it, they come and pick it up. i've been sleeping on it since a year and a half ago. it will be one of these unicorns in the next year or so without question. >> ben berer thank you for coming on. >> thank you. 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. dave faber is at the dish summit in phoenix. we'll talk to him in a minute. >> the dollar is cooling off. wholesale prices come in soft. oil hovering around 60 and 10 year at 2.25%.

cisco beat expectations. john chambers did talk to cramer last night. jc penney narrowing losses but the news not great for kohl's. shake shack beating expectations with a nice profit. cisco revenue coming in at $12.1 billion 5% year offer year. here is what john chambers told jim last night on "mad money." >> our company is the most excessive position ever. we moved from selling boxes to outcomes. you're digitizing every company every country. you change or disrupt or get left behind. cisco is the lead player. you saw that in our quarter and balance and the public sector business was up 6% to 7%. so was our commercial and enterprise. you'll see sus change that.

>> routers up 6, switchers up 4. >> he came out swinging a way i've never seen him including an analyst who doubted the term. he shot down competitors saying there is disarray in the industry. this guy is disrupting the disruptors. he says hp alcatel, lucent, all which were considered to be competitive have been left behind. robins is getting a good hand. chambers is going out on a high. >> someone downgraded it today. all i can think is are you kidding me? >> stern takes it to fair value. chambers long said -- taking stern to fair value. >> stern said the business will be half its population gone.

>> he did not care the service providers have not come back. they are going to come back. russia down big. china not that good. these countries could come back. he says they're political. the point about chambers he's outgoing. i love the new guy robins. if you speak to people in the boardroom about using cisco if something goes wrong and somebody hacks you, there's 20 guys -- is it you? was it you? you just call john. now you call robins. you call and you get them. they solve it for you. >> speaking of cyber chambers was asked whether or not this rumor of cisco buying fire. he says never comment on rumors or speculations. then he says, i wouldn't bet on

the one you heard today. >> this is the chambers, i'm out of here and here's the truth. when you hear him say to an analyst, i'm not going to mention towe from merrill lynch. we've known each other a long time, but you don't have any idea what you're talking about. he said alternatives were garbage. chambers is saying, i'm taking no prisoners. take no prisoners. this is a very different cisco than what we are used to. >> before we leave it, is the transition a hold dynamic, a buy? >> buy. it's really cheap. my charitable trust owns it. i go behind this. i talk to a lot of these guys. there was a time, and i said it to john there was a time i was concern concerned hewlett might be

coming on to them. hewlett-packard is picking up. alcatel, lucent nokia get together, it's total disarray. cisco is in great shape. those who want to say -- there are so many analysts who are negative and i'm surprised. i think robins will run over them. i think they're road kill. >> we'll see what happens in the next couple of months. the big week for retail kins. kohl's out. earnings beat. disappointing sales growth has the stock down over 10%. penney out delivering a mixed quarter. reporting a smaller than expected loss, but revenue was light. they did up their guidance for sales and margins the rest of the year. people are saying that kohl's and macy's are making penney look like a hero today. >> i like the penney call.

the previous regime came with a wrecking ball. how quickly can we destroy it? this home section was awful. kohl's the third largest retailer had been on a major roll. this is worrisome because it justifies why we saw that big mac row retail sails. kohl's down. >> you have to buy kohl's. don't buy it today. let the downgrades happen today.

i do believe that people are going to extrapolate and say the gasoline money saved is not being spent. this is something charlie sharp from visa told us. penney is taking sales back. the west coast port didn't hit jc penney that much. the rails are bad. retail's bad. i think those two groups of people who are in. >> the 57 cent loss on penney, a year ago was $1.16 loss. >> you are going in the right direction. those who want to jump on the

stock, it's already moved a lot and they are using 2017. i'm using 2016. i like how honest they were on the call. they've got to get home right. ultrasalon can come in. the back store. those are the guys who are doing well, niche retail. urban outfitters is terrific. i'm going to philadelphia to throw out the first pitch. i'm conscious they may have the most momentum. a philadelphia-based retail. broader markets. dow up triple digits premarket. claims were better than expected the four week average hitting another 15-year low. ppi down softer than economists had been forecasting. we were liking for a 0.1 gain. >> there is a set-up. you want oil to be flat.

futures up. the dollar is the worst asset in the world. we all knew because every hedge fund told us the dollar was going to go 90 euro. people short this thing. they are just being annihilated. once again the intelligence told us something was going to happen. it's not panning out because italy numbers were strong last night. >> germany has been a tad more fixed. >> france is strong. spain is strong. spain, i mean, geez. no one really thought if we get asia going, you could see a major international with the stocks, the major international companies based here will really fly. people will have to raise numbers. a lot of people were using 1.05, 1.10. be aware the numbers are too low. people are leaving domestic stocks and buying internationals

because the dollar has so little momentum. >> sure. are you thinking parity is not going to happen? going to happen later than expected? >> europe is too strong for there to be parity and we are too weak. >> you did say if you are going to do amalfi. >> going in september. i should have locked this one in. i should get insurance liked hedge funds. i want to just get a nice suit in milan. >> shake shack. >> qualcomm's game plan for growth. an exclusive with the company's president and his first television interview. we'll get to a lot more including jack in the box domino's and twitter together. you've been all over that this morning. a lot more.

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cramer mentioned the rails. kansas city southern withdrawing revenue and guidance volume for 2015 citing uncertainty around energy-related markets forex impacts, u.s. fuel prices, but

they did have a half a billion buyback. energy, all the rails are linked with energy, norfolk southern with coal all of them have oil. they keep going down. wait. wait. it's a nafta operator. peso, you put them in your wallet and they go down in value. >> burlington. >> yeah but i wonder how they are doing this time with oil from the balkan which is hard to get to. mexico is doing well. it's a flow of funds thing. chambers calls mexico the strongest country in the world.

it's bringing back the country but the currency is out of whack with the country. i would be a buyer of the peso but there is really no way other than to go by land. it's taking a beating mexico, but i love it. >> walmart testing a new unlimited shoipipping service. the largest retailer said the online shipping subscription will cost $50 a year. more than 1 million items will be available in three days or less. it's invitation only. no movies, music or original content for now. if if you're amazon are you sweating this? >> no. what does that mean?3 million rubber maid coolers available? not only do they know exactly what i want. we all pay more for prime. wouldn't pay more for costco.

>> a walmart customer might think $99 is pricey. >> yes. i think walmart is -- i like doug mcmillan. he seems very nice. >> a nice man. >> like dick costolo. this is that nice earnings to share thing i'm working on. costolo has the lowest -- he is so cheap on a niceness basis. it's hard to put that into stock valuation, but that guy is nice. >> danny meyer, shake shack reporting a surprise profit. results beat on the top and bottom line. first quarter sales up 59% year offer year. stock is up more than 200% since the ipo in january. >> i was doodling. this is an interesting metric. the value of a store in mcdonald's is $2.5 million.

jack in the box $2.2 million. value of a shake shack with chairman danny myers, $41 million. there are 70 stores. it's pricey. the burgers taste great and the crinkle fries are killers. >> you took market cap divided by the number of stores? >> yeah. imperial data. the stores make a lot more. the average unit makes more than the runway. a lot of those -- you know l.a.? >> a little bit. >> they talked about one from la ciena. you don't have one in california? if you're short shake shack they have one in baltimore. they could put it up 680 stores

overnight. >> shake shack does two-year comps. they call them same shack sales. the quarter up almost 12%. raising their revenue forecast to come in in line. >> remember there are only 13 stores in the comp. they did do double digit comps. they said we can't maintain this. that's how you get the shorts. they'll do the number. this was a fabulous conference call from the standpoint of guys, we are like this little company. we are going to blow it out. i tell the guys, if you put shake shack in all the starwood properties, if you put a shake shack in a hyatt, for room service? >> you said that on the day of the ipo. >> this is why you can't short the company. 47% of the short. >> i here a viewer saying you are going to run right into in-and-out neighborhood is that

your plan? >> you'll get some traffic. this was a beautiful conference call for a small cap company. >> how about jack? 60 cents. misses the estimate. comps up 8.9. >> i think jack is great. the stock has come down a lot. this is an undervalued story. i'm going to do something my nephew and head writer sent me an e-mail and said you've got to do a piece about shake shack versus jack. shack and jack. oh, my -- why don't you come on tonight? >> nice dividend hike from 20 cents to 30 cents. >> jack has great momentum. chipotle hates me to use it in the same sentence with codova. i think they are doing very well. one is organic and natural if

you had the burrito -- it's an unstoppable burrito. >> there might be consumers who couldn't get a carnita and couldn't get it. >> remember on the chipotle call there are 88 unnatural ingredients in someone else's burrito. i don't think it's a homemade place like betty's. it gave the illusion it could be another guy associated with mass. >> we'll get cramer's mad dash. later david fash sits down with dish chairman and ceo charlie ergen. take another look at the premarket. we have a nice set up. more "squawk on the street" straight ahead. through programs like mission main street grants. last years' grant recipients are

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let's get cramer's mad dash. >> talking about salesforce is an earnings story. this is goldman sachs raising price target. this stock did not come down after the hoopla about the ceo is selling. that's kind of unusual. unusual that you would have a spike on takeover then have a major from raised price target because the business is doing better. i spoke to mark yesterday. i got him to befriend my wife.

>> to befriend your wife. >> i said why are you blocking lisa? >> okay. >> he was at the wedding. >> he's hard to miss. >> he was partying till 3:00 then imploded. anyway, sales force is doing incredibly well. i look forward to earnings next week. it's no more takeover. >> merrill lynch has a sale that goes to a hold. they say don't chase. now they are coming in. mr. peltz did not win. i'm not calling out a victory for peltz. i can't spin the capitals. they won big against the

rangers, but are not going to the next round of the playoffs. >> both these companies exiting a weird story line on both fronts. >> exactly. that is so important. they were etherial. cloud is so hot, it's amazing. microsoft could go up again today. chemical business is not hot. you're stuck with chemical company. >> deutsche echoing with merrill lynch is saying. >> yes. i like to see agriculture get stronger. deutsche saying you could use the pullback to buy. >> all right. we'll talk about that and more. opening bell a few moments away. david's exclusive with charlie ergen.

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welcome back. we are getting word of another

skirmish between iran and another sailing vessel. >> u.s. officials are telling nbc news that iranian gun boats fired at a singapore tanker in the straight of hormuz when that tanker refused to halt at the iranian command. the iranian command then sought assistance from united arab emirates in the area when those ships approached the iranian gun boats turned and headed back. this is according to nbc news that iranian vessels fired upon a singapore tanker near the strait of hormuz. >> courtney reagan, we'll keep our eye on that. those types of news items have not been buffeting the market. >> no. there seems momentum you're post the employment number low inflation, interest rates going the right way, oil stocks going up. now, there is usually something the bears can bring up quickly. we are in that zone when there

is very little news. i read a couple. some retailers weren't that bad. the restaurant is good. cisco good. i got up at 4:20. there was that little to do. >> there's the opening bell. take a look at the s&p at the top of your screen. it's city harvest, helping feed new yorkers facing hunger. at the nasdaq gallapagos. we have the saudis saying we made the right call in terms of keeping production robust through the price decline. scaring off anybody else who might have tried to muscle in. >> oil will percolate up. we are not producing enough in this country and europe picked up a lot of the slack. it could work its way to $70.

>> though could ramp up production again. >> that could stop it. they could get it up quickly. asia is getting stronger. china, the baltic freight up. things are getting better in china. >> you mentioned urban. upgraded to market perform on valuation. this is the biggest gainer in the s&p. >> and target which my charitable trust owns is disastrous. i would prefer if we had news about why target was down. not everybody is bad. just understand it's case by case with retail. they are not all bad. some guys had better merchandise than others. some guys are doing better than others. >> there was a weakness today. target macy's, nordstrom under

armour even. >> these are great opportunities tomorrow, not today. what happens is analysts will say target is down. i've got to downgrade it. they are taking cues from the stock. >> dana says all the challenges we are hearing about temporal and external. >> stocks have come down a lot. problem is china turns and europe is turning. you want to be in ingersoll-rand. wait a couple days. the retail environment was good. first couple of weeks are good. my understanding of may has been good so far. don't abandon ship. wait for tomorrow when the analysts panic. a group panic. >> gas is back to $2.67. >> down a dollar from last year. i think the job claims are very

good. i still think jobs have more to do with retail sales than gasoline. what did you make of this tweet to order system? >> domino's will find any way to get younger people to buy. people said we should buy twitter on that. look at domino's stock. paddy doyle i love domino's pizza, it's great. my kids love it because you can order online. you don't have to pay at the door. people still insist this is why you want to buy twitter. "usa today" picked up my positive tweet how great it was. don't buy twitter -- my charitable trust owns twitter -- don't buy twitter off the

domino's. >> twitter is a great product? >> they have to sit down with us. i have ten ways they can montize. i'm only going to do it with my buddy noto football play fabulous funny guy. if you can buy another 2,500. average up to get to 10,000, anthony. just tweet you are going to do it and we'll all be fine. >> people still for the second day going over the verizon/aol deal. "new york times" saying it's evidence verizon is not going to remain stodgy if it's been stojy. >> went out to dinner with jim stewart. verizon is another tnp, take no prisoners. i think aol will try to develop a sports channel.

they are going to let him run that. people think it's a stupid phone company. it's got so many subscribers. i think jim stewart is right. this is against google. i think they hate google. you want to go into wireless? we are going to come and get you with better ad technology. you faceless jokers who don't care about making money, we are coming after you google. this is an anti-google play. i don't want to be google. verizon is a gorilla. guys at google, who knows what they are up against. driverless.

speaking of verizon, a guy who knows a lot about that, david faber is in phoenix. going to talk to charlie ergen. >> interesting listening to you guys. verizon does figure prominently as you know. a lot of speculation about what will happen to dish the company was founded and run by charlie ergen. we are here at their annual team summit where they invite partners, about 3,000 who are selling the service installing the service. we'll get brought up to speed by mr. ergen. no shortage of things to discuss with him. sling tv. very important what is going to happen there. and what is he going to do with all that spectrum and comes back

to this idea would verizon want to try to buy dish or are they moving in a different direction? the aol deal was a small one, you have to remember verizon does like to keep its leverage at a certain level to remain investment grade because of all the money they borrowed to buy vodafone. that was a big deal. >> i think dish has all the cards. ergen can do any deal. can you explain that ergen is a huge card player and often has cards we don't know about? >> everybody talks of course about the fact he is a player of the highest order. well versed in various tactics. investors start to wonder. they reported earnings last week that were not particularly good, lost 144,000 subscribers. the earnings were not bad.

what do you do with that wireless spectrum? their investor base is asking a lot of questions. the expectation is he had cards yet to play. that would seem to be the case. maybe he'll share some of his hand with us today. we are hoping. >> does he ever comment to you, on the record you get him to say things. what does he think about the directv/at&t combo? is he threatened by that? >> they filed objections today we can talk a bit about. >> he's moving in a different direction. as he said to us in the past, which is i realize the poor business is not a growth business any longer, and therefore i made different investors over time in an area i

think is going to deliver a great deal of value. the question yet again, that seems to be the right move. that spectrum is worth more than they paid for. the question is what do you do with it all? we still don't have an answer. >> david, can't wait. it's going to be great. in the meantime dow is up 142 largely on the back of companies that might be benefitting from a weaker dollar. microsoft, boeing, apple. >> this is the story. we'll try to -- this is out of retail into companies where the translation will be much better. >> with that pisani is on the floor watching that. >> we have a broad rally. all ten sectors of the s&p 500 are on the up side. all of them about the same. i say tech is outperforming just a little bit. in addition to the weak dollar i point out that ppi number and not just energy down food down, services down, no evidence of rising prices at the wholesale

level, at least. that will help corporate margins, as well. that is a factor in the rise we see today. now we are getting retailers in and you can see kohl's has been a big winner this year. not today. down 9%. they did beat, but didn't raise full year value. they didn't raise the guidance. some people thought that was strange. big momentum name. they had a great quarter last quarter here. they talk about new initiatives. that rewards program is going very well. kohl's was up 22%. the macroenvironment is tough. look at same-store sales. the three retailers we've seen, kohl's up 1.4%. that's below expectations. we were talking 2.5%. jc penney, 3.4%. macy's was down 0.7%. all three right on same-store sales. remember the story from the bull

side on retailers. three basic ideas. number one, traffic is supposed to be increasing. put up the next full screen you'll see that. we are supposed to have leaner inventories. we didn't have that. kohl's and macy's up a year ago. traffic hasn't been increasing. the one component job and wage growth. only one of the three elements of the full story in retail has been happening. jc penney is even down here today. they did raise full year same store sales guidance. they did talk about acceleration in march and april. when you have a stock up more than 20% on the year, the news they had out today isn't enough to sustain. a lot of people have been talking about the fact that the market is holding up well. the dow industrial is only 1% from its historic high. there has been a lot of

discussion about the dow transports. the dow transports closed yesterday at a low for the year for the whole year. i would say this is not just because the airlines have been weak, but truckers, logistics railroads have been weaker. norfolk southern closed at a low for the year. many of the railroads are sitting at the same place. that's another low today for the year. some of the truckers like yrc worldwide sit near the lows of the year. why am i bringing it up? it's not one subsector of transports. a lot of people believe that is a real issue for stocks going forward. finally, just note a lot of traders talking about the 30-year auction today. stock traders don't talk about 30-year auctions but with the three and ten year better than expected, that reduced the yield and stocks rose in those two

days when we had those auctions. that will come today and then big discussion on the floor here about whether that will help stocks today. back to you. >> thank you, bob. >> let's get to the bond picks. rick santelli. >> good morning. bob nailed it. we have concessions in the marketplace. what does that mean in english for treasury auctions? yields backed up a bit. you can buy in a bit cheaper and your yield's a bit better. the notion of the 3 and 10 year going so well. i gave them a and a plus respectively. may moderate the selling. we'll see what the 16 billion 30s at 1:00 eastern today. looking for 24 hour of 10. yes, the ppi did bring us down a bit. not much. we settled at 2.29%. let's pick that date and look at several charts. you see the 10-year last time we

were up there. look at bund yields. looks similar. exactly the same comp last time they closed up at these levels. yesterday was around 77 basis points. let's look at the french 10 year. flirting with 1%. pattern looks the same as does spain flirting with the 1.83% level. if we switch gears a minute and look at currencies i want to point to what has been the tightest, the most consolidated the most boring if you are a trader affects the greenback, that's the dollar/yen. open this chart year-to-date we are testing the lower bounds. it's been a 119 closing market. with dollar being a proxy for interpretation of fed activity in the future. last chart early february euro versus the dollar. this benefits from all the weakness that comes into the dollar. there was a time not long ago where the dollar was going up.

i said euro weakness. now that the dollar is going down, i don't say euro strength. i think this is dollar weakness. back to you. >> rick santelli. >> rick's right. my thesis would be his thesis. i love being on the same page as rick because he is an incredibly nice man. i love the guy. i said that yesterday. relative calm in the energy complex. let's get to jackie deangelis. >> good morning, carl. we are looking at prices flat this morning but wti is holding over $60. i want to talk about this notion of saudi arabia taking a victory lap on pricing and production. sort of strategy that they put into place. a lot of analysts are saying this may be a little premature. that's because oil prices have not necessarily been trading on supply and demand fundamentals, but really more on the dollar. we've got a weak dollar right now. a soaring euro, and geopolitical

instability as well. when the fundamental situation comes back into play, you have goldman sachs warning we could see more down side here. people are cautioning. it's also why we've seen so much volatility over $60 a barrel here as we get buying we'll see profit taking, which is probably what brought us back down to this level as well. i do want to mention there have been reports that iran has fired on a singapore tanker. that is a potentially developing situation, not impacting the oil market right now, but something to watch because as i said, geo politics have been part of this move past $60. there are a lot of factors to consider when you are thinking about the oil trade right now. and realize traders and analysts are looking at it differently. that doesn't mean supply/demand fundamentals won't again be important to this market. back to you. >> thank you very much. jackie deangelis. when we come back new details on apple's long rumored streaming music service.

upping estimates on the iphone for the quarter. and we'll hear what dish network and chairman has to say about subscriber losses and future of sling tv. >> dow up 113. about 120 points with a record high back on march 2nd. hello. i am here to offer sophisticated investing strategies. my technology can help you choose the right portfolio. monitor it. and automatically rebalance it. all without charging advisory fees, account service fees or commissions. that may be hard to compute. but i'm a computer. so trust me.

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pretty good breadth. we'll catch up with cramer in a moment. ideas come into this world ugly and messy.

they are the natural born enemy of the way things are. yes, ideas are scary and messy and fragile. but under the proper care, they become something beautiful.

i'm standing up because my apple watch says it's time to stand. china cell phone could be up for apple. i think it's very important because cell phone weakness

scared a lot of people. >> his estimate is 51 million for the june quarter. street's at 45. >> he's way above. that is very good. another thing about the watch, i haven't gotten my mother's day watches. hewlett-packard, citi says be careful when they report next week. they have such a big overseas business. i say be careful. john chambers took aim at hewlett-packard. basically said they lost their mojo. competitor, but john was feisty. >> could the take away be hp moved beyond the cost-cutting chapter? >> it's the split. i think people are excited about the split. this is a weak dollar play. that's what you are going to be starting to hear. who is a weak dollar play. hewlett-packard is that. >> dollar at a four-month low. what is on "mad" tonight?

>> one of the themes on the cisco call was cyber security. that's why cisco feels it has an edge. we have cyberark. they do a particular cyber security. then zebra. they were up because they made an acquisition. this is a company that is so on the move that it's off the radar screen. zebra people think of zebras, no, think zebra technology. not like when you watch national geographic and one gets caught. these get away in the end. >> you feel bad for the last one, the slowpoke. >> they are always so cute. their moms are nice too. >> you don't like up opens. does this feel different? >> this is so bifurcated if you have a domestic stock it's getting hammered. this can hold. this theme is holding. domestic stocks, money flowing

out of domestic stocks is breathtaking, including the rails. it's falling right into companies based here but had big dollar exposure. i think it's going to win. be careful like the home depot and lowe's. this is the weekend for planning. wait till next week. i think robins has a set of skills that will be a nightmare for short sellers. >> we'll see you tonight, "mad money." when we come back, david is live and exclusive with dish network chairman charlie ergen and the ceo of houzz.

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♪ ♪ ♪ at chase, we celebrate small businesses every day through programs like mission main street grants. last years' grant recipients are achieving amazing things. carving a name for myself and creating local jobs. creating more programs for these little bookworms.

bringing a taste of louisiana to the world. at chase, we're proud to support our grant recipients and small businesses like yours. so you can take the next big step. good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and simon hobbs. david faber in phoenix in morning at the dish network's 2015 team summit. he is going to sit down with charlie ergen chairman and ceo

of dish for an exclusive interview in about a half hour. markets hanging on to a nice gain. dow up 125 points. dollar at a four-month low and that is benefitting the kinds of companies that would make up the dow jones industrial. >> european bank president mario draghi speaking at the imf in washington today. we'll talk to the gugenheim ceo. >> bad day for retails. macy's and kohl's down sharply. >> cisco reporting third quarter results what outgoing ceo john chambers had to say about the company's growth going forward. >> u.s. stocks rising. the dow's essentially within 120 points from a record high. the dollar extends its slide. euro hitting a three-month high as mario draghi takes the stage at imf headquarters in washington. joining us is scott minor, chairman of investments.

he is in town to accept the institutional investor's sixth annual u.s. investment management award for core plus fixed incomes. congratulations. >> thank you. appreciate it. >> what did you do to deserve that? >> i showed up and work and didn't manage to do worse than all the rest of the managers. >> that's all it takes. >> that's it. >> what is the key to doing that in this environment? >> i think the key is not to take a lot of bets on interest rates. long term rates hover where we are, maybe slightly higher. and what is credit going to do? as the fed begins to raise rates

that credit spreads continue to tighten. so having some exposure to high yield bank loans is probably not a bad thing to be doing if you are a fixed income investor. >> would you say you had a contrarian view on rates over the next couple of years? >> i hate to think of myself as contrarian, but i do find myself out of consensus a lot. i think the fed has very little latitude to push rates up dramatically from here. i think both the ten-year note and short term rates can't move much above 3%. just because the debt load on the economy is so great that it will probably cause economic activity to start stalling out. >> meantime williams this week saying it could happen, and if it does, don't expect a long-term signal that it's about to happen. >> right. i think the fed, i think is shifting its focus from being concerned about getting started too late to now monkeying around

with expectations too much. if, for instance, the world begins to believe the fed is going to start delaying into 2016, the long end of the curve may begin to rally again. the fed clearly does not want long term rates to rally at this point. >> can you explain what is happening, scott, with the flows that you see? for instance if people are finally getting fed up with the bond trade and yields are finally set to rise even a little bit, why wouldn't that money go into stocks? where is it going? >> if you look over the last month or two in mutual fund flows, money has come out of equities and gone into bonds. you would think at this stage of the game people would be tired of bonds. i just think that the demographics in this country where people are so income-oriented, every time we get this kind of a backup in rates, people see it as an opportunity to put money to work and they stepped in. while i think you are right that

it's probably time, we are probably past due to make the trade from bonds to stocks, a lot of people are still hesitant to get into the stock market. >> can you spell it out for me? is the sell-off we've got in bonds a long-term trend? >> i don't think so. i think this is just a countertrend rally that we could see rates back below 2% somewhere in the near future. >> can you bring you back to the point you made about the fed needing to raise rates? what is happening long term with the bond market? can you run us through that again? is the idea they will seem to be way too far behind the curve, and therefore risking inflation in the future? >> i think the first thing they are concerned about is by keeping the short term rate so low, they are running the risk of inflating bubbles. other than that picasso i bought a couple of nights ago, i don't see a lot of bubbles. >> that was you. >> i wouldn't have paid $180, that was too much. i think they are worried about

bubbles so they want to get started. they are afraid of being criticized for what happened under the greenspan era. the second thing is now that long term rates have come up, they are also concerned when they do start to raise rates we are going to get a replay of the 2013 taper tantrum. since they are concerned about a dislocation in fixed income that could lead to perhaps a run on mutual funds and maybe something more systemic, i think they are happy rates moved up here. they would be hesitant to start seeing rates dramatically fall. >> i know what sara wants to ask you. >> we've got brand-new cnbc survey results. people are starting to freak out about their dollar bullish position because now the dollar is at a four-month low. you are seeing the market react. obviously, this puts a huge weight on earnings in the third

quarter. am i right this is a massive overshoot we saw with the dollar strength? >> right. i'm with you on this one, sara. >> you don't have to agree with her, incidentally. >> she is hard to disagree with. >> it's impossible. >> just ask simon. >> i think that the long term trend in the dollar is down -- sorry, is up. the euro is down. history shows us to get an economy that has been in a structurally deep recession to begin to recover, that we need to get the exchange value of the currency below purchasing power parity by maybe 10% or 20%. >> this is where the big macs come in. >> exactly. the idea is until you get the currency to trade at a significant discount to 1.10, which could be 100, it could be 90, even lower i don't see how we really get european

manufacturing to be more competitive. >> just for the sake of completeness, the euro zone grew much more rapidly than this economy in the first quarter. >> right. >> the bar is low. >> thank you very much. >> in the meantime, shares of kohl's are falling sharply. down over 10% highlighting what has been a tough week for retail earnings. joining us by phone, oliver chen senior retail analyst with cowan group. kohl's is a fascinating story. you have this big momentum run-up of 22% coming into february. then today it's beaten on the earnings per share. 8 cents a share. margins are above average. because the volume isn't growing as rapidly as people hoped, it's being slammed. talk me through why that is. >> we had a weaker february

combined with a very good march/april combined. the weaker february led to a slightly weaker comp store sales. that's truly leading the pressure. a few key points on why we had a cooler february. so weather did play a role in terms of a lot of smoe removal as well as making people not as interested in going to the stores. the port slowdown had some impact. >> before we bottom lined it on this stock in particular this standout data was retail sales ground to a halt in april. in fact, they are down or flat for four out of the last five months. what is happening with the consumer in this country? >> i'm optimistic for the back half when i think about retail there are some trends that are positive trends such as leisure and denim but the lower gas

prices it's a fade-in impact over time. the cold weather in february a lot of retail is discretionary. with some store closures and weather that did not necessarily make you want to buy spring goods, that's weighed on the quarters. >> i read that people are cutting their a, some of their bearish bets on a lot of these retailers on the belief they will still rebound retail is on a cautious walk with macy's and kohl's reporting

softer than expected top line. >> curious to hear what you think about walmart's move into amazon prime territory going after the lower end free shipping consumer. $50 a year sounds good. is there a big opportunity for walmart? >> we are excited about the integration of bricks and clicks. what we are seeing is pure plays. think about store fronts and also internet bricks and mortar retailers think about the internet. grabbing share in this highly growing field the advent of mobile is great for what really matters as we think about malls showing negative traffic. >> what is your best stock at the moment? what excites you the most? we upgraded american eagle. we think there is a denim cycle

happening for back to school. and restoration hardware. i'm looking for compelling growth. i'm a positive on the u.s. consumer, as well. >> when you say there is a denim cycle on back to school, what do you mean? >> for the first time people might want to restock their closets and have new jeans basically. there's newness. it's high rise, low rise mid rise treatments, distressed denim. for back to school that's going to be a hot topic, we believe. we think we are ahead with this message at cowan. >> i see charts that compare denim on women to athletic wear. everybody is buying nike and under armour. >> it's worked -- both are working. the yoga pants, versatility light weight shoes health and

wellness, they are working together. the hybrid model is a jogger model. >> good to see you, oliver. >> thank you. >> oliver chen from cowan. >> i don't wear jeans on the weekend. it's only leggings. up next the dollar largely correcting after its big leap over the last year. $1.14 on the euro. what does wall street think of the currency? exclusive new data on that. >> later david faber's exclusive one-on-one interview with dish ceo charlie ergen, what he has to say about subscriber losses and the future of the television industry.

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we polled a number of wall street strategists and the results are in. they are staying bullish. even though it has been a brutal week for the bulls. after a massive run-up over the last year, the dollar has plunged to a four-month low. getting whacked on weaker economic data. better european data. as you can see the bulls are hanging in there.

strategists see 1.06 by june 1.02 by the end of the year. good news if you are holding out for that european vacation this year. a strong dollar against the japanese yen. they expect that pair to run up to 121 by june and even stronger next year to 127. that doesn't mean it's going to be a smooth ride. most expect current heightened volatility to continue for currencies. 30% we ask say those swings will get worse. when it comes to the dollar which has been at the center of the action for stocks and commodities, do not count it out. the fed is signaling higher rates and strategists say that's bullish. the explanation for what's going on, the market got ahead of itself buying up the dollar until april. jim o'neill, long-time forex watcher says it was silly how consensus the dollar trade was. he says the euro will trade in a

tight range. 1.05 to 1.17 for a long time here. in other words, it was a historic rally. something you have not seen in many years what we saw over the last year. it's going to take a while. >> i take it with a pinch of salt. >> you have to. it's not an easy business. >> you say the u.s. economy will grow rapidly and interest rates will rise. so many of those trades, there are trillions of dollars that reversed direction over just the last five weeks. no one really knows what direction they are going in. >> the question is is it a correction or has something fundamentally change. the other thing i would add to you, you have this powerful force of european quantitative easing. they are not going to let up on it, even if europe shows better signs. >> people are getting in the way of the central banks.

don't fight the fed. don't fight the ecb. >> or maybe they got too excited in this longer-term trade. you have to think of it longer term. short term there is room for correction. judge, we haven't seen these calls for 80 cents rescinded out of goldman. >> no. they are sticking to their guns. we did ask about parity in the survey. only half say the euro will go down to parity with the dollar by the end of this year. >> it's worth bearing in mind, we didn't get to parity at the height of the european crisis. people couldn't work out why that was then. there's a lot of stuff in positioning that's off the radar. >> we didn't have the qe stimulus. >> that is true. >> that's going on now. coming up, a pleasant surprise for air travelers. those frequent flier points are becoming easier to use. which airlines are the best and which are the worst when it comes to air miles.

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welcome back to "squawk on the street." european steel producer arcelor metal says the european

commission is opening an investigation of steel in russia and china. this is the second set of measures to protect european steel producers. shares up almost 9%. thank you. cisco beating estimates for the third quarter, reporting a 12% rise in their profit as high demand made up for sluggish spending by customers. the company's chairman, outgoing ceo john chambers was on "mad money" last night talking about cisco's big opportunities for growth. >> the opportunity for cisco to dwarf what we did during the '90s is very much there. and when you combine security we had the security strategy that the white boxes and new challenges do not. combine that with every company going digital, that is a boardroom discussion. i feel good about where we are. you'll see it in terms of growth. >> john chambers with jim cramer on the conference call. chambers commented on rumors that cisco was buoying fireeye

saying i wouldn't bet on that one. >> alibaba looking to invest more abroad according to the new ceo daniel zhang. zhang said the company will invest heavily in new and existing ventures abroad. "we must absolutely globalize." we spoke with him last week about the importance he puts on creating value for his customers. >> competition already exists. we always think about how to create value for customers, for merchants. if we can continue to create value for the participants in our system, we will continue our growth. >> that's been the great pallor game is where will they spend money ex-china. it held on to the levels. >> we saw the investment in

zulily. they get less than 10% of revenues overseas. in the last quarter chinese and commerce revenue grew 39%. they do more business than amazon and ebay combined in china. in the future, how will they expand that? good news for air travelers. those frequent flier miles you have been holding on to are going to be easier to use. phil lebeau live in chicago with more on that story. that does sound like good news. >> it is. a lot of people think i'll never have a chance to get a rewards seat. it is becoming easier. take a look at the results. they do this every year. survey future flights from around the world. 74% of the flights had frequent flier reward seats available. here is something that is important. u.s. airlines are improving their options.

there are more seats available. why? competition with the credit card companies. talking about capital ones. that is creating incentive for the airlines to perhaps say okay, we'll free up a few more seats to show our programs are still attractive. also, there is debate about whether or not we could see ipos in the future for these reward programs as a way to monetize it for the airlines. one negative using miles to book an international flight remains challenging. >> overall the long haul, if you want to travel to europe during june, july and august, it's going to be a tough sled to try to find seats. i would suggest you go for may, september or october. >> if you are flying domestically, which of the u.s. airlines did the best in this survey? southwest is number one with 100% of the flights checked having rewards seats available many then you have jetblue and

alaska airlines 80% of the flights had reward seats. that is a 21 point increase from last year. clearly alaska air showing a little bit of the impetuous to do more in terms of freeing up these seats. you look at shares of the airline index. this index has been plateauing over the last couple of months. a lot of people are saying, look, can we see stocks go higher? that's a big focus here. >> we'll see what happens. when we come back, david faber's exclusive interview with dish ceo charlie ergen. how the company is dealing with subscriber losses. dow up 155. i sure hope so. with healthcare costs, who knows. umm... everyone has retirement questions. so ameriprise created the exclusive confident retirement approach. now you and your ameripise advisor.... can get

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comcast business. built for business. good morning i'm sue herera. u.s. officials telling nbc news that iranian gun boat shot up a singapore tanker in the strait of hormuz. five iranian gun boats ordered the ship to halt. when it refused it was fired upon. so far no injuries reported. indian prime minister given a warm welcome by the chinese president in his hometown province. chinese leaders almost never receive their foreign counterparts anywhere. the visit highlighting warm ties between the two asian powers.

honda and daihatsu will recall 5 million cars to replace air bags. australian authorities ordered johnny depp to fly his dogs out of the country by saturday or they will be put down. they accused the actor of smuggling his yorkshire terriers into the country bypassing its strict quarantine laws. i'm jackie deangelis from the nymex. the weekly natural gas storage report. an injection of 111 billion cubic feet. this is slightly under expectations. actually, it sends us to $3. prices are spiking. i was thinking about this technical level traders were not expecting us to break the $3 mark today. natural gas prices soared over the last month, up 15% alone

this month. interesting to note that a lot of people were short nat gas because we were building storage and demand was falling. at the same time traders say when too many people get on the short side of the boat, that's when we tend to go higher. will be interesting to see if we hold the $3 lowell today at this point. again, this number bullish for nat gas prices. >> thank you. dish network reported earnings earlier in the week. the company said it lost 134,000 subscribers in its first quarter, but the profit doubled on a year ago. what's the ceo's plan now? not least with a vast amount of wireless spectrum. david faber is live in phoenix for the dish team summit. >> thank you very much. we are here live in phoenix with -- you're still chairman

also? chairman and ceo. >> yes. i have a few titles. >> charlie ergen is our guest and your shirt is old apparently, back when you were ceo originally. >> that's right. i used to do a monthly show called "charlie chat" and i would wear this shirt s. we are trying to save money for shareholders. i don't have a new one. >> we would like to start with the dish network itself. we want to get to talking about spectrum spectrum. the numbers down 134,000 subscribers. about 13.84 million overall. churn was up. to those who would say this business is certainly peaked and you are going in the wrong direction, is there anything you can do to arrest that? >> i think there's extenuating circumstances. we did have to take down broadcasting channels followed quickly by the fox news channel being taken down. that did negatively affect our

numbers. overall the industry was down a little bit in terms of numbers, which is negative the first time in this quarter the industry has been negative. the trends three, four years ago continue in the sense that the younger generation is not really paying for tv exactly the same way with hundreds of channels which they only watch a few. even some of the people are traditional pay tv customers are skimming down their packages. there are fundamental shifts. >> what can you do to change that? >> the biggest thing we launched sling tv, which is not in the numbers. >> you are not giving us numbers. >> we haven't got numbers. had we published sling numbers and had hbo, the numbers would be positive. >> in terms to those watching. sling, $20 a month and talking about others that come from the likes of cbs and hbo.

sony has one. >> exactly right. when you look at the mod i'll in our perspective do you spend $800 or $900 to acquire a customer or can you spend probably less than $100 with sling tv. when you look at the economics we see a shift in perhaps where you might get a return for your money long term. >> you talked about traditional customers and approaching differently than you are going to take than your previous ceo joe clayton focusing on people with better credit histories or people that will be long-term customers. >> it's competitive for the traditional bundle. most customers have four potential offerings then have multiple offerings over the top. are you going to keep a customer the next ten years? that doesn't exist because technology keeps changing. your model changes and you need a higher paying customer and

higher credit customer. in our case, we prefer to have customers in more rural america where our base is and where there is less competition. i think of dish. i can't think of your ad campaign. >> we give the customer better value. tv is relatively a commodity. there is no difference between espn on dish and espn on directv, yet people will typically pay about $20 more a month for directv. it's something we've got to work on to make sure from a brand-new perspective we do a better job. >> it's cable overall. at&t is buying directv. the deal is going to likely

happen. when you think about it from the strategic rationale of at&t, does it make sense to you? >> i think it does. >> you do? >> they get scale and video. video is going to be a big part of what they do in their wireless networks. they get international business in latin america where they will come follow that on with wireless and in mexico they made a move there. it does make sense. for everything you do there are typical reactions to that. >> do you see them becoming a tougher competitor for you? >> i think they will be a tougher competitor. there will be some dislocations here and there but overall will be tougher. they have scale. they will be the largest mpvd. they've got broadband and large parts of the country.

they have more of core ingredients they need. >> how fundamental is it? >> it's important. if you want to get a lot of the new people who aren't paying for tv today are paying for netflix or hulu, but not paying for the traditional bundle you are going to waste your marketing dollars trying to go after them for the big bundle. go after what they know what they like. sling tv gives customers a lower price for a lot of good channels particularly sports. it also gives them it takes away pain points. you don't have a two-year contract. you can go on for a month, off a month, go on vacation, quit paying, do everything through the internet. the tv is always on. works anywhere that you are. it eliminates some of those pain points you have with the traditional model. >> at what point will you give investors information on how well that service is doing? >> there is a good chance we'll release numbers next quarter.

it has to be enough. >> it hasn't been a year. when did it start? >> it started february. we are in our third month. we are learning a lot. we are not perfect yet. we still have technical issues. >> i've read there have been outages. >> live tv is hard. if you miss the last minute of the ballgame, you are going to hear about it. we are on dozens of devices. each one has different processors. we are inserting data for commercials and working disney and developing that technology. that's really hard. every programming contract is different. we have multiple streams in some contract. one stream with disney. we can pause in some. we have to get it more consistent. >> as we see the proliferation of these over-the-top products, and verizon is coming with one soon. they just did the aol deal, what will differentiate sling to the extent you believe it will be successful from everything else that is coming at these core

covers or core nevers? >> we have to be technically superior. it's not just about having an over the top service. you've got to work on all these devices. multiple with tvs ios, roku android and everything. >> let's move on to spectrum which is where so many questions typically come from you and continue to. verizon, at&t, even the fcc now are not happy with or at least taking a close look at the way you went about buying $13.3 worth of spectrum for $10 billion at the auctions. you used designated entities, you control them, 85% of the ownership. they were biddingly seemingly against each other. they say that is not fair, you

should be penalized. >> i think verizon has been our largest critic. ironically, they didn't file any formal comments against the merger. there were only a couple of companies that filed formal comments this week. in general i think the biggest issue has been kind of the headline has been the dish and des. we don't control the des. got a $3 billion discount. the headline is that is a loss to the tax payer. that is an easy headline on a superficial level. the people who know about automatics and people who understand these things, and take a closer look at it realize this auction generated $20 billion to $25 billion more in terms of value. most thought this would be 10, 15, maybe 20 billion. nobody saw it reaching $45 billion. i think analysts in general, the

de structure in this auction and dish's participation, probably increased the value of this automatic. it was the first competitive auction where at&t and verizon didn't control everything. raised the value about $20 billion or $25 billion. take the $3 billion discount off that. do the math. somewhere between $15 and $20 billion the taxpayer made more because of our participation and de participation. there were 19 de companies. all in all when you study the matter, the structure made way more money. >> you spent a great deal of time preparing for your strategies here. you think the fcc will allow it to stand. >> yes, i do. the de structure has been attacked many times. it's been around 1994. 100% of the commissioners all five s.e.c. commissioners chose the rules for this particular auction. they chose not to limit the amount of discount a de could get.

a de could get a $1 discount or $10 billion discounts. s.e.c. chose not to do that unanimous by the s.e.c. i don't believe you can change the rules and move the goal posts after the auction. we followed the rules. i think there are sour grapes on people who perhaps verizon now sits back and says, oh we don't have the fastest network. we lost customers in the first quarter. >> i've seen three studies. all three of those studies show timo has a fast erer spectrum. >> john legere always has nice things to say about you. >> they are taking on the big guys attacking the pain points

for the consumer international roaming. it's impressive turnaround. we are innocent bystanders as we look at that. >> you hold more spectrum at dish than t-mobile. >> we have more. we are going to be a wireless company. >> what does that mean? >> we'll take our spectrum and get in the wireless business in some form or fashion. we'll be in the business. that spectrum is going to be used. we hope to compete. it's not just compete. we hope not just to do text and voice and so forth, but a lot of where wireless goes is one is going to be huge amounts of data which most of that will be video. it's more than that. the world will go machine to machine. it's not just going to be about human beings as customers. it's going to be everything else that is connected. you'll see where samsung will connect from refrigerators to cameras to tvs. cars will be connected. you can imagine everything in

the world connected. when everything is connected you are going to need to do that through a wireless mechanism. you need spectrum. >> there is no doubt that spectrum will be valuable, but your shareholder base wants an answer when you say we are going to figure it out. when are you going to figure it out? are you going to sell it? are you going to buy t-mobile? are you going to do something, sell the company or are you going to build it yourself? >> those are all options. what i would say to shareholders, we are not a company, you buy it and next quarter sell it and make a big profit for your fund. we are a company you buy, stick it in a drawer and look at it in five years and see how you did we returned 20% annualized for 20 years. that is not a bad track record. we think long term. it's a great advantage not to have to go to the street and do something short term that hurts

you in the long run. >> advantage having 90% of the votes, you do. do you care about the share price? >> i do long term, obviously. i have 99.9% of my net worth tied into the stock of the company. i have an old shirt. i didn't spend $10 on a new shirt. i'm in line with shareholders. i hope they are going to like dish. if you are looking for a quick profit or play the arbitrage game. >> at some point you are going to make a decision? >> yes. >> it seems it's become more incumbent on you to choose what strategy it's going to be. >> i think the way i look at it, there are two ways to play it. be reactive or proactive. sometimes events happen where you become reactive. sometimes being reactive is

good. this happens, this happens and opens the door for something else. in general, i would rather be proactive. sometimes when you're reactive might be a better deal for you and your shareholders but you are reacting to what somebody else did. they may capture part of the flag you can't get out yet. >> are you being proactive? >> we certainly are looking at a lot of things that would be proactive. >> i'm being told we've got to end it here in terms of our live interview. we'll do something on tape. thank you for taking the time. >> thanks for having me. >> charlie ergen is chairman and ceo of dish. >> thank you so much. david faber in phoenix. when we come back the president of qualcomm joins "squawk alley." the biggest chip maker for smart phones and just made a big bet on the internet of everything. that's coming up later on.

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it's been a tough week for the rails, we're getting word this morning of a derailment. this time near pittsburgh. confirmed from an affiliate wpxi. several train cars have overturned on the tracks. empty this time and this is involving a freight train apparently, no passengers involved. but it comes on the heels of amtrak train 188 and on a day when kansas city southern withdrew their guidance for volume and freight for 2014. because of 4-x uncertainties and

fuel uncertainties. dow up 154, technology up sharply higher. kate rodgers at hq with more. >> helping drive the tech sector higher is microsoft extending recent gains up near 2%, near the highs of the day. the the company still riding high an upgrade from deutsche bank yesterday. the firm raised microsoft to buy from hold. citing investor enthusiasm about office 365. some other stocks leading tech higher are facebook adobe, semantic and western digital up 2%. >> let's send it over to chicago. and rick santelli for this morning's exchange. rick? >> thanks, simon. i would like to welcome my special friday eve guest david ader. thanks david. >> thank you for being here. >> you know, other the last couple of weeks, actually to be quite general in my opinion. at least from my perspective. the last four to five weeks. the personality of the fixed income market, treasuries and generalically all fixed income

products, have had a personality change. have you noticed it? and what are your thoughts? >> yeah i've kind of noticed it. it's caused me some sleepless nights. and falling asleep during the day. you know i think that as we've been talking, you and i have been talking about liquidity. that is a major component to it. things have changed, right? we've had a big selloff in bunds. u.s. economic data has been weaker. which means that we may have to put some sort of a stall on when the fed is going to hike and that has consequences for inflation concerns. oil has rebounded. so there's definitely been a lot of changes. i contend that you know prices have probably changed more than the facts. and it's been a big panic in a very, very liquid environment. >> i love that, prices have probably changed more than the facts. that is huge. what i call that -- logistics, mechanical it's kind of way the

market packs and unpacks. many times that can be untethered from all the things we normally associate with the strategies of trading the fixed-income market. so to that end, my question to you is if your notion is global growth may be improving, and europe is still going to be on the down side for a while. in the big picture it's hard to imagine a big follow-through and hold for higher rates but that doesn't change what's currently happening in the short to medium-term, correct? >> exactly. think that again, there have been some changes. oil has rebounded. the dollar is weaker, we're going to see impact on that and inflation down the road for a quarter, maybe. you know, maybe it will pick up. and maybe the fed in fact is going to you know go a little bit slower than they otherwise would have done. so you know, we'll be talking about the fed being behind the curve. when you see markets move the way they've been moving, this is a position panic. people are getting out. >> there you go. >> i'm with you david. a lot of margin calls, most

margin positions are fully leveraged. when you get into what i call virgin range territory, things change quickly. >> and the interesting thing is about it is, when you look at the position proxies that people look at, the various surveys dealer holdings for example, the long is not in treasuries, treasuries are only the liquid vehicle that people can sell because they can't get out of something else or they're being stomped out of other sorts of trades. so i think again the price activity is a bit deranged but i think it's somewhat exaggerated and as an investor, you know what you want to see here is a little bit of calm. finding a footing and determine whether in fact i'm right that the facts haven't changed that much and it really is about the price action. but you know it's a good time to be patient. >> excellent. david, thank you for your perspective. let's go back to post 9. >> thank you very much. the bird flu outbreak escalating now in 16 states. so what will rising egg prices on main street mean for investors on wall street?

our morgan brennan joins us from hard-hit ames, iowa this morning. >> that's right. well if you're a poultry farmer in iowa and your birds get sick, the future of your business hinges on the bird flu tests that happen here. this is iowa state university's veterinary medical center. and they're getting so many cases that the labs here have had to stay open 24 hours a day, seven days a week. so overall we've seen more than 33 million birds affected by bird flu that's across 16 states. by far the hardest hit has been iowa and most of the cases are tied to hens that lay eggs, many at commercial facilities that supply major food companies. >> over half the business of egg processors is done in iowa. certainly we're likely to see that ingredient market where eggs are an ingredient, be even greater impact than probably the shell market. >> so the egg market breaks down

into two categories, you have shell eggs basically what you buy as a consumer at the store and breaker eggs which are processed and used by food manufacturers. so while the shell market specifically midwest large eggs by the dozen, wholesale have increased 30% in price in the past two weeks, it's the breaker market that's really feeling the pinch. with liquid whole egg prices up 77%. over the same time. so as companies like post holdings, which owns michael foods, experienced steep interruptions in their supply chains, the ripple effects are really still to come for these major food companies. the companies that make everything from fast food breakfast sandwiches to mayonnaise. so guys, this is really expected to get much worse with so many facilities offline indefinitely. >> yeah, morgan we saw post warning about it, the cereal maker, $20 million hit. thank you very much from ames, iowa this morning. morgan brennan. let's send it over to john

ford with "squawk alley." >> well strong quarter from cisco, solid quarter as john chambers gets ready to hand over the reins as ceo. but what is next for them? and do they stand to lose from some competitors who have been trying to breathe down their necks? and qualcomm, the president of qualcomm is going to join us to talk the internet of everything and cisco says it's going to win in this arena. can both be right? and ardio has a new plan for streaming music. even as apple plans to release its redefined version. can both win? find out coming up on "squawk alley."

good morning it's 8:00 ampl at sis corps headquarters in san jose california. and 11:00 a.m. on wall street, "squawk alley" is live. -- cisco headquarters. ♪ ♪