sake matters. >> well, we want to thank you for being with us today. it's really a pleasure. >> thanks so much for having me. it's great to see you. >> thank you. >> i have to ask you something. we're going to go and i'm going to toss it to the next show, then i'll ask you a question. sorry. make sure you join us on monday. "squawk on the street" is next. good thursday morning. welcome to "squawk on the street." i'm karl quintanilla with jim cramer at the new york stock exchange. david faber's off. heading into a long easter weekend with a weak premarket and the s&p once again negative on the year. europe zone in the red, oil under more pressure. we'll talk about this dollar rebound that is continuing. our "roadmap" begins with starboard lawn aeyg a proxy fight with yahoo! pushing a move. the board getting ready to name nine new members. ubs slapping a accelerating on wells foro, citing risks to the

revenue growth. and the s&p, as we said, now red for 2016, as the markets are closed tomorrow. first up, some new developments this morning regarding the brussels terror attacks. our chief international correspondent, michelle caruso-cabrera, is live in the belgian capital. michelle, good morning. >> reporter: good morning, carl. new political ramifications in the wake of tuesday's attack. in the last few minutes, belgian media reporting that the justice minister and interior minister tendered their resignation, but the prime minister refused. of course, there's been lots of recriminations and questions of why this attack happened when, clearly, the city was already under alert based on what had happened as a result of the paris attacks and the search for salah abdeslam. while the investigation continues into what happened on tuesday, the justice process is ongoing. the lawyer for salah abdeslam was in court this morning for a pretrial hearing that eventually got delayed, but he did speak with the media as he was coming out of the courthouse.

when he told him that his client was no longer going to refuse extradition to france -- the original plan was for him to be extradited to france. salah abdeslam did not want to do that, but apparently now he's decided he would like to be extradited to france. the other key issue that the city faces is that life is not back to normal in any way. there are heavy police presence throughout the city at this point. it's very difficult to get around. train stations, even here at this makeshift memorial where we are, they are stopping people with bags and police are checking to see what are in those bags. we actually spoke with an american who's been living here for the last 3 1/2 years, shawn betto, and he says it's been incredibly tense over the last couple of days. >> it wasn't like this before the attacks. you know, we didn't have soldiers checking everybody at every station and searching bags and people. yeah, it's a noticeable difference. it's aggravating that we all have to feel like this, you know, that these guys make us

feel this way. it's a shame, you know. try and explain that to your children. that's the tough part. >> reporter: it's about lunchtime here in brussels, so the crowd here at this makeshift memorial is getting larger as people come out once again to collectively mourn, very similar to what we saw in paris in the wake of the november attacks, guys. back to you. >> michelle, we will come back to you throughout the day for more developments. thank you so much. our michelle caruso-cabrera. as we said, starboard value launching a proxy fight with yahoo! announcing plans to nominate nine directors in an effort to replace the company's entire board. starboard says it owns 1.7% of yahoo's outstanding. in a letter to shareholders, jeffrey smith writes "we have been extremely disappointed with yahoo's dismal finance performance, poor management, hiring practices and general lack of accountability and oversight by the board. we believe the board clearly lacks the leadership, objectivity and perspective needed to make decisions that are in the best interests of shareholders."

smith one of the nine nominees, jim, but the slate you find interesting. >> yeah. actually, there's a couple people there that are kind of, well, neither here nor there, but there's one that i think people aren't going to focus on who they should. there's a man named richard, rick hill. rick hill is one of the greatest money makers i've known in my lifetime. he created tremendous value for novellas and then sold lamb research back in 2011 when it was one of -- he came on "mad money," just said, look, this is it, novellas, you've got to own novellas. the quarters were getting better and better, they were buying back stock, then he flipped it to lamb for a huge amount. then he joined the board of tsra, a company associated with your cameras and cell phone. he turned that company around so quickly it was incredible. if you get rick hill -- if rick hill is the interim ceo, if

marissa mayer steps down, if they win and rick hill is the interim ceo, you could have one of the great home runs. >> really? >> that's how great this man is. he is a miracle man. those who don't know him and haven't seen what he did at tessera or novellas, you've got to look him up. he's one of a kind. he's a very, very smart man. he doesn't come in as a board member quietly. look at tessera. but what he did with lamb was remarkable. it was really one of the great, great gains of all time. if he's interested in coming in, he will not be of the slate, he will be the slate. and that's just a huge win. i don't know how starboard got him. they would take him out of retirement. but rick hill is -- this slate is about rick hill. it's not about these other people. >> interesting. that's a wrinkle that has not been noticed yet. >> you must note rick hill. rick hill is maybe in the valley respected as one of these people who is an amazing turnaround artist, he's quiet, he's funny,

he makes money. >> now, a lot of people still wonder this morning, you could put anyone in any of these jobs on the board or in management. it's not going to make people want to turn to yahoo more. >> well, if rick hill's interim ceo, i'm just going to sit here and tell you buy it. even in this market where the dollar's suddenly the wrong way and we've got some energy coming down, watch rick hill. i mean, those other people, they seem like nice people, okay? you get rick hill in there and this thing goes upside down. this guy can bring out value. honestly! i mean, i remember when he went to tessera, and said tessera's a terrible company! he said, watch the company. watch the company. and i said, well, tessera's nothing, it's a nothing company. watch the company. novellas also ran semiconductor i thought so wrong. he bought back stock, was doing like -- he was like taking it private. and then lamb, which is the smartest company in that industry, gives you that big 20-plus premium. rick hill is the man, and i don't know how they got him.

and if you look atta hao, look outta hao if rick hill comes in, because he's not going to just come in as a board member. people don't know rick. they'll get to know him if starboard wins. he's going to make it so you never see any light -- you might not want to work in yahoo. stocks are on track to snap a five-day winning streak after the s&p fell into negative territory. market's closed friday on observance of the holiday. claims were roughly in line and revised lower by 6,000. durables, meantime, fell as businesses cut back on spending. the prior was 4.7, they revised lower ex-trans. it was good in the macro we've gotten. >> yeah, you know, i had been constructive, said well, constructive going into the fed meeting, constructive coming out of the ming, and there's a reason.

because when you have the chief people in the fed saying, listen, we're on hold, that gives you a chance to own stocks. now, we've had this mini revolt that no one has chronicled better than steve liesman, and that suddenly has caused the dollar to go up. that's not part of my thesis. caused oil to go down, not part of my thesis. these guys make it so it's almost impossible to invest, and you have to pull back from -- honestly, when you wake up and you see these guys, literally, you thought, well, guys, you're not going to just disagree with the orthodoxy next week, are you? a head coach on a football team says we're going ground game. the offensive coordinator comes in a week later, says you know what, this is air, this is just going right into the air. i can't figure out whether they're running a ground game or air. i was watch iing sarah and woofd on this morning and sarah's doing her thing at 5:03, she says, this is ridiculous! and i'm thinking, yeah, go get them, because it is. you can't switch directions like this overnight and expect people to still make decisions and then get this weak information today.

i throw my hands up here, carl, ahead of the three-day. i just say wait a second, you predicated your thesis on yellin, who last i looked was the chairwoman -- >> yes. >> then other people come out, and boller was very key on oil and oil went up. my thesis was really about the dollar peaking, and they are playing right into draghi's hands and they're having the euro go down. i don't get it. it's so hard to invest here, carl. >> it sounds like you're not going to fight it, though, that why not ring the register on oil, why not on commodities? >> i was going over with rbn this morning. at $40, there's really some remarkable things that happen, $40. carl, there's a group of counties -- i thought this was just fantastic -- they did a lot of work on how do we do oil at 40 bucks? there are a dozen oil-dominant counties that are profitable at $40, counties. that's all. >> out of?

>> in the whole country! a lot of counties! there are many counties! and i think it's important to point out that maybe we got too emotional, went down to $26. but $40, a lot of this was on the chatter, maybe russians, saudis, summer driving, so you had to switch, one new rig. but in the end, rbn's got the best numbers, better than eia, and they're talking about -- "production is now down 600,000 from the peak," which was last year, and it should be down another 750,000, because simply, $40 is unsustainable. there's a note out today about range resources. once their hedges come off, they would be -- range resources a very, very good company. without hedges, a lot of the oil companies will begin to lose a matter of money. barclays goes to a seller range, i'm using that as emblematic. $40 is not going to cut it for the oil companies. you'll go back to the no man's land, i like the quote from rbn, but i don't like the market

doing what it's doing so quickly! >> hard not to notice on kbh's call, they're limiting investment in the houston area, despite feeling good about orders overall. >> houston is down 20%. but let's talk about that kbh call, because mr. metzger, who's a very smart guy -- by the way, they bought back a huge amount of stock, and that makes sense. but they saw 23% growth in deliveries, a sizable year backlog, but then get this, they say, okay, listen, they're seeing labor constraints, higher land prices, higher costs rising from everything from framing to concrete. there's definitelyshortage of labor. you don't want to read this. please, don't read the kbh call. and in the bay area, a dominant area, so they have houston -- metzger says "i don't think you're anywhere near a bubble price, certainly not the price points we're playing at. sad to say, but $1.5 million is an affordable house in the bay area right now." the hawks cannot read this, because they will say, predicate it on the fact that profit margins went up 90 basis points,

that there's a shortage of labor. they would say we've got to raise -- kbh should be raising because of california -- >> right. >> not because of the rest of the country. vegas, nevada is okay, arizona's okay, texas's is weak, bay area's on fire. these unicorn guys, i guess they got something. >> forget about being a first-time buyer, that's for sure. >> oh, no, you are not -- but we can't raise rates based on -- look, but they seem to want to do it again. they seem to want to do it again. kbh, just so we really know, the stock was at $84, okay, in 2005. and then it went to $5 in the depth of the recession and then went to $25 in 2013 before the faux tightening. it's back to $13. and again, the stock is cheap, but you're fighting the fed, you're fighting the mini fed rebellion. you know, a mini fed rebellion is not what we need. >> others would say, do you want like some body that speaks with uniformity, never has any descent inside, they just group

think? >> let's go. thank you, sara eisen. bullard saying don't want to hike if expectations are falling. maybe special factors, especially january-february inflation. jury's out. i always like when the jury's out, but at the same time -- >> time will tell? >> time will tell, but draghi's winning right now. and when draghi was losing, i just want to point out that when you see this kind of discord, you're going to buy the dollar and sell these other currencies. that's what's kind of happening, and it's tempering the bull case. >> yeah. >> especially ahead of a three-day. >> yes, it is. >> tempering a bull case. tempering my bus case. i'm on air every night saying, listen, i think the dollar may have peaked. and with the fed mini revolt, it's saying no, get long the dollar. when we come back, wells fargo is slapped with a accelerating at ubs. we'll talk about that, for sure. take another look at the premarket. a down day for the dow. this is three in a row, first time since early february. we're back from post 9 in a minute. the e-class has 11 intelligent driver-assist systems.

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wells fargo's down on the premarket. ubs initiating coverage of the bank with a accelerating. firm citing what it sees as risks to wells' revenue growth and credit performance coupled with a valuation on the high end of its peers, pointing

specifically to fee revenue being limited. of course, we know it's a big berkshire and buffett individual play. >> yeah, i talked with john over the years, including the first week of february -- the ceo of wells fargo, john stumpf. wells fargo is a bank you've not made a lot of money betting against and i will tell you you won't do it again. to sell wells fargo is to say warren's lost his touch, because it's the company he's most closely affiliated with. if wells doesn't raise rates, they have the same margin problems. to say it's limited, maybe he's got a source at wells fargo that says something is not right. wells does have some oil loans that are an issue, but i think that john laid them out to me pretty closely. wells could go to $47, i guess on this, and then you're going to want to buy it? this is trading in and out of wells and everyone's always wanted to do that. you're trading in and out of the apple of banks. i know the people from jpmorgan say, jim, have you watched jpmorgan lately? we're doing much better than

wells. okay, so, i'm saying it, all right? so, they don't have to e-mail me. i don't want to bet against wells. >> they also point to, as they put it, mass client, massive fluent client, and the department of labor's fiduciary proposal and what that might do down the road. no? >> look, wells fargo is in a situation where they didn't get caught in europe. they're not -- the big problem with the banks, the major banks, is the trading and no ipo, and that wasn't wells. wells is a fee-based system that owns about a third of the country. put a sell on it, it will be self-fulfilling. i'm not saying i'm putting a buy rating on it, but i think it's a splashy thing to do, but a sell on wells fargo -- you know, i'm putting a sell on "house of cards," that kind of thing, putting a sell on taylor swift, right here. >> it's been tried before. >> i'm selling taylor swift. okay, so, you're going to sell a few. maybe the concert doesn't sell out in cleveland, i don't know.

>> right, right. you want to come back to yahoo and circle again. >> i do. because i'm doing more work on rick hill, thank you, our executive producer, for helping me with this stuff. rick hill has a long relationship with starboard. tessera he was in, starboard came in, and then they brought him in, starboard brought him in at marvel, where there were problems. so, obviously, they got together and worked together, tessera to bring out value, because starboard took a position. turned out, looked like rick was working with him, then they brought him in from marvel earlier this year. what this says is they have a history of working with maybe the greatest tech turnaround man of our era. why do people not know rick hill? he lives in hawaii, is not a self-promoter. when he comes, he has great meeting -- we hear about steve miller as a turnaround guy. >> yeah, of course. >> i'll tell you, the turnaround guy of tessera -- you can see, look at the stock. look when he got in the stock to what he did there. and rick is one of the nominees here. the company agreed to nominate a

total of ten -- this is tess tessera -- for election of the board, including six starboard nominees, including rick hill. and i just think, watch rick, because rick is starboard's guy. he's their guy. he was substantive. these other people, they could be good. now, look, all of this could be moot. i interviewed verizon and he was going bid. yahoo seems to be engaged in yahoo. it's kind of like a group think, maybe? >> yeah. >> but this is going to shake things up, even though starboard only owns a percent. all i can tell you is yahoo, you want things to go well? bring in rick as interim chairman. >> trying to think, if you're him, why step back into this maelstrom? >> why would rick step back in? rick likes challenges. he is a dynamite guy and he will bring dynamite, and it's not just acme dynamite, it will be the real thing. road runners, you got me? >> aeamon javers has breaking

news on a cyber attack. >> reporter: the united states has just unsealed an indictment against seven iranians in a longrunning cyber attack that involved dozens and dozens of u.s. financial institutions from 2011 to 2013. the iranians, the u.s. indictment says -- this is filed in the u.s. district court, in the southern district of new york -- worked for a company called i.t. sectine and mersad company, working on behalf of the iran government, according to the indictment just unsealed, and for the iranian revolutionary guard corps. they were denial of service attacks on a range of banks that obstructed customers from acc s accessing online banking information and also one that's attracted a lot of attention over the years as to whether or not this was actually the iranian government behind the attack. the u.s. now saying officially that it believes that it was the iranians who accessed supervisory control and data acquisition systems, the so-called scata computer systems that control large

infrastructure for the bohman dam located in rye, new york. that's one that had a lot of cyber security experts concerned that the iranians had the ability to access large infrastructure inside the united states, potentially manipulating that infrastructure and harming large numbers of americans. we're expecting a news conference here at 10:00 eastern time at the department of justice. the head of the fbi, the attorney general and other officials will give us more details on this. and as soon as we have those, we will bring them to you, carl. >> wow, the world we live in. >> yes. >> eamon javers, we'll get more from you later today. thanks. when we come back, we'll get cramer's "mad dash," count down to the opening bell, take one more look at the premarket as we wrap up this holiday-shortened trading week. we're back in a moment. ♪ i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on

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♪ five minutes until the bell. let's get cramer's "mad dash." acn's going to have a nice open. >> people don't talk enough about them, they're a big company, $70 billion. when they reported right here, when they reported last time, they kind of threw cold water on the situation, said maybe things had been slowing. they were talking about growth 6% to 9%. that was a surprise to me, and then that sent the stock down. guess what? business has reaccelerated with accenture. now they're talking about instead of 6% to 9% being up 8% to 10%, had a 11% increase in business in north america. with their buying back of the stock, they should be buying back 10% of the stock, the highest was $1.21. if the market -- we did not have this super freaking strong

dollar, carl, this would be up three. has how great this is, and it will be going to an all-time high. i do think in the end that it will work over time. this is the great consultant of the public ones. there's a lot of private consultants that are great. they have aligned themselves with salesforce. i got to meet the top people of accenture recently. these guys are the real deal, that was a real quarter, and they're back on track. those who sold it here, i understand. i feel your pain. i feel your pain. but -- oh, i don't feel it anymore. that was good for a second. >> we'll get a lot more, including "finish line" when we get the opening bells in a couple minutes.

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you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in just about 30 seconds, as the dow is going for its third day down, first time since early february. s&p back in the red for the year, as this warm bath that the dollar's been soaking in, all this dovish comment coming to an end. >> yeah. and that's going to bring oil back down, which is going to

cause stress in the system. not what anyone was looking for. i'm not just going to say it wasn't what i was looking for. i'm telling you that the fed had set a course last week, and this new theory, new talk, they could wreck both the economy and the stock market. it's almost like they're working for the bears! it's like, wow, we're up here, let's go down to the bear -- they're working for the bears. >> the s&p at the bottom of your screen, and the opening bell at the big board today, the special olympics of new york in anticipation of the special olympics swim meet at suny maritime college campus on april 10th. over at the nasdaq, the girl scouts celebrating more than 100 years of positive impact and change. a great organization. >> yeah, my daughter belongs, i mean, i remember those days. we had the cookies piled up, and it was like, wow, we've got to start selling these cookies! they're in the garage and we don't want to be stuffing the channel with khakayak cookies.

>> i'm just getting into that world. >> enjoy it while it lasts. >> whether it's selling cookies or clothes, pbh, want to get into it? >> yeah, look, calvin klein is up double digits, i mean, 20u7%! he's talking about a great turn in the whole business. the stock is screaming. i was just in shock that manny could pull that turn. calvin klein, which he bought, was really, really hurting. this is real, again, like accenture, if the market were better, this stock would be better. but we should listen to some of the things he said, because i've got to tell you, carl, very sobering about the new world of business. i don't know if we can listen to that. take a listen to this. >> we do have manny -- >> europe for us is our second largest region, besides the united states. we've got very strong businesses in that part of the world, and i think you have to just realize that you're going to have to deal through volatility and uncertainty constantly. last time i was here, we were talking about paris. >> right. >> and to think now we're talking three months later about this is beyond me, but our teams

there just keep moving it forward and try to -- you know, no one wants anyone to change the way we do business, to change the way we live our lives. >> yeah, i mean, look, the idea that you could have, i mean, literally, a company have to build in? let's call them misogynist events. when things were bad at pbh, he comes in, tells it like it is. the other side of this is it's great to hear the department store's selling more schertz and ties. they have 50% of the tie market, about 30% of the shirt market. and china doing much better. hilfiger doing well, but it's really just calvin cling. and the day before, g-3 reported, but they do a lot of outerwear, they have a calvin klein business. manny's back, it's under control, the stock is down very, very big. let it come in and then do some buying. >> yeah. all right, whether it's pbh -- i mean, obviously, we saw what

happened with nike this week. >> right. >> the nordstrom guidance, the ross stores guidance. it hasn't been reflective of the run-up the stocks have had. >> no, and you know, tjx has been the big winner. ross, good, because they have the cash to be able to buy the inventory. finish line, everyone's trying to figure it out. finish line beat the numbers, finish line a shoe company. but the merchandise increased double digits at macy's. you kind of want to buy finish line and sell macy's until you listen to pbh and they say macy's is doing well and macy's is selling a lot of perfume. a lot of makeup. so, it's a very confused situation. but again, the dollar is going to control it, because macy's is lief levered to the dollar, the shoe business, nike levered to the dollar. every company i deal with that's international has been trying to build in maybe a little built better dollar scenario, and fed takes it away overnight. >> how about goldman adding buffalo wild to conviction buy? >> well, you know, it's been

downgraded a couple of times. and there i'm not -- that's a wings play. i've had sally smith on many, many times, and i think that the stock has underperformed. one of the reasons why everything's underperformed in that group is a man named easter brooks. that's wrecked the margins. you can't go up against the low-cost produce er if you're i the commodities business. we're the commodity, but we're the low-cost producer. he is. while buffalo wild wings has been done -- now, buffalo wild wings, remember where they make their money. they make their money on beer and on wings, and if wing prices go up, their margins are squeezed. i was at bar san miguel last night, small-scale restaurant in brooklyn. >> i think they get the idea. >> you have to make it on liquor. modella and corona are the two names. she has a lot of good craft beers -- sally smith, ceo -- but i'm not jumping up and down or anything in that food service business, except for pannera,

which my trust actually owns, and mcdonald's, because easter brook, who i mentioned is one of the elite coaches, the elite eight that i'm doing -- i'm doing more tonight. they're wrecking everything! >> along with immelt, modela, and i have it right here, cody. >> oh, absolutely. of course, it was my first one, that's why i forget. modella, i pick that. happy birthday to steve ballmer. you beat the warriors. and when i look at easter brook, the stock is up 30 points since he came in. that's a turnaround. cody, the best-performing stock this year in the industrials. and then ge with jeff immelt. this is a remarkable turn, aided by nelson peltz, buying back stock and getting out of the government purview. four more tonight. i was kind of surprised, the lobbying there. >> i would imagine so. we're getting some breaking news on tibo.

thin market cap, under $1 billion, but "the new york times" saying it advanced talks to be sold to rovi. >> to rovi? wow, kind of a weird house, you know. that's a strange one. >> but fits in with -- >> the home pieces. >> -- the overall story we've seen, right? >> digital goods, consumers. i've got to tell you, i look at anything that is in the home, even though it's -- remember, big -- the home movie theaters are back at best buy. i mean, if you're going to -- people -- thank you, carol tomei for this, cfo of home depot. people will spend on their homes beyond reason. if you look at kbh, obviously, it's worth it. and is tivo part of the home? tvs are part of the home. never forget, big-screen tvs are selling like crazy. i wanted to bring home the 70-inch. the wife is not crazy about the 70-inch. i said listen, i'm not bringing back the 100-inch -- >> it depends how big the room is. >> size matters in tv. >> yes, yes. getting a statement from yahoo

regarding the starboard announcement earlier today. the board's nominating committee will review starboard's proposed director nominees and respond in due course. >> well, stop talking, bring on rick hill. you asked me why did he come back? look, an interesting note, he came back to tessera, said i was happily retired after making a fortune for everybody at novellas. i saw something more saving in tessera and decided to make a difference one more time. let him help make a difference one more time at yahoo. they need a change agent and that is starboard's change agent. i'm not slamming the rest of the slate, but it would be welcome. it would be welcome. >> yeah. finally, i know you were paying attention to some of under armour's new offerings, new product offerings today. >> i am. everyone's concerned that nike -- the steph curry. remember, the steph curry, the brita bottle steph. i mean, steph curry is so hot. just don't go to san antonio again, steph curry, because you're selling too many goods. but under armour is looking to broaden out.

under armour is a wealth and healthy company. nike is a performance company. don't sell nike ahead of the olympics. don't sell under armour for a long-term theesisis about technology and health, but it's not a power play. it's a technology company. >> dow is down and energy is leading the way down. bob pisani's on the floor watching what's moving. happy thursday, bob. >> happy thursday, carl. once again, we're getting a modest risk-off around the world. dow's down about 90 points. let me show you the global markets. a little weakness in shanghai. japan was down fractional, although it's up for the week. and germany right now, of course, still open, down about 1.5%. and of course, a lot of this has been due to the fact that we've had some recent hawkish comments from fed officials that have strengthened the dollar, it's put pressure on commodities and commodity stocks worldwide. remember, commodities are priced in dollars. you look over in europe, you can see this effect in european stocks. look at some european oil names like total, for example, the big

oil company over there. that's had a rough week, down 9% for the week and down at about 3% today. modest risk-off over in europe, and when i say risk-off, you could usually see it in automotive and banks, so daimler and bmw down a little bit. the banks have been a little weak this week. so, you can see that slight risk-off that i'm talking about. here in the u.s., again, energy, financials, materials, energy materials of course very much affected by the weak dollar. and of course, the one sector that's up more of a safe haven, utilities. consumer staples also safe haven plays, also generally on either side of positive or negative, outperforming a little bit. in terms of what's going on for the week, you can see the pressure the dollar has had on commodities this week, as we've seen the dollar rise. oil's down about 6%. this is just this week that i'm talking about. gold's down 2.5%, aluminum. you can see the effect on commodities. you can also see the effect 9 stronger dollar's had on commodity stocks over here. so, metals and mining stocks and oil and gas stocks and gold

miners are all down about 7% on the week. these are groups that would be most affected by the stronger dollar overall. but if you're asking me is the markets in trouble, i would say no, because we've been largely moving sideways for the last seven or eight trading sessions. in fact, i mentioned yesterday, the s&p 500, if you put that up, has not moved more than 1% from its high to a low in eight days. given the volatility we've had all year, that's remarkably quiet. so, moving sideways is essentially very good after a huge move from february 11th to about a week and a half ago. a lot of people were saying 10% too much, we've got to pull back a little, essentially moving sideways allows the market to digest. and on a technical basis, it's a very positive sign. i wouldn't say the market's in trouble, but the strong dollar is definitely sending some signals of caution. finally, i just want to talk about kb home, my old beat, the real estate beat. overall a very good report from them. deliveries were above expectations, earnings beat expectations. orders were up about 4% year

over year by my eyeball look. that was probably a little bit below expectations, but overall, it was pretty good. i guess the only thing i'd complain about, if i could find something, is it seems to me the order growth, the body language is kind of flattish for the rest of the year. 4% i guess is not bad in overall growth, but given the expectations of a strengthening economy, i was sort of hoping to hear a little more positive later in the year we expect order growths to accelerate. i did not hear that in the commentary, in the written commentary, at least. so, if it's something to be concerned about, perhaps that's it, but overall a very good report. right now the dow down only 80 points. carl, back to you. >> all right, bob. thank you very much. let's get to the bond pits as well. rick santelli is at the cme in chicago. good morning, rick. >> good morning, carl. you know, it's as though we're in this fed equity loop, okay? so, there's a little discontent with regard to the fact that rates aren't as normal as maybe some fed governors and fomc

participants would like. steve liesman's done work on that. i mean, come on, six, seven years, how long do we need? but what happens? stock market doesn't like that, it dips, rates dip. they're very counterintuitive to the notion that things are getting hawkish, especially if you look at the markets. look at a month-to-date of two-year note yields. they're nowhere near levels where the anticipation of serious normalization is in the winds. and if you look at an intraday 10, it's more about the data, the proxy for business spending was weak in today's durables. all important on the fundamentals side, but let's be real here -- some data's not good, some data's okay, but in the end, 2% is what we have, and it really doesn't seem to look like it's going to change and the rearview mirror's pretty steady. let's look at one year of bund yields. this is very fascinatinfascinat because bund yields once again are not only below 20, they dipped briefly around that 14, 15 area. this is very significant. is the driver the long weekend?

is the driver terrorism? is the driver the notion that terrorism could alter the economic data down the road, as michelle caruso-cabrera's been talking about? maybe all of the above. and it's not only that, let's look at a two-day of the -- excuse me, a month-to-date of the japanese ten-year. briefly today it went under that negative rate of minus ten basis points, hovering at minus eight. we don't talk about negative rates enough, and in japan, they're hoping we stop talking about negative rates. they don't seem to make anybody happy, including the fundamentals of their economy. look at a one-year chart and you can see how historic that move has been. and the final chart -- if there was really a fed snubbing -- i'm not saying there isn't -- who knows with all the cross-communications, but does this month-to-date chart of the index look meaningful? and that's also granted the notion that there has been some flight to quality to the dollar index, especially this week. carl, back to you. >> all right, rick. thank you very much. rick santelli in chicago. oil, of course, related to that, under pressure again.

jackie's at the nymex for that. >> good morning, carl. we are seeing selling pressure this morning. it's not unexpected after we got hit at the close yesterday, but we're well under $40 a barrel here. the lows of the session, in fact, we haven't seen oil this low in a weak, $1.25 loss today. it's a three-day weekend coming up here, a holiday weekend. typically, we see people cover their shorts and maybe buy into the weekend. that's not the action we're seeing. so, i'm being told this is really showing the downward bias is alive and well on this trade. bob pisani brought up the dollar index. that's something that impacts all commodities, but specifically oil as well, but definitely part of the story here. dollar index over $96 now. the other part of the story is the inventories yesterday. we're supposed to see these numbers shrink into this time of the year. we saw a massive build in inventories, and that's what's leading people to believe that producers are taking advantage of these higher prices that we've been seeing to pump a little bit more, and that, as you said yesterday, could be self-defeating. it's definitely something to watch. meantime, we have got nat gas

inventories on deck at 10:30. we're seeing nat gas sell off here. we're looking for an injection of 18 po 22 billion cubic feet, an injection certainly bearish. at this time of the year, you would expect to see drawdowns, though minor. we'll see what the d.o.e. says about that in a little bit of time. back to you, carl. >> see you in less than an hour, jackie. jackie deangelis. when we come back, mark ma hai hainey and his thoughts on the proxy fight with yahoo. back in a minute. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets

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starbucks ceo howard schultz not throwing his hat into the ring as a presidential candidate, but he is speaking out about the state of politics in this company. at the company's investor meeting yesterday, he spent his closing remarks saying "i've struggled for weeks to find the right words to express the pain i feel about where america is headed and the cloud hanging over the american people." starbucks, meantime, taking out a full-page ad in "the new york times" and the "wall street journal" today.

the key message, it's not about the choice we make every four years, it's about the choices we make every single day. of course, the differences between, as you see, division, unity, cynicism, optimism -- >> howard likes to make these meetings a statement. i went out two years ago to cover the meeting, and obviously, howard's very distraught. we've interviewed him for many, many years. he's always trying to figure out the public-private. i mean, he's both an ambassador for around the world and is also a shrewd observer of the united states. anyone who's been on a conference call knows he's one of the most thoughtful ceos ever. i don't talk politics with many ceos, i do with howard, but it's about civility and about tone. >> does any part of you say, look, just focus on the coffee? >> that's a great question. i owned the stock for my charitable trust. it's been a winner. some people can multitask like i've never seen. i've not been in discussions with him about some of the most

difficult situations, and meanwhile, the company's ca-ching, ca-ching. i don't know, the man is always big think about the world, about our country, and he's -- you know, should he have run for president? obviously, you know, anyone -- turns out, you can run for president, anybody can run for president. i just say he's thoughtful and i urge people to read it, how about that? urge people to read it. >> some of the metrics he gave on tea, especially iced tea this week, into the 20% range. >> look out for india. howard schultz, haeble could do- look at packaged goods and what he's doing in india and china. he is most trusted in china, why? because when he gets there, does he want to see the baristas? he wants to see the parents! he understands the way people think in china. he's a remarkable man. some people say, jim, you obviously know he's liberal. i'm just saying he's remarkable and he's bankable and is one of

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time for cramer and stock trading. >> i can't emphasize enough, yahoo's down today. that's ali baba. when rick hill was chairman of tessera, that's when starboard challenged, okay? and i'm urging people, look at therajectory of tessera, because it's as good as lamb research. he then realized he's better to work with the starboard people than his own people. he was interim chairman. he sided with starboard, they brought out a huge amount of value and have worked together ever since. i remember his comments were basically saying, these guys from starboard, they can really fix things. don't forget what they did with darden. it was a huge win. maybe this is one of the instances where yahoo's board says, rick, come on, help us, we're willing to work with starboard, and you bring out value. i would be a buyer of yahoo with the idea that they're going to come to their senses on that board and realize that rick did tessera, marvell technology, he

did lamb, he's a titan, he comes out of retirement when it's right, works closely with starboard. put him on the board! >> what if it's a retracted fight? does it get messy? >> maybe verizon steps up and says, listen, we're tired of this and, yeah, it's going to get messy like darden got messy. >> darden is awfully close it a high. >> well, they came in and fixed da darden and now it's a joy to go to olive garden. i joke with david, who's never been to these. capital grille is next door. it's dynamite. i don't even eat meat anymore. that was one of the legacies of the cleanse. >> what's on "mad" tonight? >> amplify. skinny popcorn. this is something my executive producer, regina, has been eating quite a bit since they brought us some samples. and then investing in new companies. i'm working actively on this idea of entrepreneurship that the network's embracing, and

it's great. >> a great franchise. >> and this is on visual reality. maybe i'll just put on the cone and see things i've never seen before. >> are we going to get the other four of your elite eight? >> yes, we are. and the balloting guys, there's no balloting. send me all the e-mail you want. it's not how you get on. >> right. >> i mean, if that's the case, i'll put rick hill on right now! how much fun today. >> cody, immelt, modella and east east easterbrook. >> yeah, how painful is it when you're jack in the box and you have to get on the call and you're basically saying, listen, we're not doing that well, there's someone else out there? well, someone at mcdonald's. i mean, i'm lovin' it with mcdonald's! cody obviously terrific. jim immelt, give him credit, he had to get out of that finance. when i met modella, he was wearing this t-shirt, and that's what he wears. it's interesting that it's ballmer's 60th birthday.

modela's the real deal and you're going to get four more real deals. i had so much fun in the show. and a memo to yahoo board, put rick on and we'll all be happeny. >> we're going to watch you introduce the viewing public to the name rick hill tonight. >> novellas, tessera. he's one of us. >> have a good weekend. we'll see you tonight, "mad money," 6:00 p.m. when we come back, mark mahaney reacts to the proxy fight at yahoo. there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade.

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good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and mike santoli. simon hobbs and david faber are off today. weakness in equities continues. dow is almost exactly flat for the year, as the s&p's gone in the red for the year. of course, the main culprit is oil, as we've seen that rebound in the dollar in recent days on some of this hawkish fed commenta commentary. meanwhile, the justice department is set to announce charges against seven iranians in a cyber attack case. the attorney general, loretta lynch, will be making an announcement, expected any moment in washington. eamon javers is there with more

details. very interesting case. good morning, eamon. >> reporter: good morning, carl. it's a fascinating case. it involves intrusions using cyber attacks, ddos or distributed denial of service attacks, against 46 financial institutions over the course of years, from 2011 to 2013. according to the indictment, these 46 financial institutions saw attacks over at least approximately 176 different days. so, they escalated in 2013, and according to this indictment, these iranian hackers apparently worked regularly normal work hours, working from tuesday to thursday and stepping up their attacks during the work day in iran. also mentioned here in this indictment is a cyber attack on a so-called scata system at a dam in rye, new york. and that's something that's concerning to u.s. officials, because it indicates that the iranians might have the ability to attack u.s. infrastructure, potentially mess with that u.s. infrastructure and cause damage or death here in the united states.

that's of deep concern. and so, clearly, what you're seeing here is the u.s. government sending a message to the iranian side -- not only do we know who did this, the u.s. is saying, we know exactly the names of the officials who were responsible for it, how it was carried out. it's unlikely, though, that they're going to be able to arrest any of these officials. they are in iran, just like what happened when the united states indicted five chinese military officials in 2014 over hacking by the chinese. this is a political shot across the bow more than any legal action that we can expect to see taking place any time soon, guys. >> thank you very much, eamon. for more on this, let's bring in nbc military analyst, retired army colonel jack jacobs, who joins us here at post 9, and former u.s. ambassador to syria, now president of a-mideast, ted kurtoof. good to have you. >> good to be here. >> at a time when the iranian deal is under scrutiny, this doesn't look good. >> no, it doesn't look good, but i think the administration will tread very, very lightly. it's been trying to court the middle class inside iran.

there was an important election not that long ago where genuine moderates wound up taking some control. i think the united states is not going to impose any new sanctions. and if they do impose new sanctions, i think it's going to be on maybe specific individuals somewhere near the top of the food chain. i don't think they want to scotch what looks like an opportunity to make the middle class very excited about a new burgeoning relationship with the united states. i think the administration is going to either do nothing or tread very lightly. >> so, it's largely like the cuban playbook, to some degree. >> it looks exactly like the cuban playbook. the administration has a specific objective, and i don't think is going to go anywhere near off the road in trying to head towards what they want to do. so, i think they're likely to do nothing at all, especially in view of the fact that the charges revolve around activity that ended in 2013.

>> can you, mr. ambassador, put this in the context of the president's confrontation and his record so far on foreign governments when it comes to cyber security? how tough has he been? >> well, i think it's not so much a matter of being tough but a matter of being prudent and ensuring that our vital infrastructure is protected to the maximum extent possible against cyber attacks. imagine if the iranians are capable of doing what was just described by eamon javers, what the russians and chinese could do to this country, our electrical grid, our water supplies, our dams. so, it's a very serious problem, one that's been written about a lot, but i still haven't seen, you know, the two parties coming together and putting together a plan to protect the u.s. if i may, too, i would just like to add quickly, that let's not

forget, the u.s. and israel attacked iran's nuclear centrifuges, or the uranium enrichment centrifuges using very, very sophisticated cyber methods. >> so, what can we, mr. ambassador, take away from the idea that at least tactically, the government is going ahead and bringing these charges out, if it's not necessarily going to lead to a big offensive against iran diplomatically? is this the dance we'll be in on a tactical basis, we're watching, but not necessarily wanting to compromise the overall new relationship or potential new relationship? >> i think you have it exactly right in your question. let's keep in mind that the united states also indicted several high-ranking chinese military officers for cyber attacks. and in that case, we were trying to deter the chinese from coming after our trade secrets, our industrial secrets, if you will.

we know very well that they're going to spy on our military just as we spy on theirs, but it was meant to have a deterrent effect and to let them know that we're losing patience. and then as i recall, president obama took this up with the chinese president as well shortly thereafter. >> and colonel, it doesn't sound like this would have implications for allowing the iranians to boost output on crude. is the intent to let them have their piece of that pie and keep their economy from going into the absolute tank? >> oh, i think so. one of the reasons that we before now have not been able to impose stricter sanctions on iran is because our partners in europe, including russia, by the way, wouldn't let us do it because they have very close economic relationships, particularly in the energy sector with iran, and they just, they didn't want us to do it. that's why we hadn't up until now put significant restrictions

on iran. and i'm telling you, that's not going to start now. the europeans certainly don't want it. we don't want oil to drop any further, particularly with the iranian crude coming on to the market. no, no, i think the united states is looking for the easy, steady as you go, and the administration's probably going to put up with lots and lots of rhetoric from the other end of pennsylvania avenue, but i don't think it's going to budge. >> i know the dam is a small, more insignificant piece of this, but the infrastructure piece is a big deal, what you brought up. what is a bigger threat now, that or hacking into financial systems? >> at the moment, the latter, but the two are inextricably intertwined. we don't have any defenses against any hacking. it is easy to get to our data. we have a lot of data at grasp, particularly in financial institutio institutions. we have no reliable way to prevent anybody from moving into that. the same thing is true of

hacking into our infrastructure. it's part and parcel of the same cyber security problem where nobody is very good at it, and just about anybody with a super computer can make inroads into anything, infrastructure or data and financial institutions. >> we'll certainly keep an eye on this. gentlemen, please stay with us, if you would, because we want to turn to the terror attacks in brussels. cnbc chief international correspondent michelle caruso-cabrera is live with the latest there. michelle. >> reporter: hey, there, sara. the key development overnight in this investigation into tuesday's attacks is police say there is a definitive connection between the paris attacks of november and what happened here in brussels on tuesday. two of the suicide bombers on tuesday, brothers, were accomplices in the paris attack, providing safe houses, transportation, also ammunition and arms. also, the bombmaker in paris is believed to have died at the attack at the airport here on

tuesday. that connection and the paneuropean, or at least the francobelgian cell we're seeing, this cross-border organization, is raising the question about what to do when it comes to investigations when you have 26 countries, many of them small, dealing with an organization that moves across borders. it is incredibly parallel to the discussion we heard in europe after the 2011 financial crisis, where there were complaints that there were too many regulators in different countries and they felt they had to move towards integration for the banking system and regulatory nature, and that's what they did. and there's talk of that here when it comes now to international, to security and investigations. we'll see if that happens, because the far right doesn't want that to happen at all. they say the attacks is a reason to have less europe, to have more borders and more border controls for individual countries. we spoke with a member of the party here, the party that's in control of belgium right now. it's called the reformers party. consider it center-right. and we asked him about what he thought about the far right's

call for more borders, not fewer borders. >> extreme right parties just don't like europe. this is their main problem, they don't like europe. they have no european project. the european union is the continent of human rights, of democracy, and i think this project, when it is attacked like that, it is the capital of the european union. so, it's important that all our values, our democratic values, are put forward and that we defend these values. i'm not sure that the answer of the extreme right is really the best one. >> reporter: the answer is going to be intensely debated in the coming weeks and months. guys, back to you. >> yep, that debate will rage on, michelle. thank you very much for the update from brussels. let's bring back our guests, colonel jack jacobs and ambassador fred kattou, former

ambassador to kuwait and the uae. the fact that there are emerging links between paris and brussels, what does that tell you? >> it tells you that isis knows what it's doing and knows its target, a loose confederation with no borders. don't forget that these people in brussels are second and third generation belgians, completely disaffected. there are socioeconomic problems that have contributed to this, but from a security standpoint, the single biggest problem is that once you step foot inside any place in europe, you're in. and it's extremely attractive to people who are trying to escape the middle east, but it also poses a big security problem, and it's not going to be easily soluble. it all goes back to the whole concept of having one sort of loosely amalgamated europe. it sounded great from an economic standpoint, except for

the currency, which we can always deal with, which never made any sense to me. i was a bankers trust, ran bank exchange options worldwide for the bank -- >> i did not know that. i did not know that. >> look, it kind of -- it ruined our interest rate -- we were capturing interest rate among european currencies, and it ruined that business for us. all of that notwithstanding, from a sociological standpoint, from a political standpoint, from a security standpoint, it's extremely difficult to deal with, and it's not surprising that individual countries are saying, wait a minute, we don't like this loose amalgam, we're going to do something else. there's one other thing to keep in mind, which is really dangerous, credentiertainly ove near term. in june, britain's going to have a plebiscite to decide whether they will stay in union. there is evidence to indicate that people who want to leave may hold sway. think about what the economic situation is and security situation is as a result of that.

they drop out of the eu, europe, both europe and britain become economically weaker as a result. and the guys who really take it on the chin is the united states, biggest trading partner is over there. so, security problems and economic problems all as a result of this. >> mr. ambassador, the way that's framed by the colonel here, it seems, obviously, that the attention should not be restricted to the new flow of migrants into europe. so, how do the european countries actually try to put up a firmer defense, and essentially, you know, go to their own populations and try to put up these walls? >> before you answer that, mr. ambassador, let's take a quick list dwroen when to the attorne in washington, d.c. >> sure. >> my apologies. >> -- the terrible events that unfolded in brussels earlier this week. let me take a moment to reiterate that the entire obama administration and the american people continue to stand with the people of belgium, with the people of all of europe and the world in condemning these

appalling attacks and in offering our support, condolences in any way that we can. our thoughts and prayers are with the victims and their loved ones, both those who perished, those who suffered, all who are touched by this, and the department of justice is in constant communication with our counterparts in belgium. we are committed to providing any and all assistance as we move forward together with unity and with strength. now, i also want to make clear that while we have received no specific, credible threats to the homeland, we will continue to remain vigilant in order to ensure that we can keep the american people safe from harm. thank you. now, i am joined today for this announcement by fbi director james comey, by the u.s. attorney for the southern district of new york, preet bharara, and the assistant attorney general for national security, john carlin. we're here today to announce a major law enforcement action as part of our ongoing efforts to disrupt cyber threats and to protect our national security. today we have unsealed an

indictment against seven alleged experienced hackers employed by computer security companies working on behalf of the iranian government, including the islamic revolutionary guard corps. a federal grand jury in manhattan found that these seven individuals conspired together and with others to conduct a series of cyber attacks against civilian targets in the united states financial services industry, that in total, or in all, in sum, cost the victims tens of millions of dollars. now, between late 2011 and mid-2013, the united states financial sector suffered a large-scale and coordinated campaign of distributed denial of service, or ddos attacks. this is a particular kind of cyber attack in which multiple compromised sources are used to target and overwhelm a single system. and through these attacks, the servers of 46 financial institutions were flooded with traffic over the course of 176

days. as a result of this ddos attack, online services were disrupted, hundreds of thousands of americans were unable to access bank accounts online. these attacks were relentless, they were systemic, and they were widespread. they threatened our economic well-being and our ability to compete fairly in the global marketplace, both of which are directly linked to our national security, and we believe that they were conducted with the sole purpose of undermining the targeted companies and damaging the online operation of america's free markets. in addition to the actions that we have detailed, one of the defendants is also charged with illegally obtaining access to the supervisory control and data acquisition system of the bohman dam in rye, new york. at the time of the intrusion, the dam was undergoing maintenance and had actually been disconnected from the system. but for that fact, that access would have given this defendant

the ability to control dam levels, flow rates, an outcome that could have clearly posed a clear and present danger to the public health and safety of americans. i would also like to thank the department of homeland security as well as the city of rye, new york, for their assistance in managing that particular incident. in unsealing this indictment, the department of justice is sending a powerful message, that we will not allow any individual, group or nation to sabotage american financial institutions or undermine the integrity of fair competition in the operation of the free market. through the work of our national security division, the fbi and u.s. attorneys offices around the country, we will continue to pursue national security cyber threats through the use of all available tools, including public criminal charges. and as today's unsealing makes clear, individuals who engage in computer hacking will be exposed for their criminal conduct and sought for apprehension and prosecution in an american court of law. this case is a reminder of the

seriousness of cyber threats to our national security, and these public criminal charges represent a groundbreaking step forward in addressing that threat. we will continue to use every tool at our disposal toll investigate the malicious cyber actors so that we can attribute their actions down to the country, the government agency, the organization and the individuals involved and charge them publicly. now, i'd like to thank all of those who worked so diligently to bring the investigation to this point, including particularly the targeted private companies and others in the private sector who were integral partners throughout this investigation. this case highlights the significance of what we can accomplish by working together, holding bad actors accountable and protecting the american people. at this time, let me introduce the director of the fbi, james comey, who will discuss additional details on today's announcement. mr. director? >> thank you, attorney general

lynch. good morning, ladies and gentlemen. the challenge we face in investigating cyber crime is that cyber criminals often think that it's a freebee to reach into the united states to do harm, to steal what matters to us, to wreak havoc. they think it's a freebee because they're halfway around the world and trying to use non mization techniques. the message of this case is that we will work together to shrink the world and impose costs on those people, so that no matter where they are, we will try to reach them, and no multihow hard they work to try to hide their identity and trade craft, we will try hard to pierce that shield and identify them. that's the message of this case. that's why it's so important that we bring this case. i want to say a word of thanks to the men and women of the fbi who worked very hard on this for a number of years across the country. what's also interesting about this case is that we did it virtually. we did the new york field office, cincinnati, chicago, san francisco and phoenix, all working together. we found a reasonably good u.s.

attorney's office to work with. and together, those offices contributed to a single effort in the southern district of new york to bring charges and impose costs on people who thought before this that it was a freebee. so, my thanks to the u.s. attorneys office, and to the good folks of the fbi for staying after this. people often ask us, well, these people are in iran, so how are you ever going to get them? the world is small and our memories are long. we never say never. people often like to travel for vacation or education, and we want them looking over their shoulder, both when they travel and when they sit at a keyboard. that's the message of this case. there is no place safe on this increasingly small world. with that, i'd like to introduce the u.s. attorney for the south korean district of new york, preet bharara. >> thank you, director comey, for introducing me and from whom i inherited a reasonably good u.s. attorney's office some years ago. so, the charges announced today respond directly to a

coordinated cyber assault on new york, its institutions and its infrastructure. as has been said, seven iranians charged with engaging in a campaign to disrupt and disable, dozens of financial institutions at the heart of the u.s. financial system, many based in new york city. and obviously, also, you've heard about the infiltration of the bowman dam, as you've also heard, these were not just ordinary crimes but calculated attacks directed by groups with ties to iran's islamic revolutionary guard corps and designed with a specific goal of harming america. the iranian defendants intended new york to be the epicenter of harm, because new york is the financial capital of the world, because new york has always been the blue chip target for those who want to harm our country. as i said and as the attorney general said, basically what occurred here was a group of individuals, seven charged in the indictment, three were members of a particular security

company called i.t. sec team, and four others associated with a security firm called mersad company, each and together within their respective companies engaged in what are known as ddos attacks. basically, by putting malware computers around the world, seizing control of them remotely and created what's called a botnet and launching attacks on at least 46 financial institutions around the country, which caused, as the attorney general mentioned, tens of millions of dollars of damage and harm to those companies. separately, you also heard about the infiltration of the bowman dam, which i think to our mind represents a frightening, new frontier for cyber crime. and although no actual harm resulted from that infiltration, the potential havoc that such a hack of american infrastructure could wreak is scary to think about. and so, at the end of the day, there is good news and there is bad news.

cyber criminals working with an entity with ties to the government of iran attacked and shut down vast swaths of the u.s. financial system at times, hackers infiltrated infrastructure as alleged, taking over computers that control the water levels at a dam near new york city. so, those sound like plot lines of a movie, but they're not. they're real crimes committed by real people in the real world. so, that's the bad news. the good news is that the department of justice and the fbi and other law enforcement agencies are on it, and they're working hard every day. and as this announcement today shows, we will investigate any perpetrators who seek to harm the united states of america. we will indict them. we will expose them. and then we will do everything in our power to apprehend and ultimately prosecute them in a court of law. we now live in a world where a devastating attack on our financial system, our infrastructure and our way of life can be launched from anywhere in the world, just with a simple click of a mouse. whether such an attack is motivated by greed or directed

by an arm of a nation state, it must and will be met with a strong law enforcement response. but beyond law enforcement, what we can and will do, these cyber attacks should serve as a wake-up call, a wake-up call for everyone responsible for the security of our financial markets and a wake-up call for everyone entrusted with guarding our infrastructure. our future security depends on heeding that call. now, i want to thank some people also. i know some people have been thanked, but you know, in the same way that this is no ordinary crime, this was no ordinary investigation. solving a global cyber intrusion occasion li case like this takes a lot of people working in a lot of places in close collaboration with each other. first, i thank loretta lynch for her support and leadership and guidance on this case and every case she oversees. i also want to thank john carlin, assistant attorney general of the national security division, and all the folks in his office who worked on this case and brought us to this point. and of course, the fbi

represented here by its leader, jim comey. the sprawling investigation here, as director comey already mentioned, involved a lot of different fbi offices. and i want to mention and acknowledge and thank them also. >> all right, that is preet bharara, the u.s. attorney of the southern district of new york, who along with fbi director james comey and u.s. attorney general loretta lynch are at the justice department announcing they are charging seven iranians with cyber attacks. eamon javers has been following this case. he joins us now from washington with some reaction. eamon, a lot of discussion to your earlier point about what message they're trying to send here. >> reporter: yeah, absolutely, sara. and the tension behind the scenes for the fbi and u.s. law enforcement here is always whether or not to go public with what they know about these attacks, how they were carried out and who executed them. for intelligence officials, they don't like to go public with this because it gives the other side some indication of what the u.s. can figure out about these cyber attacks. but as you heard loretta lynch there and fbi director james

comey say we are capable as the united states government of understanding who carried out these attacks and following it all the way down to the actual individuals who did it, and that calculation of whether to keep it private or not seems to be changing over recent years. the u.s. government more and more willing to go out and sort of name and shame the people involved in these cyber attacks, as comey said, so they don't get a freebee in terms of intelligence and damage to the united states. so, that is the overall trend we're watching here, and i expect that we can see a lot more of this in the weeks and months to come. >> eamon javers, thanks very much, from washington this morning. when we come back, the government releasing gdp data tomorrow. should you trust it? a cnbc study says maybe now. we have details on that after the break. with the dow down 91, now negative, along with the s&p for 2016. serena williams. hi watson. you are a fierce competitor. i've heard that. i have analysed your biggest matches. oh really? when down a point, you serve an ace 5.8 times more than other top players.

you sound like a coach. i am not. but i can customize training programs based on biomarker data. watson, that's pretty impressive. you might say i am the serena williams of cloud-based cognitive systems. nah, i wouldn't go that far. you're an at&t small business expert? sure am. my staff could use your help staying in touch with customers. at&t can help you stay connected. am i seeing double? no ma'am. our at&t 'buy one get one free' makes it easier for your

staff to send appointment reminders to your customers... ...and share promotions on social media? you know it! now i'm seeing dollar signs. you should probably get your eyes checked. good one babe. optometry humor. right now get up to $650 in credits to help you switch to at&t. man 1: he just got fired. man 2: why? man 1: network breach. man 2: since when do they fire ceos for computer problems? man 1: they got in through a vendor.

man 1: do you know how many vendors have access to our systems? man 2: no. man 1: hundreds, if you don't count the freelancers. man 2: should i be worried? man 1: you are the ceo. it's not just security. it's defense. bae systems. i'm courtney reagan with your "cnbc news update" at this hour. salah abdeslam summoned to court in brussels this morning. his lawyer telling reporters that abdeslam is not fighting extradition to france, but he did say he asked for a one-month delay on any transfer. secretary of state john kerry meeting with his russian counterpart, sergey lavrov, in moscow. the two discussing cessation of violence in syria, the ukrainian crisis as well as the international fight against isis. and iraqi military spokesmen

says the long-awaited operation to recapture the northern city of mosul from the islamic state has begun. iraqi forces retook several villages east of the city. at a state dinner in buenos aires last night, two tango dancers approached president obama and the first lady and coaxed the two of them on to the dance floor. each did a few twirls before sitting back down. good sports. that's your cnbc news update for this hour. for now, back to you and "squawk on the street." >> that video is everywhere today. courtney, thank you. a big call from ubs this morning, initiating wells fargo with a accelerating, citing risks to the company's revenue growth and credit performance. the analyst behind that call, brendan hawkin of ubs, joins us now to discuss it. we should note, the financials are the worst performers right now, wells fargo getting hit. this call stood out to us, especially because wells fargo has been such an outperformer in the group. >> right. >> what is the main reason why you say they're a risk to the revenue? >> well, there's a few different reasons on the revenue front, and most of them are not necessarily a surprise, but we

haven't seen the estimates for wells come down as a result. number one, wealth management has been a big contributor on the fee side, fee revenues. our primary concern is on the fee revenue side. their business in wealth management is morimasa fluent oriented. over 40% of their assets are in retirement accounts. this dependent labor fiduciary standard where we're going to get the final rule next month, is going to be a bigger issue for them. so, i see revenue headwinds there that could add up to 3% of the earnings headwind for the company as a whole. then also, you've got, of course, investment banking and private equity markets, which had been a tailwind for their revenues, now switching to a headwind. so, those are not reflected in the estimates at this point. >> brennan, at the core of your call seems to be should wells fargo trade at as much of a premium to other banks, other money-centered banks and in line with regular old regional banks, as it does. you have a 50% premium to tangible book value ratio versus

jpmorgan, twice. is that what it's about, people are paying too much of a premium for wells? >> right. when it comes down to it-of-get a premium valuation right now at nearly the highs versus the money-centered peers, as you point out, combined with revenue headwinds in credit, headwinds which are already reflected in some of the competitor earnings, but yet, not yet reflected in the wells earnings forecast, and that just makes me a little nervous here going forward for underperformance. i don't think there's anything wrong with the franchise. wells has a phenomenal franchise. the management team is outstanding. this has nothing to do with that. it just has to do with expectations being too high and the valuations simply beepiing rosy given the environment. >> brennan, we went through a period of february where we were worried about jpmorgan's energy portfolio. you cite energy and autos. how do you characterize the risk of the portfolio relative to other big banks? >> those are two of the main

areas of concern. commercial and industrial loans are really big for wells fargo, almost ten percentage points larger than the h-8 data overall. in other words, the total banking sector. so, with commercial and industrial loan growth likely to slow as tighter underwriting standards are going to crimp that growth, that's going to hit expectations for earnings for wells bigger than other banks. and then as you point out, energy, you know, it's mostly below investment grade for wells, so that has the potential to be a bigger problem for them going forward. on the auto front, you know, wells, when you look at the yield on that portfolio, which is usually indicative of risk, wells is up there with cap one and ali, which tend to take significantly more credit risk. people think of wells as the high-quality underwriter, you know, the firm that avoids the higher-risk segments of the market. and when you look at the data, it simply suggests that that may not be true in auto. >> brennan, thanks for joining us with that call.

wells fargo with a $45 price target on the stock. brennan hawkins of ubs. >> thanks so much. meanwhile, starboard value stepping up its proxy fight with yahoo, nominating nine directors to replace the entire board. mark mahaney is lead internet analyst at rbc capital. good morning to you. >> good morning, carl. >> we had a sense this was coming. what do you expect the outcome to eventually be? >> we don't have the date yet for the annual meeting, probably late april. it does seem like the drama is coming to a close. i think the probable outcome here is that we have a sale of core yahoo! to a strategic buyer, something like a verizon. that seems like the most likely outcome, probably happens in the next 12 months. it's hard to imagine the current status quo continuing. >> mark, you know, there was really not much in the starboard letter. this time or in prior ones, that had very specific recommendations about how the

core business could be fixed, as opposed to when starboard went after darden and they talked about the salt in the water for boiling the pasta. so, do you actually think this is all just tactically directed at sell rating a sale process? what happens if the dog catches the car here and they get their board in there? >> yeah, so, a couple of really important things. one, the activists have the facts on their side and the numbers on their side. this year, yahoo! is going to do per their guidance and per the street numbers, about $800 million in free cash flow. that's lower than at any point in the last ten years, and this is in a secular growth industry, so there's something dramatically wrong at carroo. now, yahoo!'s responded by talking about cutting 15% of the workforce, reducing, taking $400 million of costs out. so, they could do that. i think the activists would like them to do a little bit more. yahoo! also got unlucky, tried to do the spin of ali baba. that's what the activists wanted, and they ran into an irs buzz saw. you flip it over, the rean

maris marissa mayer was brought into the company was to bring out new products for yahoo! and also look at really good m&a activity, and i don't think she's succeeded on either one of those. i don't know who starboard could bring in to improve that process. the problem is that yahoo! is the deteriorating asset given what's happening at facebook and google. i find it hard to believe somebody's going to come in with a better growth strategy, but we haven't had great execution over the last three years. >> mark, of the list of executives and former executives in media and technology that starboard is proposing for the entire board, is there anyone that really stood out to you? did you see a wow person as the right person to be on that yahoo! board? >> i want to be careful how i answer that question. it depends what you want the company to do. if you want the company to just downsize, set itself up for a sale, you know, figure out all the inefficiencies in the busine business, sell off assets, this board that's being proposed is very good for doing that. if, however, you want to take a shot at what they tried to do three years ago in bringing in a growth operator to kind of

recover, to regain some ground, i'm not sure that that board is the right fit, but maybe they can find the right executive team. really, it's a question of do you want a growth asset or a value asset? we haven't had growth, so maybe the right solution is to really go pure out for value, cut costs, accelerate a sale. in that case, this management team's time will be limited. we probably won't see them by the end of this year. >> mark, cramer was pretty hot on one of the nominees on the slate, rick hill who he says has done good work at novellas and other companies. do you see anyone who would replace mayer, even on an interim basis? >> no, but you know, again, i'm not sure that marissa really laid up high enough of a bar or that great of a bar. so, i don't know that any one of these board members could do that or that there's an obvious candidate to come in and take place. it's kind of hard not to avoid the analogy with aol. this is a company who's also had a very weak strategic hand, but it was played really well by tim armstrong.

it's almost like, somehow, if you can get a tim armstrong-like person, and maybe even tim himself, to come over to yahoo! that may be the right solution, but it may be too late from a growth perspective. their right solution may be value, in which case you don't need marissa mayer, a product visionary like she is or somebody like that. really, you just need an easy operator, an m&t type. that's a different set of skills. >> the tim armstrong note is curious, given their position now, but mark, we'll see what the coming weeks and months bring. good to see you. >> thanks, carl. >> mark mahaney. when we come back, big data steve liesman says not to trust. he's going to join us on set after the break. but nothing could be worse for the whales. most of the orcas at seaworld were born here. sending them into the wild wouldn't be noble. it could be fatal. when they freed keiko, the killer whale of movie fame, the effort was a failure and he perished. but we also understand that times have changed.

today, people are concerned about the world's largest animals like never before. so we too must change. that's why the orcas in our care will be the last generation at seaworld. there will be no more breeding. we're also phasing out orca theatrical shows. they'll continue to receive the highest standard of care available anywhere. and guests can come to see them simply being their majestic selves. inspiring the next generation of people to love them as you do.

the first stock index ♪ (musiwas createdoughout) over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks. welcome back to "squawk on the street." the financials sector trading more than 1% lower today,

leading all s&p 500 decliners, as you can see there. all sectors, at least, well, nine of the ten here, in the negative side of things. some of the names dragging financials lower, prudential, also morgan stanley, lincoln national, metlife all down about 3% in early trading. financials now surpassing health care as the worst-performing sector, down about 7% on the year-to-date basis. we'll keep an eye on the banks. sara, back to you guys. >> thank you. the third revision of fourth-quarter gdp will be out tomorrow, even though the market is closed, but a cnbc study says that data might not be trustworthy. our steve liesman is joining us on set. i thought this a typo and we were talking about the chinese gdp. >> no, this is american gdp, but instead of gross domestic product, call it gross domestic problem. in an in-depth analysis by cnbc on the government's report shows a large and persistent error that should get everyone from investors to business executives to policymakers pause in relying on this data for key decisions.

cnbc went back to 1990. we found that average error rate of plus or minus 1.3 percentage points in the initial gdp reports, compared to where it would eventually be revised to years later with more complete data. so, a initial report of 2%, you can do the math, would later be revised to as much as 3.3% or as little as 0.7% on average. the research does not show any systemic overstatement or understatement of growth. we also found about 30% of the time the government gets the direction of growth wrong. that is, if it's initially reported to be higher than a prior quarter, it could later be revised to be lower and vice versa. the error rates haven't improved over the decades as well, despite vast improvements in computing power or communications fees. the size of their revisions from '08 to 2013 is the same as from 1990 to 1995. the error rates in the second and third estimates of gdp, guess what, they're the same as the first. so, despite more time and more

data, the revisions will be just as large three months after the end of the quarter as they are one month afterwards. the associate director for national economic accounts at the bureau of economic analysis, they put the gdp report together. revisions are not errors, they represent improvements to the gdp data as more information becomes available." they publish some of the error rates, not all of them, and they're very similar to those calculated by cnbc, but most economists contacted by cnbc did not know these gdp revision rates, but they added, it is a more big, it is a more complex, esoteric economy and is hard to measure. >> that could be some feat, if you can get the government to change the way -- >> go stimulus and start measuring happiness. >> that's another -- we already did in our work on first-quarter gdp weakness. we did go back and they changed

some of that. it feels like they kind of need to get with the program of the advancement of technologies. one of the interesting things is that they go back and they have to revise government spending. you would think the government should be able to count government. now, i understand business investment, intellectual property, that kind of esoteric stuff, but at least get some of the blocking and tackling right, you would hope. >> absolutely. all right, steve, thank you. >> my pleasure. >> on that note, let's get to rick santelli, get the "santelli exchange" this morning. good morning, rick. >> good morning, carl, and thank you. i'd like to welcome my special guest -- >> good to meet you. >> this guy is the corporate king, in my book, andy johnson. thank you. >> great to be here. >> the reason i call you corporate king is, this is a tough area. when you deal with corporate securities, when you deal with high-yield securities, unlike treasu treasuries and sovereigns, it's hard to discern where they're priced, are they rich, are they cheap. we know at the beginning of the year when equity markets were under duress, what happened to corporates and high yields? >> they blew out.

spreads blew out. it was amazing. never seen anything like it. >> so, looking at a five-year chart of barclays, whether it's investment grade or high yield, you'll see we challenged 2012. >> correct. >> and with the spreads widened, of course, it gets a little more dicey. that's your risk-off trade. >> exactly. it was definitely a risk-off period. equities down, oil tanking, amazingly so, and of course, credit followed suit. >> okay. now we fast-forward. we're flirting with unchange in equities, the equities have righted themselves. what's happened to corporate securities? >> corporate spreads have come in a lot. yields are down 2% on high yield, but we still like them, rick. they're still attractive. spreads are much wider than june of last year and even wider than june of 2014. so, still very attractive, although lower spreads than we had mid-february. >> okay, so, as we're talking, we'll show one-month charts. so, now that the spreads have come in a little bit, is there a lot of risk in holding these if you're one of the viewers? should equities stay flat or

move higher? >> well, if equities stay flat or move higher, these things are going to do fantastically well. i think the economy will do well. and i think these spreads could narrow by 100 basis points, at least in that environment. >> okay. so, what kind of yields, generically, for bbbs, on investment grade, what kind of yields can we expect? >> bbb investment grades, i would say 3% to 3.5%. higher beta, more risky investment grade, 4.5%. >> high yield, what are we looking at? >> 8.5% as we sit today. >> okay. now, let's go the other scenario. i know you don't want to, but we have to. >> do we have to? >> what's the outlook if equities deteriorate a bit? >> look, if equities deteriorate and oil prices go down, that will not be good for credit. however, it will be a buying opportunity, and if that were to be the case, i'd be buying more, rick. >> okay, if you were unsure, as many are, about equities, but you want to invest these higher-yield instruments, what is the safest place to hide out? >> the safest place is probably

investment-grade. the best place, the most attractive place is high yield. >> i got you. so, high yield, higher yields, investment grade maybe a little more certainty, lower yields, and maybe if you pick right, they'll perform okay, even in a down equity market. >> absolutely, that's right. >> you have a final 19 seconds. for many investors who haven't dabbled in this market, any specific companies? should they pick the great companies? it's a real picker's game after energy, right? >> it is, for sure. now, look, we like money-centered banks. in particular, we like preferred securities in money-centered banks. we think those are very attractive, rock solid. as you know, the financial system has done a complete turnaround since 2008-2009. >> andy, an absolute pleasure. >> appreciate it. >> sara and the gang, back to you. >> rick santelli, thank you very much. up next, why senate republicans might want to reconsider their plan to not vote on merrick garland's supreme court nomination. a look at his business record when "squawk on the street" comes right back.

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it is an election year standoff. senate republicans sowing no hearings and no votes on president obama's supreme court

pick but the gop should probably reconsider that strategy and joining us here to explain, cnbc contributor and prize winning new york times columnist, jim stewart. another good one for you to pick up with your expertise in legal and business issues. >> i think the republicans are making a big mistake here and i'm going to try to think as a republican but first of all i read all the law review articles and a ton of his opinions and one comes through which is judicial restraint. judge garland does not believe a judge should substitute his views for elected officials or appointed administrativive agents. that's not ideological. it's a mistake to call him a moderate. he could be anything and we wouldn't know because he does not believe in substituted his personal authorities for elected authorities. so in other words, people said

oh, well his decisions favor labor and of course they favor label because he's interpreting obama rulings. that's number one. number two, if they think they're going to hold out for somebody better, good luck. first of all polls are showing clinton way ahead of cruz and trump which means do you think she would appoint a garland? no. another sonya. does business want to see that? she was rated by law professors the worst justice on business interest. number one. number two, they could lose the senate which means that a democratic president is going to have to put whoever they want in and even if a trump is elected who knows who he would appoint? does he believe in judicial restraint. who knows. >> you know what his critics point to, that's his stance on

guns. for them that is a single issue test. >> that's the same issue again. if you look at what he is interpreting, he is not putting his own views of guns in there. he is trying to find a way to uphold what an elected authority has. in this case, the district of columbia. that is not pro or antigun. that's a procedural issue and one that many lawyers would like to see more of on the supreme court which has become more and more a dpolarized. they're not supposed to be ideological. it's dangerous if they are. >> this is probably going to prove a test as to when the senate capitulates on the election. if they think it's no shot atsawining it's the best they're going to get. >> a lot of people told me some of this is posturing and some of it is real and eventually if we do have an election then everything will change t. political calculus will change.

so we'll see. on the other hand there's a risk there. sanders has said if he wins he's going to with draw this nomination because he's not progressive enough. this should be a message to republicans. >> a lot of people argue the president called it a tit for tat but this has been going on before. it happened with oleto. don't you think this whole politicalization of the court began a long time ago. >> yeah. no question about it but first of all, i have to hand it to obama he's the consensus choice. and let them flounder. and i think that garland would be a step in the right direction. i personally don't believe in a strongly ideological supreme court one way or the other. >> hilary could paint republicans as obstructionists and point to this as another example. do you buy it's helping her? >> it probably will.

it's hard to point garland as a partisan extremist. he just isn't. >> let's look forward to the new york times. let's send it over to john forte. >> morning sarah, the drama over yahoo! continues starboard nominating a whole slate of directors. that activist wants to change the way things are working over yahoo!. what does that mean? apple the iphone se available for preorder but is this phone a big deal in the emerging markets or elsewhere. we'll dig into that in the markets on the verge of breaking a five week win streak. the s&p down just about .5%. the dow down fractionally also. all that and more coming up on squawk alley. opportunities aren't always obvious.

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post 9 here on the first day ahead of the weekend. dollar strength continues to weigh on crude. and hawkish charter relative to what we have been hearing the last few weeks. >> the bond market doesn't

believe it. >> it's the fact that the dow is going for three days down first time since february after a nice five week. the justice department charging this morning for allegedly coordinating a campaign of cyberattacks on a new york dam from 2011 to 2013. mr. ambassador, good morning to you. >> good morning. >> we were discussing the implications of these charges from the attorney general and the fbi director. and letting the oil and letting some of these. >> this is the underground warfare going on on a cyber level between iran, the united states and israel during the height of what could have been largely a war against iran's nuclear program.