people get access to information, my wife googles everything to tell me i'm wrong. i'm like joe and i know everything. i give her a fact and she googles and says, you're wrong. but i don't think it's been as transformational, i think it's a new technologically more sophisticated way of advertising. >> dick, thanks for joining us today. it's been a pleasure, see you soon. time for "squawk on the street." >> i hate facebook. ♪ if i had a hammer i'd hammer in the morning and i'd hammer in the evening ♪ >> sad news at pete seeger, dead at 94. good tuesday morning. faber is on assignment today. s&p and schiller at the bottom of your screen and we'll discuss it with robert shiller later on in the show. futures did suggest we get a breather from the recent selloff but durable goods were weak and took wind out of the sails and the ten-year note 2.75% and most

of europe is hanging to some green arrows. apple disappoints and revenue guidance is short of expectation. meantime, the overall market set for a missed open after a big mix on durable goods orders and another big driver of today's market is earnings, ford, comcast, pfizer some of the names making moves in trading and we'll break them down. first up, we'll talk about apple and shares taking hits after better-than-expected quarterly profits they sold a record 51 million iphones in the quarter but below expectations, the current quarter guidance short of consensus and an hour from now we'll get information from john scully who will join us at post nine. we said how easy it would be to set a new record which they did on phones, but no one expected phones to come in quite this low. >> no. i think there's a big schism developing, the analysts have really turned on apple now. this has become an unruly

conference call. and you'll see in a moment, but the analysts are still talking about are you still a growth company? these are questions you don't expect to be asked on an actual apple call. and another one asking whether this has just been peaked and we're kind of done and, you know, obviously cook arguing no and there's some good pushback. there is a question of mobile payments, for instance. that's not dismissed, but the fact is they didn't bring it out. there's a lot in here that i think people are going to say it's over. i urge people to look at the initial question from katie huberty about what they expect in the future about iphone and oppenheimer, the cfo, has some interesting points about channel and inventory. no one is going want to listen to anythings on positive on apple today and i think the most damning thing when you come to carl icahn is the interchange about the buyback, carl, where basically there's a question about when is the company going to be buying back stock and the answer is we buy back stock all

the time. that's not the answer that carl icahn wants to hear. he wants to hear, well, wait a second, we've got a real price break here and perhaps you should be buying right now. ben righteous, again, saying is this a good level? your stock's going to be trading around 500. tim cook right back, listen, if it doesn't change today whether the stock goes up or down. no, carl icahn's going to say this is when you should be in there buying. lots of missed opportunities by apple to say the right thing but, still, a question is -- maybe just all smartphones slowing down. >> yeah. well, the market for phones is growing at a multiple of apple's growth. >> right. >> 7% year over year. a bunch of questions. >> that's really out there, they are talking at, hey, listen, your mac is a dominant product and so why isn't your cell phone a dominant product. >> people will argue that it's over. >> yes. >> do you believe any part of it? >> no, i don't think it's over. the problem is the presentation.

>> you said yesterday the conference calls are a work of art. >> the arc was very bad because, you know, you start out with concept of people at home might really not understand this, but you start out with the -- anytime you start out with the following, which is, you know, thank you, i'm sorry to be so granular but sometimes this really does control. we are pleased to report the result of apple's first quarter of 2015, and establish new quarterly sales for iphone and ipad sales, that's not what anyone wants to hear, but if you work at apple, they report the expectations, but we live in an expectations game and tim cook knows that and so does oppenheimer and what they are saying is we don't care about your expectations, analyst, we're doing this for the average person who owns the stock of apple and the average person who owns the stock of apple totally takes their cue from how the stock is doing which is horribly right now. >> what is the reason to own it? is it the iphone 6, is it

promise of some curved screen down the road? >> i mobile payments issue will come up. >> which he hinted at last night. >> you look at the netflix runs his call and it's conversational and it's certainly not antagonistic. it's an uncomfortable call to listen to and you are crawling in your skin saying they don't like tim cook. if you think tim cook is good or bad, they just don't like him. you end up with this kind of feeling, wow, they're a great company, they're not good enough, how about google, how about microsoft? the reason you would own it is nine times earnings and if they have something special it will happen but it's not because of a -- compare this to a seagate, a company most people don't put in the same category, buying back stock aggressively, a man of the stock, they're not

managing the stock, it's the game we're in. >> yeah. one last question, at the very least are we in a period now where they are destined to be ala microsoft more cyclical, more the stock will trade around product announcements the way mature companies often do. >> my real worry is that they are secular, and there's a piece talking about the slowing of the whole cell phone group and the subset is they're not even keeping up with the slowing. they don't have the right product. there's a lot in here. there's this very crucial moment where they're talking about supply constraints but also talking about having too much supply. i would like to think i'm a smart reader of conference calls, i did not understand that. we need more clarity. we're not going to get it. >> obviously apple will open down 7% today along with the markets poised to open mixed today. the dow is looking to end a five-session losing streak and the nasdaq, of course, being dragged down by apple and today the fed begins a two-day policy meeting with the last one with

bernanke as chairman and in the meantime the president will deliver his state of the union address tonight. he's expected to renew his call to raise the federal minimum wage in an effort to tackle income inequality. later in the program we'll talk with former congressman barney frank about what he wants to hear about the president and be sure to watch our live coverage of the address tonight 9:00 p.m. eastern time right here on cnbc. >> and it will be you and kelly kevens and it will be fabulous and i think that people have to listen and why they have to listen is because there are so many crosscurrents in america, obamacare, no one is signaling that's any good at all for the economy, cold weather a lot of the people i speak to say cold weather is a real problem. we had the unemployment cutoff that matters, food stamp production these are all federal issues and finally the absolute wrangling of the shutdown of the government was horrendous for our economy. which do we blame obamacare for durable goods, do we blame weather, do we blame the cutoff in unemployment benefits, but the one thing we can't do is

saying the government is doing anything to help. >> that's absolutely right. >> that's why i want to hear what you have to say. >> it may not be the occupy wall street kind of speech that some are predicting. >> the old pecora commission is what i call it. there was a investigation in the great depression about the five families that were so wealthy, if you go back and read the transcripts you'll realize what class warfare is really. we're not in a class warfare mode. we have a president who will not address any of the topics i just mentioned because those are sore points. they -- sore points don't come up. >> yeah. you said last night about the market. the things that were working so well last year, cars, housing. >> right. >> retail have essentially if they haven't fallen out of bed they're certainly off of their highs. >> rth is hanging by a thread. >> and you have a lot of words in your words who are out of position. >> yes. this was a moment when you suddenly had to say, do you know what, i needed to be back into

dominion, back in con ed, take a look at kimberly which has held up incredibly well with a good quarter. i think people were kind of leaning towards the industrials and those stocks were up the whole day and finished very strong. when you go over the ford quarter, north american is extraordinary. europe's still bad. autos at least going into the quarter were still good. housing, i don't know. do people really go out and buy houses in the freezing cold? i don't think so. >> d.r. horton would suggest the sales pace for january is not terrible. >> no. but then i've got ethan allen saying you can't get traffic to the stores when it's this cold and when you look at chicago. i said, i trump you, i look at florida and california, and why aren't they strong? he said, no, they are strong. where it's warm ethan allen did

great amount of business. that would lead us to think that the weather theory is not all wrong. but, then, howard schultz comes back and says, no, no, no, it's a secular trend. i guess what i'm saying, carl, this is one of the harder moments i've seen in my career to really make sense of things, but the president could help by saying, look, the federal government's got to get back in the game. not the fed, but the federal government has to get back in the game of helping, the states are, as the states' coffers burgeon we're seeing the states do good things, but i look what's coming out and i say to myself, do you know what, we had a bad fourth quarter. it was bad. >> yeah. we're going to get an advance read on it on thursday when we get a number. maybe with a three handle but we'll see. >> the employment number is bad. >> today if we're down six on the dow we haven't done that since august, the middle of august, do you feel like this breather that we appear to be looking at is real today? >> when you come in and dupont

reports a really good number, it is, someone will probably say, wait a second, gmos, genetic weapons, i love this contrast. genetic weapons versus insects raises hopes and fear it's dupont and monsanto and on the back it's a facetious piece about chipotle saying the industrial food image bureau is against mon santa and dupont. dupont is doing the right thing. pfizer delivered a number that is quite good. we got more price tag rises for gilead and celgene. >> we'll walk through a bunch of the numbers when we come back. we'll talk dupont and pfizer and ford as well among the companies getting a boost from earnings news and later on nobel laureate robert shiller will break down the case-shiller home price number and he'll talk about the recent jitters in the stock market and housing. one more look at futures dow's

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♪ another big morning for earnings. dupont beat the street with its fourth quarter results and announced a new $5 billion share buyback and pfizer also beat

forecasts with their q-4 numbers, ford and comcast, the parent of this network, seeing their shares rise in reaction to their quarterly results. ford beats by three cents makes money in north america and losses in europe are smaller and, again, reiterating the claim that 2014 pretax probably lower than 2013. >> you go to slide nine in the deck and it's really important because you see the fourth quarter pretax results. here you got $1.7 billion in north america, minus $571 million in europe. here's interesting brazil weakening so badly next to argentina and argentina going the way of venezuela. this seems to be without a doubt a sign of the times. europe getting a little better. south america not helping and united states on fire. congratulations to ford and to the team there because they're brimming with cash. >> record market share for them in china at least. >> yes. and china, you know, china needs to be a bigger driver for them.

it's not there yet. a lot of people are worried about china. if you are audi you are certainly not. selling a lot of cars there. >> dupont beats by four cents. another $5 billion buyback, but it's raining $5 billion buybacks. >> yes, it is and coleman has done a remarkable job in reconfiguring that company more into the ppg mode and we're all in these revolutions away from boring chemicals to high value. dupont is a food company. it's feed the world and health and safety. these are working. it's the regenesis of a company and kullman has got it going. she is about as she would tell you enzymes. >> pfizer 56 beats by 4 cents, again, though, the loss of exclusivity. we saw what happened with lipitor a few years ago. now it's vyiie viagra down.

>> it was up nicely last year. america's become the stock that people want to own because it's done, you know, it hasn't done much at all. bristol-myers reinventing itself, people don't like right now. if i had to put the panoply of pfizer at 30 and merck at 53 and bristol-myers at 50 it's definitely bristol i want to put the money on. >> comcast 66 cent and misses on two cents on a higher tax rate, and nbcu up and broadcast tv and ocf up 55. >> it's the way we have to measure ourselves, the dividend boost, this is a company that quite recently said things are great at a grnce and they put out another number and things are really great again. i want people to look at comcast, during the period we started worrying about argentina, turkey, south africa and china, comcast went down.

what should you have done? how about bought comcast? >> at $136 billion the market cap's now bigger than disney. >> do we have to worry about china with comcast? south africa? argentina, comcast, i mean, this is what people have to think about. >> right. >> they have to think a little broader. stop thinking about the fed. stop thinking about the s&p. start thinking about brian roberts and, again, you can say jim's a house man. have i ever been a house man for anyone? not even my own house for that matter people that know me well. >> that doesn't mean you won't pay attention to the emergency meeting in turkey today. >> if you are going to go nonsecular, you're not going to get a lot of money. look at the way egypt was at one point a great gateway to africa. if turkey wants to get serious for those of us who remember the initial turkey away from the army running the country and going to a less secular, that's what caused deval after deval after deval, if turkey wants to

go the wrong way, do you know what, you don't need to own yapi credit, but we have people come on our network and they say don't worry about emerging markets, they must be rich to say that because if we have individuals who are not worried about emerging markets, i feel bad for them. they should. they're reaching for yield the way people started reaching for subprime mortgage. we could reach for yield and be stupid. but i got to tell you are as dumb as plywood, no offense to louisiana pacific for making a remarkable turnaround if you invest in emerging markets. you saw the ads, is that what it is? you think you know what you're doing. i invested hundreds of millions of dollars and i did not know what i was doing and i was up for every hour except for three! trading into panic at night, trading into south africa, trading in finland, and you couldn't beat me? you couldn't beat me and now you're coming in and trying to make money, please. >> no cry babies today on the

emerging markets. >> you want to reach for yield, go to mars. they got big field. 5% on the mars bots. >> we'll run out of things to throw on the set. >> i get angry, if you want to lose money i got a million ways. take the seahawks and not the points! there, that's good. even up! when we come back -- >> richard sherman. >> cramer's "mad dash" if that were not mad enough as we count down to the opening bell. look at futures here and we'll walk you through the other news especially in retail, jcpenney and abercrombie. >> a good split, a new chairman and ceo split. how about sales! >> more "squawk" in just a moment. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families

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♪ oh, yeah ♪ a few minutes before the bell on a tuesday morning, let's get cramer's "mad dash" ahead of the market open, you got a couple of different things to look at. >> i find companies that do things this is my andy dufraim theme, get busy living or get busy dying. martin marietta is adding cement to their arsenal of aggregate which is stones and why do you do that because housing is coming back. you need to build roads, they've got the materials and they are adding cement. i like cx2. >> is it a residential,

commercial, infrastructure? >> all three, frankly all three. i've regarded it a little less residential than bulk in materials. this is a very good sign. these are companies saying things are getting better in this country they obviously haven't been watching us. >> durables, what explains durables? do you think it's weather? >> i think there's a lot of weather, the government shutdown if you listen to lockheed martin, things aren't that great, and alcoa they'll say aircraft is lumpy, but united technologies say it's a pause and they'll catch up this quarter. >> you were looking at cliffs briefly, casablanca taking a 5.2% stake. >> i thought they had very little value and iron ore had very little value because it's china, but a company said you ought to split foreign from domestic and you ought to do a dividend boost and a national limited partnership. and do you know what, i want to grow hair. come on, anything can happen, but, no. >> is this activism or suggestivism? >> i think it's in the

suggestivism. do you know what, remember that scene where judy garland just, like, says she hopes she can get back oz and all you got to do this is a ruby slipper play right back to kansas. you got to have some substance before you say listen, the old cliffs natural is worth a lot more. >> right. >> i mean, maybe cliffs naturals should buy a beer company because those companies are on fire. it's, like, cliffs natural, you know, brewed on the shores of iron filings in minnesota! >> cold filtered. we mentioned abercrombie & fitch, arthur martinez becoming nonexecutive chairman over mike jeffries who is still on the wall of shame. >> jeffries, good that they separated those. i mean, abercrombie did report a good quarter, but if you completely -- guide down, guide down, guide down, guide down, you will eventually beat your quarter although even jcpenney has found that a hard way to do things.

they need to separate if only because they had really bad gave nance. are you allowed to say someone didn't do that job of a company? >> i remember having covered him in chicago in the '90s, it was not a -- not a hall of fame. >> you are never allowed to say someone's mediocre because that would be saying, like, for instance, the cleveland browns are mediocre if you live in cleveland, it's all you got. >> the opening bell about four minutes away. "squawk on the street" will be right back.

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[ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs.

six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. you're watching cnbc "squawk on the street." live from the financial capital of the world. the opening bell's in about a minute. a lot going on. the final bernanke fed meeting today. we're going to get at&t and yahoo! tonight. a lot of earnings are already out. it's media day for super bowl xlviii. >> yeah. i have my -- my -- my friend eric grubman on the show tonight he's the operations guy. he's the guy when the power went down last year, let's just say he was the guy that had to scramble. >> let's hope something that exciting happens again. by the way, the yen back under 103 per the u.s. dollar which

has given people a little bit more strength in terms of equities. we're seeing futures higher. europe is hanging on to some green arrows, people are wondering if this is the end of the five-day selloff. >> you mentioned the yen and that's important and many of the companies that talk are victimized by the yen, anything that stabilizes the yen is good. >> a little bit more green than red today. down at the big board, norway's marine harvest producer of farm salmon celebrating its listing on the nyse. >> and they are hoping it will take a run at the oil companies. stat oil is very interested in the balkan. they've been clubbed. stat oil, listen to me. instead of paying high, pay low. >> at the nasdaq, net app the official data storage provider of the nfl and super bowl xlviii. you mentioned seagate earlier on, jim, we are seeing some tech companies with some numbers. >> seagate basically is telling you not to worry. there's a great lot on this conference call where someone

says are pcs bottoming and they go, do you know what, this could be the fifth bottom of pcs and company returns a lot of capital. company buys back a lot of capital. they've got a very good acquisition in the pipe, do you buy seagate right here, unequivocally. >> a couple of industrial manufacturers, danahur and air products are out and they guide below consensus. >> they are shrewd companies and know how to play the game. that's why danaher is not down. when i talk about a company that knows how to play the game, what i mean is illinois tool works. they'll report quarters and basically tell you, we'll underpromise and overdeliver. apple is doing oput, underpromising and overdelivering and that's how a stock goes down versus a stock going up. is it a game? i always debate with my friend

herb greenberg thestreet.com and it's what the analysts want and if you don't care what the analysts want and you are warren buffett, you don't play it but everyone else is exception to it with the exception of amazon, solar city and tesla and hopefully for the people at twitter. >> housing is going to get some attention today. d.r. horton up almost 6%, new orders up 4% despite higher rates and backlog up 20%, closings up 19 and average selling price up ten and they say the weekly sales pace in january's okay. we're seeing things like sherwin-williams getting some green today. >> yeah, i mean, look, one of the things about housing is that the companies themselves are doing fairly well. toll brothers got downgraded, you know, it was just a glancing blow. i'm noticing that k.b. -- it is k.b. financial, i thought it was k.b. home. what i see in this group is people believing, do you know what, this game isn't over yet, whirlpool, sherwin-williams and rota rotate.

but i have to tell you home depot and lowe's if you are buying them, you are buying them, frijs i got a note from my daughter's school, tulane. they are closed, why, polar vortex meaning snow. >> it's going to be cold in the south. >> we get snow there and shovels are moving if i saw lowe's up yesterday, the weather, hey, listen, we got to go to the weather channel, i don't know what they're doing. how are they playing stocks at that directv? because the weather is wreaking havoc or making money for depending upon companies. polar vortex. >> corning is the biggest loser. 29 cents beat by two cents but revenue is down almost 9%. they see more price declines, downturn in optical fiber sales, too. >> darn it. because they're trying to bring out some value there, you know, doing some changes and making big changes to the company but those are disappointing. that's just disappointing. >> some of apple suppliers, today. the qualcomms, the jabillss, micron, sandisk. >> qualcomm is a tef flown

stock. but qualcomm will come right back because they always do because the company really knows how to guide low and then beat. when i look at some of the players here, micron that will be down for a few minutes. apple has been -- sky works, let's see how sky works is doing, down a buck. you know, the apple breakdown game it's a legitimate game, but what you really should be thinking about here is other forms of tech that are doing quite well. telco equipment suppliers, cisco, microsoft doing quite well. microsoft might be a buy on the way down. it's interesting. it did quite well. micron a glancing blow, not bad. >> you mentioned how the analysts had turned on apple. oppenheimer, raymond james cuts, colin gillis said apple is lagging. are expectations now in line with guidance? >> i think the problem is that people are waiting for carl icahn to get angry. i mean, you know, this is -- all those analysts together, it's kind of like when stalin was

challenging the pope, how many divisions does the pope have. you're allowed to say that, that's a historical analogy. stalin said it, there were, like, 500 million people, he said it to people. but what i think's important here is carl icahn has the divisions, if carl icahn is unhappy and it's ridiculous, they should be buying big and then he goes on wapner's show, the whole dialogue changes as much as i like the analysts, they're not -- they have no divisions. >> right. >> icahn's got the divisions because he's got the firepower. >> you think this quarter gave icahn more ammunition? >> yes, especially when tim cook says we're in every day, we buy. no. that's one of the things -- i take a lot of executives to task in "get rich carefully", you know, when the stock is really down, go do what holmes does at wyndham, no one knows holmes, they ought to, he's in there buying the heck out of it when it's down because he recognizes

that the market's down a lot and nothing to do with the hotel chain. this is when cook should be saying, look, if i were cook, i know he's got a lot of people, i would tell my guy, cfo, 5 million shares and they'd hit and then 508 for 5 and they'd hit you and suddenly they'd be taking the stock. because they'd say, do you know what, the hold is a stone wall. >> yeah. does it make you -- does it make you nervous that the big leaders tend to be names that are restructuring, that are being called for change by activists, i'm looking at cliffs natural at the top of the business. >> get busy living or get busy dying. there are a lot of companies that are fed up with where their stocks are. there was a real good piece about companies standing there and buying back stock and getting aggressive when stocks goes down. cliffs natural has done nothing for ages. maybe you make noise and you get the stock up. there's a lot of companies like martin marietta materials, a

really fine company and no one really wanted to own them and suddenly they've becomes-to-nut maker of what you need when you build a note. look at caterpillar, a note by wells said cat's topped out and they are doing all the financial engintoering and they cost the number and they got busy living because they are tired of dying. they are fed up. >> up for a second day. >> yeah. >> basically helping support what we did have to work with yesterday to a large degree. >> do you know what is interesting about apple versus google. they wanted apple to do an acquisition, google does a lot of acquisitions and they don't nearly necessarily make any money per share, but we all like it. we all clap, oh, man they bought a smoke detector company, yes! that's what we need a better smoke detector and they buy google glass and an insurance company is going to reimburse you for google glass, oh, mime buying google! one company is loved and the other despised.

>> you saw the new frames? >> i'm going to get them because i want the frames. >> the frames called the bold, the curved, does that ring a bell, the thin and the split, at least two of those names are right out of blackberry. they cost $225 on top of the $1,500 you spend if you are invited to make a purchase. >> and himax technology downgraded by someone they make the key component for the glass. it's been a hot stock and it will probably get hot again. >> with the dow up 52 let's get over to courtney reagan who is on the floor for us today. >> what a difference a day makes, right? earlier this morning we saw the durable goods numbers come down 4.4% down. and we recovered and look at this we're opening up higher. the dow up by about 63 points here. the s&p 500 also creeping higher. traders watching a couple

different points. on the low side, the technical level that we're watching is 1776, on the high side it's 1791. right now we're right at about 1785. we'll see where we go here today. on a macro-focus what we are looking for is positioning of portfolios ahead of the state of the union address and the fed meeting. starts today. bernanke's last meeting as fed chairman. a lot of focus in the u.s. and around the world. if we look at these earnings reports, we've got good ones but look at the volatility index before we can get to that, again, what a difference a day makes as we turn things around volatility down as we see the market move higher. if we can move on to home builders the case-shiller index up 14% those prices. not bad. also d.r. horton putting out a really good report there. they're saying prices are up, closings are up. lots of good news out of the home builders as you can see here today, almost higher across the board for the entire sector and d.r. horton up more than 6%. autos, too, fundamental tenents

of the economy, homes and autos, ford record profits and north american sales turning up strong, giving profit sharing to employees $8,800 for 47,000 hourly employees for ford. we know the gm ceo will be the guest tonight at the state of the union, something we're all going to be focused throughout the day and toyota higher and they are shutting down some factories in japan. stabilization overseas overnight, both in china as they listen to what's going to happen here with the fed meeting and also brazil. stocks rebounding. the central markets around the world sort of calming fears as well in turkey and in argentina. things looking up. we'll keep things in focus and they've been mentioned in earnings reports. all of the currencies continue to be in fluctuating modes so that, of course, is going to impact outlooks going forward

companies keeping an eye on it and investors should be, too. carl, back to you. >> let's check in with rick santelli at the cme group in chicago. morning, rick. >> good morning, carl. a day made a difference in a logical fashion, you know, yesterday we actually saw yields go up after a 7% drop in new home sales but today the disappointing durable goods and revisions as you could see on the intraday chart for tens. but it wasn't only tens. bunds looked the same and gilds looked the same. i want to caution i always like to point out the nonseasonally adjusted as well as the numbers released which are seasonally adjusted and normally with durable goods it's, you know, yin and yang. if the numbers are good the nonceasally adjusted is usually not. today the headline number wasn't very good and the internals weren't very good but if you looked at nonseasonally adjusted, much better. just to put that out there. if we want to open a chart up for tens i think it's important

to keep scores i don't think it's possible for the price to taper, because we've got stimulus from various central banks but nonetheless, go back to may 1st the score's basically up 115 basis points from the roughly 160 low to current levels at 2 3/4 and on the downside of the score, well, the high yield's basically close to 3%, up 115, down 25. so, no matter how you slice it, many traders saying it's not acting like maybe we're going to get an increased taper, it's hard to get a gps but rates are significantly higher before it was a topic. foreign exchange, everybody wants to continue to monitor what is simply referred to as the carry trade, so the yen, of course, plays into that. let's look at the yen in various forms. if we look at the dollar yen, you can see starting on this chart starting in november there has been some reversal but from very lofty levels in favor of the dollar, but what i find fascinating is let's take a not

so good currency, okay? first look at the euro/yen and the not so good currencies the canadian dollar, i could have picked the aussie dollar, but canadian dollar versus the yen, you can see it is really getting drilled so we want to pay attention to all the intracurrency relationshipships because it gives you insights into the costs of funding various swaps. carl, back to you. >> all right, rick, thank you very much, rick santelli. when we come back former congressman barney frank what does he want to hear from the president in tonight's state of the union? "squawk on the street" will be right back. [ male announcer ] here at optionsxpress, our clients really seem

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chinese equity markets this morning helping further those gains but on the u.s. side, of course, it's these cold temperatures outside that's all anybody can talk about. we are watching west texas intermediate trading above $97 a barrel. in the meantime, speaking of those cold temps sending nat gas to $5.15 in the session overnight, of course, we are back below the $5 level right now but traders are saying they expect prices to remain high as long as demand continues to be strong and that will continue as long as the cold tonight as well. a quick touch on gold we are seeing it trade a little bit lower today but traders saying it's holding the 1255 support level and it's a wait-and-see mode right now and all eyes on fed chairman ben bernanke as he kicks off his last meeting today, carl, back to you. >> all right, jackie, thank you so much. jim, it's going to be the coldest it's been in chicago in five years today and you mentioned the weather around the country. this time it's the south's turn. they're going to get snow all across the south, in deep south

texas, georgia, the carolinas. it's always a factor, but it has been more of a factor arguably now. >> the real shortage is not natural gas or the storage issues it's actually propane which is amerigas partners, apu, it has a nice yield, i think it will have a real good quarter, it's not been the place to be propane, the country has been long propane for many years. now there's a shortage and that's the play. >> retail is the one thing they never run out of are excuses but when we get the next quarter's results they'll be saying january was cold, too. >> somebody downgraded vf corp the other day, eric wiseman's remarkable company north face the one thing people have to understand the order thing after you order cold coats you're supposed to start bringing in spring weather gear but there's probably been reorders for vf corp, does that mean you buy vf corp? i'm saying that over the last decade has been the fabulous play and it doesn't hurt that it's cold for them. >> one thing unnoticed today jcpenney aamending their

shareholder rights plan and lowering the trigger extending it down to 2017. >> sold to you. >> have a good time. >> knock yourself out. i would like to own jcpenney, you know, for a couple minutes, you know, sears a s and jcpenne and these -- >> constructive darwinism is what some say. tonight we'll get at&t and yahoo! along with the president speaking. a lot of the headlines all say that yahoo! that the hon moeymo is about to own. >> this is alibaba and 5.5 is the dividend yield and you won't get decline in at&t to speak of. >> you think the alibaba value may be pulled in here by china? >> no, by the time it happens it will be $200 billion and animal spirits will be back and you buy yahoo!. in it's down on the quarter it's meant absolutely nothing.

goog was down 35 points at one point. i check around, why is that? because people are checking around. there's nothing. yesterday was a total fear game. i like fear because that comes at the tail end. but google is coming back up and yahoo! will be a function of, yeah, i really want to own alibaba and it's the way to play it. the stock is down a quick five points is probably a buy here. >> you know, we're up 74 on the dow. s&p 1788. we saw an open like this yesterday that faded very quickly. is today any different? >> it's case by case. i'm hearing why is dupont not doing better, it's natural gas. i want to go back to apple. you would have thought -- there was a time when apple down 44 two have destroyed things. maybe the market's a little stronger than we think. apple is being ignored. this is one of the largest companies in the world. >> and still, i mean, up until this morning up 25% since september. >> that's a good point.

>> had a nice run, right? >> it's had a good run. yesterday there was a big raid on facebook because of worries about twitter. that's come right back. the market doesn't have a lot of memory day to day and i think people ascribe on a given day, a given day is a skirmish and a longer battle is are people going toward the bond market equivalents and recession, and is the recession fears begins, and you look at the federal government pulling back stimulus, it would be interesting to see -- a minimum wage is not the government. that's the government mandating. all the great companies that i follow, costco, starbucks, they pay much more than the minimum wage. chipotle. >> that's one reason that the president will be appearing at a costco after the address. >> it wouldn't have been so wrong to start at a costco and work your way out, that would be a great thing to do if i wanted to be retail like my parents and the next generation i would love to work at costco if i decided to repeat their good work. >> look for the president to

mention things like that when he goes to merrill lynch. >> the president's there. are they in that kind of mode? >> let's -- we'll find out. we'll see what happens tomorrow. in the meantime here's what's coming up next on "squawk on the street" -- coming up, forget about the polar vortex. how about a polar plunge? wait, that sounds just as bad. let's stick with jim cramer and his 6 stocks in 60 seconds. that will keep your portfolio hot. "squawk on the street" will be right back. i always say be the man with the plan but with less energy, moodiness, and a low sex drive, i had to do something. i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron the only underarm low t treatment that can restore t levels to normal

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on tv, online or streaming on the nbc sports live extra app. beginning february 6th, experience the winter games everywhere. welcome to what's next. comcast nbcuniversal time for six in 60, six stocks in 60 seconds with jim. we'll start with tesla. >> i feel bad for tim cook they are about to sell millions of iphones, it doesn't matter, tesla sold a couple of cars in beijing. buy a tesla. >> under armour. >> panel running for the nfl and i think he's doing a great thing. it's a very cheap stock when it comes to long-term growth. >> pacific crest likes sales force. >> the selling stops and you come out and you recommend gilead and you recommend sales force, this is an examples.

>> whole foods. >> this is setting up for disappointment for whole foods. i think mackey and mr. robb are doing a great job but there's a lot of competition in that business. could be a right level here. >> take-two could beat. >> i think the stock goes to 20. >> and finally we got to get used to the ticket aal. >> american airline, this is the beginning of the next leg of the growth of american air. i want people owning this stock. >> what's coming up tonight on "mad dash"? >> i'll watch you on the state of the union. i'm not going to miss it, i may have to watch it after tending bar. i've been tending bar at night. can you imagine that? and the modelo is selling like hotcakes. i'll bring in cliffs natural. >> cold filtered. >> brewed on the shores of iron filings. scott wine, polaris is a remarkable company and they are selling stuff you don't need and they are doing well. eric grubman, naval submariner,

partner at goldman, the man who saved constellation at baltimore gas and electric, eric grubman who was the operations guy at the nfl, let's hear about the big game. >> i'll break of your seahawks bias before sunday. >> it will be hard. i wont do my richard sherman imitation as much as he likes, coleman is my hero he's spiked duracell's orders. >> we'll see you tonight, jim. >> thank you. breaking news on consumer confidence at the top of the hour and apple ceo john scully on those numbers. back in a minute. you can separate runway ridiculousness... from fashion that flies off the shelves. and you...rent from national. because only national lets you choose any car in the aisle... and go. and only national is ranked highest in car rental customer satisfaction by j.d. power. (natalie) ooooh, i like your style. (vo) so do we, business pro. so do we.

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our ambition is to always realize yours. welcome back to "squawk on the street." january read on consumer confidence surprises to the upside 80.7. 80.7. give you some context, 80.7 would be the best number going back to august when we had 81.8. also january read on richmond fed manufacturing index. comes in at 12. the last two reads have been at 13. nothing surprising there. sara, back to you. >> all right, rick, some mixed data today on the economy. markets may be struggling a bit into 2014 but some of wall

street's top experts are getting more optimistic with stocks. our senior economics reporter steve liesman is here with the results of the new cnbc fed survey, what does it show? >> it says they expect to taper and a $10 billion taper and they expect the fed to taper throughout the year. let's look at the outlook for stocks and what you can see they've upped their forecast. here is the june 2014 forecast. it was in our last survey 1814. now it's up to 1844. how about by the end of the year? they're up to 1857, they were at 1857 and now they're up if you can zoom in on the new number for the end of the year it is 1913. a pretty substantial increase for this group which you can see has been very downbeat on stocks throughout for 2014. i want to show you how bad this group has been. 45 economists, strategists, fund managers, these with their predictions for 2013 for the end of the year so in our january survey, they predicted it would end the year at 1547. in july they thought we'd end

the year at 1691. in december, finally getting a little bit of religion about a massive increase in the stock market. they predict the 1773, but look where we ended up and we end up at 1848. right now they're a little closer to here, but this group does a pretty good job forecasting the economy, the fed and interest rates. not so good when it comes to predicting the stock market which, of course, they have to do that as part of their prediction of the economy. on the ten-year yield what they looked at, 275 and in june 2014 look for 308 and 337 by the end of the year. moving on and looking at the fed funds rate forecast, do we have that there? ending the year at 72 basis points. there you go, guys. thank you very much. the next screen we'll look at is, ta-dah, the fed's expected impact of tapering on bonds and stocks. look at bonds first, 56% think tapering will result in higher bond yields. 35% say no effect.

7% say lower. moving on, look at the effect of stocks, 7% say higher stock values. 54% say no effect. and 35% say it will move lower. later in the day in "power lunch" we'll have what this group looks for economic growth and despite the numbers we've had the last couple days which have kind of been on the weak side, this group i'll tell you is looking for stronger growth in the year ahead. back to you. >> thank you very much, steve liesman back at hq. apple is trading sharply lower as you probably know by now despite a first quarter earnings beat, the company's outlook disappointed and the number of iphones fell short of estimates. first on cnbc is former apple ceo john sculley. it's great to see you, thank you for coming by. >> thank you, carl. >> are you disappointed? >> well, i'm just scrice edsurpt the stock reacted the way it did. it way overreacted. the cause was pretty much explained by tim cook and that is in north america the carriers

changed their policy and you couldn't turn your phone in before the two-year contract was up. it hurt samsung as well. the real story in my mind is tim cook still confirmed that they're going to have some big product announcements this year and the one i'm watching for is in mobile payments because i think that's where apple could get a huge strategic advantage over paypal, even amazon, paypal, for example, has about 140 registered users. amazon has about 215 million. well, there's almost 600 million registered users on passbook. you add in touch i.d. and beacon the new technology in stores that enables you to build a complete end-to-end system this is really apple's sweet spot. >> you think it will do for payment what itunes did for music and media? >> it has that potential. >> can they do it organically or does it involve buying somebody else? >> well, you know, if you'd asked me that question about six months ago, i would have said, why doesn't apple take all that

cash and buy ebay, but as you look at it, and by the way i still think it's a good idea but i don't think they'll do it. but you look at what they have and they've got the best user experience, this will be a mobile play and if you add in beacon and passbook's registered users, they have a real chance to have a blowout opportunity. >> but they need a new ipad and when was the last time, 2010, the last time it introduced a new category, a new product category? one of the analysts asked about this on the call yesterday the innovation cycle at apple. tim cook said it's never been better. john sculley, is it what it used to be? >> i think it's realistic to expect and i don't have any inside information, sara, but i think they'll probably have a wearables product, maybe an iwatch in the september time frame. people have been speculating about it for a long time. it was a hot category at ces this year. but i'm far more interested in the opportunity for them in mobile payments because i look at that as much of a product innovation as anything they could do in hardware.

>> i got to disagree with you on the quarter in the sense that, of course, it wasn't a bad quarter. biggest revenue from a tech company ever. and enormously profitable, about the it was an awful quarter if you are trying to look at apple as a growth stock. nothing is growing except the ipad and it's not growing that much by historical standards. about 14%, 15% and also emerging markets were pretty good but the domestic market was not good. and when you look at what that probably means, we were expecting china mobile to be this big catalyst, but that's going to take a ramp and at the same time apple's main base in north america appears to be, well, we don't know if it's exactly contracting long term but we know the carriers are able to push back on subsidies not by paying less but by pushing out their need to pay them. so, for me, i've got a lot of questions about apple. from an investment perspective, not from a company health perspective or from how it's managed perspective but from an investment perspective.

new products probably aren't going to be the cure-all a lot of people are saying because if it's a new category, it will take a long time to ramp. if it's tv, low volume, high profit. will any of that move the needle in even the medium term? >> well, those are all really good observations, but apple doesn't trade like a growth stock. it trades eight times cash. and if you look at -- >> exactly. >> that's what a lot of people are asking. >> they were saying you should group it with general mills. >> china mobile is still a story yet to unfold. china mobile's moving into, you know, lte which means 4g capability. they're only in 16 cities. they're going to go to 300 this year. so, we haven't even begun to see the impact. look at india, apple wasn't even a player in the market in india a year ago, now that india's rolled out 3g, not 4g, apple's the number two selling brand there with the iphone. i think there's still a good story. but apple's not a high-growth

company. it's so large. how can you be a true growth stock all the time? but you can have breakout products. and i'll bet you that apple recovers and then i'll bet you it goes way beyond where it's been once the end of 2014 is here. i think -- >> that's a pretty safe bet. people's expectations on the investment side are what -- >> and speaking of expectations, i wonder if you think there's any work they have to do just on the cosmetics of dealing with the street. you've read parts of the transcript from last night, it was at times openly hostile and there's a degree of skill in managing analysts, done you think? >> probably. but it's never something that, you know, in my era we didn't have cable television so we didn't have a lot of things so it was a lot easier. so, i can't really comment on that. but i do think that apple is so much in the spotlight, carl, that they have to watch every word they say because any misstatement and it gets -- has

huge ramifications. >> not to mention managing activist investors like carl icahn. the amount of cash they are sitting on is mind-boggling. >> no one has cash like apple does and carl is pushing, they've said they're going to, what, buy $60 billion worth of stock back. he'd like to see them buy higher numbers. we'll just have to see. >> thanks for coming in. it's certainly interesting that the dow is hanging on to almost a triple digit gain even though apple is down 44. we'll see you later. let's get a market flash. >> polapolaris they were helped strong sales of its motorcycles and its offered vehicles but that's not what investors are focusing on. instead they are pocusing on the fact that the company guided 2014 sales and profits below street forecasts. and a quick programming note scott wine will be jim cramer's guest on "mad money" 6:00 p.m. right here on cnbc. sara? >> all right, sheila, thanks

very much. up next on "squawk on the street," bitcoin facing new york regulators today a day after the arrest of one of the currency's chief advocates. will bitcoin be able to prove itself? we'll talk to one of new york's top financial regulators when "squawk on the street" returns. can you start tomorrow? yes sir. alright. let's share the news tomorrow. today we failrly busy. tomorrow we're booked solid. we close on the house tomorrow. i want one of these opened up. because tomorow we go live... it's a day full of promise. and often, that day arrives by train. big day today? even bigger one tomorrow. when csx trains move forward, so does the rest of the economy. csx. how tomorrow moves. in today's market, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected.

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a bet of a black eye for bitcoin the currency suffered a setback when u.s. prosecutors charged two bitcoin exchange operators with money laundering before today's public hearing of bitcoin by new york regulators and mary thompson has more. >> one of those charged in the $1 million money laundering scheme is 24-year-old charlie shrem who was arrested at new york's jfk airport is a bitcoin entrepreneur, ceo of the bitcoin exchange bit interest and vice chairman of the advocacy group the bitcoin foundation. cnbc interviewed him last april at a nightclub that he'd investing in that was accepted bitcoin. >> with bitcoin appointments are irreversible, they are instant, they are private. the fee is less than 1% to accept it as opposed to 5% on credit card fee and we get their money the next day in our bank account in dollars. no currency risk at all. it's cash with wings. >> now, according to charges

filed by u.s. attorneys, he knowingly helped an underground bitcoin exchange operated by 52-year-old richard fahaaea, he funneled bitcoins to people looking to buy drugs on the now closed website silk road, which only accepted bitcoin for the drug and other illicit services it sold online. through his company bit interest he sold the bitcoins who sold them to bitcoin customers and shrem allegedly bought drugs on silk road and failed to alert the feds. and now offline bit interest had two high-probackers, and in a statement issued yesterday the winklevoss twins said when we invested in bitcoin they would abide by all laws and we'll be

there about any comments about shrem. >> all right, mary, thanks. talking first to cnbc here is new york stop's financial regulator benjamin laska, he's launching the bitcoin earnings today. the two high profile arrests come just in time for your hearings. i take it, it wasn't planned. >> we don't coordinate those things. >> but it increases attention and it's the sort of thing you'll look into today. >> these are obviously very serious charges and we don't want to minimize them being involved in narco trafficking and money laundering is really serious stuff and people need to know that if they get involved in it with bitcoin or otherwise, law enforcement's going to come down on them. the other side of that is can bitcoin become and evolve something that's not just a place for drug transactions and money laundering and bitcoin i think as we have continued to study it potentially holds a lot of promise and you could see a lot of changes in technology,

maybe more evolution of bitcoin or other virtual currencies and you could see some real improvements in our payment systems. >> as i talked to you a number of times over the last few months and i think this is the most, i don't know, bullish i want to say or at least this is the strongest you've come out and said this could be a legitimate, mainstream form of payments. >> look, i think the jury's out and that's the point of our hearings. we're keeping an open mind. at the same time the charges yesterday i think do hang a cloud over bitcoin and virtual currencies and we take it obviously very seriously. if this is a place that just makes money laundering easy and is a place where people can do things in the dark, that's a huge problem. at the same time, look, drug dealers use cell phones, too and we don't say, we shouldn't have cell phones. >> they use cash, too. >> terrorists look computers. we don't say all computers are bad. i think the question is, how is bitcoin, how are virtual currencies evolving. can they improve our payment systems. can they improve a lot of

different things down the road without -- and can we at the same time put in the right kind of guardrails to prevent serious money laundering from going on without anyone knowing. >> interesting the panel and the witnesses here, barry silberg from second market and the winklevoss twins will be there. what do they need to say? >> i've read their written testimony in preparation for today and i think they're all saying they need real regulation. and so they're embracing regulation. they don't want to it be overbearing like most industries we regulate. at the same time i think they need to step up and say we need to have these guidelines in place. we have regulators looking at us. we're no longer going to be this fledgling technology where no one was watching, everyone is watching, the department of financial services is watching, treasury is watching, and if we can get to that system where the technology's allowed to continue to flourish, companies are

allowed, we want them here in new york, at the same time, we want to make sure that we have protections in place to prevent the bad stuff. >> marc andreessen came out with an interesting op-ed in "the new york times" recently in support of bitcoin. one thing i found interesting he said it protects against credit card fraud. is that true? especially givenving we've been seeing lately with target and some of the other breaches. >> again, as things develop that is potentially true. because there's not a third party intermediary sitting on someone's personal information that could then be stolen. the way bitcoin works is it's peer to peer and the transactions don't take your personal data, there's an algorithm and a key that allows you to make those transactions peer to peer without giving up your personal data and it's secure in that way. again, the technology's go to continue to develop. it's got to become more ubiquitous, people have to use it more and we'll have to see if that happens. but it has repo ten shall, at the same time, we do have to crack down on the money laundering. >> he said it's safer than

diamonds and gold, too, in terms of tracking it. ben lawski, good look with the hearings. we'll check in with you and mary thompson there as well, ben lawsky holding bitcoin hearings starting today. the company known for its risque super bowl ads doing something different, godaddy is revealing its commercial right after the break, our break, and we'll talk to the company ceo in a moment. hi, i'm terry and i have diabetic nerve pain.

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web hosting giant godaddy is usually known for its more risque super bowl ads but they're doing something a little bit different this year. have a look.

>> good morning! ♪ it's a wondersous day the flowers bloom and the animals play the sun peeks out and i need to shout in a happen happen happy way ♪ ♪ it's a wondersous simply wondrous day ♪ >> it's go time. ♪ it's a beautious wonderful day ♪ >> for more on this campaign this year let's bring in blake irving, the ceo of godaddy, it's still provocative, we saw shirtless men running around but it wasn't the nerd kiss that lasted 20 minutes or another sexual ad that godaddy has done in the past. >> no. it's a very different ad for us. you know, i was just listening to it, i couldn't see it while you were playing it and just made me smile. it represents the customer that we represent. the small business, it's trying

to figure out how to be successful. our vision at the company is to help little guys easily start confidently grow and successfully run their venture regardless of what that venture is and we get an opportunity to show that in a funny and edgy and entertaining way. and it's different than what we've done in the past. but honestly, when you have 80% brand recognition, you really need to describe what you do to our customers. we don't need to get attention anymore. we need to have folks understand what we do and who we do it for. >> blake, it's funny you say that, obviously you're so connected to the super bowl and you've leveraged that platform for so many years. >> yeah. >> is there anything just from a media standpoint that could do to shake your enthusiasm for that particular game? >> you know, the size of the audience, carl, is so darn big that there's really no better opportunity certainly in the united states where you can get a message in front of an audience that's captive, i mean, a lot of people watch the super bowl at halftime just for the

commercials. i know folks that watch it just for the commercials, you know, if you're alienated because your team didn't make it, you might be watching and be entertained by the commercials more than you're entertained by the game itself. it does a good job for us and we track our metrics very, very carefully and frankly it continues to pay off. it's our tenth year in the super bowl and danica's 13th appearance and it's a big deal for us. >> how do you define success? can you measure the sales you get? with this sort of ad with the strategy toward small business what exactly are you hoping to accomplish? >> we're hoping that folks understand what we do and who we do it for. we do have a lot of measurement and metrics that we use to determine whether we're successful or not. it's not a direct ad where we expect sales to go up the next day. we expect this to have a great brand reflection and we know throughout the year that folks refer to the super bowl as the thing that made them aware that godaddy was there for them to get a domain name, to get an

online presence to help their business get found and we track them very carefully. now, this year is a departure from the years past where we've talked a lot about domains and getting a domain. this year we've introduced the concept of get found which we actually launched yesterday. that enables a business to get information about their business on the godaddy website and find out where they're listed across the internet regardless of whether it's google or yahoo! or yelp or open table. it's a fantastic service that helps that little person that's in a spray tanning business or a restaurant get found online which is really what they want to do. >> you mentioned, blake, obviously your clientele are very small business owners. not to change the subject, but we do have a state of the union address tonight where they're going to talk about things a hike in the minimum wage, health care costs, increased regulation, increased taxes. does your client base feel that and where do they all think we're going? >> look, the very small business in america and, you know, really

if you took a demographic profile of businesses, 85% of businesses in the u.s. are five people or less and 75% of businesses are sole proprietorships, and because of that 75% are working for themselves and not employing folks. for the other very small businesses, it's a meaningful difference. they want their employees to have a successful and great life. i have not heard a lot of pushback from our customers on raising the minimum wage federally. and frankly, you know, anything that affects their economics they take very, very seriously. and the folks that i've talked to in the business are those that think that, you know, regulation in any way that slows their ability to grow their business is bad for them. generally i think there's been pretty broad support for a hike in the minimum wage that's reasonable, that enables them to continue to grow their business and get quality employees. >> all right, well, a lot of the states have been going at it alone.

thanks for joining us on small business on the super bowl. good luck with the new ad rollout, blake. thanks for joining us on "squawk on the street." >> going straight to the gym after this. >> not to the spray tan booth. when we come back, former congressman barney franks weigh in on tonight's state of the union and let's find out what he wants to hear from president. the dow now up 58. she loves a lot of the same things you do. it's what you love about her. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right.

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and one hour into trading here are the stories we're talking about, 7:30 on the west coast and 10:30 on wall street. the conference boards consumer confidence coming in better than expected to 80.7 and that's a five-month high. pfizer is the biggest gainer on the dow up almost 3%. the drugmaker beating street forecasts with its fourth quarter results helped by sales of new treatments for cancer, nerve pain and arthritis. and seagate technology the biggest loser on the s&p 500 right now down 11%. the maker of hard disk drives posting weaker-than-expected quarterly results hurt by slowing sales in its cloud business. the president will speak to the nation tonight to set the year's agenda for his administration but as last year's goals remain stymied by a divided capital, what can we expect from the state of the union address? let's bring in barney frank a

cnbc contributor. congressman, good morning, good to see you again. >> thank you. >> a lot of discussion about what he's going to talk about. raising the minimum wage, early childhood education but there's also some reports that say he's going to try to focus less on academic terms like income inequality, that that's not really what's enticing voters right now. what do you expect? >> well, i haven't been there for a while, so my expectations are really second hand. my expectations depend on what people in your business do a very good job of telling us. i'm sure he's going to talk again about immigration especially since it is clear now that the republicans, the mainstream republicans, the responsible ones, are feeling a lot of pressure from the business community but also because of concern about not ever getting any significant hispanic vote to move for some legal status for people who are here without legal status, so i'm sure he's going to follow up on that. i doubt that he's going to talk about gun control.

frankly those colorado special elections were pretty grim news. i hope he's going to talk about economic inequality and as you say correctly not in academic terms but in real terms. but here's what i'm afraid we'll hear is half of a good argument. the good argument is for mobilizing national policy to reduce inequality. you need inequality in a capitalist system but you can get too much of it frankly even allen green pan and ben bernanke have acknowledged republican appointees to head the fed, it can depress overall consumption in the economy and you get to the point that it's so locked in that mobility is restricted for people. but the problem is this, doing a good job of reducing inequality to a functional level -- >> right. >> -- is going to require some federal resources. here's what i want the president to say. i'm going to try to mobilize policy to reduce inequality and i'm going to pay for it by reducing america's substantially excessive worldwide military

intervention, you know, we just lost unemployment benefit extensions because we couldn't pay for it. well, we're going to pay for it many times over if we stay in afghanistan for ten more years doing very little more than what we've done in the last few. >> there's been a big discussion today about the degree to which he'll work and will not work with congress. finally get a ryan spending plan and finally getting movement on a farm bill and now is the time when you'll go an tag gones in tick and executive order on congress, does that make sense to you? >> there's nothing antagonistic about executive orders. i'm very proud of one thing when each party was asked to vote about members of the other, i was in the top five as a bipartisan and a partisan. there's some issues where it's legitimate in a democracy to draw the line and take it to the voters to decide and others where you're compromised. you have to do both. if you cannot arguably strongly

without it becoming personal and embittering and work with them on another. using executive orders, you know, what's paradoxical to me for a long time the republicans because they had done better with the presidency than the congress were the advocates of strong executive order, the unified presidency they talked about. i think it's entirely legitimate for the president to use his authority where he has and then also work with congress where he doesn't. again, the key is not to let the disputes become so vitriolic that they interfere with the cooperation. >> how does he reenergize himself, his presidency and the party? more than half of americans according to the latest poll, nbc/"wall street journal" disapprove of the president's job performance. they say midterm elections for the democrats later this year. how does he excite people again? >> well, i don't know, frankly, i'll be honest with you, identify was always a better

inside politician than outside. i think events are going to affect that. look, the problem was, and i guess i'll give you this answer. clearly he was doing very well. democrats were doing very well until the screwups with the health care bill. >> right. >> i think a lot, you know, people exaggerate the extent to which we who are politicians can affect things. one of my favorite quotes is from harold mcmillan the former prime minister of england and as he was leaving someone asked him, well, in your judgment, in your experience, prime minister, as he then was called, what are the most important things that shape the political opinion? and he said, events, dear boy, events. i think the actual working of the health care bill will have a major effect. plus the economy. the economy does appear to be getting better. you just reported the good news in the confidence index. and i think that that's probably what's going to shape public

opinion more than strategies. strategies rarely work. here's one other issue that could be bad for the country and bad for the democrats and that's the republican threat to kind of hold up on the debt limit. i want to make one thing very clear about the debt limit. john boehner voted to put more on the debt on there when we were both in congress than i did. the notion that people that voted for the war in iraq and the war in afghanistan and the big tax cuts that somehow we're doing them a favor by voting to pay the debts that those incurred is crazy. so, i think one of the dangers for the republicans is that their more extreme wing will start monkeying with the debt limit again and put them back into the position of irresponsible. otherwise how the health care plan works out and what happens in the economy are going to determine that. >> yeah, obviously that's something we're trying to track as closely as we can and something the president i'm sure you'll agree will have to answer for tonight. congressman, we'll see what he says. thanks very much for your time. >> you're welcome. >> congressman barney frank joining us to talk aboutn't

tonight's coverage. the coverage begins 9:00 p.m. eastern time with kelly evans and myself and be sure to tune in. >> it will be a late night for you, mr. carl. coming up on "squawk on the street" we'll get the republican view on tonight's state of the union and bob corker will talk to us later and we'll talk later with robert shiller about this morning's results, what's really ahead for the housing market. find out when "squawk on the street" comes back. mine was earned in korea in 1953. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy.

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welcome back to "squawk on the street," the market flash on cliffs natural resources.

check out the stock is moving higher on news that hedge fund capital casa blanca capital has taken a stake in the iron ore producer and calling on the company to double its dividend and convert usa assets to a national partnership and spin off assets and the chairman and founder donald drapkin will be live on "fast money halftime report" at noon eastern on cnbc. the rise of the activist investor. the latest case-shiller report showing double digit gains in the 10 and 20-city composites year over year but for november the two composite posts month over month declines for the first time since november 2012 and first on nbc is robert shiller, nobel laureate and professor of economics at yale university. good to see you, first of all on home prices overall we've seen substantial gains in home prices across the united states.

is that going to be set to continue into this year? >> i think it will continue. but likely attenuated. if you look at the cme futures market they're predicting only a little over 20% increase out to 2018. i think that's a reasonable forecast. it also corresponds to the forecast i got from a survey of home buyers who said, that was last may, and it said that they were expecting 4% a year for the next 10 years. so, those are reasonable forecasts i think right now. >> so, let's talk about the knock-on effects. we've seen household equity home prices go up. how much is that going to do to consumer spending, to consumer confidence, and the overall economy? >> well, you know, in our research on the wealth effect from housing, we find that the housing wealth effect is even stronger than the stock market wealth effect. that's because it's dispersed

among so many people, a large population of the people own a house. it should have a positive impact on the economy. >> what about the federal reserve that the fed is set to taper or scale back the massive stimulus? will that have an impact on the recovering housing market that we've seen and specifically on the gain in home prices? >> yeah. i think it substantially already had its impact. when they first announced qe-3 we saw a jump in interest rates. mortgage rates have gone up a lot since a year ago. and that's another reason to think that there will likely be a slowing in home price increases in the coming year. but i still think they'll be up in the coming year. >> what about the stock market? i know you've done a lot of work on this idea of bubbles and what the stock market has been doing. how does it look to you in terms of valuations right now? we're not too far off from record highs. >> well, i have a ratio called the k-ratio which is real price divided by ten-year average real

earnings and that has been quite high, but not anything like a record high. so, overpricing of the market would be priced relative to earnings. but earnings have gone up a lot. so, the market is high, but not record high. so, i still think that one could hang in there with a stock market investment right now. it still has a positive potential. >> hey, robert, back to the index, i can't help but notice you're in phoenix which looks like it's doing pretty good if you read the release but, of course, these are november numbers. there's a lot more talk now about sales coming in. inventory going up. prices lagging. how much of that are you seeing anecdotally and is phoenix, for instance, a canary for where we're all headed? >> well, i've been in phoenix for about eight hours. >> so, you have a complete handle on the situation? >> i remember, though, when i was in phoenix in 2006, i -- my cabdriver wanted to talk about housing. i could listen in, everyone was

talking about housing. so, we're not there yet -- well, maybe we're getting back. >> yeah, it's a concern. i mean, as is the concern about cash buyers, robert, and the degree to which they're holding up the market and once the market gets to a certain level do they pull the rug out from under us, we continue to talk about it every month, but where do you see the dynamic right now? >> that's the real puzzle there's no statistical answer because we've never seen this kind of surge in investor interest in housing. even during the peak months of the boom, it wasn't this strong. but there are other things happening. the nar and the 2013 home buyer survey found that a large fraction of home buyers in 2013 were married couples. it was a higher fraction than before. so, there are other elements of demand for homes that might be stable. >> all right, bob schiller, always good to check in with you. thanks for joining us on today's housing numbers on the case-shiller report and also on the stock market.

when we come back ford having what the company calls one of its best years ever reporting a $3 billion quarterly profit, we'll talk to the ford cfo about the automaker's results and what's ahead for the year later on. the dow's up 89. and we're back after a break. i need proof of insurance. that's my geico digital insurance id card - gots all my pertinents on it and such. works for me. turn to the camera. ah, actually i think my eyes might ha... next! digital insurance id cards. just a tap away on the geico app. could save you fifteen percent or more on car insurance. everybody knows that. well, did you know that when a tree falls in the forest and no one's around, it does make a sound? ohhh...ugh. geico. little help here.

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group and check in with rick santelli. a very cold chicago for the santelli exchange, rick? >> we can take cold in the windy city. what we can't take is this ebbing and flowing of growth, lack of growth, and the questionable stops, starts, fits, starts that we see. yesterday down 7% on new home sales. listen, i understand that it is cold and there are weather factors and there are seasonal adjustments to these numbers that probably aren't exactly in sync anyway and then you toss in cold weather. remember, some of these seasonal adjustments were designed for an economy or a global economy or domestic economy that really hasn't existed probably since the credit crisis. and today's numbers on durable

goods, just to be fair, the nonseasonably adjusted number look much better than the other. but that prince brings us to th. what are we agonizing over? five years after a crisis, 60 something months after zero interest rate policy t in the u.s. that the u.s. is spearheaded many of these programs. whether it's bailouts, stimulus, quantitative easing. and even though many, if they watch the emerging markets last week and part of this week kind of unravel to some extent, at least in a tight time frame, the issue then becomes why. and will it continue? many of the traders i talked to just didn't buy it, anything to do with the taper. they say it's too small. i disagree. i think just like in may when we just started bringing taper into the vernacular we saw a major adjustment. markets like to do things early and big. that reflect the emerging markets as we shift it into 2014. and outflows in both their debt and equities that's been going on for much of the end of 201.

now add in what's going on with chip that banking system and don't dismiss that because what's going on there really does underscore, that slashing liquidity, getting in areas that aren't necessarily needing it and not getting into areas that really need it, that there's a lot of dislocations. and there's a lot of ingesters, globally and nep china, trying to get the 12%, 14% returns and getting them in the shadow banking system. what we need to talk about are relatives. no, not trying to compare that uncle that never goes open to the liquidity programs but relative value, relative costs, relative benefits. when you have a crisis and you do things that i don't personally agree with. then i guess the costs are worth it. as you move into the five-year sector and look at china who may be where we were several years ago, all of a sudden as you look at potentially five years, six years, who knows, look at the depression. i'll tell you, what if you look at the late '30 s not a lot really change. it was the advent of some of the

turmoil in europe. what am i getting at here is we really need to be more honest. i think the markets are waking up to this. it can't go on forever. the costs, well, you you though, how many times have we heard that ben bernanke and paulson saved us. maybe they saved us if this all goes away in two or three years. if it goes on much longer, they don't save us. they clipped upside growth for bottom side guarantees. the variance i talked about yesterday is going to be the global growth rates as they get smaller. maybe there will be the end of cotas tro sfi but there aren't going to be ticker tape parades for giant economic horsepower. back to you. >> something to keep in mind as we look to fed chief ben bernanke's last fed meeting tomorrow. always great, rick santelli, with the santelli exchange. coming up next, why financial markets could be to blame for the wealth gap here in the united states. more on that when we come back. [ male announcer ] the new new york is open.

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while reducing emissions by up to 60%. energy lives here. ♪ welcome back to "squawk on the street." with are watching shares of rent a center hitting a two-year low today. the company reported weaker than expected forth quarter sales and profits. the reason, higher operating costs in the domestic market. that stock is down more than 18%

today. in fact, it's one of the biggest losers on the nasdaq. carl? >> sheila, thank you. it's no se ze correct there's a stark divide between class necessary this country. could the financial markets be one of the reasons for the division? robert frank is back at hq with more on that question. >> good morning, carl. when you look at the growing gap between the rich and rest you're looking at two separate economic forces. the first is stagnation or slow growth at the bottom. you see the bottom and median growing about 25% since the 1960s. so they got richer but not as fast as the rich got richer. you can see here the top 5% is up 60%. but really it's a small group of super gainers that are really drive that 5% and even the 1%. let me show you a chart now showing the 1%. here's the 1% on the bottom. that's the 1%. this is the point 0.01%, those small super gainers, they

account for much of the growth and inequality. their wealth is driven by stocks. now, if you look at stocks, when stocks go higher, inequality go higher. when stock falls, inequality falls. there are two distinct drivers of inequality. the bottom is not growing faster because lower skills and technology driven economy. lower union power, family breakdown. there's a high correlation now between marriage and wealth. they have less stock in the market. now, the high end, that's really a tale of stock market wealth. top 10% holding 80% of stocks and they are the winners in the global economy. the top 0.1% made half of all capital gains. when everyone agrees we should increase in equality for the bottom, shrinking broader would take a major decline in stocks. that doesn't make anyone wealthier. back to you. >> interesting. not only the figures but the chart where you can barely see where the middle has seen their income go. thank you for that. >> thank you. all fodder for the president

tonight when we speaks about income inequality in the state of the union. the market finally for the first time in six days have s. having sustained green arrows. even though apple, down some 40 some odd bucks puff stocks in the nasdaq doing okay. >> nasdaq is doing all right. apple is having its worst day of the year. >> of the year. >> when you talk about the apple numbers, just unbelievable giving up on market cap of $32 billion. apple plunged. but, yeah, the social stocks, facebook set to report results later this week and some of the other players have been holding the nasdaq higher. overseas, it was calm. that's been a keogh sgloe yen coming in under 103. >> the yen going back to weakening ways. the question is will the calm stay in emerging markets. overnight a rate increase from india. that went a long way. emergency meeting from turkey as well. >> also impressive action among the homebuilders today.

d.r. horton is the single biggest gainer. up almost 10%. all the metrics were higher. backlog, average price, closings, new orders p. they said the selling pace was pretty good into the month of january. that's leading to strength from the vulcans, pultes and so forth. >> well for the housing market. >> even as interest rates have come in a bit, too. >> yeah. >> for the time being if you're just joining us this morning, here's what you missed. welcome to "squawk on the street." here's what's happened so far. >> emerging market economies maybe account for 10%. s&p 500 earnings. if you throw in china, maybe close to 15%. it's not inissue that they can dramatically affect the big picture. >> came out of 201 wi3 with a se of euphoria. the emerging markets and what's going on in emerging markets right now. let's pull back a little bit. >> what they're saying is, you know, we don't care about your

expectations, analysts. we're doing this for the average person who owns the stock of apple. the average person who owns the stock of apple just totally takes their queue from how the stock is doing, which is horribly. the absolute wrangling, the shut down of the government was horrendous for our economy. which do we blame, obamacare for durable goods, do we blame weather, do we blame the cutoff in unemployment benefits? one thing we can't do is say the government is doing anything to help. >> there's the opening bell. >> the real story in my mind is tim cook still confirmed that they're going to have some big product announcements this year. and the one i'm watching for is in mobile payments. >> generally i think that there's been pretty broad support for a hike in the minimum wage that's reasonable that enables them to continue to grow their business and get quality employees.

good tuesday morning. we're live at post at the new york stock exchange for the first time in five, six day or so the dow finally hanging on to green arrows. up triple digits not too far from the levels at 15932. s&p has cloued its way back to 1793. shares of comcast are rallying after fourth quarter revenues beat estimates. comcast raising the dividend 15%. increase the stock buy back program to $17.5 billion. a quick disclaimer, come cast is the parent company or cnbc. shares of d.r. horton are rallying. up in orders up by 4% year over year. road map goes like this. we'll start with apple today. shares down after the tech giant missed expectations despite selling a record 51 million iphones in q4 and things may get worse. they offered some weak guidance for the first quarter of the year. >> meantime, shares of ford are in the green after its earnings beat estimates. ford cfo is here to tell us why

kn north america and asia led higher in an exclusive. >> plus, tonight, the president will give the state of the union address and the speech is set to put a focus on inequality. bob corker will talk to us about what he wants to hear from the president. back to the news of the morning. apple is having the worst day in a year after a company revealed iphone sales missed estimates. company lost around $32 billion in market cap from today's move alone. but is this now a chance to buy? brian marshall is an analyst with isi, strong buy with apple. channing smith is an apple shareholder, portfolio for capital advisers. good morning to all of you. >> good morning. >> a lot of analysts beginning to turn their back on them. oppenheimer, why keep the buy or the strong buy? >> well, carl, i think at the end of the day the valuations pretty attractive. they have about a third of their market cap in net cash and we're in front of what we refer to as the mother lode of all apple

upgrade cycles. the upgrade to the iphone 56, the larger irkiphone. $500 is not the time to throw in the towel. >> why is this the mother lode? >> because if you look at it, you know, most of the smartphone subscribers of the iphone are basically upgrading every two years. so last year we estimate that the iphone 5 shipped about 40 million subs. all of those guys are probably going to be willing to upgrade to the iphone 56. we think the demand for the iphone 6 is going to be tremendous when that comes six, nine months down the road. >> bryan and channing, let me direct this toward channing. i'd want you to take a look at a chart here. based on question about apple's performance. right here i've got a chart showing apple's iphone sales. we can see what has happened right here in the most recent quarter. 51 million iphones, the most

ever but up just marginally from a year before. got it on my ipad here. let me zoom in. right? and we've got these big dips showing up during the year. when you factor in all of that, when you factor in the fact that they've expanded distribution in china and japan, the question is, how much growth potential is there really even considering that upgrade cycle coming. brian? >> well, at the end of the day, you know, what we saw is low 10% growth. so the smartphone industry is growing 20%, 30% year over year. the iphone is growing 7% in the most recent quarter. so what it tells you is that ap ships 200 million smartt phones into a $2 billion unit market but dominate the high end of the market so there isn't that much growth at that high end. i think unfortunately what we're relegated to is a replacement cycle story largely versus sort of new subscriber growth for the iphone. >> channing, as we're speaking,

the coincidence, the timing makes you shake your head. carl icahn just tweeed, bout bought 500 mm more am shares. my buying seems to be going neck and neck with apple's buy back program but hope they win that race. as we all are sure he does. what do you make of where he's coming from and how much ammunition did last night's quarter give him? >> i think he'll continue to buy. is that for me? >> i was asking brian, but go ahead, channing. >> sorry. >> no, i think he will continue to buy. i think what's interesting here and it's been touched on is management is really limiting the business model to the upper end. that's going to hurt volume and unite growth but it's going to preserve profitability as we saw with the gross margins. the smartphone market is getting saturated. you're going to see a lot of growth investors exit the stock and we're probably going to see a lot of value investors come in. there's going to be a couple

months of churn here. i don't see the catalyst until summer. maybe we get mobile payments. until we get new products in september. i think it's -- we're in a similar situation we were in last year. disappointing quarter. we have worries. the worrys last year were gross margin deterioration, product unknu innovation. >> channing, that is a question that i have, is expectations. i mean, given how successful happenle has been up to this point. new products is going to be wearables which could be high volume but probably lower margin or television which are going to be lower volume but potentially higher margin. are we right to look forward to new products as being a real needle mover or might it take a while even once we get new products? >> you know, if you look at the new products we're not excited about the watch or the tv. i think the iphone, if you look at from that unit it's the most profitable. i think that's why investors are so concerned. when you see north american

sales year over year decline, can this business be a great stock, a good business model? absolutely. but it's probably no longer the growth stock that it once was. growth is going to slow. the company is going to focus on profitabili profitability. carl icahn is going to do his thing. will the stock perform? yes. we think it's dead money for the next three months. as we move into the last part of the year we might see a rise. it's going to be a good stock but not a great stock anymore. >> channing, brian, thank you. as iphone sales slow apple is increasingly counting on display technology to lure customers. that has certainly elevated the importance of corning. the top supplier of glass for high-end phones. today they reported profit that jumped. corning's vice chairman and cfo gin joins us now for an

exclusive cnbc interview. what do you see about this gorilla glass that is used for iphones and ipads? >> demand for gorilla for smartphones and tablets was very strong in quarter four. the only disappointment that we saw was real think new touch on notebooks. but we believe this upcoming year we will see good growth from smartphones and tablets. we're expecting our volume from gorilla to grow 30% this upcoming year. >> is that going to be driven mostly by apple or also increasingly your partnership with samsung? >> well, we sell to almost everybody in the supply chain. we don't name individual customers but obviously apple and samsung are very large customers to us. we sell to other people, also. but we expect to see growth across the whole smartphone area. and as you were commenting we're focused on how we get gorilla on low-end phones, also. but we expect gorilla to have a

strong year in 2014. >> jim, it seems that gorilla glass might be facing more competition from sapphire glass which apple is using to cover its touch id sensors, potentially looking to do more with it. what are you guys doing with sapphire? potentially other materials to be even strocker than gorilla glass? >> well, sapphire today is used primarily as a lens for the camera or the touch sensor. our job is to make a gorilla product that's better than sapphire. we think sapphire has a number of weaknesses. number one, it's at least ten times more expensive than gorilla. it transmits less light. it's heavier than gorilla and it's thicker. it does have better scratch resistance but it can fail when it has any kind of scratches. our job is to innovate and we believe that we will bring out another version of gorilla that will be very good for our

customers and be better than sapphire. >> what are you seeing in terms of i innovation and demand on customers on kurcurved glass an wearable glass technology? >> well, wearables are essentially an lcd with a cover glass on it. we already have gorilla glass on top of some of the wearables today. for example, like the samsung watch. on the curve televisions that you saw at consumer electronics, that's our normal lcd glass used in most of them. if it's an o led it could be the lotus glass. so we are going to be in curve televisions. we believe that the ultrahigh definition televisions that you're starting to see will, over the next couple of years, spur replacement cycle in television. so we remain upbeat about lcd televisions. actually the area of growth televisions this past year grew about 10%. >> all right.

le well, thanks for joining us with color on those results. jim flaws, vice chairman and vfo for corning. >> scratch resistant window. >> scratch resistant window. very good. clever, john. meantime, take a scratch resistant look at ford in the green this morning after reporting a best year in its history. what went right in 2013 and what might go right in 2014? plus, icy cold weather returning to the midwest. in fact, the windchill in chicago could reach negative 40 tonight. but our own rick santelli is braving the elements, none the less. >> wow, is it cold in chicago i'm here in minus ten below. that's without windchill. add in windchill, probably around minus 25. it's pretty cold out here. a lot of people taking hot water, throwing it and it almost freezes into ice cubes before you even know it. i guess it's better than the ice

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sales figure. rounding off the top five, we have abbvie and cardinal health ford beat the street but not really igniting the stock this morning. the automaker coming off the second best year in recent memory but emerging markets have the company leaders worried. phil lebeau joins us with another first on cnbc interview. this one with bob shanks, ford cfo and the counsel. take it away, phil. >> bring in bob shanks rights now from headquarters in dear born. you capped 2013 calling it perhaps the second best year ever for ford motor company. a lot of people are looking at the results. you beat the street by three cents and saying is this as good as it gets for ford? >> oh, no, i don't think it's as good as it gets. certainly in 2014, you know, is going to be a building block year for us in terms of better growth and growth in '15 and beyond p this is a great year.

best in our history and so many accolades we could talk about. very, very strong year and sets us up well for what we're going to do this year with a launch of new products including the ser isries for that stronger growth and results in '15 and beyond. >> and let's talk about the f series because this is what concerns a lot of investors. you're going to bring down your fer isries production by 11 weeks here in the u.s. and a lot of people are saying is that going to be all or is there a potential that you may have to bring down f series production longer and do you have enough inventory built up to manage this as smoothly as possible? >> we are going to be taking down time for changeover of about 13 weeks. 11 is at dearborn, two weeks at kansas city which will then launch in '15. no, we think that the team is completely prepared and ready for the all new f series launch. we think we've got adequate stock. as you know, the two plants

we're building with three crews today. we think we're in pretty good shape throughout the course of the year and satisfy demand and feel ready and extremely excited given the reception we saw in detroit to reveal of the all new product. in good shape on f series. >> bob, let's talk about emerging markets. how concerned are you about what we're seeing in these markets and how much is it impacting your bottom line? >> well, it's a concern. we've been there before. i mean, we've been in argentina, for example, for 100 years. so we're used to these types of situations. but you have to live through them. and what we're seeing in the case of argentina and venezuela in particular, there are differenter shus but policy related from the respective governments. in the case of argentina where we've seen a lot of news lately, high local inflation, accelerating depreciation, and we're just going have to deal with it. we know how to do that but it's certainly, you know, gives you a pretty bumpy ride while you're going through a cycle like this.

>> on the flip side, let's talk about china. this is becoming rapidly the second most important market in the world for you guys. eclipses europe in many regards for a lot of people. when you look at china and people see the economy slowing down there, you're still bullish in terms of the auto market. you're starting to go into a bit of bifurcation there, iright? >> the market there is booming. we're starting to see the gdp growth in the 7 1/2 'range. we still think we're going to have healthy growth there as they transition from a consumption driven economy. we had fantastic growth. about 50% in terms of volume year over year. expanding the portfolio. we still have four plants under construction as we speak. two will launch in '14. we're set up for even more growth in the years ahead. and the reaction of consumers to the products and the brand there has just been mind boggling. it's so exciting. >> bob shanks, cfo of the ford

motor company in dearborn, michigan. this is a day when a lot of ford investors are looking at the stock and saying, what, second best year ever and we're not getting much of a bounce. keep in mind, they did guide tin vestment community down last month. so that's why you're still seeing the stock. it's going to take a while before they start to see make some acceleration there. >> funny you say that, phil. some tweets read just like that, word for word. thanks so much. is the beard a major threat to razor companies everywhere? as you moiight have heard, p&g says the grooming sales were essentially flat thanks to the no shave november movement better known as movember. should they fear the beard? we'll will ask one of them in a moment. you make a great team.

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razor sales are not booming. a shift to disposable raisers and movember movement. is november hurting razor sales across the board? let's ask jeff and andy, co-founders of harry's which is now 10 months old already. the razor and blade start-up guys. great to have you back at post 9. the cynic in all of us makes us think that p&g is looking for an excuse. did they? >> maybe even before we start we should look back and tell people about what we do. remake our observe brand of exceptionally high quality razor blades we sell to our consumers on our website, harry's.com. we do that for a fraction of the price of leading brands. >> we are in saelsz, man. no doubt about that. you can take your question and shove it.

but does this dynamic, is this for real? did you see any of this in your recent results? >> well, you know, our business has been performing great. you know, we've acquired over 100,000 customers to date in the first ten months and traffic to harrys.com is way up. we haven't seen any market effect. >> we see tremendous business. >> this is a subject that is near and dear to my heart and head. i've tried some other kind of off-brand types of razors. usually had a disappointing experience and gone to, you know, brand a which you guys say is over priced. what's your method of convincing people that these german engineered razors you are are really that high quality. >> i think for us we actually just purchased the german factory that makes our razor blades. and so we've gotten to be very deep into the razor blade making process. it's actually incredibly hard to make great blades. they have to be strong at their base and sharp at their tip to give you a great shave. we want to make it affordable

for you to try harry's. for us, more than 50% of our customers have come back and purchased for second time after they tried it for a first time. we've got a lot of conviction that people love the product. >> what's interest second quarter the disruption aspect about what you're trying to do. i know that you guys were parker, that whole disruption of the model with eye glasses. you're going up against other giants here, gillette and schick. what makes you think you have an opportunity and how you taking what you learned with parker and doing it with razors? >> i think what's awesome about our company is we are the first vertically integrated brand from the sense that we do everything from manufacturering the product now that we own the factory to having direct relationship wsz our customers and it creates a positive feedback loop where we're able to take that information from our customers and feed it back to product development and make sure we can deliver the highest quality product and do it as sufficiently as possible which is who enables us to feel half the price. >> are you feeling the ability

to raise price it is you wanted? >> i think for us instead of raising prices, you know, what we want to do is make sure we continue to maintain incredible value proposition for our customers and -- that could mean raising prices even if you come in under where your competitor might be, right? >> sure. we're pretty dedicated to making the product really affordable and for us it's really important in terms of building a trusting and loyal relationship with our customers that we keep prices as low as we possibly can. >> yeah. we want to have an honest contract with them. we want them to know that we make a little bit of money they get a great deal and everybody comes out ahead. >> who are your customers? are they younger? >> they run the gamut but they tend to be guys who care a lot about how they look and what to really take care of themselves and, you know, want to feel proud shaving every morning with a product they like. >> we were just joking the day you guys come in with a little stubble --

look how well he save shaves up. >> women's legs, next, guys. world market? >> jeff, andy, thank you for coming in. congratulations coming up on a year. that's great. >> thank you very much. the bells are about to sound across europe. just a few minutes left in europe's trading day. we'll bring you the latest details on the close and impact on u.s. stocks. first, rick santelli, come inside from the frigid cold and watching the federal reserve. >> yes. we're going to talk about the last mean meeting from ben bernanke and income inequality and why you have to pump your own gas. who are we going to discuss all of these issues with? jim, the man, from one economist i don't mind standing right next to. bottom of the hour right after the break.

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markets are closing across europe. not coincidentally. we'll see if it has an impact here in the states. well already off our highs. paired our gains in half. europe is climbing back from the biggest three-day decline since june of 2012. for the full year, gdp showed 19, the strongest since 2007. some of the spanish banks among the big winners. some reports say spain's is

supposed to grow close to 1% of this year. shares of seem members on the rise. germany's second biggest company at higher margins. 20% increase in quarterly net. siemens ceo is going to press on with the price cuts. in europe, partly because turkey's central bank would hold an emergency meeting later today. everybody is watching turkey. cnbc's national correspondent michelle-caruso cabrera is joining us on the phone in turkey. you just arrived there. >> we're just a few hours a way from the announcement on the central bank. if you had any doubt how much pressure the head of the central bank is under, politically here in turkey, i want you to look at the front page of one of the newspapers that supports the prime minister here. there is a photo of the head of the central bank tantd head says, don't pike, stand firm. we have 5 1/2 hours away from

announcement by the strashl bank where we think they are going to do the opposite. they're going to raise interest rates twibetween 2% and 5%. it's important to understand though that in turkey central banking is political. there are several interest rates set by this turkish central bank. someone political. one is actual. there is a printed level corridor for interstates here in turkey but no one pays that. actually there's a much higher rate that they set for extraordinary days. and that's the number that if you're a primary dealer or you want to try to buy money from the central bank, that's the rate that you have to pay. why would they do that? so that way when they say, oh, what's our official policy rate? it actually looks much lower than what they're charging in the market. central banking here is extremely political. to try to offset that, the head of the central bank had a news conference today saying he would do whatever it takes. repeatedly referring dot nmgs of the central bank. he's got a lot of pressure on

him tonight at midnight local time. they're doing that supposedly because one of the numbers of the committee had to come back from new york and they wanted everyone there physically. many in the market believe they were doing that to simply make the announcement when most of the major markets in the world are closed. >> we will continue to check in with you. a lot of pressure on one hand politically and on the other from the markets. i know the lira has gotten some relief. india raised interest rates. michelle caruso-cabrera reporting from turkey. bringing in courtney reagan with what is moving here on the stock exchange floor. >> everybody ties together, everything that michelle is saying and what we anticipate will happen out of turkey is making u.s. investors feel a little better. if we can look at the s&p 500, started the day higher. moved beyond 1791 which was a technical support level.

fell back a little before moving again higher. shrugging off the disappointing durable goods number. perhaps paying more attention to the case shiller number and the stabilization from emerging markets. if you look at the trans ports versus the industries. transports out performing the industrials. led in part by the airlines. we did get southwest adding three additional international locations or their first international location getting an upgrade. delta air lines, american airlines not part of the transport index, traded on the nasdaq but moving higher on the back of strong earnings reports there as well. if you look at the sector breakdown we are led today by health care and financial finan. we've got eight sectors positive. two sectors lagging. look at waters, they make the analytical technology devices and different programs that are used by health kare companies. trading at levels not seen since 1995. really helping to lift the entire group. if you just take a look at some

of the tech laggards we have to point these out because the numbers are pretty big. seagate down. apple down as we've. talking about and corning down. the cfo was on earlier. it want to give you a check back in on that. we do have breaking news here. let's get back to scott wapner at headquarters. >> carl, thanks. fresh off buying $500 million more in apple stock, carl icahn telling me just a short time ago the following. over the years i've made a great deal of money buying on these dips of companies i think are no brainers, especially when i think the reason for the dip is completely misinterpreted. carl goes on to tell me, in fact, i believe there was a major positive in apple's message when tim cook stated within the year new products and new categories will finally be introduced. it should be noted the last new product in a new category was introduced four years ago. it was called the ipad. he says the long-term picture at

apple is completely unchanged. to me, it is even more compelling for apple to buy back stock now. it should also be noted, carl, from the earnings yesterday we learned the that the cash hoard at apple had gon grown to $159 billion. if you back it the cash here it's trading eight times earning. thus, to the folks over there, carl specifically, that 86 now for apple to do that buyback. he's had a chance to get the earnings with his team. he clearly voted with his wallet. >> scott, having some audio difficulties. we think we got the construction of your report. there have been some discussion that the so of called half life of carl's tweets may be shortening because apple saw a mild pop and basically -- >> interesting pattern from carl icahn. >> i'm not suggest that carl is interested in that to any degree but it's something that people

are watching among day traders and short-term investorses. >> he's continuing a theme that it's a no brainer. loading up on apple. he doesn't question the innovative siinnovate ive cycle. the fed is going to announce another 10 billion reduction in bond buying program. rick santelli is in chicago with more. hey, rick. >> hi, carl. yes, i'd like to welcome my guest jim bianco. you heard carl. everybody expects that the fed is going to add to the reduction on the taper. you and i have always had the same mission statement, the fed wants out. elaborate. >> yes, the fed definitely wants out. when hilsenrath put in the paper last week, the fed is going to go ten billion this meeting, probably ten billion the next meeting. i think it's starting to affect the markets. as you move up the risk curve, the fed buys bonds so we don't have to. push everybody out. what's the end of the risk curve? emerging markets. with where are the producting starting to come? emerging markets. why in the last few weeks? because the market is starting

to realize the fed is serious. they're going to go 10 million every meeting and that's where it starts. it starts at the riskiest assets. >> you agree with that, don't you? i snow i do but you're more important. you're the desk. >> absolutely i agree with it. this emerging market instability we've seen, there are other issues with it. but don't descount that it also has something to do with the fed. i know the fed says it's not their problem but they are in some respects causing it. they pushed everybody out the risk curve and now that they want to pull them back, they shouldn't expect it. we saw this within the last summer when we first started talking about tapering. it's not unique. >> state of the union tonight. one of the main themes, the tables being set for the disparity in wealth and income. you know, i still can't believe we're talking off camera. when it comes to creating wealth the fastest way to do it is through financial investing and what is the federal reserve done to those investment vehicle snsz. >> pushed them higher. >> they pumped it up, baby! >> absolutely. the fed wants a wealth effect.

>> they can't have it both ways. if you don't want so much disparity get ben bernanke on the phone or go the other way, if this is a good plan and wealth has that trickle down effect, well, then that's the way it is. that would change all the tax issues we're constantly debating. >> absolutely. he can't have it both ways. if he wants to push wealth in equality maybe say janet yellen, end qe as quickly as possible. it's the biggest wealth inequality machine that we have going today. >> you're an economist. it's the minimum wage and off camera we were talking. okay. raise them t. minimum wage. you know what's going to happen? all the fast food restaurants are going to go to automated menus. you brought up the greatest example i've heard in the last time. >> when was the last time you did not pump your own gags. there are no full-service gas stations anymore. minimum winage priced them out.

a minority of studies tend to get a lot more press. if you raise the cost of something, entry level jobs, you get less of them. it's basic economics. >> thanks, jim, for taking the time on this first day of two-day fed meeting. mr. ben bernanke's last. guys and gals, back to you. >> all right, thanks very much, jim bianco, rick santelli. and up next, as they were discussing president obama is set to give his annual state of the union address and they are set to talk. there will be a lot of talk of income inequality. what are republicans actually want to hear on this issue? and from the president, we'll ask republican senator bob corker in just a moment. ♪ ♪

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coming up on the half time show, resources active today as one hedge fund manager pushes for major changes. we're going ask that activist donald drapkin what he wants from that company when he joins us excluesively in the next hour. and another stock that's getting slammed, apple. what went wrong and we're going to talk to a top tech fund manager and what he says is better for your money. and super bowl is all about the commercials. we're talking to one company who

is making a million dollar bet on a spot during the game for the very first time ever. carl, we're going to have the latest on this conversation i had with carl icahn just a short time ago about apple, calling the long-term picture there completely unchanged saying it's more compelling for that company to buy back stock now. see you in a few. >> lining up the twitter verse as usual, scott. thank you. meantime, the president set to address the nation tonight outlining his plans for this year's agenda. the latest nbc/"wall street journal" poll shows that americans disapprove of his approvement so far. keep that in mind, what can we expect from tonight's state of the union? let's bring in republican senator of tennessee bob corker a member of the senate banking community. always great to see you. good morning. >> carl, good to see you, sir. >> the wall street post says this is going to a landing point -- a launching point for a year of sustained assaults on republicans. how likely do you think that is? >> oh, carl, i don't know. you know, i've been here seven

years. and i've heard both republican and democratic presidents and i think these speeches would be much more transparent if you just had the chief pollster for the president give the talk, okay? i mean, these are really poll tested comments. you know, i go out of respect for the office of presidency and respect for the constituents that i represent. but it's a pretty painful evening no matter who is talking. so we'll see what happens. >> how do you feel about some of the bread and butter issues that are expected to come up? minimum wage, early childhood education, college affordability. >> yeah, so again, carl, you know, these are poll tested talks. i don't really care so much what's said tonight. i care what we do. and i would hope that what the president would do over the course of the next period of time is take advantage of where we are economically and deal with the fiscal issues of our nation. deal with some of the bred aad

butter issues that will move the country ahead. i hope he will show the courage and leadership and hard work that it takes to bring our nation to the and not continue down this path of, again, using poll tested comments, doing things that basically divide us for electoral victory. but, look, i think we know what probably will happen. i'm going to continue to working on the fiscal issues. the trade opportunities that we have and hopesing that the president will take on his base and move us ahead in that way over the next year. but again, this will, i'm sure, will be more of the same. by the way, that's a bipartisan observation that i'm making. >> senator corker, i wonder what you think about the president and white house leaning towards more executive action. president going at it alone without the help of congress for issues that are most important to him. >> yeah, again, as i mentioned, look, to lead a great nation like ours it takes courage, it takes leadership, it takes hard work.

you could always take some hort cuts like he may allude to tonight. but those are not the things that move the nation ahead. and i think we've seen the result of that type of activity over the course of the last several years. that's why you have such pessimism in our nation. what i would hope the president would commit himself to do with just three years left in his term is to really get that hard work and to really work legislatively to solve the bigger issues that we have. i'm afraid that based on the leaks and the kinds of pre-speech statements that have been made that's not what's going to happen. what our nation needs right now is that. and i hope somehow the president will move himself ahead at some point to do it in that manner and not the divisive way of taking executive orders and doing things again that candidly don't bring the nation together. >> are you convinced after all this time, senator, that any kind of additional outreach to the hill would actually be rel

received? >> well, i think we've got tremendous opportunity, carl. i really do. the trade issue is one of the wiggest opportunities we have, both the tpp and the european u.s. trade agreements, outstanding opportunities if the president will deal with this base and move this along. so yes, i do. i think we've got opportunities with immigration. i think if we can focus more on those things that unite us as a nation, the country's pessimism would dissipate but we can also move ahead. again, unfortunately this speech will, i promise, it will be totally poll tested towards the november elections. and i just think, again, what a shame of just three years left in your presidency, at least that's the indication that we're getting relative to this evening. but again, that's what presidents on both sides of the aisle unfortunately have done for so many years with these state of the union talks. and almost wish they would just send a document up to us and

avoid all of this hype, if you will, that we're going through right now. >> we're definitely going to go through with it, that's for sure, senator. thanks for your time. see you soon. bob corker of tennessee. keep it rig here for all of your state of the union coverage. i'll anchor along with kelly evans tonight. it all begins at 9:00 p.m. eastern time here on cnbc. have a look at shares of pfizer and seagate now making major moves on opposite directions. stay tuned because the earnings squad is here to breakdown that and more earnings you need to know, next. [ male announcer ] here's a question for you: is your tv powered by coal? natural gas? nuclear? or renewables like solar... and wind? let's find out. this is where america's electricity comes from. a diversity of energy sources helps ensure the electricity we need is reliable. take the energy quiz.

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squad. morgan brannon and herb greenberg who made it to the east coast. let's start off with seagate technology. the stock is declining on the back of earnings. second straight quarterly miss. the guidance is below consensus. gross margins came in disappointing the street. what is more concerning to investors is that there are questions as to whether the guidance was conservative enough. it's been trying to diversify the issues. come modity business overall but aquirtd a company which posted its own terrible fiscal fourth quarter results. a lot of investors at this point is saying what is seagate buying into and you see it in a stock that has been along with western

digital. >> this is a company that's done a lot of buy backs in the -- as stock falls will it hit the buy back level? we don't know what the average price was until we see the 10 q or goggle it? >> let's talk about pfizer reporting better than expected fourth quarter refrigerator knews. you've been following this one. nice pop in the stock. >> 3% after the market opened. we saw earnings per share beat the street by four cents. revenues came in higher than expected. it's right in line with analyst expectations. that's the good news. also a $5 billion buyback for this stock this year. not so good news, 59% profit plunge in the fourth quarter. that versus 2012 over the same period. keep an eye on that because we're seeing a patent like lipitor in europe and viagra. >> it's a company that's been dealing with the patent for years now and investor are looking through to the pipeline.

that's it for us. back on street signs with your earnings preview. up next on "squawk on the street," bitter cold as we're turning to the midwest in chicago and minnesota. the windchill, get this,is expected to hit 40 below zero today. we'll see what conditions are like on the ground when "squawk on the street" comes right backa . with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today.

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better cold is returning to the midwest with windchill expect toetd hit a mind-boggling 40 degrees in some places today. the weather channel's janel klein is live in minneapolis where it's partly sunny, negative 9 degrees. >> negative 9, sarah. it is feeling at least that. actually windchills in many parts of minnesota are pushing negative 30 today. it is a rough day out here. one that unfortunately people in the midwest are getting used to. here in minneapolis this is the 27th day since december 1st that has been below zero. hard to believe that it could be that cold but it has had a big effect on many things including school schedules. this is the fourth day for most districts in minnesota that have been closed since january 1st. really a tough, tough stretch here of winter. of course, we're only into

january. this past weekend it was especially bad with whiteout conditions in certain parts of minnesota. one of the major interstates, i-94, a portion of that was closed. a gas explosion, a pipeline explosion just south of winnipeg that was a major source for energy for much of the midwest causing many people to lose heat all together. 100,000 customers effected by that and even those that did not get directly impacted were asked to turn their thermostats down to 60 dreesz egrees to help wit situation. that could not have come at a worst time as temperatures continue to drop. we will see a little bit of a warm-up tomorrow. temperatures in the 20s. and then it will drop back down again to single digits going into the later part of the week and the weekend. this, again, has been one of the most recent cold snaps but certainly not the only one. definitely a tough winter for minnesota, even those who are used to the cold weather are saying they are losing their patience. a rough year so far, carl and

sarah. we're hoping it's going to get a little bit better here. >> eventually we're pretty sure it will but it might take several months. tanks so much, janel klein. >> negative 4 in chicago sglun believable. the south is not going to get out of it, either. let's turn it over to scott wapner and the "halftime" with breaking news on icahn and lo a. lot more, too. >> we'll be following the apple story and what carl icahn was telling me. and nasdaq, if you talk about at what's on with apple you have to talk about the nasdaq coming off the worse three-day percentage drop since june of 2012. >> although some of those momo names managing to hold on to love today. >> yep. follow those as well. have a great day. welcome to the "halftime" show. following the biggest stories. activist action, hedge fund casablanca capital, big changes at cliffs natural. we're exactly what he wants. appl