U. S. Equity futures at this hour have been a bit weak in the for the morning. You know what . Just the dow futures. That might have something to do with what becky is going to tell you about. The s p is actually up a point. The nasdaq is up about four. The nasdaq had some rough sledding lately. The dow is the index down today. Down about 21 points. Crude prices coming off a loss of about 5 . Wti posting the lowest close since november. Joe, i ae lewd eluded to it. Its sitting there at one price, then a totally different price. You think it has to do with the world we live in now . Absolutely. At 11 20 p. M. , oil is trading 45. 25 and the next hour 43. 76. How does that happen . Were the world is chasing alpha, when the quantitative models see an opportunity, which they see in oil, thats where all the activity is. It wasnt an overweight trader with fat fingers . No, and not pure fundamentals. Fundamentals are deteriorating for oil. It is seeing the opportunity, lowvol world. You go around, talk to the hedge fund desks, activity in oil. First friday of let me just think about this. First, we will get the jobs report at 8 30 a. M. Eastern. Polled economists predict the economy added 188,000 nonfarm jobs in april. That would be a rebound from the 98,000 jobs added in march. The Unemployment Rate is expected to tick higher by 0. 1 , to 4. 6 . More jobs predictions in a moment. I dont know whether you know where im going with this, becky. Its friday, and its the 5th of may, have i got that right . Man that is setting me up for serious cinco de mayo. Xwyeah, im talking tequila, margaritas. I dont need much of an excuse on a normal day. Thats not true. When you said that at the top of the show, i was laughing with the guys here, how is this different than any other friday. Wow. May 5th and its thats really good. You remember paul mccardny who used to be a total stoner. He got busted how many times on airplanes . Now he likes a nice margarita and some chardonnay. Thats my life, too. And a mint julep for this weekend. I dont like bourbon. I dont like bourbon. Have you had one . Yeah. I dont like bourbon. I dont. Im sorry. You . Are you going jims place . Jim cramers place . Thats a big mexican hangout. Becky im sorry, theyre telling me, you know, this is like you have to get that she has big news. Ive seen it. I knew this happened. Its very interesting. Lets hear it from you about Warren Buffett and one of his big investments. All right. Joe, you have been questioning Warren Buffetts investments in shares of ibm for quite awhile. He started about six years ago. Since that time, ibm has come out quarter after quarter where revenue declined. Thats five years of declining revenue. Buffett had been patient with n this, talked about how he liked the company was buying back shares, how they boosted the dividend, all those things were good. If you look at that investment over the course of time, buffett has made money on it but not as much as he would have had he invested in an s p 500. We caught up with buffett last night and asked him about the earnings. You know the street was disappointed by what they saw with ibms earnings. I asked if he was, too. Heres what he had to say. Well, i wouldnt say the specific earnings disappoint me, but i dont value ibm the same way that i did six years ago when i started buying it. Overall i think the six years that i revalued it downward. When it got up over 180, we sold a reasonable amount of stock. You sold a reasonable amount of ibm . Right. Least that i had seen you owned Something Like 13 billion or 14 billion of worth dont down the price. Im trying to think back the number of shares. We owned about 81 million shares. When it got over 180 180 a share. Yeah. Compared to the valuation then that i thought was appropriate, we started selling stock. Some of that was sold in the First Quarter. Most sold in the First Quarter. Some sold in the second quarter. How much did you sell . We sold about 30 . 30 of the shares . You owned about 9 of the shares outstanding at ibm. If you look at it this way, we had 81 million shares. So we probably sold in the area of 24 million, 25 million shares. But that was at a higher price. You were selling at 180. That stock has come down significantly since the earnings, i think its closer to 160 a share. Yeah. Would you still sell. I dont think we would be selling. We could buy. I continuously look at what they do. I look at the price of the stock. When it was over 180, i looked at what was happening and everything, they have run into tough competition. Why are you telling us this . They have things coming out in a week, and we have the annual meeting. Questions have come up about ibm, i would feel like i shouldnt get cute in terms of having it a week later, people looking back and saying what was he saying at the meeting. So, have you talked to ibm about this at all . Ginny rometty was out a few weeks ago. They had had some stock watch i dont know whether viewers are familiar with it, but there are stock watch firms, i dont even know their names, i dont know how many there are, but they a lot of Big Companies use them. Berkshire does not use them. They report to management who they think is buying and selling. In fact, i dont think ive ever even read a story on them or anything. I think it would be very interesting to know who they are, how much they charge, how they get their information. Because weve had that happen four, five times that a management will say they wonder theyre sort of hearing something, or something of the sort that we may be buying or selling. Like i say, i dont know quite how they get the information. But Ginny Rometty asked you about that . Yeah. She wondered whether it was true. They had gotten reports, or she had gotten reports. I said it was try. I didnt tell her how many shares or the rational or prices or anything like that, she said she whatever firm does that, that they had informed them that they thought we were selling. I said, well, we were. Or i had been maybe. Can you tell us again why you sold the shares . 180 doesnt seem like a ridiculously expensive fries consider i price considering where you bought the stock and where you hold it. Stock doesnt know what you paid for it. There you have it hes sold out of a third of the position. Sounds like he would have sold more shares had the stock not dropped so precipitously. He did say when we talked to him if shares were low enough, he might consider buying again. But hes not actively buying or selling at this time. Very interesting. You Start Talking to him about why he does this, well get into this later today, he said things have changed in how he sees the company. They have not lived up to his expectations in the five or six years since they started buying or their own internal expectations as well. Guys . Was fascinating. I tell you what i was saying, watching him the whole time, i think about a lot of things, its like if he sold a third, i dont think i would want to tell people that that Warren Buffett sold, because he has twothirds left. You ask him that, you know, well, yeah. Because he had to tell you in a week. Might as well tell us now. Then when he says, i might buy more. Im not sure i believe that. I think if he had it at 180 again, i think he would probably try to get out of the other twothirds. In baseball, like if you hit. 350, youre the greatest hitter of all time. If youre a stock picker, if you do 51 right, you can make a lot of money. This probably, warren would probably concede not one of his greatest picks over the course of his career. Hes kind of copping to that a bit. When he says he might buy more he has to say that. He said he says thats based on price. He said he is always looking at the price. But why would he buy by the way, joe, i did ask him if this was a mistake. Well play back what he said to that later this morning. I love hes still so competitive and still it kills him to not, you know, do everything where you think i think its hard, now that you still own twothirds and the public knows how you feel about the company he had to tell us. It becomes much more complicated going forward. I agree. How he deals with the stock or not. It is complicated, but i think he will buy. You think hell buy. I think he will. I think he would defend the position. If the stock falls, i think he would buy. To your point, does this meance . I think the question is, becky, is his frustration with management, is his frustration with the strategy . Ibm acquired 50 Small Companies since Warren Buffett has taken a position in the company. That has not been able to still lace any fo stimulate any form of growth. He did not take any swipes directly at management, which does not surprise me either. Thats kind of the Warren Buffett way. He doesnt tend to do things like that. So he didnt take swipes. I dont know if that indicates hes frustrated or not. He did say the management has not lived up to their own internal expectations and that the competition has come in and been more impressive. When i started asking him about who in the competition, he singled out jeff bezos again. Well get into that tape later. Just talking about the great job jeff bezos has done in amazon web services. Let me ask this joe, you are seeing the stock now off about 1. 8 , 2 . Rightfully so. Was that the buffett premium in this stock . I think there clearly was a buffet premium. Was it a 2 premium, 1 premium, 5 premium . I would say 5 , maybe even more, 7 , 8 . Is there any premiums built in now that we know the shares he does . I dont know the answer to that. The market will tell you over the next month or couple of months what the premium is. Again, you go back to the fundamentals of the company, the incredibly disappointing thing is we live in a world where technolo technology, they check the box because they have the growth and cash. Free cash flow has declined for ibm over the last six years. Cash flow on the Balance Sheet is somewhere around 10 billion, 15 billion. Why is that . Becky, did he speak to any either lessons about this or how it might relate or impact his thoughts about his investment in apple . Over the past year, he has piled into apple. Everybody said, well, hes actually now now he might be shifting stripes a bit between the you can see a trend between the ibm investment and now apple. The idea that its a brand. Youre embedded in peoples lives, which is something he thought was true of ibm. Any conversation about that . Maybe it will come up this weekend. I talked to him about apples earnings, too. Well tell you a bit later, well play some of that sound probably as well. I asked if he had been disappointed like the street was about apples earnings. He said he is not. He said he buys managements explanation that the reason the iphone sales were down is that so many people are waiting for that next iphone. He says he buys into that completely and it buys into what he has been hearing from the nebraska furniture mart, a retailer he does his own research with. I dont even know that he would look at apple as a Technology Company at this point either. Sounds like its a consumer stock to him and a sticky consumer stock. One that people get into and theyre into the ecosystem, they stay there. That sounds like the research hes done around this, not the technology, where are they with the latest, greatest thing. He has gone into this with the typical way he assesses a stock which is what he understands. Technology is something he says he still doesnt fully understand. I thought joes point was interesting, he would have to defend his position. Its almost like a company that starts buying back its at 140 or something, i have twothirds left. I will put some support under it. Right. Thats not a great way to go. You do it so you can stem the decline, sell at a higher price. He has an expression he come ply ka compliments people specifically, and trashes generally. You compliment by name and criticize by category. Which is why he will not criticize ibm management specifically but gently saying that if you have declining revenue, blah, blah, blah. Yeah. Its tough. Its tough. You know i wonder about the the endorsement that Ginny Rometty benefited from. Whether that starts that premium starts evacuating. That was a huge premium. Thats what i mean. A huge premium on her career and the business itself. It gave her license to walk into a lot of different meetings, and also different relationships with potential clients, given the good seal of approval that the butffett name creates. Any stock he invests in, probably carries around that same sort of seal of approval. This company has had to be reinvented six times already. You look at how difficult things are. How many different people tried to run yahoo . It finally sold. Yeah. Becky, thanks. Speaking of yahoo well talk to sue decker later this morning later this morning. Right. What would you do . If i was running ibm, transition to the cloud, i think. Thats just me. They tried that. No kidding. I dont even know what im saying. What else is new. Well be back im kidding. Well be back with ceos of berkshires other businesses. Benjamin moore i think i could run. A bunch of different colors that dont run. You know what i mean . Right . Make sure you dont you know, spill any chemicals anywhere. Brooks running, that would be easier. And cs candies. Monday, Warren Buffett will join us live for three hours, well get a lot more from the oracle in addition to Charlie Munger and bill gates. Coming up, the countdown to the jobs report is on. Well get the april employment numbers at 8 30 a. M. Eastern time. Up next, predictions and how the number could impact the feds next rate hike. Squawk box returns in a moment. Brian, i just need to know if the customer app will be live monday. Can we at least analyze customer traffic . Can we push the offer online . Brian, i just had a quick question. Brian . Brian. Legacy technology can handcuff any company. But yes is here. Youre saying the new app will go live monday . yeah. With help from hpe, we can finally work the way we want to. With the right mix of hybrid it, everything computes. At crowne plaza we know Business Travel isnt just business. Theres this. a bit of this. Why not . Your hotel should make it easy to do all the things you do. Which is what we do. Crowne plaza. Were all business, mostly. Usaa gives me the and the security just like the marines did. The process through usaa is so effortless, that you feel like youre a part of the family. I love that i can pass the membership to my children. Were the williams family, and were usaa members for life. She was nice. Didnt flip us off like that guy i saw our guy going out. He goes out and yeah. That guy the other day, just gratuitous gave us the bird. Hi, were looking at times square. We have a tv show, we like you. How is new york. No reason. Flips the bird. Times square. The society we live in now. The countdown to the april jobs report is on. A little more than two hours from the number of the morning. Joining us now is Jim Osullivan from High Frequency economics, and joe terranova, our guest host. A fast money trader. Whats your number, jim . Is it different than the 0. 7 gdp or is it all related . I think the gdp is a standalone to statistical noise. Im at 180 for payrolls. March was weaker, 1 0,000. I think weather was a factor on the up and down. More neutral in terms of weather this month. Last three months averaged 178. More of the same from that perspective. Which is good. 180 is pretty good. Could they get more accurate numbers and would it kill us to do it quarterly . You can take a threemonth average. Is it worth it to do it monthly and get whipsawed, they revise it, add, subsubtract. It could be off by 100,000 on any given month. A lot of head fakes. Whats the average going to be for three months . 180 . With todays number, because youre dropping out the january and including march, probably below 180. If you look at fourmonth average, year to date, because it has all the pluses and minuses of weather. The net of it is the job market is chugging along well. The gdp number looks like an aberration. All right. Second quarter gdp can go from 0. 70 i have 3. I think the trend is around the 2 mark. Its been good enough to generate good job growth. What about the inside baseball numbers today . What about wage growth . What about hours worked, all those other things. The work week was probably held down by weather a bit. It probably goes up. So strong on the work week part. The wage number, 0. 3 on the month, a pick up from twoish two years ago. Not a dramatic change, but accelerating. To the expetent the unemploymen number is trending down what about retail. Trending 15,000 to 20,000 growth. Trending 10,000 less than that. Izing retalosing retail jobs as go from brick and mortar to ecommerce what is your expectation there . As you describe it is right. Theres probably a structural change there. Even if the trend in overall employment is 180, theres probably slowing on the retail part. The manufacturing numbers look better. Clearly theres been a pick up in manufacturing in the past year. Export numbers look better. Business investment numbers look better. The mining numbers which were plunging a year ago are adding a bit. The net of that is probably not a lot of change overall in the trend. Were getting 180,000 per month, which is strong. Its 1. 5 per year. At a time when Labor Force Growth is probably 1 at best, which is a recipe for the Unemployment Rate continuing to come down. And the government hiring freeze, january 23rd to april 11th. That falls middle of the week . It was never a big deal in the numbers. In terms of net employment growth. Not a lot of turnover for the federal government. Its not as if you ever saw a big negative from the freeze. The fed is watching this, not gdp probably. Absolutely. This doesnt turn them into, like, rav individual ha like, reasabid hawks. The labor market is chugging along chugging, but not overheatingful. We were starting to see unemployment growth, wage pressures, you continue on this path, wage pressures intensify, inflation picks up. No, right now theyre on track. You dont believe theres a bunch of 40yearolds to 50yearolds in the 62 of whatever that number is, where people are not the Participation Rate, you dont believe they can come back . You think its a tight market . Yes. Not to say that the Participation Rate cant hol