sit rick shares jumping, elliott management has taken a 7.1% stake in that company, to present a plan which it says will increase shareholder value. it does say it makes the request with tremendous respect for the work management has done to date. >> bring your sticks t david led bert will be here the greatest teacher in the world. >> fantastic. make sure you join us tomorrow. "squawk on the street" is next. good thursday morning. welcome. i'm carl quintanilla, with sara eisen. david faber will make his way here in a moment. jim cramer is off today. retail sales are solid on just about every metric. interestingly, the ten-year did

not bust through 2.5. in fact the yields have settled back just a touch. our road map begins with markets continuing that rally as retain sales show a more confident consumer. does it change the calculus for a rate hike from the fed? >> lululemon stock sinks, but is it good news for the stock? they did it. nike to become the official on-court uniform provider for the nash. first, though as expected retail sales rose by 1.2. april and march sales figures were revised higher, and futures on the rise helped by the hopes that greece may be closer to reaching a deal with their creditors. it is about the retail sales today. 11 of 13 categories up march

revised up. there's been some notes this morning that may q1 gdp is revised up. >> especially with the growth you saw in the core numbers. we knew autos were strong. we saw car sales last month, best in years. we knew gasoline was strong because oil prices were up. but you also saw strength in places like furniture stores and retail apparel, building materials and garden supply dealers, a nice rise there. >> sporting goods up 8%. by the way, claims also hit in the last half hour 2.79 below 300,000 for the 14th consecutive week. so you can't complaint. it's not to write mom about, but certainly it could have gone the other way very easily. >> a little higher than expensed. but it suggests that claims are still historically low and the pace of firings is not that much

to worry about. you have better u.s. economic data and some overseas news rate hikes surprise from new zealand and -- the kiwi is getting crushed, i thought we were going to talk about that first. the cohead of global economics and kevin carroll, market strategist with steve. ethan, just more proof here in the retail sales, that first was an aberration picking back up especially the consumer after that brutal winter and the poor congestion. >> yeah we've had about a month now of better data. we had a good payroll number recently good housing starts good auto sales, now the brought retail sales report. it had been a big mystery to economists why retail sales had been so weak in recent months. this kind of takes a step closer to where i think we should be. the u.s. consumers hasn't

forgotten how to shop. >> that would be good news for the economy, you're seeing the reaction, kevin in the future dow futures up 53 after they're coming off their best days since early may, are we breaking out to higher highs. is this enough to suggest that the fundamentals back that up? >> you are at new highs, and i think the market will be looking higher this morning. i think ultimately the first quarter was -- looked more and more like an aberration as you pointed out, it seems to be getting better. it's only been a few weeks we've seen that kind of pattern in the data. we need to see more of that but clearly the data is getting better. what the market is telling us too is getting better. inflation expectations those have firmed somewhat. the spreads in the bond markets, corporate bond spreads, they had widened through the fall into the spring. and you're seeing a big more

risk-taking appetite on the part of equity investors, and the bonds are selling off, so all of those things to me suggest that maybe we're picking up traction in the second quarter, a very positive thing for the economy. >> ethan, the 2-5 on the ten-year, do you expect ugh to break through that number? is it a reflection of a stronger u.s. or what are what's happening overseas? >> i'm glad i'm not a bond forecaster, because the market is very tethered to what is going on with the german and european. most of this run-up has been driven by the fact that bund yields went basically from zero to 100. it's pretty much a big move so unfortunately, you know it makes it have i hard to call the market. i do think the u.s. yield should be inching up a bit, given the improvement in the economy and the likelihood of rate hikes later this year but the recent move is very much driven by

europe. >> so i guess, kevin, the question from here with the data, is there enough proof with the federal reserve to raise interest rates in september? we'll get a june meetings next week. and it's interesting that the world bank and imf are coming out and telling them to hold off to next year when the data is telling them a different story. >> if you look at some of the main things the fed will be looking at we moved down to a level that used to be considered, or they talked about previously as being close to full employment so it's becoming harder for the fed to rely on the very weak data xwoimt. not to say it's totally fixed, but it's getting harder to fall back on that excuse. the inflation piece, that is still rely tifly weak but i think with the fed sitting at zero for as long as they have been, i think to not raise, or to not follow through on the data that they have been looking

at, which would lead them to raise interest rates, would cause some credibility issues. so i think they very much want to raise interest rates. the data so far we are seeing seems to indicate they will continue and raise interest rates probably in september. assuming that's true kevin. on a shorter-term basis, is this price action going to go anywhere? i mean the narrow range that we've been in one of the narrowest in 20 years is beginning to drive some people a little mad. i mean, what's to get us well above 18,000? >> it's always tied to economy growth. to the extent the economy avoids a recession, i think that will be the bigger question here. it's nice to see that the today thea resized higher as we get more complete data but what it will come down to is economic growth. multiples are a bit higher so to me you really do need to see now real growth in the economy. that's why it's very encouraging

the last few data points have been pointing in the right direction. >> you know what i would add to that is that the market should not by fairing the fed right now. the fed is hiking only in the context of better data. this numbers moves them a step closer to hiking but they need better consistent data. this is a lower inflation growth period ahead, they shouldn't be afraid of a rate hike. >> let's say we get a poor number right before the fed meeting in september on jobs. i know it's been consistently good. then what happens? does the fed wait? >> they keep saying it's data-dependent, and i think we should take them literally on that. they had they need to do so consistent better numbers. that would make the september meeting extremely awkward and more of a coin flip whether they go or not, but if the recent data trend of the last month

continues, they go in september. if we falter then maybe the imf appeared world bank are right, maybe they shouldn't be hiking this year. >> all right. we will see ethan harris and kevin car ron, to you as well. a lot of competent-specific news today. lululemon selling his family's entire stake. the sale would involve more than 20 million shares more than a shall% stake in the company. wilson has clashed with management as you may know and the board over the retailer's strategy recently stepped down from the board entirely actually has some competitive ventures going on with his own family that might consider a conflict. >> though it's not yoga but apparently it sort of looks like that. calling chip wilson a disruptive influence, says this is actually going to be a buys opportunity, the fact he's getting rid of his

shares right now, this is obviously putting pressure on the stock. the stock is up nicely this year. it turns out men are buying lululemon. david, i don't see you -- >> i got a couple as a gift a year or so ago. i do wear them -- >> sort of sweatpants, yeah. >> i don't usually wear them out in public. >> men's new underwear is not doing too well not enough staff ratings on the website, men aren't a fan of it. >> but the talked about the growth of tismtath-leisure. and there were two stories today, and you brought this up with the disappointing sales of j. crew because they have not been able to seize on that growth in that category that lululemon has led. >> nicky has some issues, the styling is getting complaints the quality of some of the

sweaters, comps down 8, inventory up 4. he took a wrong turn somewhere. >> and it may have had to do more than just the color of their cardigans. meantime tau you about ath-leisure, a big job for nike announcing an eight-year marketing graham with the nash. it would broadband the league's official uniform sponsor, replacing adidas and it will become the first apparel partner to have its logo appear on nash uniforms. the terms of the deal we aren't disclosed, but a numbers of reports including "wall street journal" and espn say it could be over a million. and that probably has to do with the fact they can with put the swooshes on there. it would be the first time for the nash. adidas has their logo on the

warmup apparel. as underarmour tries to get in on that market with curry, for instance. it's a huge win for nike. we continue to be amazed it is strength for basketball. for abc, the best game 3 ratings ever. that's how much people are interested. >> because they have these two star players going up against each other. it's interesting to watch the nike versus under armour as they try to break into the market, but nike just a further sign of what they do best. they make the deals with the league. they have a similar deal with the nfl. and they're able to merchandise that and really make money. nike is on its game as a number of analysts cover the stock have suggested. >> sort of the same argument with disney. the cost of acquire some of the they properties but if you're able to monetize can you make

up for it in a hurry. >> and nike is facing a number of challenges on currencies and some of the international pressures, and it's been good navigating around that. when we return david faber faber's exclusive conversation with jack ma. and a tech investment banker who expects the virtual reality market to hit so150 billion in revenues in just five years. we're looking at a second day of gains. more "squawk on the street" live on post 9 from the nyse, when we return. ♪ ♪ ♪ it took serena williams years to master the two handed backhand.

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welcome back jack ma chairman and founder of alibaba in the states the last few days though now he's left and proceed motting his companies as a place for small business toss list their products in china. sort of a charm offensive from mr. ma. we did get a chance to sit down with him in chicago after he

addressed about 300 small business owners. i asked mr. ma of course why not just buy ebay? he's indicated very, very completely i would argue that they want to build it rather than buy it and all of the problems that conceivably come along with that. and he continues to be focused on the idea that he can succeed where others have failed. >> i think this time because we have a 350 million buyers in china, so we think about bringing the american small business to china, bringing europe small business to china, because the buy side will be easier. if you don't have the buy side it's difficult to help the supply side. >> ebay for its part made a lot of missteps in china allowing al i baba to become the dominant buyer there, despite the fact that so many small businesses use the ebay platform to sell

their wares, but they don't reach 350 million people in china. jack ma always very open about his feelings if you will always willing to share his sense of the world and his part in it. last time in november he didn't seem particularly pleased with what was going on in his own personal life. i asked him, are you feeling better about things? >> i think i always feel good about the world, always will feel good about the others but i just think whether too much work for me whether i should you know keep doing this whether i should leave more opportunity for young people. what should i do? these are the thinkings that make me too busy. i want now i've become chairman and now even busier. if you want to be doing a good job as chairman there's so many things you should learn and do.

so i'm good. >> you don't think seriously about tipping down asstepping down as chairman? >> no never. i have a long way to go making sure the team is strong enough and making sure jack it's time you retire. i would. i'm a teacher. i feel proud, as teacher, you always want students better than you are. you always want young people better than you are, and i always want to replace me as possible. i'm a little bit over 50. >> we're the same age. don't get me depressed here. c'mon, we've got lots of time. >> we have to face the reality. >> of course he's very philosophical, always interesting to speak to. he does play the broader role as chairman. the fact is he won't get down in terms of the granularity,

whether gmv, how it's tracking mobile is a percent of the gnv overial. he's dealing with the broader themes and long-term strategy. make no his take he's the single-most important deciding maker, but it's the broader themes but developing generations, making decisions for the next 10 to 15 years he focuses on. >> you've got to remember he's dealing with political pressures we don't understand and that has to color everything he says about dealing with the united states. >> it's such an interesting thing. i asked him about that carl he came out very sanguine. it's a good and important point to keep in mind, given the tensions frankly between our country and china, particularly as it relates to trade. as we all know cyber-espionage,

military concerns in the south china sea. >> look at the headlines today, looking at whether or not they're trying to find out in this would-be hack finding out people who cooperated or have u.s. ties. >> he comes back to the same themes namely the internet will be a great uniter and help us get together to fight our common problems. >> i think it's interesting that chinese consumers want to buy american-making small business products. we'll see. >> we'll see. a lot of agricultural. >> after that giant stock market rally, awn ten industrial groups finishing higher yesterday. we'll ask ar cashing what he expects today, just ahead of the opening bell. it looks like we are building on yesterday's gain. s&p up four on the back of strong retail sales. more "squawk on the street" from the new york stock exchange, when we come back. . and apparently, they also love stickers. what's up with these things, victor? we decided to give

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just about six minutes to the bell on this thursday. let's get to art cashin. good morning to you. >> good morning. >> are you more interested in the retail data or greece? >> i'm still interested in greece, though the sense that merkel wants a deal and she's going to make sure they get one, that's what gave us the big short covering rally yesterday and continues into today. most of those rebound rallies are not one-day affairs, they tend to last two to three days. we should be in reasonably good

shape. would like to see the volume build a bit. we're not very far ahead of the 50-day moving average. if you want to be up 200 points you also ant to see volume. >> up volume impressive relative to down volume. well there's no question about it it was up in the high 80s. usually that does give you a little more follow-through but i think it was a very thin marked. if you had to cover a short of 10 million shares normally you would pay up less than half a point. i think yesterday they had to pay more than three quarters. we're going to ask you to stick around. a lot more "squawk on the street" back in just a moment.

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you're watching cnbc "squawk on the street", live from the financial capital of the world. we'll get the opening bell in 90 seconds on this day where we're focused on u.s. data especially the retail sales that came in solid on just about every

metrics. art cashin is with us. when you say these headlines result in rallies that last two or three days are you referring to greece specifically? >> refer to the fact that the market was oversold. when you get any kind of new that is provides a rebound bounce. those rebound bounces don't tend to be one-day event. we should by okay for at least today. >> within that rebound bounce as you're calling it yesterday there were very strong sectors. functions, for instance tradingty highest level. citigroup at a six-year high right now, i guess on the steepening yield curve, higher interest rates. that would be good for banks' profitability. the ten-year is driving a lot of action. >> the yields are a key story. today you can see that the yields are backing off a little bit, probably because the world bank has told the fed to hold back. >> that's another headline we forwarding, the world bank cutting their global outlook, warning about some of these

developing sand they're at the end of the cycle. >> higher rates will happen. >> thank you, art. art cashin. there's the opening bell. at the big board, a biotech company axovant celebrating its ipo today, and over at nasdaq, adidas. speaking of biotechs amgen will be in the news just as regen ron was, got that positive recommendation from the fda parnell for the cholesterol drug. it's been tough going for some of them because the panels though the fda normally follows their recommendation, are not unanimous and they are getting some scrutiny as this new class of drugs makes its way through the pipeline. >> all-time instrument groups are higher.

we'll see what happens throughout the day. box will be a mover. second earnings report as a public company, the stock was up sharply in the premarket action after a rocky earnings pertain. this one was better the louse was smaller than predicted, subscribers higher. cramer is not here today, but he did tweed on you to aaron levy congratulations, much smoother conference call, because there was a mix-up of the communication about how many shares were outstanding. part of the story, carl is there's a lot of short interest a lot of people betting against this stock with all the competition in some of the cloud storage wars going on over pricing. cash flow was better than expected. 3.7 million pays customers, up 70%, so you're right about the action on box. that will be interest to watch. we mentioned lululemon earlier

on saying that chip wilson of course, filed to sell 20 million shares, the largest stake-holder. that filing allows him to sell. it shows an intent to sell. wilson says through a spokesperson, though they filed, they have not sold theory shares so far. it enables the sale if they choose to do so. >> the stock, though is up 20% so far this year looking next to the s&p 500, up 2% not bad. lululemon has certainly been one of the gainers. also in is one to watch. yesterday energy shares had one of their best days in a while. weaker u.s. dollars, energy shares coming strong here along with materials with commodities, energy stocks are up again today. airlines transports are finally -- i wouldn't call it good et some love but at least? respect today.

we're seeing the airlines trade higher. delta, the pilot union leaders did approve the terms of a new tentative labor agreement. also fdx, federal express, citi adding it to the focus list sake this will be a focus year in terms of capacity putting volume on third-party ventors could improve efficiency. we know what a tough run it's been for some of the transports. >> i'm also watching the utilities again because the ten-year has been a key focal point of the markets here with higher yields in a sharp move we've seen at highest levels since back in october. interestingly the ten-year went higher on the back of strong sales. it has been unable to get above that 250, but obviously you want to watch shares of utilities, telecoms those that are very rate sensitive, have the higher

yields tend to do poorly lately on the back of higher yields. >> you know we talked about the strength in retail sales, and pretty good numbers, but hog gets a downgrade out of wedbush, crichton awn underwhelming acceleration in demand. >> they're all getting hit by that strong dollar. >> hilton brand, saying they should deliver healthy earnings growth. housing is working okay today. lennar horton even some of the ancillary companies. >> and this is on the back of what everyone is trying to fit out. we sought mortgage applications soar last week on this idea you're finally starting to see higher mortgage rates, people rushing into buy, not on higher rates, but that they'll go even higher so you have --

>> century 2 is and the like. >> yeah. >> i think cramer said yesterday if you haven't locked in by now, you're kidding yourself. >> or get in quickly, because rates are going up. >> nike is going to be a winner no doubt about that. we mentioned this new eight-year deal with the nash to become the official exclusive on-court apparel provider a big marketing deal big merchandising deal this is a global deal by the way. citi puts out a note saying it solidifies the dominance in basketball. could add around 3% to earnings per share? >> wow. >> it's material for sure. >> certainly from a revenue perspective. and the note actually who i think we'll talk to that analyst sell they'll be able to monetize this deal better than adidas, their predecessor, simply because they can put the name on and the logo. only dow stock that is negative

is ge on some reports. reuters i think reporting there might be some afternoon trust concerns over in europe over the al strom deal. >> reuters apparently has a bit of a clue about what they're going to say. we're just not sure yet. we are seeing a bit of a pullback from names that did well net. a netflix in the red today. colgate in the red. harley we already mentioned. you would expect make some profit taking. >> i thought you were going to say for netflix. the best performer in the s&p. >> by far. it's officially doubled for year, and i think the next biggest gainer was health care stock that was an m & a speculative gain. so with that the dow is up 71.

let's get to bob pisani on the floor. >> good morning. nine gains today. interestingly, interest rates sensitive groups are up as bond yields have moved down today. consumer discretion john kerry, home builders and retalil that's the big story. i would say fractional gains, so lb, kohl's is on the up side. j.c. penney is on the up side. zumiez but some interesting strength, so building materials, garden was strong clothing store, that's online. i watch that all the time these are respectable gains. overall core retail sales, i mentioned very good numbers here. if you look at the year for retailers, it's been extremely uneven, and very different.

so department stores have had a horrible year, most of them are in correction territory. macy's has done okay luxury retailers have also had a different year. put the luxury retailers back up there. this is correction shun territory, even bare market territory for companies like michael kors and fossil on the year. apparel companies have had a terrible time of it. aeropostal is down gap is down. tjx is a bit better but still in a pretty bad situation. if you're wonders what's done well in 2015 we've had big gains in shoe companies, the auto parts companies, they've done really well. home improvement? anything home improvement related has been simply fantastic. mohawk stanley, black & decker masco, sherwin williams those have all been real big gainer

so you can buy the retail group, xrt is the spdr etf for retail actually up about 4.5% this year, somewhere around there, but if are with you to try buying individual groups forget about it. department stores are out. any kind of apparel are on ultimate outside. however, shoe makers did very well and home improvement did very well. you have to lift the hood very carefully to figure out what's winning and losing here. sarah, back to you. >> thank you, bob. let's head up to the nasdaq where bertha coombs is standing by. what are you watching? >> i'm watching the levels in the nasdaq but about half a percent from the all-time high. the all-time close was 5106. that's the number to watch as we move forward here. today it's about the big caps moving.

one of the big caps is citrix. this stock hasn't been doing much at all over the last year. elliott management sees the stocks with perhaps spinoffs, some units being valued -- i looked back. that stock hasn't been at that level in the year 2000. biotechs continue to be on fire. biotechs once used to be the issue with the like of carl icahn and investors going after them. now it's really all about consolidation and about the daysa. amgen is moving higher with that cholesterol drug recommendation from the fda panel, and we continue to be regeneron a bit under the ropes as they had more questions with their recommendation for approval.

those cholesterol drugs are something that the health care industry is looking at. this could be another widely prescribed expensive band of drugs. back to you. >> bertha thank you very much. let's head down to the bond pits after retail fell. interesting interestingly the dollar is stronger. >> absolutely. the way all the markets hook up at the hip is definitely in flux a lot lately. the notion of such a decent retail sales. it's decent. i would venture to say that the fundamentals right now are important, but as you see, we had a range of 249,8 to 242 in 10s so far today. up 1.2 data you can clearly see there was some roll tilt, but the established trend was pretty much her in place, a two-day chart reveals, gentlemen psychologically you always have

2 and a quarter, 250, 275, some psychological resistance but as you open the chart up we're comping to bakley the latter part of the month. the left side of the chart, high yields there is 262. that's what many traders are looking at. is it going to happen in a straight line? most likely it isn't, but remember the yield close -- friday's close is important, 241, basically that is holding. the yield curve, everyone is talking about it steepening they're right. that was proceeded by a whole lot of flattening but the last couple days as 138, it definitely seems to be going the other way a bit. there's a bit of flattening going on that's key to pay attention to. re werchsed bunds earlier. let's look at a chart. the yield range today alone was 103, 97.6. fascinateing how it's not paying nearly as much attention.

that is definitely something to pay attention to. switch gears for attorney exchange, dollar index, you could clearly see this isn't an easy trade. it's kind of bumpy. dollar/yen, a lot of blah blah blahs going on between various branches of the government. as you can see on the market lately at least from an export standpoint, they seem to be more to the down side dollar picking up on that trade, carl back to you. >> thank you very much rick santelli. wee get nat gas later this morning. jackie is at the nymex. >> let's talk about oil before we talk about nat gas. you have a stronger dollars, but again stuck in this 58 to 62 range, it doesn't want to break out despite the fact we were told yesterday there was a big inventory drawdown. rising more than 9.6 barrels a day.

it has a monthly report out this morning saying it will increase in 2015. interesting, because that conflicts with opec, and what it said in its monthly report yesterday. so a lot of confusion about the supply/demand equation. and that is why we continue in this tight range. in terms of nat gas, we are looking to see a bit of a build today. prices right now trading at $2.88. traders telling me they could take a little breather before we head to that $3 range. back to you. thank you very much. energy shares coming under pressure on. coming up amazon is one of the big tech wincer so far this year. the outlook for the stock and the take on the plan for growth. when we come back to "squawk on the street."

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and life gets lived. with xerox, you're ready for real business. welcome back to "squawk on the street", rupert murdoch is preparing to step down as the ceo of the media giant and hand that title to his son james. according to numerous sources

close to the murdoch family. an announcement expected in the near term. while it's unclear whether the reorganization would take place this year or at the start of 2016, mr. murdoch will continue to be the chairman while his son lake lynn would become -- part of the management reordering at fox under which its current ceo will step down from that role and turkey on a yet undwid role as an adviser. mr. carey was widely expected to exercise an option allowing him to leave the company at the end of this year. now sources tell me he is likely to remain in some capacity through 2016. while james murdoch would take over the day-to-day management of fox, he would work in tandem with his brother and hits father. sources who have spoken with the

murdochs in recent weeks tell me they have shared their plans openly and described the new roles as a, quote, partnership. a fox spokesperson said the matter of succession is on the board of directors agenda at the next regularly scheduled meeting and decline further comment. that meeting is expected i believe in the next week or so. while no one doubts that the elder murdoch will have the final say, mr. carey stepping down will leave the company without a layer of senior management separate from the family for a long time. james murdoch who gave up his job four years ago has been winning fans for his work as

co-ceo. as one source who knows both james and lachlan well described it as james will day on the day to tail resumer murdoch who through the murdoch family trust controls 39.4% of voting stocks at fox is not expected to change much of what he does from day to day, but the change at fox clearly an acknowledgement that the next generation of murdochs is ready to take its place in leading the media giant. we wanted to get that news out there, and finally we have. >> again, i think it's important to note when the final decisions are made they still will be resumer murdoch's to make in

many ways but while this has been telegraphed for some sometime, it will take place. james will become the ceo. and lachlan will have an important role. so it will be interesting to see how the two brothers are able to operate together. as i pointed out, together and without the presence of a peter churnen or a chase carey in that c.o.o. role. chase carey is expected to stay on. that was somewhat unclear, because many people expected, having spoken to him, that he would exercise this option to leave the company by the end of the year. timing is still somewhat unclear, but carey may stay in this advisory role so he'll stay with the company, but two brothers working together and of course their father continuing as executive chairman at fox. no doubt, though a momentous, momentous movement in the management ranks at this -- >> where's the sister?

>> elizabeth is still, yes, but she's not a part of this. still to come. netflix getting ready to launch season 3 of "orange is the new black." the dow adding to its gain up 85. we're back in a moment.

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the e-commerce giants addressed shareholder questions about diversity, growth and why chosing a profitable business was not as easy as a tender swipe. good to see you back colin. >> good to see you, carl. >> are you feeling better? >> i like the broad e-k34ers. i'm a kinding owner, a prime member for a handful of year. we odd lots of things once you get hooked into the prime ecosystem, they've got you, but from an investor perspective, you have a company with already a $200 million market cap. what's the up side?

but where he don't have profitability. what got investors excited on the last quarter was the profitability of the amazon web services, about 7% of revenue. that's a nice business very fast-growing, 49% revenue year over year but it generated the entire operating income for the business. the reports a few weeks ago they were going to offer cheaper items, freed shipping non-prime members. how do you make a profit off of that? >> right. that's the concern on the core business right? the expectation among many investors is that if the investment cycle tapped down that the core business would run an operating margin somewhere between 5, 7, 8% but you still have five points of shipping losses that are happening in there. that's what a typical retailer

margin is. while we like the investments they're chasing after. there's still a lot of uncertainly and question marks. >> i want to ask you about apple's attempt to build its own web services and whether that would be a liability, but we've got to go. good to see you, c.g. the head of sovereign ratings on the firm's downgrade deeper, the dow is now up 91. don't go away.

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♪ welcome back to "squawk on the street." i'm carl quintanilla with sara eisner david faber with us as well. meeting expect aches. the dow has healthy gains, crude continue toss give back a bit after getting close to 62 yesterday. >> more economic data to report breaking news rick santelli in chicago for that, rick?

>> thank you, sarah. don't you love data thursdays, up four fents, april, april business inventories. now, keeping in mind april is obviously the first month of the second quarter so up more than expected. we'll have to look at atlanta gdp to see if it's updated. of course better inventories, this is actually the highest month over month positive change since may of last year. one month shy of a year. carl, back to you. >> thank you, rick. rick santelli. stocks extending their really. the gains actually lifting the transports. what should investors be focusing on now? dan, good morning to you. >> good morning, sir. >> i see you think that maybe we revised q1 up to fla. >> whether it's minus 5, plus 5

or flat is really irrelevant to almost everyone with whom we're speaking. the question is whether or not there will be a bounce back. i think the second quarter will be much better than the first quarter. people who don't believe some of the numbers, there's nothing i can say to convince them. they're convinced there's a conspiracy one way or the other. we've had issues in the first quarter from an economy standpoint which has translated into asset markets repeatedly. the treasury market for instance last year that's when we revisited yield lows, then it occurred again this year. our view last year and this year was something is going on in the first quarter, whether it's real, i.e. weather, or statistical in nature is besides the point. the issue is whether the year will be better thereafter. i think the data is pretty clear

on that front. for people who don't believe it i have nothing nice to say, so i choose to say nothing. >> i wonder if you can put this whole fed policy dough bait in a gobble context, and that is the data is better here. that suggests the federal reserve can go ahead with raising interest rates. isn't it important that the rest of the world seems to be easing? just overnight you had two surprise decisions, but sort of the best of both worlds. does that compensate for the pressure that's going to have when the fed moves? >> listen it's clearly something that the federal reserve has to take into consideration that global demand remains weak and granted new zealand is not exactly a tier 1 central basic, but global central banks are easing rather than tightening. for a lot of our clients that's a go-to debating point. a lot of people would argue the fed can't raise rates, look at

the dollar it's so strong because everyone else is easing. i very much am sympathetic to the view but the question -- i don't think it does. it probably prevents them from hiking too much, part and partal with the larger thesis they'll by slow and gentle but it doesn't mean they can't raise rates and call it -- >> tom porcelli joins us as well. were you able to hear what dan? >> yes. sorry i was late. in fact i would argue -- i'll just amplify what he was talking about. people have to come with grips with policy divergence. look at any cycle, the fed was raising rates almost two years before the ecb was raising rates. i do think that again, as dan said, i think it's going to be a strikingly slow cycle, which is to say an every other meeting

process. i do think despite what's happening from a glob perspective, i don't think that's enough in and of itself to derail the liftoff. i think the fed was declined to go slow anyway. if i could jump in real quick. since tom is going to agree, i'm going to agree with his agreement with me. >> he's really on to something. >> good job, tom. >> thank you for laying it all out the right way. >> thank you, sir. if i could also add -- i mean you generally -- if you do a bit of work on the last tightening cycles, you would find a lot of similarities in that a lot of commentators and economists and pundits thought that the tightening cycle would be slow and steady so to speak. obviously the fed ended up to some degree doing that, but tightening at every meeting thereafter. i don't think that's going to happen this time around but i am struck by the similarities of it's going to be slow and steady, don't worry about it

because i don't know -- we certainly didn't know what the cycle would look like this. >> actually if i could pick up on that point. i think this is an important part of the discussion. i find it so disingenuous that the fed is forcing us to think about their terminal fed funds rate. the reality is i'm a forecaster i do this stuff for a living. i'm telling you my forecasting ability beyond the next year is so limited. the fact that the fed -- and i think the fact that the fed thinks that they can actually guide policy or set up path for policy by saying this is what we think terminal fed funds rate is going to be is sort of laughable. i have no idea what the economy will look like. >> very quickly, the only factor we haven't talk about is inflation. where is it in this better economy? >> what i would say it's always been there, it just depends on how you want to look at it. people are hyper focused on -- the right way of looking at inflation, particularly with an

instance like now, is to either one, look at core. if that seems too dubious a concept for you, strip out energy. x energy cpi has been running at a 2% pace for the better part of the last year. that's the fed's targets. >> next time can you find something to disagree about? that was embarrassing. >> i disagree on his time of arrival. [ laughter ] >> sorry about that. when we come back s&p downgrade in greece warning it will likely dwult within the next year at the same time the rating agent reaffirming the rating on the u.s. we'll talk to john chambers when we joins us next live here at post 9 when "squawk on the street" comes right back.

not so optimistic for greece, downgraded to triple c from triple c-plus, outlook negative. john chambers joins us. john, does it really matter if you're taking it from junk to deeper into junk? >> you know we have 20 or so gradations from aaa to d. each gratation means something. we find if we give measured rating actions to the market in a regular manner they find that more useful. >> do you think it will pressure the leaders to making a deal

here so greece will not have to default on the imf payments? >> no i don't think ratings agencies are foremost in the minds of greek policymakers. >> do you think they'll be able to make the deal? >> at a ccc level of probability, i getting you said say so but the ratings indicates that we think a default on commercial debt is likely and imminent. i would add if a default to official creditors, like the imf or eu would not be a dwult under our criteria but obviously would be a sign of very high financial stress. it's a three or four%, without

too much of an issue. most of them have been marketingly reduced. bhald have to happen to take them above the level they are at right now. this current government is opposed to a new program, but you could get a new government before then. >> every incremental would-be agreement is knocked down in-house by the judicial system. that's been an issue in some other countries. greece made a larger fiscal and

economic adjustment with any other country, and they had up until this year they were beginning to run a current account surplus the economy was beginning to grow and the current government has pursued a different tack. and it's resulted in a sharp fall in tax revenues and the economy contracting again. >> what about the u.s. john? what would it take to get an upgrade there back to aaa status? >> right now we have a stable outlook, which would indicate the pressure upward and downward are balanced but if we thought we could see greater bipartisan cooperation on fiscal and economic policy that would certainly help. we've had two bouts with the debt ceiling that were quite dramatic.

also in october of 2013. we believe this we're not going to see that level of brinkmanship against but we do see pockets of discord that can really interrupt you know economic growth and policymaking overall. once we can get a bit more comfortable that the united states can pursue a more normal working accomplice cal relationship, i think that would be beneficial for the rating. this week paul volcker had that budgets at the state level are not reliable they're spending down the road in irresponsible ways. what was your take on that. >> if you look at the overall picture in the united states the main issue is at the federal level, not at the state level, with the one provicea that the states have unfunded pension

liabilities, but the ferm government has even larger liability. so most states have a balanced budget rear before capital expense further, if you look at the overall general government debt. you know the states contribute i don't know maybe an eighth or a seventh, minus the fiscal assets. i don't think the states themselves are a probably, but against they do have unfunded pension liabilities that probably need to be renegotiated. does it matter who becomes the next president, which party? >> no i don't think it boils down to that. i think it boils down to the

legislate i have branch and the ability of individual elected officials to you know to reach across the aisle. >> we'll see what happens in the next psyched. thank you, john. . boeing is out with its outlook for the year. phil lebeau has those head lines. good morning. >> every year before the paris air show boeing gives its outlook over the next 20 years. this is not just for boeing but for all aircraft makers. here's the projects for boeing. it's an increase of 3.5%. by 2035 with the biggest demand in single-aisle plane.

boeing says the global airplane fleet will double in size between 2014 and 2034 going automatic way up to 43 those. the biggest growth for airlines broadband in asia. as you look at shares of boeing remember, we will be there, talking with jim mcnorthwesternie. thank you so much. when we come back a shareholders meeting where some frustrated investors are pushing for a one share/one vote policy. big day for facebook what you might be doing with that stock with the dow up 98 points. don't go away.

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simplify the way work gets done and life gets lived. with xerox, you're ready for real business. as i was first to report last hour rupert murdoch is

preparing to step down and hand that title to his son games. an announcement is expected in the near term. while it's unclear whether the reorganization would take place this year or at the 2016 mr. murdoch will continue to be the chairman while his son lachlan, currently a non-executive cochairman will become an executive coy chairman. as part of the management reordering, chase carey will step down from that role and take on a yet undefined role as an adviser to the company. mr. carey, who didn't return my calls for adopt, was widely expected to exercise his right to leave from a contract which would allow him to leave by the end of this over. now at the -- now sources tell me carey is likely to rein some

compares perhaps as an advisory role while james source who is have spoken with the murdochs saying they have shared their plans openly and dry the new roles, a fox spokesperson would sigh at the next regularly scheduled meeting and declined further comment. mr. carey's stepping down will left the company without a layer of senior management. for many years that role was filled by peter churnen, he departed in 2009 replaced by mr. carrie widely lauded by shareholders for his management of the company's cable networks. james murdoch who gave up

husband job after the hacking scandal that envelopes that company years ago, has been receiving some lauded saying he has matured as a leader they do admit he has a detailed knowledge of the operations and is a driving force behind the expansion into digital distribution. as described it james will have the primary role day to day, and lachlan will have more of a long-term strategic role. rupert is not expected to change much of what he does day to day in both his roles as chairman of fog and news corp., but clearly puts his sons in charge for the 21st century, which of course they changed the name when the century changed. it will be interesting to see how these two brothers are able to operate together.

interestingly, shares of time warner went up a bit. there was a brief that perhaps chase carey put on the brakes when they were seeing that company. we'll see whether they reinvestment that deal down the road, and i mean down the road. >> shares of facebook down slightly, and the planned announcement from oculus. let's bring in colin sebastian. good morning to you. >> good morning. i think what we will see is more detail about oculus specific price points. next week we have a major industry trade show e-3, where there will be a lot of focus

about virtual reality. so i think they wanted to get ahead of that and then set that expectation up for next week. >> why facebook? why would they want this particular technology? >> well the company from really the position of mark zuckerberg is looking ahead five to ten years, and virtual reality or augmented reality, those are markets developing very quickly. facebook neither to be on the forefront of some of that develop. whether it ends up become -- or whether facebook simply gains some expertise in the market either way they're positioned to be a leader in virtual reality. >> colin, i'm curious about what you this i about the latest efforts on e-commerce, the buy button and the collaboration with shop i fill to use their

e-commerce platform. where is facebook new jersey period of test snug. >> e-commerce is increase gill driving, but more so google even facebook. shoppers are discovering products through these applications, so by adding a "buy" button transactional capabilities, it allows more retailers, and for facebook it gives them potentially an incredible at stream. we already know there's strepgt in social in mobile ads. is there something to move it markedly either up or down? >> quim frankly i think coming out of q1 it did get swept up a

bit. -- and i think over time facebook will, really empower of its own revenue streams will ultimately show up better than the other platforms. we think the stock will return to a better performance in the second half. >> colin, good to see you again. thanks for the time. >> thank you. appreciate it. straight ahead, nike spending a reported $1 billion to provide the nash's uniforms and be the first company to put its logo on those uniforms. it is the best performer in the dow. we'll have more on nike and other movers when we come back. ♪ ♪ ♪ at chase, we celebrate small businesses

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welcome back to "squawk on the street." i'm jackie deangelis, the eia out with the nat gas storage report. we're wait fog that number to come through, but we do have a bullish number here. we just moved two cents, where nat gas is trading right now. what's interesting is we have moved very far, very fast to the up side about a 10% jump in one week alone, but still traders are saying as we have broken through the key technical levels that $3 mark is not out of sight, especially as temperatures are getting warmer and people are uses nat gas to cool their homes. these prices are to the up side now. now over to you, courtney reagan

with a new update. here is the cnbc news update. the search continuing this morning to two escaped inmates in new york state. nbc news reporting that joyce mitchell was going to be the getaway driver for the two convicts under she got cold feet, this after she felt in love with one of the escapees rich afford matt. a tenth death from the mers virus. many people also seem wearing masks. florida governor jeb bush continuing his tour of europe stop in war saw. hess and his wife vieted the uprising museum saying the u.s. needs to expand its military present in europe. the long-lost gibson go ahead tar reportedly owned by john lennon after disappears

for 52 years. it will be auctioned off in november for an expected price of from 6 and 8 hundred thousand dollars. that's your cnbc news update for this hour. back to you. a strong report showing a spring thaw for the consumer. steve liesman has more on the numbers. yeah, that may retalil it paints a picture of overall improves economy. here's the data. right in line with expectations. they were up 1% and the core retail sales number that feeds into the number.

jobless claims remaining. here's the details of the retail report. with the rebound in gasoline prices, that will help flatter the number. building supplies up 2.1% a good sign for the housing market and then clothing stores and department sales and sporting goods also up very decently, going along with the employment report that we had, showing better retail and leisure and hobby -- leisure employment. amherst points on the that the may report was just as strong as the may employment report over at capital -- it's now possible that gdp didn't contract in the first quarter. chris rupp pill mintsing no words as retail sales taking over means it's time for fed liftoff.

the second quarter at least look to be nearing 3%. sara? >> that's good news. looking forward to that rapid update. nike announcing it signed an eight-year agreement with the nash. nike will become the first apparel partner to have its logo appear on those nashba partners. you don't have to work about the price tag, because of the idea that nike will benefit from future sales because of this deal? >> that's what we think, yeah. we put on the awn estimate that we think this could be at least up $500 million a year in incremental revenue for the country. what's more important, we think is they're partnering with the nba is important from a glob perspective. certainly they will take over

what adidas has left behind but. both in western europe and china, this partnership should help nike propel that growth in the babbitt ball category. i guess the question is, is nike alternate risk in terms of basketball sneakers with underarmour sponsoring stef currie and selling out of those sneakers online. >> underarmour has made a lot of progress, they had a great shoe with him this year. i think nike's market share is probably here to stay for a while, because most of the nba players are wearing nike footwear or sponsored by nike. so between jordan and the nike brand, we think that nike will maintain that market share for some time. again, with the strength of basketball and the interest in the nash and all the players, we

do think there is category expansion here as well. so it doesn'tba and all the players, we do think there is category expansion here as well. so it doesn't. kate at what point do you begoin as to worry about these marketing costs? is there a line? or can they is it too infinity and beyond? >> i've seen nike be somewhat discerning. they walked around from manchester united earlier this year. i think if there's value to be had in places where they can add value with the sponsorship, they are going to invest in it and you're going to see them pay up for it. i think this was a no-brainer for nike to do because of what the success that they have seen with their nfl sponsorship and the relationship they have with all the nba players. i think in some players you do see some escalation but we

think nike is being discerning about where they're putting their dollars to work. i'm going to ask you to stay with us. the dow gains have been cut in half probably because of the headlines we're getting on greece. michelle caruso-cabrera has more. >> the imf is addressing reporters, and it's pretty ugly. there's been no progress in trying to narrow the differences. quote -- we are well away from an agreement. technical discussions on the bailout have stopped. greece's bail out, the imf's funds bailout team have left brussels given the lack of progress. they are deadlocked over what else? pensions taxes and financing, the same thing they have been deadlocked over month, and we should say years, actually. that's probably what has taken the wind out of the sales of the major averages at this point, and certainly a contradiction from all the optimism we got

yesterday about the possibility of getting closer to a deal. >> that was in the market again today. michelle, i guess we will wait and see. kind of unusual to have this language from the imf sort of throwing its hands up saying we are leaving. >> they have done this with greece in the past. many, many times we're saying we're getting up and we're leaving. when you guys are ready to chat not just true with this government, but the previous government as well. they've had to do this to get them to come back to the table. >> thanks, michelle. as carl mentioned, having an impact here on u.s. stocks. let's bring back kate mcshane an analyst from st.citigroup. what are you looking for in a couple weeks? are you expecting the company to do well? in terms of the underlying business? >> everybody's going to be

severing from the -- which as gheited for, but it's easy to parse out that currency so were expecting the futures number when they do better. and on a transactional basis, footwear and apparel players primarily because of how they hedge and buy their products in a basket of currencies, not u.s. dollars. >> kate mcshane thank you for joining us. >> thank for you having me. kate mcshane is an analyst at citigroup. dow's gains now 37. actually we were up triple digits for a brief second earlier today. when we come back premiere of season 3 of "orange is the new black" less than a day away. and we're joined by the real-life alice, and telling her side of the story. later on a search engine that doesn't track its user and

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the winters are shifting here in the market as greece talks hit a nab. dom chu has that. >> by fair and away the best performing sector. as well as what's happening with

discretionary stocks. interest rates overall are pulling back after trading earlier, again just a bit below recent highs. among the leaders today, cmc, also aes, enscanna pinnacle west. so we'll see if this utilities trade, a more defensive sector less economically sensitive holds up giving what's happening with what's happening with the market. a lot depends on the treasury market. for that we go now to the cme group, rick santelli with the santelli exchange. hi rick. >> one of my favorite guests, beaderman, thanks for taking the time, charles. sticking with the beet manyjuice themes are rumors of the death of bonds position greatly exaggerated, or is the book of the recent le die ceased should it include bond traders?

nobody knows flowing like charles biederman. >> it's a myth in the mind of the fantasy holders, talking their book that people will keep buying stocks but truth is there's no inflows into funds, try yos or so of buybacks as they've been flooding the equity markets. believe it or not through no outflows from bond funds the last couple months maybe a billion, and bond futures have been down in price four months in a row, no outflows yet. the scary thing for me is a lot of people trade bonds with 90%, 95% margin. what happens if there's a crack and margin calls happened? i think there would be a rollover effect. there's simply no bids out for, other than from the european governments, the japanese government, the u.s. government has stopped buying. >> you know charles, let me stop you there.

you have something that's a big theme. basically what you said is is that there could be a liquidity issue. many dispute that but i think it's a political argument. it always ends up at dodd/frank. explain would you you think there could be seizing if trading gets aggressive. dig into it. >> it's a mere fraction of what it was before the fed took over the governments took over the bond markets. >> but the fully margin part. that goes a lot way. it means if you get a move outside your position either you add more dough or lighten your position. it's the ladder we seem to be seeing lately is it not? >> yes, yes. look on a 10% margin a 10% move against you, you're wiped out. a lot of the big players have 5% equity in the deal 95% margin. so any big move against -- and, you know these guys are wiped.

they have to sell other positions to make good their bad holdings on treasuries, their governments. that's going to hurt the equity markets, if and when that does happen. >> okay. the last half minute we have to race through this. corporates, it's been big corporate issues for a lost time. last week was a big week. this week is a bit bone dry. how maybe different from government securities should things gets nasty to the down side and price up side in yield? >> well governments -- probably will -- corporates will get repaid assuming the companies are whole. we are seeing the widening of the short-term/long term. we think there is a pickup? wages and salary growth. it happens every few years -- few months we're seeing a pickup. will it last? i doubt it but that's adding some stimulus to the economy and will increase pressure on long grades. again it's supply and demand. there's no demand for bonds out

there from others and the people who already have what they have. they have so much bonds. if they had to sell there's no one to buy. >> gotcha. charles, always a pleasure to talk with you. thank you for coming on this thursday morning. carl back to you. >> rick we'll see you in a little while. when we come back she inspired the character of alice on "orange is the new black." she'll join us live when "squawk on the street" comes right back.

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welcome back to "squawk on the street." sit rix shares up about 6% in early trade. asking for a meeting with the company's board of director to form a plan to boost shareholder value. it mace the request with tremendous respect for the work that the management team ha has done. it things this can get up to a 50% return on some of the shared investments, paul singer founder of elliott management will be a guest at delivering alpha this time around. back to you, sarah. >> that's a treat. thank you, dom. hours away from the new season

of "orange is the new black." the wildly successful netflix original that introduced us to alex voss. the real-life alex is out with her version, in new book called "out of orange." it's good to see you. recognize the glasses. is that the only thing that is similar to alex? how close is her character to the real alex to you and your story? >> i'm also about seven feet tall. and -- drop-dead gorgeous. other than that the only thing we have in common is piper. jail smuggling and that's pretty much it. >> so you've watched the netflix series obviously. >> but you did not consult with them at all? >> no. i don't consult with them at all. and they don't consult with me

either. i think they've taken off and you know the series is based on the memoir. but the character development is not based on the memoir and it's not really based on reality, i can't speak to any other characters, except for my own, but it is certainly not based on reality there. if you want reality, you need to go to my book. >> i'm sure a lot of people will. because the show has been wildly successful. popular and part of what's been so great about it cleary has been the character development. what's your impression of the way netflix has handled it? do you like the show? >> i think, i'm an insane fan. i absolutely love the show. and i think their character development is exceptional. they've got with the guards and the prison and the interaction between guards and prisoners, they are spot-on. a lot of their depictions of guards are very cliche. and that's perfect. because you know cliches exist

because they are, they exist. in reality. and i think everybodiryy ry every placedy my time in i encountered at least one if not all of the characters that are shown in the series. >> yeah i mean you write in the book here telling my story and all that's embarrassing detail alongside so many others doing the same might make a difference. so i toss my heavy shell and planted this seed. what are you trying to shine a light on? what difference are you trying to make? is it the life in prison? >> it i think the light that needs to shine brightly is how many people are in prison. we have the largest prison population in the world, ever. and those numbers go up. we've increased by 800% since 1987 for women in prison. and most of the people we have behind bars are first-time nonviolent drug offenders. and i think a lot of the people

that were put behind bars care of the drug wars are now coming out and a lot of them are writing about it. and that is making it into mainstream mainstream society, mainstream entertainment, news et cetera. and that i believe is what will it will start to create change. and i think we are at sort of a tipping point. i want to be part of that change. i want to help make that change. because i really saw some futility in many of the women that i encountered, while i was doing my time. many of them i couldn't understand. what they were doing there. i, i had the benefit of being clearly guilty of what i had done. and that i understood. the length of the sentence? still a bit odd. you know, al capone did 11 years and i did -- i don't think i'm al capone by any stretch of the

imagination and i'm not the sophisticated glamorous drug smuggling. >> like your character. >> mastermind that's portrayed. i'm like the clown version of that. we were obviously not very good at what we did. or we wouldn't be talking here today. >> i have to say -- >> i have would have no idea -- >> i have to say cleary i started off hating alex. she was sort of the villain in the series and you end up loving her and loving the relationship that she forms. is if there's one thing we need to know about the real alex on the show that we're not getting, what is it quickly? >> well alex is a computer software engineer alex never, in the series you never see what what kind of hopes and dreams alex is comprised of. you only know about her masterful drug smuggling career that is now shattered and you don't know what carry hers from day to day. it takes a lot to get through a

long prison sentence. and those things that carry you through, those are important. i think that essentially is it. >> well we'll read the book, cleary. thanks for joining us, the real alex voss and her new story, "out of orange." and we'll be watching the new show on netflix. let's send it over to jon fortt with a look at what's coming up next on "squawk alley." rupert murdoch handing over the reins at fox 0 two of his sons at long last david faber's reporting, we'll dig into it. and facebook talking more about oculus it looks like we'll get pricing, a closer look at the product. why is virtual reality such a big investment for them? and a search engine that doesn't track you. we'll dig into privacy in search. all of that and more coming up on "squawk alley," tune in.

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