flu is raising a red flags for companies like hormelfoods who said it would sell less turkeys. this could be a huge buying opportunity for investors. here with us on the set is farrah oslum. food analyst at stevens. good morning to you. >> good morning. >> thanks for being here. >> my pleasure. >> first of all, before we can get into hormel and it's a buying opportunity, but this outbreak in perspective for us.

we hear the huge numbers and it seems remarkable scary and a little shocking. is it? >> it is notable, but not shocking. and not scary. the bird flu has so far affected about 1% of poultry in the u.s. the impact is at it's very broad-based and spreading everywhere from california up to minnesota and down to arkansas. >> and you think it's going to spread even further? you seem to think this is a buying opportunity, which i imagine means you think this is ultimately contained or gets contained very quick. >> we have a lot of faith in the usda and poultry companies. they have been very good at containing diseases and have been able to recover quite quickly. we note last year the hog industry was hit by the hog flu and has recovered remarkably quick. and we have record declines in hog prices. they are down 50%. >> in terms of price becky mentioned price is not changing

that much. just a function. they sound like big numbers but as a percentage such a tiny piece of the business. >> how big is the u.s. flock. if you wipe out 5.3 million hens, and it doesn't change prices. >> there is only sort of 1%. that represents 1% of the industry production. >> just to push back. it has spread to six states. >> it has. >> however good the usda is they weren't so good to stop it from spreading to six states. is that a cause for concern? >> the issue is that it's being spread by wild fowl the migration pattern of the birds that is causing the spread. once the migration is curtailed and as the weather -- >> it's not inside the agra business. >> we don't have that much time. but i want to get it. make the case for wine. now is the time to buy because you see this as just a temporary blip and who would you buy?

>> we would buy tyson and hormel. protein demand globally has grown 6% and annually very tight supplies and we think these three companies are very well positioned. >> you look at hormel trading at 55.88. that should be trading where in your mind? >> we believe that should go to $63. >> within the next 12 months. >> want to correct myself. 12 states is the bird flu. >> that's even more. farha, thank you for coming in this morning. coming up a real "house wife of new york." i watch. i will admit. i admit, i watch the "real housewives of new york." i want to know if she hates mona or loves mona. she has the big skinny girl line of product of cocktails and shapewear and appliances. i know a lot.

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when we come back we're expecting earnings from verizon. should have a big impact on how

the dow trades today.

welcome back to "squawk box." the stories front and center at this hour. travelers earning a penny short of estimates and revenues also missing the mark and the company is raising its quarterly dividend abouncing buy back. buying back another $5 billion in stock adding to that trend a mixed quarter for i.t. revenue fell short. same story across the board. company said it had a good start to the year despite currency head wind. dupont, of course, the target of nelson and revenues are short, too. company says its results were impacted 25 cents by currency and dupont increasing its quarterly dividend by 4% to 49 cents. bill george out on twitter this morning raving about saying she's doing a great job and no need to change horses as he says. given those numbers. so, there you have it.

we are also waiting on july earnings. >> i have a press release here. it says 1.02 in the first quarter of 2015 compared with 1.15 in the first quarter of 2015. 84 cents. >> it's a 7 cent -- >> it says here. >> no adjustment to this quarter's result. >> i'm sorry, do you have it? >> it is a 7 cent beat. no adjustment for this quarter's result. >> increase in consumer revenues. 11th consecutive quarter. i'm reading the top of the press lease. 133,000 vios internet and 1,000 net additions. that seems like a lot to me. >> wireless they added 565,000 retail additions. total revenue up 6.9%. verizon they say, also had a strong wireless customer

loyalty. they say 1.03% retail churn rate. year over year. the revenue numbers look like it's $32 billion. slightly light of what the street was expecting. >> any commentary of the issue we have been talking about the past couple days which is this new package they're offering and what kind of fight they're going to get into with disney over this espn business. >> you gave that half a million and 55,000. you get that number right? interesting. i don know how you read this stuff these days. so many moving parts in the telecom companies. what is good adding the fios subscribers and adding the total number of subscribers on the wireless. >> the numbers that people are watching. look at the stock right now. again, this is the fourth dow component of the morning and right now that stock is indicated higher closed yesterday at 49.38.

as you can esee, itssee, it's up this morning. verizon beating on the top line just slightly light. you can almost call it in line on the revenue number. if you look at what happened with dupont this morning. the first of the dow components. beating on the bottom line missing on the top line and if you look at where that stock is trading right now and just call that up really quickly. it looks like right now, that is straddling. it's relatively flat. could open lower and open right about in line. utx. that was a beat by 13 cents. important note to be watching, revenue did come in light and the company did not raise its guidance. looking for 7.05 and you may wonder why the 13 cent beat. utc is how they refer to themselves. some items, some things that happened earlier than anticipated. it won't change their full-year earnings. just maybe moving in the calendar shift somewhere

analysts had been expecting those things. that stock indicated up by 1% and travelers. the other dow opponent to report this morning. that stock also coming out with earnings that missed by a penny on the bottom line slightness of the revenue, you could call that one in line too. positive news that they started talking about approving another $5 billion share buyback and raising that dividend by 11%. already a 2.5% yielder. raising by another 11%. you can check out right now that that stock is down by about 2% those are the four dow components we heard from this morning. in the meantime, dig through some of the numbers and this morning last week we showed you this flawless 100 karat diamond. you probably remember it. didn't even look real. up for auction today and expected to bring 19 to $20 million. sotherby's is selling that diamond for an owner that wished

to remain anonymous. kimber brberly-clark reporting. operating profit 10% to 11%. joining us now to talk us through the numbers the ceo of kimberler-clark. kleenex kleenex, huggies and scott sold in 175 million countries across the globe. tell us about the quarter and what are you seeing in terms of demand here in the united states and around the globe? >> very solid quarter, as you can tell. solid revenue beat. more of the beat was outside of the u.s. we have very strong results in emerging markets. places like china, our diaper business was up 30%. fem care was up 30% in china. not sustainable, obviously, but a very good start. organic growth. latin america and places like brazil had a very solid start to the year as well. pretty widespread good execution, good innovation happening in the market.

>> quarterly sales were down by 4%. is that because of the dollar impact? >> correct, yeah. currency was a nine-point drag in the quarter. organic sales were up five. one price, one mix. >> how big of a head wind do you think that the currency is going to be for the rest of this year? i know you were offering guidance about what it is going to mean. cut sales by 10% over the full year. >> it was a nine-point drag on top line and the first quarter. we're saying nine to ten for the full year. not much worse from here on out. if you look at where spot rates are today relative to our guidance, they're similar in most cases. bigger impact on the bottom line and in the first quarter, the bottom line impact was 25 cents a share. almost 18-point drag and, so we're saying this could be as much as a 20% drag for the full year. >> tom, this is a question of dumb math here. humor me for a second. if the dollar stays where it is right now, are next year's first

quarter revenues profit up by 10% because you don't have the dollar drag? >> yeah, i mean you'd see that strong top line growth. now, obviously, we had a great start in some of these markets. but, you know that's the comparison. part of it you're getting some pricing, steve. these markets where you had a big currency swing and you probably wouldn't get as much price in russia for example. we've been taking price as crazy and you won't get that same level of benefit. >> to the point that you felt like it was maybe a good idea to hedge some of your foreign currency earnings? >> we never hedge translation exposure. i really have a hard time trying to spend cash to hedge a noncash exposure. we do have transaction exposure where we can. if we're buying bulk in a market we'll hedge part of that

purchase, if we can. the places you'd like to hedge, you can't find anybody to take the other side of that battle. >> hey, tom, you are offering guidance for the full year of 5.60 to 5.80. street's just at the low end of that. you sound pretty optimistic. fair to paint you as somebody who is looking at things and thinking it's pretty upbeat from here? >> we really feel very good about the start to the year. a lot of moving parts out there. we have great execution, great innovation coming and at the end of the day we want to be there with the products that mom needs. >> who are you stealing market share from? >> you know in the emerging markets still so much growth. you talked about underarmour earlier try to create demand. we look at market share and also looking in china. how many cities are we in and

how can we expand our distribution and go into ecommerce more aggressively. we are recruiting consumers into the category and then helping them use their products in the right way over time. >> the stock is trading higher this morning. tom, we want to thank you for coming on and joining us right after the earnings like this. >> thanks very much. when we come back i'm getting so excited about this all day. i'm just saying. the entrepreneur who launched skinny girl cocktails and built into a lifestyle brand and beauty line and even a blender. bethenny frankel will join us. we'll do that right after the break.

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♪ ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ ♪ she can print amazing things right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ ♪ my mom works at ge. ♪ ♪

welcome back to "squawk box" once upon a time a struggling food chef to went to win the title of martha stewart's apprentice. turning out a wide range of consumer products and not busy enough, writes best-selling books. the latest that says "i suck at relationships so you don't have to." we'll talk about that and many more. bethenny frankel one of the "real housewives of new york." thank you for being here with all of your stuff. >> thank you for having me. >> this is a much broader line

than i realized. >> i think most people think it is just cocktails. it started with over 20 varieties of wine vodkas ready to drink cocktails and we moved and we have different partners. we move under to microwave popcorn, dips look at water enhancers, appliances arizona in our nonalcoholic beverages. i get into businesses -- >> how did it really happen? what was the inspiration to begin with the vodka? >> it start would the skinny girl margarita because it is a practical solution for women. >> where did you come up with the skinny girl name? >> i think it was around 2007. i'm not, it might be a little later than that. >> was it a moment? >> i think there was a moment. i pretty much like things to be straight forward. i don't like things to be ambiguous. when you see this, it is a thin girl.

the name describes what the brand is and the name i said it, i said it's a skinny girl margarita and i felt it and you have to go with your gut and business. >> once you, once you do the margarita, do you say to yourself, okay it is going to be all of this or this just sort of happens organically. were you empire building from moment one? >> it resonated with people and then i went to find the right partner to create it and then partnerred with beam which is now beam simply in cocktails. we're partners in cocktails and then maintain the intellectual property. i created all these other categories. but i do it as i go. i don't say i want to take over the world. i think there needs to be a great low-calorie hummus. lower in calorie and better in taste than the competitors and the nutritional bars. it keeps going. >> somebody approaches you now and says i want to have a skinny girl version. i'm looking at that soda stream right there. it is unique. looks like the one that has somebody else's label on it and

it's the skinny girl version in there. >> that's a great question. i only co-brand with certain people. orville redenbacher is the best in popcorn. their name is very tiny. it's skinny girl. they don't co-brand. and arizona has never co-branded before either. they usually just have -- >> this is a massive licensing business or licensing in the name. how involved are you in the product? who actually owns? >> i own the intellectural property and the brand completely except i have a partner in cocktails. i have combination but i am responsible for every word, every bag. the logo, the flavors, everything. and some people i will co-brand with, depending upon the brand. >> not involved at all in this business at all has no knowledge at all of what is going on. >> i know you from the "housewives." and i think of you, to be honest, oftentimes in "us"

magazines. is this what you do all day? >> this is where i enjoy being the most. this is where i thrive and it's a lot about gossip and a lot about my marriage and my relationships and what i ate and what i wore. but this is where i enjoy being. getting up this early i enjoy. >> how important is housewives and being in "us" magazine and the tabloids and the gossip to this brand. >> i had a talk show that was five days a week and it was not the same target audience as bravo. and being on bravo, it is the inflewuewance withersin influ wens influance with. i live and breathe this brand. every taste, every product. if i don't like it i obsess over it. i don't sleep. >> to answer his question do people come to you now and -- >> that was an awesome question. it depends. i wanted to do a nonalcoholic

beverage and i initially didn't want it to be sparkling. there is a big market in sparkling. that's fine but next a natural energy drink or recovery drink. the same thing happens with the chips. i want to do interesting flavors. you go back and forth. another partner came to me with jerky. y jerky. >> skinny girl jerky. seems -- >> i was about to do burgers because they were going to be 120 calorie burgers. if it's jerky and it's lower in calorie and lower unsodium. it might work. >> but tell me how memory activist. >> men buy a lot and they say, can't you call it skinny guy? >> right. the launching of skinny guy? >> no. how about just skinny. >> it's not about skinny girl. a skinny girl who could be a size 12 and how you feel and

being confident and indulging. this brand is about allowing. allow people to have. as far as skinny guy becoming a brand. it's not going to be about women. you don't know an apple on your computer is an apple the fruit, but you don't think about it. it's a brand. you try to please everybody and you please nobody. this is the brand. it's targeted towards women. >> skinny girl potato. trying to poison you. >> i brought the skinny girl margarita home. i have. >> it's good enough for a man. >> it was unfair. >> let's talk about how much you suck at relationships. and what that's about. >> the point is i used to suck at business and here we are. i learned from my mistakes and i go with my gut in business. >> what is the big lesson for all of us? >> women don't go with their gut in relationships. they convince themselves the

biological clock and fairy princess when they're kids. they feel it is the right time and they have to make a decision and they don't go with their gut, the way men do. if we used the truth rather than fear, we would be better off. >> pushing into a line of undergarments, too. >> this is from early on. this is skinny girl shapewear. very well made and well priced. shapewear you want people to see. >> how does it compare to spanx? >> we're not as big of a business as her. she was the pioneer. i think that a lot of it is prettier and i think that it's an amazing product. this is a very very inexpensive product and it looks like it's $200. it's really beautiful and you want to wear it underneath and keeping you together for those special nights. >> do you have a business background. do you take business courses? >> no, this is my mba. >> really it's so interesting. what is it that you bring when you try to figure these things

out about costs? is it just your experience as a shopper, as a person who is looking for value? >> i feel like i am a consumer and i am totally looking for value. i think i have an idea of what women want and then what i don't know, i ask other people. i know exactly what i'm good at and i know what i'm not good at and i do have great partners and i have a sense for this. we all make mistakes. >> i have a ereality show question. how real is it? do you really love mona hate mona -- >> ramona. >> what is it? when i read this stuff, what am i supposed to think? >> a lot of irresponsible press but watching the show yes. it's exactly how i feel and i'm not afraid for people to not like me, as long as i'm being true to myself and open to scrutiny now that i'm back on the show. the show is real. the feelings that i have for these women are real love or hate or annoy or whatever. and because, yeah why would i put myself through that if it

weren't true? why would i allow people to dislike me and criticize me and open myself up. >> they love you because they're buying the products. >> they are buying the products but they're good products. i'm happy. i'm grateful. but i do love being here. >> fantastic. i'm having her on as a guest host. >> qualify. >> totally. >> she talks business better than half the guys on the show. >> 100%. >> thank you. >> thank you. >> thank you guys. you said you had nothing to contribute. you said so much. >> i just listened to. i think it was cruel and unfair to put me in front of anything skinny girl. the producers are having a good laugh at this. coming up, a flood of earnings. we have been keeping you up to speed. the four dow compoentnents that reported this morning. a look at other companies with earnings out in the last hour. ce. today, i lead a team that sets our global safety standards. after the spill we made two commitments.

to help the gulf recover and become a safer company. we've worked hard to honor both. bp has spent nearly 28 billion dollars so far to help the gulf economy and environment. and five years of research shows that the gulf is coming back faster than predicted. we've toughened safety standards too. including enhanced training... and 24/7 on shore monitoring of our wells drilling in the gulf. and everyone has the power to stop a job at any time if they consider it unsafe. what happened here five years ago changed us. i'm proud of the progress we've made both in the gulf and inside bp.

let's take a look at some stocks to watch this morning. couple things to pay attention. earnings beating the streets and sales fell for the 12th straight quarter. the strong dollar continues to be a head wind though. empty calories that she likes to talk about. >> the revenue that's not profitable. that's what they have been trying to shed and get rid of it. >> check out shares of arm holdings. powers the iphone its profits topping expectations. software giant posting better

than expected results. when we come back the battle over athletic gear and masters win marks a huge vktry for his sponsor underarmour and they locked him in before he earned his pga tour. when "squawk box" returns.ging ] your car insurance goes up because of their bad driving. people try all sorts of ways to get rid of them. [ driver panting ] if you're sick of paying more than your fair share... [ screams ] get snapshot from progressive, and see just how much your good driving could save you.

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under arm our play on the same field as nike. the stock sitting near an all-time high. the right plan to take it to the next level? developing this morning, a bird flu outbreak hitting millions of chicken and turkeys across america. can we expect more cases to crop up and what impact will this have on prices for poultry and eggs? and the legend lives on. it's been 50 years since the famous photo of the monitor appeared and now google joined the hunt in scotland and they found something. the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york. this is "squawk box."

welcome back to "squawk box" here on cnbc first in business worldwide. i'm becky quick along with andrew ross sorkin and steve liesman. watching the futures this morning, been in positive territory all morning. in fact, this looks like the high end of the range we have been watching. dow futures now up above 70 points and s&p futures up and nasdaq up 18.5. green arrows the leader of the pack is dax. up 0.75%. greece down by 3.5%. a developing story out of the midwest this morning. the bird flu virus found in an iowa farm. more than 5 million hens must be destroyed as a result. iowa among the 12 states that now detected bird flu since january including wisconsin.

the risk for human infections considered to be low and no human cases have been reported. we talked about it with an analyst earlier. hormel turkey will sell less this year because it forced farmers to kill more turkeys in the last month and only affecting 1% of the marketplace, if you will. the analyst we had on earlier said buying opportunity because, u.s. government -- >> i didn't know. but it was interesting what she said. her response was it was the wild fowl that is spreading the disease and not a matter of inaction or late action by the usda and you're right that analyst said very specifically that her call is based on the faith in the usda's ability to contain this disease. >> one thing we didn't have time to talk about earlier the first effect is on corn demand. that the turkey and chicken inventories are among the biggest users of corn and soybean meal. he thinks you will eventually

see it and that corn meal is where he thinks it will show up. >> an offset to the price hikes. you have hout breaks like this and you'll have for example, if turkey prices go up people blame the fed. but somehow, remember we had the spike in we could do a bacon news animation right now. you had the spike in bacon prices. the fed is at fault here for this run away inflation, but that was a disease among the hog industry. moving on here. four dow components reporting this morning. travelers earnings and revenues missing the mark. but the company is raising its quarterly dividend and announcing it is buying back another $5 billion in stock. a mixed quarter for united technologies. earnings beating handily but revenues fell short. the company said it had a good start to the year despite currency head wings. >> we should go back to the guidance for this company, again. beating by 13 cents. a pretty big deal. didn't raise their guidance for the full year because some items shifted in the calendar year. they saw some gains earlier

rather than later. >> i think you said anticipation of more currency head winds down the road. dupont earnings topic consensus but revenues are short. the company says its results were impacted by 25 cents in currency. this is a recurrent theme here. increasing quarterly dividend by 4% to 49 cents. verizon earnings were 7 cents better than expected. revenues missed consensus by just a little bit. and, is it you, becky? >> under armour another stock we have been talking about. posted quarterryly results. revenue raising 25%. the athletic wearmaker raising full guidance and those numbers are short of what the street have gotten to and that's why you see the stock down by 3.5% and analysts getting ahead with themselves. the ceo kevin flank knows this is the company's straight quarter above 20% net revenue growth and remember those 20

quarters a lot of them during the great recession. this company managed to grow during those times. does raise the question about whether the playing field for athletic apparel is big enough for underarmous and nike. founder and incoming director of the sports business program at washington university in st. louis. brian nagle with oppenheimer. brian, you first. what do you think about not just this quarter, but also about the guidance for the year? >> i think, becky, you summed it up pretty well. this is by most measures this was a very good quarter. i think the question is is it good enough for the lofty expectations in the marketplace? we see very few companies out there in the consumer space that can post this kind of top line growth consistently. but give on the run in the stock and expectations embedded in under armour. some cracks here. >> what is your price target if you have one?

>> i have a neutral or perform rating on the stock simply because of valuation. i think under armour is a phenomenal company. they are quickly approaching that number two spot in the athletic apparel and footwear manufacturer space. but the valuation keeps me on the sideline. >> patrick, let's talk about the field overall. nike and under armour have gone neck and neck in terms of what they're doing with their new products and players they're lining up for endorsements and sponsorships. what do you think about what is happening so far? >> under armour has to be commended for their eye for and this year in the nba and jordan speith. they locked him back into this ten-year deal back in january. what they paid is no where near the $20 million to $25 million that nike is paying rorry mcilroy. they have an eye for talent. as was mentioned, a huge gap.

nike is at $27 billion and under armour at $3 billion. a huge gap. but under armour closing in a little bit over time. >> patrick, in terms of who likes which brands and which brands perform better in different arenas. how do you shape this up as the battle between these two companies? >> well, what's interesting is i wonder if nike had to do it over again, would they sign jordan instead of rorry mcilroy because he's an american and that does have an impact at least for domestic sales. having rorryy mcilroy and tiger woods. as great as they're going to be, they're not going to necessarily help turn around the downturn in golf and neither one will have the culture or social significance of tiger. >> guys here's a question that i wonder about when you think

about, when you think about these athletes and look at the stock. after spieth won under armour jumped. is that actually i could see some additional sales. but is it that, is it a true magnitude jump like that? >> it absolutely can be. again, i was thinking about this, watching the tournament. i am a huge golf fan and watched most of the masters. all you're seeing especially with a wire-to-wire winner like spieth was you see under armour. at the end of the day, he's getting that exposure for the company. they estimated $34 million in media exposure for under armour during the tournament. that does resonate especially if he keeps winning. >> first of all, jordan spieth. jordan spieth. i want to pick his picture up. my 14-year-old kid sitting next to me saying dad, i want to go golf. that's while -- he was asking questions about golf.

i actually e-mailed joe to ask him some questions about golf that my kid had asked. he wants to go golfing now. i think that's gold guys. >> new blood. >> that's what the sport and how you left it. these guys are pessimistic about spieth's ability to be that rock star that brings the kids in. i'm telling you, at least one kid is interested. >> that's the golf story. let's look at some of the other sports that are out there and trying to figure out who dominates where. when it comes to basketball who is the leader there? >> well yeah. and my view nike still is on top of things. you look at what they've done this past year with lebron and his return you know his triumphant return to cleveland. might be extremely triumphant depending on how they do in the playoffs this year. becky, one thing you have to mention the ving sports and then basketball and soccer where the stars really stand out. it's in those sports that you

really see the star athletes and soccer obviously, messi, these athletes certainly have huge impacts because those are global brands. and basketball, the stars in basketball, like lebron and like kobe, basketball, at least of the american sports, is the most international because where guys are coming from all over the world. >> you know, i can't believe we had this entire conversation and haven't mentioned adidas. what about them? >> it's funny you mentioned it. if i can twist it back into golf. as good as spieth and mcilroy are. last year taylor made adidas was down 30%. golf is too expensive for the average folk. so, unfortunately, it's going to take a lot to try to build the sport back up to where it was in tiger's hay day. >> one other thing, does the success in golf transfer over to other sports? meaning you see the logo in the golf arena and do you then go buy under armour basketball shoes?

sneakers. >> i don't see that so much for under armour's situation. now, in nike's case because of just the quality, the strength of the brand and the other thing, too andrew is in economics we talk about first mover advantages. nike has that over under armour and such diversity in their brand. but under armour is coming. i saw kevin playing sp. >> patrick brian, thank you, both, for joining us today. >> thank you. >> kevin plank sold grateful dead t-shirts in the parking lot. coming up dow component verizon reporting a short time ago. we go through the numbers and find out if it's new channel plan can connect with customers. later, is it time to get out of u.s. stocks and into emerging markets? veteran investor mark mobias thinks so. investment group cio if he agrees.

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i don't want my family to be without power. it's much more personal to me for that reason. i don't think there's any place i really would rather be. welcome back to "squawk box." the futures right now up about 70. up 59 now. still pretty strong. 6.25 on the s&p 500 and nasdaq at the open would open up nearly

19 points. shares of harley davidson down sharply this morning. earnings topping consensus but sales were short and the company is lowering its estimated growth rate for the full year motorcycle shipments citing competitive discounting among other things. >> verizon earnings were 7 cents better than expected. still everyone talking about verizon's own over the top program. jennifer is of wells fargo security. good morning to you. >> good morning. >> you're impressed by these numbers, unimpressed by these numbers? >> i'm impressed. i think they offer further evidence this is a company seeking balance and profitable growth on both sides of this business. wireless and wireline. >> and so when we look at these numbers, the big ones i'm looking at i assume are fios in terms of the additions and i'm looking that wireless in terms of the additions. >> yes, wireless were actually a little less than we were looking for and i think that of the street. importantly, tablets for almost

about $800,000. that's really verizon's strategy at this point. keep in mind they have 100 million customers. as they layer on new devices they will be more on the internet side. you mention the over-the-top offering and i think part of this is very much laying the piece work to that plan. >> let's talk about that and how that is going to impact the company going forward. your expectation obviously, a big debate about the way they're offering these packages in terms of these, kids package, sports package and you layer them on top. disney that owns espn saying this isn't in the contract. you're not allowed to do this. what do you think happens behind the scenes? >> i think we have put out a report recently talking bout how with their wireless operations they have the largest, the biggest carrier that wireless is very much becoming a part of the conversation in over the talks. even since the at&t direct tv deal that was announced last may, may of 2014.

a lot of data points suggest you don't need to own a linear tv asset to have a strong relationship with the content company. even with the noise of last friday with verizon's new packages, i think that you're going to see more and more of the type of the content announcements coming before we see the former offering announced this summer. >> you think it will actually happen? >> we have to see what happens with disney. i think a point was made this morning how this resolve will say who has the strength in the conversation. but i actually think that they're providing an interesting hybrid solution that is going to appeal to a lot of people. >> when you say that ott, meaning over the top and what have you is now going to be integrated into the wireless piece of this business. are you talking about people watching television on their devices in equivalent to ot or wireless network? >> i don't think we're talking about replacing what we're all

watching in our living room or family room. i think it's more a compliment to that. i am at my child's soccer game and with want to see a tidbit of something. i am watching it on my mobile phones. verizon having the field they do, again, with over 100 million customers and that's where these tablet editions play such an important role. i think we're going to see a lot more. >> but real quick. if she's right about that and then you talk about the comcast, timewarner cable issue. comcast owns the broadbound pipe but if you believe wireless truly competes the dynamic changes. >> i don't know if you answered this or jennifer answer this. i was talking to a tech guy from verizon the gigahertz spectrum of video over wireless? >> i don't want to interrupt. but i think spectrum in general, be it mid-band high band low band is critical. i think there you have got to give verizon an important edge.

you know they were active in the auction but not backing down on capital expenditures unlike others. i think that's critical. i think we'll hear a lot more on their strategy. >> my understanding there is a spectrum that is the same spectrum used by your wireless phone in your house. and they're going to auction this off and this guy would tell me this would absolutely change wireless video over wireless. it will make it so that it really works like a tv. >> but here's the question. economically, do you ever can you ever make the economics of wireless competitive with wire line? >> i think that is -- >> physics issue of being able to actually be able to stream the same type of bandwith over the wireland. that's the issue when it comes to the competitive debate we're having. >> i think it's only even passable if you continue to invest in your network and that's something verizon again, is in no way, shape or form

backing away from. >> jennifer, thank you for joining us this morning. >> thank you. thanks a lot. when we return this morning, have you seen google's doodle today? paying homage to a famous photograph and joining the hunt for a monster in lockness. we'll have more on that after the break. can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is can your business deliver? tdd# 1-800-345-2550 [ male announcer ] your love for trading never stops tdd# 1-800-345-2550 even on the go. tdd# 1-800-345-2550 open a schwab account, and you could earn tdd# 1-800-345-2550 300 commission-free online trades. tdd# 1-800-345-2550 so if you get a trade idea schwab can help you take it on. tdd# 1-800-345-2550 we're getting a lot of questions tdd# 1-800-345-2550 about organic food stocks. tdd# 1-800-345-2550 [ male announcer ] sharpen your instincts tdd# 1-800-345-2550 with in-depth analysis by schwab experts. tdd# 1-800-345-2550 and if you want to run your idea tdd#

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placed explosive to blow out of the water. summoned the help of scotland wizards over the lake and the local residents and the existence of our under water ally. napoleon dynamite. could google street view possibly found evidence of the lochness monster. used the new cameras and teamed up with local divers in scotland to capture images above and below the water. one image did catch both google and loch msz monster by surprise. there it is. is it a log? is it a rock? is it a duck? is it the monster. the release of this also coincides with another great

thing. >> that doesn't look like the lochness monster. >> can we switch between them? this is an insurgent photograph. released on this day in 1934. >> that one, maybe. that looks like a couple ducks, are you kidding? >> i don't think it's ducks. not when you zoom in. can we zoom in guys? we can't. >> we can't zoom in but just trust us. >> just having fun here. you got to really. >> that's not proof. >> you have to really just all over the story here. photo revealed it be a fake. >> the original photo. the one we were looking at. the "sunday telegraph". >> don't believe everything you see, steve. >> really? that's not the loch ness monster. in the weird files another story for you this morning. a 120-pound competitive eater

conquered dinners at a restaurant in amarillo. >> that's not health yy. three steaks plus three baked potatoes. three shrimp cocktails, three salads and three rolls. she finished her first big dinner in 4 minutes and 18 seconds, which beat's the restaurant's record of 4 minutes, 58 seconds. >> what do you get if you win? more steak? >> heart burn. >> i'm grossed out. >> you enjoying your breakfast, everybody. >> that's totally disgusting. coming up the ceo of -- >> we should send that woman some skinny girl product. >> she doesn't need them. she's 120 pounds. >> that's true. cio of merrill private banks give us his thought. where chris wolf is putting money to work for clients.

millions of chickens infected with the bird flu. we're going to take a closer look at how the latest avian flu outbreak. "squawk box" returns in just a moment.

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welcome back to "squawk box," everybody. let's take a look at some stocks to watch this morning. kimberly-clark reported profit of $1.42 a share. nine cents than the street was expecting. kimberly-clark warning that currency effects will cut operating profit by 10% to 11%. adjusted quarterly profit 2 cents better than expected. network security company benefiting from the addition of 8,000 customers during the quarter. revenue was helped out by the cheaper euro. we're also talking about ibm this morning. earnings beat the street but

sales fell for a 12th straight quarter. the strong dollar continues to be a head wind. but becky and i have been corresponding with their vice president of communications this morning. and we had an analyst on earlier who, and said, you know ibm is not a top tier player in the cloud. i don't know if we have this full screen. i sent we do have it or not? we don't. i guess we'll have it later. but i asked, are you saying that ibm is as big as amazon and this person wrote back and said yeah. we don't know i'll read it to you. >> i have it right here. >> do you have it there, becky? he said, they'll report amazon on thursday, so we'll see. but our last 12 months was $7.7 billion. that's revenue trailing earnings from the cloud. a revenue from the cloud. that's more than what they amazon, had indicated in the past and it's growing fast. as you said, you being me

nuthing to shake a stick at it apibm is talking a little cloud trash here saying you know we're not a second-tier player here. >> i did notice last year and he came into the new job at microsoft. they asked who our competitors were and he just mentioned top competitors of who he thought when it came to the cloud. he didn't mention ibm either. he mentioned hewlett-packard and google google. i was surprised not to see ibm in the running. ibm investing more money and we will be able to compare this better if amazon tells us more numbers about it. >> you have another message for this vice president of communications about jenny, don't you? >> we would love to have jenny come on. >> we could solve all of this. >> same thing with amazon. amazon doesn't always give all the numbers that you'd love to hear on some of these things too. ibm's point, they're disclosing -- >> they are saying they invested $1.2 billion in new cloud

centers around the world. i don't know if that's a lot or a little. >> anecdotally it feels like amazon has to be bigger not because of amazon in the retail space but if you talk to a lot of different companies, they rely on amazon's cloud. what we don't know, enterprise. >> amazon give us some real numbers. ibm will sit there and talk about it. >> we have done a lot of research on this. i want to look into it and see what amazon has put out. >> see what one of our cloud experts say ibm is a small player, big player or medium player. in the meantime talk about the avian influenza. morgan has more on that story. >> the usda says an iowa farm with 5.8 million egg laying hens has been infected. it brings the total number of chickens and turkeys that have been impacted in the states to nearly $8 million. the usda has not i.d.'d the

farm, but that does represent almost a tenth of iowa's hen population. just in recent weeks we've seen cases in iowa arkansas missouri, as well. wisconsin governor scott walker has declared a state of emergency issuing quarantines and enlisting the state's national guard to help with cleanup in that state. now, just to be clear, guys. there have been no human cases detected in the u.s. the agriculture department says this poses little risk to human health. but it is bad for business. we've seen canada china, mexico, the eu all ban poultry imports from certain american states since the start of the year. and last night, hormel foods said 2015 earnings would come in at the lower end of guidance thanks to "significant challenges in its turkey supply chain due to this virus." taking a share of other poultry companies, as well. tyson foods and pilgrim's pride and all three of those stocks are down since the start of the year. guys, back over to you. >> okay.

>> real quick, you know because i have now been looking at it it might be a little bit of a toss-up. >> between the two. but that's a surprise. >> amazon does break out cloud revenue, too. they were one of the first and putting pressure on it. >> what is their cloud revenue? 12 months. >> but they throw a lot of stuff in there and there are questions about what's in there. >> it's news to us to hear that ibm is now such a big, as far as my understanding of the cloud business. >> fidelity didn't list them as a competitor. >> making some news this morning. the dow up over 200 points, that was yesterday rebounding from friday's selloff from china's central bank. the futures at this hour up 61. right about where they've been. between 50 and 70 all morning on the dow. 6.25 on the s&p. joining us now where markets are headed from here. chris wolfee and investment group chief investment officer. do you want to weigh in on this

whole cloud thing at ibm? the market was, in terms of how they took ibm earnings yesterday. >> a comthinguple things. first quarter unings and companies say earnings are okay but that top line is light. they don't say the weather, they say it's the dollar or they say some other kind of slow down in business expenditure. things being light on the top line is more troubling, i think, in this environment. ibm was a good case for that. >> i felt yesterday completely lack of confidence in the 200-point rally because i felt nothing that told me today, it looks like it's continuing this morning in the futures. but today given the way things are going up and down by triple digits quite a bit the last several days. >> stimulus. where did it come from? u.s. to europe and now moving to china because we've seen the japan story play out. i think the confidence that there will be enough liquidity in a world where there is not a lot of alternatives where you see other players come in. china central bank they have to

figure out their debt issue with more stimulus likely to keep markets propped up. if you look at what's going on we have to split. stock prices going up and we have earnings. look, they're going to be in a recession in 2015. that's more troubling. >> so let's 1,116 tell me what you do. >> we do a couple things. after we talk about the goal of what is important to the client and figure out where they want to be if their goals are longer term, we still have a pretty high component of equities and portfolios. right now for a 60/40. 60% in equities and 40% in bonds. less than we used to. >> how do you get out of the way of the and it's frozen everybody, including myself, by the way. went back and look at what i did badly in 2014 and not believing that the long bond could rally any more and being short. and now i'm going to be short

again or i should be long? i don't know what to do. that 40% is much more of a puzzle for me than the part that should be the puzzle which is the 60% in stock. >> i think the reason you keep bonds and portfolios is two folds. you don't have a lot of other sources of income and liquidity. you can get coupons from your total portfolio or deriv ddz. but we don't know what the deflation risk looks like. current income at any price is really what matters. so, with companies saying top finds are a little bit weak and still a lot of debt globally. that deflation pressure is not zero here. >> get you to respond to something we talked about in the 6:00 hour. we asked mark what he thought about u.s. equities and he ehad a little different opinion. listen to this. >> right now emerging markets outperforming the u.s. and the world. so, since the beginning of this year we've seen this outperformance. so, i think now is the time to shift out of the u.s. markets.

>> you agree with him? disagree with him? >> getting out of u.s. stocks i think for somebody who has long-term liability to get out of u.s. stocks and put it in china, that's absurd. are there opportunities in emerging markets. there are reforms driven in india and the debt burdens in china. manage the cost of being wrong. more emerging markets, but we want tabe more selective. >> when you say a little bit more. just do the pie for us. >> so, that 60/40. the 60% in global equities we typically talk about clients having two-thirds in the u.s. and a third outside u.s. and about a third of that so little bit less than 10% of the portfolio in emerging markets. >> how would you do with europe and asia right now? >> really just the europe and japan. kind of the big exporters have done extremely well. the currency is continuing to add to their earnings and play it that way. so, be relatively kind of equal

weight relative to the world bench mark. >> still want to structure that bond portfolio. what do you do? you're going to be evenly spread out across maturities? >> most of the u.s. focused. taxable municipal and state finances look really good. what is looking sketchy is all that dollar denominated debt. >> what about the term structure of the portfolio? >> laddered out 15 years or so. in line with duration. not a big bet and owning 30-year bonds and looking at movements in the curve is being our main way to gather income. >> i'd be very nervous with a 15-average maturity in my bond portfolio. i'll get whacked by a freight train. >> if we're wrong and growth picks up nobody is going to get hurt. the stocks should do reasonably well. >> thanks, chris, that is great. coming up energy inoivators and pioneers gathering in hoous houston for the conference and one of today's featured speakers

will be herald hamm. he's talking to "squawk" first. a new breed of startps are getting paid to hack. bug bounties and hackers are making millions. the cto of hacker one joins us. how the company is helping twitter, dropbox and others find flaws and fix them. "squawk box" coming right back. financial noise financial noise

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welcome back, everybody.

the ihs spirit week conference is under way in houston. showcasing inonovators and pioneers of the industry including herald hamm. herald, great to see you. >> hey, good morning. how are you this morning? >> very well thank you. you know you said some things in the preinterview that i'd like to dig in a little bit to. there have been a lot of people who have been thinking that myself included that prices might come back quickly, just like they went down quickly. but one of your points is that it takes a lot longer to come back online than it does to take it off. >> it does. it takes quite a while. you know, it's easy to shut it down. you know in fact in the last four months, 1,000 rigs have been laid down and, you know we have 105,000 people out of work. in this industry. so, it can shut down quickly. but it takes three to four times as long to bring back on becky.

not an easy thing to get all the equipment back and contracts, permits, well permits, everything in this industry takes a good while. about a six-month lag, if you will. >> if that's the case, where do you expect to see oil prices and natural gas prices let's say, over the next 6 to 18 months? >> well, you know right now as we predicted, you know, you shut down and pull back and that's the only thing we could do. we have to react to price. and so we pull back on the work that we did, you deserve cash. i'm talking about the industry. i'm not talking about continental. but everybody had to conserve cash. you shut down and once that happens, you know then supplies start to wain. it takes two to three months. we are seeing that now and over the next few months it is going

to fall. we expect in the first year just from three primary plays in the u.s. that we'll see production down as much as 700,000 barrels a day in a year. >> that will mean what in terms of the spot price and the future's price? >> well here we go again, on this roller coaster. you know you cut supplies and price goes up. it responds. and, so, it will be back up. that's not good for producers and certainly not good for consumers to be on this roller coaster. so, this all comes about because the primary problem, of course we can't export. we can't access world market and we have a huge mismatch here of refinery capacity in the u.s. two-thirds of us now set up for heaviest hour and we can't access the sweet crude market that is out there in the world. the refineries that is out there that is available, should be available to us. that's not.

>> your point in this you know another thing we talked about is whether or not u.s. energy should be exported. i've kind of been a little skeptical about whether it should or not. and you said something not too long ago that surprised me. the foreign owned refineries aren't subject to that rule. they can do whatever they want. as a result there is an uneven market. can you explain that a little bit more? >> sure. well, they're sending out refiners. they're allowed to export. they're exporting exactly what the consumer needs. gasoline, diesel all the refined products. last month it was 4.5 million barrels every day of refined products that goes out of the country. so, 4 to 4.5 million barrels a day. they're allowed to export exactly what the consumer needs and, you know e, it's crazy thing that they exist here in the world as far as oil policies. >> however, you don't think that that is the policy that is

likely to change any time soon. >> well you know it's been about a three-year process educating everybody. there has been a number of hearings on both the senate side and the house side on this issue. and, you know it may not take as long as everybody thinks. you know, i don't think anybody is rejecting the idea. i mean here we are thinking about sanctions on iran and let them export. and, yet, here we have sanctions in america that we can't export our oil? you know what's going on? everybody else we built pipelines to canada and to allow them to export. yet we can't here in america. there's something wrong with this policy. >> actually senator lisa murkowski of alaska said just that earlier this week at the conference that you're speaking at today. do you think that movements like

that, though will get play and will actually get traction and turn into anything? >> i didn't understand the question, again, becky. >> what you are talking about is actually something that senator lisa murkowski brought up yesterday at the conference you're speaking at today. she plans to introduce legislation later this year dealing with that. do you think that legislation will pass? >> yes. i understand now. no, she did a very good job laying it out. you know she understands the issues. and has held hearings in the senate. you know wonderful testimony was given there. so, i think it will move forward. i think it will move forward quickly. there's a house bill joe barton has introduced. we expect the senate bill out shortly. there's a lot of support for it. there's a bipartisan issue. both democrats and republicans are expected to sign on.

you know so, there's a lot of different groups working on this. all the oil gas industry associations are lined up on it. you know the refinery association supports it as well. >> herald, a lot of controversy about whether fracking creates earthquakes. the u.s. geological survey shows that over the last six years the rate of 3.0 magnitude and higher earthquakes in oklahoma has been 300 times higher than it was in previous decades. what do you say to that? >> well you know, these earthquakes primarily happen in areas where there is still oil and gas activity first of all. second of all, there's not any tie to stimulation fracking of wells in oklahoma. there's been no tie to that at all. you know it is proven that you know, you can put injection wells, disposal wells and salt

water on salt plains and you can have some disturbance there. but for the most part that hadn't been the case. like i say, these have been happening areas that there's no oil gas activity in. so it's you know we're on top of the ridge that runalizeidge that runs all the way through oklahoma. back in mid-'50s a lot of activity on that feature and we're seeing the same thing again right now. >> carl love to continue this conversation and we have breaking news right now. we look forward to talking to you again soon. we want to break in with this news right now. the generic drug company has now made a proposal to buy miland pharmaceutical pharmaceuticals. i don't know if we can flip the stock up there. it's in the premarket up 10% already. up $75. but $82 a share is the price tag for the offer. that would represent, we should

say about a 37%, 37.7% premium over the stock on april 7th. this will be a 50% cash deal. 50% remember is mylan sought to pursue an inversion successfully last year. teva an israeli company. outside the country in terms of tax implications there for that company. this would put two of the biggest generic drug companies in the world together. we have more on this during the break. when we come back, we'll talk about that and a lot more. >> we'll also be talking about companies that want to be hacked and they are paying hackers good money to do it. sparking a new round of start-ups to build a safer internet. we'll introduce to you hacker one and talk about this trend.

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new breed of start-ups helping hackers make millions. they're doing it legally. tapping companies like hack other one to help find flaws in their security systems. the co-founder and chief technology officer at hacker one

is here to explain how it works. who is getting paid? how much do you get paid? how do you find the hacker to go in and hack you? >> security's a very challenging problem. the companies participating in these programs are starting to acknowledge that and understand in spite of all the things they are doing internally you want to prepare for that inevitable circumstance when one of those security holes makes it out to the public. the concept of these programs is really rooted in trying to get as many eyeballs on the problem as possible. there is a diverse set of brilliant computer engineers, academics and security researchers out there capable of helping companies identify problems before foreign criminals would. >> what is the pricing model? we have the bug bounty business. is there a bigger bounty if you can get in? >> absolutely. there are bounties ranging up to

the six figure range down to much smaller ranges. the averages is around $650 but they vary quite dramatically. >> how does it work? it's almost like a bidding system? >> companies set the criteria of -- not all hacks are created equal, essentially. depending what you could do with that security hole you found. companies rate the implications differently. across the individual security hole -- >> what's the worst thing people have found? is there stuff you can't even talk about, i imagine? >> there's plenty our customers find that aren't disclosed. some of the higher prey vulnerability are those in browsers. the bounty program for the chrome browser, fire fox browser, those things that allow you to take over somebody's computer by visiting a website tend to be some of the highest bounties you see in the programs. >> it's really fascinating. we've got to get you back on the

program and walk through some of these hacks. this is incredible situation. scary stuff. pretty interesting. thanks so much. let's talk more about this offer. teva proposing to buyout mylan. this is a deal the street has a whole lot of skepticism about. this is $ 2 in cash and stock. mylan had come out on the rumor this deal might be offered. this is a hostile offer and said they are not interested in this. not only not interested in the sale doesn't expect a potential combination to clear regulatory hurdles. that's why you see mylan at $73.95. we'll have more in a moment. coming up is it teva? teva proposing to buy mylan for $82 a share in cash and stock. meg terrell will join us more. technically retiring, sir. with a little help from my state farm agent i plan to retire in 15 years.

wow! you're totally blindsiding me here. who's gonna manage your accounts? this is a devastating blow i was not prepared for. well, i'm gonna finish packing my things. 15 years will really sneak up on you. jennifer with do your exit interview and adam made you a cake. red velvet. oh, thank you. i made this. take charge of your retirement. talk to a state farm agent today. i care deeply about the gulf. i grew up in louisiana. i went to school here. i've been with bp ever since. today, i lead a team that sets our global safety standards. after the spill we made two commitments. to help the gulf recover and become a safer company. we've worked hard to honor both. bp has spent nearly 28 billion dollars so far to help the gulf economy and environment. and five years of research shows that the gulf is coming back faster than predicted. we've toughened safety standards too. including enhanced training... and 24/7 on shore monitoring of our wells drilling in the gulf.

and everyone has the power to stop a job at any time if they consider it unsafe. what happened here five years ago changed us. i'm proud of the progress we've made both in the gulf and inside bp.

- saving money is as simple as making small changes in your routine. if you make coffee at home instead of buying it every day you can save over $1,000 a year. trust me no coffee's that good. the more you know. teva making a hostile offer for mylan this morning. meg terrell has more. >> this is a bid expected for some time. teva coming out $82 per share in cash and stock for mylan. of course mylan already has

made its own bid for parabo. here would create a gigantic general earthic company. >> i imagine we'll hear more from you about this on the day. "squawk on the street" starts right now. good morning and welcome to "squawk on the street." carl is on assignment. jim has the day off. he will be back tomorrow. of course glad to have you joining us today. take a look at futures as we start off a half hour from the beginning of the trading session. on a busy news day. is there a look at what should be a highe