Transcripts For CNBC Squawk On The Street 20140428

We begin with pfizer going after as traseneca. Bank of america and or previous Parent Company calling his meeting with the french president productive after the companys intensions to buy the Power Systems business. Pfizer says it is now considers options having two take over bids. Pfizers initial bid significantly undervalueed it and that it remains confident in its strategy. So much for shrink to grow. Well, i think that pfizer is a company that is always pro shareholder. If you have seen and acquire and get with you overseas shareholders like it. As tra seneca is not a great company. They have things in the pipeline that they see. But it is relatively unexpensive. They must like the pipeline better than we do. To your point it has been the key strategy in a way and the plan to separate the company and the divisions to separate them. You are talking about new division and you have the products that are off patent. Th that it would be incorporated into those three units. It goes to the cancer. In 2017 they have three years of audited financials. You would see a possible separati separation. Couple of quick things here from my m and a notebook. I was clearly not expecting this to happen. Last week if there was something going on they would have had to tell the panel about it. There was nothing going on last week except you had an enormous amount of investors talking about it. That helped to change the thinking pfizer to the point of lets try this again. They come up with roughly 7030 using the cash they have over seas. They came he with a real offer that will go to shareholders or say no, we are not interested. That is what we are going to be waiting for now. It is a different way things operate in the uk than they do here. Every single drug stock is open. These are being radically underval undervalueed in terms of this bid. A lot of their stuff if you look out five years. Even some of the analysis last week. Absolutely in a creative deal. And this tax in version. Yes, we are talking tax in version again. As importantly it allows pfizer to use the cashes generating over seas to bring it back without paying taxes. Nobody wants to pay the 30 . Look at apple taking the money back. When is Congress Going to wake up . I dont know. Pfizer is going to invert . Exxon ought to if they get involved with russia. You mentioned they are not a creditable company. I was worried about the dividend. Im worried about that dividend. Well pfizer doesnt have to worry about things like that. I think they said not to worry. Right. Nothing says it will be. Well see what happens here. We have a month to go it is incredible isnt it . We havent seen this activity since the 80s. These are bigger. They are. Now they will say and they did on the call that lizen, we are strengthening the inner core and it is the attractive news of the business but to your point whether it is steel, my lens failed attempt for meta. Getting out of the u. S. Tax jurisdiction to enable and free up your ability to move it. When they ask senators when they come on air do they know . Why are we taxing stuff . Clearly like Water Companies will find their way around it. You have to do credit on the tax. Every american should be trying to figure out how to solve it. They have an advantage over the industry or another. Shocker. But again they are saying that is not the main reason. Right now if you are pfizer or you want to bring back the money, most of the catch is oversees. But if you become a uk dom syl for Tax Jurisdictions you can bring it here without paying taxes. The treasury gets nothing. Idiots. Nothing. Should we move onto other big deals . Yeah, sure. Chip says yes. Comcast has strug a deal in whi which it would get the subscribers. That still needs approval. That deal may not close until early next year. This has been in the works for some time. Why are they continuing to keep a slate of directors here. It gives us leverage and it will include swaps and subs and a purchase out right of course of other 1. 6 million, 1. 4 million time warner customers and then you have a new code that is created. Existing customers after the deal so they will all be customers in which charter and then existing shareholders will be 33 would be charter. But it helping charter a lot. It was moving up last week when we heard of the proposed dives ti tour and it removes any questions about that and helps on the front for comcast which said it would be willing to devest of three million subs. They would keep new york and la and you create what would be a regional cable company. It is an addition of potentialal customers. But immediately they had 1. 4 million new subs and what was a failed attempt for them. They starting this a year ago. Almost a year ago i reported on the first oh ver tours. It gives them another runner up prize if you bill. Bank of america announcing it will suspend the buyback program. This after the bank miss calculated the treatment of structured notes related to its 2009 acquisition. They are going to release that plan. This is bordering on humiliating. Embarrassing. This is a disgrace. When did they discover it. Did they have any id what what is going on . The Federal Reserve took away the capitol thing. They will not proceed with the increase they are now in there with our friends at city and they are going back in. This is a disgrace. The key is that there is not going to be a capitol return. If there is the feds wont let them. This goes back in the release to the structured notes that Merrill Lynch issues and it has to do with adjusted for the losses on those notes. Let me throw a bone to bank of america this is not how you calculate regular capitol. It says you mean to tell me that you could have something that is 30 basis points over stated how much capitol you had and the Federal Reserve im sure they are saying are you kidding me byes . This could go under the leverage ratio and you are very close to the line already on the metrics that you are judged on. They are going to say that they werent that close. They are still fine and the Federal Reserve is king and the king has decided get out of here. Get out of here get your act together this is not you can sugar coat this not to worry but the Federal Reserve has said do not proceed with the increase. But they came back with something that was less but to announce the decrease and take it back. They are afraid one day they are going to have to cut them. You announce it and put it through and then you cut it. That is going to hurt. This is one of those things i like the company. You do. I like it. This is what people at home, im looking and saying how could i have been so stupid . They are hard to understand. People are saying wait a second. Im telling you i used to sell these products they are too hard. You have to imagine the number of man hours that went into the first calculation. Paying for the shareholders and no one pays for the fine. Gears up for what could become the big deal. And we will get a live interview with the cfo coming up. Dallas has not fallen in april since 2005. Well see if we get heat. More squawk on the street back in a minute. At your ford dealer think . They think about tires. And what theyve been through lately. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit card at the big tire event. See what the ford experts think about your tires. At your ford dealer. JGeneral Electrics push, ges ceo met with frances economy minister and said that the talks were open friendly and productive. And confident that they can get this done. They got, i dont know the relevance of see mans being able to pull this off. They are known as being the cleaner power plant company. Cleaner builder and they have done a lot of work with carbon capture. The companies that have used it, it has not been a boom for them. If you want to own that business, it is making power for less global warming. That is what they do. You want it because the world caring more about it than many of us in this country. When you want to try and buy a company. You have to go over the rules there. And the Shareholder Base if you cant to try. In france you have to meet with the guy that run ares the country. Hey guys, come in. We want you to make a bid. That is what happened. I dont know. He doesnt have a lot of business. 10,000 employees in the country. More than what siemans does. Why is everything so astonishing. I got a guy to get that deal done. Exactly. Right. I went to college for that. You like the move . I love their oil and gas. I love that business. I think that is where they should keep putting their money. This is all about energy and they are the king of energy. But there are still holes. When europe is recovering. You get more orders. Worone of these companies, these companies were down on their luck. You are not coming in at the high. The reason i like the ge deal if they can get it it is so clear that europe is coming back. You want in. Anything they bought killed them. It is like let me in, man. I want to build bag and europe is working. When we come back well get cramers mad dash. Tomorrow morning cnbc is going to reveeg the list of names on the 25. Right here on cnbc. Take one more look at the futures and a lot more squawk on the street, straight ahead. To upstate new york . Tingg i tell people its for the climate. The conditions in new york state are great for business. New york is ranked 2 in the nation for new private sector job creation. And now its even better because theyve introduced startup new york dozens of taxfree zones where businesses pay no taxes for ten years. Youll get a warm welcome in the new new york. See if your business qualifies at startupny. Com all right it is a mad dash for a monday and man, it is a busy monday. So many things to keep track of. Pieces as things dribble out, bank of america, we just found out the list of people who are being sanctioned in russia. You are going through it and call it an export company. You get ross neph. Why is that significant. Bp has a relationship and there is a lot of oil and gas. You dont want your gas cut off. Did they coordinate this with the european leaders . The one thing that putin is in charge and he could say that the fear would be that he goes and shuts him down. That was the problem with this quarter last week. It was wow it looks like if he wants to he can create this hermetically sealed country. There seems to be some tension between what the countries want. Is the president freelancing or saying listen, this is what we have to do. Woodrow wilson. You have ideal list president and they are coming out of a recession and concerned. When this lift comes out. These guys are russian corporations that we are dealing with. Many of these have big relations. Germany, france, we have to go down the list. Fascinating story in the times about putins money about whether it is real or not. So many different situations to keep track of after this. Female announcer sleep trains interest free for 3 event ends sunday. Its your last chance to get three years interestfree financing on beautyrest black, stearns foster, serta icomfort; even tempurpedic. Plus, get free delivery, and sleep trains 100day low price guarantee. But hurry sleep trains interest free for 3 event, ends sunday. Sleep train your ticket to a better nights sleep at your ford dealer think . They think about tires. And what theyve been through lately. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit card at the big tire event. See what the ford experts think about your tires. At your ford dealer. On car insurance. Everybody knows that. Well, did you know that game show hosts should only host game shows . Samantha, do you take kevin as your lawfully wedded husband. Or would you rather have a new caaaaaar say hello to the seasons hottest convertible. Ohhh. And say goodbye to samantha. [ male announcer ] geico. 15 minutes could save you 15 or more. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. You are watching cnbc, squawk on the street on this monday. Opening bell in about 60 seconds. 8 weeks of up, down, up down the longest streak like that in 7 years. It has been hard to get back to back winning weeks. If these high fliers come down. In that period of march 15th, 2000, it is not the kiss of death for the market. But p you would have to continue to get the high fliers. The new ibos that is being killed. On top of that a bunch of names that are going to tell the stories of the week. Starting tonight with buffalo wild. These are front and center. Down here at the big board an affiliate of Charles Schwab and at the nasdaq a distrib tour of Building Materials we will get pending home data and as to why housing is hard to come by. Kimberly clark not enough diapers being sold. Why is that . Need more babies. You had a kcouple. I was thinking about that. All right. Yeah, well, anyway, i think if you look. I was going to go to i continue to think that there is not a lot of inventory out there. People are under estimating the supply side. There are not a lot of homes for sale. Coming off friday we watched amazon shares almost at the 300 mark. I was keeping an eye on them and that is down again. There is phizer of course that is important. You want to see them in line with your potential vision. It would be one of the largest deals of alltime. They are certainly happy to see that. I think the call is concluded. We dont know what the actual offer will be. They confirmed the previous offer and are forced to come back again on friday which is when they come back with the latest offer after they privately discussed this with them back in january. We will know more in terms of what the real new offer will look like. What the composition of cash to stock will be. Back to my point though, amazon is down again. I think that group, the cold stocks are down. You just if jim stewart, this piece was great on saturday. They are going up again everyone. What is their advantage of going up again netflix and google. Not because they havent succeeded. It is hard. I would say, the one thing i would disagree with it is the analysts and the shareholders that have turned on a company for a decade. Remember the stock flew up when the news came out because people said we are spending more on china and the analysts have turned on it. They have both turned on it. And then you could argue, they decided to forget they are no longer over looking anything. Versus a company like 3m. What a think of beauty. Give the money back. Shrinking stock. You know what is winning versus losing. When you say these are done, are you saying that is an amazon story . Priceline is 19 times earnings. A lot of the companies that are going down are being lumped together. Twitter, they have to start showing Something Different about profits. They talk about listen, we are about p profits, which turns into dividends and they have to get that mantra. They cant, it is not in their dna. They are not set up to be part of that dna. They were all using the amazon model. It is like their rates were. 5, very high. Now they are up to 18, 19. Above 20. Fireeye. I dont want to mention how high. I have been trying to book the chief officer there. There is one guy in charge there, right . It has to be. It is the Strongest Division i have seen. That is who i want to talk to. That stock is still winning. Cancel it. Pull it back. Cancel it. Walk away if you believe walk away. Can we get back to m and a for a second . It does drive you batty. You have fire coming out of your eyes. Look at this. You are going to fry somebody with your eye beams. It was monumental. It takes up your whole pc. You need a boost when people are selling there. They are done and that is worth pointing out. We vpt mentioned it this morning. The letter written by the chairman. Saying we tried and tried to be engaged with you. Our efforts have been rejected out of hand repeatedly. We read in the report of the trancecks of our company is extremely bur rat tick and nothing could be further from the truth. We believe would be necessary from the enterprise. You can see it is a significant impact. There had been the thought that they would be able to reach consmation. Oh may. You going back to the huggies . No gold diapers. Did you see bp down by the way . A lot of things going on. I do not trust this market. I dont trust it. I think that at any given moment we are going to hear something out of putin. These are not joe blow guys. They call putin and say pull out of ukraine . No. Bp, pound sand. Shares of charter are up sharply. Worth noting. The stock had moved up last week once it completes the acquisition. Having a strong day yet again. If you look at the far right it moved up towards the end of last week. Putting to rest any thoughts that they would have any yet again to buy time warner. And ge had been up too. Ge, anytime you can get that configuration anytime you can get that industrial. Finally, we havent mentioned the 1. 5. They will sell royalties as part of that whole actavis. It looks like ever since they put themselves up for sale, if you have a new drug you should be valued properly. I look at the companies that are going down versus the portfolio that astraseneca has. Move to ireland. Move there. You can move there and still not have jurisdiction there. What percentage can you get away with there . There are tasks, but you are good. You incorporate there and you are bassed here. Vrx is not ireland. It is bermuda. But it doesnt have to be canadian. This is some sort of weird moment. Would you team up with a hedge fund to make a deal . They are good honest people here. They are acquiring that company and there is a push by some. Saying hey, come on. Do the tax in version the same thing. Wallgreens it is a chicago bassed company. They could file a piece of paper and they could acquire a company there. It is crazy. Congress has to do something to maybe theca code work. We are going to change everything. You are going to get your picture with brad cooper and that is how it works. Can we reverse that please . Lets get to bob casani who has been waiting on the floor. Nice move up today. What if any rotation is going on . I know we are obsessed with three dozen internet names. Look at where we are most of the time historic highs right now. The nasdaq have had a rough month overall. Look at the dow transports, the utilities closed as a six and a half year high. They are unwinding leverage in a small group of well publicized named. A lot of debate is growth versus value. There is some signs it is happening. Growth is down 1. 2 . Remember the classic definition. For both versus value. And look at the names that were classic names that we have been talking about. These are names that we talk about all the time. They are down by 20 . Many of them are up 10 or more. Some of them are smaller but they are in the energy space. So take a look today. Micron, kell log, these are all value names. They probably have six per accept. It is about we had this debate again. That is what value versus growth is all about here. But their revenue guidance for the Second Quarter brackets expectations. It was up early on and now you see to the downside. You were talking about these absurd incentives. Look at what is going on with apple. That is to pay their by back program. They have 150 billion they are sitting on in cash. Why are they floating 17 billion . Why should they pay taxes on that money oversees . They can float new bonds for 2 . What do you want . Apple is doing it. Karl there is another classic example of the incentives of keeping the money overseas. When we come back eye live interview with steve schwartzman. When we come right back. [ bagpipes play ] make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Keep your eye on bfa. Spending the buybacks at the open traded 21 million shares before the bell. 20 of the average daily volume. Sure when they found out they fold people, told the fed. But it will be a damaged stock for a long time. Special guest good morning brian. Good morning karl. Guys thank you very much. Stephen schwartzman wellknown to our viewers. He joins us bright and early. Welcome. It is the one Year Anniversary of your program in china. You funded that couple of hundred Million Dollars. I have to ask you there are a story today. Leon black paying his partners in staock instead of cash. Most people need cash to live. It has been my experience. And so we want to 100 stock. And you know the stock is probably more on the people already ownp a lot of stock. A hot year for deals so far. Do you think that companies are still trading for companies. Are there still bargains to be had . I dont know. There are important acquisitions if they are strategic. They fit. And there are cost take outs. So, absolute levels are pretty high, i think. So, are you saying over priced . I didnt say that, they are on the higher side. If you buy a company, and you price them in the way that they work for you, then there are deals to be had and we are wide active. If you are buying an unrelated company or the company itself cant go through a big improvement regime. We never buy anything unless we can improvement, so in that sense there are still things around and whether you call them animal spirits, over 2 trillion of cash. Stocks have moved to a price where you can issue them. You will see more activity and people have been expecting this and now it is happening. Very quickly. Do you think the equity market isnt happening . Do you feel like we are at this weird point of equities and not enough cash to absorb the other stocks . That one ill throw back at you. All right i had to ask it. Listen, speaking of china, great work there. One of the top schools in china, the economy has seen some signs of slowing down. China is an interesting place and i guess im not in the non belie belie believers school. China is growing and you dont care. The president of china, announced that he thought growth can go down into the sixes to facilitate the pivoting in the economy to one of more internal consumption and consumerism. It depends on why that pressure is happening. You cant make your people richer. And the chinese are the most in the world. It is low there and there are a lot of poor people. But it is not as big as it needs to be. So in that context, there has to be less emphasis on expeorts. If you want to make your people more money per capita, you pay them more. That is the paradox and they are about to go through a series of changes to transition their economy. If that resulted in Slower Growth it shouldnt be a surprise. We will be bringing 200 people from around the world including 20 will be from china to learn together. So that these students can learn about about china after they finish their stay. Meet the people and travel around from mentors and learn how china works. Blackstone group a buyer or a seller in this market . We have been very active buying both companies and real estate. It is more difficult to put out credit money because the markets are so hot that feels on credit have gone so low it is not as interesting. It is for our companies but not for our credit people. This has been an active time for us. We have sold companies and real estate and are buying a lot as well. There are places in the world that seem better. They are starting to finally sell assets there for companies in the united states. The economy looks like it is doing better. Our companies are out performing the s p in a pretty descent way. There is higher confidence from operations. I know you have a breakfast to go to. Thank you very much. We may get some comments about the valuation of this market. Greetings from the west coast by the way. Thank you very much. Way too many ipos. Stay with us. Announcer where can an investor be a name and not a number . Scottrade. Ron im never alone with scottrade. I can always call or stop by my local office. Theyre nearby and ready to help. So when i have questions, i can talk to someone who knows exactly how i trade. Because i dont trade like everybody. I trade like me. Thats why im with scottrade. Announcer scottrade proud to be ranked best overall client experience. Could mean less waiting for things like security backups and file downloads youd take that test, right . Well, what are you waiting for . You could literally be done with the test by now. Now you could have done it twice. This is awkward. Check your speed. See how fast your internet can be. Switch now and add voice and tv for 34. 90. Comcast business built for business. Time for cramer and stock trading. We have to stop realizing that every single stock is an over valued piece of junk. Amazon ran up and has come down. They are not giving you what you want. I was going over the major biotechs this weekend. These are selling through merck. It is 7 times enter price divided by revenues. I know they are not all junk. If twiser were actually able to do a good number only three have done worse in the month of april. You hated it. You didnt screw it up. It has been under severe pressure. Bank of america. They have come on tv. I want to explain why this was innocent. It was. In the meantime of all the names that were going to report. You said watch the systems. Time warner and mastercard. Do not over look what is happening in russia. Putin is like getting out the s p. Ill hit the finance sector. That guy trades. Jim, well see you tonight. Diana pending home sales up. 3. 4 month to month in march. That was a solid beat. It is the first monthly gain weve seen in nine months. Pending home sales down. But again this is folks signing those contracts. But it doesnt play out. The gains were not in the area you would expect. Still down 11 more than a year ago. In the northeast, pending home sales were up and in the northwest they were down. Did see gains in the south. We are looking for more inventory to come down in the market. It is a good solid gain we saw but we are going to need to see those gains before we can say that things are getting better. The jury is still out on these numbers. Nice to get one of those. When we come back. Profits and smartphones. Well discuss them all. Dow is up almost triple digits. Were back in a minute. [ female announcer ] its simple physics. A body at rest tends to stay at rest. While a body in motion tends to stay in motion. Staying active can actually ease arthritis symptoms. But if you have arthritis, staying active can be difficult. Prescription celebrex can help relieve arthritis pain so your body can stay in motion. Because just one 200mg celebrex a day can provide 24 hour relief for many with arthritis pain and inflammation. Plus, in clinical studies, celebrex is proven to improve daily physical function so moving is easier. Celebrex can be taken with or without food. And its not a narcotic. You and your doctor should balance the benefits with the risks. All prescription nsaids, like celebrex, ibuprofen, naproxen and meloxicam have the same cardiovascular warning. They all may increase the chance of heart attack or stroke, which can lead to death. 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When you look at the green arrows. Some of the merger and acquisition activity. Is this a new catalyst that you need . I think we are in a situation where the Global Economy is expanding and i think corporate Balance Sheets is underway. One of the key catalysts is going to be m and a activity. I wonder about p the structure of deals. A lot of these deals are made up of cash and stock. It depends on the individual situation and industry that we are balking about. As long as we continue to see deals being down. N now that we are half way through the earnings season clearly it looks like eps grown. Did you get the guidance and the out looks that you needed on the markets . I think the out look has been continuing to come down. 40 and 10 . That is in line with what we have seen in the past. The market has taken into the account the bad winter affected earnings. But we are seeing clear winners and losers in this market. The market has gone nowhere. The average company. When we were coming towards the end of last year the view was there had been quite a rb. But that was great because everything was expanding. So the situation has clearly changed. I dont know if it has changed. Have you seen that snap back after the cold weather . I think we are. You start to see clearly what expectations are Going Forward we will see the market reward companies that continue to grow earnings and increase positive sentiment Going Forward. That is an open answer. There is not a huge amount of conviction. Do you think they are going to do blah, blah, blah blah blah . I do. It is an interesting week. Perhaps a little backward looking. And then a jobs report. Do you think we will see a clue from the fed or from the jobs report about what comes next . I think part of the reason why we are having volatility is that we have a new fed governor. We have a couple of situations where we have stepped on each others toes. I dont think this is going to be a situation where the market is going to be in sync with janet yell lynn. But thee will be making sure that we dont move too quickly. She is concerned about housing. I think even if the economy does do well in the next couple of months she is the amount of costs that they are creating. She is concerned about unemployment numbers as well as structural unemployment because of that. Well have plenty to read on the report. Thank you for picking up the weeks here on the market. Tensions in eastern ukraine. We have breaking news on that. John . Sara, we now have the formal burial of that chord that was struck days ago. These new sanctions target 7 individuals designed to hit people and Companies Close to putin. They stopped short of the sectorral sanctions that would have the most impact on russian thea but p on the american and the uneconomies. The administration has been trying to move in tandem with the counter parts. But not on companies themselves so it is a delicate process and not deterred russian behavior so far. Over time, imposing these costs is going to change the kcalculu for russia. Ceo is revealing that he made an offer in january that was rebuffed to do a deal at the end of april. Could it be the shird time lucky to do a deal . Good morning simon, that is right. It made a 100 billion offer among the industrys largest saying that they are currently reconsider i reconsidering their offer. The big head line today saying that they would reincorporate there. Pfizer pays 27 tax rate. That rate would come down about 21 and saying today that the tax rate would be her with this transaction. Management saying they have a lot of synergies in the pipeline and where they operate in cancer and diabetes and talking about how they could combine Breast Cancer and some of the drugs in amino oncology. That is a huge head line that it could not ignore. Saying it has dropped interest or with another offer. Back to you. Thank you very much. Back at hq. In the meantime look at shares of bank of america. Massive volume. Kate is back here to talk about exactly what happened and how. The stress test you take the average of the banks levels and you apply them to the various scenarios and housing prices fall. That is the extreme case and if you have one of those numbers wrong you have to go back and start all over. These are complicated models and if you have one of these off, then you go back to the drawing board. Im told by a source that bank of america notified the fed but that it will take a few more weeks to see how that affects the performance. We are not going to let you buyback stocks or raise your dividend. And now worried that they wont get it at all if they dont pass. It is interesting to see that come out. It is a small risk in my opinion. I think city group is on the worst end of that spectrum. They cant resubmit that plan. They are at least confident that they will be able to pass those levels. They dont know what the levels will be and whether they will be able to achieve that bar. But they are exsolicit the return will be less than the previously announces capital action. It will be lower. On one of these the most that it would go down is the base case. The bank is giving up all of the capitol that it had in the First Quarter to cover the losses. Now it goes away and you will have that come out of the capitol you draw the distinction when it comes to returning that cash. No bank wants to thank that it will pass and not pass flt bank of america has one accounting nuance that they will be able to fix and if they cant it is Eye Department dent fibl. It still goes to the idea that the people in charge of these banks are tenning to model them. It brings back the point that this is not Brian Moynihan running it. This is the fed calling the shots. No matter how much growth they see they report to the fed and the fed has the final say. Thanks kayla. The market is on a bit of a roller coast ter ride. Saying the s p could rise as much as 4 . Gee have the results of the survey. Reporter this is an interesting development. Getting more bull issue senior on stocks. We are seeing an s p by june. Moving ahead to the end of the year and for june 2017. And 8 . N now this comes by the way. Still looking for higher Interest Rates in the years ahead. It would be on the ten year. 267 that would be in june 2014. Looking ahead to the end of the year. What they are looking for is 321. Call it half a basis point. And they got more hawk issue. Now looking for 1 by the end of 2015. 250 basis points between the ten year. Easy money driving momentum seems to be petering out. John roberts says we remain worried about a potential shortfall in earnings. He likes this market and says Retail Investors need to be in this market which he points out earn you nothing simon. Back to you guys. Up next exclusive interview. And tomorrow morning cnbc reveals its first 25. Right here on cnbc. Velocity 1,200 feet per second. [ man 2 ] youre looking great to us, eagle. 2,000 feet. Still looking very good. 1,400 feet. [ male announcer ] a funny thing happens when you shoot for the moon. Ahh, thats affirmative. [ male announcer ] you get there. Youre a go for landing, over. [ male announcer ] the all new cadillac cts, the 2014 motor trend car of the year. Today is monday today, we greet you. Treat you. Care for you. Today, you can come to Cleveland Clinic for anything, everything or just to get that thing checked out. Big, small, and yes, the best heart care in the nation. Its here everyday, for everyone. Thats the power the power, thats the power of today. Cleveland clinic. Call today, for an appointment today. Female announcer sleep trains interest free ends sunday. Its your last chance to get three years interestfree financing on beautyrest black, stearns foster, serta icomfort; even tempurpedic. Plus, get free delivery, and sleep trains 100day low price guarantee. But hurry sleep trains interest free for 3 event, ends sunday. Sleep train your ticket to a better nights sleep welcome back. Check out shares of broker industries. The medical and scientific record First Quarter profits on a 13 rice on their sales. It raised above wall street forecasts. Those shares up about 7. 5 . Shares of corning are up. They are losing altitude this morning. Despite the fact that it is predicting that pricing will return to normal in the wake of the sixth consecutive quarter. Importantly joining us from core n nins hq. Squoo lets kick off with the biggest part of the business. You finally bought your partner samsung out of the huge lcp Gas Production facilities. How are you going to double down there. What is happening there. Well be able to get quite a bit in the way of Cost Reduction . We think that will help on our cost and help us fight against fall iing prices. We expect our price declines to be better in quarter one. Dont most order less glass for you . In quarter one we had a specific situation that we believe related to a competitor affecting a price that affected us. They will be down from what we had in q one. The rate of price decline is almost back to our target. You got quite a forecast is that disappointed . We work off the 4th quarter of 2012. We are seeing what we think could be good growth 20 to 25 in sales. We are building for new model launches. We are looking for a good q 2 and think that will carry into q 3 and q 4 also. There was talk that it would be using sapphire glass. We think gorilla will be the leader in the market. We will be launches a new glass shortly. I mean just on that point you will be aware that there is a huge amount of talk on the internet. What is it that you can say about gorilla glass versus sapphire . Well, the advantage for gorilla glass it is about a tenth of the cost and can be made thinner and breaks less in our break tests. We think it has great advantages and we are going to continue to invest in new versions. We think it is the better product. Just in conclusion, jim. There are other parts to the business. Optical, Environmental Services which came in 35 million. If there was one thing that you could pick out. That you know about the business, what would it be . I think it is those two segments both in optical and environmental if good things going for this in terms of our growth. In the case of environmental we think the heavy duty market will grow strongy and internationaly and we hope that investors will Pay Attention to the business. You are on your second 2 billion share. Where do you go on returning cash to shareholders. We are right in the midst of spending the 2 billion when we announced and did the deal. We will accent the accelerated stock in may and have 600 million left to spend. And our board is committed to doing the purchases with that. After this one is up we will consider share buybacks and d f dividends. The cfo of corning there. Straight ahead how you can get a piece of an nfl stars success. Were back after a quick break. Peace of mind is important when youre running a successful business. So we provide it services you can rely on. With centurylink as your trusted it partner, youll experience reliable uptime for the network and services you depend on. Multilayered Security Solutions keep your information safe, and secure. And responsive dedicated support meets your needs, and eases your mind. Centurylink. Your link to whats next. On car insurance. Everybody knows that. Well, did you know that game show hosts should only host game shows . Samantha, do you take kevin as your lawfully wedded husband. Or would you rather have a new caaaaaar say hello to the seasons hottest convertible. Ohhh. And say goodbye to samantha. [ male announcer ] geico. 15 minutes could save you 15 or more. Trwith secure wifie for your business. [ male announcer ] geico. It also comes with public wifi for your customers. Not so with internet from the phone company. I would email the phone company to inquire as to why they have shortchanged these customers. But that would require wifi. Switch to comcast Business Internet and get two Wifi Networks included. Comcast business built for business. Welcome back to squawk on the street. Breaking news on the announcement of this morning. They are going to respit their plan to the fed on may 27th as a result of an error discovered in the last 72 hours or so. Structured notes that go back to 2009. Apparently it was brief and reassuring this was an isolated problem one that went unnoticed and could affect their dividend and buyback plan. It was scheduled to go up a nickel and may be affected. Perhaps not though. In addition, Terry Laughlin is going to be in charge of working with the company and fed to make sure that everything is accounted for when they resubmit. This area was rediscovered this week. They are going to work to remedy it and get the cue out. Obviously a big black eye out for bank of america this morning. Ill say, as you report this of the day, down almost 4 . Thank you for bringing us the latest. April has been a volatile month. We have a special guest who says dont sell, just reallocate your money. Steve cucciaro, we are talking about the largest adviser in the united states. They are owned by Charles Schwab. You are not releasing your cash allocation at this point. U. S. Stocks have greatly out performed. We are pulling back and we think there are more opportunities. We think the Playing Field is being leveled. Where are these opportunities. Are you putting money into china . The other developed countries. Barring any escalation, we think that germany is still a potential and even japan having a great year last year still has a further upside. How much influence does it have on the upside. Hard to tell. Where people should watch is not the politics as much as the threat of sanctions. For instance people ran into the japanese yen as a result of the asset. When it goes up and down once ukraine starts to calm down. There is the influence you can see. What about other emerging markets. Should i invest in nigeria or banks in the middle east for example . Where are you putting money at all in that . We are. But carefully. One moust look at how demographics are emerging in markets. They allow you to divers fi more broadly. Gold real estate and cash. How much of your assets are in gold right now. We are in 3 and 4 . We think people should have gold as some time. There is a risk if the fed should start to decline longterm real Interest Rates will gain and that will be bad for gold. We have active versus passive management. You are moving stuff around the world all the time. About a shird of your money is in this active piece of your money. We believe in passive management. We believe the etfs do a good job. Which class do you want to be in . Thank you for being with us. Biggest etf adviser in the united states. Back to you. We are just over an hour into trading. Lets send it over to don chu. Apple shares you can see they are up 3 and that is after an 8 move karl back over tow. When we come back your chance to get in on the earnings of an nfl star. Well tell you how you can get a piece of vernon davis and his future success. The dow is up 138. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Take a look at the market. The dow is up. Nasdaq is not doing too bad either. The dow is positive once again for april by 20 points or so. Shaking up wall street and the sports world with its ipo of vernon davis. They can buy and sell stock that is tied to a brand. They can get a piece of the San Francisco 49ers tight end. Based on his tracking stock and trade on a market created. You have been working on this for quite some time. A lot of your time spent with the sec. Its been a couple of years but we finally got there. Davis is the first guy out of the box there, correct . Correct. And well start trading the market today. For example, it is a tracking stock but what is the benefit to me . How does it work. Can you correlate it to another investment . Sure, as you mepyou mentione linked to the under lying cash flow. His current and future playing contracts and his post career, should he become a talkshow host that is linked to the security. If i think of another investment similar we intend to pay out dividends as we collect the cash flow from his brand. So it would besome l similar to. But importantly, we also see that with that return to capital there is still the option of what his post career may be. Not doenl dut it have a dividend component but what outcomes happen with the brand. How risky is this . It is one of the risk ares that we disclose. As long as his brand continues to generate catch flow that will be available in creating value for the security. How do you aexpand the business . Can you imagine people discovering musicians or actors . Is the intension to broad kenneth . As well as you mentioned to enter the entertainment sector as well. The trade on your exchange right . It is not like i can buy them anywhere. I would assume you have a pipeline here. That is correct. The shares trade on fantex. Com. And our next athlete that we filed that we registered to file the Registration Statement with the sec is ej manuel the starting quarterback for the buffalo bills. I guess you would love that to be the case. How do you make money from this. Where is the money coming from . It makes its income through the athlete actually generating greater brand income. We have acquired the future cash flow stream. Well make more off of the brand as well. At the end of the day the interests are aligned. You know one step at a time. Our goal is to help build the brands of the athletes we work with. If we do that, then Everything Else takes care of itself. It sounds like we need a new team of security analysts here. We would welcome that. Good luck to you. Thank you. Maybe we should ipo you, david. No, that is not good. Sell sell sell. No, he wouldnt. Coming up on the program. While preventative like Michael Koors and kate spade see changes. Well tell you how you can add a new high end watch to your wardrobe every single month. Were back after this break. E c. The conditions in new york state are great for business. New york is ranked 2 in the nation for new private sector job creation. And now its even better because theyve introduced startup new york dozens of taxfree zones where businesses pay no taxes for ten years. Youll get a warm welcome in the new new york. See if your business qualifies at startupny. Com [ banker ] sydney needed some Financial Guidance so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. Make a my financial priorities appointment today. That corporate trial by fire when every slacker gets his due. And yet, theres someone around the office who hasnt had a Performance Review in a while. Someone whose poor performance is slowing down the entire organization. Im looking at you phone company dsl. Check your speed. See how fast your internet can be. Switch now and add voice and tv for 34. 90. Comcast business built for business. Maybe half of the s p reported earnings, retailers are waiting in the wings. Coach is one of the first to report. Many are looking past this quarter and to the fall. That is not a style reference. Some of it could be because of style. The higher end hold iing up better. Before the bell tomorrow and while wall streets expectations have deteriorated, it works to upgrade its stores. Now all of this is going to take some time an ticipating growth n the fall for the brand. Weather in the winter hurt coachs Third Quarter. 70 of north american sales came from outlets. Bigger problem is the cool fact factor. Rivals are packing at its leadership. Morgan stanley says that Michael Koors is the top brand. Stephanie link notes that coach shares traded at discount. Coach is going to report those Third Quarter earnings before the bell. Karl . Big number thanks court. Is that rolex rented . Shaking up the watch industry here on the floor is our own robert frank. You could call them the rental rips. Now 11 james is launching what you could call a timepeace timeshare. How does it work . Very simple. It is an annual membership progr program. You say how many watches i would like to enjoy, three or six different watches per year for a fraction of buying one. Were talking anywhere from 2700 per year to up to 17,000 a year, again, to time share these watches, depending on the value, right . That is correct. To give you context at 17,000, youre wearing six different 50,000 watches per year. A quarter Million Dollars of watches for 17,000. That has to be a couple hundr hundred thousand dollars of watches here. This is a nice display of watches. Is this for people who cant afford a nice watch but want to wear one to impress people or Something Different . Absolutely not. Having worked at different markets, there were many who couldnt get enough velocity and tradiing and having more watche. There must be a way to have that a low frequency trade where they can enjoy many more watches per year without dealing with hassles of ownership but a myriad of benefits from concierge of a club or community. What if you fall in love with one . Can you buy them . Its try before you buy. Members are always calling us up and saying, hey, i really dont know if i can send this one back, how much. Were very happy to sell it to you. I would imagine the luxury watch companies are not so happy about this, the rolexes of the world, what have they said to you . Were ultimately partnering with all the brands. As we have thousands of members telling us what they own and like and dont like thats user data that doesnt exist in this industry that will make everyone sma smarter. Were working now with some more forward thinking and others i know we will be friends most poplar brand . Obviously rolex is always poplar. The notion of discovery of wearing one you never wore before with a hurdle of only two months at a time, people are stepping out and obviously loving it. Thank you. Thanks so much. Still ahead, on the show. The bank backing the biggest startup, lineups include busby and twitter. We have the ceo of the Silicon Valley bank. Alright, that should just about do it. Excuse me, what are you doing . Uh, well we are fine tuning these small cells that improve coverage, capacity and quality of the network. It means youll be able t post from the breakroom. Great did it hurt . When you fell from heaven awkward laugh . A little. laughs im sorry, i have to go. At t is building you a better network. Have been there for america. Fannhelping millions realize their dreams of homeownership. And when fannie mae and freddie mac needed help, america was there for them. Today, fannie mae and freddie mac celebrate payment in full to taxpayers. Together, weve created one of the greatest comebacks in our nations history. So, lets preserve and strengthen fannie mae and freddie mac. Because without them there really could be no place like home. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Today is monday today, we greet you. Treat you. Care for you. Today, you can come to Cleveland Clinic for anything, everything or just to get that thing checked out. Big, small, and yes, the best heart care in the nation. Its here everyday, for everyone. Thats the power the power, thats the power of today. Cleveland clinic. Call today, for an appointment today. Welcome back to squawk o the street. Check out Pepco Holdings a Utility Company and spiking after reviews with an advisor. Interesting you have a Utility Company that serves customers from new jersey to d. C. Lets note the dow is off 115. We are off our highs. We lost 140 on friday in part because of visa. One of the reasons we are down so heavily and interesting to see aping heading towards 600. You mentioned visa. An important fact when you look at these American Companies and impact theyre having from russia and ukraine. The new round of sanctions announced today doesnt seem to be spooking the markets. Part of that selloff was attributed to that. And putin may be driving them out how they operate there. Interesting reaction. You mentioned high flyers. Nasdaq may be positive but having to do it without amazons and others. Amazon is the fourth worst component of the nasdaq 100. Weve not seen leadership return to high flying names the way we hoped. We will see earnings next week, twitter, priceline, amazon, investors werent impressed with that stock, wonder if the clock is running out on jeff bezos, not chunk out the kind of profits they want to see. A big week of the Federal Reserve economic data. Friday, the report, of course. Exciting week. Looks like were starting out with a bang. See you later. If youre just joining us this morning, heres what you missed. Welcome to squawk on the stree street. Heres what happened so far. Pfizer is very pro share holder and what keeps their stock up. If you acquire, take advantage of some of the cashew have overseas shareholders like it. I dont know about bargains. There are important acquisitions you can do if theyre strategic and what the definition of strategic means is they fit. Were looking for a very good q2 for gorilla and think it will carry into q3 and q4 also. Good monday morning, 11 00 a. M. Downtown and 8 00 a. M. Out west. A strong week for apple continues. The bank backing the bay areas biggest startups join us buzzfeed, twitter and we have an exclusive with the ceo of Silicon Valley bank. Speaking of content, are we living in a content bubble. Another giant unveils microsoft, the movie studio. Lance, good to have you back on set. Thanks. After a week long absence, jo jon fortt is back. Good to be back. Welcome home. Starting on an upbeat note, all the major indices. Apple, microsoft, yahoo making moves to the upside. Watching apple trading at levels not seen since december of 2012. Several Internet Companies moving in the opposite direction with high multiples, netflix, am s zon and amazon and linked in among the losers. The argument made again in the times some of these companies that dont show a profit yet are beginning to see investors lose interest and patience. We talked about this before saw momentum move away from big stocks on the hopes we see macro growth and maybe some companies would do well. My queasy feeling was about what if they dont project good earnings, good results when they release guidance. Actually, it seems like they have for the most part. You look at apple, what they did, some other companies, google, et cetera. Seems like that comfort for the big techs came back as we saw those results come in and now were just watching the macro. We feel pretty good about that, i think. Lance, when you think about content companies, thats one of the big trends over the last several months. It seems like these bets have not been tried and true so far. Theres so much money being plugged into there and no real Proven Results yet. The content area is the wild we west. Every Company Building studios out west and l. A. Because they know theres a huge opportunity no matter what people think theres a big shift in viewership people watching content stream through these devices, fire tv, xbox 360, whatever they cannot using cable really defining their own programming schedule and consuming the content by anybody who will deliver, including netflix, they deliver house of cards and not only does well but wins an emmy and i think propelled subscription growth on the netflix side. This is a good bet and the future of content whoever can get it and create the best stuff. I think talent is a pretty scarce resource. All these different players cant have a hit. Content is expensive. You put the money up front and pay the people, they will flop and then what do they do . Look, you look at i think theres a big question mark for youtube struggling to try and rebrand itself as a content destination. Dont have goto shows like that, they have sporadic viewers. There are question marks. I think there is a voracious appetite for good content and people will flock to it. Do you think do you buy the argument bay sos is running out of time in terms of his World Domination quest at all costs . No, i dont. I really still think what i see and what they deliver, i spent so much time with fire tv their new device and it really works. Theyre selling the products just to cover the margins and then make money after the fact. I know theres not enough profits going out there and people getting frustrated. I actually believe bezos has a good vision. Amazon and alpha house havent been as confident at the same level. Netflix started out they didnt have hits at the beginning. While you may be right this is a market that can turn on a dime. I think investors want to be patient and be sure theyre putting their money into a company that makes real things and has proven growth and profits. Thats where you go in a jittery market. You look at amazons stock performance, one of the worst this year, down 27 and a lot of companies in that boat as well. Whats the patience factor for investors . I dont know what the patient factor is. An inconvenient time period for this year. Looking over two years, still doing okay. You looked an a link ed in and n netflix, there is a lot of difficult work valuing those companies. To some extent you have to value them compared to other companies that could see growth. Now, you have this new component of ipos coming out and that might shift how people look at these companies and you have apple upping its split and dividend, if youre looking for optio options, you have them. Linkedin is a mess today. There is a school of thought even if they werent going to post a profit before, maybe its time to start giving investors a penny here and penny there say i ing, hey, were doing something with our margins. So many of these Companies Work funneling money back into the business. Linkedin has tried to change itself, not just about networking, content everyday. Everyday i get an email showing me stuff they want me to read and to drive you back to the site. In order to do that it costs money. I think they figure giving a little bit is not going to satisfy people enough but link to potential growth is. Im worried about that. And i gave it to him for free, which is a good cost basis. Thats what they want. Im still thinking of linking bad, the house of links. Trouble for another game maker, maker of the angry bird hit game profit falling 50 . They call 2013 a building year moving into premium games, movies and animation though rovios licensing of the game generated nearly 50 in revenue. I keep thinking of candy crush and digital here. We know its hard to have more than one big hit. Theyre trying to do brand extensions. I was this morning playing star wars 2 again, really great engaging game. The mobile gaming public in particular moves on fast. It is what is the fad of the moment. Dont think about other gaming, about the mobile stuff. My worry is all the stuff theyre investing in, putting in a lot, they have theme parks. If they have drops like this how will they fund it . What if nobody goes . Im taking the other side. I dont think this is a problem. They have been disciplined and patient and have chartses unlike king. They licensed the revenue streams. They were late to the move with freeium. And maybe some dont have that same growth. I think their partnership with star wars is so important and so powerful. I have no idea, totally making this up, disney could buy them, too, because basically, its another star wars has a vested interest in rovio doing well, one of the best inventions. My 5yearold knows about it. You think about the whole confag around flappy bird, this got too big, i will go ahead and shut it down. If you have a big hit like this, do you quit while ahead or sell to a bigger player. I certainly hope not. Milton bradley was out there, the old school created one game after another decade upon decade. These companies can do it. It is hard. They have to throw more at the wall. If youre tied too much to one brand thats a problem. The choice is now versus what there was when monopoly started, its a different universe. It absolutely is. They could go the route of buying tiny game developer companies that have excitement to build an old coral. Thats a question like zynga faces, how much is organic and how much do you build on . Absolutely. I love the fact rovio have done the licensing route and done the flush toys. My 5yearold never played the game or seen star wars but knows the game. Royalties for 5 yearolds in this market lance, great seeing you. Coming up, hes the ceo of Silicon Valley bank backing names like square, where red becker sees the next tech investment and the bubble, that interview coming up next. Financial noise financial noise financial noise dow up 118. Look at health care being led by deal news. Dominic at headquarters. Its being led by pfizer news that made 100 billion bid for britains a stra zeneca and cardinal health. A good day overall for Health Care Stocks and not just one industry pushing them higher. Thanks a lot. We mentioned microsoft and the tech giant is giving us a sneak peek into original tv programming. Morgan is giving us an inside look. Thats right. Microsoft is taking on netflix and amazon and hulu with original premium content. Its xboxes will roll out the first of those offerings in june starting with a street soccer documentary and live stream of the Music Festival and has 12 in the works including the hotly anticipated halo series, produced by Steven Spielberg and expected to go into production this fall. Xbox studio, nancy kellan who came from cnbc said theyre producing dramas to sporting events specifically targeting millennial males. There are a lot of gamers used to interacting with the content itself. What were doing is creating high quality premium content, certainly our goal and then hoping we also can take advantage of the tech we already hav have. Theyre exploring revenue aven avenues and it already has 48 million subscriptions. The hope is this translates into more xbox sales. The company hasnt released Sales Numbers for xbox 1 but 5 Million Units have been shipped for resale. Sony and playstation have already sold 7 Million Units. Sales of microsoft trading up over 2 partly on this news. Ill take it from there, morgan, obviously a Big Development from microsoft. From old tech to new, our next guest has worked banking for Many Companies in the tech sector, think of groupon. And what we can expect domestically and abroad. Greg becker is ceo of Silicon Valley bank. Thanks for joining us this morning. Great. Great to see you. You guys have an Innovation Survey outer this morning and shows pervasive optimism in the u. S. And abroad. What do you think is causing that right now . Kayla, the first point is entrepreneurs Startup Companies tend to be optimistic in general and you tend to look at trend lines. Weve been doing it five years and this is the most optimistic theyve been in the coming years. Last year they delivered results incredibly song and roughly twothirds met or exceeded their numbers and more optimistic about 2014. We think this is a great sign. Nasdaq down 2 this year and we often debate how closely Silicon Valley watches the stock market but does have an effect of valuation and compensation. What do you see your clients saying about the market and what that does to their overall intellectual structure . Sure. Again, given theyre incredibly optimistic about the numbers and what theyre delivering, theyre feeling good about it. They dont look as much about the stock market, what its doing today. Theyre looking at Revenue Growth and outlook. The theres more going on in this industry than there ever has been. Ive been at the bank 21 years and a great feeling to see what theyre delivering. Im optimistic and theyre optimistic about the outlook. I recall in 1999 there was a lot of optimism, too. We dont have survey numbers. What does optimism tell us other than the fact people have high expectations. Does that impact whether things will go well or not . A great question. You look back at 99 and 2,000, they were optimistic as well. Heres the difference, theyre delivering revenue and profits in more cases than historically. Its really about delivering the results. Theyre optimistic and delivering results which is why again theyre feeling really good about it and so are we. We talked to Carey Swisher last week about the valuations in sill gone v Silicon Valley. Her point was they will invest like crazy until there is a crash and its always been like that. I wonder if that metric is reliable when you consider that world view common place out there. Yeah. Carl, one question, you look at the Different Companies and what theyre doing. Let me give you examples of disruption we havent seen before. Look at Companies Like uber disrupting the black car and taxi service and square helping more merchants than ever driving new Revenue Sources by accepting credit cards, small Small Businesses and Companies Like erabyian been taking on the hotel chains. You have to look at the actual results and level of disruption occurring in the market with these new business models. Its optimism for good region. Thats what mobile has brought to the party you couldnt have done before you could put the device in your pocket . Mobile is a big driver and cloud. You can look at personalized medicine and security. Not just one industry doing well. Its really broadbased. Thats great to see. As optimistic as the Companies May be, they do say their access to capital is the number one challenge right now. A quarter of them are choosing to raise debt. What does that tell you about the willingness of investors to put money in some of these companies and the need to get paid back sooner rather than if they were to put an Equity Investment in . For the most part, looking at equity, last year was a really strong year. The First Quarter was one of the highest years for quarter investment since 2000. There are plenty of sources for capitals, entrepreneurs and startups, one of the chief complaints is access to capital. Thats not a surprise. What we like to see is how broadbased the Capital Formation is. Venture capital, broadbased investing and more coming into it and theres always a challenge. Is there ever enough . Probably enough. I think it should be that way. Sta scarce capital is probably good for the industry. I know the documents for this wont be public but theres been some speculation maybe the company is burning cash too quickly, can you give us speculation as a lender about their Liquidity Position and where that money will go . We dont talk specifically about a company, whether dropbox or square have lots of cash, great business model. Were optimistic. We do great underwriting to make sure were not taking undue risks and look over the long term. We feel good about the underwriting were doing with these businesses and their outlook. Greg, thank you. We had to ask, of course and appreciate you joining. If the market is as optimistic as you say it is, hopefully we will have a lot more deals to come. When we come back, 100 billion blockbuster why buying seneca makes sense for pfizer. And all day tomorrow we will be unveiling our list of the most influential rebels and icons and leaders the past 25 years. Youre watching squawk on the street. Well be right back. [ banker ] sydney needed some Financial Guidance so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. Welcome back to squawk on the street. Bridging a gap between Cloud Services and customers by launching a cloud marketplace. Ibm is hoping it will increase sales and up off their session highs. Back to you. Shares of astrazeneca surging after pfizer did confirm it is pushing for that 100 billion deal after two previous bids were rejected. Managing director of pharma, seamus, nice to talk to you. Thanks for having me on. Do you see this as a pipeline story or Something Else . Frankly, a little bit of everything. What you see here is an opportunity for pfizer to use international cash. They have greater freedom to return cash to shareholders if they can actually move the compa companys base of operations to the uk although they will still maintain their u. S. Base. Strategically it comes down to the pipeline, when you look at the company on the back end. If this were to occur because its obviously not been accepted bias stra zy astrazeneca and wo pipeline story thats stra zeneca has and a complementary pipeline by pfizer. If it is so great why has the street not been more positive on it over time. Fortunately, we were constructive on astra zzeneca a upgraded the stock this year in large part because of the pipeline. One of the things that can get missed is aspects of an early pipeline. The opportunities and pace at which astrazeneca has moved forward, several of its oncology aspects has been one thing. It can be masked, a good pipeline heavily masked by declining earnings when you have blockbuster busts off the patents and has potential value sitting underneath in the pipeline of astrazeneca. Seamus in the news this puts astrazeneca in play there have been other rumors by others to buy the company, do you see any competing against pfizer or pfizer the only company big enough to take this on . The way i look at it, lets consider the companies that would offer the best strategic overlap. That pfizer can pay for and can anybody else realize the same kind of benefits in a combination. Its pretty hard for me to envision a company that would benefit to the same degree pfizer would and that would create an entity that strategically you could end up with three very strong companies, as pfizer is restructuring itself today. When you look at the combination, the three companies that would come out on the back end of a combination between pfizer and astrazeneca would be quite compelling, i think, in our view. Finally, seamus, if astrazeneca is not interested where is the point pfizer is in danger of overpaying . Thats a hard number to put out there. Frankly, the way that weve done our analysis and have published, at 110 billion, if thats what pfizer were to pay for astrazeneca, and if they were to split that as a 50 50 cash equity outlay, the deal would still be niecely ecretive. The magnitude of energies could be quite substantial from the two companies. Its hard to put a specific point on that. There are obviously limitations. It sounds like pfizer is going to be disciplined with regard to the risk of overpay iing significantly. Incredible whats happened in your space over a short period of time. Seamus, thanks for your time today. Thanks. Great being on. Kara swisher for who just got fired for the latest controversy in the valley and now hes blaming her. Up next. There are just a few minutes left on the trading day. More on the close on jeff immelt trying to close a deal in europe and how that affects the u. S. Market at this point losing steam. All that and back in two. R insu . You see the thing is geico, well, could help them save on boat insurance too. Hey okay. Im ready to come in now. Hello . Im trying my best. Seriously, im. Im serious. Request to come ashore. Geico. Saving people money on more than just car insurance. Market coming up. Doing very well. It has basically outweighed the fizz. The fizz has outweighed where we are. Lets get straight to it and have a look where we are an ast astrazenecas shares. Pfizer is ex closeing 100 billion in january and a premium where they were trading and since then theyre coming back to do a deal. Citi reckons it will be 49 pounds, a 5 premium from where we are now. As we await pfizers move. It is at a five year high. That big money will go into sterling and push the uk pound higher actually doing very well because of the growth we have in the uk. The german industrial giant, chemical giant is trading higher partly on results it can spinoff clear plastic unit and generate maybe 10 billion. We had an interview 1 4 twith to and wouldnt comment on that and said this frenzy is driven largely by politicians trying to clamp down on costs and force ing ceos hands. Five of our companies in general are concerned about the prices governments are willing to pay for our innovative drugs. Also in certain countries and situations of patent rights. This pressure of patent protection makes it harder and harder for pharmaceutical companies to significantly invest in r d with a reasonable return on investment. Finally, General Electric and Jeffrey Immelt the ceo of ge said he had friendly and productive talks with the french Prime Minister in maris. And siemens with a swap with its arch rival, one to focus on energy, and creates an industrial giant. Europeans love the idea of creating national champions. Jeffrey immelt has his work cut out for him. For a long time ge had a partnership with the french government in engines and already has a card to play on. It will be the sales job of a lifetime. Thanks. Rico is record iing radiumo has been fired directly related to his conviction for domestic vitamin vils. Kara, you call the story strange and dramatic. Walk us through it. He is a very high profile person and sold the company to yahoo many years ago for 300 million and cuts a swath of Colorful People in terms of being out there, blogged a lot, read books, gives inspirational quotes on the web. There was an incident at his apartment with a girlfriend, and the San Francisco Police Charged him with five felony counts of domestic battery and Domestic Violence and battery. There was a videotape apparen y apparently. It got thrown out because of the way it was taken and it got thrown out and pleaded guilty to two counts of misdemeanor violence and battery. It escalated from there and the board finally removed him from his job. He did not agree to step down. What strikes me, one of the many things about this, his story doesnt completely add up. Hes upset with you. Yeah. He says the tape in his apartment, which was his security tape, which was inadmissible apparently because of the way the Police Seized it. Yes. He says it shows the Police Actually roughing him up Nothing Happened with his girlfriend even though she was helping him stay there even though she called 911. Does his argument in any way make sense at all possible from your privilege the police didnt go too far here . I have no idea. I cant say. This happens in lots of cases the Police Say One thing and the person charged says another. I havent seen the tape. We simply recorded there was a tape, this is what he said and what they said. Im not clear why hes blaming me for his firing. Hes been i hate to use the term lashing out, thats what hes doing on twitter and also on his blog to lots of people, not just me. He called the d. A. A pack of wild dogs, blamed a board member for throwing him under the bus, blamed bloggers, blamed pretty much a lot of people for what happened to him. Kara, you suggested he could take some of that anger and funnel it into real moves of the company. As chairman and ceo, he still owns a lot of stock. I dont think hes still on the board, not ceo. The Company Fired him yesterday. Right right. But in that role, he did acquire a lot of stock from the company. The email on the board he cites is they were aiming for an idea when you suggested he pose that he could use some of that stake. I didnt write that. Im not lecturing him. We write news stories. One of the things important for us. We didnt write about it saturday which is odd that he blame mess for the firing. We wrote about the debate whether to fire him or not and for some reason he thinks they were well into firing him and were going to do it by the next morning. I dont lecture people or pontificate, we do reporting. I didnt tell the board to do this. Hes saying that. Whatever. One of the other things about this, there are a lot of control companies these days, or Companies One particular person, maybe two, mark zuckerberg, larry page have voting control. Is there a danger here illustrated by a case like this, here is a guy who had a lot of success, had a lot of influence over this company. If this company had already gone public and if he had voting control, what would the recourse be for investors if they all of a sudden decided they didnt agree with his ethics . Im not sure he would have had control in a public setting. Sometimes that changes. He didnt have control, they fired him. Maybe he will legally challenge that. The board is in charge at a company. Certainly, founders can have control of that board, but in this case, i guess they didnt. They feel like theyre on good solid legal ground. I think it was a very complex firing, im guessing. He founded it and funded it. The official Angel Investor and obviously his efforts created the company. But, you know, the board ultimately is in charge and they asserted themselves in this case for a lot of reasons. It took a while because its so complicated, i think. As you say in your post, kara, more to come obviously. Obviously. Thanks for doing this over the phone. No problem. Kara swisher joining us from rico. We are a minor investment in rico and have a sharing partnership. In buybacks, causing big moves in tech. Watching apple in particular and what the technicals are telling us. That up next with an expert on squawk on the street. In todays market, a lot can happen in a second. 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Stop taking viagra and call your doctor right away if you experience a sudden decrease or loss in vision or hearing. This is the age of taking action. Viagra. Talk to you doctor. The top of the hour, the sell in may in full swing and tony is here to tell you why its all wrong. Hes buying aggressively. What will the impact be if more Companies Start to flee the u. S. For tax savings. Bank of america syncing today and investors buying on the news, who and why straight ahead. We will see you in about 15. Thanks. We will talk about the markets especially technicals. We have martin to give us a short tutorial. The levels are coming down. I know youve been watching and think the support is at there. Where do you think we go in the next three to five days as we wrap up april . We are starting to see increasing signs of the pris confirming what was said last spring. You see a little bit more sign of the indices starting to peek out, unless lows are taken out in the nasdaq and indices, the trend is very much intact. Its premature to make this head and shoulders pattern. You look at a lot of the cues used for the nasdaq 100, the cue is really 8315. Were still 2 1 2 to 3 above those levels. If we were to come down and break these levels, that would be a much bigger concern. Right now, things like sector rotation continues to see things stabilize and for right now the indices is very much intact. One responsible company for the q moves is apple. They got good news for the tech stock. We have it at 87 and how much more can it move and what impact can that have on the qs . It got above 549. My thinking is it gets up near 587 in the near term, probably the max near the prior highs which isnt shown in this chart which would be really up near levels we saw last year. You have to go far to find that, though. Bottom line, heres a chart of the qs and puts everything in privilege. A lot of people have been concentrating on head and shoulders patterns. The trend line is intact and is near 78. Until thats broken there is no need to jump the gun and think the market will have a bigger selloff. If anything a large number of investors coming out publicly saying the market is starting to pe peak out and its rare people get it right at extremes that the market is peaking out. If anything, momentum is a concern, it is starting to fall. Fewer stocks hitting new highs, but premature to think it until these trend lines are broken. And 90 down side, what sort of extrapolations can you find in the market and what are technicals saying about decoupling from big tech and stable tech and high flying momentum names you see a lot of deterioration in high flying momentum names. You look at priceline, amazon, netflix, facebook even started to show signs it has not bottomed just yet. Many of these are right near support, if anything, look at the broader indices, Technology Related sector but not talking about apple dominant, related to the s p, its been moving down the last two months and if anything down to levels of support i think are buyable for technology. I think it is premature. This is probably a better gauge to look at, xl and qs. And Morgan Stanleys tech for those not familiar with this index, what sort of components does it have . It has a lot of common components, just theyre equal weighted dollarwise and not heavily influenced by microsoft and at t and apple. You want to see something broadbased if youre looking to make conclusions. The trends intact is not a head and shoulders pattern. You look at the Technology Sector versus s p, you can look at other charts in a moment that show that. You will see equally the same conclusion, the fact these sectors are very much intact. This is a chart of tech versus s p. We pulled back the last few months and people are starting to get afraid of tech and right down where it has levels of importance and my thinking is they have stabilized and we can buy tech. Some people are saying buy financials and dont touch tech if you dont have a thesis if you dont think you know where its going. The sector broke out last july. Here is a long term view, almost a two year down turn in tech, it broke out and recently pulled back a little bit. These areas are important. Financials are hitting new lows in relatively terms, a concern, industrials are acting much better, industrials, energy are definitely areas to favor and technology is a good bottom picking sector to take a look at and over the next month, i think we will get a bounce in tech. All right. Mark newton, we appreciate it and we will see how these technical ends hold up. Back to you. Want go to an exercise class but dont want to move the house . Our next squawk break through is for you. Telecommuting your workout. Just a minute. Minute. Ras smari can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Voted best Investment Services company. That corporate trial by fire when every slacker gets his due. And yet, theres someone around the office who hasnt had a Performance Review in a while. Someone whose poor performance is slowing down the entire organization. Im looking at you phone company dsl. Check your speed. See how fast your internet can be. Switch now and add voice and tv for 34. 90. Comcast business built for business. Welcome back to squawk on the street. Multiple sources are reporting fellow American Realty Capital Properties is in talks to acquire north star for 6. 2 billion for 20 bucks a share, north star up 20 bucks on the day. As for American Realty, its trading a little off today down a half a percent. These deals are coming you c over it. Very technology emer siv experience like an apple product but we also deliver the content to you. Youre saying theres nowhere to hide, basically. If youre not doing a good job they will know. You obviously cant use any bike to do this. How much will one of these specialized bikes run you . Just under 2,000. Like carl said we dont make much money on the hardware. The business is 39 a month for you and your household to take unlimited classes. You can take it live. If you wake up at 6 15 and want to do a fantastic dripping wet boutique spin and workout, you can get on your bike any time and have that experience. How big is the market for that. Thats a lot of money to lay out at first and then you have the subscription after. There are boutiques and people get outside and enjoy people doing that. Whos the demographic youre targ targeting . Sure. Im a big outdoor cyclist myself. If you have four hours on a saturday morning go up to gw bridge, i encourage people to do that. If you have the money to take the class at a cycling studio, get out of the house. We built peloton for the person who wakes up at 6 30 in the morning and needs to get in a workout. For the convenience factor we can do it for you. There are 1. 6 million stationary bikes every year. Thats the Addressable Market although when steve jobs launched the iphone he didnt say the Smartphone Market was what he was going after, going after something much bigger. Funding has been led by tiger, so you have big people behind you. Is there something about racing in a room next to a room full of strangers in some cases that is even more motivating than anything at home. There certainly is. Were not trying to take away the effect of being in a room with people or on the road. However there is no bike in the household that has content that comes with it. People dont always have the time. What weve done, we created this incredible menu of content. Power rides for 30 minutes you can jump on. You still have the time to get out, now, opposed to having that exercise bike sitting in your basement collecting dust we have an active participant in your household, you want to get on that bike, squeeze in your workout and go on with your day and tomorrow maybe you go to your studio. Do you ever have a studio of your own to complement, bring customers in . We do. We have our flagship studio on 53rd street and chelsea. That is a community where we have participants who now actually communicate with participants at home. Through facebook and twitter, they have all been getting to know each other in a different way. Very interesting. You can spend 30 minutes getting out the door. I see your point. Exactly. We will watch you guys, thanks for coming in. P peloton. When we come back, what are thousands of copies of an et video game doing in the middle of the desert . As cnbc celebrates 25 years on the air, all day tomorrow were unveiling our list of the most influential rebels and icons the past 25 years. Years. At your ford dealer think . They think about tires. And what theyve been through lately. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit card at the big tire event. See what the ford experts think about your tires. At your ford dealer. [ male announcer ] when fixed income experts. Work with equity experts. Who work with regional experts. Who work with Portfolio Management experts, thats when expertise happens. Mfs. Because there is no expertise without collaboration. Mfs. Theyre the days to take care of business. When possibilities become reality. With centurylink as your trusted partner, our visionary Cloud Infrastructure and Global Broadband network free you to focus on what matters. With Custom Communications solutions and responsive, dedicated support, we constantly evolve to meet your needs. Every day of the week. Centurylink® your link to whats next. From your first move in the morning to your late day market maneuvers, strategy and insight from the best in the business, join Brian Sullivan for talking numbers powered by cnbc and exclusively on yahoo . Com, sponsored by Charles Schwab. One of the biggest urban legends in video game history revealed workers for a documentary film company uncovered copies of et for the atari 600 very deep in the des earthed in new mexico. Back in the 80s, they rushed a game of et trying to cash in on the movie. It was flop and rumor was it dumped 700 copies in the middle of the desert and that legend existed until now. And xbox is called atari game over. This is fascinating. Is this what it is . I think i remember this game. It was so bad. You had a silhouette of e. T. Running around and it was so bad. This should be a cautionary warning to the market. There are flashes and pans when it comes to trends. They tried to chase the movie with this game. It was bad and buried in the desert. Obviously not biodegradable whatsoever 30 years later. Video game flops live on or die on. When you cant even give them away, where you literally have to bury them in the earth, that says something. Some of those games were bad. Pong was a hit. If you couldnt match that you deserved to be buried in the back of the desert. Good to have you back, jon, especially on the busy week on tech and earnings. We will send to it hix to geadq to get to halftime. Scott is back. Welcome to halftime. Sell in may, just three days left. What will it mean for your money. Away pfizers offer for astrazeneca has to do with uncle sam and why potential billions of dollars on the line. We look at the man who made activism and art. Lets look at the starting lineup. Pete, josh, steph and joe on the desk today and tony dwyer is here for the conversation as well. We