but it's between those gangs. who cares about those. it was a weird answer to. >> it was very controversial. >> >> that conversation and so many more. make sure you join us tomorrow because right now, squawk on the street is next. >> good wednesday morning. welcome to squawk on the street. the market is getting it from all sides today. greece on the verge of default. inflation has bottomed. adp in line. a trade gap for april has some thinking q 2 might not be so bad. 10 year right around 228 229. that's almost a six month high.

apple's tim cook takes a not to vailed swipe at facebook and twitter. >> a lot to chew on. a buy back at wendy's. more frustration from mcdonald's and the ceo on mad money talking value. >> a range of comments from lydia meeting and shareholder meeting including what he called tv nowhere. first up ecb president holding a news conference in frankfort. he's sticking with the policy. he says full imp he menation is necessary to aid a recovery in euro zone. he calls for a strong agreement that would keep greece in the euro zone. we know the dead line is rapidly approach approaching. he did say, guys inflation has bottomed earlier this year than in europe. it's not going to go up a lot.

>> and the dollar will peak in. i see that the dollar has gotten weaker in the last 15 minutes. this is a good sign. yesterday when we saw the big rally from the bottom led by the euro it was not coincident when the euro got stronger the market got stronger. we're in a stock market where if the euro gets higher we go stronger. it's not about interest rates. we would go lower. watch how they trade when the rates go up. s&p. we like what we see. we don't want the endless bashing of our companies. think about it. did you watch the pvh yesterday? that stock was up 8 bucks. did you know the numbers were down because of europe?

they had revenued decline at 4%. why? because people are sensing that the dollar is peaking and the euro is making a come back. it's a contrary view. i'm willing to stake it just like i was willing to stake out the argument. i'm not sure you're right on the dollar either. >> michelle is back at hq monitoring comments. michelle. >> hey there, carl. we're asking about the resent debates and he was. he went through why it's possible it happened. maybe it's improved inpolice station expectations and economic expectations and could be technical reasons that at one point, of course there was a one directional investment. he put it everybody was long and

it was a massive unwinding that led to volatility. he wouldn't speculate on why or the technical reasons or fundamental reasons but he did say the monetary policy stance of the ecb will not change and also everyone should get use to more volatility period. back to you. >> michelle thank you for that. i imagine we'll speak again relatively shortly. meantime stakes out here adp, 201 was in line. it was the first rise since november and then the trade gap much narrower than expected. you couple that with auto sales, maybe the rebound is a little stronger. >> that's where we're going to see the 220 and 230. those numbers are difficult. there's a sense overall the port strike is winding down. i know these things seem oblivious to our viewers. seeing that kind of blog jam which is like the long island express jam to use a visceral

example which is at the end of the island for those who don't have google maps. there was a huge amount of commerce that was delayed by winter. there is, i'm starting to see some may numbers that surprised me in autos. look can we go by vera bradley, the hand bag accompany? the fed has to cut again. if we go by housing there's a chance we have to hear about fed tightening. paychecks on the other hand gave us a different reading. this is the same part of the economy that makes me feel like autos have struggled. autos are back to 2005. they get 20 more million americans. >> we got 20 million in 10 years. >> i got the numbers. 296 million people in august of 2005 when we last had the number of 17.7. now we have 24 million people additional. isn't it, by the way, the autos, wells fargo which was the number

one, number two cut back in march. everyone felt that was going to be the peak in autos. oh contrary. even better. >> not to mention the average price of an auto 33,300. that's a 4% rise and a lot of it is the high margin suv. >> yes and there's the silverado silverado. everyone but the f-150. i want to point out when you go over the numbers it's incredible. there's a sub prime bubble. other than allie financial which has produced many sub prime loans, michael jackson who was fantastic this morning on squawk, he said $3.5 trillion in auto loans have outstanding balances. i know it sounds like a lot but in relation to what houses were people walked away from their houses before they walked away to their car. you need a car to go to work but you can stay in your house and bet that the regulars are fine.

>> that's true. >> although there are two trends. the sharing economy and renting that both never seen quiet is high. certainly not based on the percentage. >> the shared economy not mentioning enough. this is finding all sorts of ways to make money. people who work for post mates, these are people who work four hours a day in order to make ends meet. that's happening too. they have more income. they want to work at chipotle too. 19 year old manager on mad money two weeks ago $100,000 accompany car, stock options and gets $10,000 bonus. been in the projects raised by sister outside of baltimore. this is what can happen in this country if you get these jobs. we're going to talk about mcdonald's and franchising soon. there's a lot of people making

money we didn't think would make money. people going to starbucks and going to college at the same time. >> we'll see what the jobs number is on friday. by the way, tweet us your predictions for may nonfund payrolls. the lucky winner receives a polo shirt autographed by the squawk on the street gang. best of luck. somebody did write in and say can i get a polo shirt that's not autographed. >> that's very interesting. >> yeah i'll give awe an underarmour shirt. how's that? >> sorry. >> you know i've seen people wearing autographed shirts in east hampton, they're cool. >> i didn't go to east hampton. didn't it sound good. >> tim cook taking shots at a couple of the silicon valley neighbors. he's not happy about how big tech companies are using your personal information. he delivered a speech to the

electron ek -- electronic. they've built businesses by localing customers personal information. they're gobbling up everything they can learn about you and trying to mono tiez it. we think it's wrong. it's not the kind of accompany apple wants to be. he doesn't mention companies by name but reports think he's taking shots at places like going lt google. >> it's not hard to figure out who he's talking about. >> how about he pitches to the targets in walmart saying he will not take your data using apple pay. >> we know they're afraid that apple is going to use their data. this is tim cook not taking aim at his competitors but saying listen guys, you should adopt apple pay. we're not going to use your

data. the data is important. the ability you have there regardless to safe guard privacy to a certain extent. it's the deal you enter with going google. >> nsa backs away and facebook comes in. >> yes. >> now, when you take a picture. >> although the encryption on the iphone is certainly enraged law enforcement. >> you're right. did you see the blog post about instagram and the tools they're adding? >> yes. >> there's a sense coming this is the mono tiezing moment on instagram instagram. finally. >> i was out to dinner last time with my daughter. taking pictures of our vegetarian meal.

now, will instagram immediately, will facebook have an add for whole foods or costco next to us for we have the great organic and natural. i don't know. >> what facebook gives an advertiser is his gran ewe lairty will never provide. >> why hasn't the percentage going towards global going toward facebook last night i got on mad money, they have things called grand slams. you can go on youtube and watch 50 million views. there's one about boofs and seats and another about bacon conspiracy and i asked the ceo, miss miller is there any

tangible you know watch the video and then go to dennys? he said no. it was like subconscious. you don't believe they can do this? you don't think the add load can go heavy? one time on one of the calls he said he would never compromise the quality of add. he's got something we don't regard as an advertising compromise. i don't know. i think about how i always walk out because of the point after.

there's such a shoe in and they try to move the point after back. maybe that brings him a huge amount of revenue. >> i don't know about that. >> fantasy football does. people watch the fourth quarter. >> data rich environment. >> when it comes to facebook you do know. >> no not really. you know what i did the other day, i went to amazon and bought a movie and they said there's four other movies people bought. i bought every one of them. they sound fabulous. it wasn't that bad. wow, the algorithm in my brain. >> we're going to get to mcdonald's news that jim mentions. also wendy's with a massive buy back on the way. also media type john malone. later on 16 months of inflow.

the star bond fund manager is going to offer his take on the markets when he talks to rick later on today. a lot more squawk on the street from post nine in a minute. ♪ ♪ ♪ (singing)

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wendy's announcing plans to buy back next year. including 211 million from wendy's largest shaur holder. as steve's turn around initiatives are requiring them to invest more franchise is already struggling from heavy debt from prior restaurant upgrades. wendy's, that's 30% of the market cap going bye bye. >> it's a fairly large buy back. they can do it. they've gone to the late model. trying really it's not hard control but at 25% they're largely at a certain extent controlled the accompany. they want them to move and they are moving to this franchise model. they believe that's going to contribute great cash flow and growth. they did the extraordinarily low

rates hence the ability to capture the cash they can use to buy back stock. they are transit lowering the state. may be due to tax reasons there. if you pay too much back it might be treated as a dividend the record tax reasons. they are lowering their stake which is worth noting as well. >> yeah, i totally, i love the model. i love what they done. the stores look terrific. the specials are great. the remodelling has worked out. it continues to work for all the companies some say they're paying too much. wendy's is there's a fantastic chart today in the wall street journal about whose got game in the retail restaurant business. of course i mean the stars is starbucks which is really rather amazing.

wendy's is in there and mctoblds still on the decline. >> you had to prioritize wendy's, jack, youngum mcdonald's. who leads? >> the yum margins is increasing. i'm going to put jack first. burger king is hard to beat because you have a mixture of another accompany in there. i think jack is pulling away in part because they have good value pricing. wendy's is doing a good job. mcdonald's, one of the things mr. miller from dennys was explaining to me yesterday and i said who are your customers? >> he said the franchisees. what is that? >> it's like a network and their affiliates. you got to keep them happy if you want your presence to be nationwide. >> so right.

i look at that and say mcdonald's still not there. easterbrook is trying many things. he did that in the international turn around. starbucks pulling away from the entire group. this is a stick. mcdonald's got away from us. i don't know what it is. frankly, i really don't know why you go to mcdonald's when i asked dennys i think they're going less than mcdonald's. >> keep an eye on those market caps. mcdonald's and starbucks, i think it will be an interesting day if they ever cross. one theme here activist want companies to lever up to a certain extent. that has been the case at weapon wendy's. we're seeing it more and more. a willingness to take on the companies and to use some of that to return capital shareholders. >> very good point. you mentioned the cash flows there. >> yeah exactly.

that's the question. >> we'll get cramer's mad dash and count down to the opening bell and keep our eye on the euro which is teetering around interesting levels and that could have a big impact on stocks. we'll be right back. like a custom screener on your desktop, that updates to all your devices. and you can share it with one click. wow. how do you find the time to do all this? easy. we combined every birthday and holiday into one celebration. (different holidays being shouted) back to work, guys! i love this times of year. for all the confidence you need. td ameritrade. you got this.

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to what it needs to become. time for a mad dash. it's a dash. i don't want you to tear an anything for the dash. i'm going to keep ulta as the key to the market on the retail. i'm making ambrella the top.

they reported a number stunning last night. on the conference goal which was a work of brilliance i'm surprised it wasn't a burn stephen that couldn't get lenny to write the score for this write the music. it was really good. you ought to go back. the accompany to go forward, we'll do favors. this accompany is not only talking about how they first, not how great surveillance monitors are doing at home which you better get but david drones. we've got the get out of the idea that drones are some sort of fantasy land. drones are how you expect pipe. drones are how you find oil. drones are how you move a to b. drones are how we get the bad guys. >> drones are how you prevail

your society. it's going to be flying all over the place. anyway, everybody here j.p. morgan bumps go pro on this. everyone's doing the read through amberella and go pro. >> you mentioned it last week. >> it's i'm taking tractor supply out of the notion that's the key to the market andambarella. i'm not saying buy it. do i think it's right. i thought it was right right here. this is some sort of thing here. >> we got to go. >> we do? i saw people blow through a commercial at 5:00 a.m. >> you can't blow through the opening bell. bad things happen. we have the opening bell coming up after this.

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:you're watching cnbc squawk on the street live from the financial capitol of the world. ecb holding rates unchanged. the ten year here is at 232. that's the high of the year just about. then the german we've hit basis points have been a while. >> two things that didn't make sense. i think the interest rates should have been higher. this is fantastic news for the banks. watch that one sore. this keeps going on. use that as a generic bank. jpmorgan cutting out voice mail. >> 15 bucks. i'm not sure that's a productivity announcement. >> where does it go to? who uses voice mail anymore? everybody gets called on their phone now. >> this is the kind of thing. this next to his pay, his pay if he cut his pay, by the way, that

would be another savings. >> that would add up to the voice mail and more. >> as you saw, he's now worth, he's joined the b club. 1.1 billion, the value. >> that's a lot of voice mail. >> there's a look at the opening bell and is athe s&p. our jeff highlighting the alc summit at the nyc today. over at the nasdaq pharmaceutical accompany developing drugs for the central nervous system diseases. a lot of analyst calls today. expedia, price line initiates favoring expedia over price line. >> yeah. trip adviser, one of my favorite sites very important to people in the travel and leisure business. the strong dollar hurt the price line more than the others. people aren't coming here.

it's too expensive. >> yeah. >> they're not going to macys as much. maybe that's why macys can become a real-estate place. >> that's not going to happen. listen, we talked a lot about macys. yesterday stock was up on a report. something we talked about and pressing the idea and realizing the value. the cfo has voiced any number of times many reasons why they don't feel it would be the right strategy to pursue. >> she's one of the best cfos she's not a light weight. she's a heavy weight. >> this is a accompany not considered to be not well run, i'm. >> she's considered to be van guard of localization. terry has been far ahead of even else. have you talk to target's he says i want to do more localization. that's exactly what they did

ahead i think it's not as strong because it's a strong dollar ch. >> speaking of retail. amazon gets price target bumped over to piper. takes it from 520 to 475. that's going to be a nice wener today. >> there you go. netflix, amazon these are always on the move. ever since they said they're going to breakout the businesses they know web services from your piece. >> we didn't spend that much time on it. to your point the finalest break it out. this stock has had an incredible move. 40%. >> they decided to make money. it could be incredible right. >> i don't think you can bank on that. they always like to show it to you and then they hold it up and take it away. >> a lot of people are saying that amazon. that other companies can amazon amazon and going to a brick and mortar business.

in the end, amazon is a great website. in order nordstrom says they have to spend $3 billion on a website to keep up with the customer service of amazon. >> not that far from alibaba at this point. >> putting all these different players together. they go to the same day, go to drone. holly holy cow. you order it and it's there. >> i ordered the movie about how they took berlin and they said you got to go for the stall and grab. they could stream it to me. >> they could stream it to you. >> stream it right to my head. i don't have to watch it. they can put it in my head. >> i think it would be

streaming. >> streaming. >> yeah. >> over the top, david. >> streaming, son. >> delta rebounding from the miserable day yesterday where the guidance is no good. as much as we talk about the transit ports, utilities are still below correction. >> utilities and some of the real-estate investment trusts in the health care. it's been all about that. that's the ten years. i just think that when you look at what the utilities are doing. some of them are doing such great things. they just keep doing great. they're going to be one of the two, well, major three exporters. it doesn't matter. they're trapped. they're trapped like rats as they said in that great movie stanley cooper movie. kurt douglas by the way watches our show. thank you for your support.

really amazing. watches cnbc and really loves. thank you, kurt. >> euro at a two week high. we are above the year to date close on the ten year. >> we are so close to a short squeeze developing in this euro. you can feel the pain of many of these hedge funds that made the bet. you feel the pain? >> i do. >> they didn't have a good month, at least long short equity hedge funds did. a lot of people feel i can that view is a parity with the deep. >> the question i have is 232 or 234 on the ten year are we starting to see something? >> did you see mortgage apps today? down 76. as people say forget it. >> i know. we got to be careful. housing angle we're still on the building half the homes we were building a few weeks ago. i think it's all something to

watch. i think this market dances to the euro, not. that's because we can see a reversal of earnings later on in the year. some of these companies have really had to cut their apple. >> hewitt pack ard amongst them. i would remind you they're working with a may 1st dollar index number in terms of their hedges. >> you can't always assume. >> i forget where that was. some of these companies have hedges and where things are. there's a strong rebound. if the dollar gets weaker in the second half of the year yeah, wow. you got to base it off a certain place for a lot of these companies. >> what would happen with technology if the dollar got weaker? coca-cola if you want to go for a consumer package, go pepsi, not coca-cola. why pepsi and not coke? coke is hedged against the euro

until 2017. it's the game to win. >> really quickly, linked inin bought more than 3.5%. remember that resent guidance was no good. they think it's fixable and short term. >> the quarter, if you went over the conference call i could not figure out for the life of me they have this different division. they explain what was going on. it's going to be it won't be a problem and the stocks go to 300. the quarter was just read like a really bad fifrth grade student essay. >> it's really hard. that thing was horrible. >> court kneeny in.

>> just hanging on to gains hanging on here. we did get the adp private sector report this morning. $201,000. slightly better forecasting foreshadowing for what we may or may not see. a strong report is a good thing or bad thing depending on what the fed decides to do with the data. taking a look at the currencies, we've been talking about the ecb this morning. hearing from mario from the ecb this morning saying he'll continue to leave rates unchanged. he's pledging to stick with the policy and adding the market should get use to periods of high volatility.

germany, france, italy, also all up higher but less than a percent at this point. let's start with wendy's announcing a $1.4 billion by back. their investors liking that pushing shares up about 5%. groupon announcing their buy back program. also announcing leaving the accompany and naming a new ceo. more executive changes there for groupon. take a look at vera bradley. makes accessories that are floral, quilted looking. earnings very, very bad. missing the top and bottom line. last quarter of vera bradley said our product isn't reds resinating with customers. we got another number of retail movers going higher or lower

today depending on the news. he's optimistic on revenue growth. also amazon fresh. they like what's going on. he calls e-commerce in his infancy. cutting at golden sacks. the price target lower there after a disappointing herbings. last but not least g-3 apparel group. this is a distributer of fashion license beating the top and bottom line raising guidance up a 7% today. it's a good point to point them

out. back to you, carl. >> thanks so much. we'll see you soon courtny reagan. good day to watch bonds and rick. hey rick. >> you know if you're a fixed income or fx trader it doesn't get more volatile or fascinating than this as the experiment by central bankers remains one of the big driving forces in uncertainty. there's no uncertainty about the rates. zoom, zoom zoom. this is really interesting. open it up year to date. notice the left side and the right side are exactly the same. this is one of the few times where 166 we settled last year we've been higher yield. the tens of course are high yield and the 30s are higher yield. buckle up potentially. now, let's look at a ten year now. you can see we're up 234 briefly and i know we've had 230 voyages. i only look at closing yields late section cats market.

last time we settled here 1119. no, your eyes aren't wrong. yes, we traded up to 83 basis points. remember the data last chart for tens. november 19th, week before thanksgiving. these markets are all linked at the hip on big moves. let's look at foreign exchange. euro verses the dollar. talk about a freeway of volatility. staying up here and definitely anything above 110 keeps most traders on the side and if we open up to the beginning of may you can clearly see we aren't at our best levels but not our worst levels on the euro. >> when we come back with john malone is calling tv nowhere. rick has a live interview with the ceo.

dow, man has it been all over the place. up 51 points and back in a moment.

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media chairman taking aim at cable tvs netflix. here's what he said yesterday. >> we use to call it tv everywhere. i was quiet a critic of the u.s. cable industry looking from overseas. i said well, tv everywhere is so far tv nowhere. that allowed netflix and hulu and so on to fill in what was a vacuum that should have been filled by the distributers. >> he's been a frequent critic of the ability or lack of ability of cable in these areas to allow the likes of a netflix to gain. it's more than a foothold now. there's no pushing back time here or perhaps pushing back against netflix, a accompany with enormous amount of sub kriebers here and overseas. when he talked about looking

overseas he talked about liberty global which he still controls and runs and has been a consolidateor in that industry in europe and a lot of different things come up about that name as well. here netflix is here to stay. hulu and others are fast and furious now whether apple or sony or amazon they will just keep coming from dish. he would have loved to have seen cable consolidate all of that and come up with an operating system that could been shared and filled the void before netflix did. >> i thought that the upgrades today, the commentary that's going to matter with direct tv that's going to be more of a factor. netflix is going to introduce some children's movies. >> i think four new series. four new animated series for netflix. >> then you have credits initiating cbs, comcast, disney fox. the only reason to own them is

context. it's because the pipes themselves are going to be i relative. >> i look at facebook today which is finally breaking out and i think you better come up with something that makes it so the advertisers are a little more exciting. the facebook, i guess they're going to be able to monotize. >> you watch a picture and press and they bring you that dish from. >> amazon is working on it. >> interest. >> yeah. nordstrom something by. >> it's incredible. i know that brian cornell was saying on mad money, you get these guys and they stay people love to shop. 30 million people still shop at tarngt. how many people shop at walmart.

>> lots of people do. there is still something to the physical act i suppose. >> you leekike to get bargain. >> i had a pair of pants, 32 size waste denim. >> you're 32. >> dude people don't know how hard you work out. >> at 4:00 a.m. thank you, jim for coming to the house at 5:04. i know that's not fun for him. ? the dow rebounding a bit up 61. don't go too far.

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time now for cramer and stock trading. >> rbc comes out and loves cisco.

euro comes out. cisco wasn't up with the guidance last quarter. chuck robins reminded me that's the new ceo of cisco. he's a tmp from way back. >> tmp being? >> take no prisoners. >> i res my case. >> a court is observed. what's on mad tonight? >> i've got to find out based on what they do for a living, obviously, they don't. they trade. you know i'm going to well let's just say i don't want to reveal. i think people will like and i'm trying to throw out everything i can at you. it's a really big shoot for those of us who are actually old enough to remember. >> yes, there's some discussion this morning we might be getting

some adjustments to these gdp estimates maybe to the upside and what the auto sales did even though april consumption wasn't that high. >> i think it would make sense even if you think wouldn't the euro be weaker verses the dollar. the euro is going stronger. maybe there's a confluence. people are talking about positive confluence of stronger economy and the united states. the euro may be going higher. i think the gdp is stronger. i'm a believer in the economy. it's a lot. it explains why the midwest has been so strong. be aware they're building 500,000 new cars in mexico starting next year and a lot of them, i know you want to know where they're being made. >> it's no longer just porter.

>> sounds like you need to take this show on the road. if you know what i mean. >> yes, i do. and always welcome. >> jim cramer. >> i don't think sha needs to write. >> that's okay. the french one time did metal in the affairs. >> i was really bad at languages, i tell you. >> when we come back breaking news on ism services and bargain hunting when we come right back. (dad) i wear a dozen different hats doing small gigs, side gigs...gig gigs. quickbooks self-employed helps me get ready for tax time. to separate expenses, i just swipe. it's the one hat i don't mind wearing. (passenger) thank you! i work for me. and so does quickbooks. it estimates my taxes, so i know how

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good wednesday morning. welcome back to squawk on the street. the new york stock exchange there's a lot of news today. a lot of it being driven by rates, currencies equities really an afterthought today as we keep our eye on the euro. oil will be one to watch as we get inventories in 30 minutes. >> the next 60 minutes, our road map. airlines getting a boost for the transit port sector this week. fifa president announcing he will resign. what does the on going

corruption scandal of the held of soccer mean for the game. colby jones, a former player for team u.s.a. joins to play in. >> causing a revival in the demand for older real-estate. we have more on the story coming up later in the our. >> ism service, let's get to rick santelli. rick. >> 55.7. that's definitely not anywhere near the 57 we're looking for and that follows an unrevised 57.8. so last time we're down at these levels, 55.7. i'm having to go way back actually. looks to me around april of last year. darn close to a year. this is very significant to pay attention. the service sector is the most vibrant part of the economy based on many data points. see the crowd behind me that's options. volatility is often a misused word. today there is options

volatility in that. carl and the gang back to you. >> yeah rick 25 basis point moves higher in the ten year. let's get more reaction to what's going on with steve. >> steve. >> some of the internals are okay with this. obviously, the overall index is a disappoint. . the business activity index 59.5. a high level down from 61. new orders index still a high level and the employment index at 55.3. peter tells me if it's a change from what it was. i've got it here. hold on. the employment index down a touch from 56.7. all of them well above the 50 level and the growth in those levels there. a bit of a disappointment showing not as much activity in the service sector. this morning we got adp, kind of the same story there. relatively high level. 201,000 jobs created off a 2015

estimate. that would leave the payroll estimate unchanged at 225. i don't think anybody's going to adjust that. coming in better than expected. that's going to flatter second quarter growth. we'll give you an update soon as we get the average of the economist weighed in. i've seen estimates plus two tengtss. saying trade is on force to make a positive contribution to second quarter gdp growth. over in europe you saw pretty outside response on the euro and the german boone and interest rates over there. we think they were mostly about his positive comments when it comes to inflation. >> supported by the expected economic recovery and the consumption in higher prices in the years ahead, inflation rates

are expected to pick up further here in 2016 and 2017. >> also raise the estimate for 2015, there's your euro which you can see is strengthening off 11 1 111 and 112 right now. yields were up higher above 80. remember those were way, way down. those were higher yields. the question is why that is the ecb is out there buying trillions of dollars to euros of bonds. simon, back to you. >> thank you very much steve. in the meantime the euro zone is handing to the prime minister. it's called principals for economic reform it's demanding from athens and orders to unlock the cash they need. it's importantly for markets to get a deal by friday. in athens earlier, he dug his

heels in discussing a 47 page author. they believe the incentives points towards him agreeing a deal. one because opinion poles shows the retiring of the negotiations negotiations. the majority wants a deal. they might not surprise missing the payment entering the funds two month grace period with possibly a national referendum which could cause chaos. finally, because they said the bigger price for the greeks is to buy time towards a structuring of the greek owned by the other governments and the ecb. that's what the imf is suggesting. >> could be another spresing 24 hours. let's bring in lindsey, the chief economist and joining us by the phone the investment institute. maybe we'll start with you. when it comes to the markets, we're seeing a 70 point rally in

the dow and they're jumping and we have all these risks. which one are you most worried about? which one do you think stocks are reacting to? >> i think stocks are still taking their queues off the easy fed policy. you see the data seem to be sluggish. so many people are starting to really think long and hard about whether the federate is hard this year. i think a lot of people are moving beyond that and really starting to think hikes are a 2016 story. i think that's where there could be a negative surprise. >> so we got the services number falling back to 55.7. a little off from april. we got the adp number coming in bang in line. how does this set us up? >> i think it settings a similar tone to what we've seen and this continued decline from the momentum from the pace we've saw at the end of last year. going into friday's number i

think we're going to see a muted increase around 225,000. very much in line with last month. a step in the right direction from the more pronounced weakness in march. a very large step in the wrong direction from the pace we saw at the end of last year. really the theme is more of the same. positive but very modest growth in the u.s. economy. >> the problem i have here is that both of you were talking and it doesn't match what's happening to the ten year. both of you are talking about growth and yet the market is selling off, in europe quiet dra matd cli. that might be one reason why. those yields tell you where are we now? we're above the highest closure in the year. up points over the last two or three sessions. that's a huge move from where we've been. >> it is it is a big move. honestly, where you're seeing the most of that is on the real interest rate side where we've gone fairly negative. due to the quantitative you're seeing is similar to 2013 when

the economic news was rolling in well and the feds talked more about tapering. what you're really seeing is not on the inflation side. there's real rates starting to get back to positive levels which is a good thing for markets if it comes alongside positive economic data. it's not strong but not weak either. i think markets are starting to look and go why am i getting negative rates? >> let me put it the other way. if you're a stock investor and looking at the ten year at 2.3% at what point does the rise in the ten year in treasuries mean now? maybe i'll go to the treasury market now. you think about the earnings on the s&p close to 6% maybe higher depending on what you're looking at for earnings in 2015 and beyond and you're looking at 2.3% as you mentioned object ten year that's a compelling relationship. it would take a ten year north of 3% to make stock investers

start to rethink 17 times as a historical multiple. i think you have quiet a ways to go. >> when it comes to greece, lindsey, the strategy has been we've been through so many of these daetd lines and talks, don't get rattled. it will just be down to the wire. that's if you're an equity market investor. chief said on squawk box this morning, they did say that about the dot com crash. is there a potential for greece to do this? >> it's interesting because it's two scenarios. on the one hand if you see greece leave the euro zone it could be they lost the weakest link. because they're banned together

they got strength in the earlier area. if we see greece leave the concern is a domino effect now. we see the prif yal weaker economies follow suit. that really is the dichotomy that the market is trying to deal with right now whether or not it will be in the end a good thing for the euro zone or a lead to the demise. >> it's rare somebody says something on the program i really feel needs pushed back on because it just it cannot be. . it cannot be those yields in spain and italy and portugal are expected. if you go that far, there's no way markets can rally on that not for some time. that's a horrible scenario you're flipping off there. >> i'm not flipping it off. that's the dichotomy the market is trying to deal with. we've never dealt with the euro

zone before. the market is trying to determine what the outcome will be if we do see greece leave the euro zone. we're not forecasting that but that would be a three, four five standard deviation event that the market is trying to go for. >> utilities are getting beat up hard again. is there any reason to own them in your portfolio or should you stick with the winners? >> well one of the things we would say about the rates in general is they're at attractive levels. we think the ten year ends the year between a quarter and 275. rates in general are close to a stopping point. they provide a steady amount of income. from our standpoint, i would say one, rates are somewhat attractive on a relative basis,

especially globally and two, the sectors beat up the most might have overreacted a little bit and might be some value there. >> all right. we'll see what happens. we're seeing the dow up 90 points. >> when we come back airlines helping to pull the transit port sector out of its rut. is it time to buy? we'll talk about that when squawk on the street comes back. dow up almost 88 points.

the dow down 115 points. 45 minutes of trading. we said earlier by rates and bonds for the german bond up to 87 basis points. this is the strongest two day rise in the boone since 1998. >> we were point 6.

>> another major direction is simply they're talking about inflation. >> a lot of people are looking at the reaction. >> it's a reaction to u.s. economic data. yields were at the highs of the year. you see the impacts. utilities are the only s&p group as the dow goes above 108 points. >> let's get breaking news from kate. >> hey simon. hedge fund manager donating $400 million to harvard this morning making it the largest ever given. it will be renamed the harvard applied sciences. some of the money will be put toward building a new campus not

far from the harvard business school where he himself attended and graduated. he founded his hedge fund accompany in 1994 and manages some $19 billion today. overall, it's been a big time. this gift comes in the midst of a push to attract additional capital. in the fall of 2013 they launched the harvard campaign. manies later another hedge fund manager, founder ken griffin donated 150 million to the college and last year a chinese capitalist and real-estate investor donated $350 million to the school of public health. they have a healthy amount of money for investment there too. >> they can pay for everybody

who needs it. >> thanks a lot, kate. in the meantime airlines facing head winds. delta lowered their forecast. let's bring in jim. he's the airline manager. jim, good morning to you. >> good morning. thanks for having me. >> we had delta guidance american a week or two ago. are you worried about the summer or no? >> i think the summer is still going to be pretty strong. i think airlines are obviously a growing capacity a little bit and hefrevenues have weakened a little bit. i expect in the fall they're going to pull back on the capacity a little bit. low factors are high enough to work with capacity and try to get the price up a little bit. >> it's been such a nice ride for people who have never

thought they would see stocks in the sector act like this. why not ring the register while the getting is good. >> certainly, if you had a double in 2013 another double in 2014, you might want to take profits. we think that the resent drop in stock prices have made the group look propelling. we expect strong travel demand. with fuel prices down we're going to look at record profitability for the industry. we're going to use the cash to buy back stock and fix the balance sheet further. we think it's a good time. >> it has been a rough year so far. who looks the cheapest to you? >> we have buys across the entire universe we cover. we have strong buys on delta. we like the fact they take a little bit of the risk out for them. we think united which is trading at a huge discount to peers. we expect them to close the gap

a little bit this year. >> jim, how far will we be able to go to reduce the price transparency people have in the market? they had rather have people go to their own sites and charge more arguably or not on some extras. where does that take us? i see today in a different vain charging $18 for those that book outside its direct channels. >> i think ultimately that type of behavior will hurt the industry in the long run. i think consumers want more choices. they want to be able to book wherefore they choose. they want the pricing information to be transit parent. i think it's a bad idea. they may get margins up in the short run. >> do you think it's southwest which doesn't engage in that in the first place? >> yeah i think those airlines

that had the most transparency towards consumers will be able to track more market share. >> of the majors then jim, whose your favorite? >> like i said, we can't differentiate between our strong buys. we have buys on alaska. we have a strong buy oni should mention. >> those on the left side of your spectrum. >> any capacity cuts that come in the fall will hurt them the most. we have a strong sell on sky west airlines. >> sky west. an interesting year already. probably going to stay that way into the summer. jim, thanks ago. >> coming up later on the show, double lines jeffrey gun lock will be joining squawk ali live. he has seen 16 straight months. what a day to talk to him with treasury yields surging across the globe. you won't want to miss that one. we're back on squawk on the street after a quick break.

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dow session highs up 147. let's get to rick whose about to have a very busy morning and afternoon. >> hey busy is good. listen, today the markets are on the move. it seems though the ones that are getting the most attention are the ones that make sense. why? because you can only squeeze that water balloon so long and investors do what investors do. they trade and try to trade in a

price discovery and discovering the price takes a lot more runway than it use to. let's consider a couple of things. we know when it comes to comparing the ten year note that they link up at different points and the way they've linked up lately is if you were to look yesterday when this started, they both linked up to the same. you had to go back to early december of this year to get them both on the same page in terms of last time they closed at the high yields. that's interesting because you go dot to dot to dot where they relink and in between you get the spread moving around. but these dots like today are significant. about an hour ago they were linking back to the 19th of november. that's the last time they both closed at the high yields level. look at the chart as i'm talking. boone yields have gotten up close to 90 points. last time a boone closed up here, you have to go to 1029.

between 1029 today we have higher yields than we have now. guess where the yields were on the 29th of october. you guessed it. 231 and 232 right where they are now. we'll be copying right back to the same areas as well. let's go a different direction. we settled five years last year. 166 to 30s at 275. look at a year to date chart. only one session this year march 6th where all three of the yields were higher than they were all in the same day than they closed last year. today, of course is the second. this is a decision. if i had to pick something easy and easy is best as to whether traders are going to go home short or long in cover on some of this selling. i would say look no farther than the five year. if the smallest duration on the curve settles above it 166 close, i would think that's

going to be a continued green light for more normalization. keep in mind on the boones most traders think 1% is where it's going to settle out. they could be there in about 10 minutes. sarah, back to you. >> we'll see if we get a breakout on the resent highs. straight ahead stocks are in rally mode today. the dow up 140. s&p up about half a percent and the nasdaq. our one and only will be joining us at post 9 to help navigate all of the risks going on in the mark. we'll be right back.

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good morning everyone. i'm sue. here's your cnbc news update at this hour. china escalating efforts to retrieve those missing after a cruise ship overturned. more than 420 people are still unaccounted for. the ship had been sited for safety violations more than two years ago. ash carter giving a ceremonial welcome to india. a part of a broader u.s. effort to improve what has been recently iraqi relationship between the two countries. more than 400 migrants arrived in italy after being rescued off the coast of libya. more than 10,000 migrants have been rescued in sea in resent weeks. more tar balls washed up on

california beaches yesterday. the latest discovered in malibu making it the largest stretch to turn up the oil clumps. workers removed the tar yesterday. that is your cnbc news update. back to you guys. >> hi we'll take a weekly inventory numbers and we actually saw a decline of 1.9 million barrels last week according to the government and a decline of 334,000 barrels of gasoline. that's different than what we saw from the industry yesterday. the api reported the surprise build of about the same amount yesterday which put the crude oil prices under pressure. we are seeing them come off of the lows. this market is really waiting until friday. we were going to have two big events for the oil markets one being the meeting in indiana and the job from members, the latest from the minister today is that

they are going to stand packed. they will not cut production. they want to see the rest of the world move on that particularly the u.s. shell producers and of course obviously, guys the big jobs numbers. overall, we are off of the lows here and still holding in above $60 a barrel, back to you. >> just about 61. thank you, bertha. we're also watching europe. stocks and bonds are in rally mode as the country's leaders go to russia. cnbc chief international correspondent has more. no deal yet? >> yeah no deal. i'm not sure we're close at all. at the same time the greek prime minister claims he's going to discuss his proposal. the german finances minister shows there won't be any agreement any time soon. in the meantime we are getting leaks on what will be presented. the greeks long argued they want

to have a much lower primary budget surplus. how much money do they have to put aside for the functioning of the government so it can be used to pay down debt. they said they will be offered 1% primary buget next year. 2% and 3.5% in 2018. that's lower than what had been proposed on them recently. they're going to hold a meeting tomorrow to discuss whether or not they find the reform plan acceptable. in his press conference, president mario asked and repeated the following. >> going counsel ecb wants greece to stay in the euro but they should be a strong agreement and a strong agreement is one that produces growth that has social fairness. but that is also fiscally sustainable. >> at this point, there's no sign of any agreement, sarah, as you know. back to you. >> yeah, but important,

nonetheless of getting his support of keeping greece in. let's bring in our cash and talk more about the market impact. there's so much going on. there's so much to watch. let's look at the euro. it's raging forward almost up 1% on the u.s. dollar. is that an indication of the market sentiment right now around greece and u.s. data and everything else? >> i think it is. i think they believe that the crisis will be everted. nobody believes that the friday dead line is really a dead line of any type and the sense is that they're going to let them look at a bulk payment at the end of the month. unforchau unfortunate unfortunately, the last time they gave somebody permission to do that, it was am bee yen and that didn't work out well. i think the markets are optimistic they're going to work out. the euro is better. we're right up against some resistance here.

that's 2120 to 24. the dow jones, 18,160 to 18,175. >> not quiet there yet. >> am i right saying they should be important and change the goal post officially today? it use to be they would run until december 2016. now in the statement, i believe it says all until the ecbc sustained inflation towards its target. in other words, if inflation picks up before 2016 the germans wind and they could be ended early. that's partly what we seen today, isn't it. >> i think so. they could not maintain full credibility without at least hinting that he noticed that the inflation targets had begun to move in europe already with the cbi numbers and whatever. >> this is a point i've been trying to bring to the table. if you start having a discussion about the ecb ending early, what happens here?

clearly, that's dollar negative at the margin. what happens here? how strongly are we anchored in this country? >> well if it looks like they're going to change and end early, it's going to make it far easier for the fed to make its lift off move because then they're worried about what was happening in the dollar and elsewhere. if you look at what they said yesterday, spoke a great deal about the dollar and great deal of concern about it. if that were to change that would hold the door slightly ajar for the fed and give them a chance and the markets would have to review that. >> auto sales, the trade gap today, construction spending, adp, at least it's a sequential improvement. >> i think q 2 is certainly looking better and in fact the sales are the best they've been since we had, do you remember cash for clunkers? that's the last time we had

sales up in this area. we're making these sales without that kind of stimulus. >> is that's what is driving the bond market? 232. that gets your attention. or is it what's happening in europe and boones and everywhere else. >> i think it's primarily europe is the key factor for today and the other thing is on the technical basis on the charts, the yields and the bonds are pressing up against resistance and if they break through that could lead to another leg in yields. >> why are we up 146 points on the dow? >> you're up in a kind of sell bra tory mode. it looks like the economy is not quiet as stagnant as it looks. they're doing a little goldy locks thing here. a little of this and that and moving along. >> any time the dollar doesn't skyrocket, it's when you stop

hitting your head with a hammer, right. >> you're dead right. it's the euro rising giving a sense here people say oh good. multinationals benefit better and the sales move up. we don't have to worry about the strong dollar. >> it's one day. >> no argument there. >> we should note that the nasdaq is actually trading above its record close of 5106. 59. keep an eye on the levels. interesting we are starting to see signs of a breakout in momentum, something we haven't seen in the rallies in the last few days. >> everybody's been talking about how compressed the range has been and how unusual that's been. we're as i say pressing up dpeps the higher part of it. you may get short covering or people saying the new quarter has begun, we're in a new month and i don't have a portfolio that matches what the market's doing. you can get momentum feeding on itself here as a possibility if you continue to breakout.

>> we'll see what happens the rest of the trading session. thanks, art. always good to have you on. >> when we come back this morning, as you know surprising seth bladder announcing his resignation. what does it mean for the future of fifa and the sport of soccer? we'll talk to colby jones whose played in three world cups. dow is up 144. squawk on the street will be right back.

if you want to jump out of american stocks and go global what countries holds the best opportunity right now? our traders give you their picks on trading nation. more squawk on the street coming right up.

stocks hovering near session

highs. thanks in part due to telecon trading higher. >> carl we're watching the telecons and a notable upgrade on the front. regional communications upgrade from a neutral. also at&t aedded the jeffreys franchise pick list as target raised to $40 a share. also interesting this is an interest rate sector and of course as rates rise utilities lagging but telocon today having a nice day. >> financials, don, thank you. the fifa fall out continues this morning. the fbi investigating the set bladder who in probably not connected to an event. he announced he's going to resign suddenly. on the heels of arrest of corruption and bribery last wednesday into what was advertised to its most wanted list. joining us now, his thoughts on

fifa's on going crisis. former team u.s.a. and soccer star colby jones. welcome to the program. >> thank you very having me. >> are you sorry to see him go? >> no i think it was time. considering everything that's happened. i think it was necessary for him to step down. >> how do the players feel? you have the most captive players in the country. what do they say about the way things are organized? a lot of the allegations are about north and south america. >> i think it's something when you talk about the players it goes internationally world wide. everyone had a tough time understanding what was going on at fifa and i think everyone sees now this is the perfect time we need to reorganize the situation going on. >> i can understand why you, we don't understand why they got the world cup or arguably

russia. your personal experience on the ground meeting responses. >> for the most part it's really about the bids. that's the main thing that effects everybody the most where are you going to playing the world cups. if you look at fifa and the organization, everything that goes back to the 70s, everyone had to wonder. there would be talk amongst the players about what's going on. this is a sport we love and we want to see it run thanksrance parents. if there's talk with the bidding process we're going to be upset and want it to be right. >> do you find it strange and agree with the fact none of the sponsors have dropped a deal with fifa after these allegation sns. >> no. i could understand it. i understand why. fifa is in control of all these different tournaments around the world and look within every

organization, there's some tiepd of corruption. where the money is there's corruption. there's a lot of money within international soccer. you have world cups at all different levels. the women's world cup is just coming up. everybody, every sponsor wants to be involved. if there's some bad apples at the top, i think the sponsors rather see the bad apps go and still stay involved with the sport. >> which is what he said. the business is too big. colby, obviously, everybody wants to see change. my question is whether there can be change at fifa that sorts things out. it's not like a ceo coming in with the ability to change the structure. you've got to have the people voted in. what happens next do you think? >> well i think there's going to be an effort to make change and there will definitely obviously be change at the top with seth stepping down. there needs to be i guess when we start talking about that executive committee where a lot

of the issues come from there needs to be change at that level and it can't be allowed to stay with just a few people. there has to be an understanding you are responsible for any illegal actions that happen that people will come after you as we see right now. then all the sudden maybe people will step back and not try to go the wrong route. >> colby, one of our viewers writes saying colby jones for fifa president. i'm wondering, would a player would a former player have real legitimacy here separate from the sponsors and all that. would it be possible someone who played on the field renews the sense of authority in the league? >> i think this would be respect from all the players which would definitely help. i know there's talk about michelle, the head trying to run. louise, another former player. i think they have respect at all

levels levels. i think it would be nice to get new fresh flood in there. as we all know when you have a system that's been placed for years, it's tough for outsiders to come in and try to really step in in those top powerful positions. i myself would definitely respect that and be all for that for the former player to have the understanding of every single level. >> colby, it's an early start for you. thank you for joining us live from l.a. colby jones on the changes of fifa. >> thank you. >> when we come back how the tech industry is driving a revival of older real-estate. cool new office spaces with things like beer bars and ham hammocks hammocks. we'll take you inside the cool offices after the break.

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welcome back to "squawk on the street." g3 apparel sup around 9% in early trading. the apparel maker raised its full-year profit and sales forecast above analysts' estimates on stronger order for the fall season and growth in the wholesale business so g-iii, big brands like andrew marc, also bass behind that

underneath the parent company's umbrella. back over to you. dom, thanks a lot. as the tech industry expands, older buildings are getting modern makeovers, changing the real estate landscape. we have diana olick in chicago with more. >> facebook and google may be all about futuristic campuses but for most tech companies old is the new new. tech is driving a revival of so-called class b office space. older buildings that offer big spaces and lots of flexibility for cheaper rent. now chicago is not exactly silicon valley. but tech is moving in. into iconic older buildings like the merchandise mart. yelp came here in january with 335 employees, following motorola's lead in 2012. they busted old the old windows and opened up the walls and high ceilings added fancy kitchen, their own genius bar and beer bar and special places just to hang out. now the mart is building out

another floor, expecting ever-more tech demand. over in a prewar building on west adams, dialogue tech a call-tracking software company reimagined an old space, busting out the walls and ceiling. adding garage doors where privacy was needed. the kitchen and social areas, the main draw. ping-pong, pinball, hammocks basketball hoops. just keep the employees happy. but what really stands out in all of these spaces is wiring. it's all in plain view and that says the company's ceo, is paramount. >> we can spend dollars on the things that matter. so what matters to the people working for us? they want the best computers they can get. they want high-speed internet access. they want space. they want a lot of space. >> and class b office buildings offer that. so what's happening now is the spread in cost between class a and b is starting to shrink due to the new demand. this is only in downtown prime locations, especially as

companies relocate from the suburbs knowing that the millennials of course all want to be here. we've got lots more of this online. more details and pictures relatecheck.cnbc.com. >> did reminds me of the good life they take over an old office building in chicago. >> exactly but they're not millennials. >> well some of them are. that was a cool story. let's get over to a millennial jon fortt with a look at what's coming up next on "squawk alley." a general-xor here adam kahan from yahoo is going to join us with an announcement. and warriors co-owner is going to join us and jeffrey gundlach will be joining us. 6

. i'm bertha coombs at the nymex, oil prices are holding steady a little bit under pressure. despite a somewhat of a surprise decline. the expectation had been that we would see oil stockpile decent klein by about two million barrels. we got a number about like that 1.9 million barrels from the energy department that came as a surprise, because the industry

had reported a build over the last week. we also saw gasoline stockpiles decline by about 300,000 barrels or so. that was bullish. but one of the things that was bearish was a build in distillates of 3.8 million barrels, more than the street was looking for. and when you look at distillates, we think about heating oil in the winter. but this time of year we think about diesel. that's a proxy for the transports and trucking and demand with regard to that. so we've seen the transports of late under pressure. here's another indicator perhaps that demand for diesel is not as strong as some might have liked. sarah, back to you. >> it may be linked to weakness thank you. well two days left for you to nail the number. don't forget two tweet us your predictions for may's nonfarm payrolls, the jobs report on friday. the handle,@squawkstreet. be sure to include the #nail #nailthenumber.

you have until a minute before the jobs report release friday to tweet us the prediction for the number. good luck. here's the shirt and i guess after today's adp report private sector 201,000 jobs added, a lot of economists are keeping their forecast for 225,000 jobs added. >> do you still follow adp? >> yeah you always have to follow it. there is definitely it's not -- an exact science. but it's an indication of the momentum in hiring and it was pretty solid. although revised lower for april. >> speak of momentum we're currently up 148 points on the dow. such a strong rally today. an awful lot of things going on. not least a weaker dollar as the ecb appears to change some rules on qe. could they end early? that's the debate and we wait for the greeks. the latest i'm getting from brussels is that the prime minister won't arrive until about 2:30 eastern this afternoon. so i think that carl will probably play out tomorrow. over to you for "squawk alley." >> thanks, guys good morning, it is 8:00 a.m. at yahoo headquarters in sunnyvale,

california, 11:00 a.m. here on wall street. "squawk alley" is live. ♪ ♪ ♪ welcome to "squawk alley" for a wednesday, joining us this morning. kevin o'leary is the chairman of o'leary funds, an investor on shark tank and jon fortt and kayla tausche. and best day for the dow since may 14 and the nasdaq close to the closing high. we begin with breaking news from yahoo and the nfl. the league announcing that yahoo will be its exclusive partner for the first time ever live stream of