Transcripts For CNBC Squawk On The Street 20140207 : vimarsa

CNBC Squawk On The Street February 7, 2014

People may be cheering about. Lets look at futures. You can see it is a positive response to this after initially the market was selling off just a bit. No taper of the taper perhaps. Lets take a look at the tenyear talking about taper and qe. You can see not much change there either. And over in europe a reaction, not a reaction, how is the day working out . Well, pretty well after what has been generally a positive week for the various markets in europe. All right. Lets get to that jobs number itself, of course, and talk about it, jim. You know, Market Reaction now seems to be positive. Dont know what thats playing off of. Maybe the tiny tick up in the Participation Rate after being down more or less for decades it would seem. I dont know. When you listen to the coverage that we were hearing before on squawk, mr. Dortmund spoke and cvs and said the traffics not there because of the weather and the weather was the worst nationwide since 1977. Now, typically youve notes a ter ri asterisked these numbers. Do you know what, david, i actually think the weather is not a bad excuse. But you had construction that was positive. Which would seem to be the thing impacted perhaps most by the weather, so i you know, this whole question we keep coming back to weather or slowdown. Weather or slowdown. But i know that florida and california for a lot of the retailers i deal with were very strong and those were two areas that were not affected by the weather. David, the participation, is it going to be one of these ideological issues where we say losing longterm Unemployment Benefits brought people back to the workplace. Its ideological to say that, hold it, if they get them off the dole, they finally look for jobs. Its a sensitive point. I think we should bring it up to the Labor Department, when we have the Labor Department secretary, its always a very substantive interview. Always. 63 now is that proportional working age americans who have a job, are looking for one from 62. 8 in december. I know. 35year love. Why is the government losing jobs, dave . 28,000, 29,000 government jobs and the federal governments been the enemy pretty much you can argument republicans and democrats, job formation, confidence. I dont know if you ever heard former federal chairman greenspan talked this morning, talking about confidence. Does confidence matter when you talk to business people. Business people by nature are cautious because of what happened in 2007, 2008. They dont want to be the last people to hire ahead of a downturn. They dont. Do you know what, 2008 is going to be its six years ago now. 1933. Come on. Come on, david. Your grandparents and parents did not think about 1934, 35. I heard about the Great Depression for decades. For decades. Understood. Understood. Wiped out everybody. Its not a Great Depression what we went through. No, but i think theres an element of caution and theres also theres a lack of confidence. I think that is fair and i dont think that confidence has necessarily been resuscitated in a significant way. We had fits and starts of feeling like were on the move and then we invariably seem to not be on the move. Well, Affordable Care, how many people do you bump in who dont know what their Health Care Plan is . You know, Small Business people, people one in two person shops dont understand their health care. Again, i dont mean to be ideological. Thats not democrat or republican. Its just really hard to understand. Ive gone to paychex to try to figure it out for the stuff im involved in. I dont want to get in trouble. 20,000 new auditors from the irs. I dont want to be one of those people that gets called in and said you didnt do the right thing for the Affordable Care act. I cant be alone in that as an employer. Lets come back to the markets. Yesterday we had a strong day. A lot of people trying to figure out the reasons, who knows. We just were up. Kind of oversold. Thats a technical term. And people focusing on the positive at least a little bit in emerging markets and here we are today, get the jobs number, not good. Up 13, at least versus expectations. Does it change anything . I dont think so. Does it change the tamer of the taper . Im immediately hit by people that say, look, immediately you know that theres not going to be as much that the fed cant be your enemy here. But then rates are going to stay low, right . Yes. But one of the things i hate about this market is that people dont understand, theres a guy over here, i dont mean to point fingers but ill point finger. Its all algorithm. Its almost as if the hft people sell on this tomorrow. You saw the futures go down big, who did that . Its people that just trigger. They are triggered and that future trade had to be faded so to speak. But i just think in the end when you looked at what happened to lbrands, what happened with gap stores, when you look at what happened with kohls they reported really terrible numbers and their stocks went up. What does it tell you . It tells you that people were ready for it. Thats what it tells you. That people were ready for it. And outfloes from equity funds and bonds and cash. Its a sucker bet these rates. The sucker bets. Ive been doing this personal finance stuff i was watching last night talking about roth i. R. A. S. A 20yearold wants to put money away, what do you tell them, i want you to own cds or the apple bonds. I am mentioning apple because of the buyback. Is that something that you want you want a 30yearold person in a 3 bond or 20yearold person . No. So, i think that, again, equities are a default place to be and weve had some companies that have come down enough that their yields obviously become accidentally high. I saw the Master Limited partnerships get a bid. Theyve been a terrible place to be. If rates stay around 3 or below theyll have reits, mlps a lot of which got hurt last year as rates moved up. Maybe a better place to be. Its not a good number. No, its not. In the end why arent we creating more jobs . Gee, were a growth economy but im sure theyre sitting there in germany saying, boy, we stopped creating joshes and britain has job creation, brazil they dont have job creation. China is struggling. Throughout the world theres just a lack of demand and i think we shouldnt forget about it. Now that the jobs report is out, did you nail the number . All week long weve asked you to tweet your predections for january nonfarm payrolls, the lucky winner will receive this sochi olympic backpack. Holy cow. Its high quality and signed by the whole street signquawk street team. None of our relatives were allowed to participate. We were given the number ahead. Did you see the journal do a story about how certain people are given numbers ahead of time. Eamon javers did that story 15 different times. Suddenly its news . Cnbc is a news organization. If we did it and we broke it, dont just go do it and act as if you broke it. We broke it. Thats true. We do tend to do that. Come back to stories when other people report them even though we reported them first. I know that first hand perhaps better than anybody. More than anyone at this network. As for the winner of the nail the number well announce it later in the program. Good luck to all of the entrants. Lets move on to stocks and talk about the biggest, apple has repurchased 14 billion in shares over the last two weeks after the companys weakerthanexpected Quarterly Earnings report the buyback part of apples previously disclosed 60 billion repurchase plan. Ceo tim cook in an interview with the wall street journal said that, quote, it means that were betting on apple. It means that were really confident on what were doing and what we plan to do. Were not saying just saying that, were showing that with our actions. Indeed they are. 14 billion over 2 weeks. Its funny, got a couple of email goldman saying this was the strongest repurchase tuesday and wednesday two of the top three days of alltime now we may know why. Well, lets look at this. There was a line on the Conference Call that a lot of people were not crazy with that Conference Call. Tim cook was asked about buyback. He said were a big believer in buying back the stock whether the stock goes up or down. I directly oppose that and said do you know i think they ought to be i used some words on the show aggressive and opportunistic when the stock comes down, thrilled to see that tim cook say he felt they should be aggressive and opportunistic in the wall street journal. So many buybacks are done high. Look at adt which is the poster boy for stupid, horrible, horrendous, antishareholder buybacks they bought back all the stock at 44. 01 from an activist on the board and the stobings at 29 . Do you know what, that is stupid i didnt say criminal. Notice. Notice. I said stupid you cant go to jail for being stupid. You cant. This is the opposite. The markets coming down big and everyone is selling apple, everybody is freaking out. What do they do . They buy. Go ahead, make my day, right . Its a clint eastward buyback and i love that and i congratulate them. Bravo for listening and not doing, like, a cisco buyback, high, low, it doesnt matter, or accelerated buyback which is totally the brokers talking some ceo doesnt know anything about stocks into literally having the stock come up and then they short the stock. The brokers actually short the stock watching them down and make money. Thats the other thing, accelerated buybacks that was a ludicrous thing. I used to do buybacks for a living. I know what the deal is. 18 billion left of the 60 billion buyback authorization. Remember, it was a 100 billion plan between the dividend and, of course, the buyback. Much of this is an effective perhaps rebuttal to carl icahn although he could conceivably claim credit for it. Capital allocation continues to be a question with apple given its enormous trove of cash. Much of it is overseas. Jim referenced the huge bond deal that they did last year. By the way, the lowest rates ever by a corporation. Threeyear data at 5. 1 and they went exdividend. The Company Bought back a lot of stock and they yielded 2. 38 and they bought back stock ahead of it it was interesting in the interview that mr. Cook gave to the journal, and by the way, tim, were certainly always available if you want to have a seat there, there, or here, wed love to talk to you as well since you seem to be willing to talk to the journal, he did reference new products. He did come back to this idea, again, that weve got something. They seem to know whats coming. Obviously they seem to know . They know whats coming. They know whats coming. Google has a good sense of what theyre doing and they talk to google and suddenly theyre right do you know what, google is right. The word seem in front of everything to protect me. They know whats coming, what do we think given that they seem to be confident about it . Should we take them at face value . Is it going to be television . Im not sure it will be television. Some people wearables, when you talk to kevin plank, the ceo of under armour, the guy knows wearables. The worlds sweatiest man making shirts so he doesnt sweat, imperative there. Yes. I think thats a big market. One of the things i like about apple, theyve been talking more, theyre buying more software. People want devices. The biggest problem i have with apple, ive been doing this book signing, why not work my book in, weve been doing a lot of other things. Didnt work the restaurant in yet. That comes next week. Thats later. Everyone loves you know, this is i stopped counting at 20 people who said im worried about apple. A lot of people bought it higher. But theyre all taking the picture with the iphone. You everyone its almost like everyone who wants one has one. Thats a big problem. But, you know, also lets not forget the traffic at the malls, we didnt get samestore sales from apple. They only gave us total sales. I wonder whether same store sales dropped off, again, because of mall traffic. A lot of moving parts here with apple. Its a big part apples a part of the gdp is what im saying. Absolutely. Well get an update im sure prior to the annual meeting, of course, from the company in terms of its buyback plans once its only got 18 billion. Carl back away now . No. Hes only asking for 50 billions. Hes not asking for 150 billion. This is more. More and more. Thats our society, isnt it . He wants an additional 50 billion on top of the 60 billion that will take place or much of it already has. I think buyback and acquisition at the same time. And by the way, ive been pushing for an acquisition here. Right. Ive been pushing for a tenfigure acquisition. Cook said we wont necessarily back away from a tenfigure number on an acquisition. He said that. Come on mad money since i called for a tenfigure acquisition. He had them buying anything and everything. I can sit here and think you had them buying networks, had them buying netflix. Aol. Aol. How about palo alto after the juniper guy lost the Summary Judgment . You should buy palo alto. They could buy all of those things. Actually a lot of real estate. Might be very expensive, sand hill road. Well talk live with jason furman the president of the council of economic advisers. Also ahead yesterday it was twitter and today shares of linkedin they are down on concerns about grover done on the downside. Listen to me. Grover down on the downside. Take another look at futures as we head to break. You can see we are up on a disappointing jobs number. Were back from the nyse in just a minute. When you order the works you want everything. An expert ford technician knows your cars Health Depends on a full, coheckup. The works. Because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. Get our multipoint inspection with a a Synthetic Blend Oil change, tire rotation, Brake Inspection and more for 29. 95 or less. Get a complete vehicle checkup. Only at your ford dealer. Anbe a name and not a number . Tor scottrade. Ron im never alone with scottrade. I can always call or stop by my local office. Theyre nearby and ready to help. So when i have questions, i can talk to someone who knows exactly how i trade. Because i dont trade like everybody. I trade like me. Thats why im with scottrade. Announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Shares of linkedin falling in the premarket despite betterthanexpected quarterly results. It was revenue guidance for the Current Quarter that continues to be. Linkedin ceo jeff weiner spoke about what hes expecting on the mobile front this year. In 2014 we expect to reach the point where most linkedin members access the site via mobile devices, mobile will continue to be a major area of investment in 2014. All right, theyre talking about an ebita guidance miss at a lot of the firms that cover linkedin, concerns about the scaleability to a certain extent and continue of the business model. Were talking about some pretty lofty multiples so you got to keep up that growth rate. Lets go to the tape paragraph five weiner says this, he goes with regard to engagement as measured, we averaged 139 million monthly new visitors during q4 growing 20 year over year. Dont you think twitter wished they had that number . I think they do. I think and linkedin probably wishes it had twitters number when it comes to multiple sales of over enterprise. People are selling furiously reminds me of the people selling gm yesterday at 33, hey, where did that stock go out . Im telling you, this linkedin quarter, they are very conservative. I know last quarter was a miss. I like this. I like the china move. I apologize for liking this Conference Call and liking their engagement. I apologize. Their guidance in the past was not as bad as it was this time. In other words, they do have a history of overdelivering, underpromising but they seem to be setting the bar im not going to disagree. I dont expect the stock to be up on the day. But i didnt mind the Conference Call as much as the naysayers, whom i thought there was a lot to be liked in the Conference Call. Whats an appropriate multiple to either reported earnings or ebita, right . Were talking about a company that trades over 25 times. You cant have you know, youre bounded ebita. You are bounded like something 15 to 18 if you want to go excess. Linkedin does not have the luxury of being solar city, tesla, does not have the amazon. These are the ones that are knocked down by the four walls of earnings per share and the spreadsheets. It was not what i wanted to see. Im just saying theres possibilities here for an acceleration so lets not rule out linkedin, but it is a very expensive stock. It is. And will continue to be although perhaps a bit less so today. Because its a brilliant company. Look at yelp. What about it . Did you see it yesterday . You love talking about yelp. Why do you like talking about yelp . Hey, handcuff me. I like making money. Every day with the yelp. Yelp was up 14 this year. I know it is. I know it is. Its now the key to this market. Its a juggernaut. Ever since Lumber Liquidators stumbled and tractor supply. Im glad that weve replaced it with yelp. Yelp is now the key to this market which the illusion of david and i doing tv in the 1996 and 1997 halcion days. And we used to play the sound effects. All right, well see what the keys to this market are coming up when we talk to jim about his mad dash, were counting down to the opening bell. More look at the futures today. More squawk on the street is coming right at you from the nyse. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. So ally bank has a that wont trap me in a rate. Thats correct. Cause im really nervous about getting trapped. Whys that . 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