Well go over to japan and tell you whats going on there. Lets get to our road map here. Youve got mail. Verizon aol, 4. 4 billion. Why is armstrong selling the company he runs and why verizon is buying a content business . Plus as we mentioned, we are seeing red in the premarket. Stock futures are lower as that selloff in bond continues. Another month of weak numbers from the gap. Retailers april sales came in below consensus blaming, what else . Youre thinking weather . No. Strong dollar. Thats what they are going with at the gap. Verizon agreeing to buy aol 50 a share, 4. 4 billion a cash. The dow component says it will help build digital and video platforms to drive future growth. Tim armstrong will continue to lead aol after it becomes a whollyowns verizon subsidiary. The ceo of aol was asked why he did this deal now. When you look at where we are today and where we are going, we made aol as big as it can be in todays landscape. If you look forward five years, youll be in a space where there will be massive global scale networks. There is no better partner for us to go forward within verizon. Its not about selling the company today. Its about setting up for the next five to ten years. Theyve been talking to them for a while. There were rumors some time back. My understanding is having spoken to people this morning, it was going to be a jv but he wanted more scale, conceivably and it back an acquisition. There are times we wouldnt talk about verizon doing a 4 billion acquisition. It would be a name nobody heard of. In this case it is aol with that storied history. Here it is. Focus here. This is what you are going to be watching aol tv on. They do great, absolutely fabulous programmatic ad for video. This is a great way to take on google. I think Tim Armstrong will be very happy. Lowell mcadam will let him do what he wants, which is develop great programming and have a tremendous ad distribution platform. This is a brilliant move by tim. When i spoke with the company friday, i said you guys are in trouble. You cannot afford to stay independent. They wont let you. There is too much opportunity. This is very much like jeff buccus who is a great american. When it was clear, what happen d happened. This is verizon saying weve got a pro in armstrong. He wants to grow scale. We want to grow scale. We watch i dont know how many programs you watch on this. Mobile video platforms and being able to deliver ads, programmatically to wire devices that are being broadband in because thats where we are headed, not necessarily the big thing on the wall but what is everybody looking at in the home . Maybe they are looking at bill simmons. Or looking at ipad or other devices. Right. There are personalities. This is a drop in the ocean for verizon. Frankly. We are talking about a company with more than 200 billion market value. Will Lowell Mcadam continue to be aggressive and do they do more deals . You mean buy yahoo after all this stuff right now yahoo is trading about zero. Yahoo is a strong ad tech player. You wonder. Hes been mcadam, we asked him to come on he hasnt. Is he too nice to be that aggressive. I dont think hes that nice no offense. No, he is. But he is very focused on innovation, silicon valley. Yahoo doesnt want to be sold. Well well see. Fios what he did there. They are getting in litigation, but its aggressive plan. Now this is somewhat aggressive. Verizon aol and talk about the content. It makes all the sense. Programmatic ad buying and being able to effectively deliver for your customers. Its where all this stuff is going. Nobody talks to their rep and says i want to buy. I want to buy i love lucy. I wanted 1. 5 million buy on your website. No more mad men. You send aol a check and suddenly your ad is everywhere you want it to be. Look, jim cramer went on to look at a cruise. He didnt go back. Send him that. Its thing e aeglgorithms of these companies. Ia highs thought to have a strong portfolio in ad tech. Well see where this all goes. Over the top digital platforms. I think we all i watch jimmy fallon on this. I dont watch all fallon. I watch the part i want to watch because i cant stay up. I watch the end of all the nba games that take seven hours, i watch on this. I would love to see a Sports Program on. I watch espn obviously. Aols got programming and the technology to compete against google. They are the only guy. I think this is brilliant. It costs so little. They need armstrong. Talking about so little. 50. Not that huge a premium. What do you make of the price . I dont think anyone else comes in. I know that armstrong doesnt want anybody else to come in. I know the stock is going up because people feel someone else this is going to begin the process. I think its the end of the process. Aol was up substantially after fridays quarter which was a terrific quarter. Aol, i have here in my hand im going to spare the guy his name because its too embarrassing. The sell that was put out by a firm called clsa on aol on friday, yesterday. Saying they are not doing that well. The fact is aol was doing incredibly well. You have this bleed off. He had to deal with the bleedoff of the dialup. There was discussion about i use aol, i have aol. I have it because in the event of nuclear war the thing never seems to go down. I need a backup to go back and forth with my nephew if things go down hes my writer. He said the demographic of aol is so young. In spite of that cohort. Its not just grandma. Im not going to mention james lees name. Upside sorry. Displaced due to mobile. Thats what mcadam wants. He wants mobile. He doesnt want display. Hes a nice man. This is all about wireless. Its all about wireless. And buccus. Great american. Lets move on to others and talk about this from the bond market which has futures down sharply. Europe global bond selloff tenyear note rising to sixmonth high. Yield on the german bund jumped a lot. Also worried about greece despite the 750 million euro loan repayment to the imf. Reuters report they tapped emergency imf reserve. Sixyear low on a bid to cover ratio on the japanese of 10year paper. What do you get when youre loaning them 10year money . Its 4. 37 in japan. Big moves. Five basis point move in japan on 0. 43 . Those are some big moves. This con seasonably comes from a good place which is global growth. Yes. Last night i get up at 3 15 because the bad guys get up at 4 00 so you have to beat them. What i thought was amazing, the german 10year backed up. It was at 0. 4009 at april 17 when you marvelled anyone would be stupid enough to buy that. As the german bund went down our futures fell from minus 6 to minus 0. 14 . We are gripped by anything. Now it would be like trading off the german ten year as pall corp going up two bidders and aol as opposed to partner re our companies are being whip sawed by the german bund. I mean hello. Its the violence of the moves people that have people concerned. Its frightening. And what dislocations will result, if any, and therefore, what con ceivably. Watch oil today. The frackers. Ceivably. Watch oil today. The frackers. Gave this very exciting time because moves are so quick. The companies themselves are continuing to buy each other. It is remarkable how much m a there is. Do you go home and say to your kids sorry, theres a lot of m a . No. I dont do that. I pick my spots. You cant do it all. You pick your spots. You stay well rounded . I try. That means focusing not necessarily on m a. We are going to talk paul later. That is an interesting situation. Well do that as a faber report and get your insights on pall corp. Its also a tough morning for one retailer who is blaming weak sales on the dollar. Well fill you in on that. Spacex. Well have a live interview. I want to go to commercial. Im disrupting you. Im not 51 on the disruption list. Well take another look at futures. Then go to your commercial. Gap reporting sales. Gap falling 15 . Old navy down 6 . For the First Quarter gap says comps were down 4 as the strong dollar weighed on sales. You follow this company through the years. They seem to have great up periods and then get in a rut. They are radically inconsistent. Gaps comparable sales down 12 versus positive 9 . They had no merchandise or the wrong merchandise. They went for consistency. This is the height of inconsistency. Theres not a lot of picnics in the apparel segment. Kohls, there is a revital. There is revival of that mid price which i find interesting. When i go to tgf, i never see you there. Its incredible the price on belts and underwear. I have been in there. Ive gone into that strange store. They have bargains. Tjx and kohls have bargains. Im a fan of target. I know you are. What about the gap here at lets call it 40 going down to 38 today. All over the map. Jeans. What gives me the tell that theyve got it back together again . This is a coin flip situation. Target and kohls keep going up. Dillards are hitting the ball out of the park. I remember when it was not that good. They are much more interesting to shop at than they used to be. Mcdonalds is adding to its turnaround plans. They said the fast food chain plans to pare down its drivethrough menu as a way to speed up orders. Will boost items that cost between 1. 50 and 3 giving customers more mid tier offerings they can choose from. What is not going to get in that line friday night, the one on exit 70 on the lie. The line was so long, i said forget about it. The long was to west hampton. Youve got to get them through. The line was too long. Ive been to that mcdonalds. And theyve got to do a little bathroom cleaning. Every other day we are getting a new announcement. The question is are you going to bring costs down for franchisees . This is about the franchisees getting more involved. He is responding to them it began to seem like a diner. They dont have the ability to make those things. The drives through, he is doing the right things. So far im very impressed. Hes on a listening tour. Hes listening to what the franchise franchisees have to say. Reminded me of other people on a listening tour. Its nice we dont cover politics. Up next its cramers mad dash. Lets give you another look at futures. It does appear we are going to have a down open this morning. At least if you were long the overall market. This caused on the fixed income side. Doug. Youve been staring at that for awhile, huh . Listen, Td Ameritrade has former floor traders to help walk you through that complex trade. So youll be confident enough to do what you want. Ill pull up their number. Blammo. Lets get those guys on the horn. Oooo looks like it is time to upgrade your phone, douglass. For all the confidence you need. Td ameritrade. You got this. How spacex is launching and upping the race to space. Eight minutes to the opening bell. Rackspace failed to sell itself. Some shareholders may be sad that was the case. This is cloud storage. People are going to interpret this as negative. Its an ugly day anyway. I think rackspace could do a boater job. People say listen maybe cloud stores isnt that good amazon. People extrapolate this. Maybe they sell tableau data. Those are stupid. Thats a stupid thing to do but everyone has a right, a First Amendment right to be as stupid as possible. Go to jim cramer on twitter and you can see morons are allowed to be morons. There is a place for mediocrity at the Supreme Court and morons on twitter. Rackspace is not the way to extrapolate, but you will because you dont know better. This is a rackspace specific problem. Yes. Comes down to execution . Terrible execution. The president allowed shell to spend about 150 million to drill in the arctic. I have to tell you, im not going to insult weyerhaeuser. Its a great company. You are dumber than lumber if you think that arctic is going to be drilled. Weyerhaeuser deserves better. This is the most expensive place on earth to drill. Last i looked, oil is at 60. You cannot go up there and drill. You cant afford to drill in the permion. They can buy a company, they can buy a mother fracker. To drill in the arctic thats a fools game. They spend so much money to drill in western canada. Its easier to drill on mars. There are Great Stories how difficult it is once winter sets in you cant move. They have a big winter. They have a 27day summer up there. Russia is a bad place to drill. World dutch drills in places you shouldnt drill with oil at these prices. Arctic is a bet on 150 oil. The 15 billion barrels of the arctic. Good luck. All right. Weve got oil at about a little above 60. Bond prices are going down. Yeah. Yields are going up. Our stock market at least looks poised for a lower oil. German bund is in control. If you had taken that when it was negative rates. Thats why it can go to 1 without a problem. Maybe it should. German american thing we are following is extraordinary. Thats what we are dancing to. Whatever. Got to dance to something. Exactly. A waltz. Weve got the opening bell after this. The pursuit of healthier. It begins from the second were born. After all, healthier doesnt happen all by itself. It needs to be earned. Every day. Using wellness to keep away illness. And believing that a single life can be made better by millions of others. Healthier takes somebody who can power modern health care. By connecting every single part of it. For as the world keeps on searching for healthier. Were here to make healthier happen. Optum. Healthier is here. At chase, we celebrate Small Businesses every day through programs like mission main street grants. Last years grant recipients are achieving amazing things. Carving a name for myself and creating local jobs. Creating more programs for these little bookworms. Bringing a taste of louisiana to the world. At chase, were proud to support our grant recipients and Small Businesses like yours. So you can take the next big step. Youve got yahoo rolling. People need to distinguish he would im telling you something i know and talking general themes. Right. Thats important. You are very quick to not Say Something versus other media outlets. This may not be the last thick to do. Given their size that is something they could do. When you think ad tech you think yahoo has a strong portfolio there. To combine those two here is what we are saying. It would make sense if we could combine those two. That doesnt mean it will happen. It would make sense. Yahoo will be worth very little after the spin. Once they spin the alibaba stake. Now they talked about trying to do something with the yahoo japan stake. What are you left with . You are left with how do you keep the business going on what are you selling . You can hear the applause building here as we get ready to ring the opening bell. You see the realtime exchange at hq getting ready. Enova international, and gmhc with the annual aids walk here in new york. We have a tumultuous bond market. This pullback i thought friday we saw the big reversal that happened rapidly. Now we are reversing fridays reversal. Its the speed of these moves. Its almost as if the bond market was trading like a small cap, like someone is buying up bonds and cornering them and dumping bonds and sending them down. Its happening way too quickly and its too thin. The fed ought to make bonds available. This market acts like there this market is too thin. Its no one positioning bonds. Talking about the deepest market in the world. Thats what im used to i know. I thought i would never say that. It seems everybody is moving it around very easily. No one data point people can grab hold of here. Maybe the bid to grab ratio in japan. This is good news potentially. Europe is moving in the right direction. China yesterday. I saw a spike last night. China is going to rework and there is no need to continue to buy bonds if youre the ecb if their work is being done. They get a shock to the system. If china were to cut by 100 basis points we would see our Interest Rates spike but see earnings go up dramatically. People are so fixated on the bond market. Rates are lower than in my whole life. Its like you have to go back the gi bill when you came back from world war ii to have these rates. Weve become accustomed to it. I remember that. Its four times. My rates are, the 10year is about to go through my last water actually getting a mortgage at. Ive got 3. 25 and 2. 89 . I got 2. 62 . Who gave that you . Wells fargo. I nailed it. I got very lucky. I think the 10year was around 1. 6. Cant beat yours. I got a great rate and got lucky. Yahoo shares are up. Not much else on my screen up. Lets mention hertz. Funny statement came out. Did you see that . It would be undue effort if they got the financials up. Thats a new one. Petrobras report friday. This is a new way to get around the s. E. C. Undue effort and expense to file on time. I dont know what that means. Guys i would love to file theres a lot of undue effort on my part to pay my taxes. Undue effort. Not only that but it would be expensive. You may call the company is in the midst of what . Extensively reviewing prior year results and giving us different results. Alpha. Im not sure what they are delivering at hertz. It pulled the whole industry down. Phil lebeau with how much worse the rental Car Companies are doing. My question is how do we even know . When youve got undue effort to do financials. Last summer meeting a group of people saying they are about to report and ill be surprised. No. This is a new thing. Undue effort. Undue effort. Here we go with the tenyear. I did not think this was going to happen. Its happening so fast. Highest yields since november. Above 2. 3 on the 10year bond. Its tumultuous. Ge they are going to have to make a strong effort with the eu. They already, of course in a sense sa tedtsated the needs of the french government. Im going to Say Something radical. If that deal if ge were to walk away and announced a buyback, instant buyback even in addition to their buyback they are doing a 50 billion buyback. I say add another 14 billion, that stock goes to 28. If they have to keep making concessions, they should tell the europeans, any of. Were walking away and take that additional money and buyback stock. It would change them back to be less of an Energy Company. Nobody wants an Energy Company at 60. I dont think they are going to. Not at all. They are going to make every concession. You think so. Therefore, it will no longer be a good deal . Thats what i think. Ups sure ge disagrees. I think when you make concessions in europe you go down that slippery slope. Mr. Immelts predecessor, jack welch, had the same problem with honeywell. Eventually jack walked away. He had to. It was not an easy road to say the least. Hi jack. Jack watches the show. Weve got biotechs down. Biogen amgen among other bigger losers. Biogen was up big the other day. The alzheimer formulation im waiting for. A lot of people the ms numbers were not that strong. This is a maintenance drug they have. Biotech has been all over the place. I think about all