let's get back to our guest host, barry, for the last word. one of the issues we're talking about is washington, and whether what's happening in washington, the dysfunction actually matters anymore. you look at the economy and it looks like the market is taking off. maybe a new sense that the ceo world is figuring out, i'm going to figure it out on my own. >> the hardest thing is that politics and business intersecting doesn't work.

they do things for noneconomic reasons. somebody said in europe, they don't care about -- they're going to keep europe together. the u.s., i think entitlement reform is serious. i think they have a couple weeks to work this out. >> barry, thank you so much. it's been a pleasure talking to you today. >> thank you. >> that does it for us today. make sure you join us tomorrow. right now it's time for "squawk on the street." good morning. welcome to "squawk on the street." i'm melissa lee, along with carl quintanilla, jim cramer and david faber at the new york stock exchange. the new home price reports were just released. s&p's david blitzer will join us to break these numbers down moments from now. let's get a check on futures. and how we are setting up, this after the s&p ended its

eight-day rally. it managed to hold above the 1,500 mark in yesterday's session. the dow looking to lose about nine. confidence numbers are on tap at 10:00. italian field auction, selling bills at the lowest yields since march 2010. we have mostly red arrows across the board in europe. asia, big day for shanghai which officially enters bull market territory. road map here starts with apple. the pressure mounts for the company to launch a new omg product. app announces that its fourth generation ipad is on its way with 128 gigs, with a starting price of $799. >> surge revenue topping expectations. honeymoon continues for mersa myer. we look ahead to amazon tonight. >> the f series pickups in north

america, the losses will be deeper in europe this year. the conference is getting under way as we speak. apple announcing 128 gigabyte version of the fourth-generation ipad. the company says the tablet will have twice the storage capacity of the 64 gig models to hold more content including photos, books, and tv shows. the new version will be available starting a week from today. the wi-fi model pricing at $799. the wi-fi-plus model also. >> new product. >> yeah. >> evolutionary product. that speaks volumes. >> this is the only thing they've got? >> look, i think it's great. they have a new product. ge probably has some new products. i think that phillips got out of

the new products today. that's not what i'm looking for. i'm looking for new dividends, new buybacks, acquisitions. i'm looking for something that is not incremental. maybe you want to go get a new one, i don't know. >> a lot of people wondering why you would need 128 gigs. >> a lot of memory, wow. >> they point out there are a lot of companies that use it for autocad, if you're doing x-rays, where you're going to need a lot of industrial usage. and that means storage. >> anything that makes the desktop less relevant is big. incrementally. it's an incremental positive. and a stock that doesn't need an incremental positive. it's always to big incremental positives. if you look at the company today, they say, had is fabulous, this is what matters. >> it's going to help people win

football games is what it says here. did you see down to this bottom line? it's winning football games. ipad running our game plan solution unquestionably helps players to be as prepared as possible. >> i changed my mind. i'm going to tell you, 495, 500, didn't expect to see that in the press release, that it would be a big tool for football players. >> you don't see those thick notebooks on the sidelines anymore. >> no, you don't. >> same in airplane cockpits. no more thick manuals. >> is this a dollar enks per share? >> this will take film study of football to a new level. >> they could order maybe 300 of these. >> they could. >> maybe 350. >> that will really move the needle on apple. >> look, here's the -- the stock for 650, going to 680. people would say, this is the breakout. this is going to cause the 200-day.

>> golding cross. >> this is nothing, henry bird. in flames over new jersey. this is the golden cross. how dare you get in the way of apple going to 705. >> average price target, by the way, is 617. i think i saw this morning. >> what a change. >> 740 just one month ago, if you can believe that. >> more positively, carter worth and bob were saying it's time to sell the markets overall and buy apple. because apple has made a round trip from a full year ago. it's closed that entire gap. you can buy apple at levels, if you missed the whole rally, missed everything for the past year, you buy it now. and it finds some stability. it's inexpensive. >> it sells at eight times earnings. i can make an investment case for it. it's just not what people want.

they want more than an investment. >> and it's a cash. >> they want something so exciting, they want -- how many pixels? they want this to be enough to be able to build a nuclear power plant. right? they want to press a power button and you have a nuclear power plant. >> that's not in here. >> that's a 2014 story. >> it's inexpensive. as soon as you say that, everyone says it was inexpensive all the way down. inexpensive is one thing. trading through microsoft and intel is wrong. >> yeah. speaking of things that arguably are more exciting, yahoo! shares up in the pre-market. the internet company first full quarter under marissa mayor, 32 cents for the quarter. full year revenue projection above consensus as well. amazon due out tonight after the bell. in a disclosure, cnbc and yahoo!

have a co-produce for content. many people talk about mayor's honeymoon period. and then the question, how do you preserve the core business, david, but roll out new products that are new and different? >> she is focused and could make that a point on the conference call, to display part of the business coming in. they're not viewed as often or by as many people as they were in terms of their websites, whether it be sports or finance. that's the challenge as it is for so many of the other companies we talked to, whether it be google and facebook. google in contrast has revenues up over, what, 20%. this company did have a positive revenue number, up 2%, i believe it was. but it does put it in some perspective. nonetheless, she probably gets a quarter or two more, as some would say, as a result of at least showing things aren't getting worse. >> i liked this call. a lot of people who have dealt with yahoo! over the years are

used to incredible turnover. say, oh, it's a different person, it's a different person. who's doing finance, who's doing sports, who's doing news. it's always different. this is about attracting the right people. google is the new golden. when you get out of school, you're trying to get a job at google and you can't. because there's 50 million people who want to. yahoo! make you want to work there. i liked this call, there was energy, it's no longer, it's as bad as it used to be. they didn't mind paying the taxes. they are buying back stock. what a good call. >> all true. it's an interesting point you make, one that we perhaps don't focus enough on, in creating enthusiasm amongst your own employee base in order to attract talent, in order to keep talent. she seems to be having success at doing that. >> she has charisma. >> it is about free cafeteria

food and issuing iphones to employees. >> it's important when it's a turn-around story and there has to be one or two more quarters for the results to be seen. that's a great point you made, because these are needed expectations, the fact that they beat, and they show the business lines weren't doing much worse. but revenues were better than consensus. it was a stability quarter. they bought back a lot of stock, because it's extremely investment friendly. >> a number of directors on the board will be focused on that. dan loeb is still in there. probably will be for some time. and has done very well with it. that helps also. he was key in terms of at least the appointment of mayer to the job. >> but look, there's so many things that could go right here. and one of the things she makes the point of is, 200 million. she keeps talking about the 200 million users. people never left yahoo!. you could say they're hibernating in it.

but i felt after this call, momentum is coming. and i want to stay at yahoo! if i'm working at yahoo!. my resume is finally out. and they want to bring out the best people. good people on the board. >> and that's about the core business. many investors still looking at some of the parts. what's the valuation going to be. when it comes to yahoo! japan, that has gone up sharply. but the yen has fallen sharply, so that may wash out and not be a loss. but there are significant sums from both of those investments that have yet to be potentially realized. >> good quarter. >> the stock is up this morning. ford reporting better than expected fourth quarter earnings at 31 cents a share, boosted by the north american operations. widening its european loss estimate to $2 billion reflecting ford's weak sales outlook for the region. how did you parse this out? ford has also been on a tremendous run. >> i know.

take a look at the reverse leverage in europe. when things go bad, things go bad. you're talking about 11.4% decline, operating margin, talking about same amount of loss in ford. even though they're cutting back furiously. it was a downer handout. and it was a shame, because the u.s. is strong. latin is strong. asia is turning. but europe is just horrendous. >> and there's the added pressure ofhe japanese automakers having the advantage of the weakened yen. >> toyota back on top. >> the government is going to have to speak out on this, our government. >> a lot of the lobbying groups of the automakers, we had former missouri governor roy blunt on fast last night and he's the head of one of these lobbying groups saying, president obama, you've got to do something. they cannot keep weakening the currency. it's basically providing a subsidy for the japanese agencies. >> europe will do something. they're protectionists. >> all that said, highest

pre-tax income for the company in ten years. more suvs, the big fat margin products selling here in the states. >> carl, you're right. don't want to lose sight of the fact they're hiring in the u.s. business is strong in the u.s. they're cutting back for europe rather dramatically. there will come a moment where there will be a positive leverage in europe. >> dow jones pointed out -- no, up 46,000 hourly employees of profit sharing. 8 grand each. >> nice stimulus. >> always worth pointing out this was one of the automakers that did not file for bankruptcy. >> $5 a day, remember that? henry ford's wage plan? >> do you think the stock is trading lower on the back of the wider european losses, some of the weakness in europe? or do you think it's the fact that earlier this month it hit the highest levels since may of 2011? maybe now it's taking profits? >> i thought they would lower the loss of 2013 in europe.

i thought that for sure they were a little further ahead than they are. i don't know what it means for gm. i want to see, because gm is supposed to be behind ford in turning europe into a loss. i was disappointed. i guess i didn't see it coming. i thought that ford could break it down. >> when we come back, the winners and losers in this morning's s&p case, schiller, home price report. also ahead, agrium strikes back. a live interview with ceo michael wilson later in the show. a day when 25 s&p companies are reporting, with amazon, of course, the head of the ticket tonight. lot more "squawk on the street" back in a minute.

let's get baek to the key housing data out this morning. schiller reports showing u.s. home prices continue to rise through november of last year. the ten-city composite up 5.4%. here on cnbc, david blitzer, chairman of the s&p 500 index committee, who's going to help ring the bell today, for a different reason. 20 years on the spider. >> 20 years in the spider. it shows what a good index and great etf can do. far and away one of the largest funds anywhere in the world. >> in terms of the home prices,

not bad for the dead of winter. you make the point even though winter's not a seasonally strong time for sales, prices okay. >> that's right. if one looks at the seasonally adjusted figures or 12-month figures, home prices continue to appreciate even though november is clearly into the winter months. so there's a lot of momentum. it shows up in all the housing statistics, not just the prices. and as far as i can see is going to carry well into the new year. it's not going away. >> because shiller writes this piece over the weekend, which i'm sure you saw coming, saying he is a little more agnostic on using the data to predict what the rest of the year will look like. you seem a little more bullish than that. >> i think so. we had an interesting discussion yesterday. trip and myself. trip is always an optimist. bob is certainly not a great optimist. if you think we're going back to 2005 and everything goes up 25%, 30% a year, think again.

if you think you're going to see those kind of peaks from some of those cities anytime in the next 10, 20 years, think again. but if you think housing will do its bit for the economy, we'll appreciate a little bit better inflation in the loaning run. that's where we are and that should be good. >> yesterday we saw the ten-year yield cross 2% for the first time since april. will rising mortgage rates help people get off the sidelines in your view? >> i think a little bit. but looking back over a long time, consumers taking down mortgages are much sharper than the bank. when rates are rising, or about to peak, they always go to the variable rate loans because they can average down. and, you know, and when they shook take the fixed rate loans, they always seem to do that. the bankers get a run. >> david, yesterday, the senate's talking about immigration reform. maybe 11 million people who are undocumented go documented. we know that in 2005, 2006, there were a lot of people who did not have documents who were buying homes.

could that be a long-term tailwind if we get long-term immigration in this country? >> some of those people might be living someplace in the united states right now. but if they all go out and buy houses in the next ten years, if you add 1 million people a year, that's a lot of houses. >> i want to come back to, are we approaching what would have been a more normalized housing market than the one we saw prior to the incredible bubble of the early 2000s, where hpa was up 3% a year for decades? >> i think we're getting back to it. but we're not there yet. you know, housing starts almost got to 1 million in december. and nobody builds a house in december anyhow. so that doesn't count. you have to get over 1 million to have a housing market. you still have a couple of cities where homes cost the same thing they did 12, 13 years ago. so we're not that -- we're not there yet, but we're definitely

headed in that direction. >> finally, new york, the only se seasonally adjusted that's negative. what's going on? >> i think there are a couple of things. they both go back to financial services. financial services is a big part of the new york metro economy. it's not as big a part as some people would like to have it. on the other hand, he's got a strange seasonal. a lot of people wait to get their bonuses to buy a house. so if you want to see home prices go up, you know, hope for big bonuses in new york this year. >> mega homes. >> yes. >> david, thanks so much. see you on the opening. >> thank you. >> should you find a home in yourfolioportfolio? betting on social media, we'll talk with one of the first investors in facebook. the stock off to a flying start this year. let's take a look at futures as we ended our eight-day winning streak on the s&p 500.

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now this...will work. [ male announcer ] just like you, business pro. just like you. go national. go like a pro. it may be super bowl week, but this is not the 40-yard dash, it's the "mad dash." jim, what's going on here? >> you have to get on the conference call to see why a stock is down so much. there's this gut punch. they give their talk and

everybody says, okay, and the first question is, like, and then all the management does is, oh, um, and it says in the transcript it says, um, um, um. it's like, wow. this was a guy down in the first half that took your breath away. it was literally one of these stocks where it was flying coming into the quarter. it was so discouraging, that the analysts were boxed in. and they had to downgrade. there's even a question now about whether the cloud is still growing. now, i think there's an overreaction. >> does this make sense to you? >> i think it's an overreaction. this has been the growth big data play, the gross cloud play. you're going to see every cloud play trade down off this. and i wonder whether they weren't being too conservative. but i was listening and said, oh, my, oh, my, here goes emc, here goes the complex, here goes

the sales force. boom. >> implications for amazon tonight? or no? >> one could do that. one could argue that amazon's a great cloud play. but it's a good retailer that can show big gross margins. i would say it's exempt from this. emc reported the quarter but owned a big chunk of vmware. and some were saying, maybe there's a problem with virtualization. red hat will be down. this was a bad quarter, carl. and i just was like -- i didn't think they needed to do it. they said the second half would be strong. if you listen to the conference call, you say, i understand. but it is an overreaction. >> one of the big talkers on the street today, no doubt about that. >> it's going to go down, as it seagate, where they missed. they didn't really miss as much as they got it down. but the seagate quarter is another one where people were

saying, what are you talking about there? the managements are reflexively reactive. >> more on that in a minute. only one day to go before r.i.m.'s blackberry 10 launch. is it a sign to ride the rim rally or a sell signal. coverage beginning at 9:00 eastern time. the opening bell is coming up next. ♪

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luckily, he found someone who gave him a fresh perspective on his portfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense. from td ameritrade. live from the financial capital of the the opening bell on a suds set to ring in about one minute's time. so many earnings. super bowl of earnings, pfizer out today. it was a beat. that's going to be an important one to the market to watch. >> key to the market. viagra is still making a lot of money. it was not as bad as i thought. that's big pharma for you. >> right. >> big pharma is, not so

horrible. little pharma is cold. when i look at pfizer, i look at, it's okay. >> it's got 3.6% yields. >> here we go. the opening bell set to ring. take a look at the cnbc realtime at the top of the big board. [ bell ringing ] >> trust was the first product of this type. how revolutionary was that. credit suisse celebrating the launch of the etm. changed the way we invest. >> 1984, value line, created the first index. people didn't think it could amount to anything. three months later, s&p came up with their future. rest is history. '87 crash caused by the futures overwhelming the economy.

amazing time. >> wow. >> i was working in '87. not that long ago. >> and then '38 the munich agreement. >> apple announcing it will come out with the next generation -- fourth generation specifically ipad, with 128 gigs of memory. lots of memory there. >> 128 gigs? >> yeah. >> that's called mock surprise. you know mock apple pie with graham crackers? >> no, i never heard of that. >> tang and mock apple pie. >> we drank tang growing up. >> we've had this conversation about leg up, or leg down for the past few days. >> right.

>> new statistics on short interest for the first two weeks of the year. 3.7, the lowest in a long time. bears want to roll over. bulls want a leg higher. what are we going to get? >> how about if the fed says things are better. now, yesterday pbob pisani said something great. we want something fueled by the actual economics. we don't want that. there's co-horts who want to have it fueled by cheap money. >> i think if we do get a serious backup in rates, that will have consequences of great significance, not just in the bond market, but conceivably for the stock market. but you have to start to think about it. >> what percentage are people going to be hurt in bond funds. >> a large percentage. it's going to be ugly especially if you're in longer term. they don't understand how much capital they have at risk as a

result of a drop in price. every one of the last three years, we're wondering when we're going to start to see the ten-year yield soar, by being short the long, and it never really was the trade. here we are again having that same discussion. >> but now you're getting a mortgage, oh, my, 2.75%. that's like, you know, when guys came back on the gi bill. the gi bill, that was something over, too. >> thank you. >> i got a very nice ten-year rate. that's good. >> i was very proud of myself. >> you should be. >> one of my resolutions 2013, lock in the outrageous rates. i used to hear my father talk about, our house -- >> now you've got to do nine other mortgages for the nine other properties, right? >> he's leaving. >> ray lahood is leaving as

transportation secretary. >> didn't he say he was sticking around? >> i didn't hear that. >> i thought he was sticking around. >> we've had, obviously, several cabinet members decide to leave. obviously solis -- >> this guy is an activist guy, did you ever talk to him like on morning joe? he's a serious, rigorous guy. i thought he did a great job. >> leaving at an awkward time where the agency is under fire. dreamliner is nowhere near from being resolved as far as we can tell. of course, that's last year's happenings. ray lahood leaving. >> not exactly oh borderline guy. >> research in motion, the day before the big blackberry 10 launch, it is down by 1.9%. has been down as much as 3% earlier on. carl will be at the launch tomorrow, along with our own john ford. this will be potentially make or break to the run-up that the shares have seen in the past

month. a question a lot of investors will face tomorrow when this thing is launched tomorrow at 10:00 a.m. >> carl, this to me, line in the sand. this product works. stock keeps going. this is actually one of the rare times where i've seen that a product will determine the stock. >> people say that a lot. but do you think it actually might be true? >> they need to stem the erosion from apple. which i think is getting bigger in the enterprise. i think that's something we don't credit apple enough. >> in the "wall street journal," questioning whether any enterprises who dropped the blackberry will put it back on their platform. buy your own device because of the software advances that have been made in terms of security. whether they could ever hope to reclaim any of the share that's been lost is a key question as they battle it out in the consumer market where they had less than 5% of the market share. >> can they keep what they have. >> if they can just manage to convince people to upgrade, that could be enough units sold for

this year. we'll have to see if it's going to be enough. tomorrow they launch the upgrade. amazon trading lower ahead of its earnings report tonight, down 1.25%. piper jaffray came out yesterday saying that the past five quarters, they have guided below expectations by an average of 4%. so they're known for taking down expectations, particularly in the quarter -- when they took a look at march guidance specifically, it was usually 3% to 6% below street expectations. that's sort of what we're expecting tonight, to guide lower. >> that's that vacuum, after amazon reports, where everybody who just trades headlines freaks out. it's been a common pattern. i typically suggested people come in long call, cover the common against the call as it comes down. and then you have something to say for it. >> before we get to pisani on the floor, let's check in with phil lebeau and talk about lahood leaving the department of transportation.

what does it mean? >> i don't think it will mean a huge change in terms of the media question when it comes to the transportation department and faa which is the investigation into the boeing 787 dreamliner. ray lahood has taken a zero tolerance approach in terms of letting the dreamliner get back in the air. there was a lot of questions when they initially came out and they said, listen, this is a safe airplane. i would fly it, within a week he had to come back and say, per the guidance of the faa, we're going to ground this plane. and some people have said, listen, if he leaves the administration, does that mean there's going to be a change in tone, or a change in the investigation. i don't think so. i think the tone has already been set, that they want to be 100% sure they have figured out exactly what went wrong with the dreamliners relative to the battery and other components involved, and the two fires. and once they have that figured out, then you look for them to perhaps lift the grounding by the faa. initially, i don't think we're going to see a change with regard to the dreamliner

investigation. >> all right. phil, thanks for that. we'll keep an eye on that story all week long. phil lebeau in chicago. let's go to bob pisani to see what's moving on the floor at the new york stock exchange. >> this morning i watched the board. looked at 15 companies' earnings, revenues. only one was light on revenues today. last quarter, almost every day, the majority of companies were light on the top line. this quarter it's not happening. i was able to confirm this here. we've got 35% of the s&p 500 reporting. 65% are beating on the revenue side. beating the estimates. last quarter, only 35% beat. so there was a huge disappointment as the companies weren't doing it. the numbers are still pretty modest. right now revenues up 3.8%. but that's better than it has been. e are up 4.7%. that's going to go up. that will definitely be in the 6%, maybe 7% increase on the earnings. i think the revenues could go toward 5% as well. i'm not claiming it's fabulous,

but it's definitely an improvement and bottom in the earnings. jim, you were talking about horton, the numbers keep getting better. housing keeps getting better. they knocked the cover off the ball. orders up 39%. this is not an outlier. did you see the other numbers? lennar open 22%, toll brothers orders up 36%. they're all up 30% so far this quarter. those are spectacular numbers. we were up 20%, 25% in prior quarters. this is getting even better. look what else here, average selling price, up 15%. that's incredible. i'm the son of a home builder, you get an average increase of 15%, that's amazing. done horton, the ceo can barely contain his glee. he's a pretty conservative guy. this is the best position we've been in in our 35-year history, this is what he's saying. we look forward to the spring selling season with optimism. i don't think i've heard him say

that in a long time. cautiously optimism, maybe, but not optimism. the fed meeting coming up. i have to say there's a little bit of nervousness over this, nervousness about implying somehow the fed stimulus would in some way lessen a little bit as the economy improves. obviously, i'll take an improving economy over fed stimulus. but some people are nervous about that. i'm definitely detecting that. let's talk about the spider. today is the 20th anniversary of that spider. not only was it the first etf, it is far and away the most successful etf in history. they have almost 10% of all the assets of etf in one single exchange. we'll talk to the guy who runs that fund later in the day with maria. >> that was great, bob. these home builders are terrific. let's head to chicago. rick? >> good morning, jim. as bob pointed out, the first of the two-day fed meeting, and

even though basically the federal reserve is buying in the secondary market, boatload of treasuries. of course, we still look at the market and try to draw conclusions outside of the management of interest rates. two-day charts really go a long way in this regard. if you look at a five-year, two-day, you could clearly see that the big area to pay attention to is going to be 90 basis points. and if you see 90, most likely, 1% is going to be the key. with a ten-year, all about 2%. two-day chart clearly shows we briefly, really briefly touched above it yesterday. that's the magic area. and when you consider stops and all the anxiety of being long treasuries, you're probably looking, if you breach 2%, going to around 2.07, 2.10. the areas many of the fixed income traders are paying attention to. i don't often talk about the swiss franc, but go back to

september of 2011, that is when the swiss tried to peg their xurns si to 120 level. all the flight to safety was strengthening their currency. look at this chart, they seem to have been somewhat successful. this is the euro versus the swiss. there's been a major appreciation of the euro. it's basically at 20-month highs. what's fascinateding is, now look at the next chart. we don't have negative yields in a swiss two-year anymore. see how the charts correlate? basically that's a barometer. funding issues have receded, swiss are getting back to normalcy. now it's all about growth and employment. and all of that information comes out at the end of the week. david faber, back to you. >> all right. thank you very much, mr. santelli. well, yesterday's shares of hess up rather sharply in part because of the company's announcement of a number of different things it's doing refining its assets. interestingly it didn't react as much as one might have

anticipated given today's move from what we learned is likely to be a move by elliott associates on the company from an activist perspective. this morning we got that move. and boy, did we ever get it. the stock itself moving up sharply. let me quickly give you some of the particulars here. you know, this name has been out there in the activist community as a potential target for quite some time. a lot of the activists that i've spoken to have backed away from it. in part, you may not have wanted to make a significant commitment of capital, in this case over $800 million by elliott, the single initial equity investment they've ever made in a company of this type. or in this situation. as well, there were always questions about john hess. he owns 10% of the company. institution has seemed to like him. people who know him speak highly of him. very well connected socially in a number of things. people saying, hey, you know what, it could be a really ugly battle. that being said, elliott has em baerked on that battle this morning saying the years and years of underperformance,

shareholders deserve better. they're coming with five directors to challenge on the board. the annual meeting typically takes place in mid-may. we assume it will be sometime in mid-march. none of those dates have been set as of yet. this is going to be a significant battle. there are the slate that -- there is the slate that elliott is proposing. on it you've got a number of directors. and as you would expect, they're fairly well heeled. harvey's out there a little these days. and the guys in the industry and have large experience on it. elliott wrote in a long letter this morning saying simply, hey, you know what, by seeking a restructure, rather than address the larger problem, jim, has the highlighting on its own to fix a 17-year history of unrelenting, underperformance. look at some of the comps. they say john hess himself

acknowledges you can't judge us on a one-year basis, you have to do it over a long term. it's been a dreadful long-term performance. it speaks for itself. they want to do a lot of different things with the company, perhaps even getting rid of the bachen. they said they've spent a lot of money without anything to show for it. >> we're always shocked. amaron had the best in the bachen. these guys want to spin off bachen, utica. all that would do is highlight how much this company is really worth. and draw a buyer. a royal dutch. even an exxon. this company, they are really, i think, putting it up for sale. this ultra cfo, smith, he is terrific. the coo that they would be adding, really amazing. these are first-rate oil gas and natural gas guys, and i think you would basically say, you know, look, we'd like them to be in.

but more important, we want totale to buy this company. >> it would be an interesting battle taking shape. exploration goals to the heart of what the critics are saying, that they've made investments that have not paid off. >> not at all. >> the right side is losses. there you have sort of -- >> we thought we could get to a much higher price here. they've got tremendous assets overseas, too. this is the most undermanaged major oil company. >> and they make money from selling the little trucks. who knew. they got that, too. >> you mean the toys. >> yes, the toys. >> hasbro has been hurting. >> maybe it's all about the little toy trucks, you never know. maybe it just comes back to that. >> i love the fact that they gave you the first day to get it. wasn't it amazing? >> i know. you had an opportunity to create 8.6%. >> we've been saying it's worth a lot more and it's getting

there. >> we'll have more on apple's 128-gigabyte ipad launching next week. agrium ceo wants to break up a fertilizer marker, why he's against such a move. twins. i didn't see them coming.

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investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. yahoo!'s earnings calls, marisa mayer made a discovery. mayer was complaining about the music played during the pre-conference call waiting time saying, we have to get better music. this is not good music. wired magazine heard her call the music garbage. in case you were wondering, here's part of the conference call music we listened to throughout the cnbc network. ♪

i don't think that's garbage. that's kind of nice, right? that brings us to this morning's squik on the tweet. what song should marisa mayer play during her conference calls. >> some of the tech companies could use a viche. >> when we come back, we promised moisturizing jeans earlier in the week. you've got to see them for yourself. but first -- coming up, there are many modes of transportation nowadays. so it's not a matter of how you get to your destination, it's that you get there in time. 6 stocks in 60 seconds when "squawk on the street" returns. ♪

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the simon knows. hey, simon. >> we're going to have to look

at exactly what marissa mayer can look at yahoo!. and we'll talk to agrium's ceo. and a conversation about facebook, pandora, fascinating stuff. >> let's get "six in sixty" with jim. let's start with mgm. >> deutsche pulls it. i think the china play. valuation has done nothing. stay long. >> u.s. steel. >> goldman sachs downgraded the group and said sell it. i think that's an overreaction. >> credit suisse ruby tuesday. >> when is ruby tuesday going to get it together. i happen to love the salad bar. phillips is like what ge's doing. they're getting out on dvds, magna voks. i like it. >> credit suisse says buy underarmour. >> the ravens are in the super bowl. this is a baltimore company. considered to be a dicey call.

i would be careful. >> finally, bolero. >> unbelievable. they replaced all the expensive crude they brought from overseas with u.s. crude. they're charging the same price with overseas crude. goes higher. >> that's unbelievable. crude at 97 today. >> these guys are making a fortune. domestic it's like 70. >> what's coming up tonight? >> wow, okay. i'm going to be a bully like scott wapner. we've got tupperware tonight. tupperware is up huge. it is not an mlm scheme. they make a product that people like with a big gross margin, overseas company. going to distinguish this company from some of the, let's say chaos surrounding it. it's a real company with real product. the queen of england happens to like their product. >> we did get use yesterday, the fortune high-tech marketing. >> wow. shut down -- greenberg mentioning it, credited to former ceo of bank of america, that his wife may have been

caught up in it. they want to shut it down. that's what ackman wants to have happen. that's a tall order. >> also, jim, we're ahead of pretty important data points. not just amazon tonight. gdp tomorrow, fed statement tomorrow. this is where it gets real. >> this is not unlike molly no-show, 100-to-1 shot, if they can get through this gaunt let, it will go much higher. remember the gauntlet? every single pop culture reference, i look at david for no reason whatsoever. he did win jeopardy. >> he did. >> i figure he knows these things. >> when we come back, breaking news on consumer confidence. don't go away. all stations come over to mission a for a final go.

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welcome back to "squawk on the street." we have january consumer confidence out, and it is much lower than expected at 58.6. we're expecting something close to 64. our last look at 65.1, which was the weakest since october --

excuse me, since august, was upgraded slightly to 66.7. 58.6 now becomes the weakest since november of 2011. and it's somewhat near the drop-off that we witnessed in the university of michigan sentiment survey. carl equipment a n carl, back to you. >> the morgan stanley consumer index is at an all-new high. all things tech. apple announcing a 128-gig version of the fourth generation ipad set to launch on february 5th, with a rather hefty price tag of $799. is that enough to turn the tide? >> plus he's on the board of director of pandora. the very first investors in facebook. he's here to talk all things social media in a cnbc exclusive interview. >> should you yahoo! the search engine beats the street. >> so unexpected, carl. wow.

>> ford motor reporting higher than expected earnings and revenue for the fourth quarter. predicting a wider loss in europe for the year. phil lebeau has more on a big story. phil, over to you. >> it is a big story, simon. but we have breaking news first out of washington. this involves transportation secretary ray lahood. he'll be stepping down as transportation secretary. he is expected to be replaced once a replacement is announced. mr. lahood has had an interesting four years, most recently saying just a few days after one of the first dreamliner incidents, hey, this plane is safe, i would fly it, and within a week coming back and saying, it's not safe. we'll keep these grounded until we figure out what's going on here. take a look at shares of boeing. could this possibly impact the 787 investigation. for what it's worth, my sense is it will not have an impact. they already made the decision they need to find the root problems and then determine the

grounding of the dreamliners. let's look at ford earnings. these were better than expected beating the street by a wide margin. ford coming in earning 31 cents per share. the street was expecting 25 pierzynski share profit. revenue better than expected coming in at $36.5 billion. the revenue was a billion and a half stronger than expected. it boosted american profits by nearly $1 billion. why? stronger pricing, better sales, and a market that's booming right now. also, the profit margins in north america, 8.4% in the fourth quarter, versus 4.5% last year. that's the good news. the bad news, and a bit of a surprise for wall street, ford projecting a greater than expected loss in europe this year. the company says it now expects to lose $2 billion in europe. it was expected to lose $1.75 billion this year. they've upped that by another $250 million. the ford cfo telling me 2013 will be the trump for losses in europe. you put all that together and you have shares that are

slightly under pressure. keep in mind a number of analysts have already said this is a fairly valued stock and any disappointment is going to be reflected that way. don't forget at 12:15, first on cnbc interview the cfo of ford. we're going to talk to him about the new forecast for europe, and this continues to be a problem, simon. when do we see an actual bottom in europe. they're saying this should be it in 2013. but the wider loss is a big disappointment. >> that's a huge problem. >> and they're bringing it down, simon, but this greater than expected loss is driven by, one, a weaker than expected market, they still don't see a bottom in terms of sales for the industry as a whole, and the euro is strengthening. combine those two and you've got huge losses. >> i'll be interested to see what they say about the weakening of the yen. that seems to be a big push on the part of the lobbying groups that represent the auto industry. >> it's a bigger deal for them. because they have, what, ten different facilities under

construction in the asian pacific region. so what's happening over there is going to have a greater impact on ford. >> thanks, phil, for the moment. thank you. >> let's take a check on shares of apple at this hour. the company announcing that come february 5th, a new ipad will hit the stores. the fourth generation model will come with a price tag of $799. it will display 128 gigs. is this going to be the omg product that will smark sales. the minor reversal we've seen, trading as high as 1.9%. now giving up a percent of those gains. but still up by about 4 bucks. >> it's similar to the microsoft surface tablet, the bigger of those, the more expensive of those, a suggestion that that would be perhaps the point at which people switching from the pc would arrive at. and therefore, it almost looks defensive, apple, that they should come in and match where microsoft is with its range. >> interesting. david, we talked about this, it

appears to be framed in more of an industrial -- >> yeah, they need to view film, presentations. this is an ipad. 128 gigs. >> that's a lot of memory. >> think of all the movies you can store on that baby, right? >> yeah. >> his eyes light up. >> study film for the next big football games. >> that's a key market. huge growing market, football. let's bring in jon for this. is this the mead dl mover? >> maybe a little bit of a needle mover. i think the most important thing is, apple is probably still the top buyer of manned flash in the world. so when they add a high-end, you know, like this that has a bunch of flash, it's really added to their margins, which i think investors would be interested in. not clear exactly what percentage of the ipad buyers go for that higher end skew. but there are some people out

there who just say, give me the nicest one you have. in this case when people say that, it's going to be good for apple's margins. interesting to see whether this take this 128 gigabyte capacity and start to move that into other products, like the iphone. we haven't seen them really expand capacity in their mobile products for quite a while. they've been stuck at 64. so 128 is interesting from that perspective. >> jon, why would you need that size of memory in a world where everything is increasingly on cloud or online? >> i think the same reason you use apps instead of doing everything through hdml 5 on the web. even though so much stuff is in the cloud, you don't always have that highest speed lte connection. you know, if you've got kids and you're on the plane, you know that scenario very well, where you want to have as much multimedia content as possible. to keep those guys from screaming. so this is good for that. as well as storing music

collections. you know, i think amazon and google, along with some others, are starting to do these streaming music services where you store your stuff in the cloud. and part of that reason for that is the mobile devices you have now from apple and some others, don't have the capacity to hold your whole music collection. if you have a lot of songs. this gets closer to being able to do that. >> jon, whenever apple launches a new product, there's always a knock that it's going to be a hit on margins for the first six months, until the product can achieve scale. is this the same sort of scenario we will see further pressure on margins because it's a launch of a new product and we won't see that scale achieved for another six or so months? >> you know, melissa, i think this is the opposite. the real reason you see that hit on apple's margins is when they redesign something and they've got to do whole new facilities, whole new tooling to get that thing going. so the first units to come off the line bear incremental cost, so much of that capital cost. in this case the design isn't

changing, they're just putting more memory in it and charging a higher price for it. this should actually benefit margins. and likewise, as they make more of the units in the designs that they've recently put out in the december quarter, at least if history is a guide, margins should improve over time as they do more volume on those units. >> after a quarter in which asps were a concern, jon, does this move in the opposite direction? >> esps actually didn't drop that much in the iphone. the ipad, they did with the mini. but with the iphone, they're actually down about three bucks. it was the capital cost that really squeezed the margins. >> jon has made his way to the east coast, because, tomorrow, can't forget to mention, we'll be live for the launch of the blackberry 10 in new york city. 9:00 eastern time. jon and i will be there for the big unveil at the top of the hour at 9:00 a.m. we've seen the battle royale between ackman and icahn.

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fertilizer giant agrium

fighting back against jana partners. jana wants five director seats on the board. it's pushing the company to separate into its retail and wholesale components. yesterday agrium challenged jana's presentation. we're joined by agrium's ceo mike wilson. i encourage your investors to go out and look at the more than 100-slide presentation you put up there. would love to get your response to jana's brief response to what you put out yesterday when barry rosenstein who runs the firm made a case that the shareholders would not benefit from the experience, and shareholder perspective that their candidates for the board would rank. they repeatedly failed to address capital allocation and disclosure until we press them to do so. your response. >> my response is, barry made a mistake when he got into this.

he ended up getting lucky and now he's trying to take credit for the luck. you know, his mistake was, he picked a company that's outperforming. his mistake is, that we've given close to 500% shareholder value since '05 and we're beating the competition on every metric and our stock's performing. his luck is, he picked a company that's doing very well. if you look at all the metrics, we're outpacing our competition. he's lucked out. his shares are up. >> interestingly, with that being the case, he's chosen to continue to press the fight to your shareholders. in fact jana has never gone all the way in terms of a proxy fight. they have a history, actually, of kind of coming to some sort of an agreement. i mean, why not a willingness on your part to entertain at least a couple of those directors, have conversations here? and again, jana would say, you didn't do a lot of the things you're not crediting the stock for going up without us actually showing up at your door. >> that's where he's trying to take the credit. if you look at it, our stock is

up because our retail dollar went up from 767 to 950 last year and we're going to $1.3 billion. barry's had nothing to do with that. our stock is up because our wholesale business is clicking and we've got a great shale gas cost position. it's not nothing to do with jana. >> how about the $990 million share repurchase they said you moved up from $530 million previously until they showed up. >> they're good. as i explained yesterday, they're very good. if you look at returning capital, we've always been clear to our shareholders, as our stable base growth to capital, we've been talking about increasing our dividend since 2011. jana wasn't there. the share buyback is directly related to an incredible acquisition we just made where we're spinning out some assets. again, they have nothing to do with it. but they're prochgs always at taking credit for these things. >> the debate continues whether retail would be, or create more value for your share holders as a separate entity, or as part of the company. obviously you believe it is

better off being part of the company. they point to comps that have changed over time, in terms of your saying, this is the peer group you should measure us by. no, now this is the peer group you should measure us by. does that have any coherence there? >> no. first of all, there are no publicly traded comps. if you look at where we're trading, we're trading -- if you look at some of the parts around nine multiple today, if you look where the south side has us between eight and nine, if you look where the distribution companies trade at, they trade at about a nine. we aspire to get this to a ten. we'll get it there. and north of a ten. we will get it up to ten. but it's worth so much more -- >> why is it worth more? >> we get huge operating synergies. the second thing is, we get to do deals like vitera.

it's across the value chain. you can't do those. no one else was approaching that vitera deal. it was a gold mine for us. we get a lot of market intelligence, a lot of depth capacity, all worth billions of dollars. >> to those who say, you know what, back in '11, you told investors what you thought were the best comps for this business. you promised to keep the investors in those comps. and you changed them when they didn't look as good for you. >> we told investors if you try to find out where our multiples should be and look at the comps in the distribution period, they're up around 9, 10. i still believe that. it's interesting, barry just suggested two directors that come from the so-called comp group he didn't support. we're going to get the multiple up above 10. we'll continue to do that. it's going to be all done on the metrics and performance of the team. he hasn't got traction on separation. he's not getting traction on that. so now he's going to the board.

>> well, he is going to the board. why not at least sort of, you know, he is your largest shareholder. why not have a conversation to figure out a way to sort of mend some of your differences here and come to a resolution. >> your question is, why not. my push back to you is, why. the company's performed incredibly. the retail business, which he seems to be attacking, is best in class. 40% higher earnings than the competition. he wants to split the company, which is valued to string. when a company's performing extremely well, the stock's done very well, the business is ahead of the competition, why would you bring someone on who wants to destroy value, split the company and is saying management is incompetent. >> he's saying some of your board members don't have the right experience and haven't shown necessarily the right judgment in terms of what they've done. he's got a couple of people who are going to do a better job. >> look at the performance. that's what a shareholder looks at. our board has overseen incredible growth in our company. >> absolutely.

at the end of the day, as you well know, you have to be compared over a longer period of time. many would say you fall short. >> i don't see where we fall short. we're 40% above our closest competitors. and every metric, be it operating costs for facility, revenue per facility, working capital, we've made huge improvements. we just announced we'll bring another $350 million in the eva dollar over the next three years. >> we'll leave it there. appreciate your time to rebutt some of those criticisms. >> thank you very much. >> you're very welcome. mike wilson, ceo of agrium. >> mary thompson has a quick market flash. >> fifth best performer among the s&p 500, up 5.7%. jcpenney is up today, because the company will be bringing back targeted discounts throughout the year. investors like that. you might recall the company's ceo doing away with the discounts, trying to make it more of a -- less dependent on

discounting. but it was a formula that worked for jcpenney in the past. investors like that he's bringing it back at least on a somewhat limited bails is. >> in the meantime, shoppers, are you keeping a close eye on your credit card charges. maybe you should be. we're going to look at the brand-new checkout fees that visa and mastercard uses. the original investors ahead of the big earnings tomorrow.

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expertise matters. find it at northern trust. have you noticed any strange surcharges on your recent visa or mastercard store receipts? be on the lookout for checkout fees. some retailers may be tacking them onto their credit card transactions. kayla tausche has more on this. >> the fees would be the result of a seven-year lawsuit under a supplement reached this summer, visa, mastercard and other credit card issuers will pay $7.2 billion and let them charge customers more for using plastic. they get reduced fees on credit

cards. a move expected to have minimal impact on issuers, but the long-term impact of the potential higher fees is also called into question. ten states don't allow retailers to upcharge for credit card transactions, and that includes california and new york, and in total responsible for roughly 50% of all credit spending. second large retailers will be excluded since most have at least one store in those states. small businesses also still might not do it, because of fear of losing their customer. that's according to the national federation of independent business. finally, if a small business does want to charge you more, the financial institutions will get to decide how much more that will be. if you're shopping at a smaller retailer in the 40 states that maybe do decide to do this, two ways to get around it. first, pay with amex. or pay with cash or a debit card. long term, if enough customers do change their payment method, this could be a boon for banks. analysts at goldman sachs say depending where the surchargesia

long-term boost. investors that i spoke to a tribute the weakness to bigger questions about strategy and growth now that consumer credit is improving. back over to you guys. >> kayla, just clarify, what is the position with amex? traditionally, it's charged the highest commissions to retailers. you'll find it quite hard to use amex in some countries. >> it has a strict contract with the retailers that actually provide the card. in that contract it actually forbids them from introducing a new fee on top of what they are already negotiating to use there, simon. >> wow. kayla, for the moment, thank you very much. let's find out how consumers are reacting to these new checkout fees. cnbc's courtney reagan is here live. i assume you're not in new york, because it's not applicable there. >> that's exactly right, simon. we are actually in downtown englewood, new jersey.

as kayla explained, very few retailers will likely implement these surcharges. because they exactly know how consumers will react. even the possibility, frustrated folks that we spoke to here in the affluent town of englewood, and moreover they said they would adapt if they had to, either shop somewhere else that didn't charge these fees, or pay with cash. >> so as a consumer, i have the power to take my business to a retailer who is going to charge me that, or for one who's not. and i'll choose to go to one who doesn't charge me that. >> i would try to pay with cash, definitely. >> or use a different credit card. >> probably use my debit card a lot more. >> so basically this settlement hasn't really solved much of that disagreement between the credit card companies and retailers. certainly hasn't done much for consumers. we won't likely see any major retailers implement these

surcharges for a number of reasons, that kayla laid out. small businesses may have a hard time going ahead with these surcharges. >> courtney reagan in downtown englewood, new jersey. thank you so much. r.i.m.'s big blackberry 10 launches tomorrow. how are investors anticipating that big unveil. plus a deeper dive inside yahoo!'s first full quarter. she knows you like no one else. and you wouldn't have it any other way. but your erectile dysfunction - you know, that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure.

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we do want to take a check on shares on research in motion. shares just off the session lows right now ahead of the big blackberry 10 launch tomorrow. at its low, the stock hit 14.84, down more than 8%. here we are down 7.8%. of course, tomorrow, carl and jon fortt will be there live. the big unveil will happen at 10:00 a.m. the big question for investors today is, is this event going to be the sell the news event. are we seeing that in today's session. >> the dow is up 32, so we've

resumed the new year rally. question whether top economists heading through the summer and beyond. what about bonds, of course, how will the ten-year yield around 2%. cnbc's senior economics reporter steve liesman combs through the data for his own survey and joins us with the latest. the exclusive fed survey. steve, over to you. >> simon, thanks. if you're a bull on stocks, this will be a depressing report for you. hour 52 economists and strategists not all that optimistic for the s&p over the remainder of this year. here's where we were close of business yesterday, right around 1500. now, they have raised the outlook for the s&p successively over the course of the year through our surveys. they were down here around 14, 15. now they're at 1505. you can see from now through the summer, they don't see a whole lot happening with stocks. this survey was just taken in the last week. a little bit more optimistic

about december 2013, or the end of the year. but from where we are right now, you can see they're only up 3.1%. now, if we push this over to the side, what we can see is maybe the reason is they think stocks will fight a rising ten-year yield environment. we're now 197. at least as of close of business yesterday. by june, a little above 2%. by the end of the year, 2.13%. not a lot. that may be one of the ropes why wall street is not so optimistic about stocks. it's got to fight this rising treasury yield. we'll see later in the afternoon that they're more optimistic about growth. they finally increased the gdp outlook but not by very much. let's look at what wall street thinks of the effect of this quantitative easing will have. pessimistic as they have been each time we asked this question about the ability of quantitative easing to lower unemployment. only 34% say qe will help in that regard. how about when it comes to lowering mortgage rates.

a little more optimism. 54% versus 42%. bond yields, evenly split, 47%, 47%. but what can qe do? it can raise stock prices. 69% say it will have an effect on raising stock prices. we want to move on now to the next bit of the survey. when will the federal reserve hike rates. these are two distribution charts. it shows where the percentage of respondents are at a given level here. what you see, the blue line is the december survey. and the red line is the current survey. interestingly, when you look at the averages, what you'll see is the averages are the same. q-1. but we get there with a little more certainty. you can see more of our respondents believe that it will be 2015, the first quarter. why is that interesting? remember, the fed changed its guidance from counterdate guidance to economic target guidance for quantitative easing. but now, even though they've done that, more certainty on the

part of the market as to when the fed will first hike rates. that is in the first quarter of 2015. melissa, all of this is online. there's three stories on the fed survey. you can look at the rul results, anything you want to do with the fed surveys is right there on cnbc.com. >> in the meantime, steve, do you think the time horizon is pulling in as to when the market will substantially push rates higher? >> i think so, simon. i think now it's not -- i mean, we're gradually weaning ourselves from thinking of these things in terms of calendar dates and more toward economic targets, when we asked people what is the unemployment rate the fed will stop buying assets, it's now 6.8%, up from 6.5%. i think that's the key number to watch. and then there's another aspect to this you'll find if you look at the survey which is, does the market believe the fed will end qe on a dime or taper it. most of the market believes it will be tapered. and that that's an event for perhaps the end of the third quarter.

and so tomorrow is a day when we get that statement, simon. we'll be very interested to see what the outlook is for qe. >> but the irony is, they went in and didn't have a huge effect, as you just listed, on the economy going forward with qe. but once they're in, they can't pull back for fear the asset markets might collapse, presumably. >> i think they're definitely in a bit of a pickle, i guess is one way to put it, simon, where they want to taper it off and not have a huge effect on the economy. stock prices being the key, and mortgage rates also being in there. >> thank you. >> let's get more color on yahoo's earnings. it covers amazon which reports after the bell tonight. let's talk about yahoo! mainly because after hours, this morning, yahoo! had been trading higher, hit a new 52-week high. what's your take on the quarter and how the stock is reacting now that investors have had time to digest the quarter? >> so after the recent run-up,

the stock is up 30% since they last reported, i actually think it's -- it does make sense that the stock would sell up a little bit. last night's numbers were, i'd say, you know, in line for the most part. i think they disappointed on the display side, which is what everybody was focusing on. search came in a little better. and they did a lot of buyback. i suspect that's kind of one of the drivers for the recent run-up. >> yeah, it was a $1.5 billion worth of stock bought back in the fourth quarter. that certainly helped on the eps line, beating display revenues. there was a decline year on year, it missed consensus estimates, as you pointed out last night. is this something that marissa is going to be able to turn around? it seems like the honeymoon could last another couple of quarters, but turning around a line item like that might take longer. >> yes. that's a $64,000 question is, how quickly can she turn it around. if you look at the implied

guidance for q-1, i think things will get worse before it gets better. i think the implied guidance for display is probably a decline of 5% to 10% versus 5% this past quarter. that's really kind of -- has historically -- display has historically been yahoo's story. it's not been about search in an environment where you have google gobbling up market share in display and facebook growing faster than everybody. the competitive landscape has gotten a lot tougher. for her to turn it around is not much more difficult. >> let's be frank about it. it's a total act of faith, that she's going to come through with products that will, a, give more unique viewers, and secondly, reverse the display in display advertising. we have no idea whether she's actually going to be able to do that. i was very concerned to read in the journal today that recently, some of the big advertising agencies, the american advertising agencies met with her. and the journal reports they were very disappointed at the

lack of detail that she had to give them. and frankly, they were saying, the story that we hear of facebook and google is much sexier. i paraphrase that. that probably wasn't the adjective they used. but she's not actually pulling rabbits out of bags beyond the monetization of asia. >> i think that's fair. but remember, she's been on the job for six months. her cfo has been on the job for three months. her head of sales has been on the job a couple of months. it's going to take some time. if you look at the numbers, their guidance that they put out last night, they're talking about increasing investment in the first half. and then some leverage in the second half. what does that mean? that means they need to continue hiring the right people. they need to continue to invest in product. and talk to these ad agencies and try to convince them. as i said at the outsaid, the environment is only getting tougher. to a certaindegree, yes, it is.

>> when would you see empirical data suggesting that the tide is turning, though? i mean, would share -- i mean, would the end of share loss when it comes to the digital ad market, is that in the near future? >> no. i mean, look, google, it's growing somewhere between 30% and 40%. facebook around the same level. it's going to take a while for facebook to -- for yahoo! excuse me, to go from negative 5 to a positive. we think sometime by the end of this year, they may be flat to maybe slightly up. you know, we're not holding our breath on them growing as fast, or even faster than the industry as management continues to believe that they will be able to do. but in the meantime, we'll be looking at engagement to see month-to-month engagement, particularly on the mobile side. and also try to figure out or try to see the rollout of new products.

that will be a precursor to them doing well over time. >> amazon, that's a big report we're all looking forward to after the bell tonight. amazon has just come off a couple of new 52-week highs. sort of in the same situation where there's a run-up ahead of earnings. at the same time, for the past five quarters or so, they have guided below street consensus. what are you expecting tonight? >> so, we're expecting a very strong quarter out of amazon. and strong being about 25% to 30% top line. i think around 27%, which is where consensus is. that said, that's actually in line with expectations. and, you know, amazon continues to grow somewhere between 2 to 2 1/2 times the industry, the e-commerce industry growth. if you're a large cap growth investor interested in having exposure to the internet, this is definitely a core holding of yours. does that mean you don't trade

around positions? you probably will. and maybe selling off a little before they report is probably a good strategy, considering that if you look at the last several quarters they reported, the stock has historically been very, very volatile. but, you know, management doesn't really care too much about how the street reacts to their numbers. they don't care too much about margins. at least so far. they care mostly about top line growth. and increasingly that's what investors have grown to appreciate with amazon. >> all right. we're going to leave it there. appreciate your time. appreciate it. >> that's extraordinary. >> that's why amazon has its multiple. that's why it keeps getting higher. >> i get it. >> very few margins, but i get it. after the break, he's on the board of directors of linked-in and pandora. one of the first investors in facebook. david -- how do you say it? joins us live, next.

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facebook to report earnings after the bell tomorrow. as an initial investor in facebook, and on the board of directors, our next guest is at the forefront, you might say, of social media. joining us now is david sze. david, always nice to see you. tomorrow we'll hear from facebook and we'll talk a lot about mobile and the transition. do we make too much of it? is it inevitable in some ways that perhaps at the end of the day, advertisers will follow wherever the audience is? >> i think it is. you know, i'm obviously involved with the internet from very early on, in thearily '90s. there was a lot of questions early on whether advertising would ever be on a computer and whether anybody would do that. i've been involved with pandora since its transition to a mobile company with the launch of the iphone. 75% of their revenues end up being mobile. now with facebook, i remember a

year ago, plus or minus, a lot of the questions about mobile, and whether it would happen. there's such a dominant leader in the mobile space in terms of usage and engagement of its users, that i think it will happen. i think the kind of things that they're being challenged about mobile in the public markets will all of a sudden become their advantage when they see mobile is the place to be. >> when you say that challenges will be seen as their advantages, what are you talking about? >> i think almost every media you find it grows in user usage first, then there's a trail lag as advertisers and as people who look to monetize consumers start to realize thaez whet's where t attention is. and how to figure out how best to engage users in that new media. >> you invested $12.5 million in facebook. it's fair to say you're up on the investment. not bad. you guys have held in there. you sold during the ipo. you still do. why not cash out at

extraordinary return for your fund's investors? >> as you said, we were involved with -- involved with mark in early 2006. and it may look like a pretty good investment today, so to speak. but at that time there were a lot of questions whether we had lost our minds when we invested in facebook. we've seen mark and his team execute over the years. we continue to see that, whether it's mark, cheryl, david. it's a world-class team. they have that kind of long-term vision that isn't going to get distracted by the short-term pressures from the street. very much similar to the way you were talking about amazon and jeff's vision over time and how their relentless focus long term, the street comes to realize what they're doing and appreciate it. >> david, you may have invested in facebook seven years ago. but in general, people perhaps only now are waking up to what the business model is for facebook. and i wonder how concerned you are about the potential for a privacy backlash. now, "the new york times" wrote

an article over the weekend, you know, tech companies generally make about a third of their money in europe, "the new york times" suggested all american technical companies add the commerce department are lobbying in brussels for essentially changing the rules so profiling of users is outlawed. now, this would be absolutely massive for some of the companies in which you are invested. what is the judgment that you're making? >> well, you know, i think we've seen over the last decade and a half being involved with the internet from the beginning, there have been challenges again and again, both from a user perspective, from an advertiser and revenue perspective and also from a governmental perspective, and each time at the end of the day, the value to the consumer and the utility tends to overweigh and win out. while i think there will always be a tension, and facebook has clearly faced that over time with reactions to privacy issues, the value they provided seems to dominate. and at the end of the day, you come to a happy medium where i

think the users want facebook, they want those experiences, they want the internet. i don't think the regulations will come in and stop it. at the end of the day, if europe shuts down, you know, access to the internet or dramatically hampers it through some of its actions, i don't think europeans will be too happy and i think those will change. at the end of the day, the consumer needs to dominate and the regulators stay at the edges and figuring out how to moderate and conform to the needs. at the end of the day, they should serve the people. >> does it matter in the decision to hold on to the bulk of the investment, to wait until it gets back to the ipo price? >> no. i don't think that should drive people's actions. i don't think the optics matters for the company. you have to be dispassionate and look at what the opportunity is. we believe there's a huge opportunity. >> finally, david, twitter valuation? any warning flags going off in

your head? >> you know, i don't -- i'm not involved with twitter directly. i think dick costello is an extremely talented individual and he's done a great job of focusing that company and turning them on revenue. i think the biggest positive is how they focused on getting their revenue to work with the user experience. i think they're another company that will benefit from the mobile and continue to benefit from it. exact focused on right now. >> we're out of time. what is the coolest thing you've seen even if you're not going to invest in the last six months? >> i've been a big fan of a company called next door where they take the facebook experience and make it private and secure and bring back person-to-person interaction in trusted neighborhoods. all that benefit of the neighborhood you used to have that has been lost over the years we're now using technology to bring it back. >> all right. we have to leave it there. appreciate your time. >> nice to see you. take care. >> you too. >> still ahead just how messy will the fed's exit strategy be?

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welcome back to "squawk on the street." rick santelli here with today's rendition of the exchange. you know, the fed's exit most likely is going to be very messy. we'll get to that in a minute. it's almost a rhetorical issue. the exit seems like a star wars notion. an exit far, far away. you know, there never seems to be an expiration date on fauly y ideas. let's look at some of the most recent. we reupped subsidies on wind energy. i have nothing against wind energy. as a matter of fact it is one of my favorite 7th century inventions because that's about the time the first wind mill was used to generate power. you know what? i don't know but i think it's been a long time. i don't know if that subsidy will ever end. i can't remember how many decades we subsidized wool after the civil war ended or the electric car. the first electric car was

officially marketed in 1897. here we are looking at companies continuing on the dime of the government to say, yes, it's a plausible idea. in december, 2007, we officially, officially went into recession which means we are now in our sixth year, okay? and still in crisis management mode. let me get this straight. how many people watch cnbc? everybody. how many guests do you hearsay don't buy stocks, the economy is horrible, we're never going to see no highs? no, no. pretty much the other way around. stocks look great. so how do i equate this? the experts say stocks look great. ben bernanke refuses to give up crisis mode operation. he continues to buy and buy and buy even though john taylor's op-ed, has written several, one with phil graham about three months ago that was great. it is going to be messy. i can't tell you exactly how messy but what i can tell you is

at the end of the day whenever the fed decides to exit it is going to be a lot like this toothpaste. they will not be able to put it back in the tube much less try to get the stripes right. this is the notion that at some point they will acknowledge that they need to start pulling back. when will that be? i don't know. about the same time i'll turn off my lights when the wind starts blowing in my neighborhood which is never very windy. now, we'll have much more "squawk on the street" after i clean up and these messages. (announcer) at scottrade, our clients trade and invest

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i did feel a little bit softer. it made for a much more interesting "squawk on the street" editorial meeting that day. i think the name is the biggest issue. i don't think moisturizing jeans are something a lot of women want to go out and buy so maybe like denim with hydrating technology would be more desirable. >> oh, that's a good point. we have a pair here onset. these are the actual pants that katie wore. katie test drove if you will. the question here actually david faber had the question how does one wash moisturizing jeans without removing the moisturizing properties of the jeans? >> well, you can wash them. i am told though that after about i think 100 to 150 washes you do need a refill. so they require some maintenance, these jeans. >> a refill. >> high maintenance jeans. >> david is going to try these on now. >> no. >> they're waist 26. >> a size 26. >> congratulations on a size 26 by the way, katie. >> thank you. >> well done.

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good tuesday morning. we're live at post 9 of the new york stock exchange. get a check on the markets today. interesting the 12th consecutive session in which the s&p has moved single digits but the melt up does continue. 33 on the dow, 13916 about 250 points away from an all-time high. pfizer up more than 2% after the company's fourth quarter earnings soared. the pharma giant benefiting from the gain on the pending sale of its nutrition business. ford, one of the big losers today after affording fourth quarter numbers auto maker beat expectations for earnings but is widening its european loss estimate for the year to $2 billion reflecting ford's weak sales outlook for that region. let's get to the road map this morning. apple announcing a new ipad. is it just more of the same? we'll find out if apple's newest fourth generation ipad will be enough to redeem the company in consumers' and investors' eyes.

plus jane wells hitting the streets to gauge apple's true cool factor. find out what smart phones are really the most popular with the younger generation. i-phones versus galaxies in the latest edition of wells street. then the internet start up taking home design and world of apps by storm. houzz the number one app on the ipad raised another $35 million in vc funding. the ceo is here to talk about it in a moment. then shares of rimm have been on a run over the last few months but the stock has lost more than 12% in just two days. we'll get the inside story on what investors are doing with the stock less than 24 hours before the blackberry 10 is officially unveiled. we'll start with apple the company announcing the fourth generation ipad is on the way. john ford at cnbc headquarters with details on why you would need 128 gigs. >> well, we probably don't. a couple things. high end consumers who just say give me the best model that you have. and also enterprise users who need lots of space. it's the enterprise users that apple actually called out in

launching this model including engineers who need high tech, high resolution blue prints, hospitals who need to store x-rays and recording studios who have those big audio files. this model is likely to be good for apple's margins because the price starting at 800 bucks is $300 higher than the basic ipad and 128 gigs doesn't cost apple that much because they buy so much flash. what's unclear at this point is how large a customer base this is likely to draw. i'm guessing it's a narrow slice at the high end. apple actually got into margins below 40% for the current quarter and i suspect this won't have an impact on that much either way. but it does start to hint at how apple might be positioning its tablets going forward. this high capacity ipad is not just a consumption device but a lap top replacement that has carried rich media. companies are going to manipulate it. they're going to be widening and making these pictures smaller, zooming in on them. when you're doing audio files in a recording studio, not just

listening but manipulating those. i expect we'll see more features from apple this year that push this full size ipad in that direction of pc replacement, carl. >> you frame it exactly right, john. stick around. we want to bring in dan ackerman senior editor over at c net to talk about what this means. dan, good morning to you. when i first heard the news on twitter, it cited a press release. i thought, wait a minute. apple has a standard press release to issue a new product? not usually the way they do things. >> yeah. not really a super new product. it really just took the fourth generation ipad that came out in the fall and added a bigger ssd option but that is kind of the lowest rung on the apple ladder. they have the big stage shows like the biggest stuff. then they'll have a little hotel room kind of thing where they'll say here is our new stuff and you can tell people about it next week and then the lowest rung is sort of a press release. here is a spec upgrade. so i don't think they're really banking on this making too much of a big splash. >> you don't think they're trying to take some oxygen out of the room ahead of tomorrow's

rimm event do you? >> these big tech companies especially lately have liked sort of one upping each other on the dates of their announcements. apple and other companies have things happening right around the windows 8 launch in the fall and microsoft had their surface pro tablet they had news about recently and blackberry is tomorrow. it makes sense apple would want to come in and pick up a little bit of the kind of new band width. >> to his point, dan, about the ipad becoming more of an industrial product, b2b prod ux, is that a natural step in the evolution of this product? >> that is what they're trying to do. the 128 is the same hard drive capacity as a more professional windows 8 tablet that just started coming out so at least apple can say you have the same amount of storage and if you like our tools versus say windows tools you can use this professionally. >> john, i don't know if you have questions for dan but i have a question for you. it didn't take long for some of

the apple bears, haters, as some might say, to say if this is all they got that's not very much. i can't imagine that's how apple is framing this device as the answer to all of their problems. >> you know, when the ipad first came out a lot of people were saying if this is all they've got it's not very much. it's just a big ipod touch. it turns out there was a market for a big ipod touch and there are some things you can't do with a smaller one. i think the big question here is are we in a period of prolonged margin contraction from apple because they're facing all this competition or is it just that they launched all these products last quarter and we're going to start to see margin expansion over the year? and so, you know, part of that margin expansion could be new software and services that take advantage of a higher capacity ipad like this. we just don't know. but, you know, from what i'm hearing over at apple, they don't see this as a big sea change that's happening in the market where they think they have to change their strategy. we'll just have to see how it pans out. >> yeah.

dan, do you think it hints at some sort of lack of innovation? are we marking time here? is this filler until we get the next big thing? >> that's kind of the problem. once you have these big popular products like the iphone and ipad apple has gotten stuck in this yearly upgrade cycle where they have to come out with something new every year which they started to do last year, moving that cycle from the spring and sum tower the fall so they're giving us a little taste of something new in the spring right now. but we'll probably have to wait to the fall to see a new ipad and new iphone. i also don't know how many years in a row everyone is going to say this new one is so great. i have to run out and get it. >> go ahead. >> putting on my pc computing historian hat for a moment there was a period more than a decade ago when we saw the pc market just exploding and companies like dell and hp increasingly making profits, growing revenue, selling hardware. then we got this period where it was about google. it was about ebay. it was about amazon. the services and the commerce that you can layer on top once you've got a big market of

people who have these devices. we are reaching that with the smart phone market but we don't yet know which companies are going to invent the software services that really profitably take advantage of that. that's what it's going to be not this ipad. >> well said. final point, guys. rimm's down almost 8%. dan, do you think that reflects anything of how tomorrow may go for them? >> yeah. i think they've delayed this new operating system for so long it is almost going to be an anticlimactic. i doubt they'll have anything that is going to make people really want to switch if they can convince people. >> i'll see you at that event tomorrow morning. thanks, guys. over to mary thompson for a quick market flash. >> taking a look at shares of netflix up about 0.7%. this in the wake of the company's strong earnings last week. the company is selling $400 million worth of debt. it is going to use proceeds from

that, $225 million to retire so that leaves it with what, $175 million for corporate purposes maybe. maybe to produce new content. that was something the company has highlighted in the past. carl, back to you. >> all right. thanks so much mary thompson. capital markets op-ed this morning gary k. is here at the new york stock exchange with the market expert who says your best bet for the next two years may not be in stocks. hey, gary. >> good morning. i am joined here on the floor of the exchange by shelly bergman managing director of morgan stanley which shelly runs about 3.5 billion for clients and was featured recently in a feature piece where he talked about how he's been bullish and yes shelly as viewers know, we've cited some of your work for the last several years you've been telling people to be in stocks when things look like they were at the absolute worst in 2009. you made people a lot of money but we're running a ticker right now looking at basically the distance between the s&p and where we were at the '07 high. is now still the time for people to be putting money into

equities? >> definitely. look, i don't know where the market is going in the next month, two months, three months but you look out to 2014, i think it'll be substantially higher. i don't want to put a particular target number on it but we talked about in 2009 about a melt up. we followed it by why equities are under valued. i think you're in the fourth inning now of a long nine inning game. >> this is what, driven by earnings, expansion, what is the major factor? >> stocks are going up because alternatives are just not out there. okay? there are one and two-year cds rolling off, municipal bonds being redeemed, corporate bonds. people are looking for yields. balance sheets are still in great shape. from what we're seeing from our clients anecdotal evidence, the economy is getting better and as long as the economy is going forward this stock market is going to go forward. >> you mentioned unis and i know you were telling clients years ago when there was an opportunity in munis this is the most attractive barrier. it's on sale right now given other things happening. you did the same thing in high yield bonds post 2009.

what is the most attractive area, the area you think analysts are missing the most where people should be looking to buy things on sale right now? >> look, a lot of low hanging fruit as far as clearance sales, sidewalk sales, but if you want to, you know, ask me about one particular area, natural gas. natural gas stocks. etfs involved in natural gas. natural gas is down from $10 per mcf to 3. everybody is bearish talking about the short-term -- >> look at the long-term chart. this is a chronically -- this industry is so chronically over supplied. how do you make money as an investor in nat gas stocks? >> i heard this with gold at 5, 6, 7, $800. i heard it years ago with oil. okay? you are having wells that are currently being capped. you have substitution from coal to natural gas. you have people considering, utility companies now looking at

building natural gas plants. within two to three years you'll look back at this i believe and say, how did i miss natural gas at $3? down from $10, $12? >> i know you want to reference this. but i want to ask you this. there are a lot of people that you and i both know. they sold stocks in 2008, 2009, and there are many people. you see them all the time that are sitting in cash. viewers out there that have been frozen, inertia is a problem. it's very hard to do something. if i came to your office today and i said to you, i want to invest in the long term and i truly meant it, what do i do now, what would you be telling me? >> look, it's depending upon your risk profile but you got to look out and you got to realize i've been doing this for 30 years. you've been doing this for 30 years. you have to identify the times where there's chaos, blood in the streets. you have to be able to go in there and take advantage of that whether it be corporate bonds, muni bonds, individual stocks. a lot of individual investors can't do this on their own. they don't have the stomach for it.

>> so your point, this is a beautiful cup. you were back at bear stearns and helped them create a synthetic note where you went short the housing market. this is a fun little prop. so your point with this, is that although there was a crisis, this was still an opportunity to invest in certain areas of equities? i know we have the 20-year chart of the s&p. you wanted to take it back 80 years. what is the point? >> the point is this. okay. i'm not a perennial bull. we're not always invested in stocks. there are different asset classes. but in 2007-2008 i went to the desk in bear stearns and we created what was called a structured note on the downfall in the philadelphia housing industry. we were very bearish. we didn't know when the timing was there. but when people were buying homes at inflated prices and getting mortgages we created a note. it was correlated to two times the down side. >> right. >> the philadelphia housing index. i think everybody knows what the philadelphia housing index did.

so i look today at natural gas at $3 and i say, this could be the next asset class, which is not being seen. >> all right. very good. listen, we'll have the natural gas cup. before we go a lot of guys do research. i want to bring this picture up. take a look at this picture. hopefully you'll see it in the monitor. i was on a research trip talking stocks with shelly. this is bob oldstein the legendary mutual fund manager. my son tommy. what i want to know is why do i have the biggest fish? >> the reason here is the biggest fish just to let everybody in on this we didn't want bob olstein holding a bigger fish because he was having a hard time with the little 12-pound blue fish so we gave it over to gary the strong guy. >> yeah, yeah. back to you. yes shelly was very bullish back then in august when we went fishing and has been right about the markets so you may want to listen to what he has to say about nat gas. thanks for joining us. >> it looks like that shot is from "the fugitive" but that's a different story. gary, thanks a lot, man.

what if you could redesign your home on are phone? glob globally houzz lets you do that. after two years of raising millions in venture capital funds and attracting thousands of users and creating the number one home design app for the ipad. we'll talk to the ceo. first rick santelli is going to talk about why fed policy is a drag on the economy on a week where we have a two-day fed meeting, rick. >> yes we do. i tried to pick somebody really calm today so i picked jeff carter because i'm pretty riled up. we're going to talk about the federal reserve and in for a penny in for a pound. there used to be checks and balances in our government proper. we can argue that one. but there hasn't ever been such a set up for the fed. maybe we need one. you want to come back to bottom of the hour. [ male announcer ] where do you turn for legal matters? at legalzoom, we've created a better place to handle your legal needs. maybe you have questions about incorporating a business you'd like to start. or questions about protecting your family with a will or living trust. and you'd like to find the right attorney to help guide you along,

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know where to begin? you may want to check out houzz the online spot for anyone in the process of building, remodeling, or decorating with the largest data base of home interiors and exteriors users browse photos by style, room, and location. saving images to their idea book for later use. houzz. it's the online home for renovation and design enthusiasts. >> and we're joined here at post 9 by the cofounder and ceo of houzz. welcome. >> hi. >> to post 9. you just closed at 35 million in financing which i imagine will allow you to do some things you haven't done before right? >> i think it's mainly going to allow us to hire, keep hiring great engineers and design

people. and keep building our technology. >> this whole thing started, you're in the bay area trying to get contractors and architects together and people who wanted to redo their house. it's not that small anymore right? how many professionals connecting with how many users? >> we have today over 160,000 active professionals that interact with over 12 million homeowners. every month. >> everybody is involved. sequoia is involved, kleiner, you've got a new professional product which i guess is going to create now a dual revenue stream. talk about that. >> so the first revenue stream we launched last year worked with the national. it is very innovative. we allow people to add and now we launched a platform to help local professionals to build in their local communities. >> that is more of a metro product. >> yes. >> it sold out in the markets in which you unrolled it? >> yes. we only launched it a few weeks

ago and some are already sold out. we have plans to launch the rest of the united states and canada soon. >> you made the point the housing market was relatively late to start to technologize if that is a word. how did it happen and where do you think you fit? >> engineers decided to do other fields first and maybe the market wasn't ready for that so home owners remained pretty much in the dark when it came to home renovation. they spend a lot of money and time and effort to bring the wrong people to their house, to not know enough about the process. and all of a sudden houzz turned on the light for them. it's me. i'm the home owner, the child in the toy store. all of a sudden i can see the best professionals, the best photos, read recommendations about the best products, best people to hire, collaborate with other people, get their advice while i'm in the process. >> right. >> it's way better. >> it's funny. for so long, you saying it's the

biggest expense you're going to make other than the actual purchase of the house. >> absolutely. >> for decades it's been hey do you know a guy? i've got a good contractor. you should meet him. once you meet him you're like well let's go with him. >> maybe the professional, that was good for you, was great. but maybe it's not the right thing for me for my style for what i want to accomplish. so it's really great that professionals are being able to find the best customers for their style budget the way they build the home and vice versa. home owners being able to find the best professionals for themselves. >> so i got to imagine, obviously housing is a bit of a tail wind now for the economy some argue. you must be having to make some big decisions about how fast this company is going to grow. right? and whether it is going to do so in a private or public space? >> we need to accelerate in order to provide the demand for our platform. and the core is technology. the money we just raised is going to be used to mainly keep

building technology. we'll continue bringing top notch engineers and designers and address the need for a great technology in this industry. >> can you find enough? we're having big discussions aboutism grags and trying to raise the cap on the number of people we can bring into the country. >> i think we were very lucky so far to bring the best of the best and houzz family is the best. so we are hoping to continue bringing great engineers and designers. >> finally, a big piece of the business is u.s./canada. >> yes. >> how focused are you on international? >> we just started growing internationally as well. still the majority of our traffic and users are in the united states and canada, 80%. but the rest is starting to grow in europe and australia as well. >> well we look forward to having you back on the next big piece of news. >> i look forward to it too. thanks for having me over. >> thanks so much. speaking of homes let's send it over to mary thompson with a market flash this time on dhi. >> that's right.

this is the country's largest home builder. it posted its best first quarter results in six years. that has sent the stock to a 52-week high. it is now up 9.92%. the company saying it saw strength in all, almost all of the markets it serves. again, dr horton up 9.9%. back to you. >> an intraday chart right there. thank you very much. bell is about to sound across europe. we'll get that close and talk some confidence numbers out of germany with simon hobbs in just about three minutes. [ male announcer ] this is not my home. there. i said it. they don't have pictures of my kids. they don't have my yoga mat. and still, i feel at home. could it be the flat screen tv? the not so mini fridge? ♪ the different free dinner almost every weeknight?

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welcome back to cnbc. we have breakings news on hostess continuing to find bidders for its assets in bankruptcy. i'm told from a source apollo global management and metropolis and company are near being named the stocking horse bidder for the hostess snack brands including twinkies, ding dongs, all of the flag ship brands. the price is reported to be close to $400 million. if you add up what hostess has agreed so far you're getting near a billion dollars in total for all of its assets, carl. that option is expected to kick off in bankruptcy court next month. back over to you. >> the story that just keeps on giving. thank you for that. simon has the european close on a day where we got some data. the german confidence numbers among them. >> we did. the spanish retail sales figure was quite bad. the german confidence was better. france holding steady. i think the more important thing now is the u.s. data has lifted european equities into the close. that's what you see. just before we go any further i

wanted to reference this morning's financial times. i'm not sure if you've seen it but it talks about $100 billion of cash going into the periphery of europe in the fourth quarter. let me just remind you that tomorrow $137 billion euros of cash will go from the banks back into the ecb. the cash that came in the fourth quarter according to ing was 9% of spanish, italian, portugese, and irish economic growth. it was about 9% of their total economies. the cash that they're returning tomorrow to the ecb will be about 12% then of those economies. massive amount of cash going back tomorrow. let's focus on the rally in europe today. it's interesting. did you see the 20% gain now that we've had on the shanghai market? we saw some of the minors bouncing in london ted led by anglo american. they are taking a sterling right down on some of their assets in latin america. the other thing notable today

was how some of the banks are lower in europe led by lloyd -- i beg your pardon -- by royal bank of scotland on this report in "the wall street journal" that now u.s. authorities are looking for criminal sanctions against executives of the bank as a result of the scandal. that scared a lot of people and would be in addition to potentially half a billion sterling in terms of fines and penalties there. the other thing i think we need to keep our eye on and it is not a huge issue at the moment. it is in italy but it doesn't have huge, wider ramifications is the bank scandal, the fact they found this billion dollar derivatives that dates back to when mario draghi was in charge of the bank of italy. there is still a huge amount of concern in italy at a time when they may have to increase their austerity. today the finance minister is going to be up before and he is explaining exactly what went on with bribes paid in a take over. what did mario drag hye know?

the danger is that this impacts the result of the italian election and that potentially get those nonmonti, nonausterity people having a greater say and that could upset the apple cart. for the moment it is a localized issue it would appear but there is the prospect it could influence the election further down the line. >> a lot going on there too. thanks, simon hobbs. we're keeping a very close eye on the dow getting closer and closer to 14,000. meantime let's check on energy commodities. >> as the dow moves higher we're also watching oil prices move higher. we just hit a new intraday high of 9773 hovering just under that level right now. wti hitting more than a four-month high. strong manufacturing data out of the u.s. yesterday, strong housing data. a slew of good earnings reports. all supportive of crude at this point. meantime i also want to look at nat gas because we have seen a sell off there. the sixth straight day of selling.

it's ahead of today's february contract expiration. gas prices roughly down about 10% this week and that is because these higher temperatures are coming in to play. let's also switch gears and look at gold prices as well. they are higher but not really breaking out of the range at this point. we're seeing buying on dips but traders are cautious ahead of the meeting today. also looking at the rest of the metals complex higher as well. rbc capital notes there is some bullishness in the market but again waiting before it breaks out. back over to you. >> thanks so much. bob pisani is here at post 9. 1505, bob. >> there were no signs that the market is rolling over, overall, but a few big tech names. a kind of a rough day for tech overall. let me show you. of course emc, all of the disk drives are weak because emc gave disappointing guidance. all of those stocks are to the weak side. but lexmark printer business is not doing well. tech stocks are rolling over a

little bit, advanced micro had a good month and is rolling over. hewlett had a good plongt. it's rolling over a little bit. this looks like some profit taking to me. overall, on housing, i mentioned this morning, you just can't do much better than some of these housing numbers. just put up the big orders. it's new orders that matter with the housing companies. and here's the home builders. all of them moving up. d.r. horton had excellent numbers overall but put up the housing order numbers here. d.r. horton had numbers up 39% here. toll brothers new orders up 36%. lennar up 32%. beazer up 29%. only kb home a little below. these are great numbers. last quarter a year ago was better so you're getting very tough comps here and they're doing even better than expected against the tough comps over all. the key worry is the valuations are high. these stocks are trading for in some cases two times book value. that's very high by an historical valuation. that's your main worry on these

stocks here. here's the home builders again. let me move on and talk about the earning situation. i want to talk about the revenues. they're a little better than people were anticipating. put up the revenues right now. 35% of the s&ps reported so far 65% of the companies beat on revenue. was that a lot? last quarter only 35% beat. remember when we were so bitterly complaining about no revenue growth? take a look now. we're getting some revenue growth. it's not huge. revenues are up 3.8%. there were essentially zero last quarter. zero. now 3.8. that's better. earnings are up 4.7. that will almost certainly go to 6% or 7% before we're over. there was a bottom in the third quarter. that seems fairly clear on revenues and earnings. that's a good sign overall. finally this is the, a lot of paranoia about this fed meeting. i don't know why there is. everyone keeps pointing to the december minutes. some thought it was appropriate to stop asset purchases well before 2013 and everybody is worried they'll have some comment about this. this is just me, guys. but i think this is over blown. take a look here.

the fed, much more dovish in 2013. the overall make up of the fed. they announced the purchases back in december and i think the fed's likely going to keep any kind of policy accommodation comments on the moderate pace. i don't know why everybody is so worried. >> i think a lot of the discussions over whether someone dissents. >> these are very minority positions. the makeup of the fomc is more dovish in 2013 as far as i can see. >> we'll see what it says tomorrow. thanks. as the fomc does begin its two-day policy meeting traders looking at the effect of the balance sheet on the economy and with that we turn to rick santelli once again. >> and i turn to jeff carter. thanks. welcome. >> welcome. >> calming down off camera we were talking about the wonderful op-ed by john taylor. you know, yes. it's a drag. >> right. >> which is the title but i think it is a drag in other ways. low interest rates just aren't a good issue down the road. one of my favorite examples is

one of those pawn shows i like to watch. and i think they make monthly loans. >> sure. >> for about 12%. so kind of like payday loans. how many of those loans do you think they would make if they were forced to make them at 1% or 2%? >> they would close up the shop and go out of business. >> okay. let's stick with that theme. how can we equate that to what the fed is doing and the op-ed by john taylor? >> the interesting thing about zero interest rates, let's go back to when they started. that was probably the right policy. you needed cheap money. we had a financial crisis. to carry it forward going as long as we have, his making it so money is locked. it can't get out. you've created a price ceiling and artificial incentives. simple micro economics. banks aren't going to lend money at low interest rates even though demand is way up here. you'll borrow as much as you can at 1% say or 2% and reinvest in your business. >> don't you think ben bernanke understands micro economics? i'm sure he is an expert in it. >> i think he is. he looks at it differently i

think than taylor. so the keynesians from the salt water schools of economics on the coast look at it very different than say taylor or the classical school. and the classical school has said for months, years now that there is a cost, an opportunity cost to zero percent interest and we're seeing that reflected. >> let's go another election. the big 47% during the election. >> right. >> it was framed wrong. they're not bad part but their livelihood and living is predicated on relationship with money with the government. >> right. >> what happens ten years down the road? all the interest that was supposed to grow, annuities and a variety of issues for the elderly close to retirement, baby boomers, who is going to pay for their retirement? >> you are because you make more than me. because you're one of the 1%. i'm just kidding. i think the bad thing you see now is you've got for instance in our state of illinois 90

billion in unfunded pensions. what are they going to do? they imply a growth rate of 8%. when it's not growing at 8%. clearly. so there is floe way no way to up. >> not to mention another major slowdown in the economy if we have that how is ben going to deal with it? >> he is going to ease. he's out of bullets. >> they have been for years. >> thanks so much. shares of research in motion doubling over the last several months ahead of the release of the blackberry 10 tomorrow of course. they pulled back in recent days. find out what investors are doing with the stock one day before the product is finally revealed. back in a minute. how do traders using technical analysis streamline their process? at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. we like this idea so much that we've applied for a patent. i'm colin beck of fidelity investments.

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coming up at the top of the hour a market mover with the stocks you must own as the dow marches to 14,000. amazon soars 10% this year alone. what must the company say tonight to keep that rally going? we'll take positions ahead of the big earnings report. yahoo beats but should you buy into marissa mayer's strategy? two traders two opinions one heated debate, carl at the top of the hour. >> thanks so much. see you soon. >> less than 24 hours until the launch of the blackberry 10 but shares of rimm are down sharply this morning off the lows but still down after having a pretty good run over the last several

months. what is making investors so jittery over the last few days? we have the editor of the money and investing section of the "wall street journal" and also a columnist joining us from new york. welcome back. >> hi. how you doing? >> good. a lay person would say, gosh. this product must not be the thing to set the world on fire. there had been some products out there leaking. davos among some places. what are you hearing? >> i think the moment today you're seeing a little profit taking ahead of the launch. a little jitters. that's kind of normal the shares as you said have had a fantastic run. i've seen a few people. i've seen a few, a product, and they like it. i haven't seen it myself. i have to say, carl, for full disclosure, i don't have an iphone. i use the blackberry. >> that is a fortunate coincidence because the bulls will argue you got 80 million active users. if even a third of them decide

to upgrade that would be a significant home run for this company. what would it get to make you move up? >> i use it because my company gives it to me. a lot of the users are people who are getting it from their company. i think unless the company pays you will not do it. the problem and we wrote about it in today's newspaper is that there is this new tendency to bring your own device byod which means that people can choose their own devices and a lot of people don't choose the blackberry. it used to be you would work for a company and have any device you wanted as long as it wasn't a blackberry. now you have the same choice. >> tomorrow will be about the product but they've also hired bankers to help them decide what to do about licensing agreems, out sourcing or selling. manufacturing at large. do you think those big decisions are imminent?

>> i think they have to make a decision very quickly. despite the shares have done so well rimm is still in great difficulties not financial but certainly strategic so they need to decide quickly what to do and raise cash. most importantly they need to show investors and users that they are heading in the right direction. >> yeah. it's clearly going to be a story about as you said the enterprise but then there is also the consumer market and even there we continue to see conflicting signals about people's willingness to spend more. right? >> i think that's right. especially in the u.s. of course and in emerging markets i-phones have been doing very well and the problem with blackberry is of course the fact that there is so much competition. we all talk about apple but there is the systems there also. very, very tough compared to blackberry. >> you think people are trading the name based on what income will do, the actual name, or is this just a big short versus

long trade squeeze? >> i think what you're seeing at the moment is the blackberry is actually, the company, is benefiting from the fact the shares have gone down a lot so it is a value play and the fact there is all this cooperation expected including possibly some sort of take over. at some point people will be interested in blackberry as a take over target. there is a lot of option value to the stock plus the fact we have this new product coming out can't do any harm. >> yeah. it's got i think i would argue in management torstin hines who even though he has been in the job for a while is not i think well understood. you also have national pride at play. we keep hearing from canadians who say they're backers of the stock simply because that is where they are from. >> national pride is huge. also they have their own service, many housed in canada. thorsten heinz is a big puzzle for the market. some people like it. you hear almost polarizing views. i suspect it is because the strategy has not been really

fully fleshed out and people are expecting or waiting for this big strategic announcement and certainly waiting for the product. >> i know you'll be paying attention tomorrow given what you've already said. >> i cannot wait. >> thanks again. we'll see you later. >> take care. >> don't forget we will be at rimm's big event tomorrow. coverage begins at 9:00 a.m. eastern time. blackberry 10 unveiled an hour later at 10:00 a.m. eastern. you do not want to miss that. check the markets before the break here. as you can see 13,939 up 57. obviously less than 100 points from 14,000 and of course the all-time closing record 14,164. a lot of analysts and journalists have weighed in on is apple still cool? our own jane wells hit the street to get the real story about which smart phone actually is coolest. jane, i want the definitive answer from you after the break. >> of course, carl. they may not know much about history. they may not know much biology but they do know phones. up next we talk to the college

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apple used to be the coolest kid on the block when it came to

phones but many people say that has changed. we want to find out if apple lost its cool factor. jane wells at the streets of college campuses in california to get the real story. jane? >> reporter: i'm a cal state alma mater. go matadors! what is the most important thing in a college student's life? what do they want more than anything else? a new phone. the university of missouri says 93% of 18 to 34-year-olds who have a mobile device have a smart phone. so what do they own and what brands are cool? all right. what do you got here? >> iphone 5. >> i have an iphone. >> iphone. >> iphone. >> i got an iphone 4. >> the iphone 4 s. >> what you got there? >> an iphone. >> i have an iphone 5. >> galaxy nexus. they're similar. why spend more on iphone? you know? you get the same technology and stuff. >> actually i have a windows phone and all the tiles and stuff it seems a lot simpler to me. i look at other people's i-phones and it seems crowded with stuff. >> do you think apple is losing its cool? >> no. >> i've seen samsung is coming

up a little bit but everybody still has an iphone. some sort of iphone. >> i think there's a lot of competition but i think apple probably still has an edge. >> a lot of the other phones are just, i don't know, more hype than anything. >> verizon buys data. that's about all i hear. >> do you think apple is losing its cool? >> yeah. i feel that way especially with the new iphone 5. >> why? >> because the new software is not as good as the old one. >> apple is extremely expensive especially with their data plan so if people are offering pretty much the same service for less people will go for that. >> my fiance has the glaxy and loves that as well so we kind of compete back and forth with each other. >> who's winning? >> he thinks he is. >> a couple of my friends are having samsung galaxy and starting to not like apple and have the samsung galaxy but again, me personally, the iphone sounds good. >> you want to say i have an

iphone. >> yeah. >> you don't want to say i have a galaxy. >> here we go. yeah. >> all right. so still some cache. here is the telling thing. most iphone owners haven't bought the 5. they don't feel the need to migrate to that yet. i think that is where you're starting to see divergence. back to you. >> that is interesting. we certainly heard echoes from some of the carriers this quarter. i'm wondering, north ridge, i mean how many miles is it from cupertino? truly a representative sample? >> i think, i came here specifically because this is a state university. you get a good cross section demographically of socio economic kids with money, kids on financial aid, all different backgrounds. it really is sort of a microcosm and of course this is the age group that is so tech savvy and they're really the ones deciding what phones to get and they're taste makers on facebook about it. >> yeah. and so any place that sue and bill came from you have to say is a good place to do a story. >> so cool. >> jane wells in north ridge, california. straight ahead, j.c. penney ceo

changing his tune on promotions. we'll find out what he said on this show about a year ago.

our pricing strategy is set for the long run.

customers like and they know the right price and so we believe in pricing right. we might have some merchandise that we changed the price on to make sure it is at a point where it can maximize its velocity but the fundamental pricing strategy being fair and square of having a great every day price, plus month-long value, that is going to happen forever. >> hum. forever. that was j.c. penney's ceo ron johnson a year ago. a very different story today as they change exactly what he was talking about a year ago. >> i knew the day because it was my birthday. we walked off the set that day and i knew that was going to be a statement that ron johnson was going to regret. investors, a lot of people were shorting the stock based simply on that comment that day. this is a lesson to investors. nine of ten times you bring a high profile ceo in. if the business is deteriorating a ceo alone can't change it. you never set these things in stone. they're going to change 15, 20 times until they get it right if you could be the