Transcripts For CNBC Squawk On The Street 20160524 : vimarsa

Retailer issues weak guidance, announces the cfo will step down. Toll brothers is going the opposite direction. Sold more homes at higher prices driving up numbers for latest quarter. And facebook responding to claims that its trending topics are skewed by political bias. The revamp for that company is coming up. But first up, best buy shares falling in the premarket. The Electronics Chain issuing weaker than expected guidance for the quarter, First Quarter results did beat consensus, but domestic comps were essentially flat. Sales growth and wearables, home theater and appliances offset by some weakness in phones, tablets and gaming, but chair is leaving and at least citi for their part today says that means improvements from here on out could be limited. Yeah, i saw that downgrade. Well timed downgrade because the stock was starting to creep up. When you look at the actual numbers they did and look at their future, they kept their guidance, i didnt think it was all that bad but the downgrade came at a critical time. No one ever wants to see a cfo leave. No one. Even though the transition seemed orderly, that said, come on, this is at the heart of whats not selling well. But the iphone 7, if its good, and thats why i think they kept their guidance the same. I think youre going to say why did i sell best buy. Coming on the heels of those reports of iphone production we talked about yesterday, you mentioned cfos leaving, rambus cfo is leaving, con agra cfo is leaving today. I hate to see cfos leave. Ive always said you have to wait until another quarter because its jarring and never been a big fan of rambus. Con agra by the way, thats a ja na name. Yes, it was. Past tense . I dont know if it is any longer. They were active there for a while. And the dupont cfo well, theyve made choices in terms of whos going to run the various businesses. It is really important to remember that in every one of these cases that business is not bad and was not like best buy had a shortfall. It did not have a shortfall. Rambus, i dont know. But con agra, the quarter was good. I dont want to necessarily Say Something is funny because i think that con agra down there is a term against these processed food companies. We had campbells down badly, it did not recover. Goldman comes out with a sell today. Gis. And General Mills, selling General Mills. No ones ever sold General Mills and made money. Is that unamerican . Unamerican. Betting against wheaties, i question the call. Goldman argues rates bottoming means low rates have inflated the valuation saying commodity cycle means margins will be pressured from here on out. Yeah, yeah, yeah. This is ken pal. Theyre going more to natural organic. I didnt like the fact they said they may have to do a big acquisition, but going against this group periodically has been right when theres a lot of fed rate talk, and wrong when people see the earnings of the industrials and say why did i sell General Mills. Look at that stock. Its incredible. With very little growth, ken pal, levitating. Said the same thing about auto zone stock for a long time. Im not giving up. Theyre weather related. I continue to buy them. I know the stock has plateaued, but they have being buying back stock. Thats been a winner. I wait to see how bad that really is because i think they have earned enough credibility with me that if they blame the weather, im going to give them a pass. Okay. Stock is down substantially from its high though. You believe them . Yes, i do believe. Theyve earned that. Not everybody its true. Charlotte chowder head . No, theyre not. Theyve delivered. And they said weather everywhere. On the heels of advance their numbers that was a miss as well. They didnt like the weather in the midwest, middle atlantic and northeast. A lot of bad weather. Yeah, well, wasnt all done in good weather. I mean, Toll Brothers is the only star this morning. And i couldnt find any flies in the toll quarter except what am i jumping ahead . Did i do something wrong . No, youre perfect. Youre perfect. Carls about to tell us about it. Revenue up 31, higher prices, all the metrics are up and of course new home sales for april at 10 00 a. M. Eastern time looking for a 2. 5 number. Toll brothers has done remarkable transformation, new apartments, city living, incredible. Biggest mistake i ever made was not buying one of their places in brooklyn when they first started because those are nice the ones down by the bridge there. Skyrocket. Yes. Afternoon delight. Well, no, here you go again. Every time he takes it to a sexual innuendo. I didnt mean to. I didnt know that song was about that when i was 10 years old. Come on. Who knew . I thought it was a horrible song that ive hated for many, many years. But back to toll. Yes. Listening to zell this morning talking a lot about firsttime home buyers getting priced out. That was never tolls game. No, and says multifamily continues to do well because people cant theres not homes are hard to buy, mortgage hard to buy. I thought the california comments they didnt have enough inventory, kb homes had a lot. The stock has done nothing well below book, but i thought california was very interesting in terms of not being you know, they made the quarter without california. And they did make the quarter. I thought earnings were very good. Right. Revenue up too up 31 . Thats amazing. Thats a pretty big top line number. Yeah. They pivoted. And well above what analysts certainly anticipated the company would put up as revenue. Best in show today, best buy, okay, i see the issues. Auto zone i see the issues, back in with that buyback tomorrow, youre going to regret you sold it today. And facebook this morning in response to allegations of political bias against conservatives, Company Announcing a revamp of its trending topics feature, the changes include clearer editorial guidelines and elimination of a top ten list of approved websites. Facebook says an internal probe did not find any evidence of political favoritism in the selection of stories. Nothing systemic. No, i mean, look at that crowd that supports Bernie Sanders. Thats a Young Persons crowd. I mean, you know, facebook skews young. Snapchat even younger. But theres a skew. The skew skews left. It does. Younger people. Right. Bernie sanders, we do not talk enough about what Bernie Sanders could mean for our jobs if the democratic platform i mean, Bernie Sanders is a socialist. He is. Thats not that good i mean, hes not a hes not a hes not a len nonist, those are good because then they would just shoot us. See, were killed in that. Were executed in that environment. Yes, understood. Kgb, they come for us. Were still a nation of laws, for now. Were allowed to talk about stocks in the socialist regime. Our papers arent revoked or anything like that, but in the end, i mean, he wants all stocks lower. Well, he wants to put in a Financial Transactions tax. Well that would take i think 50 basis points it depends. Got to look at his website. Now im fefrorgetting the specis as in terms of bonds trades and stocks trades but believes it would raise 300 million a year. Thats not going to happen. Hillary clinton has told us she is the nominee, jim. Your point is will that influence the Democratic Party and move it to the left. We were talking about whats gone to labor and whats gone to capital thats the issue. And thats why the minimum wage laws are important. Thats not going to solve that problem. No, and im not even look, i argue the Small Business is going to be hurt. Big business benefits with a minimum wage increase. Small business is crushed. This is just another, you know there was a good study this week new startups, half of all new startups since in this recovery are coming from 20 counties. And theyre all the moneyed counties, the San Franciscos, the austins, the new yorks, because Rural America is getting the Washington Post story that says theres almost no startups in Rural America, that was incredible. I mean, this is a changed economy. Youre right. It is. Again, its difficult to sit here and talk about, wait a second, i like the deere upgrade but at the same time people are being hurt. I posted a comment about how its ironic that theres all this takeover activity and Crop Protection and seeds when the farmers are doing badly. Immediately farmers are subsidied and thats ridiculous and how dare you defend the farmers. Im not, im saying it is ironic that the farmers are under siege, deere talked about that in the quarter but people want to be in the seed business, that would be the exactly opposite of what i wanted to be. But there is an undercurrent of socialism that we dont talk about enough because its like kind of, well on the other side and weve made this point, the views of mr. Trump on certain issues are very similar to the views of mr. Sanders. And aimed largely at Rural America just as sanders is. Just amazing. I mean, look, theres president obama im so old that i was like, okay, so were selling arms to North Vietnam . Its not the north anymore, jim. I know. Its just vietnam. I know. I mean, i remember when president nixon things i protested in college. You know . I do. I do. Somehow we started on facebook and got into politics. Well, theyre in politics. Thats how we got there. True. Grounding back to facebook which by the way has a 331 billion market value, just wanted to share that, this does show the ubiquity of the platform and power of the platform, i think, what i come back to when you read these stories is how incredibly influential conceivably it can be, how many people its reaching, and they havent even begun. Theyre not even monetizing whatsapp. Theres not enough content for it. I think its encouraging. Im about to Say Something facetious, hyperbolic and i find it encouraging people get news from facebook and not grand theft auto and call of duty. If thats the bar. Grand theft auto provides a lot of news for people. I wouldnt know, but i wouldnt be surprised. Game of war right, game of war . Mine craft is like, hey, hows whats business like over in iraq . Let me check mine craft. Were all eventually going to be Walking Around with those things strap around on our head. Bumping into each other. Yeah, with a. I. Basically controlling our brains. You know whats going to happen when we do that, you know what youre going to discover what you are . What . My simulation. Ill be yours and youll be mine. Elon musk has been calling people simulations. Yes. Saying theres a 50 chance youre a simulation. Actually said that to someone. 50 chance someones a simulation. I know. And our viewers know too because this clearly unsettled you. I didnt want to be known as elon musks simulation. As it is you cant get a tesla he got into your head. He messed with your head. He did. Yes, i didnt like thinking that i might be a simulation. It was kind of an existential crisis. It was a ka mu moment for me. When we come back, exclusive interview with nick goodman of gopro. Well take another look at the premarket and say a few words about our old friend mark haines who passed away five years ago today. Dont go away. In a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. It takesbut stealing itd work to eaonly took a few days. Female announcer protect your money. Find out if youre dealing with a registered investment professional at investor. Gov. Before you invest, investor. Gov. This morning were remembering our good friend mark haines who passed away five years ago today. Mark was the founding anchor of squawk on the street and coanchor of squawk on the street. Of course we remember him for his knowledge, wit, insight, no nonsense approach, genuine care for the small investor. And of course his steady hand during the dot com bubble, 9 11, the financial crisis, known for calling the stock market bottom of 2009. We call it the haines bottom. Our thoughts of course are with marks wife cindy, his son matthew and daughter meredith on this day. Always a tough day. Always. Because we know its been five years and theres still no replacing him. No, that Memorial Service was really incredible. Remember the Memorial Service . Of course i do. Mark was why i got on tv. You worked with mark for many, many years. Many years, a lot of Great Success first ten years of squawk box together. And probably the only Television Personality ever to have a market bottom named after him. It was incredible. He just literally said enough is enough. We used to talk all the time about moosh bottoms and crescendo selling and at what point its done. And this was the single best time ive ever seen it called. A lot of people were worried about their paycheck, lots of other people felt what was next, j. P. Morgan, bank of america. And he just had clarity. Yeah. March of 09. That was quite a moment. Had a lot of them with mark. Of course i always think of 9 11 for so many reasons, but he was many people will still stop me if they see on the street or want to reminisce about mark and theyll remember that because that was one of the finest performances ive ever seen anybody give. And whether it was the levity he brought, the nicknames or the nononsense, as we said the nofreepasses. What he told me. One time he grilled me because he didnt like something i said and he said to me after the break he said no free passes. And you tremble. Because mark represented whats right and whats good. We think about him. We try to live up to his legacy every day. And we miss him. Well be back after this. They may want the latest products and services, but they demand the best shopping experiences. Theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive its more than a nits 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. Wow. We got ages until the opening bell. Yes, we do. But your voice is back. Its so great. My hearing is back, had a tube inserted in my ear, never pleasant, never pleasant. This is going to hurt like the dickens, but if you scream, i understand. Youve been saying for some time you should become ceo of twitter. The piece is called hope is not a strategy, which is how many times have i said that to you . This is a piece that basically says the managements smug. Theyre not worried. Advertising going down. Revenue growth nowhere to be found. There are a lot of people on twitter who are always saying twitter should be bought by x. If you read this piece, you understand why no one would want to buy it, because it has no momentum and yet the company can i get that phone for you . Was it wife . No, i think it was my wife used to call all the time she didnt know i had a show, only knew mad money. This is a piece thats devastating. Its a devastating and well researched piece that people should read. Got a stock down 60 already, jim, come on. Didnt like it the whole way down, but now they just this is a piece that should be a wakeup call. I looked at the boards wakeup call for what . No free passes, my friend. I just think its a wakeup call for i dont know, for someone whos like at twitter. Come on, give me a break here. Youre saying advertising i believe percentage wise is up the same amount as google and yet off a base thats onethirtyfifth the size. I think if you read it thats why its down. Its the ethos, existential conflict, the notion that the Company Thinks its doing well because it beats its own internal benchmarks. I thought it was a good piece of research. Okay. It wasnt toll. Well, not much is. It was more james patterson. All right. Good seller. Where are we headed next . David, everyones been concerned about microsoft because cloud slowed, windows slowed, saying thats about to change. This sells at 18, 19 times earnings, moments of 3 yield, people are concerned that both did badly last time, and talk about a Conference Call that was a bummer. The microsoft call was a bummer. It was like a movie that failed. It was like a movie about like wall street that didnt go anywhere. Well, that was that move downright there from the quarter. It was bad. Yeah. But theyre saying, hey, listen, dont give up. If thats the case this is going to be the next big cap stock to really rock and roll. Very good piece in usa today about stocks that rocked while the market rolled. Its been a bear market for a year now according to a lot of people. I thought this was important because this was the call that said, wait a second, even the companies that are switching to the cloud have failed. Im watching this call as being tale of the tape today. Remember mark haines said Reverend Church of whats working now. Microsoft. All right, its working now. Opening bell a few minutes away. Talking a lot more including the latest on viacom, oh, what a drama. They could put that one on mtv, ni b. E. T. Simultaneously its such a good drama. Working on a screen play. Were back right after this. sfx golf swing and breaking glass sfx broken glass falling heres to breaking more glass ceilings in golf and everywhere else. The kpmg womens pga championship. Youre watching cnbc squawk on the street live from the Electronics Chain<\/a> issuing weaker than expected guidance for the quarter, First Quarter<\/a> results did beat consensus, but domestic comps were essentially flat. Sales growth and wearables, home theater and appliances offset by some weakness in phones, tablets and gaming, but chair is leaving and at least citi for their part today says that means improvements from here on out could be limited. Yeah, i saw that downgrade. Well timed downgrade because the stock was starting to creep up. When you look at the actual numbers they did and look at their future, they kept their guidance, i didnt think it was all that bad but the downgrade came at a critical time. No one ever wants to see a cfo leave. No one. Even though the transition seemed orderly, that said, come on, this is at the heart of whats not selling well. But the iphone 7, if its good, and thats why i think they kept their guidance the same. I think youre going to say why did i sell best buy. Coming on the heels of those reports of iphone production we talked about yesterday, you mentioned cfos leaving, rambus cfo is leaving, con agra cfo is leaving today. I hate to see cfos leave. Ive always said you have to wait until another quarter because its jarring and never been a big fan of rambus. Con agra by the way, thats a ja na name. Yes, it was. Past tense . I dont know if it is any longer. They were active there for a while. And the dupont cfo well, theyve made choices in terms of whos going to run the various businesses. It is really important to remember that in every one of these cases that business is not bad and was not like best buy had a shortfall. It did not have a shortfall. Rambus, i dont know. But con agra, the quarter was good. I dont want to necessarily Say Something<\/a> is funny because i think that con agra down there is a term against these processed food companies. We had campbells down badly, it did not recover. Goldman comes out with a sell today. Gis. And General Mills<\/a>, selling General Mills<\/a>. No ones ever sold General Mills<\/a> and made money. Is that unamerican . Unamerican. Betting against wheaties, i question the call. Goldman argues rates bottoming means low rates have inflated the valuation saying commodity cycle means margins will be pressured from here on out. Yeah, yeah, yeah. This is ken pal. Theyre going more to natural organic. I didnt like the fact they said they may have to do a big acquisition, but going against this group periodically has been right when theres a lot of fed rate talk, and wrong when people see the earnings of the industrials and say why did i sell General Mills<\/a>. Look at that stock. Its incredible. With very little growth, ken pal, levitating. Said the same thing about auto zone stock for a long time. Im not giving up. Theyre weather related. I continue to buy them. I know the stock has plateaued, but they have being buying back stock. Thats been a winner. I wait to see how bad that really is because i think they have earned enough credibility with me that if they blame the weather, im going to give them a pass. Okay. Stock is down substantially from its high though. You believe them . Yes, i do believe. Theyve earned that. Not everybody its true. Charlotte chowder head . No, theyre not. Theyve delivered. And they said weather everywhere. On the heels of advance their numbers that was a miss as well. They didnt like the weather in the midwest, middle atlantic and northeast. A lot of bad weather. Yeah, well, wasnt all done in good weather. I mean, Toll Brothers<\/a> is the only star this morning. And i couldnt find any flies in the toll quarter except what am i jumping ahead . Did i do something wrong . No, youre perfect. Youre perfect. Carls about to tell us about it. Revenue up 31, higher prices, all the metrics are up and of course new home sales for april at 10 00 a. M. Eastern time looking for a 2. 5 number. Toll brothers has done remarkable transformation, new apartments, city living, incredible. Biggest mistake i ever made was not buying one of their places in brooklyn when they first started because those are nice the ones down by the bridge there. Skyrocket. Yes. Afternoon delight. Well, no, here you go again. Every time he takes it to a sexual innuendo. I didnt mean to. I didnt know that song was about that when i was 10 years old. Come on. Who knew . I thought it was a horrible song that ive hated for many, many years. But back to toll. Yes. Listening to zell this morning talking a lot about firsttime home buyers getting priced out. That was never tolls game. No, and says multifamily continues to do well because people cant theres not homes are hard to buy, mortgage hard to buy. I thought the california comments they didnt have enough inventory, kb homes had a lot. The stock has done nothing well below book, but i thought california was very interesting in terms of not being you know, they made the quarter without california. And they did make the quarter. I thought earnings were very good. Right. Revenue up too up 31 . Thats amazing. Thats a pretty big top line number. Yeah. They pivoted. And well above what analysts certainly anticipated the company would put up as revenue. Best in show today, best buy, okay, i see the issues. Auto zone i see the issues, back in with that buyback tomorrow, youre going to regret you sold it today. And facebook this morning in response to allegations of political bias against conservatives, Company Announcing<\/a> a revamp of its trending topics feature, the changes include clearer editorial guidelines and elimination of a top ten list of approved websites. Facebook says an internal probe did not find any evidence of political favoritism in the selection of stories. Nothing systemic. No, i mean, look at that crowd that supports Bernie Sanders<\/a>. Thats a Young Persons<\/a> crowd. I mean, you know, facebook skews young. Snapchat even younger. But theres a skew. The skew skews left. It does. Younger people. Right. Bernie sanders, we do not talk enough about what Bernie Sanders<\/a> could mean for our jobs if the democratic platform i mean, Bernie Sanders<\/a> is a socialist. He is. Thats not that good i mean, hes not a hes not a hes not a len nonist, those are good because then they would just shoot us. See, were killed in that. Were executed in that environment. Yes, understood. Kgb, they come for us. Were still a nation of laws, for now. Were allowed to talk about stocks in the socialist regime. Our papers arent revoked or anything like that, but in the end, i mean, he wants all stocks lower. Well, he wants to put in a Financial Transactions<\/a> tax. Well that would take i think 50 basis points it depends. Got to look at his website. Now im fefrorgetting the specis as in terms of bonds trades and stocks trades but believes it would raise 300 million a year. Thats not going to happen. Hillary clinton has told us she is the nominee, jim. Your point is will that influence the Democratic Party<\/a> and move it to the left. We were talking about whats gone to labor and whats gone to capital thats the issue. And thats why the minimum wage laws are important. Thats not going to solve that problem. No, and im not even look, i argue the Small Business<\/a> is going to be hurt. Big business benefits with a minimum wage increase. Small business is crushed. This is just another, you know there was a good study this week new startups, half of all new startups since in this recovery are coming from 20 counties. And theyre all the moneyed counties, the San Francisco<\/a>s, the austins, the new yorks, because Rural America<\/a> is getting the Washington Post<\/a> story that says theres almost no startups in Rural America<\/a>, that was incredible. I mean, this is a changed economy. Youre right. It is. Again, its difficult to sit here and talk about, wait a second, i like the deere upgrade but at the same time people are being hurt. I posted a comment about how its ironic that theres all this takeover activity and Crop Protection<\/a> and seeds when the farmers are doing badly. Immediately farmers are subsidied and thats ridiculous and how dare you defend the farmers. Im not, im saying it is ironic that the farmers are under siege, deere talked about that in the quarter but people want to be in the seed business, that would be the exactly opposite of what i wanted to be. But there is an undercurrent of socialism that we dont talk about enough because its like kind of, well on the other side and weve made this point, the views of mr. Trump on certain issues are very similar to the views of mr. Sanders. And aimed largely at Rural America<\/a> just as sanders is. Just amazing. I mean, look, theres president obama im so old that i was like, okay, so were selling arms to North Vietnam<\/a> . Its not the north anymore, jim. I know. Its just vietnam. I know. I mean, i remember when president nixon things i protested in college. You know . I do. I do. Somehow we started on facebook and got into politics. Well, theyre in politics. Thats how we got there. True. Grounding back to facebook which by the way has a 331 billion market value, just wanted to share that, this does show the ubiquity of the platform and power of the platform, i think, what i come back to when you read these stories is how incredibly influential conceivably it can be, how many people its reaching, and they havent even begun. Theyre not even monetizing whatsapp. Theres not enough content for it. I think its encouraging. Im about to Say Something<\/a> facetious, hyperbolic and i find it encouraging people get news from facebook and not grand theft auto and call of duty. If thats the bar. Grand theft auto provides a lot of news for people. I wouldnt know, but i wouldnt be surprised. Game of war right, game of war . Mine craft is like, hey, hows whats business like over in iraq . Let me check mine craft. Were all eventually going to be Walking Around<\/a> with those things strap around on our head. Bumping into each other. Yeah, with a. I. Basically controlling our brains. You know whats going to happen when we do that, you know what youre going to discover what you are . What . My simulation. Ill be yours and youll be mine. Elon musk has been calling people simulations. Yes. Saying theres a 50 chance youre a simulation. Actually said that to someone. 50 chance someones a simulation. I know. And our viewers know too because this clearly unsettled you. I didnt want to be known as elon musks simulation. As it is you cant get a tesla he got into your head. He messed with your head. He did. Yes, i didnt like thinking that i might be a simulation. It was kind of an existential crisis. It was a ka mu moment for me. When we come back, exclusive interview with nick goodman of gopro. Well take another look at the premarket and say a few words about our old friend mark haines who passed away five years ago today. Dont go away. In a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. It takesbut stealing itd work to eaonly took a few days. Female announcer protect your money. Find out if youre dealing with a registered investment professional at investor. Gov. Before you invest, investor. Gov. This morning were remembering our good friend mark haines who passed away five years ago today. Mark was the founding anchor of squawk on the street and coanchor of squawk on the street. Of course we remember him for his knowledge, wit, insight, no nonsense approach, genuine care for the small investor. And of course his steady hand during the dot com bubble, 9 11, the financial crisis, known for calling the stock market bottom of 2009. We call it the haines bottom. Our thoughts of course are with marks wife cindy, his son matthew and daughter meredith on this day. Always a tough day. Always. Because we know its been five years and theres still no replacing him. No, that Memorial Service<\/a> was really incredible. Remember the Memorial Service<\/a> . Of course i do. Mark was why i got on tv. You worked with mark for many, many years. Many years, a lot of Great Success<\/a> first ten years of squawk box together. And probably the only Television Personality<\/a> ever to have a market bottom named after him. It was incredible. He just literally said enough is enough. We used to talk all the time about moosh bottoms and crescendo selling and at what point its done. And this was the single best time ive ever seen it called. A lot of people were worried about their paycheck, lots of other people felt what was next, j. P. Morgan, bank of america. And he just had clarity. Yeah. March of 09. That was quite a moment. Had a lot of them with mark. Of course i always think of 9 11 for so many reasons, but he was many people will still stop me if they see on the street or want to reminisce about mark and theyll remember that because that was one of the finest performances ive ever seen anybody give. And whether it was the levity he brought, the nicknames or the nononsense, as we said the nofreepasses. What he told me. One time he grilled me because he didnt like something i said and he said to me after the break he said no free passes. And you tremble. Because mark represented whats right and whats good. We think about him. We try to live up to his legacy every day. And we miss him. Well be back after this. They may want the latest products and services, but they demand the best shopping experiences. Theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive its more than a nits 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. Wow. We got ages until the opening bell. Yes, we do. But your voice is back. Its so great. My hearing is back, had a tube inserted in my ear, never pleasant, never pleasant. This is going to hurt like the dickens, but if you scream, i understand. Youve been saying for some time you should become ceo of twitter. The piece is called hope is not a strategy, which is how many times have i said that to you . This is a piece that basically says the managements smug. Theyre not worried. Advertising going down. Revenue growth nowhere to be found. There are a lot of people on twitter who are always saying twitter should be bought by x. If you read this piece, you understand why no one would want to buy it, because it has no momentum and yet the company can i get that phone for you . Was it wife . No, i think it was my wife used to call all the time she didnt know i had a show, only knew mad money. This is a piece thats devastating. Its a devastating and well researched piece that people should read. Got a stock down 60 already, jim, come on. Didnt like it the whole way down, but now they just this is a piece that should be a wakeup call. I looked at the boards wakeup call for what . No free passes, my friend. I just think its a wakeup call for i dont know, for someone whos like at twitter. Come on, give me a break here. Youre saying advertising i believe percentage wise is up the same amount as google and yet off a base thats onethirtyfifth the size. I think if you read it thats why its down. Its the ethos, existential conflict, the notion that the Company Thinks<\/a> its doing well because it beats its own internal benchmarks. I thought it was a good piece of research. Okay. It wasnt toll. Well, not much is. It was more james patterson. All right. Good seller. Where are we headed next . David, everyones been concerned about microsoft because cloud slowed, windows slowed, saying thats about to change. This sells at 18, 19 times earnings, moments of 3 yield, people are concerned that both did badly last time, and talk about a Conference Call<\/a> that was a bummer. The microsoft call was a bummer. It was like a movie that failed. It was like a movie about like wall street that didnt go anywhere. Well, that was that move downright there from the quarter. It was bad. Yeah. But theyre saying, hey, listen, dont give up. If thats the case this is going to be the next big cap stock to really rock and roll. Very good piece in usa today about stocks that rocked while the market rolled. Its been a bear market for a year now according to a lot of people. I thought this was important because this was the call that said, wait a second, even the companies that are switching to the cloud have failed. Im watching this call as being tale of the tape today. Remember mark haines said Reverend Church<\/a> of whats working now. Microsoft. All right, its working now. Opening bell a few minutes away. Talking a lot more including the latest on viacom, oh, what a drama. They could put that one on mtv, ni b. E. T. Simultaneously its such a good drama. Working on a screen play. Were back right after this. sfx golf swing and breaking glass sfx broken glass falling heres to breaking more glass ceilings in golf and everywhere else. The kpmg womens pga championship. Youre watching cnbc squawk on the street live from the Financial Capital<\/a> of the world. Opening bell in just about three minutes or so. A lot going on. Weve gotten to a lot of the analyst calls. From january 1st, jim, to the end of april, the dow had single digit moves two times. This month weve had four singledigit closes on the dow. This reminds me of 1978, 1979 where youre like, wow, geez, nothing happened. Todays rally so to speak is based on europe passing the book here. Why is europe rallying . Because the dollars so strong. Thats the opposite of what we want to see here. So the futures are reflecting an incorrect take. And thats why i think once again we may have one of these things where theres buyers, sellers and they just cancel each other out. Its incredible how theres nothing cooking. Nothing. I mean, weve had big takeovers, weve had some earnings surprises. Maybe today is a breakout day, but i look at the dollar and i dont think it does. What do you between now and the next jobs report, i guess, or yellen on friday . Minicrossword, i finished it in 45 seconds. Weve still got negative rates on Something Like<\/a> 25 of all outstanding debt. Obviously japans got a lot of outstanding debt. Right. But, you know, dell continuing to do its financing for its emc deal. Oh, thought you adele not adele and benefitting from that phenomena as money races here. Buyers willing to borrow plenty of money to buy monsanto because they can do so who knows what their borrowing costs will be. Theyll say investment grade. I think within the market there are incredible moves. I profiled the medical device company, theyre incredible. Nordson presented incredible last night. Were seeing Semiconductor Companies<\/a> really come on because of apple and the iphone 7. The notion this market is boring is a mistake, but the overall dell cant get traction because of the dollar. If you look at how much is dollar based, holy cow, that mcdonalds decline, thats dollar. Right. I know you were talking about that yesterday on mad money. But in within the market there are some incredible things that are happening. And i just think people have to focus on if you take a like facebooks been rolling over. It hit a wall. Another dollar. Right. Amazon did not advance on those two upgrades, so things stalled. But theres lots of activity in takeover world, chemicals, you have to look for it. Yeah. Lets get to the opening bell here and a look at the s p at the bottom of your screen. By the way, nasdaq has alternated gains and losses for seven sessions and hasnt done it for since 2007. 2007 . In sailing they say youre in irons. Theres just no wind. Wow. Where is admiral nelson . At the big board this morning its Financial Services<\/a> Company Based<\/a> in argentina celebrating recent ipo over at the nasdaq home bank shares based in arkansas celebrating its tenth anniversary. Weve done best buy. Done toll. Can we talk about oil for a second . Yeah. Now, a lot of people think that oil is too high. Do you know canadas back online . And it didnt hurt oil. Remember oils supposed to be up because of the wildfires . Canada is back online. And theres just demand. Right. I mean, this is incredible. And yet i keep thinking everybody says wait a second. You know, its just a shortage here or shortage there, but the fact is is that oil is sticky. And a lot of it is china is importing and our numbers i mean, i dont know if you just see one by one these little companies are just going down. And theres so few counties that are producing oil. I think its the argentina soccer match breaking out. Argentina going capitalist. They are. And its going fast. And a lot of people putting money together. There was a hedge fund putting money together just to be able to invest in argentina. That would be an amazing transformation versus whats going on in venezuela, which is trying to raise money . Did you see venezuela trying to raise money . Coke having to halt production of nondiet soda because theres no sugar. You said it. Its a complete failed human tragedy, becoming a failed state. Happens to be one of the richest countries on earth, number one repository of oil. Thats insane. And schlumberger is not working there because they cant pay. When do the people rise up there . I dont know. Thats a troubled situation. Deeply. On oil, how much of the runup has been due to some of these temporary supply outages . And then does it catch up to commodities on the downside . I dont know, france, theres a strike of all refiners. That would mean theres a back to oil. Nigeria has issues but iran pumping more and more all the time. I think whats happening here is china is back in terms of consumption buying suvs uses a lot, were driving more, there is a bid under oil. And its kind of shocking. But i think we have to start accepting that this is the level where oils going to be. If you go over what some of the airlines are saying, theyre very concerned its going to keep going higher. But a lot of the Oil Companies<\/a> need 60 70 in order to be able to reopen and thats not going to happen. But this levels sticky and i think its worth pointing out because everybody thought oils going to roll over. I mean, the markets up because of europe, but also because oil. The futures were not up nearly as much until oil switched. Oil is down 47 cents when i got up and its shifted. That was at 4 15, just for the record. Dually noted. 4 15. I slept in a half hour because that phillies loss kept me up. So you woke up at 3 30 instead of 3 00 . 4 15 we were ahead 41. I hate to lose a lead like that. Yeah. Its disconcerting. No, we handled the nationals last night. You sure did. The mets did. What a division. Monsanto shares are up this morning. Always interesting to take a look at where that stock is trading. A 122 bid is out there as we know now. Bayer continue to make its case to its shareholders, but interestingly monsanto at least as of now has some meetings scheduled in new york tomorrow. Well see whether the ceo shows up to talk to some of his companys shareholders or they choose not to especially given the way things went the last time they chose to speak to shareholders namely with their c. O. O. At the Conference Last Week<\/a> where he made some ill advised comments that caused all this to come out into the public realm. Suboptimal comment. Suboptimal david, let me ask you absolutely nothing there. Monsanto is a big employer. Yeah. How can congress let this one be bought . I an, isnt monsanto like one of those companies thats rock solid american . When did congress have something to say about m a . Everythings changed. Really . You have a review the committee for investment here in the United States<\/a> from a National Security<\/a> perspective, that could be part of this review. But as ive said a number of times, the key will be in the rejection that we get, and im saying were expecting monsanto will reject as is typical of a first bid. But what will the language be like that that rejection is uses . Will it include some of the things you just raised . Or antitrust or will it simply be we want more money . Right. That will be key. Because that will send a message to bayer and to monsantos shareholders as to whether they really are willing to be acquired. I cant tell you that at this point. The advisors to the company have not been particularly forthcoming so far at least with giving me a real sense as to monsantos posture. Well, i saw Archer Daniels<\/a> upgraded today. I think these are all kicking and screaming pieces saying listen the farmers fine. I feel like asking argentina and brazil those key farm areas, dupont keeps going higher in this crop. And the announcement of the various people kboing to be taking over the different units of the combined dow dupont. I premiered on mad money the eighth biggest Crop Protection<\/a> company and Crop Protection<\/a> is a continual theme. I find it unbelievable that ag is so hot. I mean yeah, the upgrade of deere today at bmo. The upgrade of Archer Daniels<\/a>. I know, i think these are significant. I think people are saying that the long dry spell in ag is over and that the farmers can make money with corn at these prices and soy. Its also big for brazil. You think brazil is going to come around because brazil has tremendous farm and tremendous subsidies for farms. So i dont know. Im not as bullish on the farm economy, but i got to tell you if you step back this is where people think the great consolidations going to occur. Its going to be our man in brazil not too long from now. Yes. Maybe more depending on how things go. My kids dont want me to go. They dont want you to go . No, theyre worried. Theres always drama around the olympics. Yeah. But apparently theyve got most the facilities done in brazil, right . Well see when we get there. Surprise me. Wear your hard hat. The olympics are the greatest. I mean, i wanted to go to south africa. Youre so lucky. Its going to be fabulous. These comments by harker. Oh, geez. Up to three hikes this year, sees gdp considerably better than q1 and the rest of the year. I hope hes right about that. I was curious, zell this morning made these comments that weve been desensitized to the cost of capital over time. Yes. And now he says the feds credibility is on the line they may have to hike even though the economy doesnt demand it. Said, listen, low rates have done nothing. What worries me, harker doesnt vote. I wish i could see the confidence that he has in the second half. I would love to see that. Like where does it come from . If the dollar goes higher whats so funny . Why dont you share it with the whole class . No, share with you. Its funny. Its a chewbacca mask. Its david with a chewbacca mask on. No. Look at that. See, hes speechless. We can get to mary thompson. Why not . What do you think, carl . Sure, dows up 157. Were back to 2064. Mary, good morning. Good morning to you, carl. Thats the highs of the session for the Dow Jones Industrial<\/a> average along with stocks today we are seeing strength in the dollar. Oil is also to the upside. The rally were seeing broad based and on the back of gains in europe as well as bull shows likelihood of a brexit a little less likely actually and also strength in the exports as dollar is strengthening against the euro. Take a look at the s p 500. All the gyrations this year puts it pretty much unchanged, today though up just about 15 points thanks to a broad based rally all ten of the s p 500 sectors that we watch are in the green in early trading. What were watching today of course theres more fed speak. You heard carl mention it earlier, Philadelphias Harker<\/a> saying a rate hike in june is certainly a possibility, two to three rate hikes this year but of course focus will remain friday when fed chair janet yellen speaks. Investors are watching that very closely. Also today we have a twoyear note auction, and traders are watching this again because thats the treasury thats rather sensitive to fed policy. So they want to see what demand is like for that. And then Home Builders<\/a> are in focus as well today because we have new home sales thats due out at 10 00 eastern time today. And of course Toll Brothers<\/a> came out and reported stronger than expected results, good margins, good sales and also high occupancy rates at some of its apartments. All of that giving a lift not only to Toll Brothers<\/a> as you see its up over 4 , but also some of its rivals all up more than 1 in early trading. Different story for retailers though as results from these Companies Continue<\/a> to be nix. Current quarter giving disappointing guidance. Auto zone blaming weather on its miss in the last quarter. Its stock trading just fractionally lower and not putting pressure on some other rivals in todays session. We want to mention Deutsche Bank<\/a> because moodies came out and cut the debt to just two notches above junk, stock still higher though. Moodys is concerned about a restructuring the company is undertaking along with low Interest Rates<\/a> and of course economic headwinds which are impacting some of the bigger global banks. Lastly we want to focus on energy. Right now we have crude oil holding above the 48 a barrel level. These stocks higher in the premarket holding onto those gains with the exception of apache down just about 0. 6 or just about 0. 2 right now. The dow remains higher up 151 points, so nice gain in the early trading. David, back to you. Thank you very much, mary thompson. All right, new day, more drama on the viacom cbs front. In fact, just moments ago Sumner Redstone<\/a>, the Controlling Shareholder<\/a> of both companies, the former chairman of both companies, former ceo as well at one point, announced what weve already heard had been potentially in the wings. New trustees for his trust, the Sumner Redstone<\/a> Irrevocable Trust<\/a> and new directors to National Amusements<\/a>. Remember, it is National Amusements<\/a>, the private company that he controls 80 of which then controls roughly 80 of both viacom and cbss voting shares. He has announced that National Amusements<\/a> General Council<\/a> ted janikowski and former media analyst, used to be smith barney, i think, will now take the place of Phillippe Dauman<\/a> and George Abrams<\/a> on the trust as well, mr. Redstones oldest granddaughter, kimberly will take the two seats that have been vacated on the board of directors of National Amusements<\/a>. This of course not a surprise given what we reported yesterday and the lawsuits that have already started flying, one in Probate Court<\/a> in massachusetts seeking to say that mr. Redstone is under undue influence from his daughter Shari Redstone<\/a> in agreeing to these very changes i just mentioned. Another in l. A. Seeking to have a court confirm the changes that we are now just mentioning, and the removal of mr. Abrams, mr. Dauman. But the bigger question now i can tell you comes down to this, which is an expectation on the part of directors of viacom that theyre going to be removed very soon by mr. Redstone. Now, when you look at the complaint that they filed yesterday in the Probate Court<\/a> in norfolk, massachusetts, and you read it, of course they believe that mr. Redstone is under the full control of his daughter shari, that he is not capable of making decisions any longer and that simply put she is basically taking a pen and writing his name on these decisions. She fully and completely rebuts that is the case and says without reservation that these are his decisions and there is a quote in the latest release announcing the changes of the trust. This is my trust and my decision. I have picked those who are loyal to me and removed those who are not. That is according to mr. Redstone, a quote. And that is what much of this will come down to. But what i can tell you is that there is a concern on the part of or an expectation on the part of directors of viacom that perhaps in the next few days Sumner Redstone<\/a> will move to remove them as directors of the company and replace them. That would include the companys chairman and ceo Philippe Dauman<\/a>, will that happen and if that does happen, the expectation is you will see a stay applied immediately and this would be taken to court in delaware where viacom of course is what happened to the Massachusetts Court<\/a> . Well, thats about the probate and the trust, where the trust was formed. How do you follow this . When youre dealing with issues of corporate governance, youre going to delaware where the companys incorporated. Jim, it is a complete mess. Now, a lot of this seems to go back to the idea that mr. Redstone doesnt want anything done with paramount, but i can tell you that this process to sell a Minority Stake<\/a> in paramount conceivably to a Chinese Company<\/a> and to give a large valuation, a valuation above what people expect to paramount given at least its current cash flow, metrics, its ebitda, its revenues, that continues. And it is getting closer, from what i understand. It was back in february the viacom board announced plans to sell stake in paramount. It was most recently in late april where Philippe Dauman<\/a> said the process continuing and on track to securing agreement by the end of june. That continues. And it is their expectation, i believe, on the board of viacom that they will come up with a transaction that even meets the muster of mr. Redstone and his daughter shari. Well see. But, man, this drama, it really is. Did you watch the o. J. Thing on fx . It was great. I think this could be next. What bothers me is theres a real Public Company<\/a> involved. Two. Dont forget cbs. Well, cbs isnt under crisis. Right now nobody is making a move on cbss board, but no one says thats not within the realm of possibility. Ive never seen anything like this. This is just a free for all. I mean, if they fire philippe again, i think the Board Members<\/a> are expecting is fully competent and issuing these directives but you see, david theres an expectation hell move on to the rest of the board of viacom. Well see. Thats speculation. I want to make that clear its speculation on the part by the way of those very directors, but its not without some credence. You know, i know you said viacoms not going to i mean, its tempting to think that you buy viacom. Some people buying it on the expectation youre going to get a Management Change<\/a> which could be seen as a positive. Im kind of there. Speaking with the companys lead director when i spoke to him this weekend he says there were you know, weve gone over our plan and we are holding them very accountable and we have strict metrics in terms of what were trying to accomplish. And theyre going to be Holding Management<\/a> quite accountable over the next six months to see if they deliver. But it may not be that long. All right. Lets move on now to the bond pits and check in with Rick Santelli<\/a> at the cme group in chicago. Rick. Good morning, david. You know, the world changed with regard to the complexion of the yield curve, sentiment about rate hikes, all that of course last wednesday. If you look at a twoyear note for one week its yields, what youll notice a couple things, first of all its pretty aggressi. It looks like its extending what began on wednesday. But remember the session before the minutes tuesday it settled at 83. Its trading 92. Pretty big move. Look at a oneweek of tens, its resembling much more the activity in the short end. Its starting to firm up and play a bit of catchup. If you look at the dollar index for one week, its aggressive. It might not be as volatile, but its still aggressive. Lets open the charts up a little wider, shall we . Lets look at march 1st. If you look at the twoyear, you can see since may we havent had these yields. But if you go to the opposite end, the 30year, you can see the right side of the chart is much less aggressive although today it is leading the charge with the most selling and the highest pop in yields about three basis points, we will have to see if that has any staying power. Remember, with the twoyear concession meaning a higher yield of course, lower price, maybe we will find some demand. Its going to be a nice litmus test at 1 00 eastern today. And the final chart if we look at dollar index for that, well, march 1st start, it is a lot less volatile than the Interest Rates<\/a>. That kind of makes sense, but it is nonetheless steady and aggressively climbing up another third of a cent today. Of course the twoyear and the dollar index their charts resemble each other, which makes sense. They are both highly susceptible to changes in their trading based on the fed. Carl, back to you. All right. Rick, thank you very much. Rick santelli. When we come back, a controversial magazine cover featuring a tech executive whom you definitely know, plus an exclusive interview with gopros nick woodman, his game plan for growing the action camera maker and the stock, dow session high up 166. Were back after a break. The call just came in. Shes about to arrive. And with her, a flood of potential patients. A deluge of digital records. Xrays, mris. All on account. Of penelope. But with the help of at t, and a network that scales up and down ondemand, this hospital can be ready. Giving them the agility to be flexible reliable. Because no one knows like at t. The eclass has 11 intelligent it recognizes pedestrianss. And alerts you. Warns you about incoming crosstraffic. Cameras and radar detect dangers you dont. And it can even stop by itself. So in this crash test, one things missing a crash. The 2016 eclass. Lease the e350 for 499 a month at your local mercedesbenz dealer. A good car has to maneuver quickly. Thats also true of a good car company. People have always bought cars. But we saw an opportunity in sharing cars. So we moved fast and launched car2go in 29 cities, all around the world. Doing that required dozens of data centers, designed for speed and performance. We built our business on the ibm cloud. Because thats what the ibm cloud is built for. Igoing to clean betteran electthan a manual. Was he said sure. But dont get just any one. Get one inspired by dentists, with a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean oralb. Know youre getting a superior clean. Im never going back to a manual brush. The cover of the latest issue of variety likely to raise some eyebrows featuring an ill trags of yahoos Marissa Mayer<\/a> carrying a y shaped wooden cross. The sale with yahoo on this was the drama we were watching before viacom came along. Yeah, thats much better. Viacom is a much better one. Kind of a tasteless cover. It really is. Makes me feel badly for marissa. All the attention that she has gotten beyond what i think would be warranted for another ceo. I mean, come on. Yeah. The renumeration might take the sting off it some would argue. True. Yes. And of course we reported on this last week reluctantly in part because of the journal story, but well see. This process is ongoing for the sale of the core business. And it continues. We should know something within a number of weeks that gives us a better sense as to where it will end up. Speaking of media, this week we discovered that disney films exclusive to netflix will begin in september. And that stock is starting to move. You know how hard it is to get those. Remember when my kids growing up how do we get thumper, bambi, treasures island. Its true. Diamonds are forever. They were in a james bond movie. I like them better. Netflix is moving up. Netflix has been the laggard and now its catching up. One reason the nasdaq has just crossed into the green for the month. Well get stop trading with jim in a minute. Time for cramer and stop trade i trading. Weak dollar after strong dollar, auto zone gets benefit. Theres two kinds of tech. There is tech that is cloud related, and then theres sandisk that is a bit of a cloud component, and then theres this Western Digital<\/a> and seagate and intel and microsoft. We had a positive piece about microsoft, now we had a positive talk saying get ahead of Western Digital<\/a> thursday. This would be how you have a tech rally. You have cloud, you have Old Fashioned<\/a> tech. It can occur, and, look, i think the markets up a little bit on nothing, but watch tech because thats where the action is. If you get old tech and new tech going together, fang and old tech. Amat amats quarter that was the beginning of the turn in the semis. That was an amazing Conference Call<\/a>. Back online, semis ordering, lot of good news in tech. Lets see if it percolates. Whats on mad tonight . We have a company ther thermofisher that provides most of the equipment that you need in order to do all this fabulous research. Mark casper is an amazing guy. That stock has been on fire all the way. One of my absolute favorite companies. I cant wait to talk to him. See you tonight, jim. Well talk more markets in a minute. Good tuesday morning. Welcome back to squawk on the street. Im Carl Quintanilla<\/a> with sarah eisen, simon hobbs and david faber at the new york stock exchange. Got some cross currents this morning, markets up even though dollars stronger, oil recovering from earlier losses. We want to get right to Rick Santelli<\/a> in chicago with the latest new home sales levels. Rick. Yeah, carl, i have some weird data coming out here. Now, minus one on the may Richmond Fed Manufacturing<\/a> index, minus one lowest level since the minus 4 we had in february. But heres the surprise, even a shocker. Lets look at april new home sales. 619,000. Thats seasonally adjusted and annualized up almost 17 . But get this, this is the highest level since january of 2008, january of 2008. So its going to be very fascinating to watch. Hey, maybe theyre all starting to listen to janet yellen and jump off the fence. Im not sure, but i know one person whos got her shovel digging into the data right now. Lets head west and see what diana olick has to say about todays strong new home sales. Reporter well, rick, you said weird. Im going to say way weird. I mean, this is up nearly 17 , as you said, but im looking at prices too. You had a median home price of 321,100, that is substantially higher than we saw in april of 2015 where we were up around, you know, 280,000. No, we are seeing supply drop to a 4. 7month supply. We were at a 5. 8month supply just one month ago. So youre seeing supply drop. Youre seeing prices go significantly higher. This may be a measure of people buying more expensive homes. We saw that in the Toll Brothers<\/a> numbers today. They beat on their earnings for q2 and their median price was significantly higher. So were seeing the numbers skew toward the more expensive homes. And youre seeing that in this median price on new home sales. The street was looking for 524,000. 619,000, now, a lot of folks are going to say, okay, these numbers have very wide margins of errors, but still thats very significant. And we want to also note that these new home Sales Numbers<\/a> are based on contracts signed in april, not closings like the existing home Sales Numbers<\/a>. These are folks out shopping in april for newly built homes, back to you guys. Going to be a good spring for a lot of people. Thank you, die ya na. Coming into that figure already leading a triple digit rally up 176 on the dow. The dollar is higher of course. And importantly perhaps the yield on the twoyear is reaching its highest level in over two months. Joining us now is richard turnl, global chief strategist at black rock who joins us from their headquarters in london. This is a very strong housing figure here. And i know that you believe housing and in fact the u. S. Consumer are strong, but still you have doubts as to how far the rally can run on the equity market. Why is that . So id look at the housing figure today as part of a pattern of data weve seen for some time. That pattern is essentially confirmed that were in a long cycle path of growth generally is slow, but its robust. Were not seeing any of the weakness we saw earlier in the year. Were seeing more and more confirmation that were in this long sustainable flat cycle. So what that means for equities actually i think in the short run its good news. The market has started to price in lower risk of recession, youve seen this big rally going back to the beginning of february. I think the question Going Forward<\/a> though is how much of the returns have you front loaded, valuations now look much more demanding than they looked a few months ago. Weve got the fed back in play with some inflationary pressures building and a number of risks out there including brexit which i think we need to take into account. Yeah, perhaps well come onto some of those, but if the data is strong and solid and sustainable, is it possible to stop pushing out your time horizon as to how far growth will go and how strong that growth will be . In other words, rather than maybe thinking that the cycle might have turned sooner rather than later, can we say, well, maybe weve got three or four or potentially five good years here . I mean, do you go into that type of argument . Is it possible . I think its very hard to forecast three, four, five years out. Its hard at any time to forecast that distance in the future. Its particularly tough now given some of the uncertainties we see. But what we can say is that were seeing no indicators today which suggest this Economic Cycle<\/a> is close to an end, either in the u. S. Or the rest of the world. And actually the data were seeing is giving us greater confidence that it can be sustained. So i think to move us out of this pattern you need to see a shock. And the question is will we see one of those shocks over the coming months and years. Richard, theres been some chartists out there watching not a dramatic rise but a bit of a turn to the upside in Consumer Credit<\/a> delinquencies, the kinds of things that have prestaged a downturn in the years to follow, have you been watching that . Does it make some sense to you . Youre getting a number of later cycle signals coming through, so delinquencies as one, broadly youre seeing default rates start to creep up within the market as well. These are all what i would say sort of flashing amber signs about where we are in the cycle, but nothings flashing red right now. So, again, the signals we look at that both track the economy now, which are telling us the economy is doing fine, not great i have to emphasize, but fine tracking close to 2 gdp growth. And the forward looking indicators that were looking at are all telling us the same thing which this looks sustainable. But youve got to bear in mind were in the seventh year of the economic expansion now. The equity markets have rallied a long way. So when you think about what the future holds, youve really got to bear in mind that youre starting from a high level of valuation, you had an advance stage in the cycle and there are material risks out. Well, there was one point in the not too distant history here where all you had to do was look at the price of oil to determine which direction stocks were in. Were up today above 48. As long as were in the high 40s here when it comes to oil, wti, does that mean weve broken the dependence between the stock market and oil . Or is it the data really outshining some of these correlations . So i think youve actually seen some very interesting patterns not just today but over the last few weeks. So you see the dollar rallying now for a few weeks now on the back of expectations that the fed could raise Interest Rates<\/a> earlier than previously anticipated. As the dollar rose you saw many of the historical trades associated with the dollar emerging markets have started to be a bit weaker, many Commodity Prices<\/a> have rolled over as the dollar strengthened. Oil has been the exception. So i think this tells you theres Something Different<\/a> going on in the oil market. I think theres two very specific things going on. So one is youre get iting supp tightness, altitude in areas like nigeria seeing the effect of the canadian fires, but what youre also seeing is demand picking up. So the iaea raised demand for forecast this year something very, very few people anticipated at the beginning of the year. So our confidence that oil can stay in this lets say close to 50 range, that confidence has increased significantly. And, again, i think thats just taken away one of the Downside Risks<\/a> for markets earlier this year. So when i look at this rally since february, thats rielly not been about the Market Pricing<\/a> in economic outcome, its really been about the market becoming much less concerned about a number of risks. Oil being one, china being another and actually recession being the third. Richard, i think you started your career at the bank of eng la land. Youre obviously joining us from london today. Clearly one of the major events everybody is watching is whether the uks vote to leave the European Union<\/a> in a months time. I dont know how free you are to speak because of the electoral rules that exist in london. Maybe you have to put a warning on what youre about to tell us, but are we able from a market perspective to maybe take that off the table as a low probability tale risk now given the polls that we have today and whether bookmakers are in the uk . I dont think we can take anything off the table. Youve seen in the past the polls have not been always accurate in terms of predicting the outcome. So i think thats a risk which is still out there. What i think is interesting in terms of what youre seeing today is if we look at our flow data and crowding data, you see that sterling is now a very crowded short position in the market. So a lot of investors have anticipated, you know, fears around brexit by shorting the pan, what that means is in the event that the uk chooses to remain actually has material upside to sterling and youre seeing some of that Short Covering<\/a> today. I think what youre seeing as material to a risk now. Where youve got crowded trades you can see potential for that to move in either direction quite materially. Very carefully put. Richard, good to see you. Thank you for your time. Joining us from black rock where hes the global chief investment strategist. Thank you. Getting some changes to the way twitter works, lets get over to Julia Boorstin<\/a> in los angeles this morning. Hey, julia. Hey, carl. Twitters announcing some tweaks this morning designed to help it jump start stagnant user growth. First to make more room for people to write in their tweets, names and media attachments will no longer count towards the character limits, encouraging more people to talk to other people and share the videos and polls theyre sharing. Second, now starting a tweet with a user name will reach all of your followers, no longer have to put a period in front of that name. Third, now you can retweet and quote yourself. Twitters new chief marketing officer tells me all the changes theyre making are tied to feedback from twitters community. And she says she thinks these changes will work to deepen engagement, make it easier for newcomers to use the service. But twitter shares are down about 4 today hitting a new alltime low on a downgrade to sell by analysts at moffett citing advertiser fatigue and initiatives are too little too late. With twitter shares down over 60 in the past year, the Company Continues<\/a> to be plagued by questions about its growth potential. Guys, back over to you. Thank you. I always wanted to retweet myself. I like that change. Julia boorstin in los angeles. When we come back, 1 gains on the major averages, but shares of best buy are not participating, moving sharply lower down almost 7 . The latest retailer hit by a weak forecast. More on the retail wreck straight ahead. And then shares of gopro down 80 over the last year. Theyre up today. What can Ceo Nick Woodman<\/a> do to turn it around . Well ask him in an exclusive interview coming your way on squawk on the street. Man 1 youre new. Man 2 i am. Woman exmilitary . Man 2 four tours. Woman you worked with computers . Man 2 thats classified, maam. Man 1 but youre job was Network Security<\/a> . Man 2 thats classified, sir. Woman lets cut to the chase, here. Man 1 whats youre assessment of our security . Man 2 [ gasps ] porous. Woman porous . Man 2 the Old Solutions<\/a> arent working. Man 2 the world has changed. Man 1 meaning . Man 2 its not just security. Its defense. Its not just security. Its defense. Bae systems. Best buy out with results beating estimates but forecast giving investors something to worry about. Courtney reagan spoke with the ceo and joins us from the nasdaq. Good morning, carl. Best buy turned in a relatively healthy First Quarter<\/a> given the retail environment beating wall street estimates on both the top and bottom line, but forecast is disappointing. And the cfo is leaving to be replaced by current strategic growth operate. On a quarterly call said its not theres been innovation in Consumer Electronics<\/a> but whats hurting the top line is product deflation. Imagine in of the other companies you cover dealing with 30 Price Reductions<\/a> for 4k tvs and what that would do to the top line. Explaining having top sales in that environment is something hes quite proud of. When it comes to number of stores, hes taking an incremental rational approach to analyzes his store fleet saying why would our investors want us to close Profitable Stores<\/a> . Now, when it comes to profit the Electronics Retailer<\/a> reported earnings of 44 cents driven by sales growth in canada with 4 cents attributed to share repurchases. Revenue also beat at 8. 44 billion but again most coming from Canadian Store<\/a> sales as domestic revenue was essentially flat. Comparable sales also came in better than expected, but as i mentioned flat. The company reaffirmed its full year guidance, it warns the Second Quarter<\/a> will be affected by several factors 9 cents from lowering Service Pricing<\/a> and elimination of a Profit Sharing<\/a> payment received last year, plus a 3 to 4 cent impact from inventory issues after the japan earthquake. The company will see benefit from share repurchases. Best buy did see a bright spot in its online sales growth increasing 24 due to higher traffic in conversion rates. That means online sales now account for more than 10 of best buys total sales, which is Getting Better<\/a> but certainly probably not where it should be at this point in the game of giving consumers to buy whenever wherever, back to you, sarah. Yeah, best buy now at the bottom of the s p, courtney, wiping out pretty much all of this years gains. Courtney reagan at the nasdaq, thank you. Thanks, sarah. For more, lets bring in retail analyst at j. P. Morgan whos got a neutral on a 30 price target. Chris, i wonder given the rundown that courtney just gave us, is the stock reaction today about the outlook or about the fact that the cfo is leaving . Bbnt called her one of the most talented Retail Executives<\/a> in the u. S. Today. Its exactly that. If you look at their comp and the domestic comp beat in the First Quarter<\/a>, theyre guiding ahead dmes comp in the Second Quarter<\/a> being conservative on earnings its really the departure of Sharon Mccullen<\/a> and you know youre famous when youre known by first name alone and shes known as sharon. She was the architect, key architect of the turnaround. She came here in 2012, stock trading 2. 5 times ebitda at that point and took it all the way up to 45. So her departure when you see the tv cycle rolling a bit here and comps decelerating in that regard, i think are telling investors that you should be concerned about not just the top line outlook but also that the low hanging fruit on the cost cuts and the efficiencies theyve driven are getting to the later stages. Thats just where i wanted to go because so much of this turnaround has been driven, as you say, by cost cuts. Still mention does the second priority in prepared remarks by jolee says hell continue to drive cost reductions and efficiencies, how much more cost cutting is there to do here . Yeah, theyve done a lot. I mean, when she came in they took their gross margin rate down 10 , 200 basis points yet profitability has actually gone up over that timeframe and about a 4 ebitda margin. They have another million or 300 million or so left in terms of cost cuts on a 50 billion retailer that number is getting smaller and smaller. Initially they started out with a billion, theyll get to about 1. 5 billion in total. That number keeps dwindling down. I think longterm from their perspective if they could just generate flat comps in a highly deflationary category as courtney talked about, theyd be a win and just buy back stock and pay a nice dividend with cash flows. But really real risk Going Forward<\/a> in 17 is low hanging fruits done, sharons gone and comps have the threat of turning negative next year. So lets talk about it as an investment. This comes in a series of retail misses. Weve been calling it the retail wreck and really sharp negative reactions from shareholders across retail depending on the category. But still best buy has outperformed in the last 12 months against other specialty like gap, like foot locker, stiffny, staples. So is it still a relatively good bet here on the company, or is it the category in general thats held up Better Electronics<\/a> . Yeah, i think, well, a, they dont sell apparel and theyre not really on the mall. And thats a win in retail right now if you think about the list that you just mentioned. Thats where ground zero has been in terms of the impact of very negative comps in retail. Best buy is successful because youve had a tv cycle thats been driving the business and their own initiatives. Our 30 price target the stocks getting back there today we think thats largely fair value. As you look out into 2017, again, it gets more nebulous in terms of the ability to drive comp, so, you know, were very comfortable with where we are from a price target as well as a rating. Chris, you keep touching on the tv cycle. Can you just spell it out for us . In laymans terms what does sharon know about the tv cycle that investors and the public should know . What happens from here . So if you look back tvs was a big driver of comps in the back half 2005 to 2010. Tv turned negative in the First Quarter<\/a> of 10. And from the time that it went negative to 20 Second Quarter<\/a> 2014, best buy comped negative. So as tv goes, so goes best buy. With 4k and larger screen sizes, you saw tv comps reaccelerate, double digits for the first year and high Single Digits<\/a> over the past year. Those price points are coming down 30 as courtney talked about. Ultimately the unit growth wont be enough to offset that price deflati deflation, so as you think about this christmas youre going to be able to go to walmart or amazon and find a 900 60inch 4k mid tier price point and that will be another 20 cheaper next year. Its really the commoditization of the tv cycle. Good news for consumers i guess tv deflation. Yes. Good to see you, chris. Thank you. If you can squeeze another tv in the apartment of course. Coming up on the program, the continuing fallout of the tsa over those long lines and widespread criticism. Thats next on cnbc. Dominic chu has news for us on under armour. We do, sarah. Under armour has signed what is believed to be the richest contract in College Sports<\/a> history here. At noon today they are expected to announce a footwear and apparel deal with the university of california los angeles, ucla in a deal that cnbc has learned could be 15 years in length in terms of tenor and 280 million worth of money overall. This does, again, put another bit of burner underneath this whole battle for supremacy in the world of athletic apparel. We know nikes already signed a lot of big programs like michigan, like texas and a lot of these d1 schools here, under armour looking to add to its stable already has schools like wisconsin and notre dame and aubu auburn. Stock is moving higher outpacing the overall market, however we should note under armour shares have been under a lot of pressure as of late. They recently hit a 52week low back in the course of the last month or so. Well see if this gives any kind of bid to understood armour stocks, back to you. Looks like the second biggest deal is ohio state and nike at 202 million. Dom, thank you very much. Doesnt look like investors seem to mind, simon. No. Because the other deals are even bigger, like jordans deal. They keep setting records. This is college. Because it works, nike founder told you the other day. Meanwhile heads are rolling at the tsa. The agencys head of security is being ousted amid the uproar over long lines and airports, our own phil lebeau is in chicago. Phil. Simon, not a surprise given the uproar that weve seen regarding the problems with the tsa not only in the last couple of weeks with these long lines, but go back to last summer when there was an audit of sorts done and 90 of the weapons that were planted were items planted going through security were not caught by the tsa. Thats one reason why kelly hoggan has been relieved of his duties as the head of Security Operations<\/a> for the tsa. By the way, mr. Hoggans bonuses of 90,000 over the course of 13 months has a lot of critics howling as well. The tsa shakeup follows persistent long lines. In addition to this transition, the tsa is also creating a Rapid Response<\/a> team that will target those airports where lines seem to be flaring up or seem to have staffing issues. Theyre also testing out new security screening processes. In fact, there is a new line that is going to be opened this afternoon in atlanta modeled after a european system. Its supposed to move people through the line quicker, more efficiently. At the same time the tsa continues to tell people get tsa precheck if you dont already have it. About 2. 9 Million People<\/a> have it. Theyd like to get that up to 25 million. This video its from here in chicago. Thats the precheck application office. People waiting in line for hours just to apply for precheck. Thats part of the problem as well. People are saying im happy to apply for precheck, make it easier than waiting as long as i have to wait at the airport in order to get it. So, guys, the fallout continues for all of these Security Problems<\/a> at airports. Its also expensive at 85. A lot of people think they should lower the price of precheck. Right. Thats one of the criticisms. Phil, thank you. The latest on the tsa drama. Up next, facebook detailing changes to its policies today amid charges of bias. Well talk to one of the journalists inside that meeting with Ceo Mark Zuckerberg<\/a> last week, get his take on the new policies and dont miss our interview with nick woodman, ceo of gopro coming up in a few moments on squawk on the street with the dow up nearly 200 points. You wont see these folks at the post office. They have businesses to run. They have passions to pursue. How do they avoid trips to the post office . Stamps. Com mail letters, ship packages, all the services of the post office right on your computer. Get a 4 week trial, plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. [crowd cheering] i could get used to this. Now you can. When you lease the 2016 es 350 for 329 a month for 36 months. See your lexus dealer. Good morning everybody. Im sue herera. Here is your cnbc news update at this hour. President obama pressed vietnam to allow greater freedom for its citizens. Arguing that better human rights would improve the countrys economy, stability and regional power. He made the comments in a speech in hanoi. When candidates can run for office and campaign freely and voters can choose their own leaders in free and fair elections, it makes the countries more stable because citizens know that their voices count and that peaceful change is possible. And it brings new people into the system. Iraq releasing footage allegedly showing military air strikes targeting isis strongholds in fallujah. It said the strikes were carried out on monday destroying fuel tankers and killing a number of isis militants. A senior egyptian official telling the Associated Press<\/a> that human remains recovered from the crash site of egyptair flight 804 have burns on them suggesting an explosion may have brought down the plane. All 66 people onboard that flight were killed. India successfully testing its firstever indigenous Space Shuttle<\/a> on monday launching a Reusable Technology<\/a> demonstrator. It descended to a defined landing spot and the mission took less than 15 minutes. And thats the cnbc news update this hour. Carl, back to you. All right, sue, thank you very much. Facebook making changes to its trending topics after pushback from those lawmakers this despite saying they found no evidence of political bias against conservative topics in an internal investigation. Joining us this morning, rob met with Mark Zuckerberg<\/a> last week, the editor and chief of daily signal, Vice President<\/a> of publishing at the heritage foundation. Rob, good to have you. Good morning. Thank you. They say they found nothing systemic, do you believe them . I do believe that the investigation probably didnt find anything systemic. I think that they also acknowledge that there could have been individual actors who perhaps had their own individual biases that may have excluded some conservative news, so the steps theyre taking seem to be prudent and well received on the part of conservatives. Walk me through an example where at least you believe some of your own content was manipulated, ill say. Well, i dont have a specific example with regard to the daily signal, but among the examples that facebook itself included in a letter to senator thune was cpac, has been critical of facebook and did not attend last weeks meeting because he believes facebook hasnt been sincere in coming forward. Cpac did not show up for instance on the first day of the conference this year and facebook said well the reason that cpac did not show up wasnt a case of bias. It was simply a case of other republican candidates being in the news because it followed super tuesday. So facebook seems to have a reason or rationale every time somebody comes forward with a case of bias. And i think, you know, we just have to keep pressing for transparency on the part of conservatives because thats ultimately what were hoping facebook will do out of this situation. Rob, can you give us a little more color on what that meeting was like with Mark Zuckerberg<\/a> inside last week, how the company portrayed itself . It seemed like the reaction from various personalities has been somewhat mixed. Definitely a mixed reaction. Conservatives walked out of the meeting, i think, some of us hopeful that this would be the start of a more productive relationship where facebook would be more transparent about how it operates. Obviously a lot of the conservative publishers just like cnbc rely on facebook to distribute news and information. And when we see unusual patterns of engagement or traffic, it causes some concern and raises questions about whether facebook is being fair. Zuckerberg was very personable, he was very much listening too, i think the questions and concerns that were raised, and i think the result of this investigation is facebook is now going to do away with some of the lists that were dominated by some more liberal leaning news sites and as a result hopefully well get a more accurate representation of the trending topics Going Forward<\/a>. I wanted to pick up that point, rob, with abandoning the benchmarking to those sites which obviously you regard as liberal, i think a lot of people would debate whether theyre liberal or not. What does that mean moving forward for the industry as a whole if that type of judgment is being made now by facebook, or at least that theyre letting them go to kind of float on their own. Yes, we, so this was actually a point i raised in the meeting specifically because i felt even some of the people who were represented in the meeting their websites werent included on those lists that facebook was looking at. What facebook told me in response was that they wanted to move into a situation where it was an algorithm or a computer, more Artificial Intelligence<\/a> determining what those topics would be. So you could eliminate Human Interaction<\/a> and eliminate the potential for any person to have a biased point of view and exclude topics. So hopefully what it means is that will be moving to a more algorithmic process in which facebook determines these things and it will take the factor of human error or human judgment out of the equation. Finally, rob, i wonder if you think this empowers conservati e conservatives or liberals, anyone who creates political content to target various platforms, go for change, and if so which platforms do you think might be in the crosshairs . Well, it certainly does. I think the fact facebook has responded to aggressively both calling the meeting last week and then quickly wrapping up this investigation and getting back to the republican chairman in the Commerce Committee<\/a> demonstrates they do take it seriously. And youre going to probably see the same pressure applied to places like google and twitter if conservatives feel the content there is being suppressed as they did in the case of facebook. Lets keep in mind this was not just an isolated incident with facebook. The gizmoto story which made these allegations was kind of the end of the road and facebook long had been foreseen as a liberal organization by conservatives who had pages banned or changes in the news feed they didnt like and this all brought it to a head. Its been remarkable to watch the response. Well see what happens other places. Rob, thank you so much. Rob bluey joining us from the heritage foundation. An important lawsuit wrapping up in the Silicon Valley<\/a> between google and oracle over the future of open source software. Were outside the courthouse in San Francisco<\/a> where jury deliberations have just begun. Diedre, what essentially is the argument here . Well, right behind me guys the argument its going to be a massive argument and decision for the tech industry, but in the courthouse right behind me the jury is just beginning their day. Theyve heard from oracle, theyve heard from larry page. And theyve heard the closing arguments in this case that began nearly six years ago. Now, at stake is 9 billion payday for oracle, a sizable chunk of googles cash hoard and no less than the future of programming. The jury will now have to decide if google violated oracles copyright when it used java programming to create android, now the most popular operating software in the world. Or as google claims if that was fair use of that code. Earlier today in amsterdam eric schmidt chimed in on the case to cnbc. Were part of the open source movement, so i think it really hurts oracle because they own java and nthey need to promote t into this new world and it just doesnt make sense to me that theyre in that path. What about the startups whove tried to make their products compliant . Arent we opening a whole host of potential losses there . There is now an open source version of all of this which they can use and i recommend that. Now, a Huge Community<\/a> of developers and companies rely on and thrive on open source, that is the software at the center of this case. And unlike google they may not have the means or the money to defend themselves against costly future copyright lawsuits if the jury decides in favor of oracle. So, guys, this is a massive decision, a very big deal for the tech industry. And its no wonder that the courtroom has been absolutely packed. Yesterday during closing arguments it was overflowing into another courtroom. And the atmosphere is certainly tense as the jury gets in and starts to deliberate any minute now. Back over to you. All right, well see what happens. Thanks for setting it up for us. Up next, ceo of gopro nick woodman, we watch a 200 pount rally in the dow, oil and stocks all rising together. Well be right back. The first stock index was created over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. If the Federal Reserve<\/a> raises Interest Rates<\/a> in june, can stocks shrug it off . Thats what history says. According to one technician, hell make that case at tradingnation. Cnbc. Com. More squawk on the street coming up. I asked my dentist if an electric toothbrush was going to clean better than a manual. He said sure. But dont get just any one. Get one inspired by dentists, with a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean oralb. Know youre getting a superior clean. Im never going back to a manual brush. Welcome back to squawk on the street. The dow up 211 points. The s p up 25 here. Tech and financials trading up more than 1. 5 as you can see theyre leading all s p 500 sectors higher on the day. Among the names powering the gains for the Technology Side<\/a> of the equation youve got Western Digital<\/a>, also applied materials, Electronic Arts<\/a> and adobe as well, over the course of the past 12 months the tech sector is down though more than 1 . Its trying, carl, to get back into positive territory. Well see if it can make that push in the next day or two, back to you. Dom, thank you very much. Were watching shares of monsanto as well. Theyre higher after reuters now has a flash says the company will reject that 62 billion buy outbid from germanys bayer. Report says monsanto will seek a higher offer, something that david faber said to expect in the days ahead. Shares of gopro are one to watch today. The Company Announcing<\/a> a new partnership with red bull this morning. For more lets get to our own Kayla Tausche<\/a> live at j. P. Morgans tmt conference in boston where shes joined exclusively by gopros nick woodman. Hey, kayla. Hey, carl, and thanks so much. We are joined by nick woodman, whos the ceo and founder of gopro this morning. Nick, shares are up on the red bull news. Its about four years since felix baurm, why did you decide to go back and partner with red bull again . Weve been working with red bull for years, and weve helped copromote each other and help each other globally rise above the noise and scale awareness for our respective brands. But we decided it was time to get official about it and officially partner because once were official partners theres just so much more we can do and take everything weve learned over the past few years and do it on a much larger scale. Officially you guys will become the point of view for every big red bull event, i believe there are 1800 events, but officially red bull gets gopro equity. How much do they get . Is it material . Its less than 1 , but it is material in the sense that it better alliances us as partners and a terrific validation of red bulls belief in our business and what they think the opportunity is to help gopro grow globally. When you think of the scale of red bull, with over 1,800 events and over 100 countries annually, over 500 sponsored tleets and celebrities, you think about all the opportunities to integrate gopro technology, whether its offtheshelf cameras or hero cast, our live broadcast solution, omni or odyssey, our Virtual Reality<\/a> capture solutions and then in the future karma, our drone aerial solution, all of that is going to be integrated into everything that red bull does. So the world of red bull is going to be brought to you by gopro in a whole new way and it should be terrific promotion for gopro. Whats the latest on karma, which you just mentioned . Because as recently as earnings week you thought it was still set for this half of the year. Where are we now . Were going to be ready in time for the holidays. Karma is an incredible product. And it has as weve said its more than a drone. It has a lot of differentiation. It has incredible features that we think are going to be very appealing to consumers, but we needed just a little bit of time to tune them and get them just right. In the end we determined that that combined with the Holiday Season<\/a> being such a terrific time to introduce new product we just made the difficult but strategic call to shift then. Youre also going to be releasing the hero 5 around the same time or at least in time for the holidays. Will the drone be a replacement or a supplement for the camera . Do you worry that customers will buy one or the other . What i can say is that they complement each other very well. And, youre right, for the Holiday Season<\/a> and for the back half of the year we have an incredible amount of new product. Gopro is were very excited about what we have slated for the second half of the year. Its going to be the first time that our whole vision for the Consumer Experience<\/a> from capture through accessing your content and having very easy editing tools to create and share stories in a very convenient manner. Its the first time the gopro experience will be pulled together for the consumer from start to finish. I know you bought two apps earlier this year to sort of help the user figure out how to edit, how to slice up the content theyre creating on a gopro. Is there evidence that your market share is increasing because of that . Your community is growing because of that . Whats the result . Theres very tangible evidence that our community is growing between quick, our automated editing ap, and splice, our manual advanced editing app combined they have approximately 500,000 downloads a week now. And those are existing gopro customers, but we think the majority of those are people that dont yet own a gopro but are now using their smartphones to create interesting product. Which is a great way to prove gopro to users around the world and eventually upsell them on hardware products as well. Do you worry the smartphone would become waterproof before the gopro gets wifi enabled or smarter itself . I think that netnet the more people use their smartphones to capture and share compelling content that actually increases our overall the more the general consumer becomes a story teller whether its with smartphone or another camera, the more the mass market becomes interested in capturing, sharing content. And we believe that we have one of the best solutions for that. We see gopro as a content enabling company. So get out and use your smartphones to share stories and then try quick or splice, our app, to share those stories. And then eventually we think we can get you to try a gopro camera. You were telling us i think it was last year that you have stacks of sd cards in your own home that are resemblance of the towers in game of thrones because you yourself havent been able to upload all the content youve been creating. Those towers are finally starting to come down thanks to quick. Quick and splice im going through all the content on my camera roll, on my phone, i am importing content from my gopros and im now able to in less than a minute create really great short edits that im able to share. The new dawn is here. To get some of that inventory out of retail channels before the holidays, ive seen heavy promotions in a lot of stores, even airport kiosks, and a lot of advertising spent too which youve been vocal about. When do you take your foot off the marketing and promotional gas . Were pushing our foot a little further down because were seeing more invest. It started with our Super Bowl Ad<\/a> and now we have a terrific new commercial thats airing on television thats featuring the durability of gopro and really educating consumers on the product and not just the brand. Its working. And as we shared on our last Earnings Call<\/a> we expect to drive inventory levels, channel inventory levels down 35 , 50 , over the course of the Second Quarter<\/a> and were still in line with that. So sellthrough is great in that when you think about the fact that you need consumer demand to sell down inventory like that and that were clearing the shelves for terrific new product the second half of the year, combined with our expanded marketing thats working, we feel optimistic. We were talking before this interview started about your time at gopro, about some of the competition thats come up. And you said you loved the days when you get to work on product. Would you ever just return working on product . I think i see myself as gopros chief story teller both internally to motivate our employees on a single shared vision, and then also share that vision with the outside world, with you, and help everybody understand what it is that were building at gopro. I spend part of my time doing that, and then i get back into the workshop and work with our engineers spend half of thetime that, and then back into the workshop to build that future with the designers and product engineers. It is a terrific balance. How much of a stock prices you are trying to build the future and executing at the same time and seeing what the stock has done. It is more of the motivator than anybody, and lez from the financial sper pecktive and more fr from, i think that the stock price is relative in the peoples understanding off what go pro is and what we are building and how relevant it is, and how relevant gopro is, and in that sense, we are highly motivated to communicate the vision of go ppro and then goin to realize it to make it real. Humbling to see the stuck at 9 . Absolutely. Absolutely, but in a positive motivational way. It is a reflection of how the world sees gopro in terms of the Business Investment<\/a> opportunity, and we have to work hard to change peoples regard for that, and when we do that through execution. You have given investors a lot to look forward to in the second half of the year. Than you, nick woodman, the ceo and founder of gopro. Back to you. Thank you, kayla. And here, the market is bursting back into life after yesterdays low volume, and low trading range really and up 205 points on the dow, and overall, Home Builders<\/a> and tech and health care is leading the market higher, and more after the break. The dow is up 199 points, and we go over to the Rick Santelli<\/a> in chicago for the exchange. Thanks, simon. Id like to welcome in my guest who is our productivity gentleman in chicago. And all right, tim, since it is all about productivity the minutes last wednesday changed the complexion of the yield market markets and the equities and how is Monetary Policy<\/a> going to affect productivity if at all . Well, if your money is diminishing in value, you have to put more money to work in order to produce the same return. So unless you can change the cap, and labor and ship the jobs offshore, the productivity is go going to the decline, and this is what we have been seeing. Funny to mention that, so putting the jobs back or tariffs is going to be productive in many way, and many people who think that they want it to occur like to shop at places that have everyday low prices, and you cant have both, can you, tim . No, you cannot. And so thinking back to this to the fed poll p it ipolicy, and measures inflation with the core personal expenditures and the stuff that we buy. How is the stuff that we buy rising in price . And we measure gdp and 70 of the gdp is pce and how can we measure the rising prices as growth . That is the problem. So it is like a carroll novel alice n win wonderful if you shrinbing the ruler and alice, and everything she measures is skewed, isnt it . Yes,ed a feed it into the equity market, if your money is di mirning over time, because we have a debtbased monetary system, what happens to the equity market . Well, the time frames of the investors have to have shrink, and so we go from long term opportunities to arbitraging estimates and expectation, and you are seeing it every wri and the Public Companies<\/a> have to shift from deploying the capital long term, and buying back shares long term. And Financial Engineering<\/a> is tunnel visioned as well, and goit a chuckle today. Mr. Shinzo abe writes a oped that japan revising global prosperity, and his programs are doing more to kill global prosperity and the heart is not in the right place, but negative rates will help prosperity and productivity . Yes, the rising prices and debt are the enemies of prosperity, so if you are devaluing the monetary value, debts will rise and prices will increase, and that is the policy. I wish we had more time, but sarah never enough time and back to you. Thank you, and we will look at the gains with squawk alley coming up next. But there is one car that can conquer them all. The mercedesbenz cclass. Five driving modes let you customize the steering, shift points, and suspension to fit the mood youre in. And the road youre on. The 2016 cclass. Lease the c300 for 359 a month at your local mercedesbenz dealer. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i looked at my options. Then i got a Medicare Supplement<\/a> insurance plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. The rest is up to you. Call now and find out about an aarp Medicare Supplement<\/a> insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement<\/a> insurance plans, it helps pick up some of what medicare doesnt pay. And could save you in outofpocket medical costs. To me, relationships matter. Ive been with my doctor for 12 years. Now i know ill be able to stick with him. [ male announcer ] with these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. So dont wait. Call now and request this free decision guide to help you better understand medicare. And which aarp Medicare Supplement<\/a> plan might be best for you. Theres a wide range to choose from. We love to travel and theres so much more to see. So we found a plan that can travel with us. Anywhere in the country. [ male announcer ] join the millions of people who have already enrolled in the only Medicare Supplement<\/a> insurance plans endorsed by aarp, an Organization Serving<\/a> the needs of people 50 and over for generations. Remember, all Medicare Supplement<\/a> insurance plans help cover what medicare doesnt pay. And could save you in outofpocket medical costs. Call now to request your free decision guide. And learn more about the kinds of plans that will be here for you now and down the road. I have a lifetime of experience. So i know how important that is. Good morning, it 8 00 a. M. At snap chat and 11 00 a. M. In new york, and squawk alley. Good tuesday morning. Kayla tausche is live at jpmorgans Live Conference<\/a> in boston, and","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia800306.us.archive.org\/4\/items\/CNBC_20160524_130000_Squawk_on_the_Street\/CNBC_20160524_130000_Squawk_on_the_Street.thumbs\/CNBC_20160524_130000_Squawk_on_the_Street_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240625T12:35:10+00:00"}