Friday. It went above 2. 2. Can you imagine that . There we stay above 2. 2. Lets get to our road map this morning and it starts with those markets, six years into the bull market. The dow coming off one of the worst trading days its had in over a month. Will the weakness continue . And watch out for apple, as we spring forward, apple expected to unveil the latest details of its watch in San Francisco. Plus, gm says its time for a buyback. Shares are up in the premarket as the auto maker announces a 5 billion Share Buyback, which does avert that proxy fight that might have been in the offing with harry wilson. But first some other news. A hostile bid, or at least a bear hug. Lets call it a hostile bid from Simon Propertyies group for macerich announced by Simon Property group which has tried to get macerich another large Shopping Mall operator in the country, with primary parts of its property. It has tried to engage it in a potential deal discussion for some time. Makes the decision this morning to come with a letter that it has made public and an offer. 91 a share, 50 cash 50 stock. They also have a plan to sell selected assets of general growth propertyies. As for Simon Property group, its the largest in the country, an enormous 60 billion market value company. This deal, by the way, worth over 22. 6 billion when you include debt. The 91 a share price though well, it is a 30 premium to where macerichs stock was trading. But some will tell you, at least i believe, that its still not quite enough for them to want to part with their shares in a sale to Simon Property group. Consolidation is coming. We dont see many in this part of the world. They are by their nature extremely difficult to do. I could add, by the way, that macerich is incorporated in maryland. Traditionally a very very tough state in which to get a takeover through if you want to do it on an unfriendly basis. They have strong antitakeover provisions there. I would also add, though the window for nominating directors at macerich is currently open. There is no staggered board, although they can change that very quickly back to maryland law, but it is open until the end of the month, so it is certainly possible and no doubt the timing of this is not coincidence that simon could try to nominate directors for the board with a full blown hostile bid. Two things. Got the best Shopping Mall merging with the secondbest Shopping Mall. In simon stocks you go up after the smoke clears. I know theres going to be arbitrage pressure. But secondly 22 billion. I thought the fed was going to raise and it was the end of deals and the end of life and the end, it looks like maybe things go on, david, particularly with this group, which has just been hammered because of the fed. Hammered. Yeah. In fact, on friday of course Simon Property stock down like so many other Real Estate Investment trusts or utilities, anything with a yield, thats a yield play starting to get hurt. As it relates to this simon operates at about 70 operating margins. Macerich is less. Lets call it the high 50s. There is a belief that you could get those higher operating margins. There may also be the opportunity for revenue. Dont always see that. Do they have any malls that are next to each other . I dont know that they have any that are next to each other, but the properties do line gee grandfatherically quite well. They like the geographic fit. Theres been no doubt that sigh mop has been trying to think about or make this play for some time. They actually bought their stake before november they just revealed it in november, but then macerich did this deal where it sold stock about 11 of the company to ontario teachers at 71 a share to consolidate some joint ventures. They basically bought in the 49 of malls that ontario teachers owned in conjunction with them. I dont think you can point to the 71 as a great arbiter of value, but what simon will tell you is were talking about a company with a Net Asset Value of 76. Were offering 91. Again, because i reported on this last week. Right, you gave us a heads up. Many were saying well 95 at the very least. Some optimistic shareholders were hoping it might get to above 100 given they think that theres beyond this number. Those who watch the market on friday really felt that it was a sea change. A deal this size on top of another deal were going to talk about and a major auto company in there buying stock, says look, those who think that its all over, forget it. The companies themselves dont think its over. The cost of capital continues to be the driving force behind this. By the way simons cost to capital is incredibly low. This amounts to about a 4. 35 cap rate. In other words the given yield on those properties from mace rich right now. Macerich right now. Real Estate Investment trust, ten years ago, this meant nothing. The size of this cohort is gigantic. And people have to recognize that this is a very big deal compared to almost every other deal, other than drug deals. Well be watching that one. Of course macerich shares do look to be up as high as 92 a share. As for those markets, they are coming off that rough session on friday. The dow had its worst day since january 27th. The s p had its worst day since january 5th. Stock futures, lets call it more or less flat this morning. Whats your take . Europe starts its qe program, and im looking at these tenyears. Spain, italy, 1. 27. France below. Im thinking yes, everyones decided that our rates are going to skyrocket, except for the people who are rich in europe, who know they buy the dollar, and theyve got a fantastic trade. I think that those who expect the rates to shoot up the fiveyear is not broken out yet. I think are poorly advised. I think its entirely possible that the banks can do much better. I think the fed could raise i know people are saying june. The fed could raise in a couple weeks. I mean they should. That up 295 number. A big number on friday. Although we did not see the kind of wage growth that many people are hoping for and keep waiting for and we saw at least a glimmer of the last report but no sign of this report. No but at the same time were creating jobs at a pace that we havent seen in a long time in america. I think its unnatural to keep rates where they are. So what do i want to do in my approach to the stock market given the jobs number and the expectation. Whether its june or september, its coming. Theres always somebody out there who thinks theyre not going to do anything. You saw the money coming into the banks. It was really amazing. You see people reconfiguring, getting out of the Consumer Product stocks, which have been bond market equivalents. Those do not make sense. You saw the utilities get hammered. Everything is happening textbook. Remember, the market goes up after the first couple of rate hikes. No one wants to believe that. Its just made up of different players. Normally we would expect international, the big cyclicals to go up. But until you see some sign that im right on europe, i think that youre going to find the money still gravitates to domestic retail. Im seeing some signs that youre right on europe. I absolutely couldnt believe it when you started about six weeks ago or two months ago. Theres real numbers are still going to be cut. And remember, theyre debating the currency. I could make a case that mcdonalds was not as horrible. Were going to talk mcdonalds in just a home. The euro has just killed them. Everybody is talking parity, which makes you think we wont actually get there. The world is convinced that the euro is just going to keep going down. At a certain point, did they not anticipate exactly what draghi is doing but hes going to buy bonds with negative yields. Below. 2. Germany is like what are you talking about . I realize i kept asking why would anybody buy negative yield. They think its going to get more negative and thats whats happened. The chinese came in and just bought trillions of european bonds. They are sitting on gigantic amounts. They are having a hard time stimulating the consumer there. You saw those numbers over the weekend. Theyre importing very very little. Its time for the chinese to make a move. But they seem almost paralyzed with these bond positions all over the world. But boy do they have a huge profit in europe. Its like this untold thing. The chinese have a gigantic gain. If they ring the register and started the kinds of things like rebuilding the infrastructure where theyre no longer killing a Million People with pollution, theyve got a lot to do there. But china has been paralyzed. Interesting stories about that documentary making the rounds. Its the sixyear anniversary of the market lows in the financial crisis. March 9th 2009 the dow 6,547. The s p, thats what i remember. 676. Here at cnbc, we do call it the haynes bottom as the late mark haynes went on air the next morning, march 10th on squawk on the street and called what was the bottom of the market. Take a listen. However im going to step out on a limb here. Were waiting for this. I think were at the bottom. Mark didnt make those calls idly. He had not said im warming up. He was always in the 9to1. He was always into the amount of downside. So when he made that call i almost said when he makes that call, he made that call what you had to do is say holy cow. He has not said a single positive thing, and it was overdone. And he knew it was overdone, because thats what if you remember in the late 90s, he knew the nasdaq was too high. Made a couple bold calls. That was his boldest. It was quite something. We miss him every day. Want to move on to some other news. It has been a busy morning. Gm announces the 5 billion stock buyback program. Promises more clarity as well on its Capital Allocation plans. All part of a settlement with investor harry wilson who promised to potentially wager a proxy fight on behalf of four hedge funds who earned roughly 2 of the stock. Wilson is going to withdraw his nomination to gms board. Hell drop his proposal, which called for an 8 billion repurpose, saying we have arrived at a win win outcome. I guess thats what they can say. For gm you avoid what we talked so often about the nasty distraction of a proxy fight. Even if its over one word. See if these things still take a toll on management. Are not worth it. A lot of management will tell you better to settle. At the same time i brought up many times the interesting Compensation Scheme that mr. Wilson agreed to at the hedge funds, which i believe, and it varied. Talked to hedge fund guys, they werent bothered by it but institutional managers were. It would have cleaved him from the rest of the board in terms of his compensation. Even if not, he was going to get 2 of the upside on the 30 million shares, but 4 if he was on the board on any upside. Im shocked at this. You know that mary barra said we can get it. They reached this number 20 billion. Anything above that is going to return to shareholders. My Charitable Trust owns this. It has been unfortunate so far. Not anymore. Were now up on it. But i do think that what that means is theres 10 billion total. Phil lebeau is in europe. Great stuff on this. But the fact is they convinced they rolled barra. They rolled her. She must be a little more optimistic than we thought. Or alternatively, they really didnt have any use of the capital. This is on the conference said. She said driving strong returns with medium risk given their Balance Sheets in good shape. The risk reward does not favor deploying cash toward the Balance Sheet at this time. 20 billion is where they will be. They had been above that and mr. Wilson asked the question do you really need to have that much cash in your Balance Sheet . You know even if you break even, you tell us in a downturn these are conversations id have with mr. Wilson previously. Conversations with mr. Wilson. Yes, some time ago. Got it. Right. That was a little bit before my time. Its okay. Its been terrific. Mr. Bass got me excited about it. Hes going to end up doing well. I dont know about that. Frank brosen is going to end up doing well. He was the main engine behind this. People who dont know frank brosen should know he is not one of these boisterous look at me guys. Hes the opposite. Mr. Wilson was the public face of their approaches to gm about Capital Allocation. Its big that they convinced them to do this. It does show a degree of confidence. I keep thinking theres really only going to be one left. Right. Coming up mcdonalds delivers another weak month of sales. The stock is down this morning. Also ahead, the ceo of alcoa. I get to say it. Klaus kleinfeld, hes going to be a guest of ours. More squawk on the street with just a few hours to go to apples event in San Francisco. Were back after this. [upbeat music] defiance is in our bones. Defiance never grows old. Citracal maximum. Easily absorbed calcium plus d. Now in a new look. At ally bank no branches equals great rates. Its a fact. Kind of like shopping hungry equals overshopping. Let me talk to you about retirement. A 401 k is the most sound way to go. Lets talk asset allocation. Sure. You seem knowledgeable professional. Im actually a dj. [ dance music plays ] woman [laughs] no way that really is you . If theyre not a cfp pro you just dont know. Cfp work with the highest standard. Mcdonalds out with disappointing sales for the month of february. Asia was also weak. And global sales fell 1. 7 . Europe the only region to come in better than expected. This coming as the new ceo took the helm on the first of the month. Held big franchise meeting last week, and announced an effort to curtail the use of human antibiotics in chicken. That will take a few years but one of the biggest buyers of chicken out there, will have a potential impact for the positive on the general wellbeing, i would expect of our population here in the u. S. Bigtime story this weekend. New york times story about the challenges he faces. Need to simplify. What ive heard from some investors, youve got to bring sgna down. Comparisons with burger king and mcdonalds its impossible. Hes on mad money. 10th anniversary. Heres the most important thing in this release. Consumer needs and preferences have changed. Reset strategic priorities. David, i dont know what that means. Thats not idle language. We know how horrible we are, and thats why the stocks not going to go down a lot. You dont think so . No. Because this is the kind of thing you put out when you say listen, all hands on deck we know we screwed up, we are not going to let this happen anymore. We are going to go back to the 12. I think they go back to 12 15 items. Maybe they will. When i talked to investors who met recently they asked the question, do they really understand how bloated their sgna is . Thats incredible. I want to say those numbers, im sure there are reasons why. It may be closer but it gives you some sense as to what were talking about here. They dont have a lot of the huge franchisees. Your average owns five, six. So you cant amortize those costs. You talked to pop eyes theyre going to tell you listen, the franchisees want to deal with another company. And thats really killed them. Thats what got thompson fired. Wasnt the board. The board liked them. Jim skinner told you in a very hostile interview, he wasnt our guy. You must win the franchisees over. Mcdonalds shares for their part look to be down but as jim said not that much. Change is going to come. Its a sam cook situation. After selma 50 years on saturday. Up next, cramers mad dash. Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. Its more than a network and the cloud. Its reliable uptime. And multilayered security. Its how you stay connected to each other and to your customers. With centurylink you get advanced Technology Solutions, including an industry leading Broadband Network, and cloud and hosting services all with dedicated responsive support. With centurylink as your trusted Technology Partner youre free to focus on growing your business. Centurylink. Your link to whats next. Consolidation in the energy sector, something weve talked about but we havent yet seen will we . Right. Im always conscious of the fact that youve taught me that when you see press reports, discount them. Because the press just runs with anything. It doesnt matter anymore. Its like well issue a correction five years from now. They have tremendous assets. The logical buyer here because of the bachen would be stat oil. Which says they need to diversify away from the north sea and come here. They have made some acquisitions at the top of the market. This is a lower price. Now noble is the outfit which did an Equity Offering is the outfit that has a good borrower. I do very much believe that this is worth a great deal more if you think oil stays at 50 because of the cost of drilling are down so much. The idea is to sell off of this. Right. This is when everyone thought it was going to go. There are many rumors that whiting was on the block to go. But can it hang in there . Yes. It could . If it chose not to sell pete did an Equity Offering. Goodrich did a deal. We dont have to worry about the capital struck schur. They seem to want to go. They do . They want to sell off 30 instead of off 90 . Just the way you draw it up at home right . You know, what can i say . Chevron was buying stock high and then the stock goes down its low. That would be cruel. So im not saying it. But we have a lot more to say coming up. First impress