Advertisements. Uncertainty about whether or not the offers are real. Wed like to help cut through that. To get people to take advantage of that. Which would be another housing upside for the economy. Tensecond surprise . Hoimts do yw many times do y the word uncertainty . Theyre screaming there are opportunities in the markets. Its when people are certain that you have to be fearful. I think were far from seeing certainty. Youre still bullish . Bullish as anything. Doug, richard, thank you. Steve, michelle, thank you. Thank you. Chicago tomorrow. We also have bob ruben tomorrow. Squawk on the street begins right now. Good wednesday morning. Welcome to squawk on the street. Im melissa lee, with Carl Quintanilla with jim cramer and david faber at the New York Stock Exchange. The day after the s p and nasdaq posted their second best days of the year. We looking at a higher open, pretty much across the board. Actually, they just turned. Were looking down open here, 59 points on the dow. Down 7 on the s p 500. Take a look at the picture over in europe. The big waiting game is on with the ecb starting tomorrow. Were seeing red arrows on the board. Most notably the euro hitting a oneweek low against the u. S. Dollar. In asia, china up eighth straight session. Nikkei highest level since september of 2008. Disney set to open at record highs. Strength in media networks. Word that its planning films based on star wars characters. Zynga, revenues continue to fall and the social Gaming Company said 2013 would be profitable. Company seeing momentum in americas improvement in europe and big margin gains for 2013 for ralph lauren. The post office could be eliminating or cutting back deliveries on saturday. Well explain. They carry the official announcement at 10 00 a. M. This morning. We start with disney. Shares rising premarket, set to open at alltime highs at fiscal Fourth Quarter profits beat the markets. Growing attendance at the theme parks. Real news came during bob igers interview with our own julia boorstin. In fact, we are working on a few standalone films. Larry kazden and simon ginberg are working on films derived on star wars characters that are not part of the overall saga. We still plan to make star wars 7, 8 and 9 over roughly a sixyear period of time. There will be a few other films released in that period of time, too. It is amazing, jim, because this was an acquisition done just in october. Theyre monetizing this thing left and right already. Look, the big controversy last quarter was, espn not so good. That turned out to be false. Did they buy this. He said, trust me, its going to be marvel. People didnt trust him. Why they didnt trust him, i have no idea, since hes completely bankable. But he had just bought the thing. Now hes got a clear path. In the meantime, geez, the theme parks are booming. Its doing great. Shanghai numbers. Everything that was disappointing in the previous call that drove the stock down from the low 50s to the 40s, he corrected, and i think this is a story that is going to get better and better as the year unfolds. We talk about 2014, not 2013. This quarter, its opposite from the last quarter. Affiliate fees, expectations there are going to be significant increases, the ability to ramp that up this year. Parks look good. Especially domestically. Right. One thing i think you could say about the studio strategy, its been a little for a while it looked like they wouldnt be doing the big temple movies, now it looks like theyre going for the big blockbuster type movies. There are a lot of worries. Movies have been disappointing. Dont forget, we have iron man 3, im not in it this time, much to my chagrin. But i do like the fact that espn had been viewed as a peak product. And it turns out remember, he said, dont worry about espn. Its up 7 . Why did people worry when he told you not to worry . Given how right hes been. Thats a good question. I guess because theres always some worry about the largest single driver of cash flow at the company. Theres always the ideas that its somehow slowing, or young men not watching. I mean, it plays into a fear, i think, that is out there. But has not really been realized. I think espn is a fabulous brand. People say, jim, i spent the day with espn on friday. And i got to tell you, they are a News Organization primarily, of information that you cant get elsewhere, and you cant dvr. I would love that brand. It says nothing about the digital component, you dont need to watch the game, you want the score, and you want it now. They will continue to raise rates responsibly, carefully in his words. But hes not done, charging more for access to that channel. 15 million peoples names in fantasy for espn. 50 million people. They dont even they have so many irons in the fire. They didnt bother monetize that much. Maybe charge 1. We talked about the investment of theme parks. The theme parks and resorts, about a third of disneys total revenues. With the mind magic bracelet, you can use that as a room key, and also go in the park and purchase things. Imagine how much more you could buy and swipe the thing and buy a mickey mouse ice cream. You might buy dozens. Thats true. Remember in the old days, if you stayed at the one of the hotels, you got in a half hour early, and that was a big deal. Everythings coming together. The new rides are very exciting. There was a stagnation factor here of which universal had been in stagnation, by the way. And theyve done remarkably well. Generated enormous amount of cash flow, much more than anybody anticipated. Back to disney. I think this is also a good sign for america. Remember gasoline prices are up. People worried about gasoline. Payroll taxes. I didnt here iger all that worried. A good quarter. Put a little bracelet around your daughter, make sure you dont lose her. We lost ours. Maybe thats more of a parenting thing. She was 5, of course. I find when you take your kids, a little parenting advice, you try to keep track of them. Thanks for that. Appreciate it. Ill keep that in mind for the next time. Ill keep that in mind for when i have children. All prodad. I always watch where they went. Even with mr. Toads wild ride. Im the best. I dont think its there anymore. Jungle cruise . Tell me about it. Its the best. It is the greatest. Shares of zynga up in the premarket. Revenues came in flat, but they did the forecast. Seeing wider than expected loss for the current quarter. The analysts who still cover it, evercore raised it. This is a paddles clear. Theres a pulse. I did feel really, come on. I remember when it was much bigger than electronic parts. 5 million company. Zynga, at one point 2 billion. If it was really that good, they should have bought them because there was so much cash. This is a company that came public during the heyday. The and reminds me of icge, which sold the division to google. It was like 500 going to 900. Of course. I think zynga is alive. And it is okay. Im not calling it well. I dont have to reason to buy. But its not dying. Its there. Right. But the catalyst could be online, real money gambling. Yes. And when that happens, i mean, that could be a real catalyst for the stock, as the stock itself as an independent company or takeover target. A lot of these british Poker Companies do very well. Its not dead. I know thats never been as a broker i would never call people and say, its not dead. Ive got one that rigor mortis has not yet set in. If you get to the e. R. , you know, sometimes they have these remarkable situations where a neardeath experience and then they come back. You go down the tunnel and see something, the light. Do you think zynga has seen the light . I think theyve seen the light. Its a turnover, yes. A little bit. Lets talk ralph lauren. That could be one of this mornings big winners. The upscale retailer up 28 in higher sales. Citing what it calls a strong holiday season, continuing momentum in the americas, and improving trends in europe. Ralph lauren raising the full year outlook for fiscal 2013. The revenues were a little light, but nothing in the scheme of things, when you consider that the companys raising its forecast for margins for the Fourth Quarter, and for 2013 by at least a hundred basis points. When do you hear that . Remarkable quarter. The short ralph lauren off of europe, short quarter off of europe, that whole wrap, the short pbh off of europe, that looks like its not going to be a good thesis for the short sellers. Two Companies Said positive things about europe in the last 24 hours. I trust roger, who ralph lauren is still not ralph lauren, but does a pretty good job. David yesterday in a remarkable Conference Call, remarkable for emerson saying, listen, the last 60 days ill just quote him all of a sudden i feel better about europe today. This is obviously flow control, engineers. I feel better about europe today than i did 60 days ago. I know that may be too granular for the european bears, the ursa major people that youre in touch with. But ralph lauren, and emerson, thats pretty broad. Yes. That encompasses a lot. Yeah. I mean, theres always the mcdonalds executives and the Auto Executives who would say, were not seeing that yet. Wait until mcdonalds comes out with the egg white mcmuff inf infor mcmuffin for 240 calories. Wow. I think this egg White Mcmuffin have you done the work on this, the whole engineering side of mcdonalds . Yes. Have you been back in the test kitchens . Of course. I have my sources within that test kitchen. And i asked for something under 250 calories that doesnt have cholesterol, my wish, their command. Chuck dan is like, im on it. But the lauren news comes a day after este lauder after luxury in general i dont know, do you go with the coach tiffany view or este lauder . I think you go este lauder. A lot of people were short este lauder off of Elizabeth Arden. I apologize to bill for mentioning este lauder and Elizabeth Arden in the same sentence. Theyre going to call you and say huh can you put panera in the same sentence as wendys. But i do think they have enough evidence well have the ecb, theyll say whatever theyre going to say in france, but ralph lauren, este lauder, emerson, very tough short. A lot of it i wonder how much of it is decline in cotton prices year over year. Thats got to help. The Gross Margins do explode here. Because of the year over year, the cotton rollover of futures. But i think that you could go back to coach, i think coach will eventually get it together. If you talk to a steve tanger, he says, have faith in frankfurt. I have faith in roger, ralph lauren, i have tremendous faith in trinko. I dont have as much faith jcpenney, ron johnson on the show today. Stock investing. 11 30 a. M. Already reports about some layoffs at corporate offices. Sales for the month of the quarter down. Hasnt moved yet, because hes got kids in high school. Hasnt moved to the west. I got news flash. They do have high schools in no, really . Egg mcmuffin research, there are high schools there. My daughter met someone who went to high school in plano. Very smart guy. Thats a little anecdotal for you, maybe not empirical. You dont necessarily have to keep your house in california if youre running jcpenney. Its been a while. It has been a while. When they graduate, the guys going to make a beeline. Its hard to move kids. It is . Yeah, it is. Im trying to give the guy a break here. I actually i want to move up. I dont want to get into this. I would like to move. Would you help me do that . Can you give me one of your houses . Ill give you one of the ones in mexico. Its getting much safer there. I read about that. That general, hes in trouble. Looks beautiful on google maps when you show it to me. I dont see any soldiers or drug runners or nothing. No. Theyre hiding. Its like a drugfree satellite. Thats a town that says just say no. The post office saying no to saturday delivery. Email sparking changes at the post office. The cashstrapped agency announcing plans to eliminate saturday delivery of first class mail. Well bring that to you in about 45 minutes. It has been a year since jcpenneys ron johnson outlined the plan to transform the retailer. Would he have done anything differently and what about the future now. Stay tuned for that exclusive at 11 30. [ kitt ] you know whats impressive . A talking car. But ill tell you what impresses me. A talking train. This ge locomotive can tell you exactly where it is, what its carrying, while using less fuel. Delivering whatever the world needs, when it needs it. After all, whats the point of talking if you dont have something important to say . But that doesnt mean ive dont want to make money. Stor. I love making money. I try to be smart with my investments. I also try to keep my costs down. Whats your plan . Ishares. Low cost and tax efficient. Find out why nine out of ten large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. A major deal in the Media Industry this morning. The cable business Liberty Global agreeing to buy the uks Version Media for 16 billion. Fabers got more on this deal that you said would happen. You said that yesterday, in fact. It ended up not being quite 50 a share. There are holders of media out there that may be disappointed in the price. That price could change today, because, of course, this is a cash and stock deal. And in typical john malone fashion, its not just stock, its actually two separate stocks. Youre getting a and c or what we call k. It gets complicates. Were going to keep a close eye on those liberty shares. Because this deal is cash flow, right from the getgo. Depending on what analyst youre following or what your assumptions are on buybacks or what the synergies are. Could be as much as 18 to 25 cash flow accretive. That could be a positive. The currency used for part of the consideration may go up, hence the value may go up. Its going to be important. Weve got some big shareholders in there. Unclear whether theyll mount any sort of defense to this deal and say we want more. But something to watch closely. As for the deal itself, the biggest Cable Company in the world. About 25 million customers. I think bigger than comcast at this point. Obviously a huge footprint with which to negotiate, not only with programmers, but the i. T. Services and everything else. Thats some of the synergy numbers were talking about there. Its a typical john malone deal, one would argue, for this kind of environment, where investors seem willing to at least embrace a levered equity. Theres john. Levered equity story in what is a core market. Free cash flow accretive right off the bad. Shareholders own 36 of the combined company. You know, theres just a lot here. As i reported yesterday, they were back and forth for quite a long time, in part because the prices were moving all over the place. Virgin media shares actually shot up. They broke apart. They were able to come back when liberty stock prices also started to follow up. Look at that move up. How could you want more . Well greedy. By the way, why didnt they do this deal a few years ago . Unclear exactly. But theyve gotten it together at virgin media. They were not for sale, so they needed to be convinced to actually entertain this. Again, we do keep your Shareholder Base focused on the future of the company. The Free Cash Flow number is going to be huge, not to mention the net operating loss, 10 billion. Theyre domiciling this combination in the uk, hence, they will be able to use that against any earnings. Does he still love those tax plays . Boy. This guy is big enough to tax it was made for him. He sniffs that out, the taxes. Hell follow. If you ever want to get a deal done with him, thats the thing to wave in front of him. Ive got to ask, two months ago we were talking about executives paralyzed by fear. One week we get dell, and now malone. And in part, citing conditions, right . Market conditions . Yeah. As to why do this deal now, david. Is that significant when you put them together like that . Thats a good point. By the way, both have been in play since the summer, really. At dell, there were some considerations in the fall about do we want to do this. This deal originated with dinners that began late in the summer. It is interesting. They take a long time, but they are reflective of confidence, no doubt about it. Can you broadly speak of that . I dont know. Oh, i think you can. I think carls right, three of the smartest guys ive met in my career, oracle, monday, michael dell puts his own money in this lbo, smartest man as perhaps you mentioned yesterday in the business. What do we need to hear from people . These are three guys, malones not even buying on weakness, hes buying on strength. Weve got managers coming out, these analysts stretch valuation. Wow. Ill take ellison, malone and dell anytime. A selloff one day, a rally the next. Cramer with advice you can run with today. Mad dash is next. One more look at futures as we get through this wednesday morning together. Squawk on the street is coming right back. How do traders using Technical Analysis streamline their process . At fidelity, we do it by merging two tools into one. Combining your customized charts with leadingedge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. We like this idea so much that weve applied for a patent. Im colin beck of fidelity investments. Our integrated Technical Analysis is one more innovative reason serious investors are choosing fidelity. Now get 200 free trades en you open an account. To grow, we have to boost our social media visibility. More likes. More tweets. So, beginning today, my son brock and his whole team will be our new senior social media strategists. Any questions . Since we make radiator valves wouldnt it be better if we just let fedex help us to expand to new markets . Hmm gotta admit thats better than a few likes. I dont have the door code. Whos that . He won a contest online to be ceo for the day. How am i supposed to run a business here without an office . [ male announcer ] fast, reliable deliveries worldwide. Fedex. No they dont. Hey son. Have fun tonight. Back against the wall aint nothin to me aint nothin to me [ crowd murmurs ] hey [ howls ] check out jims mad dash before the bell. Cummings cutting some staff. Yeah. This is the new pattern, carl. Guide down. Price range, 745 to 895. Everyone was looking fo