increase of the magma, which makes sense, inside the volcano. so you can tell maybe it was going to happen. that would be weird to see a mountain start expanding. >> strange. >> run. >> have a great long weekend. take time to thank our troops memorial day. we'll see you tuesday. right now it's time for "squawk on the street." ♪ it's a beautiful day ♪ >> good morning and welcome to "squawk on the street," i'm david faber along with jim cramer live from the new york stock exchange. carl getting an early start on the long weekend. take a look at the futures this morning. we are headed for a lower open. crude oil, the ten year like to look at those, as well. they are still in many ways keys to the market overall. you see wti below $60. ten year right around that 2.2% level. let's get to our road map.

it starts with a mixed quarter for hewlett-packard. hw ceo meg whitman will join us exclusively in a few moments. we've got gap, foot locker aeropostal and ross stores. jim will weigh in on all of those. uber reportedly seeking a $1 million loan from a series of banks. perhaps it means an ipo not that far away. hewlett-packard reporting quarterly earnings above expectations. revenues were shy of consensus. the company gave us more insight into the upcoming separation which will cost billions, but will result in a good amount of cost savings. we'll talk to hp ceo meg whitman in a few minutes. i would love to get your take on this stock. last quarter suffered from the dollar. that continues to be the case. a muted reaction in the market to these numbers this time. >> i saw a lot of negatives.

really declines in a lot of businesses. people are saying i'm giving them a pass because this is not what the company is going to look like. there will be a lot of lay-offs. a lot of charges up front. maybe these two pieces are worth more than the whole. i don't see the fast growth we'll get or the huge cash flow we'll get from hp. it's not anything that's interesting to me. but you know what? meg whitman has been able to pull rabbits out of a hat. i am wanting to hear your interview and maybe there is something to -- let me put think the way. michael dell had a company i didn't think was worth that much. that was a mistake. it was worth more. maybe this hp is dell. maybe this hewlett-packard enterprises is more cisco-like than i realize, more emc-like. maybe they'll do acquisitions and have good flow.

>> we get to ask meg whitman some of those very questions. you can participate, should you choose to. i know you'll be listening closely. >> to you asking the questions. >> actually to meg answering them as she does every quarter. joining us is meg whitman breaking down the quarter. >> good morning. glad to be here. >> would love to start off with the big picture here. now that you've been into this for over six months probably at this point, why do you still feel, in fact you said you feel more strongly than ever that it is right to split this company? >> yeah. we've been at it now for six months. i am more convinced than ever this is the right thing to do. i'll tell you a couple reasons why. our markets are moving at lightning speed. both the enterprise market as well as the printing and pc market. we need to be faster. we need to be more nimble and have a cost structure that is

appropriate for the competitors we face in both those businesses. the opportunities are enormous. it's going to be easier to capture them as two separate really focused companies. as the ceo, it is hard every day to go from inkjet printers to go from a leap of 10 20 to a huge government contract where we are running the back bone of one of the big government agencies. i think it's going to be great for customers, great for employees. >> for the first time the company gave us an estimate of savings. $1 billion eventually. not next year or the year after but soon after that. does that number surprise you on the up side or perhaps that you expected would you find more in cost savings as you move through the separation?

>> you have to remember we've taken about $10 billion of cost out of this company already. we are down net 55,000 employees from 3 1/2 years ago. we've done a lot of this work. as we have evaluated every line item, we have found more efficiencies to be effective. this will make us as lean as cost competitive as we can be because you know the competitors we face around the globe. the more cost effective with better solutions and more r&d we can fund the more successful we can be. i thought $1 billion was roughly what i expected. i was pleased the dissynergies were as much as they will be. i was pleased we'll be able to offset that cost a little more than half of it in '16 and more

than all of it in '17. i was pleased by that. >> we've been speaking quarter after quarter. in the early days of the turnaround, so to speak, you were engineering, it had been your hope in 2015 there would be revenue growth. there isn't. certainly, you've been dealing with a strong dollar. so down seven, down two on constant currency. it's 15 the last 16 quarters have not shown revenue growth. is it your belief once these companies are split, hp enterprises and hp ink will show topline growth? >> that's the intent. hewlett-packard enterprise will be participating in markets that are growing faster than hp ink. both companies should grow. probably hewlett-packard faster than hp inc. that is the objective. currency has been a problem this year. it's a shame in many ways because, yes, it was negative 2%

in constant currency but when you look at what when we raised prices to cover some of the currency head winds, of course that has a dilutive effect on demand. this currency hurts us in a couple of ways. we get less dollars, but it does reduce demand because customers are paying in local currency. that is a shame really. you know what? we are working it. pricing as best we can. getting more productivity and power through this. it is what it is. it affects all u.s. companies. 65% of our business is outside the united states and half of that is in europe. >> another place you may have been a bit surprised, and you seemed to indicate this on the conference call were pcs. coming in this year did seem there was some momentum from the xp refresh in terms of windows. that slowed dramatically. i'm curious what your thoughts

are now about the pc market where you did take share but not necessarily a high class thing because, of course share seems to be going down overall or the market does i should say. >> well there is definitely softness in the pc market on the heels of the xp refresh last year. the slowdown's been more dramatic than i thought. you're correct. our team has done a great job. we gained share in virtually every product category in every region. deion and his team have done a remarkable job. there is softness in the market. our job is to continue to develop these fantastic products immersive computing. that is a low to slightly declining growth market over the next couple of years. the other thing is printing franchise and making the necessary adjustments. >> my friend mr. cramer has been very interested in your ability to develop products in 3-d.

>> i spent time with your 3-d. i think it's so impressive. i said start selling and get out of 3-d systems. i've been saying it literally for months. i think your iteration is so much more successful. sticking with the systemwide business. obviously, yours is vastly superior to everybody else's. >> we are excited about this market. 3-d printing is at its most nascent nascent stage, but this has the potential to change everything. so we are excited about it and will go after it with our propriety technology. it's a right adjacent for hp. we are excited about that. hewlett-packard enterprise has real pockets of growth we need to go after on that side of

business. >> yesterday we were talking about your deal in china. would love to come back to that. is it your belief in order to operate effectively in china you have to be part of the chinese-controlled company or the government will keep penalizing you? >> well you have to be part of the chinese community, the business community, the connections to the government. we have a very valuable asset there called h3c. hp china servers and storage and consulting. we saw an opportunity to combine with one of the most prestigious communities in china. it would be a combination of harvard and mit. it is the premier university in china. that will be helpful. we'll be part of the community. we'll have a great partner with tremendous research

capabilities. we also, i think, have the opportunity to redefine the i.t. landscape in china. so in one move we got a chinese partner and redefined the landscape with a set of valuable assets and i.p. china is an important market for us. it's a very different market. it's difficult for u.s. companies, but i'm really excited about this. really appreciate the individual individuals at xinhua who have been driving this. >> there are companies dealing with security. when you think about china and their effective intellectual property, there is no mistake about it. i'll say it you don't have to i reported on it. i wonder do you feel safe when doing business with the chinese in the way that you are? >> listen a lot of the ip exists in china and h3c organization and has for years. obviously, what we will put into this joint venture it will oem

our servers and storage from the united states. we will do the best job we can to protect intellectual property. xinhua is one of the best on this dimension. obviously, you've got to be careful of your ip assets and it's a challenge. not only in china but in a lot of other countries as well. judge, let me follow up on that. security very important. why did you pick fireeye? you mentioned him in the tenth paragraph being very important for hewlett. >> we have a big securities practice in our enterprise services business. we have 5,000 security professionals who do a lot of similar work to fire eye. fire eye wanted a partner to actually extend their market reach. it was great for fire eye, great for enterprise services as the demand for security services is unlike anything i've seen right now it is the hot topic for every boardroom. for every kind of organization whether it's government or health care. they have expertise. we have expertise.

i think we will be able to grow both our markets by this arrangement. we are excited about it. we'll see how it goes. so far, it's off to a really good start. >> a couple of other things here. you made a change. the cfo of the company and expected to be cfo of hp enterprises will be cfo of hp ink? >> that was the plan. i love working with cathy. she's been an incredible partner. we thought we would stay together. dion went to look for an experienced ceo which he needs. he is going to be a new ceo. as we looked in the marketplace, one day we said cathy is the perfect person to support dion. she knows his business cold. she is a very experienced public company cfo.

and by the way we happen to have someone inside to come up dramatically who joined us from gm china about 1 1/2 years ago. he's done a fantastic job running eg. i can have a cfo because i've been a ceo so long. this worked out great all the way around. congratulations to cathy because she built a great bench depth. i'm thrilled for dion he will have a great partner out of the box. i will continue to work with cathy because i'm the chairman of hp inc. i'll miss her but get to see her as chairman. this worked out well for everyone. we don't have to bring in someone new from the outside to learn these businesses which i can tell you personally, the learning curve on these businesses is really steep. tim knows half now of the hewlett-packard enterprise business. he'll have to learn services and software, but he is a pretty quick study. >> i would think not the

learning curve but the difficulty of what you are doing there splitting these two companies is fairly high as well. it's never really been undertaken creating two fortune 50 companies. when you are in a forum where you have other ceos we all know there's a lot of chatter about simplification, how fast the market is moving. do you get asked by your peers how it's going because they may be thinking about it? >> i get asked all the time. this is different than a little carve-off which has been done many times. this is the creation of two new fortune 50 companies that can be more focused on their markets. everyone is watching to see how this goes. can we prove out the thesis that more focus and smaller scale is important in a world where speed matters more than just about anything else? yeah. i get a lot of questions about it. the good news is we now have an enterprise services practice

that is helping separate the companies. if other companies want to do it we have a services business that can help untangle the i.t. >> when they say is it worth it, do you say don't do it? don't try this at home? >> no. i say this is totally the right thing to do. you would not believe how much -- i can already feel the difference in the companies in terms of accountability focus, cost -- more focus on cost. less of that insatiable desire to hire. you can almost see a change in the culture before your very eyes in a really positive way i'm excited about it. boy, we have looked at every process, every cost we are spending. as you pointed out, there is more cost to be taken out. that is important. it will make our products services more competitive and that's the name of the game. >> meg whitman, thank you for

joining us chairman and ceo of hewlett-packard. >> thank you. we have a lot more. your take? >> obviously i'm interested in 3-d printing but it's not a needle-mover. if anyone can pull it off, it's her. this is an execution story. i was surprised about the cfo switch. i didn't know that was in the plan initially. >> it wasn't. she was repeating what i had said. that it was the plan to have her be at hp. >> cathy is fabulous. i think that is a big win for hp. she said she will be the top, but that makes me feel even better about hp. i want to feel good about the hp division. i saw lexmark created value when ibm stun it off. the dollar dumping, i don't know. that could hurt them. >> we didn't talk about printing which is a very tough market.

their margins 18.3%, not bad but getting underpriced by japanese competitors. >> i always come back to the fact she is great at cutting costs. now they have to show growth. >> we have a lot to get to including retail earnings from gap and foot locker. the executive chairman and co-founder of come score.

♪ ♪ ♪ 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.

we are wrapping up a busy week of retail earnings. gap reporting quarterly profit in line with estimates. revenue shif consensus amid slumping sales at gap and banana republic stores. old navy comp store sales up 3%. foot locker posted better than expected quarterly results. same store sales there up 7.8%. people buying a lot of sneakers. my household, my 12 1/2-year-old's foot keeps growing. >> this foot locker earlier this

week numbers will be decelerating. this is a good quarter. there is no flies in foot locker. they should continue to buy nike because nike is doing better overseas. they called out western europe as being strong. >> the read off foot locker is into nike as well? >> right. under armour is a domestic company. this is a nike story, foot locker. >> gap not as good a story. on my way home i'm thinking what is going on there? e-commerce bad, west coast ports which everyone had a problem with. >> don't they still give us monthly -- we get this telegraphed. >> when you listen to them you feel like listen we know things are wrong. i went in the stores and the stuff doesn't look good.

okay. i can tell you that. this was a demoralizing call. for those who want to think gap can turn quickly, i found this call to be sobering. sobering how it's going to be hard to do. and depressing. i found the call depressing. >> really? >> when you look and say aeropostal which the numbers are horrendous? i felt more hope than in gap. gap was a downer. if you work at gap, lose the negativity. if you tank you don't get number one draft choice. >> no. there is no first choice in retail. >> don't be so dour. up next, cramer's mad dash.

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welcome back to "squawk on the street" where we are live from the financial capital of the world. the opening bell will ring in a few minutes. we sort of delayed things. what have we got? >> deere. a lot of people were concerned about the quarter. earlier jpmorgan talked about the dire straits of the farmer. there is no dire straits of the construction industry. they talked about how construction sales for their machines is going up. they are predicting solid profitability. this was a trouncing of the numbers. the conference call they are often muted and we have to be careful, but it looks like the

deere -- if they can make this kind of money when they have worldwide equipment declining 20%, you come back and say what happens if the good harvest comes in? what happens if prices go up because crops are going down. >> is this a reflection of overall strength in the economy? >> yes. >> is it housing? >> higher housing starts. they are citing that as one of the reasons why. >> which we got earlier this week. >> this is one of those companies. it's a great american company. my hat's off they can make this much money with sales down so much. you say what happens if things get better for the farmers? great job deere. >> yes, sir. >> a lot of people feel campbell's is one of these pantry companies. they do a better number. they call out global baking and bolt house. that is their organic and natural. campbell's would be smart to buy

white wave. >> white wave can be sold now. >> campbell's denise morrison i think you've done a terrific job. get more organic. >> one of them talked about can these kinds of companies survive that are not, to your point, the theme you've been harping on for a long time organic and natural. >> you must be organic. >> you know how much sodium is in one can of soup? >> yes. like the dead sea. i think this is without a doubt a better than expected quarter. i think denise morrison is in a position to buy more companies like bolt house, which i've been urging them to do. if they do so this inorganic and unnatural company will become organic and natural and the stock goes to $60. there is my outline what you need to do to get it done. no fees. when greg gets the call tomorrow from her -- >> who knows what will happen? >> they never sold.

>> we are in a very robust m&a market. >> we are. >> feeling a little frothy. >> that saved tyson, that acquisition. >> some of the numbers, i think there's more to come. maybe we are almost in the blow-off phase. the next nine to 12 months. we'll see big stuff. where people start thinking about things they might not have in the past. jack i'm not going to disagree. b&g will buy things kraft casts off. heinz kraft is an acquirer. i think general mills has to be an acquirer to grow. these companies have no real top line. >> many of them have very little top line growth. all the costs and everybody talks about 3g and zero basing it. you can't cut everything if you have any hopes of growing in the future. >> the only thing double digit

in the supermarket is hain and right way. the people have spoken. they like natural organic. they've spoken. >> they agree with you. there it is the opening bell at the nyse. take a look at realtime exchange back at headquarters there. at the big board, community health care trust celebrating its recent ipo. at the nasdaq grugis a swedish material supplier for raised aluminum heat 's about time. >> i can guarantee you i will never say that entire series of words. although i could repeat it. >> is that the swedish king? >> i don't know what that means. what is that? >> raised aluminum heat exchangers? >> you don't even know.

>> the man who can name every pipeline in the company can't name that. >> i know how you get solar into their system is through heat exchange. not kidding. not kidding. >> thought i had you stumped. all right. what do you want to look at as we start the opening trading? we should talk broadly market here. we'll hear from janet yellen at 1:00. >> is she going to lower the boom on biotech? she must be looking at those prices. >> we did get the cpi number. it did come in a little higher than people thought it would. that did tick up the yield on the ten-year a bit. >> do you think she comes after netflix and amazon? >> she could. high multiples. >> i know. no. no. i know what she's coming after, the shack. she's going to come after shake

shack. someone get her a shackmeister before she speaks. >> now it's parabolic. it's up another 7%. >> i want to explain how it works. >> this is about a short squeeze. >> i went to rutherford bank in new jersey. i came in one day. everyone was short the same bank. i found out i had bought it at $13, i bought stock at $18. my broker literally brought it in for me before the opening because he couldn't deliver. it was a fail to deliver situation. that's what's going on in shake shack. it is going in and buying at any price, even before the market opens in order to deliver to the buyers. this is the final phase. >> everybody is buying in the cover. >> right. brokers are buying you in. you have nothing to do with it. you find out you bought it last night because you failed to

deliver. you can't get a borrower. >> wow. how do you play if you are in the stock? i would think use this as an opportunity perhaps? >> if i were the bankers, i would say this is a situation like gopro. do some charitable donations that allow you to have a lock-up expiration early advance. that's what happened with gopro. that wrecked the gopro short squeeze and cost the stock to get hammered. make a charitable donation. move it ahead and that's what they should be doing. financial planners should be urging they do. why? this is a once in a lifetime buy in business. we saw it in resorts international. when you have these buy-ins, they can't last forever. it can't if there is more splishgs the 44% short position

goes away. >> the valuation -- >> 48 million. >> did you account for today's 7% move higher? >> yes. i have a sliding scale. chipotle is 10. jack in the box 1.3 million. this is 48 million per store. they cannot do 48 million per store. they just can't. you say why can't they do 60 it? 's infinity. a short squeeze is infinity. >> they may be introducing chicken. >> that's worth $60 million per store. how about an egg salad sandwich? that will cost a fortune with this shortage. i like it. >> you are covered. danny meyer is not going to get mad. >> i'm not owned by the wife and kids if i was owned by them i

would be better. >> you're as good as you can be. >> thank you. >> time warner up as if it is news to people they are talking charter. >> "the journal" is implying the charter is offering above $170. >> you said that. >> the stock is up. the moves in these cable stocks have been extraordinary this week alone with that purchase of sudden link an incredible multiple and promise of more perhaps from this french company that is not afraid of leverage and has the secret sauce that will allow it to take margins up in a business where nobody else has been able to take them. they are talking a big game. we'll see if they can follow through. jean-marie messier, where is he hanging out these days? there is a lot going on in m&a overall. what i will adhere is timingwise

on charter and time warner cable. people familiar with the situation indicate if they don't get a deal done call it within the next month, it becomes a lot less likely they will get anything done. let's mark that on our calendars. end of june we would expect to see something here. i don't think altice is much of a factor. could they do it? maybe. >> how about more deals in the pharmacy managers. do not sell these stocks. >> bankers seem to be busy getting giddy, which worries me. you saw the endo deal. there are some things starting to get, seem a little topee. >> interest rates remain low. they are not going to do it forever. these inversions promote deals.

the hospitals don't want to deal with all these different providers. cvs stock, fact it went up big yesterday on the $12 billion. merlot turned out to be once again, what? a fine merlot. >> it is very important your point. cvs stock went up. if you are in that environment, you are a ceo considering it, there are so many of these businesses not seeing topline growth. we know all the factors that have been in place for years. that confidence continues to grow. you see competitors doing other things. you finally get to that point where you are willing to consider doing something that you might not have in the past. that's the m&a market. they spill over to get stupid. >> i talked about sonny corleone when he says did you go to college to get stupid? you're stupid. i added a new one. are you obtuse? >> warden got very upset with

that. >> yes. >> it did not end well for him. >> imdb number one ranked movie. >> "shawshank." >> the great american talked about people stop when they see "shawshank" and watch "fugitive" so they run them constantly. it's always on. why not? when this is over we'll knock back a couple on the boat. >> i am there. i can see us on the beach right now. let's just get out of here. we've got hewlett-packard up over 2%. a different response to this quarter than the last where we really got the impact of the stronger dollar. they are now assuming may, early may for where the rest of their guidance for the year is based on where the dollar was in early may. if the dollar should weaken from that point, you can assume there may be a pick-up from them and

vice versa. >> i don't want to dwell too much on fire eye. i had dave dewalt on last night. they got permission from homeland security for the safety act. if you hire fire eye and you get hacked, you get indemnified. this is the insurors' policy. fire eye does not make money. insurance brokerages, marsh mclennan, they bring fire eye to you. that is a great door opener for hewlett. i asked dave are you in talks? is cisco going to buy you? they had a great run here. it's a great pair. >> earlier we had meg whitman on. here is what she had to say about her belief and what is the biggest news coming for this company, the split into two. >> we've been at it for six months.

i'm more convinced than ever this is the right thing to do. i'll tell you a couple of reasons why. our markets are moving at lightning speed. both the enterprise market as well as printing and pc market. we need to be faster. we need to be more nimble and have a cost structure that is appropriate for the competitors we face in both those businesses. the opportunities are enormous. it's going to be easier to capture them as two separate really focused companies. >> those shares are up. let me come back quickly to time warner. time warner cable talks with charter, they are going to press them on that. in that realm, tom wheeler, we heard from him or "the journal" reporting saying i don't necessarily look badly on consolidation in cable overall. there has been a lot of questions as to the rationale

behind the decision to stop comcast and time warner's deal. and where the marker is in terms of broadband penetration. that was important for them. if you are time warner and that board, you do not want to go down this road again. all the enormous dislocation that occurs as a result of entering into a merger and not have it closed. you cannot allow that happen a second time. that is an important part of any conversation. >> you talk about it and i look at it and it's up $4. i never met any managers that own these, yet they go up. >> i guess p he is going to be happy when they close that deal with at&t as people expect will be the case. >> he's great. >> i don't know what he will do. he's still young. >> he is a young guy. people have to understand the

operators of this industry are extraordinary. yes, we work for comcast. >> if you want to watch "shawshank" tonight, it's 5:00 and 10:00 on amc. >> apparently they have commentary with it. >> do they? >> yes. >> bob pisani on the floor with more of what's moving. >> any one time on the tv dial either "the shawshank redemption" or "the godfather" is airing somewhere. we've got a mixed picture today. some of the oil stocks on the down side. europe is on the mixed side. i want to talk about gap a little bit here it. was amazed that even though it was in line they reiterated their guidance online sales were down 2% year over year. what is that? port delays? online trends were up elsewhere. this is about brand weakness. you can see it here in this full screen. gap down 10%. the only bright spot is old navy

doing a roughly 3% comp there. i'm sorry, but they need to work on that brand overall. ann is being bought. they had traffic challenges and talked about soft product performance there stock is up because of the deal going on, but that company has a lot of issues. campbell was a good report. global baking was good. that was up 5%. bolt house was good. bolt house is only about 15% of the revenues. the core of the company is the soup division. they call it simple meals. u.s. soup down 10%, ready-to-serve soups down 18%. even broths were down 13%. they've got to figure out a way to increase bolt house sales more. we talked about interest rates. the effects banks might have. rbc had an interesting report out today on the effect on

revenue of these banks if rates rose 200 basis points. they picked that as an arbitrary number. it would be significant impact on their interest revenues. zions, comerica they believe has some basis in fact. you see a mixed picture for all the banks today. dow industrials down 13 points. guys have a hoelty and happy holiday. back to you. >> thank you very much bob. let's get to rick santelli in the bond pits in chicago. >> well remember two words. data dependent. janet yellen speaks at 1:00 eastern today. this number really makes that dependency something important. i wonder if that speech will be changed or will be like yesterday's sweet rolls. if you look at a chart going all

the way back to august 2011 cpi core. you won't find a higher number until that month. up 0.3. what did it do to the market? look at the short part of the yield curve. two-year note zoomed a little bit, didn't it? s as it sits right now up 4 on the day, up 7% on the week. 30-year bond. minus one unchanged when we look at what it is based on yechltd but yesterday. flattening is usually what traders do before they think the fed will potentially raise rates. let's look at the market's response. let's look at all three of the biggies. 10s minus 2s flattening. 30s minus 5, two day, flattening. market has an opinion here.

maybe there is an exaggeration going into a three-day weekend. when it's euro strength or weakness that moves the dollar we try to focus on the proactive component. when was the last time the dollar index closed at this level? should it close here? maybe it will close higher. if it closed here will be the highest close since the 28th of april. >> lit's get a look at crude oil prices. they are pulling back. bertha coombs joins us from the nymex. >> after yesterday's big move it looked as though we might see a tenth straight week of oil prices higher. right now, they are on pace for the first loss in nine straight weeks. oil prices this week really it's been all about the buck. as the dollar moved higher prices moved lower. notwithstanding the fact we did get a smaller than expected

build in terms of oil this week inventories. we are looking at greater demand for the weekend. aaa is expecting people will be driving a whole lot this weekend. prices compared to a year ago are down nearly $1 a gallon as they raised over this last year. really today it's been that dollar falling following that cpi number. many gold trims after the dollar got stronger. >> intuit beating the street.

can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is

can your business deliver? ♪ ♪ ♪ 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. this morning we are remembering our good friend mark haines who passed away four

years ago this coming sunday. he was the founding anchor of "squawk box." we remember mark for his knowledge and whit for being a champion of the small investor and steady hand during 9/11 and the financial crisis. mark called the stock market bottom of 2009. literally to the day. it is what we affectionately call the haynes bottom. our thoughts are with his wife cindy, his son matthew and daughter meredith on this sad day. four years. goes by fast. miss him.

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combat. >> navy seals you'll see tonight on a special edition of "mad money." >> talking about -- of course, memorial day weekend the difficulty trying to get really highly skilled veterans jobs. that one man who just retired said it's intimidating to go in. we are trying to change that. the last gentlemen on stage left there is literally -- actually actual left it man giving them suits because they have to dress right. i gave the example when i got to goldman i was wearing my marshalls suit. i thought i looked like a million bucks because i was no longer wearing k-mart. my boss said go home and just buy a better suit. these guys need better suits. no joke. they want to get integrated in society. you hear companies say they want to hire veterans. the hr department doesn't help. this is a cost for me.

something my dad and i talked about endlessly. you volunteer now. >> it doesn't make sense, the leadership skills and a lot of the skills they have would apply. >> hire a veteran today. these guys are highly skilled. you think business is the nfl? no. business is navy seals. >> i'm glad you are doing that. let's get to stop trading before we end our show. >> first time i heard this. ross stores call they did a good job, but people are beginning to talk about the saturation of off price. yesterday, you don't realize, but i wore a tie from the rack. $29. >> from where? >> from the rack. >> macy's moving into off price. people starting to worry about off price saturation. you thought it was an hermes tie. it was from the rack. you didn't know. i did it online.

>> you bought a tie online? >> can you believe it? >> i've got to know what they feel like. >> i'm talking about online saturation. you pit these guys and get a nice tie. same price i got at century 21. >> all right. jim, have a great weekend. great long weekend. good luck with planting and the bees. coming up the chairman of comscore with his e-commerce sales report card and where amazon fits into the picture. ideas come into this world ugly and messy. they are the natural born enemy of the way things are. yes, ideas are scary

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good morning and welcome back to "squawk on the street" this friday morning, i'm simon hobbs, sara eisen and david faber. carl quintanilla is on assignment. s&p 500 sitting below the fresh all-time high we achieved yesterday's session. early departures delayed today for many due to janet yellen speaking at 1:00 p.m. eastern. >> let's get to the road map.

hp ceo meg whitman speaking inging out earlier on this show. >> one analyst making a bold call for the break-up of procter and gamble sooner than later. he'll join us live to exchange. >> co-chairman and founder of comscore will join us later. shares of hewlett-packard up sharply after the company reported earnings after the bell yesterday that frankly were very much a mixed bag. revenue below what analysts had been anticipating. gap earnings share number -- nongaap number -- gaap number was below at 55 cents. all that being said stock up over 5%. perhaps as a result of the company outlining so-called dis-synergies that will take place as a result of the split of the company. and also the first time giving us some sense as to its cost

savings and what it expects to be able to find on an annual basis, recurring annual basis as a result of the split. earlier today on "squawk on the street," we were joined by chairman and ceo of hewlett-packard meg whitman. i asked her about those cost savings. >> we've taken about, boy, almost $10 billion of cost out of this company already. we are down net 55,000 employees from just 3 1/2 years ago. we've done a lot of this work. as we have evaluated every line item, every business processes for these two companies, we found more opportunities to be efficient and effective through changing our business processes. >> of course the key for investors is the future of this company which is as two companies, hewlett-packard enterprises and hp inc. which will comprise the printing and personal systems group, the pcs and all related devices to that business. that is going to take place most

likely in november. the company in jooil will give us through filings more detail on the capitalization of both companies. they did make moves yesterday announced. cathy will become cfo of hp inc. that was unexpected. overall, i asked meg whitman, knowing as much as do you now and getting as many questions as she seemingly admitted to getting from other ceos who may be considering a split of their own company, is it the right move? >> i say this is totally the right thing to do. would you not believe how much. i can already feel the difference in the companies in terms of accountability focus, cost, more focus on cost. less of that insatiable desire to hire. it is really -- you could almost see a change in the culture before your very eyes in a positive way. i'm excited about it. boy, we have looked at every

processes, every cost we are spending. as you pointed out, there is more cost to be taken out. that is important because it will make our products and services and software far more competitive. that's the name of the game. >> perhaps the reason why that stock is up despite a very much mixed quarter for hewlett-packard, which has not seen growth in 15 of the 16 last quarters it has reported. hopes are by splitting the company, they will start to see topline growth in both of the new companies. >> did she give you a forecast on dollar/yen? >> it is really hurting them. they are going with the beginning of may in terms of the guidance they are giving the street, where the dollar was the beginning of may. that will give you something to work with. >> one reason the stock maybe higher, is $2 billion in additional restructuring charges at enterprise services. through that interview she said again about the focussing ability to gain more cost

synergies. tens of thousands more jobs to go within that having cut 55,000 on the table. >> that is a key part why they are doing this. they will have lowered their work force by 55,000 workers. not quite there yet over the last three years, but will soon be. the question is what do do you beyond that? the split gives them that opportunity. zero base every single cost in the company, including of course when it comes to personnel. >> you know what is so interesting? we'll talk about a p&g split, meg whitman is on the board at p&g. >> that is an interesting point. >> she referred to any number of ceos are asking her what's it like to go through that. >> we'll talk about that. shares of gap trading lower after the company reported profit fell 8% in the first quarter. gap reaffirmed earning guidance

for the year. what will it take to get this retailer back on track? let's bring in senior retail analyst. gap has become a tale of three retailers almost. weakness at gap, weakness at banana republic strength at old navy. is old navy enough to prop up this company? >> it's really not. you need to get core gap to turn. that is the fulcrum on a forward basis. within women's, it's the tops business. they've got to get a positive comp. >> they had a turnaround plan and the ceo did say spring is a no excuse moment. almost raising expectations. spring 2016. how does that look to you in terms of the moves they made in terms of executives in fashion,

relaunching the brand -- can he hold that promise? >> they are doing all the right things they need to do. they've bottom any channel going, responsive supply chain. the end of the day, it's basic retail. you've got to get the product right. what they've done is brought in a new team led by wendy goldman, who is working with michelle demartini. now we have to see what creative will do how it flows through the pipeline and when it begins to hit the stores. they set their sights on spring 2016. we'll look for signs end of summer early fall. if they hit the right stride it could get interesting the back half of the year but you have to wait. >> we are talking about companies splitting, not just hp but we'll talk p&g. what is the point with a company that has three major brands under one roof? old navy is storming ahead. some of those processes they are going to take into the other two businesses. what is wrong with a company

that it can't learn what is going on at old navy and transfer it over? is life just not like that in fashion retail? >> great question simon. there's been some discussion about maybe they should be stand-alone, different divisions. their supply chain is interlinked between what's going on at old navy and gap. we heard from art peck ceo last night on the call he is going to take some of the key practices, best practices at old navy that steven larson who came from h&m at old navy and apply that to the core gap division. >> why do they have to get to this stage where it is to realize that might be a good idea? >> there's also other head winds they had beyond their control. the fashion trends are going against them right now. we are not in a good fashion trend cycle. it's not about basics. >> people stopped wearing blue jeans. >> and the port delays. >> i thought denim was back. >> denim us up against really

easy comparisons to a year ago. what they have to do is actually begin to integrate leisure and denim. then it comes back to the tops. they had port delays with the currency. let's give the new product team time to see what they can do. he's done the right thing bringing in a new team. >> teen retail is ahead next week. you cover a lot of these. aeropostal sales down 20%? what is the future of this group looking ahead to the big one abercrombie next week? >> we did get good results from eagle outfitters. they are in a position to take share from those two guys. they are fighting back actually. it's a little bit of a mixed bag. a look ahead to abercrombie, i think that will be the tale of two cities. hollister, one of their key divisions doing better.

abercrombie is in a brand crisis right now. >> you don't see a sign of a turnaround there? >> not right away. >> you have a hold on gap. when do you change your mind about that? what is it going to take to convince you? >> it's going to take the product at core gap. here's the good news. good news is that's really all it is at this point. that's a lot. it's a huge head wind because you have to have a better fashion cycle going for them. that's the key thing. if they can do that they can drive up positive comp at the gap and get leverage on the business. it's a cheap stock. it's inexpensive and a great a brand. they are doing so many things right in the new retail paradigm. this is art peck's strength. if they can get that to turn it could be interesting. we are still aways away. it's probably spring 2016 at the earliest. i lower made estimates to below

management go forward guidance. >> it has been such a mixed bag of retail earnings this week. john morris retail analyst at bimo. is it time for procter and gamble to consider a break-up? one analyst breaking from the pack saying yes and do it now. why do we do it? why do we spend every waking moment, thinking about people? why are we so committed to keeping you connected? why combine performance with a conscience? why innovate for a future without accidents? why do any of it? why do all of it? because if it matters to you it's everything to us. the xc60 crossover. from volvo. lease the well equiped volvo xc60 today. visit your local volvo showroom for details.

break up procter and gamble and doing now. that is what sanford bernstein is arguing this morning. ollie, good morning. thanks for joining us. the company's already spinning off almost 100 brands. why is that not good enough for you you? >> thanks for having me. sorry i can't be there in person. they are heading in the right direction. they are spinning off a few brands. it's only about 6% of their offering prospect. i think they can do something bigger than that. cost cutting more integrating the supply chain. there will be a new ceo by the end of the summer or so. instead of smaller steps they can do something bigger. >> outline what that looks like for us.

already they have four major divisions under the procter and gamble brands. how do you see them slicing and dicing those? >> there are two main options. one to break out the beauty business that's been struggling quite some time. it should be run very differently, more fashiony versus the rest of the business the laundry detergent business and diapers. the other option is a three-way split. one is the beauty business another one is the health care business grooming business oral care business together then everything else laundry, diapers, et cetera. >> aren't they already putting their beauty business up for sale? >> pieces yes. they are putting away the prestige business salon fragrance business. those are a drop in the bucket. they are not putting into play their bigger properties pantene, olay that would help

the company. i wonder how this is all going to go down. you had meetings in cincinnati. you know david taylor presumed to be the next ceo controls the biggest chunk of the business the board. do they even consider such an idea or is this radical? >> well we've been saying this could be plan b, when plan a has been cutting costs, investing back in the business. you keep seeing over and over they miss expectations. they aren't performing at par versus their peers. ag lafley is great. frankly, if he can't fix the business, if he can't improve it i don't know if other people can. it's a complex business. we are looking for less complexity, more focus. better cost-cutting throughout. if you look at them versus their peers for a sum of the parts perspective, there is up side let alone operational improvement. >> undertaking a split of this

nature you are describing is a vast undertaking. you need to go no further than asking board member meg whitman who is splitting onto two fortune 50 companies. here would be more. i wonder about the dislocation, the distraction. i'm also curious how much costs you think they could save as a result if they actually did it? >> great question. people talk about dis-synergies breaking up this company. one is from a cost perspective. i argue they are still very fat when you take onto account their scale. from a cost perspective, doesn't look like they are getting any scale. from a commercialization perspective, you look at what happens to their brands they don't do worse. these brands are inside the company. doesn't seem like the p&g umbrella is helping them much at all. >> there is a bigger phenomenon going on here. there are many of these huge big american corporations that are

challenged, whether it's coke unilever in europe you look at mcdonald's, all of them are vast. this kind of appears like rearrange the deck chairs and see where it takes you. surely, there is something more fundamental when a company is too big or environment which they penetrated most of the emerging markets, there is a bigger narrative here isn't there? >> there is a big narrative. the big narrative is growth is slowing. find ways to improve your growth. when the original premises was we are going to build up cost and grow our topline out of those cost basis. just having scale doesn't really help in a certain way. against your point, unilever coca-cola, p&g is the biggest one to break up and be operationally more intent. >> does it point to the criticism that is often levied at these companies, they spend too much time returning cash to shareholders and not investing for growth within a category?

>> it depends on the category. in some categories, the right methodology would be investing in growing. on the flip side diapers, laundry detergents et cetera they are more cash cows. they are too mature to get a better return. the return profiles is different. >> fastest growth in incontinence. p&g is the second worse performing dow component this year, down 12%. ali, thanks. up next fed chair janet yellen giving a speech on the economy on rhode island today about 2 1/2 hours time. waiting to see if she will move the markets heading into the weekend. how should you position? [ male announcer ] at northrop grumman, we've always been at the forefront of advanced electronics. providing technology to get more detail...

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markets flat as we await janet yellen's speech. our next investor says they shouldn't hide in cash.

good morning. >> good morning. >> why no place for cash? >> well cash is a bad place to be for investors. more and more investors are getting frightened again of the market. they think it's getting topee. so they are moving into cash. that is a big mistake if you have a long enough time horizon. equities are the place to be and we are still in that environment. >> what does that mean? >> when we are in an environment of financial repression it means yields are held artificially low. so investors essentially are being hurt if they are in cash or really in core bonds. >> you should stay in equity because dividends are higher? >> yes. that is the best place to be a bunch of not so great options. >> unless the stock market will decline. the tag line for allianz is

understand act. >> correct. >> that is a great tag line. there is so much we don't understand at the moment. you see it in bond movements, currency movements. the stock market is pulling in at a fairly valued level. still there are a lot of questions. how do you know where to go if you don't know what's going to happen next? >> it all depends on your time horizon. if you have a long enough time horizon, we know that when rates are held artificially low, you don't want to be in core bonds. you don't want to be overexposed to cash. you need to move on the risk curve. >> aren't these things in flux? >> no. we are talking about the fed beginning lift-off. we are also recognizing we remain in a global environment of financial repression. the rest of the world is cutting rates, getting more accommodative. we've got qe in full force in japan and the euro zone. globally that means being on the risk curve but doing it in a

prudent fashion. focusing on dividends. finding those pockets of opportunity, recognizing that valuations are to a certain degree stretched. >> after today's inflation data we saw a move in the fed funds futures where they price in when interest rates are happening. 45% chance in september. 100% chance of a quarter point rate hike in december. does that sound like the right timing to you? >> that sounds better than where fed funds futures were. we were worried about a mismatch between where we thought the fed was going to move and where we thought market participants thought the fed was going to move. we are getting closer together. don't write off july. we think it will happen some time before the fourth quarter. >> janet yellen is speaking on rhode island. they have large unemployment there presumably she'll say something about the unemployment situation. there is a suggestion from art cashin that she may use this afternoon to test the market. she may say something hawkish

because they live in fear of rates rising quite rapidly. your analysis seems to be don't worry about that. rates are not going to rise rapidly. you are nailing your colors to the mast on this? >> what we are saying is the path is far more important than the lift-off date and we think the path will be very different from previous rate hike paths. that's what we need to focus object. she could certainly move markets. we've seen that in the past. we saw ben bernanke move our markets with comments. the idea is overall this is an environment relatively accommodative. >> if there is a bubble in the bond market it won't burst? >> we are worried about the bond market. absolutely. we think investors are expose exposed there. they need to dial that down and move to more appropriate areas. even within bonds. moving out of core bonds. it's not that we are not worried about a bubble in the bond market, but we think investors need to focus on the bigger

picture. >> good to see you. christina hooper from allianz global investors. why smart phones with large screens could be contributing to a big surge in e-commerce purchases. brand-new exclusive data after the break.lt so heavy at the end of the day. they used to get really tired. until i started gellin'. i got dr. scholl's massaging gel insoles. when they're in my shoes my feet and legs feel less tired. it's like walking on a wave dr. scholl's massaging gel insoles, i'm a believer!

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good morning, everyone. i'm sue herera. here is your cnbc news update. a suspect in the slaying of a family and its house keeper in washington, d.c. has been arrested. daron dylon wint was cost last night in east washington. they made a break in the case linking wint to a pizza crust found in the home. >> walmart encouraging suppliers to not use antibiotics in animals. they do not want to use them to fatten the animals up. >> irish voters heading to the polls to vote whether to legalize same-sex marriage. the referendum is expected to be approved. results are expected tomorrow. >> a former korean air executive walked free after nearly five months in prison after an appeals court suspended her ten-month sentence. she was sentenced for her outburst after being served nuts

during a flight. she is the daughter of the korean air chairman. that is your cnbc news update. back to "squawk." new data just released to cnbc from comscore revealing digital commerce jumped nearly 14% in the first quarter led by amazon which accounted for almost 20% of all e-commerce dollars. joining us is comscore's co-founder. good to see you again. >> thank you. >> we've just come off a week where we talked about sluggish retail sales, mixed retail earnings. digital spending continues to shine. what have you found? >> sales online were up a total of 14%. the desktop component was up 9%. then believe it or not, e-commerce rocketed by 50%. >> mobile you are saying? >> it's not unusual following the holidays. we see there is a lot of buying of new devices.

the larger screen phones contribute to it. overall, the growth rate for digital commerce was far higher than what was seen in total for consumer discretionary spending which was only up 2%. >> also notable because we are seeing an increasingly intense battle between some of the big online giants for e-commerce. google getting into the buy button, going up against amazon. does google have a shot here? >> amazon is so far ahead. if you take amazon and ebay together, they old about 1/3 of the online commerce market. i think it's possible for other players to carve out a piece for themselves. it's difficult to see how amazon is not going to retain its dominance. >> let's focus on those figures. that is amazing. if you add amazon and ebay together, it is 1/3 of all online sales. no one else is close. >> exactly. >> if google can do this with the buy buttons and host the

retailers' sites and process the payments and succeed in doing that you are going to rapidly increase or accelerate the amount of sales in this country that go through e-commerce. it's only at 14%. if they did their job well and were as good as amazon, you could massively increase the amount of deliveries around this country and change the way we live our lives. >> i don't think i would disagree that google is going to be an important player here. i still look at amazon with the infrastructure that it's built out is pretty amazing. they are rolling out know the grocery delivery systems with same-day delivery. i think they got it running in six cities. the selection they have also is really pretty impressive. they do a nice job carrying products that logistically are handled by third parties. >> that is a really important point. growth in e commerce is not necessarily about the technology you are using. it's about your delivery

mechanism. >> absolutely. >> that is what i would expect a guy like you to say. >> if you look at people's willingness to sit and wait for the product, depending on the product, can be rather impatient. it's not easy to build out that infrastructure. i think that's one of the reasons why the supermarket industry has been slow to embrace digital commerce. they are running a net profit margins about 2%. i would think the last thing they want to worry about are all the costs building up an infrastructure which amazon has. >> shift to mobile is key for advertisers, as well. we've seen it with facebook alibaba, china continues to add mobile much more quickly than desktop. what are the fail rights where people not buy versus a desktop? >> there is an issue of screen size. it's clear if you look at what consumers are saying the more

expensive the product they are buying, the more research having to do with more price comparison. it's not easy to have multiple screens open, maybe impossible on a phone. that's why we've seen the larger screen phones have had an impact on e-commerce and boost it a little. m-commerce is about 15% of all digital commerce. the desktop is holding 85. >> is it going to keep going? >> no question. i still think there is enough high price point buying that is going to be done that is going to be a long while before the desktop is threatened. >> we had a debate about the accuracy and efficacy the way the government collects data. does the government need to rethink the way it calculates retail sales gyp the fact you are seeing this tremendous growth and now it's 15% of all retail sales? >> i'm not sure if there is a need to redo the computation of

sales. there's been some debate about whether inflation is being measured correctly and whether the basket approach being used today. one of the things holding down prices is the internet. it's making it too easy for consumers to find the lowest price. i have to believe that's holding down overall spending. >> in the next hour we'll talk about a new ipad that is 12 inches wide where you can have all the screens open at once. >> there you go. >> we'll see how it impacts the data. thank you for joining us. >> thank you. >> comscore's co-founder. facebook's been moving into its new design building, but hasn't allowed cameras in until now. julia boarston was there for an exclusive look. over to you. >> when zuckerberg designed the

new building he wanted the collaborations that happen more easily at smaller companies. the result? the largest open floor plan in the world. 430,000 square feet fitting 2 now 800 employees and decorated by facebooks' artist in residence program. zuckerberg usually sits right in the middle. >> despite the very open floor plan and large size it's broken out into little neighborhoods and communities with walkways that go down each side and through and around and throughout. so you can't walk through the space without bumping into people. >> what differentiates the building is a nine acre green roof with 1/2 mile walking loop 400 full grown trees plus white boards and wi-fi. the native plants are designed to insulate the building to cut down heating and cooling costs. with a competitive hiring market, the company's investment in its campus and ability to work outside demonstrate that it

prioritizes its employees. facebook won't say just how much the building cost but says it came in under budget and faster than expected. it was built in 18 months. back to you. >> julia boorstin that was cool. got a look inside the new facebook. over to dom chou. >> dow down 15. quest diagnostic shares up 11%. shares are halted because they triggered a circuit breaker. they have risen sharply enough to give people a pause to catch up what's going on. there is no news yet. there is chatter floating around. we want to point out this is on heavy volume, about 1.7 million shares traded so far on average over the last 30 days about 1.4 million trade all day. we are seeing a spike in action. it's a volatility trading pause. quest diagnostics is up 11%. we'll see what happens when it reopens. want you to keep an eye on it as

we head towards the mid morning. >> thank you very much. up next on the program, a different quest. the consumer power of the low carb protein bar. from southern california the co-founder of quest nutrition named as the second growing fastest growing private company in this country.

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healthy snacks are in. look no further than the phenomenal growth in quest nutrition famed for its protein bar which "inc" magazine ranked them as the second fastest growing private company in this country last year. the co-founder and president of quest nutrition is with us. welcome to the show. >> thank you for having me. >> thank you for bring snacks. >> we acknowledged people eat for pleasure not sustenance. at the end of the day if we are going to end global obesity, you need to make food people want to eat without all the junk and sugar. >> we've been talking to you coming on for around six months. the rebound is the way in which

my experience in manhattan, the word of mouth suddenly exploded for people to go to the gym or young men in particular to eat these quest bars partly because the sugar content is so low. a lot of products have protein of 20 grams or almost 20 grams, but very few have the sugar. >> you know your protein bars. >> he does. >> this is why you are getting explosive growth. >> there are two reasons why we've grown as quickly as we have. one, we've been able to make a protein bar with high protein that tastes amazing, but doesn't use sugar and we market in a completely different way. as seth goden noted, we are in a connection economy. we don't advertise traditional. it's social value ads. we are not trying to get you to buy our bars we are trying to make your life better. telling people to eat less and exercise more will not end the problem. >> it's a 5,000 square foot studio you've got outside san francisco. >> you are trying to whittle me down. it's 10,000 square feet.

>> you are producing videos on the internet that kids are watching that you can microwave a bar in 12 seconds. >> we've got shows on cooking healthy. shows on the entrepreneurial spirit that made this company possible. we are doing something with a lot of youtube celebrities from blog a lot. amazing body image stuff. amazing top ten lists they are doing. >> i get protein bars but protein chips? why did you name it that? do people really go for that? >> great question why we named it that. our goal is to take back the entire food supply. when you look at the slide towards ill health it is pandemic. it comes down to the ingredients versus the type of food. we want to show people a potato chip can be good for you and still really pleasurable. >> here is my question with the growth you are seeing. are you fielding calls from some

of the big food companies? they are not growing like you are growing. they are trying to get on this health and wellness craze. it's been slow going. we saw the scoop up of annie's. how many calls do you get? >> we have a phone that would ring off the hook if we let it. it's flattering and a sign of change. we believe we are the right stewards of the business. we are not interested in selling. it's about finding that authentic relationship. >> i don't know how you get distribution when you're growing fast but still quite small. you must be impeding the growth of the business by not partnering with somebody who has economies to scale. >> we did worry about that in the beginning. in our first three years we had 50% growth. we've done it all bootstrapping. we are students in all things. we take advice wherever we can. we aligned ourselves with

effective business advisors. so far, so good. we've been able to keep up with the growth. >> looks like protein is what you are playing into here and the bars. what is the next craze? gluten-free has been huge. what is working with consumers right now? >> one thing is metabolic reality is all we care about. there will be a lot of trends. you'll see organic going, natural keep going. at the end of the day, is it actually good for you? we don't worry about trends so much. we are heavily involved with people like the nutritional science initiative. they are looking at performing not correlative studies but im empirical data on nutrition. >> thank you. is apple working on a reboot of the ipad? turns out nine to five says yes. the senior editor of 9to5mac will join us a little later.

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exchange. >> i'd like 0 welcome my guest, mark skowsen. thanks for taking the time. >> my pleasure. >> listen, you have many readers, you like to talk about strategy in the market. my first question to you a rather generic one. u.s. economy slowing with reference to the pop in the second and third quarter last year? or is it not, in your opinion? >> on scales it has definitely slowed. that's why the federal reserve is pumping more money into the system and why they're postponing raising the interest rates. you've talked a lot about how the government data may be inaccurate. but you've got to remember that data government information is always inaccurate. the unemployment rate leaves out the discouraged workers. the cpi leaves out the income tax. it's not a cost of living index. gdp leaves out most b 2 b activity. but the point is where is the direction? we can, government data is fine

as long as it's consistently inaccurate. that's what we're looking for. >> as long as it's consistently inaccurate. okay. now let's look at this another way. many traders on this floor understand the timeline of today. meaning we had cpi data up .1, up .3 on core. it was hotter on line urp .2, the same up .3 on core. my question to you directly is futures closed at 1:00 eastern right around the time janet yellen speaks an hour later for the cash markets, the computers stay open until 4:15. but they're going to be thin as a 20-year-old pancake. my question to you is do you think janet yellen with no q&a will mention today's data meaning and being that the fed is data-dependant? do you think she'll mention it today? >> they're all inflation-driven. they want to increase the inflation rate. and they're having a hard time doing it. the cpi is flat. the evidence is over the last few months that there's really

very little core inflation is up a little bit. but it's not the 2% rate that they need to raise rates. so she should mention it. the fed is doing everything it can to get inflation back up. it's not working so far, so in my opinion, that means that we are still in the golden age of investing, and that stocks and bonds are the place to be because they're not going to be raising rates any time soon. that's the bottom line. >> so then what do we tell mr. market, mark when i look at the fact that oil rates are up especially from yesterday's close. and while the rates went up the yield curve flattened? does that mean that the market thinks that something is brewing with regard to raising rates sooner rather than later? your final comment, mark. >> look rick that's been happening, you go back to last year, there have been many times where interest rates have started to move up. the short-term rate is still flat, though. and the long-term rates, yes,

those rates are going up. but will it last? we don't really know. and if it does it's only because the underlying inflation as measured by the cpi, is rising and there's no evidence of that yet. >> mark thank you. i'm not sure i totally agree, but that's what it's all about, a little discourse, i hope you have a very safe and healthy memorial day along with the rest of the country. sarah, back to you. >> and same to you, rick santelli in chicago. speaking of the economy, we're going to talk houseing. we seen big price growth in some areas. which ones are the most over-valued? diana olich is live in washington with that chunk of the story. is it new york diana? >> no it's not, sarah, it's not even california. home prices are pushing peak levels again, this time doing it without the help of easy credit. increasing numb of local markets are considered overvalued. that means that prices are pushing past what is considered sustainable, based on median

income. now tight supply and strong demand pushed the median price of a home sold in april to $219,400 up 9% from a year ago. that's still below the 2006 peak. the realtor's chief economist said he expects prices to approach or reach that peak this year. certain markets are already considered overvalued. seven out of the top 100 metropolitan u.s. housing markets. this is according to a new study by core logic. and that is up from just four last fall. four out of the seven are in texas. austin houston, dallas and san antonio. these markets did not surge and crash during the last housing boom. they were fuelled by oil and gas, which pushed both population and prices. price there is are at historic highs, dallas nearly 15% higher than the peak in 2007. austin prices nearly 39% above what core logic which did the survey considers sustainable. also on the overvalued list

charleston south carolina. miami and here in good old washington, d.c. what's interesting is that home values in these three markets are still well below their peaks of '07. miami, 28% below peak. but miami something built by an abundance of foreign cash in charleston, a very strong economy and job growth. the folks at core logic say overvalued does not mean necessarily unhealthy or imply a bust any time soon. it's actually more indicative of the wealth gap in our nation. sarah? >> interesting story on that inequality. diane olick, thank you very much for breaking down home prices. let's send it over to jon fortt inside the new york stock exchange with a look at more. >> we're going to talk about hp earnings who manages expectations better than meg whitman? >> apple wants local tv programming for its upcoming product. and we've got uber another week another $1 billion uber is looking for, this time as a

credit facility and the ceo of intuit in an cnbc exclusive coming up on "squawk alley."

good morning, it's 8:00 at

hp kwaerksheadquarters and 1:00 a.m. here at cnbc headquarters on wall street and "squawk alley" is live. ♪ ♪ ♪ good friday morning, carl quintanilla is off today, joining me is roger lee partner at battery ventures and simon hobbs is here for the hour and with us as always is jon fortt. guys, good friday to all of you. let's kick it off with hp. shares are sharply higher today, after profit topped analysts' estimates. the company also saying it expects lower