hanks for joining us. appreciate it. >> no problem. >> just the population in china plays onto the valuation. >> $500 million profit. >> china is a huge growth opportunity. join us tomorrow. "squawk on the street" coming up next. good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and dave faber. alibaba beating expectations naming its future leading. whole foods walter robb will join us. both stocks moving double digits in the premarket. in the meantime we are watching a global sell-off in bonds this morning. recovering somewhat but the

german bund got to nearly 80 basis points. oil relatively flat. the ten-year hit 2.30. the rising vix, some of these yields went bananas around 6:00 a.m. eastern. >> because of the percentages and how low they are in germany, you have a little change in germany, it's a dramatic rate increases. people are losing fortunes. now it's $2 trillion in two weeks. when people say why are some of our stocks down look at the pain. >> people believe negative rates would get more negative even though there certainly was this risk. >> yes. that was just dead wrong. we are seeing one of the things i think is just shocking to me is this dollar. the consensus was the dollar was in parity all these things you heard. dollar you better get to europe quickly. i'm booking that amalfi coast trip now we ought to hear about

alibaba. they turned the s&p futures. >> let's do that. alibaba shares are up in the premarket after the company's earnings did beat expectations. also the company announcing its current chief operating officer will become ceo in a few days from now. nixon joining us from hong kong is daniel zhang. we had a chance to catch up back in november during singles day, which was something you came up with any number of years ago, mr. zhang. let me start off on the quarter itself. specifically the mobile as your gross merchandise value, but the take rate therefore, overall, coming down for the company because people don't buy as many or read as many ads on their mobile device. is that the trend that we can expect from alibaba into the

future? >> no. we experience a solid mobile transition in the past year. you can see actually in the last quarter our mobile take away went down a little bit because of a slack season because of chinese new year. we recorded a quarter over quarter growth about 40% while now 50%, 51% of our revenue from mobile. we recorded 45% year over year gross. and today 40% of our revenue of our mobile only 12% of revenue from mobile. so we made substantial progress.

we think we will still continue it in the coming quarters. >> right. the transition to mobile will continue, i would assume. i guess the question is what do you see then as the ultimate take rate on the revenue on the gnv brought in given more and more of it will be coming from mobile? >> today more and more consumers in china use mobile for online shopping. we continue to increase and we are confident that we can approach that on pc and even higher. >> there was a belief heading into your quarter that alibaba is cracking down on counterfeiting on the site may

have depressed advertising and/or overall gmv. was that the case? >> we always have zero tolerance policy on counterfeit products and spend resources to fight counterfeit. counterfeit is an issue to those companies doing similar business. we have extensive experiments against counterfeiting and we will continue to do so because this is not only benefit for the customers, but benefit for this platform. >> daniel, there's been headlines this morning about a hiring freeze and comments about a would-be hiring freeze being taken out of context. what is the company's position on cost discipline when it comes to hiring folks? >> well i think the comment on

the pollhong kong policy in the new year is in the market. we will adopt a zero policy in the coming year. this is to improve opt rating efficiency like what we did three years ago. we did the same thing, we get a very productive results. >> it's jim cramer. when i look at what's going on in your country, i think that consumption domestically is very strong and getting stronger. we in this country think all that's happening in china is constant deceleration. where do you see it because you've got a book of businesses worldwide. >> from our platform we can observe that consumer demand is huge. today the new trend is that people like high quality foreign products from other countries.

so that's why we start our initiative one year ago. we will help the suppliers all over the world to sell their products through our platform to chinese consumers. >> daniel are you seeing more competition in your home market in china, particularly from jd.com? >> competition always exists. what we think is we have to focus on -- >> i coughed. i thought maybe my cough -- >> was that competition question. that threw everybody off. >> it is still a long way to hong kong. we are trying to re-establish the connection. >> the 40% gmv number was above what had been anticipated. the stock has been coming down sharply in recent weeks because

people thought it would be potentially weaker than it was. mobile now as daniel said 51%. daniel, we re-established connection with you. why don't you continue that answer. we lost you for a moment. when i asked you about competition. go ahead. >> okay. as i said competition always exists, but we don't -- we always think about competition. we think how to create value for our customers, for our merchants. if we continue providing value for the participants, we will continue our growth. >> what are you going to do differently as ceo than what was done by jonathan lu the person you will take over from? >> well first of all i have to say that jonathan did a great job in the past two years as

ceo. he lead the company a series of very successful mobile transition. now they hand it over to me and i will continue to lead the team the younger generation, to lead the company to the next journey. i think the focus will be first we have to continue to operate our equal system and extend our equal system. second we have to continue to pursuing the opportunity in new areas, in new businesses. last one, most important thing is we have to develop our people, our young generations. not only on the leadership level but also in all levels in the company. that's the foundation that we can continue our growth in the future. >> we've been joking it's a good day for folks born after 1970.

this is where they will command the troops. can you explain this dynamic, at least in china among, for leaders born after 1970 like yourself? no, you cannot. we just lost connection once again. that's what happens with satellites trying to work halfway across the world. >> end of the cultural rovell ugs. revolution. >> i think he was born 1972. >> jonathan lu is only 45. we are not talking about an old leadership team there to begin with. >> it's not the communist party causing it. is the communist party disrupting our transmission? >> i think we've got daniel back yet again. you heard carl's question. feel free to answer. >> alibaba has a commission we

want to live for 112 years. that is a long journey. we need young generation to take over the leadership and lead the company to the next part p of the journey. now is the right time for us to do this. we are in a good condition, good finance condition. that is the right time for us to upgrade. not only upgrade our business but also upgrade our business team on the leadership. >> daniel zhang, we appreciate you being with us. we apologize for the interruptions there in our transmission, but are glad to have had a chance to speak with you. daniel zhang incoming ceo of alibaba after the company reported better than expected numbers that had the stock up sharply this morning. >> this stock was pronounced dead by technicians and people were shorting it thinking it had to be a tell and things were

weaker. that was not the case. >> again, you're talking about down from 100 points. >> 40% overall year over year growth in gmv is significant. of course they do have china. growth there you asked the question about consumption and they are benefitting from that. the key consideration has been as you move more and more people to mobile your take rate of the overall number goes down because it's simply a more difficult to act on an ad. we know this from google. >> yes. you go back over to trip advisor reported last night. they are working very well on mobile. what's incredible to me you would judge this man, he's an operator. he is not trying to get the

stouk stock up. >> i had time with him over there in november. this has been in the works some time. his taking over as ceo. it's not sudden or based on this latest quarter or anything like that. this seems to be what jack ma likes to do. jack ma is chairman. i've got joe tsai as executive vice chairman and jonathan lu. this guy running the business. >> as jack says in his letter i believe within five years by 2019 alibaba will become the first company in the world to facilitate gmv over $1 trillion. five-year plans are all the rage in china. >> a thousand orders. boom. this is a remarkable company.

>> $80 coming in this morning. i'm getting a lot of different messages about turning the market around. those who follow this particular part of commerce are heartened. this social segment taking it on the chin no longer. i don't know whether fed chief yellen will be happy with this. >> it's unclear. shares of yahoo will be up. >> yes. >> what is that word when you back out, the new alibaba? minus. >> minus something. minus something. looks like negative interest rates. >> if you own yahoo, you get your statement and it says you're down you have 1,000 shares you're down $2,000? minus $ 2,000. she may get a break there. we've got more to get to this morning, including reaction from tesla. keurig green mountain.

whole foods co-ceo walter robb will join us. take another look at futures. we mentioned rising rates around the globe. claims came in around 2.65. four-week average is the lowest since november 2000. there's a difference when you trade with fidelity. one you won't find anywhere else. one-second trade execution. guaranteed. did you see it? in one second, he made a trade we looked for the best price and the trade went through. do the other guys guarantee that? didn't think so. open an account and find more of the expertise you need to be a better investor.

tesla shares falling despite better than expected quarterly results. the electric automaker ramping up spending on new products. last night on the conference call elon musk says response to his new battery storage systems has been overwhelming. >> we have 2,500 requests from companies that want to distribute it and install the power pack. we can't even respond to them. we have to triage our response to those who want to be a distributor. it's like crazy off the hook. >> crazy off the hook. all that said morgan stanley today says q-1 cash burn was eye-watering. >> musk makes the business

exciting. he is entertaining as all get-out. a lot of the conversation did go right to battery. if you go to the site talking about batteries being a worldwide phenomenon. it's an interesting thing that's going to come out. people are making this story into much more of a battery story. now, most of the commentary i read, people said why is the stock down if everything was better than expected. yes, everything was better than expected. it is because of the eye-watering cash firm it's $550 million. the morgan stanley guy has an overweight on it. when you read that analysts say the company needs to raise money. musk is saying by the fourth quarter they'll be fine. he is throwing cold water on it again. 400 basis point improvement margin. one of the funniest moments was when he said hope apple comes into this business we are not losing engineers to apple. we are taking engineers away from apple.

again, entertainment, but disquieting cash position says jpmorgan. $1 billion in outflow in the last two quarters is not necessarily what you get from ford motor. >> your take in general is who knows? cult status. did anything make you think there is more ground to stand on here? >> yes. because i think that what would happen is they did raise a lot of capital, it would answer a lot of the objections to the bears. there's two sorts of bears here. there are the bears who say his balance sheet can't sustain this and bears that say he is allege lid phony. i think the balance sheet issue will be controlling. they have demand for this car. there is demand. there is demand for this battery. people analyze the granularity, my friend going over the deposits. there are real issues here. if they were raise $1.5 billion in this market if they did german bond offering, you would be hard pressed.

they should issue a gigantic convertible bond. i know he is going to listen to me. >> always. he listens very closely to you. >> i saw him at the "vanity fair" party. he was talking to tony romo about the big trade. >>ing that's right. we'll get cramer's mad dash and count down to the opening bell in a moment. stay tuned for our live interview with the co-ceo of whole foods walter robb. one more look at the premarket trying to recover after a wild morning in fixed income all around the world. here at td ameritrade, they work hard. wow, that was random. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help

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are. time for cramer's mad dash. >> qorvo delivers a terrific quarter. this was the best semiconductor we have. they put it together and have gross margins going higher. they are intellectual power behind a lot of the cell phones, transmitters. what matters here qualcomm made you feel badly about cell phones. they should make you feel well. they are big sellers into china. you're not allowed to say if you are a supplier to china. you can't say wow, we are doing well. they emphasize china on the conference call. when you see the kind of business they are doing, you start questioning whether this was the peak and whether you aren't going to get another move

in nxpi semiconductor, sky work solutions and qorvo. >> selling into apple/china is the key. >> those are the two. those are the best markets. i felt good. this was a great conference call. typically you don't expect gross margins of this kind of product to go up. these two companies combined taking a lot of costs out. this had been the go-to name for a lot of people. obviously had a big run. seasonably, this is when you are supposed to sell these stocks. that was playing out. this morning the script does not go with the negative thesis. >> all right. so many other stocks to get to this morning. we've got the opening bell a live interview with whole foods co-ceo walter robb. stay with us.

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you are watching cnbc "squawk on the street." we'll get the opening bell in 90 seconds. busy morning as we are watching a sell-off in bonds all around the world. then whole foods, we'll talk to

co-ceo walter robb in a moment. down 13% along with sprouts and a bunch of others. >> there is a phrase just really i think just frightened people. comparable store sales averaged just 2.5%. that's up from 2.4 during the last nine weeks of q 2. that is freaking people out. second thing they announced a new concept. people said wait a second are things so bad you need to do a new concept now? when we speak with walter woo he'll get a better sense, is there an overreaction here? i think people felt they had gotten back on their game and now they are off the game and there is so much competition. >> comps in this space are maybe a little more volatile than other restaurant food type comps. >> we were used to this was neiman marcus nordstrom, they can charge what they want.

but kroger beat them costco ex-gasoline. so people are concerned this is a defensive slowing and a change because of the competition. >> we'll talk to walter robb in a moment. opening bell s&p at the top of your screen. global technology subscription council holding its investor conference here today. at the nasdaq adapt immune therapeutics celebrating its ipo which happened yesterday. i guess we'll keep our eye on alibaba up 10% plus premarket. >> some may be short covering. expectations were not high going into the quarter, at least in terms of this reporting. the stock had come down sharply, as you can see right there it is up over 10%. 40% 51% is from mobile. take rate from mobile not that bad. according to those who follow the company. though overall coming down as we pointed out, so generally a

positive report. don't forget we've got 1.5 billion shares coming from this company next fall on the lock-up. it's aways away. those are things to keep in mind when thinking about baba. transition to daniel zhang. that was not unexpected. >> yahoo the best performer on the s&p up 8%. that's been going down in lock step. we hear in aol later this week. yahoo is a have-not. >> we haven't talked about our broader market in the bond markets. that seems to be dictating what's going on to a certain extent. stocks coming off yellen's comments yesterday. german bund 0.75. it was 0.5 a couple of weeks ago. >> they came in with guns

blazing. people felt inflation is so low. if you are a fiduciary you have to buy bonds. why didn't they buy the stock? you are not allowed to. >> there is an internet of yellen talking to draghi who says no when you do qe stocks are supposed to go up. that's the general mood over there. you should yesterday everyone is entitled to their opinion, but shouldn't express their opinion when you are the fed. >> when she came out against biotech last july index was so incredibly low. she just 27.50 and went to 3,0 3,032. regeneron better than expected quarter. >> it's unclear she knew that was in the statement at the time. >> it was buy/sell like the piece we saw on netflix sell to

buy? i'm being fascetious. we remember in 1996 fed chairman alan greenspan said irration yale exuberance. the issue here for me is if she thinks stocks are overvalued raise the margin rates. you can do that. don't raise interest rates. we saw that 17 times between 2004 and 2008. where did that get us? be careful, madam chairman. >> big piece in "the washington post" whether this is our irrational exuberance market. when greenspan made that speaks market was down. they shouldn't be making these calls. the market is overvalued. warren buffett earlier this weekend gave you what you need to be talking about.

>> she shouldn't -- it's not as though whatever the motive is she is not going to stop bubbles. it's not going to remain in the equity market. i don't know what the point is. >> it would have been a great moment to say i defer to someone who has been one of the greatest investors of all time warren buffett. he sometimes talks about overvaluation but takes a longer term view. i'm afraid people at home will go onto their ira and 401(k) and say, i've got to sell everything. >> i don't think that will happen. i don't. >> it's certainly not helpful to the idea of how -- >> it may not be. right now you probable write have all these macrohedge fund managers doing a lot more having more influence on the movement of many different things. >> liesman did ask geithner whether he thought what was going through her mind? he said i can't speculate. >> perhaps she was worried about whole foods after the quarter.

organic retailer with plans to launch a brand-new idea. lower-priced grocery chain geared more toward millennials. joining us exclusively is whole foods co-ceo walter robb. how are you? >> good morning to you. >> people are concerned about two things. they are concerned there is a slowdown in comparable store sales after we thought there was an acceleration. they are concerned maybe you have lost faith in the core whole foods concept. neither necessarily seems to be true. that is what people are reacting to this morning with the stock. can you tell us why that may be misinformed? >> i would say the comps definitely we lost momentum in the winter jim. if you look at some of it was self-inflicted with our cannibalization in big markets. you see 10% growth 11% square footage growth. you see 11%, you see $1,000

square foot on the sales. you see 40 new stores coming this year with a lot of momentum there. i think what you see is a marketplace that's evolving. whole foods is evolving with it. we continue to think we have the right steps in place to grow the company with our price investments, our technology investments, our marketing investments, and we see an opportunity to grow this bigger market with the new, exciting format and brand. >> a lot of people feel somewhat defensive. i had irwin simon on for hain. he is talking about publix strikeouts coming in aggressively that whole foods must react and do something different. maybe this is a defensive action. >> it's not defensive action. we see the same market everybody else does. this is where the customer is and we are trying to serve the customer, the younger generation continues to look for new choices. you see lots of new formats coming into the markets. we love our whole foods market brand. we continue to invest in it and

will continue to grow it in a very aggressive manner we like its future. we think the marketplace has gotten much larger by launching this second exciting brand and concept, it gives us to another growth vehicle for us to take whole foods into the future. potentially, this opportunity could be as big as the whole foods market opportunity. >> i was thinking listening to the call that we should be judging the company by comparable store sales. i'm coming around to that. your profitability is a mix. if you did turn it off, as john spoke, you could be able to make money forever. are we looking at whole foods incorrectly through the wrong prism by judging the company by comparable store sales? >> it's one metric that makes a difference in terms of your progress in growth year over year. yes. look at the total growth. look at the sales per square foot. they are double the industry average. look at the balance sheet. look at the strength in the

violate of the new store openings in 40 a year. there's lots more metrics to judge this company by as opposed to just comp store sales. >> is this not an opportunity? that balance sheet, you can do both. it's clear you can grow the stores and buy back a lot more stock, and yes i should say three. add this concept. this is a case where you should put your money where your mouth is? >> absolutely. we have already a big authority, a place to be able to do that. i like your idea. look, the marketplace is changing. it's evolving. customers are asking for new things. the new generations are coming on. i think whole foods is saying we are going to evolve along with it. people, the market has tipped towards fresh healthy foods. this gives us a whole other opportunity to serve that growing marketplace and whole other growth vehicle for the company. >> i was reading it my store, i see a ton of millennials. are the millennials turned off? i thought whole foods has got a tremendous millennial appeal.

when i read the conference call i said maybe it's just my whole foods and millennials are going elsewhere. >> this is complementary and co-existing with whole foods. we think customers sometimes will want this new streamline experience and customers will want the complete whole foods experience. these things will complement each other. we'll be able to leverage the common structure. if you look at the market place today, there are new formats out there that have arrived that kind of serve that differently. i think this is an opportunity for us to stech our wings, to evolve a little bit as a company, to show what we can do as creative retailers and bring new options to customers that will complement and co-exist with what we are doing right now. >> it's carl. there were reports mcdonald's is testing kale in southern

california. i went to chipotle yesterday. still can't get carnitas panera has a no-no list. at what point does sourcing on a broad level become troublesome? >> it's competitive on share what's happening on the sell side is happening on the buy side. we are taking every step to have the supply we need for the next five years. that includes the kale. >> warren buffett this weekend says he does not see smiles at whole food. he is a chees-wiz guy that loves that cherry coke. are people not smiling at whole foods? >> warren is one of the greatest investors of all time. i think he was having a little bit of fun. we are definitely appreciate his

comments. they are fine. we are smiling over here. >> it's david faber. to come back to cannibalization as a strategy why is that a good one? >> you disrupt yourself or others disrupt you. i think our opportunities in chicago and florida in particular this last year, we have been opening a store every six weeks in chicago with the stores we picked up. there is no way to digest that without a short-term hit to comps. if you look at total growth happening as a result of that is phenomenal. in florida we've been opening a store every six weeks. we are digesting that on the short term with comps, but we are creating tremendous market growth. hence the total growth still in double digits for the company. the square footage growth still 11%. i think it makes sense where you have those sorts of opportunities to take those opportunities and grow the company. that's exactly what we've been doing. cannibalization, we identified on the call yesterday as having a 40 plus basis point impact on

these comp numbers. it was more sequentially this quarter than the last three or four quarters. i think it's a good business strategy when you have the opportunity to grow into it because our history shows us that within 12 months we pick that back up and go forward from there. i really do think that we put the investments in place that will help us to reaccelerate our growth. >> you teased us with this millennial story, talking about more excitement, more about technology. is there really something new under the sun? am i going to go geez i can't because i'm 60. if i were to reinvent myself and be young, would i go into this millennial store and be blown away by something? in the end you're selling food. >> in the end we are selling experience and the food. i don't want to overhype it. we've been working on this close to a year now and thought how to do something more modern more streamline. we have technology infused at it from the core. i think you'll be excited when you see what we reveal later

this summer. >> i sure hope so. you are a gent to come on. you answer all our questions honestly. walter robb co-chair of whole foods. great to see you. >> thank you very much fellows. >> great interview. dow flat. courtney reagan is on the floor. >> looks like stocks in the early going are mirroring what we saw with futures earlier in the session before the bell opened. we bounced all sorts of around. didn't move much on the jobless claims. we have the big jobs report tomorrow. yellen making those comments yesterday about valuations. that's really being felt around the world. if you see what happened in asian markets overnight, we saw the shanghai comp down nearly 3%. hang seng and nikkei down 1% among some of the other indices. in europe mostly lower. greece the one that is bucking the trend. hanging on, sticking to its guns in the labor and pension issues.

uk lowering with polls indicating we might be looking at the hung parliament. economic uncertainty in europe because of the weak data out of france and germany. the bund sharp move there. biggest spike in over a decade. we've got movers in oil, beer and retail. let's look at what's going on here in big oil. we are getting earnings reports from a number of movers. chesapeake continental resources and sandridge energy reporting quarterly results. transocean nearly doubling eps estimates. revenue beating two. interesting moves. a big hit from currency. also the revenue's down 14%, but results did beat expectations. that stock moving higher. if you look at the whole retail sector, what analysts had said

with that strong march with that earlier easter likely going to steal from april sales. that does look to be what we saw today. particularly what costco and l brands are reporting their flat april comps. kate spade earnings pretty good. ann, potential buyout talks buy golden gate capital. we'll see if that comes through there. we have to watch retail. back to you guys over post nine. >> thank you very much. courtney reagan down at the floor. breaking news on the nsa. we'll go to eamon javers in washington. the federal appeals court ruled the nsa broad data collection on information about millions of americans phone calls is not authorized by section 215 of the patriot act. making it illegal. saying that section 215 of the patriot act simply doesn't authorize the program and the broad scope which the nsa applied it. this does not necessarily mean however, that the nsa is going

to have to stop this program. this is a program that was due to expire. the legislative language, that is, next month. congress has been wrestling whether to re-authorize section 215. the fate of the meta data gathering program has been a big debate in washington for years. now very focused right now on whether or not this language will be authorized. the court saying the nsa does not have to stop gathering the data but congress ultimately will decide the fate of this program. >> thank you so much. >> get to the bond pits. check in with rick santelli at the cme in chicago. what a morning. >> obviously, around 4:15 eastern in the morning last night, the world's economies and all the developed countries must have surged because rates surged. look at 5s, 10s and bunds intraday. the timing of peak yields was within five minutes of each other. when you have the same policy around the globe and we pretty much gave it to the world,

whether it's baenomics, why should it be any surprise all the moves look exactly the same. it wasn't anything fundamental changed. it's because of logistics. we talked about it. these compress ranges. let's look at april 1st. for all the following 10-year maturities. ours bunds, italian, spain, yes, even japan. same move same moves, same moves. i'm not sure how this is all going to end. what i can tell you, we haven't done much since we've been open in our time zone. they went wild before we came to our time zone. there is a liquidity issue here. the market's aware of it. some of these moves will probably have more frequency. carl back to you. >> we'll come back to you later on. when we come back exclusive with the priceline ceo live from ames dan. the travel website with a profit miss in spite of better

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one day left to nail the number. tweet us your predictions for april nonfarm payrolls. in celebration of our new san francisco bureau the prize is a one market mug ought dprafed by the "squawk on the street" gang. you'll have until one minute before the jobs number tomorrow to tweet us your predictions. best of luck. claims, jim? up only 3,000. that's still near a 15-year low. >> claims in the semiconductors are proving to be the leaders. tech has been so horrendous. it can lead us. the fact is oil's been thrown back from the $62 level. i think that's really heartening a lot of people. if you have a weaker dollar oil not going higher. interest rates settling. you get the retaylorilyloril stocks

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priceline a little bit overreaction. one people like is trip advisor. i like everything i heard on the call. it's an easy one to like. it's being brought down by priceline. that is wrong to do that. green mountain coffee. i've been saying buy this one from coca-cola. i reiterate that. this was one of the worst calls ever. it was like, by their own admission, there was nothing on the call other than listen we got it wrong again with 2.0 keurig. they were self-afacing. there was a little rebellion on the call where an analyst said you said things were good in january, you were wrong. you said things are good again, you were wrong. why believe you this time? the answer was like crickets. >> the only s&pers that have done worse are chesapeake, ralph lauren and sandisk. that's not good company.

>> that's like a two, four seven, nine and a jack. what do we do there? keep the jack and nine? >> what does coke do? >> i think coke can buy them. now, look, that's not a reason to buy them. they like the new kold product -- they spell it wrong -- i'm saying buy coca-cola if you like green mountain because they can buy the rest without a problem. they are waiting for the kold drink machine. i'll go to bed bath and beyond and buy it. but i'll buy coca-cola. there is a trade back into now that gasoline and oil thrown back, let's go to sonic. i wish i had those two guys. i love those two guys. i like cliff hudson. >> i don't like those two guys. >> there is no accounting for taste. >> really? >> then there taft from fiesta group.

>> okay grandpa. >> the millennial store? i don't have a badge. i need a stinking badge. >> they need to i.d. you. >> it's like abercrombie. i can't go in there. >> see you tonight, jim. thanks. profits and the business of summer travel. the ceo of priceline, an exclusive interview. >> plus stephen dubner the author of "freakonomics."

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. "squawk on the street." i'm carl quintanilla with sara eisen, simon hobbs and david faber. >> we'll have more on the tesla results and what elon musk said on the conference call.

>> athena health out with a new app on the apple watch. the ceo will join us live. >> chicago fed president charlie evans says any interest rate hike should be pushed to next year. more from that interview later. >> in just a few moments, the ceo of the priceline group darren huston will join us live. the company beating expectations. giving a soft outlook for the current quarter. stock in the red. that's coming up in five minutes. >> we start with the markets here. dow down about 36 points after u.s. jobless claims we learned rose modestly to 265,000. still hovering around 15-year lose. let's bring in chief investment strategist at raymond james. how did this set up for tomorrow's jobs report? >> i think it's a lot of noise. i think we are in the longest contiguous job configuration. the good thing about mr. market as warren buffett said if you don't like his mood today, he

will show up tomorrow with another better offer and you don't have to play with him every day. >> in other words, take a longer term view. >> i am exercising patience. >> we do talk about the day-to-day moves here. it has been a brutal week for the bulls. are we in a situation where tomorrow a good jobs report is good news for the markets because of the strength of the economy or bad news for the markets because it's all about fed policy or what? >> i think it will be good news. janet yellen is a gradualist. i don't think she will pull what the fed did in 2004 to 2007 where they raise the fed funds rate from 1% to 5.25%. i think she raises by 0.25% in november and steps back two or three months and sees the reaction in the economy and markets. i'm not afraid of a rate ratchet here. >> yield on the 10-year german bund year is at its highest level in five months. it's been volatile for bonds around the world. should we are worried about that here in the united states?

>> i don't think so. bill gross has got that one right. the trade of the century is to short german ten year bund. >> you agree? >> i agree. >> you're the second person in recent sessions who has spoke, i think what you are saying is equities are a long-term investment. you kind of bypassing the fluctuations and concerns we have for the next how long? >> ron barren told me there aren't many of us left. i said what do you mean? he said that have seen a secular bull market like '82 to 2000. secular bull markets tend to last 14 or 15 years. we are six years into this one. if past is prelude, we have another eight or nine years. this he compound it roughly 16% per year. if you extrapolate that out to 2023, 2024 you're talking about more. >> we had this huge surge built up on qe. that makes people nervous. we are at the records. >> a lot of people think you are in the late stage of a business

cycle. i would argue that because the financial fiasco was so bad you are going to get an elongated mid cycle and have another two, three years in mid cycle recovery here. the slowness of the recovery extends the mid cycle. i think the stock market even if we get a 10% pullback it's i noise. it's within the construct of the secular bull market. >> tim geithner former treasury secretary was on "squawk box" earlier and asked about the u.s. economy. interesting answer especially relative to the rest of the world. have a listen. >> i think the american economy, if you look beneath the surface is a much more resilient economy now. it's doing really relatively well. in many ways the stronger economy than it was before the crisis. again, compared to any of the major economies around the world today, the u.s. is doing better. again, i think our performance in many ways is the envy of many countries. >> so does that make u.s. stocks

a better bet than other world markets? because that hasn't been the case so far this year. >> i agree with that. underlying economy is stronger than the surface figures suggest. i think we saw the worst of the economic figures over the past quarter. >> so what kind of rate rise can we tolerate at this point? what's the ceiling on the ten-year for you? when do we start to get a real tantrum? >> i think it's a long way away. i think janet yellen is a gradualist. we are a long way from rates normalizing. >> you see year end 10-year 2.5%? >> maybe. >> nowhere near 3%? >> what do you think when you hear her say stocks are overvalued. >> i think she is an economist and not a strategist. judge, she is not paid to -- >> she is economist not strategist. valuations are not all that high except for the cyclically adjustedadjust

adjusted b.e. >> with these evaluations, if you think we are in a long period of a bull market are you taking this advantage at least the sell-off to buy more? what looks cheap to you in terms of industries? >> i told people raise cash at year end. if you had stocks in your portfolio that have not participated in the straight-up move we had since june 2012 there is probably something wrong with those companies to raise cash. our models and indicators suggested the first three or four months of the new year we are going to be sketchy and much more volatile. you need cash to take advantage. >> this year or next year? >> this year. right. >> you still like energy? i think you called the bottom in oil. >> i did i called it right her on this desk with joe kernan. >> so far. >> yeah between january and march. we said crude oil is in a bottoming phase. that's when everybody was calling for $20 and $30 a barrel oil. i think it's overextended on a short-term basis. we are due for a pullback. >> do you think it's trading at fundamentals because so many investors have gone in and

controlled so much of the market, shorter-term investors? >> i think the hedge funds have been wound up in the trade. longer term, you've seen the bottom. i don't think we are going back to $42 or $43 a barrel. >> good to get your thoughts. check in with you as always. >> my pleasure. one of the top losers this morning is priceline. the travel behemoth solidly beating expectations has a 26% booth in growth bookings. currency effects are 90% of priceline's business outside this country. the ceo is guiding down market expectations yet again. joining us live from amsterdam in a cnbc exclusive is darren huston, president and ceo of the priceline group. welcome back to the program. people know that you are a conservative when it comes to guiding down. there seems to be more than that in what you're saying now. what is the current state of the

business? >> yes, simon, we are actually quite happy where the business is. we actually accelerated our growth in q-1. the business is healthy grebly. it's a great travel environment right now. we are investing. that is one area we are investing in things we really believe in that are going to drive the long-term growth of the company. also as you mentioned, we are heavily impacted by currencies. most of our money is made overseas. this isn't a real effect it's a translation effect when you transit rubles into dollars. the fundamental health of the business is strong. >> what about the shift to mobile? notably you like other players in the space have come through with new apps for the apple watch. what do your apps do that the others don't? >> all our brands are on the apple watch. we have one specifically our

booking now app on the apple watch. you can literally book a hotel from your watch, which is a first in travel. it's exciting for us. obviously the apple watch is just getting going. we don't know if this is a big volume play. it feels good to have the capacity and talent to innovate against a brand-new platform. we are excited about it. let's see where it goes. >> people who work in the lodging industry in this country and europe and asia who are watching you live know one of the benchmark pieces of the operation is the fact you have parity agreements with the hotels you service. in other words, they are not allowed to offer their stock at prices below what you advertise anywhere on the web. importantly, you just conceded to the anti-trust authorities in europe that you are going to change that. can you explain what you are going to do now that you didn't do before? and to the people that are watching new this country and asia, will you be loosening their contracts, too?

>> parity has been around the travel industry for years. it would be like if you had to go buy a delta airline ticket on somebody else and it was $10 more would you buy the airline ticket on that site? we have parity in place to make sure that our consumers don't have to pay more. it's not holding the hotels back it's been the way travel's been done for a long time. i'm proud of the new agreement we have in europe. it's protecting the parity on our site with the hotel site. we are going to continue forward like that. at the end of the day, whether we have parity don't have parity, we can't let our customers pay more. that's just a fundamental principle in the business. this agreement doesn't change that at all. >> however, they will be able to offer those prices lower to other parties. the consumer can get them lower on hotels tonight presumably or restrict the amount of rooms you can sell. this is a big deal for people who do this for a living

darren. >> given the volumes we do we can ask for lower prices than our competitors. this is great news for consumers. we are going to lean in to make sure our customers get the best pricing. that is not going to change. our volumes and the nature of our relationship we are a low commission model. that allows us to ask our hotels for great pricing all the time. that's what that's why our business has grown so well. we really have super competitive pricing, broad selections simple experience and at the end of the day i think that's what the customer wants. >> last week we were talking to your rival at expedia. we were talking about how both of you make this huge effort, hundreds of thousands of people knocking door-to-door to sign up hotels exclusively to your sites in asia. i think for you italy is really important. now you are changing that. you are going to offer, basically a free management system to small hotels.

as a result of the boutique purchase. you and i discussed that before. where does that go down the line? do you at some point say, don't become a western, don't become a windham, don't become a choice brand. why don't you have the priceline brand? are you transforming what you offer to be a lodging brand? >> certainly not. brands play a critical role in any business and in the hotel business, that's different. the great brands of the hotel business really communicate a value proposition to the guest. all we are trying to do is to in particular help the smaller hotels have the pensions the b&bs and bigger hotels to operate in an internet-based environment and much more cost efficient way. that's the play here. we are able to build websites literally for free for our partners. we can modernize them and translate them into different languages and allow them to sell their product all over the world. we can do that because of the size and scale of our platform

and trust our partners have in us. we are certainly not planning to be a book.com branded property, priceline branded, kayak branded. this is offering technology and allowing our partners particularly ones with an amazing product, to communicate that to the world with a very cost-efficient solution. >> darren, i know you've got to catch a flight out of amsterdam. we'll let you go. thank you for joining us. darren huston for priceline. after the wells report on the new england patriots we heard from quarterback tom brady's father and now his agent. >> good morning. this is from tom brady's agent who says "the wells report with all due respect, is a significant and terrible disappointment. its omission of key facts and lines of inquiries suggest the investigators reached a conclusion first and then determined so-called facts later on. the statement is lengthy, but it

goes on to say something to the extent this report contains significant and tragic flaws and is common knowledge in the legal industry that reports like this generally are written for the benefit of the purchaser. tom brady's agent coming out with a disappointing statement with regard to the report on deflategate. we'll bring you more details. right now tom brady's agent is on the record with their response to the wells report. >> i like the "new yorker" humor article which says brady has been sentenced to spend a year with the new york jets. that is a different story. >> no comment. lumber liquidators halting sales of its chinese flooring after dozens of lawsuits have been filed over the safety of the product. stock making its way to positive territory. scott cohn in san jose with more. >> this is a sharp turn for lummer liquidators. a few weeks ago the company was saying its allegedly

formaldehyde flooring was safe and was talking about suing "60 minutes" for its report now it is hired a former director of the fbi louis freeh to review the sourcing and compliance. sales plunged down 18% in march alone, while legal and regulatory pressures rise. 100 plus civil lawsuits and last week the company disclosed the justice department is pursuing criminal charges over the company's foreign sources. with that the company seems to be pivoting toward potentially laying the blame on those chinese suppliers, even though that "60 minutes" report alleged the company knew exactly what it was getting. the product was labeled as safe the company says it is fortunater reviewing the underlying certification and labeling products of its suppliers. because of that and what the company calls mounting industry concerns about the chinese

laminate, it is suspending sales effective today. the company does say those free indoor air testing kits it distributed to concerned customers have come back overwhelmingly negative. 97% showing no issues with formaldehyde. of course, that testing program has come under question with one lawsuit calling it a sham. another question how much is all of this going to cost? the company already set aside $10 million for the justice department investigations. profit margins are shrinking. it has roughly $20 million worth of this chinese flooring in inventory as of the end of last quarter. it's going to have to replace that with sources from perhaps north america and europe. that's going to cost more. the company not saying today how much all of this is going to cost. carl? >> scott cohn in san jose, thanks so much. when we come back tesla making more than 1,000 cars per week. seeing a big boost in sales. investors not convinced.

stock is down about 1%. more on those results and what elon musk said on the conference call. dow up two. dax making its way into positive territory. that is a 2% intraday swing.

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here are issues people are focusing on today in the wake of the 2015 first quarter earnings coming from tesla yesterday. first of all, for 2015 sales targets. can they hit those as they look forward for the remainder of this year? remember, they are targeting 55,000 in sales. then there is the ramp up of the model x. yesterday mr. musk said they expect deliveries to start in the late third quarter as far as the model x. finally cash burn situation. right now tesla is sitting on about 1.5 billion, but it's down 21%. this morning barclays out with a note saying we wonder how long in the face of weak auto results investors will continue to see $190 of value in the automotive business. right now shares of tesla trading above $190 but year-to-date, this stock has really not done a whole lot. one of the more interesting aspects of yesterday's call was a question about how elon musk feels about apple potentially

getting into the auto manufacturing business. here is what he had to say. >> i certainly hope apple gets into the car business. that would be great. we are not really seeing significant attrition of engineers to apple. apple for anything car or otherwise. >> reporter: take a look at apple versus tesla over the last year. no comparison at all. apple has easily outperformed tesla. the cash burn situation is getting a lot of attention today from analysts on wall street. one analyst saying look do they only have enough cash to go through the next three quarters before they have to go back to the capital markets are come up with other way of infusing more capital into the company? that is going to be a focus near term as people look at what's going on with tesla. certainly, the battery storage situation and that business being developed got a lot of attention yesterday, as well. >> something we were talking about this morning with jim, too. phil lebeau, thank you. shares of alibaba are gyming after a strong earnings report.

we spoke with incoming ceo daniel zhang about transition to mobile platforms and the importance that is playing in china. >> today more and more consumers in china use mobile to do online shopping. on the other hand, more and more merchants start to spend more dollar on the mobile side. based on this we believe mobile side will continue to increase. and we are confident that we can approach that on pc and even higher. >> mobile now represents about 51% of the total gross merchandise value on the site. the take rate does come down as a result people aren't quite as motivated to shop on their phones given the smaller screen. is is still an important component of the growth of the company overall. stock down from the highs this

morning. it was heavily shorted coming into the quarter. though they did beat. >> a little bit of a short squeeze. >> slightly disconcerting jack ma is championing the fact only people born after the 1970s will be leading the troops. >> i agree. that is slightly disconcerting. >> we think it's just fine. >> we don't. >> what's the problem, guys? bitter old men over there. >> they want to be in business 102 years to hit three centuries. that's how you have to do it. >> people born after the 1970s. when we come back it's been ten years since the release of the best-selling book "freakonomics." the authors are out with a new book taking on water, conservation and bank robbery and how much pepsi would pay for coke's secret formula. and now "when to rob a bank." join us live to talk about all of it.

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>>. >> it's been ten years since the release of the best-selling book "freakonomics." now the authors are back with their newest book "when to rob a bank." stephen dubner joins us. we are all huge fans. you changed the way americans

think about complex topix. >> i won't say that but i appreciate you saying that. we find a way to get beneath the surface and use data which you all do every day. the other thing we bring to it, we try to understand incentives at play in a complex circumstance, whether it's real estate parenting or education, whatever. it's easy to get caught up in the mechanics of who is doing what wrong or right. you need to measure cause and effect. you need to know what works. you need to measure who has incentive to behave in what way and try to design better incentives. >> we write about politics which i hate. i hate it because it's very important. there are things in life that are mundane but meaningful. nutrition, sleep, different maintenance that nobody pays attention to. politics is meaningful and not mundane. there is a lot of drama.

incentives are perversely aligned. most politicians have short-term self-interested incentives. we who send them to do stuff, we have projects we want them to do that are long term. i would love to try something radically different. maybe pay politicians a lot more. singapore has done that. you let appointed officials get vested in their project. stock options for politicians. say the secretary of education arne duncan could raise u.s. test scores 10 percentage points over 10 years, let's write him and his team of 100 people set up measurable deliverables and measure them. ten years we write them a check with $5 million. that's the way the world works. rather than people with short-term, self-interested incentives are going to perform in our best interest because they don't. >> how much hate mail do you get? >> on that one -- i talked that through with a bunch of politicians, including john

mccain who was looking at me saying, steve, that is so interesting. shakes me head and smiles and says good luck to hell with that. there is no way something like that could happen. the politicians aren't going to overtly hate that. people hate when we attack sacred cows, environmental stuff and such. >> one of the ones i liked, before i maybe just was in atlanta at coke headquarters you talk about the mysterious coke recipe and what pepsi would do with it. it's counterintuitive. >> turns out that coke employees were trying to sell the secret formula to pepsi. you would think pepsi would say, hey, bring it on. as it turns out, they have a pretty nice little duopoly going there. if pepsi got the formula and wanted to make coke maybe they

have and thought about it. the fact is what distinguishes them is what creates the value in the two. you don't necessarily want to diminish that duopoly. >> the vast majority we don't understand. >> the thing i try to do now, which we've written about in the past is think like a child. as you grow up we get conditioned and get rewarded for sounding smart and having complex thoughts, which are often not all that productive. one thing children do is walk around asking ridiculous-sounding questions. many of which are truly ridiculous. that's what we try to do is ask questions that are often overlooked where there is an arbitrage possibility. we will look at something all the smart people decided is beneath them. that creates opportunities for people like us.

>> do you still hear from economists who think you've taken this sacred science and turned it into pop culture or candy, commercialized economic thought? >> absolutely. one is they don't like demystifying the gild. on the other hand if you are an economist who teaches at a university, you have your teaching ability. demand comes from students who want to study economics. "freakonomics" inflated the population of people who want to study economics. you might not like the popification, but you know demand has risen your services and your services value increased. >> when should you rob a bank? >> never. if you are going to be a criminal, bank robbery is a terrible crime. embezzlement is better. if you have to rob a bank the take is much greater in the

mornings than this the afternoons. however, most bank robbers work in the afternoons, which indicates they are not profit maximumizers maximum maximizer or too lazy to get up in the morning. >> i can't wait to read it. great to see you. >> thanks for having me. breaking news now. on nat gas. >> good morning. we got our weekly status report on nat gas for inventories last week. a build of 76 billion cubic feet. this is right in line with expectations. just about in line with the five-year average. prices turning negative on the report but by a little bit $2.76. nass gas has been slowly rising. the resistance point we've gotten close to a couple of times 2.82. that's the point to watch to breakthrough. we do have evidence from ben tech energy that demand has definitely been picking up as

the spring and summer season gets into gear. so nat gas could probably go higher from here. what traders are telling me is how low can it go? there's going to be pint around 2.50, 2.30 where it probably doesn't go much lower than that if stocks are in good shape. keep in mind total stocks about 4% lower than the five-year average, as well. pretty inch good shape. back to you. thank you very much. straight ahead in advance of tomorrow's payrolls data chicago fed president charlie evans will explain why he thinks rates hikes should wait till next year. athena health ceo jonathan bush. yes, he is a cousin. will join us live.

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the medications will be advisory with the company making the final decision. residents in oklahoma city waking up to major damage caused by tornados overnight. an rv park in the city totally destroyed and a roof blown off a local motel. luckily though no fatalities have been reported. las vegas sports books are taking down the odds for the new england patriots season-opening game on speculation that quarterback tom brady could be suspended for his role in the team's use of underinflated footballs. new england was a 6 1/2 point favorite over the pittsburgh steelers. we'll see what happens. that's our nbc news update. back to you. controversial comments from fed chair janet yellen on market valuations getting support now from one of her colleagues. senior economics reporter steve liesman joins us from new york with the highlights of his exclusive interview with the chicago fed president charles evans.

simon, thank you very much. if you were among those who was disappointed or thought it was inappropriate for fed chair janet yellen to say that stock valuations were high the message from charlie evans chicago fed president in an exclusive interview this morning on "squawk box" was, get used to it. evans said in the post recession, post financial crisis world, that is exactly the role of the federal reserve. >> it's incumbent upon us to talk about financial stability, financial instability risks we might face. in that context, it's quite natural that policy makers and the chair of the federal reserve is going to make some comments about leverage, how that's working its way through the economy. if she said that financial stability risks are moderate on the basis of everything we looked at and i think that is the larger take away. everybody ought to get used to us talking about financial stability issues. >> evans pointed out that other

legislation since the financial crisis the fed has been charged more with moderating financial stability. on the economy, evans saying he is expecting a bounceback from growth from the weak first quarter. he said those effects were transitory. he said he wants to see 3% 2.5% to 3% growth in the second quarter and for the rest of the year. however, he says optimal monetary policy calls for a rate hike in 2016. says the fed should be in no hurry to raise rates and it's natural for fed policy makers to make those kind of comments on the financial markets. back to you. >> thank you very much steve. athena health is forging deeper into the enterprise space after the electronic health company missed earnings first quarter earnings estimates. with the recent release of the text app for the apple watch will we see a rise in digital health solutions? joining us is jonathan bush athena health chairman and ceo.

doctor ads are with disappointing. >> beat the hell out of guidance actually and what the street had. the stock went down. i love wall street. you beat everything and your stock goes down. you miss everything and the stock goes up. it's like trying to follow a caterpillar. which part of the body are you looking at to decide how fast the caterpillar is going? >> this year has been a brutal slide for the stock. what are investors missing? >> what do they know that we don't know? i don't know. the company is doing what it's supposed to do. we have four things we do. we've been doing it 15 years. we connect doctors to patients. most patients don't connect to their doctors online. our clients get to connect to their patients online. we connect doctors to each other. most doctors are isolated even when on an emr they can't see the hospital. doctor to payment for results. most are doing this billing nonsense in the back. i've seen the ladies and paper. what is new and exciting we are starting to connect doctors to new innovations. there are mobile apps and new cool tools as we get health information online people can use in health care.

>> one of the big questions on this stock that has been brought up are you adding customers fast enough, especially in hospitals. >> yeah. as -- when obama was elected, everyone got scared and the doctor world sold out to hospitals. a huge part of our addressable market went from lots of independent practices, which we still add 30% more docs in that segment every year like clock work. then the other half of the market are in these huge enterprises. you go huge long periods of time with wine and cheese and who's in charge advisory consultant. then finally boom. the board approves and a multithousand doctor deal hits. in q-1, trinity we thought it might have been q-4, but that's the way it works. it got done. now we are rolling with a huge implementation that will cover up a dry patch of enterprise implementation. that enterprise segment is bigger than ever and take a long time to sell and implement. >> it's been just over a year

since david einhorn launched this attack. i'm interested how you engaged with him over the past year. clearly, there is still huge short interest in the stock. >> at first i did learn who he was when everybody started texting me and said einhorn doesn't like you? i thought he did the scarsdale diet honestly. totally confused. i learned his story. i appreciated the chance to talk about the market. >> have you met him? >> no. he was able to give me a phone call after his first sort of short show which was almost a wall street meets mean girl. videos of me. >> in fairness you were comparing your company to amazon. >> yes, the business model is very similar. we are much much smaller. more profitable in many ways.

but very similar business models. the software is the story to go into to get the results. most doctors pay for their software and get their own results. our doctors get the software free and pay us for the results. that's the similarity in the business model. it's a much better model for cash-strapped hospitals and medical groups that can't afford multimillion dollar kind of epic scale acquisitions and implementations. that it's similarity in the business model. it is similar. we are not anywhere near amazon. we are under $1 billion in revenue, right? we are a tiny oompa-loompa bouncing around. we are the biggest in health care. we are five times the size of kaiser permanente. the research we can do. the connecting we can do. in a world of midgets, we are a really tall midget.

>> isn't the problem that everybody is being drawn to it? there is new entrants and competitive pressures are getting more acute and margin compressions? >> i wish. i wish. there are new entrants. they are using a well-known clinic in pennsylvania is starting a national mobile app service brand called xg. they built an app that connects into emr, electronic medical records and surfaces data just for rheumatologists. now you are online and co-treating with hundreds of other, thousands of other rheumatologists across the country. that's what health care needs that. will be complementary to athena. we started an incubator on three of our five campuses called more disruption please. we capitalize them house them and invite them to build products that sometimes compete

with ours to get the juices flowing. we have to get those blimps out of the sky. >> are you a cousin of jeb bush? >> no. he is a cousin of mine. >> if jeb bush and i'm assuming you communicate well in the family, if he were to win in 2016 would that benefit the company? do you think he might understand it? >> i love all my political relatives, because the bushes aren't kennedys, we have to tap out of any material opportunity, excuse ourselves. with health care being half governmental at this point, it's annoying. it doesn't mean i don't want him to be president. i'll suck him up and have someone else go to washington for me. >> we want to ask about the apple watch. how should investors think about that? will that drive new business for you? >> within our space the issue is always that cool things happen way outside third party reimbursed health care. fit bits started with people who have no need for the health care system. lit bile little as they get saturated in the market you get

the sort of slightly overweight folks beginning to be diabetics on fit bits. now the doctor can take a feed. apple watch is the same thing. it's a new cool way of getting instrumentation out into patients. as more people get it some of those people will be sick and we will be able to use the apple watch to do cool things with our docs. >> it will help people. >> if it goes and sticks. emperor coming new clothes on. everybody clap or he's naked. >> jonathan bush always good to see you. at least you're not a mother fracker or father fracker. >> no. i ducked that bullet. when we come back nobel laureate robert shiller will join us live to talk about tomorrow's job numbers and when or if a rate hike happens again. more "squawk on the street." can it make a dentist appointment when my teeth are ready? ♪ ♪ can it track my crew's performance, and protect their heads?

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the dow has turned positive along with the suspect s&p, the tech sector trading higher today, dom chu back at hq with more. >> tech is competing with two utilities there to get the crown. leading the way is yahoo. leading the pack higher. the stock up 5% to 6% on the heels of alibaba's better-than-expected quarterly results. shares are up almost 30% over the course of the past year. as we look at the tech sector it's not a bold move higher but still some bulls will like the little bit of a respite here from the three-day decline in stocks. >> let's get to chicago and check in with rick santelli for a special edition of the

santelli exchange. >> before i welcome my guests the one and only profess oror robert shiller from yale and case shiller. i want to play a little sound byte from janet yellen from yesterday, run the tape. >> i guess i would highlight that equity market valuations generally at this point are quite high. they're not so high when you compare the returns on equities to the returns on safe assets like bonds. which are also very low. but there are potential dangers there. >> well professor, i reread allen greenspan's rational exuberance speech given in december of '96. and when he talked about irrational exuberance he laid it out in a methodical way as to what his concerns and what he could do in addressing bubbles. this was a rather flippant remark during q&a. will you weigh in on this sir? >> well that speech i, i was

there, i spoke with greenspan around that time. think it was kind of an isolated event. he normally didn't talk about such things. he got such a market reaction, he crashed the stock markets of the world. that's a bit of an overstatement. he didn't bring it up again very much. i think -- >> no and it seems the norm that they don't like to. >> they normally don't like to. heads of the central bank. >> right. because it's it disturbs the tranquility. but it's part of their job to disturb the tranquility. and i praised janet yellen for doing that. >> well you know what that's your prerogative on this trading floor, here's what they're talking about. the cme and all futures exchange and many other exchange monitor volatility and movement and range in the marketplace on an hourly if not minute basis, daily for sure and if they need to adjust it they adjust it through margins. that is one of the things the fed can do. do you have any issue with bringing up what may be a problem that they created due to

quantitative easing and seeding the clouds for thunderstorms of liquidity. and not even bringing up that they have an ability to address this? >> yeah. but they have an ability to address it. but there's so many other ramifications. i think they did the right thing with quantitative easing. nobody knows for sure because it's a new experiment. but and yeah the boom in the housing market and the stock market, are partly the fed's doing. but on the other hand we were coming close to a depression and they had to do something. >> you know that's a counterfactual. if you want to take thatted roo, i'll take that road. to address everything that you say we were safe from things like dodd frank, many policies that now we see are draining productivity. so lower productivity we hire more people but we don't have any more growth. and when you add in a demographics of participation rate, it seems like there's a lot of issues post that savings that we need to address with longer-term consequences.

>> right. well i hope dodd frank doesn't hurt the fundamental role of finance in making things happen. that's, i have a book. "finance and the good society." i'm for it i'm for having strong financial institutions. but they have to finance innovation. it can't be stick in the mud old stuff. that's -- i think this country is doing pretty well actually. if you look on the world scale. at innovating and eventually productivity will start growing well again. >> well it seems like productivity is, you know when i walk into banks, they tell me how many compliance officers are doing jobs. that isn't aiding product icht. when i look at all the red tape. including taxation that isn't helping productivity? why do you think they're going to disappear and underwhelm and growth is going to overwhelm? >> well part of productivity growth is a public sense of fair

and equity annal dealings andhe canequityable dealings and that i have a good idea, i believe i can make it happen and i won't be destroyed by something crazy like another financial crisis. >> well it seems like they're getting more regular, central banks get more bold. your final comments sir? >> my final comment? i think janet yellen did the right thing, markets are overpriced. on the other hand, she was also right not to be alarmist about it. i didn't see there was any huge crash after her speech the way there was after greenspan's speech. they're doing good for the financial economy. and i think janet yellen -- she gave a talk called finance in society that really laid out that she's a believer in the fundamental role of the financial community to allocate resources. and to promote productivity

growth. >> well if they want to allocate resources, she should give governor brown a phone call and tell him. the best way to allocate resources is through price. one day left for to you nail the number. tweet us your predictions for the nonfarm payrolls as always the handle,@squawkstreet. the prize is a one market mug autographed by all of us here at the "squawk on the street" gang. i'm going to sign it because i know you signed it yesterday. here you go simon. >> the estimate for jobs is 230,000 to be created after a very disappointing read last month around at 126. >> we did see ubs and jp morgan sticking by their forecasts. >> after the weakness in adp. >> we'll see. "squawk alley" is next.

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