Transcripts For CNBC Squawk Box 20150421 : vimarsana.com

Friday. You can see this morning theres green arrows up again. The s p futures up by 6 and nasdaq up by 18. Steve. Dupont is just breaking and my software is just loading and i dont have it. Were going to read the stories here and becky and andrew look up dupont there. Four dow components among the Companies Set to release before the bell. United and verizon. In Economic News arguing Central Banks need to set higher inflation targets to avoid dealing with low economic growth. Rosengren said he wanted to debate whether the u. S. Target of 2 was too low. Developing story out of the midwest today. An iowa farm holding nearly 10 of the states chickens when 5 million hens must be destroyed as a result. Iowa is among 12 states that detected bird flu since january including wisconsin which has declared a state of emergency. The risk of human infection is considered to be low and no human cases have been reported. Hormel warning it will sell less turkey this year because the viruss forced farmers to kill more than 2. 4 million turkeys in the last month. Just quickly, we do have headlines from due uponpont. Theyre raising their dividend to 49 cents from the 47 cents it had been before. Just looking at the yield right now. Thats a 2. 5 yield. So that will increase the yield spiral. In the meantime lets tell you about stocks to watch this morning. A mixed quarter for ibms big blue. Their earnings beating the street but sales falling for a 12th straight quarter. The strong dollar continues to be a head wind. Well talk to an analyst about all of this. Chip design Makers Technology that of course may have the technology that powers the iphone and profits topping expectations. Also Software Giant s. A. P. Posted better than expected results. Also rio tintos iron ore lower than forecasted and we have Credit Suisse reporting erngs ahead earnings ahead of estimates. Im seeing dupont now. I have an operating eps of 1. 34 and that looks to beat the estimate of 1. 31. Thats the first headline and maybe some other issues but thats what i have there. Its 1. 34. Redesign contributed 10cents per share. I dont know how you guys do this when you do it every morning. Try and jump in. Still loading uptaking a look at these things. 80 share. The estimated negative currency impact increased to 80 cents a share. Thats up to 60 cents a share they previously communicated. If youre looking at guidance on this, the company is saying they expect to be at the low end of 4 to 4. 20. Thats probably not a huge surprise to the street. If you look at the earnings expectations the street was already at the end of 4. 25. Its higher that the bottom is a little higher. They expect to be at the low end of 4 4. 20. The street knew that already already. Theyre looking at earnings to be at 4. 25. Weve seen them at a lot of the multinational companies. Dupont is talking about sales. Thats slightly below the estimates. 9. 4 billion. Im looking at sales of 9. 2 billion itself. 937 is slightly below what the street is looking for. They are talking about the sales that were down 9 versus the year earlier because of impacts from currency of about 6 . Portfolio changes of 2 and expected near term industry wide challenges in agriculture and performance chemicals. Lets look at how the stock is performing right now. Down about 3 from yesterday. This year its 20 higher than previously estimated. So whatever is going on out there its getting worse for dupont. 80 cents a share is for all of 2015 theyre expecting. For this quarter alone it does have a 25 cent per share negative impact for currency in these results. Well keep an eye on this. Currency is dpif cull to figure out. Analysts say sometimes thats a blilt little bit of a black box. Its kind of complicated but the street so far has been pretty good at pegging some of these massive head winds. My question is whether or not were at a point where were starting to look through that. I see this market go up 200 points yesterday and at some point the effect of the currency wears off and theres some visibility of these companies estimating it. I can say its 80 cents this year. To me when i look at the earnings the thing that matters is what does he think of all of this . I believe theyre having an Investor Conference meeting later today to try to persuade shareholders that dupont is not doing its job so the question will be how are they going to look at these numbers . Do you say the revenue story is really the story here. This is a company being helped. It also has a fairwind coming from lower cost of oil. It does not break out. It is clear how currency is having a major impact. It looks like its unclear where that stock is going to change. The bid is down at 6265. David einhorns Green Light Capital has taken a new stake in general motors. The hedge fund sold off a position in the auto maker nearly a year ago. The gm put ignition switch recall issues behind it. It also expects them to begin the 5 billion greenlight buy back soon. Einhorn says its tougher to find good long positions because valuations are on the high side and earnings are in a precarious spot. A new warning from mark mobius this morning. Right now were seeing emerging markets outperforming the u. S. And the world. Since the begin ofg the year weve seen theoutperformance. Now is the time to shift out of the u. S. Corporate earnings are poised to disappoint. Switched to a u. S. Recovery at early stage and government regulation. He favors emerging markets over most u. S. Investments. Not sure thats the most original thought from a lot of guests weve had on this show. Were sitting there saying ems and europe and out of the u. S. That seems to be a theme pretty prevalent out there. Its one he has been focused on for awhile. But we have heard that from a lot of guests over the last few months. It looks like were looking at a positive open earlier this morning with green arrows across the board. Yesterday was a positive day for the markets. Gains back 200 points for the dow. That is taking back much of the losses they have seen on friday of last week. Still youre looking at the s p futures up by 7 points this morning and nasdaq up by 20. Why don we see how the early trading is going in europe this morning. Looks like right now stronger moves for germany where the dax is up by. 8 . The cac is also positive. Its up to a quarter of a percent. In greece the market there by 2. 8 . Eventually we saw the yields for greek debt moving to highs. Something like 28 for the debt. Thats what you were seeing on the yields. That put pressure on the stock market there. In asia overnight you see the nikkei was up by 1. 4 . The hang seng was also positive. Up by 2. 8 and the shanghai was up by 1. 8 to try to get the banks to continue to loan to Small Businesses pushing out that money. Wti this morning down by 25 cents. Wti was higher. Up by 64 cents. You can say its trading at the 56 dlfrs range 56 dollar range. Youll see the yield is still under considerable pressure. Youre talking about the ten year yield at 1. 881 but when youre looking at 0 or even negative potentially in other places oversaes and europe thiseas and europe this is a much better deal. Youll see at this point the dollar is up across the board. Euro sitting at 106. 87. Gold prices this morning are still looking like theyre below 1200 at 1,000 1,197. 80 an ounce. Joining us is the Senior Technology analyst at Deutsche Bank research. Thanks for being here today. Thank you for having me. The overall picture is better than the street was expecting but revenue continues to decline. How would you rate this quarter . It was probably a good enough quarter. Revenue continues to decline for the company as you mentioned. Currency i think most people will look through but their core Market Software and Services Continue to decline and the only growth was in hardware. Some upside on the eps number theyre seeing benefit from the hardware business but the real places where ibm plays theyre not doing as well as the rest of the market. Jenny talked openly about how the company has to get rid of some of this business. The places where youre bringing in revenue but its just not profitable. When do we reach the point where we have gotten rid of all of that . Its a big question because ibm has been a big story for the past years. All they have been doing is divesting these in favor of software and services. Everything in the Technology Industry eventually co commoditizes. The big issue is transitioning to the new models in the cloud and where the industry is moving and theyre being challenged by what they have is really a big traditional business being challenged by that. How are they doing in term of righting the ship. Well she has done some things well and some things not so well. Its a difficult job that she has to turn a big company like ibm around and transition this business to the new model. At the same time ibm could give us more disclosure on the new areas where theyre growing and maybe make tougher decisions about the new areas like the cloud and mobility. I saw yesterday, did i get this right, cloud revenue was up 75 . 3. 4 billion. Is that right . So the run rate for the Cloud Business now is 3. 8 billion and it was up pretty significantly. Is that a a profitable business and b are they a competitive player in that space . Well ibm when you think about the Cloud Business especially on the infrastructure side the big players are amazon and google and microsoft and ibm in is in there but theyre not as big as the other three. Will they ever get as big . Or does it matter . Well, its a good question. Amazon dominates that space. Thats where everything is moving. I mean you talk about 75 growth is nothing to shake a stick at. Thats good. But when the rest of your business is declining 10 and thats 80 of your revenue its hard to offset that and see any growth in your business. Is that piece of the evidence, is that a key business though . Because the rest of ibms business was supposed to be sticky. Yeah. Cloud services has always been one of the things the reason its so great and easy is it can be transferred i can jump from you to you to you, right . The Cloud Business is probably not as sticky as traditional businesses where you buy a server and put software on and it sits in the data center. Also we dont know the profitability. We dont know what the profitability is. They dont give us those numbers but amazons business thats pretty competitive business. Hard to say. The stock closed yesterday. It looks like its indicated to work higher this morning. Whats your grading on the stock. If you think about all theyre facing its hard for me to get excited about the name right now. Thank you. Coming up when we return your money your vote. New word today on who the coke brothers are backing for president and later tom faulk is going to join us to talk about his companys earnings. Plus skinny girl founder Bethenny Frankel is going to join us and dish on her growing brand and crude realities, harold hamm is going to join us first at 8 40 eastern time. Before we do that head to a break here a look back at this date in history. Tell me why i should have any faith at all in the gain yesterday. One day its happy. One day its sad. You to take a longer term view of the market. A 6 to 12 month horizon. Valuations are reasonable. Theres a lot of good things happening in capital markets. We have a year like last year we buy the difference. Does it worry you though when the market is so definitively negative one day and definitively positive the next. Does the earnings justify the 200 point gain yesterday . There was no Economic Data to justify it. Sometimes you cant read too much into anything. Earnings in aggregate have been okay. They have exceeded expectations. The norm last quarter was 67 . Earnings are okay. Thats on the bottom line and not the top line at all. Thats absolutely the case. People are becoming accustomed to that. But are we starting to go negative . Is it negative year over year Quarterly Earnings . Absolutely. A little hard to get excited about 76 beating when what theyre beating on is a less negative number. Its what the earnings are versus expectations. The fact that earnings are going to be lower. Everybody expects earnings will be lower. Energy will be significantly lower. Earnings will be up about 5 . Now in the old world you have the financials doing well yesterday. Morgan stanley, goldman did well, is that a leading indicator to you of where the stock market and economy are going . We don think its a leading indicator but we do think if you look at the balance of this year financials are going to perk up. They are one of the worst performing groups in the First Quarter. Even though businesses have been good the stocks havent started yet we think thats going to happen. You were more positive on ibm than the analysts. We do in our dividend accounts. Theyre paying about a 2. 6 yield even though its not exciting in term of prospects its under 10 times earnings. Theyre slowly getting their act together. Youll do okay with them. We think the stock can be 10 or 15 higher. Theyll look stabilize and start to move higher again. Not for sometime. You still have quite a little bit of time where the hardware business is going to slow down. So the new businesses were growing at 30 or better. So theyre paying a nice dividend to shareholders. Its not going to be excited. Is warren buffet going to be vindicated on this when its all over. We do believe he is. He has a longer time horizon. A lot are looking at a week or month. As a multiyear investment we think theyll do fine. There are better places in technology to make more money quicker but we do think its going to be an old hold. Do you connect this volatility to Federal Reserve policy. The volatility is normal. The fact that we didnt have volatility is normal. The fact that valuations are up significantly increases that volatility. So the Equity Investment is why you get paid more than getting in the bond market. Were going to have a reporter on later thats going to argue that the fed already tieg tightened and the slow down in the economy is a result of that. We don think the fed has started to tighten yet. Everybody knows the fed is going to tighten but we dont think that happened yet. When does the tightening begin . Best guess now is september. And how much does it matter for markets . Well the market is going to have a little temper tantrum again but it is going to come to terms and go from 0 to a quarter quarter percent. Should be manageable for the stock market. Lets give you a little political news this morning. The cokoch brothers favor scott walker. A spokesman is disputing the wording saying that he pledged to remain officially mutual during the primary campaign. So a little bit of news. Also a little bit up in the air. When we come back this morning, big news from netflix. The streaming giant giving viewers a blast from the past announcing a new full house. Well have the details right after this. But first as we head to a break take a look at yesterdays s p 500 winners and losers. The eclass has 11 intelligent driverassist systems. 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 2015 eclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Man you run a business. Could be any kind of business. And every day youve got important decisions to make, like hiring. Where are you gonna find those essential people you need . With ziprecruiter, its simple. We post your job to over 100 job boards with just a single click, so you can reach millions of qualified candidates. Then well give you the tools to help you manage, screen and rank your applicants all so you can find the right one. Try zip recruiter for free today. Im going to give you the exclusive. Please do. Its a labor of love and we have been literally trying for so many years to do it right and i think we finally got it perfect and they just five minutes ago said you can give the exclusive to jimmy kimmel. Oh thats nice. There he is. John stamos from full house. Netflix is going to reboot this thing with a brand new comedy. All new episodes. Another case of netflix thinking out side the box for programming and this effort to capture a demographic thats moved on. A little bit older now, get their kids. I watched full house. Late 80s, early 90s, werent you 12 then . Late 80s. This was the show that created the olsen twins. They played the little ones. The little girls. There was one girl. They both played the same person. Bob sagget. He is not signed on yet. Nor have the olsen twins. We should also say Marykate Olsen has a connection on this show. She is married to oliver now. Oh wow. Thats a weird 7 degrees of squawk box. Then Candice Cameron that plays d. J. Is going to come back she was the kid. D. J. Was she was dj. Shes going to come back i believe as the mother in the story. Of course her brother was kirk cameron on growing pains, the other show that i used to watch at this time. Talking about out of the box, netflix has done this before they rebooted arrested development which was a show that was a bit of a cult phenomenon on fox and did well and got cancelled and they found a way to bring it back to netflix. But its going to raise the question of what else can be rebooted . Happy days or Something Like that. Im waiting for the ateam. You want the ateam to come back. Nbc is bringing back coach. I love that. Thats fantastic. Dj. Has been around too. She was just on dancing with the stars a season or two ago. John stamos does everything like the yogurt commercials. You din have a crush on him. Hes cute you know but i think you did. I think my wife did. Everyone i know. He was like the guy. He was. You have another one you want to talk about too. So the Pulitzer Prize came out yesterday for those print journalists still in the business and very sad story. One of the guys that won the Pulitzer Prize already left the business because he couldnt afford to be a journalist anymore. He worked at a paper in california and went into the pr business. So there were a lot of people playing around on twitter. I still have my print sheet journalism roots. I am a member of the team that won in 1999 for International Reporting but i have many many friends, colleagues from Columbia University that had to leave the business. When you talk to kids these days about going into the business what do you tell them . Its good to write and good to become a journalist but im not entirely clear what the economic economics are for a writer. In any job that skill set is good. But would you tell your beloved niece for example to go into journalism. I wouldnt tell anybody. I would. In this day as age. As a recommendation for a career. A im a believer that some of the print institutions whether it be the times or the journal, actually do survive and in some cases thrive and then on the other side you have all of these new media publications. But theres no pay. They pay like theyre textile workers from the 19 hundreds. Its outrageous some of these things. Its insane. Youre lucky to get like 30 to write a 500 word piece. But i think if you were to call him up to come on the set he would tell you theres people that are getting paid very very good salaries. I think the printed word right now for many, many people is a secondary thing. If you have a book to petal or service to offer you can write and make a little money that way but as a way to advertise and market your main deal. Im going to talk about something near and dear to my heart. C kraft macroni and cheese. Theyre changing their ingredients. Theyre going to do it without the colors that create the orange and artificial preservatives too. Thats january 2016. This is not because of intense pressure coming from activists but it is from the changing taste for mothers and fathers. Its getting it from annies. Can you make it organic . Are there mothers and fathers trembling right now that theyre going to get their 3 and 4yearold thats going to say i want it orange. I did think about stocking up just in case because as you said, a 3yearold that says no way, thats not real mac and cheese. Are you a kraft family or annies family. Both but the kraft is top with the kids. We would go to costco and buy cartons of 20 mac and cheese. There was a period of time when thats all the kids were living on. But they passed through that. Right. Okay we have more news coming up. Why dont we go there. Coming up the streets reaction. Quarterly results, lets see what people think of it. One of the companies in the middle of that major activist battle. Well take you inside a volvo factory in china where cars are being made. Squawk box returns in just a moment. If youre looking for a car that drives you. And takes the wheel right from your very hands. This isnt that car. The first and only car with direct adaptive steering. The 328 horsepower q50 from infiniti. Hey mom, you want to live by the lake, right . Yeah. Theres here. Did you just share a listing with me . Look at this one. Its got a great view of the lake. Its really nice mom. Your dad wouldve loved this place. Youre not just looking for a house. Youre looking for a place for your life to happen. Zillow the dow looking like it would open up higher. Our nasdaq up close to 20 points higher and the s p 500 up 6. 5 points. Among todays top stocks to watch, durks, approximate, on earnings beating the street just happened but revenues short of consensus. The results were impacted at 25 cents. Dupont increasing to 49 cents. Well talk about it right now. Joining us is mark connolly. He covers dupont for cslk. Good morning to you. Put the numbers in context. He has a presentation hell be doing to investors starting sometime this morning. If hes watching these numbers this morning hes thinking what . Hes thinking they padded every number they possibly can. This is not a quarter that dupont could afford to miss. I think he pulled out all the stops and you can see from the quality of the numbers that its awfully tough in this environment. Theres a huge amount of Foreign Exchange head winds but theyre finally taking out costs. I dont know why we didnt do that in 2010 when she originally said she would but theres a lot of effort here to put on a positive face. Are these numbers sustainable . If you throw everything in now buzz ever does that mean a quarter or two from now it will be tougher . The guidance is not all that encouraging. I think were going to face an uphill slide here. Theyre going to keep pushing to get costs out. They lost one of their best businesses for fixed costs so the cost problem became much more difficult. Its the right thing to get rid of tio 2. They didnt sound like they were going to do it. He wants board seats. Do you give it to him . Do the numbers make you more confident or less confident about the business . I dont think he has much chance at all. He has put big named people on their board. I dont think he has a good chance here. So these numbers end the fight . I dont think they end the fight. They keep him as the under dog. Dupont is doing everything they possibly can. Thank goodness nelson peltz is here. I doubt these numbers would be as good as if he werent. Thank you. We appreciate it. Volvo betting big on china. Manufacturing the First Chinese built car made for the u. S. Markets. Were joined now with more. Its going to start manufacturing at this plant in a couple of weeks. It will be exported next month and available in the dealerships there probably around the summer. This is a big turn around for volvo. They had to do a lot of things to turn their business around add as you know made in china has certain connotations. Connotations the ceo is very aware of. Especially when theyre trying to reclaim market share in their dominant market. Heres what he had to say. There could also be customers that have an opinion made up before the chinese project is not as good as the european. Probably were trying to address those customers. But this is simply more than just a volvo story. Its about the transformation that china would like to make. The rebalancing of its economy. If they can take the technology to transfer their knowledge to their own home grown product if that happens they can build their own car they too can experts to the global markets. Theres a lot of ifs in there but i spoke to the owner of volvo and he said sure he has ambitions but hes a practical man as well. Its a symbolic move and once it happens it takes chinese manufacturing not just for cars but industry overall to a whole new level and thats going to be critical in this very tough rebalancing act the government is trying to institute. Two questions, first of all, are there other cars made in china for the u. S. Market and is there concern by volvo that there will be some stigma attached to it by u. S. Consumers . Steve this is the first made in china car thats going to be exported to the u. S. So this is really an all time first. There was something at a very very low production level many years ago but that time has long gone. So this is really a first in that sense and i think concerns i mean look as i said there are connotations to made in china but look at it this way, volvo is a niche player. They produce 500,000 cars. Thats a small number compared to volkswagen and toyota. It could be detrimental to say the least to their business and i would be very surprised for a company like volvo thats an iconic brand and always ranked as one of the first in surveys for safety and reliability to put that on the table as a risk and i would be very dubious as to whether or not they would do that. So i took a look around the plant here today. Very interesting because its china compared to where im usually based in japan. Thats a lot of manual labor going on. To get back to your original anonymous question putting that on the line is just too risky for nach player like volvo. Thank you very much. Coming up, they unveil the annual hot list. Everything from hip hotels to exotic locales. Places that andrew visits. The worlds best travel properties. And later, Bethenny Frankel in studio. Im a real housewives ive been watching real housewives for a long time. The reality tv star and entrepreneur stops by to talk about the big business of her brand. Andrew just stay in your chair. [intercom] drivers to your marks. Go its chaos out there. But the mclass sees in your blind spot. Pulls you back into your lane. Even brakes all by itself. Its almost like it couldnt crash. Even if it tried. The 2015 mclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. Ideas come into this world ugly and messy. They are the natural born enemy of the way things are. Yes, ideas are scary and messy and fragile. But under the proper care, they become something beautiful. I care deeply about the gulf. I grew up in louisiana. I went to school here. Ive been with bp ever since. Today, i lead a team that sets our Global Safety standards. After the spill we made two commitments. To help the gulf recover and become a safer company. Weve worked hard to honor both. Bp has spent nearly 28 billion dollars so far to help the gulf economy and environment. And five years of Research Shows that the gulf is coming back faster than predicted. Weve toughened Safety Standards too. Including enhanced training. And 24 7 on shore monitoring of our wells drilling in the gulf. And everyone has the power to stop a job at any time if they consider it unsafe. What happened here five years ago changed us. Im proud of the progress weve made both in the gulf and inside bp. Welcome back to squawk box everybody. We have been watching stocks this morning. Among them rogers communications. Earnings dropping more than expected after the company is struggling to hold on to customers. It is unchanged. Also earnings at Canadian National railway beating consensus. Theyll improve safety as volume rises. In other headlines, millennials getting a big loan from the bank of mom and dad. Young adulls are three times more likely than their parents were at the same age to get financial hope from their parents. Andrew are you getting loans . Thats interesting that its three times more likely at that age. I think that it may be first of all, theyre getting out of school with a lot more debt. Debt. I think basic stuff costs a lot more in terms of getting a house or down payment on a house than it did depending upon i didnt read the study but when theyre comparing it too. Were going to talk about refined travel. Town houses with butlers to remote safari out posts theyre out with the list of the worlds best hotels. 60 properties made the 2015 hot list. She is from continental strategists. The editor and chief. Whats the hottest. Do you rank them or not really . No we dont. Its not always apples to apples. Whats the one you want to go to . I just came back from india and was lucky enough to stay at the palace the incredible royal palace and the suites are named after people that stayed there. There. Jackie kennedy. What is the nightly rate . Oh, you know it varies. And it it depends on the suite but its expensive. In the thousands. Like 2,000. Like 1,000. Whats the Cheapest Hotel on your list . I guess it would be 21 broad. There are a couple in that category. 21 broad is in nantucket. New hotel, really charming. You are in it. It feels like you belong there. I like to travel to crazy, far away places as possible. Trend wise where are people wanting to go . I still think despite eebola that seems to have died down and i think back beyond africa is very thats the hottest place . One of these sort of you know, sort of god forsaken and glorious. Dare i ask what is the most Expensive Hotel on the list . Do you know . The most Expensive Hotel. A lot of them are very expensive. Part ofaic paage. A lot of them arent because we weigh different criteria. New york city. Thats not fair. Dont put me on the spot. Thats on our cover. It is spectacular. I have to say. What makes it spectacular . The craftsmanship. When i was there and they were putting on finishing touches before they opened i watched a very sort of chic frenchman hanging drapes. Whats the one thing you look for . Becky and i were talking about the one thing we like in hotels. I like a big room. You like it be awake when you get up. What is your one thing in the hotel room . Level of intimacy and attention to detail. Thats about the finishes and, again, that can be at the very high end. It can also be a fantastic cup of coffee. Since you like intimacy you probably like whats the best, big hotel you love . The big, big hotel. Thats a good question. Great question. So many to choose from. Its true. Theyre not big, but theyre grand. I think thats sort of that is not part of multirooms, but about grounds. I think that you know thats something that i value. One thing we were talking about during commercial breaks all these very very Expensive Hotels which you know very first hand all about. Very little margin. You think youre spending 2,000 a night. He would tell you that you much prefer to have a courtyard marriott. Hell make more money off that room than, i dont know the economic, but 1,000 a night. What do you pay for an internet connection. Breakfast is included in the Smaller Hotels which i think is part of the id rather be charged more in the room and have breakfast included. Psychologically, i like that better. Im always gone before breakfast is served. A cup of coffee or cup of hot water. And not in a paper cup. I started to say just trend wise. Do you i mean from where you see the economy going, do you think that 2015 16 were going to see more travel . There was some talk that airline prices might come down marginally this summer. Marginally. I think, one, the dollar is strong. That for americans, at least, there is a booth there and america is cheaper. Can you get a good place in europe right now or is everyone running to europe . Between all the hotels and at the higher end of the rentals, apartment rentals you can still get places. I, you know do you do air b b. . I believe a narrowing of the universe of the reader. For us you want sort of a tighter edit. Can you do that . Maybe team up and then edit. Can i ask the question if i didnt have a lot of money eand i was a traveler but i wanted to stay at a place that was as close as i could get to some of these places that youre talking about. I actually do think this is where sort of the air b bs of the world makes sense. You want to be in neighborhoods that make sense and not tourist neighborhoods and you can go around the corner and have a nice coffee eand in the treeline street rather than in sort of times squaretype environment, which is how most people many people that i know want to travel. They want to be embedded in the neighborhood. So i do think that, you know the sort of that model works well. Its a lot cheaper, especially if youre traveling. A lot of people travel with extended family or whatever. Two couples and kids. Its a lot cheaper. You know you dont want to pay 40 for a yogurt. Its the kind of thing where you can actually be in a gorgeous place and, you know have a yogurt. There we go. The 40 yogurt. We did in paris, it was great. You did . We stayed at i dont know if it was air b b. It was a third of the cost and an unbelievable apartment we stayed in. Also a number of fantastic hotels that are smaller that, you know, you are on a budget i think that it is a great option. Thank you for coming in. Thank you. Appreciate it. Of course the hot list issue hits the newsstand next week. You can check it out. When we return this morning, back to earning central. United technologies and verizon all set to post quarterly results. Right now, check out the futures this morning. Things are looking up for bulls, once again with the dow futures up by 46 points. S p up by 5. 5. Stick around, squawk box will be right back. A deadly flu outbreak. Well tell you how it it will affect prices and food stocks. Earnings alert. United technologies and verizon all set to report this hour. Well bring you the numbers and the instant number reaction. Bethany frankel is here to talk about her line of Consumer Products, her new book and her return to the real housewives of new york. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box first in business worldwide. Becky quick and steve liesman. Couple Earnings Report hitting the wires. Utx and travelers hitting and both mr. Liesman and ms. Quick going through the numbers. 253 compares to the 254 that the street was looking for when you look at thompson estimates. Looks like revenue was very close. Came in at 5. 9 billion that the street was looking for. Were using that number because i believe thats what the street actually looks if for. Although it is a strong report, coming off of a very Strong Quarter from a year ago for this company. Lets take a look at what theyre talking about. Some things theyre doing is raising the dividend by 11 and the board is approving the 5 billion of Share Repurchases and take a look real quickly at that stock and esee how its shaping up this morning. Down by 2 . Travelers is a company that has often beaten the street expectations and doesnt give a lot of guidance to the street and insurance can be a black box when you try to figure out whats going into this. Coming off a very Strong Quarter from a year ago. Other points that theyre making, i think there were a few issues that happened. One of it is the money that they were making on their portfolio, obviously, a little bit impacted. Fixed income down pretty sharply over that period of time. The other thing they had private Equity Investments that are not valued nearly as high because of the energy hits. Private Equity Investments that is paying off for this. But, again, you can see the stock is down by 2 and that is a dow component. Youre looking at utx. 1. 58 here. Solid beat compared to the street at a dollar. 45. Light on the revenue. I had 14. 5 billion versus an expectation here of 14. 88. A little light right there. They are firming the school year view of 675 to 705 and i have here a 7 cent currency impact is what theyre saying. And then one of the things theyre in line with their expectation of organic top line growth of 3 to 5 . Which is pretty decent. Thats 12 or 13cent beat. They are sticking with the guidance they had already secured. Usually when you see a big beat like that, youll see a company raise its expectations for a full year, too. This could be a concern about currency for the rest of the year. Making sure theyre giving themselves room. Modern currency impact. Their guidance again, had been for 6. 85 and 7. 05. Theyre affirming that. This 13 cent beat from this quarter will give them comfortable room to make sure they meet that guidance for the full year. Thats what i see here. Again, that stock looks like it is up slightly up by 0. 5 . Youre right, no optimism in what im seeing in the outlook here given such a big deal. I guess its tough to see what is happening this year. A lot of moving things from the dollar to oil prices. I havent been here becky, the whole earnings time. Is this a consistent theme here of theyre beating on revenue, on profits, but light on revs. Repeatedly. For six years. A trend for years. What surprised me is because of the massive impacts, because of currency and Energy Prices too. What surprised me is that it seems pretty well telegraphed in the street. There have been companies that have been beating lowered expectations, but the street was able to get its head around the idea. We certainly stabilized on the dollar. Its very difficult to estimate something that is falling at an increasing rate, unless you have a radar out there in your earnings forecast which most people dont. But now that its stabilized, i think as we talked about in the last hour, analysts can at least get their arms around it and say there is an effect of a currency ratings from x to y. Sure. And companies are out there estimating this now. So youve gone from completely unknowable to somewhat knowable and i think thats something that you can then create propositions around. A second outbreak of bird flu has been discovered in iowa. This time at a commercial chicken laying facility. 51. 3 million hens there will be euthanized to prevent the disease from spreading. The flu was found in a flock of 27,000 turkeys in iowa last week. The egg laying industry is the nations largest providing one in every five eggs consumed in the u. S. The risk for human infection is low and no human cases have been reported. Well talk to food analysts in a few minutes on the impact of poultry prices and food company shares. You know me, i like my eggs. What stuns me is that the initial reports, at least, say that there wont be any changes to egg prices at least not immediately. I dont know how big the nations flock is. The idea that you can wipe out 5. 3 million hens and not have any impact on hens. What does it actually take. Thats something well talk to the analyst about. Among other stories were watching this hour. Texasbased Blue Bell Creameries is recalling all of its products. Two samples of Chocolate Chip Cookie dough ice cream. Kind of my favorite. Tested positive for lis teariosis. Kind of take ss. Thats never happened to me before. Last month the cdc linked ice cream contaminated to three deaths at a kansas hospital. In Economic News im going to read right by that. Central banks may need to set higher inflation targets to avoid dealing with low economic growth. Rosengrand he wants the u. S. Target of 2 is too low and in Corporate News take a look at shares dupont earnings beating the street but revenues were short. The company says its results were impacted 25 cents by currency. Dupont also increasing Quarterly Dividend by 4 to its off a little bit. 1. 62 . Stocks rebounded from friday selloff with the dow, s p 500 and nasdaq posting their best gains for the month. Heres the futures right now. What are we looking at here . Were up. So thats top, that was yesterday. This morning right there we go. Kind of coming off a little bit. I feel like we came in this morning and the dow was up around 90. I remember that number. Right now showing the dow would open around 41 points higher and s p about five points and nasdaq 15 points. Joining us now on set, i guess jason, Strategic Research partners. Jason, react to the numbers that are coming in this morning. What are you hearing . Listen i would say in terms of your discussion on earnings i mean the thing that is interesting here and this is part of the reason why the market seems to be dealing with it not only are the earnings beating, but also, you know youre buying in a lot of the s p is buying in 3 of its shares. The share purchases continue unabated. And also if you look at just dividends paid in aggregate for the s p 500, last year and last 12 months, i think it was Something Like 370 billion. So, you know investors. The stock market is not the economy and the economy is not the market as we know. There are things that are not particularly good, perhaps for the economy as a whole. But for investors a lot of good things going on. I want to bring in greg wall street journal, the mixed argument that the economy has slowed because the fed hose already tightened. Greg, i kind of disagree with youilatal bit but ill let you make the case and then ill give you my take. Go ahead. The fed has always acted not just through its actions but its words. When the fed starts talking about tightening the markets start to incorporate it. It hasnt shown up in the usual place like higher bond yields or higher forward expectations for the fed funds futures. It has shown up in mostly the dollar and a little bit in credit spreads. With the ecb and all the euro block countries lowering rates or doing quantity of easing people have sort of weighed that against expectation of fed tightening and the dollar has shot up. It shouldnt shock us that were seeing some hit output as a result. Greg, i agree ewith you. The dollar has obviously, been something that has taken something off of growth. I think it was one of the fed president s the other day estimated it was half a point or 0. 6 . I think that was dudley. But im not seeing it greg in any of the, Interest Rates or any of the ways that the fed normally affects the economy. I just want to throw it to jason. Jason, is all the talk by the fed of a coming rate hike slowing the economy right now . Personally, i dont think so. I think there are other factors that are at work. I think the fed, though its always normal for the fed when its going to tighten to condition the market for tightening. Theres a very asymmetrical way of the fed actually expresses its ability to change policy. When youre easing you can ease right away. When youre tightening though you want to make sure everyone is onboard because you can create unintended consequences that get in your way. I think the fed personally will tighten this year. That is simply to normalize rates. Youll still have negative Interest Rates on the short end. Its hard to view that as a de facto type. Greg, you also had financial conditions ease in two the first thing is you had Lower Oil Prices during this time the feds have been talking about the higher rates. You also had rich really come down. We were up north of 2 and now pretty solidly south of it. Right, because of the feedback effect going on steve. As the effect of the dollar is felt or expected to be felt both on output and on inflation, the market says, how will the fed react to that. Oh we think the fed will take longer to tighten. That you see showing up with lower bond yields and that in fact, has been ratified by how the feds spoke. If you go it back to the march meeting and dramatic downward revision of the dots the market basically said oh, they heard us. Theyre lowering and pushing out the path of tightening and thats precisely when the dollar stock climbing. Just remember the fed can try and aim for a particular level of monetary tightness but they cant dictate how it is between the interest rate, credit spreads and so on. Essentially what you have roughly equilibrium it stock going up and the fed seems to be gravitating towards that september liftoff date rather than june. I think, you know, for stocks what this means what were saying in our shop is that you want to be cautious going into the first fed rate hike and i think one of the things here Alan Greenspan used to call him quarter point al because he would use quarter point every meeting both up and down. What is going to be different this time in my view steve, i dont know whether you agree e. I think its very likely youll get a move and then a pause for a couple of meetings as they see how it affects financial conditions. That could be a very important, very powerful signal for a risk later on this year. I think it sounds trite and not very up front. It depends on the data. If they have a scare when it comes to wages, that will be an issue. Greg, did you hear anything last week. And i was very interested in what lockhart said which he had told me the end of march that he was definitive in this june to september range and then took june off the table. Are you hearing the word, the center of gravity of the board move out a little further from what you initially thought . I think youve nailed it. Lockhart as good a bellwether you can ask for on the center of gravity. Hes talking about september. Yesterday i thought it was interesting he was still hopeful for 2015. Like a 2015 rate increases itself, not necessarily a given. But, lets keep one thing in mind here. First of all, almost certainly part of the First Quarter weakness was whether the port strike, were going to get some kind of a bounce back in the second quarter. The key is does that bounce back bring back all the growth that weve given up in the First Quarter . I dont personally think so. I expect to see further downward revisions in the feds path for output. The other thing i wanted to go back to a point you and jason were discussing is the other thing were seeing that as the fed goes from this Forward Guidance mode to the data dependent mode it gets harder for the market to call what is going to happen. One reason you see a lot more volatility in the rate market and a lot more volatility around the fed action. Greg, thanks for joining us. Folks, tune in tomorrow i think i can tease this. I have the results of a major twoweeklong analysis i have been doing on First Quarter growth and how and why its different. That might surprise some folks. I think we might do that story tomorrow. If theres time, well see. Tune in. Its interesting and it gets to something that greg was just talking about. Something that fed vice chair stan fisher has talked about. I have been crunching with the spread sheets and working with three other economists for two weeks on this story. We should also tell you that underarmour earnings beating by a penny. Expected than 25 and the athletic wear making is upping. The companys 20th straight quarter above 20 net Revenue Growth and you try add mr. Speith and i imagine it may be in the future. Well see where that goes. At the moment it is on a straight up those 20 quarters. Thats over the last five years. Many companies have blamed a lack of consumer interest and said that there just isnt enough demand to pull this stuff off. Plink says i dont care how everybody else is doing, it is my job to make sure i create demand for my products. Kind of an amazing story line to listen to. When we come back, more on the deadly bird flu outbreak that is threatening the natures poultry supply. The disease is capable of killing the entire flock in 4 hours. The impact on the food Company Stock and what this all means. Later she was the real housewife of new york and the entrepreneur of skinny girl consumer cocktails and products. Bethenny frankel will join us here on the set. Under armour shares look like theyre going to ebe down sharply. 83. 75 after that stock closed at 87. 76. Well take a look at more about what is happening with these earnings numbers when we come right back. E financial noise financial noise financial noise financial noise all right. Welcome back everybody. Take a look at what is happening with the futards this morning. Many Earnings Reports weve seen some big dow components doing better on the bottom line and that has helped things this morning. The dow futures up by 54 points and s p futures up by six points and the nasdaq up by 18. Take a look at shares of under armour, again. Shares of Harley Davidson. Earning topping consensus and the company is lowering its estimated growth rate for the full year for motorcycle shipments. Its citing competitive discounting among other things. That stock down by 5. 7 . Take a look at shares of under armour once more. The stock is down this morning. Down by 4. 5 because the guidance, while its raising its own guidance not where the street had been anticipating. Talking about how 2015 net revenue will come in at about they think 3. 78 billion. Slightly above the 3. 67 billion that they had been guiding in the past. The street was already at 3. 82 billion in terms of that revenue. Blame it on the company or the analysts . Look, for a haygrowth company, for a highgrowth stock, you anticipate big numbers. What happened, the street was already expecting bigger numbers. The stock has been built up based on these higher numbers that the street had been anticipating. Even though these are better than the street guidance analysts got ahead of themselves and the stock got ahead of itself. They also talk about what they are looking at. Some things that continue to reflect the net impact from the connected fitness aquacquisitions including onetime deal related costs. Including playing in on some of this as well. The stock down by 3. 8 . Its a huge gains. We just saw them while you were talking, becky. They did the three month. 26 and the six month was 25 . And theres the three month and the one year was like 60 . Giving up 3. 8 . Not higher than the high they already had projected. Not the end of the world in under armour as we know it. As we have been talking about all morning. The arrival of a deadly bird flu is raising a red flags for Companies Like hormelfoods who said it would sell less turkeys. This could be a huge buying opportunity for investors. Here with us on the set is farrah oslum. Food analyst at stevens. Good morning to you. Good morning. Thanks for being here. My pleasure. First of all, before we can get into hormel and its a buying opportunity, but this outbreak in perspective for us. We hear the huge numbers and it seems remarkable scary and a little shocking. Is it . It is notable, but not shocking. And not scary. The bird flu has so far affected about 1 of poultry in the u. S. The impact is at its very broadbased and spreading everywhere from california up to minnesota and down to arkansas. And you think its going to spread even further . You seem to think this is a buying opportunity, which i imagine means you think this is ultimately contained or gets contained very quick. We have a lot of faith in the usda and poultry companies. They have been very good at containing diseases and have been able to recover quite quickly. We note last year the hog industry was hit by the hog flu and has recovered remarkably quick. And we have record declines in hog prices. They are down 50 . In terms of price becky mentioned price is not changing that much. Just a function. They sound like big numbers but as a percentage such a tiny piece of the business. How big is the u. S. Flock. If you wipe out 5. 3 million hens, and it doesnt change prices. There is only sort of 1 . That represents 1 of the industry production. Just to push back. It has spread to six states. It has. However good the usda is they werent so good to stop it from spreading to six states. Is that a cause for concern . The issue is that its being spread by wild fowl the migration pattern of the birds that is causing the spread. Once the migration is curtailed and as the weather its not inside the agra business. We dont have that much time. But i want to get it. Make the case for wine. Now is the time to buy because you see this as just a temporary blip and who would you buy . We would buy tyson and hormel. Protein demand globally has grown 6 and annually very tight supplies and we think these three companies are very well positioned. You look at hormel trading at 55. 88. That should be trading where in your mind . We believe that should go to 63. Within the next 12 months. Want to correct myself. 12 states is the bird flu. Thats even more. Farha, thank you for coming in this morning. Coming up a real house wife of new york. I watch. I will admit. I admit, i watch the real housewives of new york. I want to know if she hates mona or loves mona. She has the big skinny girl line of product of cocktails and shapewear and appliances. I know a lot. Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Good. Very good. You see something moving off the shelves and your first thought is to investigate the company. You are type e. Yes, Investment Opportunities can be anywhere. Or not. But you know the difference. E trades bar code scanner. Shorten the distance between intuition and action. E trade opportunity is everywhere. Why do we do it . Why do we spend every waking moment, thinking about people . Why are we so committed to keeping you connected . Why combine performance with a conscience . Why innovate for a future without accidents . Why do any of it . Why do all of it . Because if it matters to you its everything to us. The xc60 crossover. From volvo. Lease the well equiped volvo xc60 today. Visit your local volvo showroom for details. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. When we come back were expecting earnings from verizon. Should have a big impact on how the dow trades today. Welcome back to squawk box. The stories front and center at this hour. Travelers earning a penny short of estimates and revenues also missing the mark and the company is raising its Quarterly Dividend abouncing buy back. Buying back another 5 billion in stock adding to that trend a mixed quarter for i. T. Revenue fell short. Same story across the board. Company said it had a good start to the year despite currency head wind. Dupont, of course, the target of nelson and revenues are short, too. Company says its results were impacted 25 cents by currency and dupont increasing its Quarterly Dividend by 4 to 49 cents. Bill george out on twitter this morning raving about saying shes doing a great job and no need to change horses as he says. Given those numbers. So, there you have it. We are also waiting on july earnings. I have a press release here. It says 1. 02 in the First Quarter of 2015 compared with 1. 15 in the First Quarter of 2015. 84 cents. Its a 7 cent it says here. No adjustment to this quarters result. Im sorry, do you have it . It is a 7 cent beat. No adjustment for this quarters result. Increase in consumer revenues. 11th consecutive quarter. Im reading the top of the press lease. 133,000 vios internet and 1,000 net additions. That seems like a lot to me. Wireless they added 565,000 retail additions. Total revenue up 6. 9 . Verizon they say, also had a strong wireless customer loyalty. They say 1. 03 retail churn rate. Year over year. The revenue numbers look like its 32 billion. Slightly light of what the street was expecting. Any commentary of the issue we have been talking about the past couple days which is this new package theyre offering and what kind of fight theyre going to get into with disney over this espn business. You gave that half a million and 55,000. You get that number right . Interesting. I don know how you read this stuff these days. So many moving parts in the telecom companies. What is good adding the fios subscribers and adding the total number of subscribers on the wireless. The numbers that people are watching. Look at the stock right now. Again, this is the fourth dow component of the morning and right now that stock is indicated higher closed yesterday at 49. 38. As you can esee, itssee, its up this morning. Verizon beating on the top line just slightly light. You can almost call it in line on the revenue number. If you look at what happened with dupont this morning. The first of the dow components. Beating on the bottom line missing on the top line and if you look at where that stock is trading right now and just call that up really quickly. It looks like right now, that is straddling. Its relatively flat. Could open lower and open right about in line. Utx. That was a beat by 13 cents. Important note to be watching, revenue did come in light and the company did not raise its guidance. Looking for 7. 05 and you may wonder why the 13 cent beat. Utc is how they refer to themselves. Some items, some things that happened earlier than anticipated. It wont change their fullyear earnings. Just maybe moving in the calendar shift somewhere analysts had been expecting those things. That stock indicated up by 1 and travelers. The other dow opponent to report this morning. That stock also coming out with earnings that missed by a penny on the bottom line slightness of the revenue, you could call that one in line too. Positive news that they started talking about approving another 5 billion Share Buyback and raising that dividend by 11 . Already a 2. 5 yielder. Raising by another 11 . You can check out right now that that stock is down by about 2 those are the four dow components we heard from this morning. In the meantime, dig through some of the numbers and this morning last week we showed you this flawless 100 karat diamond. You probably remember it. Didnt even look real. Up for auction today and expected to bring 19 to 20 million. Sotherbys is selling that diamond for an owner that wished to remain anonymous. Kimber brberlyclark reporting. Operating profit 10 to 11 . Joining us now to talk us through the numbers the ceo of kimberlerclark. Kleenex kleenex, huggies and scott sold in 175 million countries across the globe. Tell us about the quarter and what are you seeing in terms of demand here in the United States and around the globe . Very solid quarter, as you can tell. Solid revenue beat. More of the beat was outside of the u. S. We have very strong results in emerging markets. Places like china, our diaper business was up 30 . Fem care was up 30 in china. Not sustainable, obviously, but a very good start. Organic growth. Latin america and places like brazil had a very solid start to the year as well. Pretty widespread good execution, good innovation happening in the market. Quarterly sales were down by 4 . Is that because of the dollar impact . Correct, yeah. Currency was a ninepoint drag in the quarter. Organic sales were up five. One price, one mix. How big of a head wind do you think that the currency is going to be for the rest of this year . I know you were offering guidance about what it is going to mean. Cut sales by 10 over the full year. It was a ninepoint drag on top line and the First Quarter. Were saying nine to ten for the full year. Not much worse from here on out. If you look at where spot rates are today relative to our guidance, theyre similar in most cases. Bigger impact on the bottom line and in the First Quarter, the bottom line impact was 25 cents a share. Almost 18point drag and, so were saying this could be as much as a 20 drag for the full year. Tom, this is a question of dumb math here. Humor me for a second. If the dollar stays where it is right now, are next years First Quarter revenues profit up by 10 because you dont have the dollar drag . Yeah, i mean youd see that strong top line growth. Now, obviously, we had a great start in some of these markets. But, you know thats the comparison. Part of it youre getting some pricing, steve. These markets where you had a big currency swing and you probably wouldnt get as much price in russia for example. Weve been taking price as crazy and you wont get that same level of benefit. To the point that you felt like it was maybe a good idea to hedge some of your foreign currency earnings . We never hedge translation exposure. I really have a hard time trying to spend cash to hedge a noncash exposure. We do have transaction exposure where we can. If were buying bulk in a market well hedge part of that purchase, if we can. The places youd like to hedge, you cant find anybody to take the other side of that battle. Hey, tom, you are offering guidance for the full year of 5. 60 to 5. 80. Streets just at the low end of that. You sound pretty optimistic. Fair to paint you as somebody who is looking at things and thinking its pretty upbeat from here . We really feel very good about the start to the year. A lot of moving parts out there. We have great execution, Great Innovation coming and at the end of the day we want to be there with the products that mom needs. Who are you stealing market share from . You know in the emerging markets still so much growth. You talked about underarmour earlier try to create demand. We look at market share and also looking in china. How many cities are we in and how can we expand our distribution and go into ecommerce more aggressively. We are recruiting consumers into the category and then helping them use their products in the right way over time. The stock is trading higher this morning. Tom, we want to thank you for coming on and joining us right after the earnings like this. Thanks very much. When we come back im getting so excited about this all day. Im just saying. The entrepreneur who launched skinny girl cocktails and built into a lifestyle brand and beauty line and even a blender. Bethenny frankel will join us. Well do that right after the break. When a moment spontaneously turns romantic why pause to take a pill . And why stop what youre doing to find a bathroom . 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Com [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print Amazing Things right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Welcome back to squawk box once upon a time a struggling food chef to went to win the title of Martha Stewarts apprentice. Turning out a wide range of Consumer Products and not busy enough, writes bestselling books. The latest that says i suck at relationships so you dont have to. Well talk about that and many more. Bethenny frankel one of the real housewives of new york. Thank you for being here with all of your stuff. Thank you for having me. This is a much broader line than i realized. I think most people think it is just cocktails. It started with over 20 varieties of wine vodkas ready to drink cocktails and we moved and we have different partners. We move under to microwave popcorn, dips look at water enhancers, appliances arizona in our nonalcoholic beverages. I get into businesses how did it really happen . What was the inspiration to begin with the vodka . It start would the skinny girl margarita because it is a practical solution for women. Where did you come up with the skinny girl name . I think it was around 2007. Im not, it might be a little later than that. Was it a moment . I think there was a moment. I pretty much like things to be straight forward. I dont like things to be ambiguous. When you see this, it is a thin girl. The name describes what the brand is and the name i said it, i said its a skinny girl margarita and i felt it and you have to go with your gut and business. Once you, once you do the margarita, do you say to yourself, okay it is going to be all of this or this just sort of happens organically. Were you empire building from moment one . It resonated with people and then i went to find the right partner to create it and then partnerred with beam which is now beam simply in cocktails. Were partners in cocktails and then maintain the intellectual property. I created all these other categories. But i do it as i go. I dont say i want to take over the world. I think there needs to be a great lowcalorie hummus. Lower in calorie and better in taste than the competitors and the nutritional bars. It keeps going. Somebody approaches you now and says i want to have a skinny girl version. Im looking at that soda stream right there. It is unique. Looks like the one that has somebody elses label on it and its the skinny girl version in there. Thats a great question. I only cobrand with certain people. Orville redenbacher is the best in popcorn. Their name is very tiny. Its skinny girl. They dont cobrand. And arizona has never cobranded before either. They usually just have this is a massive licensing business or licensing in the name. How involved are you in the product . Who actually owns . I own the intellectural property and the brand completely except i have a partner in cocktails. I have combination but i am responsible for every word, every bag. The logo, the flavors, everything. And some people i will cobrand with, depending upon the brand. Not involved at all in this business at all has no knowledge at all of what is going on. I know you from the housewives. And i think of you, to be honest, oftentimes in us magazines. Is this what you do all day . This is where i enjoy being the most. This is where i thrive and its a lot about gossip and a lot about my marriage and my relationships and what i ate and what i wore. But this is where i enjoy being. Getting up this early i enjoy. How important is housewives and being in us magazine and the tabloids and the gossip to this brand. I had a talk show that was five days a week and it was not the same target audience as bravo. And being on bravo, it is the inflewuewance withersin influ wens influance with. I live and breathe this brand. Every taste, every product. If i dont like it i obsess over it. I dont sleep. To answer his question do people come to you now and that was an awesome question. It depends. I wanted to do a nonalcoholic beverage and i initially didnt want it to be sparkling. There is a big market in sparkling. Thats fine but next a Natural Energy drink or recovery drink. The same thing happens with the chips. I want to do interesting flavors. You go back and forth. Another partner came to me with jerky. Y jerky. Skinny girl jerky. Seems i was about to do burgers because they were going to be 120 calorie burgers. If its jerky and its lower in calorie and lower unsodium. It might work. But tell me how memory activist. Men buy a lot and they say, cant you call it skinny guy . Right. The launching of skinny guy . No. How about just skinny. Its not about skinny girl. A skinny girl who could be a size 12 and how you feel and being confident and indulging. This brand is about allowing. Allow people to have. As far as skinny guy becoming a brand. Its not going to be about women. You dont know an apple on your computer is an apple the fruit, but you dont think about it. Its a brand. You try to please everybody and you please nobody. This is the brand. Its targeted towards women. Skinny girl potato. Trying to poison you. I brought the skinny girl margarita home. I have. Its good enough for a man. It was unfair. Lets talk about how much you suck at relationships. And what thats about. The point is i used to suck at business and here we are. I learned from my mistakes and i go with my gut in business. What is the big lesson for all of us . Women dont go with their gut in relationships. They convince themselves the biological clock and fairy princess when theyre kids. They feel it is the right time and they have to make a decision and they dont go with their gut, the way men do. If we used the truth rather than fear, we would be better off. Pushing into a line of undergarments, too. This is from early on. This is skinny girl shapewear. Very well made and well priced. Shapewear you want people to see. How does it compare to spanx . Were not as big of a business as her. She was the pioneer. I think that a lot of it is prettier and i think that its an amazing product. This is a very very inexpensive product and it looks like its 200. Its really beautiful and you want to wear it underneath and keeping you together for those special nights. Do you have a business background. Do you take business courses . No, this is my mba. Really its so interesting. What is it that you bring when you try to figure these things out about costs . Is it just your experience as a shopper, as a person who is looking for value . I feel like i am a consumer and i am totally looking for value. I think i have an idea of what women want and then what i dont know, i ask other people. I know exactly what im good at and i know what im not good at and i do have great partners and i have a sense for this. We all make mistakes. I have a ereality show question. How real is it . Do you really love mona hate mona ramona. What is it . When i read this stuff, what am i supposed to think . A lot of irresponsible press but watching the show yes. Its exactly how i feel and im not afraid for people to not like me, as long as im being true to myself and open to scrutiny now that im back on the show. The show is real. The feelings that i have for these women are real love or hate or annoy or whatever. And because, yeah why would i put myself through that if it werent true . Why would i allow people to dislike me and criticize me and open myself up. They love you because theyre buying the products. They are buying the products but theyre good products. Im happy. Im grateful. But i do love being here. Fantastic. Im having her on as a guest host. Qualify. Totally. She talks business better than half the guys on the show. 100 . Thank you. Thank you. Thank you guys. You said you had nothing to contribute. You said so much. I just listened to. I think it was cruel and unfair to put me in front of anything skinny girl. The producers are having a good laugh at this. Coming up, a flood of earnings. We have been keeping you up to speed. The four dow compoentnents that reported this morning. A look at other companies with earnings out in the last hour. Ce. Today, i lead a team that sets our Global Safety standards. After the spill we made two commitments. To help the gulf recover and become a safer company. Weve worked hard to honor both. Bp has spent nearly 28 billion dollars so far to help the gulf economy and environment. And five years of Research Shows that the gulf is coming back faster than predicted. Weve toughened Safety Standards too. Including enhanced training. And 24 7 on shore monitoring of our wells drilling in the gulf. And everyone has the power to stop a job at any time if they consider it unsafe. What happened here five years ago changed us. Im proud of the progress weve made both in the gulf and inside bp. Lets take a look at some stocks to watch this morning. Couple things to pay attention. Earnings beating the streets and sales fell for the 12th straight quarter. The strong dollar continues to be a head wind though. Empty calories that she likes to talk about. The revenue thats not profitable. Thats what they have been trying to shed and get rid of it. Check out shares of arm holdings. Powers the iphone its profits topping expectations. Software giant posting better than expected results. When we come back the battle over athletic gear and masters win marks a huge vktry for his sponsor underarmour and they locked him in before he earned his pga tour. When squawk box returns. Ging ] your Car Insurance goes up because of their bad driving. People try all sorts of ways to get rid of them. [ driver panting ] if youre sick of paying more than your fair share. [ screams ] get snapshot from progressive, and see just how much your good driving could save you. Will you help us find a house for you and your brother . Woooooah youre not just looking for a house. Youre looking for a place for your life to happen. Zillow under arm our play on the same field as nike. The stock sitting near an alltime high. The right plan to take it to the next level . Developing this morning, a bird flu outbreak hitting millions of chicken and turkeys across america. Can we expect more cases to crop up and what impact will this have on prices for poultry and eggs . And the legend lives on. Its been 50 years since the famous photo of the monitor appeared and now google joined the hunt in scotland and they found something. The final hour of squawk box begins right now. Live from the most powerful city in the world, new york. This is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. Im becky quick along with Andrew Ross Sorkin and steve liesman. Watching the futures this morning, been in positive territory all morning. In fact, this looks like the high end of the range we have been watching. Dow futures now up above 70 points and s p futures up and nasdaq up 18. 5. Green arrows the leader of the pack is dax. Up 0. 75 . Greece down by 3. 5 . A developing story out of the midwest this morning. The bird flu virus found in an iowa farm. More than 5 million hens must be destroyed as a result. Iowa among the 12 states that now detected bird flu since january including wisconsin. The risk for human infections considered to be low and no human cases have been reported. We talked about it with an analyst earlier. Hormel turkey will sell less this year because it forced farmers to kill more turkeys in the last month and only affecting 1 of the marketplace, if you will. The analyst we had on earlier said buying opportunity because, u. S. Government i didnt know. But it was interesting what she said. Her response was it was the wild fowl that is spreading the disease and not a matter of inaction or late action by the usda and youre right that analyst said very specifically that her call is based on the faith in the usdas ability to contain this disease. One thing we didnt have time to talk about earlier the first effect is on corn demand. That the turkey and chicken inventories are among the biggest users of corn and soybean meal. He thinks you will eventually see it and that corn meal is where he thinks it will show up. An offset to the price hikes. You have hout breaks like this and youll have for example, if turkey prices go up people blame the fed. But somehow, remember we had the spike in we could do a bacon news animation right now. You had the spike in bacon prices. The fed is at fault here for this run away inflation, but that was a disease among the hog industry. Moving on here. Four dow components reporting this morning. Travelers earnings and revenues missing the mark. But the company is raising its Quarterly Dividend and announcing it is buying back another 5 billion in stock. A mixed quarter for united technologies. Earnings beating handily but revenues fell short. The company said it had a good start to the year despite currency head wings. We should go back to the guidance for this company, again. Beating by 13 cents. A pretty big deal. Didnt raise their guidance for the full year because some items shifted in the calendar year. They saw some gains earlier rather than later. I think you said anticipation of more currency head winds down the road. Dupont earnings topic consensus but revenues are short. The company says its results were impacted by 25 cents in currency. This is a recurrent theme here. Increasing Quarterly Dividend by 4 to 49 cents. Verizon earnings were 7 cents better than expected. Revenues missed consensus by just a little bit. And, is it you, becky . Under armour another stock we have been talking about. Posted quarterryly results. Revenue raising 25 . The athletic wearmaker raising full guidance and those numbers are short of what the street have gotten to and thats why you see the stock down by 3. 5 and analysts getting ahead with themselves. The ceo kevin flank knows this is the companys straight quarter above 20 net Revenue Growth and remember those 20 quarters a lot of them during the great recession. This Company Managed to grow during those times. Does raise the question about whether the Playing Field for Athletic Apparel is big enough for underarmous and nike. Founder and incoming director of the Sports Business Program at Washington University in st. Louis. Brian nagle with oppenheimer. Brian, you first. What do you think about not just this quarter, but also about the guidance for the year . I think, becky, you summed it up pretty well. This is by most measures this was a very good quarter. I think the question is is it good enough for the lofty expectations in the marketplace . We see very few companies out there in the consumer space that can post this kind of top line growth consistently. But give on the run in the stock and expectations embedded in under armour. Some cracks here. What is your price target if you have one . I have a neutral or perform rating on the stock simply because of valuation. I think under armour is a phenomenal company. They are quickly approaching that number two spot in the Athletic Apparel and footwear manufacturer space. But the valuation keeps me on the sideline. Patrick, lets talk about the field overall. Nike and under armour have gone neck and neck in terms of what theyre doing with their new products and players theyre lining up for endorsements and sponsorships. What do you think about what is happening so far . Under armour has to be commended for their eye for and this year in the nba and jordan speith. They locked him back into this tenyear deal back in january. What they paid is no where near the 20 million to 25 million that nike is paying rorry mcilroy. They have an eye for talent. As was mentioned, a huge gap. Nike is at 27 billion and under armour at 3 billion. A huge gap. But under armour closing in a little bit over time. Patrick, in terms of who likes which brands and which brands perform better in different arenas. How do you shape this up as the battle between these two companies . Well, whats interesting is i wonder if nike had to do it over again, would they sign jordan instead of rorry mcilroy because hes an american and that does have an impact at least for domestic sales. Having rorryy mcilroy and tiger woods. As great as theyre going to be, theyre not going to necessarily help turn around the downturn in golf and neither one will have the culture or social significance of tiger. Guys heres a question that i wonder about when you think about, when you think about these athletes and look at the stock. After spieth won under armour jumped. Is that actually i could see some additional sales. But is it that, is it a true magnitude jump like that . It absolutely can be. Again, i was thinking about this, watching the tournament. I am a huge golf fan and watched most of the masters. All youre seeing especially with a wiretowire winner like spieth was you see under armour. At the end of the day, hes getting that exposure for the company. They estimated 34 million in Media Exposure for under armour during the tournament. That does resonate especially if he keeps winning. First of all, jordan spieth. Jordan spieth. I want to pick his picture up. My 14yearold kid sitting next to me saying dad, i want to go golf. Thats while he was asking questions about golf. I actually emailed joe to ask him some questions about golf that my kid had asked. He wants to go golfing now. I think thats gold guys. New blood. Thats what the sport and how you left it. These guys are pessimistic about spieths ability to be that rock star that brings the kids in. Im telling you, at least one kid is interested. Thats the golf story. Lets look at some of the other sports that are out there and trying to figure out who dominates where. When it comes to basketball who is the leader there . Well yeah. And my view nike still is on top of things. You look at what theyve done this past year with lebron and his return you know his triumphant return to cleveland. Might be extremely triumphant depending on how they do in the playoffs this year. Becky, one thing you have to mention the ving sports and then basketball and soccer where the stars really stand out. Its in those sports that you really see the star athletes and soccer obviously, messi, these athletes certainly have huge impacts because those are global brands. And basketball, the stars in basketball, like lebron and like kobe, basketball, at least of the american sports, is the most international because where guys are coming from all over the world. You know, i cant believe we had this entire conversation and havent mentioned adidas. What about them . Its funny you mentioned it. If i can twist it back into golf. As good as spieth and mcilroy are. Last year taylor made adidas was down 30 . Golf is too expensive for the average folk. So, unfortunately, its going to take a lot to try to build the sport back up to where it was in tigers hay day. One other thing, does the success in golf transfer over to other sports . Meaning you see the logo in the golf arena and do you then go buy under armour basketball shoes . Sneakers. I dont see that so much for under armours situation. Now, in nikes case because of just the quality, the strength of the brand and the other thing, too andrew is in economics we talk about first mover advantages. Nike has that over under armour and such diversity in their brand. But under armour is coming. I saw kevin playing sp. Patrick brian, thank you, both, for joining us today. Thank you. Kevin plank sold grateful dead tshirts in the parking lot. Coming up dow component verizon reporting a short time ago. We go through the numbers and find out if its new channel plan can connect with customers. Later, is it time to get out of u. S. Stocks and into emerging markets . Veteran investor mark mobias thinks so. Investment group cio if he agrees. Squawk box coming right back. If youre looking for a car that drives you. And takes the wheel right from your very hands. This isnt that car. The first and only car with direct adaptive steering. The 328 horsepower q50 from infiniti. My name is bret hembree. I am an electric crew foreman out of the cupertino service center. I was born and raised in the cupertino area. Its a fantastic area to work. The new technology that we are installing out in the field is important for the customers because system reliability i believe is number one. Pg e is always trying to plan for the future and we are always trying to build something stronger and bigger and more reliable. I love living here and i love the community i serve. Nobody wants to be without power. I dont want my family to be without power. Its much more personal to me for that reason. I dont think theres any place i really would rather be. Welcome back to squawk box. The futures right now up about 70. Up 59 now. Still pretty strong. 6. 25 on the s p 500 and nasdaq at the open would open up nearly 19 points. Shares of Harley Davidson down sharply this morning. Earnings topping consensus but sales were short and the company is lowering its estimated growth rate for the full year motorcycle shipments citing competitive discounting among other things. Verizon earnings were 7 cents better than expected. Still everyone talking about verizons own over the top program. Jennifer is of wells fargo security. Good morning to you. Good morning. Youre impressed by these numbers, unimpressed by these numbers . Im impressed. I think they offer further evidence this is a Company Seeking balance and profitable growth on both sides of this business. Wireless and wireline. And so when we look at these numbers, the big ones im looking at i assume are fios in terms of the additions and im looking that wireless in terms of the additions. Yes, wireless were actually a little less than we were looking for and i think that of the street. Importantly, tablets for almost about 800,000. Thats really verizons strategy at this point. Keep in mind they have 100 million customers. As they layer on new devices they will be more on the internet side. You mention the overthetop offering and i think part of this is very much laying the piece work to that plan. Lets talk about that and how that is going to impact the Company Going forward. Your expectation obviously, a big debate about the way theyre offering these packages in terms of these, kids package, sports package and you layer them on top. Disney that owns espn saying this isnt in the contract. Youre not allowed to do this. What do you think happens behind the scenes . I think we have put out a report recently talking bout how with their Wireless Operations they have the largest, the biggest carrier that wireless is very much becoming a part of the conversation in over the talks. Even since the at t direct tv deal that was announced last may, may of 2014. A lot of data points suggest you dont need to own a linear tv asset to have a strong relationship with the content company. Even with the noise of last friday with verizons new packages, i think that youre going to see more and more of the type of the content announcements coming before we see the former offering announced this summer. You think it will actually happen . We have to see what happens with disney. I think a point was made this morning how this resolve will say who has the strength in the conversation. But i actually think that theyre providing an interesting hybrid solution that is going to appeal to a lot of people. When you say that ott, meaning over the top and what have you is now going to be integrated into the wireless piece of this business. Are you talking about people watching television on their devices in equivalent to ot or Wireless Network . I dont think were talking about replacing what were all watching in our living room or family room. I think its more a compliment to that. I am at my childs soccer game and with want to see a tidbit of something. I am watching it on my mobile phones. Verizon having the field they do, again, with over 100 million customers and thats where these tablet editions play such an important role. I think were going to see a lot more. But real quick. If shes right about that and then you talk about the comcast, timewarner cable issue. Comcast owns the broadbound pipe but if you believe wireless truly competes the dynamic changes. I dont know if you answered this or jennifer answer this. I was talking to a tech guy from verizon the gigahertz spectrum of video over wireless . I dont want to interrupt. But i think spectrum in general, be it midband high band low band is critical. I think there you have got to give verizon an important edge. You know they were active in the auction but not backing down on Capital Expenditures unlike others. I think thats critical. I think well hear a lot more on their strategy. My understanding there is a spectrum that is the same spectrum used by your Wireless Phone in your house. And theyre going to auction this off and this guy would tell me this would absolutely change wireless video over wireless. It will make it so that it really works like a tv. But heres the question. Economically, do you ever can you ever make the economics of wireless competitive with wire line . I think that is physics issue of being able to actually be able to stream the same type of bandwith over the wireland. Thats the issue when it comes to the competitive debate were having. I think its only even passable if you continue to invest in your network and thats something verizon again, is in no way, shape or form backing away from. Jennifer, thank you for joining us this morning. Thank you. Thanks a lot. When we return this morning, have you seen googles doodle today . Paying homage to a famous photograph and joining the hunt for a monster in lockness. Well have more on that after the break. Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Tdd 18003452550 [ male announcer ] your love for trading never stops tdd 18003452550 even on the go. Tdd 18003452550 open a schwab account, and you could earn tdd 18003452550 300 commissionfree online trades. 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Tdd 18003452550 schwab trading services. Tdd 18003452550 your goto for trading knowhow. Tdd 18003452550 placed explosive to blow out of the water. Summoned the help of scotland wizards over the lake and the local residents and the existence of our under water ally. Napoleon dynamite. Could google street view possibly found evidence of the lochness monster. Used the new cameras and teamed up with local divers in scotland to capture images above and below the water. One image did catch both google and loch msz monster by surprise. There it is. Is it a log . Is it a rock . Is it a duck . Is it the monster. The release of this also coincides with another great thing. That doesnt look like the lochness monster. Can we switch between them . This is an insurgent photograph. Released on this day in 1934. That one, maybe. That looks like a couple ducks, are you kidding . I dont think its ducks. Not when you zoom in. Can we zoom in guys . We cant. We cant zoom in but just trust us. Just having fun here. You got to really. Thats not proof. You have to really just all over the story here. Photo revealed it be a fake. The original photo. The one we were looking at. The sunday telegraph. Dont believe everything you see, steve. Really . Thats not the loch ness monster. In the weird files another story for you this morning. A 120pound competitive eater conquered dinners at a restaurant in amarillo. Thats not health yy. Three steaks plus three baked potatoes. Three shrimp cocktails, three salads and three rolls. She finished her first big dinner in 4 minutes and 18 seconds, which beats the restaurants record of 4 minutes, 58 seconds. What do you get if you win . More steak . Heart burn. Im grossed out. You enjoying your breakfast, everybody. Thats totally disgusting. Coming up the ceo of we should send that woman some skinny girl product. She doesnt need them. Shes 120 pounds. Thats true. Cio of merrill private banks give us his thought. Where chris wolf is putting money to work for clients. Millions of chickens infected with the bird flu. Were going to take a closer look at how the latest avian flu outbreak. Squawk box returns in just a moment. [ ] there is an ancient rhythm. [ ] that flows through all things. [ ] through rocky spires. [ ] and oceans swell. [ ] the endless. Stillness of green. [ ] [ ] and in the restless depths of human hearts. [ ] the voice of the wild within. [ ] welcome back to squawk box, everybody. Lets take a look at some stocks to watch this morning. Kimberlyclark reported profit of 1. 42 a share. Nine cents than the street was expecting. Kimberlyclark warning that currency effects will cut operating profit by 10 to 11 . Adjusted quarterly profit 2 cents better than expected. Network Security Company benefiting from the addition of 8,000 customers during the quarter. Revenue was helped out by the cheaper euro. Were also talking about ibm this morning. Earnings beat the street but sales fell for a 12th straight quarter. The strong dollar continues to be a head wind. But becky and i have been corresponding with their Vice President of communications this morning. And we had an analyst on earlier who, and said, you know ibm is not a top tier player in the cloud. I dont know if we have this full screen. I sent we do have it or not . We dont. I guess well have it later. But i asked, are you saying that ibm is as big as amazon and this person wrote back and said yeah. We dont know ill read it to you. I have it right here. Do you have it there, becky . He said, theyll report amazon on thursday, so well see. But our last 12 months was 7. 7 billion. Thats revenue trailing earnings from the cloud. A revenue from the cloud. Thats more than what they amazon, had indicated in the past and its growing fast. As you said, you being me nuthing to shake a stick at it apibm is talking a little cloud trash here saying you know were not a secondtier player here. I did notice last year and he came into the new job at microsoft. They asked who our competitors were and he just mentioned Top Competitors of who he thought when it came to the cloud. He didnt mention ibm either. He mentioned hewlettpackard and google google. I was surprised not to see ibm in the running. Ibm investing more money and we will be able to compare this better if amazon tells us more numbers about it. You have another message for this Vice President of communications about jenny, dont you . We would love to have jenny come on. We could solve all of this. Same thing with amazon. Amazon doesnt always give all the numbers that youd love to hear on some of these things too. Ibms point, theyre disclosing they are saying they invested 1. 2 billion in new Cloud Centers around the world. I dont know if thats a lot or a little. Anecdotally it feels like amazon has to be bigger not because of amazon in the retail space but if you talk to a lot of different companies, they rely on amazons cloud. What we dont know, enterprise. Amazon give us some real numbers. Ibm will sit there and talk about it. We have done a lot of research on this. I want to look into it and see what amazon has put out. See what one of our cloud experts say ibm is a small player, big player or medium player. In the meantime talk about the avian influenza. Morgan has more on that story. The usda says an iowa farm with 5. 8 million egg laying hens has been infected. It brings the total number of chickens and turkeys that have been impacted in the states to nearly 8 million. The usda has not i. D. d the farm, but that does represent almost a tenth of iowas hen population. Just in recent weeks weve seen cases in iowa arkansas missouri, as well. Wisconsin Governor Scott walker has declared a state of emergency issuing quarantines and enlisting the States National guard to help with cleanup in that state. Now, just to be clear, guys. There have been no human cases detected in the u. S. The Agriculture Department says this poses little risk to human health. But it is bad for business. Weve seen canada china, mexico, the eu all ban poultry imports from certain american states since the start of the year. And last night, hormel foods said 2015 earnings would come in at the lower end of guidance thanks to significant challenges in its turkey supply chain due to this virus. Taking a share of other poultry companies, as well. Tyson foods and pilgrims pride and all three of those stocks are down since the start of the year. Guys, back over to you. Okay. Real quick, you know because i have now been looking at it it might be a little bit of a tossup. Between the two. But thats a surprise. Amazon does break out cloud revenue, too. They were one of the first and putting pressure on it. What is their cloud revenue . 12 months. But they throw a lot of stuff in there and there are questions about whats in there. Its news to us to hear that ibm is now such a big, as far as my understanding of the Cloud Business. Fidelity didnt list them as a competitor. Making some news this morning. The dow up over 200 points, that was yesterday rebounding from fridays selloff from chinas central bank. The futures at this hour up 61. Right about where theyve been. Between 50 and 70 all morning on the dow. 6. 25 on the s p. Joining us now where markets are headed from here. Chris wolfee and Investment Group chief investment officer. Do you want to weigh in on this whole cloud thing at ibm . The market was, in terms of how they took ibm earnings yesterday. A comthinguple things. First quarter unings and Companies Say earnings are okay but that top line is light. They dont say the weather, they say its the dollar or they say some other kind of slow down in business expenditure. Things being light on the top line is more troubling, i think, in this environment. Ibm was a good case for that. I felt yesterday completely lack of confidence in the 200point rally because i felt nothing that told me today, it looks like its continuing this morning in the futures. But today given the way things are going up and down by triple digits quite a bit the last several days. Stimulus. Where did it come from . U. S. To europe and now moving to china because weve seen the japan story play out. I think the confidence that there will be enough liquidity in a world where there is not a lot of alternatives where you see other players come in. China central bank they have to figure out their debt issue with more stimulus likely to keep markets propped up. If you look at whats going on we have to split. Stock prices going up and we have earnings. Look, theyre going to be in a recession in 2015. Thats more troubling. So lets 1,116 tell me what you do. We do a couple things. After we talk about the goal of what is important to the client and figure out where they want to be if their goals are longer term, we still have a pretty high component of equities and portfolios. Right now for a 60 40. 60 in equities and 40 in bonds. Less than we used to. How do you get out of the way of the and its frozen everybody, including myself, by the way. Went back and look at what i did badly in 2014 and not believing that the long bond could rally any more and being short. And now im going to be short again or i should be long . I dont know what to do. That 40 is much more of a puzzle for me than the part that should be the puzzle which is the 60 in stock. I think the reason you keep bonds and portfolios is two folds. You dont have a lot of other sources of income and liquidity. You can get coupons from your total portfolio or deriv ddz. But we dont know what the deflation risk looks like. Current income at any price is really what matters. So, with Companies Saying top finds are a little bit weak and still a lot of debt globally. That deflation pressure is not zero here. Get you to respond to something we talked about in the 6 00 hour. We asked mark what he thought about u. S. Equities and he ehad a little different opinion. Listen to this. Right now emerging markets outperforming the u. S. And the world. So, since the beginning of this year weve seen this outperformance. So, i think now is the time to shift out of the u. S. Markets. You agree with him . Disagree with him . Getting out of u. S. Stocks i think for somebody who has longterm liability to get out of u. S. Stocks and put it in china, thats absurd. Are there opportunities in emerging markets. There are reforms driven in india and the debt burdens in china. Manage the cost of being wrong. More emerging markets, but we want tabe more selective. When you say a little bit more. Just do the pie for us. So, that 60 40. The 60 in Global Equities we typically talk about clients having twothirds in the u. S. And a third outside u. S. And about a third of that so little bit less than 10 of the portfolio in emerging markets. How would you do with europe and asia right now . Really just the europe and japan. Kind of the big exporters have done extremely well. The currency is continuing to add to their earnings and play it that way. So, be relatively kind of equal weight relative to the world bench mark. Still want to structure that bond portfolio. What do you do . Youre going to be evenly spread out across maturities . Most of the u. S. Focused. Taxable municipal and state finances look really good. What is looking sketchy is all that dollar denominated debt. What about the term structure of the portfolio . Laddered out 15 years or so. In line with duration. Not a big bet and owning 30year bonds and looking at movements in the curve is being our main way to gather income. Id be very nervous with a 15average maturity in my bond portfolio. Ill get whacked by a freight train. If were wrong and growth picks up nobody is going to get hurt. The stocks should do reasonably well. Thanks, chris, that is great. Coming up energy inoivators and pioneers gathering in hoous houston for the conference and one of todays featured speakers will be herald hamm. Hes talking to squawk first. A new breed of startps are getting paid to hack. Bug bounties and hackers are making millions. The cto of hacker one joins us. How the company is helping twitter, dropbox and others find flaws and fix them. Squawk box coming right back. Financial noise financial noise [intercom] drivers to your marks. Go its chaos out there. But the mclass sees in your blind spot. Pulls you back into your lane. Even brakes all by itself. Its almost like it couldnt crash. Even if it tried. The 2015 mclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. Welcome back, everybody. The ihs spirit week conference is under way in houston. Showcasing inonovators and pioneers of the industry including herald hamm. Herald, great to see you. Hey, good morning. How are you this morning . Very well thank you. You know you said some things in the preinterview that id like to dig in a little bit to. There have been a lot of people who have been thinking that myself included that prices might come back quickly, just like they went down quickly. But one of your points is that it takes a lot longer to come back online than it does to take it off. It does. It takes quite a while. You know, its easy to shut it down. You know in fact in the last four months, 1,000 rigs have been laid down and, you know we have 105,000 people out of work. In this industry. So, it can shut down quickly. But it takes three to four times as long to bring back on becky. Not an easy thing to get all the equipment back and contracts, permits, well permits, everything in this industry takes a good while. About a sixmonth lag, if you will. If thats the case, where do you expect to see oil prices and Natural Gas Prices lets say, over the next 6 to 18 months . Well, you know right now as we predicted, you know, you shut down and pull back and thats the only thing we could do. We have to react to price. And so we pull back on the work that we did, you deserve cash. Im talking about the industry. Im not talking about continental. But everybody had to conserve cash. You shut down and once that happens, you know then supplies start to wain. It takes two to three months. We are seeing that now and over the next few months it is going to fall. We expect in the first year just from three primary plays in the u. S. That well see production down as much as 700,000 barrels a day in a year. That will mean what in terms of the spot price and the futures price . Well here we go again, on this roller coaster. You know you cut supplies and price goes up. It responds. And, so, it will be back up. Thats not good for producers and certainly not good for consumers to be on this roller coaster. So, this all comes about because the primary problem, of course we cant export. We cant access world market and we have a huge mismatch here of refinery capacity in the u. S. Twothirds of us now set up for heaviest hour and we cant access the sweet crude market that is out there in the world. The refineries that is out there that is available, should be available to us. Thats not. Your point in this you know another thing we talked about is whether or not u. S. Energy should be exported. Ive kind of been a little skeptical about whether it should or not. And you said something not too long ago that surprised me. The foreign owned refineries arent subject to that rule. They can do whatever they want. As a result there is an uneven market. Can you explain that a little bit more . Sure. Well, theyre sending out refiners. Theyre allowed to export. Theyre exporting exactly what the Consumer Needs. Gasoline, diesel all the Refined Products. Last month it was 4. 5 Million Barrels every day of Refined Products that goes out of the country. So, 4 to 4. 5 Million Barrels a day. Theyre allowed to export exactly what the Consumer Needs and, you know e, its crazy thing that they exist here in the world as far as oil policies. However, you dont think that that is the policy that is likely to change any time soon. Well you know its been about a threeyear process educating everybody. There has been a number of hearings on both the senate side and the house side on this issue. And, you know it may not take as long as everybody thinks. You know, i dont think anybody is rejecting the idea. I mean here we are thinking about sanctions on iran and let them export. And, yet, here we have sanctions in america that we cant export our oil . You know whats going on . Everybody else we built pipelines to canada and to allow them to export. Yet we cant here in america. Theres something wrong with this policy. Actually senator Lisa Murkowski of alaska said just that earlier this week at the conference that youre speaking at today. Do you think that movements like that, though will get play and will actually get traction and turn into anything . I didnt understand the question, again, becky. What you are talking about is actually something that senator Lisa Murkowski brought up yesterday at the conference youre speaking at today. She plans to introduce legislation later this year dealing with that. Do you think that legislation will pass . Yes. I understand now. No, she did a very good job laying it out. You know she understands the issues. And has held hearings in the senate. You know wonderful testimony was given there. So, i think it will move forward. I think it will move forward quickly. Theres a house bill joe barton has introduced. We expect the senate bill out shortly. Theres a lot of support for it. Theres a bipartisan issue. Both democrats and republicans are expected to sign on. You know so, theres a lot of different groups working on this. All the Oil Gas Industry associations are lined up on it. You know the Refinery Association supports it as well. Herald, a lot of controversy about whether fracking creates earthquakes. The u. S. Geological survey shows that over the last six years the rate of 3. 0 magnitude and higher earthquakes in oklahoma has been 300 times higher than it was in previous decades. What do you say to that . Well you know, these earthquakes primarily happen in areas where there is still oil and gas activity first of all. Second of all, theres not any tie to stimulation fracking of wells in oklahoma. Theres been no tie to that at all. You know it is proven that you know, you can put injection wells, disposal wells and salt water on salt plains and you can have some disturbance there. But for the most part that hadnt been the case. Like i say, these have been happening areas that theres no Oil Gas Activity in. So its you know were on top of the ridge that runalizeidge that runs all the way through oklahoma. Back in mid50s a lot of activity on that feature and were seeing the same thing again right now. Carl love to continue this conversation and we have breaking news right now. We look forward to talking to you again soon. We want to break in with this news right now. The generic drug company has now made a proposal to buy miland pharmaceutical pharmaceuticals. I dont know if we can flip the stock up there. Its in the premarket up 10 already. Up 75. But 82 a share is the price tag for the offer. That would represent, we should say about a 37 , 37. 7 premium over the stock on april 7th. This will be a 50 cash deal. 50 remember is mylan sought to pursue an inversion successfully last year. Teva an israeli company. Outside the country in terms of Tax Implications there for that company. This would put two of the Biggest Generic Drug Companies in the world together. We have more on this during the break. When we come back, well talk about that and a lot more. Well also be talking about companies that want to be hacked and they are paying hackers good money to do it. Sparking a new round of startups to build a safer internet. Well introduce to you hacker one and talk about this trend. Playing for the usual phil . Always stacy. At kpmg weve always believed leadership is about vision and integrity, confidence inspiration and passion. Pitching wedge. Thanks phil. And always having the courage to take your best shot. See the best of the best at the kpmg womens pga championship. Ideas come into this world ugly and messy. They are the natural born enemy of the way things are. Yes, ideas are scary and messy and fragile. But under the proper care, they become something beautiful. New breed of startups helping hackers make millions. Theyre doing it legally. Tapping Companies Like hack other one to help find flaws in their security systems. The cofounder and chief Technology Officer at hacker one is here to explain how it works. Who is getting paid . How much do you get paid . How do you find the hacker to go in and hack you . Securitys a very challenging problem. The Companies Participating in these programs are starting to acknowledge that and understand in spite of all the things they are doing internally you want to prepare for that inevitable circumstance when one of those security holes makes it out to the public. The concept of these programs is really rooted in trying to get as many eyeballs on the problem as possible. There is a diverse set of brilliant computer engineers, academics and security researchers out there capable of helping companies identify problems before foreign criminals would. What is the pricing model . We have the bug bounty business. Is there a bigger bounty if you can get in . Absolutely. There are bounties ranging up to the six figure range down to much smaller ranges. The averages is around 650 but they vary quite dramatically. How does it work . Its almost like a bidding system . Companies set the criteria of not all hacks are created equal, essentially. Depending what you could do with that security hole you found. Companies rate the implications differently. Across the individual security hole whats the worst thing people have found . Is there stuff you cant even talk about, i imagine . Theres plenty our customers find that arent disclosed. Some of the higher prey vulnerability are those in browsers. The Bounty Program for the chrome browser, fire fox browser, those things that allow you to take over somebodys computer by visiting a website tend to be some of the highest bounties you see in the programs. Its really fascinating. Weve got to get you back on the program and walk through some of these hacks. This is incredible situation. Scary stuff. Pretty interesting. Thanks so much. Lets talk more about this offer. Teva proposing to buyout mylan. This is a deal the street has a whole lot of skepticism about. This is 2 in cash and stock. Mylan had come out on the rumor this deal might be offered. This is a hostile offer and said they are not interested in this. Not only not interested in the sale doesnt expect a potential combination to clear regulatory hurdles. Thats why you see mylan at 73. 95. Well have more in a moment. Coming up is it teva . Teva proposing to buy mylan for 82 a share in cash and stock. Meg terrell will join us more. Technically retiring, sir. With a little help from my state farm agent i plan to retire in 15 years. Wow youre totally blindsiding me here. Whos gonna manage your accounts . This is a devastating blow i was not prepared for. Well, im gonna finish packing my things. 15 years will really sneak up on you. Jennifer with do your exit interview and adam made you a cake. Red velvet. Oh, thank you. I made this. Take charge of your retirement. Talk to a state farm agent today. I care deeply about the gulf. I grew up in louisiana. I went to school here. Ive been with bp ever since. Today, i lead a team that sets our Global Safety standards. After the spill we made two commitments. To help the gulf recover and become a safer company. Weve worked hard to honor both. Bp has spent nearly 28 billion dollars so far to help the gulf economy and environment. And five years of Research Shows that the gulf is coming back faster than predicted. Weve toughened Safety Standards too. Including enhanced training. And 24 7 on shore monitoring of our wells drilling in the gulf. And everyone has the power to stop a job at any time if they consider it unsafe. What happened here five years ago changed us. Im proud of the progress weve made both in the gulf and inside bp. Saving money is as simple as making small changes in your routine. If you make coffee at home instead of buying it every day you can save over 1,000 a year. Trust me no coffees that good. The more you know. Teva making a hostile offer for mylan this morning. Meg terrell has more. This is a bid expected for some time. Teva coming out 82 per share in cash and stock for mylan. Of course mylan already has made its own bid for parabo. Here would create a gigantic general earthic company. I imagine well hear more from you about this on the day. Squawk on the street starts right now. Good morning and welcome to squawk on the street. Carl is on assignment. Jim has the day off. He will be back tomorrow. Of course glad to have you joining us today. Take a look at futures as we start off a half hour from the beginning of the trading session. On a busy news day. Is there a look at what should be a highe