Transcripts For CNBC Squawk On The Street 20160421

Dime. There is a lot to get to this morning, jim. What do you want to tackle first . I think we have to first just talk about the fact that this is the overwhelming day. People are going to be making judgments and theyre too quick. People already decided to hate verizon and hate travelers. I think the most important this evening im seeing is the continued increase in oil, which is driving stocks, and a return to something we havent seen in a long time, which is if you dont do as badly as we worry about, your stock goes up, american express. Thats the classic example this quarter, right . When i go over what they said last night, they had a jump of 5 to 6 new Revenue Growth and they added new cards. Frankly, they just didnt screw it up. Verizon and travelers have been perfect. I cant speak travelers, i can always speak verizon. Verizon shares were up 12 this year or more. Its been a power house in what was a difficult period for stocks. Its still been benefiting. As for the quarter, it was okay. The revenues came in below at least some analyst estimates for what they would be. Ebidta margins were fine or better at 60. 5 . Subscribers and post paid, everything looked to be pretty decent to jims point. The call i was on but it was just their prepared remarks. Want to get to the q a and hear about go 90, their streaming service and what might be down the road. Yahoo want to hear about the union negotiations. You know, want to hear a number of other things. There are plans on bond issuance to get back to where they were in terms of their Credit Rating prior to the huge vodafone debt issuance they did. It was okay. Lets contrast that with Union Pacific. You look at Union Pacific and frankly there isnt a single line that is good at all. Calls down 40 . The stock is up because they cut so much cost. This is the railroad version of american express. Its so bad its good. Its the last bad quarter. This is whats been driving bank of america. But driving jpmorgan even, goldman sachs. And the consistent, whether it be cocacola yesterday or pepsico, which was fabulous, people dont want those stocks. Utilities. They dont want those stocks. They Want Companies that report really bad numbers and cut costs so amazingly if anything good ever happens, then you will see number go through, which is why united is interesting and as oscar munoz. Because they dont have it yet. They do have passenger revenue, miles down. Munoz has been dealt a bad hand. Hooves dealt a double bad hand. Meet immediately he has a heart transplant, fortunately successful, he has a successful challenge to him from people from the outside out of nowhere. Do people want that . No. They wouldnt want southwest. Revenue growth is strong. I dont know what the stock is doing. I think in the early going it was looking up. This is an Earnings Period where i think people are completed confounded. Arguably the weakest banks bank america in terms of numbers. That stock sits best in terms of percentage. All right, so youre making the point which is people are going for the worst, hoping they go from worst to first yes, freeport every day. A lot of this is because people feel we got some edge, we got oil. Underarmor is saying kevin klein, the First Quarter equals all of china. Steph curry. You think hes big here . You think hes big here . Theyve got 1. 3 billion in steph curry shoes. Theres a shot of riyadh where the president is expected to take at least a couple of questions from the media. As soon as he does, we will take that live at the gulf leader summit talking about a number of issues from yemen to isis to iraq. But, jim, you look at claims today, again, lowest in 73, gm and the margins, theyre guiding in north america. Get those numbers when you get 4 gdp growth. I would tell you that these are numbers plus the unemployment plus where the bonds are saying, i am even saying, listen, things are better than expected. Theyre not much better than expected but they are better than expected than it looked two months ago when it looked like the end of the world. I think we should prepare ourselves for the fed to do something. It wasnt the end of the world but the underlying trends are what they were now except maybe to china that i know you argue is better. Im waiting. The los angeles call they said january february good, march bad. All im saying is we have a thaw going on, whether it be the ipo market, whether it be the fact that youre seeing oil up so much that you have to believe that the great crash of high yield Debt Financing markets are wide open. Look at the french based Cable Company in the process of buying cablevision. They were able to sell high yield debt and they were lining up for it. These guys are running a leverage ratio far above what anybody in the industry does. Amazing. What changed in your eyes to make it something i thousand would not be able to raise money for, people are clamoring for. But this is not anheuser bush. No, its not. I agree with you. And there was a period where we were focused on unleveraged ratios and it can cut both ways but then that ended and were back to where we were, high yields looking strong. Even companies you might question to a certain extent some of their underlying strategy. Bhps ceo made a statement talking about steel saying it was its always like that at a bottom. Its never because theres suddenly not enough and too much demand. The demand in china, 1. 3 Million Barrels more than we thought. When you look at the suv numbers that phil lebeau pointed out in china, china is doing better. Kfc, i know the holy cow. That yum corps, i wish the ceo would do the call after the numbers. Theres enough good in china. So i dont buy that. I buy the fact that thanksgiving are better. And it almost look the only place that its not better would be the places that were so pos probably not going o get the okay on this muscular dis fee. What people want are deep silicone they beat on revenues. Remember weve got honey well and ge tomorrow. Maybe thats the pepsico of industrials. Mabb that happens. Maybe. I do want to continue to focus in part on nongap records reconciliation. There are so many adjusted numbers that i think it is becoming more of a story and at some point you may season the Regulatory Agency seg the united, for example, they includes included maintenance business and they be cloo that was an important component of expenses. Morgan stanley had a list of companies where the gap is widest. Near the top is like a celgene, expaidia. Thats become being more of aing point. A lot of what i regards ak the lets go on but were going to keep a closer eye on that. Its an issue and it does get to the relevance of the actual numbers we are getting or at least working off of. Level playing field. You have some companies that are reporting thanks theyre doing. Were going to get caterpillar. It has always been like here, open kim own owe. They could use some kind of kind of a bit of an overload here. I will point out that network, communications and Cloud Service now, these things are still on fire. Hark back to yesterday, intel, where i still believe that theyre the two companies and one company is involved with the internet of things and involved with networking. They are so strong, its hard to believe that google could be disappointing. Another team, currency theyre still acting as if the dollar is very strong. That sets up for a good second half for a lot of these companies. Networking, if you gont have it, i mention that because microsoft is cloud, ent net, no longer pcs. Those are of house said who said lets deliver to the 399 compared to last year. They told us earnings were going to be flat compared to last year. You can see the stock is down 2. 5 . They are not giving revenue guidance, theyre giving ebidta guidance and sticking to it. They have employed thousands of employees to take on the work and they still see good momentum on sales coming in. So no Financial Impact in the Second Quarter unless it drags on. Wire line is not that good. Margins were good here. I think this is again part and parcel with this new world where it like, all right, tell me something i dont know. You got to just blow it away if youre one of these stant companies. And they did not. They did good. They did fine. A lot of guys and a lot of people have had a great run with verizon. There are some people getting short the stock heading into these earnings and pair it off with at t and long vz. Ive been talking to some people behind the scenes with this, dish versus directv. Talk about something thats not gap. Get affiliated with the nfl. Yes. Meanwhile, central action today, ecb, mario draghi says he sees rates at current levels or lower for an extended period and that risks to euro area growth remain to the down side. He said its essential to preserve appropriate accommodation as long as needed, try to keep alive the actions than he did first and the last month, this is a quarter, by the way, that has been completely dominated by how the linearity of the quarter has been. January okay, february, march good. March good. Europe. Ive never seen this. Mabb this is just the new world but every day seems how was yesterday . It was good, lets by the stock. How was the weekend . It was okay. Sell the stock. Honestly, it is day to day now. People are judging people on a day to day. And its also the earning. Id love to hear what the president has to say about this. Lets go to riyadh. Heres the president of the United States. All those guys working the mikes all that time and no audio. Well, we got a ton to say. Well way to see if they fix it. Obviously we want to hear what he has to say this morning, whether its about geo politics or oil. The i. A. Saying supply balance by nks yeext year. The United States, when you lose money on almost everything you drill, bakken no good. Wti is back up to 42, 43. Back to the president. About Gulf Partners being free riders and iran and saudi arabia should share the neighborhood. Im wondering if and your meeting you feel like youve eased any of those tensions if that was your goal and if you could point operation do you feel that the fact of matter is that friendship and cooperation thats existed between the United States and gulf countries has been consistent for decades. During the course of our administration and these are countries that have extensively cooperated with us on counterterrorism, on curbing the financing of terrorist activities. They are part of the isil counterisil coalition, that has made and as we come to this meeting in part because of the collective efforts of the members of the gcc, we have a new government in lebia that is very nascent but has the opportunity finally to organize itself in a way that woo havent seen in a couple of years. That would not have happened had it not been for the effective diplomatic pressure that was applied by all the gcc countries, as well as the United States and united nations. In yemen we now have a sensation of hostilities that allows us to build a Peace Process that can relieve the suffering of the people inside of yemen. That would not have had it not be the go so what is true between the United States and the gcc, sass true with all of our allies and friends, is that at any point in time there are going to be differences in tactics. And part of the goal here, as well as the meeting, is to make sure that in the on do we share a broad common vision of how prosperity and stability and peace are achieved in this region and how we counter extremist activity, but that we have knowledge of what each party is doing on an ongoing basis. I think it is no doubt true that when we entered into the negotiations with iran around the nuclear deal, it and we dont look away in their destabilizing activities and weve seen iran do what they were supposed to do under the deal and the threat of an Iranian Nuclear weapon is greatly reduced but what weve also seen and what the gcc has seen, is our tned cooperation, for example, interdicting iranian when the region is so fraught with so many different challenges is the need for more consistent constitutional liesed because the possibilities of misunderstanding increase when theres so much activity taking place. Ill give you one last example. Inside of iraq there are understandable concerns about iranian influence in the Iraqi Government at a time when the Iraqi Government is also critical for us fighting isil. It was or or important how do you fight against isil and and while acknowledging that are there problems as far as governor instability within baghdad, thats a reason for us not to withdraw but to get more involved in helping to stabilize areas like an bar where weve cleared out ice yil but the towns lef governing have been well, you can tell they have fixed a microphone but its clearly not the president s microphone. Theyre trying to get his sound from him from far away. Not really working. Well come back to this if they man and it that a little more clear and the white house points out they are launching new highlevel dialogues to adjust to low are oil prices as the saudis start to look to edebt markets. It would be an enormous coup for hover the underwriters are. I thought they laid like the 40 price i think because it drives out u. S. Pr they have a bloated expense structure and the fact is they could be great ow owes, i mean, they could make the Second Quarter for some company. Do you agree . Yeah. Even at selling 5 they said they could raise i mean, the numbers are astronomical. Wow. Geez, out of nowhere look, these are Strategic Issues the president is discussing. By the way, id love to see that prospectus. Think theyd really like to disclose stuff . I dont know. There are going to be some gap issues youd never believe there. Do you think drilling is one of those onetimeonly extense. When we come back, well gel get United Airlines exclusive interview with oscar munoz and new highs for 2016. Back in a minute. All right. Were going to take this straight to the opening bell, which weve been doing a little bit lately. But you know what, we got a mad dash. In fact, you might have time for two. Let me give you negative stuff about mattel. They were down 7 international. This is a tale of who has disney and who doesnt. Hasboro has disney and mattel doesnt. Mattel has reverted to its old ways, they use salesforce. Com. I dont know. Barbie down 7 overseas . Hasboro was larger than mattel. Mattel came back. Now theyre almost equal. There was a time for many, many years where mattel was far larger. This disney relationship, theres just more and more in the pipelines. More big movies. For hasboro. Yes. I try to talk about the notion that its so bad, its good. You look at Union Pacific. Coal was down 43 . Volume down 34 , revenue per car down 13 . Auto, largely mexico, good in terms of car load, but bad for revenue per car load. Industrial down 18. And look at this stock. What this says is if we can make this kind of money with this environment, what happens when china comes back . What happens when coal finally bottoms out . Thats how can you get this very counterintuitive move because otherwise you would think Union Pacific would be down 10 on these numbers. Sachs said they still think coal will remain ahead when they go to 16. They had powder river, which is actually the better coal. Lets contrast this with united. I mean, united did not do a great job. If you didnt do a great job in this environment in costs and you didnt blow away the revenues, then your stock is being left by the wayside. So i contrast Union Pacific with just miracle work are aers and , the dissidents, they have a point. I feel oscar was targeted before he got a chance to fix it. Thats true. He wasnt even on the job he was on the operating table. He was in rehab and they decided to go after him. When you look at the numbers you say, listen, maybe up need some help. In the interview he talks about these guys can add a new executive chairman but this is a tale of youve got to cut costs. When you cut costs and revenues are okay k transports are out of correction finally. But trucking has been a little gloomy. There is a claymation death match. Cummings comes out and says buy. Bear says sell, saying north america is going to be not good but piper went to china and piper is saying that there is continued improvement in china, this improvement in china story other than Las Vegas Sands continues to be another underlying current of the First Quarter. It was up for almost every single day. Yesterday it was down. American reasonable associates, operator of dialysis clinics. A biotechnical company celebrating its recent ipo. You mentioned a thaw in ipos. That that there was interest in it. Still 75 cold when the ipo market has been weak, when they when they got to thaw out the ipo market, they give away some these deal. Its almost like that the issue itself is giving a little away here. Right. And its just an extraordinary thing because, wow, i didnt think youd get a pop on that deal. But theyre giving you good prices. Retail, by the way, is continuing to be a challenge. But we got a number and this is a setup i saw you tweeting about the mall, the death of the mall. Death of the mall. But you know who is not in the small, who is stand alone . Tractor supply. How did you know . I pay attention. Tractor supply higher traffic, better Gross Margins and one of the great lines on a Conference Call i have heard Tractor Supply i told you it was going to be great again. This is my favorite line from greg sanford and a little help from mother nature. What does fan Stanley Works say about home depot . Mall, if youre in the mall, youre going to get mauled. With a u. And my accent makes mall sound just like maul. I want to get to viacom. Always good to do a little branding. Viacom and dish, viacom shares down sharply in part on concerns as of midnight last night, the viacom network, comedy central, nickelodeon, would no longer be on dish, they would be blacked out. Yesterday a Conference Call on which the ceo of dish made comments that were more positive saying last week i would say my impression was i didnt see a path with viacom. I think the tone on both sides for viacom and dish has been more productive through the weekend and this week so there actually probably is a pathway to continue carriage. I can tell you this morning, they are very close to a deal. You may see that deal see the light of today by the end of he can retrade a deal 100 times in ten minutes iffy he wants to try but if viacom is successful, as does appear to be the case in signing up dish for another longterm agreement, it will have signed up over the last year at t direct, charter, viacom, mediacom. It will have those networks on all the imagine platforms. Now, whether or not they can get the ratings to justify the advertising, whether or not theyll have has many eyeballs watch thos at the very least they can say, hey, we reuped, there was enough interest and demand to resign deals well see. It could be any moment that we p we hear viacom and dish have entered into a new longterm arrangement, jim. It doesnt take away from the troubles at viacom and the separate issues having to deal with mr. Redstone and the terrible fighting, infighting that seems to go on within his close family. Cant they get along . No, apparently they cant. Cord cut. And it doesnt go past the performance in stock and the incredible compensation during this period or why they didnt see the need to resign john oliver when they knew john stewart or colbert were all leaving. All the missteps theyve made. If they have this done, ill ton. It seems out of line. It seems out of line. John malone pays his ceos incredibly. You it can at the stocks over the lafive years and a lot of people made a lot of money. I believe personally i look at some of these stocks no, i look at viacom and i think that does not have the assets. Time warner does have better assets. Its almost like you want to set it up short viacom and long there is a baseline of work there. Its krin incredible. The compensation in media is incredible. We should have gone into media. Should have gone into media. Lets get to Rick Santelli in chicago. Rick . Rick be better lots markets doing lots aggressive things and whether you believe underpinnings of the fundamentals or not, there are so many things j yesterday when our Interest Rates started to rise it was past the trading session of bund, at least in the big trading areas. The relative value trade was all about oversea rates pulling us down. Guess what . Like every mountain theres one side but theres always the other. Our 10s started yesterday and bund made about 4 to 5 basis points up on that 7 basis point widening the other day. We may be leading rates back up. Lets look at a little bit larger picture. Were only in the 22, 23 start but it wasnt that long ago when we were testing the respot. We can see on an intra year basis, its doing better. But this is one trade thats kept you on the straight and narrow. Its been accurate as of late that mario draghi at least for the moment doesnt have a whole lore more to shoot at the market. Back to you. Thank you very much. When we come back, jims exclusive interview with oscar munoz. Dow is down 19 points. Dont go away. I want to bring in a very special guest, oscar munoz, president and ceo of american airlines. Youre just an unbelievable thing to come back after a heart transplant. I want to address that right up because you were challenged immediately by dissidents the moment you got back. What is it like to have all this on your plate at once . Hey, listen, its kind of what we do. I feel terrific. Im so blessed to be back with my United Family and dealing with my investors, its our job to listen to them and work with them and i think weve come to a resolution with that whole group. Its clear looking at the numbers and i was going over the numbers of those that have reported so far. Your numbers are not as good as the others so far. What can you do to improve the numbers . The good thing that the proxy issue is behind us, we can get to work on those issues. Youre right, there have been some lagging results on our company. We had some Great Customer satisfaction, the best in our recorded history as a combined company, weve done some great work with ontime arrivals so operationally and customer facing issues continue to do well. Your point on the board, i think they can do a lot frankly. Weve really reconstituted the board with some great experience across technology, innovation, certainly the Airline Experience thats important, i have some great financial presence from investors. I think that combination will be really wonderful as we develop our game plan and strategy Going Forward. When you look at the numbers versus the other companies, it true youve got some houston exposure that seems a little weak because of oil. I want you to talk about that and talk about the dollar. I understand, 90th anniversary, youve got a great workforce. What can happen to make it so your stock is better than the other guys . Its again about running a Great Airline for our customer. We have cost and infrastructure issues difficult to deal with. From my perspective, we have to work on the revenue side primarily. Weve lost some customers. We need to rebuild the trust with those customers and get them back. That involves where we fly, how we fly, the service, the product level but most importantly, i think it requires the absolute direction and focus of 85,000 people and my priorities from day one have been to resolve our labor issues and show the love and respect for the professionals that actually run this airline. Lets address another issue thats a little bit different that youre again trying to nail down whats different united versus the other guys. You have more china exposure than any of your peers. Whats going on in china right now . That was something i really loved about united versus the or guys. We just started having flights in china. We have a Big International play and thats an area we have to focus on. Whats happening in china is what happens everywhere, economies rise and drop. Its a Big International play for it and we have to at united win on the international side. Lets step back. There are issues about Corporate Governance that are front and center. You had activists who say youre not doing a good job. You had the even gotten into the job. How do you work with these people given the fact that youre really trying to do do it run a agreement between the parties, running a good airline is an absolute focus and objective. Titles arent important to me. At the end of the day, i think the two new members that weve added are terrific a technology and innovative per expect plus the three we have done, lighthouse, jim kennedy is a terrific longtime presence with constitutionalin vestors. Im going to miss some of our Board Members that are leaving certainly because we had a great run but at the end of the day i think working together across that whole spectrum, employees and our Management Team very well. I know this is graes. Whats the difference between running a railroad and running an airline . Well, the passengers freight on the airline is a little more vocal than the freight i had at the rail line certainly. But at the end of the day, the pride, the loyalty and the professional itchy had both on the railroad side as well as the airline side i think are very similar. I think from my perspective it gives me a great indepth knowledge of the labor situation, works the same on both sides. Theres a lot of complexity on both. At the end of the day i believe mass got to be about the product and the service that you provide. I cant express that enough. That comes from people. It is a people business and my primary focus is to get our 84,000 plus people back aligned, back engaged and back focused on our customer. Im glad you brought that up, oscar, because i think one of the tngss in the Airline Business, its the halcion home for airlines. What do you do when they say we have to give it back to shareholders versus those who say some of the other big guys who say we want it. How do you divide between new Board Members, among labor and among shareholders . At the end of the day, it all about balance. I spent but i think everybody understands that theres a delegate balance between all of those things and i think our new Board Members understand that more profoundly than anyone. So part of the difficult work ahead is to build a Great Airline, run a Great Airline and, more importantly, make sure we return to everyone involved. At the end of the day, its got to be about the industry. Without them, theyre nothing. We spoke to herb keller. He said i dont understand why these stocks are so low. Is the Airline Business different this time . Are we going to find up and find great price wars . Or is this a new era and these companies are all valued wrong . Well, ill tell you, i sure hope its a new era. Weve all seen the old one and it hasnt worked. So we got to develop orplay book, and thats an important this evening to methe area were living thing to me in the area, is we have to focus on keeping our value. Wow. Oscar is a hero to most people. To face this challenge and come back. The numbers arent that good. Hes got his work cut out for him. But i think he can handle it. Hes a great operator. I think he can make this work. Do you think it more an issue of efficiency and Customer Service . Theyve got to have a way to run the airline. Customer service he talked about being key. They need better customer sat fax. Theyre up against some very good competitors. Remember, this is an airline where labor, they like to be thanked and they like to be paid. Thats a huge amount of stock so theres going to be a tension here among the dissidents, among the people who work at that airline and for the people who are just sitting here saying why should i own this, i could own southwest, this is a very Competitive Industry in terms of which airline to buy and right now theyve spoken and said too hard to risk. I think theyre wrong. Im going with oscar. We have some news. The company which develops, finances, installs and operates Renewable Power plants based on solar energy has child bankruptcy under chapter 11 of the bankruptcy code, meaning it will reorganize. Suneddis Sun Sunedison has security commitments. It would seem to be a complex organization again given all of the parties that have taken place between it and the lights to and is to have agreements for which is has sold. But sun i want to remind people, an equity recovery. Highly unlikely you see equity recovery in a chapter 11 bankruptcy. Not expected here. Well see. Just in terms of the overall impact, there would have been another time if there was a collapse in sunedison, you would see the whole market collapse. Whats different . There was a decent amount of preparation for this. The journal did a story last week on all of the different problems they face in terms of well, the old story. They expanded too quickly and took on a lot of debt to do it. It was a great hedge fund darling. Im not talking about any sort of adjustment, im just saying loved by big capital and disillusioned. Suboptimal. Suboptimal situation. Basically not, lets say, Union Pacific. We will get stock trading with jim in just a moment. Important than your health. Or the freedom to choose what doctor you want to see. So if you have medicare parts a and b, consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare Insurance Company. Like all standardized Medicare Supplement insurance plans, these let you choose any doctor who accepts medicare patients. Youre not stuck in a network, because there arent any. Plus, these plans help cover some of the part b medical expenses medicare doesnt pay. So why wait . Call now to request your free decision guide and find the aarp Medicare Supplement plan that works for you. Like all Medicare Supplement plans, youll be able to stay with the doctor or specialist you trust, or look for someone new as long as they accept medicare patients. But unlike other plans, these are the only ones of their kind endorsed by aarp. Rates are competitive. So call today. And learn more about choosing the doctors youd like to see. Go long. Youto get the help yourefar looking for. Thats why at xfinity were opening up more stores closer to you. Where you can use all of our latest products and technology. And find out how to get the most out of your service. So when you get home, all you have to do is enjoy it. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. We used to talk about the congratulations index, how many questions on an analyst call begin with congratulations. You go listen to service now and theyre in a congratulatory mood, and there are plenty reasons why. Frank lichtman says for a highgrowth company like ours, every quarter has to be our best quarter ever. Boy, does that ever tell the story about the high multiple stokes. Congratulations to frank, delivered a fabulous quarter. Thats what ibm wants to be. Whats on mad tonight . This week have great. We have lam research, nick pinchuk and starbucks, kevin johnson, k. J. You want to read through it, be my guest. I mean honestly. Howards in many places. He keeps the job as long as he wants it. But k. J. , very candid guy. Could be a fun call. Well see you tonight at 6 p. M. When we come back, tom farley on ipos. Dont go away. 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. Thats like my grandma the kcooked, my mom cooked. I make a lot of banana bread because the baby likes bananas. laughs whatever home means to you, well help you find it. Zillow. Good thursday morning. Welcome back to squawk on the street. Some mild losses to start the morning, as the s p has been pushed into the red. Ecbs stays pat, claims were good and we are looking at the dow previously up six of the past seven sessions. Big earnings from verizon, gm, yum and travelers, which is shaving about 30 points off the dow. We do have breaking economic data. Lets send it over to Rick Santelli with leading indicat s indicators. Rick . Yes, expected to be up 0. 4 is up 0. 2. Last month we did lose a bit of ground, though. Oh, i take that back. It did. It was up 0. 1, now its down 0. 1. Now two out of three reads for the year are in negative territory. But traders are printing this one, were out of paper, the euro on an intra day basis, we know its mario draghi day, and the markets are a big fundamental. Big reversal to the down side, dollar index popped, took away some of the gains. I expect a lot more volatility today. Stocks relatively flat, as we said. Earnings day is it in full swings today. Joining us with more is mike santoli and jonathan. Good morning, guys. Cramer looking atames that are not favored. It was the reverse of last year. You had the market the same as it was a year ago. Back then it was let me buy the stuff insulated from the cyclical pain. This time you have a lot of stocks likes ibm, like american express, like bank of america that have already absorbed their pain. They had their bad market last year and now on the results people are willing to bet that we have a second half turn around and return to positive earnings growth. Today you have Campbell Soup down down a dollar in, changes for all the days it was up a dollar last year for no reason. Are you on with that . What does it mean for earnings Going Forward . I am. The market is seeing a weaker dollar, decent results, better beats and the expeck taguctatio just too low going into earnings season. You keep hearing about positioning. Its a factor, the fact that so many hedge funds were positioned defensive and were caught way off guard by this rally. How much of a change in sentiment is there . Sara, its a little hard to hear you with the clapping in the background. But what youre seeing is this move away from the world is coming to annd in january to something where recession fears are off the table, oil is higher and this is really a valueled rally. And to your point, those cyclicals that were cast aside are leading the market higher and as long as the market stays strong, thats probably the way the leadership is going to continue. Jonathan, just to pick up on a number of points youve and been making, if you look across asset classes, its becoming very interesting of what view people may be taking of the underlying state of not just the economy but where we are with Interest Rates. The tenyear yield in germany, its a benchmark of ecb action, you see silver moving in a very similar pattern. Clearly weve had oil bouncing. If you look across the asset classes, youre getting confirm ago confirmation of everything thats moving something and i wonder what that is. I think the german bund is Something Like 26 basis points or 30, something look that. So theres clearly signs that this remains a weak backdrop, but the big story here was the market was too pessimistic, the bounce on that was really sharp and those countries that are basical basically levered on success are all leading the market, value over growth. You talk about hedge funds positioned incorrectly, this has been a very painful rally to miss out on. So how far do you ride this new train . Whats draangerous at this poin . Thats a good question. Maybe its only a juiced up response to a softer dollar and what Merrill Lynch calls the humiliated asset classes, so disregarded earlier this year. Were we kind of rallying our way into another fed conversation or something that gives us that talk that mabb we have to think about june and before you get to the fed does, does the market believe it is coming back and its moving in anticipation of that and then lets discuss the phase. Inflation is back. Its not back in a troubling way. Of course cpi is over. You look at todays weekly jobless claims were very good, 5 unemployment. The fed is going to reengage. The market is going to be perfectly fine with that because what the market is seeing is that theres enough strength to allow the fed to do what they need to and the market is not going to find this to be troubling. Will have vshape rally go on for not . Probably not. This is look i said, i think these trades are going to continue longer, especially in earnings season, better than average. That would be nice to see, all of a sudden were okay with what they ant to do . I think theres a chance the market could love a fed move for the right reasons but the burden of proof is pretty of high because the market has been very skittish. It always seems like somethings wrong. Its not the perfect time. We know that to be the case. Well have to hope you have a quiet couple of months in the market. Do you see banks rally . Its kind of a split opinion on cnbc. Financials need to rally for the overall market to rally and they have been outperformers against this week. I think you sul sleuthly have to have them participate. Do they have to be the Leadership Group in the market . I dont think so. Not because theyre part of s p but because theyre caught up in everything in the Capital Markets we want to see goo g right. Thank you, guys. Good discussion. I wanted to get to verizon. They were up at one point as much as 12 in part on the strength of their dividend yield. The Companies Reported more or less in line, 1. 06. Revenues were perhaps a bit lower than some had been anticipating for the company, 42. 3, up very, very slightly year over year. They are seeing new revenues from things like the internet of things, up as much as 25 over an extraordinarily low base. The ebidta margin was pretty good that was down 7 basis points for the quarter and their smartphone penetration is now 85 up from 80 a year ago. But given the move in the stock coming into the earnings today and given the fact that they are no more than telling us, which perhaps its understandable the stock is not doing much of anything except going down. On the call this morning, the company did talk about things it does to continue to cut costs, the cfo saying they plan to implement head couldnt productions as we continue to of course there is a strike going on amongst wire line workers at the company. They did not have much to say about that at this point. They do believe that it could down the road start to actually be a higher cost for verizon. They also talked about their increasing longterm global media strategy accomplished in part by its streaming service go 90, which is still in the early stages and gaining traction. Aol own and well be interested to see how that develops. Overall no big surprises from verize on but given the performance of the stock that wasnt expect. We are getting some breaking news. Proposals on curbing wall street pay. Mary thompson has that. Mary . These proposals are mandated by doddfrank, initially released in 2011, the latest coming from the National Credit Union Associations six organizations have to vote on them and then theyll be put out for Public Comment before being adopted. This is adon interesting to wal street. Asset pay will be paid out over four years. Some have adopted rules where deferred compensation is paid out over a threeyear period so extending that period slightly. Also, current incentive Compensation Plans would be grandfathered under this rule and all assets or all institutions with more than 1 billion in assets would be required to keep records of their incentive based Compensation Plan for a time of up to seven years in just about a hour an who are or but just bringing you some of the highlights here, notably again, the incentive based compensation the proposed rule requiring it be paid out over four years as opposed to the three that a number of wall street firms have currently adopted. Well have more details as they come out. Thank you. United airline settling a major proxy battle. Ceo oscar munoz speaking out for the first time on cnbc this morning. All the highlights for you next. It recognizes pedestrians and alerts you. Warns you about incoming crosstraffic. Cameras and radar detect dangers you dont. And it can even stop by itself. So in this crash test, one things missing a crash. The 2016 eclass. Now receive up to a 3,000 spring bonus on the e350 sport sedan. Financials may have rallied 20 off their lows but theyre still the low sector this year. Susan lee is back at hq with more. For those investing in financial shares this year, they might be thinking i just want to get out of them, go on vacation with less stress. So the age old adage, sell in may and go away, you might be surprised there are a few financial names that actually outperform. Our partners crunched the numbers for us from may to october going back the last 15 years, financials, they may not have been the best place to go long underperforming the broader s p, which has typically been down 1. 5 over those months, but there have been a few bright spots. Rallying close to 6 typically, pels fargo has gained 3 , goldman has beaten the s p during that time period and is up half of the days. Aig has traditionally lost 17 . 17 in that time period. Morgan stanley has fallen 7 on average. You can decide what you want to do with your holdings into the coming monies. And united added two new Board Members. President and Ceo Oscar Munoz joined us in a recent interview. We asked about the proxy battle with altimeter. With regards to the chairman role and all those things, titles arent important to me. I dont really care. We did that unilaterally, by the way. That was a decision i made for all the right reasons. But at the end of the day, i think the two new members that weve added are terrific from a technology and innovation perspective and profound, deep Airline Experience from an airline perspective. Ive met with those folks at length, theyre great. You know jim whitehurst, Robert Milton is terrific, jim kennedy is a terrific longtime presence with institutional investors. The reconstituted board will be great. I im going to miss some of our Board Members that are leaving because they were great. But i think its going to work out very well. Im just excited to get back to the actual work at hand. Im sure passengers and shareholders would agree. Coming up, is the ipo drought finally over . Well ask tom farley who knows whats actually in the pipeline and likely to come to market after the break. Images, videos, social updates. We call it dark data. 80 is invisible to most businesses. The ibm cloud has tools that can help see dark data and put it to work. Hello, my name is watson. Working with watson in the ibm cloud, we can help an Energy Company predict pipeline corrosion. And help a startup to use social data to predict market trends. Now businesses can get more out of their data. Thats what the ibm cloud is built for. patrick 2 pretty great. Ke to nobe the boss of you . T more out of their data. patrick 1 how about a 10 raise . patrick 2 how about 20 . patrick 1 how about done . patrick 2 thats the kind of control i like. And thats what they give me at national car rental. I can choose any car in the aisle i want without having to ask anyone. Who better to be the boss of you. patrick 1 than me. I mean, you. Us. vo go national. Go like a pro. Its and as fans of ourselawesome tv but it is going to take a total team effort to get through all these shows now are you with me . Three, two, one. Watchathon big is back. Xfinity watchathon week now until april 24. The greatest collection of shows free with xfinity on demand. No state is more dependent on oil than alaska, and businesses in that state are now preparing for a tax battle. We turn to our scott cohn in juneau this morning. Reporter hey, scott. Juneau is a beautiful place in a rough spot. It doesnt take a Rocket Scientist to figure this out. Alaska relies on oil for 90 of its revenues. The state is looking at a 4 billion budget gap. Put that in perspective, total spending in alaska last year was just 14 billion. And crude trading about 42 a barrel and that means producing oil in this oilrich state is a solidly money losing proposition. For the north slope, the average cost to produce a barrel of oil, before we pay any tax, whether to the federal government or State Government is about 52 a barrel. Reporter Oil Companies have already been drastically cutting production and cutting jobs and in the face of that, one of the things the state legislature is looking at in now an extended budget session here is restructuring the States Energy tax credits, Oil Exploration credits, thats something governor bill walk ser puer is. Thats something people say will cost more jobs. And it fishing industry they say could be put out of business. Were willing to do our share but we have to make sure that were still solvent in part of an industry thats going to be bringing money into the state and keeping everyones a Small Business you a you see down in the harbor here. Every bought is a Small Business. We got to keep every one of those Small Businesses going. And all of those Small Businesses together in the commercial fishing industry about a 6 billion a year business so thats big in its own right. The state legislature is looking at a lot of things and the key to all of it is alaskas accumulated oil weather over the many years, the 50 billion socalled permanent fund. Theres now talk which would have been heresy not long ago of tapping into that and potentially tapping into those dividend checks that alaska residents get every year. Its something theyre actively talking about as the legislature tries to deal with a very difficult crude reality. Thank you very much. The real cost of falling oil prices. Thank you. Ahead on the program, google parent alphabet. What should you be watching more . More on that after this. Luge of. Xrays, mris. All on account. Of penelope. But with the help of at t, and a network that scales up and down ondemand, this hospital can be ready. Giving them the agility to be flexible reliable. Because no one knows like at t. Imagine if the things you bought every day earned you miles to get to the places you really want to go. With the united mileageplus explorer card, youll get a free checked bag, 2 united club passes. Priority boarding. And 30,000 bonus miles. Everything you need for an unforgettable vacation. The united mileageplus explorer card. Imagine where it will take you. Here at the Td Ameritrade they work all the time. Sup jj, working hard . Working 24 7 on mobile trader, rated 1 trading app on the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of other competitors do on desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivatives pricing model, honey . Td ameritrade. They found out whos been who . Cking into our network. Guess. I dont know, some kids in a basement . You watch too many movies. Who . A Small Business in china. A business . They work nine to five. They take lunch hours. Like a job . Like a job. We tracked them. How did we do that . We have some new guys defending our network. New guys . Well, theyre not that new. Theyve been defending things for a long time. [ digital typewriting ] its not just security. Its defense. Bae systems. Good morning, everybody. Im sue herrera. Here is your cnbc update this morning. President Obama Meeting with six arab nations in riyadh. He talked about the benefits of the iran nuclear deal. Not only have we seen iran do what it is supposed to do under the deal and the threat of an Iranian Nuclear weapon is greatly reduced, but what weve also seen what the gcc has seen, is our continued cooperation in, for example, interdicting the hutu members in yes, mamen. More than 550 people have died from the quake in ecuador. Palates of food were delivered. And in texas, this man made it halfway before he was swept into the water. He did make it to shore. In a surveillance video, you can see two men arguing, it spills outside, punches are thrown and then one man pulls out a knife and stabs the other twice. The man is expected to be okay. Thats the news update. Back to you. Thank you for the update. Mgm growth properties, more Companies Looking to go public in the pipeline. Are ipos back for good . We go to the head of the new york stock exchange, tom farley. The important thing, tom farley, is weve got three ipos since friday, all have done well, all trading above their initial price, all pricing in the middle and high end of the range, including american reano right behind us. Is the ipo market back . I think its back. Its been a long time since we stood here talking about it, ive missed you, bob. Thank you. There were or four or five ipos that intended to go public last year but didnt. And finally our phone is ringing saying were ginning the machine pa back, we want to talk dates. Theres a lot of stuff out there back logged. I think at the moment the conversation is more so around june. Anything could happen in the meantime. There could be geo politico concerns, everything could change on a dime. At the moment if nothing change, it looks like june will be active. Mgo properties up, bats up 25 . Let me ask you about bats going public. Theres a fight for market share going on. How is the nyse doing in the battle share and for listings on nasdaq . Let me talk about the ngo. Theyre all doing well and trading smoothly. You pointed out that went public at 26. 50. Its traded 26. 62 a half hour, 45 minutes later. Its a good seen in terms of the market. In terms of market share here at the new york stock exchange, we are far and away the leader in the United States and i think were being awarded by customers for taking a customer centric approach. And youve objected because of a speed bump i want simplified markets. It makes our market easier to understand for the mop and pop investors at home. In general im against anything that will make the market more complex and not benefit customers. Were going to continue to take that stance. We expect early june, maybe mid june to hear on the iex application. Guys, back to you. Thank you very much. Lets catch up with breaking news. Jackie . The department of Energy Reporting an injection to nat gas stocks of 7 billion cubic feet. It did turn prices negative. Last year at this time we saw an 82 billion feet injection and the fiveyear average about 45. The nat gas market is trying to balance itself as well, very similar to whats happening in the crude oil market. Overall stocks right now are substantially higher than weve seen them in a along time. Thats why nat gas prices have been floating and this 2 level. This morning level high is 2. 10, were trying now at 2. 06. Rebalancing is starting to happen and plats points out this is the sixth consecutive storage week that withdrawals are flipflopping as we head into the summer season. Were up about 6 in a week, 14 in a month but year to date its still down 11 . Consumers are sitting pretty in a good position as we head into the summer season. And the next fang stock to report is googles alphabet class. What is going to be the near growth, james dix . There will probably be some questions at least if not discussion in the script about whats going on with the eu. Thats not moving the stock, though, lets be honest. I doubt it. Why . Because its only a billion fine and they can deal with that easily . You dont get a lot of discussion about pending regulatory or legal issues. A fiveyear stock is a thing of beauty. Even over the last 12 months, its up over 40 . A lot of that had to do with the new cpo cofo come being in and decisions she was able to make. As she comes to the end of the first year, lots of people say its controlling costs that are their main focus. I think youre going to get more focus on cost cuts. If you looked at their core business, google business, it had a 300 basis point Margin Expansion last year, which was well above trend. Its going to be hard for her to repeat that performance. But if she can continue to show some visibility on core business, Margin Expansion and some rational approach to other bets, the other part of alphabetss business, thats what people will look for her. I was going to ask about other bets. Its interesting that they break it out. This is the Second Quarter were going to get a glimpse into that. Even though google is 99 of revenues, what are you going to be looking at in other bets . Other bets maybe any more discussions about milestones. I think theyve said in the past to some extent they approach other bets like milestones would. So any more color on where some of these other bets stand in terms of those milestones, when the next ones are coming up and any qualitative discussion on things like that would be important. A lot of people wonder with the boston dynamic sale if theyre seeing something about valuations at large or whether it was something specific to robotics they just didnt want to chase. What do you think the answer is . Its not a surprise, its not a shock to people that tech valuations in some area have been under pressure and so if you have some concern about the longterm viability of a particular project, you might say, okay, why not cut our losses on something look that. But theres a lot of approaches to robotics so simply because they sell one company, i wouldnt necessarily say theyre going to get out of the whole initiative. Theyll go with that from several angles, i assume. They have a lot of resources to approach that problem, among others. A lot of people will have noticed they changed the search results about six weeks ago. They said to everybody they were going to do that. Can you just briefly run us through what they did and what the impact of that is likely to be . Yeah, they continue to focus on, you know, improving the monetization in search. Theyve had changes especially on the mobile side in terms of more focus on Search Engine results in regards to the ads as opposed to organic growth. I think that continues to be a focus because theyve had success with that. Can you see their Revenue Growth has improved dramatically over the past year so i think you have continuation along those lines. What is the price target, what is the expectation as things stand . Im looking for a good quarter on Revenue Growth. I think youre going to see a continuation of the momentum, you saw them starting to build the mid part of last years as a result of some of the product changes. My target is 840. I brought it up a little bit in my preview. I actually think they might be able to reverse some of the trend that you mentioned on kind of negative tech results so far this quarter. Nice to see you, james. James dix. And share of underarmor, the Company Shares surging more than 7 . Well talk about what drove that quarter after a break. There was this element of looking at these pictures and feeling like its the fantasy that youve created for your family. I think i see my, my two kids playing in the backyard. I think i see a swing set cause theyll be old enough to be able to handle that kind of stuff. This is where i see our family for the next 15 years. How do you not, how do you not get emotional over that . Whatever home means to you, well help you find it. Zillow. Crude oil might be giving investors a powerful buy, stocks. More squawk on the street coming up. This clean was like, pow it added this other level of clean to it. It just kinda like wiped everything clean. My teeth are glowing. They are so white. I actually really like the two steps. Everytime i use this together it felt like leaving the dentists office. Crest hd, 6x cleaning, 6x whitening. I would switch to crest hd over what i was using before. Welcome back to squawk on the street. Stocks are off their highs. Health care trying to hold on to a gain, currently did best performing sector in the s p 500 due in part to positive earnings. Biogens Quarterly Earnings beating expectations this morning thanks to its multiple sclerosis drug. This will likely help margins Going Forward. That stock up about 4 . Other standouts include endo international, mallimallinckrod illumina and alexion farma. Lets bring in john kernen. John, going into this quarter there were a lot of worries about whether under armour was losing market share in apparel. Did the growth quiet concerns . The drivers of growth are shifting to international and footwear. Clearly apparel in the u. S. Whole sale channels probably slowing a little bit off an incredibly high base. We dont think theyre losing Growth Drivers but theyre shifting to other regions. Would you agree, were you impressed by the different metrics . Double digit sales growth across the board. I agree. Growth metrics are changing where footwear and international are really starting to take over. Footwear continue about 12 of the growth Going Forward and international about 10 . You really dont need 20 growth Going Forward, mid teens would do it. I wonder, john, if inventories are a problem. They rose about 44 . That came in higher than a lot of analysts were expecting. Are you worried about it . Were somewhat concerned about the sector in general but not under armour. Ultimately think their growth margin has recovery opportunity in the third and Fourth Quarter as they lap what was a difficult weather environment in the back half of 2015. Ultimately inventory is going to come down. It is elevated now but i dont think they have a demand problem. Another interesting stat from this report, susan, 14 of total sales come from international, up from last year where it was less than 12. What is the potential for this company as it does go global . Still a huge runway for them internationally. Most of the markets theyre in, they only have 1 or 2 market share up the most. Clearly a huge opportunity. I mean, this compares to nike with 60 of their revenues coming from internationals. With only 14 still a long ways to go there, which is why we see it contributing to the top line significantly over the next several years. John, if you look back at nike stock and union p under armour stock, both held analyst days last fall. Both are down from their lanalyt days. Is there a question whether money has been made in this category or are up confident it can continue to grow and the stocks can continue to outperform . Sure, those analyst days were enormous analysts for both stocks. Both stocks made alltime highs immediately following the analyst days. Valuations went up to alltime peaking for both companies. We think the stories continue here. We have outperforms on both stocks. If you look at the top line potential of under armour, investors focus on forward p but the total sales volume this company can do and the free cash that will be associated with that, we think they can go a lot higher than here. We also have nike but adidas is our top performer in the group right now. Adidas in this country is a sleeping giant, massively underperformed, as a new c. O. Brought in. Clearly theyre targeting this company. What is the expectation as to what they could do to disrupt the market, almost innovator moving in perhaps . Thanks for bringing up the new ceo. He has an incredible view on cost and thats where adidas has lacked nike and under armour. They can double earnings in a short time period. Clearly in a good product cycle now but they could have 9 euros in earning power if things go well in sg a structure. Adidas is doing better. Susan, which one of the three do you own or is a it a rising tide lifts all boats when it comes to that category . I continue to like under armour. I think it has such a higher Growth Opportunity longer term. We see 30 plus revenues over the next several years. And nike, while its International Opportunity is still pretty big for them, we are seeing revenues slow a bit domestically, which is a big concerning where we have a market perform on that one where we think its fairly valued. Investors agree with you today where the stock is up 8 . Thank you all for joining us. Ahead on the show, standing desks, ball chairs, apparently its the fastest segment in the office fun tur markrniture markt how big will it get . Apparently the numbers will surprise you. Oh cool. I just got my free credit score at credit karma. You mean free now, and then you pay later . Credit karma is free now, and free forever. Free . Forever. Free . Forever. Check out credit karma today. Credit karma. Give yourself some credit. Free forever quite like the human foot. Introducing the 255 horsepower lexus is 300 allwheeldrive. With twentyfive percent more base horsepower. Once driven, theres no going back. Youto get the help yourefar looking for. Thats why at xfinity were opening up more stores closer to you. Where you can use all of our latest products and technology. And find out how to get the most out of your service. So when you get home, all you have to do is enjoy it. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. And good morning, diana olick with the details. Well, i normally hate to do some live shots from my offices, but it makes the point, because most of the offices are like that, the seated pod farms which according to latest studies are killing us and increasing the risk of cardiovascular disease, diabetes, cancer, and the list goes on, but it does not have to look like that. And check it out. I work in fourt feet, and whole lot of the big businesses are vying for my space. The key is not just to stand all day or sit all day, but it is to be active throughout the day. And veradesk started with one model and now it has many models coming from employees and employers alike. It is active office, and the sit stand desks are all part of the solution. A solution that is the Fastest Growing sector of the 10 billion Office Furniture mark market. What we will see as the Healthy Office segment to be as much as onethird of the total Office Segment in the next three to five years. But it is not all about standing, and look, take the desk down, and sit down on the ball chair, and get your feet rowing. I am telling you that it started out with Herman Miller and steel case and a couple of standing desks, but it is amazing how this has grown because you have ep tre preneurs and Small Businesses coming out with the devices growing exponentially, and this is the cubee to track how far i have gone, and i will tell you that it is a a workout, and you can multi task, and you can see that it does increase productivity and it can be proven right here in the office. And this is the highlight of many peoples days, and two camera shoots, and people are in ah of how fit you are. No, i want to see the standing desk ss at the nyse. And diana, you keep doing, that and comcast will want you to pay the power bills by generating the light above your head. It is all tracked. She can do it. Diana, i am curious, because i have visited you in the dc bureau and you do it for real and not just for the story, and how long have you been doing . I bought the ball chair four years ago and the standing des ak year and half, and the cubee they have just sent me to m monitor, and you can see it now, and these are not superexpensive ak and the companies hinthint it is not just the consumer paying for them, but it is the b2b. Oh, i am thrilled. And diana olick reporting for the fitness industry, the workplace fitness industry. Well, you dont get guns like that the just working the feet. No. And santelli exchange, and what does your desk look like, rick . Well, i have one of those at home just in case they keep tinkerring with the energy markets, every house is going to need to generate some electricity, and this is my draghi thursday desk. And Mario Draghis press conference come and gone, and what is your observation well, one, no new news in the press conference and in the meeting, and the last one march 10th when he announced the expansion of the Corporate Bond buying and gave the details after the presser, and that is the new news. But more to the next level, draghi was hit with a lot of questi questions about the negative Interest Rates and extreme policies, and whether it is hurting the pension industry or causing a rise of the thirdparty political movements in europe, because they are worried about getting the future, and he defended himself there. And stop right there oso we dont lose the audience, but why would that spring up in a discussion about negative Interest Rates . Well, it is two ofold, because people are starting to understand Interest Rates. I brought a book written by sidney homer in originally written 1963, and in the years of Interest Rates, what you wont find in this book anywhere is negative Interest Rates, and so that is if new. And so in the first few months they called it a gimmick and not sure what they were staring at, and only in the last three months they have understood the implications, and it has them worried. How is that into the social and the retirement arguments . Well, the Pension Plans need to earn something in order to pay the pensioneers and not only low, but negative, you not only not earn, but you are losing. And people worry if their pension is going to be there and they worry about the future of the country and the society in a negative environment. And draghi was hit with these questions, and he deflected it by saying that he had nothing to do with it, and he believes that the policies are right, and he took a shot at the germans and saying that we are following the law, and they are being critical in the terms of the ecb. And our country, we dont have them, and the safety net for the student finance, right, there is a safety net, they will be starting to pay them off for the studenta and safety net for housing, so if people cant retire because of all of the ways to generate future income are not generating any interest, who is is there a safety net there that we ought to worry about . Is the government going to let all of these people have no money or much less money at retirement, because it is going to open up a new can of worms. Yes, and if they bail out everybody, student lopes, passing through to when they dont pay, and the homes and the definition of the pension money industry, where is the money coming from, and it gets back to the debt issue, but more to the point, low Interest Rate s s is what we have in this country, and it is not generating the incomes that we need, and certainly not the negative Interest Rates in europe. And negative Interest Rates continues to be the topic on draghi thursday. Thank you very much. How Silicon Valley may have created donald trump. That is next on squawk alley. Its been shaken and pummeled. Its innovative enough to brake by itself, park itself and help you steer. Its been in the rain. And dragged through the mud. The 2016 gle. Its where brains meet brawn. Lease the gle350 for 599 a month at your local mercedesbenz dealer. But directv has been number one in Customer Satisfaction son pa, i know we settle for cable. Over cable for 15 years. father how bout over 15 satisfying years with that woman over there boiling your clothes. Her layers and layers of. Layers. Hair that ive rarely seen because its always under that bonnet. And how she fought off that grizzly and made him into these slippers. Thats satisfaction son. vo dont be a settler, get a 100 reward card when you switch to directv. Good morning. It is 8 00 a. M. At qualcomm, and 11 00 a. M. On wall street, and squawk alley is live. Welcome to squawk alley this thursday, and jon fortt and kayla and Harry Blodgett this hour, and founder and insider, and it is great to have you this morning. And now, a slip of guidance after the earnings come in below guidance, and the earnings did top expectations burk plenty more earnings on tap with microsoft