Transcripts For CNBC Squawk On The Street 20150507

German bund got to nearly 80 basis points. Oil relatively flat. The tenyear hit 2. 30. The rising vix, some of these yields went bananas around 6 00 a. M. Eastern. Because of the percentages and how low they are in germany, you have a little change in germany, its a dramatic rate increases. People are losing fortunes. Now its 2 trillion in two weeks. When people say why are some of our stocks down look at the pain. People believe negative rates would get more negative even though there certainly was this risk. Yes. That was just dead wrong. We are seeing one of the things i think is just shocking to me is this dollar. The consensus was the dollar was in parity all these things you heard. Dollar you better get to europe quickly. Im booking that amalfi coast trip now we ought to hear about alibaba. They turned the s p futures. Lets do that. Alibaba shares are up in the premarket after the companys earnings did beat expectations. Also the Company Announcing its current chief operating officer will become ceo in a few days from now. Nixon joining us from hong kong is daniel zhang. We had a chance to catch up back in november during singles day, which was something you came up with any number of years ago, mr. Zhang. Let me start off on the quarter itself. Specifically the mobile as your gross merchandise value, but the take rate therefore, overall, coming down for the company because people dont buy as many or read as many ads on their mobile device. Is that the trend that we can expect from alibaba into the future . No. We experience a solid mobile transition in the past year. You can see actually in the last quarter our mobile take away went down a little bit because of a slack season because of chinese new year. We recorded a quarter over quarter growth about 40 while now 50 , 51 of our revenue from mobile. We recorded 45 year over year gross. And today 40 of our revenue of our mobile only 12 of revenue from mobile. So we made substantial progress. We think we will still continue it in the coming quarters. Right. The transition to mobile will continue, i would assume. I guess the question is what do you see then as the ultimate take rate on the revenue on the gnv brought in given more and more of it will be coming from mobile . Today more and more consumers in china use mobile for online shopping. We continue to increase and we are confident that we can approach that on pc and even higher. There was a belief heading into your quarter that alibaba is cracking down on counterfeiting on the site may have depressed advertising and or overall gmv. Was that the case . We always have zero tolerance policy on counterfeit products and spend resources to fight counterfeit. Counterfeit is an issue to those companies doing similar business. We have extensive experiments against counterfeiting and we will continue to do so because this is not only benefit for the customers, but benefit for this platform. Daniel, theres been headlines this morning about a hiring freeze and comments about a wouldbe hiring freeze being taken out of context. What is the companys position on cost discipline when it comes to hiring folks . Well i think the comment on the pollhong kong policy in the new year is in the market. We will adopt a zero policy in the coming year. This is to improve opt rating efficiency like what we did three years ago. We did the same thing, we get a very productive results. Its jim cramer. When i look at whats going on in your country, i think that consumption domestically is very strong and getting stronger. We in this country think all thats happening in china is constant deceleration. Where do you see it because youve got a book of businesses worldwide. From our platform we can observe that consumer demand is huge. Today the new trend is that people like high quality foreign products from other countries. So thats why we start our Initiative One year ago. We will help the suppliers all over the world to sell their products through our platform to chinese consumers. Daniel are you seeing more competition in your home market in china, particularly from jd. Com . Competition always exists. What we think is we have to focus on i coughed. I thought maybe my cough was that competition question. That threw everybody off. It is still a long way to hong kong. We are trying to reestablish the connection. The 40 gmv number was above what had been anticipated. The stock has been coming down sharply in recent weeks because people thought it would be potentially weaker than it was. Mobile now as daniel said 51 . Daniel, we reestablished connection with you. Why dont you continue that answer. We lost you for a moment. When i asked you about competition. Go ahead. Okay. As i said competition always exists, but we dont we always think about competition. We think how to create value for our customers, for our merchants. If we continue providing value for the participants, we will continue our growth. What are you going to do differently as ceo than what was done by jonathan lu the person you will take over from . Well first of all i have to say that jonathan did a great job in the past two years as ceo. He lead the company a series of very successful mobile transition. Now they hand it over to me and i will continue to lead the team the Younger Generation, to lead the company to the next journey. I think the focus will be first we have to continue to operate our equal system and extend our equal system. Second we have to continue to pursuing the opportunity in new areas, in new businesses. Last one, most important thing is we have to develop our people, our young generations. Not only on the leadership level but also in all levels in the company. Thats the foundation that we can continue our growth in the future. Weve been joking its a good day for folks born after 1970. This is where they will command the troops. Can you explain this dynamic, at least in china among, for leaders born after 1970 like yourself . No, you cannot. We just lost connection once again. Thats what happens with satellites trying to work halfway across the world. End of the cultural rovell ugs. Revolution. I think he was born 1972. Jonathan lu is only 45. We are not talking about an old Leadership Team there to begin with. Its not the communist party causing it. Is the communist party disrupting our transmission . I think weve got daniel back yet again. You heard carls question. Feel free to answer. Alibaba has a commission we want to live for 112 years. That is a long journey. We need young generation to take over the leadership and lead the company to the next part p of the journey. Now is the right time for us to do this. We are in a good condition, good finance condition. That is the right time for us to upgrade. Not only upgrade our business but also upgrade our Business Team on the leadership. Daniel zhang, we appreciate you being with us. We apologize for the interruptions there in our transmission, but are glad to have had a chance to speak with you. Daniel zhang incoming ceo of alibaba after the Company Reported better than expected numbers that had the stock up sharply this morning. This stock was pronounced dead by technicians and people were shorting it thinking it had to be a tell and things were weaker. That was not the case. Again, youre talking about down from 100 points. 40 overall year over year growth in gmv is significant. Of course they do have china. Growth there you asked the question about consumption and they are benefitting from that. The key consideration has been as you move more and more people to mobile your take rate of the overall number goes down because its simply a more difficult to act on an ad. We know this from google. Yes. You go back over to trip advisor reported last night. They are working very well on mobile. Whats incredible to me you would judge this man, hes an operator. He is not trying to get the stouk stock up. I had time with him over there in november. This has been in the works some time. His taking over as ceo. Its not sudden or based on this latest quarter or anything like that. This seems to be what jack ma likes to do. Jack ma is chairman. Ive got joe tsai as executive vice chairman and jonathan lu. This guy running the business. As jack says in his letter i believe within five years by 2019 alibaba will become the First Company in the world to facilitate gmv over 1 trillion. Fiveyear plans are all the rage in china. A thousand orders. Boom. This is a remarkable company. 80 coming in this morning. Im getting a lot of different messages about turning the market around. Those who follow this particular part of commerce are heartened. This social segment taking it on the chin no longer. I dont know whether fed chief yellen will be happy with this. Its unclear. Shares of yahoo will be up. Yes. What is that word when you back out, the new alibaba . Minus. Minus something. Minus something. Looks like negative Interest Rates. If you own yahoo, you get your statement and it says youre down you have 1,000 shares youre down 2,000 . Minus 2,000. She may get a break there. Weve got more to get to this morning, including reaction from tesla. Keurig Green Mountain. Whole foods coceo walter robb will join us. Take another look at futures. We mentioned rising rates around the globe. Claims came in around 2. 65. Fourweek average is the lowest since november 2000. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade we looked for the best price and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Tesla shares falling despite better than expected quarterly results. The electric automaker ramping up spending on new products. Last night on the Conference Call elon musk says response to his new Battery Storage systems has been overwhelming. We have 2,500 requests from companies that want to distribute it and install the power pack. We cant even respond to them. We have to triage our response to those who want to be a distributor. Its like crazy off the hook. Crazy off the hook. All that said Morgan Stanley today says q1 cash burn was eyewatering. Musk makes the business exciting. He is entertaining as all getout. A lot of the conversation did go right to battery. If you go to the site talking about batteries being a worldwide phenomenon. Its an interesting thing thats going to come out. People are making this story into much more of a battery story. Now, most of the commentary i read, people said why is the stock down if everything was better than expected. Yes, everything was better than expected. It is because of the eyewatering cash firm its 550 million. The Morgan Stanley guy has an overweight on it. When you read that analysts say the Company Needs to raise money. Musk is saying by the Fourth Quarter theyll be fine. He is throwing cold water on it again. 400 basis point improvement margin. One of the funniest moments was when he said hope apple comes into this business we are not losing engineers to apple. We are taking engineers away from apple. Again, entertainment, but disquieting cash position says jpmorgan. 1 billion in outflow in the last two quarters is not necessarily what you get from ford motor. Your take in general is who knows . Cult status. Did anything make you think there is more ground to stand on here . Yes. Because i think that what would happen is they did raise a lot of capital, it would answer a lot of the objections to the bears. Theres two sorts of bears here. There are the bears who say his Balance Sheet cant sustain this and bears that say he is allege lid phony. I think the Balance Sheet issue will be controlling. They have demand for this car. There is demand. There is demand for this battery. People analyze the granularity, my friend going over the deposits. There are real issues here. If they were raise 1. 5 billion in this market if they did german bond offering, you would be hard pressed. They should issue a gigantic convertible bond. I know he is going to listen to me. Always. He listens very closely to you. I saw him at the vanity fair party. He was talking to tony romo about the big trade. Ing thats right. Well get cramers mad dash and count down to the opening bell in a moment. Stay tuned for our live interview with the coceo of whole foods walter robb. One more look at the premarket trying to recover after a wild morning in fixed income all around the world. Here at td ameritrade, they work hard. Wow, that was random. Random . No its all about understanding patterns like the mail guy at 3 12 every day or jerry, getting dumped every third tuesday. This happens every third tuesday. We have Pattern Recognition Technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. For all the confidence you need. Td ameritrade. You got this. At chase, we celebrate Small Businesses every day through programs like mission main street grants. Last years grant recipients are achieving amazing things. Carving a name for myself and creating local jobs. Creating more programs for these little bookworms. Bringing a taste of louisiana to the world. At chase, were proud to support our grant recipients and Small Businesses like yours. So you can take the next big step. Are. Time for cramers mad dash. Qorvo delivers a terrific quarter. This was the best semiconductor we have. They put it together and have Gross Margins going higher. They are intellectual power behind a lot of the cell phones, transmitters. What matters here qualcomm made you feel badly about cell phones. They should make you feel well. They are big sellers into china. Youre not allowed to say if you are a supplier to china. You cant say wow, we are doing well. They emphasize china on the Conference Call. When you see the kind of business they are doing, you start questioning whether this was the peak and whether you arent going to get another move in nxpi semiconductor, sky Work Solutions and qorvo. Selling into apple china is the key. Those are the two. Those are the best markets. I felt good. This was a great Conference Call. Typically you dont expect Gross Margins of this kind of product to go up. These two companies combined taking a lot of costs out. This had been the goto name for a lot of people. Obviously had a big run. Seasonably, this is when you are supposed to sell these stocks. That was playing out. This morning the script does not go with the negative thesis. All right. So many other stocks to get to this morning. Weve got the opening bell a live interview with whole foods coceo walter robb. Stay with us. My name is jamir dixon and im a locate and Mark Fieldman for pg e. I protect people. I protect our community. I protect our environment. 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And if me driving that truck means that somebody gets to go home safer, because now they know about 811, then ill drive it every day of the week. Together, were building a better california. The pursuit of healthier. It begins from the second were born. After all, healthier doesnt happen all by itself. It needs to be earned. Every day. Using wellness to keep away illness. And believing that a single life can be made better by millions of others. Healthier takes somebody who can power modern health care. By connecting every single part of it. For as the world keeps on searching for healthier. Were here to make healthier happen. Optum. Healthier is here. You are watching cnbc squawk on the street. Well get the opening bell in 90 seconds. Busy morning as we are watching a selloff in bonds all around the world. Then whole foods, well talk to coceo walter robb in a moment. Down 13 along with sprouts and a bunch of others. There is a phrase just really i think just frightened people. Comparable store sales averaged just 2. 5 . Thats up from 2. 4 during the last nine weeks of q 2. That is freaking people out. Second thing they announced a new concept. People said wait a second are things so bad you need to do a new concept now . When we speak with walter woo hell get a better sense, is there an overreaction here . I think people felt they had gotten back on their game and now they are off the game and there is so much competition. Comps in this space are maybe a little more volatile than other restaurant food type comps. We were used to this was Neiman Marcus nordstrom, they can charge what they want. But kroger beat them costco exgasoline. So people are concerned this is a defensive slowing and a change because of the competition. Well talk to walter robb in a moment. Opening bell s p at the top of your screen. Global Technology Subscription Council Holding its Investor Conference here today. At the nasdaq adapt immune therapeutics celebrating its ipo which happened yesterday. I guess well keep our eye on alibaba up 10 plus premarket. Some may be short covering. Expectations were not high going into the quarter, at least in terms of this reporting. The stock had come down sharply, as you can see right there it is up over 10 . 40 51 is from mobile. Take rate from mobile not that bad. According to those who follow the company. Though overall coming down as we pointed out, so generally a positive report. Dont forget weve got 1. 5 billion shares coming from this company next fall on the lockup. Its aways away. Those are things to keep in mind when thinking about baba. Transition to daniel zhang. That was not unexpected. Yahoo the best performer on the s p up 8 . Thats been going down in lock step. We hear in aol later this week. Yahoo is a havenot. We havent talked about our Broader Market in the bond markets. That seems to be dictating whats going on to a certain extent. Stocks coming off yellens comments yesterday. German bund 0. 75. It was 0. 5 a couple of weeks ago. They came in with guns blazing. People felt inflation is so low. If you are a fiduciary you have to buy bonds. Why didnt they buy the stock . You are not allowed to. There is an internet of yellen talking to draghi who says no when you do qe stocks are supposed to go up. Thats the general mood over there. You should yesterday everyone is entitled to their opinion, but shouldnt express their opinion when you are the fed. When she came out against biotech last july index was so incredibly low. She just 27. 50 and went to 3,0 3,032. Regeneron better than expected quarter. Its unclear she knew that was in the statement at the time. It was buy sell like the piece we saw on netflix sell to buy . Im being fascetious. We remember in 1996 fed chairman Alan Greenspan said irration yale exuberance. The issue here for me is if she thinks stocks are overvalued raise the margin rates. You can do that. Dont raise Interest Rates. We saw that 17 times between 2004 and 2008. Where did that get us . Be careful, madam chairman. Big piece in the Washington Post whether this is our irrational exuberance market. When greenspan made that speaks market was down. They shouldnt be making these calls. The market is overvalued. Warren buffett earlier this weekend gave you what you need to be talking about. She shouldnt its not as though whatever the motive is she is not going to stop bubbles. Its not going to remain in the equity market. I dont know what the point is. It would have been a great moment to say i defer to someone who has been one of the greatest investors of all time Warren Buffett. He sometimes talks about overvaluation but takes a longer term view. Im afraid people at home will go onto their ira and 401 k and say, ive got to sell everything. I dont think that will happen. I dont. Its certainly not helpful to the idea of how it may not be. Right now you probable write have all these macrohedge Fund Managers doing a lot more having more influence on the movement of many different things. Liesman did ask geithner whether he thought what was going through her mind . He said i cant speculate. Perhaps she was worried about whole foods after the quarter. Organic retailer with plans to launch a brandnew idea. Lowerpriced grocery chain geared more toward millennials. Joining us exclusively is whole foods coceo walter robb. How are you . Good morning to you. People are concerned about two things. They are concerned there is a slowdown in Comparable Store sales after we thought there was an acceleration. They are concerned maybe you have lost faith in the core whole foods concept. Neither necessarily seems to be true. That is what people are reacting to this morning with the stock. Can you tell us why that may be misinformed . I would say the comps definitely we lost momentum in the winter jim. If you look at some of it was selfinflicted with our cannibalization in big markets. You see 10 growth 11 Square Footage growth. You see 11 , you see 1,000 square foot on the sales. You see 40 new Stores Coming this year with a lot of momentum there. I think what you see is a marketplace thats evolving. Whole foods is evolving with it. We continue to think we have the right steps in place to grow the company with our price investments, our technology investments, our marketing investments, and we see an opportunity to grow this bigger market with the new, exciting format and brand. A lot of people feel somewhat defensive. I had irwin simon on for hain. He is talking about publix strikeouts coming in aggressively that whole foods must react and do something different. Maybe this is a defensive action. Its not defensive action. We see the same market everybody else does. This is where the customer is and we are trying to serve the customer, the Younger Generation continues to look for new choices. You see lots of new formats coming into the markets. We love our Whole Foods Market brand. We continue to invest in it and will continue to grow it in a very aggressive manner we like its future. We think the marketplace has gotten much larger by launching this second exciting brand and concept, it gives us to another growth vehicle for us to take whole foods into the future. Potentially, this opportunity could be as big as the Whole Foods Market opportunity. I was thinking listening to the call that we should be judging the company by Comparable Store sales. Im coming around to that. Your profitability is a mix. If you did turn it off, as john spoke, you could be able to make money forever. Are we looking at whole foods incorrectly through the wrong prism by judging the company by Comparable Store sales . Its one metric that makes a difference in terms of your progress in growth year over year. Yes. Look at the total growth. Look at the sales per square foot. They are double the industry average. Look at the Balance Sheet. Look at the strength in the violate of the new store openings in 40 a year. Theres lots more metrics to judge this company by as opposed to just comp store sales. Is this not an opportunity . That Balance Sheet, you can do both. Its clear you can grow the stores and buy back a lot more stock, and yes i should say three. Add this concept. This is a case where you should put your money where your mouth is . Absolutely. We have already a big authority, a place to be able to do that. I like your idea. Look, the marketplace is changing. Its evolving. Customers are asking for new things. The new generations are coming on. I think whole foods is saying we are going to evolve along with it. People, the market has tipped towards fresh healthy foods. This gives us a whole other opportunity to serve that growing marketplace and whole other growth vehicle for the company. I was reading it my store, i see a ton of millennials. Are the millennials turned off . I thought whole foods has got a tremendous millennial appeal. When i read the Conference Call i said maybe its just my whole foods and millennials are going elsewhere. This is complementary and coexisting with whole foods. We think customers sometimes will want this new streamline experience and customers will want the complete whole foods experience. These things will complement each other. Well be able to leverage the common structure. If you look at the market place today, there are new formats out there that have arrived that kind of serve that differently. I think this is an opportunity for us to stech our wings, to evolve a little bit as a company, to show what we can do as creative retailers and bring new options to customers that will complement and coexist with what we are doing right now. Its carl. There were reports mcdonalds is testing kale in southern california. I went to chipotle yesterday. Still cant get carnitas panera has a nono list. At what point does sourcing on a broad level become troublesome . Its competitive on share whats happening on the sell side is happening on the buy side. We are taking every step to have the supply we need for the next five years. That includes the kale. Warren buffett this weekend says he does not see smiles at whole food. He is a cheeswiz guy that loves that cherry coke. Are people not smiling at whole foods . Warren is one of the greatest investors of all time. I think he was having a little bit of fun. We are definitely appreciate his comments. They are fine. We are smiling over here. Its david faber. To come back to cannibalization as a strategy why is that a good one . You disrupt yourself or others disrupt you. I think our opportunities in chicago and florida in particular this last year, we have been opening a store every six weeks in chicago with the stores we picked up. There is no way to digest that without a shortterm hit to comps. If you look at total growth happening as a result of that is phenomenal. In florida weve been opening a store every six weeks. We are digesting that on the short term with comps, but we are creating tremendous market growth. Hence the total growth still in double digits for the company. The Square Footage growth still 11 . I think it makes sense where you have those sorts of opportunities to take those opportunities and grow the company. Thats exactly what weve been doing. Cannibalization, we identified on the call yesterday as having a 40 plus basis point impact on these comp numbers. It was more sequentially this quarter than the last three or four quarters. I think its a Good Business strategy when you have the opportunity to grow into it because our history shows us that within 12 months we pick that back up and go forward from there. I really do think that we put the investments in place that will help us to reaccelerate our growth. You teased us with this millennial story, talking about more excitement, more about technology. Is there really something new under the sun . Am i going to go geez i cant because im 60. If i were to reinvent myself and be young, would i go into this millennial store and be blown away by something . In the end youre selling food. In the end we are selling experience and the food. I dont want to overhype it. Weve been working on this close to a year now and thought how to do something more modern more streamline. We have technology infused at it from the core. I think youll be excited when you see what we reveal later this summer. I sure hope so. You are a gent to come on. You answer all our questions honestly. Walter robb cochair of whole foods. Great to see you. Thank you very much fellows. Great interview. Dow flat. Courtney reagan is on the floor. Looks like stocks in the early going are mirroring what we saw with futures earlier in the session before the bell opened. We bounced all sorts of around. Didnt move much on the jobless claims. We have the big jobs report tomorrow. Yellen making those comments yesterday about valuations. Thats really being felt around the world. If you see what happened in asian markets overnight, we saw the shanghai comp down nearly 3 . Hang seng and nikkei down 1 among some of the other indices. In europe mostly lower. Greece the one that is bucking the trend. Hanging on, sticking to its guns in the labor and pension issues. Uk lowering with polls indicating we might be looking at the hung parliament. Economic uncertainty in europe because of the weak data out of france and germany. The bund sharp move there. Biggest spike in over a decade. Weve got movers in oil, beer and retail. Lets look at whats going on here in big oil. We are getting earnings reports from a number of movers. Chesapeake Continental Resources and Sandridge Energy reporting quarterly results. Transocean nearly doubling eps estimates. Revenue beating two. Interesting moves. A big hit from currency. Also the revenues down 14 , but results did beat expectations. That stock moving higher. If you look at the whole retail sector, what analysts had said with that strong march with that earlier easter likely going to steal from april sales. That does look to be what we saw today. Particularly what costco and l brands are reporting their flat april comps. Kate spade earnings pretty good. Ann, potential buyout talks buy golden gate capital. Well see if that comes through there. We have to watch retail. Back to you guys over post nine. Thank you very much. Courtney reagan down at the floor. Breaking news on the nsa. Well go to eamon javers in washington. The federal Appeals Court ruled the nsa broad Data Collection on information about millions of americans phone calls is not authorized by section 215 of the patriot act. Making it illegal. Saying that section 215 of the patriot act simply doesnt authorize the program and the broad scope which the nsa applied it. This does not necessarily mean however, that the nsa is going to have to stop this program. This is a program that was due to expire. The legislative language, that is, next month. Congress has been wrestling whether to reauthorize section 215. The fate of the meta data Gathering Program has been a big debate in washington for years. Now very focused right now on whether or not this language will be authorized. The court saying the nsa does not have to stop gathering the data but congress ultimately will decide the fate of this program. Thank you so much. Get to the bond pits. Check in with Rick Santelli at the cme in chicago. What a morning. Obviously, around 4 15 eastern in the morning last night, the worlds economies and all the developed countries must have surged because rates surged. Look at 5s, 10s and bunds intraday. The timing of peak yields was within five minutes of each other. When you have the same policy around the globe and we pretty much gave it to the world, whether its baenomics, why should it be any surprise all the moves look exactly the same. It wasnt anything fundamental changed. Its because of logistics. We talked about it. These compress ranges. Lets look at april 1st. For all the following 10year maturities. Ours bunds, italian, spain, yes, even japan. Same move same moves, same moves. Im not sure how this is all going to end. What i can tell you, we havent done much since weve been open in our time zone. They went wild before we came to our time zone. There is a liquidity issue here. The markets aware of it. Some of these moves will probably have more frequency. Carl back to you. Well come back to you later on. When we come back exclusive with the priceline ceo live from ames dan. The travel website with a profit miss in spite of better bookings. An almost perfectly flat dow, up 0. 5 point. Of all the causes of train derailments, one is especially hard to spot a single cracked wheel. And out of more than one and a half million wheels, how do you find the right one . You cant hear it. But analytics can. Working with ibm a railroad analyzes one hundred thousand data points a day to help stop trouble before it starts. Ibm analytics is working to make every industry smarter every day. Theres some facts about seaworld wed like you to know. We dont collect killer whales from the wild. And havent for 35 years. With the hightest standard of animal care in the world, our whales are healthy. Theyre thriving. I wouldnt work here if they werent. And Government Research shows they live just as long as whales in the wild. Caring for these whales, we have a great responsibility to get that right. And we take it very seriously. Because we love them. And we know you love them too. 40 of the streetlights in detroit, at one point, did not work. You had some blocks and you had major thoroughfares and corridors that were just totally pitch black. Those things had to change. We wanted to restore our lighting system in the city. You can have the greatest dreams in the world, but unless you can finance those dreams, it doesnt happen. At the time that the bankruptcy filing was done, the Public Lighting Authority had a hard time of finding a bank. Citi did not run away from the table like some other bankers did. Citi had the strength to help us go to the credit markets and raise the money. Its a brighter day in detroit. People can see better when theyre out doing their tasks, young people are moving back in town the kids are feeling safer while they walk to school. And folks are making investments and the community is moving forward. 40 of the lights were out, but theyre not out for long. Theyre coming back. One day left to nail the number. Tweet us your predictions for april nonfarm payrolls. In celebration of our new San Francisco bureau the prize is a one market mug ought dprafed by the squawk on the street gang. Youll have until one minute before the jobs number tomorrow to tweet us your predictions. Best of luck. Claims, jim . Up only 3,000. Thats still near a 15year low. Claims in the semiconductors are proving to be the leaders. Tech has been so horrendous. It can lead us. The fact is oils been thrown back from the 62 level. I think thats really heartening a lot of people. If you have a Weaker Dollar Oil not going higher. Interest rates settling. You get the retaylorilyloril stocks going. Have a nice day. When a rewards card is designed to sync with your life it gets talked about. So you can live the way you live, and enjoy all the rewards. Chase sapphire preferred. So you can. Excellent looking below the surface, researching a hunch. And making a decision you are type e. Time for a change of menu. Research and invest from any website. With e trades browser trading. E trade. Opportunity is everywhere. If you want to succeed in business, mistakes are a luxury you cant afford. Thats why i recommend fast reliable comcast Business Internet. They know what businesses need. And theres a nomistake guarantee. If you dont like it, you have thirty days to call and get your money back. With comcast Business Internet you literally cant mook a mistick. I meant to say that. Switch today and get the no mistake guarantee. Comcast business. Built for business. Priceline a little bit overreaction. One people like is trip advisor. I like everything i heard on the call. Its an easy one to like. Its being brought down by priceline. That is wrong to do that. Green mountain coffee. Ive been saying buy this one from cocacola. I reiterate that. This was one of the worst calls ever. It was like, by their own admission, there was nothing on the call other than listen we got it wrong again with 2. 0 keurig. They were selfafacing. There was a little rebellion on the call where an analyst said you said things were good in january, you were wrong. You said things are good again, you were wrong. Why believe you this time . The answer was like crickets. The only s pers that have done worse are chesapeake, ralph lauren and sandisk. Thats not good company. Thats like a two, four seven, nine and a jack. What do we do there . Keep the jack and nine . What does coke do . I think coke can buy them. Now, look, thats not a reason to buy them. They like the new kold product they spell it wrong im saying buy cocacola if you like Green Mountain because they can buy the rest without a problem. They are waiting for the kold drink machine. Ill go to bed bath and beyond and buy it. But ill buy cocacola. There is a trade back into now that gasoline and oil thrown back, lets go to sonic. I wish i had those two guys. I love those two guys. I like cliff hudson. I dont like those two guys. There is no accounting for taste. Really . Then there taft from fiesta group. Okay grandpa. The millennial store . I dont have a badge. I need a stinking badge. They need to i. D. You. Its like abercrombie. I cant go in there. See you tonight, jim. Thanks. Profits and the business of summer travel. The ceo of priceline, an exclusive interview. Plus Stephen Dubner the author of freakonomics. Hello. I am a fully automated Investment Advisory service. I can help you choose investments. Monitor them. And rebalance your portfolio. I can do a lot of what humans can. Except have a real conversation. If youd like that, you can always speak to someone at schwab. They arent algorithms. Try not to hold it against them. Say hello at intelligent. Schwab. Com opinions. Theres no shortage in this world. Who do you trust . Whose analysis is accurate . How do you make sense of it all . A simple unbiased stock score consolidated from the opinions of independent analysts. Is that too much to ask . Nope. Equity summary score powered by starmine, will help you execute your ideas with speed and conviction. And its only on fidelity. Com. Open an account and find more of the expertise you need to be a better investor. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Squawk on the street. Im Carl Quintanilla with sara eisen, simon hobbs and david faber. Well have more on the tesla results and what elon musk said on the Conference Call. Athena health out with a new app on the apple watch. The ceo will join us live. Chicago fed president Charlie Evans says any Interest Rate hike should be pushed to next year. More from that interview later. In just a few moments, the ceo of the Priceline Group Darren Huston will join us live. The company beating expectations. Giving a soft outlook for the current quarter. Stock in the red. Thats coming up in five minutes. We start with the markets here. Dow down about 36 points after u. S. Jobless claims we learned rose modestly to 265,000. Still hovering around 15year lose. Lets bring in chief investment strategist at raymond james. How did this set up for tomorrows jobs report . I think its a lot of noise. I think we are in the longest contiguous job configuration. The good thing about mr. Market as Warren Buffett said if you dont like his mood today, he will show up tomorrow with another better offer and you dont have to play with him every day. In other words, take a longer term view. I am exercising patience. We do talk about the daytoday moves here. It has been a brutal week for the bulls. Are we in a situation where tomorrow a good jobs report is good news for the markets because of the strength of the economy or bad news for the markets because its all about fed policy or what . I think it will be good news. Janet yellen is a gradualist. I dont think she will pull what the fed did in 2004 to 2007 where they raise the fed funds rate from 1 to 5. 25 . I think she raises by 0. 25 in november and steps back two or three months and sees the reaction in the economy and markets. Im not afraid of a rate ratchet here. Yield on the 10year german bund year is at its highest level in five months. Its been volatile for bonds around the world. Should we are worried about that here in the United States . I dont think so. Bill gross has got that one right. The trade of the century is to short german ten year bund. You agree . I agree. Youre the second person in recent sessions who has spoke, i think what you are saying is equities are a longterm investment. You kind of bypassing the fluctuations and concerns we have for the next how long . Ron barren told me there arent many of us left. I said what do you mean . He said that have seen a secular bull market like 82 to 2000. Secular bull markets tend to last 14 or 15 years. We are six years into this one. If past is prelude, we have another eight or nine years. This he compound it roughly 16 per year. If you extrapolate that out to 2023, 2024 youre talking about more. We had this huge surge built up on qe. That makes people nervous. We are at the records. A lot of people think you are in the late stage of a business cycle. I would argue that because the financial fiasco was so bad you are going to get an elongated mid cycle and have another two, three years in mid cycle recovery here. The slowness of the recovery extends the mid cycle. I think the stock market even if we get a 10 pullback its i noise. Its within the construct of the secular bull market. Tim geithner former treasury secretary was on squawk box earlier and asked about the u. S. Economy. Interesting answer especially relative to the rest of the world. Have a listen. I think the american economy, if you look beneath the surface is a much more resilient economy now. Its doing really relatively well. In many ways the stronger economy than it was before the crisis. Again, compared to any of the Major Economies around the world today, the u. S. Is doing better. Again, i think our performance in many ways is the envy of many countries. So does that make u. S. Stocks a better bet than other World Markets . Because that hasnt been the case so far this year. I agree with that. Underlying economy is stronger than the surface figures suggest. I think we saw the worst of the economic figures over the past quarter. So what kind of rate rise can we tolerate at this point . Whats the ceiling on the tenyear for you . When do we start to get a real tantrum . I think its a long way away. I think janet yellen is a gradualist. We are a long way from rates normalizing. You see year end 10year 2. 5 . Maybe. Nowhere near 3 . What do you think when you hear her say stocks are overvalued. I think she is an economist and not a strategist. Judge, she is not paid to she is economist not strategist. Valuations are not all that high except for the cyclically adjustedadjust adjusted b. E. With these evaluations, if you think we are in a long period of a bull market are you taking this advantage at least the selloff to buy more . What looks cheap to you in terms of industries . I told people raise cash at year end. If you had stocks in your portfolio that have not participated in the straightup move we had since june 2012 there is probably something wrong with those companies to raise cash. Our models and indicators suggested the first three or four months of the new year we are going to be sketchy and much more volatile. You need cash to take advantage. This year or next year . This year. Right. You still like energy . I think you called the bottom in oil. I did i called it right her on this desk with joe kernan. So far. Yeah between january and march. We said crude oil is in a bottoming phase. Thats when everybody was calling for 20 and 30 a barrel oil. I think its overextended on a shortterm basis. We are due for a pullback. Do you think its trading at fundamentals because so many investors have gone in and controlled so much of the market, shorterterm investors . I think the hedge funds have been wound up in the trade. Longer term, youve seen the bottom. I dont think we are going back to 42 or 43 a barrel. Good to get your thoughts. Check in with you as always. My pleasure. One of the top losers this morning is priceline. The travel behemoth solidly beating expectations has a 26 booth in growth bookings. Currency effects are 90 of pricelines business outside this country. The ceo is guiding down Market Expectations yet again. Joining us live from amsterdam in a cnbc exclusive is Darren Huston, president and ceo of the Priceline Group. Welcome back to the program. People know that you are a conservative when it comes to guiding down. There seems to be more than that in what youre saying now. What is the current state of the business . Yes, simon, we are actually quite happy where the business is. We actually accelerated our growth in q1. The business is healthy grebly. Its a great travel environment right now. We are investing. That is one area we are investing in things we really believe in that are going to drive the longterm growth of the company. Also as you mentioned, we are heavily impacted by currencies. Most of our money is made overseas. This isnt a real effect its a translation effect when you transit rubles into dollars. The fundamental health of the business is strong. What about the shift to mobile . Notably you like other players in the space have come through with new apps for the apple watch. What do your apps do that the others dont . All our brands are on the apple watch. We have one specifically our booking now app on the apple watch. You can literally book a hotel from your watch, which is a first in travel. Its exciting for us. Obviously the apple watch is just getting going. We dont know if this is a big volume play. It feels good to have the capacity and talent to innovate against a brandnew platform. We are excited about it. Lets see where it goes. People who work in the lodging industry in this country and europe and asia who are watching you live know one of the benchmark pieces of the operation is the fact you have parity agreements with the hotels you service. In other words, they are not allowed to offer their stock at prices below what you advertise anywhere on the web. Importantly, you just conceded to the antitrust authorities in europe that you are going to change that. Can you explain what you are going to do now that you didnt do before . And to the people that are watching new this country and asia, will you be loosening their contracts, too . Parity has been around the travel industry for years. It would be like if you had to go buy a Delta Airline ticket on somebody else and it was 10 more would you buy the Airline Ticket on that site . We have parity in place to make sure that our consumers dont have to pay more. Its not holding the hotels back its been the way travels been done for a long time. Im proud of the new agreement we have in europe. Its protecting the parity on our site with the hotel site. We are going to continue forward like that. At the end of the day, whether we have parity dont have parity, we cant let our customers pay more. Thats just a fundamental principle in the business. This agreement doesnt change that at all. However, they will be able to offer those prices lower to other parties. The consumer can get them lower on Hotels Tonight presumably or restrict the amount of rooms you can sell. This is a big deal for people who do this for a living darren. Given the volumes we do we can ask for lower prices than our competitors. This is great news for consumers. We are going to lean in to make sure our customers get the best pricing. That is not going to change. Our volumes and the nature of our relationship we are a low commission model. That allows us to ask our hotels for great pricing all the time. Thats what thats why our business has grown so well. We really have super competitive pricing, broad selections simple experience and at the end of the day i think thats what the customer wants. Last week we were talking to your rival at expedia. We were talking about how both of you make this huge effort, hundreds of thousands of people knocking doortodoor to sign up hotels exclusively to your sites in asia. I think for you italy is really important. Now you are changing that. You are going to offer, basically a free Management System to small hotels. As a result of the boutique purchase. You and i discussed that before. Where does that go down the line . Do you at some point say, dont become a western, dont become a windham, dont become a choice brand. Why dont you have the priceline brand . Are you transforming what you offer to be a lodging brand . Certainly not. Brands play a Critical Role in any business and in the Hotel Business, thats different. The great brands of the Hotel Business really communicate a Value Proposition to the guest. All we are trying to do is to in particular help the Smaller Hotels have the pensions the b bs and bigger hotels to operate in an internetbased environment and much more cost efficient way. Thats the play here. We are able to build websites literally for free for our partners. We can modernize them and translate them into different languages and allow them to sell their product all over the world. We can do that because of the size and scale of our platform and trust our partners have in us. We are certainly not planning to be a book. Com branded property, priceline branded, kayak branded. This is Offering Technology and allowing our partners particularly ones with an amazing product, to communicate that to the world with a very costefficient solution. Darren, i know youve got to catch a flight out of amsterdam. Well let you go. Thank you for joining us. Darren huston for priceline. After the wells report on the new England Patriots we heard from Quarterback Tom Bradys father and now his agent. Good morning. This is from tom bradys agent who says the wells report with all due respect, is a significant and terrible disappointment. Its omission of key facts and lines of inquiries suggest the investigators reached a conclusion first and then determined socalled facts later on. The statement is lengthy, but it goes on to Say Something to the extent this report contains significant and tragic flaws and is Common Knowledge in the Legal Industry that reports like this generally are written for the benefit of the purchaser. Tom bradys agent coming out with a disappointing statement with regard to the report on deflategate. Well bring you more details. Right now tom bradys agent is on the record with their response to the wells report. I like the new yorker humor article which says brady has been sentenced to spend a year with the new york jets. That is a different story. No comment. Lumber liquidators halting sales of its chinese flooring after dozens of lawsuits have been filed over the safety of the product. Stock making its way to positive territory. Scott cohn in san jose with more. This is a sharp turn for lummer liquidators. A few weeks ago the company was saying its allegedly formaldehyde flooring was safe and was talking about suing 60 minutes for its report now it is hired a former director of the fbi louis freeh to review the sourcing and compliance. Sales plunged down 18 in march alone, while legal and regulatory pressures rise. 100 plus civil lawsuits and last week the company disclosed the Justice Department is pursuing criminal charges over the companys foreign sources. With that the Company Seems to be pivoting toward potentially laying the blame on those chinese suppliers, even though that 60 minutes report alleged the company knew exactly what it was getting. The product was labeled as safe the company says it is fortunater reviewing the underlying certification and labeling products of its suppliers. Because of that and what the Company Calls mounting industry concerns about the chinese laminate, it is suspending sales effective today. The company does say those free indoor air testing kits it distributed to concerned customers have come back overwhelmingly negative. 97 showing no issues with formaldehyde. Of course, that Testing Program has come under question with one lawsuit calling it a sham. Another question how much is all of this going to cost . The Company Already set aside 10 million for the Justice Department investigations. Profit margins are shrinking. It has roughly 20 million worth of this chinese flooring in inventory as of the end of last quarter. Its going to have to replace that with sources from perhaps north america and europe. Thats going to cost more. The company not saying today how much all of this is going to cost. Carl . Scott cohn in san jose, thanks so much. When we come back tesla making more than 1,000 cars per week. Seeing a big boost in sales. Investors not convinced. Stock is down about 1 . More on those results and what elon musk said on the Conference Call. Dow up two. Dax making its way into positive territory. That is a 2 intraday swing. My name is jamir dixon and im a locate and Mark Fieldman for pg e. I protect people. I protect our community. I protect our environment. When you call 811 i come out to your house and i come up to your dig site and i mark our gas lines and our electric lines to make sure you dont hit them when youre digging. Most people in the community recognize the blue trucks as pg e. My truck is something new. Its the 811 truck. We get a lot of questions about what is 811 . And it gives me a chance to engage customers and contractors in the field. 811 is at the heart of safety. Call before you dig. We want everybody to know 811 is a free service. Its important for me to get it right because this is my community. This is my environment. Any time somebody is digging i treat it like its my house or my family members house. I want people to know whats underneath them when theyre digging. Im passionate about it because every time i go in the street i think about my own kids. My family is my life. Theyre the reason that i want to protect our community and our environment. And if me driving that truck means that somebody gets to go home safer, because now they know about 811, then ill drive it every day of the week. Together, were building a better california. Tesla lower today despite beating expectations. Sales better than expected. Phil lebeau is live in atlanta with more. One analyst calls the cash burn situation eyewatering. Here are issues people are focusing on today in the wake of the 2015 First Quarter earnings coming from tesla yesterday. First of all, for 2015 sales targets. Can they hit those as they look forward for the remainder of this year . Remember, they are targeting 55,000 in sales. Then there is the ramp up of the model x. Yesterday mr. Musk said they expect deliveries to start in the late Third Quarter as far as the model x. Finally cash burn situation. Right now tesla is sitting on about 1. 5 billion, but its down 21 . This morning barclays out with a note saying we wonder how long in the face of weak auto results investors will continue to see 190 of value in the automotive business. Right now shares of tesla trading above 190 but yeartodate, this stock has really not done a whole lot. One of the more interesting aspects of yesterdays call was a question about how elon musk feels about apple potentially getting into the auto manufacturing business. Here is what he had to say. I certainly hope apple gets into the car business. That would be great. We are not really seeing significant attrition of engineers to apple. Apple for anything car or otherwise. Reporter take a look at apple versus tesla over the last year. No comparison at all. Apple has easily outperformed tesla. The cash burn situation is getting a lot of attention today from analysts on wall street. One analyst saying look do they only have enough cash to go through the next three quarters before they have to go back to the Capital Markets are come up with other way of infusing more capital into the company . That is going to be a focus near term as people look at whats going on with tesla. Certainly, the Battery Storage situation and that business being developed got a lot of attention yesterday, as well. Something we were talking about this morning with jim, too. Phil lebeau, thank you. Shares of alibaba are gyming after a strong earnings report. We spoke with incoming Ceo Daniel Zhang about transition to mobile platforms and the importance that is playing in china. Today more and more consumers in china use mobile to do online shopping. On the other hand, more and more merchants start to spend more dollar on the mobile side. Based on this we believe mobile side will continue to increase. And we are confident that we can approach that on pc and even higher. Mobile now represents about 51 of the total gross merchandise value on the site. The take rate does come down as a result people arent quite as motivated to shop on their phones given the smaller screen. Is is still an important component of the growth of the company overall. Stock down from the highs this morning. It was heavily shorted coming into the quarter. Though they did beat. A little bit of a short squeeze. Slightly disconcerting jack ma is championing the fact only people born after the 1970s will be leading the troops. I agree. That is slightly disconcerting. We think its just fine. We dont. Whats the problem, guys . Bitter old men over there. They want to be in business 102 years to hit three centuries. Thats how you have to do it. People born after the 1970s. When we come back its been ten years since the release of the bestselling book freakonomics. The authors are out with a new book taking on water, conservation and bank robbery and how much pepsi would pay for cokes secret formula. And now when to rob a bank. Join us live to talk about all of it. At chase, we celebrate Small Businesses every day through programs like mission main street grants. Last years grant recipients are achieving amazing things. Carving a name for myself and creating local jobs. Creating more programs for these little bookworms. Bringing a taste of louisiana to the world. At chase, were proud to support our grant recipients and Small Businesses like yours. So you can take the next big step. When a moment spontaneously turns romantic why pause to take a pill . 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Contact your health plan for the latest information. Its been ten years since the release of the bestselling book freakonomics. Now the authors are back with their newest book when to rob a bank. Stephen dubner joins us. We are all huge fans. You changed the way americans think about complex topix. I wont say that but i appreciate you saying that. We find a way to get beneath the surface and use data which you all do every day. The other thing we bring to it, we try to understand incentives at play in a complex circumstance, whether its real estate parenting or education, whatever. Its easy to get caught up in the mechanics of who is doing what wrong or right. You need to measure cause and effect. You need to know what works. You need to measure who has incentive to behave in what way and try to design better incentives. We write about politics which i hate. I hate it because its very important. There are things in life that are mundane but meaningful. Nutrition, sleep, different maintenance that nobody pays attention to. Politics is meaningful and not mundane. There is a lot of drama. Incentives are perversely aligned. Most politicians have shortterm selfinterested incentives. We who send them to do stuff, we have projects we want them to do that are long term. I would love to try something radically different. Maybe pay politicians a lot more. Singapore has done that. You let appointed officials get vested in their project. Stock options for politicians. Say the secretary of education arne duncan could raise u. S. Test scores 10 Percentage Points over 10 years, lets write him and his team of 100 people set up measurable deliverables and measure them. Ten years we write them a check with 5 million. Thats the way the world works. Rather than people with shortterm, selfinterested incentives are going to perform in our best interest because they dont. How much hate mail do you get . On that one i talked that through with a bunch of politicians, including john mccain who was looking at me saying, steve, that is so interesting. Shakes me head and smiles and says good luck to hell with that. There is no way Something Like that could happen. The politicians arent going to overtly hate that. People hate when we attack sacred cows, environmental stuff and such. One of the ones i liked, before i maybe just was in atlanta at coke headquarters you talk about the mysterious coke recipe and what pepsi would do with it. Its counterintuitive. Turns out that coke employees were trying to sell the secret formula to pepsi. You would think pepsi would say, hey, bring it on. As it turns out, they have a pretty nice little duopoly going there. If pepsi got the formula and wanted to make coke maybe they have and thought about it. The fact is what distinguishes them is what creates the value in the two. You dont necessarily want to diminish that duopoly. The vast majority we dont understand. The thing i try to do now, which weve written about in the past is think like a child. As you grow up we get conditioned and get rewarded for sounding smart and having complex thoughts, which are often not all that productive. One thing children do is walk around asking ridiculoussounding questions. Many of which are truly ridiculous. Thats what we try to do is ask questions that are often overlooked where there is an arbitrage possibility. We will look at something all the smart people decided is beneath them. That creates opportunities for people like us. Do you still hear from economists who think youve taken this sacred science and turned it into pop culture or candy, commercialized economic thought . Absolutely. One is they dont like demystifying the gild. On the other hand if you are an economist who teaches at a university, you have your teaching ability. Demand comes from students who want to study economics. Freakonomics inflated the population of people who want to study economics. You might not like the popification, but you know demand has risen your services and your Services Value increased. When should you rob a bank . Never. If you are going to be a criminal, bank robbery is a terrible crime. Embezzlement is better. If you have to rob a bank the take is much greater in the mornings than this the afternoons. However, most bank robbers work in the afternoons, which indicates they are not profit maximumizers maximum maximizer or too lazy to get up in the morning. I cant wait to read it. Great to see you. Thanks for having me. Breaking news now. On nat gas. Good morning. We got our weekly status report on nat gas for inventories last week. A build of 76 billion cubic feet. This is right in line with expectations. Just about in line with the fiveyear average. Prices turning negative on the report but by a little bit 2. 76. Nass gas has been slowly rising. The resistance point weve gotten close to a couple of times 2. 82. Thats the point to watch to breakthrough. We do have evidence from ben tech energy that demand has definitely been picking up as the spring and Summer Season gets into gear. So nat gas could probably go higher from here. What traders are telling me is how low can it go . Theres going to be pint around 2. 50, 2. 30 where it probably doesnt go much lower than that if stocks are in good shape. Keep in mind total stocks about 4 lower than the fiveyear average, as well. Pretty inch good shape. Back to you. Thank you very much. Straight ahead in advance of tomorrows payrolls data chicago fed president Charlie Evans will explain why he thinks rates hikes should wait till next year. Athena health ceo Jonathan Bush. Yes, he is a cousin. Will join us live. Call 1800royal caribbean or your travel agent today. The network that monitors her health. The secure Cloud Services that store her genetic data the servers and software on a mission to find the perfect match. And the mom who gets to hear her daughters heart beat once again. Were helping organizations transform the way they work so they can transform the lives of the people they serve. Just because im away from my desk doesnt mean im not working. Comcast business understands that. Their wifi isnt just fast near the router. Its fast in the break room. Fast in the conference room. Fast in toms office. Fast in other toms office. Fast in the foyer [pronounced foyyer] or is it foyer [pronounced foyyay] . Fast in the hallway. I feel like ive been here before. Switch now and get the fastest wifi everywhere. Comcast business. Built for business. Good morning im sue herera. Here is your cnbc news update. Saudi arabia and the u. S. Announcing a renewable fiveday ceasefire in yemen will start soon to get aid to millions of civilians in need. It is dependent on rebels and allies to agree to stop fighting. Secretary of state kerry meeting with audi officials in riyadh today. Johnson johnson will become the first drug company to consult experimental medication. The medications will be advisory with the Company Making the final decision. Residents in Oklahoma City waking up to major damage caused by tornados overnight. An rv park in the city totally destroyed and a roof blown off a local motel. Luckily though no fatalities have been reported. Las vegas sports books are taking down the odds for the new England Patriots seasonopening game on speculation that Quarterback Tom Brady could be suspended for his role in the teams use of underinflated footballs. New england was a 6 1 2 point favorite over the pittsburgh steelers. Well see what happens. Thats our nbc news update. Back to you. Controversial comments from fed chair janet yellen on market valuations getting support now from one of her colleagues. Senior economics reporter Steve Liesman joins us from new york with the highlights of his exclusive interview with the chicago fed president charles evans. Simon, thank you very much. If you were among those who was disappointed or thought it was inappropriate for fed chair janet yellen to say that stock valuations were high the message from Charlie Evans chicago fed president in an exclusive interview this morning on squawk box was, get used to it. Evans said in the post recession, post financial crisis world, that is exactly the role of the Federal Reserve. Its incumbent upon us to talk about Financial Stability, financial instability risks we might face. In that context, its quite natural that policy makers and the chair of the Federal Reserve is going to make some comments about leverage, how thats working its way through the economy. If she said that Financial Stability risks are moderate on the basis of everything we looked at and i think that is the larger take away. Everybody ought to get used to us talking about Financial Stability issues. Evans pointed out that other legislation since the financial crisis the fed has been charged more with moderating Financial Stability. On the economy, evans saying he is expecting a bounceback from growth from the weak First Quarter. He said those effects were transitory. He said he wants to see 3 2. 5 to 3 growth in the Second Quarter and for the rest of the year. However, he says optimal Monetary Policy calls for a rate hike in 2016. Says the fed should be in no hurry to raise rates and its natural for fed policy makers to make those kind of comments on the financial markets. Back to you. Thank you very much steve. Athena health is forging deeper into the enterprise space after the Electronic Health company missed earnings First Quarter earnings estimates. With the recent release of the text app for the apple watch will we see a rise in Digital Health solutions . Joining us is Jonathan Bush Athena Health chairman and ceo. Doctor ads are with disappointing. Beat the hell out of guidance actually and what the street had. The stock went down. I love wall street. You beat everything and your stock goes down. You miss everything and the stock goes up. Its like trying to follow a caterpillar. Which part of the body are you looking at to decide how fast the caterpillar is going . This year has been a brutal slide for the stock. What are investors missing . What do they know that we dont know . I dont know. The company is doing what its supposed to do. We have four things we do. Weve been doing it 15 years. We connect doctors to patients. Most patients dont connect to their doctors online. Our clients get to connect to their patients online. We connect doctors to each other. Most doctors are isolated even when on an emr they cant see the hospital. Doctor to payment for results. Most are doing this billing nonsense in the back. Ive seen the ladies and paper. What is new and exciting we are starting to connect doctors to new innovations. There are mobile apps and new cool tools as we get Health Information online people can use in health care. One of the Big Questions on this stock that has been brought up are you adding customers fast enough, especially in hospitals. Yeah. As when obama was elected, everyone got scared and the doctor world sold out to hospitals. A huge part of our Addressable Market went from lots of independent practices, which we still add 30 more docs in that segment every year like clock work. Then the other half of the market are in these huge enterprises. You go huge long periods of time with wine and cheese and whos in charge advisory consultant. Then finally boom. The board approves and a multithousand doctor deal hits. In q1, trinity we thought it might have been q4, but thats the way it works. It got done. Now we are rolling with a huge implementation that will cover up a dry patch of enterprise implementation. That enterprise segment is bigger than ever and take a long time to sell and implement. Its been just over a year since David Einhorn launched this attack. Im interested how you engaged with him over the past year. Clearly, there is still huge Short Interest in the stock. At first i did learn who he was when everybody started texting me and said einhorn doesnt like you . I thought he did the scarsdale diet honestly. Totally confused. I learned his story. I appreciated the chance to talk about the market. Have you met him . No. He was able to give me a phone call after his first sort of short show which was almost a wall street meets mean girl. Videos of me. In fairness you were comparing your company to amazon. Yes, the Business Model is very similar. We are much much smaller. More profitable in many ways. But very similar Business Models. The software is the story to go into to get the results. Most doctors pay for their software and get their own results. Our doctors get the Software Free and pay us for the results. Thats the similarity in the Business Model. Its a much better model for cashstrapped hospitals and medical groups that cant afford multimillion dollar kind of epic scale acquisitions and implementations. That its similarity in the Business Model. It is similar. We are not anywhere near amazon. We are under 1 billion in revenue, right . We are a tiny oompaloompa bouncing around. We are the biggest in health care. We are five times the size of kaiser permanente. The research we can do. The connecting we can do. In a world of midgets, we are a really tall midget. Isnt the problem that everybody is being drawn to it . There is new entrants and Competitive Pressures are getting more acute and margin compressions . I wish. I wish. There are new entrants. They are using a wellknown clinic in pennsylvania is starting a National Mobile app Service Brand called xg. They built an app that connects into emr, Electronic Medical records and surfaces data just for rheumatologists. Now you are online and cotreating with hundreds of other, thousands of other rheumatologists across the country. Thats what Health Care Needs that. Will be complementary to athena. We started an incubator on three of our five campuses called more disruption please. We capitalize them house them and invite them to build products that sometimes compete with ours to get the juices flowing. We have to get those blimps out of the sky. Are you a cousin of jeb bush . No. He is a cousin of mine. If jeb bush and im assuming you communicate well in the family, if he were to win in 2016 would that benefit the company . Do you think he might understand it . I love all my political relatives, because the bushes arent kennedys, we have to tap out of any material opportunity, excuse ourselves. With health care being half governmental at this point, its annoying. It doesnt mean i dont want him to be president. Ill suck him up and have someone else go to washington for me. We want to ask about the apple watch. How should investors think about that . Will that drive new business for you . Within our space the issue is always that cool things happen way outside third party reimbursed health care. Fit bits started with people who have no need for the health care system. Lit bile little as they get saturated in the market you get the sort of slightly overweight folks beginning to be diabetics on fit bits. Now the doctor can take a feed. Apple watch is the same thing. Its a new cool way of getting instrumentation out into patients. As more people get it some of those people will be sick and we will be able to use the apple watch to do cool things with our docs. It will help people. If it goes and sticks. Emperor coming new clothes on. Everybody clap or hes naked. Jonathan bush always good to see you. At least youre not a mother fracker or father fracker. No. I ducked that bullet. When we come back Nobel Laureate Robert Shiller will join us live to talk about tomorrows job numbers and when or if a rate hike happens again. More squawk on the street. Can it make a dentist appointment when my teeth are ready . Can it track my crews performance, and protect their heads . Can it tell the Flight Attendant to please not wake me this time . At cognizant, we see opportunities for every company. To meet the new digital demands of their customers. Can it process my Insurance Claim . Like, right now . Can it download a track while im sampling it . Can my keys find me . With the power of digital, analytics and automation now every little thing can provide even greater value. Ok, so can it tell the doctor how long you have to wear this thing . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . New york state is reinventing how we do business by leading the way on tax cuts. We cut the rates on personal income taxes. We enacted the lowest Corporate Tax rate since 1968. We eliminated the income tax on manufacturers altogether. With startupny, qualified businesses that start, expand or relocate to new york state pay no taxes for 10 years. All to grow our economy and create jobs. See how new york can give your business the opportunity to grow at ny. Gov business why low yields could be the biggest driver for apple stock. On tradingnation. Cnbc. Com. Announcer ] your love for trading never stops. So if you get a trade idea about, say organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. The dow has turned positive along with the suspect s p, the tech sector trading higher today, dom chu back at hq with more. Tech is competing with two utilities there to get the crown. Leading the way is yahoo. Leading the pack higher. The stock up 5 to 6 on the heels of alibabas betterthanexpected quarterly results. Shares are up almost 30 over the course of the past year. As we look at the tech sector its not a bold move higher but still some bulls will like the little bit of a respite here from the threeday decline in stocks. Lets get to chicago and check in with Rick Santelli for a special edition of the santelli exchange. Before i welcome my guests the one and only profess oror Robert Shiller from yale and case shiller. I want to play a little sound byte from janet yellen from yesterday, run the tape. I guess i would highlight that equity market valuations generally at this point are quite high. Theyre not so high when you compare the returns on equities to the returns on safe assets like bonds. Which are also very low. But there are potential dangers there. Well professor, i reread allen greenspans rational exuberance speech given in december of 96. And when he talked about irrational exuberance he laid it out in a methodical way as to what his concerns and what he could do in addressing bubbles. This was a rather flippant remark during q a. Will you weigh in on this sir . Well that speech i, i was there, i spoke with greenspan around that time. Think it was kind of an isolated event. He normally didnt talk about such things. He got such a market reaction, he crashed the stock markets of the world. Thats a bit of an overstatement. He didnt bring it up again very much. I think no and it seems the norm that they dont like to. They normally dont like to. Heads of the central bank. Right. Because its it disturbs the tranquility. But its part of their job to disturb the tranquility. And i praised janet yellen for doing that. Well you know what thats your prerogative on this trading floor, heres what theyre talking about. The cme and all Futures Exchange and many other Exchange Monitor volatility and movement and range in the marketplace on an hourly if not minute basis, daily for sure and if they need to adjust it they adjust it through margins. That is one of the things the fed can do. Do you have any issue with bringing up what may be a problem that they created due to quantitative easing and seeding the clouds for thunderstorms of liquidity. And not even bringing up that they have an ability to address this . Yeah. But they have an ability to address it. But theres so many other ramifications. I think they did the right thing with quantitative easing. Nobody knows for sure because its a new experiment. But and yeah the boom in the Housing Market and the stock market, are partly the feds doing. But on the other hand we were coming close to a depression and they had to do something. You know thats a counterfactual. If you want to take thatted roo, ill take that road. To address everything that you say we were safe from things like dodd frank, many policies that now we see are draining productivity. So lower productivity we hire more people but we dont have any more growth. And when you add in a demographics of participation rate, it seems like theres a lot of issues post that savings that we need to address with longerterm consequences. Right. Well i hope dodd frank doesnt hurt the fundamental role of finance in making things happen. Thats, i have a book. Finance and the good society. Im for it im for having Strong Financial institutions. But they have to finance innovation. It cant be stick in the mud old stuff. Thats i think this country is doing pretty well actually. If you look on the world scale. At innovating and eventually productivity will start growing well again. Well it seems like productivity is, you know when i walk into banks, they tell me how many compliance officers are doing jobs. That isnt aiding product icht. When i look at all the red tape. Including taxation that isnt helping productivity . Why do you think theyre going to disappear and underwhelm and growth is going to overwhelm . Well part of productivity growth is a public sense of fair and equity annal dealings andhe canequityable dealings and that i have a good idea, i believe i can make it happen and i wont be destroyed by something crazy like another financial crisis. Well it seems like theyre getting more regular, Central Banks get more bold. Your final comments sir . My final comment . I think janet yellen did the right thing, markets are overpriced. On the other hand, she was also right not to be alarmist about it. I didnt see there was any huge crash after her speech the way there was after greenspans speech. Theyre doing good for the financial economy. And i think janet yellen she gave a talk called finance in society that really laid out that shes a believer in the fundamental role of the Financial Community to allocate resources. And to promote productivity growth. Well if they want to allocate resources, she should give Governor Brown a phone call and tell him. The best way to allocate resources is through price. One day left for to you nail the number. Tweet us your predictions for the nonfarm payrolls as always the handle, squawkstreet. The prize is a one market mug autographed by all of us here at the squawk on the street gang. Im going to sign it because i know you signed it yesterday. Here you go simon. The estimate for jobs is 230,000 to be created after a very disappointing read last month around at 126. We did see ubs and jp morgan sticking by their forecasts. After the weakness in adp. Well see. Squawk alley is next. You can call me shallow. But, i have a wandering eye. I mean, come on. National gives me the control to choose any car in the aisle i want. I could choose you. Or i could choose her if i like her more. And i do. Oh, the silent treatment. Real mature. So you wanna get out of here . Go national. Go like a pro. At chase, we celebrate Small Businesses every day through programs like mission main street grants. Last years grant recipients are achieving amazing things. Carving a name for myself and creating local jobs. Creating more programs for these little bookworms. Bringing a taste of louisiana to the world. At chase, were proud to support our grant recipients and Small Businesses like yours. So you can take the next big step. Good morning, it is 8 00 a. M. Attest la headquarters in palo alto, california 11 00 a. M. Here on wall street, squawk alley is live