Transcripts For CNBC Squawk On The Street 20150527

Lets give you a look at the futures in a moment. Were coming off a bad day for the broader markets. As you can see we do look poised for a higher open. Crude oil, wheres that hanging around . Yeah, right around that actually down a bit. 57. 74. Dont have the dollar for you. Thats figuring prominently again. Certainly against the japanese yen. Lets get to the road map. It starts with a Luxury Retail lift. Tiffany shares a higher market. Michael kors man, that is ugly. Posting its slowest sales growth in more than three years. See that stock. Amazon hiring 6,000 full time workers for its distribution centers. Thats a lot of jobs. First lets get to carl. Hes at the code conference in los angeles. Hell take it away. Carl. Yeah there it is david. You might be familiar. What an amazing view we have here as the hashtag goes today. Were at the resort going to be here for the next couple of days. This is the technology. Apple, twitter, go pro, google. Target, cvs, gm sprint and vox announced its buying recode yesterday will be here for the next couple of days. Well be talking to everyone trying to make it feel like youre an attendee and after the break were going to hear what even said last night. Talk about why he needs to epo or whose to blame. Thats coming up after the break. Thanks very much carl. Fascinating. Thats where the action is. Absolutely. Man, you speak to ceos. Its the biggest accompany no ones ever heard of. Wheres the money going to . You see the credit cards and traditional advertising. Social media. Bread and butter companies. They want to be in social media but the stocks do nothing. Stocks have been dead. When you say the stocks, what are you referring to . Im referring to facebook twitter. It depends what period of time youre talking about. Facebook has not been dead for a long period of time. Theyve had a good year. Its not glacial. Its waterful out of traditional media. I want to hear what he has to say. In the end, the budgets dont lie. The budgets switch from traditional media rapidly, doubled the amount of money. Frankly, it still is not keeping up with the amount of time spent. As a percentage of the amount of time spent in front of your television, anything else delivering you content more to the point youre talking about. Theyre still vast divergence on whats spent. I interrupted you again. Im going to be in the journalism jail. Im not going to interrupt you. Youre not . Youve got to get that out. Im interrupting you. You got to get that out of your head. Lets, were going to start interrupting each other talking retail here. Tiffany was ahead of the street with the First Quarter sales. The accompany also backed its outlook. Michael kors a very different situation. It posted kwaurlly earnings below consensus and slowest sales growth for three and a half years. Four year guy dance. It was well shy. That stock is down 10 bucks and were talking about a 50 stock at the beginning of the day. It deserves to be. Talking about low double digit sales, declines Going Forward offered expenses increasing rapidly. Tiffany talking about double digit increases Going Forward. Second half could be strong. You have this amazing dichotomy. Tiffany should be up 10. Kors down 10. Kors was going down relentlessly. This is for people at home to understand understand. It turned out to be a horrendous story. Thats the fashion price point not good. Constant currency revenue up 14. 3 14. 3 percent. Its costing too much. Its not fitting the profile. Verses say designer shoe wear house. The stores are at a rapid pace. 2,100 new net store openings. We dont need more store openings, we need more profit. Thats something they better learn. Take a look at dsw. Ive never been to dsw. I havent. You go in there, man and guys are trying to take on shoes and the guy is taking my shoe because the price is so cheap. Why dont you go grab the timberland. Theres a fight over a pair of shoes. Switch sizes, dsw way better than expected. Hundred base point expansion. That stock doesnt get the expected. Someones going to go for it. Before we get to the broader market, its going to be up sharply. Constant currency sales were 3 . Theyre hurting from the dollar here, of course. They use to come here and use their stronger currency and buy jewelry. That is not happening. They seem to be weathering it. This is the expectation game. The expectations are not nearly as high. I thought the stock would be down. There wasnt anything there that went on for the stock. When you come in with a double digit forecast people think i got to choke one. They know something. Do they know something . I dont know. Net earnings were up second half of the year. Is that based on something . What do they know we dont know . I hope they know their business. Maybe they think a lot of people are going to get married, a lot of people have kids. Major change in the dollar. I dont know what they see. Just basing it on well we think the dollar our inhouse economist think, i would hope its more than that. Honestly, i read it and said geez this is a little pie in the sky. Its a well run accompany. They have some credibility. They have credibility. What a great looking suit. Thank you. Ralph lauren. Theyre stocks have been going down. A dollar again. There are other guys. And the dollar is an issue. Certainly an issue yesterday. The yen continues to weaken. Lets talk broader markets. Is s p had more than a 1 decline. The dollar coming off its biggest gain in two years. European creditors trying to down play athens defaults on a loan payment to the ief. Thats next week. We get stuff next week. The third, i think. June 3rd. The day things start to get moving moving. Yeah, their policy setting meeting is wednesday, june 3rd. The payment is due the 5th but its the dollar. I think all eyes should be on the transit ports. All i saw. Keep one eye on the transit ports. They could turn things. Union pacific said listen things arent as bad as we think. Because the rails have been terrible, the airlines have been horrendous. Remember since doug parker came on mad money and said price work. What was he talking about . Again, what was he saying im not . Certainly, when you go to Book Airline Tickets i think youre usually amazed at how much money youre spending. Whose putting it on . Delta. Delta. Delta has wide big eyes. They think they can add a lot of capacity. Theyre still making a huge amount of money. It is interesting that someone broke ranks and decided you know what were going to start adding a lot of queens and roots and that has been the source of the strength. Still earning more. I am not. Those fears justified or are people still sort of remembering basically the entire history of the public airlines . Estimates were too high. U. S. Air, american airline, the combination selling at five times the fernearnings. If fuel comes down and delta says hey, wait a second, we dont need to do this or whatever then the dollar has hurt them. Thats why talking about tiffany, the strong dollar hurts tourism, i was surprised the strong dollars hurt tourism. These American Companies in the Airline Business have a lot of european although spirits does and theyve been killed. The added capacity is the debt to earnings to share. Right. However, it is a good thing for those of us who actually fly. What is this . Cheap fly network. No, its not. Im just trying to put a positive interpretation on certain things. Remember, its not always just about the stock price although it often is. Not necessarily. This is a moment. Have you having a moment . Are you okay . Im trying to figure what else. Well get back to talking about stocks. What is it about, nice suits . Its about love. Luv. Really . Yes. Its been for sell. Luv has not been for sell. Luv has been for sale. What do you mean . Youre not saying the accompany, the stock. The stock. When you said luv i thought you meant southwest. Luv is for sell. 36 a share. Even. Luv. Southwest airlines. Coming up what snap chats ceo and senator Elizabeth Lauren had to say at the code conference. Taking another look at futures, by the way, hes too late for you elizabeth. Did you see the piercing blue eyes in the cover story . Be very afraid. I find her dynamite. Got a lot more squawk on the street coming right at you after this. Its part adrenaline and part adventure. Its part geek and part chic. Its part relaxation and part exhilaration. Its part sports car and part suv. And the best part . The 2015 gla. Its 100 mercedesbenz. Welcome back to squawk on the street. Were live in california where the first speaker was evan speeg l of snap chat which has become a force in media and technology. Speeg l has proven himself. He turned down 20 million from facebook in 2013. Last night he said quote he needs to ipo eventually. He talks about. When you have Interest Rates of negative rates and governments printed a lot of money, you know i think that people are making riskier investments. And i think there will be correction. Its a question of when i think everyone sort of has thoughts about that. We dont know when but its definitely something we factor into our plans as we think about the growth for our business. Speaker last night, senator Elizabeth Warren in massachusetts. Last night she talked about what happens, what we do as a nation if technology, selfdriving cars, you name it reduces the number of jobs to be had down the road. Our only chance for survival is to innovate our way out of this. Were not going to stop tech so lots of people can work. Thats like saying lets get rid of heavy equipment and let everyone dig with a spoon. That way lots of people will be employed. No, thats not going to work. Danielle of spotify, flip board, did they really have the talks with twitter . Then jim and david 11 00 a. M. Your time mary of perkins rolling out her internet trends report. Probably the most significant presentation. Guys. Southside research analyst. You must listen to what she has to say. Shes no bias. I cant wait to hear that. Carls got everybody. Its interesting about the correction because the correction is needed in the private markets. I know. The private markets are certainly much less. How old is speigel . Is he even 25 years old . I would love to get his fact pattern for kwoo he feels thats the case. Did he give any reasons . He did say he would make an awful lot of money. No guidance on timing. Clearly, his reference to Central Banks was blatant by far. I dont know. When i spoke to chase he said the same thing. I mean its kind of universal. In other words, i think Everybody Knows it. Chase has been batting 400 as a couple of home runs. Carl the fact is if you dont call for correction youre going to look silly. I think thats part of the problem with the markets. Its almost as if its universal. We got to call for correction because theres too much easy money. The problem with that is that you miss time westerner cable. You could make enough money and you could have retired and decided to cash out and live on those cds. It sounds like youre saying while the movies playing you got to dance. Historically as a private dancer. Are you a fan of prince . No, teen that. Chuck prince . No hes clown prince. Im talking about tina turner. Stanley fisher is prepping us. I am saying that some of these private market stocks and time westerner to me was the beginning of too much overpay. When i see rumors that express scripts is going to bye rite aid, there are inexpensive stocks and expensive stocks. Well be hearing, of course from carl throughout the morning. A guy named chase has got to know about it. Chase manhattan, you got to know whats going on. The mets are killing us. Maybe in the end he doesnt know. Sorry. Actually im not sorry at all. Up next its cramers mad dash. Were counting down to the opening bell. Heres another look at futures this morning coming off a down 1 from the broader markets. Were going to rebound at the open a bit. Were back after this. By the time Police Arrive on a crime scene they could have little to go on. A vague description. A single piece of evidence. A partial plate number. With an app from ibm officers can now access over a billion police documents to find hidden connections and identify potential suspects. Ibm analytics helps one hundred thousand officers work smarter every day. 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. Its another hot day. Wednesday already. Time for a mad dash. All right. When youre dancing and the music stops, it stops for work day. Work day last night, it was a very depressing call frankly. Abunch of guys downgraded. Oracle may be a reason its not really a price war. A didnt get the Revenue Growth i wanted. However, this guy is a great guy. The stock is overvalued. This is what i meant when one group of stocks are expensive. They cant afford to miss. Theyre being so aggressive. Theres a lot of people in oracle that dont want to see work day become what happened. Again, its so hard to talk about overvalue. Its all in the eye of the holder. Its like art, david. Its like art. Like art. I know. Picasso. Heres the problem. This is an example of the stock thats extremely overvalued. Fantastic ceo, served in the armed forces. Perfect. Whether it able to buy back stock. This is the hottest group. They said negative things about checkpoint. You liked this all along. Someone says jim, its expensive. Kidding. This is me trying to i guess dance. I say listen. Paloalto is the best in show. Its been the theme. If you stuck with the theme. Were in a tough position you and i. We know 2,000 and what went on in 99. At the same time its our job to report. Speaking of reporting, were going to have the opening bell and indy 500 winner Juan Pablo Juan pablo montoya. Here at td ameritrade, theyre always working. Yup, were constantly making thinkorswim better. Like a custom screener on your desktop, that updates to all your devices. And you can share it with one click. Wow. How do you find the time to do all this . Easy. We combined every birthday and holiday into one celebration. different holidays being shouted back to work, guys i love this times of year. For all the confidence you need. Td ameritrade. You got this. When you do business everywhere, the challenges of keeping everyone working together can quickly become the only thing you think about. Thats where at t can help. With the tools and the network you need to make working as one easier than ever. Virtually anywhere. Leaving you free to focus on what matters most. There it is, the opening bell bringing on this wednesday as we start trading a poor day on the market. Theres a look at the real Time Exchange at hq. By the way, that was juan juan pablo montoya. Were going to speak to him in about a half hour or so. The Innovative Device Technology did the honors. You got a good line up as usual. Its a good guess because the team has been unbelievable. My team. Just like your team. Katy spencer which i think shes fabulous. There are people behind the scenes. You do both for your show. Yes. Sometimes we even find. You know what this is inside baseball. Tiffany up 9 where i have kors down 17. 5 . Its been unravelled for literally, there was a nice spurt initially but fashion is so hard david. It really is. Expensive fashion, you got to be very careful because expensive fashion has not been a great place. Well the course was akors was a great stock to be in. Excuse me for interrupting you. How do you as an investor identify when the trends turn . They seem to turn. Her greenburg event, he did a lot of inventory work. There were inventory problems and thats what you have to discover. Its about inventory and he spotted that one about 50 points ago. You recognize where the inventory was. Thats what people have to recognize. If you can find inventory and whether tesla has inventory, theres always a way to discover inventory. Inventory is the vein of every accompany. Right. Once you have too much of it you got to then market down. Thats run and retail. Speaking of drugs which you did mention, the wall street journal discusses potential between the accompany. So they used an example, i think it was they used an example of a doctoring for pancreatic cancer and lung cancer. Lung cancer it does a lot better than pancreatic. Ive been watching the hepatitis c drug offering from one accompany verses the other and they get to determine. At a certain point theres push back. Its a big battle. We talked about this last week with the omni care deal we saw cbs do which is the power of the large buyers of drugs whether it be cvs or whether it is an express scripts, an enormous pharmacy benefits. I continue to think walgreens needs a pb. You have a meeting for humana. Have you seen cigna and etna . These were major tears. Everyone has ability to beat up on the drug accompany. In the meantime, the public has an insagsal and correct imperative to be as healthy as possible. I think to a certain extent when youre talking about humana or etna or cigna, theres been a lot of consolidation talk. You will find out in the same way you found out time warner. You think anthem also. People think they make sense together. And trust becomes an issue. Ive done some work on this. I think the antitrust would bless true players. We got two or one deals . I think two deals. This is much more fractured universe and i think they would allow three to be pitted against each other in the same way, its certainly better than a utility. Speaking of antitrust, we should mention reynolds america. They wont be able to close it for what seems like a few more weeks. The judge needs to sign the Tobacco Settlement years ago. Rental shares are up. A lot of questions on that deal. We know anti trust and enforcement has come to the floor in so many of the high profile mergers out there now are thinking we have issues. Its usual. We talk about large spreads. There are large spreads in those deals. People are looking at yesterdays transit actions and saying is it possible they will try to what will they try if anything in terms of their deal along with bright house making it the second largest and a power in terms of providing video and broad band to american consumers. Charter shares down a bit today. They were up yesterday despite pain well over nine times. I pointed out during the day yesterday a very high multiple for Time Warner Cable which was the needing interest. Although, its chairman is on the wires today saying we just werent ready to do a Time Warner Cable deal. That seems to have been the case. They were talking to them about doing the deal. At the finish line they didnt put in a bid pulling back. It would seem. That helped Time Warner Cable get a heck of a price. They saw ramping yesterday. Thats been going up for a while now. Tmobile i mentioned john legend because theyre a competitor with verizon. That had a big spurt at the end of the day. People feel this which you basically introduce altice. This thing is causing people to turn heads. People say why couldnt they buy tmobile. The germans invest tmobile. The question becomes at what point do they want out and who would they sell to we will see. Dish and tmobile, theres a romance there both sides seem to keep going. Comcast a parent accompany, this is back. Interest in that who knows . When i interview john ledger it is clear he has a great accompany. He has turned that accompany around. Ive not seen sprint turn around. Tmobile is up. Deserves to be around here simply because its done better. Yeah sprint listen i think they have done a very good job trying to get things moving in the right direction there. Theyre settled by an enormous amount of debt. By the ability to complete the tmobile deal. They have the control soft bank which controls 80 of sprints strategy in the u. S. He seems to have gone back to focussing on other things and saying hey, its your issue. Well deal with it. Its a spectrum position. Sprint has incredible spectrum. They just dont have the network. I find youve taken all these stories, its not done. Its not done. Its consolidation. I think the over the top story is not being done enough by us. All right. Well do it more. Ill do it more. Do we note it . Always a favorite of yours. Theyre doing a deal. It goes along with the theme youve been stressing for so long. Hey, you know listen show biz. Very very smart man decided were going to go with apple gate which has about 1,500 forms that work for it. Steve mcdonald started this thing and still works out of home. He always believed. He told me in the 90s that look nitrates, we got to get them out of bacon and got to get out of gmos. Theres large rallies all over the country. Dont forget neil youngs album is coming out. These are all part of a movement. Who mel hormel has spam. We always associate hormel with a product thats canned as can be. Stays fresh as the day it was canned. I think this is a water shed deal because theyre going to force a lot of farmers in this country to go organic and natural. Thats the way of the future. They got to get the ag business to buy in. The farmers are going to be dragged kicking and screaming into what the my len millinials want. Can they be here without having a Chemical Reaction between the bacon and spam and fresh, nice. You think mcdonald wins over ettinger and gets that stuff . I had chipolte and talk to me about the 80 different ingredients in a taco. Did you notice some of that is coming out . The color has turned out to be more artificial than i thought. Theres like a yellow number six and a red number. I remember Ronald Reagan red dye number two. I didnt know they were able to dye food so efficiently that we believed. We believe. Who knows, ketchup may not be red. Is soil and green really green . You know what that is. I dont need to tell you. He had one of the great art collections. He had one of the great art collections of all. Really . Zwr yes. A fabulous collection of french. He had a tremendous eye for art. I think that should be mentioned. A lot of people felt he was a great actor. He was more than that. He was. That wasnt a good one. I got to work on it. Are you talking about dathan . Yes. Right. He was good. We are seeing the russell a little weaker. Whats in focus today, of course, the retail results weve been speaking about all morning. Any word on any kind of break through. Investors keeping watch on that as well as the stronger dollar. Retailers higher on the mixed results. Lets take a look at the companies that reported today. Michael kors was the one with the disappointment. Off 18 . The accompany hit by stronger dollar as well as some rapid expansion. That hitting its full year results. Tiffany coming in with better than expected results after it lowered its forecast. Sales in europe and north america were stronger than expected inand designer shoe wear house coming in with good numbers. Shareholders responding and stock out 6 . The dollar at play today. This is putting pressure on the commodities era. Weakness and copper at a one month low as well. Lets see how to minors are doing today as the dollar continues to strengthen. We can see theyre under pressure just a little bit. Just turning higher. Also i want to note transit ports are looking good as well stemming whats been a steep slide in that group. We want to look at Home Builders because tool brothers came out with earnings ahead of expectations. We also had the Mortgage Applications numbers. That was due to a slow down in financing. Tool brothers coming in with earnings 2 ahead. The accompany again reported a slight decline in sales. The stock was up 1. 5 . Coming up on closing bell, we were going to be interviewing the ceo. Youre going to want to tune in today at 4 20 eastern. Right now the dow at the highs of the session. Up 51 points. Daiftd david, back to you. All right. Thank you very much. Rick joins us from chicago. Rick. Hi david. You know it certainly seems as though the global mojos dripping away a bit no matter what you read or what sources you talk to, everything seems to be rolling over Interest Rates and that seems to be at the epicenter. If you look at a two year note and go back to march youll see the rates spiked a bit. It makes sense. The federal reserve. Maybe you cant use the word transit parent and its a different form of communication to be sure. There is notion they may be normalizing rates. Thats taking hold of the whole yield curve again. Lets look at tens minus twos and open that chart to april 1st. You can see how its flattened around 149 now. Lets stick with april 1st. A lot of concise moves in the same time period. Look at 10 year note yields. Lets look at boone yields. Maybe they rose faster and fell more aggressively but the pattern is very similar. Lets look at the euro verse and the dollar. Very similar. As the mojo may be dripping out of parts of europe we seen certain economies doing better but all in all the weaker euro is going to help. Its going to get traction with the dollar and the fed issue moving the dollar in the right direction if youre looking for a weak euro. Lets see whats going on with the jgbs. Looks at the ten year in japan its rolling over from a similar fashion at a lower rate but maybe the most important chart of all goes to the notion how its trading in high correlations. It seems consolidation break outs are the newest technical single. Whether its 10 year note yields or months and months with dollar yen going back to december, that 120 defined the top. The minute they disappeared it popped progressively. Traders says its not over yet either. David, back to you. Thank you very much. Jim, i stand correct to the course it was heston not robinson turned into it. Its a duo. Right. All those great movies. Omegaman. And then the planet of the apes. 14 million shares has been added to the s p. Boy, that stock is you know we just sold that thing and got very discouraged. Nope. Were going to take you back to the code conference in a bit and check in with carl. Hell have a spotify interview. We got a lot more coming up. Stay with us. Automotive innovation starts. Right here. With a control pad that can read your handwriting, a widescreen multimedia center, and a headup display for enhanced driver focus. All inside a redesigned cabin of unrivaled style and comfort. The 2015 cclass. At the very touchpoint of performance and innovation. Time upon a once people approached problems the way same. Always start at the starting. And questions the same asking. But that only resulted in improvements small. So we step a took back and problems turned these insideupdown to approach them newly. And thats when we it saw. Garbage can create energy. Light can talk. Countries can run on jet engine technology. When you look at problems in ways different you new solutions find. Amazon announceing its planning to hire more than 6,000 workers. Amazon says the new employees will kick back and ship customer orders. They spoke to many of those who work in the centers and certainly, they are physically demanding jobs. I dont think you mention that. 1213 miles a day youre on significant time restrictions. We watched that. My father says its slave labor. Its not that. My father was 92. Worked until the day he died and said i dont want to work for amazon. It is hard work. By the way, when they want to hire theyll line up. They go to those towns and pay better than minimum wage. Like everything theres two sides to this debate. Its hard work and theres plenty of people that want it and happy to have it. Were hearing this from post mates. Theres jobs now, amazon is a full time job but people in the country will work for far less than a use to. I understand the minimum wage. Its a big increase. They are in high quality jobs. Right. They arent high paying jobs per say. Those people were being worked. They wanted to jobs. There were no other jobs. Those people were talking about what sounded to me like the way we use to hear people work in a coal mine much less dangerous. Just with anything to put dinner on the table. Thats what you got to do. All right. Next its stock trading with jim. Well have a lot more after this. More and more, data is visual. In fact, the number of mris has increased by ten percent a year. And a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. Because its so challenging a Research Project is teaching ibm watson to see. In the future, it could help clinicians spot key patterns quickly and precisely. Ibm watson is working to make healthcare smarter every day. Time for stock trading with jim. David, you had me thinking and during the break we work like banchis. How about watches . People worry about fossil watches watches. What are they really worried about . Their smart watch. Something got cancelled. Im telling you youre going to start seeing this over and over again. Youre going to see this watch, cut everything but the watch. Unimpressive. This watch is beginning to cut into kors fossil and movato. Those are expensive watches and those watches are dumb. This is the smart watch. Guys, cut the chart and focus on the watch. So smart you cant even see it. I have it set so it lasts for 28 straight hour david. Its a dark thing on your wrist. I got my email. Yesterday i was speaking to my daughter. Saying yes, thank you, no thank you. Still on different sides of this. When i go out i got a fundraiser. I know we got on tonight. Im so busy interrupting you i dont. Listen to me my mom would say youre a good boy and i got lessons to learn. You do not. Real quick. Coming up michael kors and tiffany. Were back after this. Good morning and welcome back to squawk on the street the second hour. Live from post nine here at the new york stock exchange. Carl, its the night of the code conference in Southern California and a very big day, carl, over to you. Thanks, so much, simon. The conference has become a bit of a touch stone for anyone in tech and media and judging from the line up this year is going to be no deferentifferent. In one hour, mary is going to roll out her trend report. Later this morning, the buzz feed ahead of operations for apple. You might recall this conference last year eddie queue of apple gave us our first clues about the iphone last fall and the apple watch a couple of months ago. Well talk to fisher. Theyre a parent accompany. Well talk about what that means for tech in the industry. Guys, back to you. We are jealous. Wooefrl see you in about a half hour hour. Were up on the dow. The dollar slightly higher. Hour biggest move. Research and steven. Even youve been telling your clients to buy the debt. Would you still say that given the resent action weve seen over the last 48 hours or so . Were still constructive. We actually think the economy is going to pick up some steam the second half of the year. The winners. The winner so far. Were pretty happy with how things are playing out. I think from here it is going to be a bit more difficult in the u. S. The earning story isnt what it use to be with the stronger dollar. Theres better opportunities in europe. Steven just said good news is bad news. I dont know if i agree with that. The idea we get better Economic Data and the fear st. The fed is going to move closer to the Interest Rates and thats scary. At some point theres going to be an adjustment in the markets. I think bonds are overvalued and i think bond deals are going to go higher as the fed, as the markets begin to price in more aggressive fed. Frankly, i think theres descent underlying momentum in the u. S. Economy. Clearly, labels are tightening. Weve seen inflation pick up this year, sarah. I think the fed is going to go this year and next year the story is more tighter monetary conditions than is currently priced in and the equity market is going to have to deal with that at some point. Friday were going to get a second look. Its going to be ugly may be negative. Do you think neil, that the market with react to that . Yes. Weve brushed aside temporary factors but isnt that a concern for bulls like you. I think gdp is a poor investment strategy. Dont think about it mechanically. What you should think about is underlying trends. Jobless rates are low and employment is expanding and inflation is picking up and bank lending is rising. I think thats how we should be thinking about the world. Consumers are buying homes. Theyre buying cars and going out to eat. I think the bears are really relegating themselves at this point to worry about whether consumers are buying tshirts and boxer briefs. Its amusing, quiet frankly. Both of you are coming back to the potential problem here is the fed raising rates. I dont think its a problem, i think its going to be a distrak. The market is going to be volatile around that. We think september because the economy is starting to pick up. Lets focus on the positive within that and weve had that for several years. The issue is theyre nervous about what happened alongside them. My question i was going to ask you the whether or not, it would appear whether they can negotiate their way through this. It will be just one rate rise and there will be very very few after. Youre shaking your head. Were going to walk through this without any accident happening. Weve never seen a situation where the fed is about to raise rates with the term premium on treasuries meaning that investor investors are not being compensated. I think that there is a more of a repricing in the treasury market and thats something janet has been talking about, the notion when the fed goes youre going to see a sharper reaction. They can talk down but to me, i think were setdingting ourselves up for a small market now or a much larger one later. Multiples tend to rise in periods of high Interest Rates. Were comfortable. The only encounter argument to that ive heard that sort of makes sense this that equity evaluations are already historically high. Why do you have confidence they can keep going higher in this kind of environment . Theyre in line with history. I think theres an earning story thats going to play out in 2016 that can take equities higher. Youre right. The u. S. Is not looking at periods of excessive growth. Sectors Like Health Care financial, still growing double digits in a world where growth is becoming more difficult. Three best performing groups in the s p is Technology Health care. Good to see you both on the markets this morning. In the meantime retailers moving in the opposite direction today. Tiffanys beats in the stock is up sharply. Different story for michael kors. Sales growth for three and a half years. Those shares plum meting down 20 . Joining us fresh off the Conference Call is the retail analyst. Oliver, what did they say . Hi simon. Well, comps were weaker than people kpmtexpected. 5. 8. The hand bag sector could be experiencing moderating growth trends. Previously tourism was a negative tim pact negative impact as well as watches. Some shipping delays. They really revealed a lot of different. We see a tail of two stories. Right. Just to come back to kors. We halved in value the 98 we had at the beginning of the next year. If you reduce the distribution you create some scarcity within the product. Maybe this is a buying opportunity. When you see a big franchise like this do you buy, oliver . Well, we like the long term picture here. We have a performed rating on the stock. As we do survey work globally we think the brand continues to resinate. That being said, retail is momentum. As they produce the first negative comp this is really a potential penalty box issue for the stock and investors will look and need to see a better Inflection Point because of the fear factor in the stock today. I want to ask you about tiffany which is going to opposite direction seeing a nice gain after better results. Were the expectations too low on tiffany because of the stronger dollar and the impact that has on the flag ship store which is relying on Tourist Spending or is something going right to make this a good long term value . I think both are true, sarah. We saw a mixed holiday print for tiffany. Therefore, this number especially the positive americas comp and positive asian comp were seeing weakness. What i like about tiffany is also the Product Innovation story. The tiffany tea collection. So you know bucking the trend and giving the your euro comp plus 17. They were able to benefit from the change of flows. The stock is still down despite innovations. The stock is down for the year. Where do you think its going to go from here . I see steady growth opportunity. I think the guidance is achievable. Tiffany is focussed on the Fashion Jewelry category which is a lower price point. Thats a Great Campaign for them. Although the long Term Customer Relationship Management and this diamond space is very attractive. It has elastic with bridal. If we think about michael kors we have to acknowledge the watch space load. Thats something michael kors is kind of looking at and looking to compete harder. Is that the apple watch youre referring to there . Yes. It is. So you think theres a direct correlation with whats happening. I think whats happening is a lot of consumers have interest in the apple watch as a whole and this could be impacting accessories at large. Watches, in particular, how to think about this and consumers and retailers. Tiffany pointed to better results, specifically in some of its watches and some of the new collection. As we talk about kors and tiffany, the Common Thread is ses accessories, jewelry, hand bags. We talk about weakness and apparel, for instance strength and athletic wear. Where do assessly ris fit in . They have slowed a bit. I would rank beauty as my top sector idea. I think watches around 4 and hand bags today, michael kors spoke about 3 . If you think about tiffany and theyre collection, they have 1 12 of sales as watches. You do have to dissect michael kors as tiffany and the prices. 2,000 verses 250350. More competition at the lower. It would of the two say 35 years, which do you think is the better . Well the global story at tiffany is really working right now. We had upper forms on both but the penalty box issue with kors could keep the stock cautious for now and i think the motions will continue. Oliver chen joining us there. Shifting gears from inbdy car to nascar hes done it all. Juan pablo montoya. Mary thompson is live with the indy 500 winner. You know the first thing i want to ask you is this is the second time youve won to indy 500. Whats changed in 15 years in indy car racing . In my life a lot has changed. When i came back to indy cars it was exciting. At that point i lived everything in racing. Indy car is really good racing. Its a good balance between nascar and formula 1. The cars are really really fast. So i want to ask you, you were one of the most decorated drivers now in history. Youve had great cross over success with formula 1, indy car racing and nascar. To what do you contribute the success . How do you manage to steer through all three different types of racing . Its hard to say. I just work hard at it and adapt to things that quickly. To be back in the verizon indy car series and winning, it was special. It was the first indy 500 for them. For my kids having them there, it was really really cool. So lets go back to indy car racing. Theres been a lot of concerns it isnt as popular as nascar. If you could wave your magic wand how would you increase the audience . You say its the most exciting racing. How would you get that across . I think people are seeing it. Tv is a big part of it. If you go to the streetcar races, we had probably over 300,000 people there in the stands. It was an amazing show. I think what we show guys is that intensity they saw at the end of the race thats every week were on the track, everywhere we go you have that and its really cool. I have to ask you, there were a lot of concerns about safety go into the race. What was going through your mind . Were you concerned about going airborne . Do you think about that . The best thing is they said we gave you a lot of air time. One last question. As an International Sports star todays headlines are concerns for fifa. Whats your reaction when you hear that . Do you think thats a real problem in International Sports as a whole . For me, as an athlete, you dont want to here any news that dont relate to what happens. You dont want to hear indy car news. You want to know who played whose playing somewhere and who won. As a sport fan you dont want to be taken to things about whats good about the sport and focus on the wrong stuff. One last question. Whats next for you . Youve done so much. Going to detroit. Its a double header. Its my bosses race. He organizes the race. Theres a lot going on. All right. Thanks so much for stopping by and congratulations. Thank you so much. Weve been speaking obvious, with the two time winner indianapolis 500. Coming up on the show kara will join us live from the code conference in california. A big day here on squawk on the streets. The code conference is underway now. Theres a lot of talk on the ground about the changing media and content landscape. John is tracking it all. Emerging platforms have been a key theme for 2015. My kids know two things. Does more people under the age of 25 watch youtube other than cable channel . Its changed da mat cli. It use to be a portal like aol and yahoo. Then google as the Search Engine told us what was important. Now our friends tell us whats important. Look at the changes in classical and television its still a solid business. The growth is in over the top video. He did a survey at the end of last year and said between the ages of 1417 who are the top five people who influence you and guess what its not Justin Beiber or taylor swift, its five youtubers. So thats a big deal. All right. Lots more ahead. Live from the code conference the ceo of spotify, flip board and fox media all coming your way. Were back after a quick break. Every Auto Insurance policy has a number. But not every Insurance Company understands the life behind it. Those who have served our nation have earned the very best service in return. Usaa. We know what it means to serve. Get an Auto Insurance quote and see why 92 of our members plan to stay for life. With the dow up 92 points lets send it to rick. Thanks simon. I would like to welcome my guest david and david, this is a real simple one. We have a theme throughout the country whether it impacts cities or states or even areas like puerto rico. Pension under funding and general financial distress in many of these areas, many heading to court with respect to chicago and illinois. Your thoughts on how this is going to all play out. I think its going to play out over a long period of time. Weve seen decisions come out of detroit and stockton regarding pension issues and compromising those issues. However, at the same time unions have decided to dig their heels in and says the state doesnt allow for pension appeal at all. I think over time the pensions are going to grow. If the states dont rehabilitate themselves well start to see additional cracks. Again, i think the most important point is not its not an immediate issue. Well continue to see news about the issues and wranging ling. We wont see an amount of chapter nine filings, all the sudden. I understand. Now, lets look at it from a different angle. Theres a lot of conflict of interest embedded in all of this. Whether its the speaker of the house who by the way has held the post for all but two years since 1983, democrat of course or other judges in the process under legal proceedings. The conflict i see is also involved in the same issues theyre dealing with as justices or politicians. Comment . Rick, i agree with the point of view. Ive never been a politician. With therespect to the judges i use to be a practicing lawyer. I hold them in higher regard than the place their own interest ahead of the general loss. Im not saying any of them are. Im just making a blanket statement many of the people trying to fix the problem are also part of the problem. Are they not . Certainly. Then well stop there. Well stop there. My next issue, we have a multitrillion dollar billion dollar home in chicago, in particular. Im not sure how this is going to work out but should investors that own in some of these areas or maybe thinking are good buys in these areas, what should they pay closest attention to as this unfolds. I think they need to see how much liquidity there will is in the situation without having to go back to the markets. Puerto rico has been dragging out for quiet sometime now. I know thats not the same as some of the cities you mentioned. Nonetheless, at this point, the folks that remained in the investment have done well thus far. However, we may be getting to the breaking point there where liquidity may run out. Unless theres some form of rescue financing thats going to be done by abunch of hedge funds. I got you. David, let me stop you there. I like what youre saying. Lets make it a little more peculiar. It seem toss mes it seems to me this speaks to a bigger issue. S p changed the aaa tra tus of the u. S. Government not that many years ago but in the end they have an inherent flaw. No one wants to pull away the ultimate. Your final comments . Youre absolutely right, rick. I dont follow agencies that closely. The market does. For that reason i have to. As we saw in chicago, the difference in pending pension liabilities is vast and s p came out one way and moodies came out another way and you can say somewhat its selfserving for s p to rate it favorably so they get additional business. Theyre not going to get anymore chicago chicagorelated business. Its an issue. There is a lot of intertwining here that we really cant extricate some of the players from. You know ever sense the credit crisis a lot of fingers get pointed to a lot of areas. We dont seem to learn our lessons very well. Maybe the better way to go over regulation and things like they control how many agencies are approved. Maybe man rules. Maybe we should get back to basics. If you want to invest you take your chances. Is that something that makes any sense to you . I talk to investors and get emails from holders from all over the country and it certainly seems as though the areas that the government picks to help guide their Financial Decisions are not doing them any good whatsoever. Rick for the first time were seeing some serious destressed signs in municipals. That will continue. The form youre looking for is going to take a title wave of filings to go ahead and trigger and we wont see that for another five to ten years. Like we learned in greece david, be patient. This stuff stretches on. Its going to have an epilog were probably not going to like. Lets go to carl at the code conference. Thank you, david. Thanks so much rick. Rick in chicago. We are back at the code conference. Code 2015. The big news is the anounment revered digital is being required by vox media. Who better to join us talking about the code walt and cara join us here. Good morning. Guys. Good morning. Congratulations congratulations. Thank you. This was big news. Yes among reporters. Who else cares. I think its being watched closely on the street as well. I think the obvious question first is why now. Well, you know its interesting. The pace has changed drastically and a lot of these companies are getting enormous fundings. You have to think quickly when youre in a content accompany if you want to be with a bigger player and raise more money. We started that round. We dont mind change and change very quickly. We had a number of options but this secures the future of what we started at recode and even going back to when we were doing all things over the previous decade fox has tremendous resources that would have taken us quiet a long time to build. Its an accelerator for us. At heart, you announced it at the conference. Are they buying a conference accompany . You cant think of it that way. What is nbc, any of these companies . Is it a broadcast accompany, digital accompany . We have a conference business but it wouldnt do as well. Every media accompany has to have a lot of different Revenue Streams streams. This will continue. Thats just really interesting. How you combine old media with new immediate whymedia in an exciting way. You have to think about changing every minute. So the code conferences will continue . Yes. And its actually expand. Recode will continue. All of the vox properties continue and we think it all compliments each other. One last question before we move on. Vox is good at it. So is buzz feed and a lot of the others. Theyre good at figuring out new advertising things and content management systems. Thats not something reporters use to have to think about. You just, both of you just won an award from columbia for sbre entrepreneur. You cant get stuck and say that much and no further. This size and no bigger. This solo path and no partnering. Everything she just said, you know we did this deal based on our executives at the view of two years from now, three years from now. It wasnt about the next three months or next six months or next year. Big picture, we played sound from evan last night. I think hes probably correct in that. Hes thinking about it. If youre building a business you have to think of all possibilities. I think he does understand that a lot of these evaluations are going to be difficult to work up into. That said theyre very exciting properties. Which way do you go . Do you invest in the future . Like elizabeth went on about, you need to invest in the future or pull back . You have to be ready for anything. I agree with karen. I agree with him. I think there is a little bit of over exuberance here. I dont think its 2,000. Very carefully, use the word correction. He did not say oh its a bubble and theres going to be another crash. The word bubble has been in headlines but he did not use that word as i recall. That is correct. So yeah i think its sensible. Yoj its across the board or anything. Its pretty mature though. He was talking about his own evaluation. The conference is coming on the heals of your deal, verizon, aol. We got charter, Time Warner Cable. Those deals are all in the same. They are. Do you feel were in the thick of it and cooking with gas . Theres going to be a lot of deals. We wrote about fwittwitter, flip board talking to twitter. A lot of that discussion going on. Not from just weakness but looking at the landscape and saying hey, you know consolidation would be better. Or not. Well see. And then theyll break it up and consolidate. Youve seen this and written entire books about this written the other way. Absolutely. Its interesting. I think the one thing you have to be dynamic in this economy. Things change. Who could have predicted snap chat three or four years ago . He was on the stage as a tiny player. We just paid attention to him at the time. No one thought he would be talked about as a rival to facebook. They are. We started using the term in 2003 and launched the conference and said every industry is going to be effective. We have gm. People spend after watching cars and and. They have a car here which if you plug an iphone or Android Phone in the apps of the phone go on the car screen. Were going to see a ton of that. We have facebook apple, going lt google snap chat twitter. We have lots of things that are tech oriented. At the same time we have to Pay Attention to where this is going. Im thinking back to the big headlines last year. Telling you the best pipeline and you driving a selfdriving car. Yes exactly. What do you think is going to be the headlines this time around . Theres going to be cool stuff from our speakers. I think go pro is an exciting accompany. Tonight we have the people that created empire. We always Pay Attention to media including entertainment which is very, as you know very intimately tied to social and digital. So heres the biggest hit of the year. With some social gain. Smart people have a tremendous social gain. One other thing thats interesting is hugo which is the big rising phone maker out of china. He came from google and his job is to get the chinese branded phones all around the world. The ceos of slack and tribe, you want to know what its like to be running a hot start up. All those are start ups that have a huge promise. We will talk about the bubble and evaluations and talk about joyces you have to make and shifts you have to make. Our relationship continues. Im on page 105. Good seeing you guys. Well see you. Simon, over to you. Yeah a big outcome as well for the code of conference. For the moment thank you, carl. Just want to take you over to the department of justice here in new york. Attorney general lynch and director of the fbi set to announce more details about the investigation into fifa which of course controls the world of soccer. Youll be aware that the United States is charging 14 in connection with corruption allegations that go back almost a quarter of a century, two generations of officials, seven of those were arrested earlier today by the swiss by the request of the fbi and department of justice. Others are being charged. We are waiting for the News Conference to begin. I aim to you. We are going to get the details in a few minutes. As we saw this morning, Early Morning raids, seven officials arrested there. Also new Important Information coming out of the department of justice released today including the fact that chuck bl the head of the region thats the region of global soccer that the u. S. Participates in. He himself pled guilty and that guilty plea was sealed for a number of years back in 2013. He forfeited 1. 9 million of his own money and agreed to a second payment at some point in the future apparently blazer was cooperating all along with the u. S. Officials as they investigated this. Were seeing the confluence of the u. S. Department of justice and the fbi as they investigated alongside swiss officials. A fascinating moment for global soccer ahead of the new world cup in gutter 2018 and russia 2022. Swiss officials are set to be investigating how those two nations were able to land those two world cups. Such an important business and whether or not there was bribery at the root of those is going to be one of the angles. Yeah and i want to point out here the difference between whats happening. The d. O. J. And fbi are investigating allegations these guys in south america and north america were paid 150 million in bribes for sporting rights. You have the second investigation by the swiss, themselves here where theyre looking at whether the votes were rigged on who would host the world cups. I think for many football fans is really the eye of the storm. It almost feels as if the dominos are fwining to fall with now nations investigating where as fifa was left with its own devices before. Clearly, closely coordinated here between the u. S. And swiss side. Theyre investigating different pieces of this. Its all a the conditions are to be dreadful for soccer in the summer. Theres been question about whether or not theyll have to move the entire cup schedule to winter to accommodate having the world cup in the designation and of course, the question is about russia involvement and the awarding of those two decisions. Fifa has been immuned from the scandal in the past. There have been allegations for years. This is the first time weve seen touchsuch a massive Law Enforcement. If you look at the indictment that came out this morning, you get a sense at the truly global conspiracy. You have people around the world so the complexities here are pretty intense. Nonetheless, you see Law Enforcement moving quickly this morning and well see where it goes. And the attorney general in the statement that was released did describe the allegations of skrupgs corruption ramp rancic. It looks like shes taking the podium here in new york. Lets listen in. Good morning everyone. Before we begin with todays announcement i have a comment to make on the situation regard. As the attorney general i am protecting this nations Civil Liberties while keeping our country safe and secure. Unforchau in thely, the house of representatives have passed the bipart son bill that has extended the tools about other aspects of the governments ability to protect data. Without action from the senate we will experience a serious laps in our ability to protect the american people. Today i join the president in urging the senate to work through the current recess in order to make sure we can continue to appropriately safeguard the country and protective citizens. For todays announcement i am honored to be joined today by the director of james by the fbi and here in the Eastern District of new york and chief of investigation Richard Weber as the irss criminal investigation division. We are here to announce the unsealing of charges and arrest of individuals as part of our long running investigation into bribery and corruption in the world of organized soccer. Many of the individuals and organizations well describe today were intrusted with keeping soccer open and assessable to all. They held important responsibilities at every level. To organizing the world cup. And to protect the integrity of the game. Instead, they corrupted the business to serve interest and enrich themselves. This department of justice is determine to end these practices, to root out corruption and bring wrong doers to justice. The 14 defends charged in the indictment include high ranking officials of fifa the International Organization responsible for regulating and promoting soccer. Leaders of regional and other governing bodies under the fifa umbrella and Sports Marketing executives who according to the document paid millions of dollars in bribes and kick backs to obtain market rights to International Soccer townment tournaments. The indictment includes charges of money laundry conspiracy spanding two decades. Fifa and original bodies make money in part by selling commercial rights to their soccer tournaments no sports market companies. Often through multiyear contracts covering multiple year additions to the tournaments. They sell the rights downstream that is to other tv and broadcast net wovrkworks to corporate sponsors for significant sums of money. Beginning in 1991 two generations of soccer officials including the president s of two regional soccer confederations under fifa one being the confederation of North Central american and Caribbean Association football which includes the u. S. And the south american football con fed which represents organized soccer in south america used their positions of trust within their respective organizations to so lit it bribes. They did this over and over. Year after year, tournament after tournament. In just one example. In 2016 here in the United States, we are scheduled to host the centennial edition of the america. The fist time that tournament will be held in cities outside of south america. What should have been an expression of International Sportsman ship was used as a vehicle to line executives pockets with bribes totaling 110 million. Nearly a third of the legitimate cost of the rights to the tournaments involved. The first time the tournament would be held on the african continent. Even for this historic event, fifa executives and others corrupted the process. The indictment also alleged corruption and bribery extended to the 2011 president ial fifa election and to agreements regarding sponsorship of the Brazilian National soccer team. In short, these individuals through these organizations engaged in bribery to decide who would televise games, where the games would be held and who would run the organization overseeing organized soccer world wide one of the most popular sports around the globe. While at least one fifa executive served as president without pay, there was little involved as he alone is alleged to have taken more than 10 million in bribes over a 19 year period and a mass fortune from the gains. In many instances defendants and cocon spear cocon spiriters used the banking and wire facilities of the u. S. To distribute bribe payments and plan to profit in large part through emotional efforts in addition to the inindictment we are also insealing the charging instruments of four individual and two corporate defendants who have already pleaded guilty to their involvement in racketeering activity and other criminal conduct. The former general secretary and a member of the fifa executive mitt committy was a beneficiary. All told these defendants have agreed to forfeit over 150 million in illegal profits theyve made from these crimes. We are also announcing agents have began a search warrant in miami florida. We have already reached out to representatives this morning to ensure people at integrity know we stand ready to work with them to reform their practices in the wake of the actions we are taking today. We are also in the process of seeking the apprehension. All of the defendants abused the u. S. Financial system and violated u. S. Law and we attend to hold them accountable. Going forward we have the opportunity to work with partners around the world to bring additional corrupt individuals to justice. Todays action is a testament to the tireless efforts to federal prosecutors here in the Eastern District of new york. I want to thank all of the anlts, Law Enforcement who contributed their time and talents to the investigation. I also want to recognize u. S. Attorney for the leadership i want to express my appreciation for the cooperation and the assistance that we have received from our International Partners particularly the swiss authorities. I want to make clear that the defendants arrested in zurich this morning have a right to a fair and impartial extradition process and they will receive a fair trial if they are brought to this country. At this time id like to introduce the current u. S. Attorney for the Eastern District of new york kelly curry, who will provide Additional Details on todays announcement 6. I know you see the attorney general laying out the case that the fbi has been working on against those senior members of the fifa organization amon javers joins us our own reporter from d. C. We should mention that the organization itself fifa like a very large ship appears to sail on and were expecting if it hasnt happened already, that sepp blatter will be confirmed for a fifth term as the president of this organization. If you just look as an ordinary soccer fan, it almost seems as it these people became more and more blatant in their activities to the point that people couldnt believe that russia and qatar had won the world cup and the dominos begin to fall and the fbi is able to build the case. Fair comment . You talk about sepp blatter. One of two Big Questions here is what happens to sepp blatter. None of the documents mention him by name. Hes not being charged, hes not part of this. But hes the head of the organization and has been for over a decade now. The question is what will happen to his leadership here. There is one challenger to his leadership. But traditionally hes been able to lock down that fifa governing position for years and years. Whether or not hell be unsettled by the events of today is a really open question at this point. The other big question here is what happens to all the corporate sponsor who is pay so much money . You heard Loretta Lynch, the u. S. Attorney general talk about Sports Marketing firms. The u. S. Companies involved in paying for those sponsorship rights, the marketing rights. All of that is an open question. What the reaction is of all of those companies who pump all that money into the world cup every four years, whether they will pull some of that money, pull that sponsorship back. Or whether soccer is simply so big on this planet that those Companies Feel like they have to be involved no matter what. Amon javers thank you very much from washington. Joining us by phone to discuss about this renowned sports economist and Smith College professor, Andrew Zimbalist. We heard u. S. Attorney general Loretta Lynch laying out the charges. She said the 14 defendants corrupted the business of worldwide soccer. Is this the day of reckoning for fifa that was long overdue . Well certainly long overdue. And its one day of reckoning. Its very positive step forward. I think that people who have been following fifa and the world cup have known for many years it was a corrupt organization and it was bribery going on every single day. The selection of russia for hosting 20018 and the selection of qatar in 20122 made no logical sense whatsoever and evidence has been out very clear evidence is out that those votes were bought. So this this is a positive development. I would hope that it leads to them indicting mr. Blatter, soon. Hes due to be reelected on friday. On friday. Yeah. Which is sort of hard to believe, but whats going to be the Ripple Effect here andrew . Obviously this is United States government bringing the charges and the attorney general laid out why this is a u. S. Issue and what sort of deals and alleged bribes were made in the u. S. But what about other foreign governments and other charges potentially by some of the marketing firms and some of the corporate sponsors . Is that going to happen . I think that europe will jump on board. Switzerland has an investigation ongoing. Uefa the European Branch of fifa, has spoken out against blatter. Very forcefully over the last several years. The problem has been that there are over 200 organizations or states that belong to fifa. And blatter buys their votes off. You have a lot of members of fifa who might have 10,000 or 20,000 population there in their entire state i, i just let me just interrupt you on that point. Because sepp blatter isnt here to defend himself at this stage and the charges we have from the fbi and the attorney general dont include him. Let me ask you and i prefer to move on. Let me ask you a broader question, why in this instance its the u. S. Authorities starting the action or the swiss authorities. Neither of which are countries that are likely to end up hosting a world cup. Isnt it will case that other people particularly in europe have stood by and allowed this to happen for fear it would cost them the ability to host in the future . The United States is one of the candidates for 2022. United states hosted in 1996. The u. S. I think hopes to certainly, the head of u. S. Soccer hopes to host the world cup in the near future. The 1996 world cup in terms of attendance was the most successful. And a proper world soccer organization, a properly governored fifa would be happy to have the world cup in the United States. Not only because of the exposure on world television. But developing soccer into a stronger sport in the United States is very much in the interests of fifa. So i disagree with the premise of your question that the United States is not a likely host. But the United States has a that will act independently of the politics of the nation. What i was asking you about, really was the politics of the United Kingdom or france or other places that would seek to host and would make the political decision not to investigate. I think that, i think that youll see more european nations jumping on board with with the swiss, swiss investigation. And more willing to participate in any action against fifa. Thanks for jumping on the phone, on the breaking news Andrew Zimbalist is a sports economist and a professor at sports college. Lets send it out to jon fortt at the code conference with a look at what we can expect in squawk alley today. Hey, simon good morning. Deals and tunes, we have got flip board ceo coming up rumors about a deal with twitter. Try to figure out where his head is. Spotifys ceo is going to join us for a rare interview and the ceo of vox, which just bought the Parent Company of re code will be with us to talk about content. Competition and where all thats headed. Coming up on squawk alley. [ male announcer ] legalzoom has helped start over 1 million businesses. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. Dont just visit new york. Visit tripadvisor new york. With millions of reviews and the best hotel prices. Book your next trip at tripadvisor. Com today. When youre not confident your companys data is secure the possibility of a breach can quickly become the only thing you think about. Thats where at t can help. We monitor Network Traffic worldwide, so we can see things others cant. Mitigating risks across your business. Leaving you free to focus on what matters most. Good morning, it is 8 00 a. M. Here at the code conference in Rancho Palos Verdes california, 11 00 a. M. On wall street and squawk alley is live. Welcome to squawk alley for a wednesday, joining us today, ed lies managing editor at re code, part of vox media. The ceo of vox will join us to talk about the deal and the managing partner at ggv capital with us as always jon fortt as we look over the pacific ocean. Something we dont get to do on every show guys good to see you. Mary meekers slide presentation from Kleiner Perkins is just now hitting the tape. Weve had a chance to look at a few of the slides so