my added 280,000 jobs last month. 10-year got up above 2.40%. it's now 2.415%. we have little tantrums sometimes. join us on monday. "squawk on the street" is next. good morning and welcome to "squawk on the street." i'm david faber with jim cramer. we are live from the new york stock exchange. carl quintanilla has date off. let's give you a look at futures. a lot going on. we are poised for what appears to be a lower open. a lot of focus going to be on the treasury market. we watched the ten-year note yield rise by 10 basis points.

that's a recent high. oil you can see it there at the bottom. >> let's get to our road map. the jobs report coming in better than expected. u.s. economy added 280,000 jobs in may. a few more weeks of drama. greece pushes off debt payments till the end of the month. the delay sends equities lower in europe. another giant hack. 4 million government employees affected. u.s. officials point the finger at where else? china. let's give you the numbers for the may job report. nonfarm payrolls up 280,000 with 262,000 private sector jobs added. unemployment rate edged higher, 5.5% there was a better than expected pick-up in wage growth.

average hourly earnings rising 0.3%. participation rate rose 0.1% for a second straight month. it's now 62.9%. it was a good number. >> it was a good number. economy is getting better. i thought the distribution where the jobs were from really pretty incredible. you would think oil and gas would have somehow offset this. not at all. i think retail is good. white collar very very strong. in general this is just a good number. i don't think you can characterize it any way other than healthy economy. i think it ip creases the chance of a rate increase? i wish we could take into account the rest of the world. when you are at 8:40 all you think about is this is the only number that matters. this is the only number that matters. they should tighten. they should. there are other numbers that do matter and interest rates are doing their own thing, slowing things down. i have to tell you that lagarde is right. if we raise rates, i think there

is a lot of other uncertainty. i would like to raise rates after they solve greece after we get a better read on russia which is bad. >> there is always going to be something, jim. in july it will be something else. either you do it or you don't. don't you believe that those who are -- >> i don't like that inevitability factor. >> auto sales, 17.6 right? this number 280,000? >> look. i am telling you if you put it in the context of only america, we should tighten in june. i'm saying look around the world. there is still uncertainty. let's wait three months. do you have a problem with waiting three months? >> there is always uncertainty. few people expect they are going to move in this month. that continues to be outside the realm of consensus. >> i am saying this number is good enough there are people who could argue it should be this month. i don't want that okay?

>> all right. >> i don't like the way the dollar has immediately gotten strong again. >> we ned to go through it. dominos here. yields move up the dollar gets stronger. >> that is 27 dow stocks out of 30. goldman sachs, okay jpmorgan they love these numbers. those stocks can rally. it's a financial-led rally, which i never mind. it's positive. i wish transports would go up. sorry to be so granular about this. when i see financials go up -- i don't like retail in general. autos are looking at china. >> what about september? not june. people say it should be june. they should tighten now. i'm saying give us breathing room. >> i think you are in the majority thinking september.

>> i think there will be a consensus shift. >> because we go up to 2.41 on the 10-year note? >> yes. >> how i do want to -- >> 2.6 -- >> it's already done for you, isn't it? >> that's what i say about september. it's done for you. no urgency. david, i'm talking about what the commentary is going to be. rick santelli do it. i'm not in a hurry. >> you are going to get a lot of those people. >> i'm not in a hurry. >> come on already, right? if we see parity it will be parody for earnings. pe multiple will be at 20 for the s&p. that's too high. stocks get hit. i'm in favor of higher stocks. >> you are, okay. at the expense of not as many

jobs? >> there were a lot of numbers away from jobs. >> such as? >> okay. >> transports? what? >> if you look at the granularity of retailers, may was not a good month. costco, may not that good. walmart? eh. target may be better. big retail home depot was the only one i felt was good. >> of course we don't get monthlies from most retailers. >> right. i make my calls. find out how people are doing. airlines were not that good. i would like to see how much is west coast port and how much is not. i'm saying there's a lot of neutrality other than jobs. jobs are the most pertinent. i am saying rather than do june which is what the utilities are saying the real estate investment trust are saying it's

going to be june not september. stanley fischer says june. >> there was a real impact from this jobs number this morning. >> yes. the stanley fischer comments the vice chairman has become hawkish, makes me feel someone say -- you're going to hear five fed officials say june. you're going to hear nine pundits on cnbc say june. you are shifting the narrative right here right now. there will be a june narrative and september narrative. now we have to rethink our plan. that's why the market has to say, okay how much have we digested of that when we are so close? >> average hourly earnings rose 0.3%. that's fairly strong real wage growth. >> it's about damn time. >> isn't it? >> i mean people have been poor in this country since 2007. >> minimum wage hikes. i don't know. >> i like job growth. i want more people to be employed. >> of course. >> you put the fed on hold till

september. i don't want to hear the june narrative i trumped up. i gin and toniced the june narrative. >> only that time, 5:00 6:00 today. >> if american pharoah wins they say they are going to tighten. i'm seeing a lot of stupidity. i think frosted will win. >> how many horses are running? >> i'm going. i have good tickets. >> you are going? it's a great day. >> i used to play the ponies constantly. took a handicapping course at harvard. got a very high grade in it. >> good for you. >> you don't get to be magna couple lauda for nothing, partner. >> you don't. >> i rest my case. should take up something else. like zumis. >> right. >> that's apparel. >> oh all right. >> they were both horrible. >> were they? >> this is what i'm talking about spotty retail. >> those are tiny little companies nobody ever heard of. >> they sell in places like

macy's. you may think macy's -- don't you look over there. there is nothing over there. i'm over here. don't you think macy's should if their quarter is not that good -- you want to play that game? >> all right. let's get to the jobs. did you nail the number? we asked you to tweet your predictions for the may nonfarm payrolls. the prize, that unbelievably beautiful polo shirt autographed by the entire "squawk on the street" gang. we'll announce the winner later in the show. we'll get white house reaction to the jobs report from jason furman. he is chair of council of economic advisors. want to hear from him. european bonds on track for their worst week of the year. greece decided to postpone its june loan repayment as of yesterday. imf -- it's going to pay the imf back at the end of the month.

they were scheduled to pay $300 million yesterday. >> let's just resolve that. >> why should i care? enough with greece. enough. >> the futures trade off europe. futures design us and it's wrong thought does. there are 11 million people holding 70 million people hostage. it's a failure of leadership. do you agree it's a failure of leadership? >> it's a failure of leadership. we see a lot of that. it's not confined to europe. there is plenty going on in this country, too. china. >> you want to know what steve kerr thinks? >> the coach of the golden state warriors warriors, he's got a plan. >> throw it to that guy name

curry. that's the plan. they were great. >> i'm just saying is that i worry about the dollar. i go to bed worrying about the dollar and wake up worrying about the dollar. that's what i do. >> good thing you don't sleep long. u.s. officials expect hackers in china penetrated data held by the office of personnel management potentially compromising the records of about 4 million individuals. the fbi says it's working with other government agencies to investigate. the opm says it detected the breach in april of this year. jim, they are knocking on every single door possible. it's interesting when you read some of the analysis and some of the coverage of this. officials are not completely sure as to what china is doing with all of this. as i reported three years ago, started reporting, the focus of the chinese state actors seem to be on economic espionage, stealing secrets, intellectual property they can use and take

back to state-owned enterprises and others there because it's a different system that, would benefit their economy. recently according to u.s. sources, the attacks seem of a different nature. >> human resources. >> why are you taking 4 million names, federal employees? what's the overall plan there? frankly, it seems somewhat scary, and it raises this larger issue, as well of how do we respond? when does it cross a line? >> when did we call them out? when do we say we are not going to indict the people in china whom we know we can't prosecute? when do we go after the people here? there are a lot of chinese -- i don't know. i'm not calling -- i prefer a trade war, actually dan d'amico was on this morning talking about listen they are dumping their steel. put the tariffs on the tires. hurt them. i think there has to be a reaction. why are we such a paper tire? why are we not standing up to

what i think is a paper tire? >> you have to wonder how you do react. of course these things always become difficult to prove. we've indicted chinese nationals over there. that had no real impact. >> what they are trying to get -- what are they trying to get? >> i don't know. >> does the party get palo alto fireeye before they do this? >> it's what gadhafi used to do make threats? >> i couldn't think of a reason other than mark maclaughlin and doing better at palo alto. this was the most worthless hack unless they have a master plan. >> we don't know. >> joshua rhamo, what is he thinking? >> he is a china expert. >> he is an informed fellow. >> when it comes to corporations

and their responses to chinese hacking and others it is now a board level matter at all times. >> charlie scharf. >> they sayre information the way they hadn't in the past. there is a willingness to come public sooner. we are making some progress there, it would seem on the corporate side. it doesn't mean they are not getting hacked. the response perhaps, can be quicker. >> we've got to be worried about -- they are attacking human resources. maybe he is a good guy to ask. what do they want? i don't want to give it to them. >> no. >> so far 2015 has been a very tough year for walmart shareholders. the retail giant's annual meeting is under way. we'll take you to arkansas for a live report. also jason furman on this morning's much better than expected jobs report. and where we stand overall in the economy. taking another look at futures.

looking for a slightly down open. td ameritrade, they're always working. yup, we're constantly making thinkorswim better. 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.

as expected opec ministers

meeting in vienna have decided to stand pat on oil output. let's check in with jackie deangelis at the nymex. covers all things oil for us. >> good morning, david. we were up all morning and now prices reversed course. we are down about 50 cents. $57.53 the opec ministers saying they will not reduce output. that really wasn't anything unexpected, but some interesting comments from the ministers. saudi oil minister saying he is 100% comfortable with the oil market. that he is seeing an increase in demand. on top of that saying don't be preoccupied by the prices as they are determined by the market and there are a lot of speculators in the market place. iranian saying adding oil to the market won't have an impact on prices which analysts are skeptical about. we see another 400,000 barrels a day coming back online. next opec meeting not until december. it will be a while until we hear from them again.

you have a stronger dollar today. boost in the dollar index probably having something to do with this decline. the supply glut remains. >> thank you. there is nobody who knows more about what's going on in terms of this country and production of oil and natural gas for fracking we don't have a minister of fracking. there was an interesting story yesterday about that. what has been unexpected is the rate at which these guys keep produceing producing, able to keep costs down to a level where they can go at it. they have been taking rigs out of service. >> that's the real story here. in a statement, it says in north america, u.s. oil and canadian oil facing stronger growth. there will be growth. united states pro doused more oil in 2015 than 2014. that's why i didn't regard the statements as bearish for our oil producers. they are talking about the growth to 1.2 million of the demand side. demand up a little.

they are mistaken in thinking the u.s. is not going to produce as much. i found it benign for producers. yesterday was a bloodbath. i charted where the majors and independents were versus oil last was, stocks were at these levels last time. oil was between 43 and $47. the forecast by the stocks which hasn't always been accurate the last ten years, it hasn't been accurate to the point being able to say oil is coming down. the odds favor oil coming down if you look at those stocks. >> or the stocks are undervalued based on $57, $56 price on wti? >> i know the charts are all broken. people are skittish and scared. yes. that is my take away. the stocks are reflecting $43, $46. we are not getting there, not with this statement. the right equalibrium level is 53. not back to $43. you're fine if you speculate, the right word on chevron which has been hard hit.

or even you can go to pioneer. that's a little difficult. you can go noble. you can go anadarko. i'm comfortable with that. >> all right. we've got the mad dash coming up. ♪ call 1-800-royal caribbean or your travel agent today.

why should over two hundred years of citi history matter to you? well, because it tells us something powerful about progress: that whether times are good or bad, people and their ideas will continue to move the world forward. as long as they have someone to believe in them. citi financed the transatlantic cable that connected continents. and the panama canal, that made our world a smaller place. we backed the marshall plan that helped europe regain its strength. and pioneered the atm, for cash, anytime. for over two centuries we've supported dreams like these, and the people and companies behind them.

so why should that matter to you? because, today, we are still helping progress makers turn their ideas into reality. and the next great idea could be yours. jshgs. >> nothing like a mad dash on a friday to get your spirits up. >> you know once i saw

parliament for the flashlight album? that's how old i am. that was fabulous. i want to talk under armour. not because of last night's victory by the warriors. there is a note out hold to buy. you are going to see the great 20% compound growth. don't get disheartened. this period has been disheartening. nike has been incredible. nike is kind of like john malone. nike lurks. they pounce when they want to. stephon curry could be a reason why this go higher. that may be a franchise that is not going to be jordan-like. that's like "i love lucy" still making money for cbs. i suggest to kevin they do a reilly franchise because of the kid, curry's kid. >> she is adorable. it's a couple of months the stock is up 44% in a year. >> we have people so short sighted, it is scarey.

i had so many people complain at jim cramer about under armour. give me a break. kevin plank has game. they are going to be big in china. he has a huge opportunity. jordan jordan -- has he identified himself with anybody wrong yet? how is kevin durant doing? >> not that great. >> my take away. >> he had a rough year injurywise. >> that's true. curry is exciting. >> he is. >> he makes the game exciting. >> he does. all right. opening bell is coming up. jason furman joining us on today's jobs report. a lot of stocks to watch.

can it make a dentist appointment when my teeth are ready? ♪ ♪

can it track my crew's performance, and protect their heads? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ at cognizant, we see opportunities for every company. to meet the new digital demands of their customers. can it process my insurance claim? like, right now? can it download a track while i'm sampling it? can my keys find me? with the power of digital, analytics and automation now every little "thing" can provide even greater value. ok, so can it tell the doctor how long you have to wear this thing? the answer is yes, it can. so, the question your customers are really asking is can your business deliver?

you are watching cnbc "squawk on the street." the opening bell will be ringing in a minute and a half. we'll key off interest rates this morning. that would seem to be a key theme, if you will after that

280,000 jobs addition. >> the bloodbath in the utilities. >> let's not forget how big the financials are in the s&p. i am watching jpmorgan screaming here. bank of america through 17 it has been ages. these are big levels for big cap stocks. let's not forget that. they can be leaders. that's my bullish take on the market. it's never a bad market when fns do well. i need transports. transport airplane numbers are bad. i am heartened by the financials. it's a split decisions. >> those financials benefit from higher rates.

the cheers starting to go up here as we get ready to ring that opening bell. we have an ipo this morning. we'll speak with the ceo after that begins trading this morning. i'm not a big tea drinker, but occasionally. >> tea is a great worldwide growth business. when he blows tea out, it's like this indian market. they like pizza and they like tea. that's why starbucks and domino's are doing so incredibly well in india. we don't talk about india. what a great growth story. >> we don't. >> we talk about china endlessly and never india. a democracy that is a great country. >> a democracy that has a great growth story in and of its own

right. >> and is not hacking us. could be a great ally if we did not throw in our lot with somewhere else. watch "homeland" for a little history. >> there was a story describing the air quality in new delhi that made me think i'm never going there ever. >> i'm trying to schedule a trip to india. >> take your gas mask, it sounds like. we have walmart news i think? they elect greg penner as the new chairman. >> i've been focused on walmart. i think mcmillan is doing a terrific job. i've got to shake it up. they need much younger people. >> rob waldon has been the chairman of walmart for a long period of time. i don't recall how long. when i reported the first documentary, he was a chairman. that's a while back. not a member of the walton

family, i don't believe. i don't know mr. penner's background. we are working off headlines here. walton will stay as a director. they are saying realigning the composition of their board committees. penner will succeed rob walton. realigning so most of the independent directors will serve on at least two board committees. >> man, they are going to have -- they will be able to do nothing else. has he put his brand on the company yet? has he made it so layer after layer is his? >> he's certainly done some -- the wage increase alone is a significant seminal move. he is trying to make the stores look and feel different. mcmillan has to address the fact it's more fun to go online than go to the stores. he has to make it so you want to

go to the store. >> i have a feeling -- greg penner is the grand son-in-law of sam walton so it is staying in the family. >> i'm not against that. i think the old day sam walton going to the different store ss, talking about going to the stores doing the granularity, looking at things. brian cornell popping in on stores looking at things. mcmillan has to make changes on the spot. i think he is a bold man and i am rooting for him. i want to go to my walmart and feel great. >> i will say this. the walton family. the numbers they are able to take in in terms of dividends are astounding. each month. >> i know. film's a nonwalton, i wouldn't know how i'm doing. >> they have to be careful there they can get so large be to be a

moral majority owner of the family itself with the buybacks. it's an interesting balance they had to maintain at walmart. >> do you think that it's possible to shake things up at that company? you spend so much time with that. can you literally blow it up? >> an organization of that size it's not that easy to affect change. when you have over 2 million employees. it's i stunning. >> that's as many in the armed forces. >> incredible to think about. perhaps they can. we have other stocks to get to. before we get back to stocks, let's talk about today's jobs report. the labor department reporting businesses added a solid 280,000 jobs in may. unemployment rate did tick up a notch to 5.5%. that in part because the participation rate went up. let's get first reaction from the obama administration. to give us that is jason furman.

first on cnbc interview, chairman of the president's council of economic advisors. always nice to have you with us jason. your reaction to the numbers this morning? >> i feel good about these numbers. this is the best jobs number we've gotten this year. over the last two years we created more jobs than any two-year period. since the year 2000. it's a real indication some of those winter woes are getting behind us. >> wages also up 0.3%. your take on that given we did not see strength in wage growth at all in previous months? >> i think it's a good sign. it a i like to see more wage growth. i think we can do that with things like trade promotion authority can help us create more high paid jobs in exporting sectors, infrastructure minimum wage, a whole range of things. certainly, it's good to see wage growth picking up some. >> the stronger dollar would

seem to be potentially have a negative impact overall. certainly hurts manufacturing here. obviously price of our exports. higher rates today in response to the stronger number. strength in the dollar. we've already seen what's going on with the yen and euro over the last six months. what does that do to the overall employment picture? >> the thing we are focused on is real why it fundamentals. and fundamentals of the united states economy and fundamentals of the global economy. if we saw stronger growth abroad, and if we saw countries around the world like europe taking steps in terms of fiscal policy japan, as well to strengthen their growth then that would mean more exports for the united states and stronger growth here. rather than day-to-day minute-to-minute movements in markets, really taking a look at what's driving those movements. that's the underlying growth disparities we continue to see

around the world. >> jason, jim cramer. good to see you. >> good to see you, jim. >> i want to give you a rap. i'm going to see him today. i want to give him a rap. it i spent time looking at the inskilled worker situation. maybe you are too hard on the actual class. i had 19-year-old store manager from chipotle. chipotle is unbelievable in terms of promoting people. the denny's ceo on. domino's ceo. ihop ceo. people coming up from the ranks being able to run businesses. maybe you guys should appreciate that more. i know it's great to have skilled, but unskilled people doing well in this country is an unsung story i think i've got to start embracing. >> those are great stories to hear. they are really inspiring. it's also true on average that the premium you get from community college, from a b.a. is quite large.

it's rising. that's why we want to enable more people to get those types of skills. you're right. skills are going to differ. stills are going to be training helping companies with on-the-job training helping community colleges helping high schools modernize so they are teaching directly applicable job skills. i think skills means a lot more than just a college degree. i would not undervalue a college degree. it is increasingly important. >> i just think the bully pulpit you could have. you go to a chipotle or costco where maybe they never finished school. people able to move up have very good wage benefits and perhaps run a store and maybe instead of just going to chipotle and having the burrito we celebrate what they are doing and celebrate the ceos. it's my rap. i've got to give it to you, i spend too much time talking to

ceos who have fried cooks who have become franchisees sfrns and be the dream situation that is not celebrated enough by your administration. >> it is a great story. one of the most reliable ticks up in our economy is good education, good training skills that serve you well in a dynamic and changing economy. we are going to do everything we can to help with that. >> final question. economists on the other side said the concern is there is no way to produce this many jobs in a slow economy without simultaneously having poor productivity growth. the absence of productivity growth is bad for workers and firms alike. your response? >> first of all, we've seen, if you look over the last 2 1/2 years, the growth rate is stronger than it was in the first 3 1/2 years of the recovery. as the job market has strengthened, you have sign broadly gdp growth strengthen.

first quarter gdp growth obviously i was very impacted by the weather. was potentially impacted by ports, by measurement issues. we are going to see where the economy is going over the next few quarters. i do agree with doug though that productivity growth is key to strong wage growth. it's key to middle class incomes and that's why trade, infrastructure, research, education, all of those things are so important. >> jason as always appreciate you joining us. thank you. >> thank you. >> jason furman from the council of economic advisors. >> good numbers to celebrate. i went more philosophical. good number. >> i like that. financials are up. over 1% gains. jpmorgan bank of america, sithy. wells fargo. >> i think the story here is you watch the apaches.

this has been the bloodbath group. it's only 10% of the s&p, arguably. there's been such a plethora of companies created that are involving oil and gas and shale. yesterday was great news for those companies. shale and epa. stocks got hit. i am saying that's the group to watch. that group has been a leader on the down side. to see the oils stabilize would be very bullish for this market. >> did want to come back to yesterday's news. telecommunications also this morning, vodafone confirming it is having talks with liberty global about a swap of assets. saying we are not in talks about an acquisition. some disappointed with that statement from vodafone. we'll see what the swaps accomplish. the shareholder base perhaps would like to see them do a deal. some think would be better for liberty global to buy out vodafone begin the cost savings and the ability of management under liberty to wring costs out of that business. don't expect that.

it wouldn't seem the ceo of vodafone has been deliberative. shareholders are happy with him. he did a great deal with verizon and they paid top dollar. >> was that a win/win. >> win for vodafone. i think verizon did a good job there. rates where they are and how they were able to finance it. t-mo is up. dish down. nothing particularly new there other than a lot of people analyzing it. they believe in the strategic rationale behind the deal but wonder whether you can get to the finish line. >> i think i'm in the inevitable camp. >> really? >> these are two guys who just like each other and can make it happen. it's like a bromance. >> it's an important component of any deal is romancing. got to have romance.

>> right? it's like che together with -- people forget that. >> che was a bad man. >> was? he. >> che was bad. he was bad. i was thinking like hidalgo getting together -- never mind. i'm trying to say these guys are revolutionaries. revolutionaries like to stick together. >> ergen has done more to advance the industry frankly. >> he has. >> is he as nice as i think he is? >> he's always been very straight forward and nice to me. i can't speak for other people's experience. >> talk about pot, colorado. >> we've got to go. bob pisani with what's moving. >> not huge moves. we are a little bit weaker. not surprisingly. utilities, interest rates sensitive. weaker on the great nonfarm payrolls. this is great news overall. we are seeing strength in some sectors. the financials are better. take a look at bank stocks.

higher interest rates. this is an obvious knee-jerk reaction. big money center banks are up. also regional banks on the up side. interest rate sensitive. not surprising. weakness there. if you look at the utilities like american electric if you look at reits like simon property, some are marginally weaker. more not down more than 0.9%. high yield funds. biggest rise today in rates was in the belly of the curve, that three to five year area. that's where high yield action is. only a modest drop in the big high-yield etf. that's been moving down for the last couple of weeks. you want to keep an eye on that as it reaches technical levels here. front page of every newspaper today, you were talking about that hack of up to 4 million government employees. chinese suspected there. thing about this is the cyber security etf has been moving up

all year. that hack. that is a new high. this is not a new phenomenon with these cyber security companies. look at big names. palo alto up 120% with $70 a year ago. fireeye is a 52-week high. that is right near up historic high at about $39. cyber cyberark is another new one. nonfarm payrolls overshadow bad's gone on in europe. the rally in europe a little bit. look at europe this week. reuters saying this is the worst week for europe all year. greece is down italy, germany and france. a lot of damage has been done today. another effect of that strong dollar is the weaker emerging markets. eem. that's been down for the last several weeks. down again today. we have an ipo.

evolent health. we are still waiting for that to open. that is a software platform for health care companies. back to you. >> thank you very much. let's get to the bond pits this morning. big story developing there. >> i tell you what. it is an incredible couple of weeks for the fixed income markets. if you look at a two-day of ten years, what jumps out is not how quickly the adjustment was, but open the chart up to october 2014 around the end of the month. you see that's the last time we settled these levels. maybe more important, you realize on the week 10-year note yields up 28 basis points. two-year. last time it was at these levels the day after christmas. the 26th. you see that two years have moved into the 70s. today we look at the yield against the back drop of where

it settled last week up a dozen basis points. here is the biggest trade. five-year note. if you look at this market starting on the 2nd of march, you'll see we finally took out that march 6, 1.69% high. now the last time at these yields was 26th of september. guess how much the five-year note yields are up on the week? same as the 10s about 28 basis points. that says it all. let's look at what's going on with the yield curve. 5 versus 30s. this is big. want to pay attention to this. haven't seen these levels since about may 1st. it's still significant. if you look at a two-day chart of the dollar most of the big action did show up. dollar index is having a great day. if you look at year-to-date we could see it's doing very well in the context where it settled last year but it's still somewhat smushed down a bit. if you want to see this rock and

roll, we need to see the euros probably start to trade back towards and under that 1.05 level. david, back to you. >> thank you. let's get to washington. >> reporter: they are saying the c csc was hiding significant charges with the highest contract. saying just now csc is going to pay a $190 million penalty here on this. interestingly here in the details, they are saying former ceo of csc michael lapin, agreed to return $3.7 million in compensation. that's under the clawback provisions of sarbanes-oxley. he'll pay a $750,000 penalty.

they are saying former cfo michael mancuso agreed to return $390,100 compensation in pay, a $175,000 penalty. other executives are contesting the charges saying all this stems from the csc' loss of an important contract with the united kingdom's national health service. according to this allegation, they are saying csc took a lot of affirmative steps to block investors from learning they lost that contract or major portions of it and falsified some of the information related to that. >> as we say, civil at the s.e.c., not criminal. thank you. >> walmart electing a new chairman of its board. over the last 12 months shares of that dow component have underperformed the s&p.

retail overall. that is no stranger to mr. cramer. courtney reagan is at the site of the meeting with the very latest for you. >> that is the big news. current vice chairman gregory penner will take over as walmart chairman at the conclusion of today's meeting. penner is the son-in-law of rob walton who has been wall street chairman for the past 23 years. it's not entirely unexpected as penner was named last year as vice chair at this meeting. this keeps the chairmanship in the family. penner has been on the board since 2008. separately at the meeting, other things going on. reese witherspoon, the surprise celebrity emcee for the event. the first walmart program she touted is the order online pick-up grocery program saying how great that is for moms like her. chairman rob walton did officially open business saying 9d 3% of shares outstanding eligible to vote are present or

have been submitted. usco greg foreman is about to speak. later in the crowd we'll hear from doug mcmillan. there are nine total proposals on today's proxy. four board recommendations, including the re-election of 15 directors. mr. walton will be staying on the board. all these are expected to be approved handily. while the board recommends voting against all five shareholder proposals, proxy firms, iss and glass lewis recommend shareholders vote for further disclosure how walmart discloses compensation recoupment if a senior officer breaches company policy. and recommending voting for having an independent board chairman. because the founding walton family controls the majority of shares it's almost impossible for any shareholder proposals the board opposes to go through. we are looking at all the board proposals expected to go through. shareholder proposals expected not to go through.

back to you. >> thank you very much. that is always quite an event. they hold it at the big arena there. many thousands. >> reese witherspoon? no. taylor swift to make a statement. are you going on the tour? are you going to see the tour? >> no. i will not. >> monster big. that's who you get. >> they didn't go big enough really? >> no. brian cornell, call taylor swift right now. i'm not kidding. taylor swift is huge. >> i'm aware of that. i hear her plenty in my house. just not me playing it. >> i'm going to taylor swift and i'm going to belmont. >> you're just a player. >> i'm an american. >> a great american. up next, it's stop trading with the great american to my right. we are back after this.

when a moment spontaneously turns romantic why pause to take a pill? and why stop what you're doing to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. ask your doctor about cialis for daily use. insurance coverage has expanded nationally and you may now be covered. contact your health plan for the latest information.

you wouldn't take medicine without checking the side effects. hey honey. huh. the good news is my hypertension is gone. so why would you invest without checking brokercheck? check your broker with brokercheck. it's that time stop trading. >> should have asked fuhrman

about the disney situation. >> there are so many different questions to ask fuhrman. that corporate tax reform we never have time. >> my bad. let's talk about verifone. they had a weak china number. i say you have to overlook china. if you listen to their call, they are humble about china and how they screwed up. the visa tie-up they are both significant and being undervalued. people don't understand how powerful visa is. don't write off verifone. they have tie-ins with a lot of retailers. in the end, the register is a war everyone has to play. i think to write-off them is foolish. i like the actions in the fins being leadership and oil turning around. what will happen today we've got the big bad event over with.

greece has pushed off. we have a window people say that's over with. we can focus on the stocks that have come down and focus on american pharoah. >> we'll see. you'll be there to see it. before you do that you have a show tonight. what have you got? >> tonight is my single best health care name. right now that they will not be independent a year from now. i'm talking about some of the roll-up kings. not everybody is a roll-up. some are just deal makers like ergen. >> oh man. have a great weekend. >> you too, buddy. >> good luck at the races. coming up jan hatzius reacts to today's jobs report. more coming up.

good morning. welcome back to "squawk on the street." i'm simon hobbs, sara eisen and david faber. carl is off today. equity markets not moving hugely to that blowout jobs report.

280,000 in may and 32,000 upgraded for the previous two months. the dollar is substantially stronger. you see crude lower. >> let's get you the road map for the hour. "new york times" columnist jim stewart here with his take on greece. how game theory can be applied to this week's greek negotiations and what happens next. >> avolent health. the stock opening moments ago. >> massive data breach hitting the u.s. government. officials say china is responsible. aefl lent. >> great job growth. goldman sachs chief economist jan hatzius will join is live for an exclusive interview.

the job report unemployment ticking up 5.5%. steve liesman has all the details. it was a solid report all around. >> i see three economic themes. i'll walk you through where i see it in the data. first, the u.s. job market is prospering despite the hit to jobs from lower oil prices and strong dollar. second. the consumer looks to be bouncing back. the strong job market looks to be attracting workers from the sidelines back into the labor force. here's the data. up 280,000. unemployment ticking up because it attracted almost 400,000 workers back to the work force. average hourly wages up 0.3%. march revised up by 34,000 to 119,000. here is where i see the important economic themes. look at leisure/hospitality and retail. up a combined 88,000.

those are consumer discretionary items. maybe the consumer coming back in. temporary help up 20,000. all this happening while the oil patch, mining down 17,000 suggesting that the u.s. is able to overcome the drag from lower oil prices. economists saying it is an impressive impressive, consensus-smashing rate of u.s. hiring. september remains the base case for a first hike. the fed will look at this number and see relief from its concerns that the economy is weakening. a lot of commentary the last couple of days. tick up in unemployment rate bringing people back into the work force. it's got time to raise rates before inflation becomes a problem. there are two criteria for hiking rates. confidence in inflation moving up 2%. improving job market. looks like the fed has at least half of what it needs to hike

rates this year. >> thank you very much. for more analysis we are joined by david kelly, jpmorgan funds chief global strategist and diane swonk, chief economist. welcome both. nowhere to run, nowhere to hide for the dofbs onves on fomc. >> that's right. all excuses for not hiking are going away. the most important thing, it puts the idea the economy sunk in the first quarter. we have seen pending home sales, the strongest number since 2006. we've got new vehicle sales, the strongest number since 2005. unemployment claims at the lowest level in 15 years. this is actually quite a healthy economy here. much more healthy than the fed has been talking about. >> what do we make of the call from the imf to delay interest rates to next year.

>> that is noise in the mix. i think the reality is that the imf is concerned about the collateral damage than any rate hike in the u.s. will have on emerging markets as well as the u.s. this is something that happened during the taper tantrum. there is a really strong bias. remember the fed has been saying it wanted to lift interest rates in 2015. since the onset of qe-3 in 2012. this set the clock ticking again on september. we had a september rate hike all along. we stick to that rate hike now. i think the more important issue is not lift-off of the fed. it's when is the second hike by the fed? i don't think it's going to happen any time soon. i think we've got to lift and pause. >> does it really change the trajectory for the fed? if they weren't going to hike in september, now are they? is that a solid enough data to suggest the economy is back from the weakness? >> i think they are going to hike by september. i think they always were going to. i think the data has done this to them. the most important thing is even

with labor force growing a little bit this month, the trend is very bad on labor force. it means we are eating into slack very fast here. i think we'll hit 5% on the unemployment rate by the end of the year. because i think we are going to head in that direction with higher wage growth the fed will move again this year. they moved twice this year. >> let me draw you out. we were talking. you believe the trend growth rate of this economy is actually 1.5%? >> unfortunately, it is. if you look at the data in the last ten years, we averaged 1.6% average gdp growth. the killer statistic there is ten years ago the unemployment rate was where it is today. we've seen a big slowdown. we said this was a 3% economy. it's not a goldilocks economy. it's goldilocks' grandmother. it moves so slowly. >> what is the effect of the central banks? >> the problem is all this qe it's like fertilizer for weeds. it grows bubbles, but is not

really growing capital or consumer spending or helping with this long-term growth problem. >> diane? >> in terms of the central banks, clearly they are helping a little bit or we wouldn't be where we are at. that is important to take into account account. the labor market is out of the equation. labor market is too cool from the perspective of the fed. that is what doves will push back on still in the month of june at the june meeting. we need to keep that in account is that even though this looks better today than it did say yesterday, one data point does not a trend made. upward revisions were great. they show signs of healing. the fed's threshold on lift-off is low. threshold on its second rate hike is much higher. >> we've got to have a broader view of what an inflation problem is. it's not just jobs and consumer inflation. we've got to think about asset bubbles. >> i understand that.

that doesn't mean the fed raises rates. they said they would prefer to deal with asset bubbles with regulation. they also are very concerned about how lift-off is executed. they can only -- it's telling in and of itself. they have no way hitting an exact target on short term rates. it's the range they are raising rates in. they don't know the collateral damage in volatility that will cause in emerging markets, but the u.s. market. all those factors are going to go into deciding when the next rate hike is. the fed's message of no for longer will be dominant. they want to get lift-off and focus off lift-off. it will be longer rates longer to allow the healing we are beginning to see, gain some traction. >> i don't know they know how to regulate their way out of bubbles. >> they may or may not. >> axel weber was on this show yesterday, former head of the

bundis bank. it sounds like he was echos your idea. fine for the imf to suggest their policy recommendations, but the federal reserve doesn't have to listen to it. they will risk getting behind the curve if they wait too long on rates. that's the big unknown here. >> that's why i like what mario draghi said. i think it's dangerous to give people the perception low rates are going to be here forever. that perception is what's building bubbles. >> before we let you go since you are the chief global strablg strategist, what does this mean for equity markets? >> i think it's good. we'll see better growth. the fed is still dovish. as money comes out of the bond market it's got to go somewhere. the u.s. economy is not growing fast but growing enough. i say we sauce in equities. >> david and diane, thank you both. have a great weekend.

greece is getting breathing room as it negotiates a new bailout deal pushing off debt payments until the end of the month of june. up next pulitzer prize-winning "new york times" columnist jim stewart tells us why game theory could play a big role. ery auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.

the greek prime minister is about to address his own parliament. euro's leaders will gauge his rhetoric to see how far they would have to shift in negotiations to save his country from chaos. returning from talks in brussels yesterday, he called merkel along to reject their core principles. he may have bought three weeks bundling imf payments to the end of the month, that is when the $18 billion on the table for greece expires with the end of its existing second bailout. on the streets of greece itself analysts warn of rising risks of accelerated run on greek banks. because the ecb may be less willing to supply them with emergency liquidity, capital controls. talk of early elections make it less likely greek will exit the euro zone according to rbs. polls suggest 75% greek voters want to stay making any new government more likely to do a

deal with creditors. >> joining us on this topic is jim stewart. his latest column explores how game theory could be applied to greek knee goings. how are the greeks playing this? >> i hadn't been paying too much attention to this. i thought there will be political theater and they'll reach a deal. it's clearly in both interests of germany and allies in europe and greece to avoid a default. why does the rhetoric only get worse? that's because it is being played like a game and played like a game of chicken. each side feels the other one cannot afford to hold out. greece feels germany cannot run the risk of contagion in the global economy. germany feels greece cannot run the risk of disaster that would follow default. it is like a chicken game. >> it's very dangerous.

we've pushed out the risk a few weeks. they have until the end of june to come up with this massive payment to the imf which they need a bailout to do it. who blinks? >> it's getting close to the brink. i think investors have underestimated the risk of their not getting a deal here. it's only when i explore with game theorist why this would be the case. that's because it is very very high risk. the outcomes are really not known. if we truly knew it would be like a lehman brothers type disaster would you expect germany and its allies to give in. we would expect greece. ultimately, most people do think greece will have to blink on this. as polls suggest, they may just get voted out of office. >> this idea not being prepared for it. it's not as if we haven't had this discussion for years. one would anticipate we are prepared. in your column if they haven't figured it out, it's like delaware taking down the u.s.

economy. >> that's true but it's eerily similar to what treasury secretary paulson said about lehman brothers. this has been going on for months. surely everybody knows they are about to go under. the problem is investors believe they will not let it go under. >> that is a good analogy. arguably lehman thought it would be bailed out by the government. didn't accept the offers on the table, which is why my concern, my deep concern is that you are wrong. it isn't a game of chicken and the greek prime minister simply can't deliver. he can't get the performs the rest of them want through the parliament because he is a leftist and has got his leftist rebelling. that is my concern. we are in deadlock where it goes no further. >> that is part of the game theory analysis here. i'm not assuming they do. one thing in game theory negotiators have to understand what are the limbs on the other

party? the europeans have to understand how far can the greek prime minister go? if they push him farther than that we'll have the disaster. similarly, he has to understand how far can they go with their constituents? they've got to try to understand each other. the problem happens in game theory when the sides are wrong about each other. there is a risk of that. that's what john nash who untimely died a couple of weeks ago, explored in his work. >> there is of course another game which is germany/france versus the rest of the euro zone, where they have to set an example. you could argue they like him to lose power so no more leftists or euro skeptics appear around the european stage, in general. they may be out to bring good night down. >> that is absolutely true. the greeks told me the greek finance minister told me that's one of his darkest suspicions. that they want to trigger a disaster so this crowd will get voted out. and a new election where he gets voted out.

they are willing to put up with turmoil to get there. this is something investors have not priced. in more broadly, there could be this serious turmoil. >> now make a prediction. we'll put you on the spot. one year from now, is greece in the euro? >> yes? i'm i'm an optimist. reason will prevail. it is clearly inest interest for there to be a deal. >> you don't see signs of contagions spreading to italy and spain. >> do you see bond yields rising. we had a big bond sell-off. >> nothing compared to what we thought. there will be questions if they let greece go about who is next. >> i'll criticize myself and say i'm sounding like most investors. i have to admit, i would say while i still think a deal will be made the risks of it not being made are much greater than i had realized until i delved

into this. >> he says to you, people have been portraying me as an irrational fool. they have. you seem to indicate and he indicates to you that's part of the plan. >> he's not an irrational fool. he is a smart guy. he's got multiple degrees. he is an expert in game theory. he knows what is going on here. the thing about game theory, it is a game. it's in his interest to seem irrational. if germans believe he is irrational enough to cut them over the brink, the threat becomes more credible. it's like spy games or what is real, what is acting? s it's fascinating and complicated. to your point, it's what they call a metagame. it's not just greece and europe. there are other games lined up portugal, spain, ireland. who knows who else? economists i spoke to said europeans should accept that. give greece something.

recognize they have to give the others. they can afford it. get us through this crisis and make compromises. >> he is also in great shape. >> he is wildly popular. >> that should make a difference, i think. a sex symbol in germany, which is not completely irrelevant. >> true. >> he will be an action hero in his next iteration of career. >> thank you, jim stewart. >> sure. >> on the story of the week of the day, that would be greece from "the new york times." this is evolent health debuting here at the nyse. priced at $17. nice little pop at the open. we'll talk to the ceo of this software company within health care next. le way to get your fiber. try phillips' fiber good gummies plus energy support. it's a new fiber supplement that helps support regularity and includes b vitamins to help convert food to energy. mmmmm, these are good! nice work, phillips! the tasty side of fiber, from phillips'.

i heard i could call angie's list if i needed work done around my house at a fair price. sure can. so i could get a faulty light switch fixed? yup! or make a backyard pizza oven? oh yeah. i can almost taste it now. tastes like victory. and pepperoni...

e financial noise financial noise financial noise

financial noise it's of a cloud-based health care company evolent up 10% on the floor of the new york stock exchange. joining us in a first on cnbc interview is evolent's co-founder and ceo frank williams. good morning. >> it's great to be here. >> you are in the cloud. what are you matching in the

cloud? >> if you think about it we've got a health care system that is only treated illness. we actually want a health care system that tries to keep people healthy. saves costs, better care for patients. we are providing technology tools, analytics, clinical programs to help providers manage health care better. >> they are looking at medical records and linking that to what? >> we are pulling from pharmacy lab, all these different sources to understand much more about the patient than we did if we just had claims information. if we do that we can actually stratisfy the population. we can do targeted interventions to make sure they are taking medications, save costs and have better health care. >> are you saving me, the patient and consumer cost or the hospitals costs? >> i think it's both sides if you think about as a patient,

you end up having a co-pay. you go to the emergency department. think what it's like to go to the hospital when you don't need to. if you are a chronic patient and we have someone see you in the home making sure you are taking your medications, you can be with your family get healthier and have a much better lifestyle. >> you are a young company. you only started four years ago. what is the landscape? what else does what do you and what would be the heights of the industry you would like to climb? >> i don't think there is anyone who does what we do. we've been in the health care industry for years. we see the health care system needed technology people to do this. we built a unique offering we partner with the organizations we work with for five to ten years, hopefully 20 years. it is bringing everything they need to go through this transformation. >> this new structure is part of

the aca what happens if the supreme court strikes down the ability of the federal government to operate those exchanges and puts the aca into real jeopardy? >> you look at massive costs in the medical industry. we've got to do something about it. employers want more value for health care. the government does. we've got to move to a model where we are reducing costs, healthier patients. >> you don't think it will matter one way or the other if it's in danger? >> the train's left the station on costs in health care. we can't afford to pay more but get less value. there is an opportunity for us to ride solutions to keep people healthier. >> they have been helped by obamacare and this new model how medical fees are happening through doctors through the health base system. >> any time the government which spends 45% of the health care dollars just in medicare alone, makes a move and says we

are no longer going to pay you by procedure, we want to pay you for an outcome that, helps move the market. the rest of the market was ready to go as well. >> you are broadbanding information, great detail on individuals. at the same time you have the apple watch collecting vast amount of data that ibm is going to sell as big data more broadly to insurers. are the two separate or you get leakage here? >> the important thing is protecting information is critical. we've been in health care for a long time. we have all the security protocols to do that. we are not about selling data to other people. we are trying to keep people healthy and keep it within the providers we work with. >> the bounce you got this morning values you at over $1 billion. nice to meet you. >> nice to meet you. >> evolent ceo frank williams. >> thank you. an exclusive interview with

jan hatzius. you are looking at two airplane fuel gauges. can you spot the difference? no? you can't see that? alright, let's take a look. the one on the right just used 1% less fuel than the one on the left. now, to an airline a 1% difference could save enough fuel to power hundreds of flights around the world. hey, look at that. pyramids. so you see, two things that are exactly the same have never been more different. ge software. get connected. get insights. get optimized. the pursuit of healthier. it begins from the second we're born. after all, healthier doesn't happen all by itself. it needs to be earned... every day... using wellness to keep away illness... and believing that a single life can be made better by millions of others. healthier takes somebody who can power modern health care... by connecting every single part of it. for as the world keeps on searching for healthier...

we're here to make healthier happen. optum. healthier is here. by the time police arrive on a crime scene they could have little to go on. a vague description. a single piece of evidence. a partial plate number. with an app from ibm officers can now access over a billion police documents to find hidden connections and identify potential suspects. ibm analytics helps one hundred thousand officers work smarter every day.

good morning, everybody. i'm sue herera.

here is your cnbc news update. a state prosecutor says the pilot who crashed the germanwings flight into the alps was seeking advice about an undisclosed ailment. mazda recalling 940,000 older cars and pick-up trucks in the u.s. and canada adding to the growing list of vehicles under recall due to faulty air bags made by the takata corporation. >>. >> a south korean hospital with the largest number of confirmed cases of mers temporarily closed. it moved the patients to other hospitals to be quarantined to prevent that disease from spreading. >> a police car in colorado take a look at that. was swallowed up by a massive sinkhole early this morning. the sergeant on patrol said when he entered the intersection, the road gave way. the car ended up 10 to 15 feet

below the road surface. that's your cnbc news update this hour. back to "squawk on the street." >> back to the news of the morning. that would be the big beat of the month of may for jobs. nonfarm payrolls coming in 280,000, better than 225,000 consensus. will that change the much-anticipated interest rate increase from the federal reserve? joining us jan hatzius, chief economist for goldman sachs. you were surprised. you had a 210 forecast. is it a game changer for the fed? >> i don't think it's a game-changer, but it does reassure people that the jobs trend is clearly above 200,000. that was in a little bit of question beforehand. you had this weak number reported from march. it was only 85,000 before the

upward revision today. 223,000 for april. that raised the question whether the trend had maybe slowed to less than 200,000. i think with this number which was, as you said a very solid beat, i think we can lay that concern to rest. i think the trend is still clearly above 200,000. >> i guess if you are inside the fed and voting in the next few meetings particularly september, the question is why the labor market data is so much stronger than the rest of the economic data? namely what's happening with the consumer. retail sales. it's not like everything has been peachy. >> i think the labor market data have been petter. generally the survey data have been better than what you see in the retail sales and ultimately gdp data which retail sales are one important input. i would say the gdp data have been quite a bit weaker than the message you've been getting from

other parts of the economic data universe. i would put more weight on the labor market numbers and on the surveys. i think there is likely to be less measurement error in those than gdp. >> are you seeing enough pick-up in wages? still suggests tepid wage growth. >> still tepid. i would say over the last few months we've gotten a few data points that suggest things are starting to pick up. you saw it in today's report. you saw it in the employment cost index a couple of months ago. compensation for all numbers have been stronger. i would say it's not definitive. i would like to see one additional print. the next employment cost index at the end of july come in on the stronger side before it's defensive. there are signs that things are picking up. >> we had an exchange last month, the most important thing

was that the economies slowing. can we reverse that and say the economy is speeding up? these are figures we had at the end of last year. >> i think the economy has slowed from the pace of growth that you saw at the end of 2014. when we look at our ways of extracting the underlying signal for growth we found 3.5% to 4% growth pace for much of the latter part of 2014. we are no longer growing at that pace. that said, i think we are still growing at a pretty solid pace. 2.5% to 3%. i would mostly disregard 0.7% drop in first quarter gdp. >> the major market event of the week has been this route of the bond market. this heavy selling that pushed market rate index up. what do you make of that move.

where do we go for here? what does that do for growth? >> i think you've seen a lot of volatility in the bond market clearly. there was a sizable sell-off. there was a retracement of that sell-off. we've seen big jump in yields. a lot of this has been driven more by what's been happening in europe than what's happening in the u.s. today is an exception to this because the news here comes primarily out of the u.s. mostly, i think it's been the normalization from these extraordinarily high valuations extraordinarily low yields especially in the german market. that spilled into the u.s. market. >> where do you thing it will go from here? >> it will probably drift up further. we are 2.75 by the end of the year. i think we'll limit a little bit the growth in the interest

rate-sensitive sectors. i'm nevertheless optimistic about housing than long-term demographics which will be more important. not so much maybe from quarter to quarter perspective but two, three year horizon perspective. >> what will unemployment be in a year from now? s. >> i think it will be relatively close to 5%. >> is that full employment? >> i don't think so. i think there's slack in the labor market outside the unemployment rate. it's not just the unemployment rate. there are still people outside the labor force for cyclical reasons. >> locked outside the labor force. >> i don't know locked out, but they are outside for cyclical reasons. they still haven't moved back perhaps because they still don't perceive the same kind of job opportunities they saw prior to the crisis. i think you do have to take those people and the involuntary part timers into account, as well when looking at labor

market slacks. unemployment rate has fallen and is not too far from full employment. more broadly there is a decent amount of slack. >> we'll keep an eye on those temporary workers. jan hatzius, good to have you on jobs day. the dow is now up 31 points. over to dom chu. >> what else is up is dreamworks stock up 6%. upgraded the stock to a hold -- to a buy from hold. they set a price target $34 a share. the company cites positive investor meetings with management. also believes dreamworks will benefit from a shift to focus on younger viewers. shares up big about 5.5%. >> up next on the program, officials announcing a massive data breach of the u.s. government that could affect nearly every federal agency. the big question, is china behind it?

log on to tradingnation.cnbc.com.

you used to sleep like a champ. then boom... what happened? stress, fun, bad habits kids, now what? let's build a new, smarter bed using the dualair chambers to sense your movement, heartbeat, breathing. introducing the sleep number bed with sleepiqtm technology. it tracks your sleep and tells you how to adjust for a good, better and an awesome night. the difference? try adjusting up or down. you'll know cuz sleep iq™ tells you. only at a sleep number store where you'll find the best buy rated mattress with sleepiq technology. know better sleep with sleep number. the obama administration announcing a massive data breach that could affect nearly every government agency. officials are saying that china

is responsible. >> u.s. officials are in the process notifying 4 million current and former federal government employees their personal information may have been compromised in this attack. privately, officials are pointing to china. no one saying that publically in the u.s. government. nbc news in beijing reached out to the chinese foreign minister to get their rack. here is what the spokesman told nbc news in beijing. he said as we know cyber attack is hard to trace back. it's anonymous and cross border. you jump to a conclusion so quickly. chinese are pushing back on this allegation they were behind this attack. u.s. officials say it began as early as last year. at some point in april it showed up in the einstein system. that is a system they use to detect intrusions. by may, they were able to realize how much data had been

ex-filtrated from the united states. a deep concern for the u.s. government. what is unclear is what the chinese or whoever stole this information could do with it. it's not clear yet what is going to come next. everyone here waiting for the next shoe to drop. >> or where they could go in the servers. thank you very much. let's send it over to rick santelli in chicago. back to the main news of the day a blowout employment report. >> you know what? it's very difficult to disagree. it's very difficult to reconcile what's going on. many are going to say look at pricing pressures. the real issue nobody talks about, unintended consequences. you can show all the fertilizer

on your crops as long as you watch. ultimately the soil needs to be good soil whether it's reform in europe. yes, things are happening. seven years after a crisis things should happen. it was a good report. what i found and many foundbest aspects of this report are wages. it was up 2.3% today. if you look at a chart, we couldn't get one quick enough. that is the best level now on that particular year. you look back since 2009. that is good news. there is no mincing words as to how good of news it is. here is something that isn't being talked about a lot. we would suspect at some point with all the bloviating we did about weather in winter we would get kickback. november was 423,000. i'm not saying this number isn't

good, but what i am saying is the snapbacks finally occurred. they haven't snapped back to levels we saw at the end of last year. keep it all in perspective. the real issue is with this data, if the rate was at 1.25% instead of zero would this be a time the fed would be i need to lower rates? i think not. is it going to happen in december? i don't think so. i'm sure we all hope we are wrong because the market thinks so. look at charts quickly. intraday chart of five-year note yields. they zoom, zoom zoom. open the chart up a bit. this is significant to early march. what you'll see is that march 6th spike at 1.69 we blew it out. stretch that chart all the way back to september of last year and you can see that's where we

are comping. what did the curve do? flat fire. flattening dramatically. look what our neighbors did bund yields popped up almost to 93 basis points. the moral of the story is we are up 25 basis points or higher in 5s. there is your steepening. that's on the week. on the day, 5s are blowing everybody away in terms of activity. the market is doing a heavy lifting for the fed. fed should jump onboard. markets are ready. do it do it now! back to you. >> thank you very much mr. santelli. j. crew has a sweater problem. the company continues to suffer from sales and profit declines. privately-held store chain has been struggling with declining foot traffic. ceo mickey drexler addressed analysts on a call last night saying they got sloppy. >> it is our job as always to focus on what we can control in the business. we recognize there is work to be done and we're on it.

i've been through this before. it's never fun. it's hard work but we are all committed to getting it right. if we were merchandising well you would not only seat perfect crew neck again, but you would see the new colors. that's the fundamentals of what we got sloppy on. >> we haven't heard from mr. drexler on our show quite some time. it is a private company. they had publically-held debt. hence they do update the financial community on their results. having another tough time as so many other apparel sellers are. some say price points are too high. >> some say they are not producing fashionable enough sweaters or trends. we see michael kors. i'm looking at the sweater. there are plenty of colors but it's on sale $49.50 from the original $80 price target. that's what happens. >> if you were a bond holder and he goes into huge detail about sweaters and fits and colors i don't know whether that's good

detail information or a smoke screen where you're like okay whatever. >> he has faced challenges in the past and reacted and met with great success. he's lauded as one of the great merchandisers. we did a documentary a couple of years back on him. marking the top. we managed to do that. when you see one -- it didn't happen with amazon. >> they've got to get more into the athletic apparel. that's what's selling, at leisure. >> i thought they were a preppie store. >> they are preppy. >> i still buy a lot of stuff there. i like it. belmont stakes just a day away. there is more at stake than a triple crown for the american pharoah, the winning horse. their viewers, the biggest odds. not to mention the $1.5 million purse. we'll break it down after the break.

40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors that were just totally pitch black. those things had to change. we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks, young people are moving back in town the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back.

welcome back to "squawk on the street." we're watching shares of vince holdings, the apparel retailer, worth about $500 million at this point. the stock is trading well below its ipo price of $20 a share. they cut full-year profit and sales prices declines in the

low double-digit percentage rates. the company says it expects fewer shipments to offset retailers and all of that translating into a sharp move lower for the smaller cap stock, back to you. we were just talking about the difficult retail environment, dom, thank you. american pharoah could be the first horse to win the triple crown since 1978 tomorrow and that's lot at stake for everyone tomorrow. our robert frank is at the racetrack wither who. it looks like it's raining. >> it's getting wet, which is really good for american pharoah, a horse, he loves the mud. he loves the rain. he actually got his workout earlier this morning. we caught him on camera. was a really good workout. he's looking strong he's looking energetic. his owners and trainers saying he is a happy horse, right now. so he could make history. if you look at he's gone in terms of value, he sold two years ago for $300,000 at auction. now after winning the preakness and the derby.

he's worth around $20 million and he's won nearly $4 million in prize money. his breeding rights were sold for up to $10 million or more. sponsors are rushing in to attach their names to a horse that could make history. monster energy and wheels up signing on as sponsors in recent days and more could be on the way. >> we want to be part of history. what he's hopefully going to accomplish tomorrow, hasn't happened in nearly 40 years. >> now whatever happens, this horse again selling two years ago for 300,000, now worth $20 million. has been an amazing investment regardless of whether he wins and everyone agrees whether he's a great horse or an historic horse we'll have to see tomorrow. >> do you get to stay there for the weekend, robert? >> i'm not, i got to watch it on

tv tomorrow it will be a very exciting race. this place is going to be crowded and a lot of noise. >> nice to see you, robert frank there as we await results tomorrow. let's send it over to jon fortt for a look at what's coming up on "squawk alley" in the next hour on cnbc. there's a headline out today saying that apple pays uptick by retailers is disappointing. is that fair? we will dig in. and there's a massive hack of federal government information. is it china? a lot of people think so. and finally jobs more people have jobs more people want jobs. what does it mean for the economy, all of that and more coming up on "squawk alley"," tune in.

leave early go roam sleep in sleep out star gaze dream big wander more care less beat sunrise chase sunset do it all. on us. get your first month's payment plus five years wear and tear coverage. make the most of summer... with volvo.

(trader vo) i search. i research. i dig. and dig some more. because, for me, the challenge of the search... is almost as exciting as the thrill of the find. (announcer) at scottrade, we share your passion for trading. that's why we rebuilt scottrade elite from the ground up -

including a proprietary momentum indicator that makes researching sectors and industries even easier. because at scottrade our passion is to power yours. it is that time for our nail the number winner. it turns out our winner today for the may nonfarm payroll

report. we have a winner justin left frer tennessee. what's your winning model for guessing the jobs number? >> hey, sarah. i'm an investment adviser here and we watch you all every day. so you know last time it was steve liesman's model. i just tweaked it a little bit. but this time it was joe kernen's guess of 8675309 divided by 31 and you come up with 30,000. in all honesty i was thinking about the graduation in may and a stronger economy than some economists give credit to and i thought it would be a larger number than normal. >> impressive. way to go, maybe we don't have enough people playing in the contest. >> no we have a lot the economists get it wrong. >> apparently justin listens to us more closely than they do. >> thank you, justin and enjoy

your golf shirt autographed by all of us on "squawk on the street." we send it over to you, kayla for "squawk alley." >> a two-time winner. how about that. it's 8:00 a.m. at apple headquarters in cupertino, california, 11:00 on wall street and "squawk alley" is live. ♪ ♪ ♪ good friday morning, thank you for joining us. joining us this more is kara switcher co-executive editor at re/code. kara, good morning to you. and here for