Transcripts For CNBC Squawk On The Street 20140109 : vimarsa

CNBC Squawk On The Street January 9, 2014

Drag draghis press conference begins. Stocks set to open in the green this morning after jobless claims fell by 15,000 ahead of tomorrows big job number. Plus, macys says it will layoff 2,500 workers and close 5 stores in a move that could save the company up to 100 million a year. Shares are up this morning on that news. While macys in the green, its been a rough morning for some of the other retail names, Family Dollar, Bed Bath Beyond expected to open well to the downside after Third Quarter earnings miss. While tmobile is still only the fourth largest carrier in the u. S. , its ceo making a splash at this years consumer electronic show and well tell you what he had to say about tmobiles Fourth Quarter and an incident at a party for at t. A lot for wall street to digest with new labor on the data front setting the stage for tomorrows big job numbers. Jobless claims by 15,000 to a seasonally adjusted 330,000. And the bank of england and the European Central Bank Standing pat on key Interest Rates. Mario draghi said they expect rates to remain at present or lower levels for an extended period of time. Would had the euro yesterday at the lowest since december 5th. He said theres more instruments to use, but housing is overheating and the threat of deflation everywhere else. I keep Getting Better reports and better reports. Now, i know its country by country and the Unemployment Rate in italy is frightening. I mean, you would just say if it were our country, you would say were in a great depression. They have the same Unemployment Rate that we had in 1932 in this country which is kind of interesting, so theres still more work to be done. In the meantime the american countries that are there say its a trough last year. Among the averages here only the nasdaq has managed to put two days together up in a row. You mentioned the word soggy tape earlier in the year. Are we still there . I think people want to see the number tomorrow. We came in really overbought. I know thats a technical term, but basically said the market had gone up so much in the last few weeks that we almost had to have some profit taking. Its been true to that. I think theres a nice rotation going on. The banks have held up very, very well. There were a bunch of downgrades in the regional banks in the past two days and the bank stocks were up. A bunch of downgrades to the industrials and what did they do . Flat to up. So, i dont want to be sanguine because obviously the markets been going down, but i know this is somewhat typical after a big run. And its been so long, weve had such great januarys in part because weve usually had washington screw things up. Washington didnt screw things up in december this year. We continue to be domestically focused because theres concerns about asia, slowing growth and the markets not doing particularly well and we go over to europe and the bank of england and how long they can keep rates lower, how much should we be paying attention to the left of the world still . I watch the day rates to ship business to china. Its been bad now for four weeks and thats not what i want to see. It seems like chinas had to ratchet back down. Im not sure because copper stays in there. Well hear from alcoa tonight. Theyll give you aluminum forecast and its a tremendous china and asia look. I still think the International Companies that are based in america will have good numbers, but youre right, i think the housing pull remains stronger than i would think. A lot of good pieces lately talking about house how housewares are good. You mentioned alcoa tonight, always provides a nice playbook for the quarter. Right. They are agreeing judgement now to pay 384 million to settle charges with the s. E. C. And the doj related to charges of bribing Foreign Government officials. Alcoa and its subsidiaries has been charged with violating the foreign corrupt practices act, something, david, we see Big Companies run in to which do business around the world. The most notable is walmart in mexico. Well see, though, thats still a developing story, if you will. You know, Companies Say doing business in certain parts of the world if you want to do business, it makes it very difficult for us. At the same time theyre held to u. S. Law and there is the fcpa. A little background on this, clinefield when he came in recognize it was a problem and immediately turned it over to the authorities in 2008. Theyve taken a little more than 100 million charge for this. Its going to be paid in a series of installments, five installments over four years, i dont think it will hit the quarter. If you peruse the research, the sell order did not include this as a risk factor. Obviously its something thats been going for a long time before claus came in. It will be addressed tonight, but i dont think its as material as it sure sounds because of the charge and because of how many quarters that it will be paid over. Lets move on to retail and talk a little bit about macys. The company is cutting 2,500 jobs, about 1. 4 of its u. S. Workforce, thats part of an effort to reduce costs. The retailer said it will save 100 million every year. And macys reporting strong Holiday Season sales, they were up a betterthanexpected 14. 2 . Macys, bueno. Family dollar no bueno. Im going to speak in spanish in honor of your mexican restaurant. Thank you, soft launch, daeff david, to figure out which dishes. Its right next to the f stop on carroll. Saw a picture on twitter last night, of the bar . Im trying to figure out what is there it is. There it is, holy cow. I can see myself seated there drinking margueriaritmargaritas. Its custom margaritas and mezcal. We are actually using a little far away. Back to mailsys and Family Dollar which by the way is going to be a real loser this morning on worsethanexpected guidance. Family dollar was as bad as macys was good. The release is abject. They threw themselves on the sword and a lot of category. Tobacco is doing well, thanks a lot. Dollar general is doing quite well. So, this is a winner loser story. Mac macys winner. Why is lundgren so good, i think, ceo . He recognized very early on that the internet would be a major o with pbh and bf those are the biggest players. So, bed bath i think does have no internet strategy. Bed bath has no internet strategy and you need one in order not to be amazon. Both Family Dollar and bed bath are probably going to open down 10 , but that will be a new record for macys here. Comes in november, december of four plus. They do guide higher than expected. Stern ag takes their target to 62 and jpmorgan takes their target tozy. They call it the top executor in the space. And bemo is making a very big hold to buy. This is a company that is a terrific allocator, the cfo, shes one of the best and recognized in the wall street journal as one of the top three. Only sells at 11 times 2014 earnings, so the more they buy, the better. Yeah. On Family Dollar it should be pointed out with the stock down as much as 7 1 2, 8 , there was a bit of a premium take over because theres continued chatter about consolidation in dollar stores, and that Dollar General might be an acquirer. They no longer have any of the private equity firms in its shares who might looked to scan for a potential deal. That being said, i cant tell you that theres anything going on at this point, its just continued chatter. But when you see a quarter like this, you take out the takeover premium which may being done and its not getting penalized as much for lousy guidance. Others say let it settle out and maybe you do get a conversation between these two. It seems that Family Dollar needs something. And the coo is stepping out. The coo is gone. I think its interesting because he left to pursue other interests. Yes. Theres a lot of other interests. He may want to open up a mezcal bar with me. He may be at your bar . We dont open that early. And also somewhere internally consumables as you said were up. Yes. Apparel was down. Electronics were down. Its almost as if the consumer is still living hand to mouth to some degree. Yes. But, remember, Family Dollar is one of those places like its raining on the Family Dollar of the street and its pretty sunny at dollar tree. What accounts for that . Well, why dont you go to your Family Dollar. I go to two of them versus my two dollar trees. Its night and day. I feel poor when i go to my Family Dollar. I feel smart when i go to my dollar tree. Interesting. I think you just said it all. Say that about sears, too. I dont go there at all. You dont go there at all. No. I dont have that kind of time. Right. You dont need tires . It does bring us to the upgrade at jcpenney at piper to overweight. Price target of 11 bucks. They said yesterdays big reaction was an overreaction to the press release and in their words the real message is being messed, jcpenney said they would do to increase traffic in a mallstarved environment. The Kansas City Chiefs won two games last year and they dont make the playoffs this year, they cannot survive the first round. They are a wild card when i got macys delivering, delivering, delivering, and still i think taking share from jcpenney. Costco was up three and we havent mentioned pier one, too, another disappointing quarter, one three, the estimate five. The last quarter was good. Im a little surprised there because alex has delivered. This time he didnt deliver. Costco exgasoline, 5 , so people going to see that stock is up. They are delivering machine. I got to check out costco on saturday, westbury, long island, for a book signing. Youll be out there. I got a restaurant. I got a book. Come on, man how about a clothing line . I would stay away brione, look again. I dont think you got that at a Family Dollar, gym. Costco maybe. No Dollar General nor dollar tree for that matter. Or sears. But the dollar tree candy aisle, the best place to this get it. Its good thing that the costcos are so big to accommodate the line that will be there. How did you know it was so because of the costco liquor, it is the number one producer in the east. I did i am reading your book before bed each night and its a very nice job. Thank you. Walking through sort of the basics of how stocks even move i talk about how i got to goldman stocks how does the stock go from 5 to 10, by 50,000 striderite and take it to ten. You watched it happen. Thats it . Yeah. I do point out that apropos of Family Dollar, particularly of Family Dollar, theres a moment in every Conference Call, people want to trailed off the headline. Theres a moment they give you the outlook and it tends to be after the verbiage and the q and a, and at bed bath, no q and a, and you come across thats why its trading. Those of us at home who trade offheadlines, you dont have the full story until the one paragraph before the q and a, and i talk about it in the book. Tmobile being kicked out of the at t party at the Consumer Electronics show. More from the nyse in a moment. Thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. 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This particular day all i can tell you is the humanity that surrounded me and escorted me out. Ill give you one fun line. I said to the woman, are you sure that at t wants to throw me out . She took her little mike and she said, yes, in fact, ive talked to the ceo and she wants you to leave. So, im not sure what that was. I dont know if theres anyone else that could have made such hay out of this event. Today, picture in usa today, of legere with the shirt that said i just wanted to listen to mclemore. This guy is a genius. We all know him from a previous live, global crossing, hes a one a oneman wrecking crew. Yes, he is. Yes, he is hes remarkable. And do you know what the numbers are great. Hes done this guerrilla war against everybody. David, dont they just want to take this guy out to the back alley and give him a beatdown they may want to do that at at t. They are being very aggressive on price, of course, this latest offer to basically get you to come and trade in, theyll pay all the fees more or less that you would have to incur to stop your plan with an at t or verizon. But theyre still number four. They have bought a good deal of spectrum. The latest being that deal to acquire the 700 meg from verizon i think for a total consideration exceeds 3 billion. But eventually they may run into some spectrum constraints. Eventually they may run into network constraints, and soft bank sprint are banking on that in the hope that theyll be pragmatic in considering coming to the table and really discussing getting together with them to create a viable third competitor to at t and verizon which we still really dont have, when you consider post paid, which is the key, theyre not there. None of them are there and thats the argument theyll make to the s. E. C. And the doj if, in fact, they get a deal if it will be allowed. Sprint has a lot of spectrum. A lot of spectrum. Interesting to note there was a downgrade to sprint. You know that as well. Too much too fast. Sprint trades ten times 14 its got the halo, halo. And its not going to have a good first half for this year. How about the fact that dan hessy the ceo of sprint put them on the map with that terrific ad campaign where he was very distinguished walking down the street, notre dame grad. And then leger comes in like the vietcong and says, listen, we are guerrillas of the first degree and now that works what does it say about ceo pitch men its interesting. In this case they really needed a guy like at that m. Tobetmob. I dont see it. Trying to get people to leave their carrier accord to tmobiles research, 40 of families dont do it because theyre nervous about the breakup fee and in tmobiles case theyll write a letter for you to present to your former carrier giving you the reasons why youre leaving them. This guy is just shaking up an industry, one man, one company, that you have a lot of firepower. They better merge, daeffed, or im going to start taking numbers down of verizon wireless. Part of verizon now. Well see. Thats still the big question mark transaction well call it the first half of this year whether they give it a shot, being softbank getting Deutsch Telekom to come to the table, already, not even coming to the table, agree to a structure. Right. By which they would do a merger, take on the risk, of course. Figure out some way to structure it so that Deutsch Telekom would feel comfortable with that. They own 66 , 67 of tmobile. Cisco did ces. I think we have a full screen if we can show it to you. Mobile data and their protections and why were talking about all these things and why spectrum is so important. Look at that number. Look what they expect, 66 compounded annual growth rate in terms of what people are going to be throwing around on their mobile phones. I dont even know what the number is its so big. Boy, have you ever looked at your kids bills . Yeah. It is extraordinary. Basically you got everybody watching a Youtube Video at the same time in the world. Yeah. One time verizon called me, listen, do you know your bill . I thought it was a nice headsup. There were consequences. But i do think that we have always felt this to be a fabulous thing and then sprin came up with the first plan. David, what is capitalism doing . Carl, its not fair to the shareholders. Youre supposed to get in a room and fix your price. These guys are in a real war they tried that before. The airlines did it. Remember the great brannif case. This is unfair to the shareholder. These guys are actually doing things that could hurt gross margins. Tmo really exceeds. You got to be careful. This is a great story. Everyone in america has a huge cell phone bill. All have a stake. All have a stake. Yes, we do. Less than 24 hours to go before the big jobs report. And mad dash is next. And take a look at futures theres so much we havent even gotten to. Were getting to it. Another sell on twitter. The ford div hike, and an upgrade of mcdonalds and a downgrade of exxon. Well get to it all when squawk on the street comes back. Go on and take the money and run make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. And it feels like your lifeate revolves around your symptoms, ask your gastroenterologist about humira adalimumab. Humira has been proven to work for adults

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